Latest / Uncomfortable Conversations with Josh Szeps / "The Secret Economic History of the World" with Pulitzer finalist Sven Beckert

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"The Secret Economic History of the World" with Pulitzer finalist Sven Beckert · Uncomfortable Conversations with Josh Szeps

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Get a humans welcome to the safe space for dangerous ideas.
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Here's an uncomfortable question for you.
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How did we all get so damn rich in comparison to most people who have ever lived?
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We are staggeringly materially wealthy and yet now we are at a funny moment with
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Memdani's win in the Merrill election in New York, Elon Musk's trillion dollar payday,
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Instagram influences, embracing communism, Bernie Sanders, AOC, Donald Trump's tariffs,
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protectionism, Chinese communism, there's a fundamental reevaluation of the economic
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assumptions that have underpinned the neoliberal order that we've lived under for the past half
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century. But those assumptions, and I'm not just talking about policies like free trade and
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low taxes, but the very structure of how we live our lives, how we get stuff, how we produce stuff,
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those assumptions like the existence of money and markets and wages are not God-given,
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they're not woven into the very fabric of nature. They are contingent, they're arbitrary,
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they evolved over the course of the past thousand years and they are what has made you
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materially better off than almost any other person who ever existed.
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Today's guest, Professor Sven Beckett, is a professor of history at Harvard University and
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one of the world's leading historians of capitalism. He's not a mindless free market cheerleader,
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he's not a libertarian economist who's just defending free markets in an unfettered way.
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He's a thoughtful economic historian who studies with forensic precision how in the real world
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violence and coercion and even empire were foundational to capitalism's rise, but also how
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capitalism remains the indispensable model for human prosperity. He got his PhD in history
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at Columbia University, he was a finalist for the Pulitzer Prize in 2014, and his new book
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is called Capitalism, A Global History, a somewhat ambitious title. He joined me from his office
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in Harvard University to shed light on what capitalism is, how it came about, and in this era of
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populism and tariffs and a new socialist New York mayor, how we might re-anchor capitalism
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in moral and ecological limits without extinguishing the creativity that has made it the most
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productive engine of all time. I hope you enjoy it as much as I did, the one the only Sven Beckett.
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I'm intrigued by what's going on in the states at the moment, especially the sort of populist
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right and also the populist left, Trump's tariffs, and also Mamiani's win in New York City,
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and no one quite knowing what to make of all of that. What do you make of it as an expert on capitalism?
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Look, I have thought a lot about the history of capitalism. I have thought a lot about the past
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thousand years, and I have thought a lot about how we came into the world in which we live in
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right now, in which capitalism is one of the major processes that structures our lives,
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and in the book I don't have much to say, or nothing to say about the future, because obviously
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predicting the future is a risky business because you can be proven to be wrong. It does a
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historical perspective, thinking about the thousand year history of capitalism, I think that's
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helped us find the categories about how to think about the present and helps us ask some questions
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of the present that are perhaps relevant to come to better understanding of it. And so what we see
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in the long history of capitalism is that capitalism is undockmatic. It does take on very different
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forms in its history, and in one way it is undockmatic, and that is that it embeds itself and
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thrives within very different kinds of political regimes. And of course in the United States,
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as in Australia, as in Western Europe, we have seen that in the past, in the 20th century,
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at least in some parts of the world throughout the 20th century, like in England and Australia,
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the United States, we have seen that capitalism was embedded within a form of liberal and democratic
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rule. And there was the belief that capitalism forever more would be embedded in that form of
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political rule, that indeed the expansion of capitalism and the expansion of forms of liberal
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democratic rule would go hand in hand. But if you look at the present, you know, you're beginning
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to doubt that this is indeed the case. You see that there are plenty of perfectly capitalist
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societies that are moving towards more authoritarian forms of rule. And in some ways, you know,
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if you look at the whole history of capitalism, this doesn't come as much of a surprise because
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you see that capitalism has done along with very different kinds of forms of political rule.
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That's the first point. The second point is we live in a world of rapid technological change.
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We see the emergence of, especially of computer related industries and artificial intelligence,
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which might lead to enormous productivity gains. And of course, it's through an enormous
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social upheaval. And that's also something you see throughout the history of capitalism. So
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that's the second point. The third point is that you see is that that economic power within the
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world is shifting quite drastically for about 200 years, Europe and the United States work at
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kind of at the center of the global economy. But now, and nobody in their right minds would,
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let's say, ignore developments in Asia to understand the contemporary economy. And again,
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that is kind of shape shifting of global capitalism. That is quite radical. But again, from a historical
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perspective, it is not particularly surprising. And fourth, to end this, we see a radical
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sharpening of social inequality in many societies in the United States, certainly in many parts of
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Europe. I don't know exactly about Australia, but perhaps it's getting a little worse, but it's not
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there's nowhere near American levels. I think in the United States, the degree of social inequality
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that we see now can only be characterized as just kind of absurd, like this tiny group of people
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capturing almost all gains from productivity advances in the American economy. And that said,
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it seems that this is politically unsustainable. And so the political responses we see in the United
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States, such as the rise of Donald Trump and the successes of Mandani in New York City,
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I think are directly related to these kinds of sea changes that are taking place in global
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capitalism, but also more particularly in American. And just when you say that there's no necessary
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link between capitalism and liberal democracy, which is a taboo thing to say for many people on
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the conservative right of politics who have long held that if you just open up markets, then human
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rights will follow. What are you thinking of when you say that there are some countries that we
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see that are thoroughly capitalist, but do not have liberal democracy. Are you thinking of Hungary
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and countries like that that have become more authoritarian? Yeah, you can, yeah, exactly, you can think
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of Hungary, you can think of Turkey, you can think of India. And you know, there was this expectation,
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I mean, you know, I remember that very clearly in the 1990s or 2000s and the idea was, you know,
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now with the end of the Cold War, the word is becoming more capitalist. And as a result, by necessity,
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the word will also become politically more like the United States. It will transition into kind
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of democratic liberal form of governance. What we are seeing is just the opposite. We are seeing
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that more authoritarian forms of governance now are coming into the centers of kind of the
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heartland of liberal democracy. Sorry, sorry, just pick on that. Isn't the free market is pushback
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to that that actually yes, there's a rise in authoritarianism, but it's always inevitably coupled
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with an erosion of human rights at the same time because the governments just can't help themselves
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bossing around the economy, giving favors to their mates, you know, warping the free market in
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ways that benefit them and their cronies. And that therefore there is something inconsistent about
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a genuinely free and open market and a repressive regime like as Hungary becomes more authoritarian,
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it will necessarily become less capitalist. Turkey is no bastion of capitalism. India has this
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crazy bureaucratic system which favors, you know, some companies over others. Russia is obviously
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a crony pleptocracy. Is it like I don't see many examples of countries that have genuinely free
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markets where authoritarian rulers are not interfering in the economy? No, that is I think absolutely
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absolutely true and on a conceptual level. Yes, clearly there is a link between
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you know, free and open markets and and also a particular form of governance that is that is
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all true, but this does not reflect the real history of capitalism. Okay, and you know, my book is
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very much an effort not so much to to kind of write the imagined history of capitalism or as
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should have been or could have been in the minds of iron ran and yeah and red pole. Yeah, it's not
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the kind of illustration of your economics textbook. It's it's not picking history for
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for evidence that the laws that are depicted in economics textbooks are indeed true. It is
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instead an effort to understand capitalism as it actually unfolded and what you can see there
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is that in every moment in capitalism's history the state came to play in exceedingly
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important role in structure and capitalism. Of course, the way how the state has done so
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changes drastically. Again, you know, the difference between forms of authoritarian rule and forms
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of liberal democratic instructive in that regard, but still under all forms of political rule,
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the state has been absolutely crucial to capitalism's history and so to think that somehow the
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state is kind of oppositional to free markets is I think historically completely wrong. I think
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the free market, you know, so to speak is in some ways also a construction of the state. It
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relies upon the state for its very construction. Right. I mean, it relies on the state to uphold
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property rights. It relies on the state to have courts that will enforce those property rights.
