Capital I, Chapter 33

The Modern Theory of Colonisation

“Political economy confuses on principle two very different kinds of private property, of which one rests on the producers’ own labour, the other on the employment of the labour of others. It forgets that the latter not only is the direct antithesis of the former, but absolutely grows on its tomb only.” (p 716)

In Western Europe, Marx writes, the latter form of capitalist production had already predominated. Even where other forms of production continued within these economies they were subordinated to capitalist production.

In the colonies - and Marx argues that economically the US was still a colony of Europe – capitalist ownership comes into sharp conflict with private ownership of property.

“There the capitalist regime everywhere comes into collision with the resistance of the producer, who, as owner of his own conditions of labour, employs that labour to enrich himself, instead of the capitalist. The contradiction of these two diametrically opposed economic systems, manifest itself here practically in a struggle between them. Where the capitalist has at his back the power of the mother-country, he tries to clear out of his way by force the modes of production and appropriation based on the independent labour of the producer. The same interest, which compels the sycophant of capital, the political economist, in the mother-country, to proclaim the theoretical identity of the capitalist mode of production with its contrary, that same interest compels him in the colonies to make a clean breast of it, and to proclaim aloud the antagonism of the two modes of production. To this end, he proves how the development of the social productive power of labour, co-operation, division of labour, use of machinery on a large scale, &c., are impossible without the expropriation of the labourers, and the corresponding transformation of their means of production into capital. In the interest of the so-called national wealth, he seeks for artificial means to ensure the poverty of the people.” (p 717)

The American Marxist,Oliver Cromwell Cox, in “Race, Caste and Class”, argued that racism arises out of this contradiction. He sets out the way that in previous modes of production, such as slavery and feudalism, there was no presumption of equality of individuals underpinning the ruling ideology. Quite the opposite, the societies took as read the idea of inequality between individuals. They were highly structured societies based on social rank. Consequently, under the Roman Empire, you could be a Roman citizen whether you were white, black or yellow. By the same token you could also be a slave. Roman ideology did not have to explain why some people were free and others unfree on the basis that they were in some way not equally human – which is the fundamental basis of racism – because it never claimed that all humans were equal to begin with. By, the same token, Cox argues, it was quite common in feudal Spain, for black servants brought home from the colonies, to marry the woman of the house after her husband had died. No kind of social taboo attached to such arrangements.

However, Cox argues, bourgeois ideology, in its struggle against feudalism, does assert the equality of individuals alongside its insistence on the inalienable Rights of Man based on freedom of the individual. That bourgeois ideology develops as an ideology of class struggle, as Capital develops within feudal society, and in opposition to it. But, the point at which this ideology reaches its pinnacle in the writings of people like Tom Paine, is also the point where the primitive forms of Capital – Merchant and Money Capital – are in a symbiotic relation with Feudalism. The Merchant and Money Capitalists acts as pioneers opening up new markets for themselves, but at the same time they open up new territories upon which the Landlords can continue their rent seeking activities. It is on this basis that Colonialism develops. But, as Marx says, the process of destroying the individual producers in Western Europe had proceeded over centuries. Colonialism did not have the luxury of waiting that long in the Colonies. It acted to destroy the direct producers quickly by outright force. But, that contradicted the fundamental claim of bourgeois ideology of freedom and equality of the individual as inalienable human rights. The only way that could be reconciled, therefore, was by claiming that those being enslaved were not really human, not deserving of those inalienable human rights. What, as Marx has demonstrated, is a fundamental requirement for the exploitation of labour in Western Europe, and production of Surplus Value, the notion of Equality and Freedom, that free and equal individuals enter into free and equal contracts for the sale of commodities, in the Colonies turns into its opposite!

Colonialism, in operating in that way is therefore at odds with the objective requirements of Capital proper. That is so both because Capitalism proper, industrial Capitalism, extracts Surplus Value on the basis of Relative Surplus Value, which in itself relies on a reasonably well provisioned, and contented working-class (which is the basis of the Fordism and Welfarism of the 20^th Century), and because it undermines the main ideological tenet of bourgeois society of the fundamental freedom and equality of individuals. But, Colonialism does not emerge on the basis of this developed form of Capitalism, it emerges under Feudalism and develops under the Mercantilism that separates Feudalism from Capitalism proper. It emerges not on the basis of free and equal exchanges, or even of surplus value production, but on the basis of inequality and unequal exchange, which is the hallmark of the form of profit extracted by Merchant and Money Capital.

The basis of the Bourgeois Social Democratic
regime that Capitalism established during the last
century was Fordism at the level of the enterprise,
and its equivalent - Welfarism - at the level of the State.

In the same way that the early forms of Capitalism adopt methods, which are not ultimately sustainable as means of Capital Accumulation, and indeed are contrary to it in the longer term, so Colonialism develops as a means of rapidly bringing about Capital Accumulation, which is nevertheless not sustainable in the longer term, and is contradictory to the longer-term interests of Capital. In fact, its for these very reasons that once industrial capital becomes dominant, and exerts its hegemony over previous forms of Capital, it begins to dismantle Colonialism, and modern Imperialism begins. (See: Imperialism, Industrialisation and Trade and Imperialism and the New International Division of Labour) Modern Imperialism, like modern industrial capital in general is based not on unequal exchange but on the extraction of Relative Surplus Value. The effective extraction of Relative Surplus Value itself relies on a working-class that believes that it is both free and equal, and that its rising standard of living is a reflection of its sharing on that basis in the fruits of its co-operative relation with Capital. That is the basis of the Social Democracy that modern capitalism has established during the last century. It is why in large swathes of the globe, in Latin America and Asia, this kind of economic development has gone hand in hand with the removal of previously Bonapartist regimes, and the establishment of this kind of Bourgeois Social Democracy.

