mfioretti: wwi*

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  1. After World War I the U.S. Government deviated from what had been traditional European policy – forgiving military support costs among the victors. U.S. officials demanded payment for the arms shipped to its Allies in the years before America entered the Great War in 1917. The Allies turned to Germany for reparations to pay these debts. Headed by John Maynard Keynes, British diplomats sought to clean their hands of responsibility for the consequences by promising that all the money they received from Germany would simply be forwarded to the U.S. Treasury.

    The sums were so unpayably high that Germany was driven into austerity and collapse. The nation suffered hyperinflation as the Reichsbank printed marks to throw onto the foreign exchange market. The currency declined, import prices soared, raising domestic prices as well. The debt deflation was much like that of Third World debtors a generation ago, and today’s southern European PIIGS (Portugal, Ireland, Italy, Greece and Spain).

    In a pretense that the reparations and Inter-Ally debt tangle could be made solvent, a triangular flow of payments was facilitated by a convoluted U.S. easy-money policy. American investors sought high returns by buying German local bonds; German municipalities turned over the dollars they received to the Reichsbank for domestic currency; and the Reichsbank used this foreign exchange to pay reparations to Britain and other Allies, enabling these countries to pay the United States what it demanded.

    But solutions based on attempts to keep debts of such magnitude in place by lending debtors the money to pay can only be temporary. The U.S. Federal Reserve sustained this triangular flow by holding down U.S. interest rates. This made it attractive for American investors to buy German municipal bonds and other high-yielding debts. It also deterred Wall Street from drawing funds away from Britain, which would have driven its economy deeper into austerity after the General Strike of 1926. But domestically, low U.S. interest rates and easy credit spurred a real estate bubble, followed by a stock market bubble that burst in 1929. The triangular flow of payments broke down in 1931, leaving a legacy of debt deflation burdening the U.S. and European economies. The Great Depression lasted until outbreak of World War II in 1939.

    Planning for the postwar period took shape as the war neared its end. U.S. diplomats had learned an important lesson. This time there would be no arms debts or reparations. The global financial system would be stabilized – on the basis of gold, and on creditor-oriented rules. By the end of the 1940s the Untied States held some 75 percent of the world’s monetary gold stock. That established the U.S. dollar as the world’s reserve currency, freely convertible into gold at the 1933 parity of $35 an ounce.
    It also implied that once again, as in the 1920s, European balance-of-payments deficits would have to be financed mainly by the United States. Recycling of official government credit was to be filtered via the IMF and World Bank, in which U.S. diplomats alone had veto power to reject policies they found not to be in their national interest. International financial “stability” thus became a global control mechanism – to maintain creditor-oriented rules centered in the United States.

    To obtain gold or dollars as backing for their own domestic monetary systems, other countries had to follow the trade and investment rules laid down by the United States. These rules called for relinquishing control over capital movements or restrictions on foreign takeovers of natural resources and the public domain as well as local industry and banking systems.

    By 1950 the dollar-based global economic system had become increasingly untenable. Gold continued flowing to the United States, strengthening the dollar – until the Korean War reversed matters. From 1951 through 1971 the United States ran a deepening balance-of-payments deficit, which stemmed entirely from overseas military spending. (Private-sector trade and investment was steadily in balance.)
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  2. Even though the question is loaded with a lot of questionable assumptions, I'll try to answer as objectively as possible.

    Tl;dr: geographical features of the country make it quite hard to develop and challenging to carry out trade (domestic and foreign). To make matters worse, we suffered significant setbacks roughly every 50 years and had no one to help us

    Let's dissect this piece by piece. I'll describe the factors I outlined above and will try to explain how they influenced the economic development of my country.

    First, let me stress that wealth is not built within one or even two generations - it requires a lot of hard work building over centuries (unless others are helping). Therefore I'll start with geography as a principal factor that determined the speed of accrual of productive capital in Russia.

    I) The country is not particularly welcome to people living here.
    It's in the north! Russia's southernmost point (one of the peaks of the North Caucasus) is at 42,2 degrees North or equator. This roughly corresponds to New York/Boston or Cleveland. This means it's cold over here (duh!). Having no seas nearby (which is an issue to be covered separately below) means that the climate here is tougher than in other places of the same latitude (i.e. elsewhere in Europe). Speaking from personal experience as someone who lived for 17 years in West Siberia, even without permafrost having winter that lasts roughly 8 months is tough.

