Capitalism and Its Critics, A History: From the Industrial Revolution to AI, John Cassidy, c. 2025. Incredibly good book.

Capitalism and Its Critics, A History: From the Industrial Revolution to AI, John Cassidy, c. 2025. Incredibly good book. 

Highly recommended. 

 Introduction

Mercantile capitalism vs industrial capitalism 

Chapter 1: William Bolts and the East India Company

Cromford Mill, 1771 -- the beginning of the Industrial Revolution.

East India Company founded December 31, 1600. 

• Williams Shakespeare: 1564 - 1616
• Sir Henry Neville, died, 1615
• Between 1598 and 1602, Shakespeare wrote several major plays, including comedies like Much Ado About Nothing (1598), As You Like It (1599), Twelfth Night (1601), and the comedy-problem play All's Well That Ends Well (1601-1602), along with the great tragedy Hamlet (1599-1601) and histories like Henry V (1599) and Henry IV, Part 2 (1598) 

1776: William Bolts, East India Company, US Revolutionary War

Chapter 2: Adam Smith on Colonial Capitalism and Slavery

A really, really good chapter.

Adam Smith's The Wealth of Nations, published in 1776, the year the thirteen colonies declared their independence. 

Sugar, slavery and Adam Smith 

mercantile capitalism vs industrial capitalism 

Mercantile capitalism focused on trade, controlling routes, and accumulating wealth through buying cheap and selling dear (arbitrage), often with state support for monopolies, while industrial capitalism shifted focus to mass production, mechanization, factories, wage labor, and profit from selling manufactured goods, emphasizing private enterprise and reinvesting in production efficiency. The core difference is trade vs. production, moving wealth from merchants and states to industrialists and private owners of capital.  

Mercantile Capitalism (c. 15th–18th Century)  

• Focus: Commerce, trade routes, colonies, accumulating bullion (gold/silver). 
• Wealth Source: Profit from buying and selling goods (arbitrage), tariffs, and monopolies. 
• Role of State: Strong government intervention, protectionism, granting monopolies (e.g., East India Company). 
• Labor: Often relied on coerced labor (slavery) in colonies. 
• Key Activity: Merchants controlled capital and distribution.  

Industrial Capitalism (c. Late 18th–19th Century)  

• Focus: Manufacturing, mechanization, factory system, mass production. 
• Wealth Source: Profit from selling mass-produced goods, reinvesting in technology. 
• Role of State: Decreased intervention (compared to mercantilism), favoring private initiative and open markets. 
• Labor: Emergence of wage labor and industrial working class. 
• Key Activity: Industrialists owned means of production (factories) and drove output.  

Key Transition

• The shift involved capital moving from circulation (trade) to production, driven by technological innovation (Industrial Revolution) and new social structures, making production and industrial growth the primary engines of wealth, replacing state-backed trade monopolies.  

 

Chapter 3: The logic of the Luddites

Brontë country, River Spen at Liversedge in West Yorkshire; April 12, 1812. 

 

Chapter 4: William Thompson's Utilitarian Socialism

Born, 1775, Irish port of Cork. Manchester cotton mills, abuse of women and children. 

 

Chapter 5: Anna Wheeler and the Forgotten Half of Humanity

Begins with the story of William Thompson, working on his first book in the early 1820s, met anna Wheeler, a learned and well-connected Irish widow.  

 

Chapter 6: Flora Tristan and the Universal Workers' Union

1838, 30 years old, writer living in Paris; visited London with Anna Wheeler.  

 

Chapter 7: Thomas Carlyle on Mammon and the Cash Nexus

Born in the Lowlands of Scotland. 

Chapter 8: Friedrich Engels and The Communist Manifesto

1840, Manchester was Britain's second largest city; adjoining town of Salford. 

1842: Friedrich Engels, 22 year old, arrived in Salford to work at a cotton thread facgtory that his father co-owned.  

Chapter 9: Karl Marx's Capitalist Laws of Motion

August 24, 1849, 31-y/o Karl Marx traveled from Paris to London, where he was live for the rest of his life.

 

Chapter 10: Henry George's Moral Crusade

 Begins with the story of Leland Stanford, a cofounder of the Central Pacific Railroad, tapped a symbolic golden spike into a final piece of track that lnked his firm's line running east from Sacramento to the Union Pacific Railroad's line running west fomr Omaha; Promontory Summit, Utah, about 70 miles northwest of Salt Lake City. 

 

Chapter 11: Thorstein Veblen and the Captains of Industry

About the time of Mark Twain. Coined a number of economic terms:

• "conspicuous consumption"
• "the leisure class"  

 

Chapter 12: John Hobson's theory of Imperialism

1899 

 

Chapter 13: Rosa Luxembourg on Capitalism, Colonialism, and War

Born in 1871, Poland. Russian agitator during the revolution that saw the assassination of Tsar Alexander II in March, 1881.  

