For Christmas, I recovered my burnt copies of Niall Ferguson's history of the Rothschild family. I had previously read the first book, The House of Rothschild: Money's Prophets, 1798-1848 prior to writing book notes on makeoutcity.com. (These books fit into Ferguson's scholarly work, rather than his more political tracts, Empire and Colossus.)#

The second book, The House of Rothschild: The World's Banker, 1849-1998 picks up where the last left off and covers the apex of Rothschild influence and their slow decline in the twentieth century. For a brief introduction to the Rothschilds, I recommend the Wikipedia page.#

Quick note: As the sections indicate, by this time many of the first-generation had passed. Specifically Nathan, the former "king of the Kings of the Jews," passing the crown to James in France. Early on there was beginning to be some problems between the various houses. Frankfurt was technically the master of Vienna and Naples, and was on slightly poor relations with London and Paris due to Amschel's identification with the government more than his family in some regards. The various branches of the family tried to keep together by inter-marriage, but slowly the became separated and more nationalistic.

I - Uncles and Nephews#

One - Charlotte's Dream (1849-1858)#

This chapter mostly covers the Jewish Emancipation in Britain and the Rothschild's role in that affair, with particular emphasis on Lionel becoming an MP, although not the first Jewish MP. Lionel was offered a baronetcy, but the Rothschilds would hold out for a peerage, a matter that an interesting quip came from:#

While others wasted no time in entering the breach made by Salomons--among them his brother Mayer, who became High Sheriff of Buckinhamshire in February--Lionel did nothing. Even when he himself was offered a baronetcy by the new Prime Minister, Lord John Russell, he stubbornly refused to accept it--to the dismay of his relatives. His stated reasons for doing so suggest that Lionel had a trait of petulance: he was reluctant to accept an honour which had already been bestowed on two other Jews, and would be content with nothing less than a peerage. Prince Albert reported him as saying: "[Y]ou have nothing higher to offer me?" This was bluntness worth of his father, but his mother Hannah was incensed... [p. 25]

Two - The Era of Mobility (1849-1858)#

This chapter is so named because of the Crédit Mobilier, a new French joint-stock bank created in competition with the Rothschilds. Although, many such banks were created and could all offer competition throughout Europe. As the chapter explains, although the competition was initially serious, the Rothschilds learned and dealt with it through various means, such as creating their own joint-stocks, such as the Austrian Creditanstalt.#

The conflicts with the Mobilier in France led to some great humour from James, the first generation son, whose sarcasm was renowned:

James [..] commissioned Feydeau to undertake a speculation on his behalf--in the form of a purchase of a thousand Crédit Mobilier shares. He did this no fewer than fives times [...] [James explained:]

Vat do you mean, my young friend? ... I do not mock you at all. Listen: I haf the greatest possible confitence in the chenius of Messrs Pereire. They are the greatest financiers on this earth. I am a family man, and I am happy to infest a part of my little fortune in their affairs. I only regret one thing, and that is that I cannot entrust all off my capital to such clefer men. [p. 58]

Many people in France preferred the idea of the Crédit Mobilier because of the greater involvement of the "people" rather than just haute finance, but although they did not disappear, they did not overrun the Rothschilds as the summary explains:

By the end of 1858, then, the challenge posed to the Rothschilds' position not only within France, but right across the European continent, had been quashed. This had largely been possible because, while the Pereires' [founders of Crédit Mobilier] resources remained fundamentally Parisian, the Rothschilds were an authentic multinational, with a business empire which expanded during the 1850s as far afield as the new goldfields of California and Australia. The Rothschilds' superior resources made it possible for them to reimpose their dominance over European public finance in the period of the Crimean War. At the same time, their alliance with the Banque de France ensured that when the downturn came in 1856-7, the convertibility of the currency was maintained and reforms which might have eased the Pereires' overstretched position were rejected. [...] The increasing complexity of the Rothschild business empire makes it harder to consider it as a single, integrated entity after this period, though there is no question that James himself considered it still to be one. Before 1859 the Rothschilds had been fortunate in one signal respect: they had lent to the winning side in the Crimean War, not to the loser. The real test would come in the period 1859-70, when they would find themselves repeatedly on both sides of decisive conflicts which were to recast the map of Europe. [p. 89]

Three - Nationalism and the Multinational (1859-1863)#

This chapter deals with the conflicts of interest within the Rothschild system when their home countries (Britain, France, Austria, Germany, and Italy) were at war and in general competition.#

In the beginning of the chapter is priceless bit of James' humour:

[Count Camillo Bense di Cavour, the first Prime Minister of the newly unified Italy] came to Paris [...]. "So, M. le baron," he was heard to ask James, "is it true that the bourse would rise by two francs the day I resign as Prime Minister?" "Oh, monsieur le comte," replied James, "you underestimate yourself!" [p. 91]

James was an interesting character and Ferguson relates his view of States:

He preferred to think of states as businesses--not such an unreasonable elision considering how many Italian politicians (Cavour and Bastogi, for example) had banking backgrounds. Thus where historians (following contemporary intellectuals) have seen nation-building, James saw merges and demergers, and this illuminates his response to Austria's predicament after 1859. Piedmont's hostile takeover of Italy made sense and had succeeded; Austria was financially weak in the wake of defeat as before; therefore she should sell her rights over Venetia or Holstein to the poweres which could afford them--Italy and Prussia. It faintly puzzled him that the Austrian Emperor preferred to suffer further military defeats rather than to commercialise Habsburg decline in this fashion. After all, it made no difference to James whether Venetia was governed from Vienna or Turin or Florence; he continued to think of the map of Europe in terms of railways rather than borders. [p. 100]

Finally, I'll close with some more of James:

"At the bourse, there comes a time when, if you want to succeed, you have to speak Hebrew."; "You ask, do I know what causes the bourse to rise and fall? If I knew that I would be a rich man!" [...] But, his most famous jokes [...] subtly mocked the Emperor. "L'Empire, c'est la baisse" defies translation: literally "the Empire means a falling market," this pun on Napoleon's famous claim that the Empire meant "la paix" was to prove a damning epitaph for Napolean's regime. [p. 110]

Four - Blood and Silver (1863-1867)#

This chapter explains the various ways that the Rothschild successfully and unsuccessfully influenced European politics during this time. Their lack of effect in Prussia was to be recurring problem as we shall see.#

Five - Bonds and Iron (1867-1870)#

This chapter primarily concerns the leading up to the Franco-Prussian war and the death of James.#

The obituary of James is interesting:

