Capitalism E-Book

Geoffrey Ingham

• Herausgeber: John Wiley & Sons
• Kategorie: Geisteswissenschaft
• Serie: Key Concepts
• Sprache: Englisch

Seitenzahl: 459

Veröffentlichungsjahr: 2013

Beschreibung

Now with a substantial new postscript on the financial crisis

This book provides a basic introduction to the 'nuts and bolts' of capitalism. It starts by examining the classic accounts of capitalism found in the works of Adam Smith, Karl Marx, Max Weber, Joseph Schumpeter, and John Maynard Keynes. Each placed emphasis on different institutional elements of capitalism - Smith on the market's 'invisible hand'; Marx on capital's exploitation of labour; Weber on the foundations of economic rationality; and Schumpeter and Keynes on the instability that results from capitalism's essentially monetary and financial character.

Drawing on these classic accounts, Ingham then offers a succinct analysis of capitalism's basic institutions and their interconnections. Market exchange, the monetary system, the enterprise, capital and financial markets, and the role of the state are dealt with in separate chapters which make use of contemporary material on the recent history of the capitalist system - including the great inflation of the 1970s and the neo-liberal backlash; the 'dot.com' bubble of the late 1990s; and the collapse of Enron and other US corporations. This revised version includes a substantial new postscript on the financial crisis of 2007-8 and its aftermath. The result is a concise, masterly and up-to-date account of the world's most powerful economic system, written in a way that is accessible to students and general readers alike.

Leseprobe

Table of Contents

Cover

Title page

Copyright page

Introduction

Part I: Classical theories of capitalism

1 Smith, Marx and Weber

Adam Smith (1723–1790): the market as a harmonizing ‘invisible hand’

Karl Marx (1818–1883): exploitation and the fatal contradictions of the capitalist mode of production

Max Weber (1864–1920) and the historical specificity of capitalism: rationality, calculation and domination

Conclusion

2 Schumpeter and Keynes

Joseph Schumpeter (1883–1950): money markets as the ‘headquarters of capitalism’

John Maynard Keynes (1883–1946): making capitalism work better

Conclusion

3 The basic elements of capitalism

A. Monetary system and bank-credit money

B. Market exchange

C. Private enterprise production of commodities

The state

Culture and capitalism

Part II: The institutions

4 Money

What is money?

Capitalist credit-money

The money market and the production of credit-money

Monetary disorder in capitalism

Conclusion

5 Market exchange

The competitive market

Monopolistic competition and mass consumption

Conflict and contradictions

Conclusion

6 The enterprise

Theories of the capitalist enterprise

A short history of the development of the capitalist enterprise

The struggle for the enterprise’s surplus

Conclusion

7 Capital and financial markets

Stock markets and the investment bank oligopoly

The enterprise as a commodity: mergers and acquisitions

Financial risk management and speculation

The Enron affair

Conclusion

8 The state

The two logics of power

Social peace: coercion and legitimacy

Capitalist social relations and liberal democracy

The state in the economy

Conclusion

9 Conclusions

Globalization

‘Varieties’ of capitalism

Will capitalism endure?

References

Index

Copyright © Geoffrey Ingham 2008

The right of Geoffrey Ingham to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.

First published in 2008 by Polity Press

Polity Press

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ISBN-13: 978-0-7456-3647-4

ISBN-13: 978-0-7456-3648-1(pb)

ISBN-13: 978-0-7456-4123-2(Multi-user ebook)

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Introduction

Given the enormous accumulation of sociological literature on capitalism, it might well be thought that there is little need for another introductory text. Indeed, there have been a number of excellent recent additions to the genre, most notably Fulcher (2004) and Triglia (2002) and, at a more advanced level, Nee and Swedberg (2005). None the less, I believe that there is room for one more that attempts to do something a little different.

However, part of what I propose is, in the first place, rather old-fashioned. One of my aims has been to refocus attention on the classical sociological concern with the systemic nature of capitalism. By this is meant the fundamental elements, and their linkages, that characterize capitalism as a whole. Of course, this is precisely what Marx and Weber set out to do, but I believe that this aspect of their work has suffered some neglect in the recent past. For example, it has been surely a distortion of Weber’s analysis of capitalism to devote so much attention to the Protestant Ethic. On the other hand, I have argued that the classic nineteenth-century sociological texts have very little to say about the monetary and financial side of capitalism, which has assumed a more obviously central role during the twentieth century. In this respect we get more guidance from the great economists such as Schumpeter and Keynes. But they and other economists concerned with the systemic structure of capitalism are, unfortunately, not likely to be encountered in an undergraduate sociology course.

The book is in two parts, the first of which deals with those theorists whose work I have found to be most valuable. It opens with a very brief outline of Adam Smith’s analysis of ‘commercial society’ in The Wealth of Nations (1776). Apart from this book’s intrinsic significance as one of the first systematic accounts of the modern market economy, the classical social theory of the next two thinkers on my list – Marx and Weber – is unintelligible without reference to Smith. Two other economists – Joseph Schumpeter and John Maynard Keynes – make up my list. They are included not only for their seminal heterodox contributions to the economic analysis of capitalism, but because this heterodoxy is implicitly ‘sociological’. That is to say, they focus on the particular institutional structure of capitalism as a distinctive type of economy, rather than on the abstract mathematical models of decision-making and exchange to be found in mainstream economics. Schumpeter’s economics provides a fascinating insight into the process by which the social science disciplines became separated in the early twentieth century – arguably to the detriment of both. But, unfortunately, this issue cannot be pursued here. However, it is my firm belief that students of sociology should have some basic understanding of Keynes as one of the towering figures in twentieth-century social and economic science. His economics might now be unfashionable, but his impact and influence on the modern world can scarcely be overestimated. However, this brief treatment of Keynes also aims to show that his critique of the orthodox economic analysis of the operation of capitalism, derived from Adam Smith, is unwittingly sociological in its understanding of the relationships between employment, money and capital.

