England, Meta Intelligence

Poly-Awareness, Checks & Commercial History

In an era moving towards electronic payment systems and replacing physical currency, it can be educational to look back at checks and how we arrived here. As Winston Churchill observed, “The longer you can look back, the farther you can look forward.”

In looking at history, it is just as important to study commercial practices as well as government leaders and military conquests.

…In the ten years following 1850, the world production of gold was ten times greater than in the ten preceding years. As is well known, the French had always preferred metal currency, and welcomed the gold with a special enthusiasm; the state struck an impressive quantity of coins, striking five hundred million in 1845, for the world’s gold found its way more readily to France where it fetched the highest price. The circulation of gold increased in other European countries also, and the banks of issue, in particular, filed their vaults. In this gold rush the English were more cautious after their long acquaintance with problems of values, and the upheaval in the gold market brought hardly any changes in the prices of the metal there. It is true England also minted new coins, but took advantage of it chiefly to establish her banking system more firmly. The influx of gold, which was exclusively Australian, had at first little effect on the prices of goods, but it developed credit with a paper currency. The minting of this money increased England’s metallic circulation by almost fifty percent, but the use of the banknote and especially of the cheque increased by a far higher proportion. The use of the cheque became so widespread in England that shopkeepers and farmers adopted it as the only possible way of doing business although it was almost unknown on the continent. Cheques were often used for amounts of less than two pounds. Even if he had an income of only fifty pounds a year, the Englishman immediately opened a bank account. In 1885, payments in metal currency represented only one per cent of the London Bank payments and six per cent of those in Manchester.

The Act of 1826 granted complete freedom of issue, except in an area of twenty-six miles around London, where the privilege of the Bank was absolute. There was a good deal of argument about the exact meaning of this privilege; for example the question arose as to whether provincial banks could open an office in London, the main centre of business, without losing their rights of issue.

When it was ruled that they could not, many banks nevertheless settled in London and forfeited their privilege of printing. Only the Scottish banks put up a firmer resistance to this extension of the privileges of the Bank of England. On the other hand, the right of issue was losing much of its significance, since the remarkable development of payment by cheque meant that there was less resort to the note. Settlements between the great deposit banks were made neither in metal nor in notes, but were transacted in the accounts of a clearing house, which dealt with transactions amounting to several hundreds of thousands of pounds every year.

The London and Westminster Bank, one of the most important of the English private deposit banks, soon became a model for every bank in Europe, for it had a reserve capital of less than three million pounds, and held approximately twenty-two million in deposits. Such influential private banks, established as joint stock companies, had to resort to the Bank of England only rarely, so the latter did not need to be unduly anxious about its insignificant gold reserves which were barely one-third of those held by the Banque de France. The privilege of issuing paper money, a relic of the royal right of minting money, was therefore bypassed to all intents and purposes by the gradual improvement of English banking procedure. At the same time the Bank of England enjoyed a monopoly of issue which it was in process of acquiring without the intervention of the state, since the development of banking led all the provincial banks to settle in London, near the clearing house. It was a masterpiece of liberalism to coordinate the free activity of the English economy in the capital without any pressure from the political power. In this way financial centralization was achieved purely by private initiative once the need for it had become apparent.

French banking evolved on very different lines. In order to meet the credit crisis, the provisional government had recommended the establishment of departmental banks and of trade credit societies when it was reforming the Banque de France. Most of these establishments, whose capital was to be provided partly by the state and the departments, were stillborn, while others lingered on for a month or two before wasting away. On the other hand, the Comptoir d’Escompte de la Seine became a private concern, and flourished under the name of the Comptoir National d’Escompte de Paris. The Banque du Département du Nord, which became the Crédit du Nord, was equally fortunate, as were several trade banks, particularly that of the Entrepreneurs de Travaux Publics. The unusual feature about the composition of the Comptoir National d’Escompte was that the Council of State had allowed it to set up as a joint stock company. Within a few years the Crédit Mobilier, the Crédit Industriel et Commercial, the Société Générale, the Société des Dépôtes et Comptes Courants, and other companies were established to benefit from this new way of accumulating capital.

