So much about the long history of the bourgeoisie seems settled.
Immediately, though, one runs into a gigantic scholarly controversy fueled by politics. It’s that way with all writing about the bourgeoisie since Rousseau and especially since Marx. You can’t mention the very word “bourgeoisie” without raising blood pressures all around.26 You can’t defend innovation and a market society, and claim that all people have engaged in them from the earliest times, without someone claiming indignantly that on the contrary that innovation and markets and their wretched bourgeoisies are modern, and nasty: “capitalism.” The progressive journalists nowadays such as Barbara Ehrenreich and Nelson Lichtenstein, claim that WalMart is an evil octopus with “tentacles of trade and commerce,” spoiling the trade-unionist paradise they envision.27 The generation of American historians coming to the field in the turbulent 1960s claimed that eighteenth-century colonists in British America needed to learn to be capitalists, and didn’t get it until the early nineteenth century. And the generation of ancient historians after the still more turbulent 1930s claimed that it is anachronistic to call what Sumerians or Greeks did when they moved goods around “markets.”
During the late 1930s and early 1940s Karl Polanyi (1886-1964), a refugee in London and then Canada and the United States from the chaos of Central Europe, researched what he believed was the true history of markets, publishing the results in 1944 while financed by the Rockefeller Foundation at Bennington College in Vermont, in The Great Transformation. The book is still eagerly read, and has never gone out of print. Googling it on January 13, 2010 for all hits since the beginning of 2000 yielded an impressive 103,000.28 Compare that with smaller numbers for similar and similarly long-lived books from the time: 64,000 for Joseph Schumpeter’s Capitalism, Socialism, and Democracy (1942), 43,200 for Friedrich Hayek’s The Road to Serfdom (1944), and 22,200 for Eric Williams’ Capitalism and Slavery (1944).
(Yet we academic scribblers need to remember in proper humility that Ayn Rand’s The Fountainhead [1943; film 1949] gets on the same basis 433,000 hits, and still sells 100,000 new copies a year. Ã‰mile Zola’s Germinal , which confirmed many of us as lefties when we read it in college, gets 740,000 hits, got three French films [1913, 1933, 1963], and has never gone out of print. Not further academic scribbling, alas, but good or bad art, highbrow or low, is what makes ideas really big. Frank Norris’ The Octopus  and Upton Sinclair’s The Jungle [1906, movie 1914] and Oil [1927; movie 2007 as There Will Be Blood] and Sinclair Lewis’s Babbitt [1922; movies 1924, 1934] and John Steinbeck’s The Grapes of Wrath [1939, movie 1940, play 1990, opera 2007, 798,000 hits in August 2010] did more to prepare Americans for a welfare state hostile to the bourgeoisie than any number of socialist tracts or left-leaning academic books of history.)
Polanyi was a lifelong socialist. His beloved wife Ilona Duczynska Polanyi (1897-1978) was one of the founders of the Hungarian Communist Party. She was expelled from the Party in 1923, and later from the Austrian Communist Party, too — she was a woman of the left but not it seems a Party serf. She was therefore denied in the age of Joe McCarthy a visa to accompany her husband from Canada to his new job at Columbia. Karl, though less radical than Ilona (he did get a visa) believed that markets, the bourgeoisie, and capitalism were mere vulgar novelties, mere interruptions in more civilized ways of getting our daily bread. That is, contrary to what I claim here with talk of Upper Paleolithic trade, and Ur and China and ancient Rome, the Polanyis and the Polanyists have believed that bourgeois behavior is recent.
The Polanyist claim — that widespread trade for goods and property in land and cash transactions in labor didn’t exist until modern times — dates from Romantic and Marxist tales in the nineteenth century by Georg Hanssen, August von Ha***or au?xthausen, Georg von Maurer, Marx, Engels, Sumner, Maine, and Lewis Morgan. [Quote Maine, for example, and Sumner as brief evidence of the Romantic and German tale.]