James's death marked the end of an era in more ways than one. He was the last of the generation which had been born in the Frankfurt Judengasse. Having inherited the mantle of his brother, Nathan in 1837, he had helped steer the family firm through the worst storm in its history in 1848. While conceding greater autonomy to the London house, he had largely checked the centrifugal forces generated by conflicts of temperament and interest within the family. He had transformed the Paris house, adding to its original accepting and issuing functions a new role as an industrial investment bank with its own railway "empire." In 1815 the capital of the Paris house he founded bad been £55,000; by 1852 the figure was £3,541,700 and just ten years after his death £16,914,000. What made this achievement so remarkable was that fact that James had managed to withstand not only periodic financial crises, but also a succession of severe political crises: 1830, 1848, and 1852. And he had exerted for nearly four decades a unique influence over French foreign policy and European international relations in general. [p. 156]

II - Cousins#

Six - Reich, Republic, Rentes (1870-1873)#

The Franco-Prussian war was bad news for the Rothschilds, although Ferguson makes the case that they handled it remarkably well. If you have the book, I particularly found the discussion on pages 204 and 205 on the comparison between the Third Republic and the Weimar Republic to be very interesting, although it is too long to quote in detail. The crux of the matter is that while they seem analogous, there were important differences that made the reparations imposed on France possible (and profitable for the Rothschilds,) while not possible for Germany (Ferguson says he agrees with Keynes on this matter, but I don't know his argument.)#

Seven - "The Caucasian Royal Family"#

This chapter opens with a quote from Sir Charles Dilke, "I could see how strangely like a Royal family the Rothschilds are in one respect--namely, that they all quarrel with one another; but are united as against the world." (p. 221) And continues to elaborate on how the third generation of Rothschilds became even more integrated into the social elite and acted as a royal family in many respects (although they were known for a long time as the "Kings of the Jews.")#

Also in the chapter is a detailed discussion of the third generation and the way that the family business was suffering from the policy of family control. The story of Salomon James is special, but a bit typical:#

It was James's younger sons who struggled. The Goncourts observed in 1862 how imperiously Salomon James (b. 1835) was treated by his father. After losing a million francs at the bourse, he:

received this letter from the father of millions: "Mr. Salomon Rothschild will go to spend the night at Ferrières, where he will receive instructions which concern him." The next day, he received the order to leave for Frankfurt. Two years passed in the counting house there; he believed his penance was over; he wrote to his father who replied: "Mr Salomon's business is not yet finished." And a new order sent him to spend a couple of years in the United States.

This was a caricature but one based on reality, as a letter from James to his elder sons in August 1861 indicates. Offering his sons 100,000 francs apiece of new Piedmontese bonds, he explicitly ordered that Salomon should have "nothing to do with realising them and should give the matter no thought at all, as I wish to avoid at any price giving him an opportunity to speak with brokers or coming once again into contact with the open market... I do not want to allow ideas of speculation to enter his head again." He was never admitted into the partnership as an associé.

Eight - Jewish Questions#

Throughout their history, the Rothschilds were involved to varying extents in the wider Jewish community. Earlier, the five original brothers dealt with some persecution in Damascus, and later the London family fought for more political rights for Jews. But, throughout the time many smaller things were done and many influences were attempted to make the lives of persecuted co-religionists better. This chapter deals with some of those issues, from the schools and hospitals created by the ladies of the House; to the political influence exerted in trying to help Jews in Eastern Europe and Russia; to the lack of hard support for Zionism, due to their assimilationist attitude.#

Nine - "On the Side of Imperialism" (1874-1885)#

This chapter focuses mainly on the interaction between the London and Paris houses over the growing English control of Egypt and how the Rothschild had been important players in this matter, as financiers and political figures (as more had since become MPs in London.)#

Ten - Party Politics#

Natty, son of Lionel, son of Nathaniel, the eldest son of the London family, had followed his father's footsteps to become an MP and eventually also became an English peer. Initially, they were associated with the Liberals who backed the Jewish emancipation, but this chapter describes how Natty and the others became more and more associated with the Conservatives and the strong defense, imperialist wing of that party.#

The chapter also discusses the French family a bit and contains an interesting quote from Alphonse (James' eldest son) on laissez-faire:#

I have never understood what is meant by "haute banque." What does it mean the "haute banque"? There are richer men and poorer men and that's all there is to it! Some are richer today and will be poorer tomorrow... Everyone is subject to such variations--everyone without exception! And no one can boast of being able to escape them. As for these agglomerations of capital, it is money which circulates ... [and] bears fruit. It's the wealth of nations! If you frighten it away, or threaten it, it will disappear. And, on that day, all will be lost. That will be the end of the prosperity of the country. Capital is labor! Apart from some unfortunate exceptions ... each man ... has that share of the available capital that his intelligence, energy, and industry merit. [p. 338]

Ferguson notes that this is particular evidence of the Rothschilds' extreme "social and political isolation [...] as the new century approached." Keep this quote in mind when I later quote the 3rd Lord Rothschild.

Eleven - The Risks and Returns of Empire (1885-1902)#

Among this discussion of the extent of colonial finance the Rothschilds were involved in is an explanation of their association with de Beers. Often when people would like to sully the name of the Rothschilds, they exploit this connection, so the less glamorous story is good for breaking the myth of Rothschild support for the atrocities of Cecil Rhodes.#

A side note for those not in the know. Cecil Rhodes was the governor of South Africa and the initial director of de Beers, although never a majority shareholder. He later founded Rhodesia, after admiring King Leopold II's project in the Congo. In his will, whose executors were Lord Rothschild and someone else, he created the Rhodes Scholarship, which he described as "[T]ake the Jesuit's Constitution if obtainable and insert English Empire for Roman Catholic Religion."

Twelve - Finances and Alliances (1885-1906)
& Thirteen - The Military-Financial Complex (1906-1914)#

These chapter go together in their general tone. They tell the story of the slow decline of the previously held monopoly on public finance by the Rothschilds, and secondly, the way that the finance world influenced the alliances between the European nations. These and other interactions provide the story of the follow-up to World War I.#

Ferguson notes that Austria-Hungary and Germany were able to only deal with each other in their public financing, while other nations that may have culturally preferred alliance with them, were tied to their eventually allies through financial links.

