Introduction: Varieties of Capitalism

  • Marshall C. Eakin


Capitalism has transformed the world over the last three centuries. Emerging out of the trading networks of medieval Europe, it propelled the Europeans out across the globe in search of markets, goods, and profit. Beginning in the late eighteenth century the rise of industrial capitalism in England, and then on the European continent, helped give birth to the modern world—one dominated at the beginning of the twentieth century by a handful of European nations and the United States. The “rise of the West” to global economic and political supremacy ultimately rested on its powerful economic system—industrial capitalism.1 At the end of the twentieth century, the collapse of the Soviet Union and the end of the Cold War have produced something of a capitalist euphoria even leading some commentators to declare the final victory of capitalism and democracy over socialism, and even the “end of history.”2


Trading Network Late Eighteenth Century Industrial Capitalism Political Patronage Business History 
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  1. 1.
    Some of the standard works on the subject of the emergence and power of the West in modern times are William H. McNeill, The Rise of the West: A History of the Human Community (Chicago: University of Chicago Press, 1963); Nathan Rosenberg and L. E. Birdell, Jr., How the West Grew Rich: The Economic Transformation of the Industrial World (New York: Basic Books, 1986); Paul Kennedy, The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000 (New York: Random House, 1987); David S. Landes, The Wealth and Poverty of Nations: Why Some are So Rich and Some So Poor (New York: W. W Norton, 1998).Google Scholar
  2. 2.
    Francis Fukuyama, “The End of History?” The National Interest 16 (summer 1989); and, Francis Fukuyama, The End of History and the Last Man (New York: The Free Press, 1992).Google Scholar
  3. 3.
    See, for example, Jorge G. Castañeda, Utopia Unarmed: The Latin American Left After the Cold War (New York: Vintage Books, 1993).Google Scholar
  4. 4.
    See, for example, Menno Vellinga, ed., The Changing Role of the State in Latin America (Boulder, Colorado: Westview Press, 1998).Google Scholar
  5. 5.
    Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, R. H. Campbell and A. S. Skinner, eds., 2 v. (Oxford: Clarendon Press, 1976 [1776]).Google Scholar
  6. 6.
    Karl Marx, Capital: A Critique of Political Economy, v. 1, trans. Ben Fowkes (New York: Vintage Boob, 1977 [1867]).Google Scholar
  7. 7.
    Joseph A. Schumpeter, Capitalism, Socialism, and Democracy, (New York: Harper & Brothers, 1947). For a recent reevaluation of this classic work, see Thomas K. McCraw, “The Creative Destroyer: Schumpeter’s Capitalism, Socialism, and Democracy,” EH.NET Project 2000, Scholar
  8. 8.
    Milton Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962).Google Scholar
  9. 9.
    My definition draws on Thomas K. McCraw, ed., Creating Modern Capitalism: How Entrepreneurs, Companies, and Countries Triumphed in Three Industrial Revolutions (Cambridge, Mass.: Harvard University Press, 1997), esp. 3–4.Google Scholar
  10. 10.
    Although the old terminology of First, Second, and Third World is inadequate, especially for the contemporary world, I still find it useful shorthand. Throughout this book I use developing world and newly industrializing countries (NICs) interchangeably. Irving Louis Horowitz, Three Worlds of Development: The Theory and Practice of International Stratification (New York: Oxford University Press, 1966), esp. 1–38.Google Scholar
  11. 11.
    According to one estimate, the five largest economies in 1994 were the United States, China, Japan, Germany, and India, followed by France, the United Kingdom, Italy, and Brazil. Angus Maddison, Monitoring the World Economy, 1820–1992 (Paris: Organization for Economic Cooperation and Development, 1995), esp. 180–92.Google Scholar
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    T. S. Ashton, The Industrial Revolution (Oxford: Oxford University Press, 1948); Phyllis Deane, The First Industrial Revolution (Cambridge: Cambridge University Press, 1967) are two of the “classic” accounts. Pat Hudson, The Industrial Revolution (London: Edward Arnold, 1992) provides a useful and thorough overview of the “industrial revolution.” In particular, pp. 9–36 provide an excellent survey of the historiography. For the role of the State in this process, see Eric J. Evans, The Forging of the Modern State: Early Industrial Britain, 1783–1870, 2nd ed. (London: Longman, 1996), esp. chapter 12.Google Scholar
