Material Basis of the Golden Age of Bohemia

Material Basis of the Golden Age of Bohemia

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On a recent visit to Prague I was much impressed by the city's beauty and the number and splendor of its historic sites, such as Prague Castle, the Charles Bridge (a bit further afield Karlštejn Castle), its many stone towers, and lovely details such as the ubiquitous cobblestone streets.

The extraordinary richness on display reminded me much of Seville, Spain, which also possesses e.g. mighty palaces of the nobility and a huge cathedral. For Seville the main source of its extraordinary historic wealth seems clear: its location is where ocean-going cargo ships from the South American colonies were unloaded on the river Guadalquivir and where hence a lot of money was made and spent during the Golden Age of Sevilla.

Many prominent historic sites in Prague similarly date back to a Golden Age of Bohemia that began with the reign of Charles IV (1316 - 1378), Holy Roman Emperor and King of Bohemia. I am wondering what brought the Golden Age about overall in this case. The Czechs are an enterprising people and in Charles IV they had an enlightened ruler, but I assume there must still have been some economic fundamentals, perhaps in the form of raw materials or new crafts specific to the region, that allowed the king and the people to catalyze their own Golden Age, which still shines today.

So what was the material basis for the Golden Age of Bohemia?

My answer is only hinted at the following piece.

But there is a key line that says that Bohemia escaped the Black Plague that affected much of the rest of Europe. That would be sufficient to attract "flight capital" from the rest of Europe seeking a "safe haven" from afflicted areas. Bohemia appears to be the beneficiary of such a phenomenon. Plus the fact that its kings of the period were generally regarded as unusually wise (in the manner of King Solomon). That is another attractor of investment capital, even to this day.

While Kutná Hora was producing silver, I don't think that this commodity or any other commodity (and surely not one stolen from a colony - colonies didn't really exist) was the main driver behind the glory of the Golden Era - although the silver was obviously needed for our hard currency, the Prague Groschen (picture below). The true reasons were organizational and political, I think, and the character of the economic development was modern and diverse.

Charles IV (1316-1378) is considered by Czechs to be the most stellar ruler of our feudal history, due to the power he brought to the Czech kingdom and that was never quite repeated although Rudolph II who also ruled from Prague (but wasn't quite Czech… ) came close (especially when it comes to his support of arts and sciences, something in which Prague has surely lost all of its prestigious status after Rudolph II).

One must understand that he wasn't just a Czech king. Since 1355, he was also an undisputed only Holy Roman Emperor (he was a disputed one, a de facto emperor, for many years before that) and during his reign, I believe the whole reign, Prague was the capital of the whole Holy Roman Empire.

This makes a difference because the Roman Empire has been the traditional brand for the modern type of wealth. You may appreciate how much Vienna has benefited from its being the capital of the Austrian monarchy for many centuries. Similarly, Brussels may have some extra advantage by being the capital of the confederation known as the EU: lots of business revolves around the politicians and administrators. However, being a capital of the Holy Roman Empire might have been an even bigger deal. I suppose that some "taxes" were flowing to Prague from the whole empire.

There were various accidental reasons that made this privileged position of Bohemia possible. However, Charles IV improved the political clout of Bohemia by various mostly peaceful acts, especially acts like clever marriages. For his Bohemia where he was a king and which was therefore the "core" of the Holy Roman Empire, he acquired lots of unusual territories in East Germany, big portions of the current Poland, and elsewhere. At one moment, Bohemia almost had access to the Baltic Sea (see the map below), and so on. Be sure that throughout most of our history, we couldn't consider ourselves to be expansionist colonial masters of any sort so this exceptional era fills us with a certain pride (well, much like the Hussite Wars a century later - Hussites are admired even by many conservative Czechs although they were essentially communists, terrorists, and heretics combined into one).

Note that Berlin was one of the cities in the Czech kingdom and all the major cities have had nice and smooth Czech names.

Internally, Charles IV was a great manager. Especially in Prague, he knew how to support construction of new buildings and infrastructure that was meaningful and profitable for the kingdom as a whole. He founded the Charles [himself] University in 1348, built the New Town neighborhood, the Charles Bridge, the initial stages of the St Vitus Cathedral, the Karlštejn Castle, and other things. Prague would be upgraded from a diocese to an archiepiscopate. He often declared contests - I mean tenders - who is able to build something quickly. Marketplaces were actively managed and timing was important.

It's plausible that the climate was more friendly - i.e. warmer - at that time, too (the so-called Medieval Warm Period). It may have helped although it's hard to decide or quantify it. Charles IV switched Bohemia to "wine drinkers" and wine must have been routinely grown even at places of Bohemia such as Prague itself (note there is Charles-IV-founded "Vinohrady" = "Wineyards" neighborhood over there) where it seems implausible today. Of course, one can't be sure whether it tasted really well and whether it was sweet enough. There were also some protectionist policies against wine importers. 10% of the sold wine went to the landlord and each winery had to send 30 liters to the king, too. ;-)

Prague was the 2nd largest European city in that time and relatively speaking, the kingdom was doing very well. I am not sure whether the Golden Era was so supernaturally golden in the absolute sense so that one would have to search for some particular material cause of it.

The best answer to the question that I have been able to come up myself so far points to silver mining e.g. in Kutná Hora, another UNESCO World Heritage property in the Czech Republic, from the the 13th and 14th centuries ("Kutná Hora is therefore rightly considered to be the treasure-house of the land whose wealth gave strength to the expansion of the Kingdom of Bohemia").

I remember reading David Graeber on that "there was a sudden burst of silver mining in Saxony and the Tirol" in the 1460s (most of which would ultimately be shipped off to China). Those two regions did not experience own Golden Ages to my knowledge, so that could suggest that silver mining is at best a necessary but not sufficient condition for the Golden Age of Bohemia. (On the other hand, I believe both regions were also parts of the Holy Roman Empire at the time when Prague became its capital with Charles IV's imperial election.)

10 Sordid Rumors From The Golden Age Of Hollywood

It may be known as the City of Angels, but dirty rumors still run rampant in Los Angeles. Sordid stories and whispered scandals reached their fever pitch in the golden age of Hollywood, when puritanical public morales masked hidden affairs and the rampant sexuality of the stars. From a feces-loving lead actor to a silver screen starlet who died under mysterious circumstances, we have 10 of the dirtiest rumors to grace Hollywood&rsquos history books.

The Dutch Economy in the Golden Age (16th – 17th Centuries)

In just over one hundred years, the provinces of the Northern Netherlands went from relative obscurity as the poor cousins of the industrious and heavily urbanized Southern Netherlands provinces of Flanders and Brabant to the pinnacle of European commercial success. Taking advantage of a favorable agricultural base, the Dutch achieved success in the fishing industry and the Baltic and North Sea carrying trade during the fifteenth and sixteenth centuries before establishing a far-flung maritime empire in the seventeenth century.

The Economy of the Netherlands up to the Sixteenth Century

In many respects the seventeenth-century Dutch Republic inherited the economic successes of the Burgundian and Habsburg Netherlands. For centuries, Flanders and to a lesser extent Brabant had been at the forefront of the medieval European economy. An indigenous cloth industry was present throughout all areas of Europe in the early medieval period, but Flanders was the first to develop the industry with great intensity. A tradition of cloth manufacture in the Low Countries existed from antiquity when the Celts and then the Franks continued an active textile industry learned from the Romans.

As demand grew early textile production moved from its rural origins to the cities and had become, by the twelfth century, an essentially urban industry. Native wool could not keep up with demand, and the Flemings imported English wool in great quantities. The resulting high quality product was much in demand all over Europe, from Novgorod to the Mediterranean. Brabant also rose to an important position in textile industry, but only about a century after Flanders. By the thirteenth century the number of people engaged in some aspect of the textile industry in the Southern Netherlands had become more than the total engaged in all other crafts. It is possible that this emphasis on cloth manufacture was the reason that the Flemish towns ignored the emerging maritime shipping industry which was eventually dominated by others, first the German Hanseatic League, and later Holland and Zeeland.

By the end of the fifteenth century Antwerp in Brabant had become the commercial capital of the Low Countries as foreign merchants went to the city in great numbers in search of the high-value products offered at the city’s fairs. But the traditional cloths manufactured in Flanders had lost their allure for most European markets, particularly as the English began exporting high quality cloths rather than the raw materials the Flemish textile industry depended on. Many textile producers turned to the lighter weight and cheaper “new draperies.” Despite protectionist measures instituted in the mid-fifteenth century, English cloth found an outlet in Antwerp ‘s burgeoning markets. By the early years of the sixteenth century the Portuguese began using Antwerp as an outlet for their Asian pepper and spice imports, and the Germans continued to bring their metal products (copper and silver) there. For almost a hundred years Antwerp remained the commercial capital of northern Europe, until the religious and political events of the 1560s and 1570s intervened and the Dutch Revolt against Spanish rule toppled the commercial dominance of Antwerp and the southern provinces. Within just a few years of the Fall of Antwerp (1585), scores of merchants and mostly Calvinist craftsmen fled the south for the relative security of the Northern Netherlands.

