As the year draws to a close, a formidable new book offers a deep dive into the economic system that shapes our world. Harvard historian Sven Beckert's Capitalism: A Global History presents a sweeping, millennium-long narrative that challenges conventional understanding and places India squarely within its global arc. While a compelling read, the work has drawn attention for its perceived stumble on a crucial element: market theory.
A Global Journey Starting from Indian Shores
Beckert's account distinguishes itself by offering a genuinely global perspective. The narrative does not begin in the mills of England or the trading houses of Amsterdam. Aptly, it takes us back roughly nine centuries to the bustling trade across the high seas around India. The book meticulously documents how capitalists thrived in these early networks, yet argues that capitalism as a dominant economic order had not yet taken hold.
According to Beckert, the transformation required a confluence of forces. Europe's arrival with superior firepower to control major trade routes was pivotal. This was followed by merchants forging powerful alliances with states, a gradual easing of social reproach against profit-seeking, and the emergence of key institutional enablers. These enablers included concepts like limited liability and shares, the establishment of central banks, and sophisticated systems for funding wars. The narrative does not shy away from colonialism's brutal role, detailing the East India Company's exploits, from the opium-for-tea trade with China to forced indigo cultivation in Bengal.
The Statist Argument and the Industrial Catalyst
Through these worldwide examples, Beckert builds a central thesis: capitalism's rise was "extraordinarily statist," heavily reliant on state power and intervention rather than emerging organically from free markets. He describes the free market itself as a "figment of scholars' and ideologues' imaginations," a concept whose supposed self-correcting mechanism was critically dismantled by John Maynard Keynes in the 1930s.
The book identifies the Industrial Revolution as the system's great catalyst, an "offspring" that harnessed energy and innovation to unlock unprecedented economic growth. While acknowledging these gains, Beckert's overarching plot portrays capitalism as a human construct—fallible, wobbly, and not an inevitable or permanent fixture of human society.
India's Place in the 20th Century and a Theory Gap
India features prominently in the modern section of this history. Beckert highlights the 1944 Bombay Plan, where leading Indian industrialists proposed a 'mixed economy' model, and the nation's post-1947 drive for self-reliance. This wide-angle look fills important gaps, using an academic lens that zooms from the global to the specific.
The timing of the book is prescient, as neoliberal faith in unfettered markets wanes in the face of China's state-led ascent and the unpredictable risks posed by Artificial Intelligence. However, critics note the volume's significant shortcoming: it fails to engage deeply with market theory. For instance, a case study on India's post-1991 economic reforms, which marked a decisive shift away from autarkic statism, could have provided crucial balance.
Proponents of markets argue that, despite imperfections, they act as collective sensing mechanisms. Allocations driven by the dispersed knowledge of millions often outperform choices made by a central few, driving efficiency. While state-led prosperity exists and capital concentration poses real risks, many economists contend that for an emerging India, a remixed economy with greater space for competitive market forces remains the most promising path forward. Squashing inequality is imperative, but market fallibility does not negate their fundamental role in discovery and growth.
Beckert's Capitalism: A Global History is undeniably a worthy and brave year-end read. It forces a re-examination of the system's violent and state-centric origins, from the Indian Ocean's ancient trade lanes to today's complex global order. Yet, by sidelining the theoretical framework that explains market coordination, it leaves readers with a powerful history but an incomplete picture of the economic debates that will define our future.
