A hiperinflacao de Chiang Kai-Shek levou a China ao comunismo - Jonathan Fenby book

Mao Tse-tung parece ter sido mais vitorioso por causa da inflação do que pela potência de suas tropas:

Today's selection -- from Chiang Kai-Shek by Jonathan Fenby. In 1947, it looked certain that Chiang Kai-shek and the Nationalists would triumph over Mao Zedong and the Communists in the battle for China, but mismanagement of the economy and crippling hyperinflation destroyed his chances: "On 7 August 1947, Chiang Kai-shek flew over the loess country of northern Shaanxi to the town [of Yan'an] where Mao had found his haven at the end of the [now legendary] Long March. The Generalissimo walked briskly through Yan'an, accompanied by a triumphant group of generals led by General Hu Zongnan, the 'Eagle of the North-West' who had ring-fenced the base area during the war with Japan. China's Wartime Finance and Inflation: 1937 -- 1945, 1965 "[Hu] had taken Yan'an without a fight -- the Communist leadership had already trekked out. The place was of no importance in itself, and the bleak countryside of northern Shaanxi offered no benefits for the Nationalists. But that meant little beside the symbolism of having forced Mao and his colleagues to flee once more, the Communist leader on a horse while his troops marched round him. Chiang went to see Mao's house and the long tunnel connecting it to Zhu De's headquarters as Nationalist photographers took snaps of poppies and the 'Local Product Company' building to show that the Communists had been dealing in opium. "A combination of huge forces, American supplies and transport, plus some good generalship in the north had put Chiang in what looked like an unassailable position in the first eighteen months after the end of the war with Japan. Mercenary armies came back under the Nationalist flag. He had the active support of the China Lobby in the United States, combining politicians in Washington, a network of businessmen round T. V. Soong and H. H. Kung, and the influence of [Time magazine and the other Henry] Luce magazines. The Republican, Thomas Dewey, seemed well placed to beat Truman in the 1948 presidential election -- after a visit to America, Chen Lifu told a Shanghai newspaper that this would mean 'extraordinary measures' to send military aid to China. But, as so often, Chiang's position was more hollow than it appeared. By the time he walked through Yan'an, his military fortunes had peaked, and the disintegration of areas under Nationalist control was racing ahead. 1950 propaganda cartoon (via ChinaSmack). The caption in the right panel reads, Now currency has stable rates, gold and greenbacks are disgraced, Renminbi are widely trusted, speculators have been busted. "Hyperinflation was destroying the middle classes and honest officials; wholesale prices in Shanghai rose by 45 per cent in a single month. The mother of the author of Wild Swans, Jung Chang, had to hire a rickshaw to carry the huge pile of notes needed to pay her school fees in the Manchurian city of Jinzhou where beggars tried to sell their children for food. Labour unrest grew -- there were 4,200 strikes in Shanghai in 1946-47. In some universities, police agents masquerading as students patrolled the campuses with guns under their gowns searching for subversives. In [Beijing], troops fired on a protest by 3,000 students, killing several. In Kunming, five dissidents were shot by police, and more than 1,000 were held in a jail, pulled out of the cells at midnight to kneel in the gravel yard while soldiers waved bayonets at them and told them to confess to being Communists -- the American journalist Jack Belden added that more than thirty were buried alive. The protests were encouraged by the Communists, but were, above all, a sign of war-weariness and alienation from a regime that had nothing more to offer. "Not that support for the Communists was as widespread and automatic as subsequent propaganda would assert. The party demonstrated great skill in organising the peasantry, but its revolution was often imposed rather than being the result of spontaneous popular uprising." To subscribe, please click here or text "nonfiction" to 22828.

Chiang Kai-Shek: China's Generalissimo and the Nation He Lost Author: Jonathan Fenby Publisher: Carroll & Graf Publishers Copyright 2003 by Jonathan Fenby Pages: 473-475 If you wish to read further: Buy Now

A partilha da Africa: excerto de livro - Delanceyplace

Today's selection -- from The Fortunes of Africa: A 5000-Year History of Wealth, Greed, and Endeavor by Martin Meredith. In the scramble for Africa, European powers arbitrarily merged 10,000 different African polities representing highly diverse ethnic and religious groups into just forty colonies, an action that still haunts the countries of Africa today:

"A greedy and devious European monarch, Leopold II of Belgium, set out to amass a personal fortune from ivory, declaring himself 'King-Sovereign' of a million square miles of the Congo Basin. When profits from the ivory trade began to dwindle, Leopold turned to another commodity -- wild rubber -- to make his money. Several million Africans died as a result of the rubber regime that Leopold enforced, but Leopold himself succeeded in becoming one of the richest men in the world.