Not all these new banks were as prudent as their English counterparts by any means and this point is worth dwelling on. After 1848 the Banque de France had the monopoly of issuing notes for the whole of France, because the local issuing banks created by Napoleon I and Louis-Philippe had been absorbed by the Banque de France, whose notes were the only ones in circulation. It was the state which had made this decision and had settled the problem of monetary unity by authoritarian measures. A few bankers, under the Second Empire, protested against the right of monopoly exercised by the Banque de France, which had been imposed on the whole of the country by the state. Very little use was made of payment by cheque, and compensation was meagre. The wide circulation of metal currency was a sign of a restricted paper currency, but this meant that credit was scarce and was based entirely on the Banque de France. The latter, taking no risks, consequently piled up in its coffers considerable reserves of precious metals, proud of the fact that it could now maintain a steady discount rate more easily than England. It also gained great satisfaction from being the gold-controller of Europe. Whenever a sudden drastic rise in the English bank rate sent businessmen, and even the Bank of England itself, as we have seen, hastening to Paris in search of precious metals, it was to the Banque de France that they turned. Although it was attacked by those who accused it of stifling credit, on the other hand it was defended by those who found its caution reassuring. It was a difference of opinion which further enlivened the quarrel between the Pereires and the Rothschilds.

As we know, Jewish bankers played a vital part in the building of the railways. Pereire, a railway enthusiast, and Rothschild, the largest holder of free capital in France, had at first been prepared to undertake the great task in complete agreement. Rothschild, content with holding the Nord and the English connections, was one of the directors whose word carried most weight in the Banque de France, while the Pereire brothers, their heads still full of Saint-Simonist projects, were interested in vast plans covering Austria, Spain and the Mediterranean. They financed the great development of the economy of the south although even so they were obliged to open a credit institution, the well-known Crédit Mobilier. But because they could not use it for the issue of paper notes, and had tied up the funds entrusted to them too quickly, the Pereires embarked on a struggle to deprive the Bank of its privilege of issue. They believed that the mere right of minting money would enable them to possess the wide credit necessary for the bold financial policy on which they were launching out. It so happened that when Savoy was annexed to France, the Banque de Chambéry brought its banknotes and its privileges within French frontiers. The Pereires and their friends seized the shares of this bank and tried to turn its notes into rivals of those of the central bank. The Banque de France then asserted its rights, Chambéry lost its rights of issue, and soon afterwards the Crédit Mobilier went into liquidation.

This incident occasioned a great quarrel between theorists for or against privilege; it was above all a demonstration of the solidity of the rights the Bank had acquired, while no-one doubted the right of the state to confirm its privileges any longer. This situation was all the more paradoxical since the state was in the hands of Napoleon III who was a firm supporter of the Pereires and the Crédit Mobilier. The underlying cause of this paradox lay in French scepticism about cheques, for the development of bank money lagged more than half a century behind England. It was to be chiefly the work of Henri Germain, founder of the Crédit Lyonnais. His patron of 1863 was mainly anxious to attract large deposits by guaranteeing them against theft and fire so that he insisted on the effective help the Bank could give industrialists and merchants by insuring their cash service itself. By making wise use of these deposits and by a cautious policy, the Crédit Lyonnais was able to open branches in Paris and Marseilles, so that it was soon as powerful as the Crédit Industriel et Commercial and then outstripped it. It even surpassed the Comptoir d’Escompte, and soon the Crédit Lyonnais became the leading French deposit bank. From 1860 it was the major bank to introduce cheques.

But there is little reason for surprise in the difficulties encountered by the cheque between 1860 and 1870.

The Banque de France was regarded as the most reliable of all issuing authorities, and French specie reserves as the most powerful stock of gold in the world; between notes and gold as the two methods of payment, there was very little room for the cheque. It is difficult to believe that France’s reserves could not have kept the deposit banks generously supplied, perhaps as much as, and even more than, the English reserves. But it kept a good part of its cash-balance in gold, which held up the full development of French credit institutions until the closing years of the nineteenth century.

In England there was security and in France hesitation, but in Germany there was an irresistible wave of enthusiasm which led to the rapid growth of credit institutions from 1840. There were a great many note-issuing banks in the Germany of the confederation, because each prince had his own currency. Hamburg had one of the soundest banks of issue, whose marc banco was esteemed throughout Europe and served as a standard for the whole of Germany. Nuremberg still had its old seventeenth-century bank and its florin, while a large number of private establishments were also manufacturing notes with a restricted circulation. In this scheme of things the Bank of Prussia held a pre-eminent position which was strengthened by the place Prussia had assumed in the Zollverein, but it still could not contest the superiority of Hamburg. In short, the legal position of the German banks was similar to that of the English, in that there was plurality of issue.

Bank money, and banknotes, increased in competition with each other, and the future of the four great and famous banks which were to dominate the destiny of capitalist Germany after 1880 had already begun to take shape.

The Dresner Bank was connected with the progress of the iron industry in the Rhineland, and particularly of Essen and Krupps. The Deutsche Bank operated in the countries of central Europe. The Darmstädter Bank and the Disconto Gesellschaft carved out a place for themselves; indeed bills on the latter increased from six to forty million marks between 1855 and 1862.
Charles Morazé, The Triumph of the Middle Classes: A Political and Social History of Europe in the Nineteenth Century, Anchor Books, 1968, pages 291-297.

