The Foundations of Capitalism


This republished version of Foundations of Capitalism could not have been possible without God’s succor during the many months of re-researching and editing; the expertise of Dr. Rhoda Reddock, Professor of Gender, Social Change and Development, and Deputy Principal at the University of the West Indies, St. Augustine Campus; Dr. Wendy Arnott, Wayne State University; Norma Abdulah, staunch admirer of Dr. Cox; Ülo Uibopuu, nephew-in-law of Dr. Cox; and John Oliver Frederick, grandnephew of Dr. Cox.  Do know that their assistance is appreciated and that we, the members of the Oliver Cromwell Cox Online Institute, shall be forever in their debt.

Juliet Awon Uibopuu – July 2014

The author wishes to thank both authors and publishers for permission to reprint from the following works: Witt Bowden, Industrial Society in England towards the End of the Eighteenth Century, New York, Macmillan Co., 1925; Frederic C. Lane, Venetian Ships and Shipbuilders of the Renaissance, Baltimore, The Johns Hopkins Press, 1943; Ferdinand Schevill, History of Florence, New York, Harcourt, Brace and Co.; James Westfall Thompson, Economic and Social History of Europe in the Later Middle Ages (1300-1530), New York, Appleton-Century-Crofts, Inc., 1931; Silvia L. Thrupp, The Merchant Class of Medieval London 1300-1500, Chicago, University of Chicago Press, 1948.


This book is dedicated to the many Americans who suffered economic hardship resulting from the greed of business people who chose higher profits rather than fair wages for their employees; the marginalized, the poor, and through no fault of their own, those who work full time yet are trapped in poverty in one of the richest countries in the world.                                                                                       

Juliet Awon Uibopuu – July 2014

The educational community has deemed “Capitalism and American Leadership;” “Capitalism as a System;” and “The Foundations of Capitalism” to be a set primarily because of the confluence of information contained in them. 

These, and all Dr. Cox’s other books—”Caste, Class and Race,” “Race: A Study in Social Dynamics,” and “Race Relations:  Elements and Social Dynamics”—were reproduced using state-of-the-art technology, and are now being offered for sale exclusively at The Oliver Cromwell Cox Online Institute. 

Scholars and educators of today who highly respect and admire Dr. Cox’s work have recognized its value and importance to the field of education. Their sincere enthusiasm has encouraged the reprinting of these precious writings to serve as tools to educate this and future generations.

A new era for his literature and philosophies dawns as Oliver Cromwell Cox is rediscovered.

Forward I

Oliver Cromwell Cox was my mother’s brother.  As a child I communicated with him by postal mail from the then Trinidad,1 British West Indies.  He corrected my mistakes then mailed my letters back to me.  Now, scores of years later, I am pleased to be associated with the republishing of Foundations of Capitalism—one of his five major works, the others being Caste, Class and Race (1948), Capitalism and American Leadership (1962), Capitalism as a System (1964), and Race Relations: Elements and Social Dynamics (1976).  This exercise so many years later—afforded me the wonderful opportunity to make some minor editorial corrections while maintaining the boundaries of the original text.  Born in Port of Spain in 1901 to middle-class parents, William Raphael Cox and Virginia Blake Cox, he spent his childhood at the family’s homes in Port-of-Spain and in Tabaquite—the location of their cocoa estate.  At the insistence of his father that all of his children go to the United States for further education, Oliver Cromwell Cox completed his higher education in the United States with a Ph.D. in Sociology from the University of Chicago.  In Trinidad and Tobago, Cox was influenced by his mentor, tutor and uncle, Reginald V. Vidale, a school principal who subsequently became inspector of schools and later became mayor of Port of Spain.  Other influences would be the famous black lawyers and activists for self-government such as E. Muzumbo Lazare, Michel Maxwell Phillip, Edgar Maresse-Smith, H. H. Hall, Thomas Meade Kelshall, Cyrus Prudhomme David and Sir Henry Alcazar who impressed Oliver so much that he decided to study law in 1919 when he left Trinidad for Chicago.  Having met the prerequisites for entry, he attended and graduated from Northwestern University in 1928 where he received a Bachelor of Science Degree in Law.  His plans to return to Trinidad and practice law, after graduation ended tragically as he succumbed to poliomyelitis which permanently crippled both legs.  Faced with this disability, he felt compelled to find another career. He entered the Department of Economics at the University of Chicago and in June 1932, graduated with a Master’s Degree. His thesis was entitled “Working Men’s Compensation in the USA.”  His legal knowledge had enabled him to present many cases in which he demonstrated to the government ways to improve compensation for all workers.  To this day, workers continue to benefit from the early findings of these cases.

