LOPES Luis Felipe

GLOBAL ECONOMIC HISTORY BOOK REPORT: Afterthoughts on Material Civilization and Capitalism, by Fernand Braudel
The word capitalism is often employed in a number of different situations, and by a number of different agents - everyday people, the medias, the political power, economists and even academics - with different goals, and different meanings. Some find it useful; others consider it rather a hindrance in understanding economic structures and processes. Indeed, capitalism today is a blurry and flexible term that can be hard to define, but that succeeds on transmitting a certain idea or message. As Fernand Braudel affirms, citing the American economist Andrew Shonfield, the best reason for using the world capitalism, no matter how much people run it down, is that no one has found a better word (Page 46)1. In his book Afterthoughs on Material Civilization and Capitalism, one of Braudels most important goals if not the most important is indeed to define what he understands by capitalism and the capitalist economic activity. The work is a register of the three conferences delivered by Braudel at the John Hopkins University in 1976. In the volume, published in 1977 by the John Hopkins University Press, Braudel offers a straight-forward and summarized approach to the main notions and concepts that fundament his three-volume Civilisation matrielle, conomie et capitalism, 1400-1800. Although it is not a work that presents completely original ideas, its value dwells exactly on its brevity and clarity: Those who have read and admired their (Braudels Civilisation materielle, conomie et capitalism, 1400-1800) richness in evocative details and imaginative sensitive analysis will enjoy the clarity with which, by their very brevity, these lectures put in a high relief Braudels historical theories () (Page 49). In the approximately hundred pages that compose his book, Braudel explores the three zones that, in his theory, form the economic sphere of early modern Europe: the material life (vie matrielle), the market economy and capitalism. The first one can be conceived as the basic stratum of economic life, characterized by subsistence agriculture and self-sufficiency in general, with little or no exchange of goods; the other two market economy and capitalism, often treated by many as the same concept - are emphasized by Braudel as different levels of economic. In fact, Braudel highlights more than once that one of his main goals with this oeuvre is to mark and emphasize the difference between this two notions: () I owe my readers only one explanation: how can I validly distinguish capitalism from market economy. And vice versa2. In a nutshell, Braudel defines market economy as the public trade and small-scale private-trade, characterized by competitive and transparent transaction, supervised by public authorities; capitalism, in the other hand, is pictured as the long-distance trade that few are entitled to operate, marked by monopolistic, secret transaction, designed to obtain as high profits as possible; the activity that takes place in the summit of the economical hierarchy. But how clear and unquestionable is this separation? Is this concept still valid for modern capitalism? And how these notions may help us understanding the world economy, and the global economic history?

The direct references made throughout the book refer to Afterthoughts on Material Civilization and Capitalism, Translated by Patricia M. Ranum (The Johns Hopkins Symposia in Comparative History. ) Baltimore: Johns Hopkins University Press. 1977
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Braudel, Page 49

LOPES Luis Felipe Fernand Braudel debates all these important questions in his brief yet brilliant book. In order to better comprehend and reflect on Afterthoughs on Material Civilization and Capitalism, this essay proposes mainly to summarize and systematize Braudels work, eventually comparing it with other important thinkers and also suggesting some food for thought. Respecting the order chosen by the author 3, we will discuss, in a first part, the two first conferences delivered by the Braudel that approach the three concepts that have been presented in this introduction, focusing on the distinction between market economy and capitalism. In a second and final part, we will address the connection between capitalism and the general history of the world, as Fernand Braudel did in his third conference. 1. The Modern Whole as a Trichotomy4: the material life, the market economy and capitalism. Economic history nonetheless involves all the problems inherent in the historians craft, it is mans entire history seen from one particular point of view (Page 5). Through these words, Braudel both justifies and highlights the importance of his choice to study the economic history of the world. In the first two parts of the book that corresponds to the first two lectures delivered at the John Hopkins University -, the author makes efforts to systematize the way human activity interacted with the economy during the Ancien Rgime (14001800). He soon identifies what is to him the main characteristic of the pre-industrial economy: two different universes that coexisted. On the one hand, peasants lived in their villages in an almost autonomous way, virtually in an autarchy; on the other hand, a market-oriented economy and an expanding capitalism begin to spread out, gradually creating the very world in which we live () (Page 5). With the goal of better understanding this two-universes dynamics, he identifies first the concept of material life, consider by him as convenient, but inaccurate - all words with too broad a meaning are inaccurate (Page 7). Under this notion, Braudel regroups those aspects of life that control us without our even being aware of them (Page 7): inherited acts, routine, habits that helps us live and imprison us. Analyzing the several aspects that pushed the material life forward, Braudel details Europes demographic mechanisms such as hygiene habits and diseases-, what did people eat, drink and wear, the use of drugs and alcohol, observations about technical skills and the development of technology. It comprises, economically, subsistence agriculture and very few exchange activities only the necessary, for example, to have the money needed to pay taxes. However, Braudels concept was not meant to be passive or completely static; as Robert Blair St. George insists, with the notion of material life, Braudel had in mind a totalizing frame of historical process that encompassed the force of custom as well as new, fragmenting patterns of commercial capitalist exchange 5. It is crucial to emphasize the importance and the repercussion of the concept of material life; in fact, Braudel succeeded to create an innovative notion that had as its originality this focus on everyday life, considered by himself as that great absentee in history. As an evidence of how important was the introduction of this notion, we can mention how it has been frequently used by several economic and social historians, students of material culture and
3

