A Marxist History of Capitalism (PDFDrive)

A MARXIST HISTORY OF
CAPITALISM
Henry Heller’s short account of the history of capitalism combines Marx’s

economic and political thought with contemporary scholarship to shed light
on the current capitalist crisis. It argues that capitalism is an evolving mode
of production that has now outgrown its institutional and political limits.
The book provides an overview of the different historical stages of capi-
talism, underpinned by accessible discussions of its theoretical foundations.
Heller shows that capitalism has always been a double-edged sword, on one
hand advancing humanity, and on the other harming traditional societies and
our natural environment. He makes the case that capitalism has now become
self-destructive, and that our current era of neoliberalism may trigger a transition
to a democratic and ecologically aware form of socialism.
Henry Heller is Professor of History at the University of Manitoba, Canada.

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A MARXIST HISTORY
OF CAPITALISM
Henry Heller
First published 2019
by Routledge
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 2019 Henry Heller
The right of Henry Heller to be identified as author of this work
has been asserted by him in accordance with sections 77 and 78 of
the Copyright, Designs and Patents Act 1988.
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CONTENTS
Preface vi
Introduction 1
1 Merchant capitalism 11
2 The political economy of capitalist transition 26
3 Ascendant capitalism (1789–1980) 54
4 Neoliberalism (1980–2018) 79
5 Towards socialism 105
Index 141
PREFACE
During the Cold War people were reluctant even to name the system we
live under. Today capitalism is all over the media and has become a hot
topic. A concept that was once taboo is suddenly on everyone’s lips. A recent
mainstream review of the existing scholarship entitles itself Capitalism: The
Reemergence of a Historical Concept (Kocka and Van der Linden 2016).
The end of the Cold War and the financial crisis of 2008 has made it pos-
sible to name the system.
Prior to 2008 we were told we stood at the end of history and that capital-
ism would go on forever. But the bursting of the financial bubble in that year
and the ongoing economic malaise since has led to a nagging sense of doubt.
People at all levels of society are asking themselves: does capitalism have a
future? Reflecting an anxiety widely felt, the future of capitalism has become
a popular subject of feature articles in the pages of establishment journals such
as The New York Times, The Wall Street Journal, The Guardian, Le Monde, Die
Zeit, Der Spiegel and the Financial Times. The history of capitalism is suddenly
voguish. The growing importance of the history of capitalism was reflected
in an important feature article in The NY Times (Schuessler 2013) and an
interesting new entry on Wikipedia (‘History of Capitalism’). New courses
and programmes in the subject are proliferating at places such as Harvard,
Cornell, Johns Hopkins, the University of North Carolina, the University of
Florida, University of British Columbia and the Catholic University. At the
beginning of 2018 a new mainstream academic journal with a prestigious list
of advisors entitled Capitalism and History was announced.
Even business historians have taken note. In a remarkable keynote
address given at the 38th Annual Economic and Business History Society
Preface vii
Conference in Baltimore, Lou Galambos of Johns Hopkins pointed to the

brilliance of recent books on the history of American capitalism. Based on
these works, he forecast that in future the history of business will be writ-
ten no longer from the point of view of individual enterprises but from the
perspective of capitalist society as a whole, including its values, tastes and
culture. Galambos takes this position even though he acknowledges that the
teaching of the history of capitalism inevitably implies criticism of business
rather than apologetics. All the more so as in practice the historical approach
to capitalism raises the spectre of Marxism (Galambos 2014).
But here too times have changed. The crisis of 2008 has led to a wide-
spread revival of interest in Marx. Marx has resurfaced in the mainstream
media in the form of feature stories with titles such as ‘Marx is Back’, ‘What
Marx Can Teach Us’ and ‘Marx Was Right’. In university circles the finan-
cial crisis and economic malaise had led to a questioning of the neoliberal
paradigm and a return to Keynes but also the waning of postmodernism and
cultural studies in favour of Marxism (Palmer 2012).
Of course the history of capitalism has always interested Marxists, includ-
ing Marx, who was certainly a Marxist despite his disclaimers. There is
no doubt that Marx’s Das Kapital is devoted to analyzing the structure of
nineteenth-century capitalism. But Marx conceives of capital as based on an
evolving relationship between capitalists and workers that was intrinsically
historical. His analytical concepts incorporate and compress much historical
material. Moreover, Marx ends the long first volume of his grand opus by
offering an account of the historical origins of capitalism through primitive
accumulation. Throughout Das Kapital and especially in Volumes One and
Three Marx’s notes are full of insightful historical insights that are worthy of
study in themselves.
Since Marx his followers have continued to take an interest in the his-
tory of capitalism because, since at least the time of Lenin and the crisis
of World War I, they have sensed that it was in trouble. The subsequent
Depression and the devastation of World War II formed the background
against which the famous debate on the transition from feudalism to capi-
talism first unfolded. Discussion was set off by the publication of Maurice
Dobb’s Studies in the Development of Capitalism (1946). Dobb’s work was
debated during the next decade in the pages of the American Marxist
journal Science & Society at the height of the anti-Communist repression
in the 1950s (Hilton 1976). The transition debate reflected the insight of
Marxist scholars who understood that capitalism had entered its senescence.
Understanding feudalism’s demise and the birth of capitalism, it was pre-
sumed, could shed light on the end of capitalism and a historical evolution
towards socialism. The debate has continued ever since (Heller 2011). This
debate has itself been raised to a higher level by increasing discussion of
viii Preface
Marx’s concept of modes of production that views capitalism as merely a

passing phase in human history.
Among Marxists the sense that capitalism has entered its twilight has only
deepened in more recent decades. In this light we offer a brief history of
capitalism designed for the general public and university students. It is based
on an awareness of current scholarship, both Marxist and non-Marxist, but
in its premises it is solidly Marxist. Such a history is necessary if only as a
counterweight to the growing body of historical scholarship on capitalism
that is non-Marxist.1 The latter aims somehow to recuperate capitalism in
the belief that it is still reformable. We do not think so.
This work is rooted in the idea that, like previous modes of production,
capitalism is in decay and its decline needs to be explained. We assume that the
worm was in the bud from the beginning, that its premises were flawed in that
it showed a reckless disregard for both people and nature. It highlights both its
immediate contradictions and long-term reasons for its current decline. Most
of the text is an account of the historical development of capitalism: its accom-
plishments certainly, but also its flaws and its increasingly adverse impact.
Faced with capitalism’s crisis it is possible that the global society we live in
will fall to pieces or destroy itself, a regression towards nuclear war and bar-
barism. A dystopian future is a popular theme in contemporary cinema and
literature and is certainly possible. But the likelihood is that it will not happen.
We assume, on the contrary, that the only rational outcome to the crisis is a
transition to socialism. Moreover, to coin a phrase, we think the rational will
become real.
Historians ordinarily deal with the past and avoid predicting the future.
It is true that Marx himself was reticent to provide the outlines of a future
socialism. On the other hand, his analysis points to the idea that socialism is
latent within capitalism. Capitalism as it develops, as it were, becomes more
and more pregnant with socialism.
It is difficult to predict events in the short run. On the other hand, fore-
seeing longer term outcomes based on powerful and deep-rooted historical
factors is more plausible. That early liberalism would likely lead to political
democracy, that the independence of the United States was likely to make it
a great power, that imperialism would produce war, etc. were outcomes that
in fact were widely predicted. That Marx’s insights that the ongoing con-
centration and centralization of capital and the socialization of production
would in future produce socialism appears similarly plausible. Moreover, the
times are so out of joint that scholars in my view have the responsibility of
offering some guidance with respect to the future if they can. At this point
remaining silent and refusing to offer an informed opinion amounts to a form
of dereliction.
Preface ix
We assume that getting to socialism is likely to be messy and that historical

change on this scale will involve death and upheaval as part of the cost of
revolutionary change. But then what do we have now in the absence of
revolution? In fact a considerable body of literature exists on how a transition
to socialism might take place. Without falling into dogmatism or utopianism
this work tries to suggest how a transition to socialism might occur and what
the essential elements of such a new way of life might look like.
I have long been interested in the history of capitalism and the focus of
my research has been on the early history of capitalism, including the French
Revolution. At the same time a long-term interest in modern politics and
commitment to political activism have spurred a continuing attention to the
more recent history of capitalism. In recent years my theoretical understand-
ing of capitalism has deepened as a result of my friendship with distinguished
students of Marx Radhika Desai, Alan Freeman and Peter Kulchyski. I
would also like to thank Rosemary Hnatiuk, Karen Naylor, Ken Kalturnyk,
Cy Gonick, Bob Gowerluck, Roberta Hechter and Sig Laser for their sup-
port and comradeship.
Note
1 A key apologetic text is the recent Kocka (2016).
Bibliography
Dobb, Maurice, 1946, Studies in the Development of Capitalism. New York: International
Publishers.
Galambos, Lou, 2014, ‘Is this a decisive moment for the history of business, economic
history, and the history of capitalism?’, Essays in Economic & Business History, 32:1,
pp. 1–18.
Heller, Henry, 2011, The Birth of Capitalism. London: Pluto.
Hilton, Rodney Howard et al., 1976, The Transition from Feudalism to Capitalism.
London: New Left Books.
‘History of Capitalism’, Wikipedia, https://en.wikipedia.org/wiki/History_of_capitalism
Kocka, Jűrgen, 2016, Capitalism: A Short History. Princeton: Princeton University Press.
—— and Van der Linden, Marcel (eds.), 2016, Capitalism: The Reemergence of a Historical
Concept. London: Bloomsbury Academic.
Palmer, Bryan D., 2012, ‘The irrepressible revolutionary: Marx for the uninitiated,
the unconvinced and the unrepentant, Critique, 40:1, pp. 119–35.
Schuessler, Jennifer, 2013, ‘In history departments, it’s up with capitalism’, The New
York Times, April 6, www.nytimes.com/2013/04/07/education/in-history
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INTRODUCTION
Capitalism, which began in the sixteenth century, did not create inequality.
That began long before, at the start of recorded history. Social inequal-
ity was a product of the development of the state and classes and has been
with us since the end of the Neolithic period (3500 bc). It is rooted in the
control of a limited economic surplus by a ruling class. Class struggle begins
when such a class achieves a degree of independence from the state while
being dependent on it for protection. The perpetuation of its control over
the land and enhanced consumption being the goals of this class, the latter
increases its demands for surplus. At the same time, the producers, faced
with the demands of the landlords, limit what they produce and try to with-
hold as much as possible. Hence the class struggle that becomes the motor
of historical development.
Inequality and civilization then go hand-in-hand from the latter’s begin-
nings and into modern times. The degree of inequality has varied through
the centuries. The fall of the Roman Empire in the West at the hands of
German invaders and the Arab invasions of the Middle East saw a temporary
levelling down of society. In the Dark Ages that followed the fall of the
Roman Empire isolated peasant communities existed in Europe that exhibited
a high degree of equality.
But in general class-based inequality was the rule throughout Classical
Antiquity and the Middle Ages. The crisis of the late Middle Ages witnessed
a partial redistribution of wealth at the expense of the rich. On the other
hand, in the medieval period the narrowing of differences between the rich
and poor that did occur was limited.
2 Introduction
In the early modern period, from the sixteenth century onwards, inequality
of wealth defined society. Today inequality is arguably more extreme than
ever – greater even than prior to the French Revolution or the Russian
Revolution. Great revolutions in modern times like those in France, Russia
and China did produce a reduction in inequality but these proved temporary.
But if modern times did not produce any levelling down it did produce
a bigger material surplus. As usual the rich appropriated most of the benefit
and held onto power. But a minority of the producers, including work-
ers, fortunate to live in Europe and North America eventually saw some
economic gains in the period from 1880–1980. While this is not the full
story – exploitation of the Global South had its part – it was the expan-
sion of the forces of production under industrial capitalism that made this
belated improvement possible. Moreover, it has always been the expectation
of Marxists that capitalist economic growth would become the basis for the
establishment of socialist equality in the future.
Europe in the sixteenth century or the period of the birth of modernity –
the time of the Renaissance, Reformation, crystallization of the territorial
state and conquest of the New World – did not then give birth to equality.
On the contrary, the number of dispossessed or those without land or other
property began to rise. This was not in itself new if we think of the his-
tory of the peasantry in Ancient Greece and Rome or of peasants in the
early modern history of India, Ottoman Empire or China. It was not new
either that those who had no land began to sell or were forced to sell their
labour in order to gain a livelihood. Some wage labour existed in almost all
pre-capitalist societies. It was not new that those who bought this labour
prospered. They began to buy more land and other productive properties.
They expropriated more and more of the land of the poor in order to increase
their wealth further. The number of those who sold their labour increased
from one generation to the next. What was new was that this process never
stopped. Expanding from one century to the next by the twentieth century
those dispossessed of land came to include the overwhelming majority of the
population. The new bright idea was that instead of renting land to produc-
ers property owners would rather rent their labour instead. What was new
was that the work of the dispossessed bought for wages was turned into a
new form of collective labour called value, which in its phenomenal form
manifested itself as capital. A new mode of production was born. Moreover,
the expansion of collective labour ballooned into enormous wealth under
the control of the capitalist class.
The history of the capitalist mode of production divides into four unequal
stages: the longest lived was merchant capitalism (1500–1780) marked by the
Introduction 3
slow accretion of capital and in which colonialism played an integral part;

industrial capitalism (1780–1880), which saw the full-scale entry of capital
into production and an explosion of industrial growth focused in the main
capitalist countries; monopoly capitalism and imperialism (1880–1945) in
which capitalism conquered the rest of the world economically and politi-
cally; and finally late capitalism (1917–2017), which saw the continuation of
the previous period of monopoly capitalism and imperialism but included a
period of consumer capitalism (1945–1980) and then extended into the years
of neoliberalism and global monopoly capitalism (1980–2017). Late capital-
ism thus saw a brief period of consumer prosperity followed by the onset of
crisis and a new and dramatic rise in poverty and inequality worldwide.
This history narrates the story of the development of the phenomenal
and concrete aspects of capitalism that have manifested themselves over the
course of centuries through primitive accumulation, the birth of the sover-
eign state, the creation of the world market, mercantilism, colonialism, war,
revolution, industrial revolution, economic crisis and depression, monopoly
capitalism, imperialism and financializaiton.
It deals first of all with the origins of capitalism and its development as
merchant capitalism. It then outlines the second or mature phase of capitalism,
which begins with the onset of the Industrial Revolution and the French
Revolution. Discussion of late capitalism, which dates from World War I
and the Depression of the 1930s, takes us towards the crisis of twenty-first-
century capitalism and a consideration of a possible transition to socialism.
The accumulation of capital

But what is value? What is capital? In ancient and medieval times what was
valued was strongly coloured by moral considerations. Things economic
were valued but use values were more important than exchange values.
Contemplation, knowledge and pleasure were seen as valuable. Moreover,
nature was understood to have value. As late as the eighteenth century the
French physiocratic school insisted that land was the source of economic
value. But from the seventeenth century nature came increasingly to be
seen as a free good to be used or conquered and labour was recognized
as a source of value in the context of an increasingly market-driven society.
A series of British economists, including William Petty, Adam Smith and
David Ricardo, asserted that labour was the source of value. What was
valued was that which produced money profits. Economically minded
thinkers realized that it was labour that was creating profits and hence was
the source of value.
4 Introduction
Theorizing about an increasingly mature capitalist economy Karl Marx

developed a theoretically sophisticated version of the labour theory of value
rooted in a historical view of the development of capitalism. According to
this view, the concrete labour of workers, organized into a division of labour
under the control of a rich farmer, merchant or mine owner, produced mar-
ket commodities such as wheat, wool and coal, which, when sold, were
transformed into profits in the form of money. Parts of these profits were
reinvested in the purchase of more productive assets (raw wool, picks, shov-
els, pumps, horses, harnesses, ploughs, carts and farm implements, as well as
the labour of more workers), which were combined to produce more and
more profitable commodities such as wool, cloth or wheat. As this process
repeated itself and became general, individual and concrete labours gradu-
ally amalgamated and expressed themselves as collective social labour or the
concrete abstraction known as labour power (abstract labour), which could
be bought and sold for money like other commodities (Starosta and Caligaris
2016). The wage labour of increasing numbers of workers turned into this
new thing which Marx refers to as value from the sixteenth century onward.1
Abstract labour under the control of capital materializes itself as value
through the objectification or materialization of social labour in commodi-
ties which likewise are bought and sold. Value is not a material thing like a
tree or horse. It is a social relationship that appears as a tangible characteristic
of a commodity. In other words, the social relationship that is manifested in
value and the magnitude of value is constituted in production, circulation
and exchange. Value is then a form of wealth that is created under capital’s
auspices and control. Under capitalism social labour or value comes into
being under the aegis and control of capital. Such social or collective labour
has been dominated by capital up to the present day. Imprisoned by those
who control means of production, value manifests itself in phenomenal form
as capital controlled by its owners.
There are three aspects of value that manifest themselves in a capitalist
commodity. The first of these value forms is use value, which includes com-
modities like food, clothes and shelter. But the second and most important
form of value found in a commodity is that which is created by abstract
labour, which is generated in production. The third aspect of value is
exchange value or the price of a given commodity and is the way a commodity
appears in phenomenal form in the market economy.
Commodities there are exchanged for money, part of the proceeds of
which go back to the workers as wages or the price of their labour. The
value of the means of subsistence, which go back to the worker as wages, is
determined by the amount of abstract labour necessary to produce his/her
means of subsistence.
Introduction 5
The extra value or what remains after payment of wages or the part of
what Marx called necessary labour – surplus value – is realized as money cap-
ital and pocketed as profit or rent. The goal of capitalists is to increase surplus
value as much as possible. Surplus value can be increased by extending the
hours of work and by intensifying work or absolute exploitation. But it can
also be increased by diminishing the part of necessary labour through relative
exploitation or enhancing labour productivity through the reorganization of
production or technological innovation.
That part of surplus value which is re-invested is crucial to the expansion
of capital. The expanding spiral of investment in production and the sale of
more and more commodities sets value in motion and turns it into its phe-
nomenal form known as capital. Accumulation of capital takes the form of a
mounting spiral of capital or of value in motion. It is enhanced by the growing
importance of relative exploitation in the course of the historical develop-
ment of capitalism. It is this accretion of capital that has manifested itself in
the emergence of gigantic corporations, powerful territorial states, great cities,
monumental buildings and the highways and byways of modernity.
The rise of the working class

The working class, which is the agent that produces value under the ferule
of capital, is an intrinsic part of its history. It comes to the surface already
in the sixteenth century in grain fields, coal mines and print shops and takes
on significance from the eighteenth century in England but also in Holland,
Belgium and France. The generation of more and more value prompts the
further development of the working class, including a deepening division of
labour and perforce cooperation among its members.
Class war
With its growing class consciousness and organization the working class
began to liberate itself, making a serious impact on politics from the mid-
nineteenth century onwards. Its rising influence took the form of an ongoing
war of position against capital to gain a higher level of subsistence and social
protection for itself. We refer to public meetings, marches, riots, slowdowns,
sabotage, boycotts, strikes, unionization drives, political clubs, campaigns for
suffrage and voting and the formation of socialist, labour and Communist
parties in the nineteenth and twentieth centuries. From protests over the
price of bread, the introduction of machines and demands for the vote, it
gradually turned to strikes and agitation over the length of the working day,
conditions in the factories and workplaces, and pensions and unemployment
6 Introduction
insurance. Finally workers began to form and participate in political parties

that represented their interests within the confines of the bourgeois state.
But the rise of the working class also expressed itself in a war of move-
ment or open struggle for state power with capital from the mid-nineteenth
century onwards, including revolutions in Russia, China, Korea, Cuba,
Vietnam, Nicaragua and El Salvador in the name of socialism. In most of
these cases the working class may have been relatively small in numbers but
its role was strategically important.
The working class now

It is commonly asserted that the power of the industrial working class –
the main agent of revolutionary change in Marx’s conception of socialist
transition – declined from the latter half of the twentieth century onwards.
On the contrary, this work will argue that the potential power of the
organized working class worldwide has never been greater. The concen-
tration of capital has increased its influence as has the relocation of much
industrial capital to the Global South. It is a sleeping giant.
Wage labour, slavery and serfdom

The establishment of socialism will entail the decay of value and the estab-
lishment of use value as the basic measure of wealth. Value itself cannot be
understood as a merely economic concept. Certainly it came into being under
the thrall of capital. But, as we will endeavour to show, it emerged through
a historical process beginning in the sixteenth century, which involved a
struggle for increased social equality based on the equalization of all kinds of
labour. This conflict entailed ongoing ideological and class conflict.
Moreover, wage labour or free labour emerged in tandem with and also
in rivalry to other forms of exploitation including serf and slave labour. The
latter two forms of exploitation entailed personal dependence and therefore
could not be translated into abstract labour based on the exchange of money.
Moreover, this conflict between different forms of exploitation was far from
progressing in a historically even way. The advance of wage labour in the
heart of Europe entailed the simultaneous advance of serfdom and slavery on
its periphery from the sixteenth century onwards. As will be shown, it was
only in the nineteenth century that the final showdown between slave, serf
and free labour took place. The battle of ideas and class conflict on a grand
scale became an integral part of this struggle between these different modes
of exploitation in the first part of the nineteenth century.
Introduction 7
Absolute and relative exploitation

The great economic advantage of wage labour to other forms of exploitation
was that it led to a ballooning of value and greatly enlarged material output.
Moreover, such growth could be enhanced by increasing the productivity of
labour. But this advantage only became fully apparent during the Industrial
Revolution. At the beginning of capitalism absolute exploitation or the reduc-
tion of wages, extension of the working day to as much as fourteen hours or
the intensification of work through work discipline were the primary ways of
increasing surplus value and accumulation. But from the beginning absolute
exploitation was amplified by the use of more efficient methods of produc-
tion, which increased the productivity of work and consequently increased
the amount of surplus value produced in each working hour.
In the early phases of capitalism the fencing of land and the introduc-
tion of so-called convertible husbandry, the reorganization of production
through the putting-out system or alternatively the centralization of parts
of production in a large workshop or manufacture boosted productivity.
Within workshops an increasing division of labour also enhanced output.
Over time such relative exploitation played an increasing role in capitalist
production, greatly increasing the extraction of surplus value and the accu-
mulation of capital. Indeed, at a certain point the expansion of value took on
a law-like form which is referred to as the law of value.
Different enterprises produce a given commodity with varying degrees
of efficiency. In consequence the individual labour time required to pro-
duce a given commodity will differ. Yet the commodity will sell at the same
price. More efficient enterprises in which individual labour time is less than
socially necessary will realize more surplus value or profit per unit of out-
put than less efficient firms in which individual labour time is greater than
socially necessary labour time. The difference between individual value and
market value forces the introduction of new production methods in order
to be competitive. The impulse to introduce more and more techniques that
augment relative exploitation follows.
Also spurring relative exploitation is the increasing demands on capital as
a result of class struggle from an increasingly militant and organized working
class. Faced with the necessity of making concessions to workers the most
creative response of capital is the introduction of more and more labour-
saving techniques.
If the growth of relative exploitation and the operation of the law of
value were key to the blossoming of capitalism in the nineteenth cen-
tury, the decline in the production of surplus value as a result of a decline
in the extraction of value through enhanced relative exploitation and the
8 Introduction
weakening of the effects of the law of value are key to understanding the
crisis of contemporary capitalism.
Against Brenner
Although Robert Brenner – arguably the most original and influential con-
temporary theorist of the transition from feudalism to capitalism – does not
mention the law of value his thesis suggests that competitive pressures based
on the law of value drove the extraordinary development of British capitalism
from the sixteenth century onwards (Brenner 1976). It will be the argument
of this text that such a view is anachronistic. Competition was an intrinsic
feature of capitalism from its very beginnings. But the labour relations cre-
ated by primitive accumulation, absolute exploitation and concentration of
capital were more important in the early development of capitalism than was
relative exploitation. Relative exploitation and the centralization of capital
spurred by competition only became decisive in the eighteenth century. The
law of value did not fully operate until the nineteenth century.
Eurocentrism opposed
This work will also argue against the too Eurocentric view of Brenner’s con-
ception of capitalism’s past (Brenner 1977). For him capitalism originated in
England or at best in England and Holland. I will insist that capitalism, from
its beginnings, was a global system. This is because, from its inception, capi-
talism was dependent on the global market and the raw materials and primary
products produced by serfdom and slavery on the margins of Europe, which
were integral to the development of the wage labour and profit system that
emerged in Europe.
Moreover, capitalism cannot be understood only in terms of the exploita-
tion of labour but must be grasped in terms of the development of money
capital embodying surplus value. Money was no new thing. But the devel-
opment of money encapsulating surplus value was. Such money in the
quantities necessary to develop the European and world economy came not
from Europe but mainly from Latin America and Japan. Capitalism from the
beginning was global and not merely European. In its earliest phase the his-
tory of capitalism was in a sense the pursuit of money as its necessary catalyst.
Capitalism and revolution

At a certain point the rise of capitalism necessitated political revolutions
which cleared the way for the further expansion of value and accumulation
Introduction 9
of capital. The existing social relations of production stood in the way.

Capitalism was able to develop initially within the context of feudal society.
Moreover, in Germany and Japan in the nineteenth century capitalism was
based on passive revolutions from above imposed by the traditional or feudal
classes without social uprisings from below. On the other hand, contrary to
revisionist arguments, including those of Brenner and his followers, we insist
on the fact that the initial critical transitions to capitalism in early modern
Holland, England and France were the product of bourgeois revolutions in
which craftsmen, petty merchants and peasants played a decisive role.
The current crisis

The current economic depression stems from the existing social relations of
production once again standing in the way of the further expansion of sur-
plus value as was the case in earlier crises. Moreover, this crisis must be seen
as the third in a series which began with the depression of 1873–1894 and
which reoccurred in 1929–39. Both of these crises were resolved by restruc-
turing, the first by monopoly capitalism and imperialism and the second by
war, socialism and then the institution of Fordism and the global restructuring
of capitalism post-1945 under U.S. auspices.
Productivity gains and the lowering of trade barriers under American aus-
pices increased the rate of surplus value and increased profits dramatically in the
next two decades. Gains by capital allowed impressive increases in salaries and
benefits going to workers in the advanced capitalist countries.
But this forward momentum came to an end during the 1970s. A decline
in growth rates and the rate of surplus extraction then set the stage for the
onset of neoliberalism, which has dominated the world economy to the
present. The thrust of neoliberalism has been to restructure once more to
restore the rate of surplus value at the expense of workers in order to shore
up capitalism.
The period up to 2000 therefore saw a dramatic increase in the extraction
of surplus value and profits and decline in working class living and working
standards. But since the onset of the crisis in 2008 levels of investment in the
productive or surplus value sectors of the economy and growth rates have
lagged despite the intensification of pressure on wages and further erosion of
workers’ welfare benefits. The owners of capital have been able to maintain
their position by speculation, investing in debt and outright confiscation of
wealth from the working class. Indeed, the decline of surplus value lies at the
heart of the current crisis.
But this time it is a general crisis that includes rising working class con-
sciousness and loss of confidence in capitalism, a decline in the credibility of
10 Introduction
the politicians who control liberal democracies, a reluctance or unwillingness

of capital to invest in productive capital and an incipient environmental emer-
gency. Moreover, while China, whose economic power is second only to that
of the United States, fully participates in the global economy its loyalty to the
capitalist system cannot be taken for granted. Capitalism has surmounted diffi-
culties before but overcoming its current slump seems more and more daunting.
As we have argued, value and the extraction of surplus value have been
central to the development of capitalism from its beginnings. As Marx argues,
the extraction of fresh surplus value from living labour is essential to the ani-
mation of fixed capital which otherwise is so much dead labour. Moreover,
the law of value represents the most important regulatory mechanism of the
capitalist market system and its operation is essential to a mature capital-
ist economy. But its renewed operation, a resumption and continuation of
which presumes the restoration of historical rates of the accumulation of
capital, may not be possible and is certainly not environmentally desirable.
An alternative to value or abstract labour as the measure of wealth would
be the creation of a socialist and ecological economy. Accordingly, we will
argue that it is public ownership, planning based on information technology,
cybernetics, democratic decision-making and a refocusing of the goals of
production to create use values rather than exchange values that represent
the real alternative.
Note
1 It should be noted that wage labour and value can be found here and there in small
pockets in pre-capitalist society.
Bibliography
Brenner, Robert, 1976, ‘Agrarian class structure and economic development in
pre-industrial Europe’, Past & Present, 70:170, pp. 30–75, in Trevor Aston and
C.H.E. Philipin (eds.), (1985), The Brenner Debate. Cambridge, New York:
Cambridge University Press, pp. 10–63.
—— 1977, ‘The origins of capitalist development: a critique of Neo-Smithian
Marxism’, New Left Review, 104, pp. 25–93.
Starosta, G. and Caligaris, G., 2016, ‘The commodity of labour-power’, Science &
Society, 80:3, pp. 319–45.
1
MERCHANT CAPITALISM
Introduction
Capitalism as a mode of production began in England in the sixteenth century.
Its expansion based itself on the increasingly generalized production and sale
of market commodities. Its gains were distributed as profits, rent and wages
paid in money. In succeeding centuries, it spread across the globe.
Capitalism is now the way of life of the entire world. Virtually everyone
on earth is dependent on market capitalism. There is no frontier beyond its
reach. The whole earth is saturated with capitalism’s commodities. All of
nature has been conquered and is up for sale. We live in a culture of com-
modities. The institutions of the state, the legal and educational system and
the media reflect and reinforce capitalism’s dominance.
Capitalism has been with us for a long time – more than 500 years. It is
difficult at this point to think of a different way of living outside the reach
of this now totalized reality. It has triumphed everywhere but is reaching its
term. We think that capitalism by its very nature needs to expand further
spatially and penetrate more deeply into society and is having increasing dif-
ficulty doing so. It is reaching its limits as a system. It is a mode of production
which is coming to its end because it is locked into the militarism, imperial-
ism and unending war that goes with national state sovereignty, insuperable
economic as well as political contradictions, increasing social inequality and
disintegration and unfolding ecological disasters: a rising litany of troubles to
which, by virtue of its own inner dynamic, it has no political answers. As a
result, we live in a world of declining opportunities and increasing fear.
12 Merchant capitalism
Whereas earlier capitalism had been able to overcome repeated and

serious crises the current build-up of problems is so great that it is highly
unlikely that it can manage to do so again. Moreover, it has increasingly lost
its economic and political legitimacy in the eyes of most of those who live
under it but who no longer benefit from it. Decline of this mode of pro-
duction has now become highly likely and might take a catastrophic form.
This happened before with the fall of the Roman Empire and in the crisis of
feudalism at the end of the Middle Ages. An interregnum – a time of chronic
uncertainty, unexpected and unwelcome change, deep pessimism and grow-
ing popular unrest – has opened up, and its outcome – a triumphant victory
for humankind through the breakthrough of socialism or a fall into a night-
mare dystopia – is uncertain.
Contemporary capitalism is gripped by pessimism. This was not true
in the past. Capitalism was associated with growth and once embodied
hope. The early success of capitalism reflected itself in the idea of progress,
i.e. the notion that human history was the story of ongoing economic and
cultural advance. This sunny view had already surfaced in the Renaissance
but became a popular idea only during the Enlightenment and the Industrial
Revolution of the eighteenth and nineteenth centuries. The idea of progress
was based on the fact that Europe, under capitalism, was developing immense
forces of production that potentially could be used to improve all aspects of
human life. Progress based on the indefinite expansion of capitalism became
a shibboleth of European and American ideology in the nineteenth century.
Two world wars in the twentieth century and successive economic crises
have tainted the idea that there can be progress under capitalism. Instead of
diminishing poverty and inequality – as its apologists promised – capitalism
has made these problems much worse. The level of global social inequality
and poverty has never been greater. Moreover, the ecological regime on
which capitalism bases itself, i.e. cheap energy, food, resources and labour,
has turned on itself and is no longer sustainable.
Beginnings
The capitalist mode of production is built on the exploitation of workers by
capitalists.
From start to finish it has been based on the gap between owners of
property or those who control means of production – land, mines, fac-
tories, machines, etc. – and wage workers or producers who lack such
ownership or control. In order to gain a livelihood, producers from the
sixteenth century onwards found that they had to sell their labour power to
capitalists for a wage. The capacity to labour, like wheat, wool and wood,
Merchant capitalism 13
became a commodity for sale in the market. Capitalists back then, as now,
pocketed the surplus value created by the producers and realized as profit,
which was then reinvested and allowed the further expansion of capital and
the development of new means of production.
Inequality based on control of productive property or the absence thereof
was the source of capitalism’s dynamism and also its original sin, which it
has never overcome. In the face of this basic division at the heart of produc-
tion advocates of capitalism eventually promised representative democracy
as a sop to the fact of the undeniable tyranny of the workplace – those who
worked being exploited by those who owned.
More substantially they pointed towards a continuous expansion of the
material surplus beyond that achieved in the feudal or tribal modes of pro-
duction under which humankind had previously lived. And capitalism did,
from its beginnings, provide more material wealth at least to its primary
beneficiaries, i.e. capitalist farmers, merchants, manufacturers, landlords and
to the emerging territorial state. Even workers in the advanced capitalist
countries saw limited economic improvement from 1880 onwards.
The unprecedented nature of this development needs to be stressed.
Throughout the history of class-based societies, dating from the birth of
civilization, upper classes have demanded surplus from peasant producers
who formed the overwhelming majority. The goal of producers was purely
defensive. It was always to ensure the simple reproduction of their way of life
based on subsistence agriculture.
Consumption versus accumulation

During the long historical period that followed the beginning of civilization
the aim of the upper class was to enlarge its access to economic surplus in
order to increase its consumption. It was upper-class demand for more sur-
plus and peasant resistance that created conflict and drove history forward.
With the appearance of the capitalist class in the sixteenth century the goal
of the upper class changed. The primary goal of this now profit-seeking
class was no longer consumption but the accumulation of capital – indeed,
the accumulation of capital for its own sake. The revolutionary charac-
ter of this development has to be underscored. Consumption of wealth
became entirely subordinate to its accumulation, the necessity of which was
intrinsic to the new mode of production. That is why the debut of the capi-
talist mode of production in the sixteenth century represented a qualitative
historical breakthrough.
Capitalists who own means of production or productive property exploit
labour not because they directly coerce producers as plantation owners did
under slavery or by extorting rent to access means of production as landlords

did under feudalism. Capitalists exploit because they appropriate the major
part of what workers produce as capitalist profit while paying the latter a
mere subsistence wage for their labour. They do this by buying labour power
from workers in order to produce commodities for sale from the means of
production under their control. The profit that is realized in the form of
capitalist money derives from the surplus value contained in commodities
produced by workers. Accumulation of capital or the self-expansion of value
that is the keynote of the capitalist mode takes place when profits in the
form of money capital are repeatedly reinvested back into productive capital,
i.e. land, tools, machines, which makes possible the production of yet more
commodities for sale and their realization as more money profit.
Late medieval crisis

How did labour power or the capacity of wage earners to work become
a commodity for sale? It began in the first place in Western Europe. Serfs
there liberated themselves de facto and de jure from personal bondage at the
end of the Middle Ages. Liberation from personal dependence became pos-
sible because the tributary or feudal mode of production experienced a major
economic and political crisis. The crisis itself was a result of over-exploitation
by the upper class. In reaction the peasantry and urban populations rebelled
all across Western Europe. In other words, the feudal mode was undermined
by an economic crisis and class war in the late Middle Ages.
Like the present decades the years between 1300–1450 were an interreg-
num marked by uncertainty, pessimism and unrest. The period nonetheless
did see mass uprisings from below and the liberation of the mass of the
population from personal dependence on overlords and a marked decline
in the burden of rent. Peasants and other small producers enjoyed a tempo-
rary improvement in their condition (Hilton 1985). Some achieved enough
wealth to control or rent agricultural property and to begin to hire other less
well off peasants for wages.
Primitive accumulation
Indeed, from the sixteenth century onwards more and more peasant pro-
ducers lost access to sufficient land or means of production to maintain
themselves while these properties became the possession of landlords or rich
peasants (Bryer 2006, Dimmock 2014). Whereas class war from below had
extended the landholdings of the mass of producers and weakened feudalism
in the fourteenth and fifteenth centuries, this dispossession of poor peasants
by wealthy peasants and landlords or sixteenth-century class war from above

initiated capitalism.
The loss of access to the land was often a violent and traumatic expe-
rience. This process is part of what Marx called primitive accumulation
because it allowed a certain concentration of wealth but especially because
it put in place the social relations that permitted the further accumulation
of capital. This transformation, which began in 1500, unfolded into the
nineteenth century across the face of Western Europe. England found itself
in the vanguard of capitalist development. Based on the extension of these
new social relations commodity production became generalized as more and
more of what was produced was put on the market and increasing num-
bers of producers were forced to sell their labour as a commodity. By the
end of the eighteenth century half the population of Western Europe were
wage workers (Tilly 1983, Luccasen 2005). This meant that their labour was
available to generate surplus value, creating profits for the bourgeoisie that,
as a result, grew increasingly powerful as a class in the course of the early
modern centuries.
Free labour
In so far as exchange using money and the possession of commodities became
the general form of the relation between people the notion of the equiva-
lence and equality of all kinds of concrete labour or the notion of value
gradually developed over the course of the early modern period. Already
implicit in the sixteenth century in the Protestant theologian Martin Luther’s
concepts of the priesthood of all believers and all labour as a divine call-
ing, a belief in the natural equality of humanity was strongly entrenched in
public opinion by the end of the eighteenth century and became a popular
prejudice during the French Revolution. Among political economists in the
late eighteenth and early nineteenth centuries studying the development of
capitalism the equivalence of all kinds of labour crystallized into the concrete
abstraction value. The idea of value was deployed most famously in the
economic thought of Karl Marx. Purchase of labour power (the capacity to
labour) in the market, he argued, was critical to creating new value. In other
words, value is a thing that is both real and an abstraction that developed
historically as capitalism gradually blossomed and then came to be conceptu-
alized as such by political economists. Marx saw that it was the extraction and
self-expansion of value that was key to the accumulation of capital that was
revealing itself dramatically in his own lifetime in the form of the Industrial
Revolution. Indeed, value in expansion and movement is the leitmotif of the
history of capitalism. Its growing inertia today is a signal of capitalism’s crisis.
The struggle for social equality that marked the early modern period and
the French Revolution was actually intensifying during Marx’s lifetime. It
took the form of the struggle for the rights of free labour and against serf-
dom and slavery. The affirmation of the rights of free labour, or the legal
and unrestricted right to offer one’s labour for sale as a market commodity,
allowed the expansion of value and played an important role in the agenda
of the bourgeois revolutions that marked the first part of the nineteenth
century (Drescher 2002, Morris 1996: 32–3). The establishment of the legal
freedom of labour meant freedom from the personal dependence on a mas-
ter characteristic of a slave or a serf and as such marked a real advance in
human freedom. Socially and economically it blocked the forcing of produc-
ers back into a relation of direct dependence and compelled the capitalist to
obtain labour power by buying it in the market in exchange for money. This
allowed the transformation of concrete labour into labour power and the
latter into value. The creation of value without the personal freedom to sell
one’s labour power is unthinkable.
The world market

