Abstract
Reviewed by: Willie Thompson, South Shields, UK
This history of capitalism as an economic and social reality is a two-volume text with multiple authors, numbering 41 distinguished academics in their respective fields. Their discussion has a global reach and few areas of the world or historical epochs escape examination of their relation to capitalism. Both volumes possess many merits, though neither are exempt from a number of shortcomings. It is claimed that ‘the contributors … have created a new meta-narrative that contrasts with the existing treatments of the history of capitalism’ (Vol. I, 16).
The project of producing this history commenced in 2005, at a time when a particular version of the socio-economic system known as capitalism (it is noted here that the name was coined by its opponents) appeared to have reached a position of virtually unchallenged success and dominance, flourishing everywhere on the planet. The text was completed in the wake of the greatest calamity the system had encountered for nearly a century, and the editors note how this unexpected intrusion demanded a questioning of their earlier perspectives, and provokes, according to Larry Neal in the introduction to Volume I, ‘the question of … whether capitalism as an economic system can be sustained’ (1).
The difficulty of agreeing upon a precise definition of the concept is also acknowledged. Neal suggests that ‘Capitalism … can be defined usefully as a complex and adaptive economic system operating within broader social, political, and cultural systems that are essentially supportive’ (Vol. I, 6). He does not quote its Marxist definition as generalized commodity production in which labour power itself is a commodity, but ends the introduction with the remark that, ‘Perhaps Marx was correct when he identified the British creation of a truly national debt … servicing it with specific taxes after 1688 as the key element in the rise of modern capitalism!’ (Vol. I, 21).
With a couple of exceptions, discussed below, all the chapters are informative and well argued, examining variously, during a period of over four thousand years, most aspects of capital movements and usage throughout the world, including their agrarian, industrial, commercial and financial aspects as well as their social and political impacts (though the arts, whether popular or elite, do not feature much). The contributors are based in academic institutions of 14 different countries; unsurprisingly, the USA and the UK predominate. The paper is of high quality and the footnotes are at the foot of the page, as they should be, instead of bunched together at the end. Although it is a Cambridge University Press publication, the spelling is American rather than British English.
Volume I: The Rise of Capitalism: From Ancient Origins to 1848
The blurb at the beginning of this volume remarks that it ‘provides a comprehensive account of the evolution of capitalism from its earliest beginnings’. Starting with possible distant origins in ancient Babylon, successive chapters trace capitalism’s progression up to ‘the “Promised Land” of capitalism in America’.
Indeed, the volume discusses economic development from deep antiquity to the mid-nineteenth century in the Middle East, China (more of a commercial society than we might imagine), India, ancient Greece, the Roman Empire; then the early modern developments in Italy and the Low Countries, where many historians would place capitalism’s origins: ‘central northern Italy witnessed the emergence of a new urban and mercantile society’ (304). The examination next proceeds to cover North America and Latin America, Africa and the beginnings of industrialization in Britain and Europe, while alongside these themes the volume also discusses earlier Eurasian-wide commercial traffic (it is suggested that the famous Silk Road is overrated) and subsequent global connections and relationships.
The text might suggest to a reader that the initial nine chapters are analyses of general economic history in specific locations rather than accounts and explanations for the emergence of capitalism, though no doubt it could be argued that the long-term economic conditions which permitted capitalism to develop as it did have to be addressed as a starting point, and in these chapters they certainly are, very effectively on the whole. There are noticeable omissions, however. In Chapter 9, entitled ‘Markets and Coercion in Medieval Europe’, there is no mention of the Hanseatic League, undoubtedly the most coercive trading institution of the European medieval centuries. In relation to early modern Europe similarly, the Fugger and Welser dynasties go unnoticed despite their enormous importance for commerce and banking in central Europe – and beyond.
Particularly interesting in this volume is C. Knick Harley’s ‘British and European industrialization’, an impressive summary (which he categorizes as an ‘immodest aim’) of this momentous process. It can be argued however that despite his observing that, ‘In the long run, the steam engine was probably the most important technological development of the classical industrial revolution’ (508) and acknowledging that it ‘revolutionized power supply’, there is insufficient appreciation of the world-transforming impact of the capacity to release the energies locked up in fossil fuels. He remarks that ‘Many will object to placing much weight on [calculations of growth]’ (512), though he defends that approach (he himself is a devotee of ‘cliometrics’). Nevertheless, a critic could argue that there is in this context an overemphasis on quantitative growth at the expense of qualitative change.
Volume II: The Spread of Capitalism: From 1848 to the Present
The opening blurb states that that this volume ‘provides an authoritative reference on the spread and impact of capitalism across the world, and the varieties of responses to it … a wide geographical coverage and strong comparative outlook’. It covers not only industry and industrial manufacture, the most spectacularly dramatic of the global developments, but agriculture, finance, legal regulation, and forms and concentration of capital ownership, noting that ‘A façade of pluralism and competition can thus disguise a monolithic concentration of corporate control’ (202). Colonialism, labour movements, relevant ideologies, including critiques of capitalism, welfare and future projections are also addressed. Developments in communication, however, apart from railways and to some extent automobiles, are rather neglected. Telephones and radio are barely touched upon; television and, astonishingly, advertising not at all. Computers are treated very summarily. The editors and authors could argue of course, fairly, that there is insufficient space to include everything relevant.
