David McWilliams: There’s an economic star in the east

Today, wise men know that the world’s economic future isn’t in the west. It’s in China

First, Joseph learns the baby isn’t his but God’s, then he gets hit with a pile of new taxes by the Romans. Illustration: Wynnter/Getty Images

First, Joseph learns the baby isn’t his but God’s, then he gets hit with a pile of new taxes by the Romans. Illustration: Wynnter/Getty Images

 

Some 2,000 years ago, Joseph and Mary headed from Nazareth to Bethlehem to sign a census. Census night was a big deal in Roman Judea because the Romans were meticulous about economic and demographic affairs. The Romans were fastidious measurers because they were exacting tax-collectors. These taxes, collected in the Judea of Christ, were designed to finance Roman expansion in the East.

Much of our history concerns itself with the Roman Empire as being the precursor of Western European civilisation, but in fact Western Europe was an afterthought for Rome. For the Romans, the real action was in the East, as it had been for centuries.

Why do you think Alexander the Great turned east not west in 336 BC? The Greek did so because there was nothing of value in Europe. The money, culture, craftsmanship and jewels were all to the east in Anatolia, what we call the Middle East and, most significantly, Persia and beyond. This was the “Fertile Crescent”, the cradle of human civilisation.

While the Romans conquered Gaul in 52 BC, they soon realised there wasn’t much commercially except slaves – valuable but not coveted. The real economic prize was Egypt.

Twenty years later, Mark Anthony was hanging out with Cleopatra, not only because she was beautiful but because Egypt was the breadbasket of the world.

Once Rome took Egypt in 30 BC, it controlled the vast harvests of the Nile. The price of grain collapsed in Rome, driving up disposable household income for the average guy (who spent the lion’s share of his money on food). As food price inflation fell, so too did interest rates. Money flowed in from Egypt and all this capital drove up property prices in Rome, spurring more wealth.

With increased wealth came avarice.

The surge in tax revenue whetted the Roman appetite for more taxes and more goodies. Their subjects were about to be among the first victims of globalisation.

Spare a thought for poor Joseph the carpenter in Nazareth: not only had his missus just told him that the child she was carrying wasn’t his but God’s, he was about to be impoverished by new taxes, and suffer the personal humiliation of this child being born in a stable. There’s only so much a man can take.

The Romans wanted tax to finance military expansion into Persia through what is now Syria, Turkey and Iraq. They were following the money, seeking to control what became know as the Silk Road – the system of overland trade routes which linked China and northern India to Persia, Asia Minor and the Eastern Mediterranean.

Stranglehold

The most prized commodity was Chinese silk, but the Persians had the stranglehold over the trade route. The Romans pushed relentlessly eastwards past the Euphrates, taxing the likes of poor Joseph and later the carpenter Jesus.

Back home, silk scandalised Roman society. Pliny the Younger complained not just about the exorbitant price of silk and what it was doing to Roman economics but the revealing and suggestive nature of silk and what it was doing to Roman morals. He maintained translucent silk was a danger to Roman marriage, as elegant Roman women could waltz around the city in the finest, flimsiest, sexiest dresses, leaving little to the imagination.

But the average Roman was hooked on the east and its riches. Ultimately, they moved their centre of economic gravity, building a second Rome in Constantinople.

For the next 1,400 years, the Silk Road over land and over sea from China and India to Asia Minor was the source of most human wealth and most cultural advancement. This nexus was the centre of the world. Western Europe was a barbaric outpost, locked out of the trade route from East to West and thus excluded from the world economy. Eastern cities like Aleppo, Baghdad, Samarkand, Qom and Herat boasted riches, architecture and culinary sophistication that Westerners – such as Marco Polo – could only marvel at.

The Ottomans ruled the known world.

But necessity is the mother of invention. The urge for riches spurred Vasco da Gama, Columbus and others to try to get to India by boat, thus avoiding the Turks.

Eventually they succeeded. The world’s economic axis shifted dramatically from east to west. This has more or less been the commercial status quo for the past 500 years.

But that was then; this is now.

A resurgent China is reinstating the Silk Road with its “One belt, one Road” initiative. China will now redraw the world’s economic map. In an effort to bypass the Americans, the Chinese are financing the “Silk Road Project” – a massive infrastructure project linking China with Europe and the Mediterranean via rail and road links. It is also building up its maritime infrastructure to avoid the Pacific and to link China’s port cities with India and Iran, with the Gulf and East Africa and ultimately the Mediterranean.

Global trade

Once more the Silk Road will dominate global trade. This Chinese move to tilt the world away from America includes 65 countries, covering 60 per cent of the world’s population, 45 per cent of the world’s GDP and, crucially, 75 per cent of the world’s proven resources. This is the future of the global economy.

If you were to go for a walk overland today from Istanbul to Shanghai along this Silk Road, you would meet few democratic countries. Turkey, Iran, Afghanistan, Pakistan and China are not democracies as we understand them. To the north of the route is Russia and to the south the Gulf.

India is the exception.

Therefore, the Western assumption and American promise that western democracy goes hand in hand with economic growth, opportunity and prosperity is being flatly rejected by much of the world.

The new world looks to be more one of state capitalism rather than democratic capitalism.

Only 20 years ago America was the world’s only superpower, pre-eminent intellectually, militarily and economically. In liberal democracy it espoused the dominant theology – a philosophy that appeared pervasive and permanent. Now it has serious competition.

But that’s the way of ideas. Two thousand and eighteen years ago, no one had heard of Christianity. The Romans believed in their gods and among the Jews of Judea, there were all sorts of offshoots, prophets and sects. The Persians were Zoroastrians, the Indians were Buddhist, and no one had heard of Allah.

And yet, on that night in that stable, a child was born who would change the world. That’s the way of ideas, beliefs and religions: they come and go – and nowhere quicker than on the Silk Road.

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