In Marxian economics and preceding theories,[1] the problem of primitive accumulation (also called previous accumulation, prior accumulation, or original accumulation) of capital concerns the origin of capital and therefore how class distinctions between possessors and non-possessors came to be.
Adam Smith's account of primitive-original accumulation depicted a peaceful process in which some workers laboured more diligently than others and gradually built up wealth, eventually leaving the less diligent workers to accept living wages for their labour.[2]Karl Marx rejected such accounts as 'insipid childishness' for their omission of the role of violence, war, enslavement, and conquest in the historical accumulation of land and wealth.[3] Marxist scholar David Harvey explains Marx's primitive accumulation as a process which principally "entailed taking land, say, enclosing it, and expelling a resident population to create a landless proletariat, and then releasing the land into the privatized mainstream of capital accumulation".[4]
Marx viewed the colonization of the Americas, the African slave trade, and the events surrounding the First Opium War and Second Opium War as important instances of primitive accumulation.[5]:14
The concept was initially referred to in various different ways, and the expression of an "accumulation" at the origin of capitalism began to appear with Adam Smith.[6] Smith, writing The Wealth of Nations in his native English, spoke of a "previous" accumulation;[7]Karl Marx, writing Das Kapital in German, reprised Smith's expression, by translating it to German as ursprünglich ("original, initial"); Marx's translators, in turn, rendered it into English as primitive.[1]James Steuart, with his 1767 work, is considered by some scholars to be the greatest classical theorist of primitive accumulation.[8]
Myths of political economy
In disinterring the origins of capital, Marx felt the need to dispel what he felt were religious myths and fairy tales about the origins of capitalism. Marx wrote:
This primitive accumulation plays in political economy about the same part as original sin in theology. Adam bit the apple, and thereupon sin fell on the human race. Its origin is supposed to be explained when it is told as an anecdote of the past. 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. 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 childishness is every day preached to us in the defence of property.
What must be explained is how the capitalist relations of production are historically established; in other words, how it comes about that means of production become privately owned and traded, and how capitalists can find workers on the labour market ready and willing to work for them because they have no other means of livelihood (also referred to as the "reserve army of labour").
Link with colonialism
At the same time as local obstacles to investment in manufactures are being overcome, and a unified national market is developing with a nationalist ideology, Marx sees a strong impulse to business development coming from world trade:
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. On their heels treads the commercial war of the European nations, with the globe for a theatre. It begins with the revolt of the Netherlands from Spain, assumes giant dimensions in England's Anti-Jacobin War, and is still going on in the opium wars against China, &c. The different moments of primitive accumulation distribute themselves now, more or less in chronological order, particularly over Spain, Portugal, Holland, France, and England. In England at the end of the 17th century, they arrive at a systematical combination, embracing the colonies, the national debt, the modern mode of taxation, and the protectionist system. These methods depend in part on brute force, e.g., the colonial system. But, they all employ the power of the state, the concentrated and organized force of society, to hasten, hot-house fashion, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition. Force is the midwife of every old society pregnant with a new one. It is itself an economic power.
According to Marx, the purpose of primitive accumulation is to privatize the means of production, so that the exploiting owner class can profit from the surplus labour of those who, lacking other means, must work for them.
