The Origin of Capitalism 2
Explanations
This Page, together with Page 1 ‘Enclosure of Feudal Common Land’, should be used together to understand the Origin of Capitalism.
Page 1 looks at the way in which the population of peasant farmers who worked the land to provide their own subsistence (and that of the overseeing Lord) were turned off the land to become the propertyless wage dependent working class.
This page, Page 2, looks at competing explanations about how this mass dispossession resulted in the establishment of the capitalist system that eventually came to dominate the whole world.
These preliminary draft pages have become necessary to try to make sense of Adam Smith’s failure to properly look at this matter. In his Wealth of Nations, Smith complacently accepts the establishment of private property and the origin of the growing capitalism around him as ‘given’. He glosses over the original accumulation of capital and private land, calling it the result of ‘parsimony’ as frugal individuals or generations of a frugal family gradually amass sufficient capital to enable them to put others to work for them. He positions this as occurring in the ‘Age of Shepherds’, but makes no attempt to examine how this actually happened as a historical process.
It seems the first person to take issue with Smith’s treatment was Marx who instead described a coercive and often violent process whereby agricultural workers were turned off the land that had supported them for centuries in the confusingly named ‘primitive accumulation’, otherwise referred to as the process of enclosure.
This very tentative first draft that should be read alongside Page 1, takes a first look at the historical processes that led from feudalism to capitalism. It leans very heavily on two main works; firstly ‘The Origin of Capitalism’ by Ellen Meiksins Wood (2002), secondly ‘Nature and the Transition from Feudalism to Capitalism’ by Jason W Moore (2003).
What follows is structured like this:-
First is a section discussing the Birth of Capitalism – mainly based on the work of Ellen Meiksins Wood. It looks at the nature of capitalism, the replacement of feudal society; followed by a discussion of the main contending explanations of that transition, before Wood describes her preference for the agrarian capitalism model.
Moore’s contribution is then examined, whereby he adds to the agrarian origin of capitalism the influx of large amounts of wealth drawn from Slavery and Silver production, which he argues was necessary for agrarian capitalism to take hold and spread.
There is also an Appendix that explains a series of terms used by E. M. Wood in her discussion of the Birth of Capitalism.
The Birth of Capitalism
This fragment from Page1 gives a taste of Moore’s argument that will be picked up later.
“The fourteenth-century crisis strengthened the western European peasantry and weakened the states, the seigneurs, and the city-state capitalists.”
Moore argues that it was the convergence of these three interest groups and their geographical expansion that made the transition to capitalism possible.
The view of Ellen Meiksins Wood (2002), (hereafter referred to as Wood, or Ellen Wood) will now be considered as she makes an argument that the transition to capitalism was based not upon geographical expansion, but upon processes internal to English feudalism.
Wood’s argument will be followed by way of her examination of the nature of capitalism and the identification of some key aspects that enable her to critically assess existing explanations. Then her outline of the main historical theories regarding the origin of capitalism, all of which she finds wanting, will be briefly described.
She then outlines debates and disagreements within Marxism about this issue, before finally backing a more recent proposition put forward by another Marxian writer, Robert Brenner – and applying Brenner’s ideas to the emergence of capitalism in England.
The Nature of Capitalism
“Capitalism is a system in which goods and services, down to the most basic necessities of life, are produced for profitable exchange, where even human labour-power is a commodity for sale in the market, and where all economic actors are dependent on the market. This is true not only of workers, who must sell their labour-power for a wage, but also of capitalists, who depend on the market to buy their inputs, including labour-power, and to sell their output for profit.” (Page 2)
In this opening passage Wood spells out some basic features of capitalism. Just about everything that is produced in capitalism is produced to be sold at a profit ‘in the market’. Even human labour power (the ability to work) is bought and sold like a commodity in the market.
Everyone living in the capitalist system is necessarily dependent on the market; workers, in order to live, must sell their labour power for a wage, capitalists must pay for that labour power and buy raw materials, premises and machinery etc in order to turn out products to be sold at a profit.
She continues by saying that capitalism is unlike all previous forms of social wealth production. Workers, because they are propertyless – that is, they do not posses enough productive property to live on – have no choice but to engage in the labour power market in order to get access to the productive system and a wage; this contrasts with feudal peasants who possessed direct access to agricultural land from which they produced their living.
Capitalists do not need to use ‘extra economic’ coercion of feudalism (military, political or judicial) to extort profit from the produce of the workers; instead they already legally own that produce and can sell it at a profit in ‘the market’. Profit in capitalism is thus extracted within the economic system itself, not by the external coercion used by the Lords in feudalism, or by slave owners in systems based on slavery.
This amounts to a unique and distinct form of inescapable market dependence of practically everyone in society, where competition and the securing of profit are fundamental.
Moreover, while workers supply all the needs of society – and enable themselves to live until the next wage payment – they simultaneously create profits for capitalist accumulation.
“In fact, the production of goods and services is subordinate to the production of capital and capitalist profit. The basic objective of the capitalist system, in other words, is the production and self-expansion of capital.” (Page 3)
This is a sobering statement. The purpose of the global capitalist system is not human benefit and welfare; it is the production of profit and the expansion and perpetuation of the capitalist system itself.
Wood then points out that this capitalist way of organising economic and social life is radically different to all previous systems, and has only existed for a tiny fraction of human existence. However, even though commentators put the start date of capitalism anywhere between the 16th and 19th Centuries – in either case, very recent – dominant historical explanations of how capitalism began typically see it as a natural outcome of some deep rooted human or social inclination.
Appendix 1, at the end of this page, lists explanations of some of the terms used by Ellen Wood in her argument.
Armed with these explanations – of Market Imperatives, Extra-Economic Coercion, Politically Constituted Property, Parcellized Sovereignty, Enclosure and the Ethic of Improvement – Wood’s arguments will be picked up at her account of the dominant alternative theories, before going on to her own views.
Explanations of the transition to Capitalism
The Commercialisation Model
Before discussing her own (and Brenner’s) theories Wood outlines the main alternative and dominant theories most commonly held by commentators.