As we have seen, capitalism began in much of Western Europe at the begin-
ning of the sixteenth century while gradually centring itself in Holland and
England. While capitalist agriculture and manufacture concentrated in these
two states the second main feature of capitalism took the form of a world
market and developed simultaneously alongside the spread of independent
wage labour in Western Europe. The expanding world market was based
on the global circulation of gold and silver, which allowed the realization of
surplus value through the capitalist production and sale of capitalist manufac-
tures worldwide and the transformation of coerced or non-capitalist surplus
labour (slavery, indentured labour, serfdom) into commodities (sugar,
tobacco, wheat) being sold for money (Manning 2002, Pomeranz and Topik
1999, Flynn 1996).
From its inception capitalism was a world system. The whole of the
emerging inter-European and global commodity trading system depended
on the existence of world money or gold and silver produced, for the most
part, in Peru and Mexico. The availability of money was essential not only
to the exchange of commodities but also to the developing process of capital
accumulation as it was the only way that the cycle of capital accumulation
could complete itself and finance its own further expansion. Given that the
source of this world money essential to capitalism was non-European regard-
ing capitalism as an exclusively European creation makes no sense.
Uneven development
The capitalist world developed unevenly. Some places became focal points
of capitalist production and exchange while other places were relegated to
the margins and dependent on the centre. In a process of uneven devel-
opment, the accumulation of capital in the centre came at the expense of
dependent areas consisting of the Global South, the Middle East and Eastern
Europe, which provided markets for European manufactures and cheap food
and raw materials based on coerced labour.
In the social formation of the early modern period the capitalist mode
increasingly predominated economically but the feudal, slave and hunting
and gathering modes co-existed with it and were linked to it. In this context
serfdom and slavery actually grew stronger in the context of an advanc-
ing capitalism. The wheat, sugar and furs produced in these non-capitalist
regions became capitalist commodities as they were absorbed into the over-
all capitalist system dominated by wage labour. Indigenous populations in
North America, for example, continued to organize their communities based
on hunting and gathering, but they supplemented their livelihood by selling
furs in exchange for money, using the latter to buy European commodities
such as flints, gunpowder, rifles, knives, cooking utensils, cloth and other
tools produced in France and England.
The development of capitalism accordingly tended to concentrate capi-
tal in England and Holland, while other areas such as Eastern Europe, the
Mediterranean, including the Ottoman Empire, West Africa and Latin
America became economically subordinate to the states of the Northwest
Atlantic seaboard. As a result of early capitalist development the feudal or
tributary mode of production based on landlord exploitation of peasants at
first became stronger and was entrenched in the Hapsburg Empire, Russia,
the Ottoman Empire, India and China.
Merchant capitalism (1500–1760)

Under merchant capitalism production in agriculture and manufacture
tended to be subordinated to the control of merchants. Control of means
of manufacturing production was more informal than real. Investment in
actual means of industrial production was limited. Absolute exploitation in
the form of low wages and long hours was more important than relative
exploitation or the introduction of new technology and the reorganization
of production into more productive forms. As a result, in its first centuries
the capitalist mode of production did not see any great breakthroughs in
the rate of growth. Much of the wealth that accumulated into the hands of
employers or bourgeoisie came about as a result of the latter’s establishing

indirect control of the means of production by means of offering credit or
through monopolizing access to domestic and foreign markets. Productivity
only began to rise significantly in the eighteenth century and the advanced
capitalist agriculture of southern England did not exceed the level achieved
in the Yangtze Delta of feudal China until the end of that century (Heller
2011: 232).
Over much of England and the rest of Europe a compromise existed
between manufacturing and agriculture in which many industrial produc-
ers continued to live in the countryside and produced much of their own
subsistence based on domestic family labour. In this set up the subsumption
of labour to capital was incomplete and older means of production simply
fell under the control of merchant-entrepreneurs (Heller 2011: 233–7).
Meanwhile over the period the rural and urban population became more
and more dependent on wages as a result of primitive accumulation and
population growth.
State and capitalism

The development of capitalism in the sixteenth century was made possible
by the appearance of a new kind of state whose laws and coercive apparatus
proved an indispensable framework to the formation of markets and capital
accumulation. It took the form of relatively compact sovereign territorial
states in England, Holland and France and to a certain extent in Castile,
Denmark, Sweden and the lesser principalities of Germany. While territo-
rial states gained power the over-arching political authority of the Pope and
Holy Roman Emperor, which hitherto had blocked the political aspirations
of lesser rulers, faded. This devolution was facilitated by the relatively iso-
lated location of Western Europe, which was peripheral to the ambitions
of the powerful centralized empires of China, India and the Middle East,
whose political and military preoccupations and fiscal demands limited the
economic ambitions of merchants and manufacturers.
The territorial state, over time, subordinated autonomous territories and
independent towns to itself and fixed borders and frontiers delimiting its
space from that of rivals. It reorganized the space it controlled, making it
homogenous by establishing a more or less uniform administrative grid based
on centralized control. In alliance with merchants the rulers of territorial
states competed with one another, striving to expand internal markets and
gain markets externally.
To be sure, the class basis of the early modern state remained landlords.
In England, France and other West European countries the early modern
state was in fact a reorganized system of landlord domination, which made it

possible for the ruling feudal class to overcome the late medieval crisis in the
face of a loss of direct control over the peasantry and the towns. On the other
hand, the money and expertise necessary for this salvage operation were pro-
vided by merchants or the nascent capitalist class that was growing within the
interstices of feudalism. Within this early modern social formation the feudal
mode was able to reconsolidate itself based on the support of the bourgeois
agents of the new capitalist mode of production (Anderson 1980: 18–23).
The early modern state played an indispensable role in the develop-
ment of merchant capitalism. It facilitated economic growth by suppressing
disruptive violence by feudal warriors and popular protesters, helping to
gradually create a national market by administrative and legal unification,
protecting nascent industries, opening markets by colonialism and war and
reinforcing official religious belief that sanctioned upper class rule. It directly
supported capitalism by forcing those who lost their land and were poor to
become wage workers. The state ever since has constituted an indispensable
framework within which capitalist accumulation has been carried on.
Religion, sexuality and family

Christianity remained the dominant ideology. But churches, whether
Catholic or Protestant, tended to become subordinate to the state. The state
used confessional religious conformity to reinforce its own authority over its
subjects. Among other things that the state accomplished was to use direct
repression as well as religion as a means of enforcing primitive accumula-
tion and to impose the acceptance of wage labour and a more intense and
longer work regime on dispossessed peasants. In the fully capitalist countries
of Holland and England, as elsewhere, state churches prevailed but a more
individualized form of religion gradually developed.
The gendered division of labour was strongly maintained. Suspicion of
deviation amid growing social polarization led in some cases to the outbreak
of witch hunts directed mainly against socially vulnerable women. As many
as 20,000 witches were executed in the sixteenth and seventeenth centuries
in Central Europe where religious conflict was intense (Waite, Baccouche
and Petreman 2013). At the beginning of the period of merchant capitalism
sexual reproduction was carefully regulated in terms of access to property,
which remained in the hands of men. Late marriage was the rule and mar-
riage was only possible if one had access to land or a dowry. The upper class
had more children than those beneath them. The family was the basic unit
of production and reproduction. Unpaid labour within the family, including
children, as well as increasing wage work outside sustained the reproduction
of the family. The gradual proletarianization of the population broke this

reproductive system based on property, leading to earlier marriage and grow-
ing illegitimacy among dispossessed peasants and workers in the eighteenth
century. The decay of the early modern reproductive cycle, the decline in
the frequency of famines and plagues and improvement in medicine and
sanitation in the eighteenth century led to a rapid increase in the working-
class population, which thereby became available to capital for exploitation.
In the eighteenth century workers, in contrast to property-holding peasants,
had many children whose work helped to support the family. Population
increase also created an army of unemployed, which kept the price of labour
low (Secombe 1995).
Witchcraft persecutions declined in the eighteenth century as a result of
the spread of the ideas of the Scientific Revolution among the political and
social elites. The rejection of tradition and authority as the bases of truth in
favour of fact and reason was pioneered by an intellectual avant-garde sprung
from the bourgeoisie in Holland, England and France, which included the
likes of Baruch Spinoza, René Descartes and Isaac Newton.
Early modern revolutions

During the period of merchant capitalism most states in Europe remained
feudal and absolutist, but in England and Holland constitutional government
controlled by the bourgeoisie took power through revolution. There were in
fact a series of increasingly powerful capitalist and bourgeois revolutions against
the feudal class and absolutism, running from the German Peasants’ War to
the Dutch Revolt and then to the English Revolution (English Civil War).
They were complicated by international conflicts between the revolutionary
bourgeois states and the feudal and absolutist states. We reject as factually and
historically inaccurate that part of the currently fashionable notion of ‘con-
sequentialism’, which argues that these conflicts were not led by bourgeois
capitalists (Davidson 2012: 428–81, Heller 1985). Later revolutions, such as the
passive revolutions in Germany and Japan, are a different matter.
The Dutch fought a prolonged war of national liberation (1576–1648)
against the Hapsburgs and in the last years of this struggle the conflict turned
into a general European war. The Thirty Years’ War (1618–48) was a strug-
gle between feudalism and capitalism defined in economic terms. But it was
also a clash between two modes of production that embraced two kinds of
society and civilization. It was a struggle of two cultures in conflict, one
rooted in humanism tinged with Protestantism with Holland as an exam-
ple, the other a Catholic-humanist culture taking Spain as the example. It
was a clash between two power blocks in which the Dutch revolt of the
sixteenth century against Spanish absolutism became linked to the English

Revolution. It was a class conflict that crystalized into an inter-state struggle
whose outcome saw the triumph of the capitalist states of Northwest Europe,
on the one hand, and the refeudalization of Central and Southern Europe on
the other (Polisensky 1971: 261).
Uneven development
The economies of Central, Southern and Eastern Europe alongside those
of Latin America became subordinated to those of Holland, England and
France. In these economically backward places the exploitation of labour
tended to be based not on wage labour but on slavery, serfdom, rent, inden-
ture, peonage and other forms of dependent labour. In fact the intrusion of
capitalism into Central and Eastern Europe and Latin America tended at first
to strengthen the systems of feudal absolutism and rent extraction. As noted,
in this early modern social formation the capitalist mode predominated
economically but the feudal, slave and hunting and gathering mode co-
existed within it and was progressively transformed by it (Lemarchand 2011,
Blackburn 1997, Wolf 1997). The period saw a revolutionary breakthrough
of the capitalist mode politically in England and Holland. Such political
change was important because the state reflected the concentrated power of
class. Political rule by the bourgeoisie rather than the nobility had profound
economic and social consequences. But in Europe as a whole, because pow-
erful states like France, Spain, Prussia, Austria and Russia remained absolutist,
we would say that the feudal or tributary mode remained ascendant until the
French Revolution.
Colonialism
The importance of exchange relations was manifest not only in the grad-
ual unification of markets within the capitalist states but in the growth
of overseas markets and colonialism. Three states – Holland, England and
France (the latter a feudal and absolutist state with an important merchant
bourgeoisie) – vied with one another in overseas trade and colonialism. The
most lucrative part of world trade came from the import of spices, tea, silk,
porcelain and cotton fabrics from Asia, and sugar, tobacco and rice from
the Americas. In Marx’s view, colonialism – including the production of
commodities by slave labour – has to be understood as a form of ongoing
primitive accumulation or a means of extracting surplus by coerced and
increasingly rationally managed labour rather than by creating wealth by the
extraction of surplus value and capital accumulation. The transformation
of products from overseas by manufacturing and the sale of manufactures

overseas was what produced surplus value in Europe (Marx 1975: 1031–4,
Marx 1978: 555).
Confessional hatred died down in the eighteenth century with the spread
of the ideas of the Scientific Revolution. But religious bigotry was replaced
by a pseudo- scientific racism which justified highly profitable slavery, the
colonialization of non-European peoples and the creation of European
settlements overseas (White 1995). While the slave trade and slavery weak-
ened in the nineteenth century racism actually grew stronger with the onset
of imperialism, Jim Crow discrimination and modern anti-Semitism.
There was a massive contraction in the numbers of hunting and gathering
peoples as killing and disease took their toll (Stannard 1993). Biological and
political conquest, including the redefinition of the terms of landholding and
land clearances, transformed and constricted the relationship of indigenous
peoples with nature (Coates 2004: 141). At the same time hunting and gath-
ering peoples became increasingly involved in commodity exchange, as, for
example, in the fur trade in Russia and North America.
While absolute exploitation predominated in the period of merchant cap-
italism there were nonetheless some gains in relative exploitation in the form
of printing presses, mechanical screws, ovens and pumps for the extraction
of coal and refining of minerals, blast furnaces, water and windmills for the
processing of grain, wood, leather, cloth and sugar, shipyards and new sail-
ing ships and all manner of increasingly sophisticated workshop tools. While
most manufacture was carried on in the countryside there developed an
increasing number of centralized urban workshops or proto-factories where
an increasing division of labour under capitalist control took place.
Nature insulted
Ecological damage was manifest in the widespread killing of wildlife, defor-
estation, overgrazing and soil depletion. Early capitalism established a series
of commodity frontiers, which were specific places of expanded commodity
production in mines, sugar plantations, forests, sheep runs, fishing grounds,
backed by territorial power. And commodity frontiers moved successively
from one place to the next, marked by booms and busts due to the ecological
contradictions of expanded commodity production. As a mode of produc-
tion, capitalism, itself a product of a society in nature, from the beginning
treated nature as a free good. Jason Moore has recently argued capitalism
was in fact a system within nature that, cancer-like, abused it (Moore 2015).
In my view a better formulation and one based on Marx is that of John
Bellamy-Foster, who views society as a system which operates both inside
and outside nature. The metabolic functions of earlier forms of society were
symbiotic with those of nature. Capitalism progressively disrupts this inter-
relationship and ultimately destroys it (Bellamy-Foster 2000: 141–77).
Popular revolts
There was continued popular resistance to the state, landlordism, capitalist
and colonial exploitation during the period. Revolts against rent increases,
enclosures, oppressive taxation, food prices and shortages, religious and
cultural oppression, colonial incursions and domination waxed and waned
(Heller 1985). Pontiac’s Revolt (1763) was the major indigenous upris-
ing against eighteenth-century British colonial policy in North America
(Anderson 2000). During the American Revolution (1776–83) indige-
nous tribes joined with the British in guerrilla campaigns to resist further
encroachments of American settler-colonists across the Alleghenies. More
than a hundred revolts by indigenous people against Spanish colonialism
rippled through the Andes during the eighteenth century, with the uprisings
becoming increasingly large-scale, widespread and violent. This so-called age
of Andean insurrection culminated in the powerful Túpac Amaru II upris-
ing, which swept through the southern Peruvian and Bolivian highlands
from 1780 to 1782 (Walker 2014).
France was unique among feudal absolutist states in the level of class con-
flict during the period of merchant capitalism. A culture of violent popular
protest developed that was unparalleled elsewhere on the European conti-
nent. As the administrative centralization of the state advanced across the
whole country and the bourgeoisie were busy creating a national market
and growing in numbers and wealth popular urban and rural protest became
ubiquitous (Neveux 1977, Nichols 2002). The periods 1560–1660 and then
1750–89 were particularly disturbed.
It was the common people who were becoming increasingly dependent
on wage labour and who more and more needed to buy their food in the
market who took the lead as the French Revolution drew closer. The grow-
ing frequency of food riots in the countryside signified the emergence of a
rural working class that could not produce its own subsistence and had to use
their wages to buy food. Notable was the fact that strikes by wage workers,
among other forms of popular resistance, also became more frequent and
were particularly severe during the revolutionary crisis. This also reflects
the growing dependency of the population on wages (Heller 2010). The
stage was set for a revolution in which the increasingly powerful bourgeoisie
would take power, destroy feudalism and install capitalism as the dominant
mode of production.
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2
THE POLITICAL ECONOMY OF
CAPITALIST TRANSITION
The previous chapter is a faithful account of the historical origins of

early modern capitalism, but it is possible and necessary to analyze these
beginnings more deeply. By turning to political economy or a theoretical
understanding of the economy of bourgeois society the historical narrative
can be made more profound. Indeed, Marxist political economy tries to
understand the capitalist economy from a perspective that is both historical
and materialist.
Marx’s Das Kapital is both a work of history and political economy in
which capital is the protagonist. Although stress is placed on analyzing the
structure of nineteenth-century capitalism the presupposition of the work is
that capitalism is the product of history. Its concluding section on primitive
accumulation makes this clear (Heller 2014). Marx’s great work Theories of
Surplus Value tries to analyze and criticize the economic thought of leading
bourgeois economists from the seventeenth century onwards. It constitutes a
magnificent example of intellectual history (Marx 1989–94).
Marxists including V.I. Lenin, Rudolf Hilferding, Rosa Luxemburg
and Nikolai Bukharin and more latterly Paul Baran and Paul Sweezy pro-
duced highly sophisticated analyses of monopoly capitalism and imperialism.
Marxist crisis theory produced a rich literature since the 1920s both in the
Soviet Union and the West. Both Marxist theories of monopoly capitalism
and crises are based on a historically grounded analysis. The theory of com-
bined and uneven development largely identified with Trotsky brilliantly
develops the Marxist understanding of history.
Political economy of capitalist transition 27
The historical origins of capitalism have been intensively analyzed by

Marxists since the 1940s. It was thought then that capitalism, plagued by
depression and imperialist war, had entered its final crisis. In the light of the
ongoing instability that set in during the 1970s and the crisis that broke out in
2008 we consider this view not wrong but somewhat premature. In any case,
the sense of crisis back then stimulated an intensive debate on the transition
from one mode of production to another.
Using the best example to hand, the question was posed as to whether
a theoretical understanding of the historical crisis of feudalism and the birth
of capitalism could illuminate how capitalism might end and a transition to
socialism take place. Is capitalism purely European or is it a world system? To
what extent do non-economic factors play a part in such a transformation?
And, at a more abstract level, how does change from one mode of produc-
tion to another take place? Is such a change driven by class struggle or the
forces of production? How important are economic as against political or
cultural factors? Answering these questions became part of a discussion that
has continued until the present. The resultant body of scholarship amounts
to both a history of primitive accumulation and a theorization thereof com-
parable to Marx’s own work on nineteenth-century capitalism. This ongoing
controversy on the transition underscores the point that a Marxist view of
the origins of capitalism and, indeed, of history as a whole must be not only
faithful to the facts but also must endeavor to theorize their meaning as fully
as possible. Indeed, the transition debate produced a political economy of
primitive accumulation equivalent to that produced by Marx on nineteenth-
century capitalism.
Brenner’s achievement
In the initial transition debate Dobb’s view of the transition based on class con-
flict as key to transition was pitted against Paul Sweezy’s exchange-based model.
In this debate Sweezy had his defenders as, for example, the French historian
Georges Lefebvre, who stressed the importance of merchants to capitalism.
But most of the contributors to the initial round of discussion agreed with
Dobb’s emphasis on class struggle (Hilton 1976). Writing in the 1970s Robert
Brenner also lined up with Dobb. He consolidated the initial discussion by
setting out a carefully articulated, logical and comprehensive interpretation of
capitalism’s origins (Brenner 1976, 1977). Brenner’s view was compelling and
subsequently hardened into a school of history known as Political Marxism.
For him the class conflicts of the fourteenth and fifteenth centuries were the
starting point of both the demise of feudalism and beginnings of capitalism.
28 Political economy of capitalist transition
The positivism of Brenner

Brenner begins by reinforcing Dobb’s class struggle viewpoint while empha-
sizing changes in production relations as key to capitalism’s development.
But he abandons the ongoing importance of subsequent class struggle and
opts instead for an economic determinism based on market competition.
Moreover, this market competitiveness is not the result of the emergent class
conflict between farmer capitalists and peasant workers as one might expect.
Rather it is the result of the social property relations between capitalists and
landlords set in the late Middle Ages that supposedly establish the unchanging
parameters of market competition for the whole early capitalist epoch.
We will argue that this account of the transition is wrongheaded because
it is rooted in positivism. Under the sway of the analytical Marxism of the
post-1960s Brenner’s positivism in principle rejects dialectical thought as
metaphysical. As a result it leads Brenner to seek first causes, an approach
that makes it difficult to appreciate the role of ongoing dialectical conflict
and progressive circularity in how capitalism actually develops and operates.
The root of the first cause approach is itself the product of a positivism
rooted in methodological individualism. Methodological individualism is an
epistemological point of view which is itself imprisoned by capitalist reality.
It is unable to grasp the dynamic that underlies capitalism in the form of
movement, contradiction and totality, which are the hallmarks of both dia-
lectical thought and actual social development. It is dialectical method that
arises from social and psychological reality itself that best captures the total-
izing, dynamic and conflictual nature of capitalist development.
A proper view of capitalism sees it as based on the three moments of
production, circulation of commodities and profit realization that mark the
cycle of accumulation. It is true that production and its social relations are
most important. On the other hand, the circulation of commodities in the
market and their sale in exchange for money and realization as money profit
are essential to the spiral which is at one at the same time value that is
expanding and capital that is accumulating depending on perspective. It is a
dialectical perspective that allows one to understand the two-sided nature of
this relationship. But it is a viewpoint that is alien to positivists who have dif-
ficulty conceiving how something can simultaneously be embodied as value
and capital (or for that matter wave and particle). As a result the positivist
Brenner dismisses the realm of circulation and realization as simply dependent
variables of production and therefore an afterthought.
Since capitalist production was mainly located in England and Europe
this view of capitalism becomes fundamentally Anglo- or Eurocentric. The
absence of such capitalist relations of production in non-European countries
is not a characteristic of the system as a whole but the result of the failure
of these countries to develop these class relationships. On the contrary, it is
only through an appreciation of the importance of circulation and realization
that were mainly non-European and global phenomena that one appreciates
the critical role of the world market and money to the completion of the
cycle of capitalist accumulation and an appreciation of the system as a whole.
It is only by appreciation of circulation and realization globally that one
can understand unequal development and colonialism. Understanding the
birth of capitalism therefore requires a two-sided or dialectical understand-
ing. Moreover, as we shall see, early modern capitalism was in good part a
chase after world money or universal equivalent in the form of gold and sil-
ver from the New World necessary to the advance of capitalist production in
Europe and the consolidation of a world market based on trans-Atlantic and
trans-Pacific trade. It is a dialectical viewpoint, dismissed by Brenner, which
permits one to comprehend that world money stimulated capitalist produc-
tion in Europe and exchange on a world-scale while simultaneously spurring
the search for and production of yet more world money in the New World.
As a result of this lack of a dual or dialectical perspective Brenner is unable
to grasp the fact that capitalism was both a mode of production and a set of
exchange relations that extended across the globe.
Rejection of dialectics leads Brenner furthermore to dismiss the impor-
tance of class struggle and revolution in the origins of capitalism in favour
of a reductive economism. Class struggle between a nascent bourgeoisie and
the popular classes on the one hand and the nobility on the other is critical
to an understanding of the birth of capitalism in England and, for that mat-
ter, Holland. Such conflict is rooted in the dialectical relationship between
feudalism and capitalism, the latter of which grows out of the former and
then in dialectical fashions enters into conflict with it.
Brenner, it is true, attributes great importance to the class struggles of the
late Middle Ages, but he treats them as a kind of first cause that establishes a
set of property or economic relationships which become determinative. It is
these property relations rather than ongoing class struggle which then neces-
sitates the development of capitalism. Class struggle plays no further role.
Rather than fighting the nobility the bourgeoisie comply with the former’s
demands for higher rents by becoming more competitive.
Dobb argued that peasant revolts and demographic decline during the
late medieval crisis led to the end of feudalism. Brenner agreed with this but
also further claimed that during this crisis changes in social property relations
unique to England set the stage for the subsequent development of capital-
ism. Having retained most of the arable land despite the crisis, the English
nobles were able, from the sixteenth century onwards, to impose economic
or market-based rational rents on tenants. It was these economic rents which

then forced tenants to become progressively more efficient producers.
Among other things that tenants did to enhance profitability and to meet
the terms of these economic rents was deploying wage labour in increasingly
efficient ways and thereby accelerating the accumulation of capital. In other
words the development of relative exploitation, which itself was a dependent
variable of changes in social property relations, lies at the heart of the ori-
gins of capitalism. It is this ongoing economic dynamic confined to England
that determined and shaped the development of the market, colonialism and
slavery in the rest of the world (Brenner 1977).
But Engels, in his well-known letter to Carl Schmitt (1895), acknowl-
edges that while value existed at the beginning of capitalism the development
of the law of value (and concomitantly the influence of relative surplus value)
was the outcome of a long historical process:
It is exactly the same with the law of value and the distribution of the
surplus value by means of the rate of profit. Both only attain their most
complete approximate realisation on the presupposition that capital-
ist production has been everywhere completely established, society
reduced to the modern classes of landowners, capitalists (industrialists
and merchants) and workers – all intermediate stages, however, having
been got rid of . . .
(Marx and Engels 2010: 50: 464)
However, such developments were ongoing over an extended and indeter-

minant period of time as Engels acknowledged. Brenner anachronistically
assumes that the law of value is already fully operative in 1500 and that
it was the driving force behind capitalist growth from its inception. His
assumption is that rational or more or less perfect markets already operated
in the sixteenth century in the way they presumably operated in the nine-
teenth century. On the contrary, we take the position that such markets
were only in the course of formation in 1500 and that ongoing class strug-
gles and the development of the early modern state played a large role in
facilitating this process.
The gradual development of the law of value is demonstrated by the
fact that although gains were made in relative exploitation in England from
the sixteenth century onwards, the real breakthroughs in this respect only
came in the eighteenth century during the so-called Agricultural Revolution
(Heller 2011: 87). Indeed, in the Grundrisse Marx notes that as late as Adam
Smith’s day ‘exchange value and determination by labour time were not yet
fully developed on a national scale’ (Marx 1973: 169). This is as much as
to confirm that the whole period prior to the late eighteenth century saw a
gradual development of the law of value.
Instead of understanding the market as historically evolved, Brenner has
reified it into an ahistorical institution that operated in the sixteenth century
as it operated in more modern times. Invoking the rationality of markets as
a driver of capitalist growth seems plausible to the modern reader because
market rationality plays that role in the present. But it is a poor argument
when it comes to the beginnings of capitalism in the sixteenth century.
The development of relative exploitation was undoubtedly a new and
essential feature of the emerging capitalist system. But it is important to reas-
sert that ongoing absolute exploitation and primitive accumulation were
likewise essential and constantly augmented relative exploitation in the
development of capitalism (Heller 2011: 88). That was true in the early
phases of capitalism and is no less true today. This suggests that far from being
a strictly economic process capital accumulation in its initial phase relied
on political and social compulsion as much as on market forces and conse-
quently we assume that, pace Brenner, capitalism is not merely an economic
phenomenon but a mode of production that reflects the effects of not only
economics but also politics and culture. There is in Brenner’s superficially
impressive arguments an over-weighting of the economic, which reflects
not the past but the fixations of our economically reified neoliberal present.
Notable is Brenner’s emphasis on the role of the landlord class as opposed
to the peasants, bourgeoisie and workers. True, his account of capitalism’s
beginnings takes its start from the peasant revolts of the fourteenth century.
But whereas others have stressed the social advances of the peasants and their
consequent differentiation into wage labourers and employers of labour as
key to the emergence of capitalist relations of production, Brenner instead
emphasizes the retention of control of the means of production by English
landlords and their ability to dictate economic terms to would-be capitalist
farmers. This despite the fact that the very existence of economic rents is
disputed before the eighteenth century (Heller 2011: 99). Moreover, the
existence of agriculturalists who can afford to pay capitalist rents presupposes
the emergence of a class of well-off peasants as a result of a process of class
struggle and social differentiation made possible by the late medieval crisis,
which weakened the grip of landlords. Brenner, to the contrary, stresses the
ongoing power of the landlords.
Moreover, Brenner’s economism ignores the role of ongoing ideological/
religious struggle in the liberation of the late medieval peasantry and crafts-
men as part of class struggle. The heretical Lollards in England, but also
the equally heterodox Brethren of the Holy Spirit, Beguines and Beghards,
Hussites, Waldensians, Spiritual Franciscans and Savanorolans on the European
continent helped to undermine the ideological institutions of feudalism. The

religious heresies, new cultural movements and revolutionary social move-
ments of the late Middle Ages were important factors in the decline of
feudalism, but find no place in Brenner’s exclusively economistic and point of
production perspective.
Criticizing Brenner’s emphasis on the continuing power of the nobility
Chris Harman in particular has stressed the class capacity of the petty pro-
ducers in the class struggles of the late Middle Ages. Harman insists on the
increases in the productivity of agriculture in the High Middle Ages both in
England and on the European continent. Agricultural surpluses were mar-
keted in the towns, manufactures were consumed not merely by nobles but
also by peasants and townspeople, and commercial ties between producers in
town and country were strengthened. Wage labour began to be employed
on a limited basis by incipient capitalists. Social differentiation among the
peasantry strengthened these tendencies. The late medieval crisis affirmed
rather than annulled these economic and social advances of the twelfth and
thirteenth centuries. During the period of late medieval crisis the lead in
opposition to the nobles was taken by those peasants and craftspeople who
were most in command of the forces of production that had developed in
the previous period of prosperity. In other words, Harman considers the
social upheavals of the fourteenth century throughout Western Europe to be
a proto-capitalist revolution brought on by the development of the forces of
production in the High Middle Ages and their fettering by the persistence of
feudal relations (Harman 2008).
Marx, in his discussion of the birth of capitalism in sixteenth-century
England, does speak of social property relations, stressing the relationship
between agrarian farmers and rural wage earners and the new social and
political importance of profit (Marx 1975: 905–7). Brenner’s stress is rather
on the social property relationships between landlords and their tenants and
the continued force of rent (albeit capitalist rent). But here the relationship
between tenant and landlord is viewed in purely economistic terms. The
ideological and ultimately political significance of the class struggle between
landlords and their tenants, including the setting of the terms of rent, is
ignored. Indeed, the role of the state and of class-based revolution in con-
structing markets and in the transition to capitalism is dismissed. Rational
markets are presumed to exist from the sixteenth century and determine not
only economic but also social and economic change whereas it seems clear
that a unified national market in England only fully emerged in the eight-
eenth century if not later and that the state had much to do with creating it.
Likewise capitalism having appeared in the sixteenth century, it is
assumed that it faced no serious opposition. The Tudor and Stuart dynasties
tended to favour capitalism more than monarchies on in Europe but at

the same time the state, until the English Revolution of the seventeenth
century, reflected the interests above all of the nobility and established
Church. The end of feudal property as well as the power of the estab-
lished Church were anathema to them and represented serious obstacles
to the consolidation of capitalism. The crown’s interference in prices and
wages, its laws against the enclosure of the land, arbitrary taxation, defense
of guilds and establishment of new economic regulations and monopolies
inhibited the development of rational markets. By virtue of its control of
the repressive and ideological apparatus of government the English mon-
archy represented an ongoing barrier to the consolidation of capitalism.
Ideological conflict between the established Church and Puritanism based
on the middle class reflected growing class conflict. Indeed, the struggle
over control of the state was the keystone of early modern revolutions
(Heller 2011: 124–6). For Brenner a fully mature capitalism existed from
the beginning of the sixteenth century and the class and legal struggles
of the Tudor and Stuart period are of secondary significance at best. His
objective is to downplay the importance of the Stuart monarchy’s resist-
ance to capitalism. Whereas most students of the period consider England
a social formation in which the feudal mode remained dominant until
the seventeenth-century political revolutions, the existence of capitalist
competition in 1500 makes England capitalist. For him the English state is
patrimonial rather than absolutist. Brenner’s view of the transition is not
only economistic but is also deeply anachronistic and ahistorical.
Continental capitalism
Brenner’s insistence that capitalism’s beginnings was unique to England is also
quite parochial.1 Its beginnings cannot be understood by looking at England
alone. Capitalism – from the start a single system – actually began in Italy,
spread to Germany and then to Holland and France. England was the last stop
in this progression. Many of the factors leading to the development of capital-
ism in England were also present in these other countries. The key difference
between these countries, where the development of capitalism was limited or
arrested, and England lay in the balance of power between capital, the state
and feudal power. At the beginning of capitalism Italy failed to consolidate a
territorial state thanks to the too great strength of merchant capital while in
Germany and France feudalism itself proved too strong. Our study of these
cases will demonstrate that, in addition to the economic conditions stressed by
Brenner, two political conditions were critical to the successful development
of capitalism: the existence of a territorial state and the influence of capitalist or
incipiently capitalist classes over the state. The faltering of capitalism in Italy,
France and Germany sheds light on the importance of the more propitious
political conditions that were obtained in England and Holland. And capital-
ism, being a single system that developed in an uneven fashion, meant that
its eventual consolidation in Holland and England came at the expense of its
further development on the continent of Europe.
Primitive accumulation, the initial step towards capitalism, i.e. the expro-
priation of the peasantry, began all across Western Europe at the end of
the Middle Ages. It assumed different forms and different paths and speeds
in different countries. Sooner or later it cleared a path to the development
of capitalism. England was only the classic case of this process. Capitalism
certainly developed earliest in the city-states of fifteenth-century Florence,
Milan and Venice based on their highly developed agriculture and advanced
commercial, manufacturing and banking enterprises. Despite political divi-
sion the late medieval period saw the emergence of an internal market for
labour and goods in the peninsula and, as a consequence, the appearance of
agrarian capitalism in the fertile Po Valley. Capital there entered and trans-
formed agricultural production and producers were transformed into wage
labourers. Industrial development was likewise strongest there, especially in
Lombardy. But lacking a centralized territorial state that could protect it and
too dependent on feudal and absolutist power, Italian capitalism tended to
remain at the level of finance and trade and declined in the late sixteenth
century (Heller 2011: 54–61).
Brenner simply ignores this Italian experiment. He furthermore flatly
denies that capitalism developed in France. For him the origins of capitalist
accumulation lay in England. The dialectical notion that both feudalism and
a subordinated capitalism could dialectically co-exist within a still domi-
nant absolute and feudal state is excluded by Brenner’s mono-causal logic.
Rejecting dialectical analysis that sees capitalism emerging within the chrysalis
of a social formation dominated by feudalism, Brenner insists that the key
to capitalist development is the supposed existence of economic rents in a
rational market which entails the preeminence of the capitalist economy
from its first appearance. The implication of this is that in the transition to
socialism a state in which elements of capitalism persists is not socialist. Thus,
states like the Soviet Union and the Chinese People’s Republic cannot be
seen as socialist experiments.
In Brenner’s hands the example of France reinforces the uniqueness of
English capitalism by becoming the perfect foil for the latter, experiencing
the same upsurge of class struggle as England in the late Middle Ages with a
quite different outcome. In France, peasants came to control roughly forty-
five or fifty percent of the land as against only twenty-five or thirty percent
in England. As a result of the greater share of property retained by the French

peasantry, argues Brenner, whatever tendency there was towards capital-
ism in sixteenth-century France was arrested. It is the differing allocation of
property and the contrasting relations of production which determined the
divergent evolution of the two countries in the early modern period. But we
must point out that northern France, where capitalism established itself, is
roughly double the size of southern England so that the actual land available
to capitalist farming may have been just as large as in England. Moreover,
the peasants there had more control of the land than in England. This should
have facilitated peasant differentiation and the emergence of capitalist farmers.
But in fact it was the repression of the producers by the feudal class and the
absolutist state that held back capitalism not peasant access to more land.
In any event, in the eyes of Brenner, England is the model and norm of
capitalist origins. France is the feudal Other. France remains the preeminent
example of failed transition (Heller 2011: 71–4).
As the most important Marxist authority on the transition question today,
Brenner’s view matters a great deal. His treatment of France has provided
grist for the mill of the revisionist trend in historiography that has sought
to sever the relationship between the French Revolution and the develop-
ment of capitalism. Since Marx it has been the view of Marxists that, like
the English Revolution, the French Revolution was a bourgeois and capital-
ist revolution. Such a view was a fundamental feature of the Marxist view
of history. The Brenner thesis could suggest that given the non-capitalist
evolution of France under the Ancien Régime such a bourgeois and capitalist
revolution was, to say the least, doubtful. In a curious way Brenner’s view
based in Marxism dovetailed with a developing scholarly and political trend
against the Marxist view of the French Revolution known as revisionism.
This undeniably conservative historiographical current, ascendant since the
1980s, attacked the idea that the revolution in France could be understood as
a bourgeois and capitalist revolution (Heller 2017: 4–9).
Under French absolutism feudal rent dominated to the point that there
was no capitalist bourgeoisie according to revisionism. But in fact the six-
teenth century saw an ongoing advance of the capitalist bourgeoisie. The
religious civil wars (1562–94) were undoubtedly a period of economic
regression and confused conflict of all against all – the bourgeoisie divided
against itself, peasants against peasants, as well as against nobles and towns-
men and, to top it all, nobles against nobles, and all sides in revolt against the
state. On the other hand, there can be no doubt that class conflict between
bourgeoisie and nobles was the critical element.
The essential arena of conflict was a struggle over the land in which the
peasantry were being drawn in on the side of the bourgeoisie. The response
of the nobles was to abandon the peasants to violence (Heller 1991: 60–1).
The nobility responded to the threat from below by carrying on a class
war from above. But the pugnacious French bourgeoisie were prepared
to challenge the nobility. Far from exhausting itself in the long war, the
bourgeoisie, in league with the urban plebeians and an increasingly aroused
peasantry, were prepared to confront noble power more and more as the
conflict unfolded. The concept of noble status itself came under ideological
attack. In the end, the Catholic and Protestant nobles who had revolted were
forced back into obedience to the king in order to protect themselves from
the growing menace of the Third Estate. This was the basis on which the
Bourbon king Henri IV (1594–1610) was able to begin reconsolidating the
monarchical state (Heller 1996: 157–196).
The increasing political and social assertiveness of the bourgeoisie was
based on its growing economic strength. The civil wars were hideously
destructive and resulted in a considerable economic and demographic regres-
sion. In the south of France, the capitalism that had developed in the first
part of the sixteenth century based on its tie with Italy weakened. On the
other hand, things were very different in the richer grain lands of the north.
The violence and heavy taxation of the civil wars may have forced many
subsistence peasants off the land, but the bourgeoisie benefited from what
amounted to primitive accumulation. A class of rural bourgeoisie in pursuit
of profit was able to consolidate itself. The increased dependence of the
expropriated peasantry on wages ensured the availability of abundant sup-
plies of cheap labour for agricultural work. A wave of interest in agricultural
improvement, new mechanical inventions and new manufactures developed
during the religious wars that continued through the reign of Henri IV.
Indeed, the Bourbon monarchy sought to support and control these initia-
tives through its mercantilist policies (Heller 1996: 119–96).
The seventeenth-century French state tried to contain this bourgeoisie
while favouring the reconsolidation of the power of the nobility and church.
That it was successful in the short run was signified by the decline of the
so-called sixteenth-century offensive of profit in favour of an offensive of
rent. On the other hand, the rural and urban bourgeoisie that had emerged
in the sixteenth century, though hard-pressed, survived and persevered
in the seventeenth century. It re-emerged with new vigour in the age of
Enlightenment. Capitalism expanded prodigiously in the last century of the
Ancien Régime. Pace Brenner et al., the revolution that came at the end of that
century was undoubtedly not merely bourgeois, but also capitalist (Heller
2017: 54–79, Heller 2006).
The case of German capitalism is yet more interesting because it links
directly to the relationship between capitalism in Europe and its connection
to the rest of the world. Italian capitalism continued to be significant until