That, of course, does not mean that Capitalism abandons Colonialist methods entirely, but the nature of that Colonialism changes. It becomes another tool in the toolbox rather than the primary driver. Colonialism, instead of being the basis of exploitation, becomes instead a means of control through which Imperialist States exercise their geo-political interests. For example, the Argentinian invasion of the Falklands had nothing to do with their economic exploitation, but with the Argentinian State attempting to exercise its political muscle, just as Britain's response was based on a similar assertion of its place in the Imperialist system of states. The invasion of Iraq, similarly had nothing to do with economic exploitation – industrial capitalism could just as easily have achieved that via economic contracts and arrangements with Saddam Hussein – but with the assertion of imperialist geo-political interests within the region.

The same is true of racism and the associated nationalism. Once Capitalism reaches the stage of large scale multinational capital, and where the nation state has become an impediment to capital accumulation, nationalistic and racist sentiments become a hindrance to Capital in General, even though these sentiments continue to dominate, and to reflect the interests of the more backward, small-scale, nationally based sections of capital. That is the material basis of the divisions currently racking the Tory Party over Europe, and Immigration Controls.

As Marx says, here what Colonialism and racism do is to expose the true nature of Capitalist exploitation by undermining the notion that individuals are free or equal.

“It is the great merit of E.G. Wakefield to have discovered, not anything new about the Colonies, but to have discovered in the Colonies the truth as to the conditions of capitalist production in the mother country. As the system of protection at its origin attempted to manufacture capitalists artificially in the mother-country, so Wakefield’s colonization theory, which England tried for a time to enforce by Acts of Parliament, attempted to effect the manufacture of wage-workers in the Colonies. This he calls “systematic colonization.”

First of all, Wakefield discovered that in the Colonies, property in money, means of subsistence, machines, and other means of production, does not as yet stamp a man as a capitalist if there be wanting the correlative — the wage-worker, the other man who is compelled to sell himself of his own free will. He discovered that capital is not a thing, but a social relation between persons, established by the instrumentality of things.” (p 717)

This is a reference to the point Marx also makes in Value, Price and Profit and elsewhere that in the US, workers who emigrated there, soon saved up enough money to buy a piece of land and turn themselves back into peasants, into private property owners. In so doing, they undermined capitalist production, so capital attempted to use legislation to impose artificially high land prices.

In fact, its this inability to hold on to free wage labourers in the colonies that provokes a resort to the use of slave labour, which is, as Marx elaborated earlier a very inefficient form of labour for extracting surplus production.

But, under these conditions, not only is the price of labour raised, and the possibility of accumulating capital diminished, the other things that go along with it are also absent. The division between town and country does not exist, and so the basis for division of labour based on it, of trade between town and country, and development of the home market are absent.

Marx quotes Merivale, who exposes the true situation.

“On account of the high wages, says his disciple, Merivale, there is in the colonies “the urgent desire for cheaper and more subservient labourers — for a class to whom the capitalist might dictate terms, instead of being dictated to by them.... In ancient civilized countries the labourer, though free, is by a law of Nature dependent on capitalists; in colonies this dependence must be created by artificial means.” (p 721)

The solution proposed by Wakefield was to subvert all of the supposed laws of capitalism based on the notion of freedom and equality.

“The trick is how to kill two birds with one stone. Let the Government put upon the virgin soil an artificial price, independent of the law of supply and demand, a price that compels the immigrant to work a long time for wages before he can earn enough money to buy land, and turn himself into an independent peasant. The fund resulting from the sale of land at a price relatively prohibitory for the wage-workers, this fund of money extorted from the wages of labour by violation of the sacred law of supply and demand, the Government is to employ, on the other hand, in proportion as it grows; to import have-nothings from Europe into the colonies, and thus keep the wage labour market full for the capitalists.” (p 722-3)

The consequence was that the emigrants avoided the English colonies, where this was practised and went instead to the US. But, ultimately, the surplus population created in Europe, flooded into the Eastern United States to an extent that its westward drift could not keep pace with it. An increasing working class population thereby accumulates in the Eastern Seaboard of the United States, where the majority of capitalist development occurs.

The Civil War, as well as creating an internal colony, for US capital, in the South, also creates the strong centralised state that industrial capital requires. The South becomes a market for Northern industrial goods, that are developed behind high tariff walls, erected against foreign imports, by the new strong centralised Federal State, and it also becomes the source of cheap raw materials required by the northern industries, as well as a source of a latent reserve army of labour. The needs of Northern industrialists for wage labour are also further met by the movement North to the industrial centres, of freed slaves. But, the Civil War brings other things with it.

“On the other hand, the American Civil War brought in its train a colossal national debt, and, with it, pressure of taxes, the rise of the vilest financial aristocracy, the squandering of a huge part of the public land on speculative companies for the exploitation of railways, mines, &c., in brief, the most rapid centralization of capital. The great republic has, therefore, ceased to be the promised land for emigrant labourers. Capitalistic production advances there with giant strides, even though the lowering of wages and the dependence of the wage-worker are yet far from being brought down to the normal European level.” (p 723-4)

In Australia, land was simply handed over by the British Government, to aristocrats and capitalists. Their demand for labour was partly filled by the regular supply of convicts sent from England, for heinous crimes such as sheep or rabbit stealing, or for setting up Trades Unions. In part, it was met from the endless numbers who went in search of gold. Rapidly, a surplus population was created in Australia too.

“However, we are not concerned here with the conditions of the colonies. The only thing that interests us is the secret discovered in the new world by the Political Economy of the old world, and proclaimed on the housetops: that the capitalist mode of production and accumulation, and therefore capitalist private property, have for their fundamental condition the annihilation of self-earned private property; in other words, the expropriation of the labourer.” (p 724)

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