The Brenner debate revisited

THE BRENNER DEBATE EXPLAINED 

 The Brenner Debate The agricultural revolution Sixteenth- and seventeenth-century England witnessed an agricultural revolution which involved massive changes in land tenure, the organization of production on farms, the techniques employed in farming, and the productivity of agriculture. Thus the sixteenth century represented a sharp change in English rural life: the emergence of the capitalist farm in place of small-scale peasant cultivation, the intensification of market relations, increase in population, and eventual breakthrough to capitalist development in town and country. The social consequences of this revolution were massive as well: smallholding peasant farming gave way to larger capitalist farms; hundreds of thousands of displaced peasants were rapidly plunged into conditions of day labor, first in farming and then in manufacture in towns and cities; higher farm productivity permitted more rapid urbanization and the growth of an urban, commercialized economy; and higher real incomes provided higher levels of demand for finished goods which stimulated industrial development. Thus the agricultural revolution was the necessary prelude to the industrial revolution in England. [1] “It was the growth of agricultural productivity, rooted in the transformation of agrarian class or property relations, which allowed the English economy to embark upon a path of development foreclosed to its Continental neighbours. This path was distinguished by continuing industrialization and overall economic growth through the period when `general crisis' gripped the other European economies” (Brenner 1982:110). It was indeed, in the last analysis, an agricultural revolution, based on the emergence of capitalist class relations in the countryside which made it possible for England to become the first nation to experience industrialization [through higher levels of grain productivity and higher income to stimulate demand for industrial goods]. (Brenner 1976:68) This process poses at least two problems for historical explanation. First is an historical question: why did breakthrough occur in England in the sixteenth century and not the fifteenth or the nineteenth? And the second is geographic: why did this process of agricultural development occur in England but not on the Continent? In particular, why did agrarian life in the French countryside remain relatively unchanged throughout this period? And why did eastern Europe slide into a “second feudalism”? [2] A variety of explanations have been advanced for these developments. Some economic historians (e.g., M. M. Postan and Emmanuel Le Roy Ladurie) have maintained that the cause of this process of change was an autonomous increase in either population or commerce or both. Robert Brenner argues, however, that these explanations are inadequate, since these large-scale factors affected the whole of Western Europe, while capitalist breakthrough occurred only in Britain. Brenner holds that the determining factor is the particular character of social-property relations in different regions of Europe (particularly the conditions of land-tenure and associated forms of surplus extraction), the interests and incentives which these relations impose on the various actors, and the relative power of the classes defined by those relations in particular regions. Brenner's explanation of these developments is thus based on “micro-class analysis” of the agrarian relations of particular regions of Europe. The processes of agricultural modernization unavoidably favored some class interests and harmed others. Capitalist agriculture required larger units of production (farms); the application of larger quantities of capital goods to agriculture; higher levels of education and scientific knowledge; etc. All of this required expropriation of small holders and destruction of traditional communal forms of agrarian relations. Whose interests would be served by these changes? Higher agricultural productivity would result; but the new agrarian relations would be ones which would pump the greater product out of the control of the producer and into elite classes and larger urban concentrations. Consequently, these changes did not favor peasant community interests, in the medium run at least. It is Brenner's view that in those regions of Europe where peasant societies were best able to defend traditional arrangements--favorable rent levels, communal control of land, and patterns of small holding--those arrangements persisted for centuries. In areas where peasants had been substantially deprived of tradition, organization, and power of resistance, capitalist agriculture was able (through an enlightened gentry and budding bourgeoisie) to restructure agrarian relations in the direction of profitable, scientific, rational (capitalist) agriculture. <!--[if lt IE 6]> <![endif]

Saturday, January 2, 2010

The Brenner debate revisited

One of the defining controversies in the field of economic history in the past 35 years is the Brenner debate.  Robert Brenner published "Agrarian Class Structure and Economic Development in Pre-Industrial Europe" in Past and Present in 1976 (link) and "The Agrarian Roots of European Capitalism" in 1982.  In between these publications (and following) there was a rush of substantive responses from leading economic historians, including M. M. Postan and Emmanuel Le Roy Ladurie.  (Many of the most significant articles are collected in Aston and Philpin's The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-industrial Europe.)  Brenner's theories injected important new impetus into the old question: what led to the advent of capitalism?  (Maurice Dobb had stimulated a similar burst of scholarship on this topic with his 1963 Studies In The Development Of Capitalism (link).  Brenner's discussion of the Dobb debate can be found in his essay, "Dobb on the transition from feudalism to capitalism" here.)

