MCViewPoint

Opinion from a Libertarian ViewPoint

Posts Tagged ‘Austro-libertarians’

Decentralization and the Rise of the West: The European Miracle Revisited

Posted by M. C. on April 27, 2022

The Amsterdam magistrate, in contrast, chose to treat all merchants, local or foreign, equally. Relatively speaking, the Dutch Republic was a beacon of political, economic, and religious freedom in the seventeenth century, and Holland in particular experienced an economic boom in the Dutch Golden Age. 

https://mises.org/wire/decentralization-and-rise-west-european-miracle-revisited

Bas Spliet

Decentralization has long been at the forefront of the minds of Austro-libertarians. Hans-Hermann Hoppe, for instance, appeared on Austrian television this month sharing his dream of a Europe “which consists of 1,000 Liechtensteins.”

Although principally based on economic reasoning, this policy agenda emerged at least in part out of a celebration of the historiography on the “European miracle,” which posits that the West grew rich because of the existence of thousands of competing political entities of differing size and form in premodern Europe. Since Ralph Raico summarized this historiography thirty years ago, the “European miracle” school of thought has moved forward with varying degrees of success.

The European Miracle

Back in 1994, Ralph Raico wrote an essay on the then emerging “European miracle” school of thought in economic history. The scholars in this school, Raico argued, had at long last repudiated the “historical materialism” of the Marxists. Unlike Karl Marx and his followers, they insisted that technological change and economic growth were the result of certain legal, political, and ideological institutions—or the “superstructure,” in Marxist terms—rather than the other way around.

Institutions such as property rights, restraint in taxation, and liberalism, in turn, arose out of the political anarchy of medieval Europe. Although culturally homogenous and economically integrated, Europe for centuries remained a patchwork of different kingdoms, principalities, city-states, and ecclesiastical polities. This meant that the ever-growing middle classes of merchants, artisans, and shopkeepers could take their business elsewhere if the rulers usurped too much of their productive wealth. As a result, the political authorities competed with each other to develop an atmosphere conducive to economic freedom. As Eric Jones put it in The European Miracle, which Raico named his article after:

Political decentralization and competition did abridge the worst arbitrariness of European princes. There were many exceptions, but gradually they became just that, exceptions. Meanwhile, freedom of movement among the nation-states offered opportunities for “best practices” to diffuse in many spheres, not least the economic…. The number of states never shrank to one, to a single dominant empire, despite the ambitions of Charlemagne, the Hapsburg Charles V or Napoleon. Within many states a long process in the history of economic thought conditioned rulers to listen to academics and other wise men. Writers of the seventeenth and eighteenth centuries in central and western Europe dared to offer advice about how to rule, some of which was taken.

Political competition ultimately is what set the West apart from the rest. Asia’s Charlemagnes, Charles Vs, and Napoleons were successful in monopolizing political power, allowing them to establish command economies.

The Nation-State

Raico’s article appeared in a volume called The Collapse of Development Planning, edited by Peter J. Boettke. The implosion of the Soviet Union undoubtedly made Raico optimistic that the influence of left-wing ideologies in the field of economic history would collapse, too. Yet the institutional approach has not come to dominate the field. The idea that the rise of the West is principally the result of the exploitation of labor still holds a lot of support in academia.1 Historical narratives that explain the Industrial Revolution through out-of-the-blue technological progress or coincidental geographical factors abound as well. Moreover, historians have tried to prove the efficiency of premodern antimarket institutions, such as craft guilds and serfdom.

Finally, the nation-state is still allocated a decisive role in the economic rise of the West. In his Global Economic History: A Very Short Introduction, for instance, Robert C. Allen celebrates the “standard model” for economic development spearheaded by nineteenth-century European nation-states and the US government. Influenced by Friedrich List and Alexander Hamilton, the four allegedly “successful” state policies, according to Allen, were investments in transportation and mass education, central banking, and tariffs.

Still, few historians would deny that political competition played a vital role in the European miracle. Niall Ferguson, for instance, included competition as the first of several “killer apps of Western power” in his popular 2011 book Civilization: The Six Killer Apps of Western Power. The problem is that since most historians are not libertarians, they do not a priori exclude the possibility that the nation-state can create wealth. Therefore, when government intervention and economic growth go hand in hand, even the institutionalists tend to conclude that the state somehow played a contributing role.

