Image courtesy of Wikimedia Commons.

History does not repeat itself, but it rhymes. Sometimes ascribed to Mark Twain, this bonmot sounds like an increasingly banal truism. But it should give us food for thought and the possibility to ruminate what uses history can be put to in the light of current affairs. And by this we should mean deep history, reaching back centuries if not millennia. Because trying to understand current problems in the light of current or contemporaneous history, as is most usually done by politicians, public discourse and the popular press, leaves out more unknowns in the equation than it solves. With the recent rise (and fall) of the Islamic State, the collapse of nations and states in the Near East, the creaks in the European Monetary System and the cultural consensus marked by the European unification idea, with Brexit and the Scottish Independence Referendum and, finally, the rise of Trump and the promise to “make America great again”, the better angels of our nature seem on the retreat. Xenophobia, nationalism and racism, chauvinism seem on the up and democracy on the down. Even protectionism – which never disappeared, not even within the so-called “free market” economies of the west – is on the up again. Or so it seems. Yet have they? It is, perhaps, due to a fatal misunderstanding of the dynamics of history, particularly the taste for deep history that have made us forget about three fundamentals: first, the demons which we fear are returning are creations entirely of our own. Secondly, they were created only very recently, in the process of moulding and casting exactly those cornerstones of modernity we have learnt to cherish as the “better angels” of our nature. Third, this “modernity”, however, has been conceptually moulded on a dangerously deceptive historical short-termism. By learning to forget history we have turned our modernity into a timeless and eternal being which we believed should be true and applicable forever.

In fact, our better angels – capitalism, democracy and social and gender equality – came at a huge cost; at a bill that now almost seems too big to be repaid. With democracy and capitalism came neoliberalism, European cultural imperialism and the failure to understand, let alone appreciate and respect, cultures and mentalities different from our own (see China, or Russia and the anger at the NATO expansion to the Baltic countries). Modern capitalism and modern economic growth came at the grotesque cost of increasing inequality, between and within nations. Global economic inequality has widened considerably during the past two centuries. Before the industrial revolution, economic capabilities were more evenly distributed, albeit generally at a much lower level, as historians like Jan Luiten van Zanden would argue. And within nations and states, social inequality has also increased to absurd rates – up to the point that there are, in the western nations, individuals such as Bill Gates, George Soros, or in fact Donald Trump whose fortunes surpass the yearly GDP of most African countries or the Near East (it is one of the ironies of history that some of these individuals now run their country).

More importantly, we have lost the sense of deep history: most of our viewpoints and ideologies are marked by a near absolute forgetting of the pre-1945 human past. This has created a striking short-sightedness in vision and approach. It has led to people throwing the bathwater – say the current US president-elect – out with the baby, that is: policies of state-promoted economic growth that made most European nations rich since the Renaissance and laid the foundations for modern capitalism (c.1350-1973 A.D.). We tend to connect any voice arguing against free trade and free capital flows with the “bad” angels of our nature, putting protectionism or reneging on dubious arrangements (such as TTIP, CETA) into the same ugly pot as misogynist chauvinism, xenophobia and racism that sometimes comes with the salesmen promoting the package. We have been stuck within self-referential and circular systems of political and economic modernity – against which we measure our chances and performances: of well-being, democratic processes and humanism – that hardly ever reach beyond the Second World War. We have forgotten that processes and institutions which we think of as the foundational stones of our wealth, virtues and entitlements — economic growth, democracy, racial, gender and sexual equality, European political and monetary cooperation, NATO, NAFTA and free trade — are fairly recent and, in fact, when seen in deep historical time, represent historical anomalies.

