When it comes to Foreign Policy we need more Team America and Less President Obama

Posted by PITHOCRATES - March 20th, 2014

Politics 101

Thanks to President Obama the United States is now the Rodney Dangerfield of Superpowers

The American public is consumed with the missing Malaysian Airlines Flight 370.  They can’t get enough of the news coverage that is anything but news.  With cable news delivering 24/7 coverage of nothing but speculation.  Even the networks are giving the speculation expansive coverage.  They’d never give Obamacare, Benghazi, the IRS targeting conservative groups, etc., this kind of coverage.  But they will give Malaysian Airlines Flight 370 this kind of coverage.  For apart from the insufferable despair of the families who lost their loved ones it’s a great mystery people want to see unfold.  And be the one to solve it.  But while that is going on the world is becoming a less safe place.  Thanks to Vladimir Putin.

President Obama’s ‘please like us’ foreign policy has failed.  The reset with Russia has not improved our relations.  In fact, they are about as bad as they were during the Cold War.  With Putin doing some Cold War chess playing.  Completely unimpressed with President Obama he’s making bold moves.  And when he does all he gets from the United States is talk.  He annexed Crimea without any real opposition from the Western Powers.  Especially the United States.  And he is probably looking at the Baltic States now.  Seeing no reason yet to stop in his quest to put the Soviet Union back together.  This is what the American people are missing.  For the networks are barely covering it.  And the people are blissfully ignorant of how the United States is now the Rodney Dangerfield of superpowers.  We get no respect from our enemies.  So our enemies make bold moves.  Because that’s who they are.  The creators of South Park made a movie called Team America: World Police (2004).  This followed 9/11 and the beginning of the wars in Afghanistan and Iraq.  When the United States began its fight in the global war on terror.  Though a comedy the writers seem to have a better grasp on the real world than the Obama administration or the mainstream media.  Who think in the 21st century that war no longer exists because world leaders now discuss their differences like rational and civilized adults according to international law.  And honor their agreements.  But what they don’t understand is something that’s been true since the dawn of civilization.  There are three types of people in the world.  As a drunk in Team America: World Police explains crudely but succinctly.  (WARNING: The following video is for mature audiences only.  For it’s pretty rude and crude and completely inappropriate for the workplace.)

If you’ve watched the video you’ll understand what the three types are.  We’ll call them D, P and A (both singular and plural).  In the context of this movie America was a D.  And Kim Jong Il was an A.  As were the Islamist terrorists.  While the leftist ‘give peace a chance’ Hollywood liberals in the movie (who belonged to the Film Actors’ Guild) were P.  As was the United Nations who sent Hans Blix to inspect Kim Jong Il’s regime to make sure he didn’t have any weapons of mass destruction (WMD).  —SPOILER ALERT—  Team America, the world police, go tear-assing around the world, blowing up parts of countries as they hunt and kill terrorists.  Making the world a safer place.  While Kim Jong Il plots to set off WMDs, using the Islamist terrorists to plant his WMDs.  The F.A.G. actors publicly denounce Team America for their wanton destruction and call corporations the real enemy.  Even going to North Korea to attend a peace conference that Kim Jong Il was hosting.  Believing Kim Jong Il was a man of peace.  And were willing to kill Team America to help Kim Jong Il go forward with his peace plans.  Which was actually blowing up countries all around the world into third-world status.

Hitler promised the Naïve Chamberlain that the Sudetenland would be his last Territorial Acquisition

The movie showed the futility of diplomacy when you’re dealing with A.  Because they will lie and say anything you want to hear to shut you up and make you go away.  And when you do they’re just going to crap all over you and the world.  Because that’s what A do.  The P don’t understand that.  They think they can negotiate and arrive at an agreement with people who lie.  History is full of treaties that A have broken.  Because they don’t respect anything but strength.  And if all you got are words an A just isn’t going to respect you.  And will crap on you the first chance he gets.  Especially if you’re a P.  The Russian people understand this.  During the Sochi Olympics the Daily Show‘s Jason Jones interviewed Russians during the Sochi Games.  And a woman told him they have a saying in Russia.  Don’t be a P.  Which is why they love Vladimir Putin.  He’s not a P.  He’s an A.

Communists are A.  They just want to crap all over everyone.  During the Korean War every time they were losing on the battlefield they called for a ceasefire to negotiate a peace treaty.  Using the cessation in hostilities to reinforce their weakened positions.  Proving you just cannot trust an A.  Or negotiate with an A.  Yet the leftist ‘give peace a chance’ liberals think you can.  And that all George W. Bush did by being an A was make the world hate the United States.  Even though Muammar Gaddafi, who was a first class A, respected George W. Bush when he invaded Iraq.  Saw that strength.  Respected that strength.  And did not want to get his ass kicked by that strength.  So he gave up his WMDs willingly.  And joined the Americans in the fight against al Qaeda (Libya is a far less safe place today than it was under Muammar Gaddafi after the Iraqi invasion).  This is what A understand.  Strength.  It’s the one thing that makes them act.  Not words.  As this funny scene in Team America: World Police illustrates so poignantly.  (WARNING: The following video is for mature audiences only.  For it’s pretty rude and crude and completely inappropriate for the workplace.)

We ended the war in Iraq with a ceasefire.  Part of the terms that Saddam Hussein agreed to was to destroy his WMDs and document their destruction.  He never did.  In part because he didn’t have them anymore.  Having sent them over the border into Syria (most likely) on trucks and in two converted Iraqi Airways Boeings before the invasion.  Adolf Hitler promised the naïve Prime Minister Neville Chamberlain that the Czechoslovakian Sudetenland would be his last territorial acquisition.  Chamberlain returned to Britain with a treaty signed by Herr Hitler promising “peace in our time.”  Shortly thereafter Hitler launched World War II (the bloodiest and costliest war of all time) and removed Poland from the map.  Because Hitler was an A.  And you just can’t negotiate with an A.  Especially if you’re a P who believes we can settle all our differences if we only communicate with each other.  No.  An A sees anyone who wants to ‘open a dialogue’ as a P.  And they will laugh at how gullible they are.  Getting a lot of concessions by making promises they have no intention of keeping.  A love P.  Because they are so easy to crap all over.

The Russians like President Obama in Office because he is the Anti-Ronald Reagan

The Obama administration confuses being liked with being respected.  They think if people like America they will respect America.  Nothing could be further from the truth.  People respect people they hate.  At least, if they fear people they hate.  A key distinction.  For Vladimir Putin has no love for President Obama.  Who looks at him as a P.  Which Russians just don’t respect.  They even have a saying.  Don’t be a P.  So Putin has no respect whatsoever for President Obama.  Because he does not fear President Obama.  The recent sanctions President Obama issued by executive order only amused the Russians.  They thought they were nothing more than a joke.  Even replied with in-kind sanctions of their own.  Oh they had a good laugh at President Obama trying to act tough.  But they just don’t respect him.  But you know who they did respect?  Ronald Reagan.

During a radio check President Reagan was testing the sound levels before a radio address.  And he made a joke.  He said into the microphone, “My fellow Americans, I’m pleased to tell you today that I’ve signed legislation that will outlaw Russia forever.  We begin bombing in five minutes.”  This joke leaked out.  And made it to the Soviet Union.  And what do you think they did?  Did they have a good laugh like they did when President Obama tried to act tough?  No.  They didn’t.  They put their Soviet Far East Army on alert.  For they did not like Ronald Reagan.  But they sure as hell respected that crazy son of a bitch.  And feared him.  As well as the awesome military power of the United States.  Which they knew President Reagan had no problem using.  Unlike the current occupant of the White House.  Who wants to shrink the size of the military to pre-World War I levels.  Something only a P would do in the eyes of an A like Vladimir Putin.  No.  President Obama is more of an apologetic president for America’s greatness.  While President Reagan made no apologies.  He believed in American Exceptionalism.  And was damn proud of it.  The shiny city on the hill.  The beacon of liberty.  Defender of freedom.  And he would broadcast the Team America theme song proudly at our enemies.  Unlike the apologist now occupying the White House (WARNING: The following video is for mature audiences only.  For it’s pretty rude and crude and completely inappropriate for the workplace.)

