The Russian Empire

Posted by PITHOCRATES - February 11th, 2014

History 101

The Europeans built Larger Ships and used Advanced Navigational Skills to sail from Europe to the Far East

The Anatolian peninsula (roughly the area of modern day Turkey) has long been a trade crossroads.  It’s where the Black Sea (and the rivers into Europe and Russia) met the Mediterranean Sea.  It’s where Europe met Asia.  Where East met West.  All important long-distant trade traveled through the Anatolian peninsula.  Right through the Bosporus.  The straits between East and West.

The Greeks, the Persians, the Romans and the Ottoman Turks all coveted this region.  When the Western Roman Empire fell the great Italian city-states rose.  They dominated the Mediterranean.  And the trade through the Bosporus.  Where the Silk Road for centuries brought riches from the Far East into Europe.  The Italian merchant banks controlled that trade.  Until the Eastern Roman Empire (the Byzantine Empire) fell to the Ottoman Turks.  Which, lucky for the Europeans, happened at the time of the Renaissance.  Bringing an end to the Middle Ages.  And ushering in the modern era.

It started in Italy.  And then spread into Europe.  A rebirth (hence Renaissance) of all that Greek learning.  Which shifted the trading center from the eastern Mediterranean to Europe.  Where the Europeans built larger ships and used advanced navigational skills to sail from Europe to the Far East.  Bypassing the Silk Road.  And the Ottoman Turks in the Anatolian peninsula.  Making the Europeans the new rich traders.  Knowledge and wealth created more ships for trade.  And advanced armies and navies.  Making the Europeans the masters of the world.

Peter the Great pulled Russia out of the Middle Ages by making it more European

While the Mediterranean and European nations were ushering in the modern world not all of Asia followed them.  Russia in particular remained in the Middle Ages.  A vast land full of disparate peoples.  Not a unique and singular Russian people.  Until Ivan the Terrible came along.  The Grand Prince of Moscow from 1533 to 1547.  Then Tsar of All the Russians.  Ivan the Terrible united Russia by conquering it.  But at a cost.  Continuous wars killed a lot of Russian people.  Which left a lot of farmland fallow.  Giving Russia a chronic problem they would have for centuries.  The struggle to feed themselves.

Tsar Peter the Great (1682 – 1725) modernized Russia.  To be a more modern country like those in Europe.  He even went to Europe incognito to learn as much as he could about advanced European ways.  And had Europeans help him pull Russia out of the Middle Ages.  He made his army to be like European armies.  Learned about shipbuilding.  And built a Russian navy.  Which was a problem as the only access to the sea Russia had was the Arctic Ocean via the White Sea.  Which meant, of course, war and conquest.  He fought the Swedes for access to the Baltic Sea.  And he fought the Ottoman Turks for access to the Black Sea.

The disparate people of Russia were not all that happy with his ideas or the money he spent.  So he brutally suppressed any discontent.  Peter built his navy.  And a new capital on the Baltic Sea.  Saint Petersburg.  A European cultural center.  And the Imperial capital of Russia.  He also attacked the Ottoman Empire.  And lost.  Losing his Black Sea ports.  But Russia would return to fight the Ottoman Turks.  Under Catherine the Great.

The Bolsheviks killed Tsar Nicholas and his Family and ushered in the Oppressive Soviet Union

Catherine the Great ruled during Russia’s Golden Age.  Continuing the work started by Peter the Great to modernize Russia.  Making Russia a great European power.  Through military conquest.  And diplomacy.  She was even an international mediator.  And established the League of Armed Neutrality to protect neutral shipping from British attacks during the American Revolutionary War.

Catherine pushed Russia’s borders out largely at the expense of the Ottoman Empire.  And the Polish–Lithuanian Commonwealth.  These conquests cost, though.  And she turned to the nobility to pay for them.  In return she supported the nobility.  But the wealth she got form the nobility came from the serfs (basically slave laborers) working their land.  Which took a lot of work to pay for her conquests.  Leading to a peasant uprising or two.  But serfdom would continue in Russia.  Tsar Alexander I advanced the status of Russia with his defeat of Napoleon.  They even called him the Savior of Europe.  But serfdom remained as the Industrial Revolution took off in Europe.  Halting the modernization of Russia.

Tsar Alexander II emancipated the serfs in 1861.  Ending the landed aristocracy’s monopoly of power.  Serfs left their lands.  And moved into the cities.  Selling their labor.  Industrializing Russia.  Still, their freedom favored the landed aristocracy.  Who were compensated for their serfs’ freedom with a tax paid by the freed serfs.  Which little improved the life of the freed serfs.  And did little to ease the revolutionary fervor long simmering in the Russian people.  Especially those outside the nobility.