Unconvinced by the explanations provided by the Chicago School economists of the causes of the Great Depression of the 1930’s he moved to sociology noting that: “I felt that if the economists did not explain what I wanted to know; if economists did not explain the coming of the Depression and did not help me to understand the great economic change, then I felt I did not need it (Hunter, 1983:251).”  Consequently, he attended the University of Chicago—Department of Sociology, and graduated on August 22nd, 1938 with a Ph.D. in Sociology.  Not only did he find the answers that he sought for the cause of the depression, but also discovered the correlation between sociology and economics.  These discoveries led to the inclusion of economics in the teaching of sociology—thus changing the course of sociology forever.  Not surprisingly therefore, this political economy/economic sociology approach is evident in the Foundations of Capitalism (1959) and Capitalism as a System (1964), where according Hunter, he veers towards what would later be referred to as a world systems perspective of capitalism (Hunter, 1985; Wallerstein, 2000: McAuley, 2006).  While much of the data from which his analysis in Foundations derives is drawn from Europe, it has been argued that “his lived experiences as a British colonial subject and an immigrant to the United States” must have been a mediating influence (McAuley, 2006:187).  Someone said to me, “Dr. Cox was a genius; but he did not only have unique talents, like most good scholars his scholarship was also the result of the many hours that he spent researching at libraries which was the norm for him.  His brilliance and avid interest in issues of ‘race’ resulted in his recognition of the centrality of ‘race relations’ to capitalism while doing the research for Foundations of Capitalism.  After years of non-recognition, his work on race relations was finally recognized in 1971 when he became the first recipient of the American Sociological Association’s Dubois-Frazier-Johnson Award.   In 2006 the members voted to change the name of this award to the Cox-Johnson-Frazier Award “given to an individual or individuals for their work in the intellectual traditions of the work of these three African American scholars.”2  Today the work of Cox is receiving renewed interest in his place of origin—The Caribbean, although he continues to be little known.  A session on his work entitled: “Oliver Cromwell Cox, a Central Voice from the Margins” was organized as part of the May 2014 Conference of the Caribbean Studies Association. It is hoped that the republishing of this historic work can contribute to this new awareness and appreciation of this outstanding scholar in his homeland, region and internationally.


McAuley, Christopher (2006). “Oliver Cromwell Cox and the Roots of World Systems Theory,” Nelson Lichtenstein (ed.) American Capitalism: Social Thought and Political Economy in the Twentieth Century, University of Pennsylvania Press, Philadelphia. Hunter Herbert M. (1983). “Oliver C. Cox: A Biography of his Life and Work,” Phylon, Vol. 44, No. 4., 249-261.
Hunter Herbert M. (1985). “The World-System Theory of Oliver C. Cox”, Monthly Review, Vol. 37. October, 43-53.
Wallerstein, Immanuel (2000). “Oliver C. Cox as World-System Analyst” in Herbert M. Hunter (ed), The Sociology of Oliver C. Cox: New Perspectives, Stamford, Connecticut, JAI Press.

July 2014—Juliet Awon Uibopuu—New Smyrna Beach, Florida with Rhoda Reddock—St. Augustine, The Republic of Trinidad and Tobago

1 Full name [The Republic of] Trinidad and Tobago

2, accessed on   25, June 2014

Foreward II

Harry Elmer Barnes Photo

By Harry Elmer Barnes

The subject of capitalism has engaged my interest and attention from time to time in connection with my studies in economic history, social institutions, and the history of sociological theory, where the latter touches upon the views of leading sociologists, such as Max Weber and Ernst Troeltsch, dealing with the origins of capitalism. I am glad to return to it for a brief discussion in the form of a foreword to Professor Oliver C. Cox’s comprehensive work on the nature and evolution of capitalism as a socio-economic system.

