History | Arto Bendiken

The Warrior Ethos

Sat, 07 Mar 2015 00:00:00 +0000

Originally published as a book review in my Goodreads account.

As a fan of Pressfield’s historical fiction and as a student of military history, I was predisposed to like this short book of historical anecdotes and commentary on the warrior ethos; more’s the pity that it turned out to be significantly problematic.

You see, a naive reading would miss that this is ultimately an encomium to empire, deliberately and carefully selective with its facts. It can only be meant to inspire, not to inform—and indeed, a clue to this end can be found in Pressfield’s statement that he wrote this for “men and women in uniform”. He evidently does not have an unduly high regard for the critical faculties of his audience.

An illustrative example right off the bat is the pathological case of sample bias that concludes the first chapter, narrated with a straight face and nary a historiographical concern, devoid any condemnation of eugenics, and demonstrating no comprehension of established human universals:

In Sparta, every newborn boy was brought before the magistrates to be examined for physical hardiness. If a child was judged unfit, he was taken to a wild gorge on Mount Taygetos, the mountain overlooking the city, and left for the wolves. We have no reports of a mother weeping or protesting.

As another point of note, when speaking of pride and honor, and judging the warrior ethos of Americans to be superior to that of their foes, Pressfield makes an obligatory mention of “enhanced interrogation” (torture) but omits any consideration of “collateral damage” (regrettable murder), the millions of victims of many long decades of empire-building. Similar bland disregard is given to the peoples vanquished by history’s great conquerors and commanders—this is very much a hagiography of the victors.

By the chapter on “The Civilian World”, one begins to suspect the author of outright demagoguery. Coming from an author who certainly knows better, how are we to understand a nakedly false assertion such as the following:

In ancient Sparta and in the other cultures cited, a warrior culture (the army) existed within a warrior society (the community itself). No conflict existed between the two.

The helots of ancient Sparta, who under pain of death toiled to feed and clothe these brave and honorable warriors, might have taken umbrage at the statement—had they dared to look their masters in the eye. As it is, the word “helot” does not appear even once in this book that on the whole reads like an ode to the totalitarian glory that was Sparta.

Even if it be the case that wolves don’t concern themselves with the opinions of sheep—a warrior ethos for the ages if there ever was one—such strategic omissions are all the more puzzling given the author’s considerably more evenhanded treatment of these matters in his bestselling novel Gates of Fire.

I might have had a positive thing or two to say about portions of this work, but cannot be motivated to further comment given the overarching vexations and shallow pretense of history here. A true disappointment.

A Thousand Lakes of Red Blood on White Snow

Thu, 12 Aug 2010 17:00:00 +0000

Over a bottle of Swedish vodka, a friend and I recently drifted on to the topic of Molotov cocktails. In case you don’t know, that is not a drink actually served at any cocktail parties. But depending on your audience, its story could make for a good cocktail party yarn. Here follows a brief history of the little-known subarctic origins of the Molotov cocktail in the epic Russo-Finnish Winter War of 1939-40. It is a true tale of a people who stood up to the depredations of an evil empire, and, against all odds, prevailed. Along the way you’ll gain a pretty good idea of what exactly the Finnish word “sisu” means, despite English lacking an exact and equivalent translation.

On November 30, 1939, three months after the start of World War II and the blitzkrieg invasion of Poland, the Soviet Union invaded Finland in an all-out land, sea and air assault. In a coordinated attack almost three times larger than the Allied landing at Normandy some five years later, twenty-one Red Army divisions with over 425,000 soldiers and thousands of tanks, warplanes, and heavy artillery crossed over into Finland under the cover of massive air and artillery bombardment.

Thus began a military conflict that came to be known as the Winter War, one of the least publicized but most costly offensive campaigns in the annals of military history. Fought in the extreme cold of the Finnish forests and in the dead darkness of the subarctic winter, it pitted a mighty invader with overwhelming military superiority against a hardy defender with precious little more than the indomitable will to resist. The Winter War changed the course of World War II and was then all but forgotten, save by the people of Finland whose very history it came to delineate and define.

Territorial and political rearrangements coming up

The Soviet objective was simple enough: the total conquest and occupation of Finland, enabling Soviet dominance over the Baltic Sea and the establishment of a buffer zone around Leningrad (now St. Petersburg), from which the Finnish border at the time was only some 40 kilometers distant.

Like a donkey in heat, Josef Stalin had been eyeing Adolf Hitler’s annexation of Austria and Czechoslovakia with naked envy. He wanted in on the action and in 1939 proceeded to sign a non-aggression pact with Hitler that included a secret protocol divvying up northern and eastern Europe, anticipating “territorial and political rearrangements” into respective German and Soviet spheres of influence. In plainer terms, Stalin was to have eastern Poland, the Baltic countries, and Finland, if he could take them.

After Stalin encountered no resistance in subjugating the Baltic countries, he turned his attention to Finland. He figured that Finland, too, would be a walk in the park; the Finns would either capitulate without a fight, or at least quickly and recklessly exhaust their insignificant and outdated armed forces in useless suicidal attacks on the modern Soviet tanks and machine guns, much as the Poles had done. The Red Army would roll over the country in no time at all.

Soviet Marshal Voroshilov and General Meretskov, who were to command the Soviet operation, calculated that they could knock out Finland in roughly ten to twelve days. After all, Mother Russia had some 170 million people to Finland’s puny 3.5 million, with the population of the city of Leningrad alone matching the entire population of Finland. The Red Army forces committed to the Finnish offensive – more than a million men and many thousands of tanks and warplanes – easily outnumbered the Finnish Army more than three to one in terms of manpower, thirty to one in terms of aircraft, and far more than a hundred to one in terms of tanks; and the Soviets had yet millions more soldiers in reserve. What could possibly go wrong?

The enemy outnumber us a paltry three to one; good odds for any Finn

Mobilization in Finland was nearly 100 percent, but even including all reserves the Finns could muster no more than 300,000 ill-armed men to oppose the vast and seemingly invincible horde of the invader. Even this level of mobilization was possible only as a result of assigning absolutely each and every non-combat task to the 100,000-strong women’s auxiliary.

From the start, the Finnish defense was plagued by severe equipment and munitions shortages. Many Finnish soldiers did not even have uniforms, and simply wore their regular winter clothing with ad-hoc military tags.

As for heavy weapons, the Finns had but a handful of obsolete tanks, of which only a single one was fully combat ready; further, they had very few anti-tank weapons and anti-aircraft guns, and hardly much of a heavy artillery – many of their artillery pieces hailed from the previous century. The so-called Finnish Air Force was comprised of a grand total of ninety-six operational old planes that were little threat to the newer and faster Soviet fighters.

With this sorry arsenal did they mean to dare defy the wrath of a vast empire and the most powerful army in the world. The first line of defense in Finland, it was facetiously reported outside the country, was a Finn standing on skis with a rifle. The claim wasn’t entirely untrue.

But where will we find room to bury them all?

Even if they harbored few illusions regarding their chances of ultimately prevailing against the sheer overwhelming manpower and firepower of the enemy, the widespread sentiment among Finns was that, come what may, they had no choice but to take up arms for life and liberty. They knew what the alternative would entail: still in living memory had they suffered under the boot of the Russian Empire (from 1812 to 1917), and doubted not that their fate in the blood-soaked hands of the Soviet tyrant would be something incomparably worse than it had ever been under the heel of the Russian tsars.

So, never mind that they were vastly outnumbered and outgunned, they still meant to make the aggressors pay dearly for every step of their advance. If they were to be conquered, enslaved, or even exterminated, it would certainly not be as meek and willing victims. Planning for the tremendous scope of the coming casualties, they pondered with a grim optimism and not a little dark humour, “They are so many, and our country is so small, where shall we find room to bury them all?"

If we gotta burn down the house, let’s be sure to do it right

Having anticipated both the imminent invasion and a harsh winter – which indeed turned out to be the coldest in over a hundred years – Finns had spent much of the autumn of 1939 destroying bridges, roads, houses and barns that had taken a generation to build; they intended to deny the Soviets any and all shelter and respite during their advance.