When Tsar Nicholas II entered Russia into World War I things did not go well for Russia.  Military losses, food shortages, fuel shortages, inflation and striking factory workers made the nation ripe for revolution.  Tsar Nicholas went off to command the Russian Army personally.  Leaving his wife Alexandra to run the country in his absence.  Who turned to Grigori Rasputin for help.  Which didn’t help quell the revolutionary fervor simmering in the Russian people.  They didn’t like Rasputin.  Or the Tsar.  And made Tsar Nicholas the last emperor of the Russian Empire.  Which the Bolsheviks made permanent.  By killing Nicholas and his entire family.  Which ultimately ushered in the Soviet Union.  One of the most oppressive regimes of all time.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Trade, Colonization, South Africa and Apartheid

Posted by PITHOCRATES - December 10th, 2013

History 101

Alexander Spread the Advanced Greek Civilization from the Mediterranean to the Indus River Valley

The first civilizations grew up on the great rivers.  The Nile.  The Tigris and Euphrates.  The Indus.  And the Yangtze.  For the river was the source of life.  The flooding of its banks produced the rich black earth that gave us farming.  They helped us irrigate land further from the banks.  And they allowed the spread of civilizations.  For these rivers provided our first means of transporting people and cargo.  Allowing food and goods to travel between settlements.  This cross-pollination of settlements of different people and resources flowered into the great civilizations of the world.

The Chinese civilizations along the Yangtze grew in isolation from the rest of the world due to the geography at first.  Then, later, by choice.  The other three great civilizations came into contact with each other.  The Egyptians on the Nile spread east and made contact with the Sumerians of the Tigris and Euphrates.  Who were in contact with the Harappan of the Indus River valley.  These civilizations traded with each other.  And fought with each other.  As their civilizations flourished they attracted the attention of envious neighbors.  Who wanted what they had.  And conquered them.

Wars pushed boundaries back and forth.  Civilizations rose and fell.  One of the last great empires of the ancient world, the Persian Empire, bumped into a new rising power.  Athens.  Which was conquered by a Greek-trained king from the north in Macedonia.  Whose son, Alexander, went on to conquer the known world.  Spreading the advanced Greek civilization from the Mediterranean world to the Indus River valley.  Creating a Greek-speaking world steeped in science and philosophy.  Creating a greater Hellenistic civilization out of the lands Alexander conquered.  The shared Greek culture allowing an explosion of trade and commerce.

In Time the English and the Dutch would Bump Heads in South Africa

The Romans adopted Greek knowledge and used it for great engineering projects.  Roads, aqueducts, ships, weapons of war, etc.  Soon the Roman Empire displaced the Hellenistic civilization and spread even further.  Ironically, it was the cost of empire that began the fall of the Roman Empire.  High taxes to fund a huge army on the frontier and to pay for a massive bureaucratic state.  Including welfare programs.  The empire first collapsed in the West.  It lasted another 1,000 years in the East as the Byzantine Empire.  With its capital in Constantinople (modern day Istanbul, Turkey).  Named by the Roman Empire Constantine the Great.  Who helped turned the Roman Empire Christian.

Constantinople was the center of the world.  It was where East met West.  Where Europe met Asia.  All trade from the East went through Constantinople on its way to the West.  For the Silk Road passed through Constantinople.  Making it a very rich city.  As it controlled trade.  After the fall of the Western Roman Empire the great Italian city-states rose.  Venice, Milan, Florence, Genoa, Pisa, Siena, Lucca and Cremona.  With their merchant banking they controlled the Mediterranean trade.  Until the Muslims conquered Constantinople.  Which is when the center of economic power moved north to Europe.  Thanks to advances in navigation that allowed ships to sail around Africa to the East.  Bypassing the Muslim-held Constantinople.

It was the Age of Discovery.  And the great European powers discovered new lands full of valuable resources.  The Portuguese and the Spanish lead the way.  And were soon followed by the Dutch.  And the English.  These nations established colonies around the world.  And, in time, the English and the Dutch would bump heads in South Africa.  Where they discovered gold.  Leading to a century of conflict between the British Empire and the Dutch settlers.  Known as Boers.  During the Napoleonic Wars the British defeated the Boers in Cape Colony in 1806.  And officially took possession of the colony in 1814.  Then it was Britain’s turn to send settlers to the region.  As a prosperous colony at the southern tip of Africa would come in handy for the empire that controlled the trade routes with the most powerful navy in the world.

Mandela Languished in Jail in part because of his Being a Communist

The Boers resented British rule.  And they didn’t like their abolishing slavery.  So they moved north.  Establishing two Boer independent republics.  The discovery of diamonds and more gold would make the region the richest and most powerful in southern Africa.  There was only one problem.  They didn’t have the manpower.  Or an industrial base.  Which led to another wave of immigration.  Mostly from Britain.  Which soon outnumbered the Boers.  Tensions led to the two Boer Wars.  The second one being the longest, costliest and bloodiest war the British fought in the century following the Napoleonic Wars.  With the British ultimately winning the African territories from the Boers in 1902.

