The relationship between power and the monetary
economy has fascinated historians, particulary with reference to
the rise and fall of capitalist states. Capitalism has been
potentiallyvisible since the dawn of history, and that it
has developed in associations with cycles of political power down
the ages. Far in advance of the industrial revolution, there were
signs announcing the coming of capitalism: the rise of the towns
and of trade, the emergence of a labour market, the increasing
density of society, the spread of the use of money, the rise in
output, the expansion of long-distance trade or to put it another
way the international market.
When, in the first century AD, India penetrated
the islands of the East Indies; when Rome held an area even greater
than the Mediterranean in her power; when China invented paper
money in the ninth century; when the West reconquered the
Mediterranean between the eleventh and thirteenth century; when a
world market began to take shape in the sixteenth century, the
'biography of capital' was starting to be written in the secular
trend. 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 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, art and architecture - was already
deployed in thirteenth- century Florence, in seventeenth-century
Amsterdam, in London before the eighteenth century.
Two centuries after its beginnings, European
captialism brought great prosperity to the cluster of
North Italian towns centred on the Venetian Republic. Here
was the coincidental rebirth of much that the Greeks and the Romans
had known, but which mediaevalism had forgotten or ignored.
Rennaisance, or "rebirth" is too simple a word to describe a
movement that discovered ways of living, seeing and thinking that
Greek and Roman civilization had never envisaged.
What happened, though it was of massive
importance, happened gradually. The slow emergence, first of all in
Italy, later spreading northward across the Alps and westward to
Southern France and Spain, of a new attitude to the art of living
manifested itself in all the arts, but in none more strikingly than
in painting and sculpture. However, this was only one expression of
the spirit of an observant, enquiring, intelligent people, deeply
concerned with the behaviour and sensations of men and women and
with the appearance of the material world in which they live.
It is undoubtedly the case that in the early
nineteenth century, the coming of machines made industrial
production a high-profit sector and capitalism went over to it on a
massive scale. But it was by no means confined to this sector. When
the first fantastic profits of the cotton boom in Britain fell, in
the face of competition, to 2 or 3%, the accumulated capital was
diverted to other industries, steel and railways for instance. To
an even greater extent there was a return to finance capitalism, to
banking, to more speculation than ever on the Stock Exchange, to
major international trade, to the profits derived from exploitation
of the colonies, to government loans etc. Power was in the hands of
a few families who maintained economic power because they had
little or no specialization in production systems. For example, the
Wendel family in France were steelmasters, bankers, mill- owners in
the Vosges and suppliers of military equipment for the Algiers
expedition in 1830. In general, when money could no longer be made
from local natural resources, capital moved on leaving a much
changed environment.
The theory of prices was worked out in about
1929- 32 by economists looking at the contemporary situation.
Historians followed suit, and thanks to their work, it gradually
became possible to go back in time, producing a series of ideas,
evidence and a new language. The overall movement was divided up
into particular economic movements, each being given its own code,
period and, if possible, significance.
Seasonal shifts, which can still play a role even
today are usually obscured in the complicated economies of the
present day. But they were not always so invisible. Poor harvests
or food shortages could in a few months create inflation equivalent
to the entire sixteenth-century price revolution! The poor were
then obliged to live on as little as possible until the next
harvest.
Other movements, or as they tend to be called
cycles, imply a much longer time-span. In order to
distinguish between them, they have been dubbed with the names of
certain economists: thus a Kitchin is a short cycle of three
or four years; the Juglar, or intra-decade cycle lasts from
6 to 8 years; a Labrousse (also known as an
intercycle or inter-decade cycle) can last 10 or 12
years or more: this is the combination of the latter phase of a
Juglar (three or four years) and of a whole Juglar which fails to
take off and thereafter remains at a low level: a half-Juglar plus
a whole Juglar in other words. The classic example of the
Labrousse is the intercycle which brought depression and
stagnation to France between 1778 and 1791 on the eve of the
Revolution, which it must surely have helped to unleash. The
hypercycle or Kuznets, a double Juglar, lasts about twenty
years, while a Kondratiefspreads over a half-century or
more: one Kondratieff began in 1791, reached its peak in 1817 and
then went downhill until 1851, lasting almost until the Second
Empire in France (1852-1870).
All these cycles are of course contemporaneous
with each other, synchronic: they coexist, overlap and intensify or
diminish by their own movements the general trend. But it is
technically easy to divide the general trend into particular
movements, and to eliminate one group or another, the better to
study an individual movement.