Book Review - 1177 B.C. The Year Civilization Collapsed

Book Review - 1177 B.C. The Year Civilization Collapsed

By Eric H. Cline

For the civilizations of the eastern Mediterranean, the late bronze age was a period of great prosperity. The Egyptians, the Minoans, the Hittites, the Babylonians and many other kingdoms flourished during this time. Their economies were based on extensive trade networks with their neighbors as well as far off lands, and they erected splendid palaces from which they governed their burgeoning realms. Conflicts flared up from time to time, but disputes could often be solved with diplomacy, and many diplomatic treaties of a sort that we would recognize today were signed during this time. By learning how to forge bronze, a new and miraculous super alloy, they could field standing armies equipped with powerful weapons as well as tools for construction and agriculture. Yet, for all their sophistication and splendor, these civilizations all went extinct, or were at least greatly reduced in stature, following tumultuous events that took place around the year 1177 B.C. Eric Cline, professor of classics and anthropology at George Washington University, draws on his deep knowledge of the era, as well as recent archeological evidence, in an attempt to sift through the ashes and explain what lay behind this calamity.

The dominant regional power during this time was Egypt, which during the 16^th to 11^th centuries B.C. enjoyed great wealth and power. It was they who most forcefully battled the sea peoples, a marauding and migrating group of individuals of unknown origin who swept through the eastern Mediterranean during this time. Historically they have been blamed for toppling the late Bronze Age civilizations, but according to Mr. Cline the blame cannot be placed squarely on their shoulders. It might even be the case that they simply moved into abandoned settlements after the original inhabitants were ravaged by some other, untold, calamity. What we know, or at least what we know with reasonable certainty, is that the sea peoples invaded Egypt in 1178 B.C., and that Pharaoh Rameses III led his armies to defeat the invaders in a brutal and hard-fought campaign. Egypt began a period of decline during Rameses’s reign, his martial successes notwithstanding. Technological sophistication and the bountiful harvests provided by the annual inundations of the river Nile could not stave off the deleterious effects of a collapsing trade network and mounting unrest in the region. One other potential victim of the sea peoples was the ancient city of Troy, made famous by Homer’s magnum opus, The Iliad.

In trying to explain what lay behind the collapse of 1177 B.C., Mr. Cline turns to the concept of complexity theory, which in essence means that an outcome can brought about by a combination of many different factors. Just like our modern stock market is affected by many events of seemingly trifle significance, so the interconnected civilizations of the late Bronze Age were all, to some extent, dependent upon each other. There is evidence showing that armed conflict, famine, uprisings, climate change and earthquakes happened in or around this region during this time. It is possible that a combination of these factors could have brought about enough turmoil and instability to cause the late Bronze Age civilizations to collapse. After all, a civilization could probably recover from the odd earthquake or band of marauders, but if enough of these adverse events happen in close succession to one another, the impact of each individual event increases in severity. This could quite possibly spark an existential crisis from which there is no coming back. No definitive answer is provided, and to be fair to Mr. Cline it is quite impossible to give one, but complexity theory gives a very plausible explanation for how this collapse of civilizations might have come to pass.  

When reading 1177, one cannot help but wonder how stable our twenty-first century society really is. Just like the civilizations of the late Bronze Age we are part of an interconnected global system of commerce and diplomacy. We may not be dependent on foreign shipments of copper and tin to make bronze, but we certainly rely on oil and natural gas to keep our economies going. When it comes to potential harbingers of collapse such as war, famine, climate change and rebellion, we sure seem to tick a lot of those boxes as well. If it’s any consolation to worried readers, the great systemic collapse of the late Bronze Age wasn’t entirely bad news. Like a forest fire clearing away dead trees to make way for new growth, the fall of the late Bronze Age civilizations paved the way for the subsequent Greek and Roman empires to flourish. Scant consolation perhaps, but it’s all I can offer.

As the late Gore Vidal once remarked, a novelist may assign a motive to the actions of historical characters, where a historian may not. Mr. Cline is a most dutiful historian in this regard, offering several plausible explanations for what brought about the collapse of the late Bronze Age Civilizations. The target segment of 1177 seems to primarily be those who are historians or archeologists, or the layman with a keen interest in the time period. Sometimes I wish that he would focus on the grander narrative instead of going on a lengthy explanation of a comb found in soil sample 7A next to a middle eastern dirt road, but a sweeping narrative is naturally the domain of historical fiction and not a respectable professor of classics and anthropology. Considering the limited archeological evidence on offer, it is impressive that he is able to tell such a dramatic story of conflict and international intrigue, the occasional mentioning of soil samples and sub-stratas notwithstanding. All in all, I enjoyed reading 1177 B.C due to the fascinating glimpses it offered into a bygone age and the educated speculation as to how such a calamity could have come to pass.    

  

 

Book Review: Think Like a Freak

By Steven D. Levitt and Stephen J. Dubner

In our day and age it’s fair to say that we are faced with many serious problems, most of them fiendishly difficult to solve. How can we safely create nuclear fusion? How can we predict earthquakes far enough ahead of time to evacuate vulnerable towns and cities? How do you squeeze the last bit of toothpaste out of the tube?

In Think Like a Freak, Steven Levitt, an economist from the University of Chicago and Stephen Dubner, a prominent national journalist and author, we learn how to adopt a mindset that enables us to approach difficult problems in an unconventional manner.

