The Newer History of Capitalism

Robert Wright has a blog post about Why the History of Capitalism Subfield Got Slavery (and Almost Everything Else) so Terribly Wrong His argument is that because history departments abandoned economic and business history, there was no one with expertise in these subjects to guide new scholars when interest in economic issues re-emerged. The evidence that history departments largely abandoned economic and business history is irrefutable, and I certainly wish that they would pursue his remedy of hiring some highly qualified economic and business historians. However, I am not entirely persuaded by his argument. I am not persuaded because I think that the problems he points to arose more from the failure to follow traditional standards of historical research than lack of knowledge in economics. In addition, at least some recent scholars working in “the history of capitalism” subfield seem to have found ways to deal with lack of expertise within history departments.

The problem with the work of people like Baptist and Levy is less the bad economics than the bad history. It is true that Baptist is arrogantly ignorant of economics, but it is not clear that the problem of Baptist’s misrepresentation of the historiography of slavery would have been resolved by a little more knowledge of economics. One only needs access to google to discover that his claim that before him most economists and historians believed that slavery was inefficient was false. His procedure for estimating the economic importance of slave produced cotton is nonsense, but the biggest problem is that he made up the numbers that he used. Even if he had paid attention in Principles of Macroeconomics and used something resembling national income accounting, his calculations still would have produced crap because he think it is okay to just make up evidence rather than deriving it from historical sources. Yes, Baptist does not understand the meaning of the term productivity, but the bigger problem is that he misrepresents the sources that he claims to be using to explain productivity growth. He claims that slaves used the term “pushing system” but it is not in the narrative that he cites or any other source that anyone has presented. He re-wrote the story of the whipping machine from Henry Clay’s narrative to make it fit his argument. Narratives that he relies upon generally paint a much different picture of picking than Baptist. Baptist argues that enslaved people under the force of harsher and harsher pushing were forced to develop techniques to pick more quickly. To explain productivity increases in the antebellum period these techniques can’t be unique to individuals they need to be passed on and further developed. In contrast, slave narratives frequently emphasize inherent dexterity and the age at which one starts picking as determinants of speed; there is no mention of innovations in picking techniques being handed down. Here is a recent post that has links to other posts about the numerous problems in Baptist’s work and here is the post about his rewriting of the story of the whipping machine.

Similarly, Levy’s sloppiness with sources seems to be the cause of his confusion about economics rather than the other way around. Suggesting that modern use of the term risk (and in fact risk itself) only dates to the mid-nineteenth century is a failure historical scholarship not economics. Using George Perkins as his source on the Panic of 1907 without any recognition that many people regarded Perkins as one of the people who had perpetuated the Panic is a failure of historical research not business or economic knowledge. Making Veblen’s work the focus of a paper and then repeatedly cite them incorrectly is less a problem arising from his lack knowledge of economics (most economists don’t know anything about Veblen) than it is a problem arising from his sloppy handling of his sources. Knowing a little more about economics is not going to help someone who does not read carefully enough to know that Veblen was writing about pecuniary magnates not pecuniary magnets. In other words, I do wish that Baptist and Levy and others had tried to learn a bit more about economic and business history before deciding to write about it, but their bad economics is not nearly as much a problem as their bad history.

Here are links to post describing my concerns about Levy’s work about risk and capital.

Economists might still disagree with them, but I don’t think they would express as much hostility toward them if these historians of capitalism had they displayed the skills generally associated with historical training: accurate historiography, and careful and faithful use of their sources.

The good news is that in the last year or so I have read good books by historians, examining subjects that probably fit into the history of capitalism subfield. A partial list of these books would include Noam Maggor’s Brahmin Capitalism, Anne Fleming’s City of Debtors: A Century of Fringe Finance, Josh Lauer Creditworthy, Caitlin Rosenthal Accounting for Slavery, Daina Ramey Berry The Price of Their Pound of Flesh. I’m pretty sure from interaction on twitter that Maggor and Rosenthal identify with “the history of capitalism” label, and Lauer’s book was published in Columbia Studies in the History of U.S. Capitalism series. I did not see in these books the problems that I identified in the earlier history of capitalism. None of these is economic history the way it is typically written by economists now, but the authors appeared to take advantage of the work of people in other disciplines, including economics. Most mentioned at least one economist economic historian in their acknowledgments, Caitlin Rosenthal and Daina Ramey Berry both thank several economists. Even if experts in the field are not in your department, they are out there, and there is a good chance they are willing to help. Keri Leigh Merritt is another example of a historian working on economics related issues who has gone out of her way to interact with economists.  

