Price Revolutions and Their Historical Impact

In 1996, leading economic historian, David Hackett Fischer, published The Great Wave: Price Revolutions and the Rhythm of History. If you ponder the subtitle, you may grasp the work’s ambition.

Nobel Prize-winning economist Paul Krugman has been arguing with Fischer for many years that, in making the transition from business to historical cycles, Fischer’s position is problematic.

There are, of course, detailed histories of prices, such as Thomas Tooke’s A History of Prices and of the State of the Circulation during the Years 1793–1856 (6 volumes, 1838–1857).

In the first four volumes he treats (a) of the prices of corn, and the circumstances affecting prices; (b) the prices of produce other than corn; and (c) the state of the circulation. The two final volumes, written with William Newmarch, deal with railways, free trade, banking in Europe and the effects of new discoveries of gold.

Wikipedia (links added)

Tooke-type price histories are one thing, but what about Fischer’s price revolutions? Max Weber (who predates Fischer by almost a century) seems to endorse this concept. In Weber’s General Economic History (German: Wirtschaftsgeschichte), he writes:

The great price revolution of the 16th and 17th centuries provided a powerful lever for the specifically capitalistic tendencies of seeking profit through cheapening production and lowering the price. This revolution is rightly ascribed to the continuous inflow of precious metals, in consequence of the great overseas discoveries. It lasted from the thirties of the 16th century down to the time of the Thirty Years’ War, but affected different branches of economic life in quite different ways. In the case of agricultural products an almost universal rise in price set in, making it possible for them to go over to production for the market. It was quite otherwise with the course of prices for industrial products. By and large these remained stable or rose in price relatively little, thus really falling, in comparison with the agricultural products. This relative decline was made possible only through a shift in technology and economics, and exerted a pressure in the direction of increasing profit by repeated cheapening of production. Thus the development did not follow the order that capitalism set in first and the decline in prices followed, but the reverse; first the prices fell relatively and then came capitalism.

Max Weber, General Economic History, Collier Books (3rd printing), 1966, pages 230-231.

Notice the last sentence above, Weber explicitly describes price revolutions exactly as Fischer argues.

In the history books we read, the emphasis is always on colorful personalities, inventions and other more theatrical events. This obviously omits the idea of phenomena like price revolutions. We cannot explain history merely by these personalities; we need to zoom out and view the larger picture.

Why Is Technological History So Misleading?

We are conditioned to think of technological history in a very binary way. For thousands of years before motorized transportation, we think of horses and wind-powered ships. We also sense that if we brought great historical minds from before the industrial revolution to a modern city, most likely they would be stunned by the technology surrounding them. Think of a world of medical science before anesthesia and germ theory.

Let’s modify this binary view of human history. David F. Noble gives us a more accurate view:

Augustine, the chief author of Christian orthodoxy, wrote in The City of God, “there have been discovered and perfected, by the natural genius of man, innumerable arts and skills which minister not only to the necessities of life but also to human enjoyment.” Augustine recognized the “astonishing achievements” that had taken place in cloth-making, navigation, architecture, agriculture, ceramics, medicine, weaponry and fortification, animal husbandry, and food preparation; in mathematics, astronomy, and philosophy; as well as in language, writing, music, theater, painting, and sculpture. But he emphasized again that “in saying this, of course, I am thinking only of the nature of the human mind as a glory of this mortal life, not of faith and the way of truth that leads to eternal life… And, remember, all these favors taken together are but the fragmentary solace allowed us in a life condemned to misery.”5

5 St. Augustine, The City of God (Garden City, N.Y.: Doubleday, 1958), pp. 526, 527.

David F. Noble, The Religion of Technology: The Divinity of Man and the Spirit of Invention, Penguin Books, 1999 (originally 1997), pages 11-12.