See the rest here

Be seeing you

Posted in Uncategorized | Tagged: , , , | Leave a Comment »

Private Defense in the History of Genoa | Mises Wire

Posted by M. C. on July 6, 2020

In conclusion, I have briefly illustrated the peculiar resilience of a republic with a weak, premodern state, and the fascinating fact that the availability of private arms and private wealth rendered a conquest of this republic by a foreign power always difficult—its pacification and annexation almost a mirage.

https://mises.org/wire/private-defense-history-genoa?utm_source=Mises+Institute+Subscriptions&utm_campaign=49783bb324-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-49783bb324-228343965

The city of Genoa is often excluded from histories of medieval and Renaissance republicanism. Similarly, Genoa is also absent from discussions on the rise of territorial states in northern Italy. This exclusion can be explained in various ways. To be sure, the Genoese have demonstrated a lack of interest in writing political philosophy and in intellectualizing their civic values. But, more importantly, Genoa represents an unwelcome contradiction for all the comprehensive theses proposed by scholars to describe the “progress” from medieval chaos to modern state building and statecraft. In other words, because statist historians do not know how to tackle Genoa, they very often ignore it. In this article, I will not give a complete account of the history of Genoa—its rise as a maritime community in response to Islamic raids, its sophisticated constitutional history, and its countless commercial colonies and business networks scattered across the Mediterranean world and beyond.1 I do not have the space to accomplish all this.

Rather, my aim here is to focus on a particular aspect of Genoese history, namely, military organization and defense. I shall not flesh out a systematic theory of private defense, its practical feasibility and its moral superiority to various forms of warfare state and to the state monopoly of violence, because I would not be qualified to attempt such an endeavor, and anyway Hans-Hermann Hoppe, Bob Murphy, and Walter Block (among others) have already articulated such a theory.2 Instead, I will simply offer some examples of historical episodes surrounding private wealth and private arms in Genoa that do not fit current historical narratives about the rise of the modern, militarized and territorial state. I include private wealth in this discussion, because, as we shall see, private wealth was strictly linked to the ability to raise private armies, build private fleets, and develop financial/diplomatic ties akin to insurance.

In a sense, what I wish to do is simply wonder. Does the history of Genoa—and in this instance, specifically, its tradition of private defense—fit into modernist, teleological narratives about state formation? Does it exemplify, or even simply imperfectly sketch, an alternative to state-run monopolies of violence—an alternative that is more respectful of property rights and less conducive to wasteful aggression? This subject is relevant for Austro-libertarians, because if we wish to question the legitimacy of the modern state, we have to explore examples from history that show how all government “services” have at some point been offered in alternative, effective ways by private actors or privatized “governments.”

Private Wealth

The Italian Wars were a long and tragic series of conflicts starting in 1494 and fought mainly across the Italian Peninsula. They had a multiplicity of objectives, among which were the control of cities such as Milan and Naples but also the leadership of Christendom in the difficult fight against Ottoman Islam. To make a long story short, the main contestants were France—a kingdom that since the end of the Hundred Years’ War had become one of the most militarized on the entire continent—and Spain—whose Habsburg rulers held a transnational collection of crowns and titles including of the Holy Roman Empire. This conflict between regional powers kickstarted or hastened the demise of medieval communes and local self-government in Italy, because small states could not survive in the brave new world of large standing and mercenary armies raised by foreign princes. To survive, independent Italian states had to come to their senses and modernize, tax away, and build efficient bureaucracies. This, in a nutshell, is the story we are told. A triumph of Machiavellian determinism.

And yet it is interesting to consider what happened in the late 1530s, when the French king Francis I sent a request to the Genoese doge (the traditional title for the head of government in Genoa). The request was very straightforward: Francis I knew that Genoese funds were being used by his Habsburg rival, Charles V, to finance military campaigns, and because Genoese merchants were at that time trying to mend the relations between their city and France in order to continue to access the French markets, Francis demanded as a sign of goodwill that the doge order some public funds to be lent to his court as well, not just to the Habsburg Spanish one. The reply that the French king received from Genoa shows the intellectual and ideological gap separating this Italian republic from its increasingly “modern” neighbors. The doge and the Genoese government, baffled by the French request, explained how in Genoa the state owned almost nothing and its funds were very limited. The doge went on to explain to the French court that yes, it was true that the Spanish monarch had received money from Genoa, but he had done so by dealing on the capital market and borrowing money from private Genoese citizens, aristocratic families, and professional moneylenders. If the French king needed funds, he was very welcome to do the same.

Was the doge bluffing? No. He was not. Since the fourteenth century, Genoa’s constitutional order had embodied a medieval conception of freedom that favored the dispersion of power and limited public expenditures. And from the fifteenth century, the creation of the Bank of St. George had represented yet another obstacle to the centralization of power and state formation. St. George was not merely a bank, but rather a spontaneous, crossclass organization of creditors who effectively privatized tax farming and took over the administration of the colonies in the Levant: very often the members of the assembly of St. George were the same businessmen who had invested in trade across the Mediterranean. They were skeptical toward the idea of empowering a specific doge or the communal government with a standing army or a navy—yet they were ready to put together funds necessary to ensure the survival of their colonies and the rule of law. As a result of these institutional changes (which I can only mention here), sixteenth-century Genoa was still a medieval polity, with a series of overlapping jurisdictions, and a city of private family wealth and power—what George Gorse has aptly described as the “antithesis of Venice.”3

Private Arms

Read the rest of this entry »

Posted in Uncategorized | Tagged: , , , , , | Leave a Comment »