She then examines the most widespread orthodox explanation of the start of capitalism, together with is many variants. This is the Commercialisation Model.
This most common explanation of the origin of capitalism is that it is the natural outcome of age old human practices and tendencies that only required the removal of obstacles that were preventing its development. Versions of this model find their way into most other explanations, even those that set out to usurp it, or are of Marxian origin.
The traditional commercialisation model goes like this,
“ …rationally self-interested individuals have been engaging in acts of exchange since the dawn of history. These acts became increasingly specialized with an evolving division of labour, which was also accompanied by technical improvements in the instruments of production. Improvements in productivity, in many of these explanations, may in fact have been the primary purpose of the increasingly specialized division of labour, so that there tends to be a close connection between these accounts of commercial development and a kind of technological determinism. Capitalism, then, or ‘commercial society’, the highest stage of progress, represents a maturation of age-old commercial practices (together with technical advances) and their liberation from political and cultural constraints.” (Wood, 11-12)
Wood goes on to identify a number of characteristics of this view. Most importantly, capitalism is seen as not so much a clean break with the past – a revolution – but as essentially just a huge quantitative expansion of markets and of the commercialisation of life.
Second, the emergence of capitalism is linked to the liberation of merchants and the rise of cities. Cities are viewed as embryonic capitalism from the start, largely autonomous, trading freely and dominated by a burgher (or bourgeois) class – and free of the old feudal constraints.
Thirdly, there is no recognition of capitalism emerging when markets became inescapable; such markets aren’t seen as capitalist markets – a revolutionary break with the past – they are just seen as a sign of growing commercialisation.
She argues that such explanations originate in classical political economy (e.g. Adam Smith) and in Enlightenment ideas about progress.
“Together, they give an account of historical development in which the emergence and growth to maturity of capitalism are already prefigured in the earliest manifestations of human rationality, in the technological advances that began when Homo sapiens first wielded a tool, and in the acts of exchange human beings have practised since time immemorial” (Wood, 4).
These views see humanity as having been on an inevitable and natural journey to its final destination of commercial society or capitalism. While there have been many obstacles along the way, all that is needed to explain the ascent of capitalism is to give an account of how those obstacles have been removed, sometimes gradually or sometimes suddenly via violent political action.
In such a view there was no real origin of capitalism at all; it was always there in embryo waiting to be released from the fetters that smothered it. The nature of these fetters varied from the political powers of autocratic or feudal states to religious or cultural beliefs. (Wood,4).
Wood looks at various different accounts of the birth of capitalism, but finds they all – in one form or another – share the assumption that capitalism lay dormant just needing the removal of constraints in order to spring to life.
Wood’s own argument differs from this assumption. It is contextualised by remembering that people have lived in societies based on agriculture for thousands of years, and for almost as long those societies have all featured a class system comprising a class of peasants or slaves, who work the land to produce the means of life, and an upper class who control the labourers and take from them the produce they need to support their own lives and to run society.
It is also the case that they take that produce by what Marx called ‘extra-economic’ means; that is by the use of coercion based on military, political or judicial power.
She contrasts this historical situation with Capitalism, which is different to all types of society that preceded it. Whilst there are still classes, and the subordinate masses still produce the means of life, the dominant mode of appropriation in Capitalism takes place within the economic system; it is economic appropriation in the form of profit taken within the economic process itself – and it is a form of economic exploitation where the capitalist takes the produce of workers’ surplus labour without direct coercion.
In addition to this, within capitalism the workers are stripped of all economic property; they are (in liberal democracies) politically free, but in order to live they have to take employment for a wage. Compare this with feudal peasants who had conditional possession of the land from which they produced their own subsistence.
This, Wood points out is,
“… the basic difference between all pre-capitalist societies and capitalism.” (96)
She goes on to discuss how capitalist relations of production work in tandem with the market – but it is a very different market to previous markets that functioned as simple mechanisms of exchange or distribution, typically of produce surplus to local needs. By contrast, the capitalist market has a unique, distinctive role.
In capitalism practically everything is produced as a commodity for sale in the market, and everyone – worker and capitalist – depends on the market for their basic existence. Workers have to sell their ability to work (labour power) on the market to get employment; and capitalists have to use it to buy labour power, and to buy the means of production (factories, farms, shops etc.); and they use it to sell their commodities in order to secure (realise) their profits.
The market, then, is the main determinant in capitalism of everyone’s social reproduction (the ability to live, have a family, and children to follow on); it thus penetrates into the most basic, personal and essential aspects of people’s lives.
There is not much choice in this for anyone; we all need to eat, to be clothed and sheltered, and more – for which market dependence is an imperative. There are also particular imperatives for capitalists in that, to survive in business, competing for market share, they have to secure their profit, and they have to strive to accumulate and develop their productive capability – and grow.
Overall then, capitalism – unlike any previous system – must accumulate and grow, it must constantly seek out new sources of natural resources, new products, new markets, new areas of growth; and it has to impose its own imperative ways of doing things on new territories and new aspects of life.
Wood (97) then says that because capitalism is so distinct from most of human history we cannot just assume that it is something that was waiting to emerge when it was freed from constraints. It is clear, she says, that more is needed to explain how capitalism originated.
She proposes to approach that explanation by asking a related question. Given that producers have been exploited for thousands of years, and that simple markets for exchanging goods have existed almost everywhere for as long,
“… how did it happen that producers and appropriators, and the relations between them, came to be so market-dependent?” (98)
To answer this question she looks at medieval Europe, where England became an exception among other areas – by the 16th century it was developing in new directions, alone.
First the English State, by this time, was more advanced than other European states in eliminating the fragmentation of power inherited from feudalism. The autonomous powers of the Lords, that continued elsewhere, were in England progressively incorporated into the central state.
Second, added to the centralizing English state, England already had a network of national roads and water transport. And London became unusually large and was becoming the centre of a growing national market.
