More on this book
Community
Kindle Notes & Highlights
Read between
August 18, 2018 - May 8, 2019
And it was the Dutch merchants – not the Dutch state – who built the Dutch Empire.
WIC built a settlement called New Amsterdam on an island at the river’s mouth. The colony was threatened by Native Americans and repeatedly attacked by the British, who eventually captured it in 1664. The British changed its name to New York. The remains of the wall built by WIC to defend its colony against Native Americans and British are today paved over by the world’s most famous street – Wall Street.
As the seventeenth century wound to an end, complacency and costly continental wars caused the Dutch to lose not only New York, but also their place as Europe’s financial and imperial engine. The vacancy was hotly contested by France and Britain.
In 1717 the Mississippi Company, chartered in France, set out to colonise the lower Mississippi valley, establishing the city of New Orleans in the process. To finance its ambitious plans, the company, which had good connections at the court of King Louis XV, sold shares on the Paris stock exchange.
In 1717 the lower Mississippi valley offered few attractions besides swamps and alligators, yet the Mississippi Company spread tales of fabulous riches and boundless opportunities. French aristocrats, businessmen and the stolid members of the urban bourgeoisie fell for these fantasies, and Mississippi share prices skyrocketed.
When other investors saw the price going down, they also wanted to get out quick. The stock price plummeted further, setting off an avalanche. In order to stabilise prices, the central bank of France – at the direction of its governor, John Law – bought up Mississippi shares,
By now, the central bank and the royal treasury owned a huge amount of worthless stock and had no money.
The Mississippi Bubble was one of history’s most spectacular financial crashes. The royal French financial system never recuperated fully from the blow.
Louis XV found it more and more difficult to raise credit.
in 1789, Louis XVI convened the Estates General, the French parliament that had not met for a century and a half, in order to find a solution to the crisis. Thus began the French Revolution.
While the French overseas empire was crumbling, the British Empire was expanding rapidly. Like the Dutch Empire before it, the British Empire was established and run largely by private joint-stock companies based in the London stock exchange.
The Indian subcontinent too was conquered not by the British state, but by the mercenary army of the British East India Company.
it ruled a mighty Indian empire for about a century,
The nationalisation of Indonesia by the Dutch crown (1800) and of India by the British crown (1858) hardly ended the embrace of capitalism and empire.
Egypt, too, learned to respect the long arm of British capitalism. During the nineteenth century, French and British investors lent huge sums to the rulers of Egypt, first in order to finance the Suez Canal project, and later to fund far less successful enterprises. Egyptian debt swelled, and European creditors increasingly meddled in Egyptian affairs. In 1881 Egyptian nationalists had had enough and rebelled. They declared a unilateral abrogation of all foreign debt. Queen Victoria was not amused. A year later she dispatched her army and navy to the Nile and Egypt remained a British
...more
In 1821 the Greeks rebelled
against the Ottoman Empire. The uprising aroused great sympathy in liberal and romantic circles in Britain – Lord Byron, the poet, even went to Greece to fight alongside the insurgents. But London financiers saw an opportunity as well. They proposed to the rebel leaders the issue of tradable Greek Rebellion Bonds on the London stock exchange.
The Turks gradually gained the upper hand. With a rebel defeat imminent, the bondholders faced the prospect of losing their trousers. The bondholders’ interest was the national interest, so the British organised an international fleet that, in 1827, sank the main Ottoman flotilla in the Battle of Navarino. After centuries of subjugation, Greece was finally free. But freedom came with a huge debt that the new country had no way of repaying. The Greek economy was mortgaged to British creditors for decades to come.
This is why today a country’s credit rating is far more important to its economic well-being than are its natural resources.
The most important economic resource is trust in the future, and this resource is constantly threatened by thieves and charlatans. Markets by themselves offer no protection against fraud, theft and violence. It is the job of political systems to ensure trust by legislating sanctions against cheats and to establish and support police forces, courts and jails which will enforce the law.
In a completely free market, unsupervised by kings and priests,
avaricious capitalists can establish monopolies or collude against their workforces.
At the end of the Middle Ages, slavery was almost unknown in Christian Europe. During the early modern period, the rise of European capitalism went hand in hand with the rise of the Atlantic slave trade. Unrestrained market forces, rather than tyrannical kings or racist ideologues, were responsible for this calamity.
