How Capitalism Became Global ft. Sven Beckert

It's not just like a force of nature. I think that would be a totally wrong way of thinking about capitalism. I think we should think about it as a human-made order that we also can shape and create in ways that is conducive to the well-being of as many people as possible. I'm Bethany McLean. Did you ever have a moment of doubt about capitalism and whether great is a good idea? And I'm Lucia Zingales. We have socialism for the very rich, rugged individualism for the poor. And this is capitalism to a podcast about what is working in capitalism. First of all, tell me, is there some society you know that doesn't run on greed? And most importantly, what isn't? We ought to do better by the people that get left behind. I don't think we should kill the capital system in the process. What is capitalism? It's more difficult to get a clear answer than you might think. Wikipedia says capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of attaining profit. And typically includes things like profit, motive, capital accumulation, competitive markets, commodification, wage labor, and an emphasis on innovation and growth. Oof, what does that mean? It's not even clear that we can describe capitalism by what it isn't. Is China capitalist? Probably the two most famous quotes about capitalism. One from Adesmith is not from the benevolence of the butcher, the brewer, of the baker that we respect our dinner, but from there regard to their own interests. In this view, capitalism is fundamentally an engine that channels off interest into prosperity. But of course, there is the other view, Karl Marx's view, that is the opposite. It is a machine that converts power into profits. Or as Marx said, capitalism comes dripping from the add to food from every poor with blood and dirt. And so who better to explore this complex topic than Sven Beckert, who is the founder of Harvard's program on the study of capitalism, and who as a Pulitzer finalist for his previous book, Empire of Cotton. His new book is an 1,100 and 1 page tour de force entitled, appropriately enough, a global history of capitalism. One of the innovative aspects of this book is that it takes a very global view of capitalism, instead of one that at least traditionally was Eurocentric. He begins his book, not with the industrial revolution with Arasmith, but back in the 12th century in the Yemeni city of Arden. Becker argues that the free market was made by charter, coal, style, and force. And he has written, the state made the market. He also argues that capitalist drives under liberal and in liberal regimes alike. Beckert's book raises questions that are critical to our time, as what some would argue our capitalism's flaws rise to the surface. He calls the process of capitalism one of ceaseless accumulation. So is capitalism inherently ethical, or does it require separate moral foundations? Is it compatible with freedom, or does it bend toward coercion and inequality? Is it perpetual growth, or is it headed for a ceiling? So, Savan Beckert, welcome to Capitalism. In your new book, a global history of capitalism, you attempt over a thousand pages to define something that has historically been quite difficult to pin down. What is capitalism? And so, I'll ask you that question to start. What is capitalism? Why is something so seemingly basic, so hard to understand? I think you are right that capitalism is difficult to understand, or even sometimes difficult, even to notice, because we live in a word that is deeply structured by capitalism. And sometimes it's like the fish in water. It's hard to really understand and even notice the kind of mechanisms and the processes that you are surrounded by. And so, we need to start with the insight that capitalism is a particular economic logic that emerged at a particular moment in time. And then, of course, what this implies is that in order to understand capitalism, you need to understand it from a historical perspective. But of course, there needs to be something that holds the entire thing together that allows us to speak about capitalism when we look at, let's say, the mid-17th century Caribbean. And when we look at Great Britain in the 1850s and Detroit in the 1950s and maybe Shenzhen today in the 2025s, what holds all of these very different kinds of capitalism together is that capitalism is an economic logic that is defined by privately owned capital that is productively invested in order to produce more capital. I think that is the most basic logic of capitalism. And that brings together all these different specific educulations of capitalism at various moments in time throughout history. So, I read particularly the first part of your book, very much as a illustration of Polani's ideas that markets at beginning were kind of isolated and society was dominated. So you have this islands that society kind of ostracized markets and limit them to islands, physical islands or simply ports that were islands. But slowly, these islands take over the world. Is my reading correct or am I over-interpreting? You know, I start out with talking about capitalists without capitalism. So I'm searching out where this capitalist logic comes from. And you can clearly find it in merchant communities in the first half of the Second millennium. You can also find it in merchant communities earlier. So I'm not claiming that this logic emerged at this particular moment in time. You find this logic in many, many different parts of the world. But as you say, it's quite marginal to economic life more broadly on planet Earth. But I think I would take issue with one part of your description of that. And that is capitalism is not defined by the existence of markets. As far as we know, markets have existed in all human societies. Humans have traded with one another as far as we know. So all of human history. So I don't think markets are such a definitive of capitalism. In your book, you also chronicle how capitalism is mutable and has changed not only in place, not only over time, but in place. So is there a simple answer to why capitalism has thrived under both liberal and liberal regimes? And there is, is there a difference in the type of capitalism that has thrived in each regime? Yes, I