Donald Sassoon
* * *
The Anxious Triumph
A Global History of Capitalism, 1860–1914
Contents
Acknowledgements
List of Tables
Introduction
PART ONE: The Condition of the World 1 New States, Old States
2 The Lives of the People
PART TWO: Becoming Modern 3 Westernizing the East
4 The Allure of Industry
5 The State
6 Taxation
7 Laggards and Pathbreakers
8 Russia: The Reluctant Laggard
9 The American Challenge and the Love of Capital
PART THREE: Involving the Demos 10 Building the Nation
11 A Yearning for Democracy Sweeps the World
12 Keeping the ‘Outsiders’ Out
13 Suffrage
14 Private Affluence, Public Welfare
15 Managing Capital and Labour
16 God and Capitalism
PART FOUR: Facing the World 17 Europe Conquers All
18 The Great Colonial Debate: The French and the British
19 The First Global Crisis
20 Protecting the Economy
Conclusion: Still Triumphant? Still Anxious?
Bibliography
Notes
Index
About the Author
Donald Sassoon is Emeritus Professor of Comparative European History at Queen Mary, University of London. His previous books include One Hundred Years of Socialism (1996), Mona Lisa (2001) and The Culture of the Europeans (2006), all widely translated. He gives lectures at universities and conferences all over the world.
For Marina.
All successful social systems appear to be alike; each unsuccessful social system appears to be unsuccessful in its own way (with thanks to Tolstoy)
Acknowledgements
My thanks go to Marina Lewycka for reading the manuscript carefully, advising, editing, encouraging, disagreeing and agreeing, and everything else; Lauro Martines, a wise man, for reading the manuscript and offering wise advice; Paul Auerbach for doing the same; Candida McDonogh for her brilliant editing; Richard Mason for his brilliant copyediting; Toby Mundy, of course, as well as Stuart Proffitt; the Maison des Sciences de l’Homme for having me in Paris almost every year; the Leverhulme Trust for a grant enabling me to take a year’s leave of absence; the University of Padua for a visiting professorship in 2017; the British Library and the Bibliothèque Nationale de France.
List of Tables
Table 1 Sovereign States in the World, 1900
Table 2 States in Sub-Saharan Africa, 2019
Table 3 European States, 2019 (42 States)
Table 4 Urban Population as a Percentage of Total Population
Table 5 Weekly Per Capita Consumption, 1860–1913
Table 6 Life Expectancy at Birth in Selected European Countries
Table 7 Infant Mortality Rate in Selected Countries, 1881–1911
Table 8 Per Capita GDP in Some European Countries and the USA, 1870–1913
Table 9 Per Capita GDP in Some European Countries and the USA, 1950
Table 10 League Table of Industrial Development, 1810–1910
Table 11 The Spread of the Suffrage for General Elections before 1914: Selected Countries
Table 12 USA Presidential Election, 1912
Table 13 Western Countries’ Colonial Acquisitions, 1880–1914
Table 14 Extra-European Territory Held by European Powers
Table 15 Independence from the United Kingdom of Colonies and Protectorates
Table 16 Per Capita Gross National Product in Europe, 1870–1910
Table 17 Industrialization Levels Per Capita, 1860–1913
Table 18 Relative Wages in Engineering, 1850–1905
Table 19 Exports per Inhabitant, 1840–1910
Table 20 Protective Tariffs, c. 1875–1913
Introduction
Globalization is the name we currently give to the progressive integration of the world, a process that started centuries go. It denotes not only a massive expansion of trade and production but also a remarkable and unprecedented growth and convergence in consumption. Increasingly, we buy similar products, eat similar food (hamburgers, pizzas, sushi, pasta, fries, ‘Chinese’ food, curries, tacos, couscous), drink the same beverages (cola, coffee, tea, beer), wear the same clothes (jeans, T-shirts, sneakers) with the same brands (Levis, Quicksilver, Nike, etc.), read the same best-sellers (J. K. Rowling, Dan Brown, Ken Follett), listen to similar music, and watch the same kind of television programmes.
