The Capitalist Manifesto: How many millions of people escaped poverty, lived longer and got TV
Capitalism gets bad press, but it has changed the world for the better more than all the wars, revolutions and revolts in history
Capitalism has created more prosperity and progress for more people than any system in human history. On the 30th anniversary of the official end of the Soviet Union, join the National Post and Financial Post in a series saluting the unfashionable yet awesome power of the free-market system. Here, Michael Higgins traces capitalism’s long arc.
When the Black Death ravaged the globe in the mid-14th century a “third of the world died,” said Jean Froissart, a contemporary historian.
But the pestilence ushered in a new age.
In Europe, before the Black Death, there was feudalism, with serfs tied to the land and beholden to a lord who held political, economic and military power. Peasants were slaves in all but name.
Afterward, with labour in short supply and an economy in desperate need of revitalization, workers found themselves in great demand. Some began to choose their own masters and demanded wages up to three times pre-plague rates.
The fetters of feudalism had been broken.
“In an age when social conditions were regarded as fixed, such action was revolutionary,” wrote Barbara Tuchman in A Distant Mirror , a history of the 14th century.
It was the beginning of the end for feudalism, as capitalism dimly flickered some new light after the Dark Ages.
Capitalism gets bad press, whether it’s Karl Marx in the 19th century — it would result in “misery, oppression, slavery, degradation (and) exploitation,” Marx wrote — or neo-Marxist Naomi Klein’s The Shock Doctrine: The Rise of Disaster Capitalism two centuries later. For many people, capitalism is a caricature with parades of fat cats, robber barons and 10-year-olds down a coal mine.
But ignore the word capitalism and call it something less tendentious, say, free enterprise, or free market economics, or economic freedom, and those phrases reflect a different reality.
Economist and historian Deirdre McCloskey calls it “innovism” and credits it with the “Great Enrichment” that has happened during the last 200 years.
Whatever you call it, it’s a philosophy that has lifted hundreds of millions out of poverty, reshaped the world over and over with ground-breaking technologies, and created a worldwide middle class who enjoy a lifestyle unmatched in all of history, even more pleasant than that of history’s kings.
Yes, there have been costs. Many iterations of the 19th century British Industrial Revolution have been accompanied by some of William Blake’s “dark Satanic mills.”
However, the alternatives to free markets have produced the Soviet Gulags — 66 million dead by Aleksandr Solzhenitsyn’s reckoning — the extermination camps of Hitler, the fascists of Mussolini, the killing fields of the Khmer Rouge, and Mao’s Great Leap Forward — 80 million people dead in four years by some estimates.
And yet capitalism is constantly under siege. What is its future in the 21st century?
What is without question is that the arc of capitalism is long — very long. Not just 200 years long, when most people, if they were asked, believe it exploded on the scene with the Industrial Revolution in Britain.
It has roots in the bazaars, squares and piazzas of the ancient world. The concept accompanied the traders who journeyed along the Silk Road. It has inspired the entrepreneurs who brought us air conditioners and cornflakes. And in the past few decades it has revolutionized the lives of hundreds of millions in once widely impoverished places like China and India.
Capitalism has changed the world more than all the wars, revolutions and revolts in history.
And a short history of that long arc might look something like this:
The Early Years
Capitalism, at least the spirit of it, is as old as the marketplace. It resided in the merchants and traders who took risks, gambled on turning a profit and found new ways to do it.
The Greek historian Herodotus in the 5th century B.C. wrote about a camel caravan route in north Africa.
When King Darius of Persia built a palace at Susa 4,000 years ago it contained ebony and silver from Egypt, cedar from Lebanon, ivory from India and gold from Bactria, a town north of the Hindu Kush mountain range, thus testifying to the extensive trading already in existence.
In the 2nd century B.C., the Han dynasty began extending west, and the Silk Road emerged. Sima Qian, son of the imperial court’s Grand Historian, wrote that kingdoms were weak in the west but “clever at commerce,” according to The Silk Roads by Peter Frankopan.
About the same time, Rome was morphing from a small town into an empire pushing east in search of spices and silk, a consumer good that was deplored by Pliny the Elder, who was outraged at its high cost and for allowing women to “shimmer” in public, according to Frankopan.
Some of the chapters in Frankopan’s book perfectly illustrate the importance of trade between east and west in the history of the world: The Road of Furs, The Road of Gold, The Road of Silver, The Wheat Road, The Slave Road.
As Frankopan notes, the most repugnant of businesses — human trafficking — was also highly lucrative, although slavery is very much at odds with a truly free labour market. At the height of the Roman Empire, it has been estimated that it needed 250,000 to 400,000 new slaves each year. In the 9th and 10th century, slavery was an essential part of the Viking economy.
In the 17th century, the Portuguese would open up the west coast of Africa, leading to a transatlantic slave trade that saw upward of 13 million people trafficked.
For all its force for good, there are those who see capitalism as having that blood on its hands.
But it also has its unlikely champions.
The great and ferocious Genghis Khan, the Mongol leader who conquered most of the known world in the 13th century, was a great fan of merchants. He encouraged them to set up businesses but passed a law that they would be executed if they went bankrupt three times.
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