III - Descendents#

Fourteen - Deluges (1915-1945)#

At this point the chapters begin to cover less as the time span and the number of Rothschilds are increased. This chapter deals primarily with what the Rothschilds were doing in World War I--some were fighting and Lord Rothschild was helping to advise the government; what they were doing in the inter-war time--dealing with the financial losses from the first war and trying to maintain financial security; and, what their experience was in World War II. The Rothschilds were very unlucky when Hitler came to power and it is amazing how much of their property was confiscated by his and other puppet governments or by Hitler personally. Furthermore, the institutions (schools, hospitals, etc) that they founded in Germany were "Aryanised" and all reference to the Rothschilds was erased. Reading this account is very upsetting, as any account of Naziism is due to be.#

At the end of the chapter, Ferguson writes:

Two members of the family died as a consequence of the Nazi policy of genocide. The aunt to whom Victor referred in his speech in the Lords in 1946 was his mother's eldest sister Aranka, who perished in Buchenwald. The other victim was Philippe's estranged wife Lili. "Why should the Germans harm me?" she had asked him in 1940. "I am from an old French Catholic family." Despite reverting to her original title, the comtesse de Chambure, she was arrested by the Gestapo in July 1944 and sent by the last transport to Ravensbrück where, her husband was later told, she was brutally murdered. It is thus the blackest of ironies that the only person named Rothschild killed by the Nazis was not a Jew and had disowned the family name. [p. 478]

Epilogue#

This final chapter is not scholarly and deals with the family after World War II. They have recovered much of their wealth and although are no longer the biggest bank, nor do they have the influence they once did, they are by no means no longer a contender. The Rothschild pyramid of companies (Ferguson has a complicated description of a large number of companies) is still controlled by the family and is one of the largest private banks.#

In the discussion of the post-war Rothschilds, there is this quote from the 3rd Lord Rothschild, who was a Labour party supporter:#

I do not believe that people should be allowed to have a lot of money unless they have earned it; being the son of a rich man is not a good enough reason ... We have come to associate Conservative rule with the following conditions: unemployment, under-nourishment, unpreparedness, unpopularity abroad, unequal ... education and opportunities, undeveloped resources and lack of opposition to Fascism ... The only time when some of these wrongs were put right was during the war when conditions and the Labour members of the Cabinet forced the State Control of basic industries and commodities on the Government .. The war showed up the stupidity of the old Tory idea that people will only work for private gain and therefore that private enterprise is more efficient than state enterprise ... The old days of unrestrained private enterprise for private profit are, I hope, gone forever ... Having a lot of money does not automatically mean one is happy ... The fact that under a Socialist Government the rich will not have so much money and advantages which they have not earned may be inconvenient to the rich; but this is unimportant, and I think that you will find that many rich people ... will not be unduly worried about this prospect. [p. 481]

(Thankfully, his son Jacob is not of the same mindset.)

Colossus: The Price of America's Empire is the "sequel" to Niall Ferguson's Empire.#

Like Empire there is already a large amount of commentary about Ferguson's ideas on the Internet and in the press. It is a popular book and a pressing topic right now. In this summary, I will focus on what I found particular interesting and my own opinions of American Empire.#

An initial note, this book is packed with footnotes, unlike Empire. And in many cases there are whole strings of paragraphs and sections taken directly from Empire or other books (The Cash Nexus) and articles by Ferguson I have read. They aren't out of place, but I find this to be interesting.#

Introduction#

All told, there have been no more than seventy empires in history. If the Times Atlas of World History is to be believed, the American is, by my count, the sixty-eighth. (Communist China is the sixty-ninth; some would claim that the European Union is the seventieth.) How different is the American empire from previous empires? Like the ancient Egyptian, it erects towering edifices in its heartland, though these house the living rather than the dead. Like the Athenian Empire, it has proved itself adept at leading alliances against a rival power. Like the empire of Alexander, it has a staggering geographical range. Like the Chinese Empire that arose in the Ch'in era and reached its zenith under the Ming dynasty, it has united the lands and peoples of a vast territory and forged them into a true nation-state. Like the Roman Empire, it has a system of citizenship that is remarkably open: Purple Hearts and U.S. citizenship were conferred simultaneously on a number of soldiers serving in Iraq last year, just as service in the legions was once a route to becoming a civis romanus. Indeed, with the classical architecture of its capital and the republican structure of its constitution, the United States is perhaps more like a "new Rome" than any previous empire--albeit a Rome in which the Senate has thus far retained its grip on would-be emperors. [Ferguson later says that Rome was over 400 years old when Caesar crossed the Rubicon and America is much younger so it is "too early to tell."]

[...]

To those who would still insist on American "exceptionalism," the historian of empires can only retort: as exceptional as all the other sixty-nine empires. [p. 14-15]

Part I - Rise#

1. The Limits of the American Empire#

One of the ways that Ferguson claims America has always been an empire is the way it has conquered almost the entirety of North America from just the east coast. This was colonial expansion. One of the flaws Ferguson sees in America's Empire is that it could not take this success overseas or further north or south, and refused to when it had a supreme chance. (Mexico in the early 1900s.)

2. The Imperialism of Anti-Imperialism#

In this chapter, as with the last, Ferguson writes about why the Americans are not very good at empire. He resolution is that they have incredibly short time horizons with which they like to see results and they have very low tolerances of casualties; these being so low that they cause confusion with veterans of the British Empire.

He remarks that these can partly be explained by the American "creation myth" about defeating an empire, and with the incredibly short cycles of politics, as discussed in much of Democracy in America by de Tocqueville.

3. The Civilization of Clashes#

This chapter deals in part with terrorism and in particular the attacks of September 2001, an event that Ferguson says "history failed to turn around." (p. 107)

The U.S. economy weathered this blow more easily than many feared at the time. Viewed in strictly economic terms, the attacks of September 11 were comparable with a very severe natural disaster: expensive but affordable, and of much less significance than the deflation of the stock market bubble that had begun a year and half earlier. Compared with the damage that might have been inflicted by the Soviet Union in the event that the cold war had turned hot, they were indeed trivial. Simply because World War III did not happen should not lead us to draw the wrong conclusion that al Qa'eda is more dangerous to the United States than was Soviet communism. [p. 126-127]

Other parts of this chapter are about how "the geographical focus of the American empire shifted repeatedly during the twentieth century."

At the beginning of the century it had been a hemispheric empire, reaching eastward into the Caribbean, southward into Central America and westward into the Pacific. In the middle of the century it had reluctantly been forced to extend its reach to Europe, and for much of the cold war, the security of Western Europe seemed to matter more than Asia or, indeed, the Caribbean. Gradually, however, the Middle East came to be the hub around which American strategy turned: because of Israel, because of oil, because of terrorism. [p. 131]

4. Splendid Multilateralism#

This chapter focuses on the United Nations and points out that the United Nations is completely dependent on the United States and "When it does legitimize American policy, it is positively useful. When it does not, on the other hand, it is no more than an irritant." (p. 135) "How many divisions has he?" comes to mind.

Part II - Fall?#

5. The Case for Liberal Empire#

Ferguson revisits much of the discussion of Empire and makes his case for why a 'liberal' empire that promotes free trade, free people and free institutions is a good thing. The primary difference in breadth from Empire is the explanation of how the world is much less "globalized" than it was during the reign of the British Empire because of massive amounts of tariffs and restrictions of trade and people in the world today. This could be cured by a willing America, he supposes.

6. Going Home or Organizing Hypocrisy#

Yet another reason what Americans what poor imperialists--unlike the British, they really mean it when they say they want to run elections and go home and not be involved in "overseas adventures." A major problem with this is that there is little incentive to change your ways as a terrorist or collaborate with the Americans if you know that they will be leaving you alone shortly.

