Yeah, Mr. Green, capitalism just turns men into wolves.
Your purportedly free markets only make slaves of us all.
I’m going to disappoint you by being too capitalist. And I’m going to disappoint a lot of other people by not being capitalist enough. [100% guaranteed] And, I’m going to disappoint the historians by not using enough jargon.
Fortunately capitalism is all about efficiency so let’s do this, Me from College.
OKAY, LET’S TALK CAPITALISM.
So, capitalism is an economic system, but it’s also a cultural system. It’s characterized by innovation and investment to increase wealth. But today we’re going to focus on production and how industrial capitalism changed it.
So let’s say it’s 1,200 CE and you’re a rug merchant. Just like merchants today, you sometimes need to borrow money in order to buy the rugs you want to resell at a profit, and then you pay that money back, often with interest, once you’ve resold the rugs. This is called mercantile capitalism, and it was a global phenomenon, from the Chinese to the Indian Ocean trade network to Muslim merchants who would sponsor trade caravans across the Sahara.
But by the 17th century, merchants in the Netherlands and in Britain had expanded upon this idea to create joint stock companies. Those companies could finance bigger trade missions and also spread the risk of international trade. But the thing about international trade is sometimes boats sink or they get taken by pirates, [Aaarrr!] and while that’s bad if you’re a sailor because, you know, you lose your life, it’s really bad if you’re a mercantile capitalist because you lost all your money.
But if you own one tenth of ten boats, your risk is much better managed. [but is mischief managed?] That kind of investment definitely increased wealth, but it only affected a sliver of the population, and it didn’t create a culture of capitalism.
Industrial Capitalism was something altogether different, both in scale and in practice. Let’s use Joyce Appleby’s definition of industrial capitalism: “An economic system that relies on investment of capital in machines and technology that are used to increase production of marketable goods.”
Industrial capitalism developed first in Britain in the 19th century. Britain had a bunch of advantages: It was the dominant power on the seas and it was making good money off of trade with its colonies, including the slave trade. Also, the growth of capitalism was helped by the half-century of civil unrest that resulted from the 17th century English Civil War.
Now, I’m not advocating for civil wars or anything, but in this particular case it was useful, because before the war the British crown had put a lot of regulations on the economy— complicated licenses, royal monopolies, etc. —but during the turmoil, it couldn’t enforce them, which made for freer markets.
Another factor was a remarkable increase in agricultural productivity in the 16th century. As food prices started to rise, it became profitable for farmers, both large and small, to invest in agricultural technologies that would improve crop yields. Those higher prices for grain probably resulted from population growth, which in turn was encouraged by increased production of food crops.
A number of these agricultural improvements came from the Dutch, who had chronic problems feeding themselves and discovered that planting different kinds of crops, like clover that added nitrogen to the soil and could be used to feed livestock at the same time, meant that more fields could be used at once. This increased productivity eventually brought down prices, and this encouraged further innovation in order to increase yield to make up for the drop in prices. Lower food prices had an added benefit – since food cost less and wages in England remained high, workers would have more disposable income, which meant that if there were consumer goods available, they would be consumed, which incentivized people to make consumer goods more efficiently, and therefore more cheaply.
You can see how this positive feedback loop leads to more food and more stuff, culminating in a world where people have so much stuff that we must rent space to store it, and so much food that obesity has become a bigger killer than starvation.
Thanks, Thought Bubble. So this increased productivity also meant that fewer people needed to work in agriculture in order to feed the population. To put this in perspective, in 1520, 80% of the English population worked the land.
By 1800, only 36% of adult male laborers were working in agriculture, and by 1850, that percentage had dropped to 25. This meant that when the factories started humming, there were plenty of workers to hum along with them. [humming < obnoxious than whistling] Especially child laborers.
So far all this sounds pretty good, right? I mean, except for the child labor. Who wouldn’t want more, cheaper food? Yeah, well, not so fast. One of the ways the British achieved all this agricultural productivity was through the process of enclosure. Whereby landlords would re-claim and privatize fields that for centuries had been held in common by multiple tenants. [they busted up hippie communes?] This increased agricultural productivity, but it also impoverished many tenant farmers, many of whom lost their livelihoods.
Okay, for our purposes, capitalism is also a cultural system, rooted in the need of private investors to turn a profit. So the real change needed here was a change of mind. People had to develop the capitalist values of taking risks and appreciating innovation.
But capitalism isn’t without its problems, or its critics, [“haters” in the parlance of our times] and there were certainly lots of shortcomings to industrial capitalism in the 19th century. Working conditions were awful. Days were long, arduous, and monotonous. Workers lived in conditions that people living in the developed world today would associate with abject poverty.
