Monday, May 30, 2022

The State of Affairs: Rethinking Infidelity by Esther Perel

     The State of Affairs is not one of the typical history/geography/economics books I usually read, but I saw that someone I'm connected with on Goodreads was reading it and it sounded intriguing. In The State of Affairs, psychologist and couples counselor Esther Perel discusses infidelity, its causes, and what it means for relationships. There is a lot of really interesting commentary from Perel on the complexities of why people are unfaithful and whether or not infidelity signifies the end of a relationship.

    The book is full of small insights that were new to me. For example, there is a sort of trap with infidelity. Perel writes that, "once divorce carried all the stigma. Now, choosing to stay when you can leave is the new shame. Exhibit A is Hillary Clinton. Many women who otherwise admire her have never reconciled themselves with her decision to stay with her husband when she had the power to leave." Of course, in earlier times, she would have been judged for just the opposite. Instead, maybe we shouldn't judge people so much based on whether they choose to leave or stay with an unfaithful spouse. Perel also discusses interesting cultural differences in how people understand infidelity. In the United States, she says she is more likely to hear from her clients that "It's not that he cheated; it's that he lied about it." Whereas in Europe, that lying might be called "discretion" and is actually preferred. Then there's the definition of monogamy. Most people today would say they're monogamous, but by what definition? Monogamy used to mean one person for life, whereas now it only means one person at a time, which is a pretty big social change. Another interesting point Perel makes is about the difference between shame and guilt. Oftentimes, the unfaithful partner feels shame when they should feel guilt, because shame is a feeling about oneself, whereas guilt is about failings in one's duty towards another.

    Touching on the evolving definitions of marriage and infidelity, Perel talks about how getting married later has made infidelity less forgivable. Whereas in the past, marriage was a "cornerstone" that couples built their lives upon, today, marriage is more of a "capstone," to be entered into once both parties have their lives in order. Since people get married later, they tend to expect more maturity out of their partners when they pledge themselves to each other. 

    Perel argues that infidelity can be a part of a successful, long-lasting relationship, and that long-term couples should use the playbook of infidelity or the threat of infidelity as a way to maintain their relationship. When people see their partner as given to them completely rather than just a lease, they are more likely to take them for granted. She uses some interesting quotes, and one is from Alain de Boton, who says the secret to a long-lasting relationship is "Infidelity. Not the act itself, but the threat of it. For Proust, an injection of jealousy is the only thing capable of rescuing a relationship ruined by habit." Sometimes people seek out affairs because they feel they've let life pass them by and have become boring, and it has nothing to do with their spouse. Similarly, an affair may be for some a way out of the responsibilities of daily life. These individuals leave their "responsible self" with their spouse at home when they take care of the kids, cook meals, and work. But then, they separate their sexual self into another person, sneaking around with their secret boyfriend or girlfriend. Perel writes that, "mystery, novelty, and the unknown are built in. And the role of lover is quintessentially sexual, while the mother, the wife, and the housekeeper are left safely locked up at home." These people need to find a way to reintegrate their different selves, which they had separated.


Miscellaneous Facts:

  • Even today more than 50% of marriages are arranged.
  • Not really a "fact," but Perel distinguishes between two types of questions that a spouse may want to ask their partner who had an affair. There are "detective questions," which are all about the factual details of the affair and are unlikely to be productive, and there are "investigative questions," which ask why their partner chose to have an affair and inquire about their feelings rather than the act itself.
  • Another good quote: "At its best monogamy may be the wish to find someone to die with; at its worst it is a cure for the terrors of aliveness. They are easily confused." Adam Phillips.

Sunday, May 29, 2022

Cahokia: Ancient America's Great City on the Mississippi by Timothy R. Pauketat

     This was a really cool and concise book about Cahokia, basically detailing a brief history of the major discoveries relating to the mounds and what we know about them. He also talks about how there are smaller mound complexes throughout the Mississippi river valley, although many have been destroyed. Some of them are in Poverty Point, Louisiana, Spiro, Oklahoma, Troyville, Louisiana, and Little Rock, Arkansas.

    One interesting thing about Cahokia is that there is sort of a "big bang" where it emerged all at once sometime around 1050 AD. Mounds had been built before in the Mississippi valley (Poverty Point dates to 1600 BC) but this was a much bigger complex that could have hosted over 10,000 people. Pauketat says that the initial construction of Cahokia may be associated with the "guest star" supernova that was visible all around the world starting on July 4, 1054. It was a supernova in the Crab Nebula that was one of just 50 ever recorded and three in our own galaxy. It was visible four times brighter than Venus and was visible for night and day for 23 days afterwards and then a prominent feature of the night sky for another two years. There were all sorts of interpretations and omens drawn from this and it may have provided some inspiration for building the Cahokia site.

    The mounds of Cahokia were works-in-progress, with the central platform mound initially being a 20-foot pyramid that would rise to over a hundred feet after 150 years, making it the third-largest pyramid in the Americas, after only the Pyramid of the Sun in Teotihuacan and thee Huaca del Sol in Peru. For reference, the Great Pyramid of Giza is about 450 feet tall. Of the 120+ mounds of Cahokia, less than half are anything near their original proportions.

    It seems like a lot of the mounds had flat tops that would have had temples or houses or other structures on them. But on at least one mound, the flat top was the site of a sacrifice that would have been watched from below, where witnesses would have seen 53 women killed and buried so that the mound would have a unique ridge top. Ridge top mounds are found in very few other places in the world besides Cahokia. There is also evidence of huge feasts at Cahokia, with incredibly dense remains that would have involved killing over the course of a few days hundreds of deer, using hundreds of pots, and smoking enough tobacco to produce more than a million charred seeds. Scholars think that attendees at festivals would have exceeded over ten thousand, who would have all had to literally walk to the area. 

    There's a huge debate going on about whether or not Cahokian culture was imitating Meso-American culture, with the primary evidence being the pyramids. Additionally, since there is evidence that people from Cahokia travelled as far as Montana on one hand and the Appalachians on the other, we know that people were travelling distances great enough for there to have been interactions. However, there is a dearth of real archaeological finds that would indicate trading of material goods between the two areas. Also, some mounds have existed in the area of the Mississippi long before the Meso-Americans built their pyramids, so their inspiration was not a requirement for Cahokians to see.

Miscellaneous Facts:

  • Mississippians used to play a game called chunkey, which involved rolling a stone puck and throwing sticks at it and trying to get as close as possible while running.

Friday, May 27, 2022

The Future of Money: How the Digital Revolution is Transforming Currencies and Finance by Eswar Prasad

Bitcoin
    Satoshi Nakamoto published the Bitcoin paper at the end of October 2008, just six weeks after Lehman Brother collapsed, some important context that I had missed. I can't remember it, but I think there's some famous quote about how everyone has to have some opinion on the French Revolution. Well I think the 2008 Recession is one of those events for this generation. The impact of that long financial collapse is still being felt, and I think Bitcoin is just one more example, considering it was created in the wake of the crisis. The goal of Bitcoin was to create a decentralized currency out of the control of central banks without inflationary pressures and that could be an alternative to currencies made by governments. But Prasad says that Bitcoin has failed in that goal, although the technologies it has spawned may continue to have significant utility. 
    The blockchain that Bitcoin uses seems like a sort of cycle to me. First, someone initiates a transfer to another "wallet" on the blockchain. Then, that transfer joins the Bitcoin peer-to-peer network, where bitcoin miners, which are usually automated computer programs, will supply the processing power to process the transaction. Miners are incentivized to do this because by mining they can earn their own bitcoin as well as transaction fees paid by transferring individuals to move up the processing line. Then, when the miner successfully mines the bitcoin by solving the proof of work puzzle for the transaction, the transaction "block" is validated, and everyone in the network adds that block to the blockchain. The existence of the new block confirms the transaction, and the miner gets their bitcoins as a reward for independently validating it. 
    The reward for solving the "puzzles" that the Bitcoin algorithm produces reduces by half every 210,000 blocks, with the last halving taking place in May 2020, when the reward for verifying a transaction by solving a puzzle fell to 6.25 bitcoins each time. About 18.4 million bitcoins have been halved, and current estimates say that all 21 million will be halved by 2140. However, since the reward for halving bitcoins is always decreasing and the value of bitcoins fluctuates, maybe people will no longer find it worth it to keep mining for coins. 
    The desire to make sure Bitcoin would not be inflationary has made it deflationary in its first years, which has killed Bitcoin's ability to be used as a medium of exchange. Since (1) there are a limited number of bitcoins and the fast majority have already been mined and since (2) there has been a growing base of people interested in owning bitcoins, the price of a bitcoin was consistently rising until recently, meaning that no one wanted to spend their bitcoins. After all it would make no sense to spend what you think will rise in value. This makes it very unlikely that Bitcoin will ever become a major currency.  Times for validations have already lengthened significantly over time, so buyers and sellers have started paying fees to move their transactions up in the queue of transactions waiting to be validated by miners and added to the blockchain. What some Cornell researchers have argued is that since the value of validating a transaction is decreasing while the number of transactions is increasing, some transactions may never be validated and posted without paying large transaction fees, which could only be paid by those making even larger transactions. Satoshi Nakamoto anticipated this issue in a blog post in 2010, stating that "in a few decades when the reward gets too small , the transaction fee will become the main compensation for nodes. I'm sure that in 20 years there will either be very large transaction volume or no volume."
    Bitcoin also runs into problems due to its decentralized nature. If someone hacks your Bitcoin wallet or otherwise steals from you, you have no one to go to. Out in the real world, it will be a hassle, but you can call your bank when someone steals your credit card and they'll help you out once they verify your identity. There was a crazy case where a chief executive of a Canadian cryptocurrency exchange, Quadriga, died suddenly on a trip, and took to the grave his password to $250 million in investor funds. There was no way to get in without it and no customer service to call to get help. There is a ton of money in Bitcoin that's already been lost because people have forgotten passwords. And that money can never be recovered. 
    So basically Bitcoin has three problems: first, it cannot maintain a stable value due to speculation by its biggest advocates, second, the transaction validation mechanism can't be scaled up due to immense validation costs, and third, Bitcoin doesn't offer true anonymity. Other coins and tokens have tried to fix these problems, but none has solved all of them and most make some other thing worse.

