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Inventing American Capitalism

The Agrarian Origins of American Capitalism

by Allan Kulikoff
University Press of Virginia, 341 pp., $49.50; $17.50 (paper)

The Origins of American Capitalism: Selected Essays

by James A. Henretta
Northeastern University Press, 312 pp., $40.00

Historians used to call it the Industrial Revolution; some social scientists labeled it modernization; the economic anthropologist Karl Polanyi termed it the “Great Transformation”; Marxists called it the transition from feudalism to capitalism. But by whatever name it has been known, scholars of all sorts have been fascinated with the emergence in the late eighteenth century of the great industrial or capitalistic market economies of the Western world. Now with the collapse of communism in the Soviet Union and Eastern Europe this fascination has taken on a new relevance. In its struggle to invent capitalism and market societies in the present, does Eastern Europe have anything to learn from the way it originally happened in the West?

Marx thought that the destruction of a dependent agrarian peasantry and the emergence of a free labor force were crucial to the transition from feudalism to capitalism in Western Europe. Most other thinkers have followed Marx in believing that the essential secret of the transition lay in the changing nature of rural society. Despite differences of emphasis nearly all the more recent theorists agree, in the words of the French Marxist historian Guy Bois, that “the decisive part in the transition from feudalism to capitalism is played out in the countryside.” Nearly all, in other words, agree on the crucial importance of agricultural productivity in stimulating capitalistic development in the various Western countries. Only when the farming population could increase its productivity to the point where it could allow an increasing proportion of its members to engage in manufacturing and at the same time provide a home market for that manufacturing—only then, it is assumed, could the takeoff into capitalistic expansion take place.

If agricultural productivity is important for the transition to capitalism, then why did this transition occur first in England? Why was English agriculture more productive than that of the continent? Nearly twenty years ago the Marxist historian Robert Brenner offered a stimulating answer to these questions. In an influential article published in the historical journal Past & Present in 1976 Brenner argued that the production of peasants on small lots could not provide the agrarian basis for economic development. What was needed for a real agricultural breakthrough into economic development, he said, was some form of large-scale capitalist farming. As population grew in the late medieval and early modern periods, landholdings on the continent, particularly in France, were increasingly fragmented, and agriculturally inefficient petty proprietorships came to dominate the rural landscape with a corresponding decline in agricultural productivity. In England, however, the development was very different. Instead of fragmentation there the tendency was to build up larger and larger farming units, to consolidate holdings and lease them out to large tenant farmers who in turn cultivated them with the aid of rural wage laborers. It is Brenner’s contention that the emergence of this peculiarly English structure of class relations—of landlords, capitalist tenants, and wage laborers—made possible the extraordinary increase in early modern England’s agricultural productivity, and that “this, in turn, was the key to England’s uniquely successful overall economic development.”

Brenner’s article aroused responses from scholars all over Europe. Some of these argued that Brenner had exaggerated the difference in agricultural productivity between England and France; others admitted the difference in productivity but contended that technological factors, not class structure, lay behind it: and still others gave examples of large-scale capitalist farmers in Europe who were not remarkably productive as well as examples of small peasant farmers who were. Despite these spirited responses, however, Brenner’s Marxist argument remains a formidable explanation of the English transition into capitalism. In the mid-Eighties Brenner’s article and some of the responses along with a lengthy rebuttal by Brenner were collected together and published as The Brenner Debate.

As an explanation of the rise of capitalism among the English colonies on the western side of the Atlantic, however, Brenner’s argument has had virtually no effect. None of the historians who write on the origins of American capitalism, including those with Marxist leanings, has tried to enlist Brenner’s support for his or her cause; only a couple of them have even bothered to cite him. One can readily see why. Brenner’s theory that the absence of small peasant landholders and the emergence of a landlord-capitalist, tenant-wage labor structure were the crucial sources behind the rise of capitalism in England has no applicability in explaining what happened in America. Indeed, America’s example, at least in New England, is a major challenge to Brenner’s general argument: the northern parts of eighteenth-century America contained almost no large-scale capitalistic farming dependent on wage labor; yet no one denies that capitalism arose in just those northern regions where small-scale family farming dominated. How did all those family farms of New England become productive enough to lay the basis for the emergence of capitalism?

It is a major puzzle that for the past couple of decades or so has stimulated an intense and vigorous debate among a number of historians of early America. For the most part this debate has been carried on in articles in various scholarly journals. Recently, however, many of the participants in the controversy have collected their various contributions together and published them as books. Which makes for an appropriate time to take stock and see where we are.

