Historical thinking is a lifelong attempt to link something called “then” to something called “now.” History as an academic field of study has a deep cleavage within it in that people like Foucault and Nietzsche think the links between then and now are often illusionary since history is mostly noise (i.e., disconnected chaos) and not “signal” (i.e., “cause and effect” chains of linear progress uncovered by “historian-detectives.”)
We explore this in this mini-essay by looking at the rise of what we call a service economy.
“He was enchanted by the conveniences of Paris, especially the numbers of quick efficient services, from catering to house-cleaning, which made it unnecessary to employ private servants.”
In our own day, the leading economic historian, R.M. Hartwell, in his classic essay, “The Service Revolution: The Growth of Services in Modern Economy 1700-1914” outlines a worldwide rise of services, and concludes his essay thus: “The lesson of history is undoubtedly, that was has already happened in the United States, will happen elsewhere, and that the trend in employment towards the services in all developed and developing economies will result finally in a world-wide service revolution.”
(The Fontana Economic History of Europe: The Industrial Revolution, Fontana/Collins, 1980, page 394)
This is an example of then and now analysis which is key to education.
Let us continue the past two essays:
We then use this kind of interesting “home-made puzzle” (one we made-up ourselves and did not read anywhere) and follow it up by entering the academic subject:
- Read the classic Manias, Panics and Crashes, the Prof. Kindleberger (MIT) classic.
- Discover that the Prof. Niall Ferguson miniseries on PBS, The Ascent of Money, doesn’t elucidate our particular query.
- Read Kevin Phillips’s Bad Money to get an introduction to the dangers of “over financialization.” (“hyper financialization”).
We then begin to think that the collapse of Barings Bank in recent years (Nick Leeson scandal) radiating out from Hong Kong office, is not disconnected from the Barings Bank scandals of 1890. Historical thinking wants to see an arc or trajectory or larger and wider process, and not as disconnected, episodic and completely random.
The Anglo-American financialization process has led to many anomalies.
You might legitimately date the modern beginnings of this mega-process from the 1873 classic by Walter Bagehot of The Economist in his book, Lombard Street, where London is described as the money machine that governs the world and its fluctuations.
Hank Paulson, U.S. Treasury Secretary and Ben Bernanke of the Fed, warned Congressmen in Washington, in September 2008, that the global financial system was on the brink of collapse and needed “infinite” bailout money by that Monday morning, after the weekend.
These problems have yet to be seriously addressed and we might be in a new “bubble” at the intersection of real estate and financial system pathologies (i.e., where the world economy tends to become a kind of “betting parlor”).