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Fifty Things You Need to Know About World History
‘Banking,’ said Walter Bagehot, ‘is a watchful but not laborious trade.’
In 1873 the banker, journalist and author Walter Bagehot published a book about banking in Britain called Lombard Street. Britain was then the richest country in the world, its money markets a global hub for credit and exchange. Bagehot was a shrewd and lucid observer of British public life. ‘Banking,’ he said, ‘is a watchful but not a laborious trade.’ Watchfulness, however, had not been much in evidence in a recent banking scandal. In 1866 a private bank called Overend, Gurney & Company, collapsed. It had over-extended its lending and had invested heavily in the surging growth of the railways. When the market weakened it found itself unable to meet its liabilities. ‘In a short time,’ remarked Bagehot, its managers had ‘substituted ruin for prosperity and changed opulence into insolvency.’ Other banks followed Overend, Gurney & Co. into liquidation and a variety of companies also failed as the credit crisis took its toll on the country’s economy. The directors of Overend, Gurney & Co. asked the Bank of England for help, but were refused. They were eventually tried for fraud at the Old Bailey, though the court found them guilty of ‘a grave error’ rather than a crime. Twenty-four years later, in 1890, the bank of Baring Brothers nearly collapsed because of unwise investments it made in Argentina. This time the Bank of England did step in, averting a crisis that might have brought the whole of the British banking system to its knees. Bagehot had proposed this course of action: he believed the Bank of England should be used as a central bank whose reserves could help other banks and businesses weather the difficulties of the economic cycle.
These dramatic events shook the confidence of Britain’s powerful commercial interests, but they made few long-term differences to the way people behaved. Britain in 1900 was very similar to Britain in 1870 and its Prime Minister, the Marquess of Salisbury, a typical product of the grand Victorian world – aloof, patrician and suspicious of democratic change.
But by the time the next crisis arose, thirty years into the twentieth century, the situation had changed dramatically. As with the Credit Crunch, the Great Depression of the 1930s began in America when the country’s stock market crashed in 1929. Although America had enjoyed a period of booming economic growth, there was still a wide division between rich and poor. The rich pumped their surplus cash into speculative stocks. When these failed not only they, but the poor they had left behind, suffered terribly. This suffering, which spread into Europe and the rest of the world, meant that the Great Depression had enormous political consequences. In America, President Roosevelt’s New Deal introduced fierce banking regulations, farm subsidies and a more inclusive approach to many aspects of the economy. In Britain, Prime Minister Ramsay MacDonald formed a National Government to try to cope with the crisis. In Germany and Italy, Hitler and Mussolini used economic misfortune to strengthen their call for vigorous anti-democratic measures. The Great Depression did not create fascism, but it certainly helped.
Further afield the freedom movements that had begun to develop in the colonial territories of the great powers pointed to economic misery as the inevitable legacy of selfish, wealth-obsessed masters. The man who would become the first Prime Minister of an independent India, Jawaharlal Nehru, said in a speech in 1929: ‘Our economic programme must … be based on a human outlook and must not sacrifice man to money.’ In Brazil, where growing prosperity suddenly began to decline, Getulio Vargas, one of the country’s most influential leaders in the whole of the twentieth century, seized power in 1930 and became known as ‘The Father of the Poor’. Economic turmoil had a global impact. At the end of the nineteenth century, capitalist economies were controlled by a few people and their mistakes could generally be contained without triggering revolutionary reverberations. By the middle of the twentieth century, the widening of the democratic process that accompanied the continuing march of industrialisation meant that ‘the market’ was everybody’s concern. The whole world demanded answers when things went wrong.
‘The market’ ran free. Capitalism was the great conqueror.
Answers could no longer be heard above the noise of war by the end of the 1930s. But in the fifty years that followed peace the world economy was further transformed. To begin with reconstruction was slow and in many countries, including Britain, times were harsh and austere. Gradually, however, as the old Bolshevik Communist system in Russia collapsed, China began to open its doors, the European Community grew larger and communications improved through the growth of the internet and air travel, the privations of the past slipped away. ‘The market’ ran free. Capitalism was the great conqueror. In Britain and America emphasis on the power of individuals to control their economic destinies became the dominant feature of policy-making. This approach spawned attitudes that were satirised in the film Wall Street in 1987. One of the main characters is a ruthless corporate financier called Gordon Gekko. ‘Greed,’ he tells a shareholder meeting, ‘for lack of a better word is good. Greed is right, greed works.’