It has long been accepted that northern American farmers in the colonial period, especially those in New England, were wasteful and not very productive. Some contemporaries blamed the poor and unproductive state of American agriculture on the bad quality of soil; others thought the ignorance, laziness, and conservatism of the farmers were at fault. George Washington put his finger on a central aspect of the problem in 1791. The land, he said, was too plentiful for the available labor; consequently, “much ground has been scratched over, and none cultivated or improved as it ought to have been.” But as the agricultural historian Percy Bidwell declared early in this century, the low productivity was not a mere matter of the conservatism of the farmers or the prevalence of land and the scarcity and expense of labor; it was the lack of local markets for their goods that kept northern colonial farmers from producing at more than a subsistence level. This notion of a northern agricultural economy retarded by limited markets dominated historical thinking through the first half of the twentieth century.

Only in the prosperous decades following World War II did this perspective begin to change. More and more historians, led by Charles S. Grant and James T. Lemon, began discovering that colonial farmers were not involved in mere subsistence agriculture after all; many of them were very busy producing surpluses for markets and were as acquisitive and profit-driven as any other capitalists in American history. In fact, wrote Grant, far from resembling the self-sufficient “contented yeoman” of folklore, the speculative and land-hungry farmers of New England were more like “the embryo John D. Rockefeller.” America did not have to become capitalistic, said Louis Hartz in his Liberal Tradition in America, the book that best summed up postwar thinking about America’s past; it had been so from the beginning. From the seventeenth century on, it seemed, nearly every white American “had the mentality of an independent entrepreneur”—eager to make money and get land and get ahead. Some of the early settlers were actually interested in economic development, and many others were involved in trade of various sorts—sending tobacco and rice to England, selling fish, foodstuffs, and lumber to the West Indies, and exchanging a wide variety of goods among themselves. For these liberal entrepreneurial historians—whom Allan Kulikoff labels “market historians”—explaining the origins of capitalism in America was not even an issue. America had always been capitalistic.

Still, there was the problem that Bidwell had noted at the beginning of the century—the low productivity of northern agriculture. If the New England colonial farmers were already capitalists, they were apparently not very good ones. If markets and outlets for their goods were already available in the eighteenth century, as the post-World War II market historians suggested, many of the northern farmers did not take advantage of them to the extent they would later. Something in the eighteenth century was inhibiting them from fully expressing their presumed capitalistic instincts.

In the early 1970s several historians, beginning with Kenneth Lockridge, John Demos, Philip Greven, and Michael Zuckerman, in a series of studies of New England colonial communities challenged this picture of a modern “market oriented” capitalistic and entrepreneurial world. These, antropologically minded historians found that the colonial New England towns, far from being centers of speculation and capitalist enterprise, actually resembled traditional peasant villages; they were stable, self-sufficient, patriarchal, disciplined, homogeneous, and profoundly religious—in Lockridge’s words, speaking of Dedham, Massachusetts, “a Christian, utopian, closed corporate community.” The people who lived in these colonial villages wanted order, harmony, and regularity and were willing to coerce one another to get it. The last thing they seemed to have in mind was allowing private individuals the right to make money at the expense of the public good of the community.

These New England town studies were soon followed by a number of works on the economies of these rural villages that reinforced the view of their being premodern, precapitalist, peasant-like communities. The authors of these works include James A. Henretta, Christopher Clark, Allan Kulikoff, Michael Merrill, Daniel Vickers, Robert E. Mutch, and others. Kulikoff calls these historians “social” historians to distinguish them from the “market” historians, while Winifred Barr Rothenberg, who has emerged as their principal critic, calls them “moral economy” historians. According to Rothenberg, these so-called “social” historians have married cultural anthropology to Marxism, and, following the lead of the late English Marxist historian E.P. Thompson, they have created a model of a “moral economy” that they have tried in various ways to apply to the New England towns.

These moral economy historians argue that the New England farmers were unproductive not because they lacked markets but because by and large they chose not to sell to these markets. It seems that the farmers did not possess an entrepreneurial and capitalistic mentality after all; they were not primarily interested in working for profit—a lack of interest that for these “social” or “moral economy” historians is something to be admired and cherished. The less capitalism the better, as far as they are concerned.

These historians have thus mounted a major challenge to the older Hartzian view that Americans were born free, equal, and capitalistic in the seventeenth century. All of them one way or another are seeking, in the words of Henretta, “to confound an uncritical ‘liberal’ interpretation of American history,” primarily by demonstrating that “capitalist practices and values were not central to the lives of most of the inhabitants of British North America before 1750.” Many American farmers, especially in the South and middle colonies, may have been producing for distant markets, but most New England farmers were not. (Henretta argues that even farmers outside New England were less commercially minded than we have usually thought.)

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