The relentless revolution: a history of capitalism (2 page)

The wealth of the Western world has created something of a safety net against global famine, but there are still societies whose powerful traditions echo those of premodern Europe. Through our engagement with the Muslim world we now also recognize the hold of ideas about honor, the separation of male and female roles, the importance of female virginity, and the submersion of each person’s desires into the will of his or her community. Recent terrorist attacks have prompted many Westerners to hope that improved economies might otherwise engage the young men who carry out the violence. More jobs would certainly be welcome, but such a response bears the traces of our capitalist mentality. What we don’t sufficiently weigh are the powerful ties of shared rituals and beliefs and how threats to them affect people. Men and women in traditional societies see our concern about efficiency and profits as fetishes. These preoccupations of ours are as distasteful to them as they were to men and women in sixteenth-century Europe.

Capitalism’s Distinctions

The word “capital” helps define my tack on this historical cruise. Capital is money destined for a particular use. Money can be socked away in the mattress for a rainy day or spent at the store. Either way, it is still money. It becomes capital only when someone invests it in an enterprise with the expectation of getting a good return from the effort. Stated simply, capital becomes capital when someone uses it to gain more money, usually by producing something. We can add an “ism” to “capital” only when the imperatives and strategies of private investments come to dominance as they did first in England and the Netherlands, next in Western Europe, and then in the American colonies. Outside these areas, capitalism moved next to Eastern Europe and Japan. In our own day capitalist practices hold sway through most of the world.

Capitalism of course didn’t start out as an “ism.” In the beginning, it wasn’t a system, a word, or a concept, but rather some scattered ways of doing things differently that proved so successful that they acquired legs. Like all novelties, these practices entered a world unprepared for experimentation, a world suspicious of deviations from existing norms. Authorities opposed them because they violated the law. Ordinary people were offended by actions that ran athwart accepted notions of proper behavior. The innovators themselves initially had neither the influence nor the power to combat these responses. So the riddle of capitalism’s ascendancy isn’t just economic but political and moral as well: How did entrepreneurs get out of the straitjacket of custom and acquire the force and respect that enabled them to transform, rather than conform to, the dictates of their society?

Many elements, some fortuitous, had to be in play before innovation could trump habit. Determined and disciplined pathbreakers had to persist with their innovations until they took hold well enough to resist the siren call to return to the habitual order of things. It’s not exactly a case of how small differences can have large impacts through a chain of connections. The better simile would be breaking a hole in a dike that could not be plastered up again, after letting out a flood of pent-up energy. But breaking that hole required curiosity, luck, determination, and the courage to go against the grain and withstand the powerful pressures to conform.

Just as the capitalist system has global reach today, so its beginnings, if not its causes, can be traced to the joining of the two halves of the globe. Europe, Africa, and Asia had been cut off from the Americas until the closing years of the fifteenth century. Even contact between Europe and Asia was confined to a few overland trade routes used to transport lightweight commodities like pepper and cinnamon. Then European curiosity about the rest of the world infected a few audacious souls, among them Prince Henry the Navigator. Prince Henry never left Portugal, but he funded a succession of trips down the west coast of Africa. Merchants, enticed by a trade in gold and slaves along the western Africa coast, increased the number of voyages. Soon Portuguese ships were rounding the Cape of Good Hope on their way up the east coast of Africa. By the beginning of the sixteenth century, the Portuguese had established strongholds on both African coasts and across the Indian Ocean to the Indian subcontinent itself. Simultaneously another Portuguese, Ferdinand Magellan, leading a Spanish expedition, circumnavigated the globe in 1517.

Seventy years before these Portuguese voyages, a Ming dynasty emperor sent out seven great expeditions from China. Led by Zheng He, who must have been a brilliant commander, the expeditions involved more than twenty-seven thousand sailors and two hundred vessels, the largest of them weighing fifteen hundred tons. (Columbus’s first voyage, by contrast, involved a crew of eighty-seven and three ships weighing no more than one hundred tons.) From China these flotillas sailed through the East Indies, past Malacca, Siam, Ceylon, across the Indian Ocean, and down the east coast of Africa, possibly going as far as Madagascar. Sailors grew herbs on the ships’ broad decks and managed to return from Africa with a couple of giraffes. Greatly aided by the magnetic compass, the Chinese voyages advertised the technological sophistication of the Chinese. Yet after three decades the expeditions stopped.

After Bartolomeu Dias rounded the Cape of Good Hope in 1488, dozens of similar caravels followed in his wake, bringing Europe into continuous contact with the East Indies. The seafaring Portuguese had only whetted the appetite of European adventurers. This shift in European travel to Asia, starting overland from Italy, to countries on the Atlantic Ocean had profound consequences. In the next century, Spain, Portugal, France, England, Sweden, Denmark, and the Netherlands permanently eclipsed the commercial dominance of the Mediterranean countries. The Atlantic became the new highway for world travelers, leaving behind the city-states of Genoa and Venice.

In these different responses of equally capable Chinese and Portuguese mariners we have one of history’s great riddles. Why the retreat of the Chinese and the Europeans’ rush to “see the world”? The Chinese had long demonstrated more interest in trade than men in Portugal, so monetary motives don’t help us. Looser political control probably enabled many more Portuguese to act on their own impulses, even if royal purses were needed to bear the expense of the first exploratory voyages. In the absence of certain knowledge, we are free to rush in and tell stories that confirm our biases. Western storytellers have emphasized the intrepidity of their explorers, the readiness of Europeans to move away from their customs. Such explanations of the differences in the societies of East and West won’t bear up under serious scrutiny. The story is more interesting than that.

