Pre-Capitalist Markets

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mhou
Pre-Capitalist Markets
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Why is it that 'new worlds' and international trade routes had been known or pioneered generations (if not centuries) before capital sought to assimilate, subsume, etc. them? Whether through direct physical coercion (colonialism/imperialism) or economic coercion (capital being 'social inertia' that subsumes all other social relations and forms to its needs before breaking and re-forming them as strictly capitalist forms and relations)?

“As regards the opening up of new countries for the world economy, it seems to be quite obvious that this cannot be considered an outside factor which will satisfactorily explain the origin of long waves. The United States have been known for a relatively very long time; for some reason or other they begin to be entangled in the world economy on a major scale only from the middle of the nineteenth century. Likewise, the Argentine and Canada, Australia and New Zealand, were discovered long before the end of the nineteenth century, although they begin to be entwined in the world economy to a significant extent only with the coming of the 1890’s. It is perfectly clear historically that, in the capitalistic economic system, new regions are opened for commerce during those periods in which the desire of old countries for new markets and new sources of raw materials becomes more urgent than theretofore. It is equally apparent that the limits of this expansion of the world economy are determined by the degree of this urgency. If this be true, then the opening of new countries does not provoke the upswing of a long wave. On the contrary, the upswing makes the exploitation of new countries, new markets, and new sources of raw materials necessary and possible, in that it accelerates the pace of capitalistic economic development.” – Nikolai Kondratiev, ‘The Long Waves In Economic Life’ (1935) If markets/effective demand are the keys to capitalist enlarged reproduction, domination, etc. and the lackthereof are the source of its structural crisis with the onset of decadence, it seems odd that it took centuries for capitalism, despite existing knowledge and discoveries, to complete a truly integrated world market and assimilate pre-capitalist markets.

jk1921
mhou wrote: If

mhou wrote:

If markets/effective demand are the keys to capitalist enlarged reproduction, domination, etc. and the lackthereof are the source of its structural crisis with the onset of decadence, it seems odd that it took centuries for capitalism, despite existing knowledge and discoveries, to complete a truly integrated world market and assimilate pre-capitalist markets.

 

I am not sure I follow. How long should it have taken? Decades? Years?

There are a number of ways that capital "expanded" into non-captialist markets in accendance. This didn't just involve imperialism and colonialism. Even well into the nineteenth century--pre-captialist markets continued to exist within the "core" regions, mostly as a result of incomplete proletarianization. Part of expanding into pre-captialist markets involved a more thourough integration of these "internal markets."

There are two "logics" to captialist modernity: capital accumulation and state expansion. They are related, mutually condition one another, etc. but they aren't the same. This partly explains why the first states to expand beyond European borders--the Iberian ones--ended up mostly "underdeveloping" their colonial territories (with some exceptions) and bankrupting themselves in the process, rather than leaving developed, proletarianized nation states in their wake. So while Spain and Portugal were expanding overseas, they did so mostly to plunder. It took the UK and France another 100 to 150 years to get in on the act, but when they did, it was with a much more solidified home market and so the pace of development picked up considerably.

Still, there is some debate about just how to describe the "modes of production" in the New World, particularly where slavery and other forms of direct labour exploitation continued almost until the dawn of the twentieth century (and in fact well into it in parts of Africa and Asia). Did the slave economies in the New World act as a "pre-capitalist market"? What about the American North's yeoman farmers? To what extent was proletarianiation in the "core" (Northern Europe and the American North) conditioned upon the existence of these other forms of exploitation?

slothjabber
perhaps an extreme position

I absolutely agree with jk's characterisation - capitalism developed in Europe on the basis of massive 'non-capitalist' production (artisanal/peasant production of commodities), which is entirely in line with what Rosa says in 'The Accumulation of Capital'; it's not that capitalism took so long to complete the integration of 'pre-capitalist markets', it's that capitalism needs pre-capitalist markets to expand production. If it had done it faster, it would have reached the limits of its expansion faster.

