Transcript

Capitalism and Socialism: Crash Course

World History #33
Capitalism and socialism are the two principal economic theories—and
systems—that operate in our world today. In this video, John Green
describes how they came into being and what principles that are important
to each system.
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Capitalism and Socialism: Crash Course World History #33

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00:01 Hi, I’m John Green, this is Crash Course World History, and today we’re going to
talk about capitalism.

John Green as his college- Yeah, Mr. Green, capitalism just turns men into wolves. Your purportedly free
aged self markets only make slaves of us all.

Oh, God, Stan, it’s Me from College. Me from the Past has become Me from
College. This is a disaster! The reason he’s so unbearable, Stan, is that he refuses
to recognize the legitimacy of other people’s narratives. And that means that he
will never ever be able to have a productive conversation with another human in
his entire life.

So listen, Me from the Past: I’m going to disappoint you by being too capitalist. And
I’m going to disappoint a lot of other people by not being capitalist enough. And I’m
going to disappoint the historians by not using enough jargon. But what can I do?
Image of Riggs’ book “Miss We only have 12 minutes! Fortunately, capitalism is all about efficiency. So let’s do
Peregrine’s Home for this, Me from College. Randy Riggs becomes a best-selling author, Josh Radnor
Peculiar Children”, image stars in a great sitcom, it is not going to work out with Emily, and do not go to
of tv show “How I Met Alaska with a girl you’ve known for ten days. Okay, let’s talk capitalism.
Your Mother”
CCWH theme music plays

00:58 So capitalism is an economic system, but it’s also a cultural system. It’s
characterized by innovation and investment to increase wealth. But today, we’re
Photos of workers and an going to focus on production and how industrial capitalism changed it. Stan, I can’t
industrial factory; wear these emblems of the bourgeoisie while Karl Marx himself is looking at me,
Drawing of Karl Marx on it’s ridiculous. I’m changing! Very hard to take off a shirt dramatically.
the chalkboard behind
Green; Green takes off his So let’s say it’s 1200 C.E. and you’re a rug merchant. Just like merchants today,
suit jacket and dress shirt you sometimes need to borrow money in order to buy the rugs you want to
resell at a profit, and then you pay that money back, often with interest, once
Paintings from around you’ve resold the rugs. This is called mercantile capitalism, and it was a global
the world depict markets phenomenon, from the Chinese to the Indian Ocean trade network to Muslim
where people can merchants who would sponsor trade caravans across the Sahara.
purchase goods;
photo of a trade caravan
– several men riding on
camels

01:41 But by the 17th century, merchants in the Netherlands and in Britain had expanded
upon this idea to create joint-stock companies. Those companies could finance
bigger trade missions and also spread the risk of international trade. But the thing
about international trade is, sometimes boats sink or they get taken by pirates,
Paintings of shipwrecks and while that’s bad if you’re a sailor, because, you know, you lose your life,
it’s really bad if you’re a mercantile capitalist because you lost all your money.
But if you own one-tenth of ten boats, your risk is much better managed. That
kind of investment definitely increased wealth, but it only affected a sliver of the
population, and it didn’t create a culture of capitalism.

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Capitalism and Socialism: Crash Course World History #33

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02:13 Industrial capitalism was something altogether different, both in scale and
in practice. Let’s use Joyce Appleby’s definition of industrial capitalism: “An
Scrolling text economic system that relies on investment of capital “in machines and technology
that are used to increase production of marketable goods.” So imagine that
someone made a Stan machine. By the way, Stan, this is a remarkable likeness.
Green holds up a toy robot And that Stan machine could produce and direct ten times more episodes of Crash
Course than a human Stan. Well, of course, even if there are significant upfront
costs, I’m going to invest in a Stan machine so I can start cranking out ten times
the knowledge. Stan, are you focusing on the robot instead of me? (yelling): I am
the star of the show! Stanbot, you’re going behind the globe.

Photos and artworks show So when most of us think about capitalism, especially when we think about its
the horrible conditions downsides—long hours, low wages, miserable working conditions, child labor,
in factories and large unemployed Stans—that’s what we’re thinking about. Now admittedly, this is just
numbers of people one definition of industrial capitalism among many, but it’s the definition we’re
unemployed going with. All right, let’s go to the Thought Bubble.

