Chapter 1: What Does Capitalism Mean?
1. “In History Departments, It’s Up with Capitalism,” New York Times, 6 Apr. 2013; Sklansky 2012; Kocka 2010. Many people have supported me with suggestions and information in preparing this book. They are gratefully acknowledged in the German edition (in the first endnote of the opening chapter). In preparing the English-language edition, I benefited especially from the advice and assistance of Knut Borchardt, Richard R. John, Michael Merrill, Jerry Z. Muller, the late Gerhard A. Ritter, and James J. Sheehan. I had the chance to present my views in seminars organized by Victoria de Grazia at Columbia, by Harold James at Princeton, and by a group of graduate students at Stanford. Special thanks are owed Jeremiah Riemer for his sympathetic translation, which resulted in fruitful collaboration and substantive clarifications, and to the research center Work and Human Lifecycle in Global History at the Humboldt University of Berlin for wide-ranging assistance.
2. Hilger 1982, 408–42, esp. 410, 433f., 437 (quotes from German sources 1776, 1756, 1717, 1808 and 1813). On the following, see also Kocka 2015.
3. Blanc 1850, 161; Proudhon 1851, 223. Grand dictionnaire universel du XIXe siècle (Paris: Larousse, 1867), 3:320. Liebknecht cited by Hilger 1982, 444. (An English translation of Liebknecht’s remarks by Erich Hahn may be found in William A. Pelz, ed., Wilhelm Liebknecht and German Social Democracy: A Documentary History [Westport, CT: 1994], 2; http://plato.acadiau.ca/courses/germ/voss/2813-23/BattlefieldsofIndustry.htm.)
4. Hilger 1982, 443 on Rodbertus; Schäffle 1870, 116. Meyers Konversations-Lexikon, 3rd ed. (Leipzig: Bibliographisches Institut, 1876), 9:876; Sombart 1902; overview in Passow 1927.
5. Jones 1851, 646 (I owe this reference to Michael Merrill). Hobson 1894; Shadwell 1920, 69; Encyclopaedia Britannica 1910–1911 (11th ed.), 5:278; and 1922 (12th ed.), 30 (Suppl.):565–71. Williams 1976, 42–44.
6. Veblen, 1914, 282–83; Brick 2006, 23–33; Merrill 1990, 470–73; Merrill 2014.
7. E.g., Salvioli 1906; Pirenne 1914; Cunningham, 1916; Tawney 1926; Sée 1926.
8. The standard edition is MEW XXIII–XXV Karl Marx, (= Das Kapital I–III (1867, 1884–1885, and 1894); Marx had already worked out a brief summary in his “Lohnarbeit und Kapital” (1849), MEW VI, 397–423; “Manifest der Kommunistischen Partei” (1848), MEW IV, 459–93. A very good introduction is provided by Muller 2003, 166–207. The English titles from MECW (Marx/Engels Collected Works) are the three volumes of Capital, “Wage Labor and Capital,” and the “Manifesto of the Communist Party”—all of which may be found online at https://www.marxists.org/archive/marx/works/cw.
9. Weber’s statements on capitalism come from different periods of his life and are spread throughout his oeuvre. Most important are his book-length essay The Protestant Ethic and the Spirit of Capitalism, his encyclopedic multivolume opus Economy and Society, and his General Economic History. See Weber 1978 (2013), esp. 63–166, 351–54, 1094–110; Weber 1927 (repr. 1950), esp. 275–369; Weber 2010. A good introduction to his views on capitalism: Schluchter 2009, 63–87 (quote 81); English-language passage of Schluchter citing Weber from an earlier, overlapping study by Schluchter 1989, 346 and note 108; and see again Weber 1978, 111, on the “fundamental and … unavoidable element of irrationality” of economic systems); further: Swedberg 1998; Ghosh 2008.
10. Schumpeter 1961, 70; Schumpeter 1939, 223 (definition); Schumpeter 1947, 81–86 (“creative destruction”). See McCraw 2007.
11. Esp. in Schumpeter 1947, pt. 2.
12. Keynes 1927, 50; Keynes 1936, 161 ff., 163; Akerlof/Shiller 2009; Berghoff 2011, esp. 80–86.
13. Polanyi 1944. Closely following him: Streeck 2009. For historians’ critique of Polanyi: Kindleberger 1974; Eisenberg 2011, 62–66.
