Author Talks: How capitalism became a worldwide revolution

In this edition of Author Talks, McKinsey Global Publishing’s Eric Quiñones chats with Sven Beckert, the Laird Bell Professor of History and cochair of the Program on the Study of Capitalism at Harvard University, about Capitalism: A Global History (Penguin Press/Penguin Random House, November 2025). Beckert reveals that the roots of capitalism can be traced long before the Industrial Revolution and in many different parts of the world. He describes how it has evolved over hundreds of years from a system used by far-flung groups of merchants to one that pervades all aspects of modern life. An edited version of the conversation follows.

Why did you write this book?

I’ve been thinking about the history of capitalism since the beginnings of my academic career. I have written about the merchants, bankers, and industrialists of New York City for my dissertation. I’ve written a book on the global history of cotton. All of that prepared me to think more broadly about the history of capitalism.

Why is it so important? For one, I’m ready to defend that the emergence and the spread of capitalism is the most important process that has unfolded on planet Earth in the past 500 years. We cannot understand anything about the history of people in the past 500 years without also thinking about capitalism. And I think we need to give capitalism a pretty central role in our thinking about the making of the modern world.

The second reason is that I think people have misunderstood capitalism for a whole range of reasons. Today, we live in a world where we are surrounded by capitalism. We live in capitalism like fish live in water. It’s everywhere. It determines how we work. It determines how our cities are being built. It has an impact on the international relations between states. It also affects the most intimate aspects of our lives. It’s so overwhelmingly present that it’s hard to see that this is a revolutionary departure from prior human history. I wanted to make readers understand that it’s not just the natural state of the world—rather, it’s very particular to the moment in which we live today and that has unfolded over the past 500 years.

I also think capitalism has been misunderstood for another reason. For so many years, we have told the history of capitalism from a profoundly Eurocentric perspective. Most people who think about the history of capitalism think about it as something that began in the cities of Florence, Genoa, and Venice and then moved on to Amsterdam, London, and New York City. They think the rest of the world does not play any role in the history of capitalism. Clearly, this is not an accurate description of the world in which we live today. Looking at the world today raises all kinds of questions about capitalism’s history and suggests that we need to understand it from a more global perspective.

Finally, I think what sometimes goes missing is how significantly and how radically capitalism has changed over time. I wanted to allow people to see that capitalism, unlike many other forms of organizing economic activities, is fundamentally undogmatic. One of the arguments of the book is that the very undogmatic nature of capitalism explains much of its staying power and much of its tremendous dynamic.

You note in the book that there are many definitions of capitalism. What is yours?

First, it’s kind of a negative definition: namely, the existence of markets does not define capitalism, because markets have existed in all of human society. But what has not existed forever—and this is my definition of “capitalism”—is the productive investment of privately owned capital for the purpose of the further accumulation of this capital.

Rich people have existed throughout human history. Wealth as such is not peculiar to capitalism. But there’s a very big difference in how wealth is used under capitalism and how it’s used under other forms of economic organization. This rests on private property. It rests on the inputs for production or the inputs for trade being available. It rests on markets to be commodified, where you are able to purchase the things that you need to produce things or to trade.

The outputs of these processes need to be commodified as well—they need to be sold on markets and not just given away or distributed. One of the important things that needs to be commodified under capitalism is labor power. That has been commodified in a huge variety of ways—now mostly in the form of wage labor, but in the past, also in the form of slavery. So if we can identify the existence of all these conditions, then we can see a particular moment in a particular place as being part of the history of capitalism.

Was there anything that surprised you in the research and writing of this book?

I was surprised how global the history of capitalism truly is. For example, this book is a people-centric history, and some of the most important actors I see in the very early history of capitalism are the merchants. They were wealthy but in a totally different way from feudal landlords. They employed capitalist logic in organizing their economic activities.

We all know about the Medici and the merchants of Venice. But when I started looking into merchant communities around the world in the first half of the second millennium—between 1000 and 1500—I found merchant communities that operated along a very similar line of capitalist logic in many different parts of the world. They were in West Africa, East Africa, India, China, even in the Americas before the arrival of the Europeans, and of course, on the European continent as well.

