HIST363: Global Perspectives on Industrialization

Since then another century has passed, which has brought deep changes different from what Max Weber and his contemporaries had expected. There have been far-reaching technical and organizational innovations, the digital revolution of recent decades among them. There has been an unprecedented expansion and differentiation of consumption, including mass consumption, but also pronounced socioeconomic inequality which, within our societies, has started to grow again since the 1970s. In this "century of extremes" (Eric J. Hobsbawm), people in Europe and elsewhere have experienced unprecedented social, political, and cultural upheaval, somehow related to capitalism, largely initiated by Europeans, but impacting on most other parts of the world as well, among them the deep crisis of capitalism in the interwar period facilitating the rise of fascism and World War II.

We have experienced the rise of a powerful, anti-capitalist alternative: The Soviet type of state socialism, which radicalized the rejection of capitalism in a very practical and effective way for decades, before it lost out in a worldwide conflict and imploded.

Particularly in Europe, coordinated, organized, regulated forms of capitalism were invented and made concrete with the help of organized interest groups, including organized labor, and with the welfare state as its centerpiece. The beginnings of "organized capitalism" - others prefer to speak of "coordinated capitalism" or the "Keynesian welfare state" - can be traced back to the late nineteenth century and World War I, but it really flourished in the third quarter of the twentieth century, when it proved to be very compatible with representative democracy. However, it has been questioned (though not at all destroyed) under the more market-radical, "neo-liberal" auspices in more recent decades, which have been characterized by an unproportional rise of finance capitalism and financialization.

In the latter part of the twentieth and the early twenty-first century, globalization - understood as increasing interdependence, not as increasing convergence - proceeded with accelerated speed, across borders between countries and world regions; conditioned by and affecting large parts of capitalism that have become more transnational and global than ever before. This poses an unresolved problem for any form of regulation and coordination of capitalism by political means, since political power is still largely vested in competing national states (the criticism of capitalism and the criticism of globalization are nowadays intrinsically mixed). The global dimension of present-day capitalism dramatically increases its destructive impact on the natural environment including climate; a problem largely absent in previous centuries.¹³

As mentioned in the beginning, more and more authors find the concept "capitalism" useful, in one way or another. Especially when it comes to discussing complex connections among economic, social, political, and cultural dimensions of historical reality, and to synthesizing or making broad comparisons across space and time, historians and historically oriented social scientists make use of the concept. On the other hand, the concept continues to serve as an interpretative concept that invites fundamental debate about the past, present, and future. It certainly plays a role in intellectual and political debates outside the scholarly world, too, as it already had around 1900.

There are authors who use the concept of capitalism with clearly positive overtones, for example economists in the tradition of the Chicago School. Take the late Gary Becker as an example, who wrote: "Capitalism with free markets is the most effective system yet devised for raising both economic well-being and political freedom". In popular literature too, the term "capitalism" is used in an affirmative sense.¹⁴ There are also numerous examples of a primarily analytical, "neutral" use of the concept, such as in the long and ongoing debate by economists and political scientists about "varieties of capitalism". In this debate, we usually distinguish between types of capitalism according to different relationships between market and state, ranging from a relatively market-radical model, especially in the U.S., to state-capitalist forms, especially in East Asia, with different forms of coordinated or organized capitalism in combination with strong welfare state elements in the middle, especially on the European continent.¹⁵

Anyone who takes a serious look at the history of capitalism and, moreover, knows something about life in centuries past that were either not capitalist or were barely so, cannot but be impressed by the immense progress that has taken place in large parts of the world (though not everywhere). In spite of its very unequal distribution, this progress has also impacted on the broad masses of people who did not and do not belong to the elites and well-situated upper-strata; with regard to material living conditions and everyday life, gains in life span and health, opportunities for choice, and freedom.¹⁶ It was progress of which one might say, in retrospect that it would presumably not have happened without capitalism's characteristic way of constantly stirring things up, pushing them forward, and reshaping them. To date, alternatives to capitalism have proven inferior, both with regard to the creation of prosperity and to the facilitation of freedom. The downfall of the centrally administered state-socialist economies in the last third of the twentieth century was, in this respect, a key process for evaluating the historical balance sheet of capitalism.