14. Braudel 1982/84, II (The Wheels of Commerce) and III (The Perspective of the World), 619–32. See Vries 2012. On monopoly capitalism: Baran/Sweezy 1966; Cowling/Tomlinson 2012.
15. Hilferding 1910; Luxemburg 1968; Lenin 1920.
16. Wallerstein 1974, 1980, 1989, and 2011; Arrighi 1994 and 2007.
17. See e.g. Christian 2004, 446–81; Osterhammel 2014, 667–672; Sanyal 2007; Frieden 2007; Beckert 2014.
18. In this context see Parthasarathi 2008; Maier 2011.
19. See Mann I, 1993, 23 ff.: Capitalism includes commodity production, private property owning the means of production, and free wage labor separated from ownership of the means of production. Fulcher 2004: Capitalism is based on investments intended to make a profit. Boltanski/Chiapello 1999, 37 ff.: the chief feature of capitalism that lends the system its dynamic for change consists in the way that capital aiming at profit maximization—that is, at increasing each amount of newly invested capital—is plowed back into economic circulation over and over again. Appleby 2010, 20–26: capitalism as a “cultural system” based on economic conduct in which the drive of private investors to obtain profits is central. Ingham 2011, 53: for him, the essential elements of capitalism are a monetary system that permits the creation of money through bank credit for investment purposes; market and exchange; and private enterprises producing commodities. Swanson 2012, 5: capitalism is “an economic system in which the owners of the means of production hire wage laborers to produce goods and services in order to sell in the market for a profit.”—L. Neal, “Introduction”, in Neal/Williamson 2014, I:1–23, esp. 2: four elements are common in different concepts of capitalism: private property rights; contracts enforceable by third parties; markets with responsive prices; and supportive governments.
20. More details in Kocka 2010 and 2015.
21. There is currently a lively debate about the question of the extent to which free wage labor should be included as a defining feature of “capitalism.” See van der Linden 2008 and below, p. 124.
Chapter 2: Merchant Capitalism
1. Hartwell 1983, 14; Grassby 1999, 19; Fulcher 2004, 19 ff.; Pryor 2010, 8 ff.
2. On Babylonia during the second and first millennium BCE, see Jursa 2014; Graeber 2011, 235–64.
3. Finley 1973, 144 (quote); on wage labor in the ancient world: Lis/Soly 2012, pt. I; Temin 2012; Jongman 2014.
4. Mielants 2007, 47–57; Ptak 1992; Lu 1992; Li 2004.
5. Chaudhuri 2005, 34–51, 203–20; Spuler 1952, 400–11; Rodinson 2007, 63–65, 82–85; Bernstein 2008, 66–76.
6. Udovitsch 1970; Heck 2006, 41–157; Chaudhuri 2005, 211–15; Shatzmiller 2011.
7. Udovitsch 1988; Rodinson 2007, 57–90, see 60 ff. on Ibn Khaldun and 88 ff. on the question of the bourgeoisie; Graeber 2011, 271–82.
8. On the following, see Kulischer 1965, I:229–78; Howell 2010; Persson 2014.
9. Ogilvie 2011; on the following, see also North 2011, 65–102; Stark 1993.
10. On Romano Mairano, see Heynen 1905, 86–120; on the Medici, see de Roover 1963; on the Fuggers, see Ehrenberg 1896. In general Ashtor 1972; Carruthers/Espeland 1991.
11. Van der Wee/Kurgan-van Hentenryk 2000, 71–112.
12. See Kulischer 1965, I:215–21; Blickle 1988, 7–12, 51–58; Arrighi 2010, 103–5; van Bavel 2010, 54–57.
13. Le Goff 1956, 1986, and 2010; Muller 2003, 3–12; Kulischer 1965, I:262–74, esp. the examples on 271–74.
14. On India until 1600, see Parthasarathi 2008; Roy 2014; Subrahmanyam 1994. On Southeast Asia: Hall, 1984; on East African merchant economies, Middleton 2009; Mielants 2007, 86–124; Bernstein 2008, 103 ff.
15. See Abu-Lughod 1989: her depiction overemphasizes the connections between the different parts of the world. See also Dunn 2012.
