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State and Capital in the Era of Primitive Accumulation
Jairus Banaji
In the second, posthumous volume of Sartre’s masterpiece, The Critique of Dialectical Reason, which is largely given over to the attempt to make deeper sense of Russia’s industrial expansion under Stalin, that is, to the problem of how a command economy works, Sartre explains that the best history is defined as a synthetic movement or what he calls “totalizing compression”. He writes, “two dialectical procedures are possible on the basis of an identical social reality. On the one hand, a procedure of decompressive expansion which starts off from the object to arrive at everything … in this case thought may be called detotalizing and the event loses out to the signified ensembles. On the other hand, a procedure of totalizing compression which, by contrast, grasps the centripetal movement of all the significations attracted and condensed in the event or in the object”.1 I want to suggest in this lecture2 that we need to integrate Marx’s notion of primitive accumulation into a wider history of capitalism that allows for the combined nature of its evolution, and that one way of doing this is to treat primitive accumulation as one of those “practical significations” or “signified ensembles” or structures that form a permanent dimension of capitalism. This means breaking with the linearity of the simplified model of primitive accumulation that many Marxists still subscribe to, with its “stagism” if you like, and with the strong resonance of teleology that usually goes with that. Retrospective readings of capitalism start with large-scale industry and imagine that primitive accumulation explains how that came about. But, if there is a sense in which this may account for Britain’s industrial primacy, it is hard to see how it would “explain” most other industrial trajectories which were in any case influenced by Britain’s own expansion, either correlatively (as in India) or by negation (as with Britain’s main industrial competitors). In a critique of Marx’s pages, Gerschenkron made a great deal of this point, noting that the bank-financed industrial expansion that occurred in Germany did not presuppose anything like the protracted processes Marx had described.3 But, if my general suggestion is accepted, the obvious question of course is – what wider history? Do we have the categories for that? And how exactly do we see primitive accumulation fitting into this broader canvas?
It may help to start by dispelling possible misconceptions. At the level of national capitals, there is no inevitability which says that primitive accumulation will always succeed. Thus Spanish mercantilists such as Alberto Struzzi and Sancho de Moncada were relentless in their criticisms of Spain’s backwardness;4 Spain, in the later 16th and 17th centuries, offers a striking demonstration of the failure of primitive accumulation, precisely because nothing was as emblematic of this “original” accumulation as Spain’s amassing of American treasure and the pure predation and brutality involved in the way that was done. Spain amassed gold and silver but failed to convert this accumulated mass of precious metals into capital. Thus “Moncada urged Spain to emulate France and Holland, countries without mines, in which, because of industry and active commerce, gold and silver abounded”;5 and the naturalised Spaniard Struzzi wrote in 1624, “It is absurd to expect money to stay in Spain. It is needed in trade. The Dutch and others pay for goods in money, but it then returns to them by other paths through trade. There is no nation rich without trade”.6 For primitive accumulation to have succeeded, Struzzi was telling his readers, Spain would have had to have had a class of commercial capitalists strong enough to match the competition of “the Dutch and others”; yet, if we look at the Mediterranean as a whole, the two regions where no substantial class of indigenous capitalists ever emerged, at least not in a serious way, were precisely the great empires ruled over by the Spanish Habsburgs and the Ottomans, including cities like Naples that were under Spanish rule.7
Secondly, the amassing of a large capital stock even in the more advanced countries was not a sufficient condition of industrial capitalism. In the Netherlands, in the eighteenth century, “rapidly accumulating stocks of capital” led in fact to the financial sector becoming an “important sector of the economy in its own right”, as Jan de Vries tells us.8 Here, of “the large capital stock amassed by a century of profitable expansion … [l]ittle new investment found its way into industry”. It flowed instead into doubling the size of the VOC in the face of new competition from the French and English, into establishing a Caribbean plantation economy, and into a new type of whaling enterprise which faced higher capital requirements as the whaling grounds retreated further north.9 In the case of England, Christopher Hill had asked, “Where did the capital for the Industrial Revolution come from?” and replied, “Spectacularly large sums flowed into England from overseas – from the slave trade, and especially from the seventeen-sixties, from organized looting of India”.10 Yet Hill went on to make the point “it is not always easy to trace connexions so directly. There is not much evidence that the plunder of India flowed directly into industry: much of it was spent on conspicuous consumption, and on buying political immunity for the plunderers”.11 This puts paid to Marx’s implied suggestion that the “plunder” of Bengal by the servants of the East India Company who legally engaged in private trade was directly instrumental to industrial expansion in Britain. In East Indian Fortunes Marshall calculated that “£3,000,000 was sent home before 1757 and about £15,000,000 over the 27 years between 1757 and 1784”, but notes, about those who returned to Britain from Bengal, “Few … regarded their fortunes as capital for further venturing in trade or manufacturing in Britain”.12
Thus, the narrow sense in which many non-Marxist scholars, economists more than historians, understand “primitive accumulation”, namely, as the accumulation of capitals which are then channelled into industrial development13 is a misconception of the broader sense in which Marx himself understood this dimension of capitalism’s history. Primitive accumulation was viewed by him both as a long and violent history of dispossession, of what he called the “terrible expropriation” of the “great mass of the people from the soil”14 and as a process of consolidation of capital. Much of Marx’s attention was, of course, given over to the first side of this long “pre-history of capital”,15 but Chapter 31, which deals with the consolidation of capital, alludes to a very wide range of topics that include colonial trade and the colonial system, public finance, indirect taxation, commercial wars, protectionism, child labour, and the slave-trade. However, the overall impression a reader comes away with is that primitive accumulation was to Marx’s mind a sort of long “pre-history” of industrial capitalism as this had developed by the 1860s. The main drawback of this model in this stark form is its linearity. Centuries of violence and dispossession, and of states intervening to consolidate capital, are followed, in the way Marx tells this story, by the eventual triumph of large-scale industry. But the fact that Marx’s last chapter dealt with Wakefield suggests that he extended this narrative into the 19th century to include settler colonialism in his history of primitive accumulation at a time when Britain at least was widely thought to be suffering from a ‘superfluity’ or overaccumulation of capital,16 and, following this cue, I want to suggest a more complex or “combined” history of capitalism that allows, as I said, for the simultaneity of capitalism and primitive accumulation. A good example of this method is the way Rosa Luxemburg describes Russia in the 19th century. She notes that in Russia “big industry staged its real entry” only in the last two decades of the 19th century and goes on to say, “‘Primitive accumulation’ of capital flourished splendidly in Russia, encouraged by all kinds of state subsidies, guarantees, premiums, and government orders”, placing the expression itself in quotes.17 Again, the state is central to the process.
To allow for this history of capitalism, however, we need to establish a clear distinction between two forms or “determinations of form” that Marx himself tends either to conflate or to ignore. Marx saw what he called manufacture and the manufacturing period as signifying the emergence of industrial capital. In an interesting passage of the Grundrisse that I shall return to, the period of mercantilism is described as “an epoch where industrial capital and hence wage labour arose in manufactures”.18 Now, it is true that in the seventeenth century industrial production acquired new, enhanced, significance, for example, in the writings of those like the Calabrian Antonio Serra who saw state-supported production of manufactured exports as the most effective way of securing surpluses on the current account and the best form of a mercantilist policy.19 But, stated the way Marx does, this ignores the fact that these were largely merchant-controlled enterprises. As late as the eighteenth century, luxury-goods industries such as the Lyons silk industry were dominated by merchant’s capital, by the so-called marchands-fabricants studied by Carlo Poni in one remarkable paper.20 Those firms used the putting-out system and a battery of designers to generate the sort of flexibility that allowed them to dominate the European fashion market to the despair of competitors in England and Italy. In fact, as early as 1929, Henri Hauser had signalled the distinction involved here by writing, “at the end of the fifteenth century new industries appeared, the children of the Renaissance; war industries like the production of guns, luxury industries like silk; intellectual industries like printing, type-making and paper-making… It would, perhaps, be premature to speak of industrial capitalism… But let us at least speak of commercial capital being applied to industry”.21 Now, “commercial capital applied to industry” is not industrial capital in the sense in which the owners of modern large-scale industry have come to personify this. It seems more plausible to reserve the term “industrial capital” for enterprises that were run by manufacturers who were no longer merchants. In the US this transition was still ongoing in the 19th century cotton industry22 and there industrial capital proper only truly emerged in the shape of the large vertically integrated enterprises in oil, steel, chemicals, rubber and so on, that came about towards the very end of the nineteenth century.23 The same is true of the development of industry on the Continent, for example in Germany where industrial capitalism exploded in the early 1870s as bankers like Bismarck’s friend Bleichröder came around to financing that “great expansion”.24 In any case, the merchant-controlled manufacturing enterprises of the late medieval and early-modern periods cannot be seen as industrial capital in this stricter, modern sense.
In volume 3 of Capital, there is a passing reference to “the manner and form in which commercial capital operates where it dominates production directly”.25 The two examples Marx cites of this are first “colonial trade in general (the so-called colonial system)”, that is, the vast transatlantic commercial system which among other things revitalised slavery as a modern development, and secondly, “the operations of the former Dutch East India Company”; in short, two very substantial trade sectors in both of which Marx seemed to think commercial capital was active in new, more “direct” ways. As important as this text is another. “Industrial capital has value for them, even the highest value”, Marx says about the mercantilists in the Grundrisse passage that was cited earlier, “because it creates mercantile capital and the latter, via circulation, becomes money”.26 Now, it is this creation of mercantile capital via “industrial capital”, that is, via production, that forms the stable heart of the pre-industrial regime, and I’d like to suggest that it is plausible to see merchant or commercial capitalism as a system of accumulation where merchant capitals are characterised by this tendential drive to subordinate production directly. Of course, since the biggest commercial firms were always highly diversified business enterprises that moved capital between finance, trade and manufacturing, the expansion of mercantile capital in this pure sense was part of more complex strategies of accumulation. It might make sense to see merchant capitalism as characterised by “sectors”, of which the four or five main ones were (1) the Verlag-based manufacturing that first sprawled across large parts of the countryside of western and central Europe as early as the thirteenth century, reaching an absolute zenith in the eighteenth; (2) the big concentrated money-markets which moved in sequence from Venice to Antwerp to Genoa to Amsterdam and finally to London; (3) the commercial investments that went into trade sectors such as the Atlantic and Asia; in the Atlantic the productive capital financed by merchants took the form of plantations and slavery; and (4) the produce trades that were the typical form of British mercantile capitalism in the 19th century and characterised by advances to household producers circulated either directly (as in the Government’s monopoly of “Bengal” opium) or more generally through local brokers who were usually substantial indigenous merchants in control of their own networks. In Many-headed Hydra, Linebaugh and Rediker describe shipping as a “mode of production that united all of the others in the sphere of circulation”,27 and since most shipping magnates were also merchants, at least before the emergence of specialised shipowning in the late 18th century,28 shipping should likewise be seen as a purely merchant-capitalist sector, a fifth one. The flexibility and sophistication of the bigger merchant firms lay not just in their minute knowledge of international markets but in their ability to move between sectors and combine them in various ways. On the other hand, the vast mass of lesser commercial capitals specialised within particular sectors, e.g. the London agency houses that financed much of the West Indian trade, or the cambisti or bankers who dominated Europe’s exchanges, starting with the very substantial money-market in Venice that was controlled by Florentine banks,29 and so on.
Today, we are in a much better position to flesh out some of the more abstract intuitions of Marxists like Preobrazhensky. When he argued that “the whole period of the existence of merchant capital” should “be regarded as a period of primitive accumulation, of the systematic plundering of petty production”,30 what he had in mind were sectors 1, 3 and 4 I have outlined above, basically Verlag + the colonial trades. By “plunder” he simply meant what Arghiri Emmanuel would later call “unequal exchange”, that is, enforced control over terms of trade in a world marked by mobility of capital/immobility of labour, for example, by holding the wages of weavers down, as all merchant capitalists were able to do when they monopolised raw materials. But Preobrazhensky situated himself in a tradition of historiography shaped by Franz Mehring’s views of merchant capital as the “revolutionary force of the fourteenth, fifteenth and sixteenth centuries”, one that “not only created modern absolutism but also transformed the medieval classes of society”.31 In Russia, this strand of history was best represented in the work of M.N. Pokrovsky, and Preobrazhensky showers praise on him when dealing with primitive accumulation.32 It is also there in Isaak Rubin’s lectures on economic history.33 Pokrovsky himself continued to maintain, as late as 1929, that “Commercial capitalism played a huge role in the creation of the Russian monarchy. It created this Russian absolute monarchy”,34 a position he was soon forced to retract. Thus when later historians like Georges Lefebvre posited a crucial “symbiosis between the State and the merchants” and argued that it was “the collusion between commerce and the State (that) promoted the development of capitalism” (this was the stand Lefebvre took in the transition debates),35 or, when Mousnier suggested that the absolute monarchies and large-scale capitalism were “functions of each other”,36 the same dissident historiography was being articulated. Indeed, Maurice Dobb himself devotes a whole chapter of Studies in the Development of Capitalism to what he calls “Capital Accumulation and Mercantilism”. He argues there that mercantilism was “essentially the economic policy of an age of primitive accumulation”, “a system of State-regulated exploitation through trade which played a highly important role in the adolescence of capitalist industry”.37 The peculiar nexus between state and capital reflected in the fluid array of mercantilist policies that have their origins in the later middle ages and reach their culmination in the seventeenth century seems to me to best describe the political economy of primitive accumulation.38
Before coming to this, however, let me say a bit about three of the five sectors I listed above. Putting-out networks were the “first hard evidence of a merchant capitalism”, Braudel wrote in Wheels of Commerce.39 Wolfgang von Stromer has argued that Verlag was the most widespread type of economic organisation in Europe before the advent of large-scale industry. The textile industries of the twelfth to sixteenth centuries and later were entirely based on it. It allowed for “export-oriented standardized mass production” and in South Germany for a concentration of production in entire industrial basins.40 In London in the seventeenth century, as Beier shows, “big City merchants” “organized craft production in the suburbs and countryside”, a development, he argues, that led “naturally to the industrial revolution because, as Dobb states, ‘[T]he capitalist merchant-manufacturer had an increasingly close interest in promoting improvements in the instruments and methods of production’”.41 In France, “concentrations of capital were in commercial form”, Lefebvre writes. “Millions of peasants worked for city merchants”.42 Picardy and Beauvais in the north of France became the base of a rural-based textile industry controlled by “powerful merchants”.43 Putting out [le travail à façon] was widespread in the Swiss textile industry of the early 19th century, as Veyssarat’s work shows,44 and outwork was still the predominant form of industrial organisation in Britain in the 1820s.45 Bythell who notes this cites Mendel’s argument that so-called “proto-industry” “created an accumulation of capital in the hands of merchant entrepreneurs, making possible the adoption of machine industry with its (relatively) higher capital costs”.46 Finally, it is worth noting Maxine Berg’s criticism that Marx’s model of manufactures was “useful in highlighting the features of some eighteenth-century industry” but it was a “linear model” and failed “to deal adequately with the features of the putting-out system and other related forms of domestic manufacture”.47 (Marx says little about putting out.)
