• About Oren
  • Edited Anthologies
    • The Odds Are Against Us
  • Fiction by Oren Litwin
  • Lagrange Books
    • Calls for Submissions
      • The Future of Audience-Driven Writing
      • Archives
        • Call for Submissions— “Asteroids” Science-Fiction Anthology
        • Call for Submissions— “Family” Fantasy Anthology
        • Call for Submissions—Military Fiction Anthology
        • Call for Submissions—”Ye Olde Magick Shoppe” Fantasy Anthology
    • The Wand that Rocks the Cradle: Magical Stories of Family
    • Ye Olde Magick Shoppe
  • Politics for Worldbuilders
  • Scholarship

Building Worlds

~ If You Don't Like the Game, Change the Rules

Building Worlds

Monthly Archives: June 2012

The Social Effects of Weapon Technology (and How to Use in Writing)

22 Friday Jun 2012

Posted by Oren Litwin in Better Fantasy, History, Military, Politics, State Formation, War, Weapons, Writing

≈ 2 Comments

Tags

cannon, Charles Tilly, democracy, Fantasy, fiction, firearms rights, greek city states, Guns, mass participation, politics, Samuel Finer, second amendment, war, writing

Mao said that power flows from the barrel of a gun.  He also said (and this is less remembered) that therefore, the Party must control the gun, and the gun must not control the Party. In other words, the brute facts of violence are important, but so are the social arrangements that control them.

This has been true throughout most of history. Whoever has control of violence will tend to gain political power. In several times and places, the military did not actually rule, but submitted to a legitimate authority—the United States is a decent example of this, or most the the European powers in the last few decades. But more frequently, those with the means of violence make the rules. Recent events in Egypt and elsewhere bear this out, as if we needed more examples.

That said, it makes a huge difference what the state of military technology is. For that will determine if weapons are available to the mass of people, or if they are restricted to only an elite few. Samuel Finer argued that his monumental History of Government (now out of print, and sadly hard to get—inexcusable on the part of Oxford Press in this time of print-on-demand!) that when weapons were widely available, politics tended to feature mass participation and broad egalitarianism, if not outright democracy as in the case of ancient Greek city-states and their hoplites. (Or, one might add, early America.)

On the other hand, when specialized weapons gave advantages to those wealthy enough to afford them, power tended to be concentrated in the hands of a few. For example, the rise of powerful kings in Europe had much to do with the advent of cannon—fantastically expensive to make, requiring a large specialized infrastructure of foundries. Furthermore, with cannon French kings were able to reduce the fortresses of their rebellious nobles, consolidating their own power.

In an earlier age, the armored knight was the undisputed master of the battleground, able to crush unarmored opponents with ease. Thus, power tended to be held by the armored warlords of the feudal era, whose rule depended on their use of naked force. Then the free Swiss militias developed their famous style of pike warfare, which completely nullified the advantages of the knight.

So weapons technology played a large role in politics. When considering a given era, we must ask: how common are weapons? Are they easy to use, or do they require specialized training? Do the wealthy gain any particular advantage from their wealth, or can mass armies defeat them?

This line of argument is one of the bases of the American gun-rights movement (examples can be found here, here, or here, but there are many others). It was also argued by Max Weber that the rise of the Israelite kings (over a previously egalitarian society) was the result of advanced armor, which gave a significant battlefield advantage to those wealthy enough to buy such armor.

This reasoning can also help explain the rise of child soldiers. P.W. Singer argues that child soldiers are now more feasible because small arms are becoming more advanced and lighter. Children can now use weapons effectively on the battlefield in spite of their small size and physical weakness, which has not been true for hundreds of years if ever. As a result, child soldiers are becoming a frequent sight in war-torn areas, since it is relatively easy for a brutal would-be warlord to coerce children into fighting for him (or her, I suppose).

Similar issues are beginning to arise because of drone technology. Robots have often been used for fun by hobbyists; but it is only a matter of time before these can be weaponized, and made available off the shelf. Governments will be unable to stop the spread of drone weapons into the general populace, and the social effects of this shift are likely to be extreme.

******

So as a writer, how do you use this?

First of all, when you are world-building, be careful to compare the state of weapons technology with the social system. Kings and castles are unlikely when no one wears armor or carries swords, or if everyone does. Magic can also be a weapon, in this sense, so if powerful magic is rare, it should generally translate into considerable power (unless there are social reasons otherwise).

You can write an interesting story about social upheavals caused by changing technology. For example, I’m presently messing around with a story where magic previously relied on using decades-long mental training to draw sigils of power in your mind; but then someone figured out how to get the same effects with sigils carved into physical media, such as discs of wood, and then everything collapsed into chaos as weapons technology exploded into the populace.

A great example of this concept is in the early installments of the excellent webcomic Schlock Mercenary. A new means of transport allowing for functional teleportation is rapidly weaponized, and bombs are teleported into government offices across the galaxy. Chaos and war break out on hundreds of planets, and things only die down when scientists figure out how to block teleportation into protected areas.

I hope this piece proves useful. At any rate, it should be food for thought.