the close of the sixteenth century. Over the decades of the 1500s however
it came to be rivalled by the emergence of another pole of capitalist devel-
opment in Holland and England. But between the 1470s and the 1520s the
most dynamic focus of up-and-coming capitalism in Europe was Germany
or the so-called Holy Roman Empire. Its geographical position between
still-dominant Italy and the emerging Holland helps to explain its dyna-
mism. But more significant was the extraordinary expansion of its mining
and metallurgical industries. Especially important were the gold and silver
mines of the Tyrol, Erzgebirge (Saxony/West Bohemia) and Hungary/
Eastern Slovakia. Organized and controlled on a capitalist basis, these mines,
which employed tens of thousands of wage workers, provided the liquid
capital in the form of precious metals that was critical to the spectacular early
expansion of the capitalist economy in Europe (1470–1530). Silver and gold
from Central Europe also supplied virtually the only commodities Europeans
could exchange for Chinese, Malay and Indian silks, spices and porcelains. It
was the precious metals from these mines that allowed the first stage of the
cycle of capitalist accumulation in German and European agriculture and
manufacturing to take place (Heller 2011: 61). Control of precious metals
or capitalist money meanwhile facilitated the opening of new trans-oceanic
sea lanes circumventing the Mediterranean in part and allowing Europeans
for the first time to trade directly with Asia. When German production of
silver and gold petered out after 1530 the influx of American silver and gold
allowed this initial direct commercial link to expand into an enormous world
market. It is our argument that the availability of this world money in the
form of precious metals, first from Germany and then the Americas, was as
indispensable to the development of capitalist accumulation as were capitalist
relations of production.
Population growth and overseas expansion led to an expansion of demand
for commodities in Germany from the last third of the fifteenth century.
Not only did the gold and silver mining sector expand, prodigiously capi-
talist relations of production were established throughout this key sector
with technical progress and substantial capital investment by capitalists from
Nuremberg and other south German cities. Moreover, the influence of
financial and merchant capital was also apparent to a greater or lesser degree
in the grain and woad trade and the extensive metallurgical, wool, silk,
linen, fustian, grain, salt, glass-making and printing industries that spread
across the face of Germany (Heller 2011: 66). But in Germany a powerful
feudal reaction consolidated itself as the capitalist economy and financial and
merchant capital advanced. Capitalism exacerbated class conflict at every
level of German society, prompting noble violence, increased feudal dues
and growing attempts to impose or re-impose serfdom on the peasantry,

especially in southern and southwest Germany and the Rhineland in the late
fifteenth and early sixteenth century. The imposition of serfdom even served
as a tool by which territorial princes extended their authority. On the other
hand, though they lacked leadership and common objectives the resistance
of the common people became equally fierce, leading to the plebian, worker
and peasant protests that characterized the period leading to the crisis of the
Reformation (Heller 2011: 67).
The further development of capitalism was also hemmed in by the impe-
rial and feudal order. The Hapsburg emperor sought to rule a universal
European state not a unified and centralized Germany. The emperor, as
well as the territorial princes, blocked such a national political project. At
the same time, serfdom and feudalism fundamentally barred the route to the
development of capitalism in agriculture. In Germany serfdom and lordship
grew stronger at the end of the fifteenth and beginning of the sixteenth
century and the new economic dynamism in fact made possible the simul-
taneous strengthening of not only capitalism but also feudal reaction. The
result of this volatile contradiction was the famous social and political explo-
sion known as the German Peasants’ War (1524–5), considered an early
bourgeois revolution by Freidrich Engels. As their power grew, Germany’s
territorial princes levied heavier taxes and servile obligations on the peas-
ants. The patrician rulers of the towns were allied to the feudal lords and
oppressed the rest of the urban population including the rich and not-so-rich
burghers. The burghers appear as a moderate opposition, aspiring to share
in the town governments from which they were excluded and attacking the
privileges and property of the clergy. Beneath them came the plebeians –
ruined burghers, small-scale craftsmen, journeymen, day labourers and the
numerous forerunners of the lumpen proletariat, some of whom became
part of a radical opposition. No better, perhaps even inferior to them, were
the peasants who earlier had engaged in numerous local revolts but who had
never come together in a general national revolt.
Though Germany was politically and economically divided on the
eve of the Peasants’ War, the Reformation created a crisis during which
revolutionary political and social ideas spread deeply and broadly in the
population. During this crisis three large camps coalesced: Catholic or
reactionary, Lutheran bourgeois reformist and revolutionary. The religious
conflicts of the sixteenth century were class conflicts fought out on the
basis of the shibboleths of religion. This was the result of the ongoing
powerful influence of the Church as a consequence of which all questions –
political, juridical, social and economic – were still posed largely in reli-
gious terms. The Church was the all-embracing synthesis and the most
general sanction of the existing feudal order. With roots deep in the Middle
Ages, the heretical ideology of the burghers, to which some of the nobil-
ity also subscribed, called for the material dispossession of the wealth and
privileges of the ecclesiastical order. Agreeing with such notions, peasant
and plebeian radicals took things a step further by calling for political,
social and even economic equality. The propertyless, of whom there were
increasingly large numbers, challenged the notion of a class-based society
by espousing in utopian fashion the idea of all things in common.
The Catholic conservative camp included the imperial authorities, the
ecclesiastical and some lay princes, the richer nobles, the prelates and urban
patricians. The Lutheran camp attracted to itself all the propertied mem-
bers of the opposition including the mass of the nobility, the burghers and
even some lay princes who wished to seize the property of the Church and
increase their independence from the Holy Roman Empire. The peasants
and plebeians constituted the radical party. The most important leader of the
latter group was Thomas Münzer, who vainly advocated communism and a
pantheism which, according to Engels, approached atheism.
While the aspirations of the radical party were doomed to fail so, too,
were those of the more moderate reformers. No effective alliance between
elements of the nobility and the bourgeoisie of the English sort emerged. In
the latter country serfdom had largely disappeared by the end of the Middle
Ages and the old nobility was virtually wiped out in the Wars of the Roses
(1455–87) and replaced by a new nobility of bourgeois origin. In contrast
serfdom was still rampant in Germany and the nobles drew their income
largely from feudal sources. Political power lay overwhelmingly at the local
and regional level.
The nearest approximation to a bourgeois revolutionary programme was
articulated by Wendel Hipler in the so-called Heilbronn Manifesto issued at
the height of the Peasants’ War. Engels is careful not to claim that Hipler’s
programme was an expression of the bourgeoisie but rather ‘what may be
described as the cross-section of the nation’s progressive elements, [which]
anticipated modern bourgeois society.’ While nominally written on behalf of
the peasantry, the Heilbronn programme called for a standardized currency,
standard weights and measures, abolition of internal customs duties, etc.,
demands which were more in the interests of the townsmen than the peas-
antry. In order to reach out to the nobility, concessions were made that
substantially approached the modern system of redemption and would have
transformed feudal into bourgeois landlordship (Heller 2011: 63–6).
Engels compares the German Peasants’ War to the French Revolution
from a political point of view. In the case of the eighteenth-century revo-
lution that occurred in a politically unified France, the whole country was
split into two clearly opposed camps. In a deeply divided sixteenth-century

Germany, this was a rank impossibility. On the other hand, Engels saw the
Peasants’ War not simply as a German event but as an international one based
on the prospects for the further development of capitalism. As he reiterated
on returning to the theme many decades later, ‘Reformation – Lutheran
and Calvinist – is the No. 1 bourgeois revolution, the Peasant War being its
critical episode . . . Revolution No. 1, which was more European than the
English and spread in Europe much more rapidly than the French’ (Engelber
and Vogler 1976: 105–6). Indeed, the Reformation spread throughout
Western and Central Europe. The failure of this German early bourgeois
revolution meant the subservience of capitalism in Germany to the forces of
absolutism and feudalism until after the French Revolution. This subordina-
tion was reinforced by the growing superiority of capitalism in Holland and
England, who integrated Germany into their economic orbit.
Global perspectives
Brenner and his school ignore the overall European perspective on the
development of capitalism in favour of a parochial Anglo-centrism. There
is little excuse for this kind of scholarship. But our criticism of the Brenner
and Political Marxist perspective also puts into doubt the Eurocentric view
on the development of capitalism. For Brenner’s school the non-European
world is extraneous to the development of capitalism. While not questioning
the fact that Europe was the centre of an emerging capitalism, our per-
spective takes seriously Marx’s own view that the birth of capitalism was
simultaneously the product of both new relations of production and the
creation of the world market and that they are dialectically connected. It
holds that the accumulation of capital is not merely the product of the social
relations of production but also the circulation and realization of capital. In
so doing it reviews the principal Marxist views on the significance of the
development of the world market and the effects of early capitalism on the
non-European world. Moving beyond discussion of these theories, it further
argues that the development of capitalist world money out of the gold and
silver produced in Latin America was critical to the emergence of the world
market by lubricating exchange relations across the globe. More significantly
it suggests that this world money, in the form of gold and silver bullion,
served an entirely new role by becoming indispensable in transforming the
creation of value through new relations of production into an ongoing pro-
cess of self-expansion, or, in other words, making possible the accumulation
of capital. Hence, we contend that the origins of capitalism were perforce as
much extra-European as European.
It is important to make clear in the first place that the development of

capitalist relations of production were by no means a strictly European affair.
Organized and controlled on a capitalist basis, wage labour came into existence
beyond Europe during the sixteenth century. It was a striking characteristic
of economic relations in the gold and silver mines of Bolivia and Mexico
(Brown 2012: 47–8, 50, 64). The advanced technology used in this industry,
which produced this universal equivalent and the relations of production that
prevailed in the mining sector both in the Old and New World, should also be
underscored. The fact that capitalist money or the universal equivalent of all
other commodities was itself a commodity produced by wage labour with the
most advanced technology available is remarkable, serving to announce a new
mode of production. John Tutino has furthermore demonstrated that capital-
ist relations of production were to be found not only in the Mexican mines
but extended into the valley of Mexico from the conquest period onward
(Tutino 2011). Equally significant is the role of gold and silver as a veritable
world money in the newly emergent capitalist world economy linking the
Americas, Europe and Asia (O’Flynn and Giraldez 2008). The silverization
of the Chinese economy that took place in the sixteenth century stimulated
the development of an incipient or embryonic industrial capitalism in China
through the spectacular growth of Chinese exports of silks and porcelains,
which became the principal axis of the emerging world market (Xu Dixin
and Wu Chengming 2000: xxvi, 90, 318, 375, 377). The essential element in
facilitating that market then was silver and gold, which began to take the form
of capitalist money or money that embodied, for the first time, the accumula-
tion in financial form of increasing amounts of value or abstract labour that
made possible the accumulation of capital. The emergence of capitalist world
money then constituted as much a founding element of capitalism as the wide-
spread development of wage labour in England and Europe. It is true, as we
have noted, that as the capitalist system developed globally it was Northwest
Europe, Britain, northern France, Holland and northwest Germany that came
to dominate the system. This was because wage labour became dominant in
Northwest Europe while less productive feudal and slave relations of produc-
tion predominated elsewhere, including in China and the New World.
A first attempt to theorize the global development of capitalism was made
by Eric Hobsbawm using the concept of uneven development. He did so
in his contribution to the celebrated debate on the transition from feudalism
to capitalism in the 1950s (Hobsbawm 1976). In this highly original con-
tribution informed by a dialectical view of history – a contribution that has
been largely ignored – Hobsbawm put the emphasis on the role of uneven
development in the evolution of capitalism throughout its history. As capi-
talism developed West European advance came directly at the expense of
Eastern Europe and Asia, Africa and Latin America. The process of West
European transition throughout its early history entailed turning other areas
into dependent economies and colonies.
Hobsbawm’s conception of the transition is a dialectical one in which
unevenness plays a central part. Gain in one place is invariably at the expense
of other places, even those that were initially more developed. In this schema
the advance of Holland and England towards capitalism entails the refeudali-
zation of Italy and Germany, the feudalizing of Poland, Hungary and Russia
and the progressive subordination of the Global South through colonialism.
Capitalist relations of production at the centre entails the reinforcement of
serf and slave relations in the periphery.
Eastern Europe and the Global South were turned into dependent econo-
mies and colonies. Seizing resources from less advanced areas or later on
from colonized regions became an intrinsic feature of West European devel-
opment. In other words, the emergence of capitalism has to be understood
in terms of an ongoing worldwide process of appropriation based on uneven
development both within and outside Europe. Hobsbawm concludes that
‘the net effect of European capitalism was to divide the world ever more
sharply into two sectors: the “developed” and the “under-developed” coun-
tries’, in other words, the exploiting and the exploited. From the perspective
of the non-West European world the onset of capitalism was a zero-sum
game played at the latter’s expense.
Immanuel Wallerstein’s world system theory may be regarded as an elab-
oration and systematization of Hobsbawm’s conception (Wallerstein 1974).
In common with Dobb and Brenner, Wallerstein acknowledged that the class
struggles of the fourteenth century marked the crisis of European feudalism.
But in contrast to their stress on changes in the relations of production as
key to capitalist origins, Wallerstein emphasized overseas expansion that, in
the first instance, was a way out of the impasse of class conflict from the per-
spective of the ruling class. It led towards the beginning of capitalism. The
expansion of the world market is an exit from class conflict.
Marx had noted that the sixteenth century saw both the emergence of
proletarian labour as well as the world market. For him these two devel-
opments, tied together dialectically, marked the beginning of the capitalist
epoch. But Wallerstein acknowledged the importance of the proletarianiza-
tion of labour only in passing, emphasizing instead the emergence of the
world market or a trade-based division of labour as the starting point for
accumulation (Wallerstein 1974: 37–8, 77, 127). Geographically, this ‘world
economy’ of the sixteenth century expanded to western, southern and east
central Europe and included the Mediterranean, Latin America and the coast
of West Africa (Wallerstein 1974: 68).
Wallerstein may have de-centered proletarian or wage labour, but only

to place it in his more widely conceived capitalist world system. Its three
main sectors were distinguished on the basis of the forms of labour each
featured, the forms favoured by ruling classes in each sector based on the
economic constraints and possibilities for profit within the emerging world
market. At the core of the system in Northwest Europe, wage labour became
the dominant form of exploitation in agriculture and manufacture. In the
semi-periphery, which embraced the rest of Western and Central Europe,
tenant farming, sharecropping and petty commodity craft production pre-
vailed. In the peripheral zones of Eastern Europe, Africa and Latin America,
which produced mainly grain and sugar, serfdom and slavery or coerced
cash crop labour became the rule (Wallerstein 1974: 86–7, 95, 103, 104–7,
112, 116). The existence of free or wage labour specified or defined the
emerging capitalist economy, Wallerstein acknowledged, as the ‘“relations
of production” that define a system are the “relations of production” of the
whole system, and the system at this point in time is the European world-
economy.’ But free wage labour could not be found throughout the world
system, Wallerstein insisted. Free labour was the form of labour control used
for skilled work in core countries. Coerced labour was used for less skilled
work in peripheral areas. The combination of free and unfree labour was the
essence of capitalism (Wallerstein 1974: 122). This was a radical re-definition
of capitalism motivated by Wallerstein’s belief that accumulation at the cen-
tre was based not merely on the exploitation of wage workers in Europe but
also on the exploitation of producers on the capitalist periphery. We would
only remind readers that wage labour is central to capitalism because, unlike
slavery or other forms of labour, it alone produces surplus value. It is only
when the surpluses produced by coerced labour are turned into capitalist
commodities by wage labour, e.g. sugar refined and transported to market
or hides turned into leather in tanneries by wage labourers, that they bear
surplus value.
At the core the market became the principle means of the control of
labour. But such capitalist states also tended to be strong with regard to other
strong states and with respect to weaker political entities in the semi-periphery
and the periphery. In the periphery states were weak or even non-existent.
In the latter two zones political or physical coercion of the labour force
persisted and was even intensified as they were absorbed into the capitalist
world system (Wallerstein 1974: 308–12, 355). The development of classes
was a function of, or depended on, its international division of labour. In this
system of uneven development and of strong states dominating and coercing
weaker ones, economic surpluses tended to move from the periphery and
semi-periphery towards the core. Over the long term under-development in
the periphery developed in tandem with development in the core based on

unequal exchange (Wallerstein 1974: 95–6, 100). The initial advantages of
higher skill levels and more fixed capital reinforced by greater political power
provide the core countries with a cumulative advantage over states located
toward the periphery. ‘Hence,’ concludes Wallerstein, ‘the ongoing process
of a world-economy tends to expand the economic and social gaps among its
varying areas in the very process of its development’ (Wallerstein 1974: 358).
For Wallerstein there is a single capitalist world system, which question-
ably makes the Polish noble extracting labour from a serf, a French noble
collecting rent from a subsistence peasant in the Auvergne or an English
noble collecting rent from a capitalist farmer in Kent equally capitalist parts
of the same process. But French and Polish nobles cannot remotely be con-
sidered capitalists because they did not exploit wage labourers but rather
subsistence peasants and serfs. Furthermore, Wallerstein’s notion of strong
states at the centre and less strong ones towards the periphery does not fit the
historical evolution of absolutist states such as the Ottoman Sultanate or the
Russian Empire in their heyday.
Jairus Banaji’s claim that capitalist relations of production were not deci-
sive in the advance of capitalism but rather that it is capitalism’s laws of
motion that are crucial is a specious distinction (Banaji 2010: 145). For while
it is true that labour tenancy, bond labour, sharecropping and chattel slavery
can produce surpluses only formally free wage labour can produce surplus
value. In so far as it becomes labour power or abstract labour value can be
measured in time and bought and sold for money and thereby accumu-
late as capital. None of the above forms of labour can be transformed into
labour power. Moreover, if the social, economic and political conditions
for accumulation do not exist wage labour does not become abstract and
cannot accumulate as capital. Moreover, capitalism is nothing if it does not
move forward. And what constitutes its progress or dynamic? It is the historic
triumph of the relative exploitation of wage labour over absolute exploi-
tation and non-capitalist forms of exploitation. It is true that other forms
of exploitation have always accompanied this advance. But the return of
labour tenancy, bond labour, sharecropping and slavery to prominence and
the regression of relative exploitation in contemporary capitalism should be
taken as a sign of regression.
Marx’s conception of uneven global development has been further devel-
oped by David Harvey. Harvey understands the development of capitalism
as proceeding through the recurrent renewal of accumulation by means of
what he terms a spatial fix. Harvey argues that one of the ways that capital-
ism has repeatedly attempted to overcome its crises of over-accumulation
is through the abandonment of older centres of accumulation that have
exhausted their profit potential and the relocation of productive investment

toward new poles of accumulation. In the contemporary context, the move-
ment of investment capital from the United States towards China is a good
example (Harvey 2005: 122–3). Indeed, the interest of Harvey in the his-
toric displacement of the centre of capitalist accumulation from one centre
of accumulation to another is obviously connected to the relatively recent
shift of the focal point of capital from London to New York and the possible
future transfer of the global centre of capitalism to Asia. Such displacements
provoke severe social and political turbulence in what Harvey calls a switch-
ing crisis. The current political turmoil in the United States in the wake of
widespread de-industrialization and relocation of investment in China and
the Global South is a notable instance.
Giovanni Arrighi has lately attempted to show the pertinence of Harvey’s
conceptions of spatial fix and switching crisis to an understanding of the
outbreak of signal crises and the initiation of a financial or declining phase
of imperial power in the historical cycles of successive Genoese/Spanish,
Dutch, British and American political hegemonies. In each instance, it is
the displacement of capital from a place where over-accumulation has led
to stagnation towards a fresh centre of accumulation that provokes crisis and
political and social conflict (Arrighi 2009).
It was Marx himself, of course, who had pointed out how capital had
successively moved from Venice to Holland to England and finally to the
United States from one pole of accumulation to the next through the mech-
anism of the international banking and financial system (Marx 1975: 920).
While we have limited hard or quantitative data of such capital movements,
the sequence has been more or less confirmed by Fernand Braudel and
Richard Goldthwaite (Braudel 1979: 118, 202–7, 228, 252–3, Goldthwaite
2009: 135–6). It is to Harvey’s credit that he has brought this geographical
dimension of the historical movement of capital to the fore. Nonetheless,
this spatial displacement of capital should be seen in the light of Marx’s more
fundamental notion of uneven development, which he considered a charac-
teristic feature of capitalism. Throughout it is the state and the hierarchical
order of the international state system that provides the political framework
for these displacements.
The theorizations of Hobsbawm, Wallerstein, Harvey and Arrighi allow
us to understand capitalism’s beginnings as a global system. But they assume
rightfully that Europe and the United States were at the core of the system.
I do not see how that reality can be erased despite recent post-colonial
attempts to provincialize Europe or to downgrade its historical significance.
After all, in my view, being in the vanguard of capitalism is no particular
virtue. Whatever virtue capitalism had as a mode of production has by now
exhausted itself and we are waiting for its replacement by socialism. Envy by
post-colonial scholars of the West’s past achievements politically and eco-
nomically is no foundation for critical understanding. Whatever prestige the
West once had is being erased by the rise of Asia and the contemporary crisis
of capitalism.
From a political point of view the left has always assumed that capital-
ism had a centre. Moreover, it seems to me important in a political sense
to always locate the headquarters of capitalism rather than to pretend that it
existed everywhere or that such a system, having no centre, really does not
matter in a political sense. But the historical significance of the imperialism
of the major capitalist powers has always mattered. That said, a useful attempt
to minimize a Eurocentric perspective has lately been offered by Alexander
Anievas and Kerem Nisancioglu (Anievas and Niscancioglu 2015). The two
demonstrate the political or economic importance of non-capitalist and non-
European societies to the development of capitalism.
To break out of the pervasive Eurocentrism in the debate, they turn to
Trotsky’s theory of uneven and combined development. Trotsky argued that
the capitalist mode of production transformed the general law of uneven
development, which holds that societies grow at different paces, some faster
and others slower, at various points in time. He maintained that capitalism’s
unique expansionary qualities led it to penetrate pre-capitalist modes of pro-
duction, subordinating their economies and states to its laws of development.
It thus produced hybrid societies, combining the world’s most advanced and
backward features.
His paradigmatic example was of course Russia at the turn of the twentieth
century. It had been a backward, feudal society ruled by the autocratic tsarist
state. European capitalism penetrated it towards the end of the nineteenth
century, producing a hybrid formation that combined advanced capitalist
development with backward feudal relations (Anievas and Niscancioglu
2015: 44–50).
Anievas and Niscancioglu use uneven and combined development as a
methodology to show how capitalism came into being through an inter-
national, inter-societal process. They demonstrate how more developed
tributary modes of production in societies such as China and the Ottoman
Empire suffered the ‘penalty of progressiveness’, their more advanced eco-
nomic systems and stable states stifling the development of capitalism within
their boundaries.
By contrast, the economic and geopolitical interaction between them and
less-developed feudal Europe, in particular Holland and England, granted
them the ‘privilege of historical backwardness’, as they incorporated more
advanced productive forces from elsewhere (Anievas and Niscancioglu
2015: 104, 106, 115, 250). Moreover, under ‘the whip of external necessity’,
Europe was forced to compete geopolitically with its more advanced rivals,
a dynamic that provided the condition for the development of capitalism in
Holland and England.
Within this framework, Anievas and Niscancioglu radically recast the
process of capitalist development as the result of the inter-societal interaction
between European feudalism and the Mongol Empire, the Ottoman Empire,
the conquest of the Americas, the establishment of the slave trade and plan-
tations and the colonization of Asia. This international version of history is
perhaps their book’s most significant contribution.
They begin by demonstrating how the Mongol Empire spurred the
development of merchant capital throughout Europe. The Pax Mongolica
opened up the Silk Road, dramatically increased trade and transferred the
Empire’s higher development of its productive forces to backward Europe.
This encouraged the formations of cities, which had a gravitational pull on
peasants to leave the countryside and become wage labourers, especially in
the Italian city-states (Anievas and Niscancioglu 2015: 67, 71–7).
The Mongol Empire was also the source of bubonic plague that caused
the Black Death in Europe, which decisively changed the balance of class
forces in England, driving lords to become capitalist farmers and peasants
to become rural labourers. Thus the Pax Mongolica forms an international
precondition for the rise of English agrarian capitalism recounted by Brenner
(Anievas and Niscancioglu 2015: 77–88).
But, Anievas and Niscancioglu contend, without the geopolitical com-
petition from the Ottoman Empire Holland and England would never have
undergone the transition to capitalism. The Ottomans’ more advanced tribu-
tary mode of production buttressed a more stable, unified state compared to
Europe’s squabbling feudal states. As a result, they were able to deploy a far
larger military force against their rivals in Europe.
The most powerful state in Europe, the Hapsburg Empire, had no choice
but to mobilize a disproportionate amount of its forces against the Ottomans.
The geopolitical rivalry between the Hapsburgs and the Ottomans facili-
tated Holland and England’s capitalist development in two ways. First,
it offered their merchants significant trade opportunities; second, it pro-
vided them the geopolitical space to develop capitalism and complete their
bourgeois revolutions.
With the Hapsburgs preoccupied, Holland managed to successfully carry
through the Dutch Revolt and establish the first capitalist nation state. In
England, the Hapsburg’s preoccupation with the Ottomans ensured their
isolation from any threat and led to a relative demilitarization of the feudal
lords, thereby weakening their power over the peasantry and compelling
some of them, in the wake of the Black Death, to adopt a capitalist agriculture
(Anievas and Niscancioglu 2015: 91–120).
However, without the conquest of the Americas and the development
of plantation slavery, Anievas and Niscancioglu argue, the new capitalist
powers could have been strangled and certainly would not have undergone
capitalist industrialization. The Ottomans’ were the principal reason that
the European societies reorientated from the Mediterranean to the so-called
New World. And once they did, the plunder of the region reinforced the
differential patterns of development between the feudal absolutist powers
like Spain and those of the newly capitalist Holland and England. Driven
by its feudal military preoccupation of competing with the Ottomans, Spain
used its horde of gold and silver to pay off loans it had taken out to pay for
its military. Much of that treasure ended back in Holland and England to
expand their new system.
Anievas and Niscancioglu also show how the colonial slave trade and
the hybrid labour regime of plantation slavery, which fused capitalist pres-
sures of production for the market with pre-capitalist relations of production,
provided the raw material for industrialization – cotton, for example, being
the basis for England’s textile boom. Parenthetically we note that Keith
Pomeranz argues that access to overseas raw materials made it possible for
England to escape a Malthusian trap that China, which was at a comparable
level of economic development, could not avoid (Pomeranz 2000: 14–15).
The combination of these inter-societal dynamics thus made possible cap-
italist development in Holland, England and eventually the rest of Europe
(Anievas and Niscancioglu 2015: 120–73). But this was not an evolutionary
process. They argue bourgeois revolutions were necessary to establish capi-
talist states to defend and reproduce capitalist class rule internally against the
exploited classes and internationally against both capitalist and pre-capitalist
rivals (Anievas and Niscancioglu 2015: 174–214).
Money
Let me conclude by returning and amplifying on my earlier discussion of
the importance of the creation of world money to the onset of capitalism.
Recognition of the importance of money to the operation of capitalism is
not merely a scholarly exercise. As we know, we currently live under the
rule of a globalized financialized capitalism in which money capital is at the
core. The unification of capitalism as a global system has been made possible
by the dominant position of money capital. At the same time the ascendancy
of money capital is what is destabilizing the whole system today. Relations
of production and indeed the stability of states are being undermined
worldwide by the rule of finance capital. Speculation threatens the possibility

of productive investment and reliable accumulation.
This is a principal reason why Marxists today are preoccupied with Marx’s
theory of money. In this light it seems to me more important than ever to
try to understand, theoretically and historically, the role that money played
in early capitalism in terms of the development of the world market, but also
to the beginnings of the process of capital accumulation. As we have noted
it is striking that the production of gold and silver both in the New World
and the Old was itself a vanguard capitalist industry in the late fifteenth and
sixteenth centuries using wage labour and seeing major investments in tech-
nological improvements. In other words, the production of money was itself
a major source of the production of value. Moreover, the infusion of mas-
sive amounts of money into England, the Low Countries and France rapidly
monetized and commodified these Atlantic economies. An unprecedented
inflation based on a lag in agricultural output and rising food prices allowed
nascent capitalists to reap windfall profits. The minting of small coins by
these governments during the sixteenth century makes it clear that the speed-
ing up of market activity was strongly reflected in local markets. Moreover,
population growth, enclosures, bankruptcies, war and violence expanded the
size of the working class. The employment of more and more wage labour
in agriculture and manufacturing who were paid in coins whose value was
being constantly debased allowed the expansion of the role of surplus value
and profit in these economies. The increasing size of this expanding working
class and its exploitation is confirmed by the English Statute of Artificers of
1563 and the French Ordonnance of 1577, both of which attempted to fix
wages despite the fact that prices were rising much more quickly.
Although not a Marxist Ian Blanchard has done pioneer work on the
relationship between the growing availability of gold and silver, the devel-
opment of credit markets, low interest rates and the pace and direction of
productive investment on the European continent and in England in the
sixteenth century. The gradual relocation of the centre of gravity of financial
capital and lower interest rates from Italy, Germany and Spain to Antwerp
and London as described by Blanchard is noteworthy. Likewise, significant is
the relationship between low interest rates and growing investment in agri-
cultural improvement in Holland and southern England (Blanchard 2005:
109, 112, 114–16). Blanchard’s work helps us to understand that money at
this point began to assume a new role. Not only did it serve to create a world
market it began to take on the function of facilitating capitalist accumulation
in Northwest Europe.
In the Ancient World and in the Middle Ages money served as a means of
purchase or payment and also as a hoard. During Antiquity highly developed
markets developed in the Greek and Roman period in which gold and silver
functioned as universal equivalents for other commodities. On this basis
commercial relations on a considerable scale developed in the Mediterranean
and beyond. Likewise, following the hiatus of the Dark Ages, the Middle
Ages saw the redevelopment of these exchange relations that now embraced
Western Europe. Precious metals were accumulated as hoards by the estab-
lished Church and by Italian bankers. In Florence, Venice and Milan banking
became a speciality that more and more facilitated international commerce
and the financing of war by high and late medieval states and kingdoms.
Some Italian cities such as Florence and Venice were able to coin money
that achieved international acceptance as currency. Kingdoms such as France
and England established mints and were able to mint and circulate coins
facilitating trade within their territories.
From Antiquity onwards money was particularly important as a form of
payment that allowed landowners, merchants and tax collectors to exploit
the labour of small-scale producers. Until the advent of capitalism the
hoarding of money, the use of money in exchange and the development of
credit money were the way money functioned. These functions of money
would continue under capitalism but money barely functioned as a means
of accumulating capital.
For that to happen two things were necessary. In the first place surplus
value and coincidental profits had to become a significant aspect of the
economy. This was only possible as significant numbers of producers were
forced to become wage workers, i.e. sell their labour time in such a way that
the surplus it produced could become available as surplus value and profits.
Secondly, an accumulation cycle had to emerge in which the production
and circulation of commodities ended with the accumulation of profits in
the form of capitalist money, part of which could be reinvested. The func-
tion of money, which embodied surplus value for purposes of reinvestment,
was entirely novel. Alongside the emergence of the extensive development
of wage labour this change marks a quantitative leap or revolutionary change
signalling the emergence of a new mode of production.
With the advent of new capitalist relations of production money began
to develop an entirely novel function, namely embodying abstract labour
or value. In this way it opened the way to the accumulation of capital. This
alone makes it clear that the Political Marxist view that ignores the creation
of the world market and puts all the stress on the emergence of capitalist rela-
tions of production fails to take account of the role of money in the capitalist
economy and, by doing so, does not deal with the emergence of accumula-
tion as a fundamental aspect of the new mode of production. Moreover,
given that the source of this new capitalist world money lay outside of Europe
the Brenner and Political Marxist view that the beginnings of capitalism
were simply an English or European matter is untenable.
What else have we learned from our review of different Marxist views
on the origins of capitalism? We have learned that debate is an intrinsic
feature of Marxist discussion of historical questions. We have discovered
furthermore that the transition from feudalism to capitalism was a long and
tortuous process unfolding over centuries. We have learned that feudalism
as a mode of production was very strong. It had the capacity to generate
substantial economic growth in France including the development of cit-
ies and manufacturing centres that rivalled those of early modern capitalist
societies in England and Holland. We have found that the development of
capitalism was by no means simply a result of economic factors but that class
and ideological struggle played a large part. That a strong state was an indis-
pensable feature of the process. That the development of capitalism was not
merely an English or even European affair but rather a global phenomenon.
That a positivist and economistic bias against Marx’s view of the transition
as dialectical, i.e. entailing the simultaneous creation of capitalist relations
of production and the world market encouraged Brenner’s parochial and
one-sided view of its origins. That the transition to capitalism was a long and
drawn out process but that early modern bourgeois revolutions – German,
French, Dutch and English – were indispensable in such transitions and that
success was by no means guaranteed.
It is true that in the nineteenth century transitions to capitalism were
made by Germany and Japan by imposing it from above. But it is important
to insist on the revolutionary and democratic character of the initial transi-
tion to capitalism in the face of recent attempts on the part of the Political
Marxists and other revisionists who reject the decisive importance of revolu-
tionary change. Without the intervention of the mass of peasants, craftsmen
and workers the bourgeoisie by themselves could not have overthrown feu-
dalism and established capitalism. Moreover, the absolutist monarchies and
nobility left to themselves would never have arrived at capitalism. Likewise
revolution from below by workers will of course be a prerequisite to the
transition from capitalism to socialism.
A transition to socialism is not certain. On the other hand, it is prob-
able that it, like the transition to capitalism, is likely to be the result of a
prolonged crisis of capitalism punctuated by sudden revolutionary change.
The gradual centralization of capital is what facilitated the initial bourgeois
revolutions in favour of capitalism and what will help induce the eventual
socialist revolutions against capitalism. But whereas a capitalist transition is
the result of the step-by-step infiltration of the bourgeoisie into control of
both the economic and political system, the transition to socialism is based
on the seeming extrusion of the producers from control over the process of
production. This is what is required by the process of primitive accumulation
and by the law of value and is what eventually throws capitalism into eco-
nomic crisis. For it turns out that without the surplus value produced by the
working class the continuation of capitalism is unthinkable. It is that which
prompts the turn from economics to politics and increasingly throws the
spotlight on the issue of which class controls the state. At the same time the
concentration of capital also magnifies the potential economic and political
clout of those workers who remain employed in the most productive sectors
of industry or are part of the worldwide production and distribution chains.
Note
1 Brenner later allowed that capitalism also developed in Holland (Brenner 2004).
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3
ASCENDANT CAPITALISM
(1789–1980)
Capitalism reached its zenith in the nineteenth and twentieth centuries.