The contested areas were all absorbed into the British Empire in 1910 as the Union of South Africa.  And became independent of the British Empire in 1931.  As the foreign powers fought over the African lands they pushed aside the native blacks.  And segregated them.  In 1948 the National Party rose to power.  And began to make segregation law.  The official beginning of apartheid.  Where the whites lived in a first-world nation (which they built with their capital along with black labor).  While the blacks lived in third-world conditions.  The African National Congress (ANC) fought apartheid.  Which was good.  But the ANC was a communist organization during the height of the Cold War.  Which did not make it a friend of the Western World.  Nor was Nelson Mandela.  Who was a communist.  Mandela co-founded the militant wing of the ANC in 1961.  Umkhonto we Sizwe (MK).  Which planned a campaign of sabotage against the apartheid government.  Landing Mandela in jail for 27 years.

Mandela languished in jail in part because of his being a communist.  For they didn’t want what happened in Southern Rhodesia to happen in South Africa.  Alignment with the Soviet Union.  And bloody civil war.  This is what they feared if the ANC/MK rose to power under the charismatic Mandela.  Civil war in South Africa fueled by the Soviet Union to aid in their war with the West.  As it turned out, though, Mandela was more like Abraham Lincoln when he emerged from jail.  Who told his generals that once the American Civil War was over there was to be no reprisals or retaliation against the South.  For once the war was over they would move on together as Americans.  Both North and South.  Which made the peace that followed much easier on the South.  Allowing the nation to heal her wounds more quickly than if there had been a period of bloody purges and reprisals.  And this is the gift Mandela gave to South Africa.  Allowing the nation to move forward after apartheid without bloody purges or reprisals.  Which is why South Africa went on to become one of the BRICS (Brazil, Russia, India, China and South Africa) economies.  While another former member of the British Empire in Africa, Southern Rhodesia (today’s Zimbabwe), suffers corruption, poverty, human rights abuses and one of the lowest life expectancy in the world.  Because Mandela spoke of peace and reconciliation when released from prison.  Not vengeance.  Like they did in Zimbabwe.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The Calendar and Irrigation

Posted by PITHOCRATES - December 4th, 2013

Technology 101

(Originally published November 16th, 2011)

The Nile is a Sliver of Life-Sustaining Black Earth Carved through the Lifeless Red Earth of the Desert

The early Egyptians were a religious people.  They still are today.  Egypt is a special land.  A unique land.  Because the Nile River flows through it on its way to the Mediterranean Sea.

The Nile is the source of life.  For it was the Nile that allowed farming.  Because of fresh water.  And fertile soil.  Black earth.  The rich silt that the Nile washed down from on high.  Beyond the First Cataract.  All the way to its headwaters.  Where monsoons in the Ethiopian Plateau, around Lake Victoria and in the Ruwenzori mountains flowed into the Blue Nile and the White Nile.  That joined into the Nile and flowed down to the Mediterranean Sea.  Bringing with it the rich silt that flooded over the riverbanks.  And left behind some of the richest soil ever farmed.

The life from the Nile was a miracle.  A blessing for the Egyptians.  This sliver of life-sustaining black earth carved through the lifeless red earth of the desert.  So they prayed.  And they worshipped.  To placate the gods.  To keep the miracle of black earth returning harvest after harvest.  For when the gods favored them the flooding came.  On time.  And at just the right height.  But when the gods did not there was famine.

By Tracking a Regular Cycle of Natural Events they Knew When to Worship and What to Do in the Farming Cycle

If the gods favored them the flooding was predictable.  If Khnum favored them the First Cataract would bring on the floodwaters at the right time and in the right amount.  Thoth would foretell this in the form of white ibises returning from their southern migration.  A favorable omen of a good harvest.  Which began with the sowing.  The grain representing Osiris’ body.  A god killed by another god.  Seth.  Who embodied the lifeless red earth.  The new growth was the resurrection of Osiris.  At the harvest they praised Isis.  For the resurrection.  That was the harvest.

The Egyptians were a religious people.  Religious ceremonies and rituals occurred throughout the farming cycle.  It’s no surprise, then, that the Egyptians created one of the first calendars.  Which marked important religious ceremonies and rituals.  And the cycle of farming.

By being able to track this regular cycle of natural events they knew when to worship.  What to do in the farming cycle.  When to do it.  And they knew when something was wrong.  For one day the floods did not come.  The climate had changed.  And the water didn’t come to them from the river.  So they had to go to the water in the river.

When the Nile didn’t Flood when the Calendar said it Should we Created Irrigation

As agriculture developed so did our understanding of our environment.  And we developed a lot of this with our religious beliefs.  For our environment was the blessing of the gods.  And at times their curse.  But our observations grew.  As did our understanding.  We developed the calendar.  And when the Nile didn’t flood when the calendar said it should we created irrigation.  Expanding the lands under cultivation.  And grew even more food.  For even though the Nile didn’t flood the water and silt were still there.