However, the systematization of ideas and concepts will be prioritized, what may result - in some occasions - in a different organization and ordering than the original one. 4 Expression employed by Frederic C Lane in the title of his article (The Modern Whole as a Trichotomy , Vol. 2, No. 3,Winter, 1979, pp. 455-459, Published by: Research Foundation of SUNY) 5 St. George, Robert Blair. Afterthoughts on "Material Life in America, 1600-1860": Household Space in Boston, 1670 - Winterthur Portfolio, Vol. 32, No. 1 (Spring, 1997), pp. 1, The University of Chicago Press

LOPES Luis Felipe scholar such as Emmanuel Leroy Ladurie and Lucienne Roubin. It has been employed to analyze different periods and different societies over the time, and the work by St. George is a perfect example of this - as we can quickly notice by its title, Material Life in America, 1600-1860. As a very natural consequence of its not static nature, the boundaries between this vast world of the habitual are hard to define. The other universe that coexists with it the economic life progressed constantly during the centuries, and permanently interacted with the dynamics of the material life. According to Braudel, the frontier to economic life is crossed when the individual integrates the elementary market, the marketplace. Everything out of the market maintain only a use value, while the things inside the market acquire an exchange value. This exchange economy began with the several simple market-places that formed layers over a region and that started the connection between the world of producer and the world of the consumer. The market economy was imperfect during a long period, especially because an enormous share of the production was often absorbed by the self-sufficient families out of the market and limited to the material life; however, it progressed constantly and served as the link, the driving force, the restricted but vital area from which flowed encouragement, energy, innovation, enterprise, new awareness, growth, and even progress (Page 17). Braudel identifies two main levels in which the economic life developed itself: the basic inferior one, composed by the simple markets and the most basic agents involved in the exchange, such as peddlers and shopkeepers; and a superior level, formed by mechanisms of trade such as Bourses and fairs, dominated by large merchants (soon to be called wholesalers) who had little to do with retail sales (Page 20). Indeed, it is differentiating the two levels of the economic life that Braudel employs most of his effort in this part of the volume. Introducing his second lecture, the French historian announces that he would like to discuss those exchange relationships that I call both the market economy and the capitalism. Braudel is keen on drawing an explicit line between those two concepts. According to him, the notion of market economy is rather clear and arouses few disputes; the danger, however, consists on seeing only market economy, suggesting a persistent presence, when it is really only a fragment of a vast whole. Rare are the historians that understand the limited function of market economy: a link between production and consumption, a layer until the 19th century between the daily life and the capitalistic mechanism that more than once manipulated it from above (Page 41). Concerning capitalism - as Braudel recognizes, and as we highlighted in the introduction -, it is an ambiguous term, loaded with contemporary and, possibly, anachronistic connotations. If I threw caution to the winds and let the word in, it was for a number of reasons. (Page 45). The main reason, as he insists, is to name certain mechanisms occurring between the fifteenth and eighteenth centuries that could absolutely not be fitted into a slot in the ordinary market economy (). In order to better structure and support his distinction between market economy and capitalism, Braudel identifies two spheres of exchange: the (A) category, composed by daily local market exchanges, characterized by regularity, predictability, routine, transparency the rules and the outcomes being known by all-, fair competition, opened to small and large merchants and involving mainly producers and clients; the (B) category comprehends especially long distance trade, exchanges avoiding transparency and control, monopolistic, based on individual transactions and arbitrary financial arrangements and in which competition had little place, where the connection between the producer and the receiver of the merchandise is broken by powerful merchants.