mean, that is probably one of the most striking findings in the book. I think capitalism is an economic logic that it has a quarter, that's what we discussed, but it's institutional embeddedness. It's political embeddedness. It's reliance on various kinds of labor regimes. It's a very political, territorial organization. Suggest to me that capitalism is fundamentally undermatic. If you think about the 1750s, it draws to a significant degree on the labor of enslaved people in the Caribbean. But it can also, capitalism can thrive in a world in which people have paid wages. So there is a whole diversity of labor regimes. Capitalism can thrive in a world in which they are large monocular states or their city states or they are empires, like the British Empire, the French Empire, or their large nation states, like the United States, or again, small city states like Singapore today. So again, a whole variety of territorial arrangements go perfectly well with the expansion of capitalism. So the abshot of all of that is that I think capitalism is undermatic. And in that way, capitalism is quite different from many of the people who write about capitalism. But going back to markets, of course, markets exist before capitalism. But I see, and maybe I'm wrong here, but I see capitalism as the market starts to influence a greater, greater part of society. Because in the old days, the market was isolated. I come from nearby Venice. There is the original ghetto in Venice where the Jews were confined, where they were landing and there was a very active marketplace, but was limited and limited in a city that was already a merchant city like Venice. In the grand scheme of society, they were super limited. What we observe in modern time is the takeover of markets and recently, where the interview team who, I don't know if you know him, but as we've been a book about the extraction economies. And this is says that the ultimate stage is that now, even the marketplace has been privatized because it's owned by platforms. So I think that that's in my way, the ultimate stage of capitalism, where the market expands everywhere up to this point. No, I totally agree with you. I think that is historically exactly accurate. But I think markets are also always political constructions. They also rely on the powers of the state. And so that's another important argument that this book tries to make is to show how important the state is to this capitalist revolution and how important the state is to the expansion of capitalism. And indeed, I argue at one point, you might take issue with that, Luigi, but I argue at one point that capitalism is, in a way, the most status economic civilization, perhaps, except for Soviet communism. So if that's true, if the state is essential to capitalism, how do you think about capitalism's relationships to what most people consider free markets, which is some sort of ideal market that exists without the state? But then also, what sort of responsibility does the state have for capitalism if it is ultimately a construct of the state? The idea that capitalism is a state of economic life in which the state could, can considerably be absent, is like a theoretical construct that has almost nothing to do with the real history of capitalism. It is a very powerful construct. I think you're absolutely right. The notion that structures also contemporary political decisions, political conversations in important ways, but I have to tell you as a historian from historical perspectives, I think why that might be theoretically conceivable in some ways, though I even doubt that, but maybe it is an economics textbook, but historically, capitalism has never existed as a pure market. But to be fair to my colleagues, probably all economists agree that the state has a very important role, which is the one to define and enforce property rights, which especially, historically, were not well defined, without that intervention you couldn't have a capitalist. I don't think that anybody I know at least think that could be very unethical. Yes, yes, very, very, very, very true. It's more like it's probably not so much in the economics profession, but in the kind of public sphere that sometimes this idea circulates, that somehow there is a foundation of conflict between the state and capitalism, which I think is not the case, I think the state is constitutive of capitalism. And historically, if you look at the last 500 years, you see clearly, you see a massive expansion of the state, and at the same time, you see a massive expansion of capitalism. So historically, there must be some kind of relation between the one and the other. I agree with Sven Luigi. I have to say that that more perhaps more accurate definition of capitalism is confined to the economics department. Definitely not the general public or probably the journalistic sphere, or we would consider capitalism the state to be unethical. Yeah. Yeah. So if I can bring you to something slightly different, I was very intrigued by your story of China. And let me tell you the way I interpreted, and tell me how far off I am. But if I understood correctly, what you're saying is China was a much better developed society, in particular, was much better able to tax in farmers because they could assess the value of the land so it didn't need as a state very much of the revenues from trade. More states in the past were financed themselves through tariffs, a bit like Trump wants to do now. As a result of the independence of merchants, they were able to stop merchants where the merchants were too disrupted to society, in a way in which England, Sotali-Vanis, the Netherlands, et cetera, could not do. The peak of this is when, and I don't know, I think is in the 1500, when there is this big expedition of China to Africa, and then the emperor say no more, and they destroy the ships, and basically stop explorations because they prioritized stability over, if you want growth. I mean, the big puzzle is, so as you described earlier, the word is full of these islands of capitalists. There are many thriving merchant communities in many parts of the world, but there is something happening on the European continent that is quite unique, and that is that in the 15th century, and then also