What does Luxemburg mean by Non-capitalist Markets?

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What does Luxemburg mean by Non-capitalist Markets?
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I have been posting on the forum for some time about Luxemburg's market theory and i have pulled the various ideas and contributions into  a pamphlet entitled 'A Critique of Luxemburg's Theory of Accumulation'.  The following is an adaptation of one of the chapters which i think has something pertinent to say about the bases of her theory.

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We have all been in the habit of using the term pre-capitalist markets in relation to Luxemburg’s theory of accumulation, but the term she actually uses is non-capitalist. It sounds like these terms could mean the same thing but what? exactly what Luxemburg means by the term non-capitalist market?

Having repeatedly been told by Luxemburg that capitalists cannot purchase the means of expanding production, that only non-capitalist markets can do so and that this is the only way for accumulation to take place, it comes as a bit of a surprise to find that Luxemburg says at the start of Chapter 27 in ‘The Accumulation of Capital’ in a section on non-capitalist markets:

For all these purposes, forms of production based upon a natural economy are of no use to capital. In all social organisations where natural economy common ownership of the land, a feudal system of bondage or anything of this nature, economic organisation is essentially in response to the internal demand; and therefore there is no demand, or very little, for foreign goods, and also, as a rule, no surplus production, or at least no urgent need to dispose of surplus products. … Capitalism must therefore always and everywhere fight a battle of annihilation against every historical form of natural economy that it encounters, whether this is slave economy, feudalism, primitive communism, or patriarchal peasant economy. (Luxemburg 1913 The Accumulation of Capital Chapter 27)

This is a rather surprising and confusing statement that foresees a major problem in her explanations of how non-capitalist markets were taken over by capitalism (a process which will be addressed practically in Chapter 15). The whole section at the start of Luxemburg’s Chapter 27 is nevertheless extremely clear and well worth reading in that it differentiates what she calls natural economies from simple commodity and peasant economies.

From this it appears that when Luxemburg talks of non-capitalist markets she is not using the term very accurately. Apparently she does not mean “… slave economy, feudalism, primitive communism.…” (Luxemburg 1913 The Accumulation of Capital Chapter 27) which she clearly identifies as the natural economies that capitalism has no use for economically or politically.

She argues that these types of economies form rigid barriers of ownership and a fixed social status that prevent capitalism using them economically.

In detail, capital in its struggle against societies with a natural economy pursues the following ends:

(1) To gain immediate possession of important sources of productive forces such as land, game in primeval forests, minerals, precious stones and ores, products of exotic flora such as rubber, etc. the struggle against natural economy

(2) To ‘liberate’ labour power and to coerce it into service.

(3) To introduce a commodity economy.

4) To separate trade and agriculture. ( Luxemburg 1913 The Accumulation of Capital Chapter 27 )

Capitalism uses political, military and economic force to break up natural economies and establish economic forms that it can use ie simple commodity and peasant economies. Whilst she does not attempt precise definitions of these terms it is clear that she is discussing economies of independent small farmers (including presumably patriarchal peasant economy) and craftspeople who purchase goods and sell products and surplus to ensure they are able to function.

Natural economy, the production for personal needs and the close connection between industry and agriculture must be ousted and a simple commodity economy substituted for them. Capitalism needs the medium of commodity production for its development, as a market for its surplus value. But as soon as simple commodity production has superseded natural economy, capital must turn against it. No sooner has capital called in to life, than the two must compete for means of production, labour power, and markets. The first aim of capitalism is to isolate the producer, to sever the community ties which protect him, and the next task is to take the means of production away from the small manufacturer. (Marx 1887 Capital Volume 1 Chapter 26 )

Hence what Luxemburg describes as essential to accumulation and the realisation of capital are not the natural economies but in fact economic conditions that capitalism itself has already ‘called into life’.

Consequently, it must be suggested that these newly created forms are not really non-capitalist after all, but are in fact proto-capitalist economies. Certainly the actions Luxemburg identifies in the quote above do indeed break up actual non-capitalist markets but what is being created is surely then an early stage of the capitalist economy. Indeed the description of these proto-capitalist forms corresponds very much to what Marx called primitive accumulation.

