The Cultural Roots of Capitalism

In my Relentless Revolution I follow a few capitalist practices that flourished in the supportive environment of 17th-century England and became the key features of the dominant economic system of the 21st century. Why did it take so long for capitalism to emerge from the cocoon of tradition?

In the 17th century the profitability of some English agricultural and manufacturing initiatives impressed contemporaries. At the same time, natural philosophers were proving the existence of a vacuum and measuring air pressure. None of this would have had any impact on the world of work where people and animals sweated in mine shafts and near blast furnaces had not the physical laws the naturalists studied lent themselves to devices for lifting, pushing, and rotating objects. Entrepreneurs then began adapting the steam engine, the pivotal innovation of the 18th century, to old ways of manufacturing and transporting.

William Hogarth’s The Industrious ‘Prentice Lord-Mayor of London, 1747. From Thomas Clerk, The Works of William Hogarth (London, 1821).

With Newton’s physics came a diffused conviction that nature could be made to work for human beings; its forces could be understood and controlled. Enthusiasts wrote books simplifying the new science. They found a ready audience. In 18th-century England there was a vibrant intellectual scene, nourished by a plethora of civic organizations, self-improvement societies, bookstores, periodicals, pubs, and plays. A teenage Ben Franklin, visiting London to learn the mechanics of printing, discovered Newtonian physics, as did an ambitious exciseman named Thomas Paine. About the same time, Voltaire, destined to be the signature philosopher of the Enlightenment, spent three years there and pronounced Newton’s theory a human triumph.

Once capitalism’s amazing power to generate wealth was detected, most countries—at least in the West—wanted part of the action. And it was relatively easy for other countries to copy English innovations; the copiers didn’t have to replicate the complex of propitious factors necessary for capitalism to install itself the first time. They could also discriminate between what they wished to copy and what they found distasteful in the modernizing dynamic of capitalism.

Western Europeans began revising their cultural forms, taking up new tastes, and talking with a fresh vocabulary about the impact of private enterprise on the welfare of the society as a whole. In time, traditional ways of acting and thinking lost their controlling power. The value systems of the past came from a world of scarcity. Traditions ennobled values compatible with restraint. Capitalism undermined that system and launched a culture of its own based on rising expectations and liberal morals. More properly, it launched diverse cultures as each country created its own mix of innovation and tradition.

By the end of the 19th century, it was the United States and Germany that were nurturing the cutting-edge innovations in chemistry and electricity. Constant innovations didn’t come without cost, because every improved device rendered obsolete its predecessor. Prodded by the lure of stronger sales and higher profits, innovators hurt established industries. The 20th-century Austrian economist Joseph Schumpeter captured the essence of capitalism in the phrase “creative destruction” of the old by the new. Rarely has anyone so precisely hit the nail on the head.

Innovation fueled the relentless revolutions of capitalism, revealing its most striking feature to be its inextricable connection with change—the constant disturbance of once stable material and cultural forms. While it destroyed venerable institutions and settled communities, capitalism also opened up to a significant proportion of men and women in the West the possibility of organizing their energy, attention, and talents in order to forge new trade links and meet old needs with new commercial products. There were more failures than successes, and the successes brought unintended consequences. Turbulence was written into the system, but capitalism had already become self-sustaining before anyone pointed this out.

Capitalism was never just an economic system. Its focus on enhancing production through private initiatives impinged on every facet of life and was itself affected by every institution that shaped its participants. Where commerce could live within the...