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‘Europe and the rest: Braudel on capitalism’

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Peer Vries
Europe and the rest: Braudel on capitalism

“Il faut voir grand, sinon à quoi bon l’Histoire?”1

How to explain that at some point in time Europe, or in a wider sense ‘the West’,
became the richest and most powerful region of the world? This is one of the
major questions concerning the history of the past millennium. Among those
scholars who have studied this period, the historian Fernand Braudel counts as
one of the most important. Sooner or later, anyone who is interested in ‘the
European miracle’ and more broadly in global history will need to explore the
views of this French maître à penser. This is the right time to undertake such an
endeavour: Braudel has taken his seat among the classics and all his publishable
material has been published and extensively discussed.
Braudel wrote about many subjects, but the focus of his work clearly is on the
history of Europe between the Late Middle Ages and the nineteenth century.
Much of it sheds light on the rise of the West. This is not a coincidence. Braudel
was a staunch supporter of global history, particularly interested in comparing
civilizations. Witness, for example, his Grammaire des civilisations, first
published in 1963, and his Civilisation matérielle, économie et capitalisme, XVe-
XVIIIe siècle from 1979, in which he repeatedly claims that good history perforce
would be global history in which developments in Europe are compared with
developments in other major civilizations.2 In his opinion, even the historian who
wants to confine himself to Europe is obliged to take a look at the world as a
whole, as “... parler de l’Europe c’est forcément se heurter à ce problème
gigantesque des dix (sic! Peer Vries) derniers siècles de l’histoire de la planète: la
domination du monde par un si minuscule continent.”3 In addition, he takes the
view that historiography should aim at explaining the present.4 That means that

1
This quote of Braudel is the opening motto in Roselyne de Ayala and Paule Braudel, eds., Les écrits de
Fernand Braudel II. Les ambitions de l’histoire (Paris 1997).
2
Fernand Braudel, Grammaire des civilisations (I will refer to the Flammarion edition: Paris 1993);
Civilisation matérielle, économie et capitalisme, XVe-XVIIIe siècle, Paris 1979, three volumes, henceforth
CMEC. Braudel published the first volume of this trilogy in almost identical form in 1967, also in Paris, under
the title Civilisation matérielle et capitalisme. For his comments that good history by necessity would be global
history, and that developments in Europe must be compared with developments elsewhere, see Braudel, CMEC
I, S. 9; CMEC II, 12 and CMEC III, 7-10.
3
Fernand Braudel (ed.), L’Europe, Paris 1982, 123. Four chapters in this book are by Braudel, including
chapter 8, which has been mistakenly attributed to the photographer Quilici.
4
CMEC III, 537: “…le but secret de l’histoire, sa motivation profonde, n’est-ce pas l’explication de la
 2

any historian with wide interests will automatically come across “... le problème
essentiel de l’histoire du monde moderne”, i.e. to explain “l’écart entre l’Occident
et les autres continents.”5
Besides for global history, Braudel also argues the case for integral history. That
does not alter the fact that in his own work he clearly opts for a particular
perspective. For Braudel, in the end it is material circumstances that are
fundamental. Although geography and demography receive a great deal of
attention as its basic precondition, economic life occupies centre stage. The
history of mentalities, historical anthropology, and other approaches that became
so popular in French historiography after Braudel had left his place at the helm of
the Annales School, do not really appeal to him.6 If one had to label him it would
be as an ‘economic historian’. In Civilisation matérielle, économie et capitalisme,
his most voluminous publication, he specifically states that he aims to study the
history of the world from an economic perspective.7 It should therefore not come
as a surprise that in his view Europe’s hegemony is inextricably linked to the fact
that, in economic terms, Europe was different - more specifically to the fact that it
was the first - and for a long time the only - continent where a mature form of
capitalism could be found: “Mais, reconnaissons-le sans ambages, la construction
[of capitalism, P.V.] réussit en Europe, elle s’esquisse au Japon, elle échoue (les
exceptions confirmant la règle) presque partout ailleurs - mieux voudrait dire, elle
ne s’y achève pas.”8 Braudel distinguishes three layers of economic life: material
life, the (market) economy and capitalism.9 The fundamental difference between
the West and the rest of the world, the difference to which the former owes its
leading position, is capitalism. In terms of their material life, and even their
market economies, the differences between the various regions in the world were
negligible. To Braudel it is “évidemment simpliste” to attribute the gap between
the West and the rest simply and solely to a “‘rationalisation’ de l’économie de
marché.”10 He explicitly refers to China to show that a capitalist super-structure is
not just a logical and normal extension of a lively market-economy.11 It is
something different with a different logic.
For the record, Braudel does not think that Europe’s specificity as such solely
resides in its capitalism; there are many other things that can be considered
‘typically European’. He points at several of them, but his general comments on

contemporanéité?”
5
CMEC II, 111.
6
Fernand Braudel, Une leçon d’histoire de Fernand Braudel, Paris 1986, 162-163.
7
CMEC III, 9.
8
CMEC II, 519.
9
See CMEC I, ‘Introduction’ and ‘Préface’, for more details on how Braudel makes this distinction and
defends it.
10
CMEC II, 111. See also 110-113 and 522-534.
11
CMEC II, 535.
 3

‘European exceptionalism’ are not very exceptional themselves.12 Like many

scholars before, and after him, he presents Europe as the dynamic continent par
excellence. To some extent, so he claims, this dynamism can be traced back to its
geography. Europeans in a sense were almost forced to go out to the sea if they
wanted to develop their economies. According to Braudel Europe’s global
dominance began at sea. He does discuss Europe’s expansion over land, but is
especially fascinated by the possibilities offered by the fact that the continent is
surrounded by water and criss-crossed by waterways. These possibilities are
definitely part of the explanation of the fact that Europe has a tendency to expand.
But at the same time it also willingly absorbs influences from elsewhere. More
than any other civilization it has always been open to people and ideas from
elsewhere, at least that is, according to Braudel.
He regards Europe as a unity, but a unity in diversity. Politically, during the
periods that he studies, it has never been a single entity. It was divided into
separate countries that influenced and stimulated each other; learnt and borrowed
from each other as well as from their own past. This too, contributed to its
dynamism. That this diversity often gave rise to conflict and even war, does not
detract from that dynamism, on the contrary, conflicts can be a driving force for
development. Braudel puts a heavy emphasis on Europe’s specific political
organisation. Not only was it made up of a large number of independent states:
The cities within those states all had their own particular characteristics. He
argues that Europe - together with Japan - was the only region in the world where
cities were independent and had their own legal system. Mentally, Europe also
was in a better position than other civilizations to become ‘modern’. Here the
same applies: there was no single Europe, no single monolithic European culture.
Politics, religion and the economy were less tightly interconnected than in other
civilizations. What we can observe is a constant interaction between different
ways of thinking, none of them ever achieving complete supremacy. According to
Braudel, it should therefore not come as a surprise that modern science originated
in Europe. All this is stock-in-trade Eurocentrism. What is striking, to just give
one comment, is that, as many others who like to speak of the European ‘unity in
diversity’, Braudel tells us nothing about the obvious disadvantages of Europe’s
fragmentation.

******

Braudel as an economic historian tends to study all those European particularities

12
For the remarks in this and the next paragraph see Braudel, Grammaire des civilisations, 216, 217, 349,
356-358, 367, 404, 411, 452-453, and idem., Europe, 124-127, 133, 136, 211, and 216.
 4

mainly from the perspective of their importance for Europe’s economy, and in
particular their importance for Europe’s capitalism. It is there that, according to
him, resides the most important and certainly the most specific explanation for
Europe’s prosperity and hegemony. This raises the question of what Braudel
means by capitalism - the concept after all has been interpreted in many different
ways. In the classic, ‘liberal’ interpretation à la Adam Smith, the emphasis is on
the market mechanism; that is on the exchange of goods and services. Classic
Marxists see capitalism primarily as a mode of production and focus on the
private ownership of the means of production and the prevalence of wage labour.
Others emphasize ‘the spirit of capitalism’, referring, for instance, to the ideas of
Weber and Sombart. As if that is not enough, Braudel comes up with a rather
idiosyncratic interpretation of his own.
That interpretation is in any case distinct and different from that of all scholars
just referred to in the sense that for him capitalism is a phenomenon of all times,
not restricted to a particular phase in history and not a certain stage in a the
overall evolution of economic life.13 In the period and regions he studies it
manifested itself for the first time in the fairs in Champagne and Venice in the
thirteenth and fourteenth centuries. Braudel’s interpretation has no affinity
whatsoever with Weber’s view on capitalism or rather with what Braudel
considers to be Weber’s view. He repeatedly claims that, unlike Weber and, for
example, Sombart, he does not believe in a typically capitalist, ‘rational’
mentality.14 Although at times he does tend to come up with cultural or
psychological explanations.15 From that other great thinker on the capitalist
system, Marx, Braudel distinguishes himself in that he does not view capitalism
primarily as a specific set of production- and property relations, but rather as a,
quite specific, system of exchange.16 When he speaks about capitalism, he only
refers to the sectors of the economy where the highest profits are made. In the
period he studies these would be the financial sector and those sectors of

13
CMEC III, 538-539, and Fernand Braudel, A propos des origines sociales du capitalisme, in: De Ayala
and Braudel, Les écrits de Fernand Braudel II, 359-371, 360. Originally in: Mélanges en l’honneur d’Émile
James, 1972. Further details are missing.
14
CMEC II, 141, 353-355, 505, 509-510, 517-519; idem., La dynamique du capitalisme, Paris 1985, 69-
70, and idem, A propos des origines sociales du capitalisme, 362. There, by the way, are no clear indications that
Braudel actually ever read Weber, whereas indications that he has not understood him abound.
15
See for instance Fernand Braudel, European expansion and capitalism, 1450-1650, in: J.L. Blau et al.
(eds.), Chapters in Western Civilisation Vol I , New York and Londen 31961, 245-288, 268: ‘... capitalism is a
psychology’. This text also appears in: De Ayala and Braudel, Les écrits de Fernand Braudel II, 299-345. Its
title there is ‘Expansion européenne et capitalisme (1450-1650)’. I will refer to this French version in the rest of
the text. See also his comments with regard to the question of why capitalism did not really take root in France in
the early modern period. For an analysis see Steven Kaplan, Long-run lamentations: Braudel on France, in:
Journal of Modern History 63 (1991) 341-353.
16
For an explanation of this distinction see R. J. Holton, The transition from feudalism to capitalism,
Houndmills Basingstoke 1985, 64-102, and J.-L. Margolin, Les mystères de la transition, in: Braudel dans tous
ses états. La vie quotidienne des sciences sociales sous l’empire de l’histoire. (=Espaces Temps, nrs 34-35),
(1986) 94-101.
 5

(international) trade that were directly related to it. He considers investing in

manufacturing less lucrative, whereas investments in agriculture would have been
the least profitable. As a rule at least before the Industrial Revolution, there was
much more money to be made in trade and services than in direct production.17
Braudel pays particular attention to overseas trade. To him that is virtually
synonymous with capitalism: “Le commerce au loin n’est pas tout, mais il est le
passage obligatoire à un plan supérieur du profit.”18 It therefore is the place
where, as he puts it capitalism feels “at home”. According to him it is the sector
where the highest profits are made and where economic life is at its most
advanced.19 In that respect the following quote summarises his view quite well:
“Là où le profit atteint de très hauts voltages, là et là seulement est le
capitalisme, hier comme aujourd’hui. Il est certain qu’au XVIIIe siècle presque
partout en Europe, le grand profit marchand est très supérieur au grand profit ou
industriel ou agricole.”20
We now come to what is probably the most striking difference between Braudel
and most other authors who studied capitalism, especially those who take a
liberal, ‘Smithian’ perspective.21 Braudel clearly regards capitalism as an ‘anti-
market’, or in his terms as a “franche contradiction” of the market economy.22
Capitalists try to eliminate or circumvent the rules of the free market as much as
possible. If ‘real existing capitalism’ is characterised by freedom of choice - and
Braudel believes this to be the case23-, we have to realise we are talking about the
freedom of choice of a very small group of very rich and privileged ‘super-
entrepreneurs’. Capitalism is an unfair game, played by a tiny number of
privileged people who have been granted or have seized the power to have things
their way.24 It is a non-transparent game, that is only understood by insiders and
from which ordinary entrepreneurs are excluded. According to Braudel one can
see it played in particular on the stock exchange, in deals on major international
markets, and in complex financial transactions such as provisioning credit.
Capitalists are the people at the pinnacle of trading activity; the ones who hold
‘the commanding heights’. They are well-enough informed and materially able
to select in what sectors and places they do or do not want to be active. They do
not specialise but, thanks to their wealth and protection, can always keep several
options open. They earn their profits thanks to the lack of transparency of the