Most easy problems, Messrs. Levitt and Dubner explain, are not that hard to solve with fairly conventional thinking. Indeed, there is a reason that conventional thinking is…well…conventional. In most cases that’s precisely what you need. It’s the really difficult problems that requires novel approaches in order to solve them. The first step one must go through in order to move past conventional thinking, the authors argue, is to utter the three hardest words in the English language: “I don’t know”. Children can do this without too much difficulty, but as they grow older they discover that in our society it is generally better to pretend that you have the answer and then be proved wrong at a later date than admit that you don’t have a clue about something. The authors offer a simple example of this. If an analyst makes a prediction that the stock market will triple in twelve months, and this prediction turns out to be true, a hugely lucrative job at Goldman Sachs or McKinsey awaits you. If you turn out to be completely wrong, odds are that people will quickly forget you even made the prediction in the first place.

The second, and much harder step, is to temporarily let go of your moral compass. This needs to be done because otherwise you might be convinced that the answers to a given problem are obvious, and you will be unable to approach the problem objectively. Having admitted your ignorance and let go of morality the third step is to gain valuable feedback. All great discoveries have been preceded by dismal failures, it is only by failing and learning from those mistakes that we can finally succeed. However, to fully learn from failure one must first be aware of how little they know, and be free from every form of prejudice and preconceived notion.  

One compelling and potentially lucrative reason to read Think Like a Freak is that it can launch you into a new career as a competitive hot dog eater. In 2000, a young Japanese man named Takeru Kobayashi was struggling to pay rent and needed to supplement his meagre income. He decided to enroll in a hot dog eating competition on Coney Island, where first prize netted you five thousand dollars. Kobayashi was a man of slight stature, with no previous history of gluttony. The chances of him breaking the previous hot dog eating record, which stood at 25 and one eight hot dog eaten in only twelve minutes, seemed slim at best. However, Kobayashi reckoned that if his personal childhood hero, the great sumo champion Chiyonofuji “the Wolf” compensated for his light weight with superior technique, he could do the same. For months Kobayashi devoted himself to the art of competitive eating, taping his training sessions with a video camera, while eating hot dogs made from minced fish since he couldn’t find the regular version in Japan. Kobayashi won that year’s tournament in a landslide, eating a record fifty hot dogs in twelve minutes, and he proceeded to win the competition for four years in a row. How was this possible? Most competitive eaters, burly frat bros who looked like they could wolf down Kobayashi himself in one sitting, all ate their hot dogs using the same technique. The rammed the hot dog into their mouth, chewed furiously and swallowed it down with a gulp of water. Kobayashi’s brilliance was due to the fact that he approached the whole ordeal in a different way. Kobayashi broke the hot dogs, both sausage and bun, in half, then let the hot dogs slide down his throat before dunking the buns in water to make them easier to swallow. Seems simple enough, but before Kobayashi came along, none of the competitive eaters had dared admit to themselves that perhaps they didn’t know the best way to eat hot dogs quickly, and none had dropped their preconceived notions as to how this was best accomplished.   

Think Like a Freak is a fascinating read, Messrs. Levitt and Dubner offers a fresh perspective on how one might break from established norms and solve problems by going off the beaten path. I’m reminded of Peter Senge’s management classic The Fifth Discipline, where he teaches the importance of understanding how mental models guide the behaviors of different actors. Often when confronted by a problem that is difficult to solve, we tend to go down the path of least resistance and apply conventional thinking to solve it, but in some situations that may not be enough. Those who aren’t afraid to embrace their inner freak may hatch a dozen mad schemes that never pan out, but occasionally they will come up with an idea that is utterly brilliant and ground breaking. After all, if the likes of Leonardo da Vinci, Nicola Tesla and the Wright brothers had been afraid of unconventional thinking, we might have had to do without many of the inventions that we take for granted.

Book Review: Our Revolution

By Bernie Sanders

Before the Democratic primary for the 2016 presidential election had even begun, former Secretary of State Hillary Clinton was widely considered to be the anointed nominee of the party. Secretary Clinton had laboriously amassed a formidable political machine and went on to receive the endorsements of almost every democratic lawmaker of note. Taking on the most powerful political machine in the country was probably a frightening prospect for many, but not for Bernie Sanders, the independent senator from Vermont who caucuses with the Democrats.  On April 30^th 2015, he announced he was running for president, standing behind a wobbly podium hastily erected on the lawn in front of the capitol. “Let me just make a brief comment, be happy to take a few questions, we don’t have an endless amount of time, I’ve gotta get back” He declared matter-of-factly to the assembled press, jerking his thumb towards the capitol before launching into a brief description of the policies his campaign would be supporting. Late-night talk show comedians later joked that Sanders distaste of conventional politics was so great he didn’t even take the time to comb his hair before launching the campaign, but what he lacked in polish he more than made up for with a detailed policy prescription for fixing the country’s problems.    

In Our Revolution, Sanders tells the tale of how his run for president, dismissed as a “fringe campaign” by pundits in Washington, won eighteen million votes as well as eighteen states before being narrowly defeated by Secretary Clinton. The latter half of the book briefly touches upon the wrangling ahead of the convention that resulted in a reasonably progressive Democratic Party platform, before Sanders lays out his policy agenda in detail with the help of charts and graphs.

For those interested in a detailed account of the history of the Democratic Party, I would recommend reading Thomas Frank’s excellent Listen, Liberal, previously reviewed on this blog. In order to understand the magnitude of Bernie Sander’s success on the campaign trail, one needs to be aware of the rightwards shift of the democratic party for the last forty years or so. Far from being an extreme left-winger, Bernie Sanders political views largely reflects what mainstream democrats used to stand for before the Bill Clinton era of triangulation and neoliberalism. Popular policy positions supported by Bernie Sanders, like expanding Medicare and Social Security, making public colleges tuition-free and switching to a single payer healthcare system as well as strong support for organized labor used to be mainstream positions inside the Democratic Party before the age of Bill Clinton. Bernie Sanders, dismissed as a leftie without a comb by many conservative democrats, was unfashionable enough to stand up for what he believed in and lean against the wind during a time when many democrats abandoned the party’s principles as laid down by Franklin D. Roosevelt and his New Deal. As in fashion as in politics, it turned out, as growing unrest and inequality meant that his message came to resonate with a great many voters, including independents and republicans, during the 2016 election.  

