Category Archives: economics

by | 20 March 2025 · 3:05 am

Pacific Trade Growth in 1849

From The Chinese Question: The Gold Rushes and  Global Politics, by Mae Ngai (W. W. Norton, 2021), Kindle pp. 23-25:

Even as the forty-niners poured in from the eastern United States, California’s Pacific connections grew. Who would feed and provision the masses of gold seekers? There were entrepreneurs among the forty-niners, like Robert LeMott, who quickly sold a stock of pants and nails he had brought from Pennsylvania. But emigrants from the East could bring only small amounts of goods with them, and there was little farming in California to support the forty-niners, least of all in the hills. Most American merchants who sold provisions and amenities during the gold rush dealt in imported goods—dried fish and beef jerky, canvas and clothing, tools, lumber, candles, coffee, livestock, and even prefabricated houses—from Honolulu, Valparaiso, and Oregon; from Hong Kong and Sydney. LeMott, who speculated broadly, invested in clothing, especially that which was “heavy, well made, and of dark colors.” He wrote that merchants were making a 50 percent profit on everything they sold. Or more: in 1851 over 300,000 barrels of foreign flour—mostly from Chile—entered San Francisco, selling at an average price of thirteen dollars per barrel, compared to one dollar a barrel in New England.

The schooner Julia exemplified the changing Pacific trade of the era. She was a prize ship seized during the Mexican war, bought at auction by an American in December 1847 and registered in Honolulu. A decline in the number of Pacific whaling ships calling at Hawaiian ports had created an economic slump there in the spring of 1848, but the gold rush opened new opportunities, according to the Polynesian, for “an immense market for our products.” From June to October 1848, nearly thirty ships left Honolulu for San Francisco, carrying all manner of goods and provisions. The Julia’s voyage that summer commanded payments of $30,000 for cargo shipped by the Honolulu firm of Skinner and Company, which chartered the ship, and hefty sums from consignees, including $50,000 for Starkey Janion and Company and $6,700 for the Hudson’s Bay Company—all paid in gold. Soon the Julia would add a Honolulu-Guangzhou leg to her journeys across the Pacific.

The Julia’s transpacific travels linked Old and New World trade by connecting California to a longer history of British and American interests in China. The Hudson’s Bay agent in San Francisco who sent the gold sample to Hong Kong for advice on its quality knew it was much faster to get from San Francisco to Hong Kong than to London. The San Francisco-Honolulu-Hong Kong connection also was one of the main ways that people in both Hong Kong and California received news about each other. Just as the Hong Kong paper Friend of China reprinted news from California that was reported in the Honolulu Polynesian, the San Francisco newspaper the Californian reprinted news from the Friend of China, which traveled via Honolulu.

The gold rush dramatically changed the nature of the U.S.-China trade. Yankee merchants in Guangzhou and Hong Kong, anchored in the traditional U.S.-China trade to Boston and New York via the Indian and Atlantic Oceans, had already begun to establish transpacific routes in the 1830s and ’40s. They linked China to Hawaii and then to California, which was less a final destination than a transshipment point for goods headed to Acapulco, Valparaiso, or, via the Horn, New York. The gold rush represented a new opportunity for merchants in Hong Kong—both Euro-Americans and Chinese—to export diverse goods to California.

Hong Kong was a British colony and a free port—that is, imported goods from one place could be unloaded and reloaded for export to another place without payment of customs duty—and as such it quickly became the premier Asian entrepôt for both goods and emigrants headed for the gold mountains. For the year 1849 alone, twenty-three vessels exported nearly five thousand tons of goods from Hong Kong to San Francisco, including sugar, rice, and tea; beer, coffee, cigars, and chocolate; hats and clothing; furniture and canvas; tools and implements; timber logs and planks, window frames, bricks, and marble slabs. In 1849 Chinese imported and erected some 75 to 100 buildings, modular designs of premade frames and constructed with interlocking camphor wood panels. Most of these were built in San Francisco—including John Frémont’s home—but some were erected in the interior. One such “Chinese house” built in Double Springs, Calaveras County, was used as the county courthouse, then as the post office, and later as a chicken coop. In the early 1850s, Hong Kong merchants shipped thousands of blocks of granite, along with Chinese workers, for building the homes and businesses of San Francisco’s new elites.