The exodus from the south certainly added to the already growing population of the north. However, much like Flanders and Brabant, the northern provinces of Holland and Zeeland were already populous and heavily urbanized. The population of these maritime provinces had been steadily growing throughout the sixteenth century, perhaps tripling between the first years of the sixteenth century to about 1650. The inland provinces grew much more slowly during the same period. Not until the eighteenth century, when the Netherlands as a whole faced declining fortunes would the inland provinces begin to match the growth of the coastal core of the country.

Dutch Agriculture

During the fifteenth century, and most of the sixteenth century, the Northern Netherlands provinces were predominantly rural compared to the urbanized southern provinces. Agriculture and fishing formed the basis for the Dutch economy in the fifteenth and sixteenth centuries. One of the characteristics of Dutch agriculture during this period was its emphasis on intensive animal husbandry. Dutch cattle were exceptionally well cared for and dairy produce formed a significant segment of the agricultural sector. During the seventeenth century, as the Dutch urban population saw dramatic growth many farmers also turned to market gardening to supply the cities with vegetables.

Some of the impetus for animal production came from the trade in slaughter cattle from Denmark and Northern Germany. Holland was an ideal area for cattle feeding and fattening before eventual slaughter and export to the cities of the Southern provinces. The trade in slaughter cattle expanded from about 1500 to 1660, but protectionist measures on the part of Dutch authorities who wanted to encourage the fattening of home-bred cattle ensured a contraction of the international cattle trade between 1660 and 1750.

Although agriculture made up the largest segment of the Dutch economy, cereal production in the Netherlands could not keep up with demand particularly by the seventeenth century as migration from the southern provinces contributed to population increases. The provinces of the Low Countries traditionally had depended on imported grain from the south (France and the Walloon provinces) and when crop failures interrupted the flow of grain from the south, the Dutch began to import grain from the Baltic. Baltic grain imports experienced sustained growth from about the middle of the sixteenth century to roughly 1650 when depression and stagnation characterized the grain trade into the eighteenth century.

Indeed, the Baltic grain trade (see below), a major source of employment for the Dutch, not only in maritime transport but in handling and storage as well, was characterized as the “mother trade.” In her recent book on the Baltic grain trade, Mijla van Tielhof defined “mother trade” as the oldest and most substantial trade with respect to ships, sailors and commodities for the Northern provinces. Over the long term, the Baltic grain trade gave rise to shipping and trade on other routes as well as to manufacturing industries.

Dutch Fishing

Along with agriculture, the Dutch fishing industry formed part of the economic base of the northern Netherlands. Like the Baltic grain trade, it also contributed to the rise of Dutch the shipping industry.

The backbone of the fishing industry was the North Sea herring fishery, which was quite advanced and included a form of “factory” ship called the herring bus. The herring bus was developed in the fifteenth century in order to allow the herring catch to be processed with salt at sea. This permitted the herring ship to remain at sea longer and increased the range of the herring fishery. Herring was an important export product for the Netherlands particularly to inland areas, but also to the Baltic offsetting Baltic grain imports.

The herring fishery reached its zenith in the first half of the seventeenth century. Estimates put the size of the herring fleet at roughly 500 busses and the catch at about 20,000 to 25,000 lasts (roughly 33,000 metric tons) on average each year in the first decades of the seventeenth century. The herring catch as well as the number of busses began to decline in the second half of the seventeenth century, collapsing by about the mid-eighteenth century when the catch amounted to only about 6000 lasts. This decline was likely due to competition resulting from a reinvigoration of the Baltic fishing industry that succeeded in driving prices down, as well as competition within the North Sea by the Scottish fishing industry.

The Dutch Textile Industry

The heartland for textile manufacturing had been Flanders and Brabant until the onset of the Dutch Revolt around 1568. Years of warfare continued to devastate the already beaten down Flemish cloth industry. Even the cloth producing towns of the Northern Netherlands that had been focusing on producing the “new draperies” saw their output decline as a result of wartime interruptions. But textiles remained the most important industry for the Dutch Economy.

Despite the blow it suffered during the Dutch revolt, Leiden’s textile industry, for instance, rebounded in the early seventeenth century – thanks to the influx of textile workers from the Southern Netherlands who emigrated there in the face of religious persecution. But by the 1630s Leiden had abandoned the heavy traditional wool cloths in favor of a lighter traditional woolen (laken) as well as a variety of other textiles such as says, fustians, and camlets. Total textile production increased from 50,000 or 60,000 pieces per year in the first few years of the seventeenth century to as much as 130,000 pieces per year during the 1660s. Leiden’s wool cloth industry probably reached peak production by 1670. The city’s textile industry was successful because it found export markets for its inexpensive cloths in the Mediterranean, much to the detriment of Italian cloth producers.

Next to Lyons, Leiden may have been Europe’s largest industrial city at end of seventeenth century. Production was carried out through the “putting out” system, whereby weavers with their own looms and often with other dependent weavers working for them, obtained imported raw materials from merchants who paid the weavers by the piece for their work (the merchant retained ownership of the raw materials throughout the process). By the end of the seventeenth century foreign competition threatened the Dutch textile industry. Production in many of the new draperies (says, for example) decreased considerably throughout the eighteenth century profits suffered as prices declined in all but the most expensive textiles. This left the production of traditional woolens to drive what was left of Leiden’s textile industry in the eighteenth century.

Although Leiden certainly led the Netherlands in the production of wool cloth, it was not the only textile producing city in the United Provinces. Amsterdam, Utrecht, Delft and Haarlem, among others, had vibrant textile industries. Haarlem, for example, was home to an important linen industry during the first half of the seventeenth century. Like Leiden’s cloth industry, Haarlem’s linen industry benefited from experienced linen weavers who migrated from the Southern Netherlands during the Dutch Revolt. Haarlem’s hold on linen production, however, was due more to its success in linen bleaching and finishing. Not only was locally produced linen finished in Haarlem, but linen merchants from other areas of Europe sent their products to Haarlem for bleaching and finishing. As linen production moved to more rural areas as producers sought to decrease costs in the second half of the seventeenth century, Haarlem’s industry went into decline.

Other Dutch Industries

Industries also developed as a result of overseas colonial trade, in particular Amsterdam’s sugar refining industry. During the sixteenth century, Antwerp had been Europe’s most important sugar refining city, a title it inherited from Venice once the Atlantic sugar islands began to surpass Mediterranean sugar production. Once Antwerp fell to Spanish troops during the Revolt, however, Amsterdam replaced it as Europe’s dominant sugar refiner. The number of sugar refineries in Amsterdam increased from about 3 around 1605 to about 50 by 1662, thanks in no small part to Portuguese investment. Dutch merchants purchased huge amounts of sugar from both the French and the English islands in the West Indies, along with a great deal of tobacco. Tobacco processing became an important Amsterdam industry in the seventeenth century employing large numbers of workers and leading to attempts to develop domestic tobacco cultivation.

With the exception of some of the “colonial” industries (sugar, for instance), Dutch industry experienced a period of stagnation after the 1660s and eventual decline beginning around the turn of the eighteenth century. It would seem that as far as industrial production is concerned, the Dutch Golden Age lasted from the 1580s until about 1670. This period was followed by roughly one hundred years of declining industrial production. De Vries and van der Woude concluded that Dutch industry experienced explosive growth after 1580s because of the migration of skilled labor and merchant capital from the southern Netherlands at roughly the time Antwerp fell to the Spanish and because of the relative advantage continued warfare in the south gave to the Northern Provinces. After the 1660s most Dutch industries experienced either steady or steep decline as many Dutch industries moved from the cities into the countryside, while some (particularly the colonial industries) remained successful well into the eighteenth century.

Dutch Shipping and Overseas Commerce

Dutch shipping began to emerge as a significant sector during the fifteenth century. Probably stemming from the inaction on the part of merchants from the Southern Netherlands to participate in seaborne transport, the towns of Zeeland and Holland began to serve the shipping needs of the commercial towns of Flanders and Brabant (particularly Antwerp ). The Dutch, who were already active in the North Sea as a result of the herring fishery, began to compete with the German Hanseatic League for Baltic markets by exporting their herring catches, salt, wine, and cloth in exchange for Baltic grain.

The Grain Trade

Baltic grain played an essential role for the rapidly expanding markets in western and southern Europe. By the beginning of the sixteenth century the urban populations had increased in the Low Countries fueling the market for imported grain. Grain and other Baltic products such as tar, hemp, flax, and wood were not only destined for the Low Countries, but also England and for Spain and Portugal via Amsterdam, the port that had succeeded in surpassing Lübeck and other Hanseatic towns as the primary transshipment point for Baltic goods. The grain trade sparked the development of a variety of industries. In addition to the shipbuilding industry, which was an obvious outgrowth of overseas trade relationships, the Dutch manufactured floor tiles, roof tiles, and bricks for export to the Baltic the grain ships carried them as ballast on return voyages to the Baltic.