16. This essentially older argument (Weber, Hintze, Pomeranz, Peer Vries et al.) is found in Mielants 2007. In another version: Bin Wong/Rosenthal 2011.
17. Thus, e.g., Wood 2002.
1. MEW XXIII (Das Kapital 1), 788: “If money … ‘comes into the world with a congenital blood-stain on one cheek,’ capital comes dripping from head to foot, from every pore, with blood and dirt.” (See https://www.marxists.org/archive/marx/works/1867-c1/ch31.htm for MECW English version of Capital, vol. I, ch. 31.)
2. Reinhard 2008, 28–58; Beckert 2014, chs. 2 and 3 (“War Capitalism”); on the conquistadors and their debts: Graeber 2011, 334, 465.
3. There is a controversy among economic historians as to how strongly colonial exploitation promoted European industrialization. O’Brien 1982, e.g., sees minimal influence. That the establishment of capitalism even inside Europe got a major push from colonial expansion, however, strikes me as incontrovertible. On the breakthrough of consumer capitalism in the course of early modern colonization, Trentmann 2012, pt. 2.
4. Chaudhuri 2005, 80–97; Frentrop 2002, 49–114; Reinhard 2008, 42.
5. Ehrenberg 1896, 122–24.
6. Van der Wee/Kurgan-van Hentenryk, 200, 117–264, also on the following paragraphs (quote p. 260).
7. Newton quote according to Brantlinger 1996, 44, citing the version used by Bourne 1871, 292; Kindleberger/Aliber 2005, 42, 58. On the history of company bankruptcies, Safley 2013.
8. Graeber 2011, 345.
9. Reinhard 1985, ch. 8; Reinhard 2008, 112 (quote); Appleby 2010, 121–37. The topic has been intensively researched and discussed, especially with respect to American history. See Johnson 2013; Baptist 2014; Beckert 2014, ch. 5; Zeuske 2013, 27–96. The general compatibility of capitalism and slavery is strongly emphasized. An older perspective, by contrast, places stronger emphasis on the tensions between the two (e.g., Haskell 1992). But it depends on specifying the conditions under which slavery and capitalism go together as well as the conditions under which this is not the case.
10. By way of introduction, Rösener 1993; analytically, Brenner 2007, 63–84.
11. Duplessis 1997, 76–82, 147–153.
12. De Vries/van der Woude 1997, 195–269, esp. 200 ff.; van Zanden 2009, 205–66.
13. Eisenberg 2014, 45; Duplessis 1997, 63–70, 175–84; Appleby 2010, 75–86.
14. Bücher 1927, esp. 981 f.; Thompson 1971; Schulz 2010.
15. Sokoll 1994.
16. Mendels 1972; Kriedte et al. 1981; Ogilvie/Zerman 1996.
17. Troeltsch 1897; Kisch 1989; Kulischer 1965, 2:113–137, esp. 114, 116, 123; Kriedte 1983; Medick 1996; Duplessis 1997, 88–140, esp. 215, 219; Allen 2009, 16–22; De Vries 2008.
18. Brenner 2001, esp. 224–34.
19. Numbers in Allen 2009, 17.
20. Eisenberg 2014, 73–100.
21. Schilling 2012, 634 ff. On the Weber thesis, see above, p. 12; critique of Weber thesis: Eisenberg 2009, 83–85; Schama 1987, 326–30.
22. On the older, skeptical perspectives, including literature, Muller 2003, 3–19; on the change in the eighteenth century, Appleby 2010, 87–120; a germinal work is Hirschman 1992, 105–41, esp. 106 ff.
23. Muller 2003, 51–83: introduction to Smith; a germinal work is Rothschild 2001, 116–56; different view in Vogl 2010–2011, 31–52; from a Marxist perspective, Brenner 2007.
24. Using the Netherlands as a case, Van Bavel 2010, 72–77.
25. Allen 2009, 25–79 (esp. 34, 39, 40) on “the high-wage economy of pre-industrial Britain”; Broadberry/Gupta 2006, 2–11; Clark 2005, 1308, 1311, 1319.
26. See Pomeranz 2000. Review of the debate after ten years: O’Brien 2010.; P. Vries 2013; on the weakness of proto-industrialization in Chinese (and Indian) merchant capitalism, Lu 1992, esp. 492, 496; Chaudhuri 2005, 201.
