pretty much every economy in the world is organized along capitalist lines
but at the same time, capitalism is almost everywhere regarded
with disappointment, frustration and suspicion.
Interestingly, none of the criticisms are new. They've been dogging capitalism
since its inception. So let's look back in time
to figure out how capitalism got its bad name and what might be done
to improve it. Padua, Italy, 1304.
0n the wall of a church in Padua near Venice, the painter Giotto makes a
Jesus and the Money Lenders. It restates for his own times
an idea that had by then already been well established for centuries in the West:
the notion that a good spiritual life and the pursuit of business
and money are sworn enemies. Jesus goes to the temple in Jerusalem,
sees merchants and small-time bankers crowding the forecourt and gets furious.
This sacred place is not a fitting arena for the polluting activities
of buying and selling. The Christian attack on the immorality of money
is deeply influential and severely holds back the development of capitalism
for centuries. Venice, 1450.
A Franciscan friar, Luca Pacioli, publishes the first ever book on
Summa de arithmetica. It's the single most important capitalist invention
until the birth of the joint stock company and the modern factory.
In the book Pacioli introduces the principle of double-entry bookkeeping
which gradually become standard practice in all companies.
Pacioli's textbook proposes that dealing well with money
doesn't depend on faith anymore. Money isn't a divine punishment or reward;
it's a kind of science that can be learnt through patience,
reason and hard work.
Geneva, 1555. In powerful sermons to his congregations in Geneva,
the Protestant theologian John Calvin emphasizes to his Swiss
audiences the importance of what have become known as the Protestant
virtues: hard work, self-denial, patience,
honesty and duty. These will turn out to be extremely useful qualities
for capitalism. Calvin along with many other preachers who share his
outlook explains that you must never indulge yourself not spend money having
a lavish life.
You must simply put any surplus income back into your business
as an investment. Calvin adds that being good at business
is far more pleasing in the sight of God than being an aristocratic
warrior or even a monk. Perhaps more than technology,
it's this new mindset that will accelerate the progress
of capitalism. 1670,
Delft, Dutch Republic. The newly independent Dutch Republic is the world's
first explicitly capitalist nation where lazy aristocrats
are looked down upon and hard-working merchants revered.
In the churches, Protestant sermons about thrift and hard work are heard.
In the arts outgo glorifications of kings and queens.
Johannes Vermeer finishes painting The Lacemaker,
a depiction of the intricate careful and homely tasks
of manufacturing lace. In his painting The Little Street,
the suggestion is that living peacefully and quietly in your own home
running a business is far more glamorous and noble
than fighting in a war or going to a monastery.
1776. 141, the Strand, London.
These are the offices and shops of Strain & Cable, publishers
who have a big success with a new book: an inquiry into the nature and causes of
The Wealth of Nations
written by a Scottish philosopher called Adam Smith.
Smith demystifies wealth creation by explaining how capitalist economies grow.
He reaches several important conclusions. Slavery
is remarkably inefficient. Violence is less of an incentive than money
for a worker and the cost of buying and maintaining slaves
far exceeds the cost of wages. Capitalists will make far more money
by treating their workers legally and humanely.
It's by specializing that economies grow, says Smith.
Smith focuses on the pin making industry and concludes that while
one worker could make up to 20 pins a day, a team of
10 workers well arranged could make not 200 but 48,000 pins,
thanks to what Smith terms the Division of Labour.
Smith also tells us that capitalism is guided by an invisible hand.
By maximizing one's own profit, individuals
inadvertently benefit society providing goods that people want and need.
As Smith puts it: "It is not from the benevolence of the butcher, the brewer,
or the baker that we expect our dinner, but from their regard
to their own self-interest." These ideas further remove the moral suspicion
that once surrounds capitalism. But not all will be won over.
1854, London. The British economy
is now the largest in the world thanks to its enormous industries of cotton,
shipbuilding, steel and coal. Vast cities have chewed up the countryside of
the Midlands and northern England. Merchants and the newly rich capitalist
have triumphed. But many are furious. Charles Dickens,
one of Victoria England's most passionate critics of unrestrained capitalism
publishes a novel: Hard Times. Set in the fictional town of Coketown,
a version of Manchester, it takes aim at heartless capitalists
like Mr. Gradgrind who abuse their workers, exploit young children in mines
and use their relentless capitalist logic to blind them to their desecration
of nature and human life.
Here is Dickens' writing on Coketown: "It was a town of red brick, or a brick that
would have been red
if the smoke and ashes had allowed it; but as matters stood
it was a town of unnatural red and black like the painted face of a savage."