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Filed under Australia, China, economics, Hawai'i, industry, labor, migration, Pacific, publishing, U.S.

by | 19 March 2025 · 6:28 am

First Hong Kong to California Gold Rush

From The Chinese Question: The Gold Rushes and  Global Politics, by Mae Ngai (W. W. Norton, 2021), Kindle pp. 19-21:

California gold arrived in Hong Kong at Christmas, 1848. It came as a packet of gold dust sent by George Allan, the San Francisco agent of the Hudson’s Bay Company. The envelope contained a small sample taken from a payment that Allan had made for a shipment of goods, sent from the company in Hawaii to San Francisco—$6,720—payment that was made entirely in gold dust, about 420 ounces of it (two and a half cups in volume). Allan wrote to his counterpart in Honolulu, “No one here seems to doubt for a moment the purity of the Gold Dust,” but he asked that the sample be sent “forward with all dispatch” to British experts in China for evaluation.

The same ship that brought gold dust to Hong Kong also carried recent issues of the Polynesian, a Honolulu newspaper. Hong Kong’s English-language weekly, Friend of China, often reprinted articles from the Polynesian for local consumption. In the January 6 edition, Hong Kong readers learned that six thousand people had taken gold valued at $4 million out of the earth in the six months since its discovery in California. The account predicted at least twenty thousand more arrivals in the coming year and the production of $62 million of gold in 1849, one-third of the world’s total product of gold and half of the world’s silver product in 1846. If the numbers (just predictions, really) weren’t exciting enough, the paper reported that digging for gold was not complicated. It involved simply collecting gravel in the bed of a stream and separating gold from the dirt by means of gravity and a little mercury. The arrival of the latest news and of gold itself sent a wave of excitement throughout the British colonial port. The following week the English brig Richard and William carried the first gold seekers from Hong Kong to California. They were not Chinese but Americans, including a former opium runner, a tavern owner, and a livery stable keeper.

Chinese gold seekers were not far behind. Yuan Sheng, a businessman, left Hong Kong on May 6 on the English bark Swallow, along with two other passengers and a cargo of Chinese goods. Yuan Sheng was from the Zhongshan region of Guangdong province. He was born on Sanzao, one of the small islands off the coast, near Macao. Yuan had actually been to the United States before: he had traveled to New York in 1820, probably on one of the clipper ships of the early China trade, and from there he had gone to Charleston, South Carolina, where he became a merchant. While in the United States, Yuan Sheng became a Christian and a naturalized American citizen. It’s not known when he returned to China, but in 1849 he decided to go back to America, this time to California, most likely not to dig for gold but to find business opportunities in San Francisco, another kind of golden fortune. He already knew English and something of the ways of American life, notwithstanding the differences between New York, South Carolina, and California.

Yuan Sheng went by the Anglicized name of Norman Assing. His selection of this name is intriguing. His surname is a homophone for the Yuan Dynasty (1271–1368) that was founded by Kublai Khan, the son of Genghis Khan. He might have chosen Norman after the medieval Europeans, a contemporary analogue of the Yuan. The Normans and Mongols were formidable conquering forces of their time. Sheng, his given name, means “birth”; Assing is a rendering of “Ah-Sing,” the familiar form of address of his name in Cantonese. Yuan Sheng means “born of the Yuan”; Norman Assing suggests “born of the Normans.” His choice was a clever point of pride even if it remained opaque to his American acquaintances. An English-speaking merchant, Yuan Sheng was one of the few Chinese headed for California who were named in the ship’s passenger manifest. We are not certain of those who ventured before him. Only seven Chinese arrived in San Francisco in 1848. When Yuan Sheng arrived in July 1849, there were barely fifty Chinese in California. Euro-Americans writing about exciting polyglot scenes on the streets of San Francisco in 1849 invariably commented on the Chinese they encountered, both high-cultured men in flowing silk robes and miners carrying bamboo poles strung with tools, straw hats, and gigantic boots.

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by | 17 March 2025 · 6:03 am

Chinese Empire Demand for Silver

From The Chinese Question: The Gold Rushes and  Global Politics, by Mae Ngai (W. W. Norton, 2021), Kindle pp. 9-10:

AT THE TIME OF the gold rushes, China was already in the grip of European colonialism. China was never directly colonized by a Western power; in fact, by the mid-eighteenth century the Qing Dynasty (1644–1911) had built an empire of its own, having expanded China’s boundaries to the west, most notably by annexing Tibet and Xinjiang. But in the mid-nineteenth century China was battered by European aggressions: the opium trade, gunboat diplomacy, and the forced opening to Western trade and missionaries. China’s humiliation stood in stark contrast to the position it had once held, even relatively recently.