especially in the 16th century, these European merchants now do something that nobody else in the world does, and that is they are able to project their capital into the far reaches of the Atlantic Ocean first, of the coast of Africa, and then of the coast of the Americas, and then into the Americas, they also begin to insert their capital in more meaningful ways into agrarian, and then also industrial production on the European continent itself. So what, and what the question is then, what enabled this merchant to do this? And I think my explanation of this divergence, which makes Europe really quite different in the 16th century from merchant communities elsewhere, is that these European merchants build a kind of coalition with the state, and they, nine themselves with state power, that allows them to break down some of the geographic barriers to the expansion of their economic logic, but also to break down some of the social barriers to the expansion of their logic. This is a slow process, this is not something that's happening overnight, it's something that takes many decades and even many centuries to develop, but there is, I think, no similar development in other parts of the world. The merchant communities of China and India and the Arab world were strong, they were rich, they had accumulated capital, they were actually much superior in manufacturing, especially India and China. So there was nothing in the border, there was nothing in the culture that kind of made them categorically different from merchant communities in Europe. But I think what made them categorically different, eventually was this weird alliance that emerged between state power and the power of merchants in 15th and 16th century, Europe that now prepared Europe on a trajectory that is quite different from those of other parts of the world. And why is this so? I think this is actually ironically has something to do with the relative weakness of European states and the relative weakness of European merchant capital, which is something that you also already mentioned. These European states were not as, you know, critically capable and they were also relatively small, territorially, very, very, very, very, very small, they spent a hell of money fighting each other in wars and that made them deeply dependent on the people who could mobilize resources for this warfare, namely the merchants. And at the same time, the European merchants were hemmed in because they understood very well that the riches of the world were to be found in Asia in India and in China, but the problem they encountered was that between India and China, there was also a powerful community of merchants in the Muslim world and they tried to get around that and they went around it by going into the Atlantic Ocean because they did believe that if they go west, they would find a sea route to India, which obviously Christopher Columbus was most prominent among them, but this didn't happen. So, but there was also certain structural weakness within European merchant communities and that drove them into the arms of the state also in ways unlike what was happening in other parts of the world. And I think, you know, to just to end this story, I think Christopher Columbus is a great person to focus on because he's both a generalist merchant and he combines his energies with those of the Iberian crown and it's this joint project of generalist merchant capital and the Iberian crown that brings European state power but also of course, the investments of European merchants into the wider Atlantic world. Now, one of the big advantages of starting capital in so early as you do is that you can ask the question about what is the role of capital is in triggering the industrial revolution because if you have the two coincides, then you cannot speak about cause and effect. But if they do the wrong side, then you can ask the question. So, what is your answer because I couldn't grasp it very clearly from the book, is really capital is the cause of the industrial revolution or not? Well, let me, why don't you answer? Great point, Lucia, great point. And look, this is crystal clear to me. I mean, so many, so much of our thinking about capitalism basically starts with the industrial revolution. It's as if capitalism is born at the moment of industrial revolution. I think this is totally wrong. I think capitalism is not the child of the industrial revolution but the industrial revolution is the child of capitalists. Even the industrial revolution, as you know, begins in cotton textiles. There is already a vibrant trait in textiles mostly brought from India to Europe to West Africa than also to the Americas. There is already significant capital accumulation that came out of international trade. There are new possibilities of organizing production that began in the sugar industry of the Caribbean. And so all of this combines at this particular moment in time, some artisanal entrepreneurs, some smaller scale entrepreneurs, some of them with very little capital at the disposal, some even just being skilled workers, they now see this opportunity. If we reorganize the production of cotton textiles, there's going to be a huge market for this. And they do. And eventually they find a way to drastically improve productivity of the cotton spinning and then also cotton weaving. And this is what launches the industrial revolution. But this is inexplicable in my mind. It's inexplicable if you don't embed it within this longer history of capital and the kinds of global connections that it produces. You cannot understand the British industrial revolution just by looking at Lancashire. I actually think you understand almost nothing about the industrial revolution by doing that. You need to understand it out of a kind of conjuncture of global events that have been in the making for several hundred years that now kind of focus concentrate on this one particular point, this one particular place in the world and launch what is perhaps the most impact for change in economic organization and production ever in global history. So that is my argument, we do. So in both your previous book, Empire of Cotton and this one, we've in racism and stories of plunder and expropriation, are those core to capitalism? Can