History of Capitalism | No capital without the state

McDonald's in the Soviet Union: The contradictions of capitalism, which are well known to us, are only the end of the story. Photo: AFP/VITALY ARMAND In view of global devastation, it is once again stated with astonishing clarity: capitalism is in crisis. But do we even know what we're talking about? In order to get to the bottom of the phenomenon of capitalism, Sven Beckert has spread out over a thousand years of economic history on over a thousand pages. The Harvard University history professor returns, just over a decade after publishing his study of the role of cotton in the rise of capitalism, to reorder the world history of the system we live in today. Starting from Aden in today's Yemen and ending with the "container revolution" of Amazon & Co., he illuminates the diverse aspects of the capitalist system. There is therefore little unification in this almost marathon-like work. Instead »Capitalism. A World History” inevitably raises the question of how the focus can be set depending on one’s own perspective and interest in knowledge.

Beckert points out that commercial activities, which had the aim and result of increasing money in antiquity and later in the Middle Ages, do not automatically represent capitalism. The decisive prerequisites for speaking of specifically capitalist economic activities are the commodification of labor and the locally successful alliances of traders with their state. These gave rise to institutions that particularly favor the establishment and protection of capitalist relationships - such as property rights, labor regulations and mechanisms for gaining the consent of broad sections of the population. In contrast, in the first chapters of the book, Beckert sees “rivulets” of money-producing activities in an ocean of non-capitalist relationships. Entire centuries passed before these trickles swelled and penetrated social relationships in a way that seems natural, self-evident and omnipotent to us today.

For Beckert, the equivalence of goods is only the summit of an immeasurable mountain of violence and coercion.

We have known since Marx: Under capitalism, goods are not produced primarily for people's needs, but for exchange, which results in an increase in the money originally invested. But how does this work socially? According to Beckert, the prevailing view is that the real characteristic of capitalism is freedom and that this takes place on the basis of a voluntary exchange of equivalents. But this is a narrative that ignores a long chain of mediations. The equivalence of goods is only the summit of an immeasurable mountain of violence and coercion.

In contrast, Beckert's reconstruction of a thousand years of history of the transition to capitalism, its establishment and its transformations shows that in no phase could capital have asserted itself or maintained itself permanently as the dominant mode of production without resorting to violence - both in the heart of the industrial centers and in the originally non-capitalist regions that were subject to its rule. Using countless micro-stories from different parts of the world, he tries to show that capital is anything but independent, but constantly requires the support of the state.

The reference to the violence that characterizes capitalist production relations quickly reveals to the reader Beckert's next topic: the exploitation of land and labor in the global south. Beckert emphasizes that the operation of the cotton industry that emerged in northern Europe, particularly England, in the 19th century would not have been possible without its connection to slave labor in the southern United States and the Caribbean.

However, the nature of the connection between the Industrial Revolution and the plantations – or between formally free wage labor and unfree labor – has been the subject of contentious debate for decades. Other researchers such as John Clegg emphasize that slavery conditions existed in the regions mentioned above. But when Europe urgently needed imports, particularly to expand cotton production, the Industrial Revolution had already begun. The plantations in the Caribbean and in the southern states of the USA did not provide the decisive impetus for capitalism; Rather, capitalism in the European centers had already developed its own internal dynamics and logic, which it only later transferred to non-capitalist spaces and implemented there.

An original aspect of Beckert's reading concerns the reorganization of the relationship between state and capital in the emerging neoliberalism, which he thinks together with the decolonization process of the former colonies. Beckert does not see neoliberalism as the implementation of “less state”. Rather, it describes a capital that now has the enviable opportunity to choose the state that suits its interests in order to operate and invest there.

And this is where the role of decolonization comes into play: When, after the Second World War, the colonies began to formulate the demand for their own sovereign state - a major role played by the fact that the armies were reinforced by large masses of soldiers from the colonies - the demand for independence gained considerably in legitimacy. According to Beckert, this process meant the establishment of nation-states in the former colonies that did not reject capitalism, but rather preferred indigenous capitalism to one determined by others.

In these regions, the development of the domestic capitalist economy required protection from international competition. In order to develop their economies, countries like Egypt, Ghana and India needed to protect their nascent economies. According to Beckert, this “economic nationalism” of the postcolonial states – along with Keynesianism in the West, socialism in the East and a strong workers’ movement – ​​was one of the developments that neoliberal thinkers like Hayek turned against.

Neoliberalism viewed the “resource nationalism” of the Global South and its demands for a new international order as a threat to the functioning of free markets. They did not advocate a mere withdrawal of the state, but rather a redefinition of its role: instead of the state interventions introduced in the 19th century, the focus was on the creation of supranational organizations and treaties in order to "keep in check an increasingly empowered and mobilized population and an ever-increasing number of recently decolonized states."

The postcolonial states tried to resist this development. According to Beckert, the North-South Summit in Cancún in 1981 represented the “peak and end” of these efforts. Ronald Reagan proclaimed that “what the world needed (…) was not a new international economic order, but trade liberalization and a commitment to ‘economic freedom’”. Foreign capital maintained a strong position in many postcolonial states, and some of the new economies began to adapt to export-oriented industrialization from the 1960s onwards, thereby increasingly integrating themselves into a new international division of labor.

From the 1970s onwards, capital gained ever greater international mobility. The “multiplication of legal areas in the wake of decolonization” now opened up the possibility of circumventing regulations and taxation by changing locations. Capital was increasingly able to choose from a growing number of competing states and production locations where to settle and where individual phases of production and circulation took place - or, as Beckert puts it, to choose "its" state. According to Beckert, the process of decolonization also seemed to confirm Werner Sombart's prediction that capitalism would increasingly establish itself in Asia and Africa and develop into a "colored" capitalism.

Sven Beckert is not the first to try to highlight the central role of the Global South in the emergence, establishment and reproduction of capitalism against a Eurocentric narrative. Before him, representatives of “black Marxism” such as C.L.R. James and Eric Williams as well as the anonymous and largely unknown actors in the history of the global South themselves. Just think of the slave revolution in Haiti, also mentioned by Beckert, or the workers' uprisings in Senegal that took place in 1919.

It is nevertheless an impressive feature of Beckert's contribution to the history of capitalism that he ventures this enormous geographical and temporal range, which, as expected, makes it difficult to always trace a consistent line of argument. Nevertheless, a common thread shines through: the history of capitalism is one of the constant support of capital by the state. Only this makes capital possible and from this emerge the different historical forms that this relationship takes worldwide - depending on the phase of capitalist accumulation and the political balance of power between capital and labor.

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