Bits of history

Came across the following statistic: in the First World War, 5% of deaths were civilians. In the Second World War, 65% of deaths were civilians. Civilian death tolls of that order of magnitude had been absent from European conflict since the Thirty Years War (1618-1648). But, after the Leninist coup of October 1917, the notion of evil-by-category was again alive and well in Europe – with (secular) inquisitions, heresy hunts (for people, ideas and publications), auto-de-fes (aka show trials) and all. The Eastern Front in the Second World War was like rival Albigensian Crusades with tanks, guns, aircraft and gas chambers (and Soviet and Nazi slave-labour instead of serfs). Or, at least on the Nazi side, steppe-nomad pest-control peasant-clearing imperialism updated. Genghis Khan with a telephone in Tolstoy’s famous (though perhaps apocryphal) fearful prediction.

Not that Anglo-America can get too superior; the Bombing Offensive was the equivalent of the medieval siege, with airborne high explosives and incendiaries rather than trebuchet-thrown stones and dead flesh, fire-arrows and arson-filled city sackings.

In The Voices of Morebath, a lovely examination of early C16th parish life by Eamon Duffy I reviewed in my previous post, he writes (p.67):

Routine, in any case, leaves few records, even though most of what is fundamental to ordinary existence is a matter of routine – undocumented, invisible and, as a consequence, far too easily discounted by the historian seeking to touch the texture of the life of the past.

We think of the medieval Church as an authoritarian and hierarchical organisation. But what has struck me about Morebath is the democratic and locally-grounded nature of parish life. It is full of elections, disputes and striving for consensus, with the poorest cottagers willing to dig their heels in and stand up for their perceived rights. Of course, England was well and truly a post-serf society by that stage.

I guess we should be careful of thinking ourselves too superior (or too different) to our ancestors. It is also why I love history so much: in revealing our past it also tells us so much about our present, not least by revealing who we are.

Books on medieval history: the wide and the specific

The Making of the Middle Ages by R.W. Southern is classic "wide scope" history. In the mid-C9th, Ibn Khurradadhbeh described Western Europe as a source of "eunuchs, slave girls and boys, brocade, beaver skins, glue, sables and swords" and not much more. This is the classic, highly readable, 1953 summary history about how Western Europe clawed itself up out of the Dark Ages, moving from a situation where simply retaining past knowledge was a losing struggle, to the emerging of a new questioning of the world around them. Southern is very much concerned to place mental outlooks (his prime interest) in social contexts. A great read.

By contrast, The Voices of Morebath by Eamon Duffy is a fine piece of "narrow scope" history. For, if Southern gives a grand sweep of the beginnings of the Medieval period, Duffy provides a wonderful, evocative examination of a single parish after the end of it. Using the original parish account book of the time, he traces the impact of the Reformation on a single parish – Morebath in Devon – under a single priest – Sir Christopher Trychay, parish priest from 1520 to 1574 (the 'Sir' is just a customary title of respect). He was their priest from when traditional Catholicism – with all its rich panoply of saints, devotions, and local structures to support that (the elected Parish officers, both general and those specific to the accounts of particular saints) – held sway through Henry VIII’s break with Rome, Edward’s vigorous, highly intrusive, reforming Protestantism, Mary’s Catholic restoration (clearly popular in the parish) and Elizabeth’s milder-but-firm Protestantism.

The degree to which the English Reformation was a rationalising, and institutionally ‘flattening’, imposition from above is very clear – most of the Parish offices fell by the wayside, tied as they were to the cults of saints. An imposition which was financial (both in money extracted and obligations imposed) as much as doctrinal. The degree to which the Reformation was – as so many political struggles with strong ideological elements are – a fight within at least as much as between people is also very clear. Not least in the personal history of their priest who goes from avidly trying to get a relic of a local saint, and Latin masses at the altar, to presiding over the rooting out of such saintly devotions, and the wealth laboriously invested in them, while giving communion at the communion table. All this with an interlude of, almost certainly, encouraging young men of the parish to fight in the Prayer Book rebellion of 1549 against the Edwardine stripping of the altars. Yet this was no ‘Vicar of Bray’, merely a decent man trying to do right for his people of his parish.

No book has given me as rich a sense of the nature and ‘feel’ of the Reformation, and the nature of late medieval Catholicism, as this one.

At least they get the bridge

An African infrastructure minister visits an Asian colleague. The Asian colleague lives in a magnificent mansion. "How can you afford this on your salary?" asks the African minister. His Asian colleague takes him to the front window and points to a large bridge across the river. "See that bridge? Half of it, mine" says the Asian minister. The African minister looks thoughtful.

Some time later, the Asian minister visits his African counterpart. His African colleague lives in a palace far more magnificent than the Asian minister’s residence. "How can you afford this on your salary?" asks the Asian minister. His African colleague takes him to the front window and points across the river. "See that bridge?" he asks. "I can’t see any bridge," responds the perplexed Asian minister. "That’s right," replies the African minister, "All of it, mine".

And that, is the difference between foreign aid to Asia and Africa – at least in Asia they get the bridge. A lot of foreign aid is just handing money over to exploitative and corrupt elites. Not only does it fail to bring prosperity in its wake, it entrenches failed arrangements. Why go to the painful effort of institutional change, when this ‘free money’ comes in? Such "aid" helps keep people poor.

Talking to folk knowledgeable in the field, publicly-funded indigenous projects in Oz tend to fall into two categories; the good ones are "Asian" projects, the bad ones "African" projects. And there are a lot of "African" projects. With their own, home-grown, taxpayer-funded corrupt and exploitative elites. Funding which keeps people poor by throttling needed changes. (Read Why Warriors Lie Down and Die by Richard Trudgen for the full horror.)
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Yet to raise this is to be ‘anti-indigenous’ even ‘racist’, it’s ‘blaming the victim’. And so the waste and exploitation goes on. Noel Pearson, being black and Mr Land Rights, gets permitted by the ABC and others to say things which need to be said, that they wouldn’t let anyone else say.

It is also partly why the asylum-seekers became such a cause celebre. Indigenous Australians stopped being comfortable territory for progressivist pieties, so a change of mascots occurred. (It's not as if the problems of indigenous Australians got any less urgent, they just became less fashionable.)

The lack of reciprocity is a general problem for income-dependence. In the CIS’s Australia’s Welfare Habit a study is cited of thousands of young Australians who turned 16 in 1996 which found that, by age 19, those raised in welfare-dependant households were three times more likely to become homeless, four times more likely to become teenage parents and five times more likely to end up on welfare benefits. Welfare literally breeding welfare.

Noel Pearson got along quite well with both John Howard and Mark Latham. But then, they had common enemies. And common concerns.

Marriage, a History

Stephanie Cootz’s Marriage, a History: How Love Conquered Marriage is a clear, well-written, well-researched and extremely enlightening history of marriage.

Coontz’s basic thesis is that marriage can only be understood historically. That is, marriage in Western society has always been an institution “in motion” and never more so than in the last two centuries. A continuing theme is that marriage reformers and marriage conservatives have both tended to be right and wrong. The reformers have tended to be right about the problems of marriage, the conservatives that various changes would weaken the institution—at least in terms of coverage and stability. The result is that we have ended up with a situation where marriage as an institution is quite fragile yet there have never been so many good marriages, clearly beneficial to both parties (p.309).

Marriage is changing so fast, popular perceptions can be quite out of date. For example, tertiary educated women are now more likely to be married—and more likely to have happy marriages—than low-income, low-skill women (pp 286ff). The pool of potential husbands for the latter being of higher risk and lower benefit (pp 288ff).
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The book is in four parts. The first looks at what we mean by marriage particularly traditional marriage. The second examines the history of marriage from the ancient Fertile Crescent to the elevation of marriage by the Reformation. The third looks at the “love revolution” in marriage across the modern era up to the end of the 1950s. The fourth looks at the collapse of life-long and universal marriage. Then there is a concluding chapter on the current prospects of marriage.

I particularly enjoyed Coontz’s discussion of the profound difficulties anthropologists have had coming up with a definition of marriage. The vast array of human cultural forms resists easy categorisation. I especially enjoyed the discussion of the Na people of southern China, the only human culture known to have no equivalent of marriage. Brothers and sisters live communally together, brothers help raise their sisters’ children and erotic liaisons are casual, after-dinner, affairs (pp32-33). The problem is, all the things one might identify as being about marriage—impose an incest taboo, organise child-rearing, care for elders, coordinate household production, or pass on property to the next generation—individually can and have been done by other mechanisms in one society or another. The one thing very specific to marriage is—it’s the only way to get in-laws (p.33).

The invention of marriage seems to have occurred because

having a flexible, gender-based division of labor within a mated pair was an important tool of human survival (p.38).

