I recently bought a book (no news there!) and faced a panoply of choices as to price, delivery speed, format, and book quality. Multiple websites provided a great demonstration of the ubiquitousness of capitalism at work in modern life. Consumers’ preferences are dissected and products designed to meet those particularities. So, it’s no small irony that the book in question was Sven Beckert’s new doorstop (1000+ pages) providing a comprehensive history of “Capitalism.” As we said when I was in the law biz: “res ipsa loquitur” (“the thing speaks for itself”).
As a work of history, “Capitalism” is well thought-through and remarkable in its research, if rather too heavy for the casual reader. Beckert shows that capitalism was a global phenomenon, drawing on practices and experiences far beyond the usual “its all about Europeans” (including the US) framework. He also shows that it has deep roots, extending far earlier than the usual early-modern/industrial revolution/robber barons/globalization storyline. After all, as I have noted elsewhere, greed and profit are hardly modern inventions. He does a good job, as well, in blowing up the myth of “laissez-faire,” the idea that large businesses have developed apart from and in spite of governmental activity.
Beckert applies a phenomenological focus; i.e., he concentrates on the actual practice of “capitalists.” Marx merits less than 30 mentions and other theorists (pro and con) are similarly sidelined. I would have preferred a more inclusive approach, but his is a legitimate choice and his story benefits from its grounding in the real world. My bigger concerns are that 1) he doesn’t pin down the definition of the concept he’s writing about, and 2) he doesn’t wrestle with how the capitalist mentality spread and swamped other values-based cultural systems. There is, to be sure, a reference to capitalists’ focus on markets/commodities/money, but there is something in modern commercial practice that is different from the mindset of traders a thousand-or-two years ago, and he doesn’t grab on to it.
This, to me, is the central issue. Capitalism has been a principal strand in the story of the modern world, whether economic, political, or ideological. Historians in general, however, are loath to take on psychological changes, however fundamental they might be. There’s good reason for this, since the evidence is sparse and largely inferential and there’s always a risk of self-projection. And yet, without understanding or at least suggesting some ways in which historical actors were motivated, we can’t come close to understanding how history came about.
As I said a few weeks ago (Capitalism and Me, 012326), I see capitalism as a culture (i.e., a socio-economic-epistemic system) in which we define ourselves and evaluate others and determine how to act across our lives principally from an economic perspective: morals are secondary to money.” In contrast, the practices and institutions which manifest this mentality are what Beckert is talking about.
It is important not to make moral judgments about these institutions per se. Lord Acton famously observed that “power corrupts and absolute power corrupts absolutely.” In a similar vein, St. Paul found money to be the “root of all evil.” They were, however, both wrong. A critic of Acton saw that power itself was not the corrupting source, but rather the vehicle by which human corruption was revealed. Similarly, we can see that money, too, is just the means by which evil is exercised. The fault, in other (Shakespeare’s) words, is not “in our stars” (or our wallets or our ability to affect others), but “in ourselves.” The economic power which the practice of capitalism concentrates in “capitalists” merely allows them to demonstrate their moral (dis-)abilities and their unwillingness to face the complexities (These fundamentals of human nature are essential to parsing the semantic soup that surrounds the term “capitalism.” I will have more to say in a later posting about the different ways in which that term and its cognates, “capital” and “capitalist” are used.)
It's not difficult to see the practice of “capitalism” as the dominant economic system of the modern era. As with other human activities, its significance is the product of the confluence of means, motive and opportunity. The motivation of capitalists, in my framing, is based in the deeply-rooted nature of humans—a desire for security (both physical and psychological) and the many ways in which that desire is overextended, as most pithily captured in the traditional deadly sins of greed, envy, gluttony, and pride. The laissez-faire mythos may have some nuggets of truth, but it’s mostly about the desire of “capitalists” to claim all the credit for the work of many; in other words: ego (also not a new story).
So, from a historical perspective, the rise of practical capitalism is more a function of the means and opportunity, which are largely exogenous factors, and which we can parse into three angles. First, institutions and practices: banks, corporations, trading networks, advertising, governmental actions, etc. Second, new technologies which have created new productivity and economies of scale and scope (not least in terms of transportation and communications). Third, population growth and density which have created large numbers of consumers, thereby providing the demand which pays prices well above (the new, lower) marginal cost of goods (i.e, more profitability). These factors are the normal materials of historical analysis and we can trace their manifestation, at both the personal and societal levels. But we can’t forget that without the psychological urge, there would be no capitalism at all.
