Capitalism: A Global History

When you listen to political conversations, you think we live in an age of great scarcity. We somehow for some reason we can't, you know, provide everybody with housing. For some reason we can't feed all of our children. For some reason we can't provide everybody with high-quality health care. But especially in the United States, but also in much of the rest of the world, we actually can. But we somehow politically are not able to do so. And um and and I think, you know, history is important in in in in seeing that that you know, you see a lot of terrible things happening in the past, and of course how we got here was not always pretty. And we should remember that, and we should be aware of that. But uh but we should also be aware of the possibilities of the world in which we live today. Um and yeah, I think we're pretty far away from that though. My name is Sven Beckert. I'm a professor of American history at Harvard University, and I'm the director of uh a center on the study of global history, and the co-director of a center on the study of the history of capitalism. I think first and uh foremost, markets have existed, and this is, you know, maybe the first thing that you learn from the study of history. Markets have existed as far as we know, they have existed throughout human history. So, this they are not something that's peculiar to the contemporary moment, or let's say to the history of the past 200 years in the wake of the Industrial Revolution. But um but but economic life has changed drastically in the past uh let's say 500 years. And uh if we just focus on the study of markets as such, we miss, I think, the historical specificity of the kind of economic change that happened on planet Earth in the past 500 years. And I think this econ- specificity specificity of the change in economic life is best identified as the rise and spread of capitalism. And uh you know, there are many things that can be cited when you look at the history of capitalism that that illustrate the specificity of capitalism as a form of the organization of economic life that is different from other forms of the organization of economic life, but, you know, the one that, you know, most of us know about the best is probably that there has been an acceleration of um economic growth. Uh definitely, you know, since about the year 1800, that is completely unprecedented in in in in in human life. And uh I think that um kind of revolution in economic life generated this increase in human productivity and its human's ability to produce things. And this is specific uh to the capitalist revolution. So, you know, thinking about not just markets. I mean, markets are important to capitalism, clearly, but they're important to other forms of economic life as well. Uh they change quite significantly over time, and are also quite different at any given moment. Uh but this would be insufficient, I think, to understand the dynamics of economic life uh in uh you know, in American society, but also more broadly globally in the past few hundred years. So, Empire of Cotton is an effort to understand It started out as an effort to understand what in the 19th century was clearly America's most important industry, both in agriculture as well as in manufacturing, namely the growing of cotton and the manufacturing of cotton textiles. Um I early on understood that this history cannot be understood purely in an American context. It's clearly a story that pushes beyond the boundaries of the United States, partly because the raw cotton produced in the United States was was significant to the European Industrial Revolution. Um so it became clear to me that it wasn't just a history of cotton, but it was really through the lens of cotton. There was something we can understand about the history of capitalism in the United States, but also more broadly. And one of the things that we I mean, there are many things we can see about that, but but the most basic insight that we can uh take from the study of the history of cotton is that capitalism was a system of organizing economic activity that right from the beginning was was very global. And its dynamic really was related not just to what happened in any one given place, but was related to what how different places in the world related to one another, and places that were also fundamentally different from one another. So, capitalism in a way did not emerge from and produce ever greater homogeneity, but it thrived on and produced ever greater difference. The big story from a world economic history perspective is that the world's cotton industry was the largest manufacturing industry that humans have engaged in in during the past thousand years, approximately. So, way before the Industrial Revolution. And um and the core of that industry up to the year 1800, or maybe even 1820, was clearly in South Asia, in India. This is where most cotton textiles consumed on planet Earth were produced. And in the wake of the Industrial Revolution of the 1770s, 1780s, and so on, that industry now moved from India to the European continent. And in a way, the book Empire of Cotton tries to explain of why this crisis happens, and why it happens. Uh and that then also brought in the history of the United States in two distinct ways. For one, the technology of cotton industrialization moved by the 18 teens, 1820s, moved from the United Kingdom, moved to the United States, and there is significant industrialization in the United States, and it happens first and foremost in cotton textiles. But second, the United States by the early 19th century, so around the year 1800, already becomes the world's most important producer of raw cotton for export. It's really American cotton that feeds the Industrial Revolution, both domestically and in Europe as well. By 1850, 75% of all cotton consumed in European cotton mills comes from the United States. And of course, this cotton in the United States until 18 61, is produced by enslaved workers. And so, what we can see here is what I spoke to earlier, again the kind of the the the the the differences in how production is organized, or how labor is organized in various parts of the world produce the dynamic of capitalism itself. So, it connects the enormously exploitative, enormously violent, but also enormously productive cotton text cotton plantations of the American South with the enormously productive cotton factories on the continent of Europe. And uh and and that, I think, you know, this this relationship for complicated reasons is really at the core of what this Industrial Revolution is about. And this Industrial Revolution is, I think, one of the most important, if not