For two hundred years, from 1550 to 1750, China had been arguably the most important economic actor in the world. It was not only the single largest domestic economy; it was also at the center of global trade, both with its Sino-centric tributary and trading networks in East and Southeast Asia and as the premier destination market for silver produced in Spanish America and Japan. Europeans shipped silver to China not as “money” but as commodity arbitrage: the Ming Dynasty’s (1368–1644) demand for silver for fiscal and commercial purposes fetched the highest silver prices in the world, double its price in Europe. China was the world’s great “silver sink” that not only drew but also stimulated its production in the New World.

Through the seventeenth century, Europeans traded silver for luxuries, including gold. For example, the British East India Company’s first direct transaction with China in 1637 exchanged 60,000 Spanish dollars for sugar, silk, spices, porcelain, and “loose gould.” Chinese traders also made handsome profits by buying low and selling dear, earning gross profits of 100 to 150 percent on silk and silk textiles sold to Europeans. Economic historians Dennis Flynn and Arturo Giràldez describe these late sixteenth-century dynamics of global trade as “multiple arbitrage.”

Europeans began trading silver for tea in large quantities in the early eighteenth century. Like silk, tea was a luxury item in Europe, but it had greater potential for mass consumption. The creation of a mass market for tea in Europe coincided with the rise in consumption of sugar from the plantation-slave colonies of the Caribbean in the late seventeenth century. Indeed, tea and sugar, along with tobacco, undergirded a global trade in stimulants—“food drugs”—based on a symbiosis of colonialism and slavery, on the one hand, and new mass-consumption economies in European metropolitan societies, especially Britain, on the other.

By 1800 silver’s arbitrage advantage in China had ended. The British, now hooked on tea, looked for a different means of exchange. The East India Company had already drained India of much of its silver to sell in China; now it turned to India for the mass production of opium for export to China.

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by | 16 March 2025 · 2:52 pm

Chinese Gold Rush Emigration

From The Chinese Question: The Gold Rushes and  Global Politics, by Mae Ngai (W. W. Norton, 2021), Kindle pp. 2-4:

THE CHINESE WHO WENT to the gold rushes were part of an expanding population of Chinese living abroad in the nineteenth century. Since at least the thirteenth century of the Common Era, people from China’s southeastern coastal provinces had traded in Southeast Asia, from Indonesia and the Philippines to Vietnam and the Malay Peninsula to Thailand. But in the nineteenth century they traveled much farther from home, spurred by both need and opportunity. A quarter-million Chinese went as indentured laborers to European plantation colonies in the Caribbean as part of the notorious coolie trade that exploited Chinese and Indian workers after the abolition of slavery.

An even greater number of Chinese, more than 300,000, went as voluntary emigrants to the United States and to British settler colonies in the nineteenth century, attracted first by the gold rushes. The Chinese gold seekers were not, of course, the first to cross the great ocean—that distinction is held by the Polynesian peoples whose seaborne migrations began over one thousand years BCE. In the sixteenth and seventeenth centuries, the Spanish ran a yearly galleon trade between Acapulco and Manila, the long middle leg of a journey that traded New World silver to China for silks, porcelain, and other luxuries for Europe. By the early nineteenth century, a budding U.S.-China trade of northwestern American furs and pelts and Hawaiian sandalwood drew new routes across the ocean.

But the gold rushes were of another order. They exploded the early modern Pacific maritime world. Vibrant new routes and networks of trade and migration were established, nourished by gold first in California, then in Australia. Three new and lasting nodes of the transpacific rose to prominence: Hong Kong, San Francisco, and Sydney.

The goldfields were international contact zones on the frontiers of Anglo-American settler societies. The rushes attracted gold seekers from around the world—from the eastern and southern United States; from the British Isles and Continental Europe; from Mexico and Chile and Hawaii; from Australia and China. The gold seekers’ arrival to the frontiers of white settlement made them participants, to one degree or other, in the elimination of indigenous peoples and in the formation of new communities and nations. How would these new polities reckon with the diverse character of the goldfield populations? Who would be included and who would be excluded? And who would decide, and by what means?

The gold rushes occasioned the first mass contact between Chinese and Euro-Americans. Unlike other encounters in Asian port cities and on Caribbean plantations, they met on the goldfields both in large numbers and on relatively equal terms, that is, as voluntary emigrants and independent prospectors. Race relations were not always conflictual, but the perception of competition gave rise to a racial politics expressed as the “Chinese Question.”