    How does it translate to obstacles to economic development? First, agriculture is an uphill battle: we do have vast fertile steppe plains, but they are prone to frost and droughts, and output from an acre will inevitably be lower than in other places. Second, infrastructure is more difficult to build: you need more building materials to properly insulate the housing and roads are more prone to degradation when they freeze and unfreeze several times a year. Third, we are bound to be less energy efficient because we simply need more energy to keep our houses warm (and more calories to stay alive).

    To sum up, simply living in Russia requires relatively more resources just to survive than living anywhere else.

    II) Russia's geography hinders rather than enforces trade, domestic and international.
    Trade is the bloodstream of economy, since moving things around is important to economic growth. Moving stuff around by water (sea and rivers) is always cheaper than moving stuff by land (and in the past it was also less dangerous since on land you could be ambushed and robbed by rogues more easily). It can be argued that most of the countries that were the richest during their times relied heavily on waterways to build wealth. By contrast, world's poorest countries are mostly landlocked (think Chad or Mali). The Hansa, Venetian and Genoese republics, Portugal, The Netherlands, Great Britain and currently the U.S. (and for the U.S. the vital waterway is the world ocean as a whole) all relied (or rely) on waterways to facilitate trade.

    Russia has no such luxury. Domestically, most rivers flow either into the Caspian (a lake), or into the Arctic Ocean. Sole notable exceptions are Dnieper and Don. Unfortunately, most of these rivers are frozen over the winter due to Point I.

    For foreign trade purposes, Russia is essentially landlocked. It's European part has access to the Baltic, Black and White seas, but the first two are inland seas (and the entry / exit is not controlled by Russia - hence our obsession with Turkish straits for 200 years).

    Compared to Europe (which has Rhein, Elbe, Loire, Danube and also Baltic and Mediterranean Seas to facilitate trade), Russia has no waterways of similar quality and can not be easily connected to those trade hubs. It is restricted to using inland transportation, which is not an easy task for land which is frozen for the biggest part of the year.

    To sum up, Russia has to work much harder to ensure the flow of raw materials, finished goods and people.

    III) Russia experienced huge setbacks throughout its history, including five catastrophic ones every 50 years for the past two centuries

    Russia is big and it's very hard to defend effectively. Its core is vast plains which are open to invasion. Until the 17th century we were constantly harrassed from the steppes to our east and south (first Mongols later Tatars). Countless towns were repeatedly burnt and pillaged during these raids and thousands of Russians were enslaved. The raids stopped only when the tsars went on counter-offensive and conquered the steppes - the last serious foe was Crimean khanate that was annexed in the 18th century under Catherine the Great. It can be argued that it was continued Russian resistance to Mongols and Tatars that kept Europe from being burnt to the ground by them - they were too exhausted to continue their onslaught westwards.

    There were numerous invasions from the West as well: Teutonic Knights, Swedes and Poles at some points in time all did this.

    However, the 19th and 20th centuries that were the bloodiest and the most devastating to Russia's economy.
    1812: Napoleon invades Russia and gets his ass kicked but only because we burn our cities to ashes
    1853: Russia fights three great powers (Great Britain, France and Ottoman Empire) plus Sardinia in the Crimean war and loses
    1914: First World War erupts and Russia fights Germany, Austria-Hungary and the Ottomans on the Eastern front.
    1917: Bolshevik revolution, disintegration of the country, invasions by Great Britain, France and Japan, civil war, invasion from Poland, than famine and misery.
    1941: Hitler invades, it's us against the German War Machine that has control over the whole Europe (allies did help with supplies, and they helped a lot, but it's us who did most of the fighting). 27 million die, the European part of the country is destroyed. No Marshall plan for Russia afterwards, we're on our own against the world. Good luck rebuilding your economy after the bloodiest war in history when half the world (including the world's most powerful contry) wants you dead.
    1991: the Soviet Union collapses. The country disintegrates, supply chains get broken, inflation and organized crime rampant. Millions of people see their world shattered. Theoretical physicists sell newspapers on the streets, rocket scientists rely on home-grown potatoes not to starve. Oligarchs overtake the industries. Does the West help? Nope. No aid for Ivan, we have to rebuild stuff on our own again.

