Tuesday, November 28, 2006
Notes from our discussion on pages 250-266
From money to capital
Reprise
In the Introduction, Marx has discussed method; in the essay on Bastiat and Carey, he has sketched in polemical form his focus on identifying the real subversive, creative impulses within capitalist development; in pages 115-172, he has started his substantive economic discussion by criticising the Proudhonists and showing that any serious critique of capital must also be a critique of the basic social relations involved in exchange-value.
He then moves on to start that critique. Pages 172 to 250 are a draft, or notes, for chapters 1 to 3 of Capital, covering commodities, exchange, and money.
In pages 250-266 Marx moves on from money to capital, the terrain of chapter 4 of Capital.
Capital
Marx rejects the conventional definition of capital as "accumulated labour" or "objectified labour". "The catch is that if all capital is objectified labour which serves as means for new production, it is not the case that all objectified labour which serves as means for new production is capital. Capital is conceived as a thing, not as a relation..." [p.258]
"To develop the concept of capital", he continues, "it is necessary to begin not with labour but with value, and, precisely, with exchange value in an already developed movement of circulation. It is just as impossible to make the transition directly from labour to capital as it is to go from the different human races directly to the banker, or from nature to the steam engine". [p.259].
This makes it clear that in the opening chapters of Capital, Marx is not developing some sort of historical exposition - simple commodity production in chapter 3, moving on to capitalist production in chapter 4, or something of that short. When he starts off with the commodity, he starts off with the commodity as it appears in "those societies in which the capitalist mode of production prevails", as he explains in the opening sentence of chapter 1.
We cannot understand capital just by deducing it from labour - as, say, "accumulated labour", or "objectified labour" - argues Marx. We have to understand it in relation to the particular form of labour existing in a society with "already developed" domination of exchange-value.
Marx arrives at the following explanation of capital: "Money (as returned to itself from circulation), as capital, has lost its rigidity, and from a tangible thing has become a process. But at the same time, labour has changed its relation to its objectivity; it, too, has returned to itself. But the nature of the return is this, that the labour objectified in the exchange value posits living labour as a means of reproducing it, whereas, originally, exchange value appeared merely as a product of labour. Exchange value emerging from circulation, a presupposition of circulation, preserving and multiplying itself in it by means of labour". [p.263-4].
In Capital, he will be much more terse, discussing the circuit M-C-M+ and its difference from C-M-C, and concluding: "Value therefore now becomes value in process, money in process, and, as such, capital". [Capital, chapter 4].
From pre-capitalist money-economy to capitalism
Marx makes many comments relevant to, but leaves open the answers to, a big question raised by his discussion: the threshhold at which an economy using money steps over into the "general" development of value and "a mode of production founded on capital".
In some places Marx seems to suggest that the gradual influence of increasing trade can change a society bit by bit from pre-capitalist to capitalist. Thus, for example, on page 257 he seems to credit the influence of Netherlands trade in the 16th century with a decisive role in the capitalist transformation of England. He makes a qualification - "the degree to which the movement towards the establishment of exchange-value then attacks the whole of production depends... on the degree of development attained by the elements of domestic production" - but does not expand on it.
Elsewhere he seems emphatic that a certain degree of development of industrial productivity is a precondition for the transition to capitalism. Mere changes of form in the distribution of products - an increasing role for market exchange - will not be sufficient. "Production resting on capital and wage labour differs from other modes of production not merely formally, but equally presupposes a total revolution and development of material production..." [p.277]. "The relation of production... becomes real only with the development of a particular material mode of production and of a particular stage in the development of the industrial productive forces". [p.296-7].
It is hard to see how these two different strands of thought - the impulse from trade, and the impulse from technology - mesh together. Worse, both are too "disembodied", too abstracted from specific class interests and processes of class struggle, to be an adequate account of social transformation. And both sit at some distance from the defining idea stated emphatically by Marx in Capital chapter 6 (and elsewhere): "The essential difference between the various economic forms of society, between, for instance, a society based on slave-labour, and one based on wage-labour, lies only in the mode in which this surplus-labour is in each case extracted from the actual producer, the labourer". Even more emphatically: "The historical conditions of its existence are by no means given with the mere circulation of money and commodities. It can spring into life only when the owner of the means of production and subsistence meets in the market with the free labourer selling his labour-power. And this one historical condition comprises a world’s history. Capital, therefore, announces from its first appearance a new epoch in the process of social production".
