A Theory About Govenment

It was all economics...

Why did Napoleon invade Russia?
It had something to do with economics.

Adam Smith, in "The Wealth of Nations" suggested that the individual's pursuit of personal wealth, i.e. profits,  was the best way to promote the general welfare.  Greedy individuals trying to acquire material goods provided a much more reliable method of improving society than governmental policy. The "invisible hand" of the market was a better regulator of individual conduct than well-intentioned laws. While capitalism may have elevated Adam Smith's economic self-interest idea to the status of an eternal truth, capitalism does not have a monopoly on cynicism.  Adam Smith seemed to legitimize unrestrained greed, but he was hardly the first to draw conclusions about human conduct. The idea that people and nations could be motivated by greed was not an original thought, nor was it limited to capitalists.

Sorting Out the Motives

The phrases "economics was really behind it," or a similar, "it was all related to economics," are commonly heard expressions. But do they have anything to do with economics? or are they closer to cynical commentaries on the actions of great individuals or nations? If the accomplishments of the great cannot be disputed, there is at least some satisfaction in tarnishing their image.  Maybe the Quest for the Holy Grail, portrayed as a noble and pure search for an ancient holy relic was little more than a cover story for an elaborate treasure hunt. The knights on the quest only wanted to appear noble. In reality, they were no different from other individuals struggling to get rich.  True economic theory or not, history has often proved the cynic correct. Individuals and nations have acted out of selfish motives.

If some stories are obviously transparent, history has many examples where motives are, to say the least, ambiguous or confusing.  The degree of skepticism surrounding the motives of individuals and nations may depend on the credibility of the story, the military power of the victor, or simply the diplomatic skills of those involved.

Did Constantine experience a genuine conversion to Christianity or did he see, in Christianity, a powerful tool with which to unify the Roman Empire?  He would defeat Maxentius at the Malvian bridge in 312 A.D.. According to legend his conversion came about as a result of a vision of the cross he had on the eve of the battle.   He had his soldiers paint the sign on their shields and it was this symbol which gave them the victory.  Constantine's beliefs may have been sincere.  The results of the battle might have confirmed the power of the Christian God.  At the same time, there were practical reasons for adopting Christianity. Some speculate that Christianity might have provided a philosophical means of controlling or unifying a large and diverse empire. It may have been seen as a rising wave while Roman rule was in decline.

Charles I, Spanish king from 1516 to 1567, represented another paradox.  Starting out from a position of wealth, provided by Spain's developing New World possessions, he focused as much on the heavenly rewards of the afterlife as he did on the maintenance of Spain's Empire.  He squandered much of his treasure in a doomed campaign to re-establish the rule of the Catholic Church in Europe. He first spent 850,000 florins to bribe the German electors to elect him Holy Roman Emperor, much of it borrowed from the Fuggers, an Augsburg banking family. Then he spent additional sums on large armies which were used to control other countries in Europe. At the end of his reign, Spain's accumulated debt had reached 37 million ducats, which was some  two million more than the Spanish treasury had received from the New World during the same time period. 

Alexander the Great was another of history's contradictions. In one sense his motives were quite simple, and therefore understandable. He wanted to conquer the known world. At the same time, he seemed almost uninterested in ruling the lands he conquered. It was not conquest for the sake of adding to empire; it was conquest for its own sake.  Unlike the Romans, who moved administrators into a conquered region almost as soon as her armies were done fighting, he made no serious effort to set up a permanent ruling structure. Alexander, having conquered one country, was eager to move on. He was even willing to sacrifice his army for personal reasons. In 325 B.C., on his return journey from India, he took his army of 30,000 into the Gedrosia desert. Some speculate that he did it for no other reason than to prove that it could be done.

Naked aggression...

In the ancient world, land, or the productive capabilities of a city or region, represented the primary resource, providing the motive for conquest. The need to defend or acquire land almost necessitated the development of military resources, whether for conquest or as a defense. Gilgamesh, the ruler of the ancient kingdom of Ur, in Mesopotamia, had to constantly worry about aggressive neighbors, interested in his lands. Babylon, Assyria and Persia battled for control of the most productive lands in their region. Rome would destroy Carthage for the threat posed by both its military capabilities and its agricultural resources. Julius Caesar would take Roman legions into Gaul and Britain to add land to Rome's dominions.