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It relies on the state for things like intellectual property and copyright and so on,
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but isn't the free market argument that that is all that the state should do and that the the
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reason why free markets are opposed to stateism is because there's an extra sphere of state
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activity which constitutes aggressive micro management of the economy, which is not consistent with
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capitalism. Yes, no, that's again absolutely true. That is that is that is the argument and indeed,
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you know, in the last 50 years when we lived under a more neoliberal order, this kind of macro
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micro management of economic decisions or even corporate decisions by by government officials
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was considered to be totally unacceptable. I mean, today the New York Times reports that
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the US government now is investing in a whole panapoli of American companies and taking shares
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in these companies and also influencing their management decisions. So this seems to me
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completely at odds with the neoliberal project of the past 50 years. That is true. But still,
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all of that said, the state has played an incredibly important role even under the neoliberal order.
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It has done much more than just secure property rights or enforce court rulings or enabled
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the creation of a legal structure in which contracts were embedded. It has done much,
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much more. It has, you know, it has built massive infrastructures. It has invested massively
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in military power. It has massively invested in education systems, healthcare and social welfare.
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So, you know, I think historically the state grew up hand in hand with the expansion of capitalism.
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Even if this is considered to be ideologically, you know, two things that are opposed to one
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another and on a conceptual level, they are of course, intention with one another. But historically,
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they have emerged hand in hand with one another. And thus, you know, the contemporary move towards
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new forms of state intervention, which seems so contra to the neoliberal ideas that we have
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lived with in the past 50 years. You know, they are departure from the neoliberal era, but I see
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them perhaps, unlike others, I see them as a little less radical departure than it's sometimes
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now commented in the media. I see that throughout the history of capitalism, it's, you know,
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being protectionist as, you know, it's not an invention of the 21st century. I mean, it's
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pretty much a constant throughout the history of capitalism. Well, is it a constant throughout the
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history of capitalism or is it a constant throughout the history of the struggle between free capital
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and stateism? You know, I think the idea that I think the whole notion of these two forces
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being kind of irreconcilably at odds with one another is just mistaken. I think the,
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what you just mentioned, what is stateism has played an enormously important role in creating
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the so-called free market. And, you know, the so-called free market has, of course, also played
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an enormous role in an evening, the kind of vast expansion of state power that we have seen in the
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past 200 or 300 years. So I don't see them as contradictory at all. I mean, there are different
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configurations possible. Of course, you know, there is a great difference between the order we're
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living in. We are now entering and the order we just left behind. Yes, that's clear. The state
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has different things. And we obviously need to recognize that. But I think it's more kind of a
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reconfiguration of state power and a reconfiguration of capitalism than it is, you know, kind of a
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mortal struggle of the one. Yeah. I mean, what's interesting about this moment to me and one
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interesting thing that I got from your book is your book really tries to help us to imagine going
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back to first principles and realizing sort of how contingent capitalism is that a lot of the
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assumptions about that we just carry with us about the way that the world works, the way that
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economies work, the way that people work, the way that people trade, the way that the geography
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of countries is set up between cities and agriculture. A lot of this is that we assume is sort of
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baked into the state of nature are actually aspects of capitalism that could have been otherwise.
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And the consensus that we've had over the course of my lifetime, which is that tariffs are bad,
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free trade is good, socialism doesn't work, are now being questioned by significant
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swathes of the population with the president of the United States, reintroducing tariffs,
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the new mayor of New York promising state owned grocery shops and free buses.
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So yeah, I'm just interested in what that sea change means psychologically
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amongst all of us. No, it means I think there you're absolutely right. We lived in the past 50
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years, we lived in something that I caught in the book, the new liberal order. And one of,
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you know, this new liberal order was spectacularly successful also because for the reasons that
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you just cited that this particular kind of capitalism was made out to be natural. It was seen as
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kind of the the height of human development. It was just the best possible word. And it was seen
19:06
and described as being in sync with what are allegedly the natural laws that govern a capitalist
19:12
society. And now if somebody comes along and says, wait, you know, we're going to create
19:18
government own corrosive resource or wait, we're going to, you know, build tariff wars to
19:23
to to to protect domestic industry. You know, we see that almost like as a violation of the laws
19:29
of nature because we've been taught for 50 years that this is how the word works or if it doesn't
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work like this, it should work like this. But but but but you know, again, from a long historical
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perspective, it is it that there is no reason to to to have these assumptions because the new
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liberal order itself was just a particular moment in the history of capitalism. It was preceded by
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another order that the Keynesian economic order of the post-war years that was governed by very
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different principles and by a very different understanding of what is so called natural. And
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and of course, a word in which you were born into and which was made to be natural,
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it's it's tough to leave that word behind. It's it's almost like an earthquake, you know, you
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you you trust that the ground on which you stand is stable. And if you are ever having lived
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through an earthquake, you know, the most terrifying thing is that this basic truth about life
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is not true any longer. And this is just truly terrifying. And and and and I think this is a good
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that that is a good that this that this helps us understand also our economic life today.