Central Bank Digital Currency (CBDC)
    CBDCs are the official trend within cryptocurrency, where, rather than a private person creating their own currency, real governments create new currencies or digital versions of their preexisting currencies. There are basically three types of CBDCs: e-money, account-based CBDC, and official cryptocurrency. E-money is a simple version of an electronic currency in which the central bank manages a centralized payment system and "wallets" that can be accessed via prepaid cards, smartphones, or other devices. This is basically like Paypal or Venmo. Account-based CBDC goes further and gives individuals and businesses access to central bank accounts as if it were a normal bank, making the central bank more like a retail bank. Other governments use official cryptocurrency, which is a digital currency operating on a permissioned blockchain, validating transactions in a decentralized manner, usually using proof of stake. 
    One of the very "interesting" things about account-based CBDC is that the government can impose whatever interest rate it wants on your savings, increasing or decreasing the rate to keep your money in the bank or to push you to spend it. I'm sure people would love getting "helicopter drops" of money into their accounts. Not so sure about the other way around. We did a sort of helicopter drop in 2020 with the economic impact payments, however, millions of paper checks were mailed out that never got cashed due to people having moved or other bureaucratic issues. Account-based CBDC could solve this. Another thing that account-based CBDC would "solve" is the problem of people using welfare payments for things the government doesn't want them to spend on. The government could potentially give specific payments to people in a zone hit by a hurricane to buy food. However, I think a policy like that would do a lot more harm than good. Additionally, account-based CBDCs may be seen as so much more trustworthy than banks that the very existence of account-based CBDC could cause more runs on banks in times of financial crisis so that people can put their money in their Federal Reserve Account. 

Miscellaneous Facts:
  • Large transactions typically are only accepted as final if they are buried six blocks deep in the blockchain to confirm that they are locked in for good. This usually takes about an hour.
  • A bitcoin can only be sliced into one hundred million parts, called Satoshis. As I'm typing this, a bitcoin is worth about $30,000, so one Satoshi is three one-hundredths of a penny.
  • One researcher has estimated that to validate a single transaction on the Bitcoin network requires energy consumption equal to what the average US household uses in a month.
  • It was estimated that in 2012, 80% of Bitcoin transactions were illegal transactions, but that the number had fallen to somewhere between 15% and 40% as it became clear that the transactions were not so anonymous.
  • Discount rate: the interest rate the Fed charges to commercial banks on the overnight loans that they need to maintain their required levels of reserves at the Fed.
  • Federal funds rate: the interest rate at which depository institutions lend to each other to maintain reserve balances overnight.
  • Economic impact payments had failed to reach about 30 million Americans even by July 2020.
  • The renminbi accounts for 2% of global payments in SWIFT, falling from a high of 3% in 2015 after a rapid rise from .3% in 2010. Even that low number puts it in fifth place after the dollar, the euro, the yen, and the pound sterling.

Tuesday, May 24, 2022

The Crusades: The Authoritative History of the War for the Holy Land by Thomas Asbridge

    The Crusades was a fantastic book that read like a great narrative. I will say that the Crusades get less interesting as they go on, with the first few being the most dramatic. But the cast of characters is probably most interesting in the Third Crusade, with Richard the Lionheart and Saladin facing off. I obviously picked this book up because of my love for the Crusader Kings videogame series and I was very satisfied with it. I feel like I learned a ton.

    The First Crusade was preceded by Pope Gregory VII stoking the flames of holy war over twenty years before Pope Urban declared the Crusade in Clermont, France, in 1095. Gregory first tried to launch a holy war in 1074 against the Muslims of Asia Minor, who were driving back the Byzantines and conquering the peninsula. But Gregory's plans amounted to nothing in spite of (or maybe because of) his plans to lead the campaign in person. For the rest of his reign, Gregory VII clarified his idea, and, while in conflict with the Holy Roman Emperor Henry IV (the Investiture Controversy), Gregory hinted that death in battle against the German emperor would mean remission of sins. Asbridge identifies Gregory's radicalism as an important predecessor to the Crusades, because it normalized the idea of holy war so that by the time Pope Urban II called for a more carefully constructed Crusade, the idea was not so new.

    It happened that Urban called the Crusade at a particularly fortunate time for the Catholic forces. Since a bloody coup against the Umayyads in 750, the Abbasids ruled the Sunni Muslim world as caliphs, and they moved their capital east, from Damascus to the newly created city of Baghdad. But the Sunni world shrank in 969 when the Fatimids, Shi'ites, took control of Egypt, opening up conflict over the Levant. Then, to fracture the Muslim world further, the Seljuq Turks invaded Iran and Iraq from the Central Asian steppes in the 1040s, with the warlord Tughrul Beg becoming sultan of Baghdad in 1055 and replacing Arabs with Turks in major government roles. But the powerful Seljuq Empire collapsed with the death of Malik Shah in 1092 and divided into smaller territories. Meanwhile, the Fatimid ruler and his vizier died in 1094 and 1095, meaning that the new ruler was just getting into power when Urban II declared the Crusade. However, Islam retained the historical memory of jihad; although it had declined over the centuries and came to be used mainly against other Muslims deemed heretics, the concept was merely dormant, not extinct.

    Interestingly, there is no direct trigger for the Christian Crusade for Jerusalem. Jerusalem had been in Muslim hands for hundreds of years, and Christians and Muslims had been fighting minor conflicts for centuries that had never escalated into a full-scale holy war. So when the first Christians arrived to take back the holy land, the Muslims who lived in the area failed to understand the significance of the incursion and the era that was coming. The closest thing to a trigger for the First Crusade came in March 1095, when Urban was presiding over a council in Piacenza. He received ambassadors from Byzantium with an appeal from Emperor Alexius I Comnenus to aid him in fighting the Turks that had invaded Asia Minor (it would eventually be called Turkey in case you were wondering how that went). Alexius didn't realize he was about to be overrun with volunteers.

    The Crusaders came in disorganized waves, not a well-ordered host. Crusaders thought it was a get-out-of-sin-free card that would completely guarantee their place in heaven, although the theologians at the Vatican certainly didn't think that was the case. The first group to arrive was led by a rabble-rousing preacher named Peter the Hermit, who gathered 15,000 volunteers across Europe, massacring Jews along the way. They were annihilated almost immediately after crossing into Muslim territory. But the next group was more successful. Led by Raymond of Toulouse, Bohemond of Taranto, Godfrey of Bouillon and his brother Baldwin, between 60,000 and 100,000 Latin Christians went on the first crusade, with about 10,000 of them being knights, between 35,000 and 50,000 being infantry, and the rest being women and children. It was the largest army assembled in Medieval Europe. The Crusade had no clear leader, and struggled across Asia Minor but surviving. Baldwin saw an opportunity to leave the Crusade early and carved out a fief in Syra called Edessa, and area with many Armenian Christians. 

    The rest of the Crusaders made their way to Antioch, a city with many Greek Christians that the Byzantine Emperor Alexius I very much wanted them to conquer for him. On their way, the Crusaders were able to defeat the armies of two brothers, Duqaq of Damascus and Ridwan of Aleppo, as both brothers had neglected to coordinate with one another. If they had fought together, they might have ended the Crusade right then and there. The Crusaders surrounded Antioch and laid siege to it. But the Iraqi general Kerbogha was on his way to attack them outside the city walls. Luckily for the Crusaders (and unluckily for the people of Antioch), Bohemond of Taranto was able to identify a tower guard who would let them in under cover of night and open the gates for them, which they succeeded in doing the day before Kerbogha arrived, and they slaughtered the inhabitants of the city. This gave Bohemond a serious claim to lordship over Antioch, which he did not intend to give to the Byzantines. However, at the same time, Raymond of Toulouse patronized a man named Peter Bartholomew, who somehow discovered the lance that pierced Jesus on the cross because a saint revealed its location to him in a dream. He proclaimed that Raymond was the rightful ruler of the Crusaders, and so Raymond sought to challenge Bohemond's lordship. Allegedly, the sight of the lance made Muslim armies panic, and supposedly helped the Crusaders win a victory against Kerbogha's forces that had besieged them in Antioch.

    Lacking the men to seriously oppose Bohemond, Raymond of Toulouse decided to focus on the drive to Palestine and Jerusalem. He led Robert of Normany and Tancred, other major nobles, past Antioch and into Lebanon. Bohemond retained Antioch, which became the second Crusader State after Edessa. Unfortunately for Raymond, Peter Bartholomew became harder to control, and the spell broke when he declared in spring 1099 that they would need to start executing all the sinful Christians on the expedition. When challenged, he declared that he would walk to flames to prove the veracity of his connection to God. He either emerged unscathed and was killed by the sinful crowd, or emerged burnt and was mortally wounded, dying some days later. Either way, it was a bad look for Raymond since this was his guy, and by May 1099, Raymond was no longer the preeminent figure in the Crusade. He would have to share power with the other nobles.

    The Crusaders seized Jerusalem in July 1099, and named Godfrey of Bouillon as the "Advocate of the Holy Sepulchre," king in all but name. Godfrey took power, but he held very little territory in reality. When he tried to take Ascalon, a port city, the people demanded to negotiate only with Raymond, and Godfrey refused, leaving the city in Muslim hands, which would allow it to serve as a launching point for the Fatimids against him. After the seizure of Jerusalem, most Crusaders went home to the west, leaving Godfrey extremely exposed with just 2,000 infantrymen an 300 knights. Urban died in the summer of 1099, just before he would have heard news of the recapture of Jerusalem, and his successor, Paschal II, declared another Crusade, but this one was a debacle, in which three separate armies were all destroyed by Seljuqs in Asia Minor before ever reaching the Levant. Godfrey died (likely of Typhoid) just a year after taking Jerusalem, in July 1100. His brother, Baldwin, succeeded him as King of Jerusalem.

    In the early years of the Kingdom of Jerusalem, Baldwin struggled against all odds to preserve the Frankish state in the Levant. He even managed to create a truce with Tughtegin, the new ruler of Damascus, after Duqaq had died. The Syrian states came under enormous pressure after just a few years, and Bohemond fled, leaving Antioch to his nephew, Tancred de Hauteville. Allegedly, Bohemond left in a coffin with air holes poked in it and a dead rooster on top of him to fool the Byzantine authorities who he feuded with. Bohemond decided to lead a "crusade" against the Byzantines in 1107 for some betrayals that occurred during the First Crusade, but he was unsuccessful and slipped into obscurity. Tancred remained in power in Antioch as the nominal regent, but Bohemond never returned. Tancred spent his short reign defending and expanding Antioch's borders until he died at just 36 due to poor health. He was succeeded by Bohemond's infant son, Bohemond II, and Antioch was governed by Tancred's nephew, Roger of Salerno, as a regent.

     The three Crusader States of Edessa, Antioch, and Jerusalem may have been officially disunited, but they were good at coming together to repel outside threats when necessary. The Franks, as they were known, would unite at a strong, defensible location, and then they would police the threatened region, seeking to disrupt the enemy's freedom of movement, while avoiding the risk of open battle. At one point, Roger of Salerno even allied with Tughtegin of Damascus to repel forces from Baghdad, creating a bizarre Christian-Muslim alliance. Meanwhile, Baldwin I of Jerusalem was able to seize more and more territory in 1107 and 1113 to start controlling trans-Levantine traffic, all the way to the Red Sea coast at Aqaba. 