Dickens argues that capitalism is evil because it encourages appalling
conditions for the producers.
Under the sway of capitalist logic otherwise quite nice people
will keep coming up with reasons why it's okay to employ
a child in a factory or to let poor people starve once they've reached the end of
their working lives.
1860, London. The English reformer John Ruskin
publishes Unto This Last, a furious track against capitalism
that takes aim not so much at the production side of capitalism
as the area of consumption. Like Dickens
Ruskin is incensed that people are being exploited
and the environment ruined. But he asks a further question:
In the name of what? Ruskin notes that large capitalist fortunes
are built up on selling people absurd things: knick-knacks, fancy plates,
bonnets carved sideboards. The whole of the suffering of the cotton factories of
are being fed by our appetite for very cheap shirts with delicate collards.
We are ruining our lives for trinkets, whereas for Ruskin
money shouldn't only be made morally, it should be spent morally
on the truly noble and beautiful things that humans need.
He contrast the beauty of Venice with the ugliness of modern Britain
to make his point. Berlin, 1963.
The leader of communist East Germany, Walter Ulbricht
launches an ambitious new scheme: the Neues Ökonomische System
or NÖS. It aimes to solve for East Germans
the two major failings of capitalism in his eyes.
One: It will guarantee workers good conditions with a huge expansion in the
state schools, housing blocks and holiday camps. And secondly:
It will focus not on the fripperies of capitalist production
like blue jeans and pop music; it will give people the works of Plato and Marx
and uplifting television programs about track to production.
1976, Dresden, East Germany.
The fatal flaws of communism come to a head in January
with a massive riot
about the unavailability of coffee. East Germans love drinking coffee
but a huge rise in global prices means that the German Democratic Republic
can no longer afford to import it in the necessary quantities.
The Politburo decides to remove all coffee from shops
and replaces it with "mich Kaffee", mix coffee
which is 51 percent coffee and 49 percent a range of fillers including
chicory, rye and sugar beet. Dissatisfaction with this
eventually has to be quelled with the use the Stasi or secret police.
It's an inadvertent tribute to capitalism which is especially good
at providing us with life's little luxuries. Edeka hypermarket near Hamburg,
November, 1989. East Germans who have recently breached the wall
head straight for West German supermarkets like Edeka near Hamburg.
They marvel at the productive capacities of capitalism
and the ability that it has to provide such modest but very important things as
olive oil, party hats, ice spuns and coffee. The old East German elite
who had believed that the people could be satisfied with philosophy,
athletics, sauerkraut and TV programs about farming
are hounded out of office.
1999, Seattle, USA. The World Trade Organization,
a capitalist body dedicated to removing protection from industry
and liberalizing markets gets together for its next round of talks,
10 years since the fall of communism and after a decade
of unprecedented economic growth. But though the mood of politicians is
upbeat, out in the streets hundreds of thousands of anti-capitalist protesters
have gathered to call an end to the iniquities of global capitalism.
The complaints are strikingly similar to those made
by Jesus Christ. Capitalism doesn't look after the producers
and capitalism downgrades the important spiritual
ends of life for the sake hamburgers, unsustainably cheap clothes
and garish distracting mass media. With their beards and guard figures
many of the protesters look a little like Renaissance's renditions of Jesus.
The police take a very heavy hand, fired tear gas into the crowds,
arrest 2000 and call in the National Guard. The protest remind the world
that besides the winners of capitalism there is an enormous
army of the disenfranchised and the angry who see more sense in Jesus, Dickens and
than in Adam Smith and Bill Clinton.
2015, Cupertino, California. Apple Computers
officially becomes the largest corporation in the world. It's a giant
But the very same challenges remain. It turns out that Apple are
indirectly responsible for the suffering and abusive of workers in the supply chain
by the Foxconn corporation and with the launch of the Apple watch,
a gadget that seems to have no particularly urgent purpose,
questions are once again raised about why we are exhausting ourselves and the
for ends that are so out of proportion with the costs they impose on
all of us. To generalize: Capitalism is amazingly productive
but it has two big flaws. Firstly, it systematically inclines to ignore the
sufferings of workers
unless regularly prodded not to. And the wealth of companies is often built up on
what are not the essential needs of human beings. Fortunes are made
on making unhealthy food or bad television programs.
The challenge for the future is how we might be able to make money humanely
by treating people and the earth well and also
make money through activities which address the more noble
end of human needs. Till then, the rage of Jesus in the temple
will periodically always go on.