Tuesday, 30 April 2013

Capital I, Chapter 32

Historical Tendency of Capitalist Accumulation 

The basis of the primary accumulation of capital resolves itself into the expropriation of the direct producers i.e. of the private property of tens of thousands of peasants, and its concentration in the hands of a relatively few capitalists.

Private property, as the antithesis to social, collective property, exists only where the means of labour and the external conditions of labour belong to private individuals. But according as these private individuals are labourers or not labourers, private property has a different character. The numberless shades, that it at first sight presents, correspond to the intermediate stages lying between these two extremes. The private property of the labourer in his means of production is the foundation of petty industry, whether agricultural, manufacturing, or both; petty industry, again, is an essential condition for the development of social production and of the free individuality of the labourer himself. Of course, this petty mode of production exists also under slavery, serfdom, and other states of dependence. But it flourishes, it lets loose its whole energy, it attains its adequate classical form, only where the labourer is the private owner of his own means of labour set in action by himself: the peasant of the land which he cultivates, the artisan of the tool which he handles as a virtuoso. This mode of production presupposes parcelling of the soil and scattering of the other means of production.” (p 712)

It is this classical form of petty production that gives rise to the ideas of individualism and liberty (i.e. to be left free of interference by the state) of the 18th Century. Rousseau who epitomises this Libertarian ideology, for example, based his model on the small self-sufficient, Swiss peasant community he was familiar with. It is also no wonder that these kinds of ideas had, and have a powerful grip in the United States, which developed from these kinds of roots.

But, this kind of individualistic petty production is nevertheless doomed. It is by its nature limited and inefficient.

“As it excludes the concentration of these means of production, so also it excludes cooperation, division of labour within each separate process of production, the control over, and the productive application of the forces of Nature by society, and the free development of the social productive powers. It is compatible only with a system of production, and a society, moving within narrow and more or less primitive bounds. To perpetuate it would be, as Pecqueur rightly says, “to decree universal mediocrity". At a certain stage of development, it brings forth the material agencies for its own dissolution. From that moment new forces and new passions spring up in the bosom of society; but the old social organization fetters them and keeps them down.” (p 713-4)

The bourgeoisie is forced to confront those fetters and to destroy them, in order to ensure its own development. As its economic power grows in the towns, so those towns also form the political strongholds for the bourgeoisie, where it creates its own state structures in the form of the Municipal Authorities, which it uses to back up its economic interest.

“Its annihilation, the transformation of the individualized and scattered means of production into socially concentrated ones, of the pigmy property of the many into the huge property of the few, the expropriation of the great mass of the people from the soil, from the means of subsistence, and from the means of labour, this fearful and painful expropriation of the mass of the people forms the prelude to the history of capital. It comprises a series of forcible methods, of which we have passed in review only those that have been epoch-making as methods of the primitive accumulation of capital. The expropriation of the immediate producers was accomplished with merciless Vandalism, and under the stimulus of passions the most infamous, the most sordid, the pettiest, the most meanly odious. Self-earned private property, that is based, so to say, on the fusing together of the isolated, independent labouring individual with the conditions of his labour, is supplanted by capitalistic private property, which rests on exploitation of the nominally free labour of others, i.e., on wage labour.” (p 714)

Once capital has developed beyond a certain point this process is increased qualitatively as the bourgeoisie is able to use not only its economic power, but also its state power to expropriate the direct producers. And, once that process has been completed, then, as described earlier, it is no longer the direct producers who are expropriated, but also the small capitalists via the process of concentration and centralisation of capital.

“This expropriation is accomplished by the action of the immanent laws of capitalistic production itself, by the centralization of capital. One capitalist always kills many. Hand in hand with this centralization, or this expropriation of many capitalists by few, develop, on an ever-extending scale, the cooperative form of the labour process, the conscious technical application of science, the methodical cultivation of the soil, the transformation of the instruments of labour into instruments of labour only usable in common, the economizing of all means of production by their use as means of production of combined, socialized labour, the entanglement of all peoples in the net of the world market, and with this, the international character of the capitalistic regime. Along with the constantly diminishing number of the magnates of capital, who usurp and monopolize all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working class, a class always increasing in numbers, and disciplined, united, organized by the very mechanism of the process of capitalist production itself. The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralization of the means of production and socialization of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.” (p 714-5)

As a result of 100 years of statism, and particularly of Stalinism, the meaning of this passage has become completely distorted.  What Marx is describing here is the death knell not of Capitalism per se, but of a particular form of Capitalism i.e. of "capitalist private property".  Capitalist private property is that early form of Capitalism where firms were largely owned by private individuals and families.  The process of concentration and centralisation, in which "The monopoly of capital" in the hands of a "diminishing number of the magnates of capital", had its limits.  To go beyond those limits capital itself had to break the monopoly ownership of firms by private individuals, and put in its place socialised or collectively owned, but still CAPITALIST property.