Following the upheavals and wars of the French Revolution and the
Napoleonic period the nineteenth century was relatively peaceful although
punctuated by revolutions in the first half of the century. Wars between the
capitalist powers in the nineteenth century were rare and short-lived. They
were mainly waged by the European powers at the expense of the nations
of the Global South. Capitalism boomed, growing and transforming itself
organizationally into vast industrial and banking corporations and assuming
monopoly forms closely attached to the state. Even backward Russia and
feudal Japan began to move toward capitalism and industrialization in the
closing decades of the century. Meanwhile, successive revolutions in France
cleared the deck of old relations of production and allowed the forces of
production to forge ahead.
The twentieth century was highly disturbed. Global wars and economic
depression in the first half of the century and a Cold War – permanent mil-
itary and ideological mobilization short of world war – opposed the forces
of capitalist imperialism on the one hand and revolutionary socialism and
national liberation on the other. Globally East divided from the West, the
under-developed South from the capitalist North. Wars and revolutions in
the twentieth century caused a mortality of well over one hundred million
people. But paradoxically these upheavals seemed to energize rather than
damage capitalism. An extraordinary increase in capitalism’s scale marked
by a vast increase in economic output and an improvement in living stand-
ards for the peoples of the Global North accompanied ongoing upheaval.
Ascendant capitalism (1789–1980) 55
Socialist revolutions in Russia and China no doubt narrowed the field of

of capitalist operations. On the other hand, they failed to inhibit a tremen-
dous expansion of the forces of production in the United States, Western
Europe and Japan. Successive world wars, however destructive, unleashed
the full productive powers of American capitalism and made possible the
reconstruction of capitalism on a new foundation in Europe and Japan.
The nineteenth century began with the French and Industrial Revolutions.
Breakthroughs in the relative exploitation of wage labour were reinforced
by the more extensive exploitation of slave labour, especially in the United
States, Cuba and Brazil. The Haitian Revolution proved to be the opening
act in a bitter struggle between free and slave labour that went on through
much of the nineteenth century. Rapid economic growth and the expansion
of the bourgeois and working classes set the stage for a series of revolutions
which culminated in the Revolutions of 1848. This upheaval coincided with
the publication The Communist Manifesto by Karl Marx and Friedrich Engels,
a dramatic intervention that envisioned the union of the struggles of the
working class with the doctrines of historical materialism. In reaction the
consolidation of the nation-state helped to contain revolutionary socialism
and facilitated a massive expansion of the forces of production.
The depression which set in in 1873 marked a turning point. Capitalism
moved from growth based on laissez-faire to monopoly capitalism and the class
struggle was transformed from Gramsci’s war of movement (revolution) to his
war of position or attrition against capitalism. Enhanced profits due to the con-
centration of capital, bureaucratization of business corporations, technological
innovations and the intensified exploitation of the Global South allowed some
increase in the living standards of the working class in the advanced capital-
ist countries. The success of unionization and working class political parties
tended to tame rather than inflame revolutionary commitment.
Late Capitalism began with the outbreak of World War I, initiating a
half century of total wars based on rivalries between monopoly capitalist
states amid ongoing economic upheaval. Capitalism was challenged by the
Russian Revolution and the Communist International. This political form
of class struggle was countered by the post-Versailles system of sovereign
nation-states championed by the Anglophone powers of the United States
and Great Britain. The economic upheavals of the postwar and the trauma of
Depression provoked a fascist reaction to the threat from socialism in Italy,
Germany and Japan. All three states were authoritarian and militaristic and
proved eager to use force to pursue their goals in the face of ongoing British,
French and American imperialism.
World War II saw Communism triumph in most of Eurasia. The advanced
capitalist states bordering the Atlantic and Pacific and most of the Global
56 Ascendant capitalism (1789–1980)
South fell under American hegemony. The American giant state globalized
monopoly capitalism inaugurating a Cold War against the Communist states
while unleashing a powerful new wave of accumulation based on a compre-
hensive system of multilateralism, militarism, freer trade pacts, multi-national
corporations, globalized production and increasing international division of
labour, mass consumerism and further exploitation of the Global South. In the
1970s profit margins thinned while the Cuban and Vietnamese Revolutions,
anti-imperialist and anti-colonial struggles in the Global South and internal
unrest in the United States and the other capitalist countries destabilized the
framework of the emergent American Empire. A new counter-revolutionary
phase opened with the onset of neoliberalism.
The French Revolution

The overthrow of the Ancien Régime by the French Revolution is a prime
example of quantitative or additive long-term change suddenly transform-
ing itself into qualitative change. It marked the last and greatest of the early
modern bourgeois revolutions and the onset of modernity. The capitalist
mode universalized itself.
The Revolution, with its countrywide urban and rural revolts, was the
culmination of mounting internal unrest caused by an exacerbation of popu-
lar misery. It was mass revolutionary action by the people that allowed the
bourgeoisie to take control and legislatively destroy feudalism and the abso-
lutist state. At the same time the increasingly wealthy French bourgeoisie
in the eighteenth century had developed the forces of production to the
point where the relations of production of the Ancien Régime were burst
asunder and it could seize state power in the midst of popular revolution
(Heller 2006). The misery of the masses and the increasing strength of the
bourgeoisie together made the Revolution possible. The Revolution led
by the bourgeoisie inaugurated a new culture of modernity based on indi-
vidual liberty, constitutional government, equality before the law, separation
of church and state, free markets, rational thought and the idea of progress
or the conquest of nature and elimination of political and social irrationality
over time. The French Revolution, like the Russian Revolution, led to an
enormous cultural transformation. Subsequent world socialist revolution will
also bring sweeping cultural change.
Whereas up to 1789 we can say that capitalism was the economically
rising mode of production in a social formation in which the politically
dominant mode was still feudal, the French Revolution of 1789 was the
turning point that saw the sudden emergence of a new European-wide for-
mation in which capitalism dominated politically as well as economically,
and feudalism was subordinated to it. The Revolution cannot be understood

merely as an economic matter but was a change of the whole of society,
i.e. a dramatic transformation in the mode of production no less, includ-
ing its property relations as well as religion and culture, which changed
from feudalism to capitalism. Feudalism was largely dismantled over much
of Continental Europe in the wake of the invasion of the armies of the
Revolution and Napoleon. Revolution henceforth became the focal point
of modern politics. The subsequent socialist revolutions in Russia, China
and Cuba took the French Revolution as a model for a would-be transition
to a socialist mode of production.
While the main current of the Revolution saw a violent transition from
feudalism to capitalism, socialist and feminist ideas were promoted by men
and women activists. Anticipating later developments Gracchus Babeuf led
a secret revolutionary group of several hundred workers and radical political
militants who organized a conspiracy to bring about a socialist revolution on
behalf of the working class (1797) (Dalin 1987, Schiappa 2003). The women
of Paris galvanized the celebrated march on Versailles of October 1789
and were active participants in most of the great events of the Revolution
(Guilhaumou and Lapied 2006). In the most radical Parisian neighbourhoods
at the height of the Revolution women were given equal political rights
to men. The right to divorce and female inheritance were granted legal
recognition. The equality of men and women was argued for by Olympe
des Gouges as well as by Mary Wollstonecraft in England among others
(Diamond 1994, Ferguson 1992). The failure of women to advance their
cause further was the result of the continued defensiveness of male crafts-
men and merchants with respect to maintaining the gendered division of
family labour but also because of their fear of competition and the threat of
unemployment.
Having taken power the bourgeoisie attempted to deny the common
people and workers political and economic rights. It is significant nonethe-
less that the Le Chapelier Law (1791), which outlawed strikes and unions,
liberated workers from conditions of personal dependence that had charac-
terized their legal status under the feudal laws of the Ancien Régime. Based on
the constitutionally new guaranteed right of the people to assemble workers
formed unions and called strikes during the revolutionary and Napoleonic
period despite the prohibitions of the Le Chapelier Law and the recurrent
imposition of martial law on them (Guicheteau 2014).
During the Revolution there was some centralization of industrial pro-
duction and considerable growth in the factory production of textiles and
chemicals and the expansion of a factory proletariat (Heller 2006: 133–4,
137–9). But the redistribution of some church and noble land to peasants
slowed the process of proletarianization and the development of large-scale

industry in France until the latter half of the nineteenth century (Heller 2017:
154–64). The overall effect of the Revolution was to provide somewhat
greater freedom to French workers while inhibiting the pace of capitalist
development and industrialization as compared, for example, to England
where the bourgeoisie enjoyed almost unlimited power. The standard of
living of the French population overall improved in the aftermath of the
Revolution (Heller 2006: 141).
Slavery
In the meantime the Revolution in France inspired revolution and the
destruction of slavery on the island of Haiti (1791) (Blackburn 1997).
Merchant capitalism had allowed a process of extended primitive accumula-
tion based on slavery in the colonies. It helped reinforce capital accumulation
resting on the exploitation of wage labour in England and Continental
Europe. The vast surpluses generated by slavery reinforced the development
of industrial capitalism. Contrary to a view that has become common in
mainstream historiography that plantation slavery was itself a form of capital-
ism, Robin Blackburn echoes Marx in seeing it as a form of direct forced
labour in the colonies. It enabled the extraction of surpluses in the form of
primary products that allowed the extraction of actual surplus value through
wage labour in Europe.
Plantation slavery was a mechanism that allowed a process of ongo-
ing primitive accumulation in the colonies to feed capitalist accumulation
based on the exploitation of wage labour in England and Western Europe
(Blackburn 1997: 527–44). Forced or slave labour, which was increasingly
organized and intensified, reinforced the extraction of surplus value at the
centre. Citing scattered comments by Marx repeated attempts have been
made to view plantation slavery as equally as efficient as wage labour and to
portray it as effectively capitalist. But recent research reveals that value per se
could not be extracted from forced as against paid labour and that the law of
value did not govern the operation of the slave plantation, which remained
backward technologically as compared to capitalist factories (Post 2011).
Slavery was largely concentrated in the rural sector in North America,
whereas there were many slaves in the colonial cities of Latin America and
the Caribbean. Where it was found urban slavery was likely to allow a little
more autonomy to the slave. New world markets and raw materials vitally
contributed to industrial capitalism. The planters, their brokers and mer-
chants were also crucial sources of credit helping to finance canals, railways
and steam ships. Meanwhile in Africa massive imports of European guns
fuelled slave-raiding and an immense expansion of the slave trade in the

latter half of the eighteenth century. Racism certainly existed prior to the
blossoming of plantation slavery but it was deeply reinforced by slavery’s
economic success.
Anti-slavery
The Haitian Revolution became the prologue to the worldwide abolition
of slavery in the nineteenth century, but not without further struggle. An
intense debate unfolded as to whether free labour was economically and
morally superior to unfree labour (Drescher 2002). The seriousness of the
debate between the two forms of exploitation was compounded by the fact
that worldwide demand for sugar, tobacco and cotton reinforced slavery
in the United States, Cuba and Brazil (Tomich 2004). The stage was set
for a titanic political and military struggle in the United States between the
sides espousing free or slave labour in the mid-nineteenth century (1861–5)
(Levine and Foner 1992). Following abolition in the United States Cuba
(1886) and Brazil (1888) likewise abolished slavery.
The aspirations of the industrial bourgeoisie were embodied in the notion
of free labour: labour that was forced to sell labour power as a commodity
to live and was legally free to do so. Indeed, bourgeois political economists
argued that free labour was more skilled and easier to lay off than more
dependent labour. Workers also supported free labour because it lessened
their personal dependence on masters. Marx underscored that the capitalists
responded to gains by the formally free industrial working class by investing
in greater productivity to maintain profits and ensure their ongoing control
over production.
The ideology of free labour inspired the anti-slavery movement in the
United States. It also allowed a limited truce in the emerging class struggle
between labour and capital. It was against this background that Marx devel-
oped his all important concept of surplus value discussed earlier. According
to Marx surplus value was the money form of surplus extraction. Serfdom
and slavery were non-monetary or directly coerced forms of surplus extrac-
tion and hence could not be translated into abstract labour or labour power,
a commodity bought and sold for money
The creation of surplus value was based on the existence of market
exchanges between different forms of concrete labour. But this possibility
itself depended on the existence of a certain level of equality in society in
which the sale and purchase of labour was necessary because the supply of
dependent labour was increasingly restricted. It was this surplus value accu-
mulated in money form that made the overall expansion of capital possible.
This expansion of capital was not possible under slavery or serfdom. In other
words surplus value and particularly the expansion of value was only possible
under conditions of free labour.1
Marx’s passionate espousal of free labour has been obscured by the way
he makes the case for it in Capital. There he elucidates its significance by
contrasting Aristotle’s view of value with that of modern capitalist society.
As Marx explained Aristotle quite clearly states that the money form of the
commodity is only a more developed aspect of the expression of the value
of one commodity against some other commodity chosen at random. But
Aristotle was unable to discover a common notion of value between two
commodities. That was because the concept of all labour as expressing
equal human labour and therefore as labour of equal quality was foreign to
Greek society. The latter was founded on the labour of slaves, or the con-
cept of the natural inequality of slaves and of their labour power as against
others. The secret of the expression of value, namely, the equality and
equivalence of all kinds of labour, and in so far as they are human labour
in general, could not be discerned until the concept of human equality had
acquired the permanence of a fixed popular opinion. This is only possible
in capitalist society where the commodity form is the universal form of
the product of labour, hence the dominant social relation is the relation
between men as possessors of commodities. The concept of value then is
not simply economic but the outcome of a social and historical process of
democratization (Marx 1975: 151–2).
But as we have suggested the concept of all human labour as equal was
far from having become a fully fixed opinion in Marx’s time. Indeed, slav-
ery made a comeback in the first part of the nineteenth century. Powerful
interests rejected the idea of equality and used racism to back up this refusal.
Capitalism had developed on the foundation of free proletarian labour in
Europe. But at the same time in its colonies it had latched onto slavery,
the most regressive form of exploitation, as a way of amplifying its profits
from wage labour. As we noted the exploitation of slave labour was gaining
ground in Latin America and especially in the United States where cotton
production expanded prodigiously in the first part of the nineteenth century
in the wake of the Industrial Revolution in England. Under the influence
of industrial capitalism the slave plantations increasingly resembled capital-
ist enterprises. Marx’s view was that under these conditions the surpluses
produced on the plantations were realized as profits once sold and absorbed
into the overall capitalist system of production, which of course was based
on accumulation based on wage labour and the surplus value it produced.
The conflict between free and slave labour led to Civil War in the United
States. Marx closely followed the course of the struggle championing the
side of the Union (Blackburn 2011). How passionately Marx espoused the
idea of free labour as both a moral and economic necessity may be seen in
his celebrated letter to Abraham Lincoln. In 1864 he wrote on behalf of the
First International congratulating the American people on choosing Lincoln
once again as their president. What was at stake for the working class was
explained as follows:
When an oligarchy of 300,000 slaveholders dared to inscribe, for the

first time in the annals of the world, ‘slavery’ on the banner of Armed
Revolt, when on the very spots where hardly a century ago the idea
of one great Democratic Republic had first sprung up, whence the
first Declaration of the Rights of Man was issued, and the first impulse
given to the European revolution of the eighteenth century . . . then
the working classes of Europe understood at once, even before the
fanatic partisanship of the upper classes for the Confederate gentry had
given its dismal warning, that the slaveholders’ rebellion was to sound
the tocsin for a general holy crusade of property against labor, and that
for the men of labor, with their hopes for the future, even their past
conquests were at stake in that tremendous conflict on the other side
of the Atlantic.
(Marx 1961: 233–4)
Free labour under capitalism it is important to reiterate marked a real advance

in the condition of the working class. As Marx understood the full political
emergence of free labour is crippled with the re-imposition of a regime of
personal dependence. Moreover, without free labour or labour power that
is exchanged as a commodity the further advance of capitalist accumulation
and the ultimate triumph of socialism or the liberation of the working class
is blocked.
The Industrial Revolution and the making of

the working class
The Revolution in France meanwhile inspired English workers to try to
advance their claims to freedom as workers. The entire period that coincided
with the Industrial Revolution was marked by riots, formation of illegal
political organizations and unions, strikes and political agitation inspired by
the French Revolution and traditions of popular and working class resistance
and social upheavals. Despite employer efforts to control them through the
master and servant laws workers won the fight to enter and leave employ-
ment as they chose, to unionize themselves and improve working conditions
through collective action. Passage of successive Factory Acts and in particular

the Ten Hours Act (1847) marked early victories of an increasingly class-
conscious proletariat (Thompson 1966: 336–99).
It was a fundamental characteristic of the Industrial Revolution that the
formal subsumption of labour characteristic of merchant capitalism came to
an end as capitalists assumed direct control of the productive process. In
response to worker resistance and indiscipline as well as expanding markets
and intensified competition capitalists built factories in which the labour of
workers could be more closely controlled and more efficient production
could help maintain and enhance profits. Capital entered directly into the
production process and transformed it greatly enlarging the forces of produc-
tion. The Election Reform Act (1832) and the Abolition of the Corn Laws
(1846) were major victories for the increasingly wealthy manufacturing class
directing these changes. As a result their social and political influence grew
but did not fully eclipse the power of landlords, bankers and merchants.
The Industrial Revolution began in England in the 1760s and ended with
the building of heavy industry and the railways in the 1840s. By then it
had spread to the European Continent and two decades later to the United
States. In the eighteenth century English agriculture had already become
thoroughly capitalist. It was able to produce profits to finance industry and
enough food to feed a growing population of workers. The remaining popu-
lation of subsistence farmers and rural spinners and weavers were driven into
the mines and factories. It was in these years then that the rural population
experienced its final dispossession from the land and its transformation into
an industrial proletariat.
Overseas markets were widened and the merchant marine expanded
and an infrastructure of roads, canals and warehouses created that allowed
the sale and distribution of manufactured and imported commodities. The
slave trade and plantation slavery provided enormous profits, part of which
were reinvested in industry. In the initial stages of industrialization it was the
cotton industry closely linked with plantation slavery that underwent mas-
sive expansion and mechanization. British supremacy in overseas markets
was consolidated by its naval victories during the French Revolution and
Napoleonic wars. The next phase of industrialization saw a railway boom
and the rise of the iron and steel industry (Heller 2011: 176–214).
As we have noted, the Industrial Revolution saw a massive expansion
of forces of production as capital entered into and transformed the produc-
tive process. In the form of increasing amounts of CO2 in the atmosphere
and soil depletion, industrialization fostered a widening metabolic rift
between the economic development of society and nature, which wid-
ened into a chasm over the next two centuries and confronts us now as
an ecological crisis. But of course at this stage the problem of industrial

pollution could be ignored because uncontaminated nature seemed limit-
less or remained to be conquered by the expansion of capitalism.
Revolutions
The half-century following the French Revolution and Napoleon was
marked by intense class struggle. On the one hand, the landlord class and the
absolutist monarchies attempted to restore as much as possible of the Ancien
Régime following the defeat of Napoleon (1815). Meanwhile, the Industrial
Revolution spread to Continental Europe, strengthening the bourgeois
and working classes who were inspired by the political goals of the French
Revolution. Their political aims included national sovereignty, legal equal-
ity and constitutional government at a minimum, political democracy and
socialism at the outside. The result was a three-fold wave of revolutions of
increasing depth and strength. In the 1820s, on the periphery of Europe,
Greece, Russia, Spain and Latin America experienced revolutions. Belgium,
France (again) and Poland followed in 1830. Finally in 1848 France and then
the rest of Western and Central Europe including Germany, Austria, Italy
and Hungary exploded. In less acute form unrest struck Spain, Denmark
and Romania while even Ireland, Greece and Britain were disturbed. These
revolutionary waves sought in the first instance to advance nationalist and
liberal demands. In the revolutions of 1848 democratic and republican ideas,
championed by the increasingly powerful middle and working class, came
to the fore. The upheavals of the spring of 1848 which roiled Western and
Central Europe involved liberal nobles, the professional classes, merchants,
petty bourgeoisie and workers (Hobsbawm 1969: 109–31).
In June 1848 Parisian workers, made desperate by their economic plight,
staged a second revolution, this time not against monarchy but against
bourgeois rule – a revolution in the revolution. Indeed, the working class
across Europe raised the flag of socialism for the first time (Hobsbawm 1969:
109–31, Price 1975, Siemann 1998). Already prior to 1848 reactive forms
of popular resistance such as food riots and machine-breaking had declined
and strikes emerged as the primary weapon of workers, their frequency and
intensity tied to political events (Tilly 1975: 252). Workers across Europe
meanwhile enunciated a version of socialism based on producer coopera-
tives (Moss 1976: 4). But now, in addition to strikes, revolution by workers
espousing socialism came to the fore. In the midst of the revolutions of 1848
Marx and Engels published The Communist Manifesto, introducing the princi-
ples of historical materialism to the working class. Although with little effect
in the short run the marriage of the theory of historical materialism to the
workers movement at this point proved historic in the long term (Althusser
1970: 65–126).
It was in this period that the overcoming of scarcity through growth
became the major liberal justification of capitalism. It was argued by propo-
nents of this idea of progress that capitalist growth would eventually trickle
down to the benefit of the mass of the population. From the perspective
of global humanity in the early twenty-first century this has proven to be
completely untrue. Furthermore, in Marx’s eyes the purpose of produc-
ing material surpluses was not to foster open-ended material growth but to
provide sufficiency for the mass of humanity on the basis of equality. With
such economic sufficiency as a foundation society could limit the amount
of labour humans needed to perform. Time would become available for
democratic discussion and management of the affairs of the community and
the pursuit of leisure activities, the latter according to individual choice.
There would be more rather than less individual self-expression under
socialism. The endless pursuit of profit and accumulation of material things
as practiced under capitalism was completely contrary to Marx’s vision of
a future human society that was rooted in the ideas of political and social
democracy as goals in themselves. The more so as capitalism, basing itself on
the unchecked expansion of the forces of production as Marx understood,
already represented a fundamental threat to the biological future of human
society and the planet.
Marx
Marx participated in the revolutions of 1848 through the Communist
Corresponding Society, which became the Communist League. He was
expelled from France and Belgium as a result of his leading role and was
forced to move to London. But he took a major part in the formation of the
First International in 1864. Marx advanced the idea of permanent revolu-
tion, which in its original form meant that the working class had to create
its own independent political parties and organizations in order to liberate
itself as a class. The political independence of the proletariat was the key
to the ultimate victory of socialism and liberation of the working class. He
took a keen interest in the emergence of the German Social Democratic
Party and other socialist parties that began to emerge in the concluding
years of his life. The creation of revolutionary working class parties inde-
pendent of the influence and control of the bourgeoisie remains the basis of
any socialist transition.
By 1871 his Capital was increasingly recognized as a profound analysis
and critique of the capitalist system and provided a powerful intellectual
weapon in the hands of the working class. Capital was not a conventional
work of history in the sense of an account of political or social history. It
did not develop a sustained, concrete and organized historical narrative and
eschewed, for the most part, developing a sense of agency. Instead, priority
was given to elaboration and close analysis of the economic rules governing
capitalism as it existed in the mid-nineteenth century.
But although not organized in a diachronic fashion there is a historical
narrative in Capital. Instead of focusing on the evolution of concrete events,
it concentrates on the original accumulation and the historical development
of the forces of production of capital. It is capital itself rather than human
beings that is the primary historical agent in this work.
In Marx’s view the operation of capital is intrinsically historical. Indeed,
the notion of historical progress invented by the nineteenth century is itself a
cultural by-product of the expanding accumulation of capital. Fundamental
to Marx’s conception of history is that of the progressive development of the
forces of production (Heller 2014).
It is important, however briefly, to mention some of Marx’s other histor-
ical and political economic ideas because his thought is not only important
to a historical understanding of capitalism but because some his ideas have
become central to political and intellectual life in the current capitalist crisis.
His analysis of the commodity form, value and surplus value, the law of
value, absolute and relative exploitation, accumulation, money and credit,
rent and capitalist economic crises are fundamental to an understanding of
the contemporary world crisis. Marx’s notion of the fetishism of commodi-
ties and the commodification of the world constitutes the foundation of
our understanding of postmodernist consumerist culture. Marxist analysis
has proved a powerful tool for analyzing capitalism, imperialism, the transi-
tion from one mode of production to another but also the realm of values,
ideas and meaning. Beginning with the critical insights of György Lukács,
Walter Benjamin and Antonio Gramsci and ending with Fredric Jameson
and Slavoj Žižek Marxism has proved an indispensable means of analyzing
capitalist culture.
We have already outlined the significance of value to capitalist accumula-
tion. But it is important to underscore the growing importance of the law
of value or the need for capitalist producers to keep up with the average of
socially necessary labour in the productive process in shaping the outcome
of competition in mature capitalism. Furthermore, the competition that the
rule of the law of value requires and the simultaneous failure of relative
exploitation to generate sufficient surplus value in the past and in today’s
economy is key to understanding the successive crises of capitalism and the
current gridlock of the system.
Marx believed that the proletariat must do all that it can to organize itself
and try to inhibit the operations of capitalism and indeed to overthrow it.
But in the third volume of Capital he makes it plain that he believes that
capitalism is likely to implode by virtue of its own contradictions. Capitalism
socializes itself through finance capital while at the same time its produc-
tive core is destabilized by the very same finance capital which increasingly
assumes a speculative form:
If the credit system appears as the principal lever of overproduction

and excessive speculation in commerce this is simply because the
reproduction process, which is elastic by nature, is now forced to its
most extreme limit: and this is because a great part of the social capital
is applied by those who are not its owners . . . This only goes to show
how the valorization of capital founded on the antithetical character
of capitalist production permits actual free development only up to a
certain point, which is constantly broken through by the credit sys-
tem. The credit system hence accelerates the material development of
the productive forces and the creation of the world market, which it
is the historical task of the capitalist mode of production to bring to a
certain level of production, as material foundation for the new form of
production. At the same time, credit accelerates the violent outbreak
of contradictions, crises, and with these the elements of dissolution of
the old mode of production.
(Marx 1981: 572)
The expansion of finance capital over-reaches the capacity of productive

capital to produce surplus value. The above passage, written in the 1860s, has
been echoed in most subsequent economic crises including the tremendous
development of financial capitalism under neoliberalism and its implo-
sion in the crisis of 2008. The expansion of financial capitalism up to 2008
had spurred a global boom in which the valuation of financial assets vastly
exceeded the possibilities for extracting real profits or paying off accumulated
debt. The reverberations of the crash of 2008 are still being felt.
Capitalism in its maturity

Revolution also marked the second half of the nineteenth century (1848–1914).
In Paris the Commune (1871) briefly established a workers’ republic based
on direct democracy in which workers for the first time in history con-
trolled the levers of political power. Marx, who initially disapproved of the
Commune as a political adventure without possibility of success, nonetheless
drew important lessons for the future of class struggle from its brief existence.
In particular Marx underlined the need to abolish the bourgeois state and
take the democratic and socialist government of the Commune as a model
for workers’ rule in the future (Hobsbawm 1975: 114). Meanwhile class
struggle globalized itself in the Taiping Rebellion (1851–64), as an immense
peasants’ revolt against landlordism shook southern China. The revolution
came about as a result of the destabilizing of China by the intrusion of an
increasingly powerful English capitalism. English textiles and opium from
India undermined traditional Chinese society. At the same time the egalitar-
ian ideology of the rebels based itself around a heretical version of Christian
belief in which the leader Hung Hsiu Chuan put himself forward as the sec-
ond son of God. Part of the leadership of the rebellion was won over to the
idea that China needed to modernize itself by adopting Western technology.
Marx saw the Taiping Rebellion as a stepping stone towards an eventual
Chinese socialist revolution (Hobsbawm 1975: 127–30).
But in the years following 1848 it was the nation-state, which had been
pioneered in England, France, Holland and Belgium, that became the politi-
cal model that was followed by the United States, Canada, Italy, Germany
and Japan (Hobsbawm 1975: 82–97). In the case of Canada, Germany, Italy
and Japan capitalism progressed under state sponsorship in a kind of passive
revolution or revolution from above. It should be underlined also that the
rapid advance of Japan towards capitalism was significant because it dem-
onstrated the obvious, that capitalism was not unique to white Europeans
but developed where social and political conditions favoured it (Hobsbawm
1975: 146–54).
The Industrial Revolution involved the substitution of the use of capi-
tal for labour. But the degree to which this happened depended on where
nations came to fit in the international division of labour. England and the
United States, where labour costs were relatively high, saw a rapid devel-
opment of a capital-intensive heavy industry. On the contrary, in France
and Japan, where labour costs were relatively lower and the global market
permitted it, a more labour-intensive industrialization prevailed (Austin and
Sugohara 2013).
The consolidation of the nation-states tended to foreclose revolution,
containing the working class and allowing the consolidation of capitalism
and the capitalist market under the bourgeoisie or under a partnership of
bourgeois and landlord rule. The process by which the state bureaucratically
organized and made homogenous its territories and fixed its frontiers came to
completion through the creation of the nineteenth-century nation-state. On
the one hand, there was a growing individuation of the citizens who were
liberated from the ties of personal subjection and extended family. On the
other hand, he or she bourgeois, peasant, worker was increasingly subject to

the physical and ideological control and discipline of the state whose histori-
cal myths and traditions were inculcated through public education and often
sensationalist newspapers.
Over the next thirty years the nation-state served as the basic frame-
work for the development of the capitalist market. The consolidation of the
nation-state was made possible by and allowed a major expansion of capital.
Following the steep depression of the late 1840s a boom developed in the
1850s. After a downturn in 1857 growth resumed even more spectacularly
over the next decades until the onset of a new depression in 1873. During
these years there was an enormous growth in exports. Between 1850 and
1870 world trade more than doubled, facilitated by the discovery of gold
in California, the expansion of bank credit and an overall environment in
favour of the free market. The United States and Germany, meanwhile,
achieved unification through wars, long and bloody in the one case and short
and politically decisive in the other case. Industrialization leaped ahead espe-
cially in these two states and spread throughout Western and Central Europe
(Hobsbawm 1975: 29–47).
Monopoly capitalism
Then came a major and prolonged depression beginning in 1873. It began as
a small financial panic in Central Europe that soon spread to the rest of the
world. Its fundamental cause was a fall in profits and investment (Roberts
2016: 31–44). The dynamic of capitalism meanwhile tended towards the
expansion of capital beyond the boundaries of the state into the global
market. National capitals entered into increasing rivalry with one another.
This contradiction, in significance only less important than the problems
of the metabolic environmental rift and economic depression, came to the
fore as capitalism entered into a new stage known as monopoly capitalism
and imperialism (1880–1945). This new phase of capitalism had the fol-
lowing characteristics: a) monopoly control over the heights of the national
economies by big banks and corporations that tended to fuse together;
b) partnership of monopoly corporations with the state that increasingly
acted in their interest; c) expanding export of finance capital seeking profit-
able return; d) scramble for colonies or protected zones for investment and
markets for manufactures, and e) intensified economic, political and military
rivalry between European states, the United States and Japan.
The capitalist countries, England, France, Holland, Belgium, Germany,
United States, Japan and even Austria-Hungary and Russia, became eco-
nomic as well as political rivals (Smith 2000: 10–16). At the same time
monopoly capitalism and imperialism allowed the recovery and maintenance

of profit levels in the years leading to World War I. Indeed, monopoly and
imperialism permitted capitalism to escape the economic implosion that had
been signalled by Marx. Total war and revolution took its place.
Monopoly capitalism and imperialism enabled the economic depression
of 1873–94 to be overcome and class struggle to be mitigated by allowing
the wages of the working class to rise and by conceding the legal right of
workers to unions, pensions and the vote. The late nineteenth century saw
an enormous increase in fixed investment in urban capital and the spread of
public education, the beginnings of the welfare state and the decline in the
birth rate among the working class as a result of contraception and family
planning. The vicious exploitation of women workers diminished. They had
played a dominant role in the earlier stages of the Industrial Revolution and
their role in the social reproduction of labour in the family was now stressed
(Bellamy-Foster and Clark 2018).
These concessions were won by ongoing class struggle by an increasingly
organized and aware working class but also because advanced capitalism
required a better educated and healthier work force. This marked the first
improvement in the condition of the mass of the population in the advanced
capitalist countries since 1500. It came about as a result of a dramatic expan-
sion of material output but also through the growing exploitation of the
peoples of the Global South (Bagchi 2000: 176).
The shift in the nature of class struggle in Western Europe can be illu-
minated by the thought of Antonio Gramsci. He distinguished between
revolutionary periods from non-revolutionary ones in the form of the con-
trast between a war of position and a war of movement in the ongoing class
struggle. Revolutionary insurrection it can be said was a feasible strategy in
the first part of the nineteenth century. The state apparatus was relatively
rudimentary and civil society, i.e. the market and bourgeois institutions,
were comparatively autonomous of the state. But after 1848 the internal and
international organizational relations of the state in Western Europe became
more complex, articulating themselves with civil society and exercising more
control over citizens. The possibilities of a revolution or a war of movement
diminished, at least in Western Europe.
Through a wide range of cultural and political institutions, ranging from
newspapers, schools and political parties, the bourgeoisie had established its dom-
ination as a class. Referring to a later period Louis Althusser referred to this kind
of hegemonic regime of the ruling class against which the isolated citizen was
defenseless as the ideological state apparatus (Althusser 1970: 4). Insurrectionary
violence was incapable of overcoming the more solid foundations of this
hegemonic order. Contrary to Althusser’s pessimism Gramsci suggested that the
proletariat collectively could overcome bourgeois hegemony by means of a war

of position, i.e. pursuing the class struggle by building an alternative hegemonic
culture based on the working class. This proletarian alternative order included
trade unions and political parties but also the full range of cultural and educa-
tional institutions. In this way Gramsci revealed the cultural dimensions of class
struggle as workers and bourgeoisie vied for hegemony (Thomas 2009: 126,
148–51). Gramsci’s hopes have been smashed by the triumph of neoliberalism.
On the other hand, provided they are understood within the context of world
revolution, they remain extremely suggestive as to how the international class
struggle needs to be pursued in the twenty-first century
Meanwhile the countries of the Global South became colonies or semi-
colonies of the West in the late nineteenth century. In states that were still
governed by the tributary or feudal mode – the Ottoman, Persian, Russian
and Chinese Empires – the incursion of capitalist imperialism prepared the
way for their collapse at the beginning of the twentieth century. The tribu-
tary mode disappeared and the hunting and gathering mode retreated to
the margins of the known world. Latin America, Africa, the Middle East
and Asia were reduced to full economic and political dependence. British
shipping and banking dominated Latin America while slowly and reluc-
tantly making way for the intrusion of the United States. The latter began its
economic and political penetration of Latin America in the Caribbean and
Central America in the 1890s. Following the military defeat of Spain (1898)
Cuba and Puerto Rico fell under American control. By 1903 Venezuela and
Panama had become American protectorates. Britain and France infiltrated
the moribund Ottoman Empire and reduced it to near colonial status. Britain
and Russia similarly divided control of Persia. All of the capitalist powers
cooperated in making China a semi-colony following the Boxer Rebellion
(1901). By then the African continent had been more or less fully colonized
by the major capitalist powers of Europe.
The Global South became completely tied to the development of the
capitalist West and its traditional industries and agriculture as well as culture
were undermined. While there was some improvement in the condition of
the working class in the advanced capitalist countries the growing popula-
tions of the rest of the world were plunged into deep poverty from which
most have still not escaped. The only real exception is China whose official
ideology is Marxism-Leninism.
Under imperialism the basic economic arrangement was the exchange
of Western manufactures for raw materials and tropical products from the
South. Traditional manufactures in the Global South were undermined
while the development of modern manufacturing was discouraged. In agri-
culture long-established communal forms of property were destroyed and
the rights of private property affirmed. Much land was seized by European
settler-farmers or by plantation owners. Indigenous labour was recruited
by forced labour decrees and by the imposition of poll and land taxes that
required payment in money. Millions of coolies and bonded labourers from
China and India were transported to the Americas to work on farms, planta-
tions and mines. The result was the destabilizing of the traditional societies
of the South and the further enrichment of the major capitalist countries.
The labour aristocracy or upper reaches of the working class in the Western
countries benefited from the profits generated by imperialism. The power
of Western imperialism and colonialism was reinforced by an ideology of
extreme nationalism and racism (Bagchi 2000: 195–248).
The best theoretical treatment of imperialism is Lenin’s Imperialism, the
Highest Stage of Capitalism. It is a work that is still relevant (Lenin 1948,
Marshall 2014). But Lenin was only part of a great debate on imperialism
among social democrats and liberals that included Karl Kautsky, Edward
Bernstein, John Hobson, Rosa Luxemburg and Nikolai Bukharin. As early
as 1900 Luxemburg declared that the invasion of China by the capitalist
powers represented ‘a bloody war of united capitalist Europe against Asia’
and nothing less than a ‘turning point’ in world history. She urged her
comrades to take anti-war agitation to the streets:
The Chinese war is the first event of the world political era in which
all developed states have become involved, and this first thrust of inter-
national reaction, of the Holy Alliance, must be answered immediately
by a protest of the united workers’ parties of Europe.
(Gaido and Day 2012: 19)
World Wars 1914–45

Capitalism’s explosion took the form of the outbreak of a horrendously
bloody and destructive war in August 1914. It marked the beginning of an
ongoing civil war between capitalist nations that marked the first half of the
twentieth century. In 1914 bourgeois governments under the influence of
military elites brought on World War I. The fundamental inspiration behind
this atavistic conflict was a blind effort to preserve the old order of European
society in the face of an increasingly powerful working class. World War I
proved the overture to a second and even more destructive war (1939–45),
which was the outcome of both economic depression and ongoing imperialist
conflict (Hobsbawm 1994: 21–143).
The pressure of World War I and the growing class struggle led to a
successful socialist revolution in the weakest capitalist state Russia (1917)
and a near workers’ revolution in Germany, the most developed capitalist

country in Europe (1918–23). Russia and its immense territories henceforth
developed a distorted form of socialist state that nonetheless successfully
modernized itself accompanied by the mass mobilization of labour and ongo-
ing political repression under the command of Joseph Stalin (1924–53). On
the other hand, as a result of counter-revolutionary pressure from Britain,
France, United States and Germany, the Soviet Union’s development was
constrained within the international state system and as a consequence devel-
oped its own internal contradictions (Lewin 2005).
In the wake of the upheavals and destruction of World War I the restoration
of stability in the capitalist world after the war proved impossible. Germany
had to cope with the onerous economic terms imposed by the Versailles treaty
and was roiled by class conflict, extreme inflation and currency deflation.
Elsewhere there was a short-term boom amid runaway inflation but the boom
soon petered out and prices fell. The rest of the world led by the Anglophone
powers attempted to restore stability to their economies and their money
deflating through containing the demands of organized labour and getting
back on the gold standard. By 1924 calm seemed to have been restored and
growth resumed. But farm prices were depressed and unemployment was at
unprecedentedly high levels and there was an enormous build-up of unregu-
lated financial capital seeking investment amid indications of over-capacity
and looming crisis. In October 1929 a financial crash centred in the United
States quickly spread to the rest of the world. Financial crisis led immediately
to economic collapse. By 1933 at least twenty percent and up to forty-four
percent of workers were unemployed in the main capitalist countries. World
trade was down by sixty percent. Tariff barriers went up everywhere and
compounded the underlying economic problems. Over-capacity, under-
consumption, under-regulation and persistent barriers to international trade
were responsible for the collapse. Some insisted that a crisis of profits was the
main factor (Hobsbawm 1994: 85–94, Roberts 2016: 53–4).
The Depression (1929–39) led to major political crises in the capitalist
states (Hobsbawm 1994: 95–108). In states where liberalism and political
democracy were weak, such as Japan, Germany and Southern and Eastern
Europe, fascist dictatorships supported by landlords, the Church, the
bourgeoisie and peasants took power (Paxton 2007). In fascism counter-
revolutionary class struggle found a substantial mass base. Based around
nationalist popular mobilization, xenophobia and extra-parliamentary and
extra-legal rule, these regimes preserved the existing property relations
and capitalism while rallying the lesser bourgeoisie and much of the rest
of the population en masse to anti-Communism and preparation for war.
In a more positive vein the liberal democracies initiated social security
systems and a range of other government programmes that became a prelude

to the welfare capitalism of the post-war period. While government
spending could not bring an end to the Depression the institution of social
security programmes and labour legislation, especially in the United States
and France, represented significant improvements. Women achieved full
political and legal if not economic rights in these states. Welfare benefits
were also extended in fascist Germany and Italy.
Bitter class struggles between Communists and fascists broke out in
France that saw the triumph of the left in a broad coalition brought together
in the election of the so-called Popular Front government (1936) dominated
by the socialists and supported by the increasingly influential Communist
Party. Electoral victory set off a massive wave of strikes and factory occupa-
tions and made possible important social and economic gains by the working
class including the forty-hour week, paid holidays and the right to organize
(Danos and Gibelin 1986). Meanwhile in Spain rivalry between fascists and
Communists culminated in civil war (1936–9). The fascist side was openly
supported by the direct military intervention of Italy and Germany while the
Soviet Union more discretely supported the Popular Front government of
the Republic (Fraser 2011).
World War II (1939–45)

