Reviews for The Gold Standard Illusion: France, the Bank of France, and the International Gold Standard, 1914-1939

The average rating for The Gold Standard Illusion: France, the Bank of France, and the International Gold Standard, 1914-1939 based on 2 reviews is 4 stars.

Review # 1 was written on 2012-11-25 00:00:00 Jeanette Lee Wirtschaftsgeschichte (1923), is not a book written by sociologist Max Weber, but a work written by two of his former students, with approval of Weber's wife, about the last lecture course Weber gave before giving up the holy ghost in 1920. The students, Helman and Palyi, collected Weber's notes and combined this with all the available notes students took during the course. By this method, they were able to stitch together Weber's history of economics in a very well-written work. The work itself is a very general history of economics; it covers the whole of humanity's past (starting with agricultural societies) and compares all the different societies of which something is known (for example, Weber mentions India, China, Japan and the Islamic world multiple times). The book is divided into four parts: (1) the first part deals with the transition from household and clan communities to villages and manors; (2) part two covers the rise of industry and mining up to the industrial revolution; (3) the third part zooms in on the history of commerce and trade in pre-capitalistic societies; (4) in the last part Weber describes the rise of capitalism in the West and tries to explain this rise with his famous Protestant-ethic theory. I will explain some more about each of the parts, but considering the scope of this book, it is a very hard to give every topic in Weber's book a fair hearing (so read the book yourself, it is defintely worth it!). 1. According to Weber, human societies start out as agricultural communes, in which humans live a rather equalitarian life. Under pressure of conquest from neighboring communes, the community needs a militia (armies came later). This leads to economic and political differentiation: only the people who own pieces of land are allowed to be soldiers and hence have political and economic influence on the life of the community. Because property (of land) becomes an important mark of distinction, the pressure is there for manorial estates to (gradually) develop. The lords of the manor create a situation (for themselves) of immunity and judicial authority. This lays the seeds for the exploitation of the peasants, since the lords of these manors have to finance their political and economic game - so they start taxing the peasants for revenue. After this phase, capital gradually becomes more important. This is because peasants don't have incentives to produce more than necessary for subsistence and taxes (i.e. they don't produce for markets). People with capital can put this money to use by buying and increasing means of production, this leads to (1) plantations (like in North America and in the Islamic world) on which slave labour is used as a means to increase profits, and to (2) estates, where the lords hire specialized peasants and artificers to produce the products and services they want. The origin of the estate is the seed for villages and cities. The city allows lots of people to leave their status of peasant and to specialize in particular skills; they become the merchants, traders, artificers, etc. This leads to the rise of a middle class, or bourgeousie. The exisitence and growth of the middle class leads to an increasing market and hence to bigger opportunities for the middle class. Weber notes that rulers (kings and princes) saw an incentive in this creation of a middle class - this meant higher taxes were possible. So kings and middle classes fought together against the landed nobles, leading (again, gradually) to the expropriation and dissolution of manorial estates. This meant a huge political change: no longer was the aristocracy able to dominate society - they were either reduced to the proletariat, which had to work for the new middle classes, or became part of the middle class themselves. 2. In part two, Weber zooms in on the economic organisation of industry. According to him, agircultural communes produce for the household and clan; there's no specialization and no incentive to produce more than necessary to survive. With the rise of towns came village industry. Towns, almost by definition, cannot produce food and drink to subsist, so they have to produce products and services that they can exchange for food and drink with the agircultural hinterland. It is in towns that people first start to produce for a market (compared to producing to barely subsist). People either work in shops, where they sell their products as well, or they set up a domestic industry (for example, spinning and weaving at home). The gathering of skilled craftsmen in towns and on manorial estates led to the first guilds. Guilds were set up as a collective association of competitors/colleagues as means of minimizing competition by domestic industry (by keeping trade secrets, installing very few master artisans, etc.). Guilds struggles continuously with rural workers, laborers, merchants and other guilds. The downfall of the guild as an institution was introduced when craftsmen, working in the domestic system, started to become factors (i.e. producers) and merchants themselves - cutting out the middle man, so to speak. This led to transverse differentiation, in which craftsmen started to specialize in particular parts of the production process - guilds were based on the put-out system: guild members produced entire goods (so for example, a smith produced swords and was responsible for the entire process of production). This system of shop production, or rather factories, was built on the existence of fixed capital of investors. When technique developed, the necessary capital increased, since machines were applied to the working process. This led to capitalist building their own work houses and factories, in which all the former domestic craftsmen had to work for long hours in abhorrent working conditions. 