Marx says that primitive accumulation means the expropriation of the direct producers and, more specifically, "the dissolution of private propertybased on the labour of its owner...Self-earned private property, that is based, so to speak, on the fusing together of the isolated, independent labouring-individual with the conditions of his labour, is supplanted by capitalistic private property, which rests on the exploitation of the nominally free labour of others, i.e., wage labour (emphasis added).[11]
Social relations of capitalism
In the last chapter of Capital, Volume I, Marx described the social conditions he thought necessary for capitalism with a comment about Edward Gibbon Wakefield's theory of colonization:
Wakefield discovered that in the Colonies, property in money, means of subsistence, machines, and other means of production, does not as yet stamp a man as a capitalist if there be wanting the correlative – the wage-worker, the other man who is compelled to sell himself of his own free-will. He discovered that capital is not a thing, but a social relation between persons, established by the instrumentality of things. Mr. Peel, he moans, took with him from England to Swan River, West Australia, means of subsistence and of production to the amount of £50,000. Mr. Peel had the foresight to bring with him, besides, 3,000 persons of the working-class, men, women, and children. Once arrived at his destination, 'Mr. Peel was left without a servant to make his bed or fetch him water from the river.' Unhappy Mr. Peel, who provided for everything except the export of English modes of production to Swan River![12]
This is indicative of Marx's more general fascination with settler colonialism, and his interest in how "free" lands—or, more accurately, lands seized from indigenous people—could disrupt capitalist social relations.[citation needed]
"Orthodox" Marxists[who?] see primitive accumulation as a process beginning in the late Middle Ages and finishing with the rise of capitalist industry, situated entirely within the transition from the feudal mode of production to the capitalist mode of production. However, this can be seen as a misrepresentation of both Marx's ideas and historical reality since feudal-type economies persist in various parts of the world, even in the 21st century.[This paragraph needs citation(s)]
Marx's description of primitive accumulation may also be seen as a special case of the general principle of capitalist market expansion. In part, trade grows incrementally, but often the establishment of capitalist relations of production involves force and violence. Transforming property relations means that assets previously owned by some people are no longer owned by them but by other people, and making people part with their assets in this way involves coercion. This is an ongoing process of expropriation, proletarianization and urbanization.
In his preface to Das Kapital, Vol. 1, Marx compares the situations of England and Germany and points out that less developed countries also face a process of primitive accumulation. Marx comments that "if, however, the German reader shrugs his shoulders at the condition of the English industrial and agricultural labourers, or in optimist fashion comforts himself with the thought that in Germany things are not nearly so bad, I must plainly tell him, "De te fabula narratur! (the tale is told of you!)
Marx was referring here to the expansion of the capitalist mode of production (not the expansion of world trade) through expropriation processes. He continues, "Intrinsically, it is not a question of the higher or lower degree of development of the social antagonism that results from the natural laws of capitalist production. It is a question of these laws themselves, of these tendencies working with iron necessity towards inevitable results. The country that is more developed industrially only shows to the less developed the image of its own future."[This paragraph needs citation(s)]
David Harvey's theory of accumulation by dispossession
David Harvey expands the concept of "primitive accumulation" to create a new concept, "accumulation by dispossession", in his 2003 book, The New Imperialism. Like Mandel, Harvey claims that the word "primitive" leads to a misunderstanding of the history of capitalism: that the original, "primitive" phase of capitalism is somehow a transitory phase that need not be repeated once commenced. Instead, Harvey maintains that primitive accumulation ("accumulation by dispossession") is a continuing process within the process of capital accumulation on a world scale. Because the central Marxian notion of crisis via "over-accumulation" is assumed to be a constant factor in the process of capital accumulation, the process of "accumulation by dispossession" acts as a possible safety valve that may temporarily ease the crisis. This is achieved by simply lowering the prices of consumer commodities (thus pushing up the propensity for general consumption), which in turn is made possible by the considerable reduction in the price of production inputs. Should the magnitude of the reduction in the price of inputs outweigh the reduction in the price of consumer goods, it can be said that the rate of profit will, for the time being, increase. Thus:
Access to cheaper inputs is, therefore, just as important as access to widening markets in keeping profitable opportunities open. The implication is that non-capitalist territories should be forced open not only to trade (which could be helpful) but also to permit capital to invest in profitable ventures using cheaper labour power, raw materials, low-cost land, and the like. The general thrust of any capitalist logic of power is not that territories should be held back from capitalist development, but that they should be continuously opened up.
Harvey's theoretical extension encompasses more recent economic dimensions such as intellectual property rights, privatization, and predation and exploitation of nature and folklore.
Privatization of public services puts enormous profit in capitalists' hands. If it belonged to the public sector, this profit would not exist. In this sense, profit is created by the dispossession of peoples or nations. Destructive industrial use of the environment is similar because the environment "naturally" belongs to everyone, or to no one; factually, it "belongs" to whoever lives there.
