So I'm going to talk about I'm an intellectual historian of capitalism, and you're going to see this chart,
but it's the only chart that's going to be somewhat similar to the ones we've seen before.
But I'm going to attack it from a slightly different angle. And when looking at these charts of great divergence,
I'm really going to do something that in some ways we began to do in in the last discussion is try to interrogate the categories that are used here.
And basically the argument of kind of where this idea of gross domestic product comes from,
but also to maybe suggest very tentatively another causal reason for the great
divergence being that maybe societies who make something like maximising product,
their goal then end up actually increasing their product.
So in other words, maybe the ideas sometimes come before the material change and the example I have for someone who certainly
began to imagine the world and the goal of kind of increasing economic product is Alexander Hamilton,
who has become very famous and is undoubtedly in many ways the the father of American capitalism,
and when he was already secretary of Treasury in 1791,
after he had played a very large role in getting creating the institutional power that created the very sick the Treasury Department,
Hamilton is writing his report on manufacturers. He is. He has the dream of bringing the industrial revolution to American shores.
And he really wants to convince people as he writes this report with like a statistical appendix.
He wants there to be cold,
hard numbers to show pretty much why agriculture is not as productive as industry and why we need to bring industry into United States.
And later, he kind of raises what his question was.
And he and here's the quote. The question will still be whether the surplus,
after defraying expenses of a given capital employed in the purchase and improvement of a piece of
land is greater or less than that of like capital employed in a prosecution of a manufacturer.
But for me,
the key point is really the second part or rather perhaps whether the business is already imagining agriculture and manufacturing as a business,
whether the business of agriculture or manufacturers will yield the greatest product.
So in many ways, he has this vision of of maximising productivity, economic market productivity in his mind, and now he needs the data.
And so he has his tax collectors that he, of course this is.
He himself built this giant bureaucratic network of tax collectors in order to pay for the national debt.
He sends them off to go to these American farmers and manufacturers and artisans and ask them what their annual product is,
how much do they kind of generate in money per year?
And he gives instructions, you know, about how he wants the amounts, but he also wants the prices, and he waits a few months.
And then the responses begin to come in. And Hamilton is very disappointed.
There is no statistical appendix to the report and manufacturers because he just could not get the data that he wanted.
And just to give a few kind of small examples of the manufacturers. So you see that the artisans never really describe things in numerical terms.
A great many people are employed in Ireland. The number of sheep is fast increasing.
A Hartford businessman, I am not possessed of sufficient documents on which to ground any details or calculations on the annual valid value.
Tax collectors saying annual produce is not easy to determine. The farmers don't do much better.
A Bucks County farmer tells him the novelty of the subject and never having kept a regular account.
I don't know anybody else who does this kind of stuff.
The Maryland farmers like maybe I can get you some quantities, but I can't really, you know, figure out the value of Virginia Tax Collector.
He's like, you know, in a new country like this, I can't really do it. And then Timothy Pickering, a friend of Hamilton,
says I doubt whether one American farmer in a thousand has determined by actual ad measurement the sizes of his lands and their produce.
So. So Hamilton fails. And in many ways we see here, this is kind of like a great intellectual divergence.
We have, you know, these two visions. One of them very modern, very kind of capitalist.
If you want to use that word and the other one something else, then I'll in a second say what it is.
I don't think it's, you know, this kind of moral economy of self-sufficient yeoman farmers.
I don't think that's what it is, and we'll get back to that. But there's definitely some kind of divergence here.
And then the first question I want to ask here is, well, why?
Why this divergence? And I've been pushed more and more in the last few years to think globally and and and
I definitely think that the number one reason is that Hamilton was not an American.
Hamilton did not grow up. He grew up. This is a globe.
But it is that this is a global story.
Alexander Hamilton was born and raised on what I would argue is an island that basically turned into one giant capitalist investment.