One memorable report tells of an old man returning to poke through the smoldering remains of his house while the fighting is already in earshot, explaining to the soldiers overseeing the evacuation:

This farm was burned down twice before on account of the Russians; once by my grandfather, and once by my father. I don’t reckon it’ll kill me to do it either, but I’ll be damned if I could drive away without first making sure you’d done a proper job of it.

Scorched earth à la Finlande meant that the abandoned towns and villages were not left hospitable even in ruins and ashes. Mines were left in haystacks, under outhouse seats, underneath dead chickens and in abandoned sleds. The village wells were poisoned, or, if time and chemicals were lacking, at least fouled with horse manure. Floating mines were set underneath newly-frozen lakes to blast the ice from underneath advancing Soviet ranks.

Hurry up on those secret weapons, will you, we’re in dire straits here

In the first week of the Winter War, the Red Army advanced quickly on all fronts. The Finnish Army had never confronted tanks and lacked effective anti-tank weapons. The Red Army’s use of mass formations of tanks initially had an absolutely devastating effect on the Finnish defenses, which frequently seemed on the verge of total collapse. Shock and fear accompanied retreat and defeat as the Finnish troops were pushed back on all fronts.

Trying desperately to find a way to beat back Soviet tanks with the limited resources at their disposal, the Finns were forced to innovate. In short order they came up with three distinct but complementary tactics for taking out heavy Soviet armor. From the diary of Private Tauno Pukka who served in the Finnish 3rd Independent Infantry Battallion:

Our platoon leader informed us we were about to receive secret weapons that could blow up and burn any enemy tank. It did not take long until the promise was fulfilled.

Here’s a drink to your continued health, Commissar Molotov

Throughout the Winter War, the Soviet Air Force made extensive use of incendiaries and cluster bombs against Finnish troops, fortifications, and towns. When the Soviet People’s Commissar for Foreign Affairs, Vyacheslav Mikhailovich Molotov, claimed in propaganda broadcasts that the Soviet Union was not actually dropping bombs but merely delivering food to the starving Finns, the Finns began calling the air bombs Molotov bread baskets.

Facing mass formations of Red Army tanks, the Finnish Army borrowed and improved the design of an impromptu incendiary device that had been used for the first time in the just-concluded Spanish Civil War of 1936-39. They began attacking the advancing tanks with “Molotov cocktails” which were, with characteristic Finnish laconic wit, meant to repay Molotov’s generous gift of bread with the reciprocal gift of an alcoholic beverage – “a drink to go with the food”, as they joked.

The original Molotov cocktail was simply a glass bottle semi-filled with a mixture of sticky flammable liquid, usually based on gasoline or alcohol and thickened with soap or tar. The mouth of the bottle was stoppered with a cork and a cloth rag fixed securely around the cork. The weapon was used by soaking the rag in a flammable liquid immediately prior to use and then lighting the rag and hurling the bottle at the target. The bottle shattered on impact, spilling the flammable contents all over the target which the burning rag then ignited.

Cheap and simple to make in an emergency from a bottle of vodka and some hand soap, the Molotov cocktail proved highly effective against the Soviet tanks of the Winter War. The Soviet tank engines at the time were gasoline engines, and the hot engine at the rear of the tank caught fire quite easily. Later in the war, the Soviets attached bushes or wire mesh to protect the rear end of the tank, counting on the bottle not breaking if it couldn’t actually hit the armor. The Finns responded by tying some stones at the end of strings attached to the bottle, with the stones shattering the glass on impact. They also wrapped barbwire around the bottle, so that if the bottle at least hit the mesh protecting the ventilation, the chance of setting the engine on fire increased.

Molotov cocktails were eventually mass-produced by the Finnish state corporation Alko, bundled with attached matches to light them. Production totalled 540,000 during the Winter War, produced by a work force of 87 women and 5 men. The mass-produced design was a mixture of ethanol, tar and gasoline in a 750 ml bottle that had two long pyrotechnic storm matches attached to either side. Before use, one or both of the matches was lit; when the bottle broke on impact, the mixture ignited. The storm matches were found to be quite a bit safer to use than a burning rag on the mouth of the bottle.

The principal delivery system for these weapons was comprised of Finnish daredevils on skis. The Molotov-throwers grumbled that the weapon could only be used without immediate detection during daylight hours. As Mother Nature has seen fit to bless these latitudes with no more than up to four hours of winter daylight, that presented a somewhat limited window of opportunity for undetected approach each day.

I see your tanks and I’ll raise you a satchel charge, comrade

The second anti-tank invention was the satchel charge, a heavy-duty TNT-based explosive weapon used to sever the tracks of enemy tanks and, with larger charges, capable of destroying enemy vehicles weighing up to 30 tons. To deploy a satchel charge, the Finnish anti-tank squads had to get even closer to the tank since the bulky and heavy weapon couldn’t be thrown much further than 10-15 meters.

These tactics were risky at best. Sneaking up to an enemy tank undetected was difficult and required considerable courage and patience. To ensure a kill with a satchel charge, it had to be thrown accurately and skillfully with just enough force to land it securely on top of the tank. Another method was running all the way up to the tank and placing the charge directly on the rear deck, but this was even riskier – Finnish soldiers in some cases died from the blast of their own satchel charge when the weapon tumbled down from the tank.

A third anti-tank tactic, used in combination with either the Molotov cocktail or the satchel charge, was the riskiest of all; some might even call it borderline crazy. The idea was to run up to a tank and forcibly halt it by jamming a log into its treads; done just right, this gave an opportunity to deal with the tank and its crew at a more leisurely pace. One exceptionally burly Finnish ski trooper was decorated for immobilizing a Soviet tank with nothing but a crowbar, prying the treads off by brute force, after which another soldier came up to the tank with a satchel charge and blew it up.

Finnish tank buster forces endured a fatality rate of 70%, yet had no shortage of volunteers. It was a very dangerous business, but also very successful. Of the around 6,000 total tanks deployed by the Soviets during the course of the Winter War, the Finns managed to take out more than 2,000; of these, about half were destroyed using mines and satchel charges or burned using Molotov cocktails. The remainder are accounted for by the cunning sinking of tanks into frozen lakes or the frozen sea, as well as by artillery on the heavily-fought-over Karelian Isthmus. It’s perhaps worth mentioning in passing that the Soviets lost at least another 1,200 tanks to “technical failures”; in other words, to the elements.

Merry Christmas from the Mannerheim Line

The Soviet invasion was planned as an overwhelming onslaught everywhere along the thousand-kilometer eastern border of Finland, but the main thrust of the Soviet offensive was aimed directly northwest from Leningrad through the Karelian Isthmus, a narrow strip of strategically crucial land between Lake Ladoga and the Gulf of Finland. This was to be the Finns’ icy Thermopylae on which the outcome of the entire war hinged.

Here the Finns built a 132-kilometer-long defensive fortification line that became known as the Mannerheim Line, named after the Finnish commander-in-chief Field Marshal Carl Gustaf Mannerheim. The line consisted mostly of trenches, dugouts, anti-tank obstacles, barbed wire barriers and mine fields. It also had a total of 101 thinly spread out small concrete bunkers with 157 machine gun positions and eight artillery positions.

On December 6, 1939, the leading units of the Red Army reached the Mannerheim Line and tried to break through. They did not succeed. Wave after wave of the invaders broke in direct frontal assaults against the line, the attackers mowed down to the last man by well-placed Finnish automatic weapons. The true carnage had begun.

In the days that followed, untold many silent dead littered the barbed wire in front of the Finnish positions. As the bodies piled up ever higher like logs of cordwood, subsequent waves of attacks were actually able to get progressively closer to the Finnish line by taking cover behind their own dead – the temperatures were so low that after an hour a frozen corpse would stop a bullet just as well as a brick wall would.