Multinational pharmaceutical companies collect information about how herbs or other natural medicines are used among natives in less-developed countries, do some R&D to find the materials that make those natural medicines effective, and patent the findings. By doing so, multinational pharmaceutical companies can now sell the medicine to the natives, who are the original source of the knowledge that made the production of medicine possible. That is, dispossession of folklore (knowledge, wisdom, and practice) through intellectual property rights.
David Harvey also argues that accumulation by dispossession is a temporary or partial solution to over-accumulation. Because accumulation by dispossession makes raw materials cheaper, the profit rate can at least temporarily go up.
Harvey's interpretation has been criticized by Brass,[13] who disputes the view that what is described as present-day primitive accumulation, or accumulation by dispossession, entails proletarianization. Because the latter is equated by Harvey with the separation of the direct producer (mostly smallholders) from the means of production (land), Harvey assumes this results in the formation of a free workforce. By contrast, Brass points out that in many instances, the process of depeasantization leads to workers who are unfree because they are unable personally to commodify or recommodify their labour, by selling it to the highest bidder.
Schumpeter's critique of Marx's theory
The economist Joseph Schumpeter disagreed with the Marxian explanation of the origin of capital, because Schumpeter did not believe in exploitation. In liberal economic theory, the market returns to all people the exact value they have provided it; capitalists are just people who are very adept at saving and whose contributions are especially magnificent, and they do not take anything away from other people or the environment.[citation needed] Liberals believe that capitalism has no internal flaws or contradictions; only external threats.[citation needed] To liberals, the idea of the necessity of violent primitive accumulation to capital is particularly incendiary. Schumpeter wrote rather testily:
[The problem of Original Accumulation] presented itself first to those authors, chiefly to Marx and the Marxists, who held an exploitation theory of interest and had, therefore, to face the question of how exploiters secured control of an initial stock of 'capital' (however defined) with which to exploit – a question which that theory per se is incapable of answering, and which may obviously be answered in a manner highly uncongenial to the idea of exploitation.
—Joseph Schumpeter, Business Cycles, Vol. 1, New York; McGraw-Hill, 1939, p.229.
Schumpeter argued that imperialism was not a necessary jump-start for capitalism, nor is it needed to bolster capitalism, because imperialism pre-dated capitalism. Schumpeter believed that, whatever the empirical evidence, capitalist world trade could in principle expand peacefully. Where imperialism occurs, Schumpeter asserted, it has nothing to do with the intrinsic nature of capitalism itself, or of capitalist market expansion. The distinction between Schumpeter and Marx here is subtle. Marx claimed that capitalism requires violence and imperialism—first, to kick-start capitalism with a pile of booty and to dispossess a population to induce them to enter into capitalist relations as workers, and then to surmount the otherwise-fatal contradictions generated within capitalist relations over time. Schumpeter's view was that imperialism is an atavistic impulse pursued by a state, independent of the interests of the economic ruling class.
Imperialism is the object-less disposition of a state to expansion by force without assigned limits... Modern Imperialism is one of the heirlooms of the absolute monarchical state. The "inner logic" of capitalism would have never evolved it. Its sources come from the policy of the princes and the customs of a pre-capitalist milieu. But even export monopoly is not imperialism and it would never have developed to imperialism in the hands of the pacific bourgeoisie. This happened only because the war machine, its social atmosphere, and the martial will were inherited and because a martially oriented class (i.e., the nobility) maintained itself in a ruling position with which of all the varied interests of the bourgeoisie the martial ones could ally themselves. This alliance keeps alive fighting instincts and ideas of domination. It led to social relations which perhaps ultimately are to be explained by relations of production but not by the productive relations of capitalism alone.
—Joseph A. Schumpeter, The Sociology of Imperialism (1918).
Anti-capitalism is a political ideology and movement encompassing a variety of attitudes and ideas that oppose capitalism. In this sense, anti-capitalists are those who wish to replace capitalism with another type of economic system, such as socialism or communism.