    But in 1118, Baldwin I died in a campaign against Egypt, and was succeeded by his cousin, also named Baldwin. In 1119, Ilghazi of Aleppo destroyed Roger of Salerno's Antiochian army at a battle known to the Crusaders as the "Field of Blood," throwing the Crusaders into chaos. In 1123, King Baldwin II was captured by Muslims and spent 16 months in captivity. Bohemond II arrived in Antioch to assume control in 1126 but was slain just four years later, leaving an infant girl named Constance as his heir. When Baldwin II died from illness in 1131, the last of the old guard of Outremer (traditional term for Crusader States) was dead. Baldwin was succeeded by Melisende, the eldest of his four daughters, who was married to Count Fulk V of Anjou. She was the representation of the new world crusading had created, as her father was French and her mother an Armenian Christian. She would rule for thirty years with her husband and then her son as co-rulers. She inherited the throne at twenty-two years old.  By this time, there was a desperate need for reinforcements. Some came from two new military orders, the Knights Hospitaller and the Knights Templar, but more was necessary.

    Life in the Crusader states was an interesting mix of tolerance and intolerance. While laws were passed to prevent fraternization between Muslims and Christians, perhaps these were necessary because it happened to often. In Usama ibn Mundiqh's Book of Contemplation, the Syrian Muslim nobleman who authored the book describes friendships with the Latins, although he regards them as culturally inferior to Muslims. Even the Templars cleared out of the al-Aqsa mosque when he wanted to pray there, and Asbridge writes that the primary division was not between Christians and Muslims, but between Franks (AKA Latin Christians) and everybody else. 

    The Crusaders came under serious threat after 1128, when the Turkish warlord Zangi, the atabeg of Mosul, took control of Aleppo. Some consider this the beginning of the Muslim reaction to the Crusades and the jihad against the Crusaders. But Zangi remained distracted, with one foot on either side of the Euphrates. For him, the battle against the Franks was more like a frontier war, and Baghdad was the main interest. That said, when Tughtegin died around the same time, the Franks lost a key ally in Damascus. In December 1144, Zangi took Edessa, eliminating the northernmost state of Outremer. The fall of Edessa shocked the Levant, and the remaining Franks sent envoys to the west in 1145 calling for a new Crusade and urgent reinforcements. The Second Crusade, as it became known, was even bigger than the first. This time, the Crusade was joined by actual kings, Louis VII of France and Conrad III of Germany, lending the holy war serious legitimacy and expanding its numbers. But the Crusade would be a failure, starting with tremendous losses along the way through Asia Minor.

    Zangi was assassinated in September 1146 and we'll never know what he would have accomplished if he had lived, but his youngest son, Nur al-Dun Mahmud would go on to unite Syria. Despite his death, the Crusaders were unable to take advantage of Muslim disunity, and Louis VII and Conrad returned to Europe in 1148-49. Meanwhile, in Jerusalem, Baldwin III disliked co-ruling with his mother, and in 1152, they nearly fought a civil war over it. Ultimately, Baldwin III drove her from her lands and forced her abdication. He started to solidify his power in the Crusader States, taking Ascalon after an eight-month siege in 1153. The next year, Nur al-Din seized Damascus, achieving what his father could not, and uniting Aleppo and Damascus for the first time since the Crusades had begun. 

    In 1157-58, Nur al-Din was struck by some dangerous illness that brought him close to death. He experienced a spiritual awakening thereafter and made the hajj to Mecca in 1161. Then, after a military defeat in 1163 that resulted in Nur al-Din barely escaping with his life, he swore vengeance on the Franks and refused a truce with them. That same year, Baldwin III died and was succeeded by his brother Amalric. To build strength to strike at Jerusalem, Nur al-Din sent his lieutenant, Saladin, to take over Egypt, but once Saladin had done so in 1171, he was not so eager to stay under Nur al-Din's control. There may have been a Sunni civil war between the two, but Nur al-Din died at sixty years old in 1174, leaving his empire to his son, al-Salih. Of course, Saladin wasn't about to let power slip away into some boy's hands. When the boy died at nineteen, Saladin took control of the empire, now controlling both Syria and Egypt. He also went to Masyaf in 1176 to deal with the Shi'ite "Assassins," who had made multiple attempts on his life from which he barely escaped, forging some kind of non-aggression pact. 

    Baldwin IV took the throne of Jerusalem when his father Amalric died in 1174, and presided over approximately a decade of decline for the Kingdom of Jerusalem. Baldwin himself had leprosy, which made his rule more difficult with every year, and Saladin's successes in border skirmishes in 1179 broke all the last of the momentum the Crusaders had. But due to the death of the Caliph, Saladin became distracted from Jerusalem over the next several years, focusing instead on consolidating power in Syria and Mesopotamia by taking Aleppo and Mosul. But critically, when he became sick in 1185-86, Saladin nearly died and even wrote his will. But he recovered, killed those who plotted against him in his time of weakness, and found renewed vigor, much like Nur al-Din a quarter-century earlier, to fight the war against the Franks. While Saladin had spent most of his time in his reign up to this point fighting other Muslims, he now turned his attention to Jerusalem.

    Baldwin IV died a few years earlier and Baldwin V died shortly thereafter in 1186, being replaced by his aunt Sibylla and her husband, Guy of Lusignan. But Raymond of Tripoli challenged them for the throne, and when it seemed he would lose, Raymond allied himself with Saladin. This culminated in Saladin's invasion of the Galilee region, climaxing in the Battle of Hattin on July 4, 1187. Having seized all the wells, Saladin knew the Crusaders were thirsty, having gathered nearly all the troops of the realm in one place without much water to fight a decisive battle. Then, Saladin dragged things out, letting their thirst grow and burning fires to smoke them out. Finally, Saladin struck and crushed Guy's forces, taking Guy into captivity. Tiberias capitulated immediately and was followed by Acre, Beirut, Sidon, Haifa, Caesarea, and Arsuf. Saladin spent two months taking all the settlements of the Levant in a mostly peaceful manner, promising to spare the lives of Christians if they would not take up arms, allowing them to either pay higher taxes, convert, or flee. On October 2, 1187, the supposed anniversary of Muhammad's flight to Jerusalem, Saladin entered the city, having negotiated with the remaining Franks that they convert, pay, or flee, ending the Crusader presence in the Levant. However, now that Saladin had taken these lands, he had to hold them, because he had now provoked the wrath of Christendom, which would soon launch another Crusade.

    With the Third Crusade coming, Saladin was at the peak of his power, but he still hadn't taken Tyre, a city formerly on an island until Alexander the Great took it in a siege over a thousand years earlier by building a land bridge to it. This created a potential beachhead for the next wave of Crusaders. At the same time, former King of Jerusalem Guy of Lusignan was on what seemed like a suicidal mission to take Acre, also on the northern coast of Palestine. But Saladin failed to kill Guy and his ragtag band of supporters while they were still weak outside the walls of Acre, and he reached Acre in September 1189, just the same time as a fleet of fifty ships carrying 12,000 Frisian and Danish Crusaders and their horses arrived. In a battle fought outside the gates, a detachment of Crusaders managed to reach Saladin's tent, seizing loot. Despite the fact that the Muslims won a close battle, the morale shifted to the Crusaders, and Saladin had no momentum whatsoever. Some of the routed Muslim soldiers deserted, and those who lost wealth in the battle when Crusaders looted their camp became demoralized. Then, in March of 1190, when some ships from Acre tried to sally out to challenge the naval blockade of the city, they were destroyed, granting Crusaders unimpeded naval access for the rest of 1190. Acre's inhabitants lived on the edge of starvation waiting in vain for Saladin to break the siege. 

   In May 1190, the Crusaders already at Acre had filled in a path through the dry moat around Acre, using rubble and even dead bodies to create level ground. They brought three-storey siege towers soaked in flame-retardant vinegar to the walls, but the day was saved for Acre by a young metalworker who pioneered an even stronger form of Greek fire that burned through the vinegar, destroying the siege weapons. 

     Meanwhile, more Crusaders were on the way. the Holy Roman Emperor Frederick Barbarossa came by land and the French and English Kings Philippe Auguste and Richard the Lionheart came by sea. But after crossing Asia Minor and entering Cilicia, Frederick tried to ford a river on horseback, the horse lost footing, and Frederick fell in and drowned in the weight of his armor, a huge boon for the Muslims and a bad omen for the Crusaders. Richard was also facing obstacles in his way, but none that actually killed him. On the way to the Levant, a gale blew twenty-five of Richard's ships off course to Cyprus, ruled by the Byzantines, where the local population kidnapped Richard's sister and fiancee. Richard decided to immediately invade the island, conquering it, and taking back his fiancee, marrying her once the hostilities were over. 

    When Richard arrived in the Holy Land, Philippe Auguste was already there, but Richard made his presence felt. He first offered four gold pieces as a wage to all knights who would join him when the French king offered three, and then, when a part of the walls fell down, Richard offered two gold coins to anyone who could carry off a stone from the wall under heavy fire. Eventually, thanks to the influx of men, the Crusaders took Acre. But it was hard to get them to continue. Some preferred to stay in Acre, which had become a den of prostitution and gambling with so many soldiers there, and others wanted to leave. That is just what Philippe Auguste did when he got word that a relative in Flanders had died and that he would need to assert his claim. With Philippe Auguste gone and Frederick dead, Richard of England was now the sole leader of the Crusade.

    Richard eventually convinced the men to march south along the coast to Jaffa and then Jerusalem, although he had to go back once to convince more to come. Along the way, he fought Saladin at a major engagement, the Battle of Arsuf, which seems to have been totally unplanned, and won, clearing the way to Jerusalem. But it wasn't so simple. By marching inland, the Crusaders would lose the advantage that came from naval resupply and their path back to the coast could be harried by Saladin's troops. Twice, the Crusaders marched towards Jerusalem, and twice they turned back around without taking it. Why?

    All through the campaign, Richard had been putting forth feelers of negotiations with Saladin. Richard's strategy was interesting, because he wasn't always interested in negotiation, only rarely. What he was interested in was getting reports back from his men of Saladin's camp and the Ayyubids' thinking. Once he even asked for some chilled pears just to mess with Saladin's head by sending such a ridiculous request. For Richard, negotiation was a weapon, and he could use it to get a settlement, intelligence, or even sow dissension in the ranks of Islam. But now the negotiations became a real means of reaching settlement since both rulers faced challenges that turned the Third Crusade from a priority into a distraction.

    Richard learned that since Philippe Auguste had returned to France, he had been plotting with Richard's brother John to take power from Richard in the Angevin realm of England, Aquitaine, and Normandy. Saladin, on the other hand, realized there was no way he could win against the Crusaders after his defeat at Arsuf and given the nature of the backstabbing and plotting going on within his own family. Saladin had two demands: that he would retain Jerusalem and Ascalon. Richard agreed, giving the Crusaders a thin strip of coastal land from Jaffa to Tyre and rights for Christians to enter Jerusalem as part of a three-year peace. Richard never entered Jerusalem, probably because he considered it humiliating to do so while still ruled by Muslims, his goal never quite reached. Richard ultimately failed to take Jerusalem because he failed to take into account the emotional aspects of leading a Crusade and because he was unable to take firm control of the expedition when troops insisted on marching to Jerusalem. But of course this wasn't really a win for Saladin and a loss for Richard. Asbridge calls it a tie, but I would say it was more of a pyrrhic victory for Saladin. The agreement was reached on September 2, 1192. Saladin was dead within six months from illness at just 55 years old, and Richard was dead by 1199, shot by a crossbow at 41 in front-line combat in southern France. 

