Title: The Long History of Critiquing Capitalism

[MUSIC]

Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. This hour, 300 years of capitalism and its critics. 100 years of Yogi Berra born 100 years ago, today. First, we will journey through the history of capitalism through the eyes of some of its greatest critics. How did this economic system, originating in pre-industrial England, take over nearly every corner of the globe?

Capitalism has presided over governments ruled by kings, democratically elected officials, and fascist dictators alike. It's all encompassing, yet seemingly always in crisis. Capitalism has become an identity, and opposing it is an identity in its own right. On yet another level, many of you know John Cassidy from his pieces in The New Yorker. We'll try to get to one or two of his latest as well like "Donald Trump Versus Barbie."

He's got a new book coming out tomorrow called Capitalism and Its Critics: A History: From the Industrial Revolution to AI. In it, he charts the development of our current political economy through the eyes of those who sought to change it. The book seems suited to a time where Americans' critique of the economy decides elections and capitalism's evolution has seemingly led to global 'polycrises' of income inequality, climate catastrophe, rising authoritarianism, and war.

Donald Trump is trying to return us to a particular form of capitalism if we think about it on a 100-year timeline, 200, 300-year timeline that John's book seems to say was already left in the dustbin of history. John Cassidy joins us now to introduce us to some of capitalism's critics on this timeline and their arguments for reforming the system or overthrowing it entirely. John, always great to have you. Welcome back to WNYC, and congratulations on this epic.

John Cassidy: Thank you very much, Brian. I'm delighted to be on.

Brian Lehrer: First, can you define what you mean by capitalism for the purpose of this book? People might say there was almost always capitalism in human society if we mean people bought and sold things from each other freely, not just made everything for themselves or contributed everything to a community distribution system. What do you mean by capitalism, and starting at what point in history?

John Cassidy: Yes, a very good question, Brian. I'm referring to industrial capitalism mainly. There was a pre-existing system even before Adam Smith and the British Industrial Revolution called mercantile capitalism, which you know was based on a lot of colonialism, the slave trade. I'm really talking about the rise of industrial capitalism, which started in Britain in the 18th century, late 18th century with the invention of lots of new tools to make cotton, and then gradually spread throughout the world. Capitalism, yes, can refer to all sorts of mass production for profit. That's my basic definition: mass production for profit.

Brian Lehrer: Okay, and you already mentioned Adam Smith. Many people casually think of him as the father of capitalism, but your writing about Adam Smith is pretty complicated and maybe myth-busting. You have him as kind of a rebel against a kind of capitalism, mercantilism, kind of Trumpy protectionism for each country, so more father of globalism than father of capitalism?

John Cassidy: Yes, I think, and more father of free enterprise and competition. As I said, or as you said, Adam Smith was basically the reason he wrote the Wealth of Nations, which came out in 1776, which is usually seen as the sort of free market bible, is that he was very critical of the pre existing system, mercantile capitalism, in which there were large monopolistic companies like the British East India Company, which I write about, which had a monopoly on all trade East of Africa, basically, given by the Queen of England in 1600.

This was a giant capitalistic institution with a sort of board of directors in London, which gave orders out to its far-flung operations in India and what's modern-day Malaysia and Indonesia, and it was a modern multinational company. Adam Smith criticized it because he thought it was inefficient. Competition would be more efficient. He also said it was corrupt; it corrupted the government, which it did.

They even had an actual 2008-style bailout. The company got in trouble because of various problems in India, and they ran out of money, and they had to go to Westminster and say, "We're going to go broke." A lot of the politicians at the time were actually invested in the company, so they didn't want to see that happening. They had a sort of 2008-style bailout in 1772. There are lots of modern-- One of the themes of this book is that a lot of things that we think are very modern go back a long way. The sort of problems you see in capitalism, that type of crony capitalism, for example, they recur down the ages.

Brian Lehrer: Clearly, but on globalism and Adam Smith, you say Smith saw colonialism and slavery as an unnecessary diversion from free commerce, and yet slavery and colonialism were at the heart, among other things, but at the heart of global capitalism in those days, the 1700s, weren't they?

John Cassidy: Yes, they were. No, he was looking for a different type of globalization. His argument, which I think a lot of historians have questioned, is that slavery wasn't even economically necessary, that the cotton trade and the other trades in the Americas could have used free labor, which they did for a while, or rather, they used indentured labor. A lot of other modern historians question that, and they say it was such a labor-intensive industry in such hostile conditions that, really, the plantation owners chose slavery because they couldn't find any other.