In short, I am optimistic about the ability of historians who want to write about economic and business history. I wish I was as optimistic about the future of their ability to get good jobs

P.S. Wright also suggests that the work of people like Baptist is driven in part by a desire to provide support for reparations. Actually, it is probably more accurate to say that Wright is suggesting they want to make a show of supporting reparations.

“The general gist of their story is that slavery made America rich so its government ought to make restitution to the descendants of slaves.”

I have to say I have never understood why reparations would need to be justified by a showing of the amount of benefit derived from slavery. In general, the law compensates people for the damage done to injured not the benefit to the injurer.

Women in Economics

Marginal Revolution University is starting a series on Women in Economics. 

It reminded me to post that the St. Louis Federal Reserve (which happens to be the best Fed) already has a podcast series on Women in Economics.

Ayn Rand and American Business History

I saw a celebration of Ayn Rand online the other day (her birthday was Feb. 2). So thought I would post this, though I don't think you can really describe it as being in honor of her birthday.

I don’t like really like Ayn Rand’s fiction. If I just thought it was bad fiction, I would probably ignore it. I usually only criticize fiction when it is masquerading as history. But many people seem to think that Rand’s fiction has important things to say about reality. One of the central messages seems to be that progress depends on the efforts of a few great people. In general, American’s seem to like “Great Man” theories of business history. If you want to sell books write another big biography of J.P. Morgan, Ford, Rockefeller, Vanderbilt, or Carnegie. Rand’s heroes are extreme versions of the great man theory of business history. They tend to start with nothing and struggle ceaselessly against both the government and all of the ignorant, incompetent and just plain lazy people that surround them.

For instance

“Nathaniel Taggart had been a penniless adventurer who had come from somewhere in New England and built a railroad across a continent, in the days of the first steel rails.” “He never sought any loans, bonds, subsidies, land grants or legislative favors from the government.” He never talked about the public good.” “Taggart Transcontinental was one of the few railroads that never went bankrupt and the only one whose controlling stock remained in the hands of the founder’s descendants”

Or consider the story of Henry Reardon

Henry Reardon began working in the Minnesota iron mines when he was 14 and had built a business empire by the time he was 30, struggling constantly against the incompetence of those around him. Of the times that he had worked for others, “All he remembered of those jobs was that the men around him had never seemed to know what to do, while he had always known.” Even after he was the boss, he remembered “the days when the young scientists of the small staff that he had chosen to assist him waited for instructions like soldiers ready for a hopeless battle, having exhausted their ingenuity, still willing, but silent, with the unspoken sentence hanging in the air: “Mr Rearden, it can’t be done—”

The problem is that these stories do not resemble the stories of actual business history.

I have seen it suggested that Nathaniel Taggart was a thinly veiled version of James J. Hill, the Empire Builder, who built the Great Northern across the northern plains without any government grants or assistance.

Hill was a very successful railroad executive, but he did not build the Great Northern without government assistance. First, as John Rea noted years ago the Great Northern was built on the foundation of the failed St. Paul and Pacific Railroad, which had received 3 million acres in land grants (Rae, John B. "The Great Northern's Land Grant." The Journal of Economic History 12, no. 2 (1952): 140-145). One might, of course, argue that Hill and his partners did not directly receive the grants; they had to pay for them when they purchased the bankrupt railroad (though it should be noted that one of Hill’s partners was a lawyer who was also serving as the trustee for the bondholders). So, let’s put those land grants aside.

The sort of subsidies that railroads like the Union Pacific received in which they received large grants of land on each side of the road, were generally not an option when Hill was building the Great Northern. In the 1870s, the federal government had shifted away from providing land grant subsidies. But that does not mean that the Great Northern did not receive any government land. Any incorporated railroad could obtain access to public land for the construction of a railroad and related structures like stations by using the General Railroad Right of Way Act of 1875. We know that the Great Northern used the Act because it went to court to contest the rights that had been granted under the act (Great Northern Ry. Co. v. Steinke and Great Northern Ry. Co. v. United States.)