The core issue of the debate is large and important: what were the social factors that brought about the major economic transformations of the European economy since the decline of feudalism?  Feudalism was taken to be a stagnant economic system; but in the sixteenth century things began to change.  There was something of an agricultural revolution in England, with technological innovation, changes of cropping systems, and significant increase in land productivity.  There were the beginnings of manufacture, leading eventually to water- and steam-powered machines.  There was a population shift from the countryside to towns and cities.  There was industrial revolution.  (Marx describes much of this process in Capital; here's an earlier post of his concept of "primitive accumulation.")  So what were the large social factors that caused this widespread process of social and economic change?  What propelled these dramatic changes of economic structure?

The great economic historian M. M. Postan offered a simple theory: “Behind most economic trends in the middle ages, above all behind the advancing and retreating land settlement, it is possible to discern the inexorable effects of rising and declining population” (Medieval Economy and Society: An Economic History of Britain in the Middle Ages, p. 72).  Against this view, Brenner writes: "Under different property structures and different balances of power, similar demographic or commercial trends, with their associated patterns of factor prices, presented very different opportunities and dangers and thus evoked disparate responses, with diverse consequences for the economy as a whole. Indeed, . . . under different property structures and balances of class forces . . . precisely the same demographic and commercial trends yielded widely divergent results" (Brenner 1982:16-17).  Key to Brenner's argument is the fact that agricultural change was substantially different in England and France; so he insists that an adequate causal explanation must identify a factor that varies similarly.

From the distance of several decades, the dividing lines of the Brenner debate are pretty clear.  One school of thought (Postan, Ladurie) attempts to explain the economic transformations described here in terms of facts about population, while the other (Brenner's) argues that the central causal factors have to do with social institutions (social-property relations and institutions of political power). The demographic theory focuses its attention on the factors that influenced population growth, including disease; the social institutions theory focuses attention on the institutional framework within which economic actors (lords, peasants, capitalist farmers) pursue their goals.  The one is akin to a biological or ecological theory, emphasizing common and universal demographic forces; the other is a social theory, emphasizing contingency and variation across social space.

A voice that doesn't come into the debate directly but that is highly relevant is that of Douglass North. His book (with Robert Paul Thomas), The Rise of the Western World: A New Economic History, offers a theory of modern economic development that falls within the category of "social institutional theory" rather than demographic theory.  But whereas Brenner finds primary causal importance in the institutions that define local class relations (a Marxian idea), North argues that property relations that create the right kinds of incentives will stimulate rapid economic growth (a Smithian idea). And North finds that this is the innovation that took place in England in the early modern period.  It was the creation of capitalist property relations that stimulated economic growth.

This schematic representation of the strands of argument in the Brenner debate suggests competing causal diagrams:

• population growth => economic activity => sustained economic growth (Postan)
• weak peasant farmers, strong capitalist farmers => enclosure and farming innovations => rapid agricultural growth (Brenner)
• enhanced protections of property rights => incentive for profitable activity => sustained economic growth (North)

But it seems clear in hindsight that these are false dichotomies. We aren't forced to choose: Malthus, Marx, or Smith.  Economic development is not caused by a single dominant factor -- a point that Guy Bois embraces in his essay (Aston and Philpin, 117).  Rather, all these factors were in play in European economic development -- and several others as well.  (For example, Ken Pomeranz introduces the exploitation of the natural resources, energy sources, and forced labor of the Americas in his account of the economic growth of Western Europe (The Great Divergence: China, Europe, and the Making of the Modern World Economy).  And I suppose that it would be possible to make a climate-change argument for this period of change as well.)  Moreover, each large factor (population, prices, property relations) itself is the complex result of a number of great factors -- including the others on the list.  So we shouldn't expect simple causal diagrams of large outcomes like sustained economic growth.

Not all the heat of this debate derives from a polemic between a neo-Marxist theorist and the Malthusians; there is also a significant disagreement between Brenner and another important Marxist economic historian, Guy Bois.  Bois' Crisis of Feudalism appeared in 1976 -- the same year as Brenner's first paper in the debate.  The crisis to which Bois refers is an analogy with a classic Marxist claim about capitalism: where Marx discerned a crisis in capitalism deriving from the falling rate of profit, Bois found a crisis in feudalism deriving from a falling rate of feudal levy.  (Here is an interesting review by Chris Harman of another of Bois' books, The Transformation of the Year One Thousand: The Village of Lournard from Antiquity to Feudalism.)  Bois criticizes Brenner's account for being excessively theory-driven.  He argues that Brenner begins with a commitment to class struggle as a fundamental explanation, and then forces the facts of French and English rural life into this framework.  Better, he argues, to let the complexity of the historical situations emerge through careful evaluation of the evidence.  "Brenner's thought is, in fact, arranged around a single principle: theoretical generalization always precedes direct examination of historical source material" (Aston and Philpin, 110).  And Bois argues that the evidence will suggest that it is the declining feudal levy rather than the capacity for resistance by French peasants that best explains the course of events in France.

