"The Wheels of Commerce" Fernand Braudel

The second volume in Braudel's classic Civilisation and Capitalism, The Wheels of Commerce, is concerned with the middle of the three levels, the market economy itself. Circulation.

The market economy is defined as the moment when subsistence existence is transformed by exchange, what Braudel calls the fateful threshold of exchange value. The first part of this volume looks at the structure of the market economy as whole, to provide a typology, a model, or perhaps a grammar. We look at the development of markets in towns, fairs, shops, peddlers; trade circuits, bills of exchange, problems of currencies and specie. Along the way we are treated to fascinating case studies: the tiny snapshots of Volume 1 are also here, but supplemented with longer steady gazes of specific historical situations: the English/Portugese trade; the way Europeans gradually disrupted and usurped the ancient and extensive trade circuits of India in the 18th Century and China in the 19th Century.

In the second part of the volume, Braudel is concerned to cast light on the classical view (put forward by Marx, Polanyi, Weber and so on) that real capitalism (an industrial mode of production) only started in the 19th century. To do this he examines the banking and finance sectors of the pre-industrial economy, and their relations with the state. He also looks in detail at three sectors of the economy often overlooked by classical Marxists where capitalism may be said to have arisen patchily: land use and ownership, industry (literally pre-industry, or artisan activity) and transport.
In terms of land use and ownership, he shows through extended case studies that what appeared to be feudal or seignorial pockets of the economy were in fact participants in a long range capitalism. For example, the second serfdom of Eastern Europe and Russia, in which during the 16th Century land owners gradually re-enserfed the free peasants living on their lands by making them give more days in the week to working on the lord’s land rather than on their own, was actually the result of trading decisions made in Amsterdam. The landowner was exporting most of the goods produced by his unpaid peasant’s labour. Braudel shows the virtue of his long distance view very clearly here: it’s only by standing back and looking at the long term, that what appears to be feudalism close up, is actually capitalism operating long distance through the circulation of trade.

In terms of industry, he examines in depth the key industries of the pre-industrial age: textiles, mining and manufactories. He shows that the putting-out system was an early form of capitalism. Mines in particular demanded huge capital investment which only merchants were willing and able to provide. In terms of transport, road and river haulage were often scenes of capitalistic activity, as was of course the practice of buying shares in ocean going ships and/or their cargoes.

What these three industries have in common is the presence of the merchant, who was always the instigator of capitalistic activity: capitalism started through the circulation of trade, not in the industrialization of production, as described by classical Marxism. The capitalism of the time was that of the urban merchants.

It is in this volume that Braudel first makes three controversial statements. The first, that history is created by the minority, not by the majority, is an assertion that flies in the face of much contemporary bottom-up historiography which de- emphasises the role played by rulers and politicians. According to Braudel, the decisions made by a handful of merchants did more to move history forward than the enormous but inert masses. There are plenty of reasons for arguing that the minority had a greater influence over the course of history than the majority. The second is the assertion that it is a structural law of societies, that power and wealth is always concentrated in a hands of a few families. This sounds like a conspiracy theory, but it is incontrovertible fact, as Braudel shows with demographic, financial and documentary evidence taken from many different cultures and periods. The third is that the market economy, the development of which Braudel has taken such pains to describe, is not to be confused with capitalism itself. Again, the example of China is useful here. China had a market economy in the pre-industrial period, but capitalism did not develop. The pre-conditions for the development of capitalism are: 1) a vigorous and expanding market economy; 2) a hierarchical society which encourages the slow accumulation of wealth, the survival of dynasties, and the ladders of social mobility; 3) the circulation of long distance trade.

Money was indeed a miraculous agent of exchange, but it was also a confidence trick serving the privileged.

Is not the present after all in large measure the prisoner of a past that obstinately survives, and the past with its rules, its differences and its similarities, the indispensable key to any serious understanding of the present?

Capitalism is a venture that goes back a very long way: by the time of the industrial revolution it already had a considerable wealth of experience behind it, and not only in the commercial sphere.