I think the point about the New World is a good one. Though there were commodity markets and commodity production, much of it was not done by wage-labour but artisanal/peasant production. In Rosa's terms, these were 'pre-capitalist' forms, even if they were integrated into capitalist markets. Also, I suspect the relationship between production (and taxation) in the colonies and the control of the economies by the 'old world' metropoles was more like a feudal relationship; there is a certain amount of state monpoly control, and just tributary relationship, going on I think.

mhou
It just seems improbable;

It just seems improbable; first capital limits its geographic expansion to what became the centre, while usign the periphery as sources for raw materials and as markets for industrial products. But by 1850-1870, capital had already begun to subsume the majority of the domestic economies of the capitalist centre- yes, pre-capitalist forms persisted in Western Europe and Japan for decades after the real subsumption of labor had turned the central nations into societies dominated by the forms of a strictly capitalist social relationship, but I don't know that the remaining peasants in Germany, France, Italy, Spain, etc. made up anywhere near a substantial enough internal market to feed industrial development/enlarged reproduction on the scale it was developing by the 1890's-1930's. If peripheral markets became saturated by the turn of the century/WWI, further development of the productive forces in the centre (the transition to serial manufacture takes hold in that period) should not have been possible

MH
Not sure about this

mhou wrote:

Why is it that 'new worlds' and international trade routes had been known or pioneered generations (if not centuries) before capital sought to assimilate, subsume, etc. them? Whether through direct physical coercion (colonialism/imperialism) or economic coercion (capital being 'social inertia' that subsumes all other social relations and forms to its needs before breaking and re-forming them as strictly capitalist forms and relations)?

“As regards the opening up of new countries for the world economy, it seems to be quite obvious that this cannot be considered an outside factor which will satisfactorily explain the origin of long waves. The United States have been known for a relatively very long time; for some reason or other they begin to be entangled in the world economy on a major scale only from the middle of the nineteenth century…” Kondratiev)

Sorry, I’m a bit bemused both by mhou’s question and Kondratiev’s observation about the US, I just don’t recognise the picture being presented here as the starting point for a discussion.

mhou, is this about the difference between formal and real domination of capital maybe? But the exploitation of North America by the English mercantile bourgeoisie begins in late feudalism and is unmistakably capitalist from the very beginning, ie. through joint stock companies led by the City of London. I don’t see any significant delay in capitalism establishing itself here. And Marx is very clear that capitalism in America is dynamic from the beginning particularly because of the absence of pre-existing feudal social relations.

And surely even in the 18th century America is an integral part of a growing world market via the Atlantic ‘triangular’ trade with Britain and Africa? And by the eve of the 1776 revolution the colonies are producing about 15 per cent of world iron output and cotton production is not far behind Britain. This hardly suggests a slowness in capitalist assimilation…

As for Kondratiev’s idea that the US is not entangled in the world economy until the mid-19th century, this only makes sense to me as another way of describing the specificity of American capitalism that it expands ‘internally’ across the rest of the continent (California, Texas, etc), instead of having to embark on a colonialist policy abroad (this point is made by Jens in the debate on the post war boom in IR 136). But surely it’s still wrong to imply that this somehow means the US is not ‘entangled in the world economy’. Am I missing something here?

