The discussion marked the launch of An Introduction to the History of Capitalism, 600-1900, a collection of essays based on the 2014 series.

The event was opened by Hywel Williams, Senior Adviser at the Legatum Institute, who remarked on the necessity of an interdisciplinary approach, since “capitalism transcends economy, philosophy and ethics”.

The first question addressed the view of capitalism as either an ideology or a system, and whether or not categorising it actually limits our understanding of its true nature.

Nicholas Crafts, Professor of Economics and Economic History at the University of Warwick, shared his fears about the construction of capitalism into an ideology. While profit is a central driving force, he cautioned against viewing it as “a sort of zero-sum game” without consideration of the wider impact of pursuing that profit.

Benedikt Kohler, author and former Government Economic Adviser, pointed out that capitalism is not only an efficient way to organise the economy, but also links together individuals, societies and organisations. In his view, profit is essential and capitalism serves as an impetus to think about long-term growth and plans for the future.

“Capitalism means different things to different people” added Victoria Bateman, Fellow and College Lecturer in Economics at Cambridge, “it works differently in the real world to how it works in the textbooks”. She agreed with Koehler on the potential future benefits of reinvestment of profits, not only for individuals or companies but for society as a whole, and especially to scientific innovation. Capitalism’s historical developments are also central to informing current policy issues.

Williams raised the subject of immigration and remarked how the history of economics shows the central role played by migrants. “Migrations today are consistently different from how they used to be two centuries ago” claimed Crafts, mainly due to the disappearance of barriers such as lack of information and means of transport. However, “we pretend to live in a democratic society, but the truth is that your chances in life depend on where you are born” intervened Bateman, adding that “we should have sympathy for migrants”, a position backed up by Koehler who pointed out that “capitalism depends on the virtues of civil society. Immigrants contribute their values and work ethic and set examples for others, which is one of capitalism’s strengths”.

A member of the audience recalled that Boris Johnson, during a previous event at the Legatum Institute, declared that “It is capitalism that is ensuring that our society is […] more equal, not less equal,” using the city of London as an example. Koehler agreed that capitalism and the growth of cities go hand-in-hand. Bateman pointed out that inequality does not only exist between rich and poor, but also between and within genders. Empowering women across the developing world, and giving them the opportunity to make choices as individuals, is essential for a healthy society, and capitalism can play positive role here. Yet, in her opinion, it remains a missing element in every macroeconomic issue.

The panel concluded by taking a forward look at capitalism, thinking about where it may have veered off course and how it might best be stewarded to the benefit of future generations. Bateman said “we need a full-scale rethinking of economics, from the role of the market to the role of the State”, wishing for a change in both of the two extremes.

About the History of Capitalism Series

This series of lectures, which forms part of the Legatum Institute's 'The Culture of Prosperity' programme, investigates the origins and development of a movement of thought and endeavour which has transformed the human condition. Capitalism's characteristic emphasis on freedom of trade and market expansion has encouraged social mobility, global exploration and intellectual curiosity. Wherever and whenever it has appeared across the world's continents capitalism has undermined monopolies, economic protectionism and restrictive practices. Our lecturers will therefore be assessing case studies in business history and the individual biographies of thinkers, writers and inventors as well as describing particular periods in the histories of cities, states and nations. Further information available here.

Related—2014 History of Capitalism Series

  • Industrialisation: Why Britain Got There First (1800-1900) with Nicholas Crafts, 26 November 2014 (View)
  • Making Money, Making Empires: The Case of the East India Company (1600-1850) with Huw Bowen, 11 September 2014 (View)
  • A History of Capitalism: The Changing Axis of Economic Power in the Early Modern Period (1550-1750), with Victoria Bateman, 5 June 2014 (View)
  • Early Islam and the Birth of Capitalism (600-1400) with Benedikt Koehler, 20 February 2014 (View)
  • A Global Transition: From the Mediterranean to the Atlantic (1300-1600) with David Abulafia, 15 May 2014 (View)