This brings us to a critical point. It is simply that the time frame is the key to successful nation building. It is no coincidence that the countries where American military intervention has been most successful have been those in which the United States has maintained a prolonged military presence. As we have seen, President Bush is fond of citing Japan and West Germany after 1945 as examples of what successful American intervention can achieve. "America has made and kept this kind of commitment before,m" he argued in February 2003, drawing an implicit parallel with 1945. "After defeating enemies we did not leave behind occupying armies, we left constitutions and parliaments." This overlooks the awkward fact that the formal occupation regimes lasted seven years in the Japanese case and ten in the West German, and that--even to this day--the deployments of American troops in those two countries remain among the largrerst anywhere in the world. [p. 216]

7. "Impire": Europe Between Brussels and Byzantium#

This chapter focuses on the European Union and looks at both sides of the debate over whether it can become a counter-weight against the American Empire, and Ferguson concludes that it cannot.

Europe's, in short, is a curious kind of union, a confederation that fantasizes about being a federation without ever quite become one. It has an executive, a legislature, an upper house, a supreme court, a central bank, a common currency, a flag and an anthem. But it has only a tiny common budget and the barest bones of a common army. Many more decisions than its architects intended are still taken by the national governments at meetings of the Council of Europe or at intergovernmental conferences. The EU lacks a common language, a common postal system, a common soccer team, even a standardized electric socket. To some critics--perhaps most famously the late Conservative cabinet minister Nicholas Ridley--it threatens to become a "Fourth Reich," not only dominated by Germany, but German in its institutional structure. To others--notably the Oxford professor of politics Larry Siedentop--it is the French who really run the union in the style of their own less than accountable bureaucracy, preventing its evolution into an American-style United States. Siedentop's EU is more like a third Bonapartist empire than a Fourth German Riech. [p. 254-255]

8. The Closing Door#

This chapters talks about some of the future problems for America, both domestically and as an empire. It is here where the article Going Critical: American Power and the Consequences of Financial Overstretch occurs.

Conclusion: Looking Homeward#

Three deficits of the American Empire:

• Economic Deficit, represented by its power foreign investment and internal financial problems.
• Manpower Deficit, represented by the quantity of military personnel and the propensity of Americans to preference to run Wall Street firms over colonies and governments.
• And, Attention Deficit, represented by the lack of will on the part of Americans to follow through with plans and occupations and the tendency to get jittery after even the slightest loss of life. Americans are simply unwilling to die and unwilling to commit to long-term plans.

A funny comparison in this chapter is between Arnold Swartzenegger as the Terminator and the United States.

In three distinct ways the Terminator is a perfect, if uniwitting, metaphor of American power. Though he has the body of man half his age, Schwarzenegger himself is in fact just four years short of his sixtieth birthday. His determination to remain forever Mr. Universe typifies the determination of an entire generation never to grow old, though grow old they must--with significant economic consequences. The Terminator is also a very American hero for the simple reason that there is only one of him. In this he personifies the chronic manpower shortage that current constraints American nation building. Above all, the Terminator exemplifies the limits of American power because the word ABORT starts flashing in his head before he has completed his mission. Outwardly, Arnold Swartzenegger is without question a colossus; it is hard to imagine the male body looking any bigger and stronger. He is to the human frame what the United States is to the capitalist economy. Yet his character embodies the three key deficits that explain why American only looks immensely strong with actually being immensely strong. [p. 289-290]

[...]

And this brings us to the final respect in which the United States resembles Arnold Schwarzenegger's Terminator. In military confrontations, the United States has the capability to inflict amazing and appalling destruction, while sustaining only minimal damage to itself. There is no regime it could not terminate if it wanted to--including North Korea's. Such a war might leave South Korea in ruins, of course, but the American Terminator would emerge from the rubble more or less unscathed. What the Terminator is not programmed to do, however, is to rebuild. In his wake he leaves only destruction. [p. 299]

My thoughts on American Empire...#

It seems to me that practically there exists a choice between allowing a rival power, however large or small, to conquer an area and destroy your interests there and not allowing this. While theoretically free capitalism and freedom are inevitable because of the unending devotion of men to them, even unconsciously, there is a decided benefit in having those benefits now, rather than later, if the cost of acquiring is less than the gain. For this reason, individuals may have an interest in the political and economic system in another part of the world being capitalistic.#

Would such a imperial mission be moral? It depends. To re-quote Ayn Rand's essay "Collectivist 'Rights'" from The Virtue of Selfishness, as quoted originally by Chip Gibbons:#

"Dictatorship nations are outlaws. Any free nation had the right to invade Nazi Germany and, today, has the right to invade Soviet Russia, Cuba or any other slave pen. Whether a free nation chooses to do so or not is a matter of its own self-interest, not of respect for the non-existent 'rights' of gang rulers. It is not a free nation's duty to liberate other nations at the price of self-sacrifice, but a free nation has the right to do it, when and if it so chooses.

This right, however, is conditional. Just as the suppression of crimes does not give a policeman the right to engage in criminal activities, so the invasion and destruction of a dictatorship does not give the invader the right to establish another variant of a slave society in the conquered nation. [pg. 104]

Thus if individuals in a free nation choose to hire mercenaries (or volunteer themselves) to invade and liberate a country, and then truly establish a free nation, then they are morally justified in doing so. This is because at home, they are not reducing freedom through taxation and coercion to fight; and overseas, they are actually creating the institutions of freedom. (Whether as a minarchist monopoly or private institutions.)#

Thus, self-interest may encourage the desire to trade with a people for goods and services. This may be prevented by the lack of freedom for said people. Which may be rectified by a liberation. Which may be morally justified it does not reduce freedom at home and if it actually establishes freedom abroad.#

By this argument I can recognize a case of liberal empire. How does this apply to America?#

America is not free, and you can be sure that an imperial mission would be support by taxation, would potentially involve conscription, would generally only initially benefit the government tag-along companies that received monopolies, and would involve a large amount of subjugation of the local peoples in the short-run. But, if we recognize the benefits of free trade in the long-run, then so should we in this instance. For this reason, Ferguson's study of the long-run results of British Empire represent that while it does not reason libertarian perfection, liberal empire can produce some of the best approximations: the United States (some what,) Canada, Australia, New Zealand, and the United Kingdom itself.#

With this thought, I think that in the practical, possible situations of the modern era, American Empire could be a good if:#

• Domestic problems are solved--the clay feet of Social Security and Medicare.
• Free trade is truly embraced, rather than bilateral agreements, subsidies, and tariffs passed out however the pork falls.
• Americans see the benefits of the above and the benefits of a more productive global market, and use this foresight to justify to themselves liberal empire.