Returning to this issue in the last section of Capital, Marx ties the ideas together much more clearly. "The historical movement which changes the producers into wage-workers, appears, on the one hand, as their emancipation from serfdom and from the fetters of the guilds, and this side alone exists for our bourgeois historians. But, on the other hand, these new freedmen became sellers of themselves only after they had been robbed of all their own means of production, and of all the guarantees of existence afforded by the old feudal arrangements. And the history of this, their expropriation, is written in the annals of mankind in letters of blood and fire.
"The industrial capitalists, these new potentates, had on their part not only to displace the guild masters of handicrafts, but also the feudal lords, the possessors of the sources of wealth. In this respect, their conquest of social power appears as the fruit of a victorious struggle... against feudal lordship.." - but simultaneously they waged a struggle to reduce the workers to wage labour. [chapter 26].
Even then, Marx nowhere says anything much about the role of the bourgeois revolution in England in this process. In Capital he notes that the process "in different countries, assumes different aspects, and runs through its various phases in different orders of succession, and at different periods. In England alone, which we take as our example, has it the classic form"; but, the problem is, in most countries of the world the process has had forms so radically different from the "classic" English one that they cannot be understood as slight variations on it.
Three questions
Maybe the later sections of the Grundrisse, on pre-capitalist economic formations, will offer more light on this question.
For the present, we can sketch out three questions.
1. In England, there was an "agricultural revolution" - a big increase in productivity, and a shift to capitalist relations - on the land before the industrial revolution. Marx tacitly takes that as the norm of capitalist development. But in most countries of the world, capitalist development has not happened that way. It has taken root, often in the form of large-scale modern enterprises, in the cities, the ports, the mines, and the plantations, with much of the countryside left in pre-capitalist relations and being transformed only tardily.
Tsarist Russia is a classic example. In such countries, the workers are not only forced off the land by destruction of the "guarantees of existence afforded by the old feudal arrangements" (though that happens, too), but also, and maybe more extensively, positively pulled into the cities by the chances of participating even in some marginal way in advanced bourgeois civilisation. What you get of advanced bourgeois civilisation living in a shanty-town in Sao Paulo, and relying on odd jobs, petty trading, or petty theft, is meagre. But it can still exert an attractive pull on the rural poor. Rather than developing capitalistically, agriculture may in fact wither and collapse as capitalist industry grows. Iraq is a prime example of that.
So, to summarise: a society where the most dynamic element, in the big cities, comprises more or less modern industrial capitalism, but where the majority of the population lives in a hinterland dominated by pre-capitalist and semi-capitalist relations - is it capitalist? Plainly the odd capitalistically-run mine or plantation set up within a pre-capitalist society does not make the whole society instantly capitalist. But, as that capitalist enclave expands - to create railways, ports, cities, ancillary manufacturing industries, and so on - it can become not an enclave but decisive. At what point?
2. At least for England - and Marx evidently considered the history in England "classic" enough to set the template for all other countries - Marx suggests that the influence of external trade can be decisive in pushing a society over the threshhold into capitalism.
Such a view would give direct support to a view that would be influential later, in the 1960s and 1970s, about capitalist development in Latin America.
The official Communist Party doctrine had been that the countries of Latin America were still "feudal" (and so the next stage was an alliance with "patriotic" capitalist interests to carry through a "bourgeois revolution", to be followed only in the remote future by a second socialist "stage").
