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Capitalism as a Cultural System?

Joyce ApplebyThe Relentless Revolution: A History of Capitalism.  New York: W.W. Norton, 2010.  $29.95.  Pp. xii, 494.

Joyce Appleby, who taught U.S. history for many years at UCLA, presided over both the Organization of American Historians and American Historical Association, and served her term as professor-in-exile among the Brits at Oxford, comes to the history of capitalism as an avatar of the American academic establishment.  Her many books include the now more-or-less mandatory biography of Jefferson, together with studies of the new republic — Inheriting the Revolution: the First Generation of Americans (2000) and Capitalism and the New Social Order: the Republican Vision of the 1790s (1984) — which set in place parts of the infrastructure for The Relentless Revolution: A History of Capitalism, the book here under review.

Appleby starts by separating her take on capitalist beginnings from those of the political-economists such as Adam Smith and Tom Paine in the eighteenth century and Karl Marx in the nineteenth.  They were mistaken, she maintains, in supposing economic man to be inherent in natural man.  Were that the case, capitalism would simply have evolved “naturally from the universal tendency of men and women [as Smith put it] ‘to truck and barter.'”  Appleby rejects this, arguing instead that something new and different had been happening during the preceding century and a half so that by the time Smith’s Wealth of Nations came off the press in 1776 local capitalist markets had already developed in various parts of Northern (Protestant) Europe.  From these emerged the “Spirit of Capitalism,” the melding of craftsmanly pride with Puritan aspirations of individual salvation that would embark capitalism on its “relentless revolution” (3-26).

Obviously Appleby is close to Weber.  He influenced her, she writes, “because of his emphasis on contingency and unintended consequences in the formation of capitalism . . . [and by his] respect for the roles that cultural and intellectual traits play in history” (18).  Her own research on market mentality and the new “economic practices”– developing in tandem with the technology that was transforming traditional crafts into entrepreneurial industries — adds importantly to work done by Weber and many others since then.  This opening section, I think, makes the strongest part of Appleby’s book.

I. Left-Leaning with Libertarian Strains

The depth of her obligation to Weber is evidenced by the fact that immediately after her tribute to his influence, she turns to a self-disclosure of her own commitments: “I should also place myself on the contemporary ideological continuum.  I’m a left-leaning liberal with strong, if sometimes contradictory, libertarian strains.”  Contradictory, that is, because she also maintains “a keen interest in progressive politics,” and believes that,

. . . we are ill-served by the conviction that capitalism is a free-standing system untouched by the character of its participants. . . .  Mechanical models of the economy that emphasize its autonomy . . . actually diminish our ability to think intelligently about the range of choices we have.  (18-19)

Her term “mechanical models” refers not so much to the mathematical and virtual modeling now de rigeur in contemporary economics as to the older Marxist claim of an empirical/rationalist explanation for how capitalism works.  Appleby defines capitalism as “a cultural system rooted in economic practices that rotate around the imperative of private investors to turn a profit.”  She then declares that to construe capitalism as “a cultural, not a natural system like the weather,” precludes any possibility of explaining it “by material factors alone” (25-26).  This is an important assertion.  It is crucial to her presentation of capitalism and we will need to come back to it.

But I want to begin by responding to the author’s self-disclosure.  This requires a bit of disclosure on my own part.  I was a colleague of Joyce Appleby’s for eight or ten years at UCLA.  I regard highly her work as a historian and know her to be an outstanding teacher.  I was impressed by her openness to students; even more so by those “left-leaning” tendencies (read: social consciousness) which, for me, locate her at the opposite end of the moral/political spectrum from most libertarians I have encountered.  If Appleby is a libertarian, she is one who has repudiated the self-serving individualism expounded by Ayn Rand.  This in itself is good news because it tells us the intellectual fortifications of “free market” capitalism are by no means monolithic.

