Sunday, September 4, 2022

The Bishop's Sea: "John Bull Can Stand Many Things, But One Thing He Cannot Stand is 2%"


In this new age of inflation, two-and-a-half things for the week. 

 The first thing is the Bagehot quote. Is this really the secret spring of history, that investors will not tolerate interest rate going below 2% without staging some kind of secret and self-regarding counter-revolution against easy money?

Second, there's Bosworth Field, which I've been thinking about as I make heavy weather through the Black Death, Price Revolution, and Reconnaissance. (And, apparently between Death and Revolution, the "Great Bullion Famine" of, roughly, 1457--64, and the "Great Slump"  of the 1430s--80s. 

The half thing, the thing that put my mind to Bagehot, is the verponding, the property tax that the States of Holland began to impose in place of taxes on rental  incomes as the crisis of the Dutch Revolt deepened. There's nothing new in property taxes, and my slow progress through Scott Tracy's excellent monograph is a disgrace, but I'm going to call attention to it because of the method of the Estates, which was to estimate property values based on twenty times the rental income.

Obviously, it's the data they had. But, also, as far as the survival of the Dutch Republic and the Reformed Religion (as they said in the day) goes, 3.5% is in the nature of things.  It turns out that Henry VIII, who knew from sin, defined usury as an interest rate above 10% in the 1545 Act Against Usury, an act revoked by Parliament in 1552, thus in the last year of that young shit disturber, Edward VI, and restored, my source says, in 1571. (The Act was subsequently revisited several times until the rate of usury fell to 5% in 1713, another politically salient year.)

All of this, of course, is about interest rates (and rental rates) which are too high. A lot can be said about this. If you'll follow the link above to John Munro's 2011 working paper on "Usury, Calvinism and Credit in Protestant England: From the Sixteenth Century to the Industrial Revolution," you will get a brief primer on the old idea (Protestants are proto-capitalists with no time for usury laws) being deconstructed by the scholarship and tentatively reconstructed by Munro. So that's great. The current draft of my chapter on English through the maturity of the Newfoundland fishery wants to argue that the economy, royal succession and Reformation interacted with social legislation (Statute of Labourers, Petty Treason,  heresy,  vagabonds, and finally the poor law)  to create the mould of North American racism. The current draft has, says Munro, some idiotic blathering about discounting notes during the Hundred Years War. I'm glad I read it! 

However, the issue here is the other one: rates which are too low. No-one seems to care about that, but Bagehot says it is the secret of the winter of our discontent.

Dickens' Bleak House never sorts out the two wills of Jarndyce and Jarndyce which are the McGuffin of the plot, because it is much more interested in the shocking doings of some lady who pregnant out of wedlock once. But it is supposed to be a problem novel about how people's lives are ruined because the Court of Chancery can't sort out who rightfully inherits what. 

Which brings us to the 1485 Battle of Bosworth Field, at which Henry Tudor, Earl of Richmond and champion of the House of Lancaster, defeated Richard III, champion of York, ending the Middle Ages and Shakespeare's interminable history plays and ushering in the House of Tudor and what looks, in retrospect, like an all-too short and deceptive period of stability in the monarchical government of England. 

We tend to draw a line between the two periods of instability divided by the Tudors: The Wars of the Roses era, we see as typically medieval, with lots of parallels to be drawn abroad. The age of instability that began with the English Civil War and which gradually faded away with the decline of the Jacobite menace, is seen as religious, to the point where even professional historians have difficulty getting away from the spiderweb of conspiracy thinking that  wonders if even James I was a secret Catholic. (Because his mom was and supposedly his wife was, and Catholicism is infectious.)*

ON THE OTHER HAND, the events of the last phase of the Wars of the Roses are well known and somewhat genocidal, as far as English royals go, but there's another layer to it all. Richard III rose to the throne in a welter of betrayals and purges, and probably was responsible for the discrete murder of his nephews, but, if he was responsible, it was after he first seized the throne by having the marriage of his brother, Edward IV, declared "illegal, rendering their children illegitimate and disqualifying them from the throne." 