America may have its faults but it is still the best country in the world.  Proven by the flow of immigrants (legal and illegal) to our shores.  We may be arrogant but that’s only because we have a right to be.  Because we are the best m-f’ing country in the world.  F*** yeah.  We’ve made the world a better place.  And the world knows this.  Which is why our enemies love having our country run by people who are ashamed of America’s greatness.  Because they can crap all over the world and get away with it.  Like Putin did by annexing Crimea.  Because they know there is no crazy son of a bitch in the White House that will use the awesome power of the United States to stop them.  Just a bunch of leftist ‘give peace a chance’ liberals who will wag their finger at them.  And if they don’t quake with fear they will wag their finger at them again.  Or write a letter.  The Russians couldn’t be happier.  And lament that if there were only people like the current administration running the United States in the Eighties the Soviets never would have lost the Cold War.  But now Vladimir Putin, former KGB officer in the Soviet Union, sees his chance.  He can put the Soviet Union together again.  As they have the anti-Ronald Reagan in office now.  And can do whatever the hell they want to.  Because they aren’t P.  They’re A.

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Byzantine Empire, Bosporus, Silk Road, Dutch East India Company, English East India Company, Tea Act and Opium Wars

Posted by PITHOCRATES - March 11th, 2014

History 101

(Originally published May 15th, 2012)

To encourage Risk Takers to Travel Halfway around the World Mercantile States granted Monopoly Charters

The modern world began because Europeans had a penchant for silk and spices.  Something they enjoyed during Roman times.  When the Romans ruled the world.  And the Mediterranean Sea was nothing more than a Roman lake.  But when the empire stopped conquering new lands and sending the spoils of war home they had to turn to other means to pay for the cost of empire.  Taxes.  To pay for the Roman government and their public spending.  And the Roman legions.  This excessive government spending led to the fall of the western half of the empire.  But the eastern half lived on for another 1,000 years or so.  Why?  Because the capital of the Byzantine Empire was Constantinople.  On the Bosporus.  Trade crossroads of the world.

This city was so rich everybody wanted to conquer it.  So they could have all those riches.  For everything that came along the Silk Road from China crossed into Europe at the Bosporus.  Soon Muslims fought Christians in the Holy lands.  Then more Christians came.  The Crusaders.  Those who didn’t die went back to Europe with some of those Chinese luxuries.  Spices.  Silk.  Porcelain.  Etc.  Sparking a renewed interest in these finer things in Europe.  Especially the spices.  For European cooking was horribly bland at the time.  The Ottoman Turks eventually took Constantinople.  Renamed it Istanbul.  And controlled that lucrative trade.  Making those much sought after Asian goods rather expensive in Europe.  Which they had no choice but to pay.  Because if you wanted those luxuries you had to go through Istanbul.  Until the Portuguese sailed around Africa and found a direct route to those cherished goods, that is.

It was the Commercial Revolution.  A new age of international trade.  A trade even more profitable than what the Ottoman Turks controlled.  Because big ocean-going vessels can carry more cargo than anything coming over land on the Silk Road.  And these new European maritime powers wanted that wealth.  And the power it would provide.  To encourage risk takers to get into those wooden ships and travel halfway around the world they granted monopoly charters.  The Dutch East India Company (VOC) was one of the largest.  And one of the wealthiest.  But this was not your typical company.  The VOC established overseas colonies.  It waged war.  Established treaties.  Even coined its own money.  Because of this thousands of VOC ships stuffed full of valuable cargoes sailed to Antwerp and Amsterdam, making the Dutch very wealthy.  And powerful.

The Tea Act allowed the Company to Ship their Tea Directly to America and exempted them from any Duties

Of course the Dutch weren’t the only ones doing this.  They had competition.  Portugal.  Spain.  France.  And England.  Who would bump into each other numerous times fighting for control of this trade.  And those colonies.  The English and the Dutch would fight 4 wars.  Which is how Dutch-founded Manhattan became part of the British Empire and, subsequently, one of America’s greatest cities.  The English East India Company gave the VOC a run for its money.  Parliament even passed legislation to give the English a monopoly on all trade with their American colonies.  The Navigation Acts.  Which stated that all trade to and from America had to be on English ships.  And all trade had to go through an English port.  Where the ships were unloaded and the cargoes inspected.  And taxed.  Then they could reload their cargoes and continue on their journey.  All tenets of mercantilism.  This kept the lower-priced Dutch goods out of America.  And prevented the Americans from selling to the Dutch directly for higher prices.  So it shut down the Dutch from all American trade (except for a prosperous black market). And brought in some lucrative tax revenue for England.  While extending shipping times and increasing prices for the Americans.  Which they were not happy about in the least.

The English East India Company (the Company) was similar in structure to the VOC.  And soon made the Indian subcontinent a wholly owned subsidiary of the Company.  But it wasn’t cheap.  Waging war was costly.  As was managing those conquered territories (something the Romans had also learned).  Then a famine in Bengal in 1770 claimed about one-third of the local population.  Making laborers more scarce.  And more expensive.  All at a time when the sales of their imported goods were falling in Europe.  There were warehouses full of unsold Chinese tea that they couldn’t sell.  Making for a bad time for the Company.

Higher costs and lower sales spelled trouble.  And that’s what the Company had a lot of.  Trouble.  So the Company turned to Parliament for help.  And Parliament helped.  By allowing the Company to ship their tea directly to America without having to unload it in a British port.  Or pay a duty on that tea.  Which would greatly reduce their costs.  And allow them to sell it in America cheaper than they did before.  So Parliament passed the Tea Act in 1773.  Making life better for all involved.  But the Tea Act left in place another tax in the previous Townshend Acts.  Which was a bigger problem than getting cheaper tea (which they could get on the black market from the Dutch).  These taxes on the British subjects in America were unconstitutional.  Because there were no Americans sitting in Parliament.  This was taxation without representation.  A much bigger issue than cheap tea.  So they threw that first ‘cheap’ tea into Boston Harbor.  The Boston Tea Party being a major step towards war with the mother country.  And American independence.

Britain became the Lone Superpower after Abandoning their Protectionist Mercantile Policies and Adopting Free Trade

The American Revolutionary War was not the only headache the British got from their mercantile policies.  Part of those policies required maintaining a positive balance of trade.  So there was always a net inflow of bullion into the mother country.  That’s why raw materials shipped into Britain from America.  And finished goods shipped out to America.  Finished goods are more valuable than raw materials.  So the Americans had to make up for this balance of trade in bullion.  Resulting in a net inflow of bullion into the mother country.  Very simple.  As long as you can manufacture higher valued goods that other people want to buy.

And this is the problem they ran into with the Chinese.  For though the British wanted those Chinese spices, silk and porcelain the Chinese didn’t want anything the British manufactured.  Which meant Britain had to pay for those luxuries with bullion.  Including all that Chinese tea they craved.  Which resulted in a net outflow of bullion to the Chinese.  The British fixed this problem by finding the one thing that the Chinese people wanted.  Indian opium.  Grown in Bengal.  Of course, this turned a lot of Chinese into opium addicts.  The addiction problem was so bad that the Chinese banned opium.  But the British were able to smuggle it in.  They sold so much of it that they used the proceeds to buy their tea.  Thus reversing the bullion flow.

