Capitalism and Its Critics: A Long-Term View

The following essay takes seriously that the concept originated in Europe before moving to other parts of the world. It takes into consideration that "capitalism" was coined as a central concept of social criticism as well as of scholarly analysis, a double function it has maintained, at least with some authors, up to the present time. It deals with the strange interplay, perhaps dialectics, between capitalism and critique of capitalism.

Although "capitalism" only became a broadly used concept after the second half of the nineteenth century, those who have been using it ever since do not doubt that it could also be applied to phenomena in periods of the past before the concept existed. I share this conviction.

In the form of merchant capitalism, capitalism already existed in the first millennium of our calendar, for example in Arabia, China, and Europe, though mostly just in the form of capitalist islands in a sea of predominantly non-capitalist relationships. In the form of finance capitalism, capitalism has existed since the high-medieval period in some parts of Europe; beginning in Northern Italy, and later moving its center to Antwerp, Amsterdam, and London. In the early modern period, West and East European agrarian capitalism as well as plantation capitalism overseas have shaped our image of capitalism as a system of repressive domination and exploitation, even violence. All of this happened before industrial capitalism - starting first in England in the eighteenth century, then in Europe and North America - became the decisive driving force of capitalist expansion globally. In the present era of globalization, these different types of capitalism coexist and interact.

When sketching such a scenario, I presuppose a definition of capitalism that is narrower than market economy in general, but broader than industrial capitalism based on wage work en masse. I want to emphasize decentralization, commodification, and accumulation as basic characteristics of capitalism. On the one hand, it is essential that individual and collective actors make use of (property) rights that enable them to make economic decisions in a relatively autonomous and decentralized way. On the other hand, markets serve as the main mechanisms of allocation and coordination; commodification permeates capitalism in many forms, including the commodification of labor. Further, capital is central, which means utilizing resources for investment in the present with the expectation of higher gains in the future, accepting credit besides using savings and returns, dealing with uncertainty and risk, and aiming for profit and accumulation. Change, growth, and expansion are inscribed, however, in irregular rhythms, with ups and downs, interrupted by crises.²