Despite their mounting losses, the Soviet offensive was unrelenting; Stalin’s generals had promised him Finland as a gift by his upcoming 60th birthday in December, and they knew that their own continued personal well-being depended on keeping that promise. And so the mindless slaughter went on day after day, week after week, with one Soviet battalion after another wiped out. By the end of the month, over seven whole Soviet infantry divisions had obliterated themselves failing to decisively breach the Mannerheim Line. The line gave way sometimes, but always held strong in the end.

Thus the first month of the Finnish campaign ended in abject humiliation for the Red Army. Soviet propaganda back home was working overtime to explain and justify the Red Army’s insignificant progress against the Finnish defenses while covering up the mind-boggling number of steadily climbing casualties. The spin made the Mannerheim Line out to sound like a stronger, impregnable version of the French Maginot Line – a bit of a stretch considering that an equivalent span of the Maginot Line would have had some 5,800 concrete bunkers to the mere hundred that the Finns had been able to build and equip. The real strength of the Mannerheim Line lay in the men who held it.

Know your terrain, admonished Sun Tzu

Fortunately for the Finns, much as the central control of the Soviet Union’s economy had left it crippled and increasingly out of touch with reality, so was the rigid central command of the Red Army set to lead to further military disaster. Stalin’s bloody political purges in the preceding years had led to the execution of the Red Army’s best generals and most of its professional officer corps, leaving the command chain of the army in the hands of inexperienced and, more often than not, incompetent political officers.

There was no doubt that the Red Army had orders of magnitude more tanks and aircraft than the Finnish Army, and vastly more troops to boot. But what the Finns lacked in equipment and numbers they made up for in cunning strategy, bold initiative, and, crucially, an intimate knowledge of the local geography.

Geographically, the vast majority of Finland is relatively flat landscape covered in forests and swamps and pocked by tens of thousands of lakes – not ideal terrain for moving and protecting heavy weaponry, particularly in the middle of winter. This the Soviets were about to learn the hard way.

So exuberantly overconfident were the Soviets initially of a quick, relatively unimpeded victory march all the way to Helsinki that they came with parade bands, but without winter uniforms, without supplies for a protracted campaign, and without medical facilities.

The Red Army troops wore olive drab or khaki uniforms, their tanks were painted black, and they carried heavy field stoves that sent thick plumes of black smoke visible for many kilometers – none of these constituted brilliant tactics for hiding in snowy terrain. The Soviets’ semi-automatic guns frequently jammed up in the forbidding subzero temperatures, and even their howitzers behaved in unpredictable and unsafe ways.

Some commenters have wryly observed that the Russian field manual for snow combat must’ve been written in the Mediterranean, because it contained a passage on bayoneting on skis – a feat that any Finn could have readily enough told them was not a feasible prospect.

The contrast to the Finnish Army was stark, quite literally so. Nimble and decentralized, the Finnish troops wore white uniforms and camouflage to blend into the terrain, and used skis, sledges, and horses (often captured from the Soviets) to speed through the forests, taking every opportunity to outmaneuver the Red Army which was wedded to its tanks and troop formations and preferred to stick to the roads.

You can check out anytime you like, but you can never leave

In early December 1939, a Soviet division was advancing to the northwest in central Finland with the objective of taking the city of Oulu and thus effectively cutting Finland in half. If successful, this would have severed the important railway to Sweden and forced the Finns to defend themselves on two isolated fronts.

On its way to Oulu, the Soviet 163rd division captured the village of Suomussalmi, but soon found itself surrounded and suffering major casualties deep inside Finnish territory. The Soviet 44th division, an elite Ukrainian formation, was dispatched to its aid. They never made it to Suomussalmi; not that it would have made a difference if they had, as the Finnish defenders had already destroyed the 163rd before any reinforcements could have reached them.

The sordid fate of these two Soviet divisions – combined totalling some 40,000 soldiers and more than three hundred artillery pieces, a hundred tanks, and fifty armored cars – would prove an instructive lesson in the Finnish way of guerrilla warfare. The Finns would go on to apply these same tactics extensively in the other battles of the Winter War, but the Battle of Suomussalmi remains the best-studied one.

Advancing towards Suomussalmi in early January 1940, the 44th’s mechanized infantry units were completely road bound in the deep snow. Resembling a huge snake, their column stretched out for thirty kilometers on the Raate road, a long and narrow logging track with virtually no way other than forwards or backwards, surrounded as it was by deep forest and the occasional lake. Once committed to the road, the Soviet troops were effectively trapped, even if they hadn’t yet realized their peril.

Finnish ski troopers, outnumbered by the advancing enemy but much more mobile in this terrain, were able to swiftly and invisibly move up and down the entire length of the enemy column through the surrounding forest. They felled trees to block the road in front and behind the enemy division, stalling the movement of the column, and then proceeded to relentlessly chop up the Soviet column into ever-smaller segments they called mottis; a motti being a Finnish measure of stacked-up firewood.

Attacking with light machine guns, mortars, and hand grenades, the ski troopers would surge out of the forest to cut the road at that point, quickly disappearing on the other side of the road. They would be followed by Finnish combat engineers who would widen and fortify the breach, decisively cutting off one piece of the enemy column from the other. Once the Soviet division was split up into these smaller and more manageable pockets of enemy troops, the mottis could then be dealt with individually by concentrating forces on all sides against an entrapped unit. Surrounded and pinned down by Finnish snipers, the invaders froze or starved to death if they didn’t first succumb to rifle fire and wounds.

The deep cold at Suomussalmi that winter was so intense that almost any wound was fatal, and the instant a man was hit by a bullet and his circulation slowed, his body would freeze in the very posture that he was standing in when he was hit. A macabre legend of the Winter War tells of a surreal scene in still life: a Soviet patrol standing by the side of the road, the men upright and frozen stiff in the snow, a Soviet officer beside them with a loaded pistol in hand; all had had their throats neatly cut, without a single shot fired from the officer’s pistol. They never saw the freedom fighters who had snuck up on them to deliver the silent death of the puukko – a traditional Finnish hunting knife that emerged as the Finns’ close-combat weapon of choice during the Winter War.

Our lakes are full of dead Russians

The Finns would also frequently use their numerous frozen lakes as highly effective death traps, channeling the enemy onto the ice using motti tactics. When the Soviet troops attacked in company, battalion and regimental strength across the lakes, their dark uniforms made for easy pickings against the white snow. The defenders sprung the trap using machine guns to enfilade the lakes from the surrounding forest while home guard riflemen, most of whom were expert marksmen, proceeded to pick the enemy off one by one, all the while adequately concealed and protected from return fire.

The dead enemy were left to lie frozen in the snow over the lakes, a demoralizing warning to subsequent replacements crossing such a battlefield. With the spring thaw the corpses sank to the bottom to become fish food – saving everyone the trouble of a burial. As the Finnish veteran Antti Olavi Pönkänen stated: “Our lakes are full of dead Russians."

What the hell do you want our country for anyway?

For many of the encircled Soviet troops in the Finnish woods, just staying alive for one more hour or one more day was an ordeal comparable to combat. Frostbitten, desperately hungry, and crusted with their own filth – while the besieging Finns, a mere thousand meters away, might be enjoying a warm sauna bath – for them the Finnish forest was truly a snow-white hell; an existence defined by long dark hours of pain and misery, punctuated by the moans of the wounded and dying.

One captured Soviet colonel when interrogated offered some more details of his long ordeal in the Finnish woods:

Finns we couldn’t see anywhere. When we sent our sentries out to take their positions around the camp, we knew that within minutes they would be dead with a bullet hole to the forehead or the throat slashed by a dagger… it was sheer madness… I know that Stalin and Voroshilov are clever, sensible men and I can’t understand how they were led to this idiotic war. What do we need cold, dark Finland for anyway?