mhou
Quote:Sorry, I’m a bit

Quote:
Sorry, I’m a bit bemused both by mhou’s question and Kondratiev’s observation about the US, I just don’t recognise the picture being presented here as the starting point for a discussion.
 That's my fault, the Kondratiev article spawned a multitude of questions that I'm framing pretty poorly. My base question about a Luxemburg-esque analysis of capitalist development and crisis theory is: doesn't capitalism always have a demand-side problem, regardless of whether the markets that it has at its disposable (for individual national capital's or the central nations as a whole) are pre-capitalist or not? If the specifically pre-capitalist markets are the engine of development of the productive forces/productive capacities of the specifically capitalist mode of production, the timeline of its development seems quite prolonged for a finite amount of people and landmass on the planet while the productive forces perpetuate an exponential increase in the rate of exploitation and filling in the working day (Taylorism, application of science and new techniques to production, etc.) with every new cycle of enlarged reproduction. Especially considering how the central nations either accelerate development or enforce backwardness in the periphery at different times:  
Quote:
The second condition of importance for acquiring means of production and realising the surplus value is the commodity exchange and commodity economy should be introduced in societies based on natural economy as soon as their independence has been abrogated, or rather in the course of this disruptive process. Capital requires to buy the products of, and sell its commodities to, all non-capitalist strata and societies. Here at last we seem to find the beginnings of that ‘peace’ and ‘equality’, the do ut des, mutual interest, ‘peaceful competition’ and the ‘influences of civilisation’. For capital can indeed deprive alien social associations of their means of production by force, it can compel the workers to submit to capitalist exploitation, but it cannot force them to buy its commodities or to realise its surplus value. In districts where natural economy formerly prevailed, the introduction of means of transport – railways, navigation, canals – is vital for the spreading of commodity economy, a further hopeful sign. The triumphant march of commodity economy thus begins in most cases with magnificent constructions of modern transport, such as railway lines which cross primeval forests and tunnel through the mountains, telegraph wires which bridge the deserts, and ocean liners which call at the most outlying ports.
(Luxemburg, Accumulation of Capital, 'Introduction of the Commodity Economy').            
Quote:
But the exploitation of North America by the English mercantile bourgeoisie begins in late feudalism and is unmistakably capitalist from the very beginning, ie. through joint stock companies led by the City of London. I don’t see any significant delay in capitalism establishing itself here. And Marx is very clear that capitalism in America is dynamic from the beginning particularly because of the absence of pre-existing feudal social relations.
 Right- but the pace of development in other overseas colonies, South Africa, India, etc. are all uneven, with different high and low points and degrees of intensity of development. From the 'Manifesto of the Worker's Group of the RCP': "G.V. Plekhanov tells of a native African tribe that had it against the Europeans and considered abominable everything they did. The imitation of European manners, customs and ways of working was seen as a cardinal sin. But the same natives, who used stone axes, having seen the Europeans handle axes of steel, soon began to obtain the latter, despite chanting magic spells and hiding.

 

Certainly, for the peasant, all that the communists do and all that tastes of the commune is abominable. But we must force him to substitute the tractor for the plough, just like the natives substituted the steel axe for the stone. It is much easier for us to do this than for the Europeans in Africa."

 

If the pre-capitalist markets are solvent because there is a recognizable need for industrial products and all that accompanies it (the rail, telegraph, etc. Luxemburg mentions) by residents and leaders in the periphery or are forced from without by colonial/imperial powers of the capitalist centre, and these sales of industrial commodities are the basis of enlarged reproduction in the center, the rate at which a strictly capitalist society and productive regime dominates places like South Africa and India (both of which today still have pre-capitalist strata) seems off when contrasted to the size/scale of production in the UK, the US, Germany, etc. particularly from the 1850's-1914.

 

 

Quote:

And surely even in the 18th century America is an integral part of a growing world market via the Atlantic ‘triangular’ trade with Britain and Africa? And by the eve of the 1776 revolution the colonies are producing about 15 per cent of world iron output and cotton production is not far behind Britain. This hardly suggests a slowness in capitalist assimilation…

As for Kondratiev’s idea that the US is not entangled in the world economy until the mid-19th century, this only makes sense to me as another way of describing the specificity of American capitalism that it expands ‘internally’ across the rest of the continent (California, Texas, etc), instead of having to embark on a colonialist policy abroad (this point is made by Jens in the debate on the post war boom in IR 136). But surely it’s still wrong to imply that this somehow means the US is not ‘entangled in the world economy’. Am I missing something here?

