Tuesday, July 27, 2010
By Eamonn Fingleton
Here's an economic history test:
1. Which Great Power pioneered the secular trend towards freer international trade?
2. Which Great Power first resorted to spiraling foreign indebtedness to pay for its wars?
3. Which Great Power first permitted large-scale foreign direct investment in its domestic industries and infrastructure?
If you guessed such latter-day globalizers as the United States or Britain, you flunked. The correct answer in each case is the Ottoman Empire.
During much of its existence of more than six centuries, the empire arguably ranked as the world's top power, but this did not stop its eventual collapse in 1922-23. For anyone concerned about America's future, the implications are thought provoking. Indeed in many ways America’s current trajectory seems like a speeded up version of the Ottoman movie.
Although the Ottomans were never as rabidly ideological in their trade views as the editorial board of the Wall Street Journal, they diverged sharply from the systematic mercantilism that marked the rise of Europe in early modern times. Their import tariffs were relatively low and Ottoman policymakers took a "don't worry, be happy" view of the empire's rising trade deficits in the mid-19th century. In so doing, they eerily anticipated similar insouciance in Washington in the last three decades.
Of course, the analogy should not be pushed too far. Trade was not the only factor in the empire's ultimate fate. A particularly problematic political culture bears much blame. Although the Ottoman sultanate functioned much like the monarchies of early modern Europe, there was one important difference: the Ottomans did not believe in primogeniture. After a reigning sultan passed on, it was not just brother against brother but brother against half-brother, with various mothers and other female partisans pulling strings from behind the harem curtains.
The process by which Selim I succeeded in 1512 was especially memorable. He felt it necessary to kill not only all his brothers but all their sons. Nothing if not thorough, he went on to grease the skids for Suleiman, the ablest of his own sons, by killing the latter's four brothers. Selim was to become known to history as Selim the Excellent and his son as Suleiman the Magnificent. So much for Ottoman civilization at its apogee.
As the years went by, the more bloodcurdling aspects of the Ottoman political tradition were reined in, but even as late as the mid-19th century, the empire's administration remained unaccountably and, far too often capriciously, authoritarian. Meanwhile, the lack of a primogeniture tradition proved a stumbling block in a different way: by retarding industrial development. Whereas in Europe, a company founder typically bequeathed his business in its entirety to his eldest son, successful Ottoman businessmen often divided up their businesses among many heirs. Whatever else might be said about the European practice, it was more conducive to the emergence of massive, often globe-spanning, corporations.
Such nuances aside, several aspects of the Ottoman approach to economics seem highly relevant to recent American experience. Already by the early 1840s, the Sublime Porte, as the Ottoman government in Istanbul had become known, signed what amounted to one-way free trade agreements with several of the European powers. It renounced its right to levy anything more than nominal tariffs on imports, yet secured no similarly favorable treatment for its own exports in return. The parallel with Washington's post-World War II trade diplomacy in East Asia is hard to miss.
The agreements set in stone the Ottomans' longstanding import-friendly tradition. The timing was crucial: the Ottomans contrived to have their hands tied just as international trade was moving decisively to the fore as a determinant of a nation's economic performance. Previously, in an era of craft industries and generally prohibitive transportation costs, trade had played a minor role, particularly in the case of larger nations. By the 1840s, the Industrial Revolution and the concommitant development of more efficient transportation methods had transformed manufacturing economics: suddenly economies of scale assumed a mission-critical role. Thus those nations that contrived, by hook or by crook (not least by skillful or coercive trade diplomacy), to find the largest possible markets for their industrial products enjoyed a distinct advantage. Such nations notably included Britain, which notwithstanding its later Pauline conversion to free trade deployed intelligently conceived protectionist methods to jump-start new industries in the most dynamic phase of its rise in the first half of the 19th century.