you have capitalism without plunder or does capitalism require a kind of plunder in order to thrive? You know, in the end, I don't know. I don't have a good answer to that because we can't run a kind of gigantic experiment. We can only... No counterfactuals, right? But we can only try to come to terms with, understand, and chronicle the history, is it actually unfolded? And we can see a variety of things. For one, we can see there are many capitalist economies and if you think about the word after the 19th century, after the late 19th century, this is a word without basically without plantation slavery. I mean, I understand slavery persists in various forms in various parts of the word, but the kind of plantation slavery that is so important to the capitalist revolution since the 1600s, that is clearly not a central part of the global capitalist economy in 1900 and it's certainly not a central part of the capitalist global economy today. So capitalism can exist without slavery. Okay, so this is point number one. Can capitalism exist without colonialism? Yes, it can exist without colonialism. It is true that for a long moment in the history of capitalism, colonialism plays a very important role. But if you look at the word today, you wouldn't want to argue that colonialism is like a major factor in explaining contemporary capitalism. So yes, capitalism can exist without colonialism. So in a way, that is kind of a natural experiment. We can see that. That said, we can also see that historically, at a certain moment in time, both slavery, colonialism, but then also the dispossession of lands, for example, from Scotland to the Americas, and everywhere in between, this plays a very important role in the history of capitalism. And now let us ask the question of why that is so. Why is that kind of extra market coercion so important at a particular moment in the history of capitalism? And I think the reason for that is the capitalist revolution is a very difficult project, which is also why it unfolds so slowly over so many centuries. It is such a radical departure from how many people on planet Earth organized the economic lives previously that it was very hard to spread this logic into new geographical areas and into new spheres of social and economic life. And that's where we see the kind of coercion in this history coming in. Just think about all these European elites, these aristocratic elites, many of whom were very reluctant to kind of share their power with upstored merchants, because they really threw great profit from exploiting the local peasants and taking away their products. So they were often quite reluctant to let the logic of capitalism spread into new spheres of economic life. And just think about all these people who are around the world engaged in subsistence production, who were very reluctant to suddenly become wage workers in some factories. And you can trace that in many, many different situations. I, for example, I've read a lot about the Scottish cotton textile industry in the late 1700s. And one of the main problems that manufacturers in Scotland faced was how do we get people to work in factories, because people did not like working in factories, indeed, many were afraid of working in factories. And so what clearly was very helpful to these manufacturers was when people in the Scottish Highlands and elsewhere lost access to their land and therefore had no choice but to end up working in the factories. The same in India, when the British in the 1840s or 1850s tried to build cotton plantations in India that were supposed to produce cotton not by enslaving the workers, like in America, but by paying them wages. It was almost impossible to find these people to come to work on these cotton plantations because they much preferred to engage in their own subsistence agriculture in the villages where they came from. And so there was a discussion among British merchants in the 1840s and in India. Maybe we need a little bit of coercion to bring people into cotton agriculture. So this is all just to say that this is a radical transformation in economic life and in life more broadly. I think that explains why coercion plays such an important role in certain moments of the history of capitalism, but at certain moments, if you think about this possession, okay, now the question is, well, where are we now? So this possession is certainly a very important theme in the history of capitalism and you find it at many different moments in the history of capitalism. And in some ways, you can even find it today as we learn the newest kit on the block artificial intelligence is being fed by the collective labor of all of us that we have produced over generations and that so far has not been renumerated because the books and articles and everything we write is being fed into these machines to produce what is then called artificial intelligence, but it's really based on our human intelligence that we labored very hard for and did not get compensated for when it was used for the purposes. So this process in some ways is also ongoing even though it looks very different from the land dispositions that you find in the Scottish Highlands in the 1760s or so. So this might be a slightly butchered question because I'm thinking about a couple of different things, but you use the word global and you use the word unpredictable a lot to describe capitalism. So if we think now, some would argue that we're in a period of capitalistic excess, but if the state and capitalism are inextricably bound up, does the state then bear any responsibility for the direction of capitalism or because it is unpredictable and global is it too much for any one state? Are we living with the laws of unintended consequences if any one state attempts to structure the future of their brand of capitalism? No, no, not necessarily. I mean, I do emphasize, as you also just pointed out, I do emphasize very much how capitalism changes quite drastically over time. It's institutional embeddedness changes significantly over time. The kind of golden age capital of the capitalism of the 1960s is very different, let's say, from the more laissez-faire capitalism of the United States in the 1920s and a significant role in facilitating that change