 

I think he means its international conquests- Alaska, the territories taken from Spain in the Spanish-American War, etc.

 

 

jk1921
Hmm, I am still not clear

Hmm, I am still not clear what mhou's concern is. Is it just temporal, i.e. this seems like it should have happened faster or is there more of a doubt in the explanatory model of the "pre-capitalist markets" thesis. Trotsky used to talk about "combined and uneven development." Whatever the merits of the way he presented it, it seems clear that capitalist development is contingent upon a certain "underdevelopment" elsewhere in the global system, such that in some sense where sufficient pre-captialist markets (or "extra-capitalist," remembering the uprorar over terminology in a previous thread) didn't exist, it was necessary to create them.

But I am not sure that whatever pre-capitalist forms of labor exploitation exist in places like India, etc. today can be compared to what existed during ascendance. Its as if they are part and parcel of global capital--the indivisible remainder that captial was simply unable to shape completely in its own image, but which are not--strictu sensu--outside of the system. They are something like a permanent, giant reserve army of the unemployed or a pobretariat or something like that. They can't be the basis of expanded reproduction, because they do not have sufficient purchasing power.

slothjabber
Another partial defence of Luxemburg

jk1921 wrote:

... pre-captialist markets (or "extra-capitalist," remembering the uprorar over terminology in a previous thread) ...

 

There will be no uproar from me.

 

I began using 'extra-capitalist' because it seems to me that 'pre-capitalist' implies that there are regions or zones that are not part of capitalism and therefore that capitalism has not yet achieved the status of a worldwide system. 'extra-capitalist' I think is clearer because what Luxemburg is talking about, I think, is economic relationships which are outside of the 'capitalist relation' (that is, she's discussing production without wage labour). They don't necessarily precede capitalism (one of my neighbours - in Britain, the birthplace of the modern capitalist economy - bakes bread to sell; she did not do this in the 14th century, in fact she only started about 3 years ago; so it seems inaccurate to me to call this a 'pre-capitalist' economic arrangement). But there is no problem with the term 'pre-capitalist' if it is remembered that it's the form that pre-existed capitalism, rather than the examples of the use of that form or the economies of the zones where those economic forms take place.

 

 

jk1921 wrote:
...

But I am not sure that whatever pre-capitalist forms of labor exploitation exist in places like India, etc. today can be compared to what existed during ascendance. Its as if they are part and parcel of global capital--the indivisible remainder that captial was simply unable to shape completely in its own image, but which are not--strictu sensu--outside of the system. They are something like a permanent, giant reserve army of the unemployed or a pobretariat or something like that. They can't be the basis of expanded reproduction, because they do not have sufficient purchasing power.

 

I suspect that Rosa's mistake (I think we all agree she was wrong about something) was to underestimate the resilience of the extra-capitalist forms. Perhaps this is why she was content to label them 'pre-capitalist', as she saw them being replaced by capitalism in time, instead of capitalism spontaneously generating artisan production inside itself, which is what I think happens.

 

As to a question of sufficiency, the analogy of food to a developing child seems appropriate enough. Food can be either insufficient (the child dies), sufficient (the child thrives), or, crucially for this discussion, sufficient for the child to stay alive but not sufficient for it to thrive. My inkling is that the 'extra-capitalist markets' are enough to keep capitalism alive (contra Rosa's expectation), but not enough to keep it healthy.

 

 

jk1921
Interesting

slothjabber wrote:

I suspect that Rosa's mistake (I think we all agree she was wrong about something) was to underestimate the resilience of the extra-capitalist forms. Perhaps this is why she was content to label them 'pre-capitalist', as she saw them being replaced by capitalism in time, instead of capitalism spontaneously generating artisan production inside itself, which is what I think happens.

 

As to a question of sufficiency, the analogy of food to a developing child seems appropriate enough. Food can be either insufficient (the child dies), sufficient (the child thrives), or, crucially for this discussion, sufficient for the child to stay alive but not sufficient for it to thrive. My inkling is that the 'extra-capitalist markets' are enough to keep capitalism alive (contra Rosa's expectation), but not enough to keep it healthy.