Beckert focuses on these exogenous factors, principally the first and second. I’ve got a bunch more reading lined up on that score and related topics; perhaps someone has taken on this moral/psychological angle in historical perspective. I’ll be back with more on the semantics, the significance, and the solutions—in due course.
As a work of history, “Capitalism” is well thought-through and remarkable in its research, if rather too heavy for the casual reader. Beckert shows that capitalism was a global phenomenon, drawing on practices and experiences far beyond the usual “its all about Europeans” (including the US) framework. He also shows that it has deep roots, extending far earlier than the usual early-modern/industrial revolution/robber barons/globalization storyline. After all, as I have noted elsewhere, greed and profit are hardly modern inventions. He does a good job, as well, in blowing up the myth of “laissez-faire,” the idea that large businesses have developed apart from and in spite of governmental activity.
Beckert applies a phenomenological focus; i.e., he concentrates on the actual practice of “capitalists.” Marx merits less than 30 mentions and other theorists (pro and con) are similarly sidelined. I would have preferred a more inclusive approach, but his is a legitimate choice and his story benefits from its grounding in the real world. My bigger concerns are that 1) he doesn’t pin down the definition of the concept he’s writing about, and 2) he doesn’t wrestle with how the capitalist mentality spread and swamped other values-based cultural systems. There is, to be sure, a reference to capitalists’ focus on markets/commodities/money, but there is something in modern commercial practice that is different from the mindset of traders a thousand-or-two years ago, and he doesn’t grab on to it.
This, to me, is the central issue. Capitalism has been a principal strand in the story of the modern world, whether economic, political, or ideological. Historians in general, however, are loath to take on psychological changes, however fundamental they might be. There’s good reason for this, since the evidence is sparse and largely inferential and there’s always a risk of self-projection. And yet, without understanding or at least suggesting some ways in which historical actors were motivated, we can’t come close to understanding how history came about.
As I said a few weeks ago (Capitalism and Me, 012326), I see capitalism as a culture (i.e., a socio-economic-epistemic system) in which we define ourselves and evaluate others and determine how to act across our lives principally from an economic perspective: morals are secondary to money.” In contrast, the practices and institutions which manifest this mentality are what Beckert is talking about.
It is important not to make moral judgments about these institutions per se. Lord Acton famously observed that “power corrupts and absolute power corrupts absolutely.” In a similar vein, St. Paul found money to be the “root of all evil.” They were, however, both wrong. A critic of Acton saw that power itself was not the corrupting source, but rather the vehicle by which human corruption was revealed. Similarly, we can see that money, too, is just the means by which evil is exercised. The fault, in other (Shakespeare’s) words, is not “in our stars” (or our wallets or our ability to affect others), but “in ourselves.” The economic power which the practice of capitalism concentrates in “capitalists” merely allows them to demonstrate their moral (dis-)abilities and their unwillingness to face the complexities (These fundamentals of human nature are essential to parsing the semantic soup that surrounds the term “capitalism.” I will have more to say in a later posting about the different ways in which that term and its cognates, “capital” and “capitalist” are used.)
It's not difficult to see the practice of “capitalism” as the dominant economic system of the modern era. As with other human activities, its significance is the product of the confluence of means, motive and opportunity. The motivation of capitalists, in my framing, is based in the deeply-rooted nature of humans—a desire for security (both physical and psychological) and the many ways in which that desire is overextended, as most pithily captured in the traditional deadly sins of greed, envy, gluttony, and pride. The laissez-faire mythos may have some nuggets of truth, but it’s mostly about the desire of “capitalists” to claim all the credit for the work of many; in other words: ego (also not a new story).
So, from a historical perspective, the rise of practical capitalism is more a function of the means and opportunity, which are largely exogenous factors, and which we can parse into three angles. First, institutions and practices: banks, corporations, trading networks, advertising, governmental actions, etc. Second, new technologies which have created new productivity and economies of scale and scope (not least in terms of transportation and communications). Third, population growth and density which have created large numbers of consumers, thereby providing the demand which pays prices well above (the new, lower) marginal cost of goods (i.e, more profitability). These factors are the normal materials of historical analysis and we can trace their manifestation, at both the personal and societal levels. But we can’t forget that without the psychological urge, there would be no capitalism at all.
Beckert focuses on these exogenous factors, principally the first and second. I’ve got a bunch more reading lined up on that score and related topics; perhaps someone has taken on this moral/psychological angle in historical perspective. I’ll be back with more on the semantics, the significance, and the solutions—in due course.
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