>>> "John Woodford" <[EMAIL PROTECTED]> 08/07 5:04 PM >>>
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Mark Jones wrote:

> ------------ EH.NET BOOK REVIEW --------------
> Project 2000: Significant Works in Twentieth-Century
Economic History
>
> Fernand Braudel, _Civilization and Capitalism, 15th-18th
Century_, in 3
> volumes, New York: Harper and Row, 1981-84, original
editions in French,
> 1979.
>
> Review Essay by Alan Heston, Departments of Economics and
South Asia
> Regional Studies, University of Pennsylvania.
<[EMAIL PROTECTED]>
>
> Fernand Braudel's _Civilization and Capitalism_
>
> Fernand Braudel is associated with the influential Annales
School (La
> nouvelle histoire) that advocated a major break from the
dominant narrative
> paradigm of the early twentieth century embracing an
approach to history
> integrating the social sciences with a problem-focused
history. Braudel is
> uniformly praised as one of the most influential
historians of the
> twentieth century, but a hard act to follow. Braudel
immersed himself into
> masses of materials and emerged with plausible broad-brush
stories to tell,
> teaching others how to replicate this approach is
problematic. While the
> Annales School has made only a small dent in the economic
history
> curriculum in the United States, it has had much more
influence on social
> history worldwide and on economic history in France,
Europe and the rest of
> the world. Rondo Cameron (1989, p. 406) in speaking of
_Civilization and
> Capitalism_ says, "it contains a wealth of factual
information, mostly
> correct, but the brilliance of its author's rather
idiosyncratic
> interpretation has been exaggerated by the popular press."
Whether one buys
> the whole quotation, one can certainly agree with Cameron
that Braudel
> builds very idiosyncratic interpretations based upon a
wealth of
> information, often very imaginatively used.
>
> This essay will not pretend to cover the three volumes of
_Civilization and
> Capitalism_ but rather touch on some broad themes that
have had influence
> on our understanding of world economic history. These
themes include
> Braudel's emphasis on the economic condition of every-man,
on a global
> approach to economic and social history, and on the
process of capitalism
> and its geographical spread. This essay will begin with
Braudel's uses of
> capitalism, and then take up themes from the volumes of
_Civilization and
> Capitalism_.
>
> Before dealing with capitalism, some background on
Braudel's career is
> needed. Many consider _The Mediterranean and the
Mediterranean World in the
> Age of Philip II_ (1966 English translation) published in
France in 1949 as
> his defining work. Braudel began this research in 1923 at
age twenty-one
> and it was envisaged as his doctoral dissertation and was
to concentrate on
> the policies of Philip II in the form of a conventional
diplomatic history.
> Braudel taught secondary school in Algeria from 1923 to
1932 and then lived
> in Brazil where he taught at the University of Sao Paulo
from 1935 to 1937.
> During this period he kept up with developments in Paris
including
> establishment of Annales in 1929 by Marc Bloch and Lucien
Febvre. The long
> gestation period of this impressive work undoubtedly had
much to do with
> how different was the final product from the original
design. Braudel says
> that he began to see the sense of writing a history of the
Mediterranean
> world in discussions with Febvre circa 1927 but that he
did not find models
> upon which to build. And then in 1934 he began to find
quantitative data on
> ship arrivals and departures, cargoes, prices and other
economic data that
> he felt would be the bricks and mortar of an economic and
social history of
> the Mediterranean. By 1939 he had an outline of what he
wished to say, but
> he was captured by the Germans in 1940 and was imprisoned
for the next five
> years where amazingly he wrote the first draft of _The
Mediterranean_
> totally from memory. _The Mediterranean_ focuses on the
history of one
> world region in a wide-ranging intellectual breakthrough,
involving the
> geographic setting, transport and communications, urban
and hinterland
> developments, trade, empires and more political themes.
>
> In 1950 his mentor, Lucien Febvre, asked Braudel, who was
then teaching at
> the College of Paris, to contribute a volume to a series
on world history.