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by | 14 March 2025 · 4:46 am

Early Siberian Exile System

From Into Siberia: George Kennan’s Epic Journey Through the Brutal, Frozen Heart of Russia, by Gregory J. Wallance (St. Martin’s Press, 2023), Kindle pp. 121-124:

The Siberian exile system was not planned to be loathsome and vile. For much of its existence, little planning went into it. The system was the product of imperial ambitions, bureaucratic incompetence, corruption, and inadequate funding; Siberia’s vast size and harsh terrain and climate; and the extraordinary Russian capacity to inflict and endure suffering. Centuries of grotesque penal evolution had spawned disease-ridden prisons, exile parties driven like cattle, virtual enslavement, and lunacies like the punishment of the Bell of Uglich [by Boris Godunov]. Other countries have exiled their criminals, but none on the scale of the Russian exile system. Between the 1780s and 1860s, the British transported about one hundred and sixty thousand convicts to Australia. In the last half of the nineteenth century, the French overseas penal population was between five and six thousand. Russia stands out because between 1801 and the Russian Revolution of 1917, the tsarist regime exiled more than a million of its subjects to far-flung destinations within its own vast borders, creating what has been called “an enormous prison without a roof.”

As Siberia’s vast natural resources became apparent, the regime began employing the penal code as a tool for supplying Siberia with a labor force because too few Russians would go voluntarily. The offenses punishable by Siberian exile grew to include not just common-law crimes but political offenses, religious dissent, army desertion, and vagrancy. In 1753, the death penalty was formally abolished, and instead of being hanged, capital offenders underwent a public mutilation followed by “eternal penal labour” in Siberia. The death penalty would reclaim a place in the Russian judicial system in the nineteenth century, most notably in cases involving assassination plots against tsars.

…

For centuries convicts began marching to Siberia from Moscow, St. Petersburg, and other cities in European Russia, often starting their march on the Vladimirka road. At the first post station, which was called Gorenki, from the word gore, meaning grief, family members who were not accompanying a convict to Siberia could get a last glimpse of their loved one. In his iconic Vladimirka, the Russian artist Isaac Levitan painted the view ahead of a marching exile: a dirt road stretching to the horizon under a vast sky. By the time of Kennan’s investigation, trains and then barges transported convicts into Siberia but many of them still had to march more than halfway across a continent to their final destinations in parties of three hundred or more guarded by Russian soldiers on foot and by mounted Cossacks.

The sight of an exile party stunned travelers in Siberia. In January 1828, a young woman making her way through Siberia in subzero temperatures to join her exiled fiancé heard a strange noise from her carriage. “It was the noise of the fetters … an entire party of people was in chains—some were even chained to a metal pole. These unfortunates were a terrible sight. To protect their faces from the cold they had covered them with some dirty rags into which they had cut holes for their eyes.” On an overcast morning in 1856, an English traveler observed, beneath a double row of birch trees on the Great Siberian Post Road, “a long line of drab-clad figures marching in the same direction as ourselves. We instinctively know what it is but can still hardly believe that a story so sad, so strange, so distant, is being realised before our eyes.” Kennan never carried out his plan to march with an exile party, possibly because he was denied permission but equally likely because he had observed the experience of the exile parties to be so dreadful.

No one seemed to question or care whether, after a forced march of thousands of miles, cold-blooded killers and an assortment of thieves, incorrigibles, misfits, malcontents, and regime enemies could become productive workers in the Siberian mines and factories. In fact many of the convicts who reached Eastern Siberia, according to one report from local authorities, “arrived exhausted, prematurely enfeebled, having contracted incurable diseases, having forgotten their trades, and having grown quite unaccustomed to labour.” Local Siberian officials regularly commandeered the healthiest convicts from the marching parties to meet their own needs, which further aggravated the shortage of able workers.

So many exiled convicts died on Siberian roads that the peasants, who had to dispose of the bodies, protested to the government in St. Petersburg, which only sent back orders to the local authorities to pay for the burials. Some convicts took years to reach their destinations but their time on the journey did not count as part of their sentence. One convict was on the road for eight years, but his eight-year sentence did not start until he finally entered a prison factory in Irkutsk. The authorities did not want the convicts to run out their sentences by feigning illness or otherwise finding ways to delay their arrivals at the prisons, factories, and mines.

