Thinking About Capitalism

Sven Beckert is a Harvard economic historian noted for his masterful study of the rise and dominance (and fall) of cotton manufactory in the global economy: The Empire of Cotton, A Global History (2014). Beckert situates cotton’s emergence as a leading commodity in the world economy within the framework of capitalism’s evolution over several centuries.

Building on the subtext of capitalism’s “shape-shifting” that accompanied cotton’s rise and fall, Beckert has recently published an ambitious history of capitalism: Capitalism, A Global History (2025). In 1087 pages and 255 pages of extensive, supplemental notes, Beckert offers a well-researched, detailed account of capitalism’s trajectory-- from the early efforts of traders-for-profit to today’s global reach of giant, multinational corporations, from modest merchant purses of accumulated capital to unimaginable troves of capital concentrated in only a few privileged hands.

Beckert’s work is impressive, placing capitalism’s rise in a global context, finding seeds of its emergence throughout the world, and denying the chauvinist view that capitalism could only emerge in a European setting. At the same time, he does not deny that capitalism did reach its critical mass when certain vital conditions were met in Europe.

He goes to great lengths to show how “[t]hroughout history, it has been difficult to persuade people to work willingly for the benefit of others.” To drive home this seriously understated point-- a point central to understanding how capitalism differs from other modes of production-- Beckert chronicles in great detail the role of coercion in establishing capitalism. That “persuasion” began with chattel slavery and indentured labor. Even with the decline and abolition of slavery, indentures - coerced through contracts-- were transported to work under slave-like conditions. Beckert claims that in South Asia “[t]he number of people transported this way was greater than the number bought and sold by the Atlantic slave trade…”

This fact only underscores the often-overlooked long march from physically coerced labor to the circumstantially coerced “free labor” of today.

There is much that is insightful and suggestive in Beckert’s history, but nothing that deeply challenges Marx and Engels’ theory of capitalism’s birth and rise. Despite Beckert’s avowed distance from Marxism, Capitalism, A Global History does not contradict historical materialism. Beckert does accuse Marx of dismissing merchant capitalism, but that criticism dissolves when we understand that Marx and Beckert are engaged in two different projects. The object of Marx’s study is a mode of production (and circulation) centered on the commodity and on labor exploitation. Beckert, on the other hand, is constructing a chronological narrative beginning with the earliest sprouts of features that were later to be commonplace with mature capitalism, features that were found in proto-capitalism without capitalists, in primitive profit taking, in the earliest connection between buyer and seller, etc.

Perhaps Michael Roberts said it best: “But the book’s de-merit is its lack of any systematic understanding of capitalism. Indeed, it is like the work of Adam Tooze – namely, it is ‘more the how, than the why’.” [emphasis added]. Marx is concerned with the ‘why’ of capitalism; Beckert is searching for the ‘how’ of its journey.

Others besides Roberts have offered useful reviews of Beckert’s book. I would recommend Nelson Lichtenstein’s straight-forward, appreciative, and fairly comprehensive presentation of the book’s content in Jacobin.

But that is not my purpose here. Instead, I would like to examine whether Beckert’s findings have any bearing on current left perspectives and controversies.

Beckert finds an essential and ever-growing role for the state in capitalism’s trajectory: "...capital needed state support to control its masses of workers and access materials and markets. Capital thus became newly attached to the nation-state and the nation-state to capital. And because states competed with one another, this process was contagious.”

But the state is not an obsolete or a parasitic attachment to capital as some on the left argued in the wake of the rise of so-called globalization and still others have argued from the right with the intent of dramatically reducing its role. Beckert states early in his Introduction:

Capitalism, this book argues, is an extraordinarily statist form of economic life. Though the state changed over time; developed different institutional forms; grew in scale, scope, and territorial extent; and occupied more or less powerful positions within an international system of states, it always remained an essential ingredient in the capitalist revolution.

It is this bond between the state and capitalism that birthed an even more intimate relationship between the monopoly stage of capitalism and the modern state-- a stage where cartels and monopolies dominate the state and the state works primarily for the benefit of the monopolies and the cartels. This stage-- often usefully called state-monopoly capitalism-- reigned throughout the twentieth century and continues today; the grip on the state by capital and capital's dependence on the state is even tighter now. The state is, thus, an enabler and not a hindrance to the continuing maintenance of capitalism.