Resources have provided an unambiguously clear motive for war seemingly since the beginning of time. New World gold was what brought Spain into conflict with England. Spices, gold and slaves would motivate Portugal to use military force against Arab traders in the Indies. Gold and diamonds were at the heart of conflict in South Africa in the 1800's. Alsace-Lorraine, with its coal beds and iron deposits traded hands with every generation. France lost the region to Prussia in 1870, took it from Germany at the end of the First World War, and was forced to give it up again when Germany invaded at the beginning of the Second World War.  At other times, greed has been clouded by loftier motives. The members of the Fourth Crusade were persuaded by the Venetians to attack Constantinople in 1202, as a means of financing their recovery of the Holy Land. When Constantinople fell, in April 1204, the Crusaders sacked the city and looted the Great Church of St. Sophia. Coincidentally or not, Constantinople represented a major rival of Venice for the trading routes to the Orient, with their spices and silks. Somewhat more murky than the actions of the Venetians were the motives of the Crusaders themselves. Instead of refocusing on Jerusalem, they delayed their Crusade to subjugate the lands formerly held by Constantinople - and were largely destroyed by the Bulgars. When the English burned Joanne of Arc at the stake the charge was witchcraft, not political opposition.

... or skillful diplomacy?

Skillful diplomacy can obscure otherwise clear political motives. Nations, like individuals, want to present themselves in the best light and are often reluctant to admit to base motives. Diplomacy, and the need for sophisticated explanations, even fictional justifications, is not a recent development. Athens, in 478-7 B.C., formed the Confederacy of Delos, ostensibly to protect the Greek cities of the Eastern Mediterranean against Persia. In exchange for protection from Persia, the member states contributed either ships or a cash payment. By 450 Athens would be receiving annual tribute of around 1,000 talents. The justification for the Confederacy seemingly came to an end in 449 when Athens negotiated a peace with Persia. Athens however, refused to disband the organization and, after some military threats and expeditions against its members, continued to collect tribute.

Whether Hitler's actions, in 1939, would fall into the category of skillful diplomacy, he at least felt the need to fabricate a story to justify Germany's invasion of Poland. A company of S.S. men dressed in Polish uniforms staged an attack on a German radio station at Gleiwitz on August 31st. They seized the station, broadcast an anti-German speech in Polish for three to four minutes, fired a few shots and left. They also left drugged and dying concentration camp victims as "casualties." The "attack" served as the pretext for the German invasion which followed the next day, September 1st.

In 1941, when the Germans invaded Russia, Hitler did not bother to concoct a story. In the face of Russia's military strength, it would have been futile and would have provided the Russians with an opportunity to prepare. As it was the Germans managed to mass an army of 3.6 million men on the Russo-German demarcation line by the time Operation Barbarossa began on June 22, 1941. The fact that the Soviet army facing them in the district was 2.9 million may have been an incentive to rely on surprise. Although the attack had begun at 3:15 in the morning, the German foreign office would not meet with the Soviet Ambassador until 4:00 in the morning.  When he did meet with the German Foreign Minister, Joachim von Ribbentrop, he had to endure a list of German grievances.  Von Ribbentrop, as if to avoid responsibility for Germany's actions, did not include a formal declaration of war, even as he informed the Russian Ambassador that German troops had crossed the border some two hours before.

The Germans may have taken their cue from France, which, some hundred years before, went to war with Algiers after the French Consul was struck with a fly swatter.  In 1828 the Dey, or ruler of Algiers, asked the French Consul about a debt the French government owed for a wheat consignment from the 1790s.  When the Consul refused to discuss any repayment the Dey became so outraged that he struck him with with his fly whisk.  The Bourbon monarch Charles X declared the act "an insult to the national honor," and ordered a blockade of the port. While the Dey's actions were not incidental to an attempt to kill a fly, they were not exactly a justification for war either.  At a cost of thousands of lives, it would take France until 1847 to conquer the country,. 