The build-up of imperialist tensions exploded into World War II, the result
of which was the collapse of all of the capitalist states except the United
States, which emerged as the hegemon of the capitalist world. At the same
time the war led to the victory of the Soviet Union and of a new revolution-
ary government in China (1949) removing most of Eurasia from capitalist
control (Weiner 2002, Blanco 1971). Rising nationalisms and liberation
struggles in the Global South after 1945 allowed most under-developed
countries to achieve political if not economic independence from the West
(Prashad 2007). In the aftermath of World War II the United States – the
last hope of capitalism – assumed leadership of the capitalist world under the
mantle of liberalism and multilateralism. The rivals of the United States for
world dominance – England, Germany and Japan – were crippled while the
United States emerged as the single economic and military capitalist power.
There was, to be sure, the opposing economic and political system focused
on the Soviet Union and a few years later Communist China, but the social-
ist camp based on Eurasia posed no immediate threat to American control
over the rest of the world.
Monopoly capitalism and global imperialism were reinforced by
United States dominance. It stabilized the capitalist world by organizing
global political and military resistance to Communism, liberalizing world

trade and overseeing sharp improvements in productivity, the establish-
ment of the regulated welfare state and the spread of mass consumerism
based on debt (1945–80). The intensified exploitation of under-developed
countries was another feature of the period. In the United States perma-
nent war mobilization and militarism became an ideological and economic
alternative to socialism.
On this basis there was a massive increase in the forces of production and
improvement in the standard of living in the advanced capitalist states in a
wide trans-oceanic arc running from West Germany to Japan. Consciously
using its naval and air superiority and overwhelming economic and financial
strength the United States after 1945 created a new trans-oceanic framework
for capitalism. It was based on its direct political control of defeated Germany
and Japan and indirect control of other states through the primacy of the dol-
lar and new institutions like the UN, IMF, GATT, World Bank, the NATO
and SEATO military alliances and the European Common Market.
Post-45 class compromise

With the United States acting as political and financial hegemon, liberal
trade and investment policies were pursued which above all favoured the
American economy and U.S. multinational corporations. On the other
hand, within this framework states were encouraged to retain control over
their national economies by restricting the international movement of capi-
tal and by actively intervening in their economies. Class compromise was
negotiated at the heart of the economic and political system. Demands for
higher wages and higher living standards were met by investment in fixed
capital and improvements in productivity enhancing profits while produc-
ing a cornucopia of low cost consumer goods (Vidal 2015: 184). Over the
next thirty years a new system of industrial organization known as Fordism
came to dominate the advanced capitalist economies. Based on a partner-
ship between capital and its junior partners – government and organized
labour – it promoted economic growth based on well-paying jobs in capital
intensive industries. On the basis of cooperation between capital and labour,
economic growth and profits reached unprecedented levels and some of the
gains were made available to organized labour and the rest of the population.
These gains translated into an unprecedented wave of consumerism cen-
tred on the automobile and suburbanization. This new stage of capitalism
was attractive enough to buy the loyalty of the majority of Americans and
Europeans and to limit the appeal of socialism. Based on their newly obtained
political independence the nations of the Global South were able to improve
the lot of their populations to a degree. Although there were rumblings of

discontent in the under-developed world based on radical nationalist and
Communist movements access to the cheap resources and labour of the less-
developed states helped the West to sustain its economic expansion (Heller
2006a: 75–110).
Global class struggle (1959–80)

An outburst of worldwide class struggle and anti-imperialism in the
under-developed Global South highlighted by the Cuban and Vietnamese
revolutions and a growing squeeze on profits undermined the economic
and political stability of the capitalist world by the 1970s. The first signs of
economic trouble appeared in the form of runaway inflation and slowing
productivity at the beginning of that decade. This was compounded by an
OPEC oil embargo which followed the Yom Kippur War in 1973. Profit
margins thinned and in 1974–5 the global economy experienced a world-
wide recession unprecedented in severity since the 1930s. The restoration
of profit became the underlying preoccupation of capitalists and Western
governments from this point forward (Heller 2006a: 225–38).
The fate of the working class differed between the United States and
Europe. In the former state consumerism, Cold War anti-Communism, the
racial divide and the bureaucratization of the unions politically disarmed the
majority of the American working class. Meanwhile in England, France,
Belgium and Italy militant unionism remained intact. In Europe a revo-
lutionary situation developed in France and Italy based on working class
combativeness. In England labour pugnaciousness brought the economy to
its knees (Heller 2006a: 180–3, 238).
The same period in the U.S. did see radical protest on the part not of
white workers but of students, blacks, Chicanos, aboriginals, women and
gays. Largely isolated from the mainstream of public opinion, black and
student revolt shook the confidence of the political and economic elite. A
powerful resistance developed within the United States against the war in
Vietnam. But white workers in the United States stayed aloof from these
protests or actively opposed them as unpatriotic. Workers challenged capital
only through demands for wage increases and indiscipline at work. Corrupt
union leadership, anti-Communist propaganda, racism and consumer pros-
perity help to explain this political inertia. The collapse of working class
prosperity since then has changed the situation fundamentally in the direc-
tion of growing working class consciousness across the board. Meanwhile
there emerged an increasingly serious questioning of the gendered division
of labour and the traditional family and a decline in the birth rate that put
into doubt traditional sex and gender roles. Birth rates declined and the
work force was maintained only by continuing immigration into Europe
and North America from the Global South (Heller 2006a: 175–80, 205–9).
Neoliberalism
However, the ideological and political split between the Soviet Union and
China starting in the 1960s broke the unity of the anti-imperialist camp
and indeed put into question the whole conception of socialist develop-
ment based on centralized and planned national economies. Internationally
the United States was able to organize a counter-offensive (1980–2008) that
suppressed anti-imperialist movements in the Global South, led to the over-
throw of socialism in the Soviet Union and allowed the capitalist class to
launch a major attack on the working class. The objective of this offen-
sive was to restore profit margins and capitalist control over society in the
advanced capitalist countries and in the Global South. Under so-called neo-
liberalism or global monopoly capitalism, under whose rule we still live, state
control over markets was undermined by deregulation, restrictions on the
freer movement of goods as well as capital were lifted and a massive attack on
the wages and social benefits of workers launched. A new culture of austerity
was imposed on the working class and the less well-off while the upper class
reconsolidated its rule.
Note
1 This was Marx’s view almost certainly. Still it must be noted that in Capital (Marx,
I: 345) Marx says that the slave system in the U.S. South was producing surplus value
in asserting that Marx seems to contradict his repeated assertion that surplus
value is only produced by wage labour.
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4
NEOLIBERALISM (1980–2018)
A mood of political and economic exhaustion made it possible for

conservatives to elect Ronald Reagan in the United States, Margaret Thatcher
in the Great Britain and Brian Mulroney in Canada at the beginning of
the 1980s. Germany elected the conservative Helmut Kohl as Chancellor in
1982. France, which had elected a socialist government with the help of the
French Communist Party, was by 1983 forced into line by virtue of its ties to
the rest of the EU and especially to the more competitive German economy.
Even social-democratic Sweden, Denmark and Norway were required to
water down their comprehensive welfare systems faced with the growing
lack of competitiveness of their economies.
The policy adopted by these regimes and virtually all other capitalist states
backed by the support of increasingly organized and well-endowed capital-
ist lobbies is known as neoliberalism. It was designed to address both the
economic malaise and social and political upheaval that marked the previ-
ous decades. The problem being the need to restore the rate of profit and
to restore political and social discipline, neoliberalism became the remedy.
As such it was at bottom a counter-attack by the ruling class against workers
everywhere including the peoples of the Global South. Indeed, its first major
success came in Chile in the wake of the overthrow of the socialist govern-
ment of Salvador Allende in 1973. At that time neoliberalism was called
structural adjustment. From Chile structural adjustment was imposed on the
heavily indebted countries of Latin America and Africa. They were forced to
knuckle under and their aspirations to independence and equitable growth
80 Neoliberalism (1980–2018)
were struck down. The economics of austerity were then put to work in
the advanced capitalist states under the rubric of neoliberalism (Heller 2006:
260–4, 296–8).
Neoliberalism in theory
A massive assault on the standard of living of workers hit Europe and the
United States. Meanwhile progressive steps to free capital from the constraints
of state regulation were instituted (Albo 2002). As the 1980s continued it
became clear that the bureaucratic socialism of Eastern Europe was deeply
flawed and entering its own crisis and could provide no counter-example
to neoliberalism. As Margaret Thatcher of Great Britain proclaimed, there
really did seem to be no alternative.
As an economic theory neoliberalism claimed that the economy would
resolve its own problems if it were freed from ‘distortions’ to the market,
whether these came from state intervention or interference with the ‘flexibil-
ity’ of the labour market by trade unions. Free trade would prevent national
monopolies distorting prices and unemployment would settle at the ‘natural
rate’ necessary to prevent wages eating into profits. At the same time the
market would force discipline on the working population.
Originally centred on the University of Chicago and the London Institute
of Economic Affairs neoliberalism became the dominant paradigm in eco-
nomics marginalizing Keynesian, Marxist and other ideas. Neoliberalism,
despite its anti-state rhetoric, did not in practice believe that the implemen-
tation of its programme required the lifting of government constraints –
far from it. The free market ideology is for public consumption. Rather it is
a question of active political and ideological intervention in which the state
plays a key role in shaping freer markets while repressing dissent. The goal
of neoliberals is not to destroy the state but to control and redefine it in the
service of the market. The neoliberal state has actively sought to undermine
democracy so as to block the imposition of any limits on the market (Streeck
2016: 151, 155). In some cases the neoliberal programme even required the
imposition of military dictatorship in order to impose such policies.
The illogic of neoliberalism is reflected in the fact that it needs the heavy
hand of the state to create a freer market. But despite this intrusion of the
state the market is brazenly represented in neoliberal discourse as an autono-
mous machine or device that is the most powerful imaginable processer of
information. The idea that the market might selectively favour the creation
of some information while suppressing other information is not acknowl-
edged. Indeed, for purposes of propaganda it is agreed that the market is
represented as neutral and indispensable.
Neoliberalism (1980–2018) 81
Government attempts to guarantee social entitlements outside the market

such as health care, education and pensions are regarded as crippling the effi-
ciency of the market and as placing limitations on an individual’s freedom of
choice. The question of popular legitimacy is addressed by viewing the state
as much as possible as itself part of the market, assimilating political institu-
tions to the model of private institutions and regarding citizens as consumers.
Freedom is not the positing of a human or political and social ideal but rather
the protection of private property, unconstrained markets and production of
autonomous self-governing individuals equipped with a neoclassical sense of
rationality and motives of deep self-interest striving to improve their lot by
engaging in market exchange. Freedom without capitalism is unthinkable.
Those who cannot cope under such conditions should be given charity or
put into prisons or other institutions (Mirowski 2009).
Neoliberalism’s economic objectives are centred on control of infla-
tion and the provision of supply-side incentives, reduction of regulations
protecting labour or other constraints on the market, privatization and com-
mercialization of public assets and the eventual commodification of all goods
and services. Wages should be kept below gains in productivity, social ser-
vices should be cut back, taxation should favour the entrepreneurial classes
and an export-led growth policy pursued. Free markets for capital both
nationally and internationally are essential. Corporations can do no wrong
and are the rock bed of wealth creation. If there are anomalies the market
corrects itself. Under neoliberalism inequality is thought of not as a problem
but as an incentive and one which promotes progress. Under neoliberalism
the state is not done away with, it is taken over as far as possible by the market.
Once again the basic goal is to restore the profitability of capital.
Globalization of finance
As these ideas were implemented globally from the 1980s onwards trans-
national corporations overwhelmingly dominated the world economy. The
international organization of this new phase of capitalism has been described
as follows by John Bellamy-Foster:
The phase of global monopoly-finance capital, tied to the globalization

of production and the systematization of imperial rent, has generated a
financial oligarchy and a return to dynastic wealth, mostly in the core
nations, confronting an increasingly generalized (but also highly seg-
mented) working class worldwide. The leading section of the capitalist
class in the core countries now consists of what could be called global
rentiers, dependent on the growth of global monopoly-finance capital,
and its increasing concentration and centralization. The reproduction

of this new imperialist system, as (Samir) Amin explains in Capitalism
in the Age of Globalization, rests on the perpetuation of five monopolies:
(1) technological monopoly; (2) financial control of worldwide markets;
(3) monopolistic access to the planet’s natural resources; (4) media
and communication monopolies; and (5) monopolies over weapons
of mass destruction (Amin 2014: 4–5). Behind all of this lie the giant
monopolistic firms themselves, with the revenue of the top 500 global
private firms currently equal to about 30 percent of world revenue,
funneled primarily through the centers of the capitalist system and the
core financial markets.
(Bellamy-Foster 2015)
On the Forbes list of the one hundred top world companies (2014) the
United States dominated. Of the top one hundred, thirty-four were
American; China had less than half that number. On the other hand, five
of the ten top ten companies were Chinese and four of these were banks
reflecting the Chinese advance in these standings (Chen 2014). The United
States has retained its dominance but China is advancing steadily based on its
growing links to global capitalism and its commitment to an international-
ized version of Lenin’s state-directed New Economic Policy.
Global so-called trans-national corporations were highly dependent on
their home country whether they be American, Chinese, German, French or
otherwise. The financial crisis of 2008 only reinforced this dependence. Under
neoliberalism, furthermore, finance became the dominant branch of policy
placing central banks and monetary policy at the core of state and private
economic activity (Lapavitsas and Mendieta-Muñoz 2016). The expansion
of credit, the centrality of finance in the structure and policy of private cor-
porations, the expanded role of derivatives and other secondary markets and
the dependence of households on credit became the most salient features of
the world economy. The predominant role of finance rather than productive
investment in enhancing profitability was the fundamental feature of the neo-
liberal economy. Notable was the fact that large non-financial trans-national
corporations became world-scale financial groups with auxiliary industrial
activities. Financial and shareholder value rather than productive activity was
now the primary goal of the operations of hitherto industrial corporations.
This reorientation reflected the fact that profits were difficult to earn in the
productive sectors of the economy. In other words the extraction of surplus
value remained a core problem throughout the neoliberal decades.
Financialization played an important role in the integration of the
economy globally and in the extension of the influence of the American dollar
(Bellamy-Foster 2007). The freer movement of financial capital in particular

helped tie West European capitalism more closely to the United States
and facilitated the emergence of a truly global capitalism. Fewer than ten
companies based in the largest states came to control the bulk of global
economic activity.
Looking at things from the perspective of the aggregation of personal
wealth eleven million individuals worldwide owned more than one mil-
lion dollars in financial assets as of 2011. Three-fourths of these individuals
lived in the United States, Western Europe and Japan in that order. Their
overall holdings amount to $42 trillion (Kroll and Dolan 2011). It is these
individuals-rentiers, corporate directors, managers, lawyers, stockbrokers,
bankers, big merchants and landowners who constitute the ruling classes in
the major capitalist countries.
On the other hand, a massive transfer of direct and indirect capital
investment from high wage economies in the Global North to low wage
economies in the South occurred. Once again enhancing profitability was
the fundamental motivation (Smith, J. 2016: 313).
The global ruling class and the state

Under neoliberalism the financial and economic power of the ruling elites
has increased. Based on the more open movement of trade and financial cap-
ital the question is have they become politically and socially integrated as an
international ruling class (Colatrella 2011)? Ongoing study of this question is
necessary but one must remind oneself that the capitalist class, like all historic
ruling classes, has always depended on the state to maintain itself. There is
little sign that a sufficiently strong international political and institutional
framework has come into being that could sustain such a trans-national class
while dispensing with territorial states. Analysis of existing financial markets
and signs of growing conflicts between the United States, Germany, Russia
and China rooted in economic and geopolitical rivalry casts doubt on this
possibility (Norfield 2016, Sawers 2016).
Samir Amin meanwhile has suggested that rather than a single trans-
national capitalist class there are globalized monopoly capitalists that
continue to depend on the existing major capitalist states as a base of their
operations (Amin 2015). The sovereign state it would seem is an essential
characteristic of capitalism and indeed one of its contradictions. Not only
are capitalists still tied to and dependent on their national governments there
continue to be frictions, both economic and political, between these states.
In fact there are signs that these conflicts are multiplying. Moreover it is
unclear whether capitalism could function under the umbrella of a single
universal state. Such a state, which would no longer have any competitors,
might constrain markets too much.
The role of the state fundamentally changes under neoliberalism. Its pri-
mary goal becomes to facilitate the market and in particular the extraction
of profits from financialization. Increasing public debt becomes an impor-
tant means of enhancing profits while undermining the provision of public
services. The collection of tax revenue more or less kept pace with pub-
lic expenditure until the 1980s but declined thereafter under pressure from
wealthy private interests. Unable to finance budgets through taxation states
resorted to borrowing from private financial institutions whose profits were
enhanced as a result. The onset of the crisis of 2008 greatly increased shortfalls
in tax receipts. Low interest rates made possible by a return to sound money
and low inflation policies facilitated further borrowing. This spurred the further
expansion of the financial sector worldwide (Streeck 2016: 114–21).
Born as an economic and political theory neoliberalism gradually devel-
oped into a veritable new culture promoted by government, universities
and the media. Widely accepted by the upper classes including establish-
ment economists it became a key instrument through which the upper class
re-established control over society, culture and politics facilitating a massive
transfer of wealth from the bottom and middle levels of society to its upper
echelons (Harvey 2005). Neoliberalism purported to free markets and indi-
viduals by reducing state intervention. Yet state intervention has always been
a feature of capitalism. The market itself from first to last has been based on
state support. Its regulations created the so-called free market through the
imposition of a definite legal and administrative framework based on the
territorial state.
Today the state’s intrusion under neoliberal auspices manifests itself in
its deliberate choice to reduce spending on social needs and concomitantly
increase spending on the military, police and carceral system. Indeed, the neo-
liberal era has seen an enormous increase in the power of the carceral state
designed to control populations that deviate from the standards of rationally
autonomous individuals by dint of their being unemployed and, worse, crimi-
nal (Wacquant 2009). It includes the more than eight million people in the
United States who are under one or another sort of state control, jail, prison,
probation, parole, community sanction, drug courts or immigration detention.
The training and equipment of police forces increasingly resemble those
of the regular military (Radley 2013). Since 1997 more than five billion
dollars in military equipment have been transferred from the Pentagon to
local American police forces. Coupled with the intrusion of the police into
neighbourhoods based on community policing these policies are meant to
intimidate and control the population. At the same time, as the revelations of
Edward Snowden and Julian Assange have made clear, a massive build-up of
the surveillance of Americans as well as non-Americans has occurred. Parallel
expansions of the prison, police and surveillance systems of Britain, Canada,
France, Germany and Italy have taken place. The mechanisms to institute an
authoritarian state are in place globally. At the same time they represent an
increasing impediment to the free flow of goods and people.
Remarkable has been the narrowing of public discourse that has occurred
since the 1980s. This is not unexpected as government and the media are
largely controlled by wealthy corporations. Indeed, the concentration of
ownership in the media has grown stronger over the neoliberal years. As a
result of corporate media propaganda permanent austerity is an idea that has
for now been ‘naturalized’ in many sectors of public opinion despite the fact
that it is directly harmful to most people. The information diffused by social
media somewhat countervails the shibboleths of neoliberalism and austerity.
But most of the public still lacks access to alternative sources of information
that might challenge the manufactured truth of established media. More and
more outright disinformation is being pervaded (Mullen 2009). Alternative
viewpoints are available only to savvy youth who are still a minority. The
majority of the population remain unhappy and sceptical but fall back into
an angry populism.
In the meantime, universities are undergoing a restructuring which like-
wise is designed to limit critical views of the neoliberal order. Universities
have for long served the needs of business through their training and research
programmes and the purveyance of liberal and conservative ideologies. On
the other hand, during the golden years of the 1950s and 1960s they were
perceived as serving broader public needs. Today the decline in public sec-
tor funding has forced universities to convert themselves into quasi-private
institutions operating like profit-seeking corporations.
Research results are regarded as intellectual property that is confidential
or patented. The critical function of disciplines in the humanities and social
sciences has been undercut by declining enrollments and lack of funding.
Most notably the teaching of heterodox forms of economics has been virtu-
ally suppressed. To a greater or lesser degree this describes the situation of
academic institutions in the English-speaking countries as well as in France
(Heller 2016: 171–205).
Neoliberalism as an ideology, it turns out, is both powerful and singularly
intolerant of dissent. The consequences of this narrowing and privatization
of learning and research for the future of scientific and technological innova-
tion, to say nothing of critical thought, is entirely negative. Both the state’s
and universities’ ability to provide the political and intellectual means of
reform and correction of the economic and social system appear crippled.
The new regime: winners and losers

Under neoliberal auspices economic growth and profits recovered during
the 1980s. An IT boom marked the last two decades of the twentieth century
helping to compress time and revolutionize communications. But profits
recovered to a level well below that of the preceding golden age and the
IT boom ended in bust (Roberts 2012: 126–8). The downward trajectory
of growth and productivity has continued since the 1970s until today in
the major capitalist countries. More seriously weaker average growth and
the decline of the state’s economic role has been accompanied by rapidly
increasing inequality and declining levels of public welfare.
Under the aegis of neoliberalism the fate of the Third World seriously
worsened. Imposed on undeveloped countries in the 1970s and 1980s as
a result of dictatorial rule and crushing debt, structural adjustment policies
led to a massive decline in living standards. The coming of the new mil-
lennium did bring some temporary improvement in the economies of the
under-developed countries. As a result of higher prices for primary products
and the lowering of tariffs and relatively low wages a considerable amount
of direct foreign investment poured into these countries to the tune of
$1.3 trillion. The economies of these countries withstood the crisis of 2008
better than those of the First World at least for a time. But the subsequent
end of a Chinese commodity boom brought this brief upward tick to an end
(Gallagher and Porzecanski 2009).
Meanwhile there has been an enormous increase in the size of the work-
ing class in the Global South. This only contributed to the decline in real
wages in the First World amid a concomitant decline in membership in
unions and left-wing political parties. Overall the period of neoliberalism has
seen a massive shift of political and economic power from labour to capital.
As of 2015 three-quarters of the world’s workers are temporary, casual or
self-employed and this sort of employment is likely to become more preva-
lent says the International Labour Organisation. The ILO, a UN agency
that specializes in work, analyzed employment patterns in 180 countries and
found that the ‘standard’ model of permanent full-time employment was ‘less
and less dominant’ in rich, developed economies. In developing economies,
salaried employment was still growing as a share of the total workforce but
that historical trend appeared to be slowing (O’Connor 2015).
Instability and inequality

The neoliberal period has been marked by much more economic instability
than the preceding golden age. (Anderson 2000). Beginning with the steep
recession of 1974–5 the period has seen downturns at the beginning of every
succeeding decade (1980–1, 1990–1, 2001–3). While most of these crises up

to 2008 can be interpreted as part of the normal business cycle, the housing
and loan crisis of 1986, the dramatic crash of the stock market in 1987, the
Mexican bankruptcy of 1994, the Asian and subsequent Russian banking
crisis (1997–8) suggest something else. Indeed, these disruptions were part
of a deeper pattern in which, all told, there were ninety financial panics
that afflicted mainly the under-developed economies during the 1990s. They
reflect the rapid movement of financial capital from one place to another
and a build-up of financial bubbles based on the deregulation of global and
national economies in a context of the growing underlying weakness of the
world economy and decline in the rate of profit (Roberts 2017). To be sure,
there was some economic growth during these years on a world scale but
on the basis of a decline in real incomes for most of the population and an
enormous expansion of both consumer and public debt. The existence of
vast amounts of cheap labour in the under-developed world allowed for an
enhancement of the global rate of profit. But this recovery of profitability
clearly had its limits when set against the still greater expansion of credit.
From 1980 an enormous transfer of wealth from the bottom and middle
to the top of society took place and inequality worldwide greatly increased.
The division of labour in production became truly global and there was a
gigantic migration of industrial production to the Global South at the expense
of jobs in the advanced capitalist countries (Smith, J. 2016: 101–32). Despite
these measures, which saw some further increase in productivity, profit and
growth rates during this period failed to recover to those of the immediate
post-war decades. Such profits as there have been have largely come from
an increase in absolute exploitation worldwide in the form of lower wages
and an increase in the turnover times of capital based on improved com-
munications and transport. Wages stagnated in the First World as well as in
the Global South. According to Samir Amin, the Global North continues
to collect a global rent off the countries of the Global South as it had in the
past. This despite the fact that the productivity of the export-orientated sec-
tors of the economy located there are up to the level of those of the North.
(Amin 2014a). Deregulation under neoliberalism allowed the growth of debt
and the development of speculative bubbles amid growing instability (Amin
2015). More long term the cumulative build-up of CO2 that started in the
Industrial Revolution began to have serious effects with growing tempera-
ture extremes, storms, droughts, floods and rising tidal waters (Wolff 2013).
The crisis of 2008

The lag in profitability and the expansion of credit culminated in the crisis
of 2008. The ballooning of financial assets in the absence of matching profit
levels generated in the productive sectors of the economy precipitated the

crisis. Worldwide there had been growing signs of an asset bubble in hous-
ing, which finally burst in 2008. It began in the U.S. housing market and
quickly spread to the rest of the world. Taking advantage of the loose regu-
lation of the financial industry a huge expansion of home ownership took
place in the United States during the opening years of the new millennium
based on easy access to loans and the overvaluation of sub-prime mortgages
that were bundled up and sold worldwide to other financial institutions.
Securities based on housing collapsed leading to the insolvency of many
banks and investment houses including the key investment bank Lehman
Brothers, which went bankrupt. Many of these banks and insurance compa-
nies did not have the financial reserves to cover losses. With the plunge of
prices many tottered on the edge of bankruptcy while a massive contraction
of credit took place. As we have seen it was only the injection of public
money that salvaged the system. But the resultant credit crunch and eco-
nomic downturn has continued ever since with recovery remaining at best
uneven and unstable (Kotz 2015: 128–215).
In this depression the internal contradictions of the system expressed
themselves in stagnant profits, lack of productive investment, falling pro-
ductivity and demand, inability to transcend the state form, environmental
problems and growing popular alienation from capitalism and its economic
and political leaders.
Since gains in relative exploitation were central to the success of indus-
trial capitalism lack of improvement in productivity appears as a major
contradiction. But the gains in relative exploitation marked by automa-
tion, such as they are, represent an additional contradiction, as the constant
expulsion of labour from the production process is creating growing dif-
ficulty in generating surplus value while also tending to suppress consumer
demand.
Capitalism in crisis
Capitalism has proved a highly resilient system. Based on social and politi-
cal inequality it has proved capable of developing forces of production on
a gigantic scale. Faced with repeated economic depressions it has been able
to overcome these blockages by means of institutional liberal democracy,
economic restructuring, the welfare state and consumerism, but also through
wars, fascism and imperialism and neoliberal austerity.
The legitimacy of capitalism since the nineteenth century has been
premised on its capacity to deliver material abundance in the form of con-
sumerism and public welfare that embraced the working class. It provided
these gains in the advanced capitalist countries between 1870 and 1970. At
the same time there was little or no improvement in the standard of living of
workers and peasants in the Global South. Since the 1970s the living stand-
ards of the mass of the population worldwide have deteriorated. It seems
clear that the promise of material prosperity under capitalism for the mass
of the world population is fading. Indeed, growing economic insecurity
and the deterioration of the conditions of life is destabilizing the existing
political and social system worldwide. Moreover the number of barriers
that capitalism faces in its effort to renew itself is daunting. We are left with
a system based on inequality and which is increasingly dysfunctional and
whose future seems increasingly in doubt.
Imperialist rivalry
Inter-imperialist rivalries have intensified since 2008 with the United States
trying to hold onto its global lead while challenged by Russia, Germany and
especially China. China, half socialist and half capitalist, poses the most obvi-
ous threat to American power. But a resurgent and now capitalist Russia
is also a major rival. But the growing split between the United States and
Germany, which dominates the EU, is also noteworthy (Smith, J. 2016).
On the other hand, the United States’ economic lead is still substantial.
A key measure of state power is GDP. As things stand now the GDP of
the United States is almost twice as large as that of China’s, while Japan’s
and Germany’s GDP is less than half that of China. France and Britain trail
behind. Another important indicator of power is direct foreign investment,
with the United States holding almost $7 trillion worth more than three
times that held by Britain, France and Germany. The U.S. lead is affirmed
by the fact that almost ninety percent of international currency exchanges
are still in U.S. dollars. U.S. economic primacy is reaffirmed by its mili-
tary spending, which dwarfs that of all other nations combined and the fact
that in 2015 its military operations involved deployments of one kind or
another in no less than 138 countries. China has emerged as a serious rival to
American power but there can be no doubt that the United States is still the
leading power in the world (Norfield 2016: 6).
Its two main rivals, China and Russia, have inaugurated a gigantic infra-
structure project – the so-called Silk Road – that threatens to shift the
axis of the global economy from the United States and its allies to Eurasia
(Nolan 2016: 8–10). In the wake of the 2008 crisis the creation of BRICS,
which includes Russia, China, India, Brazil and South Africa (or almost half
of the world’s population), in principle represents an attempt to find a path
to a new and more equitable international framework outside of the control
of the hegemonic West. Russia and China, to be sure, are committed to

the idea of finding an alternative international economic order to protect
their independence.
But an analysis of the political economies of the other BRICS – South
Africa, India and Brazil – leads to doubt that they can break free of Western
control or that they even aspire to do so. Indeed, they may in fact constitute
forms of sub-imperialism which serve to bring the regions in which they pre-
dominate more fully into the orbit of the United States and its allies. Popular
resistance in South Africa and Brazil meanwhile make it unlikely that these
states can serve as stable platforms of future capital accumulation. Meanwhile
the United States has veered towards economic protectionism, denounc-
ing the North American Free Trade Agreement and turning its back on
the proposed North American–EU Trade agreement and the Trans-Pacific
Partnership. It has moved toward bilateralism, trying to use its political and
military muscle on weaker states in attempts to impose one-sided trade
agreements. It persists in trying to push aggressively against Russia in Eastern
Europe, to encircle China and impose hegemony on the Middle East, Africa
and Latin America. Growing economic and military rivalry fostered by the
United States heightens the possibility of war.
Ruling class strategies

Meanwhile the upper class worldwide has responded to the crisis not by
demanding fiscal measures to foster demand and public sector investment
but by ensuring the preservation of the private banking system, doubling
down on speculation and imposing austerity on the mass of the popula-
tion. Faced with a loss of political and economic legitimacy and growing
social unrest the American and West European elites in particular have
responded politically by increasing surveillance, police repression and wars
abroad. Neoliberalism is being combined with political authoritarianism in
an uneasy amalgam. The mass of the population meanwhile is becoming
more and more class conscious but so far has been unable to organize itself
politically in an effective manner.
Iceland nationalized its banks and prosecuted its bankers as a result of the
2008 financial failure. In the case of the United States, Great Britain and
Continental Europe the state intervened by handing over billions of dollars
of public money to shore up the private financial system letting the bankers
off the hook. The rationale for doing so was that without a viable private
financial system capitalism itself would disappear (Streeck 2016: 85–7).
That is perfectly true. Highly concentrated financial capital essentially
controls all other aspects of the world economy. Major international
companies themselves are involved in credit operations and the credit

made available in financial centres such as London and Frankfurt have
played a major part in financing the expansion of worldwide manufactur-
ing. The credit made available and the rate of interest charged on loans
helps to determine the profitability of enterprises. The private financial
system is necessary to capitalism’s functioning providing advantages for
the states which are its headquarters such as the United States, Britain and
Germany. The discipline finance can impose on particular capitalists can,
in theory, increase productivity by way of increased exploitation, more
intense use of each unit of capital and the reallocation of capital to sectors
that are more promising. Financial capital imposes a kind of private sector
planning and coordination of the economy (Panitch and Gindin 2014).
But in the neoliberal period flows of capital from the financial sector have
not been primarily directed towards productive investment as the basis for
gaining profits. Too little profit is generated by such investment. Instead
capital flows have been used primarily to allow an unprecedented worldwide
orgy of speculation and rent seeking. That being so the survival of the finan-
cial sector following the crash of 2008 was essential to preserve the power
and wealth of the globalized ruling class as well as what was left of the life
savings and pensions of millions of ordinary people. Accordingly states like
the U.S., Britain, Belgium and France immediately intervened making avail-
able trillions of dollars of public money to shore up these private financial
institutions (Kotz 2015, 151, 155).
Several things were notable about this intervention. In the first place it
demonstrated the close tie between political leaders and the financial oligarchy.
No doubt a certain amount of re-regulation and the imposition of stress
tests took place in the wake of the financial collapse in the major capitalist
countries although they in no way seriously limited the operation of major
banks. Fines and even prison terms were imposed on some of the small fry
found responsible for the debacle. Some of the leading banks charged with
setting interest rates internationally were lightly punished for collusion. But
the big shots of the financial world, whose speculative activity brought on
the crisis, escaped punishment and their behaviour has not been changed
in a fundamental way by the so-called international Basle III reforms and
other regulatory measures imposed at the state level (Cohan 2015). Indeed, a
meltdown like that of 2008 could easily recur especially given that financial
speculation remains the one really profitable area of economic activity in the
wake of the crash of 2008. On the other hand, what is striking is that the
political elites in the United States, Great Britain or France completely failed
to consider another possibility, namely, that the highly concentrated banking
system could have been nationalized not as a temporary but as a permanent
measure. The fact that this is a real alternative reflects how close we are to
a sudden end of capitalism and the dawn of socialism. Such a spectre, we
contend, haunts the present declining system as a real not imagined ghost.
On the other hand, that nationalization was not considered reflects the
fundamental reality that the state as presently constituted, including the dem-
ocratically elected legislators, acts fundamentally in the interest of the ruling
class rather than in the interests of its own constituents. States at present are
the fundamental bulwark of the class power of the capitalist class and espe-
cially its dominant financial sector. The collusion between the financial elite,
state bureaucrats and key cabinet officials defines the essence of politics in all
capitalist countries. The fate of the state and its partnership with the financial
sector of capital therefore remains the key to the ability of the capitalist sys-
tem to carry on or to otherwise flounder. The continuation of the capitalist
system is intimately tied to the system of more or less sovereign territorial
states and vice versa.
Stagnation
The depth of the downturn in 2008 worldwide was striking, its impact most
apparent in North America and Europe. The amount of credit available to
small businesses and consumers dramatically fell and has remained meagre as
the state has done little to make credit available to the public. Some public
money was allocated towards the needy and the unemployed and towards
investment in the public sector, but what was notable was how niggardly
the response of governments was to the needs of their own citizens. True,
in the United States there has been a serious legislative impasse between
the Democratic and Republican Party. But in other states where no such
problem exists, such as Canada, Australia and the Great Britain, the response
to public needs was also minimal. This despite the fact that such spending,
if it could not overcome the underlying economic crisis, could have helped
revive economic activity, which since 2008 has remained lacklustre. In Italy,
for example, twenty-five percent of manufacturing capacity was shut down
in the aftermath of the crisis and has not been restored. Forty percent of
young people are unemployed in that state. The situation is similar in Spain
where GDP fell by nine percent between 2009 and 2013 and unemploy-
ment stands at over twenty percent despite some recovery of output. There
have been of late some feeble signs of recovery in Europe and especially in
the United States. In the latter case there GDP recovered to the level of
2008 in 2013.
In the wake of the crash interest rates fell to levels not seen in the whole
history of capitalism. The persistence of low interest rates is a measure of the
lacklustre character of the real economy. It is true that interest rates have
recently risen – the first Fed hikes since 2006. Nonetheless the fall in inter-
est rates to historic lows and their slow and partial recovery shows how long
and how deep has been the impact of the global financial crash of 2007–8,
the subsequent Great Recession of 2008–9 and the ensuing and seemingly
interminable trend of below average economic growth. Low interest rates
have spurred stock market speculation.
Meanwhile the ostensible reason for austerity was the need to address the
growing problem of debt, which is of course quite serious in countries like
the United States, France and Britain. On the other hand, the extraordinary
scale of public debt is mainly the result of low growth, the decline of tax
revenue based on concessions to the rich, enormous military spending and
above all expenditure required to save the banking system. Spending on
public welfare might in fact lessen the debt problem rather than increase it
by increasing employment and tax revenues. Compared to military spending
and funds to sustain the banks, public expenditure is a pittance. Insistence
on austerity by the state in the face of enormous social needs and ongoing
stagnation reveals the fundamental class nature of state policy aimed at disci-
plining the poor and working class and consolidating the power and wealth
of the ruling class and especially investors and bankers.
Many intelligent members of the latter group realize that present policies
hold no prospect of reviving the global capitalist economy to its pre-2008
levels. On the other hand, massive government spending and investment as
an alternative to the market scares them even more. The idea that jobs could
be created and that goods and services could be provided through the public
sector and that the market is dispensable could catch on among the populace.
Hence the so far successful campaigns against deficit spending and the claim
that big government rather than big banking is the problem. All the more so
as since 2008 a still deeper financialization of the economy has occurred ena-
bling the wealthy to aggregate more of the wealth of society to themselves.
It is obvious that state backing made it possible for the private financial sys-
tem to survive and through low interest rates has permitted yet more gains
from speculative finance. It is extremely unlikely that the financial and other
markets can survive in future without state guarantees. Indeed, it is possible
that the future collapse which haunts the economy could willy-nilly force
nationalization of the financial sector.
Given this possibility governments and business are frantically demand-
ing the bogus idea of a return to the free market. That the populace might
repudiate the private sector and turn to the public sector and a decom-
modified provision of health care, education, jobs, energy, housing and
social welfare deeply concerns them. Public opinion polls suggest that
disillusionment with not only capitalism but also liberal democratic politics
is slowly spreading among the global population including that of the United
States. The Brexit option in Great Britain, which constitutes a rejection of
mainstream Conservative and Labour politics, exemplifies this rejection of
politics as usual. The spectacular gains of the Labour Party under Jeremy
Corbyn in the parliamentary elections of June 2017 only confirm this turn
away from neoliberalism.
The Italian referendum (December 2016) rejecting neoliberal-friendly
constitutional changes likewise signals public repudiation of neoliberal aus-
terity in a country with a youth unemployment rate of forty percent. In
similar fashion the election of Donald Trump in the United States reflects
a populist rejection of the political status quo and a flirtation with fascism.
Paradoxically the new Trump administration, reflecting the irrationality of
the capitalist class, is actually trying to dismantle the public sector wholesale.
The dependence of the financial and other markets on government is
demonstrated by the policy of quantitative easing in force in the United
States and Europe between 2008–15. In this scheme the central bank buys
up private bonds driving up their price but lowering their yield. This has the
effect of forcing investment capital towards stocks and hopefully productive
investment and thereby engendering increased economic activity. The best
that can be said for this essentially government programme is that it has mar-
ginally increased economic activity while staving off an outright collapse. It
has above all supported the stock market whose consistently high values have
allowed investors to make striking gains by virtually guaranteeing no collapse
in stock valuations. Bond prices have also benefited as some investors hedge
their bets on stocks. Recently the U.S. has ended this policy while the EU,
which is experiencing some recovery, is also showing signs of moving away
from it. The American move away from quantitative easing is designed to
test whether the economy is strong enough to sustain itself. Despite some
indications of recovery signs of weakness continue to appear. Sales of new
homes has recently fallen to levels not seen since 2008. The U.S. economy
grew by an anemic 1.6 percent in 2016. Particularly disturbing is the fact that
although quantitative easing has the effect of increasing the money supply
the velocity of money keeps declining. Its decline actually predates the crisis
of 2008 and has continued to the present day. Most economists regard the
velocity of money as a key indicator of the health of an economy. American
employment statistics indicate a fall in unemployment yet the quality of jobs
continues to erode. Likewise, noteworthy is the decline in world trade.
Since 2009 the average annual growth of the U.S. economy has been
at 2.2 percent compared to an average annual growth of 3.2 percent in the
nineties. Elsewhere growth among advanced capitalist countries has been
considerably lower. Pointing to the fact that the present dismal economy
nonetheless has seen some renewed growth and in that sense cannot tech-
nically be considered in depression some mainstream economists refuse to
accept that since 2008 we have been in a depression like that of the 1930s.
Yet per capita growth in living standards in the last decade based on those
who actually have jobs has been lower than in the Depression of the 1930s
(Elliott 2017).
Two influential Marxist economists who do think the economy is in
depression are Michael Roberts and Fred Moseley (Roberts 2016: 218,
Moseley 2013). According to them, the crisis was caused by excessive debt and
insufficient profitability on productive investment or the over-accumulation
of capital. Until this debt is worked off, with a certain amount of fixed capital
destroyed and still greater exploitation of labour, i.e. restructuring, there will
be no resolution of the crisis according to them.
The restoration of the rate of return on capital is key to private invest-
ment and the resumption of robust capitalist accumulation. Whatever gains
have occurred in productive investment have been made by raising the rate
of exploitation on workers while the necessary destruction of capital has not
occurred. Whether in the longer term the rate of profit on invested capital
can be sustained or the necessary destruction of capital values will take place
remains to be seen. The rate of return is also affected by the amount of
outstanding debt. It is difficult to see how the present level of debt can be
liquidated since it is rising rather than declining. Much of this new debt has
accumulated in the corporate sector and weighs down on profit margins. As
to consumer debt the investor class is more than ever dependent on interest
on this debt as well as on ongoing speculation for its income.
Low interest rates and cheap money that is freely available to the corporate
sector while it is carefully rationed to others enables it to speculate while the
state is sustaining values in the stock market. Moreover, productive invest-
ment that might spur growth and gains in productivity and that could help
to mitigate the significance of this burden shows few signs of reviving. The
possibility of productive investment is undercut by the pervasive short-term
attitude of demanding shareholder value or higher dividends and market
valuations. On the other hand, such is the level of uncertainty, economic and
otherwise, that many capitalists prefer to horde cash in the trillions of dollars
rather than invest in real economic activity. In other words, there is today an
economic but also a political impasse or crisis of confidence that makes the
crisis more than an economic one. A variation of this view is to stress that
the fundamental cause of low profits is the constant expulsion of labour from
the productive process due to gains in productivity and the reduction in its
price. Given the build-up of fixed capital it becomes increasingly difficult to
extract a sufficient profitable return on invested capital given that it is the

