Capitalism Defined, Part V: Polanyi and the Fictions of Free-Market Societies

While Max Weber founded what one might call the sociological study of capitalism, the Hungarian economist Karl Polanyi was among the first scholars to identify capitalism as a fit subject for anthropological study. Following the lead of Jacob Malinowski (whose study of Trobriand Islanders in the 1920s became a classic) and sociologist Ferdinand Tonnies (who developed the gemeinschaft/gesellschaft dichotomy), Polanyi argued that Adam Smith’s economic man, who pursued only profits and personal comforts, was a myth. The primary function of most human economies, Polanyi observed, was to improve participants’ social status and augment their “social assets,” not their store of worldly goods. In pre-state societies like the Trobriand Islanders’, people’s primary economic goals were reciprocity – the symmetrical exchange of goods as gifts, usually in a social context attended by ritual (7-9) – and redistribution, whereby chiefs accumulated goods for the purpose of giving them to followers. The former ethic promoted social cohesion, while the latter produced political hierarchies by tying clients to their chiefly patrons. Neither ethic, though, was typical of capitalist societies; indeed, one later ethnohistorian, Daniel Richter, called redistribution a “kind of upside-down capitalism” because it involved negative accumulation (Ordeal of the Longhouse [Chapel Hill, 1992], p. 22).

More sophisticated state societies, like ancient Greece, medieval Europe, or eighteenth-century Dahomey, had more complicated economies, but they still weren’t capitalistic. Most produced for household or local consumption, and the trade in which they engaged – which, granted, might be very valuable (like the spice and slave trades) – usually consisted of luxury goods bought and sold by social outsiders or state employees. These societies did employ various kinds of money, like cowry shells or gold coins, in trade, but Polanyi argued that they used money as a “semantic system” to represent and discharge particular social obligations, like bride price or fines (190-194). Production, consumption, and trade thus remained thoroughly “embedded” (82) in political or social relationships, and philosophers from these societies, like Aristotle, defined the "good life" as a communal one, where people took pleasure not in material accumulation and consumption but in festivals, theater, political debate, and even battle.

The primary innovation of capitalism, Polanyi argued, was to yank economic inputs out of these social contexts by commodifying them (30-32). The merchants, industrialists, and liberal economists of the 18th and 19th century developed and codified a new set of economic "fiction[s]" (32), like wage labor and free trade, which subordinated previous social relationships to the new imperatives of commodity exchange. They then used the power of the state, first in Britain, later in other countries, to remove all impediments to the commodification and exchange of inputs. They passed enclosure laws, built poorhouses, removed tariffs, and instituted a global gold standard. They thereby created a so-called "self-regulating market," which capitalists and liberal economists believed was natural but was in fact highly artificial and socially destructive. Capitalism, Polanyi argued, created a global wave of ghastliness, knocking down laws, customs, and institutions that might have mitigated its ill effects. Nineteenth-century India saw the destruction of its textile industry and the spread of famine due to rising grain prices; Native North Americans lost their land and went into a steep demographic and cultural decline; and twentieth-century African migrant laborers escaped starvation only by losing their homes, families, and culture.

One might argue (as I would) that Polanyi's conclusions are a bit shrill, since he observed in his earlier work that the British developed mechanisms for defending their society against capitalism's evils: trade unions, a protectionist movement, and the creation of a welfare state after 1906. Presumably, other societies injured by capitalism's "self-regulating market" were able to develop their own countermeasures, like the legal defense associations that Plains Indians established to recover some of their lost lands. One might also argue that Polanyi was merely adding another layer of sophistication to Marx's early analysis of the cultural bankruptcy of capitalism. This is in some ways, however, beside the point. Polanyi's real strength lies in his analysis of pre-capitalist economies and his careful differentiation of societies with some of the features of capitalism (like trade and currency) from those that are genuinely capitalistic. In defining a thing, it is helpful to understand what that thing is not; in the case of capitalism, it is very helpful to know that the great majority of human societies have not organized their economies according to its rules.

Quotes from George Dalton, ed., Primitive, Archaic, and Modern Economies: Essays of Karl Polanyi (Boston, 1968). See also Karl Polanyi, The Great Transformation (Boston, 1944); idem, "Traders and Trade," in Jeremy Sabloff and C.C. Lamberg-Karlovsky, eds., Ancient Civilization and Trade (Albuquerque, 1975), 133-154.

