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The crisis of 2011 – in 2010? — Crooked Timber

November 20th, 2010

Back in July, no one seemed to be talking about a shutdown of the US government following the Dems loss of control of the House. Now the only question is – when?

David Dayen at FDL says it could be as soon as December (I don’t understand the mechanics well enough to confirm or reject this claim). Among those looking forward to the shutdown, the most notable, for a variety of reasons is Alan Simpson. Obama must really be feeling the gratitude there.

There’s still a chance that the Dems can manage a pre-emptive capitulation/collaboration so massive that some on the other side will be willing to cash in their gains without taking the risk of a shutdown. I imagine that would entail, at a minimum, full extension of the Bush tax cuts, effective repeal of the health care bill, no more money for the unemployed, Social Security ‘reform’ and a bunch of spending cuts directed at the tribal demons of the Tea Party. Of those, health care is the only one where I can see the White House taking a stand. I’m less clear about the priorities of the Congressional Dems.

Posted via email from John’s posterous

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  1. Peter T
    November 23rd, 2010 at 20:45 | #1

    Trying to apply modern economic theories that far back is an exercise in barely-informed guesswork (at its politest). Roman taxes took a variety of forms – cash, in-kind deliveries (50% of the total in Egypt), impositions on locals of conscription, civic service, requisitions for the army, forced loans, compulsory office-holding. We know about the forms, almost nothing about the gross amounts and very little about the variations over time and place. What we can say with reasonable confidence is that the West seems to have had a much smaller revenue base than the East, was more exposed to barbarian settlement, and possibly more affected by the disasters of the 3rd and 4th centuries (plague, civil war). From the few figures that survive, Italy seems to have been very heavily taxed. It was less about coins than confidence in the state and continuity of cultural ideals.

  2. November 26th, 2010 at 11:11 | #2

    Sorry for the delay replying.

    Alan :
    Um, Pirenne is just a tad outdated. While his insights are interesting he really was not working from the level of data available to contemporary historians.

    I cited him mainly as illustration, partly for that reason. Even so, his work has not been refuted; I am not talking here about the theories he based on his observations so much as the facts brought out by those, i.e. that trade and the cash economy didn’t collapse just then.

    North Africa returned more revenue to the court than any other province and its loss, in revenue terms, was catastrophic. The loss of Spain, which was the Peru of the Roman empire, was not much less catastrophic. Nor can one really state the fiscal depredations of the senatorial class, which deprived the state of large revenues, are unimportant in a discussion of the revenue.

    All true, but again deviating from what I brought out earlier – that the coinage itself and the wider economy itself were not materially affected by all this, only the military-state-imperial stuff was. We do know that the coinage wasn’t materially affected, e.g. from numismatic evidence; analysis can tell us why it wasn’t, or at least suggest possible reasons for that, but it can’t tell it us that it really was after all.

    It is worth going into more detail about what I meant about North African wealth generation showing up in Italy, and so on. What happens in major disruptions like the Great Depression is, things like cars fall in production levels but not so much in price while things like crops do the reverse; the elasticities reflect human priorities and physical constraints. So we can indeed expect that North African grain production ceased to return much cash to Rome (and so, less to the state apparatus); but we can expect grain supplies to have been not much less, and so the real economic activity it afforded in Italy would not have fallen much.

    The private rent payments from North Africa did happen, but for a vanishingly short time. The Vandals occupied the North African provinces in stages. Once they secured imperial recognition for their conquest in 439, their next act was the seizure of all senatorial estates. We are talking about a period of 4 or 5 years and I am not absolutely convinced that during those 4 or 5 years the local Vandal governor necessarily quaked in his boots every time a bailiff arrived from Rome.

    I did know it was a progressive process. I also know that diplomatic pressures continued to affect Vandal policy for quite some time, e.g. affecting the status of the Catholic Church under the Arian Vandals, so the Church kept at least some property for quite some time along with its privileges, and I suspect that influential Roman land owners also kept theirs for a while longer – even if it was only a matter of being eaten last. Of course, bailiffs wouldn’t have been sent from Rome to Vandal governors; rather, agents would have been sent, getting the Vandals to send their own bailiffs to the peasant tenants. (Mockery is no argument, so I will charitably overlook that attempt.)

    Nor does the argument that barbarians would accept only good coin, a slightly different argument from your first, really stand close examination. Barbarians were paid in bullion. Attila, for instance, demanded and got a yearly tribute of 750 lbs of gold from the eastern empire in 440. Presumably they were less convinced by the imperial currency than commenters in the 21st century.

    But this supports my point. Perhaps – unusually – it would have been clearer with a double negative: barbarians who were using their military superiority to extort wealth would not have been willing to settle for coin that was not good coin. That means that there was less point to trying to depreciate the coinage than in earlier centuries. As I remarked above, I am not trying to prove that they didn’t depreciate the coinage. We already know that the coinage remained basically sound in that time and place, I was just wondering why it wasn’t depreciated in the manner that the first commenter suggested it always was in times of decline. Maybe it was partly the minting going on in the east, maybe it was the continuing influx of West African gold – but I suspect much of it was the growing irrelevance of imperial forms and bureaucracy and of the methods like debasement for the needs at hand. When the barbarians were looking over their shoulders, and low level economic activity was disengaging from the cash economy, the imperialists either didn’t try it or didn’t affect very much (“pushing on string”). When I write “disengaging”, I am not contradicting my earlier remarks about the cash economy not collapsing – it’s a different effect.

  3. November 26th, 2010 at 11:18 | #3

    Peter T :
    Trying to apply modern economic theories that far back is an exercise in barely-informed guesswork (at its politest). Roman taxes took a variety of forms – cash, in-kind deliveries (50% of the total in Egypt), impositions on locals of conscription, civic service, requisitions for the army, forced loans, compulsory office-holding. We know about the forms, almost nothing about the gross amounts and very little about the variations over time and place. What we can say with reasonable confidence is that the West seems to have had a much smaller revenue base than the East, was more exposed to barbarian settlement, and possibly more affected by the disasters of the 3rd and 4th centuries (plague, civil war). From the few figures that survive, Italy seems to have been very heavily taxed. It was less about coins than confidence in the state and continuity of cultural ideals.

    All true and all irrelevant – because that’s a variant of someone saying “the real question is…”, and then answering that instead of what he was asked. The original assertion was that debasement and depreciation were invariable in times of decline going on collapse, and I brought out the fact that Rome was not, after all, a case of this but a counter-example. So the actual question was about coins and such, and pointing out that they weren’t the most relevant things for understanding the period is perfectly true and perfectly irrelevant – since we are not trying to use coins to understand Rome but to use Rome to understand coins.

  4. Peter T
    November 27th, 2010 at 19:53 | #4

    PM Lawrence

    Point acknowledged. My broad point is that historical examples only work if the history is right – and very often it is not. In ancient history in particular, there is too much we will never know. On coins, the Romans seem to have issued them for specific trades, intra-governmental transfers and for occasions such as donatives (bounties to the troops on the accession of an emperor) as much as for everyday use as a means of exchange. This range of uses, plus other issues, makes working out any correlation between coins and wider economic trends difficult if not impossible.

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