The importance of the Baltic markets to Amsterdam, and to Dutch commerce in general can be illustrated by recalling that when the Danish closed the Sound to Dutch ships in 1542, the Dutch faced financial ruin. But by the mid-sixteenth century, the Dutch had developed such a strong presence in the Baltic that they were able to exact transit rights from Denmark (Peace of Speyer, 1544) allowing them freer access to the Baltic via Danish waters. Despite the upheaval caused by the Dutch and the commercial crisis that hit Antwerp in the last quarter of the sixteenth century, the Baltic grain trade remained robust until the last years of the seventeenth century. That the Dutch referred to the Baltic trade as their “mother trade” is not surprising given the importance Baltic markets continued to hold for Dutch commerce throughout the Golden Age. Unfortunately for Dutch commerce, Europe ‘s population began to decline somewhat at the close of the seventeenth century and remained depressed for several decades. Increased grain production in Western Europe and the availability of non-Baltic substitutes (American and Italian rice, for example) further decreased demand for Baltic grain resulting in a downturn in Amsterdam ‘s grain market.

Expansion into African, American and Asian Markets – “World Primacy”

Building on the early successes of their Baltic trade, Dutch shippers expanded their sphere of influence east into Russia and south into the Mediterranean and the Levantine markets. By the turn of the seventeenth century, Dutch merchants had their eyes on the American and Asian markets that were dominated by Iberian merchants. The ability of Dutch shippers to effectively compete with entrenched merchants, like the Hanseatic League in the Baltic, or the Portuguese in Asia stemmed from their cost cutting strategies (what de Vries and van der Woude call “cost advantages and institutional efficiencies,” p. 374). Not encumbered by the costs and protective restrictions of most merchant groups of the sixteenth century, the Dutch trimmed their costs enough to undercut the competition, and eventually establish what Jonathan Israel has called “world primacy.”

Before Dutch shippers could even attempt to break in to the Asian markets they needed to first expand their presence in the Atlantic. This was left mostly to the émigré merchants from Antwerp, who had relocated to Zeeland following the Revolt. These merchants set up the so-called Guinea trade with West Africa, and initiated Dutch involvement in the Western Hemisphere. Dutch merchants involved in the Guinea trade ignored the slave trade that was firmly in the hands of the Portuguese in favor of the rich trade in gold, ivory, and sugar from São Tomé. Trade with West Africa grew slowly, but competition was stiff. By 1599, the various Guinea companies had agreed to the formation of a cartel to regulate trade. Continued competition from a slew of new companies, however, insured that the cartel would be only partially effective until the organization of the Dutch West India Company in 1621 that also held monopoly rights in the West Africa trade.

The Dutch at first focused their trade with the Americas on the Caribbean. By the mid-1590s only a few Dutch ships each year were making the voyage across the Atlantic. When the Spanish instituted an embargo against the Dutch in 1598, shortages in products traditionally obtained in Iberia (like salt) became common. Dutch shippers seized the chance to find new sources for products that had been supplied by the Spanish and soon fleets of Dutch ships sailed to the Americas. The Spanish and Portuguese had a much larger presence in the Americas than the Dutch could mount, despite the large number vessels they sent to the area. Dutch strategy was to avoid Iberian strongholds while penetrating markets where the products they desired could be found. For the most part, this strategy meant focusing on Venezuela, Guyana, and Brazil. Indeed, by the turn of the seventeenth century, the Dutch had established forts on the coasts of Guyana and Brazil.

While competition between rival companies from the towns of Zeeland marked Dutch trade with the Americas in the first years of the seventeenth century, by the time the West India Company finally received its charter in 1621 troubles with Spain once again threatened to disrupt trade. Funding for the new joint-stock company came slowly, and oddly enough came mostly from inland towns like Leiden rather than coastal towns. The West India Company was hit with setbacks in the Americas from the very start. The Portuguese began to drive the Dutch out of Brazil in 1624 and by 1625 the Dutch were loosing their position in the Caribbean as well. Dutch shippers in the Americas soon found raiding (directed at the Spanish and Portuguese) to be their most profitable activity until the Company was able to establish forts in Brazil again in the 1630s and begin sugar cultivation. Sugar remained the most lucrative activity for the Dutch in Brazil, and once the revolt of Portuguese Catholic planters against the Dutch plantation owners broke out the late 1640s, the fortunes of the Dutch declined steadily.

The Dutch faced the prospect of stiff Portuguese competition in Asia as well. But, breaking into the lucrative Asian markets was not just a simple matter of undercutting less efficient Portuguese shippers. The Portuguese closely guarded the route around Africa. Not until roughly one hundred years after the first Portuguese voyage to Asia were the Dutch in a position to mount their own expedition. Thanks to the travelogue of Jan Huyghen van Linschoten, which was published in 1596, the Dutch gained the information they needed to make the voyage. Linschoten had been in the service of the Bishop of Goa, and kept excellent records of the voyage and his observations in Asia.

The United East India Company (VOC)

The first few Dutch voyages to Asia were not particularly successful. These early enterprises managed to make only enough to cover the costs of the voyage, but by 1600 dozens of Dutch merchant ships made the trip. This intense competition among various Dutch merchants had a destabilizing effect on prices driving the government to insist on consolidation in order to avoid commercial ruin. The United East India Company (usually referred to by its Dutch initials, VOC) received a charter from the States General in 1602 conferring upon it monopoly trading rights in Asia. This joint stock company attracted roughly 6.5 million florins in initial capitalization from over 1,800 investors, most of whom were merchants. Management of the company was vested in 17 directors (Heren XVII) chosen from among the largest shareholders.

In practice, the VOC became virtually a “country” unto itself outside of Europe, particularly after about 1620 when the company’s governor-general in Asia, Jan Pieterszoon Coen, founded Batavia (the company factory) on Java. While Coen and later governors-general set about expanding the territorial and political reach of the VOC in Asia, the Heren XVII were most concerned about profits, which they repeatedly reinvested in the company much to the chagrin of investors. In Asia, the strategy of the VOC was to insert itself into the intra-Asian trade (much like the Portuguese had done in the sixteenth century) in order to amass enough capital to pay for the spices shipped back to the Netherlands. This often meant displacing the Portuguese by waging war in Asia, while trying to maintain peaceful relations within Europe.

Over the long term, the VOC was very profitable during the seventeenth century despite the company’s reluctance to pay cash dividends in first few decades (the company paid dividends in kind until about 1644). As the English and French began to institute mercantilist strategies (for instance, the Navigation Acts of 1551 and 1660 in England, and import restrictions and high tariffs in the case of France ) Dutch dominance in foreign trade came under attack. Rather than experience a decline like domestic industry did at the end of the seventeenth century, the Dutch Asia trade continued to ship goods at steady volumes well into the eighteenth century. Dutch dominance, however, was met with stiff competition by rival India companies as the Asia trade grew. As the eighteenth century wore on, the VOC’s share of the Asia trade declined significantly compared to its rivals, the most important of which was the English East India Company.

Dutch Finance

The last sector that we need to highlight is finance, perhaps the most important sector for the development of the early modern Dutch economy. The most visible manifestation of Dutch capitalism was the exchange bank founded in Amsterdam in 1609 only two years after the city council approved the construction of a bourse (additional exchange banks were founded in other Dutch commercial cities). The activities of the bank were limited to exchange and deposit banking. A lending bank, founded in Amsterdam in 1614, rounded out the financial services in the commercial capital of the Netherlands.

The ability to manage the wealth generated by trade and industry (accumulated capital) in new ways was one of the hallmarks of the economy during the Golden Age. As early as the fourteenth century, Italian merchants had been experimenting with ways to decrease the use of cash in long-distance trade. The resulting instrument was the bill of exchange developed as a way to for a seller to extend credit to a buyer. The bill of exchange required the debtor to pay the debt at a specified place and time. But the creditor rarely held on to the bill of exchange until maturity preferring to sell it or otherwise use it to pay off debts. These bills of exchange were not routinely used in commerce in the Low Countries until the sixteenth century when Antwerp was still the dominant commercial city in the region. In Antwerp the bill of exchange could be assigned to another, and eventually became a negotiable instrument with the practice of discounting the bill.

The idea of the flexibility of bills of exchange moved to the Northern Netherlands with the large numbers of Antwerp merchants who brought with them their commercial practices. In an effort to standardize the practices surrounding bills of exchange, the Amsterdam government restricted payment of bills of exchange to the new exchange bank. The bank was wildly popular with merchants deposits increasing from just less than one million guilders in 1611 to over sixteen million by 1700. Amsterdam ‘s exchange bank flourished because of its ability to handle deposits and transfers, and to settle international debts.

By the second half of the seventeenth century many wealthy merchant families had turned away from foreign trade and began engaging in speculative activities on a much larger scale. They traded in commodity values (futures), shares in joint-stock companies, and dabbled in insurance and currency exchanges to name only a few of the most important ventures.