The American plantations “were capitalist creations par excellence”, Braudel notes in Wheels of Commerce, and then clarifies, “[i]t was European trade that commanded production and output overseas”.48 London’s expansion in the late 17th century was fuelled by the plantation trades. But to start with, it is worth noting that “in terms of both capital value and overseas trade, the slave system was expanding, not declining, at the turn of the nineteenth century”.49 “Twice as much money was invested in the slave trade during 1791–1807, at the height of the abolitionist agitation, as in the agitation-free decades 1761–1780”.50 British slave-trade capital, Drescher argues, rose sharply at the end of the eighteenth century.51 “There was little vocal opposition to the trade between the sixteen-fifties and the loss of America, not even from Quakers”.52 In the plantations themselves, next to slavery, the critical relation of production was merchant economic control over planters. The total sum owing to London merchants by West Indian sugar planters, for example, was several million pounds by 1770, roughly as much as the total mercantile debt owed by the mainland colonies to London at this time, viz. £3 million.53 In Cuba, the Matanzas sugar economy was largely financed by the Havana merchant houses through so-called “refacción” contracts which guaranteed sugar supplies for export.54 The bigger merchant establishments such as the Torrientes were the main accumulators of Cuban capital.55 Yet, this is not the end of the story. When Baron Alphonse de Rothschild visited Cuba in 1849, it was not the Havana merchant houses but the London merchant banks, he claimed, “who are making all of the profit from commissions, credits and consignation”. “The sugar business here is the monopoly of the (Havana) exporters… However, they are not doing the most important or weighty business, this [is] being done by Barings, Coutts, Fruehling & Goschen in London”.56And, for roughly the same reasons, in 1860 a North Carolina paper described New York as “the Northern state which had profited most by the slave labor of the South” thanks to the “commercial ties” that existed between them.57 Eric Williams was surely right to claim, “The commercial capitalism of the eighteenth century developed the wealth of Europe by means of slavery and monopoly”, and to say that “in so doing it (commercial capitalism) helped to create the industrial capitalism of the nineteenth century”.58 Williams describes a historical dialectic similar to primitive accumulation, but one in which one form of capitalism feeds into the expansion of another and destroys itself as it does so, except that it did not, as Drescher’s critique showed, since slavery continued to expand. Finally, it is worth noting that in Theories of Surplus Value Marx focuses on the planters rather than on the London houses that financed this whole web of trade. When he wrote, “the business in which slaves are used is conducted by capitalists”,59 he seemed to have the planters in mind. But in the Atlantic trades “there was a fundamental shift to the commission system” from the 1660s. British merchants supplied American planters “with a wide range of mercantile and quasi-banking services, including the provision of shipping, insurance, and eventually finance”.60 “The commission system, which was overwhelmingly centered on London, came to dominate the greater part of British Atlantic trade”.61 This explains how “at least half of the total for (Jamaica’s) import and exports made its way invisibly back to England (in freight charges, insurance, commissions, interest on debts, and transfers of money to absentee landlords). All in all, the net benefit for England in the year 1773 was getting on for £1,500,000. In London, as in Bordeaux, the proceeds of colonial trade were transformed into trading-houses, banks and state bonds”, says Braudel,62 confirming Rothschild’s point about where the profits of Cuban sugar went. Thus, Marx’s expression “conducted by capitalists” should really refer us back to a conglomeration of commercial interests at the heart of which lay the London West India houses whose judgements or instructions to the island agencies were “based on City news and outlook”.63
Finally, a third sector, the produce trades. British merchants who financed household production in India and West Africa in the 19th century did so through a system of advances. Mercantile advances embodied a circulation of capital. These were not transactions in the sphere of “simple circulation” but a means of integrating peasant household labour into the capitalist world market. Chayanov called this form of accumulation “vertical capitalist concentration”. By this he meant that “while in a production sense concentration in agriculture is scarcely reflected in the formation of new large-scale undertakings, in an economic sense capitalism as a general economic system makes great headway in agriculture”. Agriculture, he wrote, “becomes subject to trading capitalism that sometimes in the form of very large-scale commercial undertakings draws masses of scattered peasant farms into its sphere of influence and, having bound these small-scale commodity producers to the market, economically subordinates them to its influence”.64 The example Chayanov cited was of the large cotton merchants of the Knoop family. “The need to lay out money in advance made heavy demands for working capital”,65 which meant that the produce trades were characterised, over time, by a growing concentration and centralisation of capital, with giant firms like the United Africa Company (UAC, the trading arm of Unilever) dominating very large shares of the produce market in British West Africa.66 It was this sort of “vertical concentration” that sustained the largely British and French trades in palm oil, raw cotton, opium, wheat, tea, teak, rice, coffee, jute, rubber, groundnut and so on, all of which saw major periods of expansion in the mid-to-late 19th century and early twentieth.67On “very small farms” gross output per acre has always been the important calculation for households, as Krishna Bharadwaj showed for India back in the seventies; “very small cultivators” concentrate on high-value cash crops with a high labour input per acre.68 Jute was a prime example of this “forcing up of labor intensity”, as Chayanov characterised the economic behaviour of most farm households, and of course “[t]he key to making money out of jute manufacturing both in Calcutta and Dundee was to buy raw jute at as low a price as possible”.69 In parts of China the equivalent crop was tobacco, “the most valuable of all cash crops”, as Chen Han-Seng described it in a valuable study from 1939,70 except that here it was a large vertically integrated industrial firm B.A.T. or British American Tobacco that enforced the sort of price domination that held large numbers of peasant households in thrall. Prices were dictated by the company’s foreign leaf experts who were specially flown in from the US South, just as the English East India Company had, back in the eighteenth century, fixed the rates to be paid for a wide assortment of piecegoods from Bengal at their headquarters in London, two years before actual delivery, with no allowance for price increases that weavers had to contend with in the intervening period,71 and just as the French commercial houses that financed groundnut cultivation in Senegal fixed the prices to be paid to producers at their head offices in Bordeaux.72 The so-called “self-exploitation” of the peasantry fed directly into higher rates of surplus-value on these commercial capitals, and through them on the total social capital. “Is the general rate of profit raised by the higher profit rate made by capital invested in foreign trade, and colonial trade in particular?”, Marx had asked in volume 3,73 and replied of course in the affirmative. (Note that Emmanuel’s theory of unequal exchange presupposes equalisation of profits with unequal rates of surplus value, the latter thanks to immobility of the labour factor.)74
The expansion of mercantile capital was thus the standard form of capitalist accumulation for centuries together, even if this history has never been properly constructed. Any historian who does so would have to start with the fierce struggles between Venetian and Genoese capitalists for domination of the Byzantine markets in Constantinople, the Aegean and the Black Sea. But leaving that aside, it is quite clear that in the seventeenth century a major transformation took place, as the state stepped in to extend its formal backing to capital and the competition of capitals took on a much stronger “national” form. If Spanish mercantilism was a long lament on Spain’s failure to develop, the mercantilisms of France, Holland and England were quite different in character, as “[c]ommercial competition”, in the words of von Schmoller, “even in times nominally of peace, degenerated into a state of undeclared hostility: it plunged nations into one war after another, and gave all wars a turn in the direction of trade, industry and colonial gain”.75 A fascinating passage in Volume 3 refers to the commercial struggles of the seventeenth and eighteenth centuries as “the industrial struggle of the nations on the world market” and sees the intervention of the state as seeking to accelerate the development of capital “by compulsion”, as Marx puts it. “It makes a substantial difference”, Marx says here, “whether the national capital is transformed into industrial capital gradually and slowly or whether this transformation is accelerated in time” by the use of tariffs and “the forcibly accelerated accumulation and concentration of capital, in short by the accelerated production of the conditions of the capitalist mode of production”.76 The passage ends with Marx underscoring both the “national”, that is, nationalist, “character of the Mercantile System”, as well as its purely capitalist content, saying that the mercantilists “show their awareness that the development of the interests of capital and the capitalist class, of capitalist production, has become the basis of a nation’s power and predominance in modern society”.77
The reference to primitive accumulation is unmistakable here, but what is interesting is that Marx now situates it within the global competition of capitals and it depends more than ever on the state’s “accelerating” role. All the various “methods” of primitive accumulation that were “systematically combined together at the end of the seventeenth century in England”, Marx had written, “employ the power of the state”,78 and there is a crucial sense in which the early development of capitalism was also about the expanding power of the modern state. It was Hilferding who picked up on this in the last piece of writing he ever drafted, but I shall come to that in a moment. In its most general sense, mercantilism expressed the identity of the interests of state and capital. This of course has been described in numerous ways, as “alliance”, “collaboration”, “liaison”, “partnership”, “backing”, “support”, and so on. For example, Rubin noted “during the age of merchant capitalism a close alliance was formed between the state and the commercial bourgeoisie, an alliance which found expression in mercantilist policy”.79 The general idea is nicely expressed in the way Brenner in his best work describes the relationship between Crown and company merchants, e.g. as the “powerful state backing” that “the City’s richest and most influential businessmen” received for their voyages of exploration under Elizabeth.80 But, in the sixteenth century, England was not a naval power. By the second half of the seventeenth century, “the navy not only grew in size but became an instrument of a national policy of commercial aggrandizement”.81 This is a central part of John Brewer’s argument in his brilliant book The Sinews of Power. By the early eighteenth century “the entire British fleet amounted to a capital investment of nearly £2.25 million”,82 half the value of the total capital invested in the Atlantic trade in the 1770s. Cromwell’s “foreign policy was dominated by economic considerations”, and “[f]rom the interregnum, commercial interests acquired a primacy in the formation of foreign policy”.83 Both French and English mercantilism had grown up in the shadow of Holland’s crushing commercial superiority in the second and third decades of the seventeenth century. Montchrétien’s Treatise of Political Economy (1615) shows both his admiration for as well as the profound influence of the Dutch. A major conclusion of his tract was the need to expand the pool of skilled labour and learn from the more advanced organisation of the Dutch manufactories.84 In England, Thomas Mun demolished the illusion that money was an independent force in the economy. He wrote, “It is not therefore the keeping of our Money in the Kingdom which makes a quick and ample Trade, but the necessity and use of our Wares in Forreign Countries and our want of their Commodities…”.85 Money mattered to the mercantilists of the seventeenth century chiefly as means of circulation, as a way of boosting liquidity and increasing the velocity of circulation to expand the flow of trade. By the late seventeenth century, as the Navigation Acts and the rapid expansion of English merchant shipping tilted the balance decisively in England’s favour, commercial wealth and naval power came to be seen as “mutually sustaining”. “The object of all three Anglo-Dutch Wars was to destroy Dutch trade and shipping”,86 but the broader assumptions behind this new-found aggressiveness were precisely those of any mature mercantilist state, the need to enforce a “national monopoly of the international carrying trade and of colonial markets”, to encourage import-substitute manufactures,87 and to convert the mass of the destitute and the unemployed into a productive labour force, not least, Bacon suggested in 1625, to contain sedition among the poor.88 It was left to Christopher Hill to note that “[a]ccumulation through monopoly trade was more rapid than in industry”, and that once large sums of capital were available for industrial investment by the late eighteenth century, “the navigation system itself became superfluous”.89
France, England and the United Provinces all had strong states and even if they differed radically in form, in substance they were essentially geared to promoting the needs of capital, since the strength of the state itself was increasingly seen as a function of the strength of “national capital”, as Marx called it in the passage I cited from volume 3. Thus Nicolas Mesnager in his mémoire to the Council of Commerce dated 1700 claimed, “Monsieur the cardinal de Richelieu did not find any means more effective to increase the power of the king and the wealth of the state than to increase navigation and commerce”.90 In the Netherlands, William of Orange agreed “Commerce is the pillar of the state”, but insisted, “if the security of the state was destroyed by French territorial expansion, the ruin of Dutch shipping and trade would assuredly follow”.91 And both there and in England the growth of the national debt depended crucially on excise duties, since “debt issues were underwritten by substantial increases in the excise on items like malt and beer”,92 and the greater part of tax revenue went into servicing the debt. As Brewer says, the term “mercantilist” “does provide a useful characterisation of an era in which the relationship between state power and international trade was seen as a problem of exceptional importance”.93 In short, the growth of capitalism was as much a function of governments and their financial needs as it was of the emergence of powerful groups of capitalists in international commerce and government finance, and it is this mutuality between state and capital which best defines the era of primitive accumulation. This was as true of French absolutism as it was of the Dutch Republic and of Britain’s fiscal-military state. Indeed, one of the most striking features of his pages on primitive accumulation is that the precise form of the state scarcely seems to matter to Marx.
Gerschenkron claimed “Marxism in general found it difficult to place the mercantilistic State within its conceptual framework”, and argued that this was because “Marxism at all times had difficulty with explaining dictatorial power. Even when, as in the case of Napoleon III, the State that was not dominated by a certain class could be presented as originating from an equilibrium of class power, the problem still remained that once the dictatorial State was established, it was able to pursue an independent policy of its own, because it had become an independent power in its own right… When it comes to Russia”, he said, “[t]he overriding consideration is that it would make little sense to regard the autocratic State as emerging from [an] equilibrium of class power”.94 There is a moment of truth in this criticism, but firstly, mercantilism was not confined to the absolutist states and in England, in fact, received its strongest expression in the Interregnum. Secondly, there have been significant attempts within the more creative strands of historical materialism to address this issue of the autonomy of the state. In his last, unfinished piece of writing called “The Historical Problem” Hilferding regarded the state’s existence as a machine aware of its own special interests as the state-power as the major problem of theory confronting Marxists. Indeed, in a paradoxical but I think perfectly true formulation he argued, “State power was objectively stronger in the heyday of liberalism than it ever was in the age of Absolutism”.95 “Under mercantilism the economy is not subordinated to the State”, he writes, “on the contrary, the State becomes a means of encouraging or establishing those economic interests and tendencies that simultaneously satisfy its own needs”.96 This is essentially the view I suggested in the preceding paragraph. Thus for Hilferding the “struggle to establish the absolute monarchy and with it the modern state” was a “struggle of the State-power [ein Kampf der Staatsmacht] against the ruling class”, one that was “supported by the bourgeoisie or sections of it”.97 For his part, Sartre has a similar if less extreme view in volume one of the Critique. He argues that “the State constitutes itself as a mediation between conflicts within the dominant class”,98 “constitutes itself as the organ of the contraction and integration of the class”, but crucially it “cannot take on its functions without positing itself as a mediator between the exploiting and the exploited classes”; “it affirms itself as a deep negation of the class struggle”. “The State therefore exists for the sake of the dominant class, but as a practical suppression of class conflicts within the national totalisation”.99 This, he says, is not pure mystification, because “the State really does produce itself as a national institution … it takes a totalising view of the social ensemble”, “it already posits itself for itself in relation to the class from which it emanates: this united, institutionalised and effective group … tries to produce itself and to preserve itself in and through itself as an essential national praxis, by acting in the interests of the class from which it emanates and, if necessary, against them. One need only look at the policies of the French monarchy between the fourteenth and the eighteenth centuries to see that it did not confine itself to providing mediation when forces were evenly balanced, but rather created this balance by perpetual changes of alliance, so that the bourgeoisie and the aristocracy would control each other, so as to produce itself, on the basis of this deadlock … as an absolute monarchy”.100
Whatever we think of these views, it is clear that the prevailing instrumentalist views of the nature of the modern state will simply not work in trying to describe its role in the era of primitive accumulation. There was no coherent mercantile interest for the state to be simply a pawn in the hands of this or that sector of capital. Moreover, as Wallerstein says, the growth of the national debt “reflected the growing autonomous interests of the states as economic actors”.101 In the case of Stalin’s Russia, arguably the last great episode of primitive accumulation in modern history, it is even less possible to derive the decisions of the state from any preformed classes. Under Stalin the “methods” of primitive accumulation ranged widely from dispossessing millions of peasants and breaking the resistance of an organised working class, even forcing it back into seriality, to the use of mass repression and terror as instruments of accumulation, the paroxysm of violence in 1937, the banning of abortion and revival of the cult of the family, the personality cult, manipulations of public opinion, and so on. Much of this has been brilliantly documented in Don Filtzer’s series of monographs which covers a very wide span of Russia’s industrial experience.102 The more abstract elements of analysis are given in volume two of Sartre’s Critique, and interestingly there he cites what must remain one of the more vivid images of Stalinist primitive accumulation, namely, John Scott’s account of the monstrous squandering of labour and production that occurred at the giant metallurgical complex at Magnitogorsk in the Ural industrial region, where between 1928 and 1932 “nearly a quarter of a million people came”, the vast bulk of them voluntarily, “seeking work, bread cards, better conditions”.103 Here Scott, who worked as an electric welder for five years in the thirties, saw those masses of uprooted peasants create “a gigantic plant and city” within five years. Under Stalin, he wrote, the “tempo of construction was such that millions of men and women starved, froze, and were brutalized by inhuman labor”.104 This had nothing to do with socialism, of course, since it presupposed the disarming of the factory committees which had occurred under the Bolsheviks very soon after the Revolution;105 presupposed also the silencing of the Opposition and suppression of a free press, and later, in the 1930s, that peculiar “reciprocity of incarnations” between Stalin and the bureaucracy which Sartre tries hard to fathom in his second volume. If there were limits to Stalin’s control of the Soviet bureaucracy, it remains true nonetheless that the bureaucracy saw itself as an incarnation of Stalin and of his frenetic drive to make Russia catch up with the west at any cost.
- Sartre, Critique of Dialectical Reason, vol.2, pp. 49, 188.
- This paper was presented as a keynote at the conference on primitive accumulation organised by the Institute of Social History in Amsterdam in May 2019.
- Gerschenkron, Economic Backwardness in Historical Perspective, Chapter 2, e.g., “Original accumulation of capital was not a prerequisite of industrial development in major countries” (p. 46).
- Perrotta, “Early Spanish Mercantilism”.
- Hamilton, “Spanish Mercantilism”, p. 234.
- Struzzi cited Perrotta, “Early Spanish Mercantilism”, p. 37.
- Zarinebaf, Mediterranean Encounters seeks to qualify this picture for the Ottomans, but fails to establish the presence of an influential class of merchant capitalists among the Turks.
- Jan de Vries and Ad van der Woude, First Modern Economy, p. 129.
- De Vries and van der Woude, First Modern Economy, p. 677.
- Hill, Reformation to Industrial Revolution, p. 200.
- Hill, Reformation to Industrial Revolution, pp. 245–6.
- Marshall, East Indian Fortunes, pp. 255, 215.
- Cf. Saville, “Primitive Accumulation”, p. 265.
- Marx, Capital, vol. 1, p. 928.
- Marx, Capital, vol.1, p. 875.
- Semmel, Rise of Free Trade Imperialism, Chapter 4.
- Luxemburg, Accumulation of Capital, p. 272.
- Marx, Grundrisse, p. 327; italics mine.
- Serra, Short Treatise on the Wealth and Poverty of Nations, ed. Reinert.
- Poni, “Fashion as Flexible Production”.
- Hauser, La modernité du XVIe siècle, with the extract translated in Kitch, Capitalism and the Reformation, p. 72.
- Porter and Livesay, Merchants and Manufacturers.
- Chandler, Visible Hand.
- Stern, Gold and Iron, pp. 164, 181.
- Marx, Capital, vol.3, pp. 446–7.
- Marx, Grundrisse, p. 328.
- Linebaugh and Rediker, Many-headed Hydra, p. 149.
- Milne, Trade and Traders, p. 96.
- Mueller, Venetian Money Market.
- Preobrazhensky, New Economics, p. 85.
- Mehring, Absolutism and Revolution in Germany 1525–1848, pp. 1, 3.
- Preobrazhensky, New Economics, p. 87.
- Rubin, History of Economic Thought, esp. Chapters 1 and 2.
- Barber, Soviet Historians, p. 61, citing A. Malyshev.
- Lefebvre, “Some Observations”, p. 125.
- Roland Mousnier, Les XVIe et XVIIe siècles, fifth edn (Paris, 1967), p. 98.
- Dobb, Studies in the Development of Capitalism, p. 209.
- Thus in the late 17th century the great English mercantilist Charles D’Avenant saw foreign trade essentially as a source of capital accumulation, cf. his view “as money that circulates at home begets money to private men, so bullion circulating abroad begets bullion to a country”, cited Lipson, The Economic History of England, vol. 3: The Age of Mercantilism, sixth edn. (1956), p.85. Cf. Hilferding, “The Early Days of English Political Economy”, p.486: “money is here regarded in its constant process of circulation, where it only goes out in order to come back in, each time in increased amounts”, from his essay on Mun and the early mercantilists.
- Braudel, Wheels of Commerce, p. 321.
- Wolfgang von Stromer, Revue Historique, 1991 .
- Beier, “Engine”, p.161, citing Dobb, Studies, p. 145.
- Lefebvre, The Coming of the French Revolution, p. 42.
- Goubert, Beauvais et le Beauvaisis de 1600 à 1730, p. ??.
- Veyssarat, Négociants et fabricants dans l’industrie cotonnière suisse, p. 205.
- Bythell, Sweated Trades, p. 13.
- Bythell, Sweated Trades, p. 249, citing Mendels, “Proto-industrialization”, Journal of Economic History, 32 (1972), p. 244.
- Berg, Age of Manufactures, first edn. pp.76–77; second edn., p. 65.
- Braudel, Wheels of Commerce, p. 273.
- Drescher, Econocide, p. 24.
- Drescher, Econocide, p. 25.
- Drescher, Econocide, p. 30.
- Hill, Reformation, p. 186.
- Nash, “Organization”, p. 124.
- Bergad, Cuban Rural Society, pp. 65, 167.
- Bergad, Cuban Rural Society, p. 173.
- Cited Inés Roldán de Montaud, “Baring Brothers and the Cuban Plantation Economy, 1814–1870”, p. 239.
- Foner, Business and Slavery, p. 191.
- Williams, Capitalism and Slavery, p. 210.
- Marx, Theories of Surplus-Value, pt. 2, pp. 302–3.
- Nash, “Organization”, p. 98.
- Nash, “Organization”, p. 103.
- Braudel, Wheels of Commerce, p. 279.
- Checkland, “Finance for the West Indies”, p. 467.
- Chayanov, Theory of Peasant Economy, p. 257.
- Marshall, East Indian Fortunes, p. 36.
- Fieldhouse, Merchant Capital and Economic Decolonization.
- Banaji, Brief History of Commercial Capitalism.
- Bharadwaj, Production Conditions, pp. 49, 64.
- Stewart, Jute and Empire, p. 44.
- Chen Han-Seng, Industrial Capital and Chinese Peasants, p. 23.
- Hossain, Company Weavers, p. 51.
- Marfaing, Evolution du commerce, pp. 177ff.
- Marx, Capital, vol.3, p. 344.
- Emmanuel, Unequal Exchange.
- Von Schmoller, The Mercantile System, p. 64.
- Marx, Capital, vol. 3, p. 920.
- Marx, Capital, vol. 3, p. 921.
- Marx, Capital, vol.1, p. 915.
- Rubin, History of Economic Thought, pp. 25–6.
- Brenner, Merchants and Revolution, p. 61.
- Brewer, Sinews of Power, p. 11.
- Brewer, Sinews of Power, p. 34.
- Hill, Century of Revolution, pp. 142, 143.
- Lublinskaya, French Absolutism: The Crucial Phase, Chapter 3.
- Mun, England’s Treasure by Forraign Trade (1628), cited Appleby, Economic Thought and Ideology in Seventeenth Century England, p. 40.
- Brewer, Sinews, p. 169.
- Brewer, Sinews, p. 168.
- Hinton, “Mercantile System in the Time of Thomas Mun”, p. 281.
- Hill, Reformation, p. 160.
- Cited Cole, French Mercantilism, p. 238.
- Israel, Dutch Primacy, p. 340.
- Brewer, Sinews, p. 119.
- Brewer, Sinews, p. 169.
- Gerschenkron, Europe in the Russian Mirror, pp. 79–80.
- Hilferding, “Das historische Problem”, Zeitschrift für Politik, 1 (1954), pp. 295–324, at 296.
- Hilferding, “Das historische Problem”, p. 296.
- Hilferding, “Das historische Problem”, p. 316.
- Sartre, Critique of Dialectical Reason, vol.1, p. 638.
- Sartre, Critique of Dialectical Reason, vol.1, p. 639.
- Sartre, Critique of Dialectical Reason, vol.1, p. 640.
- Wallerstein, Modern World System, p. 139.
- Especially Filtzer, Soviet Workers and Stalinist Industrialization (1986); Filtzer, The Hazards of Urban Life in Late Stalinist Russia (2010).
- Scott, Beyond the Urals, p. 61.
- Scott, Beyond the Urals, p. 54.
- Brinton, The Bolsheviks and Workers’ Control.
Primitive Accumulation and the State-Form: National Debt as an Apparatus of Capture
Gavin Walker
October 29, 2014
The moment has come to expose capital to the absence of reason, for which capital provides the fullest development: and this moment comes from capital itself, but it is no longer a moment of a “crisis” that can be solved in the course of the process. It is a different kind of moment to which we must give thought.
