A Free Nation Deep in Debt

Introduction: THE FINANCIAL ROOTS OF DEMOCRACY 3 CHAPTER 1. TRIBES AND EMPIRES 10 Rags to Riches 10 Barbarians at the Gate 18 The Free Men Fight Back 24 Greeks and Their "Gifts" 31 Civic Debt 36 Kings and Tyrants 42 The Carthaginian Wars 45 Imperium Romanum 51 Breakdown 56 CHAPTER 2. CITIZEN CREDITORS 67 The Return of the City-State 67 La Serenissima 72 La Superba 77 The Monte Comune 81 The Twilight of Repayable Taxes 84 San Giorgio 94 Selfish Citizens 100 CHAPTER 3. SOVEREIGN DEBT 105 Kings and Merchants 105 The Treasure of the Indies 115 Antwerp and Lyons 122 Serial Bankruptcy 128 Folie des Offices 138 CHAPTER 4. RESISTANCE TO THE HEGEMON 148 The League of Cities 148 Regicide 157 Glorious Revolution 166 CHAPTER 5. THE CHIMERA 179 Le Roi Soleil 179 Post-bellum Depression 185 The Chimera 190 The Bubble 205 CHAPTER 6. THE DILEMMA 220 Mopping Up 221 The Ruling Class 227 The Dilemma 239 The Limits of Absolutism 255 Aristocratic Revolution 266 CHAPTER 7. REVOLUTION 272 A New World 277 The First and Second American Revolutions 289 Enemies of the People 307 The Elephant and the Whale 334 CHAPTER 8. BOURGEOIS CENTURY 347 Pax Britannica 348 The Heyday of Bourgeois Finance 355 Ties of Identity 366 A Nation of Rentiers 377 Greenbacks and 5-20s 384 CHAPTER 9. NATIONS AT ARMS 400 Total War (Part I) 400 The Settlement of Accounts (Part I) 413 Total War (Part II) 435 Totalitarian War 445 The Settlement of Accounts (Part II) 456 Epilogue: THE END OF THE AFFAIR 465 A Note on Currencies 477 Glossary 483 Notes 487 Bibliography 523 Acknowledgments 545 Index 547

Remarkable... [This] book could scarcely be more comprehensive... Since Macdonald was for many years a British investment banker, he has a hands-on feel for his subject. But he has not allowed his technical expertise to get in the way of his lucid prose: his argument is readily accessible to a lay reader. And that argument is convincing. -- Gordon S. Wood New York Review of Books A fine history of public finance from ancient Greece and Persia to the present. -- Richard N. Cooper Foreign Affairs Written clearly and accessibly... A challenging yet fascinating work [that] could hardly be more timely. -- Michelle Wucker Washington Post Macdonald has something exciting to teach all serious students of history-that the evolution of democratic institutions is not just about taxation and representation but also about investment. ll Ferguson, author of "The Cash Nexus This book begins with Moses, ends with World War II, and covers just about every important development in public finance in between. Yet, for all his range, MacDonald offers a simple, stunning thesis: Democracy arises from public debt. -- James Galbraith Democracy