One casualty of this fruitful recession is the economic ideas and assumptions that helped inflate the last couple of bubbles. Already Alan Greenspan has apologised, famous CEOs have begged, and Wall Street’s smirk has been wiped off its face. Searching for solid ground and useful parallels, commentators are looking further and further back into the past. John Maynard Keynes is suddenly in again, and Galbraith, and Gandhi.
But there’s no reason not go much further back: back to when the economy was really real, hardly at all virtual. Part of that same intellectual generation of the 1920s — the postwar decade of Depression — were the historians of the French Annales school (named after their journal), who rejected the idea that history was about politics, diplomacy, war, high culture and the actions of great individuals. They decided, instead, that it was about fundaments: slow-changing things like geography, technology, patterns of thought that determined the conditions of human existence.
Among them was Fernand Braudel, who wrote two large and very beautiful volumes on the role of the Mediterranean Sea in European history. On his vast stage kings and armies moved like ants, mere “events” determined by much broader “processes”. Naturally such a historical perspective brought to front and centre the experience of the mass of ordinary humans — peasants, apprentices, slaves and subalterns of all sorts — who had not been considered apt subjects for history. Now they were a giant blind spot that filled the eye.
This firm anchoring in “real” lives was most stimulating. Suddenly and urgently, all of history was thrown open to re-investigation. Old questions were asked again, and unexpected new answers found. One pioneer, whose work inspired the Annales historians, was Henri Pirenne, a Belgian patriot who took part in the resistance against the Germans and whose homeland possessed some of the richest cities of medieval Europe. He asked: where did European cities come from?
The book in which he tackled this question is Medieval Cities: Their Origins and the Revival of Trade (1925). It is a remarkable synthetic work, containing a lifetime of research distilled into an elegant but comprehensive argument. Typical of books by great French historians writing in their later years, it is unencumbered by footnotes and similar scholarly apparatus. It has the simplicity of good logic.
Pirenne writes that access to the sea determined the fate of cities after the Roman empire faded away in the West. So long as the Mediterranean was a Roman or Byzantine lake, the great engine of trade (as well as the civic habits of the empire) kept European cities alive. Then Islam came, and took Syria, Egypt, northern Africa, the major islands and Spain. Trade now flowed between one Muslim shore and another, bypassing Europe and throttling the commerce that kept its cities alive. So: Europe developed a land-based, agricultural feudalism, as Islam grew into an urbane and brilliant civilisation.
But between the 10th and 12th centuries, Pirenne writes, Christian Europe won the Mediterranean back from Muslim rulers, especially through the trading powers like Venice and Genoa. Meanwhile northern Europe, including Belgium, was opened up to trade by the Scandinavians. With this dual north-south motor running, Europe was primed for business on an unprecedented scale.
All that was needed was a middle class, and that assembled itself out of those whom feudalism had not served well — neither clergy nor landed ruling class but, Pirenne says, serfs who freed themselves from the land. When they became rich enough, it was time for another great turning point: Renaissance and Reformation, the alleged first acts of modernity.
Since 1925 the “Pirenne thesis” has been challenged and tweaked. The summary above I offer as an example of the scale of thinking of his generation of historians. What insight does it offer us?
With a little imagination, it offers a clue how to think about the future. Economic projections are based on the latest data and trends. But they only work in the short term, because intolerable assumptions underpin such forecasting: that macroeconomic factors will remain steady, that our political economy is near-perfect in terms of predictability, and that as we are we shall stay, only more so.
Armed with insights from Pirenne and his fellows, instead, we can ask more far-reaching questions and prepare for unpredictable futures. What will happen to commerce when the sea rises? Do we face a future of city-states? How soon will big business and office-work end? And so on.
This is the time to ask these questions: when a powerful dose of doubt has freed up the future.
