Quotulatiousness

September 5, 2020

Beginning the transition from personal rule to the modern bureaucratic state

Anton Howes discusses some of the issues late Medieval rulers had which in some ways began the ascendency of our modern nation state with omnipresent bureaucratic oversight of everyone and everything:

… the bureaucratic state of today, with its officials involving themselves with every aspect of modern life, is a relatively recent invention. In a world without bureaucracy, when state capacity was relatively lacking, it’s difficult to see what other options monarchs would have had. Suppose yourself transported to the throne of England in 1500, and crowned monarch. Once you bored of the novelty and luxuries of being head of state, you might become concerned about the lot of the common man and woman. Yet even if you wanted to create a healthcare system, or make education free and universal to all children, or even create a police force (London didn’t get one until 1829, and the rest of the country not til much later), there is absolutely no way you could succeed.

King James I (of England) and VI (of Scotland)
Portrait by Daniel Myrtens, 1621 from the National Portrait Gallery via Wikimedia Commons.

For a start, you would struggle to maintain your hold on power. Fund schools you say? Somebody will have to pay. The nobles? Well, try to tax them — in many European states they were exempt from taxation — and you might quickly lose both your throne and your head. And supposing you do manage to tax them, after miraculously stamping out an insurrection without their support, how would you even begin to go about collecting it? There was simply no central government agency capable of raising it. Working out how much people should pay, chasing up non-payers, and even the physical act of collection, not to mention protecting that treasure once collected, all takes substantial manpower. Not to mention the fact that the collecting agents will likely siphon most of it off to line their own pockets.

[…]

It was not until 1689, when there was a coup, that an incoming ruler allowed the English parliament to sit whenever it pleased. Before that, it was convened only at the whim of the ruler, and dispersed even at the slightest provocation. In 1621, for example, when James I was planning to marry his heir to a Spanish princess, Parliament sent him a petition asserting their right to debate the matter. Upon hearing of it, he called for the official record of parliamentary proceedings, personally ripped out the page with the offending vote, and promptly dissolved the Parliament. The downside, of course, was that James could not then acquire any parliamentary subsidies.

Ruling was thus an intensely personal affair, of making deals and finding ways to circumvent deals you had inherited. Increasing your capabilities as a ruler – state capacity – was thus no easy task, as the typical ruler was stuck in an essentially medieval equilibrium. Imposing a policy costs money, but raising money involves imposing policy. Breaking out of this chicken-and-egg problem took centuries of canny leadership. The rulers who achieved it most would today seem hopelessly corrupt.

To gain extra cash without interference from Parliament, successive monarchs first asserted and then abused their ancient prerogative rights to grant monopolies over trades and industries. They eventually granted them to whomever was willing to pay, establishing monopolies over industries like gambling cards or alehouses under the guise of regulating unsavoury activities. They also sold off knighthoods and titles, and in 1670 Charles II even made a secret deal with the French that he would convert to Catholicism and attack the Protestant Dutch, all in exchange for cash. Anything to not have to call a potentially pesky Parliament. At times, the most effective rulers even resembled mob bosses. Take Elizabeth I’s anger when a cloth-laden merchant fleet bound for an Antwerp fair in 1559 was allowed to depart. Her order to stop them had not arrived in time, thus preventing her from extracting “loans” from the merchants while she still had their goods within her power.

August 22, 2020

John Cabot’s patent monopoly grant and the rise of the modern corporation

Filed under: Britain, Business, Government, History, Law — Tags: , , , , — Nicholas @ 03:00

In the latest Age of Invention newsletter, Anton Howes traces the line of descent of modern corporate structures from the patent granted to John Cabot to explore (and exploit) a trade route to China:

The replica of John Cabot’s ship Matthew in Bristol harbour, adjacent to the SS Great Britain.
Photo by Chris McKenna via Wikimedia Commons.

I discussed last time [linked here] how the use of patent monopolies came to England in the sixteenth century. Since then, however, I’ve developed a strong hunch that the introduction of patent monopolies may also have played a crucial role in the birth of the business corporation. I happened to be reading Ron Harris’s new book, Going the Distance, in which he stresses the unprecedented constitutions of the Dutch and English East India Companies — both of which began to emerge in the closing years of the sixteenth century. Yet the first joint-stock corporation, albeit experimental, was actually founded decades earlier, in the 1550s. Harris mentions it as a sort of obscure precursor, and it wasn’t terribly successful, but it stood out to me because its founder and first governor was also one of the key introducers of patent monopolies to England: the explorer Sebastian Cabot.

