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  • Hi, I’m John Green;

  • this is Crash Course World History

  • and today were 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 youve 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 were 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 youre 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 youve 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 youre a sailor because,

  • you know,

  • you lose your life,

  • it’s really bad if youre 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,

  • youre 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 were thinking about.

  • Now admittedly

  • this is just one definition of industrial capitalism among many,

  • but it’s the definition were 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,

  • right?

  • I mean, except for the child labor.

  • 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 wordindividuals

  • did not apply to persons until the 17th century.

  • And in the 18th century,

  • a “careerstill referred only to horsesracing lives.

  • 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