No one actually living in early medieval or ancient times claimed that markets didn’t exist. Confucius, Jesus of Nazareth, Horace, Aquinas, Chaucer, Luther can all be found speaking of them as though it were obvious that they operated on a very big scale, to be approved or not, in all items from labor to eternal salvation. Yet left- and right-wing theorists and historians in the nineteenth century looking backwards devised the notion of marketlessness that now haunts the social sciences. The Romantic notion has been shown repeatedly to be scientifically mistaken. Yet it continues to inspire an anti-modern fervor. The “Romantic theory, based on the thinnest evidence, most of it subsequently discredited,” the historian of Russia Richard Pipes observes in discussing the matter, “became henceforth mandatory in the socialist literature and in much of general literature.”29
Polanyi wrote for example that the labor market in England did not exist until the nineteenth century.30 Until then, he claimed, English people did not work under the discipline of supply and demand. Wages, he said, were conventional, decided as it were in a social contract of reciprocity. He said the same of land sales, and indeed he did not think that so-called “markets” in grain and the like were before recent times anything other than administrative methods for provisioning the people. [cites and quotes.] The bourgeoisie was recent, the market was a parvenu, capitalism was an ethical catastrophe of recent origin.
The official Marxist version is that feudalism was inconsistent with markets in commodities and labor and land. Marx himself is to be excused for such erroneous history, because he wrote so long before the evidence was in. Especially since 1900, when the German ideology of medievalism started breaking down in the face of the evidence, historians have found repeatedly that it is mistaken. Since 1944, further, scholars have discovered that Polanyi’s economic history of England is utterly, completely, even embarrassingly mistaken. Half of southern Englishmen were laborers as early as the thirteenth century, with wages and especially non-wage compensation varying markedly by supply and demand. Land in large and small plots was vigorously traded by all levels of society.31 [Add matter from Bourgeois Dignity.] Markets eroded a system of military service imposed by the Normans, based on holding estates “of” the king. So-called “scutage” had already in the twelfth century allowed knights to pay instead of play, and every form of feudal tenure dripped with money.32 Feudal tenures early became taxes and rents. And beneath such doings of free men recorded in the King’s courts, the mass of serfs could buy and sell land and labor and whatever they wished with only modest let and hindrance from their lord.
In other words, the shift to financial substitutes for feudal duties in kind occurred at all levels of English society many centuries before the Marxist dating of the sixteenth century, not to speak of Polanyi’s dating of 1800. If means of production involving paid labor and bought land and purchased goods “contradicts” a pre-capitalist feudalism, the contradiction arose shortly after William conquered England, and indeed it looks like it was working, too, at the time of Alfred the Great. We have the documents, and have gotten more and more and more of them as the intellectual haze surrounding the Middle Ages has lifted.33 The legal historian Harold Berman is not saying anything that a historian of medieval Europe would find shocking when he asserts that “not only capitalism but bureaucratism [in the Church], rationalism [in the universities], and indeed ‘modernity’ in all its forms [the postmodern carnival, for example] were characteristic of European society to one degree or another from the twelfth century on.”34 As a great student of such matters, David Herlihy, wrote in 1971, “research has all but wiped from the ledgers the supposed gulf once considered fundamental between a medieval manorial economy and the capitalism of the modern period.”35 Markets pervaded all of Europe from the earliest times, as they have pervaded much of the world always. Kingdoms, barley, protection, wives, boots, marketplaces, and salvation in Europe were bought and sold, as in most places, such as Aztec Mexico and Mughal India. Everything was for sale.
