Capitalism: The Story behind the Word

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What this history shows is that many of the problems we now associate with capitalism in fact have little to do with the kind of social organisation implied by a more literal understanding of the term. The inequalities generated by the differentiation of labour – either between the skilled and unskilled, between town and country, or even simply between different occupations – as well as the social atomisation it produces, and the destruction of traditional communities, ways of life, and professions are not really determined by the distribution of capital. MS: Marx’s hostility to the idea of equality was based on the initial idea that laws or rules work like markets and prices, because they apply generally to everyone irrespective of their real differences. Markets, as the saying goes, are impersonal, because the things that make markets possible, like quantities and prices, are measurable. But people have personalities, and some aspects of personality are incommensurable. Marx’s hostility towards equality was connected to a set of distinctions between singularity and universality, particularity and generality, irrationality and rationality—or, to put it more directly, between whatever is involved in making me different from you, although we are both human beings and, in this respect, are subject to the same sort of causal processes that are built into natural and human life. We live, in short, in a causally determined world, and the propensity to subordinate individuality to generality is an effect of how the idea of causation presupposes something fairly general that can be applied to something fairly particular. Lamartine and Lafargue’s warning went unheeded. By the time that Marx wrote his magnum opus Capital, capitalism and the division of labour had already come to be jumbled up together. Today one would be hard-pressed to find commercial society disaggregated from one another outside academic discussion. ‘Capitalism’ (alongside newer concepts like ‘Late Capitalism’ and ‘Neoliberalism’) now routinely takes the blame for many problems which have little to do with inequality of capital ownership. Though these problems, including alienation, hierarchy, unchosen dependence, social atomisation, and even the necessary ardour of work, are all too real, none of them would necessarily be resolved by a redistribution of property. Thanks for your very interesting post. Let’s assume that you’re right about the influences on historians of capitalism, especially if “poststructuralism” remains, as you write, a conveniently “nebulous term.” There may be something fascinating about this:

But this interdependence and the alienation which membership of a vast community might cause are also inevitable. It is, one hopes, not too glib to observe that what intellectual historians have often termed Commercial Society, or in the Hegelian mode Civil Society, is not very different from the meaning ascribed in ordinary language to the unmodified concept of society itself. The question of how to live with the division of labour is, therefore, also the question of how we can live together in a complex society, whose diversity of social roles and political positions will naturally lead to certain inequalities, injustices, and resentments arising, and of how we can reconcile this state of affairs with the formal equality demanded by our political aspirations. The meaning of a text is constantly subject to the whims of the future, but when that so-called future is itself ‘present’ (if we try and circumscribe the future by reference to a specific date or event) its meaning is equally not realised, but subject to yet another future that can also never be present. The key to a text is never even present to the author themselves, for the written always defers its meaning. Sonenscher astutely calls our attention to the original meaning of capitaliste and its implications."—Martyn Ross, Applied Political Theory This political awakening overlapped with certain intellectual trends that were similarly pervasive at this time, themes or tropes that help us understand why “capitalism” looks the way it does in the history of capitalism—why it is conceptualized the way it is. For this argument, I want to jump off from the Levy piece cited above, which (despite my quibble with its dating of the field’s “arrival”) is absolutely brilliant, one of the most stimulating theorizations of the field’s foundations and suppositions yet written. DSJ: In what way did Marx contribute to the transformation of Smith’s “commercial society” into “capitalism”? Why did he err in conflating capitalism with the division of labor?Provocative. . . . [ Capitalism] will provoke much discussion in the fields of modern intellectual thought, political economy and various stripes of global history."—Tom F. Wright, Times Literary Supplement

In this context, the initial thought came from Rousseau and his examination of what he called the “separation of professions.” This, he argued, was responsible for the subordination of agriculture to industry—or of primary producers to other types of producers. It also, he argued, explained why the production of necessities—as against the production of what are now usually called “discretionary goods” or, in the 18th century, was called “luxury”—is the key to understanding measurable forms of economic and social inequality. In more recent terminology, these differences are frequently described in terms of development and underdevelopment, Global North versus Global South, imperialism and exploitation, etc. Superbly researched and thoroughly referenced, the originality of Michael Sonenscher's study lies in illuminating the very real political problems faced by French Revolutionary regimes in the 1790s through an examination of the fraught relationship between public credit and social inequality as debated in contemporary political thought. . . . [A] fascinating reconstruction of the sophisticated, contradictory dynamics of eighteenth-century French political thought."—David McCallam, French Studies But for the later Marx, it was clear that the abolition of the division of labour was a chimera, which would spell the destruction of the genuine progress made by the forward march of capitalism, for little gain. Labour, Marx recognised, was inevitable, and the division of labour constituted the perfection of humanity’s productive capacities.MS: The most straightforward working definition I can think of is “working to live,” as against “living to work.” But in saying this, I am talking as much about the division of labor as about capitalism, because, as I have tried to explain in my book, capitalism is fundamentally a property theory, while, as Adam Smith’s term “commercial society” was intended to indicate, the division of labor is fundamentally a market theory. (The division of labor, Smith wrote, was limited by the extent of the market.) Property can be owned, but markets have to be managed, maneuvered with, outsmarted, put up with, or generally dealt with. The underlying idea in this working definition is the initial absence of choice. In its initial usage, “capitalism” described something quite different from this, because it was associated with the subject of public debt and war finance. Capitalism is therefore a hybrid concept that has more to do with correcting the effects of the division of labor than promoting them.