"In turn, Leopold's ambition to acquire what he called 'a slice of this magnifique gateau africain' was largely responsible for igniting the 'scramble' for African territory among European powers at the end of the nineteenth century. Hitherto, European activity in Africa had been confined mainly to small, isolated enclaves on the coast used for trading purposes. Only along the Mediterranean coast of Algeria and at the foot of southern Africa had European settlement taken root. But now Africa became the target of fierce European competition.

"In the space of twenty years, mainly in the hope of gaining economic benefit and for reasons of national prestige, European powers claimed possession of virtually the entire continent. Europe's occupation precipitated wars of resistance in almost every part of the continent. Scores of African rulers who opposed colonial rule died in battle or were executed or sent into exile after defeat. In the concluding act of partition, Britain, at the height of its imperial power, provoked a war with two Boer republics in southern Africa, determined to get its hands on the richest goldfield ever discovered, leaving a legacy of bitterness and hatred among Afrikaners that lasted for generations.

"By the end of the scramble, European powers had merged some 10,000 African polities into just forty colonies. The new territories were almost all artificial entities, with boundaries that paid scant attention to the myriad of monarchies, chiefdoms and other societies on the ground. Most encompassed scores of diverse groups that shared no common history, culture, language or religion. Some were formed across the great divide between the desert regions of the Sahara and the belt of tropical forests to the south, throwing together Muslim and non-Muslim peoples in latent hostility. But all endured to form the basis of the modern states of Africa. ...

"Colonial rule was expected to last for hundreds of years, but turned out to be only an interlude in Africa's history, lasting for little more than seventy years. Facing a rising tide of anti-colonial protest and insurrection, European governments handed over their African territories to independence movements. The colonial legacy included a framework of schools, medical services and transport infrastructure. Western education and literacy transformed African societies in tropical Africa. But only a few islands of modern economic development emerged, most of them confined to coastal areas or to mining enterprises in areas such as Katanga and the Zambian copper belt. Much of the interior remained undeveloped, remote, cut off from contact with the modern world. Moreover, while European governments departed, European companies retained their hold over business empires built up over half a century. Almost all modern manufacturing, banking, import-export trade, shipping, mining, plantations and timber enterprises remained largely in the hands of foreign corporations. As the end of colonial rule approached, Europeans followed the old adage: 'Give them parliament and keep the banks.' " 

The Fortunes of Africa: A 5000-Year History of Wealth, Greed, and Endeavor

Author: Martin Meredith 

Publisher: PublicAffairs a Member of the Perseus Books Group

Copyright 2014 by Martin Meredith

Pages xv-xvi

If you wish to read further: Buy Now

Cixi: The Concubine Who Launched Modern China (book excerpt) - Delanceyplace

Today's selection -- from Empress Dowager Cixi by Jung Chang.
Upon the death of Emperor Xianfeng (1831-1861), his five-year-old son succeeded to the throne under the supervision of a Board of Regents. At the time of his father's death, his mother, imperial consort Cixi, had no political standing. In fact, she was not even considered the young emperor's official mother. The widowed Empress Zhen was officially the empress dowager. Both women distrusted the young emperor's Regents since they had poorly advised his father during the opium wars, and they worked together to both be recognized as Dowager Empresses -- and then staged a coup:

Portrait of Empress Dowager Ci'an (co-regent with Cixi)

"The Two Dowager Empresses ... decided on different honorific names. Empress Zhen took 'Ci'an', which means 'kindly and serene',  and Cixi, hitherto called Imperial Concubine Yi, took Cixi, meaning 'kindly and joyous'.  ... They went on to form a political alliance and launch a coup. Cixi was twenty-five years old and Empress Zhen a year younger. Facing them were eight powerful men in control of the state machine. The women were well aware of the risk they were taking. A coup was treason, and if it failed punishment would be the most painful ling-chi, death by a thousand cuts. ...

"Cixi devised an ingenious plan. She had noticed a loophole in her husband's deathbed arrangements. The Qing emperors demonstrated their authority by writing in crimson ink. For nearly 200 years, beginning with Emperor Kangxi as a young adult, these crimson-inked instructions had always been written strictly by the hand of the emperor. Now, however, the monarch was a child and could not hold the brush. When the decrees were issued by the Board of Regents in the child's name, there was nothing to show authority. ... This deficiency was pointed out to the Board after it issued the first batch of decrees. It was told, then, that the late emperor had given one informal seal to the child, which was kept by Cixi, and another similar seal to Empress Zhen. It was suggested to the Board that these seals could be stamped on the decrees as the equivalent of the crimson-ink writing, to authenticate them. ...