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In a way, we are living through an earthquake, the earth on which we stand, it doesn't seem to be
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stable any longer. And of course, we need to navigate that. And I'm you know, I'm not advocating
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for that. I'm not saying, okay, it's great, you know, we should have like massive tariffs and
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we should stop trading with one another. I'm not advocating for that at all. I'm just observing
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as a historian that this is not, you know, a put is at this kind of regime change, this kind of
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changing the order of how capitalism is organized is nothing new in 18, in 1820 so much of the
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global economy was based on the labor of enslaved people on plantations in the Caribbean and in
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the Americas. That was considered to be kind of the natural order of things by most people except
21:24
perhaps for the enslaved and those who fought against slavery. But it was seen to be kind of the
21:28
natural order kind of God-given order that this and there was the sense that this order must kind
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of continue. And of course, a few decades later, this order completely collapsed and we ended
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a completely different moment in the history of capitalism again. So these kinds of even drastic
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and radical changes and absolutely nothing new in capitalism. And in a way, I think they
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are some moments of opportunity because when you live in the middle of a particular
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order within capitalism, like the new liberal order, it was very difficult to imagine even a different
22:03
word because it was considered to be the natural way of how things worked. But now this has been
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opened up, you know, we can't imagine different things. And so we should, we should imagine.
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And when you contrast, when you talk about the earthquake and the ground that we're standing on
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being the neoliberal order of the past half century, rather than an intrinsic version of capitalism
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in and of itself, what is capitalism exactly? You've written a book entitled capitalism. And if
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you ask some people, then capitalism just means the repatious greed of the powerful being inflicted
22:45
unchecked ways on other people and capitalism is colonialism, capitalism is imperialism, capitalism
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is inequality, capitalism is the profit motive, steamrolling people's lives. And then you ask other
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people and capitalism is the most productive way for human beings to flourish, to express their
23:06
liberty, to trade with one another, to seek better lives, to uplift themselves. What do we mean by
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capitalism? Who's right? Look, I think both of these these descriptions are in some ways,
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you know, historically true. I mean, you can tell both of these stories. And in some ways,
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we need to keep both of these stories in play when we want to understand the history of capitalism.
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But look, I don't think capitalism can be defined as rich people kind of, you know,
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stealing the resources of poorer people. Because if that would be the definition of capitalism,
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you know, it's in feudal Europe, for example, we would find societies in which also rich people
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kind of exploited the peasants and took their little surplus to build beautiful castles and churches
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and all of that. So I don't think that defines capitalism. I think this would be a very bad
23:57
way of going about it. And defining capitalism as a society in which people just get wealthy and
24:04
wealthy would also not be, I think, a very precise definition of what capitalism is. So for me,
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as we already discussed, capitalism shifts its shape drastically over time. The capitalism
24:15
of the merchant communities of the 14th century is very different from the kind of slave capitalism
24:19
of the 16th century that you find in Barbados. That is very different from the industrial capitalism,
24:23
you find in Manicist in the 1850s. And that again is very different from the kind of financial
24:29
capitalism you would find in New York City in the 1980s or 1990s. So capitalism changes drastically
24:34
and also at any given moment, capitalism is very different parts of the world. So, you know,
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in today, let's say, you know, the way how capitalism is organized in the country of Cambodia
24:45
about which I write a fair amount. And let's say the United Kingdom or Australia is quite
24:51
radically different. But despite all of these differences, there is something that all of these
24:56
societies have in common. And what they have in common is that they live within an economic
25:02
logic in which privately owned capital is productively invested with the purpose of generating
25:10
more capital. And I think this is the basic logic that unifies all of these different
25:15
sides. Sorry, Sven, what is capital? Capital is kind of resources that are productively
25:26
invested to grow itself. It's a kind of process. So, it can be money, it can be a factory,
25:34
it can be a mountain that has iron ore in it? Yes, yes, yes, among all the things. Yes,
25:41
and all of these societies have that in common. And that, of course, explains the enormous
25:48
dynamic of capitalism because capitalism cannot stand still. Capitalism cannot be conservative.
25:54
Some people think capitalism is a capitalist society, it's a kind of conservative society.
25:57
It's just the opposite. It's a state of permanent revolution. And this kind of society is
26:07
expansive, which of course has as one of the results that we produce ever more. And that has
26:14
a lot of beneficial effects on many people's lives. But it also explains this kind of
26:23
expansionary thrust of capitalism. Capitalism expands constantly, both in space into new kinds of
26:30
territories, but also in new spheres of life. So, for example, that we now buy and sell data.
26:38
That is something that is quite recent. That's not a spatial expansion of capitalism.
26:42
That is an expansion of capitalism within social life itself. And then we see, of course, spatial
26:47
expansions. So, I write again, I write about Cambodia and kind of how the capitalist revolution
26:52
came to Cambodia in the past 30 years or so. But it's a system that is constantly in movement.
27:00
It's constantly expanding. How did the capitalist revolution come to Cambodia?
27:06
The capitalist revolution came to Cambodia in the wake of the terrifying regime of the Khmer Rouge
27:14
and the various wars that occurred there. And it began. Just for people who don't know Cambodia,
27:21
this was a very backward, extremely communist authoritarian regime of terror,
27:28
partly spawned out of the Vietnam War, but partly indigenous to Cambodia.
27:34
Right. And out of this war came, when this war ended, some of the former warlords and some
27:44
of the people who were involved in channeling international aid into Cambodia, they kind of began
27:52
to set up as entrepreneurs. And they invested in things such as palm oil plantations.
28:02
They invested in tourist infrastructures. They invested in casinos, often, along with Chinese
28:09
capital. And they invested in a huge textile sector, about 1 million Cambodian women now work in
28:19
the textile industry. And all of that happened just in a few years. It's one of the most rapid
28:26
transformations. And then there you see kind of the power of capitalism. How quickly it can turn
28:32
a society upside down. It of course has sometimes terrifying consequences. But it also has this
28:40
enormous power and this enormous. Is the average Cambodian better off?
28:44
I think the average Cambodian is better off. Yes. Yes. The average Cambodian, I mean average
28:49
GDP does that that's that's rise. But Cambodia is a society of extreme inequality in which there's
28:56
a tiny minority of people who own almost everything. And so when you talk about capitalism being
29:03
defined by the reinvestment of capital of stuff of resources back into more productive pursuits,
29:12
so that they can create more wealth. They're part of the disillusionment, I think, that we currently
29:19
hear about capitalism is the idea that it actually is no longer about great industrialists building
29:26
great trains and reinvesting the profits from the train lines into some other great thing that
29:33
benefits everybody that now it's a bunch of people in the city of London or on Wall Street
29:38
slicing and dicing and micro managing fiber optic proximity to data centers in order to
29:46
predict the movement of some number on a screen and in that prediction, they're going to skim some
29:51
money off the top and get fabulously wealthy and buy a place in the Hamptons and have a yacht
29:57
and a private jet. What is the utility of that kind of financial capitalism that now comprises,
30:07
I think, a larger portion of the economy than it ever has?