II.  Dr. Pangloss for the Defense?

Having said that, I must add that Relentless Revolution is not (in my opinion) one of Appleby’s best books.  I even thought of titling this review, “Dr. Pangloss Testifies for the Defense” — which accurately conveys my main criticism — but decided against that because it overstates the case.  Dr. Appleby would never agree with Dr. Pangloss that “all is for the best in the best of possible worlds.”  On the contrary, she points to the “ugly face of capitalism”(121) as displayed by class, race and gender exploitation.  In several historical chapters she emphasizes the ruthless inhumanity of the Atlantic slave trade and slavery in the Americas; nor does she minimize the global thrust these gave to capital accumulation (161).  The shortfalls of this book are not at the level of denying or distorting ‘facts’; they are at the level of deciding what is relevant (and essential) to the history of capitalism.  As Tillie Olsen might have put it, silences speak as eloquently as discourse.

Of this we already have an example in the title.  Appleby appropriates her title from “the early-twentieth century economist Joseph Schumpeter”(Capitalism, Socialism and Democracy, 1950), who grasped the essence of capitalism, she tells us, with his concept of  “‘creative destruction’. . . .  Rarely has anyone so precisely hit the nail on the head, implying the consequences associated with both ‘creative’ and ‘destruction.’ . . .   Retrospectively we can see that innovation pushed the relentless revolution [my emphasis] of capitalism . . .” (183).  References to Schumpeter or his famous phrase recur on seven separate occasions through Appleby’s book, the last one being on the last page of her concluding chapter (435-6).  So much for the discourse side.  What of the silences?  The relevant silence is that Schumpeter — flamboyant capitalist though he certainly was — actually held Marx in high esteem.  Schumpeter’s “creative destruction” paraphrases an even more famous passage from the Communist Manifesto: “The bourgeoisie cannot exist without constantly revolutionizing the instruments of production. . . .  All fixed, fast-frozen relations . . . are swept away, all new-formed ones become antiquated before they can ossify.  All that is solid melts into the air, all that is holy is profaned. . . .”

What I am getting at is that while Schumpeter as a capitalist medicine-man and prophet plays a leading role in Appleby’s discourse, the Schumpeter who respected Marx and regarded Marxism itself as the matrix of serious criticisms of capitalism gets lost in silence.  Thus far, we are talking about titles.  But what’s in a name — or title?  Book titles, unlike names, are usually not arbitrary.  In this case the title adumbrates the key problem of the book.  To write a history of capitalism without linking capitalism to its historical doppelganger — Marxism and the Marxian projection of socialism as an alternative political ethic — is like performing Hamlet without including the melancholy (and critical!) Dane in the cast of characters.  So we have capitalist history without the Paris Commune, without Allied intervention against the Bolshevik revolution, without the long U.S. boycott of the Soviet Union; without the Spanish Civil War, Munich, “peace in our time,” Hiroshima/Nagasaki, the Rosenbergs in the electric chair; without the CIA’s overthrow of Mosadegh in Iran, Allende in Chile, the Bay of Pigs, targeting Che Guevara, the ghost wars with the Sandinistas in Nicaragua.  But the list gets too long, it needs a wall of its own.  We can round it off into our own era by noting that save for the CIA’s “smart” moves against the Soviet Union in Afghanistan we would not now be blessed with Al Qaeda and the Taliban.

III. The Ugly Face and the Shining Faces

Many defenders of capitalism present these as deeds of shining chivalry.  Appleby, to her credit, lumps them together as glimpses of capitalism’s “ugly face,” too numerous perhaps to be examined seriatim, yet random and contingent — never determinant.  This permits a long-range ameliorative progressivism.  She can be darkly judgmental in describing slavery and the slave-trade yet upbeat about the circumstances of their termination.  “By the end of the eighteenth century a new commitment in Europe to liberty and equality had doomed slave labor, though it was not till 1888 that the last Western country, Brazil, ended it” (134-5, 161).  “If one ever wondered,” she asks, “whether ideas had any force in the workaday world, the campaign to end slavery should still any doubts” (162).  In the United States, it took civil war and the Thirteenth and Fourteenth Amendments even partially to complete this process.  But one would not learn from her book — from this one at least — that among the ideas most politically effective in actually terminating American slavery were those of northern farmers intent on keeping blacks (slave or free) out of the new western territories; as well as those of northern Whigs who for more than half a century had been blocked by the planter interest at the South from enacting their national bank system, upping tariffs on manufactured goods, or consolidating the national market by construction of transcontinental railroads.  Only after these two seemingly diverse tendencies — white-only Free Soilers with entrepreneurial Whigs — finally merged in the Republican party, were they able to impose their economic program on Congress, which they did with regimental proficiency in 1861 as they were “saving capitalism” during their first 100 days at Washington.