Notice that in the discussion above, events are never monocausal. They are always part of a swirling tornado of change. If you become accustomed to this, the way the world works and the way the world changes will become more accessible to you.

For example, “The use of the cheque became so widespread in England that shopkeepers and farmers adopted it as the only possible way of doing business although it was almost unknown on the continent. Cheques were often used for amounts of less than two pounds.”

Also notice, “…soon the Crédit Lyonnais became the leading French deposit bank. From 1860 it was the major bank to introduce cheques.”

This is an example of poly-awareness, the core of meta-intelligence.

Newspapers and the “Manufacture of Consent”

When we think about newspapers, various associations come to mind. Examples include Jeff Bezos purchasing The Washington Post or William Randolph Hearst inspiring Citizen Kane. Newspapers have, to some extent, devolved into a vehicle for propaganda, as described in Walter Lippmann’s Public Opinion.

Lippmann is famously quoted for advocating the “manufacture of consent.”

Max Weber describes the economic function of newspapers:

The newspaper as an institution came into the service of commerce at an astonishingly late date.

The newspaper, as an institution, is not a product of capitalism. It brought together in the first place political news and then mainly all sorts of curiosities from the world at large. The advertisement, however, made its way into the newspaper very late. It was never entirely absent but originally it related to family announcements, while the advertisement as a notice by the merchant, directed toward finding a market, first becomes an established phenomenon at the end of the 18th century—in the journal which for a century was the first in the world, the “Times.” Official price bulletins did not become general until the 19th century; originally all the exchanges were closed clubs, as they have remained in America virtually down to the present. Hence in the 18th century, business depended on the organized exchange of letters. Rational trading between regions was impossible without secure transmission of letters. This was accomplished partly by the merchant guilds and in part by butchers, wheelwrights, etc. The final stage in the rationalization of transmission of letters was brought about by the post, which collected letters and in connection therewith made tariff agreements with commercial houses. In Germany, the family of Thurn and Taxis, who held the postal concession, made notable advances in the rationalization of communication by letter. Yet the volume of correspondence is in the beginning surprisingly small. In 1633, a million letters were posted in all England while today a place of 4,000 population will equal the number.
Max Weber, General Economic History, Collier Books, 1966 (Third Printing), page 220.

Herbert Hunt provides a useful overview of the newspaper as a political tool in his introduction to Honoré de Balzac’s Lost Illusions (French: Illusions perdues).

The first half of the nineteenth century witnessed the rapid rise to power of the periodical press. Journalism had been active — though dangerous to those engaged in it — during the Revolutionary period. Napoleon had kept the press under his thumb, as Giroudeau points out on page 235. The ‘freedom’ of the press was one of the most controversial issues both under the Restoration and the July Monarchy. Under Louis XVIII and Charles X the struggle between those who, like the Li b erals and Bonapartists, wanted to keep the Revolutionary principles and gains intact, and the Conservatives of various hues, especially the ‘Ultras’, who wanted to put the political clock back, was an affair of major importance; likewise, under Louis-Philippe, the conflict between the spirit of stagnation and the parties in favour of ‘movement’. Balzac’s contention is that the majority of journalists under these three monarchs, instead of recognizing that they were called to a serious, even sacred mission, turned the Press into an instrument for self-advancement, prostituted principles to intrigue and used journalism merely as a means of acquiring money, position and power. He is reluctant to admit that there were great, responsible press organs, like Le Journal des Débats, Le Conservateur, Le Constitutionnel and, from 1824, Le Globe, which stood firm on principle; he is above all aware of the vogue which the petits journaux enjoyed after the fall of Napoleon, and of the role they played as political privateers.