Not the finest hour in the British Empire.  The Chinese and the British would go on to fight a couple of wars over this opium trade.  The Opium Wars.  Which the British did all right in.  Even gaining Hong Kong in the bargain.  They didn’t build any long-lasting love with the Chinese people.  But Hong Kong turned out pretty nice under the British.  Especially after they abandoned their protectionist mercantile policies and adopted free trade.  Which made the British the lone superpower for about a century as they modernized the world by leading the way in the Industrial Revolution.  And the Chinese in Hong Kong were very happy indeed to be there when the communists took over the mainland.  And caused a famine or two.  For they lived comfortably.  In a state founded on mercantilism.  That achieved its greatest prosperity during the free trade of capitalism that followed Britain’s mercantile ways.

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Anchor/Passport Babies proof that People wished Britain/America had conquered the World

Posted by PITHOCRATES - February 8th, 2014

Week in Review

The problem with a generous welfare state and porous borders is that they attract a lot of foreign-born people to your country to cash in on those generous welfare benefits.  Some even make the journey while pregnant so their child is born in the country with the generous welfare benefits.  And not the cruel, cold-hearted benefit-free country they are escaping.  Giving them an ‘anchor’ in the country they’d much rather live in than the country they don’t want to live in.  Their native country.

The United States has a porous border with Mexico.  And many Mexicans give birth in the United States while in the country illegally just so their child doesn’t have to grow up in Mexico.  Which when you think about is a statement on how these Mexicans feel about the ‘imperial’ United States.  They must really hate them for not taking the rest of Mexico when they won the Mexican War.  Had the Americans done so there would be no need for anchor babies.  For they would already be enjoying American citizenship south of the Rio Grande.  Based on the number of Mexicans entering America illegally, at least.

The United States isn’t the only country people want to live in.  Canada, too, is a beautiful country with a generous welfare state.  The winters are a little colder, though.  But that doesn’t stop people from trying to become Canadian citizens with anchor babies.  Only they call them ‘passport babies’ in Canada (see Canadian citizenship bill to be tabled Thursday by Susana Mas posted 2/2/2014 on CBC News).

Alexander said the proposed changes to the Citizenship Act would also aim to reduce the current backlog of applications and change the conditions for eligibility.

The government is also considering changes to tackle the problem of so-called “birth tourism” or “passport babies,” but Alexander told CBC News they would not be included in this bill.

Americans and Canadians aren’t better people.  They just live in countries that allow their people to be better.  Which is the problem in Mexico.  Not the people.  As the Americas were colonized Britain was further along in representative government than Spain.  Free market capitalism replaced mercantilism quicker in British America than it did in Spanish America.  And democratic institutions were more developed in British America than they were in Spanish America.  Such that the foundation for representative government, free market capitalism and democracy was more robust in British American than it was in Spanish America.

Because of this when the Americans gained their independence great peace and prosperity followed.  A first following a civil war.  Allowing America and Canada (later granted their independence from the British Empire) to be lands of opportunity.  With strong human rights.  Ironically, in large part to the School of Salamanca.  One of the greatest gifts Spain gave to the world.  Which is why people want to have their babies born in these countries.  So they can be as great as they want to be.  Because only representative government, free market capitalism and democracy can make this possible.  At least based on history.

But you can’t have people entering your country unchecked.  Especially if they’re coming for the benefits.  And your country has annual deficits and a growing national debt.  For adding more people to the benefits roll when you can’t afford it will transform the country from that land of opportunity people want to come to into the country they are fleeing.  Countries with high spending and devalued currencies that lead to black markets and lawlessness.  The very things people want to get away from by having their babies in the United States and Canada.

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Constantinople, Byzantine Empire, Ottoman Empire, the New World, Tobacco and Slavery

Posted by PITHOCRATES - July 16th, 2013

History 101

With the Fall of Constantinople to the Ottomans in 1453 Islam spread Unchecked into Christian Lands

Constantine the Great moved the capital of the Roman Empire to a place on the Bosporus.  Where the ancient city of Byzantium once sat.  Where Asia met Europe.  Where the Mediterranean Sea met the Black Sea.  And the great rivers beyond.  The Danube.  Dnieper.  And the Don.  Constantine named his new city Constantinople.  And made it a jewel.  With great Christian churches.  To celebrate his new conversion to Christianity.  Which started following the Battle of the Milvian Bridge.  Where on the eve of battle Constantine and his soldiers had a vision of the Christian God.  Promising them victory if they placed His symbol on their shields.  Which they did.  And they won.

Constantine spared no expense in his new city.  Which was easy to do because it was a very wealthy city.  For the greatest trade routes went through the Bosporus.  Which is why when the western half of the Roman Empire fell the eastern half, or the Byzantine Empire, carried on for another thousand years.  Give or take.  As it thrived on that trade pouring through it.  Especially from the Far East.  Along the Silk Road.  Which peaked during the Byzantine Empire.  Bringing the exotic goods of the Far East west.  From silk to porcelain to spices.  Which flowed unhindered to Christian Europe while the Christians still controlled the Byzantine Empire.

But all good things must come to an end.  Thanks to the Seljuk Turks.  And the rise of the Ottoman Empire.  Islam had united the Arab people.  And with the fall of Constantinople to the Ottomans in 1453 Islam spread unchecked into Christian lands.  Up through the Balkans into southern Europe.  Lands they would contest for time and again.  Making for some bitter Christian-Muslim animosity that continues into modern times.  But more crucially at the time was the loss of control over that trade from the Far East.  Making those goods not as reasonably priced as they once were.  Which proved to be quite the problem.  As the European Christians had grown quite fond of them.  Luckily for them, they could do something about that.  Thanks to all of those wars they fought with the Muslims.  The Crusades.  Which brought back a lot of Greek books of science that were collecting dust in some of the old great Greek cities all around the Mediterranean.  Founded during the Hellenistic period.  Which came before the Roman Empire.  Thanks to a fellow by the name of Alexander the Great.  Who spread Greek learning throughout the known world after he conquered it.

Christopher Columbus sailed West to establish Far East Trade without going through Muslim-Controlled Constantinople

From those books the Europeans were able to become better sailors.  On ships that could catch the wind and navigate their way great distances.  Portugal and Spain led the way.  Prince Henry (1394-1460), the Navigator, trained navigators in Portugal.  His students pushed further and further down the African coast until Bartholomeu Dias rounded the Cape of Good Hope (1486).  Vasco de Gama would round the Cape of Good Hope and sail up the eastern coast of Africa all the way to India (1498).  Pedro Álvares Cabral was heading south to round the Cape of Good Hope in (1500).  Swung out too far west.  And ran into Brazil in South America.

Spain then financed the voyages of Christopher Columbus.  Who had read that the earth was round.  And wanted to prove it.  As well as spread Christianity.  Columbus wanted to find a way west to the Far East.  Sure it was just beyond the horizon of the Atlantic Ocean.  After a voyage longer than his near mutinous crew expected they finally landed on San Salvador Island in the Bahamas (1492).  Thinking he found an ocean passage to the Far East.  Around the Muslim controlled land route.  He would later understand that he had found the New World.  Which we would be calling Columbia.  Had his dispatches beat a Florentine passenger’s on a Portuguese ship who wrote about what he saw.  Amerigo Vespucci.  Which is why there is not a North Columbia, a Central Columbia and a South Columbia.  Instead, there is a North America, a Central America and a South America.

