Capitalism and Socialism: Crash Course World History #33

Hi, I’m John Green;

this is Crash Course World History

and today we’re going to talk about

capitalism.
[off we go then!]

Yeah, Mr. Green,

capitalism just turns men into wolves.

Your purportedly free markets
only make slaves of us all.

Oh, God, Stan,

it’s Me from College.

Me from the Past

has become Me from College.

This is a disaster.

The reason he’s so unbearable,

Stan,

is that he refuses to
recognize the legitimacy

of other people’s narratives

and that means that he will

never, ever

be able to have a productive conversation
with another human in his entire life.

[harsh much, Mr. Green?]

So, listen, Me from the Past,

I’m going to disappoint you
by being too capitalist.

And I’m going to disappoint
a lot of other people

by not being capitalist enough.
[100% guaranteed]

And,

I’m going to disappoint the historians

by not using enough jargon.
[and Stan. Stan loves jargon]

But, what can I do?

We only have 12 minutes. [ish]

Fortunately

capitalism is all about efficiency
so let’s do this,

Me from College.

Randy Riggs becomes a bestselling author;
[I love pictures & the word peculiar]

Josh Radnor stars in a great sitcom;
[Ted Mosby is super Rad(nor), Josh]

it is NOT GOING TO WORK OUT with Emily,

and DO NOT go to Alaska with
a girl you’ve known for 10 days.

[Shenanigans?]

OKAY, LET’S TALK CAPITALISM.

[Intro music]

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So, capitalism is an economic system,

but it’s also a cultural system.

It’s characterized by innovation
and investment to increase wealth.

But today we’re going
to focus on production and

how industrial capitalism changed it.

Stan,

I can’t wear these emblems
of the bourgeoisie

while Karl Marx himself is looking at me.

It’s ridiculous.

I’m changing.

Very hard to take off a shirt dramatically.

[or unsuggestively]

So let’s say it’s 1,200 CE
and you’re a rug merchant.

Just like merchants today,

you sometimes need to borrow money
in order to buy the rugs

you want to resell at a profit,

and then you pay that money back,

often with interest,

once you’ve resold the rugs.

This is called mercantile capitalism,

and it was a global phenomenon,

from the Chinese to

the Indian Ocean trade network

to Muslim merchants who would sponsor trade
caravans across the Sahara.

But by the 17th century,

merchants in the Netherlands
and in Britain

had expanded upon this idea
to create joint stock companies.

Those companies could finance
bigger trade missions and

also spread the risk of
international trade.

But the thing about international trade

is sometimes boats sink

or they get taken by pirates,
[Aaarrr!]

and while that’s bad
if you’re a sailor because,

you know,

you lose your life,

it’s really bad if you’re a
mercantile capitalist

because you lost all your money.

But if you own one tenth of ten boats,
your risk is much better managed.

[but is mischief managed?]

That kind of investment
definitely increased wealth,

but it only affected
a sliver of the population,

and it didn’t create
a culture of capitalism.

Industrial Capitalism was
something altogether different,

both in scale and in practice.

Let’s use Joyce Appleby’s
definition of industrial capitalism:

"An economic system that relies on
investment of capital in machines and

technology that are used to increase
production of marketable goods.”

So,

imagine that someone made a Stan Machine.
[lots of Stantastic possibilities there]

By the way, Stan,

this is a remarkable likeness.

And that Stan Machine could produce
and direct ten times more episodes

of Crash Course than a human Stan.
[not super sure Stan's not a robot, btw]

Well, of course,

even if there are
significant upfront costs,

I’m going to invest in a Stan Machine,

so I can start cranking out
ten times the knowledge.

Stan,

are you focusing on the robot
instead of me?

I am the star of the show!
[sounds like unemployment, Stanimal]

Stan Bot,

you’re going behind the globe.

So,

when most of us think of capitalism,

especially when we think
about its downsides

(long hours, low wages,
miserable working conditions,

child labor, unemployed Stans)
[doing yo-yo tricks on the Indy streets]

that’s what we’re thinking about.