30:10
No, this has become clearly important to contemporary capitalism, but I think it would be wrong
30:17
to see contemporary capitalism only characterized by these kinds of economic activities because at
30:24
the same time we see worldwide a massive expansion of manufacturing. We have more factories and
30:33
we produce more things than we ever did, but the factories that turn out of that stuff are not any
30:39
longer located in the midlands in the UK or in the Midwest of the United States, but increasingly
30:47
they are located in Asia and China and elsewhere. I think it too much of an emphasis on the financial
30:56
sector is a kind of Eurocentric or America-centric perspective on capitalism that leaves out very
31:03
important sectors of the global capitalist economy. And therefore, again, a global approach which I
31:07
taken this book is really crucial to understand also contemporary capitalism. That said,
31:13
in some ways, the enormous importance of finance capitalism and merchants is also not
31:23
completely new in the history of capitalism because this is how capitalism came about. It emerged
31:28
out of these trading communities, other from merchant communities, and of course these merchant
31:33
communities, they also created financial mechanisms and they speculated in all kinds of things
31:46
so that in itself is also not totally historically new. And in some ways, the moment in which
31:52
the people who make things were dominant within global capitalism was a relatively short one. It was
31:57
a moment that perhaps began in the 1850s and ended sometime in the 1970s or 1980s. It was like
32:04
a little bit more than a hundred years. And now again, this kind of financial merchant capital is
32:09
clearly dominant in global capitalism. And yes, of course, people would say that this is an
32:19
crucial part of the kind of efficiencies of the global capitalist economy because people allocate
32:25
capital to where it is most efficiently used. And of course, there is a role of that. But then there
32:35
is also a lot of, as you say, there's a lot of non-productive activity within that and kind of
32:41
minor the speculation on minor price movements and things like that. So there is a critique
32:53
of a capitalist economy that is so clearly focused on the finance sector. But again, I don't
33:04
think that's like the entire global capitalist economy. It's an important part and the parts of
33:09
the word that we inhabit. I mean, maybe Australia is actually different because Australia has a huge
33:13
extractive economy. Australia produces a lot of stuff, heavy stuff that is moved around on trucks
33:20
and huge ships. Yes. Although it still makes a lot of money out of services. Education, foreign
33:29
students coming to study in how universities, tourism, these arts, they're still a pretty
33:36
big part of the economy. But yes, mining is huge. Yeah, it's interesting that the emphasis on
33:43
the financial sector when you all you have to do is open Instagram and look at all of the ads
33:48
from Teemu for a total of 99 automatic back scratcher from Shenzhen and you realize
33:55
financial services is not the only story in my capitalist. There's also a lot of shit
34:00
floating around the world that we're ordering. Absolutely. I mean, look, we produce spectacularly
34:06
more things than we ever have in human history. And the total output of things of stuff is growing
34:15
exponentially, which is partly why we put so much pressure on the natural environment because
34:21
we need more and more things, we need more and more things that come out of these Australian
34:25
minds to feed that system of ever expanding production of stuff. And so the early days of capitalism,
34:32
you talk about the Arab world, you talk about Syria and Yemen, then called Aden as places which we
34:39
often associate with the suks in the markets and the bazaars and the beginning of sort of this
34:44
trading culture. But one of the remarkable innovations of capitalism was that was not that just
34:51
that people traded their things for money, but that people started not carrying their shit around
34:56
with them to sell and found ways of trading on paper. Can you explain how that happened?
35:05
Right. So the book starts, as you mentioned, it starts in the port of Aden and modern-day Yemen
35:13
in the year 1150 and dichronically in a kind of some detail, the workings of a group of merchants
35:21
in that port. And these merchants traded horses, they traded textiles, they traded spices,
35:31
they traded gold with their counterparts and other parts of the world, such as on the west coast of
35:36
India, on the east coast of Africa, in northern Africa, but also in to Europe. And I describe that word
35:45
not because this is literally where capitalism was born, but I describe this word because it is
35:52
one of many of these merchant communities that begin to expand in the first half of the second
35:59
millennium in the year between 1,500. And I argue that this is where the capitalist logic begins
36:08
to take on its dynamic. It's strikingly modern. When we read the letters of these merchants,
36:13
we find them strikingly modern. We immediately understand what it is they are doing,
36:18
but in the word in which they lived, they were completely marginal. Most people organized
36:22
economic lives with very different kinds of logics. In some ways, the logic of an economic life
36:29
prior to capitalism. The vast majority of humans on planet Earth would have organized the
36:35
economic life by focusing on securing the subsistence of their families and the subsistence maybe
36:42
of their community, their village. And then other parts of the world, there were few
36:53
lords, tributary rulers who basically exploited the peasants. And I think these were the two
37:00
dominant logics organizing economic life in much of the word. And there comes in this capitalist
37:07
logic, which is very different. But it's very marginal. And in some ways, the book describes how
37:13
we get from a word in which this logic is very marginal. And it's just limited to what I call
37:17
these islands of capital, to a word that we already discussed, namely the word of Cambodia,
37:22
where this word now suddenly, this logic now suddenly structures everything. And of course,
37:27
okay, so to come back more directly to your question, to organize some of this trade that these
37:33
merchants now embark upon, they invent new kinds of tools that enable that. For example,
37:42
they enable ways to transfer capital over very large distances. They find ways to limit their risk
37:50
because international trade across the ocean was extremely risky and often failed. And they
37:59
tried to find ways to kind of limit their risks. And so they created ways to combine their capital,
38:04
share the journeys of a boat across the Indian Ocean or down the coast of Africa. So they invented
38:12
new tools in order to facilitate that kind of activity. And those tools became, of course,
38:18
crucial, institutionally crucial to the kind of longer history of capitalism. And in some ways,
38:24
that is still those tools, those institutions still are very important to capitalism.
38:32
What kind of tools are those? Like for example, to find to transfer bills of exchange that allowed
38:42
the transfer of money across large distances, the creation of companies, so the pooling of capital
38:53
and the mechanisms, how that capital is poured. And some agreements then on who bears the risk and
39:00
what kind of risk and how much of it, that is, you know, the, I mean, obviously companies,
39:08
yes, the word says companies are still quite important to the word, word today. So,
39:14
so, so these are, you know, these are kind of very modern. I mean, these are things that are still
39:19
very much crucial to contemporary capitalism. But they emerge out of this word of trade and the
39:26
particular kind of opportunities and risks that merchants in the middle ages, in the middle ages.
