Before Capitalism: How This System Took Over the World

SPEAKER_00 0:00 Many people recently have been talking about the death of capitalism, that we are on the brink of its collapse. Some people are even hoping for it. I've heard people call capitalism a cult, and I guess that's because we're led to believe it's the only way to exist, that it's the best way for society to function. But capitalism wasn't always here. So I wanted to know, what did we have before it? And if it replaced everything that we had previously, why did it win? I'm Molly, and this is what we did before. Welcome back. So humans have always traded. They've shared, they've cooperated long before profit or private ownership ever existed. We've lived under systems built on trust, faith, obligation, even generosity. Some were fair, some were cruel, but all of them tried to answer the same question. How do you get people to work together when their needs and power aren't equal? Over time, those systems got bigger and more complex. And somewhere along the way, one of them found the secret ingredient, scale, the ability to grow endlessly. And that is how capitalism rose, and also why it's now being questioned. Because while it's driven the fastest period of innovation in human history, it's also left us wondering how much growth is too much? So in this episode, we're traveling from prehistoric campsites to medieval fields, ancient empires to utopian experiments, tracing how people lived, worked, and traded before capitalism. So in the very earliest days of humanity, there wasn't anything resembling an economy as such. Early humans were hunter-gatherers, of course, living in small nomadic groups where resources like food and water and shelter probably would have been shared communally. This wasn't because they were just better people or less greedy than we are today. It was about survival, not idealism. When everyone's life depended on cooperation, greed could literally kill the group. There would have been no private property in the modern sense either. Tools were likely shared and no one owned the land. People simply moved with the seasons. I kind of imagine them like the Harfots in the rings of power, if anyone is still watching that. Studies of the Hadza people in Tanzania, which is one of the last remaining hunter-gatherer societies in the world, show that they share up to around about 80 to 90% of their food, and we usually take the Hadza to be a pretty good reflection of how early humans likely lived, with a focus more on cooperation than competition. In his classic book The Gift, anthropologist Marcel Moss argues that early economies revolved around reciprocity, systems of giving and obligation that bound people together. And among the indigenous peoples of the Kung San of Southern Africa, hunters are even teased when they make a big kill, a practice called insulting the meat, to basically discourage arrogance and keep egos and inequality in check. But as human groups grew larger and more settled, the economics of survival began to change. So the shift from hunting and gathering to agriculture around about 10,000 years ago changed everything. For the first time, humans produced surpluses, so way more food than they immediately needed. This opened the door to trade. Now I think many of us will have this image of uh barter being the main way people traded. You know, I'll swap my grain for your pottery or for your sheep. But actually, barter was probably never the main precursor to money. Anthropologist David Graeber argues that pure barter systems mostly happened between strangers or in emergencies. Within communities, people relied on credit and trust, not one-for-one swaps, which kinda makes sense when you think of it because some things would be quite odd to trade one-for-one. This sort of system played out long before coins existed. But the earliest forms of money were actually clay tablets in ancient Mesopotamia. They were used to record debts and grain rations over 4,000 years ago. These were essentially ancient IOUs managed by temple accountants. So rather than barter evolving into money, it was actually debt, the promise to repay, that laid the groundwork for economies. As civilizations grew, new systems emerged, often controlled by rulers, priests, or bureaucrats. In ancient Egypt and Mesopotamia, farmers handed over a portion of their crops as taxes or tribute. These resources were then redistributed, feeding soldiers, temple workers, and the royal court. It wasn't voluntary, but it did work, and centralized storage and redistribution created stability and power, of course. The Inca Empire in South America ran an even more impressive system called Mita, where citizens paid taxes through labor instead of money. They built roads, temples, and irrigation systems, and in return the state provided food and protection. The Inca managed this without a written language or currency, sustaining millions of people across a mountain empire. In fact, the Inca built over 25,000 miles of roads, all without money changing hands. And later, when the Spanish arrived, they twisted this very efficient system into a brutal forced labour regime for mining. Someone's always gotta ruin it, eh? Now, fast forward to medieval Europe, and a new system took hold: feudalism. Here, land was the main source of wealth. Lords owned vast estates, and peasants and serfs worked that land in exchange for protection and a share of the harvest. This wasn't a free market, serfs were a class of unfree peasants who were legally bound to the land that they worked and couldn't leave without their lords' permission. So social mobility was almost impossible and power flowed from the top down. But in the 14th century, feudalism began to crumble. The Black Death killed up to 60% of Europe's population, so suddenly labour was scarce and that had a dramatic effect. Workers began demanding wages, and lords, desperate for hands to till their fields, were forced to pay them, which all sowed the seeds of wage labour and eventually capitalism. In 1381, England's peasants' revolt erupted when workers demanded fair pay and freedom from feudal obligations, one of the first revolts against economic hierarchy. And feudal systems weren't unique to Europe. Japan's samurai-based order ran a similar hierarchy of land and loyalty. Funnily enough, this was developed independently of the European system without any direct contact between the two. Now, before capitalism became dominant, there were some early alternatives, and societies experimented with various different models. You've got guild systems, so in medieval cities, skilled workers formed guilds to regulate trade, set prices, and ensure quality. And these were precursors to modern unions. Now there were Islamic economic systems too, so during the Islamic Golden Age, trade flourished under moral guidelines. Charging interest was forbidden, but profit-sharing partnerships let investors and merchants share both risk and reward. Then you've got monasteries and communes. Some Christian monastic orders ran communal economies where property and profits were shared, and these could be considered early experiments in what we might now call socialized living. And then there's the indigenous gift economies. The Iroquois Confederacy, for instance, used longhouses to store and distribute goods according to need, not wealth. And then there were utopian experiments, like Robert Owen's 19th century community in New Harmony, Indiana, which