In polemic against that view, Andre Gunder Frank wrote a book, Capitalism and Underdevelopment in Latin America, which argued that Latin America had been capitalist ever since its integration into the world market by Spanish and Portuguese colonialism. Only, this was a peculiar form of capitalism, "the development of underdevelopment". Despite his furious hostility to the official Communist Parties, Frank was highly influenced by Stalinist modes of thinking, and particularly the Stalinist redefinition of socialism as developmentalism. (He got that from his teacher Paul Baran, a dissident non-CP Stalinist, and Baran's book The Political Economy of Growth). Frank's stated conclusion was that socialist revolution was the only way forward in Latin America, and indeed, not just the only way to liberation, but the only way to economic development. Paradoxically, this led him to the idea that any sort of vigorous economic nationalism in Latin America, however obviously bourgeois its proponents, could not but be somehow proto-socialist or crypto-socialist, and thus deserving of support.
In 1971, Ernesto Laclau wrote a polemic against Frank [New Left Review I/67, May-June 1971]. Laclau's case was that capitalism is a mode of production, not just a society of extensive trade. Capitalism in Latin America was indeed becoming dominant, but relatively recently. Large areas of hinterland remained dominated by pre-capitalist relations; one could very well reject the official CP's stageist strategy without denying that fact.
Whatever about Laclau's politics at the time (a sort of Maoism, as far as I can make out: see his article in New Left Review I/62, July-August 1970) or later (he has become a well-known "post-Marxist", i.e. a species of pretentious bourgeois liberal), and indeed whatever about the rather pompous and logic-chopping character of his article, it seems undeniable that he was essentially right against Frank. In other words, if Marx was right about the role of external trade in the English development - and was he? - the conclusion could not be extended to other countries.
In fact there are plenty of counter-examples. The Black Death of 1348-9 shook up society all across Europe, and sharpened conflict between lords and peasants. In England, at one extreme, the outcome was the abolition of serfdom. By the 15th century, only remnants of feudal relations remained on the land. In Eastern Europe the outcome was the exact opposite. Serfdom which had been gradually weakening was reimposed in fiercer form. As Engels put it, there was "a second serfdom after the middle of the fifteenth century... the general re-introduction of serfdom was one of the reasons why no industry could develop in Germany in the seventeenth and eighteenth centuries... In England at this stage migration to the territory outside the guild took place, but in Germany this was prevented by the transformation of the country people and the inhabitants of the agricultural market towns into serfs" [Letter to Marx, 15/12/1882].
This "second serfdom" was nailed down, and made a very lucrative business for the lords of Eastern Europe, precisely by the growth of international trade. Vast amounts of goods, extracted from the peasants of Eastern Europe by feudal exploitation, were exported via the Baltic to Western Europe.
In Capital, chapter 10 section 2, Marx recognised that involvement in capitalist international trade could actually reinforce and sharpen pre-capitalist relations of exploitation, rather than dissolving them in favour of more modern relations. "As soon as people, whose production still moves within the lower forms of slave-labour, corvée-labour, &c., are drawn into the whirlpool of an international market dominated by the capitalistic mode of production, the sale of their products for export becoming their principal interest, the civilised horrors of over-work are grafted on the barbaric horrors of slavery, serfdom, &c. Hence the negro labour in the Southern States of the American Union preserved something of a patriarchal character, so long as production was chiefly directed to immediate local consumption. But in proportion, as the export of cotton became of vital interest to these states, the over-working of the negro... became... a calculated and calculating system... So was it also with the corvée [feudal labour obligation], e.g., in the Danubian Principalities (now Rumania)".
Capitalist trade does not automatically or quickly generate capitalist relations of production wherever it touches. In Capital volume 3 Marx is at pains to emphasise that merchant capital could coexist with pre-capitalist modes of production for centuries. Moreover, even if proper capitalist production is established in some area, it does not necessarily spread like wildfire.
Marx, in Capital, identified the cities of northern Italy, in the 14th century, as the first site of capitalist production. But he noted that this capitalist development was soon set back - by the rise of the world market! "In Italy, where capitalistic production developed earliest, the dissolution of serfdom also took place earlier than elsewhere. The serf was emancipated in that country before he had acquired any prescriptive right to the soil. His emancipation at once transformed him into a free proletarian, who, moreover, found his master ready waiting for him in the towns, for the most part handed down as legacies from the Roman time. When the revolution of the world-market, about the end of the 15th century, annihilated Northern Italy’s commercial supremacy, a movement in the reverse direction set in. The labourers of the towns were driven en masse into the country, and gave an impulse, never before seen, to the petite culture, carried on in the form of gardening". [Chapter 26].