39:32
Just to clarify what was revolutionary about this trading model. Prior to that, people would
39:38
generally grow staff, have some livestock, maybe they'd either give a portion of it to their
39:44
feudal lord or they'd share it with their community. But even in those days, there were still
39:51
blacksmiths and like there was still coins in ancient Persia and Egypt and like the concept of
39:58
having currencies that represented some sort of value. So, what is different about that than what
40:06
you're talking about? Yes, it's true. These kinds of merchant communities that we just
40:12
discussed also existed in earlier times. But I start in the first half of the second millennium
40:19
because, you know, you have to start somewhere. But it's also because they become much more important.
40:24
So, they expand quite significantly. But you know, if you want, you can trace some of that logic
40:30
also into earlier times. And look, I think all of human history, as far as we can tell,
40:38
all of human history has known of markets. People have exchanged goods on markets as far as we know
40:44
in all human societies. So, that as such is not... Do you mean even if that's just buttering,
40:50
even if I'm a blacksmith and I make something and I exchange it for some reason?
40:54
Exactly. That was the baker or the blacksmiths. And so, these were kind of local level exchanges.
41:01
And they have existed as far as we can tell in all human societies. But even though they are
41:09
based on... Even though there is, of course, trade and even though there are markets,
41:16
but both the trade and the markets are kind of on the margins of economic life.
41:21
It's, you know, most of the things that the family would produce would, you know,
41:25
not be used for bought it, but it would be used for home consumption. People would produce
41:33
their own tech stars and, you know, and would dress themselves with things that they made themselves.
41:38
But maybe they didn't make the shoes themselves. So, maybe they purchased the shoes from some
41:43
shoemaker who was in that village. So, a market economy is not the same as capitalism. I mean,
41:49
that is here the argument, yeah. Markets have existed for a long time and I don't think they do
41:54
define capitalism. Right. So, the market means I need some shoes and I'm good at farming wheat.
42:02
So, I give some wheat to the shoemaker and he gives me shoes. That's a market trade.
42:07
The difference with capitalism is that people accumulate the value of all of their shoes or
42:14
their wheat or whatever and then try to expand the value of their holding by dealing it to other
42:23
people who are doing productive things most productively and then taking an investment in that and
42:29
getting some of the profits of the expansion of the other person's output. Is that right?
42:35
Yes, that is correct. The basic logic in capitalism is not to stay with the shoemaker. The
42:40
baker is not, you know, let's find a way to produce more shoes or let's find a way to produce more
42:44
bread. But the primary, the primary propelling force is the desire to produce more capital.
42:53
And, you know, if you have to produce more shoes or have to produce more bread in order to do so,
42:58
that's of course one of the welcome outcomes of this process. But the primary goal is to see
43:03
the accumulation of capital to produce more capital. And that is not the case in, you know,
43:09
in, let's say, most medieval societies in which the market, in which there is a market, but the
43:15
market is kind of, you know, it's a limited sphere. It's a limited part of economic life.
43:23
Now, fast forward to today and that's exactly what this book does. You know, today almost everything
43:29
we do is embedded within market markets. We, you know, we acquire, you know, presumably you don't
43:35
produce your own text cards. You presumably don't grow young. That wouldn't be a very good text card.
43:39
You might want to grow on fruit because you go to a restaurant and have somebody else cook it.
43:44
So almost all that we consume is produced in exchange on markets. And of course, also what we do
43:50
to earn a living is largely oriented towards the market. We work, most of us work for wages. So
43:57
there is a kind of market transaction. So, so this is a radical departure in human history. This
44:02
is very different from how economic life on planet Earth was organized throughout much of
44:08
human history. And the book exactly tries to do this to explain, you know, how come that this
44:13
logic that was once very weird and strange and kind of revolutionary in, in, also in opposition to
44:21
the existing logic of economic life, how did this come to kind of dominate all of economic life
44:26
on planet Earth? This is, you know, we take living in capitalism now to be almost like,
44:32
you know, natural is like we live in capitalism like fish live in water. Yes, but we need to think
44:39
this is a historical, that's a result of a historical process. And we need to understand
44:44
how we came to live in a word like this, which is such a radical departure from prior human.
44:49
And Sven, when you say that the defining feature of capitalism is that the participants are
44:55
seeking to expand their capital to increase their capital. That can sound quite limited,
45:02
selfish, arbitrary, like while we playing this game at all, like what's the, what's, how does
45:08
Cambodia, how does the average Cambodian get rich just because a tiny minority of people who have
45:13
lots of capital are trying to increase their capital? It sort of sounds like trickle down economics
45:18
because presumably not every participant in the capitalist economy is trying to increase their
45:24
capital. It's only the people who have enough capital to do so.
45:27
Yeah, that's also very much true. And look at the results of what you get out of that logic is
45:41
tremendous productivity increases. We produce so much more stuff. And of course, collectively,
45:47
many people on planet Earth, not all people on planet Earth, but many people on planet Earth
45:52
have greatly benefited from that. Everything around us in some ways is a result of this capitalist
45:58
revolution. We live longer lives. We live healthier lives. There are many more of us
46:03
on average, we're taller than previously because we've access to better nutrition. So this is all
46:08
the result of this particular logic, but how this is distributed, the fruits of this is of course
46:22
very different in different moments in time and also in different societies. But let's say
46:27
because you spoke about Cambodia, they were true limits to a growing life in Cambodia to put
46:36
like that. There was just, you know, it's only so much rice that the single woman can make in
46:42
that. Yes, exactly. There's their real limits on how much a family can produce a life could be
46:50
quite miserable in the Cambodian countryside. You know, land was not always accessible or was
47:01
divided up among the children and thus became smarter and smarter. And now for, you know, especially
47:10
for women, they're now opportunities, let's say, to take the truck down to Pnom Penh and start working
47:17
in a textile factory that doesn't pay particularly well if you think about average wages in Australia,
47:24
pays about $200 a month. But of course, this is kind of much more than would be available by continuing
47:34
to grow rice in the in the countryside. And so, and the reason for that, Sven, just to understand
47:41
the dynamic correctly, the reason the woman can earn more at the textile factory in Pnom Penh,
47:47
then in the countryside harvesting rice is because the assets, I'm trying to avoid the word
47:53
capital because it sounds so wonky. But the resources that the person who owns the factory has
48:00
maximized by investment in that factory over the opportunity cost of other things that they could
48:07
be doing with that money. And that's because those people are willing to pay more for the
48:13
textiles that the factory produces than they are for the rice that the woman would use.
48:19
So, right? Yeah, I mean, yeah. And then there's obviously a huge demand globally for textiles.
