WEBVTT NOTE The European Miracle 1 00:00:00.000 --> 00:00:14.000 Thank you. Thank you very much. This week, my subject, as Mark mentioned, is going to be history as a struggle for liberty. 2 00:00:14.000 --> 00:00:24.000 This conception of history, of what history is, goes back to Lord Acton, a famous 19th century historian, 3 00:00:24.000 --> 00:00:40.000 Acton, a historian, who spent all his life accumulating notes and materials for what would be, he thought, his great history of liberty, the greatest book never written, people say. 4 00:00:40.000 --> 00:00:47.000 Nonetheless, Acton wrote many essays on the subject, and he's a historian well worth consulting. 5 00:00:47.000 --> 00:00:53.000 What I'm going to be discussing this week is classical liberalism. 6 00:00:53.000 --> 00:00:59.300 I might slip and just call it liberalism from time to time, so you'll understand what I'm saying. 7 00:00:59.300 --> 00:01:08.960 We'll be discussing its growth, its development, and finally, I'll say something about the possible future of liberalism. 8 00:01:08.960 --> 00:01:14.940 Now, the history of classical liberalism is intertwined in the history of Europe. 9 00:01:14.940 --> 00:01:20.780 Europe and its outposts, especially America, the Europe that sometimes has been defined 10 00:01:20.780 --> 00:01:31.260 as extending from Warsaw to San Francisco and one might amiably throw in also Vancouver and Melbourne. 11 00:01:32.780 --> 00:01:41.900 Some people would consider this a very Eurocentric kind of approach. Well, so here's the history of 12 00:01:41.900 --> 00:01:43.900 The Theory of Modern Science, Eurocentric. 13 00:01:43.900 --> 00:01:49.900 But anyway, the story that I'm going to be outlining 14 00:01:49.900 --> 00:01:54.900 will serve as an antidote to what some of you, at least, 15 00:01:54.900 --> 00:01:57.900 have experienced in your high schools and colleges 16 00:01:57.900 --> 00:02:02.900 and that is the demonization of Europe and Europeans 17 00:02:02.900 --> 00:02:07.900 as mass genocidal murderers and imperialist exploiters. 18 00:02:07.900 --> 00:02:37.900 If you doubt that this is standard in American education today, then you can read the works of Alan Kors, a professor at Penn, who specialized in this, a great scholar of the French, of France and the French Enlightenment otherwise, but has made it a point to detail how this demonization takes place through sensitivity training and many other 19 00:02:37.900 --> 00:02:45.900 Now, this view of the Europeans as genocidal murderers and demons and so on, much could be said about this. 20 00:02:45.900 --> 00:02:47.900 I'm not going to go into any great detail. 21 00:02:47.900 --> 00:02:54.900 The first thing that comes to mind is that Europeans, like everybody else, are subject to original sin 22 00:02:54.900 --> 00:03:06.600 to Original Sin, and have a proclivity to temptation of putting their own self-perceived 23 00:03:06.600 --> 00:03:13.040 interests above others to any extent that they feel necessary. Another thing that could 24 00:03:13.040 --> 00:03:19.680 be said is that power corrupts, as Acton famously said, and in the modern period it's Europeans 25 00:03:19.680 --> 00:03:31.680 It would be interesting to see what would have happened if it had been the Aztecs who landed in Spain rather than the other way around 26 00:03:31.680 --> 00:03:39.680 and what scenes we would have witnessed, Aztecs famous for their mass ritual murders and cannibalism 27 00:03:39.680 --> 00:03:48.680 and then finally I want to say that there were Europeans who opposed these various crimes of the men of power in their own countries 28 00:03:48.680 --> 00:04:08.680 Now, the first thing to say about liberalism is that it arose in Europe, specifically in Western Christendom, the Europe that grew up in communion with the Bishop of Rome, one time or another, so that the history of Europe and the history of liberalism are intimately intertwined. 29 00:04:08.680 --> 00:04:19.680 European Union with the Bishop of Rome, one time or another, so that the history of Europe and the history of liberalism are intimately intertwined. 30 00:04:19.680 --> 00:04:27.680 The question of why this should be the case has given rise to an enormous literature. 31 00:04:27.680 --> 00:04:35.680 And in this talk, as for all of my talks, if you have any questions about sources, bibliography and so on, 32 00:04:35.680 --> 00:04:55.680 This approach to trying to find out why Europe was different, why Europe was distinctive, is sometimes called the institutional approach of economic historians, or what I'll title today's talk, the institutional approach. 33 00:04:55.680 --> 00:05:04.600 was distinctive is sometimes called the institutional approach of economic historians or what I'll 34 00:05:04.600 --> 00:05:11.960 title today's talk could be called the European miracle after the title of a book by one of 35 00:05:11.960 --> 00:05:20.280 the major authors of this approach, E. L. Jones, the Australian economic historian. 36 00:05:20.280 --> 00:05:26.280 The miracle in question consists in the simple but momentous fact. 37 00:05:26.280 --> 00:05:33.280 It was in Europe that human beings first achieved per capita economic growth over a long period of time. 38 00:05:33.280 --> 00:05:39.280 In this way, European society eluded the Malthusian trap. 39 00:05:39.280 --> 00:05:44.280 This enabled new tens of millions, hundreds of millions really, to survive 40 00:05:44.280 --> 00:05:48.280 and enabled the population as a whole to escape the hopeless misery 41 00:05:48.280 --> 00:05:52.280 that had been the lot of the great bulk of the human race in earlier times. 42 00:05:54.280 --> 00:05:56.280 The question is, why Europe? 43 00:05:58.280 --> 00:06:05.280 Why is Europe in this way set apart from other great civilizations, China, India, Islam and so on? 44 00:06:06.280 --> 00:06:17.280 Geographic factors played a role, no doubt, but I think that Mises put his finger on the essential point when he wrote the following. 45 00:06:18.280 --> 00:06:24.280 The East lacked the primordial thing, the idea of freedom from the state. 46 00:06:24.280 --> 00:06:31.280 The East never raised the banner of freedom, it never tried to stress the rights of the individual against the power of rulers. 47 00:06:31.280 --> 00:06:35.280 It never called into question the arbitrariness of despots. 48 00:06:35.280 --> 00:06:46.280 And first of all, the East never established the legal framework that would protect the private citizens' wealth against confiscation on the part of tyrants. 49 00:06:46.280 --> 00:07:01.280 You know, by the way, this is typical of Mises. Mises was not primarily a historian. In my view, on the basis of what I know, he was the greatest economist of the 20th century. 50 00:07:01.280 --> 00:07:15.280 On the other hand, he had this ability to put his finger on the solution to some historical problem in a way that other professional historians weren't able to do. 51 00:07:15.280 --> 00:07:21.280 We'll see when we discuss the Industrial Revolution later on, he did the same thing there. 52 00:07:21.280 --> 00:07:29.280 Now, the question is, still, why was Europe in this kind of position? 53 00:07:29.280 --> 00:07:35.280 Now, one of the authors in this general school of thought that I'm talking about, 54 00:07:35.280 --> 00:07:40.280 John Bechler of Paris, by the way, it's an international movement, 55 00:07:40.280 --> 00:07:46.080 and Americans, British, French, Australians, I already mentioned. 56 00:07:46.080 --> 00:07:51.080 Jean Béchler, in the pioneering work, pointedly expressed it, as he said, 57 00:07:51.080 --> 00:08:01.000 The first condition for the maximization of economic efficiency is the liberation of civil society with respect to the state. 58 00:08:01.000 --> 00:08:10.000 The expansion of capitalism owes its origins and raison d'etre to political anarchy. 59 00:08:10.000 --> 00:08:13.000 We'll see what that means. 60 00:08:13.000 --> 00:08:19.000 Among others who have developed this is Douglas North, 61 00:08:19.000 --> 00:08:24.000 who won a Nobel Prize in Economics for his work in this area, 62 00:08:24.000 --> 00:08:26.000 in economic history. 63 00:08:26.000 --> 00:08:27.000 And North wrote, 64 00:08:27.000 --> 00:08:31.000 It was precisely the lack of large-scale political order 65 00:08:31.000 --> 00:08:35.000 that created the environment essential to economic growth 66 00:08:35.000 --> 00:08:39.000 and ultimately human freedoms in Europe. 67 00:08:39.000 --> 00:08:45.240 Now, this institutional approach was adumbrated by John Hicks, another Nobel Laureate in 68 00:08:45.240 --> 00:08:47.960 economics in the late 1960s. 69 00:08:47.960 --> 00:08:57.560 But the essentials of the view were sketched by a great economic historian, now emeritus 70 00:08:57.560 --> 00:09:05.080 from Harvard, David Landis, who by the way is no particular classical liberal, but he's 71 00:09:05.080 --> 00:09:35.080 and a book of his called The Unbound Prometheus and Landis said there were two factors that set Europe apart from the rest of the world the scope and effectiveness of private enterprise and the high value placed on the rational manipulation of the human and material environment and he continued the role of private enterprise in the West is perhaps unique more than any other factor 72 00:09:35.080 --> 00:09:39.080 It Made the Modern World 73 00:09:39.080 --> 00:09:46.080 Well, still, why was there this scope and leeway for private enterprise? 