Advertisement

Tax Farming

17 Sunday Jun 2012

Posted by Oren Litwin in Better Fantasy, Economics, Finance, History, Politics, State Formation, Writing

≈ 5 Comments

Tags

bank charter, banking, casinos, Eugene White, Fantasy, French Revolution, government, indirect taxation, IRS, Margaret Levi, Milton Friedman, Of Rule and Revenue, tax farming, taxes, writing

April 15th is a date seared into the brains of most Americans—being the due date for us to turn in our tax returns to the Internal Revenue Service. In the modern era, most governments have wide-ranging powers to tax their populaces. Yes, you have problems with tax evasion here and there, but most urban dwellers are used to paying taxes as a matter of course (though we certainly aren’t happy about it).

When you think about it, though, the smooth collection of taxes requires a vast infrastructure of information processing, bureaucracy, and coercive enforcement if necessary. All of that came about very late in historical terms. In the United States, tax withholding from our salaries was only instituted during World War II, for example. (In a delicious bit of historical irony, the concept was developed in part by famed free-market economist Milton Friedman, when he worked for the Treasury in the early days of the war. For the rest of his life, he hoped that tax withholding would eventually be abolished.) The first income tax in the United States was a temporary measure enacted during the Civil War.

In other countries, the story was similar. The seminal work on this subject, at least in comparative politics, is Margaret Levi’s Of Rule and Revenue, a study of taxation systems throughout history. Levi’s basic argument is that rulers are constrained in how they can tax populations by their ability to coerce the people, the ease with which money can be hidden, and limitations in measuring technology. (I previously wrote of similar concerns behind the institution of English nobility.) In short, early rulers had a very hard time raising taxes directly, simply because it was next to impossible to extend their control over the populace.

So what did they do? The strategies of rulers were many, but in this piece I want to focus on a particular practice called “tax farming.” In its basic form, the ruler created some sort of tax or tariff—a 10% tax on salt, for example—but rather than collecting the taxes itself, the ruler would sell off the right to collect the tax to some private party. This was the tax farmer. The tax farmer would pay a large sum up front to the government, and in exchange would gain the right to ruthlessly apply the salt tax to anyone within his jurisdiction and pocket the proceeds.

This is not the same as modern privatized tax collection, where the private party must transmit collected taxes to the government. Here, the tax farmer is the direct beneficiary of tax revenue. In general, tax farming was incredibly lucrative for the farmer, while the state was forced to sell the future revenues at discount prices, simply because it lacked the capacity to collect taxes itself. (Here, we see another example of a principal-agent problem.)

A nice (free!) overview of tax farming in the 18th century can be found here, by the eminent scholar Eugene White. The French monarchy, for one, was heavily dependent on tax farming for revenue. This dependence was a major contributor to the French Revolution, for two reasons. First, royal revenues were always rather stunted because the tax farmers absorbed much of the take, weakening state power. Second, the tax farmers of France were notorious for harshly oppressing the populace in order to squeeze every last sou that they could. (Similar concerns were at play with the Publicans of ancient Rome; a nice overview can be found here.)

This is all very interesting, but why is it worth knowing? In fact, it is surprising just how relevant the principle of tax farming can be, even in modern society. Take casinos, for example. They pay a large sum of money to local and state governments, and in return gain the right to siphon vast amounts of money from willing gamblers. The voluntary nature of the transaction makes it more palatable, of course, but even then the addictive nature of gambling muddles things.

Even more striking is the history of the banking system. That subject is so fascinating that it deserves its own post, but for now, suffice it to say that for decades, many U.S. states raised nearly half of their revenue by selling monopoly banking charters. In return, a particular bank would be given exclusive control of its town, free to earn considerable profits from its residents.

Neither casinos nor early banks are really the same as tax farming, of course. But they are both indirect means of collecting revenue, in which private parties gain outsized profits compared to the government’s take. Other examples can be seen with only a little effort, and the idea of tax farming is a useful lens for viewing much government policy.

Aside from that, this is another opportunity to bang my hobby horse of more realistic fantasy writing. As noted, tax farming was often the cause of massive oppression of the people, and resulting political unrest. I’d bet my last cent that some budding fantasy author could spin a much more interesting story using tax farming as an ingredient, than the typical “Evil Overlord wants to oppress the peasants for the lulz.”

The key thing to remember is that a king turns to tax farming when he needs more money that he can easily extract with his own efforts. It is the hallmark of lands with difficult travel, poor communication, and weak and divided political loyalties. In time, the tax farmers can become extremely powerful in their own right, perhaps even rivaling the established authority in the same way that Italian mercenaries would often overthrow their employers. If that isn’t fertile soil for a good story, I don’t know what is.

Fantasy Fiction and Ideas for Writing Long Journeys

13 Wednesday Jun 2012

Posted by Oren Litwin in Better Fantasy, State Formation, Writing

≈ 2 Comments

Tags

1633, art of not being governed, Charles Tilly, David Weber, Eric Flint, Fantasy, James C. Scott, medieval transport, writing

I’ve said before that I’m not a stickler for realism in fantasy, per se; but neglecting how things actually worked has costs, because authors miss opportunities for more interesting stories. The long journey is a perfect example. Going back deep into the mists of time, epic heroes are expected to take long journeys. J.R.R. Tolkien codified the trope for modern fantasy writers, and now you can hardly swing a cat without hitting a dozen fantasy books wherein characters travel from one side of their world to the other. A few examples suffice: Terry Brooks and the Shannara series, the Wheel of Time, to a lesser extent George R. R. Martin’s Song of Ice and Fire.

