Tag: Friedrich Engels

  • Free Markets, Unfree People

    Free Markets, Unfree People

    Most of us dread the deadening of the body and will do anything to avoid it. About the deadening of the soul, however, we don’t care one iota.1
    —Epictetus

    As the earliest human societies emerged conscious from nature egalitarianism was a common characteristic. Economic surpluses were minimal and production of material needs relied on a nakedly social effort. The psychologists David Erdal and Andrew Whiten suggest:  “Egalitarian behaviour patterns evolved because…individuals became so clever at not losing out to dominant individuals that vigilant sharing became possible, and this was the most effective economic strategy in the circumstances in which Homo sapiens evolved.”

    In the prehistoric era of hunter-gathering, or primitive communism, there was no incentive to hoard resources, ideas or technology. In fact, doing so would have carried detrimental consequences to the individual, the group and the wider species. Resources and technology were freely shared between groups and individuals, and this type of cooperation facilitated the dominion of humanity over the globe. The free exchange of ideas and resources during this era fall into the categories of gifts between tribes, reciprocal exchange between kin and petty barter between individuals. 

    After ecological pressures provoked the Neolithic Revolution, humanity had to grapple with sedentary living and the production of an economic surplus above what was needed to reproduce the population. In the presence of surplus, our tendency toward cooperation and egalitarianism became inverted and economic classes formed which laid claim to different points along the production and distribution ladder. In a dialectical reversal of epic proportions, the prehistoric aversion to domination gave way to the slave economy, the most oppressive economic system known to history.

    Ancient Rome was so saturated with unfree labour that little distinction was made between working citizens earning a wage and slave labour owned by a master. Slaves commonly held managerial roles, conducted business and apprenticed in skilled trades. Selling oneself into slavery was an attractive means to escape poverty. In such an economy, it was the narrow band of elite slave owners who absorbed the surpluses of antiquity.

    Dawn of the Market

    Both enslaved and wage labour transitioned into tenant farming during the late decline of the western Roman empire. Feudalism was a sort of synthesis between the enslaved labour of Rome and the social organization of the Germanic tribes. Meanwhile, Christian idealism began to permeate the superstructure of medieval Europe. Since most of the population was tied down to agricultural production on plots of land, merchants took on an important role in the circulation of goods. Markets were held at regular times and places throughout Europe, giving prospective buyers and sellers of wares notice to prepare. Merchant guilds coordinated the movement of imports and commercial profits became a pathway for non-landholding Europeans to capture a piece of the economic surplus of the feudal era.

    Medieval commerce was sublated by the capitalist system as it began to develop after 1492. After peasants were shook loose from ancestral farmland and piled into cities, permanent shops replaced the market squares and merchant banks funded New World pillaging expeditions. We see a point in history where labour, surplus production and capital break free of physical boundaries. This economic transformation created the foundations of science, Enlightenment philosophy, the modern state, monetary system and, of course, the idea of the free market.

    “Free market” is defined by Britannica as “an unregulated system of economic exchange, in which taxes, quality controls, quotas, tariffs, and other forms of centralized economic interventions by government either do not exist or are minimal.” It’s interesting that free market fundamentalism—or laissez-faire economics—arrive on the political scene around the same time as socialism does, during western industrialization.

    As noted in the first paragraph, human beings evolved with an aversion to domination and preference for some modicum of economic and political egalitarianism. The adoption of sedentary living and the creation of economic surpluses within a class hierarchy threw back much of the formal cooperation of hunter-gatherers but it did not eliminate the collective want of freedom. Cooperation and freedom from domination is hardwired into our evolutionary history. This is visible in slave rebellions and peasant uprisings, as well as religions preaching liberation of the spirit. What capitalist modernity offers is a chance to concretely understand society and create the necessary political and economic conditions for liberation.

    Socialism v. Markets?

    For socialists, liberation involves a positive action: the organization of workers to overthrow the state and create a new government that lays hold of the economic levers of power. This would allow society to democratically create the material conditions needed for individual flourishing. Free marketeers are the inverse of this, socialism’s negative correlate: cut the government to a minimum and remove political authority from economic levers. The great promise of the free market is to provide “social order without institutions, claiming not to be one itself.”2 The premise here is that a market of self-interested individuals is the best allocator of goods and services for the whole of society. The market represents true capitalism, and true capitalism only exists where state authority ends.