48:28
Labor is much cheaper in Cambodia than let's say in Australia. And for that reason, very few
48:33
t-shirts are manufactured in Australia. So, there is a market, you know, and then people
48:40
elsewhere outside of Cambodia are willing to purchase these products. And that makes, of course,
48:46
the investment of capital in the Cambodian textile industry makes that profitable. So,
48:53
this is all part of, you know, this cannot be explained again. It cannot be explained by only
48:58
looking at this Cambodia. You need to look at, you know, this is... Right. Because Cambodians are buying
49:03
t-shirts. It's we who are buying t-shirts. Some of them, but the vast majority of the production
49:10
goes abroad and especially to China, but also to Europe, the United States, Australia.
49:16
So, you know, this is part of a kind of much larger global system. You cannot even begin to
49:21
understand the kind of capitalist revolution in Cambodia without also embedding it into a
49:26
global history, which is what the book does throughout. You know, it tries to... It looks often
49:31
at very local places. It looks, for example, at, you know, the Industrial Revolution in Scotland
49:37
and the 1800s, it looks at the emergence of industry in India in the 1950s through kind of a
49:46
detailed analysis of just one company. But what we see when we look at these very local situations
49:52
and particular sets of people, small groups of people, we must embed them into this large and
49:58
global narrative to understand their very local histories. And that is definitely also the case
50:04
when we look at the kind of capitalist revolution coming to come. You mentioned the Industrial
50:07
Revolution in Scotland. What role did the Enlightenment, Adam Smith and the Industrial Revolution
50:16
play and how are they connected? So, the Industrial Revolution, I argue, is one of the most
50:24
important events in human history because this is the moment when, you know, modern economic growth,
50:29
as we know it, first came about. And it has made a huge difference to the lives of almost everybody
50:37
on planet Earth in the 200 years after the Industrial Revolution. And we need to understand the
50:45
Industrial Revolution not so much as the beginning of capitalism. As, you know, when we talked about
50:50
definitions of capitalism, some people kind of define capitalism at this moment as emerging with
50:56
the Industrial Revolution. But I see the Industrial Revolution as the most important offspring of the
51:01
capitalist revolution, which itself is much older as we already discussed in some detail. And I think
51:10
this Industrial Revolution, even though it first happens, as you know, in just a small part of the
51:15
world in the Northern England and then also in Scotland. So it's kind of a very local history.
51:23
But it is deeply embedded in the kind of global networks and this kind of global capitalism that
51:29
was built by these merchants that we discussed earlier. It was built upon access to Indian cotton
51:37
textiles thanks to the East India Company. It was also built upon access to South Asian
51:44
technology and dying and printing cotton textiles. It was based on land in the Americas where the
51:52
cotton used in the factories was grown. It was built upon the labor of people from Africa
51:59
were enslaved to grow that cotton in the Caribbean and Brazil and then the United States. And it was
52:04
built upon these, upon global markets. I mean, the Brits very soon after they invented more
52:12
productive way of spinning and weaving, they export a very large share of their product and to
52:17
many parts of the world. By the mid-19th century already India is the most important
52:22
market for the Lancashire textile industry. So I explained that Industrial Revolution basically
52:27
has a kind of result of this peculiar conjunction of global developments. And it kind of almost
52:33
like an accidental development that in some ways was very unlikely. But when it happened,
52:39
it developed great dynamism. And of course, you need to think about the world in particular ways
52:46
to imagine, for example, the more productive way of spinning cotton. And so what has been
52:54
called enlightenment sort or the industrial enlightenment does feed into that kind of
53:01
rethinking of the way how humans work and produce. But I think this cannot explain the story
53:09
out of itself. Because obviously partly the enlightenment, I mean, we see certain kind of
53:15
enlightenment traditions as in other parts of the world. So this is not like a uniquely European
53:21
development. And then we also see that of course, this new way of thinking about the world is in
53:26
itself partly a result of European expansion into the world. The ability to observe this world,
53:32
to see this world, to travel the world has an impact on how how enlightenment thinkers begin to
53:39
think about the world in which they live. And so I think this all needs to be kind of kept in
53:46
view at the same time. It's, you know, I hate any kind of monocardialization.
53:53
When people live things in mind, but what I think what I emphasize in this book in particular is
53:59
you need to keep always in mind the kinds of global connections in which things are embedded. You
54:05
cannot explain anything out of itself. You know, you cannot write a local history of, you know,
54:11
it's striking me, obviously, if we talk about Australia, you know, you cannot explain Australia
54:15
out of itself. You cannot explain Australian capitalism, let's say, and not look at some other part
54:20
of the world. Maybe in Australia, that is completely self-evident and nobody in their way,
54:25
what's more, no one would be under that delusion. Yeah, and maybe it's also the peculiar structure
54:30
of Australian capitalism. But believe me, in the United States, there are many people who think,
54:34
you know, you can explain American capitalism, just peculiarity out of itself, which is totally
54:39
impressive. You need to always think about it in its global environment. And so we spent a
54:44
bit of time talking about the difference on the ground in Yemen, for example, when the old way
54:52
of just growing things for yourself and bartering a bit with your neighbours suddenly was confronted
54:58
with this revolutionary idea of tracing values on the ledgers and sending currencies over across
55:07
the seas. What was the similar on the ground change in the industrial revolution? What happened
55:13
in Northern England and Scotland that would have been so revolutionary over the course of the
55:20
decades under which in which it unfolded? So what happened is a new ways, I mean, at the
55:31
core of it was at first a new way, a new technique of spinning cotton, which was drastically more
55:39
productive. I mean, about 200 times more productive than using a spinning wheel, you know,
55:45
which obviously many people had in their homes to spin cotton and then to weave it on the
55:50
loom, which was a very common activity in many parts of the world. So there was a new technique
55:55
of doing that. That technique now demanded very soon, it demanded larger buildings. It had to,
56:03
it couldn't be accommodated anymore, you couldn't have a water frame, you couldn't house that
56:12
in your little farmhouse, you needed larger buildings. So this is when the modern factory emerges.
56:19
Then to power these machines, you needed to have access to non-animal or non-human powers. So at
56:25
first it's largely water power of which you had a lot both in Northern England but especially in
56:31
Scotland and later of course, the use of fossil fuels. So this is the beginning of what I call
56:36
the fossil fuel civilization. And then at the beginning mostly cold throughout the 19th century,
56:43
it was basically exclusively cold and then of course oil and gas in the 20th century. And then what
56:51
you also needed, you needed suddenly, you know, you had these very large machinery in these very
56:56
large buildings, relatively speaking, that were powered by the machinery, was powered by
57:02
fossil energy or by water power. You needed many more people to work these machines. So suddenly,
57:08
it wasn't like the old, the old cobbler who had like an apprentice, you know, there were two
57:14
people kind of making the shoes, but suddenly you need let's say 200 people to work on these
57:20
machines. And these people became kind of the first group of modern wage workers which are,
57:30
you know, now so common in the world. And they were not to become owners of cotton factories,
57:39
they didn't become master artisans as people, let's say the cobbler apprentice would have become
57:45
later a master cobbler. They became, they were workers, they started out in the world as wage
57:53
workers often at a very young age at age eight or nine, many especially girls would start working
57:59
in cotton factories. And they would spend, you know, much of their lives working in these factories.
