Global Crisis
Page 15
When times were good, the macro-regions created three golden economic opportunities for farmers – but at a high risk. First, thanks to rising external demand and stable transport costs, many individual agriculturists made the transition from generalist to specialist, investing in the tools, raw materials and labour required to produce a single crop, or a small range of crops, for the market. Thus in the duchy of Württemberg (southwest Germany), by 1622 many farmers and even entire communities had ceased to grow grain and converted all their land to producing the fine wines for which the area is still famous. This rendered almost everyone dependent on imported grain to bake their daily bread, and so when the harvest in most of Germany that year produced scarcely half the normal yield, much of Württemberg starved.29 In many parts of eastern China, a lot of farmers likewise switched to producing cash crops for the market, such as sugar, tea, fish, silk and cotton. Initially, these shifts involved little disruption. On the one hand, rice requires intensive cultivation in March, May and July, whereas cotton requires most attention in April, June and between August and October; so the same labour force could produce both crops. On the other hand, fish ponds had long existed in the southern river deltas, with fruit trees planted on the surrounding embankments; the fish (mainly carp) fed on the organic matter that fell from the trees, and the muck scooped from the ponds fertilized the trees and the surrounding rice paddy. But as growing demand inflated the price of silk, farmers began to replace their fruit trees with the mulberries on which silkworms feed, and they also converted rice paddy into fish ponds with mulberries on the embankment. At first sight this formed a sustainable ecosystem, because almost all the necessary mineral and energy resources were recycled. It was not, however, a closed system: those who concentrated on producing fish and silk could no longer feed themselves and instead now depended totally on rice produced miles (sometimes hundreds of miles) away. The same dilemma faced Chinese farmers who abandoned cereals to plant cotton, at first in dry fields or on the ridges between their paddy, and then in their entire holding. Although smallholders could make a fortune from cotton in some years, the crop required twice as much fertilizer as rice and was more vulnerable to floods, droughts and high winds. Since no one stored the annual crop, its market value immediately reflected variations in the climate and the price of fertilizers, as well as in the demand for cotton itself – all of them factors over which farmers had no control. Sooner or later, therefore, either the ‘miracle crop’ would fail or the market would collapse. In both scenarios, its producers would starve.
The second golden opportunity for farmers that accompanied the growth of macro-regions in the sixteenth century was the chance to reclaim flooded land. In North Holland, the growth of Amsterdam and other adjacent cities encouraged entrepreneurs to reclaim 220,000 acres of lake, estuary and marsh between 1590 and 1640, creating 1,400 large new farms. In China, the sixteenth century saw the completion of over 1,000 new water-control projects, twice as many as the preceding century, while repairs brought many more abandoned projects back into service. In Japan, major land-reclamation projects between 1550 and 1640 more than doubled the area of rice paddy. Nevertheless, all these hydraulic projects were vulnerable. On the one hand, they needed constant maintenance: any inundation, however caused, requires immediate remedial action, because the longer the water is left, the harder it is to drain. On the other hand, hostile troops could easily destroy dikes and dams, and prevent repairs. Such action brought the risk of perpetuating a cycle of disorders, both because peasants who lost their land faced few alternatives to joining the aggressors, and because the floods created excellent redoubts where those aggressors could thrive (see chapter 5 for some Chinese examples).30
The third golden opportunity associated with macro-regions was that the warmer climate of the sixteenth century, which reduced the risk of frosts that killed early or late crops, allowed more intensive cultivation of crops to satisfy the increased demand for food from a growing population. The most spectacular increases occurred in southeast China, where the land tax varied according to acreage rather than output, encouraging farmers to plant two and even three crops per year. Many incredulous contemporaries in the 1620s described this system – some of them Chinese (‘in Guangdong there are fields which get three harvests; the reason is the warm climate’) and others European (‘they obtain three consecutive harvests in one year, two of rice and one of wheat’)31 (Fig. 8). In both China and Japan, farmers experimented with different types of rice – quicker ripening (even if lower in yield); resistant to salt (for use near the sea); resistant to cold – until over 150 varieties were in use in Fujian alone, over two-thirds of them found in only one location.