Hegel’s famous distinction between Civil Society, the realm of private social and economic relationships, and the state, the realm of formal legal position of citizenship and the apparatus of political rule, was, Sonenscher argues, in a certain sense an adaptation of Smith’s distinction between utility and justice, or at least an approach to the same problem. But Hegel, who was a close and devoted reader of Smith, also showed how the division of labour could be brought to heel without its abolition, allowing a harmonious society to be established with commerce as its basis. For Hegel, these two spheres could be reconciled because the state bureaucracy, which executed the wishes of the political realm within the private one, funded by a mixture of taxation and public debt, enjoyed a liminal existence between the two and could, perhaps, use public resources to offset the tensions in the private sphere. DSJ: What then are you trying to recover from the older understanding of capitalism, especially if, as you argue, the division of labor cannot be overcome? Capitalism is a word used variously to describe an economic and social system, a modern form of political power, a dynamic mode of production, a stage in a world-historical process running from feudalism to communism, a western object of ideological allegiance, a durable form of inequality or, more simply, a thing. Like many other words that end in “-ism” (think, for example, of liberalism, atheism, nationalism, feminism or environmentalism), capitalism is the name given to a number of originally separate subjects and problems that, because of the ending in “-ism”, came to be grouped together as a single noun. In this purely etymological sense, capitalism began as a kind of shorthand for a ramifying array of moral, political, social or economic problems that, at the outset, were once quite discrete. Surprisingly, the problems in question were considerably less familiar and more varied than those usually associated with most current versions of the concept of capitalism. Modern conceptions of capitalism standardly refer to subjects like states and markets, empires and slavery, power and patriarchy, prices and profits, money and exchange, value and surplus-value, property and commodities, machinery and industry, religion and ethics, custom and law, entrepreneurs and firms, and, probably, a great deal more. I have tried to make a similar argument a number of ways now, but I don’t think any version of it has proved very convincing. My underlying argument has been that the new history of capitalism has an important intellectual debt to poststructuralism, and particularly to poststructural theories of language that were taken up in history and the social sciences as “the linguistic turn.” But “poststructuralism” is, particularly for many historians, a nebulous term: the set of associations it carries and even the particular thinkers or texts connected to it may differ widely from one person to another. To be more precise, one’s exposure to the term (and thus one’s understanding of what is included under it) likely depends largely on the nature and timing of one’s graduate (and maybe undergraduate) education.MS: The difference follows from my working definition of “capitalism.” It is important, to begin with, to see that we are talking about concepts as much as about historical arrangements and historical realities. The fundamental historical difference between capitalism and the division of labor was that “capitalism” referred initially to war finance and public debt, while the “division of labor” referred initially to technical and occupational specialization on the one side and markets and prices on the other. The concept of capitalism, in short, did not initially have anything to do with the concept of the division of labor. They both, however, had and still have a lot to do with capital. Capital can be no more than a simple monetary or financial resource, but it can also be a productive asset, an intellectual property, a creative resource, a material good, a cultural endowment, or a competitive advantage. Capital can be a form of property or part of a system. Capital can be owned, but it is not clear whether the division of labor can be owned, because it is not clear whether it is possible to own a price or a market. Prices and markets can all, of course, be managed, controlled, neutralized, or circumvented. The division of labor means “working to live,” because it means that human lives have become irrevocably interdependent. Capital means “living to work,” if that is what takes your fancy. Most of us have to work to live and, for better or worse, also have to live with the consequences. That’s totally all right! I was just confused as to whether I should be speaking on my own behalf or trying to consider your questions from the point of view of Levy’s essay.

An intriguing, ambitious, brilliant, and extremely illuminating discussion of the nature and scope of the concept of capitalism that moves far beyond any previous commentary.”—Keith Tribe, author of Constructing Economic Science: The Invention of a Discipline 1850–1950I should take responsibility for any confusions about Levy’s argument here: your two objections may be my fault rather than his. This account of the birth of commercial society was not, as Sonenscher shows, particularly concerned with the concepts of ‘capital’ or ‘capitalism’ as they had emerged in the 18 th century. Unlike ‘commercial society’ which is a theory of social organisation, ‘capitalism’ is a theory of property which arose from a primarily French debate about public debt, state credit, and war finance in the century of continent-wide warfare prior to the French Revolution, a debate which only occasionally intersected with debates about commercial society. Nor did thinking about capital and capitalists require a debate on markets because, as Sonenscher acutely observes, the initial accumulation of capital had less to do with free exchange and finance than forceable extraction and military conquest.