Modern Lessons From Medieval History 5
Created | Updated Nov 26, 2011
Part 5. THE COMMON MAN ALL AT SEA
In fact any fears that young men returning from the war in most of the countries engaged in the conflict would have aquired a taste for huge crowds, hustle and bustle and habitats where technology was dominant over Nature proved largely misplaced. There were many who had thought in the Hell of war that if they should die and be buried in a foreign field they would like to feel that it would become a little corner "of a ... field" that would be “forever England”- or whatever other land that they felt rooted in. Within England that mood had already been reflected by the growth of ‘garden cities’ in the late Victorian era and, when house building eventually picked up during the inter-war period, this mood was reflected in the sprawling suburbs that sprang up around cities and towns. In fact the Great Depression that had depressed land and real estate values before 1914 had made it possible for some people like Winifred Holtby’s father to become farmers and reconnect with old-English traditions of ‘lords’ and ‘ladies’ of the manor who cared for their local communities.
OH! GIVE ME A HOME WHERE THE BUFFALO ROAM
So in many countries after 1918, both those that needed a period of recovery, and/especially those that re-emerged as newly independent modern nations in the aftermath of war, there was an urge to reconnect with the land of their ancestors through farming and the rural life. Even German Nazism grasped the mood. After the horrors of industrial warfare, people were attracted to a more natural life once more. It had been the dream of common men for a long time.
After the third great Chartist petition in 1848 the movement moderated its ambitious aims in order to run a lottery which returned working men to the land in new settlements like Charterville Allotments and Carterton, the latter now close to the little piece of "forever England" to which the fallen are repatriated. Elsewhere, in the 1860’s, many of the Russian serfs and the American slaves, who were emancipated, opted to stay on the land as free men in order to try to make a living producing the cash crops- cereals and cotton- that they had formerly produced for the benefit of their lords and masters, and after 1918 this reaction was quite widespread in all the war-torn countries. In Russia after the October Revolution soldiers rushed back from the Eastern Front inspired by Lenin’s promise of peace, bread and land. In British India the problems of those still tied into the British cotton industry now badly hit by the war and then post-war depression encouraged support for Mahatma Gandhi’s ‘khadi’ movement in favour of domestic Indian hand-produced cloth in the villages that Gandhi believed were the true India. This initial protest led Gandhi eventually to his scheme for an India of self-sufficient villages as .
But, while India was still a land of villages, Europe and more recently the USA was a land of expanding cities and towns and shrinking villages. But this was a situation in which people could hope to "make a living" of the land. The great railway construction boom had created better internal systems of transport and communication, and, by the end of the First World War, in which horse-power had still shown that it could play an important role, motorised-horse power had shown a degree of flexibility that the train could never achieve. So the classic closing scene of the films produced by the Hollywoood Dream factory in the inter-war period showed the happy couple, driving off into the sunset towards some little homestead where they were going to live happily ever after. In the 1950’s Peggy Lee reminded people of that dream. “Someday we’ll build a home on a hill top high. You and I. A cottage for two, that only we too can fill. And we’ll be proud to be called the folks who live on the hill.”
Gandhi said that “the world has enough for human need but not for human greed”. But these people did not ask to be millionaires. They asked no more than what should be the normal, the average, Dr. Thomson’s “simple rights of human beings”. William Cobbett had seen this kind of life in America, when America was still young and making its way, and he had admired the energy, self-reliance and many talents of the homesteading Americans, writing a book about how such a “cottage economy” could work. And the “New View of Society” put forward by Robert Owen led to the New Harmony experiments in New England in the 1830’s. But these ideas were based upon a New England that was still largely remote from the wider world, whereas by the 1920’s people lived in a world with global markets capable of great shifts in which the common man was a helpless pawn.
THE AGE OF THE GRAB FOR LAND
In some ways President Wilson’s Fourteen Points, addressing as they did the political developments that had led up to the First World War, with the balance of power alliances, the secret treaties, the militarization of populations and the arms race, took attention away from the underlying instabilities of this age of globalisation. Instabilities that contributed to a kind of group or even mass hysteria in the build up to 1914 and the early months of the war.
Globalisation had frustrated efforts to keep economic, social and political life at a recognisably human level: and for many people massive expressions of power were the only consolation. For a while, after the Age of Revolution had fizzled out after 1848, it had seemed that Liberal progress on a human scale might succeed the great era of centralised autocracy. ‘Reaction’ died with Revolution and even forces of conservatism like the Russian Tsars and some British Tories were prepared to accept major changes. It was a period when Cobden's world order seemed possible. In Russia the serfs were emancipated and there were various schemes of State mortgages that would eventually make it possible to own small family plots. In England the Corn Laws had finally been repealed. But such was the world demand for food that what followed was a period of High Farming with more land under cultivation and more people than ever earning a living from the land even in England. It seemed that intensive capitalised agriculture in England and intensive labour farming aimed at ‘subsistence-plus’ in less developed parts of Europe was economically worthwhile.
But these were also conditions that also made it worthwhile to create huge farms in the American mid-west, made accessible by transcontinental railways and transoceanic steamships, which also opened up Europe as a market for American and then global food and commodities. The price of wheat on the world markets collapsed in the 1870’s and English agriculture collapsed with it and a number of endemic challenges like foot and mouth disease. Doggedly Great Britain kept faith with the doctrine of free trade while hundreds of thousands of workers were forced off the land in the Great Depression in British agriculture. In keeping with Adam Smith’s “invisible hand” employers in other sections of the economy gained because a general decline in food prices meant an increase in real wages that relaxed pressures on money wages.
