premise: capitalism is not first an economic system. it’s a political philosophy that redefined who counts as a person, what counts as property, and which institutions can say “no” to power. the economics follow from that.

if you keep this in view, the long arc from feudal contracts to dutch joint-stock companies to platform capitalism and china’s hybrid model clicks into place.

tl;dr

• private first, markets second: the distinctive feature is not production or exchange. those predate factories. it’s the invention and defense of private ownership against rival claims (especially by states and lords).
• countervailing force is everything: private property is only real where something can stop someone stronger from taking your stuff: armed retinues; leagues; churches; eventually, courts and codified law.
• legal person → corporate persona: rights for individuals generalized into rights for artificial persons. that unlocked transnational firms whose power rivals states.
• prices abstract history: the price system strips narrative from goods, allowing “clean” exchange of “dirty” inputs (e.g., slave-grown cotton into British looms), then later into balance sheets and platform metrics.
• neoliberal turn: after mid‑century corporatism and the bretton woods order, the 1970s–90s shift (volcker shock → reagan/thatcher → wto) normalized capital mobility, financialization, and state as guarantor of markets.
• today’s bind: globalized supply chains, platform monopolies, and sovereign-like corporations. the old covenant (“we let you extract; you let us govern”) is unstable.

definitions that actually matter

• capitalism (core): private ownership of means of production and distribution + market exchange for profit + a legal-political regime strong enough to protect private claims from sovereign expropriation, yet weak enough to be constrained by those very claims.
• the novelty is not “factories” or “trade.” it’s the institutionalization of the word “private.” everything else is downstream.

Two immediate implications:
- relative to what? “private” only makes sense relative to a higher power that could take it. you need an alternative force—feudal bonds, leagues, canon law, common law, napoleonic code, later constitutional courts—to say “no.”
- who is a person? expand the circle of persons who can hold rights, then allow those rights to aggregate into artificial persons (corporations). that is the lever.

a very compressed timeline (with the levers highlighted)

feudal reciprocity → commons of obligation

Before “private” as we know it, land was embedded in obligations. a duke “owned” an estate the way a conductor owns a symphony: through interlocking claims—widows’ wood-gathering rights, pasture rotations, tithe obligations, military service. it was legible through stories, not prices.

Key properties:
- ownership is conditional; sovereignty can disinherit you tomorrow.
- enforcement is social-military, not legal-abstract.
- “markets” exist episodically (fairs), tightly constrained to protect status order.

monetization by necessity → tax → armies → more tax

Standing armies are expensive. the fiscal state learned that fairs and weekly markets boosted taxable flows; then required taxes in coin; then forced peasantries into money circuits. monetization was not “natural”; it was policy (and war finance).

enclosures → invention of the modern “private”

The enclosure movement in England is the crisp demonstration. hedges and fences were legal instruments that converted customary, narratively-defined use rights into alienable, saleable property. “free labor markets” did not pre-exist; they were engineered by removing non-market subsistence options.

courts as the new sword

Private armies (VOC/EIC), leagues (hansa), and churches once countered kings. modernity replaced spearpoints with statutes:
- common law: precedence binds the sovereign (in principle) to general rules; subjects litigate against crown agents.
- napoleonic code: absolutist in myth, but conceptually clarifies property, contract, and person; later republican constitutions harden limits (e.g., quartering bans, takings clauses).

corporate personhood → transnational muscle

1602: VOC (and siblings) fuse a new business form (joint-stock, transferable shares, perpetual life) with state delegation (monopoly charters, private armies). the result is a non-state actor that can project power, tax traders, wage war.

This is the first clear case of a political invention producing an economic supercharger.

industrial revolution → mass abstraction

Factories compress time and space: wages become the common denominator; prices scale; accounting universalizes. the more an economy is denominated in money, the more narrative is stripped. you stop buying “ed’s milk” and start buying “milk at $X.”

the 19th c. contradiction: persons vs property

Slavery dramatizes the tension: is a human a person, or property? the us civil war amendments (13–15) redefine the legal “person,” but retain the deeper link between citizenship and property rights. emancipation restricts what counts as ownable, not whether property dominates the grammar of rights.