Now admittedly

this is just one definition of
industrial capitalism among many,

but it’s the definition we’re going with.

Alright,

let’s go to the Thought Bubble.

Industrial capitalism developed first
in Britain in the 19th century.

Britain had a bunch of advantages:

It was the dominant power on the seas

and it was making good money off of
trade with its colonies,

including the slave trade.

Also,

the growth of capitalism was helped
by the half-century of

civil unrest that resulted from the
17th century English Civil War.

Now,

I’m not advocating for civil wars or
anything, but in this particular case

it was useful,

because before the war

the British crown had put a lot
of regulations on the economy—

complicated licenses,
royal monopolies, etc.

—but during the turmoil,
it couldn’t enforce them,

which made for freer markets.

Another factor was a remarkable increase
in agricultural productivity

in the 16th century.

As food prices started to rise,

it became profitable for farmers,

both large and small,

to invest in agricultural technologies
that would improve crop yields.

Those higher prices for grain probably
resulted from population growth,

which in turn was encouraged by
increased production of food crops.

A number of these agricultural
improvements came from the Dutch,

who had chronic problems feeding
themselves and discovered

that planting different kinds of crops,

like clover that added nitrogen
to the soil and could be used

to feed livestock at the same time,

meant that more fields could
be used at once.

This increased productivity
eventually brought down prices,

and this encouraged further innovation

in order to increase yield to
make up for the drop in prices.

Lower food prices had an added benefit –

since food cost less and
wages in England remained high,

workers would have more
disposable income,

which meant that if there
were consumer goods available,

they would be consumed,

which incentivized people to make
consumer goods more efficiently,

and therefore more cheaply.

You can see how

this positive feedback loop
leads to more food and more stuff,

culminating in a world where people
have so much stuff

that we must rent space to store it,

and so much food

that obesity has become a bigger
killer than starvation.

Thanks, Thought Bubble.

So this increased productivity also meant
that fewer people needed to

work in agriculture in order
to feed the population.

To put this in perspective,

in 1520, 80% of the English
population worked the land.

By 1800, only 36% of adult male
laborers were working in agriculture,

and by 1850,
that percentage had dropped to 25.

This meant that when
the factories started humming,

there were plenty of workers
to hum along with them.

[humming < obnoxious than whistling]

Especially child laborers.

So far all this sounds pretty good,

I mean, except for the child labor.

right?

Who wouldn’t want more, cheaper food?

Yeah, well, not so fast.

One of the ways the British achieved
all this agricultural productivity

was through the process of enclosure.

Whereby landlords would re-claim
and privatize fields

that for centuries had been held
in common by multiple tenants.

[they busted up hippie communes?]

This increased agricultural productivity,

but it also impoverished
many tenant farmers,

many of whom lost their livelihoods.

Okay, for our purposes,

capitalism is also a cultural system,

rooted in the need of
private investors to turn a profit.

So the real change needed here
was a change of mind.

People had to develop
the capitalist values of

taking risks and appreciating innovation.

And they had to come to believe that
making an upfront investment in something

like a Stan Machine
[silent mode not optional]

could pay for itself and then some.

One of the reasons that these
values developed in Britain was

that the people who initially held them
were really good at publicizing them.

Writers like Thomas Mun,

who worked for the
English East India Company,

exposed people to the idea that the
economy was controlled by markets.

And,

other writers popularized the idea
that it was human nature

for individuals to participate
in markets as rational actors.

Even our language changed:

the word “individuals”

did not apply to persons until
the 17th century.

a “career” still referred only
to horses’ racing lives.

And in the 18th century,

Perhaps the most important idea
that was popularized in England

[other than safety pin accessories later)

was that men and women were consumers
as well as producers

and that this was actually a good thing

because the desire to
consume manufactured goods

could spur economic growth.

“The main spur to trade,
or rather to industry and ingenuity,

is the exorbitant appetite of men,
which they will take pain to gratify,”

So wrote John Cary,

one of capitalism’s cheerleaders,
in 1695.

And in talking about our appetite,

he wasn’t just talking about food.

That doesn’t seem radical now,
but it sure did back then.