But real wages started to fall after 1900: and the whole question of Free Trade in a global economy where other countries, notably Germany, used tariff barriers in pursuit of national advantage, created tensions regarding both domestic and international affairs. By ‘not playing by the rules’, created by the UK, Germany was well on track towards replacing it as the number one industrial country in the world. Or perhaps it might be the USA. Or even the modernising Russian Empire which had built its own transcontinental railway throughout its own vast expanses though existing populations and land values created a somewhat different situation from that appertaining in the vast expanses of much of the Americas, Africa and Australasia.
THE UNDERMINING OF FAITH IN LIBERALISM AND FREEDOM
Serfdom and slavery had tied people and land together for centuries. The British Abolition of slavery within its Empire had prompted the Great Trek of the Boers out of Cape Colony to lands which they could continue to work with slave labour. But ten year later the "Native Princes" of India agreed to end the slave conditions of tens of millions of Indians in keeping with the spirit of Liberalism. Eventually USA fought over the right of the South to keep slaves, and the South lost. And Russia in another burst of "modernisation" finally emancipated the serfs who had still lived within a feudal system. But emancipation had broken that tie between man and the land, and as now free men they had to establish new and modern ties.
In the Russian Empire the ex-serfs were offered state mortgages with which to buy the land that they would need to live on and upon. But these were not “virgin lands” just ‘up for grabs’ at ‘dirt cheap’ prices- like much of the USA and other "newly opened" regions. Nevertheless, the Russian landowners had used the Land and Labour to grow food for export as well as domestic consumption, so the loans did not appear to be unreasonable during the Age of High Farming up to 1870. But, as international prices fell so did the earnings potential of the small-scale farmers within the Russian Empire. The mortgage terms were renegotiated and extended, but the prospect of ever paying off their mortgages became ever distant for the Russian peasantry, not even when they took up various forms of migrant work especially cramming into the cities that sprang up as Russia too started to industrialise, especially during the severe Russian winters.
In previous ages country people had used the winter seasons as times to exercise their handicrafts to make and repair things for their own needs and consumption, and as part of cottage industries making goods to sell. But this was the age of the factory and the machine production.
There was therefore a situation in Russia in which the world of the "Sickle" and the world of the "Hammer" became intimately interconnected.
The tensions of change were exacerbated by the drain of men and resources in the First World War and by military failure. In the February Revolution in 1917 the monarchy was overthrown and the attempt to create a Liberal government was undermined by Lenin’s promise that the Bolsheviks would bring “peace, bread and land”. In the subsequent October Revolution- “Ten Days That Shook The World” according to John Reed- the ‘urban proletariat’ seized the key parts of the major cities. But this was only the most visible part of a revolution in which soldiers rushed back from the front to help their families to seize the land and ‘stake their claim’, as had happened out on the American ‘frontier’.
Not that the African-American emancipated slaves in the USA had been able to benefit from that ‘grab for land’ era. Like the emancipated serfs of Russia many grasped the opportunity to just carry on with work that they were familiar with: but now they could work on their own account, if they had land. A very most common solution was ‘sharecropping’. Sharecroppers did just that. They signed contracts that they would pay off the purchase of their land by surrendering a given value of their crop. But in the joined up world there was always going to be more competition, and other places like Egypt could take up large-scale cotton growing. So sharecropping became associated with virtual slavery, for however hard African-Americans worked, like the Russian peasants, they were never going to escape the financial chains that bound them.
The First World War,however had taught new lessons of the strategic value of food production. At the same time the disruptions of war and consequent disease, produced famines and scarcities that briefly agitated Smith’s “invisible hand as global prices for the produce of the land rose to unprecedented levels.
Briefly it really did seem that the War would be followed by a period in which farming would be profitable, especially because hard won lessons about the new potential of science and technology learned during the war, seemed to encourage the small-business farmer, who could now outproduce the subsistence peasant/smallholder. Between 1925 and 1930 US exports of tractors averaged about 50,000 a year bringing mechanization to even quite small farms around the world. But, perhaps equally significantly for the small farmer, exports of US Combine-Harvesters rose consistently from 1,720 in 1925 to 10,887 in 1929, followed by a 40% fall in 1930.
These figures are given by Stephen King-Hall in his 1935 study “Our Own Times” and he also shows the cause and effect of this mechanisation which the USA was sharing with the wider world.
Taking 1867-77 as a base line 100 for the global price of the foodstuffs, materials and commodities, the investment that opened up the world before the war had brought about a fall in the respective price-indexes in 1913 to 77, 91 and 85. But from 1913 they increased rapidly during the war and afterwards, peaking in 1920 at 234, 264 and 251. Such high Demand encouraged people to increase Supply
But the state of world commodities markets had moved on from the days when the Medici came to purchase English wool ten years in advance. With global prices like these throughout much of the White Dominions of British Empire, where people had also emigrated in order to stay on the land, and throughout the newly independent states of Eastern Europe, freed from the heavy hand of old Imperial bureaucracies, many people shared the same dream.
But the problem of the small or undercapitalised producer is always the same. In years of good harvest everyone has plenty and the market is flooded with Supply so the market price collapses, and income with it. In bad years, scarcity drives the price up, but the homesteader may need most of the crop to feed his family. As for a family’s other needs and charges, even when kept at a minimum even things like taxes, essential repairs, medical expenses and schooling, let alone expenses like weddings and funerals, might mean borrowing money: and by definition the logic of banking and finance argues that those with the most uncertain capacity to repay must pay higher rates of interest.