Writers interested in economics, all the way from the most extreme Libertarians on the Right to Communists on the Left, are at least in agreement that capitalism is the outstanding product of economic evolution to the present time and the basic economic institution of the modern age. Whatever its present status and future prospects, the debate about capitalism was never more lively than at the present time. Of late special attention has been given to the question as to how far the factory system and capitalism were responsible for the harsh working and living conditions in the early days of the first Industrial Revolution. 

Libertarians, not unduly alarmed by the current trends towards collectivism and state action, even in the so-called free nations, ardently urge a return to the free enterprise of the days of the Physiocrats, Adam Smith and David Ricardo.  The radical collectivists assume that the days of capitalism are numbered if, indeed, they do not view the system as a sort of economic antiquity or museum piece. Realistic scholars, not committed in advance to either extreme, are seeking to understand its origins, nature, present state, and future trends.  They recognize that the economic world was never in a more fluid or unpredictable condition than it is today.  So far as I can judge by this first volume of Professor Cox’s projected three volume work on the history and theoretical analysis of capitalism as a social system, the author belongs to this third group.

A number of classic works have been devoted to the origins, nature and development of capitalism, notably those by Max Weber, Ernst Troeltsch, R. H. Tawney, Lujo Brentano, and, above all, the encyclopedic survey by Werner Sombart, Modern Capitalism. In addition, there have been numerous systematic economic histories, the latter portions of which are necessarily concerned with various technological, material and institutional aspects of the origins and triumph of capitalism in the modern world.

Professor Cox’s work is a novel departure from earlier books dealing with the growth of capitalism. It is not a traditional economic history, with capitalism as the major theme, but a social history of the capitalist system and the spirit which engendered it, motivated it, and brought about its integration as a system. It treats of the broad pattern of capitalistic society, its origins, growth and expansion, providing a theoretical analysis as well as a description of the integral elements in the system. His tribute to the achievements of capitalism well illustrates his broad approach to the problem:

In our present day of crisis and transition the achievements of capitalism should not be minimized. They involve preeminent cultural gains for mankind.  The magnitude of these gains may be inferred from the following incomplete list: unification of the world into a system of national interdependence; effective liberation of the human mind from the fetters of religious mysticism and hence secularization of the dominant culture; banishment of irrational fear and hostility towards persons of other societies; establishment of an imperishable faith in the efficacy of science and technology, and comprehension of economization in production; provision of a milieu for the growth of democracy; and, eventually, demonstration of the feasibility of purposively organizing the societies of the world in the interest of human welfare. It would probably be difficult to show that any part of this great boon to mankind could have arisen without the intervention of capitalism.

In outlining his method of study and his approach to the problems of capitalism, Professor Cox makes it clear that he employs a combination of social psychology, sociology and history, the latter as much for a broad perspective as for the presentation of specific data.  He is interested in the patterns of personal and social behavior as they operate within the capitalistic social system. To the material and social facts he adds, as a vital element, a careful consideration and presentation of the spirit or “ethos” of capitalism which gives cohesion and dynamic impulse to the system.

Professor Cox lays down a number of fundamental postulates about capitalism and its development.  Among these are the following: Capitalism as a socio-economic system is relatively new and recent in the economic experience of mankind. It arose only after the fall of Roman civilization in the West, as more favorable disposing social conditions were gradually provided. While elements that have gone to make up the capitalist system can be traced back to earlier times, they did not constitute capitalism in any true sense, even fractionally or casually. They became a sector of capitalism only when they were integrated into the organized capitalist system. When this system arose all aspects of the society took on capitalist traits, but never previously.