17
CMEC II, Chapter 3: ‘La production ou le capitalisme chez les autres’, and Chapter 4: ‘Le capitalisme
chez lui’.
18
CMEC II, 535. See also ders., A propos des origines sociales du capitalisme, 357.
19
CMEC I, 8-9; CMEC II, 332-339.
20
CMEC II, 378.
21
The briefest way to get an impression of Braudel’s definition of capitalism is to read the introductory
and concluding parts of CMEC I, CMEC II and CMEC III.
22
CMEC I, 8, and CMEC II, 9, and 196-197.
23
CMEC III, 539, and Braudel, Leçon d’histoire, 139.
24
CMEC II, 415-420.
 6

markets in which they operate and that they to a large extent manipulate and try
to monopolize. Braudel’s capitalism thus is characterized by protectionism and
exclusion, not by free competition. What Braudel refers to as ‘capitalism’, would
be called ‘monopoly capitalism’ or ‘late capitalism’ by Marx and Lenin and ‘the
industrial system’ by Galbraith. What these three regards as characteristics of a
particular stage in the development of capitalism, Braudel on the contrary views
as inherent and permanent characteristics.25
Considering what has been said before, Braudel’s variety of capitalism can only
be fundamentally hierarchical. It is so in two respects: Firstly, because it is at the
top level of circulation and sponges on two underlying layers of economic life. It
has to be distinguished from what Braudel calls ‘material life’ and from the
second layer in the economy that he distinguishes in his famous tripartite scheme
and that he calls ‘the market’ or ‘the market-economy’. By ‘material life’ he
means the elementary, basic economic routines lying underneath the market, the
informal world of self-sufficiency and barter of goods and services within a very
small radius where supply and demand are not subject to a price mechanism and
many goods and services do not have an actual price, let alone a monetary price at
all. The second layer, on top of the previous one, would then be that of the
market-economy, where production and exchange take place according to the
rules as they are formulated in the classic language of economic science. Here
supply and demand are supposed to set prices.26
Braudel’s capitalism is also hierarchical in the sense that it implies a hierarchical
geographical organisation. It is always also a location. It occupies a central i.e.
coordinating and monitoring position within an economie-monde, which next to
that centre also has as a (semi-)periphery.27 It is the place where all the profits of
the unequal exchange between centre and periphery flow, the rallying point of
“tout ce qu’il peut y avoir de mieux, de plus vif dans la vie économique du
moment.”28 It exists by the grace of an international division of labour and its
resulting profits.29 To those outside the centre of the capitalist economy Braudel
offers the consolation that in his view this centre is not stable and static, but
moves - not by chance, but necessarily so. He even considers this a ‘rule’.30
Anyone who focuses so much on the importance of exchange relationships as
Braudel does will tend to put the difference between mercantile (or merchant)
capitalism and industrial capitalism that one frequently comes across in the

25
CMEC II, 196-197, and 514.
26
See for these definitions, for example, the introduction of CMEC I.
27
It would take too much space to extensively deal here with the meaning of the concepts ‘économie
monde’, ‘centre’ and ‘periphery’ that are also well-known from the work of Wallerstein. For a systematic
description and explanation I refer the reader to CMEC III chapter 1.
28
Fernand Braudel, L’expansion européenne et la longue durée, in: De Ayala and Braudel, Les écrits de
Fernand Braudel II, 373-385, and 382.
29
CMEC II, 536.
30
CMEC III, 21-24.
 7

literature into perspective. Not that Braudel would entirely reject these terms; he
knows and uses them. He does acknowledge the great importance of the Industrial
Revolution and the enormous differences between industrial and pre-industrial
societies. To him, these differences reside primarily in the fact that with
industrialization new raw materials and energy-sources emerged as the basis of
economic life. In that sense the shift from wood and charcoal to coal, steam, iron,
and later steel, may be regarded as the essence of the Industrial Revolution,
although Braudel emphasizes time and again that this revolution as it occurred in
Britain was an extremely complex, multi-facetted process of interlocking and
long-term developments that can not be reduced to changes in one key variable,
e.g. technology.31 He prefers, however, to stress similarities. Where exchange
relationships are concerned, so he claims, mercantile capitalism and industrial
capitalism actually are quite similar. In that respect, capitalism remains the same,
even after the Industrial Revolution: “Mais je soutiens, à tort ou à raison, qu’au
travers de cette grande mutation (i.e. the Industrial Revolution - Peer Vries) le
capitalisme est resté, pour l’essentiel, semblable à lui-même.”32 Though capitalists
may have rushed into the industrial sector during the industrialization process, at a
high level “les jeux de l’échange” as he calls it, were played in the same way,
both during and after that period. In addition, it does not take long for capitalism
to return “chez lui” and focus on trade and finance.33
A concept such as capitalism inevitably carries an emotional charge. It is no
different with Braudel: his approach is ambivalent, and the huge amount of
attention he pays to what is after all just a tiny group of capitalists and their
influence is a clear indication of his fascination, if not his admiration. But it is the
type of admiration that decent citizens might feel for cunning rogues. Capitalists
do not play fair, as is clear from the terms Braudel uses in describing their game:
“zone d’opacité”, “monopole”, “échange inégal”, “économie artificielle”, “zone
d’ombre” and “de contre-jour”, “contre-marché”, “cartes truquées.”34 He prefers
open and transparent markets that are not manipulated by only a few individuals.
Such markets, according to him, are not only fair, but also the main source of
dynamism and innovation: “Ce ne sont pas les capitalistes qui ont fait la première
révolution de cotton, tout est parti d’entreprises minuscules et dynamiques. Est-ce
si différent aujourd’hui?”35 To be honest I fear, for Braudel, that many
economists, for example all of those who are inspired by the ideas of Joseph
Schumpeter, would not subscribe to this ‘small is beautiful’-view.36 Braudel,

31
CMEC, III, chapter 6.
32
CMEC III, 538.
33
CMEC II, 199-200, 327-328, and CMEC III, 538-540. See the quote in CMEC II, 328: “Le capitalisme
de l’ère industrielle ne sera pas uniquement lié, loin de là, au mode de production industriel.”
34
CMEC I, 8; CMEC II, 8-9, 113; CMEC III, 36-38.
35
CMEC III, 547.
 8

however, not surprisingly, concludes his Civilisation matérielle with a plea for a
genuine market economy with markets working on the basis of free and fair
competition.37

*****

If capitalism is so important for Europe and Europe’s position in the world, then
of course explaining why exactly it emerged there and not someplace else,
becomes of utmost importance. Braudel is very explicit in this respect and lists
three conditions for its development.38
As a first condition the two bottom layers of material life and, even more so, the
market-economy must be well developed and flourishing. The capitalist top layer
needs a sound base in order to thrive. Secondly, capitalism can only blossom
within a social order that offers opportunities and security to the capitalists; in
particular, the state must provide them with opportunities to accumulate wealth
and give them the assurance that they will not be arbitrarily robbed of the fruits of
their work. Braudel even goes as far as to make the following claim: “Capitalism
only triumphs when it becomes identified with the state, when it is the state.”39 It
can only develop as a system when entrepreneurs are free to do what they want
and receive protection; when freedom and privilege go hand in hand. More than
anywhere else, this was the case in Europe, where personal or collective
ownership of objects, positions and rights was legally secured and where it was
fairly easy for ‘entrepreneurs’ to found a dynasty by leaving their property to
descendants. According to Braudel this implies that European society experienced
less social mobility than important civilizations outside Europe.40 The view that
capitalism is both the cause and the result of permanent innovation attended with
social mobility, in his opinion, is only ideology. As so often in history, this, too, is
a question of context and nuance. Although Braudel emphasizes the possibilities
to establish entrepreneurial dynasties in the West, he is also the historian who, for
example, in La Méditerranée examines in detail the so-called ‘treason of the
bourgeoisie’.41

36
See e.g., Joseph A. Schumpeter, Theorie der wirtschaftlichen Entwicklung (first edition: Leipzig 1912,
actually the book appeared in 1911; second revised edition Berlin 1926). The first English translation, The theory
of economic development, was published in 1934 by the Cambridge University Press in Harvard.
37
CMEC III, 537-548, and idem., Leçon d’histoire, 139.
38
CMEC II, 535-536.
39
Fernand Braudel, Afterthoughts on material civilization and capitalism, Baltimore 1977, 64-65.
40
Braudel, A propos des origines sociales du capitalisme, passim; ders., La dynamique du capitalisme,
Paris 1985, 75-79, and CMEC II, 535.
41
Fernand Braudel, La Méditerranée et le monde méditerranéen à l’époque de Philippe II (first edition
Paris 1949; second revised and enlarged edition; Paris 1966) 68-74. I refer to the second edition in this text.
 9

Even more than with the Western state, Braudel connects capitalism, or rather its
origins, with the Western city. In his opinion, the city is the perfect place for
innovation and as such almost synonymous with capitalism.42 It is not so much
the size of cities he alludes to (large metropolises can be found outside Europe
too, and even larger ones), but the fact that in the West cities were – or at least
had been - independent and formed a hierarchical network of markets.43 The fact
that Western cities had their own, free ‘bourgeois’ elites, has left permanent
marks on Western states.44 In Europe, the emerging states did not succeed in
completely robbing the cities of their character and status. Too many cities had
already become too strong when the European states took on their modern form.
Those states, in turn, were too strong to be merged into a single empire. The
strength of states and cities was often based on the capital available within their
borders and on the capitalists’ support. In this way, Braudel turns around a quite
popular thesis in historiography. Instead of claiming that capitalism could develop
in Europe because there was no ‘European empire’, he claims the opposite: There
was no European empire because European capitalism was already strongly in
place when the ‘empire-builders’ appeared on the scene.45 Of course, there are
significant differences here, both inside and outside Europe, but according to
Braudel it is an undisputed fact that in the West the state often became an ally of
the capitalists, in contrast to what happened elsewhere in the world. This was the
case particularly in regions where capitalism was already highly developed and
the capitalists themselves played a major role in the process of state formation.46
Braudel’s explanation for the fact that Europe, with its states and free cities, had a
different political structure than the world outside it is best captured by the term
‘feudalism’. Braudel attaches special importance to the fact that after the
Imperium Romanum, Europe disintegrated into many sovereign polities.
According to him, capitalism could only make a breakthrough in areas that had
known a form of ‘feudal government’: “Un pays où il n’y a pas eu un système de
démolition préalable de l’État, qu’il s’appelle féodalité ou non, n’a jamais réussi
son essor capitaliste: la Chine en est un parfait exemple.”47 The political
organisation outside Europe was completely different. As in all his comparative