3. In part 3, Weber describes the third important strand (besides the development of agriculture and towns [1], and the economic organisation of production[2]): commerce and trade. He starts by showing how the transport system in Europe - but really, anywhere - was very primitive. Trade by land was limited by the low bulk of the transport, while trade by seas and rivers was limited by very high risks of natural disaster, piracy and high tariffs. According to Weber, in the pre-capitalistic system, there are three forms of commerce: foreign trade, residential trade and fairs. The first two are consumer driven: foreign as well as residential traders produce for a market. The fair was based on wholesale trade: traders and merchants would by whole produce to sell it themselves - of course with huge profits. It is important to note that, according to Weber, it is only after the middle ages that trade and commerce really took off in Europe; first were needed the Arabic bookkeeping system, the process of joint liablity (in which house-communities produced and were liable together) and the subsequent separation of property, and the rise of mercantile guilds (like the Hanseatic League in Northern Europe). An important part in commerce is played by money. Money wasn't always what it means to us, though. In antiquity money was primarily a means of payment, while in modern times money is seen as a means of payment as well, but also, and rather more importantly, as means of exchange. It is only in modern times that exchange became a central part of the economy, with all its applications (such as the seeling of futures, speculative investments, etc.). This can be seen in the shift in the banking system: in anitquity temples were used as banks, for deposits. With the rise of commerce and trade, and more importantly with the rise of the European kingdoms, the state saw banks increasingly as a means to finance their affairs. The banking system hence went from having a depository function to a financing function: banks financed the wars the states were involved in (among other things). Banks had to create money, which started with the Dutch and British banks in the 17th century, and started to sell bonds and stocks. This is the foundation of the modern economic system. 4. In the last part of the book, Weber finishes his economic history by describing the rise of capitalism from the 17th century onwards. This can be summarized fairly easily, since much of the first parts of part four are repetitions or extensions of earlier material. The European sates became more and more involved in industry: using the economic system to finance state affairs and levying taxes, regulating the industrial sphere by laws, and even involving themselves in commercial companies like the British and Dutch East India Companies and the colonial enterprises in North America. (Even though Weber explains, rather convincingly, that the colonial trade was, in effect, loss-making.) It was during this time, around the 19th century, that the city had changes the entire political, economic and social landscape. Cities were growing bigger; agricultural production needed less and less labour to produce more and more (by applying new techniques of production); the middle class was growing bigger and with this growth the market that could be produced for; the old aristocracy was dying (at the cost of the rise of the new middle class); and the state got more powerful. This led to major political shifts: the notion of citizenship was renewed; democracy no longer focused on people owning landed estates and/or slaves;the state re-organised itself, making itself more efficient by applying new techniques and a professional civil service, etc. According to Weber, capitalism - the rational organisation of the economy - is a unique and new phenomenon in human history. Never before was this form of organizing communities developed and never did it even rise. Why? Well, according to Weber this is because only in 18th century Europe (and later on in the USA), religious motives for investing money and producing rationally were fertile ground for capitalism. He means that Pietism and Puritanism saw capitalism as the natural consequence of God's law: work hard, try to better your life, and if this happens this is a sign of God's approval. (One wonders what the African slaves working on the American plantations, or the children working for over 14 hours a day in the factories, did wrong in the eyes of God.) In effect, Weber says that Catholicism and Lutheranism, as well as most other religions (like the Indian caste system and Chinese communism), are hindraces to the rise of capitalism: they either forbid money lending or they focus on the world hereafter. Whether Weber's