Building on its fifteenth- and sixteenth-century successes in agricultural productivity, and in North Sea and Baltic shipping, the Northern Netherlands inherited the economic legacy of the southern provinces as the Revolt tore the Low Countries apart. The Dutch Golden Age lasted from roughly 1580, when the Dutch proved themselves successful in their fight with the Spanish, to about 1670, when the Republic’s economy experienced a down-turn. Economic growth was very fast during until about 1620 when it slowed, but continued to grow steadily until the end of the Golden Age. The last decades of the seventeenth century were marked by declining production and loss of market dominance overseas.


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Golden Age Thinking

In Midnight in Paris, struggling novelist Gil Pender (played by Owen Wilson) feels like a fish out of water in modern times.

On a trip to Paris with his fiance and future in-laws, Pender romanticizes the idea of writing in the City of Lights during the freewheeling Roaring 20s.

If only he could go back to that time, all of his problems would be solved and he would be much happier.

Michael Sheen plays Paul, a know-it-all who tries to set Pender straight on his nostalgia for another time:

Nostalgia is denial – denial of the painful present… the name for this denial is golden age thinking – the erroneous notion that a different time period is better than the one one’s living in – it’s a flaw in the romantic imagination of those people who find it difficult to cope with the present.

This scene provided some nice foreshadowing for the rest of the movie.

Through some movie magic, Pender ends up getting transported back to the 1920s on his midnight strolls through Paris, hanging out with the likes of Ernest Hemingway, F. Scott Fitzgerald, Gertrude Stein, Picasso, T.S. Eliot and Salvador Dali.

On these ventures back in time he falls for 1920s Adriana (played by Marion Cotillard) but she doesn’t see her own time as the golden age of Paris.

So when Gil and Adriana are transported back to the late-1800s Belle Epoque period she feels that must be the most wonderful time in history to live.

Of course, when Gil asks some people from that time what they thought the best era was, they answer the Renaissance.

It’s easy to look back at previous generations or maybe your own childhood and conclude things must have been better.

A survey of Americans, Brits and the French asked people whether life in their country is better or worse today than it was 50 years ago. Nearly one-third of the Brits, 41% of Americans and nearly half of French people said things are worse now.

Johan Norberg recently wrote an excellent article at the Wall Street Journal explaining why this happens:

Psychologists say that this kind of nostalgia is natural and sometimes even useful: Anchoring our identity in the past helps give us a sense of stability and predictability. For individuals, nostalgia is especially common when we experience rapid transitions like puberty, retirement or moving to a new country. Similarly, collective nostalgia—a longing for the good old days when life was simpler and people behaved better—can also be a source of communal strength in difficult times.

Another reason is that historical nostalgia is often colored by personal nostalgia. When were the good old days? Was it, by chance, the incredibly short period in human history when you happened to be young? A U.S. poll found that people born in the 1930s and 1940s thought the 1950s was America’s best decade, while those born in the 1960s and 1970s preferred the 1980s. In the 1980s, the popular TV show “Happy Days” was set in a nostalgic version of the 1950s today, the popular series “Stranger Things” fondly conjures the fashion and music of the 1980s.

For the majority of households in America, the period from 1900-1950 may have ushered in many of the biggest technological changes for any generation in history.

People were introduced to several luxuries we now take for granted – radios, refrigerators, washing machines, irons, full electricity in their homes, private indoor toilets, central heating, air conditioning, automobiles and more.

The high school graduation rate jumped from just 10% in 1900 to well over 50% by 1950. The average life span when from 57 to 72.

By almost any measure the world was a far better place in 1950 than it was in 1900.

Yet many people in 1950 didn’t see it that way.

Frederick Lewis Allen wrote the definitive book on how America transformed in the first half of the 20th century with The Big Change: America Transforms Itself, 1900-1950. He describes the plight of the upper-middle class in 1950 and how they longed for the days of 1900:

Because wages in the building trades—and the costs of building materials—were much lower than today, they could live in much larger quarters. Because servants’ wages were much lower and candidates for servants’ jobs were in abundance, they could staff these larger quarters amply. Furthermore they were spared many of the expenses which most of their descendants take as a matter of course: the cost of an automobile (much greater than that of a horse and carriage) the cost of such extra gadgets as electric refrigerators, washing machines, radios, television sets, or what not the cost of a college education for children of both sexes and very likely the cost of an extra home for week-end or summer use. (As we have seen, fewer reasonably well-to-do Americans had “summer places” then than now.) So the man whose salary now would command a rather cramped apartment might then have occupied a house which today would seem grandly large.

Elderly people who look back today upon childhoods lived under any of the circumstances which I have just been describing sometimes regard them with nostalgia. Life seems to have been much simpler in its demands then, and certain of the amenities seem to have been much more accessible. It was easier then than now, these people feel, to maintain a sense of the identity of the family. People who live in ample houses are better able to take care of old or invalid or ineffective relatives than families with less space at their command. Indeed it is quite possible that part of the social security problem of our time—the widely expressed need for pensions, medical insurance, unemployment insurance, etc.—arises out of the fact that many families no longer can shelter those whom they used to consider their dependents—grandma, who used to have a third-floor room, or eccentric Cousin Tom, who was tucked away in the ell. Even when one makes every allowance for the many good things of today which the prosperous of 1900 (and those who approximated their way of life) had to go without, one must admit that there is a basis for the nostalgia.

I’m sure no one felt sorry for the well-to-do people of the 1950s who were no longer able to pay such low wages for their servants but you can see how pervasive nostalgia can be even for those who have seen their lives improved by leaps and bounds.

When I was a freshman in college, the seniors would always regale us with stories about how much better the party scene was when they first arrived on campus. I scoffed at these stories until my friends and I said the same thing when we were seniors.

Over time people tend to remember the positives more than the negatives.

Norberg cited the research of schoolchildren returning from summer vacation. When they were asked to list both the good and the bad from their summers, the lists were basically the exact same length. When the same exercise was repeated a few months later, the good side of the ledger tended to get longer while the bad side got shorter. By the end of the year only the good stuff remained in their memories.

There is nothing wrong with feelings of nostalgia. In some ways, building a portfolio of nostalgic feelings in your memory bank is what life is all about.

But the good old days are probably not as grand as you think.

Newspaper columnist Franklin Pierce Adams, who himself was writing during the roaring 20s, once remarked, “Nothing is more responsible for the good old days than a bad memory.”

This Golden Age of Porn Has a Depressing Downside

Don’t pretend you don’t know who Jesse Jane is. If you weren’t illegally downloading her scenes on Kazaa or buying her award-winning 2005 porn flick, Pirates, then you’re not… me.

Depending on who you ask, we’ve been living in the golden age of porn since the invention of porn. In 2018, porn consumers are as golden as we’ve ever been: ultra high-def, virtual reality, sex toys that look like honest-to-god disembodied genitalia. But for those making porn, the golden age ended with the rise of the internet and the decline of DVD sales.

At 38 years old, legendary adult actress Jane sits on the MILF side of the porn spectrum. She lives a quiet life with her family in Oklahoma. But even though she’s been officially retired since 2007, the world can’t forget Jesse Jane, and she can’t forget the life she left behind. We sat down with Jane to get an update on the state of the porn (still pretty great), cam girls (less great), and Jane’s lifelike new sex toy (really, really great).

GQ: When did you first break into the industry?

Jesse Jane: Fifteen fucking years ago. It was big, it was glamorous, it was crazy. I remember coming into it like, What the fuck did I sign myself into?

What’s different about filming porn now versus filming porn then?

There's such a fucking difference. I got into porn right at the perfect time, when porn stars mattered. Porn stars back then, they were big, glamorous. You walked into a room, you turned heads. Everybody knew who you were because they actually had to buy your product or DVDs, everything. Porn was so naughty, but everybody watched it. Now, no one makes money like they did back then even with toy deals and appearances. Now all these cam girls say, "Yeah, I'm a porn star.” But they're not.

It's become more about the shock value, instead of something sexy.

They do stuff like triple anal or gang bangs or shove baseballs in their asses. It's totally different now. We never did that before. It's become more about the shock value, instead of something sexy. The internet killed the business, and now the only people that get noticed are the people who go for shock value. So, three dicks in your ass or a baseball bat.

I mean, in my head, because I'm such a technical person, I'm like, “Why would you get off on a baseball bat?” I don't get it. I'm trying to see the sensuality of it, I don't get it. You know?

What kind of porn do you watch?

I actually like amateur stuff, like Playboy. I'm so crazy erotic in my head, I make up some fucked up shit. Honestly, I'm not gonna lie, I get myself off more than anybody could.

It's kind of cool. But the thing is, I can't get off to my friends. I can't sit there and watch my friends getting some on camera.

I get that. I don’t even like seeing my friends shirtless. What’s one piece of advice for hopeful porn stars?

A lot of girls that try to get in are looking for extra money. They think, “I can get this money and nobody's gonna know.” If you come into this industry hoping nobody's gonna know, don’t do it. Somebody's friend or coworker or cousin or who fucking knows—somebody's gonna see the scene you did and tell somebody who knows you, or your family. and you're fucked. Oh, also: If you're getting into the industry and you're a girl and you don't like girls, please don't do a girl-girl scene.