Stories of success, followed by failure.

Portugal and Holland gambled on spices, while Spain bet on gold. For each, the gamble paid off. In the final analysis however, they could not hold onto their winnings.  The problem was not that winning was impossible.  Each was proof that it was.  The problem was that victory, however convincing, could be short-lived.  It did not guarantee permanence, the economic equivalent of immortality.  Competition proved to be, not one winner-take-all game, but a continuing series of games.  The end of one game simply marked the beginning of another.

In August 1499, just seven years after Columbus' discovery of the New World, Vasco da Gama, returned to Portugal from India.  The expedition, backed by the Portuguese government and King Manuel I,  had sailed in July 1497.  The 27,000 mile voyage had proved costly.  Da Gama's brother had died and only 54 crew members, out of the 170 who had begun, survived. Yet Portugal had effectively created a monopoly on sea-trade with India.

Portugal would strengthen her hold on the spice market with expeditions beyond India, to the Spice Islands (now Indonesia).  In 1509, a fleet under Diego Lopes de Sequeira, sailed from the Indian port of Calicut.  It would reach Sumatra in August and, by 1510, had established a base at Molacca, a major port on the Malayan peninsula. When local princes organized an attack, de Sequeira saw an opportunity to capture the city, which fell to the Portuguese in 1511.

Vasco da Gama's voyage signified much more than the discovery of lucrative new markets for Portugal; it also meant the end of another trading power, Venice.  In 1499, Venice had a virtual monopoly on the spice and silk market.  For oriental merchants, access to the growing markets of Europe meant overland camel caravans to the Venetian-controlled ports of Alexandria, Smyrna, or Antioch.  For Venice, Portugal represented just one economic defeat among many.  The Fourth Crusade, and the destruction of Constantinople in 1204, had provided her with an unexpected opportunity to take over trade in the region.  Some 250 years later she would lose that advantage.  In 1453 a Turkish army under Sultan Mehmet II would capture Constantinople.  Just before Vasco da Gama's successful return, she would suffer another defeat at the hands of the Turks.  In August 1499, a Venetian fleet was defeated by a Turkish squadron off the Greek island of Sapienza, in the Peloponnese.  In 1504 a treaty gave the Turks the entire Peloponnesian coast.  Her problems did not end there.  In 1508 Pope Julius II persuaded the kings of Spain, France, and Hungary to form the League of Cambrai, which also included the Emperor Maximilian and the dukes of Savoy and Ferrara.  In May 1509, a French army under King Louis defeated the Venetians at a battle near the village of Agnadello.

An accident of geography had given Portugal access to the sea and to the markets of India and Asia, which, in turn had given her the edge over Venice.  Geography would, unfortunately, also place her at the mercy of Spain. When King Sebastian was killed in 1578, while leading a military expedition against Morocco, Philip II of Spain claimed the throne.  In 1580, with the backing of the Spanish army, he became king of Portugal.  The addition of Spanish military power to Portugal's already existing possessions should have ensured a continued commercial dominance in the Pacific.  While Spain would not find the Netherlands to be a mortal threat, geographical location would make the Dutch another player in the market game, at the expense of Portugal.

As with Portugal, Philip II had tried to enforce his claim to the Netherlands with Spanish troops.  In 1568 this provoked a revolt.  Military force and repression seemed to be working until Dutch rebels seized the port of Brill in 1572.  While Holland would not formally be given independence until 1648, with the Treaty of Munster, the Spanish were unable to bring the Netherlands totally under control either.  The Dutch resistance had help from the English, who would commit some 50,000 troops to European fields between 1585 and 1597. While the English would later have reason to regret such actions, support of the Dutch brought immediate returns.  When the English raided the Spanish port of Cadiz in 1596, the fleet included 24 Dutch ships.  All the ships in the harbor were destroyed.  When the Spaniards sent a fleet of galleys against the Netherlands in 1602, a combined English and Dutch fleet sank all but one of the ships. At the same time, the Dutch were quick to exploit an opportunity for their own ends.  In 1595 Dutch merchants sent two fleets into Portuguese-controlled areas in Asia. Another 22 Dutch ships were sent out in 1598.  By 1609 the Dutch were not only defying the Portuguese, but were beginning to drive away the English.   Dutch commercial and military success in Asia was accompanied by victories closer to home.  In 1639, the Dutch admiral Marten Tromp destroyed a Spanish squadron at Gravelines in the English Channel, blockaded Dunkirk, and then followed up with the destruction of a fleet of 74 Spanish and Portuguese ships at the Downs.