Contrary to what most educated people believe, therefore, Europe and certainly England was from the earliest times — though not modern in its attitudes towards the bourgeoisie and innovation — was thoroughly “monetized” and was nothing like a “subsistence” or “barter” economy. It would be difficult otherwise to explain, to take an early sort of evidence for England, the danegelt beginning in 991, assessed in silver and paid as protection money to the Vikings, or hoards of precious metals found at every chronological level from the pre-Roman era on, or the ubiquity of money measures in the earliest records, such as the Domesday Book of 1086. Such facts have been known for a long time, and recently their meaning has become even clearer. As the leading scholar of trade in the “Dark Ages” before the eleventh century wrote in 2001, “economic historians are moving increasingly to the view that the advanced regions of the Frankish economy [that is, of Charlemagne and his son Louis the Pious, ruling over all of France, most of Germany, and the north of Italy 771-840] were more monetized than almost anyone dreamed three decades ago.”36
[Maybe here the Columbia historian's book]
In other words, most of what you think you know about how things worked in the Middle Ages — a hazy theory that Polanyi and you and I and Monty Python’s Flying Circus acquired from schoolbooks and journalism and movies reflecting the earliest generations of historical scholarship, especially nineteenth-century German scholarship under the influence of a Romantic love for the Gothic — has proven to be quite mistaken. Medieval peasants in fact, it has been discovered since 1900, were profiteering and rational.37 I myself have contributed in a small way to the flood of evidence that Europe (and as still more recent literature has shown China and South Asia and the Ottoman Empire and the rest) did not need to learn how to be Homines economici. They already were. In the 1970s and early 1980s I â€¦. [Give a little piece of work on open fields***]
Profiteering and rational. So are most people for example in the Grimms’ fairy tales, first published in 1812, and the source of much Romantic elaboration, but dating in their first (and sometimes it must be admitted rather different) versions from centuries before. The alert Three Apprentices in the tale are to answer all questions in sequence, “All three of us. For money. And quite right, too.” In repeating such a collective admission of capitalist guilt they ensnare an innkeeper who has murdered a rich merchant for his money, and are rewarded (by the Devil) in money for the rest of their lives.38 A foolish peasant in another tale “had driven his cow to the fair, and sold her for seven thalers.” (So much for moneyless barter and subsistence.)
On the way home he had to pass a pond, and already from afar he heard the frogs crying, “Aik, aik, aik, aik.” [That is, as he imagines, acht, acht, acht, acht: eight.] . . . . He cried to them, “Stupid animals that you are! Don’t you know better than that? It is seven thalers and not eight.” The frogs, however, stood to their, “aik aik, aik, aik.” . . . . “What,” cried the peasant, quite angry, “since you are determined to know better than I, count it yourselves,” and threw all the money into the water to them. . . . . But the frogs maintained their opinion and cried continually, “aik, aik, aik, aik,” and besides that, did not throw the money out again.39
The tale laughs at a economic imprudence of throwing money around, in a thoroughly monetized economy. [***A version of the popular theory believes they were nice to each other: Barbara Hanawalt quoted to the contrary.] The denizens of rural Europe were not in the Romantic sense “peasants” at all. One would have thought that the Romantic historians would have listened more intently to Jacob and Wilhelm Grimm, or that their followers nowadays would listen to modern scholars like Hanawalt. It is doubtful that any peasant community, from the Russian mir to the Vietnamese village, exhibited the mentality of the closed corporate community imagined on the left and right after the Romantics.4
In 1979 the historical anthropologist Alan Macfarlane summarized critically the long-exploded theory as “a progression from small, isolated communities inhabited by ‘peasants’ . . . towards the market, monetized, ‘open’ structure of the eighteenth century,” and showed that for England at any rate it was entirely mistaken.41 Macfarlane has done ample work himself on the primary documents exposing the mistakes. But the point here is that in 1979 he was building also on 70 years of revisionism in medieval economic and social history.
One could go on about the errors in Polanyi’s European economic history, in detail and in gross. But that would be tedious and even cruel. Perhaps you can believe me, a Professional Economic Historian, when I say that the economic history of Polanyi for recent centuries is embarrassingly weak.42 And I urge you not to indulge an understandable impulse to sympathize with poor Polanyi just because he is being criticized. The man himself was apparently a sweetie, and was much loved. But that does not make his science correct.
In truth his scientific errors are not so embarrassing in Polanyi himself, educated as a lawyer and working as a journalist, and not as a fulltime scholar until the heirs of John D. Rockefeller’s Baptist charity smiled on him, and whose great book was written in the late 1930s and early 1940s, and written astonishingly well in a newly acquired language. Yet the hundreds of scholarly books based on primary source from medieval and early modern Europe that were written since 1944 (and many before) and that flatly contradict his views are now readily available to his latter-day followers. The Polanyians do not appear to have studied them. Theirs is a greater scientific embarrassment than that of sweet Karl himself.43
Some very perceptive scholars have fallen for Polanyi, because a big part of what he says — that ideology and rhetoric matter — is so obviously true and important. Therefore they have believed the rest of what he says — that societies were not organized by markets until the nineteenth century. The emotional pattern seems to be something like, “Polanyi, a leftist like me, says many true things, beautifully. Therefore his tales about what happened in economic history must be true.” (Marx before him got similar treatment, and lately the more eloquent of the environmentalists such as Wendell Barry get it, too. Truth is beauty, people want to believe.) Likewise on the other side of the political spectrum, which is also hostile to the Age of Innovation, conservatives react in parallel fashion to their fellow conservatives, such as Carlyle: “Carlyle is a sneering conservative like me, and writes in an engaging and idea-filled, if not exactly beautiful, style. Therefore his tales about the warmth of the relationship between master and slave in Jamaica, or lord and peasant in merry old England, must be true.” Both left and right oppose the market and are alarmed by innovation, and both adopt the premise that the market was a novelty, and that innovation ruined solidarity. When people on the left and right find an especially eloquent expression of their distaste for markets and innovation they are liable to stop reading.