The overall theme of this volume, as represented by the chapter authors, is that from the middle of the nineteenth century up to the outbreak of the First World War capitalist structures and practices spread from capitalism’s core locations in the Old and New Worlds to cover practically the entire globe, bringing with it, despite occasional blips and bad news for some sectors such as British agriculture, continuous economic growth. At the same time, however, ‘large-scale official borrowing necessitated a convergence of foreign policies’ (277) – with calamitous results. Then between 1914 and the Second World War, partly on account of war’s destructiveness and partly because of intrinsic contradictions in its previous mode of operation, with the gold standard as the principal culprit, capitalism was in retreat, with its ideologists losing confidence, and was strongly challenged by labour movements and the rival economic model represented by the Soviet Union.
Following 1945, different structures such as the IMF and the World Bank were put in place with the power of the USA behind them – a period known as the Bretton Woods era. These initiatives were accompanied by expanded state control in Western Europe over industry and finance, all combined with sources of cheap raw materials, principally oil. In that economic climate, capitalism flourished in what used to be designated as the First World, and gained popular legitimacy there, though one important aspect – the European Economic Community – is dealt with in five lines, and the EU only very briefly and in the closing chapter. Meanwhile, communities and states in the then termed Third World inclined more towards socialist or communist solutions.
Nevertheless, a gold standard of sorts still prevailed in these years, since the world reserve currency, the US dollar, remained linked to gold. All that changed in the early 1970s when that link was severed, was that the Bretton Woods system abandoned and oil prices accelerated dramatically. Over the next two decades, neoliberalism became the order of the day in the capitalist world, which now meant everywhere on the globe, as the rival system collapsed or, as in China, moved in a capitalist direction (though as is indicated here, in the chapter on ‘Enthusiasts, opponents and reformers’, not altogether to the extent sometimes assumed).
Bretton Woods was replaced with the notorious ‘Washington Consensus’, examined here by Jeffry Frieden and Ronald Rogowski and in the concluding chapter by the editors. It demands that governments exercise fiscal ‘responsibility’, cancel economic regulation and privatize public assets. Combined with new technologies that regime opened up marvellous economic opportunities – for capitalists. Frieden and Rogowski note that: … in close parallel with the earlier orthodoxy of the gold standard, the ‘consensus’ spawned zealots: in this case believers in perfectly efficient markets, perfectly rational actors, deregulation that compromised even prudential supervision of banks or elementary guarantees of public safety. The market could only shower blessings on mankind: there would be rapid and sustained growth, corrupt markets would be shunned … hence a hitherto unknown smoothing of markets. In short no surprises, no bubbles, no slumps. This time indeed it was different. Except that it wasn’t. (421)
The two most disappointing chapters in the two volumes are those of Mark Harrison and Leandro Prados de la Escosura. The former’s chapter title is ‘Capitalism at War’, but this is misleading. The reader might expect an analysis of how capitalism and capitalist institutions have performed in warfare, particularly during the two major wars of the twentieth century, but that is not offered. The chapter instead is prefaced with a quote from Béla Kun that ‘Capitalism means war’ and is devoted to a very unconvincing attempt at refuting it. Harrison’s perspective appears to suggest that capitalism and politics inhabit different universes. Prados, in ‘Capitalism and Human Welfare’, aims to measure human welfare beyond basic material needs, a worthy subject, but does so by means of largely incomprehensible equations and charts, leaving the reader little better informed.
Overall Assessment
Undeniably these two volumes amount to an impressive achievement, but naturally cannot avoid imperfections, some additional to those mentioned above. The text is not free from typos and occasional dubious syntax, and the index is incomplete.
Very noticeable is the absence of any discussion of most previous writers on the history of capitalism, particularly of its origins. Robert Brenner is considered, but Maurice Dobb, Paul Sweezy, Immanuel Wallerstein, Ellen Wood and Giovanni Arrighi are ignored. Most astonishing is the omission of Ferdinand Braudel and his trilogy, 1931 pages long in the English edition, Civilization and Capitalism.
Running through all the chapters is the sense that capitalism was in some manner the human destiny, that its emergence in history sooner or later had a certain inevitability. That is a respectable argument, but is open to question. If such had been the case, then China should have seen its first appearance – all the necessary components were in place there except the appropriate culture. The social character of the Celestial Empire proved an insurmountable obstacle. That the UK was the pioneer locus of capitalism was due not only to its material endowments but the fact that its socio-political culture was favourable. The world could otherwise have remained stuck for centuries or forever in an era of dependence upon natural power sources – wind, water and muscle, as China did until Europe intruded. That intrusion was a violent one, and more broadly it can be suggested that this History insufficiently emphasizes the sheer violence that has been intrinsic to capitalism, as much or more than other socio-economic systems.
With all reservations made however, any reader will learn a great deal from these volumes and at the same time find their understanding significantly enhanced. The Cambridge History of Capitalism is to be recommended.