Appleby takes the First World War and Great Depression as the nadir of capitalist history.  Yet right after that, by a not altogether persuasive logic, she transforms World War II into a “good war” — good meaning not only beneficial but innocent of those subversive ironies implicit in Studs Terkel’s title (287-9): ” [M]en and women of the belligerent countries performed near miracles of effort and endurance. . . .  When hostilities ended, the destructive power that had been unleashed sobered everyone, vanquished and victorious alike.  It had been a dreadful thirty-one years [1914-1945] but most had survived” (sic!).  The Cold War then unfolds in her account not as a capitalist offensive against socialism, but more like a collective learning experience shared by the industrialized nations of North America and northern Europe.  “Thee paths opened up for postwar leaders,” she explains: “The indicative, imperative, and informative.  In the first, the road forward is indicated [indicated, that is, by the prior commitments of West European nations to welfare capitalism]; in the second . . . ordered [by command economies of the Soviet bloc]; in the third, the coded language of markets informs participants about their choices.”  Only the third path would permit governments to respond “to information” rather than “ideological imperatives” (289).  American leaders of course opted for the third path, upon which, thanks to the explosive recoveries stimulated by the Marshall Plan and its multiple siblings, they could then urge the rest of the world (or as much of it at least as wished to be governed by market “information”) to enter as fellow travelers (293).  All this — especially the account of the Cold War — sets in place a reassuringly optimistic projection of the future.

The difficulty is that capitalism’s history, including its behavior in the recent meltdown, undercuts this projection.  Appleby herself points out two major “weaknesses” of capitalism — its oscillation between boom and bust and its “unequal distribution of wealth” — both of which she describes as recurrent (291).  The first stems from a time-lag inherent in the sequences of competitive buying and selling that constitute the market; the second from the competitive drive to extract profit out of labor, thus accumulating capital, but thus also reducing segments of the labor force to (or below) the subsistence level.  These are structural and both seem to have gotten worse rather than better in the two hundred years or so we have been acquainted with capitalism.  It might seem more reasonable, then, to accept capitalism as in fact a “free-standing system,” doing its own thing more or less “untouched” by cultural variations among its participants (19).  We could then try to identify “material factors” that constrain the system to work the way it does and what we ought to be doing to get out from under it.  This alternative, however, Appleby has excluded by defining capitalism as a cultural system and then declaring that cultural systems cannot be “explained by material factors alone” (25-6).  So what other explanatory factors are available?

IV. Cultural Systems and Thick Description

The outcome will be to abandon causal explanation and settle instead for description.  Recalling Clifford Geertz, we might speak of “Thick Description” which essentially is what Appleby does in her portrayals of selected craftsmen, scientists, and entrepreneurs living and laboring on their respective home turfs.  The Geertz connection serves to locate Appleby’s conceptualization of capitalism as a “cultural system” in line of direct ideological descent from Geertz’s own “Religion as a Cultural System” and “Ideology as a Cultural System” (Interpretation of Cultures, 1973).  No one will deny the value of thick descriptions.  Yet they cannot replace empirical explanation, nor provide grounds for predicting how capitalism will cope with the oncoming crises of the twenty-first century.  Appleby’s account of capitalism would come through more clearly if she permitted herself some of the more precise terminology used by the political economists she has criticized — as, for example, the distinction between use value and exchange value.  Adam Smith may seem simple-minded in thinking capitalism emerged naturally from a “universal tedency . . . to ‘truck and barter'”(15).  Nonetheless, when the miller and cobbler of Smith’s eighteenth century village swapped their products, they were engaging in the same economic behavior that would have characterized an exchange of acorns for rabbit skins half a million years ago between members of adjacent hunter-gatherer tribes.  An “instinct” shared by humans with other primates — according to the historian of science, Nicholas Wade (Before the Dawn, 2006, p 158) — “was a sense of . . . reciprocity, extended in human societies to a propensity for exchange and trade.”  If Wade is correct, one must conclude that new and different as capitalism may have seemed when it finally came aboard, it was by no means un-natrural, or unprecedented, or beyond reach of scientific inquiry.