In short, one important consequence of the Brenner debate was the renewed focus it placed on the question of social causation.  Brenner and the other participants expended a great deal of effort in developing theories of the causal mechanisms that led to economic change in this period.  And in hindsight, it appears that a lot of the energy in the debates stemmed from the false presupposition that it should be possible to identify a single master factor that explained these large changes in economic development.  But this no longer seems supportable.  Rather, historians are now much more willing to recognize the plurality of causes at work and the geographical differentiation that is inherent in almost every large historical process.  So the advice that Bois extends -- don't let your large theory get in the way of detailed historical research -- appears to be good counsel.

A web-based text for the philosophy of social sciences

• Foundations
• What is a social science?
• Ontological questions
• Social science disciplines
• Some debates about methodology
• Social explanation
• Social cognition
• Agency and collective action
• Identity and culture
• Causal mechanisms
• Structures and processes
• Institutions
• Power
• Materialism
• Historical explanation
• China

A WEB-BASED RESOURCE
The philosophy of social sciences raises a series of foundational questions having to do with how we can arrive at empirically and theoretically supported understandings of social and individual behavior. What is involved in explaining social outcomes and patterns? How do agents cause outcomes? What roles do social entities such as structures, organizations, or moral systems play in social causation?
My blog, UnderstandingSociety, addresses a series of topics in the philosophy of social science. What is involved in "understanding society"? The blog is an experiment in writing a book, one idea at a time. In order to provide a bit more coherence for the series of postings, I've organized a series of threads that link together the postings relevant to a particular topic. These can be looked at as virtual "chapters". This list of topics and readings can serve as the core of a semester-long discussion of the difficult philosophical issues that arise in the human sciences. It roughly parallels the topics I cover in the course I teach in the philosophy of social science at the University of Michigan.
Look at this web document as a web-based, dynamic monograph on the philosophy of social science; and look at this list of threads as one possible route through some foundational issues in the philosophy and methodology of social science.

© Daniel Little 2011

--> -->

 

Karl Kautsky

Ultra-imperialism

(September 1914)

---

First published: Karl Kautsky, "Der Imperialismus," Die Neue Zeit, 11 September 1914; 32 (1914), Vol. 2, pp. 908-922.
Copied with thanks from the Website endpage.com.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

---

The article below was complete several weeks before the outbreak of the War. It was intended for out number which was to have greeted the planned Congress of the International. Like so much else this Congress has been brought to nothing by the events of the last days. Yet although purely theoretical in nature, the article has not lost its relevance to the practice which it sought to help explain. We publish the article, with the omission of passages which related to the International Congress and the addition of some considerations on the war. – Editorial Note Die Neue Zeit, September 11th, 1914.
 

We have seen that the undisturbed advance of the process of production presupposes that the different branches of production all produce in the correct proportion. Yet it is also evident that within the capitalist mode of production there is a constant drive towards the violation of this proportion, because within a specific zone the capitalist mode of production tends to develop much more quickly in the industrial than in the agricultural sector. On the one hand, this is an important reason for the periodic crises which constantly grip the industrial sector, and which thereby restore the correct proportion between the different branches of production. On the other hand, the growing ability of capitalist industry to expand constantly increases the pressure to extend the agricultural zone that provides industry not only with foodstuffs and raw materials, but also with customers. Since the importance of the agrarian zones to industry is a dual one, the disproportion between industry and agriculture may also be expressed in two ways. Firstly, the outlets for industrial products in the agrarian zones may not grow so fast as industrial production; this appears as overproduction. Secondly, agriculture may not provide the quantities of foodstuffs and raw materials needed for the rapid growth of industrial production; this takes the form of dearth. These two phenomena may seem mutually exclusive, but in fact they are closely inter-related insofar as they derive from the disproportion between industrial and agricultural production, and not from other causes such as fluctuations in gold output or changes in the power situation of producers vis-à-vis consumers through cartels, commercial policies or fiscal policies.

