Carroll Quigley - Tragedy and Hope - A History of the World in Our Time

On the political level equally profound changes took place in the twentieth century. These changes were associated with the basis on which an appeal for allegiance could be placed, and especially with the need to find a basis of allegiance which could win loyalty over larger and larger areas from more numerous groups of people. In the early Middle Ages when there had been no state and no public authority, political organization had been the feudal system which was held together by obligations of personal fealty among a small number of people. With the reappearance of the state and of public authority, new patterns of political behavior were organized in what is called the “feudal monarchy.” This allowed the state to reappear for the first time since the collapse of Charlemagne’s Empire in the ninth century, but with restricted allegiance to a relatively small number of persons over a relatively small area. The development of weapons and the steady improvement in transportation and in communications made it possible to compel obedience over wider and wider areas, and made it necessary to base allegiance on something wider than personal fealty to a feudal monarch. Accordingly, the feudal monarchy was replaced by the dynastic monarchy. In this system subjects owed allegiance to a royal family (dynasty), although the real basis of the dynasty rested on the loyalty of a professional army of pikemen and musketeers.

The shift from the professional army of mercenaries to the mass army of citizen-soldiers, along with other factors acting on other levels of culture, made it necessary to broaden the basis of allegiance once again after 1800. The new basis was nationalism, and gave rise to the national state as the typical political unit of the nineteenth century. This shift was not possible for the larger dynastic states which ruled over many different language and national groups. By the year 1900 three old dynastic monarchies were being threatened with disintegration by the rising tide of nationalistic agitation. These three, the Austro-Hungarian Empire, the Ottoman Empire, and the Russian Empire of the Romanovs, did disintegrate as a consequence of the defeats of the First World War. But the smaller territorial units which replaced them, states like Poland, Czechoslovakia, or Lithuania, organized largely on the basis of language groups, may have reflected adequately enough the nationalistic sentiments of the nineteenth century, but they reflected very inadequately the developments in weapons, in communications, in transportation, and in economics of the twentieth century. By the middle of this latter century these developments were reaching a point where states which could produce the latest instruments of coercion were in a position to compel obedience over areas much larger than those occupied by peoples speaking the same language or otherwise regarding themselves as sharing a common nationality. Even as early as 1940 it began to appear that some new basis more continental in scope than existing nationality groups must be found for the new superstates which were beginning to be born. It became clear that the basis of allegiance for these new superstates of continental scope must be ideological rather than national. Thus the nineteenth century’s national state began to be replaced by the twentieth century’s ideological bloc. At the same time, the shift from amateur to specialist weapons made it likely that the new form of organization would be authoritarian rather than democratic as the earlier national state had been. However, the prestige of Britain’s power and influence in the nineteenth century was so great in the first third of the twentieth century that the British parliamentary system continued to be copied everywhere that people were called upon to set up a new form of government. This happened in Russia in 1917, in Turkey in 1908, in Czechoslovakia and Poland in 1918-1919 and in most of the states of Asia (such as China in 1911).

When we turn to the economic level, we turn to a series of complex developments. It would be pleasant if we could just ignore these, but obviously we cannot, because economic issues have been of paramount importance in the twentieth century, and no one can understand the period without at least a rudimentary grasp of the economic issues. In order to simplify these somewhat, we may divide them into four aspects: (a) energy; (b) materials; (c) organization; and (d) control.

It is quite clear that no economic goods can be made without the use of energy and of materials. The history of the former falls into two chief parts each of which is divided into two subparts. The main division, about 1830, separates an earlier period when production used the energy delivered through living bodies and a later period when production used energy from fossil fuels delivered through engines. The first half is subdivided into an earlier period of manpower (and slavery) and a later period using the energy of draft animals. This subdivision occurred roughly about a.d. 1000. The second half (since 1830) is subdivided into a period which used coal in steam engines, and a period which used petroleum in internal-combustion engines. This subdivision occurred about 1900 or a little later.

The development of the use of materials is familiar to everyone. We can speak of an age of iron (before 1830), an age of steel (1830-1910), and an age of alloys, light metals, and synthetics (since 1910). Naturally, all these dates are arbitrary and approximate, since the different periods commenced at different dates in different areas, diffusing outward from their origin in the core area of Western Civilization in northwestern Europe.

When we turn to the developments which took place in economic organization, we approach a subject of great significance. Here again we can see a sequence of several periods. There were six of these periods, each with its own typical form of economic organization. At the beginning, in the early Middle Ages, Western Civilization had an economic system which was almost entirely agricultural, organized in self-sufficient manors, with almost no commerce or industry. To this manorial-agrarian system there was added, after about 1050, a new economic system based on trade in luxury goods of remote origin for the sake of profits. This we might call commercial capitalism. It had two periods of expansion, one in the period 1050-1270, and the other in the period 1440-1690. The typical organization of these two periods was the trading company (in the second we might say the chartered trading company, like the Massachusetts Bay Company, the Hudson’s Bay Company, or the various East India companies). The next period of economic organization was the stage of industrial capitalism, beginning about 1770, and characterized by owner management through the single-proprietorship or the partnership. The third period we might call financial capitalism. It began about 1850, reached its peak about 1914, and ended about 1932. Its typical forms of economic organization were the limited-liability corporation and the holding company. It was a period of financial or banker management rather than one of owner management as in the earlier period of industrial capitalism. This period of financial capitalism was followed by a period of monopoly capitalism. In this fourth period, typical forms of economic organization were cartels and trade associations. This period began to appear about 1890, took over control of the economic system from the bankers about 1932, and is distinguished as a period of managerial dominance in contrast with the owner management and the financial management of the two periods immediately preceding it. Many of its characteristics continue, even today, but the dramatic events of World War II and the post-war period put it in such a different social and historical context as to create a new, sixth, period of economic organization which might be called “the pluralist economy.” The features of this sixth period will be described later.