Hey comrade, can you spare a bullet; it’s hard work equalizing these odds

They may not have had nifty toys like mechanized infantry, but at least all the Finnish troops had rifles and bullets – even if they often had to relieve the dead Soviets of some so that there were enough to go around and carry on. Indeed throughout the war the Finns made use of captured Soviet guns, ammunition, and tanks – a classic guerrilla tactic of relying on your enemy to supply you.

Moreover, the Finnish soldiers knew how to use their rifles. One Finn in particular, Corporal Simo Häyhä, became a living legend during and after the Winter War for his exemplary service as a sniper in the Finnish Army. The Red Army respectfully and fearfully nicknamed him the White Death.

During a period of just 90 days in the Winter War, in bone-chilling temperatures ranging from -20 down to -50 degrees centigrade, dressed completely in white camouflage and operating with a very limited amount of daylight per day, Häyhä went out to “hunt Russians” each day. He just in and of himself is credited with 505 confirmed sniper kills of Soviet soldiers, 542 if unconfirmed deaths are included. The unofficial Finnish front line figure from the battlefield of Kollaa places the number of Häyhä’s sniper kills at over 800.

He did all this using but a bolt-action rifle with open sights, an almost incredible feat considering that he routinely engaged many of his targets from a distance of 400 meters or more. Besides his numerous sniper kills, Häyhä is also credited with over two hundred kills with a Suomi K31 submachine gun, bringing his confirmed kills to at least 705 – reportedly the all-time highest recorded number of confirmed kills in any major war.

As can readily be imagined, it wouldn’t have taken all that many snipers like Häyhä to even out the odds a tad into the Finns’ favor. Häyhä himself was such a menace to the invaders that the Soviets tried several ploys to get rid of him specifically, including counter-snipers and outright artillery strikes. One week before the armistice was signed, they finally succeeded.

On March 6, 1940, Häyhä was shot in the face by a Soviet sniper. The bullet tumbled upon impact and left his head explosively, in the process crushing his jaw and blowing off his entire left cheek – the fellow soldiers who later evacuated him described the grave injury succinctly as “half his head was missing”. Despite the near-lethal injury, Häyhä still somehow managed the fortitude to pick up his rifle and kill the Soviet who had shot him.

Häyhä regained consciousness the very day that peace was declared. It took him several years to recuperate, but he eventually made a full recovery and, honored as a national hero, lived to the ripe old age of 96.

“A fatalism incomprehensible to a European”

So great were the Soviet casualties in the Finnish offensive that hospitals in Leningrad filled to capacity already early on in the invasion; soon after, kilometer-long lengths of trains wound their way as far as Moscow, windows covered with curtains to hide curious passersby from the hideous sight of the frostbitten, the bleeding, the limbless and the dying.

None of this stopped the inexorable Soviet advance, however. In tune with their grisly collectivist ideology, the life of every individual Soviet soldier truly was considered expendable: there were always more warm bodies available to be thrown into the unforgiving meat grinder that the Finnish theater had become. What mattered mere individuals in the pursuit of power and glory for the state?

With company commanders threatening to shoot anyone who fell back or turned around, some Soviet regiments would link arms and march in a line to clear minefields the Finns had laid out for them; the regiments sang party war songs and advanced with the same steady, suicidal rhythm even as the mines began to explode, ripping holes in their ranks and showering the marchers with limbs and intestines. Field Marshal Mannerheim, struggling to explain the determination on both sides, described the Russian soldiers as possessing “a fatalism incomprehensible to a European."

Thank you, Mr. Churchill, but we need more guns, not words

The Finnish victories made headlines around the world. During the Winter War, the British Prime Minister Winston Churchill waxed poetic in a world-wide radio broadcast:

Only Finland – superb, nay, sublime – in the jaws of peril – Finland shows what free men can do. The service rendered by Finland to mankind is magnificent. They have exposed, for all the world to see, the military incapacity of the Red Army and of the Red Air Force. Many illusions about Soviet Russia have been dispelled in these few fierce weeks of fighting in the Arctic Circle. Everyone can see how Communism rots the soul of a nation; how it makes it abject and hungry in peace, and proves it base and abominable in war. We cannot tell what the fate of Finland may be, but no more mournful spectacle could be presented to what is left to civilized mankind than that this splendid Northern race should be at last worn down and reduced to servitude worse than death by the dull brutish force of overwhelming numbers. If the light of freedom which still burns so brightly in the frozen North should be finally quenched, it might well herald a return to the Dark Ages, when every vestige of human progress during two thousand years would be engulfed.

On the other side of the Atlantic, the Christian Science Monitor reported on the Winter War in equally laudatory terms:

If you were to name the greatest nation in the world, would it be the richest; would it be the one whose possessions are the most wide-flung; would it be the most populous or that which boasted of the most destructive guns and the most powerful army? Perhaps it would be that nation which paid its debts, which, courageous as the Greeks at Thermopylae, fights a barbarian horde, which faces annihilation rather than compromise its liberty – whose men today die on the battlefield and whose women and babies starve and freeze behind the lines. If this is the nation you would seek, there stands Finland.

Damn you Soviets, we have not bullets enough for all of you

As January 1940 progressed, it was clear to Stalin that his army was being routed and was suffering terrible losses; he knew that the Finns had to be beaten at any cost, and quickly at that. He demoted or executed most of his commanders and placed the entire Finnish operation under the command of Marshal Semyon K. Timoshenko, a trusted sycophant and also one of the few remaining truly capable Red Army generals.

Timoshenko realized that winning the Karelian Isthmus was the key to winning Finland, and concentrated his forces there. By the beginning of February, Timoshenko had called up and massed twenty-five divisions – a total of 600,000 men – arrayed against the Mannerheim Line, supported by vast numbers of tanks and artillery.

On February 1, the Soviets resumed their offensive on the Mannerheim Line, beginning a large-scale blanket bombardment to soften up the line. This heralded the beginning of the end for the stubborn Finns. Each day for the next ten days, the Soviet artillery poured down more shells on the Finnish line than the whole Finnish Army had ever had in its arsenal during the entire war.

The morning of February 11, however, was something else entirely. It was not a morning, nor a day, that anyone who happened to live through it would ever forget: the frustrated Red Army threw everything they had at the Finns. Some 300,000 artillery shells rained down on the Mannerheim Line at Summa, where the line was the weakest. It was the most massive artillery barrage the world had witnessed since the German shelling of Verdun in World War I, and it at long last succeeded in breaking the back of the Mannerheim Line.

By noon that day, the Soviet tanks had broken through and the enemy infantry had captured some of the Finnish bunker positions. All Finnish reserves were thrown into the battle, but the sheer mass of the Red Army could no longer be contained. Four days later, the Summa area was completely overwhelmed and completely destroyed.

Strangely enough, it was difficult to convince Moscow that the Mannerheim Line had in fact been overrun. Perhaps they had started to internalize their own propaganda about the impregnability of the line, but no one in the Soviet high command would initially believe that the Red Army had captured Summa. An irritated Marshal Voroshilov had to have it repeated to him three times by two trusted eyewitnesses before it sank in.

By the end of February, the Finnish defensive line had been pushed back almost all the way to the strategic city of Vyborg, the second-largest city in Finland. The Finns’ desperate resistance continued ferociously, but they were incurring heavy losses and struggling to hold on. By March 12, the situation was nothing short of catastrophic: the Red Army had advanced to the outskirts of Vyborg, and the remaining Finnish troops were almost out of ammunition and no more ammo could be found.

Like hell we’ll put those chains on ever again

While the Finns’ situation was dire, Stalin was not aware of the full extent of it. What he did know was that ongoing Red Army casualties were still high and that the situation was a source of increasing political embarrassment and ridicule for the Soviet regime. Furthermore, with the spring thaw approaching, the Soviet forces risked becoming bogged down in the Finnish forests.

At noon on March 13, 1940, the word spread along the Finnish and Soviet lines that an armistice had been signed. The war was over, having lasted 105 long days. The truce came not a moment too soon; the Finnish defenders were at the end of their rope. “We were absolutely exhausted," a veteran recounted it.

