The Villains of History

Blaming banksters for these vast cycles of rise and fall is something a few historians have tried to do, interpolating finance into their stages. Their model focuses on how a serviceable organization of economics is created, becomes institutionalized, and eventually turns from a social tool into a vested interest that blocks adaptation. One could argue that banking is not an eighth stage but s recurring transformation within Stages 4-6 (Time of Troubles to Universal Empire).

An extension might look something like this. Leading out from the flourishing stage, finance serves production (the creation of real wealth, good for protoplasm and good for the soul both). Credit expands commerce, industry, and state capacity. Wealth is still primarily gained by created new wealth.

Interpolated stage: financial ascendancy. Financial institutions become politically dominant. Increasing portions of income derive from lending, speculation, rents, and asset appreciation rather than expansion of production. Economic power becomes more centralized.

Runup or eve of Universal Empire. The state and financial system become fused. Public and private debt proliferate. Resources flow increasingly toward maintaining existing claims rather than creating new wealth.

This is the stage of underinvestment and overextraction. To me the most blatant example is the money-for-nothing acquired from the bond markets.

Elites preserve paper wealth by transferring costs to the broader population through taxation, inflation, debt burdens, monopoly privileges, or austerity. Economic dynamism slows. Social trust declines.

Decay and Realignment: Debts are repudiated, inflated away, defaulted upon, or otherwise restructured. Political and economic institutions lose legitimacy. New instruments of expansion emerge elsewhere.

This pattern appears repeatedly:

Late Roman tax and credit systems.

The financialization of the Dutch Republic.

The transition of Britain from industrial supremacy toward global finance in the late 19th century.

Various interpretations of the modern United States.

However, there is a competing interpretation. Historians would likely argue that "banking" is not the causal factor. Rather, banking becomes prominent because the civilization's original instrument of expansion has already matured. The best case is how sole proprietorships and partnerships in industrializing England needed more money for expansion than their savings could provide. Finance is then blamed for a deeper problem: the exhaustion of profitable frontiers and the growing power of entrenched institutions.

Most macrohistorians might say that banking acts much like the Church in medieval Europe, the Roman bureaucracy in the Empire, or landed aristocracies elsewhere. The specific institution varies. The underlying process is always the same: an instrument of expansion becomes an institution serving itself.

In that sense, the truly universal stage is not "banking" but financialization, meaning the shift from earning wealth by creating new productive capacity to earning wealth by controlling claims on existing wealth. That phenomenon does seem remarkably common across civilizations, whether the dominant actors are bankers, landlords, temples, bureaucrats, or merchant oligarchies. It fits macrohistory's framework quite naturally as a characteristic feature of late-stage civilization rather than a distinct eighth stage.

Hall explains the operational consistency of financialization by positing a historical continuity from one civilization to another. That is one of the more distinctive aspects of Steve Hall's argument.

The Comparative Civilization Forum tends to treat civilizations as largely discrete organisms. They are born, grow, institutionalize, decay, and are eventually replaced. Similar patterns recur, but there is no single actor or structure that necessarily survives the collapse and passes from one civilization to the next.

Hall, by contrast, is trying to explain why certain social arrangements, especially financial arrangements, seem to reappear with remarkable consistency across different civilizations. His answer is not simply that human beings make the same mistakes over and over. Rather, he suggests there is a degree of institutional continuity. Merchant-financial networks survive political collapse more easily than territorial states because they are mobile. They can shift centers, languages, dynasties, and even civilizations while preserving techniques, practices, and accumulated knowledge.

Viewed this way, the pattern is not:

Civilization A develops financialization and collapses.

Civilization B independently develops financialization.

Instead it is:

Financial institutions and merchant elites from Civilization A partially survive its decline and become embedded within Civilization B, carrying forward a proven set of practices.

This gives financialization an operational continuity that the Forum's model lacks.

There is an interesting tension here. The Forum's famous concept of the "instrument of expansion" can explain why a civilization initially grows. But Hall asks a different question: why does the same late-stage pattern of creditor dominance keep emerging? If there is genuine institutional inheritance between civilizations, then financialization may not merely be a symptom of maturity. It may be a self-reproducing system that outlives the civilizations on which it feeds.

Historically, one can see why someone might be tempted by this view. Consider the succession:

Mesopotamian merchant-credit systems

Phoenician and Greek commercial networks

Roman banking and tax-farming

Italian city-state finance

Dutch commercial finance

British imperial finance

Modern global finance

The personnel change, the religions change, the states change, but techniques of credit, debt, bookkeeping, and long-distance commerce accumulate rather than disappear. Each generation begins where the previous one left off.

A CCF Fellow might object that this still does not make finance the prime mover. Financial networks survive because they are useful instruments of cooperation and exchange. Their dominance in late civilizations is secondary to deeper structural problems. Hall is less inclined to grant that innocence. He tends to see financial power as possessing its own agenda and continuity, capable of shaping the trajectory of entire civilizations.

In a sense, Hall shifts the historical unit of analysis. For the CCF, the enduring actor is the civilization. For Hall, the enduring actor is the trans-civilizational financial network. Once you make that shift, financialization ceases to be merely one stage among others and starts to look like a recurring historical force that rides from one civilization to the next. That is precisely why Hall would likely find the Forum's seven stages incomplete. The stages describe the life cycle of civilizations, but not necessarily the life cycle of the institutions that survive them.