Gordon Gekko is a caricature used to capture a prevailing mood. But when the Credit Crunch struck twenty years after he first appeared on the screen, his speech had something of a prophetic ring to it. In the film Gekko gets his come-uppance. In real life, too, the good times stopped as lifestyles financed by credit were no longer sustainable. In this atmosphere what people had once applauded as a healthy aspiration for wealth-creation was now condemned as nothing better than careless greed. The banks were blamed for over-extending themselves and lending money to creditors whose earnings could not support the debts they were encouraged to take on. The BBC Reith Lecturer Michael Sandel described the end of what he called three decades of ‘market triumphalism’. It was time, he said, to think again about what ‘the market’ was for. Putting it all down to greed was too easy because greed, in the form of self-interest, was how markets functioned. What was wrong was allowing them to intrude into areas of public policy for which they were entirely inappropriate. Arguments like this are significant. If heeded, they mean that the Credit Crunch will result in a fundamentally different approach towards money and how it is made.
What Do We Mean By ‘Financial Crisis?’
A financial crisis occurs when institutions or assets lose a great deal of value. Financial crises occurred more frequently from the seventeenth century onwards with the increasing circulation of money, the development of banking institutions, and globalisation.
Stock market crashes and financial bubbles occur when speculation drives up the price of an asset or stock above its true value. When participants begin to sell the stock, panic-selling often takes over, and the price declines dramatically, prompting a stock-market crash. ‘Tulip Mania’ in the 1630s is regarded as the first economic bubble. Prized as a luxury during the Dutch Golden Age, speculative trading saw tulip prices peak and collapse in 1636–37. In 1825 the stock market in London crashed partly as a result of highly speculative investments in Latin America, including the imaginary kingdom of Poyais, and nearly led to the collapse of the Bank of England. The best-known crash is that of Wall Street in 1929.
Bank runs occur when depositors rush to withdraw more money from the banks than the banks hold at the time with the result that depositors lose their assets. The Great Depression in America in 1931 saw a ferocious run on the Bank of the United States.
Currency crises and hyperinflation occur when the supply of paper money increases dramatically causing the value of the currency to decline. The Weimar Republic of Germany experienced this in 1923 when the Deutschmark fell to a value of DM 4,200,000,000,000 to the dollar. Between 1945 and 1946 Hungary experienced hyperinflation when prices rose by over nineteen percent per day.
It is still too early to know whether the Western world will change its attitude towards markets and what they are for. But if they do, it is more than likely that those changes will be created, not by the application of a new philosophy, but by the impact of harsh economic reality. The principal difference between the Great Depression and the Credit Crunch is the effect upon the poorer people of the industrialised nations. In the Great Depression this was devastating, not least because to begin with banks did not know how to cope with it. In particular they made the fatal error of restricting money supply by raising interest rates. In America, the Federal Reserve, the country’s central bank, did not intervene and lend to struggling banks in order to prevent their collapse. In the Credit Crunch the reverse happened. Interest rates fell and failing banks were bailed out by governments. This and the improvements in social welfare that have taken place since the end of the Second World War meant that the immediate consequences of the crisis were reduced. The sight of large crowds of homeless or unemployed people has not so far been a feature of the collapse in the markets.
In the longer term, however, that may change: the price of quick salvation is high. The cost of rescuing the financial systems of the West has plunged its governments into deep debt. In 2009 the International Monetary Fund reported that the world’s ten richest economies had borrowed a total of more than $9 trillion in order to cope with the crisis. In a weak global economy, paying back these huge sums will prove a hard task. In Ireland the economic improvements of the previous twenty years have been all but extinguished by the financial turmoil. Everywhere countries face the prospect of introducing older retirement ages, higher taxes and deep spending cuts. In 1929 the sudden shock of the Wall Street Crash led to immediate devastation and despair. In 2010 the aftermath of shock may have been delayed, but not necessarily eradicated. The Credit Crunch could yet lead to the long term of erosion of wealth in the modern world.
