Roaming Predators

The Perspective of the World, Fernand Braudel, 1985.

Sense of Gravity, Fillìa, 1932.

This is a review of the third volume of the Civilisation & Capitalism trilogy. If you have not already, may I suggest reading my reviews of volumes one & two first (this is not strictly necessary, however).

In other news, I have decided to enable paid subscriptions. The reviews will still be free and fortnightly, as usual.¹ But for paid subscribers, I thought I might add a ‘supplemental’ post, featuring my favourite charts and figures from each book. It’s not much, but I thought offering something small beats asking for patronage plain and simple, at least! Plus, it also gives me a place to talk about data a little without breaking the flow of these essays. So if you appreciate what I write, and can take the damage, I would be grateful for the support :) You can check out my first supplemental for free by clicking below.

Supplemental: Roaming Predators

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The world-economy. As a core concept, Fernand Braudel’s The Perspective of the World depends upon it above all else. Not to be confused with the world economy; a world-economy is, Braudel writes, “a fragment of the world… an economically autonomous section of the planet”. Borrowed by Braudel from the sociologist Immanuel Wallerstein, the ‘world-economy’ is a rather loose idea.² But it holds a number of propositions which are integral to the project of Civilisation & Capitalism as a whole; in particular, that “development is the reverse side of underdevelopment”. This is the essential, divisive argument of Braudel’s world-systems analysis: that within the world-economy there is an unequal exchange which takes place between the ‘core’ (the region, usually a city, forming a nexus of economic and political power), and its ‘periphery’, a dependent hinterland. For Braudel, this power dynamic accounts for nothing less than the “progress and establishment of capitalism”. The core of one era may become the periphery of another. The boundaries of the periphery may fluctuate as the shifting core expands its reach. But although the geography of economic flows changes, the fact of this unequal exchange is, supposedly, constant.

The Perspective of the World is the last volume of Braudel’s baroque trilogy on early-modern global economic history. Unlike its thematic predecessors, this is a chronological account — Braudel zeroes in on the successive cores of the European (and extra-European) world-economies, explaining the causes and consequences of their rise and fall. This is not to say he does not engage with more tangential themes. The Perspective of the World gives greater attention to the world outside Europe than its predecessors; with, in particular, a great chapter on Mughal India. It features a dated, albeit entertaining, discussion of G.N.P estimates; which, more than anything, makes you realise how much has changed in this field since 1979 — if only Braudel had lived long enough to see the Maddison project! But the thrust of the book is a familiar story about how the core of the European world-economy — the centre of power and progress — shifted from Venice, to Genoa, to the United Provinces, and finally, reached its early-modern apotheosis in Britain.

Braudel is rather Venice-sceptical. Although he believes it became the centre of the European world-economy at the beginning of the fifteenth century, he does not think that Venetian supremacy represented a substantively original phase in the history of capitalism. Braudel argues that the rise of Venice was, more than anything, geographically determined, due to its close connections to the East and Central Europe. Its capitalism was, however, “far behind” that of Florence or Genoa, even during Venice’s heyday. So Braudel believes that it was the ascendence of the Genoa in the mid-sixteenth century to the core of the European world-economy that mattered most. There is, in fact, no better distillation of the essence of Braudel’s variety of world-systems analysis than Genoa, because the city-state’s footprint outside finance was minuscule — it was a town of between sixty to eighty-thousand that never ruled ruled much of anything beyond the coast-hugging mountains of Liguria. Genoa’s claim to importance, however, is financial innovation. At its peak, Genoese financiers controlled the trade in gold, silver, and bills of exchange, in large part because of the colonial successes of Spain, for whom it was a banker. But this was not only a matter of profiting from Spanish crown debt. Genoa was the “arbiter of the fortune of the whole of Europe’, responsible for mobilising the lion’s share of its capital. And crucially, Braudel argues, it was the first polity to have such a privilege. The story of Genoa is fascinating, and for the history of finance it is absolutely essential. But I am not convinced whether I can square Braudel’s argument with his understanding of a world-economy; for the simple reason that, as Braudel acknowledges, Genoa was “extremely discreet”. Braudel even compares the role of Genoa with, not unreasonably, the Bank of International Settlements in Basel! Can an institution such as this be analogous to the core of a world-economy without something being lost? Genoa was likely integral, however briefly, to Europe’s ‘world-economy’, marking a monumental step in the history of financial capitalism. But by overstating its importance, Braudel may let his genuine insights about Genoa’s inchoate modernity overshadow the quantitative reality of the world it existed within.

The world-system analysis really starts to dominate Braudel’s argument when it comes to the rise and fall of the Dutch. While Genoa’s world-economy, and thus the periphery it could exploit, was relatively limited, Amsterdam became core to a much-expanded economic zone stretching from the Mediterranean to the Baltic and beyond to Asia and America. This, for Braudel, was the cause of its success. Unlike Genoa, Amsterdam’s trade “verged on a monopoly”, and it famously pioneered financial developments of its own. But it too would fall by the close of the seventeenth century. Why? Firstly, Braudel suggests that a common financial predicament cursed the ‘city-centred economies’ of Genoa and Amsterdam: the modern credit crisis. Starting in 1763, Amsterdam passed through a series of crises which crippled its financial sector and heralded the rise of London. This was, Braudel argues, a result of its ‘overextension’; as low domestic interest rates and a glut of capital caused Amsterdam to burden the European economy with a volume of credit money it could not handle. There is a decisive crisis in 1773; which, although it originated in London, lost for the Dutch any remaining pre-eminence in the European world-economy. London became the next financial centre, a development prefigured by the fact that it was important enough to cause a crisis in the first place.