42
CMEC I, 490: ‘L’urbanisation, annonce d’un homme nouveau’. See also 453: “En Occident, capitalisme
et villes, au fond ce fut la même chose.”
43
CMEC I, 108-110, 423-425; 463-464, and 522-529.
44
For a recent claim that capitalism was born and matured in the late-medieval cities of Western Europe,
because those were the only places at the time where a free bourgeoisie, involved in trade and production, really
was in charge, see Eric H. Mielants, The origins of capitalism and the ‘rise of the West’, Philadelphia 2007.
45
CMEC III, 42-44.
46
CMEC II, 329, 378, 409, 463, 493-494, 524-525 and 531; CMEC III, 541, and idem., Leçon d’histoire,
150.
47
Leçon d’histoire, 150-151. For further details on the role of feudalism, a term that Braudel has mixed
feelings about, see ders., Grammaire des civilisations, 355-374, and CMEC II, 413-414. I would want to point at
the fact that Britain, the first industrial nation, after 1066 never knew the parcellized sovereignty that is so
characteristic for feudalism.
 10

analyses, Braudel here too pays particular interest to the situation in Asia, the
continent that together with Europe had the best ‘chance’ to modernise. China,
Asia’s biggest and in many respects most developed state, never had independent
cities with a powerful bourgeoisie; Japan to a certain extent did, which fits
Braudel’s thesis that the country went through an autonomous development
towards capitalism. China, again according to Braudel, did not have a hierarchical
network of cities either. The Asian states, to use that rather clumsy expression,
apart from Japan, did not provide a good breeding ground for capitalism; on the
contrary.48 For the case of China, Braudel explicitly claims that capitalism was
deliberately thwarted there by the state.49 Overall, he holds a quite gloomy view
of ‘oriental’ states and in the case of China appears to be strongly influenced by
the sinologist Etienne Balazs who did not mince words and characterised
Chinese society under imperial rule as “highly totalitarian”.50 Entrepreneurs
there lacked protection and security. The authorities’ way of operating was too
arbitrary, too much money was siphoned off, and there were too many officials.
These were too powerful and subjected the population to “lourdeurs
insupportables”.51 This prevented capitalist dynasties from becoming established:
except, again, in Japan. All too often, Asian governments acted as ‘plunder-
machines’. Their favourite occupation was rent-seeking, not protecting and
helping entrepreneurs.52
Then there is the third, and necessary, condition for the development of
capitalism: international trade, the sector par excellence according to Braudel to
make extra-ordinary profits and play capitalist games. Braudel’s way of arguing
here is not very lucid: In his opinion, capitalism is virtually synonymous with
long-distance overseas trade, but at the same time he declares that this trade is a
necessary condition for its emergence. Incidentally, Braudel feels the need to
draw some distinctions here and emphasize that Europe is far from being a
uniform entity. There are significant differences between coastal states and states

48
See for the anti-capitalist character of the state outside Europa in general for instance CMEC II, 108,
113, 459, 524-525; idem., Leçon d’histoire, 150-151; idem., A propos des origines sociales du capitalisme,
passim, and idem., Dynamique du capitalisme, 70-79.
49
CMEC III, 448. In the original French text it reads “L’Inde n’est pas la Chine où le capitalisme en soi,
c’est-a-dire l’accumulation, est entravé sciemment par l’État”. In the English translation Civilization &
capitalism, 15th-18th century. Volume III. The perspectives of the world (London 1984) on page 520, it reads that
“in China capitalism was deliberately thwarted by the state.” (Italics in the original, Peer Vries). See for example
also Braudel, Afterthoughts on material civilization and capitalism, 72: “… the Chinese state showed constant
hostility towards the spread of capitalism.”
50
Etienne Balazs, La bureaucratie céleste: Recherches sur l’économie et la société de la Chine
traditionelle, Paris 1968, 22-23. Readers interested in life and work of this very influential sinologist are referred
to Harriet Zurndorfer, Not bound to China: Etienne Balazs, Fernand Braudel, and the politics of the study of
Chinese history in post-war France, in: Past and Present 185 (2004) 189-221.
51
CMEC II, 459.
52
For the expression ‘plunder-machine’ see Eric Jones, The European miracle. Environments, economies
and geopolitics in the history of Europe and Asia, Cambridge 21987, 185 and 233. For ‘rent-seeking’ see ders.,
Growth recurring. Economic change in world history, Cambridge 1988 passim, but especially 1, 42-43, 120-122.
 11

in the interior, between ‘les bords de mer’ and ‘les épaisseurs continentales’.53
Basically he thinks capitalism can only emerge in those coastal regions.
The brief overview given here of what Braudel regards as preconditions for the
emergence of a full-blown capitalism shows that indeed, as already indicated, in
contrast to Weber and e.g. David Landes, the author of an extremely successful
book on the rise of the West that was published more than a decade after
Braudel’s death, he hardly pays any attention to cultural factors in his main
arguments.54 This is undoubtedly partly due to the fact that he attributes some
rather curious ideas to those individuals who do. According to him, one of the
questions they ask themselves is why Europe would in aeternum be more
intelligent and more rational than civilizations elsewhere!55

*****

Braudel’s interpretation of capitalism as we have just presented it indeed is quite

idiosyncratic. It has, accordingly, not been beyond criticism. The sharp distinction
he makes between capitalism and the market-economy in particular has,
deservedly, provoked much criticism. It would fall beyond the scope of this
article to discuss that critique, as far as it is strictly economic, in extensive
detail.56 With regard to the way he describes his ‘market-economy’, I only want to
point at the surprising fact that he seems to think that such markets were a
common phenomenon in the early modern world, which they clearly were not.
Prices on most ordinary i.e. ‘concrete’ markets at the time were not the result of
the workings of an invisible hand that co-ordinated abstract and anonymous flows
of supply and demand. On the contrary, as Braudel certainly knows and even
regularly points out, price formation on such ‘regular’ markets was greatly
affected by the authorities, by tradition and by personal relations. One should not
confound ‘the Market’ as an abstract mechanism with the market as a concrete, as
Polanyi would put it ‘embedded’ place of exchange.57 If indeed the markets of his

53
CMEC II, 421, and 435-440.
54
I here refer to David Landes, The wealth and poverty of nations. Why some are so rich and some so
poor, New York and London 1998 with on page 516 the famous, often-quoted claim that “…culture makes all
the difference”. A claim which by the way six pages later is already toned down to the assertion that “…culture
can make all the difference”. (Italics Peer Vries)
55
CMEC II, 517-518.
56
For a critical analysis see: Alain Caillé, ‘L’emprise du marché’ in: Maurice Aymard (ed.), Lire Braudel,
Paris 1988, 93-132.; P. Fabra and G. Jorland in their contribution to: Braudel, Leçon d’histoire, 87-100 and 132-
139; contributions by J-M Goursolas, M. Aglietta, A. Lipietz, S-Ch. Kolm and Ph. Steiner in: Braudel dans tous
ses états, and Frank van Manen, Fernand Braudel over structuren, handel en kapitalisme, in: Leidschrift 6
(1989/1990) 129-153.
57
This is how I interpret Caillé’s fundamental critique of Braudel’s use of the term ‘market’. See e.g. for
this critique his L’emprise du marché. For Polanyi’s views in this respect see Karl Polanyi, The Great
 12

market-economy as Braudel likes to claim were ‘transparent’, ‘predictable’ and

‘regular’58, that often was exactly because they were not the type of free markets
that are so dear to economist.
I will also limit myself here to just a few general observations on his
characterisation of capitalism. Braudel has a strong tendency to present it as a
system of monopolies, as a ‘concurrence sans concurrents’.59 No doubt this is
what capitalists would have liked, but they never had things entirely their way.
Even ‘Braudelian’ capitalists needed to take competition into account. There were
winners and losers at their level too.60 Just like there was more manipulation in
what Braudel likes to describe as the ‘free markets’ of his market economy, there
was more competition in what he likes to describe as ‘(near)monopolies’. This is
a very important point. In Braudel’s view capitalism is characterised by super-
normal profits and continuity, which both can be explained by the fact that
capitalists would be (little short of) monopolists. If this is not actually the case,
there is every reason to take a closer look at those (alleged?) high profits and that
continuity as well. Were profits really that huge in international trade and
positions really that safe? Then why is it that the Fugger and so many other
business dynasties, as well as large trading companies, have disappeared from the
capitalist scene? In this respect the comment made by Steensgaard that practically
all European chartered companies were failures, is quite telling.61 Companies
like the Dutch and the English East Indian Companies, to all intents and
purposes the most successful ones, moreover, increasingly tended to obtain their
income not from business activities but from the fact that they became territorial
powers that ruled over large stretches of land.62 I will briefly return to those
supposed mega profits later on in the article.
When it comes to continuity one might also ask whether entrepreneurs in Europe
at the time of the ancien regime really established dynasties. On average, how
long did it take for capitalists to go bankrupt or to join the ranks of the nobility?

Transformation. The political and economic origins of our time, New York 1944, chapter 5.
58
See, for example, CMEC II, 403-407.
59
CMEC II, 363.
60
This comment has been made by several authors. I limit myself to Fabra’s contribution in Leçon
d’histoire, 87-95.
61
See for this comment Niels Steensgaard in: Simonetta Cavaciocchi, ed., Prodotti e techniche
d’oltremare nelle economie Europee secc. XIII-XVIII, Prato 1998, 717.
62
See for example John Elliott, The seizure of overseas territories by the European powers, in: Hans Pohl
(ed.), The European discovery of the world and its economic effects on pre-industrial society, 1500-1800. Papers
of the Tenth International Economic History Congress. Edited on behalf of the International Economic History
Association, Stuttgart 1990, 43-61; Jan de Vries, The limits of globalization in the early modern world, in:
Economic History Review 63 (2010) 710-733 and idem., Connecting Europe and Asia: a quantitative analysis of
the Cape-route trade, in: Dennis O. Flynn, Arturo Giráldez and Richard von Glahn (eds.), Global connections
and monetary history, 1470-1800, Aldershot and Burlington 2003, 35-106 and 82-91. I will come back to this
subject. The Dutch East India Company by the way went bankrupt at the end of the eighteenth century. Its
English counterpart often experienced serious financial trouble.
 13

What was the life span of the average large business?63 We already touched upon
this topic and hinted at Braudel’s ambivalence. He repeatedly and emphatically
declares that capitalism was able to flourish in Europe because European society
was pre-eminently suited to establishing business dynasties, but also implies that
many entrepreneurs in Europe said farewell to their capitalist activities.64
However, there is one key difference that I think cannot be denied. When big
businessmen in Europe left their trade, this was usually not because they were
forced to do so by the authorities; they did this either on a voluntary basis or for
purely economic reasons. Entrepreneurs outside Europe may very well have had
other reasons to leave their trade, for example authorities that robbed them of their
property or made their life so miserable that they could not be bothered anymore.
What is interesting here, of course, is the question whether industrialization in
Europe was borne by the same capitalist families - and the same capital - as in the
pre-industrial world. That, in any case, is what we might expect in the light of
Braudel’s statements on the fundamental similarities between mercantile
capitalism and industrial capitalism, and on continuity as an attribute of
capitalism. We will see, however, that this is not the case, which, by the way,
Braudel himself acknowledges.
Braudel argues that the anti-market of manipulating capitalists in pursuit of
monopolies was ruled by lack of transparency and concentration of power, which
would lead to unequal exchange, a concept that is also central to the work of
Immanuel Wallerstein and earlier on to so-called dependencia-theory.
Mainstream economics claims that in case of really free and fair exchange there
can be no such thing as unequal exchange. Braudel is convinced that in historical
reality it quite often does exist. Of course, much depends on what one actually
means when one refers to an exchange as ‘unequal’. Most economists hold, and I
think quite rightly, that the extent to which an exchange is ‘unequal’ cannot be
determined in objective economic terms; it is in any case much more problematic
than Braudel suggests.65 In a publication of 1985, he emphasized that he believes
that it is not a purely economic phenomenon but one that is the result of an
unequal distribution of power. The weaker party is forced to be satisfied with less
than what is their ‘right’.66
Braudel here is drawing the economists’ attention to one of their biggest blind
spots, namely the role of power in economic life. His capitalism as a system is
inherently unequal; its inequalities in the end are backed-up by power. The free

