|
Today's selection -- from Rebels at Sea by Eric Jay Dolin. In the American Revolution, the number of privateer ships -- estimated at more than 1,500 ships and tens of thousands of men -- far exceeded the number of official navy ships, and these were far more instrumental in the American victory: "The relatively small number of books that focus specifically on privateering during the Revolution do succeed in showing how it contributed to the American victory. But none of these books offers a comprehensive picture of the full extent of privateering, and just how important it actually was to the American cause. Rebels at Sea fills that void and demonstrates that privateering was critical to winning the war. "American privateersmen took the maritime fight to the British and made them bleed. In countless daring actions against British merchant ships and not a few warships, privateers caused British maritime insurance rates to precipitously rise, diverted critical British resources and naval assets to protecting their vessels and to attacking privateers, added to British weariness over the war, and played a starring role in bringing France into the war on the side of the United States, a key turning point in the conflict. On the domestic front, privateering brought much-needed goods and military supplies into the new nation, provided cash infusions for the war effort, boosted coastal economies through the building, outfitting, and manning of privateers, and bolstered America's confidence that it might succeed in its seemingly quixotic attempt to defeat the most powerful military force of the day.
"Critics of privateering have admitted its influence but characterized that influence as largely negative, if not deleterious. These claims come mainly from those who blame privateering for siphoning valuable manpower and munitions from the Continental navy and army and for contributing to a coarsening of American morals and republican ideals by purportedly offering a means for men to place profit over patriotism. But such arguments lose much of their sting and persuasive power when considered within the actual context of the war. And whatever drawbacks came with privateering, they pale in comparison to its positive contribution to the Revolution. "The importance of privateering can only be grasped when the practice is set against the precarious nature of the war. At the outset, there were few reasons for the rebellious colonies to be confident of a good outcome. As William Moultrie, South Carolina's most famous Revolutionary War hero, would write years after the conflict, Americans were rising up against 'a rich and powerful nation, with numerous fleets, and experienced admirals sailing triumphant over the ocean; with large armies and able generals in many parts of the globe: This great nation we dared to oppose, without money; without arms; without ammunition; no generals; no armies; no admirals; and no fleets; this was our situation when the contest began.' Every year of the Revolution, there was cause to doubt that the colonies would be able to hold on, much less win. George Washington later reflected that the American victory in the war 'was little short of a standing miracle.' At many points during the Revolution, the war might have ended in American defeat had different decisions been made or different actions taken, and had various elements not been in place. Yet throughout, privateering provided a source of strength that helped the rebels persevere. Although privateering was not the single, decisive factor in beating the British -- there was no one cause -- it was extremely important nonetheless. "The exact number of privateers and privateersmen who operated during the Revolution is unknowable, but the figures we do have suggest that they were pivotal to the war. Records are incomplete and often duplicative -- many were logged both at the congressional and state level. Further complicating any attempt to arrive at reliable figures is that contemporary accounts often applied the term 'privateer' to vessels that were most certainly not privateers. As a result, many Continental navy vessels as well as state navy vessels were incorrectly labeled as privateers in newspapers, letters, and official government documents printed during or just after the Revolution. Some historians have perpetuated the error. Haraden's sloop Tyrannicide, which was a Massachusetts navy vessel, is frequently called a privateer in modern accounts. "The best single source of basic facts on privateering during the war is the Library of Congress's Naval Records of the American Revolution. It lists 1,697 armed vessels that received letters of marque from the Continental Congress and which were manned by 58,400 men and carried 14,872 cannons. Yet these numbers cannot be taken at face value. Quite a few of the listed vessels received multiple letters of marque, for different cruises in different years, and thus were double- or triple-counted; many men served on more than one privateer; and a considerable portion of the cannons saw service on more than one ship as well. Even as they are, in part, duplicative, the Library of Congress records are also incomplete: a few states, notably Massachusetts and New Hampshire, issued their own letters of marque independent of Congress, but it is not clear exactly how many of these state privateers there were. Some sources claim the number was relatively low, perhaps around one hundred, while others say that there was as many as one thousand. Although the overall number of privateers cannot be precisely known it was large, and most likely within a few hundred of 1,697. Similarly, the number of privateersmen certainly was in the tens of thousands, and the privateers upon which they served carried many thousands of cannons. Reflecting on the sheer size of such a fleet, historian John Franklin Jameson claimed that privateering during the Revolution evolution 'assumed such proportions as to make it ... one of the leading American industries.'"
|
This is a rotting whale carcass. When whales die there can be a build up of gasses in the decomposition process. And when the gas builds up, sometimes they explode. That's right! An explosion of rotting whale flesh. Isn't nature beautiful? Picture: Imgur
“Lieutenant, we found the arm/safe switch,” he told Jack.
