Beckert’s history of capitalism: Why the past tells us little about how long this economic order will endure

In the self-interest of this claim, its length is best left undisclosed.

It kicks off with a jaw-dropper: the 1639 trial in America of Robert Keayne, a trader shamed for ‘false principles’ like it being fine for someone to “sell as dear as he can and buy as cheap as he can” and take advantage of either “his own skill or ability” or “another’s ignorance or necessity.”

Adam Smith’s thesis of an ‘invisible hand’ blending our interests to serve our collective well-being came much later, in 1776, though capitalism as an economic order is characterized not just by a free market, but also by the right to private property, contract enforcement and other props.

The charm of Beckert’s account of endless capital self-creation is that it offers us a global view. After all, its story not only spans a millennium, it girdles the globe.

Aptly, thus, this book takes us back to trade across the high seas around India about nine centuries ago. Capitalists thrived, Beckert notes, but capitalism did not.

The latter took hold only after Europe stormed in with firepower to control trade routes, its merchants forged alliances with states, social reproach eased and key enablers arose, such as limited liability and shares, central banks and war-funding.

Yes, the East India Company features with its colonial exploits, from its opium-for-tea game with China to forced indigo farming in Bengal. The latter was not quite as horrific as slavery in the West, but the worldwide warts of capitalism’s rise serve to support Beckert’s big point that it was “extraordinarily statist.”

Its big catalyst, though, was the Industrial Revolution, an “offspring” that harnessed energy and innovation to boost economic growth—one reason why we celebrate it. This book does not dismiss these gains, but its dot-plot portrays capitalism as just another construct, fallible and wobbly.

It refers to the free market as a mere “figment of scholars’ and ideologues’ imaginations” whose claim to self-correction was taken apart in the 1930s by Keynes, who showed how savings and investment could stay out of whack without a state rescue.

India finds place in this book’s 20th century arc too, thanks to the 1944 Bombay Plan pitch by top industrialists for a ‘mixed economy’ and our post-1947 quest for self-reliance. This wide-angle lookback plugs important gaps. It places capitalism under an academic lens that zooms in and out to enrich our view.

It is timely too, as neoliberal calls to let the free market allot capital with full liberty go limp in the face of China’s centrally led rise and AI’s rogue risks. Yet, this volume fails to engage in any depth with market theory.

Beckert could have taken up a case study like India’s post-1991 reform thrust away from autarkic statism. In general, since markets function as ears to ground reality, capital allocations driven by the many minds that make up market forces are likely to beat the results of a few people making choices.

Sure, such efficiency does not always work out, capital concentration can get in the way and examples do exist of state-led prosperity.

Even so, while we must squash the risk of inequality stalling India’s emergence, a bet on a remixed economy with more space for competitive market forces is likely to pay off for us. Market fallibility doesn’t change that.