With Columbus’ success Spain financed others.  Vasco Núñez Balboa.  Who crossed the Isthmus of Panama and reached the Pacific Ocean (1513).  Ferdinand Magellan.  Who sailed around South America through the Straits of Magellan and into the Pacific Ocean.  Sailing on to the Far East.  And back home.  Being the first to circumnavigate the globe (1519-1522).  Hernán Cortés.  Who conquered the brutal Aztec regime in Mexico (1521).  Eventually the Spanish would bring great riches of gold and silver back to the Old World.  Meanwhile France financed Jacques Cartier in his attempt to find a Northwest Passage to the Pacific.  Who sailed up the St. Lawrence River to Montreal (1534).  Then Samuel de Champlain founded Quebec (1608).  Where they established a lucrative fur trade with the native Indians.

Cultivating Tobacco took Large Tracts of Farmland which required more Laborers that they had in the Colonies

Queen Elizabeth of England financed Walter Raleigh.  Who explored the coast of North America (1584).  Looking for a place to settle a colony.  On a subsequent voyage he brought 100 settlers with him.  And settled a colony at Roanoke, North Carolina (1585).  Which became the Lost Colony of Roanoke (1591).  The Virginia Company of London, a joint-stock company, would have better luck.  They raised financing by selling stock shares to investors who would share in any profits of the colony.  Christopher Newport led a voyage that established the first permanent English settlement in the New World.  At Jamestown (1607).

Though the Americas were not the Far East it was a vast landmass with inexhaustible resources.  And endless tracts of fertile soil.  The possibilities were endless.  The marriage of John Rolfe to Pocahontas (1614) provided an uneasy peace between the settlers and their Indian neighbors.  Then Rolfe figured out how to cure tobacco (1612).  Something the English began smoking after Columbus observed the Cubans sticking burning rolls of tobacco in a nostril.  The English refined smoking with a pipe.  And they really enjoyed it.  Importing vast quantities from the Spanish colonies in America.  Thanks to Rolfe, though, the English could produce their own tobacco.  Once they worked out a few problems.

Cultivating tobacco took large tracts of farmland.  But to put large tracts of farmland into production you needed laborers.  And in 1612 Virginia there just weren’t a lot of colonists living there yet.  The demand for labor far outstripped the supply.  So they tried to satisfy that demand with indentured servants.  Preferably from Europe.  Even criminals from English jails.  As well as from Africa.  Who worked in bondage during their indentures.  Then went free.  Until around the 1660s.  When things changed.  Starting in the southern colonies.  Where slavery became hereditary.  For Africans, at least.  Like it was in the Old World.  Where peasants and serfs were bonded to the land.  Once a slave.  Always a slave.  And if your parent was a slave so were you.  Like it was in ancient Athens.  At the end of the Western Roman Empire.  And in the Muslim world.

Muslim didn’t only enslave Christians.  They also established slave markets with African slave traders.  Who opened their markets to the Portuguese, the Spanish, the French and the English.  To help them meet that soaring demand for labor during the early days of the New World colonies.  When there were so few colonists.  Who found their way to the New World in the first place because of the Muslim conquest of Constantinople.  Which sent the Europeans to the seas to find a western way to the Far East.  And when they did they discovered the New World.  Creating the largest market ever for African slaves.  And the greatest convulsions in the New World as they struggled to end slavery in the Americas.

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Iron, Steel, the Steam Engine, Railroads, the Bessemer Process, Andrew Carnegie and the Lucy Furnace

Posted by PITHOCRATES - November 21st, 2012

(Originally published December 14, 2011)

With the Steam Engine we could Build Factories Anywhere and Connect them by Railroads

Iron has been around for a long time.  The Romans used it.  And so did the British centuries later.  They kicked off the Industrial Revolution with iron.  And ended it with steel.  Which was nothing to sneeze at.  For the transition from iron to steel changed the world.  And the United States.  For it was steel that made the United States the dominant economy in the world.

The Romans mined coal in England and Wales.  Used it as a fuel for ovens to dry grain.  And for smelting iron ore.  After the Western Roman Empire collapsed, so did the need for coal.  But it came back.  And the demand was greater than ever.  Finding coal, though, required deeper holes.  Below the water table.  And holes below the water table tended to fill up with water.  To get to the coal, then, you had to pump out the water.  They tried different methods.  But the one that really did the trick was James Watt’s steam engine attached to a pump.

The steam engine was a game changer.  For the first time man could make energy anywhere he wanted.  He didn’t have to find running water to turn a waterwheel.  Depend on the winds.  Or animal power.  With the steam engine he could build a factory anywhere.  And connect these factories together with iron tracks.  On which a steam-powered locomotive could travel.  Ironically, the steam engine burned the very thing James Watt designed it to help mine.  Coal.

Andrew Carnegie made Steel so Inexpensive and Plentiful that he Built America

Iron was strong.  But steel was stronger.  And was the metal of choice.  Unfortunately it was more difficult to make.  So there wasn’t a lot of it around.  Making it expensive.  Unlike iron.  Which was easier to make.  You heated up (smelted) iron ore to burn off the stuff that wasn’t iron from the ore.  Giving you pig iron.  Named for the resulting shape at the end of the smelting process.  When the molten iron was poured into a mold.  There was a line down the center where the molten metal flowed.  And then branched off to fill up ingots.  When it cooled it looked like piglets suckling their mother.  Hence pig iron.

Pig iron had a high carbon content which made it brittle and unusable.  Further processing reduced the carbon content and produced wrought iron.  Which was usable.  And the dominate metal we used until steel.  But to get to steel we needed a better way of removing the residual carbon from the iron ore smelting process.  Something Henry Bessemer discovered.  Which we know as the Bessemer process.  Bessemer mass-produced steel in England by removing the impurities from pig iron by oxidizing them.  And he did this by blowing air through the molten iron.

Andrew Carnegie became a telegraph operator at Pennsylvania Railroad Company.  He excelled, moved up through the company and learned the railroad business.  He used his connections to invest in railroad related industries.  Iron.  Bridges.  And Rails.  He became rich.  He formed a bridge company.  And an ironworks.  Traveling in Europe he saw the Bessemer process.  Impressed, he took that technology and created the Lucy furnace.  Named after his wife.  And changed the world.  His passion to constantly reduce costs led him to vertical integration.  Owning and controlling the supply of raw materials that fed his industries.  He made steel so inexpensive and plentiful that he built America.  Railroads, bridges and skyscrapers exploded across America.  Cities and industries connected by steel tracks.  On which steam locomotives traveled.  Fueled by coal.  And transporting coal.  As well as other raw materials.  Including the finished goods they made.  Making America the new industrial and economic superpower in the world.

Knowing the Market Price of Steel Carnegie reduced his Costs of Production to sell his Steel below that Price

Andrew Carnegie became a rich man because of capitalism.  He lived during great times.  When entrepreneurs could create and produce with minimal government interference.  Which is why the United States became the dominant industrial and economic superpower.

The market set the price of steel.  Not a government bureaucrat.  This is key in capitalism.  Carnegie didn’t count labor inputs to determine the price of his steel.  No.  Instead, knowing the market price of steel he did everything in his powers to reduce his costs of production so he could sell his steel below that price.  Giving steel users less expensive steel.  Which was good for steel users.  As well as everyone else.  But he did this while still making great profits.  Everyone was a winner.  Except those who sold steel at higher prices who could no longer compete.

