Review of The Great Courses’ “Thinking about Capitalism” Course by Professor Jerry Muller

I just completed this wonderful and insightful 36-half hour-lecture course by Professor Jerry Z. Muller. I immensely enjoyed and learnt a lot from this course. As a long-term student of business and capitalism, I am amazed by the depth and variety of thoughts, perspectives & insights produced by past and contemporary thinkers as outlined by Professor Muller.

Some of the thoughts, perspectives and insights I found memorable and useful from this course include the following:

• Lecture 1: Professor Muller discussed how, although there was a lot of trade in the Middle Ages, most households at that time continued to consume most of the things that they produced, and to produce most of what they consumed. It was only in the 18^th century that in the most advanced parts of Europe, the majority of people came to ‘buy’ most of the things they needed, and ‘sold’ most that they produced. This provides hints into the pragmatic definition of capitalism and when it began.
• Lecture 2 (The Greek and Christian Traditions): How the Church resolved its antipathy/suspicion against commerce (‘usury’), beginning in the 12^th century, by allowing the Jews to engage in moneymaking activities.
• Lecture 4 (Dutch Commerce and National Power): The Dutch’s commercial and military success (although it had limited natural resources) in the 17^th century, led to its neighbours raising the issue of the links between commerce and national power. The Dutch also pioneered in early 1600s the creation of merchant companies to pool capital and risk for large-scale undertakings (e.g., Dutch East India Company, the first company to issue stock).
• Lecture 5 (Capitalism and Toleration – Voltaire): Voltaire (the ‘Malcolm Gladwell’ of his day) described how the quest for economic gain led people more willing to tolerate those from varying religious and ethnic backgrounds.
• Lectures 7 – 10 (on Adam Smith): What an amazing thinker and observer – Smith foresaw many aspects of capitalism that are still highly relevant today (from the 1770s!). For instance, he claimed that protectionism will hamper economic growth; using the example of the ‘pin factory’, he explained the massive productivity improvements gained from division of labour and specialisation (through greater skills, saving (changeover) time, and new inventions (including technological) that reduced the amount of labour over time); he also forecasted (correctly) that more and more specialisation and division of labour will lead to bigger markets (as unit cost decrease) and universal opulence; hence the concept of ‘invisible hand’ linking economic participants’ ‘self interest’ to societal well-being (a paradox at first glance). Smith also described that economic relationships are not ‘zero sum game’ in that one nation’s gains do not lead to other nations’ loss. Smith also discussed how trade will enable richer governments, which in turn enables stronger defence, better education, infrastructure, protection (law etc.), i.e., ‘public goods’. He also wrote about the potential ‘narrowing effects’ of the division of labor on the human psyche/soul, and how this can be counteracted by universal public schooling, to be provided largely by the government.
• Lecture 14 (Alexander Hamilton): I was surprised by Hamilton’s thinking and application of the forerunner of what ends up to be called the ‘theory of uneven development’, in which young countries (like the young United States) should protect (through tariffs and subsidies) certain, important infant industries to ‘catch up’ to other more economically advanced nations. One can argue that this was applied by Japan, South Korea and China (and Singapore?) in more modern times.
• Lecture 15 (on Alexis de Tocqueville): Very observant and prophetic on the effects of capitalism (which he wrote after his visit to the United States): loneliness, individualism counteracted/moderated by associations and religious activities; and can lead to different type of social hierarchies (polarisation & new form of aristocracy).
• Lecture 18 (Matthew Arnold): Contributed to realms where ‘non-market’ thinking is applicable, e.g., public goods such as universal education. In such areas, the ‘market’ will either ignore them or ‘market thinking’ will guide them ineffectively.
• Lecture 19 (Simmel on Capitalism and Community): Georg Simmel in 1900 was prescient and insightful when he described how capitalism will lead to more and more depth & varieties of interests/activities which would not otherwise be possible; these will create their own ‘communities’ / associations.
• Lecture 21 (Cultural Sources of Capitalism – Max Weber): Weber’s discussion on the associations between religions and economic / commercial prosperity is interesting (although won’t be politically correct to be discussed today).
• Lecture 22 (Joseph Schumpeter): Schumpeter is another insightful thinker who described how the (minority) entrepreneurs drive capitalism and also drive public (majority) resentment against them.
• Lecture 27 (Keynes and the Rise of Welfare-State Capitalism): This lecture discussed Keynes and his contribution to recommend fiscal and monetary policies to ‘temper’ economic cycles (including the use of welfare programs by states).
• Lecture 30 (Daniel Bell): Daniel Bell was insightful in the 1970s in describing the rising importance of services (hence also more jobs suitable for women) and technology) in the post-industrial society. He also recommended the necessity of balancing institutions (such as schools, churches (religious beliefs) and the family) to counteract negative cultural impacts of capitalism.
• Lecture 31 (The Family under Capitalism): Professor Muller talked about the reducing family size under capitalism and its drivers. He also linked Gosta Esping-Andersen’s three models of welfare-state to birth rates, which was original (I never thought of this before) and refreshing!
• Lecture 32 (Capitalism and Democracy): James Buchanan in the 1970s (stagflation period) insightfully criticised Keynes for being naïve about democracy, in that elected politicians (to win votes in a democratic system) had a built-in tendency to run perennial budget deficits, which tend to lead to inflation and state debt.
• Lecture 33 (Globalisation): In this lecture, Professor Muller discussed periods in the past when economic growth was ‘speeded-up’ and when it was sluggish or even in decline. In general, Professor Muller attributed improvements in transportation and communication technologies (e.g., 1870 to 1914 high economic growth), high ‘export-oriented industrialisation (Japan in 1950s and 1960s, and East Asian Tigers in 1970s and 1980s), as well as the transformation of previously communist regimes into more capitalistic regimes (fall of Soviet Union and Eastern Europe communist blocs in late 1980s, as well as Deng Xiao Ping’s 1978 market opening of China). This begs the question, what will lead to ‘speeded-up’ economic growth in the future?
• Lecture 34 (Capitalism and Nationalism): Ernest Gellner (1983) made some very interesting observations/conjectures about how capitalism may lead to sentiments toward nationalism.
• Lecture 35 (Varieties of Capitalism): In acknowledging the varieties of capitalism across multiple dimensions, Professor Muller recommended nations to not think too much about applying or ‘copying’ what works with other capitalistic system, but to think more about complementarities of various capitalistic systems in the international economy. I think this is a refreshing view and a correct one.

Professor Muller’s teaching style is highly engaging and he clearly knows his subject matters in detail. I like the way he uses frameworks as described by the best thinkers in this subject in parallel to discussing chronological historical events. In this case, he mimicked the great Adam Smith in attempting to unfold understanding through historical analysis.

In conclusion, Professor Muller has more than succeeded in bringing out, what Matthew Arnold called, the ‘best that has been thought and said’ about capitalism.