As I mentioned last time, Cabot was named on one of England’s very first patents for invention — though we’d now say it was for “discovery” — in 1496. An Italian who spent much of his career serving Spain, he was coaxed back to England in the late 1540s to pursue new voyages of exploration. Indeed, he reappeared in England at the exact time that patent monopolies for invention began to re-emerge, after a hiatus of about half a century. In 1550, Cabot obtained a certified copy of his original 1496 patent and within a couple of years English policymakers began regularly granting other patents for invention. It started as just a trickle, with one 1552 patent granted to to some enterprising merchant for introducing Norman glass-making techniques, and a 1554 patent to the German alchemist Burchard Kranich, and in the 1560s had developed into a steady stream.

Yet Cabot’s re-certification of his patent is never included in this narrative. It’s a scarcely-noted detail, perhaps because he appears not to have exploited it. Or did he? I think the fact of his re-certification — a bit of trivia that’s usually overlooked — helps explain the origins of the world’s first joint-stock corporation.

Corporations themselves, of course, were nothing new. Corporate organisations had existed for centuries in England, and indeed throughout Europe and the rest of the world: officially-recognised legal “persons” that might outlive each and any member, and which might act as a unit in terms of buying, selling, owning, and contracting. Cities, guilds, charities, universities, and various religious organisations were usually corporations. But they were not joint-stock business corporations, in the sense of their members purchasing shares and delegating commercial decision-making to a centralised management to conduct trade on their behalves. Instead, the vast majority of trade and industry was conducted by partnerships of individuals who pooled their capital without forming any legally distinct corporation. Shares might be bought in a physical ship, or even in particular trading voyages, but not in a legal entity that was both ongoing and intangible. There were many joint-stock associations, but they were not corporations.

And to the extent that some corporations in England were related to trade, such as the Company of Merchant Adventurers of London, or the Company of Merchants of the Staple, they were not joint-stock businesses at all. They were instead regulatory bodies. These corporations were granted monopolies over the trade with certain areas, or in certain commodities, to which their members then bought licenses to trade on their own account. Membership fees went towards supporting regulatory or charitable functions — resolving disputes between members, perhaps supporting members who had fallen on hard times, and representing the interests of members as a lobby group both at home and abroad — but not towards pooling capital for commercial ventures. The regulated companies were thus more akin to guilds, or to modern trade unions or professional associations, rather than firms. Members were not shareholders, but licensees who used their own capital and were subject to their own profits and losses.

Before the 1550s, then, there had been plenty of unincorporated business associations that were joint-stock, and even more unincorporated associations that were not joint-stock. There had also been a few trade-related corporations that were not joint-stock. Sebastian Cabot’s innovation was thus to fill the last quadrant of that matrix: he created a corporation that would be joint-stock, in which a wide range of shareholders could invest, entrusting their capital to managers who would conduct repeated voyages of exploration and trade on their behalves.

August 7, 2020

From Medieval Letters Patent to our modern patents, by way of Venice

Filed under: Britain, Europe, History, Law, Technology — Tags: , , , , , — Nicholas @ 05:00

In the latest Age of Invention newsletter, Anton Howes traces the lines of descent from the Letters patent of the Middle Ages, through Venetian legal innovations, to what began to resemble our modern patent system:

Letters Patent Issued by Queen Victoria, 1839
On 15 June 1839 Captain William Hobson was officially appointed by Queen Victoria to be Lieutenant Governor General of New Zealand. Hobson (1792 – 1842) was thus the first Governor of New Zealand. This position was renamed in 1907 as “Governor General”. Hobson arrived in New Zealand in late January 1840, and oversaw the signing of te Tiriti o Waitangi only a few days later. By the end of 1840, New Zealand became a colony in its own right and Hobson moved the capital of the colony from the Bay of Islands to Auckland. He served as Governor until his death in 1842 after he suffered a stroke at the age of 49.
Constitutional Records group of Archives NZ via Wikimedia Commons.

Patents for invention — temporary monopolies on the use of new technologies — are frequently cited as a key contributor to the British Industrial Revolution. But where did they come from? We typically talk about them as formal institutions, imposed from above by supposedly wise rulers. But their origins, or at least their introduction to England, tell a very different story.

England’s monarchs had long used their prerogative powers to grant special dispensations by letters patent — that is, orders from the monarch that were open for all the public to see (think of the word patently, from the same root, which means openly or clearly). For the most part, such public proclamations had been used to grant titles of nobility, or to appoint people to positions in various official hierarchies — legal, religious, and governmental. And, of course, letters patent could be used to promote the introduction of new technologies.