03:05 Industrial capitalism developed first in Britain in the 19th century. Britain had a
bunch of advantages—it was the dominant power on the seas, and it was making
Animated map shows good money off of trade with its colonies, including the slave trade; also, the
Britain in the 19th century, growth of capitalism was helped by the half-century of civil unrest that resulted
which covers a large from the 17th-century English Civil War. Now, I’m not advocating for civil wars or
portion of the globe anything, but in this particular case, it was useful, because before the war, the
Animation of the English British crown had put a lot of regulations on the economy: complicated licenses,
Civil War; the British royal monopolies, etc. But during the turmoil it couldn’t enforce them, which
Crown holds up several made for freer markets. Another factor was a remarkable increase in agricultural
documents productivity in the 16th century. As food prices started to rise, it became profitable
A poor farmer wheels for farmers, both large and small, to invest in agricultural technologies that
a wheelbarrow past would improve crop yields. Those higher prices for grain probably resulted from
another man holding a population growth, which in turn was encouraged by increased production of food
more advanced farming crops. A number of these agricultural improvements came from the Dutch, who
tool; cases of fruits and had chronic problems feeding themselves, and discovered that planting different
vegetables fall to the kinds of crops—like clover, that added nitrogen to the soil and could be used to
ground feed livestock at the same time—meant that more fields could be used at once.
A Dutch farmer plants
clover

04:14 This increased productivity eventually brought down prices, and this encouraged
further innovation in order to increase yield to make up for the drop in prices.
Animation of a crowded Lower food prices had an added benefit: Since food cost less and wages in
food market England remained high, workers would have more disposable income, which
meant that if there were consumer goods available, they would be consumed,
which incentivized people to make consumer goods more efficiently, and therefore
more cheaply.

You can see how this positive feedback loop leads to more food, and more stuff,
culminating in a world where people have so much stuff that we must rent
space to store it, and so much food that obesity has become a bigger killer than
starvation. Thanks, Thought Bubble.
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Capitalism and Socialism: Crash Course World History #33

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04:50 So this increased productivity also meant that fewer people needed to work in
agriculture in order to feed the population. To put this in perspective, in 1520,
Photo and painting of 80% of the English population worked the land. By 1800, only 36% of adult male
people working on farms laborers were working in agriculture, and by 1850, that percentage had dropped
Drawing of women in to 25. This meant that when the factories started humming, there were plenty of
a factory; photo of a workers to hum along with them, especially child laborers. (imitates sad horn)
young girl working in an
assembly line So far all this sounds pretty good, right? I mean, except for the child labor. Who
wouldn’t want more, cheaper food? Yeah, well, not so fast. One of the ways the
British achieved all this agricultural productivity was through the process of
enclosure, whereby landlords would reclaim and privatize fields that for centuries
had been held in common by multiple tenants. This increased agricultural
productivity, but it also impoverished many tenant farmers, many of whom lost
their livelihoods.

05:41 Okay, for our purposes, capitalism is also a cultural system rooted in the need of
private investors to turn a profit. So the real change needed here was a change of
mind. People had to develop the capitalist values of taking risks and appreciating
innovation. And they had to come to believe that making an upfront investment
in something like a Stan machine could pay for itself and then some. One of the
reasons that these values developed in Britain was that the people who initially
held them were really good at publicizing them. Writers like Thomas Mun, who
worked for the English East India Company, exposed people to the idea that the
economy was controlled by markets. And other writers popularized the idea that
it was human nature for individuals to participate in markets as rational actors.
Even our language changed: The word “individuals” did not apply to persons until
the 17th century. And in the 18th century, a “career” still referred only to horses’
racing lives.