Empire: The Rise and Demise of the British World Order and the Lessons for Global Power is the book that serves Niall Ferguson as a foundation for (1) why the British Empire was largely a good thing; and (2) why the United States should pick up the White Man's Burden and continue in its tradition.#

There is a massive amount of commentary on Empire (and the second book Colossus) out there on the Internet. For example, Christopher Lydon interviewed Niall for The Whole Wide World and Benjamin Wallace-Wells quotes Ferguson as calling his own books "edutainment."#

Ferguson, like a retreating army, is now shooting his slow horses. First, in "Colossus," he pulled back from the idea of American empire that has, so far, come to define his career for many Americans. In a frank, similar move, he told me that "Colossus" was "vulnerable to attack," and that his books on empire were "edutainment at best." There are not many authors willing to spend their publicity junkets openly denigrating the books they are ostensibly trying to sell.

Additionally, Benjamin characterizes the style of the book very well:

With "Empire", a breezy, optimistic history of the British empire accompanied by a vociferous essay urging the United States to colonize the world in order to guarantee security, free trade, and development, this tendency went pathological. "Empire," which was designed as a companion to a six-part series on Channel Four which Ferguson also executive produced, looks and reads like a coffee-table book, with no footnotes, great photos, and a lively text which focuses heavily on biographical sketches of key imperial figures.

But, I will largely focus on the interesting things I learned from the book and not so much whether or not American should become an empire formally. I plan to tackle this issue with greater depth when I read the next of Ferguson's books, Colossus, which currently sits on my desk.#

Introduction#

In this first chapter, Ferguson is very clear, from page one, that it is addressed to Americans who have an image of the British Empire as a "Bad Thing" and its purpose is to offer an argument that the British Empire was good, not only for the world at large, but the colonies and the colonists as well.

Ferguson's explanation of opposition to the Empire is interesting:

The central nationalist/Marxist assumption is, of course, that imperialism was economically exploitative: every fact of colonial rule, including even the apparently sincere efforts of Europeans to study and understand indigenous cultures, was at root designed to maximize the surplus value that could be extracted from the subject peoples. The central liberal assumption is more paradoxical. It is that precisely because imperialism distorted market forces - using everything from military force to preferential tariffs to rig business in favour of the metropolis - it was not in the long-term interests of the metropolitan economy either. In this view, it was free economic integration with the rest of the world that mattered, not the coercive integration of imperialism. [p. xvii]

He states that his primary argument will be that the British Empire was the best empire, during its reign, to be conquered by because all the others were far-worse: far more destructive of local environments and of local peoples. Thus the British Empire was the best possible and practical choice, but maybe not the best in an ideal or perfect world that does not exist.

(To recall the purpose of the book, this seems to suggest that the Americans are the best in comparison to something else. What? Muslim fundamentalism, I imagine is Ferguson's reply.)

1 Why Brittain? (Pirates)#

It should not be forgotten that this was how the British Empire began: in a maelstrom of seaborne violence and theft. It was not conceived by self-conscious imperialists, aiming to establish English rule over foreign lands, or colonists hoping to build a new life overseas. Morgan and his fellow 'buccaneers' were thieves, trying to steal the proceeds of someone else's Empire. [p. 1]

This was how it got started in the Western Hemisphere, while in the Eastern (India primarily) it grew from English merchants groveling for crumbs from the Mughal Emperor.

In 1700 the population of India was twenty times that of the United Kingdom. India's share of total world output at that time has been estimated at 24 per cent - nearly a quarter; Britain's share was just 3 per cent. The idea that Britain might one day ruler India would have struck a visitor to Delhi in the late seventeenth century as simply preposterous. [p. 22]

While the growth was not all "done 'in a fit of absence of mind'" (p. 43) it had roots not in the government but of the private sector of both sides. Only later did the British trading companies request support from the Crown and only did the ruling governments willingly pass control (particularly in India) to the British.

After this foundation in trade came the deliberate colonization promoted and sometimes enforced (Australian) by the British.

2 White Plague (Planters)#

This is just hilarious:

In his pamphlet 'A Good Speed to Virginia', the Chaplain to the Virginia Company Robert Gray asked: 'By what right or warrant can we enter into the land of these Savages, take away their rightful inheritance from them, and plant ourselves in their place, being unwronged or unprovoked by them?' Richard Hakluyt's answer was that the native Americans were a people 'crying out to us ... to come and help' them. The seal of the Massachusetts Bay Company (1629) even had an Indian waving a banner which read 'Come over and Help Us'. [p. 55]

It is in the chapter where Ferguson explains the American Revolution in very interesting terms: It was primarily a British civil war fought in one of its less important colonies. (Jamaica was five times more profitable than all the American colonies combined prior to the war, p. 61.) And because it was a civil war, there were many who disagreed on both sides of the Atlantic, most famously the British who ensured that Canada would not remain 'New France.'

The war is at the very heart of Americans' conception of themselves: the idea of a struggle for liberty against an evil empire is the country's creation myth. but it is the great paradox of the American Revolution - and it strikes you forcefully when you see today's prosperous Lexingtonians trying to relive their forefathers' self-sacrifice - that the ones who revolted against British rule were the best-off of all Britain's colonial subjects. There is good reason to think that, by the 1770s, New Englanders were about the wealthiest people in the world. Per capita income was at least equal to that in the United Kingdom and was more evenly distributed. The New Englanders had bigger farms, bigger families, and better education than the Old Englanders back home. And, crucially, the paid far less tax. In 1763 the average Briton paid 26 shillings a year in taxes. The equivalent figure for a Massachusetts taxpayer was just one shilling. To say that being British subject had been good for these people would be an understatement. And yet it was they, not the indentured labourers of Virginia or the slaves of Jamaica, who first threw off the yoke of imperial authority. [p. 70]

He gives many interesting examples of how the common conception of the Revolution is not entirely accurate. And ultimately he settles that the issue was over the principle of representation, and only the rich can afford to stick to principles; and, that the Americans were right as the Durham Report of the 1830s announced in its recommendations to Parliament on how to increase representation in the colonies. (p. 92)

3 The Mission (Missionaries)#

This chapters describes the missionary societies and groups of the 19th century as the 'original NGOs' that dreamed of helping other countries and exporting 'civilization' to the dark corners of the world. It seems to me that Ferguson ranks this as the both the lowest and highest points of the Empire. Highest because they were behind abolishing the slave trade, or rather getting the British Navy to abolish it. And the lowest, because of the way they disrespected other cultures, in particular India's, and led to many bitter relations and uprisings, like the Indian Mutiny.

4 Heaven's Breed (Mandarins)#

This chapter deals with the Indian Civil Service, the British administrators totaling 900, that controlled and managed India. Ferguson sees this group of 'mandarins' as the most powerful argument for the British Empire: it worked. And thinks that this is where Americans are lacking. Not in the skill, but in the will.