"The Board of Regents accepted the solution and announced that all future edicts would be stamped with the seals. ... The authority of the seals was thus established, an accomplishment that would be vital in the forthcoming coup. ... Next the women tried to secure Prince Gong as an ally. The prince was the foremost nobleman in the land and was held in high esteem. ... 

"[W]ithin days of her husband's death, Cixi quietly extracted an edict out of the Regents allowing Prince Gong to visit the Hunting Lodge to bid his late half-brother farewell -- in spite of the late emperor's order.  ... Prince Gong was [given] a very long audience [with the Empresses], much longer than any the Regents had been given. But it rang no alarm bells with them. ...

"Knowing how prudent the prince was, Cixi, it seems, did not broach the idea of a coup at this first meeting. Overturning the late emperor's solemn will was not something he would readily contemplate. What the conversation seems to have achieved was an acceptance from Prince Gong that the empire should not be left entirely in the hands of the Board of Regents, who, after all, had such a woeful track record. On this basis, the prince agreed to get someone in his camp to petition for the Two Dowager Empresses to take part in decision-making, and for 'one or two close princes of the blood to be selected to assist with the affairs'. The petition would not mention Prince Gong by name. He clearly wanted to avoid the impression that he coveted power, even though he had solid ground to stake a claim.

Empress Dowager Cixi

"This idea was secretly conveyed to Prince Gong's camp in Beijing, and a relatively junior subordinate was designated to write the petition. Prince Gong feared that the Board of Regents might detect the link with him when they saw the petition, so he left the Hunting Lodge before it arrived. ... As expected, the Regents rejected the petition unequivocally, on the grounds that the late emperor's will could not be altered, plus the cast-iron rule that women must be kept away from politics. Cixi now had to make the Regents do something inexcusable so that Prince Gong would agree to oust them. She and Empress Zhen set out to provoke an offence. Cradling the child emperor, they summoned the Regents and engaged them in a heated confrontation about the petition. The men grew angry and replied contemptuously that, as Regents, they did not have to answer to the two women. As they roared, the child became scared and cried and wet his pants. After a prolonged row, Cixi gave the impression that she bowed to their verdict. The petition was publicly rejected in the name of the child emperor.

"Cixi had engineered a major offence by the Regents -- that they dared to shout and behave disrespectfully in front of the emperor and had frightened him. Citing this event, she drafted by hand an edict in her son's name condemning the Regents. ...

"On the last day of the ninth lunar month of 1861 ... Cixi ignited the fuse of her coup. She told Prince Gong to bring his associates to her and Empress Zhen, and when they arrived she had the coup edict declared to them. In a winsome show of grief, the Two Dowager Empresses denounced the Regents for bullying them and the child emperor. All present showed great indignation. In the middle of the denunciation, the Regents who had been travelling with Cixi rushed into the palace and shouted outside the hall that the women had broken a cardinal rule by calling the male officials into the harem. Cixi, looking mightily incensed, ordered a second edict written and stamped there and then: for the arrest of the Regents, on the grounds that they were trying to prevent the emperor from seeing his officials, which was a major crime.

"The original edict had only ordered the Regents' dismissal from their positions. Now Prince Gong took the new decree and went to arrest the Regents who had been shouting. They bellowed: 'We are the ones who write decrees! Yours can't be proper since we did not write them!' But the two magic seals silenced them. Guards brought
by the prince dragged them away. "

Empress Dowager Cixi: The Concubine Who Launched Modern China
Author: Jung Chang
Publisher: Alfred A Knopf
Copyright 2013 by Globalflair, Ltd
Pages 41-48

Delanceyplace is a brief daily email with an excerpt or quote we view as interesting or noteworthy, offered with commentary to provide context.  There is no theme, except that most excerpts will come from a non-fiction work, mainly works of history, are occasionally controversial, and we hope will have a more universal relevance than simply the subject of the book from which they came. 

Delanceyplace.com | 1807 Delancey Place | Philadelphia | PA | 19103

A Grande Guerra e o Mundo de entre-guerras: um livro a ser lido

Vou comprar agora mesmo; imediatamente.