view on Protestantism as the prime cause of capitalism is right or wrong I dare not judge - it sounds plausible, but like almost anything in social sciences it is extremely hard to verify. So much for the contents of the book. To end this review, I'd like to add my two cents on it. It is a fascinating story, and a plausible one as well. I think one would need a lot of scientific and historical knowledge to shoot down Weber's theories - if this would even be possible. On a side note: while reading this book, I realized how much of what I learned on primary and middle school was (ultimately) founded on Weber's theories. Weber is a very broad intellectual, not losing himself in details he is able to explain broad trends and developments. There are two interesting points to note about Weber's historical analysis of economics. 1. Weber falls in the tradition which sees humanity as progressing gradually. He clearly states, throughout the book, how one state led to the next and how humanity develops gradually and constantly. The city plays a key role in this development: major political, economical and social changes started in the cities of Europe. Personally, I'm a little bit skeptical about this so-called hypothesis of 'inevitable progress'. For example, I don't see how letting children of six work for over 14 hours a day in horrible factories is progress when compared to their past rural lives. Sure. In a sense, technological progress was further in 19th century England than in 18th century England and we were (finally?) able to build factories and make machines churn out clothes. Yet, from a humanitarian viewpoint, I don't see the progress. At best, I view history as a sort of Hegelian dialectical process: developments take place, and then we either voluntarily compensate the victims of this development, or revolution does it for us. So history moves - in a sense - in theses, antitheses and syntheses, but not in the Hegelian way: there's no evidence for a predestined future of history. Nevertheless, Weber's arrow of time throughout the book makes you reflect on past civilizations and appreciate how far we have come since the times of Babylon or Egypt. 2. Another very interesting point Weber makes is the influence of culture on economic, political and social development. His theory of protestantism as the cause of capitalism is an example, but he makes an even better example when talking about India. In India there was (is? - I'm not familiar with Indian culture) a cast system that split up society in different strata; this hierarchy of social strate determined your political and economic position. The hindu religion prescribes very clearly to stick with your class and don't cross the line. If you lead the right life, you will be rewarded in the afterlife and be re-incarnated in a higher caste. This way, you climb up, until finally you lead a good life in the highest caste and you go to heaven. If you don't listen to the gods and try your own luck in life (by doing things that your class isn't allowed to do) you will be punished in the afterlife and be degraded in your re-incarnated life. If you continue ignoring the hindu gods you will ultimately end up being re-incarnated as the guts of a dog. (Incentally: who thinks up such silly things?) Anyway, Weber explains how this mindset makes people stick to the script and prevents people from bettering their life in this world, while focusing on the afterlife (something similar is claimed by Ayaan Hirsil Ali in the case of islam). In other words: there's absolutely no possibility of capitalism originating in such a culture. Capitalism is built on working hard to better your life and satisfy your needs - not only does this incentive lack in hinduism (and islam, apparantly), it is even forbidden to do it. Weber is spot on by describing these cases: beliefs matter and hence culture is a key factor in future developments. This is something that is - even since Foucault, Derrida and the cultural marxism running rampant in the West - a major taboo: not all cultures are equal and the difference do matter -they have practical conesequences. If we strive for a better world, not all cultures are equally compatible or fertile for good ideas.

Review # 2 was written on 2017-12-24 00:00:00 J Daniels Se podrían decir bastantes cosas de este libro dependiendo el abordaje que se le pretenda dar. Su valor es innegable y la habilidad de Weber de situarse en el centro de distintas discusiones me parece magistral. Sí es un texto sobre historia y economía pero toca aspectos igual de relevantes como la sociología, religión, política, entre otras. A pesar de que sus mejores ejemplos y argumentos se sitúan acerca del mundo europeo, también se incluye esa categoría borrosa llamada oriente. Al hablar de China, India y otras latitudes, se enriquece el análisis, sin embargo, sería ingenuo llamarlo completo o preciso. Entre sus mayores aciertos rescato su esquematización y su intento racional de captar en la historia no una mera secuencia de eventos. Es un libro imprescindible (tal vez no todo pero ciertas partes) para comprender de mejor manera cómo es el paso de actividades económicas y su relación con el resto de las áreas y los campos. Por último, creo pertinente advertir que se queda en el siglo XIX. Justo el cierre del texto es donde se aborda la transición a un capitalismo más familiar o conocido por nosotros. Pedirle más constituiría un sinsentido.