The growing national economy was founded on English agriculture, a situation with no parallel in Europe. The Lords had demilitarised before those of other nations, and were allied to the central state that provided them with order and protection of their property. While this meant that the Lords lacked the ‘extra-economic’ powers to enforce their rents and control their lands, they were able to use their land differently and exercise their growing ‘economic’ power.
Accordingly, the traditional ways of the Lords, to maximise rents by coercively squeezing more and more out of their peasants, gave way to new economic ways, for example by encouraging, helping or compelling their peasants to increase their productivity.
From the peasants point of view they were still subject to pressures from their Lords, even if there were less coercive pressures, but now they also became subject to market pressures. More and more tenancies, which varied widely across the country, became subject to economic rents fixed by the market instead of by some customary standard. Wood (100) argues that,
“There was, in effect, a market in leases. Tenants were obliged to compete not only in a market for consumers but also in a market for access to land.”
Tenants then were becoming dependant on the market for leases, for access to the land – their means of production. As more and more land became subject to this market situation, access to land would go to those who produced competitively, and were able to increase their productivity and to pay good rents.
The net outcome of this was that the more productive tenants gained access to more and more land, and others lost access to land altogether. Wood sees this as the start of a change towards capitalist relations of production that would gradually encompass the whole economy.
“English agriculture, then, was already in the sixteenth century marked by a unique combination of conditions, at least in certain regions, that would gradually set the economic direction of the whole economy. The result was a highly productive agrarian sector, in which landlords and tenants alike became preoccupied with what they called ‘improvement’, the enhancement of the land’s productivity for profit.”(Wood 105 -6)
This then is Wood’s explanation of the birth of capitalism. She goes on (Pages 125 – 146) to describe how agrarian capitalism in England developed and went on to prepare the ground for the eventual take off of industrial capitalism.
She describes how from the 16th Century onward those contributing to English agriculture – the main source of societal wealth – became more and more dependent on capitalist practices; this involved cost cutting, improving productivity, specialisation, accumulation, reinvestment of surpluses and innovation – all in pursuit of maximum exchange value of produced goods (125).
This process, of accumulation and expansion to provide the needs of society, contrasted with the centuries old approach to agriculture that still dominated elsewhere in Europe. This new way of doing things also involved the creation of the mass of the people without property, and their exploitation in the capitalist process.
This new, early modern England situation of agrarian capitalism, driven by its new and distinctive internal logic eventually went on to produce the mature industrial form of capitalism.
The Golden Age of Agrarian Capitalism
Wood goes on to look at the way the English countryside has been romanticised as a sort of rural Idyll or a ‘green and pleasant land’. But she argues that this mythical view of the past owes more to the ‘golden age of agrarian capitalism’ in the 18th Century.
This was the time of ‘country gentlemen’, who had largely replaced military aristocrats, and the time when ‘improvement’ ruled. Landlords, peasants and the landscape itself were all being transformed. Dispossession and enclosure created two rural classes out of the previous peasantry; these were the
“more prosperous capitalist tenants, with their solid, even picturesque farmhouses, and landless labourers, whose only mark on the landscape was a system of rights-of-way across fields giving them access to their places of work” (127).
(These rights of way of course largely still exist in the form of the nation‘s network of public footpaths. How many ramblers today realise they walk in the footsteps of the world’s first dispossessed working class.)
Whole villages were disappearing in this process, as country houses, parks and landscaped gardens of country gentlemen appeared; the latter living on the rents of the capitalist tenants – the real harbingers of the future.
But the economic logic driving these changes had been at work through the previous two centuries with the early enclosures, the replacement of customary rents by higher market rents, followed by the ideology of ‘improvement’ and finally the period of Parliamentary enclosures speeding the rural transformation ever faster.
But here Wood pauses to ask, was agrarian capitalism really capitalist? To answer this she emphasises to main points.
First, the initial developments of capitalism did not result from merchants or manufacturers. The new capitalist property relations grew in the countryside and it was from here that English trade and industry took off – results of the new capitalism, not the cause.
Merchants, she argues, prospered successfully in non capitalist feudal society, where they profited from autonomous cities and from the fragmented markets, where one could be played off against another. Capitalism was not needed for this.
Secondly, she explores the role of wage labour in the newly emerging rural capitalism, in comparison to the triad identified by Marx and others, and seen ‘by many as the defining characteristic of agrarian relations in England’ (130).
This triad – consisting of landlords living on rents from their capitalist tenants, who employed labourers who lived on their wages – did indeed pertain in the highly productive south and south east of the country. This was an area where the new competitive pressures put the less productive tenants out of business, while the more successful acquired more land – and where the pressures were felt most intensely by the highly exploited wage labourers.
But wage labouring was still a very minor activity in the 17th Century; in most areas the first expression of capitalism was felt in competitive pressures and the creation of ‘market dependent tenant producers’ (130) rather than by wage labour. These tenant farmers may typically, with their families, have been the direct producers themselves without hired labour. That is,
“the specific dynamics we associate with capitalism were already in place in English agriculture before the proletarianization of the workforce” (131).
So Wood is arguing here that the market dependence that gripped the tenant producers, as well as their landlords, was a key factor in creating the dependence of the dispossessed majority on wage labour as their only means of making a living.
Wood then addresses the argument that the social situation she describes cannot be capitalism because it is, by definition, based on the exploitation of wage labour; without wage labour it cannot be capitalism.
She answers that,
“whatever we call it, the English economy in the early modem period, driven by the logic of its basic productive sector, agriculture, was already operating according to principles and ‘laws of motion’ different from those prevailing in any other society since the dawn of history”(131).
In effect her argument is that the situation she was describing was the emergence of capitalism, the preconditions for it. Not yet fully developed, yet bound to the imperatives of competition, compulsory markets, and the need for perpetual productivity gains, the ‘laws of motion’ that would inevitably lead to mature capitalism with the mass exploitation of a working class.