over time is certainly state policy. So for example, we talked earlier about the importance of slavery to the early history of capitalism and there was widespread belief, if you read British merchants or British parliamentary debates, there was widespread belief in the early 19th century, even that this kind of commercial capitalist economy could not survive without also drawing upon the labor of enslaved people. But then we see massive rebellions against slavery both in a place like Sando Man in present day Haiti, the American Civil War has also been seen as a kind of slavery rebellion. There are lots of slavery bellions on various Caribbean islands. So the people who were very poor did not have much power, were often illiterate. They affected a huge transformation in global capitalism. They helped create a capitalism without the plantation slavery. And this is also the case for a 20 century capitalism. In the late 19th century, these the emergence of a powerful labor movement, that labor movement, organizing industrial workers had a significant impact on the structure of, especially post-1945, capitalism in Europe and in the United States, thanks to a variety of political interventions. So in a way, my story should give us a certain confidence that we can shape this order. It's not just like a force of nature, that we can just, it's not like a godly order, and we just take, we just adjust to whatever this god order demands of us. I think that would be a totally wrong way of thinking about capitalism. I think we should think about it as a human-made order that we also can shape and create in ways that is conducive to the well-being of as many people as possible. I would go even farther. We'll say that whenever you hear capitalism, that if you change an epsilon, capitalism, as we know will end, is a kind of a fake claim. Capitalist goes on. In fact, to some extent, an inspiration is the pressure from a democratic system made capitalism work for everyone. The big successes of capitalism, at least when you think about the broader set of the population, comes with a conjunction with a democratic system. It's not a capitalist can need a democracy to exist, but need the democracy, my view, to exist in a positive way, the way to work for everyone. No, I totally agree with you. And I think the history of capitalism, not just of the last 100 years, but of the last 500 years, really, shows that to be the case. But if we think about the 20th century, just think back to the 1950s in the United States, when we have a marginal tax rate of up to 93%, we have a very powerful union movement. We have a significant compression of social inequality in the United States. And at the same time, we have really quite spectacular economic growth. So yes, I totally agree. And that should encourage us. I think in the neoliberal era of the last 50 years, so many have kind of given up the idea that we can shape the society in which we live, because we are in the end just hand made in the market as God. But I think the history of capitalism shows this exactly not to be the case. And that we can actually shape the word, we can shape capitalism in a variety of ways. So a philosophical question that your book made me ponder. I thought that capitalism, at least as it evolved in Europe and America, ended up subverting the traditional definitions of aristocracy and the traditional inheritance of aristocracy. But now it seems to be creating its own form of an aristocracy of the very wealthy around the globe. Is that a natural evolution of capitalism? And I think based on your answer that you just gave, no, we can reshape that then. But do you think that's a fair reading? Yes, no. I think capitalism is categorically different from an aristocratic of human society, because in an aristocratic and feudal society, what in the end counts is to whom you were born. And there is really not much you can do to your social status. Once you were born to a feudal lord, it's categorically different from being born to a peasant family. And that's different in capitalism. Capitalism, and this is one of the emancipatory effects of capitalism. Capitalism does allow for social mobility. You can be born to the peasant, and you can become a rich woman or a rich man. Not that this typically happens, but conceptually is possible. And historically, it's true too. I write about this example of a Swiss cotton worker in the 19th century, who is just a skilled worker. By the end of his life, he owns like a number of factories. This is hard to imagine in the feudal order. So there is something categorically different about capitalism. It does create possibilities for social mobility, at least conceptually. But what we see, of course, is that there is a tendency of capital to concentrate in fewer hands. And of course, once this happens, those people who come to control such great resources are developing ideologies and ideas and legitimations for why the word is structured in this particular way, why they must have almost everything and everybody else has a very little. But I think that is just the kind of ideology. And things can change. Just think about it. In 1861, there was a significant accumulation of wells in the American South. What did this wealth consist of? It consisted largely of enslaved workers. Fast forward to 1865, those property rights are abolished. And so there is a significant redistribution of social wells. So there are many, many other examples for that in history. So yes, I think there is a tendency within capitalism to concentrate economic resources and I think there is clearly a preference among entrepreneurs from Monopoly. I don't think that comes as a great surprise to anybody teaching at a business school. But there are also historically ways to limit that. And the state again has historically played a very important role in that. But it becomes, of course, politically more difficult because economic power also translates then into political power, as we see. So we're now in the United States and other parts of the world. This went to your point of the feudal order based on birth. When I was a little kid in Italy, I interacted with some older richer people. They will ask you how you were born. Of course, they didn't want to