– J-L. Nancy 1
Commencement and Crisis 2
In a brief moment of his theoretical work, the great Japanese Marxist critic Tosaka Jun deployed a decisive and crucial phrase, a phrase that I believe concentrates within it the historical conjuncture we have been experiencing on a world-scale in the recent years of crisis: he calls this ultimate crystallization of politics “the facts of the streets” or “the facts on the streets” (gaitō no jijitsu). 3 I would like to excessively develop or overwrite – in other words translate – this phrase into a concept in the strong sense, to raise this seemingly marginal choice of words to the level of a principle, and to utilize this principle itself as a lever through which to force into existence a certain theoretical sequence. What Tosaka essentially reminds us of is the literal factuality (or more specifically, in Alain Badiou’s terms, the “veridicity”) of the streets, the “fact” that the streets themselves express the dense sociality that capital’s tendency towards the socialization of labor must necessarily-inevitably produce. In other words, what we have seen in the political energies that have been widely unleashed around the globe in the last year, is that the streets themselves recurrently-continuously testify or bear witness to their own “facts.” These “facts” are precisely the verso or underside of capital’s mapping on a world-scale. Or, to put it in another way, a way that I would like to develop here, “the facts of the streets” is the center of the volatile “absence of reason” or (im)possibility that is always “passing through” in between two polarities of theory that I will call capital’s logical topology and its historical cartography.
The logical topology of capital’s inside is always paradoxically searching for a way to trace out and mirror itself in the historical cartography, always attempting to make itself a world. Since the beginning of the capitalist mode of production, the primary lever through which to force the capture of labor has always been the form of the state amalgamated together with the form of the nation, sutured together in the process of primitive accumulation. Using this building-block, capital tries incessantly-recurrently to translate its logical structure into the territoriality of the earth, to inscribe itself into the actual surface of the world. For this task, an entire sequence of “mechanisms” or “apparatuses” are necessary. But today, the “facts of the streets” are showing us more and more that, as capital’s logical topology oscillates itself into new, hazardous and volatile concentrations of its unstable core, these mechanisms, that for so long had guaranteed or legitimated capital’s forcing of the historical process, are themselves descending-ascending into delirium. The delirious and demented logic of capital today confronts the dignity and refusal that lines the streets. Engels, in his stark and forceful style, reminds us of what is essentially at stake:
The relation of the manufacturer to the worker has nothing human in it; it is purely economic. The manufacturer is ‘Capital,’ the worker is “Labour.” And if the worker will not be forced into this abstraction, if he insists that he is not “Labour,” but a man, who possesses, among other things, the attribute of labour-power, if he takes it into his head that he need not allow himself to be bought and sold in the market as the commodity “Labour,” the bourgeois reason comes to a standstill. 4
When the streets erupt against this commodification, and the bourgeois reason is halted, capital must modify its equilibrium, it must determine how this “absence of reason” can be “passed through,” because capital cannot solve the crisis, but merely traverse it without resolving it. But how does this seemingly improbable or excessive (il)logic operate? Here we must literally “go back to the beginning.”
The Erasure of Violence by Means of Violence
Today, the crisis is not simply reducible to the financial crisis, nor can it be said to be a purely political crisis of legitimation of the state apparatus. Rather, the crisis today is one centered on the violent-volatile amalgam between capital’s limits and the limits of the state-form, particularly, the limits of the mechanisms that have allowed this amalgam to primarily organize social relations since the advent of capitalism itself. In order to think the ways in which our moment, and the moment of the advent of industrial capital converge, we have to think the question of the beginning, the origin. This is also a question of crisis as such, of the theory of crisis. Today, there is a constant tendency to see this crisis as an exception, as a permanent state of exception, as a making-permanent of something contingent, and so forth. But this in turn obscures the systematic and cyclical nature of crisis, which occurs only insofar as the systematic order in which it is placed is itself in question. Crisis, it must be said, cannot be simply and easily summed up in its typical underconsumptionist reading and its political consequences. If underconsumption is the motor-force of crisis, it would appear merely as a contingent question of national policy. But the specific nature of capitalist crisis can never be explained on such a basis, precisely because the underconsumptionist explanation treats every crisis as a surprise. But nothing about this crisis is surprising – or rather, if there is a surprising element in our current situation, it is the rebirth of the politicality of the “facts of the streets” that capital has suicidally let loose. Crisis is always a repetition, but a cyclical motion in which difference emerges within this repetition. That is, every time the circle has to be traced back to its starting point or commencement, the tracing itself always exhibits microscopic divergences. These divergences themselves, because they are exposed to the figurative or creative dimension of repetition, always contain within them the possibility for another arrangement: “From time to time the conflict of antagonistic agencies finds vent in crises. The crises are always but momentary and forcible solutions of the existing contradictions. They are violent eruptions which for a time restore the disturbed equilibrium.” 5 But the “disturbed equilibrium” is not itself a state of harmony and peace. Rather, the disturbed equilibrium is an undertaking of “violent eruptions” that have been covered over in new forms, and made to violently erase their own violence. But where does this violence emerge from?
As is well-known, the problem of the “so-called primitive accumulation,” centered in the 24th chapter of the first volume of Capital, originates from Marx’s recognition of the fact that his own analysis of the logical structure of capital requires an endlessly regressing series of presuppositions: the movement of accumulation presupposes the existence of surplus value, surplus value presupposes that capitalist production is already established, the existence of capitalist production presupposes a stock of capital sufficient for the cycle to begin, and so on. Thus he argues, the whole movement requires that we assume what Adam Smith called the “previous accumulation,” a period of accumulation which precedes capitalism’s established functioning, and from which it itself begins to move. But primitive accumulation does not mean a smooth transition that establishes the “good society,” nor the moment when mankind falls from an idyllic state. Rather, it is an irruption of violence, an instant in which what was previously untethered, undefined, and unbound is violently concatenated into a sequence that furnishes the basic material conditions for capitalist production. Thus, in this moment, it is “notorious that conquest, enslavement, robbery, murder, briefly, force, play the great part.” 6 It is not simply that the peasantry is “freed” to become the wage-labor required for the formation and rotation of the circuit of capitalist accumulation, it is also at the same time the inverse: this process also indicates the closure of heterogeneity in order to produce equivalences which can then “encounter” each other: the owner of capital and the owner of labor power.
In this sense, the process of primitive accumulation (which is not a period, but a cyclically reproduced logical moment) describes the installation of “real abstraction” into history, and the fact that this moment is repeating everyday shows us the paradoxical nature of the historical temporality that characterizes capitalist society. More than anything however, we are immediately made aware of the violence of the production of the conditions of possibility for capitalist relations of production, for the “encounter” between buyers and sellers of labor power. Here we are reminded that “there is a primitive accumulation that, far from deriving from the agricultural mode of production, precedes it: as a general rule, there is primitive accumulation whenever an apparatus of capture is mounted, with that very particular kind of violence that creates or contributes to the creation of that which it is directed against, and thus presupposes itself.” 7 As Marx incisively pointed out, in capitalist society, which is never at rest, but rather a circuit in constant motion, we must recognize that the “original sin is at work everywhere” (die Erbsünde wirkt überall). 8
There is a long debate on the translation of die sogennante ursprungliche Akkumulation as the so-called primitive accumulation. But I would like to give this debate an added dimension: what we must consider today is how the originary accumulation is incorporated into capitalist development as primitive accumulation, as a repetition of the origin that is also concerned with the division or “separation” (Trennung) of historical time between the “primitive” or “backwards” and the “on time” or “normal” course of development. The trick of primitive accumulation is to work on these two dimensions at once, as part of the same social motion, to divide the earth on the basis of “forms” in the same way as the abstraction of the exchange process is divided between “two sides.” In other words, this moment of the beginning, which is cyclically-recursively repeated within the sphere of crisis (and in every capture of the worker’s body to secure the grounds for the labor-power commodity), is repeated in relation to a volatile historical exterior, repeated in terms of the form-determination of the “nation-form” (Balibar) and the “historical and moral factors” for the determination of the value and price of labor power, the “naïve anthropology” (Althusser) that lurks in the interior of capital’s logic. Capital’s schema of the world divided up into “national capitals” is itself profoundly linked to the historical formation of so-called “homo economicus,” in the form of the two figures of exchange, buyers and sellers. In other words, the figure of “Man” – as Deleuze and Guattari importantly point out, this figure of humanism is not simply “white man” (l’homme blanc) but rather “White Man” (L’Homme blanc) – is not an “exteriority” or “cultural supplement” to the economic field: it is rather the presupposition always-already at the very core of the circulation process.
The image of the world that capital presents to itself, by presupposing a certain accomplished history, also presupposes the production of the individuals that would furnish the “needs” upon which “rational” exchange would emerge. But the very production of these individuals itself presupposes the unitary and eternal area, or gradient which could legitimate those individuals as individuals by means of the form of belonging, typically to the nation-state. Thus, the whole circuit constitutes a “vicious circle,” one which never adequately returns to its starting point, because the whole sequence of presupposition forms an abyssal and regressive chain, in which something must always be given: “the homogeneous given space of economic phenomena is thus doubly given by the anthropology which grips it in the vice of origins and ends.” 9 The field of “interest,” which is supposed to represent therefore the pure or immediate expression of “need,” separated from any extra-economic coercion, direct violence, and so forth, reveals itself as the ultimate expression of this “vice of origins and ends,” insofar as it must always erase or cover over the production of this figure of “Man” itself. When Marx discusses the figures of the “guardians,” the “bearers” or “owners” of the labor power commodity, he refers to them specifically as “this race of peculiar commodity-owners” (diese Race eigentümlicher Warenbesitzer), 10 effectively reminding us that “the schema of the West and the Rest” is co-extensive and co-emergent with the dynamics of capital itself.
In other words, the “naïve anthropology” that is supposedly excluded from the circulation process or the “total material exchange” between “rational” individuals, is in fact located at its very core. Exactly as Deleuze and Guattari point out in their identification of the nation-state as the ultimate model of the capitalist axiomatic, the form of “the nation” is already contained at the very origin of the supposedly “rational” and “universal” process of exchange, a process that acts as if it represents the smooth and perfect circle of pure rationality, but that is permanently suspended between its impossible origin, which it is compelled to cyclically repeat, and its end, which is equally impossible, because it would relativize the circuit of exchange, and expose it to its outside, which it must constantly erase. Thus the social body or socius itself must remain in its state of insanity or “derangement” forever pulled in two directions of the production of subjects. It cannot exit this “deranged form,” but must try perpetually to prove its “universality” simply by oscillating between these two boundaries, two impossibilities: its underlying schema of the world, which “seems absent from the immediate reality of the pheonoma themselves” because it is permanently located in “the interval between origins and ends,” a short-circuit that incessantly reveals to us that “its universality is merely repetition.” 11 The paradox of logic and history in the apparatus of capture thus is contained in the following problem: “the mechanism of capture contributes from the outset to the constitution of the aggregate upon which the capture is effectuated” (le mécanisme de capture fait déjà partie de la constitution de l’ensemble sur lequel la capture s’effectue). 12 This paradox, however, is “no mystery at all” (pas du tout de mystère), precisely because it is a mechanism or schema that exists out in the open, on the surface of society. The historical accident, the moment of capture for which there was no apparent necessity or pulsion, produces a form of torsion back upon itself. Once capture has been effected, it loops back onto its own contingent origins to once again derive itself, to anticipate and “conjure” itself up as if it were the necessary outcome of its own schema. In other words, the forms of capture, enclosure, and ordering are not simply distinguished by their appearance as always-already prior; more fundamentally, they are distinguished by this paradoxical and demented structure in which the contingent historical event cycles back to itself, once again “discovering” its own hazardous origins, but does so precisely to “recode” its emergence so as to appear as if what ought to be an accident was always in fact a necessary outcome. Thus, the historical accident of primitive accumulation is constantly “becoming what it is” neither through its contingent foundations nor its inner drive to pretend it is necessary; this schema operates precisely by cyclically repeating its origin in capture in order to harness its hazardous flux retrospectively, to conjure itself up as if its origin were a mere testament to its necessary emergence.
In this system of the violence of inclusion, the violence of the schema itself “hides in plain view,” it operates immediately before our eyes, yet “it is very difficult to pinpoint this violence because it always presents itself as preaccomplished.” 13 The seeming double-bind contained in the violence of the apparatus of capture might appear to disable any conception of political intervention, to be a closed circle, but we could also say precisely the opposite. In the process of primitive accumulation, “the concept of ‘determined social formation’ has become the concept of ‘class composition’: it restores, in other words, the dynamism of the subject’s action, of the will that structures or destroys the relations of necessity.” 14 In other words, paradoxically it is the fact that our forclosure into the social field has taken place that opens the possibilities of politics. We have always-already been included into this systematic expression of capture, but this inescapability of the repetition of the beginning does not mean something disabling.
Capital, as the fundamental concretization of social relations, and therefore as the apex of the social relation’s violent verso, cannot rid itself of this fundamental “condition of violence” (Gewaltverhältnis), 15 located in its logical alpha and omega, the labor power commodity, whose “indirect” production is located paradoxically outside commodity relations. An excess of violence is haunting capital’s interior by means of this constantly liminalizing/volatilizing forcible “production” of labor power. Precisely by this excessive violence, capital endangers itself and opens itself up to a whole continent of raw violence, and it is exactly this point that shows us something important in terms of the question of how capital utilizes the “anthropological difference” to effect the “indirect” production of labor power. The primal violence, sustained as a continuum or “status quo,” appears as a smooth state, a cyclical reproduction cycle without edges. But this appearance or semblance of smooth continuity is in fact a product of the working of violence upon itself: the violence of the historical cartography must erase and recode itself by means of violence as the smooth functioning of the logical topology. In other words, when we encounter the basic social scenario of capitalist society, the exchange of a product for money, we are already in a situation in which the raw violence of subjectivation, whereby some absent potentiality within the worker’s body is exchanged as if it is a substance called labor power which can be commodified, is covered over by the form of money, which appears as a smooth container of significations that can serve as a measure of this potentiality. But in order for labor power to be measured and exchanged as money, there must be a repeated doubling of violence. What must remain on the outside of capital as a social relation is paradoxically what must also be simultaneously forced into its inside, perpetually torn between the forms of subjectivation that produce labor power as an inside, and the historical field of reproduction in which the worker’s body is produced on the violent outside of capital.
The National Debt as a Conduit
Every time capital requires the commodification of labor power, it must in effect repeat at the level of the logical topology the process of the transition, the “so-called primitive accumulation.” But the historical process simultaneously forces capital to undertake the transition at a microscopic level, in the form of the shrinking commodity-unit, and therefore in an even more paradoxical form than the historical “beginning.” That is, capital must capitalistically undertake a microscopic version of the transition to capitalism. At the “beginning” capital could rely on direct force, on a structural violence that would enable or set in motion a field of effects that would generate a general order of capture. But how can the transition be undertaken over and over again, in particular after the historical transition is assumed to have already occurred? Marx gave us an essential clue when he reminded us that the so-called primitive accumulation in effect reappears or takes up a second logical position in capital’s interior, in the form of the national debt.
The original sin at the beginning of the capital-relation might as well be understood as an “original debt,” an historical appearance of something given, a gift. The process of primitive accumulation and its historical acts of enclosure cannot simply be understood as an excessive violence that is then superceded by a more “rational” or “decent” and “restrained” order. Rather, what the process of primitive accumulation reminds us of, is the necessity for capital of the given, the form of “supposition” (Setzung) and “presupposition” (Voraussetzung). But how does this originary debt-gift operate? In what sense is this a problem of actuality for us? In this sense, what exactly is the national debt itself?
The national debt is a mechanism. A very special type of mechanism, and one that capital relies on intimately. Uno Kozo gave us a critical clue to this type of mechanism as follows:
Through the law of population, capitalism comes into possession of mechanisms or apparatuses which allow the (im)possibility of the commodification of labor power to pass through (‘muri’ o tôsu kikô). This is precisely the point on which capitalism historically forms itself into a determinate form of society, and further, is what makes it independent in pure-economic terms. Like land, this is a so-called given for capitalism, one that is given from its exterior, but unlike land it can be reproduced, and by means of this reproduction becomes capable of responding to the demands of capital put forward through the specific phenomenon of capitalism called crisis. 16
Uno locates this mechanism in the form of the “law of population peculiar to the capitalist mode of production” (der kapitalistischen Produktionsweise eigentümliches Populationsgesetz), 17 a law that is central to the questions of crisis and debt, because it concerns above all the management of personhood, the management of the physical-moral aspects of the material existence of the body, so as to maintain the “rational individual,” the form which would furnish adequate labor power for capitalist production. But this structure of such an apparatus is not limited to the form of population; rather the “law of population” is one moment of the overall taxonomy of these mechanisms for the traversal of the nihil of reason that capitalism necessitates from the outset. If at the beginning, there is a debt or gift, capital cannot ever truly “begin.” That is, it is impossible to “start from the first instance” if the first instance is always-already delayed or deferred by means of something that must be there already. In other words, if capital can only expand on the basis of its originary debt/gift, then capital is permanently or eternally crippled and restrained by the nature of this given element, it can never extract itself from what is given in order to fully realize its image of a circle with neither end nor beginning. In order therefore, to overcome or at least avoid this problem, capital must formulate all sorts of these “apparatuses for the traversal of (im)possibility.” That is, capital must discover ways in which something that should restrain or even expose its limitations can be traversed or passed through. But precisely in constantly requiring mechanisms or apparatuses outside its interior logic, capital demonstrates its relatively volatile functioning, in which precisely its excessive aspects (the reliance on the state, the enforcement of the nation-form, the violence of the exterior allowed into the interior and once more erased as violence by means of violence), its paradoxical and even “demented” aspects, appear as the central principles of its operation. When we confront this “demented” or “deranged” aspect of capital, we are also immediately alerted to the fact that this aspect of capital is also where an immense political breach exists, and it is on this point that we must clarify the current scenario of debt.
Marx recalls this problem for us at an early historical moment, reminding us that the system of national debt was generated in the “forcing-house” (Treibhaus) of the colonial system: thus “National debts, i.e., the alienation of the state (Veräusserung des Staats) – whether despotic, constitutional or republican – marked with its stamp the capitalistic era.” 18 In this sense, already we are acquainted with the national debt as the “mark” or “stamp” (Stempel) of the entry into capitalist society on a world-scale, as the initial moment in which the originary accumulation of capital is at one and the same time the formation of the mechanisms that will install a cartography onto the surface of the world.
The only part of the so-called national wealth that actually enters into the collective possessions (Gesamtbesitz) of modern peoples is their national debt. Hence, as a necessary consequence, the modern doctrine that a nation becomes the richer the more deeply it is in debt. Public credit becomes the credo of capital. And with the rise of national debt-making, want of faith in the national debt takes the place of the blasphemy against the Holy Ghost, which may not be forgiven. The public debt becomes one of the most powerful levers (energischsten Hebel) of primitive accumulation. As with the stroke of an enchanter’s wand, it endows barren money with the power of breeding and thus turns it into capital, without the necessity of its exposing itself to the troubles and risks inseparable from its employment in industry or even in usury. 19
The logical topology of capital’s origin and maintenance, and the historical cartography of the modern world order, based on the unit of the state, are volatilely amalgamated together in the form of the national debt. But Marx also alerts us to something critically important: here the national debt is not so much a separate motion of violence, but rather one of the most “powerful” or “energetic” “levers” for the continuation or maintenance of primitive accumulation. But why would capital need yet another exteriority? Primitive accumulation itself, its raw violence, its “extra-economic coercion,” is already to an extent exterior to capital. Yet what capital always requires are ways and means of taking the raw violence on which it secretly rests and reinserting this violence into a new modality, in which its violence can appear in another form. This is exactly why the national debt, as a mechanism, allows capital to avoid “exposing itself to troubles and risks.” Marx goes one step further, by connecting the national debt as primitive accumulation to the nation-form itself:
With the national debt arose an international credit system, which often conceals one of the sources (Quellen) of primitive accumulation in this or that people (Volk). […] A great deal of capital, which appears today in the United States without any certificate of birth, was yesterday, in England, the capitalised blood of children. 20
In other words, capital’s enclosure of the earth appears both within and by means of national borders – by extension, Marx essentially reminds us here that the nation-form itself allows for the concealing within an organized and bordered system of entities, of capital’s originary-primitive violence, and yet erases this violence precisely by allowing it to vanish into the nation as an apparatus for the traversal of this gap, “vanishing in its own result, leaving no trace behind.” But this theoretical and historical problem is by no means simply an interesting episode from the past.