The shift to sedentary and then agricultural living, wherever it occurred,

was accompanied by a tendency to funnel cooperation and sharing exclusively through family ties and kinship obligations and to abandon more informal ways of pooling or sharing resources (p.45).

The shift to economic life being based on assets which could be accumulated, inherited and were most productive if specifically owned (land and herds) clearly drove this.

One of the most powerful aspects of the book is the way Coontz puts things in context. Economic and social pressures are explained and their effects on marriage—and on men and women—are clearly set out.

For millennia, the manoeuvring of families, governing authorities, and social elites prevailed over the individual desires of young people when it came to selecting or rejecting marriage partners. It was only two hundred years ago that men and women began to wrest control over the right to marry from the hand of parents, church and state. And only in the last hundred years that women have had the independence to make their own marital choices without having to bow to economic and social pressures (pp 48-49).

There is a huge amount of enlightening detail in Coontz’s book. She has been researching and writing on marriage for 30 years and her command of the subject matter shows—for example, her references to what women wrote in their journals at different periods in history. Marriage, A History is, indeed, the most profoundly informative book on women in Western society I have come across.

I particularly enjoyed Coontz’s calm, informative tone. She enlightens without preaching and is all the more persuasive for it. Thoroughly recommended.

Over-supplied with law and under-supplied with courts

It is a characteristic of modern democratic states that they are over-supplied with law and under-supplied with courts. Medieval England would have had a least one judicial officer per village: so maybe one judicial officer per 300 or so people. There were expenses and dangers involved in "going to court" but the use of courts, at least at a basic level, was remarkably accessible.

Victoria has a population of 5.2m. Even if we specify one judicial officer for every 500 people, that would mean over 10,000 judicial officers to provide a comparable level of accessibility to court services.

Of course, medieval courts generally made a profit (from the fines and fees levied)--which encouraged their supply--and were run by people who received a direct benefit from the protection of the life and property of peasants (since they were their income source). This is not to romanticise a system which had some glaring conflicts of interest (hence the ability of royal courts to compete with manorial courts). But it did mean high levels of accessibility and courts directly concerned to make things work.

In modern democracies, courts are nowhere near that well-supplied or accessible. Given that they are not net revenue generators, their under-supply is not surprising. The length of time it takes cases to come to court is an indication of the under-supply of judicial services, relative to the demand for their use.
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This under-supply and lack of accessibility has various consequences, one of which is the multiplication of specialist tribunals. This is not a good thing, since such tribunals easily become captured by particular interests and/or mindsets.

That modern societies are over-supplied with law is also fairly clear. Even though it is a crude measure, the ever-shorter time it takes for the number of pages of legislation passed by Parliament to double is an indicator of that.

But the under-supply (and thus expense) of court services can have quite invidious effects. Take, for example, unfair dismissal law. A dismissed employee can effectively extort money from a former employer no matter how feeble their case provided they set their "go away" money at less than the amount it would take to go to court to prove how feeble their case is. Given the expense of such actions, and the time delay before they go to court (a cost in itself), such unfair dismissal laws effectively increase the cost of dismissing an employee by a few thousand dollars. Not a big deal to a large corporation, a very big deal to a small business.

All of which increases the risk of employing people: and with no offsetting benefit to the employer. That being the case, businesses will seek to compensate for the increased risk. So, they will do the following things:
(1) Employ less people than they otherwise would.
(2) Seek to structure their business so as to not be covered by the law.
(3) Seek more information about likely employees.
(4) Seek greater expected benefit from employing someone.

The last two means things such as:
(1) Increased reliance on certification.
(2) Increased use of in-place networks (where prior connection provides an implicit guarantee and a basis to assess any recommendation).
(3) Decreased willingness to hire employees who are harder to assess.

So less educated workers who are not well-plugged into existing networks and who have greater cultural distance from employers (since that increases communication difficulties) will be particularly avoided. In France, for example, the high levels of difficulty in sacking employees basically means that Muslim youths from the banilieue are profoundly legislatively penalised in the labour market.

This without considering the implied notion that employees have some sort of property right in a job and that an employer (who does not have any property right in customers, apart from that covered by "goodwill" which an unsatisfactory employee can seriously damage) is expected to continue to pay someone they no longer wish to employ if they have not gone through the specified steps.* Nor that there is no “unfair resignation” law. But the point of these laws is not to make the labour market operate "better". It is to display conspicuous compassion, protect incumbent workers and provide unions and lawyers with more levers against employers. That it will have the effect of discouraging employment of marginal workers can just be dismissed as an "evil of capitalism".

* Governments do have property rights in income from customers--they are called 'taxes'--and so their employees do have property rights in jobs (though less so than they used to). But public service employment is hardly a universalisable model.

The Mystery of Economic Growth

The Mystery of Economic Growth by Elhanan Helpman, a commentary on recent economic growth scholarship, is a moderately useful short book. Economics can be highly abstract and the book is a bit jargon-heavy, even given the comprehensive glossary, for other than the determined lay reader.

Still, if one perseveres, there is a lot of useful information in it based on burgeoning cross-country and cross-time empirical studies. I especially liked the discussion of how trade liberalisation is particularly good for small countries (pp58ff), a nice antidote to free trade agreements hand-wringing, as well as the last two chapters on inequality and on politics and institutions.

The chapter on inequality is full of interesting results – such as inequality of land-ownership is a measurable negative for economic growth but inequality of income on its own is not: and even the former is confined to non-democratic regimes (p.92ff).
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Income inequality within countries rose slightly in the C19th, dropped in the first half of the C20th, and has risen only slightly since. Income inequality between countries increased dramatically in the C19th and first half of the C20th but has been moderately stable since (p.88ff).

The widening gap between the wages of skilled and non-skilled seems to be predominantly driven by technological change, with trade and immigration effects being much less significant (p.94ff).

Where the data is unambiguous is the effect of economic growth on the poor: a rising tide really does raise all boats. In 1820, over 90% of the world’s population lived on $US2 a day or less; over 80% lived on $US1 a day or less (1985 prices). By 1992, about 50% of the world’s population lived on $US2 a day or less, just over 20% of the world lived on $US1 a day or less. Looking at data for 137 countries, there is almost a one-to-one relationship between economic growth and the income of the poorest fifth of the population.

The chapter on politics and institutions covers interesting studies, but, as the author notes:

the study of institutions and their relations to economic growth is an enormous task on which only limited progress has been made so far (p.142).

I particularly liked the study of entry-costs – the costs of regulations for setting up a firm. These varied from 0.5% of per capita GDP in (surprise!) the US to 460% of per capita GDP in the Dominican Republican (wow, I wonder where will have more economic activity …). Hernando de Soto’s point quantified.

The author really needed an interested non-economist to help him add in the de-jargonised clear English explanation at various points (I could see he was trying). Still, an informative short text.

The case for fuel reduction burning in Australia’s forests

Peter Attiwill
on
The Case For Fuel Reduction Burning in Australia’s Forests

The Adam Smith Club will host a dinner meeting (pdf) on Tuesday the 7th of April 2009, at the Malvern Vale Club Hotel, 1321 Malvern Rd, Malvern 3144.

Peter Attiwill retired from the position of Reader and Associate Professor in Botany, The University of Melbourne. He is Australian Centre Senior Fellow and Principal Fellow in Botany, University of Melbourne and Editor-in-Chief, Forest Ecology and Management. He is the author or co-author of some 120 papers in the scientific journals. Most of his research career has concentrated on sustainability of growth, productivity and nutrient cycling in forests.
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Fire has been a major force in the evolution of Australia’s fauna and flora over tens of millions of years, and Victoria is one of the most fire-prone areas of the world. In the past 6 years, bushfires have burnt with high intensity over some 2.7 million hectares of public land in Victoria, and this is no way to manage the bush and its ecology. But these megafires – or feral fires – that we have seen in Victoria have also burned in other parts of the world. On a global scale, we are facing three major challenges: global warming and climate change, over-accumulation of forest fuels, and growth of populations in the interface between urban and forest areas (that is, more and more people wanting to live in the bush). While most fires are controlled, the few that burn out of control account for most of the area burned, and for most of the total cost of suppression. In meeting these challenges, should we reinforce current tactics with the emphasis on fire suppression, or should we redefine strategies?

Attendance is open to both members and non-members. Those desiring to attend should complete the slip on the pdf and return it to the Club no later than Friday the 3rd of April 2009. Tickets will not be sent. Those attending should arrive at 6:30pm for dinner at 7:00pm. The cost is $40.00 per head for members and $45.00 per head for non-members.

