The bourgeoisie, however, in the process of its ascendancy, does not have this backing from the state, but, at every step, is confronted by it. Feudalism was based on a division of society into estates, each with their own set of rights and privileges, similar to the division of society into castes. Moreover, in each region, a local Lord held sway, like a local sovereign, establishing their own laws, taxes and so on. It was in this latter respect that, as it came to sweep away these regional and provincial regimes, and create a bourgeois nation state, the bourgeoisie aligns with the Monarchy.
The old feudal regime attempted to protect itself against bourgeois competition, by defending guild monopolies, and inhibiting free trade. When this starts to break down, within the nation state, and the commercial bourgeoisie allies with the landed aristocracy, in order to engage in colonial expansion, these methods are simply transposed to that activity. The merchant and money-dealing capitalists had always operated on the basis of their own guild monopolies, setting fixed prices and profit margins. This symbiotic relation between commercial capital and landed aristocracy – Mercantilism – operates on the same basis as it engages in the development of colonies.
The landed aristocracy first commissioned the merchant adventurers like Columbus, Magellan, Raleigh and Drake, who charted the trade routes. Then they established trading monopolies, like the East India Company, and Hudson's Bay Company. Initially, it is the private armies of these companies that create the colonies, and suppress competition. But, as Engels describes in his later Prefaces to The Condition of The Working Class, this mercantilism is alien to the interests of industrial capital, which must sweep away all of these remaining monopolies and protectionism. As he described, that is what happened in 1848, when that industrial bourgeoisie allied with the proletariat.
“The Reform Bill of 1831 had been the victory of the whole capitalist class over the landed aristocracy. The repeal of the Corn Laws was the victory of the manufacturing capitalist not only over the landed aristocracy, but over those sections of capitalists, too, whose interests were more or less bound up with the landed interest – bankers, stockjobbers, fundholders, etc. Free Trade meant the readjustment of the whole home and foreign, commercial and financial policy of England in accordance with the interests of the manufacturing capitalists — the class which now [These words belong apparently not to Bright but to his adherents. See The Quarterly Review, Vol. 71, No. 141, p. 273.-Ed.] represented the nation.”
(Preface To The Second German Edition of “The Condition Of The Working Class)
Colonialism was the product of Mercantilism, but, after 1848, within the bourgeois nation states, it is large-scale industrial capital that comes to dominate. As socialised capital, it bursts asunder the fetters of the monopoly of private capital, and after the Limited Liabilities Act of 1855, this large-scale, socialised capital experienced phenomenal growth. Its planned production, with huge amounts of investment in fixed capital, requiring long planning horizons and stable conditions, leads it to increasingly ally with the state itself, via the Stock Exchange, and other such financial institutions, including the central banks. This new, more developed form of capitalism – imperialism – requires ever larger single markets, to justify ever larger scales of production.
These larger single markets are not just, as with colonialism, markets into which it sells commodities or obtains primary products, but areas into which it directly invests capital, so as to exploit labour, the source of surplus value for industrial capital. It is why imperialism, and its vanguard, US imperialism, sweeps away the old European, colonial empires with their monopolies and protectionism.
“The demand for liberation from feudal fetters and the establishment of equality of rights by the abolition of feudal inequalities was soon bound to assume wider dimensions, once the economic advance of society had placed it on the order of the day. If it was raised in the interests of industry and trade, it was also necessary to demand the same equality of rights for the great mass of the peasantry who, in every degree of bondage, from total serfdom onwards, were compelled to give the greater part of their labour-time to their liege lord without compensation and in addition to render innumerable other dues to him and to the state.” (p 133)
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