With the benefit of Hindsight it is hardly surprising that there was a global move into the production of goods that were like a windfall of a bounty of Nature now that Humankind had apparently acquired the power to harness her. But the decline from the high prices of 1920 was surely to be anticipated once normal times returned. By 1929 prices were half of their 1920 levels and in 1930 they fell down to 96-97. Moreover, within those general categories some items suffered much more than the average. Wheat production, for example, stayed slightly above 1925 levels down to 1931, with 1928 and 1930 being good years quantitatively. But the price and therefore the revenue of the farmers in 1931 was only 32 % of that of 1925. Cane sugar was a similar story, the 1931 price being 41%. Cotton was down to 36% and Petroleum 46%.
It was a desperate situation for large-scale producers and for States and politicians. But in many ways the homestead farmer, who may had hoped to realise that “stop the world I want to get off” dream, was particularly vulnerable. With the collapse in the market price he and all other producers initially tried to compensate for lower unit returns by increasing production. Like the handloom weaver of the 1830’s competing with machine production he tried working every hour God gave. But, though Humankind had mastered the Malthusian problem of producing enough for human needs, it was almost impossible to earn a living doing so.
One of the government strategies that attempted to tackle the situation involved trying to manipulate the laws of economics by creating limits and controls on production hoping to push up the market price. But the lack of a clear and direct relationship between the quantity of Supply and the Price was shown by the fact that in the crop year of 1929-30, when the catastrophic fall in wheat prices began the world’s crop was actually 12.8 % smaller than the previous year. It is no wonder that people began to think that the laws of nature no longer applied and things were moving towards a state of World Chaos.
Moreover, though people on the land producing food, materials and commodities suffered on average 10% greater falls in market price than was the case for industrial goods, prices for industrial goods fell too. Prices of raw materials were going down and the people producing from the land did not have the money to create effective demand. With industrial prices falling, existing stocks became an embarrassment because potential buyers waited for the lowest price. In America especially, the land and the people were worked to exhaustion and soils became worthless and useless. Oaklahoma suffered a particularly devastating dust-bowls. And here and there he cycle of debt just dragged families down and down, as John Steinbeck recorded in his novel “The Grapes of Wrath”. As his novels recorded in the USA as in many other regions people turned in desperation to the political extremities and away from Liberalism and Freedom.
TO A GOD UNKNOWN
The works of John Steinbeck often drew on themes from the Bible and it was very easy during the World Chaos of the thirties to believe that all the laws of the Creator had ceased to operate, and perhaps the God that Christans thought that they knew something about was indeed a God-unknown. But for some time the Christian properties of Western Civilization that had created some kind of fellow-feeling, a sense of sticking together in spite of everything, in the era of Medieval Christendom had been fading into the background. Writing in 1935 Stephen King-Hall said of the age down to 1914: “It was clear at the beginning of the twentieth century that the climax, the triumph of the western way of life, had arrived.” Then he proceeded to chart the state of its world domination noting that the Chinese had just thrown over the Manchu dynasty [1911] “because of its palpable inability to resist the pressure of western civilization”. What choice did they have? “The young Chinese had in front of their eyes the example of Japan which had only succeeded in avoiding the acquisitive belly of western civilization by a process of hasty westernization, which provided her with a set of sharp teeth in the shape of a navy (made in Great Britain) and an army (made in Germany)” (page 7)
What western civilisation seemed to be offering was the solution of the fundamental problem of how to produce the wealth man needs- “for the feeding, clothing and housing of his body.. always..the first duty and primary anxiety of man. As a means to the end of material production western civilization had no rivals. It conquered nature and harnessed natural forces to its purposes. It was a dynamic and virile system infected with a reckless urge called progress. It could not leave well alone, for there was never a better that could not be best. It was a competitive and pugnacious civilization as befitted something that was parvenu compared to those of India and China…To the West the means were so important that they often overshadowed the ends. It was because the West sought wealth by taming nature, that mistress mankind had vainly wooed through centuries, and served with endless toil for niggardly rewards, that the forces of the West, as they moved restlessly across the oceans, the forests, plains and deserts of the earth and cast bold and covetous gaze upon the still unconquered skies, left by their passage an imprint that was mainly economic.” (page 8)
In fact, as Steven Watson points out in his Oxford History of the reign of George III, Adam Smith's advocacy of free market forces was based upon the apparent stability of the period just before the Age of Revolution, and he did not envisage that some relaxation of the State controls would have revolutionary consequences. As C.R. Fay explained in his own tribute to Adam Smith, his work owed a great deal to the thinking of political economist friends in France, the kind of men who tried to create limited monarchy in France in 1789.
But Kenneth Clark wrote that "The reasonable world of an eighteenth-century library is symmeterical, consistent and enclosed" (page 293) and increasingly the genteel and courtly life of this age was shaped and informed by books. Lord Clark uses this to set the scene walking out from a formal Library to face storm waves breaking on a rocky shore. " And what is that I hear- that note of urgency, of indignation, of spiritual hunger. Beethoven. The sound of European man once more reaching for something beyond his grasp. We must leave the trim, finite interiors of the eighteenth century classicism and go to confront the infinite. We have a long rough voyage ahead of us, and I cannot say where it will end , because we are still the offspring of the Romantic movement, and still the victims of the Fallacies of Hope". (page 293)
The "long rough voyage" that Lord Clark went on to take his viewers through was one most successfully navigated by Britain and the USA where, as has been explained previously, the existing "ruling classes" managed to preserve the marriage of legitimacy and wealth. The USA focussed on trying exert a controlling influence in its own hemisphere, while Great Britain adjusted to its global outreach and responsibilities. And "storm clouds" were gathering during the 1860's. During the Horsley-Palmer period as Governor of the Bank of England in the 1870’s it became established that the "Old Lady of Threadneedle Street" did not exist to make a profit at all, but to serve the British Crown and more especially to meet the needs of the global financial system for ,with trade cycles and ‘boom and bust’, it needed a constant and steady hand on the helm. But Britain's power to Rule the Waves became ever more important psychologically in the years before 1914, as it was apparent that other powers had greater economic and military strength. Germany seemed "set fair" to replace Britain in world affairs sooner or later.