74 00:09:46.080 --> 00:09:55.080 Landis also points to the radical decentralization of Europe, 75 00:09:55.080 --> 00:09:59.080 what Bechler had called its political anarchy, and this is what he writes, 76 00:09:59.080 --> 00:10:07.080 Because of this crucial role in a context of multiple competing polities, 77 00:10:07.080 --> 00:10:10.080 the contrast is with the empires of the Orient and the ancient world, 78 00:10:10.080 --> 00:10:18.080 private enterprise in the West possessed a social and political vitality without precedent or counterpart. 79 00:10:18.080 --> 00:10:25.080 Now, of course, it wasn't a linear progression to some kind of libertarian utopia. 80 00:10:25.080 --> 00:10:31.080 However, we're talking relatively and in contrast to the other civilizations. 81 00:10:31.080 --> 00:10:41.080 Keep that in mind, there's radical decentralization based on a context of multiple competing polities. 82 00:10:41.080 --> 00:10:52.080 Beschlur, as others might well have written, says that this is the crucial non-event of European history. 83 00:10:52.080 --> 00:11:02.080 After the fall of Rome, no empire was able to arise in Europe to establish hegemony over the continent. 84 00:11:02.080 --> 00:11:06.080 There was no universal empire, although it was tried from time to time. 85 00:11:06.080 --> 00:11:16.080 Instead, Europe developed into a mosaic of kingdoms, principalities, city-states, ecclesiastical domains and other political entities. 86 00:11:16.080 --> 00:11:26.080 Within this system, it was highly imprudent for any prince to attempt to infringe the property rights in the manner that was customary elsewhere in the world. 87 00:11:26.080 --> 00:11:36.080 And these authors, again, I want to emphasize, they're not doctrinaire, if you want to call it that, libertarians or free market people for the most part. 88 00:11:36.080 --> 00:11:49.080 And they talk about the customary behavior of states as based on predatory taxation and continual confiscations. 89 00:11:49.080 --> 00:11:57.080 States throughout history have acted like the mafia does in some neighborhood, if there existed the mafia, which I can tell you that there doesn't. 90 00:11:57.080 --> 00:12:08.080 But if the mafia did exist, in particular ethnic neighborhoods, what they would very often do is pick out somebody who rises above the rest, 91 00:12:08.080 --> 00:12:16.080 who has higher assets, a successful doctor, a small businessman, and then the extortion starts with him. 92 00:12:16.080 --> 00:12:20.080 And this is what states have typically done through history. 93 00:12:20.080 --> 00:12:30.080 and Confiscations and Predatory Taxation. Taxation of the victim to the degree it's possible. 94 00:12:30.080 --> 00:12:40.080 Sometimes, in the case of the late Roman Empire, taxation beyond what was natural, what was rational, even for the predatory state, 95 00:12:40.080 --> 00:12:48.080 because the victim died from excessive taxation and regulation and inflation and so on. 96 00:12:48.080 --> 00:12:53.080 Now, so what does the decentralization of Europe have to do with this? 97 00:12:53.080 --> 00:13:01.080 It created the indispensable condition for what we're calling the European miracle 98 00:13:01.080 --> 00:13:15.080 and that is the possibility of exit, the term used by these scholars. 99 00:13:15.080 --> 00:13:32.180 To take an example, supposing you're a successful businessman in Antwerp or Amsterdam, and this 100 00:13:32.180 --> 00:13:37.720 did not happen historically because the rulers of these areas engaged in what was even from 101 00:13:37.720 --> 00:13:43.580 the state's point of view rational behavior, that is relatively light taxation and a relatively 102 00:13:43.580 --> 00:13:50.220 Light Hand and Respect for Private Property. But supposing that you were oppressed by the state, 103 00:13:50.220 --> 00:13:59.900 that the state was confiscating or heavily taxing your assets, you could exit, okay? You could exit 104 00:13:59.900 --> 00:14:06.140 within the whole cultural area of Christian Europe. You didn't have to go to a totally different 105 00:14:06.140 --> 00:14:11.980 civilization, okay? You could go across the North Sea to England. You could go down the Rhine River 106 00:14:11.980 --> 00:14:28.980 And this held generally, among the Italian city-states it certainly held, since it was very easy to go from one to another depending on how the state was treating you there. 107 00:14:28.980 --> 00:14:32.980 Now, this did not hold in every case, but it was a constant factor. 108 00:14:32.980 --> 00:14:43.980 and the possibility of exit created limitations to what the state could do to its productive citizens. 109 00:14:43.980 --> 00:14:59.980 Now, this story goes back many centuries, goes back into the Middle Ages, and by the way, this historical interpretation I'm giving you 110 00:14:59.980 --> 00:15:06.120 is has also been the basis of the works of other scholars Peter Bauer for instance 111 00:15:06.120 --> 00:15:11.780 the great Peter Bauer who died a few months ago in his work on economic 112 00:15:11.780 --> 00:15:15.880 development economic development of Europe vis-a-vis economic development of 113 00:15:15.880 --> 00:15:23.700 the Third World simply assumes this basic interpretation of why Europe grew 114 00:15:23.700 --> 00:15:53.300 Rich or Paul Kennedy of Yale in that book on the rise and decline of the great empires assumes this basis as his basis this interpretation or William McNeill of Chicago and his other synthetic works on European history assumes this as a correct interpretation and Peter Bauer said in one of his essays that this 115 00:15:53.300 --> 00:15:59.460 is economic development goes back at least seven, eight centuries, which means into the 116 00:15:59.460 --> 00:16:02.940 heart of the Middle Ages. 117 00:16:02.940 --> 00:16:08.220 So we have to examine something about the Middle Ages to explain why Europe was different. 118 00:16:08.220 --> 00:16:12.180 And in fact it is in the Middle Ages that what we call Europe, Europe not the geographical 119 00:16:12.180 --> 00:16:18.220 continent but Europe the civilization, came into existence. 120 00:16:18.220 --> 00:16:25.980 Here, there are a number of important factors, feudalism, that is the European version of 121 00:16:25.980 --> 00:16:33.500 feudalism played a role, in Russia for instance, there was a nobility, however it was based 122 00:16:33.500 --> 00:16:40.040 on state appointed dukes, archdukes, counts and whatever. 123 00:16:40.040 --> 00:16:47.660 In Europe, feudalism was based on a contractual relationship between powerful lords and the 124 00:16:47.660 --> 00:16:54.220 and King, contractual, that is, there were obligations and duties on both sides and already 125 00:16:54.220 --> 00:17:01.340 some limits were placed on what the prince or the king might do. 126 00:17:01.340 --> 00:17:06.180 Within each of these realms, which were relatively small anyway, there was often a struggle for 127 00:17:06.180 --> 00:17:14.340 power and this gave rise to distinctive European institutions, again, distinctive as part of 128 00:17:14.340 --> 00:17:22.100 The general distinction of Europe, representative bodies, which didn't exist in other civilizations, 129 00:17:22.100 --> 00:17:28.540 representative bodies of the tax-paying public, and we'll get into that in a while. 130 00:17:28.540 --> 00:17:33.660 They were parliaments, or in France, the Estates General, or the Provincial Estates, and Castile, 131 00:17:33.660 --> 00:17:37.100 the Cortes, but they existed throughout Europe. 132 00:17:37.100 --> 00:17:41.140 There was, I think, no area of Europe that didn't have such a parliamentary representative 133 00:17:41.140 --> 00:17:48.700 of Body, certainly the different parts of the low countries did, Scandinavia also, Castile, 134 00:17:48.700 --> 00:17:53.420 when I mentioned the Cortes, but there was also Cortes in Aragon, there was a parliament 135 00:17:53.420 --> 00:18:02.760 in Sicily, in Naples, in the German states, in Hungary, in Poland, throughout Europe. 136 00:18:02.760 --> 00:18:07.860 Princes often found their hands tied by charters of rights, which they were forced to grant 137 00:18:07.860 --> 00:18:14.860 The Magna Carta is the best known of these. I'll talk about this in a few minutes. But there were many others. 138 00:18:14.860 --> 00:18:25.860 And we'll mention the low countries later. So I should say there's a famous similar document called the Joyous Entry of Brabant, 139 00:18:25.860 --> 00:18:33.860 which each ruler of what is today Belgium and the Netherlands and Holland had to agree to on his ascension to power. 140 00:18:33.860 --> 00:18:46.860 This stipulated that no new taxes would be imposed without the consent of the various diets of the different parts of what are today Belgium and the Netherlands. 141 00:18:46.860 --> 00:18:56.860 No new customs contrary to the traditions of the areas to be introduced, no foreign office holders and so on. 142 00:18:56.860 --> 00:19:05.860 In other words, what we had in that very important area of the Low Countries, similar to the Magna Carta. 143 00:19:05.860 --> 00:19:12.860 Now, perhaps more crucial than anything else in the whole distinctive development of Europe, 144 00:19:12.860 --> 00:19:23.860 was the existence of a powerful international church whose interests were not synonymous or often really compatible with the interests of the state. 145 00:19:23.860 --> 00:19:48.860 Lord Acton, who was a Catholic, emphasized this, but it's not something that you have to be a Catholic in order to agree to, I mean it's a question of what is actually the historical development, and you could be a free thinker, you could be a Protestant, and as a matter of fact, today there are scholars who are not Christians at all, who think that the role of the Catholic Church was crucial. 