Despite her naval successes, the Netherlands, like Portugal and Venice, could not maintain her dominance.  In one sense, she fell victim to market forces.  Even as she monopolized the spice trade, the relative value of that monopoly began to decline.  Demand for pepper and spices in Europe was limited.  Additional shipments did not increase revenues, they merely depressed prices.  While the English may have been forced out of the Molucca islands they maintained a strong presence in India and Indian cotton and calico was a rising market.  The Dutch also had to contend with the costs of enforcing their monopoly.  In 1682, the Bantam factory, which had been the hub of their South-East Asia trade, was closed down. Perhaps symptomatic of their economic and political situation was the fact that they relinquished their claims to New York with the Treaty of Breda, signed in August of 1667.  This concession occurred despite the fact that their fleet had sailed up the Thames that summer to destroy part of the English fleet at the Medway.

Spain, seemingly the biggest winner of all, would also fade.  Hernan Cortes' campaign to conquer Mexico would only take three years (1519-1522).  Francisco Pizzaro would add Peru in a campaign from 1531 to 1535.  The Spaniards had begun mining gold in Hispaniola, the site of Columbus' earliest landings.  In addition to the gold of Mexico and Peru, a "silver mountain," Potosi, would be discovered in Bolivia in 1545.  Yet, the initial gold shipments peaked around 1550 and fell off after 1610.  Silver would last until 1630.  In 1639 the treasure fleet did not even make the Atlantic crossing.

Spain had been doomed by the very resource it prized so highly, gold.  A combination of factors worked against her.  She had started out as a poor country and had little experience with wealth.  The geographical location of the gold made transport difficult.  Wooden ships were fragile structures, barely a match for Atlantic storms and prone to attack from wood-boring worms.  Gold was a compact, valuable metal, which promised high returns in exchange for small or moderate investment.  For that reason pirates, privateers, and governments found it irresistible. Spain could stake a claim to the gold itself, but needed a host of associated resources to enforce that claim. Gold, in other words, was not there for the taking.    If Atlantic transport was a serious obstacle, military technology was no less a necessity, given the frequency of attacks on convoys.  Large supplies of cheap wood were an advantage, when it came to replacing lost ships, while large supplies of wood were a potential danger, when potential adversaries had the means to construct fleets of their own.  Spain also undermined the value of her gold by putting it into the stream of commerce.  The Price Revolution of the Sixteenth Century saw prices rise all over Europe as a result of the increased spending.

Venice, Portugal, Holland, and Spain eventually dropped out of the high-stakes game.  If it was any consolation, they did not disappear with defeat. The world did not come to an end, life simply returned to normal.  If countries did not have the resources to stay in the high-stakes game, there were other economic games to join.

Countries, such as Britain or the United States, would continue as players. They were not necessarily smarter or more competitive, but they did have a greater reserve of high-return resources.  The United States had the additional advantage of being self-contained. It might experience internal strife, but foreign nations intervened only rarely. Wood was available in seemingly unending supply.  The Mesabi range in northern Minnesota would provide iron, the crucial ingredient for steel.  Copper was found in Michigan.  Oil and coal reserves would provide cheap fuel for heating and transport.  Finally a mild climate and rich soil meant that agricultural resources were plentiful.

Was economics behind it after all?

Contests between nations, sometimes leading to war, could lend a certain excitement to economics.  It almost suggested that economic competition was confined to the highest of levels.  Yet the struggles between nations such as Portugal, Holland, or Spain were mirrored by contests between individuals within economies. The Conquistador thirst for gold continued in the 49er's and the rush to California gold fields.  Andrew Carnegie would seek to monopolize iron supplies in the U.S. in an attempt to create a steel empire while John D. Rockefeller would seek world dominance in oil through Standard Oil.