Into the Darklands

Forensic psychologist Nigel Latta’s book Into the Darklands and Beyond: Unveiling the Predators Amongst Us is about working with sexual predators and other criminals as well as troubled adolescents (many of whom are well down that same path). Reading about the evil, sad and depraved I found a distinct relief after The Al Qaeda Reader because—unlike the narrow bombastic hatred of bin Laden and al-Zawahiri—Nigel Latta’s witty perceptiveness about the human condition was engaging itself and informed by an appreciation of the human so lacking in al Qaeda’s paeans to murder and mayhem.

Nigel Latta describes the book as a travel diary, which it is: a series of vignettes mostly (but far from only) about working with the troubled and the evil. Nigel Latta starts with a conversation with James, a man who expresses his desire to kill children. Here and elsewhere in the book, Nigel Latta conveys vividly both the sort of people he deals with and how he deals with them. As he explains, any relationship with the person he is dealing with is all he has: if he does not establish any at all, he has nothing to work with. Not that he takes interview reports all that seriously—he is not interested in the lies perpetrators have told previous interviewers. The trick is to ignore what they say: they reveal themselves in what they do: hence he concentrates on the trial records, the records of what actually happened. (Economists call that revealed preference.)

As far as he is concerned, niceness (or what people generally view as niceness) is not therapeutic: he spends a chapter on that.
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Nigel Latta found his first murderer very frightening. The frightening thing was he found himself liking said murderer: a man regretful of the burden his past placed on a daughter he was worried about.

Nigel Latta had good parents and, at the age of 14, experienced a dead man vomiting into his mouth. (An elderly man had collapsed and the young Nigel was helping with CPR.) That experience gave him a benchmark for what was a bad experience. Generally, what he subsequently experienced as a teenager really did not rate as bad. Not compared to a dead man vomiting into his mouth.

Nigel Latta got into working with criminals due to a happenstance while doing his Master’s in Psychology. He was talked into doing his research report evaluating a program treating sex offenders. After participating in a weekend workshop on getting sex offenders to empathize with their victims, he was hooked. Within a couple of months, he was working as a therapist in the program.

His writing style is clear, engaging and vivid:

... politics is the organisational fluff that gathers in our collective navels. It feels important, but in the end it’s just lint and dead skin. (p.137)

I hate the suffocating gasp of political correctness. It is noxious weed choking the soul out of the world … It is bullshit dressed us as divinity and I hate it to the very core of my being. Political correctness is the modern-day Emperor’s new clothes. We all ‘oohh’ and ‘aaah’ but really all of any of us see is a butt-ugly naked guy (p.147)

... it doesn’t matter what comes out of your mouth, it’s what you hold in your heart that counts … Compassion is not something you say, it’s something you do. (p.153)

Originally I had wanted to call [my paper] ‘Taking the Fuck out of Fuck up’( p.299)

Common sense died somewhere in the late eighties. This was sad and as a working concept it will be greatly missed. … at about the same time, personal responsibility also quietly passed away. In this brave new world, common sense is but a memory and no one is really responsible for anything. (p. 319)

Problems are not excuses, even very bad problems. (p. 324)

I have never found it hard to figure out what to say. Mostly I just open my mouth and the stuff comes out. I have an enormous amount of faith in my jabbermouth. (p.326)

I’m not sure I believe in God, but I believe in souls, so God doesn’t seem that much of a stretch. (p. 329)

Sometimes Nigel Latta captures the eloquence of others, as in the social worker commenting on the suicide of an teenage girl who seemed to be getting it together:

'I think she saw the light at the end of the tunnel, but it was just too far away.’ (p. 303)

His therapeutic style is very much about being truthful even when it is not a nice truth: hence the pointlessness (or worse) of being politely false. Hence also his hatred of political correctness as it sugar coats the truth away: sometimes out of existence altogether. He is scathing on anti-smacking activism (p.320ff).

He is, however, rather keen on Edward de Bono’s Lateral Thinking.

As we travel with Nigel Latta, we meet Henry, a paedophile out of fear of his own homosexuality. Nigel Latta prescribes as treatment Henry going to a gay sauna and having sex and coming back and telling him about it. Henry, given permission to embrace his homosexuality, does: and stops molesting boys.

Nigel Latta tells us that parents should make it an absolute rule: never have a teenage boy (or a teenage girl with boyfriend) baby sit your kids: likewise no teenage girls who have boyfriends (p.263). The odds are not worth the risk.

We also get to meet many people who had truly vile and appalling childhoods. But he is very much of the view that you can choose what to make of your burdens—and destroying other people's lives has no excuse, no matter how troubled your own.

There are some absolutely charming moments, such as talking, on a mountain hike, about the joy of writing, and the need to write, to a trouble teenage kid who wrote poetry (p.294). Meeting a Quaker lady whose meeting had taken his suggestion that compassion was doing—that those who think “something should be done” should go and do—to heart and had gone out and done (Pp 300-1).

He explains the special curse of being vaguely recognisable (p.327). He discourses powerfully on the utter inadequacy of words to convey the intensity and nature of certain experiences (p.332). (It struck me that use and mention is another way of saying that the map is not the territory. Zen thought wrestles with not confusing the tool of words, even the tool of thought, with the experience itself.)

Nigel Latta has a chapter on the work of Parole Boards examined through a particularly disastrous release decision—a prisoner on Parole fleeing being recalled to prison who killed a father of two just to distract police (Pp.334ff). On the way, we become very well informed about the research on risk factors of re-offending. But Nigel Latta regards the entire operation of the Parole Board as being based on the wrong question. The question is not whether X is sufficiently low-risk of re-offending to release, it is whether X’s release is a reasonable gamble with innocent lives.

He is an honest empiricist, describing how he finds a psychic apparently startlingly accurate, despite his own presumptive scepticism (Pp 308ff).

And, having started the book with James, we end the book with him too.

Into the Darklands is all about meeting the Bad Man at one remove, through the eyes and actions of an engaging, memorable therapist. At the end, one finds one has been entertained, informed, engaged, disturbed and—if one has been awake and aware—had your view of things that matter moved: a fine book, full of wit, perception and wisdom.

Why wages are "sticky" downwards

It is an established fact of economic life that wages are “sticky” downwards. That is, that sacking people is typically resorted to more than cutting wages to existing employees. There is no doubt a vast economic literature on this, one that I have not read. Nevertheless, as part-owner of a business that pays some people a regular weekly salary, others are on an agreed number of hours at an agreed rate and still others on an “offer and accept” basis, I have some observations about why wages are sticky downwards.

The short answer is that it is much better to terminate a working relationship than to poison continuing ones.

An employee and employer are not engaged in one-off interactions as in a “spot” market. They are in a continuing interaction. The more mutually beneficial the interaction, the longer and stronger it is likely to be. How they behave towards each other is going to both determine and reflect the quality of that interaction. What they have is an ongoing, even evolving, contract: one more defined by their interactions than by any written agreement.
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For an employer to cut wages without cutting hours is to expect the same level of work (a benefit for the employer) for less benefit to the worker. It also signals a subordination of the employee to the convenience of the employer. That is, it signals both power and disregard: that the employment contract is one that the employer can determine unilaterally to the employer’s benefit and against the employee’s benefit. Which, in a fundamental sense, makes it not a contract at all: for any sense of mutual consent becomes enormously and openly attenuated. If a contract is to function, it must be at the very least, agreed (or implied) restraints on adverse behaviour towards by the parties to the contract each other on matters covered by the contract. And how much pay for how much work is basic to a contract of employment.

So, for an employer to cut that rate is to poison—perhaps irrevocably—their relationships with their employees by undermining the notion that there is any contract the employee can rely on at all. Sacking people merely ends the contract, and therefore the interaction. Cutting wages poisons a continuing interaction by undermining any notion of there being a contract. And an employer simply does not, and cannot, fully control an employee. Not only can they seek an alternative position, but they have at least some control over how hard they work.

That inability to completely control employees is also why, I would argue, large firms which find it difficult to monitor the contribution of each employee to overall output tend to pay more than smaller firms which have less difficulty doing such: the extra pay creates a “hostage premium” that makes employees more likely to be self-policing.

Increasing pay (either by increasing the rate or by paying bonuses) improves the situation of the employee and sends positive signals. Nor does it undermine their basic contract. A contract, after all, does not generally preclude one side choosing to do more for the other than agreed. Increasing the rate changes the contract, but one to the benefit of the employee. It does not undermine the notion of a continuing contract. Attempting to force them provide more work for a given amount of pay fundamentally undermines the notion of there being any contract.

It is theoretically possible to renegotiate the contract to reduce pay rates. But the employee has limited information about total financial flows of the business they are working for. This “information asymmetry” makes the implied asymmetry of benefit (employer gets same work for less pay) even harder to sell. It will generally be easier to cut hours while keeping the rate the same than cutting the rate while keeping the hours the same since merely cutting hours does not provide a pure benefit to the employer—an extension of it being easier to sack people than to reduce pay rates.