Quote of the Week

"In France, the bourgeoisie, after the great Revolution, resorted to every kind of desperate expedient for avoiding responsibility - empire, revived monarchy, sham monarchy, sham empire - until the failure of all left them with no escape from responsibility in the Third Republic, and even that perished from lack of a true governing class." A.J.P. Taylor, in The Habsburg Monarchy, 1809-1918 (new edition, London, 1948), p. 138. I don't think Taylor is entirely fair to the Third Republic, but I suppose it was hard for someone who remembered that republic's last few years to credit it with ever having produced responsible legislators or capable leaders.

[Image at right: the coat-of-arms of the aforementioned "sham monarch," Louis-Philippe (1830-48).]

The Arab 1848

Except for a brief period following last month's tsunami and nuclear accident in Japan, the attention of the world media has been focused this year on the revolutions underway in the Arab world. Several online commentators, most notably Tariq Ali and Andrew Sullivan, have tried to make sense of this multinational wave of uprisings by comparing it to the European revolutions of 1848, which had similar goals, spread with equal speed through Europe's cities a century and a half ago, and came – unfortunately for the insurgents – to a bad end. As I think this is actually a pretty fair historical comparison, I present herewith a short summary of the actual 1848 uprisings, which has to date been missing from these commentators' remarks.

Of the 1848 revolutions, one may say that they were caused by poor harvests, unemployment, the dissatisfaction of the educated middle class with repressive monarchical governments, and the related aspiration of romantic nationalists to create unified linguistic nation-states. The first rebellion of the year broke out in January in the Kingdom of Sicily, but the real flashpoint for the continental insurrection was Europe's cultural capital, Paris, where in February urban mobs expelled King Louis-Philippe and bourgeois legislators proclaimed the Second Republic. News of the French revolution spread quickly, thanks to cheap newspapers and widespread literacy. In Italy, insurgents forced King Charles Albert of Piedmont to grant his subjects a constitution and drove Austrian troops out of Milan; later that year an army organized by Italy's princes besieged Austria's forts in northern Italy. In Germany, liberal reformers convened the Frankfurt Assembly to promote a unified German republic, insurgents expelled the Grand Duke of Baden, crowds seized control of Berlin, and Wilhelm IV of Prussia felt obliged to issue a constitution creating a Prussian Assembly. In Austria, rebels seized control of Vienna and forced Metternich, symbol of the monarchical restoration of 1815, to flee for his life. The Austrian rebellion ultimately drove King Ferdinand, one of the more comically imbecilic of the Hapsburgs (famous for his demand "I am the emperor and I want dumplings!"), to abdicate in favor of his nephew Franz Joseph. Nationalist uprisings also broke out in Hungary and Romania.

In the shorter term, these revolutions were failures. The new French republic violently suppressed an uprising by Paris workers in June, and in December conservatives and rural voters seeking order elected the authoritarian Louis Napoleon as president. He overthrew the republic three years later. The Frankfurt Assembly never obtained any real power and degenerated quickly into a talking-shop. The Austrian monarchy regained control of Vienna and northern Italy, and recaptured Hungary in 1849 with Russian aid. The new Austrian emperor, Franz Joseph, held his throne for 67 years. The Sicilian and Romanian revolutions were suppressed. Europe's bourgeoisie discovered they hated proletarian radicalism more than authoritarian government, and became more conservative. This is all bad news for the Arab world, if the revolutions that began there this January follow the 1848 model.

There was, however, brighter historical news in the long term. Few of Europe's monarchs could ignore the crowds that besieged the continent's principal cities and drove their royal kinsmen from their thrones, and many decided that the best way to prevent future revolution was to grant at limited concessions to the more moderate protestors – usually a constitution and an elected parliament. These concessions prevented uprisings from occurring in Denmark and the Netherlands, and pacified insurgents in Prussia and Piedmont. Several Arab monarchs, including the kings of Morocco and Jordan, appear to be following this example (consciously or not) in 2011. None of the rest of Europe's monarchical governments felt they could ever again afford to ignore the popular will in their countries; gone forever were the days when, as in 1814-15, the princes of Europe could trade people like commodities at the conference table. Louis Napoleon, after his coup d'etat, felt the need to legitimize his rule with popular plebiscites, while Austria's emperor eventually (after losing northern Italy in the wars of the Risorgimento) granted limited autonomy to Hungary. Admittedly, there is another, darker solution that some governments devised to the problem of popular restiveness post-1848: uniting people through warfare, either foreign adventures (as with Louis Napoleon's new French Empire) or wars of national unity (as with Prussia in Germany and Piedmont in Italy). Let us hope the successors to the Arab 1848 resist the temptation to follow this particular example.

