ECOP2012 Social Foundations of Modern Capitalism
Professor Adam D. Morton
Blog site Progress in Political Economy (PPE): http ://ppesydney.net /
Twitter: @AdamDavidMorton
#ECOP2012
Lecture 2: Market Dependence and Social Property Relations
Introduction: What is capitalism?
Social Property Relations Approach
The Political Economy of European state formation
Conclusion: strengths and weaknesses
1. Introduction: What is capitalism?
Milton Friedman’s view of capitalism:
http://www.youtube.com/watch?v=eWrImRnH6bw
Capitalism = a ‘system of free enterprise’
an economic system based on ‘free’ markets
a political system based on voluntary exchange
But is capitalism based on voluntary exchange and the universal freedoms of liberty and markets?
How are both appropriators and producers compelled to act according to certain imperatives competition, profit-maximisation, pressure to constantly improve labour productivity, and accumulation related to market-dependence?
1. Introduction: What is capitalism?
A theoretical and historical question: the historical specificity of capitalism.
Karl Marx, Capital, Vol.1 (pp. 270-2): the possessor of labour-power is compelled to offer for sale, as a commodity, that very labour-power in order to reproduce his/her means of subsistence
Karl Marx, Capital, Vol.1 (p. 536): squeezing out more labour in a given time leads to the intensification of labour that also ‘compels the capitalist to exercise the strictest economy in the cost of production’
1. Introduction: What is capitalism?
Market compulsion?: both appropriators and producers are dependent on the market for conditions of their self-reproduction
Producers (proletariat) are divorced from their means of subsistence and only have their labour to sell in order to reproduce material well being.
Appropriators (bourgeoisie) owners of the means of production can perform the powers of reproduction through ‘purely’ economic powers of the ‘market’ without relying on extra-economic political coercion of the ‘state’.
the state and the market, the political and the economic, appear as two separate entities under capitalism but are internally related aspects of the social relations of production.
It is these particular imperatives that mark capitalism off from other social forms, such as feudalism, resulting in a system of social property relations (capitalism).
2. Social Property Relations
‘Political Marxism’: primacy of class struggle, rather than developments in the forces of production, as a determinant of historical developments: Ellen Meiksins Wood; Robert Brenner; Benno Teshke; Charles Post.
Economic development can only be fully understood as the product of established structures of class relations or social property relations.
Different property relations impose strict limits and possibilities on patterns of economic development.
Conflictive relations of property link direct producers on one hand and appropriators on the other hand revolving around surplus-extraction.
2. Social Property Relations
Feudalism: pre-capitalist social property relations
Agrarian property privately controlled by a class of feudal lords who extract a surplus from the peasants through politico-legal compulsion.
‘extra-economic’ coercion is exercised through labour services, rents in kind, customary dues owed to the individual lord by the peasant.
Feudalism: nobles (lords) fused the juridical and military protection of the serfs (peasantry) within a system of parcellised sovereignty.
2. Social Property Relations
Capitalism: extraction of surplus is 'non-political' associated with different property relations
Surplus extraction is indirectly conducted through a contractual relation between appropriators (owners of the means of production) and direct producers (those who only have their labour power to sell).
Direct producers are compelled to sell their labour power for a wage mediated by the purely ‘economic’ mechanisms of the market.
The market is a compulsion to which appropriators (capital) and producers (labour) are subjected through competition, profit maximisation and survival.
3. The Political Economy of European state formation
A social property relations approach is able to distinguish between the different outcomes of the crisis of feudalism that faced the European economy in C17th;
Ensuing class struggles resulted in divergent regional paths of social and economic development across Europe.
England (agrarian capitalism); France (absolutism); Central and Eastern Europe (re-feudalisation)
3. The Political Economy of European state formation
Western Europe: England
emergence of commercial landlords, capitalist tenant farmers, and landless labourers;
‘tripartite capitalist hierarchy’: commercial landlord / capitalist tenant / wage labourer
reliance on ‘economic’ modes of appropriation: capital investments, new technologies, large scale operations;
Only in England was there the simultaneous emergence of state formation and capitalist development that went hand in hand with each other to give the apparent separation of state and civil society leading to the constitution of the capitalist state.
3. The Poltiical Economy of European state formation
Central and Eastern Europe:
Lords politically reconstituted themselves through a greater concentration of power within large serf-estates (magnates) alongside growing centralised states;
A region of 'servile agriculture' covered parts of Germany, a region running east of the river Elbe, the western frontiers of what is today the Czech and Slovak Republics, and then south to Trieste cutting off eastern and western Austria;
Re-feudalisation of the peasantry within a centralised state.
3. The Political Economy of European state formation
Western Europe: France
centralisation of power within absolutism and a ‘tax/office nexus’: the state became a centralised apparatus of surplus extraction;
dependence of the strong centralised absolutist state on peasant production: halting capitalist class relation
(free)peasant / landlord / centralising state
war as a means of political accumulation leading to state-building efforts: dynastic state-building efforts.
4. Conclusions: strengths
Offers an explanation of the historical origins of the transition to capitalism.
Focuses on the conditions of competition, profit maximisation and survival that equally compel producers and appropriators (proletariat and bourgeoisie) to compete on the market.
Highlights the internal relations of the ‘state’ and ‘market’ through a focus on the social relations of production.
‘The “sphere” of production is dominant not in the sense that it stands apart from or precedes these juridical-political forms, but rather in the sense that these forms are precisely forms of production, attributes of a particular productive system’ ─ Ellen Meiksins Wood, Democracy Against Capitalism: 27.
4. Conclusions: weaknesses
Was there a clear ‘break’ from pre-capitalist social relations [feudalism] to capitalist social relations [modernity]?
Marx: ‘in periods of the dissolution of pre-bourgeois relations, there sporadically occur free workers’ [Grundrisse, 469].
‘Political’ Marxism: class struggle is divorced from the objective conditions of a specific mode of production[Guy Bois].
Eurocentrism?: capitalism is assumed to expand as a wave of outward diffusion from western Europe to the non-European periphery [J. M. Blaut, The Colonizer’s Model of the World (1993)] ;
Capitalism is assumed to be a self-expanding dynamic within the core of the West. What about the Rest?