Capitalism of finitude: pessimism and bellicosity

Review of Arnaud Orain’s "Le Monde Confisqué"

There is nowadays a broadly shared view that the era of neoliberal globalization is at its end. (I have written about that here.) It is much less clear what type of international and domestic system will succeed neoliberalism. There are many seeming candidates because, to paraphrase Yogi Berra, it is difficult to make predictions especially about the future. Economic history however can help. The new book by the French economist Arnaud Orain takes us in that direction by looking at the cyclical nature of world capitalism in the past four centuries. We are entering, according to Orain, into one of the periodic readjustments of capitalism, from free trade to the “armed trade”, characteristic of mercantilism. Moreover, in Orain’s reading of capitalism, it is the epochs of mercantilism that were more common than the times of laissez-faire and free trade. He considers three such (mercantilist) periods: European conquest of the world (17^th and 18^th centuries), 1880-1945, and the present.

The most important features of mercantilism are that it regards trade, and perhaps the economic activity in general, as a zero-sum game, and creates the world which is never in full peace nor in full war. The normal state of mercantilism is constant conflict, whether fought by arms or by a multitude of other coercive means (piracy, ethnic cleansing, slavery etc.). Mercantilism implies (i) control of the ways by which the goods are transported which, in the past as now, means the control of the oceans, (ii) preference for vertical integration of production and trade which implies monopolies and monopsonies, and (iii) the struggle for land either as a source of raw materials and food (especially when Malthusian ideologies take over) or of land in the form of harbors and entrepots to complement naval power. The book is accordingly divided into three parts (each consisting of two chapiters) that review successively naval competition, monopolies, and the land grabs in the two previous mercantilistic eras. This is the struggle for the seas and the land; hence the title of the book Le monde confisqué.

One of the main ideological roles is assigned to the American naval strategist, Alfred Mahan who has formulated what Orain defines as the two “laws”. The first holds that there is a natural progression of a country from being a big producer of goods, as China is now, to needing to ship these goods abroad, and thus to control naval routes. It must become a naval power or ideally a naval hegemon. It also needs to create a set of entrepôts to support its naval deployment. The second Mahan’s law is that there is no clear difference between commercial and war navies. Since trade is “armed”, the distinction between the two largely disappears, and Orain provides many historical examples where the Dutch, English, Swedish, Danish and French whether commercial or war fleets played both roles. This establishes the general atmosphere of “ni guerre, ni paix”. The wars are, one could say, “tous azimuts” but without depth.

Mercantilism is the capitalism of “finitudes”, a very nice term introduced (or perhaps coined?) by Orain which can refer to the realization that natural resources are finite or that the economic activity is perceived as a zero-sum game. (I will return to this at the end of the review.) Free trade would, by implication, correspond to the eras when our view of the world is more expansive, broader and more optimistic: we tend to believe that there will be (eventually) enough for all. Mercantilism is the world such that “there would not be enough for all”—the concluding sentence of the book.

Orain presents an extraordinary rich historical canvass of the European conquest, and intra-European “demi-wars” in foreign lands during the 17^th and 18^th centuries. Companies such as the Dutch, British and French East India, West Africa and the like play the key role. Orain highlights that the companies had often taken government functions (most famously in the case of East India Company), by extracting the “regalian” rights from home governments, and by imposing by force themselves over the governments of the conquered lands. Although I knew the general contours of the then naval competition, I found in the first two chapters a lot that was new for me (especially with regard to the French conquest of West Africa) and that requires more than a passing acquaintance with naval strategy. Presently, China and its state-owned companies (COSCO Shipping especially) are seen as continuing along the same path as the Dutch VOC and the British and French East India Companies. China also, according to Orain, obeys the first Mahan’s “law”: from a continental industrial power it must expand its influence over the seas in order to ship and sell its wares. The quantitative naval increases of China’s various fleets (in the number of vessels and their inter-operability between commercial and war-like functions) and a corresponding decline of the American fleets are underlined: out of seven US shipyards capable of producing big ships in the 1990s, only one remains.

I would like to focus on two issues. First, an entirely different reading of history of economic thought implied by the view of capitalism as a mercantilist system. The French pre-Physiocratic writers such as Forbonnais; Grotius, the legal adviser to VOC and justificator of armed trade including seizure of foreign-owned ships; Gustav Schmoller and the German Historical School, are now crucial references. From the orthodox canon, only Smith (who, I think, is inevitable because his writings stand at the exact ideological and chronological borderline between free trade and mercantilism), Marx, and Schumpeter “survive”. Ricardo, Marshall, Walras, general equilibrium theorists, Keynes and many others are hardly mentioned, or go unmentioned. This is not a caprice of the author. It follows directly from his reading of capitalism as a system of coerced production and armed trade. A conventionally educated economist enters an entirely different world: like in a hall of distorted mirrors, many features are familiar but are shown in a new, and seemingly, warped way, while many others are entirely new.

My only qualm (but it is not a small qualm) is Orain’s explanation of the switch to the mercantilist “finitude”, especially at the end of the book dealing with the control of land: it is presented as being due to the exhaustible nature of resources. I find this unconvincing. The current transition from free trade to mercantilism, and to the perception of trade as a zero-sum game is not due to some observable change in the availability of natural resources. The world has not suddenly discovered in the past five or seven years that there will not “be enough for all” in a physical sense. Rather, it has discovered this in an ideological sense. Why? My argument is that the transition to the capitalism of finitudes has happened not because of our realization of the forthcoming actual scarcities but because of the rise of China, and Asia more generally. The rise of China, the new and big player on the international scene, with a political system different from the Western, is a hegemonic challenge. Keeping neoliberal globalization going on as before—the West has realized—means an assured eventual domination by China. The perception of Western decline (if nothing is changed) has moved the West to a more radical and bellicose stance where the world is indeed seen as finite because “if there is more for China there is less for us”. The evolution that Orain so aptly describes is not due to the “real” physical change in the amount of resources but to the old-fashioned strategic competition for the primacy in the world. The causes behind the move to mercantilism are not “objective” and physical but political.

P.S. This last point is, by the way, the topic of my forthcoming book The Great Global Transformation: National Market Liberalism in a Multi-polar World, Penguin’s/Allen Lane, November 2025.