Capitalism 2.2

Article Abstracts – Summer 2021


On the Margins
Francesca Trivellato

We are all too aware of the rift that has occurred between history and economics in the past half-century.
What matters to the project of this journal is something more specific—namely, the fact that economic history is marginal to both history and economics as disciplines. From its inception, this journal has embraced marginality, understood as a conscious impatience with prior forms of consensus and as a platform from which to launch new work that may not find its place in existing venues. We aim to shuffle the cards; we do not have a single gold standard for form or content; we see no tension between rigor and creativity; we purposefully publish articles alongside one another that in the eyes of the beholder might belong to different journals. As editors, we are well aware of the enormous privilege that undergirds a position of marginality defined in these terms, but wish to nurture a risk-taking enterprise.


Modern Capitalism’s Pasts and Possible Future 
R. Bin Wong

Modern capitalism is most often understood as a European development beginning in the late eighteenth century, followed by a global spread accelerating after World War II. Less consensus exists on the reasons for this spread and on how recent episodes of economic development are similar to or differ from those that occurred in European history. Few have pondered the possible relevance of the ideologies and institutions of political economies in different world regions before the modern era and how the spread of modern capitalism has shaped their contemporary approaches to the future. This article sketches Chinese comparisons with and connections to patterns initially European in origin. It highlights the economic challenges of climate change, in particular comparing Chinese and European water policy reforms. The proposed payoff of this exercise is an additional perspective from which to ponder capitalism’s future and what may emerge in its stead.

Where is Capital? 
Emma Rothschild

The article engages recent literature on microeconomics and intermediate goods in order to outline new models of growth in economic history and the possibility of productive exchanges between economists and historians. It focuses on the process of industrialization in England and France from the 1760s to the 1810s and argues for the diversity of kinds of capital, including the capital embodied in enslaved people, and for the importance of intermediate goods, especially materials, purchased services, and unconventional sources of energy. The article includes excerpts from primary sources.

Slavery and Development in Brazil 
Nuno Palma, Andrea Papadia, Thales Pereira, and Leonardo Weller

This article brings new evidence on the legacy of slavery in nineteenth-century Brazil to bear on the history of economic development. Its conclusions contribute to the debate raised by the new history of capitalism about the critical role played by slavery in the industrialization of the United States. We argue that the new history of capitalism lacks a comparative perspective. Brazil imported more slaves than any other country in the world and slavery lasted longer and was more widespread there than in the United States South. Rather than promoting economic growth and development, the evidence shows that slavery held back industrialization in Brazil. We also discuss the role of slavery in agricultural productivity and show that, as in the United States, the use of violence does not explain increases in the productivity of cotton plantations.

Frail Bonds of Liberalism 
Michael R. Glass and Sean H. Vanatta 

Between 1940 and 1965, state-level officials changed the relationship between two pillars of the postwar social contract: secure retirement and modern public schools. In the early twentieth-century United States, state pension managers, following an investment regime we call “fiscal mutualism,” funneled the savings of government workers into government securities. By purchasing municipal bonds, pension officials lowered the borrowing costs for local governments. We analyze this regime through a close examination of New York State’s pension fund. During the 1950s, the comptrollers who managed the New York State Employee Retirement System (NYSERS), the nation’s largest state pension, subsidized suburban school construction by purchasing the bond issues of local school districts. But as changes in the financial landscape made this arrangement less viable, New York Comptroller Arthur Levitt Sr. began lobbying for the liberalization of the pension’s investment powers. After state lawmakers approved the regulatory changes, Levitt disinvested from municipal bonds in favor of higher-yielding corporate securities. Pension liberalization secured higher returns for state retirees, but it also left school districts to navigate bond markets without the backstop of fiscal mutualism. As school budgets, and the property taxes supporting them, soared to repay the interest costs, tax revolts became a permanent response to the fiscal volatility. These transformations, we argue, stemmed from postwar liberalism’s dependence on financial markets to deliver retirement security, public education, and other social benefits.

Back to the Sources 
Claire Lemercier and Claire Zalc

This article elaborates on our experience of teaching quantitative methods to historians and writing an introductory book on this topic. We promote respect for principles of source criticism as the cornerstone of the constitution of data from historical sources, and argue that a conversation on this constitution is as important for new historians of capitalism as it is for economic historians and business historians, among others. The first part of the article explains what led us to promote constructivist, small-scale, experimental quantitative history. In terms of teaching, this choice translates into a learning-by-doing approach focused on the construction and categorization of data from sources. The article then presents practical methods of teaching and research, borrowing examples from economic history and beyond, as well as from the history of capitalism. The second part also addresses the transformation of sources into quantifiable data, while the third part discusses data categorization and analysis. 


Monads in the Empire of Value
Graham Hubbs

In spite of their materialist aspirations, both classical and neoclassical economic theories rely on non-material notions of value to explain market activity. André Orléan calls this commitment of orthodox economics “the substance hypothesis.” In this essay, I show how the substance hypothesis mirrors Gottfried Wilhelm Leibniz’s account of monads, which he called the “true atoms of nature.” I argue that value is the atom of economic nature in orthodox economic theories. Like monads, it is a fantasy. The atom of economic nature that governs our actual, material lives, I argue, is money.

Medieval Homo Economicus 
Nathan Sussman

Cultural beliefs that are reflected in homo economicus were transmitted from ancient Indo-European civilizations to Frankish society. I use medieval texts to demonstrate that Gaul’s conquest by the Franks sustained and possibly cultivated these beliefs, rather than set them back, even in the absence of developed markets. The cultural presence of homo economicus allows us to apply economic analysis in studying the early Middle Ages. It also suggests that the emergence of capitalism during the commercial revolution, the Enlightenment, and the rise of classical economics as a science in Western Europe are products of these cultural beliefs.