One way that workers responded to these conditions was by organizing into labor unions. Another response was in many cases purely theoretical: socialism, [gasp, clutch the pearls] most famously Marxian socialism.
I should probably point out here that socialism is an imperfect opposite to capitalism, even though the two are often juxtaposed. [consider that before commenting maybe?] Capitalism’s defenders like to point out that it’s “natural,” meaning that if left to our own devices, humans would construct economic relationships that resemble capitalism.
Socialism, at least in its modern incarnations, makes fewer pretenses towards being an expression of human nature; it’s the result of human choice and human planning. So, socialism, as an intellectual construct, began in France in the border between Egypt and Libya.
There were two branches of socialism in France, utopian and revolutionary.
Utopian socialism is often associated with Comte de Saint Simon and Charles Fourier, both of whom rejected revolutionary action after having seen the disaster of the French Revolution.
Both were critical of capitalism and while Fourier is usually a punchline in history classes because he believed that, in his ideal socialist world, the seas would turn to lemonade, [wut] he was right that human beings have desires that go beyond basic self interest, and that we aren’t always economically rational actors. [truth] The other French socialists were the revolutionaries, and they saw the French Revolution, even its violence, in a much more positive light.
The most important of these revolutionaries was Auguste Blanqui, and we associate a lot of his ideas with communism, which is a term that he used. Like the utopians, he criticized capitalism, but he believed that it could only be overthrown through violent revolution by the working classes.
However, while Blanqui thought that the workers would come to dominate a communist world, he was an elitist. And he believed that workers on their own could never, on their own, overcome their superstitions and their prejudices in order to throw off bourgeois oppression.
[interesting] And that brings us to Karl Marx, whose ideas and beard cast a shadow over most of the 20th century. That’s why hardcore Marxists are literally known as “Bearded Marxists.” [not to be confused w/ “Mulleted Marxists” from the 80’s] These days, that’s an insult. But you know what, Karl Marx, when I look back at history, I prefer the bearded communists.
Let’s talk about some communists who didn’t have beards: Mao Zedong, Pol Pot, Kim Jong-il, Joseph freakin’ Stalin with his face caterpillar.
So, yeah, Karl Marx’s beard, it’s my great regret to inform you that there are some paltry beards trying to take up the class struggle these days. Best Wishes, Marx was above all a philosopher and a historian.
It’s just that, unlike many philosophers and historians, he advocated for revolution. His greatest work, Das Kapital, sets out to explain the world of the 19th century in historical and philosophical terms.
Marx’s thinking is deep and dense and we’re low on time, but I want to introduce one of his ideas, that of class struggle. So, for Marx, the focus isn’t on the class, it’s on the struggle.
Basically Marx believed that classes don’t only struggle to make history, but that the struggle is what makes classes into themselves. The idea is that through conflict, classes develop a sense of themselves, and without conflict, there is no such thing as class consciousness.
So, Marx was writing in 19th century England and there were two classes that mattered: the workers and the capitalists. The capitalists owned most of the factors of production (in this case, land and the capital to invest in factories). The workers just had their labor. So, the class struggle here is between capitalists, who want labor at the lowest possible price, and the workers who want to be paid as much as possible for their work.
There are two key ideas that underlie this theory of class struggle. First, Marx believed that “production,” or work, was the thing that gave life material meaning. Second, is that we are by nature social [St] animals. We work together, we collaborate, we are more efficient when we share resources. Marx’s criticism of capitalism is that capitalism replaces this egalitarian collaboration with conflict. And that means that it isn’t a natural system after all. And by arguing that capitalism actually isn’t consistent with human nature, Marx sought to empower the workers.
That’s a lot more attractive than Blanqui’s elitist socialism, and while purportedly Marxist states like the USSR usually abandon worker empowerment pretty quickly, the idea of protecting our collective interest remains powerful. That’s where we’ll have to leave it for now, lest I start reading from The Communist Manifesto. [noooooo!] But, ultimately socialism has not succeeded in supplanting capitalism, as its proponents had hoped.
In the United States, at least, “socialism” has become something of a dirty word. So, industrial capitalism certainly seems to have won out, and in terms of material well being and access to goods and services for people around the world, that’s probably a good thing.
And this, I would argue, is where Marx still matters. Is capitalist competition natural and good, or should there be systems in place to check it for the sake of our collective well-being?
Should we band together to provide health care for the sick, or pensions for the old? Should government run businesses, and if so, which ones? The mail delivery business? The airport security business? The education business?.
Those are the places where industrial capitalism and socialism are still competing. And in that sense, at least, the struggle continues.