Book Review: The Spirit of Capitalism

Greenfeld, Liah. The Spirit of Capitalism: Nationalism and Economic Growth. Cambridge, MA: Harvard University Press, 2001.

The Spirit of Capitalism: Nationalism and Economic Growth is an ambitious book. It is at once an extension of the author’s earlier work Nationalism: Five Roads to Modernity; a tripartite defense of sociology as a discipline, of market forces, and of Max Weber; and an analysis of nationalism and its relationship to sustained economic growth. Greenfeld can be lauded for such ambition, as well as her ability to execute such a complex task. While her central argument on national identity in the United States and its relation to capitalism is persuasive, the details upon which her argument rests often are not. A similar problem troubled Nationalism, in which the central concept—that “nation” is fundamentally an idea and as such is both transmissible and flexible—was convincing, but the details, the individual analyses of the book’s five case studies, became progressively weaker the further east of the Thames she ranged.

Greenfeld contends that the successful modern economy is characterized by a “sustained orientation to growth;” that is, an ongoing propensity to expand, with expansion bringing increased prosperity. She encapsulates this commitment to growth as “the spirit of capitalism.” The “spirit,” the sustained orientation, is generated by nationalism, “the economic expression of… collective competitiveness… itself a product of [a nation’s] members’ investment in the dignity or prestige of the nation” [473]. Nationalism imparts a commitment to economic growth and an intellectual and emotional investment in continued growth. The pinnacle of the modern growth-oriented economy is the United States. The roots of American economic civilization were transplanted from English nationalism and its notions of liberty and equality, and on new soil sprouted a commitment to the belief that it is the destiny of economies to grow, and that it is the task of every patriot to help them do so. This “collective competitiveness” has been able to thrive because of the belief in the equality of each individual national member, and the concomitant growth of an American society unimpeded by social barriers or ideas of collectivist leveling. Not all nationalisms or forms of national consciousness are conducive to economic growth; indeed, some are antithetical to it. The process of economic growth itself is contingent, and cannot be predicted or induced by theoretical economic formulae. Indeed, a “modern economy” oriented permanently toward “sustained growth” cannot be explained only by the science of economics itself. Economics as an academic discipline and an explanatory field—itself a product of specific contexts—tends to mask the real engine of economic growth (competitive nationalism) under the aegis of scientific rigor. A commitment to ideals other than competitive individualism could slow or derail economic growth. As growth is based on beliefs and actions resulting from those beliefs, it is neither totally self-sustaining nor imperishable. Thus, nationalism oriented to economic growth—where the competitive economic health of the nation is part of the national ideal and national resources are devoted to its maintenance—is the “spirit of capitalism” responsible for sustained economic prosperity.

In short, national thinking makes economic growth possible by investing the latter with positive values. In The Spirit of Capitalism, as in Nationalism, “nation” is a concept that serves to structure thought: “Nationalism is a form of social consciousness, a… cognitive and moral organization of reality” [24]. Articulate a concept of nation sufficiently, and members of a nation-in-embryo will begin to employ that concept to develop an identity oriented to the original conception(s). Greenfeld’s methods in Spirit for tracing manifestations of national consciousness will be familiar to anyone who has read Nationalism. A particular expression of a concept becomes an idea that can then “become a reality with the power to breed new ideas and transform social structures.”1 Nations evolve through an intellectual process that is contested but also general, in that one need not be explicitly engaged in “nation-making” in order to in effect be doing that very thing. This tangential process is important for Greenfeld in that she can use it to demonstrate how ideas articulated in obscure places come to be widely accepted.

Despite being convinced by her conception of nation-as-idea, I find Greenfeld’s tendency to treat every use of the word “nation” as an indication of full-blown national consciousness flawed. As an example, consider her discussion of Sir Thomas Gresham, founder of Gresham College and financial advisor to Queen Elizabeth. Greenfeld directly calls him “a nationalist” [35]. Her evidence for this appellation comes from two sources. First, from a poem “probably by William Glanvill” [489 n. 4] not otherwise sourced. Glanvill claimed Gresham acted for “the publique good oth’Nation,” which is not the same thing as Gresham articulating his own commitment to an English nation.2 Second, Greenfeld cites at length G. B. Hotchkiss’s 1931 Introduction to John Wheeler’s 1601 A Treatise of Commerce. Hotchkiss does not explicitly call Gresham a nationalist anywhere in his Introduction.3 What about Gresham’s policies?

Gresham advised Queen Elizabeth on economic measures he thought would benefit the realm, including disenfranchising the Hanseatic League in favor of “your own merchants.”4 Greenfeld interprets this advice as “a stark example of nationalism being made an explicit foundation of the economic policy of the state” [36]. But Gresham was also acting out of self-interest. Hotchkiss notes “the plea of English trade for Englishmen was stressed for strategic reasons.”5 Attacks on the Merchants Adventurers, with whom Gresham was associated, accused them of insularity, of being closed-in; identifying themselves with a broad “national” public was a logical counter-argument, masking private good in the cloak of public/national gain.6

Greenfeld reasons further that the Merchant Adventurers must have been “nationalists” because their policies did not work to their immediate benefit. They were acting out of the future good of the nation rather than pure self-interest. However, economic failure was not their intent, a point Hotchkiss makes clear.7 Greenfeld thus transforms the company’s mistaken economic assumptions into a post hoc attribution of virtue.