Note that Augustine wrote The City of God in 426 AD, meaning that even 1600 years ago, they had already made colossal advances. The prejudice that we have, given our scientific training, is utterly misleading. Rather than being blinded by Biblical explanations of how the world came to be, Augustine lauded these scientific advancements. We think of Thomas Edison and the lightbulb, rather than, “Let there be light.”

There are various levels of empirical and artisanal knowledge. In cooking, we rarely worry about molecules that make up ingredients. All these daily life pillars Augustine lists cannot be overlooked, even as we unlock the submicroscopic world of quantum mechanics.

Gov’t-Watching: Newly Issued Comptroller General Legal Decisions, 27 August 2025

[from the United States Government Accountability Office]

The Government Accountability Office (GAO) today issued the following legal decisions and opinions of the Comptroller General:

Bid Protest Decisions

B-422245.6 [archived PDF], Centuria Corporation, August 1, 2025

Centuria Corporation, a service-disabled veteran-owned small business (SDVOSB) of Reston, Virginia, protests the issuance of a task order to DecisionPoint Corporation, known at the time of proposal submission as EmeSec Inc., a SDVOSB of Gaithersburg, Maryland, under fair opportunity proposal request (FOPR) No. FA8773-23-R-0003, issued by the Department of the Air Force for defensive cyber realization, integration, and operational support services. Centuria argues that the Air Force conducted discussions with the awardee without affording it an opportunity to submit a revised proposal as required by Federal Acquisition Regulation (FAR) section 15.307(b).

We deny the protest.

B-423635 [archived PDF], Helgen Industries d/b/a DeSantis Gunhide, August 26, 2025

Helgen Industries, doing business as DeSantis Gunhide, protests the award of a contract to Safariland, LLC, under request for proposals (RFP) No. SHOP-PR-25-001520, issued by the Department of Justice, Federal Bureau of Investigation (FBI), for concealment and tactical holsters. The protester contends that the awardee is an ineligible large business.

We dismiss the protest.

B-422666.2 [archived PDF], Perimeter Security Partners, LLC—Costs, August 8, 2025

Perimeter Security Partners, LLC (PSP), a small business of Brentwood, Tennessee, requests that our Office recommend that it be reimbursed for the costs of filing and pursuing its protest challenging the issuance of a task order to Low Voltage Wiring, Ltd. (LVW), a small business of Colorado Springs, Colorado, under request for quotations (RFQ) No. W912DY-24-R-0008, issued by the Department of the Army, U.S. Army Corps of Engineers (Corps), for preventative and corrective maintenance services for access control points at 19 Army installations in the northeast region of the United States. PSP argues that it should be reimbursed its protest costs because the agency unduly delayed taking corrective action in response to its clearly meritorious protest.

We grant the request.

Congressional Review Act

B-337397 [archived PDF], U.S. Department of Health and Human Services—Applicability of the Congressional Review Act to Policy on Adhering to the Text of the Administrative Procedure Act, August 27, 2025

On March 3, 2025, the U.S. Department of Health and Human Services (HHS) published in the Federal Register a policy statement titled, Policy on Adhering to the Text of the Administrative Procedure Act (2025 Policy Statement or Policy Statement). The 2025 Policy Statement rescinds a prior policy generally requiring HHS agencies and offices to use Administrative Procedure Act (APA) notice-and-comment procedures for rules relating to public property, loans, grants, benefits, or contracts and establishes a new policy giving HHS agencies and offices discretion whether to use notice-and-comment procedures for such rules.

The Congressional Review Act (CRA) requires that before a rule can take effect, an agency must submit the rule to both the House of Representatives and the Senate, as well as the Comptroller General. CRA adopts the definition of “rule” under APA but excludes certain categories of rules from coverage. We conclude that the 2025 Policy Statement is a rule for purposes of CRA because it meets the APA definition of a rule, and no CRA exception applies. Therefore, the Policy Statement is a rule subject to CRA’s submission requirements.

Economics-Watching: Will Tariffs Touch Off an Inflationary Impulse? Business Execs Think So.