The peace terms were harsh for the Finns, ceding the entire Karelian Isthmus as well as a large swath of land north of Lake Ladoga to the Soviet Union. The area included the city of Vyborg and much of Finland’s industrialized territory. Twelve percent of Finland’s population, some 422,000 Karelians, were given the choice of becoming Soviet subjects or of being evacuated behind the new border, destitute and homeless.

As the American Mercury reported, the Finns “in one of the most impressive informal plebiscites of modern history moved voluntarily and en masse into the shrunken part of Finland. Practically none chose to remain under Soviet rule."

Despite the harsh peace terms, the Soviets did not accomplish their original objective of the total domination and occupation of Finland.

Just enough ground to bury all the dead

The Winter War is a footnote in most histories, but it was a key event in determining the subsequent course of World War II in Europe. Hitler watched with glee as the Finns humiliated the Soviets, eventually coming to believe that he could betray and crush his former ally Stalin. As for the Soviet high command, they realized very well what a military fiasco the Finnish invasion had been, even if they never publicly deigned to call it anything but a great victory.

One Russian general remarked aptly, “Well, we’ve won just enough ground to bury our dead." Timoshenko said, “The Russians have learned much in this hard war in which the Finns fought with heroism." Admiral Kuznetsov concluded, “We had received a severe lesson. We had to profit by it." Nikita Khrushchev remembered the events as follows:

Even in these most favorable conditions it was only after great difficulty and enormous losses that we were finally able to win. A victory at such a cost was actually a moral defeat… Our people never knew [in 1940] that we had suffered a moral defeat, because they were never told the truth. Quite the contrary. When the Finnish war ended our country was told, “Let the trumpets of victory sound!” But the seeds of doubt had been sown.

The official Red Army propaganda account of the Winter War indeed claimed only some 40,000 Soviet casualties. All the way up until 1988, the official version of Soviet history even maintained that the Finns were the ones who had started the war – there’s a lesson in police state history right there. Khrushchev wrote further:

All of us – and Stalin first and foremost – sensed in our victory a defeat by the Finns. It was a dangerous defeat because it encouraged our enemies’ conviction that the Soviet Union was a colossus with feet of clay… We had to draw some lessons for the immediate future from what had happened.

And draw some lessons they did. Crucially, Stalin curtailed the influence of political commissars and reinstated many army officers, returning their rank and privileges. This reorganization came just in time to prevent Hitler from taking Russia.

After Khrushchev took over as ruler of the Soviet Union after Stalin’s death, he began a more realistic accounting of Soviet casualties. He concluded that a total of 1.5 million Soviet soldiers were sent to Finland and that as many as one million of them perished in the three months of the war. Some later Russian historians have challenged his figures, but whatever the exact number was, it was a spectacular and callous waste of human capital.

On their part, the Finns suffered 26,000 fatalities and 44,000 wounded in the war.

Liberty is purchased with the blood of patriots and tyrants

When hostilities with the Soviet Union resumed in the subsequent Continuation War of 1941-44, the Finns annihilated and maimed yet more hundreds of thousands of Soviet soldiers, ultimately forcing Stalin into yet another stalemate. The tale of that war is a worthy one, with many of its own miracles – such as how the beleaguered Finns withstood the largest artillery bombardment in the history of warfare – but it is not the tale I’m recounting today.

In any case, by the end of all the bloodshed, the Soviets had finally wearied of the cost and distraction of their supposed twelve-day-long conquest, once and for good giving up the notion of occupying Finland in favor of more indirect forms of influence. Stalin’s later 1948 toast to Finland goes to show that the only language tyrants understand and respect is that of force:

Nobody respects a country with a poor army, but everybody respects a country with a good army. I raise my toast to the Finnish Army.

Thus with a thousand lakes of warm red blood on cold white snow did the Finns purchase their escape from assimilation into the Soviet Union, ensuring that when the Iron Curtain was drawn, it ran along the eastern side of Finland rather than the western one.

During and after the wars, the Finns won international acclaim for having twice defied the might and fury of a superpower and for the terrible cost they had exacted for the Soviets’ two Pyrrhic victories. Newspaper descriptions of the Winter War popularized the Finnish word sisu in the English-speaking world for a generation; the word resists exact translation into other languages but loosely translated refers to a stoic toughness consisting of strength of will, determination, and perseverance in the face of adversity and against repeated setbacks; it means stubborn fortitude in the face of insurmountable odds; the ability to keep fighting after most people would have quit, and fighting with the will to win.

Sisu is more than mere physical courage, requiring an inner strength nourished by optimism, tempered by realism, and powered by a great deal of pig-headed obstinacy of the sort that enables a man diagnosed with an acutely fatal illness to outlive his physicians. I can’t think of a better explanation of sisu than the testimony of the events of the Winter War.

Sources: Wikipedia, WinterWar.com, Fire and Ice: The Winter War of Finland and Russia (2006), A Frozen Hell: The Russo-Finnish Winter War of 1939-1940 by William Totter (2000), The Winter War: The Soviet Attack on Finland, 1939-1940 by Eloise Engle & Lauri Paananen (1992), The Winter War: Russia Against Finland by Richard Condon (1972), Marskin panssarintuhoojat by Erkki Käkelä (2000), David’s Tool Kit: A Citizens’ Guide to Taking Out Big Brother’s Heavy Weapons by Ragnar Benson (1996)

Inflation and the Fall of the Roman Empire

Tue, 11 Aug 2009 23:00:00 +0000

This is a transcript of Prof. Joseph Peden's 50-minute lecture "Inflation and the Fall of the Roman Empire" given at the Seminar on Money and Government in Houston, Texas on October 27, 1984. The original audio recording is available courtesy of the Mises Institute. I have commissioned this transcript in the hope that you may find it as interesting and educational as I did. Kudos to Joshua Griffith for bringing this talk to my attention.

Two centuries ago, in 1776, there were two books published in England, both of which are read avidly today. One of them was Adam Smith's The Wealth of Nations and the other was Edward Gibbon's Decline and Fall of the Roman Empire. Gibbon's multi-volume work is the tale of a state that survived for twelve centuries in the west and for another thousand years in the east, at Constantinople.

Yet Gibbon in looking at this phenomenon commented that the wonder was not that the Roman Empire had fallen, but rather that it had lasted so long. And scholars since Gibbon have devoted great deal of energy to examining that problem: how was it that the Roman Empire lasted so long, and did it decline or was it simply transformed into something else? That something else being the European civilization, of which we are the heirs.

I've been asked to speak on the theme of Roman history, particularly the problem of inflation and its impact. My analysis is based on the premise that monetary policy cannot be studied, or understood, in isolation from the overall policies of the state. Monetary, fiscal, military, political and economic issues are all very much intertwined. And the reason they are all so intertwined is, in part, due to the fact that the state, any state, normally seeks to monopolize the supply of money within its own territory.

Monetary policy therefore always serves, even if it serves badly, the perceived needs of the rulers of the state. If it also happens to enhance the prosperity and progress of the masses of the people, that is a secondary benefit; but its first aim is to serve the needs of the rulers, not the ruled. And this point is central, I believe, to an understanding of the course of monetary policy in the late Roman Empire.

We may begin by looking at simply the mentality of the rulers of the Roman Empire, beginning at the end of the 2nd century [A.D.] and looking through to the end of the 3rd century. This period of the 3rd century Roman historians refer to as the Crisis of the Third Century. And the reason is that the problems of the Roman society in that period were so profound, so enormous, that Roman society emerged from the 3rd century very, very different in almost all ways from what it had been in the first and second centuries, a period the historians speak of as the Augustan Principate.

To look at the mentality of the Roman emperors, we can look just at the advice that the Emperor Septimius Severus gave to his two sons, Caracalla and Geta. This was supposed to be his final words to his heirs. He said, "live in harmony; enrich the troops; ignore everyone else." Now, there is a monetary policy to be marveled at!