Taken together, these improvements almost doubled rice yields in good years – but only in good years. Drought, cold and any other factor that prevented double-cropping impoverished farmers whose livelihood depended on selling the surplus crops. They also caused shortages or even starvation for their consumers, whether from lack of food or from inability to purchase it – often with long-lasting results. In India, the famine and floods of 1627–31 ended the production of indigo and cotton in Gujarat because, lacking both a market for their goods and food to eat, the weavers fled and never returned. Similarly at Luzhou, a once prosperous town in Shanxi province (northwest China) where until the disastrous harvest of 1640–2 ‘over 3,000 looms’ wove imported raw silk, thereafter
8. The double-cropping cycle in Liangnan, south-east China. Rice price series reveal two distinct patterns: warm years (such as the 1620s) saw generally lower prices with two ‘peaks’, in April–May and again in July (just before each harvest reached the market); colder years (such as the 1640s) saw higher prices with only one peak, in June–July.
All the weavers had to take out loans and their debts piled up and ruined them, so by 1644 there were only two or three hundred looms left. Although the weavers worked hard for themselves and for official exactions, toiling day and night with their wives and children, they had to pay all their expenses out of their own pockets and accumulated only debts – how could they go on? Now in 1660 they are thinking of burning their looms and repudiating their debts and, in great sorrow, running away.
The collapse of weaving also, of course, affected those who produced the raw silk: sericulture vanished from the neighbouring province of Shaanxi, despite a tradition that went back 2,000 years. Those who ceased to grow foodstuffs, and instead concentrated on other commercial crops produced for export, such as sugar, tea, indigo, or the wide variety of artefacts made from bamboo (writing brushes, rain-hats, umbrellas and so on), all shared the same vulnerability: when the supply of staples failed, they lost both their market and their capacity to feed their family.32
Malevolence and the Macro-Regions
Besides the catastrophes caused by climate change, the macro-regions (just like cities) were also extremely vulnerable to human malevolence. To begin with, agricultural innovations and commercial crops normally required a substantial investment in fixed assets. Thus sugar production needed roller mills to crush the cane, pans to boil the juice, and trays to dry the crystals; silk manufacture required mulberry trees (each of which took six years to mature), vats for dyeing, and looms for weaving; making cotton fabrics required gins and looms.33 Such fixed assets could be looted and burned by enemies, just like traditional crops and simple farm equipment – but the damage cost far more and took far longer to repair. Moreover, as with hydraulic projects, what marauders could destroy once they could destroy again.
A second way in which human agency could cause serious damage to macro-regions arose from the fact that, although they formed the largest coherent economic units of the seventeenth century, they did not form a single market (Fig. 9). Instead, in the felicitous image of economic historian Kishimoto Mio, they resembled
9. A simple model of early modern economic systems.
Japanese historian Kishimoto Mio has suggested that economic systems in the early modern world resembled an
interconnected series of shallow pools, some deeper than others. Full integration of the ‘pools’ (Fig. 52 below) took place slowly.
