Dialogue: Why Did Capitalism Win?

Against the Current, No. 95, November/December 2001

Peter Drucker

Ellen Meiksins Wood’s essay “Eurocentric anti-Eurocentrism” (ATC 92) and Christopher McAuley’s response (ATC 94) touched on a number of issues relating to the origins of capitalism,  Our symposium continues with this contribution by Peter Drucker, a long-time advisory editor of Against the Current who has worked for several years in Amsterdam for the International Institute for Research and Education.  He is the editor of the newly published Third World lesbian/gay anthoogy Different Rainbows (London: Gay Men’s Press).

Ellen Meiksins Wood (EMW) is right, I think, in describing capitalism as a system with “certain very specific relations of production or social property relations, which generate very specific and unique `laws of motion.'” Marx and Engels pointed out over 150 years ago in the Communist Manifesto the tremendous productive potential of capitalism, which has made possible innumerable technological breakthroughs from railways in Marx and Engels’ time to e-commerce in our own.

She is convincing in her skepticism toward suggestions (apparently implied for instance in J.M. Blaut’s notion of “protocapitalism”) that the major non-European powers could have become capitalist, and outstripped Europe’s development, if only they like Europe had extracted enough wealth from colonies.

As she says, such suggestions ignore the necessity of specific, social and historical preconditions for European capitalism, particularly class struggle between lords and peasants and the rise of what Robert Brenner has called “market dependence.” In the absence of these transformations, “even the wealthiest and most advanced of these [non-European] societies did not set off the self-sustaining process of economic development which, in part of Europe, gave rise to capitalism and eventually its industrial form.” (EMW, ATC 29: 33)

So I agree with EMW that the “wealth amassed from colonial exploitation .  .  .  was not a necessary precondition of the origin of capitalism.” But she sidesteps a more decisive question when she says that colonial wealth “may have contributed substantially to further development.” (34)

That question demands more intensive study: More than how and why capitalism began, what enabled it to win out?  The point of this for the “Eurocentrism debate” is that the question of how capitalism originated may seem less important to many people, including radical historians, than the question of how it “developed further”and became capable of dominating the world.

If we imagine a world without any “further development” of capitalism in England and Holland[See note 1] after its seventeenth-century victory there, then we are imagining a world dominated by non-capitalist empires (French, Spanish, Portuguese, Ottoman, Persian, Mughal and Chinese).  We are imagining a world before the industrial revolution, without railways, let alone the Internet.  If capitalism had not developed much more after it originated in England and Holland, the rest of the world might never have been dominated by Europe or become capitalist.

“The social property relations at home in the imperial power” (EMW, 34) were clearly decisive for capitalism’s victory at home (particularly in England).  But it does not necessarily follow that they were a sufficient condition for capitalism’s victory in the rest of the world—and only a concrete historical analysis can determine whether that triumphant success and spread of capitalism depended on other factors besides capitalism’s laws of motion alone.

The proof of capitalism’s efficiency was only furnished during the nineteenth century, after the system was long established.  During the seventeenth and eighteenth centuries, however, when capitalist relations triumphed in English agriculture and then provided the basis for English industrialization, their superiority was far from clear.

Consider, for example, that throughout the eighteenth century, according to Marxist anthropologist and historian Eric Wolf, non-capitalist “India produced textiles both cheaper and technically better than any made by Europeans.” The English textile industry—the key industry of the early industrial revolution—secured its domestic market only through protectionist measures against Indian imports.[See note 2]

It is also well known that Britain had a chronic trade deficit with China until it forced China to lift its ban on the opium trade in the First Opium War of 1839-42.  Chinese manufactured goods like porcelain, produced under non-capitalist relations, thus did far better in the British market than anything produced by British capitalism did in the Chinese market.

The Power of Contingent External Factors

How then can we explain the fact that capitalist Britain defeated all its major adversaries, leading to new bourgeois revolutions in feudal absolutist states like France and Germany and to Europe’s joint domination of the world from the mid-nineteenth to early twentieth century?[See note 3]

Answering this question requires an enormous amount of research, which is continually ongoing and uncovering new evidence.  But surely an adequate explanation should at least take account of contingent factors external to capitalism.

These external factors include the decline, for their own internal reasons, of other, rival modes of production (such as Spanish feudalism and the modes of production predominating in South and East Asia).[See note 4]  They also include capitalism’s ability to profit from other productive relations like slavery, which as EMW says “were shaped by the logic of capitalism.” (35)

In the absence of these factors British capitalists would never have had the profits from tobacco, indigo, sugar or the Latin American carrying trade to invest in their Lancaster mills, or the market for their textiles in the rest of the world.