the most important event in all of human history. Capitalism is a co-production, first and foremost, of capital owners and of states. Capitalism is unimaginable without the state, conceptually unimaginable. Markets are conceptually unimaginable without the presence of the state. And uh you can, you know, there there there's like almost an unending list of things you can cite for the importance of the state from, you know, very basic, the regulation of markets, you know, since I mean, this is before the advent of capitalism even, you know, since medieval times. Uh it uh is uh the you know, the importance you know, many economists have emphasized the importance of institutions uh to the history of capitalism, which I completely agree with. And and but but, you know, these institutions in the end are either created by, or enforced by, or backed by states. Uh but but you can also think of things such as, you know, colonialism, which is a state-run project, uh or you can think of the emergence of the welfare state, or or you know, the state, or the or or the provision of money. This the state is everywhere in the history of capitalism. You cannot think about markets if you don't think at the same time about states as well. And it's also important for the question that of course many economic historians, economists, and others have spent a lot of energy thinking about, namely why is it that why is it that capitalism emerged at a particular moment in time, and why is it that the kind of greatest dynamic in the development of capitalism emerged from a particular place on planet Earth, namely the continent of Europe. There have been rich people in the history of the world everywhere, from West Africa to China to India, the Aztec Empire, you know, the city of Florence, in many, many different parts of the world. But it was really one part of the world in which uh there was uh a new kind of dynamic in economic development, uh and that was the continent of Europe. And here I would say the decisive difference between Europe and other parts of the world was that in Europe exactly this coalition between capital owners and states emerged in a very particular way and that propelled the European economy that propelled European merchants into other regions of the world and that was decisive in the European economic takeoff as it eventually happened. And to go back to the history of cotton, you can see that beautifully in that history because without European presence and knowledge of India, let's say, the whole idea or the technology to produce the kinds of cotton textiles that became so important to global markets for European manufacturers would not have occurred in the first place, nor could they have secured the cotton that they needed for their factories because cotton, by and large, did not grow on the European continent. So when when this academic field of the study of the history of American capitalism emerged, one of the topics that it really zeroed on early was the question of how to think about slavery in the history of American capitalism. And the traditional opinion amongst most scholars was that these were two fundamentally different forms of organizing economic activities. They were you know, capitalism was about freedom and about free labor and the southern plantation economy was of course about slavery and coercion. And the story ran that, you know, as the Industrial Revolution happened in the northern parts of the United States, it it overpowered the institution of of of of of slavery and and created the condition for its abolition. And this story is not completely wrong. But but I think what recent scholarship on the history of American capitalism has shown is that Americans slavery has a very long history. It goes very deep into the human past. Wage labor has a very long history. It goes very deep into the human past. So neither wage labor nor slavery are invented by the institution of capitalism. But when we look at modern wage labor and modern slavery, I think both of them are deeply connected to the expansion of capitalism and um and the and the American plantation economy from its from the onset, but especially after the turn of from the 18th to the 19th century, becomes becomes really deeply integrated and crucial to the global capitalist economy as it is then still mostly focused on the continent of of of of Europe and you can, you know, you can see, let's say, the spatial expansion of American slavery into the, you know, into the more western parts of the South is is directly related to the expansion of the European textile industry. It it expands because it needs all of these cotton cotton supplies. The expansion of the American cotton industry is financed by by credit from, you know, from Europe, but also from the northern parts of the United States. Some of the industrial development of the northern parts of the United States, especially Rhode Island, are directly related to demand that comes out of the plantation economy. So I think we need to see that as part of one economy. And and you know, for reasons that are probably now too complicated to explain, there there was there was something particular about slavery that allowed the sudden rapid expansion of commodity production that was not possible in other parts of the world dominated by peasant agriculture. So I think this was kind of the competitive advantage. This explains why slavery became so crucial to this particular moment in the history of capitalism. But of course, as we know, it was a moment in the history of capitalism. It came in the United States, it came to an end in 1865, it came to an end in Brazil in 1888 because at this point the capitalist economy had become so powerful and the capacity of states in colonial territories have had become so powerful that it now became possible to rearrange peasant agriculture in these parts of the world and therefore the dependence on slave grown cotton diminished drastically. But for this historical moment, I think in in the case of the United States, it's really from its founding to 1865, but if you think globally about the history of capitalism, it's really since the 16th century, the early 16th century that the ability of Europeans to radically recast agriculture and the countryside in a significant part of the world, first in the Caribbean, then in Brazil, then in the northern parts of the Americas, this was crucial to the capitalist revolution. And here slave labor was crucial to propelling this transformation of the global countryside. So as you can see, you know, obviously the history of capitalism is much more than the history of cotton. And not everything about capitalism can be explained by