    Voluntary exchange between individuals would certainly be a feature of any pro-social economy. For this reason free market fundamentalism can sound attractive. But it brings forward serious problems owing to the rock-ribbed power imbalances embedded within the capitalist economy. Every class society has featured an elite class which posits a state to protect property and safeguard economic interests and capitalism is no different. In his history of capitalism, Jürgen Kocka writes:

    State formation and the origins of financial capitalism were closely connected, and the nexus provided a way for prosperous urban citizens in high finance, a small elite, to establish their influence on politics while simultaneously making their entrepreneurial success dependent on powerful rulers and their shifting political fortunes.3

    This is a situation that continues to the present day, with the powerful corporate lobby and central banks that fuse financial capital to the state apparatus.4

    Assuming that the Siamese twins of state and corporate power could be surgically separated, the benefits are not clear. The capitalist market is not like the reciprocal exchange and gift economies of our prehistoric ancestors. It descended to us from authoritarian ramparts, by way of colonial subjugation, race-based slavery and violent ethnic cleansing. No wonder that the capitalist market is a bare-knuckled fight in which each participant must attempt to end the day with more money than they began it with.

    Even for a bourgeois economist like John Maynard Keynes it was apparent that the accumulation of money had bound society to “pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful human qualities into the position of the highest virtues.”5 Under such conditions, scams are incentivized, price gouging is profitable, environmental stewardship is burdensome, stock swindles are rife and labour appears only as a costly appendage to production.

    Stamping the capitalist market with the title of “free” does not dress the window much either. Engels pointed out the logical fallacy of the “free” aphorism when critiquing a proposal to repackage Germany as a free state: “Taken in its grammatical sense, a free state is one where the state is free in relation to its citizens, hence a state with a despotic government.”

    Once the great mass of people is subordinated to market forces by way of survival, the market is free to act on them in despotic ways. The workplace is a totalitarian encampment where using the bathroom and eating lunch are objects of scrutiny, the threat of termination hanging like the sword of Damocles over the necks of employees.6 Meanwhile, bills accrue. Small businesses collapse under the weight of competition. Houses are seized by debt obligations and families go hungry by price shocks. In the absence of income, the free market pushes desperate participants into drug peddling and sex trafficking. Art and corporate advertising become salacious performances demanding attention from a tired population on the go. Sterile escapism is rampant. Information deteriorates to the standards of minds made lazy and politics is a bloodsport. Every stripper pole, inside trade and contract killing can be rationalized so long as it pries away a profit. When Adam Smith likened the market to an “invisible hand” he failed to mention how often it would punch us in the face.

    Past the Paradigm

    The multitude of social ills kicked up by a despotic market which commands labour and demands consumption is the reason why the free market utopia is a mirage, at best. Even a conservative thinker like John Gray adroitly pointed out that cultural conservatism is not compatible with free market, laissez-faire policies.7 The conservative rebellion against corporate diversity policies and global trade are examples of misalignment between the capitalist market and traditional values.

    If the political theatre is the stage of class conflict, the current tug-of-war between interventionist modern liberals and the protectionist populist right wing demonstrates that there is no room in the troupe for free market fundamentalists. The market has already blazed a trail for mass migration, menacing technologies, medical bankruptcy, sky-high utility prices, the outsourcing of decent jobs and hollowing out of public infrastructure. All that’s left to do is fight amongst the wreckage left in its wake.

    The capitalist paradigm has only cemented over a scant 300 years of human history. Capitalism has visited humanity with a progression out of feudalism but its market is neither efficient or rational, as the swelling expanse of global slum dwellers, overflowing landfills and microplastics in our bloodstream attest.

    What is needed is not the expansion of the capitalist marketplace but its sublation: a pulling forward of our latent cooperative instincts into a universal exchange that rewards economic actors according to the satisfaction of human need rather than profit. In such a post-capitalist market, the gift economy and reciprocal exchange reappear. Rewards accrue to the doctors curing cancer; the innovators shortening the workday; the oceanographers detoxifying our waterways; the engineers constructing comfortable housing and transport for all. For humanity to have a future we must not oppose the current paradigm but go beyond it.

    Thanks for reading!

    Footnotes:

    1. Epictetus, Discourses and Selected Writings (Penguin, 2008): 15. ↩︎

    2. Fredric Jameson, Valences of the Dialectic (Verso, 2010): 293. ↩︎

    3. Jürgen Kocka, Capitalism: A Short History (Princeton University Press, 2016): 43. ↩︎

    4. David Harvey, The Limits to Capital (Verso, 2018): 321. ↩︎

    5. Keynes as quoted in David Harvey, A Companion to Marx’s Grundrisse (Verso, 2023): 83. ↩︎

    6. David Harvey, A Companion to Marx’s Capital (Verso, 2010): 176. ↩︎

    7. John Gray discussed in Jameson, Valences, 463-4. ↩︎
  • Capitalism

    Capitalism

    This article is part of a series on classical Marxism.

