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Chapter Four--Primitive Accumulation and the Rise of Capitalism


In the Introduction to Part Two, we referred to the "nursery school tale" of primitive accumulation, which has long served the capitalists as a legitimizing myth. In fact, capitalist apologists seldom even address the issue, if they can avoid it. More often, they take the existing distribution of property and economic power as a given. Their most dumbed-down line of argument, typically, simply starts with the unquestioned fact that some people just happen to own the means of production, and that others need access to these means and advances to live on while they work. From this it follows that, if the owners of capital are kind enough to "provide" this "factor of production" for the use of labor, they are entitled to a fair recompense for their "service" or "abstinence."

The inadequacy of this approach should be clear from even the most cursory consideration. An apologist for state socialism might just as easily say, to a free market advocate in a state-owned economy, that he wouldn't have a job if the state didn't "provide" it. An apologist for the manorial economy could likewise admonish the ungrateful peasant that all his labor would avail him nothing without the access to the land that the feudal landlord graciously "provided." The question remains: how did those who control access to the means of production come to be in this position? As Oppenheimer pointed out in his criticism of Marshall, no discussion of the laws governing the distribution of product can be meaningful without first considering the "primal distribution of the agents (factors) of production...."1

To the extent that they are forced to address this question at all, capitalist apologists fall back on the above-mentioned nursery tale, by which existing class divisions arose naturally from an "original state of equality, ...from no other cause than the exercise of the economic virtues of industry, frugality and providence." There is, in this process, "no implication... of any extra-economic power."2

As Marx summarized it, the legend of primitive accumulation was a sort of variation on the fable of the ant and the grasshopper:

In times long gone by there were two sorts of people: one, the diligent, intelligent, and, above all, frugal élite; 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. And from this original sin dates the poverty of the great majority that, despite all its labour, has up to now nothing to sell but itself, and the wealth of the few that increases constantly although they have long ceased to work. Such insipid childishness is every day preached to us in the defence of property.... In actual history it is notorious that conquest, enslavement, robbery, murder, briefly, force, play the great part.3

Perhaps Engels should have titled his work Anti-Marx, instead of Anti-Dühring.

Oppenheimer also recounted this edifying fable, in language quite similar to that of Marx. Since, however, Oppenheimer was a free market socialist like Hodgskin and Tucker, he was (unlike Marx and Engels) in no danger of subsequent embarrassment over the implications of rejecting the bourgeois fairy tale.

Somewhere, in some far-stretching, fertile country, a number of free men, of equal status, form a union for mutual protection. Gradually they differentiate into property classes. Those best endowed with strength, wisdom, capacity for saving, industry and caution, slowly acquire a basic amount of real or movable property; while the stupid and less efficient, and those given to carelessness and waste, remain without possessions. The well-to-do lend their productive property to the less well-off in return for tribute, either ground-rent or profit, and become thereby continually richer, while the others always remain poor.... The primitive state of free and equal fellows becomes a class State, by an inherent law of development, because in every conceivable mass of men there are, as may readily be seen, strong and weak, clever and foolish, cautious and wasteful ones.4

This ahistorical myth survived the twentieth century, and is still alive and well--at least so long as it is not challenged by the historically literate. It was stated by Mises in Human Action:

"The factory owners did not have the power to compel anybody to take a factory job. They could only hire people who were ready to work for the wages offered to them. Low as these wage rates were, they were nonetheless much more than these paupers could earn in any other field open to them."5

It can be illustrated by any number of boilerplate articles in The Freeman: Ideas on Liberty, debunking the "myth" of dark satanic mills or Third World sweatshops, on the ground that laborers found them preferable to "available alternatives":

But are the “low-wage, non-union” Ecuadorian laborers better off working now for some foreign corporation? Apparently they think so, or else they would have stayed with what they were doing previously. (Would you leave your job for one with less pay and worse conditions?) [Barry Loberfeld. "A Race to the Bottom" (July 2001).]

People line up in China and Indonesia and Malaysia when American multinationals open a factory. And that is because even though the wages are low by American standards, the jobs created by those American firms are often some of the best jobs in those economies. [Russell Roberts. "The Pursuit of Happiness: Does Trade Exploit the Poorest of the Poor?" (September 2001)]

What the Industrial Revolution made possible, then, was for these people, who had nothing else to offer to the market, to be able to sell their labor to capitalists in exchange for wages. That is why they were able to survive at all.... As Mises argues, the very fact that people took factory jobs in the first place indicates that these jobs, however distasteful to us, represented the best opportunity they had. [Thomas E. Woods, Jr. "A Myth Shattered: Mises, Hayek, and the Industrial Revolution" (November 2001)]

In nineteenth-century America, anti-sweatshop activism was focused on domestic manufacturing facilities that employed poor immigrant men, women, and children. Although conditions were horrendous, they provided a means for many of the country's least-skilled people to earn livings. Typically, those who worked there did so because it was their best opportunity, given the choices available....