Unlike the land grant subsidies, the Right of Way Act did not bestow special treatment on particular railroads. Consequently, it might be viewed as another step toward an open access order, like general incorporation and free banking laws. On the other hand, it does not seem reasonable to claim that  being allowed to build on public land is nothing. The federal government had purchased the land in the Louisiana Purchase, and the federal government had driven Native American on to reservations to make way for railroads and settlers.

This is a map showing the general location of Native American tribes in the mid 1800s

Minnesota, North Dakota, Montana, Idaho and Washington, were not un-populated lands waiting for James J. Hill to build a railroad and promote pioneer settlers. They first needed to be depopulated. This was done courtesy of the United States government. These are the locations of Native American reservations when Hill went to build his railroad.

It turns out, however, that even driving Native Americans on to reservations was not enough for Hill, because one of the best routes required going through a reservation. Hill appears to have been able to put aside his aversion to the government to lobby to either have the size of the reservation reduced or be given the right of way to build on the reservation (Smith, Dennis J. "Procuring a right-of-way: James J. Hill and Indian reservations 1886-1888." (1983) see also White, W. Thomas. "A Gilded Age Businessman in Politics: James J. Hill, the Northwest, and the American Presidency, 1884-1912." Pacific Historical Review 57, no. 4 (1988): 439-456.

These are the reservations in 1870

These are the reservations in 1888 (both maps are from Smith, "Procuring Right of Way")

Fans of Hill, like Burton Folsom see only Hill’s business genius: “James J. Hill showed us the right way to build infrastructure. He built slowly and chose the best routes. When Hill learned that the best route west probably lay through the Marias Pass in Montana, he was determined to build his railroad there. The explorers Lewis and Clark had traveled through the Marias Pass and discussed it in their diaries. But in the 1880s, no one knew where it was. Hill’s chief engineer, John Frank Stevens, trekked through the Rockies in Montana with a Blackfoot Indian guide named Coonsah. The pair located the Marias Pass, and Hill used that shorter route to save many miles of construction.” But we should remember that the crossing of the Marias Pass was preceded by the Marias Massacre in which U.S troops killed around 200 Blackfeet men, women and children.

In other words, Nathaniel Taggart and the Taggart Transcontinental are fictions based on myth. 

The self-made man, who not only receives no aid but must constantly battle the weak and stupid people around him, is also not what American business history looks like. Pamela Walker Laird’s Pull picks apart this myth, exploring the many ways in which self-made men like Ben Franklin and Andrew Carnegie actually benefited from the aid of others.

Henry Ford’s “invention of the automated assembly line” depended on the work of Charles Sorensen, Walter Flanders, Clarence Avery, and Ed Martin. Edison worked with the mathematician Francis Upton to develop his version of a light bulb. Mc Donalds is the result of both the McDonald’s brothers’ vision of a fast food restaurant and Ray Kroc’s vision of how far it could be taken.

The story of Ellis Wyatt, who “had discovered some way to revive exhausted oil wells and he had proceeded to revive them” is illustrative. In Rand’s imagination an entire region was revitalized and “One man had done it, and he had done it in eight years.” The process of getting oil out of places that people had thought it impractical if not impossible sounds a lot like fracking. In reality, many people played a role in developing fracking. In 2006, the Society of Petroleum Engineers honored nine people as pioneers in the development of fracking.

To be clear, I do believe that what Schumpeter referred to as the creative response is central to economic growth and development. And I believe that an open access society in which people are generally allowed to pursue these creative actions is likely to be most conducive to human welfare. I am, after all, and economist. I like voluntary exchange in markets and I think people respond to incentives. I just don't believe in the sort of philosophy that regards whatever someone earns as "the fruits of their labor" as if the amount of fruit that you get in life doesn't depend crucially on the society your were born into and you place in it, things that have nothing to do with your labor.    I don't see evidence that the creative response the creative response is the result of a select group of great people struggling against the ignorant and ignoble masses who seek to hold them back. My reading of history suggests  that these creative people depend upon both the help of others, their society, and an effective government. 