Interesting take. One could argue that Marx himself was wrong on this. There was a failure to grasp how capitalist development in core regions actually produces or conditions underdevelopment elsehwere in the global system, such that proletarianization in the core actually contributed to the persistence of pre (extra) capitalist relationships in the periphery.

There was a tendency to consider this in the "dependency theory" school in the 60s and 70s and then in world system theory, but the rush of "globalization" since the mid 90s has mostly consigned these ideas to the intelletual periphery. But I think the point is a valid one: capitalist development involves more than a simple linear process of proletarianization turning the entire world into bourgeois and workers--but this doesn't make it any less "capitalist," when looking at it from a systemic perspective.

Even today, whatever proletarianization is happening in China and elsewhere is resulting in a "deconstruction," "reconstruction" (choose favorite buzzword) of the proletariat in the core. In some ways, the U.S. has been acting (through various debt related mechanisms) as a giant pre (extra) captialist market for Chinese production.

mhou
Quote:But I think the point

Quote:
But I think the point is a valid one: capitalist development involves more than a simple linear process of proletarianization turning the entire world into bourgeois and workers--but this doesn't make it any less "capitalist," when looking at it from a systemic perspective.

That's true. The quote from Luxemburg on how capital assimilates pre-capitalist markets (which necessarily involves developing specifically capitalist infrastructure and all that comes with), and Marx's description in the Manifesto of capital as the 'artillery' that breaks down economic backwardness suggests that integration, while not the simple linear process of turning everyone into bourgeois or proletarians definitively, does 'spoil' these once solvent markets with the conditions of modernity by this assimilation.

Quote:
Even today, whatever proletarianization is happening in China and elsewhere is resulting in a "deconstruction," "reconstruction" (choose favorite buzzword) of the proletariat in the core. In some ways, the U.S. has been acting (through various debt related mechanisms) as a giant pre (extra) captialist market for Chinese production.

Do you mean state debt or consumer debt (or both)?

Quote:
I began using 'extra-capitalist' because it seems to me that 'pre-capitalist' implies that there are regions or zones that are not part of capitalism and therefore that capitalism has not yet achieved the status of a worldwide system. 'extra-capitalist' I think is clearer because what Luxemburg is talking about, I think, is economic relationships which are outside of the 'capitalist relation' (that is, she's discussing production without wage labour). They don't necessarily precede capitalism (one of my neighbours - in Britain, the birthplace of the modern capitalist economy - bakes bread to sell; she did not do this in the 14th century, in fact she only started about 3 years ago; so it seems inaccurate to me to call this a 'pre-capitalist' economic arrangement). But there is no problem with the term 'pre-capitalist' if it is remembered that it's the form that pre-existed capitalism, rather than the examples of the use of that form or the economies of the zones where those economic forms take place.

Isn't that a significant difference though? . Marx writes about the competition between struggling capitalists and the nature of going bust, that at the expense of one bourgeois another can recuperate their capital/MoP/commodities and grow. The capitalist petit-bourgeoisie seems a more likely perpetual market for the production of Dept. I & II (like the artisan baker), an internal market that is constantly shifting as capitalists lose everything, other capitalists gain at their expense, bourgeoning petit-bourgeoisie rising and falling to and from the proletariat-bourgeoisie.

Luxemburg's descriptions of capital penetrating the periphery, developing capitalist infrastructure and industrial conditions in what were regions dominated by the forms of pre-capitalism as an example of a condition for the realization of surplus value (of capitalist industry in the centre) suggests she is not talking about the internal capitalist petit-bourgeoisie of the central nations, but specifically the underdeveloped periphery, even if the pre-capitalist forms dominant in the periphery are already formally subsumed by capital.

"Capital requires to buy the products of, and sell its commodities to, all non-capitalist strata and societies."

