Continuing my ‘history of the world’ blog cycle (a fully referenced version of the segment below is available here):
The stage is now set for the next scene in our whistle-stop tour – the emergence of capitalism. But first a quick aside. Enmeshed in a contemporary global capitalist economy as we are, it’s easy to read it back into history as some kind of inevitable culmination of past processes. But there’s no reason to think that our present was foreordained. There’s nothing wrong, I’d argue, with tracing the lineages of modern societies back into the past, as I’ve largely been doing here – so long as we don’t fall into the trap of presuming that those lineages were determined, rather than contingent. Another issue when we come to talk about the ‘global’ capitalist economy is the tendency to hero-worship those parts of the world most to the fore in driving the globalisation – particularly if we’re from those regions ourselves. Hence the question of why Europe or ‘the west’ dominated the development of the modern capitalist world system – perhaps a necessary question, but one that’s overstressed in western thought. Doubtless this is a failing of the history I’ve been serving up here. I’m inclined to justify it on the basis that, well, I’m European, and my main interest is in using some history to help elucidate where my own society might go from here. But when it comes to telling the story of how capitalism came to take over the world, I want to remind myself to proceed with caution and keep my ‘Eurocentrism’ in view. I’ll return to this point shortly.
With apologies duly made let’s get back to my European stamping grounds where the medieval figures of the king, the lord, the merchant and the peasant are waiting to see how I’m going to turn them into capitalists. I suppose first of all I need to define capitalism – a quick definition might be that capitalism is an economic system which compels the owners of capital to reinvest their surplus in order to create more capital, typically earning a 2-3% additional return per annum historically. Doubtless it’s tempting to respond by asking firstly if the owners of capital don’t use it to try to create more capital in every economic system, and secondly if a mere 2-3% return is enough to result in all the profound changes worked upon the modern world that both capitalism’s admirers and its critics allege. To which the short answers are respectively no they don’t and yes it is. A slightly longer answer to the first question is that people throughout the ages have often dreamed of worldly wealth, but not necessarily of limitlessly compounding worldly wealth, and their societies in any case contained ideologically influential critiques of that dream, which limited its reach. Only with the rise of secular priests like Bernard Mandeville and Adam Smith was money-making made a transcendent social virtue (and even Smith was pretty torn on that point). A slightly longer answer to the second point is that, over time, the logic of compound growth is such that a 2% return on investment is quite enough to turn mountains into dust, turn peasant cultivators into either slaves or CEOs, and possibly to turn the entire planet into an uninhabitable waste dump.
Let me now offer a lengthier definition of capitalism which is largely paraphrased from the writings of Wolfgang Streeck: capitalism is a ‘progressive’ society (…‘progressive’ in the sense that it aims for limitless growth of economic productivity and prosperity) that secures its collective reproduction as an unintended side-effect of individually rational, competitive profit maximization in pursuit of capital accumulation, and that puts this accumulated capital in the hands of a small minority with the legal privilege through rights of private property to dispose of it as they see fit, though this minority enjoys no other juridical privilege over other members – all are equal before the law.
Not all of the capitalist society so defined would seem strange to a medieval mind – not the private property and not the inequality, though a practical inequality squared with a formal equality might. But most of it would probably seem very strange indeed. So how, in the last half-millennium, did the king, lord, merchant and peasant of the absolutist age become the capitalist, the worker and the government official?
Needless to say, there are numerous explanations whose complexities I can barely touch on here. For simplicity’s sake, I’d suggest that most explanations tend to emphasise the role of one or another of those four medieval types (I suppose I should also nod to a fifth one, the priest, especially in the guise of an ascetic protestant renouncer).
In Robert Brenner’s influential analysis, the key figure was the lord, in England above all, where landowners further pressed the logic of medieval tenures commuted into short-term monetary leases in the context of the feudal crisis, creating pressures towards an income-maximising capitalist agriculture. The flipside of this ‘history from above’ is a ‘history from below’ which tells of the way that the rural poor were stripped of their access to land through the enclosure of the commons, turning them into a landless or near landless mass of rural labourers obliged to work for wages on the increasingly capitalist farm. But the structure of farming in early modern England is often called ‘triadic’ – the third figure in addition to the landlord and the wage labourer is variously called the ‘farmer’, ‘tenant’, ‘yeoman’ or rich peasant, and much contemporary historical writing emphasises their role in changing the nature of agriculture. Marxist orthodoxy sees this class as the newly emerging capitalist ‘bourgeoisie’, escaping from its peasant roots to contest for power with the fading feudal nobility at the expense of a poorer peasantry on its way to becoming a landless proletariat. But when you look at detailed historical studies, it becomes harder to divide people neatly into three distinct classes in this way. The historical record is full of peasants enclosing their own commons, landlords allying with peasants, yeomen allying with or becoming lords, tenants who were also landlords and so on. What seems to have happened in England is that a landowning class “unusually civilian in background, commercial in occupation and commoner in rank” interacted with a land-husbanding or peasant class that didn’t unite against it as a peasantry but became interdigitated with it in endlessly complex ways at the local level. In leftist and alternative farming circles I often hear people say that the ‘landowners’ took the land from the ‘peasants’, and there’s some truth in it. But it’s also true that peasants took the land from each other, and from themselves.