Barack Obama’s successful 2008 presidential campaign harnessed the potential of social media and the online community to solicit donations and turn out voters. During the 2016 election cycle, the Sanders campaign was largely ignored by the press, and was forced to go online in order to gain traction and get their message out. The mainstream media didn’t spend that much time talking about policy substance, instead they choose the focus on the horse-race aspect of the campaign and the contentious republican field. When Bernie Sander’s campaign managed to amass an incredible war chest, financed entirely by small donations by ordinary people instead of billionaires and large corporations, the media was grudgingly forced to cover the campaign.

It is painful to think back on how poorly and unfairly the Sanders Campaign was treated by the media. In Our Revolution, Sanders recalls sitting sown for an hour-long interview with a major newspaper and laying out his policy in great detail, before being asked to comment on something Secretary Clinton had said. The next day that was the headline and all talk of policy substance was forgotten. This was often the case when Sanders appeared on television, he often had to answer questions about the statements of Hillary Clinton and other candidates and was seldom asked about policy or anything even remotely concerned with the lives of ordinary Americans.

Having followed the Sanders campaign with great interest, I’m already familiar with the policy positions he lays out in Our Revolution, most of them are well thought out and reasonable. I would, however, object to his insistence on a 15 dollar an hour minimum wage. The cost of living varies greatly depending on in which state of the country you live. Surely it would be better to calculate what is a living wage in each state and then index that sum to inflation? In rural Montana, for example, a living wage might be ten dollars an hour, among the glittering skyscrapers of New York it might be twenty-five. His support for a single payer Medicare-for-all healthcare system is especially relevant today. As I write this review, republican congressmen and senators have had to face hostile crowds at several town halls, their constituents worried about what’s going to happen with their healthcare now that the GOP has promised to repeal the Affordable Care Act without specifying what it will be replaced with.

Reading Our Revolution brings back all the excitement of the 2016 Presidential Campaign. It’s undeniably sad when you look at Bernie’s spirited campaign and think about what might have been, but ultimately Bernie Sanders has managed to awaken a great many young people from the millennial generation who were previously unengaged with the political process, and turn them into citizens taking an active part in their democracy. It’s hard for a presidential campaign to get higher praise then that. Elections come and go, but democracy requires constant participation at the state and local level.

Book Review: The Pursuit of Power, Europe 1815-1914

By Richard J. Evans

The Penguin History of Europe series attempts to chart the history of the continent that is perched on the western end of the Eurasian landmass from antiquity to the present day. The Pursuit of Power deals with the century or so from the end of the Napoleonic Wars to the start of the First World War, when the empires of European nations dominated the world and the lives of ordinary people were irrevocably altered by numerous technological and scientific innovations. Richard Evans is a Cambridge historian who has spent many decades studying and thinking about nineteenth century Europe, this book represents the culmination of his academic life, and is not just a very interesting read in itself, but serves as an ideal springboard for those interested in studying a wide variety of topics related to this era.   

The twenty-or-so year period during which the Napoleonic Wars took place spelled disaster for people of Europe. Unlike in the First World War, the fighting took a heavy toll on civilians and devastated entire communities. During the Congress of Vienna, in 1814, the victorious powers of Austria, Prussia, Russia and Great Britain created a framework for how Europe might avoid similar conflicts in the future. Their purpose was also to quell the revolutionary fires that the French revolution of 1789 had lit. Austrian statesman Clemens von Metternich was to be the chief architect of this supposed return to the conservative order. In France, the monarchy was reinstated in the shape of the portly Louis XVIII, and Tsar Alexander I continued to rule over Russia by divine right. In Evans’s word, they were “reforging the chain of time”. Yet this chain turned out to be a whole lot less durable that von Metternich had hoped. The nineteenth century was fraught with upheaval, truly it was the age of the -isms, as such diverse ideologies as fascism, liberalism, socialism, communism, utopianism, feminism and anarchism confidently entered the political stage. A new liberal bourgeoisie spoke up loudly for human rights from their prosperous suburbs, while countless workers in Europe’s teeming industrial centers turned to socialism and social democracy to ward of the excesses of capitalism. The success or failure of their uprisings depended on the support of a mostly conservative rural peasantry. The nobility and the church, who had been important power players during previous centuries, lost most of their power and privileges, while popular pressure ensured that many of the ideals of the French revolution were far from dead and buried. During the nineteenth and early twentieth century the institution of serfdom was abolished, voting rights expanded to include most of the male population and many laws were passed to protect common people from hazardous factories and unscrupulous profiteers.

Even a conservative bastion like Russia failed to fully ward off these clamors for reform, and in 1861 Tsar Alexander II emancipated the millions of serfs who had tilled the Russian soil since the time of Alexander Nevsky. The Austrian empire was unable to stay united and had to bow to vocal minorities in its diverse realms, granting concessions to Serbs and Croats and eventually allowing Hungary semi-autonomy and its own legislative body. The nation that changed least during this time, and as a consequence was the undisputed loser of nineteenth century Europe was the Ottoman Empire. Otto von Bismarck dubbed this harried patchwork of disparate realms, with characteristically caustic wit, as “the sick man of Europe”.