Ferguson also addresses the issue of whether Empire was good for India:

[Would] Indians have been better off under the Mughals? [The Mughals were the old Muslim emperors.] Or, for that matter, under the Dutch - or the Russians?

It might seem self-evident that they would have been better off under Indian rulers. That was certainly true from the point of view of the ruling elites the British had overthrown and whose share of national income, something like 5 per cent, they then appropriated for their own consumption. But for the majority of Indians it was far less clear that their lot would improve under independence. Under British rule, the village economy's share of total after-tax income actually rose from 45 per cent to 54 per cent. Since that sector represented around three-quarters of the entire population, there can therefore be little doubt that British rule reduced inequality in India. And even if the British did not greatly increase Indian incomes, things might conceivably have been worse under a restored Mughal regime had the Mutiny succeeded. China did not prosper under Chinese rulers. [p. 182]

5 Maxim Force (Bankers)#

This chapter deals with the "Scramble for Africa" and the many bloody results of European activity on that continent. It is so named for the Maxim machine guns that proved unbeatable by the natives and the Bankers who greatly increased their gain from the gold and diamond mines in Africa.

6 Empire For Sale (Bankrupts)#

This chapter deals with the developments of the twentieth century: mainly the consequences of two world wars on the British Empire. And, they were not good.

He opens with words that Winston Churchill wrote to his classmate at seventeen:

I can see vast changes coming over a now peaceful world; great upheavals, terrible struggles; wars such as one cannot imagine; and I tell you London will be in danger - London will be attacked and I shall be very prominent in the defence of London ... I see further ahead than you do. I see into the future. The country will be subjected somehow to a tremendous invasion ... but I tell you I shall be in command of the defences of London and I shall save London and the Empire from disaster. [p. 245]

The crux of this chapter is the decline of the British Empire was a sacrifice. It was sacrificed to stop the much worse empires of the Japanese, Germans, and Italians. And it was the right choice to make, but it left a power vacuum that was filled by Russia and the United States.

But, the United States has always been against formal colonies, as evidenced by this entertaining discussion between Woodrow Wilson and British Foreign Secretary Sir Edward Grey on Mexico in 1913:

'Suppose you have to intervene, what then?'
'Make 'em vote and live by their decisions.'
'But suppose they will not so live?'
'We'll go in and make 'em vote again.'
'And keep this up 200 years?' asked he.
'Yes', said I. 'The United States will be hear for two hundred years and it can continue to shoot men for that little space till they learn to vote and to rule themselves.'

Anything, in other words, but take over Mexico - which would have been the British solution. [p. 291]

Conclusion#

The British Empire exported the institutions invented by the West to bring prosperity and liberty to men. Ferguson, in fact, uses the listed provided by David S. Landes in The Wealth and Poverty of Nations as a template when summarizing the benefits of Empire.

For more, please refer to the discussion in the post related to Colossus: The Price of America's Empire.#

Richard links to an essay by Niall Ferguson about what exactly "Power" is and how the United States can (and will) use it (or lose it.)#

One of the proposed measures of power is simply people. Everything that matters to people starts and ends with people, so it seems like a natural measurement.

Population counts: Once again, you only need to ask the French, whose decline and fall as a great power was linked to their relatively low birthrate in the nineteenth century. (In the eighteenth century, they had outnumbered all the other European powers bar Russia.) It's also worth noting that average population growth rates in the Islamic world have been running at nearly double the Chinese rate. If we are, as Samuel Huntington has claimed, witnessing a clash of civilizations, it must matter that their civilization is quite literally growing faster than ours. It is also a much more youthful civilization than that of the senescent West.

But of course, resources are necessary as well, so the situation is much more complex than it seems. Surprise.

But even people + resources, as measured by the Gross Domestic Product can't really be consider power either:

But GDP doesn't stand for Great Diplomatic Power. If the institutions aren't in place to translate economic output into military hardware—and if the economy grows faster than public interest in foreign affairs—then product is nothing more than potential power. America overtook Britain in terms of GDP in the 1870s, but it was not until the First World War that it overtook Britain as a global power.

His discussion of financial power is brilliant:

Sub-Marxist teenage demonstrators from Seattle to Prague like to claim that power in fact lies with international financial institutions. This really is as silly as it gets. The two banks like to criticize one another, but both the IMF and the World Bank have one thing in common: They are trying to help less-developed or transitional economies. Their medicine may not always be palatable or effective, but that's another matter. If these institutions have a problem, it is that they are not powerful enough, not that they are too powerful. Much of the time all they can do is lend money to flaky governments and exhort them to be less flaky. Some power. Their resources are also far more limited than the antiglobalization rent-a-mob seems to realize. What the IMF calls its "total resources" amount to approximately $290 billion, but its net lending capacity is just $88 billion. That's less than a quarter of the U.S. Social Security budget.

Although, I find it curious that he would not refer to the great power that the Rothschild family exerted in the 18th and 19th century, which he documented in his biography of said family. Perhaps it just goes without saying that there does not currently exist such a powerful financial institute?

Moving on to Multinational Corporations:

But the real point, some would claim, is that so many of these multi-national corporations are American. And the products they sell are the key to the real power the United States wields—its "soft" power, the things that make the United States attractive.

The trouble with soft power is that it's, well, soft. All over the Islamic world there are kids who enjoy (or would like to enjoy) bottles of Coke, Big Macs, CDs by Britney Spears, and DVDs starring Tom Cruise. Do any of these things make them love America more? Strangely not.

He then denounces the idea that information enabled individuals can produce non-government organizations with great power by pointing to the Worldwide Fund for Nature.

But the WWF's current campaign to stop overfishing of the world's oceans is likely to be frustrated by the countless millions of—you guessed it—individual consumers who just like eating fish more than they like thinking about the future of the planet. The biggest check on the power of those who actively surf may be the indifference of those who passively shop.

The clincher:

There is no reason in theory why democracies should not prove equally resilient, even though they rely on consent through representation rather than (or at least more than) on coercion. But we don't know for sure. No democracy has ever suffered privations as colossal as those the Nazis inflicted on the Soviets; the United States in particular has got off amazingly lightly in all the wars it has fought against external enemies.

Power, then, is partly about material things: guns, butter, men, money, oil. But it is also about morale. In a world characterized by the diffusion of most of the material elements of power, real power may therefore come to depend on having credibility and legitimacy. Faith cannot move mountains. But it can move men.

Richard links me to another great essay on Niall Ferguson by Robin Melville.#

This is primarily a review of Empire: The Rise and Demise of the British World Order and the Lessons for Global Power.

