The Origin of Capitalism

Carmela Gross, ENTRE WORDS series, Donkey, 2012, graphite and enamel on dictionary sheet, 27,5 x 20,8 cm


Commentary on one of the books by historian Ellen Meiskins Wood

It is the last line of defense of capitalism, and often the most powerful: this socio-economic regime would be 'natural' and the only one really adapted to 'human nature'. It would allow, by the magic of the 'invisible hand' and according to Mandeville's old fable of the bees, to transform humanity's 'natural' selfishness into benefits for the latter as a whole. Added to this is capitalism's ability to quantify everything and, therefore, 'rationalize' everything. In the 1950s, the 'invisible hand' took on its mathematical form in the guise of the general equilibrium models that still dominate the economic sciences today. Capitalist mechanics then becomes an equation. In other words, it reaches a higher level of 'naturalness'. As two with two equals four, capitalism would be the essence of man.

The consequences of this view are immense. If capitalism is the profound realization of the human essence, how could we then think of overcoming it? It is evidently a lost cause. Socialist reformism which, in Eduard Bernstein's early writings, is still a means of advancing towards socialism has progressively become a driving force of capitalism.

And the fall of the 'communist' regimes in 1989-1991 only confirmed this movement: these regimes struggled in vain against 'human nature', which explains their recurrence to violence. Its fall and the globalization of capitalism represented, then, the closure of human history, in the Hegelian sense of the term, by the rationalization of the world as a form of realization of the Spirit.

History should, of course, translate this worldview. Since capitalism is natural and rational, the history of humanity would be reduced to just one great movement: the liberation of obstacles allowing an underlying capitalism to take place. Here, we are still in Hegelian idealism: every human society has always had capitalism within itself, but the material interests of certain groups have tried to block its implementation. It was when these obstacles were finally removed, the last among them in 1989-1991, that man was able to realize his rational destiny through capitalism.

A 2009 work by Canadian historian Ellen Meiksins Wood, recently translated into French and published by Lux, L'Origine du capitalisme, comes to break with these beautiful certainties. And that makes it an indispensable book for our time. Because the first part of the work is dedicated, with success, to deconstruct this character 'Natural' of human development towards capitalism. The major review that she undertakes of the different theories about the origin of the capitalist system shows how the debate has been, since then, interdicted.

Convinced of the ineluctability of capitalism, historians, including the vast majority of Marxist historians, submitted history to this preliminary reading. Such a reading was based on the idea that commerce was, of course, of capitalist essence and only depended on liberation from the restrictions of feudal society to make it fully. Once this state was reached, capitalism could do its best and could impose itself on a humanity that recognizes it as the fruit of its own nature. It is the model of 'commercialization' that dominated and still dominates the historical reading of capitalism. “These people took it for granted that capitalism had always existed, at least in an embryonic form, since the beginning of time, and that it would be the inherent limit of nature and human reason”, summarizes Ellen Meiksins Wood (page 25).

The historian shows how even those who tried to escape traditional 'bourgeois' models cannot escape this 'commercialization' logic. This is notably the case of Karl Polanyi, who, despite his radical critique of commodification, does not escape the scheme that links commercial development to technical progress and industrialization. He can thus defend the idea that “once feudal ties weakened, before they disappeared, there was little to stop market forces from imposing themselves”. In other words, these market forces, blocked by feudalism, were very much present in a latent state. This small error is also present in the great controversy among Marxists in the 1950s, which pitted Paul Sweezy against Maurice Dobb.

The first to really escape this 'commercialization' scheme would have been the American historian Rober Brenner in a famous article of 1976, “Agrarian Class Structure and Economic Development in Pre-Industrial Europe”. Brenner, who is the inspirer of Ellen Meiksins Wood, saw in capitalism not a natural phenomenon, but a historical one, born in rural England in the XNUMXth and XNUMXth centuries. He rejects any idea of ​​latent or embryonic capitalism. This text will provoke the raising of defenses within the historian milieu, from which a work will emerge, The Brenner Debate (Republished in 2009 in Cambridge University Editions), in which, for the first time, the validity of the 'commercialization' model would be called into question.