In 1815 everyday life for most Europeans was not that different from the way it had been in previous centuries. People travelled by horse and carriage, like they had done since the Dark Ages and peasants tilled the soil with ox and plough. In towns and cities refuse was thrown out of your window and landed on unfortunate passersby and any operation, no matter how trivial, was likely to end in infection and death. One hundred years later the onward march of science and technology had fundamentally changed all these previously immutable aspects of life and countless more, unless you lived in some remote rural hamlet that was exceptionally backwards, or the Ottoman Empire. Thanks to railroads that soon crisscrossed Europe like great serpents of iron, distances were greatly reduced and the bulk transportation of goods and people was now possible. Agricultural innovations meant that farmers could greatly increase their productivity, which was just as well since many of their farmhands were carving themselves a pair of wooden clogs so they could leave for the city. These cities had up until then been stinking collections of hovels, unhealthy breeding grounds for all kinds of nasty diseases. The more humans that gathered in one place, the worse it got in terms of squalor and uncleanliness. During the summer of 1858, the river Thames was overflowing with industrial waste and rotting refuse, not to mention the odd human corpse that had swelled in the summer heat to become a grotesque vessel of noxious gasses. Conditions were so bad that Londoners dubbed this assault on their olfactory senses “The Great Stink”, and tasked the visionary engineer Joseph Bazalgette with building a comprehensive sewer network for the entire city. This helped make cholera epidemics a thing of the past, and other European cities were quick to follow. Such improvements in public health may seem less interesting and noteworthy than pitched battles fought by hundreds of thousands of soldiers to the roar of cannon and shot, but they had an immeasurably more positive impact on ordinary people’s lives. Medicine also changed rapidly during the nineteenth century, with improved hygiene greatly increasing chances of survival after surgical operations and new methods of dulling the pain of going under the knife, such as letting the patient imbibe chloroform or morphine.  

The nineteenth century also saw Europe becoming industrialized. Britain led this revolution in manufacturing, but other nations, most notably Germany, gave them a run for their money. Production of goods was now possible on a grand scale, and the number of laborers required to work in the new factories that sprang up in many European cities led to the rise of several of the -isms that I mentioned earlier. Europe was the first continent to embrace the industrial revolution, which gave them a crucial advantage against other nations, and these technological breakthroughs enabled European nations to impose their will on other, less developed regions, by establishing colonies all over the world. The undisputed master, both in terms of industry and colonial possessions, was Great Britain, on whose empire the sun reportedly never set. Britain’s dominion over this blue planet of ours was so complete that the Reign of Queen Victoria (1837-1901) was later known as the Victorian era. For all its imperial pomp and splendor however, Britain’s supremacy was about to be challenged. After having been the dominant continental power in Western Europe for many centuries, the unification of Germany, culminating in the formation of the German Empire in 1871, saw France reluctantly resigning itself to being number two on the continent. Jealous of the other “Great Powers” Germany also wanted its place in the sun, i.e. colonies in Africa, and started to expand its navy, a direct challenge to Britain. During the latter half of the nineteenth century, German industry, particularly in the fields of chemistry and electronics, led the world. Together with another rising empire of the same era, namely that of Japan, Germany was to accelerate the decline and eventually sound the death knell of Romanov rule in Russia. After having been humbled by the Japanese in the Russo Japanese war of 1905, Germany finished off the ailing colossus in the First World War.

Evans describes how a more cautious and measured generation of statesmen who remembered the horrors of the Napoleonic Wars were replaced with new blood towards the end of the nineteenth century, brash imperialists who had imbibed readily from the Kool-Aid of their own propaganda. As breakneck industrialization progressed and the Great Powers acquired more colonial possessions, they signed and countersigned a great many diplomatic treaties which soon meant that Europe was covered in a patchwork of alliances. Coupled with rising nationalism and xenophobia, the continent turned into a tinderbox waiting to go off. Worse still, shrewd statesmen like Otto von Bismarck were no longer around to restrain the more violent impulses of unsuitable autocrats like Kaiser Wilhelm II of Germany or Tsar Nicholas II of Russia. The First World War was surely one of the greatest tragedies to ever befall humanity. That devastating conflict, together with another world war a generation later, spelled the end of Europe’s global hegemony.

The Pursuit of Power tells the tale of a century where Europe progressed by leaps and bounds, and took the undisputed center stage in world affairs. Sometimes it tells too much, such as when the exact length of Austria’s railway network in 1855 is compared to that of France, but the reader gets the point that European countries progressed greatly in every conceivable metric during this time, except the Ottoman Empire. If you don’t want to read every chapter of the book I understand that, since it is exceptionally lengthy, but I would highly recommend The Pursuit of Power and feel that my own knowledge of this pivotal time for Europe has been greatly increased.                        

Book Review: Failed, what the ”experts” got wrong about the global economy

By Mark Weisbrot

The world economy is, by any measure, resting on shaky foundations. With the Eurozone and Britain facing a lost decade and the US in the middle of a recovery that only seems to affect the stock markets, you would have to look at China and other countries in the developing world to see any meaningful growth. Conventional wisdom, peddled by the likes of the International Monetary Fund (IMF), The World Bank and the World Trade organization (WTO), has it that governments need to start tightening their belts and live within their means, Budget deficits has to be brought under control, inflation kept stable and markets have to be opened up to international trade. This is to be achieved by adopting neoliberal agenda of tax cuts, deregulation and privatization of public utilities. For the countries that do all this, growth will come, eventually. At least that is what they are told. In Failed, Mark Weisbrot, Co-director for the Center of Economic and Policy research in Washington D.C, questions the core principles of this policy approach and show the countries that have enjoyed solid growth during the last decades are those that have done the exact opposite.