Clearly it was not a lack of knowledge, wealth, or skill that kept the Chinese from maintaining contact with the Occident. What might it have been? On the practical side, the greater prosperity of Chinese merchants who had established commercial relations throughout the Indies might have checked any interest in going farther afield. Perhaps the Ming emperors lost interest in African countries when they discovered them to be, in most regards, inferior in science, art, and craftsmanship to theirs. Belief in the utter superiority of the “Heavenly Kingdom,” as they styled it, predominated in Chinese culture. And why not? In ancient times, in an example of engineering wizardry, a Chinese innovator was able to cut a long trench through granite mountains to control floods by alternating bonfires and baths of cold water to crack the rocks.
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The many examples of technical ingenuity and scientific achievement that highlight Chinese history point to a superior level of excellence in education. What didn’t take place in China was a continuous path of developments, each building on its predecessor. Nor did the Chinese share the evangelical imperative of European Christianity, giving explorers some moral authority to search for converts among foreigners. A lot of “mays” and “mights.” We’ll never really know, but we can appreciate the significance of these contrasting responses.

The Dutch, French, and English quickly followed the Spaniards to the New World to carve out their piece of this unexplored area. As contemporaries quickly realized, almost everything, at least the things that Europeans wanted and couldn’t grow themselves, grew in the tropics. As they moved from exploration to exploitation, European adventurers began looking for a source of labor to cultivate the new crops for export back home. The Portuguese had been trading in African slaves since Henry the Navigator’s first voyages and soon began shipping enslaved men and women across the Atlantic. Unlike most of the native tribes in the New World, Africans were accustomed to the disciplined work of mining and farming. Aboriginal Americans made poor slaves; they often simply died of despair when chained to work. By the middle of the seventeenth century, with escalating demand, French, Dutch, and English merchants had entered an intense rivalry with the Portuguese to dominate the slave trade.

These voyages had an incalculable impact on Europe and Africa. The new demands for labor created modern slavery, an institution far crueler and more inhumane than the slavery of biblical times. Over the course of the next two and a half centuries, close to twelve million African men and women were wrenched from their homes and shipped to the New World to work first for the Spanish mines and ranches and then on the sugar, rice, coffee, and tobacco plantations that the Spaniards, Dutch, French, Danes, Swedes, and English created throughout the Western Hemisphere. The sea-lanes of the Atlantic gave access to this new source of labor.

The Trailblazer

In view of this spectacular activity across the globe, it may seem a bit perverse for me to pinpoint the beginnings of capitalism in one small island kingdom in the North Atlantic. Yet only in England did these dramatic novelties produce the social and intellectual breakthroughs that made possible the emergence of an entirely new system for producing goods. A series of changes, starting in farming and ending in industry, marks the point at which commerce, long existing in the interstices of traditional society, broke free to impose its dynamic upon the laws, class structure, individual behavior, and esteemed values of the people. Although thousands of books have been written about this astounding phenomenon, it still remains something of a mystery.

Visiting the Vatican Museum several years ago, I was struck by the richness of life captured in fourteenth-and fifteenth-century paintings there. They were full of plants, furniture, decorations, and clothing! I couldn’t help but contrast these lavish depictions of everyday life with plain feaures of England. How counterintuitive that this poor, cold, small, outlandish country would be the site of technological innovations that would relentlessly revolutionize the material world! In the early twentieth century the historian Arnold Toynbee thought he had found the key to all development in the formula of “challenge and response.” The English might have been challenged by their very lack of distracting luxury. Toynbee’s hypothesis didn’t hold up under rigorous scrutiny, but there may still be an element of truth in it.

For generations, scholars concentrated on eighteenth-century industrialization to mark the beginning of capitalism. They labeled it the Industrial Revolution. This is understandable because the spectacular appearance of factories filled with interfacing machinery and disciplined workers so visibly differed from what had gone before. But this is to start an account of a pregnancy in the fifth month. Critical changes had to take place before these inventions could even be thought of. But which ones and for how far back?

How deep are the roots of capitalism? Some have argued that its beginnings reach down into the Middle Ages or even to prehistoric times. Jared Diamond wrote a best-selling study that emphasized the geographic and biological advantages the West enjoyed. Two central problems vex this interpretation: The advantages of the West were enjoyed by all of Europe, but only England experienced the breakthroughs that others had to imitate to become capitalistic. Diamond’s emphasis on physical factors also implies that they can account for the specific historical events that brought on Western modernity without reference to the individuals, ideas, and institutions that played so central a part in this historic development.
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David Landes entered the lists of scholars recounting the “the rise of the West” with an explanation that blended many climatic and cultural factors without providing a narrative of how they interacted to transform Western society. Alfred Crosby, in his assessment of this question, stressed a change in Europeans’ fundamental grasp of reality. In the thirteenth century they adopted a quantitative understanding of the world that promoted mathematics, astronomy, music, painting, and bookkeeping. While presenting a fascinating account of technical achievements, Crosby’s insistence upon intellectual changes leaves society and politics in a conceptual limbo. Deepal Lal goes back even farther in time to the eleventh century, where he finds the roots of the “Great Divergence” in papal decrees that established a common commercial law for all of Christendom.
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The Latin motto
post hoc, ergo propter hoc
reminds us that because something happened before something else, it is not necessarily a cause of the following event. The emergence of capitalism was not a general phenomenon, but one specific to time and place. People who take the long-run-up view of the emergence of capitalism note factors like the discovery of the New World, the invention of the printing press, the use of clocks, or papal property arrangements. These were present in countries that did not change their economic ways. Logically, widely shared developments can’t explain a response that was unique to one country. What the myriad theories about how the West broke with its past do have right is that there were many, many elements that went into capitalism’s breakout from its traditional origins. It is also important to keep in mind that a succession is not a process. A process is a linked series of operations; a succession is open to interruption and contingency.