The thing is that most of these depictions bear very little resemblance to how actual traveling tended to work in premodern societies. Again, that’s not necessarily a bad thing; if realism gets in the way of a good story, then by all means, let’s chuck it out! But understanding how transportation worked back in the day can help us create new stories, or put new twists on old stories.

The first thing to understand is that most societies do not keep track of distances between locations; they keep track of how long it takes to get there. This makes sense; it might be only a few miles from one side of a steep mountain to the other, but actually traveling that distance could take most of a day. On the other hand, two villages might be twenty miles apart from each other, but if the intervening space is a flat, grassy plain, then it would be a relatively easy journey of less than a day. Travel time becomes more important than distance as the crow flies—after all, we aren’t crows.

(James C. Scott, in his brilliant Art of Not Being Governed, notes that the upland societies he studied would describe distances in terms of units of time that are relevant to their situation. For example, you might say that a particular clearing is “three boilings of rice away.” Or, someone’s house might be “two cigarette smokings away.” In a society without clocks, such units of time make sense as well.)

Travel paths are guided by the contours of the land. This is particularly true for vehicles; the United States railroads, for example, were laid out where they were (along flat areas and valleys) because the heavy coal-freight cars could not climb up grades of more than a few degrees. In consequence, communities further up in the hills had no access to the railroad. Whereas American towns and cities had previously been spread across several kinds of terrain, once the railroad arrived population was inexorably sucked into the lowlands, where the new towns could access the national transportation network.

In the ancient world, the easiest and fastest way to travel anywhere was by water. This was especially the case when you had to transport a lot of cargo, such as grain. Scott writes that Chinese merchants transporting grain by ox-cart would only travel about 250 kilometers; any further than that, and the oxen would eat more grain than they carried. Charles Tilly notes that it was roughly as expensive to transport grain from one side of the Mediterranean to the other by ship, as it was to transport it across 100 miles on land. This had drastic effects; it was common for seaport warehouses to be filled to bursting with grain, while scarcely a few hundred miles away villages were starving.

It is no surprise that most cities are placed next to a river. Rivers were the highways of the premodern world. Roads on land were important too, but were typically a second-best choice. The greatest cities stood at junctions between rivers, where merchants needed to transfer from one river to the other, or between a river and the sea. Amsterdam is a classic example.

On well-traveled roads, you typically ran into a village every several hours of traveling. Often, these villages were little more than an inn and a trading post, meant specifically to cater to travelers. Conversely, in times of political upheaval, good roads meant an easy passage for marauding bandits; small villages tended to evaporate as their residents fled for defended cities, or up into the hills where they could escape danger.

Traveling cross-country was possible but unusual. There would be no guarantee of food or easy passage, and it was dangerous to go off the path. Wild animals, poisonous plants, treacherous footing, all gave ample reasons to stay in the well-trodden areas. There is a reason that African explorers carried machetes. Otherwise, you simply couldn’t make it through the jungle. The European forest was similarly impassible. Mountainous areas too were formidable obstacles; have you ever tried hiking up a mountain?

Now, how can you turn all of this into plot elements? First of all, I believe there’s not enough fantasy-traveling over water. (A good counterexample is Eric Flint’s and David Weber’s 1633, not surprising given the emphasis on military logistics.) To be sure, most fantasy stories will have the obligatory canoeing sequence, but it is usually a short sequence soon forgotten. But imagine if your main mode of transport were to go down the length of one river, and then make portage to the next one, and the next? There are possibilities there for new sorts of plot obstacles, hair-raising dangers, river pirates, and more. Plus, you get the benefits of land mere feet away from your boat, allowing detours off of the river and into untamed wilderness whenever the plot demands it.

Second, because travel tends to follow predictable paths, it makes ambush far more likely and realistic. This can work for and against the heroes. There’s no need for contrivance to make sure your heroes intercept the dastardly villain, when said villain can only pick one realistic path to travel on.

Third, a bit of research can help you depict just how hard it really is to go off the road. If our heroes need to avoid danger by leaving the main highways, why not emphasize how this makes them giant studs?

Finally, how many times have you skimmed over yet another paragraph describing the heroes’ journeys? With a little more realism, such passages can actually become interesting to read, precisely because they can be filled with unexpected details. For example: if it is so expensive to transport goods over land, what goods are being transported and why?

I hope that this post can help you restore a sense of size to your fantasy worlds. Again, I’m not asking for realism for its own sake; but use the ideas here to come up with new stories to tell, or new ways to tell them. Difficulties in travel impose constraints; how your characters overcome those constraints is a story, if you want to tell it.

Coordinated versus Liberal Market Economies

11 Monday Jun 2012

Posted by Oren Litwin in Credit, Economics, Finance

≈ 6 Comments

Tags

banking, business, economy, finance, free market economies, hall and soskice, insider knowledge, intermediation, investment, varieties of capitalism

[Welcome! If you enjoy worldbuilding, check out my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders.]

