The New Empire of Debt: The Rise and Fall of an Epic Financial Bubble by Addison Wiggin, William Bonner, Agora Page B
Tags: Economics, Finance, Economic Conditions, Professional & Technical, Business & Money, Investing, Accounting & Finance
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beauty of it was that you couldn’t. There were two separate parliaments and two separate prime ministers along with a collection of archdukes of various talents and responsibilities. In theory, the one royal house—the Habsburgs—had absolute power over the central administration—particularly the military. In practice, they could do little or nothing; they had no money. Occasionally a forceful edict would issue from the government, such as the April 5, 1897, proclamation from the Austrian prime minister, Kasimir Felix Graf von Badeni that permitted the use of the Czech language, along with German, in Bohemia. The ordinance caused so much trouble that poor Badeni was tossed out and Czech was more suppressed than before. Henceforth, Czech newspapers would have to be printed in German!
Despite these annoyances, the empire was a modest success. It was largely peaceful and prosperous. Between 1870 and 1913, GDP per capita rose at an annual rate of 1.45 percent, which was faster than the rate in Britain or France, and almost as fast as in Germany.
But the imperial family had a bad habit of attracting trouble. Emperor Franz Josef’s only son died under circumstances that are still considered mysterious. His brother had the bad judgment to meddle in the affairs of Mexico and died in front of a firing squad. And, finally, his nephew and heir, the Archduke Franz Ferdinand, had the misfortune to visit Sarajevo in 1914 at the very moment when Bosnian nationalists were gunning for him; he even wore a hat with a huge ostrich plume so they would be sure not to miss.
THE MAKING OF AN EMPIRE
When did Rome become an empire? Historians look for a particular moment, even a natural, physical boundary—such as when Caesar crossed the Rubicon—to mark the end of one period and the beginning of the next. No such simple marker exists, however, between empire and other forms of government. Nor does any precise boundary exist between democracy and, say, theocracy or dictatorship. Governments are categorized artificially and often arbitrarily on the basis of theories—usually fraudulent ones. It is often said that democracies depend on the consent of the governed, whereas dictatorships and monarchies do not. A moment’s reflection, even by a professor of government, would reveal the lie. All systems of government depend on some measure of complicity.
“Given the very small number and insignificant presence of imperial agents and municipal officials to insure obedience to the state,” explains Ramsay MacMullen in his Corruption and the Decline of Rome, “millionaires, magnates, and other local notables of all sorts must have cooperated, and from their own free will.” 11 It doesn’t matter whether you call a political society free, a democracy, a dictatorship, or an empire, it always involves a great amount of collusion and cooperation on the part of the population.
“[Imperial] administrators occupied only a minor place in the system. The emperor had only a handful of agents, whose means of reaching the people were few and rudimentary. The police were practically nonexistent. There were neither social workers nor prosecutors,” 12 MacMullen continues.
The people who actually ran things “had no official function, or if they had one, they had no need of it to make themselves heard. A huge number of decisions were taken each day and throughout the empire that conformed to their own desires more than to the law, the emperor, or his representatives.What’s more, these decisions were those that counted, those that concerned property, movement, career choices, success on the farm, commerce or banking; sometimes even a person’s physical safety.” 13
In business, as in empire, vast, complex, informal systems work largely on the basis of trust. People trust others to do more or less what they expect. The emperor could no more control what was done in Judea or Gaul than we can control what goes into our hamburgers. Still, we trust
Despite these annoyances, the empire was a modest success. It was largely peaceful and prosperous. Between 1870 and 1913, GDP per capita rose at an annual rate of 1.45 percent, which was faster than the rate in Britain or France, and almost as fast as in Germany.
But the imperial family had a bad habit of attracting trouble. Emperor Franz Josef’s only son died under circumstances that are still considered mysterious. His brother had the bad judgment to meddle in the affairs of Mexico and died in front of a firing squad. And, finally, his nephew and heir, the Archduke Franz Ferdinand, had the misfortune to visit Sarajevo in 1914 at the very moment when Bosnian nationalists were gunning for him; he even wore a hat with a huge ostrich plume so they would be sure not to miss.
THE MAKING OF AN EMPIRE
When did Rome become an empire? Historians look for a particular moment, even a natural, physical boundary—such as when Caesar crossed the Rubicon—to mark the end of one period and the beginning of the next. No such simple marker exists, however, between empire and other forms of government. Nor does any precise boundary exist between democracy and, say, theocracy or dictatorship. Governments are categorized artificially and often arbitrarily on the basis of theories—usually fraudulent ones. It is often said that democracies depend on the consent of the governed, whereas dictatorships and monarchies do not. A moment’s reflection, even by a professor of government, would reveal the lie. All systems of government depend on some measure of complicity.
“Given the very small number and insignificant presence of imperial agents and municipal officials to insure obedience to the state,” explains Ramsay MacMullen in his Corruption and the Decline of Rome, “millionaires, magnates, and other local notables of all sorts must have cooperated, and from their own free will.” 11 It doesn’t matter whether you call a political society free, a democracy, a dictatorship, or an empire, it always involves a great amount of collusion and cooperation on the part of the population.
“[Imperial] administrators occupied only a minor place in the system. The emperor had only a handful of agents, whose means of reaching the people were few and rudimentary. The police were practically nonexistent. There were neither social workers nor prosecutors,” 12 MacMullen continues.
The people who actually ran things “had no official function, or if they had one, they had no need of it to make themselves heard. A huge number of decisions were taken each day and throughout the empire that conformed to their own desires more than to the law, the emperor, or his representatives.What’s more, these decisions were those that counted, those that concerned property, movement, career choices, success on the farm, commerce or banking; sometimes even a person’s physical safety.” 13
In business, as in empire, vast, complex, informal systems work largely on the basis of trust. People trust others to do more or less what they expect. The emperor could no more control what was done in Judea or Gaul than we can control what goes into our hamburgers. Still, we trust
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