[from Federal Reserve Bank of Atlanta, 21 August 2025]

Summary

Following the inflationary surge from 2021 to 2023, which was touched off by supply chain constraints and shipping bottlenecks, we evaluate a new panel of own-firm price and unit cost growth expectations in the Atlanta Fed’s Survey of Business Uncertainty for signs that the anticipated impact from tariffs is broadening beyond directly affected firms. We find evidence for the potential of tariffs to touch off another bout of high inflation. First, firms that are directly exposed to tariffs have increased their year-ahead price growth expectations sharply (by 0.7 percentage points). Second, firms that are not directly exposed to tariffs but are operating in industries that are highly exposed to tariffs anticipate a moderately higher trajectory for year-ahead price growth (0.3 percentage points). Third, this broadening of overall price pressures—a key feature of the pandemic-era inflationary impulse—is only partially offset by lower price increases from tariff-exposed firms that are operating largely in industries not exposed to tariffs.

Key Findings

  1. Firms, en masse, have increased their year-ahead price growth expectations since the end of 2024. This is especially true for firms directly exposed to tariffs.
  2. We find evidence of a broadening out of the influence of tariffs beyond those directly exposed. Unexposed firms in exposed industries anticipate a moderately higher trajectory of year-ahead price growth.
  3. The broadening of anticipated price growth is only partially offset by lower price growth expectations among tariff-exposed firms that are operating in largely unexposed industries.

Read the full article [archived PDF]

Economics-Watching: Drewry Container Shipping Financial Insight, August 2025

[from Drewry Shipping Consultants, 22 August 2025]

Container shipping companies have reported mixed 2Q25 results. Read the article [archived PDF] for key takeaways from 2Q25 results and other key developments shaping the container shipping sector.

About Drewry Maritime Financial Research

Drewry Maritime Financial Research (DMFR), is the marketing name of Drewry Financial Research Services Ltd. DMFR, is an independent equity research service focused on the maritime industry. DMFR’s parent organisation, Drewry Shipping Consultants Holdings Limited was established more than 50 years ago and is now widely regarded as one of the leading independent sources of global industry analysis and insight. This in-depth industry knowledge is fully applied in our analysis of quoted maritime companies.

World-Watching: Human Enhanced Moisture Transport Exacerbated the Extreme Precipitation in Northern China

[from the American Geophysical Union, Geophysical Research Letters, 11 August 2025]

Abstract

Although previous studies suggest anthropogenic forcing may influence extreme precipitation probability, few have specifically investigated the human influence on moisture transport. Here, we leverage the 2023 record-breaking summer precipitation in Northern China (NC) to address this gap. Combining station observation with Coupled Model Intercomparison Project Phase 6 (CMIP6) model outputs, we demonstrate that the 2023-like heavy precipitation event was exacerbated by anthropogenic enhanced moisture transport. External forcing increased the probability of extreme southeasterly moisture transport by approximately 1.3 (90% confidence interval: 1.0–1.8) times. Moreover, the total anthropogenic forcing likely increased the probability of similar precipitation events at least 1.7 times (1.0–3.1), with both greenhouse gases and anthropogenic aerosols contributing positively. As greenhouse gases concentrations rise and anthropogenic warming intensifies, the frequency of similar extreme precipitation events in NC is projected to increase further.

Key Points

Plain Language Summary

The extent of human influence on moisture transport and consequent heavy precipitation remains a critical research question. While anthropogenic contributions to precipitation extremes are increasingly recognized, studies specifically addressing human-induced changes in moisture transport remain limited. The record-breaking summer precipitation in Northern China (NC) during 2023 provides a salient case study. This extreme event was fueled by substantial moisture transport from the southeast into NC, driven by Typhoons Doksuri and Khanun. Attribution analyses indicate that both greenhouse gas and anthropogenic aerosol emissions likely increased the probability of similar heavy precipitation events and associated moisture transport patterns. Such events are projected to become more frequent with continued anthropogenic warming. These findings demonstrate that human activities significantly influence moisture transport pathways and consequently modulate extreme precipitation occurrence in NC, deepening our understanding of the physical mechanisms underlying these events.