63
These are questions asked by Jean-Louis Margolin in: Les mystères de la transition: du féodalisme au
capitalisme”, in: EspacesTemps, n°34-35, 1986, 101.
64
Fernand Braudel, La Méditerranée et le monde, 68-74, and CMEC II, 426-435.
65
For a critical review of the way Braudel and Wallerstein use this concept see Peter Klein, Dutch
capitalism and the European world hegemony, in: Maurice Aymard, ed., Dutch capitalism and world capitalism.
Capitalisme hollandais et capitalisme mondial, Paris/Cambridge 1982, 75-91.
66
Braudel, Leçon d’histoire, 95.
 14

cities he likes to refer to as cradles of capitalism did not recoil from terrorizing
and exploiting their hinterlands.67 The role of power in the granting of (near-)
monopolies to capitalists in the early modern era by all sorts of rulers is quite
clear and has been analysed repeatedly.68 Rulers could of course also protect
(near)monopolies that had emerged spontaneously. That too has occurred
frequently and is a well-studied fact. Although Braudel is not as explicit and
systematic in describing the collusion between Profit and Power as I would have
liked him to be, he obviously pays a lot of attention to it. When it comes to the
role of brute force and violence he really keeps too silent. The early modern era
was the era of mercantilism in Europe’s history. That means it was a time of
permanent economic warfare in which rulers and capitalists often operated side by
side. When it comes to Europe’s long-distance trade and its dealings with non-
Europeans overseas, one can only observe that brute force and violence were
fundamental ingredients in it. There are a couple of places in his work where
Braudel explicitly points out how Europeans with their sturdier and better armed
ships, and the use of brute force, were able to bend things their way.69 Overall
though, he seems to really underestimate or at least neglect the role of these
factors in his actual research. That is really striking considering their obvious
importance and omnipresence. One brief look at the history of Europe’s chartered
companies would suffice. If one with Braudel claims that capitalism can only
function optimally when it is the state, then one has to deal with the fact that the
early modern European state was a war machine, as all recent literature on the
fiscal-military state repeats time and again.70 As far as I am concerned, Braudel
could and should have expanded much more on that. In the analyses he provides,
it too often does not become clear how exactly all kinds of ‘non-economic’ factors
underpinned the economic supremacy of Europeans over non-Europeans or of
some European over others. The economic history of the early modern world, in
particular the history of trade in that era, simply can not be understood without
systematic reference to power and violence, a point of view that has been
endorsed by an increasing number of renowned economists and economic
historians, like for example John Day71, Anthony Reid72 and quite recently and

67
See for example Mielants, The origins of capitalism, 38-42.
68
See for such an analysis Robert P. Ekelund and Robert D. Tollison in Mercantilism as a rent-seeking
society; economic regulation in historical perspective (College Station Texas 1981) and Politicized economics:
monarchy, monopoly and mercantilism (College Station Texas 1997).
69
See for instance CMEC III, 424-426, and 33.
70
See for literature note 111
71
See e.g John Day, Money and finance in the age of merchant capitalism, Oxford 1999, 114: “Classical
trade theory is utterly divorced from the historical realities of slave ships and silver argosies. The international
division of labour did not result from the operation of the law of comparative costs because the world’s trading
nations were never equal partners. On the contrary, it was centuries of unequal exchange that created a ‘chain of
subordination’ and led to the division of the planet into developed and underdeveloped regions.”
72
See e.g. Anthony Reid, Charting the shape of early modern South East Asia, Bangkok 1999, 1: “Europe’s
miracle can not be disentangled from its military and economic domination of more populous quarters of the
 15

quite explicitly Robert Findlay and Kevin O’Rourke in their overview of the
economic history of the world during the last millennium.73

*****

Braudel claims that capitalism not only has certain characteristics. According to
him it also operates according to certain rules. I will not discuss his – and
Wallerstein’s - distinction between centre, periphery and semi-periphery. That has
been done (more than) often enough.74 I will confine myself to a couple of
comments with regard to one of those rules, to wit the rule that such a centre does
not hold its position permanently. Centres move around. In general, that
undoubtedly is correct. The phenomena that Braudel associates with capitalism do
indeed tend to concentrate in one particular place after another. Centres are
succeeded by new centres: why is that the case? How does a region arrive at the
top within the capitalist system, and why does it lose that position again? These
are extremely important questions, as they concern the dynamics and logic of
capitalism.
Braudel’s answers, I am afraid, are not very clear. First of all, because he
repeatedly suggests that those who find themselves economically at the fore-front
will remain there. The best way to become rich is to be rich as the rich will
become richer. Sometimes he seems to slip into a geographical determinism
where centre and periphery are functions of certain locations.75 Both of these
arguments seem difficult to reconcile with his claim that centres would be moving
around, even “sans intervention consciente des hommes, mais obligatoirement
...”76 But let us assume centres move around. One explanation for the succession
of centres, still according to Braudel, might be found in the cyclical movements of
the economy. If the economic trend is downward, the existing centre will lose its

world.”
73
See Ronald Findlay and Kevin H. O’Rourke, Power and plenty. Trade, war, and the world economy in
the second millennium, Princeton and Oxford 2007.
74
For a good and brief description see CMEC III, chapter 1, and Immanuel Wallerstein, The modern
world-system, Capitalist agriculture and the origins of the European world economy in the sixteenth century,
New York 1974, chapters 6 and 7. I refer readers interested in good critiques of the world-system’s approach as
applied to historical developments in the early modern world to a list of them at the end of Charles Ragin and
Daniel Chirot, The world system of Immanuel Wallerstein: sociology and politics as history, in: Theda Skocpol
(ed.), Vision and method in historical sociology, Cambridge 1984, S. 276-312. Those who read Dutch can profit
very much from reading Jan de Vries, Het wereldmodel van Wallerstein, in: Theoretische Geschiedenis 3 (1976)
105-122.
75
Braudel, Europe, 136 and CMEC II, 336 and CMEC III, 36-38.
76
Braudel, Europe, 137.
 16

place to a successor.77 The reasons behind this phenomenon, however, remain

unclear. Why should the richer centres be more sensitive to economic slumps than
their competitors? We also find statements to the effect of ‘What goes up must
come down’. A centre apparently cannot remain at the top forever. The obvious
question than of course is: But why not? Apparently, centres sometimes let things
slide78, or are hampered by their previous successes.79 But it seems that, besides
the drawbacks of having a head start, there are also specific advantages in lagging
behind. It allowed regions that were not blessed by nature such as Venice and the
Dutch Republic to put themselves on the capitalist map.80 According to Braudel,
the reason behind the shift of the economic centre of the Mediterranean world to
north-western Europe was that the backward North, where everything was
cheaper, seized the opportunity and was not afraid to use violence in the
process.81 Alternatively, it could happen that a region which had the makings of a
centre did not want to become one, as was the case in China under the Ming
dynasty,82 or that the wrong region was chosen as a centre.83 Looking at all these
examples one can only conclude that in practice, the explanations offered by
Braudel are too ad hoc to allow discovering any underlying rule - which
incidentally does not mean that they are incorrect.
We are faced here with the consequences of the fact that apparently the
mechanisms of unequal exchange and exploitation are not understood well
enough. Braudel himself argues that the under-developing of the peripheral
regions always goes hand in hand with low prices, or is even characterized by it.
Centres, on the other hand, are always expensive regions.84 But why then do
entrepreneurs not establish themselves in poor countries in order to produce a
variety of merchandise and so unintentionally enrich these countries? Braudel
himself points out that industries are moved to low-wage countries.85 In present-
day capitalism this happens all the time; countries now compete especially on
production costs. Does this not provide an additional reason to make a finer
distinction between mercantile capitalism, where the entrepreneur gets his profit
chiefly from the difference between the purchasing prices and selling prices
without interfering with the production process, and industrial capitalism, where
the entrepreneur is deeply involved in production and closely watches production
costs? I admit, I present questions here rather than answers but that is because

77
Idem., L’expansion européenne et la longue durée, 383-385; idem., Dynamique du capitalisme, 90-94,
and CMEC II, 508.
78
Braudel, A propos des origines sociales du capitalisme, 362.
79
Ders., Expansion européenne et capitalisme, 328-331.
80
Ders., A propos des origines sociales du capitalisme, 361-362.
81
CMEC II, 507-509, and idem., Dynamique du capitalisme, 93-94.
82
Ders., A propos des origines sociales du capitalisme, 370-371, and CMEC III, 22.
83
CMEC III, 22.
84
CMEC II, 145-146.
85
CMEC III, 521, and CMEC II, 508.
 17

Braudel does not present unequivocal answers either.

*****

Braudel pays so much attention to capitalism because he sees it as a typically

European phenomenon that made Europe different, more prosperous and more
powerful than the rest of the world. But is that true? Let us start with the first
premise: is it indeed a European phenomenon? A few comments are in order here.
To begin with there is the fact that Braudel himself repeatedly points out that
Japan developed a variety of capitalism almost completely on its own. Which,
considering the fact that its economy was so closed for so long of course is a
remarkable, and, I would say somewhat inexplicable fact. In the rest of Asia,
capitalism never got beyond the initial stages. According to Braudel because the
“haute tension” of capitalism was “…présente en certains points seulement,
absente sur d’immenses espaces.”86 But is this situation so different from what we
find in Europe? Braudel systematically compares the situation in ‘Asia’, as the
other highly developed continent at the time, to that in Europe. The picture,
however, he paints of Asia, to my taste in the end is too primitive. During the
period he examines, Asia’s trading networks were highly developed and
sophisticated. That has exhaustively been documented in the literature.87 Anyone
with some knowledge of, for example, China’s economic history in the thirteenth
century cannot but smile at Braudel’s claim that at that time the Champagne fairs
were the economic heart of the West. Whatever took place there is nothing
compared to what was happening in China at the same time.88 In the early modern
era too, there is no reason whatsoever to think Asia was backward when it comes
to long-distance trade.
Of course there were many differences with the situation in Europe: but did they
already make a difference? Braudel and kindred spirits will undoubtedly raise the