PRA

Today's selection - from The Deluge by Adam Tooze. Russian communism never worked. From the very first days of their rule, Vladimir Lenin, Leon Trotsky and the other communist leaders in Russia abandoned long-held ideological principles and instead governed as a brutal, coercive regime. And again and again, the country almost imploded under their leadership:

"By early 1921, Trotsky and the Red Army had triumphed in the civil war [over the White Army and other factions]. But victory had come at a heavy price. To avoid alienating the rural population, the Reds had abandoned any talk of collective farming, or the socialization of the land. The villagers were allowed to keep whatever land they had seized in 1917. This kept the peasants out of the clutches of counter-revolution. But it created a profound dilemma. Under the system of so-called 'war communism', the workers were paid almost entirely in ration entitlements. Already by 1918 the Russian currency had become virtually worthless. With the peasants in control of the land, as food supplies in the cities dwindled, the regime had no option but to resort to requisitioning, if necessary by force. The result was a terrifying downward spiral, in which peasant cultivation collapsed and the urban population, threatened with starvation, fled back to the countryside. The Soviet regime had won the civil war, but as a movement of proletarian revolution it had forfeited its raison d'etre. Its international campaign of revolution had failed. And what was left of Russia was a far cry from what Marxism had promised. By the end of 1920 the population of Petrograd had plunged by 75 percent and that of Moscow by almost half. 

Vladimir Lenin, Klim Voroshilov and Leon Trotsky and soldiers, Petrograd, 1921

"For Lenin himself there was one pre-eminent benchmark for the success of his regime: the Paris Commune of 1871, the originator of modern Communism. In early March 1921, as the Bolshevik regime prepared to celebrate the fiftieth anniversary of that revolutionary landmark at the 10th Party Congress, it was shaken by an event unprecedented in its own history. On 1 March the soldiers and sailors of the Kronstadt naval base outside Petrograd, one of the legendary sites of the 1917 revolution, rose up in rebellion against the Soviet regime. They issued a manifesto calling for free and fair elections to the Soviets, freedom of speech, the right of assembly for non-party members, the formation of free labour unions, the release of all socialist political prisoners and the independent investigation of the charges against all those incarcerated by the regime, the separation of party and state, the equalization of rations, and the granting of full freedom for production for small independent producers. Against this libertarian challenge the Bolsheviks responded as they had done consistently since November 1917, with massive force. With Tukhachevsky taking command, 50,000 Red Guards were hurled against Kronstadt. Perhaps as many as two thousand rebels were executed. Thousands more were jailed. By the time the 10th Party Congress had concluded, the tidy-up had begun.

"On politics there could be no compromise. But on economic policy Lenin was willing to be flexible. The strategy of forced contributions had led to a disaster. Inflation was rampant. In the factories there was a veritable epidemic of absenteeism. On 21 March the sensation of the Communist Party conference was Lenin's proclamation of the so-called New Economic Policy. In towns and cities the strategy of total collectivization was reversed. Private property was permitted for businesses employing fewer than 20 workers. The coercive requisitioning of food was replaced by a regular tax that from 1924 was levied in cash. To restore confidence, a new gold-backed currency would be introduced.

"By 1921, having abandoned its revolutionary invasion of Poland and its global campaign against the British Empire, and having retreated publicly, both at home and abroad, toward a compromise with capitalism, the Soviet regime appeared to the Western Powers less like a revolutionary threat than a failed state. As harvest season approached and a drought struck the weakened farmers of the Volga region, it became apparent that the New Economic Policy had come too late. The civil war had already cost well over a million dead. Now, in what had once been the bread basket of Europe, tens of millions were at risk of starvation. On 13 July, Lenin licensed the non-conformist writer Maxim Gorky to issue an international appeal for charity, not on behalf of worldwide revolution, but in the language of humanism, on behalf of 'the country of Tolstoy, Dostoyevsky, Mendeleyev ... Mussorgsky' and 'Glinka'. 'All honest people' across the world were to rally to his country's aid. This was no longer revolutionary internationalism. Without 'bread and medicine' Russia itself would die." 

The Deluge: The Great War, America and the Remaking of the Global Order, 1916-1931

Author: Adam Tooze 

Publisher: Viking Adult

Copyright 2014 by Adam Tooze

Pages: 422-423

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Historia economica dos Estados Unidos: a primeira economia mundial desde 1870 (Delanceyplace)

Today's encore selection -- from Land of Promise by Michael Lind. By 1868, the United States had already become the world's largest economy, and by 1914 -- the dawn of World War I -- the US economy was larger than the economies of Britain, France, and Germany combined. With such extraordinary growth, the US required enormous new resources -- especially labor. To fill that need, immigrants came pouring into the US from around the world, turning America into a nation of immigrants. Greeting many of these immigrants was the Statue of Liberty and Emma Lazarus's immortal phrase, "give us your tired, your poor, your huddled masses yearning to breathe free":

"In 1867-1868, the United States surpassed Britain in gross domestic product (GDP), becoming the world's largest economy. The growth of the size of the American economy was driven by a combination of productivity growth with a rapid increase in population, driven by mass immigration from Europe between the 1840s and World War I.

