Abstract
The idea of a history of capitalism is an intriguing one in the sense that the gradual transition of economic systems, principally of the Western World, from medieval feudalism to the system we recognise as capitalism is an imperceptible one. This is especially so in relation to the earlier phases, making it a difficult history to express. It is also challenging because, while concepts such as ‘private property’ and ‘markets’ make up our Western sense of economic arrangements, of course capitalism does not operate in isolation of other forms of economic organisation. Indeed, in a modern Western state, capitalism seems to sit comfortably with state socialism particularly, again making a history of capitalism a difficult one to express.
This difficulty is magnified in Jurgen Kocka’s book which is the subject of this review. Kocka has built on a lifetime of study and writing in order to attempt to describe the trajectory of the development of capitalism globally as well as to condense that description in a cogent and logical way such that the reader is able to absorb the essentials while only traversing 169 pages. He does this successfully in some parts and, arguably, less so in others.
Principally, the book establishes a definition of capitalism as an economic method of organisation via an examination of what it is and also what it is not. It is necessary to have such a discussion in order to place the subsequent history in context and to ensure readers are able to reconcile their experience of capitalism with the description being given. This context is especially important because the book is very fast moving and requires the reader to keep up – any assistance in that regard is critical.
This examination considers capitalism and its drivers in an opening essay, constituting chapter 1, that ranges over the emergence of the idea and the shaping of that idea via the rendering of economic thought. Building on a discussion of Marxian, Weberian and Schumpeterian ideas in terms of the definition of capitalism, the chapter then examines the ideas of a number of economists (Keynes, Polanyi and Braudel are among the more famous) in order to arrive at a working definition. This definition is refined so that Kocka posits that capitalism comes in a number of forms, including ‘modern capitalism’ leading to ‘industrial capitalism’ and then to ‘finance capitalism’ – the current species of capitalism impacting global economic settings.
Once the scene is set in terms of the philosophy of capitalism, chapter 2 places economic history at the centre of the narrative by examining ‘merchant capitalism’ – an early form of capitalism that manifested in Western nations as well as in China and the Islamic world. The chapter considers the classic topics of international trade, banking and Italian city-states while also suggesting that, in fact, Western Europe was a latecomer to capitalism. The somewhat arbitrary end date for this period is 1500 (as good as any an end date for such a narrative), leaving chapter 3 to describe the expansion of capitalism caused by the concomitant ‘breaking out’ of Western Europe into the wider world in order to establish imperial interests.
Chapter 3 is also an extended essay describing the growth of capitalism via the now very familiar topics relating to the operation of capitalism and violence in empire building and practised by the Dutch, English and other European nations. The chapter also describes the development of modern banking and finance practices by emphasising the role of the economically successful Italian city-states as well as the rise of new methods of business organisation, including the joint stock company. Innovations pertaining to industrial organisation in the period, which is taken to have ended in 1800, together with the advent of modern slavery and plantation economies are also part of the narrative. At this point, Kocka also introduces some analysis, albeit brief, of what was really happening in relation to major players such as England and Holland.
The next logical step in this teleology is that period which Kocka calls ‘The Capitalist Era’ – the nineteenth and twentieth centuries in which the reader is galloped through the industrial revolution (with a quick side bar discussion as to what that fraught term means) and then onto the establishment, in turn, of industrial capitalism and then finance capitalism. This very broad discussion, contained in chapter 4, attempts to cover too much territory, and it is to the detriment of the volume that Kocka starts to use lists to deliver key points. This is necessary due to the sheer weight of issues needing to be dealt with in such a brief volume.
The final chapter increases the use of such lists and summaries in order to convey ideas with a view to undertaking an analysis of the discussion already had. As a conclusion to the work, it does leave the reader a little frustrated as the tip of a very interesting and significant iceberg is suggestive of something far more substantial but does not deliver – principally because it simply cannot. However, the work is weighty due to the topics and nuances covered.
Only a scholar with the reputation and catalogue of work such as Kocka can attempt what has been compiled in this volume. For the new entrant into areas of scholarship covered in this volume, including the history of economic thought, economic history and business history, this is an interesting introduction but of a very prefatory nature, and its reversion to the use of lists in the final phases detracts from the power of the narrative in the first half. However, overall the book is an important one. It describes the many facets of philosophy that are needed to be understood in order to appreciate the realities of economic organisation in the modern world, and it gives pause for thought in relation to the real policy discussions that perhaps should be undertaken. Overall, the volume is a must for the library of a business historian as well as business scholars with a drive to understand how we got to where we are by accessing a single volume from which to step off from.