Theory of Indivisibility: Evolutionary Origins of Capitalism
This post corresponds with Episode 15 of my podcast Theory of Indivisibility, where I talk about the evolution of ownership. Be sure to check it out on Google Podcast, Apple Podcast, Spotify, or Stitcher!
Each and every social system that we’ve explored in my Theory of Indivisibility publication is dynamic and complex. Capitalism is at the forefront of our awareness because people living in capitalist systems are beginning to become aware of its shortcomings as they experience and witness the realities of living in a capitalistic society.
Before we dive in, let’s review complexity. You may recall that detail complexity involves dealing with many items or variables. Crunching numbers on an excel spreadsheet or organizing a large event are examples of detail complexity.
Dynamic complexity relates to when there is a delay between cause and effect, when attempted common sense solutions do not produce expected results, when the same action has a different outcome for different people, or when the same action has dramatically different outcomes immediately than it does at a later date. Sometimes with dynamic complexity, the same action will have one set of consequences in one setting and a completely different set of consequences in a different setting.
Human societies (social systems) are full of dynamic complexities and up to this point in history, most of the solutions humans came up with relied on linear and fragmented thinking, which led to quick-fix bandaid solutions that only address symptoms of the problem. Failing to identify and address root causes only makes things worse in the long term. The current climate crisis is a result of linear, fragmented thinking. For far too long, corporations and world leaders have blindly pursued economic growth and the power that comes from it while ignoring the pleas of indigenous people, climate activists, and environmental scientists to make decisions that are aligned with preserving environmental sustainability.
Enacting solutions to dynamically complex problems requires solutions rooted in systems thinking — solutions that reach the fundamental root cause of the issue and provide insights on how to design new systems that make current ones obsolete.
From the moment we were born, our parents made decisions for our lives that were motivated by their desire to help us navigate capitalism as easily and successfully as possible. That charge follows us through every phase of life and impacts everything that we do on a daily basis.
If you’ve been following my work for a while, I’m sure you’ve already begun to understand how capitalism could evolve from the systems and ideas of power-over, patriarchy, religion, and ownership. There are so many interconnections and interdependencies to explore…
Let’s start with how capitalism evolved.
An Economic system is a system of production, resource allocation and distribution of goods and services within a society or a given geographic area. The first economic system to evolve was nature…the earth’s ecosystem. Think about the ways that plants, animals, fish, bodies of water, and all the things that make up the natural world interact, coexist, allocate resources, etc. Humans were and still are a part of that natural system, and humans have created their own systems in addition to the natural system of the earth.
Prior to the agricultural revolution about 12,000 years ago, for about 290,000 years, homo sapiens lived in egalitarian nomadic bands consisting of dozens of people. Up to that point in our evolution, we relied on what nature provided to meet our basic needs (water, oxygen, food, shelter). We shared the production roles of hunter and gatherer, distributing what was collected from those efforts equitably. That was our natural economy.
The agricultural revolution resulted in food surplus and storage, which allowed humans to become sedentary and stationary for the first time. Farming led to the accumulation of resources for the first time in the form of crops. This sparked major population growth. As populations grew, human societies grew from nomadic bands of dozens of people to mostly sedentary tribes with hundreds of people.
The accumulation of resources along with population growth eventually gave rise to more complex economic systems, which included food production and division of labor. It also created the need for protection from other tribes as territories began to shrink. These changes also led to the evolution of power-over systems and the abandonment of egalitarianism. As we discussed in Theory of Indivisibility: How Did We Get Here? (Part 2), the system of power-over is the foundation of the dominant social, economic, and political systems in the United States.
To understand the evolution of capitalism, let’s take a look at the following Types of Societies Charts from “Guns, Germs, & Steel” by Jared Diamond:
As you can see from this chart, the smallest groups of people were bands, which used egalitarian decision-making. As populations grew due to the agricultural revolution, the number of bands became fewer as tribes, chiefdoms, and states emerged. When there were bands and tribes, there was no monopoly of force and conflicts were resolved between people informally. There was no bureaucracy in bands and small villages, and people mostly related to one another as kin. The more populations grew, the more centralized power became, until a small group of decision-makers, such as a council or a monarch, held most of the power over resources and laws.
Next we will look at how religion evolved to justify kleptocracy. In Guns, Germs, and Steel, Jared Diamond explains in detail how initially chiefdoms used religion to justify kleptocracy, and some states did as well, while others did not. As you can see on the table below, in bands and tribes food production and division of labor did not exist, and exchanges and control of the land, were all reciprocal. Everything was shared equally and there was no class division or slavery prior to the development of chiefdoms, which would later develop into states.
