The Money Machine

For the Delta to become the chief grower of the industrial world’s most important commodity – a kind of Saudi Arabia of the early 19th century – its land had to be taken from its original inhabitants; and labor, capital, knowledge, and state power had to be mobilized… Wealth, as viewed from the front porches of the lavish and elegantly furnished mansions in the Delta, appeared to flow out of the soil, the result of a strange alchemy that combined emptied lands, slave labor, and… the never-ending flow of European capital.

Sven Beckert at Harvard is the point man in a fascinating project to rethink Capitalism not as “dismal science” but as lively “biography.” His exhilarating Empire of Cotton — aptly called “remarkable and unsettling” — is a 250-year profile of a commodity that pre-dates the Industrial Revolution but came to model and drive the drastic growth of invention and productivity after, say, 1780.

The deeper we plow in Beckert’s history, the more we feel we’re watching the unfolding adventures of a complex and contradictory stage character, maybe two. Cotton itself – the fiber and “fabric of our lives” nowadays — has an ancient Asian pedigree. Until the middle of the 18th Century, it is almost a stranger in Europe, which dressed more in wool, flax and silk. And then quickly, the imperial expansion of Europe (England in the lead) captures (literally!) the labor of West Africa, the low-tech of Asia and the farm lands of Latin America, the Caribbean and the Mississippi Delta. And so a global colossus takes shape around a burst of European inventions that multiply the speed of spinning and weaving cotton by several hundred fold into the 19th century. And of course it thrives in North America.

The politics of Cotton Capitalism suffers a near-catastrophic breakdown in the US Civil War, yet cotton cultivation keeps growing without slavery – on the bargain price of many other kinds of captive labor in Egypt and India, for example, in the share-cropping American South and today in the fields of Kazakhstan and West Africa. Textile production gravitates back toward Asia, toward the “almost absurdly dangerous” and noisy factories of Bangladesh in the present day.

What we’re learning about our long-lived twin protagonists is that both cotton and capitalism are inventive and mobile; energetic to an extreme, resourceful, often predatory, opportunistic and instinctively global in their ambition and reach. They have radically increased human productivity and improved living standards in general. At the same time they have fattened on coercive, often violent exploitation and environmental devastation. They still do.

What Sven Beckert would ask us to remember as we order up our elegant Uniqlo T-shirts for embarrassingly few pennies is that “the global story of cotton is a story of great change… great tragedy… great courage… The world we live in today was created by people who’ve been enslaved for many generations – by taking the land of America’s native people… That legacy is still with us.”

The post Sven Beckert’s Cotton: Guilty Fabric of our Lives appeared first on Open Source with Christopher Lydon.

We’re continuing our series on capitalism by going back to its unspeakable origins.

A new wave of  historians say that the  “peculiar institution” of slavery explains more about the present than we’d care to admit: not just how the West got wealthy, but the way that global capitalism evolved in the first place.

At the beginning of his biography of John Brown, W. E. B. DuBois put slavery in terms of the eternal dream of free labor: “These black men came not of their own willing, but because the hasty greed of new America selfishly and half-thoughtlessly sought to revive in the New World the dying but unforgotten custom of enslaving the world’s workers.”

It was the global slave trade that helped make America rich, and yet no part of our history was more brutally unequal, more lucrative and less regulated than the slave-and-cotton empire.

The dream of cheap labor is alive and well, but are we comfortable knowing that it came in part from the empire of slaves and cotton? How should we take account of this unspeakable past? Leave us a message by clicking on the microphone, or comment below.

We’ve pulled two clips from the Library of Congress’s “Voices from the Days of Slavery’ project. They make for grim but human testimony: first from Fountain Hughes, a grandson of a slave belonging to Jefferson himself, and second from Harriet Smith, a woman who was thirteen when the Civil War ended in ‘the breakup’. The recordings are from 1941; you can listen to the entire small audio collection here.

At the spur of Wilder’s Ebony and Ivy we took up a search for records of Harvard’s slave history.

Rebecca Panovka surface one pair of notes that brings across the darkness of one terrifically unruly period in the middle of the 18th century, when undergraduates were toting pistols and sleeping with professors’ daughters, then running off into the night. These episodes have surfaced in several places, but here you can see the notes, thanks to the permission of the Harvard University Archives.

[pdfjs-viewer url=http://radioopensource.org/wp-content/uploads/2014/11/1740-Harvard-minutes.pdf viewer_width=600px viewer_height=700px fullscreen=true download=true print=true openfile=false]

On March 21, 1740, President Edward Holyoke and tutors agreed “that the scholars be again warned, by no Means & upon no pretence [what]soever, to presume either to Entertain or associate with, either […] Woodhouse of this Town, or Titus, a Molattoe slave of the late Rev’d Pres. Wadsworth’s.” They further ask that ‘the Buttery’ put up a sign advising students of the new restriction.

Now, in Samuel Eliot Morison’s much-admired Three Centuries of Harvard, 1636 – 1936, Titus is presented as a source of this trouble: “[he] was a frequent guest and entertainer on these festive occasions. Finally he was forbidden to enter the Yard” at the same meeting recorded above. (Titus was not a free man at this point, but outlived his master in what is now called Wadsworth House, still standing the round western corner of Harvard Yard.)