“Great,” Jack said.
“Not great,” the sergeant replied. “It’s on arm.”
Today's selection -- from Capital and Imperialism: Theory, History, and the Present by Utsa Patnaik and Prabhat Patnaik. Britain’s John Maynard Keynes, famous for his theories on government deficit spending, used Britain’s control of India to help pay for the Second World War, and in the process brought famine and death to millions in India:
"As we have seen, the mechanism of the drain of wealth up to the Depression turned on Britain's appropriating every year India's entire global external earnings of gold and sterling from commodity export surplus, while using rupee budgetary revenues to recompense the producers for their net exports. The appropriation took place against regular administered invisible demands on India that were detailed both in sterling on India's external account and in rupees in the budget under 'expenditure abroad.' The total of these invisible demands, however, included non-recurring items as well, and thereby the total was always pitched higher than India's external earnings over a run of years, no matter how fast the latter might grow, so that the current account was kept in deficit. As India's external earnings declined sharply during the Depression, Britain's invisible demands, far from declining, rose further as it sought to moderate its own crisis at the colonies' expense. This produced exceptionally enlarged current account deficits for India from 1925-26 to 1938-39, and these forced substantial and unprecedented outflows of financial gold to Britain, in addition to India's incurring fresh debt to finance them.
"The war years saw enhanced levels of extracting resources from India, but through an entirely different mechanism, that of a 'profit inflation,' whose theoretical and practical meanings we explore in this chapter. While it was taking India's global foreign exchange earnings, which had always been the object over the entire period of colonial rule, two factors now produced an altered situation. First, these earnings had declined with no prospect of recovering to earlier heights in a changed world slowly recovering from the Depression. Second, with the outbreak of war, Allied troops and air personnel poured into Eastern India, and the immensely enhanced war expenditure required for their operations was now charged directly to the Indian budget against a promise of repayment after the war ended, whenever that might be. In effect, a forced loan was taken from India, which was declared a combatant nation without consulting its people. Its people were also not consulted over the decision to put the burden of the Allies' war spending on the Indian budget.
"There are several dimensions of this decision to make Indians bear the brunt of war financing that are not generally known. The first is the astonishing scale of financing in relation to the size of the normal budget -- over the period 1939 to 1943, there was a nearly eight-fold expansion of budgetary expenditure. The second is the mechanism by which three-quarters of this expansion was effected, through deficit financing and monetizing the deficit, producing a much more rapid inflation than in other countries. The wholesale price index rose 70 percent in Britain over the war period, while it rose 300 percent in India as a whole, and to a greater extent in Eastern India. The great famine of 1943-44, in which three million civilians belonging to the poorest rural classes starved to death in Bengal, was a result of this exceptionally rapid food price inflation. The third is that these measures leading to rapid inflation were not accidental but quite deliberate, representing the policy of 'profit inflation' for meeting the abnormal spending required in wartime, a policy that had been put forward at a theoretical level by John Maynard Keynes and was implemented in practice in India. The same policy of profit inflation had been proposed for Britain by Keynes, but it was not implemented, owing to strong opposition from the trade unions, and was substituted by enhanced progressive taxation. In view of his expertise on India, Keynes himself had been given special charge of lndian monetary affairs, in addition to his general advisory role, when he was appointed in 1940 as adviser (along with Lord Catto) to Britain's Chancellor of the Exchequer.
"The policy of profit inflation was deliberately followed by the British and colonial governments with a specific purpose: to raise resources from the Indian population by curtailing mass consumption in order to finance the Allies' war in Asia with Japan. Keynesian demand-management policies are usually associated with raising employment and incomes, but Keynes also discussed the exact opposite, measures for curtailing mass incomes. He considered these necessary to raise resources for financing wartime spending in both A Treatise on Money referring to the First World War, and in How to Pay for the War, regarding the Second World War.