Our initial religious beliefs may not have properly explained the flooding of the Nile.  But it was a first step in our critical thinking.  Trying to explain that which we didn’t understand.  We may have been wrong about the cause.  But we got a pretty good understanding of the seasons.  By studying our environment.  And learning how to change it to suit our needs.  And it’s this critical thinking that led the way to irrigation.  And, eventually, to the modern civilization.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Spain wants to tear up the Treaty of Utrecht and take back Gibraltar from Britain

Posted by PITHOCRATES - August 11th, 2013

Week in Review

8/14/2013 CORRECTION:  There were factual errors/omissions in this piece.  We apologize for them.  And we apologize to the good people of Spain if we have offended them.  But it should be noted that some of the corrections are from quotes pulled from the sourced Mirror article.  A British newspaper.

The point of the piece is a recurring theme in history.  There are rarely any innocents when it comes to international disputes.  That was the point of the French and the Spanish helping the Americans during the Revolutionary War.  They did this not for American interests but for their own interests.

We also will note that the world’s power center shifted from the Mediterranean to the great sea powers of Europe.  Because these great European powers advanced seafaring to the point that they were first to conquer the oceans.  Also, the man that discovered America (Christopher Columbus) was sailing for Spain.  During the time of the Age of Discovery.  Where Spain dominated that discovery.  And Spain was home to the School of Salamanca.  Where the seeds of the Renaissance and the Enlightenment were sown.  And they would bear their greatest fruit in the late 18th century.  Thanks to America’s Founding Fathers being students of the Enlightenment.  So Spain has a formidable place in world history.  One that we admire and greatly respect.

A reader from Madrid sent in a well-written and very respectful criticism.  We include it here in its entirety.

Dear Pithocrates, I have read your paper on Gibraltar which is rather accurate but there are some missing points which are very relevant to understand the roots of the issue. These points are as follows:

a) It is true that the Spanish captured Gibraltar from the moors in 1462, but you shouldn´t omit that the moors captured it previously from the visigotic kingdom of Spain in 711.

b) You state that “Gibraltar was captured in turn by the Royal Navy in 1704”, but you omit that it was in the context of a Spanish dynastic sucesion war and this capture was in the name of one of aspirants to the Spanish crown, supported by British and Dutchs.

c) The Treaty of Utrecht didn´t handed over the surrounding waters and the istmus where the airstrip lies. The istmus was a neutral zone wich was taken by the British in XIX century by asking quarantine land due an epidemy in Gibraltar. It doesn´t seem fair play. This is the key point for Spain since Gibraltar has no waters to drop blocks in and the airport is out of Gibraltar territory.

I fully agree that we can´t go back to the first wrong but your statement that Spain wants to tear up the treaty is far from reality.  In essence Spain wants the British to meet the treaty in full since is not an acceptable behave to throw concrete blocks in non British waters nor contaminate them with chopy bunkering practice,. If you study the history of Spain, you will learn that some part of it was outstanding, glorious and brilliant and some not, but ALWAYS we have been people of honour and we honoured the treaties we signed off.

Finally I believe that in XXI the gunboat policy is out of place, but in any case it is clear that Spain was not the first to put the navy in this conflict.

I would be very grateful if you share these lines with your readers in order to clarify the situation. Spaniards and British have had a long common history. We have been rivals for centuries and in the past we fought very often each other and sometimes were allies. We have in Gibraltar a common “heritage” and we should be intelligent enough not to make it a wedge but a hinge between us.

Best, regards,
[name withheld by Pithocrates to protect writer’s privacy]
Madrid (Spain)

PD: In addition there is a little geographical mistake in your text: none of the sides of Gibraltar is on the Atlantic ocean, both are in the Med (Mediterranean sea is considered eastward Tarifa).

——————————————————————————————————————————————————————————————————————

Do you know what you will find at the southern tip of Spain?  Britain.  That’s right.  Gibraltar belongs to Britain.  Something Spain isn’t all that happy about.  Kind of how Argentina isn’t all that happy about Britain being in the Falkland Islands.  And both Argentina and Spain try to make life difficult for the British living in these British possessions (see Gibraltar: Britain to send Navy warships to Mediterranean in show of force to Spain by James Lyons posted 8/9/2013 on the Mirror).

Britain is sending warships to Gibraltar after David Cameron failed in his attempt to end the diplomatic row with Spain…

The 10-vessel Med visit follows weeks of rising diplomatic tension as the Madrid government holds up traffic at the border in retaliation for Gibraltar’s efforts to stop Spanish trawlers plundering fish stocks…

The PM, in a phone call to his Spanish counterpart Mariano Rajoy, issued a coded warning of legal action over the border checks and the threat to impose a £43 crossing fee.

But the checks still happened today and the Spanish hit back by criticising the Gibraltar government for making an artificial reef to protect fish stocks.

