The English Civil War had divided the elite, but when William and Mary took the throne, a new and more pragmatic generation had taken over direction of the country. English laws had long protected property, but after 1689 “the rights of Englishmen” became a rallying cry for the English as well as their North American colonists. While the upper class supported draconian laws for crimes against property, and Catholics and dissenters were excluded from holding office, Englishmen and-women mingled more freely across lines of class and status than their peers elsewhere. Sharing opinion in print took much of the poison out of conflict and made possible the emergence of a consensus about religion, the economy, and the constitutional balance between king and Parliament. These things provided deep underpinnings for trust. The English shared the same prejudices and pride, and somehow these shared convictions even taught them to trust foreigners.
Economics as a discipline acquired a certain cohesion with Adam Smith’s masterful Wealth of Nations. Throughout the nineteenth and twentieth centuries, economics, like other studies of society, became a profession. The subject acquired enough precision to lay out its major theorems in algorithms and stochastic statistics. I am deeply suspicious of this precision when it is applied to anything larger than a single rate or measure. A country’s economy is embedded in its culture, which embraces a hotchpotch of qualities at play in collective life. “At play” is the right phrase here, for the culture of everyday life is composed of lively sensibilities, convictions, expectations, aversions, taboos, secret pleasures, transgressive acts, conventional attitudes, and forms of politeness. Such disorder would never fit into an equation. Social science predictions generally carry the caveat that they will hold ceteris paribus—“if all else remains equal.” But all else rarely remains the same.
Many scholars do not believe that capitalism existed until there were concentrations of capital in industrial plants with a new proletariat as the work force. The term for them is synonymous with industrialization. For others, capitalism is as old as the first civilization when men and women stored wealth for some future enterprise. I think capitalism began when private investments drove the economy, and entrepreneurs and their supporters acquired the power to bend political and social institutions to their demands. For England this had happened by the end of the seventeenth century. Those who promoted the market economy were greatly aided by a public discourse about how nations grow wealthy. Efficiency, ingenuity, disciplined work, educated experimentation all became part of a new ethic. While these new ways of looking at the world of work had to coexist for a long time with the older values that stressed status, stasis, and communal obligations, the ideal of productivity finally became dominant. Where earlier talented young men might have aspired to be courtiers or even clergymen, as the eighteenth century opened, careers in manufacturing, finance, retailing, and foreign trade beckoned.
There can be no capitalism, as distinguished from select capitalist practices, without a culture of capitalism, and there is no culture of capitalism until the principal forms of traditional society have been challenged and overcome. But it must be said—and is not often enough said—that the mores of a more traditional organization of society do not die out with the dominance of capitalism. Rather they regroup to fight again with new leaders and new causes. Any history of capitalism must contain the shadow history of anticapitalism, sometimes carried out in the name of a new theory, but often as a reexpression of values that prevailed before the eighteenth century.
In describing in great detail how the capitalist system supplanted a venerable, established order, I want to stress the difficulty of such a development. I want readers to resist the temptation to bring capitalism onto the historic stage as something inevitable, because it was not. The number of societies today that won’t make the attitudinal and practical adjustments required of an industrial economy should reinforce this point. Social institutions, like the family, religious faith, or types of political regime—autocratic or anarchic—can exert great independent influence on economic decisions. Taking hold in the West was a way of talking about economic relations that assumed that economic progress was inexorable, and capitalism a force not to be blocked, but the irregular patterns of development during the past four centuries indicate that some traditional societies have found the power to put the brakes on changes that threaten their way of life. The variety of arrangements in the world today—even within capitalist economies—cautions against talking about universals and uniformities that might occur in the natural world but rarely do in the social realm.
Capitalism was never just an economic system. It impinged on every facet of life and was itself influenced by every institution or identity that shaped its participants. It created new cultural forms, stimulated new tastes, and introduced a whole new vocabulary for discussing the impact of private enterprise on the welfare of the society as a whole. In time traditional ways of acting and thinking lost their controlling power. They became options, to be chosen as matters of taste. A different, dominant ethos took shape, not so much making people freer as turning economic freedom and individual rights into values considered fundamental. Once its amazing power to generate wealth was detected, most countries, at least in the West, wanted part of the action. When capitalism emerged in eighteenth-century England, it was relatively easy for other countries to copy English innovations. They could also discriminate between what they wished to copy and what they found distasteful in the modernizing dynamic of. French capitalism was not exactly like the English original, or German capitalism a replica of how the French adapted this enriching economic system to their ways.