It was economically driven, basically. It was the easiest form of labor that they could access. Smith's argument was that that was unnecessary, but it wasn't just an anti slavery argument. He was arguing that mercantile [unintelligible 00:06:35] wasn't one just based on slavery; it was also based on protectionism. There were high tariffs. It was very similar to what Trump has introduced, actually. If you wanted to do trade with Britain, you had to put your goods on British ships.

That was the Navigation Acts, and actually Britain went to war with the Dutch and other countries to protect its markets. It was a very protectionist, aggressive trade model, and Smith thought that that was, A, morally wrong, but, B, was economically inefficient because if you let markets work and cut tariffs, free trade would supply a lot of the goods that you need anyway. It was a very modern debate, really, even though it was cast in terms of 18th-century context.

Brian Lehrer: When we talk about Donald Trump-style protectionism, I think it often gets linked to something that was going on 100 years ago in the 1920s when there were a lot of tariffs and they seemed to contribute to the Great Depression. You're saying we could go back even further to the pre-Adam Smith, pre-1776, and that's an interesting year for Adam Smith to have published the Wealth of Nations, by the way, right? 1776, but even before that, this model that Trump is looking at, which you call mercantilism.

John Cassidy: Yes. No, Trump is a mercantilist, there's no doubt about it. He, obviously, mentions the American mercantilist of the late 19th century, William McKinley, as his model, but sure, the actual trade model itself goes back further. Some people say it goes back to Alexander Hamilton, who obviously wrote the Report on Manufactures. Hamilton was in favor of protecting infant industries, young industries that had grown up in the New Republic.

That's a sort of more limited form of protectionism than what Trump is. Trump's basically in favor of blanket protectionism on everything, and that does separate him even from the 1920s. His tariffs, well, he keeps reversing them every day, of course, so we have to be careful how we define them, but the ones which he introduced on so-called Liberation Day, April 2, would have raised the tariff rates back to sort of 1900 levels. He was even more protectionist than the 1930s.

Brian Lehrer: Listeners, if you're just joining us, my guest is New Yorker economics writer John Cassidy, author of the brand new book, Capitalism and Its Critics: A History: From the Industrial Revolution to AI. Who has a question, a comment, or a story? 212-433-WNYC 212-433-9692. Is there a first anti-capitalist movement that you identify in this timeline?

John Cassidy: Well, the first one I write about is the Luddites, the artisanal workers in northern England, who jobs were displaced by new technology in the wool and cotton textiles industries. They were basically using hand tools and had been using them for centuries, and then it was very much like what we see now, with what we've seen for the last 30, 40 years, with, first in manufacturing and now it looks like in services, technological displacement.

The tools were much more crude in those days, but they did enable factory labor. Power looms and power spinning tools. Basically, they allowed cotton and woolen textile entrepreneurs to build big factories and set up the first production lines, and the pre-existing artisanal workers were basically cast aside, most famously the handloom workers, who a lot of them were pushed into starvation, basically.

It produced a political movement, I guess you'd call it, although it was very raw, the Luddites, who gathered late at night and basically tried to break into factories and smash the machinery which was taking their jobs. Luddite for centuries has been seen as a sort of term of abuse. You call somebody a Luddite, it means they're against modernity, and you're seen as stupid, really, if you're called a Luddite.

What I tried to highlight in writing about them is that from their point of view, it was actually a very rational sort of protest. They didn't have any political representation at the time. Britain was basically an oligarchy that there wasn't universal suffrage. The new industrial areas had virtually no MPs at Westminster at all. They did go to Westminster and asked for help, and they were blankly turned down. These violent protests were basically the last resort they had. They were crushed ruthlessly by the government as well.

Brian Lehrer: Yes, I was so interested in your take on the Luddite movement, partly because it seems to have been tarred over time as people who are just against modernity, as you say, but you put it in that very specific context of artisans whose jobs were being taken over by machines. As we worry about AI robots taking people's jobs, even like software engineer jobs, not what we think of as artisans making things by hand, but machines were already doing that 200 years ago, and that was the context. Where does AI, which is in the title of your book, come up?

John Cassidy: Well, AI is in the final chapter, which I have a chapter on the end of capitalism or the beginning, and I basically discuss AI. The defense of capitalism has always been that, sure, it's very destructive to existing industries, but it's also very creative. Schumpeter, the famous Austrian economist, called it creative destruction, and if you do look over the very long term, capitalism has created more jobs than it's destroyed.

