Origins of the Word 'Capitalism'

Free Capitalist (13 January) HERE carries this post:

“What is the history of the term ‘Capitalism’?”

“The use of the term ‘Capitalism’ has a long history. Adam Smith, often referred to as the ‘father of capitalism’ was the first modern proponent of a comprehensive philosophy defending the entire package of basic principles related to individual liberty as an indispensable ingredient to a moral, prosperous, and free society. Smith, a Scottish moral philosopher published his Magnum Opus, “An Inquiry into the Nature and Causes of the Wealth of Nations” in 1776 about the same time the American Founders were declaring their independence from England.

The late eighteenth century is when the ‘philosophy of freedom’ took root for the first time in modern history. The American founders were heavily influenced both directly and indirectly generations of ancient philosophers and very powerfully by their proximate European intellectual predecessors such as Adam Smith, John Locke.

The core of their movement, the American Revolution, and the subsequent, rapid spread of freedom movements across the globe, was fueled by several basic principles be made popular by social, political and religious leaders who had come to a renewed or ‘enlightened’ view concerning the nature of individual man. These new views affected all spheres of human relations and were not restricted by politics, religious, or economic considerations alone.

Politically, the Founders referred to the ideas as ‘Republicanism.’ But, republics were not new on the world stage. What was new about the political achievement of the Founders was that for the first time in modern history it was advocated from a new, moral foundation-made possible by the post-enlightenment view that “all men” were “equal by nature” and that no man or group of men was “rightly entitled” to special moral privilege or consideration. Or, in other words, the longstanding tradition of cultural tyranny across the globe was challenged by a new view of individual man as the measure of all moral social interaction.

No man was required, according to this new view, to live primarily for another-as his slave, servant, serf or subject-being unjustly deprived of life, liberty or property by any other man or group of men claiming some supposed moral authority. This basic worldview was not restricted to use or meaning in the political discussions of the time but affected all elements of man’s relationships with other men and during the period of the American Revolution was often referred to simply as Americanism. The term, however, most consistently, effectively, and regularly used to define the entire body of thought related to this worldview, would later be coined as ‘capitalism.’

In modern society the term ‘Capitalism’ is used imprecisely and inaccurately. Many scholars suggest that the term ‘Capitalism’ and its related term ‘Capitalist,’ was first derived in the English vernacular from a translation of the pejorative term used by Karl Marx in the mid to late nineteenth century to describe the class of men he called the elite “bourgeois” society who owned and controlled “society’s capital resources.”

To students of the Founders, the philosophy of capitalism is the only moral system that guarantees to man his individual liberty, and therefore the only valid political, economic, and social standard for pursing prosperity and peace.”

Comment
I approached this article with a degree of optimism, unfortunately not justified by its content. It gives a distorted and in places inaccurate view of events, most particularly those associated with the origins of the word, capitalism and, to an extent, some characteristics of the foundation and first century of the American republic.

The word ‘Capitalism’ and its related term ‘Capitalist,’ were not “first derived in the English vernacular from a translation of the pejorative term used by Karl Marx” (though he certainly used them pejoratively in his writings).

‘Capitalism’ was a word and a phenomenon neither used by, nor known to, Adam Smith. Capitalism was a wholly late 19th-century experience. The Oxford English Dictionary (Vol II, p 863) locates its first usage in English in 1854 by William Makepeace Thackeray in his novel, The Newcomes.

Karl Marx published, in German, Das Kapital, in 1867 and subsequent translations introduced the word ‘capitalism’ to his readers some years later (Moscow's 'Marxist' editors during the Soviet era ‘interpolated’ the new word of capitalism into his works as if Marx himself had written it).

While Marx may have read Thackeray, it is unlikely that Thackeray read Marx in time to include the word, capitalism, thirteen years earlier in his novel.

Of the word ‘capitalist’, this was first used in English in 1792, by Arthur Young (Travels in France) and it was used by Turgot (in French) in his ‘Reflections on the Formation and the Distribution of Riches’ LXIII-IV, 1770.

If Adam Smith is ‘known’ as the ‘father of capitalism’, it is 20th-century accolade of which he knew nothing, nor, to be accurate, deserved. This is an example of projecting modern notions onto the past.

Technically “the American Founders were declaring their independence” from Britain, not England. Since the 1707 Act of Union between Scotland and ‘England and Wales’, the political entity of ‘England’ had ceased to exist and, as Scotland and England were already a single kingdom from the ascension of King James VI of Scotland to the English throne (he became King James I of the united kingdom) in 1604, which established the political entity of the ‘United Kingdom of Great Britain’.

I am loath to tread on the toes of sensitive patriots, but I think these sentences should be recast:

“What was new about the political achievement of the Founders was that for the first time in modern history it was advocated from a new, moral foundation-made possible by the post-enlightenment view that “all men” were “equal by nature” and that no man or group of men was “rightly entitled” to special moral privilege or consideration.”

and

“No man was required, according to this new view, to live primarily for another-as his slave, servant, serf or subject-being unjustly deprived of life, liberty or property by any other man or group of men claiming some supposed moral authority.”

If these statements are correct (I don’t think they are) there were some glaring deficiencies in their application in the new republic, which deficiencies lasted upt to the 'war between the states', and effectively operated in great measure up to the 1960s. I trust I do not need to elaborate…

Finally, Adam Smith did not write about ‘capitalism’ because it did not yet exist. The Wealth Of Nations is not an economics textbook.

It is a critique of the political economy of UK State power and its close relationships, through legislators and those who influenced them, with the new ‘order, of ‘merchants and manufacturers’, whose policies severely compromised the possibilities of the ‘commercial society’, which Smith wrote eloquently about.

Primarily this arose from their proclivity for state-sponsored monopolies, legal local monopolies in the Guilds, international monopolies from their Royal Charters (including in the British colonies of North America), in their chartered trading companies (of which the East India Company was the prime, and most disgraceful, example), their prejudiced policies arising from ‘jealousy of trade’, wars for trivial ends and domestic legislation, such as the Statute of Apprentices, the Settlement Acts, and one-sided laws against ‘combinations’.

If Adam Smith’s Wealth Of Nations was his magnum opus I am particularly impressed with his Moral Sentiments), it is one that is appreciated from its modern reputation and not from reading it in context.

And while I may sympathise broadly with the idea of a ‘free capitalism’, as opposed the state-capitalism and Big Government, I think the Free Capitalist Blog has some ways to go before it tops my daily reading list.