Introduction
Freedom is a much-abused concept. In English we use two words meaning the same thing – ‘freedom’ and ‘liberty’. The first has a Teutonic root, the second comes from the Latin. Most other European languages have only one word, for example, liberté in French, freiheit in German or libertad in Spanish. The sad fact is that however many words are used to describe it, in the history of the world those promising liberty or freedom have often lied. Movements claiming to set people free have ended up imprisoning or suppressing them. True freedom is both hard to find and define. Like happiness, with which it is often associated, it is one of the most desired yet most elusive accompaniments to the progress of mankind.
In his book On Liberty published in 1859, the British political philosopher John Stuart Mill argued that ‘the only purpose for which power can be rightfully exercised over any member of a civilised community, against his will, is to prevent harm to others. Over himself, over his own body and mind, the individual is sovereign.’ As with all philosophical pronouncements, it is a statement that begs some questions – most importantly in this case, what is the definition of preventing harm to others? But the broad principle of Mill’s thought is one that many of us would agree with today. It remains a remarkably modern definition of liberty. For most of us our individual freedom is the most precious thing we possess. Furthermore, we take it for granted.
The journey to this state of affairs has been a long one, and it is not finished yet. It started in ancient Greece with philosophers like Socrates who argued that accepted truths should always be tested by rational argument and free discussion. From there it travelled into Roman thought where politicians like Cicero adopted the Socratic approach to open debate. The triumph of Christianity in Europe led eventually to the medieval age of suspicion and persecution. Argument became heresy in the mire of the Inquisition. By the fifteenth century, the ideas of the Renaissance, combined with the desire for greater religious freedom that inspired the Reformation, began to shake the foundations of the Church, although freedom of thought was still suppressed. Protestants could be just as ruthless as Catholics in exterminating opinions of which they did not approve. It was not until the end of the seventeenth century, when scientific discovery started to undermine the defences of a world built on religious foundations, that rational thought burst into the explosion of ideas we call the Enlightenment. From that time on concepts of freedom that we would recognise today came into being. Modern political thought has its beginnings in the philosophers of the late seventeenth and eighteenth centuries.
This section of the book picks its way through this process beginning with the slave rebellion against the Roman Republic led by Spartacus in 73 BC. Its bravery and brilliance have been an inspiration for many of those fighting for freedom ever since. Jan Hus, a Czech who was burned at the stake for his religious beliefs in Constance, Germany, in 1415 was one of the first great leaders of opposition to the Catholic Church in the Middle Ages, and is still regarded as a national hero in his own country. The American Declaration of Independence of 1776 and the French Revolution that began in 1789 were two of the greatest upheavals in world history. The first led to the creation of a great democracy while the other’s high ideals were drowned in blood and resulted in Napoleonic dictatorship. The concept of individual freedom is arguably nowhere better expressed than in the works of Beethoven, whose music embodies the Romantic movement. The Zulu War of 1879 was an unsuccessful fight for liberty against the oppressive power of the British Empire; in Russia in 1917 the Bolshevik Revolution overthrew the monarchy of the Romanovs, promising liberation but building a terrifying Communist monolith instead; and in 1949 Mao Zedong became the Communist leader of China and began the ruthless control of his nation that would begin its transformation into a great world power. But in Europe the power of Communism fell into decline, its end signalled by the collapse of the Berlin Wall in 1989. A year later, the greatest African leader of the twentieth century, Nelson Mandela, was released from prison. The oppression of apartheid ended as he began the leadership of his country to black majority rule.
Each of these events can be seen as stepping stones to freedom. Together they provide a series of points from which we can look forward and back at man’s attempts to make himself free. But a series of attempts is all they are. On the whole man’s freedom remains something he desires rather than something he has found.
CHAPTER 1
Spartacus 73 BC
Spartacus was a Roman slave and gladiator who led a rebellion against his Roman masters. He won a number of victories before being killed in battle. Since the eighteenth century his name has been used to evoke the idea of freedom.