surplus value from labour that is the ultimate source of profit.
General crisis
At base we believe that capitalism has hit a brick wall. Marx’s contention
noted earlier that capitalism at a certain point implodes of itself appears on
the point of being realized. Just as in the late medieval period fundamental
contradictions have developed in the mode of production that cannot be
overcome within the existing mode of production. According to Guy Bois,
the French peasantry during the High Middle Ages undermined rent or the
feudal levy by organizing themselves at the village level against demands for
more rent. Landlords at first reacted by inventing new forms of exploitative
rent or forcing technological improvements (windmills, watermills, etc.).
But at a certain point, as over-exploitation reached its limits and economic
crisis deepened, they could only sustain themselves by pillage and warfare at
the expense of the peasantry. The peasantry responded by class warfare from
below. The nobles could only survive by looking to the state for protec-
tion (Bois 2000: 143–76). Likewise in 1789 the development of the political
capacity of the peasantry and bourgeoisie and over-exploitation precipitated
the final crisis of the nobility and the feudal mode in France. This time the
state of the Ancien Régime could not save the system. It was class conflict
that drove matters to crisis in both cases. But both crises took the form of a
general crisis of the system.
The same dynamic seems to be in play today. This sense of overall crisis
is manifest in the growing ecological contradictions of the system but also
in its political dysfunction and its increasing illegitimacy in the eyes of the
populace. But this sense of a historic turning point is above all evident in
the multi-dimensional nature of crisis. In this work we have stressed the
recurrent problem of the falling rate of profit as a precipitant of the current
crisis as well as those of depressions of 1873–94 and 1929–39. We continue
to recognize its importance. But Radhika Desai has recently pointed out
that Marx himself understood the nature of such great crises as the product
of a multiplicity of factors including under-consumption. Among factors
financial and political conjunctures also can precipitate crisis (Desai 2010). A
decline in the rate of profit may be the common factor but the precipitation
of a crisis may be due to a variety of factors and the decline in the rate of
profit may itself be a variable dependent on a variety of other factors. Rather
than fixing on a key independent variable such as the rate of profit Marx
tends to explain things through a process of dialectics and progressive circu-
larity. In the case of economic crisis decline in the rate of profit is central but
this can be the result of a failure of demand or financial crisis. Certainly in

Marx’s work crises are represented not merely as economic calamities but as
across-the-board and systemic. That is what is occurring today.
That Donald Trump gained the American presidency may be taken as
symptomatic of a general crisis finding political expression in the figure of a
buffoon-like head of state. It may be that the ascension of Trump to the
American presidency can, in the short term, spur investment and growth.
Economic nationalism, labour bashing, further deregulation, tax cuts favouring
the rich and a possible massive infrastructure and arms procurement programme
might boost the economy in the United States and perhaps by extension else-
where in the short run. Perhaps new signs of life in the Chinese economy can
also provide stimulus to global capitalism. On the other hand, it is difficult to
see how such measures will stabilize the financial sector, restore global eco-
nomic balance or diminish social and economic inequality in the longer term.
Breakdown
We may be at a turning point in the advanced capitalist countries where
the upper class is transforming itself from having had some involvement
in productive activity into being essentially a rentier class. Perhaps we are
witnessing a breakdown of the system as a whole as some Marxists believe.
Japan has never been able to break out of the downturn caused by the prick-
ing of its real estate bubble in 1986–9. Fear and unprecedentedly high levels
of debt have chilled both investment and consumption globally. All efforts
to restart global growth have produced lacklustre results and vital signs such
as the level of international trade and the creation of new businesses in the
advanced capitalist economies is well below pre-2008 levels. The growth
of protectionist sentiment in the United States and signs of crack-up in the
European Union seem ominous. But above all youth unemployment and
under-employment worldwide has reached staggering levels.
True this puts downward pressure on wages and potentially enhances
profits. But the conundrum is that in the aggregate jobs and decent wages
are necessary to sustain demand. And where is the bottom in the downward
spiral of wages? Especially given the fact that decently paying jobs are disap-
pearing because of technological innovation and the continuing export of
employment to places where wages are at subsistence levels. Under such
circumstances it is hard to see how the economy can correct itself and
real recovery occur. Such conditions rather presage ongoing stagnation or
worse and increased social upheaval. In any event if capitalism can some-
how renew itself it will do so with nothing to offer the working class and
the population as a whole. In reaction to this situation there is widespread
political disillusionment and unrest developing all over the world. The real
question is can this largely inchoate unrest become organized and politi-
cized enough to fundamentally challenge the existing capitalist order? Such
a challenge can only come by mounting a successful attack on the capitalist
state and its ideological apparatus. Even without such a mobilization we
have entered a period of permanent popular unrest and increasing massive
state repression all over the world.
Some mainline economists talk about a permanent low growth economy.
There is the school of thought among them that insists that there is no crisis
of capitalism just a return to lower levels of economic growth that character-
ized the world prior to 1945. Such lower growth entails lowered expectations
on the part of most of the population, which might in itself pose problems
for the continued viability of the system. The capitalist economy post-1945
promised jobs, growth and consumer affluence as a counter to socialism and
was able to produce growth rates that averaged above three percent. Such a
growth rate would seem necessary to produce an adequate return on invest-
ment. Without such a return the incentive to invest in productive activity
withers. It is hard then to see how a capitalist system hitherto premised eco-
nomically and ideologically on strong growth can continue to exist under
conditions of stagnation without undergoing transformative change, taking
the system back towards a much more austere and hierarchical social order
dominated by the very wealthy and unable to offer decent jobs and income
for the great majority. Such low growth without redistribution is more likely
a recipe for social unrest and or the imposition of a much more authoritarian
political regime that has no popular legitimacy.
The difficulties in the way of perpetuating the current system are com-
pounded by mounting ecological problems in the form of increasing
temperatures, the poisoning of the water, drought and desiccation, and
exhaustion of the land that arise directly out of the drive for profits at the
expense of the environment. Green capitalism seems like an oxymoron.
When it comes to climate change, the problem is not just the type of energy
being used but what is done with it. The basic problem is the fact that our
economic system demands ever-increasing levels of extraction, production
and consumption.
Alienation
There is today growing popular alienation from the capitalist system and the
current political order. Hostility to the latter is based on the fact that even
left-wing parties, which form part of the liberal democratic order, seem to be
unwilling or able to do much to better the lot of ordinary citizens or, indeed,
halt the erosion of living standards. On the contrary, there is a growing

scepticism towards professional politicians and established political parties. In
the neoliberal period, where money has become the measure of all things,
politicians and politics have been deeply corrupted. In Italy the entire politi-
cal establishment is held in contempt and a mood of bitter cynicism prevails
in the electorate. The fury of public reaction to the socialist government’s
drive to end the thirty-five-hour week in France is particularly striking. The
sell-out by the socialists to the neoliberal agenda is historic reflecting the
complete venality of that political formation.
But the political classes’ disrespect for democracy is further demonstrated
by the longer term history of the European Union. Although endowed with
elections and a parliament that sits in Strasbourg the reality of the European
Union is that power lies with its enormous bureaucracy headquartered in
Brussels and with the European Central Bank in Frankfurt. The consistently
low turnouts for European-wide elections reflects the fact that the public
realizes that the outcome of these votes matters little to the economists and
technocrats in Brussels who control the Union and who act in the interest
of financialized capital embodied in the European Central Bank. Perhaps
the most glaring instance of elite contempt for democracy came in the mid-
1990s when referendums were allowed in Holland, Ireland and France to
ratify the Union. When the referendums went against the Union they were
simply ignored and further referendums cancelled. Promises that the EU
would remain committed to a social Europe have been repudiated.
Indeed, social democratic and liberal democratic parties and politicians
in Europe and North America today characteristically accept the politics
of neoliberal austerity that require that accommodation of private business
remains the highest priority – the election of Jeremy Corbyn as leader of
the British Labour Party being a notable exception. It is highly likely that
Corbyn will be charged with overseeing the exit of Britain from the EU,
a step that followed the success of the Brexit Referendum. The electorate’s
abstention or support for radical right-wing or separatist parties reflects this
sense of popular alienation from left-centrist politics. Likewise the rise of
Islamic fundamentalist movements and parties throughout the Middle East
represents a parallel development. The failures of social-democratic govern-
ments in Argentina and Brazil are also notable, riddled as they were with
corruption that circumscribed any effort to attack structural inequalities that
lay at the heart of politics in these states. The campaigns and promises of
what may be called pseudo-revolutionary parties of the left in Greece and
Spain have only deepened the mood of political disenchantment.
Perhaps the attraction for extreme left politics will grow as the effects of
unending austerity sink in more deeply. For now we cannot discount the
consequences of decades of pro-capitalist and anti-Communist propaganda

and fetishized consumerism on popular attitudes toward radical left poli-
tics. On the other hand, the extent of street-level protest is notable. The
Occupy Movement in North America and Britain, the Spanish Indignados
Movement and the Arab Spring (2011) that touched large parts of North
America, Europe and the Middle East were high points. The objectives
of the movements varied but clearly they were directed against economic,
racial and political injustice. The Arab Spring was a strongly political
movement directed against authoritarian governments in the Middle East
fuelled by economic and social deprivation. Unorganized as Occupy was
and limited to occupying only public space rather than private property, it
represented no fundamental threat to the capitalist order but, on the other
hand, it bespeaks a deep sense of public alienation particularly on the part of
downwardly mobile middle class young people. Likewise Black Lives Matter
in the United States has attracted both black and white support.
Almost half of Americans now self-identify as lower or working class,
something unheard of in earlier decades when most Americans considered
themselves middle class. A majority of the young reject capitalism and call
themselves socialists. The ruling class in the United States has responded with
stepped up surveillance and militarization of the police.
The security state, including the militarized police and sophisticated
electronic surveillance, that has emerged in all advanced capitalist countries
pre-emptively suppresses possible dissent. Out of the 494 cases related to
terrorism the U.S. has tried since 9/11, for example, the plurality of convic-
tions are not for thwarted plots but for ‘material support’ charges, a broad
category expanded further by the 2001 Patriot Act that permits prosecutors
to pursue charges with tenuous connections to a terrorist act or group. In an
alarming number of cases the plots were fostered by government-paid agent
provocateurs. In other words, using the excuse of the threat of terrorism the
state is stepping up pre-emptive control over its citizens by the systematic use
of provocateurs. At the same time, Western states, led by the United States,
lend credence to the threat by pursuing the war against terror in the Middle
East. In fact, a principle motive behind these endless foreign wars is to con-
tain social instability at home. Likewise the state seeks to keep the public in
line by invoking the Russian, Chinese and North Korean threat.
Decline
In our view global capitalism has entered into decline marked by economic
stagnation, growing social polarization and the breakdown of the liberal
democratic order. As such we find ourselves in an interregnum when the old
social and political order is clearly in decay while a new one has not come
into view. In Gramsci’s sense it is a period of great insecurity in which the
established chains of cause and effect no longer apply and in which unex-
pected, unwelcome and frightening events may intrude at any time (Streeck
2017). Abysmal underlying conflicts express themselves in seemingly aimless
violence and endless wars in the Middle East, Ukraine and Africa while there
is stepped up state repression and a sense of dread and uncertainty that grips
the population in Europe and North America as a process of slow-motion
disintegration plays itself out. Not to be discounted is the deliberate spread
of disinformation by government and private media designed to bewilder the
population, making it difficult to understand the source of their problems.
Or perhaps another way of looking at things is that terror, confusion and
deprivation that have long afflicted Latin America and Africa have reached
into the heart of the developed world.
It is hard to take seriously the view that the rules of capitalism allow
capitalism to bounce back on itself. In this conception if you exploit workers
enough and deleverage debt sufficiently eventually there will be a recovery
based on a recovery of profit levels. It excludes the possibility that insufficient
demand might be more important to the onset and perpetuation of capitalist
crisis than this view allows. Moreover, such a view, which harps on profit
levels, ignores the fact that such a capitalism has nothing to offer the mass of
the population. In any event the running down of the physical and mental
well-being of the population and institutional infrastructure makes the fur-
ther reproduction of the system unlikely. At some point I would argue that
politics supercedes the rules of capitalist economics. The delegitimization of
the system on account of social polarization and the degradation of the lives
of citizens as well as the deterioration of the public infrastructure and envi-
ronment are undermining the political and ideological parameters within
which capital can operate.
Looking back we can see that over the four decades that preceded the
collapse that financial instability became a characteristic feature of the sys-
tem. The build-up of financial bubbles became important to the extraction
of windfall speculative profits, which became the alternative to productive
investment. Given the fact that there has since been only cosmetic reform of
this deregulated financial system it would seem highly likely that a repeat of a
serious financial crisis is possible in the absence of government regulation and
support or perhaps even with it. Left to itself it seems clear that the present
neoliberal economy does not have the capacity to cure itself. There are too
many problems standing in the way of a renewal of healthy rates of growth
and profit margins. Instability, growing inequality and social polarization,
lack of legitimacy and investor confidence and environmental problems
make recovery unlikely. Indeed, one might ask whether an economy that
bases itself on as much growth as possible and sees failure as the inability to
achieve growth makes sense anymore?
It is true that there are places in the world where more growth is needed.
Moreover, some growth is necessary to renew the existing stock of capi-
tal. On the other hand, given that gross world product is approximately
$115 trillion and that per capita gross world product is over $16 thousand
it would seem that the real problem is not more growth but redistribution.
Such a redistribution should not be done on the basis of exchange values but
rather should entail the multiplication of use values made available through
the public sector. Making such use values available throughout society would
itself provide more than enough employment for the millions of people who
cannot find gainful employment in the capitalist market place.
Without transformation capitalism is likely to degenerate into a pred-
atory financial system with limited growth potential and stagnant wages.
Striking though is the political illegitimacy of the current system which is in
part already a reflection of this kind of economy. People and especially the
young understand that the system is fundamentally undemocratic and works
in favour of the rich and at the expense of the rest. Whether in the member
states of the EU, the United States, the Middle East or Africa alienation
from the existing political order is profound. Faced with mounting unrest
it is conceivable that the ruling class could resort to desperate measures.
Unable to resolve the crisis within the existing political and economic frame-
work it could attempt to up the rate of profit by dramatically raising the rate
of exploitation of workers while doing away with representative democ-
racy altogether. As the election of Trump in the United States suggests, we
could be moving toward a new authoritarian system of rule based on mili-
tarism, ultra-patriotism and fundamentalist religion. The discredit of social
democracy and rise of right-wing parties is a portent. But legitimizing such
a dystopian system might prove difficult in the long run. Moreover, to what
degree this more authoritarian regime squares with the deregulatory goals of
neoliberalism remains problematic.
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5
TOWARDS SOCIALISM
Revolution
Capitalism is at an impasse. Socialist revolution is off the agenda. The failures
of socialisms of the twentieth century rule it out. Moreover, we know from
history that revolution always end badly. The revolutionary agency of the
people is irrational and a kind of madness (Losurdo 2015). These are the shib-
boleths of neoliberalism. On the contrary, we contend that neoliberalism
and the social democratic compromise with capitalism have been discredited.
Revolution is the only rational exit from the current capitalist dead end and
therefore seems increasingly the probable outcome. The failures of the past
in making revolution and building socialism that were real must be seen as so
many experiments in a long transition.
Let us begin our discussion of the transition to socialism with the work-
ing class, the spearhead of revolution and socialism. Historically Marxists
considered the industrial proletariat the vanguard of the working class and
the foundation of revolutionary politics and the construction of socialism.
Today it is commonly said that the political potential of the industrial prole-
tariat has declined if not disappeared. The economic and political weakening
of the proletariat is commonly associated with the de-industrialization of
traditional industrial regions in the United States, Great Britain, France and
Holland. On the other hand, Kim Moody, recognized as the most important
Marxist analyst of American labour, denies that this is the case in the United
States and the other advanced capitalist countries. According to him, the
industrial working class today is numerically and proportionately larger than
is generally understood. At the same it remains more concentrated than any
106 Towards socialism
other sector of the wage-earning class. The companies that employ industrial
workers own more assets and employ more workers than ever before. The
proportion of real Gross Domestic Product (GDP) produced by this declin-
ing number of industrial workers has actually grown due to the rise in the
productivity of labour (Moody 2014: 11).
It is the industrial working class that produces the entire infrastructure on
which both accumulation and daily life rest: roads, ports, airports, railways,
factories, office buildings, streets, public transit, housing, etc. Wholesale and
retail trade, finances, overseas trade and many services in the sphere of cir-
culation grow on this productive foundation. Rather than dwindling away,
concentrated economic power is changing its shape, as the big firms create
all manner of networks, alliances, short- and long-term financial and tech-
nology deals with one another, with governments at all levels, and with
legions of generally (although not invariably) smaller firms who act as their
suppliers and subcontractors on an international level. Hence, even though
still largely employed by independent capitals or even by the state, workers
in such industries must be regarded as part of today’s contemporary industrial
working class. The growing inter-dependency of workers across national
and international economies is what is most notable. Furthermore the role
of the industrial proletariat and its political potential has increased because
of the recent expansion of industrial capitalism in the Global South (Moody
2014: 9–10).
Paid workers now constitute half of the world’s labour forces. Moreover,
new elements are being added to the working class. Since 1945 women
have entered the proletariat on a vast scale. In many countries they consti-
tute a near majority of the work force. Their wages in most places remain
well below that of men. The emergence of knowledge capitalism in the late
twentieth century in the form of IT and biotech industries as well as in and
around universities has created a new layer of highly educated workers who
occupy strategic economic positions and are increasingly identifying with the
working class as a whole. In other words, the increasing inter-dependence
of workers inside and outside of industry and the addition of new intellec-
tual workers to the proletariat means that the revolutionary potential of the
working class in the United States and the other advanced capitalist countries
has never been greater. It is true that most of these workers are not fully
conscious of themselves as a working class and certainly not as revolution-
aries. On the other hand, given the increasing levels of exploitation being
experienced it is not unreasonable to think that they can become a socialist
and revolutionary vanguard. The working class is actually a sleeping giant.
It is also important to point out that the most important revolutions of
the twentieth century – Russia, China, Cuba, Vietnam – were made in
Towards socialism 107
countries in which the organized proletariat was small if well organized and
strategically located. The political weakness of the regimes in these states
and high levels of political consciousness and organization spelled the dif-
ference. Moreover if the industrial proletariat is still considered important
to the revolutionary project it is worth reiterating that it has in fact signifi-
cantly grown in numbers in the Global South. The potential for revolution
in different countries is rising as workers stagger under the weight of neo-
liberalism. Such an upheaval in one country is likely to have a knock-on
elsewhere, as, for example, the catalytic effects of unrest in Tunisia on other
Middle Eastern states during the Arab Spring (2011), but perhaps with a
deeper and more global impact.
Capitalism is deeply entrenched and historically has shown great resil-
ience. Its overthrow cannot be envisioned simply as a class-based revolution.
To get to the point of a revolutionary overthrow of capitalism requires a
veritable cultural and political movement on the order of the Enlightenment,
which qualitatively changed the value and cultural system. Among other
things a growing understanding of the hollowness of liberal democracy is
an essential requisite for the demand for a more popular and direct form of
democracy to arise.
Given the litany of problems capitalism faces it is likely that the system
is approaching its limits signified by a significant rise in class conscious-
ness. Moreover, seeing how entrenched the present capitalist order is when
revolutionary change arrives it is likely that it will be a qualitative altera-
tion entailing deep-seated social and personal transformation. The French
Revolution was the fruit of a centuries-long transition from feudalism to
capitalism. The Revolution of 1789 was not an accidental event but an earth-
quake based on the build-up of a huge mass of contradictions. Revolutionary
change in our times is likely to take a similar form because it has been so
long delayed.
Moreover, whereas pessimism about the future grips the bourgeoisie
contemporary Marxism views the future as a continuation of humanity’s
progress since the Enlightenment. That optimism bases itself on the hope for
the triumph of economic and political democracy, continued belief in reason
and science, the multiplication of use values as against exchange values, and
an end to ecologically destructive growth.
In this concluding chapter we will try to demonstrate that given the
development of the forces of production in late capitalism the feasibility of
a socialist reordering of society is greater than ever. On the other hand, we
will not pretend to know when capitalism will end. Nor we will dogmati-
cally assert how best to organize to overthrow capitalism and to organize a
socialist alternative. We only offer some suggestions. Moreover, we are not
prepared to assert what exactly a future socialism or socialisms might look

like. Revolution is likely to take different paths because social and politi-
cal conditions in the nations of the world are so different. What we bring
forward instead is a series of insights and possibilities and nothing more. In
other words we reject dogmatism and sectarianism in principle as unworthy
of a historical outlook.
Revolutionary possibilities
A global revolution would likely take the form in the first instance of an
assault on the coercive apparatus in an existing state or states including not
merely an attack on repressive bodies like the police, army, prisons and
courts, but on the ideological system including the media, educational bodies
and organized religion. Such a revolution could begin almost anywhere and,
like the upheavals of the 1960s or the recent Arab Spring, occur as a chain
reaction and develop unevenly. On the other hand, it can only succeed if it
embraces one or more of the major capitalist states or in other words takes
control of the commanding heights of the world economy. Only then can
it become a world revolution. Moreover we think that it is in the United
States, which is a giant world state and the focal point of capitalism, that such
a revolution is most probable.
The crisis this time

In the wake of the failure of Soviet Communism and demise of the great
Marxist-Leninist parties in the West it seems absurd to discuss world revolu-
tion and Lenin’s ideas on revolution in particular. But we will discuss both.
We do so because we are living in a time like Lenin’s in which capitalism is
in crisis once again. The capitalist economy needed to transcend the param-
eters of the system of mutually antagonistic states and was unable to and
as a result the globe was plunged into two world wars. The Depression of
1929–39 compounded the political disorder revealing the underlying fragil-
ity of the economic base of the system.
Despite the apparent prosperity of the subsequent Cold War years the
global capitalist order, even at its post-war height, was marked by an under-
lying instability that was contained by consumerism, mounting debt and the
expansion of American imperialism. The downturn in profits in the 1970s
and the imposition of neoliberalism in the 1980s then set the stage for the
outbreak of crisis in 2008.
But the present situation is not simply marked by an inter-imperialist crisis
or a crisis of the economic system. It is a crisis of both. These contradictions
are fuelling international conflict and in particular the exacerbation of

American militarism that threatens another world war. The outbreak of
such a war makes a nuclear Armageddon more possible, in which case all
bets are off. The fundamental problem remains the continued outbreak of
military conflicts between sovereign states, a shortcoming that has been
intrinsic to capitalism since its beginnings but has now assumed potentially
catastrophic proportions.
Short of the possibility of a war of nuclear extermination, revolutionary
change on a global scale is quite likely. Both possibilities are latent in the pre-
sent situation. We seem to be approaching a tipping point that resembles the
onset of war in 1914. Accordingly, Lenin’s ideas on world revolution that
emerged in a previous period of upheaval deserve reconsideration .
The long-standing contradiction of mutually antagonistic sovereign states
primarily takes the form today of the determination on the part of the United
States to hold onto its hegemonic role in the face of competition from an
increasingly economically strong China and militarily and diplomatically
strong Russia. These conflicts are exacerbated by the tensions arising from
the capitalist economic crisis that broke out in 2008.
There are Marxists who claim that the present economic malaise is simply the
outcome of an insufficient level of profits and/or excessive debt. When these
problems are overcome they contend that capitalism will recover and the status
quo ante will be restored more or less. To the contrary it is our view that the
system has entered into a general crisis composed of so many negative factors
that it is difficult to believe that it can restore itself.
What are the elements of this crisis? We have already mentioned some:
the system’s inability to transcend the form of mutually antagonistic territo-
rial states; resultant uneven development and intensified imperialist rivalry;
lack of profitability on accumulated capital; speculative bubbles; overhanging
debt and credit crunches and a nagging lack of demand. All of this amounts
to a crisis based on the classic Marxist model of crisis as stemming from the
conflict between the forces and the relations of production. There is also a
growing legitimization problem rooted in the widening gap between the
rich and the rest of the population. Lurking in the background is the eco-
logical crisis, which one way or another constrains the ability of the system
to renew itself.
It is said that the American, European and Chinese economies in con-
trast to most of the rest of the world are recovering. But Latin America, the
Middle East, Africa, Japan and most of Europe continue to experience dif-
ficulties. World GDP has slowed to below three percent, levels of productive
investment languish, the value of world trade has fallen and protectionist
sentiment is growing among other negative symptoms. Raising worldwide
growth levels sufficiently to achieve a sufficient return on existing capital

essential to incite investment is becoming a Sisyphean task. In this inter-
dependent world then it is difficult to believe that the American recovery
can be anything but temporary. Moreover, the economic nationalism of
Trump can only deepen the problems of the system as whole.
The meaning of Trump

Despite its recent positive economic performance in many respects the United
States, the heart of capitalism that some believe is immune to socialist revolu-
tion, is at the focal point of the crisis and is its weak point. Obama represented
the last attempt to maintain the mirage of liberal reform. The election of
Trump in the wake of Obama’s failure signals the demise of the liberal order
in the United States, which up to now has been able to contain class and racial
conflict. Clinton’s defeat represents the collapse of the liberal ideology based
on the idea that American capitalism could and would reform itself. In its
place has developed a split in the ruling class between the failed liberal demo-
cratic elite and those rallying behind the new authoritarianism of Trump.
Since the crisis of 2008 the job market in the United States has recovered.
But the overwhelming number of new jobs created have been temporary
or low paying. Many young people as well as mature workers unable to
find stable employment have dropped off the employment roll and have
withdrawn from the system. Socialist ideology is particularly rife among the
young. The liberal intelligentsia bemused by identity politics, clinging to
cultural studies or neo-Keynesian economics, or even trying to revive the
Cold War against Russia and China, have no capacity to address the crisis.
The Democratic Party remains under the thrall of Wall Street, high-tech
multi-millionaires and Hollywood liberals. All pretence of reform has been
abandoned by the ruling class.
Given the reactionary policies of the Trump presidency we are already
seeing an exacerbation of social and economic problems, an upsurge of
protest from below and intensifying class struggle. In reaction it is highly
likely that there will be an intensification of state repression. Indeed, the
militarization of the police, growth of the carceral system and deepening of
government surveillance and censorship has prepared the way for the transi-
tion towards a fully authoritarian police state. It will be rationalized as the
need to preserve the constitutional legacy of the Founding Fathers. Already
the United States is being characterized by credible analysts as a neo-fascist
state with a mass base in the lower middle class (Bellamy-Foster 2017).
Any idea that the United States will willingly retreat from its posture of
aggressive militarism is belied by the fact that three generals sit in President
Trump’s cabinet testifying to the overriding influence of the military-industrial

complex. Their presence is helping to usher in a new stage of the arms race
involving a whole new level of military spending despite the fact that the
trillion dollar defence budget already dwarfs that of all other states combined.
The president has at his immediate disposition a 70,000 strong praetorian
guard and large private mercenary armies as well an unlimited array of techno-
logically sophisticated weapons. Militarist rhetoric and gun culture pervades
American society and the greatly expanded growth of armed vigilante groups,
as in previous fascist regimes, is perfectly possible under Trump. In recent
American history militarism and militarist adventurism has repeatedly been
used as a means of evading internal social and political conflict at home and
maintaining American influence abroad and is once more likely to be seen as
a way out by the political and social elite. Ongoing war overseas is now built
into the system.
Under such circumstances, to wit, economic crisis, growing class conflict,
an entrenched ruling class unwilling and unable to reform itself, an exhausted
liberal intelligentsia and alienated younger generation, embittered racial and
ethnic minority populations and a frustrated and impoverished working class,
the United States seems headed towards internal political crisis, one possible
outcome of which is revolution. Even now, in the presidency of Donald
Trump, the United States has become a seething cauldron of class and racial
conflict. Indeed, a failed military adventure would be a catalyst for such a
crisis as the population in such circumstances is unlikely to rally around the
flag. Mass protest could develop as happened during the Vietnam War. Even
without a revolution the result of such internal divisions could be a manage-
ment crisis for the American empire. The United States falling into internal
confusion could open the way for revolutionary change elsewhere in the
empire as, for example, in Saudi Arabia or South Africa. The possibility of
revolutionary change within the United States or of internal conflict within
that gigantic country, which is the core state of global capitalism, needs to be
considered a central question of geopolitical analysis.
In this context the example of the Vietnam War comes to mind. The
unrest within the United States at that time is today forgotten or deliberately
brushed under the carpet. But the fact remains that the war precipitated
a near breakdown of governance within the United States. It brought to
the surface popular animosity to the bureaucratic and militarized state and
racial and inter-generational conflicts that lay below the surface of Cold War
American society. Today many see the upheavals of that time as a mere
episode that went away with the end of the war. On the other hand, the
underlying conflicts were never resolved. On the contrary, they were sup-
pressed and have intensified over the years. Seen in this context the unrest of
the Vietnam period should be seen as a signal crisis. Whereas the 1960s were
a time of relative prosperity for the working class and the mass of the popula-
tion economic and social disparities have greatly intensified. The possibilities
of conflict including class conflict and overall upheaval on a large scale are
now much greater than fifty years ago. The absence of an effective military
draft mitigates this possibility but it does not eliminate it. The American state
is using foreign wars to distract from the increasingly fraught internal situ-
ation. There are signs such as, for example, the populist repudiation of the
pro-war candidate Hillary Clinton by the voters in the election of 2016 that
this strategy may itself be failing. Furthermore the polarizing impact of the
Trump presidency can of itself help to precipitate class conflict. The social
and political situation in the United States is far more divided than it was
during the Vietnam War.
The accumulation of problem upon problem and struggle upon struggle
makes the likelihood of a systemic crisis of the current capitalist order likely at
some indeterminate point in the future. It is rather like the build-up of layer
after layer of geological pressure prior to a major earthquake. Such a crisis
should not be understood in simply economic terms or as a possible outbreak
of international war, global revolution or environmental catastrophe. Rather
it is likely to be combination of such factors – a civilizational crisis of grand
proportions the nearest parallel to which would be an explosive mixture of
World War I, the Russian Revolution and the Great Depression rolled into
one. Who can say when and how such an event could occur? It will come
about no doubt in some unexpected way.
Imagining revolution
Imagining such an event it is important to remember the French Revolution.
It arrived as a near complete surprise and was experienced as a total trans-
formation of society as it changed from one mode of production to another.
Privilege turned into equality, faith into reason, tradition into progress over-
night, or nearly so. It was immediately recognized as an event of universal
significance. Having happened once it could happen again and in fact it did
happen again, in 1917.
Following a future socialist revolution, hopefully on a world scale this
time, redistribution of wealth would be the primary means by which equal-
ity and material sufficiency would be achieved between the rich and poor
in each country and between the developed and under-developed countries.
But further temporary expansion of material output might also be required
in order to meet the needs of the peoples of the under-developed world.
The ultimate goal would be a global economy that is close to a steady state.
Eliminating profits and the accumulation of capital as the objective of

economic activity would represent a decisive step in the direction of a no-
growth economy. Growth focused on the expansion of the output of material
goods was always rationalized as a means to overcome scarcity or to satisfy an
expanding number of needs. That was the rationalization of the endless pur-
suit of profit and accumulation of capital. Under socialism economic growth,
which was merely a means to the goal of capital accumulation or the need
for profit, would cease.
The promise of growth in the past became a way of rationalizing the
existence of social inequality. Indeed, growth was advocated by liberals as an
alternative to demands for economic redistribution. The expanding pie of
capitalism could meet everyone’s material needs. In reality economic growth
under capitalism as a goal has always been subordinated to profit making and
capital accumulation. In economically depressed periods, when it was diffi-
cult to make profits and accumulate capital, economic growth simply ceased.
The end of capitalist growth

