Under feudalism, the feudal landlords, at least initially, are only interested in the size of the surplus product they can obtain, as rent, so as to also increase their consumption, the number of retainers they can support, the armies they can maintain, the treasure they can hoard, and so on. In order to increase these rents, they must themselves engage in wars to expand their domain, at first within the existing kingdoms, and then into other kingdoms, and colonial expansion. The development of colonial expansion, beginning in the 16th and 17th century, arises as merchant capital itself develops within feudalism, and begins to cater for the extended desires and consumption of the landed aristocracy by the provision of more exotic commodities from across the globe. It is the expansion of the market, and of commodity production for that market, that creates the conditions for the development of capitalist production itself.
It is only feudalism that creates the conditions under which these markets can expand, and in which production for the market, i.e. commodity production expands, and so creates the conditions for capitalist production. Everywhere else, the existing modes of production, such as the AMP, have to be destroyed by the actions of colonialism, before the conditions for social progress are created. But, feudalism itself does not develop the means of production, and its extension, colonialism, does not do so either. Feudalism simply seeks to extract surplus value in the form of rent, and, in doing so, holds back the development of the productive forces. The same is true of the antediluvian forms of capital, usurers capital and merchant capital. Indeed, when capitalist production first arises in the Mediterranean City States the action of these forms of capital strangles it at birth. These forms of capital, as with landed property, are based upon unequal exchange, which itself forms the economic basis of colonialism, and Mercantilism.
But, the expansion of trade, the development of towns, creates large concentrated markets for a range of commodities, and this means that capitalist production becomes feasible for the first time. It means that economies can be achieved by producing on a large scale, which means that it becomes possible to profitably employ wage labour, and now to obtain surplus value not via unequal exchange, but in the process of production itself. It means that productive-capital can come into existence, as capital that is truly self-expanding value. And, it is this that creates the condition for the most rapid development of the productive forces ever seen in Man's history, a truly historic, progressive development. As Marx and Engels describe in The Communist Manifesto.
“The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East-Indian and Chinese markets, the colonisation of America, trade with the colonies, the increase in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an impulse never before known, and thereby, to the revolutionary element in the tottering feudal society, a rapid development.
The feudal system of industry, in which industrial production was monopolised by closed guilds, now no longer sufficed for the growing wants of the new markets. The manufacturing system took its place. The guild-masters were pushed on one side by the manufacturing middle class; division of labour between the different corporate guilds vanished in the face of division of labour in each single workshop.
Meantime the markets kept ever growing, the demand ever rising. Even manufacture no longer sufficed. Thereupon, steam and machinery revolutionised industrial production. The place of manufacture was taken by the giant, Modern Industry; the place of the industrial middle class by industrial millionaires, the leaders of the whole industrial armies, the modern bourgeois.
Modern industry has established the world market, for which the discovery of America paved the way. This market has given an immense development to commerce, to navigation, to communication by land. This development has, in its turn, reacted on the extension of industry; and in proportion as industry, commerce, navigation, railways extended, in the same proportion the bourgeoisie developed, increased its capital, and pushed into the background every class handed down from the Middle Ages.
We see, therefore, how the modern bourgeoisie is itself the product of a long course of development, of a series of revolutions in the modes of production and of exchange ...
The bourgeoisie, historically, has played a most revolutionary part.”
But, it was only the bourgeoisie that could perform this role, and this concentration of the means of production could only take the form of capital. The individual small producer has no reason to centralise and concentrate the means of production. They produce only to meet their own consumption needs, even if they achieve this by producing commodities to sell in the market. Because all individual producers produce only to meet their own needs, the size of the market itself is small. The range of products produced as commodities is constrained, and the quantity of them produced and exchanged is also constrained by this fact that exchange of these products is geared only to obtain products in exchange for consumption. The limited size of the market, means that there is no great advantage from production on a larger scale, i.e. economies of scale. Without that, there is no basis for capitalist production. That is why prior to the commencement of capitalist production, when individual producers are ruined, they become slaves or serfs, rather than wage labourers.
Without any material basis for large-scale production, there is no basis for socialised production either. There is no basis for the individual producers to voluntarily associate in production. Socialised production was to be seen in the Asiatic Mode of Production, but it was small-scale production, narrow and unchanging, and itself inseparable from the other aspects of that mode of production, and from oriental despotism, as Lenin described in his critique of the Narodniks, whose Utopian schemas thought that it was possible to simply join the good elements of such socialised village production, with the good elements of bourgeois liberalism.
Similarly, the guilds reproduce all of the aspects of feudalism within them. They are paternalistic organisations that replicate the division of society by social rank with guild-master, journeyman and apprentice, and the antagonistic relations between them. And, like feudal society, it is based upon a crippling monopoly that acts to hold back development and production. It is the development of the market and of commodity production that breaks it apart, as a result of competition, just as it destroyed the Asiatic Mode of Production via colonialism. It is why those forms of Socialism – Peasant Socialism and Guild Socialism – that look back to these previous forms are themselves both Utopian and Reactionary.
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