Let us recall here a peculiar historical moment characteristic of our current conjuncture. In the German “gutter press” (Bild and the like) in 2010-2011, an entire series of discussions of the Greek national debt (and by extension the ongoing Eurozone crisis) took place. The essence of the national debt was finally blamed on the Greek “national character” (supposedly “lazy,” excessively enjoying holidays, corrupt, incapable of “rational competition,” and so forth). 21 This moment of the German-Greek opposition on the question of the national debt exposes to us the recent history of this mechanism. The era of imperialism in the strict sense consisted in the formation of “debt traps” for the peripheral and underdeveloped countries: the central imperialist nations export the domestic surplus to the colonies, the periphery, and so forth, by creating and enforcing demand, maintained by the national debt. Thus the poorer nations end up not only importing from the imperialist nations but also effectively in an endless spiral of debt, a mechanism that then forces the periphery to accept the political and economic directives of the imperialist nations for the plunder and expropriation of raw materials, cheap labor power, border controls, subordination to political regimes, and so forth. Today, this same logic persists. If the old modality of imperialism consists in the macroscopic formation of monopoly capital and super-profits in the peripheral violence, the new modality of imperialism financializes this violence into the miniature and dense concentration of capital’s interior. It is no accident that today we see a “return of the origin,” “a moment when wage constriction is violently manifested, exactly like the 16th century enclosures where access to land as a common good was repressed with the privatization of the land and the putting of wages to the proletariat.” 22 This is why we should overlap capital’s historical threshold with the moment we are living through today:
The logic of ‘governing through debt’ has its origin in the fundamental relation between capital and labor. Financial capitalism has globalized imperialism, its modus operandi that operates through the form of ‘debt traps’, both national and private indebtedness, in order to realize and sell the surplus value extracted from living labor. In the imperial schema, debt is the monetary face of surplus value, the universal exploitation of labor power, and constitutes a trap precisely because it prevents living labor from freeing itself from exploitation, from autonomizing the relations of dependency and slavery that are proper to debt. 23
The national debt allows the “reckless terrorism” of primitive accumulation to be maintained as if it were absent by redirecting it to the market. The national debt is a mechanism that “conducts” or forces the situation onto a new site of the curve of capitalist development, but it is not a mechanism that “resolves,” it is a mechanism that “defers” or “displaces” the sharpening of political struggles. The national debt therefore is precisely the “dangerous supplement” of capitalism as a historical force: the national debt exposes the fact that capital itself can never resolve the situation that emerges when the relations of production come into conflict with the development of the productive forces. Capital is always trying to create mechanisms that allow it to transcend its own limitations, while simultaneously permitting it to avoid making the political leap past its own boundaries. Yet, this inevitable limit of capital’s self-deployment is paradoxically the source of capital’s own dynamism. Without this tense multiplication of its wounds, capital would never develop – that is, capital requires a certain risk or recklessness, but the more it defers this leap, the more spaces of political intervention are opened up in capital’s austere movement. This movement keeps the elements of primitive accumulation circulating on the surface, a mechanism by which to traverse the impossibility of the commencement as such, precisely by beginning the commencement over and over again. In turn, this element of the national debt returns our focus to the role played by the nation-state in allowing this “first return to origins” – the element of the national is exactly deployed in and within the movement of capture in order to guarantee labor power’s “elasticity” (Elastizität). 24 Without the nation, the malleable elements of labor power cannot be recirculated as if they were directly graspable, by means of the reproduction of the worker’s body on the outside. The nation – the original fictitious “substance” – conjures up its own little images of its pseudo-substantiality precisely in order to then “re-derive” itself from their existence. In this way the elasticity of labor power is simply the microscopic or “micrological” extension of the elasticity of the nation, the form by which capital attempts incessantly to territorializes itself. Labor power’s impossibility is a microscopic image of the gap or chiasmus between the logical and the historical: the historical origin and the logical commencement, and this is the point on which “the insanity of the capitalist mode of conception (die Verrücktheit der kapitalistischen Vorstellungsweise) reaches its climax.” 25
Facing the crisis today, the form of the national debt alerts us to a crucial fact: “The crisis is neither an economic nor a political crisis: it is a crisis of the capital relation, a crisis made inevitable by the inherent contradictions of that relation. The crisis inevitably involves a restructuring of the capital relation, a restructuring which necessarily takes on economic and political forms. What is involved on both levels is an assault by capital to maintain the conditions of its own existence.” 26 In this sense, the problem of the national debt as a mechanism for the continuation of primitive accumulation within the capital-relation, cannot be solved on the level of the nation-form – we might say polemically that the national debt is in fact the origin of the nation itself. It itself is a technology of drawing a border around the form of the nation, something that cannot be rigorously bordered. The nation itself is a form of credit: it must be traced as if it could be located. But it must be traced by capital itself. Because the nation cannot be bordered in any strict sense, it forces a coherence economically where there cannot be one historically. But because this technology continuously exposes it to the historical exterior, it is therefore always being undermined by its own inability to escape the historical process. At the origin there is already a debt, because something has been presupposed as given, something that utilizes this presupposition as a lever for its own functioning. The illogical logic of capital’s origin or beginning is recoded as the illogical history of the state. This “intercourse” between capital and the state is concentrated or compressed into the insanity of the supposedly rational exchange process, this “Verkehr” at the beginning which appears precisely as “Austausch” in the logical interior. This is exactly what Lenin meant when he famously emphasized that “politics is the concentrated expression of economy.” 27
The Facts on the Streets
Today, it behooves us to state the matter clearly and without pretense: capital can only “overcome” its own crises by passing through them without resolving them. And it can only undertake this traversal or passing by placing the burden of violence, suffering, and immiseration onto the backs of the world – the world working class – the facies totius universi, or “face of the entire universe.” Capital itself formulates these apparatuses – the state, the national debt – to overcome or traverse what it cannot solve. Our task lies in the relentless and unending exposure of its raw violence, covered over and hidden by the form of finance. Labor power is an internal outside to capital manifested in its pure outside, the worker’s body. But the body is under the control of the state. Thus, when contemporary global police power is employed against the concrete bodies of the young, the unemployed, the old, the sick, the dropouts, those who are torn between an inability to function in the expected style as the “self-conscious instruments of production” for capital, or to be smoothly integrated into the state’s order, we are witnessing the raw and violent historical exterior’s incapacity to “reset” or “restart” the cyclical return of the origin. In thinking through the contemporary “facts of the streets,” let us pay close attention to a famous passage from Marx:
The specific economic form (Form), in which unpaid surplus labour is pumped out of direct producers, determines the relationship of rulers and ruled (Herrschafts- und Knechtschaftsverhältnis), as it grows directly out of production itself and in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form (Gestalt). It is always the direct relationship of the owners of the conditions of production to the direct producers – a relation always naturally corresponding to a definite stage in the development of the methods of labour and thereby its social productivity – which reveals the innermost secret (innere Geheimnis), the hidden basis of the entire social structure (verborgene Grundlage der ganzen gesellschaftlichen Konstruktion), and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state. This does not prevent the same economic basis – the same from the standpoint of its main conditions – due to innumerable different empirical circumstances, natural environment, racial relations, external historical influences, etc., from showing infinite variations and gradations in appearance, which can be ascertained only by analysis of the empirically given circumstances (empirisch gegebenen Umstände). 28
These “empirically given circumstances” furnish us with capital’s “factual” limits, limits that are being tested today by a new generation of political upheavals. The tenuous and searching existence of the upsurge in the “facts of the streets” today, under the aspect of the mutations of the state, returns us to the commencement. Not only the commencement of capital, in which the violence of capture must masquerade as the smooth operation of the interior, but also the (re)commencement of politics. This would not seek to produce a “stable” and therefore easily-assumed subject of our moment. Rather, it would assume that, as the “guardians” of labor power, the “bearers” of this fragile and ambiguous commodity, we are incapable of fully “being,” but only a sort of “para-being.” The aleatory or contingent dimension which always enters into the element of “composition” in class struggle is profoundly manifest today. But this aleatory undercurrent is not something that undermines or that holds us back from politics:
“Let us para-be,” that is our war cry.
And better yet: “We are nothing, let us para-be the Whole.” 29
The International today, that is “springing out of the ground of modern society” 30 is not the old fantasy of the stable subject of the discourse of “civilizational difference,” but rather a fragile hazard that capital itself can no longer effectively police through its external “mechanisms.” This “composition” (in the sense that Negri and others have given to “class composition”) indicates the whole logic by which the mechanisms of capital and the state attempt to effect a specific logic of the social dimension of separation (Trennung), but this “separation” is something profoundly different than the theory of alienation. It shows that where capital has “forced” an amalgam, there is a “slippage” or “décalage.” Where the amalgam seems most perfectly sutured is also where this décalage can be raised as a social antagonism and transformed into a political contradiction. The suicidal nature of the capitalist mode of production is expressed in its need to internalize, to financialize, its violent exterior, to include within its “count” the “uncountable” and savage process of primitive accumulation, recoded as the apparatus of the national debt. The paradox is however that we, the debtors, are transformed into a permanent reserve of debt, yet hold a social power over capital, by occupying the position of the “guardians” (Hütern), the “bearers” (Träger) of labor power, the location of capital’s “original sin,” its primal debt. 31 This is the social antagonism that today we find in the streets: when this antagonism is raised to the level of a political contradiction, the groundwork is prepared for a new opening against capital’s supposed indifference to the world.
In the face of this crisis – this repetition of the original debt in the form of the national debt – we have to be able to say bluntly and openly: capital and the state cannot resolve this crisis. They can only formulate mechanisms to traverse its “absence of reason.” These mechanisms of bourgeois insanity can only operate by transferring the violent spasms of crisis onto the back of the working class, the unemployed, the poor and oppressed strata of the world. Increasingly, these “mechanisms” themselves are also failing to support capital’s leap to a new basis of accumulation. The state can only undertake such a leap through the increasing control of the bodies, the “guardians” and “bearers” of labor power, that clash with its logic, that lie just outside its strict sphere on influence. Historically, the state has utilized “apparatuses for the traversal of the nihil of reason” such as the “nation-form” (Balibar) to suture and cover over this incapacity. But today, the nation-form cannot hold back or restrain the fact that “the conditions for the capitalization of surplus value clash increasingly with the conditions for the renewal of the aggregate capital” 32 on a world-scale. There is no option today except to emphasize that our only hope lies in precisely these “facts of the streets” that cannot be fully erased from capital’s image of the world. But rather than simply conclude with famous assertion from Marx that communism is the “real movement that abolishes the present state of affairs,” a familiar reference that has been recently revived in a number of discussions, 33 we might instead appeal to another moment in The German Ideology that, facing the crisis this time, returns to us today with a vital force:
In history up to the present it is certainly an empirical fact (eine empirische Tatsache) that separate individuals have, with the broadening of their activity (Tätigkeit) into world-historical activity, become more and more enslaved under a power alien to them, a power which has become more and more enormous and, in the last instance, turns out to be the world market (in letzter Instanz als Weltmarkt ausweist). But it is just as empirically established that, by the overthrow of the existing state of society by the communist revolution and the abolition of private property which is identical with it, this power will be dissolved. […] Only then will the separate individuals be liberated from the various national and local barriers (nationalen und lokalen Schranken), be brought into practical connection with the material and intellectual production of the whole world and be put in a position to acquire the capacity to enjoy (Genußfähigkeit) this all-sided production of the whole earth (the creations of man). 34
This “empirische Tatsache” of the world of capital, linked above to the “empirically given circumstances” within which capital attempts to make its most “fatal leap” between the logical topology and the historical cartography, lays the groundwork of “facticity” or “factuality” in the historical world, the “given” that is implied in this “empirische.” In turn, this “Tatsache” re-emerges paradoxically as the original revolutionary weapon of the people in the form of the “facts of the streets.” These “facts of the streets” that Tosaka alerted us to are at work today in the streets of the historical world, where the demand for a reinvention of socialism – of modes of life beyond the stranglehold of austerity, debt servitude, and an image of social relations found in the “world market” – responds to the original residue or remainder, the “empirical fact” of the originary debt at capital’s origin, which we carry within ourselves, and which can open a new era of affirmative politics and critical thought.
The State and Accumulation Under Contemporary Capitalism
Paramjit Singh et.al (2019)
Since the 1970s, the capitalist world system has undergone fundamental transformations in both its structure and institutional framework. This paper is an attempt to study the interrelation between changes in the process of capitalist accumulation and the political structure that supports it. Historically, capitalism develops institutions and ideologies that justify surplus extraction and capital accumulation. In the last decades of the twentieth century, the financialization of capitalism initiated a new era of accumulation which is known in academic contexts as finance-capital-driven neoliberalism.(2) This new ideology results from the dominant form of international capital having shifted its center of gravity from industrial capital to finance capital. A new institutional framework accompanies that change. The state, which once protected the interests of industrial capital, is now irretrievably diminished. In its place a new kind of state has emerged based on the neoliberal ideology now dominating the world’s major economies. That ideology’s common agenda consists in the deregulating national economies, liberalizing trade practices, creating a single global market, and facilitating the free movement of commodities and capital beyond national boundaries.
Neoliberal ideology adduces that human well-being can be advanced by liberating individuals’ entrepreneurial freedom and skill within a specific economic structure and institutional framework. Two famous intellectuals, Friedrich Hayek and Milton Freidman (along with their followers) formulated the neoliberal credo, which was later put in practice by Ronald Reagan in the United States and Margaret Thatcher in England.(3) Rhetoric aside, neoliberalism’s real raison d’etre is to accelerate accumulation in the face of the increased power of the working class and the rise of the socialist bloc during 1950s. Thomas Piketty refers to the era of Thatcher and Reagan as a conservative revolution. His data shows that, since the 1970s, state-initiated neoliberal policies have accelerated the process of capital accumulation.(4)
Neoliberalism is international finance capital’s current agenda. It was initially implemented in the developed countries using state power together with an institutional network that subsequently extended to the developing economies of Asia and Africa. International institutions such as the World Trade Organization (WTO), the World Bank (IBRD), and the International Monetary Fund (IMF) played an important role in getting developing countries to adopt the neoliberal agenda. Recent experience shows that neoliberal ideology not only dominates Third World nations’ economic and political spheres; it also molds their cultural and social affairs according to the needs of international finance capital. Today’s neoliberal “club” is comprised of global power elites; managers and executives of big corporations; corporate lobbies; celebrities and top entertainers; a subset of intellectuals; and, importantly, state bureaucrats and politicians. A constant in neoliberalism is that the state openly works as an agent of international finance capital, justifying both the exploitation of the masses and of natural resources and public goods in the name of efficiency, freedom, democracy, and economic growth. The explanation offered is that socio-economic inequality and intense exploitation of both the human being and nature are necessary for economic growth. The collusion of state officials and capitalists in our time, implies that an analysis of contemporary capitalism is incomplete without simultaneously examining the state’s role in shaping it.
The following is an attempt to scrutinize the evolution of the state, the most important institution of capitalism, which emerged together with the social classes and always organizes economic and social affairs according to the needs of the dominant class. The first part of the paper summarizes Marx’s thought on the state, at the center of which is his critique of the state’s apparent universality to reveal its real class character. The second part looks at how the state functions in the capitalist mode of production, emphasizing its class character and its role in production, exchange, distribution and accumulation. The last part analyzes how the capitalist state’s role changes over time to stabilize and accelerate capital accumulation.
I
Marx intended to write a special treatise on the state but was never able to even initiate the work. Nevertheless, Marx’s views on the state are found scattered throughout his oeuvre. An early article, “On the Theft of Wood (1842),” constitutes his first attempt to present the class character of state power, showing how it represents particular interests. Nevertheless, in the Marxian tradition “The Critique of Hegel’s Philosophy of State (1843)” is generally taken to be his first important reflection on the state. Marx’s critique of Hegel in that text aims specifically at his philosophical idealism and proceeds on two levels. First, Marx questions the philosophical form of Hegel’s work. Second, he makes a detailed textual analysis of Hegel’s argument in order to highlight the problematic relation of Hegel’s philosophy to real concrete phenomena. Marx shows how Hegel inverts the real situation by deriving empirical institutions–such as the state, civil society, and the family–from the absolute idea.
Marx’s starting point is Hegel’s claim that “concrete freedom” consists in the identity of the system of particular interest (the family and civil society) with the system of general interest (the state). Hegel presents the state as an external necessity, standing above and opposed to the family and civil society. The state as an external necessity means that, in the event of a conflict, the laws and interests of the family and civil society must yield to those of the state. Marx points out how, in Hegel’s philosophy, the family and civil society are subordinated to the state. In Hegel’s philosophy, the “idea” becomes the subject, and real subjects–such as civil society, the family, existing circumstances–are all transformed into the idea’s unreal, objective “moments.”(5) Marx writes that the crux of the state-society relationship is that “Hegel everywhere makes the idea into the subject, while the genuine, real subject is turned into the predicate.” The real development and movement of society, however, “proceeds at all times on the side of the predicate,” i.e. civil society and the family.(6)
Marx’s critical examination of Hegel’s philosophy of state leads him to conclude that the state is a product of society’s development and movement and as a result cannot represent the universal interest. The state always acts in accordance with the interest of a particular class. Although Hegel alleges that the state is universal, it actually functions as the protector and promoter of private property. Its bureaucrats exploit and oppress civil society for the interest of a particular group, with the state itself tending to become the bureaucracy’s private property in its struggle for self-advancement. In summary, Marx not only rejected the idea of a universal state able to rise above the conflicts of civil society, he also showed it to be a class instrument protecting the dominant class’s interests. In Bob Jessop’s words, “the earliest theoretical work of Marx treats the state as an irrational abstract system of political domination that denies the social nature of man and alienates him from genuine involvement in public life.”(7)
Hegel deserves credit for differentiating state and civil society, but it was Marx who correctly established the relationship between the two spheres by rejecting the universality of the state and explaining it as a product of civil society’s conflicts. V. I. Lenin follows Marx in arguing that the state is a product of irreconcilable class conflicts. For him, the state arises where, when and insofar as class antagonisms cannot be objectively reconciled. Conversely, the existence of the state proves that class antagonisms have become irreconcilable. The state only exists when there are class antagonisms and class struggle. In that sense, the state can be said to be an organ for class reconciliation.(8)
After attaining a general understanding of the state-society relationship, Marx turned to the historical evolution of the state and its role in socio-economic development. Marx’s preface to A Contribution to the Critique of Political Economy (1859) emphasizes the state’s position in the mode of production. That text’s base-superstructure model presents the state as dependent on the economic base, which is the real foundation of society. Marx argues:
In the social production of their existence men inevitably enter into definite relations, which are independent of their will, namely the relations of production, appropriate to a given stage of development of their material forces of production. The totality of these relations constitutes the economic structure, the real foundation, on which arises a legal and political superstructure.(9)
Like culture and religion, the state forms part of the superstructure, which is not independent but rather a product of existing production relations: the relations between the different classes involved in the production process. Because these production relations are antagonistic, the state protects the dominant class’s interest as the owners of the means of production. The base-superstructure model teaches us that analyzing the state under a given socio-economic formation is not possible without considering economic and class relations. This means that an understanding of the economic structure and the existing class structure is a precondition for understanding the state’s character and how it changes over time. However, the base-superstructure model does not deny the importance of ideology. In fact, the state’s role as an instrument of class domination requires the universal acceptance of the ruling class’s ideas. For this reason, the state consistently presents the ruling class’s interests as if they were the common interest. Specific class interests are transformed into an illusionary “general interest” precisely so that the dominant class can successfully universalize its ideas.
The result is that the ruling class’s ideas appear to be universal truths, valid for all time and having an autonomous existence. For example, the notions of freedom, justice, equality, rights and duties are all presented as if they had a meaning independent of any particular class interest. The state apparatus imposes the ruling class’s ideology. That apparatus includes the government and the public administration together with the police and the army, the latter intervening as a supplementary repressive force to be applied in the last instance.(10) The whole state apparatus has an undeniable class character in as much as it organizes the cultural, economic, and social spheres to protect the dominant class’s interests and, above all, its property.
In summary, a materialist or scientific understanding of the state shows that:
- the state is not the product of an abstract, timeless idea, but rather comes into existence to protect the interest of a particular class.
- the state is not a static institution, but continuously evolves, pointing to the need to distinguish between those aspects of its activities which are temporary and transient versus those that are more stable.
