The Difference Between Capitalism and Industrial Capitalism
After my long “discussion” on the lack of a Biblical foundation for the notion of federally authorized and created entity or “persons” commonly called corporations, I want to be clear that I am not against people making money. I’m not against capitalism as a political / economic system, I am very much in favor of true capitalism. However, what I see changing the face of the America I grew up in, is the Industrial Capitalism planted in seed form before the war between the states. The difference is a true free market economy verses a system where every big business has such a symbiotic relationship with the government that it might as well be communism.
Just as a reminder, for those of us who are government educated, Communism, at its roots, is government control over the tools of production. It is interesting to note that Communism is a response to the dangers of Industrial Capitalism; the “bourgeois”. It did not come about until the 19th century when Industrial Capitalism was on the rise and its chief complaints are against the fruits of Industrial Capitalism (IC), not traditional Capitalism. While The Communist Manifesto correctly identifies many of the weaknesses of IC, it posits a solution that leads to less freedom and a stronger state. (Not a position that tends to advance liberty!)
So then, what is the difference between Capitalism and Industrial Capitalism? It would be trite to say that it is a sole proprietorship verse a corporation, but it is. But it is much more than that.
- It is a philosophy as well as an economic discipline
- It is a nation of families, verses a nation of individuals
- It is community, verses nationalism
- It is filling a need, verses marketing a good
- It is traditionalism, verses progressivism
- It is free market, verses government control
- It is agrarian, verses industrialism
- It is gold currency, verses paper notes
- It is small town shops, verses large scale production
It is all these things and so much more.
Robert Sobel in The Pursuit of Wealth speaks to one aspect of this. In the chapter “Emperor Wheat and King Cotton”, he states:
“One historian, Eugene Genovese, in some of his works, most notably The Political Economie of Slavery, has argued persuasively that the southern frame of mind was precapitalist. While northern businessmen were concerned about maximizing their wealth, southern cotton planters, while hoping to live graciously, were more interested in preserving their way of life.” (emphasis not in the original)
I think this quote sums it up fairly well, in that the difference between capitalism (which he calls pre-capitalism) and industrial capitalism is a different approach to life. One says, “it’s the economy stupid”, the other says some things just aren’t for sale. It’s a matter of priorities. One says that if I can just make a little more money, then I can buy the things my family “needs”. The other says, the more time I spend making money the more my family needs things that can not be bought.
This captures the heart of the difference between industrial capitalism and true capitalism. It would be a great study to compare each of these items one by one. But perhaps the more telling study will be to contrast the fruit of the industrial capitalism as a whole to the fruit of true capitalism. We’ll begin to take a look at the fruit of industrial capitalism next.