Monday, July 25, 2005

McDougall: The Invention of Capitalism . . . and America

Some of my readers might recall an earlier post or two about my old Berkeley professor Walter McDougall, now doing quite well at the University of Pennsylvania.

Well, here he is again, writing Freedom Just Around the Corner: A New American History, 1585-1828 (New York: Perennial, 2004), this time explaining how a capitalist society emerged in 16th-century England:

In the century preceding England's overseas expansion something unique occurred there: the invention of the first free market or "capitalist" society. It was invented in the sense of being a human artifact, but also in the sense of not being inevitable. That assertion flies in the face of the Classical Liberal assumption to the effect that human beings are natural traders who needed only to be freed from the chains of feudalism to fashion a market society. It also flies in the face of the Classical Marxist assumption about bourgeois capitalism being a natural stage in the technical and social dialectic of history. It even appears to fly in the face of the evidence suggesting [that] local and long-range exchanges of goods by profit-seeking merchants have characterized every known civilization. But the relevant fact is that at no time and no place -- not in the ancient Mediterranean, the Middle East, China, India, pre-Columbian America, or medieval Europe -- was an entire society organized by market exchange. Likewise, although we associate the emergence of capitalism with cities such as Venice and Amsterdam and techniques such as joint-stock companies, insurance, double-entry bookkeeping, and floating debts, such mercantilism involved small numbers of people dealing mostly in luxury goods. A true market society could only emerge in the countryside, where over nine of ten people lived and earned their daily bread. (pp. 17-18)

This is an interesting argument because it overturns our intuition that capitalism should have emerged within cities since that's where the long-range trading was going on in the high Middle Ages.

Well, that turns out to be all wrong. Capitalism emerged -- or was 'invented' -- because the English landed nobility had given up on feudalism in the wake of the bubonic plague and was trying to find a way to maximize revenue through appropriating common lands, enclosing those fields and pastures for cultivation or sheep-raising, renting or leasing this land to farmers, and seeking "larger profits through more efficient husbandry, cost-cutting, and specialization" (pp. 19-20). This increased the incentive for expanding the amount of land devoted to innovative agriculture, and, says McDougall:

A whole society began to move from a system based on communal rights and responsibilities to one based on property rights and contracts. (p. 20)

The picture that McDougall sketches is not a pretty one:

Since proprietors of whatever rank had to concur in the disposition of commons, lords intimidated, bought out, or found reason to dispossess as many rights-holders as possible, then negotiated the terms of enclosure with the rest. Neighbors were pitted against neighbors, even those linked by marriage or kinship. (p. 20)

Not pretty or gentle, but it brought forth the most productive system that the world had ever seen, and the greatest of its products was America:

The creation of the United States of America is the central event of the past four hundred years. (p. XI)

That's a rather impressive production record, and McDougall -- in this first volume of a planned trilogy -- shows how it happened. Briefly, it happened because the shift to a capitalist society in England created a nation of hustlers, and the most hustling of them went to America, where they hustled everybody else -- the Indians, the Spanish, the French the Dutch, the British -- and even each other. Constantly.

Otto von Bismarck . . . or maybe Stephen Leacock, but who the hell cares about him . . . is supposed to have said:

God takes care of fools, drunks, and the United States of America.

It seems, however, that Americans have always been taking care of themselves. Individually.


Post a Comment

<< Home