Ottoman officials discovered too late that they had painted themselves into a corner. As cut-price imports flooded in from Europe's increasingly efficient new factories, the empire was prohibited from using high tariffs to build its infant industries. For the first time in its history the empire's trade plunged deeply into the red. The situation deteriorated so rapidly that by 1854 the Sublime Porte was forced to seek help abroad in the form of a loan raised in London.
It was the first foreign loan in the empire's history, but soon foreign borrowing became a way of life. Then, with its bargaining position severely weakened by chronically poor trade performance, the empire was pressured in 1881 into handing over almost complete control of its remaining tariffs to European officials. European investors were granted a major role in running Ottoman industries, most notably tobacco, and developing railroads and other modern infrastructure. Basically the Sublime Porte had lost control of its destiny.
Trade apart, the empire's outsize military expenses speeded the outcome. Indeed, seen from the vantage point of the 21st century, the empire's history seems to have consisted of little more than war. And it was the need to finance its participation in the Crimean War—which broke out in 1853 and is widely considered the first modern war—that proved the last straw in forcing a resort to the London financial markets.
The parallel with the United States is hard to miss: after all, since the 1930s, there has been only one decade—the 1980s—in which the United States has not been involved in at least one significant war. Except for World War II, moreover, these wars have seemed at best only tenuously connected to America's vital interests. Worse, they have tended gratuitously to undermine the nation's economic fundamentals.
By comparison, the Ottomans at least seemed to have had some reason to go to war. In entering the Crimean War, for instance, the empire was responding to a Russian attack on its territory.
What is clear is that military activities constituted an increasingly onerous burden for the Ottomans from the 1850s onwards. As documented by Murat Birdal, author of a new book on late-era Ottoman finances, military needs were behind major foreign issues of bonds in 1877, 1888, 1896, 1905, 1913, and 1914. Meanwhile, other bond issues were constantly required merely to repay debt incurred in funding earlier military activities.
Again the parallels with America’s recent history are striking: a key reason Washington has become increasingly indebted to Japan, China, and Germany in the last 30 years has, of course, been the financial burden of defending a vast quasi-empire at a time when the export industries have faltered.
Perhaps the most egregious parallel between Istanbul then and Washington today is in the treatment of exporters. Far from encouraging them, the Ottoman empire seemed to go out of its way to hobble them with special tariffs on exports. Of course, such tariffs had been a common feature of the tax systems of many nations in preindustrial times. (They had the virtue of being relatively easy to collect.) But they had been abandoned by more enlightened governments as the Industrial Revolution began. In the Ottoman empire, by contrast, they continued to be levied for nearly a century longer. Ottoman officials did not come to appreciate the full implications until the empire had fallen far behind the European powers in industrial prowess.
As for the United States, there may be no special taxes on exports these days, but, all but overlooked by most observers, the U.S. tax system nonetheless contains a hidden and quite marked anti-export bias. As economic commentator Pat Choate pointed out in his 2009 book, Saving Capitalism: Keeping America Strong, this stems from the fact that while most other advanced nations have abandoned sales taxes in favor of a value-added tax, sales taxes persist as a central pillar of U.S. taxation. The interaction between the two systems puts American manufacturers, and particularly those who export, at a significant disadvantage. This reflects the fact that, whereas in VAT systems, manufacturers are granted rebates on exports—this is legal under World Trade Organization rules—no similar break is available under a sales-tax system. The effect is that American exports contain a "baked-in" element of sales taxes that, particularly in the case of price-sensitive products, can be a decisive disadvantage in global competition.
So much for the parallels between the Ottoman empire and the United States. Now for a difference: the speed of financial implosion. This has been astoundingly faster in America's case. After all, it seems only yesterday that the United States bestrode the world as the greatest creditor nation in history. With hardly a second thought, the U.S. government not only found the money—entirely internally, of course—to fund the massive rearmament program that won World War II, but afterwards advanced huge sums to jump-start other major nations' postwar recoveries. Thereafter, until well into the 1960s, the American economy remained so strong that the cost of maintaining a vast global network of military bases seemed readily manageable.
