Historians on Capitalism’s Ascendance

What conditions must be present to declare that capitalism has finally come to dominate one’s society? American historians have varying views on this, as the meaning of capitalism is varied. Further complicating matters, the new paradigm in scholarship is to worry less about precise definitions of capitalism, as Seth Rockman points out in “What Makes the History of Capitalism Newsworthy?” — an acceptance of the “varieties of capitalism” would seem to make a determination of hegemonic conditions more challenging. Our question has become harder to answer as research has progressed, not easier. Still, historians’ answers and interpretations are interesting. As Paul Gilje writes in “The Rise of Capitalism in the Early Republic,” some of course simply point to capitalist ownership of the means of production — businesses, the factories, the tools and equipment, the resources, and so on — but others disavow domination until capitalists also control the political system. The level of industrialization is another suggestion, but historians such as Jonathan Prude and William Stott urge a step away from centering mechanization and new technology, instead focusing on the division of labor, which brings artisans of the early American republic, a key period of transition, deeper into the story of capitalism’s rise. In other words, for our purposes, hegemonic capitalism would not be reached until the division of labor (the creation of goods being broken down into small steps that low-skilled wage workers could accomplish, replacing the full-task, high-skilled creator, increasing production) had come to define society, regardless of the state of industrialization and even, perhaps, who owned the means of production and the State. 

Further, wage labor, Rockman notes, has long been considered the “sine qua non of capitalism,” its essential element. Before capitalism came to dominate, for instance in eighteenth-century America, most people were involved in their own familial agricultural production — most workers, including artisans and merchants, did not work for someone else, receiving a wage from an employer. The shift to wage labor was a massive change. However, Rockman writes, New Capitalist Studies have drifted away from wage work as the essential characteristic of the capitalist system. Millions of American slaves certainly worked for someone else, and while they received no wages this was a form of exploitation that could not be ignored in the story of economic development. In other words, some historians, those who see slavery as integral to capitalism rather than oppositional or anomalous (see Gilje), may look beyond widespread wage labor for the key characteristic of hegemonic capitalism. They may look instead, for example, to the ubiquity of a new ideology. Michael Zakim and Gary Kornblith’s Capitalism Takes Command phrased it as “capital’s transformation into an ism.” The wider culture adopted principles beneficial to business, though this took some time. As John Larson writes in “The Genie and the Troll: Capitalism in the Early American Republic,” despite some historians positing that capitalism arrived in America with the first European ships, others have demonstrated that the yeoman farmers of the early republic still held cultural values detached from the capitalistic ethos, disinterested in profit. But eventually values like individualism and competition did replace community reciprocity, respected hierarchy, and other norms (see Gilje and Larson). Could one claim that capitalism had reached predominance without the new self-interested belief system doing so as well?

Let’s consider how a few other historians addressed this question of what constitutes capitalism and how American society transitioned to it in the early republic period. In “The Enemy is Us: Democratic Capitalism in the Early Republic,” Gordon Wood addresses the debate between “moral economy” and “market economy” historians of the early American republic. The former posit that period farmers lacked a capitalistic, profit-driven mindset, focusing only on family and community needs. The latter argue that farmers engaged in market exchange to a high enough degree to evidence that capitalism’s grip on society occurred before moral economy historians would like to admit. Wood argues that moral economy proponents have strained reason in their attempts to portray farmers without any capitalistic ethos. Farmers are portrayed as merely providing for their families no matter how intensely they engage in the market. They cannot be capitalistic because, for the caricature-crafting moral economist historians, by definition capitalists have greedy, evil intentions. Wood critiques such thinkers for a lack of nuance and for attempting to fit the early republic into a Marxian framework that strictly requires a checklist of elements for the existence of capitalism; for instance, if there was no class exploitation of American farmers, there was no capitalism, despite the existing free market and other characteristics. Among the evidence Wood uses are the writings of a period laborer to show the true nature of economic activities and social relations. The cartoonish capitalists, Wood writes, did not bring about capitalism, but rather ordinary people with moral and market sensibilities; indeed, the essay breaks down some barriers between the sides of the historical debate.

Jean-Christophe Agnew helms the afterword of Capitalism Takes Command, delivering a short essay entitled “Anonymous History.” The piece concerns the financial instruments of capitalism and their effect on ordinary Americans, such as farmers, in the early republic period. Agnew argues that the “paperwork” of capitalism, the new financial, commercial, and legal devices — the mortgages, debts, securities, bonds, investments, lines of credit, and so forth — powered the shift from a society of family-centered production to industrial capitalism. Farmers became caught up in these instruments, pulling them from their private worlds and communities and into a truly national economic system. Agnew draws on the essays featured in Capitalism Takes Command for evidence, touching on several of their themes and theses, pulling them together. He cites, for instance, nineteenth-century farmers who felt their world had been turned upside down as they were sucked into the developing commercial system, worrying they would “die of mortgage” and complaining the mortgage “watched us every minute, and it ruled us right and left,” to quote a poem. The historian’s title, “Anonymous History,” refers to a focus on the economic practices, such as use of these financial instruments, that impacted ordinary people, rather than a focus on big names like Rockefeller and Carnegie, who do not appear in the book.

Wood argues that farmers had more of an entrepreneurial spirit and sought profit in the market, touching on the ideology and free market elements necessary for capitalism’s ascendance and moving the timeline up a bit, to the chagrin of moral economist historians. Agnew also finds earlier, more advanced capitalist development among farmers, though it is more against their will and to their detriment; he focuses on the financialization characteristics of the new economic system. These historians are not alone in their conclusions. Robert E. Wright, in “Capitalism and the Rise of the Corporate Nation,” also centers financial instruments in the story of capitalism’s ascendance. Investment, credit, and loans allowed corporations to hugely expand production and profits; corporations then came to dominate the U.S. economy. Agnew and Wright would concur that modern capitalism entails widespread financialization, which became a true force in the early republic period. Jeanne Boydston, who penned “The Woman Who Wasn’t There: Women’s Labor Market and the Transition to Capitalism in the United States,” might better relate to Gordon Wood. Wood wrote about ordinary Americans engaging in market exchange and rejected the false dichotomy of capitalist mindset vs. family-focused provider. Boydston looks at women’s economic roles in the antebellum era. Women’s work helped farms maintain their self-sufficiency and at the same time fed the market and grew the economy — for instance, women undertook outwork for textile mills, receiving compensation. What served the family served capitalism, and vice versa.

While these are not the only elements of hegemonic capitalism, they are major ones that offer a glimpse at a lively historiographical discussion. Given the nuance of the debate and the myriad definitions (or definitional apathy) inherent, it seems sensible to posit that a healthy (or unhealthy) mix of societal realities — a preeminent ideology, capitalist ownership of the means of production and governmental functions, wage labor, industrialization, financialization, a free market, the division of production tasks, and more (such as consumption levels or competition; see Larson) — are necessary to stamp capitalism as hegemonic, a thesis that should please both everyone and no one.

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