Most economists, certainly most free market economists say that they, they always make the argument that the costs are just the necessary, they have to be the necessary part of the process of economic growth. As I said, if you'd look at that over the long term, that's true, but that doesn't help the people who are caught at the short end of the wedge, such as the Luddites in the original case.

Now with AI, I think what's new about it is it's threatening middle-class and upper professional middle-class people as well. It looks pre-automation, for example, in the '80s. Obviously, computers aren't new, but computer-driven robotics and automation from the 1980s onwards largely displaced manufacturing workers. If you go to a modern car factory, there's far, far fewer workers than there were 40 years ago or pretty much any sort of factory.

It looks like AI is starting to, it's already started to display software engineers and computer programmers. It could well displace doctors, teachers, all sorts of professional people, you can see it displacing. Even if it does end up creating jobs, we don't know what they will even be at the moment. It's going to create a lot of disruption. That's why you see even tech barons, who are obviously very supportive of this technology, like Musk and Altman, they're coming out in favor of universal, or they say they are anyway, of a universal basic income.

I don't see them volunteering to pay more taxes to support a universal basic income, but they are acknowledging that this is going to be a huge social challenge in the years and decades ahead.

Brian Lehrer: Eric in Lyndhurst in Jersey, you're on WNYC with John Cassidy. Hi, Eric.

Eric: Hello. How are you doing?

Brian Lehrer: Good.

Eric: There's always been a thought in the back of my mind when we talk about capitalism. A lot of people seem to think that capitalism is antithetical to government, and I always kind of think that government is created from the same forces that create capitalism, because at the end of the day, it's not just entrepreneurialism and inventiveness and hard work that create all the powerful corporations.

It's people shelling out money from their hard-earned pockets to make these companies powerful, and when the free market cannot provide people with what they want, government is what the people create to give them what they need and want that the free market can't provide, and I just kind of feel like framing it that way can maybe make some people be more on the side of big government, seeing that it comes from the same forces that create capitalism in the way people generally understand capitalism to be. I just wanted to hear your thoughts on that.

Brian Lehrer: Thank you, Eric. John?

John Cassidy: Yes, that's a very good point, Eric. In my book, I address it specifically in terms of the 1930s, the New Deal in the US, and Keynesianism. I have a chapter on Keynes. Keynesianism and the New Deal basically saved capitalism. It looked like it was on its last legs in the early '30s. In the Great Depression, there were genuine fears of the system would end up being overthrown.

In Europe, Communist parties were becoming popular. Lots of Keynes's students in Cambridge, England, had joined the British Communist Party. Keynes, who was a liberal, and FDR, who was also a liberal, obviously, and they were both in favor of the basics of retaining a capitalist system, private ownership, et cetera, but they realized it was in massive crisis, and the only way you could save it was through large-scale government intervention.

Both to prop up the level of demand, Keynesian stimulus policies, but also to provide a basic level of standard of living for people, the working classes that started out in Germany under Bismarck, who was certainly no socialist, he was the first one to introduce social insurance, and then it was expanded through Britain, and the US in the first half of the 20th century. To be sure, that is what saved capitalism.

The idea that capitalism, as you say, capitalism and the government are antithetical is just completely wrong. It's a sort of twin system. They're intertwined in all sorts of ways, and any effort to separate them, one of the problems we've had in the last 40 years is we've had this free market utopian experiment in unregulated globalization, which is basically just letting the market rip on a global level.

A lot of what we're seeing both in Trumpism but also in populist movements in the rest of the world is a backlash against that model. That's the challenge facing people in the center and on the left. Trump, whatever you think of him, has put out an alternative that's sort of "Let's go back to mercantilist economic nationalism," and I think it's up to the center and the left now to say, "Well, here's the alternative. We need to come up with a more workable form of capitalism or whatever."

Some people on the left would say, "We need to have much more radical change and go to degrowth or even socialism or whatever," but it's clear that the system that went into effect post-Cold War, we're not going back to that, and the big question is, what are we going back to, or what are we going to create?

Brian Lehrer: Well, you were just talking about utopian capitalism, the globalism of the last 30 years, and what people thought it could produce, hoped it could produce, but as you know, critics of socialism often use that language, right? That socialism is utopian. Before Marx and Engels wrote The Communist Manifesto in 1848, came the utopian socialists, as you described them, who saw injustice during the time of the Industrial Revolution through their eyes. Can you define utopian socialism as you use it in the book, and then talk a little bit about the place of Marx in history in the context of the timeline you're laying out?

