On 31 October 1517 a thirty-three-year-old priest in the small German town of Wittenberg wrote a letter that would change the course of history. Addressed to the bishop of his parish, Martin Luther’s letter complained about the Roman Catholic Church’s selling of indulgences, the practice by which the Pope would grant remission from the punishment of sin. The more Luther read the Bible, the more he became convinced that it was not by performing good deeds that one obtained salvation, but by faith alone through God’s grace. It was wrong to claim, he argued in the Ninety-Five Theses contained in the letter, that indulgences could absolve buyers from eternal punishment and grant them salvation.

These indulgences were, of course, a valuable source of income for the Church, especially at a time when Pope Leo X planned to rebuild St Peter’s Basilica in Rome.

The collapse of the sterling system after WWI left a vacuum into which the dollar system would eventually expand, but only after world depression and another world war. The life of Charles P. Kindleberger, whose intellectual formation spanned the critical years of dollar system formation, parallels the subsequent vicissitudes of that system, of which he was perhaps the keenest observer.

The main reason for the long-lasting popularity of Lego bricks is their versatility. A back-of-the-envelope calculation will reveal that six bricks of 2 x 4 studs can be combined in almost 1 billion ways. And because Lego bricks made today still interlock with those first made in 1958, the year the toy was first patented, the possibilities for creative play are, quite literally, innumerable.

Two years before the patent that would turn Lego into the world’s favourite toy company, a man called Malcom McLean made the same discovery as Ole Kirk Christiansen, the inventor of Lego. McLean was not in the business of making children’s toys, however, but of shipping goods. On 26 April 1956 he was watching his idea come to fruition: in Newark, New Jersey, a crane was lifting fifty-eight aluminium metal boxes into an old tanker ship.

In March 1887 Robert Germond, a missionary in charge of a small mission station at Thabana Morena on the western border of present-day Lesotho, reported sad news. Basutoland, he wrote, ‘produces less and finds no outlet for its products. Its normal markets, Kimberley and the Free State, purchase Australian and colonial wheat … Basutoland, we must admit, is a poor country … Last year’s abundant harvest has found no outlet for, since the building of the railway, colonial and foreign wheat have competed disastrously with the local produce.’1

Thabana Morena is about 330 kilometres from Kimberley. Then part of the British protectorate of Basutoland, the region was the breadbasket of the South African interior. Basotho farmers produced grain for the rapidly growing local markets of Griqualand West, a division of the Cape Colony whose major town was Kimberley, and the Orange Free State, one of the two Boer republics set up in the 1850s after the Great Trek.

‘Awaking on Friday morning, June 20, 1913, the South African Native found himself, not actually a slave, but a pariah in the land of his birth.’1 So begins Sol Plaatje’s Native Life in South Africa, a book in which he appeals against one of the most consequential pieces of legislation passed by the new Union of South Africa after its establishment in 1910. The Natives Land Act of 1913 restricted ownership of land by black South Africans to a small fraction of the available agricultural land of the country. It decreed that whites and blacks were not allowed to buy land from each other. And although the Act did not have an immediate impact, as many, including Plaatje, had thought it would, it began a process of legislative segregation that would ultimately culminate in Grand Apartheid – the division of South Africa into white and black territories or ‘homelands’ – half a century later.

About 300 kilometres from Cape Town on the south-west coast of South Africa is a cave that overlooks the Indian Ocean. Archaeologists have been digging at Blombos Cave since 1991. What they have found has changed our view of human evolution.

Anatomically modern humans evolved in Africa. Homo sapiens is a species of the hominid family, the great apes. Genetic evidence suggests that apes diverged from other mammals around 85 million years ago; the earliest fossils we have of apes are from around 55 million years ago.

There are two things that make humans unique from other apes: bipedalism and language. Bipedalism, our ability to walk on two legs, also resulted in other skeletal changes, to the pelvis, the vertebral column, feet and ankles, and the skull, including an increase in the size and structure of the brain.

Kindleberger’s 1985 presidential address to the American Economic Association launched the final stage in his career, even as the 1985 Plaza Accord launched the next stage in the development of the dollar system. Kindleberger’s high hopes after Plaza were ultimately disappointed but, learning from the period after Nixon’s 1971 abdication of US leadership, he shifted his hopes instead to the prospect of “muddling through.”

When Milton Obote was inaugurated as Uganda’s first prime minister in 1962, the future of the country that Winston Churchill had called ‘the Pearl of Africa’ looked brighter than ever. Independence from Britain had come with a carefully constructed federal constitution that gave some internal autonomy to the ancient kingdom of Buganda and its king, while Obote and his government could still maintain effective control of a country with diverse ethnic and interest groups.

