Attention conservation notice: reviews of a few books I’ve read recently, in lieu of the full reviews that they all deserve.
Nicholas Riasanovsky and Mark Steinberg, A History of Russia, 7th edition. Covers the entirety of Russian history, from the cloudy origins of Kievan Rus’ up to Vladimir Putin’s rule, and I gather that the eighth edition has even more on post-Communist Russia. Given the immense swath that this spans — Kiev, the rise of the Muscovite state, Peter the Great, Catherine the Great, all the Romanovs, the state-furthered immiseration of the serfs, the Revolution of 1917, war Communism, the 5-year plans, Stalin’s insanity, the mid-20th-century stalling of Communism under Khruschev and Brezhnev, Gorbachev, Yeltsin, and Putin — it is amazing that Riasanovsky and Steinberg can pack it all into 600-odd pages.
The book tries very hard to address all the scholarly controversy around every disputed tale of Russian history. The result is that it’s incredibly balanced, but that less-settled bits of the history are surrounded by equivocations and quantities of nuance that most of us just don’t need to know. Since the parts of Russian history that are most in doubt are the earliest parts (simply because there’s less documentation), the most boring parts of A History of Russia are at the very beginning. If you can make it through the first 150 pages or so, I think you’ll find the rest of it quite captivating. Skim if you need to.
Riasanovsky and Steinberg also, for some reason, don’t believe in footnotes. There are maybe two footnotes in the entire work, and they come at the very end; I suspect that Steinberg’s addition to the newer editions (maybe the fifth and later) led to a little bit of modernization. The lack of footnotes isn’t a huge deal, given the lengthy bibliography at the end. That bibliography could stand to be narrated, but I assume they only put the choicest works back there.
In short, this is a terrific single-volume introduction to the history of Russia, and I intend to turn it into a jumping-off point for more-focused histories.
William Cronon, Nature's Metropolis: Chicago and the Great West. I mentioned a little while ago that I found it hard to express the majesty of this book. I’m still having trouble doing so, but I’ll give it a go.
Essentially William Cronon is trying to understand the connection between the city and the country. As a young tyke he always thought of the city — and Chicago was The City — as this gross agglomeration of steel and smoke and confusion, standing over the pristine, unspoiled wilderness that he and his family were driving to for vacation. Suffice to say that Nature's Metropolis is a prolonged rebuttal of that viewpoint.
It’s more than the obvious observation that the country does the work that the city asks it to do and that the city wouldn’t eat without the country. It’s that the very way in which we understand the world, and the very means by which we eat, were transformed utterly by the city — by Chicago in particular.
Let’s look at meat in particular; it’s one of three main commodities within Nature's Metropolis, the others being wood and wheat. Imagine the era before the railroad and before refrigeration. This was the era when ranchers would raise cows in Texas and the cowboys of myth would bring them north to be slaughtered. They had to be slaughtered near to where they were eaten, because meat spoils quickly and there was no fast way to carry the meat long distances.
The train changed all that, as it changed so much besides. Now cows could be loaded on trains and shipped north within a few days. Capitalist logic soon enough changed one part of this: it’s quite inefficient, if you’re treating a cow as a mobile store of meat, to load the entire animal on a train. Much more efficient to remove the bones and skin and eyes and load only the beef. But it would still be difficult, if not impossible, to carry a train full of beef long distances — Chicago to New York, say — without its rotting.
Hence the refrigerated train car: keep the beef cold; now you can concentrate all your meat production in one central place that can destroy animals at a vast scale, and can ship them from there to the rest of the country. This is how Chicago became meatpacker to the world; it would have been impossible without railroads. It also would have been impossible without the network of ice-refilling stations that sprang up alongside railroad tracks throughout the east. Refrigerated train cars and their ice-filling stations are associated with the names Armour and Swift.