A brilliant young political scientist, Sheri Berman, for example, acknowledges her debt to Polanyi in the first page of her book of 2006, and goes on to retail the story so comforting to the left, that “only in the eighteenth century [Polanyi actually said the early nineteenth] did economies in which markets were the primary force in the production and distribution of goods begin to emerge.” Like her favored social democratic welfare states of the post-War, she claims that before modern times “decisions about the production and distribution of goods were made not by markets but by those with social and political power.”44 She is factually mistaken. If it were true, for example, real wages would not have risen after the Black Death had killed one third of the laborers in Europe. Yet Berman says more correctly, citing Polanyi and a paper that Santhi Hejeebu and I wrote detailing the factual errors in Polanyi’s economic history, that “capitalism meant an end to a world where one’s position and livelihood were defined primarily by membership in a particular group” — the society of status as against the society of contract.45 And still more correctly she says that “perceived failures. . . of the reigning intellectual paradigms create a demand for new ideologies.”46 That’s right, and quite disturbing to “many Marxists, rational-choice theorists, and realists, . . . [for whom] ideologies are best understood as mere tools or ‘cover’.”47 It is at the level of ideas that society changed, out of demands for replacements for institutions perceived to have failed. Yes. The perception of failed institutions therefore inspired, as she goes on to relate, the move to social democracy in Sweden and Holland and England and France.
Walter McDougall’s handsome popular history of the United States (2004), to give another recent example, begins with Polanyi’s picture of an England in the sixteenth century as an “embryonic market society.” “At no time and place” than in England, declares McDougall (whose use of italics is elsewhere more restrained), “in the century preceding England’s overseas expansion,” that is, the sixteenth century, “was an entire society organized by market exchange.” His warrant for such an startlingly outdated assertion is a book from the Monthly Review Press by Ellen Meiksins Wood, whom he describes as a “renegade Marxist.” “She in turn,” he reports, “praises the insights of Karl Polanyi’s classic The Great Transformation. “48 Just so. Yet in fact Greece, Rome, Gaul, Italy, the Viking lands, Germany, Poland, England from ancient to early modern times were entire societies heavily influenced by market exchange (which does not of course mean that other institutions such as families or kinship or kingship or religion had no influence on how the society worked, even in economic life, then or now). Polanyi didn’t agree that markets mattered in olden times. But the evidence accumulated since he wrote tells a story of economies rich in markets in Europe (and in China and South Asia and the Moslem lands and Africa) — though the markets were disdained in the rhetoric of the elite, and left the bourgeoisie and its innovation trammeled.
Even historians whose detailed scientific findings contradict the Polanyist talk are liable to slip into Polanyism when they are not paying strict attention. Because the modern world is shockingly rich (which is true) it must be the case, the historian Joyce Appleby concluded recently, that “capitalist practices represented a radical departure from ancient usages when they appeared upon the scene in the seventeenth century.”49 The English seventeenth century is her field of scientific specialty, and long ago she discovered that an “intellectual engagement with the meaning of economic change” — an astonishing 300 pamphleteers arguing out the logic of monetary reform in the 1690s, for example — “blocked a reversion to the old ways of thinking.”5 That’s right, and accords in fact with Polanyi’s ancillary (if non-materialist and therefore self-contradicting) idea that ideological change in England around 1800 was what supported the modern and distasteful world. (Appleby and I show that the change happened a century and a half before Polanyi thought it did. But change it did.)