> This series was to feature a volume on "Western Thought
and Belief,
> 1400-1800," that Febvre would prepare while Braudel would
focus on the
> development of capitalism over the same period. Febvre
died before he could
> complete his volume. Braudel succeeded Febvre in 1956 at
the Ecole Pratique
> des Hautes Etudes where he headed the Sixth Section,
history. Braudel took
> responsibility for preparation of what became a
three-volume series and was
> sole editor of the _Annales_ during its most influential
period. Braudel
> published the first volume of _Civilization and
Capitalism_ in 1967, and it
> was translated as _Capitalism and Material Life,
1400-1800_ in 1973. Volume
> II, _Les Jeux de l"Echange_ and volume III, _Le Temps du
Monde_, were
> published in France in 1979; volume II was translated and
published as _The
> Wheels of Commerce_ in 1982 and volume III as _The
Perspective of the
> World_ in 1984, a year before his death. (When the
three-volume set was
> prepared, Volume I, _Les Structures du Quotidien: Le
Possible et
> L'Impossible_, was a substantially rewritten version of
the 1967 edition
> and was published in France in 1979. The English
translation, _The
> Structures of Everyday Life: The Limits of the Possible_,
was published in
> 1981. That translation followed the form of the original
translation,
> _Capitalism and Material Life, 1400 - 1800_, incorporating
new materials
> and changes. In the text, Volume I will be referred to as
_Capitalism and
> Material Life_.)
>
> A number of centers that focus on aspects of his work were
begun during
> Braudel's lifetime. Immanuel Wallerstein was instrumental
in establishing
> the Fernand Braudel Center at Binghamton University (SUNY)
in 1976. Their
> journal, _Review_, begun in 1977, explores a variety of
issues relating to
> the evolution of capitalism, and the study of world
systems, about which
> more below. The Fernand Braudel Institute in Sao Paulo is
a think tank that
> has a strong social dimension to its studies. The economic
history emerging
> from these centers is likely to emphasize the impact of
capitalism on the
> social structures of society and the dependencies involved
in the evolution
> of a worldwide economy over the past five hundred years.
>
> 1. Capitalism
>
> Braudel emphasizes that capitalism is something different
from the market
> economy, a distinction that should be kept in mind in
understanding
> _Civilization and Capitalism_. In lectures in 1976, he
said, "...despite
> what is usually said, capitalism does not overlay the
entire economy and
> all of working society: it never encompasses both of them
within one
> perfect system all its own. The triptych I have
described--material life,
> the market economy, and the capitalist economy--is still
an amazingly valid
> explanation, even though capitalism today has expanded in
scope."
> (_-Afterthoughts on Material Civilization and Capitalism_,
p. 112) Whether
> or not one agrees with Braudel, this is his explanation of
the order of the
> three volumes moving from the lower level of the daily
material life of
> everyman to the market economy to the highest level of
capitalism. It is a
> structure of thinking that is rather alien to trends in
economic research
> that seek to explain the behavior of households, markets
and business firms
> using similar economic models, a point discussed further
below.
>
> What is capitalism? For Wallerstein capitalism is a system
built upon the
> international division of labor in which the core of the
resulting world
> system prospers, if not at the expense of the others, at
least relative to
> others. A familiar enough theme from the recent Seattle
World Trade
> Organization protests. While Wallerstein took inspiration
from Braudel,
> this is not what Braudel means by capitalism. Braudel
viewed the capitalist
> economy as in the above paragraph, namely as something
above everyday
> material life and the operation of markets. Capitalism
takes advantage of
> high profit opportunities generated by linking markets
into a world
> economy. Braudel distinguishes between _the_ world economy
and _a_ world
> economy, a distinction that is not felicitous, but as one
searches for
> alternatives, such as "regional economy" for a "world
economy," it seems
> better to stay with his language.
>
> For Braudel a world economy features a core capitalist
city whose
> commercial and financial spread may be well beyond
national political
> boundaries. However, for Braudel there may be several
world economies
> operating at the same time, and for each there will be a
dominant core
> city. Capitalism may utilize an international or larger
spatial division of
> labor but the hegemony of any particular core city for a
world economy will
> wax and wane over time. Further, Braudel believes there
have been
> capitalist worlds from the Italian city states or earlier,
whereas
> Wallerstein's analysis relies more on a Marxian
progression from feudalism
> to capitalism. Further, Wallerstein treats the political
empires like Rome,
> the Ottomans or the Mughals as non-capitalist systems
while Braudel would
> be inclined to see in them some capitalistic features. He
says, "...I am
> personally inclined to think that even under the
constraints of an
> oppressive empire with little concern for the particular
interests of its
> different possessions, a world-economy could, even if
rudely handled and
> closely watched, still survive and organize itself,
extending significantly
> beyond the imperial frontiers; the Romans traded in the
Red Sea and the
> Indian Ocean, the Armenian merchants of Julfa, the suburb
of Isfahan,
> spread over almost the entire world; the Indian Banyans
went as far as
> Moscow; Chinese merchants frequented all the ports of the
East Indies;
> Muscovy established its ascendancy over the mighty
periphery of Siberia in
> record time" (_Perspective of the World_, p. 55).
