Reflections on the History of American Capitalism

My interviewees generally reflected a number of trends about the way that we as a country understand capitalism today. My interviewees came from a  wide range of political perspectives, and there was certainly varying viewpoints and degrees of nuance expressed in their answers to different questions. I felt the questions we came up with as a group served well to highlight the areas where people did have a stronger understanding of capitalism, and the areas where they had a less complete understanding. The overall impression I received from my interviewees was that most of them understood, on at least a basic level, what capitalism essentially is and how it functions in practice. The answers I got when asking about the origins of capitalism or how it interacted with society, however, were much less certain.


My first interviewee, a family member named Chris, has an MBA in Finance from Georgia State, so not surprisingly, his answers on questions about defining capitalism and how it actually works were fairly informed answers. When asked about the origins of capitalism though, Adam Smith was the only specific person or timeframe he could directly point to.

There’s cynical undertones to some of his answers; Chris, a former college Republican who never voted Democrat in a Presidential election until 2008, originally had libertarian or classically liberal beliefs about the free market and considered capitalism to be a entirely beneficial system. I think these are entirely typical beliefs of someone who grew up during the Cold War, when capitalism was juxtaposed against communism in what was portrayed as a grand clash of democracy and free markets against collectivism. The change in his views is an interesting one; he’s become decidedly more skeptical about the market over time, especially following the 2008 recession and his brief period of unemployment in 2011-2012. That was a personal experience for him, but I feel that it reflects something of a chink in the facade that capitalism presents; when times are good, it’s easy to portray capitalism as both an efficient and a morally good system, but when the good times end, people become more open to alternatives to capitalism. Unrestricted capitalism, when it runs wild, ultimately destroys itself, as in the Great Depression, and has to be rehabilitated. We saw in Burgin’s The Great Persuasion and the Wal-Mart reading that it took an extended period of time and a combination of intellectual and more ground-up processes for laissez-faire capitalism to again become part of mainstream American politics, and not just part, but the dominant economic ideology from the 1980s up until 2008.


My second interviewee, KH, is a fellow student here at UMW, and she’s decidedly in favor of the free market in general, not surprisingly since she is a supporter of the Republican Party. What stood out to me about her interview was the casual way she referred to capitalism as some kind of an abstract force; she described capitalism itself as being responsible for things, rather than people in a capitalist system or people who were participating in capitalism. I think this ties into the way she was taught capitalism; when I asked her how capitalism had been taught to her, she said that she thought it had been taught to her in a balanced way. But it seemed clear to me that while she was certainly willing to characterize certain famous capitalists and business practices as not being entirely good, the system of capitalism itself was never portrayed as anything but an objectively good thing during her education.

The answers she gave about the alternatives to capitalism as well revealed a harsh view of certain alternatives. She associated capitalism somewhat with mercantilism, but considered communism, socialism, and fascism to be all part of the same package in some ways, and she drew the National Socialists (Nazi) connection between fascism and socialism. This is somewhat ludicrous on the face of it; the Nazis purged any actual socialists from Germany under Hitler’s regime. But I think it’s revealing of a way that Americans often conceive any sort of state control or direction of the economy as being an action of a sort of totalitarian other, coming back again to the Cold War view of the free market and communism, and harkening back to World War II with fascism.


My third interviewee, MS, had perhaps the most balanced perspective on capitalism in that he neither discounts any alternatives or holds it up as an absolute good. He thinks capitalism is good in that when people’s merits are equal to the task, they can rise quickly, but when people become useless from an economic perspective, they’re left by the wayside. When I asked him if he thought capitalism is a meritocratic system, he answered “Not anymore,” and stated that it used to be, but today, that it mainly benefits the One Percent, the elite. When I asked him about the history and origins of capitalism, he admitted that he didn’t really feel informed on that point, and felt that capitalism had not been taught to him very well during his education. The One Percent remark, besides being a callback to the protests against Wall Street, also made me think of Karl Polyani and his theory of counter movements. The backlash against free-market capitalism as a system in the wake of 2008 has not been anything like it was after the Great Depression, but there is certainly a backlash against Wall Street or the One Percent, which could represent the modern counter-movement against unrestrained capitalism.