Employees, after all, have a standard pattern of expenditures that they wish to cover (and some of which they have to cover to maintain a certain basic standard of living). They can be expected to have some idea about likely alternative employment positions: in particular, how much pay would be gained for how much work. Cutting wages both makes alternatives more attractive in simple comparative terms while undermining the stability of presumed income from the current job.

The effect is less severe if the downward pressure on wages is clearly happening across an industry, rather than in just one firm. But, since each firm has the above considerations, there will be significant lags before any such change manifests and it still makes exiting that industry more attractive.

To summarise, because employment is a continuing interaction and it is fundamental to a contract to include agreed restraints on adverse behaviour, wages will be much “stickier” downwards than will levels of employment.

ADDENDA 1. My attention has been drawn to Arnold Kling's post on the issue. It strikes me as too removed from the reality of the employment relationship itself. Yes, cutting wages will make working for you less attractive than places which pay higher wages but the damage done to any notion of there being any sort of contract between employer and employee seems to me to be much more to the point.

An example a work colleague provided to me of a factory he knew of which announced to its workforce they could not continue to trading as they were so they offered all their workers the choice of one (1) resigning and collecting their redundancy payment or (2) going casual and receiving a higher hourly rate but no sick leave, etc and no guarantee of the same hours fits nicely in with my analysis above. It was a way of cutting both the expense of employing people and (given the shortening of hours) a cut in their total wages but not in a way which undermined the notion of having a contract.

ADDENDA 2. Richard Posner includes a discussion of why wages are "sticky" downwards in his critique of recent economic text. We reach similar conclusions, though, ironically, I (as a small employer) are more struck by the importance of contracts than Mr Justice Posner.

ADDENDA 3: That people resent nominal wage cuts is noted here :

Employers almost never cut their employees' wages because they fear that doing so would cause serious morale and staff retention problems. Studies of popular sentiment suggest why. Most people consider it unfair for a firm to cut wages, except in extreme circumstances. On the other hand, most do not consider it unfair if a firm fails to raise wages in the face of high inflation.

And further discussed here.

Al Qaeda in its own words

Islam and democracy are incompatible because democracy makes the people sovereign, an offence against the sovereignty of Allah; because democracy claims the right to legislate, taking what is Allah’s; and because democracy allows infidels to have authority over Muslims.

Islam and equality of rights are incompatible, because freedom of religion permits apostasy, abolishes jihad, fails to enforce the legal inferiority of non-Muslims as dhimmis on whom the jizya is to be levied and abolishes man’s dominion over woman.

Liberal democracy is thus un-Islamic, indeed blasphemous. So Ayman al-Zawahiri, the Egyptian theorist who is second-in-command of al Qaeda assures the world in "Sharia and Democracy", a treatise extensively excerpted in The Al Qaeda Reader edited by Raymond Ibrahim, an American of Coptic background. The Al-Qaeda Reader provides a selection of texts from Osama bin Laden and Ayman al-Zawahiri, al-Qaeda’s chief ideologist.

In a document entitled Moderate Islam is a Prostration to the West, al Qaeda states that:

Muslims are obligated to raid the lands of the infidels, occupy them, and exchange their systems of governance for an Islamic system, barring any practice that contradicts the sharia from being publicly voiced among the people, as was the case at the dawn of Islam (p.51).

An impeccably Islamic sentiment, given that is precisely what Muhammad, and his Companions, did. As al-Qaeda points out:

it is, in fact, part of our religion to impose our particular beliefs upon others. Whoever doubts this, let him turn to the deeds of the Companions when they raided the lands of the Christians and Omar imposed upon them the conditions of dhimmi[tude] (p.51).

So,

the West’s notion that Islam is the religion of jihad and enmity towards the religions of the infidel and the infidels themselves is an accurate and true depiction (p.52).

We need to take the words of al-Qaeda (and the jihadis generally) seriously—particularly when they are justifying themselves to potential supporters and recruits—for that is when they reveal what they are about. One of the things which crippled responses to Hitler in the 1930s is that people read him according to their own theories, not according to what he said he wanted to do, even though it was all in Mein Kampf for everyone to read.
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Robert Fisk, in his normal purblind arrogance, informs us that:

There is no connection between Islam and "terror".

This is news to al-Qaeda, whose writings make it very clear indeed that what they do they do for very Islamic reasons. The longer texts are full of citations of the Qur’an (particularly, of course, the Medinan verses) and to hadith providing further and better particulars. What the Prophet said the Allah said, and what the Prophet, as the source of Revelation, said and did is clearly the ultimate authority. So terror attacks become raids to deliberately invoke the Prophet’s own raids. If one is propounding an ideology of warrior action and conquest, there is plenty in the words and actions of the Prophet to give you sustenance.

Fisk goes on to say

But there is a connection between our occupation of Muslim lands and "terror".

To al-Qaeda, Spain (or, rather al-Andalus) represents “occupation of Muslim lands”. Fisk is in such denial, he is reduced to saying that Osama is lying about his motivations when expressing an Islamic justification for the Bali bombing which is entirely in line with al-Qaeda’s rhetoric to fellow Muslims. The “West has been bad to them” is a pathetically inadequate explanation for the extent of Islam-motivated violence which extends way beyond attacking “Western” targets. (As it is for the lack of similar violence from others “the West” has been bad to.)

Fisk, and those who argue like him, are the analogues of those in the 1930s who argued that the Versailles Treaty was unfair to Germany (true) and that Germans have legitimate grievances (true) and so the proper thing to do was to accede to Herr Hitler’s expression of German grievances (road to disaster). It was the road to disaster because Hitler really believed in the program he outlined in Mein Kampf. Giving in to his “legitimate” demands did not take the “sting” out of his ideology, it confirmed it as the path forward.

And Hamas, Hezbollah and the jihadis are the contemporary analogues of fascism—modernising revolts against modernity (seen as alien, anti-religious and Western), preaching an atavistic (and anti-traditionalist) form of Islam, promoting a cult of death and violence, engaged in brutality and murder; the rhetoric of violence backed up by deeds of violence: in Hezbollah’s case with a uniformed paramilitary, straight-armed salute and all. (Osama bin Laden even has the war veteran mystique working for him that both Mussolini and Hitler did.)

In the face of threatening modern “corruption”, one gets atavism—rejection of recent tradition in favour of “original purity”. The Protestant Reformation—with its notion that Scripture creates or founds the Church rather than the Catholic notion that the Church produces Scripture—was one such case, as Pentecostalism is in our time. The rise in esoteric/occult views, particularly in the C19th, was another such atavism, as is the neo-pagan movement that descends from it. Both Italian Fascism and (especially) German Nazism were atavistic—invoking either pre-Christian Rome (in both cases) or pre-Christian German (“Aryan”) purity (in the case of the Nazis).

In contemporary Islam, the modernist impulse (the attempt to “update”) Islam wars with the reformist impulse (the attempt to “return” to original purity). This is an old pattern in Islam which has particular urgency in the contemporary world due to the omnipresence of modernity, Islam’s confronting weakness and the existence of the “free wealth” of oil money giving the reformist impulse extra impetus (as it weakens the pressure to adjust to modernity, as distinct from defying it in various ways).

And there is a long tradition within Islam that, except as pragmatic convenience, peaceful co-existence is unIslamic. As in Ayatollah Khomeini’s view that:

Islam is a religion of blood for the infidels but a religion of guidance for other people: though, given he was a Shi’a “corpse worshipper”, al-Qaeda would not quote him approvingly.

For the jihadis, secularism is anti-Islamic, democracy is anti-Islamic, equal rights is anti-Islamic. As long as we can understand the nature of the grievances, it is perfectly clear that the West is hateful for what it is, and particularly for being successful. While all the jihadi rhetoric about Middle East regimes being “infidel” because they are not true Muslims applies even more so to those who are not Islamic in the first place. Given the omnipresence modern communications give the products of Western culture, there is a sense in which the West cannot be escaped from. Osama bin Laden is the “mad mullah” of the global village, with rather fewer good points than the original.

What comes across strongly is how very much the example of the C7th in particular, and Islamic history in general, matters to al-Qaeda. The jihadis fought the Soviet Union in Afghanistan—with “Allah’s will” this led, they believe, to the collapse of the Soviet Union. So Allah will give them victory over the US. This model is straight out of the C7th, when Muhammad’s Companions—in the world’s greatest burst of religious conquest—overran the Persian Empire and half the territory (with two-thirds of the population and revenue) of the Eastern Roman Empire. (Which we call, quite anachronistically, the “Byzantine” Empire.)