And how about for the girls who want people to find out and want to do boy-girl or girl-girl? .

Do all the free interviews, podcasts—whatever—because that's how you're gonna brand yourself and get your name out there. Especially if you're new. Don't listen to an agent bullying you ⟊use they want a bigger cut—bullying you into a different scene that you're not comfortable actually doing.

Speaking of branding, let’s talk about your new sex toy.

It's crazy, right? They've made it so realistic. I was shooting the videos for it yesterday and they were laughing at me ⟊use I couldn't stop finger-fucking into it. What the fuck? I'm a girl. I'm not even a dude, so if I'm impressed as a girl, people will be impressed.

Was it, like… fun to make?

Getting your body parts molded is a very interesting process, to say the least. First you meet a complete stranger and say “Hi, nice to meet you,” and then get naked and spread your legs to get your vagina molded. So they make this solution: It’s like a gooey putty that then hardens as it molds into your body parts. They did my vagina first, and then they did my butt. You bend over doggy and they just pour it in you and you sit there for 30 min. Last is your mouth: You slightly open your mouth and you can’t move or breathe thru it, you have to breathe through your nose.

So, what’s next for you? Would you ever do porn again?

The adult industry is just not the same anymore. Don’t get me wrong—I still love porn—but the internet is slowly killing the industry, making it all about shock. I’m known for being crazy in my scenes, but I’m just not about what objects I can shove inside me, or how many dicks I can fit in my ass at the same time. I would work on a project-by-project basis, and if it was something sexy or something with my friends, I would absolutely love to. I miss it! I always had fun performing on camera. It’s great sex with great people and it always turned me on that people watched me.

Education in the Islamic Golden Age

W e often see references to a Golden Age of Muslim learning that flourished in the historical Khorasan region. This period was quite far spread out – starting from 750 AD with the rise of Abbasid Caliphate and continuing till the Mongols devastated the Muslim lands and peoples of Central Asia in the 13th century. Though some embers continued to sparkle for two more centuries, the destruction of great centres of scholarship like Samarkand, Balkh, Bamiyan, Herat, Rey, Nishapur and Baghdad, and wholesale slaughter of their inhabitants effectively put an end to this learned era.

There were thousands of physicians, astronomers, geographers, historians, mathematicians, philosophers, theologians and poets in this Islamic Golden Age. This kind of profuse proliferation of sciences and arts in a society is an evolutionary process that cannot occur in a cultural vacuum.

From a manuscript of the Shahnameh – the Vizier Bozorgmehr discusses a game
of chess with Khosrow I

This article will study the education system in the erstwhile Greater Khorasan region that gave rise to such abundance of scholarship. The geographical extent of this region is the area east of the Tigris including Northern Iran, Western Afghanistan and the Central Asian states. Much of the information contained herein is derived from the 4th volume of exhaustive 7-volume History of Civilization of Central Asia compiled by UNESCO, that derives information from scores of studies and written contemporary records.

Before Islam reached North Iran and Transoxania, the region was a crossroad of various religions and cultures such as Persian, Greek/Hellenic, Buddhist, Shamanist, Animist, Manichaen, Indian, Nestorian and Zoroastrian. After the Muslim conquest, Arab supremacy came to be challenged by local population allowing various Persian and Turk dynasties to become autonomous rulers. These dynasties included the Turgesh Khagnate (724 AD), Tahirids (821 AD), Saffarids (867 AD), Samanids (874 AD), Buwayhids (932 AD) and Ghaznavids, followed by the Seljuks. The interaction of these varied religions and people created a society that was conducive for the spread of liberal sciences.

The Sassanid-era student learned to compete in wrestling, backgammon and chess. He was skilled in the art of cookery and was well acquainted with the varieties of garden flowers and the means of extracting various perfumes from them

The seeds of education in the Persianate lands came from the Byzantine world and Nestorian Christians. An ancient “Persian school” of theological studies was established in the 2nd century at Nisbis in the upper Mesopotamia that moved to Edessa in the 4th century when the former fell to the Persian forces. Following the Nestorian schism, when emperor Zeno closed this school in 489 AD, the school moved back to Nisbis and its scholars settled in the Persian territories. Both these cities are situated in now Turkey, along its border with Syria.

Warqa bin Naufal, a cousin of Hazrat Khadija (RA) who was the first to testify to the Prophet’s (PBUH) revelations, too, was a Nestorian scholar. The Nisbis school played a major role in the spread of education, first in Sassanid and then in Muslim Persia. Nestorians played a major role in the translation of Greek manuscripts into Latin, which were then retranslated into Arabic during the Abbasid era, igniting the spread of scientific and philosophical thoughts in the Muslim world.

Astronomical Observatory where Nasir-al-Din Tusi studied the heavens

In the early third century, the Roman Emperor Valerian was defeated and taken prisoner by Sassanid King Shapur I. The Roman prisoners of war included men of medicine who were employed by the Persians to establish a bimaristan – medical school and hospital – at Gundeshapur in modern-day Khuzestan province. Later, when the East Roman Emperor Justinian closed the pagan schools and perhaps the ancient Academy at Athens too, their staff migrated to Gundeshapur – making it an important centre of Greek medical practices. Indian scholars, too, joined this famed school and introduced Indian methods of medicine. Subsequently, the Gundeshapur hospital served as a model for many such bimaristans across the Caliphate.

The modern hospital is a concept that grew in the Abbasid caliphate. The US National Library of Medicine website states,

The hospital was one of the great achievements of medieval Islamic society. […] The hospitals were largely secular institutions, many of them open to all, male and female, civilian and military, adult and child, rich and poor, Muslims and non-Muslims.”

This code of conduct continues to guide hospitals in the modern world.

The Courtyard of the Mustansiriya Medical College – an educational institution originally built by Abbasid calpih al-Mustansir

There are reports of large well-staffed and financed hospitals from Central Asia to Baghdad, Damascus and Andalusia. A bibliography on medicinal writings from that era exists on the above quoted website.

The Sassanid rulers of pre-Islamic Persia had established a wide network of educational institutions in their empire to train and educate the dabirs, as the government secretaries and scribes were known. These schools were called dabiristan and were places of higher secular studies. A letter dated to the reign of Khusrow I (531-579) narrates the study cycle of a young scribe. The studies began in the temporal subjects of history, literature and philosophy and subsequently went on to mastering the skills of horse riding, archery, javelin and chawgan (polo). This was followed by music, where the student learnt to play the lute, the drum and the stringed instrument. Furthermore, the student learned to compete in wrestling, backgammon and chess. He was skilled in the art of cookery and was well acquainted with the varieties of garden flowers and the means of extracting various perfumes from them.

As may be seen from this list, the range of liberal knowledge dispensed in the dabiristans was fairly wide and comprehensive. Their curriculum under Islam in the ninth and tenth centuries AD was probably no different. Ibn Sina proposed sending children to school from the age of 6. He believed that a teacher should be wise, devout, sagacious and knowledgeable about the methods of moral and intellectual schooling. He advised that teaching should be a gradual process and that boys should acquire manual skills, irrespective of their social status. Girls were excluded from formal education with the result that we do not find female scholars in this entire period.

The Seljuk-era Blue Madrassah in modern-day Sivas was opened to visitors by Turkish authorities after restoration this year

Al-Ghazali advised the secretaries to study the arts of drafting administrative documents, and to study geography, mathematics, geometry, astronomy, medicine, medicinal plants and the systems of underground irrigation. This comprehensive syllabus compares well with the Italian universities during the early Renaissance where, according to Peter Burke in his The Italian Renaissance, the studies consisted of grammar, logic, rhetoric, philosophy, arithmetic, geometry and medicine.

The Persian term Dabiristan for educational institutions was replaced with Arabic terms maktab and madrassah in 741 AD when the Ummayad caliph Hisham bin Abdul Malik mandated the use of Arabic as official language and prohibited the employment of non-Muslims in offices. In the 9th and 10th centuries, education took a firm root. For instance, one day in 997 a teacher of law in Nishapur drew a crowd of over 500 students. Another teacher attracted classes of over 300.

Islamicate eductional culture drew heavily upon the pre-Islamic Sassanid tradition

The Transoxanian model of schools provided the basis for the “Seljuk type” of madrassah. When the great Seljuk vizier Nizam al-Mulk founded the celebrated Nizamiyya madrassah in Baghdad in 1065, he simply copied the Bukharan and Khorasanian models. Some sources mention as many as 33 madrassahs in Khorasan before the appearance of the first madrassah in Baghdad. The Seljuks established further madrassahs in Khorasan and Transoxania. Nizam al-Mulk built educational institutions at Esfahan, Nishapur, Herat, Merv and other cities where higher religious and secular education was provided by the madrassahs and elementary education by the maktabs. During the Seljuk suzerainty in 1164, Benjamin of Tudela, a Jewish traveller from Spain, mentions ten rabbinical schools in the Jewish colony in Baghdad.