Ferguson's stated purpose is "to write the history of globalization as it was promoted by Great Britain and her colonies," not to write yet another history of the British Empire (p. xxvi). Thus does he begin to intimate here and in related introductory passages that that Empire was but a factor, albeit a key factor (of a supposedly beneficial type), in a larger, more complex set of global arrangements. As he sees it, something like an empire must function if the complex global system Britain did so much to create is to continue in being. For the attempt since World War Two to run the world without an empire has, he asserts, failed (p. 362). And so who better than the Americans, who happen to embody the most important British attributes, the concern for liberty, both political and economic, to carry on where the British had to leave off? From this perspective Ferguson's explicit attempt to address an American audience is perfectly comprehensible.

The reviewer of the book has a great problem with the premise: What would a British citizen have to offer the Americans? Is he really so naïve to think that the Americans have never thought about empire? (The writer obvious did not read Robert Fulford's piece a few years prior, where Ferguson states he thinks the Americans have a distrust of empire and fear themselves wielding such power.) I have not read Empire, but it would seem to me to be a persuasion rather than an education or command.

Furthermore, the reviewer feels that Ferguson is not being very "historic" in his account:

Ferguson explicitly claims merely to be presenting evidence, leaving it to them to judge the merits and the demerits of the British Empire (p. xxix). But that is a claim I now wish to question.

One of the Melville's complaints is that Ferguson seems to equate too much importance (by Melville's measure) to the British Empire and not enough to the other powers in the world:

More generally, his assumptions about the British and the continentals and their several empires seem to foreclose any consideration of the possibility that it was the interactions among all of these pieces of the world that contributed to the historical development of each as well as of the whole. But it is surely implausible to assume that the British were not shaped and reshaped by their Empire just as much as Britain, especially those who were dominant within Britain, shaped and reshaped the Empire? And it is surely implausible to assume that the Dutch and the other continental empires were not shaped and reshaped by the their existence within a global order dominated by Britain and its Empire? In short, in framing his hypotheses in the way that he does, given what appear to be some of his grounding assumptions, is not Ferguson being a rather ahistorical historian?

One of my favourite movies is The Four Feathers. It's about the British Empire and the war in the Sudan. This comment reminded me of it:

In his fifth chapter, "Maxim Force" (pp. 220-289), set between photographs of dead bodies in a Natal trench and of bright-eyed, militaristic British boy scouts, Ferguson recounts "the Empire's phenomenal expansion in the late Victorian period [thanks to] the combination of financial power and firepower" (p. 223). Abroad—some of this will seem terribly contemporary—the latest in military technology, which rendered the weapons of those to be defeated and dominated relatively harmless: for example, the half-hour battle of Tel-el-Kabir in 1882 (p. 235), or the five hour battle at Omdurman, which saw the transformation of almost the entire opposing 52,000 strong Islamic army into a heap of casualties, almost 10,000 of them being killed outright, while fewer than 400 of the Anglo-Egyptian force and only 48 British soldiers lost their lives (pp. 267-268).

Interlude

In the movie, the British forces were slaughtered at Omdurman. So, I looked into it and found this article that fact checks the movie:

But despite the film's many positive features, Peter Hammond was bitterly disappointed. General Gordon was in Khartoum on a mission to end the Islamic slave trade, but The Four Feathers does not even mention this basic fact - nor the primary British goal of justice and freedom for the Sudanese.

[...]

Another fatal flaw in the film was its depiction of the overwhelming British victory at Abu Klea as a British defeat. On 17 January 1885 a small British relief column, made up largely of the Camel Corps, smashed the Mahdi's force of 10,000 Dervishes.

Good to know!

Let's go out to the lobby... Let's go out to the lobby...

So, on the claim that the British Empire exemplified freedom (as evidenced above by another source), Melville questions as follows:

Just how qualified is Ferguson's admiration for liberty is oddly evident in one of the few sections of his book where he actually explores the subject in some depth, in his discussion of the American War of Independence (pp. 88-102). "It was," he asserts, "the moment when the British ideal of liberty bit back" (p. 88). But while duly noting the significance for liberty of Jefferson's preamble to the Declaration of Independence (p. 94), he emphasizes that it was the New Englanders, "about the wealthiest people in the world" at that time, "not the indentured labourers of Virginia or the slaves of Jamaica, who first threw off the yoke of imperial authority" (p. 89).

Something I find interesting is the claim that the British Empire's greatest achievement, like that of Christ, was its self-sacrifice for its Sins and the Sins of Man. In the case of the British, their empire was sacrificed to destroy the worse empires of Italy, Germany, and Japan. But after that, the world existed in a power vacuum, with not proper empire:

Ferguson now urges his audiences, particularly his American audience, to believe that the world needs some form of "international government" to deal with the contradictory tendencies, economic globalization and political fragmentation, and that "the British Empire proved that empire . . . can work" to provide such a government (p. 362). Thus, the United States, which has the economic capacity "to impose [as Britain did] its preferred values on less technologically developed societies" (p. 367), should now pursue formal empire (p. 368). Indeed, according to Ferguson, part of the post-Empire global predicament may be that "the Americans have taken our old role without yet facing the fact that an empire comes with it" (p. 370).

The reviewer closes with the obligatory reference to Marx:

I, for one, as will be obvious, hope he fails in his endeavour. Ferguson's American publisher's promotional material notes that "it's very likely that the British past offers the key to the American future." But those who read Empire might well conclude that empire is something to be avoided and opposed root and branch. If those who read Empireattend to the violence, the predatoriness, the excesses and the material and moral costs he describes rather than to the course of action he advocates and the universal benefits he so inadequately proves would flow from such a course of action, they will take his publisher's praise as a warning not dissimilar to the warning Marx once gave his German audience concerning an earlier British example.

Richard pointed me to a series on Niall Ferguson by Robert Fulford. It is in three parts. Part 1, Part 2, and Part 3.#

I've read books by Ferguson before but it was at a time when I did not blog the books I read. The books were:

• The Cash Nexus: Money and Power in the Modern World, 1700-2000
• The House of Rothschild: Money's Prophets, 1798-1848

Part 1:#

It starts off by talking about how prolific Niall is and gives a recap of some of his work.

First there was Paper and Iron: Hamburg Business and German Politics in the Era of Inflation, 1897-1927, which turned his doctoral thesis into a cool, measured account of the financial panics that drove the Germans crazy. Then he broke new ground with The World's Banker: The History of the House of Rothschild, having been given first-ever access to the private archives (but only up to 1915) of the bank that played power-broker in half a dozen European countries for generations. About two years ago he caused a sensation with The Pity of War, an account of the origins, the strategies and the meaning of the First World War. And, after a brief pause for breath, he's just written a work that attempts to pull together in one collection of arguments all the strings of his startling career, The Cash Nexus: Money and Power in the Modern World 1700-2000, published this week.