Capital may be transnational, but it still needs and controls the state.

*****

Unlike most of his academic counterparts, Beckert fully understands the powerful historical role of the Soviet Union in bending and shaping the trajectory of twentieth century capitalism:

...it could be argued that the greatest beneficiaries of global communism were not Russian but Western European and American workers. Labor politics might have seemed local, but they played out on a global stage, just like capitalism more broadly. Capital was politically weakened by communism’s removal of people and territories from the capitalist world, and by the bargain it made with an increasingly powerful state and mobilized workers…[E]ven some conservative Western policymakers supported social democratic policies and unions-- if only to weaken their communist competitors… It was Eisenhower who supported Reuther’s Treaty of Detroit, and who oversaw the massive public works program that built the nation’s Interstate Highway System. This coalition was the mold that formed the unprecedented political economy of the golden age [1945-1973, an era when workers’ wages tended to march in lockstep with productivity gains].

Too often, Cold War bias tends to blind commentators from understanding that the Communist alternative drove ruling classes to accept a tempered capitalism-with-a-more-human-face in the post-war period. Communism “...domesticated capitalism at the exact moment that the system faced its greatest challenges.”

The demise of the Soviet Union consequently undomesticated capitalism, unleashing its raw, brutal character under the banner of “shock therapy.” The so-called end of history-- the disappearance of the USSR and the PRC’s embrace of capitalist reforms-- opened the door wide to attacks on the gains made by working people. Austerity became the watchword for official policy. Beckert acknowledges:

The political space for the new policies emerged in part because two of the core pillars of the golden age wobbled: Labor weakened, and the Soviet Union and its sphere of influence disintegrated. These changes which came in the 1990s, undermined the need for capital owners and the state to accommodate labor, as they had been forced to do during the golden age….

The single most important postcapitalist project-- the North Star of global politics, either as friend or foe, for many decades-- suddenly unraveled with astounding celerity in the late 1980s and early 1990s. Overnight, the political calculus in the capitalist world changed. Even more consequentially, capitalism gained new breathing room by expanding into vast new areas of the globe-- into the homes, workplaces, and public spaces of billions of Russians, Chinese, and Eastern Europeans.

It is impossible to understand the raw, brutal edge of today’s global politics without grasping the impact of the demise of the Soviet Union.

*****

For those investing in a future shaped by the BRICS alternative, Beckert reminds us of the earlier promise advanced by OPEC, the coalition of oil producers: “The ‘oil revolution’ in the Global South for its promise to redistribute some of the world’s wealth, was a turning point, the first time that a group of countries from the Global South used their control over an essential raw material to shift the global economy’s basic structure… By building new solidarities, the resource rich countries of the Global South attained a more powerful voice not just in their own affairs but also in the affairs of the world economy at large.”

Spurred by the US and European support for Israel in the Yom Kippur war of 1973, Middle Eastern states acted to reduce oil shipments to Israel’s allies. This united act of solidarity with those fighting for the cause of Palestine demonstrated the potential of joint action for empowerment. But the fate of Palestine was advanced no further. And, as Beckert shows, the “solidarity” succeeded in producing the further integration of the oil-producing states into the global capitalist system, into securing for themselves a greater share of the oil booty for those states, but achieving little advancement-- even regression-- for the Global South as a whole. Today, the Middle Eastern oil producing countries, with the exception of Iran, stand on the sidelines or support Israel in the genocidal destruction of Gaza. The fractures in an expanded OPEC existing today-- the political impotence, the failure to act in concert, or to honor quotas-- demonstrate the limits of concerted action by countries deeply embedded in a competitive global market economy and guided by overriding self-interest.

It’s no surprise that an alignment made up of countries with a strong commitment to capitalism and with even more diverse interests, like today’s BRICS, is proving to have even less collective impact on global inequalities and political conflicts.

*****

Sven Beckert’s Global South of the twenty-first century is unrecognizable from the Global South depicted by far too many leftists in the Global North.