Keynes had been closely associated with Indian affairs from an early period of his life. He served for two years in the India Office in London, leaving it when twenty-five years of age, and used the experience he gained there to publish Indian Currency and Finance five years later. He gave evidence to, or was a member of, successive commissions set up to deliberate on Indian finance and currency: the Chamberlain, Babington Smith, and Hilton Young commissions, and for a while the Indian Fiscal Commission. He wrote articles on India and reviewed books on the Indian economy for the Economic Journal, which he edited (such as T. Morison's The Economic Transition in India that discussed the drain of wealth). Keynes also lectured at Cambridge for many years on Indian monetary affairs.
"In 1940, in view of the unusual financial situation arising from war, the British government appointed two economic advisers to the Chancellor of the Exchequer, an ex-banker, Lord Catto, and J. M. Keynes, with Indian monetary matters specifically entrusted to Keynes given his expertise in the area. Keynes was the most influential figure at the Bretton Woods Conference in 1944, where the repayment of sterling owed by Britain to India was discussed by him with the Indian delegation. Keynes's four-decades-long India connection, his interest in the Indian monetary system, and his part in policies followed in India during the Second World War have been neglected by his biographers, who appear to have had little interest in, or understanding of, the financial and monetary mechanisms underpinning colonial rule that concerned Keynes.
"The term 'profit inflation' was coined by Keynes to describe a situation where output prices rise faster than money wages because of an excess of demand over inelastic supplies. Profit inflation redistributes incomes from wages to profits and ensures substantial reductions in the consumption of wage-earners. It can be applied equally to a situation, where in addition to wage-earners, a large part of the working population comprises self-employed petty producers like artisans, fisher folk, and small peasants who have to buy food staples from the market since they produce either no food at all or not enough to meet their needs.
"Profit inflation was a deliberate policy adopted in India for war financing. Without a deliberate policy of curtailing mass consumption, over £1,600 million of extra resources could not have been extracted from Indians during the war, with the bulk of this burden falling on the population of Bengal since Allied forces were located in and operated from that province. The state policy was to redistribute incomes away from the mass of the working population, toward capitalists and companies, by inducing a rapid profit inflation. The colonial state directly spent, in every war year after 1941, a multiple of its normal revenues by printing money, an extreme measure of profit inflation.
"In A Treatise on Money: The Applied Theory of Money, referring to the First World War, Keynes had written:
The war inevitably involved in all countries an immense diversion of resources to forms of production which, since they did not add to the volume of liquid consumption goods purchasable and consumable by income earners, had just the same effect as an increase in investment in fixed capital would have in ordinary times. The investment thus required was, especially after the initial period, on such a scale that it exceeded the maximum possible amount of voluntary saving which one could expect, even allowing for the cessation of most other kinds of investment including the replacement of wastage. Thus forced transferences of purchasing power in some shape or form were a necessary condition of investment in the material of war on the desired scale. The means of effecting this transference with the minimum of social friction and disturbance was the question for solution.
"He then went on to discuss the three different methods through which such 'forced transferences of purchasing power' could be achieved: first, by reducing money wages while keeping prices steady; second, by letting prices rise more than money wages so as to reduce real wages; and third, by taxing earnings. Taking up the third course, he wrote that 'the rich were too few,' and therefore 'the taxation would have had to be aimed directly at the relatively poor, since it was above all their consumption, in view of its aggregate magnitude, which had somehow or other to be reduced.' But the additional taxation of wage-earners would have to be substantial, it would meet trade union resistance, and it would be difficult for the government to implement.
"'It was a choice, therefore, between the remaining alternatives -- between lowering money wages and letting prices rise .... it would be natural -- and sensible -- to prefer the latter.' Keynes argued that it would be as difficult to enforce the required 25 percent money wage cut as to impose heavier taxes: 'I conclude therefore that to allow prices to rise by permitting a profit inflation, is in time of war, both inevitable and wise.'"
|
|||
| author: Utsa Patnaik and Prabhat Patnaik | |||
| title: Capital and Imperialism: Theory, History, and the Present | |||
| publisher: Monthly Review Press | |||
| date: Copyright 2021 by Utsa Patnaik and Prabhat Patnaik |