06:30 Perhaps the most important idea that was popularized in England was that men
and women were consumers as well as producers, and that this was actually
Painting of a crowded a good thing, because the desire to consume manufactured goods could spur
market, drawings of economic growth. “The main spur to trade, “or rather to industry and ingenuity, “is
people working in the exorbitant appetite of men, which they will take pain to gratify.” So wrote John
factories Cary, one of capitalism’s cheerleaders, in 1695, and in talking about our appetites,
he wasn’t just talking about food. That doesn’t seem radical now, but it sure did
back then.

07:01 So here in the 21st century, it’s clear that industrial capitalism—at least for now,
has won. Sorry, buddy, but, you know, you gave it a good run. You didn’t know
Photograph of a modern- about Stalin. But capitalism isn’t without its problems or its critics, and there were
day assembly line; Green certainly lots of shortcomings to industrial capitalism in the 19th century. Working
turns around and speaks conditions were awful. Days were long, arduous, and monotonous. Workers lived
to Marx on the chalkboard in conditions that people living in the developed world today would associate with
More photographs that abject poverty.
show the awful working
and living conditions One way that workers responded to these conditions was by organizing into labor
workers experienced; unions. Another response was in many cases purely theoretical: socialism, most
photo of a newspaper with famously Marxian socialism.
a “Strike!” headline
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Capitalism and Socialism: Crash Course World History #33

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I should probably point out here that socialism is an imperfect opposite to

capitalism, even though the two are often juxtaposed. Capitalism’s defenders like
to point out that it’s “natural,” meaning that if left to our own devices, humans
would construct economic relationships that resemble capitalism. Socialism,
at least in its modern incarnations, makes fewer pretenses toward being an
expression of human nature—it’s the result of human choice and human planning.

07:58 So, socialism, as an intellectual construct, began in France. How’d I do, Stan?
Mmm... in the border between Egypt and Libya.
John Green attempts to
point at France on the There were two branches of socialism in France, utopian and revolutionary.
globe without looking Utopian socialism is often associated with Comte de Saint-Simon and Charles
Fourier, both of whom rejected revolutionary action after having seen the
Painting of the destruction disaster of the French Revolution. Both were critical of capitalism, and while
of the French Revolution, Fourier is usually a punch line in history classes, because he believed that in his
including many fallen men ideal socialist world, the seas would turn to lemonade, he was right that human
beings have desires that go beyond basic self-interest, and that we aren’t always
economically rational actors.

08:34 The other French socialists were the revolutionaries, and they saw the French
Revolution, even its violence, in a much more positive light. The most important
of these revolutionaries was Auguste Blanqui, and we associate a lot of his
Painting titled “Liberty ideas with communism, which is a term that he used. Like the utopians, he
Leading the People” criticized capitalism, but he believed that it could only be overthrown through
glorifies revolution violent revolution by the working classes. However, while Blanqui thought that
the workers would come to dominate a communist world, he was an elitist. And
he believed that workers could never on their own overcome their superstitions
and their prejudices in order to throw off bourgeois oppression. And that brings
us to Karl Marx, whose ideas and beard cast a shadow over most of the 20th
Harp music plays; a large century. Oh, it’s time for the Open Letter? An open letter to Karl Marx’s beard.
chair and fireplace roll into But, first, let’s see what’s in the secret compartment today. Oh, robots. Stanbots!
the shot, Green moves into Two Stanbots, one of them female! Now I own all the means of production. You’re
the chair; officially useless to me, Stan. Now, turn the camera off. Turn the... I’m going to
Green talks to the robots have to get up and turn the camera off? Stanbot, go turn the camera off.
he pulled out of the
compartment

09:40 Hey there, Karl Marx’s beard. Wow, you are intense. Karl Marx, these days there
are a lot of young men who think beards are cool—beard lovers, if you will. Those
Photo of Karl Marx (with a aren’t beards, they’re glorified milk mustaches. I mean, I haven’t shaved for a
large beard) couple of weeks, Karl Marx, but I’m not claiming a beard. You don’t get a beard
by being lazy, you get a beard by being a committed revolutionary. That’s why
hard-core Marxists are literally known as “Bearded Marxists.” These days that’s
an insult, but you know what, Karl Marx? when I look back at history, I prefer the
Portraits of the mentioned bearded communists. Let’s talk about some communists who didn’t have beards:
leaders (Stalin’s photo Mao Zedong, Pol Pot, Kim Jong Il, Joseph freakin’ Stalin with his face caterpillar.
shows him with a very So, yeah, Karl Marx’s beard, it’s my great regret to inform you that there are some
large mustache) paltry beards trying to take up the class struggle these days. Best wishes, John
Green.

