The Origins of Capitalism: Europe, China, and Arabia – UII Management Study Program

Origins of Capitalism: European, Chinese and Arab

Suwarsono Muhammad, DRS., MA

June 18, 2023

Stating that Arab Islam as religious capitalism or trade capitalism is clearly different. Both types of capitalism were discovered long before (industrial) capitalism in Europe. Commercial capitalism is very likely to be closer in character to industrial capitalism. But Islamic Arab religious capitalism seems to have much more important differences. Besides the similarities in the modes of capital accumulation through markets, profits, and the recognition of property rights, religious capitalism has components of justice, ethics, and at the same time involves the state and society. The market, the state and society have a balanced strategic role in regulating the capitalist economic system. Capitalism is not only owned by capitalists.

The main polemic is related to the time of birth: from the most popular and very Europe-centric at the end of the eighteenth or nineteenth century to a possibly earlier time, namely in the sixteenth century (Wallerstein, 1974). In fact, it has also been found and is now increasingly gaining wider academic space, namely trying to trace its birth to far earlier times, for example related to trade capitalism during the Ottoman and Arab Islamic empires as well as China (Anievas and Nisancioglu, 2013; Banaji, 2007, 2003; Rodinson, 2007). Don't try to ask about the future of capitalism. It is certain to find a variety of answers that are far more complex and at the same time very contradictory: from predicting its permanence with the economic cycle of ups and downs to the possibility of replacing it with another system – socialism or another system that is currently unknown.

The explanatory variable for the emergence of the polemic may vary. One of them is because of the ideology variable. At least that is what is clearly stated by Kocka (2010: 8-10) that people are reluctant to struggle and struggle and even refuse to use the term capitalism because they judge “….too ideological, partisan, and not quite scientific.” It even went so far as to say that “Sometimes "capitalism" became the explanation for everything bad in the world,” and therefore do not be surprised if then the meaning of the concept of capitalism becomes wider, it seems unlimited because it experiences inflation and is overburdened as the accused (overloaded). The burden of being accused is not limited to Western countries, but is also common in developing countries, especially when these countries are in an economic crisis or when economic inequality is so prominent. As a result, do not be surprised if then "Its analytical power sometimes disappears behind its polemical use in political-ideological battles."Some of them chose a more lenient attitude by trying as hard as possible to avoid using the term capitalism or "….. by treating it with suspicion or outright hostility. "

However, this does not mean that the theme of capitalism with all its branches of discussion has not been visited by academics at all. There are those who give up (some of) their energy to recognize the theme that Polanyi (1957) calls "the Great Transformation" That. The birth of capitalism is seen as a curtain barrier that distinguishes between before and after. Kocka (2010: 10-11) said that the end of the Cold War resulted in positive changes in the academic climate, at least in the last two decades. Capitalism is no longer placed in the most marginal and despicable position, but now it is possible to evaluate capitalism with a positive tone and connotation, especially as a concept and academic analysis knife. He further said that “….. it is much less a flag or a political signal than it used to be for decades,” to the point that someone wrote about the variation “the happy version of capitalism.".

This conducive climate looks so real when it is found that there are so many scholars who are seriously re-examining the history of the birth and development of capitalism, even though there are still half-hearted complaints here and there. First, the lawsuit was filed for not fully seeing the birth of capitalism as a typical European phenomenon, but instead as a world phenomenon: capitalism can be born anywhere. Second, efforts to review are also aimed at not linking the causes of the emergence of capitalism solely to the factors of industrialization and the Industrial Revolution. Trade and the commercial revolution, then, were put forward as the causes for the birth of commercial capitalism, which had taken place much earlier.

As a result, and this is the main thing, it is stated that capitalism is now declared not (only) born in the eighteenth or early nineteenth century but has also been discovered much earlier – around the 8th century AD in the context of Arab Islam – which manifested itself in trade capitalism. There needs to be a firm distinction about the birth of industrial capitalism in Europe and trade capitalism that was born elsewhere: Asia and the Middle East. The birth of capitalism now occupies a position as one of the most fertile fields of academic study.

One of the most important and significant estuaries of the lawsuit is the emergence of a new understanding that during the early Islamic period, more or less at the end of the 7th century or the beginning of the 8th century, trade capitalism was born and developed and continued until the 17th century (Banaji, 2016: 207-221). ; 2007; Cizakca, 2011; Hick, 2006; Goitein, 1968: 217-380; Moore and Lewis, 2000; Rodinson, 2007). It can be said that trade capitalism was unique during the Islamic period, some even stated that its embryos had begun to be seen since the ancient Arab era (Bryce, 2014; Hoyland, 2002; Ibrahim, 1982; Muhammad, 2017). It is not surprising that Hodgson (1970: 99) describes that up to the 17th century “….. the Islamicate society that was associated with the Islamic religion was the most expansive society in the Afro-Eurasian hemisphere and had the most influence on other societies. This was in part because of its location, but also because in it we were effectively expressed certain cultural pressures – cosmopolitan and egalitarian (and anti-traditional) – generated in the older and more central lands of this society. In this world role, the Islamicate society and culture demonstrated persistent creativity and growth.”

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Suwarsono Muhammad, DRS., MA

studied Master of Arts in Strategic Management (MA) at the University of Hawaii, after previously obtaining a bachelor's degree (Drs.) from the Islamic University of Indonesia. He has an interest in teaching Strategic Management courses. His research topic of interest is Strategic Management

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