One of things about Niall is that he truly objective and this leads to many situations where he says what he believes to be true, not what is popular. He has no problem with heresay. For example, he writes about how England had no hard reason to enter World War I and how in a democracy the people do not reward politicians with votes for economic success. And there is this great note on the United States:

We also believe, because most of us are congenital optimists, that prosperity encourages democracy, and democracy inevitably creates prosperity, in an upward double-helix motion. Wrong, says Mr. Ferguson, and demonstrates that freedom and economic growth are not nearly as closely linked as we imagine. It has also been long accepted that the United States risks becoming dangerously overstretched as an empire by taking on too many global responsibilities. Wrong again, says Mr. Ferguson. The United States does not take on nearly enough. It does not commit sufficient resources to the military operations that will be needed to encourage democracy and peace, operations that only the United States can undertake (with the help of others). To make his point, and answer the overstretch argument, he invents a word: The Untied States, he claims, is "understretched."

(This seems to be the idea he later developed in Empire by writing about how the British Empire operated in contrast to the American and then comparing their strengths.)

But Niall was not always the scholar he is:

Toward the close of his second year, as he was smoking a hookah on stage while dressed as the caterpillar in a production of Alice in Wonderland, he asked himself: What the hell am I doing here? More or less instantly, he turned into the scholar that nature had always intended him to be. He went into the library and, in a sense, never came out.

And despite Niall's book deals and prestigious position at Oxford, he still writes as a journalist. This causes some confusion:

The Guardian man professed not to understand how Mr. Ferguson could be both historian and journalist: "Can you have it both ways?" he asked. Actually, Mr. Ferguson operates within a long tradition, exemplified in the 20th century by A.J.P. Taylor and Hugh Trevor-Roper, both of them first-class scholars and first-class controversial journalists. As Mr. Ferguson says, "What's the point of having knowledge about modern history if you confine yourself to writing monographs for the Oxford University Press?"

Part 2:#

This second part goes more in to depth with some of Niall's ideas and work, rather than his personality. For example, continuing on that note about the economy, maybe not being so important:

All such opinions were shaped by Karl Marx, but also by an idea even larger than Marx -- economic determinism, the doctrine that the health of nations and the fate of humanity is predetermined by relentless economic forces. It is a belief that afflicts equally the political left, right and centre. It inspired Bill Clinton's first presidential campaign, when his advisors, defining their main issue, wrote the words "It's the economy, stupid," on the wall of their war room. It's the same spirit that springs to life every morning in the editorials of the Wall Street Journal, and it determines the attitudes of most democratic governments today. Politicians automatically assume, as Niall Ferguson puts it, that "economic change is the motor of history." This is our era's cherished wisdom: generating wealth is the key to national development, international relations and democracy.

In Mr. Ferguson's view this common belief has one major flaw: So far as he can tell, it's wrong, or at least more often wrong than right.

While Niall can be thought of as on the right... it is not so easy a claim to make. I see this as an effect of his reliance on evidence and an indication that both sides of the coin are partially right, that is, right about different things.

The Cash Nexus will not necessarily comfort the political right. Those battling against public debt, for instance, cannot look to Mr. Ferguson for succour. He thinks an apparent mountain of debt may be far from disadvantageous, as long as a country's financial system can manage it. If public debt cripples a society's efforts, he asks, then how do we explain that early in the 19th-century Britain became the first industrial nation while carrying "a public debt burden of unparalleled size and duration?"

The way that Niall thinks about history and what he is striving for is something that I find very worthy of praise:

Mr. Ferguson has been pressing toward a new and perhaps less confident kind of history. He wants historians to see any given period in the past as it was seen by those who lived it, rather than by those who know how it came out. One of his projects has been attacking historical determinism and putting in its place a more realistic (if far more complicated) principle of historical cause.

But, returning to objectivity, rationality, and reason; Niall does not find this to be universal or inherent traits of Man:

Mr. Ferguson believes in reason but does not trust its power over the lives of humans. He notes that the greatest genius of his age, Isaac Newton, lost heavily on South Sea stock -- he bought, he sold, and then he re-entered the market just before it collapsed. Newton later reflected: "I can calculate the motions of the heavenly bodies, but not the madness of the people." Mr. Ferguson takes Dostoyevsky's derisive view, expressed in Notes from Underground, of the idea that man acts out of economic self-interest. Dostoyevsky said that man acts in the way he feels like acting and not necessarily in his best interests: "A man may wish upon himself, in full awareness, something harmful, stupid and even completely idiotic ... in order to establish his right to wish for the most idiotic things."

Part 3:#

The focus here is on governments and war. Governments and War:

From 1495 to 1975, the great powers were involved in wars about three-quarters of the time. That's a point made by Niall Ferguson, professor of political and financial history at Oxford, in The Cash Nexus: Money and Power in the Modern World 1700-2000, published this week. War was not only routine, it was also the reason for creating the bureaucratic, economic and educational structures of the world we live in now. Over-simplified a little, the Ferguson thesis goes this way: Governments do not make war, wars make governments.

(Jared Diamond seems to agree that "War is the fall of all things," including the biggest mistake of the human race: agriculture.)

Continuing...

"You create institutions to wage war," he says, "and the unintentional result is that they give rise to the rule of law." Political crises (including those created by religion, race and culture) lead to wars, which in turn create banks and brokers. These vast financial networks need regulating if they are to work, and eventually also require educated citizens, so education becomes necessary. The national debt starts off as a way to finance war and ends up as the basis of the money market. Much of humanity sees this process working in the opposite direction, but much of humanity -- Mr. Ferguson persuasively claims -- has it all wrong. "To say financial markets rule the world is to say the plankton rule the sea."

Oh man, read this:

But the United States suffers from what he calls "an ideological embarrassment about seeming to wield imperial power" as well as an exaggerated notion of how other nations (such as China) might respond. The United States has also decided, more or less, that it will not tolerate military casualties, which draws a snort of derision from Mr. Ferguson: "The greatest disappointment facing the world in the 21st century is that the state with the economic resources to make the world a better place lacks the guts to do it." He seems not to understand that U.S. citizens (and the politicians charged with serving them) were traumatized by what they saw as pointless deaths in their pointless war in Vietnam. The experience shaped a generation, and that generation in turn taught the generation that followed. Mr. Ferguson sees the Americans failing to understand that a relatively small number of casualties in the present could prevent far greater casualties later.

See the line I bolded? Wesley Clark said that the other day, almost exactly.

And to close off, Niall is not totally focused on history and facts:

For the most part Mr. Ferguson grounds his opinions in facts, exhaustively gathered and impeccably set down. On the other hand, he does not avoid speculation, often on subjects intrinsically unknowable. The man who edited an impressive book of speculation, Virtual History: Alternatives and Counterfactuals, is still willing to make some fascinating guesses. What would have happened, for instance, if the Cold War had turned hot? In his view, the Soviet Union would have won. The Soviets could have taken almost limitless casualties, as they proved in the Second World War; the Americans could not. Instead, the war moved on to the economic front, where the Soviets lost because their system failed at providing consumer goods.