    Pope Innocent III was elected by the college of cardinals on January 8, 1198, at just 37 years old, seeking to rejuvenate the papacy and its holy wars. Innocent saw three problems with prior holy wars: there were too many non-combatants going along, the expeditions were poorly funded, and they had ineffective command. Innocent sought to remedy these problems by reaffirming the Latin Church's right to lead Crusades, assuming the roles of recruitment, fundraising, and leadership. As a part of this, Innocent III expanded use of indulgences to fund the Crusades, which would come back to bite the church in about 300 years. But the donation chests didn't get full, and Innocent had to delay and delay again the Fourth Crusade. 

    When the Fourth Crusade did finally launch, it was a disaster. Few men arrived, and there wasn't enough money to pay for the massive Venetian armada the Crusaders had contracted to bring them to the Holy Land. At that point the Venetian doge Enrico Dandolo took over, but mainly used the Crusaders to settle scores and expand Venice's power. They never made it to the Holy Land. Instead, Dandolo directed them to Constantinople, where they sacked the largest city in Christendom. Innocent III was horrified, although he wasn't unhappy to see a smaller Latin empire take over Constantinople instead of the Greeks. 

    Meanwhile, in the Crusader States, internecine conflicts kept the realms of Antioch, Tripoli and fake Jerusalem (since it didn't control Jerusalem) unstable, but after Saladin's death, the Ayyubid realm had fractured. Acre was now the capital of Frankish Palestine, and had grown into a much larger city than before. The Fifth Crusade was launched in 1218 with the goal of landing at Damietta, in the Nile Delta, first to then take back Jerusalem over land. But because of all the new money and ship that allowed Crusader elites to now travel to and from their destinations more easily than ever before, leadership was less stable during Crusade number five, and it suffered as a result. The Crusaders took Damietta, but struggled thereafter. The Ayyubid ruler of Egypt offered them a deal to give them Jerusalem and most of Palestine as long as the Ayyubids would get the major forts, but the Crusaders refused. The descriptions that Asbridge gives of the siege of Damietta are horrific and show how terrible crusading really was. He writes that the Crusaders found "streets strewn with bodies of the dead, wasting away from pestilence and famine" and that they found skinny people in bed next to the dead. After 18 months of siege, Damietta had lost tens of thousands of lives. But then the Crusaders got their comeuppance with the flooding of the Nile, destroying their supplies and the expedition. The leader, Holy Roman Emperor Frederick II, was able, however, to still get a deal to get Jerusalem in 1229 after the Sixth Crusade without any blood spilled. However, it was unpopular since it gave up major fortresses and the Latins of Palestine threw rotten meat at him as he departed.

    In 1244, Turkish Khwarazmians invaded and sacked Jerusalem, which led to another Crusade, led by Louis IX of France. He raised tons of money for it and mounted the only contested amphibious landing I know of in a Crusade, but he was stopped. He invaded up the Nile again, trying to defeat the Ayyubids in Egypt before turning to Jerusalem. Louis was actually captured by the Ayyubids, the only Christian king to suffer that humiliation. After he paid ransom, he stayed in Egypt until 1252 to secure the liberation of his troops. He travelled home in 1254 and took on a life of extreme piety and austerity, even considering moving to a monastery after the humbling Crusade. 

    The players in the middle east completely changed in the latter half of the 13th century. The Mamluks, Turkish slave-soldiers, staged a coup and took over Ayyubid Egypt and the Levant. From the East, Mongols stormed through, sacking Baghdad and reaching the Mamluks, who pushed them back twice, which was pretty miraculous for the time. King Louis IX tried another Crusade in 1267, but he diverted the Crusade to Tunisia, where he died, and the Crusaders never made it to the Holy Land. The Mamluks laid siege to Acre and took it in 1291, eliminating the last of the Crusader States.

    In his analysis of the period as a whole, Asbridge points out that the Crusading ideology was almost bound to fail due to its emphasis on individual salvation through this act of penance. Compare Crusading to colonialism/imperialism, the far more successful movements to come from Europe in the following centuries. Whereas colonialism sent pioneers to live out in the world and imperialism sent government or corporate officials to rule the rest of the world, the Crusades sent pilgrims on a journey of penance. As a result, not so many stayed to rule the states they carved out. What the Crusader States needed to survive was a strong standing army of the faithful, but instead they only got periodic infusions via Crusades.

    Finishing the book, I am reminded that for all the interesting stories that are told here, the Crusades are fundamentally a period of senseless violence from which very few people actually gained. The Crusades led to huge taxes on European peasants, violent pogroms against the Jews, horrific sieges throughout Egypt, Palestine, and Syria, and just huge overall suffering. And in the end, it is hard to see what was gained. To me, the lesson of the Crusades is that when the senseless violence of elites goes unchecked, the rest of us suffer.

Miscellaneous Facts:

  • By modern standards, medieval knights rode small horses that would be considered ponies today
  • The term crusade was not used until the end of the 12th century, 100 years after the First Crusade. It had initially been called a "journey" or a "pilgrimage."
  • The Knights Templar got their name because they had quarters in Jerusalem's al-Aqsa mosque (then converted into a church). It was also there that Solomon's Temple had stood, so they called themselves the knights of temple, AKA "templar."
  • "Aleppo" means milk in Arabic, and so when forecasting his victory over the city, Saladin said that, "we have only to do the milking and Aleppo will be ours."
  • To try to bring supplies and take messages in and out of Acre during the siege from 1189-90, Saladin sent expert swimmers to carry otter-skin pouches of goods undetected. 
  • In 1212, there was some kind of poorly recorded "Children's Crusade" that Asbridge doesn't get into. It seems not to have come to anything.
  • In 1219, during the Fifth Crusade, St. Francis of Assisi showed up to try to convert the Muslims, who politely refused.
  • Something interesting is how in English, crusade can mean all sorts of efforts, like a crusade against drugs or a crusade against anything immoral, not just a religious war. And then in Arabic, a jihad is primarily an internal struggle, although we think of it as a religious war.
  • Kaiser Wilhelm II of Germany went to Saladin's tomb in Damascus in 1898 and laid a wreath there in respect for him, calling Saladin one of the most chivalrous rulers in history.

Monday, May 23, 2022

A Collective Bargain: Unions, Organizing, and the Fight for Democracy by Jane McAlevey

     I first encountered Jane McAlevey on The Argument, a New York Times podcast. I was really impressed by her and so I got this book. In the book McAlevey tells the history of unions and how to revive unions through case studies of real union struggles and strikes that she actually participated in. I found the book really easy to read, and I cruised through it in just a few days.

    The major enemy of unions in the government seems to be the Supreme Court. McAlevey brings up many SCOTUS decisions that have harmed unions. For example, in Mackay Radio & Telegraph, the Court held that striking workers could be permanently replaced by strikebreakers. That decision would be weaponized decades later in the Reagan administration to replace all of the country's air traffic controllers when they went on strike. In another case, Abood b. Detroit Board of Education in 1977, the Court declared that government workers' unions could not negotiate clauses requiring all workers to become members even if they voted for it, although it allowed public-sector unions to collect an agency fee, which was an amount of dues with political activities subtracted. But then, in Janus v. AFSCME in 2018, SCOTUS reversed Abood and banned public-sector unions from collecting any fees from non-members at all, which will dramatically weaken them in non-right-to-work states.

    McAlevey traces the history of union-busting since World War Two in three phases. First, gutting the NLRA through the Taft-Hartley act and containing the existing private sector unions. Second, to destroy those private sector unions. And third, the current phase of attacking public sector unions. Since Taft-Hartley repealed the Wagner Act, unions have lost the government support that used to balance out their power against management. Now it is illegal for unions to have closed shops, prohibiting entry by those who refuse to join the union. While this may sound like it was unfair, McAlevey points out that this is a provision that would have been voted on and decided by the employees of the union, and would be necessary to prevent and employer from diluting their power by hiring new non-union employees. Taft-Hartley paved the way for "right-to-work" laws that ban unions from requiring membership, effectively killing them by allowing non-union members to become free riders. Another law diminishing union capabilities is the Labor-Management Reporting and Disclosure Act, passed in 1959, which requires that unions make regular reports to the government. These reports must include every hour of work done by union staffers, every expense with invoices, records of every mile driven, and "gifts" from employers, which includes shared lunches at negotiation tables. McAlevey says that these burdensome reporting requirements waste union leaders' time and since time is money it wastes union members' money. 

    Another big issue McAlevey talks about is how NAFTA destroyed unions by opening up sources of cheaper labor across the border in Mexico. She really hammers home how Democrats shot themselves in the foot by allowing unions to crumble since unions are some of the strongest liberal political organizers that can be. She quotes Dorian Warren, who says that "For white men in America (across class), the difference between whether they vote Democratic or Republican, conservative or progressive, can be summed up by whether they belong to a union or a church." McAlevey writes that "nothing can rebuild a progressive, ground-up electoral base like a strike-ready union. The Koch brothers know this. The Democrats don't. The choice is clear: build good unions, undo Taft-Hartley, and enable robust collective bargaining and strikes..."

    The book and McAlevey's political analysis in it made me think about the split in the Democratic party and how confusing it is for politicians on either side to have to explain the idiosyncrasies of their political membership. Like I feel like it is very perplexing to most voters that Democrats won the Senate, the House, and the Presidency yet are unable to pass bills. Most people aren't paying enough attention to know that there are two Senators blocking everything, and I imagine most Arizona voters assumed Kyrsten Sinema would be a typical democrat when they voted for her. It makes me think it would be better to get ideological diversity across parties rather than within them. It seems better to have a proportional parliamentary system at least for clarity to the electorate. That way, voters can know what each party stands for and vote for that party, sure that the party will support what it says it supports, without being derailed by individual politicians. Then people can more accurately categorize themselves and the politicians they vote for based on the coalitions that the parties form formally, rather than the hidden, informal coalition-making that still must happen behind the scenes in a two party system. 

Miscellaneous Facts:

  • Martin Luther King Jr. was assassinated when he was in Memphis to support a wildcat strike.

Friday, May 20, 2022

Postwar: A History of Europe Since 1945 by Tony Judt

    This book is a clear masterpiece. I feel like I got a full semester of a college course out of it. Tony Judt does what I notice the true masters of history writing do: he can elucidate the biggest trends and most important events of the time not only by giving us the critical data that proves what happened (and why and how), but he can also tie it to the emotional aspects of living through the time, giving us quotes and perspectives from the people who lived it. It's a history book that reads like a storybook. Judt rises above other historians by not being shy about his own beliefs or trying to obscure his own bias. He tells the reader what he thinks and has a clear moral advocacy based in the grappling he's done with the major events and thinkers of the times he covers in the book. The biggest theme of all is memory, and Europe's willful forgetting of inconvenient truths. Postwar transitions between its major themes very smoothly and I loved the book.

