Many people have theories about capitalism, its meaning, origin, and history, so I figured I might as well give mine. Capitalism is not just markets or the selling of something for a profit but a complete system. Actual existing capitalism that we now see in the world did not spring into existence in its current form, but went through several stages to reach the pinnacle we see today! The names for the first three stages of capitalism I’ve gotten from William Appleman William’s book the Contours of American History. Since the book was published I have identified two more stages of capitalism.
We have previously discussed neoliberalism, a world-view that became popular in the late Seventies. This is not a separate state of capitalism, as discussed below, but rather a profound appreciation of all the goodness of capitalism and how the principles of the market can be, and should be, applied to every human endeavor.
Capitalism is ruled by the planet Jupiter. Jupiter without any limiting factor will expand to fill the Universe. Capitalism needs to grow, to expand. And that is being seen as increasingly impossible. Capitalism has reached its limits. What will replace capitalism? We are so attached to the term “capitalism” that it could be something called “sustainable capitalism”, which, as Herman Daly suggested, is the ultimate oxymoron .
Capitalism started with the influx of gold and silver from the New World into the Old in the Sixteenth Century. This was the first stage of capitalism called Mercantile Capitalism. Suddenly Europe was awash with much more wealth than it had seen up to this time. The Black Death in the middle of the Fourteenth Century had eliminated about 50% of the population, leaving much land available. It took at least until the Sixteenth Century to recover. After this fabulous increase in wealth, the triangular trade of trinkets (called pacotille) to Africa in exchange for slaves, which were taken to the New World where they were sold and tobacco and sugar were brought back to Europe with a profit at all three ends of the triangle led to even more wealth in the Old World. This massive wealth lead to the development of a, from our perspective, primitive form of capitalism.
It is of course not possible to say for a specific instant that this is when a certain stage of capitalism started. There was no specific instant, there was no event. These stages of capitalism are trends. We can pick a moment in time when the trend of existing capitalism changed, when afterwards a different variant of capitalism emerged. Certain conditions in the world at large “caused” capitalism to be modified. These beginnings of trends took years to develop, but we can show a certain, long-lasting, astrological formation that indicates these ongoing trends and serves as a good marker of the changed state of capitalism. I’ve chosen what I think is a good indication of these astrological formations, but remember that even these formations of slower moving planets took many years to finish.
The indicator of this first stage of capitalism is vague, but I’m using the midpoint that occurred at the beginning of the Sixteenth Century, when exploration of the New World was just beginning. As was mentioned before, this was the Midpoint with Neptune at the apex that corresponds to the midpoint with Neptune coming up in another 10 years, almost 500 years after this one indicating the start of capitalism. The only other midpoint since involving the three outer planets that had Neptune at the apex was in the second half of the Eighteenth Century, but since this was a grand trine, all three planets took turns being the apex planet, and so this was a special case.
This leads in the Enlightenment – the Eighteen Century – and to classical economists such as David Ricardo, Thomas Malthus, James Mill (father of John Stuart) and Adam Smith, whose publication of The Wealth of Nations in 1776 marked a turning point in capitalism and led to the second stage of capitalism called Laissez Faire Nous by Williams. This is what I call the mythic stage of capitalism that everyone refers to when they sing the praises of capitalism and maintain that if we could only return to that stage everything would be good again. But capitalism has long since passed that stage.
This chart for this second stage of capitalism, Laissez Nous Faire (Let Us Be). Not only is Uranus conjunct Neptune, but that conjunctions are square Pluto (so all three outer planets are involved in the configuration) but the conjunction is at 0 Capricorn and Pluto is at 0 Aries, so we also have cardinal ingresses of three outer planets. A very important time. It was the start of traditional capitalism in the Western Word, as a result of, among other things, the publication of Adam Smith’s The Wealth of Nations in 1776. In America this is the start of the Transportation (canals, railroads), Communication (steam-driven presses, cheap books), and Market Revolutions (industrial revolution, more manufacturing). The Age of Jackson was soon to begin (Jackson was elected in 1828 but he though he should have been elected in 1824 which is when he began campaigning against the elected president JQ Adams, but the term indicates more than just the President, but rather a mindset of the United States, as discussed previously.) Notice also that this chart takes place at a Jupiter-Saturn conjunction, tradition though to be the start of a cycle.
