The extraordinary leap in wealth and wellbeing of the last two centuries came about also from the political order based on independent states set from the Treaty of Westphalia and the English Revolution, both in 1648. Yet these landmarks came also from the outcome of a plague, not too different from the present Covid.
The last great plague of the Western world occurred in 1630, in the middle of the Thirty Years’ War. Some Swiss mercenaries paid by the Habsburgs passed through Milan and northern Italy, and on their way spread a deadly virus. Over a quarter of the total population in northern Italy, some one million people, died because of the epidemic in one year.
After that, the war took an even more bitter turn. The Habsburgs, who were the lords of Milan, then the richest part of Europe, hurt badly. They withdrew from their trade with China and poured American silver not into the purchase of Chinese vases and silk but into weapons for their fight.
After imports of Mexican silver halted, the Chinese economy suffered massive inflation that in ten years quadrupled the value of silver, starved millions of peasants, and kindled the Li Zicheng’s uprising that toppled the Ming dynasty then ruling China.
In Europe, the flow of Mexican silver proved insufficient in plugging the loss of the Italian economy. The Habsburgs basically lost their bet in affirming their rule over Europe and the Mediterranean and had to come to an agreement in Westphalia in 1648 that essentially set the basis for the modern world and modern capitalist development that for the first time in human history created a progressive quantum leap in economic, technological and social progress.
Something in those times is similar to the present world with Covid. Similar to the 1630s plague, Covid also started with tensions that now we politely don’t want to call “war” but search for all kinds of synonyms. The outbreak of Covid in Wuhan certainly expanded into a full-scale epidemic because of a lack of mutual trust between China and the Western world.
China was cagey about the spate, and it is still reluctant to have a full opening of its data for fear that foreigners would find it guilty in one way or another of it. Americans and the Western world also didn’t believe China at the outset and grossly underestimated what was going on in Wuhan, confused by many contradictory reports.
The other lesson we may have from the 1630 plague is that the worst is yet to come. The Thirty Years’ War took 18 more years to end after the plague, and changed the face of the world. Now similarly, we may think that Covid has just opened a new phase of the “war” with China and the worst is yet to come.
Right at the same time of the Treaty of Westphalia, England experienced the first modern revolution. In 1649, Cromwell gained power and the king of England was beheaded, it was the end of the king’s divine right to rule and the beginning of the principle of people’s sovereignty. In the same years, the Manchu took over China.
From that, we have two basic elements that would shape human life in the following centuries up to today: a clear-cut political order based on states with their own prerogatives, and a move toward a liberal society based on people’s sovereignty and freedom.
This would entail another extremely important gnoseological element. Knowledge and thus decision-making would no longer be the preserve of a few privileged enlightened people but open to all who could contribute to the state and the economy.
It was the beginning of the liberal world, which created unprecedented development and miracles in human history: demographic explosion, extension of life and improvement in the quality of life, and mass perception of wealth and welfare.
Moreover, the market exchange was being based in the following centuries of liberal society on the idea of “transparent costs” building up a final price adding the price of the machinery, the salaries, the land, the raw material and a reasonable profit.
Before that market exchange was the place of trickery, where a good bargain could be obtained by withholding knowledge of the true value of your goods, and the possibility of forcing the other party into accepting the bargain by force or the threat of force. Markets for centuries had been under the protection of God Hermes, the deity of knowledge, exchanges, theft and trickery.
Then, this liberal order is not “natural.” It was achieved after millennia of strife and failed attempts against political systems that, for most of history, concentrated power, and thus knowledge and wealth, in the hands of the few.
In fact, this historical trend for concentration of power is so stubborn that liberal societies had to fight their way through against old absolutist monarchs in the 18th and 19th centuries and absolutist totalitarian ideologies in the 20th century.
Now they are challenged by greater or smaller autocratic temptations in the world and also within liberal societies.
Liberal societies are extremely fragile, delicate, and unstable. They have to be defended, safeguarded, and advanced with great political attention. This work is relentless and can’t be stopped as liberal societies and democracies can always slip into totalitarian regimes. Competition was first with absolute monarchic rule, then with totalitarian regimes.
Unnatural Free Market