The cash nexus: money and power in the modern world, 1700-2000

Cover......Page 1
Title page......Page 7
Copyright page......Page 8
Contents......Page 13
List of Tables......Page 15
1  Defense expenditure as a percentage of total public spending, 1891–1997   [44]......Page 68
2  Average annual central government budget deficits as a percentage of national product, selected periods   [122]......Page 146
3  The growth and structure of the London Stock Exchange, 1853–1990   [131]......Page 155
4  European price inflation during and after the First World War   [149]......Page 173
5  Increase or decrease in the British national debt by sub-periods, 1822–1997   [169]......Page 193
6  The structure of European national debts, circa 1993   [171]......Page 195
7  Determinants of fluctuations in the price of consols, 1845–1900, as cited in The Economist   [184]......Page 208
8  The bondholders and the British national debt, 1804–1870   [198]......Page 222
9  Redistribution of income through taxes and benefits, United Kingdom 1992, by quintile groups of households   [204]......Page 228
10  Dependency ratios, actual and projected, 1900–2050   [211]......Page 235
11  Individual membership of the three major British political parties, 1953–1997   [244]......Page 268
12  Foreign holdings of developed countries' national debts, circa 1993   [264]......Page 288
13  Wars, revolutions and the bond market, 1830–1914   [276]......Page 300
14  Anticipated and real premiums on selected international bonds, 1850–1983   [284]......Page 308
15  Indicators of commercial and financial globalization   [291]......Page 315
16  A tale of two hegemons, 1870–1995   [294]......Page 318
17  Exchange rate regimes and inflation   [330]......Page 354
18  Free, partly free and not free countries: the Freedom House Surveys for 1972–1973 and 1998–1999   [355]......Page 379
40  The rise of democracy, 1800–1996   [360]......Page 384
20  Average democracy score for 136 countries, 1975–1994   [372]......Page 396
21  The Jews in economic élites: selected statistics   [381]......Page 405
22  World population and the number of independent states since 1871   [383]......Page 407
23  Military expenditure of the world's principal powers   [413]......Page 437
List of Figures......Page 17
1  The "square of power"   [15]......Page 39
2  Military personnel as a percentage of population, 1816–1986......Page 55
3  Defense spending per serviceman in Britain and the United States, 1816–1998   [34]......Page 58
4  Defense spending as a percentage of national product, 1850–1998   [46]......Page 70
5  Income tax as a percentage of taxation, 1866–1999   [72]......Page 96
Kafka's Castle......Page 111
7  Government employment as a percentage of total employment, 1960–1999   [93]......Page 117
8  Debt/GNP ratios since the late seventeenth century   [126]......Page 150
9  Debt service as a percentage of government expenditure, 1802–1999   [136]......Page 160
10  British money supply and inflation (annual growth rates), 1871–1997   [152]......Page 176
11  The real growth rate minus the real interest rate in Britain, 1831–1997   [168]......Page 192
12  British and French bond yields, 1752–1815   [173]......Page 197
13  Major bond yields since 1700   [176]......Page 200
14  The yield on consols, 1754–1998   [178]......Page 202
15  Monthly bond yields, 1914–1948   [180]......Page 204
16  U.S. long-term bond yields, 1979–1989   [182]......Page 206
17  Real returns on British and American bonds since 1700   [197]......Page 221
18  Relative poverty rates before and after taxation and transfers, 1991   [206]......Page 230
19  Two alternative ways of achieving generational balance   [210]......Page 234
20  President Clinton's approval rating and the Dow Jones index, 1993–2000   [221]......Page 245
21  Government lead and the "misery index", 1948–2000   [225]......Page 249
22  The real cost of British elections: candidates' declared general election expenses, 1880–1997   [241]......Page 265
23  Total general election expenditure of the three main British parties, 1964–1997   [242]......Page 266
24  Conservative and Labour parties, central expenditure (routine and election), 1900–1992   [243]......Page 267
25  Individual Labour Party membership as a percentage of the UK population, 1928–1977   [245]......Page 269
26  Unadjusted yields on European bonds, London prices, end of week, 1843–1871   [275]......Page 299