Caracalla did not adhere to the first part of that; in fact, one of his first acts was to murder his brother. But as for enriching the troops, he took that so seriously to heart that his mother remonstrated with him and urged him to be more moderate and to restrain his increasing military expenditures and his very burdensome new taxes. He responded by saying there was no longer any revenue, just or unjust, to be found. But not to worry, "for as long as we have this," he insisted, pointing to his sword, "we shall not run short of money."

His sense of priorities was made more explicit when he remarked, "nobody should have any money but I, so that I may bestow it upon the soldiers." And he was as good as his word: he raised the pay of the soldiers fifty percent, and to achieve this he doubled the inheritance taxes paid by Roman citizens. When this was not sufficient to meet his needs, he admitted almost every inhabitant of the empire to Roman citizenship. What had formerly been a privilege now became simply a means of expanding the tax base.

He then went further by proceeding to debase the coinage. The basic coinage of the Roman Empire to this time — we're speaking now about 211 [A.D.] — was the silver denarius introduced by Augustus at the end of the 1st century before Christ. Augustus had issued a silver coin, a denarius, that was about 95% silver, and that coin continued for the better part of two centuries as the basic medium of exchange in the empire.

By the time of Trajan in 117, it was only about eighty-five percent silver, down from Augustus' ninety-five percent. By the age of Marcus Aurelius, in 180, it was down to about seventy-five percent silver. In Septimius' time it had dropped to sixty percent, and Caracalla evened it off at fifty-fifty. Caracalla was assassinated in 217 and there then followed an age that historians refer to as the Age of the Barrack Emperors, because throughout the 3rd century all the emperors were soldiers and all of them came to their power by military coups of one sort or another. There were about 26 legitimate emperors in this century and only one of them died a natural death; the rest were either assassinated or died in battle, which will give you some idea of the change since this was totally unprecedented in Roman history — with two exceptions: Nero, a suicide, and Caligula, assassinated earlier.

Caracalla had also debased the gold coinage. Under Augustus this circulated at 45 coins to a pound of gold. Caracalla made it 50 to a pound of gold. Within 20 years after him it was circulating at 72 to the pound of gold, reduced to 60 at the end of the century by Diocletian, only to be raised again to 72 by Constantine. So even the gold coinage was in fact inflated, debased.

But the real crisis came after Caracalla, between 258 and 275. In a period of intense civil war and foreign invasions, the emperors simply abandoned, for all practical purposes, a silver coinage. By 268 there was only five tenths percent silver in the denarius. And prices in this period rose in most parts of the empire by nearly a thousand percent. The only people who were getting paid in gold were the barbarian troops hired by the emperors. The barbarians were so barbarous that they would only accept gold in payment for their services.

The situation did not change until the accession of Diocletian in the year 284. Shortly after his accession he raised the weight of the gold coinage, the aureus, to 60 to the pound - this was from a low of 72. But ten years later, he finally abandoned the silvered coinage, which by this time was simply a bronze coin dipped in silver rather quickly. He abandoned that completely and tried to issue a new silver coin which was struck at 96 coins to the pound of silver, called the argenteus. This argenteus was fixed as equal to fifty of the old denarii, the old coinage. It was designed to respond to the need for higher-tariffed coins in the marketplace, to reflect the inflation. He also issued a new bronze coin tariffed at ten denarii, called the nummus. But less than a decade later, that silver coin had gone from being tariffed at 50 of the old to now equaling 100 of the old, and the bronze coinage from 10 denarii to 20; in other words, a hundred percent inflation. In other words, despite his efforts Diocletian had not been able to stop the inflation.

The next emperor who interfered with the coinage in a meaningful way was to be Constantine, the first Christian emperor of Rome. Constantine in the year 312, which is also the year he issued the Edict of Toleration for Christianity, issued a new gold piece which he called by a new name, the solidus — solid gold. This was struck at 72 to the pound, so it was in fact debased over Diocletian's. These were very large issues and historians have puzzled over where he got all the gold; but I think the puzzle is not so much of a real puzzle once you begin to look at the legislation that took place.

First of all, he issued two new taxes: one was taxed on the estates of the senators, and this was rather new because senators generally were free of most taxes on their land. He also issued a tax on the capital of merchants; not their earnings, but their capital. This was to be levied every five years and it was to be paid in gold. He also required that the rents from the imperial estates, which were rented out to tenants, were to be paid only in gold. He took on the bullion reserves of his former partner Licinius who had extracted, by force, bullion from the treasuries of the cities of the Eastern Empire. In other words, any city that had any gold bullion or silver bullion left in its treasury, this was simply requisitioned by Licinius and this passed on now into the hands of Constantine who had gotten rid of Licinius in a civil war.

We're also told that he stripped the pagan temples of their treasuries. This he did rather late in his reign, still somewhat afraid apparently in the early days of angering the gods of Rome. As his Christianity became more fixed, he felt greater ease at robbing the temples. Now, Constantine's reform in one sense began the reversal of the process: the gold coinage was sufficiently large that it began to take hold and to circulate more freely. The silver coinage failed and, what was worse, at no time in this period did the central government try to control the token coinage. And the result of that was [that] token coinage was being minted not only by the imperial mints, but also by the mints of cities. In other words, if a city couldn't pay its costs, pay its salaries to its employees, it simply struck up some token coinage and issued that.

By the late 3rd century we also begin to have massive appearance of what numismatists call counterfeits. I would say it would be called credit money today. People need small change, and they simply go and manufacture it — all of which of course means that the amount of token coinage in circulation is uncontrolled and increasingly massive. Now, one of the things that had happened in the course of this 3rd century inflation was that the government found that when it paid its troops in token coinage, or even in these debased silver coins, prices immediately rose. Every time the silver value of the denarius dropped, prices naturally rose; and the result of this was [that] the government, in order to try to protect its civil servants and its soldiers from the effects of inflation, began to demand payment of taxes in kind and services rather than in coin. They wound up, in effect, in repudiating their own issues, not accepting them for tax collection purposes.

With Constantine's reform, this situation changed somewhat and, slowly but surely, the government began to move away from collecting taxes in kind and from paying salaries in kind, and began to substitute paying salaries in gold and collecting taxes in gold. Over the long run, this meant that the gold standard was strengthened and gold remained the real money of the Roman Empire. However, the inflation did not end for the masses of the people. In other words, gold was a hedge against inflation for those who had it, and these were principally the troops and the civil servants. The taxpayers had to buy these gold coins in order to pay their taxes and so, if they were wealthy enough, they could afford to buy these gold coins which were increasingly expensive in terms of token money. If they were poorer they simply couldn't pay the taxes and this meant they lost their lands in one form or another or became delinquents; and we hear constant references to people abandoning their land, disappearing.

As a matter of fact in the 3rd century this was a constant problem in Rome: all sorts of people were trying to escape the increased taxes that the military needed. The army itself [had grown] from the time of Augustus, when they had about a quarter of a million troops, [to where] by the the time of Diocletian they had somewhat over 600,000. So the army itself had doubled in size in the course of this inflationary spiral, and obviously that contributed greatly to the inflation.

In addition, the administration of the state had grown enormously. Under Augustus essentially you had the imperial administration at Rome and the governors of different provinces, the secondary level of administration, and then the primary governmental units in the Roman Empire in this time were the cities, the municipalities. By the time of Diocletian this pattern had been broken apart. You had not one emperor but you had, under Diocletian, four emperors. Which meant four imperial courts, four Praetorian Guards, four palaces, four staffs, etc.

Under them were four Praetorian prefectures, regional administrative units with their staffs and their budgets. Under these four prefectures, they were then divided into 12 dioceses, each diocese having its administrative staff and so on. Under the diocesan rulers, the vicars of the diocese, we have the provinces. In Augustus' time there were approximately 20 provinces. Three hundred years later, with no substantial increase in territory, there were over a hundred provinces. They had simply began to divide and subdivide provinces for purposes of maintaining internal military control of these regions. In other words, the cost of policing the Roman state became increasingly enormous.