Read the full paper [archived PDF]

World-Watching: USDA GAIN Reports from 19 August 2025

[from the United States Department of Agriculture, Foreign Agricultural Service: Global Agricultural Information Network (GAIN)]

Australia: Stone Fruit Annual

Stone fruit production in Australia is forecast to decline in marketing year (MY) 2025/26, primarily due to the Bureau of Meteorology’s (BOM) projection of a wetter-than-average spring. If realized, these conditions are expected to negatively affect both yields and fruit quality. Cherry production is forecast to fall by ten percent, while peach and nectarine production is expected to drop by seven percent. Growing conditions to date have been favorable, with excellent winter chill hours supporting strong bud burst and production potential. However, the anticipated shift to wet spring weather is likely to undermine these early-season advantages. As a result, cherry exports are forecast to decrease by nine percent and peach and nectarine exports by seven percent. Imports, though starting from a low base, are projected to rise modestly in MY 2025/26.

Read the full article [archived PDF]

Chile: Stone Fruit Annual

Post projects exports of Chilean cherries to grow significantly in the coming years, driven by strong international demand, particularly from China. Post estimates cherry production in marketing year (MY) 2024/25 to reach 730,000 metric tons (MT), a 6.7 increase over MY 2024/25. Chilean cherry exports will increase by 7.2 percent reaching 670,000 MT. In MY 2024/25, Post estimates nectarine and peach production to total 205,000 MT, a 3.4 percent increase over MY 2024/25. Peach and nectarine exports will increase by 3.4 percent totaling 146,000 metric tons. This growth reflects the continued expansion of nectarine planting, which offsets the decline in fresh peach area planted.

Read the full article [archived PDF]

China: Call for Domestic Comments on 30 National Food Safety Standards

On August 1, 2025, the Chinese government announced a public comment period for 30 national food safety standards, open until September 26, 2025, via the national standards management system. The standards have not yet been notified to the WTO. This report includes an unofficial translation of the announcement and the list of standards, and stakeholders are advised to review the regulations for potential market or regulatory impacts.

Read the full article [archived PDF]

China: New CCP Regulation Expands Anti-Corruption and Frugality Measures

On May 18, 2025, the Chinese Communist Party and State Council issued a revised regulation on “Strict Economy and Opposing Waste by Party and Government Organs.” The regulation bans drinking alcohol at public receptions and events and discourages other forms of consumption that could be seen as extravagant. The FAS China offices are monitoring the potential impact on high-value U.S. agricultural products.

Read the full article [archived PDF]

China: Revised National Food Safety Standard for Paddy Rice Notified

On July 25, 2025, China notified a National Food Safety Standard for Paddy Rice to the WTO under G/TBT/N/CHN/2091. This national food safety standard includes mandatory requirements for quality, testing, inspection, packaging, and labeling of domestic and imported commercial paddy rice. This report provides an unofficial translation of the notified standard. Comments may be submitted to the China’s TBT National Notification and Enquiry Center at tbt@customs.gov.cn until August 24, 2025.

Read the full article [archived PDF]

Guatemala: Retail Foods Annual

Guatemala boasts a young population with a median age of 26 years and a growing middle class, driving increased demand for modern retail formats. However, traditional markets and informal retail remain prevalent across the country. In 2024, the United States exported $1.9 billion in agricultural and related products to Guatemala, with $886 million attributed to consumer-oriented goods. Key export categories included red meats, poultry, dairy products, fresh fruits, and processed vegetables.