The preface to Failed brilliantly sets the tone for what is to follow. A prominent South Korean economist from Cambridge University explains that his country started out in the 1960s as a poor and rural backwater, yet has now managed to achieve living standards comparable to those in the West. If South Korea had followed the recipe I describe in the previous paragraph, his people would still be living in mud huts. South Korean prosperity was not created by austerity or opening the country to free trade and volatile capital flows. Instead the government invested in their own production base and infrastructure, erecting trade barriers to promote domestic industries capable of developing new technology and providing highly skilled jobs. Without this there wouldn’t have been any Samsung or Hyundai. He even goes so far as to call the IMF, the World Bank and the WTO “the unholy trinity”.

The chapters that follow takes a closer look at some of the most glaring economic policy failures of recent years and seeks to cure what the author refers to as amnesia within in the field of economic study, where the hard-earned wisdom of past scholars has been replaced by a rigid neoliberal doctrine and a Washington consensus. A great portion of the book is dedicated to South America’s economic development during the last fifty or so years. The lessons learned by that region serves as an excellent summary of the central message in Failed, and charts a blueprint for a way forward for troubled countries in Europe and beyond.

During 1960-1980, Per Capita GDP in Latino America grew by a healthy 3,3%, and poverty rates declined. During the following 20-year period, 1980-2000, Per Capita GDP grew by a paltry 0,4%, while poverty rates increased slightly. What was the cause behind the two lost decades? According to Weisbrot, America has long exerted its influence in the region to suppress or remove governments it doesn’t like, and make sure that their own interests are well cared for. The US has long viewed left wing governments in Latin America with barely disguised hostility, on occasion going so far as to overthrow them in a coup, like Richard Nixon did in 1973 when the Chilean military with the aid of the CIA overthrew Chile’s socialist president, Salvador Allende. He was succeeded by Augusto Pinochet, an authoritarian dictator amenable to Western interests. According to Weisbrot, quiescent leaders peddling neoliberal politics and paying fealty to the IMF were the main causes for the lost decades between 1980 and 2000.

When the Latin American people had finally had enough by the turn of the millennium and decided to change things, their situation improved markedly. During the last twenty or so years several left leaning governments have been elected in landslide victories across the region, with the effect of poverty rates and inequality being reduced. When Lula da Silva ran as the Workers Party candidate for president in the 2002 Brazilian election, he campaigned against neoliberalism and a US backed free trade deal, the Free Trade Area of the Americas. The American investment bank Goldman Sachs were so afraid of the former factory worker that they developed a special “Lulameter” where they calculated his chances of winning the election in real-time. Lula proceeded to win the election and form a progressive government that heralded a sharp break with the neoliberal policies of the past and provided solid economic growth for Brazil after decades of stagnation. This story was repeated in several Latin American countries during the 2000s, to the barely disguised dismay of many western countries and institutions. This I can attest to personally. The Economist magazine, which I read every week, seems to have an almost pathological aversion to any government in Latin America which is even remotely left of center, while they savor Venezuela’s current woes with barely contained glee. Its editorials lambast reckless spending and excessive government debt, in effect proposing the same failed remedies that led to the lost decades of 1980-2000.

It is startling, writes Weisbrot, when you consider that the positive economic development Latin America saw during last two decades or so have either gone completely unreported in the West or been dismissed as a “commodities boom”. What’s especially painful to adherents of the Washington consensus, according to Weisbrot, is that Latin America managed to recover by kicking the IMF to the curb, which has led to their influence being drastically reduced and the region becoming more independent. This standoff between the Latin American nations and foreign creditors was apparent when then president of Argentina, Néstor Kirchner, purposefully defaulted on the country’s sovereign debt. Argentina’s citizens enjoyed one of the highest living standards in Latin America, until the country was struck by an exceptionally nasty recension during the years 1998-2002. Those who looked to the IMF for help were soon disappointed, all the organization had to offer were stringent demands for paying down the country’s national debt. This was a blatant attempt to get a better deal for its creditors, at a time when Argentina was engulfed in crisis. Refusing the IMF’s draconian demands, Kirchner made the bold move of defaulting on the debt, something that only “failed” nations like Congo and Somalia had done before. The experts predicted a calamity, but the IMF folded and Argentina went on to make an exceptionally strong recovery that the editorial staff of The Economist refuses to acknowledge to this day.

It is with great sadness that Weisbrot notes Europe has been unable to what most of Latin America did and send the IMF packing. The recession that was sparked by the financial crisis in the US could have been much less severe if European institutions had acted decisively to stimulate the economy and create more aggregate demand. Greece might have needed a bit of structural reform, he admits, but the kind of abject misery that the country has been subjected to by the unelected troika of the IMF, the European Commission and the European Central Bank was completely unnecessary. The Eurozone crisis unmasks the IMF, according to Weisbrot, as little more than a creditors cartel attempting to strong-arm its hapless debtors into ever more concessions. Worst of all, so called Article IV consultations, internal documents by the IMF, reveal that the fund and the rest of the troika used the Eurozone crisis to force policy changes on the affected nations that their electorates would probably never have voted for had they been on the ballot. These unwelcome initiatives included reducing labor protection and lowering the pension age. What’s unique when it comes to Europe’s woes, Weisbrot writes, is that this kind of financial shock treatment used to be reserved for poor and middle income countries, and had never previously been used against wealthy nations with high standards of living. As a European I read his chapter on Europe with resignation, our continent is no doubt in great financial and political trouble, and the outlook for the EU and its member states mostly seem to get worse each day. Around the world, Europe has become a byword for stagnation and failed policies. It is staggering, Weisbrot asserts, that policymakers, economists and the general public have not thoroughly investigated the causes of the Eurozone crisis and come up with anything else than austerity, a cure that seems to have been as effective as a medieval doctor using leeches to bleed his patient. Just one more concession, one more cut to public services, and a recovery will be around the corner, we keep hearing, yet the situation keeps getting worse and worse. 

Failed offers a fresh perspective on the economic woes that plague Europe and many other parts of the developed world, and points to tried and tested policies that could offer a way out of stagnation and lackluster growth.    