But the First World War shattered the power of both Britain and Germany, while the Treaty of Versailles made recovery even more difficult. In his best-selling criticism of the Peace of Versailles J.M. Keynes warned of the dangers of breaking up the ‘joined-up’ central European economic system that nineteenth century Germany had created. For Germany had become the great engine of economic progress behind protective tariffs, and now vital parts of that "engine" were to be dismantled or disconnected- like the return of Alsace and Lorraine, with their heavy industries back to France. Moreover German wealth was to be handed over in massive reparations- a redistribution of wealth that was bound to distort societies where the link between income and work was no longer clear and direct. And the de-militarisation with an emphasis on heavy weapons and fleets had direct consequences for the great heavy industrial regions which had specialised in arms production. And with all of this the Bank of England was no longer able to stabilise the global system and dampen down its fluctuations through its "open market operations" buying and selling gold bullion. The gold reserves had been handed over to the USA to pay for goods needed for the war effort.
It had taken centuries for the London stock market and the Bank of England to develop its experience and expertise from the South Sea Bubble collapse two hundred years before the Wall Street Crash of 1929. But, as Harold Nicholson got intro trouble for saying on a visit to Dublin during the Second World War in the hope of placating Irish opinion, after 1918 Great Britain was no longer the majestic Lion, King of the Beasts, and lord of all it surveyed, it was a rather old, moth-eaten creature.
LOOKING AROUND FOR THE US CAVALRY
To Americans the USA was still "the New World" essentially a land of opportunity and individualism, in either case not a land of ‘sticking together’ in the same tradition as that of England. The US Constitution had been inspired by the works of the French philosopher Montesquieu, who suggested that the kind of legal power that had been a feature of the French State since Saint Louis could and should be prevented by a system of checks and balance of power.
Such considerations hardly seemed to matter during the “Roaring Twenties”,after some chronic post-war challenges had been dealt with. All the movement seemed to be going in the same direction and even office boys and lift attendants speculated in the stock market hoping to make a quick fortune. But much of that optimism was ill-founded. Take for example those figures for the exports of combine-harvesters and tractors. Obviously there was a market for such machines as part of the general post-war recovery. But this was not yet the age of built-in obsolescence. They were built to stand up to vigorous use and by the late twenties the world had enough such machines to meet its needs.
In fact the pace of post-war recovery is often quite misleading, as in the figures for German reconstruction during the mid-twenties. Germany had been a leading industrial power in 1914 and, once the reparations issue, and the whole question of the capitalization of its recovery had been settled, the German economy revealed the inherent strength. As for the gold, during the twenties the USA loaned the gold to Germany so that they could give it to France to settle the reparations question. The French just stuffed it in their vaults as rightfully theirs as reparations. There was no real "hand on the tiller".
When the challenge of the Wall Street Crash arrived and the beginnings of the Great Depression the American equivalent of country banks found themselves with massive problems of bad debt. People who had borrowed money could not afford to pay interest rates on terms that had been fixed in earlier more hopeful times, and the real-estate if repossessed was invariably run down and exhausted as the result of the long struggle to keep the farm or other enterprise going. In any case there was no Demand for such property, not least because the situation in the cities and industrial areas was almost as bad. For surely if the Western Civilization that replaced Christian Civilization was “a dynamic and virile system infected with a reckless urge called progress. A competitive and pugnacious civilization as befitted something that was parvenu” it was especially because of the central role of cities, great centres of power and potential for good or evil. And,as the cities of the USA, like that emblematic New York, settled into their role as the new face of the future, the schizophrenic nature of the City made for instability, the instability of things built very fast on uncertain foundations.
But this all created the conditions of sheer panic on Black Friday of the Wall Street Crash when values tumbled. Friday was the last day of trading before the week-end closure. What would happen over the next two days? Panic selling set in and became more or less hysterical. The “Great Crash” sent shock waves around the world as it plunged into World Chaos and the Great Depression.”. “We have nothing to fear but fear its self”. A new President Roosevelt tried to rally the American people and the New Deal programmes did help to produce some recovery.
But the economic problems of the 1930’s were only really resolved in the Second World War. Resolved only it seems to re-emerge in the financial crisis of 2008 and the subsequent economic crises in the global economy. But by this time a world that had become accustomed to looking to the USA for leadership had begun to move away from ‘New World” values towards ‘Old World’ ones. So, near the end of a TV series entitled “New Europe” in which Michael Palin toured through those re-born countries of Eastern Europe, he met Eugenia Tymoshenko, the daughter of the leader of the Democratic Party and a former Prime Minister of the Ukraine since the Orange Revolution.
