Capital without capitalism?

21 January 2023

Review: Michael Sonenscher, ‘Capitalism: The Story behind the Word’, (Princeton University Press, 2022)


Before what we now call ‘capitalism’, there were commercial societies founded upon the division of labour, and if we ever move beyond capitalism, the division of labour will, in all likelihood, outlive it. This, in short, is the central argument made by Michael Sonenscher’s brilliant new book Capitalism: The Story Behind the Word, which traces the gradual emergence of the idea of ‘capitalism’ in the 18th and 19th centuries and its complex relationship with the older notion of ‘commercial society’. Or, as the author puts it, the book sets out “to describe how the many heterogeneous components of the concept of capitalism came to be crystallised as a single word.”


In other words, Sonenscher’s book seeks to understand how the idea known as ‘capitalism’, traditionally used to denote the concentration of capital – not only money, but also land, machinery, factories, and other forms of property – in private hands, came to consume the idea of a ‘commercial society’. In fact, it was commercial society (a concept largely drawn from Adam Smith) which historically denoted a society based upon a division of labour into specialised fields and competition in an economy based on a more or less free market in labour and goods, encapsulating much of what we now call capitalism. That both should fall under the latter label is a relatively late product of the 19th century.


If this might seem like an exercise in splitting hairs, as Sonenscher lucidly demonstrates, recognising the distinction between capitalism and commercial society is actually a necessary step for any serious analysis of the economic determinants of modern politics. Many of the problems associated with ‘capitalism’ in contemporary political debates, after all, have less to do with the private ownership of capital than with the consequences of the division of labour. It is, one might also note, a useful corrective to the frequent confounding together of these two notions in much recent work on the intellectual history of Political Economy and political thought more broadly.


But if capitalism and commercial society refer to quite distinct – if related and overlapping – phenomena how did the two become confused? This is the story which takes up the first part of Sonenscher’s essay and it is one which he tells with aplomb.


Contrary to the self-hagiography of the modern field of economics and the political exponents of capitalism, the concept did not originate with Adam Smith. The word ‘capitalism’ does not appear in his great work The Wealth of Nations (1776) which instead presented a theory of commercial society, a society based upon exchange and the purchase and sale of labour and its fruits. In such a society, we all “become in some measure a merchant” as Smith put it, whether what we are selling is goods or services or labour.


This account of the birth of commercial society was not, as Sonenscher shows, particularly concerned with the concepts of ‘capital’ or ‘capitalism’ as they had emerged in the 18th century. Unlike ‘commercial society’ which is a theory of social organisation, ‘capitalism’ is a theory of property which arose from a primarily French debate about public debt, state credit, and war finance in the century of continent-wide warfare prior to the French Revolution, a debate which only occasionally intersected with debates about commercial society. Nor did thinking about capital and capitalists require a debate on markets because, as Sonenscher acutely observes, the initial accumulation of capital had less to do with free exchange and finance than forceable extraction and military conquest.


It was only in the aftermath of the French Revolution that these two concepts came to be drawn together, not as part of a leftist critique of capitalism, but as a contribution to counter-revolutionary royalist debates about public credit, political reform, and what was then called ‘the social question’. Capital, as one royalist tract observed, had become a “sovereign of sovereigns, who cannot make war without it, nor make peace with it”, and with the ascendancy of capitalism had come the political ascendancy of the capitalists; merchants and financiers with money to lend the state and the influence over political power which it could purchase.


For these royalists, commercial and political society represented two competing spheres of human activity, kept separate in any properly constituted society. But as counterrevolutionary writers like Alphonse de Beauchamp, the Comte d’Allonville and the Marquis de Villeneuve observed, the ascent of money and the monied had corrupted this arrangement and had brought on the reign of commerce through the influence of its fruits – capital – over politics. Under the guise of a new society founded upon legal equality and the rights of man, the agents of this transformation – who we now call the bourgeoisie – had done nothing but inaugurate the reign of private self-interest over the common and public good.