But why should I be concerned about an inaccurate picture of business history in a work of fiction? I'll just leave you with this quote. “Any refusal to recognize reality, for any reason whatever, has disastrous consequences.”

Loan Sharks Posts Redux

Blogger tells me that a lot of people are looking at this post on loan sharks from 2017.  That post is mostly about what I regarded as a big problem with Charles Geisst's book on loan sharks. If someone is looking for a more substantial post on loan sharks you should check out this post from 2016. 
It also contains this cool cartoon

Lyra

Since several students asked about my dog, here is a picture of Lyra

Since this blog is supposedly about economics, here is a link to wagaroo a non-profit that helps match people in need of pets with pets in need of people. It was founded by University of Mary Washington econ alum Christine Exley, who went on to earn her Ph.D. at Stanford and is now a professor at Harvard Business School. Here is an interview that Frank Conway did with Christine at Economic Rockstar.

Here is the Fredericksburg SPCA, which is where Lyra came from.

The History of the History of Sears and Jim Crow

After the announcement that Sears had filed for bankruptcy Louis Hyman put out tweet thread about Sears role undermining Jim Crow in the South. The thread got thousands of likes and the story was picked up by The Chicago Tribune, The New York Times, The Washington Post, NPR, and Vox. I have posted a copy of the tweet thread below.

The thread argues that Sears catalogs helped to undermine Jim Crow. To preserve racial control, Southern store owners tried to keep African Americans in the South from using Sears, but Sears responded to this opposition. Sears not only acted to undermine Jim Crow it did so intentionally.  

Scott Cunnigham raised an interesting question to economic historians on twitter about how one might try to estimate the effect of the Sears catalog. So far as I know, no one has yet done that, but Elizabeth Ruth Perlman and Steven Sprick Schuster may be taking a stab at it (see here).

In addition, to the quantitative significance of the catalog, I wondered what sources the story was based upon. The story seems plausible, but what evidence is it based on? Like most people, Hyman doesn’t provide references for his tweets. The video also does not state the sources for the story, and it did not appear to be included in the American Capitalism Reader that he and Baptist put together. I tweeted a reply asking him about it, but it must have been one of the thousands of responses to the thread. 

Although I do not know for certain what source or sources Hyman used, Grace Elizabeth Hale told a similar in her Making Whiteness: The Culture of Segregation in the South, 1890-1940 (1999). Here are excerpts from pages  and  of Making Whiteness.

The story is essentially the same. There is, however one noticeable difference between the two stories in Hale’s version, even though she is writing a book about race, she says that store owners refuse to sell to people who had not paid their accounts. In Hyman's version store owners refuse to sell to people because they are black. In the first, store owners are opposing a competitor regardless of who the customer is. In the second, the refusal is based on race. It is suggested, based upon the statement from the catalog about giving letters and money to the mail carrier, that Sears responded to these actions by the store owners. But the full quote from the catalog was "IF YOU LIVE ON A RURAL MAIL ROUTE, just give the letter and the money to the mail carrier.." The all caps is in the original. The instructions were repeated in Swedish and German.

Not only is the story in Hyman and Hale the same, much of the wording is the same. Both contain the quotes: "just give the letter and the money to the mail carrier and he will get the money order at the post office and mail it in the letter for you" and “these fellows could not afford to show their faces as retailers.” It seems reasonable to infer that either Hale was Hyman's primary source or they both drew from the same sources.

Hale sources are provided in two footnotes.

The first footnote is for the statements that rural storekeepers refused to sell stamps or money orders to some customers who owed on their accounts and the statement from the Sears Catalog about giving the money to your mail carrier. Thomas Clark states that : "Sometimes a customer was brought under control by the merchants refusal to order goods until he had paid his bill (page 73)."  Clark was a prominent historian, but his The Southern Country Store does not provide citations. The other sources in that footnote refer to the catalog statement about giving money to the mail carrier. It is not clear, however, that Sears was trying to counter the actions of store owners rather than simply informing rural residents throughout the country that they could take advantage of rural free delivery and did not actually have to make a trip to the post office.