- an individual state cannot be understood separately from existing economic relations, but must be studied precisely in the context of economic forces and activities.
The needs of the economy and of the dominant class change over time. Together they determine state forms and state institutions. In society’s overall movement, two forces–the economic and the political–move together to effect the progress of human civilization from one socio-economic formation to another. Throughout this process, economic relations constitute the primary force, though they are themselves organized by political and legal institutions in an organic and dialectical unity. According to Marxian theory, the state is a product of class antagonisms. However, that theory also holds that, once established, the state seems to stand above society, continually alienating itself from its basis in class conflict. Appearances notwithstanding, society’s administration is always a means of preserving the economically dominant class’s interests.
II
Marx’s critique of political economy focuses primarily on the capitalist mode of production. The latter requires accumulation: an individual capitalist aims not only to guarantee his own luxury consumption, but also aims to accumulate more and more capital, as a necessary condition for maintaining his position as a capitalist in society. This process of constant accumulation in turn requires an institutional framework, which is never static. This means that the state, as part of the superstructure and the central capitalist institution, alters its form periodically to facilitate profitability and capital accumulation.
The fundamental difference between pre-capitalist and capitalist social relations is that the economic and political spheres were not yet fully separated in pre-capitalist societies. In these earlier formations, the state openly protected the dominant class’s interests. The owners of the means of production directly controlled the state and justified their exploitation of other classes through the constitution and through law. The state also deployed its repressive apparatus such as the police and the army in direct support of the dominant class’s economic interests. Capitalism changes all of this. The economic and political spheres diverge, gaining an important degree of autonomy, and direct political force is no longer needed to maintain economic relations. Indeed, the relative autonomy of the political sphere from the economic one is what differentiates the capitalist state from pre-capitalist forms.
In capitalism, production for exchange and relations based on exchange value are conditions for sustainable accumulation. The production process depends on relations of exchange between two antagonistic classes: capitalists and workers. The state plays an important role in managing the conflict between these two classes and develops and ideological system to that end based on private property, individuality, equality, freedom, and rights. David Harvey argues that the capitalist state’s field of action includes guaranteeing the rights of private property over the means of production and labor power, enforcing contracts, protecting the mechanisms of accumulation, eliminating the barriers to capital and labor mobility, and stabilizing the money system (via central banking).(11) In this sense, as Marx and Engels point out, the capitalist state “is nothing more than the form of organization which the bourgeois necessarily adopt both for internal and external purpose, for the mutual guarantee of their property and interest.”(12)
The capitalist state also plays a crucial role in distribution. The Marxian theory of distribution has two foci: first, the distribution of the total product between capitalists and workers and, second, the channeling of total surplus value into industrial profit, interest (to finance capital) and rent (to landlords). To manage the relation between capitalists and workers, the state develops and enforces laws in a manner such that class conflict remains in check. For example, it may offer benefits and guarantees to workers that are not in the capitalist class’s immediate economic interest but will maintain its dominance and protect its accumulation in the long run. Similarly, the intellectuals involved in the state apparatus (particularly those concerned with economic policy and research) defend elaborate economic theories justifying capitalist production and distribution as contributing to the common good. As against theories that expose working-class exploitation, they typically favor the Ricardian marginal productivity theory of distribution, in which workers’ wages correspond to their marginal productivity and capitalist “producers” earn only normal profits.
The state’s role varies to the degree that capitalist economies differ in their composition. In labor-scarce economies, operating near full employment equilibrium, the state protects the interest of the capitalist class by capping wages and linking them to productivity. These state-regulated wages check workers’ power and inhibit their capacity to protest. By contrast, in labor-surplus economies, the state and state-sponsored intellectuals work to dismantle labor laws in the name of employment growth and labor market flexibility. In this way, the state not only eases conflictual distribution relations but also justifies its policies as conducive to employment growth.
As indicated above, capitalist distribution relations involve not only the antagonistic relation between labor and capital, but also the repartition of surplus value into the areas of industrial profit, interest, and rent. This latter process is also antagonistic. To the degree that industrialists, landlords, and financial capitalists struggle against each other to secure their respective profits, the homogeneity of the capitalist class breaks down. In these circumstances, the state works to guarantee the long-term interests of the entire capitalist class and arbitrate among the conflicting interests of each class fraction. Importantly, this can only be done by a relatively autonomous state: a state structured so as to transcend the parochial interests of the fractions of the capitalist class.(13)
In the capitalist mode of production, the state’s main objective is to reproduce the economic system, which in turn requires a stable process of capital accumulation. Since the logic of capital is far from harmonious and at times even self-destructive, the state intervenes to prevent the disintegration of the capitalist system, dampening the contradictions produced by the accumulation process. The state’s solutions to problems of continuous and expanded accumulation vary according to the context. This means that there is a third sphere of state activity–beyond arbitrating in production and distribution relations–which is stabilizing capitalist accumulation during downswings in the business cycle. Faced with depressions and recessions, the state responds in various ways, including subsidies to consumption, unemployment allowances, tax concessions, and direct investment to ensure effective demand, all with a view to preserving the dominant class’s project. In this way, the state plays a central role in mitigating the contradictions resulting from class struggle in times of crisis.
Bourgeois democracy is the preferred form that the capitalist state takes on. This is precisely because it excels in managing the contradictions mentioned above. Lenin pointed out that the democratic republic is the best possible political “shell” for capitalism. Once capitalism attains that “shell,” its power becomes so secure as to be impervious to a change in persons, institutions, or parties.(14) A constant of capitalist rule is that, even as the state transforms itself according to the dominant class’s needs, it always projects the illusion of representing the whole society. A number of slogans that circulate in the world today reveal their ideological character in as much as they imply that the state is a neutral, supra-social entity: all who are against the oppressive state are presented as being against society, when in fact they reject only an economically-dominant and politically-oppressive class. By contrast, the task of Marxist scholarship is to reveal the real state-society relation as it unfolds in time. It must explore production relations and the mechanisms of surplus extraction and at the same time carry out a historical analysis of the state’s role in capital accumulation.
III
So far we have only considered the state in abstract, relating it to the general characteristics of the capitalist mode of production. Clearly, analyzing the state as a superstructural form, based on a given mode of production, is perfectly appropriate for the purpose of theoretical work. However, beyond a theoretical analysis, it is important to trace the state’s role in actual, concrete capitalist societies. As Marx points out, the bourgeois state does not function as an automatic reflection of capitalist social relations. Instead, state institutions are concrete historical products that develop along with capitalist societies.(15)
Capitalism became the dominant mode of surplus extraction during the seventeenth and eighteenth centuries. Along with it came the liberal ideology of the classical economists, such as Adam Smith and his followers, which held sway in the capitalist world up until the twentieth century. Philosophers as varied as Thomas Hobbes, John Locke, David Hume, Immanuel Kant, and Smith all coincide in defending the key liberal proposition that the state should be a facilitator for private ends. About Locke’s philosophy, Marx wrote:
Locke championed the new bourgeoisie in every way, taking the side of the industrialists against the working class and against the paupers, the merchants against the old-fashioned usurers, the financial aristocracy against the governments that were in debt, and he even demonstrated in one of his books that the bourgeois way of thinking was the normal one for human beings.(16)
The laissez-faire phase of capitalism coincided with liberal ideology. During this period, the state’s participation in the economic sphere tended to be external: a passive “refereeing” of economic activities that became somewhat more active in relation to foreign trade. Although considered a non-economic institution, the liberal state nevertheless exercised indirect influence through politics, ideology and occasionally through the military and police. All the classical political economists and philosophers, except Marx, believed the capitalist economy to be self-regulating and self-sustaining and hence requiring only minimal state intervention (a belief reflected in Say’s law, the Walrasian theory of general equilibrium, and Smith’s reference to an “invisible hand”).
Throughout the liberal phase of capitalism, classical political theory worked to justify a hands-off approach to the economy and present state intervention as a hindrance to capital accumulation. However, the notion of a self-regulating capitalist system is nothing more than a myth. In reality, capitalism is a highly unstable system, requiring the continuous intervention of a supra-social entity: the state. The historical record shows how, even during the era of classical political economy, colonialism was always central to capitalist accumulation in the metropolitan countries. Since colonialism depends on the state’s military intervention, it follows that capitalism has always needed state intervention, contrary to the image presented by the liberal economists.
Prior to World War I, unregulated banking and free competition, relatively progressive forces, drove world capitalism. However, capital accumulation entered into a new phase during the last quarter of the nineteenth century (from 1870 onward). In his work on imperialism, Lenin pointed to the concentration of production and the emergence of monopolies as the defining features of this new phase. In effect, the concentration of capital in cartels, syndicates, trusts and other forms of association signaled the emergence of a new capitalist phase: a shift from competitive capitalism into monopoly capitalism. New tendencies also emerged in the banking sector, which became increasingly centralized and concentrated. Big banks ousted smaller ones, and big industries became increasingly dependent upon a restricted number of large banks. In this way, industrial capitalism became subordinated to the banking sector.(17) During this period, concentration was also enhanced by the overlap between key players in industry with the board members of the big banks, with both groups including state personnel. Rudolf Hilferding dubbed the new phenomenon, which he saw as the fusion of industrial and banking capital, finance capital.(18) To illustrate the role of finance capital in politics, Lenin recurred to the words of Lysis: “the French Republic is a financial monarchy, it is the complete dominance of the financial oligarchy; the latter dominates over the press and the government.”(19)
This new phase of capitalism had three major actors: big industrial organizations, large-scale financial intermediaries and, last but not least, the state. They worked together to accelerate capital accumulation. For example, the state strengthened the monopolies during this period through its tariff policy. As Bukharin demonstrates, high protective tariffs were the cartels’ economic project, which the state then formulated as policy and carried out.(20) The tariffs aimed to eliminate competition in the home market, so that domestic producers could maintain their profitability and market share. This worked to secure the monopolies’ profits within national boundaries. However, after saturating the domestic market, the monopolies’ only remaining option was to force open the markets of other countries, subordinating them as colonies. During the last decades of the nineteenth century and the beginning of the twentieth century, exporting both commodities and capital to pre-capitalist countries became the main exogenous stimulus to industrial capitalism. As Lenin predicted, the conflicts among rival states in the service of finance capital–each aiming to capture the world’s pre-capitalist markets–led inexorably to imperialist war.
Together with World War I, a series of other crises emerged that shook the foundations of the laissez-faire model of capitalism. In wartime, the state assumed measures and controls that later became standard techniques for maintaining the existing economic system. However, the other major historical event of the time was Russia’s 1917 socialist revolution. As a result of that revolution, the working class emerged as an “independent variable” in the face of the capitalist economy and politics. It began to threaten every level of capitalist organization, and the science of capital accumulation had no choice but to recognize the new relations of force. The working class, once considered outside of the bourgeois economy and state politics, was now acknowledged as the mainspring of capitalist development.
John Maynard Keynes stands out as the most penetrating theorist of capitalist reconstruction at the time, and his ideas informed the new capitalist state that emerged in the face of a revolutionary working class. In effect, the classical liberal separation of politics from economics came to an end at the conclusion of World War I. Say’s law was no longer considered valid, because it failed to recognize the evidently crisis-ridden character of the capitalist system. Keynes’ work during the 1920s was critical of both Say’s law and the emerging political situation in Europe. He insisted that state intervention was needed to mediate class conflict and guarantee economic equilibrium. In these early writings, however, Keynes argued only in political terms: he did not yet have a clear scientific appreciation of the new dynamics of class relations and the role of the working class within it.(21)
After the war came the Great Depression of the 1930s, which caused the U.S. gross domestic product to fall 46 percent in just four years and unemployment to soar from 4 to 25 percent in the same time period. The Great Depression cast further doubt on the sustainability of a capitalism driven by unregulated private industrial and finance capital. In this period, Keynes developed scientific arguments to the effect that capitalism’s cyclical downswings were due to lack of effective demand. The 1929 crisis had resulted from a broadening of supply during the preceding decade that was not accompanied by a corresponding increment in demand.(22) Supply of durable goods had increased due to the reconversion of the war industry, technological innovations, and an extraordinary increase in the productivity of labor. The resulting imbalance manifested itself as a lack of effective demand, which is the precondition for sustainable accumulation in a capitalist economy.
In order to stabilize the cyclical fluctuations of capitalism, Keynes prescribed state intervention and recommended a comprehensive socialization of investment.23 He argued that employment growth and domestic prosperity are preconditions for capitalist stability. By contrast, Keynes demonstrated that economic instability results from the unreliability of private investment spending. This meant that the state must not only control private investment, it should also invest in public works and big projects. Additionally, the state ought to facilitate the accumulation process through active monetary and fiscal policies.
Keynes’ ideas helped shape the new capitalist state. To preserve the capitalist system, the liberal capitalist state now metamorphosed into a monopoly capitalist one. The new state’s capacity for intervention extended throughout the whole society, and its structures responded to the working class’s newly-felt muscle. The influence of the working class can be seen in the way the new state assumed a series of economic and social responsibilities in the major capitalist countries. In this emergent scenario, monopoly and banking capital allied with the state’s upper strata, resulting in more organized and stronger state.(24) The connection that was forged between finance and industrial capital intensified the processes of concentration in both of these forms of capital. The previous century’s competitive capitalism, driven by the exogenous stimulus of colonial trade, now gave way to a mixture of monopoly and free competition facilitated by the state’s initiatives. The new state became more directly involved in the exploitation process through active monetary and fiscal policies that favored major capitalists.
This new state form is popularly known as the “welfare state” in recognition of some of its more superficial features. However, a scientific perspective reveals how state monopoly capitalism and the so called “welfare state” arose out of a need to stabilize the capitalist system. The stories of the origins of this new institutional framework are often misleading. Capitalism’s apologists downplay the influence of trade unions and the institutional development of the socialist countries. It should also be kept in mind that the breakdown of laissez-faire capitalism and the turn to a more interventionist state actually pre-dates the Keynesian revolution. As mentioned above, at the outbreak of World War I, large-scale state-induced demand and control of economic variables such as finance, money, credit, trade, and commerce had already become widespread.
Keynes role must also be carefully located in history. What Keynes did was to highlight the need for state intervention in economic affairs to ensure the stability of the accumulation process. Keynesian philosophy did not aim to limit or tame capitalism. In fact, it was always strongly committed to capitalist stability and corporate profitability, seeking only to make capitalism more robust and efficient through state initiatives. As a theory that denied the stability of the laissez-faire model, Keynesian doctrine had the added attraction in the capitalist countries of employing a non-Marxian lexicon. A posteriori, we can see that the Keynesian era coincided with the rise of big corporations and large-scale capital concentration, together with a relative hegemony of industrial over financial capital. This marked a sharp contrast with the period prior to World War I.(25)
All the main theoretical elements of the Keynesian system played a part in shaping the New Deal. Roosevelt understood that, in the United States, the capitalist class would soon face powerful anti-capitalist forces seeking more fundamental changes to the system. With a view to preempting these changes, he built a class partnership favoring a kind of social democracy. The New Deal demonstrates how, throughout the world, strong working-class movements can impact capitalism’s structure. At the center of Roosevelt’s plan to preserve U.S. capitalism were Keynesian techniques for stimulating effective demand and thus raising the general wage level and boosting employment.
Considered by some the “golden age of capitalism,” the period between 1950 and 1970 was one in which the organized working class accepted capitalist markets and property rights in exchange for political democracy. This social pact enabled workers to achieve social security and higher wages, on the one hand, and, on the other, it bolstered demand, thereby stabilizing the accumulation process and maintaining profits.(26) During the whole period, in which the free market coexisted with certain guaranteed public goods, Keynesian’s state policies pursued two main objectives: first, to generate the demand that would maintain the accumulation process and profitability and, second, to limit financial speculation through state-controlled monetary and fiscal policies. The Keynesian theory of employment and effective demand took for granted that class struggle was a real threat to capitalism and its sustainability. It set out to confront that threat, in ways favorable to capitalist development, through an interventionist state.
The crisis that emerged in the 1970s was characterized by “stagflation”–an unanticipated combination of high inflation along with high unemployment and stagnated real wages. The phenomenon contradicted the basic tenets of Keynesianism, spelling an end to its hegemony. Nevertheless, the crisis turned out to be an opportunity for Friedrich Hayek and Milton Friedman to implement their long-ignored ideas. Faced with the new scenario, they revived liberal dogmas, presenting state intervention (particularly regulation of finance and of private capital) as impediments to the functioning of market signals and to the market’s allocative efficiency. In the name of entrepreneurial freedom and economic growth, the monetarist school carried out an organized ideological attack against Keynesian doctrine. They criticized Keynes’ theoretical framework, arguing that state regulations actually caused both inflation and unemployment. Specifically, they contended that state spending, backed up by deficit financing and high taxes on corporate capital, generated inflation and unemployment through excess money supply. On the contrary, Friedman argued that the basic role of the government should be to maintain law and order and define property rights, with most economic activities being left to the free play of market forces.(27)
Reversing more than three decades of accepted wisdom, Friedman and other neoliberal thinkers held that there is no need for direct state intervention in the economy. The state’s role should be restricted to maintaining law and order, and, to the degree that intervention is required, it can best be done through adjusting monetary policy. In his influential article, “The Role of Monetary Policy (1968),” Friedman argued that, as against fiscal activism, monetary policy was the key tool for stabilizing the capitalist system. What class interest supported this new ideology that overturned the longstanding hegemony of Keynesian theory and practice? In truth, Friedman and Hayek’s doctrine was the ideology of finance and rentier capitalists. With the rise of monetarism, the pendulum of state power now shifted away from the interests of industrial capital towards those of finance capital.
During the 1980s and 1990s, the right-wing coalition of finance capital, big business and high income groups (along with allied intellectuals) declared state regulations to be major constraints on economic efficiency and individual freedom. By contrast, they presented liberalizing the economy as a cure-all to any form of stagnation and a sure-fire guarantee of growth. In the name of freedom and efficiency, the spokespeople for this coalition prescribed a package of deregulation policies that came to be known as “neoliberalism.” Despite dubious efforts to link free markets to democracy and individual freedom, a scientific understanding of neoliberalism points to it being merely the latest institutional form that capitalism has assumed to facilitate the accumulation process.
In many respects, neoliberalism revived and intensified eighteenth and nineteenth century liberalism. In David Harvey’s words,
Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedom and skill within an institutional framework characterized by strong private property rights, free market and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices. The state has to guarantee, for example, the quality and integrity of money. The state must set up those military, political and legal structures and functions required to secure private property rights and to guarantee by force, if need be, the proper functioning of markets.(28)
The neoliberal agenda eventually crystalized into a shared set of ideological and political dogmas. It was a universally applicable model emphasizing free markets and the free movement of capital, with a view to maximizing profits and capital growth in stable conditions. Ironically, the state itself, so vilified by these market fundamentalists, played a key role in justifying neoliberal methods of exploitation.
As a result of neoliberal doctrine, state controls on industrial and finance capital virtually disappeared. Radical deregulation led to a spectacular growth of finance capital, changing the character of capital accumulation and shifting the balance in favor of financial activities. In Samir Amin’s words:
The dominant stratum of capital should be characterized as “oligopoly-finance capital,” not in the sense of referring to capitalists operating in the financial sector of the system (banks and others), but in the sense of capitalists having privileged access to the capital necessary for the development of their activities, which may concern various sectors of the economy (industrial production, commercialization, financial services, research and development). That privileged access gives them a particular and powerful authority in the shaping of markets, which they regulate for their profit. It is specifically that oligopolistic group of the bourgeoisie that, in the present phase, dominates the financial market (particularly interest rates) and the global economy (particularly exchange rates).(29)
The financialization of capitalism is an expression of the policies promoted by oligopoly-finance capital. The nearly universal acceptance of these policies is proof that that oligopolistic group has domesticated the state, even in those countries (such as the United States) where democracy is most vociferously exalted. To accelerate the process of capital accumulation in the neoliberal era, the financial sector altered its role in two ways: first, through the quantitative expansion of its activities on a global scale; second, through direct involvement in financial markets and the creation of new financial instruments. Deregulation of the financial sector in the 1980s permitted financial institutions to enter areas where they were formerly prohibited, while mergers, once restricted by antitrust legislation, began to take place with greater frequency.