"The US population increased from forty million in 1870 to seventy-six million in 1900. Two-thirds of the growth was the result of natural increase, one-third the result of immigration.

"Of the seventy-six million Americans in 1900, a third were either foreign born or the children of foreign-born parents. In 1910, the foreign-born and their first-generation children accounted for more than 70 percent of the population in New York, Chicago, Boston, Milwaukee, and Detroit.

"The Statue of Liberty was unveiled at a ceremony attended by President Grover Cleveland on October 28, 1886. The New York Herald described the scene: 'Amid the uproar and excitement that succeeded the consecration of the statue, there glided through the Narrows a huge steamship crowded with European immigrants. From her decks the eyes of the strangers were fixed upon the wonderful drama in progress before them. The cannon smoke and vapor rolled up, and ringed in a huge, fire-fringed semicircle, they saw before them the mighty figure of Liberty. Imagination can only conceive of what to their tired eyes, weary with the hardships, the hopelessness and the cruelties of the Old World, this apparition must have conveyed.'

"Although the purpose of the Statue of Liberty was to commemorate the French-American alliance during the American Revolution, it became an inspiring symbol to the millions of immigrants who passed it before arriving to be processed for entry to the United States at Ellis Island. The link between the statue and immigration was reinforced by 'The New Colossus,' the 1883 poem by Emma Lazarus engraved into the base:

Not like the brazen giant of Greek fame,
With conquering limbs astride from land to land;
Here at our sea-washed, sunset gates shall stand
A mighty woman with a torch, whose flame
Is the imprisoned lightning, and her name
Mother of Exiles. From her beacon-hand
Glows world-wide welcome; her mild eyes command
The air-bridged harbor that twin cities frame.
'Keep, ancient lands, your storied pomp!' cries she
With silent lips. 'Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!' "

Land of Promise: An Economic History of the United States
Author: Michael Lind
Publisher: Harper Paperbacks
Copyright 2012 by Michael Lind
Pages: 168-169

Finaceirizacao, French Style - Delanceyplace

Os nossos keynesianos de botequim, em especial os economistas esquizofrênicos do PT (que talvez não merecem a classificação de economistas) adoram (no sentido de detestam) a palavra e o conceito (por eles inventado, com a ajuda de outros da mesma tribo) de "financeirização".
Para eles se trata da preeminência indevida, exagerada, perversa, indesejada, do setor financeiro-bancário no conjunto da economia, tomando o lugar do setor clássico no marxismo que eles adoram, mesmo detestando: o setor produtivo.
Até parece que uma conspiração de banqueiros tomou de assalto o poder político e toda a economia para sugar todos os demais setores, ocupando espaços sobre e em detrimento do que eles mais gostam/detestam: aquele estalinismo industrial que fazia o grosso da massa de manobra dos partidos comunistas e dos sindicatos leninistas.
Eles nunca desconfiaram que quem criou, alimentou, assegurou a preeminência e garantiu os gordos lucros dos "financistas" foram os próprios soberanos, e continua sendo o Estado superdimensionado que eles fortalecem e engrandecem.
Aqui abaixo, uma história da ascensão dos amigos/inimigos dos totalitários em sua vertente francesa.
Paulo Roberto de Almeida

Today's selection -- from How Paris Became Paris by Joan DeJean. The first gigantic modern fortunes in Paris originated in the early 1600s not with the profits of commerce or industry but from high finance. These financiers arose through the profligacy of the king -- both in his wars (the army grew from 40,000 soldiers to 400,000) and his lifestyle. The sheer magnitude of the king's needs meant that the bankers of Paris displaced the famed bankers of Florence as the most important in Europe: 

"In the word financier's inaugural appearance in English, in the 1652The State of France, John Evelyn explained the workings of 'the king's revenue' and described 'the great Financiers who suck the very blood of the French people.'

"For the first time, Europeans could use words invented with the objective of classifying individuals according to their financial status and of singling out persons of new wealth. Such individuals had existed before but evidently not in sufficient numbers for a society to bestow official linguistic recognition on the phenomenon. And whereas previously, in European cities such as Venice and Amsterdam, most recent wealth had been accumulated through trade and the overseas trade in particular, the parvenus of seventeenth-century Paris had amassed their fortunes by dealing not in goods but solely in money.

"The emergence of the financier began in about 1600, when the French monarchy first encountered fiscal problems that have ever since plagued the modern state. 

