Abstract
Some might take the fact that political theorists worry about the economy as itself being a problematic symptom of our times. In any case, their interest in economic question seems to have increased after 2008. Answering such questions requires a good grasp of what this strange animal called “capitalism” is. Much that has been written about capitalism, however, is by either friends or foes, and it is not easy to find a well-balanced, detailed, and yet easily digestible overview. Jürgen Kocka, professor emeritus at Free University Berlin and one of Germany’s most eminent social historians, has now accomplished this task, in a 130-page volume in the “Wissen” series of C.H. Beck, which is intended for an educated yet non-expert audience. One of Kocka’s achievements is that he brilliantly manages to stick to this format without becoming boring or falling into trivialities.
Kocka starts with disentangling some of the controversies around the concept of capitalism. Drawing on Marx, Weber, and Schumpeter, he argues that three of its features are central: (1) individual property rights and decentralized decision making, (2) the coordination of economic activities in markets, in which commodified goods are traded and prices form according to supply and demand, (3) the role of capital, that is, investment and reinvestment in a strive for profits. Capitalism came to dominate economic structures and whole societies only in the nineteenth and twentieth centuries—what Kocka then calls “capitalist systems”—and even then it coexisted with many economic activities structured according to different principles, such as household economies or non-profit-maximizing family businesses, as Kocka emphasizes throughout the book. But there were also capitalist economic practices long before the era of industrialization, which Kocka discusses in his account of early forms of “merchant capitalism” in China, the Arabic world, and medieval Europe. In this phase, capitalist adventures were often connected to violent conquests or wars, and mechanisms that helped to enforce social norms—via family ties, or via a joint religion—were essential for creating reliability within these networks. Up to around
The next part of the book covers the era of colonialization and the first forms of globalised trade, also discussing the rise of joint stock corporations, slavery, and plantation economy—chapters of the history of capitalism that again show its affinities with various forms of violence. The development of agrarian capitalism and the beginnings of the industrialization, while anything but peaceful, brought slow improvements in productivity, which in some countries went into the pockets of small elites, while there were more widespread improvements in others, for example, the Netherlands. Towards the end of this part, Kocka returns to the history of ideas and provides a short but well-balanced account of Adam Smith’s doctrines in the context of his time. He emphasizes that Smith’s account of “commercial society” was more than an economic theory in the sense of today’s textbook economics; rather, it was a vision about a kind of society in which the division of labour rendered individuals useful to one another and in which “doux commerce” (Montesquieu) tempered the belligerent passions.
The fourth and final part covers capitalism from
Kocka then turns to the financialization of the last third of the twentieth century. He cannot or does not want to hide his scepticism about a global economy in which financial markets are in the driver’s seat, impressing their short-term logic on companies and individuals—he quotes a scene from Tom Wolfe’s Bonfire of Vanities in which the protagonist, investment banker Sherman McCoy, fails to explain the point of his professional activity to his six-year-old daughter, leaving it to the reader to decide whether McCoy is bad at explaining or whether there is nothing that can be explained. In this part, one wonders whether Kocka gives enough attention to the degree of virtuality that the international financial system has taken on. The creation of money (or of assets that can be used as money) by the regulated banks and even more by the shadow banking system, and the complex structures of derivatives, raise questions of their own. Can we use our old notions, for example, our understanding of property rights, for grasping what is going on in these markets? Or do we need new conceptual (and maybe also legal) tools for understanding (and maybe also regulating) them? While Kocka emphasizes that the main problem with today’s financial markets is the lack of regulation on a global scale, one wonders whether he does enough to capture the specific features of this “financialisation.”
Continuing his journey with an overview of the changing fate of wage labour in capitalism, Kocka reminds us that the nineteenth century’s “social question” about the relation between labour and capital has by no means been solved. Rather, it has been transformed into a global question, with some countries providing cheap and mostly unregulated labour for others. Finally, Kocka discusses the relation between market and state. As he emphasizes in particular, capitalism has never existed without state structures, but it has co-existed with state structures of very different kinds. The “neoliberal” phase in the relationship between market and state that started in the 1970s looks less inevitable, and more historically contingent, if put into the context of the shifts that this relationship has already gone through in the history of capitalism.
Kocka provides a nuanced overview, written sine irae et studio, neither glorifying capitalism nor condemning it whole-sale, balancing its violent and exploitative tendencies with its ability to raise the standard of living for societies as a whole if it is surrounded by suitable political institutions. While readers are likely to know some of the broad lines of the book, there are many surprising details (e.g., the role of Buddhist monasteries as money lenders, p. 25) and fascinating interconnections that he brings to the light.
For political philosophers who are interested in questions about the economy, there is one fundamental lesson to be drawn from Kocka’s account. Capitalism has existed in many shapes and forms—not only in the “varieties” of liberal and coordinated market societies, but also within different political systems, with different cultural and religious backgrounds. While many writers, from Marx onwards, have diagnosed capitalism with a necessary tendency towards its own destruction, Kocka reminds us of the variability and longevity of capitalism up to today. He seems to see no chance for a speedy farewell to capitalism, but neither does he give his readers reasons to think that the current system could not be improved. The obvious challenge, as he repeatedly points out, is the lack of transnational political structures for regulating excessively profit-driven global value chains.
Some forms of capitalism have been better, and some have been worse at securing a good standard of living for the broad masses. This, by the way, seems to be Kocka’s own criterion for evaluating different forms of capitalism. Although he refrains from making explicit value judgments, he holds that we need to find new ways of “embedding” the financial capitalism that drives today’s economies, and he concludes that “it is still open whether this will be possible” (99). He is unable to hide his sympathies for those who simply try to make a living by working hard and hoping for a better future for their children. These are sympathies that many political theorists are likely to share. Kocka concludes by evoking the crucial role that critical voices have played in the history of capitalism. It is almost as if Kocka, as a historian committed to a neutral position, wants others to be more critical in order to counterbalance the excesses of the most recent developments of capitalism. This is also a message many political theorists are likely to be interested in.