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- Author: Ellen Meiksins Wood
- Full Title: The Origin of Capitalism
- Category: #books
- Above all, it is a system in which the bulk of society’s work is done by propertyless labourers who are obliged to sell their labour-power in exchange for a wage in order to gain access to the means of life and of labour itself. In the process of supplying the needs and wants of society, workers are at the same time and inseparably creating profits for those who buy their labour-power. In fact, the production of goods and services is subordinate to the production of capital and capitalist profit. The basic objective of the capitalist system, in other words, is the production and self-expansion of capital.
- Almost without exception, accounts of the origin of capitalism have been fundamentally circular: they have assumed the prior existence of capitalism in order to explain its coming into being. In order to explain capitalism’s distinctive drive to maximize profit, they have presupposed the existence of a universal profit-maximizing rationality. In order to explain capitalism’s drive to improve labour-productivity by technical means, they have also presupposed a continuous, almost natural, progress of technological improvement in the productivity of labour.
- In most accounts of capitalism and its origin, there really is no origin. Capitalism seems always to be there, somewhere; and it only needs to be released from its chains – for instance, from the fetters of feudalism – to be allowed to grow and mature.
- The effect of these explanations is to stress the continuity between non-capitalist and capitalist societies, and to deny or disguise the specificity of capitalism. Exchange has existed more or less forever, and it seems that the capitalist market is just more of the same.
- Karl Polanyi maintained that the motive of individual profit associated with market exchange was never till the modern age the dominant principle of economic life.9 Even where markets were well developed, a sharp distinction must be made, he said, between societies with markets, such as have existed throughout recorded history, and a ‘market society’. In all earlier societies, ‘economic’ relations and practices were ‘embedded’ or submerged in non-economic – kinship, communal, religious, and political – relationships. There have been other motives driving economic activity than the purely ‘economic’ motives of profit and material gain, such as the achievement of status and prestige, or the maintenance of communal solidarity. There have been other ways of organizing economic life than through the mechanisms of market exchange, in particular ‘reciprocity’ and ‘redistribution’ – elaborate reciprocal obligations determined, for instance, by kinship, or the authoritative appropriation of surpluses by some kind of central political or religious power and their redistribution from the centre.
- In particular, neither the local markets nor the long-distance trade characteristic of pre-capitalist economies were essentially competitive (let alone, he might have added, driven by competition). These forms of trade – between town and country in the one case and climatic zones in the other – were, he suggests, more ‘complementary’ than competitive – even, evidently, when ‘complementarity’ was distorted by unequal power relations. External trade was simply ‘carrying’ trade. Here, the merchant’s job was to move goods from one market to another, while in local trade, Polanyi argued, commercial activity was strictly regulated and exclusive. In general, competition was deliberately eliminated because it tended to disorganize trade.
- Polanyi points out that only internal, national markets – a very late development, much resisted by local merchants and autonomous towns in the most advanced commercial centres of Europe – were to be conducted according to competitive principles.
- A market economy can exist only in ‘market society, that is, a society where, instead of an economy embedded in social relations, social relations are embedded in the economy.
- So disruptive was the system of self-regulating markets, Polanyi insists, not only to social relations but also to the human psyche, so awful were its effects on human lives, that the history of its implantation had to be at the same time the history of protection from its ravages. Without ‘protective countermoves’, particularly by means of state intervention, ‘human society would have been annihilated’.
- What fails to emerge from all of this is an appreciation of the ways in which a radical transformation of social relations preceded industrialization. The revolutionizing of productive forces presupposed a transformation of property relations and a change in the form of exploitation that created a historically unique need to improve the productivity of labour. It presupposed the emergence of capitalist imperatives: competition, accumulation, and profit-maximization.
- in the old accounts, Europe surpassed all other civilizations by removing obstacles to the natural development of ‘commercial society’; in the anti-Eurocentric inversion, the failure of non-Europeans to complete the process of development, despite the fact that they had already come so far, was caused by obstacles created by Western imperialism.
- The specific precondition of capitalism is a transformation of social property relations that generates capitalist ‘laws of motion’: the imperatives of competition and profit-maximization, a compulsion to reinvest surpluses, and a systematic and relentless need to improve labour-productivity and develop the forces of production.