The petits journaux were so-called because they were produced in smaller format than the important dailies or weeklies, which were more or less grave, staid and ponderous. They proliferated in Paris once the fall of the Empire had given a relative, though still precarious liberty to the Press — precarious because it was constantly threatened by the increasingly reactionary governments of the time. The politicians of the Right found it difficult to keep the newspapers under control even by such means as stamp-duty, caution-money, fines, suspensions and suppressions, the object of these being mainly to put obstacles in the way of would-be founders of hostile periodicals. The ‘little papers’, short-lived as they often proved to be, were much given to journalistic sharp-shooting. They preferred satire, personal attack, sarcasm and scandal-mongering to serious argument or the affirmation of ideals. They were mostly Opposition journals and were a constant thorn in the flesh of the Government. Balzac’s aim was to expose their addiction to ‘graft’, intrigue, blackmail and the misuse of the feuilleton, namely the bottom portion of the first page or other pages generally reserved for critical articles and frequently devoted to the malicious task of slashing literary reputations. Andoche Finot — the prototype of such later newspaper magnates as Émile de Girardin and Armand Dutacq, pioneers in 1836 in the founding of cheap dailies which relied on advertisement and serialized novels as a chief source of income — acquires a large share in a big daily and hands on to the equally unprincipled Lousteau the editorship of the ‘little paper’ he already owns. Balzac probably had Le Figaro chiefly in mind, a periodical which was constantly going bankrupt or being suppressed but kept popping up again under different editors. Hector Merlin’s royalist Drapeau Blanc, edited by Martainville, really existed, having been founded in 1819; so did Le Réveil. Other examples of ‘little papers’ before 1830 were Le Nain Jaume (Bonapartist), Le Diable Boiteux and Le Corsaire (both Li b eral), Le Voleur, La Mode, La Silhouette, and, under Louis-Philippe, not only the phoenix-like Figaro, but also La Caricature, Le Charivari (ancestor of our English Punch), and once more Le Corsaire: a few among many. Louis-Philippe and his Cabinets were easy prey for these stinging gad-flies whose unremitting satire and innuendo remind one of the present-day Canard Enchaîné.

It is an amusing thought that, in the late twenties and early thirties, Balzac had himself been a contributor to these disreputable rags and sometimes had a hand in the running of them; for instance he had helped Philipon to found La Caricature. Throughout his career he contributed many novels in serial form to the more important newspapers, notably those founded by Girardin and Dutacq — La Presse and Le Siècle. But by the time he was writing A Great Man in Embryo he had left the petits journaux far behind him. He himself tried his luck as a newspaper-proprietor and editor: he bought La Chronique de Paris in 1836 and founded La Revue Parisienne in 1840. Both of these ventures failed. We can well imagine therefore what a large amount of bile was accumulating inside him. On the whole, reviews of his works appearing in periodicals had been hostile if not harsh. He suffered much from the disparagement of editors and critics such as Sainte-Beuve and Jules Janin respectively. He was always quarrelling with Émile de Girardin. And so he took his revenge. He had already made a preliminary attack on the periodical press in The Skin. And he followed up his attack of 1839 with his Monograph of the Paris Press (1842).
Honoré de Balzac, Lost Illusions, translated and introduced by Herbert Hunt, Penguin Books, 1971, pages xiv-xvi.

Balzac’s novel is very concerned with all aspects of journalism. For example, chapter 17 is titled “How a news-sheet is edited” and chapter 18 is a symposium on newspapers. Chapter 18 quotes a German guest who states, “I thank god there are no newspapers in my country.” (page 312). Another participant states, “In corporate crimes no one is implicated.” “A newspaper can behave in the most atrocious manner and no one on the staff considers that his own hands are soiled.” (page 314).

‘The influence and power of newspapers are only just dawning,’ said Finot. ‘Journalism is in its infancy; it will grow up. In ten years from now, everything will be subject to publicity. Thought will enlighten the world…’
Honoré de Balzac, Lost Illusions, Penguin Books, 1971, page 313.

‘Newspapers are an evil,’ said Claude Vignon. ‘An evil which could be utilized, but the Government wants to fight it. There’ll be a conflict. Who will go under? That’s the question.’
Honoré de Balzac, Lost Illusions, Penguin Books, 1971, page 313.

We should heed Vignon’s warning. Nazi Germany’s three main newspapers confirm this danger.

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 (German: Wirtschaftsgeschichte).

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: BRICS Currency Creates Dilemma for the Dollar

by Christopher Whalen, from China Daily

The term “BRICS currency” typically refers to a hypothetical or proposed unified currency for the BRICS grouping. It’s not a single, physical currency currently in use, but rather a concept for a potential future monetary system that some suggest will reduce the dominance of the U.S. dollar in international trade and finance.

Is BRICS currency cooperation about immediate de-dollarization or long-term financial sovereignty? The answer is that BRICS cooperation may include reducing long-term dependence on the dollar as a means of exchange. The dollar is involved in more than half of all trade and 80 percent of all foreign exchange transactions. BRICS currency cooperation aims to gradually reduce the group’s dollar dependency, but challenges remain.

The BRICS concept came about not because the dollar is unsuitable as a means of exchange or unit of account, but rather because of the use of the dollar by Washington as a weapon. As I note in my book, Inflated: Money, Debt and the American Dream, the special role of the dollar in U.S. finance allows the U.S. government to impose harsh compliance and reporting requirements on foreign nationals and institutions. The U.S. is an arbitrary hegemon and does not follow reciprocity with other countries.

