William Kingston, How Capitalism Destroyed Itself: Technology Displaced by Financial Innovation

• DOI: https://doi.org/10.13169/prometheus.38.3.0335
• Pages: 335-341
• Published date: 20 December 2022
• Date: 20 December 2022
• Author: Peter Senker

Review essay335

REVIEW ESSAY

How Capitalism Destroyed Itself: Technology Displaced by Financial Innovation William

Kingston (2020) 192pp., €34.00 paperback, Peter Lang International, Oxford, ISBN 978-1785367731

This second edition of Kingston’s How Capitalism Destroyed Itself is based on the assumption that

during the twentieth century, and especially after the end of World War II, there was a fundamental

shift in the focus of Western creative energy from technological innovation to financial innovation.

But continuing financial innovation has always been central to the survival and prosperity of capi-

talism. For example, from the seventeenth century onwards, money-lenders began to diversify into

such banking activities as creating, discounting and swopping bills of exchange. Over time, banking

played an ever-increasing role in international and national trade, continually innovating to meet the

changing needs of property owners – first in the shape of merchant capitalists and subsequently as

industrial capitalists.

Nevertheless, it is impossible to understand the development of capitalism properly without

at least a brief outline of the origins of its complex history. This is attempted here. For several cen-

turies after the fall of the Roman Empire, there was a growing trade importing such luxuries as

spices, silk, ivory, precious stones, dyes, drugs and condiments, brought over land to the West from

the East by Arab merchants. In addition, Italian merchants imported a great variety of luxury arti-

cles made in artisans’ workshops in what is now known as the Middle East.

The Black Death started to sweep through Europe in 1348, eventually killing over a quarter

of the population. Outbreaks in the second half of the fourteenth century had profound implications

for trade and for social and economic relationships. Wages increased enormously, rents fell and

trade contacts and routes were disrupted. The sack of Constantinople by the Turks ended hopes that

overland trade routes could be re-established. This violent disruption of long-established trade

routes between Europe and the East was significant in inspiring a search for a sea route to the East

Indies. The great explorations of the fifteenth and sixteenth centuries by seamen from first Italy,

Portugal and Spain and later from England and the Netherlands, had mixed motives, but prominent

amongst them was opening up sea trade routes in place of the overland trade routes shut down by

the Black Death. Spanish and Portuguese conquests and settlements in the New World and the East

resulted largely from royal enterprise, but Dutch and English involvement was more inspired by

private enterprise (Routh, 1984, pp.24–9). During the industrial revolution, industrial capitalism,

which started towards the end of the eighteenth century, became an engine of mass production. But

between various sections of the populations of each country and over time there has been very

uneven distribution of economic benefits and disadvantages.

In his preface to the original version of this book, Kingston wrote:

The basic argument of the book is that capitalism depended upon markets which exist only because

of governments which make laws of property and enforce them. These laws have the power to

‘civilize’ self-interest and force it to serve the public good as well as individual objectives. The self –

destruction of capitalism resulted from allowing the capture of these laws by interests.

In this second edition, Kingston writes that ‘capitalism made the Western world uniquely rich’ , but

fails to mention that most of the great riches in the Western world are, and always have been,

enjoyed by a relatively small proportion of its total population.

DOI:10.13169/prometheus.38.3.0335