The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalised the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief momenta of primitive accumulation. On their heels treads the commercial war of the European nations, with the globe for a theatre. (Marx 1887 Capital Volume 1 Chapter 31)

Perhaps the closest Luxemburg comes to defining these new forms of economy is in this quote:

Their means of production and their labour power no less than their demand for surplus products is necessary to capitalism. Yet the latter is fully determined to undermine their independence as social units, in order to gain possession of their means of production and labour power and to convert them into commodity buyers. (Luxemburg 1913 The Accumulation of Capital Chapter 27)

This confusion in terminology that Luxemburg has created, is still leading to problems today when addressing the economies that exist in places like China India, Africa and Southern America (see forum thread on India and China)

However if we accept that Luxemburg used the terminology incorrectly and what she was referring to was the early developments of capitalist markets, then all she way theorising was that capitalism needs capitalist markets to accumulate, and this means the elimination of any need for Luxemburg’s theory.

d-man
(Again wrt forum-quality, I

(Again wrt forum-quality, I prefer that if there already exist a thread on a topic, that no multiple/new threads are started).

The point you raise does not reflect on Luxemburg's own incorrect use of terms. She's clear, that simple commodity production differs from natural economy. Your point is, that simple commodity production is proto-capitalist, and thus capitalist (in your view). You don't differentiate a simple commodity economy from a capitalist commodity economy, as I already noted:

Link: "could you also explain why peasants are non-capitalist for me please and why is simple commodity production non capitalist?"  (post no. 3 on an existing thread)

Me: Peasantry (or independent artisanry) is not capitalist, ie simple commodity production is not capitalist, given that it doesn't involve the purchase of labour power and mostly just breaks-even (no extendend reproduction)

The existence of simple commodity production is older than the immediate pre-capitalist era. There were artisans and peasants who sold their product on the market in eg ancient Near East, in Greece or Rome. Those economies were mixed modes of production, where simple commodity production co-existed with others. Likewise, simple commodity production can co-exist with capitalist commodity production.

On the old thread, your reply was to quickly concede my point (and shift goal-post):

Link wrote:
i do think we are on the same page here but i can also see how i have confused things a bit eg in the quote you used in yr first contribution on this thread.  My interpretation of this definition though is that is supports my view that the peasantry and artisan workers are just not able to act as markets for capitalism's production of new constant capital and higher technological production equipment.  Its just not possible

The point you're now here making (that simple commodity production is already capitalist) could be discussed, but here it's just terminological game with nothing at stake, because even if we label it proto-capitalist (instead of non-capitalist or simple commodity), the disagreement will remain whether such "proto-capitalist" markets constitute a "demand sufficient for capitalist accumulation" (or whathever). Your position would be, that such proto-capitalist markets are not needed. If one rejects Luxemburg's theory, then primitive dispossession/accumulation, or the break-up of the non-capitalist market, would anyway still not be sufficient (demand or whatever) for capitalist accumulation to take place.

 

Link
I think you misunderstood my point about accumulation dman

"The point you're now here making (that simple commodity production is already capitalist) could be discussed, but here it's just terminological game with nothing at stake, because even if we label it proto-capitalist (instead of non-capitalist or simple commodity), the disagreement will remain whether such "proto-capitalist" markets constitute a "demand sufficient for capitalist accumulation" (or whathever). Your position would be, that such proto-capitalist markets are not needed. If one rejects Luxemburg's theory, then primitive dispossession/accumulation, or the break-up of the non-capitalist market, would anyway still not be sufficient (demand or whatever) for capitalist accumulation to take place."

I think you misunderstood my point about accumulation dman. The point i am making is that luxemburg’s theory of accumulation is based on the idea that accumulation is absolutely dependant on non-capitalist markets.  So, if it is accepted that what she was wrong in her use of the term and what she actually meant by non-capitalist is early capitalist markets, then all she is saying is that accumulation depends on capitalism markets! That is Marx's theory and as i say it eliminates the need for any theory about third buyers.

This is not just about a terminological game as you call it but a misinterpretation of conditions. Of course they are too small to provide a demand for the latest equipments and technologies but that does not mean this stage was not important. As I said Marx called it primitive accumulation. The rejection of her theory means recognising the demand for the latest manufacturing equipment does not come from primitive accumulation at all. It is simply part of the growth of capitalism generally.

If you read her material on the process of conversion of America etc into capitalist economies (chapters 27-30 in Accumulation of capital), you will see that even she describes these markets as not being markets for enhanced capital equipment and that any large manufacturing equipment that was sold to these markets were bought by capitalist entrepreneurs and the state itself not small enterprises. Her explanations do also show that what happens is a slow process of converting early capitalist economies into full capitalist economies by the use of force, laws, ensuring dependence on markets for all subsistence and equipment and of course the growth of small businesses into large scale producers. The insertion of money, wages, employers and markets gradually expands to form developed capitalist economies. So yes I am saying at an early stage these small businesses were too small to afford the latest equipment but they were important as the basis for and to the development of larger scale enterprises.