    Look, I'm not saying that our government is not corrupt, or that communist economy was great for us (it was not). I just want to say that there are a lot of objective factors due to which we are not as rich as <insert country name here>. Hopefully this gives you a fuller picture of how our rough past contributed to our rough present.
    Tags: , , , , , by M. Fioretti (2015-05-07)
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  3. Despite initial plans, it proved impossible to use native North African soldiers (though they later went to Macedonia) because they would be fighting against fellow Muslims and possibly occupying the holy sites of the Middle East.

    But a quarter to a third of the French soldiers were Tirailleurs Sénégalais, or Senegalese Infantry, though in reality they were recruited from all over French West Africa and included some creoles from the West Indies and islands of the Indian Ocean. While it is not true that there was no memory of the Dardanelles campaign in inter-war France, it was largely colonial, being especially strong among the settler community in North Africa.

    Needless to say, the Senegalese had their own oral traditions but they were never in any active sense part of the official “memory” of the campaign. When the Empire vanished after the second world war, and French Algeria with it, the most obvious sources of a commemorative culture of Gallipoli disappeared.
    Not exactly a colonial campaign

    The paradox, as rapidly became evident to the French soldiers, is that Gallipoli as an experience had little of the colonial campaign about it. The Turkish soldiers who opposed the landings were men fighting to defend their homeland and religion, and they did so as tenaciously as any of the other European armies of the Great War.

    As a front, confined to a tiny area but extended by naval logistics on both sides to the Greek islands and to Constantinople respectively, Gallipoli offers a perfect laboratory for historians wishing to study the nature of warfare in the Great War.

    Instead of being a colonial exception, it was a microcosm of the European war at large. What the French discovered to their painful surprise becomes an exciting challenge to the historian a century on.
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  4. This new study revealed that MDR tuberculosis derives primarily from a strain that originated in East Asia around six thousand years ago, when agriculture became widespread in that region. Whole genome sequencing of 110 representative isolates revealed that the MDR population went through two discrete population growth phases: one between 1822 and 1843, during the Industrial Revolution, and the other between 1896 and 1916, a period that included World War I. The authors note: "These recent expansions remarkably match known episodes of Chinese immigration." Thus, the bugs got out of East Asia and spread through opportunities provided by world events.

    The population of these MDR strains expanded before the onset of antibiotic use; the authors deduce from this that drug resistance was not the primary cause of the population expansion, but rather a consequence of the unfortunate coincidence of a growing bacterial population and assorted public health debacles. In fact, the MDR population started to decrease in 1966, with the advent of large-scale antibiotic use. It slightly rebounded in 1987, with the onslaught of the HIV epidemic. But these strains needed an additional push to reach epidemic proportions. That was provided by the collapse of the public health system in the former Soviet Union.

    The researchers concluded their study by scanning for genes that are under positive selection but are unrelated to ones we know provide drug resistance. They found fifteen additional genes that may contribute to drug resistance; an unusually large fraction them than appear to be involved in bacterial cell wall biosynthetic pathways, which are often targeted by antibiotics.
    Tags: , , , , by M. Fioretti (2015-01-24)
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  5. So what about the major drugs of the First World War? It was not so much new substances as new ways to use those already in existence that was prevalent.

    Two drugs were redesigned for the war effort and can boast millions of addicts now, and over the past 100 years, with the vast majority of us having tried at least one.

    The innovations: tailor-made cigarettes and instant coffee. Both created by the American military to help their servicemen be more efficient. Until the start of the war coffee had to be brewed, and tobacco either filled in a pipe or hand-rolled, all of which was deemed a waste of valuable time. So fast-forward one hundred years. What lessons have we learned a century later?

    Not a lot it would seem.
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  6. “During the First World War Centenary commemorations, many organisations want to make original unpublished works such as diaries and letters accessible to the public. Because they are still under copyright protection, they cannot do so without seeking permission from the rights holder. This is even more problematic if the rights holders are untraceable.

    We are asking everyone who cares about our history, everyone who cares about telling our collective story without restrictions, to join the campaign.”

    Up to 50% of archival records in the UK are ‘orphan works’. This is when the rights holder cannot be identified and/or traced. The Imperial War Museum has an estimated 1.75 million documents that are orphan works, approximately 20-25% of the 7.9 million documents in their collections.