The  other footnote cites three sources in support of the statements about rumors that Sears was black and the burning of catalogs: Stuart Ewen and Elizabeth Ewen Channels of Desire: Mass Images and the Shaping of American Consciousness published in 1982, Robert Hendrickson The Grand Emporiums: The Illustrated History of America’s Great Department Stores published in 1979, and Gordon L. Weil Sears Roebuck USA: The Great American Catalog Store and How it Grew published in 1977.

Ewen and Ewen say pretty much the same thing that Hale and Hyman did

Ewen and Ewen do not mention the refusal to sell stamps and money orders, but they do have the stories about rumors that Sears and Montgomery Ward were black, including the quote about "these fellows." They also do not cite Hendrickson and Weil.

Hendrickson also tells of rumors about race and catalog burning, but does not mention refusals to sell stamps or money orders:

Weil also describes the opposition of small retailers and their use of racial rumors.

So far the trail of citations has led us to Weil, who largely says the same things that Ewen and Ewen did, but we can see that the quote about "these fellows" not showing their faces isn't actually evidence; it was just Weil’s interpretation.

What sources did Hendrickson and Weil base their interpretations on? Good question. Neither Hendrickson or Weil is an academic history. There are no notes or references. Weil does, however, mention in his introduction that Catalogues and Counters: A History of Sears Roebuck and Company by Boris Emmet and John E. Jeuck was useful. (Seeing it listed on Amazon for $246 makes me feel fortunate to have picked up a copy at the library book sale for $2). 

Emmet and Jeuck also tell the stories about rumors that Sears and Roebuck were black, and the story about small town merchants burning catalogs. Emmet and Jeuck were academics and their massive volume is heavily footnoted. The footnote in regard to the rumors about Sears and Roebuck being black cites an unpublished manuscript on the company's history written by Alvah Roebuck, suggesting that he remembered hearing such rumors as late as the 1930s. The footnotes about catalog burning and other opposition from small town merchants cites page 105 of Asher and Heal Send No Money Asher was a former Sears executive. Like the books by Weil and Hendrickson it does not cite sources. Page 105 does state that "George Milburn, in his book entitled "Catalogue," reveals the whole history of the home dealer's campaign against the mail order houses." George Milburn's Catalogue was a satirical novel about the the effects of the wish book on a small Oklahoma town.

I believe that I have now arrived at the end of the line. The claim about store owners refusing to sell stamps or money orders to blacks does not seem to appear in the previous literature. The claim that store owners refused to provide services to people whose accounts were not up to date appears to rest on Clark's statement in The Southern Country Store, which he does not provide any sources to support. Sears definitely told people they could give their money directly to postal carriers, but I did not find any evidence that they did this because of opposition from country store owners as opposed to just trying to make things easier for their customers. The claim about rumors that Sears and Roebuck were black appears to ultimately rest on the recollection of Roebuck in an unpublished manuscript. I wasn't able to trace the rumor about Ward past Weil and  Hendrickson. The claims about catalog burning appear to be based on a novel.

The bottom line of all this is that we know very little about the impact of Sears in the South or other rural areas, and consequently we no little about its ability to undermine some of the results of Jim Crow. It is quite plausible that Sears provided large benefits like those suggested by Hyman, but we don’t know. It is possible that store owners spread rumors about race, but we have only Roebuck's recollection to that effect. It is possible that they organized catalog burnings, but we do not know. It is possible that some of Sears actions were attempts to counter racism, but we don’t know. 

Hyman’s tweet thread shouldn’t serve as a call to debate whether or not Sears was an example of the positive aspects of capitalism. It should be a call to historians to go out and actually find out what Sears did.

Accounting for Slavery

I got around to reading Caitlin Rosenthal’s Accounting for Slavery: Masters and Management. Rosenthal does not need me to sing her praises. Plenty of people will be doing that. I’m just doing it because I feel like it.

I do want to warn people that they should ignore some of the press for the book that suggests it is about how slavery inspired modern management. Rosenthal explicitly states that the book is not about the origins of modern management. She draws parallels with modern management practices, but she does not argue that they can be traced back to slavery.