Chapter 4: The Capitalist Era
1. On the complex connection between industrialization in the West and blocked industrialization in China, India, and Africa, see Osterhammel 2014, 662 ff.; Cooper 2009 (esp. 47: African resistance to capitalism); Inikori 2002; on intra-European disparities in the nineteenth century, Berend 2013a, 462 ff.
2. Hobsbawm 1999 (reprint of 1968 ed.), p. xi; Cipolla 1973. Most comprehensive overviews of industrialization use the term “capitalism” only marginally, if at all. See Stearns 1993; Buchheim 1994; Teich/Porter 1996; Landes 1998.
3. See Kornai 1992.
4. Marx/Engels, “Manifest der Kommunistischen Partei,” MEW IV, 465. See https://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm for English version of Communist Manifesto. On crises: Spree 2011; Plumpe 2010.
5. Osterhammel/Petersson 2007; Findlay/O’Rourke 2007; Mann IV:2013, 1–12.
6. Redlich 1964, 97 ff.
7. This is analyzed, using the example of the competition between the family enterprise Siemens and the managerial enterprise AEG, in Kocka 1972; on the relationship of family to business: Chandler 1977, 28 ff.; Kocka 1979; James 2006; Budde in Budde, ed. 2011, 97–115; Sabean 2011. On Rothschild: Ferguson 1999.
8. In 1950 half of the largest British enterprises were regarded as controlled by individual families (by 1970 only a third). On this, and on the meaning of family influence in large Japanese companies (the zaibatsu and keiretsu), Blackford 2008, 205–16.
9. Good overview: Blackford 2008 (200 on the figures for the United States); Chandler 1977 and 1990; Folsom/McDonald 2010; Kocka 1978, 555–89; Winkler 1974.
10. Two classics: Berle/Means 1932; Burnham 1941; also see Kocka 1983.
11. This boom was, however, repeatedly interrupted—even in the decade and a half before the big collapse of 2008—by regionally contained financial crises (e.g., in the United States at the beginning of the 1990s, in Mexico 1994–1995, in East Asia and Russia 1987–1998, in Argentina 2001, and continuously in Japan).
12. James 2013, esp. 34, 37, 39 (figures); Berend, 2013b, 6 (quote), 60–80; Soros 1998, xii, xxi; Maier 2007 (locusts). Overall, Atack/Neal 2009.
13. Brilliantly exaggerated in the novel The Fear Index by Robert Harris (2011), esp. 81–113; Vogl 2010–2011, 83–144; autobiographical, Anderson 2008.
14. http://www.imf.org/external/pubs/ft/wp/2010/data/wp10245.zip.
15. Deutsche Bundesbank 1976, 4, 313; Sinn 2009, 32–35, 155–57.
16. Dahrendorf 2010; Bell 1979; Berend, 2013b, 91–112; Graeber 2011, ch. 12; Streeck 2014a.
17. Around 2005, funds controlled about 60 percent of the stocks in the thousand largest corporations in the United States, with 40 percent of stocks held by the twenty largest investment funds.
18. Windolf 2005 is very good on this (above all with regard to American cases); for Germany, Streeck 2009, 77–89, 230–72.
19. Wolfe 1987, ch. 10.
20. On financial market capitalism and the crisis of 2008, Berend, 2013b, esp. 60–80; Mihm/Roubini 2010.
21. Thus Van der Linden 2008, 17–61; Van der Linden 2014; for a critique, Kocka 2012.
22. See Tilly/Tilly 1998; Steinfeld 1991; Steinfeld 2001; Kocka/Offe 2000.
23. See Stanziani 2013; Lis /Soly 2012; Ehmer 2001; Thomas 1999.
24. Tilly 1984, 33 (1550: 24 per cent; 1750: 58 per cent; 1843: 71 per cent).
25. Osterhammel 2014, 673–709; Van der Linden 2008, 20–32.
26. More details, also on the following and using German cases, Kocka 1990, 373–506.
27. See Osterhammel 2014, ch. 5: “Living Standards: Risk and Security in Material Life”; Lucassen 2006. On countervailing trends, including in the West, since the 1980s, see below, p. 140.