Part One. Post-War: 1945-1953

    The first hundred or so pages of the book deal with the Second World War. Judt goes into excellent detail about the war and its cost on European society. He makes some very interesting points too. Something I would like to have heard more about is Judt's assertion that "because Germany didn't pay its First World War debts the cost of victory to the Allies exceeded the cost of defeat to Germany, which thus emerged relatively stronger than in 1913." I've definitely heard a lot about the failings of the Treaty of Versailles, but I've never heard it put like this that Germany was stronger than the other European states coming out of the hyperinflation and Depression.

    The gist of part one of the book is that the first half of the twentieth century completely destroyed Europe, and then set the path for its future. 36.5 million Europeans died between 1939 and 1945 due to war-related causes, equivalent to the pre-war population of France. The number doesn't include those who died of natural causes and the numbers of children not conceived or born due to the war. So the war dramatically reduced Europe's population. Of these 36.5 million, 19 million were non-combatants. Only in the UK and Germany did military losses significantly outnumber civilian losses. Poland lost one-fifth of its pre-war population, disproportionately falling on the highly educated, as they were targeted most by the Nazis. Yugoslavia lost one in eight people, the USSR one in eleven, Greece on in fourteen, Germany one in fifteen, France one in 77 and Britain one in 125. 

    The World Wars also rearranged the ethnic groups in Europe. While the Turks may have been an exception in pursuing genocidal strategies in WWI, the First World War ended with the European countries rearranging their borders around ethnic groups. In the Second World War, Europe rearranged its ethnic groups around its borders. the Germans did the dirty work of slaughtering the Jewish population, which most in Europe didn't have any complaints about. Most Jews then ironically spend their post-war years in Germany before going to the USA or Israel, since there was no future for the Jewish people in Europe. The Nazis also purged the Roma people. At the end of the war and afterwards, the people of Europe deported the Germans in their borders. Germans were forcibly removed from all over eastern Europe, as Czechoslovakian President Edouard Benes proclaimed that "we have decided to eliminate the German problem in our republic once and for all." Czechoslovakia expelled nearly three million Germans, and over 250,000 died during the expulsions. Hungary, Romania, Yugoslavia, and Poland expelled 623,000, 786,000, 500,000, and 1.3 million, respectively. It was truly revolutionary, as the wealth of Germans seized by Czechoslovakian authorities amounted to 25% of national wealth, and was redistributed to the remaining citizenry. 

    The western European experience was completely different from the east. Eastern Europeans fought viciously against the Germans and paid dearly for it. But in western Europe, there was little German-owned property to redistribute and they had suffered far less during the war. In 1941, the Germans occupied Norway with just 806 personnel, and France with just 1,500. The Germans were so confident in the docility of the French that they only ever used 6,000 troops to ensure the compliance of 35 million French. The Dutch were the same. Judt compares the western Europeans to the Yugoslavians, who in contrast held down entire German divisions trying to contain armed partisans.

    De-Nazification was not really very successful in Germany. I had thought that it was more complete, but Judt makes it a point to show how Germans were not really convinced, despite laws that exist now against Nazism and reparations to victims of Nazism. Judt writes that while only 6% of Germans claimed the Nuremberg Trials were unfair in October 1946, by 1950 one-third thought so. Throughout the rest of the forties, a majority of Germans believed that "Nazism was a good idea, badly applied." In November 1946, one-third of Germans thought Jews should not have the same rights as those of the Aryan race, and the number actually increased to 37% in West Germany by 1952. In the same year, 25% of Germans had a "good opinion" of Hitler. 

    Further, in 1951, only 5% of West Germans felt "guilty" towards Jews in a poll. Only 29% acknowledged that Germany owed some restitution to the Jewish people. 40% felt that only those who were "truly responsible" should pay, and 21% believed the Jews had brought it upon themselves. Despite that popular opposition, centrists in West Germany succeeded in passing a reparations package that would end up totaling over 100 billion dollars over the decades. 

    As the European states came out of the war, Social Democracy was the winning ideology of the day in the west. In France of Italy, there was basically no ability to restart capital markets, so everything had to be completely publicly funded. The western Europeans created welfare states, which were socially redistributive, but not revolutionary. Judt argues that while the greatest immediate advantages of the plan went to the poor, the real long-term beneficiaries were the professional and commercial middle classes, who had previously been ineligible for work-related health, unemployment, or retirement benefits. They had to purchase such services from the private sector before, but now got them provided by the government. I think Judt's bias is showing here, and he's trying to convince the reader of broader benefits of social democratic states. But this seems like something that real conservatives would not entertain at all as an argument. If taxes go up, I don't usually see professionals who are paying them happy about getting some increased welfare. But I do agree with him in the content that middle class people are better off when they have free education for their children and other government benefits in exchange for moderately higher taxes. 

    Judt also explores how the political scene of Europe was totally different after World War Two compared to World War One. After the first war, there was a radicalizing effect, as people sought out communism and fascism as competing ideologies, which came to dominate Russia and Germany, respectively, but also had major impacts in other countries. In fact, Italy was the first country to become officially fascist. But in 1945, the mood of Europe favored dull, compromising politicians. The most successful of them were the oldest. Now that two generations had been culled by two world wars, there were fewer young and middle-aged men. And of those who survived Europe's purge, many were discredited by their poor policies or advocacy of rejected ideologies. The European social reformers of the turn of the century returned to power or remained in it, such as Blum in France or Atlee in Britain.  

    It took about a year for the Soviet Union and the western nations to split their alliance. Something that comes up in a million books about the end of the war, especially those written by the English, is that the Americans totally got played by the USSR and had no idea what was coming in the Cold War. Americans were shocked when the Soviets stayed out of Bretton Woods, prompting Kennan to write his telegram. All sides had originally intended for Germany to remain united, but none could agree on how to govern it. In Spring of 1946, it ended up de facto divided along the lines agreed to at the end of the war. So something I learned was that there was no "plan" to divide Germany, it just happened. Both sides essentially split Germany so they could each profit from its revival.

Part Two. Prosperity and Its Discontents: 1953-1971.

    Judt starts this chapter by bringing up the work of English historian J.H. Plumb to decribe Europe in the early 1950s. Plumb wrote that, "there is a general folk belief ... that political stability is of slow, coral-like growth; the result of time, circumstances, prudence, experience, wisdom, slowly building up over the centuries. Nothing, I think, is further from the truth. Political stability, when it comes, often happens to a society quite quickly, as suddenly as water becomes ice. Now that's an interesting thought. Judt argues that that's what happened to Europe after World War Two, emerging from a half century of chaos and war to suddenly embrace peace and integration once again.

    A huge takeaway from this part of the book is the importance of 1956. On October 26, the Red Army invaded Hungary and seized Budapest in just 72 hours. On October 29, the Israelis invaded Egypt to seize the Suez Canal with British and French support. Eisenhower was furious with the British and French for keeping him out of the loop and distracting attention from Hungary at a time when he was indisposed, as he was campaigning for reelection on November 7. It is amazing to consider that all three of those events happened in just twelve days. It is also incredible to think of how far Russia has fallen, from seizing the Hungarian capital in just three days to failing to seize the Ukrainian capital in what's nearly been three months of fighting. Judt identified a significant dynamic that occurred the death of Stalin in 1953 and the invasion of Hungary in 1956: the USSR lost its cultural cache among left-wingers throughout the west that it had enjoyed through the 1940s. Somehow, despite Stalin's immense evil, he was popular in the west, and the invasion of Hungary cemented the USSR as an evil empire in the eyes of most sensible people. Hungarian writer Istvan Bibo wrote that, "in crushing the Hungarian revolution, the USSR has struck a severe blow at 'fellow traveler' movements (Peace, Women, Youth, Students, Intellectuals, etc.) that contributed to Communism's strength." The people who once admired Stalinism and the communist project now turned to the decolonization movement as their ideological pet project and counter-cultural feeling. 

    The Franco-British-Israeli tactical success and strategic failure at Suez marked the end of an era in which European states could conduct their foreign policy wholly independent of the United States. Soon, everything they would do would be in relation to perceived American reactions. Britain realized it could no longer retain a global colonial presence, and between 1960 and 1964, seventeen British colonies declared independence. Britain responded to Suez by becoming much closer to the United States, while France moved further away from Washington, sometimes antagonizing the Americans throughout the Cold War. 

    Britain was in need of a much larger industrial export market in the face of decolonization costing the former colonizer its subject peoples as consumers. Harold Macmillan's government applied to join the European Economic Community (EEC) in 1961, six years after London disengaged from the original talks to form the EEC. Ireland and Denmark applied alongside the UK because of their close economic ties. However, De Gaulle rejected Britain's application in 1963. It wasn't until 1973 that the UK was successful in joining the EU. It had to wait for De Gaulle to leave power in France, and also for its own economy to become relatively weaker so that the other European states in the EEC would feel less threatened by British influence and Britain reduced its own demands. 

    But the EEC wasn't a necessary precondition for European economic integration. Instead, the EEC, writes Judt, was just a formalization of the economic links already formed. Prior to the Treaty of Rome, future states of the EEC were already primarily trading with one another, in a complete reversal of the trend from the late 19th century. You can really see how people would come to believe in trade as the means to world peace. In 1958, 29% of Germany's exports went to France, Italy, Belgium, Netherlands, and Luxembourg. 30% went to other European states. On the eve of signing the Rome Treaty, 44% of Belgian exports were already going to its initial EEC partners. Countries that wouldn't join the EEC or the EU until later were already integrated into its networks in the 1950s and would only strengthen those connections. 

    Additionally, European nations were faced with mass migrations between and among one another. Seven million Italians left Italy between 1945 and 1970. Greece lost a quarter of its labor force between 1950 and 1970. Portugal lost half a million people out of its population of eight million and its workforce of three million. The shortfall in people was made up for in immigrants from former colonies and other regions outside Europe, which created little social upheaval at the time due to the segregation of peoples and the popular understanding in the receiving countries that these workers would only be in their countries temporarily. Judt sums up the immigration changes in Europe: "without heap and abundant labour in this vulnerable and mostly unorganized form, the European boom would not have been possible. The post-war European states--and private employers--benefited greatly from a steady flow of docile, low-paid workers for whom they frequently avoided paying the full social cost. When the boom ended and it came time to lay off the excess labour, the immigrant and migrant workforce was the first to suffer."

    The welfare states grew tremendously in Europe in the 1950s and 60s. Between 1950 and 1973, French government spending rose from 27.6% to 38.8%, 30.4% to 42% in West Germany, 34.2% to 41.5% in the UK, and 26.8% to 45.5% in the Netherlands. And this was all at a time when these countries' GDP were rising faster than ever before or since. Most of this spending went to insurance, pensions, healthcare, education, and housing. I learned in this part of the book the difference between the Social Democrats and Christian Democrats in Europe. While each of these parties thought that the welfare state should provide for its citizens from cradle to grave, the Christian Democrats favored a state role in the morality and social affairs of its citizens, where the Social Democrats were more socially liberal. 