She then listed the consequences of this agrarian revolution. First a massive increase in agricultural productivity per worker; second, a population explosion that could be supported by the output of the shrinking agricultural numbers; third, land was concentrated in far fewer hands and the urban population grew rapidly; this was especially so in London where the population rose from about 60,000 to 575,000 between 1530 and 1700, making it the largest city in Europe.
This was the result of transformed property relations in the South and South East, the front runner of agrarian capitalism, where the dispossessed population migrated to the city. London then became the centre of a national market and a point for both national and international trade, as well as a huge consumer of agricultural produce and other English products.
“The growth of London, in other words, in all kinds of ways stands for England’s emerging capitalism: its increasingly single, unified, integrated, and competitive market; its productive agriculture; and its dispossessed population.” (134).
On pages 134 to 142, Wood then describes how the new logic of agrarian capitalism spread to all areas of economic life, despite an existing trading system without which capitalism would not have emerged.
But capitalism did not originate from within existing commercial activity; rather agrarian capitalism changed the age old rules of trade and created a new kind of commercial system. While other commercial European powers had used foreign trade as the source of their development, capitalism in Britain grew on the basis of a strong domestic market.
With more and more of the population no longer making their own domestic goods like food and clothes, a large London market in domestic goods grew up, and became the centre of the growing national market. But unlike older markets where people bought cheap and sold dear; the British market was based on competitive production.
And alongside the new market England developed its own capitalist banking system. Existing older banks were still tied to medieval practices of money changing, state finances and currency regulation, and the financing of foreign and long distance trade. By contrast England’s new banking system came from internal trade, mostly in domestic products.
It was based on the London metropolitan market that featured a network of distribution throughout the nation by agents who operated on commission and credits. Its roots were in agrarian capitalism whose new social relations required a market to support a growing non agrarian population.
As the national economy became the centre of a new style international commercial system, the English domestic market expanded with it. The old network of local markets was linked by the ‘carrying’ trade and used different prices in different markets to buy cheap and sell dear.
This was progressively replaced by an integrated market of world commerce centred on London. Eventually the bills of exchange of London, derived from the English domestic commercial system, became the international instruments used for exchange.
This commercial system, rooted in agrarian capitalism, was the first ever based on the production of the means of life for a growing mass market.
This did not prevent crossover with the traditional and larger European commercial system, and did not stop the trade in luxury goods for the rich minority. But alongside traditional trading practices the new system answering to the new logic of capitalism eventually became a new system of international trade.
By the 17thCentury the English domestic market was like a unified national market without the disjunctions and restrictive trade barriers of the old ways. The new national market was distinctive in catering for basic necessities and cheap commodities like pots and pans.
Whilst elements of English peasantry lasted in places into the 19th Century, the market dependence and competitive rents of 16th Century tenant farmers progressively underlay the dispossession of more peasants who were increasingly drawn into the competitive, commodified labour market means of making a living.
While the European grain market had largely supported the urban populace, and in this period London’s urban population had greatly increased – this doesn’t account for England’s domestic market. London had acquired a disproportionate number of poor people thrown off the land by emergent capitalism, and therefore a distinctive market for basic goods grew up as the people reliant on wages for survival resulted in a system producing for the consumption of basic goods.
By contrast the even larger Dutch urban population had fewer dispossessed peasants and a large number of people dependent on the Great Dutch trading system, that brought great commercial wealth.
The 18th Century saw the rise of prosperous English urban classes and a growing market for a range of goods beyond the more basic variety; this has been called the rise of a ‘consumer society’. This market for fine clothes and art etc was similar to markets elsewhere in Europe, and apparently not very different from the luxury trade of earlier times.
Despite this luxury trade for the ‘middle classes’, the market for basic commodities remained more distinctive. But not only were working people compelled by necessity to buy such items they must have been earning enough to do so.
The nature of necessity may well have become more elastic as people began to buy industrially produced kitchenware etc. But the two markets matched the wealth of those buying luxury goods and the poverty of those buying the things of daily life.
The most important aspect of the new market for the consumption needs of relatively poor people was that it drove production as never before. This was then the growth of British Industry responding to the growing mass market of wage earning consumers, seeking inexpensive basic goods such as cotton cloth and the like.
This development of a mass proletariat (the working class of people dependent on wages) established the direct relationship between production and consumption. The working class were both a force of production and a mass market for consumer goods.
Thus a competitive society was developing where capital was compelled by competition to increase labour productivity in order to extract maximum surplus value from the working day of the nominally free workers. At the same time, the nature of production was determined by the consumption needs of the workers, as it fed the market providing their material needs.
The workers became a market, larger than any before, in an essentially integrated economy – but a market catering for those with restricted money. For those supplying this market it was necessary to sell larger quantities of cheaper goods which meant pressure on producers to improve labour productivity – the first market in history encouraging rather than inhibiting production.
The capitalist mode of production did not exist until the means of life (survival and reproduction) become market dependent – and with industrial capitalism market dependence reaches everyone in society.
Here we are seeing a historically unprecedented social form.
The precondition for which was already established in the early days of agrarian capitalism and the competitive production of food, where the market dependence of English farmers was not based on people exchanging their surpluses. It was based on the new social relation between landlords without extra economic power and tenant farmers needing to make a profit.
There existed in England, therefore, a situation distinctive in a number of related ways.
The market for leases determined access to the land of the tenant farmers. Retention of possession of the land was not governed by the tenant’s production, or by the needs of his/her family, or by their consumption. It was the market for economic leases that decided who had access to land, and more successful farmers were likely to have more land.
Farmers were therefore compelled, by their relation to Landlords, to compete against other producers, and to maximise their profit. Landlords themselves relied on economic means of appropriating the surplus produced by the farmers, in contrast to the extra economic means of older times.
The object of the farmer’s production was therefore profit, not direct consumption.
“…for the first time in history there developed a mode of exploitation that systematically impelled the development of productive forces” (142).
Wood concludes her argument (143 – 146) by sketching the ways in which agricultural capitalism paved the way for mature industrial capitalism. She begins by highlighting three direct consequences of agrarian capitalism as she has just described it.