20th c. managerial capitalism → mid‑century truce

Corporations internalize supply, labor, and finance; states backstop demand (new deal, postwar social contracts). bretton woods constrains capital flows; keynesian stabilization norms embed labor power and public investment. competition policy is aggressive; unions matter.

1970s–1990s: the neoliberal turn

Oil shocks and stagflation break the truce. volcker crushes inflation via interest rate shock; capital reasserts mobility; reagan/thatcher deregulate; wto globalizes rules. the result: financialization; offshoring; shareholder primacy; state repurposed as guarantor of markets more than employer of last resort.

china’s hybrid (and the post‑2008 world)

China embraces export-led growth, disciplined credit, quasi-state firms; wto accession accelerates global supply-chain integration. post-2008, western states rescue balance sheets; platforms consolidate; surveillance + data moats substitute for 20th‑century vertical integration.

the philosophical core: why prices are so powerful (and dangerous)

Prices are a brilliant compression algorithm: they encode vast coordination information into one number. but they also erase history. the same abstraction that lets you compare substitutes also lets you ignore origins.

Examples I gave in lecture:
- Britain interdicted the slave trade at sea while happily spinning slave-grown cotton at home. abstraction makes that socially thinkable.
- sunday closing norms in parts of europe preserve non-market values; 24/7 retail in the us encodes the opposite.
- education and medicine migrated from status/virtue goods to income-maximization pipelines; once denominated in ROI, prices rationally soar.

This is not a morality tale that “prices are bad.” it’s a reminder that price is a political choice: which histories we strip, which frictions we preserve, which externalities we tolerate.

political technology, not just economics

Capitalism wins by evolving institutional counterweights:
- when kings were strong, aristocratic compacts and ecclesia limited them.
- when states professionalized, courts did.
- when national governments sought to police borders, joint-stock firms and later platforms leapt them.

Each step is a new political technology that refactors the boundary between “public” and “private.” the balance has never been stable for long.

the present order: platform capitalism as soft sovereignty

• platform monopolies: network effects + data moats + default contracts concentrate power; antitrust tools built for railroads misfire on attention markets.
• financialization: balance-sheet optimization outruns productive investment; accounting tail wags operating dog.
• regulatory arbitrage: global entities pick jurisdictions, shift profits, and shape standards.

The result is a de facto constitution wherein the “private” parses and often preempts the “public,” echoing VOC logic with cloud-native tooling.

where do we go from here?

I see three levers—each political before economic:

1) Re-specify personhood (again)
- Expand rights/responsibilities to artificial persons differently (e.g., fiduciary duties beyond shareholders; climate liability; data trusteeship).
- Recognize agentic software as economic actors, but attach auditability and narrow purpose rights before unleashing general capabilities.

2) Re-embed prices in histories
- Mandatory provenance disclosures (labor, carbon, governance) attached to skus; machine-readable by default. let the abstraction carry context.
- Public option metrics: normalize non-price signals (health, time, resilience) in procurement and consumer interfaces.

3) Rebalance countervailing force
- Modern antitrust for networked markets (interoperability, data portability, neutral pipes) rather than solely structural breakup.
- International minimums (tax floors, supply-chain due diligence) to blunt jurisdictional races to the bottom.

a useful mental model

Ask of any proposal: which countervailing force does it empower? courts, codes, or compute? if you cannot name the thing that can say “no,” you don’t have a new equilibrium—you have wishful thinking.

further reading / anchors I drew on in the lectures

• Hansa, VOC/EIC charters; enclosure acts; napoleonic code vs. common law evolution; bretton woods primary docs; volcker-era minutes; wto accession protocols; contemporary platform antitrust cases.

closing

capitalism’s genius is institutional. it keeps finding new ways to make “private” real against stronger adversaries. the danger is the same: left unchecked, the private becomes sovereign. to govern that, we will need to get as inventive with our political technology as the last five centuries were with their economic ones.

published: 9-27-2025