THE TWO FACES OF EIGHTEENTH-CENTURY CAPITALISM
BEFORE THERE WERE factories under roofs, there were factories in the fields. As with oil in the twentieth century, sugar could only be produced in a few favored spots, such as Brazil and the islands of the Caribbean. And again like oil, it was in demand everywhere. The lure of profits from raising such a precious commodity drew Spain’s European rivals to the tropical parts of the New World, where they developed an intensive kind of agriculture, using slave labor. Over the course of three hundred years, eleven million African men and women were shipped like cattle to the Western Hemisphere. Although England dominated the trade during its heyday in the eighteenth century, France, Portugal, Spain, Denmark, and the Netherlands participated in the traffic in human beings. This is the ugly face of capitalism made uglier by the facile justifications that Europeans offered for using men until they literally dropped dead. Hypocrisy, they say, is the homage vice pays to virtue. In this case, hypocrisy left a bitter legacy. To assuage consciences over such a massive injustice, Europeans made invidious racial comparisons that have outlasted slavery by more than a century.
A much more benign, even awe-inspiring chapter in the history of capitalism paralleled the brutal days of the sugar plantations. Starting in the eighteenth century, a succession of ingenious men discovered how to make natural forces push, pump, lift, turn, twirl, smelt, and grind all manner of things. There was never any thought of importing slaves into Great Britain, but the high cost of workers’ wages proved to be a powerful incentive to find alternative sources of energy.
This gave a push to inventors who began a technological saga that has only accelerated with time. Drawing on seventeenth-century scientific experiments in hydraulics and hydrostatics, these pioneer engineers designed mechanical slaves, machines that could harness energy. Isaac Newton’s brilliant calculations of how gravity kept the planets in place prompted a new respect for human reason. As Alexander Pope wrote:
Nature and nature’s Laws lay hid in Night;
GOD said, Let Newton be! And all was Light.”
Thomas Newcomen, Richard Arkwright, and James Watt demonstrated that lesser mortals could take the Promethean fire from Newton and build engines that could work a lot harder than human beings and their animals.
These two phenomena—American slave-worked plantations and mechanical wizardry for pump
ing water, smelting metals, and powering textile factories—may seem unconnected. Certainly we have been loath to link slavery to the contributions of a free enterprise system, but they must be recognized as twin responses to the capitalist genie that had escaped the lamp of tradition during the seventeenth century. Both represented radical departures from previous practices. Take farming. Growing food had long been the province of each country’s peasantry. Peasants’ work was hard and demeaning, but families embedded in village customs did varied tasks of raising and preparing food. Sugar plantations began de novo, without rural traditions, using laborers wrenched from their homes to work like robots in military-style routines growing a single exotic crop.
Tapping into the energy of fossil fuel changed forever the relation of human beings to their natural environment. Inventiveness wasn’t new, but the scope of the steam power was. People had created elaborate waterwheels, windmills, fountains, bellows, guns, and dams, but they had never before penetrated the secrets of physics or devised ways to use those secrets to manipulate natural forces. The amount of power that could now be generated and the diversity of uses to which it could be put transformed production processes everywhere. Like that of the sugar plantation, their potential for generating profits accounts for the investment of time and money that people were willing to put into developing steam power. Both took concentration of capital, breaking ground for a new sugar plantation costing considerably more than setting up a cotton factory. This capital investment became the major feature of the new economic order. Perhaps even more significant to the workingmen and women at the time, both factories in the fields and factories under a roof introduced work routines that required long hours of disciplined labor. Employers had always preferred hard work to easygoing habits, but their considerable investment in slaves and equipment turned that preference into an imperative.
Politics in the late seventeenth century altered the history of capitalism by changing the European trading patterns. Fierce dynastic rivalries strained relations between Great Britain and France, France and Austria and the Netherlands, Spain and Great Britain, France and Russia and Spain, as well as some Italian states. Various combinations of these countries went to war against each other eight times between 1689 and 1815 for a total of sixty-three years.1 One major consequence of these hostilities was a sharp reduction in the intra-European trade that had grown substantially in the previous two centuries. Neighboring Great Britain and France, in particular, turned from each other as trading partners toward their overseas holdings. The wars themselves made raising revenue urgent, so heavy import tariffs became the order of the day. The various European colonies in the New World were expected to complement the economic needs of the mother country.
The persistent warfare among European powers created a kind of catch-22. The warring countries needed the riches they extracted from Asia and the New World to support their wars, but the intense competition for control of these lucrative trades triggered more bellicosity. France and England confronted each other in five different spots around the globe: over cotton and silk in India, slaves on the west coast of Africa, sugar plantations in the Caribbean, Indian alliances in the Ohio River valley of the North American continent, and furs in the Hudson Bay area. James Fenimore Cooper commented wittily on this rivalry in The Last of the Mohicans when he observed that the French and English armies in North America were forced to travel long distances in order to fight each other.