Independence brought democratic institutions at a time when the economy was booming. The ‘cash crop revolution’ involving cotton and coffee that started with the construction of the railway from Uganda to the Kenyan port at Mombasa in 1901 had spread rapidly during the following half-century. In the first decade of independence, coffee exports more than doubled.

Predicting the future is a perilous exercise. But that has not stopped us trying. Hunter-gatherers carefully studied their natural environment to predict food availability. The earliest farmers developed sophisticated ways to predict rain. In the eighth century BCE the oracle of Delphi attracted to her temple those who wanted to know the future. Others have searched for clues to future events in bones, marbles, cards and crystal balls. For a quick fix, just page to the horoscope section in your daily newspaper.

It makes sense to want to know the future. Knowledge is power. And power is money. Entrepreneurs must predict the future demands of their customers, the behaviour of their competitors, and the cost of their inputs. In more volatile environments, prediction is more difficult, which increases risk and requires higher reward. That is why it is so difficult to attract investment in unstable times.

In his bestselling book Sapiens, Yuval Noah Harari writes: ‘We did not domesticate wheat. It domesticated us.’1 This statement captures a fundamental truth about the Neolithic Revolution, sometimes also called the Agricultural Revolution, which began about 10,000 BCE. This was a period in history when humans transitioned from a lifestyle of hunting and gathering to one of farming and settlement.

For most of our history, humans have lived nomadic lives. We would cluster into small bands of between 30 and 150 people – and roam the countryside looking for animals to hunt, and seeds, berries and fruits to gather. We know something about this lifestyle of our nomadic ancestors by observing the few groups of people that still live in this way. In southern Africa we are most familiar with the San, although most San people today have now switched to a sedentary lifestyle.

When Marvel Studios released its superhero film Black Panther in 2018, kids across the continent of Africa began to salute one another Wakanda-style. They crossed their arms (in a gesture like the pharaohs of ancient Egypt, who were laid to rest with their arms on their chests) and would end the greeting with the words ‘Wakanda forever’.

Wakanda, of course, is a fictional country. It was created, so the story goes, when a massive meteorite made up of an equally fictional metal, vibranium, crashed into a location somewhere in East Africa. Understanding the value of vibranium, the leaders of Wakanda concealed this rare and valuable energy-giving resource. Many of the best scholars of Wakanda were sent to study abroad and, on their return, their work turned Wakanda into one of the world’s most technologically advanced countries. Although Wakanda appears from the outside to be a poor, developing country, it is actually prosperous beyond belief.

Just before the start of the First World War, Robert Millikan, professor of physics at the University of Chicago and a specialist in electron theory, travelled to Germany to present an academic paper. A few years earlier, in 1905, the scientist Albert Einstein had proposed a linear relationship between the wavelength of light and the maximum velocity of electrons emitted from irradiated metal. Einstein was developing quantum theory – and Millikan was adamant that he was wrong.

While visiting Dresden Millikan was introduced to a young researcher who had just completed his PhD. The young man was South African and could thus speak English – which is probably why he was asked to show Millikan around campus. They also shared a research interest, as the young researcher was also working on Einstein’s theory.

On 27 April 1994 Nelson Mandela’s long walk to political freedom came to an end. On that fresh autumn morning 22 million South Africans headed to their nearest voting booths to cast their votes, many for the first time, in the country’s first democratic elections. The mood was festive. After almost a century of political exclusion, black South Africans now had an equal political voice – and they made it count: the African National Congress won 63 per cent of the total vote. Mandela was sworn in a few days later as the country’s first democratically elected president.

But not all freedoms were fulfilled on Freedom Day (as that first democratic election is known). Many South Africans at the time were living in abject poverty, unable to achieve the life they wanted. Almost all of them were black. The new rainbow nation was characterised by stark levels of inequality.

After his formal PhD, from 1936-1942 Kindleberger continued his education as a central bank staffer, absorbing the key currency approach of John H. Williams at the New York Fed, critically engaging the monetarist approach of Per Jacobsson at the BIS, and then enthusiastically signing on for the globalist vision of Alvin Hansen at the Board of Governors.

Russia is the world’s largest country by landmass, covering an area of 17 million square kilometres. Canada, the world’s second-largest country, is less than 10 million square kilometres in size. At the beginning of 2022, before the invasion of Ukraine, Moscow, Russia’s capital, was home to more billionaires than any other city on earth. Yet Russians are relatively poor compared with their western and eastern neighbours. The GDP per capita of Russians is only half that of Portugal, one of the poorest countries in Western Europe, and less than a quarter of that of Japan, its easternmost neighbour. Why is it that the average Russian has lagged behind, despite the nation’s apparent opulence?

The answer lies in the country’s economic institutions. By the beginning of the twentieth century Russia was already a poor country relative to its neighbours. It had only abolished serfdom in 1861.