Evidence of the increasing power of banking capital is not difficult to find. For example in the United States, the six largest bank holding companies (J.P. Morgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley) had assets equal to 17 percent of the U.S. GDP in 1995. By 2010, their share of the GDP had risen to 64 percent. Again, the financial sector went from getting 16 percent of corporate profits in that 1970s to 40 percent at the beginning of the new century.(30) A grand oligopoly has come into existence which includes not only the leading international banks but also a network of international investors managed and controlled by their subsidiaries and affiliates, insurance companies, and a group of major firms associated with the leading banks. It now dominates the whole planet’s economic and political affairs.
Under the reign of oligopoly-finance capital, a powerful ideological cluster takes shape that preaches privatization, market deregulation, and retreat from state intervention. However, despite the small government rhetoric, the neoliberal state continually protects the interest of oligopoly-finance capital and plays an important role by facilitating, subsidizing and building a favorable environment for private capital accumulation. It does all this, of course, without intervening to promote employment and social services (health and education), and without building a safety net for the bottom strata of the society via subsidized food and other basic goods. The state’s macroeconomic policy is confined to monetary adjustments aimed at stabilizing prices. At the same time, its political function involves using the police, military and public administration to guarantee international finance capital’s access to domestic resources. (To secure these assets, state power backs up finance capital, and both aid industrial capital).
The International Monetary Fund (IMF) was key in promoting the global retreat from state intervention in production and distribution. No longer viewed as a mere economic indicator, fiscal deficit emerged in the IMF’s discourse as the main economic problem, its elimination being a necessary precondition for economic growth. The IMF pointed the finger especially at state expenditures in the social sector (subsides to poor people and other welfare programs) as the main cause of fiscal deficits, ignoring the role played by declining state revenues from custom duties and taxes on corporations. The search for fiscal equilibrium justified privatizing not only state-owned industries and other assets, but even social services such as education and health. The end result defies logic and common sense: a capitalist state that rules “on the masses’ behalf” without providing any services to them. In reality, the state’s (and the IMF’s) objective is to put the masses’ labor power and the country’s resources at the service of oligopoly-finance capital, with a view to accelerating accumulation.
Another important feature of today’s capitalism is the displacement of industry towards the developing regions of the world to counterbalance declining profits in the central countries. International capital relies on the developing countries’ states, which have become an integral part of the capitalist world system, to ensure access to cheap labor, raw materials, land and other resources to accelerate the accumulation process and enhance profits. The peripheral states also intervene in those areas of social life that private corporate capital cannot easily manipulate. For example, their ideological apparatuses present the interests of big capital as identical to national interests. The developing countries’ states also use their repressive apparatuses to displace millions of people and forcibly transfer resources to private corporations, in the name of industrialization and modernization. In this latest phase of capitalism, the state has become oblivious to the real problems that the masses face. More exactly, it is a major contributing factor to those problems. To disguise this fact, fascist forces supported by oligopoly capital have usurped state power in many parts of the world. Michael Kalecki has pointed out how the collusion between fascist forces and the capitalist class responds to big business’s dislike of government expenditure.31 Fascist rule overcomes this problem by putting the state machinery under direct control of big business and its fascist partners.
In this regard, the experience of India is especially revealing. After the shift to neoliberal policies in the 1990s, the Indian state reduced its role in economic affairs but continued to assist the poorest people through food subsidies, housing programs, and employment schemes. Its objective was to dampen the contradictions of the accumulation process. Recently, however, it appears that international capital considers even these limited programs to be unacceptable obstacles to accumulation. To remove them and widen the scope of exploitation, capital embarked on the new experiment of promoting the seizure of state power by communal forces: that is, those parties and power groups that foment ethnic or religious rivalry. Through a dangerous slight of hand, capitalist media groups have learned that they can covertly support communal forces by renaming them as “nationalist.” The end result is an insidious form of fascist neoliberalism that advances under the banners of governance and nationalism. This new form of social legitimacy–forged through an intertwining of communal forces, the capitalist state, and oligopoly-finance capital–aims to accelerate the accumulation process, regardless of the cost.
Notes
- This paper is an adapted version of a presentation made at the Tenth Forum of the World Association of Political Economy, June 19-21, 2015, Johannesburg, South Africa. Paramjit Singh is Assistant Professor in the Department of Economics, Panjab University, Chandigarh (India). Balwinder Singh Tiwana is Professor in the Department of Economics, Punjabi University, Patiala (India).
- For more on the financialization of capitalism, see John Bellamy Foster and Fred Magdoff’s The Great Financial Crisis: Causes and Consequences (2009) and John Bellamy Foster and Robert W. McChesney’s The Endless Crisis: How Monopoly Finance Capital Produces Stagnation and Upheaval from the USA to China (2012).
- Friedrich Hayek’s Road to Serfdom (1944) and Milton Friedman’s Capitalism and Freedom (1962) are key texts promoting and justifying neoliberal ideology. Both authors were Nobel Prize winners.
- Thomas Pikkety, Capital in the Twenty-First Century (London: Harvard University Press, 2014),
- Karl Marx, “Critique of Hegel’s Doctrine of the State,” in K. Marx, Early Writings (London: Penguin Publishers, 1992), 62-65.
- Karl Marx, “Critique of Hegel’s Doctrine of the State,” in K. Marx, Early Writings (London: Penguin Publishers, 1992), 65.
- Bob Jessop, The Capitalist State: Marxist Theories and Method (London: Martin Robertson Publications, Oxford, 1982), 7-8.
- Vladimir I. Lenin , State and Revolution, (New Delhi: People’s Publishing House, 2011), 1-17.
- Karl Marx, A Contribution to the Critique of Political Economy (Lucknow: Rahul Foundation, 2010), 26.
- Louis Althusser, “Ideology and Ideological State Apparatuses”, in L. Althusser’s Lenin and Philosophy and other Essays (New Delhi: Aakar Books, 2006),
- David Harvey, Spaces of Capital: Towards a Critical Geography, (New York: Routledge Publications 2001), 274.
- Karl Marx and Frederick Engels, The German Ideology (Moscow: Progress Publication, 1970) P. 80.
- David A. Gold, Clarence Y. H. Lo, and Erik Olin Wright, “Recent Developments in Marxist Theories of the Capitalist State,” Monthly Review, Vol. 27, No. 5. (1975): 38.
- Vladimir I. Lenin, State and Revolution (New Delhi: People’s Publishing House, 2011), 1-17.
- Michael Heinrich, An introduction to Three Volumes of Karl Marx’s Capital (New York: Monthly Review Press, 2012), 197-218.
- Karl Marx and Frederick Engels, On Colonialism (Moscow: Progress Publication, 1972) P. 592.
- Vladimir I. Lenin, Imperialism: The Highest Stage of Capitalism (Lucknow: Rahul Foundation, 2010), 49.
- Rudolf Hilferding, Finance Capital: A Study of Latest Phase of Capitalist Development (London: Routledge and Kagan Paul Ltd., 1981), 197-218.
- Vladimir I. Lenin, Imperialism: The Highest Stage of Capitalism (Lucknow: Rahul Foundation, 2010), 49.
- Nikolai Bukharin, Imperialism and World Economy (New Delhi: Aakar Books 2010), 337-350.
- Keynes’s, “Liberalism and Labour” (1926) and “The End of Laissez-Faire” (1926). John Maynard Keynes, Essays in Persuasion (W.W. Norton and Company, New York, 1963), 312-321; 339-348.
- Toni Negri, “Keynes and the Capitalist Theory of the State Post-1929,” in T. Negri, Revolution Retrieved: Writings on Marx, Keynes, Capitalist Crisis and the New Social Subject (1967-83) (London: Red Notes, London, 1988), 12-13.
- John Maynard Keynes, The General Theory of Employment, Interest and Money (New Delhi: Atlantic Publications, 2008), 21-30.
- Amal Sanyal, “On the Economic Role of the State under State Monopoly Capitalism” Social Scientist 10 No. 12 (1982): 3-14.
- Wolfgang Streeck, “The Crisis of Democratic Capitalism,” New Left Review, Vol. 71 (2011): 5-29.
- A now classic treatment of the post-war era is Paul A. Baran and Paul M. Sweezy’s Monopoly Capital: An Essay on the American Economic and Social Order (New York: Monthly Review Press, 1966)
- Chapter 2 of Friedman’s Capitalism and Freedom:“The Role of Government in a Free Society.”
- David Harvey, A Brief History of Neoliberalism (New York: Oxford University Press, 2007), 2.
- Samir Amin, “Market Economy or Oligopoly-Finance Capitalism?” Monthly Review, Vol. 59, No. 11 (2008).
- Robert W. McChesney, “This Isn’t What Democracy Look Like” Monthly Review, Vol. 10, No. 8 (2010): 1-28.
- Michal Kalecki, “Political Aspects of Full Employment” in M. Kalecki, Selected Essays on the Dynamics of the Capitalist Economy 1933-1970 (Cambridge University Press, London, 1971), 141.
Ottoman Tulips, Ottoman Coffee; Leisure and Lifestyle in the Eighteenth Century
Dana Sajdi. Ottoman Tulips, Ottoman Coffee: Leisure and Lifestyle in the Eighteenth Century. London: I.B.Tauris, 2008. 262 S. $89.00 (cloth), ISBN 978-1-84511-570-8.
Tulips and coffee, leisure and lifestyle in an Ottoman perspective. Title and subtitle of this collection of articles raise expectations which the volume itself can meet only partially. It contains six papers presented by a group of young scholars at a larger conference entitled “Rethinking culture in the Ottoman eighteenth century“ that took place in Princeton in 2005. The articles, however, are connected more by their revisionist stand than by exploring the potentials of a culturalist approach to Ottoman history. It is symptomatic that the editor chooses to address, “by way of introduction”, the paradigm of decline and its history in Ottoman studies rather than to outline the characteristics of what is called here “the new field of Ottoman cultural history” (p. 2).
In a detailed overview, Dana Sajdi revisits the discursive construction and deconstruction of the notion of decline in the historiography of the Ottoman empire which is still very much in evidence outside the narrow circles of specialists. For the latter, the usefulness of this exercise is probably limited, but one can hope that the former might take notice, more so now than in 1999 when Amy Singer stated “those who persist … do so out of sheer laziness” (p. 1).
Can Erimtan’s article opens the volume with an appeal to rethink the characterization of the so-called Tulip Age (1718–1730) as “a short-lived but highly productive era of Westernization during Damad Ibrahim Paşa’s tenure as … grand vizier” (pp. 42–43). Erimtan explores the contested perceptions of the Saadabad summer palace, situated outside the city walls of Istanbul, a building which has long vanished without leaving a trace. The void can be filled with descriptions from various perspectives. Erimtan posits that whereas former scholarship saw the construction as influenced by recent views of Versailles and Fontainebleau, “the Ottoman empire had at the time not necessarily been looking westward for inspiration” (p. 43), that, on the contrary, the palace is following models from Safavid Iran, Mughal India or other regions of the Islamic world. A meticulous investigation of the meta-narratives of writing Ottoman history leads to the not altogether surprising result that early 18th-century Istanbul presents a much more complex cultures-cape than the simplistic notion of Westernization implies. In replacing one exclusivist way of thinking by another, however, Erimtan exposes himself to the question of what we gain by describing modes and articulations of cultural life in the Ottoman capital in terms of an either/or of Western vs. Safavid/Islamic influences instead of a lieu of encounters of various kinds and directions.
This point is illustrated by the article of Orlin Sabev (Orhan Salih) in the same volume. It aims at challenging the common perception of the introduction of the printing press in 18th-century Istanbul as a failure (“They did not read what I printed,” Ibrahim Müteferrika utters as fictive last words in a recent play, p. 63). Sabev collects, from a variety of sources, among them the probate inventory of the printer, the numbers of books printed and books sold in order to prove the commercial success of the enterprise. By specialising on dictionaries and non-religious literature like history and geography, the printing press had catered primarily for those involved in government and thus on a utilitarian programme of publishing (p. 78). In selling seventy percent of its production in Müteferrika’s lifetime, it was more successful than some of its early-modern European counterparts. Sabev emphasises that the impact of the printing press was not a sudden revolution, but a long-term process of acculturation which holds true for the “Europe” of Gutenberg as well as the Istanbul of Müteferrika.
In his article, Babak Rahimi addresses imperial circumcision rituals as a way to understand the changing relationships between state and society. Building on the growing literature of Ottoman state organisation in the 18th century, he describes the importance of the rituals for the developing “theatre state” (Clifford Geertz) of the Ottomans. The focal point is the role of the “nahil”, a wooden pole filled with flowers, fruit or sweets given to the princes. Whereas it is easy to understand the public performance of such rituals and their symbolic use for the display of imperial power, it seems more difficult to link them directly and convincingly to socio-economic transformations as Brahimi suggests (p. 92) but does not prove.
The two remaining contributions are related more closely insofar as they both concern coffeehouses. In a short review of the existing literature, Ali Çaksu makes a case for a more thorough investigation of the role of Janissary coffeehouses in the urban fabric where, for instance in Istanbul, coffeehouses functioned as “headquarters of the Janissary political and criminal activities” (p. 120), centres of “Bektashism” (p. 125) as well as business ventures up to 1826.
Alan Mikhail promises a visit to Ottoman coffeehouses while exploring questions related to gender and urban space. The article starts with a critique of the gendered notions of public and private in Ottoman contexts, which reiterates arguments against a simple transfer of the Habermasian concepts into the Ottoman sphere. Passing fleetingly by Foucault’s notion of heterotopias, Mikhail concludes by summarising his theoretical stance in the following terms: “ …various ideas of space within the Ottoman world existed in concert with one another, and to suggest a rigid conceptualization of space within the Ottoman empire would in all likelihood prove ineffective in describing the vast multiplicity of spaces that made up the Ottoman world” (p. 134). He then explores in a rather uneven argument various aspects of the social uses of neighborhood coffeehouses, as extension of home for male customers, as places of gossip and political discussion, but also as gendered loci of poetical imaginings.
Referring to cases from Istanbul, Cairo, Aleppo, Damascus and Jerusalem, Mikhail’s article in particular, implicitly also the volume as a whole, raises the old question of what we mean by the label “Ottoman”. While I easily concede that “no single dichotomization of space could accurately reflect Ottoman urban realities” (p. 134), I wonder whether the use of “Ottoman” as a category of space, urban space and coffeehouses in particular, will contribute to a fruitful discussion along these lines, without a reference to more locally defined cultural contexts. Though being the capital, Istanbul does not represent the Ottoman empire as whole, not even in cultural terms. Generalizations of this type do not strike me as a promising way to contribute to the discussions and debates that are already well underway in the field of Ottoman cultural history.
All in all, this collective undertaking raises important questions for future discussions. In the articles, they sometimes seem to become of secondary importance behind the revisionist impetus to challenge previous scholarship. This makes the volume of limited interest to a general public beyond a rather circumscribed circle of specialists, though this is probably also the consequence of the rather excessive price of the well-produced book.
From Mosques and Coffeehouses to Squares and Cafes: the Production and Transformation of Political Public Spaces and Social Life in Modern Tehran
Ashkan Rezvani Naraghi (2016)
Why did the spaces of protest in Tehran, the capital of Iran, shift from sacred spaces of the city, two mosques and a holy shrine during the 1905 and 1906 Constitutional Revolution, to the streets and squares of the northern city in the 1940s and the early 1950s? Through extensive archival research in Iran, including examination of old Iranian periodicals, memoirs, travelogues, maps, and the like, I found that this spatial transformation was the tip of an iceberg; it was closely related to the transformations of urban society, social life, and social spaces in Tehran that had been brewing for decades.
Nineteenth-century Iranian urban society was largely a classless society; it consisted of numerous smaller communities. Social life and the social spaces of Tehran –takīyyihs, zūrkhānihs, mosques, bathhouses, and coffeehouses –were highly shaped by communal identities. In this context, the main sacred spaces of the city were the only sites that could transcend communal diversities and brought people together for a common political cause. However, Iranian urban society underwent massive transformations during the first half of the twentieth century. Two new urban classes, the modern middle and the urban working classes, developed in Iranian cities, particularly Tehran, which were free from the bonds of communal life.
The city’s social spaces and social life transformed alongside urban society. A new spatial discourse that was incubated in Iranian society for a century became the main force transforming Iranian cities, particularly Tehran. Moreover, new types of social spaces after European models – cinemas, theaters, cafés, restaurants, and sport clubs –became the centers of social life for the modern middle class. This class became the main political social force in the city. It rejected traditional and religious spaces and defined a new way of life for itself. In this context, the newly built network of streets and squares of the northern section of Tehran substituted the sacred spaces of the city as the primary political public spaces.
Alongside the main historical element of the dissertation, there is also a theoretical deliberation. Through the examination of various instances of social movements and their social forces, I investigate the relationship between the public sphere and political public spaces in a context beyond the conventional geographic scope of western urban and political theories. The research suggests that the current models of the public sphere, including Habermas’s bourgeois public sphere, do not map onto Iranian society. Instead, my research suggests a new model based on the particularities of Iranian urban society during the nineteenth and the early twentieth centuries, but potentially applicable to cases far beyond Tehran as well. In this model, I introduce the communal sphere as the main construct of segmented Iranian urban society in the nineteenth century, mediated between the private and public spheres. In this context, the public sphere formed as the outcome of coming together of various communal spheres through the binding force of religion and political activities of a new urban bourgeoisie, the propertied middle class, at the turn of the twentieth century. Also, I found that the public sphere and political public spaces are deeply interconnected; they share certain commonalities that can be investigated through the socio-historical analysis.
The European Coffee-House: A Political History
Kelly Intile (2007)
From the early sixteenth century to the Industrial Revolution, coffee-houses spread from the Middle East throughout Europe and grew into important political, economic, and social institutions. This paper investigates the role of the coffee-house in developing and promoting these concepts and relates the ways in which the European coffee-house gave rise to such organizations as the London Stock Exchange and Lloyd’s of London. As liberal political ideology developed, the coffee-house, especially in England, became the forum through which the notions of freedom of speech and the public sphere emerged, and this thesis pays particular attention to the impact of coffeehouse culture on the development of these concepts. It also gives an account of the subsequent decline in influence of English coffee-houses, chronicling those cultural, political, and financial changes that transformed the European coffee-house from an epicenter of urban activity into an obsolete institution.
Finally, it compares these traditional European coffee-houses with post-WWII coffee bars and twenty-first century “Starbucks revolution”-era coffee shops, contrasting the role of modern coffee-houses with that of their seventeenth and eighteenth century European predecessors.
Dutch Capitalism and Slavery
Pepijn Brandon
In 1944, the Caribbean anti-colonial thinker Eric Williams wrote his classical work Capitalism and Slavery. The book argued that the enormous wealth that Britain pumped out of the slave-plantations in the West-Indies in the eighteenth century contributed significantly to the Industrial Revolution, and thereby to the birth of modern capitalism. For 75 years now, historians have debated the merits of the “Williams’ Thesis”. But in this discussion, the Netherlands and its colonial empire have been largely ignored. Often quite conservative imperial historians in the Netherlands saw the question of slavery’s contribution to capitalism as irrelevant because the Netherlands was so much later than Britain in going through its industrial revolution. This argument conveniently ignored the great importance of Dutch commercial capital to the wider breakthrough of European capitalism. In general, these historians usually argued that the contribution of slavery in the Dutch West Indies was small. They also tended to treat the history of colonisation, violence and slavery in the Americas as completely separate from the history of Dutch colonialism in Asia, as if the two had nothing to do with each other. However, on all three counts, the narrative is now shifting, even among historians working in the Netherlands. This can help to provide a basis for rewriting the history of the global involvement of the Dutch empire in slavery, that brings together the Atlantic and Indian Ocean world and that shows how the wealth amassed in both hemispheres fed into European capital accumulation, with Dutch capital in the role of initiator, enforcer, organiser, and intermediary.