aimed for a moneyless cooperative society. It didn't last, but it did inspire future socialist thought. So why didn't any of these systems survive? In short, they worked beautifully on a small scale, but they struggled to scale up. Guilds protected craftsmanship and stability, but they slowed progress. Membership was tightly controlled, innovation was limited, and as trade expanded across Europe, guilds couldn't compete with the flexibility of open markets. Islamic economic systems flourished for centuries, but as global trade became dominated by European colonial powers using capitalist credit and stop models, those more ethical frameworks were sidelined by sheer economic force. Monasteries and communes depended on shared faith and values. Great for unity but fragile when belief or leadership wavered. Without profit or competition to drive adaptation, they tended to stagnate or collapse. Gift economies, they worked incredibly well in small, close-knit societies where everyone knew one another, but once populations grew and social ties weakened, it became impossible to manage complex trade through trust and reciprocity alone. And utopian experiments like Owen's New Harmony often failed for the same reason that modern startups do, which is basically human nature. People disagreed, resources ran out, and without a profit motive to attract new investment or energy, that all kind of faded. So out of the collapse of feudal hierarchies and the limits of communal or moral economies, a new idea began to take shape. One that didn't rely on shared faith or tradition, but on incentive. It began quietly in merchant towns, in trade ports, in early banks and markets, but it would soon reshape the entire world. This was the birth of capitalism. At its simplest, capitalism is an economic system built on a few big ideas. First, private ownership. People and companies, not the government, own the businesses, land and tools that create wealth. Second, markets and competition. So prices are set by supply and demand, not by the state. Businesses compete to offer better stuff at lower prices, and that competition is supposed to keep the system efficient. Third is the profit motive, so people act in their own self-interest, taking risks and investing to make money, and in theory, that drive to earn ends up benefiting everyone. And finally, wage labour and growth. So most of us will sell our time and skills for wages, while those who own capital, like factories, companies, assets, things like that, they reinvest profits to grow even more wealth. Now, historians trace the roots of capitalism to the 16th and 17th centuries, during the rise of global trade and mercantilism. European powers expanded overseas, seeking profit through colonies and commerce. The enclosure movement in England, which privatised common lands, forced peasants off of shared farms and then into cities, creating the first class of wage labourers. Meanwhile, companies like the Dutch East India Company, founded in 1602, pioneered the joint stock model, selling shares to its investors. It was the world's first publicly traded corporation and it helped launch capitalism as we know it. At one point, investors even traded shares for nutmeg and cloves instead of cash, and by 1637, the Dutch experienced the first stock market crash in history, called tulip mania, when a single tulip bulb sold for more than a house. By the Industrial Revolution, capitalism had matured into the dominant global system, driven by private ownership, competition, and profit. Supporters say capitalism is what fuels innovation and prosperity, and it's quite clear that during the time without capitalism, technological progress was slow. It has indeed driven the fastest period of innovation in human history. In just the last 300 years, humanity's technological progress has outpaced the previous 10,000 combined. There's obviously major advances in science, education, and global trade that helped, but it's hard to separate capitalism from the massive strides we've taken in the last few centuries. But capitalism is increasingly under fire at the moment, at least based on my YouTube algorithm, with critics saying it concentrates power and deepens inequality. And the question is, do we really need all of this innovation to be happy? People regularly argue that this super fast rate of change is what's causing the ongoing crisis of mental health, and so alternatives are being searched for. And although capitalism is powerful, it isn't untouchable. So what else is there? Well, around the world people are reimagining what might come next. There are worker cooperatives where companies are owned and run by employees, like Spain's Mondragon Corporation, which employs over 70,000 people and shares profits collectively. There's the Nordic model of social democracy, which blends capitalism with strong welfare systems and public services, keeping markets innovative but inequality low. Then you've got post-growth economies, so critics argue that infinite growth on a finite planet is unsustainable. Countries like Bhutan, which measure gross national happiness instead of GDP, are exploring new priorities, so well-being rather than wealth. And pilot programs of universal basic income in Finland, Canada, and California show that guaranteed income can boost well-being and reduce stress, though it doesn't necessarily increase employment. There's also this growing movement of degrowth, which argues that maybe progress shouldn't always mean more. It challenges the idea that economies need to be expanding forever, because, as with the post-growth philosophy, when our planet only has so much to offer, endless growth might not be possible. In fact, it might be destructive. Since a degrowth economy deliberately slows down production and consumption, it probably means a slowdown in technological advancements too. With fewer incentives to create the kind of high-speed, profit-driven innovation that capitalism thrives on, you probably wouldn't see the same frantic race to build the next iPhone or social media app. But that's sort of the point. Degrowth isn't anti-innovation, it's anti-wasteful innovation. It argues that a lot of our current progress isn't making life any better, it's just making it faster, busier, and more unequal. So in a degrowth world, innovation might look very different. Instead of chasing profits or novelty, technology would be directed at solving real human and ecological problems, like renewable energy, regenerative agriculture, or healthcare, rather than convincing us to buy a new phone every year. Alongside degrowth, there are also other visions emerging like donut economics, which aims to balance human prosperity with environmental limits. There's the circular economy, which replaces waste with reuse and regeneration, and technological abundance movements that imagine a world where automation and AI provide for everyone, freeing us from traditional work altogether. What would you do if robots sorted everything and you could just kick your feet up? Whether any of these systems will replace capitalism is impossible to say, but history shows that no system lasts forever. And just like the ones before it, capitalism might one day be remembered as just another stage in humanity's ongoing experiment to find a fair and sustainable way to live together. Let me know what you think is coming next, and if you enjoyed the video, please support the channel by liking and subscribing. I'll see you next time.