My book starts out in the port of Aden in modern-day Yemen, with a group of merchants in 1150 who traded with East Africa, the Arabian Peninsula, and India. What is striking about reading their documents is how modern their worldview and the activities really were. It was almost 900 years ago but, when we read what they did, we can immediately understand the logic behind it. What we can also see is that this logic is completely marginal to economic life on Earth. Now they seem modern, and we can relate to them. But when they were alive, they were totally outside of how most people on planet Earth organized their economic lives.

I was also struck by how slowly capitalist logic spreads in society and how much resistance it encounters. We often think of it as a natural process, but it takes centuries to become more important. The real turning point here was around the year 1500. Then in the wake of the Industrial Revolution in the 18th and 19th centuries, this process accelerated tremendously. But even then, it still encountered significant resistance. What surprised me was how difficult a project the capitalist revolution really was.

Moreover, when most of us think about capitalism, we think about industry, and we almost always think about cities: Pittsburgh, Detroit, Wall Street. But what really surprised me was how much of the history of capitalism happened in agriculture and in the countryside. Most humans lived in the countryside and engaged in agriculture for almost all of history, so it makes sense that so much of the history of capitalism unfolded in the countryside.

What was your process for tracing the history of capitalism?

I conducted significant research in archives on all continents: in India, Australia, Senegal, Brazil, the United States, and many different parts of Europe.

For example, I wanted to write about the Fordist revolution—that is, the emergence of mass production and mass consumption in the 20th century. That is a very important moment in the history of modern capitalism. Usually most historians write about Henry Ford and about Highland Park and Detroit, which is a perfectly reasonable choice. But I went to the city of Torino in Italy, to the Fiat archives. I spent my days looking at sometimes very obscure records about how they reconsidered the possibility of organizing auto production.

I went to the archives in Dakar in Senegal because I was interested in the transformation of the countryside and colonialism. I found amazing records about the 1820s and how the French tried to increase production of agricultural commodities for world markets in the Senegal River Valley. And this was a record of failure: You could see how local peasants and local rulers resisted that transformation of the countryside in Dakar.

I spent time in Brazil because I was interested in the emergence of 19th century bourgeois culture—the grand theaters, the opera, the clubs. I wanted to tell that story through the history of Rio de Janeiro. I found terrific evidence of these efforts in the archives. Then I would step out of the doors of the archives right into the middle of Rio de Janeiro as it was constructed in the 19th century.

This kind of archival research was very important to the book. Even though this is a global history, I tell it from very local perspectives.

What was the ‘big bang’ of capitalism?

Capitalist logic existed in the world before 1500, most significantly located in the world of long-distance trade and embodied by merchants. But this was far from anything resembling modern capitalism. Indeed, I argue it was not yet capitalism.

This began to change in the 15th century and then at accelerated speed roughly between the years 1450 and 1650. That’s when a new alliance emerged on the European continent. It was between the merchants who had existed for a very long time—located especially in the cities of Genoa, Venice, and Florence—and the strengthening rulers in some parts of Europe, first in Spain and Portugal, but later also in the Dutch Republic and England.

For a whole variety of reasons, they moved together closely. The states became dependent on merchant capital, principally because they needed that capital to fund their ever more expensive military adventures. And the merchants moved closer to the states because they faced powerful Muslim merchants to the east. They knew that the most important trading routes in the world went into China and India, and they sought ways to somehow get around these Muslim merchants.

At this point, these states and merchants had a joint set of interests, and they did something novel: Namely, they pushed their capital and power to far-flung places. The European merchants built new islands of capital—first off the coast of Africa—especially the Genoese. Then a Genoese merchant and sailor by the name of Christopher Columbus, with the help of the Spanish crown, had the idea to go west and find a way to trade directly with South Asian merchants. Obviously they didn’t find the route to India that way, so by 1498, they had found a route to India by traveling around the continent of Africa.

What they did next was build new islands of capital: in the Cape Verdean islands, the Canaries, the Caribbean islands, Brazil, Central America, and so on. What happened on these islands was radically new. They infused their capital not just into long-distance trade but into the organization of production in the countryside. They created, for the first time, societies that were completely structured along capitalist lines. I tell that story through the history of the island of Barbados, where by 1670, you found a place that was almost unique on planet Earth. It was completely dedicated to the production of commodities for world markets, namely sugar. All inputs that came into the production of sugar were acquired on markets themselves. Labor was brought in from Africa and acquired on markets—namely, enslaved workers. The capital came from Dutch, and later English, merchants.