The global role of the dollar is an anomaly, the byproduct of two world wars had left the other antagonists broke by the time the Bretton Woods Agreement was signed in July 1944.

Choosing the fiat paper dollar as the default global reserve currency more than seven decades ago reflected the fact that the United States was one of the victors and possessed the wealth that gave Washington unchallenged economic leadership. Prior to World War I, the United Kingdom’s pound sterling was the global standard, but importantly, this paper currency was backed by gold — the only money that is not debt. The dollar, too, was backed by gold — until 1933, when the Franklin Roosevelt administration confiscated gold in private hands to prevent his government from collapsing.

Pound notes started to circulate in England in 1694, shortly after the establishment of the Bank of England. The paper pound helped to fuel the expansion of the British Empire, in large part because the only competing form of money was physical gold. When Britain and other nations left the gold standard in the 1930s, it was due to the deflation caused by the Great Depression rather than a deliberate choice.

The 19th-century rule attributed to English journalist and businessman Walter Bagehot says that in times of crisis, lend freely at a high rate against good collateral. Yet since the currency devaluation and gold seizures of 1933, fiat currencies and below-market interest rates have been the rule. In a global scheme in which the government occupies the prime position, the operative term remains “financial repression”, whereby governments control markets and artificially suppress rates of return on debt. For this reason, the dollar is losing its role as a store of value to gold.

The fact that the dollar continues to trade strongly versus other currencies reflects the reality that as the main means of exchange globally, the dollar cannot be easily replaced. One reason for this continued support for the dollar is that the trade in petroleum and other commodities is so large that it requires an equally large currency to accommodate it. Also, neither the Europeans nor the Japanese, the only two possible alternatives, are willing to risk the external deficits or inflation that the U.S. suffers as the host for the global currency.

What global currency will replace the fiat paper dollar? None. As this article is being written, gold is the second-largest reserve asset for central banks after the dollar. “The initiation in 2002 of the Shanghai Gold Exchange was of great strategic significance, both for gold and the global monetary system,” notes veteran gold fund manager Henry Smyth in an interview in The Institutional Risk Analyst. “Now it is completely clear what happened.”

Smyth and many other observers see the creation of the SGE in 2002 as the return of gold to the international monetary system. But while gold is growing in importance as a reserve asset for many countries, it does not mean that the role of the dollar as a global means of exchange or unit of account is about to change.

The dollar will remain the dominant asset. And even then, displacing the dollar will require a major change in the international monetary system, a change that is already underway.

The author is the chairman of Whalen Global Advisors LLC in New York and the author of Inflated: Money, Debt and the American Dream published by Wiley Global (2025).

China: Deep History

Winston Churchill says somewhere (if we paraphrase) that the further back you are able to look, the more secure your ability to analyze the present and the future. Without these ‘historical smarts’, your sense of direction is very feeble. Let us use the novel, Lost Illusions, by Honoré de Balzac as a back door into historical smarts.

This novel was originally published in three parts between 1837 and 1843 and is set mostly in the 1820s, primarily in provincial France. It is unique because it starts with technology and commerce.

At the time when this story begins, the Stanhope press and inking-rollers were not yet in use in small provincial printing-offices. Angoulême, although its paper-making industry kept it in contact with Parisian printing, was still using those wooden presses from which the now obsolete metaphor ‘making the presses groan’ originated. Printing there was so much behind the times that the pressmen still used leather balls spread with ink to dab on the characters. The bed of the press holding the letter-filled ‘forme’ to which the paper is applied was still made of stone and so justified its name ‘marble’. The ravenous machines of our times have so completely superseded this mechanism — to which, despite its imperfections, we owe the fine books produced by the Elzevirs, the Plantins, the Aldi and the Didots — that it is necessary to mention this antiquated equipment which Jérôme-Nicolas Séchard held in superstitious affection; it has its part to play in this great and trivial story.

Not only do we get this conceptual framework about printing technology, but later on in the novel, Balzac gives us a further insight into paper-making and textiles, including a long discussion of China.

In England, where four-fifths of the population use cotton to the exclusion of linen, they make nothing but cotton paper. The cotton paper is very soft and easily creased to begin with, and it has a further defect: it is so soluble that if you seep a book made of cotton paper in water for fifteen minutes, it turns to a pulp, while an old book left in water for a couple of hours is not spoilt. You could dry the old book, and the pages, though yellow and faded, would still be legible, the work would not be destroyed.

“There is a time coming when legislation will equalize our fortunes, and we shall all be poor together; we shall want our linen and our books to be cheap, just as people are beginning to prefer small pictures because they have not wall space enough for large ones. Well, the shirts and the books will not last, that is all; it is the same on all sides, solidity is drying out. So this problem is one of the first importance for literature, science, and politics.