As we have suggested under the auspices of liberalism capitalist growth has
been justified on the basis of the notion of an ever expanding economic
surplus. According to this view, fostering equality on society will cripple
growth which is the goose that lays the golden eggs. Following this line of
argument one must acknowledge that capitalist growth did provide some
material benefits to the working classes of the advanced capitalist countries
in the last one hundred years. On the other hand, one must bear in mind
that much of this prosperity was based on the exploitation of the labour and
resources of under-developed countries. There is furthermore no guaran-
tee that working class prosperity in advanced capitalist states will continue
under conditions of neoliberal globalization. Given the enforcement of this
doctrine’s insistence on a worldwide and open competition for paid work,
workers in advanced capitalist countries have seen a decline in their stand-
ard of living and little or nothing stands in the way of a further erosion of
working class incomes.
Similar rationales of future prosperity have been offered to justify the con-
tinuation and expansion of capitalist development of China. There are some
in China who definitely have become rich and even very rich. But the evi-
dence is growing that there may be more loss than gain for the majority of
China’s population in pursuing such policies and they are increasingly being
questioned by the mass of the population and the current regime. In fact,
most of the seven and a half billion human beings on earth have yet to taste
the benefits of capitalist growth. Premised on the maintenance in permanence
of capitalist inequality and social insecurity, such growth can never provide
employment let alone well-being for most of the world’s population. Indeed,
ample evidence exists that keeping a large part of this population permanently
jobless is necessary in order to keep wage costs down.
This is to say nothing about the fact that ongoing capitalist growth is
endangering the future of human and animal life on the planet. It is over-
heating and polluting the atmosphere while destroying the forests, melting
the icecaps and poisoning the water. Despite ongoing efforts by apologists
to convince people that profit-driven growth is compatible with a sustain-
able environment, it is in fact fundamentally in contradiction with it as we
shall see.
Under global socialism the ideology of productivism that has been with
humanity since the Industrial Revolution would be subordinated to the goals
of meeting essential human needs, furthering the development of human
capacities and protecting the natural environment. As things now stand there
exists more than enough material wealth to meet the needs of the world’s
population. World GDP per capita according to CIA Fact Book figures was
just below $8,000.00 as of 2005. That amounts to around $30,000 for every
family of four on the planet. Such a figure, based on dividing world GDP
by world population, of course means little in itself and is methodologically
open to question to say the least. But it is useful nonetheless in suggesting
that there is more than enough wealth to go around. In other words, as a
result of the cumulative growth of the past two hundred years there is no
longer any purely economic barrier to the elimination of scarcity.
It would not be the aim of a socialist order to reduce material output
from what it is now. It would be rather to redistribute wealth in order to
provide the world’s population with a decent standard of living. The intent
of the socialist project is not to redistribute wealth in order to create an
equality of poverty. On the other hand, such a project does entail stripping
the assets of those in the world who have and consume too much. Those
who own the means of production would obviously see their property
taken from them. But also high income earners in what have been referred
to as the over-developed countries who participate in over-consumption of
commodities (SUVs, luxury homes and mansions, compulsive shopping as
recreation) would have their incomes reduced. The objective would be not
an equality of poverty but one of decency and sufficiency for the whole of
humankind. Of course the barrier to the redistribution of wealth is the greed
and power of the capitalist class whose wealth is responsible for poverty. As
never before the fundamental alternatives are capitalist growth or socialist
redistribution. Economic sufficiency for the whole population would in
itself provide an incentive to limit further expansion of material output.
Ongoing scarcity provides a convenient rationale for further economic

expansion. Moreover the high consumption of the rich whose ideas rule
over society is a negative example to the rest of the population. As we
said a socialist economy would, for all practical purposes, be a steady state
economy maintaining or renewing existing productive capacity.
The socialist economy

How would production and distribution in a global socialist economy be
organized? As we have noted the base of such an economy would be the
tens of thousands of corporations that currently dominate and inter-connect
the world economy. As they exist today under capitalism, they constitute a
vast, centralized and concentrated web of worldwide production and distri-
bution. As publicly controlled enterprises they would become the sinews of
a global socialist economy. In command of enormous productive resources,
these firms are organized on the basis of technologically advanced networks
of production, communication and distribution that already plan their activi-
ties. These globally inter-connected enterprises would now become public
property and would come under the control of their workforces as well as
global, national and local public assemblies. In the course of becoming public
enterprises they would undergo a process of systematic democratization that
would undercut their hierarchical structures of control.
This would be part of the transformation of the overall economy in which
private property as means of production or means of money-making would
be taken over by the public sector at a pace deemed appropriate. The eco-
nomic activities of these transnational economic corporations would need
to be supervised and coordinated. Such a task would appear daunting. Yet
it must be realized that these global corporations operating in the context
of the world market already require and actually possess immense organiza-
tional capacity and sophisticated planning mechanisms. Even in the capitalist
market economy of today the degree of planning that exists is already enor-
mous. Reinforcing these control mechanisms at the enterprise level are the
equally impressive planning capacities of existing government bureaucracies
and international economic and financial institutions.
These include those bodies devoted to economic forecasting and sur-
vey research as well as the provision of services and the creation of and
coordination of international, regional and local economic activity. The
universities, of which there are thousands worldwide, are repositories of
enormous economic, financial and administrative intellectual resources.
Public bodies, for the most part, with their constantly increasing coordinat-
ing capacities have been under-utilized under capitalism. In other words
there presently exists the potential for the socialization and coordination of
production and distribution on a global scale.
The possibility of socializing production and distribution has been
greatly increased by the development of the computer and the internet.
The coordinating functions necessary have been strengthened by the com-
puter, which has become indispensable to the productive process as well as
to public and private administration. The new socialist order would take
advantage of the fact that the internet already allows thousands of businesses
and public institutions as well as grassroots organizations to store information
and to maintain contact and coordinate activities with one another in an
unprecedented way. The instantaneous transmission of global stock market
quotations and financial transactions illustrates the way data could be trans-
mitted in a sophisticated socialist economy. Inventories, demand and flows
of goods, are already predicated at the enterprise and national level. Just-in-
time procedures already show what can be done in terms of production and
distribution. The use of bar codes, computer purchasing and the embedding
of internet cookies allow refinement of these processes.
Workplace democracy
The creation of socialism on a world scale will necessarily unfold as an amaz-
ing improvisation. It will be brought into being by the enthusiasm, energy
and inventiveness of the mass of the people in each country. It will literally
be the creation in a relatively short period of time of hundreds of millions if
not billions of working people. What the combined imaginations and crea-
tive efforts of such a multitude might produce in building up a new socialist
global polity is anyone’s guess. There is reason to believe that it could be a
magnificent and completely unprecedented political and social construction.
The fund of experience and theory attendant on past revolutions will be an
important resource. But there is no certainty in such a project and there is
no reliable guide.
The workforces in the private and public sector would be the pillars of
such a newly established socialist order. Organized around their millions of
workplaces and their unions these elements and the productive capacity at
their command would form the sinews of the new political and economic
system. The control of capital having been abolished, social labour would
proceed to organize its own democratic economic and social order. Value
as defined by capitalism would cease to exist. The general intellect of social
labour rather than capitalists or hired experts would be in charge of the pro-
cess. This would accord with the original vision of Marx and Engels and the
thought of socialists up to the present.
Meanwhile the so-called socialist calculation debate on how to effectively

run a socialist economy in the absence of the law of value would of course
continue and even intensify. Running a socialist economy organized on a
world scale would no doubt be a complicated business. But given the vast
capacity to forecast, which is already built in to capitalist society, or the great
experience of Cuban and Chinese planners in running national economies
there is good reason to believe that organizing a global socialism is not beyond
human capacity. No doubt mistakes have been made and will be made in
doing so. Meanwhile economists and planners can continue to debate how
best to develop a socialist economy (Levy and Peart 2008).
Socialist environmentalism
In a socialist order whether or not more economic growth would be neces-
sary would be subject to national and international democratic debate and
decision-making. Using resources to meet real needs or promote human
improvement would require the regulation of economic activity with eco-
logical standards as a central criterion. In so far as it did continued economic
growth would no longer be an objective for itself, while the provision of
clean air, green space, clean water and the preservation of animal habitats and
species would become so. The associated producers who control production
in a socialist society would consider such environmental goods use values in
exactly the same way as food, shelter and clothing are use values at present.
Technological innovation would continue of course, its development based
not on the need for profits or growth but on maximizing workers control
over production and the quality and utility of products as well as their eco-
logical compatibility. At the same time older modes of production based on
hunting and gathering and peasant agriculture would be restored as much as
possible. These older modes provide employment and means of subsistence
as well as tending to be in metabolic harmony with the environment.
Under capitalism businessmen, bankers and managers control the econ-
omy. The expansion of surplus value and the need for profit necessarily
overrides all other considerations and as such requires economic expansion
at all costs even at the expense of clean air, water and green space. Market
competition and profit expectations compel managers and owners to down-
play and ignore environmental considerations where they can. In order to
compete successfully private entrepreneurs are required to operate in this
amoral fashion regardless of their private morality.
Indeed, such competitive pressures incite capitalists to try to treat air, water,
oceans and open space as free goods from which materials can be extracted and
into which wastes can be dumped. It is of course possible to try to regulate
such anti-social behaviour. But if the experience of the last thirty-five years
of environmentalism is anything to judge by, capitalists always find a way
to subvert or circumvent such regulation. Moreover, a steady state or no
growth economy is incompatible with profitability and therefore with the
perpetuation of capitalism. Continued expansion of output is intrinsic to
the accumulation of capital. On the contrary, under socialism the associated
producers control the means of production and are willing participants in a
socialist order committed to a steady state economy. They have a direct and
ongoing interest not only in producing use values such as food, shelter and
clothing but also in ensuring that production does not threaten other vital use
values like thriving woodlands and marshes and clean air and water. The pres-
ervation of such use values is in the immediate interest of the direct producers
in a way that it can never be for capitalists (Burkett 2006).
There is a large measure of agreement about the question of capital-
ist growth among socialist theorists. Istvan Meszaros’s view of the matter
represents a somewhat heterodox perspective or perhaps it is just a bril-
liant reconceptualization of the problem (Meszaros 2007). Following in the
footsteps of Marx Meszaros rejects the idea that growth should cease under
socialism. He argues instead that most eco-socialists oppose growth because
they are still in the grip of a capitalistic and fetishized way of thinking about
growth of which they are prisoners. Their consciousness is attached to the
belief that capitalist growth or growth of material output is the only kind of
growth that is possible. In this conception wealth takes the form of fetishized
commodities to be maximally produced in as minimal a time as possible
without regard to the actual producers. Capitalist growth recognizes no lim-
its and is prepared to accept as growth that which is wasteful and destructive
for the sake of profit.
Meszaros sees the problem as fundamentally that of redefining the nature of
wealth. Under socialism the time devoted to the production of things would
be defined by their social utility as determined by the freely associated produc-
ers. Instead of their value being determined by the socially necessary or average
labour time embodied in things as is the requirement of commodities in cir-
culation under capitalist market competition, the worth of things would be
based on the disposable time dedicated to producing them seen as a goal set by
the associated producers. Meszaros suggests that the resultant products would
be inherently superior to capitalist commodities because they would draw on
the infinitely richer resources and skills of the associated producers rather than
what is produced under the tyranny of socially necessary labour time.
Indeed, Meszaros suggests that capitalism does not even offer a convincing
definition of growth. Rather it advances a tautologically false definition of it
as an increase in productivity while productivity is in turn defined as growth.
Capitalism’s fundamental aim is not growth but rather the accumulation of

capital, which is its be all and end all. On the contrary, wealth under social-
ism will be defined by its use value. The production of communal wealth
would be based on careful and rational husbandry rather than heedless waste
and it would be rooted in a clear understanding of the ecological limits to
increases in material output. Indeed, its basic goal would be the production
of use values including food, shelter, clothing, culture and leisure as well as
child care, health and disability care and a clean environment. According to
Meszaros, the multiplication of such use values is in fact growth as redefined
by socialism. He insists that the continued hegemony and one-sideness of
capital blinds us to fully appreciating the value of this fuller notion of the
accumulation of wealth. Based on this proper view of wealth, the produc-
tion of nursery school teachers, speech therapists and pianists would be as
fully valued under socialism as that of engineers, physicians and accountants.
Likewise, the production of a greater sense of community or of an ecologi-
cally friendly environment would constitute growth.
The economistic distortions of capitalist society would be rearticulated
towards a much more balanced view of human social and cultural produc-
tion and activity. Meszaros’s redefinition of growth or of the composition of
growth it should be added more closely conforms to the original vision of
Marx than does that of other eco-socialists who insist on the end of growth.
Marx held to what may be called a Promethean view of humanity that
insisted that its potentialities were inherently inexhaustible. The redefinition
of growth under socialism as the expansion of ecologically benign use values
rather than an unlimited increase in merely quantifiable material outputs
allows for a continuation of human progress under entirely new and more
auspicious circumstances.
It is not sufficient to speak about socialist society as an ecologically
minded society. Rather, as one student of the subject puts it, it is necessary
to create an ecologically realized order of things. This suggests that socialism
ought not to be simply an improved version of the present based on equal-
ity. Rather it should be a society in increasingly conscious symbiosis with the
natural environment. Such a symbiosis between society and natural environ-
ment must be an ongoing intention or goal of the community reflected in
the democratic planning process (Kovel 2003).
A new socialist world order may have no choice but to move in this
direction. Global warming and the depletion of oil will probably make long-
term industrial expansion based on the use of fossil fuels unsustainable. Prior
to the development of modern industry the world ran on energy from wind,
water and biomass. In the centuries prior to the Industrial Revolution there
was a certain amount of growth in both agriculture and industry in Europe
but also in China and Japan. But economies remained embedded in society
and in turn the political order and society were implanted in nature. There
were definite Malthusian constraints on population and the size of cities
based on the ratio of landholding and food supplies to numbers of people.
The Industrial Revolution led to the disembedding of the economy from
the rest of society-social relations and political regulation and culture were
viewed as secondary or inhibiting factors. More damaging was that the capi-
talist development of the economy came at the expense of nature, which
was thought of as a free good. Marx spoke of a metabolic rift in which the
logic of capitalist accumulation severed the economy from basic processes of
natural reproduction leading to environmental deterioration.
Running on empty
The Industrial Revolution based itself on the use of increasing quantities
of coal and oil – energy rich but highly polluting sources of energy. But
the approaching exhaustion of oil and the cumulative environmental harm
caused by coal and oil is becoming daunting. Capitalism requires economic
growth to create a larger pool of profits. But such growth is premised on the
availability of cheap energy. Without such growth capitalism will wither.
Perhaps more efficient use can be made of coal employing so-called clean
coal techniques so as to cause less harm to the atmosphere. But the energy
used to clean the coal itself engenders a significant amount of greenhouse
gas. The use of hybrid engines or the availability of hydrogen power as a
substitute for gasoline might delay the depletion of oil or reduce the need to
consume it. There is the possibility of using nuclear fuel. But this too may be
unfeasible because of its hazardous waste. Solar, water, wind, compressed air,
geothermal and hydrogen power may all prove usable but their practicality
remains to be demonstrated.
One should not rule out the possibility of further technological break-
throughs that might help to prolong the life of capitalism. After all in their
time the invention of the steam engine, the agricultural revolution, the inter-
nal combustion engine and the development of hydro-electric and nuclear
power helped to invigorate or re-invigorate capitalism. Capitalism is nothing
if it is not resourceful. One cannot exclude the possibility of further techno-
logical fixes that would allow capitalists to continue to pursue accumulation
and make profits without sufficient popular resistance. If so the social and
environmental devastation of capitalism could continue while the earth
would be turned into a complete wasteland.
On the other hand, there may be an absolute limit to such growth based
on the ecological carrying capacity of the earth. As a result humanity may
be forced to move to a less energy intensive economy. The advent of

socialism in such a case would mark a turn to a low growth or no growth
economy. It would be the conscious intent of such a society to repair the
metabolic rift between society and the natural environment. A socialist
society would in a sense mark a return to pre-industrial circumstances in
which society would be re-embedded into the natural environment. At the
same time, such a new order would still have access to environmentally
friendly technologies and knowledges that have accumulated over the last
two centuries of so-called modernity. Indeed, in a socialist economy there
would be an incentive to invent and apply new technologies that reduced
energy consumption.
Planning the population

Uncontrolled expansion of the population was another consequence of
industrial capitalism. The loss of family access to land, proletarianization of
the majority of the population, the need for an expanded labour force as
well as improved sanitary conditions and increased food supplies promoted
an immense increase in human population in Europe and elsewhere from
the eighteenth century onwards. Indeed, the increase in population played
a key role in promoting economic growth. Population expansion under
the conditions of market exchange promoted increased division of labour
including technological advances that increased productivity and levels of
material output. Under socialism increases in material output would be care-
fully controlled or altogether muted. The emphasis would shift to equalizing
rather than creating more wealth. The need for more population to spur
economic growth would be eliminated. Under such conditions it would be
beneficial to look towards a gradual reduction in the human population in
order to reduce its environmental footprint.
Such a proposition has nothing to do with the Malthusian concep-
tion, which hypocritically ignores all the social and historical factors that
mould human reproduction and population increase (Bellamy-Foster 2002:
137–53). These factors are known and are potentially within the power
of humanity to control under the right conditions. Malthusianism prefers
to view population increase fatalistically as a biological force that is inex-
orable unless checked by so-called moral restraint or by positive checks,
i.e. food shortage, malnutrition, disease and morbidity. These notions, which
reinforce the economic ideas of laissez-faire, are premised on preserving the
privileges of those who hold property while deliberately refusing to do any-
thing to improve the standard of living of the rest of the population. Socialist
demographic planning, on the contrary, is based on humanity taking the fate
of the population into its own hands by means of democratic planning of the
economy and limiting ecological destruction.
Population growth may once have been related to biological or cultural
survival. In the pre-modern period parents depended on children as a source
of labour, income and old age insurance. States were pro-natalist because
increasing population provided more tax revenue and recruits to the mili-
tary. Since the Industrial Revolution population increase has also been seen
as necessary to maintaining access to a cheap and exploitable labour force
and as the source of the reserve army of the unemployed. In an economy
where labour is a commodity, indeed, the critical commodity, having a ready
supply of such a commodity at a low price is indispensable to profit. Of
course under such circumstances increasing the population has nothing at
all to do with the actual well-being of such a population. That is beside the
point from a capitalist point of view. Indeed, under current circumstances
the spread of birth control is seen as a threat by those who desire continued
access to cheap labour.
Families at the grassroots understand such matters quite well. Whatever
resources they possess have been obtained by personal effort and collective
struggle. As for reproducing themselves, ordinary families plan the birth of
their children where they have the opportunity to do so. Quite contrary to
Malthusian notions, in the present epoch a demonstrable link exists between
population limitation and the growth of the economic well-being of families
and the expansion of opportunities for women. Under socialism, family for-
mation, births and the growth of the population would become the subject
of democratic discussion and the basis for the formulation of humane and
environmentally conscious public policy. What is decisive in this respect is
the socialist and democratic auspices under which a policy of limiting the
growth of population is undertaken. Planning or conscious and rational deci-
sion by citizens as a whole would take the place of tradition, state policy or
capitalist ideology in the formation of population policies.
The built environment transformed

Eco-socialism would entail the substitution of resource consumption and
pollution generating practices by resource saving and pollution minimizing
processes. Existing infra-structure would be retro-fitted, public mass transit
would replace the private automobile and water, wind and solar power would
substitute for oil, coal and nuclear power. The ecological restructuring of
existing industries and the development of community based green industries
would become priorities. The goal would be to transform the whole built
environment so as to be eco-efficient or in harmony with the topography
and carrying conditions of the natural environment. This would include the
transformation of cities by extending public transit, recombining work, liv-
ing and recreational spaces based on multi-functional design, revitalizing city
centres, community centres and neighbourhood centres of sociability, green
belting urban sprawl thereby simultaneously increasing population density
and increasing green space, and the creation of wildlife habitats and garden
farming within the urban setting (Albo 2007: 343).
The city should be transformed into a network of urban villages linked
by good public transport systems. At the heart of a serious effort to trans-
form urban life will be the fate of the private automobile. From the 1920s
onwards the automobile became the key capitalist symbol of consumer free-
dom and affluence. After World War II it turned into the ultimate object
of mass consumption throughout the capitalist world. Car and truck pro-
duction, the superhighway system and mass-produced suburban housing
became fundamental features not only of American life but of life in much
of the developed world. The lure of suburbia was the promise of a private
enclave of family-based consumption in an ordered garden-like setting apart
from the hurly-burly, sordidness and disorder associated with the city. The
separation of home from work made the automobile indispensable to the
realization of such a suburban fantasy. Among the noxious effects of sub-
urbanization have been the social isolation and depoliticization of citizens,
the decay of inner cities and public transport systems, chronic traffic conges-
tion, exurban sprawl and growing carbon emissions and greenhouse effects.
This pattern of development is now in the process of extending itself to the
under-developed world.
Capitalist society, such as it is, is deeply wedded to the private automo-
bile as the basic means of transport and as a fundamental part of the existing
system of production and employment. Furthermore, the automobile as
private property and a symbol of affluence is a fetish to which millions of
consumers are deeply attached (Paterson 2007: 192–24). The absurdity of
this situation is heightened by the realization that individual owners con-
sider these vehicles as a kind of sacrosanct property while actually using
them on average only two or three hours a day. The recent decline in
the North American automobile manufacturing industry, the rising price of
gasoline and the intolerable levels of traffic and pollution in places such as
southern California, southern England, southern Ontario and the environs
of Paris and Lyons increasingly threaten the sustainability of this state of
affairs. Such a system will sooner or later become both economically and
ecologically unviable. Yet such is the centrality of the private automobile
to capitalism that a crisis in this sector will of itself set off radical changes
in employment, consumption and urban living, to say nothing of politics.
Automobiles might in future be available to holiday-makers or for other

special occasions. Public provision of rented cars could meet such needs.
But sooner or later the private automobile will have to give way to public
transit and the planned spatial reintegration of home and work. Many of
the workers in this industry would find work in building new mass transit
systems including trains, minibuses, buses, light trains and trams.
But it is not enough to be concerned with the greening of cities. Cities
must be planned as part of the ecology of whole bio-regions including their
agriculture, forests and aquifers. A sustainable agriculture obviously must be
an integral part of this programme. The food supplies of cities should, as
much as is practicable, come from local sources rather than being trucked
or air freighted from sites thousands of miles away. In contrast to the indus-
trialized farming current today, which is degrading the soil and water, a
sustainable agriculture that replenishes the soil, does not pollute and is based
on the limited dissipation of energy is necessary.
The peasantry restored

Free trade in agricultural products and the development of capitalism
throughout the undeveloped world is in the process of dispossessing hun-
dreds of millions of peasants. The restoration of a peasant-based agriculture
must be a priority of an eco-socialist project. Dispossessing these popula-
tions of their means of subsistence forces them to try to sell their labour in
return for a wage. But this mass of humanity cannot possibly all be turned
into urbanized industrial workers with stable employment. Yet this is the
fundamental developmental logic that is assumed by theorists of capitalist
modernization. Capitalism cannot provide enough jobs in the manufactur-
ing sector for such a mass of humanity and the world would be ecologically
much the worse off if it could. Indeed, most of the rural dispossessed are
winding up as a lumpen proletariat in the over-crowded urban slums of the
Third World (Amin 2004).
Such tendencies need to be reversed. An agrarian reform that handed the land
back to the peasantry, made available sufficient resources, credit and technical
support and provided a proper return to the producers for the food produced
must be envisaged (Mazoyer and Roubdart 2005). Under the right conditions
peasant agriculture based on labour inputs can be efficient (Sourisseau 2015).
Modern agronomy ought to be combined with the revival and encouragement
of long-standing local traditions of farming while taking into account the need
for agricultural and biological diversity. Health, education, culture and other
services made accessible to the rural population at a level equal to that of urban
society ought to be an intrinsic goal of development.
The case for market socialism

We have suggested that the market and the commodities that are exchanged
in them ought to be phased out through a democratic process and by the
introduction of new means of non-market exchange and distribution. At the
same time, all socialists, including those most vehemently opposed to the mar-
ket, accept the idea that market exchange would have to continue in the
immediate wake of a revolution. The planned economy would have to be
introduced step-by-step. As such many socialists see the market as a necessary
evil that should progressively be limited as effective non-market mechanisms
of exchange can be introduced. Some see the process of replacing the market
with other forms of exchange as a more or less long drawn out affair. Others
insist that the market be phased out as quickly as possible. But there are still
others who firmly believe that the market is entirely compatible with socialism
and should be an intrinsic feature of the new order.
Proponents of market socialism believe it to be the most efficient means
of carrying on exchange between public enterprises and between such enter-
prises and consumers. Most of those who advocate market socialism assume
that the means of production would be progressively socialized. They also
assume that a market for capital would cease to exist and that the labour mar-
ket would either be abolished or greatly constrained. Prices might be set not
necessarily by supply and demand but by a publicly controlled mechanism of
adjustment and re-adjustment based on perceived shortages or oversupply.
Markets would continue to exist for an indefinite period for producer and
consumer goods.
Among the most sophisticated proposals for a socialized market based
on the computer is that advanced by Diane Elson (Elson 1988). Her view
starts from the by now familiar notion that markets are politically, histori-
cally and culturally constructed entities inter-dependent with other social
institutions. According to Elson then, in a socialist economy markets should
be constructed and controlled by public bodies. The secretariats of these
bodies (wage and price commissions) should be financed out of household or
enterprise taxation and not be dependent on sales taxes. Of necessity private
markets generate an ethos of goodwill and reciprocity among the relatively
small number of private gentlemen or charmed circle who are the main
players in such an arena. Contrary to orthodox economic theory, capital-
ist markets are far from being level playing fields. As most everyone aside
from neoclassical economists understand the market is largely dominated by
a more or less exclusive club of big players. They tend to exclude outsiders
while exercising leverage and having privileged access to information. In a
socialist order, according to Elson, the market is transformed into a public
electronic information network with open access to everyone through the

internet. Public electronic marketplaces provide information on sales and
purchases between firms and between firms and consumers.
Liberal economists led by Frederick Hayek objected that, unlike the
market and its method of assigning prices, a socialist economy could not
generate information at the micro and grassroots level necessary to run an
efficient economy. As a matter of fact, capitalist markets, far from providing
increasingly perfect information, actually are prone to hide and fragment
information. Enterprises in such a market have an inherent incentive to
conceal information about their productivity, costs of production and inno-
vations. Such practices create barriers to the sharing of information. Hayek,
in criticizing socialism, had in mind the highly centralized economy of the
Soviet Union where access to accurate information from the grassroots
was indeed difficult to come by. On the contrary, a socialized and suffi-
ciently decentralized market would permit the dispersal of initiative, which
is an essential feature of a society that liberates people. At the same time a
socialized market would create new channels and incentives for individual
initiatives to serve the common good.
Electronic marketplaces have developed in fragmented fashion in indus-
trialized capitalist countries. The largest of such enterprises eBay has become
a worldwide electronic marketplace with revenues of billions of dollars from
its origins in 1995. A public electronic marketplace would have the enormous
advantage of standardization as compared to the fragmented and non-
transparent situation under capitalism. Great economies of scale and lower
transaction costs could be had through such a public system. Enterprises and
individuals would have a positive incentive to do their business through such
a cheaper set-up rather than attempt to operate through much less complete
and more expensive private marketplaces, electronic or not. To participate
firms would have to provide true data on their costs, mark-ups and profit.
Otherwise they would be excluded from the public electronic network. The
price and wage commissions that would operate the network could help to
set prices and wages by offering norms, while the fluctuation of these norms
might help in the making of investment decisions.
Elson, in contrast to other market socialists, advocates the perpetuation
of a quasi-socialized labour market. In this way a market would still help
adjust the supply and demand of labour to different sectors of the economy.
On the other hand, there would be a guaranteed annual income as well as
free public services that would allow people to choose to enter the labour
market or not. But the guaranteed annual income would be set low enough
to encourage people to work if they wished to consume more or accu-
mulate money to set up a small business or cooperative. The electronic
marketplace would include information about job vacancies and job seekers.
Existing private bodies, she notes, fail to provide accurate information on
the terms and conditions of employment, going wage rates and the supply
and demand for different kinds of labour – something the public electronic
network could supply. It could set minimal conditions for jobs by control-
ling employer entry to the public electronic marketplace. There would be
no unemployment as those whose jobs were scrapped would continue to be
paid their wages and be retrained.
For orthodox economists the capitalist market is an economic site where
there are buyers and sellers who between them organize the exchange and
distribution of goods. A Marxist would define a capitalist market as the sphere
of action of the law of value or the point at which values generated through
the exploitation of labour in production are realized as profit through the
sale of commodities in the market. The value of a commodity is based on
the quantity of labour power or abstract labour embedded in it. Price then
reflects the value embodied in a commodity exchanged in the marketplace.
A capitalist market in a Marxist sense does not exist merely because goods
are exchanged or money changes hands in such a market. Such markets long
pre-dated capitalism. Rather a capitalist market exists when exchange meas-
ured in terms of monetary prices reflects embodied value.
For a capitalist market to operate then prices reflect the measure of value
in each commodity. In contrast to Elson, equally sophisticated versions of
market socialism argue that it is possible to restrict or even eliminate the
labour market and still leave room for the exchange of consumer goods as an
effective means of providing such goods, ensuring productivity and allowing
choice. Labour power would no longer be bought and sold in the mar-
ket and hence surplus value would no longer be realized as profit from the
sale of goods as commodities. Rather goods would be exchanged but their
prices would no longer reflect embodied value. Prices or so-called shadow
prices would be determined by approximation or simulation by the publi-
cally controlled boards. For many who espouse market socialism restricting
or eliminating the labour market is the essential. Rather than destroying the
market the goal ought to be to socialize it gradually while perhaps reducing
the role it plays in the economy.
The limits of the market

While acknowledging the role the market must play in the transition to
socialism it is important to underline the dangers that the continuation of the
market poses to the full realization of the socialist project. Those socialists
who question market socialism reject in particular any scheme that would
see the perpetuation of a labour market even in the modified form proposed
by Elson. For them the existence of a labour market is one of the roots of
the perpetuation of capital. The existence of capital is based on the sale in
the market of labour power by workers. The realization as profit of the sur-
plus value produced is then dependent on the exchange of commodities (in
which such value is embedded) in the market. However controlled the sale
of labour power might be in a public electronic market such a sale of labour
power and resultant profit represents the thin edge of the wedge making
possible a return to capitalism.
Those who oppose market socialism reject in principle the individual-
ism and acquisitiveness the market promotes. Stressing the importance of
the ethical and moral foundations of society, such critics see the continued
existence of the market as diametrically opposed to the creation of a social-
ist society. Mutual cooperation and sharing must be the foundational values
in such a society. The individualism and greed fostered by market activity
if allowed to fester will undermine the foundations of a socialist society in
the longer term. According to this view, it is not enough to change the rela-
tions of production of a society or to introduce planning in order to create
socialism. Such changes are of course a precondition. On the other hand,
it is important to wage a moral and social struggle for socialist values. As
part of such a struggle closing the door to market options as quickly as pos-
sible is essential. Perpetuating market relations and its values beyond what is
immediately expedient represents a real danger to the development of a fully
socialist society.
Proponents of market socialism might argue that a market socialist society
could decide to reward personal sacrifice for the sake of the community – a
socialist virtue – as a token of that society’s commitment to socialism. But it
is hard to see how in the long run this would prove compatible with the mar-
ket’s inherent bias in favour of competition, which entails the improvement
of productivity. Based on the need to compete and improve productivity the
tendency of the market would be to reward higher levels of skill, talent and
education rather than a higher level of personal sacrifice for the sake of the
collective. On the other hand, if it rewarded productivity equality would
soon go out the window. The very structure of markets is based on inequal-
ity and unless corrected becomes exacerbated over time. Those with more
capital, skills, talent and education tend to gain advantage over those with
less of those qualities.
It can indeed be argued that however much the legal system or public pol-
icy in a socialist regime might try to circumscribe the operation of the market,
its existence tends to corrode a socialist ethic. Experience shows that market
socialism can lead to the restoration of capitalism. The history of post-1945
Stalinist Hungary represents an excellent case study of this process. Beginning

with the death of Stalin (1953) a strong movement towards economic reform
and democratization developed both within and without the Communist
Party. The suppression of the Hungarian Revolution by the Soviet army in
1956 represented the end of all hopes for the emergence of democratic social-
ism in that country. In place of installing democracy came the promotion of
market socialism as a way of reconciling the population to the Communist
state apparatus. The supply of consumer goods would compensate the people
for the absence of democratic politics. Over time this led to the penetration
of the economic and political categories of Hungarian society by capitalist
relationships and norms. Eventually there came into being a second economy
based on a nascent capitalist class. This class eventually assumed power in the
wake of Gorbachev’s political liberalization of the Soviet Union.
China until recently seemed headed in the same direction. Only the con-
tinued dictatorship of the Communist Party and the state stood in the way
of the complete re-establishment of capitalism. A great part of the econ-
omy fell into the hands of a burgeoning middle class and foreign investors.
According to one view China lost control of its internal economy, becom-
ing increasingly dependent on exports to keep the economy afloat. Much
of the population was caught up in a frenzy of consumerism and greed.
Accompanying this process of dismantling the public sector and the spread
of market individualism was a constant re-interpretation of Marxist concepts
to rationalize and accommodate such economic liberalization.
But under President Xi Jinping there has been a sudden reassertion of
control by the public sector. The crisis of capitalism in the West and the
attempted isolation of China by an increasingly aggressive United States has
strengthened the hand of the left in China. Ironically American hostility is
promoting a return towards socialist ideas. A new emphasis on the decisive
importance of the public sector including state-owned companies and the
necessity of a planned ecological economy has come to the fore.
Those who advocate market socialism fail to appreciate that capitalism is
more than simply about capitalists. If market criteria are going to be used to
regulate production, workers in collective enterprises will in all likelihood
be forced to act like collective capitalists. New workers will only be hired
if they can increase profits or market share. The collective, like a private
enterprise, is unlikely to empathize with those outside of the enterprise who
need employment or have special needs. Within the collective workers may
be forced to work longer and harder according to the dictates of conforming
to the demands of the market. The continued rule of market criteria will
ultimately mean that conformity to its exigencies becomes the litmus test of
all other social policy.
The persistence of money within a market framework will lead workers

to constantly seek more money to buy more or to have the power and sta-
tus of someone who has such purchasing power. Indeed, market socialists
fail to understand the transformation in subjectivity required to construct
a successful socialism. For such a socialist project to succeed workers will
have to develop a sense of their common interests beyond the level of their
workplace, possess a high level of common concern and accept personal
responsibility for political decisions and their consequences. The political
and economic institutions of society need to be restructured in order to help
workers institutionalize and internalize such norms.
Critics of market socialism further suggest that those who advocate mar-
ket socialism suffer from the illusion that the market is an inescapable part of
modern economic reality. They have naturalized the market in their minds.
Like consumers and producers in market society, they can conceive of no
other way of producing and distributing goods in an efficient way. As we
have noted they see market exchange as the most efficient form of economic
transfer. Indeed, based on neoclassical economic principles markets have
been presumed to be costless mechanisms.
Yet the costs and disadvantages of such exchanges are far from negli-
gible. They involve all the so-called transfer costs in a wide range of areas
such as accounting, advertising, wholesale and retail trade, credit-rating,
banking, capital markets, insurance, regulation and legal and judicial enforce-
ment. Such transaction costs, which historically have inexorably expanded
upwards, already totalled more than fifty percent of the American GNP in
1970. The introduction of the internet has improved productivity in many
areas of the economy and especially in the provision of services, but it is still
the case that these indispensable services are provided within sectors with
lagging productivity. As such they constitute a permanent drag on economic
output as well as profitability. The creation of giant capitalist corporations
that minimized exposure to the market were a way of minimizing such costs
(Tan 2005: 28–9, 51).
Advocates of the market stress the efficiency of markets. In the market
individual buyers and sellers seek one another out in order to effectuate
transactions in a way that is most economic and unencumbered for both.
What is ignored is the potential cost to third parties, often society as a whole,
that has to pay the ecological cost of pollution and the health cost of dan-
gerous or hazardous products. Market pricing ignores the social cost of
using petroleum as against wind or hydo-electric power. Such detrimental
cost-shifting is a fundamental feature of market behaviour that is becom-
ing increasingly insupportable. Moreover, the individualistic orientation of
market demand often leads to neglect of the fact that much of demand – for
health care, child care, care for the elderly, education, clean air and water – is
essentially social in nature. In a market-orientated society such social needs
are at best afterthoughts. Far from markets promoting technological innova-
tion, the operation of such markets with their tendencies towards secrecy,
litigation, monopoly and rent-seeking actually inhibits innovation and the
dissemination of knowledge.
The information problem

The so-called information problem proved to be an insuperable obstacle in
Soviet-style economies. The bottom communicated poorly with the top of
that economy making it difficult to acquire the economic data necessary to
plan and coordinate production and consumption. The central planners had
great difficulty gathering accurate information from the grassroots as the rela-
tions between top and bottom were antagonistic. It is true that part of the
problem was technical. In Eastern European socialist countries there were
ineffective methods of data collection. These defects could be remedied by
merely technical means like the more intensive and pervasive use of com-
puters and the internet. A more serious impediment to effective planning
was the fact that a systemic divergence of interests between the centralized
bureaucracy and production units led the latter withholding accurate infor-
mation. Current advocates of planning insist that these difficulties could be
overcome in a socialist order in which democratic planning was a funda-
mental principle. Under such circumstances there would exist an economic
incentive for units of local production and distribution to provide accurate
information to planners.
In contrast advocates of the market, including market socialists, insist
that the demand and supply signals provided by individual consumers and
producers in the market provide accurate information to which markets
respond. But those who champion the market, including those advocating
market socialism, ignore the fact that markets have a severe information
problem of their own. The reality is that the market also provides less than
perfect information to individual consumers or firms. The difficulty if not
the impossibility of acquiring accurate information about the future eco-
nomic decisions of individual suppliers or consumers makes it very difficult
for actors to act rationally over the long term in the market. The absence of
such effective future markets and therefore sense of future costs cripple the
efficient allocation of resources. As a result, the failure of effective invest-
ment decisions constitutes an Achilles heel of market-driven economies
reflected in wasteful over-capacity and market gluts. In existing capitalism it
is not clear that either capitalists or managers are rational actors in so far as
making choices that would most benefit the long-term development of their
business (Stiglitz 1994).
The problem is simply carried over and perpetuated within market social-
ism. It was Hayek who posed the information problem as an insuperable
difficulty in a planned economy. But in fact that problem is compounded
in markets where successful prediction and rational investment decisions are
virtually impossible based on the choices of isolated individual entrepreneurs
equipped with imperfect information to say the least. Planning represents a
better option allowing more or less effective control of the future rather than
depending on market choices that are essentially hit-and-miss affairs.
Indeed, recent patterns of behaviour in the existing global economy
suggests an obsession with short-term private interest at the expense of
long-term investment. The ongoing uncertainty and growing competition
in the global marketplace makes it risky to make productive investments
based on the long term. In actuality there appears to be a clear relation-
ship between the increasingly laissez-faire economy under neoliberalism and
ongoing stagnation in investment in fixed capital. Over the last sixty years
regulated economies seem to have worked better than those that are entirely
dominated by the play of the market. States that were the most interven-
tionist in the capitalist world appear to have been the best performers in the
recent past. In highly successful state-directed private property regimes such
as Japan and South Korea major investment decisions were made by the state
rather than the private sector. Assuming a coordinating function, the state
fixed the tax rates, tariffs and levels of credit to support certain industries as
against others. The interventionist state acted based on economic informa-
tion about the behaviour of the global economy and technology that was
mostly readily obtained by governments rather than private firms.
Taken together with the social inequality, economic crises and neglect of
the environment the market must be regarded as a less than perfect mecha-
nism for distributing goods. Those socialists who insist on the continued
necessity of the market based on the need for efficiency fail to consider the
possibility that the collective learning of socialist and non-alienated producer
and consumer bodies might ultimately prove to be an equally efficient or
more efficient means of carrying out exchanges.
The general intellect

