The A to Z of isms... capitalism.
The business of buying and
selling goods and services for profit
is very old indeed.
By 1800BC, interest rates on loans
to facilitate trade were established.
But don’t borrow money
in Ancient Babylon.
You could pay up to 50%
on the ancient world equivalent
of a credit card.
A basic description would be that it
distributes goods and services
according to the laws
of supply and demand.
Traders sell their goods
at the highest possible price
but competition keeps prices
at an efficient level.
14th Century England was an important
moment for capitalism.
Blame the weather, which helped lead
to the great famine,
followed by the Black Death which
decimated the population of England.
The price of labour rose
and the poor serfs got better pay -
{\an8}an early example of the relationship
between capital and labour.
Over in Italy,
capitalism from around the same
time was much more sophisticated,
through the emergence of the great
merchant and banking dynasties.
They even had the first strike
by underpaid day-workers
in the cloth industry.
In the next century, the Frenchman
Jacques Coeur, a mega tycoon -
known for originating
the phrase "greed is good" -
overreached and ended up in prison,
forfeiting his vast wealth.
Here was an early example
of what could happen
when capitalism
gained too much power.
It challenged political structures
and it became unaccountable.
Lucrative trade routes to the
American colonies then opened up -
the foundations
of mighty American capitalism.
But it was built, in part,
on the monstrous exploitation
of the slave trade
which also brought
the first calls for its reform.
It was, however, the huge efficiency
gains of the Industrial Revolution
and the rise of the machine era
that really put rocket boosters
on capitalism.
Its profitability spurred on
laissez-faire economic theory
which minimises government
intervention in markets.
A century later,
Karl Marx would throw down
his radical challenge to capitalism,
arguing it was a phase in history,
not an endpoint,
and that it would one day collapse
under the weight of its own
contradictions,
with a little help
from the revolution.
But the main experiment
in anti-capitalism -
the Russian Revolution -
didn't live up to hopes
of a sweeping alternative.
As the old Soviet joke put it...
Despite big setbacks like the
1920s crash and the Great Depression,
capitalism bounced back,
becoming more dominant
in the world and more sophisticated.
Since the crash of 2007 to 2008,
many more searching questions
are being asked of capitalism.
How do we offset the really wide
inequalities of wealth
that arise from it?
Does capitalism globally
need more checks and balances?
As Karl Marx once put it tartly,
"The last capitalist we shall hang
will be the one
who sold us the rope."
If you incline to his view,
you will think that
the contradictions in capitalism
will constrain or, one day,
even end it.
If not, you'll still be buying shares
in the company that made the rope.
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