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Red Theory: The historic emergence of capitalism

By J. Sykes |
July 17, 2022
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Despite what bourgeois economists, the priests of property and profit, would have us believe, capitalism isn’t the eternal way of things. It had a beginning, and it will have an end. As we begin our discussion of political economy, let’s draw upon historical materialism to examine how capitalism arose.

Capitalism didn’t arise out of nowhere, and it wasn’t born from the minds of Adam Smith or David Ricardo. It emerged historically and materially from the womb of feudalism, and like any mode of production is limited and conditioned by what came before it. There are several phases in its history, from agrarian to mercantile capitalism, and then to industrialization and on to its current, monopoly stage.

An important characteristic of capitalism’s early development emphasized by Marx in Capital is what he called “primitive accumulation.” What is primitive accumulation? Marx calls it the “original sin” of how capital came to be in the first place. Marx explains the myth of the origin of capital like this: “In times long gone-by there were two sorts of people; one, the diligent, intelligent, and, above all, frugal elite; the other, lazy rascals, spending their substance, and more, in riotous living. (...) Thus it came to pass that the former sort accumulated wealth, and the latter sort had at last nothing to sell except their own skins.” But of course this is just another lie the capitalists tell to justify their rule. The truth, Marx says, is much uglier: “The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signaled the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief moments of primitive accumulation.”

The capitalists originally accumulated their vast wealth by stealing it outright, through colonialism, genocide and enslavement. This primitive, or original accumulation, though fiercely resisted, has never really stopped. Despite the end of chattel slavery after the Civil War in the United States, national oppression still continues to form the basis of super-profits extracted from the oppressed nations within the U.S. while imperialism continues to wage wars to plunder the underdeveloped countries the world over.

In broad terms, early capitalism grew out of the collapse of the manorial system in Europe, followed by the enclosure of the commons beginning in the 16th century. The enclosure of common land and the clearing of the estates, primarily for grazing by sheep to profit from the market in wool, drove poor peasants off the land and into the towns. In chapter 27 of Capital, Marx refers to this as “the prelude of the revolution that laid the foundation of the capitalist mode of production.”

Poor peasants more and more were compelled to become “free workers,” with nothing but their own labor power to sell, leading to the early development of the working class. The towns became centers of handicraft industry, commodity production, and trade, and thus became the growing centers of power for the rising mercantile bourgeoisie against the feudal estates in the countryside. In the towns the early mercantile capitalists began to build their wealth through the production and trade in commodities, or products made solely to sell, along with colonial plunder, including everything from mineral wealth, spices, coffee and tobacco, to enslaved human beings.

The coastal cities of Europe, and later America, became the power centers for the merchant capitalist class, whose ports traded between Europe and its colonies. This period was characterized by violent class struggle between the rising bourgeoisie and the feudal lords, whose hereditary wealth and power were based upon the continuance of the feudal mode of production. Many of the modern, capitalist nation-states were formed in this period from the revolutionary defeat of the feudal principalities and kingdoms, as the capitalists seized and consolidated state power based on territories encompassing communities of economy, language and culture.

Having smashed the power of the feudal lords and established their own state power, the bourgeoisie was able to change the relations of production to suit their needs, clearing the way for the tremendous advancement of the productive forces in the industrial revolution and the development of the modern industrial proletariat.

There’s an important point to be made here that is often misunderstood. Marx and Lenin both said that capitalism was a progressive historical force, and they said this knowing full well what horrors of exploitation and oppression capitalism brought with it. So what does it mean to say that capitalism was progressive? At its core, historical progress is a scientific concept, not a moral one, and it is measured in two ways according to historical materialism. First, by the development of the productive forces, and second, by the expansion of democracy.

In terms of the advancement of the productive forces, capitalism freed the productive forces from the fetters of feudal productive relations. This allowed for the development of modern industry and a more advanced division of labor.

Advancement in the productive forces reduces the socially necessary labor to produce human needs, thereby reducing scarcity and paving the way, materially, for the possibility of more equitable distribution of the products of labor. In terms of the expansion of democracy, the social revolutions that established the rule of the bourgeoisie overthrew feudalism and took power from the small class of hereditary lords and put it into the hands of the larger class of the bourgeoisie. By both criteria, capitalism was progressive by leaps and bounds over feudalism, which was inferior in terms of both the superstructure and the economic base. Simply put, the feudal mode of production took more work to produce less for the benefit of fewer people. By further developing the productive forces, capitalist relations of production establish the material conditions necessary for socialism. This is the progressive side of capitalism, according to Marxism.

This isn’t to say that capitalism doesn’t have a reactionary and oppressive side as well. It certainly does. For working and oppressed people that has always been how capitalism has been experienced – as a system of misery, poverty, oppression and exploitation. As we shall see more and more in the articles that follow, capitalism contains its own exploitative and oppressive contradictions that must also be overcome. In doing so socialist revolution will likewise remove from the productive forces the fetters of capitalist relations of production and create a system that is far more democratic, “a million times more democratic,” as Lenin said, by taking power from the relatively small ruling class of capitalists and putting into the hands of the working class for the benefit of the broad masses of the people.