Carnegie spent part of his life accumulating great wealth.  And he spent the latter part of his life giving that wealth away.  He was one of the great philanthropists of all time.  Thanks to capitalism.  The entrepreneurial spirit.  And the American dream.  Which is individual liberty.  That freedom to create and produce.  Like Carnegie did.  Just as entrepreneurs everywhere have been during since we allowed them to profit from risk taking.

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Charter Schools outperform Public Schools in America and Britain

Posted by PITHOCRATES - July 8th, 2012

Week in Review

Public education today is more about politics than education.  Which is why charter schools often outperform public schools.  Because the charter schools focus on education.  While the public schools focus on politics (see A 20-year lesson posted 7/7/2012 on The Economist).

FOR decades too many educationalists have succumbed to the tyranny of low expectations, at least when it comes to those at the bottom of the heap. The assumption has been that the poor, often black, children living in some of the world’s biggest and richest cities such as New York, Los Angeles and London face too many challenges to learn. There was little hope that school could make any difference to their future unless the problem of poverty could first be “solved”, which it couldn’t.

Such attitudes consigned whole generations to the scrapheap. But 20 years ago, in St Paul, Minnesota, the first of America’s charter schools started a revolution. There are now 5,600 of them. They are publicly funded, but largely independent of the local educational bureaucracies and the teachers’ unions that live in unhealthy symbiosis with them.

Charter schools are controversial, for three reasons. They represent an “experiment” or “privatisation”. They largely bypass the unions. And their results are mixed. In some states—Arkansas, Colorado, Illinois, Louisiana and Missouri—the results of charter pupils in maths and English are significantly better than those of pupils in traditional public schools. In others—Arizona and Ohio—they have done badly.

Yet the virtue of experiments is that you can learn from them; and it is now becoming clear how and where charter schools work best.  Poor pupils, those in urban environments and English-language learners fare better in charters (see article). In states that monitor them carefully and close down failing schools quickly, they work best. And one great advantage is that partly because most are free of union control, they can be closed down more easily if they are failing…

It is pretty clear now that giving schools independence—so long as it is done in the right way, with the right monitoring, regulation and safeguards from the state—works. Yet it remains politically difficult to implement. That is why it needs a strong push from national governments. Britain is giving school independence the shove it needs. In America, artificial limits on the number of charter schools must be ended, and they must get the same levels of funding as other schools.

It remains politically difficult to implement because public education has two goals.  Generate union dues that can fund the Democrat Party.  And to produce Democrat voters.  The proof of the latter is that the youth vote goes to the Democrats.  There’s a reason for that.  And it’s the same reason why school kids hold picket signs with their striking teachers.  These kids don’t understand life, politics or economics yet.  They only know what their teachers tell them.  Who are not exactly unbiased when it comes to their politics.  Or their salary and benefit packages.  Which they put before their students.  At least, based on the success of the charter schools over the public schools.

There are a lot of great teachers in the public school system.  But they aren’t all great.  And it’s all but impossible to get rid of the bad teachers.  Or to close the bad schools.  And it’s impossible to pull the politics out of the educational curriculum.  Kids today can barely name the Founding Fathers or explain what republican government is but they know everything about global warming.  And everything bad America ever did as a nation.  Which just doesn’t prepare students today for the high-tech economy.  

Even the liberal elite admit public education is a failure by the fact that most of them have their kids in private school.  And these are the people responsible for the failure of public education.  They implemented their progressive views.  Because they knew better than we did.  Knew what was best for our kids.  Yet when it comes to their own kids they don’t want anything to do with the train wreck they made of public education.  If there was ever a vote of no-confidence for public education this is it.  They don’t like.  Want nothing to do with it.  But it’s not only okay for our kids but it’s necessary to rescue our kids from our bad parenting.  Because if the public schools weren’t there to make Democrat voters how can they trust parents to do that most important job?

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FT120: “Give a man a fish and he can eat for a day; give him a job and he can have an obesity problem.” -Old Pithy

Posted by PITHOCRATES - June 1st, 2012

Fundamental Truth

In Warfare Starvation and Famine are the most Potent of Weapons

Starvation and famine has plagued mankind since the dawn of time.  It was the driving force in evolution.  Those who took control of their food supply lived.  Those who didn’t disappeared from the evolutionary path.  Like Neanderthal.  And those who came before him.  Our earliest civilizations massed their populations to farm.  And the masses lived in cities.  Setting down roots and saying goodbye to their hunting and gathering ways.  In the Wei River valley.  In the Indus River valley.  The valleys of the Euphrates and Tigris.  In the Nile River valley.  Where modern life took root.  Produced our first food surpluses.  And gave birth to urban life.  And the middle class.

The rise of the middle class allowed civilization to flourish.  For every person that didn’t have to produce food could do something else.  Build better tools.  Create a better government.  Create art.  In general, think about other things.  Those other things that made humans different.  By giving us a more interesting life.  And more sophisticated ways to express ourselves.

But this growth was a double-edged sword.  For large urban populations that made life more enjoyable was also a great threat to the food supply.  A cool and wet summer could destroy crops.  Poor food storage could spoil the food surplus.  A war could see an enemy purposely destroy your crops and your food surplus.  Causing famine.  Where half or your city population could easily die before the next harvest.  Or more.  Especially if the famine resulted from an act of war.   As an act of genocide.  To clear people off land that others want to use for their own food needs.  Which was Hitler’s plan in Russia.  To take the food from the Ukraine.  Kill the indigenous population.  And replace them with Nazis.  Thus creating more living space for the Third Reich.  Or Lebensraum.    Because in warfare starvation and famine are the most potent of weapons.

History has shown that the most Food-Abundant Countries are the most Capitalistic

England led the way in agricultural advances.  Increasing crop yields such that small tracts of land could support greater populations.  As well as produce such huge food surpluses that they had food to export.  As the British Empire spread across the globe so did their advanced agricultural ways.  During the 19th century starvation and famine were becoming rarer in the technologically advanced West.  The 19th century Irish Potato Famine reduced Ireland’s population by up to 25%.  A tragedy of epic proportions.  But it was an exception to the rule.  For food was growing so abundant in the advanced Western World that rarely did people go hungry.  Or feared famine.  And when mechanization and chemistry hit the farm our crop yields exploded.

During the Twentieth Century the Western World produced so much food that food prices plummeted.  Causing the Great Depression.  There was so much food available that farmers couldn’t sell their food at a high enough price to service the debt that they incurred mechanizing their farms.  But not everyone was producing bumper crops in the Twentieth Century.  Both the Soviet Union and the People’s Republic of China set records for death by famine.  As they shunned the ways of the West.  And the state took over their agricultural sectors.  States that were so inept at good farming practices and things economic that crop yields plummeted.  North Korea to this day can’t even grow enough food for her own people.  And has recurring famines.  Because they hold on to the communist ways of Stalin and Mao.  While the Russians and the Chinese have long abandoned them. 

History has shown that the most food-abundant countries are the most capitalistic.  Countries whose agricultural sectors use the latest in technology.  And/or have a rich and vibrant economy that can buy all the food they need if they can’t produce their own.  Like Hong Kong.  Basically a rock off the Chinese mainland.  It has little arable land.  Few natural resources.  But what it does have is low taxation and free trade.  And laissez-faire capitalism.  The Chinese lost Hong Kong to the British Empire (who have since given it back).  And the British used laissez-faire capitalism to make Hong Kong the gem it is today.  Where people are free and in want of little.  And in this island nation that can’t grow enough food to feed their population famine is unheard of.  Why?  Because they have the wealth to trade for all the food they desire.  In fact, while Mao gave the people in the People’s Republic of China famine Hong Kong were doing just fine.  Because they were wealthy and could trade for what they needed.  And they had the Royal Navy protecting her.