All these costs, then, are some of the reasons why the inflation took place; I'll get to others in a moment. To give you some idea of the situation after Constantine's reform of the gold, let me just briefly give you the figures for what it cost in terms of the silver coinage, or token coinage now, the denarius, for a pound of gold. In Diocletian's time, in the year 301, he fixed the price at 50,000 denarii for one pound of gold. Ten years later it had risen to 120,000. In 324, in other words 23 years after it was 50,000, it was now 300,000; and in 337, the year of Constantine's death, a pound of gold brought 20,000,000 denarii. And by the way, just as we are all familiar with the German currency of the [1920s] with the bigger stamp on it, the Roman coinage also has stamps and over-stamps on the metal, indicating multiples of value.

At one point one of the Roman emperors had a marvelous idea: instead of issuing a single coin he devised a method to handle the inflation. He took brass slugs and put them in a leather pouch and called it a follis; and people began passing these pouches back and forth as value. I guess it was the Roman equivalent to those baskets of paper we see in the pictures of Germany in the [1920s]. Interestingly enough, within ten years or so after that began, the word follis — which had meant this bag of coins — had now drifted to mean one of those slugs. One of those slugs was now the follis; so they couldn't even keep the bags stable, they too were inflated.

Now one interesting thing with all this inflation, I think it should be a great comfort to us: historians of prices in the Roman Empire have come to the conclusion that despite all of this inflation — or perhaps we should say, because of all this inflation — the price of gold, in terms of its purchasing power, remained stable from the first through the fourth century. In other words, gold remained, in terms of its purchasing power, a stable value whereas all this coinage just became increasingly worthless.

What were the causes of this inflation? First of all, war; the soldiers' pay rose from 225 denarii during the time of Augustus to 300 denarii in the time of Domitian, about a hundred years later. A century after Domitian, in the time of Septimius, it had gone from 300 to 500 denarii; and in the time of Caracalla, about 10 years later, it had gone to 750 denarii. In other words, the cost of the army was also rising in the terms of the coinage; so, as the coinage became more worthless, the cost of the army had to be increased. The advance in the soldier's pay in the rest of the 3rd century and into the 4th century is not known, we don't have figures. And one reason is that the soldiers were increasingly paid in terms of requisitions of supplies and goods in kind. They were literally given food, clothing, shelter and other commodities in lieu of pay - and this applied also to the civil service.

When one Roman emperor refused to pay a donative on his accession — this was a bonus given to the soldiers on the accession of the emperor — he was simply murdered by his troops. The Romans had had this kind of problem even in the days of the Republic: if the soldiers don't get paid they rather resent it. What we find is that the donatives had been given on the accession of a new emperor from the time of Augustus on; then they began to be given in the 3rd century every five years. By the time of Diocletian, donatives were given every year, so that the soldiers' donatives had in fact become part of their basic salary.

The size of the army, I think I indicated already, had increased. Doubled from the time of Augustus to Diocletian, and the size of the civil service I indicated also. Now, all these events strained the fiscal resources of the state beyond its ability to sustain itself, and the debasement and the taxation were both used to keep the ship of state going; frequently by debasing, then by taxation, and then often simply by accusing people of treason and confiscating their estates.

One of the Christian fathers, Saint Gregory Nazianzus, commented that war is the mother of taxes and I think that's a wonderful thing to keep in mind: war is the mother of taxes. And it's also, of course, the mother of inflation.

Now, what were the consequences of inflation? One of the odd things about inflation is, in the Roman Empire, that while the Roman state survived — the Roman state was not destroyed by inflation — what was destroyed by inflation was the freedom of the Roman people, and particularly the first victim was their economic freedom. Rome had basically a laissez-faire concept of state/economy relations. Except in emergencies, which were usually related to war, the Roman government generally followed a policy of free trade and minimal restriction on the economic activities of its population. But now under the pressure of this need to pay the troops and under the pressure of inflation, the liberty of the people began to be seriously eroded - and very rapidly.

We could start with the class known as the decurions. This was your prosperous, small and middle landowning class who were the dominate elements of the cities of the Roman Empire. They were the class from which were chosen the municipal counsels, the municipal magistrates and officials. Traditionally, they had viewed service in the governments of their towns as an honor and they had responded to this by donating, not merely their time, but their wealth to the betterment of the urban environment: building stadiums and bathhouses and repairing the streets and providing for pure water. These were considered benefactions, it was a kind of philanthropic element and their reward was, of course, public recognition and esteem.

This class, in the mid-3rd century, was assigned a task of collecting the taxes in the municipality that were being assessed by the central government. The central government could no longer collect its taxes effectively, so they made the decurion class collectively responsible for getting revenues and passing them on to the imperial government. The decurions, of course, had as much difficulty as anyone else in doing this, and the returns were, again, frequently inadequate so the government solved that problem by simply passing a law that any taxes that decurions could not collect from others, they would have to pay out of their own pocket. That's known as the incentive method for the tax collect. [laughter]

As you can well imagine, as the crises became greater and the economy was disrupted by civil conflicts and invasions and the effects of inflation, the decurions, strangely enough, no longer wanted to be decurions; and they began to abandon their lands, abandon their cities, and escape to wherever they could find refuge in other larger cities or other provinces. But they were not to be allowed to do that with impunity, and the law was then passed that any decurion discovered somewhere else was to be arrested, bound like a slave and carted back to his hometown where he was restored to his dignity as a decurion. [laughter]

This third century is also the period of the persecution of the church, and we find that at least some of the emperors must have had a sense of humor because when they passed a regulation that if a Christian was arrested and found guilty of capital punishment, namely believing in Christ, he was to not be executed but offered the option of becoming a decurion. [laughter]

Now, the merchants and the artisans were traditionally organized into guilds and chambers of commerce and that sort of thing. They now, too, came under government pressure because the government could not obtain enough material for the war machine through regular channels — people after all don't want all that token coinage — and so they were now compelled to make deliveries of goods. So that if you had a factory making garments, you now had to deliver so many garments to the government requisitions. If you had ships, you had to carry government goods in your ships. In other words, what we have here is a kind of nationalization of private enterprises, and this nationalization means that the people who risk their money and their talent are compelled to now serve the state whether they like it or not.

When people tried to get out of this they were then, by law, compelled to remain in the occupation that they were in. In other words, you couldn't change your job or your business. This was not sufficient because, after all, death is always a relief from taxes; and so the occupations were now made hereditary. When you died, your son had to take up your business, your trade, your profession. If your father was a shoemaker, you had to be a shoemaker. These started by being restricted to the defense-oriented industries but, of course, gradually it was realized that everything is defense-oriented and the system just developed.

The peasantry, known as the coloni, these were leaseholders on both imperial and private estates. They, too, formerly a free class were now under the same kinds of pressures that all smallholders were in this situation, and they began to drift away trying to find better opportunities, better leases, better occupations; and so under Diocletian the coloni were now bound to the soil. Anyone who had a lease on a particular piece of land could not give that lease up. More than that, they had to stay on the land and work it. In effect, this is the beginning of what in the Middle Ages is called serfdom, but it actually has its origins here in the late Roman society.

We know for example from studies of Palestine, particularly in the Rabbinical writings, that in the course of the 3rd and early 4th century the structure of landholding in Palestine changed very dramatically. Palestine in the 2nd century was largely composed of small peasant landholders with very small acreage, perhaps an average of two and a half acres. By the 4th century those small holders had virtually disappeared and been replaced by vast estates controlled by a few large landowners. The peasants working the estates were the same people, but they had in the meantime lost their land to the larger landowners.

In other words, landholding became a massive kind of agribusiness. In [the] course of this the population of Palestine, still principally Jewish, also changed in that the ownership of land passed from Jews to Gentiles; and the reason for that undoubtedly was that the only people with large amounts of cash who could buy out these smallholders who were in distress were, of course, the government officials. And we hear of them being called potentates, powerful ones. In effect there is a shift in the distribution of wealth in Palestine; and obviously, from other evidence, similar things were happening in other places.

