He applied the “Page 99 Test” to his latest book, States, Debt, and Power: 'Saints' and 'Sinners' in European History and Integration, and reported the following:In the words of George Eliot: 'Men can do nothing without the make-believe of a beginning.' And so, in writing about debt, one must take history seriously. However, as my book argues, our thinking about debt had become entrapped within the mind-set of formal economic reasoning and mathematical modelling with the consequences that we blind ourselves to some of the most important characteristics of what Is as much a cultural and social as an economic phenomenon. Page 99 begins the process of unravelling the history of 'public' debt, challenging the prevalent notion that it was a invention of the modern territorial state - look instead at the city states of late medieval Europe. Nevertheless, to paraphrase Cardinal Richelieu, the borrowing capacity of states became the 'Archimedes principle that drives the world.' It became a key measure of the power of states. History also serves to highlight the sheer contingency of borrowing capacity, in a way that eludes formal economic reasoning and modelling. States, Debt, and Power draws on historical debt data from across Europe over much longer time frames than formal economics to reveal not just contingencies, above all the impacts of external and internal insecurity on public finances, but also some historical patterns in the rise and fall of state power. At the same time, reading the book offers insight into the dangers of thinking narrowly in terms of public debt. Historically, and today, so many of our debt problems are traceable to the private sector: to banks, households and companies. A key reason for great prudence in public finances is the vulnerability of states to the transfer of private debt to public accounts. The most vulnerable states are those with excessively bloated and poorly regulated financial sectors, with high level of debt-fuelled domestic consumption, linked to cultures addicted to consumer affluence - and, of course, states whose security is at risk. Historically, political elites have failed to exercise due diligence in ensuring prudence in the face of these vulnerabilities. As States, Debt, and Power argues, political elites - and the publics, financiers, and academic analysts and commentators who are supposed to hold them to account - are prone to illusion, hubris and complacency about finances. The current debt crisis is just another manifestation of an historic problem....Learn more about States, Debt, and Power at the Oxford University Press website.
--Marshal Zeringue
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