So What is Capitalism, Anyway? (From Debt: The First 5,000 Years) We are used to seeing modern capitalism (along with modern traditions of democratic government ) as emerging only later: with the Age of Revolutions – the industrial revolution, the American and French revolutions – a series of profound breaks at the end of the eighteenth century that only became fully institutionalized after the end of the Napoleonic Wars. Here we come face to face with a peculiar paradox. It would seem that almost all the elements of financial apparatus that we’ve come to associate with capitalism – central banks, bond markets, short selling, brokerage houses, speculative bubbles, securitization, annuities – came into being, not only before the science of economics (which is perhaps not too surprising), but also before the rise of factories, and wage labor itself. Joint-stock corporations were created in the beginning of the colonial period, with the famous East India Company and related colonial enterprises, but they largely vanished during the period of the industrial revolution, and were mainly revived only at the end of the nineteenth century, and then principally, at first, in American and Germany. As Giovanni Arrighi (1994) has pointed out, the heyday of British capitalism was marked by small family firms and high finance; it was America and Germany, who spent the first half of the twentieth century battling over who would replace Great Britain as hegemon, that introduced modern bureaucratic corporate capitalism. This is a genuine challenge to familiar ways of thinking. We like to think of the factories and workshops as the “real economy,” and the rest of the superstructure, constructed on top of it. But if this were really so, then how can it be that the superstructure came first? Can the dreams of the system create its body? #WaveOfAction
Posted on: Fri, 04 Apr 2014 04:19:29 +0000
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