In America our Food Supplies are so Abundant and so Cheap that Poor People are becoming Obese

Poverty is the biggest killer.  Famine is prevalent in poor countries.  Like Haiti.  North Korea.  And sub-Saharan Africa.  People suffer in these countries unlike they do in the West.  Despite the amount of aid the West pours into them.  And it’s not because Western nations were blessed with natural resources.  Hong Kong doesn’t have anything other than laissez-faire capitalism.  Protected by the Rule of Law and minimal government interference into the private sector economy.  The very things that are missing from Haiti, North Korea and sub-Saharan Africa.  Where corruption rules supreme.  There is little regard for human rights.  Or property rights.  And no one can protect their people from the abuses of government.  Or from warring neighbors.  Like the Royal Navy protected Hong Kong.  And pretty much the rest of the world during the 19th century.  Just like America’s military might made the world safe for capitalism in the Twentieth Century.

Third world nations are not a victim of first world nations.  They are a victim of themselves.  Where corrupt rulers collect Western aid and live well while their people suffer.  Especially the nations that eschew capitalism.  And embrace socialism.  Like the Soviet Union did.  Like the People’s Republic of China did (the current Chinese regime is enjoying economic growth by allowing some capitalism into their still communist country).  And like North Korea still does.  These socialist utopias were a living hell for their people.  Where they live in fear of their government.  And of famine.

Meanwhile in the Western capitalist nations what do they suffer from?  Especially the poor people in America?  Obesity.  In New York they’re passing laws restricting the size of sugary beverages because they are dangerous to your health.  While they pass out free condoms and birth control as sex is far less risky behavior than a delicious carbonated beverage.  Apparently.  Yes, in America our food supplies are so abundant and so cheap that poor people are becoming obese.  Because capitalism has made those food supplies abundant and cheap.  And capitalism gave people jobs where they could afford to buy so much food that they can give themselves an obesity problem.  A problem they just don’t have in Haiti, North Korea or sub-Saharan Africa.  Because they can’t grow enough food.  Or earn enough money to buy enough food.  For they don’t have an environment conducive to creating jobs.  Which is why these nations are still impoverished and/or suffering famine despite all the aid the West gives them.  Food aid will run out.  And then they’ll just be starving once again.  If they have jobs, though, they’ll be able to buy food whenever they’re hungry.  Because it’s like that old saying.  Give a man a fish and he can eat for a day; give him a job and he can have an obesity problem.

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Vengeance, Loyalists, Patriots, French, British, Indians, Frontier, Ohio Country, Massacres, Washington and Westward Expansion

Posted by PITHOCRATES - May 24th, 2012

Politics 101

The American Colonists kept moving into the Interior of the Country into Indian Lands

History has shown civil wars to be the bloodiest of wars.  For when people you know and grew up with kill your friends and family, well, things get a little ugly.  They escalate.  And there are a lot of opportunities for revenge when people in towns and villages join different sides in the war.   When friends and family fall in combat people retaliate by attacking the families left behind.  Those who didn’t take up arms.  The women and children.  They destroy their crops.  Burn their homes.  Force them to flee for their lives.  Then these acts are met with new acts of vengeance.  They don’t force family members to flee.  They kill them.  Then these acts are met with new acts of vengeance.  Instead of killing they rape, torture and mutilate their bodies.

When the American Revolutionary War broke out it tore families and towns apart.  People remaining loyal to the Crown became Loyalists.  Those rebelling became Patriots.  It was not uncommon to find Loyalist and Patriot in the same family.  And they hated each other.  That hatred grew as the people they knew and loved suffered the horrors of war.  Hardening them into merciless killers.  The people you were fighting were not soldiers.  They were fighting the lowest of traitors.  So there was no need for honor.   The people they were killing were no better than feral animals threatening their peaceful lives.  They deserved to die.  And worse.  This was civil war.  This was part of the American Revolutionary War.  And it got worse.

During the French and Indian War (aka the Seven Years’ War) the French allied with the various Indian tribes against their long-time foe.  The British.  The Indians fought on the French side because it was the lesser of two evils.  The French were sticking to the rivers and had small colonies.  The British had larger colonies.  And they kept moving into the interior of the country.  Which the Indians wanted to stop.  And in trying they made the war on the frontier a bloody one.  And very cruel.  The word used in official correspondence of the time used to describe them was savages.  For the unspeakable cruelties they did to white men, women and children.  They did not fight European style with bands and grand formations on the field of battle.  They made people suffer and live in fear.  The way they have always fought.

The British, the Loyalists and their Indian Allies advanced out of the Frontier into the River Valleys

Well, there was another war on the continent.  This one between the British and the American colonists.  Both sides tried to get the Indians to fight on their side.  Some were friendly with the Americans.  Some remained neutral.  But a lot fought with the British because they saw them as the lesser of two evils.  The American colonists were expanding further into the interior of the country.  In violation of their British treaties that were to keep the Americans out of the Ohio country.  Something the British agreed to without consulting their American colonists.  Who had every intention of moving further west.  So once again the Indians made the war on the frontier a bloody one.  And very cruel. 

Not all the British were on board with this.  Edmund Burke denounced this policy.  As did William Pitt, Earl of Chatham.  Who said in the House of Lords, “What! to attribute the sacred sanction of God and nature to the massacres of the Indian scalping knife?  To the cannibal savage, torturing, murdering roasting and eating…Such horrible notions shock every precept of religion, divine or natural, and every generous feeling of humanity.”  Even the Americans had their reservations about using the Indians.  George Washington wrote to the Commissioners of Indian Affairs, “Gentlemen: You will perceive, by the inclosed Copy of a Resolve of Congress, that I am impowered to employ a body of four hundred Indians, if they can be procured upon proper terms.  Divesting them of the Savage customs exercised in their Wars against each other…”  Both sides were worried about using the unpredictable and uncontrollable Indians.  And for good reason.

The British had forts at Niagara, Detroit and Michilimackinac (on the northern tip of Michigan’s Lower Peninsula).  From these strongholds they controlled the Great Lakes and the frontier.  They, the Loyalists and their Indian allies advanced out of the frontier into the river valleys.  The Allegheny, the Susquehanna, the Mohawk, the Schoharie, the Monongahela.  Into the Ohio country.  And the frontier of New York.  Leaving a path of devastation in their wake.  Smoldering homes.  Ravished farms.  And a lot of dead.  The Loyalists and their Indian allies killing and torturing fleeing soldiers.  Prisoners.  Civilians.  And taking scalps.  There was a growing list of these massacres.  Wyoming.  Cherry Valley.  German Flats.  Blue Licks.  In the end these massacres did not help the British.  They just made the war more savage.  And turned anyone on the frontier who were neutral or leaning Loyalists into Patriots thirsting for vengeance.

George Washington was no Better than King George and Parliament in Restraining American Expansionist Ambition

The Americans couldn’t control their Indian allies any better than the British could.  They, too, were embarrassed by these savage acts that went counter to the rules of war and Christian teachings they were trying to adhere to.  But their embarrassments were short lived as the Americans had fewer Indian allies.  And, therefore, fewer atrocities.  For it was the Americans that were trying to expand into Indian hunting grounds.  And it was the British trying to restrain that expansion.  So more of them fought on the British side.  And thus the British had more of this blood on their hands.  Which only served to hurt their cause.

The opening and closing of the American Declaration of Independence are familiar to many people.  The stuff in the middle is not as well known.  Which is a laundry list of “repeated injuries and usurpations” committed by King George against the American people.  Including, “He has excited domestic insurrections amongst us, and has endeavored to bring on the inhabitants of our frontiers, the merciless Indian savages, whose known rule of warfare, is undistinguished destruction of all ages, sexes and conditions.”  This British Indian policy was one of the items that pushed the Americans past reconciliation with the British.  And into open rebellion.

