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Oxford Univ Press, NYC., 1961, 380 pgs., index, maps, notes, paperback
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Reviewer comment
- This book is a history of the same periods that are included in Carl
Friedrich's - The Age of the Baroque
- and Frederick Nussbaum's The Triumph
of Science and Reason. I focus on the sections describing economics and
finance. These provide more historical background for readers of Dr.
McCloskey's three volumes on the bourgeoise and
Felix Martin's book on the history of money. It also includes more background on
warfare, diplomacy, 'state' building and political theory for Philip Bobbitt's
great book - Shield of Achilles., in which he
descries the creation of the concept of 'state' and its development; and the
dramatic changes in wealth, financial activity and prices described by David
Fischer in The Great Wave which
describes the several price - revolutions in Europe since 1200.
The Seventeenth Century in western Europe was a time of major change - the
central period in which Europe crossed from its Medieval era to its Modern era.
As the chapter titles indicate, the author has focused on the typical topics
from economics of daily life to philosophy and high level art and architecture.
It is frequently called "The Age of the Baroque" or considered an age
during which wielding of power dominated, or in which knowledge was transformed
into power.
Fron the chaper titles the reader here can see the scope of this valuable
history, but for our purposes we confine comment to the sections dealing with
economics, commerce, fianace, trade.
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Chapter 1 - Introductory
"Somewhere about the middle of the seventeenth century European life was
so completely transformed in many of its aspects that we commonly think of this
as one of the great watersheds of modern history, comparable with the
Renaissance or Reformation or the French Revolution".
"Within a few years of the execution of Charles I and the Peace of
Westphalia, the long economic process of the price-revolution, through which
the wealth of Europe had expanded, came to an end, to be followed by a new
phase of restriction and new commercial conflicts between states".
It was a century, as the author notes, that began with Galileo and concluded
with Newton. He comments that the changes in all spheres of life were
connected, but that: "A historian who wished to carve the meat of reality
at the joints will not be satisfied with a vague perception that all these
things are connected: he will investigate how they are connected, and how
closely". Sir George writes that, of necessity, he has focused on some
major subjects, but left out others such as agriculture, family life, music and
law.
He continues with a general discussion on the meaning of 'civilization' and the
understanding of the concept during different centuries. And he devotes much
space to discussion of the influence of Asia and the changing role of and
attitude toward religion as components of 'civilization'.
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Chapter 2 - Population
"One of the clearest differences between the seventeenth century and the
twentieth is that nowadays government is conducted on the basis of statistics,
but then there were scarcely any statistics to be had, and such as existed were
very little used".
"While this is quite generally the case it is nowhere more clear than in
the matter of what are now called 'vital statistics', the figures relating to
births, deaths, marriages, and population. No country in modern Europe had a
regular, periodical, national census before the French Revolution".
"By means of certain rules of thumb or certain presumptions about the
structure of society, it is possible to infer what was the population of a
country from the known, if not always very trustworthy, figures of its taxable
returns or religious sects or military levies".
"There is, indeed, no doubt at all that the population of Europe, taken as
together, and of almost every part of it, as long as the unit taken is not so
small as a single town or village, was very much smaller than it is now".
The author continues by providing as much 'statistics' as he can on the
population of countries, towns, and other places.
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Chapter 3 - Economic Policy and Ideas
"The growth of population, if and where it came about, was part of the
larger fact that this was a time of economic progress". The author writes
that with expanding economic activity there were "more rich men and there
were richer men".
"On the economic side also it was more than a change of scale. As markets,
businesses, transactions became larger, they necessarily came to be different
in kind. In all organizations a change of size means a change of system, and
economic progress in the sense of advancing wealth had its counterpart in
changing organization".
"Business success with other forces was impelling Europe in the direction
of capitalism".
"In the seventeenth century the process of accumulation was going on. Many
different types of men by various means wee becoming capitalists".
The author continues with separate descriptions of economic change and change
in the management of economic affairs in England, France, Spain, Holland and
Germany.
"The Dutch influence was more purely economic". (That is in
comparison with the other countries mentioned. It was less in non-economic
social affairs and more in economic activities and methods.) He discusses how
this was already understood by the English who marveled at Dutch advances in
business and finance. And the British didn't wait long to begin copying.
"The first thing that enabled them to do so was the immigration of
Dutchmen to our shores". "The diversity of their occupations shows
how important the movement was". He lists many. "Nor was the
superiority of the Dutch confined to these numerous kinds of technical skill.
There was much to copy in their social organization". "They were
certainly before us, and were held up by various writers as deserving imitation
in banking".
The author discusses a wide variety of changes, many enabled by the end of
medieval ideas and regulations. He quotes Adam Smith's excellent appraisal of
the changes in economic policy, especially of the former problem created by
'mercantile system'. This leads him into a lengthy discussion of just what
'mercantilism' actually was.
"It was a system of political economy, that is to say it was a system for
the regulation of economic matters by the state. It was, in Adam Smith's words,
a system for 'enriching the people', and its essence is that it was to do so by
means of commerce, and more particularly by the state regulation of
commerce". And by 'regulation' they meant and Sir George writes - they
meant regulation of everything. Sir George provides much interesting detail and
commentary on it. This enables us to visualize its recurring elements today.
"These two elements of protection and regimentation remained throughout
the mercantile epoch the fundamental principles of economic organization, but
with this great difference (from medieval era), that now it was the state, no
longer the town or its organ, the guild, which granted the privilege and
protected against the unprivileged and the foreigner". He continues by
discussing the reasons for this role of the state, noting that it is an error
to think that monarchs and their ministers didn't understand their economic
needs.