3. Marx identifies capitalism indiscriminately with a society where exchange-value dominates, and a society where wage-labour dominates. He bridges the gap by arguing that the domination of one must mean the domination of the other. For example, if exchange-value dominates, then the mass of the population have no direct access to the means of subsistence, but have to buy them for money. Since they do not own the means of subsistence, they can get that money only by selling what they do still own - their own labour-power.
On the very broadest scale this equation may work. But in actual history there is a lot of slippage.
Some societies may be more or less dominated by exchange-value while wage-labour is still secondary. In the countryside, the working population has some access to the land, but uses that more to grow cash-crops than to supply itself directly, and moreover every household depends on bits and pieces of paid labour for others as well as its own work on its own land. Paid labour takes place under a variety of relations, but rarely in straightforward capitalist forms. Some of it is tied into quasi-feudal relations of dependence, for example by "debt servitude". Some of it has more the character of an exchange of services between neighbours on not-very-different economic levels than of capitalist employment.
Conversely, take the Stalinist states. Some Marxists deny that wage-labour existed there at all. Leave that debate aside for a moment, and consider the debate among the large and diverse number who agree that wage-labour (in impure, distorted forms) did exist there. Many of them would still say that, because exchange-value did not dominate sufficiently there, the Stalinist states were not (state-)capitalist.
True, the workers were paid wages and had to buy their means of subsistence in the market, or rather in a variety of markets (official publicly-run markets; officially-licensed free markets; grey and black markets). Even if those markets were very far from a neo-classical economist's ideal, they were still markets. But for producer goods the role of the market was much smaller. There were grey markets operating between different enterprises, but to a large degree the enterprise's acquisition of consumer goods depended on government allocation rather than on straightforward purchasing-power. Therefore (they say) not capitalist. Some even argue that state capitalism, in contradistinction to competitive capitalism, is a contradiction in terms, because if the state dominates capital then exchange-value cannot dominate the distribution of producer goods.
Reprise
In the Introduction, Marx has discussed method; in the essay on Bastiat and Carey, he has sketched in polemical form his focus on identifying the real subversive, creative impulses within capitalist development; in pages 115-172, he has started his substantive economic discussion by criticising the Proudhonists and showing that any serious critique of capital must also be a critique of the basic social relations involved in exchange-value.
He then moves on to start that critique. Pages 172 to 250 are a draft, or notes, for chapters 1 to 3 of Capital, covering commodities, exchange, and money.
In pages 250-266 Marx moves on from money to capital, the terrain of chapter 4 of Capital.
Capital
Marx rejects the conventional definition of capital as "accumulated labour" or "objectified labour". "The catch is that if all capital is objectified labour which serves as means for new production, it is not the case that all objectified labour which serves as means for new production is capital. Capital is conceived as a thing, not as a relation..." [p.258]
"To develop the concept of capital", he continues, "it is necessary to begin not with labour but with value, and, precisely, with exchange value in an already developed movement of circulation. It is just as impossible to make the transition directly from labour to capital as it is to go from the different human races directly to the banker, or from nature to the steam engine". [p.259].
This makes it clear that in the opening chapters of Capital, Marx is not developing some sort of historical exposition - simple commodity production in chapter 3, moving on to capitalist production in chapter 4, or something of that short. When he starts off with the commodity, he starts off with the commodity as it appears in "those societies in which the capitalist mode of production prevails", as he explains in the opening sentence of chapter 1.
We cannot understand capital just by deducing it from labour - as, say, "accumulated labour", or "objectified labour" - argues Marx. We have to understand it in relation to the particular form of labour existing in a society with "already developed" domination of exchange-value.
Marx arrives at the following explanation of capital: "Money (as returned to itself from circulation), as capital, has lost its rigidity, and from a tangible thing has become a process. But at the same time, labour has changed its relation to its objectivity; it, too, has returned to itself. But the nature of the return is this, that the labour objectified in the exchange value posits living labour as a means of reproducing it, whereas, originally, exchange value appeared merely as a product of labour. Exchange value emerging from circulation, a presupposition of circulation, preserving and multiplying itself in it by means of labour". [p.263-4].
