After the collapse of the housing market in 2008, professional historians gave birth to a new sub-field of history usually referred to as “the new history of capitalism.” Economic history is hardly novel, but the new history of capitalism takes the approach that capitalism is the “thing” that needs to be explained. In the past decade, this field has become one of the most fashionable trends in the history profession, with centers for the study of capitalism being established at Cornell and the University of Georgia.
Predictably, the scholarship that falls under this label is replete with problems. Most self-described “historians of capitalism” know nothing of economic theory even as they try to incorporate it into their writings. Seth Rockman, from Brown University, for instance, supports his analysis of antebellum Baltimore by quoting Adam Smith’s exposition of the labor theory of value. Rockman seems to be taking a sly shot at proponents of capitalism—“even your precious Adam Smith believes labor is the source of value”—but he appears to be entirely unaware that economists abandoned the labor theory of value more than a century ago.1
These historians have also uniformly accepted that slavery and capitalism are inextricably linked. This idea has been around since at least 1944, when the Marxist historian Eric Williams published Capitalism and Slavery, arguing that British industrialization depended on the slave economy of Barbados.2 But the idea has evolved to the point that historians have established a consensus on claims that defy empirical substantiation.
Rockaman, again, provides the perfect example in claiming that slavery was “a labor system that accelerated economic development.”3 How a historian can empirically demonstrate that any economic system accelerated economic growth is beyond me. What exactly is his basis of comparison? An alternate timeline in which slavery never existed? Edward Baptist attempts to support this idea by connecting antebellum cotton production to gross domestic product to demonstrate that “6 percent of the total US population” produced more than half of the national output. His argument, though, depends on a remarkably inaccurate understanding of GDP, which historian Phil Magness has adeptly demolished .4
But the primary issue with the new literature is that while historians have taken “capitalism” as their primary subject of inquiry, it seems nearly impossible to identify what, exactly, capitalism is. This problem is also nothing new. In 1996, historian Gordon Wood observed that “the confusion [over the term ‘capitalism’] has gotten so great that we now have competing and contradictory studies that show that the first two centuries of early American history were either capitalist from the beginning or never capitalist at all.”5 At that time, though, economic histories were on the decline. By 2008, when the “new” history of capitalism was born, the definition problems had been long forgotten (or conveniently ignored).
Now we see historians discussing capitalism in ways that suggest that “capitalism” is defined as “everything that has or has not ever happened.” Henry Kamerling, for instance, in Capital and Convict, argues that capitalism is the reason why the United States evolved into a carceral state.6 His basic argument is that politicians and prison wardens acted in their own self-interest in expanding the prison system. Self-interest, of course, is ubiquitous in human history—it’s part of human nature, despite Marx’s theory to the contrary. Although self-interest is an important concept in understanding human action, Kamerling’s analysis could easily be transposed onto a history of the Soviet Union to argue that capitalism gave rise to the communist gulag.
Sven Beckert, in his highly praised Empire of Cotton, takes another expansive approach to defining capitalism. Coining the provocative term “war capitalism,” Beckert writes that “modern capitalism privileges property rights, but this earlier [capitalist] moment [of colonial expansion] was characterized just as much by massive expropriations as by secure ownership.”7 If capitalism is both the protection and violation of private property, then what is not capitalism?
Other histories of capitalism define it according to their own implied criteria. Rockman’s idea of capitalism rests on Marxian exploitation, predicated on the fallacious labor theory of value. Several scholars appeal to notions of “modernity,” another vague concept that they typically characterize according to technological innovations, evolving business practices, or emerging financial institutions. Ultimately, profit-seeking self-interest undergirds many studies of capitalism, allowing scholars to include any form of state activity under the capitalist label. Histories of police abuse, asset forfeiture, mass imprisonment, foreign intervention, and state-mandated racial discrimination all fall under the umbrella of “capitalism” because the many agents of the state are (surprise, surprise!) responding to institutional incentive structures.
The many broad and contradictory notions of capitalism serve no analytical purpose, but they do seem to serve a political one: encouraging students to associate capitalism with everything bad in human history. Although there are certainly many scholars who openly advocate socialism, the majority of historians, at least, still dance around the topic. When pushed, they are likely to acknowledge that communism was an abysmal failure. The new strategy is not to positively agitate for socialism, but rather to vaguely suggest “alternatives” to capitalism, while broadening the definition of capitalism to apply to quite literally everything except full-blown socialism.
Proper study of economics, of course, makes important distinctions between various types of state interventions. The lack of intervention into the economy is generally recognized as laissez-faire capitalism. Correctly or not, historians typically attribute this economic view to Adam Smith’s Wealth of Nations, which was written in response to mercantilism—the practice of governments granting monopoly privileges to companies engaged in international exchange. Corporatism, of course, is a similar form of privilege granted domestically.
Other interventions, such as taxation and regulation, hamper private companies. In some cases, the government nationalizes an industry entirely, as is common with education systems. By controlling the money supply, governments also interfere with the credit institutions, manipulating the available supply of loanable funds.
Each of these categories of intervention has distinct and important causal implications, which is why economist—even when employing problematic methods of inquiry, such as econometrics—have long tried to find ways to isolate the many dynamic variables that affect economic development. Ideally, historians should do the same, making attempts to isolate historical particularities to study how specific variables influenced historical change. Instead, historians have more commonly begun to adopt equivocal labels designed to homogenize, rather than isolate, these particularities.
As the scholarship developed, mercantilism became “merchant capitalism.” Corporatism became “crony capitalism.” Hampering interventions became “regulated capitalism.” Nationalized industries became “state capitalism.” Monetary manipulations became “finance capitalism.” Other labels cropped up, such as “industrial capitalism,” “plantation capitalism,” “commercial capitalism,” or Beckert’s recently coined “war capitalism,” to name only a few.
Eventually, the qualifiers seemed unnecessary. By dropping them, all of these various interventions — as well as the lack of interventions that characterized “laissez-faire” — could appropriately be simply labeled “capitalism.” Without an ounce of irony, historians today could claim that Adam Smith wrote the Wealth of Nations to establish “capitalism” as an alternative to the prevailing system of “capitalism” that had previously characterized Western economies.
These terminological problems have gone largely ignored because sound historical analysis is not the goal. The true aim of these “scholar activists,” as many academics have begun calling themselves, is to propagate socialism by redefining capitalism to encompass every evil of human history. They typically avoid advocating any specific economic system at all. They only want people to think about “alternatives to capitalism.” But with their broad, and often contradictory, conception of capitalism, it is easy to recognize the “alternative” they have in mind.
- 1. Seth Rockman, Scraping By: Wage Labor, Slavery, and Survival in Early Baltimore (Baltimore: Johns Hopkins University Press, 2009), 17.
- 2. Eric Eustace Williams, Capitalism & Slavery (Chapel Hill, NC: University of North Carolina Press, 1944).
- 3. Rockman, Scraping By, 7.
- 4. Edward E. Baptist, The Half Has Never Been Told: Slavery and the Making of American Capitalism (New York: Basic Books, 2016), 321–22.
- 5. Gordon S. Wood, “The Enemy Is Us: Democratic Capitalism in the Early Republic,” Journal of the Early Republic 16, no. 2 (Summer 1996): 293–308.
- 6. Henry Kamerling, Capital and Convict: Race, Region, and Punishment in Post-Civil War America (Charlottesville, VA: University of Virginia Press, 2017).
- 7. Sven Beckert, Empire of Cotton: A Global History (New York: Vintage Books, 2015), xvi.
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