Capitalistic society is a unique form of social organization and a specific type of organized psychological motivation and orientation. Previous items which were later gathered into the capitalist social system took on quite a different psychological and material significance and functional operation within the capitalist complex. Generalizations about social and economic facts in the life of non-capitalistic civilizations, based upon capitalistic assumptions and experiences, are likely to be distorted and misleading, whatever the apparent superficial similarities and analogies. Capitalism can only be understood when viewed and analyzed within the premises and operations of a capitalistic society. Even here, there is danger in universal generalizations. While there is a general similarity in the basic organization and spirit in capitalism everywhere manifested on the planet, there are significant differences in details.  This is one reason why the universalism in the dogmas of classical economics was often fallacious and unsound.

Capitalism not only involves and requires a unique form of economic organization, motivation and operation, but must also have a suitable government with which to control public policy. The old cosmopolitan and heterogeneous monarchies of antiquity or the diffused agrarian feudalism of the Middle Ages were totally unsuited to the operations of capitalism.  This requires a republic or democracy controlled by business men who operate the political and legal system in accord with the dictates of the capitalistic economy. The national state, constitutional government and the parliamentary system have been needed and produced to meet the political demands of capitalism.

Not only politics but also religion must be nationalized and freed from the more paralyzing restraints of mysticism and ritualism. Protestantism, especially Calvinism and Puritanism, as Max Weber, R. H. Tawney, Georgiana Harkness and others have so convincingly shown, provided the answer to the needs of capitalism in the realm of religion.

Capitalism also requires an urban social base. It cannot rise and thrive in an agrarian setting, which was a main reason why it developed but little during the period of medieval feudalism, save in the city states which lay aside from the feudal system in their social and economic life, or in eastern Europe during modern times.

These major traits and components of capitalism had come into being in England by 1688.  But during that epoch and thereafter the progress of capitalism was notably promoted by Mercantilism, which provided a more thorough and systematic economic ideology, by the first Industrial Revolution which increased the application and prestige of science and technology in production, and by classical economic thought and Spencerian evolutionism which revised or rejected Mercantilism and supplied the ideology which has governed orthodox capitalism to the present day.

Finally, Professor Cox contends that the historic experience of capitalism proves that a capitalist city or national state must expand its operations, especially in the commercial field, if it is to endure. It is tied to the necessity of gaining ever greater access to, and successful exploitation of foreign markets. In so doing, it either disorganizes the social and economic system of the more primitive or static economies which it penetrates or, as in the case of England, forces them to abandon the old system, become capitalistic, and launch their own process of expansion.

In this first volume of his work, Professor Cox traces the rise and growth of capitalism from its origins in the Italian city-state of Venice down through the Industrial Revolution in England, by which time the capitalistic system had taken on all of its essential attributes prior to the rise of finance, state and military capitalism in the twentieth century, a subject reserved for the later volumes.

The book leads off with an extended history and excellent analysis of the socio-economic system of Venice, which Professor Cox regards as the first definite prototype of the capitalist social order. It enjoyed a very favorable geographical situation to exploit late medieval commercial opportunities. It laid primary emphasis on commerce and commercial expansion. It repudiated monarchy and feudalism and set up a Republic run by a business oligarchy but extended citizenship to all classes of native inhabitants. While never attaining the stature of a nationalist state, it produced many of the familiar psychological traits of nationalism and patriotic pride. It took a step toward the nationalization of religion by providing that the priesthood be recruited solely from Venetians. Its historic experience proved that prosperity depended upon extending the scope and command of foreign markets and that when no further expansion was possible the system tended to decline. The failure of capitalism to extend eastward from Venice demonstrated that the system can rise and thrive only where the general cultural conditions are favorable to the requirements of a capitalist society. After the decline of Venice, capitalist trends turned to the West and North where an appropriate environment for their growth became ever more prevalent.

Leaving Venice, Professor Cox describes the rise and course of commercial capitalistic development in Florence and other commercial cities, the Hanseatic cities, the Dutch cities, and then turns to a more detailed analysis of the Mercantilist system which combined commercialism and nationalism, especially in England.  Here the book becomes theoretical as well as descriptive.