86
See for the quote CMEC II, 522. See further 113 and 519-534.
87
Braudel could have known this. See e.g. Chaudhuri’s comments in Leçon d’histoire, 103-115. Now, more
than two decades after his death, in particular thanks to the work of the so-called California School that
permanently stresses the high extent to which Western European and East Asian economies at the time showed
surprising resemblances, this has almost become communis opinio. For the California School see my The
California School and beyond: how to study the Great Divergence?, in: Journal für Entwicklungspolitik /
Austrian Journal of Development Studies, 24, 4 (2008) 6-49. This text can also be found under
www.lse.ac.uk/collections/economicHistory/.../Vries(Jun09).pdf. An abbreviated version of it is published in
History Compass 8 (2010) 730-751.
88
CMEC III, 90-94, and Braudel, Europe, 138-139. For an antidote against this Euro-centric or rather Gallo-
centric approach for the case of China, see e.g. Mark Elvin, The pattern of the Chinese past, Stanford 1973, Part
Two. Braudel could have known this book. For the situation in Eurasia and connected parts of Africa at the time
as described in a book he could not have known, see Janet Abu-Lughod, Before European hegemony. The world
system A.D. 1250-1350, New York/ Oxford 1989.
 18

fact that Europe sailed all the seven seas whereas the main Asian civilizations did
not. That indeed is a huge difference between the West and the rest. Those who,
with Braudel, believe that the fate of the (early) modern world was determined on
the seas like to draw attention to this, and even try to strengthen their position by
claiming that regions such as China and Japan closed themselves off from the rest
of the world. That looks like a strong argument: but is it? It of course depends on
whether the West did indeed control the seas and how important that was for its
economy. To begin with, it should be noted that it is an exaggeration to say that
China and Japan shut themselves off from the world. That applies in particular to
the case of China that had a very substantial overseas trade.89 It seems to me,
though, that the real question here is not so much one of who did business where
and with whom, as of whose trade was biggest and most profitable. I see little
evidence that ‘Europe’ overall - that is to say, by land and by water, anywhere in
the world – gained more from trade than Asia, even though European trade had a
larger geographical range. In the sixteenth and seventeenth centuries Asia was
home to half to two-thirds of the world’s population, Europe only to between a
fifth and a quarter. Additionally, on average, Asia was no poorer than Europe.90
On Asian markets the European presence often restricted itself to that of
middlemen. The reader can find all these claims in Braudel’s work.91 It is Braudel
himself who refers to the Far East as “la plus étendue des économies-mondes”.92
Why then should we consider the relatively small intercontinental trade of Europe
as an indication of modernity and capitalism, and more or less bypass Asia’s
long-distance trade, which in all probability might have been just as large if not
much larger in both volume and value? It may be that Asia’s trading does not
appeal to the imagination so much because it took place in regions that from an
Asia perspective were not on the other side of the world, but is that relevant on a
strictly economical level? It might be: but then I would have loved to see why and
how.
Let us assume - not only for the sake of argument, as I think this indeed was the
case - that for a long time long-distance traders from outside Europe had to make
do without chartered companies, government support, stock exchanges, fairs, all
sorts of credit facilities, hierarchical networks of market towns, and other
manifestations of Braudellian capitalism. To what extend does that prove that
Asia’s trade-system and its traders were less sophisticated? And to what extend
does it imply that its long-term trade would yield less grand profit and create less

89
Some authors at the moment even go as far as to claim that Qing China in the seventeenth and
eighteenth centuries would have been the centre of global trade. See for this thesis - and what I regard as its
refutation - my Zur politischen Ökonomie des Tees. Was uns Tee über die englische und chinesische Wirtschaft
der Frühen Neuzeit sagen kann, Wien, Köln, Weimar 2009, 62-78.
90
Here I only refer to CMEC II, 111.
91
CMEC I, 26; CMEC II, 110-111, and 426-428.
92
CMEC III, 417.
 19

potential for innovation?93 Anyone who asks these questions cannot ignore the
fact that the balance of Europe’s trade with the East over most of the early
modern period showed a clear deficit. A large part of the precious metals that
Europe brought back from America disappeared in the direction of Asia. There
was nothing else that the Europeans could offer the highly developed East in
return for goods such as porcelain, silk, cotton, or tea. Braudel is aware of this and
gives it a positive twist by arguing that it enabled Europe - which in his view was
still lagging behind in the field of production - to gain access to Asian markets. It
did so by acting as a middleman in the so-called ‘country trade’. That however,
still leaves the fact that, when measured in terms of bullion flows, Europe had a
trade deficit.94 It had to wait until the nineteenth century before it could really
break open the doors to the big Asian markets. It often did so literally, that is by
using or threatening violence. Both the nature and the extent of the trade between
the continents changed. Europe began to develop a clear trade surplus and
succeeded in also selling certain manufactured goods on the Asian market.
If the non-West was more ‘capitalist’ than Braudel wants to admit, in the sense
that its long-distance trade was quite sophisticated and substantial, could the
differences in socio-political structure between Asia and Europe not also have
been smaller and fewer in number than he claimed? We already mentioned the
importance he attached to ‘the European city’. Were cities in Europe really that
different? Were they the only cities that were part of a hierarchical network? It
seems to me that Braudel exaggerates the differences or rather their impact. It is
probably true that ‘the European city’ had a different character than the cities
outside Europe. But what this concretely meant for the economic development of
Europe, and in particular for its industrialization, remains somewhat vague in the
many stories about “l’originalité des villes d’Occident”.95
When we look at urbanization, scholars have found this was quite substantial in
China during the Song Dynasty (907-1276), more substantial to be honest than
later on under the Ming (1368-1644) and in particular the Qing (1644-1911)
dynasties. In Japan, which in this respect again seems to be very similar to
Europe, the scale of urbanization in the seventeenth and eighteenth centuries was
higher rather than lower than in Western Europe.96 One could debate whether
93
There are numerous examples of extremely rich Asian merchants. For some of them I refer to Gang
(Kent) Deng, The foreign staple trade of China in the pre-modern era, in: The International History Review XIX
(1997), S. 253-304: Albert Feuerwerker, China’s early industrialization. Sheng Hsuan-Huai (1844-1916) and
mandarin enterprise, Cambridge Mass. 1958, S. 50-51; Immanuel C.Y. Hsü, The rise of modern China, New
York 62000, 71, and Jürgen Osterhammel, China und die Weltgemeinschaft. Vom 18. Jahrhundert bis in unsere
Zeit, München 1989, 75.
94
Braudel, Expansion européenne et capitalisme, 306-309, and CMEC II, 170-171.
95
CMEC I, 449-462.
96
See for information with regard to China and Japan in this respect Elvin, The pattern of the Chinese
past, S. 175-178; Jürgen Osterhammel, China und die Weltgesellschaft, 33-40, and Gilbert Rozman, East Asian
urbanization in the nineteenth century. Comparisons with Europe, in: Ad van der Woude, Akira Hayami and Jan
de Vries (eds.), Urbanization in history, Oxford 1990, 61-73.
 20

China was a single, integrated, hierarchically structured market. I would tend to

claim it was not. But was the situation really that different in Europe, even if we
confine ourselves to capitalist Europe?97 And if Braudel’s claim with regard to
China as a whole would be correct, then there still is the claim of William Skinner
that, what he calls China’s ‘macro-regions’, each of them bigger than most
European countries, were integrated, hierarchically-structured markets.98 In
addition, large parts of China’s coastal regions had many overseas contacts.
Europeans easily forget how small Europe is, and how big China, India or the
Ottoman Empire are. When we speak of ‘parts’ of China at the time, we are often
dealing with areas that had more inhabitants than all the ‘capitalist’ regions in
Europe combined. It is unfortunate that in his more imprudent moments Braudel
likes to speak about ‘the West’ or ‘Europe’ on the one hand, and ‘Asia’, ‘China’,
‘India’ and other polities on the other. In Europe too, notwithstanding the great
importance of state support, capitalism was a regional affair, just as, for example,
the agricultural or the industrial revolution. The differences between countries,
and even between regions, were often enormous.99 If Braudel had systematically
compared coastal regions with coastal regions and the interior with the interior in
his analyses of Asia and Europe he would undoubtedly have been less inclined to
make quite sweeping statements about big differences.
With his remarks about the non-European state - read: the state in Asia - Braudel
clearly still sides with those who think in terms of ‘oriental despotism’. For the
case of China, to confine us to the Asian country that is the most discussed in
current debates in global economic history, that view no longer has any serious
defenders. Actually, it was already quite dated when Braudel published his
trilogy.100 The role of the state in explaining the rise of the West is still debated,
although I have the impression that, alas, it has become less prominent. The
nature of the difference between ‘Western’ and ‘Eastern’ states - insofar as this
simple dichotomy makes any sense, which it hardly does - tends to be interpreted
differently off late. The main problems with ‘Asian states’ in the period Braudel is
97
For a comparative analysis see, for example, Carol H. Shiue and Wolfgang Keller, Markets in China
and Europe on the eve of the Industrial Revolution, in: American Economic Review 97, 4 (2007) 1189-1216. For
the situation in China the article by Yeh-chien Wang, Secular trends of rice prices in the Yangzi delta, 1638-
1935, in: Thomas G. Rawski and Lilian M. Li (eds.), Chinese history in economic perspective, Berkeley, Los
Angeles and Oxford 1992, 35-68, still is informative.
98
Skinner presented his ideas on China’s macro-regions and their periodic market-systems in several
publications. I advise the interested reader to look those up on Google Scholar under G. William Skinner. A first
brief introduction and critique can be found in Lloyd E. Eastman, Family, fields and ancestors. Constancy and
change in China’s social and economic history, 1550-1949, New York 1988, 115-123.
99
See for instance Paul Bairoch, Victoires et déboires. Histoire économique et sociale du monde du XVIe
siècle à nos jours, Paris 1997, 3 Bde., Bd. I, 389-445, for differences in the level of industrialization between
countries in Europa, and Sidney Pollard, Peaceful conquest. The industrialization of Europe 1760-1860, Oxford
1981, for differences between various regions.
100
For a very critical analysis of Braudel’s ideas on China see Mark Elvin, Braudel and China, in: John
Marino (ed.), History and the social sciences in Braudel’s Mediterranean: sixteenth-century essays and studies.
Sixteenth Century Journal (Truman State University Press 2002) 225-253.
 21

normally dealing with are no longer described in terms of the ‘despotic’ nature of
their governments, but rather in terms of their ‘lethargy’, negligence, weakness
and relative absence.101 These would have been states with governments that did
not do as much as their Western counterparts to promote economic development
and growth. In fact they often were unable to do much in that respect. In cases
where economic changes could cause major social changes and unrest they even
opposed them. Government tended to be very weak at the grass-roots level and to
have little or no support among the major economic players in the country.
It might be helpful in this context to differentiate between various dimensions of
state power and in that respect follow Linda Weiss and John Hobson.102 The
main difference they make is that between ‘despotic power’ on the one hand and
‘infrastructural’ or ‘organic power’ on the other. These distinctions are not
theirs. They have been introduced by Michael Mann, who uses the concepts
‘infrastructural’ and ‘despotic’ power, and John Hall, who writes about ‘organic’
state power.103 Despotic power concerns the range of actions which rulers can
undertake without resorting to routine, institutionalised negotiation with civil
society groups. It basically concerns the extent to which rulers can do as they
please with their subjects. This type of power should be distinguished from
‘infrastructural’ or ‘organic power’, which can be defined as the capacity of
rulers to actually penetrate civil society and to implement political decisions
logistically throughout the realm. We are talking about two quite different kinds
of power that tend to stand in an inverse relationship to each other: as a rule a
state with strong despotic powers have been infrastructurally weak and vice
versa.104 Comparatively speaking, Eastern states, again with the exception of
Japan, tended to be despotically strong and infrastructurally weak, Western
states the other way around.
The idea that ‘oriental’ governments would have been top-heavy and extremely
exploitative has been toned down and nuanced, which of course was long overdue
as differences between, for example, China, India and the Ottoman Empire in
many respects were enormous. Recent research has shown that, what we might, in
various respects quite anachronistically, call Asia’s bureaucracies, were