In the first place, agrarian capitalism produced an agricultural sector capable of sustaining the large non agricultural workforce that industrial capitalism needed. Without this in place it is unlikely that industrial capitalism would have been possible.
In addition, agrarian capitalism produced a dispossessed mass of people who, in order to live, needed to sell their ability to work (to be employed) for a wage.
And without that dispossessed mass of non agricultural people there would have been no mass consumer market in cheap basic goods like textiles and food – products that English industrialisation thrived on. This market too was distinctive in that it served the relative poverty of the workers and had little in common with older markets in luxury goods for the rich.
It is probable, argues Wood, that without the development of English capitalism (first agrarian then industrial) there would have been no capitalist system at all. As it was, however, the competitive pressure from English Industrial capitalism compelled other European countries to develop their own economies in capitalist directions, from their positions – similar to older feudal ways – of pre-capitalist trade and political and military rivalry.
There is no doubt, though, that industrialisation was made possible by agrarian capitalism (143), and it may even have been inevitable. It has been claimed that ‘market society’ resulted from developments in commercial society, but in fact a capitalist logic and new property relations in agrarian capitalism predated industrialisation and paved the way for it, and,
“… a kind of ‘market society’ – in which producers were dependent on the market for access to the means of life, labour, and self-reproduction, and subject to market imperatives – was not the result of industrialization but its primary cause” (144).
But capitalist development continued with the total commodification of labour, as people became subject to more coercive market powers and workers became completely dependent on market disciplines with no alternative means of making a living. Nowhere else in Europe, or anywhere else, were workers subject to the requirements of such competitive production or to the market dependency of this wholly new form of industry.
This resulted in a situation where agrarian and industrial capital became mutually reinforcing and grew the ability to impose the new commercial system and its pressures on the rest of the world. Any economy using international trade for its needs, whatever its form of production, fell under capitalist imperatives.
While capitalism had emerged through the social relations between market dependent tenant farmers and appropriating landowners, when it reached its universal form even those not directly subject to class exploitation, such as independent farmers or workers collectives, became subject to market imperatives that involved strong pressures to reproduce capital/labour class relations. As capitalism continued its development bringing more and more people under commodified labour relations the imperatives of competition and accumulation became more and more all consuming.
Capitalism is subject to constant change, but these processes of change and contradiction can only be understood if they are traced to their foundations. Accordingly, the nature of capitalism cannot be explained by technical improvements, the idea of ‘western progress’ or by any other ahistorical contrivance.
Similarly, any movement to replace capitalism with a new social form must be based on a full and comprehensive understanding of capitalism’s origin and its nature of compulsive competition, accumulation, profit maximisation, productivity improvement and infinite growth.
The Contribution of Moore
This page now turns to look at the way in which Moore’s study can be seen as an overlapping but different view to that of Wood.
In the opening parts of his paper Moore argues that capitalism was not born in the industrial revolution of the 19th Century, but that the first major step in its birth took place during the preceding three centuries as the land was reshaped by capital in an alliance between states and landlords, after which capitalism eventually ascended to world power (102).
But he adds that exactly how this was actually achieved ‘is a thorny problem indeed’. In addressing this problem he argues that feudalism’s development was shaped by class relations between landlord and peasant in the tussle for rent. Drawing on Hilton (116) he points out that developments in trade and the growth of industrial and commercial centres such as those in Flanders and Venice occurred after the growth of productive forces in agriculture driven by the ‘struggle for feudal rent’.
But instead of looking for the start of capitalism in agrarian England, Moore looked to external expansion.
“It is this process of geo-graphical expansion – made possible by the converging interests between the states, the seigneurs, and the city-state capitalists – that made possible the transition to capitalism.”
We have seen above that Moore argued that,
“… it was the convergence of these three interest groups and their geographical expansion that made the transition to capitalism possible.”
But he asks, how did geographical expansion lead to capitalism? He addresses this question by describing what he calls the two great ‘commodity frontiers of early capitalism’ (134), Silver and Sugar.
Silver he says helped to bolster a new Trans Atlantic division of labour and the emerging dependency between core and peripheral areas. The new source of silver also multiplied European reserves, monetised the ‘European world economy’ and created Western mastery of international credit mechanisms that kept smaller nations linked into the global system.
Sugar plantations pioneered new relations between capital, land and labour; and as a driver of the Atlantic Slave system it had profound effects on the development of the Americas.
He sees these two phenomena as the most important drivers in the original accumulation of capital; that they channelled the result of the feudal crisis towards capitalism (155); and that capitalism may never have ever taken off solely on its own volition (158).
There follows a short look at Moore’s account of the European development of Silver and Sugar in the Americas.
In the case of Silver, great central European silver mines produced an output by 1520 that would not be reached again until mid 19th Century. But they produced terrible pollution and exhausted local forestry for the timber needed for fuel. Added to this were problems from state regulation to limit forest destruction, potential trouble from large concentrations of workers and resistance from local peasants to the enclosure of forested common land.
As a result silver mining moved to South America, where it was largely free of other issues, but still faced with problem of sourcing timber. In only 40 years the forests were stripped over a 50 kilometre radius of 16th century Zacatecas in Mexico.
Potosi, in Peru, became the largest of the silver mining areas, where the lack of regard for human welfare and environmental protection was starkly exposed. The city grew quickly to a population of 120,000 with all the glitter and trappings of European cities.
But the mines needed labour and drew 50,000 indigenous workers a year, up to a quarter of whom were killed by the conditions in the mines, now using mercury to treat the ore instead of timber smelting. The countryside for hundreds of miles was searched for more labour, and a mine owner observed that “the whole kingdom seemed on the move”.
Mercury pollution was dumped into rivers poisoning the food chain through to the workers. The mines were described in 1580 as a “harsh executioner of Indians, for each day it consumes and destroys them, and their lives are made misery by the fear of death”, as their lives were taken by mercury poisoning, silicosis from inhaled dust particles, or just from the sheer body breaking nature of the work itself. (Quoted by Moore 140).