Under the seas surrounding the Falkland Islands are oil and gas deposits.  In the waters around Gibraltar it’s fish stocks.  So there are economic reasons.  But what really irks Spain is that unlike the cold and windy Falkland Islands Gibraltar is a sunny vacation paradise.  And you don’t need a boat or a plane to get there from Spain.  All you have to do is drive there.  And cross an active runway.  Yes, the road through Gibraltar actually crosses an active runway.  Why, you may ask, doesn’t the road go around the runway?  Well, the thing is, Gibraltar is so narrow that one end of the runway ends at the waters of the Atlantic Ocean.  While the other ends at the water of the Mediterranean Sea.

Gibraltar is an outpost of Britishness at the mouth of the Mediterranean, and has been for 300 years.

The 2.3 square miles land mass, dominated by the 1,300-foot limestone Rock of Gibraltar, is one of the last remaining parts of the empire…

The 30,000 inhabitants of the British Overseas Territory cling to their UK roots.

Sterling currency, red post boxes, familiar British shops and banks and the use of the English language are all legacies of the Rock’s long association with Britain…

The results of several referendums in Gibraltar over the years, the most recent in 2002, have been overwhelmingly in favour of remaining linked to Britain.

So it’s only a small sliver of land.  And the people who live there are British.  And want to remain British.  As it is in the Falklands.  Referendum after referendum is always the same.  These British people want to remain British.  It makes one wonder what would happen to them if Spain and Argentina got their way.  Would they deport them?  Segregate them?  Or simply make them stop being British?

So how did it come to this?  How did a tip of Spain become British?

Captured from the Moors by the Spanish in 1462, Gibraltar was captured in turn by the Royal Navy in 1704.

Nine years later it was officially handed over to Britain in the Treaty of Utrecht, and it has remained in British hands ever since.

It is this treaty which is at the heart of Spain’s claim to the land.

The Rock was ceded to Britain “to be held and enjoyed absolutely, with all manner of right for ever, without any exception or impediment whatsoever”.

But successive Spanish governments have argued that this is an anachronism and that Spain’s territorial integrity justifies the return of Gibraltar to Spanish control.

Critics of Spain’s attitude towards Gibraltar have pointed out that it has its own city enclaves, Ceuta and Melilla, on the north African coast, bordering Morocco.

Despite repeated demands by Morocco that the cities should be returned to its territory, Spain refuses to do so.

Interestingly, the Spanish took the land from someone else.  The Moors.  So the British didn’t do anything the Spanish didn’t do.  They got the land by military conquest.  Then made it permanent by treaty.  A treaty they say now is silly to maintain.  Because Gibraltar is attached to the Spanish mainland and logically belongs to them.  While they themselves are holding on to lands that by their logic belong to Morocco.

The Spanish Empire once stretched throughout the world.  But it was overtaken by the British Empire.  Whose representative government and capitalism vaulted the British into the number one world power.  While the Spanish Empire declined the British Empire only grew stronger.  France, too, lost bits of her empire to the British.  Which is why the French aided the Americans in the American Revolutionary War.  And why the Spanish joined that conflict by allying themselves with the French against the British.  Neither of them cared about helping the Americans.  They went to war against the British when they were preoccupied with the Americans to reclaim their lost pieces of empire.  And hoped to limit the Americans’ expansion into North America by the treaty that would end the war.  A treaty that would undo the Treaty of Utrecht.  And allow further expansion of France and Spain into North America.

How far back do you go to right past wrongs?  Should Spain return their land to the Moors?  Should they take back Mexico and return it to the Aztecs?  Do you go back to the first wrong?  Which would be difficult without a historical record going back to the first wrong.  So do you go back just far enough?  And if so who determines how far that is?

No.  You can’t do this.  All you can do is honor the treaties you have now.  Treaties that were signed willingly by all parties concerned.  Yes, some parties were negotiating from a position of weakness.  But that’s war.  In hindsight Napoleon would much rather have signed a treaty before losing at Waterloo.  Just as Hitler would have, in hindsight, preferred to sign peace treaties with all combatants before his invasion of the Soviet Union.  But when you wage war and lose you have little choice but to negotiate from a position of weakness.  And because the British bested the Spanish in battle Gibraltar belongs to Britain.  Just as the Spanish would be holding on to Cornwall in England if the roles were reversed.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , ,

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.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Thales of Miletus, Olive Oil, Tulip Mania of 1636 and the Chicago Board Options Exchange

Posted by PITHOCRATES - April 30th, 2013

History 101

Thales of Miletus was able to Predict a Bumper Crop of Olives

Italian restaurants will have a bottle of olive oil on the table.  The more authentic restaurants.  That give you a taste of old Italy.  Where they give you bread to munch on while you wait for your food.  We pour a little olive oil on a plate.  And dip our bread in it.  And enjoy that Mediterranean flavor.  Something that some of us may believe the Olive Garden brought to the dining experience.  But olive oil actually predates the Olive Garden.  We probably started eating olives for the first time around the 8th millennium BC.  When our Neolithic ancestors were still using stone tools.  Someplace in ancient Greece.

