Capitalism: A Global History
In this sweeping work, Sven Beckert demonstrates that far from being a European-centric system, capitalism had a global origin. Capitalism, the author demonstrates, connected distant places and evolved through a combination of state power, warfare, and coercion. He defines capitalism as an “economic logic in which privately owned capital is invested with the primary goal of producing more capital.”
Beckert, the Laird Bell Professor of History at Harvard and the Bancroft Prize-winning author of the Empire of Cotton (2015), assembles a staggering amount of primary and secondary research on several continents. He presents his narrative in an elegant and easily comprehensible language. The work should be an insightful read on the origin and evolution of capitalism for scholars, researchers, and general readers.
According to Beckert, capitalism arose as a benign force around the 12th century among isolated merchant communities in cities like Aden, Cairo, Surat, Guangzhou, Florence, and Genoa in societies still centered around a subsistence economy. Around the mid-millennium, the declining feudal order brought capital-rich European merchants and states into a union of mutual interdependence, turbocharging capitalism "into novel spaces.” Spanish colonialism in the New World made Potosí, Bolivia, produce an estimated 60% of all silver mined in the world, enriching the Spanish monarchy while Indigenous miners succumbed to mercury, arsenic, and silica poisoning. In the Caribbean, slave labor at the sugar plantations generated enormous wealth for their European owners, fueling the Industrial Revolution.
Even after slavery was abolished, European plantation owners imported 2.2 million indentured laborers from India, China, and other countries to work under brutal conditions. Indentured-labor-generated wealth facilitated the Second Industrial Revolution, asserts Beckert.
On the Asian front, the Dutch East India Company (VOC) and the British East India Company (EIC) functioned as state-chartered entities empowered to trade, build fortifications, and wage war. While the VOC used military power to secure spice monopolies at the expense of the death or enslavement of a million people, the EIC transformed from a trading company to ruling India. An estimated $45 trillion of India’s wealth was transferred to Britain between 1765 and 1938, Beckert claims, referencing recent research. EIC also used India as a launch pad for exporting opium as a currency to redress its trade deficit with China. Capitalism has not lived up to the idealized vision of free markets of Enlightenment thinkers, Beckert writes.
By the late 19th century, Beckert narrates, European nations intensified their efforts to seek territorial control over minerals across the globe. Africa came to be viewed “as another America, lying fallow and ready to yield rich harvests.” Beckert shows that while in 1870 only 10% of Africa was under European control, by 1900 it was 90%.
The push to Africa coincided with the rise of new integrated enterprises in iron, steel, electricity, and transport, prompting Beckert to call the era “the most monumental turning point in the global history of capitalism.” The rapid expansion of industries often resulted in worker exploitation, leading to the rise of trade unions and socialist parties.
Beckert argues that the Bolshevik Revolution, the Great Depression, and nationalistic colonial movements posed the gravest threats to capitalism. In the US, the New Deal responded by expanding the welfare state, empowering trade unions, and reforming the financial system. However, in the three decades coinciding with the Oil Crisis of 1973 and the demise of the Bretton Woods Monetary System, the post-war economic order was radically restructured by a neoliberal order that privatized state enterprises, deregulated finance, and exported manufacturing to the Global South. Beckert thinks that this new order has led to skyrocketing inequality, with the top one percent share of US income roughly doubling from eight percent in 1973 to 18 percent in 2008, while millions of Americans lost their financial security and solvency.
Beckert has put together a gripping historical narrative. However, it could be strongly argued that not everything about capitalism is simply doom and gloom. Capitalism has also given rise to fair trade practices, corporate social responsibility, and employee-owned business models. Also, religious dimensions of capitalism seem to be missing from Beckert’s analysis. Historians inform us that Cistercian monks were exceptionally successful medieval entrepreneurs and innovators. Clerics were also involved in either financing Iberian explorations in the New World or even accompanying explorers in their voyages.
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⇒ Capitalism: A Global History
