Dane Stangler, City Journal:
Among pundits, the enthusiasm generated by Donald Trump and Bernie Sanders can be explained by a breakdown of capitalism. Trump’s supporters—especially working-class voters—are motivated by anger at the economic harm they have suffered. Sanders is an avowed socialist and, according to the Wall Street Journal’s William Galston, his younger supporters “have no experience of a successful capitalist system and no memory of communism’s failure.” Meanwhile, Senator Ted Cruz and others have accused Trump of being a “crony capitalist.”
Given the severity of the 2008 financial crisis and its aftermath, it may not be too surprising if the 2016 election turns out to be a debate on capitalism. Phenomena such as income inequality and the thinning out of middle-income jobs have caused many Americans to wonder just what kind of capitalism they want to have. Over the past few years, several publications have run series on “capitalism in crisis.” And, the debate isn’t confined to the United States. Debt crises and depression in Europe have renewed hostility toward capitalism, and recent economic troubles in China have led to questions about the future of capitalism there.
Debates about capitalism are nothing new—the word itself originated, according to German historian Jürgen Kocka, as a “politically tendentious term” in the nineteenth century. The concept of “capitalism” emerged in response to industrialization as both a tool of criticism and of scholarly analysis. Yet as Kocka demonstrates in his new book, Capitalism: A Short History, capitalism developed well before the 1800s. In a pithy synthesis of historical scholarship, he homes in on the three essential elements of capitalism: decentralization (as exemplified by individual property rights); commodification (which allows the market to allocate and coordinate resources); and accumulation (credit and investment for the future).