Dutch merchants were involved in global slavery from the sixteenth century onwards. They remained so until the first half of the 1860s, when the Dutch were the last European nation to formally abolish slavery in its colonies. Even then, the Dutch stipulated further forced labour from their formerly enslaved subjects. In the East Indies, this was organised in the form of the “cultivation system”, which had already replaced slavery by other types of coerced labour in the preceding period. In Suriname and other Dutch Caribbean colonies, the emancipation decree of 1863 demanded another ten years of “apprenticeship” on the plantations, in which the African population was obligated to keep on working for their former masters. The role of the Dutch Empire in global slavery was extensive, including the transportation and sale of hundreds of thousands of captives in both the Atlantic and the Indian Ocean region, and the operation of slave labour in colonies that at various points of time included Northern Brazil, New Amsterdam (now New York), Suriname, South Africa, today’s Indonesia, Sri Lanka, and many other parts of Asia. The first large-scale “experiment” with plantation slavery by the Dutch did not take place in the West, but on the nutmeg-producing Banda Islands in the Southern Moluccas, after VOC-governor Jan Pieterszoon Coen organized a genocidal campaign against the indigenous population. In most areas under VOC-control, however, the Dutch combined slavery with many other forms of forced labour. This was different in Atlantic colonies such as Suriname, that became organised completely around the institution of largely African plantation slavery and in which other forms of coerced labour like white indentured labour or forms of enslavement of the indigenous population were pushed to the margins.
As for Britain and France, the largest surge of this “classical” form of commercial slavery that was central to Eric Williams’ argument in the Dutch Empire took place in the course of the eighteenth century, when Atlantic circuits of commerce and finance exploded on a massive scale. And, as Williams himself suggested many decades ago, the main revenues were not drawn from the slave-trade per se, but from the goods produced on the plantations by the back-breaking labour of the enslaved: sugar, coffee, tobacco, indigo, cacao and other products for European markets. My colleague Ulbe Bosma and have publishd a long article in the main Dutch journal for social and economic history that challenges the notion that the Dutch only drew marginal economic benefits from this eighteenth-century plantation slavery in the Atlantic world. The article sums up the results of the work of a team of researchers that for the past five years looked into the importance of slavery in the West-Indies for the Dutch economy. Taking as our starting point the year 1770, which was an average year for the second half of the eighteenth century, we show that 5.2 percent of the Dutch GDP was based directly on plantation slavery. That figure alone already shows that we are talking about a sizeable sector. Recently, a study executed by US economists working for the federal government concluded that the weight of the entire “digital economy” – Silicon valley, e-commerce, the digital infrastructure up to and including the cable companies – is around 6.5 percent of the US GDP today. However, a mere percentage of GDP only gives us one part of the story of the economic weight of slavery. It is also important to know where in the economy the revenues drawn from slavery landed up. In the case of the Netherlands, this was largely in the massive commercial sector located in the western part of the country, the Netherland’s richest province Holland. There, according to our calculation, by 1770 a massive 10.36 percent of GDP was based on Atlantic slavery. That this percentage was so high was a direct result of the importance of slave-produced goods in the Dutch trading sector, which still dominated the economy at the time. Of all goods that went through Dutch harbours, expressed in value, 19 percent was produced directly by slaves. Another 4 to 5 percent were goods to provision the plantations and the slave-ships.
Dutch capital profited not only from the exploitation of the slave-colonies controlled by the Dutch colonial companies and the state. From the time of the Dutch Revolt in the late sixteenth century onwards, Amsterdam had functioned as a crucial hub of wider European trade and finance. In the seventeenth century this distributing role had prominently included the trade in colonial goods, but in absolute terms European bulk carrying trade dominated the circuits of capital investment. This gradually changed in the eighteenth century, when the Dutch were outcompeted in other areas, but were able to compensate for this by the increasing weight of the trade in colonial goods from both the Atlantic and the Indian Ocean region. By the second half of the eighteenth century, the Dutch not only imported coffee and sugar from Suriname, but also handled millions of pounds of coffee and sugar produced on France’s main plantation colony St. Domingue. This relationship between the Dutch economy and St. Domingue persisted, until a revolution by the enslaved in 1791 led to emancipation and the forming of independent Haiti. Meanwhile, a tight network of bankers, merchants, mortgagers and financiers tied the still thriving Amsterdam financial market to planters in the Spanish colonies, the small Danish Caribbean colonies, and the US South.
These arguments for the Dutch Atlantic economy show that the question of the relationship between capitalism and slavery posed by Eric Williams should be approached in a much broader framework than just the connections between the British Industrial Revolution and Britain’s sugar complex in the West Indies. It also challenges the idea of some Dutch historians, that Atlantic slavery was only of marginal importance to the Dutch economy. But much more than that can be done, if the history of slavery is truly approached on a global scale. This does not necessarily mean a simple copying of the methods used to calculate the economic significance of Atlantic slavery and applying it to the VOC Empire. While, in the Atlantic world, plantation slavery became the point towards which all commercial activities gravitated, in Asia the colonial empires mostly combined many different forms of coerced labour at the same time, so that it becomes hard to estimate what constitutes profits from slavery per se. Also, by and large, plantations in the Atlantic world were owned directly by Europeans, while in Asia the VOC often relied on intermediaries such as kings, landed aristocracies, or Chinese merchants and tenant farmers. Perhaps more important at this stage than overcoming these difficulties for making precisely comparable calculations, however, is to face the challenge of bringing the underlying histories of colonial slavery into a common framework. The connections between slavery in the Atlantic and the Indian Ocean World did not end with the Dutch experiences with plantation slavery on the Banda Islands, that were carried over by VOC and WIC personnel across the oceans to the Atlantic world. They continued up to the era of the formal abolition of slavery, when Johannes van den Bosch oversaw the ‘modernisation’ of plantation slavery in Suriname before he became the organiser of the cultivation system on Java, and when indentured labourers from India and Indonesia were transported to Suriname to build the new coerced labour force after the 1863 Emancipation decree. Rewriting the history of Dutch colonial slavery in such a connected way would be greatly strengthened by cooperation between researchers working on these topics in Indonesia, the Caribbean, and the Netherlands. In the Netherlands itself, historians are gradually starting to come to terms with this more global story of slavery’s importance for Dutch capitalism. At long last.
The article was originally published on indoprogress.com on 27 June 2019, under the title Kapitalisme Belanda dan Perbudakan,
Kapitalisme Belanda dan Perbudakan
PADA tahun 1944, pemikir anti-kolonial Karibia, Eric Williams, menulis karya klasiknya Capitalism and Slavery. Buku itu berargumen bahwa kekayaan melimpah yang dipompa Inggris dari perkebunan-perkebunan budak di Hindia Barat pada abad ke-18, berkontribusi secara signifikan bagi Revolusi Industri, dan karena itu juga bagi kelahiran kapitalisme modern.
Tetapi dalam diskusi ini, Belanda dan kerajaan kolonialnya diabaikan. Seringkali sejarawan imperial konservatif di Belanda melihat pertanyaan tentang kontribusi perbudakan bagi kapitalisme sebagai sesuatu yang tidak relevan karena Belanda cukup terlambat dibanding Inggris dalam melewati revolusi industri. Argumen ini mengabaikan peran penting kapital dagang Belanda bagi terobosan yang lebih luas dari kapitalisme Eropa. Secara umum, sejarawan-sejarawan ini biasanya berargumen bahwa kontribusi perbudakan di Hindia Belanda adalah kecil. Mereka juga cenderung untuk memperlakukan sejarah kolonisasi, kekerasan dan perbudakan di Amerika secara terpisah dari sejarah kolonialisme Belanda di Asia, seolah-olah keduanya tidak berkaitan Namun, narasi ini mulai bergeser, bahkan di antara sejarawan-sejarawan yang bekerja di Belanda. Ini dapat menolong untuk menyediakan landasan bagi penulisan kembali sejarah keterlibatan global kerajaan Belanda dalam perbudakan, yang mempertemukan dunia sekitar Samudra Atlantik dan Samudra Hindia dan yang menunjukkan bagaimana kekayaan yang ditimbun di kedua belahan bumi ini menyuplai akumulasi kapital Eropa, dengan kapital Belanda sebagai inisiator, penegak, pengorganisir, dan penengah.
Pedagang-pedagang Belanda terlibat dalam perbudakan global sejak abad ke-16. Mereka tetap berperan demikian hingga paruh pertama 1860-an, ketika Belanda menjadi bangsa terakhir Eropa yang secara formal menghapus perbudakan di koloni-koloninya. Bahkan setelah itu Belanda memberlakukan kerja paksa yang lebih parah lagi kepada subjek-subjek yang sebelumnya diperbudak. Di Hindia Belanda, hal ini diorganisir dalam bentuk “sistem tanam”, yang telah menggantikan perbudakan dengan tipe kerja paksa lain pada periode sebelumnya. Di Suriname dan koloni-koloni Belanda lainnya di Karibia, dekrit emansipasi tahun 1863 menuntut 10 tahun tambahan di perkebunan, di mana populasi Afrika diwajibkan untuk terus bekerja untuk tuan-tuan mereka yang sebelumnya. Peran kerajaan Belanda dalam perbudakan global bersifat ekstensif, termasuk transportasi dan penjualan ratusan ribu tawanan di wilayah Samudra Atlantik dan Samudra Hindia, dan operasi kerja perbudakan di koloni-koloni yang pada titik-titik tertentu mencakup Brazil Utara, New Amsterdam (sekarang New York), Suriname, Afrika Selatan, Indonesia hari ini, Sri Lanka, dan banyak bagian lain Asia. Eksperimen skala besar pertama dengan perkebunan budak oleh Belanda tidak dilakukan di Barat, tetapi di Pulau Banda di Maluku Selatan, tempat pala dihasilkan, setelah Gubernur VOC Jan Pieterszoon Coen mengorganisir genosida penduduk lokal. Di mayoritas area di bawah kontrol VOC, Belanda mengombinasikan perbudakan dengan banyak bentuk kerja paksa lain. Ini berbeda dengan koloni-koloni di Atlantik seperti Suriname, yang sepenuhnya diorganisir di sekitar institusi perkebunan budak Afrika di mana bentuk-bentuk lain dari kerja paksa pada penduduk asli didorong sampai ke marjin.
Sebagaimana yang terjadi pada Inggris dan Perancis, gelombang terakhir dari bentuk klasik perbudakan dagang yang sentral posisinya dalam argumen Eric Williams, terjadi di kerajaan Belanda sepanjang abad ke-18, ketika sirkuit perdagangan dan keuangan Atlantik meledak dengan skala masif. Dan sebagaimana Williams sendiri mengusulkan sekian dekade lampau, pemasukan-pemasukan utamanya tidak ditarik dari perdagangan budak saja, tetapi dari barang-barang yang diproduksi dari perkebunan oleh kerja-kerja para budak: gula, kopi, tembakau, nila, kakao dan produk-produk lain pasar Eropa. Minggu ini, kolega saya Ulbe Bosma dan saya akan menerbitkan artikel panjang dalam jurnal utama tentang sejarah sosial dan ekonomi di Belanda yang menantang anggapan bahwa Belanda hanya menarik keuntungan ekonomi yang marjinal dari perkebunan budak abad ke-18 di wilayah Atlantik. Artikel ini merangkum hasil kerja tim peneliti yang dalam 5 tahun terakhir melihat pentingnya perbudakan di Hindia Belanda bagi ekonomi Belanda. Dengan mengambil tahun 1770 sebagai titik awal, yang adalah tahun rata-rata paruh kedua abad ke-18, kami menunjukkan bahwa 5,2 persen dari PDB Belanda bersumber langsung dari perkebunan budak. Angka itu sendiri telah menunjukkan bahwa kita bicara tentang sektor yang besar. Baru-baru ini, sebuah studi yang dilakukan oleh ekonom-ekonom Amerika Serikat yang bekerja untuk pemerintah federal menyimpulkan bahwa bobot seluruh “ekonomi digital” — lembah Silikon, e-commerce, infrastruktur digital hingga atau mencakup perusahaan-perusahaan kabel — adalah sekitar 6,5 persen dari PDB Amerika Serikat hari ini. Namun, persentase PDB hanya menunjukkan kepada kita sepenggal kisah tentang bobot ekonomi dari perbudakan. Adalah penting juga untuk memahami di mana pemasukan-pemasukan ekonomi dari perbudakan itu mendarat. Dalam kasus Belanda, sebagian besarnya adalah di sektor komersial yang masif yang berlokasi di bagian Barat negara tersebut, provinsi terkata di Belanda yaitu Holland. Di sana, menurut perhitungan kami, pada 1770 10,36 persen dari PDB-nya berasal dari perbudakan di Atlantik. Bahwa persentase ini begitu tinggi adalah hasil langsung dari pentingnya barang-barang yang diproduksi budak dalam sektor dagang Belanda, yang masih mendominasi ekonomi pada saat itu. Dari semua barang yang melalui pelabuhan Belanda, 19 persen diproduksi langsung oleh para budak. 4 hingga 5 persen lainnya adalah barang-barang untuk kebutuhan perkebunan dan kapal-kapal budak.
Ibukota Belanda diuntungkan bukan hanya dari eksploitasi koloni-koloni budak yang dikontrol oleh perusahaan-perusahaan kolonial Belanda dan negara. Dari masa Revolusi Belanda di abad ke-16 dan setelahnya, Amsterdam telah berfungsi sebagai penghubung krusial perdagangan dan keuangan yang lebih luas di Eropa. Pada abad ke-17, peran distribusi ini telah melibatkan perdagangan barang-barang kolonial, tetapi secara absolut perdagangan-perdagangan Eropa mendominasi sirkuit investasi kapital. Hal ini secara bertahap berubah di abad ke-18, ketika Belanda kalah bersaing di area-area lain, tetapi sanggup mengompensasikannya dengan menambah bobot perdagangan barang-barang kolonial baik dari wilayah Samudra Atlantik maupun Samudra Hindia. Pada paruh kedua abad ke-18, Belanda bukan hanya mengimpor kopi dan gula dari Suriname, tetapi juga memegang jutaan pon kopi dan gula yang diproduksi di perkebunan utama koloni Prancis St. Domingue. Hubungan antara ekonomi Belanda dan St. Domingue ini bertahan, hingga revolusi budak pada 1791 membawa emansipasi dan pembentukan Haiti merdeka. Sementara itu, jaringan ketat para bankir, pedagang, pemberi hutang dan pemilik uang mengikat pasar finansial Amsterdam pada pemilik-pemilik kebun di koloni-koloni Spanyol, koloni-koloni Karibia milik Denmark, dan Amerika Serikat bagian Selatan.
Argumen-argumen tentang ekonomi Atlantik Belanda ini menunjukkan bahwa pertanyaan tentang hubungan antara kapitalisme dan perbudakan yang diajukan oleh Eric Williams harus didekati dengan kerangka yang lebih luas daripada sekadar hubungan antara Revolusi Industri Inggris dan kompleks gula Inggris di Hindia Belanda. Ia juga menantang ide beberapa sejarawan Belanda bahwa perbudakan Atlantik hanya punya peran yang marjinal dalam ekonomi Belanda. Tetapi ada yang bisa dikerjakan lebih daripada itu, jika sejarah perbudakan betul-betul didekati dengan skala global. Ini tidak harus berarti hanya mengopi metode-metode yang digunakan untuk menghitung signifikansi ekonomi perbudakan Atlantik dan menerapkannya pada kerajaan VOC. Sementara di dunia Atlantik, perkebunan budak menjadi titik yang kepadanya seluruh aktivitas komersil bertumpu, di Asia kerajaan-kerajaan kolonial kebanyakan mengombinasi banyak bentuk kerja paksa pada saat yang sama, sehingga menjadi sulit untuk memperkirakan apa yang mengonstitusikan keuntungan dari perbudakan saja. Juga bahwa perkebunan-perkebunan di wilayah Atlantik dimiliki secara langsung oleh orang-orang Eropa, sementara di Asia VOC sering bergantung pada perantara-perantara seperti raja-raja, bangsawan-bangsawan pemilik tanah, atau pedagang Cina dan petani-petani penyewa. Mungkin yang lebih penting pada tahapan ini, daripada mengatasi kesulitan-kesulitan tersebut untuk membuat perhitungan yang persis dan sebanding, adalah menghadapi tantangan untuk membawa sejarah-sejarah perbudakan kolonial menuju kerangka bersama. Hubungan-hubungan antara perbudakan di Samudra Atlantik dan Samudra Hindia tidak berakhir dengan pengalaman Belanda dengan perkebunan budak di Pulau Banda, yang dilaksanakan oleh personil VOC dan WIC lintas samudra hingga wilayah Atlantik. Mereka berlanjut hingga era penghapusan perbudakan secara formal, ketika Johannes van den Bosch mengawasi ‘modernisasi’ perkebunan budak di Suriname sebelum ia mengorganisir sistem penanaman di Jawa, dan ketika pekerja-pekerja lepas dari India dan Indonesia dipindahkan ke Suriname untuk membangun kekuatan kerja paksa yang baru setelah dekrit emansipasi tahun 1863.
Menuliskan kembali sejarah perbudakan kolonial Belanda dengan cara yang demikian terhubung akan sangat diperkuat dengan kerjasama antara peneliti-peneliti yang mengerjakan topik-topik ini di Indonesia, Karibia, dan Belanda. Di Belanda sendiri, para sejarawan secara bertahap mulai mengungkap cerita global tentang pentingnya perbudakan untuk kapitalisme Belanda. Akhirnya.***
Pepijn Brandon adalah Asisten Profesor Sejarah Sosial dan Ekonomi di Vrije Universiteit, Amsterdam, dan Peneliti Senior di International Institute of Social History. Ia terhubung dengan Huntington Library, University of Pittsburgh dan Harvard University. Ia telah mempublikasikan secara luas karya-karyanya tentang sejarah perang, kolonialisme dan perbudakan di kerajaan Belanda, juga tentang ide-ide Karl Marx dan Rosa Luxemburg. Monografnya, War, Capitalism, and the Dutch State (1588-1795) diterbitkan dalam seri Historical Materialism dari penerbit Brill/Haymarket.
Artikel ini diterjemahkan oleh Daniel Sihombing.
Coffee Economy in Late Colonial Netherlands East Indies: Estates and Capital, 1890–1940
Dias Pradadimara
Artikel ini berusaha melihat ekonomi kopi pada masa akhir Hindia Belanda dengan fokus pada perkebunan partikelir yang memproduksi kopi serta pada kelas pemilik modal yang telah berinvestasi pada perkebunan-perkebunan ini. Semenjak pertengahan abad ke-19 terdapat peningkatan akses calon pemilik perkebunan terhadap tanah, khususnya di Jawa dan Sumatra. Tertarik pada komoditas ini yang harganya terus menarik, walau tidak stabil, perkebunan kopi didirikan dalam jumlah yang banyak diseantero kepulauan, meskipun penyakit karat daun kopi terus mengancam. Hanya daya tarik tanaman karet serta krisis ekonomi tahun 1930an yang berhasil mengurangi antusiasme terhadap perkebunan kopi. Pada saat yang sama, pengusaha perkebunan baik perseorangan maupun perusahaan yang berbasis di Hindia-Belanda yang mengontrol sebagian besar daripada perkebunan kopi pada akhir abad ke-19, diganti secara perlahan oleh perusahaan berbadan hukum yang berbasis di Hindia Belanda ataupun di Belanda. Modal yang semakin banyak mengalir masuk mengikuti boom karet pada awal abad ke-20 telah mengakibatkan penurunan peranan dari pemilik perkebunan perseorangan maupun perusahaan-perusahaan berbasis di Hindia Belanda.
Mr. Rows Namoura Coffee 
Notes on Marx’s “General Law of Capitalist Accumulation”
“Disposable Human Material,” illustrating the role of the surplus population (or reserve army of labor) in the extraction of value from workers, inspired by Chapter 25 of Karl Marx’s, Capital. This is just a small taste of a wonderful series of drawings created to illustrate Marx’s laws of motion of capital. There is at least one illustration for each chapter of Capital, vol. 1! The drawings were created by the Capital Drawing Group based in London, UK.
Andy Merrifield
June 19, 2019
If someone were to ask me what my favourite bit of Marx’s Capital is, I’d tell them Chapter 25, on “The General Law of Capitalist Accumulation.” Not that anybody has ever asked me; but I suspect I wouldn’t be alone in selecting this pinnacle performance, the beginning of the climatic unfurling of Volume One. For here those “laws of motion” that Marx had been trying to lay bare throughout Capital, really do motor before the reader’s very eyes, in all their disturbing fluidity. Hitherto, Marx had been attempting to piece together the intricate “inner mechanisms” of capitalist society. By Chapter 25, he’s ready to analyse these inner mechanisms as a giant well-oiled whirring machine.