(My principal sources for the above are Michael Rapport's 1848: Year of Revolution [New York, 2009] and the first chapter of Eric Hobsbawm's Age of Capital [New York, 1975]; for a short introduction to the subject, see this article by Kurt Anderson.)

Where They Are Now

To mark the 150th anniversary of the start of the American Civil War, USA Today ran a cover story this weekend on the descendants of some of the principal leaders of that conflict. Who would have guessed that Robert E. Lee the Fifth would be a football coach, J.E.B. Stuart the Fifth an orthopedic surgeon, and Stonewall Jackson's great-great-grandson a song-writer? Someone with more imagination than your humble narrator, certainly.

I also wouldn't have guessed that there were still one hundred living children of Civil War veterans, but I shouldn't be surprised; some veterans of that war married late and had children in their 70s. These included my own great-grandfather, Willes Bruce (no relation to Bruce Willis), who according to my sister Corinna's research was 72 when our grandfather Jack was born. Willes was from Tennessee and was supposedly an officer in the Confederate army. He was born in 1829, when Andrew Jackson was president and work had just started on the United States' first railroad; his son died in 1979, 150 years and 32 presidents later, and nearly ten years after the first Moon landing.

Capitalism Defined, Part IV: You Say Ascetic, I Say Sociopath

Marx never doubted that capitalism was a social system, but he also argued that the material imperatives of capitalist societies were what really shaped their cultures and social institutions. Governments, laws, customs, and beliefs were all superstructures that the bourgeoisie built atop the foundation of a capitalist economy. Twenty years after Marx's death, however, another German social scientist, Max Weber, reversed this equation. Defining capitalists as seekers after "forever renewed profit by means of continuous, rational, capitalistic enterprise" (p. 18), and agreeing with Marx that capitalism could not exist without free labor (because one could not fully monetize and rationalize unfree labor), Weber diverged from his predecessor in asking whence these driven capitalists and their willing workers came, and in finding the answer not in their material circumstances but their cultural values. Capitalism, Weber argued, wasn't the product of commerce, mechanization, or corporate organization. It originated instead in a "social ethic" (54), the belief that one's earthly labor constituted a spiritual calling and that one had a religious duty to perform it well.

The capitalist, in Weber's view (expressed in his Protestant Ethic and the Spirit of Capitalism [Prentice-Hall, 1904/1977), revolutionized the world economy not with his techniques but with this ethos, which drove him to hard labor, "rigor[ous]...supervision" of his employees, and unrelenting maximization of output and profits (67-68). Weber tracked this ethic to the "Calvinistic diaspora" (43), particularly early modern Holland, England, and New England, the latter of which produced one of the world's first bourgeois ethicists, Benjamin Franklin, before it produced a capitalist economy. Calvinists, Weber observed, believed that mankind was depraved and helpless in God's eyes, and this belief endowed them with "a feeling of unprecedented inner loneliness" (104), unknown to Catholics and Lutherans. Unable to assuage this loneliness and anxiety through prayer or good works - neither of which Calvinists believed could help them achieve divine grace - Calvinists threw themselves instead into "intense worldly activity" (112). By the seventeenth century, Calvinist/Puritan theologians like Richard Baxter were arguing that constant labor was the Christian's primary duty, and that wasting time and losing opportunities to make profits were actually sinful, the former because it made one lose opportunities to advance God's work, the latter because it wasted the resources God wished to put into one's stewardship (157-58, 162-63).

The Calvinist's quest for self-perfection through work and material acquisition swiftly turned into a quest for continual and systematic increases in economic output, and the economies of nations with a large Calvinist population soon turned into productivity engines, emphasizing continual growth in profits and output at the expense of wages, consumption, or any of the ordinary pleasures of living. Indeed, since the Calvinist/Puritan's greatest earthly duty was to his work and "his possessions, to which he subordinate[d] himself as an obedient steward" (170), his work and wealth became more important, and one might say more holy, than any of the people who produced that wealth. The Protestant capitalist wasn't afraid of amassing possessions and growing rich; so long as he re-invested rather than consumed his wealth it would not block his entry into heaven. Nor was he opposed to inequalities of wealth, since these were ordained by God. Nor did he feel any obligation to pay his employees a decent wage, since if they were fellow Calvinists they would feel their work was its own reward, and if they weren't then they were sinners who would only work if goaded to it by the threat of starvation.