The volume concludes with an extended consideration of the first Industrial Revolution in England that produced the so-called empire of machines. Science and technology attained greater prominence, prestige and application.  Prosperous capitalism tended to concentrate in leader nations, notably England, where the requirements and motivation of capitalistic society were present to the highest degree. Consideration is given to the rise of factory labor within the new industrial system and to the impact of labor on capitalism.  Professor Cox makes the interesting suggestion that, although labor has complained about the capitalistic society and has long had the ambition to take over its control, it is psychologically and functionally unable to operate a capitalist society. It has proved unwilling to surrender the capitalist devotion to commercial imperialism, and without so doing it can never successfully operate a capitalist domestic economy. Ernest Bevin was as unwilling to sacrifice the British Empire as was Winston Churchill.

So far as this first volume is concerned, while possibly differing on some details of description and analysis, I find little to complain about in Professor Cox’s treatment and much to commend in it. It should prove illuminating and helpful to all three of the groups mentioned in the opening paragraphs of the Foreword as most actively concerned with discussing capitalism today. It provides a fresh and illuminating treatment not duplicated in the large in any other work in any language. As such, it must be regarded as a major contribution to social and economic history in our day.

Naturally, I am unable to predict here what I might have to say about the two later volumes in his projected series.  I suspect that I might differ rather more radically with his treatment of finance, state and military capitalism, and would find Orwellianism far more of a menace to the future of capitalism than Marxism. In particular, I would think that I might offer the United States as a capitalist economy which could have gone on thriving for a long time without the need of the imperialist expansion which has ruined all previous capitalist societies, including the British Empire.  The United States could have developed a home market under capitalism which would have provided a sound and adequate basis for capitalist growth for an indefinite time.

That it did not do so, and is not likely to do so, is apparent to all students of recent American economic history and world relations. Indeed, this country has gone off on a wild and unprecedentedly expensive form of planetary expansion which does not even have the merit of the older imperialism in paying its way, or more, for a considerable period. Hence, there is evidence that American capitalism may collapse more rapidly than was the case with any other capitalist society. This is likely to be especially true so long as the main custodians of American capitalism are absorbed with the alleged threat of Marxism from without while ignoring or promoting the surrender to Orwellianism and military state capitalism within our own boundaries. Interventionism is far more a threat to American capitalism than Marxism.

In conclusion, I should say a word about Professor Cox’s professional record in so far as it relates to his competence to write on the history and nature of capitalist society. Few persons could be better qualified for the task. He had graduate work at the University of Chicago, where he received his doctorate in 1938. In the economic field he studied under Professors John U. Nef, Frank H. Knight, Jacob Viner and Harry A. Millis, experts in economic history, economic theory and labor problems. Professor Knight, well known as the translator of Max Weber’s General Economic History, was especially responsible for Professor Cox’s appreciation of the value of a sound historical perspective. In the Department of Sociology at Chicago, Professor Cox attended courses under Professors William F. Ogburn, Herbert Blumer, Robert E. Park, A. K. Radcliffe-Brown, Ernest W. Burgess, Louis Wirth and Samuel A. Stauffer, certainly the most impressive galaxy of sociology teachers then available in any institution in the world. Here, again, Louis Wirth stressed the historical approach to social problems and institutions.

Such training would have been far more comprehensive and diversified than that possessed by any other historical student of capitalism known to me. In addition to this, however, Professor Cox had two years of instruction at the Law School of Northwestern University under the famous jurist, Professor John Henry Wigmore. Hence, whatever anyone may think of his product, no reasonable person can deny that Professor Cox is singularly well prepared to write on it. In 1948, he published a lively and extended work on social classes and the social hierarchy, Caste, Class and Race, which created much healthy controversy and received the George W. Carver Award granted by Doubleday and Company. The present work was suggested by that study and is certain to be even more comprehensive and challenging.


Cover illustration: Man and Machinery; detail of a mural by Diego Rivera—Courtesy Detroit Institute of Arts.
Originally published by Philosophical Library, Inc. 1959.

Republished by the Oliver Cromwell Cox Institute 2014
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