Read the full article [archived PDF]

India: Cotton and Products Update

FAS Mumbai estimates MY 2025/26 India cotton production at 24.5 million 480-lb bales from 11.2 million hectares, down two percent from the previous estimate as farmers shift to higher-return crops like paddy, pulses, and cereals; kharif sowing decreased 2.4 percent from last year (as of August 1). An eight percent increase in the minimum support price (MSP) for medium- and long-staple cotton, effective October 1, is pushing fiber prices higher, encouraging mills to increase imports. Mill consumption is forecast at 25.7 million 480-lb bales, supported by steady yarn and apparel demand in key export markets and a potential export surge following ratification of the U.K.-India Comprehensive Economic and Trade Agreement (CETA).

Read the full article [archived PDF]

Japan: Stone Fruit Annual

Japan’s fresh cherry production for the 2025/26 marketing year (MY) is projected to be 12,500 tons. This forecast is a result of production losses caused by high temperatures during the pollination period in the country’s largest cherry-producing region. While this represents an 8.7 percent increase compared to the previous year’s historically poor harvest, it is expected to be a low yield year with a 25 percent decrease from the average production year. Due to the poor domestic production, demand for U.S. cherries is expected to remain strong for the 2025/26 MY, continuing the trend from the previous year. For peach production in Japan, the absolute number of fruits is anticipated to be equivalent to the previous year; however, the total production volume by weight is forecasted to decrease by approximately 10 percent because of high temperatures and low rainfall during the critical fruit growing period.

Read the full article [archived PDF]

Nicaragua: Nicaragua Peanut Report Annual

Nicaragua’s peanut farmers are expected to reduce harvested areas by at least five percent in marketing year (MY) 2025/26 in anticipation of lower prices due to increased Brazilian peanut production. FAS Managua expects farmers to be more rigorous in selecting production areas based on historical yields in MY 2025/26, excluding marginal lands with less fertile soil. Even with fluctuating market prices and adjustments to planted areas, Nicaragua is expected to remain a stable peanut producer in the region, with exports of shelled peanuts exceeding 70,000 metric tons annually.

Read the full article [archived PDF]

For more information, or for an archive of all FAS GAIN reports, please visit gain.fas.usda.gov.

The Interconnectedness of Everything and How It Should Influence Our Thinking

Max Weber, considered to be the father of modern sociology alongside Émile Durkheim, wrote a classic of economic history, General Economic History (GermanWirtschaftsgeschichte).

Weber concludes chapter 25 (“Free Wholesale Trade”) with:

The railway is the most revolutionary instrumentality known to history, for economic life in general and not merely for commerce, but the railway was dependent on the age of iron; and it also like so many other things, was the plaything of princely and courtier interests.

Max Weber, General Economic History, Collier Books, Third Printing, 1966, page 221.

Zooming out you may intuit that these narrow gauge explanations are inadequate but much better than nothing. We are faced with the problem of connecting railroads and the Iron Age to larger transformations from which these railroads were born.

Your high school history book might mention Abraham Darby III; to quote Wikipedia:

He built the largest cast iron structure of his era: the first cast-iron bridge ever built, as a crossing over the Severn near Coalbrookdale. The bridge made it possible for the village of Ironbridge to grow up around it, with the area being subsequently named Ironbridge Gorge.

He was the third of four men of the same name, all English ironmasters, from several generations of a Quaker family that played a pivotal role in the Industrial Revolution. Without James Watt, there would be no steam engine; without which, there would be no railroad. Watt in turn improved upon the Newcomen atmospheric engine, while consulting other scientists.

Despite the brilliance of Watt’s engine, however, without the financial backing of Matthew Boulton, it might have been a failure.

If you read Watt and Boulton’s correspondence, Watt is always thinking locally, whereas Boulton is already talking about selling the invention globally. This is the ecosystem in which Weber’s economic observations reside.

Weber leads up to the point of the importance of railroads by discussing the evolution of land transport.

Land transport also remained as before. The post produced no change; it merely forwarded letters and small packages, but did not concern itself with large scale production, which was decisive for economic life.