Notwithstanding the human wastage, enough productive convicts reached their destinations to justify the exile system to the St. Petersburg and Siberian bureaucracies. As Kennan wrote, “One is surprised not that so many die but that so many get through alive.” Factories, salt works, distilleries, farms, and mines in Siberia continued to demand more workers and the regime continued to send them by, for example, allowing landowners and monasteries to turn over their troublesome serfs to the state for exile. Siberia became the jewel in the Romanov crown and played a role in the rise of the Russian Empire comparable to that of India in the ascension of the British Empire.

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by | 12 March 2025 · 5:24 am

U.S.–Russia Tensions, 1880s

From Into Siberia: George Kennan’s Epic Journey Through the Brutal, Frozen Heart of Russia, by Gregory J. Wallance (St. Martin’s Press, 2023), Kindle pp. 95-96:

Alexander’s assassination at first drew the United States and Russia even closer because of the still traumatic American memory of Lincoln’s assassination. The US Senate passed a resolution of sympathy for Russia emphasizing the “relations of genuine friendship that have always existed between the people and governments of Russia and of the United States.” Former president Grant recalled fond memories of his 1878 meeting with the late tsar. The New York Times ran an editorial attacking the “Nihilism” of the assassins as the “chief foe of the liberty of the Russian people.” The Russian government reciprocated the sympathy when Charles Guiteau mortally wounded President Garfield a few months after Alexander’s assassination.

But the policies of the new tsar, Alexander III, managed to blunt the American sympathy for Russia generated by his father’s assassination. A foreign diplomat anonymously reported that the tsar and his advisers were preparing to “adopt rigorous repressive measures, having no example in Russian history.” Among the measures was a decree allowing the regime, without a trial, to jail or exile to Siberia anyone whose presence in Russia was deemed “prejudicial to the public order” or “incompatible with public tranquility.” A former head of the Department of the Police remarked that the decree caused the fate of the “entire population of Russia to become dependent on the personal opinions of the functionaries of the political police.”

Simultaneously with political repression, Alexander III tolerated, if not encouraged, a wave of brutal pogroms against Jews in European Russia. In some places Russian soldiers, mobilized to restore order, joined the mob in ransacking Jewish homes and businesses, and raping Jewish women. As historian Edward Crankshaw observed, “it was under Alexander III, and thanks to Alexander III, that anti-Semitism in Russia became institutionalized, respectable—and violent.” Influential Americans began to debate the true nature of the Russian regime. Harper’s Weekly, which previously had run issue after issue with festive illustrations of Russian life, editorialized that there is “no question as to the existence of the most cruel, arbitrary and oppressive despotism in Russia.”

Just as he had defended Russia’s role in the Great Game in Central Asia several years earlier, Kennan again came to Russia’s defense. He publicly addressed only the emerging criticism of the Siberian exile system, and not the pogroms, but privately he expressed the belief that the Russian government had been “grossly misrepresented” in the reports of the mistreatment of Jews even though he did not then have “the facts” to prove it. In a widely publicized lecture in 1882 at the American Geographical Society, Kennan argued that while the exile system was hardly without flaws, “whatever exile may have been in the past, it is not now, in any just sense of the words, a cruel or unusual punishment,” but on the contrary should be regarded as a “more humane punishment than that inflicted upon criminals generally in other European states.”

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by | 8 March 2025 · 6:07 am

Railroad Telegraph Duties, 1860s

From Into Siberia: George Kennan’s Epic Journey Through the Brutal, Frozen Heart of Russia, by Gregory J. Wallance (St. Martin’s Press, 2023), Kindle pp. 34-35:

He became a messenger-boy and trainee in a railroad company telegraph depot in Norwalk [Ohio], working in a different office than his father’s. He was promoted to the position of telegraph operator and manager at a salary of twenty-five dollars a month. In nineteenth-century America, children did menial and exhausting work in factories, farms, textile mills, and mines. Industrialists regarded the ideal machine as one so simple that a child could operate it. It was rare to give a young boy like George Kennan a serious responsibility like the signaling of trains.

As a train came through Norwalk, small boys peered through the depot’s windows to watch Kennan busily work his instrument to alert a central dispatcher of the train’s passing. The dispatcher then sent orders to the telegraph depot ahead of the train to give to its engineer: speed up, slow down (to arrive on schedule), halt at a siding, or make an unscheduled stop to pick up freight or passengers. At the depot ahead, a hapless employee went out to the side of the tracks and held out a five-foot pole with a large wire hoop, to which the dispatcher’s written order was attached. As the steam-whistling, smoke-belching train barreled toward the “hooper,” the brakeman reached down and, unless the hooper flinched, grabbed the wire hoop.

