Published by EH.Net (January 2015)

Larry Neal and Jeffrey G. Williamson, editors. The Cambridge History of Capitalism. Volume I. The Rise of Capitalism from Ancient Origins to 1848; and Volume II. The Spread of Capitalism: From 1848 to the Present. Cambridge: Cambridge University Press. 2014. xii + 616 pp. (Vol. I) and x + 567 pp. (Vol. II), $230 (cloth), ISBN: 978-1-107-01963-8 (Vol. I) and 978-1-107-01964-5 (Vol. II).

Reviewed for EH.Net by David Mitch, Department of Economics, University of Maryland — Baltimore County.

After abandoning the topic for a quarter century to the wilderness of Economics Departments, historians have rediscovered capitalism. At least we are told so by recent articles in the New York Times (Schuessler, 2013) and the Chronicle of Higher Education (Adelman and Levy, 2014) as well as by Sven Beckert (2011; 2014) of Harvard’s History Department.  Historians have now found the study of economic history too salient to leave to economists “who sucked the culture and chronology out of it and turned it into an obscure province of mathematical formulas” (Adelman and Levy, 2014).  Capitalism is arguably not a core concept employed in economics textbooks or in the economics profession itself. Indeed, as Mark Harrison notes in his chapter in the second volume of those under review (p. 350) “the identity of capitalism was created by its critics … [T]o inquire into whether ’capitalism’ as such has a propensity for anything … is to enter a debate on conceptual territory chosen by the enemy.” Thus, it is of interest to see how two stalwarts of the cliometrics movement and their minions proceed with developing the history of this topic.  The editors tell us that the project got under way in 2005 and most of the essays seem to have been completed by late 2012. The editors themselves, Larry Neal (Illinois and LSE) and Jeffrey Williamson (Harvard), throughout their careers have had global interests and this is evident in the global scope of each of the volumes.

The two volumes are organized quite differently. Volume I, edited by Neal, bears the subtitle “The Rise of Capitalism: From Ancient Origins to 1848.”  Each of the chapters in this volume focuses on a different episode, with each episode having at least fuzzy geographical boundaries — that is none of the chapters with the possible exception of Neal’s introduction is truly global in coverage though most do allow for the presence of open economy forces.  Some of the episodes identified are predictable including those on the Italian city states by Luciano Pezzolo and the Low Countries by Oscar Gelderblom and Joost Jonker culminating in the two penultimate chapters on “British and European Industrialization” by Knick Harley and “America: Capitalism’s Promised Land” by Jeremy Atack.  However many of the remaining twelve essays cover episodes much less likely to be associated with the rise of capitalism including the opening episode on “Babylonia in the First Millennium BCE” by Assyriologist Michael Bursa, that on the silk road by Etienne de la Vassiere, and that on native Americans before 1800 by Ann Carlos and Frank Lewis.  I found these unexpected episodes to be among the highlights of the two volumes, rather than irrelevant digressions, because these authors so deftly balanced the economic and non-economic forces in play. The volume also extends its geographical range with chapters on China by Bin Wong, India by Tirthankar Roy, the Middle East by Sevkut Pamuk, Latin America by Richard Salvucci, and Africa by Morten Jerven.

In his introduction to Volume I, Larry Neal (p. 2) identifies four common elements to capitalism: 1) private property rights, 2) contracts enforceable by third parties, 3) markets with responsive prices, and 4) supportive governments.  He formulates the question that the essays in this volume seek to address as “Why did capitalism and modern economic growth take so long to get started in the first place?” The common answer he identifies is the difficulty of coordinating the appropriate mix of elements required to “build and sustain permanent settlement.”  The themes of  Volume I are the early presence of key elements of capitalism but also the presence of factors stunting the development of those elements into a sustained system of capitalism with accompanying sustained economic growth.  The chapters in this volume for the most part maintain an admirable unity and coherence in addressing these issues by marshalling a rich command of the relevant historiographical and, in a number of instances archaeological, literature while also informed by an economic, roughly Northian, framework emphasizing the role of institutions. In his forthcoming review, however, Peter Temin detects a stronger flavor of John Hicks in this volume based on the distinction between custom, command and exchange.  On the evidence of this volume, cliometricians, traditional historians, archaeologists, and classicists have been having extensive intellectual intercourse over the past half century. The Carlos/Lewis chapter is the only one “marred” by the presence of economist’s diagrams and notation, though the chapters on ancient Greek and Roman economies do feature quantitative displays.  Evidently not just Peter Temin, but professors of classics such as Alain Bresson, author of the chapter on the Ancient Greek economy, and Willem Jongman, author of that on Ancient Rome, are willing to indulge in quantification when treating ancient economic history.