Without those profits and markets, there might not have been much of an industrial revolution.  And without the industrial revolution, it is open to doubt whether the British empire would have ever outclassed the Chinese, who as EMW says were “for a long time far ahead of Europe in general, not least in technology.” (33)[See note 5]

These are all might-have-beens, of course.  As a non- economic historian, I am not well qualified to say what were or were not crucial factors in the triumph of European capitalism.  But EMW provides little evidence on this point either.  I can at least summarize evidence, which she fails to mention, that strongly suggests that slavery and colonial expansion were crucial to European capitalisms ultimate triumph.

Her assertion that British colonialism was notable “for the prominence of white settler colonies, as distinct from other forms of imperial domination” (34-35), for example, sidesteps the question of India’s role in Britain’s capitalist development.  There is evidence that this role was far from negligible.

After the English victory at Plessy in 1757, the East India Company’s backers received five million pounds from plundering the Bengal state treasury, and another five million from the English monopoly over export and import trade between 1775 and 1780 alone.  All these profits and much more, as Eric Wolf points out, made it possible “to subordinate Indian resources to the process of accumulation in the home country.”[See note 6]

Yet this vast wealth was by no means an automatic result of overwhelming economic or military strength resulting from Britain’s capitalist development.  Until fairly late in the seventeenth century, when Britain was already a capitalist society, its trading posts in India and those of other European powers were present on Indian soil only by permission of the Mughal empire, which was quite capable of defending itself against European incursions or dictates.

The situation changed only at the century’s end, when “the stage was .  .  .  set for the intrusion of the English into Indian affairs” as the Mughal empire succumbed to its own internal difficulties.[See note 7]  This suggests that British capitalism’s development was due in part not only to its own laws of motion, but also to those of the mode of production then prevailing in South Asia.

British profits from the Atlantic slave trade and from slave production in the Americas are obviously another external factor that could have contributed to the development of British capitalism.  Even though recent evidence suggests that direct profits from the slave trade were not terribly important as a source for capital investment in British industry, slavery may well have contributed to British capitalist development in several other ways.

Consider, for example, the trade in products that slaves produced and consumed.  One recent study concludes that the Atlantic trade was the “principal dynamic element in English export trade all the middle decades of the eighteenth century”—precisely the decades when the industrial revolution took off. English exports to Africa and the Americas increased tenfold during the eighteenth century while English exports to Europe stayed constant.[See note 8]

Slavery may also have contributed to the development of British industry by supplying it with cheap raw materials—cheaper than could have been produced under capitalist relations themselves.  Most of the cotton for British mills was obtained either from the U.S. South or from Egypt.  U.S. cotton was grown by African slaves under non-capitalist relations, on land wrested from Cherokees, Creeks and Choctaw not by capitalist purchase but by military force.  Egyptian cotton was grown by corveé labor, on land also taken by force.[See note 9]

The cotton cloth produced in the eighteenth century by Indian handicrafts, British textiles’ fiercest initial competition, obviously did not enjoy these competitive advantages, which were hardly inherent to capitalist relations of production.

All these ways in which the emerging British bourgeoisie accumulated wealth can be seen as forms of “primitive accumulation of capital”—a concept that EMW seems to define in a rather idiosyncratic way. She says that Marx emphasized “the transformation of social property relations as the real `primitive accumulation'”(31), a transformation that “took place in the English countryside.” (32)

But this is not in fact Marx’s argument in Capital.  He says of course, “The money capital formed by means of usury and commerce was prevented from turning into industrial capital by the feudal organization of the countryside and the guild organization of the towns.” But after describing the removal of these obstacles and the origins of capitalist farming, he continues:

The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the indigenous population of that continent, the beginnings of the conquest and plunder of India, and the conversion of Africa into a preserve for the commercial hunting of blackskins, are all things which characterize the dawn of the era of capitalist production.  These idyllic proceedings are the chief moments of primitive accumulation.[See note 10]

Not that Marx’s authority settles anything; but EMW would do better not to appeal to it when it is not on her side. It is also not clear to me why EMW along with Robert Brenner seems dismissive of the concept of “bourgeois revolutions.” The concept is not “just another way of avoiding the question of transition.” (EMW, 33)

True, the economic transition to capitalist production relations in agriculture began in England (and the Netherlands) before any “bourgeois revolution” had occurred.  But well before industrial capitalism made its breakthrough in Britain an important political transition also occurred: the English civil war of the 1640s, completed in a sense by the “Glorious Revolution” of 1688-90.  Marxist historians have argued that these events constituted the victory of capitalist social relations on the level of the state.

The relationship between the economic and political transitions is a complex one. On the one hand, an agrarian and commercial bourgeoisie had already begun to emerge before the civil war, and played a role in the civil war that Robert Brenner among others has pointed out.[See note 11]  On the other hand, Marxist historians have been sophisticated in showing how social forces other than the bourgeoisie played important roles in the political break.

In any event, the most important point is that the transition played out on both economic and political levels, that both levels were important, and that they interacted with each other.  The bourgeois state that emerged from the English civil war played an important role in furthering capital accumulation in a myriad of ways, from speeding up enclosures of common land to advancing colonial trade.[See note 12]

As Marx said in that same chapter of Capital on primitive accumulation, all these methods “employ the power of the state, the concentrated and organized force of society, to hasten, as in a hothouse, the process of the transformation of the feudal mode of production into the capitalist mode.”[See note 13]

I am not sure whether EMW means to downplay these political aspects of the transition.  If she does, then I disagree.