146 00:19:48.860 --> 00:19:58.860 Now, we should not be thinking of, and in this context we're not involving ourselves with, 147 00:19:58.860 --> 00:20:03.860 the post-Reformation or especially the post-French Revolution church. 148 00:20:03.860 --> 00:20:09.860 There there were problems and you found the church coming closer to the state, 149 00:20:09.860 --> 00:20:13.860 coming closer especially to Catholic rulers and each one using the other. 150 00:20:13.860 --> 00:20:24.860 The critical point was, again, the Middle Ages, and there you had an adversarial position between the church and the state that was, in fact, crucial. 151 00:20:24.860 --> 00:20:30.860 And it goes back even before the Middle Ages to the first centuries of the church. 152 00:20:30.860 --> 00:20:54.860 When I was, there may be those of you who are addicted not only to lewrockwell.com, which of course is a mass phenomenon now, but the LRC blog, okay, and as far as I'm concerned they could have LRC blog 2, blog 3 and so on and still wouldn't be enough for me. 153 00:20:54.860 --> 00:21:07.860 You might have noticed that I had an item, I think it was on the blog, about a terrific painting I saw at the National Gallery in London recently that I had never been aware of. 154 00:21:07.860 --> 00:21:22.860 It was by Van Dyck, a Flemish painter, and it showed St. Ambrose blocking the entrance to the Cathedral of Milan to the Emperor, Emperor Theodosius. 155 00:21:22.860 --> 00:21:31.860 Theodosius, because Theodosius had been involved in the massacre of many innocents in Thessalonica 156 00:21:31.860 --> 00:21:39.220 in the eastern Mediterranean, and this was considered a sin by St. Ambrose that the emperor 157 00:21:39.220 --> 00:21:41.940 had not repented of. 158 00:21:41.940 --> 00:21:46.620 This was around late fourth century, so it's not the Great War Memorial of Milan that you 159 00:21:46.620 --> 00:21:51.220 see now, but it was a forerunner cathedral, and St. Ambrose, of course, was the Archbishop 160 00:21:51.220 --> 00:21:56.420 of Milan and the man who converted St. Augustine to Christianity. 161 00:21:56.420 --> 00:22:03.900 So the painting demonstrates, it's a small group of people, demonstrates in a very stark 162 00:22:03.900 --> 00:22:09.600 kind of way that the Archbishop is standing there in front of the doorway and the Emperor 163 00:22:09.600 --> 00:22:12.540 Theodosius had never experienced such a thing. 164 00:22:12.540 --> 00:22:18.380 You can see that he's enraged, he's totally frustrated. 165 00:22:18.380 --> 00:22:24.640 What is this churchman doing preventing me from entering a building of my empire? 166 00:22:24.640 --> 00:22:29.620 But the emperor is not permitted to come into the building. 167 00:22:29.620 --> 00:22:40.680 Now this is another example of the conflict between Ambrose and Theodosius. 168 00:22:40.680 --> 00:22:46.980 Theodosius demanded that Ambrose hand over the cathedral to the emperor, and Ambrose 169 00:22:46.980 --> 00:22:49.200 responded, 170 00:22:49.200 --> 00:22:53.240 It is not lawful for us to deliver it up, nor for your majesty to receive it. 171 00:22:53.240 --> 00:22:58.020 By no law can you violate the house of a private man. 172 00:22:58.020 --> 00:23:01.140 And do you think that the house of God may be taken away? 173 00:23:01.140 --> 00:23:05.280 It is asserted that all things are lawful to the emperor, that all things are his. 174 00:23:05.280 --> 00:23:09.580 But do not burden your conscience with the thought that you have any right as emperor 175 00:23:09.580 --> 00:23:12.020 over sacred things. 176 00:23:12.020 --> 00:23:18.020 It is written, God's to God and Caesar's to Caesar. The palace is the emperor's, the churches are the bishop's. 177 00:23:18.020 --> 00:23:22.020 That statement, by the way, of course, comes from the New Testament. 178 00:23:22.020 --> 00:23:25.020 Render unto Caesar what is Caesar's, unto God what is God's. 179 00:23:25.020 --> 00:23:36.020 And Lord Acton had early in his career identified that as, in his view, the origin of the idea of liberty. 180 00:23:36.020 --> 00:23:40.020 That is, that there is a realm that is not the states. 181 00:23:40.020 --> 00:23:45.020 A division now between what belongs to the state and what belongs to God. 182 00:23:45.020 --> 00:23:52.020 Whereas ancient polities, the Greeks and the Romans, especially the later Roman Empire, 183 00:23:52.020 --> 00:23:59.020 did not make this distinction between what belonged to the state and what belonged to the gods. 184 00:23:59.020 --> 00:24:05.020 In the late Roman Empire, the emperors themselves were gods. 185 00:24:05.020 --> 00:24:12.220 Now, as a matter of fact, Ambrose, who was, as I mentioned, responsible for the conversion of St. Augustine, 186 00:24:12.220 --> 00:24:17.660 well, now with St. Augustine we have an interesting development in his work on the City of God, 187 00:24:17.660 --> 00:24:24.700 what has been called the desacralization of the state, the desacralization of the state. 188 00:24:24.700 --> 00:24:37.100 In the Roman Empire, Roma was a god with particular sacrifices and religious obligations due to this god 189 00:24:38.140 --> 00:24:47.980 representing the Roman state. Among the sacrifices, the very stark kind of sacrifices 190 00:24:47.980 --> 00:24:53.740 were the ones that you would see in the Coliseum, the sacrifices of Rome's enemies. 191 00:24:54.700 --> 00:25:23.700 in ways that are not even shown on Fox TV today, but what Augustine said was that this is Rome, Rome Schmoam, this is the city of man, what is important is the city of God, our eventual and permanent habitation, and the city of God is infinitely more important than the city of man. 192 00:25:23.700 --> 00:25:31.700 Desacralizing the State, which had been considered God-like by the Romans. 193 00:25:31.700 --> 00:25:50.700 Now, much could be said about this adversarial position and hostile interaction between the State and the Catholic Church in the Middle Ages. 194 00:25:50.700 --> 00:25:59.700 One important thing to keep in mind is that this did not hold for Christianity in general. 195 00:25:59.700 --> 00:26:05.700 In Byzantine Christianity, for instance, there prevailed what's called Caesaropapism, 196 00:26:05.700 --> 00:26:12.700 and that is the situation where the church was pretty much under the thumb of the emperor. 197 00:26:12.700 --> 00:26:16.700 And this was characteristic of Greek Christianity, 198 00:26:16.700 --> 00:26:34.700 And this is the kind of Christianity that the Russians inherited, so that under the Russian rulers and the Tsars, as they took that title, they were effectively in charge of the church, different kind of situation from Europe. 199 00:26:34.700 --> 00:26:41.700 And again, we come across this idea of decentralization, division of power. 200 00:26:41.700 --> 00:26:51.200 It was important because of the different small decentralized polities and especially this big division between the state and the church. 201 00:26:51.200 --> 00:27:00.200 Whereas in other civilizations the ruler himself was God, I mentioned Rome or Pharaoh or the emperor of Japan, 202 00:27:00.200 --> 00:27:05.200 the direct descendant of the goddess of the sun or the emperor of China and so on. 203 00:27:05.200 --> 00:27:10.200 It was quite different in the West. 204 00:27:10.200 --> 00:27:14.200 And we can see this in a number of different ways. 205 00:27:14.200 --> 00:27:18.200 And the role of the church, you know, 206 00:27:18.200 --> 00:27:22.200 I was talking to Mark before about 207 00:27:22.200 --> 00:27:26.200 teaching students, and I don't understand why 208 00:27:26.200 --> 00:27:30.200 this happens. It is 209 00:27:30.200 --> 00:27:34.200 almost literally impossible for me to convince 210 00:27:34.200 --> 00:27:38.200 my students that the Middle Ages were not the Dark Ages. 211 00:27:38.200 --> 00:27:45.000 This was maybe the biggest, or one of the biggest, next to the myth of the Industrial Revolution, 212 00:27:45.000 --> 00:27:53.240 one of the biggest historical frauds perpetrated by Renaissance humanists and French philosophs, 213 00:27:55.160 --> 00:28:03.480 Middle Ages, the Dark Ages, go and see Chartres Cathedral, read Dante, the Dark Ages, or Thomas 214 00:28:03.480 --> 00:28:18.480 It was Aquinas, right, the dark ages, but one thing in particular I tell my students is that in the middle ages, in the high middle ages, after scholastic philosophy had been established, 215 00:28:18.480 --> 00:28:29.480 it was universally taught in every university from Oxford to Salamanca to the Jagiellonian University of Krakow that the prince was under the law. 216 00:28:29.480 --> 00:28:33.480 The ruler himself had to obey the law. 217 00:28:33.480 --> 00:28:41.480 Then, on an exam, which is becoming increasingly simple, 218 00:28:41.480 --> 00:28:45.480 because I don't want to flunk the whole class, right? It doesn't look good. 219 00:28:45.480 --> 00:28:47.480 It's a true or false question. 220 00:28:47.480 --> 00:28:52.480 In the Middle Ages, it was considered that the ruler, the prince, could do anything he wanted. 221 00:28:52.480 --> 00:28:56.480 True or false? Almost everybody writes true. 222 00:28:56.480 --> 00:29:05.480 Even when I tell them, as I'm teaching the course, write this down, it doesn't make any difference. 223 00:29:05.480 --> 00:29:10.480 And when we talk about the Industrial Revolution, I think we'll see the same thing. It doesn't make any difference. 224 00:29:10.480 --> 00:29:13.480 It doesn't make any difference what economic historians say. 225 00:29:13.480 --> 00:29:22.480 Still, everybody has in their minds a picture of the Industrial Revolution as causing infinite misery to working people. 226 00:29:22.480 --> 00:29:25.480 It's impossible to eradicate. 