detail because they want to know basically what family was coming from because that's what was the most important thing. This was not in the Middle Ages, but was a few years ago. But I want to actually end with a more provocative question because you define capitalism as an expansion of the market sphere everywhere. And so I don't see why you don't identify feminists as intrinsically capitalist because at the end of the day, the role of women in society is based on tradition. And the more you expand, the family is part of tradition. And the fact that at least historically, the task we're located in a very uneven way was the result, not of market forces, result of traditions. As the market forces come in, and as women go to work, this crumbled down. So it isn't like a capitalist, essentially feminist. But I don't know about that. But I think that, yes, that is important. I think capitalism in its pure form, in the sense that it structures all economic relations, all social relations, has never existed and perhaps cannot exist. Because in the end, at all moments in history, so far, capitalism has rested on the sphere that is outside the market. And the family is clearly one of the most important spheres outside the market. In 1981, there was a group of French feminists who calculated how much of economic output in France in 1981 is produced outside the market within families, namely mostly by women, like child wearing, cooking, cleaning, and all these things. And they come to the conclusion that about one fifth of all economic activity in France in 1981 is produced outside the market, namely within families. This might be diminishing now. The market is certainly making inroads into the family. But I think it still remains to a significant degree also a rhyme outside the market. And so, yes, we started out talking about what is capitalism and we defined the logic of capitalism as the kind of process of a faceless expansion and a ceaseless accumulation. But I think there are also certain boundaries that the pre-conditions of the ability to organize economic life along this logic is also the existence of a rhyme outside this logic. If you're enjoying the discussions Luigi and I have on this show, there's another University of Chicago podcast network show you should check out. It's called entitled International Lawyers, Claudio Flores and Tom Ginsburg have traveled the world, getting into the weeds of global human rights debates. Unentitled, they use their expertise to explore the stories and the thorny questions around why rights matter and what's the matter with rights. Subscribe to entitled part of the award-winning University of Chicago podcast network. I was really curious about one thing he said. So I remember from a previous paper that you wrote about the Medici Empire in Florence back in the Middle Ages. And I think your argument is that the combination of the state and capitalism when the aims of both became the same ended up actually breaking the system and that that was dangerous. And so I thought it was really interesting that he made this argument that the state and capitalism evolved simultaneously and that one of the reasons you saw a more aggressive form of capitalism, perhaps a more successful form of capitalism come out of Europe. First is because the state so desperately needed the merchants and needed capitalism. And there was this twining of the two. And so I thought that perhaps contradicted your point of view, but maybe I don't understand your point of view well enough. And I'm curious to know what you think of that. No, it doesn't. I was simply saying that in the case of the Medici, they made their fortune in a competitive market like lending. But then they used this fortune to completely capture the state to their own advantage in a way that was very reparsals and opportunistic. So they got concession for their minds, they got concession for these, they got concession for that. And they survived a long term as a powerful family because they transformed their money into power. The secret of the most successful states, like the Republic of Venice or the Republic of the Netherlands or later England, was that the capture was by if you want a class, not an individual or a family like the Medici. And so yes, they were at the service of a community. So there is no doubt that they were driven by the interest of the merchants. And think about the way in which England got involved in a colonial India was because they used India company, started to conquer India. And then they had to basically rescue them at some point and bring the army. So I think there is clearly a role played by the merchant in shape in England, but it was more like a community rather than a family. And so that probably made things a little bit better. But why would that make things better? Wouldn't that actually make it worse? And I'm hammering away at this because it does seem to me to be perhaps indicative of where we are today in the sense that in the US, the government and business are, I think, more amassed than they've been in previous administrations. And I'm trying to figure out if the past, either Becker's view of the manifestation of capitalism in England might be more where we are or if we're back in a Medici like era. And so if there is a difference in the outcome, then that seems to me to be important. No, no, I think it's very important. I guess how important is the pushback of other categories in a sense that there is no doubt that in England, the merchants were dominant, but they were not the only force. There was a pretty strong agricultural lobby that was pushing the opposite direction. And so from this, if you want competition among lobby, you add a better outcome than a complete domination by one group. I think in Venice, for a while, you add a pretty good outcome, but maybe eventually became too in one looking and now sufficiently open to a new innovation or new lobby or new ideas. So what else stood out to you? I like that he didn't have an easy answer when he talked about capitalism in the state that the state can change. The state might be unpredictable, but that doesn't obviate the state's rule and trying to set the guardrails for what this looks like. And I think that's actually maybe