Olive trees grew all around the Mediterranean Sea.  And the Mediterranean people probably started using olive oil around the 4th millennium BC.   That’s 4000 BC.  Awhile ago.  We began to produce olive oil commercially somewhere around 2500 BC.  And began trading this luxury good.  We ate it.  Used it in religious rituals.  In medicines.  And fuel for oil lamps.  Among other uses.  As demand grew we planted more trees.  And brought in large harvests at the end of the growing season.  And took the olives to the olive presses.  And waited for our turn.  To pay the pressman to press our olives into oil.  And during a good growing season you could find yourself waiting quite awhile.

But who has time to wait?  If only we could figure out some way to avoid that long line.  Well, as it turned out, if you were smart you could.  As Thales of Miletus did.  A Greek astronomer, philosopher and mathematician.  As well as a pretty good weather forecaster.  For he was able to predict a bumper crop of olives one year because of favorable weather.  Which would make those olive presses busy at the harvest.  So he went to the olive press owners and reserved time on their presses for a nominal down payment.  So when the harvest came in he would be at the front of the line.  If he was wrong about his forecast he would give up his nominal deposit.  And walk away.  As the press owners didn’t care whose olives they were pressing they were glad to take his money for this right to buy press time later.  They had nothing to lose.  And when Thales prediction proved true and there was a bumper crop of olives those options to buy time on those presses became very valuable.  Those anxious to get their olives into the presses were glad to pay him for those options.  To buy his right to be first to buy press time.  Which he did.  Getting quite wealthy in the process.  As well as proving a point.  Rational thinking had real value.  They could use philosophy to make life better.

As Tulip Prices continued their Meteoric Rise the Speculators entered the Market to Get Rich Quick

And the option was born.  You can use them to speculate about the price of something in the future to make a lot of money.  And you can use them for hedging risk.  Such as farmers do.  They enter contracts with people to sell their crops at a set price.  Which protects the farmer if there is a bumper crop and prices fall.  Those who didn’t enter an options contract will only get the market price for their crops.  And have an unprofitable season.  While those with options contracts will be able to sell their crops above the market price.  And have a profitable season.  But if there are droughts that reduce the harvest prices will rise.  Which protects the buyer.  As he is able to buy below the market price.  At the price in the options contract.  While those buyers without options contracts will have to pay the higher market price.  Thus entering a contract hedges risk for both buyer and seller.  One party may do better than the other if there is a large swing in price.  But neither party will suffer a bad loss.  So whatever happens in that growing season they will be around for the following growing season.  But the speculators, on the other hand, can suffer great losses.

Tulips were big in the 17th century.  The affluent adorned their homes with these beautiful flowers.  And they soon became a sign of affluence.  Today people go to the affluent shops on Rodeo Drive and buy the latest in high fashion to show off their wealth.  In the 17th century they planted tulips.  People were impressed with what they saw.  And soon had to have these wonderful flowers themselves.  Causing a great surge in demand for tulips.  Which tulip growers rushed in to meet.  But the supply couldn’t keep up with the demand.  So tulip prices soared.  Soon, growers (sellers) and wholesalers (buyers) start entering options contracts to hedge their risks in the volatile tulip market.  As tulip prices continued their meteoric rise the speculators entered the market to get rich quick.  This speculation grew into such a frenzy that people would even mortgage their homes to raise money to buy tulip options.  Waiting for the big payday when they could exercise those options.  And buy tulips at one price.  Then resell them at a higher price.  A much higher price.  The demand for options grew so great that an options market opened.  And people bought and sold tulip options.

All good things must come to an end, though.  As must speculative bubbles.  And that happened in the Netherlands in 1637.  For there comes a time where buyers simply refuse to buy anymore tulips at those high prices.  And when they stopped buying people with vast amounts of tulips to sell began to panic.  And started lowering their price.  As other sellers started doing.  When interest in buying tulips fell supply began to exceed demand.  Sending the tulip price into a freefall.  With falling tulip prices no one was buying options contracts.  Because the market price was falling so fast that it would fall below the price in those options contracts.  And when they did ‘fall out of the money’ those options contracts became worthless.  And all that money the speculators poured into the options market was lost.  People lost everything.  Even their homes.  Sending the Dutch economy into a nasty recession.

With the Advent of the Internet it’s Never been Easier to Buy and Sell Options

Stock options were a way to get rich quick.  And what made them so attractive to speculators was leverage.  A small investment could turn into great riches.  But that leverage worked both ways.  And it could take that small investment and turn it into a great loss.  Should the price move in the wrong direction and fall when you have a contract obligating you to buy at a higher price.  And with the tulip mania of 1636 investors were getting a little gun-shy of options in general.  Causing the volume of options trading to fall in London.  Concerned of the speculative nature of options London made options trading illegal in 1733.  A ban that remained until 1860.