Conversely, Henry Tudor was descended, ultimately, from Edward III through John of Gaunt via his mistress, Katherine Swynford. Katherine and John married under a papal dispensation shortly before his death in 1396, but the common law of England does not recognise children born of a later marriage as illegitimate, which bars them from inheriting property. Richard II and John of Gaunt then put their heads together and the result was an act of parliament legitimising the four "Beaufort" children born before the marriage, including Henry VII's ancestor, Margaret Beaufort. A clarification issued by Henry IV (himself an usurper and a son of John of Gaunt), excluded the Beaufort children and their descendants from the royal succession. My source here notes that Henry's "legal right to do this has been questioned," which is evidently not a reference to the trial by combat that established Henry VII's right to rule England, but rather that this doesn't seem to be something that a monarch can legally do. Which argument would have totally persuaded men like Richard III and Henry VII. 

As often with civil wars, the process by which the rival claimants' armies reached the battlefield is a bit obscure. Principals and lieutenants made their way across country, acquiring supporting contingents and losing others, eventually arriving at a good place to contest the route to London with a force strength that seems to have been some kind of rough popularity poll. Chroniclers therefore have some trouble in deciding the actual forces present at Bosworth Field, with the Yorkists said to have between 7500 and 12,000 men, while Henry VII's Lancastrians had between 5000 and 8000. Earl Stanley, with between 4000 and 6000 men, was evidently privy to better polling than other combatants, and intervened on Henry VII's side at the decisive moment. (It is  possible the Northumbrians were their own side, too.) Accounts of the battle emphasise that Richard was a true and knightly warrior, while Henry was a great deal more interested in keeping up with logistics. 

Henry was legendarily tight with his money, something that would be true also of his grand-daughter, Elizabeth, but not his son, Henry VIII who, equally legendarily, spent England into bankruptcy, seized the monasteries to get hold of enough cash to buy himself out of trouble, and then did it all over again. 

While the financial legacy held, the Tudors' inherited strategy of managing royal legitimacy did not. It is an extraordinary fact that only Tudor successions were legitimate. Henry VII was succeeded by his son Henry, who was succeeded by the brief-lived Edward VI. By the time of Edward VI's death, his sisters Mary and Elizabeth had both been excluded from the succession by the retroactive delegitimisation of the marriages of their respective parents, while the Scottish descendants of Henry VIII's sister, which eventually included James I, were all barred from the succession by law. 

And yet none of it mattered. Mary might have been excluded, but she succeeded, anyway. Why? Edward VI might have been influenced by his advisors in setting his "Devise" on Jane Grey succeeding him. That is, Jane Grey had been married into the house of John Dudley, the 1st Duke of Northumberland and the last strong man of Edward VI's viciously-infighting cabinet. Dudley would have been the eminence grise of the new regime. But Edward's  personal intention was clearly to promote not Dudley, but the Reformed religion. By excluding his Catholic sister, he would further the radicalisation of the English Reformation by giving reformers like Archbishop Thomas Cranmer his head. The volcanic eruption that followed in favour of Mary has been described as a virtual revolution. Does that make it a Catholic counter-revolution?

Historians of religion focus on the Prayer Book and the Forty-Two Articles as the core achievements of the last years of Edward's reign. Charles Skidmore's biography, which I have used to give this post a gloss of scholarship beyond Wikipedia-diving, has seven sub-entries under "Prayer, Book of Common" in the index. Proper alphabetical order would put the Poor Act of 1552 immediately before, but there is no entry at all, nor one for the Vagrancy Act of 1547 and its 1550 revision removing the "unpopular" provision enslaving those arrested for vagrancy. I leave to the reader the act of empathy required to understand what kind of person would think that the next-to-final edition of the Book of Common Prayer was more important to the average Briton of the next three centuries than the next-to-final edition of the Poor Law.  But given that the Poor Law made the parishes of England (and, above them the dioceses) responsible for the poor, "Church reform" was just as important to the Poor Law as it was to the Book. 