The career of Nizami Aruzi Samarqandi typically illustrates the educational and non-parochial culture of the region in that era. Born in Samarkand, he notes in his Chahar Maqala that he was a courtier, an astronomer and a physician to Ghaznavid sultans. He claimed to have studied astronomy under Umar Khayyam in Nishapur, where he spent five years. He also spent time in Herat, Balkh and Tus. In the last city, he visited Firdowsi’s tomb and collected material on the poet. His above mentioned book, that includes a scholarly introduction and preface, is a discourse of four professionals that Nizami thought a ruler must have around him. It has been translated into English, French, Italian, Spanish, Japanese and Swedish but, alas, not Urdu. We know about Nizami because one of the manuscripts of his book survived the vicissitudes of the Mongol and Timurid invasions. There were hundreds of such scholars in the rich literary environment of that time who contributed to the educational heritage of the era.

Between the tenth and twelfth centuries AD, there were numerous madrassahs containing libraries in Bukhara, Khwarazm, Merv, Nishapur, Balkh, Ghazna and Khuttalan. According to Abul-Fadl Bayhaqi, there were over 20 madrasas in the region of Khuttalan, and in large numbers in the region of Balkh and Ghazni. According to Muhammad Salih, the city had 400 madrassahs before it was captured by the Mongols in 1220. At that time there were some two dozen madrassahs in Merv. Madrassahs were especially concentrated in Nishapur, the capital of Khorasan and one of the great centres of learning in the East. Many of them held large collections of books. When the city was taken by the Oghuz Turks in 1153, most of these collections were burnt, and the remainder were sold for the price of the paper. Imam al-Haramayn Juwayni and al-Ghazali were professors at the Nizamiyya madrassah of Nishapur.

The spread of education in the region created a tolerant society. So much so that the rationalist blind Syrian scholar Abu’l Ala Al-Ma’arri of the 11th century wrote tracts openly critical of religious belief, which resonate even today with those who lean towards atheism. Yet he lived unmolested and died a natural death. A quote often associated with him is “There was nothing to be seen more marvellous than man.” It may be added, however, that the spirit of relative tolerance existed in Khorasan and Spain, whereas in Baghdad, the Hanbali faction continued to follow more hardline religious views and indulged in violence against perceived heretical ideas.

The basic techniques of teaching and education in the maktabs are methodically described in many contemporary works. They include Ibn Sina (980–1037), in a chapter entitled “The Role of the Teacher in the Training and Upbringing of Children”, Al-Ghazali in the book titled The Alchemy of Happiness, Burhan al-Din Zarnuji (12th century) in Teaching the Student the Method of Study, Nasir-al-Din al-Tusi (13th century) in Nasirean Ethics, Jalal-al-Din Dawani (15th century), Ibn Qutayba in Training of the Secretary and in the writings of classical poets of Persian literature such as Rudaki, Firdawsi, Nasir-i Khusraw, Sacdi, Hafiz, Jami and others. This impressive list of writings on the subject of education underlines the importance that was attached to teaching during the Islamic Golden Age.

The Mongols carried forward the spirit of education. Nasir-al-din Tusi built an observatory and a madrassah on the instructions of Hulagu Khan. Masud Beg built twin madrassahs in Bukhara, in each of which, according to al-Juwayni, 1,000 students could study. However, during the civil wars of the 1270s, when the city was laid waste for seven years, the madrassahs and their libraries were burnt down. Later in the late 14th and early 15th centuries, Timur pillaged Iran, India, Turkey and Syria – even though his descendants continued to patronise arts, sciences and architecture Samarkand in 15th century.

Thereafter the springs of scholarship dried up and the region descended into relative obscurantism. Intellectually, it is a sad state of affairs from which it has not recovered fully as yet.

Parvez Mahmood retired as a Group Captain from PAF and is now a software engineer. He lives in Islamabad and writes on historical and social issues. He can be reached at [email protected]

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Common purpose: Realigning business, economies, and society

Carlota Perez: The Thought Leader Interview

Executives of an Uncertain Age

The Internet was originally seen as a vehicle for decentralizing ownership and control. Instead, we&rsquove moved to the era of Google and Facebook, where the algorithm becomes the means of production. Those who own the algorithm capture the value. You thus see a much greater concentration emerging among a very limited number of platform companies.

The same technology could still lead to an open economy, where the means of production are more distributed. We would then see, for example, decentralization in energy, with micro-production of power, maybe blockchain-based micro-transactions for energy trades, crowdsourced finance, 3D printing, and more innovative means of local food production.

In which direction are we headed? It looks to me as though we&rsquore headed toward increasingly closed economies at the moment, toward concentration. Would you agree?

PEREZ: In the 1920s, wealth distribution looked the same as it does today. The top 1 percent received 25 percent of society&rsquos total income. By the 1950s it was down to 10 percent. Every installation period brings inequality until the state comes back actively to reverse it and relieve social unrest. In the Belle Époque of the third surge, at the turn of the 20th century, poverty was rife and most European countries followed the example set by Bismarck in the 1880s with some form of welfare state. This was also the time of the Progressive era in the United States.

Handicapping the Transition

KLEINER: What would have to happen to turn the corner this time?
PEREZ: The last time a period of crisis ended, after World War II, there was a concerted effort by many government and business leaders to create a unified, prosperous, long-lasting recovery. The Marshall Plan, the Bretton Woods Agreement, the conversion of wartime industries to peace, and the rebuilding of Europe and Japan all played a role. Unfortunately, today&rsquos leaders haven&rsquot yet taken on the role they played at this point in past surges. Their stepping up last time was a catalyst for ending the crisis.

To get there, perhaps we need to have a crisis that is truly felt as a crisis. That seems to be the self-correction mechanism of capitalism things need to get so bad that stability gets threatened seriously. Even at the worst part of the financial crisis in 2008, the threats weren&rsquot felt sufficiently strongly by enough decision makers.

But now the people are angry. They are ready to follow demagogues. Leaders around the world should know that they ignore popular unrest at their peril.

Much of the unrest can be traced back to the austerity policies in Europe and the U.S., which were based on the premise of letting the market operate on its own. Markets do well on their own during the installation period, when a technological revolution is beginning and there is a lot of experimentation. But that period is already over in this surge. It led to two major bubbles: the Nasdaq one in the late 1990s, and the easy-credit one of the mid-2000s.

After the collapse in 2008, financial institutions stopped funding business, because they saw business as risky, and took refuge in pure speculation with bonds, debts, and derivatives. Only the new ICT giants, which live in their own bountiful world doing what they please with abundant cash, are investing. Except for some venture capital for tech startups, new potential projects and innovations across the economy cannot find credit. The market is not working and won&rsquot take us out of feeble, jobless economic growth. The austerity policies are keeping the world from recovery. If a company had as high a failure rate as these policies have had, the CEO would have been replaced long ago.

Even now, the decision makers are still waiting. They don&rsquot understand that, as in every previous technological revolution, the public sector has to lead the way back after the major bubble collapses. Only with intelligent government policies providing clear directions for profitability will markets work again. And only with effective policies to restore jobs and incomes will social unrest wane.

KLEINER: Doesn&rsquot business have a role to play in this?
Of course! Business needs to modernize itself and to work with government, not against it, in getting us out of this mess. But, as in the 1930s, business leaders tend to oppose government intervention on principle. Last time, it took the experience of World War II for them to discover the advantages of working together with government. After the war, even business leaders supported high taxes (as high as the 90 percent top rate under Eisenhower) and a generous welfare state. These policies spurred dynamic demand. The support for austerity and minimal government today shows that those lessons have been forgotten.

KLEINER: There has been some movement toward consensus. The 2016 Paris Agreement encouraged collaboration among government and business leaders (particularly tech leaders such as Bill Gates and Mark Zuckerberg) around climate change. Some technological platforms, such as Industry 4.0, are bringing disparate operations together. The populists are forcing some governments to streamline their internal bureaucracies and raise their productivity. Some recent elections &mdash for example, those in France and the Netherlands &mdash showed a clear appetite for consensus solutions. Commentators, including some in our own firm, PwC, are underscoring the urgent need to reframe the current system so that the economy once again delivers for society. (See &ldquoCommon Purpose: Realigning Business, Economies, and Society,&rdquo by Colm Kelly and Blair Sheppard.) Don&rsquot elements like these help?

PEREZ: They may. But things could also get much worse before they get better. I think there are several possible catastrophes that could finally wake up the world&rsquos leadership. One would be the takeover of power in more countries by demagogues and populists, along with growing social unrest and violence everywhere. Another could be a third financial crash, which in my view is plausible, starting either in the West or in China. The bailout would not be harder this time. And we should not rule out a climatic catastrophe, such as a devastating hurricane hitting a city like New York.

These times are sometimes compared to the 1960s, but they are very different. The 1960s took place at the maturity phase of the last surge, when relatively affluent, innovative groups like the hippies could flourish, complaining about excess consumerism: &ldquoStop the world we want to get off.&rdquo The followers of today&rsquos populist leaders are not interested in inventing something new. They are angry and resentful they are victims of an enormous, super-unfair inequality. They want to go back to a better past.