Russell Sage inaugurated options trading in the United States in 1872.  These were over the counter (OTC).  There was no central stock exchange.  Or standardized options format.  Which made the trading difficult to say the least.  Brokers placed ads in financial journals for their respective buyers and sellers.  And waited.  For someone to read the ad.  And call.  Then haggled over the price a bit.  Signed a contract.  And then waited until the expiration date of the option.  Or placed another ad in some financial journal.  To find someone else to buy the option.

Then things started changing in 1935.  The SEC granted a license to the Chicago Board of Trade (CBOT) as a national securities exchange.  And in 1968, CBOT finally did something with that license.  They created the Chicago Board Options Exchange (CBOE).  Which standardized and organized options trading.  One Nobel Prize later to Fischer Black and Myron Scholes for their “The Pricing of Options and Corporate Liabilities” we had a ‘scientific’ way for valuing stock options.  And with the advent of the Internet it’s never been easier to buy and sell options.  Allowing some to hedge risks easily.  While others live dangerously.  And speculate.  Trying to score big.  Before they lose everything trying to get rich quick.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , ,

Coin Debasement, Currency Inflation and the Loss of Purchasing Power

Posted by PITHOCRATES - April 16th, 2013

History 101

The Roman Citizens welcomed the Barbarian Invaders as Liberators from the Oppressive Roman Regime

The Roman Empire pushed its borders out for centuries.  And when they did their legions conquered new territories.  And other civilizations.  Allowing them to send a lot of spoils back to Rome.  Providing the necessary funds for the empire.  With this lucrative stream of wealth flowing back to Rome they could leave the economy alone.  And did.  Economic activity was pretty much laissez-faire.  Then something happened.  The Romans had conquered pretty much all of the known civilized world.  And they stopped pushing their borders out.  Putting an end to that lucrative stream of wealth flowing back to Rome.

This created a problem.  For the empire was never larger.  With a greater border to protect than ever before.  And more territory to administer.  Which meant more soldiers.  And more civil servants.  Neither of which worked for free.  Which changed how the Romans handled the private sector economy.  They began to tax and regulate the hell out of it.  To raise the funds to pay the costs of empire.

Things got so bad that some people just started disappearing.  So the Romans introduced something that would evolve into European feudalism.  They forbade people from leaving their jobs.  Ever.  They even forbade the children from leaving their father’s profession.  While they were doing this they were debasing their coins.  The gold a little.  As it paid the soldiers and the civil servants.  And the silver a lot.  The money of the common people.  Who weren’t as important as the soldiers and the civil servants.  Until their silver was nothing but worthless slugs.  Causing prices to soar.  And the economy to collapse back into the barter system.  Hastening the fall of the Roman Empire.  As the Roman citizens welcomed the barbarian invaders as liberators from the oppressive Roman regime.

The Spanish brought back so much Gold and Silver from the New World that it actually Depreciated the Money Supply

Europe met Asia on the Bosporus.  The straits that connected the Black Sea and the Mediterranean Sea.  And it was where the Silk Road brought the exotic goods of the Far East into Europe.  Which the Europeans just couldn’t get enough of.  Making the Mediterranean powers the dominant powers.  For they controlled this lucrative trade.  Until, that is, the European nations made better ships.  Ships that could cross oceans.  And were bigger than the ships that plied the Mediterranean.  So they could bypass the Mediterranean powers.  And sail directly to the Far East.  Fill their large holds with those goods the Europeans couldn’t get enough of.  Getting rich and powerful.  And shifting the balance of power to these European nations.

But the Europeans just didn’t go east.  They also went west.  And bumped into the New World.  The Dutch, the French, the British, the Portuguese and the Spanish all had colonies in the New World.  It was the age of mercantilism.  Colonies sent raw materials to their mother country.  Who manufactured these raw materials into finished goods.  And shipped them from the mother country on the mother country’s ships through the mother country’s ports.  For the name of the game was balance of trade.  Which meant you imported lower-valued raw materials and you exported higher-valued finished goods.  And because the value of their exports was greater than the value of their imports there was also a net in-flow of gold and silver.  Which was what mercantilism was all about.  Trying to accumulate more gold and silver than your trading partners.

And the Spanish hit mercantile pay-dirt in the New World.  Gold and silver.  Lots of it.  So they loaded it up on their ships.  And sent it back to Spain.  Where it entered the European money supply.  And none too soon as the Europeans were cash-starved.  Because of all those exotic goods the Europeans couldn’t get enough of.  While those in the Far East had no interest whatsoever in European goods.  Which meant that European gold and silver went to the Far East to pay for those exotic goods.  Leaving the Europeans starving for gold and silver.  But thanks to the New World, they were able to reverse that net outflow of gold and silver.  In fact, so much gold and silver arrived from the New World that it actually inflated the money supply.  Which actually devalued the currency.  And because the currency lost purchasing power prices rose.  Making food more costly.  And life more difficult.