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10:23 Although he’s often considered the father of communism, because he co-wrote
“The Communist Manifesto,” Marx was above all a philosopher and a historian.
photo of “The Communist It’s just that, unlike most philosophers and historians, he advocated for revolution.
Manifesto” His greatest work, “Das Kapital,” sets out to explain the world of the 19th century
in historical and philosophical terms. Marx’s thinking is deep and dense and we’re
low on time, but I want to introduce one of his ideas, that of class struggle.

Images of workers striking So, for Marx, the focus isn’t on the class, it’s on the struggle. Basically, Marx
and revolting believed that classes don’t only struggle to make history, but that the struggle is
what makes classes into themselves. The idea is that through conflict, classes
Animation of a worker and develop a sense of themselves, and without conflict, there is no such thing as
a capitalist (who is hitting class consciousness. So, Marx was writing in 19th-century England, and there
himself in the head with were two classes that mattered: the workers and the capitalists. The capitalists
a brick, causing money to owned most of the factors of production—in this case, land and the capital to
fall out) invest in factories. The workers just had their labor. So, the class struggle here is
between capitalists, who want labor at the lowest possible price, and the workers,
who want to be paid as much as possible for their work.

11:25 There are two key ideas that underlie this theory of class struggle. First, Marx
believed that production, or work, was the thing that gave life material meaning.
Second is that we are by nature social animals. We work together, we collaborate,
Photo/art montage of we are more efficient when we share resources. Marx’s criticism of capitalism is
people working together that capitalism replaces this egalitarian collaboration with conflict. And that means
and socializing that it isn’t a natural system after all. And by arguing that capitalism actually isn’t
consistent with human nature, Marx sought to empower the workers. That’s a
Photo of people sitting lot more attractive than Blanqui’s elitist socialism, and while purportedly Marxist
together happily is states like the USSR usually abandoned worker empowerment pretty quickly, the
contrasted with a drawing idea of protecting our collective interest remains powerful.
of a violent protest

12:09 That’s where we’ll leave it for now, lest I start reading from “The Communist
Manifesto.” But ultimately, socialism has not succeeded in supplanting capitalism,
as its proponents had hoped. In the United States, at least, “socialism” has become
something of a dirty word. So, industrial capitalism certainly seems to have won
out, and in terms of material well-being and access to goods and services for
people around the world, that’s probably a good thing. (grunts): You keep falling
A Nintendo bit (a vase of over—you’re a great bit, but a very flimsy one. Actually, come to think of it, you’re
flowers) falls over more of an eight-bit. But how and to what extent we use socialist principles to
regulate free markets remains an open question, and one that is answered very
differently in, say, Sweden than in the United States.

12:44 And this, I would argue, is where Marx still matters. Is capitalist competition
natural and good, or should there be systems in place to check it for the sake
of our collective well-being? Should we band together to provide healthcare
for the sick, or pensions for the old? Should governments run businesses, and
if so, which ones? The mail delivery business? The airport security business?
The education business? Those are the places where industrial capitalism and
socialism are still competing. And in that sense, at least, the struggle continues.
Thanks for watching, I’ll see you next week.

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13:43 Crash Course is produced and directed by Stan Muller. Our script supervisor is
Danica Johnson. The show is written by my high school history teacher, Raoul
Credits roll Meyer, and myself. We’re ably interned by Meredith Danko. And our graphics
team is Thought Bubble. Last week’s Phrase of the Week was the TARDIS, so
you can stop suggesting that now! If you’d like to suggest future Phrases of the
Week or guess at this week’s, you can do so in comments, where you can also
ask questions about today’s video that will be answered by our team of historians.
Thanks for watching Crash Course, and as we say in my hometown, don’t forget to
be awesome. All right, Stan, bring the movie magic. Yes!