III Readings on the Capitalist
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There never has been, we suggest in Global Problems and the Culture of Capitalism, 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: | ||
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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? |
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Second, we need to understand the changes in business organizations and the organization of capital, that is, who controlled the money? | |
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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 |
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The First Slave Auction
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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 http://saiic.nativeweb.org/ayn/goldgreed.html |
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| 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.
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| Reading 2.
Loot: in search of the East India Company http://www.opendemocracy.net/theme_7-corporations/article_904.jsp |
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| 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."
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| Reading 3. The Growth of the Slave
Trade in North America http://www.pbs.org/wgbh/aia/part1/1narr5.html |
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| 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.
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| 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.
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| Reading 4. History of technology
and Work http://www.engr.sjsu.edu/pabacker/histwork.html |
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| This article by by Patricia Ryaby
Backer traces the origins of the industrial revolution from the growth of the textile
industry, to the emergence of "scientific
management," and "Fordism" in the United States in the early twentieth
century.
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| Reading 5.
Early Industrialization in the United States http://invention.smithsonian.org/centerpieces/whole_cloth/u2ei/index.html |
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| This essay is part of the
Whole
Cloth Online Exhibit at the The Jerome and Dorothy Lemelson Center for the Study of
Invention and Innovation at the National Museum of American History, Smithsonian
Institution. It describes the development of the textile industry in the United
States. It also details the links between textile development and the growth of slavery.
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| Reading 6.
Adam Smith: The Wealth
of Nations http://www.humanities.mq.edu.au/Ockham/y64l02.html |
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| 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. However this lecture by R. J. Kilcullen that forms part of an Online course
on political economy does a good job summarizing the main points. (see
also this biography
of Smith)
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| Reading
7. The
Capitalist Threat http://www.mtholyoke.edu/acad/intrel/soros.htm |
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| 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.
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| C. The Growth of Corporations | |
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capital was the emergence of the corporation. We suggest in 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.
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| Reading 8. John D. Rockefeller and
Standard Oil http://www.micheloud.com/FXM/SO/rock.htm |
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| 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
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 Reading
9. The Corporate Centuryhttp://www.globalexchange.org/campaigns/econ101/corporations.html |
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| 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.
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| 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.
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| Reading
10. A Short History of Neo-liberalism http://www.globalexchange.org/campaigns/econ101/neoliberalism.html |
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| 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.
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| Reading
11. Fifty Years of the
GATT/WTO http://www.iie.com/publications/papers/bergsten0498.htm |
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| 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 varous "rounds" of negotiation in
GATT; these refer to major gatherings of member states to negotiate less restrictive
national trade policies.
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| Reading
12. GATT and Democracy http://www.pcdf.org/1994/06korten.htm |
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| 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.
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| 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.
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| Reading
13. Global Debt and
Third World Development http://www.mtholyoke.edu/acad/intrel/globdebt.htm |
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| 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."
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| Reading
14. The End of a
"Miracle" http://www.hartford-hwp.com/archives/54/124.html |
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| 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.
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| Reading
15.
The Scorecard on
Globalization 1980-2000: Twenty Years of Diminished Progress (PDF) http://www.cepr.net/index.php?option=com_content&task=view&id=423&Itemid=8 |
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| 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.
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| Reading
16. The
Biology of Globalization http://www.ratical.org/LifeWeb/Articles/globalize.html |
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| 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.
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| Exercise
1: T-Shirt Travels http://www.pbs.org/independentlens/tshirttravels/track.html |
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| 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, and you can read more about the history of the T-Shirt at the Village Voice in the article by Paul Collins on The Weird History of the T-Shirt. | |