101
For the expression ‘lethargic state’ see Jones, Growth recurring, chapter 8. For a general, comparative
overview I refer to my Governing growth: a comparative analysis of the role of the state in the rise of the West,
in: Journal of World History 13 (2002) 67-138.
102
See their States and economic development. A comparative historical analysis, Cambridge and Oxford
1995, 6-8.
103
Michael Mann, The autonomous power of the state: its origins, mechanisms and results, in: John Hall
(ed.), States in history, Oxford and Cambridge Mass. 1986, 109-136; ders., The sources of social power. 2 Bde,
Cambridge 1986 and 1993, passim, and John A. Hall, Powers & liberties. The causes and consequences of the
Rise of the West, Harmondsworth 1985, 133-144.
104
Michael Mann, The autonomous power of the state, 113. Mann has not convinced everyone with his
theories about the sources of social power that he unfolded in his two big volumes. See for a critical analysis of
his ideas in which he himself participates, John A. Hall and Ralph Schroeder (eds.), An anatomy of power. The
social theory of Michael Mann, Cambridge 2006.
 22

significantly smaller and weaker than is often suggested. It has also become clear
that Asian governments imposed fewer burdens than has usually been assumed.
Let me as example refer to the situation in China. Its notorious civil service
counted only some 20,000 public officials in the eighteenth century.105 This was a
century that saw population increase from approximately 200 million to around
300 million. Several authors point out that already during the Ming dynasty but in
particular later on under its Qing successors from halfway the eighteenth century
onwards, China’s government had little - not to say too little - revenue from taxes,
although it was a time of considerable growth and prosperity. In addition, the tax
proceeds showed a tendency to decrease compared to the national income. Instead
of strengthening their grip, the central authorities lost power and income to local
elites.106 Let me give just one other example. According to foreign visitors, in the
eighteenth century taxes to a total of twenty million pounds sterling were levied
for the central government of the Ottoman Empire, of which only four million
pounds would end up in the government’s coffers. In 1789 the tax revenue of the
central government in this empire amounted to 2.25 million pounds sterling, in
the United Kingdom to 16.8 million pounds sterling, and in France to 24 million
pounds sterling. At that time the Ottoman Empire had an estimated population of
20 million; the populations in Great Britain (England, Wales, Scotland and
Ireland) and France were around 9.5 and 29 million, respectively.107 I confine
myself here to these rather anecdotic remarks and refer the interested reader to my
article on the role of the state in the rise of the West with a very extensive list of
literature and to my comparative analysis of Britain’s and China’s states in the
early modern era.108 I only want to point out here that Braudel’s idea of states
outside Europe placing heavy burdens on their subjects just as the idea that rulers
always were despots who ruled arbitrarily should at the very least be put into
perspective, further elucidated and nuanced.
When it comes to the other side of the equation, that is the states of capitalist
Europe, it is striking that Braudel does, I think rightly, emphasize their
fundamental importance for the development of capitalism without, however,
going into much detail what exactly the role of these states was and how they
differed from states in places where capitalism did not develop. I already briefly
referred to the role of Western states as providers of monopolies and protection
and as wielders of major violence. Current research into the nature of the ‘fiscal-
military state’ of ‘mercantilism’ – and much if not most of what Braudel refers
to in his analysis of capitalism used to be subsumed under ‘mercantilism’! – has

105
Osterhammel, China und die Weltwirtschaft, 69-85.
106
For a very extensive analysis see my forthcoming A world of surprising differences: state and economy
in early modern Western Europe and China.
107
Suraya Faroqhi et al., An economic and social history of the Ottoman Empire. Volume Two, 1600-1914,
Cambridge 1997, 714.
108
See notes 101 and 106.
 23

shown how fundamentally different Western states were from states elsewhere
in the world. Whether we look at the level and nature of taxation, the
(non)existence of national debts and national banks, economic, financial and
monetary policies, the professionalization of bureaucracy and army, policies of
empire-building, the embedding of the state in society and so on and so forth:
differences between Asia and Europe are enormous and increasing.
Let me again give a couple of examples, in this case with regard to (Great)
Britain at the end of the eighteenth century, to illustrate my point. China will
figure as contrast. British taxes at that time, not only were the highest Europe:
They also were much higher than in China, as a percentage of GDP and in real
terms. Even so the country incurred an enormous public debt, whereas China’s
government always was in the black up until the 1850s. There was no equivalent
to the Bank of England and the Bank of Scotland in China. Neither was there a
policy of economic nationalism comparable to Britain’s staunch mercantilism.
Britain’s civil service at the time numbered at least some 16,000 people, most of
them employed in collecting taxes and highly professional.109 Braudel himself
mentions a number of 12,000 civil servants in France at the time of Louis XIV,
and 70,000 for the whole of the Spanish Empire during the reign of Philip IV.110
Per inhabitant that is far more than in China. Relatively speaking Britain’s army
was much bigger – and more professional - than that of China, not to mention its
Royal Navy. China at the time did not have a navy to speak off. Britain was
building an enormous overseas empire that was supposed to serve its economic
needs. China did nothing of the sort. I did expand its territory over land quite
substantially but the conquered regions were never turned into economic
peripheries. The Chinese state continued to be a very tin veneer over China’s
society that did not mobilise the population and did not want to. Britain already
knew strong patriotic sentiments and could definitely already be called a nation.
We are talking here about differences in the entire set-up of states, not just in the
relations between merchant-elites and central government.111
109
The tax burden expressed as a percentage of GDP in capitalist England in 1788 was twice as high as in
France, usually considered to be a much less capitalist country. See e.g. Peter Mathias and Patrick K. O’Brien,
Taxation in Britain and France, 1715-1810. A comparison of the social and economic incidence of taxes
collected for central government, in: Journal of European Economic History 5 (1976) 601-650. For Britain’s
bureaucracy see e.g. Thomas Ertman, Birth of the Leviathan. Building states and regimes in medieval and early
modern Europe, Cambridge 1997, 12, footnote 25 and page 14, footnote 33, and Weiss and Hobson, States and
economic development, 42-49.
110
CMEC II, 490.
111
For a general, comparative overview I again refer to my ‘Governing growth’. For an in-dept analysis of
the striking differences in this respect between Britain and China see my A world of striking differences,
forthcoming. Two recent books on the fiscal-military state with ample references are Christopher Storrs (ed.),
The fiscal-military state in eighteenth-century Europe. Essays in honour of P.G.M. Dickson, Farnham and
Burlington 2009 and Rafael Torres Sánchez (ed.), War, state and development. Fiscal-military states in the
eighteenth century, Pamplona 2007. For recent literature about mercantilism, in this case in Britain, where of
course its (assumed) connections to further economic development and industrialization are most salient, see
William Ashworth, Customs and excise. Trade, production and consumption in England, 1640-1845, Oxford
 24

*****

Whichever way one looks at it, time and again one will run up against the same
question: even if capitalism as defined by Braudel was present in the West and
not in the rest of the world, what did this mean for the large gap that began to
separate the two in the nineteenth century? Is studying capitalism as Braudel
defines it really the most appropriate way to understand how the West could take
an economical head start on all other parts of the world? In brief: What is the
relation between Braudel’s capitalism and the Great Divergence? In the context
of an article this question can of course not be dealt with exhaustively. I will
confine myself to brief comments with regard to two topics: the amount of
income generated in international, and in particular international capitalist trade,
and its spin-off. What difference did capitalism make for early modern Europe in
terms of its income and its economic potential and to what extent can it be said to
have been instrumental in the emergence of the Great Divergence?
In this context one can, of course, always argue about the how much income
generated in long-distance trade would be ‘much’. We are touching here upon
one of the major debates in global economic history at the moment: that on early
modern economic globalisation and its impact. The total amount of money
involved in intercontinental trade as compared to GDP cannot have been high as
Braudel clearly is aware. As we already indicated, he himself emphatically points
out that in the period preceding the Industrial Revolution, Europe was not
(significantly) richer than the regions outside Europe that, according to him, were
non-capitalist.112 The many differences in their political economies in any case
did not create much of a gap in wealth between Western Europe and East Asia
before the West started to industrialise. It could hardly be otherwise as both
regions up until that moment still had organic economies that, whatever the
prevailing political system, were always bound to hit the ceiling of their
economic possibilities quite quickly.
As total turnover of capitalists in the end was rather limited, it is obvious that in
relation to total national incomes the profits that accrued to them cannot have
been very substantial either.113 Profits in that sector were not really ‘supernormal’
as Braudel claims. Of course, examples of enormous returns can easily be found,

2003; Patrick Karl O’Brien, Inseparable connections: trade, economy, fiscal state, and the expansion of empire,
1688-1815, in: P.J. Marshall (ed.), The Oxford History of the British Empire. Volume II, The eighteenth century,
Oxford and New York 1998, 53-77, and David Ormrod, The rise of commercial empires. England and the
Netherlands in the age of mercantilism, 1650-1770, Cambridge 2003.
112
CMEC II, 110-111.
113
CMEC II, 183, 185-193, 356-359 and 401, and Braudel, Expansion européenne et capitalisme, 285.
 25

as might be expected in a trade that in the end continued to be risky. But high
profits alternated with serious losses and the trend was rather downwards.114
From a strictly quantitative perspective at least, I think Braudel’s focus on
capitalism is exaggerated. In my opinion the thesis advanced by Patrick O’Brien
in the early 1980s that in strictly quantitative terms the importance of
intercontinental trade for capitalist Western Europe as a whole continued to be
rather marginal, in essence still is correct.115
But that of course does not per se imply that this trade would be unimportant.
Braudel likes to see capitalism as a stimulant, a driving force, a spearhead and so
on.116 He attaches great importance to the fact that capitalists, as a small group
of businessmen, would amass huge amounts of money. That means that they
disposed of concentrated wealth they might in turn invest. That of course is of
fundamental importance to economic development and growth. The relevant
thing to ask would then to be how exactly capitalists made their money and in
what they invested it. When it comes to the how we can be brief: If we are to
believe Braudel, profits were overwhelmingly made in all sorts of financial
dealings and by taking advantage of and manipulating existing price differences,
not by creating such differences through direct interference in production.
Capitalists, so he suggests, would tend to stay aloof from the sphere of
production: “Il n’y aura invasion par le capitalisme des secteurs de la production
qu’au moment de la Révolution Industrielle…”117 At various places he even
indicates that the most important change in production, the series of
transformations that became known as ‘the Industrial Revolution’, basically was
not connected to capitalism at all: “Prenez le cas de la Révolution Industrielle.
C’est un phénomène qui ne se produit pas tout en haut de l’économie, mais
assez bas et même quelque fois très bas. La révolution textile s’organise presque
d’elle-même, s’autofinance et ce n’est que vers 1830 que le capitalisme
londonien mettra la main sur l’industrie textile.“118

114
For examples see the article by O’Brien on European industrialization and the articles by De Vries
referred to in note 62. For information that specifically deals with the slave trade, often regarded as a sector with
very high profits see Olivier Pétré-Grenouilleau, Les traites négrières. Essai d’histoire globale, Paris 2004,
chapter 6.
115
Let me just refer to a couple of articles that to my view present a convincing description and
interpretation. To begin with there is the seminal article by Patrick O’Brien, European economic development.
The contribution of the periphery, in: Economic History Review 35,1 (1982) 1-18. Later on O’Brien has
substantially qualified the thesis as he presented it there, without, however, rejecting its basic tenor. See e.g. his,
European industrialization: from the voyages of discovery to the Industrial Revolution, in: H. Pohl (ed.), The
European discovery of the world and its economic effects on pre-industrial society, 1500-1800, Stuttgart 1990,
154-177, and Patrick K. O’Brien and Leandro Prados de la Escosura (eds.), The costs and benefits of European
imperialism from the conquest of Ceuta, 1415, to the Treaty of Lusaka, 1974. Proceedings of the Twelfth
Economic History Congress Madrid 1998(=Revista de Historia Económica 16, first issue of 1998). Very
informative in this respect are the two articles by Jan de Vries that I referred to in note 62.
116
Very explicitly, CMEC I, 387. See also CMEC II, 356-357 and 401, and Braudel, Leçon d’histoire, 146.
117
CMEC II, 327.
118
Braudel, Leçon d’histoire, 138-139. See further CMEC II, 259-263 for some comments concerning the
 26

Let us begin with an analysis of the relation between capitalism and production
in general. The chapter that Braudel devotes to this relation is ominously called
“La production ou le capitalism chez les autres.”119 To really bring home the
point that he does not consider the connection between the two as very fertile, he
concludes the chapter with some comments under the heading: “Un bilan plutôt
negatif”.120 If ‘the world of capital’ indeed was so neatly separated from ‘the
world of production’ as Braudel likes to suggest, one may very well wonder
what exactly the wider importance of his capitalism can have been. Fortunately
Braudel, apparently against his own intention, shows that the interpenetration of
production and capital in fact was much more substantial than he claims and
wants to admit. He may definitely have a point that mercantile capitalists may
have been reticent to really lock up their capital in the sphere of production and
indeed tried to keep their options open. The very wealthiest amongst them may
indeed have kept aloof from any kind of productive activities. Braudel may also
have a point in claiming that a ‘capitalist’ would only show interest in
production when necessity or trading profits made that advisable, and only
engage in production in function of what he really was: “l’homme de marché, de
la bourse, des réseaux, des longues chaînes de l’échange.” In brief: he would
only intervene in production “…(E)n function de la distribution, qui est alors le
vrai secteur du profit”.121
All this boils down to the thesis that merchants would not have committed
themselves wholeheartedly and entirely to production and would withdraw from
it when the saw fit. But is that really relevant for the macro-historical question at
hand? What, to my view really counts, is not so much the reasons merchants
may have had for (not) getting involved in production but what they in the end
actually did. Looking at their behaviour one can only conclude that in the early
modern era there are numerous examples of investments and interventions by
merchants in production. One can find several examples in Braudel’s work. The
most striking example would be the creation ex nihilo of plantation economies
where slaves provided labour. Mining would also be a good example. The most
important example, in terms of the number of people involved, would be all
those forms of mercantile intervention in production that can be summoned
under the label of ‘putting out’. Merchants all over Europe provided hundreds of
thousands of people with employment in that way. In all these cases the sphere
of production was fundamentally influenced by ‘capital’ whatever the intentions
of the capitalist and whatever the duration of his intervention.122 Strangely

relation between proto-industry and industry.