Thus, Villeneuve argued, “capitalism, that seductive and dangerous serpent” spelled the ruin of France, as the endless accumulation of public debt to finance war abroad and the amassing of private wealth by unproductive finance rather than productive agriculture and industry at home brought about social crisis with no means to remedy it.


Yet by drawing together capitalism and the social question, these royalist thinkers nonetheless unknowingly helped to birth the repertoire of modern left-wing critical terminology. It was their novel conception of the relation between capitalism and commercial society that laid the conceptual terrain for Louis Blanc’s rather enigmatic exclamation “Cry out long live capital! Long may we applaud it and long may we go on to attack capitalism, its mortal enemy with even more intensity” in the 9thedition of his pamphlet Organisation du Travail, published in 1850, an exclamation once identified as the origin of the word ‘capitalism’.


Capital, Blanc argued, could be turned against the set of social relations and inequalities which he identified with the unequal distribution of property and capitalism. This ‘golden goose’ could, instead, serve as the foundation of a universal right to work and an economy founded upon common labour, if only it’s fruits – capital – were owned publicly, or socially.


Yet as the poet and politician Alphonse de Lamartine argued, this solution appeared to be hemmed in by the problem of the division of labour. Even if capital were socialised, the need for some to labour in less desirable occupations than others would not be, and nor would the relative profitability or unprofitability of some occupations. At its worst, Lamartine argued, a ‘right to work’ funded and enforced by a centralised could appear rather like the slavery of ordinary labourers to a non-labouring managerial caste. Indeed, although Sonenscher does not quote it, the now infamous pamphlet ‘Le Droit à la paresse’, written by Marx’s son in law Paul Lafargue, would make a similar observation, pouring scorn upon those who “proclaim as a revolution principle the Right to Work. Shame to the French proletariat! Only slaves would have been capable of such baseness.” For Lafargue, like Lamartine, the abolition of capital did not represent all too fundamental a transformation of the proletarian condition if it was accompanied by a continued obligation, dressed up now as a right they had won, to toil.  


Lamartine and Lafargue’s warning went unheeded. By the time that Marx wrote his magnum opus Capital, capitalism and the division of labour had already come to be jumbled up together. Today one would be hard-pressed to find commercial society disaggregated from one another outside academic discussion. ‘Capitalism’ (alongside newer concepts like ‘Late Capitalism’ and ‘Neoliberalism’) now routinely takes the blame for many problems which have little to do with inequality of capital ownership. Though these problems, including alienation, hierarchy, unchosen dependence, social atomisation, and even the necessary ardour of work, are all too real, none of them would necessarily be resolved by a redistribution of property.


What this history shows is that many of the problems we now associate with capitalism in fact have little to do with the kind of social organisation implied by a more literal understanding of the term. The inequalities generated by the differentiation of labour – either between the skilled and unskilled, between town and country, or even simply between different occupations – as well as the social atomisation it produces, and the destruction of traditional communities, ways of life, and professions are not really determined by the distribution of capital.


As a consequence, Sonenscher observes:

The real problem, as should now be clear, was not capital or capitalism, but the division of labour. There were many possible alternatives to capitalism, some more viable than others, but the range of alternatives to the division of labour is not all that easy to see. In part this is because the solutions to the two problems are different.

Many of the concerns raised by capitalism’s modern critics would not be resolved if only capital was held publicly, or nationally, or socially, because they do not stem from capitalism in the literal sense, but from the bundle of concepts we now refer to by that name taken in toto. The question, then, is what can be done not about capitalism, but about the division of labour.


This question structures the second half of Sonenscher’s book, which functions not only as an analysis of a series of proposals to mitigate the worst effects of the division of labour, but also as a characteristically original account of the works of Marx, Smith, Hegel, Ricardo, and Lorenz von Stein. Walk on parts for Rousseau, Sieyès, Kant, and a host of more minor thinkers form an admirable supporting intellectual cast and help link this book to Sonenscher’s earlier writings which have focused on the French Revolution and the intellectual history of the 18th century.