    There is a claim that capitalism is defined by free trade and markets but this is an obscurity. Capitalism utilizes both markets and economic planning where beneficial, just like every other economic system has done—including hunter-gatherers, ancient Rome and feudal Japan. The definition of capitalism is actually very simple and specific: private ownership of production and wage labour. These characteristics may seem unimpressive from today’s vantage point but their fruition conceals a long and shady history.

    In Capitalist Realism, Mark Fisher points out the prevailing sentiment of 21st century disempowerment: “It is easier to imagine the end of the world than the end of capitalism.”1 As recent movies and television series indicate, there is a fascination with the apocalypse and barren moral landscapes that burn on our consciousness. Now that capitalism is concretized as the social reality in most of the world, the mind’s eye has tunnel vision regarding it. However, this anguish is not a distinct capitalist phenomena. Eschatology is an ancient subject. Generations of medieval peasants saw little change, despite the shifting boundaries of feudal fiefdoms and principalities. The Roman Empire and Ancient Egypt were supposed to last forever. And the Paleolithic era nearly did. For so many who lived and died in the past, it must have also been easier to imagine the end of the world than the end of their own way of life.

    That would not be true of every single generation—after all, there are active periods of revolution where artifacts and norms are torn down within the lifetime of individuals. And if anything distinguishes capitalism from what has preceded it, it must be the fixed quality of hectic upheavals. Karl Marx observed: “Constant revolutionizing of production, uninterrupted disturbance of all soil conditions, everlasting uncertainty and agitation distinguish the [capitalist] epoch from all earlier ones.”2 And again: “Modern industry never views or treats the existing form of a productive process as the definitive one. Its technical basis is therefore revolutionary, whereas all earlier modes of production were essentially conservative.”3 The nature of capitalism is therefore paradoxical—its end is unimaginable but so too is any status quo within it. Revolutionary change—in consumer goods, living costs, warfare, culture, nature and demographics—are always descending upon us under capitalism.

    Primitive communism, ancient slave societies and feudalism all arose gradually. The phase transitions triggered by natural human evolution, a warming Neolithic climate and the supplanting of Rome’s slave economy with feudalism all took place over centuries. Not so with capitalism. If capitalism is a spinning-hot mess of instability, conflict, technological invention and brutal exploitation, it’s because it was born in a frenzy of looting, genocidal violence, biological contagion and piracy. Feudal Europe was a pressure cooker of mounting debts, stifled trade routes, Catholic Inquisitions, bubonic plague and a bridled merchant class. Capitalism did not really emerge in the world—it exploded onto it the moment Columbus made landfall on Caribbean shores. Observing the golden adornments and timid nature of the Arawak people he encountered, Columbus salivated: “With fifty men we could subjugate them all and make them do whatever we want.”

    In a short matter of decades the indigenous societies, mired in less-advanced modes of production like primitive communism and slave economies, were broken to the thunder of Old World disease, technology and thirst for lucre. Gold and silver deposits in the Americas were drained by indigenous labour toiling under the swords of conquistadors, oceans were mercilessly exploited, vast tracts of land were cleared for plantations of sugar, tobacco and cotton, the African slave trade was engaged.4 From the European perspective, wealth seemed to amass from thin air, as all debts were paid far from home in the form of blood and environmental ruination. In a preview of what would later become the stock market, expeditions dedicated to pillaging native kingdoms were funded by investors risking capital for shares on future spoils. It was the ransacking of the Americas, the mass-utilization of African slaves and gunboat diplomacy in Asia that marked capitalism’s primitive accumulation stage. To follow still was the Industrial Revolution and formal colonization of South Asia, the Middle East and continental Africa.

    The concept of phase transition is also described as “the transformation of quantity into quality.” The pillaging of the Americas illustrates this, as a massive rupture to the feudal mode of production burst open once the natural and social wealth of two continents was exposed to those with armaments and the backing of mercantile investors. European land—the primary source of life and wealth through the feudal age—diminished in its preciousness, and the fortunes of the landed aristocracy diminished along with it. The massive surplus of inputs—precious metals, sugar, cotton, forced labour, etc.—was absorbed by the relatively small population of western Europe and forced a phase transition from a relatively closed and stable feudal system into a rabidly expansionary global capitalism.