Braudel's position would
> clearly find support in Mancur Olson's work.
>
> One further point on capitalism concerns its origins.
Wallerstein seeks the
> origins of the capitalist world system in the feudal
breakdown of the
> agrarian society of Northern Europe in the sixteenth
century. Braudel is
> less concerned with questions of origins, but would
certainly place a
> European world economy much earlier, perhaps in
fourteenth-century Italy.
> Braudel is equally uncomfortable with Max Weber and any
attempt to tie
> capitalism to the Protestant reformation (see Stanley
Engerman's essay in
> this project). Again, his first line of attack would be to
point to all of
> the developments in the Italian city states that long
pre-dated Luther and
> Calvin.
>
> One point deserves further mention, namely the emphasis
that Braudel gives
> to the ebb and flow of world economies over time and
space. There is an
> element of Joseph Schumpeter's creative destruction in
Braudel's view of
> the process but with a spatial spin. Schumpeter saw new
innovations
> involving new entrepreneurs replacing older businesses
along with their
> technologies and labor force. For Braudel the slowly
shifting boundaries of
> world economies have two important implications. First,
some areas never
> become involved with a world economy and their economic
level remains very
> low. And second, some areas that were in a world economy,
and were perhaps
> a core city, lose their place as boundaries of world
economies change over
> time.
>
> 2. Capitalism and Material Life
>
> Braudel and the Annales School represented a reaction to
traditional
> narrative history with its emphasis on major actors,
usually political or
> economic elites. More problem-oriented social and economic
history has been
> mainstream for such a long period that present-day readers
are unlikely to
> see anything revolutionary in Braudel's work. However, in
Volume I the
> chapter headings at that time were themselves a statement,
beginning at the
> lowest level of economic and social organization.
>
> Braudel begins Volume I of _Civilization and Capitalism_
with a discussion
> of world population during the fifteenth to nineteenth
centuries, including
> an evaluation of the reliability of the numbers and a
description of the
> balance of peoples around the world. Beginning his study
with counting all
> of humanity, Braudel starts off with a global view,
involving the rich and
> the poor, and all regions of the world. He takes on social
classifications,
> like civilized and barbaric, providing an overview of
global social
> divisions. Public health receives major emphasis
throughout but certainly
> the importance of the education of mothers on the health
of children does
> not find its way into Braudel's treatment. It is a man's
world and although
> his wife, Paule, was an important contributor to his
research, one has to
> look hard in Braudel for that half of humanity.
>
> Braudel follows population in _Capitalism and Material
Life_ with chapters
> on the major categories of consumer expenditure, bread and
cereals, other
> foods and drink, and clothing and housing. These chapters,
enriched with
> appropriate illustrations, include the diets of the poor,
food fashions of
> the rich, the lack of furnishings of the homes of the poor
and middle
> classes, and the increasingly elaborate interiors of the
more affluent. The
> treatment of fashion and necessity in clothing is wide
ranging. While much
> of this is based on the research of others, it is an
extraordinary
> synthesis of materials from many sources and it is good
reading.
>
> The focus on everyday life in _Capitalism and Material
Life_ represents a
> concern shaping many areas of study after 1950, a movement
from the study
> of elites to those of more ordinary people. This entered
archaeology, as
> excavations moved from the palaces and temples to remains
of foods, bones,
> and the dwellings of the poor, or lack thereof. Braudel's
emphasis thus fit
> very well into much Marxian history and with a view that
capitalism grew at
> the expense of the lower classes. The following quotation
referring to
> Naples is in his chapter Towns and Cities, and is from one
of several
> sketches of cities of the era. It gives the tone of
Braudel's treatment of
> income inequality.
>
>         "Both sordid and beautiful, abjectly poor and very
rich, certainly
> gay and lively, Naples counted 400,000, probably 500,000
inhabitants on the
> eve of the French Revolution. It was the fourth town in
Europe, coming
> equal with Madrid after London, Paris and Istanbul. A
major breakthrough
> after 1695 extended it in the direction of Borgo de
Chiaja, facing the
> second bay of Naples (the first being Marinella.) Only the
rich benefited,
> as authorization to build outside the walls, granted in
1717, almost
> exclusively concerned them.     As for the poor, their
district stretched
> out from the vast Largo del Castello, where burlesque
quarrels over the
> free distribution of victuals took place, to the Mercato,
their fief,
> facing the Paludi plain that began outside the ramparts.