58:05
So this was a drastic, so this wasn't just a change in technology, it wasn't just a change in
58:11
how machines were powered, it wasn't just a change in how work was organized, but it was also
58:17
drastic social change because suddenly you had people who were not anymore, you know, living on
58:22
farms and somehow making a living in the countryside, you had people who lived in cities who were
58:27
completely dependent on their industrial employment. And that gave them now, I mean, this is one of the
58:33
reasons of why this logic, this capitalist logic now comes to encompass many more people and many
58:41
more spheres of life because these people now also, you know, they didn't grow their own food,
58:45
so they had to purchase their food on markets. They didn't, you know, even though they spun and
58:50
wore for a day, but they probably didn't make their own clothing, so they had to buy that on markets
58:55
as well. So this is a social change of greatest significance. This is where the modern word in which
59:03
we live in right now, when this word came into being, and when you read, I cite in the book,
59:11
quite a few kind of contemporary travelers who visit these places, you know, like middle class
59:17
travelers coming from London or New York or elsewhere, they go into this word of the factory,
59:21
they look at it, they visit it, and they're truly shocked in what they see. They see it as a kind
59:26
of gate to hell, the dark satanic palace. Yeah, and people, and also it's very interesting,
59:32
I cite some of these sources in the book, you know, people who came out of the Scottish countryside
59:39
and entered the factory, the factory owners often complained that these people were literally afraid
59:44
of the factory. They thought of the factory as a kind of monster that would kind of eat them up,
59:49
so they were very reluctant to go into the factory. It was kind of the last thing you would do,
59:53
you know, when you had no choices anymore, you would send your children and then your wife
59:57
into the factory, and maybe in the end the husband put into the factory. And so I think that
1:00:02
precise conundrum, that revolution from an agrarian, perhaps more, well, I don't want to put my
1:00:09
thumb on the scale here, but critics of capitalism would say a more humane and stable and balanced
1:00:15
relationship to family, community and nature evolving into this highly industrialized, I mean,
1:00:22
you just mentioned in passing something that's also interesting in the book, which I hadn't really
1:00:26
thought about, which is that for most of history, people have not worked for wages. It's unusual
1:00:30
that we work and get paid. That's a, you know, an artifact of the industrial revolution.
1:00:37
And out of that, you get the critique from Marx and Engels and others that what we are now
1:00:43
basically seeing is an indentured class of quasi-slaves who have no other options except to work
1:00:51
for the man and industrialists who own capital can infinitely reinvest that capital and get more
1:00:58
and more rich and working people have no way out. And it strikes me that we're skipping over the
1:01:05
20th century here a lot, but I mean, fast forwarding to the 21st century, many people do feel that
1:01:12
we are still in fundamentally that predicament, that the idea that a free market unleashes individual
1:01:19
ingenuity and we can all become artisans or industrialists is belied by the reality of most
1:01:26
people looking for a job, finding a wealthy corporation to give them a job and then working for a
1:01:33
wage over which they have very little bargaining power. How does that model, is that model, you know,
1:01:40
inevitable to capitalism? Is there a way to turn the dial up on capitalism's ability to foster
1:01:48
ingenuity, individualism, spontaneity, artisanship, industrialism?
1:01:56
Right, look, that is a difficult to say because in the end, I can only report on the history as
1:02:02
it actually happened. Yeah, but you're a Harvard professor, so you know more than I do about this.
1:02:10
But I think you put your finger on something really, really important, namely that once upon a time,
1:02:17
it was unusual to engage in wage labor. It wasn't completely unknown, but it was, let's say,
1:02:22
quite unusual. And now much of the human population is engaging in various forms of wage labor.
1:02:31
That is perhaps one of the most radical social changes that was brought about by the capitalist
1:02:36
revolution. For most of us today, we see that almost as natural. We see, oh, you know, the
1:02:42
word must have always worked that way, but as you pointed out, very correctly, this is not how the
1:02:49
word has always, always worked. Now, you know, we also, though, have to see that the conditions
1:02:59
of wage work changed quite drastically, at least in significant parts of the word,
1:03:05
since the, since the 1780s. We clearly, you know, most of us get paid, let's say, much better than
1:03:13
than the children and women who worked in the Scottish textile mills. We work many fewer hours.
1:03:21
I mean, people worked like unbelievably long hours. Right. This because left wing unions pushed
1:03:29
against capitalism and demanded. Right. I'll get there. Yes. So, so again, this, yes. Okay. So,
1:03:37
but we, so we work in better working conditions than we used to. We have something called vacation time,
1:03:42
which is something that people in the 18th century did, did, did, did, did not enjoy. We have,
1:03:50
you know, in the 1780s, the Scottish manufacturers were very much opposed to any kind of public
1:03:56
education for children because they thought this was just completely unnecessary for people who
1:04:01
would end up working in the factories. Now, you know, we take it for granted that the state takes
1:04:06
a certain interest in giving access to people to giving children access to, to pretty advanced
1:04:13
educational opportunities. So, there is a drastic change, which again speaks to how significantly
1:04:19
change is under capitalism. Why does that change occur? And that goes back to your comment just
1:04:24
right now, namely that that workers from the very beginning, they, they re-belt against the
1:04:31
conditions under which they found themselves. They, sometimes they ran away. They, they left the
1:04:36
factory. They tried to make a living in America or eventually they might have embarked upon
1:04:41
a trip across the world to come to us. So, they tried. Yeah. And, yeah. And, yeah. I mean,
1:04:49
that is also all linked. You know, this is all very much linked. But, but, but people tried to
1:04:54
get away from the word of the, of the, of the, of the, of the factory, which, why sometimes they
1:04:59
were lost, they forced people into the factory. They were not, you know, they were not allowed
1:05:03
to leave the factory. They were forced to stay within the factory. But, but, but, but people did
1:05:09
still rebelling against the factory. And then later, they organized in trade unions. They
1:05:14
organized political parties that were, that were focused in their activities, unimproving
1:05:19
the situation of, of workers, of wage workers in these, in these factories and also elsewhere.