One of the two phenomena, dearth or overproduction, may easily pass over into the other, because they both derive from the disproportion in question. An increase in prices always foreshadows the beginning of a crisis, although this emerges as over-production and brings with it a price collapse. On the other hand, the constant drive of the industrialized capitalist countries to extend the agricultural zones involved in trade relations with them, takes the most varied forms. Given that this drive is one of the very conditions of the existence of capitalism, it is still far from proven that any one of these forms is an indispensable necessity for the capitalist mode of production.
 

From Free Trade to Imperialism

One particular form of this tendency is imperialism. Another form preceded it: free trade. Half a century ago, free trade was seen as the last word of capitalism, just as imperialism is today. Free trade came to dominate because of the superiority of England’s capitalist industry. Great Britain’s aim was that she should become the workshop of the world, and hence that the world should become an agrarian zone which would buy England’s industrial products and provide her with foodstuffs and raw materials in exchange. Free trade was the most important means whereby this agricultural zone could be expanded continuously in accordance with the needs of English industry, and all sides were supposed to profit therefrom. In fact, the landowners of the countries which exported their products to England were as inveterate free-traders as England’s industrialists.

But this sweet dream of international harmony quickly came to an end. As a rule, industrial zones overmaster and dominate agrarian zones. This was true earlier of the city vis-à-vis the countryside, and it is now true of the industrial State vis-à-vis an agrarian State. A State which remains agrarian decays politically and usually economically, too, and loses its autonomy in both respects. Hence efforts to maintain or win national independence or autonomy necessarily generate within the overall cycle of international capitalist circulation the struggle for an autonomous heavy industry, which must under present conditions be a capitalist one. The development of outlets for foreign industrial products in the agrarian State itself creates a series of preconditions for this. It destroys the internal pre-capitalist industry, thereby releasing a large quantity of labour power which is at the disposal of capital as wage labour. These workers emigrate to other States with growing industry if they can find no employment in their home country, but would prefer to remain at home if the construction of a capitalist industry allowed them to. Foreign capital itself flows into the agrarian country, first to open it by building railways, and then in order to develop its raw-materials production, which includes not only agriculture, but also extractive industries – mining. The possibility of adding other capitalist enterprises to these grows. It then depends primarily on the political power of the State whether an autonomous capitalist industry develops. At first it was the areas of Western Europe and the Eastern USA which developed from agrarian States into industrial States, in opposition to English industry. They imposed protective tariffs against English free trade; and instead of the world division of labour between the English industrial workshop and the agricultural production of all other zones which was England’s aim, they proposed that the great industrial States divide those zones of the world that still remained free, as long as the latter could not resist them. England reacted to this. This was the beginning of imperialism.

Imperialism was particularly encouraged by the system of capital export to the agrarian zones which emerged at the same time. The growth of industry in the capitalist States today is so fast that a sufficient expansion of the market can no longer be achieved by the methods that had been employed up to the 1870’s. Till then, the primitive means of transport which existed in the agrarian zones sufficed, particularly the waterways which had hitherto been the only possible form of large-scale transport of foodstuffs and raw materials. For railways had been constructed almost exclusively in highly industrialized and heavily populated zones. Now, however, they became the way to open up thinly populated agrarian zones, making it possible to take their products to the market, but also to increase their population and production.

But these zones did not possess the means to plan railways themselves. The capital necessary for this and the directing labour force were provided by the industrial nations. They advanced the capital, thereby raising their exports of railway materials and increasing the ability of the newly opened areas to buy the industrial products of the capitalist nations with foodstuffs and raw materials. Thus the material interchange between agriculture and industry greatly increased. But if a railway in the wilderness is to be a profitable business, if it is even to be possible, if it is to obtain the labour power necessary for its construction and the security necessary for its operational demands, there must be a State authority strong and ruthless enough to defend the interests of the foreign capitalists and even to yield blindly to their interests.

Naturally, this is best supplied by the State power of these capitalists themselves. The same is true of bids for the possibility of mining richer ores or raising the production of commercial crops such as cotton by the construction of vast irrigation works – undertakings which are also made possible only by the export of capital from the capitalist countries. Hence as the drive for increasing capital export from the industrial States to the agrarian zones of the world grows, so too does the tendency to subjugate these zones under their State power.