"Prior to the seventeenth century and early in that century, the French state lived mostly within its means: Henri IV even built up a small surplus (Adam Smith claimed he was one of the last rulers ever to do so). Then, during the first quarter of the century, spending began to outstrip revenue. As a result, the bankers, especially Italians, who had ruled over the finances of all European nations in the sixteenth century gradually ceased to play a preeminent role in France. The individuals then known as bankers dealt in foreign currency exchange and transferred funds throughout Europe. When, for example, a monarch had to pay soldiers stationed on foreign soil, he would call on a banker. But once French monarchs began to spend on a previously unheard-of scale, the need for another type of financial agent became evident. Lyon, formerly the nucleus for French finance because of its association with Italian bankers, thus lost its centrality. And by the 1630s Paris -- home to the financiers, the new financial agents on whom the crown increasingly depended -- had become the country's uncontested finance hub.

"Whereas in the sixteenth century the French monarchy's revenue had remained stable, in the range of eight to twenty million livresannually, during the first half of the seventeenth century this situation changed dramatically. Between 1590 and 1622, for example, revenue rose from about eighteen million livres to an estimated fifty million a year; by 1653, the total had grown to roughly 109 million, and it stayed well over a hundred million throughout Louis XIV's reign. This meant that the French monarchy had access to resources that vastly outstripped those of its major European rivals. A noted eighteenth-century economist estimated that during Louis XIV's reign France's revenue was four times greater than England's and nearly three times superior to that of the Dutch Republic.

"Relatively little of that was spent on keeping up appearances: between 1600 and 1656, court expenses rose only from three millionlivres to six million. However, whereas in 1600 court expenses accounted for thirty-one percent of the budget, in 1656 they represented only seven percent. During that half-century, the cost of war changed the face of French finance.

"France was at war with foreign enemies for sixty of the years between 1615 and 1715; it was torn by civil war for another five. In addition, Europeans had begun to wage war on a scale without precedent. The Thirty Years' War (1618- 48), the War of the Grand Alliance or of the League of Augsburg (1688-97), and the War of the Spanish Succession (1701-14) made armed conflict more costly than ever before. As a result, the French military machine never ceased growing. Whereas, for example, in the 1590s the French royal army was only forty thousand strong, less than a century later Louis XIV maintained a force of about four hundred thousand. Since France's main rivals, England and Holland, were maritime powers and the French had no navy to speak of, the country spent on a colossal scale to acquire one: in 1661 its entire 'fleet' consisted of eighteen near wrecks, but soon one hundred and twenty vessels sailed under French colors.

"Such transformations were possible because those in charge of the finances of France had begun to follow a logic later presented by Adam Smith as 'the necessity of contracting debt in times of war': 'An immediate and great expense ... will not wait for the gradual and slow returns of new taxes. In this exigency government can have no other resource but in borrowing.'

"The French government's bookkeeping divided expenses into 'ordinary' (court expenses) and 'extraordinary.' Due to the rising cost of war, between 1600 and 1656, extraordinary expenses ballooned-from just seven million livres to over a hundred million. When budget deficits began to surge, the state began to borrow as never before and thus had recourse to a type of financial agent who surfaced in the late sixteenth century: the financier.

"The original financiers signed traités, tax or loan contracts, with the crown; they also bought, sometimes at auctions organized by the crown, charges or offices that made them part of a private fiscal administration with close ties to the government, an administration that vastly expanded in size in the course of the seventeenth century. In return, they acquired the right to collect a new tax or import or export duty from which they guaranteed the government a fixed income -- and from which they were allowed to retain a sizeable share of the profits. Contract terms varied with supply and demand, but financiers always lent money at a cost far above the official rate of between five and eight percent. At moments when a war was going badly and the monarchy's need was therefore most pressing and money most scarce, a rate of twenty-five percent became standard -- hence the steady rise in 'extraordinary' expenses, a category that included the interest on loans.

"Tax contracts were especially useful to the crown because the deal was closed and money changed hands very quickly. Contracts for five hundred thousand livres were soon common; many involved far larger amounts. Naturally, few financial agents were able to deal for such stakes: it's likely that, at any moment in the century, fewer than a hundred individuals virtually controlled the financial fate of France. As the monarchy became ever more dependent on credit because its needs were growing, that number shrank. And thus it was that the first gigantic modern fortunes in Paris originated not with the profits of commerce or industry but from high finance."