It is true that the wages earned by workers in developing nations are outrageously low compared to American wages, and their working conditions go counter to sensibilities in the rich, industrialized West. However, I have seen how the foreign-based opportunities are normally better than the local alternatives in case after case, from Central America to Southeast Asia. [Stephan Spath, "The Virtues of Sweatshops" (March 2002)]

The fairy tale was retold recently by Radley Balko, who referred to Third World sweatshops as "the best of a series of bad employment options available" to laborers there.6 Within a couple of days, this piece was recirculated over the "free market" [sic] blogosphere, along with numerous comments to the effect that "sweatshops are far superior to third-world workers' next best options...," or to similar effect.7

This school of libertarianism has inscribed on its banner the reactionary watchword: "Them pore ole bosses need all the help they can get." For every imaginable policy issue, the good guys and bad guys can be predicted with ease, by simply inverting the slogan of Animal Farm: "Two legs good, four legs baaaad." In every case, the good guys, the sacrificial victims of the Progressive State, are the rich and powerful. The bad guys are the consumer and the worker, acting to enrich themselves from the public treasury. As one of the most egregious examples of this tendency, consider Ayn Rand's characterization of big business as an "oppressed minority," and of the Military-Industrial Complex as a "myth or worse."

The ideal "free market" society of such people, it seems, is simply actually existing capitalism, minus the regulatory and welfare state: a hyper-thyroidal version of nineteenth century robber baron capitalism, perhaps; or better yet, a society "reformed" by the likes of Pinochet, the Dionysius to whom Milton Friedman and the Chicago Boys played Aristotle.

Vulgar libertarian apologists for capitalism use the term "free market" in an equivocal sense: they seem to have trouble remembering, from one moment to the next, whether they’re defending actually existing capitalism or free market principles. So we get the standard boilerplate article in The Freeman arguing that the rich can’t get rich at the expense of the poor, because "that’s not how the free market works"--implicitly assuming that this is a free market. When prodded, they’ll grudgingly admit that the present system is not a free market, and that it includes a lot of state intervention on behalf of the rich. But as soon as they think they can get away with it, they go right back to defending the wealth of existing corporations on the basis of "free market principles."

The capitalist myth of primitive accumulation cannot stand up either to logic or to the evidence of history; by the two together, it has been smashed beyond recovery. Oppenheimer demonstrated the impossibility of such primitive accumulation by peaceful means. Exploitation could not have arisen in a free society, by the working of the marketplace alone.

The proof is as follows: All teachers of natural law, etc., have unanimously declared that the differentiation into income-receiving classes and propertyless classes can only take place when all fertile lands have been occupied. For so long as man has ample opportunity to take up unoccupied land, "no one," says Turgot, "would think of entering the service of another"; we may add, "at least for wages, which are not apt to be higher than the earnings of an independent peasant working an unmortgaged and sufficiently large property"; while mortgaging is not possible so long as land is yet free for the working or taking, as free as air and water....

The philosophers of natural law, then, assumed that complete occupancy of the ground must have occurred quite early, because of the natural increase of an originally small population. They were under the impression that at their time, in the eighteenth century, it had taken place many centuries previous, and they naively deduced the existent class aggroupment from the assumed conditions of that long-past point of time.8

But on examination, Oppenheimer pointed out, the land could not have been occupied by natural and economic means. Even in the twentieth century, and even in the Old World, the population was not sufficient to bring all arable land into cultivation.9

If, therefore, purely economic causes are ever to bring about a differentiation into classes by the growth of a propertyless laboring class, the time has not yet arrived; and the critical point at which ownership of land will cause a natural scarcity is thrust into the dim future--if indeed it can ever arrive.10

The land had, indeed, been "occupied"--but not through the economic means of individual appropriation by cultivation. It had been politically occupied by a ruling class, acting through the state.

As a matter of fact, ...for centuries past, in all parts of the world, we have had a class State, with possessing classes on top and a propertyless laboring class at the bottom, even when population was much less dense than it is to-day. Now it is true that the class State can arise only where all fertile acreage has been occupied completely; and since I have shown that even at the present time, all the ground is not occupied economically, this must mean that it has been occupied politically. Since land could not have acquired "natural scarcity," the scarcity must have been "legal." This means that the land has been preempted by a ruling class against its subject class, and settlement prevented.11

Establishing this does not, by any means, depend simply on such deductive arguments. The political preemption of the land is a fact of history. The basic facts, largely beyond serious controversy, are accessible in a large body of secondary works by such radical historians as J.L. and Barbara Hammond, E. G. Hobsbawm, and E. P. Thompson.

Capitalism, arising as a new class society directly from the old class society of the Middle Ages, was founded on an act of robbery as massive as the earlier feudal conquest of the land. It has been sustained to the present by continual state intervention to protect its system of privilege, without which its survival is unimaginable. The current structure of capital ownership and organization of production in our so-called "market" economy, reflects coercive state intervention prior to and extraneous to the market. From the outset of the industrial revolution, what is nostalgically called "laissez-faire" was in fact a system of continuing state intervention to subsidize accumulation, guarantee privilege, and maintain work discipline.

Accordingly, the single biggest subsidy to modern corporate capitalism is the subsidy of history, by which capital was originally accumulated in a few hands, and labor was deprived of access to the means of production and forced to sell itself on the buyer's terms. The current system of concentrated capital ownership and large-scale corporate organization is the direct beneficiary of that original structure of power and property ownership, which has perpetuated itself over the centuries.