    In Italy, the end of the reign of Eugenio Pacelli, Pope Pius XII (1939-1958) meant huge changes for the church and country. Pius XII had been closely tied to Mussolini and ambivalent in the face of Nazism. He was enthusiastically in favor of Spanish and Portuguese fascism. He strongly pushed Catholics throughout Europe to vote for Christian Democrats, and not until 1967 would a Dutch bishop suggest in public that Dutch Catholics may mote for a non-Catholic party without risking excommunication. This really strikes home why there was so much anti-Catholic sentiment in the US at the time and why people would fear that Kennedy would have been beholden to the Pope. It doesn't excuse it, but it adds up when you see what this Pope was supporting. But after the death of Pius XII, the church entered a period of change, with Vatican II, the final divorce between politics and religion in Europe. In that meeting, the Vatican removed itself from politics and Pope John XXIII declared that all church services would use the vulgar languages instead of Latin. 

Part Three. Recessional: 1971-1989

    In the 70s, Europe, like the United States, entered a long recession. Judt traces it first to the American decision to end the gold standard, which the Americans got rid of because of the high cost of the Vietnam War and the need to pay for it with borrowed money, which artificially raised the dollar's value. When the Americans floated the dollar, all the Europeans had to float their currencies as well to keep their currency values balanced. But then, after the Yom Kippur War in 1973, Arab States in OPEC decided to punish the West for its support of Israel by constricting the global supply of oil, drastically increasing prices and provoking shortages. From 1955 to January 1971, the price of oil had only risen from $1.93 per barrel to $2.18 per barrel, making the West completely dependent on it. Then, by raising prices, OPEC caused huge inflation in the economies dependent upon them that no longer tied their currencies to the gold standard. The inflation rate in non-communist Europe was just 3.1% from 1961-69, 6.4% from 1969-73, and 11.9% from 1973-79. Inflation was compounded again by the shock from the Iranian Revolution in 1979.

    At the same time, European economies slowed down significantly from the rapid pace of the 1950s and 60s. From 1953-73, French annual growth was around 5%, while West Germany was at 6% and the UK over 3%. But it turned out to be an aberration. As the economic growth slowed, unemployment rose, with France reaching 7%, Italy 8%, and the UK 9%. Unemployment levels in the 1970s were comparable to the 1930s in many cases and actually were worse in France and Italy. Europeans hardened their attitudes towards foreign workers at this time, the people who were the most affected by layoffs and probably also undercounted in those unemployment numbers. In 1974-75, three in four BMW workers who lost their jobs were foreign nationals. In 1975, 290,000 immigrant workers left West Germany and returned to Turkey, Yugoslavia, Greece, and Italy mainly. 

    Politically, Europe moved towards the center in the 1970s and 80s. In Greece, Italy, and Spain, dictatorships fell, and throughout western Europe, people reacted to terrorist movements like the ETA, Baader-Meinhoff, and others by becoming more centrist in their outlook. I took some notes on the specifics of these but decided not to go into it here, as well as the political changes that led to the fall od the USSR. Basically, governments exposed themselves as illegitimate. Greece failed in its invasion of Cyprus. Portugal crashed its economy. And the USSR's autonomous republics, by showing other political viewpoints on TV, killed themselves because they'd only been propped up by the individual fear one held that everyone else was a true believer. Once the veil was pierced, it was over. But in Spain, the dictator died old and in power.

Part Four. After the Fall: 1989-2005

    German reunification came much quicker than anyone anticipate and was a surprise, but a welcome surprise to the Americans. At first, President George HW Bush wanted to only unify Germany after the end of the unpredictable changes in the Soviet Union, and then for Germany to only unite with the USSR's consent. But then Washington "caught the prevailing mood" after polls revealed in 1990 that 58 percent of West Germans "favored a united and neutral Germany." So that would be bad for the US: a bigger, united Germany that was not on the Western side. Therefore, the USA supported German unification under West Germany so that all of Germany would join NATO. When the GDR (East Germany) was assumed into West Germany, the East Germans changed town names and signed back to pre-1933 usages and continued a process of forgetting all the history since Hitler rose to power. People were more focused on the future. In East Germany a quarter of houses lacked a bath, one third had only an outdoor toilet, and over three-fifths lacked any form of central heating. Since East Germany was so much poorer, someone would have to pay to develop it and bring it up to speed. But Chancellor Helmut Kohl chose not to raise taxes, instead deficit spending, which the Bundesbank responded to by raising interest rates. This increased unemployment and slowed German growth just as the newly united country joined the Eurozone, essentially making the rest of Europe pay for Germany's reunification, a major windfall.

    The end of the Soviet Union came just as unexpectedly fast as German reunification. I'll just point out something that stood out to me- Judt writes that Ukraine sat on Russia's access routes to the Black Sea and was a critical part of the Russian economy. With only 2.7% of the USSR's land area, Ukraine held 18% of the USSR's population, 17% of GNP, 40% of agricultural output, a majority of titanium, and 60% of coal reserves. This is all good motive for Vladimir Putin's invasion of the country a quarter-century later. Interestingly, it wasn't Ukrainian nationalists who declared independence, but actually Communists in the Ukrainian Soviet beat them to the punch on July 16, 1990.

    The next year, in August 1991, plotters sought to remove Gorbachev from power while he vacationed in Crimea (did he think he was in a foreign country at this point?), just as had been done to Nikita Khrushchev nearly three decades earlier. But the plotters didn't have unanimous support of their own agencies, most importantly lacking some of the major officers of the KGB. The plotters were clearly against Gorbachev, but they weren't for anything better. At that critical moment, Boris Yeltsin denounced the Kremlin takeover and placed himself at the head of the resistance. In the midst of the coup, Latvia and Estonia declared their independence. Coup leaders were arrested by Yeltsin except for the Interior Minister, who killed himself. Gorbachev, despite having survived this coup, went out easy against a different sort of coup. On December 17th, Gorbachev met with Yeltsin and conceded that the Soviet Union could not continue to exist, and he resigned. On December 31, 1991, the USSR ceased to exist. Judt writes that the end of the Soviet Union came when Gorbachev eliminated the repressive apparatus of the state. Once it was clear that the KGB would no longer be deployed to punish dissent, the massive empire could no longer hold its external provinces to the center. Interestingly, there was no immediate transition to democracy. That came later. First, the same autocratic Communists who always ran things ruled over smaller states around Russia, and then they were ousted later. So it really isn't the story of democracy prevailing over Communism, it's more like the classic story of an empire no longer willing to subjugate it's far-flung regions, which then break away.

    Yugoslavia went through a painful decade in the 90s. Slobodan Milosevic was elected President of the Serbian republic within Yugoslavia in May 1989, immediately forcing through an amendment to Serbia's constitution to absorb the autonomous provinces of Kosovo and Vojvodina into Serbia, giving Serbia a block of four out of eight federal votes in any federal dispute (also including the ally Montenegro). Milosevic sought to create a more unitary state with the Serbs in control, which the Croats, Bosnians, Slovenians, and Macedonians opposed, deadlocking Yugoslavia 4-4. In December 1990, Milosevic seizes without authorization 50% of the drawing rights of Yugoslavia to cover back pay for federal employees and state workers. Since they basically stole Yugoslavia's money, the Slovenians were especially upset, being that with just 8% of the population of Yugoslavia they contributed 25% of the federal budget. They immediately declared independence, and the Croats and Macedonians followed suit within a month.

    There was no single Yugoslav war, rather, there were five. The Yugoslav effort to keep Slovenia in lasted for just a few weeks in 1991, then allowing the country to secede in peace. But then there was a far bloodier war between Croatia and a rebelling Serbian minority (backed by the Yugoslavian army in practice controlled by Serbs). That ended in a UN-brokered ceasefire after a year. But then, after the Croats and Muslims of Bosnia voted for independence in March 1992, the Serbs of Bosnia declares war on Bosnia and set out to create the Republika Srpska, which got the backing of the Yugoslav army, laying siege to many towns as well as the Bosnian capital, Sarajevo. Meanwhile, another civil war broke out between the Croats and Muslims of Bosnia, with some Croats trying to carve out a region of Herzegovina. Finally, after all these conflicts ended, but not before another Croat-Serb war broke out in 1995, there was a war over Kosovo. Since he lost everywhere else, Milosevic tried to expel the Albanian population from Kosovo, but NATO forces intervened and stopped him in spring 1999. Judt identifies the Serbians and their elected leader, Slobodan Milosevic, as the instigators of these wars and the breakup of Yugoslavia, who thrust the Balkans into unnecessary chaos.

    The European Union states witnessed a reduction in power of national borders during the 1990s and early 2000s. There was first a trend of national devolution in the 1980s, and then a trend of internationalization in the 1990s. So national borders became weaker as the borders of the EU itself became stronger, as well as internal borders, especially in Belgium. One unforeseen effect of the Maastricht Treaty and greater "Europianization" was that it boosted NATO, as many countries that were refused from joining Europe's economic union (Eastern European countries mainly) were able to join its military alliance, as Washington was happy to have them, and the Americans pulled the strings anyway. The growing power of the EU also increased the general public awareness of Brussels' inner workings, as politicians like to blame problems on Brussels and citizens paid more attention to what was going on in European Parliament. But was it good to enlarge the EU? German Foreign Minister Genscher proposed enlargement to prevent nationalistic backlash after the end of the USSR, and UK PM Thatcher supported enlargement as a way to dilute the EU's power into a pan-European trade area. But France slowed them all down for many years, demanding a more deliberate approach to expansion.


    Some of the most interesting things Judt writes about are the portions that feel like a relic of having written this book in 2005. He talks a lot about Europeans ceasing, with the end of the Cold War, to identify with America, and choosing to identify themselves in opposition to it. Europeans saw themselves as more mature (their countries were certainly older) and having different values than the USA based on the welfare state. I'm not sure this is so clear today as it was during the Bush administration. Certainly Europe likes America less every time we elect a Republican, but it feels like there's been an inversion of the economic policies, where the USA became more fiscally liberal after 2008 whereas Europe embraced austerity under German leadership. And moreso, since the Russian invasion of Ukraine in 2014 and again this spring, I think Europe and America feel much closer than in 2005. Some of Judt's best writing in the book is when he characterizes an event or an era in a way I never considered before. Writing of the Cold War, he says it was "an extended epilogue to the European civil war that had begun in 1914, a forty-year interregnum between the defeat of Adolf Hitler and the final resolution of the unfinished business left behind by his war." 