Numerous shallow ponds connected one to another by channels. Because of their shallowness, the ponds were vulnerable to changes in external economic conditions. For example, too little inflow or too much outflow of money or commodities could easily flood or dry up these ponds and paralyze local economies … Even if we could calculate the ‘total’ size of an economy by aggregating the water stock of these ponds, it would not have real meaning in economic history until these ponds are organically integrated into a single economy. More meaningful, perhaps, is to study the flow of money and goods in and out of the ‘shallow’ local markets from the viewpoint of local inhabitants, listening to their complaints about the destructive effects of external market conditions.34
In the seventeenth century such complaints multiplied whenever wars and rebellions closed down markets and trade routes. Thus in 1621 two simultaneous wars – between the Dutch Republic and Spain, and between Sweden and Poland – involved blockades specifically intended to halt the export of Baltic grain: the former because Dutch ships carried most of it, the latter because its profits sustained the Polish war effort. Grain exports through the Danish Sound accordingly plunged from over 200,000 tonnes in 1618 to 60,000 in 1624 and 1625. Just as the blockaders intended, this fall both ruined Polish farmers and pushed food prices in the Dutch Republic to their highest level of the seventeenth century. Riots broke out in several towns and an alarmed Dutch politician wrote in his journal that ‘the plague of God’ lay on the land.35
A decade later, in East Asia, another blockade crippled those whose economic survival depended on selling Chinese silks in Japan. In the 1630s Shogun Tokugawa Iemitsu first ordered all Japanese residing abroad to come home and forbade all emigration; he then prohibited the construction of large ships in the archipelago; finally he forbade all trade with the Portuguese. Iemitsu had prepared carefully for the economic impact of these measures upon Japan. On the one hand, he issued new ‘frugality and sumptuary laws’ designed to reduce the consumption of imported products such as silk; on the other, he encouraged Dutch, Korean and Chinese merchants to increase their silk imports in order to maintain a steady supply.36 But he miscalculated: although the Portuguese of Macao lost ‘the most lucrative trade that His Majesty [Philip IV] has over here’ (just as Iemitsu intended), the Dutch, who expected to gain, also lost because when they imported large quantities of silk, as requested by the shogun, they found that the new ‘frugality and sumptuary laws’ had decimated demand.37 For the same reason the Chinese, too, could not sell their cargoes in Japan: the price of raw silk in the Yangzi valley therefore fell sharply and its producers starved. Finally, the native Japanese importers also suffered because they forfeited the capital – at least 800,000 taels of silver – previously sent to Macao to buy silks. Many went bankrupt, some fled and a few committed suicide in order to escape their creditors.38 Everyone involved in the Sino-Japanese silk trade thus experienced serious losses, some of it terminal, because of a political decision over which they had no control and against which they had no defence.39
Those living in the macro-regions were also defenceless against other government initiatives. For example, since they normally used cash to settle commercial transactions, currency manipulation affected them far more than communities which continued to rely on barter. Currency in the early modern world came in two forms. One, used by merchants, monarchs and others who engaged in high-value transactions, consisted of silver and gold coins that had an intrinsic value like any other commodity. Therefore, by changing the amount of precious metal contained in each coin, governments could manipulate its exchange value against the coins of other states that contained precious metal. During the mid-seventeenth century, an unprecedented number of governments around the world tampered with the currency, both to make money when they re-minted existing coins at inflated values and to save money when they had to make payments (much as some governments today welcome currency devaluation because it reduces the real cost of their debts and increases the competitive edge of domestic products). The Spanish government took the lead, issuing cheap copper coinage (known as vellón) in 1618. Within eight years it had almost completely replaced silver in domestic transactions. Serious inflation took place, and the government first halted further issues of vellón and then halved the face value of all copper coins. Four more times between 1636 and 1658 the Spanish Mints called in all existing coins and re-stamped them at a higher value (two, three, or even four times their face value) – only to retreat after a few months in the face of public outcry and restore the earlier value.
