We are seeing today a conflict between modern unfettered capitalism and the polite capitalism of the bazaar that developed in the high middle ages and continued into twentieth century
In ancient times the only real capitalism is what we call here polite capitalism, typified by bazaars and open markets where farmers and craftsmen traded the products of their labor with others who specialized in different activities. Although the bargaining was as hard as any time in history, this form of capitalism was considered a respectable way of increasing the welfare of all, and underhanded dealings, trickery, and speculation were viewed as undermining the process.
Capitalism changed in the last couple centuries when markets expanded from the direct exchange of goods and services in bazaars, to unfettered modern capitalism, with the introduction of central banking, corporations, trusts, holding companies, stock markets, and speculation. The scale of projects during the industrial revolution and subsequent development of assembly line manufacturing and railroads necessitated such changes to a great extent. But, along with such concentrated control of capital came practices which were inconsistent with the polite capitalism conducted by individuals in earlier times. A class of workers devoted to the mechanics of financial transactions, removed from the real reasons for investing developed. They soon learned that more profit was to be made from churning assets, developing sophisticated derivatives to mitigate risk, and increasing the volume of financial exchanges, than could be made from providing investment capital to industrialists and entrepaneurs. In this environment, speculation rose to equal importance to investing, and clever use of deceptive techniques to make money from handling money became respectable.
But, polite capitalism never really disappeared. Even in advanced western countries, polite capitalism still exists, although it is facing a great challenge. Drive through any small town in
So along comes Wal-Mart, imported consumer goods, cheap foreign labor, outsourcing, cutthroat competition and all the other products of unfettered capitalism. The prices of goods and services drop, but home grown businesses soon are forced to close and polite capitalism begins to disappear. It’s neighbor against neighbor, chasing the lowest price, since the wages drop even quicker than the price of goods and services and small town
The result of the transition from polite capitalism to unfettered capitalism is often a loss of ethical business practices and a shift to impersonal economic interactions, along with a transfer of wealth to those most skilled in financial matters rather than in providing exceptional craftsmanship. The mass produced products tend to be more standardized, but variety and quality is more erratic. Handcrafted products become prohibitively expensive for the average consumer.
We may want to consider whether we are losing or winning in transition from polite capitalism to unfettered capitalism.