Nevertheless, particularly in Europe the concept continues most frequently to be used with skeptical or pessimistic overtones, in a spirit of criticism or at least of ambivalence, and with much sensitivity for the dark sides of capitalism's record. There are notable continuities in the criticism of capitalism. Take the catholic social teaching as an example, with its critique of the "idolatry of the market" and its rejection of "radical capitalist ideology" (Centesimo Annus, the papal encyclical of 1991). The current pope, undoubtedly against the background of his experiences of countries from the Global South, has again intensified the tone of the Catholic critique.¹⁷ Other examples of discursive continuities can be found in different currents of (what I want to call) a totalizing critique that rejects "capitalism" as the epitome of (Western) modernity or as the outright embodiment of evil. This type of fundamentalism is hard to discuss.¹⁸ Now, as in the nineteenth and twentieth centuries, criticism of capitalism can be raised from standpoints on the political left - for example by rejecting inequalities and dependencies coming with capitalist relations - or from standpoints on the political right - for example with anti-liberal, anti-cosmopolitan, nativist implications. Politically, Kapitalismuskritik is polyvalent and ambiguous.

Some critiques of capitalism that were once at the center of attention have, however, moved to the margins. This is true for the classical Marxist critique of capitalism as the site of the alienation of labor and of the immiseration of the working class. In most economically developed parts of the world, the "labor question" has ceased to have the explosive and mobilizing effects it used to display in the nineteenth and first part of the twentieth century. Nevertheless, at the global level it deserves to be rediscovered, given the massive spread of so-called "informal labor" under conditions of capitalist exploitation in the Global South.¹⁹

Other topics have moved to the foreground. Concrete abuses are denounced, such as "structured irresponsibility" in the financial sector. That lack of accountability has led to a widening gap - incidentally, in violation of one of capitalism's central premises - between deciding, on the one hand, and answering to the consequences of decisions, on the other. As a result, exorbitant profits for money managers are facilitated by public budgets that take on gigantic losses ("too big to fail").²⁰ Moreover, the contemporary critique of growing inequality as a consequence of capitalism is becoming ever more urgent. Here, public discussion has focused on the kind of inequality of income and of wealth distribution that since the 1970s has become much more severe inside most individual countries; there has been less interest in the much more serious inequality that exists between countries and regions of the globe. The latter grew immensely between 1800 and 1950, but no longer did so after that. Lamenting the growth of inequality blends into protest against infringements on distributive justice, which is how the critique becomes systemically relevant.²¹ One criticizes the discrepancy between, on the one hand, the claim of democratic politics to shape our common destinies according to democratic principles and procedures, and on the other hand, the dynamic of capitalism that evades democratic politics. The relationship between capitalism and democracy continues to be a much discussed theme.²² Also lamented are the perennial insecurity, unrelenting acceleration pressures, and extreme individualization that are inherent to capitalism and that may lead, in the absence of countermeasures, to the erosion of social welfare and neglect of the public interest. Similar, in the way it poses fundamental questions, is the critique of capitalism's intrinsic dependence on permanent growth and constant expansion beyond the attained status quo; a dependence that threatens to destroy natural resources (the environment and climate) and cultural resources (solidarity and meaning). These are resources that capitalism needs in order to survive, but that it increasingly exhausts and destroys.²³ This, in turn, raises the urgent question of where the limits of the market and of venality lie, or where - on moral or practical grounds - they should be drawn. The historical overview offers strong arguments for the case that there is a need for such boundaries: That capitalism, in other words, cannot be allowed to permeate everything, but that it needs non-capitalist abutments in society, culture, and the state.²⁴

Certainly, there are those who defend capitalism in the public debate. They have good arguments, which demonstrate its achievements, its alliance with progress, and its beneficial effects over the centuries. However, by and large the critical, skeptical, pessimistic arguments, connotations, and overtones dominate - particularly since the Great Recession of 2008 - both in public debates and in relevant parts of the social sciences, at least in Europe. Writings about "postcapitalism" are selling well, nowadays with frequent references to the impact of digitalization and the inclination to predict the imminent end of capitalism as we have known it.²⁵ With changing arguments in detail, this type of literature has a long tradition.