Readings and Resources on the Capitalist
There never has been a better time for capitalists. The world is full of investment opportunities, black boxes into which investors can put money and get more money in return. How and why this happened are the subjects of the following selections. In them we will focus on the following three questions:
First, we have to ask how capital, that is wealth as defined in the culture of capitalism, came to be concentrated in so few hands and how the world came to be divided into rich and poor. There were certainly rich people and poor people in say 1400, but today’s vast global disparity between core and periphery did not exist then. How did the distribution of wealth change, and how did one area of the world come to dominate the others economically?
Second, we need to understand the changes in business organizations and the organization of capital, that is, who controlled the money?
Finally, we need to understand the increase in the level of global economic integration. Capitalists want the fewest restraints possible on their ability to trade from one area of the world to another; the fewer restrictions, the greater the opportunity for profit. How did the level of global economic integration increase, and what were its consequences?
A. The History and Expansion of the Capitalist World Economy
The First Slave Auction in New Amsterdam (NYC)
Arguably the most important event in the early stages of the expansion of the capitalist world economy was the conquest of the New World. Among other things, it provided a market for slaves purchased and captured in Africa, increased the amount of gold and silver circulating in Europe, and provided new markets for goods manufactured in Europe. The following articles address each of these developments and their consequences.
Reading 1. Gold, Greed & Genocide in the Americas
https://web.archive.org/web/20160406160039/http://saiic.nativeweb.org:80/ayn/goldgreed.html
This article by by Pratap Chatterjee in Abya Yala News traces the relationship between the European quest for riches and the deaths of indigenous people in the New World. His major point is that these deadly consequences that began in the fifteenth century have continued to the present day.
Reading 2. Loot: in search of the East India Company
https://web.archive.org/web/20160305015114/https://www.opendemocracy.net/theme_7-corporations/article_904.jsp
This reading by Nick Robins from the Open Democracy site describes the East India Company, the world’s first transnational corporation. Robins “argues that an unholy alliance between British government, military and commerce held India in slavery, reversed the flow of trade and cultural influence forever between the East and West and then sunk almost without trace under the weight of colonial guilt.”
Reading 3. The Growth of the Slave Trade in North America
http://www.pbs.org/wgbh/aia/part1/1narr5.html
This reading is part of the PBS Africans in America Web Site that accompanied the documentary series of the same name. The article describes the early history of the slave trade in North America and what was required to maintain it. There are links to many other brief articles, maps, and illustrations. You can read about The Arrival of the First African Americans to the Virginia Colonies, or read a description of the First Slave Auction in New Amsterdam (New York City). And you can browse the articles that trace the evolution of the slave trade through the end of the Civil War.
B. The Era of the Industrialist
After the expansion of global trade in the fifteenth through eighteenth centuries, industrialization was the next major stage in the economic development of the capitalist. There are various reasons proposed for what has been termed “the industrial revolution,” some of which are discussed in the readings in this section. The consequences, however, included the concentration of wealth in fewer hands, the greater exploitation of labor, and the increase of availability of goods to consumers who had the money to pay for them. We have also included a discussion of Adam Smith’s Wealth of Nations, which laid the ideological foundation for the culture of capitalism.
Reading 4. Adam Smith: The Wealth of Nations
https://www.adamsmith.org/the-wealth-of-nations
We mentioned in the previous section of readings that the Communist Manifesto was one of the most influential documents ever written; not far behind, however, is Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations. Written in 1776, the book has sometimes been called “the Bible of capitalism.” You can, of course, read the original version, but it is a little long to be included in a reader. (see also this biography of Smith)
Reading 5. The Capitalist Threat
https://www.theatlantic.com/magazine/archive/1997/02/the-capitalist-threat/376773/
George Soros could be described as an arch-capitalist. His financial manipulations earned himself and his clients billions of dollars. But in this article from the Atlantic Monthly Soros argues that we may have gone too far, and that capitalism now represents a threat to the democracy that allowed it to thrive.
C. The Growth of Corporations
The next stage in the concentration of capital was the emergence of the corporation. We suggest in the book Global Problems and the Culture of Capitalism that an 1886 United States Supreme Court decision gave corporations a way to use their economic power to influence the government that they had never possessed. It enabled capitalists, such as John D. Rockefeller and J. Pierpont Morgan, to amass wealth on a scale never before imagined.
Reading 6. John D. Rockefeller and Standard Oil
http://www.micheloud.com/FXM/SO/rock.htm
British philosopher Bertrand Russell suggested that Rockefeller in economics and the German leader Bismarck in politics refuted the liberal dream of universal happiness by substituting economic monopoly and the power of the nation-state. At this Web Site, Francois Micheloud provides seven brief hyperlinked chapters that cover nineteenth century oil industry technology, trusts and monopolies, Rockefeller commercial practices, and the development of the Standard Oil Company, among others. A superb case study of how enormous wealth became concentrated in a few hands during the late 19th century and the earliest 20th. The text is translated from French and is a little rough, but quite readable
Reading 7. The Corporate Century
http://www.motherjones.com/politics/1999/12/corporate-century/
Russell Mokhiber and Robert Weissman offer their view of the price we have paid for corporate dominance by outline what they see as the five greatest corporate scandals and their impacts on our lives.