In Capital, he will be much more terse, discussing the circuit M-C-M+ and its difference from C-M-C, and concluding: "Value therefore now becomes value in process, money in process, and, as such, capital". [Capital, chapter 4].
From pre-capitalist money-economy to capitalism
Marx makes many comments relevant to, but leaves open the answers to, a big question raised by his discussion: the threshhold at which an economy using money steps over into the "general" development of value and "a mode of production founded on capital".
In some places Marx seems to suggest that the gradual influence of increasing trade can change a society bit by bit from pre-capitalist to capitalist. Thus, for example, on page 257 he seems to credit the influence of Netherlands trade in the 16th century with a decisive role in the capitalist transformation of England. He makes a qualification - "the degree to which the movement towards the establishment of exchange-value then attacks the whole of production depends... on the degree of development attained by the elements of domestic production" - but does not expand on it.
Elsewhere he seems emphatic that a certain degree of development of industrial productivity is a precondition for the transition to capitalism. Mere changes of form in the distribution of products - an increasing role for market exchange - will not be sufficient. "Production resting on capital and wage labour differs from other modes of production not merely formally, but equally presupposes a total revolution and development of material production..." [p.277]. "The relation of production... becomes real only with the development of a particular material mode of production and of a particular stage in the development of the industrial productive forces". [p.296-7].
It is hard to see how these two different strands of thought - the impulse from trade, and the impulse from technology - mesh together. Worse, both are too "disembodied", too abstracted from specific class interests and processes of class struggle, to be an adequate account of social transformation. And both sit at some distance from the defining idea stated emphatically by Marx in Capital chapter 6 (and elsewhere): "The essential difference between the various economic forms of society, between, for instance, a society based on slave-labour, and one based on wage-labour, lies only in the mode in which this surplus-labour is in each case extracted from the actual producer, the labourer". Even more emphatically: "The historical conditions of its existence are by no means given with the mere circulation of money and commodities. It can spring into life only when the owner of the means of production and subsistence meets in the market with the free labourer selling his labour-power. And this one historical condition comprises a world’s history. Capital, therefore, announces from its first appearance a new epoch in the process of social production".
Returning to this issue in the last section of Capital, Marx ties the ideas together much more clearly. "The historical movement which changes the producers into wage-workers, appears, on the one hand, as their emancipation from serfdom and from the fetters of the guilds, and this side alone exists for our bourgeois historians. But, on the other hand, these new freedmen became sellers of themselves only after they had been robbed of all their own means of production, and of all the guarantees of existence afforded by the old feudal arrangements. And the history of this, their expropriation, is written in the annals of mankind in letters of blood and fire.
"The industrial capitalists, these new potentates, had on their part not only to displace the guild masters of handicrafts, but also the feudal lords, the possessors of the sources of wealth. In this respect, their conquest of social power appears as the fruit of a victorious struggle... against feudal lordship.." - but simultaneously they waged a struggle to reduce the workers to wage labour. [chapter 26].
Even then, Marx nowhere says anything much about the role of the bourgeois revolution in England in this process. In Capital he notes that the process "in different countries, assumes different aspects, and runs through its various phases in different orders of succession, and at different periods. In England alone, which we take as our example, has it the classic form"; but, the problem is, in most countries of the world the process has had forms so radically different from the "classic" English one that they cannot be understood as slight variations on it.
Three questions
Maybe the later sections of the Grundrisse, on pre-capitalist economic formations, will offer more light on this question.
For the present, we can sketch out three questions.
1. In England, there was an "agricultural revolution" - a big increase in productivity, and a shift to capitalist relations - on the land before the industrial revolution. Marx tacitly takes that as the norm of capitalist development. But in most countries of the world, capitalist development has not happened that way. It has taken root, often in the form of large-scale modern enterprises, in the cities, the ports, the mines, and the plantations, with much of the countryside left in pre-capitalist relations and being transformed only tardily.