Fast forward to the Washington administration of the new United States of America.  Washington saw America’s relations with the Indians as a matter of foreign policy.  He spent more time trying to negotiate with them then he did with the Europeans.  For America’s future was in the west.  He wanted American expansion.  That would coexist with sovereign Indian lands.  Hoping in time that these lands would become future states within the new and growing union.  And the Indians would assimilate into the American way of farming and manufacturing.  Giving up their hunting and gathering ways that require such great tracts of land.  But, alas, that was not to be.  For he was no better than King George and Parliament in restraining American expansionist ambition.  The individual states ignored the new federal treaties with the Indians and negotiated their own treaties.  Or simply moved onto their land. 

Rather ironic, really.  Washington fought with the British against the French and Indians to secure American westward expansion.  He fought in the American Revolutionary War against the British to secure American westward expansion.  And the first major failure as president of the United States was over American westward expansion.  The subsequent treatment of the Indians would become what he feared.  A policy of confiscation that he worried “would stain the character of the nation.”  Which it has.  For the conflicts on the frontier were as violent and vicious as they ever were.  Forcing the Americans to send in troops to once again subdue these hostilities.  And to protect the Americans living on or near the frontier.  Which put the Americans and the Indians on the path Washington so wanted to avoid.  War.  Instead of conciliation.  And assimilation. 

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Byzantine Empire, Bosporus, Silk Road, Dutch East India Company, English East India Company, Tea Act and Opium Wars

Posted by PITHOCRATES - May 15th, 2012

History 101

To encourage Risk Takers to Travel Halfway around the World Mercantile States granted Monopoly Charters

The modern world began because Europeans had a penchant for silk and spices.  Something they enjoyed during Roman times.  When the Romans ruled the world.  And the Mediterranean Sea was nothing more than a Roman lake.  But when the empire stopped conquering new lands and sending the spoils of war home they had to turn to other means to pay for the cost of empire.  Taxes.  To pay for the Roman government and their public spending.  And the Roman legions.  This excessive government spending led to the fall of the western half of the empire.  But the eastern half lived on for another 1,000 years or so.  Why?  Because the capital of the Byzantine Empire was Constantinople.  On the Bosporus.  Trade crossroads of the world.

This city was so rich everybody wanted to conquer it.  So they could have all those riches.  For everything that came along the Silk Road from China crossed into Europe at the Bosporus.  Soon Muslims fought Christians in the Holy lands.  Then more Christians came.  The Crusaders.  Those who didn’t die went back to Europe with some of those Chinese luxuries.  Spices.  Silk.  Porcelain.  Etc.  Sparking a renewed interest in these finer things in Europe.  Especially the spices.  For European cooking was horribly bland at the time.  The Ottoman Turks eventually took Constantinople.  Renamed it Istanbul.  And controlled that lucrative trade.  Making those much sought after Asian goods rather expensive in Europe.  Which they had no choice but to pay.  Because if you wanted those luxuries you had to go through Istanbul.  Until the Portuguese sailed around Africa and found a direct route to those cherished goods, that is.

It was the Commercial Revolution.  A new age of international trade.  A trade even more profitable than what the Ottoman Turks controlled.  Because big ocean-going vessels can carry more cargo than anything coming over land on the Silk Road.  And these new European maritime powers wanted that wealth.  And the power it would provide.  To encourage risk takers to get into those wooden ships and travel halfway around the world they granted monopoly charters.  The Dutch East India Company (VOC) was one of the largest.  And one of the wealthiest.  But this was not your typical company.  The VOC established overseas colonies.  It waged war.  Established treaties.  Even coined its own money.  Because of this thousands of VOC ships stuffed full of valuable cargoes sailed to Antwerp and Amsterdam, making the Dutch very wealthy.  And powerful.

The Tea Act allowed the Company to Ship their Tea Directly to America and exempted them from any Duties

Of course the Dutch weren’t the only ones doing this.  They had competition.  Portugal.  Spain.  France.  And England.  Who would bump into each other numerous times fighting for control of this trade.  And those colonies.  The English and the Dutch would fight 4 wars.  Which is how Dutch-founded Manhattan became part of the British Empire and, subsequently, one of America’s greatest cities.  The English East India Company gave the VOC a run for its money.  Parliament even passed legislation to give the English a monopoly on all trade with their American colonies.  The Navigation Acts.  Which stated that all trade to and from America had to be on English ships.  And all trade had to go through an English port.  Where the ships were unloaded and the cargoes inspected.  And taxed.  Then they could reload their cargoes and continue on their journey.  All tenets of mercantilism.  This kept the lower-priced Dutch goods out of America.  And prevented the Americans from selling to the Dutch directly for higher prices.  So it shut down the Dutch from all American trade (except for a prosperous black market). And brought in some lucrative tax revenue for England.  While extending shipping times and increasing prices for the Americans.  Which they were not happy about in the least.

The English East India Company (the Company) was similar in structure to the VOC.  And soon made the Indian subcontinent a wholly owned subsidiary of the Company.  But it wasn’t cheap.  Waging war was costly.  As was managing those conquered territories (something the Romans had also learned).  Then a famine in Bengal in 1770 claimed about one-third of the local population.  Making laborers more scarce.  And more expensive.  All at a time when the sales of their imported goods were falling in Europe.  There were warehouses full of unsold Chinese tea that they couldn’t sell.  Making for a bad time for the Company.

Higher costs and lower sales spelled trouble.  And that’s what the Company had a lot of.  Trouble.  So the Company turned to Parliament for help.  And Parliament helped.  By allowing the Company to ship their tea directly to America without having to unload it in a British port.  Or pay a duty on that tea.  Which would greatly reduce their costs.  And allow them to sell it in America cheaper than they did before.  So Parliament passed the Tea Act in 1773.  Making life better for all involved.  But the Tea Act left in place another tax in the previous Townshend Acts.  Which was a bigger problem than getting cheaper tea (which they could get on the black market from the Dutch).  These taxes on the British subjects in America were unconstitutional.  Because there were no Americans sitting in Parliament.  This was taxation without representation.  A much bigger issue than cheap tea.  So they threw that first ‘cheap’ tea into Boston Harbor.  The Boston Tea Party being a major step towards war with the mother country.  And American independence.

Britain became the Lone Superpower after Abandoning their Protectionist Mercantile Policies and Adopting Free Trade

The American Revolutionary War was not the only headache the British got from their mercantile policies.  Part of those policies required maintaining a positive balance of trade.  So there was always a net inflow of bullion into the mother country.  That’s why raw materials shipped into Britain from America.  And finished goods shipped out to America.  Finished goods are more valuable than raw materials.  So the Americans had to make up for this balance of trade in bullion.  Resulting in a net inflow of bullion into the mother country.  Very simple.  As long as you can manufacture higher valued goods that other people want to buy.

And this is the problem they ran into with the Chinese.  For though the British wanted those Chinese spices, silk and porcelain the Chinese didn’t want anything the British manufactured.  Which meant Britain had to pay for those luxuries with bullion.  Including all that Chinese tea they craved.  Which resulted in a net outflow of bullion to the Chinese.  The British fixed this problem by finding the one thing that the Chinese people wanted.  Indian opium.  Grown in Bengal.  Of course, this turned a lot of Chinese into opium addicts.  The addiction problem was so bad that the Chinese banned opium.  But the British were able to smuggle it in.  They sold so much of it that they used the proceeds to buy their tea.  Thus reversing the bullion flow.