Braudel’s final chapter, on the industrial revolution, is a step backwards to the first volume of his trilogy, The Structures of Everyday Life, insofar as the focus is diffuse, the tone meandering, and the arguments thin and toothless. At the end of the day, Braudel just does not care that much about explaining growth, and his discussion seems reluctant — no wonder he left it until the end of his trilogy. In his section entitled “How can Growth be Explained?”, Braudel’s only suggestion is the division of labour; which, as he even acknowledges, is just a “derivative phenomenon” and not really an explanation at all. Unsurprisingly, Braudel’s essential argument is not about growth or industrialisation; instead, he is more concerned with arguing that an emerging industrial capitalism did not supplant either commercial or financial capital — an argument he makes well, even if it may seem trivial compared to the question of long-run growth. Amusingly, despite what is often said about him and his longue durée, Braudel is, in fact, usually more interested in the cyclical component, the conjuncture of economic history, than the trend. That is perfectly legitimate. However, for a three volume, sixteen-hundred page tome about capitalism and civilisation, no less, a little more reflection on economic growth — the long-run trend par excellence — might have been warranted.

Whether you buy the argument of The Perspective of the World depends less on the veracity of the history Braudel recounts than the extent to which you believe that the story he tells — of shifting world-economies, power, finance, and exploitation — is the central story of early-modern economic history. Is the history of financial centres the history of the world? Is the rise of some regions at the expense of others the motor of development? Is the Industrial Revolution less important than the origins of capitalism? I believe economic historians today, for the most part, would answer in the negative on all three questions. While I am, due to some retrograde intellectual tendencies, more inclined to agree with Braudel than some, it would be naive to pretend there are not compelling reasons to set him aside. Still, despite its obvious flaws, I must admit I find The Perspective of the World’s world-system analysis more insightful — in its core thrust, at least — than the cute stories about culture or institutions such as pass for economic history today. If I said otherwise I would be lying through my teeth.

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Coda

It is easy to forget how the ‘crisis’ of the 1970’s appeared as a full-blown crisis of capitalism for many at the time. The end of the trente glorieuses, the rise of Japan, inflation and stagnation: all these combined to produce the impression that capitalism had — finally — reached the end of the road, at least for some.

But why am I talking about the 1970’s? It is because Braudel chooses to spend the final pages of his magnum opus talking about it. In his conclusion, Braudel suggests that the economic crisis of the early-mid seventies might not form a cyclical downturn, but a full-blown reversal of the secular trend in economic growth — the trend which began towards the end of the period of Capitalism & Civilisation. Braudel’s politics are rather elusive — he is not a Marxist, nor a Polanyian, nor a Whiggish liberal. But he is convinced that if the secular trend in economic growth is really breaking down then such a crisis “could only be resolved by thorough-going structural demolition and reconstruction”.

This prediction, of course, would not bear out.³ But Braudel’s attempt to end his survey of the early-modern economy with a reflection on the crisis of his time illuminates something essential about Capitalism & Civilisation. One of the central arguments across all three volumes is that capitalism and market society, in a historical perspective, are very different things. Capitalism is this slippery, changeable, ever-present, and opportunistic force that chases profit wherever it can be found, extricating itself from unprofitable regions of social and economic life as quickly as it infiltrates unexploited ones. Market society, however, describes a much greater scope of economic activity, albeit without the world-historical impetus of capitalism, that great predator which engages with markets only on its own terms. Why stress such a distinction? No doubt, Braudel believes it is analytically true. But Braudel’s convictions also speak to the anxieties of his historical moment, to the feeling that market society must be separated from capitalism if the former might survive. This urgency, while only made explicit in the conclusion, runs through the whole series: Braudel is never afraid of accusations of presentism, and and everything he recounts sparkles with relevance. I have had my issues with Capitalism & Civilisation: Braudel’s hyperbolic style, overbearing description, and scattered statistics wear thin. I cannot in good conscience wholly accept his narrative, because there is simply much about economic history that it cannot explain. Braudel reveals the blind spots of his era as much as he does his own greatness. Yet I cannot help but love the whole bloated thing anyway.

1. Except for this one, which I know is a week late! But ‘events’ last week and my final exams led me to delay — apologies!

2. Wallerstein was both an influence on, and influenced by, Braudel — since although the first volume of his quartet The Modern World-System was published in 1974, the final volume was published in 2011! A lot of this goes back to Andre Gunder Frank, Samir Amin, etc — but Braudel only talks about Wallerstein and therefore so will I.

3. Keep in mind Braudel is writing this in 1979 (it is the English edition which comes out in 1985 - the year of his death, incidentally).