As far as your point about peasants and artisans goes, I am not convinced.  Peasants and artisans were not the same as the serfs or craft workers in feudal society.  All land belonged to the king as did the craft products. They worked for the local estates and paid tithes and in the towns they worked for the guilds.  In slave society, there were slaves and slave owners.  In both Greece and Roman societies, the large landowners were slave owners but even small farmers used slaves. Artisans could be slaves but also Independent artisans were became slave holders. In both societies it was primarily surpluses that were sold as far as I can see (apart of course from slave markets). Slave holders owned the surpluses produced and they were sold on behalf of the household.

These were the main structures but i am quite happy to  believe there were exceptions (remnants of previous structures always continue to exist) and variations across the globe,  i would think that it is towards the end of each society that changes start to take place representing new means of production.  The roman empire fell apart for example because it could no longer control the enormous territories it had held and this must have opened up land and towns to more independence initially anyway. My own region, Birmingham and the Black Country, became a hotbed of craftsmen, small businesses, radical religions etc because it was the place where those who wanted to escape feudal controls went and on this basis the region became key are in the development of industrialisation, enterprise and capitalism.  It was however an outlaw region to the feudal ruling class. 

Having said all this, I would be interested if you have any reading to recommend on small scale producers and the use of money and markets in these societies

 

d-man
[quote=Link]So, if it is

Link wrote:
So, if it is accepted that what she was wrong in her use of the term and what she actually meant by non-capitalist is early capitalist markets, then all she is saying is that accumulation depends on capitalism markets!

No, what she would be just saying then is, that accumulation depends on "early-capitalist" markets, as distinct from mature-capitalist markets. And your dispute with her would still exist, namely you would dispute that accumulation depends on (or requires) "early-capitalist" markets, and maintain that demand (for large equipment) can only come from the "mature" capitalist market.

 

 

 

 

Link
If you read the chapters of

If you read the chapters of Accumulation of Capital that I suggested you will see that Luxemburg says feudal and slave society are of no use to capitalism and that capitalism has to get rid of them and then implement peasant and artisan economies which are themselves then also got ride of through growth, take overs and legal shenanigins etc in order to develop larger scale capitalist structures.  If they are developed by capitalism however does that not mean they are part of capitalist markets not pre-capitalist markets?

And your dispute with her would still exist, namely you would dispute that accumulation depends on (or requires) "early-capitalist" markets, and maintain that demand (for large equipment) can only come from the "mature" capitalist market.

Correct, this is obviously true; even small artisans and small landowners do not buy plastic injection machines, trains, ships. Genetics labs, digital telephone exchanges and so on and so forth. Today they buy cheap transport, tractors, lathes, storage facilities and so on and so forth (but not in bulk) and in the early days of capitalism they made their own using raw materials that they bought locally (ie until local firms began to make them in small numbers for the local market).

I have just been reading Howard Zinn on the early days in America and it is quite clear that the original inhabitants had their own society based around agriculture or hunting and only bartered for capitalist consumers goods. The early capitalist markets here were set up by settlers who brought money, production skills and a market system and developed from small scale enterprises into a large scale capitalist society.

If Luxemburg said that “accumulation depends on "early-capitalist" markets, as distinct from mature-capitalist markets”, she would not have said that capitalists cannot sell to capitalists nor that third buyers in non capitalist markets were essential for accumulation to take place.

d-man
[ quote]If they are developed

Link wrote:
If they are developed by capitalism however does that not mean they are part of capitalist markets not pre-capitalist markets?

In the sense that everything dating after the appearance of capitalist No. 1 can no longer count as "pre-capitalist". But it still can count as "non-capitalist". There can also be in time a mere correlation between the growth of capitalism and the creation/growth of non-capitalist sectors, but not yet a causation/dependence.

d-man
On markets in 11-12th century

On markets in 11-12th century Song-era China: The Chinese Market Economy, 1000–1500 (2015), William Guanglin Liu.

Haven't read it, but from an interview it sounds like Liu admits that farmers had rural market hubs and markets on a county level (transport via small canals).

Might be similar to farmers in 13-14th century Prussia under the Teutonic Knights in terms of extent of monetisation/marketisation.

d-man
On markets in 11-12th century

dp