just looking at the history of cotton, but we can already see one thing that is more broadly relevant to the history of capitalism and this is its global nature. This industry already in 1820, so 200 years ago, it connected Asia because of its because that was the source of most of the technology of modern cotton manufacturing, the continent of Europe where much of the industrialization took place and where new machines were invented to make the spinning of cotton much more productive, and then the Americas where much of the cotton was grown, and then Africa where much of the labor came from that would, you know, fuel cotton industrialization. So this is a this is a strikingly modern kind of arrangement that probably many people would think, you know, something that happened in the 1970s maybe or 1980s, but not in the 1820s. So here we have, I think, a very powerful example that capitalism is as such it's it's a global system. It it cannot be understood by looking just at one particular part of the world. I mean, of course, we can see some things about capitalism by looking at it one particular part of the world, but it is always global and indeed, I just finished a book on the entire global history of capitalism and the core argument of this book is that capitalism was born global from the very first moment of its emergence, it was global. And um and you can, you know, the I think, you know, the world's first capitalist to to to to give like a banal example, the first world's first capitalist were merchants. And what did they do? They traded across, you know, the oceans and this was way before before the advent of the modern modern modern modern era. And and much I think much of the So we talked about, you know, the capitalist revolution to be a particularly dynamic form of organizing economic activity and I think much of this dynamic comes exactly from its, unlike any other form of economic life that we've had on planet Earth, it comes from its global connections. It draws on, you know, inputs, territories, raw materials, labor, markets in all corners of the world from the very beginning. And again, to amplify the point that I made earlier, often people think about capitalism as a form of the organization of economic life that makes everything ever more to be the same. And of course, some things do become the same. But I think the dynamic of capitalism comes exactly from its core ability to connect very different things to one another at the same moment. So this can be different systems of labor. We saw that when we talked about wage labor and slavery. It can be different forms of territorial organization, like, you know, Singapore as a tiny city-state and the United States is a very large territorial state. Different forms of political rule, you know, authoritarian regimes and liberal democratic regimes all combined with one another and I think that um that helps explain the the the enormous dynamic that is embedded within within the organization of of economic life under capitalism. And it's of And that is fundamentally global. So so we we I don't I don't think you understand anything about capitalism by just looking at one part of the world. You know, history does not allow you to predict the future. History does not repeat itself. History is not cyclical. But by studying history, you can see certain patterns that helped you understand the past. And these patterns, hopefully, will also help you better make sense of the future. And and so you know, learning from history suggests to me that you know, there will be tariff regimes, there will be, you know, firmer borders, there will be a territorial reorganization of capitalism, but but that as such is is just going to reconfigure the global connectedness of capitalism as such and not overcome it. Capitalism will remain to be global. We had another moment in world history beginning really in the late 19th century and then, you know, becoming particularly pronounced in, you know, around World War I, World World War II like in the 1920s, 1930s, 1940s, in which many of the things we're seeing happening now happened before. And but even in those moments, capitalism remained in some sense global. There were very powerful colonial European states who, you know, controlled territorially controlled much of the of of the world. And and and they they intensified that that that their trade with these parts parts parts of the world. Um so, I would think that this is you know, it's not the end of capitalism, clearly not. And it's also not um it it's also not that that some of the capitalist economies will completely encase themselves within nation-states. No, it's a reconfiguration of the territorial and global order of capitalism as such. That's the first thing. The second thing I would say is that we are today in a situation we never have been in in human history. And this is we have gained the ability to produce much of what people need on planet Earth to live pretty decent lives. The problem in of much of economic history was the problem of production. You know, there were limits to the human capacity to produce. Very serious limits. In some ways and you know, maybe we should pause and celebrate that. In some ways we have gained an ability to produce so much with ever less human labor input. That we can live pretty decent lives and all of us. So, the problem that we're facing today is not so much the problem of production. But it's the product it is the question of distribution. Who gets to get half all these things that come out of our ever more productive economy? And um and I think there is a total disjunction between how we talk about economic life. And what enormous possibilities we actually have in addressing many of the problems that humans have faced in the in the past. There is there is very little that, you know, that when you listen to political conversations, you think we live in an age of great scarcity. We somehow for some reason we can't, you know, provide everybody with housing. For some reason we can't feed all of our children. For some reason we can't provide everybody with high-quality health care. But especially in the United States, but also in much of the rest of the world. We actually can. But we somehow politically are not able to do so. And um and and I think, you know, history is important in in in in seeing that that you know, we you see a lot of terrible things happening in the past. And of course, how we got here was not always pretty. And we should remember that and we should be aware of that. But but we should also be aware of the possibilities of the world in which we live today. Um and yeah, I think we're pretty far away from that, though.