The one point where it is clear that al-Zawahiri is stretching is trying to justify suicide bombing on Islamic grounds. Islam regards suicide as a sin and—while it is perfectly clear from the words of the Prophet that the archetypal Muslim martyr is one who slays and is slain—there is nothing in the Qur’an or in hadith which justifies deliberately killing oneself to kill infidel (as distinct from accepting one is likely to die). Al-Zawahiri is reduced to making a very weak inference from a parable hadith about a young boy who is a martyr to Islam by telling the evil king how to kill him after Allah had saved the boy more than once and claiming there from that it is the intention in the suicide which makes all the difference.

The argument for the permissibility of killing civilians is stronger (the Prophet bombarded an infidel city with catapults) but al-Zawahiri does have to make an distinction between defensive jihad (where more is permissible) and offensive jihad. But, given the September 11 operations (which al-Qaeda take full credit for) were “defensive”, it is not a distinction worth much.

Reading document after document, one is struck by the consistent tone: full of hate but also a pervasive bravado that seems to be shouting to hide a deeper insecurity. Bin Laden and al-Zawahiri are clearly deeply offended by the success of the West and relative weakness of Islam, an Islam that should be the triumphant vanguard of Allah’s sovereignty.

Reading an interview with al-Zawahiri is like reading an interview with a particularly sophomoric Western leftist with Islamic rhetoric tacked-on – the failure to put things in anything but a propagandistic context, the West (particularly the US) and West-friendly regimes are to blame for everything, nothing the speaker is associated with has any connection to anything bad, if everyone would just agree with the speaker things would be fine (and they only fail to so agree because they are wicked and malicious).

Raymond Ibrahim, who works for the Library of Congress and did a Masters in Middle Eastern history on early Eastern Roman-Muslim interaction, has done an excellent job in putting together the collection, handling the translation, providing short introductions to each major document putting it in context. (Though he does not always explain why particular documents are not dated.) I was particularly struck by a footnote that provides an excellent short summary of the closing of itjihad:

since the beginning of the tenth century, after all four school [of Islamic jurisprudence] had reached a level of development where almost everything had been codified, the doors of itjihad were said to have closed.

A very useful text – by letting al-Qaeda speak for itself, loud and clear – for understanding a mindset that is both religious and murderous.

Wars and Medieval Rulership

Mass prosperity was developed first by in North-Western Europe and its offshoot societies in North America and the Antipodes. The first non-European society to also adopt that achievement was Japan. To understand why, we need to look to their similar, yet entirely independent, medieval periods of Latin Christendom and Japan and the institutional developments there from.

Joseph Strayer’s classic essay On the Medieval Origins of the Modern State is a fine read on the medieval roots of the modern. Though it seemed to me that the apparent "mystery" he refers to of greater propertied cooperation with the state in the late C15th and early C16th (pp 91-92) was a result of seeping change in the balance of coercive power. Crossbows and handguns, plus greater royal administrative capacity (so troops could increasingly be centrally paid, trained & equipped), were undermining the value of the knight (i.e. the propertied warrior elite and retainers) as protectors of the realm and enforcers of order and their independent coercive power socially downwards. Similarly, the castle as a base of operation were eclipsed by royal artillery parks. As centrally trained, paid and equipped mass once again dominated warfare, and knightly castles were replaced by royal forts, the propertied classes had less leverage against royal authority and more need to rely on it. Hence they became more tractable. The final mark in the process is the disappearance of the tournament as a great public display – too much danger, too much expense for too little pay-off. And so the medieval becomes the modern.
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Yet it is not merely technological change in itself that does it (however important that might be). This is demonstrated by the case of Japan, which never suffered the collapse in trade, literacy and administrative capacity of post-Roman Europe and where the samurai persisted for three centuries after the introduction of gunpowder weapons by the Europeans in the C16th. (The Japanese being the Japanese, they were soon making better arquebuses and using them more effectively than the Europeans.) The extra element Europe had that Japan didn’t was foreign threat. The effort and expense of the institutional and social transformation required to change to mass gunpowder weapons drove European states to the point of bankruptcy and beyond. But if one state didn’t, its neighbour did. Keeping up with the Valois or the Hapsburgs was an expensive business. Within 20 years of Japan being confronted an equivalent level of foreign threat (Commodore Perry and his ‘black ships’ followed by gunboats of the European Powers), samurai society had gone the way of knightly society. The samurai, like the knights, being replaced by tax-paid peasants with guns. And, again, the medieval became the modern.

Which is a way of saying I found Warrior Rule in Japan both a great read in its own right and very revealing about medieval European history, given that it was an independent, non-Christian (and, for that matter, non-Germanic) evolution which nevertheless produced a series of remarkable similarities. They even had their very own C14th schism – the period of Southern and Northern Courts (1336-1392).

It can be hard keeping track technical Japanese terms (the difference between jito and shugo for example) and that Warrior Rule is selections from the Cambridge History of Japan is also a little awkward, since references are made of chapters not included. But reading about the slow unfolding of warrior rule as coercive leverage worked itself out was fascinating. And it improves one's grasp on the complexities of Japanese institutional development (for example, that talking as if the shogunate became 'the government' is far too simple).

Just to list some of the similarities, in no particular order, between medieval Europe (900-1500) and medieval Japan (1100-1860): temperate agriculture; geographic area very accessible by sea but separated by significant geographical barriers, particularly mountain ranges; later marriage; continuous institutional development over long period from at least C8th AD onwards (in particular, never conquered by steppe nomads), warrior elite as "permanent investors" (rather than "temporary share-croppers"), chivalry & bushido (glorification of the moral warrior); heraldry; diversified political structures with high degree of institutional autonomy; the novel; eroticisation of love & death in a literary tradition of tragic love affairs; primogeniture; highly developed legal codes with competing jurisdictions; replacement of servile with free peasantry; extensive wage labour; elected village and guild offices; wealthy & powerful merchant class; property rights, including corporations and extensive market in land; highly developed financial markets: including tradeable shares, bills of exchange, futures contracts.

To study each in the context of the other, and their differences from other societies and civilizations, can be a deeply revealing exercise.

Winning by making things worse

If you block the responsiveness of a system to change so it becomes increasingly dysfunctional, you can point to that dysfunction as evidence for the need for change. In other words, in certain circumstances, the worse you make things, the stronger your case looks.

For example, if you make creating new dams politically untenable, then investment in water infrastructure will not keep up with growth in population. So the society becomes more vulnerable to drought. The resulting water restrictions are then paraded as evidence of the need for restrictive environmental controls. The fact that your hostility blocked the responsiveness of policy to changing population does not undermine your case, it reinforces it. You win by making things worse. The effect can also be generated—or magnified—by blocking water prices from reflecting actual demand.

Similarly, the obvious response to population spreading into rural areas is to clear trees and keep down build-up of flammable undergrowth. If environmental controls—based on a green aesthetic—ban tree clearing and block forest management by back-burning, rural and semi-rural areas have increased vulnerability to bushfires. So any resulting disaster can be touted as showing the need for strict environmental controls due to an increasingly dangerous environment. Once again, you win by making things worse.
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Of course, this relies on people not being called on the actual effects of their policies. But if you have established that supporting such policies mark one as a “good person”, this makes such “calling” both less likely and much harder. That is, if such beliefs have become status markers, then a lot of people (including people in the media) have a vested interested in not “calling” you. For, in such circumstances, the moral status of one is the moral status of all. All those in the “club of the virtuous” have an interest in maintaining the value of the markers of virtue. This works to discourage awkward evidence from having effect in the public arena: it certainly discourages the “club of the virtuous” from examining their own actions and beliefs.

It is not only environmental policy that works this way. Any situation where there is delayed causation, so that the actual effects of actions are obscure, can operate this way. For example, starving a system of capital investment and/or maintenance so that they service deteriorates so that the drop in patronage can be used as an excuse to further cut spending on the system.

This is even more so if:

(1) beliefs are status markers establishing a “club of the virtuous”,
(2) there is an underlying presumption that the existing system is dysfunctional, so any dysfunction is blamed on “the system”, not actions you have done or supported within it, and
(3) moral legitimacy is established by one’s intentions, so failure do not detract from your legitimating intentions.

Such a situation is rife for “winning by making this worse”.

All the more because this is in no sense a conspiracy. People playing such games do not do it deliberately, they are acting out the presumptions of their worldview. Bad outcomes reinforce their world view, since it is based on a presumption of dysfunction (of markets, of capitalism, of private action, etc). That presumption then legitimates their intention to change things—particularly by having more resources controlled by people like them.

In the case of indigenous policy, having destroyed previous responses to the interaction between indigenous people and the mainstream (missions and pastoral work) and replaced it by mechanisms legitimated by their intentions, not their responsiveness to circumstances, any disastrous outcomes (of which there have been plenty) can just be blamed on “racism”. The cited dysfunction that justified the disastrous policies in the first place.

