6. Crisis? What crisis?

Is capitalism in a state of crisis? Crises are in fact a normal part of the functioning of a capitalist society. ‘Crisis? What Crisis?’ looks at crises in capitalism from ‘tulipomania’ in 17th-century Amsterdam through to the 2007–2008 financial crisis and ‘great recession’, the most serious crisis since the Great Depression of the 1930s. It considers the future of capitalism and argues that it may be shaped not by the institutions and structures of the static or declining countries of the West, but the countries of the East. It discusses whether there are alternatives to capitalism and argues that alternatives exist within capitalism rather than outside it.

3. How did we get here?

Capitalism has transformed considerably since it started. We are now in a very distinct stage of its development. ‘How did we get here?’ examines the development of industrial capitalism and divides it into three stages: anarchic capitalism, managed capitalism, and remarketized capitalism. The deficiencies and conflicts of anarchic capitalism led to the development of a managed capitalism, which showed that it is possible to protect people from the worst consequences of free market forces with state intervention and regulation. Managed capitalism generated its own problems, however, and a second transformation to remarketized capitalism has provided greater choice and more freedom for the individual, but also a less secure life, intensified work pressures, and greater inequality.

2. Where did capitalism come from?

How did capitalism originate? ‘Where did capitalism come from?’ argues that although capitalist production made its first fully developed appearance in Britain, key capitalist institutions actually emerged elsewhere in Europe. Indeed, capital, labour, and entrepreneurs moved within a European network. Why did capitalism emerge first in Europe? Independent cities, a multi-state structure, and the Protestant ethic provided a favourable socio-economic environment within which capitalism could develop. The other side of this question is to ask why capitalism did not originate elsewhere. In other advanced civilizations cohesive elites were able to use bureaucratic rather than economic means of scooping off the surplus from producers but in Europe this was not possible after the collapse of the Roman empire.

5. Has capitalism gone global?

What is ‘global capitalism?’ Economies no longer operate in isolation, producing goods at home for export abroad. Companies now run manufacturing operations in many different countries spread across the world. ‘Has capitalism gone global?’ explores four myths of global capitalism. Firstly, global capitalism is not new. The early capitalism of the 15th and 16th centuries was global in nature as it involved world-wide trading activities. Secondly, how global is global capitalism? In reality, most capital moves between a small group of rich countries. Thirdly, global organization of capital has not replaced its national organization. Finally, global capitalism has not integrated the world; inequalities increasingly divide it.

4. Is capitalism everywhere the same?

‘Is capitalism everywhere the same?’ considers the diversity and/or uniformity of capitalist societies today by looking at the development and transformation of three systems of managed capitalism in Sweden, the United States, and Japan. In all three, capitalist industrialization generated class organization and conflict, and attempts by governments to manage its problems. Each created its own version of welfare capitalism. Each has recently tried to solve the problems generated by managed capitalism by allowing market forces greater freedom. Increased international competition and globalization have promoted remarketization in all three countries, but each country has remarketized at its own speed and in its own way.

1. What is capitalism?

‘What is capitalism?’ examines the different forms that capitalism has taken, from the merchant capitalism of the 17th-century, through capitalist production in the 19th, to the financial capitalism of the present day. As the investment of money to make more money, capitalism has long existed but it was when production was financed in this way that a transformative capitalism came into being. Capitalist production depends on the exploitation of wage labour, which also crucially fuels the consumption of the goods and services produced by capitalist enterprises. Production and consumption are linked by the markets that come to mediate all economic activities in a capitalist society.