Where did capitalism come from? No, before that, what is capitalism? No, before that, what is a capitalist? Not simply someone rich and powerful. Not just someone engaged in trade. Not just someone working on improving productivity. Certainly not just a feudal lord, or a master in a guild, or a burgher, or the owner of a ship. Someone whose whole position in society is predicated on capital, that is, on finance and owning various kinds of means of production, and pushing to increase productivity and thus profit, and exploiting wage labor. And yet not slavery, where there are no wages, but particularly mechanized production all the way down to the cotton gin.
Our book today is The Origin of Capitalism: A Longer View, by Ellen Meiksins Wood. She begins by arguing, for three chapters, that the question is ill-posed, because almost every economic historian has begun by assuming that something like capitalism has always existed in various forms of trade and accumulation of wealth, and that its full development was simply a matter of removing obstacles. To the contrary, she points out that capitalism comes from a revolutionary reorganizing of society in many stages, none of them in any way inevitable, and all of them depending on highly local conditions and developments of law, custom, philosophy, and much more, and all of them first converging in England.
Then we can talk about what did happen.
A critical stage in this long development was enclosing fields to raise sheep for wool to be spun and woven in factories. This threw many poor people off the land, and left them with little recourse but to work in the new factories in the cities. Then the woolen cloth could be sold all over England, and even exported, with profits plowed back into raising agricultural and industrial productivity—but not the workers’ pay. And yet workers had to be able to pay for food, shelter, furniture, cooking equipment and much more, which new factories took to turning out in quantity for the new mass market.
2. The English Enclosures
John Locke, best known for supporting human rights, is a villain in this piece, arguing that civilized Christians could approppriate land and natural resources in many parts of the world to themselves regardless of local government and custom, or even their own governments in the home country. The only requirement was that they be able to profit from their ill-gotten gains. Many others joined him in this entitled evil.
From enclosures and textile mills there is a nearly straight line to the steam engine, ironworks, railroads, the London financial markets and banks, London becoming the largest city in the world, Poor Laws, debtor’s prisons, Dickens, and Marx.
But again we must pause and step back. How was enclosure possible in England, but not anywhere else in Europe?
None of the early economic activity in Britain counts as an explanation. Certainly not widespread Stone Age flint trading from chalk formations, nor the tin trade from Cornwall that was a mainstay of the Bronze Age. Not the Romans, not the Angles and Saxons. Wood puts the first decisive development in the Norman Conquest of 1066. William the Conqueror tossed out all of the Saxon nobility, and parceled out all of England among his followers, with direct feudal obligations to himself. This unified feudal system was unlike anything anywhere else in Europe, where feudal relations were ever-shifting patchworks.
The English Parliament frequently played a decisive role in a way that Kings did not. The House of Lords was for the aristocracy, and the House of Commons was filled with their younger sons and brothers, as with Winston Churchill much later, and with burgesses. This legislature, unlike any other in Europe, was well placed and strongly minded to pass laws on land ownership, including enclosure and dismantling the Commons, industrial subsidies, and laws against labor and the jobless.
The Spanish Empire gave itself over to greed for seeming wealth—South American gold, silver, and jewels, with a law that none of it could be spent outside the Empire. Adam Smith devoted a whole chapter of Wealth of Nations to analyzing how the resulting inflation and abandonment of agriculture and other production comprehensively destroyed the Spanish economy, culminating almost at the same time England destroyed Spanish sea power.
Also, he pointed out,
It would be too ridiculous to go about seriously to prove that wealth does not consist in money, or in gold and silver; but in what money purchases, and is valuable only for purchasing.
Marx pointed out further that wealth is not capital.
What transformed wealth into capital was a transformation of social property relations.
Wood
France gave itself over to absolute royal power and the administrative state, in which one of the most important forms of wealth was public offices. These were often available for purchase and guaranteed inheritance. The French Revolution, the Terror, and Napoleon didn’t help.
Germany and Italy did not become countries until centuries later.
The Netherlands rebelled against Spain in the Eighty Years War, and declared absolute freedom of trade. It then supported itself with grain imports from the Baltics, and trade in luxuries (including imported spices from the Dutch East Indies), and exports of meat and cheese. It did not develop industry until much later. Belgium stayed with the Catholic Spanish Empire, and both economies went down together.
And so on, downhill to the present day. I will pass over imperialism and slavery, and other well-known ills that Wood gives attention to. There were also assorted financial panics over the centuries, most often when industry or finance created an asset bubble, aka a self-powered Ponzi scheme, which Wood did not go into. Nor did she discuss hyperinflations with various original causes, turned into total disasters simply by printing ever-larger denominations of paper money, into the billions in Germany, and as high as the quintillions elsewhere.
The ethic of ‘improvement’ in its original sense, in which production is inseparable from profit, is also the ethic of exploitation, poverty, and homelessness.
Capitalism is also incapable of promoting sustainable development.
Fortunately, this turns out not to be the case.
Wood has no idea of anything but failed capitalism and failed socialism. She dismissed European Social Democracies with a wave of the hand as simply self-contradictory. But today, we in the US have Bidenomics, and numerous movements, social, legal, and political, to boost workers out of poverty and oppression and redefine the corporation, too many and too important to try to detail here. Globally, we are well on the way to ending Global Warming, poverty and oppression of all kinds, overpopulation, ignorant and entitled bigotry, a number of dread diseases, and idiotic wars, with the usual entitled idiots standing in the way.
Certainly unchecked, mindless capitalism sees a business case for destroying the planet, as in the cartoon at the top of this post, and this one.
But see my Renewable Tuesday posts, and Good News Roundup’s Boosting Biden posts five days a week, among others.
Acknowledgment
My thanks to diomedes77 for pointing me to this book.
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