And he’s mesmerised by the prodigious power of this machine, by capital accumulating, bursting through every historical and geographical restriction, conquering the entire world of social wealth. Yet, at the same time, he’s appalled by the ruthless force it unleashes, by the horrors the machine inflicts upon its cogs. Meanwhile, its normal functioning soon takes on a spiraling dynamic all its own, operating beyond the control of any single capitalist master. After a while, the enviable freedom of the capitalist gets transformed into a die-hard necessity, into an infamous historical mission:
Accumulation for accumulation’s sake, production for production’s sake.
The drive to accumulate capital dramatically pits capitalist against capitalist, capitalist against worker, worker against worker. Accumulation fuels competition, and competition, Marx says, “subordinates every individual capitalist to the immanent laws of capitalist production, as external, coercive laws.” Thus, as capitalists strive to accumulate, as their actions become mere functions of capital, they inevitably clash with other capitalists seeking to do likewise. What erupts is a fratricidal war; different fractions of capital jostle one other, struggle to corner markets, to control and monopolise markets, to control and monopolise labour; a zero-sum accumulation mania transpires and conspires. Accumulation is the centrifugal impetus of “capital in general.” But competition hastens a splintering of capital, just as it hastens a splintering of labour, compounding each side into many “aliquot parts.” Thus, as capital accumulates, the formation and intensification of class structure manifests itself as a paradoxical obliteration of class structure.
Before long, the hullabaloo of accumulation is “supplemented” by concentration and centralisation, by big capitalist fishes gobbling up little fishes and sharks chomping on big fishes. Marx says this enhances the scale of operations, accelerates the overall effects of accumulation, but in uneven ways, for capitalists and workers alike. Trouble and strife brood. For, on the one hand, competition and the obligatory development of a credit system become powerful levers of centralisation—of the formation of joint stock companies, trusts and conglomerates, mergers and acquisitions—and of expanded accumulation; on the other hand, though, the “organic composition of capital”—the ratio of dead to living labour, of machines to workers, of constant to variable capital—gradually starts to creep upwards, diminishing the relative demand for labour.
Before long, too, the system breeds a new species: Marx labels them “a new financial aristocracy, a new variety of parasites in the shape of promoters, speculators and nominal directors, a whole system of swindling and cheating by means of corporation promotion, stock issuance, and stock speculation.” Could Marx be talking about us? By God yes. Nowadays, we know these people by name, by sleazy reputation; we know, too, that within the overall accumulation process this new financial aristocracy has a stake very different to that of productive capital’s.
The former plays an extremely limited, if any, enabling role for valorisation: stock exchanges are now billion dollar markets for speculating on already existing stocks and shares. Little activity here actually raises money for new productive investment. Businesses generate money by selling stock and shares, relinquishing part of the company to shareholders; but little of the accruing booty gets recycled into future investment. Invariably, it’s doled out as dividends, and/or creamed off through inflated CEO salaries.
***
One of the reasons I like to affirm Chapter 25 isn’t only because it explains the working conditions of the world’s peoples today; it also explains the conditions of our whole existence. Marx’s general law of capitalist accumulation is nothing less than the lever upon which all our lives now pivot. Its frame of reference needs to be opened out, out onto the broader canvas of life, especially planetary urban life. The mighty machine has made us cogs everywhere. It’s here where I’d like to develop Marx’s law, “a law of tendency,” as he calls it, which expels people from dwelling space as well as from the workplace. As such, this law isn’t just a condition of earning a living; it’s a condition of earning a life.
Marx knew in the 1860s that “the absolute” general law of capitalist accumulation could be “modified in its workings by many circumstances.” But in every case, he says, it “followed that in proportion as capital accumulates, the situation of the worker, be their payment high or low, must grow worse.” In our present-day “neoliberal” context, the economy flourishes through sub-employed and over-employed workers, through contingent and gig economy workers, through zero contract hours workers: from Uber to Deliveroo, Handy to Hermes, Amazon to Adjunct Professors, work is evermore casualised and irregular; and worker benefits seem to diminish by day. Toilers here assume that category Marx reckons the general law of capitalist accumulation progressively produces: “a relative surplus population”—or, alternatively, “an industrial reserve army of labour.”
“Every worker,” Marx believes, “belongs to this relative surplus population during the time when they are only partially or wholly employed.” Marx, it’s worth pointing out, sees all work under capitalism as precarious; always has been, always will be. It’s a precariousness dependent on a consistently fickle capitalist business cycle, on short-term soars and long haul dips. Wage levels, he says, get regulated by the relative surplus population, by its expansion and contraction. Wages “aren’t determined by the variations of the absolute numbers of the working population,” Marx insists,
but by the varying proportions in which the working class is divided into an active army and reserve army, by the increase or diminution in the relative amount of surplus population, by the extent to which it is alternately absorbed and set free.
Sometimes wages might even rise should demand for labour rise. At these moments, wages can conceivably keep increasing so long as they don’t impinge upon the overall expansion of capital. Something resembling this actually occurred during the boom of the 1950s and 1960s, when real workers’ wages did in fact rise. Still, the more typical rule, Marx thinks, is that “the mechanism of capitalist production takes care that the absolute increase of capital isn’t accompanied by a corresponding rise in the general demand for labour.” “Capital,” he says, does something more innovative instead, something more dialectical: it “acts on both sides at once”:
If its accumulation on the one hand increases the demand for labour, it increases on the other the supply of workers by ‘setting them free’, while at the same time the pressure of the unemployed compels those who are employed to furnish more labour, and therefore makes the supply of labour to a certain extent independent of the supply of workers. The movement of the law of supply and demand for labour on this basis completes the despotism of capital.
And under this despotism, real wages have effectively stagnated, almost nowhere keeping pace with cost of living hikes. One of the U.S.’s top capitalist mouthpieces, TheHarvard Business Review(October 24th 2017), admits that hourly inflation-adjusted wages for the typical American worker have, since the early 1970s, hardly risen, edging upwards a mere 0.2% per year. Throughout this period, remember, the overall economy has been growing. Thus American workers haven’t participated in any of the growth, nor benefited from gains in their own productivity. The reason why is classic Marx Volume One: new technology has put downward pressure on less-skilled workers’ wages; and workers displaced from work send disciplinary messages to those still active in work: work harder or else!
Whether in times of prosperity or decline, the industrial reserve army produces much the same effect: “it weighs down the active army of workers; during periods of over-production and feverish activity, it puts a curb on their pretensions.” The relative surplus population is,
the background against which the law of the demand and supply of labour does its work. It confines the field of action of this law to the limits absolutely convenient to capital’s drive to exploit and dominate workers.
***
If we dig a little deeper into Chapter 25, we can see how Marx identifies three types of relative surplus population: stagnant, floating, and latent. Alas, we haven’t got to dig too deeply, nor have too much imagination, to see how Marx’s types remain our types. The stagnant form, for a start, is “part of the active labour army,” he says, “but with extremely irregular employment. Hence it offers capital an inexhaustible reservoir of disposable labour-power.” It’s characterised “by a maximum of working time and a minimum of wages.” The downsized blue-collar worker might be filed under this category, since stagnant surplus populations, Marx says, are,
recruited from workers in large-scale industry who have become redundant, and especially from decaying branches of industry where handicraft is giving way to manufacture, and manufacture to machinery.
This stagnant workforce consists of time-served men repulsed from blue-collar employment and drawn into irregular jobs like security and custodial work, janitors, cabbies and deliverymen. Older generation blue-collar workers, who once worked the mines, the auto plants and steel mills, now find themselves literally stagnant. They’re no longer able (or willing) to do low-grade work, yet are too young to retire. So instead they slouch into the ranks of a non-participating labour-force. Men who once set rivets together now sit alone, able to recite daytime TV schedules by heart. Utter stagnation lingers everywhere in rust-belt Europe and America, where empty union halls look out over the rubble of what used to be the company plant.
The dialectic of the floating relative surplus population is similarly one of repulsion and attraction, but its charge is much more volatile. Participants here encounter working conditions wholly unstable and uncertain. The only thing that’s regular is the irregularity of their work. These men and women represent a huge pool of under-employed and sub-employed workers—part-time, on-call, self-employed or zero hours contractors—whose resumé is marked by a floating in and out of jobs. Despite the job-hopping, few new skills are ever learned. Steadily, its fluctuating force assumes a predictably deadening life-form. Many workers are absorbed into the “personnel services industry,” where the hiring and firing is managed by employment agencies like Manpower, Inc., who recruit temporary workers across America and the world. (Manpower has offices in fifty countries, and places 1.6 million “in assignments with more than 250,000 businesses worldwide annually…providing our customers with productive workers and our employees with work.”) The growth of this personnel services industry means evermore despotic control of an anarchic labour-market. Supply and demand for labour tightly track the expansions and contractions of capital; yet always its motioning seeks to trim monies laid out on variable capital.
As at May 2017, the U.S.’s Bureau of Labor Statistics (BLS) said nearly 6 million workers are “contingent”—i.e. “persons who do not expect their jobs to last or who report that their jobs are temporary.” Moreover, there are a further 10.6 million people working as “independent contractors,” together with another 2.6 million on-call. And this doesn’t include 1.4 million temporary help workers nor the 933,000 employed by contract firms like Manpower. Which suggests that true numbers for contingent America total up to somewhere in the region of 20 million people. No coincidence, too, that the nation’s two largest employers are contingent kings Walmart and McDonald’s.(1)
Techie giants like Google, often seen as egalitarian employers with idyllic workplaces, are likewise massively reliant on temporary and contracted labour. In fact, “a shadow workforce of temps” now outnumber Google’s full-time employees. As at March 2019, Google uses 121,000 temp and contracted workers, compared with a full-time workforce of 102,000. Google temps are employed by outside agencies and, in the U.S., make less money than Google full-timers. They have different benefits packages and no paid vacation. Last April, hundreds of Google employees signed a letter protesting the company’s “two-tier system,” as well as the dismissal of 80 percent of a 43-person artificial intelligence team of contingent workers. OnContracting, a temp employment agency for the high-tech industry, says that companies like Google save $100,000 a year on average per American job by using a temporary contractor instead of a full-time employee.(2)
Women swell the ranks of this floating contingent workforce. In the U.S., women are three times as likely to hold regular and irregular part-time work as men. These women make up about a fifth of the overall female workforce, earning, on average, 20 percent less than equivalent women employed full-time and 20 percent less that their male counterpart part-timers. Minority groups fare worse than their Anglo peers, and minority women worst of all. On the whole, African-American women tend to be twice as likely to be lower paid temps and much less likely to be self-employed; Hispanics, meanwhile, have a larger share of low-wage “on-call” work.
Capitalism has a handy knack of constantly inventing and reinventing its reserve army of labour. Often it does so miraculously, tapping into assorted branches of society and sectors of industry where labour has been lying latent. Thus, alongside the stagnant and floating forms, Marx acknowledges another category of flexible labour, the “latent” category, a sort of reserve reserve army of labourers. “As soon as capitalist production takes possession of agriculture,” he says, “and in proportion to the extent to which it does so, the demand for a rural working population falls absolutely.” “Part of the agricultural population,” says Marx,
is therefore constantly on the point of passing over into an urban population or manufacturing proletariat. There is a constant flow from this source of the relative surplus population. But the constant movement towards towns presupposes, in the countryside itself, a constant latent surplus population.
The movement of peoples from rural to urban areas, from agriculture to an urban-based factory system, continued apace during the twentieth-century. As at 2006, its flow tipped the global demographic balance: the majority of the world’s inhabitants, some 3.3 billion people, live in urban agglomerations, not rural areas. Some of that generation’s latent surplus populations, i.e. people formerly displaced from agriculture and reabsorbed into urban factories, have since fallen into the ranks of floating and stagnant relative surplus populations. Yet by 2030, 60% of the world’s population is projected to be urban; an additional 590,000 square miles of the planet will be urbanised, a land surface more than twice the size of Texas, spelling an additional 1.47 billion urban dwellers; many of whom will bolster the ranks of a latent reserve army. They’ll offer sustained nourishment for expanded capitalist accumulation everywhere.
A big chunk of this latent surplus population lurks in China. Shanghai is the planet’s fastest growing metropolis, expanding a massive 15 percent each year since 1992, boosted by $120 billion of foreign direct investment. Half the world’s cranes are reputed to be working in Shanghai’s Pudong district. Rice paddies have been filled with modern skyscrapers and vast factories. Outlying farmlands now host the world’s fastest train links and the tallest hotel. Four thousand buildings with twenty or more stories have gone up, ensuring Shanghai has twice the number of buildings as New York. With 171 cities of more than one million inhabitants, China over the past decade has commandeered nearly half the world’s cement supplies, and will doubtless monopolise the world’s supply and demand for latent surplus labour populations.
Of course, after 1989, with the tumbling of the Berlin Wall, another reservoir of latent labour flooded the capitalist marketplace. A freshly- proletarianised workforce initiated a primitive accumulation of capital, transforming former Eastern European state employees into freelance wage-labourers, set free to pit their wits on the flexible European labour market. The Eastern bloc’s headlong embrace of Western-style neoliberalism prised open a whole new array of market niches, together with a jamboree latent labour reserve—both at home, in some newly-formed nation-states, and in the European Economic Area (EEA). Almost overnight an ideology of dictatorial personality morphed into an ideological dictatorship of the free market, with its attendant rights of consumerist man.
Out of the ashes of communism rose the Phoenix of cheap labour. Western manufacturers, halving labour costs, beat a hasty path eastwards; while a lot of latent labour, almost as hastily, trekked westwards. Stimulated by the European Union’s freedom of labour movement (2004), they’ve found low-grade jobs in powerhouses like Britain, Germany and France. Pay is better than before, yet a lot less than homegrown workers’. British businesses have prospered enormously from this influx of Eastern European labour, especially Polish. Enterprises have been able to valorise a cheap labour they’d not had since the 1950s, when Afro-Caribbean Windrush immigrants arrived. The British agricultural sector has been a big gainer. Prior to 2004, crops like asparagus, cherries, raspberries and strawberries were suffering long-term decline. Remuneration in these sectors was meagre; the work backbreaking. Few locals were turned on. Yet since 2004, rather than invest in expensive new berry-picking technology, growers have exploited Eastern European labour reserves, latent labour-power, which has rekindled agricultural capital accumulation and boosted productivity.
***
When Marx formulated his General Law of Capitalist Accumulation, cities were sites for manufacturing valorisation. It was in urban factories where commodities got produced and surplus value created. The factory system—“Modern Industry,” Marx called it—was the mainstay of capital accumulation, and workers were attracted and repelled from this urban employment. Later in Chapter 25, however, Marx notes how the general law operates outside the factory gates as well—vividly exemplified, he says, in “‘improvements’ of towns which accompany the increase in wealth, such as the demolition of badly built districts, the erection of palaces to house banks, warehouses, etc., the widening of streets for business traffic, for luxury carriages, for the introduction of tramways, [which] obviously drive the poor away into even worse and more crowded corners.”
It’s not a bad description of what still happens in big cities today. Marx’s point here is “that the greater the centralisation of the means of production, the greater is the corresponding concentration of workers within a given space; and therefore the more quickly capitalist accumulation takes place, the more miserable the housing situation of the working class.” Landlords squeeze workers, ripping them off at home, as tenants, just as industrialists rip them off at work, as wage-labourers. Rents are high precisely because pay is low. Vulnerable workers equate to vulnerable tenants; both feel the force of “property and its rights,” Marx says. “Everyone knows,” he adds, “that the dearness of houses stands in inverse ratio to their quality, and that these mines of misery are exploited by house speculators with more profit and less cost than the mines of Potosi were ever exploited. The antagonistic character of capitalist accumulation, and thus of capitalist property-relations in general, is here so evident.” Marx’s adopted hometown of London, one of world’s richest cities, had the most squalid, overcrowded habitations, “absolutely unfit for human beings,” he says. Marx knew this because he and his family lived in many of these hovels. “Rents have become so heavy,” he cites one government health inspector saying, “that few labouring men can afford more than one room.” 1865 or 2019?
And yet, in another sense, a lot has changed since Marx’s day. Back then, his focus was on production in the industrial city; a century and a half on, the city itself has become the form of industrialisation. In the 1860s, cities were places where commodities got produced; nowadays, cities are themselves commodities, centres of gravity for the General Law of Capitalist Accumulation and for the expansive power of capital. Now, urban space itself is both the subject and object of valorisation, the means of production as well as the product this means of production creates. In manufacturing, Marx said new technology would prompt a change in the “organic composition of capital.” “The growth in the mass of means of production,” he argued, “as compared with the mass of labour-power that vivifies them, is reflected in its value-composition by the increase of the constant constituent of capital at the expense of its variable constituent.”
So, too, now, is the organic composition of capital in cities rising. Quite literally rising. Constant capital is displacing variable capital: capital circulates into the construction of new fixed capital assets, new items of the built environment, such as office blocks and shopping malls, Hudson Yards and Coal Drops Yard, upscale housing and elite cultural amenities—high-yield activities for the expanded reproduction of capital rather than low-yield necessities for the simple reproduction of labour-power. This is the sense in which workers have now been set free from life, not just from work: they’re displaced from dwelling space as they are rendered superfluous from the workplace.
The progress of urban accumulation lessens the relative magnitude of the variable part of capital, even if, as in industry, it can’t lessen it entirely. Capital, after all, needs its minion service workforce of busboys and valet parkers, of waiters and barmen, of cleaners and security guards, of nannies and cooks, of superintendents and doormen. But a push-pull effect has taken hold, a dialectic of attraction and dispossession, a sucking into the city of a relative surplus population together with a spitting out, a banishment from the centre. Poor old-time stagnant populations, as well as floating and latent reserve armies, now embrace one another out on the periphery somewhere, where rents are lower and life cheaper.
This system produces planetary geography as a commodity, as a pure financial asset, using and abusing people and places as strategies to accumulate capital. The process embroils everybody, no matter where; even when it doesn’t embroil, even when it abandons people and places, it embroils. Cities, like the factories of Marx’s era, become vortexes for sucking in everything the planet offers: its capital and power, its culture and people—its dispensable labour-power. It’s this sucking in of people and goods, of capital and information that fuels the urban accumulation machine, that makes it so dynamic as well as so destabilising. For it’s a system that secretes a residue, chewing people up when needed, spitting them out when they’re not.
Residues are something more than relative surplus populations and probably include a fair number of lumpenproletariat. They’re minorities who are far and away a global majority. They’re people who feel the periphery inside them, who identify with the periphery, even if sometimes they’re located in the core. Residues are workers without regularity, workers without any real stake in the future of work. Residues are refugees rejected and rebuked, profiled and patrolled no matter where they wander. Residues are those whose land has been grabbed, who’ve been displaced from housing, thrown out of housing, whose living space teeters on the geographic and economic edge. Residues are disenfranchised and decommissioned people everywhere who feel isolation strike them deep within. Residues come from the city as well as the countryside and congregate in a space that is often somewhere in-between, neither traditional city nor traditional countryside. We might call this somewhere in-between the globalbanlieue. (Remember, the French word banlieue comes from lieu, meaning “place,” and bannir, “to banish”; hence “place of banishment.”)
A lot of these residues know that now work is contingent life itself is contingent. And with little security, there’s little to lose, and, moreover, little to gain from playing by capitalism’s rules. So what’s the point? There is no point. Some residues play by different rules, beat a different drum. Others listen to reactionary demagogues and swing right, embrace populist ravings against the machine. Many others voice muffled hopes from the left. All somehow know the capitalist game is rigged, that those in power are liars and cheats. Still more residues know that a career of hustling and hawking, of wheeling and dealing, of petty criminality, of opioids and outlawing, become coping mechanisms from the outside to a life that offers no discernible future on the inside.
One of the problems Marxists face—and I think Marx knew it might one day become a big problem—is that many residues have lost their class address. How can they regain it, find the right door bell to ring on together? How can workers who have no Party, no regular workplace or arena for collective bargaining—in fact who have no real public arena at all—how can they find one another? Perhaps the more vital question is how can the twenty-first century “dangerous classes” become really dangerous? How can they endanger the capitalist system rather than just endanger themselves?
Notes
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