Volume II, edited by Jeffrey Williamson, is subtitled “The Spread of Capitalism: From 1848 to the Present.”  The sixteen chapters in this volume are thematic with each chapter seeking to provide global coverage.  These themes are quite diverse. Two chapters have a sectoral focus, that of Robert Allen on manufacturing and that of Giovani Frederico on agriculture. Other chapters take up — among other issues — those related to enterprise organization including Geoffrey Jones on multinational corporations and Randall Morck and Bernard Yeung on “freestanding firms versus family pyramids.”  The Economist in its Nov. 1, 2014 review of these volumes detects a lack of academic rigor and asserts that they are best suited for “the ordinary reader.”  However, a number of the chapters in this volume demonstrate on how high a level a good work of scholarly synthesis can operate by combining the cogent formulation of important general questions with the marshaling of wide ranging literatures that address these questions. In this regard, I particularly enjoyed Gareth Austin’s chapter on “Capitalism and the Colonies,” Kristine Bruland and David Mowery’s chapter on “Technology and the Spread of Capitalism” (admirable for its rich detail on the periphery as well as core cases) and Mark Harrison’s chapter on “Capitalism at War.”

Some of the chapters in Volume II that I was expecting to be ho hum, I instead found to be particularly compelling. Thus while Harold James’s essay on international capital movements is organized around a standard chronology of the evolution of the international monetary system, it is quite insightful in its exposition of the forces at work behind the historical episodes he considers. And although Peter Lindert’s essay on “Private Welfare and the Welfare State” employs the framework of his landmark Growing Public volumes, he goes well beyond them with his usual cogent posing of big picture issues — in this instance regarding the scope of private philanthropy in various time periods.

The overview above provides just a sampling of the rich material these two excellent volumes contain. The editors deserve praise for assembling such a diverse and distinguished group of authors while maintaining coherence and cross-referencing across chapters.  Readers will certainly want to make sure that their institutional libraries order these volumes and will also want to lobby Cambridge University Press to make the essays in these volumes more available to the overwhelming share of potential readers unlikely to be disposed to pay the exorbitant list price for this set.  Both volumes include contributions by historians as well as economists and none of the chapters bristles with mathematical formulas.

In evaluating the contribution of these volumes, it can be noted that historian and political scientist William Sewell set the theme for the 2012 Social Science History Association meeting as “Histories of Capitalism,” with the plural explicitly pointing to the variety of approaches that can be taken to the history of this subject.  Neal and Williamson appropriately chose not to take on the full range of methodologies that could be employed in writing histories of capitalism. This would have cost the volumes coherence and could well have resulted in a further decade or more before they saw the light of day.  However, in doing due diligence as reviewer, I should point out some of the roads not taken with these volumes and questions not fully addressed.

The concept of capitalism itself can be defined in various ways and how it is conceived influences how one would tell its history.  The use of the verbal nouns “rise” in the sub-title of Volume I and then “spread” in that of Volume II imply the presence of forces at work or a teleology about capitalism that is not very fully explored by the editors. Whether capitalism is a trans-historical concept as concepts such as private property rights or markets with responsive prices would seem to be or instead refers to an historical epoch, as in William Sewell’s 2012 SSHA Presidential address, is also not directly considered.  The editors, as in Neal’s elements laid out above, do provide a serviceable and clearly stated definition but allow flexibility and expansiveness across chapters as some bring in other elements of capitalism such as a focus on factory organization in Knick Harley’s chapter on British and European industrialization (p. 491, 512).  However, in a number of the chapters the distinctions between capitalism, economic history, and economic growth are elided.

This lack of conceptual clarity is manifest in putting the two volumes together to constitute a history of capitalism. Just when one would expect the narrative to be hitting its stride chronologically in turning to England in the early nineteenth century or the U.S. in the later nineteenth century, one arrives at Volume II with its global thematic organization and any perspective on the maturation of British, U.S. or for that matter German or Japanese capitalism, is subject to an obstructed view. Thus, while I found Jeremy Atack’s chapter on the U.S. quite informative including his discussion of the evolution of the corporate form of organization, his coverage stops at 1900 and gives the most extended attention to developments prior to 1850. If not a Hamlet without the Prince there is definitely an element of “Rosencrantz and Guildenstern are Dead” about the pair of volumes.  Volume I, with its cohesive narratives of either capitalism stunted or capitalism in early origins, is more Shakespearean in flavor while Volume II, with its quick succession of contrasting themes, is more redolent of Tom Stoppard, a shift perhaps appropriate for treatment of the twentieth century.

The chapters in these volumes are hardly devoid of culture or chronology.  However, historians including business historians may be concerned that human agency does not feature very prominently. There is little evidence of a belief in “the vital few.”  It is telling in this regard that the term “entrepreneurs” garners eleven rows of listings in the index to Volume I while is completely missing from the index to Volume II.  Such leading entrepreneurs as Andrew Carnegie, J.P. Morgan, and John D. Rockefeller get one citation each in the index to Volume II, while Henry Ford and Andrew Mellon are not listed at all.