I use the phrase management practices because the subtitle is more accurate than the title: the book is about much more than accounting. Rosenthal examines the techniques that slave holders developed to track productivity, record experiments, organize the flow of information up and down hierarchies, calculate the value of their investments, etc. She shows how these techniques were systematically disseminated through the publication of books with standardized forms, articles in periodicals, and what were essentially how-to manuals on plantation management.  She makes the case that an understanding of the degree to which slave owners developed sophisticated management practices that parallel those in modern management adds to our understanding of both business history and the history of slavery. In telling the story she also makes clear that she would like to bridge the divide that currently exists between some economist economic historians and some historian economic historians. If anyone has a chance of doing that it might be someone who had Sven Beckert and Claudia Goldin as dissertation advisers.

Early in the book Rosenthal introduces an organizational chart for a large sugar plantation, and she describes the parallel between the way she created the chart and the way that Alfred Chandler created organizational charts to demonstrate the development of management practices at large industrial firms. The parallel with Chandler can be extended. Chandler argued that management is an important element of technology. Institutions and developments in production technology in the United States created possibilities to profit from mass production, but to take advantage of these opportunities business people had to develop the techniques to manage these large business enterprises. Rosenthal shows that institutions (slavery) and technology (such as the cotton gin) created opportunities to profit from large scale agricultural production, but to take advantage of these opportunities business people had to develop techniques to manage these large agricultural enterprises.

No book is perfect. I think she slightly exaggerates the neglect of slavery by business historians. For instance, Blaszczyk and Scranton’s Major Problems in American Business History gives as many pages to business in the slaves south as it does to technology in the age of big business. Nevertheless, her overall point that the business of slavery has been treated as distinct from the main story is accurate. She also gives too much credit to Edward Baptist, though she at least relegates this to a footnote. I’ll write a separate post about why I disagree with her assessment of Baptist.  For now, I want to emphasize that I think this is an important book.

Finally, I want to note that it is one of the most well written books I have read in a while. If you are looking for a historian who wants to try to impress you with academic jargon or simply show you how many five dollar words they know, this is not the book for you. On the other hand, if you want to see what it looks like when an author strives to make complicated things as clear as possible you should take a look at this book.

If I were betting on future winners of the Hagley Prize for the best book in business history, I would put my money on Accounting for Slavery.

Accounting for Capitalism

I read Michael Zakim’s new book Accounting for Capitalism: The world the clerks made last week. I saw Tyler Cowen’s brief review on Marginal Revolution, and Cowen included the following excerpt from the book

A single block fronting Wall Street in 1850 was thus home to seventeen separate banking firms, as well as fifty-seven law offices, twenty-one brokerage houses, eleven insurance companies, and an assortment of notaries, agents, importers, commission merchants, and, of course, stationers.  A rental market for office “suites” developed apace “fitted up with gas and every other convenience,” which also included newly invented “acoustic tubes” that allowed managing partners to communicate with porters in the basement and clerks in the salesroom without ever having to leave their desks…

All this office activity spurred a flurry of technological spillovers that included single standing desks and double-counter desks, sitting desks featuring nine or, alternately, fifteen pigeonholes, and drawers that could or could not be locked.  “Office chairs capable of swiveling and tilting became available as well, together with less costly “counting house stools” that lacked any upholstery.  Paperweights, check cutters, pen wipers (the woolen variety being preferable to silk or cotton, which tended to leave fibers on the nib), pencil sharpeners, rulers, copying brushes, dampening bowls, blotting paper (less important for absorbing excess ink than for protecting the page from soiled hands), wastepaper baskets, sealing wax (including small sticks coated with a combustible material ignited by friction and designed to be discarded after a single use), seal presses, paper fasteners, letter clips (for holding checks while entering them into the daybook), writing pads, billhead and envelope cases, business cards, receiving boxes for papers and letters, various trays (for storing pins, wafers, pencils, and pens), and “counting room calendars” spanning twelve- or sixteen-month cycles — all became standard business tools.  So did the expanding inventory of “square inkstands,” “library inkstands,” and “banker inkstands” designed with narrow necks which prevented evaporation and shallow bodies that kept the upper part of the pen from becoming covered in ink, thus avoiding blackened fingers and smudged documents.

He then added that “There is then a whole other paragraph about the different kinds of paper that developed and their importance for clerical work.  This is perhaps the most thorough book I know on the importance of “small” innovations, and it is also a useful book on the history of accounting.”

