Reviewed by Ruth Latta
Capitalism and its Critics:
A History from the Industrial Revolution to AI
by John Cassidy
Farrar, Straus and Giroux
May 2025, 624 pages, ISBN-13: 978-0374601089
John Cassidy’s examination of capitalism from its origins to the present day is a big book, the size of The Dawn of Everything by David Graeber and David Wengrove. The “two Davids’ book, about the cooperative nature of early indigenous societies, was abbreviated and summarized in a shorter volume.
Should Cassidy’s book be summarized to make it more digestible to a public that likes a quick read? No. Cassidy’s book is a reader-friendly book that takes readers on a journey from the Levellers and Diggers of the English Civil War, to Trump’s America. By selecting an historical figure as the focus of each chapter, he gives readers a human story and makes the past come alive.
Cassidy’s critics of capitalism are many, varied, and don’t all sing the same song.He starts with William Bolts’s critique of the British East India Company, then moves on to well-known figures like Adam Smith, (1733-1790) author of “The Wealth of Nations,” an 18th century study of the relationship between society, politics, commerce and prosperity. Known as “the father of capitalism,” Smith nevertheless criticized colonial capitalism based on slavery. In the 19th century, the major ground breakers are Friedrich Engels and Karl Marx, whose analyses of capitalism still have a world-wide influence. Cassidy finds that some of Marx and Engels’ concepts, such as “the reserve army of the unemployed,”have stood the test of time.
Although most of Cassidy’s subjects are scholars and writers, activists come into this history as well. The chapter, “Capitalism, Colonialism and War,” focuses on Rosa Luxemburg (1871-1919), a Russian-born contemporary of V. I. Lenin, who lived most of her life in Germany under three Kaisers’ authoritarian regimes. She believed that the best way to bring about change was revolution, not the gradualist, reformist approach of the German Social Democrats. In her 1913 book, “The Accumulation of Capital,” she wrote about the harm done to indigenous societies when capitalists turned these “underdeveloped” areas into new markets, and their inhabitants into consumers. Ancient nature-based economies with communal agriculture and strong village organizations were violently destroyed.
Luxemburg spent much of World War I in Kaiser Wilhelm II’s prisons. Then Germany lost the war, the country was in turmoil, and a new government was formed by the two leading socialist parties. Newly-freed, she joined the just-formed German Communist party, and she and Karl Liebknecht led an armed uprising in Berlin in January 1919. This “Spartacist” uprising was put down by a nationalist militia group, on government orders, and she and Liebknecht were murdered.
As a woman, I was glad to see several women’s stories included in Cassidy’s history. Black, Indian, Eastern European and Latin American writers are also present. One example is the historian and politician Eric Williams (1911-1987), a British-educated Trinidadian who became a professor at Howard University, an historically Black, federally-chartered research university in Washington, D.C., founded in 1867.
Williams’s two major histories, published in the 1940s, are “The Negro in the Caribbean” and “Capitalism and Slavery.” Prior to these works, most British economic historians had downplayed any connection between the British-born industrial revolution and slavery. Williams’s study found that the slave trade, both directly and indirectly, supplied much of the capital that funded the rise of British industry. His contemporaries, C.L.B. James (Trinidadian) and W.E.B. Dubois (American) also published books on slavery between 1935-1945, and all three called for decolonization. In 1956, Williams became the first Prime Minister of Trinidad.
In a 1968 memoir, Williams wrote that independence didn’t automatically solve a former colony’s problems, because the economy of the newly autonomous country was usually still in foreign hands. Other economists and historians expanded upon this observation and showed that small countries’ economies were controlled by the world centre of power. (Post World War II, this centre has been the United States.) The “dependency theory,” developed by Latin American economists, asserted that the global trading system was not benefiting all countries, but was transferring economic value from the poor periphery to the rich centre.
Cassidy’s critics of capitalism are not all from the left. He includes Thomas Carlyle (1795-1881), who believed that, prior to industrialization, the British aristocracy had a sense of obligation toward the poor, but that since industrialization, it had neglected them. He wrote that the “mechanical pursuit of measurable progress and monetary gain” had destroyed “higher values.” In his view, the “lower orders” were consequently drawn to the Chartist Movement, a working class movement that peaked between 1838 and 1848. Carlyle did not approve of the Chartist aim to gain political rights and power for the working class, but felt contempt for “the multitude” and for democracy.
Another critic, Henry George, the American author of the bestseller, “Progress and Poverty” (1880), was not opposed to private enterprise per se, but to monopolies, He advocated a “single tax” on land to replace existing taxes. In our present age, this land values tax is called a “capital gains tax.”
Opponents of massive industrialization include Nikolai Kondratiev of Russia and J.C. Kumarappa of India.. Kondratiev, who came from a peasant family, became a specialist in agricultural development, and after the Bolshevik Revolution, was elected to the short-lived Soviet National Constituent Assembly. When Lenin dissolved this assembly, which was supposed to write a democratic constitution, Kondratiev taught at Moscow’s Petrov Agricultural Academy, where he founded a statistical institute to track the country’s agriculture and other industries.