Eventually, proprietors kept workers down the mines from Monday to Saturday to save time from shift changing at the deeper levels that had become necessary. Then in the early 17th century a dam burst killing 4000 workers (141).
Alongside the nightmare treatment of indigenous workers, the silver industry caused regional disruption and destruction of established agriculture. Fertilizer and water supply systems were engulfed by European reorganisation toward cash crop production and the introduction of European cattle and other livestock aimed at meat export to mining areas.
The European herds grew and trampled remaining indigenous cultivations – driving the farmers either to the cities or mining camps, both riddled with disease, especially smallpox.
Turning to Sugar, we find a story even worse than that of silver. Sugar production had a long history around the Mediterranean, but in mid 15th century Portugal took it to another level. After taking possession of the Azores and Madeira isles, Portuguese sugar production was taken to Madeira. The island was covered in dense forest offering a double opportunity; good timber for shipbuilding and larger amounts of lesser quality timber for sugar production.
Like silver, sugar production consumed large amounts of timber; but where the former was tied to the ore location, the latter could strip the surrounding area and ravage the ecology, then pack and move somewhere else to repeat the process. So, with capital from Genoa, Portuguese settlers and African slaves, sugar production was established on Madeira.
Sugar output at the start of the century was 80 tons a year; this rose to 1300 tons in 1494 – at the cost of 60,000 tons of timber used to feed the boiling ovens (146). This revolution was based simply on slave labour and ecological disaster. Forestry destruction was accompanied by altered hydrology – and streams ran dry. The solution was the construction of a massive irrigation complex requiring complex and dangerous structures to deal with the steeply undulating and terraced land. Slaves, of course, were used for this perilous work, and many died as a result (147).
Madeira became the world’s largest sugar producer by the late 15th century, feeding the expanding global sugar market. Things then ground to a halt. The sugar market contracted, the soil was denuded and up to 10% of slaves were dying annually.
As a result, and with expanding sugar markets again, Flemish and Italian money financed the relocation of sugar production to Brazil. Here there was ample water supply and sugar cane could be grown without irrigation (148).
But, as before, the plantations consumed huge quantities of timber, both for fuel and for clearance to make room for cultivation. After just over a century – up to 1700 – 1000 square kilometres was devoted to sugar production, and timber for the ovens represented 21% of operating costs second only to the cost of slaves. At this time some slaves were used full time to collect firewood, each person required to collect 1600 pounds of wood a day (149).
Throughout, competition was intense, planters were often in debt and profits went primarily to financiers from Italy, Holland and Britain. This impelled planters to over exploit land and slaves, with the negative effect of declining productivity. Once again soil quality collapsed and slave revolts plus military and economic upheavals cut Brazil’s leading position in sugar production (148 -150).
Once again, sugar production sought fresh ground, this time the Caribbean islands; and the same cycle of destruction repeated itself. 30 years after Dutch capital had established sugar production on Barbados in1630, the islands forests were virtually stripped (150).
Once more soil problems soon followed, this time accompanied by plagues of insects and vermin, and drought. Animals were introduced to produce fertiliser for the soil, and more slaves were brought in to compensate for the poor soil fertility. To maintain production levels more slaves were introduced year after year raising production costs, as well as slave fatalities.
In the 1650’s sugar plantations were introduced in the much bigger island of Jamaica. On the larger island plantations could move on to healthier soil when necessary, and slave deaths fell to a lower rate that was maintained on Jamaica for the next 75 years. As a final twist the slave ships introduced yellow fever into the Caribbean; whilst the slave population was able to adapt, the disease was a serious threat to British and French colonial armies throughout the 18th century (153).
So, Moore sees the stories of Silver and Sugar as ‘central moments’ in the original accumulation of capital, and goes on in the final Section of his paper to draw together his arguments regarding the birth of Capitalism.
By looking again at his introductory comments and at this final section it is possible to daw out more precisely Moore’s argument regarding the origin of capitalism. Moore is looking primarily at the ecological consequences of the emerging capitalism, but it is possible to distil his views on the emergence itself.
In his introduction (98 – 105) he makes clear his support for a single origin of capitalism, rather than many in different places. He also states that this origin took place in what he calls the “long” sixteenth century (1450-1640).
However he does not limit this emergence to England, but calls it a ‘”vast but weak” world-economy that stretched from Poland to the Americas’.
Capitalism’s emergence involved, he says, “a quantum leap forward in the scale, scope, and speed” of matters. New relations between town and country were involved, as well as “recurrent waves of geographical expansion, as capital was compelled to seek out new supplies of land, as well as the labour to work it”. For example, in the New World rapid land degradation needed repeated acquisitions of more land and labour to support capital accumulation.
He realises that his views are contrary to dominant thought, that tends to see Capitalism and Industrialisation as synonymous, and where Industrialisation is seen as the main player and capitalism itself receives little attention.
In association with these views the countryside can be seen as harmonious with nature and the city as destructive of it. But such views, he says, ignore the dramatic rural changes wrought by capital in the countryside in the three centuries that preceded the Industrial Revolution – and it is here that we should look for the origin of capitalism.
The prime mover of transformation of both Industry and Agriculture has been capital and the logic of capital , as occurred in the emergence of capitalism in the 16th century alliance of landowners and states, whose reshaping of the land was the first major step in what became world domination.
Moore then focuses in on competing explanations of the origin of capitalism. He rejects Arrighi’s view that,
“… world capitalism did not originate within the economic activities and social relations [of territorial Europe]. Rather, [capitalism] originated in the interstices [the city-states] that connected those territorial organizations to one another” (1998: 126).
This because Arrighi sees feudalism narrowly, excluding urban centres from his view; this enables him to argues that these centres were themselves the originators of capitalism.
Moore favours a wider view of feudalism where city, countryside, production and markets are all part of the same system. Seeing things this way, he supports Hilton’s argument that the big developments in international trade, and the growth of big industrial and commercial centres, such as those in Flanders and Venice respectively, came after the growth of agricultural production stimulated by the ‘struggle for feudal rent’ (Hilton 1976,115).