Economic competition, and the demand for resources, was not limited to the robber barons of the Nineteenth Century or defined by the battles between industry giants.  It found its way down to the level of the individual, in the competition for jobs and the need to make a living. If individuals rarely had access to gold or silver, or even reserves of iron or oil, the competition for resources, in some form or other, was a constant.  Resources were the key to employment.  If they did nothing else, resources could at least provide jobs.  That, in turn, could impact political decisions.  Compared to the fate of nations, such as Spain, the failure to find work might seem inconsequential.  In the political realm, however, full employment is no small accomplishment.

Apart from their other worries, political leaders have always faced two economic challenges: first, the need to keep their people fed and second, the need to keep them employed.  In ancient times, the adequacy of the food supply was probably the bigger problem. Grain had to be harvested and stored and hostile peoples had to be kept at bay, lest the food stores be taken or destroyed. If ancient Egypt put a great deal of effort into the construction of granaries, it also took steps to ensure that its grain stocks were sufficient to withstand a long drought. Unemployment might be considered a modern problem, except that Rome under Caesar Augustus had difficulty keeping its citizens employed.

There is an obvious link between resource scarcity, in the form of food or goods shortages, and economic discontent.  When Rome ran out of food people rioted. When French mobs ran short of goods they took to looting and other violent acts. Resource scarcity, in contrast, has no such obvious connection to unemployment. Scarcity does lead to increased costs as a result of shortages, which in turn, can cause a loss of markets.  When goods cost more, the demand for those goods is reduced, since people stop buying them and look for cheaper products.  With a drop in demand and the loss of markets,  the need for workers to produce goods will diminish, resulting in increased layoffs.  Layoffs, in turn, will have political consequences. If unemployment becomes severe enough the survival of government may be threatened.

A Theoretical Connection

Suggesting a link between resources and political unrest, particularly if that connection involves unemployment, falls far short of the proof needed to establish a theory. At the same time, the fact that resources, at the highest level, can serve as a motive for war or exploration, at least opens up the possibility that they might impact historical events in less spectacular ways. If they can act as agents in even one situation, it is conceivable that their impact will be felt in others, in fact will be felt across a whole spectrum of events. Not even the structural form of government may be immune, in that case. Democracy and dictatorship, as governmental forms, might conceivably be influenced by resource events.

Suggestions for Further Reading:

Bernstein, Peter L., "The Power of Gold: The History of an Obsession." John Wiley & Sons, (New York, 2001)

Canny, Nicholas, ed. "The Oxford History of the British Empire: Vol. I,  The Origins of Empire: British Overseas Enterprise to the Close of the Seventeenth Century." Oxford University Press, (Oxford, 1998)

Fleming, Fergus, "The Sword and the Cross: Two Men and an Empire of Sand." Grove Press, (New York, 2003)

Kershaw, Robert, "War Without Garlands: Operation Barbarossa 1941/42." Sarpedon, (New York, 2000)

Konstam, Angus, "Historical Atlas of Exploration: 1492-1600." Checkmark Books, (New York, 2000)

McKendrick, Melveena, "The Horizon Concise History of Spain." American Heritage Publishing Co. Inc, (New York, 1972)

Muller, Jerry Z., "Adam Smith in his Time and Ours: Designing the Decent Society." Princeton University Press, (Princeton, 1993)

Norwich, John Julius, "A History of Venice." Alfred A. Knopf, (New York, 1982)

Sherrard, Philip, "Great Ages of Man: A History of the World's Cultures. Byzantium." Time-Life Books (New York, 1966)

Shirer, William L., "The Rise and Fall of the Third Reich: A History of Nazi Germany." Simon and Schuster, (New York, 1960)

Smith, Adam, "An Inquiry Into the Nature and Causes of the Wealth of Nations" (1776)

Warner, Oliver, "Great Sea Battles." Exeter Books, (New York, 1963)

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