In order to show what it might look like to move beyond simply reforming how capital is held, to imagining a society without the negative effects of the division of labour, Sonenscher returns to a contrast between Marx, the premier theorist of capitalism, and Smith the premier theorist of commercial society.


Marx, he argues, was never particularly concerned with abolishing the division of labour. Instead, Marxist socialism and communism reified the division of labour and the primacy of work to human life against capitalism, envisioning a new order in which capital would be held in a “negative community of goods”. All the resources of the earth would belong to the whole of mankind and individual ‘property’ would consist only in temporary use. Capitalism would vanish, but the division of labour and commercial society would live on in a new form.


But this, Sonenscher contends, would not be a much more equal world, because the hierarchies generated by the division of labour would remain and inequalities of skill, talent, or industry could even widen as those unable to give found themselves marginalised by a community founded on labour. For Marx, Sonenscher argues, this was not much of a concern but it left unanswered the question of how we might get on transforming the more deeply rooted problems associated with a commercial society.


Instead, Sonenscher argues, in thinking about how to tackle the problems caused by the division of labour, we find a better answer in the distinction first drawn by Smith between the demands of ‘utility’ (self-interest) and ‘justice’ (morality), which provided the foundation for many later attempts to tackle the problems generated by commercial society. Although Smith never produced the political treatise which might have reconciled this distinction, Sonenscher argues that his analysis provided the basis for a later attempt to do so, found in the work of Hegel.


Hegel’s famous distinction between Civil Society, the realm of private social and economic relationships, and the state, the realm of formal legal position of citizenship and the apparatus of political rule, was, Sonenscher argues, in a certain sense an adaptation of Smith’s distinction between utility and justice, or at least an approach to the same problem. But Hegel, who was a close and devoted reader of Smith, also showed how the division of labour could be brought to heel without its abolition, allowing a harmonious society to be established with commerce as its basis. For Hegel, these two spheres could be reconciled because the state bureaucracy, which executed the wishes of the political realm within the private one, funded by a mixture of taxation and public debt, enjoyed a liminal existence between the two and could, perhaps, use public resources to offset the tensions in the private sphere.


Yet as Sonenscher demonstrates, if Hegel was the first to conceptualise the bridge between the market and the state it would take other thinkers, particularly David Ricardo and Lorenz von Stein, to explain how this could be done. In Ricardo’s case, this involved understanding how the unbalanced economies generated by an international division of labour could be counteracted through a fiscal state which redistributed the gains of financially rewarding but socially unproductive industries like the production of luxuries to socially necessary but unprofitable activities like agriculture.


Stein, Sonenscher argues, adapted this insight to the domestic economy more broadly, seeking to demonstrate how something resembling Hegel’s administrative state could mitigate the inequality of rewards engendered by the division of labour and realise the material as well as legal equality of citizens. Capital would now become the basis of a ‘social democracy’, and could neutralise the tumultuous forces of the market, generating a more equal society without abolishing ‘capitalism’ or the division of labour. To borrow a common refrain from the economic historiography of the 20th century, the ‘warfare’ state would thus become a ‘welfare’ state, and capital, once the most important sinew of military power, would underwrite equality, peace, and prosperity rather than inequality, warfare, and ruin.


In reconceptualising the Hegelian dualism between state and society as a complement to and development of Smith’s distinction between utility and justice Sonenscher makes clear the extent of the connections between this book and his earlier works, particularly Before the Deluge (2003), Sans-Culottes (2008) and Jean-Jacques Rousseau (2020). As Sonenscher has shown in these works, many of the now seemingly unrelated conceptual dyads which emerged in the 18th and 19th centuries – including positive and negative liberty, government and sovereignty, the state and civil society, and politics and the division of labour – were in fact responses to the same problems. They were, he argues, all attempts to reconcile the competing visions of human life generated by economic activity and formal legal and political arrangements and to adapt the politics of self-government and equal citizenship to the economic conditions of a complex commercial society. Capitalism draws these concerns forwards into the 19th century and begins to signal their implications for modern politics.