227 00:29:25.480 --> 00:29:34.480 Well, I don't know if you know the name Jacob Viner, who's a great economic historian and scholar at the University of Chicago. 228 00:29:34.480 --> 00:29:51.480 And he mentions, for instance, a reference to taxation by St. Thomas Aquinas, where Viner says Aquinas treats taxation as more or less an extraordinary act of a ruler, 229 00:29:51.480 --> 00:30:04.840 Ruler, which is as likely as not to be morally illicit, republished every year into the late 230 00:30:04.840 --> 00:30:10.960 18th century, which threatened to excommunicate any ruler, quote, who levied new taxes or 231 00:30:10.960 --> 00:30:16.680 increased old ones, except for cases supported by law, by an express permission from the 232 00:30:16.680 --> 00:30:17.680 Pope. 233 00:30:17.680 --> 00:30:27.680 Well, the last part, the Catholic, the Popes were not into this adversarial situation for their health. 234 00:30:27.680 --> 00:30:30.680 It was a question of one power against another power. 235 00:30:30.680 --> 00:30:38.680 It was good for us that there was a countervailing power to the state in the West that did not exist in other civilizations. 236 00:30:38.680 --> 00:30:46.680 But nonetheless, here Thomas Aquinas himself, talking about taxation as probably illicit, 237 00:30:46.680 --> 00:30:56.680 New Taxes is illicit and this papal bull is saying that they were not permitted except with papal control. 238 00:30:56.680 --> 00:31:10.680 By the way, there's a series of books published by Stanford under the general inspiration of John Hexter 239 00:31:10.680 --> 00:31:16.680 And one of them, for instance, is called the Origins of Modern Freedom in the West. 240 00:31:16.680 --> 00:31:22.680 I have almost all of them, and they're mostly very, very useful. 241 00:31:22.680 --> 00:31:29.680 Here's a quotation by one of the contributors to this volume, The Origins of Modern Freedom in the West, 242 00:31:29.680 --> 00:31:35.680 Professor Koenigsberger, 243 00:31:35.680 --> 00:31:40.940 Almost everywhere in Latin Christendom the principle was, at one time or another, accepted 244 00:31:40.940 --> 00:31:47.000 by the rulers that apart from the normal revenues of the prince, no taxes could be imposed without 245 00:31:47.000 --> 00:31:49.800 the consent of parliament. 246 00:31:49.800 --> 00:31:54.460 By using the power of the purse, the parliaments often influenced the ruler's policy, policies 247 00:31:54.460 --> 00:32:01.500 especially restraining them from military adventures. 248 00:32:01.500 --> 00:32:04.300 All of that is important. 249 00:32:04.300 --> 00:32:34.300 In the parliaments, in England for instance, the House of Commons as well as the House of Lords, in the Italian city-states, in the low countries, the representative assemblies were elected generally by taxpayers, very different from the modern situation where you have mass electoral democracy and now the income tax has been 250 00:32:34.300 --> 00:32:44.300 given back to people paying low taxes, so it's a smaller and smaller part of the population that pays the income tax in the United States, 251 00:32:44.300 --> 00:32:50.300 whereas the rest of the people have an interest in increasing taxes, since they feel they can get benefits from it. 252 00:32:50.300 --> 00:32:57.300 But in the Middle Ages, into the modern period, it was taxpayers who were represented in these different assemblies. 253 00:32:57.300 --> 00:33:12.300 So when people talk about, let's say, the democratic factor in the Dutch cities or in the Italian city-states, it's not to be understood in the sense of present-day democracy. 254 00:33:12.300 --> 00:33:25.300 It's not mass democracy by any means, it's democracy of the taxpayers. And that was what was involved in these assemblies. 255 00:33:25.300 --> 00:33:34.840 Now, I mentioned representative assemblies, there was also the general scholastic philosophy 256 00:33:34.840 --> 00:33:47.400 of natural law, and I mentioned the different charters granted by rulers and acting as sets 257 00:33:47.400 --> 00:33:49.860 of limitations on their power. 258 00:33:49.860 --> 00:33:58.740 Most famous is the Magna Carta in English history, not famous to my students, who I 259 00:33:58.740 --> 00:34:07.860 think, you know, they're not that bad, they're just kind of average, but they've all heard 260 00:34:07.860 --> 00:34:15.420 of a lady called Harriet Tubman, I don't know, maybe somebody can tell me afterwards, many 261 00:34:15.420 --> 00:34:22.860 Many, many fewer of them, virtually none of them, know who Martin Luther King was named after. 262 00:34:22.860 --> 00:34:30.700 And as for things like the Magna Carta, well, it's pretty much a mystery. 263 00:34:30.700 --> 00:34:41.100 The barons of England, the lords, spiritual and temporal, forced Bad King John to sign 264 00:34:41.100 --> 00:34:50.980 In this great charter, the Magna Carta, you can look it up, it's not very long, and naturally, 265 00:34:50.980 --> 00:34:57.120 considering the age it comes from, there's a good deal of the medieval to it, explicitly 266 00:34:57.120 --> 00:35:06.900 and also in the general tenor, and nonetheless, what's been established comes through. 267 00:35:06.900 --> 00:35:16.900 Here's one chapter, no scutage nor aid, basically taxes, shall be imposed on our kingdom unless by common council of our kingdom, 268 00:35:16.900 --> 00:35:23.900 already now we have the beginning of the right of a representative assembly to okay new taxes, 269 00:35:23.900 --> 00:35:32.900 except for ransoming our person or making our eldest son a knight, and for once marrying our eldest daughter, 270 00:35:32.900 --> 00:35:41.500 So, in other words, you have the medieval element there, but nonetheless a limitation on arbitrary taxation. 271 00:35:41.500 --> 00:35:46.500 There has to be a common council involved. 272 00:35:46.500 --> 00:35:47.900 Another item. 273 00:35:47.900 --> 00:35:53.900 No constable or other bailiff of hours shall take corn, that is, in the British sense that is grain, 274 00:35:53.900 --> 00:35:58.200 or other provisions from anyone without immediately tendering money, 275 00:35:58.200 --> 00:36:02.760 Therefore, unless he can have postponement thereof by permission of the seller, 276 00:36:04.920 --> 00:36:12.680 he can't simply send the soldiers out among the peasants and take their harvest away. 277 00:36:13.240 --> 00:36:15.640 He can't act like the Bolsheviks in the Ukraine. 278 00:36:17.560 --> 00:36:18.760 Here's another one. 279 00:36:18.760 --> 00:36:25.000 No sheriff or bailiff of ours or other person shall take the horses or carts of any freemen 280 00:36:25.000 --> 00:36:29.400 for transport duty against the will of the said freemen. 281 00:36:29.400 --> 00:36:35.000 Horses or carts, obviously basically agricultural society, 282 00:36:35.000 --> 00:36:40.760 but the king's men can't just go and take it because they need it. 283 00:36:40.760 --> 00:36:44.600 They have to pay for it. 284 00:36:44.600 --> 00:36:51.160 No freeman shall be taken and imprisoned or exiled or in any way destroyed, 285 00:36:51.160 --> 00:36:58.160 Nor will we go upon him, nor send upon him, except by the lawful judgment of his peers and the law of the land. 286 00:36:58.160 --> 00:37:04.160 The rule of law and trial by jury. 287 00:37:04.160 --> 00:37:14.160 Another item, all merchants shall have safe and secure exit from England, an entry to England with the right to tarry there and to move about as well by land as by water, 288 00:37:14.160 --> 00:37:29.160 Except in time of war, such merchants being from the land at war with us, and if such are found in our land at the beginning of the war, they shall be detained without injury to their bodies or goods. 289 00:37:29.160 --> 00:37:36.160 Again, respect for private property, for commercial freedom, even for enemy aliens. 290 00:37:36.160 --> 00:37:53.160 Many other items that are irrelevant now, and then, this is longer than it seems because it's both in Latin and in English. 291 00:37:53.160 --> 00:38:03.160 Finally, whereof, and this is what the king was forced to sign, whereof it is our will and we firmly enjoin that the English church be free, 292 00:38:03.160 --> 00:38:14.160 that the men of our Kingdom have and hold all the aforesaid liberties, rights and concessions fully and wholly for themselves and their heirs by us and our heirs. 293 00:38:14.160 --> 00:38:22.160 Pledging the future rulers of England to these rights. 294 00:38:22.160 --> 00:38:28.160 Given under our hand in the meadow which is called Runnymede 295 00:38:28.160 --> 00:38:37.160 Between the Rivers Windsor and Staines on the 15th of June, the 17th year of our reign, the year of our Lord, 1415. 296 00:38:37.160 --> 00:38:45.160 Now a committee is set up of the Barons to enforce this, to make sure that Bad King John does what he promises to do. 297 00:38:45.160 --> 00:38:50.160 And the first name on the committee is Stephen Langton, the Archbishop of Canterbury. 298 00:38:50.160 --> 00:38:54.160 Catholic Archbishop, of course, in those days. 299 00:38:54.160 --> 00:39:04.160 So what you have here is, in this case, the Catholic Church throwing its weight into the balance against the power of the secular ruler. 300 00:39:04.160 --> 00:39:18.160 I want to emphasize that this is not something that you have to be a Catholic to believe by any means. 301 00:39:18.160 --> 00:39:33.160 It's a certain interpretation of medieval history and the rise of the West, which many people who are not Catholic, I'll take P.T. Power for instance, who is a Budapest Jew, also adhere to. 302 00:39:33.160 --> 00:39:43.160 Now, we can make clearer what's involved here if we contrast Europe with other civilizations. 