The system continues to unravel. With each turn of the spiral, the financial and political costs of an effective resolution increase. We have moved past the point where electorates and their representatives are willing to pay the ever-rising costs of repairing the system. Last week a couple of senior parliamentarians from the ruling CDU party, whom I had previously considered voices of moderation, argued that a Greek exit from the eurozone would not be such a big deal. Expectations are changing quickly, and so is the acceptance of a violent ending.
For most of the first half of the sixteenth century relationships between the various components of this cosmopolitan ensemble were basically cooperative. Each "nation" specialised in a particular market niche defined by a merchandise (textiles for the English; alum, silver, and copper for the German; metal products for the Milanese; staples of various kind for the Lucchese) or by a predominant relationship of political exchange with one of the two most powerful territorialist organisations of the European world-economy (with France for the Florentine; and Spain for the Genoese). By pooling at fairs, as in Lyons, or in more continuous commodity and money exchanges, as in Antwerp, the promises of payment, the information, and the connections acquired in dealing with overlapping but distinct clienteles, the various "nations" cooperated with one another in attaining three main results.First, they ensured that the largest possible number of promises of payment would offset one another directly or indirectly, thereby minimising the actual transport of currencies that the " nations" had to undertake. Second, they pooled a better knowledge of conditions affecting trends and fluctuations in exchange rates than they would have been able to acquire on their own. And third, they involved one another in profitable commercial or financial deals, such as the election of the emperor in 1519, which would have been too big or risky for the members of a single "nation" to undertake but not for a "multinational" joint venture. These outcomes of cooperation were the main reason for the various "nations" to converge in specific places at specific times and thus create and keep alive central marketplaces like Antwerp and Lyons. But as soon as these outcomes declined in importance for one or more of the core "nations," cooperation was displaced by competition and the centrality of cosmopolitan marketplaces like Antwerp and Lyons was progressively undermined and eventually destroyed.A displacement of this kind began in the 1530s when the crowding out of German by American silver supplies destroyed the commercial foundations of the German "nation" and strengthened those of the Genoese "nation." It was also in the 1530s that the Genoese began to hold their own fairs in competition with the Lyons fairs, which were controlled by the Florentine "nation." In spite of these early signs of an escalation in inter-capitalist competition, relationships between the main "nations" remained basically cooperative through the 1540s and early 1550s.The real escalation only began with the crisis of 1557-62. As previously noted, it was in the course of this crisis that German capital was crowded out of high finance by Genoese capital. More important, the Genoese introduced the system of the asientos — contracts with the Spanish government that gave the Genoese almost complete control over the supply of American silver in Seville in exchange for gold and other "good money" delivered in Antwerp, which was quickly becoming the main centre of operation of the Spanish Imperial army. At this point, the Genoese "nation" lost all interest in cooperating with the Florentine "nation" and began making aggressive use of the supply of American silver to divert Italian liquidity (gold and bills of exchange) from the Lyons fairs to its own "Bisenzone" fairs. Although these fairs still bore the Italian name of Besançon — from where they had been held initially — they were in fact mobile (held at Chambéry, Poligny, Trento, Coira, Rivoli, Ivrea, and Asti) to suit the Genoese.By 1579, when the Bisenzone fairs settled at Piacenza in the Duchy of Parma, a tightly controlled and highly profitable triangle had been established through which the Genoese pumped American silver from Seville to northern Italy, where they exchanged it for gold and bills of exchange, which they delivered to the Spanish government in Antwerp in exchange for the asientos which gave them control over American silver in Seville. By the end of the 1580s, the progressive centralisation of the supply of American silver and northern Italian and bills of exchange within the Genoese triangle made the decline of Lyons as the central money market irreversible. Although Antwerp was one of the three corners of the Genoese triangle, its vitality as a central commodity and money market had been sapped much earlier. The crowding out of the Germans and the increasing exclusiveness of the Genoese-Iberian connection alienated the English who, in the late 1560s, returned home under Thomas Gresham's leadership to convince Elizabeth I of the importance of making England independent of foreigners not just in trade but in finance as well.The consolidation of the system of the Piacenza fairs thus marked the end of the system of cooperating "nations" which had governed the capitalist engine of the European world-economy in the first half of the sixteenth century. The Genoese had won the day, but this early victory in the battle for supremacy in high finance was only the prelude to a much longer struggle. This was the war of Dutch independence, in which the Genoese let their Spanish partners do the actual fighting, while they profited behind the scenes by transforming silver delivered in Seville into gold and other "good money" delivered in Antwerp near the theatre of operations. Without this war there probably would have been no "age of the Genoese." But it was this same war that eventually dislodged the Genoese from the commanding heights of the capitalist world-economy.--Giovanni Arrighi, The Long Twentieth Century (Verso, 1994/2010), p.133-5.