[…]

Monopolies in general, of course, over particular trades or industries had been granted for centuries, by rulers all across Europe. They granted such privileges to groups of merchants, artisans, and city-dwellers, giving them rights to organise and regulate their own activities as guilds or as city corporations. Inherent to all such charters was the ability of the in-group to restrict competition from outsiders, at least within the confines of their city. And the ruler, in exchange for granting such privileges, typically received a share of the guild’s or corporation’s revenues. But such monopolies were very rarely given to individuals. When they were, it was often so unpopular as to be almost immediately overturned. And they were rarely used to encourage innovation.

With one exception: Italy. Throughout the fifteenth century, some Italian city guilds had begun to forbid their members from copying newly-invented patterns for silk and woollen cloth, effectively granting a monopoly over those patterns to the individual inventors. In Venice, a 50-year monopoly was granted in 1416 to one Franciscus Petri, of Rhodes, to introduce superior fulling mills. In Florence, the famous architect and engineer Filippo Brunelleschi was granted a monopoly in 1421 for a vessel he designed for transporting heavy loads of marble, in exchange for revealing the secrets of his design. The printing press was also introduced to Venice using such a privilege, with a 5-year monopoly granted in 1469 to Johannes of Speyer, though he died only a few months after receiving it. And these ad hoc grants were made with increasing frequency, such that in 1474 Venice legislated to make them more systematic, declaring that 10-year monopolies could be obtained for all new technologies, either invented or imported (though it continued to also grant ad hoc patents, with the terms and durations decided on a case-by-case basis as before). Under the 1474 law, Venice was soon granting patent monopolies to the introducers of various mills, pumps, dredges, textile machines, printing techniques, and even special kinds of lasagna. It granted over a hundred patents in the first half of the sixteenth century, with many more thereafter.

From Venice, the use of patent monopolies as an instrument of policy spread abroad, with the initiative coming from the would-be introducers of novelties themselves. In the mid-fifteenth century, for example, a French inventor who had acquired patents in Venice was also successfully lobbying for similar privileges from the archbishop of Salzburg, the duke of Ferrara, and the Hapsburg Holy Roman Emperor. The use of patent monopolies thus soon diffused to the rest of Italy, to Germany, and to the various dominions of the Spanish emperor — including Spain itself, its American colonies, and the Low Countries.

And, eventually, to England. But not in the way we might expect. In 1496, the Venetian explorer Zuan Chabotto (aka John Cabot) acquired a patent monopoly from Henry VII over the trade and products of any lands he was to discover — a legal procedure unlike anything that earlier English explorers had attempted (they had merely been granted licenses). Cabot’s grant even differed from the agreements made by Christopher Columbus with the Spanish crown, or by earlier explorers for the Portuguese. Columbus, for example, was effectively granted a patent of nobility — the hereditary titles of viceroy, admiral, and governor. He and the Portuguese explorers were direct agents of the crown, with military and justice-dispensing responsibilities over any newly conquered lands — a model derived from the Christian conquests of Muslim Iberia. Columbus effectively became a marcher lord, a custodian and defender of Spain’s new borderlands.

August 2, 2020

QotD: Marx’s imperfect economic understanding

Filed under: Economics, History, Quotations — Tags: , , , — Nicholas @ 01:00

We’re at the 200th anniversary of Karl Marx’s birth – also the 201st of Ricardo’s publication, the 242nd of Smith’s Wealth of Nations. And it has to be said that the latter two were more perceptive analysts of the human condition and also contributed vastly more to human knowledge and happiness. Most of the bits that Marx got right in economics were in fact lifted from those other two. The one big thing he got wrong was not to believe them about markets.

We can find, if we look properly, Marx’s insistences of how appalling monopoly capitalism would be in Smith. They’re both right too, it would be appalling. But we do have to understand what they both mean by this. In modern terms they mean monopsony, more specifically the monopoly buyer of labour. What is it that prevents this? Competition in the market among capitalists for access to the labour they desire to exploit. That very competition decreasing the amount of grinding of faces into the dust they’re able to do. Henry Ford’s $5 a day is an excellent example of this very point.

Ford wanted access to the best manufacturing labour of his time. He also wanted to have a lower turnover of that labour, lower training costs. So, he doubled wages (actually, normal wages plus a 100% bonus if you did things the Ford Way) and got that labour. At which point all the other manufacturers had to try and compete with those higher wages in order to get that labour they wanted to expropriate the sweat of the brow from. Marx did get this, he pointed out that exactly this sort of competition, in the absence of a reserve army of the unemployed, is what would raise real wages as productivity improved.

Smith also didn’t like the setting of wages as it precluded just such competition and such wage rises.

Where Marx went wrong was in not realising this power of markets. He knew of them, obviously, understood the idea, but just didn’t understand their power to ameliorate, destroy even, that march to monopoly capitalism.