So here in the 21st century,

it’s clear that industrial capitalism—

at least for now—

has won.

Sorry, buddy.

But, you know, you gave it a good run.

You didn’t know about Stalin.
[or the bright future of manscaping]

But capitalism isn’t
without its problems,

or its critics,
["haters" in the parlance of our times]

and there were certainly
lots of shortcomings to

industrial capitalism
in the 19th century.

Working conditions were awful.

Days were long, arduous, and monotonous.

Workers lived in conditions
that people living

in the developed world today
would associate with abject poverty.

One way that workers responded
to these conditions

was by organizing into labor unions.

Another response was in many cases
purely theoretical:

socialism,
[gasp, clutch the pearls]

most famously Marxian socialism.

I should probably point out here

that socialism is an
imperfect opposite to capitalism,

even though the two are often juxtaposed.
[consider that before commenting maybe?]

Capitalism’s defenders like to
point out that it’s “natural,”

meaning that if left to our own devices,

humans would construct economic
relationships that resemble capitalism.

Socialism,
at least in its modern incarnations,

makes fewer pretenses towards being
an expression of human nature;

it’s the result of human choice
and human planning.

So, socialism,
as an intellectual construct,

began in France.
[he spins the whole world in his hand]

How’d I do, Stan?

Mm, in the border between

Egypt and Libya.

There were two branches
of socialism in France,

utopian and revolutionary.

Utopian socialism is often associated

with Comte de Saint Simon
and Charles Fourier,

both of whom rejected
revolutionary action

after having seen the disaster
of the French Revolution.

Both were critical of capitalism

and while Fourier is usually a
punchline in history classes

because he believed that,
in his ideal socialist world,

the seas would turn to lemonade,
[wut]

he was right that
human beings have desires

that go beyond basic self interest,

and that we aren’t always
economically rational actors.

[truth]

The other French socialists
were the revolutionaries,

and they saw the French Revolution,
even its violence,

in a much more positive light.
[Vive Goddard!]

The most important of these revolutionaries
was Auguste Blanqui,

and we associate a lot of his ideas with
communism, which is a term that he used.

Like the utopians,
he criticized capitalism,

but he believed that
it could only be overthrown

through violent revolution
by the working classes.

However,

while Blanqui thought that the workers
would come to dominate a communist world,

he was an elitist.
[by which you mean an arugula eater?]

And he believed that workers on their own
could never, on their own,

overcome their superstitions and
their prejudices in order to

throw off bourgeois oppression.
[interesting]

And that brings us to Karl Marx,

whose ideas and beard cast a shadow
over most of the 20th century.

Oh, it’s time for the Open Letter?

[roll all you want, i'm not looking]

[aloha miss hand]
An Open Letter to Karl Marx’s Beard.

But, first,

let’s see what’s in
the secret compartment today.

Oh, robots.

Stan Bots!

Two Stan Bots,

one of them female!
[a featured female, on Crash Course? ha]

now I own all the means of production.
[no evil laugh and/or mustache twisting?]

You’re officially useless to me, Stan.

Now, turn the camera off.

Turn the ca--

I’m going to have to get up
and turn the camera off?

Stan Bot,

go turn the camera off.

Hey there, Karl Marx’s beard.

Wow, you are intense.
[and probably pretty grody]

Karl Marx,

these days there are a lot of young men

who think beards are cool.

Beard lovers, if you will.
[beardos]

those are glorified milk mustaches.

Those aren’t beards,

I mean,

I haven’t shaved for a couple weeks,
Karl Marx,

but I’m not claiming a beard.
[nothing a solid scrubbing couldn't fix?]

You don’t get a beard by being lazy,

you get a beard
by being a committed revolutionary.

That’s why hardcore Marxists are literally
known as

“Bearded Marxists.” [not to be confused
w/ "Mulleted Marxists" from the 80's]

These days, that’s an insult.

But you know what, Karl Marx,

when I look back at history,
I prefer the bearded communists.

Let’s talk about some communists
who didn’t have beards:

Mao Zedong,

Pol Pot,

Kim Jong-il,

Joseph freakin’ Stalin
with his face caterpillar.

