William Shepherd

On 21st August this year Russia’s state-controlled Vnesheconombank( VEB ) paid off £11.8 billion in debts to the Paris Club of creditors. The seventeen countries had not expected repayment of their loans to the Soviet Union…and certainly not the £680 million technically due for early repayment. Eight years after the Financial Crisis of 1998 Russia no longer has any debt obligations while Gold & Currency Reserves are up 50% this year to £150 billion.

On the cabin table before me are five articles from a Russian Supplement distributed by The Daily Telegraph. Nina Kulikova writes about Inflation in Russia and Yelena Korop on State Investment in Russia. Nina and Yelena are women’s names so my anecdotal evidence reflects an important reality to emerge from three quarters of a century of Communist Rule.

The degree of equality in modern urban Russia where professional elites are to be found, matches the 40% requirement laid upon the Boards of Norwegian Corporations by their Oslo Parliament.

In the other three articles Vladimir Bogdanov writes once and Dmitry Dokuchayev writes twice about Russia’s Debts. Vladimir tells us the Russian Government no longer owes any money to the International Financial Brotherhood of Central Bankers. Dmitry tells us that the Russian People are mired in debts and in hock to something euphemistically called the Russian Banking Sphere and that this strange entity has presented the Russian Parliament with a plan for cancelling a goodly portion of the debts it has created. These five articles suggest that Financial Capitalism has done a good job in Russia and can pull out…after two decades…leaving Russia to her grizzly fate.

How much longer America’s Stormtroopers and Private Contractor’s remain in Iraq depends on whether comparable progress has taken place at the Iraq Central Bank between the First and Second Gulf Wars. It seems that their stay could be anything from three months to three decades. The Bush Dynasty may yet face interrogation about its repeated failures in Mesopotamia…not in Geneva or the Hague…but before a Court of Central Bankers in Basle.

During the Carter and Reagan Presidencies two power factors would have loomed large in the deliberations of the Foreign Policy Elites in Iran…an undivided secular and religious unity. First the fear of the Next Crusade of the Judaic and Neo-Judaic (Christian) Fundamentalists…the Koran versus the Bible. Secondly the Millennium Aspirations of Russia for a Warm-Water Port. Strategically both forces harbour dreams of a settlement that would last a Thousand Years. In response Iran would have formulated a strategy…with developments in Iraq as a key focus.

Iran Strategy would have been to destroy Iraq militarily; remove the danger posed by Saddam Hussein as a power rival; extend the Iranian Shia Revolution into Iraq; expand Islamic Fundamentalism in the Moslem World and beyond; and present the United States of America to the world as The Great Satan in the Middle East. Where is the cartoon of President Mahmoud Ahmadinejad posing in front of a banner with the words Mission Accomplished?

On 30th October 2006 there was a Parliamentary Debate in London on the Second Iraq War. The war has been waging for 1 300 days…killing 120 and injuring 4 000 British Soldiers. The total death toll is estimated at 655 000 Iraqi Non-combatants and 3 000 Coalition Forces…twice the highest death count in any of the other 25 conflicts around the globe since the end of the Vietnam War 40-years ago. Her Majesty’s Government won the debate by a 25-vote margin. Twelve Labour Rebels voted against the ruling Labour Government of Tony Blair and Gordon Brown.

During the day the Government made a series of retreats, refusing a proper inquiry into the conduct of the war in the morning before promising one in the evening…after Our Troops have left Iraq…in order to ensure its Commons Victory. In recent times there have been two occasions when this condition has been waived and The Commons have debated the conduct of a war before it had ended. The first was in World War I over the failed attempt to capture the Dardanelles. The second was at the start of the World War II over the fiasco of the Norwegian Campaign.

In 1940 the British Government defined Britain’s task as bringing American Power into a European War on their side. Forty years later when Saddam Hussein’s secular Iraq began to be groomed for Global Capitalism, Islamic Iran saw itself similarly threatened by a Foreign Invader. Although Military Courage in the field is ever matched by Intellectual Cowardice at home, the real task of The Historian is to challenge assessments of the National Interest.

Nobody reads H.G. Wells any more but three-quarters of a century ago he was a giant. He once remarked that Finance and Administration were key to the rise and decline of Imperial Fortunes. Wells was brought up to understand the two 19th Century schools of thought on Trade and War. But he also glimpsed as through a glass darkly a third possibility. This faded option was the driving force behind the 12th to 17th century Hansa Trading Empire.