If you justify your preferred policies in terms of opposition to a fundamentally very successful social system, one is likely to end up embracing a lot of failure.

Consider using official discretions to limit the use of land for housing. By limiting responsiveness to increased demand for housing, that increases prices, which adds the demand for inflation-beating-assets to the demand for houses, which creates housing bubbles. Add in official actions to encourage more lending to the riskier (in part because housing has become more expensive), and you make the financial system more vulnerable to stress. Once that vulnerability is manifested, it becomes “a useful crisis”.

When things are obviously working poorly, the obvious response is to take actions to “fix” the problem. In a market economy, regulatory failure manifests as market outcomes. Blaming “markets” is an obvious and simple thing to do. Explaining the effects of regulatory failure requires telling a longer causal story, which puts one at a rhetorical disadvantage.

Hence one can win by making things worse.

Medieval Business

Edwin S. Hunt and James M. Murray’s A History of Business in Medieval Europe 1200-1550 is an excellent history of medieval business. The business focus gives it an alertness to practicality which is not always a feature of writing on medieval history, even medieval economic history. Having a retired businessman as one of the authors (Hunt, Murray is an academic medievalist) seems to have helped.

Early on, however, I did note a surprising analytical lapse. Examining the economic relationship between peasant and lord, Hunt and Murray see it as having exploitative and cooperative elements, which is entirely fair enough. But what is startling about their discussion otherwise intelligent and informative discussion (pp18ff) is the complete absence of any mention of the protective role of lordship. Yet, when one considers the costs of weapons, warhorses, armour, training and castle-building, the resources consumed by military purposes were enormous. Its demands—the provision of well-equipped, skilled, effective mounted warriors and the consequences of doing so—were fundamental to the evolution of political structures. (Including, I would argue, the evolution of primogeniture.)

In a situation where trade had largely collapsed—one estimate, based on counting shipwrecks in the Western Mediterranean, is that trade in the period after the collapse of the Western Roman Empire was a mere fifth of the level at the height of the Roman Empire—the most important sources of (personal) wealth were labour-applied-to-land (which produced food and clothing) and violence (i.e. stealing from, or controlling and protecting, those who worked the land). Those who were best at violence came to dominate those who worked the land.

Commentators at the time were quite clear that the role of lordship was to fight: and not merely in the sense of supplying armies, but in enforcing local law and order. Indeed, given the scattered nature of the population and the extent of wilderness, the latter was much the most important role of the lord. Medieval lordship was first and foremost a warrior elite, a fighting elite. Even the Church had milites or bellatores (to simplify, knights) beholden to it.

A recent edition of Ramon Llull’s Book of Knighthood & Chivalry (published along with Ordene de Chevalerie: the poem of Saladin's "knighting", which is entertaining) brings out the hoped-for protective role quite clearly. Llull’s piety makes this at least as much a religious text as a chivalric one, yet there was a clear emphasis on the local social protection role of the knight. There is a tendency for modern historians to be rather too struck by the role of knights in armies. This is certainly easily the most historically dramatic and visible of their roles, but it was relatively minor compared to their much larger local social enforcement and protection role. When, for example, the French Crown sent commissioners around after the massacre of French knights by Flemish pikemen at Courtrai selling lordships, it was at least as much about maintaining domestic order as any issue of external military effectiveness. (See also my review of Bartlett's The Making of Europe.)

Hunt and Murray are not wrong to see cooperative elements in the relationship between peasants and lords. Nor to note the care and attention lords applied to the economic exploitation of their lands. But to pay no attention to the protective role (apart from a passing mention at the beginning of Chapter 2), and the resources consumed for military purposes, in relations between lords and peasants is Hamlet without the Prince.

Nevertheless, A History of Business in Medieval Europe is a very enlightening read. It is divided into two parts. The first deals with the last part of the “long boom” which started about 1000 before ending in the famines of the early C14th and then demographic disaster of the Great Pestilence, as it was known at the time. The second covers the period after that demographic disaster up to the creation of the global economy following the Spanish crossing of the Atlantic and the Portugese penetration of the Indian Ocean.
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The study is concerned with the traders and merchants—and, to some extent, the skilled craftsfolk—who operated between the lords who fought, the priests who prayed and the peasants who sowed and reaped. (Who made up, between them, over 90% of the population.) None of whom cared for business for its own sake but all of whom had reasons to appreciate what it provided.

Business had to deal with lordly exactions (taxes, tolls, rules, fines). Clever businessfolk could use what they offered to bargain for privileges (typically exemptions from said taxes, tolls, rules or fines). Business wanted liberty and security, and some of the bargains made with lords to get it turned out to be somewhat Faustian. But a learning process went on, leading to a range of innovations and developments. A key point is that, despite the amazing demographic disaster of the Black Death—the population of Europe crashed from probably about 74 million in 1300 to likely about 50 million in 1400—little in the ways of skills were lost. On the contrary, the circumstances encouraged even more innovation. One gets a very good picture of the sheer resilience of medieval society.

The first Part looks at the economics, culture and geography of early medieval trade, the forms of business organisation, traders and their tools, the politics of business and the “super-company” phenomena as business got bigger.

But it was not only lords that business had to deal with. Much of what they did was regulated by canon law, and thus Church doctrine. Interaction with the Church moulded medieval business in a creative tension between doctrine and practicality. Especially over the ban on usury. (See my review of Diana Wood’s Medieval Economic Thought.) The imposition of an Interdict on a city was particularly bad for business. It stopped church bells, which marked time, and released outsiders from moral obligations on contracts (p.96).

Cooperation and competition molded business. Folk had basically same reasons to cooperate across Latin Christendom, but the local context varied greatly (Pp77ff). English and French business took very different paths due to different institutional context. How much say business folk had, how much civic freedom, varied widely. Even areas with relatively powerful cities—Italy, Catalonia, Flanders, Germany—showed variations in patterns. Common patterns, local variations—very much how the medieval world operated.

Hunt and Murray are good at debunking glib simplifications—for example about the alleged "disappearance" of the fairs and firms misleadingly labelled “banks”. Business did become bigger and more complex (pp 72-73), leading to the growth of very large companies, what Hunt and Murray call the “super-companies” but are often referred to in the literature as “banks”. The latter is not an adequate description. They were more like commodity traders with a financing side.

It is striking how small medieval bureaucracies were (p.109). The largest, the Avignon Papacy, had 250 staff and most government administrations were considerably smaller. The later Medici Bank had 57 staff. Of the “super-companies” which collapsed in the 1340s, the Peruzzi had, in addition to working partners, 90 employees (48 in branches). The Acciaiuoli 43 factors in foreign branches. The Bardi in the vicinity of 120-150 employees.

Hunt and Murray deny that the collapse of the “super-companies” came from Edward III’s failure to pay back his loans. (He never defaulted, merely audited and reneged on parts of them, while the “super companies” were given advantageous positions in the highly profitable wool trade as part of the deals.) Nor did it come from shifts in relative prices of gold and silver. Rather, they argue, it resulted from the effects of prolonged famines in the 1340s, resulting in a dramatic drop in the international grain trade, leaving the “super-companies” with overheads their cash-flows could no longer support. They were an adaptation to particular trading circumstances and when it passed, so did they.

The book is full of enlightening asides and discussions. They note the Papacy’s intention to destroy the Hohenstaufen dynasty “root and branch” (p.92). That the Corpus iuris civilis of Justinian was rediscovered at the end of the C11th and gradually spread northwards from Italy during the C12th. That interest rates on productive loans were 8% then 7% pa. (Quite low by historical standards, suggesting relatively high levels of social trust.) That Genoese merchants were notably not cooperative with other Genoese, unlike merchants from other cities (p.116).

The “long boom”, the commercial expansion from 1000 to 1300, was brought to a halt, first by a series of particularly bad famines and then the Black Death, which wreaked havoc on an already weakened Europe. Post plague, Europe was richer per capita. (The disease killed people, not land, buildings, tools, machines or coins.) The elite splurge on “eat, drink and be merry, for tomorrow we die” and the increased labour costs encouraged business innovation in production, distribution, exchange and organisation. Recovery from demographic stagnation began in the mid C15th (we don’t know why) and steady growth of business innovation meant that Europe was well suited—both rulers and business—to take advantage of any new trading opportunities which turned up. (Such as crossing the Atlantic and finding a sea route to the Indian Ocean.)

That rulers (whether monarchs or towns) encouraged foreign specialists to settle, while invoking severe penalties for local experts who attempted to leave (pp 153-4), showing keen awareness of technological advantage. Adversity (in the form of the demographic crash) and competitive jurisdictions encouraged innovation.