For Sonenscher, it is this attempt which has defined much of politics in the ‘modern’ world. As he has shown over the course of his career, the most significant transformation of the 18th century was not the political crisis of the French Revolution, but the emergence of commercial society, both giving rise to the ‘Freedom of the Moderns’ and ruling out any possibility of returning to the civic equality characteristic of the ‘Freedom of the Ancients’. The task of modern politics, therefore, is not merely to reform, justify, or abolish the present structure of capital ownership, but the far more serious project of thinking about how we might live with the division of labour and if any alternatives to it are possible.


In pursuit of this aim, Sonenscher is perhaps too quick to dismiss Marx as basically unconcerned with abolishing or reforming the division of labour. In fact, Marx’s engagement with this problem was long-lasting and complex. In a now much read passage in the ‘Paris Manuscripts’, for example, the young Marx had suggested that man’s alienation from his ‘Species Being’ might finally be overcome if man could surmount the division of labour. Man would be neither hunter, nor fisherman, nor critic, but simply a human being who hunted, fished, or criticised as they wished, without being reduced to a mere cog in the machine of production.


But for the later Marx, it was clear that the abolition of the division of labour was a chimera, which would spell the destruction of the genuine progress made by the forward march of capitalism, for little gain. Labour, Marx recognised, was inevitable, and the division of labour constituted the perfection of humanity’s productive capacities.


Instead in his famous manifesto Marx, like Stein, suggested that a national system of public credit administered through a socialised banking system could gradually abolish the capitalist system by enabling workers or the state to socialise or nationalise production, whilst reducing the inequalities resulting from the division of labour – particularly those between town and country. Public credit and the fiscal state would enable capital to be turned against what Marx knew as capitalism, allowing the benefits of commercial society to be preserved whilst rectifying its worst features. In other words, Marx argued, the problem with the division of labour was that unlike capitalism it could not be jettisoned without also jettisoning modernity as such: this is also the central insight of Sonenscher’s book.


If the division of labour is so intimately bound up with the fruits of modern society, we might ask ourselves why anyone would want to abandon it or elements of it, and this book does not fully elaborate the nature of the problems we might associate with commercial society. Indeed, it might even be imagined that the increased mutual dependence of human beings in a complex economy would lead to a social harmony mirroring the international peace sometimes assumed to result from increased global trade, underscored by once unimaginable prosperity resulting from greater economic efficiency.


However, as the 19th century American social reformer Jane Addams – who is not quoted in this book – observed, although “Theoretically, ‘the division of labour’ makes men more interdependent and human by drawing them into a unity of purpose… the mere mechanical fact of interdependence amounts to nothing”. The interdependence which arises from a complex division of labour, in other words, does generate strong bonds of community, but reduces human society to a vast machine of production and consumption composed of increasingly isolated and replaceable parts.


But this interdependence and the alienation which membership of a vast community might cause are also inevitable. It is, one hopes, not too glib to observe that what intellectual historians have often termed Commercial Society, or in the Hegelian mode Civil Society, is not very different from the meaning ascribed in ordinary language to the unmodified concept of society itself. The question of how to live with the division of labour is, therefore, also the question of how we can live together in a complex society, whose diversity of social roles and political positions will naturally lead to certain inequalities, injustices, and resentments arising, and of how we can reconcile this state of affairs with the formal equality demanded by our political aspirations.


This is not a problem which we can resolve by returning to a fantastical pre-social state or via a retreat into primitive communism. Instead, as Sonenscher observes, like Rousseau, we must recognise that the chains we have forged for ourselves are, by and large, here to stay: our only choice is to find some way to live comfortably, chained together as we are. It is Michael Sonenscher’s very significant contribution, both as a historian and a political theorist, to demonstrate that this is a far more elementary and long-standing problem than that of the private ownership of capital.


Image credit: Capitalism: the Story Behind the Word [cover] (Princeton University Press), Fair Use.

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