There was another significant moment to this: the effects of capital exports on the agrarian zones to which they are directed may be very different. We have already pointed out how badly off the agrarian countries are in this respect, and how they must aspire to become industrial countries, in the interests of their own prosperity or even autonomy. In an agrarian State with the strength to protect its autonomy, the capital it imports will be used not only for the construction of railways, but also for the development of its own industries – as in the USA or Russia. In such circumstances capital exports from the old capitalist States only further the latter’s own industrial exports temporarily. Ultimately they cripple them, simply by fostering strong economic competition in the agrarian zone. The desire to hinder this is another motive for the capitalist states to subject the agrarian zones, directly – as colonies – or indirectly – as spheres of influence, in order to prevent them from developing their own industry and to force them to restrict themselves entirely to agricultural production.
 

The Colonial Danger and the Arms Burden

These are the principal roots of imperialism, which has replaced free trade. Does it represent the last possible phenomenal form of capitalist world policy, or is another still possible? In other words, does imperialism offer the only remaining possible form in which to expand the exchange between industry and agriculture within capitalism? This is the basic question.

There can be no doubt that the construction of railways, the exploitation of mines, the increased production of raw materials and foodstuffs in the agrarian countries has become a life-necessity for capitalism. The capitalist class is as little likely to commit suicide as to renounce it, and the same is true of all the bourgeois parties Rule over the agrarian zones and the reduction of their populations to slaves with no rights is too closely bound up with this tendency for any of the bourgeois parties to sincerely oppose these things. The subjugation of these zones will only come to an end when either their populations or the proletariat of the industrialized capitalist countries have grown strong enough to throw off the capitalist yoke. This side of imperialism can only be overcome by socialism.

But imperialism has another side. The tendency towards the occupation and subjugation of the agrarian zones has produced sharp contradictions between the industrialized capitalist States, with the result that the arms race which was previously only a race for land armaments has now also become naval arms race, and that the long prophesied World War has now become a fact. Is this side of imperialism, too, a necessity for the continued existence of capitalism, one that can only be overcome with capitalism itself?

There is no economic necessity for continuing the arms race after the World War, even from the standpoint of the capitalist class itself, with the exception of at most certain armaments interests. On the contrary, the capitalist economy is seriously threatened precisely by the contradictions between its States. Every far-sighted capitalist today must call on his fellows: capitalists of all countries, unite ! For, first of all, there is the growing opposition of the more developed of the agrarian zones, which threatens not just one or other of the imperialist States, but all of them together. This is true of the awakening of Eastern Asia and India as well as of the Pan-Islamic movement in the Near East and North Africa.

This upsurge is accompanied by the growing opposition of the proletariat of the industrial countries against every new increase of their tax burden. Even before the War, it was clear that since the Balkan War the arms race and the costs of colonial expansion had reached a level that threatened the rapid increases of capital accumulation and thereby capital export, i.e., the basis of imperialism itself. Industrial accumulation at home still advances continuously, thanks to technical progress. But capital no longer rushes into export. This is visible in the fact that even in peacetime the European States had difficulties in covering their own loans. The rates of interest they were forced to grant rose. This is revealed, for example, by the average market prices of:

	3 % German National Loans (Reichsanleihe)	3 % French Annuities
1905	89	99
1910	85	97
1912	80	92
Mid 1914	77	83

After the War, this trend will not get better, but worse, if the arms race and its demands on the capital market continue to grow.

Imperialism is thus digging its own grave. From a means to develop capitalism, it is becoming a hindrance to it. Nevertheless, capitalism need not yet be at the end of the line. From the purely economic standpoint, it can continue to develop so long as the growing industries of the capitalist countries can induce a corresponding expansion of agricultural production. This gets more and more difficult, of course, as the annual growth of world industry increases and still unopened agrarian zones become fewer and fewer. So long as this limit has not been reached, capitalism may be wrecked on the reef of the rising political opposition of the proletariat, but it need not come to an end in economic collapse.

On the other hand, just such an economic bankruptcy would occur prematurely as a result of continuing the present policy of imperialism. This policy of imperialism therefore cannot be continued much longer. Of course, if the present policy of imperialism were indispensable to the maintenance of the capitalist mode of production, then the factors I have referred to might make no lasting impression on the ruling class, and would not induce them to lend a different direction to their imperialist tendencies. But this change will be possible if imperialism, the striving of every great capitalist State to extend its own colonial empire in opposition to all the other empires of the same kind, represents only one among various modes of expansion of capitalism.
 