Given that “the national good” can be used as a rhetorical phrase to cover private advantage, it is difficult on the basis of the evidence Greenfeld provides to declare individuals “nationalists” simply because they employed the word “nation” (which Gresham does not as he is cited in Hotchkiss—it is the poem attributed to Glanvill that associates Gresham with the nation), even if it is plausible to say that in doing so these individuals contributed to a wider debate about and construction of a nation. It is one thing to argue that someone contributed to the conversation that builds a nation, but another to imply that someone who did so inadvertently is the equivalent of one who does so consciously. For Greenfeld these are one and the same. Surely the consciousness of participants in the process of national thinking is vital to comprehending the nature of nationalism, and finessing the distinction rather than eliding it would better serve Greenfeld’s argument.

Furthermore, by implication “the spirit of capitalism” as seen in Gresham and the Merchant Adventurers could be interpreted as the masking of naked self-interest in the rhetoric of national selflessness. If so, then capitalism works because people have and continue to believe in the veneer rather than the actual reality. If it is the deceptive “spirit” that shapes reality (even if that deception has brought increased material prosperity to many and fantastic wealth to a very few), then is not the process of getting people to believe in the deception more important than the ostensible ideal? After all, putting up a public façade announcing allegiance to competitive capitalism while striving for competition-stifling monopoly seems as characteristic of capitalism as honest competition. And what about China? Greenfeld does not consider the case of this present-day economic giant in which competitive economic growth is being accomplished under authoritarian rule and, more significantly, under formal adherence to an anti-capitalist ideology (although it is clear that its growth cannot yet be described as sustained, and so perhaps this analysis awaits historians and sociologists of another century).

Any book with the breadth and ambition of The Spirit of Capitalism can suffer the death of a thousand cuts from specialists, and it would be unfair to condemn the entire work from the narrow point of view of my own discipline. However, as a specialist in nineteenth-century Imperial Russian history, I find that Russia continues to be ill served in her work, as it was in Nationalism. Greenfeld feels that Russians are stubbornly committed to a collectivist mentality that is anathema to economic growth. She could consider Jonathan Grant’s Big Business in Russia to see that Imperial Russian businessmen behaved similarly to their western counterparts.8 Greenfeld discounts the reality of generational change in Russia, the probability that young Russians growing up in a currently capitalist country with access to international business models will discard the old clichés and create a new “spirit” of Russian capitalism.

The Spirit of Capitalism is also marred by certain infelicities of tone that the reviewer found distracting and ultimately irritating. Three illustrations will suffice. In the opening paragraph of her acknowledgements, Greenfeld mentions an anonymous reviewer who was unable to determine Greenfeld’s academic discipline after reading The Spirit of Capitalism. Greenfeld smugly praises herself for this feat of disciplinary blurring. What purpose does such self-congratulation serve, other than drawing attention to the author?9 A tone of superiority is evident when Greenfeld notes that Wheeler’s 1601 Treatise on Commerce “was the first [tract] to spell out and draw attention to the implications of [the] egalitarian national principle for the status of the trading classes” [41]. After this sensible proposition, Greenfeld opines “Not everyone was equally perceptive [as Wheeler], and this might have been the reason for the efforts of those numerous champions who defended the dignity of commerce over the next two centuries. Their ‘apologies,’ however, were even less humble than his, and with time grew openly boastful. Their tone, in fact, suggests that in these later cases, the defense was often undertaken not because it was needed but because it was sheer fun.” It seems specious to argue that people should have recognized “the truth” of the superiority of commerce in 1601, and the “sheer fun” wisecrack ignores the rich context of the intellectual history in which these arguments appeared. Greenfeld projects here the unedifying image of a superior intellect taking potshots at inferior minds. Finally, in discussing higher education in the middle of the nineteenth century in the United States, Greenfeld observes, “At the time, political correctness was not a major consideration, yet, rather like today, college teachers were often hired not on the basis of subject competence . . . but on the grounds of sectarian affiliation” [457]. Such stale jabs at “political correctness” contribute nothing to her larger argument.

The Spirit of Capitalism will likely sway neither Greenfeld’s detractors nor her champions from their camps. Anyone unconvinced by the methodology of Nationalism will likely remain so. Anyone who finds Greenfeld’s breadth of interests, skill at synthesis, and willingness to explore big questions felicitous will appreciate the book. As a work on nationalism, The Spirit of Capitalism can perhaps best be oriented as a deepening of the methodology first put forth in Nationalism: Five Roads to Modernity, and an intriguing contribution to the meaning of nationalism in an American context.


1) Nationalism: Five Roads to Modernity (Harvard University Press, 1992) 44.

2) By the same logic, every American president is a tyrant, having been called so in print on more than one occasion.

3) See George Burton Hotchkiss, “Introduction” in John Wheeler, A Treatise of Commerce (New York University Press, 1931) 3-113. Gresham, as he is cited in Hotchkiss, did use the term “commonwealth.” By Nationalism’s standards that makes him a nationalist, as “commonwealth [is a] synonym” for nation. Nationalism, 32. Gresham himself is not mentioned in Nationalism. For an orientation of Gresham in the rhetorical conventions of his age, see Lynette Hunter, “Civic rhetoric, 1560-1640” in Sir Thomas Gresham and Gresham College, ed. Francis Ames-Lewis (Ashgate Publishing Company, 1999) 88-105.

4) Hotchkiss, 41.

5) Hotchkiss, 14.

6) “Probably no method of propaganda by private companies has been resorted to more frequently than that of identifying their private interests with the public interests of a nation.” Hotchkiss, 73. Or, as Al Capp put it, “What’s good for General Bullmoose, is good for the USA.”

7) Indeed, it could be argued that the Merchant Adventurers were acting against national interests. Hotchkiss, 111.

8) Big Business in Russia: the Putilov Company in Late Imperial Russia, 1868-1917 (University of Pittsburgh Press, 1999).

9) This reviewer wondered how carefully that early reviewer read the book. A defense of sociology as a discipline is stamped all over The Spirit of Capitalism, to the extent that it constitutes one of the work’s sub-themes.