Transcript The origins of capitalism - College of Arts & Sciences

The origins of capitalism; the
Enslavement & modern racism;
patriarchy & the nuclear family; the
domination of nature &
environmental destruction; and
modern western science & the
european (so-called)
‘enlightenment’ philosophical
outlook
The Rise of Capitalism
European Feudalism
Feudalism grew out of the ashes of the Roman
Empire and the traditions of the Germanic
tribes that overran it;
European feudalism was essentially a defensive
system protecting and imprisoning its rural
population;
There was little trade or monetary activity. The
economic and political units were very small.
Crisis of Feudalism
beginning in 1300, a dramatic fall in agricultural
production due to technological stagnation,
worsening of climatic conditions, wide
occurrence of epidemics, etc.
Confronted with increasing war expenditure, the
military aristocracy had to extract more
surplus from its serfs. This resulted in peasant
uprisings and rebellions.
Looking Outward
The general crisis of feudal society prompted
fractured European groups towards
exploration of new frontiers. This outward
movement later led to events that completely
transformed the course of history. From the
exploits in the African, Asian, and Arab worlds,
Europe obtained extremely important
technical and scientific gains.
1492
• So-called “discovery” of the so-called “new
world”
• Papal Bull of 1492-93: The pope divided the
world’s non-European people and resources
between Spain and Portugal
• “discovery” of the sea-route to India and Asia
• Defeat of the Moors at Grenada
Williams-Rodney Thesis
• Williams-Rodney-James thesis (Darity)
• Williams-Rodney-Cox thesis (Forstater)
Eric Williams, Capitalism and Slavery, 1944
Walter Rodney, How Europe Underdeveloped
Africa, 1982
C. L. R. James, The Black Jacobins, 1938
Oliver Cromwell Cox, Caste, Class, and Race,
1948
Williams-Rodney thesis
1. The Enslavement & associated “trade” a
major contribution to rise of capitalism in
Europe;
2. The Enslavement & etc. a major contribution
to stunting of African economic
development;
3. The Enslavement & etc. a major factor in
poverty of Africans in the Diaspora;
4. The Enslavement & etc. a major contribution
in the origins of modern racism.
Emergence of European (and
white) self-concept
Common interests as well as competing for world
resources;
Portugal – from mid-15th century exploiting African
gold resources ($20b. by 1500); some use of
enslaved African labor in plantation agriculture in
Canary Islands, Cape Verde, and Iberian Peninsula
Labor on ‘New World’ Plantations
Experiments with Native Americans, white
indentured servants, finally Enslaved African
Labor found to be most ‘productive’, i.e.,
cheapest, most profitable;
Racism not the cause of Enslavement of
Africans, but an ideology justifying bloody
Enslavement, which had an economic
rationale
THE ENSLAVEMENT
Africans were now forcibly headed for Brazil, the
Caribbean, and the colonies of North America.
Thus commenced “the Enslavement,” the most
brutal and dehumanizing episode of slavery in
human history. Estimates range between 50 and
100 million of Africa's youngest and strongest
were taken as slaves, or died or were killed in the
process. Other estimates are as high as 150 to
200 million (and were previously as low as 10
million!). Whatever the exact number the result
was a demographic stagnation of Africa’s most
productive population and the supplying of cheap
labor in the new world.
TRIANGULAR TRADE
Enslaved Africans laboring on the Native American lands
produced otherwise impossibly cheap raw materials
and food for Europe. This lessened agricultural
requirements in Europe and supplied the raw materials
for incipient European manufactures. The new
manufactured goods, made with raw materials
produced on plantations by a labor force fed on
plantation agricultural produce, were then taken to
Africa & elsewhere and flooded the new found markets
there, interrupting traditional crafts, and further
financing industry back in Europe and plantations in
the Americas. This is the famous “Triangular Trade.”
Plantation Agriculture
What kind of raw materials are we talking about with plantation
agriculture?—sugar, spices, cocoa, coffee, cotton, tea. But we have
to understand what the total effect of this is. Sugar means not only
sugar cane but gives birth to refineries producing refined sugar and
molasses and rum. This creates demand for all the tools and
implements and machines used in growing, harvesting, processing,
and transporting these goods. And that's not all. Because the
production of these tools and implements and machines itself
requires other tools and implements and machines, as well, of
course, as labor. And so on and so forth. The labor employed in
these new industries also stimulates consumption demand feeding
into a whole host of consumption goods industries that require
tools and implements and machines, and more labor, for their
production, and on and on.