Getting from our current fragmented world to some kind of golden age seems impossible right now. But at similar turning points in previous surges it also seemed impossible. In the 1930s Depression, it was hard to imagine those hungry, unemployed people, standing in line at the soup kitchens, as owners of a suburban home with a car at the door. And yet it happened, in an astonishingly short period.

New Forms of Productivity

KLEINER: How would the shift to a golden age affect jobs and unemployment?
Every technological revolution destroys old jobs. In solving the problems of the previous surge, it increases productivity, producing more goods and services with fewer people. The new productivity takes a different form each time, but it ultimately doesn&rsquot have to mean fewer jobs overall. It means a change in the way jobs are defined.

At the turn of the 20th century, mass production (the fourth surge) did the same thing to shop production that electronic production is doing to mass production now. It eliminated jobs &mdash at first. Mass production could create many identical units at low cost. The ideal policy was thus to make energy and materials cheap and labor more expensive, thereby creating more mass-market consumers using cheap fuels and electricity. After World War II, governments in the industrialized world did just that, raising the cost of labor by supporting labor unions, establishing payroll taxes, and passing minimum-wage laws. Cheap raw materials and energy, in the form of fossil fuels, came from the developing world. Even though businesses chafed at high salaries, they benefited from the increases in productivity and in demand.

Today, it&rsquos energy and materials that are too expensive (or will become so if growth resumes strongly), and they need to be reduced to cut costs. Environmental threats reinforce this incentive. Thus businesses are redesigning products for smaller carbon footprints, fewer materials, and zero waste. Many products are also being turned into services &mdash prerecorded music into streaming, for example.

The amount of labor needed is also being reduced, so there&rsquos a double gain in productivity coming. Robots and artificial intelligence are already replacing many jobs and are likely to replace more.

JOHNSON: If current trends hold, regular jobs look like they could be blitzed. Timesheet-billed jobs in major corporations are going. IPsoft has a chatbot called Amelia that can carry out 25,000 conversations at once. IBM is developing a bot that can interpret financial regulations.

PEREZ: How much of the economy do you think will be affected?
There are various estimates. The Frey and Osborne study from the Oxford Martin School estimates 47 percent of today&rsquos white-collar jobs in the U.S. and U.K. could be automated by 2035. A recent World Bank study suggests that 69 percent of all Indian jobs are vulnerable to automation.

PEREZ: But there is always a counterbalance, and it is linked to a new vision of the good life, which becomes a prevailing theme of the golden age. In the second surge, it was urban living, as defined in the cities of Victorian Britain from the 1850s. In the third it was the cosmopolitan living of the Belle Époque. In the fourth, it was the American way of life from the 1950s, which compensated for the jobs lost to technology with massive employment in construction, retail, services, and government.

Something similar could happen this time. This next golden age will probably involve smaller carbon footprints, a collaborative economy, preventive healthcare, creativity, experiences, exercise, lean use of materials, and industrial ecology.

It would mean a general shift from products to services, from tangibles to intangibles, and from mass production to customization. Whereas mass production emphasized economies of scale &mdash making cheaper identical goods &mdash the new digital technologies thrive on diversity and adaptability. The higher the price premium, the better-paid the jobs are likely to be.

There may also be a further shift away from owning to renting or sharing products. Even today, when people use a credit card to buy an appliance, they are actually renting it until they have paid it off. If it breaks down, it&rsquos often cheaper to buy another one than to fix it &mdash in effect, &ldquorenting&rdquo another one.

We could change to a higher-employment society simply by taking this model to the next logical step: Let credit cards evolve into rental portals with Amazon-like websites [for, say, appliances]. It would mean massive employment in maintenance and installation workers (using electronic diagnosis of breakdowns and 3D printing of parts), while products would change hands many times and help all those who have just entered the consumption ladder rent older &mdash but still good &mdash appliances for small sums.

KLEINER: What would happen to manufacturers?
The rental model could be good for them too. The mass production model was based on planned obsolescence, in which companies produced enormous quantities of shoddy goods. This created artificial demand in saturated markets by making people replace products that broke down or wore out. But if markets are growing around the world, as in a time of full global deployment, then companies could produce luxurious, expensive, top-tech, and durable goods that would last many years and be continually upgraded as technology evolved. There would be no more spare part inventories, only software to make them. And the new millions of people entering the middle class could be equipped with durable goods without materials becoming scarce and expensive, without harming the planet, and with increasing efficiency.

JOHNSON: I&rsquod like to play devil&rsquos advocate. Once we fully enter the age of the algorithm, the age of zero marginal cost machine production, our skills become close to redundant. We&rsquore ornaments, complements to the machine. Another option is to stop prioritizing AI and the triumph of capital over labor. We could do the reverse: prioritize natural intelligence, harnessing the cognitive surplus that&rsquos still out there in abundance. Where I live in Kilburn, in North London, an old Italian man who lives two doors down from me has got about 200 neighbors involved in making local wine: crowd-picked, crowd-trampled and crowd-bottled. He&rsquos unlocking the natural and human assets that are there. Could this type of reskilling and community-based artisanship, augmented by technology, start to form part of a new cultural imagination?

PEREZ: I agree that local production can become an important and complementary part of the new economy. But people need a broad array of goods, including food, shelter, and transportation. Do you really think we could go back to making everything we consume through community artisans?

A Model of Social Growth

JOHNSON: And can we do the opposite? After the recent cybersecurity threats, I worry that the hyperconnected economy will be shown to be so hackable and non-resilient that we turn back to making our own stuff out of necessity.

And then what is the role of the large institutions that dominate today? Are they an anachronism? Would they continue to exist in an economy and society organized around very different, more organic principles? Are we looking, in other words, at the death of &ldquobig&rdquo?

PEREZ: We don&rsquot need the death of big. We only need the death of &ldquomass.&rdquo Instead of rendering giant companies obsolete, the capitalist system might complement them by opening other opportunities for wealth creation of another sort. Fintech startups are already forcing large banks to change the way they operate, and some startups might take over many of the banks&rsquo functions.

John Maynard Keynes was right. Someone needs to create demand before innovation and investment can come forward. The last time it was by building houses on suburban land. But how do you create demand now? For what products and services?

That&rsquos where emerging economies are important. The so-called developing countries were not included in the mass production surge of the 20th century, because the advanced world was more interested in their natural resources than in their consumer market. But that is changing now. As countries like China and India continue to grow like mad, they provide demand needed by business producers, including food and materials producers in other emerging economies. These new producers will take advantage of much greater global demand to fund their development, which in turn should increase global demand for capital and consumer goods. It&rsquos a new positive-sum game waiting to be set up.

Ultimately, when things get bad enough, we will need an equivalent of the Marshall Plan, to help develop all countries. There would be building projects for the tropical world: some for areas affected by rising sea levels, others for drought-ridden areas, all with large-scale engineering, using solar and other new forms of energy, and helping to develop those countries. This would be paid for as it has been in past surges, through new commitments that could include tax regimes that would have felt impossible to achieve just a few years before &mdash but now everybody, including businesses, will end up recognizing how their fates all hang together.

KLEINER: How would that differ from what economic development groups such as the World Bank have done all these years?
It would be much more ambitious, and more attuned to the conditions and opportunities of the information age and of a globalized economy. The critical question is: Can a positive-sum game be established among all the world&rsquos nations? The need for full global development today is enormous, if only because of the growth in consumer demand that&rsquos needed. China and India alone cannot serve that purpose. This is also the only way to reduce migration from places like the Middle East and Latin America. Even if ISIS is defeated, you must establish enough jobs in the less-developed economies to bring back hope to their populations.

It&rsquos essential for every economy to specialize, so that it can participate competitively in global markets. But each piece of territory has to abandon the race to the bottom and define its identity, connected to its history or to strengths that it creates. Its businesses, universities, regulatory priorities, and tax regime must all favor the chosen direction for success, preferably defined by a consensus-building process. I think the advanced industrial countries will end up specializing in capital-intensive goods, high-level engineering, and luxury products. The lagging countries will have to build their own manufacturing bases. Some may specialize in raw materials&ndashbased industries, including those producing sophisticated food and chemical products. Some will have their own entrepreneurs, innovating in products and services that reflect their culture and identity. Diversity is in the nature of information technology just as much as homogeneity was natural to mass production.

The Local Nation with Global Reach

KLEINER: You&rsquore describing a kind of local mercantilism in which every country has some geographic center of excellence, like Silicon Valley in the United States.
Yes, because globalization will force local and national economies to distinguish themselves through specialization, if they want to survive. Some of these specialized economies could be regional. For example, Europe has cultural traditions that favor environmental sustainability. The region is already beginning to build its economy around a &ldquoEuropean way of life.&rdquo The Scandinavian countries are showing the way. Germany declared an energy transition to renewables. Obviously, there will be cultural and climatic differences: Denmark would emphasize wind energy and Greece would favor solar. Some countries would innovate in healthcare, others in new materials. Each would have its specializations, but the identity of a cluster in the global economy would belong to Europe as a whole.