Because of its centrality to the sugar trade, the slave trade was the most hotly contested European venture on the face of the globe. The numbers themselves shock one into an awareness of its significance. Between 1501 and 1820 slavers took 8.7 million Africans in chains to the Western Hemisphere; between 1820 and the final abolition of slavery in Brazil in 1888, 2.3 million more were sent. A total of 11 million men and women came from Africa to the New World colonies in comparison with the 2.6 million Europeans who crossed the Atlantic in the same period. Over one hundred thousand separate voyages brought this human cargo, 70 percent of them owned by either British or Portuguese traders.2
Sugar was one of capitalism’s first great bonanzas; its successes also revealed the power of the profit motive to override any cultural inhibitions to gross exploitation. Slavery was old. Egyptian slaves had built pyramids; Roman ones, bridges and aqueducts. What capitalism introduced was sustained and systematic brutality in the making of goods on a scale never seen before. It’s not size alone that distinguishes modern slavery from its ancient lineage in Greece and biblical times; it’s also race. Slavery then often had an ethnic component because slaves were taken as the captives of war, but never a consistently racial one. When the Portuguese brought back captured Africans to work in depopulated Lisbon starting in the fifteenth century, the trade didn’t differ much from the commerce in slaves that the Arabs had been conducting for several centuries throughout central and eastern Africa. A hundred years later, something new had been added to this commerce in human beings: They were integrated into an expanding production system. Those sent to the Caribbean were put to work in gangs planting sugarcanes, chopping weeds, cutting the harvest, and crushing the canes in the mills that turned out molasses and sugar. The very size of the trade promoted warfare in Africa in order to meet the new demand for slaves.
The Spanish, who were the first Europeans to arrive in the New World in search of gold and glory, would have been happy to use indigenous people to labor for them. Europeans did that wherever they could. But that was not to be, for the native people of the New World were peculiarly vulnerable to European diseases. So isolated had they been from the rest of the world’s people that they didn’t even have the same range of blood types as Asians, Africans, and Europeans, who had been mingling for many centuries. The joining of the Old and New Worlds caused an unintentional genocide as tribe after tribe in the Western Hemisphere died from the diseases that Europeans brought with them, leaving but a “saving remnant” of the indigenous population of North and South America.
Historical demographers put the pre-Columbian population at 90 to 110 million, with 10 to 12 million living north of Mexico. Measles, smallpox, pleurisy, typhus, dysentery, tuberculosis, and diphtheria actually wiped out whole tribes. Repeated exposure to new diseases culled the indigenous population down to a tenth of its original size. People sickened and died with astounding rapidity. Without knowing what caused disease—germs weren’t isolated until the nineteenth century—no one understood the phenomenon. Indians sustained a profound psychological blow as they watched their own die while their conquerors survived. No less ignorant of the cause, Europeans tended to see God’s hand in saving them while destroying their pagan enemies.
A New Source of Labor
The Spanish, and later the Portuguese, tried to enslave the survivors, with limited success. Columbus had even sent 500 captured Indians back to Seville in 1495. In the early decades of the sixteenth century a succession of Spanish conquistadors moved onto the islands of the Greater Antilles, forcing the native people to pan gold and raise food for them. One of the witnesses of the bloody conquest of Cuba in 1511 was Bartolomé de Las Casas. In a long career as priest, historian, polemicist, Dominican friar, and bishop of Chiapas, he became the Indians’ greatest defender. It was Las Casas who suggested that the Spanish import African slaves as a way to protect the indigenous people. He argued that Africans were better prepared to work than the Indians who, he said, had not yet reached the same stage of civilization.3 From his suggestion came one of the most lucrative plums of Caribbean commerce, the asiento, a contract that Spanish officials awarded for an annual supply of slaves and European goods. The first one, signed in 1595, gave the Portuguese the exclusive rights to land 4,250 slaves annually at Cartagena. In 1713 the British secured the asiento in the peace treaty ending the War of the Spanish Succession.
While the Spanish used Indian and African slaves in mines, cattle ranches, and food-raising farms, the profits that sugar garnered paid for importing slaves. Pione
er agronomists in India had domesticated the sugar plant more than two thousand years earlier. It took more than a millennium for the sweet foodstuff to reach the Mediterranean. There Venetian merchants took control of the European market for it.4 Italians learned how to grow sugar successfully in Sicily, as did the Arabs in Ethiopia and on Zanzibar. The technique for processing sugar through cane-crushing mills came from the Arab world as well. The Portuguese no doubt picked up this know-how after invading Ceuta in Morocco just a few years before colonizing Madeira, its island possession off the Moroccan coast. In short order they experimented with growing sugar there and in the Azores, Cape Verde Islands, and Säo Tomé, all this in the fifteenth century. The Spanish followed suit in their Atlantic islands, the Canaries.
What was startlingly new in Madeira and São Tomé was the Portuguese organization of slaves into strict divisions of labor.5 Large numbers of workers had been collected under one roof before, but Portuguese sugar producers figured out how to coordinate the complicated tasks of crystallizing sugar from vats of boiling cane cuttings. Italian merchants had seized slavs (hence the name “slave”) from Eastern Europe for work in the Mediterranean from the thirteenth through the fifteenth centuries while Arab merchants had enslaved more than a million Western Europeans from the sixteenth through eighteenth centuries. At first the slaves the Portuguese used were white, but once Portuguese merchants had begun regularly bringing home Africans, sugar growers switched to black enslaved laborers. The thousand Africans that the Portuguese brought back annually to Lisbon in the mid-fifteenth century grew to thirty-five hundred a century later.6
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