In the 19th Century the Corn Laws were at the heart of English Parliamentary Debates. Most of the arguments were rooted in vested interests. Nonetheless underpinning the opposing positions were moral arguments about War and its relationship to Trade.

The Free Traders argued for Peace through Trade and the Protectionists for Peace & Permanence through Self-Sufficiency. The Hansa represented a third school. Trade per se was not the point at issue but the manner and moral tenor of that trade…Trade as a Carrier of the Usury Virus for instance.

In the Middle Ages, the walled town of Visby was at the centre of the Hansa Trading Empire with commercial treaties and lines of supply and demand reaching out into all the corners of the Roman Catholic United States of Europe. Maritime Law was determined by the Hanseatic Elders. Herring was the Hansa staple and a Hansa ship never travelled with an empty hold. Visby was host to the Hansa top brass for many years...as good an off-shore tax haven as one would wish.

The people of Gotland however were less than enthusiastic about this great cancerous growth upon their island home. There were skirmishes and unstable alliances. The little maritime interests of the Gotland fishermen and the little landed interests of the Gotland smallholder would not always coincide with the big European maritime interests of the Hansa Merchants…and as time passed even less with the commercial interests of the Confederation of Hanseatic Towns.

By the end of the 14th century Gotland wanted nothing to do with the military pretensions of the Hanseatic League. They wanted out. Their prayers were answered. Mysterious cosmic force caused the deep ocean currents of the North Atlantic Ocean to move and the economics disappeared overnight from the Hansa Shipping Cartel. Gotland returned to its former peaceful glory and became the home of such great Swedish poetic spirits as Ingmar Bergman…creator of the rich visual and emotional feast that is his silver screen production of Mozart’s opera The Magic Flute.

It is normal to associate the Association of Hansa Merchants, the Confederation of Hansa Towns and the Hansa League of City States with the Hansa’s periods of Growth, Power and Decline. My model also has periods of growth, power and decline but my focus is on the key shifts in the Structure of the Hansa.

(I) Merchant Adventurers 1130-1180
(II) Merchants' Hansa 1180-1250
(III) Hansa of the Towns 1250-1350
(IV) The Golden Years 1350-1400
(V) Power Games 1400-1450
(VI) The War Years 1450-1480
(VII) Two Centuries of Decline 1480-1680.

In the summer of 1999 I sketched out a plan of research. My starting point would be the historic records of the five Hanseatic City-States of Visby, Novgorod, Hamburg, Riga and Danzig and the three Hansa Factories at London, Bergen and Boston.

Research into the Competitive Relationships between the Hansa and the Teutonic Order, the Roman Catholic Church, the English Court, the Swedish Court and the Spanish Court would also be pursued. Enlargement of the European Union would open up new opportunities to trace the relevant Medieval Documents.

Underpinning my Research Plan were two working assumptions. Strategically the Hansa operated like a modern multinational corporation. The Hansa’s goals would thus be to secure a minimum thirty percent market share in each key commodity sector.

Secondly, while the tariff measures of the Hansa at the end of the 13th century were grounded in Sound Political-Economic Theory and led to the rise of the Hansa, the confiscatory measures introduced at the beginning of the 15th century were grounded in Unsound Political-Economic Theory and led to the Hansa’s decline.

I have in mind to spend half of next year affiliated to the Economic History Department at Lund University while gathering the data needed to prepare Financial Accounts for 40 commodities traded by 200 Hansa City States from 1130 to 1630. Here is my basket of commodities:

Amber, Barley, Beer, Butter, Cereals, Cloth, Copper, Corn, Fish, Flax, Flour, Furs, Gold, Grain, Hemp, Herrings, Hides, Honey, Iron, Lead, Leather, Linen, Manufactures, Orientals, Pitch, Potash, Rye, Saffron, Salt, Saltpetre, Silk, Silver, Spices, Sugar, Tar, Timber, Wax, Wheat, Wine and Wool.

Seven years ago I argued that a Hansa Study of this nature would be valuable as Pure Research. However two further benefits now suggest themselves.

First my Hansa Study will establish the basis for exploring the hypothesis that the Financial Technique of Central Banking introduced in the second half of the 17th century shifted the relationship between War & Peace, Trade, Finance and Administration and led to our 300 years of Global Material Expansion.

Secondly…to the extent that British Imperial Policy from Elizabethan Times to the present day was grounded in lessons learnt from the success and failure of the Hansa…valuable insights are to be gained into Trading Policy for a new century by establishing the soundness of the Political-Economic Doctrines presently vying for public favour.