119
CMEC II.
120
CMEC II 327-328.
121
Ibidem.
122
In that respect people wanting to understand West-European mercantile capitalism should definitely,
next to Braudel, read Jan Luiten van Zanden, The rise and decline of Holland’s economy. Merchant capitalism
 27

enough, I find myself defending Braudel against himself. To separate capital so

strongly from production by focusing almost exclusively one ‘the top of the top’
really is an exaggeration that isolates merchant money far too much from what
is going on in production and also makes it unclear what could have been so
important about it.
The impact of international trade and related activities of course can not be simply
equated to the amounts of money that were involved and that might be invested in
various sectors of the economy. They may have been all sorts of spin-off effects.
The import and export of all sorts of commodities may have had an impact on
domestic production. Scholars in this respect are quite divided, with opinions
diverging from those who like Frank and Gills123 claim global trade already
created an international division of labour a couple of thousands of years ago to
scholars who claim that the amounts and characteristics of the commodities that
were traded between various continents were not such that they clearly impacted
upon production at home: Although this last claim by Williamson and O’Rourke
definitely is too extreme, the gist of their thesis that these exchanges did not
create integrated markets for basic commodities and did not lead to major changes
in the productive sector of the Western countries involved up until the nineteenth
century, as I see it, still stands.124
From that perspective the mercantile variety of capitalism that Braudel
continually presents as an advanced form of capitalism might also be seen as an
indicator of underdevelopment. If Braudel’s capitalists made any mega-profits
they, as a rule, were the outcome of the fact that there were no solidly integrated
and efficient markets in the sectors where they operated. Their ‘tricks’ such as
setting up companies that are supported and protected by the state against the
market might be explained by the fact that trading without such support and
protection would simply be too risky. In addition, the same sectors that Braudel
lists as the zenith of capitalism - finance and long-distance trade - are often the
ones whose importance will grow in societies that are losing their position of

and the labour market, Manchester 1993. This book was originally published in Dutch in 1991.
123
See e.g. Andre Gunder Frank and Barry Gills (eds.), The world system: five hundred years or five
thousand?, London 1993.
124
See for this thesis and some of the responses to it, Jeffrey Williamson and Kevin O’Rourke, When did
globalisation begin?, in: European Review of Economic History 6 (2002) 23-50, and the follow-up to that text,
in: European Review of Economic History 8 (2004) 109-117. Compare their, After Columbus: explaining
Europe’s overseas trade boom, 1500-1800, in: Journal of Economic History 62, 2 (2002) 417-456. For reactions
see Dennis O. Flynn and Arturo Giráldez, Path dependency, time lags and the birth of globalisation: a critique of
O’Rourke and Williamson, in: European Review of Economic History 8 (2004) 81-108 and the first article from
Jan de Vries referred to in note 62. Williamson and O’Rourke do not discuss bullion and slaves in their analyses
and seriously underestimate the effects of the import of e.g. sugar, coffee, tea, tobacco, cotton or porcelain on
domestic consumption and production. Their claim that these would be non-competitve luxury goods clearly needs
to be nucanced. But in the end they are right, most of domestic production was hardly touched by the existence of
intercontinental exchange. To a large extent because up until the end of the eighteenth century, Western Europe
hardly exported anything else but bullion to the biggest non-European economy i.e. Asia.
 28

economic primacy.125
A closer analysis of Braudel’s view on the connection between capitalism and
industrialisation, does not lead to a very clear and unequivocal conclusion. What
is clear is that Braudel does not want to hear of a direct i.e. causal relationship
between mercantile and industrial capitalism. In Britain, to only refer to the first
industrial nation, there was not much personal continuity according to him. It
was not the same people who took the lead in commercial capitalism and
industrial capitalism. The first industrialists often came from a different stratum
of society than the old commercial capitalists.126 There was not much financial
continuity either: New industries were by no means always financed by
commercial capital.127 Nor does he want to present the industrial revolution as a
direct result of autonomous technical progress.128 As indicated, in his view there
is a certain continuity: The essence of capitalism stays the same, before, during
and after industrialisation: What did change was its size as compared to other
sectors of economic life.129 When it comes to the actual connection, he rather
thinks in terms of an indirect relationship suggesting that his capitalism was a
necessary condition for successful industrialization. In his Civilisation matérielle,
économie et capitalisme he asks the following rhetorical question: “En d’autres
termes, une révolution industrielle n’est-elle possible qu’au coeur d’une
économie-monde ouverte?”130 In his contribution to L’Europe he is more explicit.
During the Middle Ages, so he claims, the so-called ‘first industrial revolution’ in
Europe did not cause a real breakthrough. In his view that was because the trade-
flows in which Europe participated were too small. The ‘second’ industrial
revolution - the real one, in the eighteenth century - did lead to a breakthrough
because world trade expanded strongly and Europe, or rather England, had a
strong and growing share in it.131 Please note that this boils down to the claim that
Europe’s overseas trade, after all, was in fact sizeable and at the very least a
necessary precondition for Great Britain’s industrialisation.
Personally I take the view that the relationship between capitalism à la Braudel
and the industrial revolution, the main cause of the Great Divergence, is quite
complex and that what Braudel has to say about it in the end is rather vague. It
in any case is clear that the transition from mercantile capitalism to industrial
capitalism was not smooth - as we have indicated for the British case with its
lack of direct personal and financial continuities. It cannot be described in terms
of a general stage model in the sense that mercantile capitalism would be a

125
Charles Kindleberger, World economic primacy, 1500-1990, New York 1996, 210-228.
126
Braudel, A propos des origines sociales du capitalisme, 365 and CMEC I, 491.
127
Caillé, L’emprise du marché, 130-132.
128
Braudel, Leçon d’histoire, 125.
129
See for example CMEC II, 204.
130
CMEC III, 470.
131
Braudel, Europe, 132. See idem., Dynamique du capitalisme, 113-114.
 29

sufficient or necessary precondition for industrialization. In the Dutch Republic,

which was definitely more capitalist than Great Britain in the seventeenth, and
probably even still in the eighteenth century, industrialization did not ‘take off’
until about a century after England. Northern Italy, a pioneer of mercantile
capitalism, was a relative latecomer to industrialization. In the sixteenth century,
Portugal was a country with a substantial global impact. It only started to
industrialize after World War II.
Mercantile capitalism was not even a necessary condition for industrialization.
There are several examples of regions that were not exactly known as centres of
mercantile capitalism in the eighteenth and nineteenth centuries but which quickly
industrialized. Think of Belgium and Switzerland, Europe’s most highly
industrialized countries after Great Britain in the first half of the nineteenth
century. The industrialization of France and, even more so, Germany, also cannot
be linked to an advanced mercantile capitalism.132 The same goes for the United
States, which already in 1913 was the world’s most industrialized nation. The
emergence of the Asian Tigers after World War II shows that industry, economic
growth, and capitalism, can also thrive in societies that are very different from
those in the West. In short, industrialization did also take place in countries that
lacked a clear pre-history of mercantile capitalism.
In my view the main impact of Braudel’s capitalism resides in the fact that it was
a source of major institutional innovations, especially in the sphere of finance
where the fundamental symbiosis of Power and Profit, i.e. state and capital, that is
central to Braudel’s point of view shows most clearly, e.g. in the way chartered
companies were set up and functioned, in the creation of tax systems and the
management of public debts.133 These innovations and others like the further
development of stock exchanges, (central) banking and monetary and financial
instruments may not have had a direct and immediate major impact on
production, but in my view it would be hard to deny that in the end
industrialisation would prove to be impossible without them. Countries that tried
to catch up all had to follow suit in this respect. Industrialisation clearly is not just
a matter of steam and factories. Personally, I would have really applauded more
explicit attention to the exact role of capitalist institutions in overall economic
development and growth. Considering the fact that Braudel himself so
emphatically points at the very close connection between capitalism and the state
and considering the fact that there is such a wide-ranging debate on the role of the
state in economic development, one can only regret that as so often he has a
perfect hunch for interesting subjects and connections but does not really exert

132
For an overview of the developments in the countries I refer to, see Bairoch, Victoires et déboires I,
389-445, in particular the very informative table on page 404.
133
In this context I would also want to point at the fact that taxes on products like sugar, tea, coffee or
tobacco could become very important sources of government income in several European countries.
 30

himself in trying to systematically and analytically deal with them.134 To my view

the political economy that had emerged in the West already before
industrialization enabled it to far more easily and far more efficiently profit from
the technological and energetic changes we associate with industrialisation. I
would claim that this distinct political economy and Braudel’s capitalism in
many respects were tightly interwoven.
My comments therefore - and I really want to emphasize this - are not meant to
belittle the importance of mercantile capitalism for economic development and
economic growth in the Western world, far from. I basically want to press two
claims. The first one is that industrialization in the confined sense of the rise of
industrial production and all that tends to be associated with it, is of quintessential
importance for understanding the rise of the West and the emergence of a great
economic divergence between ‘the West’ and ‘the Rest’. It is only with the
emergence of industrial production that the West developed its potential to
become the richest part of the world by far.135 Its emergence, as I already
indicated, often was only tangentially related to Braudel’s capitalism. In that
sense Braudel really exaggerates its importance and in that sense I am critical of
his approach. On the other hand though, there is the undeniable fact that there is
more to economic development and growth than just industry. Even in the first
industrial nation, Great Britain, some might even say, especially in Great Britain,
economic development and growth in the nineteenth century to a very large
extend and after the 1850s even increasingly depended on what occurred in the
commercial and financial sectors of the economy i.e. the sectors Braudel likes to
focus upon. The first industrial nation of the world also was the first i.e. the
biggest service nation of the world, earning enormous sums of money in shipping,
finances, insurance and the like.136 That was already the case before
industrialization really took-off. The last thing I would want to do is tone down
the enormous and increasing importance of the service sector, of course including
those specific sectors Braudel discusses, for modern economies. On the contrary,
I think the importance of this sector, as a whole, still is somewhat underestimated
in economic history in comparison to agriculture and manufacturing.