“One day, in my office, there was a hot discussion going on about the material that the Chinese use for making paper. Their paper is far better than ours, because the raw material is better; and a good deal was said about this thin, light Chinese paper, for if it is light and thin, the texture is close, there are no transparent spots in it. In Paris there are learned men among the printers’ readers; Fourier and Pierre Leroux are Lachevardiere’s readers at this moment; and the Comte de Saint-Simon, who happened to be correcting proofs for us, came in in the middle of the discussion. He told us at once that, according to Kempfer and du Halde, the Broussonetia furnishes the substance of the Chinese paper; it is a vegetable substance (like linen or cotton for that matter). Another reader maintained that Chinese paper was principally made of an animal substance, to wit, the silk that is abundant there. They made a bet about it in my presence. The Messieurs Didot are printers to the Institute, so naturally they referred the question to that learned body. M. Marcel, who used to be superintendent of the Royal Printing Establishment, was umpire, and he sent the two readers to M. l’Abbe Grozier, Librarian at the Arsenal. By the Abbe’s decision they both lost their wages. The paper was not made of silk nor yet from the Broussonetia; the pulp proved to be the triturated fibre of some kind of bamboo. The Abbe Grozier had a Chinese book, an iconographical and technological work, with a great many pictures in it, illustrating all the different processes of paper-making, and he showed us a picture of the workshop with the bamboo stalks lying in a heap in the corner; it was extremely well drawn.

“Lucien told me that your father, with the intuition of a man of talent, had a glimmering of a notion of some way of replacing linen rags with an exceedingly common vegetable product, not previously manufactured, but taken direct from the soil, as the Chinese use vegetable fibre at first hand. I have classified the guesses made by those who came before me, and have begun to study the question. The bamboo is a kind of reed; naturally I began to think of the reeds that grow here in France.

“Labor is very cheap in China, where a workman earns three halfpence a day, and this cheapness of labor enables the Chinese to manipulate each sheet of paper separately. They take it out of the mould, and press it between heated tablets of white porcelain, that is the secret of the surface and consistence, the lightness and satin smoothness of the best paper in the world. Well, here in Europe the work must be done by machinery; machinery must take the place of cheap Chinese labor. If we could but succeed in making a cheap paper of as good a quality, the weight and thickness of printed books would be reduced by more than one-half. A set of Voltaire, printed on our woven paper and bound, weighs about two hundred and fifty pounds; it would only weigh fifty if we used Chinese paper. That surely would be a triumph…

In 2025, we are to some extent, back to China, going from the proto-industrial world to our industrial and even digital world.

To educate oneself on all of this, you should look at the supreme scholarly achievement of the 20th century, namely Professor Joseph Needham’s masterpiece, Science and Civilisation in China.

India: Deep History

In his lectures, Professor Amartya Sen, the Harvard Nobel Prize in Economics winner, mentions Sir Mortimer Wheeler, Director-General of the Archaeological Survey of India. Wheeler wrote, while reporting on the excavation of the Indus Valley Civilization (of India), that the plumbing and sewerage were advanced, in some ways surpassing modern equivalents.

Sen’s larger point is that history is characterized by phases of rise and fall and not just classes and class struggles à la Marx.

Consider the following depiction of the East India Company, from The Anarchy: The Relentless Rise of the East India Company (also subtitled The East India Company, Corporate Violence, and the Pillage of an Empire) by William Dalrymple.

On 28 August 1608, Captain William Hawkins, a bluff sea captain with the Third Voyage, anchored his ship, the Hector, off Surat, and so became the first commander of an EIC vessel to set foot on Indian soil.

India then had a population of 150 million — about a fifth of the world’s total — and was producing about a quarter of global manufacturing; indeed, in many ways it was the world’s industrial powerhouse and the world’s leader in manufactured textiles. Not for nothing are so many English words connected with weaving — chintz, calico, shawl, pyjamas, khaki, dungarees, cummerbund, taffetas — of Indian origin. It was certainly responsible for a much larger share of world trade than any comparable zone and the weight of its economic power even reached Mexico, whose textile manufacture suffered a crisis of ‘de-industrialisation’ due to Indian cloth imports. In comparison, England then had just 5 per cent of India’s population and was producing just under 3 per cent of the world’s manufactured goods. A good proportion of the profits on this found its way to the Mughal exchequer in Agra, making the Mughal Emperor, with an income of around £100 million,* by far the richest monarch in the world.