He builds on this view in his final section where he argues that the conquest of the Americas in the production of Sugar and Silver, was
“… decisive in channelling the outcome of feudal crisis towards capitalism” (155).
He then outlines the consequences for Europe of the conquest of the Americas. Most important, he argues, was the new relation between town and countryside, which featured much wider trading routes than those of the older feudal relations, and featured new systems of production in both the Old and New Worlds.
The European countryside became more urbanised, and regional specialisations grew up in sheep, cattle and timber etc. Moreover, what he calls the two main arms of ‘capitalist exploitation of the environment’ – sugar and silver – gave rise to new productive networks of cash cropping in cereals, forestry and ranching.
Despite all this, Europe’s peasants suffered alongside African Slaves and South American forced labourers. This time, though, it was via repeated food shortages and epidemics that ravaged villages and towns alike.
Moore then repeats that the Americas were especially important in the transition to capitalism, in a number of ways. First he identifies American Gold and Silver as providing Medieval Europe, chronically short of bullion, a hedge against famine,
“particularly in those cities that played a crucial role in the original accumulation of capital”(158).
Secondly, the New World, benefitting from favourable climates, from vast tracts of lands, and from slave labour – and having avoided the serious peasant revolts of the Old World, provided a flow of sugar and other agricultural produce, in a way that deepened the town/country division of labour within core states beyond anything possible in a single national economy.
All this meant, for Moore, that the Americas were,
“economically central to the consolidation of early capitalism in the 16th Century” (159)
The direct profits from Sugar and Slavery, together with indirect profit via reduced costs for provisioning the working class – and the profits from shipping and shipbuilding – bolstered an accumulation fund that allowed more expansion and intensification of the ‘world capitalist division of labour’.
Here, Moore concedes that Brenner (and thus Ellen Wood too) may be right,
“ … that the social transformation of English agriculture, which made possible increased productivity, also made possible the emergence of a vast reserve army of labor which could be put to work in the satanic mills ” (159).
…. but he argues that this in itself was not enough to launch capitalism.
It was the huge transfer of wealth from American Sugar and Slavery, in the ways outlined above, that helped build an accumulation fund that made possible both the further expansion and intensification of the world capitalist economy.
All of which drove a widening division between core and periphery, between town and country and within the countryside too – all necessitating the continued growth of capitalism.
Comparison of the Wood and Moore Perspectives
Whilst there are many differences in Moore’s account compared to Wood’s he does seem to agree that capitalism originated in the agrarian changes made around the 16th Century.
Where they differ is that Wood contends that changes in England alone, driven by agrarian capitalism, were sufficient to lead to the development and spread of capitalism to industry and eventually to the rest of the world. Moore argues that this in itself was not enough, and he stresses the need for finance and agricultural produce from the Americas to get capitalism established.
Thus Moore brings into his explanation the ‘original accumulation of capital’ that he attributes to the systems producing Silver and Sugar, and to cities and to the town/country divide. Wood, on the other hand, seems to feel that agrarian capitalism was able to accumulate capital as part of its ordinary operation.
Moore too sees the emergence of capitalism as stretching from Poland to the Americas, while Wood looks no further than agrarian developments in England.
Finally, Moore, while denying that capitalism originated in cities – instead seeing its origin in the agrarian ‘struggle for feudal rent’ – rather confusingly cites ‘city state capitalists’ as one of the three allies promoting the geographical expansion that preceded capitalism and that ‘made the transition to capitalism possible’.
Summary
Despite the first draft nature of these 2 pages looking at the Origin of Capitalism a number of matters seem to be clear.
Progressively, over the course of nearly 4 centuries the mass of the people of England and other nations of Britain, millions of people, were persuaded, manipulated or forced to leave the land that had sustained them and their forbears for hundreds of years. There was little chance of consent involved.
This meant loss of livelihood, most likely loss of their homes, removal from the only life they knew – and a future uncertain in how they would be able to live. People had lost rights to firewood, timber, game and grazing for animals, and land for crops.
There were two major phases of this dispossession;
- the earliest ran from about 1480 to 1600 and was generally motivated by the anticipation that the Lord or other landlord would be able to charge a market rent higher than that decided by precedent an tradition
- the later phase supported by parliament ran from about 1700 and 1870, was motivated by arguments regarding ‘improvement’ leading eventually into a policy of greater agricultural productivity and the need for a propertyless class of people needing to work for wages
- Hundreds of villages disappeared from the countryside; some because they were no longer needed by the evicted villagers; others because they spoiled the view in the large private grounds of ‘country gentelmen’.
The ethic or ideology of ‘improvement’ used to justify these practices was also used in the colonies of the times as justification for the theft of land from indigenous people.
There are accounts of resistance ranging from damage to fences, ditches and other aspects of the enclosed farms, to demonstrations and riots and to large scale revolts. Bands of so called vagabonds roved the countryside.
Tudor monarchs took steps to slow the rate of enclosures because they were concerned at the alarm and disruption caused by the protestors – not because they were concerned at the starvation and deprivation motivating the protests.
At the same time extremely punitive legislation was passed including the death penalty for some 50 poaching related offences; this was later expanded to 200 capital offences – many including intensified punishment. As a result hundreds were hanged for petty offences.
Those brave or desperate enough to join large scale revolts risked death in battle, or execution after defeat. Those deemed to be prominent were executed in the most vile and hideous manner.
If one accepts the view that finance and produce from the Americas were necessary for the birth of capitalism, then the unconscionable horrors of African Slavery and South American forced labour have to be added to the awful enough crimes of enclosure and dispossession.
It is plain that the introduction of capitalism was no peaceful or consensual process; it was carried out with cruelty, disregard and contempt for the mass of the people who would become the wage earning working class. The process cannot be retrospectively justified on the basis of subsequent events.
Appendix 1
Explainers
In this section a number of concepts used by Ellen Wood will be explained, in order to make her arguments clearer.
The market – Opportunity or Imperative
This idea describes the difference between pre capitalist markets, and the market in capitalism.