Not the finest hour in the British Empire.  The Chinese and the British would go on to fight a couple of wars over this opium trade.  The Opium Wars.  Which the British did all right in.  Even gaining Hong Kong in the bargain.  They didn’t build any long-lasting love with the Chinese people.  But Hong Kong turned out pretty nice under the British.  Especially after they abandoned their protectionist mercantile policies and adopted free trade.  Which made the British the lone superpower for about a century as they modernized the world by leading the way in the Industrial Revolution.  And the Chinese in Hong Kong were very happy indeed to be there when the communists took over the mainland.  And caused a famine or two.  For they lived comfortably.  In a state founded on mercantilism.  That achieved its greatest prosperity during the free trade of capitalism that followed Britain’s mercantile ways.

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Continental Army, Continental Congress, Inflation, Wage & Price Controls, Paper Money, Specie, IOUs, Impressment and Repudiation

Posted by PITHOCRATES - May 3rd, 2012

Politics 101

The Articles of Confederation made the United States of America a Confederacy of Sovereign States that had Little Power to Raise Revenue

By the time the Continental Army left Valley Forge they could hold their own against the British Army.  The British couldn’t push them around any longer.  They became so good that they fought the war to a standstill.  They came close to some major wins on the field of battle.  But close didn’t diminish the staying power of the British Army.  And they stayed.  On the battlefield.  And in their cities.  Dragging the conflict out for a total of 8 years.  And no matter what era of warfare you use to measure war-years 8 years of war is very costly.  Someone has to pay for it.  And, ultimately, it’s the people.  Either through taxation.  Or the loss of wealth through inflation.  Or simply the loss of wealth through the losing of your stuff.  And going without.  Because the army fighting for your liberty had no choice but to take what was yours.

This made the Revolutionary War unlike other wars.  For this war was about liberty.  Property rights.  The tyranny of a distant power.  And unjust taxation.  In other words this war was against all the things that made fighting a war possible.  You can’t really draft men to fight in a country that stands for liberty.  You just can’t confiscate the things you need to wage war from your people in a country built upon the principle of property rights.  You can’t declare martial law and suspend the rule of law on people you deem not to be patriotic enough in supporting the cause when you’re fighting the tyranny of a distant power that does.  (Even the Americans gave British soldiers a fair trial for the Boston Massacre).  And taxes?  The people that dumped tea into Boston Harbor over the principle of no taxation for revenue purposes without representation in Parliament was not going to be able to tax their people on a federal level.  Which proved a big obstacle in paying for the war to win their liberty.

The Articles of Confederation made the United States of America a confederacy of sovereign states.  And those sovereign states held the real power.  Virginia.  Massachusetts.  Pennsylvania.  New York.  And the other 9 sovereign states.  Not the United States of America.  That confederation that was waging war against the mightiest power in the world.  Which made raising funds difficult.  For without the power to levy taxes all they could do was ask.  Just like George Washington did all of the time.  Especially during that horrible winter at Valley Forge when his army was naked and starving.  He asked the Continental Congress for provisions.  And the Continental Congress asked the several states for their apportioned funds raised by their state legislatures.  Per the Articles of Confederation.  If they didn’t pay these funds timely or in full (or at all) they could ask again.  And that’s all they could do.  Which is why George Washington’s army suffered through that horrible winter.  Because the funds weren’t there to buy Washington the provisions his army needed.

Thanks to Inflation the Continental Army often had No Choice but to Take what they Needed from the People they were Fighting For 

The Americans never had enough money.  Which makes it amazing that they held off losing for 8 years.  Eight very costly years.  And won.  Especially considering how bad the economy was during the war.  Unable to tax or get sufficient loans from Europe they had little choice but to print money.  Which caused a whole lot of trouble.  For the more money they printed and put into circulation the more the value of their currency fell.  And soon a Continental was “not worth a Continental.”  And when the currency lost its value it took more of it to buy things.  Which led to price inflation.  The price of material and parts grew so high that it increased the cost of American manufactured muskets over the cost of imported French muskets.  Which they had to bring in through a British blockade.  Giving what should have been a cost advantage to the Americans.  Had it not been for the inflation.

To try and keep prices under control they implemented wage and price controls.  Which didn’t work.  The continued devaluation of the currency forced sellers to raise their prices to cover their rising costs.  Forcing them to sell below their costs would just put them out of business.  Voluntarily.  Or involuntarily.  Creating shortages in the market place.  Some offered lower prices for specie (gold and silver coins).  You can’t print hard money (specie).  So it held its value.  Unlike the paper money.  So a little of specie went a long way compared to paper money.  Of course, this didn’t help their wage and price controls.  It just made the paper more worthless.  And raised prices further.

There was yet another ugly side to this sordid business.  High prices and shortages created opportunity to profit handsomely.  There was speculation and market manipulation (hoarding, cornering the market, etc.) to take advantage of those highly priced items that were in scare supply.  Further raising prices for the people.  And compounding the problems of provisioning the army.  Which infuriated the low-paid soldiers.  Who the Continental Congress paid in that worthless paper money.  Angry mobs arose to address this profiteering.  As well as new laws and enforcement.  But they helped little.  The army often had no choice but to take what they needed from the people they were fighting for.  Either outright.  Or in exchange for IOUs.   Promises that the Continental Congress of the United States of America would make good on.  Just as soon as the several states paid their apportioned funds raised by their state legislatures. 

If you Violate the Ideals you’re Fighting for while Fighting for those Ideals it can Complicate the Peace

Fighting for an ideal makes war complicated.  If you’re just a tyrannical dictator looking to rape and pillage it makes things easier.  You don’t have to worry about liberty.  Property rights.  Debt.  Or taxes.  In the short term.  Or the long term.  Which made the American Revolutionary War a very difficult war to fight.  Because at the heart of the United States of America were those ideals.  To win this war to grant liberty to the people required taking their liberty away.  A little.  To win this war to guarantee property rights you had to violate property rights.  A little.  To win this war against tyranny you had to use excessive force against your people.  A little.  To win this war to establish taxation only with representation caused the destruction or personal wealth.  A lot.  Through impressment (taking things from the people).  Borrowing from foreign countries.  Or through inflation.

When the French joined the Americans in 1778 inflation was already out of control.  They printed twice as many Continentals in 1778 as they did in the last three years combined.  And there was serious discussion about doing the unthinkable.  Repudiation.  To simply escape the inflation by escaping the currency.  To retire the bills from circulation.  At a fraction of their value.  And that’s what they did in 1780.  Issuing new currency based on specie for the old currency at a 40 to one ratio.  The states were to tax their people to raise the funds for the new currency.  So the people took a huge short-term loss.  For a stable long-term future.  Based on specie.  That they couldn’t inflate.  This hard money would come from in large part the Spanish and the French.  The Spanish in Cuba buying American flour with specie.  And French aid.  As well as their army and navy spending their hard money in the American economy.

Wars are costly.  And they are rarely nice.  Trying to make them nice can make them last longer.  Which will make them more costly.  Of course, if you violate the ideals you’re fighting for while fighting for those ideals it can complicate the peace.  Luckily, for the Americans, they won their peace.  Their allies, the French, were not so lucky in their revolution.  The French Revolution.  Fought less than a decade after the American Revolution came to a close.  And unlike the Americans the French peace that followed was a bloody one.  That would eventually replace the king they executed with an emperor.  Napoleon Bonaparte.  Who the Americans helped bring to power in part due to the crushing debt King Louis XVI incurred supporting the Americans in their revolution.

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