Wednesday, June 9, 2010

FROM WAR TO MERCANTILISM & MARKET CAPITALISM ... EXAM POST

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As noted about a month ago here, from time to time I post notes to help students prepare for exams. This is one of those posts. Below I provide a brief sketch of how eras like the Enlightenment combined with war to create the conditions for the modern state and market capitalism to emerge. Critical here is understanding how eras like the Enlightenment combined with war to help secularize society, which helped turn avarice, individual honor, and profits into a "good" thing. I discuss all of these in greater detail in chapters 3 and 5 of my book, The Myth of the Free Market.
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The political roots of our current market economy can be summed up in two words: Liberal Revolution.

Recall that before 1776 - when Adam Smith’s The Wealth of Nations was published and the Declaration of Independence was signed - the Western world was still stuck in a feudal mindset where myths, custom, and tradition dominated what the vast majority of society believed. If someone fell on the floor, in what we now know is an epileptic seizure, anyone in the crowd could be singled out for witchcraft or sorcery.

As well, most commoners had little say over what they wanted to do when they “grew up” and even less control over who would rule over them. Economic feudalism and political monarchies stifled both individual initiative and political freedom. Custom and tradition, rather than individual acumen and personal talent dominated our social and political environment.


This would change because of how three intertwined developments combined with the increased scale of war to secularize our world views. Ultimately, all of this depended on the gradual consolidation of political power to occur. First, the three intertwined developments that helped bring about Liberal Revolution ...

Three Intertwined Developments
The Renaissance (p. 56-60) brought knowledge and the creative spirit back to Europe by reopening the classics to society. St. Francis (1181-1226) and others began to challenge the notion that the world was merely a collection of symbols expressing God’s message, waiting to be unraveled by the priests. Universities were established during the High Middle Ages (1000-1300 AD), creating places where conventional wisdom was discussed and even challenged. Still, custom and tradition mandated that commoners obey authority - the church and the aristocracy - and warned against not accepting your fate in life.


Later, the Reformation - a succession of wars fought to establish religious conformity and “moral universalism” throughout Europe - helped raise questions about the Catholic Church, and finally ended in 1648. The Treaty of Westphalia (1648) ended the Reformation, with individual monarchs declaring that it was better to allow each one to determine how people would worship and pray within their borders.


The questions raised by Martin Luther’s 95 theses (tacked on a church door in 1517) were instrumental because they not only questioned internal church practices, but they helped create an environment that would lead scholars and others to question the church’s veracity, and it’s authority on many topics. In the process, feudal customs and traditions would be challenged.


Finally, the Enlightenment - a period of scientific discovery and philosophical discourse - raised serious questions about our world views. By questioning and disproving church teachings scientists and scholars during the Enlightenment helped “secularize” our world by illustrating how and why the church could be wrong. For example, when Galileo looked through his telescope and showed that the earth moved (p. 65) the impact was immediate.


If the church could be wrong about the earth not being the center of the universe could it also be wrong about the divine right to rule, original sin, and the notion that one should simply accept their station in life? If so perhaps the monarchs weren’t the rulers God wanted. Better yet, what if peasants and others didn’t have to accept their fate in life?

These were heady questions indeed.

The Role of War in Secularizing Society
While our knowledge of the world was being altered by the combined effects of the Renaissance, the Reformation and the Enlightenment, the demands of military battles slowly compelled heads of state to acquire armies that could fight for the state, and individual honor, rather than convoluted religious symbols or against the devil’s emissaries.

By inspiring soldiers to fight for national security rather than religious goals it became much easier to convince individual soldiers about the fight. Because survival is instinctual and objective, while fighting for God is faith based and subjective, arguing over “Who else is worthy to worship my God alongside me?” no longer dominated the mind-set of armies.

Better yet, by tying the quest for national security to each soldier’s honor and glory the state actively encouraged individual accomplishment and personal triumph. The goals of moral universalism and the Christian Faith slowly faded away. By secularizing accomplishment on the battlefield the state went a long way in elevating individualism and personal excellence, which are the hallmarks of classical liberalism and entrepreneurialism in market economies today.


Together with the developments brought about by the Renaissance, the Reformation, and the Enlightenment, an increasingly secularized society no longer accepted explanations offered by the church. Perhaps more importantly, myths declined as a source of explanation as “scientists” looked for the causes behind disease, weather patterns, and the movement of the stars.

But the biggest impact brought about by war and the Enlightenment was the realization that while armies were expensive, free thinkers were generally surrounded by the most ambitious and profitable merchants of their day. If the state were to survive it would need revenue (p. 63-65). Ergo, it would need to court traders and thinkers, rather than seek the approval of priests and monks. The result? States began making bargains with merchants. In exchange for tax revenue the state would provide protection, stability, and even a say in how the state would be governed.


These dynamics are the roots of modern parliaments and, perhaps more importantly, helps us understand the logic behind constitutional liberalism. Perhaps more importantly, it helps us understand how war and the need for security would shape the state in the modern era by leading to the creation of increasingly efficient bureaucracies (of violence) and war.

War Made the State and the State Made War …
After the collapse of Rome the Eurasian continent was divided along geographic, linguistic, and cultural lines. Once tied together by Roman conquest, infrastructure and diplomacy, Europe devolved into a hodgepodge of unconnected regions. The “empires” that existed were really little more than competing families dominated by strong personalities.

Making matters more difficult was that apart from the Catholic Church coherent and cohesive institutions on the Eurasian continent were largely absent. Simply put, Rome’s “successor kingdoms in the west did not learn how priceless” the state institutions they had destroyed were, and were equally ignorant recognizing how difficult it would be to replace them. The need to pay for war would make this abundantly clear.

Through the Dark Ages (476-1,000 AD) and the High Middle Ages (1,000-1,300 AD), from the Steppe mountain regions to the Pyrenees of Europe, the Eurasian continent was dominated largely by barbarian clans and feuding nobles. And while Western Europe may not have been, as John Keegan suggested, “a continent without armies” it was probably more realistic to say Europe was largely a continent without the institutions necessary for collecting taxes and building large professional armies.

Grappling with the problem of paying warriors, kings began raising private militias made up of nobles and indentured soldiers. As war evolved the arrival of new tactics and technologies – which brought pikemen, artillery, and muskets into warfare – continued to strain state resources. This would help convince Europe’s monarchs to pursue administrative competence during the High Middle Ages in the areas of finance and war.


Because of these dynamics Western European states developed ever larger political units. Smaller political units, especially those capable of producing regular income, were incorporated or swallowed up in the process.

By the fifteenth century European monarchs looked for ways to manage what had been patched together. With weapon innovations proving costlier by the decade the key problem for monarchs was raising revenue, especially from lesser lords who often rebelled. To pay for new weapons and to fund military campaigns Europe’s monarchs became creative domestically, and more aggressive abroad.


The former would set the stage for representative government and mercantilism. The latter paved the way for imperialism and colonial wars. In all cases, it was the demands of war that created the environment for liberal constitutionalism and market capitalism to emerge in the West from the 17th through the 19th centuries.
 
- Mark

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