To me, and I suspect to some of Weber's other readers, these seem like the personality traits of a borderline sociopath: ridden by anxiety, unable to feel contentment, and uninterested in the fate of others. Weber had no wish to condemn early capitalists for these traits, but his plumbing of the capitalist psyche revealed a type not terribly different from the bourgeois "eunuchs" found in Marx's early essays. There was, however, one feature of Protestant capitalism that could meliorate its more pathological features: the concept of stewardship. The religious capitalist who believed that he held his property and profits in trust for the Almighty was theoretically less likely to consider them his personal reward for his efforts and more likely to view them as communal assets that he should spend for a greater good - reinvesting them in the economy or spending them on charitable and educational enterprises. This was the attitude of Andrew Carnegie, who while treating his workers like dogs spent millions of dollars on ways to "help the aspiring to rise" libraries, museums, parks, and educational endowments. The robber baron who, after years of cutting throats and sweating his employees, finally curled up on his accumulated treasures like Smaug the Dragon, had no place in this moral scheme, though one suspects Ayn Rand and her followers would regard him as a laudable human being, Carnegie as a moralizing sap, and Weber as a bore.

Pacific Interlude

Two quick historical notes from the Pacific coast of North America:

First, an article in Science (summarized in the March 8, 2011 issue of the New York Times) reports on archaeological findings at three 12,000-year-old sites on the Channel Islands of California. The sites contained numerous "delicate" projectile points, used for a variety of marine-oriented subsistence activities: catching fish and shellfish and hunting seals and waterfowl. The most startling feature of the sites was their age: they were contemporaneous with the Clovis culture, and provide further evidence that some of the earliest human settlers of the Americas were mariners who migrated into the hemisphere via the Pacific Coast.

Second, via Newshoggers.com, an interesting observation about historical earthquakes in the Pacific. I found it neat that one can so precisely date a major earthquake off the Oregon coast in the era before European contact, based on the simple combination of radiocarbon dating of destroyed trees and plant life, and the known impact date of a tsunami that crossed the Pacific and hit Japan the following day (27 January 1700). I must confess I also didn't know how recently Mount Hood had erupted: there was apparently a major eruption in 1805, right before Lewis and Clark arrived in the Columbia Valley.

Capitalism Defined, Part III: Tales of Rage and (False) Hope

A lifetime separated Smith's Wealth of Nations from Karl Marx's earliest major writings, the Economic and Philosophical Manuscripts of 1844. The two authors' views were also a world apart. Smith wrote in defense of an economic order that was still in its infancy, and a class still struggling for dominance against landed nobles and monopolists. Marx wrote after the new capitalist order had spread across half of Europe, and after its immiserating effects were becoming clear, at least in the new industrial cities of Britain, France, and Germany. Thus, where Smith was merely critical of merchants and manufacturers, Marx wrote of them with barely suppressed rage. His anger abated over time, as he and his colleague, Friedrich Engels, began to identify a revolutionary alternative to bourgeois rule and developed the belief that this alternative would inevitably triumph.

For Marx, as for Smith, capital was definable in terms of things - provisions, raw materials, tools, and machines - that one could use to produce new goods. Unlike Smith, Marx argued that there was a deeper and more important definition of capital, as "accumulated labor," and in particular accumulated wage labor (Economic and Philosophical Manuscripts, 98). Capital could not exist without wage labor because capitalism was essentially a social relationship, in which the bourgeoisie used capital and commerce to commodify people and goods and convert them into fungible "exchange values." Over time, capital could only reproduce itself by radically restructuring prior social relationships, eliminating independent craftsmen and petty-bourgeois shopkeepers and turning workers into a vast, de-skilled industrial army - the proletariat. (Wage Labor and Capital, 207-08, 210-11)

Adam Smith had suggested in Wealth of Nations that employers drove down wages whenever they could, but he also insisted that mechanization, the division of labor, and capital accumulation would ultimately lead to greater employment and rising prosperity. Marx strenuously disagreed. The division of labor, he argued, destroyed the value of craftsmen's skills and created a market for unskilled workers, who were easier to hire and fire. Meanwhile, the greater productivity offered by machinery allowed capitalists to lay off workers when competition and falling profits obliged them to do so. Capital accumulation and industrialization thus created "powerful industrial armies" whose generals, paradoxically, won their battles by cashiering their own men. These new armies could, however, ultimately rebel against their generals, once they discovered their common interest: eliminating the state system and the capitalist cash nexus that kept them in bondage. In their most famous pamphlet, The Communist Manifesto, Marx and Engels predicted that this rebellion would inevitably occur, after the proletariat discovered its potential strength and that they had "nothing to lose but their chains."

