INT 200: Global Capitalism and its Discontents

From the Neolithic Revolution to the Ancient Near East

What is Capitalism?• 5 definitions

– Capitalism is an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

– Capitalism is a system in which individuals and combinations of individuals compete with each other to accumulate wealth by buying the rights to used land, labor and capital in order to produce goods and services with the intention of selling them in a market at a profit

– A way of organizing an economy so that the things that are used to make and transport products (such as land, oil, factories, ships, etc.) are owned by individual people and companies rather than by the government.

– An economic system essentially based on the private ownership of the means of production, distribution, and exchange.

– An economic system in which the means of production are privately owned and producers compete to maximize their profit

What is Capitalism?• synonyms: free enterprise, private enterprise, free market,

laissez faire, etc.• 5 elements:

– private property rights– contracts enforceable by third parties– markets with responsive prices; – pursuit of profits; and– supportive governments

• Capital:– Buildings and equipment; Improvements to land; People with special

knowledge or skills, etc. -- any form of wealth employed or capable of being employed in the production of more wealth

– Or more simply, means of production that are used to create goods or services

Hunter-Gatherers• small bands constituting an extended family or two• egalitarian; little social stratification, and what stratification

there is often isn't reflected in economic status• Little “property”• Some division of labor; no trade with

hunters or foragers, but perhaps some with collectors

• But little contact

The Neolithic Revolution• Nomadic hunting and gathering to sedentary herding and

harvesting– Domestication of plants and animals about 12,000 years ago allowed

humans to produce their own food– Villages and towns– Surplus food production– States, kingdoms, empires– Specialization and division of labor, trade, non-portable art and

architecture, centralized administration, writing, armies, priests, kings– centralized, patriarchal, and stratified

After the Neolithic Revolution• 3500 BCE technology allows humanity to overcome geography• Writing, wheel, roads, etc.• Trade routes and empires• Global religions and globetrotters

Babylonia / Ancient Mesopotamia• Complex peasant society• production at the village level

“domestic” – largely reciprocal exchange

• non-market exchange of goods or labor ranging from direct barter (immediate exchange) to forms of gift exchange where a return is eventually expected (delayed exchange)

• Barter is a system of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money

– Village based

Babylonia / Ancient Mesopotamia• Or “palatial” or institutional, dominated by large temple and

palace households– producers are in a servile status– labor specialization and redistribution– seasonal labor and the surplus produced– city based– second millennium onwards, the surplus

was centrally collected by means of a tributary system

Babylonia / Ancient Mesopotamia• Capitalistic? Not really

– No government backed interplay of private property rights, contractual relationships, or markets governed by supply and demand

• But, there was trade– Resources could be obtained by military raids, imposition of tribute, or

institutional give exchange with foreign rulers– Profit-oriented commerce in textiles and base and precious metals– Assyrian and foreign merchants imported textiles and copper to Assur;

nomads brought wool which were woven into textiles in home-based workshops often run by women (wives of merchants); other traders brought tin and lapis lazuli from Iran• “city hall” guaranteed contracts and the stability of weights for metals, established

diplomatic relations, limited competition from foreign merchants, collected taxes• Trading firms were normally family based, but caravan ventures were frequently

funded by naruqqum or “money bag” — pooled resources to finance the trader’s trip