Capitalists in Spite of Themselves: Elite Conflict and Economic Transitions in Early Modern Europe (review)

Capitalists in Spite of Themselves: Elite Conflict and Economic Transitions in Early Modern Europe. By Richard Lachmann (New York, Oxford University Press, 2000) 314 pp. $49.95

In Capitalists in Spite of Themselves, Lachmann presents an intriguing thesis explaining why capitalism took root in some places and not in others. Historians and other social scientists interested in the political and social institutions that shape economic growth should read this work. In Lachmann's view, conflict between elite groups trying to retain and enhance control over political institutions and economic production played a significant role in a society's transformation. Such rent-seeking behavior sometimes created opportunities for non-elites that resulted in adjustments in the balance of power. More important, it also effected new types of political and economic institutions, which are central to characterizing the development of capitalism. Lachmann further draws attention to the degree of randomness involved and thus to the complex nature of social relations; elites usually did not have control over final socioeconomic and political outcomes. The particular path that resulted from elite group behavior dynamics was crucial in determining the rate at which societies made the transition from feudalism to capitalism.

As evidence for this thesis, Lachmann describes in great detail various European regions at different points in time. In Renaissance Florence, for instance, opportunity for political and economic gain increased with greater conflict between rival factions. Much of Lachmann's work, however, focuses on analyzing large swaths of English and French history, specifically contrasting the evolution of the English political economy with that of France. In England, first under Henry VIII and then Elizabeth I and the Stuart kings, the monarchy succeeded in eliminating strong rivals like the Church and securing a position of horizontal absolutism. Each of these monarchs paid a price for this control, namely, a continuous transfer of privileges and property to elites who could potentially challenge the Crown. Eventually, this strategy culminated in civil war. In France, the monarchy never managed to eliminate the Church as the main rival faction, achieving instead a form of vertical absolutism, which involved establishing control over as many elites as possible at various levels of power.

Lachmann explains the economic and political decline in Florence, Spain, and the Netherlands on the basis of elite structures that foster economic and political stasis. The fall of the Netherlands from the position of commercial leader occurred as the same set of elite families focused its energies on retaining control over its interests rather than on undertaking new economic challenges. A similar hegemonic elite structure is cited as an important reason behind the decline of Spain. In Florence, once the Medici had gained control over vast areas of economic and political interests, Florentine economic activity could become "refeudalized."

An important contribution of Lachmann's research is to expose the various mechanisms of economic and political power and how they evolved in several different European regions. This discussion complements the current debate in economic-history circles about the importance of political and social institutions in promoting economic growth. Lachmann's thesis also provides many examples of the role of path dependence—that the presence or absence of capitalism in particular places is partially determined by what happened in the past.

A remaining challenge is to explain how Lachmann's arguments about the development of capitalism relate to the usual suspects in models of economic growth accounting—the growth of capital, the specialization of resources, and the development of technology and human capital. Scholars who propose any of these variables as providing the main impetus for great economic and social change need to consider the Lachmann thesis. They account for the increase in total output of capitalistic European nations, whereas Lachmann investigates the dynamics of the struggle over its distribution. Further insights could also be gained by extending Lachmann's thesis to other parts of...