They were so
> crowded that their life encroached and overflowed on to
the streets. *
> These ragged poor numbered at the lowest estimate 100,000
people at the end
> of the century" (Volume I, p. 532).
>
> Here in the midst of a description of impoverishment in
Naples we also have
> imbedded an estimate of the homeless as 20 to 25 percent
of society, a
> typical quantitative illustration that Braudel uses to
great effect. He
> also tells us that the rich have the political power to
live in more
> desirable locations, nothing new there. It is not
surprising that Marxist
> historians would find much to like in Braudel, but there
is very little
> ideological in his writings.
>
> In fact, Braudel is much more interested in putting the
everyday life of
> all peoples in perspective by comparisons of 1400 to 1800
and to
> contemporary levels of living. Braudel admired Simon
Kuznets' work on
> national income but does not appear familiar with concepts
like urban
> versus rural versus national growth rates, and his career
predates the
> development of poverty weighted growth rates. But one
senses from his
> discussions of material life that Braudel would have found
these
> comfortable constructs with which to work. He also
suggests that he would
> have liked to use cliometrics in the analysis of his
period but that there
> were not adequate data. However, Braudel would have
probably wanted to
> build up social and national accounts rather than deal
with behavioral
> models.
>
> 3. The Wheels of Commerce
>
> It is curious that Volume I devotes chapters to Money and
Towns and Cities,
> which seem much more the subjects of Volume II, _The
Wheels of Commerce_.
> However, Braudel looks at money as an indicator of the
degree of
> monetization of societies and the complexity of their
economies. And as we
> have noted, the increase in towns and cities during the
1400-1800 period
> meant an increasing number of poor making their material
life in urban
> areas. On the other hand, this curious treatment may only
reflect the
> evolution of _Civilization and Capitalism_, in which
_Capitalism and
> Material Life_ was fairly self contained and appeared
thirteen years
> earlier than the remaining volumes.
>
> _Wheels of Commerce_ moves from markets to capitalism and
society. Although
> Braudel does not use the language, he is concerned with
the development of
> institutions, ideology and social norms. He offers a
justification for
> employing the term capitalism, noting that it was not a
term used by Marx,
> only his followers. Capitalism for Braudel involves not
only the use of
> capital but also its position at the apex of material
life. As discussed,
> it is this aspect of Braudel that has had a large
influence on those
> associating the expansion of capitalism and world systems
as necessarily
> intertwined.
> The first chapter of _Wheels of Commerce_ is called the
Instruments of
> Exchange, by which Braudel means the types of markets in
which exchange
> took place; it is followed by a chapter on Markets and the
Economy. The two
> may only be separate because together they are the length
of an average
> book. Braudel deals with local commodity markets serving
surrounding
> villages and market towns serving their hinterland, as
well as wholesale
> and financial markets. Markets for financial instruments
including bourses
> and exchanges, as well as credit institutions like banks,
are also
> discussed. Bourses, after the Hotel des Bourses in Bruges
where early
> meetings of merchants took place, also dealt in wholesale
commodity trade,
> especially for articles like pepper, cotton, tea and the
like. For Europe
> the 1400-1800 period sees the development of exchanges in
Amsterdam and
> London that while subject to bubbles, also provided a
basis for financial
> intermediation for even small investors.
>
> In treating the development of markets Braudel gives
emphasis to the
> geography of markets, and his treatment is often
imaginative, though not
> terribly systematic. He analyzes the frequency and density
of fairs and
> markets in England and France. He gives more cursory
treatments of other
> parts of the world, though both India and China receive
their fair due. G.
> William Skinner's treatment of Chinese market towns and
cities is discussed
> in terms of the hexagons of Walter Chrystaller and August
Losch. Here
> Braudel argues that the size of the hexagon embracing
different size market
> towns varies inversely with the density of population (II,
pp.118-19). He
> then applies this to puzzles in French history about the
varying boundaries
> of pays, which he argues may well have been due to
changing population
> densities over time--a rather nice cross-section,
time-series application.