The Next Phase: Ultra-Imperialism

What Marx said of capitalism can also be applied to imperialism: monopoly creates competition and competition monopoly. The frantic competition of giant firms, giant banks and multi-millionaires obliged the great financial groups, who were absorbing the small ones, to think up the notion of the cartel. In the same way, the result of the World War between the great imperialist powers may be a federation of the strongest, who renounce their arms race.

Hence from the purely economic standpoint it is not impossible that capitalism may still Jive through another phase, the translation of cartellization into foreign policy: a phase of ultra-imperialism, which of course we must struggle against as energetically as we do against imperialism, but whose perils lie in another direction, not in that of the arms race and the threat to world peace.

The above exposition was completed before Austria surprised us with her ultimatum to Serbia. Austria’s conflict with Serbia did not arise purely from imperialist tendencies. In Eastern Europe, nationalism is still a revolutionary motive force, and the present conflict between Austria and Serbia has nationalist as well as imperialist roots. Austria tried to implement an imperialist policy by annexing Bosnia and threatening to include Albania in its sphere of influence. This aroused the nationalist opposition of Serbia, which feels threatened by Austria and is now a danger to the existence of Austria on its own account.

The World War did not come about because imperialism was a necessity for Austria, but because by its own structure it endangered itself with its own imperialism. Imperialism could only have powered an internally homogeneous State which attaches to itself agrarian zones far beneath it culturally. But here, a nationally divided, half-slavic State wished to pursue imperialism at the expense of a slavic neighbour whose culture is of the same origins as the culture of the neighbouring regions of its opponent. Of course, this policy could only have such unexpected and vast consequences because of the contradictions and discord which imperialism has created between the other great Powers. All the consequences ripening in the womb of the present World War have not yet seen the light. Its outcome may still be that the imperialist tendencies and the arms race accelerate at first – in which case, the subsequent peace will be no more than a short armistice.

From the purely economic standpoint, however, there is nothing further to prevent this violent explosion finally replacing imperialism by a holy alliance of the imperialists. The longer the War lasts, the more it exhausts all the participants and makes them recoil from an early repetition of armed conflict, the nearer we come to this last solution, however unlikely it may seem at the moment.

 

Super Imperialism

Internet Archive

https://archive.org › download › SuperImperialism

PDF

Jun 19, 2024 — Super imperialism : the origin and fundamentals of U.S. world dominance / Michael Hudson.–– 2nd ed. p. cm. Includes bibliographical ...

444 pages

Imperialism and world economy

Internet Archive

https://archive.org › download

PDF

Imperialism as a problem of world economy. 2. Intetnational division of ... Kautsky (who, like many others, has parted ways with Marxism, but in a ...

---

Capitalists are Dispensable, Laborers Are Not

BY M. SHAHID ALAM

 DECEMBER 28, 2021Facebook

TwitterRedditEmail

Photograph Source: Mark Dixon – CC BY 2.0

“If you set to work to believe everything,
you will tire out the believing-muscles of your mind,
and then you’ll be so weak you won’t be able
to believe the simplest true things.”

– Lewis Carroll

Capitalists—qua owners of capital—are dispensable, but laborers are not.

This thesis flows from a neglected asymmetry between capitalists and laborers. The capitalist does not stand in the same relation to capital and the services of capital as a laborer does with respect to his laboring capacities and the services of these capacities. This distinction goes unacknowledged by neoclassical economists as well as economists of other persuasions. If this is because they have concluded that this is of no consequence, we offer some arguments to the contrary.

There is irony in this thesis even as capitalism threatens to render laborers ‘useless,’ that is, replace them with intelligent machines faster than it creates new jobs. But this is not the place to address this irony.

Why are capitalists dispensable?

Consider a series of relations moving from a capitalist to his capital, and from capital to the services of capital. Next examine another series moving from a laborer to his laboring capacities, and from these capacities to the diverse services of these capacities, also known as the services of labor. There exist important differences between the two series.

There exists no integral—or, if you prefer, visceral—connection between the capitalist and his capital or between the capitalist and the services of capital. Capital and the services of capital are wholly external to the capitalist qua owner of capital; their relationship to the capitalist is merely legal so that a capitalist can be physically separated from his capital and the services of his capital. If the capitalist prefers leisure to work or lacks the requisite managerial skills, he can delegate the task of running his enterprise to hired managers. Once the capitalist appoints a manager to run his enterprise, he could be soaking the sun inside one of the many craters on the moon while his enterprise continues to produce goods or services somewhere in Agawam, Massachusetts. All this notwithstanding, at the end of every year or every quarter, this capitalist will receive the profits or carry the losses of his enterprise. This is his return for risking his funds to organize production.