To round up with a few common themes, all of my interviewees had somewhat vague or no answers on the early history or origins of capitalism, which probably says something about the way capitalism was taught to them. Another answer that was common to all three interviewees was that capitalism had changed over time in ways that are not necessarily positive. The two younger interviewees both agreed capitalism was natural, at least to some extent, and all agreed that capitalism has had an impact on social issues, though only KH considered that impact to be a positive one, stating a somewhat Milton Friedman-esque view that capitalism could produce beneficial social effects as people could boycott businesses to effect change. Most people seem to have some grasp on the effects and basic function of capitalism, but are unclear on its origins and development.


“People Are Angry with Capitalism”

My final interviewee is MS, a 22-year old junior here at UMW. He comes from a white, middle-class family, and lives in Centreville, Virginia.


How would you define capitalism?

“A political and economic system based on privately owned companies, a privately managed economy. ”


What is your personal experience with capitalism?

“Economically, I’ve been pretty lucky, I was born into a middle-class family with a fair amount of wealth. So for most of my life, we’ve never wanted for money. This changed recently when my mom lost her job and went on disability. I think that’s a good example of how, in capitalism, when people become useless, they fall down the ladder and are left by the wayside. When people’s merits are equal to their work though, they rise up the ladder quickly; my mom started as a copier at this company, and became corporate manager before her disability.”


What are some alternative systems to capitalism?

“Well, there’s communism, which is ideal in theory. But people always want power, and a communist system doesn’t change that. People can’t always be treated as the same, because they don’t want to, some people want to climb to the top. People compete for their place in  society. Socialism, which is a less idealistic version of the same thing, is kind of getting a good reputation in parts of Europe now, to an extent. But I don’t think it would work in the current American society, because people here go crazy whenever anything even resembling socialism is brought up, and use socialism as an insult. There’s also mercantilism.”

Can you describe mercantilism?

“Oh, yeah. I’m not too sure of the details, but basically the country was in control of its own finances, it focused on trade, and the companies were run by the country for their own interest. It worked for big empires that traded mostly within their own territory, like Britain.”

So it was like a state version of capitalism, then?

“Yeah, pretty much.”

How has capitalism influenced America?

“It’s had an absolutely major effect. We basically ended creating a global, interconnected economic system that incorporates the finances of all countries. This kind of harkens back to the robber barons of the Gilded Age.”

So you see capitalism as something of an American creation, then?

“No, but we took it to a whole new level, the logical extreme with our corporations, which have become super-conglomerates with global influence and interests. But no, we weren’t the first to practice capitalism.”

What do you think are capitalism’s origins, either globally or in the United States?

“I think people wanted to escape from a feudal sort of system, where they did not control their own financial destinies. I think it particularly arises after the Enlightenment period, and starts as a working philosophy after that.”

So in reference to the feudalism, do you think there’s a move towards capitalism beginning after the Middle Ages?

“Yeah, it takes a long time to get to what we today recognize as capitalism, but I think that’s sort of where it begins.”

When is capitalism first articulated as any kind of coherent system or ideology?

“I have to say that I don’t know here.”

How do you think social issues have been affected by capitalism?

“I think they’re totally entwined.  Like, today, social agendas are pushed by private companies, and large corporations use their money and influence to push their agendas in the government. People don’t really like corporations, and they also don’t like it when colleges act like businesses and it costs loads of money to go to college, we’re the only country that does it like that.  Today, people are angry with capitalism, and they’re sort of held down by a glass ceiling between them and the tiny super-elite class. Capitalism was good for society a couple of hundred years ago probably, but today, society is controlled by a small elite via capitalism. I’d prefer a meritocracy”

You’re talking about the One Percent, basically?


Do you think capitalism is not meritocratic?

“Not anymore. Now it’s mostly a small elite who pass on their wealth to their children, and you get to the top through influence and connections instead of, well, merit. Instead of leaving your fortune to your children, I think a more productive way of thinking is what you leave behind to humanity.”

Has capitalism changed over time?

“It has definitely changed over time. It started as a hopeful sort of ideology, with people controlling their own financial destinies. Now, people are constrained by and have to worry about things like fluctuating job markets, deciding early on in life what career field to specialize in, and those sort of concerns drive their lives. Capitalism in its modern form has created a society that’s perpetually in debt, with the capitalization of education. Eventually, this sort of thing will lead to the glass ceiling between people and the upper class breaking.”

Do you see that as a bad thing?

“No, but it would disrupt the social order.”

Do you think capitalism is a natural fit for human nature?

“Yeah, I think it does pretty much fit with a sort of free will ideology, which is something that even people like religions and secularists usually agree on. But it’s flawed in that it leads to the accumulation of wealth by the most successful, and wealth grants power, and too much power subverts free will. Capitalism is flawe, but it does fit certain aspects of human nature. So do other systems though, so capitalism doesn’t necessarily fit more than those.”