LINKAGES
And we can't forget what all this does for the
shipbuilding industry and gun manufacturing, and
then in the same way giving rise to industries
producing and servicing their component inputs,
etc., etc. And of course all this activity has to be
financed, which means borrowing and lending,
which means interest being paid and then spent
or relent or reinvested. All these
interconnections and feedbacks are what Darity is
referring to when he discusses Hirschman’s
notions of forward and backward intersectoral
linkages. This frenzy of activity led to what the
classical economists and Marx called the primary
or original or primitive accumulation necessary
for capitalism’s take-off.
Adam Smith on Americas
In Book IV, ch. 1 of WN, Smith argues the biggest economic
benefit of “discovery” of the Americas was not obtaining
gold and silver, but the dynamic stimulus of new and
bigger markets:
By opening a new and inexhaustible market to all the
commodities of Europe, it gave occasion to new divisions
of labour and improvements of art, which, in the narrow
circle of ancient commerce, could never have taken place
for want of a market to take off the greater part of that
produce. The productive powers of labour were
improved, and its produce increased in all the different
countries of Europe, and together with it the real revenue
and wealth of the inhabitants. (Smith, 1937, pp. 415-416).
Primitive Accumulation
Now, where did the labor working in these new factories in
Europe come from? Peasants who can survive from their
own production do not voluntarily go to work in a factory,
especially in the work conditions we're talking about.
Besides, under the feudal system, serfs were not allowed to
move or work as laborers for others. Other restrictions
such as prohibitions against money-lending or selling goods
for more than their just price also constrained the system.
The pressures brought about and made possible by the
new wealth and resources burst the constraints of the
feudal system and destroyed it. This required a
transformation in the social and political institutions, and
the enactment of all kinds of legislation as well.
ENCLOSURES, TAXATION
• The enclosure acts were key here. This privatized
the commons and eventually threw the peasants
off the land, leaving them with no choice but to
sell their own labor-power in the factories, a sale
made possible by new laws and new customs.
• There was also colonial capitalist primitive
accumulation—but in Africa it was not possible or
desirable to throw the people off their land, so
other methods were utilized, one of the most
important of which was taxation.
Marx on Primitive Accumulation
There can be no doubt—and this very fact has led to false
conceptions—that the great revolutions that took place in
trade in the sixteenth and seventeenth centuries, along
with the geographical discoveries of that epoch, and which
rapidly advanced the development of commercial capital,
were a major moment in promoting the transition from the
feudal to the capitalist mode of production. The sudden
expansion of the world market, the multiplication of
commodities in circulation, the competition among the
European nations for the seizure of Asiatic products and
American treasures, the colonial system, all made a
fundamental contribution towards shattering the feudal
barriers to production. (Marx, 1991, p. 450)
Marx
The discovery of gold and silver in America, the
extirpation, enslavement and entombment in mines of
the indigenous population of that continent, the
beginnings of the conquest and plunder of India, and
the conversion of Africa into a preserve for the
commercial hunting of blackskins, are all things that
characterize the dawn of the era of capitalist
production. These idyllic proceedings are the chief
moments of primitive accumulation. Hard on their
heels follows the commercial war of the European
nations, which has the globe as its battlefield. (Marx,
1990, p. 914)
mercantilism
• New era of global political economy
• Consolidation of national identity
• Reformed state apparatus & bureaucracy
mercantilists
• Pamphleteers
• Merchants, government officials
• 1500-1800 (1550s-early 1700s)
purpose
• Explain the nature of commerce to the nobility
• Affect government policy (especially on trade)
• Amass personal wealth
Businessmen and government officials
addressing policy; little engaged in abstraction
• Fragmented localism of feudalism at odds with
consolidation of national political power
• Merchant interests at odds with nobility
• Use of ‘reasoned arguments’ how trade would
increase national political power
• Mode of reasoning breaks with medieval
schoolmen (moral authority), as well as
abstract-philosophical Aristotelian approach
Philipp W. von Hornick’s 1684 “Austria
Over All if Only She Will”
Nine Principle
Rules of
National
Economy
Nine Principle Rules of National
Economy
1) inspect the country’s soil with the greatest of care, use
every clod of earth, experiment with every plant, and
spare no expense in discovering gold and silver;
2) all commodities that cannot be found in their natural
state should be produced within the country;
3) have as large a population as possible, to increase
labor supply, and to have them be as productive as
possible;
Nine Principle Rules of National
Economy
4) gold and silver, once in the country should not
be let out for any reason;
5) do without foreign products to the greatest
extent possible;
6) if imports are required, trade goods for them,
not gold or silver;
Nine Principle Rules of National
Economy
7) import goods in as unfinished form as
possible;
8) sell goods in as finished form as possible, and
as much as possible, find new markets;
9) no imports of goods of which there is a
domestic supply.
Von Hornick
He sums all nine up in the basic proposition: Be
happy with your own goods, don't buy foreign
ones, keep your gold and silver in your
pockets. These basic policies of nationalism,
self-sufficiency, and national power were
adopted in varying degrees by all the
European nations.
