Capitalism in Context

And [finally] some thoughts on Volume 3, The Perspective of the World from Braudel’s Civilization and Capitalism series (posts on Vol 1 and Vol. 2)  about the emergence of capitalism from the 15^th to 18^th centuries. Braudel’s key argument is that capitalism was already underway by the time of the Industrial Revolution, driven by trade. The Industrial revolution accelerates and reinforces capitalism, but it was not the sole instigator. One key take-away from this series for me is that capitalism emerged in alignment with a particular historical context, and there is nothing to suggest that it is some sort of magical solution that will work in any historical context.

My view: Capitalism fits a particular historical context – not all of them.

Interestingly, I didn’t find Braudel to be an advocate for or detractor of capitalism. He does not shy away from being critical where needed. He point out that “the inequality of the world is the result of structural realities at once slow to take shape and slow to fade away.” Put more simply and perhaps more harshly, the structure of the capitalism game produces a few big winners (the .1%), some runner-up (the 9.9%), and the rest (the 90%). And he noted that as the industrial revolution gained strength, and the working class was increasingly exploited, a result was Luddites, radicals, unions, and socialism.

My take on Braudel’s view of social change is developmental. He is very sensitive to the importance of systemic considerations and notes the slow pace of change….but that change happens and continues to happen. He tells the story of how nation-states eventually beat out the cities over time as centers of the world economy, after relaying the story of how the cities first rose to global prominence.

He addresses some contemporary issues from the historical perspective. With automation, for instance, he observes that even at the start of the industry revolution, cheap labor was often more efficient than technology. Indeed, I believe today that we are partly lulled to sleep about the potential impact of automation, because cheap labor is often cheaper, and it makes it seem like automation is not quite ready for prime time.

And he infers the global problematique: “until the industrial revolution, every burst of growth came up against….the limits of the possible, a ceiling imposed by agricultural output, available means of transport, sources of power or market demand. Modern growth begins when that ceiling or limit recedes indefinitely into the distance – which is not to say of course that some kind of ceiling may not be reached in the future.”

In the concluding chapter, he devotes a section to “can capitalism survive? He thinks so, observing that “for any collapse to take place…..a credible alternative would have to be available.” Of course this is the aim of our After Capitalism project, to suggest credible alternatives. I wish I could work faster! – Andy Hines