A drastic change like this, from eating meat that your neighborhood butcher slaughtered to buying “dressed beef” destroyed thousands of miles away, doesn’t happen naturally. It took marketing and tough competition to turn Armour into a powerhouse among slaughterhouses. It required them to squeeze into new towns, undercut the existing butchers using prices that only massive capitalist enterprises could afford, and play hardball. But within a couple decades, the work had been done: we were eating meat that had been killed far away and brought to us by rail car.
The railroads, and capitalist enterprise, transformed nature and transformed farmland. Bison, you may remember, used to roam the Great West. Then the white man came. And then the railroads came; shooting bison from the train (I envision Sarah Palin, hunting from the air) became sport, and their pelts clothed women back east. There were so many bison that thousands and millions of them went to waste: the tourists would shoot them and leave their corpses to rot as the trains continued off into the hinterland. Soon enough there were no bison left, and cows came to roam the land. There’s nothing ‘natural’ about cows there; their presence is purely manmade. Or more precisely: the cow occupies what philosophers (going back to Aristotle, I believe) have called ‘second nature’. Humanity has always built its own nature atop the first, fundamental nature. (Where first nature ends is hard to pin down. Maybe all we can say is that sunlight striking earth is first nature. It’s certainly possible that everything nowadays from sunlight up to the factory is second nature.)
Capitalism utterly transforms nature in ways that would have previously been inconceivable. The train radically contracts space. The market for grain futures destroys time, in a way that’s more amazing than I would have understood before reading Cronon: grain starts as, say, “Andy’s Wheat From Indiana.” But capitalism — specifically the railroad — demands that wheat be dumped into trains in bulk. (Here I say “demands” as a shorthand for “rewards with low prices”.) So grain starts getting treated as a big, bulk, fungible fluid that gets loaded onto trains as an undifferentiated mass. Now we can talk about “wheat,” and we can ship, say, No. 1 Summer Wheat from Chicago to New York. Then we knock up the abstraction one level: we trade contracts to buy and sell wheat six months or a year from today, which is a good that doesn’t even exist yet, and not only that, it’s an abstraction of a physical thing that started as Andy’s wheat. The wheat future isn’t first nature; it at least second nature.
I’ve hardly even scratched the surface of what Nature's Metropolis covers. It’s engaging history. It understands capitalism in the large. But at the same time, Cronon plays with noisy data from midwestern bankruptcies and funerals, because bankruptcy and death are two of the only times that people have to reveal whom they owe their debts to. And by mapping out the pattern of debts, you can learn the shape of Chicago’s hinterland. And I don’t want to slight style for a moment: William Cronon is a very, very talented writer; few people could tell such a grand story at such detail so engagingly.
Nature's Metropolis is six different kinds of landmark. Read it now.
Tom Standage, The Victorian Internet: The Remarkable Story of the Telegraph and the Nineteenth Century's On-line Pioneers. A light read, which I think I took care of in a couple hours. It’s a fun story about where the telegraph came from, with plenty of enjoyable stories along the way. For instance, the message tubes that we’re familiar with from various movies (Brazil, say) came about to help speed up telegram delivery: the plurality of telegrams arrived in the central-London dispatching station and went to the stock exchange, so for a time the telegraph companies hired runners (young boys, mostly) to ferry the telegrams a few blocks. Eventually they replaced these with suction tubes, which allowed for greater throughput (as we’d call it today).
I didn’t actually know much about telegrams before I read this book. I didn’t know, for instance, that people typed them up on one side, and that people were involved in retyping the telegrams at every leg of its journey (British hinterlands to one floor of the London central exchange, relayed to a second floor of the exchange, retyped and sent along to the U.S., say). I sort of expected, without really thinking about it, that telegrams were relayed just like Internet packets are now: from the source to a router nearer the destination, to another still-nearer router, and so forth until it arrived where it was supposed to. But no; it was humans all the way, for at least a few decades.
Standage’s particular twist on the story is to view the telegraph as a forerunner in many ways of the modern Internet — even down to the particular social conventions that telegraph operators adopted. Telegraph operators of the mid-19th century were like BBS operators of the late 20th.