about as good an answer as you could have, even if it's not crisp or ideological. So one thing that I actually buy from his narrative, which I think is interesting, is people do not have a notion of the power of accumulation in the past because it's so difficult to do it. In a war in which basically labor is not a mobile, you can't buy land. How can you become rich? How can you see yourself accumulated to become richer? The example that he gives of the Barbados is fascinating because all of a sudden you have literally a clean slate. Now, I grant you was made clear by wiping out the locus and bringing in slaves. But is a moment in which you actually have no social boundaries. And so you experience for the first time the power of accumulation. And once you understand that power, then you try to apply everywhere. This is the, I think this message that capitalism was born in islands, physically and metaphorically, and then expanded and slowly conquer the rest of the world. So you've seen in Ireland, what can you do without any social constraint? And then you can try to add the same lack of a constraint everywhere. So after all, the beginning of capitalism was laissez faire laissez passer, which I later learned that actually was laissez faire laissez nu passer, which nu is us, the entrepreneur. So let us do what we want. This is the beginning of capitalism, which is in the sense, is the extrapolation of, oh, let to our self in Barbados, we can make a lot of money. If you let us do the same here, we can make a lot of money as well. So let us do what we want. Let us do what we want is awfully close to Silicon Valley's modern mantra of move fast and break things, right? Absolutely. You know the expression of nothing changes. Everything changes and nothing changes. Yeah, exactly. Yeah, I think that point of his was one of the reasons I was prepared, not not not to like him, not necessarily because it's true, but because it felt ideological and it felt even a little bit sort of catering to some of the forces of our world that capitalism was born of plunder and conquest. But I actually really liked what he said on the podcast that just because that played such a pivotal role in capitalism's development in it and escapeably did, but that doesn't mean that that's capitalism today because he isn't fixed on a definition of this thing that is always mutable and changing and that looking at it through the lens of history, well, yes, it did. Slavery played a role in capitalism. Absolutely. Dead. You can't avoid that. But then he also was unwilling to say, well, you need slavery for capitalism to continue. And actually, I really appreciated that nuanced way of thinking about it. Yeah. If we had more time, I would like to push him on the following point, because in the book, he seems to attribute a lot of things to capitalism like racist, patriarchy. And I asked the question about patriarchy, but I had a question about racist, for example, to say, societies are racist, whether they are capitalist or they are not capitalist. In the sense, the Soviet Union was racist, a lot of primitive society are very racist. So I don't think that racist is essential to capitalism. And now, capitalism is not necessarily anti-racist. So the question is, whether capitalism makes races worse or better? I think with races, my line, which is very much a Chicago line, is that actually makes races less bad in society, because the people who are racists are penalized. And what matters is what is the marginal investors, as long as the marginal investors are not racist, you don't feel the impact of races as much. Then in a non-capitalist society. But I don't know what he would thought. My guess is that he wouldn't have answered it independent of time and context. In other words, in the American South, when cotton ruled and slavery was how cotton producers produced their cotton capitalism, probably the capitalist nature of cotton probably made racism worse. And actually, I agree with you. I distinguish between races and slavery. OK. No, no, no, but that's a very good example, because to some extent slavery existed everywhere. For example, I was not aware until recently, and thanks to the sensitivity that's developed in the United States, I started to ask about in Italy, when there was slavery, what there was not slavery. Now, the Pope made slavery of a Catholic or a Christian illegal. But it wasn't a Christian, you could have a slave. And so there were slaves in Italy, pretty advanced age. So in the Renaissance, for example, was not unusual to have this slave. Then initially, you were actually from Central Asia, especially women. And later on, when Constantinople was conquered by the Turkish, then they started to impose some slaves from Africa. But it was mostly domestic slaves. So not that this is trying to condone slavery. What I'm saying is slavery was kind of marginal in society. And so the brutality and the scare were very limited. Capitalists basically took this slavery that was present everywhere in the world, because there was basically no state in the world, which was slavery, and brought it up on a scare so massive was terrible. And at some level, if you want to be positive, created a backlash. And that's one of the reason why there was a resistance slavery. But maybe it would have happened anyway, I don't know. But the point is there is no doubt in my view that capitalist made slavery much worse. When it comes to discrimination, I think discrimination, competitive capitalism make discrimination less bad. Yeah, I struggle with that, but I think the part of that is because I'm not sure, going back to our earlier episodes on meritocracy, I'm not sure many of the places that would consider themselves meritocracies actually are given what we see about people choosing other people who played the same sports as they did in college for the right job. And so I think if capitalism might get kind of back to that Adam Smith Quotar, our discussion about Adam Smith, capitalism worked in this beautifully idealistic way, then I would think it would be very anti-discrimination of any kind. But I don't think we see the Pyramanifestation of capitalism in action very, very often. It is true, but because I don't see we, I don't think we see