>
> Braudel asks questions about markets that are fundamental
but often not
> treated systematically. When do wholesale markets emerge?
What leads to the
> establishment of year-round shops versus occasional
markets and fairs? Why
> did the number of shops proliferate during the 1400-1800
period? When are
> peddlers really agents of wholesalers and when are they
petty traders?
> Braudel concludes that the expansion of markets was
stronger in England
> than in France, though he does not probe further into why
this may have
> been so. And he argues in terms of his view of hierarchy,
that the
> development of capitalism was interdependent with the
expansion of
> exchange. He also notes that France and particularly China
had
> administrations that constrained the expansion in markets
and hence the
> amount of capitalistic development.
>
> How do markets relate to each other? One way they are
integrated is through
> the activities of the same firm, most typically in this
period, an extended
> family firm. Braudel examines these connections mainly in
Europe. The
> extended family firm was a common practice of merchants
from India, China
> and the Middle East, some of which are discussed by
Braudel. While he
> recognizes the importance of business families in
extending the boundaries
> of any world economy, this also poses a puzzle in some of
the diasporas
> that Philip Curtin has described so well.
>
> For example, in Asia, which in 1400 contained more than
half of world
> population, income and wealth, there was an established
pattern of trade
> prior to European incursions involving intersections of an
East Asian world
> economy that was linked to an Indian world economy
stretching from Malacca
> in the Malaysian Peninsula to Calicut and Cambay in
Western India. This in
> turn joined with what Braudel terms an Islamic world
economy extending from
> the East Coast of Africa through the Arabian Peninsula,
Egypt, Turkey and
> Persia. However, when Vasco da Gama arrived in Calicut in
1498, it was not
> the core city of an Indian world economy, nor is it
obvious that there was
> such a core city. Vijayanagar was a major South Indian
empire at this time
> but its ability to expand northward was constrained by the
presence of the
> five hostile Bahami kingdoms. The Mughal empire only
emerges after 1526.
> Calicut is itself ruled by the Zamorin, a Hindu ruler
whose state was
> physically quite small, and who did not have territorial
ambitions. As
> Braudel notes, the proportion of Arabs, Indian Muslims,
Hindus, and Chinese
> among the actual merchant groups and shippers varied over
the centuries.
> Diasporas like Malacca and Calicut were home or branch
office to Arabs,
> Armenians, Chinese, Hindus, Bohras, Khojas and similar
Muslim groups, Jews,
> Malays and others. The activities of these traders seem to
fit Braudel's
> model of high profit seekers linking smaller markets.
However, the claim
> that these Asian world economies of the fifteenth and
earlier centuries
> involved core cities seems strained. Even after the
Mughal, Ming, Ottoman
> and Persian empires were established, it is problematic.
>
> The remaining chapters of _Wheels of Commerce_ deal with
the development of
> capitalism and the role of the state in markets and in
establishing
> monopolies including a lengthy treatment of the activities
of the merchant
> trading monopolies in Africa, Asia and the Americas.
Braudel's treatment of
> society is a wide-ranging social and political analysis
including
> discussions of hierarchies, revolts and the state and
social order. Braudel
> does not use the terminology, "social norms," but in a
section
> "Civilizations do not always put up a fight" (II, p. 555)
he certainly
> explores their importance. He says, "When Europe came to
life again in the
> eleventh century, the market economy and monetary
sophistication were
> 'scandalous' novelties. Civilization, standing for ancient
tradition, was
> by definition hostile to innovation. So it said no to the
market, no to
> profit making, no to capital. At best it was suspicious
and reticent. Then
> as the years passed, the demands and pressures of everyday
life became more
> urgent. European civilization was caught in a permanent
conflict that was
> pulling it apart. So with a bad grace, it allowed change
to force the
> gates. And the experience was not peculiar to the West."
>
> 4. The Perspective of the World
>
> In his very ambitious last volume, Braudel deals with long
cycles, the
> emergence of various world economies, historical problems
in measuring GDP
> per person, the colonial economies and the industrial
revolution. It is
> certainly successful in one of its aims, to treat the
economic history of
> the 1400-1800 period as a story of the world, not simply
Western Europe.