Only the roads underwent an extraordinary improvement, through the construction of turnpikes. In this the French government under Sully took the lead, while England leased the roads to private enterprisers who collected tolls for their use. The building of the turnpikes wrought a revolution in commercial life comparable to no other before the appearance of the railways. There is no comparison between the present density of road traffic and that of this period. In 1793, 70,000 horses went through the little town of Lüneburg while as late as 1846 only 40,000 were used in freight transport in all Germany. The costs of land carriage amounted to ten or twenty times the freight on the railways at a later time, and were three to four times as high as the charges for inland shipping at the same period. A half billion ton-kilometers was the highest figure for transportation for the movement on land in Germany, while in 1913, 67 billions were carried on the railroads.

Max Weber, General Economic History, Collier Books, Third Printing, 1966, page 221.

Weber also connects railroads with the atmosphere of speculation:

Such speculation underwent an enormous expansion with the building of railroads; these provided the paper which first unchained the speculative urge. Under the head of goods, grains, and a few colonial products available in large volume, and then other goods, were drawn into the circle of exchange speculation during the 19th century.

Max Weber, General Economic History, Collier Books, Third Printing, 1966, page 219-220.

Everything is connected to everything else, and without realizing this truth and sensing the underlying transformations, you cannot get a clear signal from history.

Economics-Watching: BIS Alerts for 18 August 2025

[from the Bank for International Settlements]

An Approach to Anti-Money Laundering Compliance for Cryptoassets

BIS Bulletin № 111 (13 August 2025)

by Iñaki Aldasoro, Jon Frost, Sang Hyuk Lim, Fernando Perez-Cruz & Hyun Song Shin

Key takeaways
  • Existing anti-money laundering (AML) approaches relying on trusted intermediaries have limited effectiveness with decentralized record-keeping in permissionless public blockchains.
  • The public transaction history on blockchains can enable AML and other compliance efforts, such as FX regulations, by leveraging the provenance and history of any particular unit or balance of a cryptoasset, including stablecoins.
  • An AML compliance score based on the likelihood that a particular cryptoasset unit or balance is linked with illicit activity may be referenced at points of contact with the banking system (“off-ramps”), preventing inflows of the proceeds of illicit activity and supporting a culture of “duty of care” among crypto market participants.

Read the full article [archived PDF]

Macroeconomic Impact of Tariffs and Policy Uncertainty

BIS Bulletin № 110 (12 August 2025)

by Emanuel Kohlscheen, Phurichai Rungcharoenkitkul, Dora Xia & Fabrizio Zampolli

Key takeaways
  • Tariffs affect economies most directly through trade volume and prices. Tariffs lower output growth everywhere, though the magnitude varies by country and scenario. They also tend to raise inflation, most notably in the imposing countries.
  • Tariffs have indirect effects, including exchange rate shifts, supply chain disruptions, trade diversion and heightened uncertainty. These could worsen growth and inflation effects as well as the policy trade-offs central banks face.
  • If it proves persistent, trade policy uncertainty could depress domestic demand and put global growth at risk.

Read the full article [archived PDF]

Powerlessness as a Deep Variable in World History

The famous German filmmaker Rainer Werner Fassbinder, wrote and directed Ali: Fear Eats the Soul. In the original German, the word is not fear, but rather anxiety (angst). We want to argue that the corrosiveness of powerlessness in world society destroys minds, hearts and souls that has never been explored in the depth it deserves.

History books usually talk about the rise of empires, Assyrian, Spanish, British, etc. and the conquests of famous military leaders. It’s also true that fiascos and defeats are mentioned (e.g., Napolean at Waterloo).

The brilliant American writer James Baldwin, said when a people is either marginalized for a long time (including self-marginalization), slowly goes insane and begins to step off the edge of the world (most famously in the documentary, I Am Not Your Negro). Baldwin’s insight illuminates a nation having a nervous breakdown.

Three examples of powerlessness eating the soul come to mind:

All of these behaviors are social, psychological pathologies with roots in a long exposure to powerlessness. By contrast, Napolean’s defeat at Waterloo is a single instance in time, not an extended period of crushing mental defeatism. This becomes a haunting ghost that never really goes away.