The “race to the bottom” allegation (that competitive jurisdictions make public policy worse) anti-globalists are fond of alleging is a proposition very much not much supported by historical experience. On the contrary—provided a certain level of peacefulness is achieved—competitive jurisdictions do limit coercive control but that is precisely what encourages better public policy. (Though any group that feels that its qualities make it uniquely fitted to rule is going to find such constraints uncongenial.)

Hunt and Murray chart the new business environment after the Black Death, the business responses thereto, the burst of innovation in the C15th, the sources of capital and the beginnings of a global economy.

Who uses and how widely is more important than who originally invented something. Hunt and Murray note the adaptiveness of Latin Christendom (p.247), though they overestimate original inventiveness (windmills and improved account keeping came from Islam, printing from China). But, in all cases, the medievals improved considerably on the original versions.

Printing clearly spread with remarkable speed because there was already a demand for printed material (p.200). Printing books created new risk of unwanted merchandise (p.201). Business folk were keen book buyers—commercial centres, not religious/university ones, dominated printing (p.202).

Commercial taxes (such as those levied in England, Flanders) encouraged ruler attention to needs of commerce more than did the wealth tax (taille) of France (p.205), while forced loans often amounted to taxation (when they were not paid back: p. 206).

They keep returning to the importance of elite demand in driving business (a problem with neo-malthusian analyses of pre-Industrial Revolution economies).

There is a great deal more. Discussion of art and architecture being useful mechanisms for absorbing wealth; the way innovation tended to outpace control mechanisms (a continuing phenomena in our own day); the importance of innkeepers as financial brokers; the burst of silver production and importing of gold along with expanded credit that kicked off the Great Inflation before American silver arrived in substantial amounts; the steps the Portugese and Spanish crowns took to exploit their global trading opportunities; and so forth. All done in highly readable prose: a very useful text on the medieval period.

Global Financial Crisis (GFC) into Global Economic Crisis (GFC)

Recently attended a dinner meeting where a former senior economic policy person gave a talk on the global financial crisis (GFC) and its morphing into the global economic crisis (GEC). The speaker’s presentation was clear and informative (and under Chatham house rule). It also did not suffer from the America-centric problems of quite a lot of (particularly American) commentary.
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The speaker argued that it was a result of a combination of factors. Global financial imbalances (basically Chinese and other Asian saving flooding into pay for American spending), the development of derivatives way in excess of understanding or law that both spread and obscured risk plus very high levels of leveraging based on the presumption of a rising market. The housing bubbles and US public policy encouraging more lending to the riskier were significant factors in these patterns. With the collapse of Lehman Brothers, this toxic brew became the GFC.

Which, in the middle of 2008, morphed into a global economic downturn that hit all major economies simultaneously. It is the simultaneous nature of the downturn that is adding to the severity since, in previous recessions, different areas of the global economy would be affected at different times and to different degrees. Not so this time, hence the GEC.

Australia is relatively well placed since we have low levels of public debt, our banks are not stressed (i.e. our prudential regulation worked better) and our lending practices have been rather better. (The first home-owner grant may be daft policy in that it increases demand in markets where supply is constrained by official discretions, but at least it does not raise risk levels.) So, for example, when the Reserve Bank cuts interest rates, our banks pass the cut on fairly thoroughly. In other economies, cuts in official interests rates are being passed on much less, since the highly stressed banks use such cuts to improve their operating balances.

The speaker was distinctly unimpressed by the various fiscal stimulus packages from the Rudd Government since (1) the speaker thought they were not well structured as stimuli (suggesting that paying the States to suspend payroll tax would be a much more effective way of stimulating employment), though they were perhaps quite well structured as political tools, and (2) bidding for bonds in a situation where so many major economies are selling bonds to pay for their fiscal stimuli at the same time ran a distinct risk of downward pressure on the Australian dollar exchange rate. Not to mention loading future generations with tax obligations. The speaker also felt that now was not the time to be reversing liberalisation of the labour market (i.e. making the labour market more rigid).

A lively discussion followed. Including an informative discussion of China's situation. The high level of Chinese saving represents quite major structural problems within the Chinese economy.

A good night.

Naked

Corey Taylor’s Naked: The Life and Pornography of Michael Lucas is about a gay Russian Jew porn actor and director who has turned himself into New York celebrity.

Covering Michael Lucas’s life from growing up in the Soviet Union to his current near A-list celebrity status, it is an admiring celebration of a classic immigrant-makes-good-in-the-US story.

The story bounces along nicely. Taylor conveys well the claustrophobic oppressiveness of the Soviet Union, the sheer unpleasantness of so much of daily life. One gets a good picture of the pervasive anti-Semitism of an officially atheist state (a case which ironically demonstrates the silliness of Marx’s understanding of Jew-hatred and how to solve it—get rid of religion).

Taylor also conveys the wounding and oppressive nature of fear and ignorance about human sexuality. He sees the Soviet Union as being, in sexual terms, like the US before the Kinsey Report(s), which seems not a bad analogy.

Ironically for a biography of a porn star and director, there are no pictures.
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Taylor takes us through Michael Lucas’s childhood, adolescence, education and early working life in the Soviet Union. Michael Lucas then moved to Germany, where he worked as a hustler and dabbled in porn. Clearly, Michael Lucas likes sex but he very much saw hustling as a business (he had previous business experience having run a travel agency in Moscow), and approached it as such.

Lucas then moved to New York and used the money he saved from hustling to start a business directing porn, with himself as the prime asset of Lucas Entertainment. The business opportunity he spotted was quality, New York-based gay porn, as all the major American porn companies were based in California. Which he has been very successful at building. His 10 tips on how to be successful porn star alone are worth reading.

Michael Lucas’s commercial success illustrates Voltaire’s point about commerce reaching across sectarian divisions and diversity encouraging a free society. As the same-sex oriented experience daily, commerce has generally been much friendlier to them than politics – hence, in the US, Fortune 500 companies have recognised same-sex relationships rather more readily than US States. The openness of commerce is a common experience of minorities: as Thomas Sowell has pointed out regarding the origins of the Jim Crow laws, which were imposed by governments since commerce would not waste money racially segregating.

Lucas has also been very successful at building a public profile for himself by the simple expedients of having lots of striking things to say and being available and consistently pleasant to journalists and photographers: to the extent of being profiled in The New Republic, to his public pleasure. Being clearly photogenic doesn’t hurt, of course.

Lucas’s rather conventional private life—even with recognisable pitfalls of gay emotional life—(apart from the having-public-sex-as-part-of-his-job thing) and his devotion to his family (most of whom he arranged to migrate to New York) are also covered.

The book ends with a nice epilogue one pornography, skewering the bad scholarship and abusive reasoning of Andrea Dworkin & Catherine MacKinnon—particularly Dworkin’s misandry-parading-as-feminism where all forms of male sexuality are illegitimate.

Lucas himself clearly inspires strong reactions: gay, expatriate, Jewish, porn-star and entrepreneur, Zionist, avid self-publicist – what is there not to react to? One’s reaction to Naked is likely to coloured by reactions to the package presented as Michael Lucas.

Michael Lucas himself is not so impressed with the book. His complaints about the writing style seem rather precious. Taylor cites and thanks various friends and acquaintances of Michael Lucas for their assistance in his acknowledgments, so they contradict each other about Taylor's sources. Michael Lucas's complaints are also surprising in that Naked is very much an admiring and respectful biography. It leaves you thinking that Michael Lucas is a driven, but also self-possessed and effective, person who is probably (when the mood takes him) lots of fun to be around.

Colonised knightly Europe

Thomas Bartlett’s excellent The Making of Europe: Conquest, Colonization and Cultural Change 950-1350 is a fine history of the development of European institutions. Bartlett traces the roots of Europe’s post-medieval colonial history in medieval history: Europe the coloniser was itself the result of a process of colonisation. Thankfully, his analysis is done as intelligent history, rather that using propositions as buttresses to the display of virtue.

Something that is very striking in Bartlett’s book, given recent controversies in medieval historiography, is how crystal clear it is that the dominant model in medieval rulers’ heads was the "feudal" one. Or, as I like to put it, franchising social protection to armoured thugs. Whether it was native dynasties importing knights (Mecklenburg, Poland, Scotland, Denmark, Hungary) or frontier conquerors (Spain, Norman Italy, Outremer, Wales, Ireland, Brandenburg, Prussia) or simple conquerors (England), the dominant model is grant-land-receive-military-service. Now, how much those grants were genuinely conditional (your continued tenure rests entirely on your continued service) or obligated (you providing service is an obligation of ownership) or the service was contractual (it’s your land but you want things from me, I want things from you) or strong expectation (ultimately, we’re in this together) is a moot, and highly variable, matter. But the pattern is clear enough.

