Downing Publishes in “Bloomsbury Handbook of Literary and Cultural Criticism”

Posted on 12/3/2018 8:56:39 AM

In the English Department, David Downing's contribution, "Capitalism," (pp.405-6) has just appeared in the Bloomsbury Handbook of Literary and Cultural Criticism (2018).

Excerpt

Capitalism

Capitalism refers to the economic system based on the privately owned production of goods and services sold for profit in competitive markets (rather than hereditary or state- ruled economies). The word itself came into use during the mid-nineteenth century when critics of the capitalist political economy such as Friedrich Engels and Karl Marx described the “means of production” whereby owners of capital could exploit workers to accumulate more capital for the ruling classes (although “capitalism” only appears two times in Volume 1 of Marx’s Das Kapital). But the term “capitalists” was used earlier in the nineteenth century by some of the classical economists such as David Ricardo, and Marx used it more than 2,600 times in the three volumes of Kapital. Interestingly, in his founding book of classical economics, The Wealth of Nations (1776), Adam Smith never once used the words “capitalism” or “capitalist,” although the word “capital” (as a reference to accumulated stock, reserves, and wealth) appears frequently. Indeed, “capital” (root word “capitale”) goes back at least to the twelfth century, even though its use is rare until the late eighteenth century.

Capitalism has had many variations, each emphasizing a different historical or structural feature: mercantile capitalism, industrial capitalism, free market capitalism, monopoly capitalism, state-managed capital- ism, welfare capitalism, neoliberal capitalism, late capitalism, transnational capitalism, financial capitalism, casino capitalism, etc. The common features of each version include the use of wage labor to produce surplus profits for the owners of capital who control all business decision-making; the competitive market pricing of goods and services; individual ownership of private property; and the further accumulation of capital through investment. All versions of capitalism stand in competitive contrast with any public or collective means for organizing production such as socialism or communism.

Despite all their differences, most historians accept that, following the collapse of feudalism, there have been roughly four main phases of capitalism over the last five hundred years. Feudalism consisted of the hereditary ownership of land used for agrarian modes of producing food and other necessities in self-contained manors that had little use for money or markets. The first transitional phase (1500–1800) of capital- ism is often called “mercantilism” because a rising class of merchants gained control of economic exchanges in the expanded, global market system opened up for trade by European colonial conquests. By the late eighteenth century, the Industrial Age began as a new class of private capitalists gained control of mechanized factories. This second phase is often referred to as monopoly capitalism because privately owned corporations gained exclusive control of the production and exchange of goods. It corresponds to the rise of the British colonial empire, but it reached a breaking point following the First World War and the Great Depression. The emergence of state-managed capitalism characteristic of the North Atlantic welfare states began in the 1930s, but especially after the Second World War when democratic governments funded some human resources (social security, etc.) and international financial institutions such as the World Bank and the International Monetary Fund orchestrated global economic exchanges. This system produced the most expansive world economic growth ever recorded, but the expansion came to an end during the 1970s following the 1973 Arab oil embargo and the gradual undoing of welfare-state regulations; saturated markets and diminishing resources constrained endless accumulation. The latest, “neoliberal” version of capitalism emphasizes privatization of all resources, deregulated markets (but regulations against collective bargaining and worker unionization), the shrinking of the public sphere by various “austerity” policies calling for diminished governmental funding of health- care, education, and welfare.

In the twenty-first century, the “crisis of capitalism” has been characterized by intense conflict between the critics and sup- porters of capitalism. On the one hand, the critics have railed against escalating inequality and devastating forms of climate change that go hand in hand with the emphasis on private profit over public good. In contrast, the powerful “neoliberal” supporters stress the improved goods that depend on competitive markets, increased prosperity through economic growth, and the efficiency and flexibility of capitalism to respond dynamically to changing global economic and political conditions.

—David B. Downing, Indiana University of Pennsylvania (United States)

Department of English