[…]

The thing we really need to know on this bicentenary about Karl Marx is that he was wrong. He just never did grasp the power of markets to disrupt, even prevent, the tendencies he saw in capitalism. Specifically, and something we all need to know today, the power of competition among capitalists as the method of improving the lives of all us wage slaves. You know, that’s why we proletariat today, exploited as we are and ground into the dust, are the best fed, longest lived and richest, in every sense of the word, human beings who have ever existed. Something which is, if we’re honest about it, not a bad recommendation for a socio-economic system really. You know, actually working? Achieving the aim of improving the human condition?

Tim Worstall, “Marx At 200 – Yes, He Was Wrong, Badly Wrong”, Continental Telegraph, 2018-05-04.

July 15, 2020

When The Dutch Ruled The World: Rise and Fall of the Dutch East India Company

Filed under: Asia, Business, Europe, History, India — Tags: , , , , , , — Nicholas @ 02:00

Business Casual
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April 24, 2020

Prizes, patents, and the Society of the Encouragement of Arts, Manufactures and Commerce

In the most recent Age of Invention newsletter, Anton Howes explains why the Society of the Encouragement of Arts, Manufactures and Commerce (now the Royal Society of Arts) wasn’t a fan of the British patent system and preferred to award prizes in areas that were unlikely to generate monopoly situations:

The back of the Royal Society of Arts building in London, 25 August 2005.
Photo by C.G.P. Grey (www.CGPGrey.com) via Wikimedia Commons.

… the Society’s early members had an aversion to monopolies, and patents are, after all, temporary monopolies. But there was actually a more practical reason to not give rewards to patented inventions. In fact, quite a few active members of the Society were themselves patentees, and patents for inventions were not generally lumped together for condemnation with practices like forestalling and engrossing. The practical reason for banning patents was that there was no point giving a prize for something that people were already doing anyway. Patents were expensive in the eighteenth century — depending on how you account for inflation, it could cost about £300,000 in modern terms to obtain one — so the fact that there was a patent for a process was a clear indication that it might be profitable. The Society, by contrast, was supposed to encourage things that would not otherwise have been done.

Thus, when a patent had already been granted for a process the Society had been considering giving a premium for, it purposefully backed down — not because the prize would infringe on the patent, but because its encouragement was no longer necessary. And so the effect of the ban on patented inventions was that the Society received, even unsolicited, exactly the kinds of inventions that there was less monetary incentive to invent. Occasionally, this meant trivial improvements — minor tweaks, here and there, to existing processes. An engineer might patent one invention, but not see it worth their time patenting another — through the Society’s prizes, they might at least get a bit of cash for it, or some recognition. The improvement would also be promoted through the Society’s publications. Or, the Society received inventions that were far from trivial, like the scandiscope for cleaning chimneys [here], but which were not all that profitable: inventions that saved lives, or had other beneficial effects on the health and wellbeing of workers and consumers. And finally, the Society received innovations that could not be patented, such as agricultural practices and the opening of new import trades. In the early nineteenth century the Society awarded its prizes to a whole host of naval officers, including an admiral, who came up with flag-based signalling systems between ships — early forms of semaphore.

Another effect of the ban on patents was that the Society also attracted submissions from different demographics. Many of its submissions came from people who were too poor to afford patents, as well as from those who were too rich — wealthy aristocrats for whom commercial considerations might seem vulgar. The poor would generally go for the cash prizes, and the aristocrats for the honorary medals. And the prizes were used by people who might otherwise be socially excluded from invention. In 1758, for example, the Society instructed its members in the American colonies to accept submissions from Native Americans. It also allowed women to claim premiums (just as it allowed them to be members). My favourite example is Ann Williams, postmistress at Gravesend, in Kent, who won twenty guineas from the Society in 1778 for her observations on the feeding and rearing of silk-worms. She kept them in one of the post-office pigeon-holes, referring to them affectionately as “my little family” of “innocent reptiles”. Unlike other elements of society, the Society of Arts accepted, as she put it to them, that “curiosity is inherent to all the daughters of Eve.”

The Society thus encouraged the kinds of inventions that might not otherwise have been created, and catered to the kinds of inventors who might not otherwise have been recognised. Rather than competing with the patent system, it complemented it, filling in the gaps that it left. The Society operated at the margins, and only at the margins, to the better completion of the whole. It found its niche, to the benefit of innovation overall.

March 3, 2020

QotD: Public service and competitive private enterprise

Anyone who deals with the general UK public (coercive) sector regularly, knows it is a cesspit of laziness, incompetence, arrogance and corruption, riddled with civil servants that are neither civil nor servants.

And I’m not suggesting that the levels of corruption and incompetence are comparable to those found in third world hellholes. A local official in your county council is very unlikely to demand a bribe and then have your daughter raped by his buddies if you decline. He’s especially unlikely to get away with it, and then douse your family in petrol and burn them alive if you complain – those are the levels of corruption found elsewhere in the world, so we need to retain some perspective here.