303 00:39:43.160 --> 00:39:57.200 With the East or with another Christian civilization that is Russia, already the 304 00:39:57.200 --> 00:40:07.480 contrast of the East was an established view in the Middle Ages themselves. In the 13th century, 305 00:40:07.480 --> 00:40:24.480 The German Emperor, Friedrich II Hohenstaufen, who has been called by some the first totalitarian ruler, that is, he tried as much as he could to establish totalitarian control. 306 00:40:24.480 --> 00:40:32.480 He was a holy Roman Emperor and ruler of Germany, but he made his court in the south of Europe. 307 00:40:32.480 --> 00:40:39.320 of Europe, he prohibited the inhabitants of Sicily or Naples from going to other places 308 00:40:39.320 --> 00:40:45.120 to study at the university, wanted to keep control, he established what would be a prototype 309 00:40:45.120 --> 00:40:52.400 of the secret police and he was involved famously in a conflict with the papacy and defeated 310 00:40:52.400 --> 00:40:53.400 ultimately. 311 00:40:53.400 --> 00:41:01.680 In one of his writings, Frederick praised happy Asia, Felix Asia, by Asia meant anywhere 312 00:41:01.680 --> 00:41:09.720 in the East, as he says, where rulers need not fear the weapons of their subjects and 313 00:41:09.720 --> 00:41:17.720 the machinations of priests, putting together two very interesting elements, that is the 314 00:41:17.720 --> 00:41:25.920 right to keep and bear arms, which the Europeans had, which the late Romans had abandoned, 315 00:41:25.920 --> 00:41:31.760 of which the Germanic people made into a sign of a free man from the early years. 316 00:41:31.760 --> 00:41:36.960 In fact, while there were still barbarians on the other side of the Rhine, when they 317 00:41:36.960 --> 00:41:41.520 would get together and counsel, something was being suggested by the chieftain, the 318 00:41:41.520 --> 00:41:48.960 free men would signal their agreement by clashing their arms together, their weapons together. 319 00:41:48.960 --> 00:41:55.480 And that became, among the Anglo-Saxons, a settled individual right, I'll probably mention 320 00:41:55.480 --> 00:41:58.120 in some of the lecture. 321 00:41:58.120 --> 00:42:06.800 So what Frederic II hated was the fact that his subjects seemed to have weapons all around 322 00:42:06.800 --> 00:42:07.800 the place. 323 00:42:07.800 --> 00:42:15.360 The Iraqi people, as you know, being helped towards ultimate freedom and self-determination 324 00:42:15.360 --> 00:42:18.800 by taking their guns away. 325 00:42:18.800 --> 00:42:26.700 And also, Frederic II was worried about the machinations of priests, trying to subvert 326 00:42:26.700 --> 00:42:29.360 the ruler at all times. 327 00:42:29.360 --> 00:42:31.400 Now we can go on to the 17th century. 328 00:42:31.400 --> 00:42:41.320 There was a famous Frenchman named Francois Bernier who visited really many different 329 00:42:41.320 --> 00:42:42.320 places. 330 00:42:42.320 --> 00:42:52.320 He was trained as a physician at the famous medical school at Montpellier in the south of France. 331 00:42:52.320 --> 00:43:00.320 So, as a physician, he went to many different places, even down in Ethiopia, Persia, but especially in India, 332 00:43:00.320 --> 00:43:05.320 and wrote about his experiences there. 333 00:43:05.320 --> 00:43:21.320 And his return to France, he published Travels in the Mogul Empire, that is the empire over India, which incidentally later became the basis of Karl Marx's concept of the Asiatic mode of production. 334 00:43:21.320 --> 00:43:32.320 This is what Menger says, Because of the capidity of the tyrant, when wealth is acquired, the possessor studies the means by which he may appear indigent. 335 00:43:32.320 --> 00:43:38.320 In the meantime, his gold and silver remain buried at a great depth in the ground. 336 00:43:38.320 --> 00:43:49.320 Remember the Arabian Nights stories about the treasure, maybe sometimes guarded by cobras or something, gold and silver and diamonds and so on? 337 00:43:49.320 --> 00:43:56.320 Why do people have treasure in that form? Why are they hiding their wealth? 338 00:43:56.320 --> 00:44:11.320 The Dutch did not hide their wealth, as we'll see, they put their wealth into the herring boats that traveled throughout the North Sea and into the Baltic Sea, enormously productive, even for the late Middle Ages. 339 00:44:11.320 --> 00:44:19.320 Why in the East was this custom established of hiding wealth on the part of productive citizens? 340 00:44:19.320 --> 00:44:39.320 Bernier gives a reason, and confirmed by historians, because there was no rule of law protecting private property, and when property accumulated to a certain degree, the tyrant who has the soldiers, who has the guns or swords, simply went and confiscated it. 341 00:44:39.320 --> 00:45:09.320 Bernier, The Nations of Asia have no idea of the principle of maim and taim, of mine and thine, relative to land or other real possessions, and having lost that respect for the right of property, which is the basis of all that is good and useful in the world, necessarily resemble each other in the essential points, they fall into the same pernicious errors and have to suffer tyranny, ruin and misery. 342 00:45:09.320 --> 00:45:13.720 more along the same lines with Bernier on the basis of his personal experience. 343 00:45:13.720 --> 00:45:20.960 Now one interesting thing about this is that many of these observations were written to 344 00:45:20.960 --> 00:45:24.720 the minister of Louis XIV, Colbert. 345 00:45:24.720 --> 00:45:31.200 Now in the history of European economic development, Colbert is known as kind of the ideal type 346 00:45:31.200 --> 00:45:34.480 of the mercantilist minister. 347 00:45:34.480 --> 00:45:43.480 Now, my point is that even in regard to a minister who is not the total believer in free trade, 348 00:45:43.480 --> 00:45:51.480 Bernier is saying the East doesn't even have what we have in France, basic protection of private property. 349 00:45:51.480 --> 00:45:58.480 In other words, Colbert would go down as somebody who's really a government interventionist and really a prime mercantilist, 350 00:45:58.480 --> 00:46:13.480 But nonetheless, even under mercantilism, the Europeans had this regard for private property, sanctity of contracts and so on that allowed them to develop in contrast to the East. 351 00:46:13.480 --> 00:46:23.480 Now, I could send you some information, incidentally, in regard to Japan. 352 00:46:23.480 --> 00:46:31.480 Baschler says when you want to talk about China, each time China was politically divided, capitalism flourished. 353 00:46:31.480 --> 00:46:35.480 Now in regard to Japan, there's a very interesting situation. 354 00:46:35.480 --> 00:46:47.480 The stereotype has it that the Japanese were, what, hopelessly backwards, Third World and so on, until Commodore Perry came and introduced them to the modern world. 355 00:46:47.480 --> 00:47:00.480 The fact of the matter is that in the previous centuries, about two centuries or so, called the Tokugawa period, Japan flourished economically. 356 00:47:00.480 --> 00:47:10.480 And this has been investigated by economic historians who come to the conclusion that the Japanese situation in some ways resembled Europe also. 357 00:47:10.480 --> 00:47:36.480 Also, that is, you had a feudal class, you had a merchant class with guaranteed property rights in the towns, you had a stock exchange in Japan, you had defined rights, including rights to water, you had defined rights of individuals in their own labor, and if you like, I can send you references in this connection. 358 00:47:36.480 --> 00:47:45.480 So in other words, you had the kind of institutional infrastructure in Japan in a way similar to the one that existed in Europe. 359 00:47:45.480 --> 00:47:51.480 Now, when we talk about Russia, we have a different situation, unfortunately. 360 00:47:51.480 --> 00:47:55.480 And this is not to say anything against the great Russian people. 361 00:47:55.480 --> 00:48:00.480 I mean, everybody, in a way, is a victim of the history of the society they're born into. 362 00:48:00.480 --> 00:48:06.480 and the Russian people are one of the great peoples of Europe. 363 00:48:06.480 --> 00:48:13.480 Nonetheless, they are burdened by history that deviates from the mainstream history of Europe. 364 00:48:13.480 --> 00:48:23.480 It was very, very late that any limitations were put on the power of the ruler at all, 365 00:48:23.480 --> 00:48:29.480 maybe in the 18th century with Catherine the Great who was converted to free trade for a while. 366 00:48:29.480 --> 00:48:36.200 for a while. But if you take Peter the Great, for instance, around the year 1700, who wanted 367 00:48:36.200 --> 00:48:42.120 to modernize Russia, every once in a while some ruler comes along and says, Lord, heavens, 368 00:48:42.120 --> 00:48:46.920 we're so far behind Europe, we have to do something about it, let's modernize. So he 369 00:48:46.920 --> 00:48:55.760 built his new capital in St. Petersburg with serf labor, of course. And then he'd taken 370 00:48:55.760 --> 00:49:02.760 Peter the Great was on a famous trip to Europe. It's a very interesting story, look it up sometimes, about Peter the Great. 371 00:49:02.760 --> 00:49:09.760 Sometimes he was disguised as an ordinary seaman, but he was stunned by what he found in Europe. 372 00:49:09.760 --> 00:49:18.760 And the present Russian flag, by the way, has the same colors as the Dutch flag, introduced by Peter the Great. 373 00:49:18.760 --> 00:49:24.640 But he saw that Europe had entrepreneurs, had capitalists, had development of modern 374 00:49:24.640 --> 00:49:29.880 industry, had a high standard of living compared to the Russian masses. 