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A history of capitalism, 1500-1980.

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.

The end results of these revolutions varied tremendously because of the variety of colonial economies. Britain's northern colonies in the Americas had independent, broad-based economies comprising agriculture, commerce (in the triangular trade), and manufacturing based on local raw materials. By 1776 one third of England's fleet had been constructed in the northern colonies. Consequently when those colonies won their political independence, they already were well on the way to economic independence as well. By contrast, England's southern colonies and the Iberian colonies in Latin America were born economically subservient because of their concentration on monoculture type of plantation exports dependent completely on European markets. Hence the eventual development of Anglo-America into the heartland of the industrialized capitalist first world, while Latin America remains to the present an underdeveloped third world region.

As regards organization, the book is divided into two parts. Part 1, "From Gold to Capital,' consists of three chapters. The first describes the origins of capitalism; the second deals with the three eighteenth-century revolutions (American, French, and Industrial); and the third deals with the development of industrial capitalism between 1800 and 1870. Part 2, "The Era of Imperialism,' comprises chapters four to six. The fourth chapter covers the period from the depression of the 1870s to the First World War, the fifth is entitled "The Great Upheaval, 1914-45,' and the final chapter deals with "Capitalism's Great Leap Forward, 1945-80.'

Enlightening as Beaud's historical survey is, perhaps his most significant contribution is his appraisal of the contemporary would in his last chapter. After analyzing the factors behind the "Great Leap Forward,' the author notes that during the quarter century after 1945, world industry increased at an average annual rate of 5.6 percent, and world trade at an average rate of 7.3 percent. The capitalist countries were responsible for three fifths of world industrial output and two thirds of world trade. Real wages rose substantially, making possible a mass consumerism that orthodox economists such as Paul Samuelson proclaimed to be self-perpetuating. Beaud aptly pinpoints the Achilles' heel of this consumerism by citing an auto worker in Studs Terkel's Working. After deseribing new welding robots that "never tire, never complain, never miss work,' the worker adds: "Of course they don't buy cars. I guess General Motors doesn't understand that argument.' (p. 214)

The comment of the GM worker recalls an equally significant observation made by Henry Ford in the 1920s: "Our own sales depend in a measure on the wages we pay. If we can distribute high wages, then that money is going to be spent and it will serve to make storekeepers and distributors and manufacturers and workers in other lines more prosperous and their prosperity will be reflected in our sales.' (p. 157) Ford's insight was ignored, and the price paid was the Great Depression of the 1930s. Ford's present-day successors in Detroit obviously lack his insight, despite their degrees from law and business schools, which raises the question what the price will be this time around.

Equally disturbing is Beaud's analysis of the impact of mass consumerism on daily life. It warrants reflection:

Let us caricature things, starting only from what already exists. Nurseries are functioning where the children are under electronic surveillance; schools are multiplying where each child, instead of a wooden table and a blackboard, has in front of him a video screen and a keyboard to question the computer; an "electronic house' has been conceived and built which wakes up the occupants (after having prepared coffee and toast), controls the level of food supplies, can heat up meals, answer the phone, record television programs on demand, watch and deter unexpected or undesirable visitors. . . . Electronic games multiply and diversify. . . . Electronics and telecommunications will profoundly change modes of access to various sorts of information: telephone (railroad, weather, tourist), daily news (general or specialized), scientific or technical data, mail order catalogues, and even mail. . . . There will be new technologies and new organization of work, new consumption, and new ways of living. One may imagine that this could lead to the establishment of permanent control over each worker whose training, work, and leisure would be systematically analyzed and programmed. Most probably there will be an extreme split in the way workers are mobilized, with, at one pole, the strata and the categories who are perfectly integrated, totally at ease in a universe of programs, keyboards, screens, synthetic voices, and robots, and at the other pole, the groups and strata who refuse and reject this world, becoming quite totally marginal. (pp. 214-215)

Beaud suggests two possible outcomes of the current world crisis. One is a multiplication of ongoing conflicts, culminating eventually in a third world war. But he considers it "more probable that in this, as in other crises, capitalism will undergo profound mutations and achieve new advances.' In the latter case he foresees the United States and the USSR "reaching a point where a new worldwide Yalta will appear to them preferable . . . to pursuit of an endless conflict.' (p. 206)

Finally Beaud notes that capitalism today, as in the past, is "both creative and destructive.' To tap its creativity and progress toward socialism, it is essential to "widen, strengthen, and deepen' our democracy and individual freedoms. As for third world peoples, they face the infinitely more difficult struggle "against the overlapping domination of imperialism, of old exploiting classes and new exploiting classes . . . against the effects of modern pillage: poor production, nourishment, and health; mortality and illiteracy.' (p. 229)

The prospect appears comfortless, but the author concludes his preface to this English edition on an upbeat note: "The socialists, the humanists, of the nineteenth century dared to dream a moral, just, free, and unified society. Much has already been accomplished to that end. Let us seize the opportunity that the present crisis affords to advance a little bit further.' (p. 10)
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Author:Stavrianos, Leften Stavros
Publication:Monthly Review
Article Type:Book Review
Date:Oct 1, 1984
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