Something that's. Well, it's interesting because the Hamilton story about the Caribbean, if we're going through it,
is always used as this kind of rags to riches story, but it's never used to explain actually where his own intellectual ideas come from.
That's always coming from England or, you know, and here I'm going to try to tell you a slightly different story.
So he's there. He's very observant, you know, he's obviously not working on the plantations or even, you know, running these plantations.
But he's a merchant. He's buying, he's selling slaves often. Sometimes. But this is you know what I want to talk about here?
Is this the Caribbean as just a giant capitalised investment, so it's financed by bankers who are buying mortgages back in England.
It's absentee landlords. So this isn't like in the United States, so I'll get to second is very different from Princeton's tobacco slavery.
93 percent of the inhabitants are slaves, so it's not, you know, again,
very different from certain areas of the United States, which did have slavery.
It's a very kind of profit oriented form of slavery because of that distance of the investors who are far away.
So they need all these people generating reports all the time of how much, you know, sugar.
I forgot to add here. Also, sugar itself is very different from tobacco. It's very capital intensive.
You need a lot more money. So all these different differences. The island itself, where he grows up on St. Croix, was actually bought.
So in itself, in many ways was a commodity. And then, of course, the extreme monoculture that allows him to view kind of the world in market prices.
It makes sense, you know, when you kind of are a merchant and you're thinking of everything,
basically everything, almost everything that is consumed in this world,
much like our world today, is to markets, which is, of course, would be a very foreign idea to many other places in the world.
And so what's interesting is that I don't think this idea of Caribbean slavery is proven only with Hamilton.
When I went back and looked for other cases where you see this kind of prototype kind
of ways of calculating the only place where I really found it was in South Carolina.
And for those who don't know South Carolina, you know, slavery is very much more like the Caribbean slavery.
A lot of people came from the Caribbean to South Carolina. It's not like it took out tobacco planting.
It's a lot like the whole social model of the absentee landlord, these giant estates, it's very much similar.
And sure enough, there you do see these things like, you know, people calculating how much wealth each labourer will bring.
So it's kind of like this idea of, you know, a per capita productivity or, you know,
when when I employ them in rice, the slaves may earn a master 25 or 30 pounds.
And then, of course,
the governor of South Carolina in 1751 is the first one to create kind of like a national income accounting to value South Carolina.
He gives the value of South Carolina in much the same way that people here were discussing before.
He kind of guesses, you know, more or less what the income is and then kind of figures out what the output is.
And just to also show again why I think it's important to stress this kind of vision.
So so Hamilton, when he's younger, about 15 years before he's the secretary of Treasury, he's a he's a colonel in the American Revolutionary War,
and he's has this little paperwork that he's going around and it's supposed to right there.
You know how much he's paying all his soldiers.
But if you go to the back, what it really has is all these economic statistics that he's been collecting.
And one of them is, you see that he's been reading William Petit. He's somehow managed to get these ideas of, you know, national income and GDP.
And and then the question is, where is he getting this from? William Petit, of course, is who I understood was a student in this college fellow.
Sorry. Oh, see. So the biographies of Hamilton, not me, figured this out.
A long time ago, while Hamilton went to war,
he was lugging around a two volume set of the encyclopaedia the Universal Dictionary of Trade and Commerce written by mouth.
I passed away and he talks about this later in his life, he said.
It's like the best book you ever read, and it was really influential and passed away.
For those who don't know, here's the connexion again.
So Passed Away begins his kind of political career, as you know, a great pamphleteer for the Royal African company.
And there you see how he's oftentimes using the political arithmetic of Petty
in order to kind of calculate the annual gain by the nation of Negro labour.
And then later, he kind of talks about this. And now what I'm trying to argue here is not that slavery is the founding of GDP or anything like that,
but that in many ways was the way in which these ideas transferred from one area in the world England in this case to another area in the world.
The United States also want to be very clear that Alexander Hamilton was against slavery. He didn't think.