The volumes are largely materialistic in their focus. The intellectual and cultural dimensions of capitalism are not very developed.  This is not an unreasonable decision. One can view the volumes as presenting a history of what actually happened in the economy as opposed to debates about competing ideologies. This would be in line with both a Marxist view that intellectual and cultural developments are primarily superstructure and a Humean view that actual human behavior as opposed to intellectual controversies among the schools should be of most interest to the historical economist.  However, there are indications that the editors don’t fully believe in such mind-body dualism.  They tell us that the 1848 break point between the two volumes was chosen not because of actual economic or even political developments but because of the publication that year of two landmark intellectual works, Mill’s Principles of Political Economy and The Communist Manifesto of Marx and Engels. The chapters by Jose Luis Cardoso on “The Political Economy of Rising Capitalism” in Volume I and by Jeffry Frieden and Ronald Rogowski on “Modern Capitalism: Enthusiasts, Opponents, and Reformers” do give coverage to intellectual developments. However, they also provide perhaps the strongest support among the chapters in these volumes for the Economist’s concern noted above that such 30-page surveys can only provide superficial overviews to lay readers without providing much insight to scholars.

Yet there is ample scope for thinking that the history of ideas matter, whether this be capturing the influences on  Keynes’ madmen or considering the origins of the policy measures that Robert Allen identifies in his chapter as dominating over ideology or institutions as causal factors in the rise of manufacturing. More recent “spiritual accounts” of the rise of capitalism such as those of Deirdre McCloskey and Joel Mokyr are notably not represented in either volume.  And the older spiritual approach of Max Weber gets only one cite in either of the indexes and that of R.H. Tawney gets none.

If the coverage to intellectual and cultural history is weak, the coverage of the historiography on the concept of capitalism is even more limited. The views of Polanyi, Schumpeter, and Marx on the evolution of the capitalist system get at most passing mention in a few of the chapters. Milton Friedman gets only two cites in the index to Volume II, while Frank Knight and Friedrich Hayek are not listed at all. Nor do Andrew Ure, Charles Babbage or Frederick Winslow Taylor get any listings in the index to either volume.

The master narrative of the volumes as suggested by the concluding chapter on the future of capitalism is distinctly pro-capitalist, attributing to the capitalist system the material fruits of modern economic growth.  In projecting the future of capitalism, and the editors do seem to think that capitalism has an indefinite future, their discussion focuses on institutional and financial arrangements. It is noteworthy that in this futuristic chapter no mention is made of the role of technology.  In evaluating the impact of capitalism on human welfare, Leandro Prados’s penultimate chapter to Volume II focuses primarily on absolute measures of human welfare.  With Williamson as one of the co-editors, one might have expected more coverage in both volumes to be given to the relationship between capitalism and economic inequality, a sore point often raised by critics of capitalism, most notable recently in Thomas Piketty’s apparent ambush of the economics profession.

Thus there is ample scope for developing other perspectives on the history of capitalism than those represented in these two volumes and for historians based in history departments to ply their craft to the topic. Perhaps Cambridge or some other major university press should consider a volume or even set of volumes just dedicated to the history of American capitalism. Nevertheless, the two volumes make a strong case that economic history as currently practiced is essential for an understanding of capitalism and its history.


Jeremy Adelman and Jonathan Levy, “The Fall and Rise of Economic History,” Chronicle of Higher Education, Dec. 1, 2014.

Sven Beckert, “History of American Capitalism” in Eric Foner and Lisa McGirr, editors, American History Now, Philadelphia: Temple University Press, 2011.

Sven Beckert, Angus Burgin, Peter James Hudson, Louis Hyman, Naomi Lamoreaux, Scott Marler, Stephen Mihm, Julia Ott, Philip Scranton, and Elizabeth Tandy Shermer, “The History of American Capitalism,” Journal of American History, 101, 2014.

“Capitalism through the Ages. A Grand Tour,” Economist, November 1, 2014.

John Hicks, A Theory of Economic History, London: Oxford University Press, 1969.

Douglass North, Institutions, Institutional Change and Economic Performance, New York: Cambridge University Press, 1990.

Jennifer Schuessler, “In History Departments It’s up with Capitalism,” New York Times, April 6, 2013.

Willliam H. Sewell, Jr. “The Capitalist Epoch,” Presidential Address, Social Science History Association, 2012, Social Science History, 38, 2014.

Peter Temin, “The Cambridge History of ‘Capitalism.’” NBER Working Paper 20658, November, 2014; forthcoming in the Journal of Economic Literature.

David Mitch is Professor of Economics at the University of Maryland, Baltimore County. His essay on “Morality versus Money: Friedrich Hayek’s Move to the University of Chicago” will be published in a forthcoming volume of Hayek: A Collaborative Biography edited by Robert Leeson.

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