It does so by replacing the old form of individual and family owned businesses with Joint Stock Companies, open to ownership to all who could afford to buy shares with their own resources or by using credit, as well as in the form of Co-operatives.  It is not the expropriation of the expropriators by some kind of top down process carried out by the State that Marx is describing here, but the expropriation of the private capitalists by the collective capitalists!

This process goes along with the abolition of the social function of the capitalists themselves, and their replacement in that role by a class of professional managers, who form a part of a growing middle class, which in itself is one of the sources of buyers of these shares.  Its partly in this regard that Marx describes the Joint Stock Companies as resolving the antagonism between capital and labour negatively, because this ownership of shares continues on an individual basis, and the ownership of shares themselves becomes concentrated in the hands of a rich few.  He says, in Volume III, Chapter 27,

"III. Formation of stock companies. Thereby:

1) An enormous expansion of the scale of production and of enterprises, that was impossible for individual capitals. At the same time, enterprises that were formerly government enterprises, become public.

2) The capital, which in itself rests on a social mode of production and presupposes a social concentration of means of production and labour-power, is here directly endowed with the form of social capital (capital of directly associated individuals) as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself.

3) Transformation of the actually functioning capitalist into a mere manager, administrator of other people's capital, and of the owner of capital into a mere owner, a mere money-capitalist...

This result of the ultimate development of capitalist production is a necessary transitional phase towards the reconversion of capital into the property of producers, although no longer as the private property of the individual producers, but rather as the property of associated producers, as outright social property. On the other hand, the stock company is a transition toward the conversion of all functions in the reproduction process which still remain linked with capitalist property, into mere functions of associated producers, into social functions."

He goes on to elaborate the role of credit in this process.

"Conceptions which have some meaning on a less developed stage of capitalist production, become quite meaningless here. Success and failure both lead here to a centralisation of capital, and thus to expropriation on the most enormous scale. Expropriation extends here from the direct producers to the smaller and the medium-sized capitalists themselves. It is the point of departure for the capitalist mode of production; its accomplishment is the goal of this production. In the last instance, it aims at the expropriation of the means of production from all individuals. With the development of social production the means of production cease to be means of private production and products of private production, and can thereafter be only means of production in the hands of associated producers, i.e., the latter's social property, much as they are their social products. However, this expropriation appears within the capitalist system in a contradictory form, as appropriation of social property by a few; and credit lends the latter more and more the aspect of pure adventurers. Since property here exists in the form of stock, its movement and transfer become purely a result of gambling on the stock exchange, where the little fish are swallowed by the sharks and the lambs by the stock-exchange wolves. There is antagonism against the old form in the stock companies, in which social means of production appear as private property; but the conversion to the form of stock still remains ensnared in the trammels of capitalism; hence, instead of overcoming the antithesis between the character of wealth as social and as private wealth, the stock companies merely develop it in a new form."

When Marx speaks above of "The monopoly of capital" becoming "a fetter upon the mode of production" he is not talking about a monopoly in the sense we understand capitalist monopoly today - and he could not have meant that, because such monopolies did not exist at the time he was writing! - but of that specific monopoly in the hands of individuals, as opposed to the collective ownership that arises in its place in the form of those Joint Stock Companies, and of Co-operatives.

In Volume III of Capital, Marx describes this process of expropriation in similar terms to that described in relation to the expropriation of the direct producers. It is private capitalist ownership which disappears. Engels describes what this means in his Critique Of The Erfurt Programme where he argues that by the end of the 19th Century, this private capitalist property had already come to an end. It had been replaced by collectively owned capitalist property.

“What is capitalist private production? Production by separate entrepreneurs, which is increasingly becoming an exception. Capitalist production by joint-stock companies is no longer private production but production on behalf of many associated people. And when we pass on from joint-stock companies to trusts, which dominate and monopolise whole branches of industry, this puts an end not only to private production but also to planlessness.”

