Braudel, Fernand. The Wheels of Commerce; Civilization and Capitalism 15-18th
Century. Vol 2. trans. Sian Reynolds. New York: Harper & Row, 1982.
In this second volume Braudel focused on the systems that supported
capitalism. Braudel 's analogy was of exchange as a river flowing between
consumption (vol 1) and production (vol 3). This image of a narrow and
turbulent divider suited his purpose of focusing on circulation in volume
2. He argued that the capitalists and capitalism rose before there were
"means of production" to control, and not being linked to production, rested
rather in the exchange of bills, the field of credit and banking, and long
distance trade -- essentially speculation upon the lack of complete information
from one place to the next. He began with the instruments of exchange themselves,
turns next to the markets and the economies, centered on what capitalism
is, and how it operates "away from home and "at home," and concluded by
describing the pluralism of society and how capitalism took its place in
classes, religions and cultures.
The simplest and most transparent means of exchange was the weekly
market. Towns then organized markets, oriented the city around the halles
that housed the larger markets, and encouraged markets to become daily
events. Large markets were a sign, just as cathedrals were, of the economic
health of a region. "Wherever the market is absent, or insignificant, wherever
money is so rare that it has a virtually explosive value, one is certain
to be observing the lowest plane of human existence, where each man must
himself produce almost all he needs." (59) Pedlars extended local markets,
and flocked to places where there was a breakdown in the system (as they
still do).
Monthly or yearly gatherings become fairs organized by large cities.
In these markets lie the roots of capitalism -- the opportunity to meet
and clear up trade imbalances and the opportunity to hire labor along with
goods. Fairs were eliminated when the exchange of goods and bills of exchange
became sufficiently regular, with sufficient warehouses to superceded the
need for a physical gathering, and flourished where stockpiling occurred
and other systems of trade broke down. Also important to this picture were
the Exchanges -- meeting places for bankers and brokers, maritime insurance
and currency dealers -- to be found in every big city. These exchanges
were organized independently of the fairs. "It is clear then that in the
eighteenth century, the instruments of big business were becoming more
numerous and diversified. Fairs and Exchanges however still remained at
the heart of merchant life." (81)
For a merchant risking his money on trade, the most important part
of the transaction was to see that the return journey was profitable. "If
in certain circumstances a trade circuit could not be closed at all, it
was clearly doomed to disappear." (142) Financial circuits were dependent
on sound and widely accepted bills of exchange. Braudel also mentions some
identifiable nationalities that traveled, were a minority in the various
countries where they settled, stayed in touch with each other because of
common cultural bonds, and formed merchant networks: among these he lists
Italian, Jewish, and Armenian firms and families.
Where then did modern capitalism start? Braudel argued that capitalism
has always existed where trade networks exist. "Above the markets, the
shops, and the travelling pedlars, rose a mighty superstructure of exchange
in the hands of extremely skilled operators. This is the level at which
one finds the major workings of the large scale economy, and necessarily
of the capitalism which could not have existed without it. " (81) But where
there key industries, or key organizational schemes? Taking the second
question first, Braudel followed the model of Hubert Bougin who offered
four categories: the largest category, the family workshop with a master
and one or two apprentices, the scattered manufactories which all worked
on one product and were linked by the product and the merchant entrepreneur
who organized the work (e.g. getting the wool from spinner to weaver and
dyer), the concentrated manufactories who brought all the processes together
under one roof (breweries, tanneries, glassworks), and finally factories
which were "equipped with machinery using the additional energy sources
of running water and steam." (301) "Outside Europe, the first two categories
predominated" (302), but Braudel remarked that despite their rich craft
tradition, the development of complex tools in China and India was hindered
by the sheer numbers of people -- no labor saving devices were required.
When poverty and rising populations forced the migration of these small
home artisans to the cities, a seasonal and regular labor force was created.
City- organized guilds were an organizational force, especially as they
fostered the division of labor, as was the putting out system (Verlagssystem)
in the countryside; the merchant then became the mediator between organizational
schemes in town and country. If these were some of the organizational schemes,
what were the key industries? Textiles appear to be one key industry, first
wool, then silk and finally calicoes. And mining was the other -- both
of these dominated and organized by merchants and supported by technology
"it was a turning point for both technical and working conditions." (322)
As mines deepened, the money required to establish and run them increased,
so the wealthy alone could afford to pursue organizing mines. Manufacturing
was minor but important for technical progress. "The growing part played
by capital -- both fixed and circulating -- is beyond doubt. The initial
investment was sometimes great." (338) However, in general Braudel argued
that choices made by capitalists during this time tended to minimize industry
342 because capitalists tended to take their profits out of industry and
invest elsewhere where higher gains were to be had. Braudel suggested that
industry in a region rose and fell (346) because there was not enough demand
or capital in the lower classes to support more than one industry, and
he noted that investment in transportation offers another view of the modernity
of a region.
The model that Braudel generates is as follows: there was a three-fold
grouping: commodities or articles consumed on the spot, marketed over short
distances, and finally it was big business -- a "capitalist game" -- when
it was gathered and transported over long distances. (456)
Once again he argues that the proportional size of an economic activity
is not tatamount to its importance. Although bankindg and trading were
a relatively small proportion of the economy in England (8 million pounds
of 600 million) it nevertheless represented the business model of the future
and the dawn of colonialism, two significant (trends) (453).
Braudel concluded with a view of capitalism on home ground and the
groupings within society.
The real impetus for capitalism, he asserted, was not the division
of labor in manufacturing, but the division of labor in capital and trade
markets, and that rested on the "spontaneous expansion of the economy,
at the grass roots." (382)
Who put up the money? Small and large investors were a part, but large
investors were the most significant.
Credit and banking?
At the heart of Braudel's work is another question: why should there
be so few wealthy people in any society, at any time? Gurvitch's society
of societies (5 societies)
.