  13. 13.
    Warren Dean, The Industrialization of São Paulo, 1880–1945 (Austin: University of Texas Press, 1969) and Wilson Cano, Desequilíbrios regionais e concentração industrial no Brasil: 1930–1970 (São Paulo: Global, 1985). In 1907, São Paulo (16.6 percent) and Rio de Janeiro (39.9 percent) (the Federal District and the surrounding state) accounted for 56.5 percent of the value of Brazil’s industrial production. By 1940, the positions of the two states had reversed (São Paulo at 38.6 and Rio de Janeiro at 27.9 percent), but they now accounted for 66.5 percent of the value of the nations industrial production. Recenseamento de 1920, v. 5, pt. 1, p. vii; Recenseamento de 1940, v. III, p. 185.Google Scholar
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    Barrington Moore, Jr., Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World (Boston: Beacon Press, 1966), esp. chapters 5 and 8.Google Scholar
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    “[T]he Industrial Revolution marked a major turning point in man’s history. To that point, the advance of commerce and industry, however gratifying and impressive, had been essentially superficial: more wealth, more goods, prosperous cities, merchant nabobs…. It was the Industrial Revolution that initiated a cumulative, self-sustaining advance in technology whose repercussions would be felt in all aspects of economic life.” David S. Landes, The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the Present (Cambridge: Cambridge University Press, 1969), 3.Google Scholar
  16. 17.
    For a very critical view of this shirting pattern see, Stephen H. Haber, “The Worst of Both Worlds: The New Cultural History of Mexico,” Mexican Studies 13:2 (summer 1997), 363–83. Two recent collections that represent a renewal (albeit not a major one) of the economic history of Latin America are Stephen Haber, ed., How Latin America Fell Behind: Essays on the Economic Histories of Brazil and Mexico, 1800–1914 (Stanford: Stanford University Press, 1997); and, John H. Coatsworth and Alan M. Taylor, eds., Latin America and the World Economy Since 1800 (Cambridge, Mass.: Harvard University, David Rockefeller Center for Latin American Studies, 1998).CrossRefGoogle Scholar
  17. 18.
    For an important recent survey of the state of business history in Latin America, and the neglect of microeconomic studies, see Carlos Dávila and Rory Miller, eds., Business History in Latin America: The Experience of Seven Countries, trans. Garry Mills and Rory Miller (Liverpool, England: Liverpool University Press, 1999).Google Scholar
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    Some important examples are Jorge Caldeira, Mauá: empresário do império (São Paulo: Companhia das Letras, 1995) and A nação mercantilista (São Paulo: Editora 34, 1999); Sérgio de Oliveira Birchal, Entrepreneurship in Nineteenth-Century Brazil: The Formation of a Business Environment (New York: St. Martins Press, 1999); Eugene Ridings, Business Interest Groups in Nineteenth-Century Brazil (Cambridge: Cambridge University Press, 1994); Duncan McDowall, The Light: Brazilian Traction, Light and Power Company Limited, 1899–1945 (Toronto: University of Toronto Press, 1988).Google Scholar
  19. 20.
    See, for example, Alfred D. Chandler, Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass.: The Belknap Press of Harvard University Press, 1977).Google Scholar
  20. 22.
    A notable exception to the lack of interest in secondary cities is James R. Scobie, Secondary Cities of Argentina: The Social History of Corrientes, Salta, and Mendoza, 1850–1910, completed and edited by Samuel L. Baily (Stanford, Calif.: Stanford University Press, 1988).Google Scholar
  21. 24.
    Marshall C. Eakin, “Cultural Amnesia: Systematically Erasing the History of Brazilian Industrialization,” in Documenting Movements, Identity, and Popular Culture in Latin America, ed. Richard F. Phillips (Austin: SALALM Secretariat, University of Texas, 2000), 229–35, goes into my efforts to find archives for this study.Google Scholar

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© Marshall C. Eakin 2001

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