Ellen Meiksins Wood is clearly inscribed in the continuity of Robert Brenner from 1976. The sequence of the work thus tries to go even further to describe the birth of capitalism as a historical phenomenon, born of a historical context.

To get out of the 'commercialization' bias, the historian recalls several key elements. In the first place, there is a radical difference between commerce and its development and capitalism, and therefore between the bourgeoisie of the cities living on commerce and capitalism. Capitalism is not simply a system where the market exists, it is a system where the market dictates its law to society as a whole. Competition is, therefore, the driving force of all society, forcing it to permanently improve its productivity in order to meet the prices set by the market. The market thus leads to a need for the circulation of capital and forces social forces to adapt to this need. Ellen Meiksins Wood believes that the dominant social force is, therefore, economic: it is the market and its imperatives that decide on the allocation of production surpluses.

And this is the biggest difference in relation to pre-capitalist societies, in which production surpluses become the object of political measures, 'extra-economic' as Marx said: various taxes, manorial rights, armed conflicts. In these societies, moreover, the use of surpluses is different. They serve either to maintain commercial income at a constant level or to ensure luxury consumption. Massive investment in increasing labor productivity is therefore not necessary.

The Canadian historian shows right here the remarkable difference that exists between the classic examples of 'aborted capitalism' that are the Italian cities of the Renaissance or the United Provinces (Netherlands) of the XNUMXth century and the capitalist society in formation in England. In both cases, trade developed the wealth of a large urban class. But if “the market played a role in its development, it also seems evident that this market offered opportunities more than it imposed its imperatives”. And Ellen Meiksins Wood adds: “In any case, the market did not produce the constant and typically capitalist need to maximize profits by developing the productive forces”.

The Florentine burghers took advantage of the opportunities linked to the know-how of their craftsmen, while those of the Low Countries took advantage of their dominance of trade routes. Sometimes they 'invested', through war or diplomacy, to maintain these advantages, but once the good deals disappeared and the markets dried up, their wealth waned. This failure was not the consequence of obstacles impeding the development of capitalism, but was due precisely to the non-capitalist nature of these economic developments.

Understanding the origin of capitalism to overcome it

The thesis defended by the work is that capitalism was not born in mercantile and urban societies as the traditional view aims, but in rural England in the Tudor era. England underwent a unique development during the feudal period. Unlike France, for example, the country became politically unified very quickly, even before the Norman conquest of 1066, with a nobility associated with central power and not refocused on its local powers. The Magna Carta of 1215 and the growing power of Parliament represented this division of power at the central level. We are far from the French case, where noble power remained decentralized for a long time, even under absolutism.

The English aristocracy thus progressively lost the extra-economic means of collecting agricultural surpluses that would remain in place in France until August 4, 1789 (the famous 'privileges'). But, in compensation, the English state gave the nobility two key elements: strong guarantees of their land ownership rights and an integrated national market. While in France small farmers owned their land and paid taxes to their lord, in England the nobles rented their land to farmers and submitted these contracts to a national market to increase their value even more. Thus, “a system of competitive rents was put into practice in which lords, whenever possible, rented their land to the highest bidder”, a system that naturally gained ground over residual customary rights. Since then, farmers, in order to conserve their land, have had to be as competitive as possible, increasing their productivity. Capitalist logic was born.

The 'enclosures' movement, which reduced the land managed in common, thus met its first decisive impulse already in Tudor times. But, contrary to what Polanyi and Marx thought, it was already a consequence, not a cause of capitalism. Quickly, English agriculture was able to nourish the immense London metropolis, where the rural classes persecuted by this same movement took refuge. These masses were then forced to buy essential goods on the market at low prices. This logic could, then, have stumbled on the natural weakness of the employment and purchasing power of English peasants subjected to this advance in agricultural productivity. However, this state of affairs further favored the development of markets based on mass consumption at low prices, therefore, on growing productivity. Quickly, English capitalism became industrial through the textile industry, destined to respond to such a market. In any case, “it is not the possibilities offered by the market, but its imperatives that lead small producers to accumulation”.