After the USSR withdrew from World War I and signed a peace with Germany early in 1918, counter-revolutionary armies invaded Russia on several fronts. To fight this threat, the Soviet government raised a “Red” Army and directed all economic activity – a policy known as “War Communism.” After the threat of overthrow had declined. V.I. Lenin was able to bring in a “New Economic Policy” which allowed small business and small peasant-owned farming, and ended grain seizures. Kondratiev, who did not believe that capitalism would ultimately self-destruct, thought the Soviet Union should develop and expand agriculture rather than strive for rapid industrialization. As we know, the Soviet leaders pushed heavy industry and collectivized agriculture. Kondratiev spent eight years in prison, was executed in one of Stalin’s purges, and until recently, has been ignored by historians.
During the same period, J.C. Kumarappa worked on a research project for Gandhi in India, and put forward a vision of an Indian economy based on self-sufficient local communities that would grow their own food and develop small handicraft industries. Meanwhile, his colleague in the Congress Party, J. Nehru, was advocating state-led industrialism to catch up with the West. Kumarappa thought this idea was too much like the “economic militarism” of the USSR and would lead to dictatorship.
A Chilean political leader of the late ‘60s, early ‘70s also wanted his country to chart its own course to democratic socialism, rather than follow the path of the Soviet Union. Salvador Allende’s “Chilean Path to Socialism” involved nationalization of the copper mines, a minimum wage, expansion of free education and social security. In one year, his policies raised Chile’s Gross National Product by 8 per cent. Then, world copper prices dropped and in 1971, Chile’s copper earnings dropped by 20% . “Another country,” writes Cassidy, “would have been a candidate for an International Monetary Fund bail-out but the Nixon administration declared a covert economic war on Chile.”
The CIA funded Allende’s opponents and, on September 11, 1973, General Augusto Pinochet led a victorious military coup and Allende shot himself rather than be captured. The Pinochet regime then tracked down anyone suspected of socialism. During Pinochet’s seventeen years of military dictatorship, over 2,000 Chileans were killed for political reasons and thousands more were tortured.
In March 1975, American economist Milton Friedman met with Pinochet and advised “shock treatment,” that is, deep spending cuts. By 1881, Chile had a foreign debt crisis, the currency fell and the government took over large banks. Pinochet’s regime ended in 1990, and was replaced by a democratic government. Since then, the country has alternated between elected conservative and socialist governments.
Cassidy devotes a chapter to Friedman, who rose to prominence when the U.S. and other economies were experiencing “stagflation” – a combination of high inflation and stagnant economic growth. After the Second World War, the West had adopted the ideas of economist John Maynard Keynes, who advocated increased government spending during the periods of cyclical capitalist downturn. Unemployment and inflation were thought to be inversely related, but, by the 1980s, both inflation and unemployment were rising.
Friedman said the best solution to “stagflation” was a slow but steady growth in the money supply to keep inflation anchored, an idea known as “monetarism.” He wanted unemployment to be at a level where the unions didn’t dare ask for higher wages. He was essentially calling on government to increase what Marx had called “the reserve army of the unemployed.” In Britain, Margaret Thatcher put Friedman’s ideas into practice.
Cassidy’s book is comprehensive and thoroughly researched, with pages of references, As one might expect, reviewers in the business community dismiss it. Other readers, though admirers of his work, may disagree with him on his choices of which anti-capitalist thinkers to include. Instead of discussing Chartism in the Thomas Carlyle chapter, for instance, he could have devoted the chapter to this early working class movement, whose leaders certainly spoke and wrote about the way they wanted to transform society. Historical figures who combine ideas and activism are the most interesting.
While it is gratifying to see some female critics of capitalism included, Cassidy’s decision to make “wages for housewives” the main topic of his discussion of the Second Wave women’s movement seems misguided. Not all socialist feminists thought that homemakers ought to be paid by the government for their work. Many felt that wages for housework would lock women into domestic drudgery, furthering the notion that “woman’s place is in the home.” Women employed outside their homes is the norm nowadays. They are now visible, part of the public sphere, and, if unionized, are a stronger force against capitalism than those working in their homes.
Cassidy does not discuss the fact that, after World War II, many countries adopted the idea of universal family allowances. These lasted in Canada until 1992, when they were replaced by tax deductions. Under the old family allowance system, the government sent cheques to mothers, who then had some discretionary income. The amount depended upon the number of children up to a certain age. These allowances, however, were never equivalent to what a woman could earn in a full-time job. Though better than the child tax credits which replaced them, which do not help parents too poor to pay income tax, the “baby bonus” was never sufficient to support a family.
In spite of such debatable points, Cassidy’s history is a tour de force, wide-ranging and well worth reading.
About the reviewer: Ruth (Olson) Latta has a M.A. in History from Queen’s University, Kingston Canada and writes Canadian historical novels about women.