In Paris in 1760 a five-act tragedy called Spartacus by the lawyer and playwright Bernard-Joseph Saurin was a great popular success when it appeared at the Comédie-Française. Exactly two hundred years later, a Hollywood movie with the same title starring Kirk Douglas brought the Spartacus story to the worldwide cinema audience. The French philosopher Voltaire described the Spartacus rebellion as ‘the only just war in history’ and Karl Marx chose him as one of his heroes, calling him ‘one of the best characters in the whole of ancient history’. Lenin also described him as ‘one of the most outstanding heroes of one of the very greatest slave insurrections’, while the Communist revolutionaries in Germany during and after the First World War took the name of Spartacus as their inspiration and called themselves ‘Spartacists’. From the time of his death in battle in 71 bc until the eighteenth century, Spartacus was little more than one of history’s footnotes. But as ideas of individual liberty took hold, the Western world looked back to ancient Rome. In Spartacus it found the symbol of freedom it was looking for.
Slavery is as old as man.
Slavery is as old as man. In the ancient world slaves were valued in the same way as domestic animals and treated as such. The Greek philosopher Aristotle said that both slaves and animals were necessary for providing help in daily life. ‘It is clear,’ he said, ‘that there are certain people who are free and certain who are slaves by nature, and it is both to their advantage, and just for them, to be slaves.’ There are frequent references to slaves and slavery in the Old Testament; and many pre-colonial African countries operated systems of slavery, as did China, the countries of the Indian subcontinent and Southeast Asia. Different societies had different forms of slavery and different attitudes towards it as well. But all of them had one thing in common: slaves were human beings. They had a natural sense of freedom, and would always try to escape or rebel. Even though they might sometimes be well treated, the oppressive fact of their servitude was a constant burden. They knew that any freedoms and privileges they might enjoy could be taken away from them in an instant. They had no free will and no basic human rights.
The only way in which any such system can be maintained is through brutality. The achievements of classical antiquity may be inspiring but they were built upon a society that depended on the violence and human indignities of slavery. This acceptance of something that today we find abhorrent was regarded in the ancient world as perfectly appropriate, although in the early sixth century AD the legal code of the Eastern Roman Emperor, Justinian, recognised this conflict between the institution of slavery and its human effects. Slavery, it said, was contrary to the law of nature but was sanctioned as a legal activity.
Much later, when most European countries had in their own countries abandoned not only slavery, but its successor serfdom too, some of them adopted it again in order to support their colonial conquests. Once they had grown used to it, they found it almost impossible to relinquish it. Even the founding fathers of the American nation, some of the greatest apostles of liberty in the history of the modern world, could not face the issue of slavery when they devised the constitution of their new country. Their inability to do so contributed eventually to the American Civil War of the 1860s and the murderous battles that killed more than 600,000 people. In 1861, at the outset of the war, the State of Missouri gave its reasons for secession in a declaration. ‘Our position,’ it announced, ‘is thoroughly identified with the institution of slavery – the greatest material interest in the world. Its labour supplies the product which constitutes by far the largest and most important portions of commerce of the earth. These products have become necessities of the world, and a blow at slavery is a blow at commerce and civilisation.’ No Greek philosopher, no Roman senator or emperor, could have put it better. In Brazil, where the Portuguese introduced slavery to maintain their sugar plantations, slavery was not banned altogether until 1888, even though the country had been independent for sixty-six years. Two years earlier, Thomas Hardy published one of his most famous novels, The Mayor of Casterbridge, in which, in the opening scene, a man auctions his wife and daughter at a country fair. His description of the event was met with horror and incredulity in late Victorian Britain but Hardy claimed that rural records showed that such activities still occurred in the English county of Dorset where his story was set. Not slavery perhaps, but not far off. Once men inure themselves against the obvious injustices of slavery and defend its use for the economic advantages they believe it brings, humanity deserts them.
In Spartacus, the Western world found the symbol of freedom it was lookingfor.
