Not quite done with Chapter 3 yet, but we first need to straighten something out. (As if Harvard-historian assclowns are listening to Den and will do better next time, but whatevs… let me indulge.)

A rehash of where we've been:

#3: "CHAPTER 2, We Get Capital-ISTS Without Capital-ISM"
#2: "CHAPTER 1, and the Historian Returns"
#1 Introduction: "INTRODUCTION, and the Trouble of Defining 'Capitalism'"
#0 Preface: "Sven Beckert Begins His Tale"

There are a few different ways to think about “capital.”
The lay person thinks of large balances in a bank account, or maybe lots of shares in a company... which is roughly OK as an illustrative example but doesn't get to the core of what capital really is. (And I would push back hard on saying "money" is capital, but then again bank balances aren't money so FIIINE #1417296)

The standard economist way is that CAPITAL is any sort of intermediary good that assists in the production of consumer goods; Austrians think of them as higher-order goods, because they don’t have direct consumer use (they’re at least one level “away” from consumers),

“All production is transformation and the whole economy can be imagined as a system of transformations wherein higher-order goods are modified for the purpose of becoming first-order goods.”“All production is transformation and the whole economy can be imagined as a system of transformations wherein higher-order goods are modified for the purpose of becoming first-order goods.”

*– Antony Mueller, “Carl Menger Explains the Nature of Goods”

A more general mainstream economics textbook would denote CAPITAL as a homogenous blob “K,” as opposed to L, labor, which together form the most basic production functions, Y. It encompasses the idea that production -- anywhere, anytime -- takes place using capital goods (at least, imputs into production) mixed with labor (because that's the prime mover in making things happen... until AI anyway #1425743).

An intellectually isolated historian by trade, Beckert doesn’t think about this —because why would a historian know anything about economics, or consequently be able to know anything about the world? (#1429046). Which is, I suppose, the best explanation for why his use of the word "capital" is so utterly confused.

To check myself, and for the sake of comprehensiveness: Marxians also have a specific reading of capital, where it's not physical goods or economic functions but — shockingly — power. That is, capital is a social relation between people... it's a mode of production that make objects ("commodities," really; alienated from the worker). An idea, or organization, that to the best of my understanding means something like what you owe another — in a feudal lord setting rather than the moral elevation of, say, Christianity.

If we think about the dark Satanic Mills of England, the economist would see the machines and production facilities, but a Marxian would see the social power that the boss/owner had over the worker.

Some Extracts from the CAPITALISM Book:Some Extracts from the CAPITALISM Book:

1. “Fortunes accumulated" (p. 108), the “Self-propagating thrust of capital” (p. 103), then Beckert gives an example of a Surat merchant with 20 ships that “plied the Indian Ocean.”
   == Social relationships or positions of power don’t "ply an ocean," and they anyway wouldn’t have that kind of power/might/elevated position where they arrived. Thus: can only mean ships, i.e. capital goods.
2. merchants, “whose modus operandi was the accumulation of capital” had bumped up against religious and political rulers who “considered the idea of capital multiplying itself unethical and illegitimate” (pp. 87-88).
   == capital doesn't multiply itself, see below.
3. “Enabled by this great connecting, [merchants in a few Italian cities] pushed… their capital into production — both agriculture and manufacturing.” (p. 118)
   == Again, MAYBE he means "change the ideas and subservient economic nature of people working in agriculture and manufacturing," but I suspect it just means, well, means of production.
4. The Italian city-state merchants from trading on Eastern Mediterranean islands were “moving some of their capital into the African gold trade" (p. 120). When Columbus and other conquistadors went across the Atlantic, they were “Riding the coattails of a potent new mix of concentrated capital and nascent territorial statehood on a large scale,” (p. 120)
   == moving capital into gold trade is definitely capital goods (caravans, ships, raw materials). But fine, maybe the Columbus mention is the best you have for [setting up modes of production according to a different power-relation structure than originally]

I can’t read these capital mentions any other way than meaning boats/stuff/higher-order capital goods — so again, we’re back to the economist’s meaning of capital goods as inputs in production.

...but then the story completely falls apart, because "capital" properly understood doesn't DO those things. Certainly not automatically, and definitely not in the villain-like way our author is presenting them.

Rebuttal Time, McCloskey Style (#1419510)Rebuttal Time, McCloskey Style (#1419510)

If you made it this far, I hope you agree that this is hopelessly insane... and we're only 147 pages into 1,087 (13%) in.

Thomas Piketty, who in a sense is the previous wave of anti-capitalist writers making a fuzz outside of academia, has been so thoroughly and comprehensively debunked that it's hard to pick exactly which portion of his grand intellectual edifice to focus on. For our purposes, let's discuss this idea that CAPITAL GOODS just accumulate, and automatically just generate more of itself, as that's clearly how Beckert is using it.