Capitalist economies (not the same thing as free-market economies, necessarily) depend on those with money providing capital to firms that need it. For most of human history, most actual investment was done by a small number of people, those with the skills and inclination to form relationships with businesses. Vast amounts of money was economically sterile, being hoarded as gold or silver treasures in the vault of some nobleman or other (just as today one might stuff hundred-dollar bills into a mattress). For the economy to grow and develop, somehow a mechanism needed to be set up to allow savings to be automatically channeled into investment.

This mechanism was the banks. When you deposit money in a bank account, the bank then turns around and lends it to someone who wishes to borrow. The bank serves as an intermediary between you, the saver who wants nothing more than a safe place to store your money (with maybe a little interest on top), and the borrower. Thus, savings that were previously useless to the economy are now being recirculated. (This can lead to systemic fragilities, of course, but those must wait for another post.)

Most bank-dominated systems work in a style called relationship banking. A company forms a long-term exclusive relationship with a bank, that will provide access to capital in exchange for a large degree of control over the company’s decisions—the bank wants to make sure that the company isn’t going to waste the money, after all. This sort of system relies on personal relationships and insider knowledge more than on things like a credit score, which only came into common use in the 1980s or so.

Some economies, such as those in much of Europe, take this logic even further and structure their entire economy around such long-term relationships between firms. Business contracts, decisions on who to hire and how to train them, and access to capital are all made through a close-knit network of powerful executives; insider knowledge and relationships are the key factors here. This is called a coordinated market economy, and you can read a fuller description of it in Hall and Soskice’s Varieties of Capitalism. (Amazon link here.)

Coordinated market economies have some advantages over the American/British system of comparatively liberal market economies. The system in general is more stable; you don’t get the day-to-day disruptions common in the US economy, for example, because everything is based on long-term relationships. In particular, new upstarts find it very difficult to break into such a system, because they can’t get access to capital and they can’t win contracts from existing businesses. While this may seem bad to the American ear, it has the advantage that firms in such an economy can specialize in extremely narrow niches of production, leading to incremental innovation. This is why German companies are known for their precision manufacturing, for example: because they have the luxury of intense specialization in their particular areas.

On the other hand, because it is so difficult for new firms to compete, a continuing hazard of such economies is that the whole system begins to stagnate. Disruptive innovations find it hard to survive in such systems, and instead gravitate to the more open liberal market economies like the United States.

In a liberal market economy, access to capital for big firms is usually gained via the public markets: the stock market and bond market. This means that the long-term relationships typical of Continental economies are less important here. Instead, decisions about who to invest in are driven by the release of public data, for example in annual reports or tax filings. Using such data, market participants decide who to channel their capital to.

There are drawbacks to this system. Particularly in the last thirty years, company executives can be driven to chase quarterly targets at the expense of long-term viability. The business environment is volatile and always changing, making it extremely difficult to plot long-term strategy and to pursue incremental improvement.

On the other hand, this system is much more hospitable to disruptive innovation, as we can see just in the last decade or two. While it can be gut-wrenching while you’re in the middle of it, overall it leads to a more dynamic and healthy economic system over time; stagnation is less of a threat here.

The main difference between these two systems is in the ability to get investment capital without sucking up to a bank. From that relatively minor difference, massive differences in total economic structure can develop. (More details in the Hall/Soskice link.)

Again, institutions matter. And seemingly small differences in institutions can lead to major differences in outcomes.

Homeschooling, Credentials, and Community Colleges

07 Thursday Jun 2012

Posted by Oren Litwin in Economics, Education, Homeschooling, Politics

≈ Leave a comment

Tags

college, community college, credentials, Douglass North, Homeschooling, Institutions

Ever since the beginning of the homeschooling movement, homeschoolers have had a dilemma: how to get official recognition of the educational achievements of homeschooled children. Such official recognition is necessary, among other reasons, because employers need ways to discriminate between good and bad hires, and for a long time now a college diploma has been an easy signal of employee quality. (Even if the informational value of college degrees is declining in recent years… but that’s a different discussion.) Colleges, in turn, need some way to tell whether applicants are good students or not. What this means is that after having escaped the rigid quantification of traditional schools, homeschoolers need another way to signal their educational quality.

From the examples I’ve seen, many homeschoolers have addressed this problem by turning to community colleges.

Community colleges generally cater to adult students, as well as traditional students who want to take their general ed requirements more cheaply than a traditional college would cost. This eclectic student base means that entrance requirements end up being fairly permissive: if you show up, you can take a class. This is a boon to homeschoolers, who can rapidly accumulate college credits even without previous formal schooling, enabling them to get the credentials they need to go on to more prestigious colleges if they choose to.

Aside from how interesting this story is in itself, the reason I’m writing about it here is as an example of a larger tendency. Often, institutions that are set up for one reason provide unexpected possibilities, and get used by other people for reasons that no one anticipated. The idea that community colleges would be a key building block in the advancing subversion of the traditional primary education system was on nobody’s mind when they were created, I’m sure.