Tsarist Russia is a classic example. In such countries, the workers are not only forced off the land by destruction of the "guarantees of existence afforded by the old feudal arrangements" (though that happens, too), but also, and maybe more extensively, positively pulled into the cities by the chances of participating even in some marginal way in advanced bourgeois civilisation. What you get of advanced bourgeois civilisation living in a shanty-town in Sao Paulo, and relying on odd jobs, petty trading, or petty theft, is meagre. But it can still exert an attractive pull on the rural poor. Rather than developing capitalistically, agriculture may in fact wither and collapse as capitalist industry grows. Iraq is a prime example of that.
So, to summarise: a society where the most dynamic element, in the big cities, comprises more or less modern industrial capitalism, but where the majority of the population lives in a hinterland dominated by pre-capitalist and semi-capitalist relations - is it capitalist? Plainly the odd capitalistically-run mine or plantation set up within a pre-capitalist society does not make the whole society instantly capitalist. But, as that capitalist enclave expands - to create railways, ports, cities, ancillary manufacturing industries, and so on - it can become not an enclave but decisive. At what point?
2. At least for England - and Marx evidently considered the history in England "classic" enough to set the template for all other countries - Marx suggests that the influence of external trade can be decisive in pushing a society over the threshhold into capitalism.
Such a view would give direct support to a view that would be influential later, in the 1960s and 1970s, about capitalist development in Latin America.
The official Communist Party doctrine had been that the countries of Latin America were still "feudal" (and so the next stage was an alliance with "patriotic" capitalist interests to carry through a "bourgeois revolution", to be followed only in the remote future by a second socialist "stage").
In polemic against that view, Andre Gunder Frank wrote a book, Capitalism and Underdevelopment in Latin America, which argued that Latin America had been capitalist ever since its integration into the world market by Spanish and Portuguese colonialism. Only, this was a peculiar form of capitalism, "the development of underdevelopment". Despite his furious hostility to the official Communist Parties, Frank was highly influenced by Stalinist modes of thinking, and particularly the Stalinist redefinition of socialism as developmentalism. (He got that from his teacher Paul Baran, a dissident non-CP Stalinist, and Baran's book The Political Economy of Growth). Frank's stated conclusion was that socialist revolution was the only way forward in Latin America, and indeed, not just the only way to liberation, but the only way to economic development. Paradoxically, this led him to the idea that any sort of vigorous economic nationalism in Latin America, however obviously bourgeois its proponents, could not but be somehow proto-socialist or crypto-socialist, and thus deserving of support.
In 1971, Ernesto Laclau wrote a polemic against Frank [New Left Review I/67, May-June 1971]. Laclau's case was that capitalism is a mode of production, not just a society of extensive trade. Capitalism in Latin America was indeed becoming dominant, but relatively recently. Large areas of hinterland remained dominated by pre-capitalist relations; one could very well reject the official CP's stageist strategy without denying that fact.
Whatever about Laclau's politics at the time (a sort of Maoism, as far as I can make out: see his article in New Left Review I/62, July-August 1970) or later (he has become a well-known "post-Marxist", i.e. a species of pretentious bourgeois liberal), and indeed whatever about the rather pompous and logic-chopping character of his article, it seems undeniable that he was essentially right against Frank. In other words, if Marx was right about the role of external trade in the English development - and was he? - the conclusion could not be extended to other countries.
In fact there are plenty of counter-examples. The Black Death of 1348-9 shook up society all across Europe, and sharpened conflict between lords and peasants. In England, at one extreme, the outcome was the abolition of serfdom. By the 15th century, only remnants of feudal relations remained on the land. In Eastern Europe the outcome was the exact opposite. Serfdom which had been gradually weakening was reimposed in fiercer form. As Engels put it, there was "a second serfdom after the middle of the fifteenth century... the general re-introduction of serfdom was one of the reasons why no industry could develop in Germany in the seventeenth and eighteenth centuries... In England at this stage migration to the territory outside the guild took place, but in Germany this was prevented by the transformation of the country people and the inhabitants of the agricultural market towns into serfs" [Letter to Marx, 15/12/1882].