Eugenia had been sent by her parents to be educated at Rugby School. Perhaps Mr. Palin had his own reasons for omitting from the book of the series Eugenia’s observation that she was amazed at how little Britain seemed to value such places. To her mind they have so much to offer in helping those countries with no tradition of parliamentary democracy. Nevertheless Mr. Palin ended the series with the observation: “I’ve seen a new Europe these past five months, a Europe which could be united, for the first time in history, by co-operation rather than conflict. If it happens, and the signs are hopeful, it will be a mighty achievement” (page 285)
In fact any fears that young men returning from the war in most of the countries engaged in the conflict would have aquired a taste for huge crowds, hustle and bustle and habitats where technology was dominant over Nature proved largely misplaced. There were many who had thought in the Hell of war that if they should die and be buried in a foreign field they would like to feel that it would become a little corner "of a ... field" that would be “forever England”- or whatever other land that they felt rooted in. Within England that mood had already been reflected by the growth of ‘garden cities’ in the late Victorian era and, when house building eventually picked up during the inter-war period, this mood was reflected in the sprawling suburbs that sprang up around cities and towns. In fact the Great Depression that had depressed land and real estate values before 1914 had made it possible for some people like Winifred Holtby’s father to become farmers and reconnect with old-English traditions of ‘lords’ and ‘ladies’ of the manor who cared for their local communities.
OH! GIVE ME A HOME WHERE THE BUFFALO ROAM
So in many countries after 1918, both those that needed a period of recovery, and/especially those that re-emerged as newly independent modern nations in the aftermath of war, there was an urge to reconnect with the land of their ancestors through farming and the rural life. Even German Nazism grasped the mood. After the horrors of industrial warfare, people were attracted to a more natural life once more. It had been the dream of common men for a long time.
After the third great Chartist petition in 1848 the movement moderated its ambitious aims in order to run a lottery which returned working men to the land in new settlements like Charterville Allotments and Carterton, the latter now close to the little piece of "forever England" to which the fallen are repatriated. Elsewhere, in the 1860’s, many of the Russian serfs and the American slaves, who were emancipated, opted to stay on the land as free men in order to try to make a living producing the cash crops- cereals and cotton- that they had formerly produced for the benefit of their lords and masters, and after 1918 this reaction was quite widespread in all the war-torn countries. In Russia after the October Revolution soldiers rushed back from the Eastern Front inspired by Lenin’s promise of peace, bread and land. In British India the problems of those still tied into the British cotton industry now badly hit by the war and then post-war depression encouraged support for Mahatma Gandhi’s ‘khadi’ movement in favour of domestic Indian hand-produced cloth in the villages that Gandhi believed were the true India. This initial protest led Gandhi eventually to his scheme for an India of self-sufficient villages as .
But, while India was still a land of villages, Europe and more recently the USA was a land of expanding cities and towns and shrinking villages. But this was a situation in which people could hope to "make a living" of the land. The great railway construction boom had created better internal systems of transport and communication, and, by the end of the First World War, in which horse-power had still shown that it could play an important role, motorised-horse power had shown a degree of flexibility that the train could never achieve. So the classic closing scene of the films produced by the Hollywoood Dream factory in the inter-war period showed the happy couple, driving off into the sunset towards some little homestead where they were going to live happily ever after. In the 1950’s Peggy Lee reminded people of that dream. “Someday we’ll build a home on a hill top high. You and I. A cottage for two, that only we too can fill. And we’ll be proud to be called the folks who live on the hill.”
Gandhi said that “the world has enough for human need but not for human greed”. But these people did not ask to be millionaires. They asked no more than what should be the normal, the average, Dr. Thomson’s “simple rights of human beings”. William Cobbett had seen this kind of life in America, when America was still young and making its way, and he had admired the energy, self-reliance and many talents of the homesteading Americans, writing a book about how such a “cottage economy” could work. And the “New View of Society” put forward by Robert Owen led to the New Harmony experiments in New England in the 1830’s. But these ideas were based upon a New England that was still largely remote from the wider world, whereas by the 1920’s people lived in a world with global markets capable of great shifts in which the common man was a helpless pawn.
THE AGE OF THE GRAB FOR LAND
In some ways President Wilson’s Fourteen Points, addressing as they did the political developments that had led up to the First World War, with the balance of power alliances, the secret treaties, the militarization of populations and the arms race, took attention away from the underlying instabilities of this age of globalisation. Instabilities that contributed to a kind of group or even mass hysteria in the build up to 1914 and the early months of the war.
Globalisation had frustrated efforts to keep economic, social and political life at a recognisably human level: and for many people massive expressions of power were the only consolation. For a while, after the Age of Revolution had fizzled out after 1848, it had seemed that Liberal progress on a human scale might succeed the great era of centralised autocracy. ‘Reaction’ died with Revolution and even forces of conservatism like the Russian Tsars and some British Tories were prepared to accept major changes. It was a period when Cobden's world order seemed possible. In Russia the serfs were emancipated and there were various schemes of State mortgages that would eventually make it possible to own small family plots. In England the Corn Laws had finally been repealed. But such was the world demand for food that what followed was a period of High Farming with more land under cultivation and more people than ever earning a living from the land even in England. It seemed that intensive capitalised agriculture in England and intensive labour farming aimed at ‘subsistence-plus’ in less developed parts of Europe was economically worthwhile.
But these were also conditions that also made it worthwhile to create huge farms in the American mid-west, made accessible by transcontinental railways and transoceanic steamships, which also opened up Europe as a market for American and then global food and commodities. The price of wheat on the world markets collapsed in the 1870’s and English agriculture collapsed with it and a number of endemic challenges like foot and mouth disease. Doggedly Great Britain kept faith with the doctrine of free trade while hundreds of thousands of workers were forced off the land in the Great Depression in British agriculture. In keeping with Adam Smith’s “invisible hand” employers in other sections of the economy gained because a general decline in food prices meant an increase in real wages that relaxed pressures on money wages.