In pre capitalist societies, such as feudalism, markets existed but they were not essential for people to acquire the things they needed to live (self reproduction). Peasants farmed the land and produced what they needed; the Lords took produce from the peasants by means of superior force – coercion; to increase their consumption the Lords didn’t need to help the peasants become more productive, they just had to be more effective in extracting produce from the peasants.
Markets were useful to both parties if they had too much of one product and not enough of another. It was an opportunity to get rid something you didn’t want and acquire something you did want.
In capitalist society by contrast, where goods are produced to be sold in the market, everyone – worker and capitalist – has to engage with the market; there is no choice in this, it is an imperative. Workers need the labour market to get employment and thus a wage with which to buy food, housing and other goods – all only available via the market. Capitalists too have no choice; they need to get workers via the labour market; premises via the property market; machinery via the machine tools market. They then need to sell their products via the wholesale and retail markets, in order to re-invest and buy the means of life in much the same way as workers (but with perhaps more to spend).
Another difference between the two types of market is the degree of interdependence or connectedness.
In capitalism ‘the market’ is an integrated network of smaller markets all influencing one another. For example in a national economy the housing market will be influenced by the labour market, by the markets for building materials and by financial markets that influence interest rates; the financial markets of course are international, as are raw material markets and even the labour market is influenced by overseas markets. In this way the network of individual markets stretches out around the globe, making up the whole capitalist market where everything influences everything else.
By contrast, in pre capitalist society markets were overwhelmingly unconnected. Buying and selling in one town could go on without being influenced by markets in other surrounding towns.
Extra-economic coercion
This is a Marxian term dealing with the ways in which ruling classes extract the surplus product from the workers, peasants or slaves who produce it.
In capitalism the surplus product is extracted from workers within the economic process itself; thus workers produce the value of their own consumption (paid to them as wages) in only a part of the time during which they are employed. The value produced in the remainder of time belongs to and stays with the capitalist employer; after payment of wages and other costs the net remainder (the surplus product) is kept by the employer in the form of profit. The whole extraction of the surplus product takes place without overt coercion in the economic production system itself.
Workers in capitalism are today generally so well socialised into the ‘naturalness’ of the system that people compete with one another for ‘good’ jobs, and think of themselves as lucky – not exploited – when they obtain one.
By contrast, in feudalism, peasants possess the land and produce the agricultural product. Therefore the only means the Lords have of extracting a surplus from the peasants is via the coercion of political, juridical and military power. The Lords thus use coercion outside the economic production system itself (extra-economic) in order to secure the means of their own maintenance. Peasants have little choice but to comply with such demands in the face of legal or military compulsion.
In capitalism compulsion comes from the threat of unemployment, in feudalism compulsion comes from the threat of the sword.
Politically Constituted Property
This is a phrase, borrowed from Brenner, that describes in another form of words the property secured by ruling classes by means of ‘extra economic coercion’ just described.
As Wood points out, it was an important observation of Marx that the non-producing ruling classes of different social systems (e.g. Capitalism, Feudalism, Slavery) employ different methods with which to extract the surplus product from the producing class.
Only in capitalism is the surplus product, almost in entirety, extracted within the economic process without overt coercion. In all previous forms of society with a ruling class, property has been extracted by means of coercive power based on political, juridical or military might.
Thus politically constituted property is a phrase that encapsulates that situation.
Parcellized Sovereignty
This is a phrase used by Anderson (1974) in his definition of feudalism. It refers to the way in which sovereignty in feudalism worked through a hierarchical system of conditional property.
As described in the preceding text, the monarch owned and was sovereign of everything, but in practice Lords were given conditional sovereignty over tracts of land, and in turn Peasants too were given conditional sovereignty over the fields in which they produced the wealth of the society. So sovereignty and power were hierarchically fragmented or ‘parcellized’ between the three classes, although the arrangement as a whole worked to in favour of the Lords and the Monarch, to secure their positions through control of political, juridical and military power.
See Perry Anderson, Lineages of the Absolutist State (London: Verso, 1974).
Enclosure
This is a catch-all phrase that captures the various processes that transformed the livelihoods of the mass of the population from self subsistence agriculture to that of propertyless wage labour.
The archetypal enclosure situation involved the transfer of land ownership from the traditional rights of open field peasant farmers to that of absolute and exclusive ownership of land by individual Lords or larger landowners. This might involve lands being fenced off, but not necessarily. The crucial change was that of legal ownership.
The consequence for the former peasant farmers was that they lost their livelihoods and perhaps their homes too; their main recourse was to find paid wage labour in the new large farms or in town workshops, but this was not possible for many. For landowners it meant absolute and exclusive ownership of the land involved.
The Ideology or Ethic of Improvement
This concept refers to spread in the seventeenth and later centuries of the idea of agricultural ‘improvement’. Wood (106 -107) tells us that the original meaning of the word, of French derivation, was more specific to that in use today. Originally, ‘improve’ meant to do something for profit, especially to cultivate for profit.
By the 17th century ‘to improve’ was clearly understood to mean to make land productive and profitable. It was especially associated with the enclosure of land and the reclamation of waste land. The term eventually became less specific and eventually took on its modern meaning with no necessary connection to ideas of profit.
But in the 17th century improvement was definitely linked to productivity and profit, fitting nicely with the ideology of the emerging agrarian capitalism. In that century a new body of literature grew detailing the benefits and means of improvement. It became a major topic of interest of the Royal Society, which included prominent scientists and progressive members of the ruling class.
And ‘improvement’ meant more than just better farming techniques; it also meant new ways of seeing property and the replacement of traditional farming with newer more productive land use. For the Lords and larger tenant farmers, traditional open field peasant rights of grazing, communal ploughing, collection of firewood etc. were obstructions to more productive and profitable farming methods.
Importantly, the same argument of improvement was used to justify the dispossession not only English peasants but also the theft of colonial lands from indigenous people on the basis that their traditional land use represented a waste of its potential.
Profit, Wealth and Value 