"From the primary political need for order and security he (Francis Bacon)
deduces the necessity for an active government supervision of every department
of economic life". "So it came about that the state became the
watchful and despotic guardian of economic interests of its inhabitants. As the
seventeenth century went on it learnt to apply its whole strength in this
effort". "Thus the consequences, like the causes, of the mercantile
system extended far beyond the economic sphere; but it was none the less in
that sphere that it had its centre. The key to it was the enrichment of the
nation. The nation, the people ruled by one state, became the economic
unit".
Sir George continues with more detail. Then discusses the, misunderstood today,
priority mercantilists had in obtaining and keeping gold and silver. They well
understood the necessity to do this in terms of the nature of their financial
systems and the central role played by currency, coins of gold and silver.
Basically, the expanding daily commerce required more and more currency for
daily exchange, and that meant more gold in circulation. And "they wanted
coin to pay their armies".
Interestingly the Dutch alone wanted coin and uncoined bullion in order to sell
it at a profit. To them gold and silver were commodities to be exchanged for a
profit. Of course their own commercial affairs were not dependent on coins as a
means of exchange. But some economists today deny that money can be a
commodity. And there is much more of value for today in this chapter.
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Chapter 4 - Commerce, Finance, and Communications
This is another chapter filled with facts and analysis of the period, but also
with lessons for us today. The author begins with extensive discussion of
international and local commerce, what goods were being exchanged, and from
where to where and why. He cites the 'revolution in prices' - read The Great
Wave.
He then discusses the changes in organizational structure of the merchant
class's way of doing business, with the creation of joint stock companies.
These were approved by the governments as monopolies. Some became wealthy and
some collapsed. He notes that by Adam Smith's time there were 5 great English
companies and the three greatest were the - East India Company , Bank of
England, and the South Sea Company.
"Every one of these companies in every country owed its existence to an
act of the state. Government aid, often in other forms as well, but always in
one indispensable form was the grant of a monopoly". After providing much
interesting detail he turns to banking.
"Not less important in economic history than the changes in the
organization of commerce and even more directly important for their involvement
in political development were the changes in finance. The two are, of course,
closely interwoven, and we have already once or twice touched upon the latter
of them". "One of the factors in the rise of capitalism was the need
of large sums of money for military purposes at the end of the Middle Ages. War
had become a great industry which princes could not carry on with their own
resources, and which they had to resign to condottiere and capitalists".
Initially the princes could rely on the great banking houses such as the
Fuggers'.
"This age ended when the need for money rose to still greater proportions,
and the banker dynasties could no longer meet it. The change which made the
next step in the swelling of finances possible was the substitution of the
credit of the state for the credit of private financial houses. War became an
industry of the state. The only credit adequate to carry it on was the credit
of the states, or more exactly of the great lending states, around which were
grouped fringes of smaller, poorer, subsidized, or borrowing states, the
clients of the great allies who financed their little armies for them".
(Please read Bobbitt and Fischer on this.) Indeed this was the same factor that
caused the creation of the abstract concept of the 'state' itself.
Sir George describes the financial collapse of Spain and the at least temporary
success of France with its great minister, Colbet. Then he turns to England and
Holland. The English were doing fairly well from reign of Elizabeth I,
"the one solvent monarch of her time' until the Stuarts failed up to the
'stop on the exchequer' by Charles II.
"The one state which throughout the century was always solvent was the
Dutch republic".
The reasons, which the author sets out in detail, are still good lessons.
"That was really the most important point of all. Sound public finance is
not likely to exist except on a basis of sound private finance; and sound
private finance comes into existence when there is a healthy business community
to give it employment and keep it straight".
Not one whose financial affairs and means are manipulated by a anti-business
central bank.
From finance the author turns to transportation. He gives us some enlightening
and humorous anecdotes about the deplorable condition of roads, neglected since
the end of the Roman Empire.
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Chapter 5 - Industries
"If we wish to find a link between th edevelopment of industry and the
wider intelectual life of a community, it is natural to seek it in the history
of mechanical and chemical invention".
But, Sir George writes, there is a problem, namely that the eagerness of all
concerned to claim credit for anything of value has resulted in a confusion of
claims, not only by individuals but by towns, and countries eager to uphold
'favorite sons'.
"In the seventeenth century the face of European life was being changed by
the gradual dissemination of processes and devices which had been hit upon in
the sixteenth or earlier". He provides an extensive list of specific items
and processes. But, he notes, there are too many even to list. Nevertheless, he
discusses the general situation and gives considerable credit in France to
minister Colbert. He writes that a major cause of retarded develoment was the
retention of Medieval rules and constraints, but that these were being
abolished."
As we know today, there is always a strong effort by those who benefit from the
status quo to block any change that might cause a reduction in their own
influence or profits.
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Chapter 6 - Comparative Constitutional History
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Chapter 7 - Armies
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Chapter 8 - Navies
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Chapter 9 - International Law and Diplomacy
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Chapter 10 - Frontiers
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Chapter 11 - The Interests of the States
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Chapter 12 - Relations with Asia by Land
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Chapter 13 - Colonies
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Chapter 14 - Political thought
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Chapter 15 - Mathematics and Science
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Chapter 16 - Philosophy
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Chapter 17 - Classical and Historical Studies
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Chapter 18 - Education
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Chapter 19 - Religion
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Chapter 20 - Literature
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Chapter 21 - Painting and Architecture
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Appendix: Races and Languages
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