Book Review: The Romanovs 1613-1918

By Simon Sebag Montefiore

From cosmopolitan Saint Petersburg on the banks of the Neva to far off Vladivostok by the Japanese sea, Russia is a continent sized country that remains mysterious and inscrutable to most westerners. It stretches from Europe to the far east, a meeting point between east and west that has developed its own culture and is part of neither. For more than three hundred years Russia was ruled by a succession of tsars and tsarinas from the house of Romanov. In his latest book, historian Simon Sebag Montefiore tells the tale of this dynasty from its first tsar, Michael, to the revolution in 1917 that toppled the regime of tsar Nicholas II.

To most people, Montefiore asserts in the introduction, the reign of the Romanovs probably conjures up images of the 1917 revolution, of failure, backwardness and brutality. All this is true, in one guise or another. But the saga of the house of Romanov is also one of success, of vast territorial expansion, of great military victories and the taming of an ancient and savage land. There were arguably many failed tsars and tsarinas, but there was also Peter the Great and Catherine the great, Alexander I who doggedly fought his way to Paris in 1814 and Alexander II who freed the serfs and nearly conquered Constantinople. Although Russia under the Romanovs wasn’t industrialized or modernized to the full extent that Western European nations were, the country changed irrevocably during three centuries of Romanov reign. The autocracy that Bolshevik revolutionaries toppled in 1917 was a hybrid mix of ancient customs and sleepy gubernias as well as rapid economic growth in fledgling industries supported by western expertize. Reading The Romanovs paints a picture of a reactionary monarchy adopting to modernity at a leisurely pace, either by sheer necessity or because of a fascination with the west.

The fist Romanov tsar, Michael, governed a country significantly smaller than today’s Russia, that was steeped in orthodox traditions. His noblemen, or boyars, wore long beards and flowing robes while their women were forced to wear a veil in public and live in specially appointed quarters of the house, not mixing with the menfolk. Moscow was called the new Jerusalem, and from this hallowed city the tsar wasn’t simply governing an offshoot of the true church but acting as a protector of orthodox Christianity. Like so often in its history, however, Russia was assailed by enemies from without who had access to more modern weapons and technology. Defeating the well drilled armies of Sweden and Poland was not possible at the time, so Michael opted for a peace treaty, which gave him time to focus on rebuilding his realm after many years of strife. Russia grew in influence under Michael and his son Alexis, but wasn’t respected by its neighbors as a great European power.

That changed when Peter the Great ascended to the throne in the 1680s.  Described by Montefiore as a “hyperactive despot”, Peter was determined to modernize Russia and make sure his country was afforded the respect it deserved. An eccentric, larger than life character, Peter’s court contained more debauchery than all Game of Thrones episodes combined. Carriages transporting guests to lavish parties were drawn by bears and army of dwarves was made to wear ridiculous costumes while amusing the court with a song and dance routine. The partying was so intense that some of Peter’s closest advisors later died from liver failure. Alchoholism, as Montefiore asserts, seems to be very much a Russian national pastime. During the Great Northern war of 1700-1721, Russia asserted its supremacy at the cost of the declining Swedish Empire and the harried Polish-Lithuanian Commonwealth. At long last Russia was no longer regarded by the European nations as a backward rural cousin. Even if he succeeded in raising Russia’s prestige on the international stage, Peter failed to achieve domestic harmony, and had long been distrustful of his eldest son’s deeply held orthodox conservatism. When he suspected his heir was hatching a plot to overthrow him, he was arrested and tortured, before he died in captivity shortly thereafter.    

The next significant stage of Russian expansion came under the reign of Catherine II, who ascended to the throne roughly forty years after Peter’s death. When the young Prussian princess Sophie Friederike Auguste von Anhalt-Zerbst-Dornburg came to Russia to marry the future tsar Peter III, she sensibly changed her name to the shorter and more Russian sounding Catherine, and set about learning the language that her new countrymen spoke. Most Romanov marriages weren’t particularly happy or amicable, as Montefiore notes, and the union between Catherine and Peter was no exception. Her husband was an ardent Prussophile, who opposed the war that Russia was waging against Frederick II. Even though the Russians had the upper hand by the time he became tsar, he immediately sued for peace with his childhood hero. Frederick, who couldn’t believe his good fortune, naturally accepted the suggestion of an alliance between Prussia and Russsia. On the homefront, Peter was a reasonably well liked and capable ruler, who instigated some needed reforms. Nevertheless, he was ousted by a military coup d’etat led by Catherine less than a year into his reign. Clad in military uniform, Catherine led the guards regiment to overthrow her husband and seize power. Her reign is widely regarded by historians as a high point for imperial Russia. Her armies conquered Poland, Ukraine and the Crimean Peninsula, while Catherine herself reigned as an enlightened monarch, inspired by the ideals of continental radicals like Voltaire.  She recognized serfdom as an unnecessary evil, yet she never went so far as to actually free her peasants from their feudal yoke. In order for Catherine to rule with vim and push, she had to be constantly in love, and took a string of paramours during her reign. The most notable being the dashing and highly intelligent cavalry officer Grigory Potemkin, whom she later named viceroy of Novorossiya, modern day Ukraine.

When Catherine was succeeded by her son Paul, possibly an even bigger Prussohpile than his father, storm clouds gathered over Europe. It was a time of revolution, and the tentative start of the age of industry. A moral conservative who probably wished he had been born a German instead, Montefiore notes that Petersburg under Paul started to look like a German hamlet from the seventeenth century instead of the fashion forward modern city it had been during Catherine’s reign. The consummate armchair general, Paul knew what was best for the Russian military despite not knowing anything about the military. Wearing an elaborate uniform, he took part in daily military parades where he publicly humiliated and admonished the nobles who displeased him. Needless to say, Paul was murdered in a coup d’état a few years later and his son, Alexander, succeeded him. 

