David Priestland: The Sun Sets on the Modern Merchant Class

David Priestland teaches modern history at the University of Oxford. He is the author of Merchant, Soldier, Sage: A History of the World in Three Castes, new from the Penguin Press, as well as The Red Flag: Communism and the Making of the Modern World (Penguin, 2009).

As we struggle to emerge from the 2008 financial crisis, we may now have enough distance to understand its real significance.

Immediate judgments were often very flawed. For example, then-president of France, Nicolas Sarkozy, brandished a copy of Das Kapital before the press to show his deep, structural understanding of the catastrophic events in the international markets. The implied message: Capitalism is doomed, as anyone can see. But there was no Marxist revival, and capitalism has not collapsed. Indeed, in the global East it is positively flourishing. Capitalism seems to have an assured future, at least in the medium term.

More influential than Sarkozy's structural explanation is a moral one. This has been a short-term crisis caused, the argument goes, by greed and recklessness—whether of bankers or borrowers, depending on your political outlook. And yet in some ways, Sarkozy has a point that the moralists ignore. Our recent model of capitalism has involved spiraling inequality and unsustainable trade and financial imbalances. Debt, it is clear, was simply obscuring deep problems within the world economy, giving the lie to the laissez-faire belief that ever more open markets are the high road to stability....