    Judt finishes the last chapter of the book by characterizing the 20th century as America's century, when Europe plunged into the abyss, but says that perhaps the 21st century will be Europe's century. I find that to be a nice thought, but hard to believe 17 years later. Since the book was written, America has only increased its leadership over Europe in the economic and military spheres. The dollar is stronger as the reserve currency of the world, and the US is spending more on its military to defend Europe than the Europeans do, a trend that may only start changing this year. But where Judt may be right is when he says that neither America nor China have serviceable models to be emulated. This is almost certainly true. America in 2022 has become so dysfunctional that most would call it broken. While China is extremely effective at governance but politically in the complete wrong direction, becoming some kind of economically prosperous version of North Korea. Europe, on the other hand, offers a model of social democracy and mutual cooperation without warfare that may be a better model from the world if they can just make the EU governance functional.

Conclusion

    In the epilogue, Judt chooses to focus on European memory of the Holocaust, something that I didn't expect, but was extremely well-written. Judt convincingly writes that, whereas the entry ticket for Jews into Europe was baptism, as Heinrich Heine wrote in the 19th century, today the entry ticket into Europe is the acknowledgement of genocide. Poland and other Eastern European countries had to acknowledge the Holocaust before entering the EU, and Turkey still refuses to admit to the Armenian genocide, remaining without.

    Europeans were largely indifferent to the Jews after the Holocaust, and were uninterested in the Jews suffering compared to their own milder difficulties (which were still great). But in the 1970s, things started to change first in Germany. It had taken a long time. In 1955, still 48% of Germans saw Hitler as one of Germany's greatest statesmen "but for the war," and the number had only declined to 32% by 1967. But several events changed things: the Six Day War, Chancellor Brandt dropping to his knees at the Warsaw Ghetto memorial, the murder of Israeli athletes at the 1972 Munich Olympics, and , most important, the 1979 telecast of the "Holocaust" miniseries for four days straight in January 1979. Twenty million viewers (over half the adult population) watched the program, and it changed Germany. Whereas in 1968 just 471 school groups visited Dachau, which was so close to Munich, by the end of the 70s, over five thousand visited annually. 

    Then, in the 1990s, there was an outpouring of interest in the Holocaust and its survivors, and public figures acknowledges their countries' roles in the Holocaust. Yet there was also a reactionary movement to this of those who wanted to shift all the blame onto Germany, or ignore the part their own countries played. In the USSR, they had a policy similar to much of Western Europe in which victims of the Holocaust were described by nationality, so that you would never know any Jews were killed (or had even been there in the first place. For Europeans, World War Two hadn't been about the Jews. It had been about them, and their brave resistance to the Nazis (even if their country had been allied with the Nazis). Judt says that anti-semitism was not at the root of European feeling in World War Two, rather it was just indifference. The real anti-semites were the few Nazi officials who plotted the final solution, and the rest of Europe simply didn't care.  

    I think Judt's point about anti-semitism is semantic, and reminds me of concepts of anti-racism discussed by Ibram Kendi. To most people who do not experience oppression, oppression is something people do. But to the oppressed, oppression is something that is done to you. So when Europe is indifferent to Jewish suffering in the Holocaust, and before and after, I don't think it matters whether that's anti-semitism or not, all that matters is that it's bad. And if the supposedly good people don't do anything when evil strikes against the weak, maybe those people aren't so good after all. Ibram Kendi says it's not enough to just be not racist, people should be anti-racist. And I think that makes a lot of sense applied to his situation.


Miscellaneous Facts:

  • In September 1944 there were nearly 7.5 million foreigners in Germany, most against their will, who constituted 21 percent of the country's labor force. 
  • Hungarian inflation reached 5 quintillion pengos to the dollar, so that by the time the pengo was replaced by the forint in August 1946, the dollar value of all Hungarian banknotes in circulation combined was just one-thousandth of a cent!
  • When the allies created a new currency for Germany, the "deutsche mark," it was exchanged for the "reichsmark" at a 1:1 ration for the first forty and then 10:1. I have no idea how this was possible since it sounds absolutely revolutionary and shocking in destroying savings. I need to read more about this.
  • Judt writes that the only reason the French assented to the creation of a West German state was because of the promise of NATO.
  • Vienna was also divided between the Allied powers after WWII like Berlin. I never heard about that.
  • Something that Judt points out that for all the fuss made out of social movements on college campuses in the 1960s, in 1968 most young people in every European country were not students, and they had completely different experiences in the 1960s. 
  • After the Six Day War, there were enormous persecutions of Jews in the Soviet Union. In Poland specifically, Jews were referred to as a fifth column, and 20,000 of Poland's 30,000 remaining Jews left the country.
  • The Romanian dictator, Ceausescu approved the following official nicknames for himself: The Architect, the Creed-shaper, the Wise Helmsman, the Tallest Mast, the Nimbus of Victory, the Visionary, the Titan, the Son of the Sun, A Danube of Thought, and the Genius of the Carpathians.
  • Lithuania was in the 1990s and still is the only Baltic country without a very significant Russian minority, with the country being only 5% Russian compared to over 20% in each Latvia and Estonia. Most Russians historically live in the major cities, having moved there under the reign of the Soviet Union.
  • By 2004. 36 Russian oligarchs controlled $110 billion, one-quarter of Russia's entire GDP.
  • I don't know if this is still true, but apparently in the 1990s, any German who lost his or her job would get 60% of their last wage for the next 32 months, and then 53% indefinitely. The numbers are 67% and 57% if they have a child.
  • In a 2003 measure of worker productivity, Switzerland, Denmark, Austria, and Italy were all similar to the USA while Ireland, Belgium, Norway, France, and the Netherlands were all more productive, but just worked less hours. 
  • Austria had one-tenth the population of pre-war Germany but supplied half the concentration camp guards.
  • Lech Walesa commented on a study of a massacre of Jews by their Polish neighbors that the Jewish writer was a "Jew who tries to make money." Walesa said he was just trying to sow discord between Poles and Jews. It seems to me like Walesa proved his point.
  • Old Soviet joke: A listener calls up "Armenian Radio" with a question: "Is it possible to foretell the future?" They reply, "Yes, no problem. We know exactly what the future will be. Our problem is with the past- that keeps changing."

Thursday, May 12, 2022

Shutdown: How Covid Shook the World's Economy by Adam Tooze

    Tooze has done it again. This was an amazing book that I found really challenging in a good way like few other books I read. Tooze may be limited in scope by the timing of when he wrote the book, but Shutdown is full of absolutely foundational knowledge about the governmental responses to the financial crises caused by the pandemic. Tooze is at his best when telling the story of the central bankers, and I think this book will be read by many for years to come.

     China was of course the first hit by Coronavirus, and while its initial response was bad, it is hard to criticize considering how bad the response was everywhere else. But unforgivable is the discipline and attempted silencing of Dr. Li Wenliang, who first identified the virus and was killed by it. When Li died on February 7, 2020, the hashtag "The Wuhan government owes Li Wenliang an apology" was viewed 180 million times before being blocked by censors. On February 7, the CCP's power was most seriously challenged, but it was a turning point as the Party unleashed tough repression, both against the disease and against free speech. President Xi Jinping addressed 170,000 cadres of the CCP on February 25, declaring that the two-and-a-half weeks of isolation and shutdown had largely worked and that it was time to ease restrictions to restart the economy. But the delays and lack of action in China in January had already done too much damage. By delaying on implementing a quarantine when it was still possible in January (which the WHO condoned at the time), the February quarantine failed to contain the virus.

    In February 2020, President Trump was completely uninterested in the virus except as it related to his attempt to get a trade deal with China. Secretary of State Pompeo announced a shipment of eighteen tons of medical equipment to China on February 7. While US bureaucracy moved quickly to help China, it moved slowly within its own borders. The first set of CDC tests were shipped to a hundred labs on February 4, but they turned out to be faulty and it was weeks before a new test could be developed. Aggravating the problem, the FDA refused to authorize alternative tests! Regulators argued that the crisis would be exploited for profiteering, an obviously stupid argument since the profit motive would have been the number one motivator of new test development. The FDA said they didn't want the "Wild West." For comparison, South Korea increased test capacity from 3,000 tests per day on February 7 to 20,000 at the end of the month. By February 20, South Korea was testing all people with symptoms regardless of travel history and the country shut down schools on February 23. Despite the pandemic beginning much later in South Korea, their cases peaked on February 29, days after that of China. 

    Price fluctuations hit oil prices hard in March 2020 (which we know would later rebound in the winter of 2021-22). Faced with dropping demand, Saudi Arabia wanted to stabilize prices by cutting production, but Russia preferred to engage in a price war to squeeze other producers. The result of the price war was that both countries flooded the market starting on March 6, and within five weeks oil futures contracts would briefly go negative.

    On March 11, President Trump closed the United States to travelers from continental Europe. Shutdowns followed travel bans, and Western governments were often the last to act, especially in the United States. On March 18, GM, Ford, and Fiat Chrysler shut down American operations under pressure from the United Auto Workers, while Elon Musk held out for one day longer. Tooze notes that while Musk had followed official instructions in China without question, he took a stand based on his own personal judgment in California (before folding). Tooze doesn't mention it in the book, but on March 19, Musk predicted close to zero new cases by the end of April. Trump vacillated, and less than a week after announcing that large restrictions would come, he said the country wasn't built to be shut down on March 23, and announced he wanted America back to work by Easter, April 12. But he changed his tune again on March 29 after some convincing by Dr. Fauci and Dr. Birx and seeing images of overwhelmed hospitals in Queens, New York. Trump announced the extension of the lockdown through April. 

    Markets responded to Coronavirus quicker than most governments and central banks responded quicker than their legislative counterparts in charge of fiscal policy. In early March, before the UK declared its lockdown, household discretionary spending in the country plunged from 300 pounds per week to just 180. The same movement happened in the United States before we implemented our lockdowns. Across the world, where governments lagged in coordinating, people began to react to news of the virus. The IMF compiled data about a reduction in mobility using cell phone data; in rich countries, self-motivated social distancing had a much larger effect than lockdown orders. Of the average 19% reduction in mobility during the ninety days after first recorded infection, just a third (so like 6% mobility reduction) was attributable to mandatory government action. 

    The pandemic hit the poorest people the hardest. Whereas 75% of Americans making $200,000 or more were able to telework, just 11% of those making under $25,000 could do the same. This created huge demand for the "essential workers" who had to do the hard work of keeping society running during a pandemic and Amazon hires 427,300 new employees between January and October 2020, hiring 2,800 new employees a week at the peak. The recession that came with the shutdown hit women harder than men. Women outnumbered men in paid employment in the United States for the first time at the end of 2019, and then outnumbered men in job losses by the end of spring of 2020, just after they'd gotten ahead. On March 26, the Department of Labor had tallied 3.3 unemployment insurance applications, a number so large that it made charts unreadable. The previous record during the 2008 financial crisis was just 665,000.