This "second serfdom" was nailed down, and made a very lucrative business for the lords of Eastern Europe, precisely by the growth of international trade. Vast amounts of goods, extracted from the peasants of Eastern Europe by feudal exploitation, were exported via the Baltic to Western Europe.
In Capital, chapter 10 section 2, Marx recognised that involvement in capitalist international trade could actually reinforce and sharpen pre-capitalist relations of exploitation, rather than dissolving them in favour of more modern relations. "As soon as people, whose production still moves within the lower forms of slave-labour, corvée-labour, &c., are drawn into the whirlpool of an international market dominated by the capitalistic mode of production, the sale of their products for export becoming their principal interest, the civilised horrors of over-work are grafted on the barbaric horrors of slavery, serfdom, &c. Hence the negro labour in the Southern States of the American Union preserved something of a patriarchal character, so long as production was chiefly directed to immediate local consumption. But in proportion, as the export of cotton became of vital interest to these states, the over-working of the negro... became... a calculated and calculating system... So was it also with the corvée [feudal labour obligation], e.g., in the Danubian Principalities (now Rumania)".
Capitalist trade does not automatically or quickly generate capitalist relations of production wherever it touches. In Capital volume 3 Marx is at pains to emphasise that merchant capital could coexist with pre-capitalist modes of production for centuries. Moreover, even if proper capitalist production is established in some area, it does not necessarily spread like wildfire.
Marx, in Capital, identified the cities of northern Italy, in the 14th century, as the first site of capitalist production. But he noted that this capitalist development was soon set back - by the rise of the world market! "In Italy, where capitalistic production developed earliest, the dissolution of serfdom also took place earlier than elsewhere. The serf was emancipated in that country before he had acquired any prescriptive right to the soil. His emancipation at once transformed him into a free proletarian, who, moreover, found his master ready waiting for him in the towns, for the most part handed down as legacies from the Roman time. When the revolution of the world-market, about the end of the 15th century, annihilated Northern Italy’s commercial supremacy, a movement in the reverse direction set in. The labourers of the towns were driven en masse into the country, and gave an impulse, never before seen, to the petite culture, carried on in the form of gardening". [Chapter 26].
3. Marx identifies capitalism indiscriminately with a society where exchange-value dominates, and a society where wage-labour dominates. He bridges the gap by arguing that the domination of one must mean the domination of the other. For example, if exchange-value dominates, then the mass of the population have no direct access to the means of subsistence, but have to buy them for money. Since they do not own the means of subsistence, they can get that money only by selling what they do still own - their own labour-power.
On the very broadest scale this equation may work. But in actual history there is a lot of slippage.
Some societies may be more or less dominated by exchange-value while wage-labour is still secondary. In the countryside, the working population has some access to the land, but uses that more to grow cash-crops than to supply itself directly, and moreover every household depends on bits and pieces of paid labour for others as well as its own work on its own land. Paid labour takes place under a variety of relations, but rarely in straightforward capitalist forms. Some of it is tied into quasi-feudal relations of dependence, for example by "debt servitude". Some of it has more the character of an exchange of services between neighbours on not-very-different economic levels than of capitalist employment.
Conversely, take the Stalinist states. Some Marxists deny that wage-labour existed there at all. Leave that debate aside for a moment, and consider the debate among the large and diverse number who agree that wage-labour (in impure, distorted forms) did exist there. Many of them would still say that, because exchange-value did not dominate sufficiently there, the Stalinist states were not (state-)capitalist.
True, the workers were paid wages and had to buy their means of subsistence in the market, or rather in a variety of markets (official publicly-run markets; officially-licensed free markets; grey and black markets). Even if those markets were very far from a neo-classical economist's ideal, they were still markets. But for producer goods the role of the market was much smaller. There were grey markets operating between different enterprises, but to a large degree the enterprise's acquisition of consumer goods depended on government allocation rather than on straightforward purchasing-power. Therefore (they say) not capitalist. Some even argue that state capitalism, in contradistinction to competitive capitalism, is a contradiction in terms, because if the state dominates capital then exchange-value cannot dominate the distribution of producer goods.
# posted by IWSG @ 15:01 