Underpinning this worldwide system is an equally global ideology, market capitalism, which no longer needs defending, though it is constantly attacked. In its western heartland, no significant countervailing force opposes capitalism. In the rest of the world, opposition is muted. In the emerging economies of China, Brazil, and India there is little opposition to capitalism per se; public debate centres on the variety of capitalism that should prevail. Islamic fundamentalism, seen by some as the remaining challenger of the so-called ‘new world order’, has little to say about the economy.
The aim of this book is not to revisit the initial stages of capitalism, but to investigate the period between the second half of the nineteenth century and the Great War, when capitalism triumphed and became universally accepted, when most of its opponents acknowledged that it was inevitable, perhaps even desirable. It will examine how the elites responded to the challenge of industrial capitalism and how industrial progress could be achieved while keeping dissent to a minimum by creating a sense of national community, or a patriotic spirit, or using the state to regulate capitalism, or by conquering new territories.
In the eyes of many liberal ideologues the profit-maximizing entrepreneur was and is the real hero of capitalist development. He battles against politicians, bureaucrats, petty legislation, uppity workers and voracious trade unions. He identifies a sought-after demand; he works out how to satisfy it; he develops new production methods, thus increasing productivity; he bullies or begs banks into lending him money for investment; or he risks his own family fortune or his own hard-earned savings. Finally, having created jobs for a usually ungrateful workforce and having satisfied customers who did not know they needed something, he finds he has to protect his rightfully earned gains from the rapacious hands of the tax collector. Thanks to this entrepreneur and him alone, society and civilization have moved one small step forward towards happiness and prosperity. He is, above all others, the real creator of real wealth.
This is, of course, a free-enterprise fantasy, almost on a par with that held by anti-capitalists of yore, for whom capitalists were sleazy, heartless, cigar-chomping, arrogant, callous, money-obsessed rich thugs, devoid of human decency and delighted to grind the faces of the poor (to use a biblical expression, see Isaiah 3:15).
In reality entrepreneurs, like workers, come in all shapes and sizes. They do not have a single aim, do not speak with a single voice, have no unified political strategy. Some try to obtain as much as possible from the state; others are not interested; most hate politicians and politics but need them; and most assume that their interests are the same as those of the wider collective. Politicians agree, for it does not require great perception and intuition to see that prosperous capitalism is better than failed capitalism: more jobs, more money, more taxes, more consensus.
Capitalism is a process difficult to define since the presence of a few capitalists and of a few capitalist enterprises does not make a society ‘capitalist’. That what we call ‘the Industrial Revolution’ started in the United Kingdom is uncontroversial. What is controversial is when capitalism started. Processes, unlike wars and regimes, do not sta
rt on a precise date. There were people one might call ‘capitalists’ well before one could speak of an industrial revolution. Imagine, for instance, a weaver in ancient Mesopotamia, who hires workers, provides them with the tools and the raw materials, and pays them a salary. This entrepreneur would be recognized by Karl Marx himself as a ‘capitalist’ since he owns the means of production (the capital), pays wages to his workers, and derives what Marx would have called ‘surplus value’ from selling the cloth, yet no one would say that ancient Mesopotamia was a capitalist economy, even though there were 13,200 weavers in its main city, Ur, in c. 2000 BC at the time of the third Sumerian dynasty; the basis of the economy was in agriculture, and trade and production were mainly in luxury goods such as terracotta plaques.1 In ancient Rome, slaves often worked in mines and in the fields and as servants in the homes of patrician families. There were also entrepreneurs such as Quintus Remmius Palaemon, a former slave (mentioned, disparagingly, by Suetonius in his De illustribus grammaticis, as being arrogant and ‘especially notorious for acts of licentiousness with women’).2 Palaemon, who lived at the time of emperors Tiberius and Claudius, made considerable money not only from his teaching and his vineyard but also from his clothes-making workshop. He thus had a presence in all the main economic sectors: agriculture, manufacturing, and the service sector.3
One should not underestimate the technological sophistication of the economy of Ancient Rome: there was considerable use of money; trade was thriving; and production and productivity levels were probably as high as in medieval Europe, a thousand years later.4 But, again, no one would suggest that Imperial Rome was a capitalist society. Artisans and entrepreneurs were regarded as second-class citizens, which is why we know so little about them. The blown glass, metal weapons, and ceramic pots produced by these early ‘capitalists’ were closely regulated by the authorities. Here too agriculture remained the fundamental economic activity, and artisans and manufacturers were a small minority.5
In Carolingian Europe (ninth century AD) there was considerable trade, not only in the Mediterranean but also in northern Europe (the North Sea, the Baltic Sea, and the Rhineland). This tended to focus on luxury goods manufactured by craftsmen, but it was remarkably global, stretching from old Viking trading outposts in present-day Denmark to Baghdad, centre of a trading network that stretched all the way to India and China.6 In those days the Muslim and the Byzantine worlds were far more ‘advanced’ than northern Europe, while the British Isles certainly lagged behind the continental countries.