Initially Kennan functioned in a state of panic. “The excitement and responsibility of taking and transmitting orders upon which depended the safety of trains and passengers were a severe trial, at first, to my inexperienced nerves.” But he made no serious mistakes and “gradually acquired self-confidence, as the routine of railroad business became familiar to me.” Once he set up a field telegraph office at the scene of a train wreck, and on one local election night he helped his father receive the telegraphed tallies and announce them to an excited gathering.

American Morse Code (also called Railroad Morse or land-line Morse) in those days differed from current International Morse Code, which latter is better adapted for transmission through undersea cables.

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by | 20 February 2025 · 5:19 pm

Whence Eastern European Nationalism?

From From Peoples into Nations: A History of Eastern Europe, by John Connelly (Princeton University Press, 2020), Kindle pp. 798-800:

Thus capitalism did not produce nationalism in Eastern Europe; instead, it was a device that helped reshape and spread national ideas and identities that already existed. What generated those ideas and identities, and the commitment to live for them, was the consuming fear of oblivion, profound resentment over condescension, and smoldering hatred of subjugation. Why these emotions emerged across the East European map in the late eighteenth century had to do with imperial powers being themselves (that is, trying to outdo one another for power and glory). Joseph II wanted to be France and Great Britain—simultaneously nation-state and vast empire—Catherine the preeminent European land power, and the sultans wanted to ensure that they were not driven from Europe altogether. Thus their dangerous acts of rooting out corruption in the Greek and Serb lands.

The first visible substance that the new nationalisms nurtured in this vast space on the edges of empires was language, and language is the most arresting blind spot in the analyses of the best-known theorists. In [Benedict] Anderson’s scheme, the vernacular was a given that had only to be transcribed; in fact, the vernacular emerged only after decades of contentious “imagining” brought it to life despite internal dissension among patriots, and against the wishes of recalcitrant censors. The Czech case again is paradigmatic: every inch of Czech newspaper space, every minute of Czech theater performance, each new Czech classroom were objects of human effort—effort for which neither Anderson, nor the other major theorists have time, because they are not universal.

Anderson imagined nationalism moving across borders in a chain reaction beginning in France. In basic outline this claim is incontrovertible. That a nation should control its destiny from within defined boundaries, was a lesson people in and beyond Europe drew from Paris. But where Eastern Europe is concerned, the reality of transfer was more paradoxical. The first to absorb the French model—Germans—simultaneously rejected it and molded their version of nationhood around things that had supposedly eluded the model nation, namely, the language and culture the French took for granted. East Europeans then formed their own ideas of nationness against Germany, while also focusing on culture and language. To an outsider visiting Prague in 1860, the Czech anti-world seemed indistinguishable from the local German variant: Czechs ate the same food, wore the same clothes, loved similar music and stories, had the same local saints, and the same professional ambitions and aspirations for the good life. That was the impression one had until one began listening to what Czechs were saying in their distinct, precious, and, for the Germans, vexingly difficult vernacular.

They spoke of the fate of being a small nation, controlled like a colony, desperately in need of secure borders in a way that citizens of long-established and powerful states like Britain and France could not understand. T. G. Masaryk—an outsider who became an insider—first had to master that language to build the Czechoslovak nation-state. It’s a message that still eludes Western observers, oddly enough, precisely for their insistence on seeing Eastern Europe simply as an extension of their own European space. (Rejoining Europe, after all, was the prime goal of the dissident movements.) In Cold War terms, what happened after 1989 appeared to be the first world embracing and absorbing the second in a concluding act of history.

Yet beginning in about 2010, we have seen that East Central Europe stubbornly carries its own past. This morning, January 4, 2019, the New York Times printed a letter on the injustice of Trianon! The fact is that East Central Europe is a place where the first, second, and third worlds persist and overlap, each making claims on the same and different pasts. After 1989, the Czech lands, for example, came under the sway of the determined neoliberal Václav Klaus, a local nationalist of sorts, but before that they were a center of the second world’s anticapitalism, and before that, colonial subjects, co-inventors of the idea of national liberation struggles, going back to the late eighteenth century.