How Paris Became Paris: The Invention of the Modern City

Author: Joan DeJean 

Publisher: Bloomsbury USA

Copyright 2014 by Joan DeJean

Pages: 173-175

 If you wish to read further: Buy Now

O PIB faz a felicidade?: uma historia do PIB (book excerpt) - Delanceyplace

Today's selection -- from GDP: A Brief But Affectionate History by Diane Coyle. There has been much debate over whether a country's GDP growth correlates to its citizens' happiness. (GDP or gross domestic product is a measure of a country's size based on income and spending.) Many have concluded that there is little or no correlation, but economist Diane Coyle disagrees, even though she concedes that much of this "happiness" is rooted in that sort of consumeristic satisfaction that wears off quickly:

"The anti-GDP campaign has its roots in a famous article by the economist Richard Easterlin. He recorded an apparent paradox. Looking at the evidence at a single point in time, people are happier in richer countries than in poorer ones (we are talking about averages); but looking at one country over time, rising GDP per capita does not translate into increased happiness. As a number of economists have noted, the paradox is due to the nature of the statistics: GDP is an artificial figure that can increase without limit, whereas happiness (reported by people in surveys or diaries) has an upper limit. The relationship between the two is like that between GDP and, say, height, or life expectancy -- they are strongly linked, just not proportionately over time. The silliness of the notion that rising GDP does not increase happiness is even easier to see when you remember that a recession, when GDP declines just a little, makes people very unhappy. What's more, given that productivity increases over time, GDP has to rise to keep unemployment from going up; and higher unemployment would also make people unhappy.

"So the apparently obvious conclusion is based on a misunderstanding of the kinds of statistics being used to relate happiness and GDP. 'Happiness' is measured from surveys, with respondents asked to rate their feelings on a scale of 1 to 3 or 1 to 10. It can never climb above the top of the scale, even with centuries of data. GDP is a constructed statistic that can rise without limit. If you plot a line that climbs extremely gently over time against a line that rises steadily by 2-3 percent a year, they will look unrelated even if they are not [unrelated]. It turns out from a number of more recent studies that reported happiness is strongly positively linked with the change or growth in GDP per capita from year to year.

"There is a valid point that economic growth measured by GDP over time is not an accurate indicator of well-being or social welfare. (I'm going to use the term social welfare, but bear in mind that it does not mean welfare payments.) In the children's book The Lion, the Witch and the Wardrobe, the White Witch uses enchanted Turkish Delight candy to ensnare Edmund. Once he has had one piece, he cannot resist more. Consumerism is an addiction too. Psychology offers insights into the rat race and consumerism. The experimental evidence is that most people care more about status and therefore their relative income than they do about the absolute level of income. The 'conspicuous consumption' first named by Thorstein Veblen is a kind of arms race of status, and one that the excesses of corporate pay have let rip in the past quarter century. What's more, the satisfaction we get from extra income and purchases wears off quickly, leaving us, like Edmund in the story, hungry for another fix. The evocative technical term for this is the hedonic treadmill.

"If money is an addiction, it's not surprising that some people think society needs help being weaned off it. Economists such as Robert Frank and Richard Layard advocate a tax on purchases of luxury items. Another policy recommendation has had more traction: that instead of measuring GDP we should be measuring happiness. In the United Kingdom there is even a Campaign for Happiness. The government leapt on its bandwagon, ordering the Office for National Statistics to start a survey to measure happiness levels around the country. Grotesquely, there are cheerleaders for the king of Bhutan because of his claim that he seeks to increase gross national happiness, when Bhutan is one of the poorest and one of the more authoritarian countries in the world.

"The fashion for measuring happiness is based on two approaches to the evidence. One kind is the approach using top-down aggregate economic data that Richard Easterlin used in his original paper. Other studies look at the statistical links between the level of happiness people report in surveys and their personal circumstances: are they married? Employed? In good health? The results are comfortingly sensible. People are happier if they are in a job, married, healthy, or have a religious faith. People like spending time with their friends and family but not their boss, and hate commuting. There is a life cycle of happiness: in general, we are least happy in middle age ('middle age' ranging from thirty-six in the United Kingdom to sixty-six in Portugal). Women tend to be happier than men, although that relative advantage may have diminished over the decades. It is not clear, however, that there are all that many policy implications in these results. We already knew that voters hate it when unemployment goes up. The government can hardly start mandating marriage and churchgoing to enforce greater happiness. The most important new practical finding from these studies is that mental ill-health is a major contributor to unhappiness, and yet almost everywhere it is a low priority in public health policies.

"Still, no matter that the empirical evidence for the happiness bandwagon is weak. The idea that once countries had grown comfortably rich, it is folly to pursue further economic growth, has struck a chord. It is important, though, to be clear that GDP is not and was not intended to be a measure of national welfare. Economists have repeatedly cautioned themselves and others not to get the two mixed up."