Similar examples in the same vein are many:  FDIC deposit guarantees, meant to protect bank deposits in the event of a bank failure, are now being used to underwrite market-traded instruments like equity-linked CDs. Agriculture subsidies ostensibly meant to defend the family farmer instead allow massive agri-processors like Monsanto and ADM to capture the market. And of course the 800-pound gorilla, the Internet, originally conceived as a way for military command-and-control to persist in the event of a nuclear strike.

The point is that a new institution creates new possibilities (or can close them off), and the new structured environment will give rise to behaviors that are hard to anticipate. This is one of the reasons why ambitious government interventions often have perverse effects: no one knows what the outcome of a policy change will be, because no one understands the full possibilities of the new system until people have a chance to play around with it. On the positive side, new institutions like the Internet or public capital markets are constantly giving rise to startling new behaviors, as innovations accumulate and interact with each other.

Homeschooling thus far hasn’t managed to compete seriously with traditional college, though it can compellingly compete with K-12 school. Part of that is because no one has yet figured out how to provide a credential that can do the job now done by a college degree. The time may not be far off, however. As college degrees become more expensive and less useful, more and more people are looking for alternatives. In one stark example, Peter Thiel is offering $100,000 fellowships for students not to go to college. Eventually, I suspect, traditional colleges will face as much competition as lower grades already do today. And the enabling factor may well be some institution whose possibilities are imperfectly comprehended today.

Bills of Exchange, Banking, and the Little Things

05 Tuesday Jun 2012

Posted by Oren Litwin in Credit, Economics, Finance, History

≈ Leave a comment

Tags

bill of exchange, Borrowing, interest rates, islamic finance, Medici, medieval banking, Middle ages, seigniorage

Jared Rubin writes about the diverging history of the Christian and Muslim systems of finance back in the Middle Ages. At the time, both Christianity and Islam was enforcing restrictions on lending at interest; Islam also had a ban on financial speculation in general. At the same time, the Islamic world had a financial tool called the bill of exchange, which was meant to facilitate the movement of money between cities. When this tool spread into the Christian world, it became the basis for an explosion of international banking unlike anything seen in the world before then. Why? And why did it not have this effect in the Islamic world?

Bills of exchange worked like this.  Suppose you were a merchant traveling from Baghdad to Basra, to buy trade goods there. However, you don’t want to carry a great deal of money with you; to do so, you would need to hire bodyguards, not to mention the pack animals necessary to carry the precious metal itself (remember, silver and gold are quite heavy). This could be quite expensive; for example, the cost of moving gold bullion from Rome to Naples in this period has been estimated at between 8% and 12% of its value. So you deposit your money with an associate in Baghdad, and receive a bill of exchange for its value. This you must present to your Baghdad associate’s business partner in Basra, who will then give you cash. In this way, you don’t need to physically transport cash. And later, the business partners in Baghdad and Basra can settle their own balance, perhaps with a similar bill of exchange going the opposite direction.

Now, one can think of this transaction in two ways, which are not mutually exclusive. First, the business partners in Baghdad and Basra are clearly providing a service to you, the merchant, who can avoid the danger and expense of transporting your money. But remember too that you are fronting money to the issuer of the bill of exchange. Looked at this way, the bill issuer is borrowing your money.

Islamic law came down firmly on the side of the first understanding. The law required the merchant to pay a fee to the bill issuer—that is, the bill issuer is effectively being paid to borrow money. Furthermore, bills of exchange were dated, and needed to be redeemed by the specified date. If a bill were redeemed late, the merchant would be forced to pay a cumulative penalty. Unscrupulous businessmen sometimes exploited this by refusing to redeem bills of exchange on time, inflicting the penalty on the hapless merchant.

What this meant was that it was extremely risky to deal with bills of exchange from people you didn’t trust. Furthermore, you had little incentive to expand the network of people whose bills you used, since you were being forced to pay for the privilege. So bills of exchange, while useful in certain circumstances, did not stimulate the creation of the sprawling banking networks that grew in Europe later.

To understand the effect of the bill of exchange in Europe, we must understand the difference in conditions.

European trade was made particularly difficult because the different lands each had their own currencies. Furthermore, kings and princes often imposed bans on importing foreign coins into their lands. These bans existed for the good of the ruler alone: when the ruler issues his own currency, he earns seigniorage, the difference between the value of the silver or gold in a coin and its face value. So the more of his coins a ruler can impose on a captive populace, the more money he makes. (Worse, it was a depressingly common practice for rulers in need of cash to debase their currency, reducing its silver content so that each coin was worth less in reality.)

So to trade across lands, a European merchant needed a way to convert currencies—without paying the massive fees that local princes usually demanded. The bill of exchange answered the need. A merchant would deposit money with a banker in Florence, let’s say, and receive a bill of exchange payable in Lyons. The difference was that the bill of exchange was for a different currency than was deposited.

This was prohibited in Islamic lands, where currency swaps of this kind were viewed as speculation. But speculation was not banned in Christianity. So merchants were able to evade capital controls by creative use of debt contracts. Even better, merchants could take advantage of the predictable shifts of currency rates so that they would be repaid in more valuable money than they had lent out, effectively earning “stealth” interest and evading the Christian prohibition on usury.