D. The Ideology of Free Trade
Capitalists want as few restrictions as possible on their ability to trade, manufacture, and invest. For that reason, global economic integration is highly desirable. This enables the capitalist to seek out the cheapest source of labor, to manufacture with few environmental restrictions, and to easily move goods and capital from country to country in search of the greatest profit. However, there are arguments that global integration is harmful to people, to the environment, and to general well-being. The following articles address that debate.
Reading 8. A Short History of Neo-liberalism
https://www.tni.org/en/article/short-history-neoliberalism
Susan George provides a superb history of neo-liberalism, the economic philosophy that is driving the ideology of free trade and globalization itself. As George points out, had the neo-liberal agenda been open proposed 50 years ago, it would have been readily dismissed as radical and dangerous. How then, in the space of those 50 years has it become the driver of economic policy for virtually every nation in the world? That is the question George attempts to answer.
Reading 9. Fifty Years of the GATT/WTO
https://piie.com/publications/working-papers/fifty-years-gattwto-lessons-past-strategies-future
In 1944 at a New Hampshire resort hotel in Bretton Woods, financial leaders from the major industrial nations of the world met and proposed the establishment of a World Bank to provide funds for post-W.W.II reconstruction, of the International Monetary Fund (IMF) to help regulate currency dealings across nations, and the Global Agreement on Tariffs and Trade to ensure the free flow of goods across international borders. This article by C. Fred Bergsten represents an unabashed defense of free trade and the continued implementation of GATT and its more powerful offspring the World Trade Organization (WTO). Bergsten refers to various “rounds” of negotiation in GATT; these refer to major gatherings of member states to negotiate less restrictive national trade policies.
Reading 10. GATT and Democracy
http://davidkorten.org/06korten/
The article by David Korten offers a stark contrast to that of C. Fred Bergsten. Korten argues that the provisions of the WTO will allow businesses to challenge laws that seek to protect the environment or that seek to protect people from harmful substances on the basis that they represent an unfair restriction on trade. In Global Problems and the Culture of Capitalism we also discuss Korten’s concept of “corporate libertarianism” that characterizes the culture of capitalism.
E. The Effects of Globalization
There is little doubt that globalization, the integration of the world capitalist economy, has been good to investors. The question is how good has it been to everyone else? Worldwide, some one billion people live in poverty; the environment is being destroyed; in spite of modern medical discoveries, infectious disease remains a greater problem today than it did twenty years ago; social unrest and protest continues to plague nation-states. Are these problems a consequence of globalization, or are they disconnected from it? This is the major issue addressed by the following readings
Reading 11. Global Debt and Third World Development
http://www.mtholyoke.edu/acad/intrel/globdebt.htm
Arguably the single largest factor in promoting poverty, hunger, social unrest, and environmental devastation is the global debt, that is the money that poor countries owe to rich countries. In this excellent summary of the problem, Vincent Ferraro and Melissa Rosser describe the origins, extent, and consequences of the “debt crisis.”
Reading 12. The End of a “Miracle”
http://www.hartford-hwp.com/archives/54/124.html
In 1997 the collapse of currencies in Thailand initiated a chain reaction of economic crisis that soon spread to Malaysia, South Korea, Indonesia, and beyond. Economists still disagree over what led to the collapse, but Walden Bellow in this article offers, we believe, one of the best explanations. It revolves around the role of “capital controllers,” those individuals or institutions who control vast wealth, and freely move (or remove) it from country to country in search of the highest possible return
Reading 13. The Scorecard on Globalization 1980-2000: Twenty Years of Diminished Progress (PDF)
http://cepr.net/documents/publications/globalization_2001_07_11.pdf
This article by mark Weisbrot, Dean Baker, and Judy Chen examines how countries have fared economically in the last twenty years during the height of the expansion of neoliberal policies, and concludes that most countries have fared poorly. There are lower growth rates, higher disease rates, slashs in education budgets, and lower per capita incomes
Reading 14: The Theory of Comparative Advantage Explained
http://mbaeconfall2011.wikispaces.com/file/view/The+Theory+of+Comparative+Advantage+-+Why+It+Is+Wrong.pdf
Does so-called “free trade” really work? That’s the question that Ian Fletcher asks in this article, based on his book, Free Trade Doesn’t Work: What Should Replace It and Why?
Reading 15. The Biology of Globalization
http://www.ratical.org/LifeWeb/Articles/globalize.htm
In this challenging article, biologist Elizabeth Sahtouris examines how the expansion of free trade is affecting the biology of our planet. She argues that that “communal values have been overridden in a dangerous process that sets vast profits for a tiny human minority above all other human interests.” Globalization, she says, will continue, but it must be based on sounder democratic and environmental principles. She examines some of the ways this might be done.
Exercise 1: T-Shirt Travels
http://www.pbs.org/independentlens/tshirttravels/track.html
The film, T-Shirt Travels, examines globalization through the life course of the common T-Shirt. In many ways the T-Shirt is an apt symbol of the global expansion of trade. Cotton itself fueled the expansion of industry in England, as well as slavery in the U.S. It has continually been responsible for the conversion of farm land to cotton production and the exploitation of labor. And, finally, it leads to the collapse of textile industries in poor countries. You can trace the travels of the T-Shirt in this exercise from PBS.