So we had a total recasting of the logic of economic life on the island of Barbados. This happened also in Potosí in Bolivia, in Santo Domingo in the Dominican Republic, in Jamaica, and, eventually, in what becomes the United States. I think this was the moment when resistances that had always existed to capitalist logic were slowly broken down—not just in the Americas but also on the European continent. This was the beginning of the big breakthrough of capitalism.

But even at this point, it took centuries to spread. What many of us think of when we think about capitalism—the moment after the Industrial Revolution—was still 350 years in the future. It was unimaginable in 1450 to think that the world would be moving to that kind of state.

What forces drove the global expansion of capitalism?

The Industrial Revolution is not the beginning of capitalism, but it’s the most significant offspring of the capitalist revolution. It’s the moment in which capitalist organization of economic life spreads beyond the countryside, beyond agriculture, into manufacturing, and is centrally characterized by ongoing productivity gains. This is certainly related to technical innovation. However, there are further innovations that might seem at first to be somewhat removed from the standard stories we tell about the Industrial Revolution but are just as crucial.

For example, there’s institutional innovation. People had worked for wages throughout human history, but the mobilization of massive numbers of workers by paying them wages was totally new. The Industrial Revolution encouraged the spread of wage labor but also, in some ways, invented it. It created the institutional framework in which wage labor could spread and expand—so much so that most people on planet Earth now work for wages. But this was, historically, a total novelty.

There’s also the emergence of the liberal state in the second half of the 19th century that became quite important to the further development of capitalism.

The best example for this story is the core industry of the first Industrial Revolution: cotton textiles. That’s where technical innovations began and wage labor spread to a tremendous degree. That’s where newfangled cities emerged, such as Manchester or lower London. But all this rested on a continued transformation of the countryside because the cotton that came into these factories was produced largely in the southern parts of the United States, and until 1865, it was produced almost exclusively by enslaved workers.

How has capitalism evolved in more recent generations?

One of the core arguments of the book is that capitalism is fundamentally undogmatic and that the capitalism of the Port of Aden in Yemen in 1150 looked fundamentally different from Manchester during the Industrial Revolution, from Torino in 1920, and from the world we live in today. This shape shifting is a kind of constant in the history of capitalism. There are moments of rapid change, and then there are moments in which things stay not exactly the same but more stable. There are certain kinds of economic orders within capitalism.

If we think about recent history—the last 70 years, for example—we can see two different orders, maybe even three. We see that in the wake of the New Deal of the 1930s, in the wake of the defeat of fascism, in the wake of World War II, a new form of capitalism emerged that was dominated by the United States. It was a form of capitalism that saw great productivity advances distributed among large segments of society. Manufacturers certainly made a lot of money, but this was also a moment in which, for example, automobile workers in the United States had rapidly increasing incomes and improving benefits. There was a sharing of the productivity gains that came out of the mass-production, mass-distribution, mass-consumption society. And the global economy was heavily regulated.

This Keynesian economic order came into crisis in the 1970s, partly because productivity gains had diminished. There was a lot of pushback both from the left and the right, both from elites and commoners. This order was replaced by what I call the “neoliberal order,” in which the state still mattered a great deal, but there was an effort to insulate markets from political interventions from the state. It saw fewer productivity gains and saw a massive shift of the industrial heartland of the world from North America, Europe, and Japan into China and other parts of Asia. It was also the moment in which inequality within the industrial heartland grew drastically. By the 1980s and 1990s, it became a particular shape of global capitalism that within itself remained quite stable for a long time.

I think we might be living right now at a moment in which that order is becoming much less stable. The crisis of 2007–08, for example, looks a little different now than it looked when we lived through it, because now it seems like the new liberal order itself becomes kind of wobbly. We’re on the verge of something else emerging, though I don’t think we can tell right now what this new shape of capitalism will really look like in the future.

How will technological innovation affect the future of capitalism?

There’s a possibility that human productivity is going to make another jump that presumably is going to sharpen distributional conflicts. What happens if the college-educated middle class is going to suddenly run out of work and the gains of the productivity revolution that might be unfolding in front of our eyes are captured by a very small minority of society?

The exact shape of this order, in my mind, is not really settled. Of course, it has become very common to fear the future. But certainly there are also reasons to be optimistic. We are perhaps entering a moment that is unique in human history. We have the capacity to produce enough things to satisfy most of the basic human wants that people in the world might have. This is within our technical ability.

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