Review

Branco Milanovic:

"There is nowadays a broadly shared view that the era of neoliberal globalization is at its end. It is much less clear what type of international and domestic system will succeed neoliberalism. There are many seeming candidates because, to paraphrase Yogi Berra, it is difficult to make predictions especially about the future. Economic history however can help. The new book by the French economist Arnaud Orain takes us in that direction by looking at the cyclical nature of world capitalism in the past four centuries. We are entering, according to Orain, into one of the periodic readjustments of capitalism, from free trade to the “armed trade” characteristic of mercantilism. Moreover, in Orain’s reading of capitalism, it is the epochs of mercantilism that were more common than the times of laissez-faire and free trade. He considers three such (mercantilist) periods: European conquest of the world (17th and 18th centuries), 1880-1945, and the present.

The most important features of mercantilism are that it regards trade, and perhaps the economic activity in general, as a zero-sum game, and creates the world which is neither in full peace nor in full war. The normal state of mercantilism is a constant state of conflict, whether fought by arms or by a multitude of other coercive means (piracy, ethnic cleansing, slavery etc.). Mercantilism implies (i) control of the ways by which the goods are transported which, in the past as now, means the control of the oceans, (ii) preference for vertical integration of production and trade which implies monopolies and monopsonies, and (iii) the struggle for land either as a source of raw materials and food (especially when Malthusian ideologies take over) or of land in the form of harbors and entrepots to complement naval power. The book is accordingly divided into three parts (each consisting of two chapiters) that review successively naval competition, monopolies, and the land grabs in the two previous mercantilistic eras. This is the struggle for the seas and the land; hence the title of the book Le monde confisqué.

One of the main role ideological roles is assigned to the American naval strategist, Alfred Mahon who has formulated what Orain defines as the two “laws”. The first holds that there is a natural progression of a country from being a big producer of goods, as China is now, to needing to ship these goods abroad, and thus to control naval routes. It must become a naval power or ideally a naval hegemon. It also needs to create a set of entrepôts to support its naval deployment. The second Mahan’s law is that there is no clear difference between commercial and war navies. Since trade is “armed”, the distinction between the two largely disappears, and Orain provides many historical examples where the Dutch, English, Swedish, Danish and French whether commercial or war fleets played both roles. This establishes the general atmosphere of “ni guerre, ni paix”. The wars are, one could say, “tous azimuts” but without depth.

Mercantilism is the capitalism of “finitudes”, a very nice term introduced (or perhaps coined?) by Orain which can refer to the realization that natural resources are finite or that economic activity is perceived as a zero-sum game. (I will return to this at the end of the review.) Free trade would, by implication, correspond to the eras when our view of the world is more expansive, broader and more optimistic: we tend to believe that there will be (eventually) enough for all. Mercantilism is the world such that “there would not be enough for all”—the concluding sentence of the book."

(https://branko2f7.substack.com/p/capitalism-of-finitude-pessimism)

Capitalism of Finitude

Review

Navigation menu