Thus, Christian merchants and bankers had a huge incentive to expand their ties with other cities, since every additional city offered more opportunities to issue bills of exchange and therefore to lend money profitably. This is how the fabled Medici banking network was built up, for example: by establishing subsidiaries in cities across Europe and transacting bills of exchange between them, at considerable profit.

The upshot was that the creative use of bills of exchange supercharged international trade in Europe (while stunting intra-national trade, since there was no profit to be made in exchanging currencies), where its effects in Islamic lands had been more modest. And in Europe it led to the creation of the first international banking empires, where it did nothing of the sort in Islamic lands. All because of a few seemingly minor details: the Muslim prohibition of speculating in currencies, and Islamic law allowing the bill issuer to charge the lender instead of the other way around.

What lessons can we take away from this? First of all, the little things can have big effects. Second, there’s no way to predict the systemic outcome of a given tool, once human ingenuity gets turned loose to play. Third, the history of finance is pretty cool.

On Revolutions in (Some) Fantasy Fiction

03 Sunday Jun 2012

Posted by Oren Litwin in Better Fantasy, History, Politics, Revolution, State Formation, War, Writing

≈ 6 Comments

Tags

Fantasy, fiction, moon is a harsh mistress, rebellion, revolution, writing

(This post has been retroactively made part of Politics for Worldbuilders, an occasional series.)

Traditionally, fantasy has lent itself to stories of heroic uprisings or revolutions, as the Evil Overlord is swept out of power by the brave protagonists and their loyal army of oppressed commoners. That can be a good story, and sometimes the stories are indeed quite good. It feeds directly into some of our cultural loves: rooting for the underdog, the reestablishment of justice and defeat of evil, and so on.

But what makes this literature trying for a student of comparative politics is how infrequently revolutions are handled with any degree of realism. Not that I demand absolute realism in all books touching on politics—far from it. Often we simplify the mechanics of a story to distill its essence. Still, what annoys me is that people end up telling the same bloody story over and over and over again. And this is so, I think, because the mental model most fantasy authors have of revolutions is so impoverished.

From what I’ve read, most fantasy authors have two archetypes for how a revolution goes off: Robin Hood (as refracted through Sir Walter Scott’s Ivanhoe), or the French Revolution and the various other Parisian dustups. Egregiously, I haven’t read any fantasy modeled after the American Revolution,* and only a single work of science fiction (Heinlein’s The Moon is a Harsh Mistress, a fun read). And most published fantasy writers live in the United States, for Heaven’s sake! And of course, the American Revolution is by no means the only other model you could look to.

The example that spawned this post is Steven Brust’s novel Teckla. (This is not, I hasten to add, because I have anything against Brust in particular, but only because it’s the book I happened to read.) In the book, an oppressed, illiterate underclass is being organized by a group of revolutionaries with the goal of blocking commerce into the capital city, in order to force reforms. To do so, the revolutionaries first endeavor to teach everyone how to read, so that they could then publish propaganda in newspapers.

This was the first point where I was tempted to throw the book across the room. In a real illiterate society, no one would have had the daft idea to publish a mass-market newspaper in the first place. It’s a bit like writing and selling manuals on how to use an iPod in the 1960s. Worse, written material would not be the most effective way to organize untutored masses anyway. Far more effective would have been using actual people to spread the message and organize more revolutionaries where they went, as was done by revolutionaries from Spartacus to Mao.

It got worse. The favored tactic of the revolutionaries was to build Paris-style barricades across the main road into the capital city. All well and good, except that a major mechanic of Brust’s entire series is that the ruling class knows how to teleport with magic. Barricades, or any static defense not augmented with its own magic, would be worse than useless.

So why did Brust rely on such tired tropes, even when they went counter to the very logic of his fantasy world? I suspect that the only model he had for how revolutions work was revolutionary France. And because he had no other mental model to work with, Brust did not have the building blocks that would have fit his story better.

And this is my point. When you study real historical revolutions with an eye toward fiction writing, you quickly find the potential for all sorts of stories that have rarely been told in Western fantasy. More realistic treatment of revolutions can be used to explore themes of divided loyalty, or how governments structure their environment to better exert their power, or how revolutionaries end up doing the same thing, or—and this is particularly fascinating—how civilians will often exploit the conflict between government and rebel, by extorting aid from both sides, or by denouncing resented neighbors as traitors to the cause (so that they will be executed and you can take their stuff).

At any rate, new stories, with new possibilities. This doesn’t mean that the old classics need to be chucked out; Robin Hood will always be a good story. But a creative author can take the old building blocks and mix in a few new things from real life, to make something original. A good place to start (not least because it’s free) is the 1970 classic by Leites and Wolf, Rebellion and Authority (PDF). It’s a study they carried out in the middle of the Vietnam War for the RAND Corporation, and has details from the history of Western counterinsurgency. Much recommended.

Oh, and if there is actually good fantasy or sci-fi out there that handles rebellions well, please let me know in the comments. I’d like to read it.