But what I'm arguing here is that it changed the way he viewed the world, whether he liked it or not.
It changed him. But slavery is not the only story here.
And again, I'm I wasn't even talking necessarily only about slavery. I was talking about very specific kind of capital intensive Caribbean slavery.
Again, the tobacco slavery. Hamilton sends these letters out to the Virginia Flanders, and they don't really know anything, either.
And if you know anything like a little briefly about tobacco, it's, you know, it's very easy to grow.
It's not very capital intensive. It was just a different way of kind of seeing and calculating.
But I.
I don't think that's the only reason that Hamilton was attracted to this world, so just briefly before I kind of move on to the final aspect of this,
I just want to talk a little bit of what are the other kind of forces that are leading Hamilton to think in this new kind of proto GDP way.
And I think one that people don't talk enough is about is sovereign debt. I think that Hamilton was, of course, just created.
This giant national debt has begun to constantly imagine the United States as an investment.
You know, how many people are that? How much can they earn each year? How can we pay off our debt through these bonds?
And I think that changes the way you think of of a nation.
You begin to think of its citizens as this kind of income generating little kind of money-makers banking.
Of course, how can we not talk about banking when we talk about Alexander Hamilton?
And here that gets to the last big point I'm going to make,
and I think here we do have to make a very important distinction between money and capital.
So clearly, money was something that was very, you know, developed in the United States in this time from from colonial times.
I would argue that the money in colonial times is more of like a government infrastructure than it was necessarily a capital.
It was. That's how it was imagined. It's more like we're going to build roads, but we're also going to need some money in order to have this trade.
But that's not the way Hamilton thinks of money, or that's not how he wants it.
He wants to turn money into capital. He wants to turn money into more money. It doesn't just facilitate trade, but it actually is these investments.
And so he kind of, you know, complains that these Americans way of again, this is this intellectual divergence that I'm trying to trace that these,
you know, these Americans, they kind of are thinking of it only as an instrument of exchange, you know, and that's not enough for him.
It's dead stock. That's what he calls it.
And what he wants to do is he wants to allow it to acquire life and active and produce productive quality, and only a bank can do that.
Basically, what you need is an institution where savers can deposit their money and then someone else will come and invest it.
And so act of wealth is a term that comes up a lot in Hamilton. I think basically that's his word for capital in many ways.
And then finally, of course, one of the reasons he's looking for all this data is because he himself is personally invested in bringing the
industrial revolution to American shores alongside these kind of productivity figures that he's collecting on the side,
not part of his professional, but on the side is like a capitalist. He's also collecting wage data,
and he's already beginning to try to see what's going to be the difference between how much these people produce and how much they actually earn.
So I can, you know, make a nice profit.
So obviously, I think there's a definitely manufacturers also need to imagine output and begin to think of the world in its terms in order to profit.
And so I get to the second point here why this great investment,
intellectual divergence and and I call it in my book that I wrote two years ago, I call it this idea of investment talent.
It's again, all the things that I've just discussed kind of seeing the world as a series of capitalised investments
and imagining whether people or land or natural resources or time itself as an income generating asset.
And the only way I can do that is if I begin to measure, you know, how much it's going to produce for me every year.
And then of course, from that I can also, if I want to, I can capitalise that and turn it into a value for for wealth now.
And they're all. Hamilton doesn't do this so much, but there's, of course, a very popular exercise that's beginning to take place amongst capitalists,
whether it's real estate or other forms of investment in these times.
And so I just want to end by the other by talking about the other side of why is Hamilton's vision so foreign to most Americans except for again,
by the way, if he had sent the letters to South Carolina, I think he would have gotten much better answers. But he didn't.
He sent it to Virginia. Another plane never sent it to the the big planters in South Carolina.
So first of all, I want to say this is not because the American yeoman farmer was not market oriented.
I think big mistake that I will say the American Left has done in historiography, not now,
but in previous years was to kind of create this romanticised version of the self-sufficient farmer.