But those countries have not benefited from a thousand years of sacrifice to earn us a culture that has learned through bitter experience how to run a country. Our civil servants should be performing at the highest standard and be the best in the world, because what they inherited was a culture that conquered that world, and brought civilisation and progress (often at great cost) to every corner of it.

That they have fallen from these heights and now occupy such low places should be a matter for great national shame. And yet they continue to lord it over those they pretend to serve – try calling your local planning department if you want instruction in how supercilious a local functionary feels able to be when speaking to those he claims to serve. If you just want them to do their job, you better be prepared to beg.

Whereas on the flip side, we might agree that the private (voluntary) sector is largely filled with honest and hardworking people and entrepreneurs, but there are crony capitalists out there too.

Your local butcher and baker (those that have survived the regulatory avalanches under which the crony capitalists have begged their pet politicians to bury them) remain staunch servants of their customers (through regard to their own interests), whereas oligoplists (supermarkets, telcos, insurance companies, banks, energy suppliers or transport companies) deliver to us just what the monopolists of government do – an icy contempt that would soon turn to withering small arms fire if the laws allowed it.

Alex Noble, “Corruption In The Coercive And Voluntary Sectors: Rotten Apples? Or The Tips of Icebergs?”, Continental Telegraph, 2019-12-02.

March 2, 2020

Downfall of the Superpower China – Ming and Qing Dynasty l HISTORY OF CHINA

Filed under: China, Economics, History — Tags: , , , — Nicholas @ 02:00

IT’S HISTORY
Published 17 Aug 2015

With the dynasties of the Ming and the Qing came social security and flourishing international trade. The White Lotus Movement advocated progressive thinking in the time of the conservative Ming dynasty. In 1616 the Qing dynasty came to power. Also known as the Manchu dynasty, the Qing refused to open their borders to limitless trade which led to frustrated European merchants. This caused hostility and mistrust of the “barbaric Chinese”. Shortly thereafter China’s economy lost its race against European Colonialism and would lose military influence after gunpowder reached Europe. All about the fall of the former Chinese superpower in this episode on IT’S HISTORY!

» SOURCES
Videos: British Pathé (https://www.youtube.com/user/britishp…)
Pictures: mainly Picture Alliance
Content:
Twitchett, Denis and Loewe, Michael. The Cambridge History of China. Cambridge University Press.
Wilkinson, Endymion, Chinese History: A New Manual. Harvard University, Asia Center
Loewe, Michael; Shaughnessy, Edward L. The Cambridge History of Ancient China. Cambridge University Press
John M. Roberts A Short History of the World. Oxford University Press
Xu, Pingfang The Formation of Chinese Civilization: An Archaeological Perspective. Yale University Press.
Fairbank, J. K.; Goldman, M. China: A New History. Harvard University Press. ”

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February 29, 2020

The metallic nickname of Henry VIII

Filed under: Britain, Germany, Government, History, Technology — Tags: , , , , — Nicholas @ 03:00

In the most recent Age of Invention newsletter, Anton Howes outlines the rocky investment history for German mining firms in England during the Tudor period:

Cropped image of a Hans Holbein the Younger portrait of King Henry VIII at Petworth House.
Photo by Hans Bernhard via Wikimedia Commons.

It’s an especially interesting case of England’s technological backwardness, given that copper was a material of major strategic importance: a necessary ingredient for the casting of bronze cannon. And it was useful for other industries, especially when mixed with zinc to form brass. Brass was the material of choice for accurate navigational instruments, as well as for ordinary pots and kettles. Most importantly, brass wire was needed for wool cards, used to straighten the fibres ready for spinning into thread. A cheaper and more secure supply of copper might thus potentially make England’s principal export, woollen cloth, even more competitive — if only the English could also work out how to produce brass.

The opportunity to introduce a copper industry appeared in 1560, when German bankers became involved in restoring the gold and silver content of England’s currency. The expensive wars of Henry VIII and Edward VI in the 1540s had prompted debasements of the coinage, to the short-term benefit of the crown, but to the long-term cost of both crown and country. By the end of Henry VIII’s reign, the ostensibly silver coins were actually mostly made of copper (as the coins were used, Henry’s nose on the faces of the coins wore down, revealing the base metal underneath and earning him the nickname Old Coppernose). The debased money continued to circulate for over a decade, driving the good money out of circulation. People preferred to hoard the higher-value currency, to send it abroad to pay for imports, or even to melt it down for the bullion. The weakness of the pound was an especial problem for Thomas Gresham, Queen Elizabeth’s financier, in that government loans from bankers in London and Antwerp had to be repaid in currency that was assessed for its gold and silver content, rather than its face value. Ever short of cash, the government was constantly resorting to such loans, made more expensive by the lack of bullion.