Now consider an economy whose capital has been transferred to the workers in each enterprise. The workers in each enterprise form a worker-cooperative; they collectively own its capital, vote to elect a workers’ council who then appoint managers, or elect the managers directly. In addition, each WC is free to borrow funds from deposit banks or tax-funded investment banks. Each WC is also free to sell some fraction of its fixed capital should this not be needed; the proceeds from this sale may be used to pay off loans, deposited in a bank as a reserve fund against rainy days, or allocated to research and development.

Each worker cooperative may choose its modus vivendi and its goals. At first, therefore, a variety of worker cooperatives may emerge, with different goals and structures; they may be more or less egalitarian; some may work primarily with fixed wages, others with a combination of fixed wages and shares in the coop’s residual. Some may give greater weight to steady employment, others to higher wages. It is difficult to say, which types of cooperatives may emerge as winners. Collectively, the cooperatives may set some limits to the goals, and the governance and the reward structures of the coops to ensure the viability of the system as a whole.

In one stroke then, we have created a market economy without any capitalists as the term is understood in a capitalist economy. Production in this economy is organized by worker cooperatives, whose policies are formulated by a management periodically elected by workers. The workers in each enterprise are free to set the rules under which they work; they are also free to leave one WC and join another. However, the capital of any enterprise is not traded, nor does it move when any worker leaves the enterprise.

In a splendid piece of circular reasoning, neoclassical economists justify private ownership of capital on the ground that it is the capitalist who organizes production. This is a non sequitur. The capitalist organizes production precisely because he is a capitalist: he commands his own or borrowed funds that allow him to do so. In an economy consisting of worker cooperatives, teams of workers could organize production with funds borrowed from deposit banks or tax-funded investment banks.

It may be argued that the co-ops cannot match the performance of corporations because they have no skin in the game. This is not true. Unlike workers who receive fixed wages, the members of WCs may receive all or some fraction of their income that is tied to their co-op’s residual. Since they share in the coop’s decision-making, co-op members are more likely than wage-workers to identify with their enterprise. In themselves, these factors may help to reduce shirking. In addition, shirkers in co-ops are likely to come under moral censure from non-shirkers. If free-riding is seen as a problem, the WCs can empower the management to monitor the performance of members and work out rules for dismissing habitual shirkers. Collectively, co-ops may discourage shirking by discounting the earnings of new members who have a record of shirking. Shirkers may also be given the chance to expunge their record by improving their performance.

Since the capitalist is physically separable from his capital, this creates the possibility of separating ownership of capital in an enterprise from control over it. In medieval times, we observe trade partnerships in the Middle East—known as qirad in Arabic—where some partners advanced capital to traders who managed the task of conducting the trade. In 1932, Adolph Berle and Gardiner Means showed that ownership and control of most large-scale enterprises in the United States had ceased to reside in the same hands.

In activities without significant economies of scale and high costs of supervision, the capitalist may lend and/or rent his capital to workers and let them organize production. In agriculture, we find landlords who rent their lands to peasants instead of hiring wage-workers to organize production. During the late eighteenth and nineteenth centuries, capitalists in Britain set up textile factories with work benches that workers could rent to produce yarn and cloth on their own account. It is also common for laborers lacking capital to rent cars, trucks and rickshaws to produce transport services. Others rent space in commercial buildings to organize retail businesses.

A laborer cannot be physically separated from his working capacities or the services of his working capacities.

A laborer’s working capacities include his body, the metabolism that converts food into energy, his cognitive powers, memory, will, emotions, skills, intuition, and his powers of reasoning, sight, speech, hearing, taste and touch. The execution of any task by a worker in real time—whether this entails digging a trench, a sitar recital, performing surgery, crafting a violin, or time spent solving a yet unsolved mathematical conundrum—is the joint product of various manifestations or services of his working capacities.

Under a wage-contract, however, a laborer may sell the services of his working capacities to an employer. In addition, a self-employed person with access to some capital may employ his working capacities to produce services (such as haircuts) that he sells directly to buyers. Alternatively, as a carpenter, he may employ his working capacities to saw, bend, carve, plane, sand, screw together, and polish timber into chairs, and then sell the chairs for a profit. In both cases, the laborer, will likely receive the market wage for his labor and a similar return on the capital he employs in his enterprise.