375 00:49:29.880 --> 00:49:42.840 So he decided to do the same thing in Russia, and he began by a draft, conscription of entrepreneurs 376 00:49:42.840 --> 00:49:47.560 to put them in charge of new factories, of mines. 377 00:49:47.560 --> 00:49:53.080 What he didn't begin with was the definition of property rights, which by that time had 378 00:49:53.080 --> 00:49:57.920 been well-established in Europe. 379 00:49:57.920 --> 00:50:05.920 And so this is a problem through Russian history, what's going to happen to the Russians, impossible 380 00:50:05.920 --> 00:50:07.500 to say. 381 00:50:07.500 --> 00:50:13.980 But there is a case history of a society that deviated from Europe, but we can talk about 382 00:50:13.980 --> 00:50:17.580 and Spain would be another example. 383 00:50:17.580 --> 00:50:26.020 Now the book that you've all been reading assiduously, I don't see that everyone has 384 00:50:26.020 --> 00:50:27.020 a copy. 385 00:50:27.020 --> 00:50:29.020 Marco, where's your copy? 386 00:50:29.020 --> 00:50:30.020 Upstairs. 387 00:50:30.020 --> 00:50:31.020 Okay. 388 00:50:31.020 --> 00:50:37.900 How the West Grew Rich has a few pages on Spain that are worth looking at. 389 00:50:37.900 --> 00:50:43.500 And of course there's a whole other literature that is in support. 390 00:50:43.500 --> 00:50:51.660 But we can take a positive example and positive model from the European development and that 391 00:50:51.660 --> 00:51:01.100 is the Dutch experiment. 392 00:51:01.100 --> 00:51:06.900 The Low Countries, that is what is today basically the Netherlands and Belgium, had long benefited 393 00:51:06.900 --> 00:51:14.660 Inherited from the legal system, inherited from the dukes of Burgundy who rule the area. 394 00:51:14.660 --> 00:51:19.580 These rulers govern in collaboration with the Estates General. 395 00:51:19.580 --> 00:51:29.300 The Estates General means a meeting of representatives of all of the estates, or in other words legal 396 00:51:29.300 --> 00:51:39.620 categories of noble, commoner, sometimes clergy, and that's called the Estates General. 397 00:51:39.620 --> 00:51:44.380 The Dukes of Burgundy and the Act of Estates General promoted an open commercial and industrial 398 00:51:44.380 --> 00:51:50.100 system based on the protection of property rights, natural enough, since the Estates 399 00:51:50.100 --> 00:51:56.960 General were constituted of representatives of the property-owning classes. 400 00:51:56.960 --> 00:52:04.080 In the rise of the Northern Netherlands, or the United Provinces, or Holland as we say, 401 00:52:04.080 --> 00:52:10.920 we have a near perfect example of the European miracle of decentralization in operation. 402 00:52:10.920 --> 00:52:17.520 First, the area had been a major participant in European economic, political and cultural 403 00:52:17.520 --> 00:52:24.440 developments for centuries, and by the time the Reformation came along in the 16th century, 404 00:52:24.440 --> 00:52:33.400 They were about as developed as the city-states of Northern Italy, which were the most developed 405 00:52:33.400 --> 00:52:35.720 parts of Europe. 406 00:52:35.720 --> 00:52:41.560 And as I mentioned, the herring fleet was famous and proverbial in Europe. 407 00:52:41.560 --> 00:52:49.760 They had herring boats that not only caught the herring but dressed them, packed them 408 00:52:49.760 --> 00:52:56.760 The Hobbsburgs, for whom I have great respect, the later Hobbsburgs, the Hobbsburgs of Austria, 409 00:53:19.760 --> 00:53:41.040 When the Reformation came along, decided to deal with their recalcitrant subjects, mainly 410 00:53:41.040 --> 00:53:47.920 in what's today the Netherlands, who had the nerve to become Calvinist, and also maybe 411 00:53:47.920 --> 00:53:53.760 and maybe even worse, the nerve not to pay the new taxes that the Spanish monarchy required 412 00:53:53.760 --> 00:53:58.880 because of its imperialist plans and ambitions. 413 00:53:58.880 --> 00:54:02.880 They were the most productive parts of the Spanish possessions. 414 00:54:02.880 --> 00:54:11.280 So new taxes were introduced without the consent of the particular diets of the different provinces 415 00:54:11.280 --> 00:54:18.220 And also the Spanish Inquisition was introduced to extirpate Protestantism. 416 00:54:18.220 --> 00:54:29.560 This led to the revolt of the Dutch, the first war of national liberation in modern history. 417 00:54:29.560 --> 00:54:35.400 And if students don't know who Martin Luther King was named after, they certainly don't 418 00:54:35.400 --> 00:54:41.260 know anything about the revolt of the Dutch, which was a crucial, pivotal event in European 419 00:54:41.260 --> 00:54:49.700 in History. What happened was that the Dutch, after a long, bitter, bloody struggle, succeeded 420 00:54:49.700 --> 00:54:57.820 in separating. By the way, it was another secession, just as with the American Confederate 421 00:54:57.820 --> 00:55:01.940 states. The Dutch didn't want to take over the Spanish Empire. They just wanted to withdraw 422 00:55:01.940 --> 00:55:07.780 from the Spanish Empire, as the American colonists wanted to withdraw from the British Empire. 423 00:55:07.780 --> 00:55:12.420 And after a very long struggle, over decades, the Dutch finally did. 424 00:55:12.420 --> 00:55:16.820 And what they set up became a model for Europe for decades. 425 00:55:16.820 --> 00:55:26.340 It was the first European economic miracle, Wirtschaftswunder. 426 00:55:26.340 --> 00:55:35.180 There was no king, there was no court, there was a united diet for all of the provinces, 427 00:55:35.180 --> 00:55:56.180 Each of the individual provinces, like Holland or Groningen or the other of the eight provinces, sent their representatives to this united diet, who could not pass on anything until their principals at home had agreed to it. 428 00:55:56.180 --> 00:56:06.100 In other words, highly decentralized, and it was basically ruled by a mercantile elite, 429 00:56:06.100 --> 00:56:14.460 the burghers of Amsterdam and so on, and the other towns, and in a short while it became 430 00:56:14.460 --> 00:56:17.660 even more prosperous than it had been before. 431 00:56:17.660 --> 00:56:22.660 There were poor, of course, in what I'll call Holland, it was a major province, so the whole 432 00:56:22.660 --> 00:56:35.660 The poor were much better off than the poor virtually anywhere else in Europe. 433 00:56:35.660 --> 00:56:40.660 I say this is a perfect example of the European decentralized model in operation for a number of reasons. 434 00:56:40.660 --> 00:56:48.660 For one thing, one reason they had been able to defeat the Spaniards is that they had the support of other European countries, 435 00:56:48.660 --> 00:57:03.660 Elizabeth. Elizabeth I in England. In other words, if Europe had already been one huge empire, they could have easily crushed the Dutch. But since it was divided, they could call on other independent areas to support them. 436 00:57:03.660 --> 00:57:14.660 And that was the reason, eventually, why Philip II sent the armada against the English. Well, besides the fact that they were Protestant, because they had given aid to the Dutch rebels. 437 00:57:14.660 --> 00:57:30.660 So, and now, now it's set up, it's increasingly prosperous, it's tolerant relative to the rest of Europe because two-thirds of the people are Protestants, Calvinists, and about a third is still Catholic. 438 00:57:30.660 --> 00:57:42.660 And the society is controlled by businessmen who generally don't like to kill their customers for religious or other reasons. 439 00:57:42.660 --> 00:57:55.140 So, there was a general toleration, de facto more than by law. 440 00:57:55.140 --> 00:57:58.660 The Dutch printers were willing to print virtually anything. 441 00:57:58.660 --> 00:58:04.060 Now, I don't want to talk to the internet generation about virtually anything because 442 00:58:04.060 --> 00:58:07.180 your own standards are probably quite different. 443 00:58:07.180 --> 00:58:13.780 What in those days were considered extreme, especially heretical works, considered heretical 444 00:58:13.780 --> 00:58:20.460 by one church or another. The Dutch printers just cared for one thing, whether you settled 445 00:58:20.460 --> 00:58:26.100 your bill or not. And they didn't care what language. They'll publish it in French and 446 00:58:26.100 --> 00:58:31.420 then it could be smuggled into France. 447 00:58:31.420 --> 00:58:39.140 And so Holland became a model that was recognized by everyone. 448 00:58:39.140 --> 00:58:43.020 Here's an American historian to say, who wrote, 449 00:58:43.020 --> 00:58:47.220 Both foreigners and Dutchmen were apt to believe that the Dutch Republic was unique 450 00:58:47.220 --> 00:58:52.540 in permitting an unprecedented degree of freedom in the fields of religion, trade and politics. 451 00:58:52.540 --> 00:58:58.300 In the eyes of contemporaries, it was this combination of freedom and economic predominance 452 00:58:58.300 --> 00:59:05.420 that constituted the true miracle of the Dutch Republic. 453 00:59:05.420 --> 00:59:13.820 One characteristic of the Dutch Republic was that they welcomed religious dissidents, philosophical 454 00:59:13.820 --> 00:59:21.820 dissidents also like John Locke or Descartes who lived there for a while, but they welcomed 455 00:59:21.820 --> 00:59:29.420 The Iberian Jews, the Portuguese and Spanish Jews have been thrown out and therefore set 456 00:59:29.420 --> 00:59:35.380 up important Jewish communities in Antwerp or most famously Amsterdam. 457 00:59:35.380 --> 00:59:45.300 And this is what one Amsterdam Jew named Spinoza wrote, the city of Amsterdam reaps the fruit 458 00:59:45.300 --> 00:59:51.860 of this freedom in its own great prosperity and the admiration of other people. 