We been discussing what a socialist economy might look like. But it is nec-
essary to come to grips with the fact that the transition to socialism will
necessitate revolutionary change. The evolution of bourgeois democracy
into socialist democracy or the agenda of social democracy has demonstrably
failed. So too has the back-up idea of these same social democrats, to wit,
that capitalism could be made fairer.
Revolution that could challenge the existence of capitalism has to be put
back on the agenda. On the other hand, can we also bring Leninism back?
By Leninism I mean in the first place placing the question of revolutionary
political change on a world scale at the core of discussion. Such a discussion
requires viewing world revolution not as the product of a predetermined
scheme, but the outcome of a strategy, organization and political will that
would be adequate to ensure working class victory in the class struggle on
a global scale. And tactically it means an awareness of the uneven character
of capitalist development and focusing on the vulnerable points or weak-
est links in the capitalist system while organizing a political attack on such
weak points. In Lenin’s time this meant viewing the Russian Revolution as
a catalyst of world revolution, organizing a political party sufficient to the
task, creating a new Communist International that could bring about world
revolution and understanding the anti-colonial struggle as an intrinsic part of
the global revolution.
The question of how Leninism could apply to the contemporary world
was bruited in a collection of essays entitled Lenin Reloaded (Budgen,
Kouvelakis and Žižek 2007). Among the most intriguing pieces in this col-
lection was one by a well-known critic of Lenin, Antonio Negri (Negri
2007). Negri became well known as a radical anti-Leninist who contended
that it was possible for the working class, or rather the ‘multitude’, to over-
throw the capitalist system without overcoming the bourgeois state, without
a revolutionary party and without the support of organized labour.
Negri begins his essay by acknowledging that Lenin’s project looked
towards doing away with the state although he notes it resulted in the very
opposite. Despite the unfortunate way things turned out Negri is forced
to concede that we must once again return to Lenin’s project, which was
a political one, and that an effective revolutionary project must in the end
take a political form. But Negri insists it must be understood as biopolitical,
i.e. involving every aspect of life. Lenin’s aim was the victory of the political
will of the proletariat in which body and reason, life and passion, rebellion
and design constitute themselves as a biopolitical subject with the vanguard
of the proletariat as its soul.
Having conceded this much to Lenin Negri then mistakenly argues that
the relations of production in contemporary capitalism have changed utterly
since the time of Lenin. He claims that the development of so-called imma-
terial labour means that the material production and the ensuing relations
of production in the capitalism of Lenin’s time are irrelevant to political
organization today.
That is not the case. Factory production remains important in the First
World and is increasingly significant in the Global South. The factory or
material proletariat and industrial trade unionism continue to be important to
the political struggle of the working class. At the same time, as Negri points
out, there have emerged new and advanced forms of commodity production
in the form of so-called knowledge industries including universities. Negri
is also right to note that industry is enmeshed in and dependent on as never
before local, national and international institutions and networks including
those in the public sector. Negri is correct furthermore to conclude that
changing conditions of the capitalist organization of production require new
forms of political organization. This latter point was fully understood by
Lenin whose outlook was supremely political. Indeed, the original creation
of the Bolshevik Party and the Communist International were themselves in
their time a fresh response to the development of mass production, monopoly
capitalism and imperialism.
But the really original part of Negri’s argument has to do with his discus-
sion of Marx’s concept of the general intellect. It is this concept that Negri
uses to characterize all of the changes that have taken place in the forces of
production in recent history while underlining their revolutionary potential.
As described by Marx in his famous chapter on machines in the Grundrisse
the general intellect is a combination of the accumulated technical and social
knowledge that develops under the control of industrial capitalism. But tak-
ing his cue from Marx Negri underlines the explosive contradictions latent
within the general intellect. Contained within it are all the vital forces of
production and reproduction that are implicit within the biopolitical matrix
of current capitalist society. This includes the struggle against wage labour
and the demand for leisure and non-work that are inimical to capitalism and
are in struggle against it. In other words, the general intellect includes the
sum total of the forces of production engendered by capitalism but also in
contradiction with the existing relations of production. These changes add
up to a major conflict between the forces of production and the existing cap-
italist relations of production. It is this contradiction that constitutes the most
important factor behind the movement towards world revolution today.
An instance of this contradiction is to be found in the contemporary
university, which is at once an impressive achievement of capitalist society
and at the same time is today crippled in the production and dissemination
of knowledge by its corporate form, bureaucratic administration and the
demands of its capitalist patrons. Another example is the medical system,
which is under the thrall of a bureaucratized and professional elite dominated
by the drug companies. The latter block the full application of the vast accu-
mulation of medical and social knowledge that could ameliorate illness and
disease. In like manner the oil and gas industry and its profit system limits the
possibility of the application of ecological science from resolving the envi-
ronmental problems that threaten humankind. The forces of production that
comprise the general intellect constitute a prime revolutionary contradiction
to the relations of production of capitalism which today threaten to burst the
system asunder. The more so as awareness or consciousness of this contradic-
tion is growing not merely among elites but in the mass of the population.
The return of Lenin

In Negri’s eyes then the general intellect is a subversive force but the form of
the struggle that it will take in an effort to free itself from capitalist control is
uncertain and will be determined by the development of the struggle itself. It
is at this point that Negri falls back on Lenin in declaring that such a struggle
must assume a political form that is not yet clear but which respects the lib-
erating potential of the general intellect. Leninist the struggle may be, but its
form must conform to the goal of realizing the potential of the general intel-
lect if it is to be liberatory. As such it is the liberation of the general intellect
by its appropriation by the proletariat which is both the means and the goal
of world revolution. Negri also underscores the importance of identifying
the weak links where a breakthrough of the general intellect is possible in
accord with Lenin’s dictums.
Negri’s conception of revolution is global, as was Lenin’s. The latter saw
Russia as the denotator of a global revolution focused on Germany, which
was the command point of European capitalism. He also pointed to the rev-
olutionary potential of the colonized countries as strategic sites from which
capitalism could be undermined. We argue that today it is the United States,
in the era of Trump, that is the great epicentre of capitalism and is now the
most vulnerable point for a revolutionary breakthrough or at least a political
breakdown that could open the way for major change elsewhere.
But at the core of Leninism is the concept of the party organized on
democratic centralist lines and constituting the brains and the nervous system
of revolution. Without such a body it is difficult to see how the overthrow of
the bourgeois state and capitalist relations of production would be possible.
Such a party needs to be capable of effective action against capitalist institu-
tions including the police and military. Negri makes a bow in this direction
although, as we have noted, he insists that the revolutionary movement of
the general intellect will develop a new and original form of organization
in order to bring about revolution. This is an important point. The party
needs to assume a form that will prevent it from becoming a closed sectar-
ian organization and that will be capable of instituting the general intellect
instead of becoming a post-revolutionary bureaucratic machine. At the same

time the party must be organized enough to overthrow capitalism.
Marta Harnecker has reaffirmed the need for revolutionary leadership
based on the experience of the Latin American left. While her experience has
largely been with the left in Latin America, her analysis is extremely impor-
tant to the left in both developed and under-developed countries. Harnecker
reaffirms the need for a mass party of the left with the organizational capacity
to unite social movements and carry through a socialist transformation. On
the other hand, she has underlined the importance of the link between the
social practice of workers and the development of class consciousness inde-
pendent of the organized political left.
It is through the struggle for racial equality, indigenous rights or gender
equality by grassroots organizations and social movements that people learn
about oppression in the first instance and then hopefully arrive at a sense of
the need to unify particular struggles with those of others. In other words
social experience and practice can produce a sense of class consciousness in
the mass of the population. That capital is unjust and exploitative is a not
uncommon opinion among workers and others. Marxism is not required to
learn that lesson. But it is Marxists equipped with theory that can reveal to
workers among other things that capital is in fact their own product which
has been turned against them. But Marxists cannot impose such a viewpoint
on others. Like good teachers they must create spaces where those engaged
in particular struggles can access its teachings in order to facilitate their own
practice (Harnecker 2007: 59–63).
Harnecker calls for the creation of a single revolutionary party. Such a
party continues to be necessary to help to organize and carry through a revo-
lutionary project. But such a party should be only a distant relation to the
Marxist-Leninist parties of the Third International. The strength of such a
party should not be assessed in terms of its numbers or by its internal activi-
ties but by its influence in society. Most of the time of members should be
spent not on internal party affairs but on forging links between the party and
society. Intra-party meetings and business should be reduced to a minimum.
Rather the political education of members should be given priority in so far
as inner party activities are concerned. Democratic elections and decision-
making would be axiomatic operating principles. Self-scrutiny and a critical
attitude towards the work and leadership of the party should be ongoing. All
significant decisions should be based on plebiscites of the whole membership.
Different currents of opinion would be taken for granted within the party
but the formation of closed factions would not be allowed. The members of
this new party would be different from old leftist parties in that they would
be able to accept and work with difference. In the old Marxist-Leninist
parties the tendency was always towards homogenizing the social base. In
part this was justified because of the nature and identity of the working class
among which they primarily worked. Today the notion of homogenizing
the social base of the party is an anachronism because of the diversity of social
actors and movements. The emphasis has to be on trying to create unity in
diversity based on respect for cultural, ethnic, gender and other differences
and the respective social movements to which they have given rise. Most of
the time of members of the party should be given over to participating in
these movements and trying to develop their autonomous strength.
Attempts to manipulate and subordinate such movements to the objectives
of the party must be rejected. Opportunities to provide Marxist perspectives
or to help to forge unity between different social movements should be
seized. But it is important for party members to learn from the experience
and ideas of people engaged in daily struggles and not to try to pose as leaders
and know-it-alls. On the contrary, party workers must be exemplary in their
commitment to democratic decision-making within such social movements.
Fully immersed in such movements party members must try to create spaces
for political education, forging common projects between movements and
ultimately try to build a common national project and organizational capac-
ity (Harnecker 2007: 84–91). In the final analysis there must be a common
revolutionary programme in order to develop the political capacity to effect
revolutionary change.
Those who adhere to such a programme should bind themselves to it,
agreeing to act within the boundaries of such a project. But such a project
cannot be the creation of the party substituting its programme for that of
diverse movements of the left. It must emerge in an authentically democratic
way from the deliberations and experience of the constituent social move-
ments. Harnecker’s vision seems to be realizing itself in Venezuela where the
consolidation of the revolution has taken place as a result of the growing role
of mass organizations and rise in popular class consciousness.
Harnecker points to the paradox that membership in left party organiza-
tions worldwide has declined while left sensibility among the mass of the
population has increased. The reasons for this fall-off in political activism are
no doubt complicated. The failure of Soviet Communism, involvement in
social movements, depoliticization, consumerism and individualism as part
of the offensive of neoliberalism all play a part. But political involvement is
in the end indispensable.
Harnecker argues that part of the difficulty getting people to commit to
party membership is the constraints placed on the time of individuals. She
suggests creating different kinds of party membership as a partial answer.
Individuals would participate based on varying levels of activism or with
greater or less participation in party work as against social movement activity.

This would accord with a party that would defer more to the social move-
ments. It would acknowledge the need for party members to have personal
psychological and living space while not abandoning political activism. This
accords with the reality of the greater individuation and diversification that
has taken place in society. It would also amount to a recognition that it is
a movement based on actions of millions rather than the party that should
determine the revolutionary transformation of society.
Paul Le Blanc has put forward a conception of a Leninist political leader-
ship that might be able be able to overthrow the capitalist state and relations
of production while in particular opening the way for the triumph of the
general intellect (Le Blanc 2014). Perhaps it is not the ultimate form that
such an organization will take. Nonetheless it is suggestive of how such a
party might come into being. Le Blanc sees the precondition of a broadly
based and democratic revolutionary party to be a large vanguard layer of
a broadly defined working class that has more knowledge and organizing
experience than the rest of the population. This stratum is at present not
organized in a single party or is not in a party at all but does have a capacity
to educate and organize other workers. It is this group of socialist-minded
and activist people that we can say constitute the organic intellectuals of the
working class charged with ensuring the successful realization of the general
intellect under socialism.
Only through the coordinated efforts of different components of this
broad vanguard layer will it become possible to mobilize tens of thousands,
hundreds of thousands and millions of people in serious challenges to the
capitalist status quo, which should be the primary goal of revolutionaries
today. Mass action coordinated by the broad vanguard layer obviously must
go parallel with – and is inseparable from – efforts to nurture revolution-
ary consciousness within more and more of the working class as a whole.
Various groups and individuals can and should feel free to develop theo-
retical perspectives, share their ideas, disagree with each other, engage in
debates, etc., while continuing to collaborate closely in building the mass
struggles. This is the pathway to revolution.
If one or another segment of this broad vanguard layer, under the ban-
ner of some spurious ‘Leninism’, seeks to dominate the broader effort at the
expense of other segments, the result would be fragmentation and defeat.
On the other hand, Le Blanc’s conception does not preclude the existence
of parties that are Leninist in their organization existing as factions within a
broader revolutionary party.
But it is this broad vanguard element as a whole that in the course of develop-
ment forges a revolutionary party. If something approximating a revolutionary
vanguard party, with good politics and a mass base, can actually be forged by
different currents joining together in the class struggle, then the question is
posed as to how such a formation can hold together and be an effective force
for the advance of the working class and the revolutionary cause. Freedom
of discussion including debate over the principles of such a party should be
axiomatic. On the other hand, once decisions about political action are demo-
cratically arrived at they should be binding on members. The importance of
free discussion and debate lies in that it is the only way that the realization of
the general intellect is possible in the process of dismantling capitalism and the
capitalist state and moving towards socialism. Such a party would, on the one
hand, always define itself in terms of the implementation of the general intellect
and, on the other hand, have the political means for overthrowing capitalism
and creating the institutions of a new democratic and socialist order.
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Elson, Diane, 1988, ‘Market socialism or socialization of the market?’, New Left
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the United States. Chicago: Haymarket Books.
Negri, Antonio, 2007, ‘What to do today with what is to be done, or rather the body
of the general intellect’, in Sebastian Budgen, Stathis Kouvelakis and Slavoj Žižek
(eds.), Lenin Reloaded: Towards a Politics of Truth. Durham, NC: Duke University
Press, pp. 197–207.
Paterson, Matthew, 2007, Automobile Politics: Ecology and Cultural Political Economy. New
York: Cambridge University Press.
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Netherlands: Springer.
Stiglitz, Joseph E., 1994, Whither Socialism? Cambridge, MA: MIT Press.
Tan, Li, 2005, The Paradox of Catching Up: Rethinking State-Led Economic Development.
Basingstoke: MacMillan.
INDEX
absolute exploitation 7–8, 17, 22, 31 Anderson, Spencer 86

absolutism 20–1, 23, 34–5, 40, 44, 48, Anievas, Alexander 46–8
51, 56, 63 anti-Semitism 22
abstract labour 4, 6, 10, 41, 44, 50, Arab Spring 100, 107, 108
59, 127 Argentina 99
accumulation 2, 3–5, 13–14, 15, 19, Aristotle 60
21, 40, 58, 65, 113; America 56; Arrighi, Giovanni 45
cycle 28; silver and gold 37; uneven austerity 76, 80, 85, 88, 90, 93–4, 99
development 44–5; world money Austin, Gareth 67
49–50; world system theory 44, see Austria 21
also primitive accumulation authoritarianism 55, 85, 90, 98, 100,
Africa 17, 42, 43, 58–9, 70, 79–80, 90, 102, 110
101, 102, 109 automobiles 123–4
Agricultural Revolution 30
agriculture 13, 16, 28, 31, 48, 62, 70–1; Babeuf, Gracchus 57
France 36; investment 49; Italy 34; Baccouche, Karim 19
merchant capitalism 17–18; peasantry Bagchi, Amiya Kumar 69, 71
restored 124; productivity 32; Banaji, Jairus 44
sustainable 124; world system theory Baran, Paul 26
43, 44 Basle III reforms 91
Albo, Gregory 80, 123 Bellamy-Foster, John 22–3, 69, 81–2,
Althusser, Louis 64, 69 83, 110, 121
American Revolution 23 bilateralism 90
Amin, Samir 82, 83, 87, 124 Black Death 47–8
Ancien Régime 35, 36, 56–7, 63, 96 Black Lives Matter 100
Andean insurrection 23 Blackburn, Robin 21, 58, 61
Anderson, Fred 23 Blanchard, Ian 49
Anderson, Perry 19 Blanco, Lucien 73
142 Index
Bois, Guy 96 competition 8, 33, 47, 57, 62, 65, 109,

bourgeoisie 15, 18, 19, 20, 21, 23, 29, 113, see also market competition
67–8, 69–70; economists 26; free consequentialism 20
labour 59; French Revolution 35–6, consumer capitalism 3
56–8; Germany 39; revolutions 9 consumerism 74, 100, 123
Braudel, Fernand 45 consumption 1, 13–14, 72, 80, 96–7,
Brazil 55, 59, 89–90, 99 98, 114–15, 122–3, 131
Brenner, Robert 8, 9, 27–36, 40, 42, convertible husbandry 7
47, 51, 52n1 Corbyn, Jeremy 94, 99
BRICS 89–90 core and periphery 43–4
Britain 70; American Revolution 23; Corn Laws 62
Brexit 94, 99, see also England credit system 66, 82, 90–2
Brown, Kendall W. 41 crisis theory 26–7, 29–30
Bryer, R. A. 14 Cuba 55, 59, 70, 75
Budgen, Sebastian 133
built environment 122–4 Dalin, Viktor M. 57
Bukharin, Nikolai 26, 71 Danos, Jacques 73
Burkett, Paul 118 Das Kapital vii, 26
Davidson, Neil 20
Caligaris, G. 4 de-industrialization 105
Capital 60, 64–6, 76n1 democracy, workplace 116–17
capital accumulation see accumulation democratization 60
Castile 18 Denmark 18, 63, 79
Catholicism 19, 20, 36, 38–9 Descartes, René 20
Le Chapelier Law 57 dialectical viewpoint 28–9, 34, 41–2,
Chile 79 51, 96
China 2, 10, 17, 18, 34, 46, 71, 73, Diamond, Marie J. 57
120, 129; BRICS 89–90; capitalist Dimmock, Spencer 14
development 113; Empire 70; direct foreign investment 89
finance globalization 82; GDP 89; Dobb, Maurice vii, 27–8, 29
investment capital 45; semi-colony Dolan, Kerry A. 83
70; Silk Road 89; silverization 41; Drescher, Seymour 16, 59
Taiping Rebellion 67 Dutch Revolt 20–1, 47
Christianity 19, 67
circulation of commodities 4, 16, 28–9, eBay 126
50, 118 eco-socialism 122, 124
Clark, Brett 69 economic crisis vi, vii, 9, 66, 72, 82, 84,
Clinton, Bill 110 86–8, 90–8, 108–10
Clinton, Hilary 112 economic depression vii, 3, 9, 27, 54–5,
Coates, Ken S. 22 68–9, 71–3, 75, 86–7, 88, 95–6, 108
Cohan, William D. 91 economic growth 2, 19, 51, 55, 74,
Colatrella, Steven 83 86–7, 93, 98, 113, 117, 120–1
Cold War 54, 56 economic instability 86–7
collective labour see social (collective) economic rents 30, 31, 34
labour economy, socialist 115–16
colonialism 3, 19, 21–2, 23, 29–30, 42, efficiency 7, 30, 58, 62, 81, 124–6,
48, 58, 70–1, 133 130–2
combined development 46 Election Reform Act 62
Communist International 55 electronic marketplaces 126–7
Communist League 64 Elliott, Larry 95
The Communist Manifesto 55, 63 Elson, Diane 125–6, 128
Index 143
Engelber, Ernst 40 free markets 68, 80–1, 84, 93

Engels, Friedrich 30, 38, 39–40, 55, free trade 80, 90, 124
63, 116 French Revolution 2, 3, 16, 21, 23,
England 8–9, 16, 17, 18–19, 20, 21, 35–6, 39–40, 54, 55, 56–8, 62, 63,
29, 30, 31–5, 37, 46–8, 49, 51, 75; 107, 112
Industrial Revolution 60, 61–3,
67; merchant capitalism 18, see also Galambos, L. vii
Britain Gallagher, Kevin P. 86
English Civil War 20, 21, 33 gender 75–6, 136; division of labour
Enlightenment 12, 36 19; exploitation of women 69;
environment 114, 124; ecological feminism 57; French Revolution 57;
damage 22–3; neoliberalism 98 proletariat 106; women’s rights 73
environmentalism 117–20 general intellect 116, 132–6, 138, 139
equality 60, 64, 112–14, 136 German Peasants’ War 20, 38–40
Eurocentrism 8, 28, 40, 45–6 Germany 9, 18, 33–4, 36–40, 42,
European Central Bank 99 51, 55, 73; passive revolution 20;
European Union 97, 99 unification 68; US rivalry 89; world
exchange-based model 27 wars 72
exchange value 3, 4, 10, 30, 102 Gibelin, Marcel 73
exploitation 2, 5, 6–8, 12, 13–14, 21, Gindin, Sam 91
43, 56; absolute 7–8, 17, 22, 31; Giraldez, Arturo 41
merchant capitalism 17; relative 7–8, global market 8
17, 22, 30–1; uneven development Global South 2, 6, 42, 45, 54–6, 69–70,
21; women workers 69, see also 73–6, 107; factory production 134;
slavery industrial capitalism 106; merchant
capitalism 17; neoliberalism 79–80,
family 18–20, 57, 67, 69, 75–6, 121–3 86–7, 89; uneven development 17
fascism 55, 72–3, 94, 111 globalization 48, 56, 81–3, 113
feminism 57 gold and silver 16, 29, 37, 40–1, 48–50, 68
Ferguson, Moira 57 Goldthwaite, Richard 45
feudalism vii, 8–9, 12, 13–14, Gouges, Olympe des 57
17–19, 23, 29, 32–5, 41–2, 46–8, Gramsci, Antonio 55, 65, 69–70, 101
51, 70, 96; demise 27; French Greece 2, 63, 99
Revolution 56–7, 107; Germany gross domestic product (GDP) 89, 92,
37–40; merchant capitalism 18; 102, 106, 109, 114, 130
refeudalization 21, 42; revolution Grundrisse 30, 134
20–1; Thirty Years’ War 20 Guilhaumou, Jacques 57
finance capital 49, 66, 68, 81
finance globalization 81–3 Haitian Revolution 55, 58, 59
First International 61, 64 Hapsburg Empire 17, 47
Flynn, Dennis O. 16 Harman, Chris 32
Foner, Eric 59 Harnecker, Marta 136–7
food riots 23, 63 Harvey, David 44–5, 84
Fordism 9, 74 Hayek, Frederick 126
France 9, 18–19, 20, 21, 33–5, 51, 70, Heilbronn Manifesto 39
73; Ancien Régime 35, 36, 56–7, 63, Henri IV, King 36
96; class conflict 23; industrialization Hilferding, Rudolf 26
67; neoliberalism 99; Paris Hilton, Rodney H. vii, 14, 27
Commune 66–7; peasants 96, see also Hipler, Wendel 39
French Revolution historical materialism 55, 63–4
free labour 6, 15–16, 43, 59–61 Hobsbawm, Eric 41–2, 63, 67, 68, 71, 72
144 Index
Holland 8–9, 16, 17, 18, 19, 20, 21, 29, Lapied, Martine 57
33–4, 37, 46–8, 49, 51 late capitalism 3
housing market 88 Latin America 8, 17, 21, 40, 42, 43, 58,
humanism 20 60, 70, 79–80, 90, 101, 109, 136
Hung Hsiu Chuan 67 law of value 7–8, 10, 30–1, 52, 58, 65,
Hungary 37, 42, 63, 68, 129 117, 127
hunting and gathering mode 17, 21, 22, Le Blanc, Paul 138
70, 117 Lefebvre, Georges 27
Lemarchand, Guy 21
Iceland 90 Lenin, Vladimir I. vii, 26, 71, 82,
imperialism viii, 3, 9, 11, 22, 26–7, 108–9, 133, 134–9
38–9, 45–6, 54–5, 65, 68–71, 73, 76, Levine, Bruce C. 59
89–90, 108–9 Levy, David M. 117
India 2, 17, 18, 67, 71, 89–90 Lewin, Moshe 72
industrial capitalism 3, 58, 106 Lincoln, Abraham 61
Industrial Revolution 3, 7, 12, 55, 60, Losurdo, Domenico 105
61–3, 67, 114, 120 Luccassen, Jan 15
industrialization 48, 54, 57–8, 61–3, 67, Lutheran 38–9, 40
105–6 Luxemburg, Rosa 26, 71
inflation 49, 75
information problem 131–2 Malthusianism 48, 120, 121
information sharing 126 Manning, Patrick 16
infrastructure 106, 122 market competition 28, 117, 118,
interest rates 49, 92–3, 95 128, 132
International Labour Organisation market exchange 59, 81, 121, 125, 130
(ILO) 86 market rationality 31, 32
internet 116, 126, 130, 131 market socialism 125–31
Italy 33–4, 36, 37, 42, 55, 63, 67, 73, 75; marriage 19–20
economic crisis 92; referendum 94 Mazoyer, Marcel 124
medical system 134–5
Japan 8–9, 51, 54, 55, 68, 72, 73, 74, Mendieta-Muñoz, Ivan 82
89, 97, 109, 120; industrialization 67; merchant capitalism 3, 11–25, 58, 62
passive revolution 20 Meszaros, Istvan 118–19
Jim Crow laws 22 methodological individualism 28
Middle Ages 1, 29, 32, 39, 49–50, 96
Keynes, J. M. vii Middle East 1, 17, 18, 70, 90, 99,
knowledge capitalism 106, 134 100–1, 102, 107, 109
Kotz, David M. 88, 91 military spending 89, 93, 111
Kouvelakis, Stathis 133 mining 37, 41
Kovel, Joel 119 Mirowski, Philip 81
Kroll, Luisa 83 mode of production viii, 2–3, 11,
12–14, 17–18, 22, 23, 31, 45–6;
labour market 80, 125, 126–8 French Revolution 56–7; hunting
labour theory of value 4 and gathering mode 17, 21, 22, 70,
land 3, 7, 29, 71, 121; control 1–2, 117; tributary mode 14, 17, 21,
14–15, 19, 34–6; redistribution 57–8, 46–7, 70
see also agriculture Mongol Empire 47
landlords 1, 13–15, 28, 39, 63, 67; monopoly capitalism 3, 9, 56, 68–71,
domination 17–19; French peasantry 73, 76, 81–2, 83
96; role 31–2 Moody, Kim 105–6
Lapavitsas, Costas 82 Moore, Jason 22
Index 145
Morris, Thomas D. 16 Post, Charles 58

Moseley, Fred 95 Prashad, Vijay 73
Moss, Bernard H. 63 Price, Roger 63
Mullen, A. 85 primitive accumulation vii, 3, 8, 14–15,
Münzer, Thomas 39 18–19, 21, 26–7, 31, 34, 36, 52, 58
private financial system 90–2
nation-state 67–8 privatization of learning 85
necessary labour 5, 7, 65, 118 production 28–9, 65; French
Negri, Antonio 133–4, 135 Revolution 56–7; relations of
neoliberalism 3, 9, 56, 70, 76, 79–104, 105 43–4; slavery 60, see also mode of
Neveux, Hugues 23 production
Newton, Isaac 20 productivism 114
Nichols, Jean 23 productivity 5, 7, 9, 75; agriculture 32;
Nisancioglu, Kerem 46–8 merchant capitalism 18; neoliberalism
Norfield, Tony 83, 89 86–7
profit 30, 75; market socialism 127–8;
Obama, Barack 110 neoliberalism 84–5, 87, 91, 95–6;
Occupy Movement 100 realization 28–9; world money
O’Connor, Sarah 86 49–50
O’Flynn, Dennis 41 proletarianization 20, 42, 58
oil embargo 75 Promethean view 119
Ottoman Empire 17, 46–8, 70 property relations, social 28, 29–30, 32
protectionism 90, 97
Panama 70 Protestantism 19, 20, 36
Panitch, Leo 91 Prussia 21
pantheism 39 pseudo-scientific racism 22
Paterson, Matthew 123 public debt 84, 93, 95
Patriot Act 100 public transport 123, 124
Pax Mongolica 47 Puerto Rico 70
Paxton, Robert O. 72 Puritanism 33
Peart, Sandra J. 117 putting-out system 7
peasants 1–2, 9, 13–15, 17, 19–20, 28,
31–2; France 34–6; German Peasants’ quantitative easing 94
War 20, 38–40; revolts 20, 29, 31
Persian Empire 70 racism: pseudo-scientific 22; slavery
Petreman, Cherly 19 59, 60
Petty, William 3 radical party 39
physiocratic school 3 rate of return 95
police forces 84–5, 110 rationality of markets see market
Polisensky, Josef 21 rationality
political economy: BRICS 90; capitalist redistribution of wealth 1, 102, 112, 114
transition 26–53 refeudalization 21, 42
Political Marxism 27, 40, 50–1 Reformation 2, 38, 40
political parties, formation 6 relative exploitation 7–8, 17, 22, 30–1
pollution 62–3, 87, 114, 122, 123 religion 19–20, 31–2, 33, 38–9;
Pomeranz, Keith 16, 48 revolution 20, 38
Pontiac’s Revolt 23 Renaissance 2, 12
Popular Front 73 revisionism 35
population growth 121–2 revolution 8–9, 20–1, 23, 29, 31, 33,
Porzecanski, Roberto 86 48, 55, 63–4, 105–9, 111–13, 120,
positivism 28 132–3; Agricultural Revolution 30;
146 Index
American Revolution 23; Haitian Stalin, Joseph 72, 129

Revolution 55, 58, 59; Negri 135; standard of living 58, 74, 80, 89, 99,
Russian Revolution 2, 55, 133; 113–14, 121
Taiping Rebellion 67, see also French Stannard, David E. 22
Revolution; Industrial Revolution Starosta, G. 4
revolutionary party 135–9 state: and capitalism 18–19; free
Ricardo, David 3 markets 80; global ruling class 83–5;
Roberts, Michael 68, 72, 86, 87, 95 population growth 122; religion 19,
Roman Empire 1, 12, 18, 37, 39 see also nation-state
Roubdart, Laurence 124 Streeck, Wolfgang 80, 84, 90, 101
Russia 17, 21, 54, 70, 71–2; BRICS strikes 5, 23, 63
89–90; Empire 70; Silk Road 89, structural adjustment 79
see also Soviet Union Stuart dynasty 32–3
Russian Revolution 2, 55, 133 subsistence, means 4
suburbanization 123
Schiappa, Jean-Marc 57 Sugohara, Kaori 67
Schmitt, Carl 30 surplus value 5, 7, 8, 9–10, 13, 15, 16,
Schuessler, J. vi 21–2, 52, 65, 127–8; distribution 30;
Scientific Revolution 20, 22 slavery 58, 59–60; Theories of Surplus
sea lanes 37 Value 26; world money 49; world
Secombe, Wally 20 system theory 43–4
serfdom 6, 8, 14, 16, 17, 39, 59 surveillance 85, 100
sexuality 19–20 Sweden 18
shadow prices 127 Sweezy, Paul 26, 27
Siemann, Wolfram 63 switching crisis 45
Silk Road 47, 89
slavery 6, 8, 16, 17, 21–2, 30, 48, Taiping Rebellion 67
58–61, 62; abolition 59–61; Haitian Tan, Li 130
Revolution 55 tax revenue 84, 93
Smith, Adam 3, 30 temporary workers 86
Smith, Bonnie G. 68 Ten Hours Act 62
Smith, John 83, 87, 89 terrorism 100
social class 1; children 19; class war Thatcher, Margaret 79, 80
5–6; conflict 27, 29, 30–3, 37–8; Theories of Surplus Value 26
consumption 13–14; early modern Third World 86
state 18–19; France 23; global Thirty Years’ War 20
struggle 75–6; revolution 21, see also Thomas, Peter D. 70
bourgeoisie; peasants Thompson, E. P. 62
social (collective) labour 4 Tilly, Charles 15, 63
social inequality 1–3, 12–13, 16 Tomich, Dale W. 59
socialist calculation debate 117 Topik, Steven 16
Sourisseau, Jean-Michel 124 trans-national corporations 82
South Africa 89–90 transfer costs 130
Soviet Union 34, 73, 76; centralized transition debate, political economy
economy 126, see also Russia 26–53
Spain 20–1, 48, 70, 99; civil war 73; tributary mode 14, 17, 21, 46–7, 70
colonialism 23; economic crisis 92; Trotsky, 26, 46
Indignados Movement 100 Trump, Donald 94, 97, 102, 110–12, 135
spatial fix 44, 45 Tudor dynasty 32–3
Spinoza, Baruch 20 Tunisia 107
Index 147
Túpac Amaru II 23 Venezuela 70, 137

Tutino, John 41 Vidal, Matthew 74
Vietnam 75; War 111–12
unemployment 20, 92, 110, 127 Vögler, Günter 40
uneven development 17, 21, 26, 41–2,
43, 44–5, 46, 109 Wacquant, Loic J. D. 84
unification of markets 21 wage labour 2, 4, 6–7, 12–14, 15, 19,
unionization 55, 61 23, 30, 32, 34, 41, 43–4, 49, 58,
United States vii, viii, 9–10, 55–6, 87, 97
75, 110–12, 129, 135; American Waite, Gary K. 19
Revolution 23; Black Lives Matter Walker, Charles F. 23
100; Civil War 60–1; economic Wallerstein, Immanuel 42–4
crisis 72–3; finance globalization 82; Wars of the Roses 39
German rivalry 89; housing market 88; Weiner, Amir 73
industrialization 67; investment capital White, Theodore W. 22
45; militarism 109; neoliberalism 76, witch hunts 19, 20
80, 84–5, 94, 97; protectionism 90, Wolf, Eric R. 21
97; protectorates 70; silver and gold Wollstonecraft, Mary 57
37; slavery 59, 60; terrorism 100; working day, extension 7
unification 68; world wars 73–4 world economy 42
universities 85, 134 world market 16
unpaid labour 19 world money 16, 29, 37, 40–1, 48–52
urban villages 123 world system theory 42–4
use value 3, 4, 6, 10, 102, 107, 117–19 world trade 21
World wars vii, 54–5, 71–4
value 3–10, 15–16; Aristotle 60; Wu Chengming 41
exchange 3, 4, 10, 30, 102; labour
theory 4; law of 7–8, 10, 30–1, 52, Xi Jinping 129
58, 65, 117, 127; use 3, 4, 6, 10, 102, Xu Dixin 41
107, 117–19; world money 49, see
also surplus value Žižek, Slavoj 133

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A MARXIST HISTORY OF

Henry Heller’s short account of the history of capitalism combines Marx’s

Henry Heller is Professor of History at the University of Manitoba, Canada.

ISBN: 978-1-138-49045-1 (hbk)

2 The political economy of capitalist transition 26

3 Ascendant capitalism (1789–1980) 54

5 Towards socialism 105

Conference in Baltimore, Lou Galambos of Johns Hopkins pointed to the

Marx’s concept of modes of production that views capitalism as merely a

We assume that getting to socialism is likely to be messy and that historical

slow accretion of capital and in which colonialism played an integral part;

The accumulation of capital

Theorizing about an increasingly mature capitalist economy Karl Marx

The rise of the working class

insurance. Finally workers began to form and participate in political parties

The working class now

Wage labour, slavery and serfdom

Absolute and relative exploitation

Capitalism and revolution

of capital. The existing social relations of production stood in the way.

The current crisis

the politicians who control liberal democracies, a reluctance or unwillingness

Whereas earlier capitalism had been able to overcome repeated and

Consumption versus accumulation

under slavery or by extorting rent to access means of production as landlords

Late medieval crisis

by wealthy peasants and landlords or sixteenth-century class war from above

The world market

Merchant capitalism (1500–1760)

employers or bourgeoisie came about as a result of the latter’s establishing

State and capitalism

state was in fact a reorganized system of landlord domination, which made it

Religion, sexuality and family

of the family. The gradual proletarianization of the population broke this

Early modern revolutions

sixteenth century against Spanish absolutism became linked to the English

of products from overseas by manufacturing and the sale of manufactures

The previous chapter is a faithful account of the historical origins of

The historical origins of capitalism have been intensively analyzed by

The positivism of Brenner

or market-based rational rents on tenants. It was these economic rents which

However, such developments were ongoing over an extended and indeter-

continent helped to undermine the ideological institutions of feudalism. The

tended to favour capitalism more than monarchies on in Europe but at

in England. As a result of the greater share of property retained by the French

to the rest of the world. Italian capitalism continued to be significant until

and growing attempts to impose or re-impose serfdom on the peasantry,

split into two clearly opposed camps. In a deeply divided sixteenth-century

It is important to make clear in the first place that the development of

Wallerstein may have de-centered proletarian or wage labour, but only

the periphery developed in tandem with development in the core based on

exhausted their profit potential and the relocation of productive investment

worldwide by the rule of finance capital. Speculation threatens the possibility

Capitalism reached its zenith in the nineteenth and twentieth centuries.

Socialist revolutions in Russia and China no doubt narrowed the field of

The French Revolution

and feudalism was subordinated to it. The Revolution cannot be understood

slowed the process of proletarianization and the development of large-scale

fuelled slave-raiding and an immense expansion of the slave trade in the

When an oligarchy of 300,000 slaveholders dared to inscribe, for the

Free labour under capitalism it is important to reiterate marked a real advance

The Industrial Revolution and the making of

through collective action. Passage of successive Factory Acts and in particular