Marx makes the same point in Vol III of Capital (edited by Engels, and in this section, with none of his usual detailed notes to suggest that what Marx had written earlier had been overtaken by events). Explaining how private capitalist ownership is transformed into collective ownership, Marx writes,

“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour. They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage. Without the factory system arising out of the capitalist mode of production there could have been no co-operative factories. Nor could these have developed without the credit system arising out of the same mode of production. The credit system is not only the principal basis for the gradual transformation of capitalist private enterprises. into capitalist stock companies, but equally offers the means for the gradual extension of co-operative enterprises on a more or less national scale. The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.” 

But, as the initial development of capitalist production is slow, and isolated, and thereby limited until such time as it can be fostered by other means, so the development of isolated co-operatives is too slow on its own. As Marx put it in the Grundrisse,

"As the system of bourgeois economy has developed for us only by degrees so too its negation, which is its ultimate result." (p 712).

It can only proceed adequately if it is developed on a national (today at least European we would say) basis, which requires not just the use of credit as suggested by Marx above, but also as he pointed out in his Address to the First International, by the Working Class gaining Political Power, in other words, utilising the power of the State, in the same way that the bourgeoisie had done.

This is spelled out by Marx and Engels closest ally within the First International, Ernest Jones. In a letter to a Co-operators Conference, Jones wrote,

“Then what is the only salutary basis for co-operative industry? A NATIONAL one. All co-operation should be founded, not on isolated efforts, absorbing, if successful, vast riches to themselves, but on a national union which should distribute the national wealth. To make these associations secure and beneficial, you must make it their interest to assist each other, instead of competing with each other—you must give them UNITY OF ACTION, AND IDENTITY OF INTEREST.

To effect this, every local association should be the branch of a national one, and all profits, beyond a certain amount, should be paid into a national fund, for the purpose of opening fresh branches, and enabling the poorest to obtain land, establish stores, and otherwise apply their labour power, not only to their own advantage, but to that of the general body.

This is the vital point: are the profits to accumulate in the hands of isolated clubs, or are they to be devoted to the elevation of the entire people? Is the wealth to gather around local centres, or is it to be diffused by a distributive agency?

But, as Marx sets out, just as the bourgeoisie had to build up its political organisation and alternative state structure to confront the political fetters it faced from feudalism, so the workers would have to build up their political organisations and alternative state organs to confront the opposition of the bourgeoisie. As Marx stated,

“At the same time the experience of the period from 1848 to 1864 has proved beyond doubt that, however, excellent in principle and however useful in practice, co-operative labour, if kept within the narrow circle of the casual efforts of private workmen, will never be able to arrest the growth in geometrical progression of monopoly, to free the masses, nor even to perceptibly lighten the burden of their miseries. It is perhaps for this very reason that plausible noblemen, philanthropic middle-class spouters, and even keep political economists have all at once turned nauseously complimentary to the very co-operative labour system they had vainly tried to nip in the bud by deriding it as the utopia of the dreamer, or stigmatizing it as the sacrilege of the socialist. To save the industrious masses, co-operative labour ought to be developed to national dimensions, and, consequently, to be fostered by national means. Yet the lords of the land and the lords of capital will always use their political privileges for the defence and perpetuation of their economic monopolies. So far from promoting, they will continue to lay every possible impediment in the way of the emancipation of labour. Remember the sneer with which, last session, Lord Palmerston put down the advocates of the Irish Tenants’ Right Bill. The House of Commons, cried he, is a house of landed proprietors. To conquer political power has, therefore, become the great duty of the working classes. They seem to have comprehended this, for in England, Germany, Italy, and France, there have taken place simultaneous revivals, and simultaneous efforts are being made at the political organization of the workingmen’s party.” 

Inaugural Address To The First International

In other words, even if this process were pursued via Parliament, the workers would have to prepare to use extra parliamentary force to put down a “slave holders revolt” as the bourgeoisie attempted to hold on to their power and privileges by force, just as the aristocracy had done when its time was up.

“The transformation of scattered private property, arising from individual labour, into capitalist private property is, naturally, a process, incomparably more protracted, violent, and difficult, than the transformation of capitalistic private property, already practically resting on socialized production, into socialized property. In the former case, we had the expropriation of the mass of the people by a few usurpers; in the latter, we have the expropriation of a few usurpers by the mass of the people.” (p 715)

Back To Chapter 31

Forward To Chapter 33

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