You’ll notice at the top of the second chart the mention of kleptocracy. Kleptocracy is a government with corrupt leaders who use their power to exploit the people and natural resources of their territory in order to expand personal wealth and political powers.
It’s important to note when looking at the charts above from Guns, Germs, and Steel that people in various places around the world developed and grew at different rates from bands to villages, to chiefdoms, and ultimately into states. In remote places today there are still egalitarian people who live in small hunter-gatherer bands and tribes. In Africa for example, many tribes did not take on more advanced economic systems until European colonization. Every continent and every culture has its own unique timeline. Dynamic complexity exists within all of this.
Our current social systems evolved from European culture. The world we live in now is a direct result of European colonization. In Europe, as populations continued to grow, monarchy reigned and feudalism evovled. Feudalism was a combination of legal, economic and military customs that flourished in medieval Europe between the 9th and 15th centuries. Broadly defined, it was a way of structuring society around relationships that were derived from the holding of land in exchange for service or labour.
Adam Smith, the 18th-century Scottish economist and philosopher known as the Father of Capitalism, used the term “feudal system” to describe a social and economic system defined by inherited social ranks, each of which possessed inherent social and economic privileges and obligations. In such a system wealth derived from agriculture, which was arranged not according to market forces but on the basis of customary labor services owed by peasants and indentured servants to land-owning nobles.
Karl Marx, the famed German philosopher, economist, political theorist, historian, and socialist revolutionary also used the term in the 19th century in his analysis of society’s economic and political development, describing feudalism (or more usually feudal society or the feudal mode of production) as the order coming before capitalism. For Marx, what defined feudalism was the power of the ruling class (the aristocracy) in their control of arable land, leading to a class society based upon the exploitation of the peasants who farm these lands, typically under serfdom and principally by means of labour, produce and rent.
This brings us to capitalism…
What Is Capitalism?
Capitalism is an economic system in which private individuals or businesses own capital goods. The production of goods and services is based on supply and demand in the general market rather than through central planning.
The purest form of capitalism is free market or laissez-faire capitalism. Here, private individuals are unrestrained. They may determine where to invest, what to produce or sell, and at which prices to exchange goods and services. The laissez-faire marketplace operates without checks or balances.
Today, most countries practice a mixed capitalist system that includes some degree of government regulation of business and ownership of select industries.
There have been many stages and forms of capitalism. Agrarian capitalism, sometimes known as market feudalism…was a transitional form between feudalism and capitalism, whereby market relations replaced some but not all feudal relations in a society.
The processes by which capitalism emerged, evolved, and spread are the subject of extensive research and debate among historians. Debates sometimes circle around how to bring substantive historical data to bear on key questions. Key parameters of this debate include:
- how far capitalism is a natural human behavior and how far it arises from specific historical circumstances
- whether its origins lie in towns and trade or in rural property relations
- the role of class conflict
- the role of the state
- the extent to which capitalism is a distinctively European innovation
- the relationship between European imperialism and capitalism
- whether technological change is a driver or merely an epiphenomenon of capitalism
- whether or not capitalism is the most beneficial way to organize human societies.
The origins of capitalism have been much debated (and the results of such debates depend partly on how capitalism is defined). The traditional account, originating in classical eighteenth-century liberal economic thought and still often articulated, is the “commercialization model”. This model proposes that capitalism finds its origins in trade. Since evidence for trade is found even in palaeolithic culture, capitalism is then understood as natural to human societies. This account sees current-day capitalism as a continuation of trade, arising when natural entrepreneurialism was freed from the constraints of feudalism. The commercialization model traces modern-day capitalism back to early forms of merchant capitalism practiced in Western Europe during the Middle Ages.
By the beginning of the 21st century, capitalism had become the pervasive economic system worldwide. There are many people who champion capitalism as the best economic system for growth and freedom, while others argue that the growth that capitalism creates is responsible for perpetuating social and economic inequality as well as the destruction of the environment.
We’ll explore these perspectives and more in my next post, Theory of Indivisibility: Current Complexities of Capitalism…
I love y’all.
Peace,
Dr. Sundiata Soon-Jahta
2022. Podcast brought into written form by Ray Lightheart
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References and Resources
Websites:
https://en.wikipedia.org/wiki/Feudalism
https://en.wikipedia.org/wiki/History_of_capitalism
https://www.investopedia.com/terms/c/capitalism.asp
Charts:
From “Guns, Germs, & Steel” by Jared Diamond