John Cassidy: Sure, sure. Well, basically around the same time as the Luddites, the early 19th century, there were a series of experiments in Britain, America, and France to try and build an alternative economy. People looked at the dark satanic mills, as they used to be called in Manchester and places, and the 12-hour days that children were working longer than that until the Factory Acts.

They thought it was just ruthlessly exploitative, which it was, and there were movements in various countries to try and set up an alternative economy. At the time, it was called, cooperation was the key phrase, cooperative economies. Robert Owen in Britain and Fourier in France, they produced detailed plans for self-governing, small-scale artisanal communities, where maybe a thousand, a few thousand people would get together, create a new community, farm the land, have artisanal workshops, whereas they provide for themselves and basically create a new way of living. The most famous one, of course, is New Harmony in Indiana, which Robert Owen tried to set up, or did set up, but it only lasted a few years.

Brian Lehrer: When was that?

John Cassidy: That was in the 1820s, and then he came over from Britain and set it up himself. He was Welsh, actually, but it collapsed into internal acrimony, and he left after a couple of years and left his sons to run it. It did linger on, but it never really succeeded. There were obviously other experiments in this, and they worked on a small scale, but there was never a proof-of-concept model which showed how this could work and be expanded nationwide.

That was always the rap on it, that it was, as Marx said. Marx dismissed these guys from the left as utopian socialists, and his argument was obviously that you needed a thorougfaring different type of system than capitalism. The rap on Marx and Engels, of course, is that even though they had a very powerful critique of capitalism, which I lay out in my chapters, they didn't really have a model of what would replace it.

The followers of Marx and Engels in the late 19th century and the early 20th century, especially the Russians, when they actually had a revolution, they didn't really have any blueprint, a sort of Marxian blueprint to draw on of how to create a new socialist economy, and the model they used, state planning, centralization, replacing markets, basically, it worked in its own right pretty well for three or four decades.

It did drag Russia out of backward agricultural serfdom, neoserfdom really. That serfdom had been abolished in 1861, but it did drag them into the modern world, but it wasn't able to compete with modern capitalist economies in the post-war world, and eventually, of course, it collapsed.

Brian Lehrer: To that point, a listener writes, "Keynes and FDR transformed capitalism into consumer capitalism, something Marx never envisioned." Agree?

John Cassidy: Yes, I think Marx didn't really; he was very much focused on production, the production side of things. He didn't really talk that much about the-- The consumer society didn't really exist then. Most workers were still struggling to earn enough just to subsist. The big struggle at the time was for labor unions and for giving people a basic standard of living through higher wages.

What FDR and Keynesianism produced, as your reader says, is consumer capitalism, but that's the critical side of it. I think you shouldn't lose sight of the positive side of it as well. This was capitalist social democracy, especially in Europe, with free education, free health care in lots of countries. This wasn't capitalism in the raw. I call it managed capitalism. Also, in the post-war decades, when it was in effect, we had a lot less inequality, shared prosperity to some extent.

In the US, obviously, you have to qualify things because there's always been huge racial divisions and huge regional divisions. Obviously, some parts of the country and some groups in the country didn't share in this shared prosperity, certainly not to a full extent, but compared to what came before and what came after, it was a much more inclusive model. I think it worked pretty well for 30, 40 years, until again it collapsed in the inflation of the 1970s and was replaced by Reaganism in the US and Thatcherism in the UK.

Brian Lehrer: A Listener who supports the DSA, Democratic Socialists of America, writes, "Please remind people that if you receive a paycheck, you are not a capitalist." Do you agree with that statement?

John Cassidy: Yes, capitalists, in the original formulation, the classic distinction between capitalism and workers is the capitalists own the means of production, and the workers only own their labor, so the listener's completely right. What changed in the 20th century was, because wages went up quite a lot, workers started to accumulate property of their own, houses in some cases, in the modern age, 401(k)s, et cetera.

I was staggered when I first came to the US to see that working-class people had second homes, little holiday cottages around the place, which you would never see in Britain or most of Europe. That complicates the class distinctions, but I think what we've seen in recent decades is the class distinctions have become more stark, not less stark. It became less stark over most of the 20th century.

By the end of the 20th century, they became much more stark and inequality increased enormously, and we had the emergence of this mega Plutocracy, which we see now in the form of the tech barons, particularly where they basically exist in a separate world to the rest of us, and wages stagnated for a long time. From the '70s to about 2015, there was very little wage growth. There's actually been some wage growth in the past decade, which is an encouraging sign, but class divisions have become more stark, I think you'd have to say, over the last 50 years than before.