How has capitalism been taught to you during your education?

“I did not receive enough education about capitalism, frankly. People in general aren’t educated enough about capitalism as a system, which is kind of why I was drawing blanks on a couple of your questions. Capitalism as a system or philosophy is sort of hyper-specialized into the business field and classes, I think people in general need a more well-rounded, Renaissance sort of education that includes capitalism.”







“It was Natural for America to become Capitalist”

My second interviewee is KH, a twenty-year old white female college student here at UMW. She is a history major, and lives in Virginia Beach. She is a Republican, and so is rather more conservative than  my last interviewee.


How would you define capitalism?

“An economic system where private enterprise is separate from the government.”

What do you mean by separate?

“Free from any direct government control or interference.”

What is your relationship with capitalism?

“I am personally favorable towards capitalism. I think it is responsible for many technological advances throughout history, and I think it has had major societal and historical  positive impacts in some instances.”

What instances?

“One would be the IT boom through the 80s and 90s. The privatization of the telephone industry in the 80s played a major role in it. The tech boom in recent times in general comes from capitalism.”

What are some alternative systems to capitalism?

“Communism, socialism, fascism, and mercantilism.”

What do you think of them?

“I’m not a fan of any. Mercantilism is technically capitalist, sort of, but it’s not really private enterprise. I guess it’s kind of nationalist, state capitalism almost. Communism, well, people say it works on paper, but in my opinion it doesn’t even make sense in theory. I have not studied Marxism in depth, but that’s sort of what I get from my impression of it. Socialism just seems like a slower means to communism, it’s a step towards that path. Fascism is sort of like another version of socialism. National Socialism after all. But its mainly about nationalist fervor I guess. It’s all about the state.”

Can you elaborate on the similarities/differences between socialists and fascists? Are they after the same things?

“Not entirely I think, but both tend to support the state and they use similar methods towards their goals.”

How has capitalism influenced America?

“I think capitalism has been tied together with America from the start. Capitalism is totally linked with the American Revolution I’d say. The Revolution even really begins the same year that Adam Smith publishes Wealth of Nations. Capitalism is inherent in the structure of the American government as set up by the Founding Fathers. It was natural for America to become capitalist, from that point.”

What do you mean by inherent? Do you think capitalism as a system was sort of intended to become what it did in America?

“I don’t know about intended, but I definitely think capitalism was enabled by the way that our society was set up and began to evolve around this time.”

Where/when do you think capitalism comes from?

“I’m not sure I can describe the exact origins of capitalism. Adam Smith is certainly held up as the founder of capitalist thought, but  I think capitalism probably had smaller origins; people were already practicing capitalism when Smith wrote, they just didn’t call it that yet.”

How do you think social issues are affected by capitalism?

“I think capitalism tends to blanket certain social issues. Pure capitalist theory is liberating in that it is meant to empower the individual. Like Ayn Rand said, the individual is the smallest minority. But pure theory doesn’t work in practice. Capitalism, the free market often overlooks or is blind to certain social issues I think. But the free market can be used for good as well. You can boycott an enterprise that has policies you disagree with.”

So, you think the free market can be used to address social ills?

“Yes, I think so. The free market can bring social problems to light, and a person can use their economic power to effect that issue. It all depends on the individual or enterprise I suppose.”

Do you think capitalism has changed over time? What are some examples?

“I think capitalism in Adam Smith’s time looks different than capitalism in Karl Marx’s. Historically I think we see capitalism through Marxist lens rather than Smith’s. Over time, capitalism has become kind of a synonym for corporatism. So I guess maybe it’s our view of capitalism that has changed.

By Marxist, do you mean a kind of Marxist, class-based historical approach, or are you talking more about Marx himself?

“The Marxist historians I think.”

Do you think capitalism is a good fit for human nature?

“I think so, personally. Basic survival instinct makes us basically selfish, and capitalism actually uses that for good. It’s about what you do with that selfish instinct. Capitalism is not perfect, but it’s helped more than it has hurt. Because people are selfish, capitalism can cater to each of us in a sense.

How has capitalism been taught to you, during your education? Good, bad, neither?

“My education about capitalism has been quite neutral I think. I have not been taught pure capitalist theory really, but I’ve learned about capitalism as a system. In AP US History, a lot of issues with capitalism became more obvious to me. Not all major industrialists like during the Gilded Age were good people, certainly. But they mostly did good things for the country with their wealth, I think. I feel that capitalism does improve the standard of living for everyone. So I would say I’ve had pretty balanced teaching of capitalism.”