There are nuances to be explored here, for example the Civil War defeat of the South as expressed in A Stillness at Appomattox. Resentments festered in the South’s psyche, and could be argued to linger to this day.

Thinking of this as the field of powerlessness studies, a central classic is Power and Powerlessness in Jewish History by David Biale.

The Jews have chosen the modern nation-state in the form of the state of Israel or American democracy, as the best guarantee for their survival. That they have identified with the nation-state is no surprise, for they have always demonstrated a shrewd understanding of the political forms of each age, from partial sovereignty in imperial antiquity to corporate power in the Middle Ages. Identification with the state is the modern version of Jewish politics; different strategies pertained in the past. To suggest that modern Jews should adopt some other strategy for survival-to argue that nationalism or democratic pluralism are foreign to Judaism—is to ignore the political legacy of Jewish history, a persistent tradition of political imitation and accommodation, but never of passivity or retreat from politics. Zionism and Diaspora nationalism in their modern forms may be new in Jewish history, but they represent no more and no less than the latest incarnation of this political tradition.

These contemporary strategies for survival, for all their limitations and failures to fulfill messianic expectations, have still proven to be largely successful. The Jews of Israel and the Western Diaspora face less of a threat to their physical survival than at any other time since the end of the Holocaust and certainly less in comparison to the Jews of Europe before the Holocaust. To say that these Jews are secure would be foolhardy in light of Jewish history, but they are certainly more secure than many allow themselves to believe.

The discrepancy between contemporary Jewish power and the insecurity many Jews feel owes much to the inverted image that modern anti-Semites have of Jewish power. If Jews typically see themselves as less powerful than they really are, anti-Semites, since the nineteenth century, portray them as much more powerful: a secret cabal in control of the world. The state of Israel has not diminished this paranoia; on the contrary, anti-Semites now see Zionism as a force equal to twentieth-century imperialism. Afraid of feeding these bizarre delusions, many Jews shrink from acknowledging the actual power they possess. The reality, as I have argued throughout this book, lies somewhere between Jewish fear and anti-Semitic fantasy.

Traumatic historical memories play as great a role in the Jews’ misperception of their contemporary power. Every nation labors under the burden of its own history, caught in the tensions between its understanding of history and current political realities; these tensions are often the cause of misguided political decisions. The United States, torn between conflicting legacies of isolationism and interventionism, and fearful of being perceived as a “paper tiger,” became entangled in Vietnam. The Soviet Union, invaded repeatedly by the West, holds tenaciously to the countries of Eastern Europe as a buffer against imagined Western threats. The Germans, fearful of their neighbors and obsessed with national unification, repeatedly launched wars against the rest of Europe, only to hind themselves after World War II permanently divided and the most likely battlefield for a war between East and West; by succumbing to paranoid tears and messianic appetites, the Germans brought down on themselves exactly the situation they most dreaded.

None of these examples sheds direct light on the dilemma of the Jews, for no other nation has a history analogous to theirs. But each of these cases suggests that the burden of history is a problem common to all nation-states, even as the shape and content of the burden differs. For Jews, contemporary political problems return inevitably and fatefully to the Holocaust, the final denouement of European Jewish history.

The Jews have classically defined their history as unique, and in many ways it is. Their victimization by the Nazis revived anew this sense of uniqueness, at a time when ideologies of “normalization” had begun to undermine the concept of a Chosen People. For many, the return of the Jews to sovereignty could be understood only against the backdrop of the Holocaust, the epitome of the powerlessness of a powerless people: the Holocaust became a metaphor for the special character of all of Jewish history, and only Jewish sovereignty could be a response to this condition of impotence. I have argued that the extremes represented by the boundless terror of the Holocaust and by the victories of the state of Israel should not distort our perception of the Jews’ relationship to power throughout Jewish history; neither should they blur our vision of politics today. To see both past and present realistically without forgetting or suppressing the memory of the Holocaust remains the Jews’ particular burden from history.