Having come from Nature's Metropolis, I was expecting somewhat more out of The Victorian Internet, especially because Krugman recommended both NM and TVI in the same breath. They’re quite different books. Nature's Metropolis wants to understand all of capitalism through the lens of a transformative technology; The Victorian Internet mostly just wants to understand the telegraph. It does so vibrantly; highly recommended.
Bethany McLean and Joe Nocera, All the Devils Are Here: The Hidden History of the Financial Crisis. There will surely be many books trying to understand how the financial crisis happened. This one’s angle is that the crisis of 2008-? started when the U.S. adopted the 30-year mortgage, which is to say when FDR established Fannie Mae and Freddie Mac in the 30s to create a liquid market in mortgages.
“Liquidity” is a simple word that gets widely deployed, but I’m not sure that everyone’s clear on what it means. The idea is just that — as we saw in the recent crisis — sometimes everyone in a market gets scared of everyone else in a market, and gets convinced that no one is going to pay back his debts. When that happens, the market is “illiquid”; we heard that the markets had “seized up” in late 2008. You can imagine that 30-year mortgages would be particularly illiquid: you really need to trust the person you’re loaning money to if you’re going to loan him money for 30 years. There’s the risk that he’ll default on the mortgage. There’s the risk that you’ll loan money to him at 4%, but that inflation will be consistently at 5+% over the next 30 years, and that you’ll thereby lose money on this particular mortgage. There’s the risk that the U.S. will turn into Weimar Germany over the next 30 years, and that mortgages won’t be worth the paper they’re written on.
So the 30-year fixed-rate mortgage is an entirely unnatural creature. There would be no liquid market in 30-year fixed-rate mortgages if the government didn’t intervene. McLean and Nocera tell us that, before FDR intervened, the mortgage market was entirely local: you go to your local bank, you put down 30%, and your local banker — after sizing up your character (“A man I do not trust could not get money from me on all the bonds in Christendom”) — gives you the loan. You surely couldn’t get a loan from some bank thousands of miles away on the basis of some forms you fill out. Fannie Mae and Freddie Mac agreed to buy up mortgages from local banks, so long as those mortgages met certain standards (20% downpayment, etc.). They made the market for these mortgages “liquid.” Mortgages that Fannie and Freddie were willing to buy were called “conforming loans.”
Then in the 70s came the revolution that we’re all, in one way or another, familiar with today: bankers turned all manner of financial instruments into securities. You could now buy a part of a mortgage, which would encapsulate (among other things) a bet about the borrower’s ability to pay. You could assemble many such mortgages into a security called a Collateralized Debt Obligation (or CDO). You could take out something like insurance on the CDO, which would pay you money if the mortgagee defaulted; this was called a Credit Default Swap. You could divide the mortgages within the CDO into groups called “tranches” according to how likely you thought it was that each mortgage would be paid off. And so forth. We’re unfortunately very familiar with how all of this works.
McLean and Nocera map in gruesome and depressing detail what happened next: a market in “non-conforming” loans developed, and over time it took on a life of its own. As someone said, subprime loans weren’t bought, they were sold. The story of the junk salesmen gets more and more insane, and just when you think “this thing I’m reading about is The Bubble,” it turns out that The Bubble is a second round of insanity that carried out the final coup de grâce on the world economy.
No one escapes from the story unscathed. McLean and Nocera show that every financier — most especially including Alan Greenspan — who said that the financial crisis was unforeseeable was not only dead wrong, but must also have been willfully deaf to what his advisors were telling him.
For an intro to the book, I highly recommend listening to McLean and Nocera on a few recent Planet Money episodes ( 1, 2, 3). In fact, I recommend listening to everything Planet Money puts out; you should subscribe to the podcast.
P.S.: James Kwak at The Baseline Scenario expresses some doubts about the argument that a liquid national private mortgage market wouldn’t exist without government intervention.