The scholar-patriots of that distant time, together with the Czech students of 1968 and 1989, Polish workers of 1956 and 1988, and Yugoslav intellectuals of the 1960s or 1980s, all intertwined three strands of struggle for liberal, social, and national rights: for responsible political representation, lives in dignity without want, protection of their national cultures. The stories of 1938, 1948, and 1968 were not a radical break but a refreshed version of older stories of self-assertion against foreign domination. In many ways the big-bang of 1919, or Budapest’s 1956 and Prague’s 1968, were a replay of the ferment of 1848/1849. The miraculous 1989 was a national liberation struggle, as well as an assertion of deeper traditions of local democracy, and basic civic rights, traditions going back centuries. See, for example, the Polish constitution of 1791 or the very old Hungarian traditions of local self-rule.

If there is a lesson from these stories, it is that when the demands of any of these three worlds are met with contempt, forces emerge claiming to set things right, forces that are rarely liberal. The Habsburg monarchy, under siege from many claimants, liberal and otherwise, opened the Pandora’s box of representative government in the 1860s, and what came forth, especially after the liberals’ failure of 1879, has been various kinds of populism, left and right, all briefly united in 1882 at Linz. The intervening generations have witnessed the temporary victories of liberal nationalism; national socialism; socialist nationalism; and most recently after the “return to Europe,” yet again an intense nationalism, connected to the past—to events like Trianon—but also to a politics for which a name has yet to be found.

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by | 16 February 2025 · 6:21 am

Comparing 1989 With 1848

From From Peoples into Nations: A History of Eastern Europe, by John Connelly (Princeton University Press, 2020), Kindle pp. 738-740:

People speak of the revolutions of 1989, but the process of transformation preceded that year and extended far beyond it, to our present time. The earliest revolutionary event occurred in August 1980, when Poles launched a 10-million-strong protest movement that authorities outlawed but never crushed. When strikes broke out in Poland toward the end of the decade, reform Communists called on Solidarity’s leaders to negotiate the “solution” of (partly) free elections. The resonance of that event traveled beyond Poland, however, because the trade union’s continued strength showed people across the Soviet Bloc that state socialism was in need of repairs that went beyond and indeed contradicted Leninism.

That is one strand of the story: how some East Europeans showed others the character of their common predicament and how to escape it. Another strand was within the Communist parties themselves, when liberals—most importantly, Mikhail Gorbachev but also Hungarian and Polish socialists—discussed and prepared for change, for example, through reforms of legal codes. Without Gorbachev, the Communist system could have continued, and perhaps transformed into something different. Reformers were absent in the GDR, Czechoslovakia, Bulgaria, and Romania, which is why the events of 1989 appeared more explosive (and revolutionary) in these places than in Hungary and Poland. One author described the transition in Hungary as a “negotiated revolution.”

The “structural” argument that favored Gorbachev’s reform program was economic; all the East European states registered deepening debt and thus growing dependence on banks, with no end in sight. In the 1980s, Poland was struggling simply to pay interest on its debt. The one state that opposed the reliance on Western credit, Romania, which decided in 1982 to pay all foreign debt, maneuvered itself into a position that was reminiscent of Russia in 1917: the question was not whether there would be an explosion but when. The chain-reaction character of the revolutions of 1989 ensured that when the explosion ignited in Timișoara, the subsequent denouement took place within a “discourse” of democracy, though in fact only Communists had changed places with each other. An actual transition to democratic rule had to wait until later in the following decade.

Thus, when writing about chain reactions, or “avalanches” of revolution that crossed borders in 1988 and 1989, from small to huge (more like icebergs falling into the sea than a collapse of part of a glacier), historians do well to keep in mind that no one knew about the extent of change at the time. Perhaps that is because actors—the Polish dissidents and the Hungarian socialist reformers—could not discern what we now see clearly: the international dimensions of the phenomenon. The first people to make out the larger dynamic were the Czechs. After the East German trains left in early October, and the Berlin Wall fell in early November, Prague, with foreign camera crews on the scene, itself became the set for revolution, a very sudden one, where the major questions were posed and seemed to be answered in a week and a half.