*****

134
For an impression of what might be done in this context I refer the reader to Niall Ferguson, The cash
nexus. Money and power in the World, 1700-2000, London 2001 and ders., The ascent of money. A financial
history of the World, New York 2008.
135
In that respect I endorse the view of scholars of the California School like Pomeranz and Goldstone.
136
In that respect I endorse the thesis defended in P.J. Cain and A.G. Hopkins, British imperialism, 1688-
2000, Harlow and London 22001 that has a strong Braudellian flavour.
 31

I think one can only conclude that Braudel is inclined to overestimate the
importance of ‘mercantile capitalism’ in his explanation of the economic
difference between the West and the rest. In his very strict definition that would
confine capitalism to a very small and quite isolated top segment of economic
life, it was less important in and for Europe than he claims, whereas outside
Europe its core i.e. sophisticated and profitable long-distance trade was by no
means absent. A gap between ‘the West’ and ‘the Rest’ only emerged with the
Industrial Revolution. That was a real break with the past and the beginning of a
fundamental breakthrough in Western economic history that enabled ‘the West’ to
leave ‘the Rest’ far behind in terms of economic wealth and growth. It definitely
is the main cause of the economic Great Divergence, Braudel’s “... problème
essentiel de l’histoire du monde moderne.”137 To suggest as Braudel does that
Europe would somehow have ‘dominated’ the world for the last ten centuries
must be a slip of the pen. Capitalism à la Braudel did not play a very substantial
and direct role in the emergence of the industrial world. Its importance lies
elsewhere. The relationship between capitalism and industrialization is ‘casual
rather than causal’, to quote Wrigley’s apt phrase.138 The changes in technology
and in the sources of energy and materials that were so important in
industrialization were only very indirectly linked to what went on in ‘mercantile
capitalism’. Again, actually Braudel knows. When he tries to explain the
Industrial Revolution in Great Britain, he does this in a very balanced manner,
and with much less emphasis on capitalism than his programmatic statements
imply. In fact, central to his specific argument in this respect is the
interdependence of all sectors of society, and he makes much of the developments
in agriculture and industry, which here are clearly placed in the context of
international trade.139

*****

If I were to look for the causes of the Great Divergence, as Braudel in the end
claimed he was doing, I would focus less exclusively on ‘capitalism’ than he did
and try to focus as much on what connects the three layers of economic life that
he - with good reasons – distinguishes, as on what separates them. What in the
end is lacking is a synthesis, a coherent picture. Apart from that, I would pay
more attention to politics and military affairs, and to technology and science. In

137
CMEC II, 111.
138
E.A. Wrigley, Continuity, change and change: the character of the industrial revolution in England,
Cambridge 1988, 115. Wrigley discusses the situation in England, but his claim seems to apply even more to the
rest of the world.
139
CMEC III, chapter 6.
 32

his approach of the economic history of the early modern era, Braudel clearly did
not proceed from a tabula rasa: He stressed certain aspects of the past and tended
to privilege certain perspectives. This is not unconnected to his ‘philosophy of
history’. I would like to conclude my article with some comments on the impact
of that philosophy.
Probably more than anyone else Braudel has fought against what he calls
‘l’histoire événementielle’ a style of history writing that he almost automatically
and exclusively identified with the history of politics and warfare. It therefore
comes as no real surprise that these topics get rather short shrift in most of his
analyses of capitalism too. That has unwarranted consequences: politics and war
were no mere ‘events’ in the period he analyses – if the ever are! - but structural
ingredients of societal life that determined the limits of the possible and the
impossible just as much as ecology or demography. The claim by Braudel that the
importance of technology in explaining the Great Divergence has always been
exaggerated fits in less neatly into his general view on history.140 It in any case
was already somewhat surprising at the time when it was made and now sounds
fairly dated. In recent work on the topic by scholars as diverse as David Landes,
Joel Mokyr and Jack Goldstone, technology holds centre stage. The last author,
together with, for example, Floris Cohen also puts a big emphasis on the
importance of science, a subject that Braudel ignores almost completely in all his
analyses.141
The core of the Annales-philosophy as preached by Braudel has always been the
claim that historians can only understand the past if they chart the very long-term
historical structures that define the limits of the possible and the impossible and
then analyse and describe the interaction of those structures with two other time-
scales that Braudel distinguishes, the so-called ‘temps court’ always associated
with ‘les événements’ and the ‘histoire lentement rythmée’, the history of social
time or of ‘conjunctures’. According to many critics, all the profuse praise he
received notwithstanding, Braudel did not really manage to integrate the
descriptions and analyses of his three different ‘times’ in his book on the
Mediterranean world and, moreover, put too strong an emphasis on one of them,
to wit the very long term of ‘l’histoire quasi-immobile’.142 In his publications
dealing with early modern economic history Braudel as we have seen also departs
from the concept a ‘layered past’. In his Civilisation matérielle et capitalisme
from 1967 and in Volume I of his Civilisation matérielle, économie et

140
See CMEC III, 489: “S’íl est un facteur qui a perdu de son prestige, en tant que cheville ouvrière de la
Revolution industrielle, c’est la technique.”
141
For David Landes see note 54. For Joel Mokyr see his The enlightened economy. An economic history
of Britain 1700-1850, New Haven and London 2009. For Jack Goldstone and Floris Cohen see their articles in
Österreichische Zeitschrift für Geschichtswissenschaften 20, 2 (2009) and the references there.
142
The number of reviews of Braudel’s, La Méditerranée is enormous. For a first introduction I refer to the
references by Fernand Braudel on Wikepedia.
 33

capitalisme, basically the same text, we see that same focus on barely changing
structures. His descriptions of everyday life and its material civilization in these
texts in my view will prove to be the most innovative and lasting parts of his
entire oeuvre. There, however, again I think, is a price to pay in the sense that
Braudel apparently developed a tendency to associate ‘material civilization’ and
even the market and all the activities that take place there so exclusively with
‘quasi-immobility’ that he simply had to look for dynamism someplace else.
After having pointed repeatedly at the enormous importance of the history of
material civilization and elementary commerce that he regards as basically
immobile in roughly the first half of his trilogy, he then all but ignores them in the
rest of the text to focus on where according to him things change. Everyone
reading Volume II and III of his magnum opus on the economic history of the
world in the early modern era can see that the man who had become widely
known as the advocate of “l’histoire anonyme, profonde et souvent
silencieuse”143, actually has developed a clear fascination with ‘the city’ over ‘the
countryside’, with ‘trade’ over ‘production’ and with the tiny group of capitalist
individuals over anonymous masses and in that way tends to err in an opposite
direction than he did in his book on the Mediterranean. Whereas in that book the
emphasis may have been too much on certain structures, he here is in serious
danger of actually losing sight of them.
Overall one might doubt whether the type of longue–durée explanations that is so
close to Braudel’s heart are optimal when it comes to explaining specific complex
events such as the Industrial Revolution in Great Britain; in any case they are not
sufficient.144 There are good reasons for an approach to ‘the rise of the West’ in
which the role of structures is somewhat toned down and that of contingency is
given more attention. Braudel himself repeatedly claims that things could have
turned out very differently if, for example, in the fifteenth century the famous
Chinese admiral Zheng He could have continued his travels.145 One could easily
point at more of such ‘coincidences’ e.g. the outcome of the battle of Plassey that
give the British such a strong foothold in India or the fact that Napoleon did not
win his wars against Britain.
When it comes to that other critique with regard to his book on the Mediterranean
world, the suggestion that its author in the end did not manage to integrate the
different ‘times’ he discussed, a similar comment applies to his book on material
civilisation, economy and capitalism. In the preface of its first volume Braudel
indicates he wants to show the illuminating dialectic of the co-existence of the
layers of economic life he distinguishes. I am afraid he does not redeem his

143
I took this quote from Fernand Braudel, Écrits sur l’histoire, Paris 1969, 21.
144
The permanent references to capitalism as a phenomenon with a history of many centuries in my view
basically also are long-term explanations.
145
CMEC I, 357-359; Braudel, A propos des origines sociales du capitalisme, 371, and idem., Expansion
européenne et capitalisme, 304.
 34

pledge. What I see is basically a fissure between the two bottom layers and the
one top layer. Again Braudel’s descriptions of, and comments on the different
logics of those layers as such are fascinating and often very enlightening but as I
see it he never systematically connects what goes on in material life and the
market economy with what goes on in the sphere of capitalism. How these layers
impinge on each other to a very large extent remains wrapped in the dark.
Surprisingly enough, as we saw earlier on, Braudel himself, at times even quite
adamant, indicates that capitalism was a dynamic world on its own.
Whereas capitalism is presented as the primary if not the sole mover of economic
life, the rest of it tends to be represented in quite or rather too static terms. That in
particular is the case with agriculture: “En général, la production agricole, c’est le
domaine de l’inertie.”146 Even in England, so Braudel claims “… c’est le hasard
des bonnes récoltes en séries des années 1730-1750 qui a largement compté lors
du lancement économique de l’île.”147 Generally speaking Braudel may be right,
but even in sluggish agriculture we sometimes see a significant increase in
production and productivity. To a large extent this increase was ‘endogenous’, in
the sense of not in any way caused by what went on in sectors of the economy
that Braudel refers to as ‘capitalist’. Between 1500 and 1800, the total output of
the agricultural sector in the Dutch Republic approximately tripled, while the
number of people responsible for this production only increased by about a half,
and total population more than doubled, from 0.9 million to 2.1 million.
Agriculture was not inert, nor was it a sector that was shun by capital. While the
starting capital of the Dutch East India Company was 6.5 million guilders, urban
investors poured ten million guilders into diking and reclamation of land in the
West and North of the country in the first half of the seventeenth century alone.
Between 1632 and 1665 as much as five million guilders were put into laying and
improving canals in the west of the country. During those same three centuries,
the total production of the agricultural sector in England increased by roughly
three and a half times and the agricultural labour force by around two-thirds,
while the total population grew from 2.4 million to 8.6 million. Even in France, a
laggard in this respect, the situation was not static. In 1500 approximately 11.2
million French farmers fed a total of 15.5 million French people; in 1800, a total
of approximately 29 million French people were fed by approximately 17 million
French farmers.148
The above is just one indication of the fact that in early modern Europe different
modes of production were emerging. Fundamental changes were taking place in
the agricultural sector. There was a steep increase in the number of people who
where fully or partly dependent on wages, both within and outside the agricultural
146
CMEC II, 153. See also CMEC I, 11 and 495.
147
CMEC II,153.
148
E.A. Wrigley, Urban growth and agricultural change: England and the Continent in the early modern
period, in: Journal of Interdisciplinary History 15 (1985) 683-728.
 35

sector, in rural areas and in cities. A huge proto-industrial sector emerged,

offering work to hundreds of thousands of people. Cities grew in size and number.
The volume of production and trade increased strongly, as did monetary
transactions. In other words, Europe’s economic ancien régime was going
through major changes. It seems to me that most of those changes had far more
economic and social implications than the overseas trade Braudel’s likes to focus
upon. And, I would claim, a lot of them were in no way caused or even connected
to capitalism.

*****

Braudel clearly does not tackle the past as most modern economists would i.e.
with specific, quite circumscribed questions in mind and using technical jargon,
sophisticated, mostly quantitative methods, and models with a limited range of
variables. It may well be that in various respects he pays a price for that. His
analyses often leave much to be desired in depth, coherence and consistency. He
definitely is not, as the Germans would say, “ein strenger Wissenschaftler”. But in
the end, I think, we can only be grateful that Braudel did not become the ump-tied
economist applying his standard toolkit to the past. Braudel’s unmistakable and I
would claim almost unique strength lies elsewhere. His erudition and curiosity, as
well as his feeling for the important questions to ask and his attention to detail, are
impressive. His points of view very often are original, innovative and, in
principle, extremely fertile. He changed the way we look at old problems and
created new ones. My remarks should not detract from the fact that his
peregrinations in the land of economic history remain fascinating. My comments
with regard to the interaction between the three layers of economic life basically
are of the category “easier said than done”. Perhaps we are dealing here with a
problem that is unsolvable and that, what is more, was not even recognized as
such, before Braudel formulated it. Braudel gave us infinite food for thought. That
is what makes the greatness of a historian

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