LOPES Luis Felipe Those merchants the summit of the economic hierarchy are the capitalists, and the longer this chains between producer and client become, more successful they are at freeing themselves from the usual regulation and controls and the more clearly the capitalistic process emerges (Page 53). It is in this point that lays the importance of the long-distance trade: working over distance protected trade from supervision, and permitted a variety of economic choices and manipulations. One merely had to order the ships captain to set sail in the opposite direction (Page 54) the direction of the profits. And such high profits permitted an important accumulation of capital, fact that was reinforced by the small number of individuals that operated long-distance trade. Those were the capitalists: a small group, always connected to long-distance trade, that had good relations with the state and disposed of a thousand ways of rigging the odds in their favor, such as the manipulation of credit and the power of eliminating competition. Braudel goes on and add other crucial information about the capitalists: they managed to preserve their privileged position not only due to the high profits that allowed the accumulation of capital but also because of the wide access to credit; differently from other spheres of the economic world, specialization did not occur at the top of the pyramid, for until the nineteenth century the toplevel merchant virtually never restricted himself to a single activity (Page 59), participating in any lucrative activity within his reach; they did not, however, demonstrated special interest in the system of production, limiting themselves to the control of artisanal production through the putting-out system6. Undeniably, Braudels notion of capitalism - the perfect term for designating economic activities that are carried on at the summit (Page 113) can encourage a series of comparisons and questions. For once, it may be considered that capitalism is being reduced to some sort of simple trade behavior 7. Braudels theory indeed goes against several other conceptions. Taking into consideration that, to Braudel, capitalism has little to no relation with a mode of production, it is noticeable that the author does not support the Marxist theory of capitalism. It is also opposed to the work of Jean Baechler, who defines capitalism as a decision pattern that puts the law of efficiency as the main criteria. Additionally, Braudels capitalism has not a lot in common with Webers view of it as a progressive construction. In another sphere of criticism, some scholars find the separation much highlighted by Braudel between market economy and capitalism rather artificial. Rondo Camero, when commenting the fact that, to Braudel, the shipping of Baltis grain from Danzig to Amsterdam during the seventeenth century was considered as a market economy activity because it was regular and predictable, affirms: One wonders if the merchants and ships captains and crews regarded such commerce as regular predictable, routine8, as an example of how weak and relative his criteria can be. Jan de Vries points out another weakness in Braudels work: the absence of an apparent economic motor to Braudels triple-decker vehicle9. He argues that if, to Braudel, only the material life can be the origin of expansion of the market economy and capitalism, what is the initiation of this expansion? How does material life expand at first? II. Capitalism, hierarchy and a general history of the world In his third and final conference, Fernand Braudel defines as his goal to establish the connection
6
7

System where work was contracted by a central agent to subcontractors, who completed the work in their own facilities. Seen in class, Chapter 5 8 Cameron, Rondo ,The Journal of Economic History, Vol. 38, No. 4 (Dec., 1978), pp. 978-979 Published by: Cambridge University Press 9 Vries, Jan De, Spotlight on Capitalism: A Review Article; Comparative Studies in Society and History, Vol. 21, No. 1 (Jan., 1979), pp. 139-143. Published by: Cambridge University Press

LOPES Luis Felipe between capitalism, its development and modes of action, and a general history of the world (Page 79). Braudel initiates his reasoning by identifying the world from the 15th to the 18th century as unequal, structurally divided between the haves and the have-nots, the privileged and non-privileged countries. In order to better understand the origins of inequalities and analyze this international hierarchy, Braudel present to the reader the concept of world economy. Differently from economy of the world that means the market of the universe -, the latter means the economy of only one portion of our planet, to the degree that it forms an economic whole (Page 81). The author identifies three main aspects: (1) The world economy occupies a given geographic space, although variations and breaks occur from time to time; (2) It has always a pole, a center, represented by one dominant city; (3) Every world economy is divided into successive zones, reflecting their different status: there is the heart (the area around the center), the intermediate zones and finally the peripheral areas subordinates rather than true participants of the system. This unequal nature of the globe is one of the main if not the most- highlighted feature by Braudel here. Developing the inequalities within the economic zones of a world economy, he affirms that the successives concentric areas enjoy fewer and fewer advantages. The center zone is characterized by splendor, wealth and pleasant living, high prices and salaries, banking, luxury merchandise, profitable industries, respected currency, departure and arrival of long trade, the latest technology and technical skill. The rare decenterings and recenterings of the European world economy are analyzed in depth by Braudel. He mentions the glorious period of hegemony of different city-states Venice in the end of the 14th century, Antwerp in the first half of the 16th century and Genoa in the second half, Amsterdam during the 17th and 18th- and the major turning point that initiated the current period of dominance of national economies, with London in the end of the 18 th century and New York after 1929. In a lower level of the world economy, the intermediate countries are characterized by less free peasants, few free man, imperfect exchanges, incomplete banking, financial organizations that are often directed from outside (Page 89). Braudels mentions France as an example, considering that its standards of living could not be compared to Englands. Finally, the peripheral regions have often been worlds based upon slavery and serfdom, such as in Scotland, Ireland, Eastern Europe and the Europeanized America, the periphery par excellence. As a brief parenthesis, a very pertinent comparison here mentioned by Braudel himself - has to be drawn between his concept of world economy and the very similar one formulated by Immanuel Wallerstein in his book The Modern World-System, first published in 1974. Wallerstein concept is almost identical to Braudels in what concerns the economic zones and the core-periphery dynamics. Nevertheless, Wallerstein considers that the first world economy a capitalist world-system was the European one, which emerged only in the 16th century. Braudel, however, identifies economic zones similar to world economies even before the Middle Ages. For instance, Russia was within itself before Peter the Great - a world economy, as well as the Ottoman Empire. It is this coexistence of unequal societies and an accepted hierarchy from prosperous Holland to the colonized Spanish and Portuguese Americas - that the 1650 European world-economy consolidated the layering needed to give capitalism life: the outer zones feed the intermediate ones and, above all, the center (Page 92), and Those who are in the center () can lord it over the others. The center is the very superstructure of the