From the sixteenth to the nineteenth centuries, about 10 million African slaves were imported to America. About 70 per cent of them worked
on the sugar plantations.
The slave trade was not controlled by any state or government. It was a purely economic enterprise, organised and financed by the free market according to the laws of supply and demand.
Some religions, such as Christianity and Nazism, have killed millions out of burning hatred. Capitalism has killed millions out of cold indifference coupled with greed.
According to the most moderate estimates, between 1885 and 1908 the pursuit of growth and profits cost the lives of 6 million individuals (at least 20 per cent of the Congo’s population). Some estimates reach up to 10 million deaths.4
Capitalism has two answers to this criticism. First, capitalism has created a world that nobody but a capitalist is capable of running. The only serious attempt to manage the world differently – Communism – was so much worse in almost every conceivable way that nobody has the stomach to try again. In 8500 BC one could cry bitter tears over the Agricultural Revolution, but it was too late to give up agriculture. Similarly, we may not like capitalism, but we cannot live without it. The second answer is that we just need
more patience – paradise, the capitalists promise, is right around the corner. True, mistakes have been made, such as the Atlantic slave trade and the exploitation of the European working class. But we have learned our lesson, and if we just wait a little longer and allow the pie to grow a little bigger, everybody will receive a fatter slice. The division of spoils will never be equitable, but there will be enough to satisfy every man, woman and child – even in the Congo. There are, indeed, some positive signs. At least when we use purely material criteria – such as life expectancy, child
...more
In the natural process of metabolism, the bodies of humans and other animals burn organic fuels known as food and convert the released energy into the movement of muscles.
Since human and animal bodies were the only energy conversion device available, muscle power was the key to almost all human activities.
Plants in their turn obtained their energy from the sun. By the process of photosynthesis,
Human history was consequently dominated by two main cycles: the growth cycles of plants and the changing cycles of solar energy (day and night, summer and winter). When sunlight was scarce and when wheat fields were still green, humans had little energy.
When the sun shone
brightly and the wheat ripened, peasants harvested the crops and filled the granaries. Tax collectors hurried to take their share. Soldiers flexed their muscles and sharpened their swords. Kings convened councils and planned their next campaigns. Everyone was fuelled by solar energy – captured and packaged in wheat, rice and potatoes.
A partial breakthrough in converting heat into movement followed the invention of gunpowder in ninth-century China.
About 600 years
passed between the invention of gunpowder and the development of effective artillery.
Around 1700, a strange noise began reverberating around British mineshafts. That noise – harbinger of the Industrial Revolution – was subtle at first, but it grew louder and louder with each passing decade until it enveloped the entire world in a deafening cacophony. It emanated from a steam engine.
In the decades that followed, British entrepreneurs improved the efficiency of the steam engine, brought it out of the mineshafts, and connected it to looms and gins.
In the blink of an eye, Britain became the workshop of the world.
In 1825, a British engineer connected a steam engine to a train of mine wagons full of coal.
On 15 September 1830, the first commercial railway line was opened, connecting Liverpool with Manchester.
A mere twenty years later, Britain had tens of thousands of miles of railway tracks.1
Any type of energy, anywhere in the world, might be harnessed to whatever need we had, if we could just invent the right machine.
Six hundred years passed between the moment Chinese alchemists discovered gunpowder and the moment Turkish cannon pulverised the walls of Constantinople. Only forty years passed between the moment Einstein determined that any kind of mass could be converted into energy – that’s what E = mc2 means – and the moment atom bombs obliterated Hiroshima and Nagasaki and nuclear power stations mushroomed all over the globe.
Another crucial discovery was the internal combustion engine, which took little more than a generation to revolutionise human transportation and turn petroleum into liquid political power. Petroleum had been known for thousands of years, and was used to waterproof roofs and lubricate axles. Yet until just a century ago nobody thought it was useful for much more than that. The idea of spilling blood for the sake of oil would have seemed ludicrous. You might fight a war over land, gold, pepper or slaves, but not oil. The career of electricity was more startling yet. Two centuries ago electricity
...more
At heart, the Industrial Revolution has been a revolution in energy conversion.
It has demonstrated again and again that there is no limit to the amount of energy at our disposal. Or, more precisely, that the only limit is set by our ignorance.
