Published by EH.Net (September 2016)

Steven G. Marks, The Information Nexus: Global Capitalism from the Renaissance to the Present. New York: Cambridge University Press, 2016.  xiv + 250 pp. $28 (paperback), ISBN: 978-1-107-51963-3.

Reviewed for EH.Net by Leonard Dudley, Economics Department, Université de Montréal.

In this disruptive study, Clemson University historian Steven Marks redefines capitalism by breathing new life into concepts recycled from nineteenth-century German sociology. In 1877 a young German philosopher, Ferdinand Tönnies, published Community and Civil Society, a book based on his habilitation thesis. Tönnies contrasted two types of social structure, each of which he had come to know during the preceding years of dramatic and often violent change in German society.  The Gemeinschaft, or community, was an “organic” society like that of the small town in an agricultural region of northern Germany where he had grown up. Here relationships were “natural,” governed by the proximity of family, neighbors and friends. In contrast, the Gesellschaft, or civil society, was the “mechanical” industrial society like that of the cities he had come to know as a student living in different regions of Germany. Whereas relationships in the Gemeinschaft were governed by familiarity and custom, those in the capitalist Gesellschaft were determined by markets and prices.

In The Information Nexus, Steven Marks presents a very similar dichotomy between two types of society. In pre-capitalist societies of medieval Europe or China, he argues, while there were local markets and long-distance trade, the flow of information was limited either by technology or government policy. The first true capitalist economies appeared in the Dutch Republic and England/Great Britain in the seventeenth and eighteenth centuries, where unrestricted publication permitted the rapid circulation of information among a literate population. Although Marks criticizes the “reductionist” approach of the German sociologists (p. 53), Tönnies too distinguished capitalist from non-capitalist economies by the nature of their information technologies. Tönnies’s Gemeinschaft is bound together by oral communication — “the general use of a shared language” — whereas at the initial core of his Gesellschaft lie two of Gutenberg’s offspring, printed debt instruments and newspapers.

The Information Nexus is divided into two sections, each of which is composed of three self-standing essays. In the Part I, Marks presents a review and critique of previous studies of capitalism. Chapter 1 describes the origin of the word capitalism itself. Writing in 1850, French socialist Louis Blanc defined it as the appropriation of capital by the few, whereas in 1911 for German social scientist Werner Sombart, capitalism was control by the Jews. In Chapter 2, Marks proceeds to a description of changes in the meaning of the term capitalism in the United States over the twentieth century. From 1917 onward, capitalism came to represent the American political and economic system in contrast to the communism of Russia or the Soviet Union. In Chapter 3, the author then criticizes previous studies, arguing that features often identified with capitalism — the protection of property, the presence of a monetized commercial economy and production based on the division of labor — are all to be found in many pre-capitalist societies.

In the Part II, Marks offers his own definition of the concept of capitalism. The reader learns in Chapter 4 that the essence of capitalism in the early-modern period was the “free flow of information about capital markets and business opportunities” (p. 100).  Although there were precedents in the Renaissance Italian city states, as mentioned, the crucial development came in seventeenth-century United Provinces and England. In Chapter 5, the story then jumps to the Second Industrial Revolution in the United States. After 1850, in rapid succession, Marks explains, the railroad, the telegraph, the telephone, the typewriter, the large-circulation newspaper and radio made possible the mass market in what became world’s largest economy. Finally, in Chapter 6, Marx turns to current trends in the global economy. He recognizes that automation and globalization present challenges for the rich world. However, the digital revolution holds great promise for emerging economies — provided that their governments permit the “clear signaling of rules and prices.” China, he asserts, despite its rapid economic growth, is having difficulty in switching from imitation to innovation, in part because “government intrusion … raises transaction costs and hampers the flow of information” (p. 227).  Marks concludes that capitalism is essentially “informationism” — an “intensification of information gathering” (p. 234).  Its presence in Europe and its offshoots along with its absence elsewhere account for the “great divergence” between the West and the rest over the past 400 years.

The Information Nexus is a remarkable study, not only for the power of its message, but also for the clarity of its prose and for the vast field of research compressed into its 250 pages. However, I suggest three additions that would help to complete Marks’s story of the rise of capitalism. A first point is the role of language. It is hard to imagine the efficient functioning of financial markets without the standardization of the vernacular — first written and then spoken — as described by Milroy (1994) for the case of England.

A second point concerns cooperation. Although Marks emphasizes price competition, it required a high willingness to cooperate in order for capitalist markets to function efficiently. Paradoxically, it was the intense military tournament between emerging nation states in Europe described by Philip T. Hoffman (2015) that seems to have provided the incentive for the citizens of each state to work together to improve their nation’s position. David Hounshell (1984), for example, has described how the collaboration between the French and American governments and their private entrepreneurs led to the development of interchangeable parts during the eighteenth and early nineteenth centuries.

A final issue is innovation. Ultimately it was the unprecedented divergence in innovation rates between capitalist and non-capitalist societies that led to dominance of the West. Marks mentions the Industrial Revolution only briefly, and fails to discuss the unprecedented burst of technological creativity between 1700 and 1850 described by Mokyr (1990).

As the late William McNeill (1963, p. 567) observed, “the career of Western civilization since 1500 appears a vast explosion, far greater than any comparable phenomenon in the past both in geographic range and in social depth.” Steven Marks’s study of the role of information flows in the creation of this capitalist Gesellschaft definitely merits a place on history bookshelves, whether real or virtual.


Philip T. Hoffman, Why Did Europe Conquer the World? Princeton: Princeton University Press, 2015.

David Hounshell, From the American System to Mass Production, 1800-1932: The Development of Manufacturing Technology in the United States. Baltimore: Johns Hopkins University Press, 1985.

William McNeill, The Rise of the West: A History of the Human Community. Chicago: University of Chicago Press, 1963.

James Milroy, “The Notion of ‘Standard Language’ and its Applicability to the Study of Early Modern English Pronunciation,” in Dieter Stein and Ingrid Tieken-Boon van Ostade, eds., Towards a Standard English, 1600-1800. Berlin: Mouton de Gruyter, 1994, 19-30.

Joel Mokyr, The Lever of Riches: Technological Creativity and Economic Progress. Oxford: Oxford University Press, 1990.

Ferdinand Tönnies, Community and Civil Society. Cambridge: Cambridge University Press, 2001 (original 1887).

Leonard Dudley, Honorary Professor and Lecturer, Economics Department, Université de Montréal,, is the author of Mothers of Innovation: How Expanding Social Networks Gave Birth to the Industrial Revolution (Cambridge Scholars, 2012) and “Language Standardization and the Industrial Revolution,” Oxford Economic Papers (forthcoming).

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