LOPES Luis Felipe capitalism, and it controlled in different occasions the periphery in order to satisfy its economic imperatives, reinventing the ancient practice of slavery in the New World and inducing serfdom in Eastern Europe. This lends weight to Wallersteins assertion that capitalism is a creation of world inequality; in order to develop, it needed the connivance of the international economy. This connivance by society serves as a much needed bridge to approach the similar role of inequality on consolidating capitalism also in the internal society. In fact, in several passages of his lectures Braudel emphasizes that the commercial world is made of and dependent on hierarchies. He develops the argument that capitalism is unthinkable without societys active complicity (Page 63), in other words, without the general acceptance a connivance by society of the social hierarchy and of the values of capitalism. Consequently, the state support or accordance is needed in order to capitalism to triumph, and that has been seen throughout history: in the 17th century, for example, the regents in Holland governed favoring and sometime even following directives of businessmen and merchants, while in France where capitalism was considerably less developed only with the 1830s revolution the commercial bourgeoisie created strong links with the government. Stable social hierarchies such as the ones seen in the Western society, marked by traditional families at the top and where social privileges were protected and the support of the state were, according to Braudel, key conditions to the development and success of capitalism over the time. He concludes that the internal and external explanations for capitalism are crucial and inextricably interwoven: He first must develop his power and consolidate it slowly. But it is certain that, although this power is developed through a slow, internal process, it is strengthened by the exploitation of other parts of the world (Page 110). But what was the role of capitalism in other parts of the globe, if one excludes de European world system? Braudel affirms that the European economy aspired to control the economy of the entire world and to be its embodiment all over the globe (Page 104) successfully only after the English national economy became the center. He states that capitalism indeed existed before in other parts of the globe Asia had well-organized and efficient world-economies and in Europe, as well as in Asia, rich capitalists retained exclusive control over these few supposedly superficial exchanges. (Page 93). Although the author proposes as his goal in this lecture to link capitalism and a general history of the world, one can say that Braudel offers some information, but mostly limit himself to analyzing in depth the European world economy. This negligence can be justified by the fact that capitalism had a much less prosperous and important role outside the European world-economy; in fact, as Braudel points out in his second lecture, only Japan other than the Western society moved on their own from the feudal to capitalist order. In China, for instance, society was much less stable and the hierarchy was not at all as rigid as in Europe. Powerful families were considered as competitors by the state, and the latter have always shown hostility towards the diffusion of capitalism. Additionally, already in the first lecture, Braudel highlights how the lower level of exchange mechanisms10 such as shops, peddlers and public markets, did existed in China, India, Japan and the Islamic world, while the upper levels of the exchange such as Bourses and fairs were highly developed in Japan, partly in Insulinde and partly in India. As the author concludes, the exchanges mechanisms similar to those present in Europe can all be found elsewhere; nevertheless, they were developed and used in varying degrees, so that a hierarchy can be
10

This systematization of Exchange mechanisms in two levels was presented in the first part.