So, yeah, Karl Marx’s beard,

it’s my great regret to inform you

that there are some paltry beards trying
to take up the class struggle these days.

Best Wishes,
John Green

Although he’s often considered
the father of communism,

because he co-wrote
The Communist Manifesto,

Marx was above all a philosopher
and a historian.

It’s just that,
unlike many philosophers and historians,

he advocated for revolution.

His greatest work, Das Kapital,

sets out to explain the world
of the 19th century

in historical and philosophical terms.

Marx’s thinking is deep and dense

and we’re low on time,
but I want to introduce one of his ideas,

that of class struggle.

[yeah buddy, here we go]

So, for Marx,

the focus isn’t on the class,
it’s on the struggle.

Basically Marx believed that classes
don’t only struggle to make history,

but that the struggle is what
makes classes into themselves.

The idea is that through conflict,
classes develop a sense of themselves,

and without conflict,

there is no such thing
as class consciousness.

So,

Marx was writing in 19th century England
and there were two classes that mattered:

the workers and the capitalists.

The capitalists owned most
of the factors of production

(in this case, land and
the capital to invest in factories).

The workers just had their labor.

So, the class struggle here
is between capitalists,

who want labor at
the lowest possible price,

and the workers who want to be paid
as much as possible for their work.

There are two key ideas that underlie
this theory of class struggle.

First,

Marx believed that “production,” or work,

was the thing that gave
life material meaning.

Second,

is that we are by nature
social [St]animals.

We work together, we collaborate,

we are more efficient when
we share resources.

Marx’s criticism of capitalism is

that capitalism replaces this
egalitarian collaboration with conflict.

And that means that it isn’t
a natural system after all.

And by arguing that capitalism actually
isn’t consistent with human nature,

Marx sought to empower the workers.

That’s a lot more attractive
than Blanqui’s elitist socialism,

and while purportedly Marxist states

like the USSR

usually abandon worker empowerment
pretty quickly,

the idea of protecting our
collective interest remains powerful.

That’s where we’ll have to
leave it for now,

lest I start reading from
The Communist Manifesto.

[noooooo!]

But, ultimately socialism has not
succeeded in supplanting capitalism,

as its proponents had hoped.

In the United States, at least,

“socialism” has become something
of a dirty word.

So,

industrial capitalism certainly
seems to have won out,

and in terms of material well being

and access to goods and services for
people around the world,

that’s probably a good thing.

Ugh,

you keep falling over.

You’re a great bit,

but a very flimsy one.

Actually, come to think of it,

you’re more of an 8-bit.
[haha… um, crickets]

But how and to what extent

we use socialist principles to regulate
free markets remains an open question,

and one that is answered
very differently in, say,

Sweden than in the United States.
[lingonberries & Skarsgards pwn]

And this, I would argue,

is where Marx still matters.

Is capitalist competition
natural and good,

or should there be systems in place

to check it for the sake of
our collective well-being?

Should we band together to
provide health care for the sick,

[and that's Jenga]

or pensions for the old?

Should government run businesses,

and if so, which ones?

The mail delivery business?
[stamps are awesome.<3 you USPS]

The airport security business?

The education business?

Those are the places where

industrial capitalism and socialism
are still competing.

And in that sense, at least,
the struggle continues.

Thanks for watching,

I’ll see you next week.

Crash Course is

produced and directed by
Stan Muller.

Our script supervisor is
Danica Johnson.

The show is written by
my high school history teacher,

Raoul Meyer and myself.

We’re ably interned by
Meredith Danko.

And our graphics team is
Thought Bubble.

Last week’s phrase of the week was

“the TARDIS,”

so you can stop suggesting that now!

If you want to suggest
future phrases of the week

or guess at this week’s,

you can do so in comments,

where you can also ask questions
about today’s video

that will be answered by
our team of historians.

Thanks for watching Crash Course,

and as we say in my hometown,

don’t forget You are my density.

Alright, Stan,

bring the movie magic...

Yes!

[outro]

[outro]