The Obama administration and three cautionary tales

Sunday, September 6, 2009

Over the past few months, as the debates over the stimulus package, health care reform and the deficit have intensified, the swastika, as it often does, has made an unwelcome reappearance.

Protesters at congressional town hall meetings have equated some Democratic proposals to National Socialism, while some supporters of the president have denounced these same protesters as using Nazi-like tactics of intimidation. While extremists on both sides are prepared to believe the worst about each other, in truth, neither of these claims have much connection to historical reality.

Efforts to link Obama or his opponents to Nazis do correspond to a long-standing political tradition of attempting to link rivals with the most heinous enemies possible: Nazis and communists in the 20th century, anarchists in the late 1800s, or overseas powers, such as Spain, Britain and France, in the early decades of the American republic.

As a historian of modern Europe, and one with some experience as a student, teacher and scholar of both Nazism and communism, I can dismiss analogies to the dictatorships of Hitler and Stalin as so much overheated rhetoric and hope, although without much optimism, that activists will discard analogies to the Third Reich for arguments based on reason. However, I do see some historical analogies to other superpowers that might serve as warnings to the United States, and in particular to President Obama and the Democratic Congress: 16th-century Spain, 18th-century France and the 19th-century Ottoman Empire.

16th-century Spain

Spain in the 16th century, especially under kings Charles V and Phillip II, was the most powerful nation on Earth. Its empire in the mid-1500s included Spain, most of North and South America, the Philippines, half of Italy, enclaves in North Africa and what are today Belgium and the Netherlands. Additionally, as Holy Roman emperor, Charles V controlled much of Germany and Central Europe.

Rich beyond measure, Spain received into its ports shiploads of silver from the Americas, along with other wealth from its colonies and territories throughout the world. Spanish infantry were arguably the most tenacious in the world, and Spain was considered the favorite son of the Catholic Church for its determination to save Europe from what the church regarded as the two existential threats to Christendom: the Muslim Ottoman Empire of the Turks and the rising threat of Protestantism.

Even with the vast expanse of its empire, the riches of the Americas, its fierce soldiers, allies throughout Europe and the benefit of the masterful political and military leadership of Charles V and Phillip II, Spain's ambitions proved even greater than its resources. Possessing a vast empire required vast means to defend it, particularly in the midst of ongoing Protestant rebellions in the Netherlands and Germany, and the threat of Turkish encroachments in North Africa, the Mediterranean and Southeast Europe. Unable to achieve final victories anywhere, Spain instead was engaged everywhere, simultaneously spending on armies and navies on four continents against multiple enemies: France, England, the Ottoman Empire and Protestant rebels.

Even more important than its overreaching imperial ambitions, however, were Spain's disastrous economic policies. Spanish nobles, unlike those of Britain, looked down on merchants and entrepreneurs, even crafting a tax code that limited domestic trade, strangled investment and stifled manufacturing. These policies left Spain's economy overwhelmingly controlled by the state and dependent on foreign powers for manufactured goods and credit. While clergy and most nobles were exempt from taxes, business taxes were among the heaviest in Europe, reducing domestic productivity.

Unable to fund its military and domestic expenses from current revenue, Spain borrowed on the strength of future silver shipments from the Americas, covering its huge annual deficits with loans from foreign bankers. British and Dutch pirates and privateers, however, intercepted so many of these Spanish ships that Spain was forced to default on these loans four times in the 16th century. By 1700, Spain was exhausted and bankrupt, descending to the status of a third-rate power, stripped of its European territories and holding its American colonies only through the forbearance of the British and French. It had abandoned its war against the Ottomans and become an economic dependent of Britain, its former rival. Deficit spending, military overreach and a national bias against business, trade and free enterprise, prevented Spain from maintaining its 16th-century Golden Age.

18th-century France

France in the 18th century appeared nearly unassailable. With the most productive agricultural lands in Europe, and a monarchy and nobility that embraced commerce and craftsmanship, it was rich nation. France was admired for its strength, especially under Louis XIV, the Sun King, who had built the palace of Versailles, expanded France's borders and became the role model for an absolutist monarch.