The Mughal capitals were the megacities of their day: ‘They are second to none either in Asia or in Europe,’ thought the Jesuit Fr Antonio Monserrate, ‘with regards either to size, population, or wealth. Their cities are crowded with merchants, who gather from all over Asia. There is no art or craft which is not practised there.’ Between 1586 and 1605, European silver flowed into the Mughal heartland at the astonishing rate of 18 metric tons a year, for as William Hawkins observed, all nations bring coyne and carry away commodities for the same’. For their grubby contemporaries in the West, stumbling around in their codpieces, the silk-clad Mughals, dripping in jewels, were the living embodiment of wealth and power — a meaning that has remained impregnated in the word ‘mogul’ ever since.

By the early seventeenth century, Europeans had become used to easy military victories over the other peoples of the world.

* Over £10,000 million today.

Think of the larger point: what you just read is the story of Indian de-industrialization and its negative results. Ask yourself whether American de-industrialization is something of an echo of this, as manufacturing is offshored.

Navigating through Sources

Consciousness and the Novel: Connected Essays by the famous British novelist David Lodge is a classic work published by Harvard in 2004.

In this Lodge book, the author mentions a famous British society-watcher, Charles Masterman. In 1909, Masterman published his best-known study, The Condition of England, which tells us that England at that time experienced a greater inflow of migrants into London than in previous centuries taken together.

[Charles Frederick Gurney Masterman PC MP (24 October 1873 – 17 November 1927) was a British radical Liberal Party politician, intellectual and man of letters. He worked closely with such Liberal leaders as David Lloyd George and Winston Churchill in designing social welfare projects, including the National Insurance Act 1911. During the First World War, he played a central role in the main government propaganda agency.]

We then notice that one recurrent topic in various movie versions of the E. M. Forster novel Howards End (1910, set in those years) is the “horrifying” trend where great mansions and stately estates (Howards End and Wickham Place, say, in the novel) are all being demolished and replaced by ugly “flats.”

There must be, one thinks, a direct link between all the massive migrations into London at the time and all the proliferating flats at the “expense” of beautiful and historical villas. (This “demolish” trend is also part of the story of the classic novel A Handful of Dust by Evelyn Waugh, 1934)

In the predecessor to Downton Abbey called Upstairs, Downstairs, the story ends in 1930 with a sign outside the great “house” at Eaton Place offering flats coming soon, as the demand for housing (think of San Francisco today) is so massive that sellers can make a fortune selling out to developers, move into one of the flats being created, and live off the sale for the rest of their lives and “duck” the higher “Lloyd George taxes.” (In Downton Abbey, the dowager played by Maggie Smith repeatedly lashes out at Prime Minister Lloyd George as a kind of financial traitor.)

We see from this simple example how students should learn to “jump” between books and movies and TV miniseries to get a stronger focus on what’s being depicted on screens and pages and not just “swim along” at the surface level without any “drilling down.”

Education is largely the struggle or habit where students learn to bring pattern and structure out of “chaos,” thus giving narratives some overall shape.

This reminds one of the opening lines of Beryl Markham’s 1942 Africa memoir:

“How is it possible to bring order out of memory? I should like to begin at the beginning, patiently, like a weaver at his loom. I should like to say, ‘This is the place to start; there can be no other.’ ”
from West with the Night by Beryl Markham

This is a similar impetus: to bring order out of memory or others’ memories in books and movies from various times and places.

Movies as a Parallel University: The Case of Romantic Imperialism

When we think of romantic imperialism, we think of Rudyard Kipling’s poems, Winston Churchill’s The River War and perhaps Teddy Roosevelt’s macho “strenuous life” romanticized militarism (which the neocons somewhat knowingly aped to get the U.S. to invade Iraq in 2003). We should also recall British movie classics like The Four Feathers and “deflationary” versions of these jingoistic notions in The Man Who Would be King. During the 1930s, the Hungarian brothers Alexander & Zoltan Korda created many classic empire-celebration films in London, such as 1935’s Sanders of the River.

The Nigerian writer Chinua Achebe’s attack on Joseph Conrad’s Heart of Darkness as a kind of toxic “othering” of all Africans is a culmination of these imperial and anti-imperial tendencies.

Lastly, Maupassant’s classic Bel-Ami represents Algeria as a “colonial badlands” for French domination, killing, despoiling, profiteering, and later culminates in Meursault’s random murder of an Arab again in Algeria in Camus’ classic The Stranger. This literary concatenation also fits into this set of colonial imperial phenomena.