Pyrameratocracies in action. No, there is never pure meritocracy, but it is a fact that the University of Chicago, that as you know, was founded much later than the most famous university on the East Coast, higher a disproportionate amount of Jewish faculty, and not out of law for Jewish people, but because they wanted to catch up to university in the East, the University of the East tended to discriminate against Jewish people. And so if you wanted to have good faculty that were available on the market, most of them were Jewish. The competition among universities reduced the effect of races. Now this is not universal, it's not everywhere, but I think it is an interesting fact. Yeah, it's a really interesting fact in your right that would have been a fascinating thing to debate with him. Again, my best guess is even understanding the different, even thinking about the differentiation between slavery and racism and not associating the two closely is that you could probably point at an example. You could probably find whatever example you wanted to to justify the point you wanted to make, but it's still a really interesting question. But it's not just, I agree you can justify, you can find an example, but I'm trying to understand even theoretically how these things interact. So think about, for example, pollution, he talks a lot about pollution and the damage to the environment, which is no doubt a side effect of capitalism. However, if you look at what I've done in the Soviet Union, it wasn't clear that in a known capitalist world, actually, you would have done much better. So to what extent this is an impact of progress, to what extent is an impact of progress without a proper understanding of people? Because take, for example, China, China polluted a lot until very recently. And now all of a sudden became much more aware of this. And now is down gigantic steps in trying to reduce pollution. Think about India. India is polluting an enormous amount. Many of the cities are unlivable because of pollution. And you don't see a trend to fix it that in sight. Well, I think I would argue, and I don't know if this is what he would argue, but just based on the intellectual foundation of his book, this idea that the state makes the market. And in China, you saw this great lurch because the states had the rules here, where we saw pollution be out of control. It was because the polluters externalize their costs. And that's because the rules up by the state. So I think it all depends in that case that actually does to me reinforce this idea of his, which you and I have tossed around before. And we've we've thought about another conversations that there is no there is no market that exists outside of the rules up by the state. And so even in the case of pollution, or especially in the case of pollution, it depends on the rules up by the state. Now that's for sure, but the question is, what are the incentive of the state? You would expect the state in a, for example, Soviet economy to be more independent from producers. And so most sensitive to the issue of pollution. But it wasn't. I'm not sure I would I would think that because I think of your your previous point. It's still progress and its progress, whether it's capitalist progress or progress toward keeping your population safe and warm. And so and fat and so pollution seems to be worth the cost until it doesn't. Yeah, but so I think it would have been interesting because having this discussion to what extent is pollution a natural consequence of progress to what extent is you need to the capitalist situation? Now, more importantly, is capitalist exacerbating the pollution problem or is attenuating the pollution problem? Depends on the rules set by the state. Yeah, but if the state is, no, no, I understand, but if the state is part of the equilibrium in a capitalist regime in a capitalist system, if the company have so much power of the state, can they rule in in a such an effective way that mute the power of the state or not? Well, that's back to here where we began this conversation with the madaches and whether it's a family that controls the state or is too amished with the state or whether it's a producer class that controls the state and doesn't matter for the for the outcome or do both come with their dangers. But at the end of the day, I think that this is where democracy is very important because in the states, for example, the dramatic improvement in reducing pollution in the 70s was the result of a democratic movement. The started with the Silent Spring book by Rachel Carson. It had very important effects. Yeah, so maybe it's interesting. Maybe it's that to our ongoing conversation about democracy and capitalism going hand in hand. Maybe it's that democracy gives capitalism the moral backbone that it needs that it might otherwise be lacking. And I suppose I could start challenging that even as I say it in the sense that China has been able to address some of its crises through the state setting, the moral backbone, but maybe democracy is the necessary antidote to capitalism that enables it to thrive. Let me qualify what you just said, because I think it's important. You need a state that gives a moral compass to capitalists because capitalists is a moral. It's not an aside, e-moral, but it's a moral. And then the question is, what is the political system that gives the most moral compass or is better at giving this moral compass? And this is a bit autologically, but I think a true democracy is the best. If you end up in a plutocracy, this might be worse than an autocracy because occasionally the autocrats are concerned about the population. And in a plutocracy, you're not. I actually really like that. See, thinking out loud together, I think we got somewhere that it's satisfying it to the two of us if not to our listeners. Capitalism is a podcast from the University of Chicago podcast network and the Steegler Center in collaboration with the Chicago Booth Review. The show is produced by me, Matt Hodeb and Leah C's Reign, with production assistants for Utsav Gandhi, Matt Lucky, Sebastian Berka, Andy Shee and Brooke Fox. Don't forget to subscribe and leave a review wherever you get your podcasts. 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