The result in early modern England was the demise of any kind of peasant ‘moral economy’ by the mid-17th century, a slow overturning of legislation limiting middlemen and national market integration and the spread of a larger-scale, fully commercial agriculture better able to ride market price fluctuations – one that made the feeding of the nation indeed an ‘unintended side effect’ of profit maximization in Streeck’s terms. As I’ll detail in a later post, there are in fact circumstances when a smaller-scale agriculture is better able to ride market price fluctuations – essentially when it’s primarily subsistence-oriented – but in early modern England the situation was otherwise. In some respects, the emergence of the triadic structure and of large commercial farms in England represented a crisis for the absolutist state, but the state quickly adjusted, turning itself into an aggressive fiscal-military unit with strong protectionist policies – not the only western capitalist power to build its initial economic strength through economic protectionism.
So much for the agricultural side of capitalist development in England. Another angle focuses on the merchant, and finds the key to capitalist development in his (I’d guess it was usually a ‘his’) transformation from the hated usurer of the middle ages to the heroically world-creating entrepreneur of modern times. Here, perhaps it’s worth distinguishing between the merchant capitalism that created domestic markets in England and other early capitalist powers, and the merchant capitalism of international commerce. Starting with the first, the question is how did the relatively static wealth of the medieval merchant become the vastly transformative liquid capital of a later era? Medieval merchants could be wealthy enough, to be sure – essentially by taking advantage of fragmented markets and poor transport links to pursue the age-old middleman strategy of buying cheap and selling dear in relation mostly to luxury goods. They received both grudging support from the chronically cash-strapped royal houses of the middle ages, as well as frequent repression because of the obvious political threat they posed, and the spiritual threat to Christian ideology around usury (there is, of course, a story to be told here about the oppression of Jews throughout European history). But the accumulation of merchant capital in the middle ages wasn’t central to the ‘collective reproduction’ of society in the way that the accumulation of capital was later to be, because it operated only at the margins of a society in which reproduction was based fundamentally on access to land and its productive potential. Even the physiocrats who, clustering around François Quesnay (1694-1774), arguably constituted the first systematic school of modern economic thought, considered land to be uniquely productive of value, and other forms of economic activity such as manufactures or commerce to be sterile. It was only when the ‘fictitious commodities’ of land, human labour and money were fully marketised that merchant capital could take centre stage as capital, meeting with the capitalist transformation of agriculture in a new economic settlement where agriculture, commerce and industry conjointly reproduced society as Streeck’s ‘unintended side-effect’ of profit maximization.
So part of that new settlement involved the rise of domestic manufacturing and commerce. The growth of manufacturing implies the growth of a market on the demand side for the sector’s products. The dark story to tell here is of an expropriated peasantry, turfed off the land, now forced to purchase the necessities of life from capitalist markets. But there are brighter stories, such as the one associated with the historian Jan De Vries, who raises the idea of an ‘industrious revolution’ in which ordinary households rationally chose to devote themselves to wage labour rather than agrarian subsistence, finding it easier that way to secure their subsistence – and, more than their subsistence, a hitherto unimaginable array of consumer goods besides. Of course, in the late 18th and early 19th centuries – in England above all, but not only in England – the industrious revolution became the industrial revolution, when human industrial labour combined with steam power to create consumer societies in the modern mould. Again, some historians tell a dark story of the industrial revolution as a catastrophe for working people, while others tell a brighter tale, a virtuous circle of rising productivity and rising wages. It seems clear that there was little nostalgia for agrarian life in the England of the industrial revolution era among working-class people, but by then the countryside had long been transformed into an arena of capitalist agriculture, so the choice was mostly about what kind of capitalist wage labour was preferable. There’s no doubt that some people (including some working-class people, particularly adult men) benefitted from industrialisation, but I’m not sure that anyone can easily draw up the balance sheet.
To draw up that sheet, you’d have to reckon with something that’s haunted capitalist economies since the industrial revolution – the substitution of human labour by machine labour, which is typically faster, cheaper and less prone to labour disputes. Fellow farmers who own an aged tractor like me might question that last point, but there are those who argue that labour discipline rather than ‘efficiency’ has always been a key to the introduction of new technologies. I for one find this a more plausible tack than orthodox economic theory’s assumption that redundant labour will fit smoothly into another economic niche. The problem of a jobless economy increasingly exercises contemporary economic minds – particularly since automation is now diminishing white collar jobs such as law, medicine and architecture, thereby undermining the old argument that education or social ‘improvement’ is the way to get ahead in the face of a tightening unskilled job market. Indeed, technology nowadays is pushing at the boundaries of what it means to ‘discipline’ human minds or bodies, and posing troublesome questions about the very nature of being human. How that story unfolds will surely be conditioned by global energy futures as well as climate change, though debates on automation and energy seem curiously disconnected. I’d argue that this story isn’t unilineal – a more energy-constrained future won’t necessarily look like a more energy-constrained past. But perhaps that’s better framed as a historical question implicit to this essay: to what extent does energy (and, for that matter, climate) determine social forms?