GDP: A Brief but Affectionate History
Author: Diane Coyle
Publisher: Princeton University Press
Copyright 2014 by Diane Coyle
Pages 111-114

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A Invencao da Imprensa Moderna, Andrew Pettegree - Delanceyplace book excerpt

Today's selection -- from The Invention of News by Andrew Pettegree. In the wake of the invention of the printing press came printed news, first in the form of more lively news pamphlets, then in the form of more regular but less colorful newspapers.  From the very first newspaper published in 1605, the problems that still plague the industry were present. Real news was often dull so publishers were inclined to spice it up. Politicians and rulers had a vested interest in getting favorable coverage so they maneuvered to influence or own newspapers. And content was inclined toward advocacy rather than reporting:

"The real transformation of the news market [which prior to the printing press had been oral or laboriously hand-written] would come from the development of a news market in print. This would occur only haltingly after the first invention of printing in the mid-fifteenth century. For half a century or more thereafter printers would follow a very conservative strategy, concentrating on publishing editions of the books most familiar from the medieval manuscript tradition. But in the sixteenth century they would also begin to open up new markets -- and one of these was a market for news. News fitted ideally into the expanding market for cheap print, and it swiftly became an important commodity. This burgeoning wave of news reporting was of an entirely different order. It took its tone from the new genre of pamphlets that had preceded it: the passionate advocacy that had accompanied the Reformation. ... News also became, for the first time, part of the entertainment industry. What could be more entertaining than the tale of some catastrophe in a far-off place, or a grisly murder?

"Naturally the elites sought to control this new commercial market, to ensure that the messages delivered by these news books would show them in a good light. Printers who wanted their shops to remain open were careful to report only the local prince's victories and triumphs, not the battlefield reverses that undermined his reputation and authority. Those printers who co-operated willingly could rely on help in securing access to the right texts. ... From remarkably early in the age of the first printed books Europe's rulers invested considerable effort in putting their point of view, and explaining their policies, to their citizens.  ...

"The divisions within Europe brought about by the Reformation were a further complicating factor: the news vendors of Protestant and Catholic nations would increasingly reproduce only news that came from their side of the confessional divide. News therefore took on an increasingly sectarian character. All this led to distortions tending to obscure the true course of events. ... The purveyors of the news pamphlets had a clear incentive to make these accounts as lively as possible. This raised real questions as to their reliability. How could a news report possibly be trusted if the author exaggerated to increase its commercial appeal?

Title page of Carolus' Relation from 1609, the earliest newspaper, which was begun in 1605

"The emergence of the newspaper in the early seventeenth century represents an attempt to square this circle. As the apparatus of government grew in Europe's new nation states, the number of those who needed to keep abreast of the news also increased exponentially. In 1605 one enterprising German stationer thought he could meet this demand by mechanising his existing manuscript newsletter service. This was the birth of the newspaper: but its style -- the sober, detached recitation of news reports inherited from the manuscript newsletter -- had little in common with that of the more engaged and discursive news pamphlets.

"The newspaper, as it turned out, would have a difficult birth. Although it spread quickly, with newspapers founded in over twenty German towns in the next thirty years, other parts of Europe proved more resistant -- Italy for instance was late to adopt this form of news publication. Many of the first newspapers struggled to make money, and swiftly closed.

"The trouble with the newspapers was that they were not very enjoyable. ... The desiccated sequence of bare, undecorated facts made them difficult to follow -- sometimes, plainly baffling. ...

"News pamphlets offered a very different presentation of news, and one far better adapted to contemporary narrative conventions. Pamphlets concentrated on the most exciting events, battles, crimes and sensations; and they were generally published at the close of the events they described. They had a beginning, a middle and an end. Most of all, news pamphlets attempted an explanation of causes and consequences. By and large, this being a religious age, news pamphlets of this sort also drew a moral: that the king was mighty; that malefactors got their just deserts; that the unfortunate victims of natural catastrophe were being punished for their sins.

"The news reporting of the [first] newspapers was very different, and utterly unfamiliar to those who had not previously been subscribers to the manuscript service. Each report was no more than a couple of sentences long. It offered no explanation, comment or commentary. Unlike a news pamphlet the reader did not know where this fitted in the narrative -- or even whether what was reported would turn out to be important. This made for a very particular and quite demanding sort of news. The format offered inexperienced readers very little help. ...

"So it was by no means easy to persuade the inhabitants of seventeenth-century Europe that the purchase of news publications should be a regular commitment. It is not difficult to see why newspapers were so slow to catch on. Consumers had to be taught to want a regular fix of news, and they had to acquire the tools to understand it. This took time; the circle of those with an understanding of the world outside their own town or village expanded only slowly. For all of these reasons it would be well over a hundred years from the foundation of the first newspaper before it became an everyday part of life -- and only at the end of the eighteenth century would the newspaper become a major agent of opinion-forming."

The Invention of News: How the World Came to Know About Itself

Author: Andrew Pettegree 

Publisher: Yale University Press

Copyright 2014 Andrew Pe