The fact that my list of classical theorists of capitalism ends with Keynes, who died in 1946, might possibly be taken to reflect my outdated conception of the social sciences and rather old-fashioned concerns. In reflecting on this possible interpretation, I have reached the outrageous conclusion that no social scientist over the past half century has added anything that is fundamentally new to our understanding of the capitalist economic system. Indeed, some of those who might be thought to qualify for such a list have merely distorted and obscured much of the legacy of Smith, Marx, Weber, Schumpeter and Keynes.

After the somewhat crude extraction from their work of the basic elements that make up the capitalist system, part II looks at these more substantively – money, markets, the enterprise, capital and financial asset markets. However, the sociological literature on which to draw is very patchy in this respect. Reflecting classic sociological concerns, there is copious work on labour and the firm, but very little on money and finance. Consequently, I have relied on heterodox economic traditions and have made liberal use of material from the most valuable source on the operation of contemporary capitalism – the elite capitalist press. In the pages of the Financial Times and The Economist one finds the most expert reportage on what Schumpeter referred to as the inner workings of the capitalist engine, including the representation and disclosure of the capitalist elites’ beliefs, their most pressing anxieties and the continuous evolution of capitalist ideology.

Finally, I should point out that this book lacks a thorough treatment of the very important question of the origins of capitalism. Given the constraints of an introductory text, I decided rather to concentrate on contemporary issues. For filling this gap I recommend two sociological histories of capitalism – one short and elementary (Fulcher 2004) and the other longer and more complex (Arrighi 1994).1 Both make much use of Braudel’s history of capitalism, which, in turn, was guided by one of the major influences on my own work – Joseph Schumpeter.

Note

1 Over the past decade or so the question of the Western origins of capitalism has become the focus of a heated debate in history and sociology. On the one hand, the classic nineteenth-century accounts of Smith, Marx and Weber have been labelled ‘Eurocentric’ for their neglect of the oriental contribution to the development of capitalism as a world system (Frank 1998; Goody 2004). On the other hand, a ‘California School’ of economic historians has identified a ‘great divergence’ in the sixteenth century, when China’s earlier economic superiority was overtaken by the West (Pomeranz 2000; Vries 2003; Faure 2006; Arrighi 2008). This fascinating question cannot be pursued here, but the understanding of capitalism presented in this book gives clues to my own view of this debate. As the following account strongly implies, I support the view that capitalism originated in the West and that the overtaking of China was largely due to the emergence in the early modern period in Italy, the Netherlands and Britain of banking systems that linked the state and the nascent mercantile bourgeoisie in the production of credit-money for the finance of production and exchange. This development was conspicuously absent in China.

Part I: Classical theories of capitalism

1

Smith, Marx and Weber

Adam Smith (1723–1790): the market as a harmonizing ‘invisible hand’

Published in 1776, Adam Smith’s The Wealth of Nations was an attempt to explain western Europe’s unprecedented acceleration in economic growth. Before this time, the wealth of a nation was relatively easy to explain – it was largely the result of the ‘visible hand’ of military power. Countries might differ in their endowments – such as climate, the fertility of the land and natural resources – but these advantages could always be obtained by conquest. Economic power was evidently a consequence of military power. By and large, rulers subscribed to the mercantilist doctrine which held that power should be founded on amassing and hoarding wealth within a territorial state. For some, even the export trade was interpreted as a loss of resources that, furthermore, might even strengthen an enemy.1

From the late seventeenth century onwards developments seemed to contradict this doctrine and to lend support to alternative explanations of the rise and fall of states. By the middle of the eighteenth century it was becoming apparent that the progression of society through a succession of increasingly wealthy stages of development could not be explained simply as the result of powerful rulers’ conscious intent. Arguably the most mercantilist of all European states, Spain, was eventually brought down by a small country with negligible natural material resources of its own – Holland (Smith 1986 [1776]: 473). Here, the relationship between military and economic power was seemingly reversed. Whilst Spain had sought power by the conquest and seizure of south American silver, the Dutch East India Company’s trading ventures produced the wealth that supported an expansion of military power. Successful wealthy European societies, Smith argued, were entering a new stage of economic development – based on ‘commerce’.2 Here, the creation of wealth was the result of myriad individuals pursuing their own interests, not the strategies of powerful rulers. Consequently, the two fundamental economic questions – the growth of wealth and its distribution – now required a quite different explanation.

Smith’s answer to the questions is provided by his analysis of the interrelationship between three elements of ‘commercial’ society – factors of production, the market and the state. The Wealth of Nations was the first comprehensive examination of the emerging market capitalist system, and it remains enormously influential (Smith 1986 [1776]). It was written before the growth of industrial capitalism – that is to say, before factory production in large externally financed corporations. Rather, Smith was concerned with the first significant structural change in the evolution of the modern economy – the rapid development of market exchange. By the eighteenth century, the closed self-sufficient economic systems of the household and manor had given way to the market mechanism in which wages and prices were rapidly replacing traditional reciprocity and redistribution.3 Moreover, Smith saw that there was a direct link between this expansion of the market and the division of labour. Extensive specialization of task and economic function eliminates the self-sufficiency of household and manor, making market exchange necessary, which in turn permits further specialized, divided labour and, consequently, greater efficiency and economic growth.