The Relentless Revolution, by Joyce Appleby
A History of Capitalism
By Joyce Appleby
Norton, 494 pages
In the 17th century, Thomas Hobbes described the life of mankind before the development of civilization as “poor, nasty, brutish, and short.” But even in Hobbes’s day, that was an accurate description of life for the vast majority of the people in the world. Eighty percent of the population lived at a subsistence level. Famine, plague, filth, and grinding, unending toil were their lot.
Today, however, a mere 359 years after Hobbes published his immortal phrase in his masterpiece, Leviathan, the average person in the developed countries (a category quickly growing in number) lives at a level of luxury and ease that would have been utterly unimaginable to Thomas Hobbes. Sheer physical labor has nearly disappeared as a means of earning a living (except for professional athletes earning millions a year), while myriad machines function as servants for the average citizen. What happened to alter so profoundly an economic system that had been in place since the dawn of agriculture more than 12,000 years ago?
The answer, in a word, is capitalism. An economy that had been marked by control from the top and by a deep fear of change morphed, in Hobbes’s native England over the course of a single century, into an economic system based on individual initiative that sought to maximize profit and that welcomed change.
Together with the scientific revolution already under way in Hobbes’s day, and the technological one that began with the steam engine in the 18th century, the new economic attitude produced a synergy of transcendent power. The old economy was able to grow no more than, on average, 1 percent a year. The new economy could grow at 4 percent, throwing off vast new wealth, which in turn furthered still more wealth creation as large pools of liquid capital accumulated.
Partly through government action and partly through the enlightened self-interest of capitalists, this new wealth slowly spread through the population. This too had a synergistic effect, as workers increasingly became customers in the new economy. More customers allowed economies of scale, which lowered prices, which produced more customers.
In The Relentless Revolution, Joyce Appleby guides the reader through this fascinating and complicated subject. A professor of history for many years at UCLA, she is a distinguished historian, specializing in the United States during the early republic. On many aspects of capitalism’s rise, Appleby does an excellent job. She is especially good at exploring one of the great mysteries of modern history: why did the transformation from a static, agricultural economy to a highly dynamic and industrial one begin, of all places, in England? France was a far larger and more powerful country in the 17th century. And the Dutch had pioneered many of the necessary aspects of a modern financial system, such as banking, insurance, and securities-trading, not to mention improvements in agriculture that freed workers for other jobs. And they established a vast trading empire that poured wealth into the Netherlands.
But Britain quickly adapted many of the Dutch reforms in finance and agriculture and also underwent a political transformation in the 17th century that moved power from the king to a Parliament dominated by nobility, gentry, and merchants. Moreover, Britain had a much more fluid social system than countries on the Continent. The number of people with titles of nobility was very small (only about 150 in the 17th century), and marriages between nobles, untitled landed families, and wealthy merchant families were fairly common in England but almost unknown elsewhere in Europe.
This meant that the upper classes were far less reluctant than their continental counterparts to engage in money-grubbing activities like trade, mining, and manufacturing. As Appleby points out, when Napoleon referred to Britain as “a nation of shopkeepers,” he meant it as an insult. The British took it as a compliment.
Further, while the Dutch were not particularly inventive, the English and the Scots most certainly were, and the best engineers in the world as well. The steam engine of Thomas Newcomen (later made much more fuel-efficient by James Watt, greatly lowering its operating costs); the cloth-making equipment of inventors such as Richard Arkwright, James Hargreaves, and Samuel Crompton; and the factory system developed by Josiah Wedgewood among others provided the power and productivity that launched the Industrial Revolution.
But Appleby’s book is weaker when it comes to the technology that drove the process forward. She never offers an explanation, for instance, for why the steam engine and the railroad were so fundamental in transforming the world, leaving it instead to implication. But implication is not enough. The steam engine, for the first time in human history, made work-doing energy cheap and allowed unprecedented amounts of that energy to be easily applied to other tasks.
Likewise, the railroad made overland freight movement much cheaper and much faster. The railroad allowed the new factories to reach markets hundreds of miles away, so the factories could increase production and take advantage of huge economies of scale. Those economies resulted in lower prices, which increased demand, providing yet another synergy.
Indeed, Appleby seems somewhat at sea regarding technology. She refers to the energy provided by steam and other engines as “artificial energy,” a distinction without a difference if ever there was one.
She also accepts, largely without argument, the idea that capitalism was the cause of the scramble for Africa in the late 19th century, as well as other imperial ambitions by countries that had undergone the Industrial Revolution at the expense of those that had not. But cultures with superior technology, especially military technology, had been using it at their neighbors’ expense since time immemorial. Imperialism is an artifact of human nature, not capitalism.
Moreover, The Relentless Revolution is marred by very sloppy editing. Eli Whitney’s cotton gin and its effect on the American South, for instance, are mentioned on page 132 and, in almost identical language, again on page 151. Andrew Carnegie and Cornelius Vanderbilt are conflated into one person on another. It was not Spanish overlords that Belgium threw off in 1830, but rather the Dutch. Winston Churchill was the grandson, not the son, of the Duke of Marlborough. The U.S. Constitution did not provide for a ban on the slave trade in 1808; rather, it forbade such a ban to be passed by Congress before the start of that year. Neither Andrew Carnegie nor John D. Rockefeller was the son of a farmer.
Despite these unfortunate editorial lapses, The Relentless Revolution is an often enlightening book. I wish, however, it were more positive about its subject. The history of capitalism has largely been written by its enemies (it was Karl Marx, after all, who coined the word). And while Appleby is certainly not to be numbered among them, she belongs to a generation whose dominant economic paradigm sees capitalism as, at best, a necessary evil, hopefully to be supplemented if not supplanted by a benevolent governmental paternalism.
This paradigm tends to emphasize capitalism’s failings and understate its overwhelming success at producing a world where even the poor—a relative term, after all—have food and decent clothes in abundance, not to mention air conditioning, cell phones, flat-screen TVs, paid vacations, and medical care not even kings could have had a hundred years ago.
A book that looked more positively at the immense power of democratic capitalism to enrich the masses would be especially timely now because we are living on the cusp of a new economic revolution. This one is powered by a collapse in the price of information rather than energy. It has already powered a new scientific revolution, greatly advanced democracy, and produced prodigious new wealth.
As Joyce Appleby shows, we have been through this before, and we have little to fear from it, despite the bumps on the road to which she pays somewhat too much attention.