A major takeaway from this interview, for me anyway, was the way KH repeatedly refers to capitalism almost as a sort of mystic, abstract force that does things of its own volition. And while she thinks it does have flaws, it seems apparent that she’s pretty much in approval of capitalism on a basic level and thinks it makes sense.




“Just An Economic Theory”

My first interviewee is a family member named Chris, a forty-seven year old IT salesman who works in Arlington. His father was in the Air Force during the Vietnam War and throughout much of the Cold War, so he grew up mostly on various military posts, particularly Kwajalein, where he attended high school during the Reagan years. In college, he was a member of College Republicans, though his politics have since shifted. He received an MBA in Finance from Georgia State, and currently works selling software.

How would you define capitalism?

“An economic system in which allegedly free markets are used to allocate capital and resources in the most efficient manner.”

Can you expand on that “allegedly”?

“In theory, free markets work as advertised. But in practice, for it to work, all parties have to be on equal ground. In reality, people game the system and some parties have access to better information or resources than others.”

What is your personal experience with capitalism?

“I have lived in a capitalist system my entire life, much of it during the Cold War between capitalism and communism. I also have an MBA in Finance, so aside from living under capitalism, I’ve studied how a capitalist society works in some depth.”

What are alternative systems to capitalism, and do you think any of them are workable systems?

“Communism and socialism are the two other main systems that come to mind. Other than that, maybe earlier barter-based systems. The experience of many countries in Europe, such the Scandinavian countries that practice social democracy, suggests that socialism to an extent can work. I think a free-market approach works better in some sectors of the economy, and in others, more socialistic practices are better.”

How does capitalism influence America?

“Capitalism is just an economic system meant to efficiently distribute capital, but for Americans it’s a political and moral issue. Actually, even an article of faith almost. Capitalism arises from a sort of Puritan ethic of hard work and raising yourself up, when in reality usually government or other people were involved. ”

Do you think the Cold War sort of amplifies capitalism as an American ideology?

“Sort of. I think politicians and business interests used the Cold War to advance their agendas, which leads to the Cold War view of capitalism.”

How do you think social issues have been affected by capitalism?

“I think the hyper-capitalistic attitude in the United States has led us to try and use market-based solutions for social issues, though the Democrat Party has generally resisted these sorts of ideas.”

Can you give some examples?

“Faith-based charity initiatives, which are usually encouraged by the government. Most churches function as businesses and do these initiatives in order to continue being considered charities. Obamacare is an attempt at providing market incentives to fix the problems of healthcare, though with socialist underpinnings in the government’s role. ”

What are capitalism’s origins, either for America or globally?

“I think the American state’s version of capitalism originally comes from the writings of Adam Smith and the New England, Puritan work ethic.”

Do you think capitalism has changed over time?

“There used to be restraints on capitalism, which is just intended to efficiently manage capital. Government used to prevent capitalism from overly benefiting the wealthy few. In recent times the restraints have been loosened, hence current wealth gap in this country. ”

Do you think capitalism as a system is more natural for humans than other systems?

“No. Humans are naturally tribal, and maybe even sort of socialistic. Capitalism is not natural and only appears relatively recently in human history.”

Do you think there’s a reason capitalism has sort of stuck as the primary economic system?

“I think it’s the success of particularly the US as a capitalist country that makes people think capitalism is better. It’s an example of correlation and causation though because the US rises economically after WWII when the competition has been invaded and bombed. Like, I was watching a Ken Burns series a while back,  and it was talking about how the image of Americans moving to the west in a sort of entrepreneurial way was actually backed by the government with the homestead grants in the 1800s. Capitalism isn’t really actually better; again, I think a combination of  systems is probably best.”

How has capitalism been taught to you during your education?

“Largely as a positive, not surprising since the Cold War was going on. I had one undergrad course taught by an actual self-proclaimed communist professor, but overall, especially in grad school, capitalism was taught as a net positive.”

One of the things I take away from this interview is that not everyone who grew up in the Reagan era and embraced the conservative, pro-market political spirit of the time has necessarily maintained that view in light of events in the 21st century. Chris has a relatively critical view of capitalism for someone who came of age during America’s much-vaunted triumph in the Cold War and was a card-carrying member of the Republican Party. Perceptions of capitalism can shift for individuals and perhaps on a wider scale as well.


Breck O’Donnell