LOPES Luis Felipe seen, with Japan in the top below Europe and China at the bottom, just above thousands of primitive economies. Hence, focusing on Europe when reflecting on capitalism is natural, since it was indeed in the Western society where it found the most appropriate conditions to its development. Conclusion A better comprehension of the value and the singularity of Afterthoughts on Material Civilization and Capitalism require a quick overview in Fernand Braudels biography. The historian is considered as the main precursor of the World Systems Theory and has inspired several other scholars as well as study centers, such as the a Fernand Braudel Center at SUNY Binghamton in New York and the Instituto Fernand Braudel de Economia Mundial in So Paulo. The French historian was one of the leaders of the Annales School, achieving worldwide prestige and respect especially by his two major works: a Mditerrane et le Monde Mditerranen l'Epoque de Philippe II (1949) and Civilisation matrielle, conomie et capitalisme, XVe-XVIIIe sicle (1979). As mentioned before, the book is composed by three lectures delivered in 1976 at the John Hopkins University, and they can be perceived as a synthesis and systematization of the ideas of the latter, a work of more than two decades, and are often recognized as a perfect introduction to Braudels thinking. Taking into consideration such an impeccable and unanimously acclaimed trajectory, ones personal remarks and criticism have to be proposed carefully and humbly. To my mind, Afterthoughts on Material Civilization and Capitalism is a unique work, at the same time deep, elaborate convincing, but also clear and brief. Even those with no previous knowledge of the themes approached can thoroughly be involved by its well structured concepts and systematized analysis. Although his concept of capitalism as the economic activity of the summit is often obscure, and as De Vries and Cameron argue the separation between the latter and market economy can be perceived as artificial, Braudels analyzes are innovative and well-argued approach, presenting new concepts and focus useful in many ways - especially in order to better understand much of the global economic history. For instance, his triptych composed by material life, market economy and capitalism is a unique tool of interpretation, allowing a whole other view of the economic dynamics and the economic history. In the word of Jan De Vries: () Braudels vastly illuminating use of the three levels in making sense of economic history. When one ceases to think of an all-powerful capitalism replacing an all-encompassing feudalism, and begins to perceive the world as waist-deep in material life, upon which is imposed a form of market organization and, finally, a capitalist element, a new flexibility is introduced. History is released from a straitjacket without thereby becoming a formless blob. Another important addition is a result of his focus on social hierarchies and inequalities, allowing an elucidatory perception of the role of capitalism in different parts of the globe. Fernand Braudel is able to effectively convince the reader that his theory of capitalism remains current and can be useful on explaining modern capitalism, pointing out that its nature has not changed much over the time. He exposes three main arguments: firstly, capitalism is still global, existing in a worldwide scale and based upon exploiting international resources and opportunities; secondly, it still relies upon legal or de facto monopolies and finally it has not yet encompassed the entire economy and working society, not composing one perfect system. Thirty five years later, it is tempting to imagine how would Braudel perceive and classify the present financial capitalism; today, do we still have a relevant material life or, for that matter, a true market economy , or has capitalism absorbed both of them into one perfect system all its own (Page 112)?

LOPES Luis Felipe

Bibliography BRAUDEL, Fernand, Afterthoughts on Material Civilization and Capitalism,Translated by Patricia M. Ranum (The Johns Hopkins Symposia in Comparative History. ) Baltimore: Johns Hopkins University Press. 1977. BRAUDEL, Fernand. Civilisation matrielle, conomie et capitalisme : 15e-18e sicle, Tome I, Livre de Poche, Paris, 1993. CAMERON, Rondo , The Journal of Economic History, Vol. 38, No. 4 (Dec., 1978), pp. 978-979, Cambridge University Press LANE, Frederic C Lane, The Modern Whole as a Trichotomy , Vol. 2, No. 3,Winter, 1979, pp. 455459, Fernand Braudel Center Research Foundation of SUNY LOVETT, A. W., Braudel: Total History for Beginners, The Historical Journal, Vol. 26, No. 3 (Sep., 1983), pp. 747-753, Cambridge University Press MISKIMIN, Harry A., The American Historical Review, Vol. 83, No. 3 (Jun., 1978), pp. 704, The University of Chicago Press ST. GEORGE, Robert Blair. Afterthoughts on "Material Life in America, 1600-1860": Household Space in Boston, 1670 - Winterthur Portfolio, Vol. 32, No. 1 (Spring, 1997), pp. 1, The University of Chicago Press VRIES, Jan De, Spotlight on Capitalism: A Review Article; Comparative Studies in Society and History, Vol. 21, (Jan., 1979), pp. 139-143, Cambridge University Press WALLERSTEIN, Immanuel. Comprendre le monde : introduction l'analyse des systmes-monde, Paris : La Dcouverte, impr. 2006.