> There are rich discussions of Africa, the Americas, and
Asia balancing well
> the perspective of the colonizer and the colonized. In his
essay on Max
> Weber, Engerman (p. 5) places Weber and Braudel, along
with David Landes,
> Joel Mokyr, Douglass North, Nathan Rosenberg and others as
scholars dealing
> with the "perceived uniqueness of the Western European
economy." Let me
> close this essay by arguing that while Braudel has a lot
to say about
> developments in Western Europe, he did not see a simple
explanation of the
> causes of growth in the West, nor did he think this was
the most
> interesting question to explore.
>
> The uniqueness of Western European experience has
certainly been taken as
> the phenomenon to be explained by many economic
historians. Writers like
> Weber not only looked at European evidence in the
Protestant Reformation
> but also offered explanations of why the religions of
other societies, such
> as India, were less conducive to growth. Braudel is not at
home with Weber,
> nor does he seem to give great importance to institutions
like private
> property, contract, and the like. In fact, he does not
seem to accept even
> the premise that there is something unique to be explained
about the
> development of capitalism in Europe.
>
> It might be argued that this is because of Braudel's
idiosyncratic view of
> capitalism. Let me again quote Braudel;
>
>         "Throughout this book, I have argued that
capitalism has been
> potentially visible since the dawn of history, and that it
has developed
> and perpetuated itself down the ages. (III, p. 620) ... It
would however be
> a mistake to imagine capitalism as something that
developed in a series of
> stages or leaps--from mercantile capitalism to industrial
capitalism to
> finance capitalism, with some kind of regular progression
from one phase to
> the next, with 'true' capitalism appearing only at the
late stage when it
> took over production, and the only permissible term for
the early period
> being mercantile capitalism or even 'pre-capitalism'. In
fact as we have
> seen, the great 'merchants' of the past never specialized:
they went in
> indiscriminately, simultaneously or successively, for
trade, banking,
> finance, speculation on the Stock Exchange, 'industrial'
production,
> whether under the putting-out system or more rarely in
manufactories. The
> whole panoply of forms of capitalism--commercial,
industrial, banking--was
> already employed in thirteenth century Florence, in
seventeenth-century
> Amsterdam, in London before the eighteenth century"(III,
p. 621).
>
> Here Braudel strongly sees in his period and earlier the
same business
> forms that exist today and to which others attribute the
uniqueness of
> Western European experience.
>
> However, the following quotation perhaps illustrates where
Braudel imparts
> his own special view of capitalism. He says,
>
>         "The worst error of all is to suppose that
capitalism is simply an
> 'economic system,' whereas in fact it lives off the social
order, standing
> almost on a footing with the state, whether as adversary
or accomplice: it
> is and always has been a massive force, filling the
horizon. Capitalism
> also benefits from all the support that culture provides
for the solidity
> of the social edifice, for culture--though unequally
distributed and shot
> through with contradictory currents--does in the end
contribute the best of
> itself to propping up the existing order. And lastly
capitalism can count
> on the dominant classes who, when they defend it, are
defending themselves.
>         Of the various social hierarchies--the hierarchies
of wealth, of
> state power or of culture, that oppose yet support each
other--which is the
> most important? The answer as we have already seen, is
that it may depend
> on the time, the place and who is speaking" (III, p. 623).
>
> Braudel has a number of elements of Schumpeter in his view
of world
> economic history, in particular long cycles and creative
destruction. One
> of his important insights shared by many others who stress
uneven or
> unbalanced growth is that world economies have changing
borders and that
> there are often areas not included in any world economy.
Indian software
> programmers are writing for Oracle in Bangalore while
other areas of India
> (and many other world areas) are as yet unaffected by the
information
> technology revolution. Most large countries have special
development
> programs for backward areas, of which many have had
flourishing histories,
> such as natural resource-rich Bihar and Eastern Uttar
Pradesh in India, the
> seat of the Mauryan Empire and the birthplace of the
Buddha.
>
> However, Braudel departs sharply from Schumpeter in how he
views the
> capitalist entrepreneur. For Braudel the monopolistic
character of
> capitalism is the key element of privilege and the link
between the state
> and society. He says,
>
>         "The rise of capitalism in the nineteenth century
has been
> described, even by Marx, even by Lenin, as eminently,
indeed healthily
> competitive. Were such observers influenced by illusions,
inherited
> assumptions, ancient errors of judgement? In the
eighteenth century,
> compared to the unearned privileges of a 'leisured'
aristocracy, the
> privileges of merchants may perhaps have looked like a
fair reward for
> labour; in the nineteenth century, after the age of the
big companies and
> their state monopolies (the Indies companies for instance)
the mere freedom
> of trading may have seemed the equivalent of competition.