French culture, style and language, including the intellectual achievements of the Enlightenment, became international, adopted by global leaders from Russia's Catherine the Great to American rebels such as Thomas Jefferson. Underneath the glitter of the palaces and the power of French armies on the march, however, France was highly leveraged and only one disaster away from collapse.

Louis XIV borrowed heavily to build his absolutist state and its palaces, also pouring resources into a global struggle against Britain. This rivalry with the British continued under his successors, Louis XV and Louis XVI, neither of whom had the political skills of the Sun King. Court expenses to maintain Versailles and, later, the lavish lifestyle of Marie Antoinette, were unsustainable.

Even more, French debt increased in attempts to fight the British in Asia, Europe and the Americas -- the latter leading to a successful intervention to secure the independence of the 13 American colonies from the English. This victory did not come cheaply, as French aid to the American Founding Fathers emptied France's treasury. Despite some victories, France lost almost all of their colonies to the British and others, leading to a dramatic decline in the prestige and power of the French state.

By the early 1780s, France was bankrupt, in the midst of famine and with a royal court that was both unable and unwilling to listen to the demands for more accountability, personal liberty and limits on state power. Peasant rebellions were one thing, but increasingly these calls for change came from members of the nobility, wealthy members of the upper middle classes or even reform-minded clergy. In 1789, the French Revolution began, leading to 25 years of terror, civil war and the dictatorship of Napoleon Bonaparte.

19th-century Ottoman Empire

The Ottoman Empire in the 19th century offers one more set of lessons. In the 16th and 17th centuries, the Ottoman Turks had terrorized Europe, using armies of Turkish cavalry to push back the limits of Christendom. Ottoman forces swept into southeastern Europe, besieged Vienna and threatened Italy and Germany. Turkish warships and allied Muslim pirates controlled much of the Mediterranean, imperiling European merchants and enslaving Christians.

By the 1800s, however, Ottoman strength had declined -- not from any fall in courage, but from a failure to embrace commerce and industrial activity. As in Spain, Ottoman elites disdained trade, allowing Greeks, Armenians, Jews and foreigners to undertake these activities. Restrictions on manufacturing, a tax system that favored land acquisition over commerce and Islamic restrictions against charging interest all hindered the economic development of the Ottomans. There was no Industrial Revolution in Ottoman lands.

Beginning in the late 1830s, however, a succession of sultans -- the absolute rulers of the Ottoman Empire -- undertook a series of reforms to address what they saw as the weakness of their state. Borrowing heavily from Europe, in ideas as well as technology, the Ottomans began to build railroads, schools, and a European-style military. This ongoing spending was intended as a stimulus package for the Ottoman Empire, with the hopes that it would jump start economic activity.

While the Ottomans did build thousands of miles of roads and rail lines and develop a modern army, they were unable to pay for this spending on their own and became heavily indebted to the British, French, Germans, Dutch and other European investors. By 1881, the European powers imposed on the Ottoman Empire the Public Debt Administration, a foreign-controlled institution that controlled all revenue of the empire.

Even with an army, a navy and a much-improved infrastructure, the sultans had lost their most important treasure: the sovereignty of their state. Uncontrolled spending had put what had been the most powerful state in the world at the mercy of its foreign creditors. In the aftermath of World War I, those same European powers divided the remnants of the Ottoman Empire among themselves.

This is not Spain in 1588 or France in 1789 or the Ottoman Empire in 1881. The United States, at least for the moment, possesses resources in proportion to its need and, again for the moment, credit sufficient to continue borrowing from international investors and foreign governments to cover exploding deficits.

Additionally, there are as yet no international rivals confronting the U.S. on the same scales as the enemies of Madrid, Paris and Istanbul in previous centuries. Finally, the United States has built-in safeguards in its political system -- free elections -- that act as a remedy for irresponsible behavior on the part of the president and Congress. While the lessons of history are often murkier than those of science, the paths followed by the Spanish, French and Ottoman Empires do serve as warning that perpetual deficits, an anti-business climate and valuing the prestige of the leader over the good of the people lead inexorably in directions that, in every previous case, have brought the ruin of nations.

Wayne H. Bowen is a professor and chair of the Department of History at Southeast Missouri State University.

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