27  Government bonds as a percentage of all securities quoted on the London Stock Exchange, 1853–1990   [281]......Page 305
28  Yield spreads over consols, 1870–1915   [285]......Page 309
29  The Dow Jones industrial average daily closing price, 1896–2000   [298]......Page 322
30  Stock market indices since 1800   [300]......Page 324
31  The UK 'Equity Risk Premium', 1700–1995   [303]......Page 327
32  Inflation-adjusted UK stock market index, 1700–1998   [308]......Page 332
33  British share indices since 1811   [309]......Page 333
34  American and British stock market bubbles   [313]......Page 337
35  The Mississippi and South Sea bubbles, 1719–1720   [315]......Page 339
36  The Mississippi bubble: money and share prices   [316]......Page 340
The Yellow Brick Road......Page 352
38  World gold production, five yearly totals, 1835–1989   [332]......Page 356
39  'Progress' of the Ecu/Euro   [339]......Page 363
41  The average democracy 'score' for 29 European countries, 1900–1950   [362]......Page 386
42  Real national product indices for European democracies, 1919–1939   [366]......Page 390
43  Real national product indices for European 'dictatorships,' 1919–1939   [367]......Page 391
Uniting the Nations?......Page 409
45  Circles of interest   [424]......Page 448
List of Illustrations......Page 20
1  James Gillray, Begging No Robbery:—i.e.—Voluntary Contribution:—or John Bull, escaping a Forced Loan, 1796   [24]......Page 48
2  James Gillray, after "F. L. Esq.," John Bull Ground Down, 1795   [52]......Page 76
3  H. Heath, after George Cruikshnak, The Pillar of State, or John Bull Overloaded, 1827   [78]......Page 102
4  Francis Jukes, An Historical, Emblematical, Patriotical and Political Print..., 1785   [106]......Page 130
5  James Gillray, Midas, Transmuting all into Paper, 1797   [138]......Page 162
6  Anon. (English School), The National Parachute, or John Bull conducted to Plenty and Emancipation, 1802   [164]......Page 188
7  Anon. (English School), The Tree of Taxation, 1838   [190]......Page 214
8  Cheffins, King Cash!—The Boss of Every Election, from "Illustrated Bits," 1885   [218]......Page 242
9  Thomas Derrick, Sentiment on the Stock Exchange, from "Punch," 1938   [262]......Page 286
10  George Cruikshank, The "Stystem" that "Works so Well!!"— or The Boroughmongers' Grinding Machine, 1831   [297]......Page 321
11  Olave Gulbransson, Worshipping the Almighty Dollar, from "Simplicissimus," 1923   [322]......Page 346
12  Olave Gulbransson, President Wilson mounted on Morgan's Gold Mountain, from "Simplicissmus," 1916   [347]......Page 371
13  James Gillray, The Plumb-pudding in danger: or State Epicures taking un Petit Souper, 1805   [374]......Page 398
14  James Gillray, The Giant Factotum amusing himself, 1797   [391]......Page 415
Acknowledgments......Page 21
Abbreviations......Page 23
Introduction: The Old Economic Determinism and the New......Page 25
The New Determinism......Page 32
The Cash Nexus Untied......Page 34
Section One: Spending And Taxing   [21]......Page 45
1  The Rise and Fall of the Warfare State   [23]......Page 47
The Intensity of War......Page 49
Men of War......Page 52
Bangs Per Buck......Page 54
The Abolition of Distance......Page 62
Costing War......Page 64
The "Demilitarization" of the West......Page 72
2  "Hateful Taxes"   [51]......Page 75
Family Silver......Page 77
"Taxes on Every Article"......Page 81
"Picking over the Fruits": Direct Tax......Page 88
The Two Sisters......Page 97
The Poet As Taxman......Page 99
3  The Commons and the Castle: Representation and Administration   [77]......Page 101
Taxation and Representation......Page 103
Representation Without Taxation......Page 107
Servile States......Page 118
From Warfare to Welfare......Page 124
Section Two: Promises To Pay   [103]......Page 127
4  Mountains of the Moon: Public Debts   [105]......Page 129
The Origins of Public Debts......Page 131
Bonds, Banks and Bubbles......Page 136
War Debts and Their Legacy......Page 141
Scaling the Mountains......Page 144
Do Public Debts Matter?......Page 152
Debt Service......Page 157
5  The Money Printers: Default and Debasement   [137]......Page 161
How Not to Pay......Page 164
The Inflation Tax......Page 168
Rules and Discretion......Page 175
From Indiscretion to Independence......Page 181
From Independence to Irrelevance?......Page 185