1:05:27
Cumulatively, you know, sometimes change was very slow. And, you know, sometimes people in their
1:05:34
own work lives didn't experience personally so much of it, of a change in their pay and their
1:05:41
working conditions and their benefits. But, if we look at this again from a long historical
1:05:45
perspective, we see that all of these efforts of workers to improve their lives have had a dramatic
1:05:53
impact on, on, on wages on working conditions and educational opportunities and all of it. So,
1:06:02
so, so, so this has changed capitalism quite fundamentally. And, you know, now if you think about
1:06:07
the worker at General Motors, or if you think the worker at Mercedes in Stuttgart, or if you think
1:06:13
about probably mine workers in Australia, you know, people are significantly better paid. They
1:06:20
have a kind of decent standard of living. Of course, this is also under threat, you know, it is
1:06:26
far from stable. Nothing is stable under capitalism, but I'm just saying that that that that
1:06:32
conditions change quite drastically in the past 250 years. And in some ways, that was almost
1:06:38
kind of a necessary counterpart to the productivity increases that were enabled by the capitalist
1:06:44
revolution because, you know, somebody had to buy all the things that came out of these factories.
1:06:48
I mean, if you if workers don't get paid enough to, to buy things, then eventually, you know,
1:06:55
there are only so many middle class people who can, who would be a potential market. And, and,
1:07:01
in an age of mass production, which really comes about in the later 19th century, in an age
1:07:06
of mass production, of course, the size of the market came to matter greatly, which is widening
1:07:11
the new deal in the 1930s. There was a, you know, among economists and among policy makers,
1:07:18
there was a real effort to expand the size of the market, to stabilize the market through the
1:07:23
building of a massive welfare state, which has also improved conditions of labor. And also,
1:07:29
I assume that in terms of wage workers in Western countries in the 21st century, as automation has
1:07:36
taken up a lot of low skilled jobs, the ones who remain the workers in the Mercedes factory in
1:07:41
Germany or the miners in Australia are actually highly skilled people who it's quite difficult to
1:07:47
replace. I mean, it's not easy to work in a mine when it's automated as much as it can be. If
1:07:52
you're one of the people who works there, you're an engineer, you're not a, you know, you don't have
1:07:57
a cold pick at the call face down down a mine anymore. Lastly, Sven, I just want to end where we
1:08:04
started, which was with Memdani and Tariffs and Trump and the future of capitalism perhaps,
1:08:10
because you said something at the beginning that caught my ear, which was about inequality in
1:08:15
America and saying that this tiny fraction of the population are capturing all the gains
1:08:22
of the increases in productivity. When you talk to a free market capitalist or a conservative
1:08:29
Republican, they will say, well, these people aren't capturing gains as if the gains just happen
1:08:37
automatically and they're stealing them. Jeff Bezos created a really efficient and cheap way
1:08:44
to get stuff delivered to your house. And that has benefited all of us. And we all profit
1:08:51
from that. And he keeps a small share of the increased productivity that he's created.
1:08:57
Elon Musk just got his supposed trillion dollar payday, which is pegged to performance targets
1:09:03
that are highly ambitious, which basically say, if I increase the value of this particular
1:09:09
electric vehicle to the world by X, then I get to keep, you know, one tenth or one fifth of X.
1:09:18
But the layperson's understanding of inequality is closer to what you said, which is the
1:09:24
Bernie Sanders style version. These people are essentially mooching off the larger economy,
1:09:32
which is true. And can you have that level of ingenuity without that level of reward?
1:09:40
I think you can. And historically, there are certainly moments when there are significant
1:09:44
productivity increases and inequality is much more muted. And a very good example for that
1:09:50
would be the United States in the 1950s and 1960s. We actually, in those two decades, we have
1:09:55
significantly faster productivity growth than in the present. And at the same time, we had much
1:10:01
lower levels of social inequality. Yes, you know, people invent new things. And that is
1:10:10
often quite beneficial for society at large. You mentioned the coal pick. And you know, in new
1:10:20
ways of mining coal have made that kind of labor less important. And maybe that's for the
1:10:30
better. And maybe that's something we should celebrate. But there seems to be a built
1:10:37
intensity within capitalism that kind of concentrates the gains of this particular logic of
1:10:43
economic life in the hands of a very few. And that I think has a terrible implications for
1:10:53
the lives of so many. It also, I think, makes what we started out talking about, namely the
1:11:00
question of the political regime and which capitalism is embedded. It makes, it creates tensions
1:11:10
within a liberal democratic society if so many people don't benefit from the productivity gains.
1:11:18
But just a question, the framing of concentrating productivity gains among the few,
1:11:25
it sort of feels like the productivity gains are being treated as a given. Whereas the industrial
1:11:32
list would say what productivity gains without me, like the economy didn't just magically create
1:11:38
productivity gains. Jeff Bezos created Amazon, Rupert Murdoch created a media empire, Elon Musk created
1:11:45
a new company. They all spun off enormous amounts of cash because they produced things like
1:11:50
iPhones that lots of people want. No, good, good for them. And that's what we said all along,
1:11:58
that there is something in the capitalist logic and that that propels these kinds of
1:12:06
new ways of building things, creating things. It also propels the emerges of entirely new kinds
1:12:14
of products that nobody in the past ever thought about such as the iPhone. So that's all great,
1:12:22
but there seems to be a tendency within the logic of capitalism itself that relatively few people
1:12:30
benefit, capture most of the benefits that come out of these kinds of innovation. And I think that
1:12:35
makes, that is in the long term, is A is politically unsustainable, that's what I would argue.
1:12:43
It's politically unsustainable. It also creates certain kinds of economic problems. So now there's
1:12:48
a lot of reporting here in the United States that the only dynamic expanding part of the market
1:12:55
is among the very wealthy that most Americans are actually having increasing problems to maintaining
1:13:02
their standard of living. So that has also then impact on the size of the market. And then last but
1:13:09
not least, the history of capitalism shows that there can be various kinds of inequality regimes
1:13:14
within capitalism. And it's really more of a political decision, what kind of inequality regime
1:13:21
we favor. There was a lot of innovation in the United States in the 1950s and 1960s. There was
1:13:28
a lot of innovation in the country of Sweden in the 1960s and 1970s, which had drastically less
1:13:33
inequality even than the United States. So I don't think that innovation is positively correlated
1:13:40
to a greater degrees of inequality. I think just the just the opposite. And also we are now
1:13:48
capable of producing so many things much more than ever before in human history. And we should
1:13:55
celebrate that. But we should also consider how that kind of unprecedented productivity can
1:14:02
make life better for not just the few, but forever. And so your response to American conservatives
1:14:08
who say that there's something fundamentally uncapitalist about arguing for socially democratic
1:14:13
policies would be what? The answer would be that this is, you know, social democracy has
1:14:21
coexisted with capitalism for more than a hundred years. And I don't see any contradiction here.
1:14:26
Sven, thank you for being on the show. It's lovely to talk to you.
1:14:29
Thank you so much. Great talking to you.