Restoring the currency — calling in the debased coins, melting them down, and then re-minting them at a higher fineness — required expertise that the English did not have. From France, the mint hired Eloy Mestrelle to strike the new coins by machine rather than by hand. (He was likely available because the French authorities suspected him of counterfeiting — the first mention of him in English records is a pardon for forgery, a habit that apparently died hard as he was eventually hanged for the offence). And to do the refining, Gresham hired German metallurgists: Johannes Loner and Daniel Ulstätt got the job, taking payment in the form of the copper they extracted from the debased coinage (along with a little of the silver). It turned out to be a dangerous assignment: some of the copper may have been mixed with arsenic, which was released in fumes during the refining process, thus poisoning the workers. They were prescribed milk, to be drunk from human skulls, for which the government even gave permission to use the traitors’ heads that were displayed on spikes on London Bridge — but to little avail, unfortunately, as some of them still died.

Loner and Ulstätt’s payment in copper appears to be no accident. They were agents of the Augsburg banking firm of Haug, Langnauer and Company, who controlled the major copper mines in Tirol. Having obtained the English government as a client, they now proposed the creation of English copper mines. They saw a chance to use England as a source of cheap copper, with which they could supply the German brass industry. It turns out that the tale of the multinational firm seeking to take advantage of a developing country for its raw materials is an extremely old one: in the 1560s, the developing country was England.

Yet the investment did not quite go according to plan. Although the Germans possessed all of the metallurgical expertise, the English insisted that the endeavour be organised on their own terms: the Company of Mines Royal. Only a third of the company’s twenty-four shares were to be held by the Germans, with the rest purchased by England’s political and mercantile elite: people like William Cecil (the Secretary of State) and the Earl of Leicester, Robert Dudley (the Queen’s crush). It was an attractive investment, protected from competition by a patent monopoly for mines of gold, silver, copper, and mercury in many of the relevant counties, as well as a life-time exemption for the investors from all taxes raised by parliament (in those days, parliament was pretty much only assembled to legitimise the raising of new taxes).

January 11, 2020

The bubbly 1720s

Filed under: Americas, Britain, Business, Economics, France, Government, History — Tags: , , , , , — Nicholas @ 03:00

In the latest Age of Invention newsletter, Anton Howes looks at Britain’s volatile financial scene in the 1720s:

William Hogarth – The South Sea Scheme, 1721. In the bottom left corner are Protestant, Catholic, and Jewish figures gambling, while in the middle there is a huge machine, like a merry-go-round, which people are boarding. At the top is a goat, written below which is “Who’l Ride”. The people are scattered around the picture with a sense of disorder, while the progress of the well-dressed people towards the ride in the middle represents the foolishness of the crowd in buying stock in the South Sea Company, which spent more time issuing stock than anything else.
Scanned from The genius of William Hogarth or Hogarth’s Graphical Works via Wikimedia Commons.

Over in France, a Scottish banker named John Law had in the late 1710s overseen an ambitious scheme to reorganise the government’s finances. He ran the Mississippi Company, one of the many companies with monopolies on France’s international trade. His scheme was for the company to acquire all of the other similar monopolies, so that it could have a monopoly on all of the country’s intercontinental trade routes. By 1719, the Mississippi Company had swelled into a Company of the Indies, which in turn had purchased the right to collect French taxes, from which it took took its own cut. In exchange for acquiring these monopolies, Law’s new super-monopoly would buy up the French government’s accumulated war debts, allowing repayment on more generous terms. By allowing the state to borrow more cheaply, the scheme was to be a key plank in improving French military might.

Meanwhile, in Britain, a very similar project was afoot. Following the War of the Spanish Succession, one of the things Britain won from France was the asiento – the monopoly on supplying African slaves to Spain’s colonies in America. The asiento was given to the South Sea Company, which had the monopoly on British trade with South America, and which in 1720 began to follow a scheme similar to Law’s. Given developments in France, it would not do for the British state to be left behind in terms of its capacity to take on more debt for war. Thus, with political support, the South Sea Company began to buy up the government’s debt, persuading its creditors to exchange that debt for increasingly valuable company shares.

In 1720, both schemes came crashing down. In the case of Law’s scheme, he had printed paper currency with which people could buy his company’s shares, but in 1720 discovered he had printed too much. When he prudently tried to devalue the company’s shares to match the quantity of paper notes, the devaluation spun out of control. In the case of the South Sea Company, the causes of the crash were a little more mysterious, perhaps even verging on the mundane. One explanation is that too many wealthy investors simply tried to sell their shares so that they would have ready cash to spend on holidaying in Europe, precipitating a minor fall in the share price which then led to a more widespread panic. Regardless, it did not end well. The company itself continued for many years thereafter — it even got involved with whaling off the coast of Greenland — but the collapse of its share price ended its chance to restructure the government’s debts.