The coin debasements of 1544-51, to be fair, get even less mention, except indirectly insofar as Northumberland is recorded in 1550 as warning the cabinet that English credit was about to fall as low as the Emperor's in Europe, Charles V then offering 16% on  his loans, while by 1551 all was in order with English finances and parliament could proceed with  restoring the law against usury. 

The "social context" of the Poor Law is explained as an English population which had risen from 2 million at the time of the Domesday survey to 5 million at the time of the Black Death, falling back to 2 million over the next generation and then holding at that level through the 1400s, only to begin rising again after 1500. The brutally Malthusian argument: No people means no poor people, and no poor people means no need for a Poor Law. I am reminded, because of my peculiar reading habits, of Henry Hazlitt's threadbare mid-century invocations of the "quantity of money" argument explaining inflation to show that inflation is surely the fault of federal deficits.

The alternative possibility, that the popular revolution in support of Marys accession might have something to do with  the Price Revolution, a gentle but steady inflation that eroded the value of fixed rents, effectively driving down the interest rate on real estate loans. Stepping on the coinage is exactly the way to increase liquidity and pay off the crown's debts: but if there is one thing that John Bull will not stand . . . 

So what's all this about laws of succession, then? It's pretty simple. As long as inheritance depends on being properly married, the land market depends on the religious settlement. And that is leaving aside church property and clerical livings! Screwing with who is married to who is screwing with the basics under which land is mortgaged, and, as in the cautionary case of Jarndyce versus Jarndyce, inheritances are anticipated. Extend the intestate period by throwing marriages and successions into doubt, and the effective interest rate on land falls. And if there is one thing John Bull will not stand . . . 

So that's at least the framework of an argument about how political turmoil and contested royal successions start with a broad-based aversion to too-low rates of return on money. I am going to close this and get on with my day by bringing it back to Bosworth Field, which is all about two contestants for the crown who have got to be where they are by exploiting the power of the retcon. by retrospectively writing marriages into and out of law, Richard III and Henry VII have created (contested) claims to the throne. We can even see a route by which their efforts lead on to Henry VIII's similar endeavours, which set up both the contested successions of the next two centuries and the English Reformation. 

And from here, I suggest, a it is straight down hill to the marriage of Richard Cooper and Elizabeth Fenimore, and a culture in which  property and citizenship depend on asserting a racial identity. There is, I am saying, a throughline between not standing for 2%, and defining oneself by an edited past that guarantees that you are 100% White. 


*Out of curiosity, and also laziness, I checked to see what Wikipedia had to say about the religion controversy concerning Anne of Denmark, and, oh boy, did I hit a trove:

  1.  Historians are divided on whether Anne ever converted to Catholicism. "Some time in the 1590s, Anne became a Roman Catholic." Willson, 95; "Some time after 1600, but well before March 1603, Queen Anne was received into the Catholic Church in a secret chamber in the royal palace". Fraser, 15; "The Queen ... [converted] from her native Lutheranism to a discreet, but still politically embarrassing Catholicism which alienated many ministers of the Kirk." Croft, 24–5; "Catholic foreign ambassadors—who would surely have welcomed such a situation—were certain that the Queen was beyond their reach. 'She is a Lutheran', concluded the Venetian envoy Nicolo Molin in 1606." Stewart, 182; "In 1602 a report appeared, claiming that Anne ... had converted to the Catholic faith some years before. The author of this report, the Scottish Jesuit Robert Abercromby, testified that James had received his wife's desertion with equanimity, commenting, 'Well, wife, if you cannot live without this sort of thing, do your best to keep things as quiet as possible.' Anne would, indeed, keep her religious beliefs as quiet as possible: for the remainder of her life — even after her death—they remained obfuscated." Hogge, 303–4.


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