When they consider their past, the Jews have no choice but to grapple with the Holocaust. But the Holocaust may also convey a different message with respect to the future: it may signify that the fate of the Jews is no longer unique, becoming instead a symbol for the fate of all mankind. In the twentieth century, the promise of the nation-state, which the European Enlightenment believed would free mankind, has been irrevocably compromised. With the murder of the Jews, the nation-state went mad, reducing some of its subjects to powerless pawns and, finally, corpses. The Nazis were by no means the only twentieth-century rulers to terrorize and murder those they ruled, but they did so with a systematic efficiency and industrial rationality never imagined before.

The total deprivation of human rights and utter degradation suffered by the Jews are not a closed chapter buried in history. Throughout the world today, dictatorships of widely different ideological persuasions have remembered the lessons of the totalitarian regimes of the 1930s and 1940s. In the atrocities committed by governments against their own citizens, the terrifying legacy of the Holocaust lives on. The very powerlessness of the Jews under the Nazis is a warning of the possible fate of human beings anywhere in the world.

The powerlessness of the Jews during the Holocaust also points to the fate of all humanity in the face of nuclear war. It is now possible for governments to deliver the ovens of Auschwitz to all corners of the earth, to make a holocaust of all mankind. Like the Jews of Nazi Europe, the people of the world will be utterly impotent in such a war, neither soldiers nor even innocent bystanders, but, again like the Jews, intentional victims.

As a metaphor for a new politics of irrationality, the Holocaust contains a message of inescapable relevance for a nuclear world. For the first time in human history, a government sought to eradicate a whole people from the earth for reasons that had nothing to do with political realities. In a similar way, the idea of nuclear war lacks the most elementary political rationality, for it would necessarily destroy everything it meant to save: it would take genocide, invented in its most systematic form by the Nazis, to its global and ultimately suicidal conclusion.

Post-Holocaust Jewish nationalism—the accepted ideology of many of the world’s Jews—derives its logic and its legitimacy from both the modern history of the Jews and the modern history of the world. From this point of view, Jewish nationalism is the irrefutable answer to the powerlessness of the holocaust. At the same time, as a prefiguration of the terrors of contemporary politics, the Holocaust has thrown a dark shadow over the future of the nation-state as such, diminishing the promise of modern nationalism for the Jews as for all other peoples.

The urge toward a normal existence in a Jewish state grew out of a profound desire to escape the “unique destiny of a unique people.” Yet, if a “normal existence” today means confronting the terror of global nuclear genocide, then instead of the Jews escaping their historical destiny, it is the world that has become Jewish; the Jews have entered the world of nations only to discover that all mankind faces the holocaust they themselves already suffered. In this world, power is no longer a complete antidote to powerlessness. Possessed of the power to destroy this world, the nations of the earth have become the prisoners of their own might, limited in their sovereignty by forces of their own making: power has created its own vulnerability.

In this dialectic between power and vulnerability, the long history of the Jews may unexpectedly serve as a beacon to the nations. From biblical times to the present day, the Jews have wandered the uncertain terrain between power and powerlessness, never quite achieving the power necessary to guarantee long-term security, but equally avoiding, with a number of disastrous exceptions, the abyss of absolute impotence. They developed the consummate political art of living with uncertainty and insecurity; their long survival owes much to this extraordinary achievement. Jews today must struggle to come to terms with this history in light of their present power, to see both past and present through a realistic lens, neither inflating their power nor exaggerating their powerlessness. The lessons this history can teach are necessary for their own continued existence and are equally relevant to the continued existence of mankind.

David Biale, “Epilogue: The Political Legacy of Jewish History”, Power and Powerlessness in Jewish History, Knopf Doubleday, pages 206-210.


If you combine Fassbinder’s notion of fear eating the soul with Baldwin’s warning against chronic marginalization, we begin to see the phenomenon of powerlessness as an under analyzed variable in world history.