“This was the first economic system in history in which the economic constraints of the market would have the effect of forcibly increasing the forces of production rather than slowing down or preventing them”, explains Ellen Meiksins Wood. Where the fall in commercial demand led to the decline of the United Provinces, the limited resources of the English proletariat favored industrial investment.. “When industrial capitalism saw the light of day, market dependence crept deep into all strata of the social order. But, in order to get there, dependence on the market would have to be a well-implemented phenomenon”, summarizes the historian.

Capitalism, therefore, developed in a precise place and at a specific time. And it developed not as a natural force, but as the fruit of “private property relations”, “market-mediated” relations. The author quickly goes through the class struggle that constitutes the background of this evolution, but that does not prevent this book, which, in addition, presents equally stimulating reflections on colonialism and the State, from being essential for current reflection.

At a time when neoliberalism, the mode of management of globalized capitalism, is struggling to respond to the challenges of our time, this study is precious. It offers profoundly revolutionary content. For, if capitalism is a historical phenomenon, it can very well be overcome, like every historical phenomenon. It is not the only possible horizon, even if it is, as Branko Milanovic stresses in his latest book, Le Capitalisme, sans rival, the only persistent socioeconomic system. If he is not 'natural' he is not immortal, or at least he is not destined to lead humanity to its demise.

By putting capitalism in its proper place, that is, reaffirming its historical character, Ellen Meiksins Wood fulfills three essential roles. First, it allows a return to the foundations of the critique of capitalism. The anti-Stalinist German philosopher Karl Korsch estimated, in his work Karl Marx, published in 1938, that “the first of the fundamental principles of the new revolutionary science of society is the principle of the historical specification of all social relations”. Marx's contribution, then, is to refer the 'bourgeois' categories (understood here in the sense of 'capitalists') to their 'bourgeois' historical reality. Since these categories are effectively historical and do not encompass the essence of man, they are therefore modifiable by human history. Therefore, criticism can consider its overcoming. Marx's struggle against the Hegelian idealist dialectic and that against the absolute character of capitalist political economy go hand in hand and come together here, in the work of the Canadian historian.

As soon as the horizon opens and the tavern arguments of the 'all time' or 'human nature' type are discarded, Ellen Meiksins Wood's work opens up another perspective. Capitalism is a matter of property relations. The issue of ownership is therefore central to overcoming it. In this regard, this research seems to support the reflection brought by Thomas Piketty or Benoît Borrits on the need to engage the debate in terms of property. Any fight that does not deal directly with this issue seems to be doomed to failure or, even more, to the reproduction of capitalist logic. As the works of the Canadian historian show, this does not mean, without a doubt, the disappearance of trade, exchange and technical progress. All these notions, contrary to what some try to impose, are not a privilege of capitalism and exist in non-capitalist societies.

Now – we come to the third lesson of the work – the capitalist logic would not know how to face the ecological challenge. Capitalism, and this is the key to its success and expansion, has a continuous logic of flight forward. This is not a regime of stagnation, but of permanent growth. This need for infinite progression (which translates well into your recent mathematics) is now confronted with the end of the physical world. The enthusiasm of agrarian capitalism, spreading to English society as a whole, and then to the rest of the world, today poses a serious and urgent ecological problem. The fable of 'sober capitalism' does not confront the history of that system itself.

There is, then, an urgency to create a new social relationship to organize the survival of humanity. Undoubtedly, capitalism has brought much to humanity, and it is not a question of calling into question its historical interest (which Marx already recognized), but it is nothing more than a historical moment. Like others before him, this regime had its days. And Ellen Meiksins Wood's book helps us understand it.

*Romaric Godin is a journalist specializing in macroeconomics.

Translation: Daniel Pavan

Originally published on mediapart portal.



Ellen Meiksins Wood. L'Origine du capitalisme. Une étude approfondie. Paris, Lux, 2020, 249 pages.


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