A history of capitalism, 1500-1980. - book reviews

Monthly Review, Oct, 1984 by Leften S. Stavrianos

A History of Capitalism, 1500-1980

This important book fulfills an urgent need. Capitalism has been the rock foundation of human history during the past five centuries, yet little has been written about it outside Marxist historiography. Even the word itself has been avoided, along with other words, such as "class' and "class struggle,' which might be associated with Marxism. After such skittishness, it is refreshing to open a book that begins by stating forthrightly that "one cannot understand the contemporary period without analyzing the profound upheavals which the development of capitalism has brought about in societies throughout the world.' (p. 13) The author, professor of economic science at the University of Paris VIII at Vincennes, then proceeds to unfold a sophisticated analysis of the evolution of capitalism, showing that it is "simultaneously economic and political and ideological; simultaneously national and multinational; simultaneously liberating and oppressive, destructive and creative.' (ibid.)

After several abortive beginnings in the Mediterranean in the fourteenth and fifteenth centuries, capitalism finally took root in Northwest Europe in the sixteenth century. The essence of the new social system was its inherent drive for profit from privately owned and privately invested capital, which determined what goods were produced and how they were distributed. The uniqueness of capitalism was not that it used money, but rather that it used it as capital to make profit. The unceasing investing and reinvesting of profits gave capitalism its built-in dynamism. As Joseph Schumpeter noted, "Stationary capitalism is impossible.' So capitalism rapidly expanded its operations from a local scale, to national, to global, and currently planetary, with industrial operations getting under way in outer space.

Those who had the misfortune to be in the way of this expanding capitalism were mercilessly ground down. A character in Thomas More's Utopia (1516) observed that "as long as there is private property and while money is the standard of all things, I do not think that a nation can be governed either justly or happily.' (p. 22) Yet more than three centuries later, Karl Marx, looking back over the mistorical role of capitalism, wrote in his Communist Manifesto (1848) that it "has created more massive and more colossal productive forces than have all preceding generations together.'

Because Michel Beaud surveys the entire history of capitalism, he is able to trace its various threads that run through the centuries and that comprise its rich historical tapestry. One thread is technological: the evolution from the compass and firearms and new ships of the late Middle Ages, to the improved manufacturing of cotton cloth in the sixteenth, seventeenth and eithteenth centuries, to the steam power and labor-saving machines of the Industrial Revolution, to electricity and the internal combustion engine of the late nineteenth century, to today's new energy sources and labor-replacing machines. With each technological breakthrough, capitalism became stronger economically and militarily, and gained control over larger portions of the globe. Different states were dominant during these various stages, so that another thread that Beaud traces through the centuries is political. Spain was the leader in the sixteenth century, Holland in the seventeenth, and France and Britain fought for supremacy in the nineteenth. The 1763 Treaty of Paris marked the emergence of Britain as the dominant global power. Horace Walpole sensed the significance of what was happending when he remarked: "Burn your Greek and Roman books, histories of little people.'

Another thread that Beaud traces is the fluctuating class relationships. The new merchant class first took shelter under royal authority against the nobility. At this early stage the bourgeoisie accepted the "mercantilist compromise' to promote their economic interest as well as those of the monarchy. In time the bourgeoisie felt strong enough to confront royal absolutism with new ideas of laissez faire and free consent. Hence the English Revolution in the seventeenth century and the French in the eighteenth. With the Industrial Revolution class relationships again changed, culminating in the Bolshevik Revolution during the First World War, and other socialist revolutions following the Second World War.

Another thread in the evolution of capitalism was the expansion overseas, with its profound repercussions on the home countries as well as the colonized lands. Between 1700 and 1790 the production of export industries in England grew by a factor of 3.8, while national industries grew by a factor of only 1.4. Joint stock companies proliferated, trading in India, the East Indies, the South Seas, the Americas, the Levant, and Muscovy. This was made possible by increasing exploitation of overseas peoples. An average of 20 tons of gold were extracted every year from Spanish America between 1720 and 1780, whereas during the previous century the figure had been 10 tons at most. Likewise an average of 55,000 Africans were enslaved each year during the eighteenth century, compared to roughly 2,000 per year during the sixteenth century. Such exploitation culminated in colonial revolutions: in the Thirteen Colonies against Britain, in Latin America against Spain and Portugal, and in Haiti against the French slaveowners and their metropolitan partners.