Much popular criticism of Marx today focuses on the failure of the communist states he inspired to deliver a classless, a more humane, or even a better way of life to their people. Instead, their command economies and elimination of "bourgeois" civil liberties gave their leaders power that (to paraphrase George Orwell) the most despotic emperors could scarcely imagine. Marx was more successful as an analyst of capitalism. With the benefit of decades of hindsight, Marx was able to observe that industrial capitalism had a historical momentum that its creators could not easily control, and which led capitalist societies in directions they didn't want to go: toward depressions, mass unemployment, and organized labor unrest. He believed that these crises would inevitably destroy capitalism; the bourgeoisie could delay them by opening new foreign markets and discovering new, cheap sources of raw materials overseas, but they could not ultimately prevent an immiserated, trans-national proletariat from seizing its destiny.

We might in closing note that capitalists who had read Marx could and did find ways to prevent this final crisis from occurring. These included the creation of social insurance programs (by Wilhelmine Germany, British Liberals, and Progressives in the U.S.), the use of Keynesian government spending to counteract business cycles, and the taming of Labor by incorporating large labor unions into national economic planning. These mechanisms, coupled with a fair amount of old-fashioned political repression, kept Marxian communism out of most of the world's industrial states in the 20th century. They are techniques that, since 1991, American and European capitalists have been trying hard to unlearn. More the fools.

[All citations above are to The Marx-Engels Reader, ed. Robert Tucker (New York, 1978), second edition.]

Capitalism Defined, Part II: In the Beginning Was Adam

Inevitably, any study of capitalism must pay homage to Adam Smith, the reclusive Scottish academic who founded the modern study of economics. Smith was a moral philosopher before he became an economist, and one can divide his writings on early capitalist societies, published in 1776 as The Wealth of Nations, into descriptive observations and normative judgments. This has been true of much economic writing ever since.

Smith was somewhat vague about the definition of capital, because he was reluctant to identify it with any particular substance (such as gold or silver). Rather, he identified capital by its purpose: either to buy goods (food, raw materials, textiles) for resale, or to improve land or purchase machinery and "instruments of trade" (Book II, Chapter 1). The former he identified as "circulating" and the latter as "fixed" capital. Circulating capital mainly generated profits for merchants, fixed capital for masters and landlords.

Smith made it clear (or as clear as he could in a diffuse, rambling, 1000-page brick of a book) that he viewed the owners of capital as the wellsprings of wealth and productivity. They increased the productivity of land through improvements like fertilizer and better breeds of livestock; they increased the output of manufacturing establishments with machinery and the division of labor; and they provided an incentive for both forms of improvement by fostering commerce. The limit on a country's industry, Smith asserted, is "what the capital of the society can employ" (Book IV, Chapter 2). Small wonder he has so long enjoyed a good reputation with entrepreneurs, rentiers, and hack writers for the Cato Institute.

I digress. It's also important to note that Wealth of Nations wasn't a billet-doux to the capitalist class. Smith had normative judgments to pass against them, as well as their antagonists. True, in Books I and V Smith famously argued for limited government intervention in the economy. Governments should, he said, lift existing controls on the circulation of labor and capital, and stop chartering monopolistic corporations that restricted competition. However, he also noted that merchants and masters were themselves frequently responsible for stifling economic productivity and general welfare. Merchants artificially raised prices by keeping smaller market towns ignorant of the existence of competitors, and by withholding goods from the market. Masters, meanwhile, were in "tacit but constant and uniform combination" (Book I, Chapter 8) to hold down wages and thereby maximize profits. The former tactics injured consumers, the latter workers, whom Smith insisted were entitled to fair compensation. Low wages injured productivity, since ill-fed workers had less energy, and inhibited family formation and demographic growth, which Smith regarded as social goods.

Unfortunately, Smith observed, wages and profits tended to move in opposite directions, except in "new colonies" where resources were ample and labor scarce. And since people were primarily motivated, in Smith's worldview, by self-interest, there was little one could do to convince capitalists to pay a just wage*, since this would injure their profits. Removing government controls on the movement and employment of labor was Smith's only solution to this problem: if workers could more easily enter skilled trades and leave their home parishes in search of employment, their bargaining power would increase. Otherwise, Smith had no ready solution to one of the central problems of capitalism: the tendency of capitalists to pile up money at the expense of their employees. In his remarks on the inverse relationship of wages to profits, Smith even prefigured the central argument of Thomas Malthus, who wrote that human populations tended to outgrow their food supply unless curtailed by disaster or dearth, and David Ricardo's Iron Law of Wages. Both of these ideas would, in turn, strongly influence the subject of my next entry in this series, Karl Marx. (Dum dum dum!)

