“In colonial countries the law of supply and demand favours the working man. Hence the relatively high standard of wages in the United States. Capital may there try its utmost. It cannot prevent the labour market from being continuously emptied by the continuous conversion of wages labourers into independent, self-sustaining peasants. The position of a wages labourer is for a very large part of the American people but a probational state, which they are sure to leave within a longer or shorter term. To mend this colonial state of things the paternal British Government accepted for some time what is called the modern colonization theory, which consists in putting an artificial high price upon colonial land, in order to prevent the too quick conversion of the wages labourer into the independent peasant.”
(Marx – Value, Price and Profit)
The situation today is somewhat different. With capitalism far more developed than it was in the 19th century, and living standards correspondingly higher, it is almost impossible for peasant producers to obtain the same kind of living standard as a wage worker, even a wage worker in a developing economy! Consequently, economic development today sees large numbers of peasant producers, and certainly their children, rushing to the towns and cities in search of that higher living standard.
“Two different aspects must be distinguished here.
Firstly: There are the colonies proper, such as in the United States, Australia, etc. Here the mass of the farming colonists, although they bring with them a larger or smaller amount of capital from the motherland, are not capitalists, nor do they carry on capitalist production. They are more or less peasants who work themselves and whose main object, in the first place, is to produce their own livelihood, their means of subsistence. Their main product therefore does not become a commodity and is not intended for trade. They sell or exchange the excess of their products over their own consumption for imported manufactured commodities etc. The other, smaller section of the colonists who settle near the sea, navigable rivers etc., form trading towns. There is no question of capitalist production here either.” (p 301-2)
So long as land is abundant, Marx says, there is always the possibility for workers to colonise it as self-sufficient producers, so that capitalist production could not become established.
“Everything the colonists of the first type produce over and above their immediate consumption, they will throw on the market and sell at any price that will bring in more than their wages. They are, and continue for a long time to be, competitors of the farmers who are already producing more or less capitalistically, and thus keep the market-price of the agricultural product constantly below its value. The farmer who therefore cultivates land of the worst kind, will be quite satisfied if he makes the average profit on the sale of his farm, i.e., if he gets back the capital invested, this is not the case in very many instances.” (p 302)
There is a different type of colony based on plantations, Marx continues. In these, production from the start is capitalistic and geared to the world market. But, although the production is capitalistic, it is only so in a formal sense, and the problem of the provision of wage-labour is overcome by the use of slave labour.
“The method of production which they introduce has not arisen out of slavery but is grafted on to it. In this case the same person is capitalist and landowner. And the elemental [profusion] existence of the land confronting capital and labour does not offer any resistance to capital investment, hence none to the competition between capitals. Neither does a class of farmers as distinct from landlords develop here. So long as these conditions endure, nothing will stand in the way of cost-price regulating market-value.” (p 303)
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