Mysterious and underrated by history, the first half of Alexander’s reign came to be dominated by a Corsican artillery officer whose lightning rise had made him the master of Europe, Napoleon Bonaparte. As Napoleon’s Grande Armée tore through Europe, Alexander took part in a series of coalitions with the other great powers of Europe, Austria, Prussia and Great Britain, to thwart the burgeoning French empire. Initially, these efforts were somewhat of a failure as Alexander, eager for glory, ignored the advice of his one-eyed but redoubtable commander, Mikhail Kutuzov. Instead of retreating before the French advance, Alexander was determined to defeat Napoleon’s army. The ensuing battle of Austerlitz, that took place in December 1805, was Napoleon’s greatest triumph, outnumbered and outgunned, he managed to defeat the combined armies of Austria and Russia. After defeating Prussia in detail and inflicting another crushing defeat on Russia during the battle of Friedland in 1807, Napoleon was the master of Europe. The only thing that could bring him down by this stage was an invasion of Russia and a subsequent march on Moscow. This looked unlikely, but as Leonid Tolstoy observed in War and Peace, a scorpion has to sting. Angered by Alexander refusing to take part in his blockade of British trade, Bonaparte invaded Russia in 1812. At first things went well enough for the Grande Armée, but when fall turn to winter, the tables were turned on the French. After enduring the humiliation of abandoning Moscow and watching Napoleon burn the capital, subzero temperatures handily saw off the Grande Armée. Two years later Alexander rode into Paris at the head of his army and doffed his bicorne hat at blushing French ladies.  His quiet but dogged determination had helped him steer Russia through a dire national crisis and snatch victory from the jaws of defeat.

Alexander’s reign represents the final successful chapter of Romanov saga. According to Montefiore, it was all downhill from that point. Popular unrest grew steadily as the Russian people demanded liberty and relief from harsh working conditions. Occasionally they got some reforms, but even the attempts of Alexander II to bring liberal Western values to Russia failed. Although he freed the serfs from their ancient bonds of servitude, this was too little too late. And it wasn’t just their social policies that were antiquated.  When it came to technology and industry, Russia was pretty much on the back foot throughout the nineteenth century. Nicholas I was jolted out of his lifelong obsession with military parades and gaudy uniforms when Russian armies were soundly thrashed by the French and British during the Crimean war. Heartbroken that his military was hopelessly obsolete and his life’s work had all been for nothing, he fell ill and died before Russia was forced to sue for a humiliating peace. Losing wars to more technologically advanced nations soon became a regular occurrence, with the occasional triumphant skirmish in the Caucasus restoring some miniscule amount of prestige to Russian arms. The last tsar, Nicholas II, suffered a humiliating defeat against Japan in the Russo-Japanese war, before he was defeated once more by the German Empire during World War I. This latest military debacle, combined with food shortages and dire conditions for workers, led to uprisings and eventually a Bolshevik revolution that was to cost Nicholas not just his throne but also his life. The tsar and his family were arrested by Bolshevik soldiers and executed by a firing squad in 1918. Rumors abound of how one of their daughters, Anastasia, survived, but those who long for the return of the Romanovs shouldn’t hold their breath. The old Russia of the tsars was transformed into a worker’s paradise, small hamlets and onion shaped domes replaced by steel plants and brutalist apartment blocks.

In The Romanovs, Montefiore gives a detailed account of the imperial family’s three centuries long reign. Interspersed with matters of state are more personal accounts of the sovereigns’ private lives that makes you feel like a trusted courtier at the Winter palace, observing the imperial spectacle first hand. Like the best Russian novels, The Romanovs has more characters than you can possibly be expected to remember and ends in abject tragedy. I would recommend it heartily.  

Book Review: Breaking Rockefeller, the incredible story of the rivals who toppled an oil empire

By Peter B. Doran

Any economist worth his salt will tell you that our economy is built around fossil fuels. If the price of oil goes up, the price of everything else goes up as well. Despite all the talk about a low-carbon economy being just around the corner, our society is still reliant on a small number of oil producing countries in South America and the Middle East. A sound grasp of energy policy is of paramount importance if one wishes to understand the global economy, yet I would wager that few know the history of the oil industry, let alone how the precious black liquid that gives us respiratory disease and makes our planet increasingly less habitable is extracted from the ground. In Breaking Rockefeller Peter Doran tells the story of how a pair of swashbuckling entrepreneurs joined forces during the early twentieth century to dethrone one of the richest men who ever lived and change the petroleum industry forever.

When oil wells were discovered in the US Midwest during the nineteenth century, it triggered an oil rush where countless fortunes were made and many more were lost. Boomtowns sprung up virtually overnight, where the usual assortment of con men, fortune tellers and prostitutes suckled from the teat of low grade kerosene.  No one disliked this heady euphoria more than a soft-spoken accountant named John D. Rockefeller from Richmond, New York. As a young man, he travelled to ramshackle boomtowns like Titusville in Pennsylvania, and learned firsthand about the conditions for oil men on the ground. Gifted with a knack for business that bordered on genius, he drew two important conclusions that eventually made him the wealthiest man in the world. Firstly, that crude was worthless unless it had been refined, and whoever controlled the refineries was in command of a vital chokepoint that the entire industry relied on. Secondly, that by exercising monopoly power he could eliminate “wasteful” competition that drove down prizes and hurt profits. During the following decades he went about acquiring several oil refineries and rigged the marked in his favor by collaborating with railroad magnates to suppress his competition. Those who refused to pay fealty to Standard Oil were subjected to savage prize wars that Rockefeller’s multi headed hydra could endure but mom and pop oil producers could not. In the waning years of the nineteenth century, Rockefeller dominated the global petroleum industry from Standard Oil’s monolithic headquarters on 26 Broadway in New York. From his swiveled chair in the boardroom, he looked down on twin rows of formerly mighty oil magnates who payed fealty to him like cowering satraps.