JOHNSON: But isn&rsquot the strength of Europe also its diversity? The fact that it is composed of units with immense ethnic, religious, linguistic, and cultural differences, that coexist and are part of a supranational grouping &mdash doesn&rsquot that preclude thinking of Europe as having one way of life?

PEREZ: On the contrary, the advantage of ICT is that it thrives in variety. When I talk about a possible European way of life, I imagine multiple innovations that define different variants of the aspirational &ldquogood life&rdquo with lots of technology and human-based services, plus health and creativity. That is even easier for Europeans than adopting a standardized American way of life (which they happily did). But to say &ldquosmart green growth&rdquo should be the general direction, as I would suggest, opens all the space in the world for variety while fostering convergence in skills, suppliers, scientific and technological capabilities, services for business models, and so on.

KLEINER: Are you saying that a few leaders, in a few places, can begin creating the conditions for a new golden age?
Yes. That is how it always happens. A few pioneers start. Others imitate them. When it propagates further, there is massive change, involving a change of attitude in both business and government. We are talking about institutional innovation, new consensus-building mechanisms, and a huge revamping of the tax system, of education, and of the welfare state. They are all obsolete and not fit for purpose. How can current unemployment insurance work in the gig economy, where people are lifelong entrepreneurs, for example, conducting research on a piecework basis, or driving for ride-sharing companies, without the support or stability they need?

Ultimately, in my opinion, the most feasible solution &mdash however difficult and complex it may seem &mdash is probably universal basic income (proposed by, among others, Milton Friedman). Everyone, from childhood to old age, gets a minimal basic income that covers bare necessities, so that they can exist safely in the gig economy. That would truly grow the economy from the bottom up. We would get rid of dereliction and of the humiliating exercise of proving you need public assistance. Basic money would be there in an ATM for each person, deposited every month. The ones that earn enough (and the millionaires, of course) would quickly return the money in taxes. In the end, only those who really need it will be a cost to society, probably not much more than is now spent in unemployment insurance, child support payments, the costs of dealing with dereliction and hunger-related crime and the salaries of the bureaucrats who do the means testing and make the decisions. They can go on to more creative jobs.

JOHNSON: One thing makes me feel pessimistic about this. The current state of politics seems to be moving in the opposite direction, with a fraying of the perceived link between taxation and representation. And technology is enabling even more authoritarianism, with algorithms determining our news feeds, social media data shaping elections, and sensors monitoring dissent by capturing video and sound.

But I can also think of reasons to be optimistic. The same trend toward decentralization in technology is showing up in politics. Already local entities are taking on more responsibility &ndash most recently, the collective efforts of cities to tackle climate change. And even though we face severe social, economic, and environmental challenges, I think there are opportunities already emerging for technology, potentially backed by government, to promote the fuller global development that you refer to. Right now, as an example, subsistence farmers can lease the M-Kopa solar-powered light, equipped with a SIM card, for 50 cents per day, and use it to get a microloan of US$36 for a hand pump. This reduces healthcare costs and triples the crops they can harvest in one study, this type of technology raised annual incomes from $180 to $1,800 per person. There are 1.2 billion people around the world without power. That&rsquos an untapped market. If we can deploy capital to scale up these businesses, it&rsquos got to be in the interests of capitalism to deliver.

KLEINER: How does all this change begin?
We need to look at history. Leaders would have to understand their role in this crucial moment, move to open a consensus-building process, and be determined to take bold measures. Their efforts, hopefully supported by business and society, could be the basis for the global golden age of the information economy.


“The Golden Age” was based on several factors (5). Muslims following the guidelines of the Prophet studied and searched for knowledge (1, 5, 6). The Quran is clear: “The scholar's ink is more sacred than the blood of martyrs”, while the Prophet promoted medical research preaching that “For every disease, Allah has given a cure.” (5) Communication became easier because the Muslim Empire united extensive geographic areas. Scholars travelled to teach or share ideas. Furthermore, the Arabic language became a unifying factor (4, 5). Translations from Greek, Latin, and Chinese into Arabic were innumerable, thus removing language barriers for scholars. During the same period, Arabs learned from the Chinese how to produce paper and books became more available (5). Libraries were established in Cairo, Aleppo, Baghdad, and urban centers in Iran, central Asia, and Spain, while bookshops with thousands of titles opened in several cities (4, 5). Finally, The House of Wisdom, an academic institution serving as a university, was established in Baghdad in 1004 C.E. (5).

Mercenaries and the Development of Monetary Exchanges in the Celtic World

42In the fourth century BC, the Mediterranean peoples (Greeks, [105] Romans, Carthaginians, etc.) already had their own coins. When they came into contact with them, the Celts began to use money. They began by imitating foreign coins circulating in Gaul. [106] Some authors [107] see this as a consequence of the Celts’ sack of Delphi in 279 BC, but this event is more mythological than real. Even so, throughout the fourth and third centuries, the Celts hired themselves out for gold to Mediterranean conquerors. They served Philip II of Macedon (382-336 BC) and then Alexander the Great [108] (336-323 BC), accompanying him as far as Babylon. [109] They were at the Battle of the Metaurus under the Carthaginian, Hasdrubal. [110] They also served under Dionysius at Tarentum and Syracuse. [111]

43Celtic mercenary troops were paid considerable sums of money. [112] Their ties to the armies of the great conquerors [113] probably explain how Macedonian and Punic coins came to Gaul.

44Original Mediterranean coins remain rare. This is explained by the coins’ high unit value: 8.6 grams of gold. These coins could be quickly melted down and reused. Only about fifteen gold staters, made in the mints at Pella, Amphipolis, Abydos, and Lampsacus, have been found in Gaul. [114] The phenomenon affected the entire Celtic world, as proven by the discovery of 160 Philip imitations [115] at Tacs near Beszterce (in the county of Besztercze-Naszod, Hungary) or the deposit in Brasso [116] (Kronstadt, county of Brasso, on the border with Romania), comprising a combination of Philip, [117] Alexander, and Thasos imitations. Indeed, further east, the Celts generally copied the silver tetradrachms of Alexander the Great. [118]

45In Luxemburg and the Trier area, the most northerly region to produce imitations, copies were made of the stater issued by the Lampsacus mint under Philip III, bearing the head of Helios and the monogram AP, which identified the mint. No fewer than six examples of this Gallic coin are known. Their distribution in Gaul became part of the distribution of the first Gallic imitations. The first Gallic coinages were faithful copies of Philip’s staters down to the finest detail, even showing the variations [119] between Macedonia’s mints. The distribution map [120] of these early imitations shows that each Gallic issue is a copy of a coin owned by the engraver. While Philip’s stater was of pure gold and weighed 8.6 grams, the imitations were lighter (8.4-8.2) and the alloy less pure, although still in excess of 90 % pure gold. The process of issuing imitations also had the advantage of introducing fractions such as half, a quarter, and even a twenty-fourth of a stater, faithful to the iconography of the original. In Manching, some twenty-fourths of a gold stater have been found with silver obols in a small coin purse. Tiny silver coins (Kleinsilber), sometimes weighing far less than a gram, were in circulation among the Boii in Pannonia and Noricum. [121]

46Imitations of drachms [122] from Emporiae and Rhoda, Greek trading posts on the Spanish coast, provide evidence that this money was looked upon favorably in the very heart of Gaul, most probably from the middle of the third century BC (finds at Bridiers, Creuse) prior to the Roman conquest of Spain.

47The use of several Tarentum prototypes in Gallia Belgica perhaps reflects regular links connected to the tin trade. In settlements and at sanctuaries, these were usually Masallian obols, [123] which were in circulation at the time of the most ancient strata (third century BC) and are probably a trace of real monetized exchange. [124]

48The amount of precious metal in circulation in the fourth and fifth centuries BC was considerable. By contrast with the preceding period, it now exchanged hands as wars were fought, either as spoils or as payment to mercenaries. By way of example, there is the treasure the Romans seized from the Boii in 193 BC: 1,471 gold torcs, 247 pounds of gold, 2,340 pounds of silver, 234,000 coins from a two-horse racing chariot. [125] Money, however, continued to be an instrument apparently reserved for the elite and a small number of troops, compared to issues in the second and first centuries BC, which produced thousands of gold, silver, and bronze coins. The volume, like the circulation, of third century issues was still limited. The use of these coins and their denominations, with their high melt value, was restricted. As was the case in Marseille, where dowries were paid in “Philips” while the city itself used a silver standard, the Celts must first have used coins in rituals of passage (dowries, inheritances, coming-of-age ceremonies) to pay tolls or to pay for protection, taxes, the purchase of luxury items, and the munificence of the elites.

Further Reading

The standard biography of Charles IV in English is Bede Jarrett, The Emperor Charles IV (1935). Another fullength study is Gerald G. Walsh, The Emperor Charles IV, 1316-1378: A Study in Holy Roman Imperialism (1924). There is a short account in the Cambridge Medieval History, vol. 3 (1932). Background works which include excellent studies of Charles IV are Denys Hay, Europe in the Fourteenth and Fifteenth Centuries (1966), and R. R. Betts, Essays in Czech History (1969). □

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