    The campaign is calling on the UK Government to reduce the term of copyright protection in certain unpublished works from the end of the year 2039 to the author’s lifetime plus 70 years, as per provisions laid out in the Enterprise and Regulatory Reform Act (ERRA) 2013.
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  7. THE "Christmas truce" is a term used to describe a series of unofficial cessations of hostilities that occurred along the Western Front during Christmas 1914. World War One had been raging for several months but German and Allied soldiers stepped out of their trenches, shook hands and agreed a truce so the dead could be buried. The soldiers also used that truce to chat with one another and, some claim, even play a football match. Unofficial truces between opposing forces occurred at other times during World War One but never on the scale of that first Christmas truce. Similar events have occurred in other conflicts throughout history - and continue to occur.
    Tags: , by M. Fioretti (2014-10-20)
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  8. What, you may ask, is wrong with celebrating heroes in this way?

    It is an attempt to rewrite the history of the war as somehow glorious and necessary. The war was an ugly clash of imperial rivalries, marked by the unspeakable horrors of trench warfare. Far from proving “the war to end of all wars”, it scarred a nation whose sons would be sent to die against the same enemy within a generation.

    Veterans also tend to baulk at their lauding as “heroes”, explaining themselves more humbly as men just doing their jobs and looking out for their comrades. Great War memorials rarely record either rank or medals, but are starkly simple alphabetical lists of all those who had their lives taken from them. By singling out only those men who received the top military award, the government is tearing up a century of practice.

    Why has the government taken this radical departure? The answer is in part a reaction to the public scepticism about military operations that has become mainstream with the failures of the “War on Terror”. The unprecedented anti-war demonstrations against the Afghanistan and Iraq wars in the early 2000s may represent a sea-change in public attitudes to foreign wars. This has alarmed conservative politicians of all parties and the military top brass, who have been scrambling to regain ground ever since.
    Tags: , , , , by M. Fioretti (2014-10-20)
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  9. Piketty's thesis has been shorthanded as r > g: that the rate of return on capital today -- and through most of history -- has been higher than general economic growth. This means that simply having money is the best way to get more money. Piketty uses examples from English and French literature (Austen, James and Balzac) to illustrate just how unimaginably weird this situation is by modern standards. The literature of the pre-modern era is full of people who understand that the being rich is a hereditary condition, and no matter what you create, or where you work, or how important you are, or how great you are, the only way to get rich is to be rich or marry someone rich.

    The most striking fact is that the United States has become noticeably more inegalitarian than France (and Europe as a whole) from the turn of the twentieth century until now, even though the United States was more egalitarian at the beginning of this period. What makes the US case complex is that the end of the process did not simply mark a return to the situation that had existed at the beginning: US inequality in 2010 is quantitatively as extreme as in old Europe in the first decade of the twentieth century, but the structure of that inequality is rather clearly different.

    Piketty challenges the idea that modernity somehow led to "merit" asserting itself as the new determinant of wealth. Instead, he makes a very convincing case that the increasing size of the capital class -- which expanded comfortably during the period of colonial expansion -- created a hunger for wealth that turned the aristocracy on itself in a squabble over who got to loot the colonies, which was World War I. This war was incredibly destructive of capital, and left many of the aristocracy holding onto potentially worthless government bonds issued by states that had nearly bankrupted themselves during the Great War. These states were so beholden to the rich that they couldn't contemplate inflating or taxing or defaulting their way out of debt, and so they took heroic and improbable measures to keep bondholders whole, which led to the economic chaos of of which WWII was born.

    WWII destroyed so much accumulated wealth that in its aftermath, a raft of previously unimaginable policies became the norm.
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  10. Many of the leading policy-makers of the dual monarchy hoped and believed that decisive action against their unruly South Slav neighbour would reinvigorate the Habsburg Empire and restore it to its rightful place as one of the foremost of the European great powers.

    In reality, the declaration was a precondition for the Empire’s ultimate collapse and dissolution. It would have no less dramatic consequences for the rest of Europe. It is this divergence between misplaced hope and actual outcome that is at the crux of why July 28 matters.

    That Austria-Hungary should have wanted to tame Serbia in the summer of 1914 was hardly a secret. Ever since the pro-Russian Karađorđević dynasty had acceded to the Serbian throne in a bloody coup a decade earlier, Serbia had been a thorn in Austria’s side. It fomented dissent within the Empire, promoted separatism in Austria’s Slav-populated southern provinces and generally undermined the prestige of the Habsburg Empire in the Balkans.
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