With regard to taxes, they naturally increased across the board, but Diocletian decided that it was a very inefficient system that he had inherited; every province more or less had its own system of taxation going back to pre-Roman times, actually. And so he, with his military mind, demanded standardization. And what he did was to have all wealth, which was of course landed wealth, assessed in units of productivity. In other words, every person who had land was either singly, if he was a large landowner, fit into a particular unit, a tax unit called iugum, and those who were smaller landowners were collectively put into a iugum. This meant that the emperor for the first time had the basis of a national budget, something the Romans never had until Diocletian, and therefore he knew at any given time how many taxable units of wealth there were in any province, and he could simply levy an assessment and expect to get a fixed amount of money.

Unfortunately, this took no account of the fact that in agriculture productivity varies considerably from season to season, and that if an army has passed through your district it may take years to recover. The result is, we hear of massive petitions from whole regions asking the emperor to forgive them their taxes, to remit five years of past dues and so on and so forth; or to reduce the number of units of productivity to reflect the loss of population or the loss of materials. As a matter of fact, when people began to say "it used to be I had five people paying this unit of taxation, but two them have fled and it's only half the land in production," the response of the government was to say, "that doesn't matter, you still have to pay for the land that is now out of production." So, I mean, there's no relationship between taxes and actual productivity.

How did people protect themselves from this? Well, first of all, mortgages virtually ceased; long-term mortgages virtually ceased to be given. Long-term loans of any kind disappeared. No one will lend unless they are guaranteed payment in gold or silver bullion. In fact the government itself, under Diocletian and Constantine, refused to accept gold coins in payment of taxes, but insisted instead on gold bullion. So that the coins that you bought in the marketplace had to then be melted down and presented in the form of bullion; and the reason was [that] the government was never sure how adulterated its own gold coinage really was so they insisted on bullion.

Pledges and securities for crops and for loans were always in either gold, silver or indeed in crops themselves. In Egypt we have a document in which the banks have been refusing to accept coins with the divine image of the emperor; in other words, state issues. The government's reaction to that, of course, was to force the banks to accept the coinage. This led to wholesale corruption in Roman society as the black market became a normal part, as people refused to pass, to exchange, coinage at the officially fixed tariffs but instead coinage was passed on a market principle.

There were, obviously, flight from the land, massive evasion of taxes, people left their jobs, they left their homes, they left their social status. Now, Diocletian's final contribution to this continuing disaster was to issue his famous Edict on Prices [of] 301, a very famous instance of a massive effort by the government to control inflation by price controls. You have to realize that there is a little problem: the Roman Empire was a vast region running from Britain in the west to Iraq, Mesopotamia in the east; from the Rhine and the Danube to the Sahara. It included areas of very sophisticated and very primitive economies, and the result of that was the cost of living varied considerably from province to province. Egypt seems to have had the lowest cost of living, Palestine had a cost of living twice that of Egypt, and [Rome in Italy] had a cost of living twice that of Palestine.

Diocletian ignored that; he just issued a single standard price for the entire empire. The result was that in Egypt the effects of the Edict probably didn't exist because the price, the maximum price fixed in the Edict, was very rarely reached in Egypt. But it was the people in Rome, of course, [who] had the maximum price lower than the market price. The result of that, of course, was riots in the street, disappearance of goods; the penalty for violating the law was death, a very common penalty in Rome for almost anything; and the mentality of Diocletian comes out, and the cause of [the] maximum price edict comes out in the preface to the law. I'll just quote briefly some of it; when you hear these first words I'd like you to pay attention because you may have a different interpretation of them than Diocletian meant. He says, "if the excesses perpetrated by persons of unlimited and frenzied avarice could be checked," he doesn't mean himself [laughter], "if the general welfare could endure without harm this riotous license, if these uncontrolled madmen, the unscrupulous, the immoderate, the avaricious, could be persuaded to desist from plundering the wealth of all, then all would be well." Now who are these people? They are the merchants; they are the avaricious greedy types who cause inflation as we all know.

Then he speaks about himself and his three partners. "[We, the protectors of the] human race," sounds familiar doesn't it [laughter], "we are agreed that decisive legislation is necessary, so that the long-hoped-for solutions, which mankind itself could not provide..." You know, it's the same stuff [laughter], we can't do anything ourselves, we need the legislator. "By the remedies provided by our foresight [laughter], these things may be remedied for the general betterment of all." In fact, as you read through the rest of the thing it becomes clear that the reason the Edict on Prices [was] issued was that the soldiers were the principal victims of the inflation, and that Diocletian was afraid he was losing control of his army. And so the people who are to be protected are the soldiers and the other servants of the state.

Now Diocletian's monetary reforms were tentative steps in the right direction; except for the Edict on Prices which, by the way, simply didn't work and was gradually dropped. But his steps were not radical enough; his inability to create a sufficient supply of gold and silver coinage, combined with his continued reliance on payments in kind for taxes and salaries, and the continued issuance of fiat bronze coinage in endless amounts, failed to make a significant dent in the problem.

Constantine's reforms were also partial, but of sufficient vigor and radical character to make a difference. Through his willingness to extract by compulsion the gold reserves of the taxpayers, forcing them to disgorge their bullion, he placed an ever-increasing supply of gold in the hands of the government officials. This was increasingly used to pay military bonuses, salaries for bureaucrats, and even payments for certain public works. Increasingly, then, a two-tier monetary system emerged in which the government, the soldiers and the bureaucrats enjoyed the benefits of a gold standard while the non-governmental portion of the economy continued to struggle with a rapidly-inflating fiat currency.

The new gold solidus — circulated widely by its possessors, the government-salaried employees — sold at various market rates to customers who desperately needed it to pay their taxes. Thus the state had found a way to protect itself and its servants from the unwholesome effects of its own earlier inflationary cycle, while slowly withdrawing itself from the cumbersome and wasteful system of accepting taxes and paying salaries in kind. Meanwhile, the masses suffered from [a] massive injection of fiat money which they had to accept in payment for government requisitions of such gold or silver or other commodities which the government demanded.

Now, we may wish to find some lessons in this tale of [the] monetary policies of the late Roman Empire. The first lesson, I think, must be that if war is the health of the state, as Randolph Bourne said, it is poison to a stable and sound money. The Roman monetary crisis therefore was closely connected with the Roman military problem. Another lesson is that the problems become solvable when a ruler decides that something can be done and must be done. Diocletian and Constantine clearly were willing to act to protect their own ruling-class interest, the military and the civil service. Monetary reforms were necessary to win the support of the troops and the bureaucrats that composed the only real constituency of the Roman state, and the two-tier system was designed to this end. It brought about a stable monetary standard for the ruling group who did not hesitate to secure it at the expense of the mass of the population.

The Roman state survived. The liberty of the Roman people did not. When freedom became possible in the west in the 5th century, with the barbarian invasions, people took advantage of the possibility of change. The tax burden remained burdensome even after the gold standard was re-established. The peasantry had become totally alienated from the Roman state because it was no longer free. The business community likewise was no longer free, and the middle class of the urban cities was no longer free.

The economy of the west was perhaps more fatally weakened than that of the east, and when we read in the writings of the early 5th century Christian priest Salvian of Marseille his account of why the Roman state was collapsing in the west — he was writing from France, Gaul — Salvian says that the Roman state is collapsing because it deserved collapse; because it had denied the first premise of good government which was justice to the people. And by justice he meant a just system of taxation. Salvian tells us, and I don't think he's exaggerating, that one of the reasons why the Roman state collapsed in the 5th century was that the Roman people, the mass of the population, had but one wish after being captured by the barbarians: that they would never again fall under the rule of the Roman bureaucracy. In other words, the Roman state was the enemy, the barbarians were the liberators. And this undoubtedly was due to the inflation of the 3rd century. While the state had solved the monetary problem for its own constituents, it had failed to solve that monetary problem for the masses and continued to use an oppressive system of taxation in order to fill the coffers of the ruling bureaucrats and military. Thank you. [applause]