459 00:59:51.860 --> 00:59:57.160 For in this most flourishing state and most splendid city, men of every nation and religion 460 00:59:57.160 --> 01:00:03.300 live together in the greatest harmony and ask no questions before trusting their goods 461 01:00:03.300 --> 01:00:10.620 to a fellow citizen, save whether he be rich or poor and whether he generally acts honestly 462 01:00:10.620 --> 01:00:13.980 or the reverse. 463 01:00:13.980 --> 01:00:21.540 In other words, this is a case of commerce, producing tolerance, producing harmony, producing 464 01:00:21.540 --> 01:00:27.340 a willingness to interact, of course for mutual benefit, we're not talking about a nation 465 01:00:27.340 --> 01:00:32.660 of altruists here, but what they discovered was the rule of peaceful interaction for the 466 01:00:32.660 --> 01:00:39.660 benefit of all based on respect for private property. 467 01:00:39.660 --> 01:00:45.020 I suppose you know that this Jewish community of Amsterdam lasted for quite a while and 468 01:00:45.020 --> 01:00:54.020 contributed a great deal to the prosperity and fame of the Dutch until around the time 469 01:00:54.020 --> 01:00:59.460 of Anne Frank when it was put a violent end to. 470 01:00:59.460 --> 01:01:06.780 Incidentally, just a sidelight, as you know, capitalism destroys culture and the free market 471 01:01:06.780 --> 01:01:09.520 is the enemy of any culture. 472 01:01:09.520 --> 01:01:16.760 That is why the Dutch, for instance, have never produced anything in the way of painting. 473 01:01:16.760 --> 01:01:23.440 The artists used to create their paintings and have them sold in the grocery store next 474 01:01:23.440 --> 01:01:26.440 to the barrel of salted herring. 475 01:01:26.440 --> 01:01:31.160 It was a very bourgeois society. 476 01:01:31.160 --> 01:01:36.880 Jean-Jacques Rousseau, whom I'll be talking about a little later on, later in the week, 477 01:01:36.880 --> 01:01:37.880 hated the Dutch. 478 01:01:37.880 --> 01:01:45.880 He said, if you go to Amsterdam and ask somebody the time, they'll try to charge you for it. 479 01:01:45.880 --> 01:01:49.880 Which I don't see anything wrong with, frankly. 480 01:01:49.880 --> 01:02:00.880 Well, okay. I'm going to be talking next hour about how the Dutch model was observed and taken up by other Europeans. 481 01:02:00.880 --> 01:02:05.880 As I mentioned a few minutes ago, John Locke, when he had to leave England 482 01:02:05.880 --> 01:02:15.880 or a possible political persecution, spent time among the Dutch and learned a good deal from them. 483 01:02:15.880 --> 01:02:27.880 But let's stop at this point. A lot of material has been gone over and I'm asking for any comments you might have or questions, anything that you'd like to say. Yes. 484 01:02:27.880 --> 01:02:53.880 What was it specifically about the medieval church that helped them achieve the growth of the Catholic hierarchy that they had in the Middle East, in comparison to the Middle East, there's a lot more in the Quran about property rights in the Middle East than in the Bible. 485 01:02:57.880 --> 01:03:26.880 This is just sort of religious restrictions on what leaders or chiefs can do, there wasn't a whole lot, but there was certainly more than we get in the United States. 486 01:03:26.880 --> 01:03:34.880 But I also know that in Islam there's no ordinance for it at all. There's individual leaders who have whatever authority they have. 487 01:03:56.880 --> 01:04:04.960 I think it was the fact of the powerful institutional church, an international church also, so that 488 01:04:04.960 --> 01:04:09.200 if you had one particular ruler persecuting the church, well, he knew that he could call 489 01:04:09.200 --> 01:04:18.640 on this great international power behind him, and it was the bishops of Rome who built this 490 01:04:18.640 --> 01:04:47.640 In the 11th century, you had Gregory VII, who was a particularly powerful pope, and Harold Berman is a professor emeritus from Harvard Law, and has written on the history of law, and points to the changes brought about in the 19th century. 491 01:04:47.640 --> 01:04:57.000 Mises is brought about by Gregory VII, Hildebrand and his immediate successors that created 492 01:04:57.000 --> 01:05:05.880 a, deliberately, explicitly, a church that was independent of secular rule or influence 493 01:05:05.880 --> 01:05:09.360 as much as possible and could act as a counterweight. 494 01:05:09.360 --> 01:05:15.960 Famously, he brought the Emperor of the Holy Roman Empire and the King of the Germans down 495 01:05:15.960 --> 01:05:24.800 I went to Canosa in the Italian Alps to ask for forgiveness and to ask that the excommunication 496 01:05:24.800 --> 01:05:29.120 be lifted from him, powerful enough to do something like that. 497 01:05:29.120 --> 01:05:36.600 So it was the institution of this church, today the oldest institution in the world, 498 01:05:36.600 --> 01:05:43.360 and I don't suppose all the people who seem to be out to destroy the Catholic Church are 499 01:05:43.360 --> 01:05:44.360 going to succeed. 500 01:05:44.360 --> 01:05:56.360 I'm not Catholic myself, by the way, but I'm just an observer and sympathetic in many ways to the Church. 501 01:05:56.360 --> 01:06:04.360 So the hierarchy, of course, was part of the creation of the institution necessary to that. 502 01:06:04.360 --> 01:06:09.360 It was the largest property, largest single property owner in Europe. 503 01:06:09.360 --> 01:06:17.920 in Europe, so, among other things, concerned about heavy taxation, something they wanted 504 01:06:17.920 --> 01:06:25.400 to avoid, but here you have this split that you don't have in other civilizations that 505 01:06:25.400 --> 01:06:26.400 was critical. 506 01:06:26.400 --> 01:06:54.400 One factor in the Arab era, even though there was private property, and even ownership of land, the difference was that you couldn't inherit money, passed on to your successors, and so that meant there was no improvement of the land, and I guess the individual increase said that Francis got the land back, so you couldn't assume it as well. 507 01:06:56.400 --> 01:07:11.400 I think Bernier noticed in India, the Mughal control, by the way, was a Muslim control and the Muslims temporarily controlled India, but you're saying that there was a case also in Arab Muslim countries that, really? 508 01:07:11.400 --> 01:07:13.400 Yes. 509 01:07:13.400 --> 01:07:28.900 The first thing is that for Islam, of course, Mohammed's first movement and the reason he stuck with the family was not only religious but a national, a mercantile movement, sort of their right to unite the pair of trading blocs. 510 01:07:28.900 --> 01:07:36.900 So when they would go conquer another bloc, if you joined us you don't play tag, you're within the trading blocs, you're not without the regime. 511 01:07:36.900 --> 01:07:52.900 But also, in Islamic law, I think the key thing to understand is the idea that Ambrose and I got to talk about there was always this important point made that the state is not safe from separation. 512 01:07:52.900 --> 01:08:05.900 Whereas in the Islamic law of Sharia, the way of the law, which is codified by Islamic legal scholars, never made a distinction between the path of the main god's law and the enforcement of the state path. 513 01:08:05.900 --> 01:08:35.900 and so there was even with private property nominal defectors, all belong, were all in under the jurisdiction of civil power, and this really showed itself later here in the Ottoman period, where people in Bosnia, which was under the control of Ottoman merchants there, would always send their capital to the Habsburg domain. As soon as they made money, they would immediately funnel it into the Austrian government, because that's the only place they could save their money, otherwise it would be subject to confiscation, or like you said, it would be kept under the air. 514 01:08:35.900 --> 01:08:37.900 That's very interesting. 515 01:08:37.900 --> 01:08:42.900 Other comments or questions or anything you want to say? 516 01:08:42.900 --> 01:08:43.900 Joe? 517 01:08:43.900 --> 01:09:12.460 __________________________ 518 01:09:12.460 --> 01:09:28.460 Yes. And along those lines, I mentioned that Benyais' travels in India influenced Karl Marx and his view of the Asiatic mode of production. 519 01:09:28.460 --> 01:09:40.460 Now, in the Marxist view of the different epochs of history, there was the Asiatic mode of, there was first of all primitive communism, 520 01:09:40.460 --> 01:09:51.460 The Asiatic mode of production, then slavery in the ancient world, then feudalism and serfdom, and now capitalist exploitation. 521 01:09:51.460 --> 01:10:01.460 And people have noted that Marx and Marxist authors in general never paid much attention to that Asiatic mode of production, 522 01:10:01.460 --> 01:10:05.460 which is supposed to have been a stage of economic development. 523 01:10:05.460 --> 01:10:25.460 And some people have suggested that, especially with modern and contemporary Soviet authors, for instance, it came a little too close to home, because what you had was society under the economic despotism of the state and its bureaucracy. 524 01:10:25.460 --> 01:10:37.460 And some critics, for instance anarchist, left anarchist critics of Marxism said that's what Marxist societies eventuated in. 525 01:10:37.460 --> 01:10:51.460 So that they didn't feel, Soviet historians wrote endlessly about Marxism and these different stages of history did not feel very comfortable talking about the Asiatic mode of production. 