Thomas Mun
We can generally divide mercantilism into two
periods, an early or simple period and a later
more complex period. One of the most
famous mercantilist pamphleteers was
Thomas Mun, an extremely wealthy merchant
who was director of the British East India
Company.
British East India Company
The Company was being criticized for exporting
bullion in order to purchase spices and silk in
India and Asia. Mun said, people just see the
ships being loaded with gold and sailing away,
but trade is a circular flow. Our wealth
increases if "we sell more to strangers than we
buy back from them." In other words, net
exports (X-M) = "treasure."
‘sell more than you buy’
One of the keys of the mercantilist point of view
in this regard was that gold is a commodity
like any other- it's like cotton or wheat- it
reaps returns in exchange. So exchanging gold
for other goods was not importing the other
goods, but rather exporting the commodity
gold! The key was to 'sell more than you buy.'
Early Mercantilism
What Mun wanted people to understand was
that when his company sent out gold it was
bringing back raw materials for manufactures
which would be re-exported. His argument
was that his company was bringing back more
gold then it originally exported.
wealth vs. wealth creation
Of course, though, the maxim 'sell more than
you buy' as the secret for increasing 'treasure'
or wealth is not wealth creation. A net gain
for one country assumes a net loss for
another. So the mercantilist notion of surplus
created in the sphere of exchange rather than
production is false- it can never be true for the
world as a whole.
Later mercantilism
In the later period, the mercantilists extended
their considerations beyond international
trade- they became more interested in the
domestic economy. Actually what happened
was they began to realize the connections
between the domestic economy and
international trade.
Late mercantilism
One position they began to take was keeping wages
low. The lower the wages the lower the cost of
production, the lower the cost of production the
higher profits given that the rates of exchange in
international trade stay constant. Still, though,
they dealt little or not at all with either the
nature or the structure of production(as opposed
to exchange), and that was true for agriculture
and manufacturing both.
Marx on merchant capital
“Merchant’s capital is older than the capitalist
mode of production.”
“Since its function consists of promoting the
exchange of commodities, it requires only
simple circulation of commodities and
money.”
“No matter what the basis on which products
are produced…the character of products as
commodities is not altered.”
“Historical Facts about
Merchant’s Capital”
“whatever the social organisation of the spheres
of production whose commodity exchange the
merchant promotes…Its form is always
M-C-M’.”
“the less developed the production, the more
wealth in money is concentrated in the hands
of merchants or appears in the specific form
of merchants’ wealth.”
Capital, Vol. 3
“merchant's capital appears as the historical
form of capital long before capital established
its own domination over production. Its
existence and development to a certain level
are in themselves historical premises for the
development of capitalist production 1) as
premises for the concentration of money
wealth…”
Capital, Vol. 3, ch. XX
and 2) because the capitalist mode of
production presupposes production for trade,
selling on a large scale, and not to the
individual customer, hence also a merchant
who does not buy to satisfy his personal wants
but concentrates the purchases of many
buyers in his one purchase.
Marx on merchant capital
The independent and predominant development of
capital as merchant's capital is tantamount to the
non-subjection of production to capital, and
hence to capital developing on the basis of an
alien social mode of production which is also
independent of it. The independent development
of merchant's capital, therefore, stands in inverse
proportion to the general economic development
of society.
Marx on merchant capital
It is in circulation that products first develop as
exchange-values, as commodities and as money.
Capital can, and must, form in the process of
circulation, before it learns to control its extremes
— the various spheres of production between
which circulation mediates. Money and
commodity circulation can mediate between
spheres of production of widely different
organisation, whose internal structure is still
chiefly adjusted to the output of use-values.
Marx, quoting A. Smith
"The inhabitants of trading cities, by importing the improved
manufactures and expensive luxuries of richer countries
afforded some food to the vanity of the great proprietors,
who eagerly purchased them with great quantities of the rude
produce of their own lands. The commerce of a great part of
Europe in those times, accordingly consisted chiefly, in the
exchange of their own rude produce for the manufactured
produce of more civilised nations.... When this taste became
so general as to occasion a considerable demand, the
merchants, in order to save the expense of carriage, naturally
endeavoured to establish some manufactures of the same
kind in their own country." (Adam Smith [Wealth of Nations],
Book III, Ch. III, London, 1776, pp. 489, 490.)
“So long as merchant's capital promotes the
exchange of products between undeveloped
societies, commercial profit not only appears
as out-bargaining and cheating, but also
largely originates from them.”
Marx on merchant capital
“Merchant's capital, when it holds a position of
dominance, stands everywhere for a system of
robbery, so that its development among the
trading nations of old and modern times is
always directly connected with plundering,
piracy, kidnapping slaves, and colonial
conquest.”