And industrial
> production (which was however only one sector of
capitalism) was still
> quite frequently handled by small firms which did indeed
compete on the
> market and continue to do so today. Hence the classic
image of the
> entrepreneur serving the public interest, which persisted
throughout the
> nineteenth century, while the virtues of laissez-faire and
free trade were
> everywhere celebrated.  The extraordinary thing is that
such images should
> still be with us today in the language spoken by
politicians and
> journalists, in works of popularization and in the
teaching of economics,
> when doubt long ago entered the minds of the
specialists..."(III, pp.
> 628-9).
>
> These closing quotations from Braudel restate his view
that everyday
> material life and operation of markets proceed at one
level while
> capitalism carries on at a higher level above the others.
Further Braudel
> sees capitalism as closely related to the political elites
of the world
> economy in which they are operating. While Braudel's view
of the world
> economy is shared by many Marxist historians it is also
consistent with the
> writers like John Kenneth Galbraith and Mancur Olsen, with
whom I sense
> more affinity.
>
> 5. Conclusion
>
> One cannot write an economic history of the world of the
last five hundred
> years and not at least list Fernand Braudel in your
bibliography. But how
> well does Braudel stand up today? My answer would be very
well indeed at
> several levels. Landes (1998, xvii) introduces his recent
book with an
> account of the inability of contemporary medicine in 1836
to save Nathan
> Rothschild, the richest person in the world at the time,
from death by
> blood poisoning. Braudel put medical advances and public
health practices
> up front in _Capitalism and Material Life_ as critical to
the improvements
> in economic well being of the world in the early modern
period, clearly a
> theme shared with Landes and many others. He likewise saw
the importance of
> historical demography to our understanding of development
of the global
> economy.
>
> Related to these demographic themes is Braudel's concern
with how health
> and material well being were distributed. He saw the great
inequalities
> generated in world economies, and thought it important to
describe them. He
> documents inequalities in both the distribution of private
and public goods
> and services and sees systems of privilege as part of past
and present
> economies. And while he would have liked a more equitable
world, this is
> not a major theme in _Capitalism and Civilization_. A
major theme that has
> contemporary resonance is the uneven development of
different geographic
> regions of the world, and the lack of convergence of world
economies, and
> more particularly the persistence of regions that have
never been part of a
> world economy, or were part of a world economy in the
past, but not at
> present.
>
> Braudel's distinction between markets and capitalism is
probably least
> likely to make it into mainstream economic history, yet in
many ways it
> also has a very contemporary ring as we move towards
becoming one world
> economy. It is not hard to imagine Braudel finding
analogies in this period
> for phenomena like "not in my backyard" or the internet.
In today's world
> of mega-mergers that need support by one or more nation
states, of
> Airbus-Boeing battles and of Microsoft anti-trust actions,
the Braudel
> perspective of the world fits surprisingly well. The
importance of being
> first when there are declining costs, learning by doing,
or other scale
> factors that provide barriers to entry into markets are
not foreign to the
> world that Braudel describes. Often, as in the case of the
trading
> companies, monopoly was based upon government support as
in the cable
> industry today, and much of the capitalism that Braudel
describes is
> related to retaining government support or preventing
government
> interference.
>
> References:
>
> Braudel, Fernand. 1966 (English translation, 1972-73).
_The Mediterranean
> and the Mediterranean World in the Age of Philip II_. New
York: Harper and
> Row.
>
> Braudel, Fernand. 1977. _Afterthoughts on Material
Civilization and
> Capitalism_. Baltimore: Johns Hopkins University Press.
>
> Cameron, Rondo. 1991. _Economic History of the World_. New
York: Oxford
> University Press.
>
> Curtin, Philip. 1984. _Cross-Cultural Trade in World
History_. London:
> Cambridge University Press.
>
> Galbraith, John Kenneth. 1967. _The New Industrial State_.
Boston:
> Houghton-Mifflin.
>
> Landes, David S. 1998. _The Wealth and Poverty of Nations:
Why Some Are So
> Rich and Some So Poor_. New York: W.W. Norton.
>
> Olson, Mancur. 2000. _Power and Prosperity: Outgrowing
Communist and
> Capitalist Dictatorships_. New York: Basic Books.
>
> Schumpeter, Joseph. 1942. _Capitalism, Socialism and
Democracy_ . New York:
> Harper and Brothers.
>
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