November 18, 2019

The Opium War – Lost in Compensation l HISTORY OF CHINA

Filed under: Britain, China, Economics, History, Military — Tags: , , , , — Nicholas @ 06:00

IT’S HISTORY
Published 22 Aug 2015

The Opium War started as a dispute over trading rights between China and Great Britain. Regular trade between Europe and the Chinese had been ongoing for centuries. But China’s trading restrictions frustrated the British who were eager to supply the Chinese people with the increasingly popular narcotic opium. Circumventing the government’s attempts to ban opium trade by smuggling and bribery, China declared the death sentence on Opium smuggling and refused to compensate British tradesmen for any losses. Furiously, the Brits sent out a fleet to demand compensation and end the Cohong trading monopoly. Fierce battles and attacks on the Chinese coast were followed. Find out all about the First Opium War from Indy in our new episode of Battlefields!

» SOURCES
Videos: British Pathé (https://www.youtube.com/user/britishp…)
Pictures: mainly Picture Alliance
Content:
Lovell, Julia: The Opium War: Drugs, Dreams and the Making of China
Wei, Yuan: Chinese Account of the Opium War
McPherson, Duncan: The First Opium War – The Chinese Expedition 1840-1842
Merwin, Samuel: Drugging a Nation – The Story of China and the Opium Curse
Bernard, William Dallas; Hall, Sir William Hutcheon: Narrative of the Voyages and Services of the Nemesis, from 1840 to 1843.
Isabel Hilton (The Guardian): “The Opium War by Julia Lovell – review”
Perdue, Peter C. (MIT): The First Opium War http://ocw.mit.edu/ans7870/21f/21f.02…

» ABOUT US
IT’S HISTORY is a ride through history – Join us discovering the world’s most important eras in IN TIME, BIOGRAPHIES of the GREATEST MINDS and the most important INVENTIONS.

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Of course! Tell your teachers or professors about our channel and our videos. We’re happy if we can contribute with our videos.

» CREDITS
Presented by: Guy Kiddey
Script by: Dan Hungerford
Directed by: Daniel Czepelczauer
Director of Photography: Markus Kretzschmar
Music: Markus Kretzschmar
Sound Design: Bojan Novic
Editing: Markus Kretzschmar

A Mediakraft Networks original channel
Based on a concept by Florian Wittig and Daniel Czepelczauer
Executive Producers: Astrid Deinhard-Olsson, Spartacus Olsson
Head of Production: Michael Wendt
Producer: Daniel Czepelczauer
Social Media Manager: Laura Pagan and Florian Wittig

Contains material licensed from British Pathé
All rights reserved – © Mediakraft Networks GmbH, 2015

August 16, 2019

Rule Britannia, Britannia Rules the Salt | BETWEEN 2 WARS I 1930 Part 1 of 1

Filed under: Britain, History, India — Tags: , , , , , , — Nicholas @ 06:00

TimeGhost History
Published on 15 Aug 2019

After the Great War, the British empire is at its peak in terms of population and size. However, resistance against colonialism is starting to brew in the British colonies and dominions.

Join us on Patreon: https://www.patreon.com/TimeGhostHistory

Hosted by: Indy Neidell
Written by: Spartacus Olsson and Francis van Berkel
Directed by: Spartacus Olsson and Astrid Deinhard
Executive Producers: Bodo Rittenauer, Astrid Deinhard, Indy Neidell, Spartacus Olsson
Creative Producer: Joram Appel
Post-Production Director: Wieke Kapteijns
Research by: Francis van Berkel
Edited by: Wieke Kapteijns
Sound design: Iryna Dulka

Portrait Colorizations by Daniel Weiss.

Sources: National Portrait Gallery, Library and Archives Canada, Jenny Scott

A TimeGhost chronological documentary produced by OnLion Entertainment GmbH.

June 1, 2019

QotD: Orwell’s fear of private monopolies

Filed under: Britain, Economics, Government, Quotations — Tags: , , — Nicholas @ 01:00

Professor Hayek is also probably right in saying that in this country the intellectuals are more totalitarian-minded than the common people. But he does not see, or will not admit, that a return to “free” competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them. Professor Hayek denies that free capitalism necessarily leads to monopoly, but in practice that is where it has led, and since the vast majority of people would far rather have State regimentation than slumps and unemployment, the drift towards collectivism is bound to continue if popular opinion has any say in the matter.