I don't know whether she means, literally, all classes and strata that are not the bourgeoisie, but I'd guess she means strata/societies that are not dominated by advanced capitalism.

The rapid assimilation of internal markets and accelerated internal development after the international tendency to state capitalism in Russia and China makes sense in this schema, but the rate of development based on these internal and external pre-capitalist markets is quite different from how the center dominated the periphery in the previous 2 centuries up to the early/mid 20th century.

 

Quote:
But I am not sure that whatever pre-capitalist forms of labor exploitation exist in places like India, etc. today can be compared to what existed during ascendance. Its as if they are part and parcel of global capital--the indivisible remainder that captial was simply unable to shape completely in its own image, but which are not--strictu sensu--outside of the system. They are something like a permanent, giant reserve army of the unemployed or a pobretariat or something like that. They can't be the basis of expanded reproduction, because they do not have sufficient purchasing power.

One of the communisation papers talks about surplus populations being superfluous to capital; or regions, large and small, internal or external, as 'garbage zones' that are not particularly important for its continued operation.

jk1921
Non-Identity

mhou wrote:

Do you mean state debt or consumer debt (or both)?

It's both. But this assertion is very controversial.

mhou wrote:

One of the communisation papers talks about surplus populations being superfluous to capital; or regions, large and small, internal or external, as 'garbage zones' that are not particularly important for its continued operation.

These "garbage zones" exist within the core regions as well, where more and more sectors of the population are being kicked out of production process. Of course, they aren't kicked out altogether. The phenomenon of "incomplete proletarianization" more and more characterizes the core, where the experience of the labour process for many young people is of precarious employment, punctuated by periods of being a student living off of government loans or self-employment, unemployment, etc. There is a kind of non-identity taking shape--not part of the system as a productice full-time proletarian, but not outside of it either. But I question whether this means these zones are "not particulary important for the continued operation of the system," as it would seem they are used by capital as a mass reserve army that continuously provides downward pressure on wages, etc.

jk1921
Rate?

mhou wrote:

The rapid assimilation of internal markets and accelerated internal development after the international tendency to state capitalism in Russia and China makes sense in this schema, but the rate of development based on these internal and external pre-capitalist markets is quite different from how the center dominated the periphery in the previous 2 centuries up to the early/mid 20th century.

I am still having trouble grasping your concern. Is it simply about the "rate" of development, or is there something more fundamentally flawed in the model?

You raise an interesting points about Soviet development under Stalinism. What was the nature of this development (much of which took place, just as the rest of the world was subsumed by depression)? I've always thought that this was a much more problematic historical fact for decadence theory than the trente glorieuses.

mhou
Quote:I am still having

Quote:

I am still having trouble grasping your concern. Is it simply about the "rate" of development, or is there something more fundamentally flawed in the model?

You raise an interesting points about Soviet development under Stalinism. What was the nature of this development (much of which took place, just as the rest of the world was subsumed by depression)? I've always thought that this was a much more problematic historical fact for decadence theory than the trente glorieuses.

That's the crux of it- how the direct 'capitalization' of internal pre-capitalist markets by Stalinist Russia and China (and then exporting this model to other underdeveloped regions) via extreme application of state capitalism condenses the time it takes to develop a modern infrastructure and industrial output to compete with the central nations, proletarianizing huge swathes of the peasant-majority, to accomplish surplus value extraction and valorization; compared to the path taken by the central nations. Particularly at a time of extreme systemic crises/onset of decadence. Kondratiev offers the long-wave cycle theory, other parts of the communist left adhere to variations of the Third International's mainstream theory of capitalist decline based on increases in constant capital compared to variable capital and overproduction as a result of exponentially greater and greater productivity. The frenzied pace of absorption and assimilation and turning the countryside into modern capitalism as in Russia and China is the type of tempo and environment I keep imagining if capitalism truly is developed on the basis of exports to backward markets. Either a temporal disconnect or a misunderstanding.