Capitalism: The Story Behind the Word by Michael Sonenscher

Sonenscher has written a short (174 pages of text), dense, and provocative book on the history of capitalism, or, more precisely, the idea of capitalism. Positioned as an intellectual historian, the author seeks to define capitalism, or to elucidate “the story behind the word,” as his subtitle puts it. He traces the word’s origins and its evolution into its widely accepted meaning in the eighteenth and early nineteenth centuries. He contextualizes it within related concepts, discusses what he sees as the problem of capitalism—inequality—and assesses the contributions of period thinkers to an understanding of capitalism and to a solution to the problem of inequality.Sonenscher begins by showing that before the term capitalism was first used in the mid-nineteenth century, the French term capitaliste had a history going back well into the eighteenth century when it referred to those who financed wars by lending to the states that fought them. Capitalism acquired its “apocalyptic aura” when it was associated with the concepts of “commercial society” and the “division of labor” (xv). The book is devoted to explicating these terms, how they are problematic, and how various thinkers sought to solve the resulting problems.The book is divided into two parts, “Problems” and “Solutions.” The first describes the development of the idea of capitalism and relates it to other political concepts. Sonenscher distinguishes between capitalism on the one hand and commercial society and the division of labor on the other. His analysis is political, and he regards these institutions as problematic because they lead to inequality. Capitalism is a system of property ownership, and arrangements other than private ownership of capital are readily conceivable. Commercial society, on the other hand, arises from humans’ propensity to exchange, and it is hard to imagine a world without that and its concomitant, the division of labor. The potential for commercial society or capitalism to act as economic engines producing growth is not discussed.1Subsequently, the book navigates the course of capitalism’s evolution during the early nineteenth century. This transformation by continental thinkers developed capitalism from an idea mostly involving international economics based on war and debt into a national one. In the years leading up to the Revolution of 1848, Alphonse de Lamartine and Louis Blanc clarified the debate over capitalism by revealing that there were really two problems, which required two solutions: “the problem of … the ownership of capital” and “the problem of the division of labour and markets” (73).In the second part, Sonenscher discusses the solutions to the problem of inequality. Karl Marx’s communism, a “synthesis of French legal thought and German theology,” was based on a “negative community of goods” in which property could be used but not individually appropriated (78, 87). The many followers of Adam Smith struggled to reconcile the sympathy or virtue of his moral philosophy with the self-interest or expediency of his economics. Other philosophers envisioned a role for the state in mitigating the inequalities of capitalism without abolishing it. Georg Wilhelm Friedrich Hegel, for instance, thought that public administration could serve as “a bridge and a buffer between civil society and the state” (140). David Ricardo’s comparative advantage did not only produce benefits, it resulted in unequal returns to different producers and disadvantaged those turning out basic products. The resulting inequality could, however, be mitigated by adept monetary and fiscal policies. Finally, legal theorist Lorenz von Stein found a solution wherein administrative principles applied to groups could foster “real social cohesion” (157).After examining the dualities in the thought of these late eighteenth and early nineteenth century thinkers, Sonenscher returns to the distinction between capitalism and commercial society. He encourages a focus on the latter because, in its complexity and belief that “individuals are radically dependent upon one another,” it opens up many possibilities for what society might become (169).