Many Muslim rulers also resorted to currency debasement, causing similar economic dislocation. In the Ottoman empire, the weight and silver content of the standard silver coin, the akçe, dropped in a series of devaluations from 0.7 grams in the 1580s to 0.3 grams in 1640 and it all but disappeared as a medium of exchange. In Iran, an irate draper described in verse what he called the ‘monetary revolution’ of 1653–4, in which creditors feared payment in the shah's abundant but debased silver coins bearing a lion's head:
Money is in plenty, but beggars refuse it,
As if its lion were a man-eater …
The creditor flees the borrower,
Never did the world see such ways …
At the time of the monetary revolution
I was worried by both dearth and plenty.40
In China, the subjects of the last Ming emperors also worried as mounting defence spending led first to the issue of large quantities of copper fiat money and then, once copper supplies ran short, to coins adulterated with base metals. The exchange rate of silver to copper coins fell to 1:1700 in 1638 and to 1:3000 in 1643. At this point, the desperate Chongzhen emperor started to issue paper currency, but (understandably) no one believed the notes would ever be redeemed, and so that expedient also failed. Worse followed: the Qing refused to accept Ming copper currency as legal tender and so the exchange rate between silver and copper coins fell to 1:5000 in 1646, and to 1:6000 in 1647. Eventually, as in central Europe during the 1620s (page 35 above), copper coins became worthless: in the words of a contemporary, ‘a hundred coins piled up hardly measured an inch in thickness and when they were thrown on the floor they broke into pieces’.41
Economic historians still debate the extent to which such drastic changes in liquidity affected the early modern world. Obviously, the importance of silver and gold currency to each geographical area and to each social group increased in proportion to its reliance on cash as opposed to barter; and, predictably, barter spread in many parts of the seventeenth-century world. Nevertheless, trade – and especially foreign trade – exerted a ‘multiplier effect’ on currency variations. To use another insight of Kishimoto Mio, unlike other commodities,
Sooner or later money creates added income for others through spending. The silver that flowed annually into one regional market in turn created demand in other regional markets through chain-like successions of exchange. For example, producers of raw silk would sell their silk to outside merchants and obtain silver, with which they could buy foods from farmers in the neighbourhood. Those who obtained silver from the sale of food would buy cotton cloth or other miscellaneous commodities with that silver, and so on. If the inflow of silver was to stop for some reason, the silk producers would have no money to buy food, and food producers would also have no money to buy cotton cloth. The decrease of income spreads through a chain reaction.42
Kishimoto's ‘model’ explains why contemporaries paid special attention to the ‘flow’ of silver and other commodities, rather than to stock: what mattered was not the ability to amass goods, but the ability to sell them. In the 1650s, after three decades of war, disease and famine had drastically lowered demand in Jiangnan, a series of warm summers produced bumper rice harvests – but this spelled disaster for rice farmers. According to one of them, ‘This year the price of rice wa
s very low, at a level not seen for several decades. The humblest people in the poorest hamlets all ate fine rice and made cakes, while in my house we ate no midday meal on the last day of the year [traditionally a Chinese feast day].’ During the following decade, the decision of the Qing government to forbid all maritime trade, cutting off Jiangnan from its traditional overseas export markets, again caused supply to exceed demand. According to a local source,
Even the rich with much property rarely have any silver, so they are not able to buy grain, meal and cloth – all of which are cheap. Consequently the sellers of these commodities [have no business, lack money], and are also unable to consume goods … As a result, grain and hundreds of other unsold commodities pile up at the market centres in Suzhou. Good merchants lose their funds and the wealthy become penniless.
Or, more concisely, in a Chinese aphorism of the day, ‘The rich become poor; the poor die.‘43
‘The haves and the have-nots’
In the second part of Don Quixote, published in Madrid in 1615, Miguel de Cervantes attributed to the phlegmatic squire Sancho Panza a now famous proverb: ‘My grandmother used to say that there are only two families in the world: the haves and the have-nots.‘44 When Cervantes wrote, the village of Navalmoral de Toledo, in central Spain, had a population of around 250 families, of which 50 were ‘have-nots’ who owned no property. Instead they lived in shacks, sometimes without a single piece of furniture – the inventory of their property when they died recorded no chair, no table, no bed – and survived on what they earned from working for the ‘haves’. In addition, 20 widows lived alone in the village without any apparent source of income; and 17 individuals, described as paupers, lacked even a permanent dwelling place of their own, sleeping in a barn or an attic in winter and under a hedgerow in summer (Fig. 10). In the early decades of the century, whenever a meagre harvest forced up the price of food but required fewer labourers, these ‘have-nots’ went hungry but they rarely starved because the ‘haves’ provided alms, while the church used the tithes (a 10 per cent share of the harvest) to provide charity. If dearth continued, however, not only did the number of have-nots increase but the yield of the tithe simultaneously decreased. Thus in 1618, a year of good harvest (and therefore of good tithes), the church of a Spanish village near Navalmoral distributed 12,000 maravedis (£5) in alms; but in the 1630s, as harvest yields fell, the sum declined to 2,000 maravedis annually; while in 1645, 1647 and 1649, the years that saw the worst harvests of the century, the parish priest wrote sadly in his account-book: ‘No charity has been given, since there is nothing to give.‘45