There is a third level to the transnational agitation and ferment: the role of the West in the East, beginning with the work of US consular officials promoting dissenters as well as reform Communists in the 1980s, but continuing in the careful monitoring of political change in the 1990s. Next to Poland, Hungary was the front-runner. The émigré philanthropist George Soros had legally moved his Open Society Foundation to Hungary in the early 1980s, cooperating with the Hungarian Academy of Sciences, and offered technical equipment (such as copiers), stipends, and contacts with Western civil society organizations. Even before Communism’s collapse, Hungary was thus “networked” with pro-democracy nongovernmental organizations (NGOs). The later fall of authoritarian leaders in Slovakia and Bulgaria would be directly tied to the work of NGOs active in those countries, as well as officials of the European Union.

The region’s response to a growing debt crisis, and the pressures of Western creditors, also had echoes of a deeper past. The last time peoples had mobilized en masse for freedom across Europe’s borders was the spring of 1848. That crisis had been preceded by a European-wide series of bad harvests, economic downturn, democratic agitation, and thus a political and intellectual ferment that went across the map. Events in France gave a signal that an opportunity had come for common aspirations to be fulfilled; and as soon as word could travel to Naples, Mannheim, or Bucharest, students, workers, and other urban revolutionaries responded. The enthusiasm was relatively short lived, as the old regime in fact was not vanquished but began reasserting itself from the summer of 1848 in northern Italy and Prague, and the revolution was crushed during the following year.

If 1848 was an attempt of urban classes to throw off the shackles of feudalism, 1989 was the effort of entire societies to shake off a modernization that came to seem counterproductive and inappropriate; from the late 1970s, the region was falling behind economically, as we know now inexorably, and outside of East Germany and the Soviet Union, even the party bureaucracy had long since abandoned commitment based on belief.

The year 1989 seemed to offer a similar script to 1848 but had a happier outcome. There was also a parallel to the Habsburg dilemma of a decade later, of the early 1860s, when perennial financial woes had forced constitutional reform on the monarchy, so that it could satisfy lenders in London and Paris. In a similar way, Polish and Hungarian governments ascended to freedom in 1990 with the immediate challenge of putting their countries back on sound financial footings to prevent their falling out of the international system of exchange. But the hyperinflation that Poland witnessed in early 1990 was a distinctly twentieth-century phenomenon, beyond anything Habsburg officials could have imagined or dealt with.

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by | 12 February 2025 · 11:13 pm

GDR Illusions in 1989

From From Peoples into Nations: A History of Eastern Europe, by John Connelly (Princeton University Press, 2020), Kindle pp. 704-705:

Gorbachev was not alone in admiring the apparent East German economic strength. In 1987, Western economists, looking primarily at numerical data, placed East Germany ahead of the United Kingdom in per capita income, a major index of development. As late as 1988, even sober Western newspapers were describing the GDR as a powerhouse. Its deep debt, similar to that of other countries (in per capita terms) was known but was not considered an impediment to growth and continued “success.” The times when East Germany’s economy was lame were “long past,” wrote journalist Peter Merseburger in 1987. He imagined the GDR lasting far into the unspecified future, thriving as a state that had solved the problem of unemployment and social insecurity, and he praised it for low rents, ignoring the fact that they reflected low investment in housing. The data existed to draw more sobering conclusions, but few did so. The GDR was so much wealthier than Poland that no one believed it, too, might have deep problems. Per capita East German gross national product was 40 percent higher than that of the Soviet Union.

The success of the GDR’s economy was an illusion. The state carried an unsustainable debt and tore down centuries-old buildings in world-class architectural gems (like Greifswald, Weimar, and Brandenburg), because it was too poor renovate them. The GDR could not compete even in areas where the state made its heaviest investments, like microelectronic technology, a major focus from the late 1970s. By September 1988, some 250,000 workers at seventeen Kombinate and 14 billion marks of investment had yielded the production of the GDR’s own 1-megabyte microchip, much celebrated in the party press, but already years behind the standard in the West. Toshiba had been mass-producing a 1-megabyte chip for two years at that point and was at work on a 4-megabyte chip.

The relatively high living standards were made possible by fortuitous circumstances: a strong preexisting industrial base; heavy investments in the 1950s; rational organizational reforms in the 1970s and 1980s (Kombinate); and the fact that West Germany considered the GDR a part of united Germany and gave it full access to the markets of the European Union, as well as several massive loans. Still, East Germany’s leaders felt that no reform was needed. Kurt Hager, East German ideology chief, said his land did not need Gorbachev’s plans for greater openness and restructuring. Simply because your neighbor puts up new wallpaper does not mean that you should do the same. The GDR leader Erich Honecker even mocked Gorbachev. “The young man has been making policy for only a year, and already he wants to take on more than he can chew.”

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