    In India, the shutdown created one of the world's two biggest labor market shocks, comparing only to China's Covid-related shutdown. With a workforce of 471 million, only 19 percent of Indian workers are covered by social security and two-thirds have no formal employment contract. 100 million are migrant workers. This created a "lockdown and scatter" effect, as Indian workers retreated to the villages from the cities and approximately 122 million people lost their jobs in the country. By May 3, estimates of Indian unemployment reached 27%.

    Extremely concerning to observers of financial markets was the run for safety on March 9, when investors sold everything, including Treasury bills that are usually considered safer than safe. The trillion-dollar Treasury market is the foundation of all trading because it is the safest asset, and what had been traded in volumes of hundreds of millions had plummeted to just $12 million by March 13. Tooze writes that if the panic had been allowed to develop, it would have been worse than 2008. Luckily, it wasn't, and the banks were in a better position than in 2008 thanks to regulations mandating stronger balance sheets as well as the banks' own efforts at self-preservation. 

    Tooze is effusive regarding the response of the Federal Reserve led by Jerome Powell. On Sunday, March 15, Powell called a press conference and announced that the Fed was cutting interest rates to zero to jump start the economy and that the Fed would but at least $500 billion in Treasuries and $200 billion in mortgage-backed securities. This gave investors real cash in exchange for largely safe investments that were dropping in value due to the crisis. This created liquidity for investors and stabilized Treasuries to recover trust in markets. By buying these, the Fed was pushing out dollars for the world to use, and the Fed resumed the role it had in the 2008 crisis by easing the terms on liquidity swap lines, a familiar story to me from Crashed, another book of Tooze's. While 2008 was all about getting liquidity to Europe's banks, this time the Federal Reserve did it for Asian financial institutions.

    Eight days later, on March 23, in its role as lender of last resort, the Fed revived the Term Asset-Backed Securities Loan Facility (TALF), which loaned money to banks with asset-based securities as collateral in case the banks couldn't pay up. I think this is how the federal government ended up with all the student loan debt after 2008. In addition, Powell announced on the 23rd that there would be two new facilities to support credit to large employers: the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF). These would buy corporate debt or loans directly from corporations or from the books of other investors, respectively. The proposed volume was $750 billion for the funds. This was a much bigger risk for the Fed to buy corporate bonds. Somehow they were able to get away with this by only earmarking $30 billion to cover losses. I had no idea it could be done with so little. The Fed had been unusual in never buying corporate debt previously, as the Bank of England and the European Central Bank already did so as well as the Bank of Japan, among others. Japan even bought shares, gaining equity ownership- The Bank of Japan built up a $434 billion holding between 2010 and 2020 in its country's equity market. Finally, the Fed also threw its weight behind public debt for municipalities in the United States, easing the flow of credit to local governments through the Money Market Mutual Fund Liquidity Facility (MMFLF) and the Commercial Paper Funding Facility (CPFF). The fed notionally earmarked $500 billion to support the short-term notes issued by large cities and counties and states. In the Spring of 2020, the Fed ended up buying bonds at a rate of a million dollars per second and in weeks accumulated 5% of the 20 trillion-dollar market in US public debt. That way, since you could always sell T-bills to the Fed, the T-bills were safe again and the Fed could lower the interest rates to zero to stimulate growth and inflation.

    Tooze tells us that March 23 was the turning point that began the US recovery. By mid-August the S&P 500 had regained all its losses and was back setting records for new highs. The Fed's actions were absolutely necessary to save the economy, but it also managed to restore wealth to the richest elites of the world, contributing to the fact that the wealth of billionaires worldwide rose $1.9 trillion in 2020, with $560 billion going to America's wealthiest, while the world's poorest got nothing. Tooze finishes chapter six of the book, titled "Whatever It Takes," by asking whether central banking will ever go back to normal. In the early 2010s, the goal was normalization, but by 2020, the hesitancy around central bank interventions was gone.

    The US managed a strong fiscal response to Coronavirus as well as its monetary response. Unlike in 2008, the Republicans were able to muster votes for a response. We passed the CARES Act on March 25, which ended up spending $2.7 trillion, over 10% of US GDP. It is pretty amazing to think about the political changes in America from when Obama passed a $900 billion stimulus out of fear of the one trillion-dollar sticker shock to passing a $2 trillion dollar stimulus twelve years later. At the peak in May, the US federal government was pumping $200 billion into the economy per week. We were the biggest fiscal spenders in the worldwide effort that spent $14 trillion by January 2021. The big spending would later cause at least some of the inflation that we are dealing with now. Savings rates shot up as the middle-class and above had nothing to spend their stimulus checks on. In the United States, the average savings rate shot up from 8% to 32% and in Europe it went from 13% to 24%. The stimulus tended to benefit large online retailers rather than local businesses since people were ordering online. This had a huge impact on global demand generally since Americans were buying goods from abroad with our strong currency. 

    Of the $2.7 trillion spent under the CARES Act, only $610 billion was used for unemployment and stimulus payments to households. $525 billion was set aside for large businesses and $185 billion was set aside for health providers, while the largest portion, $669 billion, was given to small businesses (under 500 employees) under the Paycheck Protection Program. By August 2020, $160 billion went to the airline industry. The CARES Act also extended the Trump tax cuts that benefitted high income earners, lifting caps on some tax deductions- Tooze writes that benefits for private equity firms, households earning over $500,000 annually, and firms that earned over $25 million annually amounted to over $174 billion. Much of this debt was paid for by the Fed buying the debt up from the treasury, further breaking the barrier between monetary and fiscal policy that was once so important to central bankers. Where once central bankers considered it their sole job to keep inflation down, now they raised inflation to save the economy and prevent deflation, seeking to stabilize prices in both directions. Of course, at this point, you wonder why is the monetary policy moving through the big banks? Why not just give every American an account at the Federal Reserve? Ben Bernanke says the problem with this policy is "not its economic logic, but its political legitimacy." If the Federal Reserve becomes the de facto funder of the government, I think a lot more Americans will start asking why they can't get a piece of the action.

    The global fiscal response exacerbated global inequalities, as the highest income economies passed the biggest stimuluses. The average advanced economy was able to pass a stimulus that was 8.5% of GDP, while middle-income countries averaged 4% and low-income countries did just 2%. Europe learned its lessons from 2008 and became more interventionist, whereas China actually intervened less than in 2008, especially low considering inflation and how much China's economy had grown over those twelve years.

    For the poorest of countries, the Trump administration agreed to suspend debt payments in the Debt Service Suspension Initiative, but that only amounted to $12 billion for the poorest of the world's poor countries, less than two percent of all debt service owed by the poor and middle-income countries of the world (excluding China, Mexico, and Russia). Argentina, Ecuador, and Lebanon all defaulted on their debts in the summer of 2020, but the governments of Korea, Colombia, Chile, South Africa, Poland, Romania, Hungary, Croatia, the Philippines, Mexico, Thailand, Turkey, India, and Indonesia all began bond purchase programs to have their central banks buy their treasuries' bond like the US was now doing. Tooze calls it a major change in the "toolkit" of economic policies that may usher in huge and permanent changes to the financial systems of the world. The EU also changed its "toolkit" by issuing Eurobonds for the first time, and the EU budget for 2021-2027 of 1 trillion euros would get an additional 750-billion-euro fund, split about half-and-half between grants and loans.

    The United States tried to add more fiscal response at the end of 2020 and in the first months of the Biden administration in 2021. While Mitch McConnell opposed what he called a "blue-state bailout," his only plan was a liability shield for employers to avoid liability from their employees who got sick or died from Covid, an absolutely insane response that would've done nothing for the economy except impoverish workers at the hands of their employers. No deal could be reached under the Trump administration, but then Democrats passed several appropriations in Biden's first months. The Fed made the momentous decision at the beginning of 2021 to allow the economy to "run hot," letting the rate of inflation rise. Democrats passed under Biden the $1.9 trillion American Rescue Plan, the $1.8 trillion American Families Plan, and a $2.3 trillion infrastructure program (although this was spread out over ten years). We are now living in the resultingly hot and inflated economy where inflation has reached 8% and presents new challenges...

Conclusion

    The pandemic exposed the weaknesses and strengths of the world's major powers like few events can. In the United States, we were exposed for our absolutely deadlocked Congress for most of the pandemic and our profound political divisions that threaten to tear the country apart- first over the summer of 2020 and then on January 6, 2021. Our system cannot work when Republicans have legislative power anymore since they can't bring themselves to support any government action unless there is a Republican president. On the other hand, the pandemic showed the strength of our central bankers to respond in times of crisis to save the economy. This year and next year we will find out how well Jerome Powell can control inflation.

    Tooze seems overly bullish on China in this book, partially because of it being written before China reinstituted its zero-Covid policy. He says that China is "walking a tightrope without end," but that "it was in China that 2020 brought a moment of profound national crisis. It was in the United States." I think that it obviously true, but I think it is worth noting that the crisis came to the USA in an election year, and that our system encourages full display of our divisions, where China's system crushes all dissent. I wonder what Tooze would say about China and America's responses compared to each other today.

    I came away from this book more optimistic for Europe, as it seems like the Germans have begun to enter the 21st century with regards to the European Central Bank. Europe continues to centralize and unite, which could be a powerful force in the future. Tooze wrote the book before Russia invaded Ukraine, which has further united Europe. That said, the response in Europe was not as strong as the United States, although Europe avoided much of the political chaos that we had. In the end, it is nothing short of amazing how the entire world was able to pull itself out of the chaos of February, March, and April of 2020, but then profoundly disappointing how things continued after that point.

Miscellaneous Facts:

  • The oil market is larger than all other commodity markets put together at 35 billion barrels annually.
  • In 2019, global GDP was calculated at $87.55 trillion, but had dropped 20% by April 10, 2020.
  • 75% of market-making in US Treasuries is done by algorithmic trading, one of the most sophisticated markets in the world.
  • When people got US stimulus checks, many of them started investing in the stock market. For those earning $35,000 to $75,000, trading increased by 90%, and for those earning $100-150,000, trading increased by 80%.
  • Thanks to Chinese demand for Peruvian copper helped the Peruvian GDP quadruple from 2000 to now.
  • During the pandemic, Xi Jinping declared that China would aim to peak its CO2 emissions in 2030 and be carbon neutral by 2060, which South Korea and Japan pledging Carbon neutrality by 2050 a few weeks later. 
  • In purchasing-power parity terms, China's economy became bigger than the US's in 2013. In overall dollar terms, China was not expected to surpass the US until the mid-2030s, but by the end of 2020 China was expected to pass the US in 2028 or 2029. I am not sure if this will be revised because of the zero-covid strategy, but Tooze says that by the 2030s, China's economy would be larger than that of Japan and the United States put together.
  • While in 2008, fossil fuel corporations made up 16% of the S&P 500, in 2020, they were just 2.5%.
  • In 2000, George W. Bush won 2,417 counties that generated 45% of US GDP, while Al Gore won 666 mainly urban counties that generated the other 55%. In 2020, the disparity was much more dramatic, as Biden won just 509 counties with 60% of the population and 71% of economic output while Trump won 2,547 counties.