President Andrew Jackson joined the Hard-Money People and refused to renew the Charter of the BUS

Responsible nations have chosen gold and silver as their currency as it is difficult to increase the money supply and cause inflation.  Because mining these precious metals, refining them and minting coins is very costly.  Unless you discovered a New World with gold and silver paving the streets.  But that didn’t happen every day.  The irresponsible government, though, figured out a way to make that happen every day.  By just getting rid of the responsible gold and silver.  And replacing it with paper notes.  Fiat money.

Fiat money dates back to 11th century China.  To the Song Dynasty.  Which allowed the government to spend more money than their taxes raised.  Especially during war time.  But printing money devalued the currency.  And when you make the currency worth less it takes more of it to buy the things it once did.  Reducing purchasing power.  And unleashing price inflation.  Making food more costly.  And life more difficult.  During the American Revolutionary War there was so little gold and silver available that the Continental Congress turned to printing money.  And they printed so much that they unleashed a punishing inflation.  Causing prices to soar because the money became so worthless.  People wouldn’t accept it for payment.  So the Continental Army had to take the provisions they needed.  Leaving behind IOUs for the Continental Congress to make good on.  Later.

Of course, not everyone suffered during times of inflation.  Speculators did very well.  For their friends in the government’s central bank could print money and loan it to them on very favorable terms.  The speculators then used this cheap money and bought and sold assets.  Pocketing handsome profits in large part because of that inflation.  As the currency depreciation raised prices.  Including the prices of the assets they were selling.  So the rich got richer during periods of inflation.  While the working class just lost purchasing power.  Which is why President Andrew Jackson joined the hard-money people.  Those who favored gold and silver over paper currency.  And refused to renew the charter of the Second Bank of the United States (BUS).  Being one of the first world leaders not to choose destructive inflationary policies.  Instead choosing policies that favored the people.  Not the state.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The Calendar and Irrigation

Posted by PITHOCRATES - November 16th, 2011

Technology 101

The Nile is a Sliver of Life-Sustaining Black Earth Carved through the Lifeless Red Earth of the Desert

The early Egyptians were a religious people.  They still are today.  Egypt is a special land.  A unique land.  Because the Nile River flows through it on its way to the Mediterranean Sea.

The Nile is the source of life.  For it was the Nile that allowed farming.  Because of fresh water.  And fertile soil.  Black earth.  The rich silt that the Nile washed down from on high.  Beyond the First Cataract.  All the way to its headwaters.  Where monsoons in the Ethiopian Plateau, around Lake Victoria and in the Ruwenzori mountains flowed into the Blue Nile and the White Nile.  That joined into the Nile and flowed down to the Mediterranean Sea.  Bringing with it the rich silt that flooded over the riverbanks.  And left behind some of the richest soil ever farmed.

The life from the Nile was a miracle.  A blessing for the Egyptians.  This sliver of life-sustaining black earth carved through the lifeless red earth of the desert.  So they prayed.  And they worshipped.  To placate the gods.  To keep the miracle of black earth returning harvest after harvest.  For when the gods favored them the flooding came.  On time.  And at just the right height.  But when the gods did not there was famine.

By Tracking a Regular Cycle of Natural Events they Knew When to Worship and What to Do in the Farming Cycle

If the gods favored them the flooding was predictable.  If Khnum favored them the First Cataract would bring on the floodwaters at the right time and in the right amount.  Thoth would foretell this in the form of white ibises returning from their southern migration.  A favorable omen of a good harvest.  Which began with the sowing.  The grain representing Osiris’ body.  A god killed by another god.  Seth.  Who embodied the lifeless red earth.  The new growth was the resurrection of Osiris.  At the harvest they praised Isis.  For the resurrection.  That was the harvest.

The Egyptians were a religious people.  Religious ceremonies and rituals occurred throughout the farming cycle.  It’s no surprise, then, that the Egyptians created one of the first calendars.  Which marked important religious ceremonies and rituals.  And the cycle of farming.

By being able to track this regular cycle of natural events they knew when to worship.  What to do in the farming cycle.  When to do it.  And they knew when something was wrong.  For one day the floods did not come.  The climate had changed.  And the water didn’t come to them from the river.  So they had to go to the water in the river.

When the Nile didn’t Flood when the Calendar said it Should we Created Irrigation

As agriculture developed so did our understanding of our environment.  And we developed a lot of this with our religious beliefs.  For our environment was the blessing of the gods.  And at times their curse.  But our observations grew.  As did our understanding.  We developed the calendar.  And when the Nile didn’t flood when the calendar said it should we created irrigation.  Expanding the lands under cultivation.  And grew even more food.  For even though the Nile didn’t flood the water and silt were still there.

Our initial religious beliefs may not have properly explained the flooding of the Nile.  But it was a first step in our critical thinking.  Trying to explain that which we didn’t understand.  We may have been wrong about the cause.  But we got a pretty good understanding of the seasons.  By studying our environment.  And learning how to change it to suit our needs.  And it’s this critical thinking that led the way to irrigation.  And, eventually, to the modern civilization.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , ,