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.
* * * * *
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.