By the 1970s, however, the bloom was off the rose: a trade crisis in 1971-72 forced the United States off the gold standard, and the U.S. Treasury began to rely ever more heavily on foreign money to fund its deficits. A decade later—in the last years of the Reagan administration—the United States had become the largest debtor nation in history. And that was still in the good old days when American policymakers continued to harbor hopes of eventually stopping the rot. Since then, on the strength of catastrophic policy mistakes by Bush I, Bill Clinton, and Bush II, the situation has spun completely out of control.
Not to put too fine a point on it, we are witnessing probably the fastest economic implosion of any major nation in history. By comparison, the pace of Ottoman decline was gentle indeed. As measured both by its geographical reach and its relative technological sophistication, the empire probably peaked as early as the latter half of the 16th century. For a long time thereafter, its decline remained almost imperceptible, not only to its own subjects but even to well informed diplomatic observers. At least where military technology was concerned, the empire remained a first-rank power into the early decades of the 19th century. As late as 1829, it launched the Mahmudiye, which for many years held the record as the world’s largest warship. The first indisputable indication that the empire was in trouble did not come until the 1854 decision to borrow abroad. This was more than 250 years after the empire had reached its apogee. The United States “accomplished” a similarly melancholy transition from global leadership to overt financial dependency in little more than one-tenth the time.
Perhaps the most worrying aspect of America's situation is the extent to which U.S. export industries have become hollowed. One number sums up the problem: as of 2008, the last "normal" year before the global financial crisis distorted everything, the U.S. current account deficit came to 4.9 percent of GDP, up from 1.9 percent in 1989. Although full figures are not available, it seems clear that the Ottoman empire began incurring trade deficits on America's recent scale only in the final decade before the ultimate collapse.
I think the economic analysis above is flawed in some ways. Protectionism is rarely beneficial. But it is an unusual attempt at precedent-finding -- JR
When it comes to sex, pleasure and celebrity, modern Britons are so similar to the Romans - shame we don't have their sense of duty
We like to think we are the first generation to be truly modern. We pride ourselves on always ' moving forward'. Any fashion more than ten years old is dismissed or patronised as 'retro'. Yet are we really as original as we think? Is it possible that in many important ways we are moving not forwards but back, and back a long, long way?
Yes, the habits and attitudes of people in Britain today are very different from those of our grandparents, let alone those of the Victorians. But if we look a great deal further back, we may hear some strange and surprising echoes of the modern age.
For what is truly astonishing is how much our society resembles the classical world of ancient Greece and Rome, in recreation, sex, food, religion and other areas of our daily existence.
Without our being the least aware of it, the ways in which we conduct our rich and varied lives correspond, almost eerily so, to the ways in which the Greeks and Romans lived theirs.
Whether we are eating or drinking, relaxing or making love, our habits and our thoughts so often recall theirs. It is as if we have been on a long round trip. We have sailed from the harbour and seen the glimmering, misty, limitless sea and now, after 2,000 years, we are back at the jetty from where we embarked.
A modern Briton would probably feel alienated if transported back in time to the late Victorian age, with its all-pervasive Christian ethics, sexual restraints, ethnic homogeneity, disapproval of self-indulgence, and obsession with respectability.
'The Romans devoted more resources to bathhouses than to palaces or temples, just as spas have become more popular in our society than churches'
Yet the same time traveller would be far more at ease if taken back much further to the teeming, voluble world of ancient Rome, where pleasure-seeking was not tainted by sin, where the noisy streets were filled with a mass of migrant cultures, where paganism and astrology prevailed, where the human body was pampered rather than treated as a source of embarrassment.
The parallels between the classical world and our own post-Christian society, with the self - rather than God - at its centre, can be seen all around us. Even our fixation with shallow celebrities could be found in Rome.
