Links. The emerging markets merits of statehood, manufacturing, UK trade, Germany 1871-1873 vs. present day New York
A) My latest from ‘De Vrije Fries’ (in Dutch). The state, the church and the price of land. Rents of clerical land in Frriesland, 1511-1543. Or: ‘pay for the dikes or for the ferryman’. After the Habsburgers bought (!) Friesland they started establishing a state. As a consequence, the area was pacified and coastal levees were improved while, even more important, the financing of these levees was, finally, improved and communalized. As a results, there was an end to the washing away of Friesland and land rents increased quite a bit, much more than can be explained by the sixteenth century price revolution. A tantalizing question:did the growth of a state (including an early transition to Roman law) enable/force people to transform into ‘burghers’ which, according to their increasingly detailed probate inventories, possessed quite a number of note books which enabled them to keep track of all kinds of ‘petty debts’, (Knibbe, 2007)? Did this give preponderance to the ‘economic motive’, as opposed to the ‘honour’ motive of the medieval Friesian clan society (in the fifteenth century, the only brick buildings in Friesland were churches and small castles. After about 1530, many of these small castles were broken down and a rapidly increasing number of farms were at least partly made of bricks)?
B) Nice graph of manufacturing production in Estonia, Latvia, Germany and Finland. Production in Finland, supposedly a superinnovative hypercompetitive core country of the Eurozone, is down almost 25% compared with 2008. Estonian growth in 2014 is surprising as Russia is one of its main trade partners. Irish manufacturing grew quite a bit but the pattern is ex-tre-me-ly volatile (it almost seems as they have mixed up seasonal adjustment). After April, growth seems to have levelled (what might have happened that a new, very large pharmaceutical plant came into production, which had some problems with starting up).
C) UK imports and exports seem (like German imports and exports) to decouple a bit from the Eurozone.
D) I join the chorus. Syriza and the French indemnity of 1871-1873 is a very, very good long read. Fast forward take away: if only a small part of the the ‘hot’ money used to purchase high-end New York (and London, And Dublin and whatever) real estate was used to finance Greece – there would not be any problem (considering the present current account and government surpluses of Greece). However – that only happens at the beginning of financial cycles. Read about this also, on ‘Interfluidity’ one of my favorite blogposts ever: ‘Wealth is about insurance much more than about consumption‘, about the insatiable demand for safety of assets. In a wealth based society, “when the iceberg cometh, you must either be in a top wealth quantile or die a cold, salty death.”. Dependable social security based upon taxes instead of the wealth of pension funds can end this rat race, of course. And there seems to be a kind of ‘resource curse’ for countries receiving very large indemnities: it does not really makes them richer. the inflow of money into New York might cripple the NY economy as much as the French indemnity crippled the German economy.
Literature (no link): Merijn Knibbe, ‘Geen lezers maar schrijvers. Uitingen van de verschriftelijking van de cultuur in Henaarderadeel rond 1560,’ Fryslân 13;4 (2007), 10-13.