Brian Lehrer: Almost out of time with John Cassidy, New Yorker economics writer, now the author of Capitalism and Its Critics: A History: From the Industrial Revolution to AI. James in Manhattan, bringing us to the present. James, you're on WNYC. Hello.

James: Hello. Thanks for the interesting conversation. Just quickly, I'm a capitalist, but lately, especially with the rise of private equity, I'm starting to think that capitalism is a form of cancer, given the fact that they buy up entire neighborhoods, they buy up small or large nursing homes and medical practices and strip them down to basically a fast food formula, and they're really squeezing the middle class for every nickel and dime [crosstalk]

Brian Lehrer: Despite that description, James, you described yourself at the beginning of the call as a capitalist. What is it to you?

James: Yes. Well, to me, capitalism is working hard and making money. The last question was interesting. I never thought of myself as a worker as opposed to capitalist because I do receive a paycheck, and I've enjoyed capitalism in general in the United States, but now, particularly with the rise of private equity, it's not just tech pros, it's not just AI, it's all this concentrated money that now working class people have to compete with without any kind of government regulation, which they seem inept or unwilling or can't do because of lobbying, I worry about the future of 'American capitalism.'

Brian Lehrer: You told our screener, the real experiment of America, you think, isn't democracy as an experiment.

James: It's not democracy, yes. It's capitalism.

Brian Lehrer: It's whether capitalism can be controlled. Whether it can be controlled.

James: That's right.

Brian Lehrer: James, thank you very much. John, to close, following up on that interesting caller, what even counts as capitalism and what doesn't? Europe's social Democrat parties, are they capitalist, or are they socialist, or the democratic socialists of America in the United States? I don't think AOC wants the government to own the major industries. Where's the line between well-regulated market economics and something you might not call capitalism at all?

John Cassidy: That obviously is the great political debate. As you say, as far as I can see, there's very few old-school socialists left, even in the US or even in Europe, who still believe in state socialism and central planning. It's an interesting debate about whether it is feasible or not, given computer power, et cetera, but anyway, for now, it seems like there are very few supporters of that.

We're all in favor of some form of managed capitalism, I think, as everybody on the center and the left, anyway. The question is, where do you draw the line? Somebody like AOC or Bernie Sanders or Elizabeth Warren, Trump calls them Marxists, et cetera, but that's just ridiculous. They're in favor of a form of managed capitalism, which, to get back to your last caller, for example, capitalism, if you leave it by itself, will tend to have a big tendency towards monopoly.

We haven't used that phrase yet, but that's what private equity is basically about. They're trying to sweep up small companies in whatever industry they target, consolidate them, bring them into a bigger block, which has more market power. They can then raise prices, cut costs, and make more money. That's a form of capitalism. It's monopoly capitalism, and I think your caller and most Americans would find that abhorrent.

In the Biden administration, there was an attempt to beef up antitrust and take on some of these companies, and FTC did start to look into some private equity firms. They didn't really have the time to do it on a systematic basis, but the effort was there, and the intellectual analysis was there. It was very disappointing, I think, you'd have to say from a center and left point of view that that didn't prove more popular.

Now, was that just because it's hard to sell, or because the corporations own the media, some people on the left would say whatever. It seems to me that is a populist line, which has a strong tradition in American history going back to the populist movement in the late 19th century as well, which could be part of the fight back from the left and the center against Trumpism.

Trump himself even sometimes poses as an enemy of big business. He certainly did in 2016. These are the battle lines going forward. We're sort of stuck with capitalism, it seems. How do we make the best of it? There are various ways to go about it in terms of expanding the social safety net, making sure we have proper competition policy. How do we deal with things on a global level?

That's a huge question as well. As I said, the main point of my book is that these debates have been going on for centuries, and they come up in different guises, and we're facing particularly-- because basically what's happened in the last 50 years is capitalism has gone global with the entry of China and India. It used to be Western capitalism; now it's global capitalism, and that brings its own challenges, but it's not something completely new. We've had to deal with these things before, and I just try and relate the current debates to previous debates in the book.

Brian Lehrer: "100 Years of 100 Things" Number 92, with extra credit to John Cassidy for taking us through 300 years of Capitalism and Its Critics. That's the title of his new book, Capitalism and Its Critics: A History: From the Industrial Revolution to AI. John, thank you so much. Really, really interesting.

John Cassidy: Thanks very much, and I look forward to hearing about Yogi Berra.

Brian Lehrer: Ha.

Copyright © 2025 New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.

New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.