Then again, eleven years later, we see several well-born men of Boston punished for making a slave the object of the fun — for intoxicating “a negroe-man-servt belonging to Mr. Sprague… to such Degree as greatly indanger’d his Life.” Among those ‘degraded’ was John Hancock: smuggler/financier, first signatory to the Declaration of Independence, and one of the first Harvard alumni to blaze a path into big business.

Edward Holyoke, the oldest-ever President of Harvard, who presided over this period, said on his deathbed: “If any man wishes to be humbled and mortified, let him become President of Harvard College.” No kidding. 

The Dow is down 4 percent since the start of the month — the Nasdaq’s down 9% — and the financial wizards at the Times’s Upshot blog have concluded that slow growth may be the new normal. Investors everywhere are betting that financial regulators and policymakers have fired their last bullet — and have nothing left to do.

Casey Stengel raised the question about baseball’s miserable Mets long ago: anybody here know how to play this game? It’s the question more and more of us ask about economists and some of them ask about one another: how could the late great Milton Friedman have seen storm-proof clear sailing ahead, when in fact a housing bubble was about to burst all over us? How was it none of the masterminds in power saw the bank-and-insurance collapse coming in 2008?  How are they still in power, in spite of that? No repentance, nothing like radical repairs for an economic regime that’s still running fevers, can’t put young college grads to work, isn’t investing in our own fundamentals. The New York Times writes at the end of a panicky week on Wall Street, “The party is over.”

Jeremy Grantham is a Boston financier who has found himself in the thick of the fight over climate change for more than twenty years. He’s the founder and chief strategist of Grantham Mayo van Otterloo, or GMO, which manages $112 billion in assets.

When we spoke to him in his Rowes Wharf office, overlooking Boston Harbor, Grantham calls himself a “scatterbrained” investor working with a third-rate education. If, after raising the alarm loudly and very early about the catastrophic market bubbles of 1999 and 2008, he’s become one of America’s most prominent financial strategists, it’s a tribute to natural patience and a conservatism that he chalks up to a Yorkshire childhood and a Quaker grandfather. But Grantham’s also glad to carry weight in the world of feverish investment. His quarterly letters have become must-reads, offering a warier look, going deeper into the future, than one usually finds on Wall Street. (His latest is here.)

Grantham discovered the fragility and beauty of the natural world on family trips into old and ravaged forests of the Amazon basin and Borneo. Now his family foundation is engaged in a farsighted effort to fight climate-skeptical “propaganda” with propaganda of its own: funding change-now messages from groups like Bill McKibben’s 350.org, Greenpeace, and the World Wildlife Fund. It’s the “race of our lives”, he wrote: against short-term psychology and an entrenched fossil-fuel economy. Grantham is troubled by the long odds, but still he’s trying to draw money and mass attention to an existential risk — before it’s too late to do anything about it. Call it the biggest short.

Photo credit: Remco Bohle.

The post Jeremy Grantham: In a Climate of Risk appeared first on Open Source with Christopher Lydon.

Adam Tooze’s new history of World War One, The Deluge, makes a crackling, cautionary tale of the zig-zag course of the young economic giant in America, drawn toward the center of a new global order between 1914 and 1918. In 1916, two years into the war, Americans reelected the president who’d kept us out of the battle. But by the summer of 1917, the same Woodrow Wilson had committed the US to fighting alongside Britain and France against Germany.

For me the hair-raising fascination in our conversation here, on the eve of publication, is in the foreshadowings – of a century of horrific hot and cold sequels of the Great War, but also of the very-2014 tensions between democracy and capitalism, and of course the rise of a new giant in China.

Adam Tooze is an English-trained historian now teaching at Yale. Over a phone line to Paris, on the eve of American publication of The Deluge, Tooze is recounting the “truly extraordinary” role of Wall Street’s J. P. Morgan, serving as banker to Britain, France, Russia and then Italy, “effectively the financial agent for far-and-away the largest coalition of military powers the world had ever seen.” Morgan made a colossal bet on a war that Americans voted not to enter. Paris and London panicked at the election returns and the popular indecision about the war into 1917. What turned President Wilson, Tooze argues, was not J. P. Morgan but the Germans’ cynical (maybe mad) decision to pursue unrestricted submarine warfare (like the torpedo attack on Cunard’s Lusitania which had killed a thousand Americans and shocked the country in 1915). Among the endless counter-factual questions: what if the Kaiser had held back his U-boats and Wilson had held back the American fighting forces, as he wanted to? The Germans might well have won the European war, but we might never have known Fascism, state Communism, World War Two, the Holocaust, the Cold War or nuclear weapons.

Americans seem still to be ambivalent about Wilson’s ambivalence – between the “muscular Wilsonism” (that led us into World War One and the botched peace of Versailles) and Wilson’s dream of “peace without victory” and an American “liberal internationalism” that policed the empires without becoming one.

And then there are the China questions that Adam Tooze says he felt “hanging over me” as he wrote his centennial history of World War One. So many analogies between the US then and China today: rising industrial and financial powers, yet to be partnered into managing the world system. China is vastly older and bigger than the US ever was – a sixth of the world’s population and “an ancient empire coming back into itself,” as Tooze put it. This is the great drama taking place before our eyes, “an epic shift in world affairs we’re living through.” The trick, the historian says, is to realize that there is no succession of empires, no simple repetition in history. Stay tuned!

The post WWI: Adam Tooze Reviews “The Deluge” appeared first on Open Source with Christopher Lydon.