_______

* Which was not technically a revolution in the political-science sense, since the American social structure and forms of government remained more or less intact, and no one tried to extend the revolution to Great Britain. Really, you could best describe the colonial uprising as a war of secession from Britain.

Random Fiction Excerpt #2

02 Saturday Jun 2012

Posted by Oren Litwin in Military, NaNoWriMo, Politics, Writing

≈ Leave a comment

Tags

Mercenary, politics, Private Military Contractor, war, writing

In honor of Camp NaNoWriMo, here’s the beginning of another of my short stories:

“Well, Mr. Keegan,” Colonel Joe Ramirez said, leaning across his ornate desk intently. “Have you made your decision?”

For answer, Keegan smiled, took out his checkbook, and wrote out a check of $300,000 to the 512th Los Angeles Regiment, LLC. Ramirez grinned in return, took the check, and took out a small cherry insignia box from the cabinet behind hin. The box was empty, except for a pair of captain’s bars. Ramirez slid the box toward Keegan. “Welcome to the regiment, Captain Keegan. We’ll have your stock shares transferred to you by Tuesday.”

“One percent of the regiment’s outstanding equity, you said, sir?” Keegan spoke with a thick Cockney accent. As he spoke, he pinned his new rank insignia to the collars of his blank olive-drab uniform.

“Indeed, Captain.” Ramirez chuckled. “We want to make sure that our officers can share in the unit’s success.”

Making New Communities Out of Ideas, and National Novel Writing Month

01 Friday Jun 2012

Posted by Oren Litwin in NaNoWriMo, Writing

≈ 1 Comment

Tags

Institutions, Internet community, NaNoWriMo, national novel writing month, writing

Today is June 1, which means that it is also the start of the first month of Camp Nanowrimo, which is the “off-season” version of the better-known National Novel Writing Month. I’ve done NaNo for several years now, ever since I left undegrad. And while I don’t intend for this blog to be a “NaNo blog” exactly, I do think NaNo is a brilliant example of the kind of thing I do want to talk about here.

In NaNo, participants aim to write 50,000 words of fiction in a single month—averaging 1,667 words per day. A daunting task to the new writer, to be sure! Fortunately, the ethos of the NaNo community is that the quality of your writing is totally not important here. You must strangle your inner editor, gleefully embrace repetitive prose, invent absurd situations for your characters to fall into, and if all else fails have a crack squad of ninjas run into the room and attack your characters. Anything at all, as long as you get your word count out.

NaNo has been valuable to me as a writer, by helping me build a consistent writing habit (along with a conceptually related site, 750Words.com). It also gives me valuable writing practice which I certainly was not making myself do on my own.

And that is the point I’d like to discuss here. NaNo represents an institution—a framework or structure that helps people commit to certain goals. By building an internet community, and setting fun attainable milestones for people to focus on, the proprietors of the site inspired hundreds of thousands of people to do far more than they would have done themselves. In a very short time, relatively speaking, NaNoWriMo has changed people in profound ways.

It certainly took a lot of work to set up, but notice what it did not take. NaNo is not mandatory, does not use coercion or punishments for missing your goals, and does no advertising. It was simply a fun idea that took on a life of its own, and people bought in. And the people are the main thing that kept it going. Even those of us who don’t post on the forums still benefit from them, and not least from the sense that there are other people doing the same thing we are, that this goal we have set for ourselves is greater than ourselves, that it is worthy.

Sometimes, all you need is a great idea, the willingness to do the work needed, and a little luck to be able to change the world.

What’s the Point of English Aristocrats, You Ask?

01 Friday Jun 2012

Posted by Oren Litwin in Economics, History, Politics, State Formation

≈ 4 Comments

Tags

english aristocracy, politics

I was reading an article the other day by Douglas Allen (abstract here)* attempting to explain the bizarre institution of the English aristocracy, between about 1600 and 1900. I say bizarre because to be an aristocrat at that time was to accept on yourself a large list of restrictions that seem utterly mad to the modern ear.

Readers of Jane Austen or other Victoriana will tend to have a fuzzy image of the nobility. They clearly had a lot of money, but it wasn’t clear how. They had a lot of land, but a nobleman’s land holdings were as frequently a source of expense as they were a profit center. They had large estates away from the cities; why? Our wealthy class today typically likes to cluster around cities, not to build manor houses out in the middle of nowhere. What made the English different?

Aristocrats were expected to take large tracts of their land out of production and turn them into public walks. They were also expected to build massive homes which were open to visiting aristocrats at all times, and these homes were not merely away from the cities but even away from the local village. Why?

We see that noblemen were expected to go to the right schools. Less obvious was that these schools were remarkable in deliberately avoiding “practical” learning. Nobility were taught Latin, Greek, literature, and a whole host of topics which were utterly useless at making money. Furthermore, if a would-be aristocrat had made enough money to buy land and aspire to respectability, he was expected to immediately stop practicing his profession. For an aristocrat to engage in business was considered terribly shameful.

Allen’s paper goes on to list several other practices such as dueling or the encumbrance of land, all of them seeming to keep the noble class isolated from the larger society and totally unable to support itself commercially. Allen then proposes that all of this was by design. English nobles, he argues, deliberately made themselves hostages to a particular code of honor and class behavior, in order to transform themselves into the perfect servants of the king.