As EMW says, we need to “challenge the triumphalist conviction that the Western path of historical development is the natural and inevitable way of things.” (35) Showing how distinctive capitalism is, and how specific the conditions for its emergence were, is one way to do this.

At the same time, we need to challenge the idea that once capitalism has emerged, it is so efficient and dynamic that no other economic system can stand up to it. We can do this by showing how contingent the historical, political and social as well as economic factors were that led to capitalism’s global domination—and how contingent the factors still are that perpetuate it.

In this respect anti-Eurocentric history and Marxist economics can complement each other in many ways.

  1. My friends here in the Netherlands will I’m sure be very interested in Robert Brenner’s forthcoming article on the Dutch transition to capitalism in the Journal of Agrarian Change.
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  2. Eric R. Wolf, Europe and the People without History, Berkeley: Univ. of California Press, 1982, 270-71.  Eric Hobsbawm points out that cotton products constituted half of the value of all British exports in the years after the Napoleonic wars (Eric Hobsbawm, Industry and Empire, Harmondsworth: Penguin, 1969, 278, cited in Wolf, 278).
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  3. One country that was neither European nor settled by Europeans was an exception in the age of European dominance: Japan.  One question that Wood does not address is how it was possible for a non-European country like Japan not only to become capitalist but ultimately to equal or surpass originally capitalist regions like Britain, and why this has not been possible for any other country since.  Perry Anderson argues interestingly that Japan’s feudal system most closely duplicated the conditions from which capitalism emerged in Europe.  (Japanese feudalism, in Lineages of the Absolutist State, London: NLB, 1974, 435-61) Lenin’s argument that the development of imperialism has blocked any other country’s subsequently matching Japan’s achievement also seems to me to have stood the test of time admirably, as shown e.g. by the sharp setbacks experienced since 1997 by the “Asian Dragons.”
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  4. Much more recently the collapse of Stalinist social systems in Eastern Europe made a further contribution to capitalism’s triumph.  In this case too it is important to stress that the collapse occurred in large part because of Stalinism’s internal contradictions, not only because of capitalism’s inherent dynamism.
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  5. One economic historian mentions that workshops in the eighteenth-century Chinese silk industry usually contained from 20 to 40 looms and were “therefore at least comparable with that of Britain’s textile factories on the eve of the Industrial Revolution” or even a step ahead of Britain.  The 500-odd furnaces of the porcelain works at Jingdezhen looked like “a great city all on fire.” (Lloyd E. Eastman, Family, Field and Ancestors: Constancy and Change in China’s Social and Economic History, New York: Oxford Univ. Press, 1988, 141, 149)
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  6. Wolf, 246.
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  7. >Wolf, 244.  Given the importance of African slavery and Mughal decline for the development of British capitalism, EMW is right to say that Marxists need to do much more to explain the dynamics of highly commercialized societies that did not become capitalist.  (33) I think Perry Anderson made an important contribution with his critical essay on Marx’s notion of the “Asiatic mode of production.” (“The ‘Asiatic mode of production,'” in Lineages of the Absolutist State, 462-549)
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  8. Ralph Davis, English foreign trade, 1700-1774, Economic History Review 15 (1962), 290, cited in Wolf, 199-200.  Wolf criticizes the arguments made earlier in Eric Williams, Capitalism and Slavery, Chapel Hill: Univ. of North Carolina Press, 1944.
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  9. Wolf, 284-87.  According to Wolf cotton grown in India was not favored by the British textile industry but used mainly for local production and export to China (287-90).
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  10. Karl Marx, Capital: A Critique of Political Economy, Volume One, Harmondsworth: Penguin, 915.
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  11. Specifically, Brenner describes “the new merchants and the colonizing aristocrats” as playing “a leading role .  .  .  at every important turning point” in 1640-42.  He concludes that while “exponents of the traditional social interpretation” of the civil war were mistaken “to specify distinct and conflicting feudal and capitalist classes at the root of seventeenth-century conflicts .  .  .  they quite properly searched for the roots of the seventeenth-century political conflicts in structural problems emerging as a consequence of the long-term transformation of English society in a capitalist direction.” The “consolidation of parliamentary rule,” in turn, “provided the fundamental conditions for the erection of the institutional framework for the commercial revolution.” (Merchants and Revolution: Commercial Change, Political Conflict, and London’s Overseas Traders, 1550-1653, Cambridge: Cambridge University Press, 1993, 317-18, 648-49, 715)
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  12. See e.g. Barrington Moore Jr., Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World, Boston: Beacon Press, 1966, 18-20.
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  13. Marx, 915-16.
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from ATC 95 (November/December 2001)