In Bologna, in 1294, there were 1,700 cordovaneri (leather workers) organized in corporations whose main aim was to block competition. Inside each corporation, though there were inequalities, there was a desire to maintain a reasonable equilibrium between the various masters to ensure stability and contain competition, which is why it was forbidden to poach workers from other producers or to store excessive quantities of raw material.7
In Florence, between c. 1340 and c. 1530, the wool industry had capitalist characteristics – labourers constituted between one-third and one-half of the workforce of the city.8 These workers, part of the labouring classes or popolo minuto (some of whom were immigrant workers from as far as Ragusa – present-day Dubrovnik – Flanders, Naples and Cologne), were excluded from the management of the city, paid high taxes, received low wages, and were deprived of rights. The most important proletarian revolt of the Middle Ages occurred in Florence between 1378 and 1382: the tumulto dei Ciompi, the revolt of the Ciompi (wage workers employed mainly in the wool industry). This revolt led to the formation, in the summer of 1378, of a short-lived ‘workers’ government’. There were precedents, of course: in 1252 textiles workers in Ghent, in eastern Flanders, went on strike and were brutally repressed, but the Ciompi rebellion was far more significant.9
This ‘early’ form of capitalism was largely self-regulated. Even in Venice, where state control was strict, the corporations kept some autonomy.10 Centuries later, when Napoleon conquered the city and handed it over to Austria in exchange for a peace treaty in 1797, there were still 114 corporations in Venice with a total membership of 31,664.11 But the total population had long been in decline and so had exports (as had happened in other once rich Italian cities from Milan to Genoa and Florence). As the Venetian state became weaker so did local enterprises and commerce, and by 1808 the corporations no longer existed.
Yet neither the Industrial Revolution nor capitalism started in Bologna during the thirteenth century or Florence in the fourteenth century. The typical unit of production remained the small workshop run by a single artisan employing some apprentices, using simple tools. The merchants could also use the ‘putting out’ system, which consisted in providing workers, in their own homes, with raw materials, tools, even partially woven cloth, and then selling their products. This avoided what would have been the expensive and risky creation of larger units of production, such as factories.12 There were ‘big’ entrepreneurs, real tycoons, even in medieval Europe, people such as Francesco di Marco Datini in Tuscany, Jacques Coeur from Bourges in France, and Benedetto Cotrugli in Ragusa, then under Venice, one of the pioneers of double-entry bookkeeping, but they were exceptions.13
Totally unregulated ‘capitalism’, even at the origins of industry, could not exist. In ancient Babylon, the Hammurabi Code (c. 1750 BC) determined the level of wages a hired craftsman should be paid: ‘If any one hire a skilled artizan, he shall pay as wages of the … five gerahs, as wages of the potter five gerahs, of a tailor five gerahs … per day.’14 Regulation could, of course, go the other way and penalize labourers who chose to seek a better job, as in fifteenth-century England when labour mobility was controlled under the guise of combating ‘vagrancy’. Such legislation endured well into the eighteenth century not only in England but also in most of western Europe.15
The state mattered. And some states mattered to other states as well, for commercial or financial hegemonic powers were able to impose, consciously or not, international rules for global commerce. If you wanted to trade, you had to accept externally imposed criteria. Thus Venice, Bruges, and then Antwerp in the fifteenth century, Amsterdam in the seventeenth century, London in the nineteenth and the United States in the second half of the twentieth century were ‘hegemonic’ precisely because traders involved in foreign trade had to follow their rules.16
Medieval Italian cities possessed particular advantages: in the fourteenth century, northern Europe was still underdeveloped and Islam was declining, thus enabling Italian merchants to monopolize the trade of luxury items made in the east and export them to northern Europe.17 In a continent that was overwhelmingly rural, this trade was concentrated in cities, the heart of politics and culture; and since trade and commerce are even more unstable than agriculture, there was considerable anxiety.18