28. Further details in Kocka, 1990, 469–71.
29. The now classic account of early industrial England is Thompson 1963; also Thompson 1971.
30. Overview of labor movements in different countries 1870–1914: Van der Linden/Rojahn 1990. On China, Lee 2007.
31. Schmid/Protsch 2009; already a classic: Sennett 1998; in addition, Castel 2009.
32. Arnold/Bongiovi 2013; Breman 2012; already discussed in Hart 1973; Vosco et al. 2009, 1–25; Standing 2008; Kalleberg 2009. On Africa, Cooper 2009, 53 ff.; on India, Maiti/Sen 2010; on Latin America, Fernandez-Kelly/Sheffner 2006.
33. A good overview using England as an example, Fulcher 2004, 38–57.
34. See the chapters on developments in different European countries and the United States from the late nineteenth century through the 1920s in Winkler 1974. In using the term organized capitalism for their discussions in this volume, the contributing authors follow Social Democratic theoretician Rudolf Hilferding, who used the concept in the 1920s. See also Crouch1993; Höpner 2004.
35. On the history of economic orders in Europe in the nineteenth and twentieth century, Berend/Shubert 2007; in the United States, Swanson 2013; in East Asia, Inkster 2001, esp. 1–20 ff. The American debates about capitalism, the “mixed economy,” and the “post-capitalist order” are analyzed in Brick 2006; Lichtenstein 2006; as well as Marks 2012. See also Keynes 1927 and Shonfield 1965.
36. See Mirowski/Plehwe 2009; Harvey 2007; Krippner 2011; Berend 2013a. See also Offe 1985; Lash/Urry 1987; Crouch 2011.
37. See Hall/Soskice 2001; Amable 2003; Dore 2000; Berger/Dore 1996; Albert 1993.
38. Sketches of individual countries in Fulcher 2004, 89–134; Appleby 2010, ch. 11; Kwon 2010; Naughton 2007; Hung 2013; Myant/Drahokoupil 2010; Chandrasekhar 2010; Rendall 1997; on African Capitalism Cooper 2003 and 2009.
39. See Becker 2013, 8–9.
40. Income and wealth inequality within individual societies, to summarize roughly, increased in Europe in the nineteenth century, then decreased from the start of the twentieth century until the beginning of the 1970s, and then increased again since then. Van Zanden 1995; Van Zanden et al. 2014a.; Atkinson et al. 2010; Piketty 2014. But the link between capitalism and inequality can be influenced through measures undertaken by politics and civil society. Otherwise there would be no way of explaining why, for example, the kind of exacerbating income inequality all OECD countries have experienced has been more pronounced in some countries and very much less pronounced in others: very strongly pronounced, e.g., in the United States, Turkey, and Chile, very much weaker in Scandinavia.
Chapter 5: Analysis and Critique
1. A good overview in Sklansky 2014; see also Merrill 1995; Zakim/Kornblith 2012. Apparently there is less demand for the term capitalism in Spanish: R. Salvucci 2014; see esp. p. 426.
2. Friedman 1962, 4; Becker and Becker 1997, 241. Mackey 2013 speaks of “conscious capitalism liberating the heroic spirit of business.” A German example: Bergheim 2007.
3. Usefully summarized in van Zanden et al. 2014b. See Vries 2013.
4. E.g., Wallerstein et al. 2013 (esp. the chapters contributed by Wallerstein); Streeck 2014b; Rifkin 2014. On historians’ mostly critical views of capitalism in the second third of the twentieth century, see Ashton 1963 and Hacker 1963.
5. On this mechanism, Boltanski/Chiapello 1999.
6. E.g., Kirshner, 2007.
7. Most recently, Herbert 2014, ch. 6.; Kershaw 2008, 42–44.
8. Honegger et al. 2010.
9. On this, Milanovic 2011; Galbraith 2012; see note 40 of ch. 4 above.
10. E.g., Klein 2014. But see Mann 2013, esp. 94–95, who convincingly puts the relation between capitalism and climate change in a much broader and differentiated perspective: “The three great triumphs of the modern period—capitalism, the nation-state, and citizen rights—are responsible for the environmental crisis.”
11. Sandel 2012.
12. Examples may be found in Tripp 2006, 150–93, though such totalizing condemnations of capitalism are also not unknown in the West.