But real wages started to fall after 1900: and the whole question of Free Trade in a global economy where other countries, notably Germany, used tariff barriers in pursuit of national advantage, created tensions regarding both domestic and international affairs. By ‘not playing by the rules’, created by the UK, Germany was well on track towards replacing it as the number one industrial country in the world. Or perhaps it might be the USA. Or even the modernising Russian Empire which had built its own transcontinental railway throughout its own vast expanses though existing populations and land values created a somewhat different situation from that appertaining in the vast expanses of much of the Americas, Africa and Australasia.
THE UNDERMINING OF FAITH IN LIBERALISM AND FREEDOM
Serfdom and slavery had tied people and land together for centuries. The British Abolition of slavery within its Empire had prompted the Great Trek of the Boers out of Cape Colony to lands which they could continue to work with slave labour. But ten year later the "Native Princes" of India agreed to end the slave conditions of tens of millions of Indians in keeping with the spirit of Liberalism. Eventually USA fought over the right of the South to keep slaves, and the South lost. And Russia in another burst of "modernisation" finally emancipated the serfs who had still lived within a feudal system. But emancipation had broken that tie between man and the land, and as now free men they had to establish new and modern ties.
In the Russian Empire the ex-serfs were offered state mortgages with which to buy the land that they would need to live on and upon. But these were not “virgin lands” just ‘up for grabs’ at ‘dirt cheap’ prices- like much of the USA and other "newly opened" regions. Nevertheless, the Russian landowners had used the Land and Labour to grow food for export as well as domestic consumption, so the loans did not appear to be unreasonable during the Age of High Farming up to 1870. But, as international prices fell so did the earnings potential of the small-scale farmers within the Russian Empire. The mortgage terms were renegotiated and extended, but the prospect of ever paying off their mortgages became ever distant for the Russian peasantry, not even when they took up various forms of migrant work especially cramming into the cities that sprang up as Russia too started to industrialise, especially during the severe Russian winters.
In previous ages country people had used the winter seasons as times to exercise their handicrafts to make and repair things for their own needs and consumption, and as part of cottage industries making goods to sell. But this was the age of the factory and the machine production.
There was therefore a situation in Russia in which the world of the "Sickle" and the world of the "Hammer" became intimately interconnected.
The tensions of change were exacerbated by the drain of men and resources in the First World War and by military failure. In the February Revolution in 1917 the monarchy was overthrown and the attempt to create a Liberal government was undermined by Lenin’s promise that the Bolsheviks would bring “peace, bread and land”. In the subsequent October Revolution- “Ten Days That Shook The World” according to John Reed- the ‘urban proletariat’ seized the key parts of the major cities. But this was only the most visible part of a revolution in which soldiers rushed back from the front to help their families to seize the land and ‘stake their claim’, as had happened out on the American ‘frontier’.
Not that the African-American emancipated slaves in the USA had been able to benefit from that ‘grab for land’ era. Like the emancipated serfs of Russia many grasped the opportunity to just carry on with work that they were familiar with: but now they could work on their own account, if they had land. A very most common solution was ‘sharecropping’. Sharecroppers did just that. They signed contracts that they would pay off the purchase of their land by surrendering a given value of their crop. But in the joined up world there was always going to be more competition, and other places like Egypt could take up large-scale cotton growing. So sharecropping became associated with virtual slavery, for however hard African-Americans worked, like the Russian peasants, they were never going to escape the financial chains that bound them.
The First World War,however had taught new lessons of the strategic value of food production. At the same time the disruptions of war and consequent disease, produced famines and scarcities that briefly agitated Smith’s “invisible hand as global prices for the produce of the land rose to unprecedented levels.
Briefly it really did seem that the War would be followed by a period in which farming would be profitable, especially because hard won lessons about the new potential of science and technology learned during the war, seemed to encourage the small-business farmer, who could now outproduce the subsistence peasant/smallholder. Between 1925 and 1930 US exports of tractors averaged about 50,000 a year bringing mechanization to even quite small farms around the world. But, perhaps equally significantly for the small farmer, exports of US Combine-Harvesters rose consistently from 1,720 in 1925 to 10,887 in 1929, followed by a 40% fall in 1930.
These figures are given by Stephen King-Hall in his 1935 study “Our Own Times” and he also shows the cause and effect of this mechanisation which the USA was sharing with the wider world.
Taking 1867-77 as a base line 100 for the global price of the foodstuffs, materials and commodities, the investment that opened up the world before the war had brought about a fall in the respective price-indexes in 1913 to 77, 91 and 85. But from 1913 they increased rapidly during the war and afterwards, peaking in 1920 at 234, 264 and 251. Such high Demand encouraged people to increase Supply
But the state of world commodities markets had moved on from the days when the Medici came to purchase English wool ten years in advance. With global prices like these throughout much of the White Dominions of British Empire, where people had also emigrated in order to stay on the land, and throughout the newly independent states of Eastern Europe, freed from the heavy hand of old Imperial bureaucracies, many people shared the same dream.
But the problem of the small or undercapitalised producer is always the same. In years of good harvest everyone has plenty and the market is flooded with Supply so the market price collapses, and income with it. In bad years, scarcity drives the price up, but the homesteader may need most of the crop to feed his family. As for a family’s other needs and charges, even when kept at a minimum even things like taxes, essential repairs, medical expenses and schooling, let alone expenses like weddings and funerals, might mean borrowing money: and by definition the logic of banking and finance argues that those with the most uncertain capacity to repay must pay higher rates of interest.