The economy of the Roman Republic and early Empire depended on slavery. We do not know exactly how many slaves there were, but estimates suggest that they made up a third of a total population of about six million. The main way in which people became slaves was through capture in war although traders and pirates also played their part. Natural reproduction helped maintain the numbers: a child born to a female slave was automatically enslaved, no matter who the father might have been. Slavery knew no racial or national boundaries. Anyone could become one. Slave markets flourished in towns throughout the Roman world as people went shopping for the human labour they needed to look after their homes or work their fields. Slaves involved in heavy labour were rarely set free – that was a privilege afforded to the better educated, who worked in clerical or educational jobs. At no time was this system of forced labour questioned or criticised. It did not change with the advent of Christianity. The Romans inherited slavery from the Greeks and used it as an essential part of their organisational structure until the last days of the Empire.
Spartacus came originally from Thrace, an area covering modern southern Bulgaria, northern Greece, and northern Turkey. According to the Greek historian Plutarch, writing long after the slave rebellion, Spartacus was brave and strong and also rather more intelligent than his fellow gladiators. He had seen service in the Roman army, was later sold as a prisoner and ended up in a school for gladiators in the prosperous southern town of Capua, not far from Naples. Gladiators were one of the sex symbols of ancient Rome. They were imprisoned in communal quarters, sometimes with their wives – Spartacus was married – and forced to take part in the violent spectacles that the Romans enjoyed. They lived in a world of constant uncertainty, thrust together with others they did not know and whose languages they may not have spoken. Their lives meant nothing, except to themselves. It is not surprising that there are recorded instances of gladiators committing suicide in order to escape from their life of bloody servitude. One man slit his throat in a lavatory before he was due to fight, another pretended to fall asleep as a cart carried him into the arena and broke his neck by thrusting his head between the spokes of its wheels.
In 73 BC Spartacus and about seventy other gladiators escaped from their school and set up a camp on the slopes of Mount Vesuvius about twenty miles away. From here they began to carry out raids on nearby properties. News of their activity spread and they began to be joined by other runaway slaves, building what seems to have been a quickly improvised dash for freedom into a significant insurrection. A military force of about 3,000 men was sent from Rome to suppress the rebellion, so we can assume the number of slaves under Spartacus’s command must have grown to a considerable size. The Roman commander, Claudius Glaber, laid siege to the slaves’ stronghold, but they escaped by climbing down the mountainside on ropes made from vines. Using what were presumably makeshift weapons they then attacked the Romans from behind and defeated them. More slaves now joined Spartacus and his men. Many of them were agricultural workers and herdsmen who were used to living in open country and were fit and strong. The slaves acquired better weapons and horses, perhaps brought to them by the new recruits. Within a few months they had formed a powerful, well-managed army capable of challenging the might of Rome.
Roman Slave Rebellions
There were two important rebellions by slaves before the one led by Spartacus in 70 AD. Both took place in Sicily where increasing numbers of slaves were brought from abroad to work on agricultural estates. The first started in Enna in 135 BC when Eunus, a Syrian fire-breathing entertainer who claimed to have prophetic powers, rebelled against an opulent landowner called Damophilus. His 400 men joined forces with 5,000 slaves led by Cleon, a horse-breeding slave. The rebellion engulfed half the island and became organised enough to resist several local governors until 132 BC, when the Roman army under the Consul Piso defeated it. In 104 BC a group of thirty slaves killed their wealthy landowning masters at the prosperous city of Halicyae near the modern town of Marsala. Their numbers spread spontaneously until they had a force of about 20,000 operating across a wide geographical area. Their leaders, Salvius and Athenion, became ‘slave kings’ and Salvius assumed the name ‘Tryphon’ after one of the rulers of the Seleucid Empire that succeeded Alexander the Great. The unplanned proliferation of their numbers sowed the seeds of the rebels’ downfall. They found it too demanding and ultimately impossible to control such a large army. They were defeated when Rome committed adequate resources to defeat them in a full-scale battle under Consul Aquillus in 100 BC. Slaves were imported from many different countries and lacked common customs and attitudes. Their main purpose in rebellion was to take revenge against their owners and taste freedom. Beyond that they had little to sustain them.