Capital doesn’t generate or automatically yield anyway, capital goods — everything from Indian Ocean ships to corn in silos — don’t re-produce more of themselves. Employed in commerce successfully(!) — and successfully is the important word — they can, as used well they can come back (=return) more than what was initially laid out. We, sane economists, think of this as a reward for risk-taking and ingenuity.

Because think about it, what does it mean if you make capital outlays (=giving up commodities, machines, stuff, boats) in a process and when it's all said and done you have more of those commodities, machines, stuff, or boats than you started with. It means you EMPLOYED materials and COMBINED them with work that transformed lower-value items into result that was valued higher. YOU MADE THE WORLD A SERVICE, and your capital's generated/accumulated profit benefited the rest of us.

Now, employed poorly -- as in, the wrong lines of productions, the making of things people didn't want or valued as much as was expensed making it -- capital is devalued, quite often to zero.
The capitalists who doubled down on Kodak films and fax machines or the merchants who brought high-value items to the wrong geographical places were not similarly rewarded, and instead saw their capital evaporate.

That’s just a matter of logic or common sense, that no amount of Marxian theorizing and conceptualizing can change.That’s just a matter of logic or common sense, that no amount of Marxian theorizing and conceptualizing can change.

Here's a book review extract from a beautiful book by Björn Wahlroos who took Piketty apart so hard I'm still blushing, (I reviewed it in Swedish, and then translated as a blog post a decade ago). Here's the relevant bit:

And here's a wonderful Piketty book review by McCloskey, Piketty’s pretty unfounded (and unjustified) conclusion that human capital isn’t capital: (We can quibble over that, but that's a separate matter for now), because it speaks to what capital can and cannot do on its own:

Certainly, human capital is “capital”: it accumulates through abstention from consumption, it depreciates, it earns a market-determined rate of return, it can be made obsolete by creative destruction. […] Since 1848 the world has been transformed by what sits between the workers’ ears. The only reason in the book to exclude human capital from capital appears to be to force the conclusion Piketty wants to achieve, that inequality has increased, or will, or might, or is to be feared.

Not unlike a house that doesn't automatically appreciates or makes its owners rich, it requires attention and upkeep and reinvestment — over and over and over. #1422689, #1423402

As a sum-total capitalist process (i.e., of competition) you could surmise, conditional on future profits, that “capital” invested in lines of production “generated” a return; the successful merchant had stuff, ventured it in some trade, and emerged on the other side with more stuff. True… but he did that by combining lower-value items into something that consumers, voluntarily, valued higher — or in Beckert’s historical case, moved such lower-value items into geographic places where they were more highly valued.

McCloskey’s summary of Piketty’s conceptual and empirical flaws are very apt here as well, since Beckert must have lost that memo written years ago:

"The modern world can't be explained by routine brick-piling, such as the Indian Ocean Trade, English banking, the British savings rate, the Atlantic slave trade, the enclosure movement, the exploitation of workers in satanic mills, or the original accumulation of capital in European cities […] such routines are too common in world history and too feeble in quantitative oomph to explain the ten- or thirty- or one hundred-fold enrichment per person unique to the past two centuries".

The captive slaves on Cape Verde taught capital owners

“...a new and sinisterly consequential lesson: In zones from which escape was difficult and where no competing political authorities existed, a small number of Europeans could control large numbers of enslaved Africans. Imprisoning laborers, in fact, enabled entirely new forms of the productive uses of capital, sundered from worldly and religious authorities and from the common autonomies of rural cultivators the world over.” (p. 132)

“Slavery was profitable enough to capitalize Atlantic expansion more generally, [applying the] merchants' basic logic to labor” (p. 132)“Slavery was profitable enough to capitalize Atlantic expansion more generally, [applying the] merchants' basic logic to labor” (p. 132)

I'll have a ton more to say about the monetary and real effects of "slavery" being profitable and able to capitalize something in other posts.

What's clear from these 1,500 words is that Beckert doesn't understand "capital" — which of course wouldn't be weird for a Marxian, but is strange when your book is LITERALLY titled Capitalism. You should, perhaps, make an effort to understand the thing you are writing about.

His confusion about "capital" is another reason that almost nothing in this book, no argument or single excessive verbose paragraph, makes much sense.

I made a note last night in my notebook/reading-therapist (next to a quote about the state and capitalism, and my jotting down "conspiratorial horseshit"):

Only thing remarkable about this book is its excessive sizeOnly thing remarkable about this book is its excessive size