6  Of Interest   [163]......Page 187
Yields......Page 189
Expectations: The Past and the Present......Page 194
"Events, Dear Boy"......Page 201
Section Three: Economic Politics   [187]......Page 211
7  Dead Weights and Tax-eaters: The Social History of Finance   [189]......Page 213
The Birth of the Rentier......Page 216
The Tax-Eaters......Page 219
The Euthanasia of the Rentier?......Page 224
The New Tax-Eaters......Page 227
Generation Games......Page 231
An Unwelcome Answer......Page 238
8  The Silverbridge System: Electoral Economics   [217]......Page 241
Are You Better Off Now?......Page 243
A Problem for the Theory......Page 246
The Political Business Cycle......Page 251
The Vote Function......Page 252
Politikverdrossenheit......Page 258
Politics As Business......Page 262
The Political Economy of Sleaze......Page 271
From Private to Public Corruption......Page 275
Towards the Political Market......Page 280
Section Four: Global Power   [259]......Page 283
Terrifying Everybody......Page 285
Capital Flows: Between Politics and the Market......Page 289
Origins of the Bond Market......Page 291
"The True Lords of Europe"......Page 293
Measuring Political Risk, circa 1830–1870......Page 296
Empire......Page 302
The Paradox of Convergence, 1870–1914......Page 307
The Crisis of the International Bond Market: Lessons for Today?......Page 312
Globalization Past and Present......Page 314
Plankton......Page 317
How High the Dow?......Page 320
The Shadow of 1929......Page 328
Other Booms and Busts......Page 330
The First Bubble......Page 334
Calculating "The Madness of People"......Page 343
11  Golden Fetter, Paper Chains: International Monetary Regimes   [321]......Page 345
The Twilight of Gold......Page 349
Currency Unions......Page 362
12  The American Wave: Democracy's Flow and Ebb   [346]......Page 370
A Parisian in America......Page 374
The Ascent of Democracy......Page 377
The Three Waves......Page 382
Democracy and Prosperity......Page 387
The Spirit of Democracy......Page 394
13  Fractured Unities   [373]......Page 397
A Balkan World?......Page 399
Men and Maps......Page 401
Untying the Nations......Page 406
14  Understretch: The Limits of Economic Power   [390]......Page 414
The Illusion of Peace......Page 419
Giving War a Chance......Page 420
The Chance of Victory......Page 424
A Democratic Peace?......Page 428
The Benefits of Militarism......Page 429
The Precautionary Motive......Page 433
Costing Kosovo......Page 438
The Case for Stretching......Page 441
Conclusion   [419]......Page 443
Appendices   [427]......Page 451
A  The biggest wars in history   [428]......Page 452
B  Multiple regression of British government popularity and economic indicators   [429]......Page 453
C  The global bond market, June 1999   [431]......Page 455
D  Public debt burdens in 1887–1888   [432]......Page 456
E  Economic and social indicators and the inter-war crisis of democracy, 1919–1938   [434]......Page 458
Introduction......Page 459
1  The Rise and Fall of the Warfare State......Page 460
2  "Hateful Taxes"......Page 464
3  The Commons and the Castle: Representation and Administration......Page 468
4  Mountains of the Moon: Public Debts......Page 471
5  The Money Printers: Default and Debasement......Page 476
6  Of Interest......Page 481
7  Dead Weights and Tax-eaters: The Social History of Finance......Page 484
8  The Silverbridge System: Electoral Economics......Page 487
9  Masters and Plankton: Financial Globalization......Page 493
10  Bubbles and Busts: Stock Markets in the Long Run......Page 498
11  Golden Fetter, Paper Chains: International Monetary Regimes......Page 501
12  The American Wave: Democracy's Flow and Ebb......Page 505
13  Fractured Unities......Page 508
14  Understretch: The Limits of Economic Power......Page 510
Conclusion......Page 513
A......Page 515
B......Page 516
C......Page 522
D......Page 525
E......Page 526
F......Page 528
G......Page 531
H......Page 534
J......Page 536
K......Page 537
L......Page 539
M......Page 540
N......Page 544
O......Page 545
P......Page 546
R......Page 548
S......Page 549
T......Page 553
W......Page 554
Z......Page 556
B......Page 557
C......Page 560
D......Page 561
E......Page 562
F......Page 563
G......Page 565
I......Page 566
L......Page 568
N......Page 569
P......Page 570
R......Page 571
S......Page 572
T......Page 573
U......Page 574
W......Page 575
Z......Page 576