We now have a new class of stars who have become famous simply for being famous, as exemplified by Jade Goody, a dental nurse with a saucy tongue and a rough wit, whose only real achievement was to come fourth in one series of Big Brother. Yet she exerted such a hold over the British public that her tragic early death from cancer last year prompted saturation media coverage and tributes from the Archbishop of Canterbury and the Prime Minister.
This mass mawkishness was very like the canonisation in the Roman Empire of Antinous, an obscure page from the province of Bithynia on the Black Sea, whose youthful good looks prompted the Emperor Hadrian to fall deeply in love with him - which led Antinous to become the Jade Goody of his day.
Utterly heart-broken when Antinous drowned in the River Nile in AD 130, Hadrian ordered that his beloved late companion be proclaimed a god. The Roman authorities carried out his wishes with alacrity. Within a couple of years, there was scarcely a city that had not built a temple to Antinous, put up statues to him or issued coins and medallions in his memory. As the cult spread, followers throughout the Empire attributed miracles to the departed imperial paramour.
Another ancient form of worship, the cult of the body, would strike a chord with many modern Britons. The two institutions that were central to classical culture were the public baths and the gym, just as the spa and the health club are so important to ours.
The Romans devoted more resources to bathhouses than to palaces or temples, just as spas have become more popular in our society than churches.
Today every country-house hotel, every beauty salon, every leisure centre now has a spa attached offering every kind of massage and therapy, from mud wraps to body scrubs, something the average Roman would have understood perfectly.
Where Christianity once taught that pampering was a form of sinful vanity, now the body has become a god whose every whim must be humoured.
The same is true of workouts, either in gyms or with personal trainers, a profession that barely existed 20 years ago. There are now estimated to be 5,700 public and private gyms in Britain, and we have to go back to the Greeks and Romans to find this level of frequency and intensity of physical training. Galen, the great Greek physician of the second century AD, prescribed specific exercises to strengthen the legs, arms and trunk, just like those taught by modern fitness trainers.
Yet there was a startling paradox about this obsession with the body, one that we would instantly recognise. Under the Empire, ordinary Romans were notorious couch potatoes, just as Britons today - despite all the aerobics classes - spend record amounts of time in front of the TV.
The ancient Romans flocked to the circus for all-day-long spectaculars. The only exercise they took was the early start to secure a decent seat. Crowds of 400,000 sat there from dawn to dusk, watching gladiators, chariot races and the butchery of large mammals, as utterly absorbed and inert as addicts of modern reality TV.
It is the same contradiction that can be seen in our hosting of the next Olympic Games in 2012, an event that is itself a throwback to ancient Greece. Never has so much money been spent by the Government on sport, yet never have there been greater concerns about obesity.
But perhaps the link between ancient and modern can be seen most clearly in the arena of sexual relationships. Recent decades have brought a revolution in British attitudes towards sex.
Where once we lived in a country that was renowned for its moderation, even prudishness, today we are far less inhibited. The new orthodoxy holds that passion should be enjoyed guilt-free rather than weighed down by the teachings of religious killjoys.
A modern-minded person now takes it for granted that between freely consenting adults, there must be no legal prohibitions of any sort. This mood of openness means that most newspapers and magazines have sexual advice columns, often remarkable for their range and candour. Even the august Times, which thundered during the Profumo scandal of 1963 that an affair between a call-girl and the War Minister certainly was 'a moral issue', now carries a frank section on sexual dilemmas, covering everything from female orgasms to sado-masochism.
Sex products, once hidden from public view, now represent just another branch of retail therapy. Problematic aspects of sexual relations have been removed from the hands of priests and novelists and relocated to the cool, non-judgemental atmosphere of the medical surgery or the counselling room.
The prime duty of individuals is to be true to their feelings, for 'living a lie' is now the most serious offence against the modern gospel of the self.
There need be no sense of shame if one changes partners, even abruptly, or revels in physical encounters just for their own sake.