    As land in Europe lost its importance in a rapidly evolving mode of production, pressure was applied to agriculture to squeeze more out of the lands. New rotation methods were implemented, new American crops like potatoes and corn were planted, new ploughs were deployed, peasants that had worked lands for generations were evicted by force. The separation of peasants from their livelihood on the land is how wage labour emerged. The collision between the masses of peasants dispossessed of their ancestral lands and a new class of capital owners is what gave birth to the modern system: 

    The historical conditions of [capitalism] are by no means given with the mere circulation of money and commodities. It can spring to life only when the owner of the means of production and subsistence meets in the market with the free labourer selling his labour-power. And this one historical condition comprises a world’s history. Capitalism, therefore, announces from its first appearance a new epoch in the process of social production.5

    Feudalism was being negated fast, especially in Britain where the Industrial Revolution began. The overwhelming amounts of resources flooding Europe spurred productive innovation in order to process it all. New forms of capital were merged into a fledgling factory system, such as steam power, milling machines, blast furnaces and power looms. But now the capital owner was faced with a unique problem posed by this new web of economic relations: overproduction. Too many goods could be produced for the domestic market to possibly absorb at a profit.

    Typical in the history of capitalism, the solution was found at the end of a gun. Leveraging their technological advantages, European states in the service of financial capital laid siege to India and China, the great powers of Asia. China became a dumping ground for opium and the Indian domestic economy collapsed as their market was flooded with cheap European textiles and manufactures. Much of South Asia and Africa were formally colonized, transformed into outlets for excess European production and becoming sites of resource extraction under systems of forced labour.

    It was these three broad motions that resulted in a world under capitalist domination. First, the pillaging of North and South America and genocidal exploitation of enslaved Africans and indigenous peoples. Second, the creation of a mass of wage labourers drawn from the European peasantry through enclosures that separated them from their land. Finally, the establishment of extractive colonies across almost the entirety of Asia and Africa. While these processes have continued to evolve rapidly over the 20th century to the present, the mechanism whereby one class extracts profit at the expense of another has not changed—it is baked into the logic of capitalism. The geographer, David Harvey, sums up capitalist history thus: 

    The transformation of labour, land and money into commodities rested on violence, cheating robbery, swindling and the like. The common lands were enclosed, divided and put up for sale as private property. The gold and silver that formed the initial money commodities were stolen from the Americas. The labour was forced off the land into the status of a “free” wage labourer who could be freely exploited by capital when not outright enslaved or indentured. Such forms of dispossession were foundational to the creation of capital. But even more importantly, they never disappeared.6

    It is difficult not to recognize capitalism as a zero-sum game when considering its history and present-day unfolding. Over a billion people in less-developed capitalist countries live in slums—a number projected to double by 2050. Over 700 “dead zones” without oxygen have formed in the ocean as a byproduct of heavy shipping traffic, plastic waste, overfishing and the acidification of waters by carbon emissions. Over 187 million people have died from wars involving capitalist competition over resources since the last century—and that number is climbing. Even in the core capitalist countries of the West, an increasing number of crises and epidemics are building—the mental health crisis, climate crisis, housing crisis, inflation crisis, drug epidemic, refugee crisis—with more to come. While its productive capacity is unquestionable, an enormous surplus is amassed by a small number of elite capital owners—close to 0.1% of the population—and arrives by a process of destabilizing exploitation, including international military coercion, imbalanced trade treaties and unmitigated pollution of the biosphere.

    It is the contention of classical Marxist philosophy that a positive-sum economy working for all is only possible along the lines of a democratic, classless economy that puts wealth creation and scientific discovery at the disposal of the working class. On progress under capitalism, Marx states:

    When a great social revolution shall have mastered the results of the bourgeois epoch, the markets of the world and the modern powers of production and subjected them to the common control of the most advanced peoples, then only will human progress cease to resemble that hideous pagan idol who would not drink the nectar but from the skulls of the slain.7

    Further Reading:

    Karl Marx, “The Future Results of British Rule in India.”

    ———–


    1. Mark Fisher, Capitalist Realism: Is There No Alternative? (Zero Books, 2009), 17. ↩︎

    2. Karl Marx and Friedrich Engels, The Communist Manifesto. ↩︎

    3. Karl Marx, Capital: Volume One (Ancient Wisdom Publishing, 2019), 318. ↩︎

    4. Ian Angus, “The Fishing Revolution and the Origins of Capitalism,” Monthly Review, Vol. 74, No. 10. ↩︎

    5. Karl Marx, Capital: Volume One (Ancient Wisdom Publishing, 2019), 120. ↩︎

    6. David Harvey, Seventeen Contradictions and the End of Capitalism (Oxford University Press, 2014), 57. ↩︎

    7. Karl Marx, “The Future Results of British Rule in India,” in Dispatches for the New York Tribune: Selected Journalism of Karl Marx (Penguin, 2007), 125. ↩︎