Capitalism and Its Critics: A Long-Term View
Read this article about the history of capitalism. Although the term capitalism was coined in the 19th century, its practices are much older.
Theme and Definition
The following essay takes seriously that
the concept originated in Europe before moving to other parts of the
world. It takes into consideration that "capitalism" was coined as a
central concept of social criticism as well as of scholarly analysis, a
double function it has maintained, at least with some authors, up to the
present time. It deals with the strange interplay, perhaps dialectics,
between capitalism and critique of capitalism.
Although
"capitalism" only became a broadly used concept after the second half of
the nineteenth century, those who have been using it ever since do not
doubt that it could also be applied to phenomena in periods of the past
before the concept existed. I share this conviction.
In the form
of merchant capitalism, capitalism already existed in the first
millennium of our calendar, for example in Arabia, China, and Europe,
though mostly just in the form of capitalist islands in a sea of
predominantly non-capitalist relationships. In the form of finance
capitalism, capitalism has existed since the high-medieval period in
some parts of Europe; beginning in Northern Italy, and later moving its
center to Antwerp, Amsterdam, and London. In the early modern period,
West and East European agrarian capitalism as well as plantation
capitalism overseas have shaped our image of capitalism as a system of
repressive domination and exploitation, even violence. All of this
happened before industrial capitalism - starting first in England in the
eighteenth century, then in Europe and North America - became the
decisive driving force of capitalist expansion globally. In the present
era of globalization, these different types of capitalism coexist and
interact.
When sketching such a scenario, I presuppose a
definition of capitalism that is narrower than market economy in
general, but broader than industrial capitalism based on wage work en
masse. I want to emphasize decentralization, commodification, and
accumulation as basic characteristics of capitalism. On the one hand, it
is essential that individual and collective actors make use of
(property) rights that enable them to make economic decisions in a
relatively autonomous and decentralized way. On the other hand, markets
serve as the main mechanisms of allocation and coordination;
commodification permeates capitalism in many forms, including the
commodification of labor. Further, capital is central, which means
utilizing resources for investment in the present with the expectation
of higher gains in the future, accepting credit besides using savings
and returns, dealing with uncertainty and risk, and aiming for profit
and accumulation. Change, growth, and expansion are inscribed, however,
in irregular rhythms, with ups and downs, interrupted by crises.2