Everything I have written so far establishes that capitalism is a socially and historically constructed concept, an emotionally loaded term whose proponents or antagonists invest it with assumptions based on their political or ideological orientations. Harsh or defensively self-righteous moral judgments have framed many of the assessments of this “contested truth,” which is fundamental to discussion of modern history, politics, and the contemporary economy. Of course, there have been plenty of reasonable moral objections to the particular ills of the existing economic order. That notwithstanding, polemicist critiques of capitalism have reflected and contributed to failures to understand what is truly distinctive about it.

The concept of capitalism appeared at a time when Europe had decisively pulled ahead of the rest of the world militarily and economically by making the sudden transition to an urbanized industrial existence. The concept was central to the critique (and later defense) of what historian William H. McNeill termed the “Victorian edifice,” an architectural metaphor for the self-congratulatory nineteenth-century European worldview. Capitalism's detractors wanted either to open the doors of the building wider or to pull it down altogether, but they, too, held the same presuppositions as everyone else about the bedrock foundations on which capitalism stood. Whether for it or against it, commentators “emphasized ‘capitalism’ as a new mode of production in Europe,” ignoring the many identical patterns of economic life and behavior that existed elsewhere in the world. The opponents of capitalism were just as “supremacist” as the supporters of capitalism because they, too, automatically accepted the notion that while capitalist Europe was commercially dynamic, non-capitalist Asia had long been in a state of civilizational decay.

This manner of thinking went back to the early Enlightenment. For many of the cosmopolitan philosophes of the eighteenth century, the high point in the evolution of civilization had been reached in Europe's “commercial society,” specifically the Dutch Republic and England, both wealthy nations governed by law and reason where, in the words of Adam Smith, “every man … lives by exchanging, or becomes in some measure a merchant.” For the next century or more the once-flourishing but now stagnant continent of Asia acted as a foil highlighting the exalted position Europeans saw themselves as occupying.