George Orwell, “The Road to Serfdom by F.A. Hayek / The Mirror of the Past by K. Zilliacus”, Observer, 1944-04-09.

May 22, 2019

QotD: A “conservative” argument for regulating social media companies

There should be a high barrier for any company seeking to interfere with the marketplace of ideas in which the right of free correspondence is practiced.

Critics of regulating dot com monopolies have made valid points.

Regulating Google or Facebook as a public utility is dangerous. And their argument that giving government the power to control content on these platforms would backfire is sensible.

Any solution to the problem should not be based on expanding government control.

But there are two answers.

First, companies that engage in viewpoint discrimination in response to government pressure are acting as government agents. When a pattern of viewpoint discrimination manifests itself on the platform controlled by a monopoly, a civil rights investigation should examine what role government officials played in instigating the suppression of a particular point of view.

Liberals have abandoned the Public Forum Doctrine, once a popular ACLU theme, while embracing censorship. But if the Doctrine could apply to a shopping mall, it certainly applies to the internet.

In Packingham v. North Carolina, the Supreme Court’s decision found that, “A fundamental principle of the First Amendment is that all persons have access to places where they can speak and listen.”

The Packingham case dealt with government interference, but when monopolies silence conservatives on behalf of government actors, they are fulfilling the same role as an ISP that suspends a customer in response to a law.

When dot com monopolies get so big that being banned from their platforms effectively neutralizes political activity, press activity and political speech, then they’re public forums.

Second, rights are threatened by any sufficiently large organization or entity, not just government. Government has traditionally been the most powerful such organization, but the natural rights that our country was founded on are equally immune to every organization. Governments, as the Declaration of Independence asserts, exist as part of a social contract to secure these rights for its citizens.

Government secures these rights, first and foremost, against itself. (Our system effectively exists to answer the question of who watches the watchers.) But it also secures them against foreign powers, a crisis that the Declaration of Independence was written to meet, and against domestic organizations, criminal or political, whether it’s the Communist Party or ISIS, that seek to rob Americans of their rights.

A country in which freedom of speech effectively did not exist, even though it remained a technical right, would not be America. A government that allowed such a thing would have no right to exist.

Only a government whose citizens enjoy the rights of free men legally justifies is existence.

If a private company took control of all the roads and closed them to conservatives every Election Day, elections would become a mockery and the resulting government would be an illegitimate tyranny.

That’s the crisis that conservatives face with the internet.

Daniel Greenfield, “Americans Paid for the Internet, We Deserve Free Speech On It”, Sultan Knish, 2019-05-16.

May 1, 2019

To the surprise of nobody, Ontario’s cannabis stores are still struggling

Filed under: Bureaucracy, Business, Cancon — Tags: , , , , , — Nicholas @ 03:00

The Ontario government created a tightly restricted retail market regime for newly legal cannabis sellers, with a tiny number of licenses issued and highly bureaucratic “safeguards” for the retailers’ guidance and control. The city of Toronto, for example, with a population in the 2.7 million range, was allocated a whopping five stores. Only one of those stores was allowed to open on the first day of legal retail sales, and today there are three in operation, despite penalties and potential loss of licenses at stake for those who haven’t opened yet. The chorus of complaints from would-be customers has not diminished much, if at all since day one:

With legalization day long come and gone (and the euphoria of being able to spark a joint in public gone with it), the turtle-paced roll-out of Toronto’s weed retail scene goes to show the government and the OCS have some work to do before purchasing legal weed can be completely glitch-free (and lineup free, too).

Here are a few of the lows of getting high, courtesy of Toronto weed stores since buying pot became legal.

Weed prices are up
According to Statistics Canada, prices for weed have steadily been on the up and up since legalization last year.

While Nova Cannabis is trying to tackle its biggest competitor (illicit weed stores) with Black Market Buster deals, people who are buying their cannabis from the OCS are now paying an average of about $9.99 per gram—that’s roughly $3 more than those buying their bud from illegal stores.

Black market weed is still thriving
There’s still around 20 illegal dispensaries operating in the city, and at least 100 illegal marijuana delivery services. Why? See above: unlicensed weed stores are significantly cheaper than the legal ones, and loopholes in the city’s laws allow them to operate pretty much undisturbed, save for the occasional raids.

[…]

OCS packaging
Aside from the fact every product coming out of the OCS comes triple-wrapped in excessive, sometimes non-recyclable polypropylene packaging, the containers are just plain confusing.

Lack of packaging standards means your order comes in all shapes and sizes, regardless of whether you’re getting bud or pre-rolled joints, which is as confusing for buyers as it is for those behind the counter.

And that doesn’t even include the even louder chorus of complaints about the quality of the legal product…

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