Due to the Industrial Revolution, which was mainly funded be the wealth brought in by the triangular trade, and the growth of corporatism, especially in America, the Nineteenth Century saw the third stage of Capitalism, Corporate Capitalism. This was no longer the small Mom and Pop sized operation, but rather large entities that because of size could influence the behavior of governments. In America, there are many famous names that are associated with this stage, such as John D. Rockefeller and Andrew Carnegie, as well as many railroad barons, who became successful after the Civil War in the United States made heavy use of the railroads. The rise of industrial corporations after the Civil War in America was similar to the rise of the Military-Industrial Complex after the Second World War.
At the end of World War Two, which caused a major upheaval in the world’s economy, several Western powers met in the state of New Hampshire to consolidate the world economy and form such institutions as the World Bank and the International Monetary Fund. The agreements reached in Breton Woods controlled the world economy reasonably well for a quarter century, until the Vietnam War caused the United States, then the largest economic power in the world, to lose control of the situation.
But still leading corporations were mostly confined to an individual nation state. But with United States President Richard Nixon going off the gold standard and repudiation the Bretton Woods agreement from the end of World War II, in 1971, this was no longer the case. This led to the fourth stage of capitalism, Global Capitalism, with transnational corporations which influenced not just country-wide governments but international organizations a well.
The speech by Nixon was made August 15, 1971. The chart is drawn for October 5, 1971, when Pluto first came to 0 Libra. Jupiter is opposite Saturn instead of conjunct as it was in the previous chart. This was about 10 years after the previous conjunction and 10 years before the next conjunction. The ramifications of the moves made by Nixon and his advisers in the Summer of 1971 were great and are still being felt. These moves were the start of a process that led to the financial meltdown of the world economies that took place in 2008. Once US dollars were no longer pegged to the price of gold, money could be made by buying and selling money based on changes of the exchange rate between foreign currencies and US currency. Pluto at the ingress of Libra also marked the high point in American power, that had started when Pluto had hit the previous cardinal axis in 1914.
This in turn led to the fifth stage of capitalism, Financial Capitalism in the 1990s. In this much profit was derived from the exchange of money and not from producing concrete things such as industries did in earlier stages of capitalism. In the early 1990’s there was a conjunction of Uranus and Neptune in the middle of Capricorn, the first such conjunction since the one in the 1820s illustrated above which marked the second stage of capitalism. While many things happened in this period, the rise of financial capitalism marked by the massive use of computers was one of them. As in keeping with the nature of Neptune, financial capitalism is extremely speculative and based, instead of on real objects such as those produced by industry, purely “imaginary” money. Computers allows this money to be easily manipulated. This was indeed a fitting result of the combination of Uranus – computers – and Neptune – speculation. The chart is for the first exact conjunction of the two planets, but of course the effects were felt long before, as the two planets were moving into orb.
One important financial development of the Nineties was derivatives, the ultimate in Neptune. Derivatives are based, or derived, on something else, and by their nature they are not real. The story I have heard about the invention of derivatives involves a pool party for bankers. At that party they invented derivatives. They were meant to be complicated because financial instruments cannot be patented so the bankers wanted derivatives to be complicated so that no one could duplicate them. Mission accomplished, but the hopefully unintended consequences came to haunt the world. The current worth of global derivatives is estimated to be over 1 quadrillion dollars, a number I learned as a kid (1 quadrillion = 1000 trillion) but never expected to see in real life. This is some twenty times larger than the entire global economy. What could possibly go wrong?