‘A Very Short Introduction To . . . Capitalism’ (2007)

Book Review from the March 2007 issue of the Socialist Standard

Capitalism. A Very Short Introduction, by James Fulcher. Oxford University Press. £6.99

Capitalism is the system of production in which capital prevails. Capital, as Fulcher says, is “essentially the investment of money in the expectation of making a profit”; “money that is invested in order to make more money”. As such it existed even in Ancient Rome and the Middle Ages, but capitalism, as a system, only came into being when capital came to be invested in the production of goods rather than in trading or money-lending. This happened increasingly from the 16th century onwards, accelerating in the 19th century and coming to dominate the world before its end.

All this is well explained in the opening two chapters. Then there’s a rather sudden leap from a discussion as to why capitalism first developed in Europe to modern, 20th century capitalism, which Fulcher calls “managed capitalism”. The state has always intervened in capitalism (that a so called free market capitalism with no state intervention once existed is a myth), but in the 20th century the claim was that this was being done in the interests of all the state’s subjects rather than just the capitalist class, as patently evident before.

Capitalism is, and was from the start, a global system but it has different institutional forms in different countries due to their specific historical and political circumstances. So Fulcher is able to answer his question “Is capitalism everywhere the same?” with a no, different forms of capitalism exist. However, he does not go so far as to include the USSR in its time as having been capitalist. He sees it rather as some non-capitalist alternative, even though money there was invested in the expectation of profit – by the state; hence our view of it as “state capitalism”.

In discussing crises in the final chapter Fulcher points out that “the history of capitalism is . . . littered with crises. Periods of stable economic growth are the exception not the norm. The quarter century of relatively stable economic growth after 1945 may have shaped a generation’s  expectations about capitalist normality but it was not historically typical of capitalism”. But, he says, “particular crises . . .  come to an end” and that “contrary to what some of his followers have thought” Marx did not believe “that capitalism would end in some huge economic collapse. It would come to an end only when overthrown by the workers it exploited”.

Not that he thinks Marx was being realistic here since his book ends on a distinctly pessimistic note: “The search for an alternative to capitalism is fruitless in a world where capitalism has become utterly dominant, and no final crisis is in sight or, short of some ecological catastrophe, even really conceivable . . . Those who wish to reform the world should focus on the potential for change within capitalism”. Naturally, we disagree. That’s been tried  before, and it doesn’t work.

Adam Buick