With the benefit of Hindsight it is hardly surprising that there was a global move into the production of goods that were like a windfall of a bounty of Nature now that Humankind had apparently acquired the power to harness her. But the decline from the high prices of 1920 was surely to be anticipated once normal times returned. By 1929 prices were half of their 1920 levels and in 1930 they fell down to 96-97. Moreover, within those general categories some items suffered much more than the average. Wheat production, for example, stayed slightly above 1925 levels down to 1931, with 1928 and 1930 being good years quantitatively. But the price and therefore the revenue of the farmers in 1931 was only 32 % of that of 1925. Cane sugar was a similar story, the 1931 price being 41%. Cotton was down to 36% and Petroleum 46%.
It was a desperate situation for large-scale producers and for States and politicians. But in many ways the homestead farmer, who may had hoped to realise that “stop the world I want to get off” dream, was particularly vulnerable. With the collapse in the market price he and all other producers initially tried to compensate for lower unit returns by increasing production. Like the handloom weaver of the 1830’s competing with machine production he tried working every hour God gave. But, though Humankind had mastered the Malthusian problem of producing enough for human needs, it was almost impossible to earn a living doing so.
One of the government strategies that attempted to tackle the situation involved trying to manipulate the laws of economics by creating limits and controls on production hoping to push up the market price. But the lack of a clear and direct relationship between the quantity of Supply and the Price was shown by the fact that in the crop year of 1929-30, when the catastrophic fall in wheat prices began the world’s crop was actually 12.8 % smaller than the previous year. It is no wonder that people began to think that the laws of nature no longer applied and things were moving towards a state of World Chaos.
Moreover, though people on the land producing food, materials and commodities suffered on average 10% greater falls in market price than was the case for industrial goods, prices for industrial goods fell too. Prices of raw materials were going down and the people producing from the land did not have the money to create effective demand. With industrial prices falling, existing stocks became an embarrassment because potential buyers waited for the lowest price. In America especially, the land and the people were worked to exhaustion and soils became worthless and useless. Oaklahoma suffered a particularly devastating dust-bowls. And here and there he cycle of debt just dragged families down and down, as John Steinbeck recorded in his novel “The Grapes of Wrath”. As his novels recorded in the USA as in many other regions people turned in desperation to the political extremities and away from Liberalism and Freedom.
TO A GOD UNKNOWN
The works of John Steinbeck often drew on themes from the Bible and it was very easy during the World Chaos of the thirties to believe that all the laws of the Creator had ceased to operate, and perhaps the God that Christans thought that they knew something about was indeed a God-unknown. But for some time the Christian properties of Western Civilization that had created some kind of fellow-feeling, a sense of sticking together in spite of everything, in the era of Medieval Christendom had been fading into the background. Writing in 1935 Stephen King-Hall said of the age down to 1914: “It was clear at the beginning of the twentieth century that the climax, the triumph of the western way of life, had arrived.” Then he proceeded to chart the state of its world domination noting that the Chinese had just thrown over the Manchu dynasty [1911] “because of its palpable inability to resist the pressure of western civilization”. What choice did they have? “The young Chinese had in front of their eyes the example of Japan which had only succeeded in avoiding the acquisitive belly of western civilization by a process of hasty westernization, which provided her with a set of sharp teeth in the shape of a navy (made in Great Britain) and an army (made in Germany)” (page 7)
What western civilisation seemed to be offering was the solution of the fundamental problem of how to produce the wealth man needs- “for the feeding, clothing and housing of his body.. always..the first duty and primary anxiety of man. As a means to the end of material production western civilization had no rivals. It conquered nature and harnessed natural forces to its purposes. It was a dynamic and virile system infected with a reckless urge called progress. It could not leave well alone, for there was never a better that could not be best. It was a competitive and pugnacious civilization as befitted something that was parvenu compared to those of India and China…To the West the means were so important that they often overshadowed the ends. It was because the West sought wealth by taming nature, that mistress mankind had vainly wooed through centuries, and served with endless toil for niggardly rewards, that the forces of the West, as they moved restlessly across the oceans, the forests, plains and deserts of the earth and cast bold and covetous gaze upon the still unconquered skies, left by their passage an imprint that was mainly economic.” (page 8)
In fact, as Steven Watson points out in his Oxford History of the reign of George III, Adam Smith's advocacy of free market forces was based upon the apparent stability of the period just before the Age of Revolution, and he did not envisage that some relaxation of the State controls would have revolutionary consequences. As C.R. Fay explained in his own tribute to Adam Smith, his work owed a great deal to the thinking of political economist friends in France, the kind of men who tried to create limited monarchy in France in 1789.
But Kenneth Clark wrote that "The reasonable world of an eighteenth-century library is symmeterical, consistent and enclosed" (page 293) and increasingly the genteel and courtly life of this age was shaped and informed by books. Lord Clark uses this to set the scene walking out from a formal Library to face storm waves breaking on a rocky shore. " And what is that I hear- that note of urgency, of indignation, of spiritual hunger. Beethoven. The sound of European man once more reaching for something beyond his grasp. We must leave the trim, finite interiors of the eighteenth century classicism and go to confront the infinite. We have a long rough voyage ahead of us, and I cannot say where it will end , because we are still the offspring of the Romantic movement, and still the victims of the Fallacies of Hope". (page 293)
The "long rough voyage" that Lord Clark went on to take his viewers through was one most successfully navigated by Britain and the USA where, as has been explained previously, the existing "ruling classes" managed to preserve the marriage of legitimacy and wealth. The USA focussed on trying exert a controlling influence in its own hemisphere, while Great Britain adjusted to its global outreach and responsibilities. And "storm clouds" were gathering during the 1860's. During the Horsley-Palmer period as Governor of the Bank of England in the 1870’s it became established that the "Old Lady of Threadneedle Street" did not exist to make a profit at all, but to serve the British Crown and more especially to meet the needs of the global financial system for ,with trade cycles and ‘boom and bust’, it needed a constant and steady hand on the helm. But Britain's power to Rule the Waves became ever more important psychologically in the years before 1914, as it was apparent that other powers had greater economic and military strength. Germany seemed "set fair" to replace Britain in world affairs sooner or later.