Among the most extraordinary changes was the formation of new modes of capital: Local capital owners and international investors forged new agglomerations of capital in what came to be called the Global South. Building upon the novel nodes of state power that had emerged in the wake of decolonialization, these superclusters of capital powered the world’s most significant industrialization ever. In the process, the world’s working class expanded at lightning speed… [my emphasis]

At first, the so-called Four Tigers-- Korea, Taiwan, Hong Kong, and Singapore-- were in the vanguard, but other countries swiftly industrialized as well, including Indonesia, Malaysia, Thailand, Mexico, and Brazil. No part of the world, however, industrialized as quickly and as radically as China. The value of the world’s manufacturing output increased almost five times in the years between 1973 and 2008, most of it coming from the Global South, with China contributing a stunning 31.5 percent by 2008. That year, China manufacturing added more value than the whole world had produced in 1973, a time when scholars in the North Atlantic area were convinced that Europe’s marked manufacturing prowess gave it an enduring global advantage. In retrospect, the theories they developed then to explain such a divergence seem like dated artifacts, better relegated to the status of a window on Western self-fashioning than to social science analysis.

Unfortunately, much of the North Atlantic left is under a similar spell, viewing the Global South as though they were still backward colonies. Having given up on workers in the Global North (they constitute an “aristocracy of labor”!), left intellectuals cling to an outdated, stereotypical picture of a river of wealth only flowing North to wealthy countries (and their workers!), while draining the South of its wealth (and that of its workers). As Beckert shows, that is not an accurate picture of the Global South or the North. Largely neglected in left conversations are the many multinationals based in the Global South like The Gerdau Group (Brazil), Ambev (Brazil), ARAMCO (Saudi Arabia), Tata (India), Dr. Reddy’s laboratories (India), to name a few.

To be sure, the mechanisms of capitalist exploitation of the Global South are still often legacies, organizations controlled by capital based in wealthier countries. Indeed, many monopolies, or near monopolies are the product of more than a century of concentration, beginning in the Global North. But to miss the story that Beckert tells is to underestimate the adaptability of capitalism and to misunderstand its logic.

Beckert offers the following telling note on capitalism’s mutation: “The richest 1 percent in India now control more of India’s income than the richest 1 percent (Indian and British) had under British colonial rule, 22.6.”

Thus, while corporations located in the Global North continue to exploit resources and workers of the Global South, many rapidly growing, industrialized countries of the Global South have become class societies mimicking those of the Global North. With often-unprecedented growth, their economies have distributed that wealth according to the logic of capitalism, leaving their working people far behind.

Despite the remarkable economic growth in Asia, especially the PRC and India, “almost half of the world’s people-- 46.4 percent, or a total of 3.6 billion-- live on $6.85 or less a day.”

Certainly, the legacy of colonialism plays a significant role in explaining this tragic fact. However, capitalist social relations-- class inequalities-- explain why that fact remains stubbornly with us today in the face of the enormous economic growth enjoyed by the Global South. The rapacious US and European corporations continue to exploit the Global South at every opportunity. But understand that the class societies constructed on the decades of explosive growth in the Global South owe as much or more to exploitation of workers by their own domestic capitalists. In the end, it is not some amorphous, class-neutral identity called the “Global North” that drains all the wealth and impoverishes working people in the Global South, but the capitalist system in general. Wherever it takes root-- North or South, East or West-- it reproduces class societies, inequalities, and injustices.

A final word from Sven Beckert:

The reemergence of Asia was a rebuke not just to generations of racist analysis that had posited a transhistorical superiority of Western civilization but also to some neo-Marxist theorizing of the 1960s and 1970s, which had seen the world economy as structured in ways that would not allow for the emergence of prosperity outside the Western industrial heartlands. As it turned out, the opposite was true….

Of course, it is vital that the EuroAmerican left defy their own ruling classes to stand against the aggressive action directed at the former colonies, the so-called Global South. It is the highest form of internationalism to defend the right of nations and states to self-determination in the face of domination and aggression by other countries, even if they are ruled by tyrants, theocracies, or a cabal of capitalists, as is true in the Global South.

It is another thing entirely to overlook or underplay the role of capitalism in creating the misery and injustice visited upon the working people of the Global South. To ascribe that misery and injustice to a vague geographical identity like the Global North is to deflect attention from the mechanism that systematically and historically extracted the product of labor in both the Global North and South. Labor exploitation knows no geographical limits, nor does it grant favoritism to its subjects. It extracts all it can from everyone within its scope.

Capitalism is the enemy of the Global South. Socialism is the answer to global capitalism.

Greg Godels
zzsblogml@gmail.com