That is to say these achievements are as likely to wither away, sooner or later, unless we get to grips with strategies of how to preserve them. Here deep history can serve us a lesson. Just take protectionism as pars pro toto. It can be a bad thing: for some, and at certain times. Sometimes it does reduce social welfare. Yet the history of the state, policy and the rise of European capitalism since the Renaissance gives us as many examples of state interventionism in which mild and well-guarded processes of tariff intervention and other aspects of policy dubbed “protectionist” made a manifestly positive contribution for everyone adopting them (wisely), i.e. the European economy (which existed, in spirit, long before the European Union).  It is nowadays commonly accepted that in order to flourish, capitalist market economies need a tight and well-designed web of market regulation. This includes reliable systems of enforcement: of the “rules of the game” as much as credible commitment by the state to uphold such webs of regulation. Only a very traditional economic-historical interpretation has tended to view such measures as protectionist, rent-seeking and generally unfavourable for good capitalist development. New – more empirical, less theoretical – historical studies have made contrary claims. The state’s role in regulating capitalism and economic growth in the nineteenth and twentieth century economy is now well-understood; even the first industrial nation (Britain) owed much of its success to a pro-active interventionist state since the Restoration 1660, if not earlier, as historians such as Parthasarathi or Pincus would argue; let alone later-comers such as Germany, Austria, Sweden and the US. And if current chancellors of a decidedly laissez-faire ilk call for, as one of their key goals, a reduction of UK government expenditure to 40 per cent of GDP they are, prima facie, doing no less than acknowledge that the government still is the single-largest player in the game, willingly or unwillingly, even within a liberal-capitalist market economy. In fact, it has been for a long time. Currency regulation, regulation of markets, promotion of manufactures and domestic economic competitiveness, have represented cornerstones leading European nations to modern economic growth. Since the middle ages governments took active steps at promoting the common weal. All the “new” recipes applied in the nineteenth and twentieth process of promoting and regulating modern capitalism were known, and had been explored, since the Renaissance (Rössner, book in progress). And a growing number of scholars will now argue that such measures, only ill-described as “mercantilist”, in the long run led to the economic integration and growth of the European capitalist economy.

Other things that never represented an historical norm but remained very peculiar exceptions are democracy (successfully applied especially in slave-based societies such as ancient Greece or the ante-bellum US), gender equality, and social justice. Because they never were the norm they require particular attention and care, if we want to preserve them. Other models were out there. Just consider feudalism, personalised legal status and privileges as applicable in pre-1789 Ancien Règime Europe. Just imagine BREXIT within a pre-1789 legal setting: people would opt in and out of the EU not on a national-geographic (electoral list) but on a personal basis, meaning that EU norms and freedom of travel would now be applied only to individuals in the country who voted “remain”. This would create administrative problems, to be sure, as modern policy and definitions of state, denizenship and nationality are bound by, and tied to, geographic areas defined by discrete aspects of geometry (border, territory and citizenship). Or imagine a world that is not marked by currency blocs and monetary integration such as the EURO. The last thousand years of European monetary history were, most of the time, characterised by competing currencies and no integration. And if there was integration, it didn’t function particularly well most of the time, as another current research project by the present author, studying monetary integration in the Holy Roman Empire or “Germany” between 1500 and 1806 suggests (Rössner 2014). There were hundreds of different currencies before 1871 even in the part of the continent commonly known as “Germany”. Currency is an aspect of political sovereignty that is not easily given up. Countries that have no chance of improving their ailing economy by devaluation (such as current-day Greece) are bearing the costs of failing public infrastructure, massive youth unemployment and loss of societal cohesion. Countries that are allowed to manipulate their currency to the domestic interests (such as China) are regularly accused of manipulation and tinkering with the laws of the free market. But they are probably doing the right thing. Ironically one of the worst likely culprits of late, whose economic “programme”, if implemented letter by letter, would entail just this (i.e. a most grotesque interference with the laws of the free market), has also been one of the most ardent accusers of the Chinese government of doing precisely what he has set himself out to do: “make America great again” by interfering with the market. The Chinese government is currently doing the same, bringing back China where it stood about two or three centuries ago (not long in deep-historical time): a world economic leader.

But contrary to much public ado this is no “return to mercantilism”. European politicians and intellectuals during the age of mercantilism (1500s-1970s with a brief interval between 1870 and 1913) were cleverer than that. Incidences of trade wars and unwise policy are rare in the history of European capitalism since the Renaissance; examples of mercantilism wisely applied are more numerous. In many ways the “mercantilists” (a very unlucky term) laid the foundations for modern European capitalism. But they would have abhorred some of the principles often associated with their views today, such as Xenophobia, misogyny and racism. Some of the finest mercantilist thinkers and philosophers of the European enlightenment had a high respect of foreigners and never contemplated abrogating people on the grounds of race, colour or birth.

Dr Philipp Roessner is Lecturer in Early Modern History and author of Martin Luther on Commerce and Usury (London/New York: Anthem Press, 2015); ed., Economic Growth and the Origins of Modern Political Economy: Economic Reasons of State, 1500–2000 (Milton Park/New York: Routledge, 2016); Austria Supreme (If It So Wishes). – An Economic Strategy for the Empire and Austria (1684) (transl. Keith Tribe); commented introduction (c. 100pp) by. P. R. Rössner (London / New York: Anthem, 2016). Philipp Robinson Rössner, ‘Monetary Instability, Lack of Integration and the Curse of a Commodity Money Standard. The German Lands, c.1400–1900 A.D.’, Credit and Capital Markets, 47/2 (2014), 297–340 You can view more on his research here: https://www.research.manchester.ac.uk/portal/philipp.roessner.html