 

Chapter 14: Nikolai Kondraliev and the Dynamics of Capitalist

1917: St Petersburg; Tsar Nicholas II abdicated. Party of Socialist Revolutionaries -- unlike Stalin ... said economic vision of the future was based on expanding Russia's self-governing village communities of peasant households. May, 1917, Viktor Chernov, a veteran SR, became minister of agriculture ... one of Chernov's advisers was a young economist named Nikolai Dmitrievich Kondratiev.  

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Chapter 15: John Maynard Keynes's Blueprint for Managed Capitalism
Preparatory Remarks

Saved capitalism by offering a third way: managed capitalism with a social safety net. 

Nobel Prize: nominated three times (1922, 1923, 1924), never won. 

Five bullets, AI following my prompt:

• Warned that punitive post-WWI peace terms would economically destabilize Europe (1919).
• Pro-capitalist, but rejected laissez-faire dogma; supported state intervention in crises.
• Supported strong central banking, but warned monetary policy alone can fail in deep slumps.
• Fought the gold standard as economically destructive and morally wrong in mass unemployment.
• Supported free trade and global integration—pragmatically, not ideologically.

John Maynard Keynes not once mentioned the Spanish flu in his landmark book despite being written during the world's greatest pandemic ever.

Notably, Laura Spinney, despite name-dropping dozens of famous names, never mentions Keynes in her book. Not once. I've read the book twice, I've checked the index, and to confirm, I asked a chatbot -- the chatbot seemed a bit confused but in the end confirmed what I have just writte.

From Chapter 15 of John Cassidy's book on Keynes:

"The more troublous the times, the worse does a laissez-faire system work."

It's a twenty-page chapter but knowing these few data points below pretty much tells me all I need to know to get started:

• the Spanish flu began in March, 1918
• WWI ended November 18, 1918
• the Paris Peace Conference began exactly two months later, January 18, 1919
• John Maynard Keynes was a British representative but left early in protest 
• upset how the Allied Powers were determined to financially destroy Germany
• the Spanish flu was over almost exactly two years after it started, also in March 1920
• the US capitalists became ungodly rich off World War I 
• selling and financing armaments during the war; and,
• funding and financing the recovery following the war;
• advocated for removing the gold standard to back the country's currency;
• position directly led to the importance of a "central bank" and "the Federal reserve"
• a capitalist but worried about laissez-faire;
• as a liberal internationalist, Keynes supported free trade and global economic integration
• by the time of his death in 1946, his name would be attached to an economic policy framework that ushered in Western capitalism's most successful epoch and prompted even some of its most ardent antagonists to recalibrate their views 

 

Famous essays / books:

• 1919: landmark work; out of frustration of the Paris Peace Conference / Versailles Treaty ending WWI
• The Economic Consequences Of Peace (badly named: should have been called, The Economic Consequences of Boneheaded Proposals by the Victors of WWI
• 1923: A Tract on Monetary Reform: described the gold standard as a "barbarous relic" 
• 1926: The End of Laissez-Faire, published by the Hogarth Press 
• 1930 essay: "Economic Possibilities for Our Grandchildren" -- looked out a full century; said "we" could be, on average, eight times better from an economic sense; capital accumulation and productivity growth;
•  1936: The General Theory of Employment, Interest and Money. 

 

In other words, for the western countries, WWI and the Spanish flu would have been similar to fighting a major war in the Mideast at the same time as the Covid-19 outbreak. I'm not sure it could have been done; certainly the outcome would have been different.

You know, I used to think lawyers were "bad" (devious). I'm beginning to think the bankers weren't far behind. And, in some respects, perhaps worse. But again, I digress.

Now, to get started on Chapter 15. 

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Chapter 15: John Maynard Keynes's Blueprint for Managed Capitalism
20 Pages

Is this one of the most important chapters in the book? 

"The more troublous the time, the worse does a laissez-faire system work."

JMK has shot to international fame with his 1919 polemic The Economic Consequences of the Peace.  The book savaged the postwar Treaty of Versailles, in which the victors in the Great War, at the behest of France and Belgium, imposed heavy reparations on Germany. In his role as an economic adviser to the British Treasury, Keynes had been part of the British delegation at Versailled, but he left the conference early in protest at the punitive nature of the treaty.  

How interesting: 1919. Written during the Spanish Flu, 1918. Amazing. I have to go back and see what Laura Spinney had to say about Keynes. Link here. It will be interesting whether John Cassidy mentions Spanish flu in this chapter!

"Spanish Flu" is not found in the index. That does not bode well. 