“Commerce, therefore, has a more or less
dissolving influence everywhere on the
producing organisation, which it finds at hand
and whose different forms are mainly carried
on with a view to use-value. To what extent it
brings about a dissolution of the old mode of
production depends on its solidity and
internal structure. And whither this process of
dissolution will lead, in other words, what new
mode of production will replace the old, does
not depend on commerce, but on the
character of the old mode of production
itself.”
Primitive Accumulation, cont.
The different moments of primitive accumulation can be assigned in
particular to Spain, Portugal, Holland, France, and England, in more
or less chronological order. These moments are systematically
combined together at the end of the seventeenth century in
England; the combination embraces the colonies, the national debt,
the modern tax system, and the system of protection. These
methods depend in part on brute force, for instance the colonial
system. But, they all employ the power of the state, the
concentrated and organized force of society, to hasten, as in a hothouse, the process of transformation of the feudal mode of
production into the capitalist mode, and to shorten the
transition. Force is the midwife of every old society which is
pregnant with a new one. It is itself an economic power. (Marx,
1990, pp. 915-916)
Marx, cont.
The modern fiscal system, whose pivot is formed by taxes on the most
necessary means of subsistence...thus contains within itself the
germ of automatic progression. Over-taxation is not an accidental
occurrence, but rather a principle. In Holland, therefore, where this
system was first inaugurated, the great patriot, DeWitt, extolled it
in his Maxims as the best system for making the wage-labourer
submissive, frugal, industrious…and overburdened with
work. Here, however, we are less concerned with the destructive
influence it exercises on the situation of the wage-labourer than
with the forcible expropriation, resulting from it, of peasants,
artisans, in short, of all constituents of the lower middle-class.
There are no two opinions about this, even among the bourgeois
economists. Its effectiveness as an expropriating agent is
heightened still further by the system of protection, which forms
one of its integral parts. (Marx, 1990, p. 921)
Colonial capitalist primitive
accumulation
What I am here calling the colonial capitalist mode of production is
similar to what Clive Y. Thomas has called the “colonial slave mode
of production,” in which the “mode of production was clearly
determined by the colonizing power, and was in no way a “natural”
outgrowth of the development of the indigenous communities”
(Thomas, 1984, p. 10). In the colonial capitalist mode of
production, “the process of colonization ultimately required the
effective concentration of power in the hands of the colonizing
power” (Thomas, 1984, p. 14), and “…the local state developed out
of the need for an organizing authority to perform certain
“common” functions in the local society and the need to have an
“on-the-spot” public coercive power to guarantee the interests of
the dominant local and colonial interests” (Thomas, 1984, p. 15).
colonial capitalist mode
Some of these functions “included overhauling existing land and property
arrangements; creating, in place of slaves, a stable labor supply for
commercial agriculture and mining; extending the use of money and
exchange, frequently by requiring the payment of money taxes and land
rent” (Thomas, 1984, pp. 18-19).
• A variety of methods were employed by the colonial powers to force
colonial subjects to become wage-laborers. These included forced labor
and varieties of methods to create a property-less class. But creating a
landless, property-less class was not always preferred by colonial
governments. Maintaining ‘reserves’ of some kind was beneficial to
capital, for a number of reasons. If labor was seasonal, workers could
return to home in the off-season and live off the subsistence base. In this
way, wages did not have to be high enough to support workers and their
families year-round, and profits could be higher. Even without seasonal
labor, maintaining a subsistence base could supplement wages, which
again would not have to be high enough reproduce labor-power.
Taxation and primitive accumulation
The problem was that if the subsistence base was capable of supporting the
population entirely, colonial subjects would not be compelled to offer
their labor-power for sale. Colonial governments thus required alternative
means for compelling the population to work for wages. The historical
record is clear that one very important method for accomplishing this was
to impose a tax and require that the tax obligation be settled in colonial
currency. This method had the benefit of not only forcing people to work
for wages, but also of creating a value for the colonial currency and
monetizing the colony. In addition, this method could be used to force the
population to produce cash crops for sale. What the population had to do
to obtain the currency was entirely at the discretion of the colonial
government, since it was the sole source of the colonial currency. This
method was widespread and important enough to be called “a secret of
colonial capitalist primitive accumulation” (since it was not the only
method, it must be called “a” secret). This practice is extremely well
documented, yet it has hardly ever been mentioned as an important
method of primitive accumulation. If, as Marx stated, “accumulation of
capital is…multiplication of the proletariat,” then direct taxation (and the
requirement taxes be paid in money) was, in the colonies, ‘a secret of socalled primitive accumulation,’ especially because of the other associated
effects, including monetization, marketization, and commoditization.