‘Capitalism: A Global History’ by Sven Beckert review

‘How did we get from a world in which the logic of capital was narrowly limited to only a few spaces to one in which it determines almost everything?’ This question drives Sven Beckert’s ambitious history of capitalism, a book which makes a bold argument: that the rise of capitalism was not inevitable and that capitalists alone could not have achieved it. ‘They needed allies’, Beckert writes: ‘the state’.

Scholars have spilled too much ink over precisely when and where capitalism began, although Britain during the Industrial Revolution is a leading contender. Beckert’s view is that it is impossible to know for sure. Capitalism was ‘born global’ and emerged ‘not in any one place but in the connections between various places’. We can detect its earliest pulsations in the trading activities of medieval Islamic empires, the Indian Ocean world, Song China, and parts of Western Europe. Capitalist societies emerged in places where merchants could capture political power. They encountered stiff resistance in India, the Ottoman Empire, and China but had a freer hand in parts of Europe. Yet it was in some of the most unexpected locales – socially fragile and unencumbered by strong feudal or religious institutions – that capitalists could refashion the world after their image. Such places included 16th-century Potosí, the silver city high in the Andean altiplano, the sugar-rich plantations of Barbados, and the Bajío plateau in Mexico.

It was in the New World, therefore, that the marriage between capitalism and the state created the world in which we live today. It is significant that modern capitalism is rural in origin, as fields of sugar, cotton, and coffee marched ever deeper into the interiors of North and South America. While the state provided tools for colonisation and expropriation – what Beckert calls ‘war capitalism’ – merchants and plantation owners yielded the capital that would power the Industrial Revolution. This rural perspective allows a fuller appreciation of how Atlantic slavery powered the capitalist revolution. Following Eric Williams, Beckert shows that slavery was central to industrial capitalism. American sugar and cotton economies were the sites of technological and managerial innovations. More importantly, they provided the capital that allowed British inventors such as James Watt to develop an improved steam engine and British merchants to construct the first textile mills. In Beckert’s view the 19th-century mills of Manchester and Glasgow are significant to the story of capitalism only when they are paired with something far darker and more satanic: the slave plantations in the American South and the Caribbean.

Rather than the Industrial Revolution, it is the last third of the 19th century that Beckert considers ‘the most monumental turning point in the global history of capitalism’. These decades saw a series of crises – the 1848 revolutions, the American Civil War, the Panic of 1873 – that decimated the foundations of mercantile capitalism. Capital and capitalists retreated behind fortified national boundaries. States had nurtured the Industrial Revolution through protectionism and access to resources, but they now took on far more ambitious roles, transforming entire landmasses. As it expanded westwards the United States used law and land titles to refigure Native American territories into commodity frontiers. In Tokyo, Meiji-era bureaucrats took note. They recruited American experts to turn Hokkaido, populated by Ainu pastoralists and fishing communities, into their own California, with railways, towns, and modern farms. Hokkaido became the precursor to Japan’s colonial exploits in Taiwan, Korea, and Manchuria.

Economic nationalism unleashed a wave of new colonial ventures. Economic nationalists, whether in Berlin or Buenos Aires, saw the US as a model to be copied and a force to be feared. The US possessed vast markets and resources within its national borders. It pioneered Fordism, a model of mass production and consumption embraced by Hitler and Stalin alike. In the catastrophes of the 20th century Beckert sees a toxic mix of greed and fear which spiralled into Darwinian competition over land and labour. Within this maelstrom, state power expanded in hitherto inconceivable ways.

By the Great Depression the state was also becoming a tool for regulating and managing capitalism. Countries such as Sweden began constructing elaborate welfare states. But it was in the Global South, as empires crumbled, that state-led transformations were most dramatic. Whether it was state planning in India, or efforts in Nigeria to indigenise the economy, statist economic policies spread throughout the decolonising world. Nor were they outliers: state planning by New Delhi is more understandable when one acknowledges similar planning projects hatched in Tokyo, Paris, Ankara, and Mexico City. For all their unpopularity today, statist policies did lead to growth, which, after flatlining economic performance under colonialism, was no small achievement.

Beckert’s view of capitalist history sees ‘islands’ of capitalism emerging in a world operating under a very different economic logic. By the start of the neoliberal era these islands had drained the seas between them. Beckert is critical of neoliberalism, but he does point to how it has helped the Global South reclaim ground ceded centuries ago. The neoliberal era witnessed ‘the most dramatic wave of industrialization the world had ever seen’, with East Asia becoming the new industrial heartland. Such growth has also put to rest those strains of neo-Marxist dependency theory which argued that the non-Western world could never truly prosper in a capitalist system.

Beckert cites Fernand Braudel as an inspiration and, beyond the references to islands and seas, Capitalism is Braudelian in scope: 1,100 pages bristling with endnotes in various languages. This is the story of global capitalism in its totality, from Boston to Burkina Faso, Saint-Domingue to Shenzhen. It should be read by anyone curious about the most powerful dynamic which has shaped the modern world.

• Capitalism: A Global History
  Sven Beckert
  Allen Lane, 1,344pp, £50
  Buy from bookshop.org (affiliate link)

Dinyar Patel is Associate Professor of History at the S.P. Jain Institute of Management and Research in Mumbai.