Accumulation by dispossession is a concept presented by the Marxist geographer David Harvey. It defines neoliberal capitalist policies that result in a centralization of wealth and power in the hands of a few by dispossessing the public and private entities of their wealth or land. Such policies are visible in many western nations from the 1970s and to the present day. Harvey argues these policies are guided mainly by four practices: privatization, financialization, management and manipulation of crises, and state redistributions.
Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form of profit, rent, interest, royalties or capital gains. The aim of capital accumulation is to create new fixed and working capitals, broaden and modernize the existing ones, grow the material basis of social-cultural activities, as well as constituting the necessary resource for reserve and insurance. The process of capital accumulation forms the basis of capitalism, and is one of the defining characteristics of a capitalist economic system.
Simple commodity production, also known as petty commodity production, is a term coined by Friedrich Engels to describe productive activities under the conditions of what Karl Marx had called the "simple exchange" of commodities, where independent producers trade their own products. The use of the word simple does not refer to the nature of the producers or of their production, but rather to the relatively simple and straightforward exchange processes involved.
In Marxian economics, economic reproduction refers to recurrent processes. Michel Aglietta views economic reproduction as the process whereby the initial conditions necessary for economic activity to occur are constantly re-created. Marx viewed reproduction as the process by which society re-created itself, both materially and socially.
Criticism of capitalism is a critique of political economy that involves the rejection of, or dissatisfaction with the economic system of capitalism and its outcomes. Criticisms typically range from expressing disagreement with particular aspects or outcomes of capitalism to rejecting the principles of the capitalist system in its entirety.
Capital. A Critique of Political Economy. Volume I: The Process of Production of Capital is the first of three treatises that make up Das Kapital, a critique of political economy by the German philosopher and economist Karl Marx. First published on 14 September 1867, Volume I was the product of a decade of research and redrafting and is the only part of Das Kapital to be completed during Marx's life. It focuses on the aspect of capitalism that Marx refers to as the capitalist mode of production or how capitalism organises society to produce goods and services.
Capital. A Critique of Political Economy. Volume III: The Process of Capitalist Production as a Whole is the third volume of Capital: Critique of Political Economy. It was prepared by Friedrich Engels from notes left by Karl Marx and published in 1894.
Throughout modern history, a variety of perspectives on capitalism have evolved based on different schools of thought.
In Marxist theory and Marxian economics, the immiseration thesis, also referred to as emiseration thesis, is derived from Karl Marx's analysis of economic development in capitalism, implying that the nature of capitalist production stabilizes real wages, reducing wage growth relative to total value creation in the economy. Even if real wages rise, therefore, the overall labor share of income decreases, leading to the increasing power of capital in society.
In the Marxist theory of historical materialism, a mode of production is a specific combination of the:
In Karl Marx's critique of political economy and subsequent Marxian analyses, the capitalist mode of production refers to the systems of organizing production and distribution within capitalist societies. Private money-making in various forms preceded the development of the capitalist mode of production as such. The capitalist mode of production proper, based on wage-labour and private ownership of the means of production and on industrial technology, began to grow rapidly in Western Europe from the Industrial Revolution, later extending to most of the world.
In Marxian economics, surplus value is the difference between the amount raised through a sale of a product and the amount it cost to manufacture it: i.e. the amount raised through sale of the product minus the cost of the materials, plant and labour power. The concept originated in Ricardian socialism, with the term "surplus value" itself being coined by William Thompson in 1824; however, it was not consistently distinguished from the related concepts of surplus labor and surplus product. The concept was subsequently developed and popularized by Karl Marx. Marx's formulation is the standard sense and the primary basis for further developments, though how much of Marx's concept is original and distinct from the Ricardian concept is disputed. Marx's term is the German word "Mehrwert", which simply means value added, and is cognate to English "more worth".