The impact of small technological changes and the history of accounting, however, are not the central concerns of the book. Zakim’s book is more about the subtitle “the world the clerks made.” It is business history, but it is more on the cultural history part of the business history spectrum than the technological, accounting, or economic history parts of the business history spectrum. Zakim is not trying to explain changes in technology or accounting, their spread, or their impact, or even changes in the number of clerks and the functions they served. Instead, he is interested in the changes in thepeople perceived the economy and their place in it. Those are interesting questions, nevertheless, I found the book frustrating.

Capital and capitalism are words that have multiple definitions, but Zakim doesn’t define how he is using them, and their meaning is not made clear by the context. Often the use does not seem consistent with any of the common uses of the terms.

Here are some of Zakim’s statements about capitalism:

“Anyone could become a capitalist, Americans were told, a possibility that acted as a “spur to exertion to the very news boys in our streets,” as did the popular intelligence that the great majority of the country’s businessmen had “commenced life behind a desk or the counter.” This did not mean, however, that everyone actually became a capitalist, It did mean, however, that everyone became capital---or what we so casually refer to as “human capital” today---rendering their own lives the subject of utility and enterprise.” (Zakim page 7)

“The individual became an asset worthy of the highest credit rating in a cash fraternity born of the axioms of purchasability and personhood. He became human capital.” (Zakim page 70)

“This perpetuum mobile of life under capital---of dialectics at a standstill”---continues to induce bouts of chronic fatigue and irritable bowels, panicked concerns with one’s diet fed by a vast catechism of self help literature, and the body mass ratios of exercise routines including performances of manual labor at the local cross fit gym. Surely too, the treadmill desks of today are worthy successors to Dr. Halsted’s equestrian exercise chair of 1846. Both mediate between our humanity and the exigencies of the market, seeking to ameliorate the fraught relationship between “Mammon and Man” that proves to be the common denominator of capitalism’s reinvention of itself.” (Zakim page 194)

“Pen and paper already engendered such a virtual reality, which was the condition for capitals transmigrations from place to place, and form to form, passing between its merchant, industrial and financial incarnations, and then back again, imbuing the human imagination with the same values of fungibility. The history of capitalism is not, then, about the economic origins of society, but about the expressions that economy assumes in society, about how capital acquired consciousness.” Economists call this process “cognitive regulatory capture.” (Zakim page 197)

Capital and capitalism appear frequently, but Zakim does not say what he thinks those words mean, and it is not clear how his use fits with common uses of the terms. Within economics capital is often used to mean two different things. The most frequent use is as a factor of production. Undergraduate students are taught that output is a function of land, labor, capital and technology. In this context capital is anything that has been produced to enable more production in the future. It includes factories, office buildings, and equipment. It also includes things like roads, bridges, and ports. In addition, it includes knowledge and skills that people have obtained that enable them to be more productive, which is referred to as human capital. I’m pretty sure Zakim’s use of “human capital” is not the same as economists.  Capital is also used, especially in discussions of finance and banking, to refer to the stake of the owners of a business. For instance, after the last financial crisis there was a lot of discussion about increasing capital requirements at banks to discourage excessive risk taking and provide a cushion in case some loans or investments go bad.The Marxist view of capital, as best I recall, is distinct from but related to both of these definitions of capital. I can't tell you what capital is for Zakim, only that it is important.

The book alternates between the sort of concrete descriptions that Cowen highlighted and the less concrete statements about capitalism, like those I have included here. Consequently, I found the book interesting but somewhat frustrating. It is not clear to me what it means to say that “capital acquired consciousness.” I don’t think it is what economists call cognitive regulatory capture, but it may be similar to it.

If you are interested in learning about the evolution of information technology and its impact of business and the economy I would suggest that you might take a look at JoAnne Yates Control Through Communication: The Rise of System in American Management , Margaret Levenstein Accounting for Growth: Information Systems and the Creation of the Large Corporation, or Josh Lauer Creditworthy: A History of Consumer Surveillance and Financial Identity in America. You may also find some of the chapters in Daniel Raff and Phil Scranton (editors) The Emergence of Routines: Entrepreneurship, Organization and Business History interesting as well.