Yet when Appleby thinks a little about earlier economies, outside her specialty, she turns Polanyist. Everyone tends to, because, to repeat, Polanyi gives expression to the nineteenth-century Romantic story on which we all were raised. We all revert to fairytales when we get beyond what we actually know, especially when the tales seem to support what we believe fervently to be politically true. It’s human nature, or social psychology, or ideology, or rhetoric. We adopt stereotypes about women or black people or medieval peasants or robber barons just when we actually don’t know much about them.
Capitalism, defined by Appleby merely as “a system based on individual investments in production of marketable goods” (but that would describe any society from the caves onward, making stone arrow points for sale) “slowly replaced the traditional ways of meeting the material needs of a society” (but there was no “way” from 50,000 BCE on that did not use marketable goods, that is, trade). Unless “traditional ways” are simply defined to be “ways before 1700,” which would make the sentence into a tautology, it is scientifically false. There was no “replacement.” Appleby then reverts to straight Polanyism: in olden times “custom, not incentives, prompted action and dictated the flow of work throughout the year.” Custom mattered, of course, as it does now in the offices of Google and General Motors, too, but it did not “dictate the flow of work.” Markets, profitability, and the slow pre-industrial pattern of innovation did. Look at the open fields of medieval England. “People did not assign themselves parts in the social order,” she continues. “Tasks were allocated through the inherited statuses of landlord, tenant, father, husband, son, laborer, wife, mother, daughter, and servant.”51 But that’s how they are “allocated” now, if one means the social roles that people traditionally start with. The task of child-minding is traditionally “allocated” to the mother, and only by a reallocation does it move, in the market or in the home, under a feminist ideological change and a change in the provision of marketed alternatives to food preparation and child care. The task of hiring labors is “allocated” to landlords in all eras. But markets then as now help determine how such social roles were reallocated, a serf tenant in 1300 hiring laborers to harvest his big holding, and so becoming for the nonce a “landlord,” or a father in 1400 surrendering the farm to his son, or a daughter in 1550 shifting from field work to dairy when the price was right.
Polanyism still rules in a few circles, in other words, but it rules against the evidence. It goes in cycles. Polanyists rise up among students of the Vikings or of West African trade, enchanted by Polanyi’s vibrant prose and his retailing of a Romantic myth that the people of olden times were very different from you and me. And then yet again in the particular study the Polanyists are proven to be mistaken. Local and foreign trade takes place. Prices respond to supply and demand. Bourgeoisies specialize in devising and making and trading and financing. Perhaps we should stop being amazed when we find it all happening, yet again.
American historiography 1815-1848, for example, seems to have just gone through such a cycle, which began with Charles Sellers’ brilliant Polanyist book, The Market Revolution: Jacksonian America, 1815-1846 (1991), and after much inquiry has ended with Daniel Walker Howe’s anti-Polanyist What Hath God Wrought: The Transformation of America, 1815-1848 (2007).52 Sellers depended for his picture of a communalist Eden before 1815 on New Left historians of the 1960s and 1970s specializing in eighteenth-century America. Historians fortified by Polanyi, such as James Henretta, Michael Merrill, Robert Murch, and Christopher Clark, had after 1967 attacked the older “Consensus” view that British North America was born capitalist. But then their consensus too was proven wrong, it would seem, by such works as Winifred B. Rothenberg’s “The Market and the Massachusetts Farmer, 1750-1855″ (1981) and Mark A. Noll’s edited collection God and Mammon: Protestants, Money, and the Market, 1790-1860 (2001). [*** Here Naomi's synthesis.]
Rothenberg imagines a dialogue between a capitalist Sagredo and a Polanyist Simplicio:
How do you know [that the eighteenth-century rural mentalitÃ© in the North American English colonies was not capitalist]?
From the KIND of transaction that took place.
Those transactions . . . . all involved, didn’t they, the exchange of labor and commodities with prices? . . . .
Yes, but the money-of-account was not money [Rothenberg here cites a sentence in Merrill], and the price system was not sovereign [citing Henretta], “from which it follows [quoting from Merrill] that . . . “the products we are dealing with are not commodities at all.”
I don’t follow you. Why not?
Because the values attached to goods and services were use-values, not exchange values.
How do you know that?
Because the eighteenth-century mentalitÃ© was not capitalist.53