Flanders was not far behind Italy. The Dutch Republic, born in 1581, became a remarkable commercial and financial power, particularly in the course of the seventeenth century when it acquired some of the features of a capitalist economy, producing and exporting luxury cloth and beer and soon becoming also Europe’s main supplier of credit and finance.19 In the period 1676–1700 over half of Amsterdam’s bridegrooms ‘declared an occupation with an industrial or artisanal character’. Fourteen per cent of married men in Amsterdam were involved in textile production.20 Here too the state played an important role. In the seventeenth century Dutch cities (where effective political power resided) had an industrial policy: to attract industries by offering advantages to entrepreneurs and protecting established industries by prohibiting the removal of important raw material such as wool.21 Half of the population resided in the towns and were employed in manufacturing, and the Netherlands were ‘the most highly urbanized, most highly industrialized regions in Europe’.22 Then, in the course of the eighteenth century, during wars with England, the Dutch Republic declined.23
This coincided with the rise of industrial England. England had industries from before the period conventionally t
aken as the beginning of the Industrial Revolution (1760). There were small cloth manufacturers producing in workshops attached to their houses, employing apprentices and craftsmen. In Yorkshire and elsewhere in England, there was the beginning of a metal ‘industry’. Travelling in the mid-1720s, Daniel Defoe noted that in ‘populous’ Sheffield the houses were ‘dark and black, by the continued Smoke of the Forges, which are always at work’, and that there were plenty of cutlers.24 The urban population of England grew exponentially in the decades preceding the Industrial Revolution. By 1800, England was more urbanized than any other European country apart from the Dutch Republic.25 By 1850, in this respect it dwarfed them all.26
What contributed to the torch of ‘progress’, particularly technological advance, passing to the West and to Britain in particular? Why this ‘great divergence’, as Kenneth Pomeranz called it, between the West and the East?27 Coal production has been described as one of the main causes behind British success.28 The evidence is compelling: British coal production was 2,950 thousand tons in 1700 and 15,045 thousand tons in 1800, way ahead of all other countries.29 But there were plenty of other factors. Was it culture, laws, and religion; well-established property rights; technology; high wage levels in Europe, forcing entrepreneurs to innovate; maritime exploration and conquests; banks, double-entry bookkeeping, letters of credit? Or just the remarkable set of technological innovations that characterized the eighteenth century in Britain: the steam engine (Thomas Newcomen, 1712, and James Watt, 1781), the spinning jenny (James Hargreaves, 1764), which enabled the industrialization of weaving, the water frame (Richard Arkwright, 1769), and coke smelting which enabled the conversion of coal into coke and the production of cast iron (Abraham Darby, 1709–10, and later John Wilkinson)? It was not just the innovations, often seen as near-miraculous moments of genius or of luck, the work of talented amateurs, but the hard work of testing them, applying them, making them work, refining them and so on, which made the difference.30 Was British society particularly open to such entrepreneurship and innovation, encouraged by the British state, or perhaps by high wages, which led to labour-saving innovations?31 Was it the slave trade, which Marx credited in Das Kapital with providing such enormous profit? ‘Liverpool waxed fat on the slave trade.’32 This was a common view at the time.33 Or was it that, while the rest of the world and certainly the rest of Europe was in turmoil in the final decades of the eighteenth century and the beginning of the nineteenth, Britain was stable and solid, rewarded enterprise, favoured innovation, was freer, and could rely on skilled workers and technicians (including many who came from abroad)? All such factors mattered, though their relative importance is a constant matter of controversy. Above all, the British, or some of them, believed in progress. They were, not necessarily consciously, children of the Enlightenment and the pioneers of an Industrial Enlightenment, even though many of the famous inventors had little knowledge of what we now call the Enlightenment.34
The Anxious Triumph Page 1