Whereas I think the more important dynamic here is between markets and capital or between commodification and capitalisation.
So the American farmer or America, or I would say Colonial America is one of the most commodified societies on Earth.
The first thing America basically does is chop up its land and commodify it. Slaves are commodified.
If you look at, you know, probate records from the 18th century, a lot of Americans are buying and selling commodities.
And yet I think there's a very big difference between markets and capitalism.
I think you can have markets, even a fairly highly market society, but it's not capitalism, because at the end of the day,
the way these people were imagining their world was mostly through exchange and not investment.
It wasn't so much this idea of I'm going to, you know, invest money and then kind of imagine this return.
But it was more just these kind of exchanges.
And one of the ways I think you can show this is their account books, which are filled with monetary markings.
They're constantly, you know, writing down like, you just mowed my lawn for two bucks and stuff like that.
But they never, ever, ever, almost ever aggregate these together.
They could write and they're, you know, they could say, Let's figure out, you know, how much they never do this.
They're only creating these accounts in order to have these market transactions because of course, money is fairly scarce.
And so I think that's kind of like evidence of like. And again, this this I don't want to get into like questions of profit here.
To me, it's more about this kind of act of aggregation. Are they even trying to calculate their annual product?
And the answer? I would argue, is no. And then the last thing I'll just say about this kind of divergence is that I think one of the
reasons we see this here is because of the way American agriculture developed hardly any rent,
any wages or any capital at this point in American agriculture.
So you know, that famous triangle that Adam Smith and Ricardo always talk about, about their aristocrat and the farmer and the wage?
This does really almost doesn't exist. There's some tenant farming United States, but it's not, you know, the actual.
So it's I think it's it's very hard for Americans to even imagine these categories
because they pretty much do not exist in the world that they're seeing.
It's very hard for them to calculate the produce of their land or the productivity of their land.
So just to give you example, William Petit, the way he calculates land productive use.
Right? Well, what are you going to do? Nine states there is no rent. OK. Most both of these people don't even know how much their land is worth.
They bought it, you know, 30 years ago or they inherited. They're not usually planning to sell it.
Maybe they have some vague idea of how much they're going to get for it. But again, that's more of a market price.
That's not this idea of rent, which is just this annual kind of flow of income.
They just they're not thinking in those terms the same thing you could say about capital.
You know, you don't have these, you know, large investments in mortgages like you have.
Again, back to the Caribbean.
So again, for someone like Hamilton who was born in this world, well, I really do think it's like ground zero of Western capitalism in many ways.
It's just a very kind of natural. And so I can see why he was so attracted to William Petty and political arithmetic and all these things.
But but for Americans, you can even look at Ben Benjamin Franklin and the way he kind of looks at William Petty.
It's a very different way of kind of seeing. And I think I'm just going to very, very briefly, do I have like a minute?
I know we're supposed to talk about the end of the world.
So. So just very briefly, I want to say that Hamilton, second hand man, he's the deputy secretary of the Treasury.
The man who actually had to sit and do as Joe was talking about the dirty work of
collecting the statistics and who later is in charge of the 1810 Census of Manufacturers,
the first census of manufacturers. So his name was TED Scopes.
And he also, through this kind of statistical work that he's doing for Hamilton, develops this kind of vision.
I would argue that most Americans don't have.
And when he realises what's going kind of the future of America, he decides that he's going to buy up all of the land in north.
Is it north in northeastern Pennsylvania, which has large deposits of coal because he's, you know, imagining that the industrial revolution is coming?
And while he dies penniless because he, you know, invest all this money in the industrial revolution does not yet come.
I can promise you that his grandsons are very happy. The Kochs becomes one of the larger coal companies in the world, and they begin.
Poisoning our world and parts of that, obviously, I would argue, are a certain vision of growth that we've been talking about that in recent days.
Thank you very much.