To represent “cultural systems” as elements of a separate reality, somehow impervious to empirical explanation, is, I think, detrimental to the human condition since it lends credence to unrealistic hopes that make our prospect riskier than it already is.  Appleby obviously is deeply concerned at global warming, ecological burnout, and the spread of nuclear/biological weapons.  Yet, like many other capitalist thinkers, if they permit themselves to think seriously about the twenty-first century, she conceptualizes these oncoming crises not as threats to human, or even biological, survival, but as challenges to the genius of “creative destruction” — incentives, that is, to invention, risk-taking, investment in new technology by multitudes of presumably well-informed “individual” market-players.  “Municipalities in Europe,” she reports, “are buying thousands of bicycles . . . computerized bike stands let riders pick up and drop bikes with fees easily registered on their credit cards.  The green industry is finding cheap space” for assembling its solar panels and wind generators “in the closed factories of the Rust Belt.”  Venture capital accumulates for “the next round of fuel innovation.”  Even Detroit begins to get serious — finally — about “making electric cars” (433).

Such tokens of resiliency after the big meltdown, deployed especially in her closing chapter, provide a of sort of QED for this ambitious argument which the author can now sum up by reaffirming essentially the same “assertion” I called attention to earlier as one we would be coming back to.

Capitalism [she writes] is not a unified coordinated system. . . .  Rather it is a set of practices and institutions that permits billions of people to pursue their economic interests in the marketplace.  There is no monolithic international corporate power, but many diverse players in the world market. . . .  People do learn from their mistakes.  There is no reason to think that societies won’t continue to modify and monitor their economies in pursuit of shared goals.  A relentless revolution, yes, but not a mindless one. . . .  (433,436)

V. Mindless in Gaza

The uncompleted last sentence, above, is also the last line of the entire book.  Since it not only epitomizes the book’s message but frames its inner contradiction — which (in my judgment) falsifies the message — it offers a neat terminal moraine for the book as well as for this review.

To be “not . . . mindless” means to be mindful.

But is it right to assert the mindful-ness of capitalism?  The author maintains that capitalist decision-making is informed by information gleaned from the market (287-9).  What sort of information would that be?  In our era, mostly it is on-target data about short-range profits (or losses) that might or might not accrue from a plenitude of possible investments.  Since the information focuses on profits of “individual” investors, it necessarily conveys a self-serving disregard for the collective outcome of each particular investment.  Thus it affirms the libertarian component of Appleby’s “self-disclosure”(18-9), while at the same time canceling out the “left-leaning,” or social component.  Well, yes, we were “informed” about those substandard mortgages.  And yes, the market makes us understand that CEOs fetch higher prices than teachers.

Historically, the market has promoted investment in projects (good or bad) so long as they proved profitable to investors — drugs, for example — not to mention tobacco and liquor, slave labor, automobile culture, advertising, suburban sprawl, the military/industrial complex.  These are among the market-wrought disasters now threatening to terminate our lease.  To conclude on evidence such as this that capitalism’s relentless revolution has been mindfully informed seems like the ultimate reductio ad absurdum.  Would it be more realistic to understand the market as a mechanism for transcending the obligation of mindfulness?  Isn’t that what the metaphor of the Invisible Hand has been telling us?


Alexander Saxton is emeritus professor of history at UCLA.  He is the author of three novels (Grand Crossing, The Great Midland, and Bright Web in the Darkness) and several historical works, including The Indispensable Enemy and The Rise and Fall of the White Republic.  He has also published a historical materialist analysis of religion: Religion and the Human Prospect




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