(Above image courtesy of http://www.magixl.com/cliparts/)

* Henry Ford's observation that well-paid workers became well-heeled customers was 150 years away.

Thanks to My Commenters

To celebrate the fifth anniversary of this weblog, I'd like to express my appreciation of my readers, and particularly those who took the time to comment on my posts:

Mssr. Deaf Dionysus (1.28.11)
Susan M. Frey (1.19.11)
Ian Kammann (10.24.10)
Anonymous (9.9.10)
Elena O'Malley (6.23.09, 12.27.08, 9.17.08, 5.10.08, 3.26.08)

Todd Jeffcoat (9.7.09)
Ryan (8.12.09)
Cathy Kammer (12.04.08, 6.8.08, 4.22.08)
Clare Sammells (12.4.08)
Chantal Hachem (8.18.08, 8.9.08, 7.28.08)
Patrick Nichols (4.27.07, 4.20.07)
Robert Bricken (4.20.07)
Yvonne Aburrow (2.21.06)

Your observations have improved this blog's content, and your interest has helped sustain it through sixty months and more than 150 posts. Please accept my thanks.

A Curricular Proposal

In his recent book on the Mexican War, A Glorious Defeat (Hill and Wang, 2007), Timothy Henderson observed that colonial Mexico was a deeply segregated society: whites virtually monopolized the priesthood, public offices, and professions, while the province's Indian majority had its own separate councils, law courts, and taxes. Mixed-race people, or castas, were denied a secure position in either of these two racial worlds, and while one of Mexico's universities, the Colegio de San Juan de Letran, was open to them, it was a third-rate school whose "meager curriculum included courses in how to beg for alms" (p. 9). It occurred to me, though, that given the stagnant economy in the modern United States and the limited job market facing recent college grads, such classes might prove welcome additions to the curricula of some smaller American universities. Perhaps the subject would become popular enough to justify graduate seminars in begging and special training in mendicancy for soon-to-be-cashiered faculty. Just a thought.

Capitalism Defined, Part I: The People Who Have All Our Money

In starting this series, I think it best to prepare a short, introductory definition of capitalism, though I must confess I am magnetically drawn to Kurt Vonnegut's example: "Whatever the people who have all our money, good or bad, drunk or sober, are doing today." One might also be tempted to consult that Cadillac of reference works, the Oxford English Dictionary, which defines capitalism as "A system which favours the existence of capitalists." I think everyone can agree that this isn't very helpful, though the OED is also kind enough to trace the first appearance of the word in English to a novel by William Thackeray.

James Fulcher offers more useful information in his book Capitalism: A Very Short Introduction (Oxford UP, 2004). Fulcher doesn't give a quick-and-dirty definition of capitalism (which helps confirm my suspicion that one doesn't exist), but he does identify the following core features of a capitalist economy:

1) Individuals can freely invest money "to make [more] money" (14). This is the base definition of capital: money that makes more money.

1a) The existence of capital, needless to say, presupposes the existence of money: a commodity (gold, bills of exchange, cowrie shells, Flanian pobble beads) which serves as a readily convertible
medium of economic exchange.

2) Less obviously, investors can freely convert other assets into capital. This means one can freely sell land and labor (14).

3) A correlate of 1 and 2, above, is that labor and capital must be mobile, or fluid, and applicable to whatever enterprises will generate the highest profits (18).

4) Finally, the prices of land, labor, and capital are set in competitive markets, whose fluctuations can be managed - and exploited - by financiers and speculators (ibid).

Fulcher suggests that capitalism will only emerge in countries where there are limited opportunities to enrich oneself through plunder or government largesse, which is why it originated in marginal places - the city-states of northern Italy, the water-logged Netherlands, the cold and rather poor kingdom of England - rather than expansive or strongly-governed ones, like sixteenth-century Spain or early modern China (37). It would therefore have been unlikely to emerge among the subject of my research, the Chickasaws, in the eighteenth century, since they derived much of their wealth from plunder (slaves in the early 1700s, captured European goods thereafter) and, by the end of the century, subsidies from the British government and the United States.

As for the implications of the rest of Fulcher's summary, I shall have more to say in later installments, where I also plan to look at the development of capitalism as a concept from the eighteenth to the twentieth century.