Meanwhile, in London ‘s bustling Houndsditch, an enterprising merchant by the name of Marcus Samuel had made himself a fortune selling mementoes and gifts adorned with seashells to vacationing brits. His business, the Shell transport and trading company, had come a long way since those early days, and his business interests now spanned the globe. Marcus was a hard working businessman with an eye for making a good deal, and when great quantities of viscous black oil suitable for kerosene was discovered in Baku, Samuel was not about to miss out on the action. His contacts in the far east would gladly buy as much kerosene as he could bring them, but this would not be easy. Since the oil tankers of his day were little more than barges filled with highly flammable liquid, and sailors liked to enjoy a cigarette or two after a stressful day of sailing, oil tankers were barred from passing through the Suez Canal. This meant that Marcus’s kerosene had to sail halfway around the world reach his prospective buyers in the far east, and the increased costs this entailed meant there was no way he could compete with Standard Oil. In a brilliant example of disruptive technology, that gadfly word we read in management journals but no one really understands, Samuel hired the best and brightest engineers to manufacture a new kind of oil tanker, one that was safe enough to traverse the Suez Canal. This revolutionary new supertanker included many safety features that had never before been incorporated on a seagoing vessel, and their basic design is similar to what you would find on today’s oil tankers. His new fleet enabled Samuel to transport kerosene to his eastern markets at competitive prices and compete with Standard Oil.

On the wind-swept island of Sumatra, the Royal Dutch Oil Company was in a bind. Their existing oil wells were running dry, and to stay in business they needed to find a new well as soon as possible. The inhospitable climate meant that equipment was soon corroded with rust, thick mud impeded transportation and a host of exotic diseases culled the workforce at an alarming rate. It was a sign of the company’s desperation that they abandoned the tried and true method of simply digging into the ground at random and hoping to strike an oil well, and instead turned to a team of geologists. During the early twentieth century, any bare breasted oilman would have scoffed at the ridiculous notion of sending out scientist to discover oil, but this time it worked, and Royal Dutch was saved from bankruptcy when the geologists uncovered a vast new well. Henceforth, scientific methods would play a big role in finding new reserves of oil.

The growing number of gasoline powered cars meant that kerosene was no longer the most prized petroleum commodity. For Royal Dutch, this meant that the useless transparent liquid they used to dump in abandoned quarries and light on fire was now worth holding on to. When an energetic young man named Henri Deterding assumed control of Royal Dutch in 1900, their new Sumatran oil wells were overflowing with petrochemical bounty and the future of the company looked bright.

Meanwhile, in the United States, public opinion turned against the towering monopolies, so called trusts, that dominated the American economy. Legendary progressive journalist Ida Tarbell ran several exposes on Standard Oil’s questionable business practices that led to a growing clamor to break up the company. Behind a seemingly impenetrable wall of carefully concealed secrets and bolstered by an army of lawyers, Rockefeller and his directors prepared themselves for a lengthy siege.

At the height of his mercantile powers Marcus Samuel could have engineered a joint venture with Royal Dutch that was hugely beneficial to his own business, but poor judgement meant that he squandered his chance to make the deal of a lifetime. His work at Shell was soon overshadowed by his wish to climb the social ladder. Serving as the mayor of London and receiving a baronetcy meant that he started to manage his business poorly. He soon became easy pray for the dynamic Deterding, who exploited Samuels vulnerability once Shell started going into the red, and forced him to sign a merger deal that consigned the former seashell merchant into a largely ceremonial role. The newly formed Royal Dutch Shell, the company that me and you would call Shell, whose crimson seashell now adorns countless gas stations, was born.

This merger was a threat to Standard Oil, but according to Doran, Rockefeller could probably have fended them of if his business wasn’t fighting a protracted legal battle against the federal government at the same time. In 1911, the Supreme Court ruled that Standard Oil had to be broken up. The Standard Oil trust was duly chopped up into thirty-four smaller pieces, several of which, like Chevron and Exxon, remain in business today. For an in depth look at the heady days of the so called progressive era, I recommend that you read Doris Kearns Goodwin’s splendid The Bully Pulpit, previously reviewed on this blog, but it is sufficient to say that this was heralded as a triumph of the ordinary man against the omnipotent trusts. In reality, Standard Oil’s regional departments were able to weather the storm since they were well stocked with hidden capital and assets. Like the reinforced bulkheads between the separate compartments on Marcus Samuel’s oil tankers, the individual pieces of Standard Oil swiftly became highly profitable. As a matter of fact, Rockefellers own vast fortune grew larger after the carve-up. Despite this, Standard Oil’s dominion over the global petroleum marked was broken and the oil business looked vastly different from the way it had done a decade before The Standard was split up.

Mr. Doran tells the tale of these tumultuous, petroleum soaked times with a sure grasp of the facts, which he manages to present in a way that is digestible for the layman. Breaking Rockefeller is very well written and at times it feels as much of a page turner as a bestselling novel. The cast is full of eccentric and memorable characters and the dramatic plot gives an insight into how the fate of the global economy became intertwined with the market price of crude oil. As Doran himself notes at the end, the future of the energy industry is uncertain and nothing can be known for sure other than that we are probably going to be using oil for the foreseeable future. After reading Breaking Rockefeller I would wager that the landscape of tomorrow’s energy market will be decided by a combination of technological advances and tally ho entrepreneurs with an eye out for making a deal.