This takes some explanation. We are used to a world in which things can be measured and monitored. We buy rolls of toilet paper in the store secure in the expectation that they are all the same size and weight. We have soldiers in the battlefield equipped with cameras and radios so that their every move can be tracked. In short, it is very easy to monitor someone’s performance on the job, simply by monitoring the products of the work. The epitome of this is the bureaucracy, where everything is regimented and predictable.

But before the Industrial Revolution, it was hard or impossible to monitor anything. Bureaucracies did not exist. When you sent a ship across the world with trade goods, or when you sent an army of soldiers to the Continent, you had no control over what it did, and no way to be sure that your subordinates would actually work for your interests. In short, the pre-modern world was beset with vicious principal-agent problems.

In such a world, the most valuable resource is trust. You need to know that your subordinates are reliable. But how can you ensure such reliability? Economists will tell you to create a relationship framework in which your agent finds it far more valuable to stay in your good graces, than to betray your trust and profit in the short term. This can be done in a few ways. When possible, you can harshly punish offenders. Additionally, you can use repeated interactions to offer the lucrative carrot of future rewards to those who perform well now.

Allen argues that the nobility was a classic example of such a system. The important thing to know was that nobles made nearly all of their money from salaries, by serving as royal officials—which could earn them ten times as much as the most successful businessman, at the time. They served at the king’s pleasure, and could be dismissed for any reason. To give the threat of such dismissal teeth, noblemen were expected to dissipate their wealth through lavish social events and opulent dwellings. They were also expected to cut off all ties with the non-aristocratic world; that way, if you disgraced yourself and were shunned by “gentlemanly” society, you would be utterly alone.

The expensive educations in impractical subjects, the large homes away from the rest of society, all of these were “hostage capital” that displayed your willingness to play by the rules, because breaking the rules would be so very painful. Knowing Greek would be useless in commerce; it only had value within aristocratic society, so you needed to be sure to fit in.

The upshot was that the kings of England had access to a class of loyal servants—of uncertain ability at times, true, but whose dedication was nearly unquestioned. And it was this class of nobles that won England and Britain its empire.

What made the system of nobility break down? Indeed, at the end the aristocrats gave up power willingly, by passing laws allowing the common people to vote and hold offices, and by breaking up the aristocratic barriers to selling their ancestral lands. Allen argues that not only did the Industrial Revolution make the old problem of trust less of a problem, but it also made membership in the aristocracy less valuable. Now, instead of aristocrats earning far higher salaries than businessmen, it was the reverse; corporate titans bestrode the world, not the nobility. Given that, all the trouble of keeping up appearances simply wasn’t worth it. Far better to jump the aristocratic ship and become an industrialist.

So what’s the point of spending a thousand words talking about English toffs? First, I think it’s cool. Second, the whole episode illustrates the limitless ability of people to come up with social organizations to solve their problems. Third, it also illustrates how everything is dependent on context. Once the context shifts, old institutions become less relevant.

At the same time, though, the example of the English nobility remains for us to learn from. And who knows? There may come a time when the old problems become new again, and old wine can be poured into new glasses.

*Allen, Douglas. 2009. “A Theory of the Pre-Modern British Aristocracy.” Explorations in Economic History, Vol. 46: 299-313.

Recent Posts

  • Uncertainty and Value
  • Taxation and Conflict
  • Pirate Ships
  • Trading with Bandits
  • Different Kinds of Finance

Meta

  • Register
  • Log in
  • Entries feed
  • Comments feed
  • WordPress.com

Not a fan of RSS? Enter your email address to follow this blog and receive notifications of new posts by email.

Join 269 other subscribers

Follow me on Twitter

My Tweets

Archives

  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • January 2022
  • December 2021
  • November 2021
  • August 2021
  • July 2021
  • June 2021
  • June 2020
  • May 2020
  • November 2019
  • September 2019
  • August 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • October 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • July 2017
  • February 2017
  • December 2016
  • December 2015
  • December 2014
  • November 2013
  • August 2013
  • May 2013
  • April 2013
  • January 2013
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012

Categories

  • Better Fantasy
  • Credit
  • Economics
  • Education
  • Finance
  • Health
  • History
  • Homeschooling
  • Investing
  • Lagrange Books
  • Manifesto
  • Military
  • NaNoWriMo
  • Politics
  • Politics for Worldbuilders
  • Real Estate
  • Revolution
  • Self-Actualization
  • Self-Promotion
  • State Formation
  • Uncategorized
  • War
  • Weapons
  • Writing

Blogroll

  • Discuss
  • Get Polling
  • Get Support
  • Learn WordPress.com
  • My Other Blog
  • Theme Showcase
  • WordPress.com News

Personal Webpages

  • My Other Blog

Writing Resources

  • Ralan—Publishing Market List
Links on this site may lead to products for which the owner may receive compensation.

Website Powered by WordPress.com.

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy
  • Follow Following
    • Building Worlds
    • Join 122 other followers
    • Already have a WordPress.com account? Log in now.
    • Building Worlds
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Report this content
    • View site in Reader
    • Manage subscriptions
    • Collapse this bar