526 01:10:51.460 --> 01:11:14.460 The different parts of the people, the different parts of the earth, they have different ideas of what the top or level of adaptation wants to do? 527 01:11:21.460 --> 01:11:41.460 And just as you had Bernier talking about India as a contrast to Europe, you had other authors, famously, John Fortescue, talking about England as a country which really respected property, in regard to lower taxation also, in contrast to France. 528 01:11:41.460 --> 01:11:50.260 a country which really respected property in regard to lower taxation, also in contrast 529 01:11:50.260 --> 01:11:57.300 to France, which he said was a country where the ruler, the king, often acted tyrannically 530 01:11:57.300 --> 01:12:05.060 and took too much of the property of his subjects. 531 01:12:05.060 --> 01:12:10.940 So you did have different situations in different parts of Europe. 532 01:12:10.940 --> 01:12:18.100 An English-British, well I don't know if he's a historian, I think he's more of a sociologist, 533 01:12:18.100 --> 01:12:24.820 named Alan McFarlane, has written about the peculiarities of English development. 534 01:12:24.820 --> 01:12:42.480 McFarlane says that really very early on, people were generally aware of the contrast 535 01:12:42.480 --> 01:12:47.540 between England and the continent, that in England, for instance, there was a much more 536 01:12:47.540 --> 01:12:58.540 and more active market in land, whereas in Europe land tended to be passed on from one generation to another without much change. 537 01:12:58.540 --> 01:13:07.540 He says that in England the nuclear family, as against the extended family, took root very early on. 538 01:13:07.540 --> 01:13:15.540 In Europe, especially in Central Europe and in Eastern Europe, you had an extended family situation. 539 01:13:15.540 --> 01:13:26.540 and other differences. So, yes, there were many differences and in particular one might point to differences between England and the rest of Europe. 540 01:13:45.540 --> 01:14:07.540 Well, I'm not sure. We are fortunate at the Mises Institute in having an expert in all things Dutch, not to mention South African, and that is Joseph Stromberg, who might know something about this. 541 01:14:07.540 --> 01:14:19.540 All I know is that this was a recognized situation at the end of the Middle Ages and why in particular I don't know. 542 01:14:19.540 --> 01:14:28.540 The problem that occurred was that the countries ruled by the Dukes of Burgundy then passed an inheritance to the kings of Spain. 543 01:14:28.540 --> 01:14:48.540 You talked about the difference between the earlier Spanish Habsburgs and the later Austrian Habsburgs. What brought about this? 544 01:14:58.540 --> 01:15:04.780 ruling Spanish dynasty in the Kingdom of Spain today as a bourbon. 545 01:15:04.780 --> 01:15:11.740 After Charles V, Habsburg domains were divided between the Spanish domains which his son 546 01:15:11.740 --> 01:15:18.860 Philip II inherited and the Central European domains including the emperorship of the Holy 547 01:15:18.860 --> 01:15:24.340 Roman Empire which passed to another son of his. 548 01:15:24.340 --> 01:15:27.700 And then you have, so you have two different developments. 549 01:15:27.700 --> 01:15:33.340 All I had in mind really was the Austria-Hungary of the late 19th century and of the 20th century 550 01:15:33.340 --> 01:15:39.060 until it was dissolved by the First World War and the great intellectual flourishing 551 01:15:39.060 --> 01:15:48.260 of Austria-Hungary and generally partisan of lost causes. 552 01:15:48.260 --> 01:15:53.620 Somebody might snide the remark, maybe that's why I'm a libertarian. 553 01:15:53.620 --> 01:16:13.620 The late Austro-Hungarian Empire is an example of that, and down here in Alabama, maybe you can even think of another example of a lost cause that one might be still a partisan of. 554 01:16:13.620 --> 01:16:17.620 Oh, by the way, now why the Spanish Habsburgs are different, but let me just say this. 555 01:16:17.620 --> 01:16:23.220 This is what many people say when they talk about national character. 556 01:16:23.220 --> 01:16:29.420 Keep in mind that the Spaniards went through an experience of seven centuries of what they 557 01:16:29.420 --> 01:16:35.340 call the Reconquista, of reconquering Iberia from the Moors. 558 01:16:35.340 --> 01:16:42.900 They went on from the high tide of the Moorish domination in the 8th century until the Moors 559 01:16:42.900 --> 01:16:46.740 were finally kicked out in 1492. 560 01:16:46.740 --> 01:16:53.840 So that there was constant warfare against the infidel and what defined Spaniard was 561 01:16:53.840 --> 01:16:58.500 not certainly not language because there were many different important dialects. 562 01:16:58.500 --> 01:17:05.760 What defined a Spaniard was his Catholicism, which one might think easily led to a kind 563 01:17:05.760 --> 01:17:12.820 of inflamed religious intolerance even worse than experienced in other parts of Europe. 564 01:17:12.820 --> 01:17:21.820 I enjoyed your comments about trying to teach the Magna Carta because one time I tried to introduce that subject. 565 01:17:21.820 --> 01:17:25.820 I think it's very pivotal to the development of the West. 566 01:17:25.820 --> 01:17:33.820 And as part of that I would read parts of the Magna Carta and then ask the students to comment on that. 567 01:17:33.820 --> 01:17:39.820 And generally the only comment I got back was, why did they put all that stupid stuff in there? 568 01:17:39.820 --> 01:17:47.820 That's not a good question, Mark. 569 01:17:47.820 --> 01:17:55.820 We're talking about the early 13th century, the scootage and so on, 570 01:17:55.820 --> 01:18:01.820 ransoming the king's person and so on had to do with the customs of the High Middle Ages. 571 01:18:01.820 --> 01:18:05.820 That's what you mean by stupid stuff. 572 01:18:05.820 --> 01:18:17.820 Knowing your own past habits and preferences, I suppose you'd prefer if the Magna Carta was sort of recited in a rap kind of way, right? 573 01:18:17.820 --> 01:18:22.820 I know I've seen some of the tapes in your car. 574 01:18:26.820 --> 01:18:31.820 Anybody want to raise any other points? Yeah, in the back please. 575 01:18:31.820 --> 01:18:37.620 There is a kind of Christianity and different individualism. 576 01:18:37.620 --> 01:18:46.620 Now wait a minute, hold on a second. First of all, I have a sort of hearing handicap, and secondly, you don't talk like a New Yorker. 577 01:18:46.620 --> 01:18:56.620 They understand that Christianity is the view of man in the West, in the sense that Christ was the first level. 578 01:18:56.620 --> 01:19:03.620 He was an individualist in nature, or in the Jewish community. 579 01:19:03.620 --> 01:19:14.620 He was trying to create a kind of sort of individual personality, and the way you read the scripture is basically saying, 580 01:19:14.620 --> 01:19:22.620 Well, the beginning of the West was created by the Christianity. 581 01:19:44.620 --> 01:20:14.620 Europe is a cultural phenomenon, came into existence through a melding over centuries of three inheritances, Christianity being one of them, being importantly one of them, also the classical tradition from Greece and Rome, no doubt about that, that was kept alive to a degree anyway, but then also the special customs that were brought in by the barbarians, so-called, especially the different German tribes. 582 01:20:14.620 --> 01:20:23.620 The Germans, so then when these three came together, let's say around 800, 900 AD, that created modern Europe. 583 01:20:23.620 --> 01:20:29.620 But by the Germans we mean of course not just what we call Germans today, but the different Teutonic tribes. 584 01:20:29.620 --> 01:20:41.620 The Franks who gave their name to France, the Angles and Saxons who gave their name to England, the Lombards who gave their name to Lombardy, the Burgundians who gave their name to Burgundy. 585 01:20:41.620 --> 01:20:52.620 All these different German peoples, who had very different customs from the subjugated inhabitants of the late Roman Empire, 586 01:20:52.620 --> 01:21:04.620 the defenseless subjects of Roman bureaucratic regulation and taxation and persecution, added their element to it. 587 01:21:04.620 --> 01:21:15.620 And a different sort of personality came out, let's say national character, but here on a larger scale, and then of course there were sub-varieties of that. 588 01:21:34.620 --> 01:21:59.140 The peasant uprisings in every society, in Russia famously a number of times in the 17th and 18th century, in China, mass peasant uprisings in the 19th century, 589 01:21:59.140 --> 01:22:26.340 Peasants, who are at the mercy of the rulers and soldiers from the metropolis, and forced to give up their surplus product to keep the cities in existence, are in a constant state of, in many societies, in a constant state of latent, at least latent revolt. 590 01:22:26.340 --> 01:22:45.840 So I don't think that it would be correct to say that what the peasants objected to were specific taxes or confiscation or some unusual amount of financial oppression. 591 01:22:45.840 --> 01:22:56.840 But they never, as far as I know, until the rise of liberalism, began to generalize this as a social doctrine. 592 01:22:56.840 --> 01:23:13.840 Maybe Watt-Tyler's rebellion in England was an exception, but generally what they objected to were the specific oppressions being imposed on them. 593 01:23:13.840 --> 01:23:22.840 There was no general ideology that, we're human beings like everybody else, we have rights, we have a right to, so, and Paul, you know, Paul Johnson writes too much. 594 01:23:24.840 --> 01:23:33.840 He writes very well, but he, so there'd be, I'd take some of the things he says with a grain of salt, certainly. 595 01:23:43.840 --> 01:23:45.840 Thank you for watching.