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Musings Report #21 5-21-16 The "Secret Sauce" of the Byzantine Empire
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For those who are new to the Musings reports: they are basically a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
The "Secret Sauce" of the Byzantine Empire
One of my reading projects over the past year is to learn more about empires: how they are established, how they endure and how they crumble.
To this end, I've recently read seven books on a wide variety of empires. The literature on empires is vast, so this is only a tiny slice of the available books. Nonetheless I think these 7 titles offer a fairly comprehensive spectrum:
How Rome Fell: Death of a Superpower (Adrian Goldsworthy)
War and Peace and War: The Rise and Fall of Empires (Peter Turchin)
The Rise of Rome: The Making of the World's Greatest Empire (Anthony Everitt)
428 AD: An Ordinary Year at the End of the Roman Empire (Giusto Traina)
Genghis Khan and the Making of the Modern World (Jack Weatherford)
Venice: A New History (Thomas F. Madden)
Byzantium: The Surprising Life of a Medieval Empire (Judith Herrin)
I was not exposed to much history of the Byzantine Empire in high school or college, and so I found the last book of particular interest, despite its rather dry academic style.
The Byzantine Empire, based in Constantinople (now Istanbul), began as the Eastern Roman Empire when the Roman Empire was split into East and West to facilitate defense.
In the original conception, the two halves would be jointly ruled by two emperors. But as the Western Roman Empire frayed and devolved, power shifted to the still-vibrant Eastern Roman Empire, which spoke Greek rather than Latin and was Orthodox Christian rather than Catholic.
The Byzantine (Eastern Roman) Empire endured from the western empire's fall in 476 A.D. to 1453 A.D., when Constantinople fell to invading Turkish forces.
Thus the Byzantine Empire endured for roughly 1,000 years after the Fall of Rome (977 years, to be exact). It was an Empire that spanned the Medieval ages, that reached its zenith around 1025 A.D., and lasted right up to the dawn of the Renaissance.
How did Byzantium endure for 1,000 years after the fall of Rome? There are many factors, of course, but I think these four elements are the "secret sauce" of the Eastern Roman Imperial longevity:
1. A stable currency. When the Empire devalued its currency for the first time in the 13th century, it triggered a long-lasting loss of faith in the currency. This devaluation was the beginning of the end, as the Empire never recovered its financial footing.
Lesson: you cannot devalue your way to stability, influence, power or prosperity.
2. Multiple pathways of social mobility via the church, military and civil bureaucracy. Men from poor provincial villages and towns could make their mark and rise to positions of wealth and power via joining the church or military hierarchies, or by serving ably in the Imperial bureaucracy. Women could rise to positions of wealth and influence via marrying well.
3. Pervasive tax collection to fund defense. Empires and states were under essentially constant attack for much of this 1,000 year period of history, and the empire collected land and other taxes via a vast bureaucracy of tax records and collections. Interestingly, it is estimated that the Imperial taxes absorbed about 20% of all income--roughly the same percentage the U.S. government absorbs.
When the tax system fell into disrepair, revenues sagged and defenses almost failed. Competent leadership restored the tax system and defenses, giving the Empire another few hundred years of life.
4. Safe trading routes and markets. The Empire provided protected sea and land routes for traders from everywhere, and Constantinople offered a vast depot for trading and manufacture. Much of the Empire's wealth and tax revenues flowed from trade, and the Empire maintained a long history of offering lucrative trade deals with allies such as Venice.
I see these dynamics as being just as critical in the present age. If a nation's currency loses value, the ladders of social mobility are broken, the tax system is corrupt and/or unfair and trade is unsupported or suppressed, the nation/empire is doomed to erosion and collapse.
Summary of the Blog This Past Week
What's Your Monthly Grocery Bill? Ours Is $218 5/20/16
Fed Up with the Fed 5/19/16
Are Property Taxes a "Wealth Tax" on the (Mostly) Non-Wealthy? 5/18/16
A Nation of Housing Haves and Have-Nots 5/17/16
If Geography and Demographics Are Destiny, Who Will Be the Winners and Losers in 2025? 5/16/16
Best Thing That Happened To Me This Week
I received my advance from the Chinese publisher of "A Radically Beneficial World." I was wondering if the book might be cancelled by authorities on political grounds. So far, so good; hopefully the book will be published in China later this year as planned.
Market Musings: the Potential of Bitcoin and Crypto-Currencies
Bitcoin had a rough adolescence: security flaws in some of the early exchanges led to the collapse of high-profile exchanges, and internal conflicts over the direction of bitcoin have dampened enthusiasm for the crypto-currency.
But beneath the bad PR, the bitcoin community has made progress: the exchanges are much more secure and much easier to use.
The new kid on the crypto-currency block, Ethereum, has soared from $1 in January to more than $12. A reader suggested I look into buying some in April, when it was around $7.25; it has since almost doubled.
Those of you who have read "A Radically Beneficial World" know that I see crypto-currencies as being the financial heart of any global alternative system. The reason is simple: crypto-currencies such as bitcoin, Ethereum or my proposed largent are outside the control of central banks and states.
Unlike precious metals, crypto-currencies are easy mediums of exchange: you can send or receive bitcoin as easily as you send or receive dollars with PayPal, Dwolla or similar services.
The great problem going forward for many people will be transferring their remaining financial wealth out of depreciating currencies in their homeland to some other currency in another more stable country.
When governments clamp down on bank transfers and impose other capital controls, this will become increasingly difficult in conventional channels. Should demand for bitcoin rise, the price will skyrocket.
Right now all 20+million bitcoin in existence are worth about $8 billion (bitcoin is currently around $445 USD)--a drop in the bucket of the world economy's $200+ trillion in financial assets and a tiny sliver of gold's global $7 trillion valuation. It would take very little to push bitcoin's valuation to $80 billion, and this would still be a very thin slice of total financial assets.
From Left Field
From belief to outrage: The decline of the middle class reaches the next American town -- well worth a read...
This bitcoin challenger is up 1,100% this year — but is it ready for prime time? -- Ethereum
The Tao of “The DAO” or: How the autonomous corporation is already here (via Lew G.) -- more Ethereum
A Quick Guide to SNAP Eligibility and Benefits -- food stamp eligibility is complicated...
The Secret Document That Transformed China -- private ownership changed the incentives...
New Rules Give Startups Access to Main Street Investors (via Lindsay K.)
Strange Answers to the Psychopath Test (18:01)(via Lew G.)
Why Poor Districts Receive Less Government School Funding Than Rich Ones -- important insights...
A guy just transcribed 30 years of for-rent ads. Here’s what it taught us about housing prices -- supply and demand and wages matter....
A New Map for America: cities with more than three million people have rebounded far better from the financial crisis.
The Entrepreneurship Racket: The entrepreneurship craze is solidifying the corporatization of American universities.
The Recession’s Economic Trauma Has Left Enduring Scars -- no surprises here, but worth pondering the long-term consequences..
How Hedge Funds Invest Heavily In Washington D.C.'s Culture Of Corruption -- worse than I imagined... total corruption in every nook and cranny...
"It is a rough road that leads to the heights of greatness." Seneca the Younger
Thanks for reading--
charles |
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