Niall Ferguson (the famous Harvard/Stanford “empire enthusiast”) finds his forerunner in the 1940 classic movie Beyond Tomorrow. The following “row” takes place on Christmas Eve between Chadwick (the Niall Ferguson imperialist) and Melton who sees empire as land-grabbing which you can dress up and prettify any way you like (“a grab is a grab,” he says):

Allan Chadwick: I tell you England’s territorial expansion had quite a different significance.
George Melton: No matter how thin you slice it, a grab is a grab.
Allan Chadwick: Grab?
That’s a specious term. England carried civilization into the wilderness. What was Australia before she redeemed it from the Aborigines?
Allan Chadwick: The truth is there isn’t an acre of the Empire that isn’t proud to fly the British flag.

The quick irritated exchange from Beyond Tomorrow is a good example of this eternal argument, allowing you to then “jump off” from this movie-as-university to do more exploring.

Precursors of Trumpism in American Culture: The Great Gatsby

Donald Trump’s brand of “nativist populism” is prefigured very clearly in the 1925 classic American novel The Great Gatsby by F. Scott Fitzgerald, the subject of several film adaptations. The anxiety in the Trump movement is called “The Great Replacement” (i.e., white people supplanted by minorities—American non-whites will “link up” with Mexicans and Chinese, stealing the place, property and role of white people). It has never occurred to these people that most of the world’s population is non-white. In The Great Gatsby, Tom Buchanan, Daisy’s husband, represents this anxiety.

He links these fears to the anxiety that “the sun is getting hotter.” (That is, he’s being threatened cosmically too, not only by racial demography.) His fears are not of “climate change,” based on something rational, but obsessive and maniacal “threat assessments.” They mirror the “irrational clusters of threats” of Trump and his voters, who “want to be paid in advance forever for their being white, Christian and American.” They demand “racial tenure.” This Tom Buchanan syndrome may be considered a type of “globalization backlash.”

Tom Buchanan lays it out in the novel:

“Civilization’s going to pieces,” broke out Tom violently. “I’ve gotten to be a terrible pessimist about things. Have you read The Rise of the Colored Empires by this man Goddard?…Well, it’s a fine book, and everybody ought to read it. The idea is if we don’t look out the white race will be — will be utterly submerged. It’s all scientific stuff; it’s been proved…This fellow has worked out the whole thing. It’s up to us, who are the dominant race, to watch out or those other races will have control of things…The idea is that we’re Nordics. I am, and you are, and we’ve produced all the things that go to make civilization—oh, science and art, and all that. Do you see?”
(The Great Gatsby, Chapter 1)

“…Nowadays people begin by sneering at family life and family institutions, and next they’ll throw everything overboard and have marriage between black and white.”
Flushed with his impassioned gibberish, he saw himself standing alone on the last barrier of civilization.
“We’re all white here,” murmured Jordan.
Angry as I was, as we all were, I was tempted to laugh whenever he opened his mouth. The transition from libertine to prig was so complete.
(The Great Gatsby, Chapter 7)

The Brexit phenomenon in the United Kingdom is not identical but does overlap (i.e., the “left behind” people in England want “historical ethnic-national tenure” and a kind of re-segregation).

Education: Disease, History and Lit

The Italian writer Giovanni Boccaccio lived through the plague as it ravaged the city of Florence in 1348. The experience inspired him to write The Decameron.

The Plague of 1665 in England was a major upheaval affecting Isaac Newton’s life.

The 1984 movie, A Passage to India (David Lean) set in 1920s India, has a scene where the ever-present lethal threat of cholera is discussed as Doctor Aziz lies sick of a fever.

The W. Somerset Maugham novel, The Painted Veil (2006 movie) is also about cholera in the Chinese countryside in the 1920s.

Manzoni’s 1827 The Betrothed, the most famous classic novel of Italian literature, centers on the plague to drive the story.

Overview:

Etymologically, the term “pest” derives from the Latin word “pestis” (pest, plague, curse). Hardly any disease had such cultural and historical relevance as the bubonic plague. Throughout the centuries, the plague was the most terrifying infectious contagious disease which generated a series of demographic crises. The plague epidemics influenced the evolution of society biologically and culturally speaking. The Black Death was one of the most devastating pandemics in human history, is estimated to have killed 30%–60% of Europe’s population, reducing the world’s population from an estimated 450 million to between 350 and 375 million in 1400. This has been seen as having created a series of religious, social and economic upheavals, which had profound effects on the course of European history. It took 150 years for Europe’s population to recover.

The plague returned at various times, killing more people, until it left Europe in the 19^th century. Modern epidemiology (Dr. John Snow, London) has its roots in cholera management and water sanitation as well as waste management.

Education involves seeing disease as a major protagonist in all history and not as a footnote.

The classic Plagues and Peoples should accordingly be studied by every student: Plagues and Peoples is a book on epidemiological history by William Hardy McNeill, published in 1976.

It was a critical and popular success, offering a radically new interpretation of the extraordinary impact of infectious disease on cultures and world history itself.