The story of capitalism, told by its detractors

To Thomas Carlyle, it was “one of the shabbiest gospels ever preached”. Adam Smith was an early fan, but was still suspicious of those who practised it. Rosa Luxemburg thought it fuelled imperialism and violence. Karl Marx hated everything about it. Even John Maynard Keynes believed its survival depended on the whole system being refashioned.

There are two great challenges to overcome in writing a history of capitalism, as John Cassidy has in his new book, “Capitalism and Its Critics”. The main one is that almost anyone, when confronted with the words “history of capitalism” and a 600-page doorstopper, will start wondering what’s on Netflix. The other is pinning down what, exactly, the subject of that history is. George Orwell wrote in 1946 that “The word fascism has now no meaning except in so far as it signifies ‘something not desirable’.” Today he might have observed something similar about the word “capitalism”, seldom used by politicians on either left or right unless it is to describe an aspect of the market economy they dislike.

Capitalism has always been a shape-shifter. Does the 18th-century system, based on colonial monopolies such as the one held by the East India Company, belong to the same tradition as the industrial, factory-based capitalism of the 19th century? How about the “plantation capitalism” that involved enslaving Africans and transporting them to harvest sugar in the Caribbean? None of it seems much to resemble the technology-dominated capitalism of 2025. Marx railed against those who owned the means of production; in today’s knowledge economy, the most important of these are within educated workers’ heads.

Mr Cassidy wastes little ink agonising over precisely what capitalism means. Instead, he tells its story in mosaic fashion, using the criticisms made by its detractors over the centuries. The result is an intriguing account of how some of the most consequential ideas in economics developed, and how they forged the modern world.

The author includes thinkers many readers will not have met before. There is William Thompson, a contemporary of John Stuart Mill. He advocated “co-operatives”, in which production was organised by the community and income was divided equitably. There is Flora Tristan, who in the 1830s travelled around Britain, wrote a stinging exposé of the destitution of its working class and campaigned to establish a universal workers’ union.

Then there are those who knew all too well how British capitalism extracted value from its colonies while immiserating locals. Starting in 1929, J.C. Kumarappa, an associate of Mohandas Gandhi, described how farmers in the poor Indian region of Matar Taluka were forced to pay land taxes amounting to between 70% and 215% of the value of their annual crop. In the 1930s Eric Williams, Trinidad’s first prime minister, argued that slavery helped set industrial capitalism in motion by developing new markets for British manufactured goods and supplying raw materials.

As Keynesian thinking gained popularity after the second world war, the system drew critiques from the right, too. Milton Friedman thought public spending had to be cut drastically to tame inflation. In the 1970s Augusto Pinochet, Chile’s dictator, put Friedman’s “shock treatment” theory into practice, quelling price rises at the cost of a deep recession, and murdering thousands to maintain order. Friedrich Hayek convinced Margaret Thatcher, Britain’s prime minister in the 1980s, to destroy much of the trade unions’ power.

The book’s focus is capitalism’s critics in the past rather than in the present. Mr Cassidy notes that, as globalisation advanced from 1980 onwards, hundreds of millions of people escaped poverty. Then comes a hand-wringing discussion over the precise number of percentage points by which the share of income earned by America’s richest 1% rose over the same time period. Still, several enjoyable evenings might be spent with Netflix off and Mr Cassidy’s new book open. ■