The Economic Transformation of America: 1600 to Present

Fernand Braudel, a modern French historian, sees three intertwined but distinguishable strands of history. They are: material life, economic life, and capitalism. Material life, he says, sets “the limits of the possible”. Material life means the routines of daily work, the everyday tasks that we perform so that we can sustain ourselves. It covers the means by which we travel to work, the efforts we perform there, the products we make in use, etc. Without including knowing how material life has changed, we would not be able to understand the economic transformation of America. Economic life mainly encompasses market activity, which includes the jostling of buyers and sellers on the market square, the complex acts of offer and bid, purchase and sale that make possible the essential social relationship of exchange. The strand of our overall theme is the evolution of our involvement with the market, both as buyers of goods and as suppliers of our energies. A vital part of the economic transformation of America is the enlargement of economic life. The third strand is capitalism itself. The best way we can gain an understanding about the nature of capitalism is if we focus our attention on the three elements that it introduces into material and economic life: capital, the market mechanism, and the division of economic and political activity.
1) Capitalism is orientated to the continual accumulation of material wealth – as capital. The material wealth in capitalism is in the form of productive capital. Wealth is used to build machines and equipment. The sole purpose of the wealth is to create still more wealth. Consequently, capitalism is expansive in terms of the value and volume of its output. This character of capitalism is the source of its extraordinary historic impact. The capitalistic force dominates the economic transformation of America.
2) Under capitalism, the production and distribution of wealth is entrusted to the market mechanism. The

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