Bartlett makes the excellent point that Latin Europe spread because it provided a self-replicating matrix of adaptive institutions: thus, monastic rule + knightly ethos => military orders; immunity + market => chartered town; priesthood + guild => university (p.310). Indeed, the medieval order was much more successful at both spreading across Europe and developing its economic resources than the Romans had been.

What is most socially distinctive about the medieval period from the C11th on (the "High Middle Ages" if you like) is the knight and their consequences. This is such a cliché, historians seem to have lost some grasp of the continuing truth of it (see my review of R. I. Moore's The First European Revolution). Yet when medieval chroniclers write histories that read like medieval romances, they are far from foolish in seeing what the knights did as central to their age.

Bartlett points out that the expansion of Latin Europe was largely not a result of the most powerful rulers: they were often too busy fighting each other. What you got was a matrix of knightly-clerical-mercantile expansionism (p.308). Yet the latter two were every bit as present in later European imperialism. That the majority of European military forces faced off against each other was also true of later European imperialism. What was different was the replacement of the knights by a mixture of adventurers and officials (not mutually exclusive categories). Medieval Europe was, to a very large extent, the world the knights built: they and their consequences were what made it most different from what came before and after.

Modern parallels

Reading R. I. Moore’s very informative description of how medieval clerks operated as they rose in social importance, it all sounded hugely familiar: the limitation of acceptable debate (which was real within the bounds), the denunciation and persecution of serious dissent as malignant and evil, seeking to have the role of gatekeepers for ideas, the use and abandonment of popular power, the generation and identification of sins and social evils to be eliminated. We live in a society surrounded by similar patterns, though without the same brutal consequences.
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The modern intelligentsia used to extol popular power, it now seeks to frustrate it – through judicial activism, ideas-gatekeeping, internationalisation and so forth. The much-hailed 'proletariat' have become the much derided racist and xenophobic 'rednecks'. Thus it would be a disaster for contemporary Labor apparatchiks if the actual preferences of workers were expressed in public policy. Pauline Hanson is the modern version of the popular medieval heretic denounced with a viciousness that seems hysterical to those who don’t share the premises of the denouncers – along with said-premises importance in the denouncers’ sense of their own social status and role.

The medieval clerks allied themselves to rising royal power, their contemporary equivalents to the ever-expanding welfare state: one that is always finding new social sins and evils to combat. There is even environmentalism to give everything the necessary religious edge.

Medieval clerks denounced knightly predation and differentiated themselves from them while relying on the knights' coercive power. Their contemporary equivalents denounce corporate power and differentiate themselves from such while relying on the same to generate the wealth that keeps the show on the road.

Where the clerks of Latin Christendom used anti-Semitism to bind and differentiate, and also proclaimed their superiority over the Greek Orthodox, their contemporary equivalents use anti-Americanism (and anti-Zionism) and proclaim their superiority over conservatives and economic liberals. (The neo-cons get particularly denounced – Jewish, American, Zionist, pro-Western power. It hardly gets more evil than that.)

Yes, indeed, one has to keep one’s eye on the selection pressures of history. Who knows what might get another go around.

Warrior rule in Europe (and Japan)

The First European Revolution by R. I. Moore is the book synthesising post-Reynolds contemporary medieval scholarship on the transition from ‘Dark Age’ to ‘medieval’ that I have been looking for. It also throws surprising light on some contemporary social patterns (as I will discuss in my next post).

I enjoyed the book immensely, and found it very enlightening and informative. Moore makes it very clear just how much the creation of post-classical Western civilisation was based on the squabbling alliance of warlord and Church. What struck me though, is that Moore describes a revolution without a driver. Yet the driver is clear enough from his own analysis: the increase in the coercive power of mounted warriors and the competitive predation that released. All the changes he elucidates – the collapse of central power; the castle-building; the change to patrilineal, singular land ownership; the shift to primogeniture; the mass enserfment; the shifts in Church practice and doctrine – came from that.

In Dark Age Europe, military power rested on deploying masses of foot soldiers leavened by bodyguards. Even in conditions of scarce administrative resources, that gave an inherent advantage to kings – they could summon more foot soldiers than anyone else: mass won. But mounted, self-equipped, self-trained warriors had a level of concentrated leverage – both against royal power and against lower orders – that foot-bound troops did not have. Mass no longer won; training, motivation and equipment won. Royal power suffered commensurately since, in conditions of scarce administrative skills, it had no inherent advantage. Though, as Moore rightly argues, as administrative skills became less scarce, royal power improved. Reynolds’ later-medieval ‘feudalisation’ is clearly about how central power sought to deal with the coercive premium of self-funding knights. At least obligated, and hopefully conditional, land tenure was better for royal power than unencumbered freehold.
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Moore broadly understands, but does not explicitly articulate, the central importance of selective pressures on the evolution of social formations. Thus, the sexual restriction of younger siblings who were barred from the marriage market by being landless (p.89) had to have a powerful social force behind it. Which it did – the demands of power itself. Younger sons did not inherit the patrimony, but it still equipped, trained and defended them (as it would not any sons they might have) that it could not do satisfactorily if divided: particularly in highly competitive circumstances.

Similarly, the shift from limited slavery to mass serfdom permits localised control of scarce labour but requires concentrated, local coercive power to enforce.

Castles are for mounted troops. Foot soldiers build forts. A castle can dominate up to 800sqkm, the range there-and-back of mounted troops in a day. Mounted troops have the range and concentration of effect required to impose order and extract sufficient concentrated surplus permitting localised castle-building. Hence the lack of castles, as distinct from royal burghs, in the foot-soldier-dominated Englisc (“Anglo-Saxon”) kindgom prior to the Norman conquest.

Competition to equip, maintain and develop personal warrior efficiency therefore drove demands of wealth. A more layered society created a premium to retain coherent lands, able to support wealth and maintain status: commercial variety created easier opportunities to do so. Hence the spread down the social order of primogeniture.

The medieval order is the knightly order—the social order where the milites, the bellatores, the mounted warrior was central—that is what is distinctive about it. Kings and priests existed before and after. Scarcity of administrative resources was shared with the Dark Ages. The properly medieval comes with the rise of the knights, the modern with their eclipse. The abandonment of the tournament as a great act of social display is as good enough a marker of the passing of the medieval as anything.

Moore identifies the collapse of central power as the loss of booty from conquest to buttress royal power. This is an important factor, but will not do to drive his revolution – Englisc royal power neither relied on booty nor decayed. Indeed, it was precisely the strength of royal dominance that made the kingdom such an attractive target (due to the income it could extract).

It was clearly true that booty could provide a buttress for royal power: hence the advantages of Ottonian Germany and Castile over France and Catalonia. And it provides an excellent explanation why the replacement of appointed local power by inherited local power in Japan, with its open northern frontier, was much more similar to the German than the French pattern.

Which points to Moore’s biggest analytical failing: there is not a single reference to Japan (a mistake which, for example, Marc Bloch did not make). Moore does use other societies for compare and contrast (I loved the ‘cowrie shell’ analysis of patterns of land swapping between noble clans and monasteries). Moore understands the profound difference between Latin Europe and imperial Chinese rule: but not the reasons for them – a mistake likely to be avoided if he had considered the case of Japan. Just as he would have been much better placed to understand the implications of increased coercive effectiveness of mounted warriors. Examining the samurai makes the knights so much more explicable (and vice versa). Thus chivalry and bushido are both religiously embedded warrior codes using honour to get an ethical handle on the predation paradox – we need political authority to protect us against social predators, but rulership itself is the most dangerous of all social predators – for warriors directly embedded in society. This is quite distinct from the duty-of-office applicable to centrally paid, equipped and trained soldiers: the Roman and the modern model,

But Japan and Europe shared other features. One was vertically divided authority – in Europe, Crown and Church. In Japan, tenno (imperial civil government) and bakufu (military government). (C16th European commentators on Japan, trying to understand the roles of mikado and shogun called the former ‘the Pope’ and the latter ‘the King’ of Japan: they were not so far wrong.) A book such as Warrior rule in Japan makes quite clear how central legal jurisdiction was in building authority in Japan: all the way down the society, just as in Latin Europe but not as in the rest of Eurasia, such as China (though some of the references to European medieval history and terms in Warrior Rule made me shudder.)

In China, rule tended towards being simply social predation. A minimal level of public goods being provided to make predation more convenient. In Japan and Latin Europe, with their competitive jurisdictions (both institutionally – vertically – and territorially – laterally), provision of public goods was a way of buttressing and constructing authority. So in both societies, authority was much more socially pervasive and the level of provision of public goods much higher. Which includes the way that Church sought to present itself – as arbiter and mediator (p.85) with personal chastity and poverty both differentiating from and supplementing the bellatores (p.87).

Medieval Europe and medieval Japan were both periods of warrior rule. Each is made more understandable by being examined the light of the other.