 

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Chapter 16: Karl Polanyi's Warnings About Capitalism and Democracy

Vienna, Budapest 

 

Chapter 17: Two Skeptics of Keynesianism: Paul Sweezy and Michal Kalecki

The three decades after WWII -- the Golden Age of industrial capitalism.

Again, "Keynesian managed capitalism."

Keynesian economics, named after John Maynard Keynes, argues that government intervention through fiscal and monetary policies can stabilize economies, especially during downturns, by managing aggregate demand (total spending) to combat recessions and control inflation, using tools like public spending and interest rates to boost employment and output when private demand falters. Key ideas include that demand drives output, economies can get stuck below full employment due to insufficient spending, and government spending can "prime the pump" to boost the economy, as seen during the New Deal era.

Cleanest opposite to Keynesian economics is the Austrian School of Economics with Monetarism as teh most influential practical counterweight in policy. -- ChatGPT.

Monetarism is an economic theory, championed by Milton Friedman, that asserts the money supply is the primary driver of economic growth and inflation, arguing that central banks should control its growth rate for stable prices, not discretionary intervention, as it posits markets are inherently stable and government involvement often causes instability. Key to monetarism is the Quantity Theory of Money (M x V = P x Q_, which links money supply (M) and velocity (V) to price levels (P) and output (Q). 

 

 

 

Chapter 18: Joan Robinson and the "Bastard Keynesians"

1921, scholarship to Girton College, Cambridge, the first women's Oxbridge college where she switched to economics -- Joan Violet Maurice, b. 1903. 

 

Chapter 19: J. C. Kumarappa and the Economics of Permanence

India, 1929; J. C. Kumarappa, 37 years old; Mumbai (Bombay at the time) 

 

Chapter20: Eric Williams on Slavery and Capitalism

1935, Eric Williams, Trinidad, the Caribbean 

 

 

Chapter 21: The Rise and Fall of Dependency Theory in Latin America 
-- "The periphery of the economic system."

 

Chapter 22: Milton Friedman and the Rise of Neoliberalism
"Shock Treatment"

"... the Keynesian model of managed capitalism was still ascendant in Western countries..." -- April 23, 1964. 

Read and understand Keynes before moving to Friedman.

Opening paragraph:

With moderate Keynesian economists holding sway from the White House to Harvard Yard and beyond, supporters of the old laisse-raire religion were reduced to issuing jeremiads and supporting Senator Barr Goldwater's quixotic 1964 presidential campaign. The most notable of these rightist dissidents was the University of Chicago economist Milton Friedman, who in 1962 had published Capitalism and Freedom, a ringing defense of free markets and small government." 

quick bio:

• Born in blue-collar Rahway, NJ
• undergraduate: Rutgers, 1932
• graduate work: University of Chicago and Columbia
• federal government during WWII

Capitalism and Freedom: government power as "the great threat to freedom." Wow, he was hard-core -- see page 392. Even I can't accept this far-right views. Hard to believe that blue-collar Rahway, Rutgers, Columbia University and Chicago would have led him down this path -- or was it his stint in the US government during WWII? 

 

Chapter 23: Nicholas Georgescu-Roegen and the Limits to Growth

 

Chapter 24: Silvia Federici and Wages for Housework

Brooklyn, NY: New York Wages for Housework Committee 

 

Chapter 25: Theorists of Thatcherism: Stuart Hall vs Friedrich Hayek

 

 

Chapter 26: Parsing Globalization: Samir Amin, Dani Rodrik, and Joseph Stiglitz

 

Chapter 27: Thomas Piketty and Rising Inequality

2014: Thomas Piketty, a 43-y/o professor at the Paris School of Economics who had recently published a seven-hundred page book, Capital in the 21st Century, in which he traced the long-term dynamics of inequality and warned that the prospect of recent trends continuing was "potentially terrifying."

 

Chapter 28: The End of Capitalism, or the Beginning?

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Chapter 28: The Sahel

The Sahel is a vast, semi-arid transitional zone in Africa, south of the Sahara Desert, stretching from the Atlantic to the Red Sea, known for its grasslands, diverse cultures, and historical empires, but now facing severe challenges from climate change, drought, poverty, political instability, and violent extremism, impacting millions who rely on agriculture and herding for survival.  

It includes parts of Senegal, Mauritania, Mali, Burkina Faso, Niger, Nigeria, Chad, Sudan, and Eritrea, among others. 

 

 

 

Keynesian economics, named after John Maynard Keynes, argues that government intervention through fiscal and monetary policies can stabilize economies, especially during downturns, by managing aggregate demand (total spending) to combat recessions and control inflation, using tools like public spending and interest rates to boost employment and output when private demand falters. Key ideas include that demand drives output, economies can get stuck below full employment due to insufficient spending, and government spending can "prime the pump" to boost the economy, as seen during the New Deal era.