This outlook has given rise to the modern phenomenon of the No-Strings-Attached (NSA) liaisons, which can now be easily pursued via the internet. One typical NSA website, called lovinglinks.com, claims to have no fewer than 23,000 subscribers, all of them allegedly married men and women looking purely for sexual enjoyment.
Until recently, all this would have been unthinkable in respectable British society. Yet the pragmatic, guilt-free approach is exactly in tune with the sexual mores of the ancient world. The Greeks generally regarded sex as similar to eating or drinking, pleasures to be healthily enjoyed. The same was largely true of Rome. As in our own time, there were few taboos between adults, though children were to be protected from exploitation. The poet Catullus, for instance, advocated sex with women or with boys, whichever his readers fancied at the time, because there was no such thing as right and wrong in this context.
In the same way Lucretius recommended regular one-night stands as a way of avoiding the tortures of suppressed lust. Indeed, he was an enthusiast of the No-Strings-Attached relationship and warned of the dangers of falling in love: 'To avoid the passion of love is not to deprive oneself of the joys of Venus but on the contrary to savour their delights without undergoing their exactions,' he wrote.
But how did we return full-circle to the past, adopting this relaxed, downbeat, low-expectation view of our sexual mores? I believe there are four principal forces which, linked together since the Sixties, acted as a battering ram against the demanding code of sexual morality that had prevailed since the rise of Christianity in the first Millennium.
The first was what might be termed the 'kindness revolution'. Over the centuries, the Christian doctrines on sex had hardened into a set of rules and punishments which operated with cruelty against those who strayed beyond the rigid moral boundaries, such as single mothers, homosexuals or female adulterers.
But as more humanitarian values spread through society after World War II, it came to seem increasingly intolerable and intrusive that the state and churches should presume to regulate sexual behaviour.
Second, there was the growing influence of science. Studies of the sexual behaviour of the birds and the bees show that sexual behaviour which had been labelled deviant, unnatural or immoral was commonplace in nature.
The American entomologist Alfred Kinsey switched in the Thirties from the study of Gall wasps to the study of human sexual behaviour, and his researches demonstrated that supposedly unnatural behaviour was pretty common among humans, too. The fact that Kinsey himself was a neurotic, bisexual sado-masochist who skewed his findings to fit his own desires did not lessen his role in the sexual rebellion.
Third, sex education in schools, working hand-in-hand with technological advances in contraception such as the Pill, aimed to make sex a natural, routine part of life.
It was claimed that, with deeper understanding of the mechanics of sex, young people would become more responsible. It has hardly worked out like that. Teenage pregnancy, lone parenthood, abortion and sexually transmitted diseases are all at record levels, but that has only intensified the calls for more sex education and more contraception.
Fourth, greater freedom of speech, including less censorship in everything from literature to films, helped to break down the habitual British embarrassment about sex.
We are now surrounded by explicit sexual imagery and language in a way that would have been unbelievable in the Britain of the Fifties.
As Christianity with its stern moral injunctions and its insistence on self-denial continues to fade from modern minds, so we seem to draw closer to the habits and attitudes of the ancient world with its easy acceptance of the pleasures of the senses.
But there was a crucial difference between the ancient world and modern Britain. At the peak of their grandeur, the civic culture of Athens and Rome was deeply patriotic.
The first duty of every Roman was to do his bit for the city. Roman citizens were licensed to enjoy all those delicious freedoms and material pleasures only within an overarching framework of self-restraint and patriotic service, both civil and military.
They were well aware that the survival and greatness of the city depended on nobody but themselves. When the empire began to crumble under later emperors, they blamed other people, of course - the barbarians nibbling at the frontiers, the immigrants who had failed to learn Roman ways (although both barbarians and immigrants were only too eager to become proper Romans) - but they blamed themselves, too.
They invented a new word 'romanitas' to describe all the virtues they thought they were losing.