But the First World War shattered the power of both Britain and Germany, while the Treaty of Versailles made recovery even more difficult. In his best-selling criticism of the Peace of Versailles J.M. Keynes warned of the dangers of breaking up the ‘joined-up’ central European economic system that nineteenth century Germany had created. For Germany had become the great engine of economic progress behind protective tariffs, and now vital parts of that "engine" were to be dismantled or disconnected- like the return of Alsace and Lorraine, with their heavy industries back to France. Moreover German wealth was to be handed over in massive reparations- a redistribution of wealth that was bound to distort societies where the link between income and work was no longer clear and direct. And the de-militarisation with an emphasis on heavy weapons and fleets had direct consequences for the great heavy industrial regions which had specialised in arms production. And with all of this the Bank of England was no longer able to stabilise the global system and dampen down its fluctuations through its "open market operations" buying and selling gold bullion. The gold reserves had been handed over to the USA to pay for goods needed for the war effort.
It had taken centuries for the London stock market and the Bank of England to develop its experience and expertise from the South Sea Bubble collapse two hundred years before the Wall Street Crash of 1929. But, as Harold Nicholson got intro trouble for saying on a visit to Dublin during the Second World War in the hope of placating Irish opinion, after 1918 Great Britain was no longer the majestic Lion, King of the Beasts, and lord of all it surveyed, it was a rather old, moth-eaten creature.
LOOKING AROUND FOR THE US CAVALRY
To Americans the USA was still "the New World" essentially a land of opportunity and individualism, in either case not a land of ‘sticking together’ in the same tradition as that of England. The US Constitution had been inspired by the works of the French philosopher Montesquieu, who suggested that the kind of legal power that had been a feature of the French State since Saint Louis could and should be prevented by a system of checks and balance of power.
Such considerations hardly seemed to matter during the “Roaring Twenties”,after some chronic post-war challenges had been dealt with. All the movement seemed to be going in the same direction and even office boys and lift attendants speculated in the stock market hoping to make a quick fortune. But much of that optimism was ill-founded. Take for example those figures for the exports of combine-harvesters and tractors. Obviously there was a market for such machines as part of the general post-war recovery. But this was not yet the age of built-in obsolescence. They were built to stand up to vigorous use and by the late twenties the world had enough such machines to meet its needs.
In fact the pace of post-war recovery is often quite misleading, as in the figures for German reconstruction during the mid-twenties. Germany had been a leading industrial power in 1914 and, once the reparations issue, and the whole question of the capitalization of its recovery had been settled, the German economy revealed the inherent strength. As for the gold, during the twenties the USA loaned the gold to Germany so that they could give it to France to settle the reparations question. The French just stuffed it in their vaults as rightfully theirs as reparations. There was no real "hand on the tiller".
When the challenge of the Wall Street Crash arrived and the beginnings of the Great Depression the American equivalent of country banks found themselves with massive problems of bad debt. People who had borrowed money could not afford to pay interest rates on terms that had been fixed in earlier more hopeful times, and the real-estate if repossessed was invariably run down and exhausted as the result of the long struggle to keep the farm or other enterprise going. In any case there was no Demand for such property, not least because the situation in the cities and industrial areas was almost as bad. For surely if the Western Civilization that replaced Christian Civilization was “a dynamic and virile system infected with a reckless urge called progress. A competitive and pugnacious civilization as befitted something that was parvenu” it was especially because of the central role of cities, great centres of power and potential for good or evil. And,as the cities of the USA, like that emblematic New York, settled into their role as the new face of the future, the schizophrenic nature of the City made for instability, the instability of things built very fast on uncertain foundations.
But this all created the conditions of sheer panic on Black Friday of the Wall Street Crash when values tumbled. Friday was the last day of trading before the week-end closure. What would happen over the next two days? Panic selling set in and became more or less hysterical. The “Great Crash” sent shock waves around the world as it plunged into World Chaos and the Great Depression.”. “We have nothing to fear but fear its self”. A new President Roosevelt tried to rally the American people and the New Deal programmes did help to produce some recovery.
But the economic problems of the 1930’s were only really resolved in the Second World War. Resolved only it seems to re-emerge in the financial crisis of 2008 and the subsequent economic crises in the global economy. But by this time a world that had become accustomed to looking to the USA for leadership had begun to move away from ‘New World” values towards ‘Old World’ ones. So, near the end of a TV series entitled “New Europe” in which Michael Palin toured through those re-born countries of Eastern Europe, he met Eugenia Tymoshenko, the daughter of the leader of the Democratic Party and a former Prime Minister of the Ukraine since the Orange Revolution.
Eugenia had been sent by her parents to be educated at Rugby School. Perhaps Mr. Palin had his own reasons for omitting from the book of the series Eugenia’s observation that she was amazed at how little Britain seemed to value such places. To her mind they have so much to offer in helping those countries with no tradition of parliamentary democracy. Nevertheless Mr. Palin ended the series with the observation: “I’ve seen a new Europe these past five months, a Europe which could be united, for the first time in history, by co-operation rather than conflict. If it happens, and the signs are hopeful, it will be a mighty achievement” (page 285)