The socialist mode of production, or simply (Marxist) socialism or communism as Karl Marx and Friedrich Engels used the terms communism and socialism interchangeably, is a specific historical phase of economic development and its corresponding set of social relations that emerge from capitalism in the schema of historical materialism within Marxist theory. The Marxist definition of socialism is that of production for use-value, therefore the law of value no longer directs economic activity. Marxist production for use is coordinated through conscious economic planning. According to Marx, distribution of products is based on the principle of "to each according to his needs"; Soviet models often distributed products based on the principle of "to each according to his contribution". The social relations of socialism are characterized by the proletariat effectively controlling the means of production, either through cooperative enterprises or by public ownership or private artisanal tools and self-management. Surplus value goes to the working class and hence society as a whole.
Capital: A Critique of Political Economy, also known as Capital, is a foundational theoretical text in materialist philosophy and critique of political economy written by Karl Marx, published as three volumes in 1867, 1885, and 1894. The culmination of his life's work, the text contains Marx's analysis of capitalism, to which he sought to apply his theory of historical materialism "to lay bare the economic law of motion of modern society", following from classical political economists such as Adam Smith and David Ricardo. The text's second and third volumes were completed from Marx's notes after his death and published by his colleague Friedrich Engels. Das Kapital is the most cited book in the social sciences published before 1950.
Marxian economics, or the Marxian school of economics, is a heterodox school of political economic thought. Its foundations can be traced back to Karl Marx's critique of political economy. However, unlike critics of political economy, Marxian economists tend to accept the concept of the economy prima facie. Marxian economics comprises several different theories and includes multiple schools of thought, which are sometimes opposed to each other; in many cases Marxian analysis is used to complement, or to supplement, other economic approaches. Because one does not necessarily have to be politically Marxist to be economically Marxian, the two adjectives coexist in usage, rather than being synonymous: They share a semantic field, while also allowing both connotative and denotative differences.
The proletariat is the social class of wage-earners, those members of a society whose only possession of significant economic value is their labour power. A member of such a class is a proletarian or a proletaire. Marxist philosophy regards the proletariat under conditions of capitalism as an exploited class—forced to accept meager wages in return for operating the means of production, which belong to the class of business owners, the bourgeoisie.
Crisis theory, concerning the causes and consequences of the tendency for the rate of profit to fall in a capitalist system, is associated with Marxian critique of political economy, and was further popularised through Marxist economics.
In the theoretical works of Karl Marx and Friedrich Engels and subsequent Marxist writers, socialization is the process of transforming the act of producing and distributing goods and services from a solitary to a social relationship and collective endeavor. With the development of capitalism, production becomes centralized in firms and increasingly mechanized in contrast to the pre-capitalist modes of production where the act of production was a largely solitary act performed by individuals. Socialization occurs due to centralization of capital in industries where there are increasing returns to scale and a deepening of the division of labor and the specialization in skills necessary for increasingly complex forms of production and value creation. Progressive socialization of the forces of production under capitalism eventually comes into conflict with the persistence of relations of production based on private property; this contradiction between socialized production and private appropriation of the social product forms the impetus for the socialization of property relations (socialism).
The following outline is provided as an overview of and topical guide to Marxism:
↑ Adam Smith (1776). "Introduction". The Wealth of Nations. Vol.Book II: On the Nature, Accumulation, and Employment of Stock. ...the accumulation of stock must, in the nature of things, be previous to the division of labour...
↑ Karl Marx's Capital, vol I Ch. 26, states "The whole movement, therefore, seems to turn in a vicious circle, out of which we can only get by supposing a primitive accumulation (previous accumulation of Adam Smith) preceding capitalistic accumulation; an accumulation not the result of the capitalistic mode of production, but its starting point." referring to Adam Smith's Wealth, Bk II introduction, "This accumulation must, evidently, be previous to his applying his industry for so long a time to such a peculiar business."
Tom Brass (2011) Labour Regime Change in the Twenty-First Century: Unfreedom, Capitalism and Primitive Accumulation. Published by Brill (Leiden), ISBN978-90-04-20247-4.
Raymond Aron, "What Empires cost and what profits they bring" (1962), reprinted in Raymond Aron, The Dawn of Universal History. New York: Basic Books, 2002, pp.407–418.
Ankie Hoogvelt, Globalisation and the Postcolonial World: The New Political Economy of Development.
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