Wednesday, June 08, 2011

Origins of Commercial Society Leading to Capitalism

Eamonn Butler, director of the Adam Smith Institute (London) writes in its Blog HERE:

‘Capitalism from the bottom up’

'I stumbled across Christopher Dyer's book An Age of Transition? (OUP) only What it looks for is the origin of capitalism, if you like. Somehow, between the Middle Ages and the Industrial Revolution, Britain had already become a recognisably modern economy. People were freed from life on the land and were building up capital – ships, factories, plantations. Cities were growing, artisans were multiplying and flourishing – so much so that the old mediaeval guilds petitioned their monarchs for regulations to restrict these 'cowboy' new market entrants. Nothing new, is there?

Most historians, perhaps few of whom understand economics, tend to imagine that the growth of capitalism in Britain came from enlightened 'improver' landowners, turning their land from feudal estates into commercial farms. But Dyer disagrees. Sure, the old social structure of duties and responsibilities faded. Family ties were replacing feudal ones. Markets were springing up. Land was being enclosed and made private. But the big landowners, says Dyer, were far too few – and far too preoccupied with getting well-paid jobs and monopolies from government – to drive these changes. It was people well below them on the social scale who drove them, making the enclosures, converting poor land to pasture, and from there building up larger farmsteads that were far more efficient in production.

So it was the peasants who drove progress, not the toffs. Nothing much new there, either.

I have offered a couple of comments to Eamonn’s views and to the discussion that followed:

‘How right you are Eamonn. In fact, AdamSmith noted this phenomenon in Wealth Of Nations, 1776, (and his Lectures OnJurisprudence, 1762-3) ) as an aberration from ‘natural’ or ‘expected’ progressfrom agriculture to industry, and went on, typically to analyse it, bearing in mind the significance he placed on the lasting importance in Europe, where development eventually had gone furthest, of the fall of Rome in the 5th century, which destroyed the early burgeoning markets in town and country, and much of the growing city-agricultural living standards for a time. As these recovered in the 15th century they did so, after some centuries of European warlordism, in what eventually became a feudal economy with primogeniture, entails, and dynastic quarrels, in which land was owned by those who could hold it against all comers, the most powerful of them becoming or remaining kings.

The phenomenon of new, mainly skilled trades (including those of literacy, painting, weaving, and fine arts, at one (neglected) level and on the physical level too, in which artisans of all kinds of skilled labour, organisations and management, were of great importance, alongside the growing commerce of towns of varying sizes and locations, is often neglected by historians too.

The classic image of (always ‘downtrodden’) labour in town and country is less than accurate; skilled labourers (supervisors and managers) had a significant role as higher paid than the basic day labourers, right through these ages and, particularly, were significant through and beyond the industrial revolution. That ‘middling class’ raised their per capita incomes beyond the mere ‘necessaries’ of life, to mimicking the levels in ‘conveniences’ of those they served. That Dyer has painted in some of this picture is encouraging. The growth of capitalism was not so dire, compared to life in the countryside, for everybody, except the very rich, as the ‘left’ believe.’

And my response to a discussant:

‘In so far as our question may be directed at me, I suggest you contemplate that commercial society - later capitalism - needs both capitalists and consumers (aka: 'workers') and labour is not homogeneous in the form of the 'downtrodden' labourers, all starving on subsistence wages. The nature of commercial societies, from the start, required strata rising among them. A ship travelling to France, or from Newcastle to London, had its captain and petty officers, apprentices, and leading hands, for example. Similar across new industries (overseers, foremen, skilled and semi-skilled workers on higher wage rates. It was no accident that early 19th century educational institutions (the Edinburgh School of Arts, forerunner of Heriot-Watt University) were set up for young literate and arithmetically numerate men to teach them maths, chemistry, physics, who were moving up the employment ladders of the slowly industrialising economy. Marx was to call them the 'aristocracy of labour' but underestimated their significance.’

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