In contemplating the agonisingly slow decline and fall of the great city, we too may want to ask the question: have we in our day regained the old liberties but lost the old vision?
Wednesday, July 14, 2010
A living city is not a work of art
This year, for the first time since 1979, New York City has revamped its subway map. A quick glance shows a change in the background tinge from light tan to light green – most pleasant. To my relief, however, on closer inspection nothing essential has changed from the last version. Thank goodness it still doesn’t look anything like the map of London’s Underground.
London’s map has been touted as the path-breaking paradigm of subway maps, the object of widespread acclaim and imitation. Indeed, most major cities’ transit systems have adopted the map’s efficient symmetry, which was created by Harry Beck back in 1931 during the heyday of high modernism.
Here it is (pdf).
It’s easy to see why it has won praise. It’s beautiful, looking like a two-dimensional version of a uranium molecule or the lattice of some fantastic crystal. The same could be said for the maps of the underground systems of Paris and Tokyo.
It’s about Usefulness
As you’ve probably already guessed, however, I don’t like it. And it’s not about aesthetics. Here’s the problem:
I’m just one person, of course (although here’s another guy who seems to agree with me), but when I’m in London I find myself constantly frustrated when I try to get from place to place using that map. The problem is that I need two maps: the Underground map to tell me how to get from, say, Paddington to Notting Hill Gate, and a street map to tell me exactly where the heck Notting Hill Gate is in relation to Paddington. The former abstracts from so much street-level detail that, unless you’re already familiar with the layout of London, the map, rather increasing the efficiency of travel via mass transit, actually makes it more cumbersome.
New York City’s subway map on the other hand, while it’s no substitute for a detailed street map if you’re looking for a particular address, at least gets you in the ball park (and I mean Camden Yards, not Comerica Park).
Have a look.
In other words, you can tell that when you exit the station at Brooklyn Bridge/City Hall in Lower Manhattan, that it’s a reasonable walk (east and a bit south) to “Ground Zero” and the former World Trade Center. The older version actually had some streets indicated, which would make navigation even easier, but it’s still less perplexing than London’s map.
Unlike the London map with its sharp angles and clean almost geologic geometry, New York’s map looks strikingly like the circulatory system of a living organism with its curves, seemingly arbitrary intersections, and uneven gaps.
The Deeper Point
In a sense, it may seem silly to criticize a map for being abstract, since, well, that’s what maps are supposed to do or else they would be useless. But there is such a thing as being too abstract. Maps should not abstract from what is essential to its purpose, which is to facilitate travel.
Part of the difference, of course, is due to the difference in the geography of London versus New York. The latter is sited on the mainland of the United States plus three islands (Long, Staten, and Manhattan). But Paris, and certainly Seattle, are also sited on islands, yet their maps are largely symmetric.
Again, it’s not just that some people prefer visual symmetry and elegance more than others, such as myself. After all, de gustibus non est disputandum. (Although, of course, the name of this column is Wabi-sabi – see my earlier post explaining the term.)
No, the deeper point is this: The unhelpful emphasis on the geometry of straight parallel lines in the case of the non-New York maps reflects, I believe, an attitude fundamentally at odds with a vigorous, dynamic city. They sacrifice useful contextual information, in the form of the messy windiness of the actual subway lines beneath the sometimes chaotic-looking streets, in favor of a certain clean Euclidean aesthetic. But as Jane Jacobs once said, a living city cannot be a work of art, the mere creation of a human mind, even if that mind is a genius. A living city is, as F. A. Hayek might describe it, “the result of human action but not of human design.”
And in trying to impose a neat, efficient, symmetrical orderliness onto what the architect Rem Koolhaas aptly termed “delirious New York,” you would pay a high price in comprehension lost. So the maps of London and the others ignore the inevitable but indispensable inefficiency and seeming chaos of a vibrant, creative city — and that’s why I don’t like them.
And, of course, I’m always getting lost when I use them.