Some exceptions to the inseparability of a laborer from his laboring capacities may also be noted. If medical technology permits, he may sell or donate his organs or tissues for transplantation to another person. However, a person is unlikely to consent to such transplantations, except when this promises to save the life of a loved one. Of course, without the living person’s consent, or after he dies or is killed, the possibilities become endless.

The first asymmetry we have just described leads to another. 

The separability of the capitalist from his capital nudges us to explore egalitarian re-arrangements of the ownership of capital. Should such rearrangements occur, the capitalists will only lose their claim to the surplus of capitalist enterprises, but they will retain all their rights as citizens and as members of WCs in the new economy. Should they also possess some valuable skills, the WCs will recognize and reward these skills without any prejudice arising from their past history as capitalists.

On the other hand, a laborer cannot be separated from his laboring capacities without also losing his freedom. The capitalist can take ownership of the laboring capacities of legally free laborers only after he takes ownership of their persons for some part of a day, that is, by turning them into wage-slaves.

Importantly, the absence of any integral or visceral connection between the capitalist and his capital points to the potential for reorganizing the ownership of capital on an egalitarian basis. It would be disingenuous to think that the capitalists themselves are not aware of this potential for egalitarian rearrangements of the ownership of capital. In addition, we may surmise that the capitalists know that the workers too—perhaps, with help from their protagonists in the intellectual classes—are aware of this vulnerability.

Given all of the above, we may surmise that capitalists have always been at work—no doubt with help from self-serving economists—to obfuscate this vulnerability and, simultaneously, to harness the coercive powers of the state to protect their pivotal position in the capitalist system. Since the actual use of coercion is costly, the capitalists employ all the forces at their command to convince the workers of the superiority of an economic system based on the private ownership of the means of production. However, should the workers start questioning this ‘natural order,’ the capitalists are prepared to call on the machinery of the state—especially the courts, police and prisons—to knock the workers until they back the capitalist narrative.

Which of the two classes—capitalists or workers—is likely to organize production in a capitalist economy? 

In the 1950s, after nearly a century of mathematical ‘modling,’ neoclassical economists concluded that they had worked out the contours of an imaginary economy that would serve as the ideological fortress of capitalism. Markets in this economy instantaneously reach an equilibrium that is unique, stable and efficient in the sense that no person can be made better off without making at least one person worse off. Capital and labor in this economy receive their just deserts: that is to say, there is no exploitation of labor. In the words of Paul Samuelson, in this economy “it really did not matter who hires whom; so have labor hire ‘capital.’”

The message of the neoclassicals to the capitalists is: Don’t let your hard work as bosses give you a bad conscience. It gives you no advantage. The message to the workers is: Why bother with organizing production; let the capitalists worry about this. Enjoy your hassle-free life as workers; you have nothing to gain from losing your chains. These charming results hold only in perfectly competitive markets in which capitalists can costlessly write and enforce complete employment contracts.

In the real world, however, production is nearly always organized by capitalist bosses. Hurling what he thinks is a challenge to Karl Marx,  David Landes asks “if [capitalist] bosses make (cream off) so much money, why shouldn’t boss-free enterprises (cooperatives, collectives, small self-employed workers, and the like) be able to outdo those capitalistic units that pay so heavy a toll to owners and managers?” Landes imagines that he is setting up a test of the feasibility of workers organizing production. He is challenging boss-free enterprises to organize production in capitalist economies under property rights, institutions and rules established by capitalists. Now, since worker co-ops do not—with rare exceptions—organize production in capitalist economies, this supposedly ‘proves’ that they cannot compete with capitalists in organizing production.

Landes forgets that workers cannot organize production because they have been stripped of the means of production. Since they cannot offer any collateral, they also cannot borrow money or rent capital. Moreover, financing the establishment of WCs is not only a financial issue. The economic and political power of capitalists is built around their class monopoly over production. Why would they dilute this class monopoly by lending capital to workers? It is unlikely that capitalist guilt over exploitation of workers ever reaches the point at which they become willing to commit hara-kiri.

Is the separation of capitalists from capital unjust?

Can any economic system be considered just that has a tendency to place—and often ends up placing—the means of production in the hands of a tiny minority of capitalists, thereby endowing them with the power to organize production not in the interests of the workers or society but exclusively in the interests of the capitalists. Depending on conditions in the labor market, and driven by the profit imperative, the capitalist may hire and fire workers at will. In addition, he may demand that his hired hands put in long hours of work, six days a week, quicken their pace of work to keep up with the machines, and take no breaks in the workplace, even if they have to piss in a bottle or wear diapers.

In a capitalist economy, moreover, workers are disposable, unless they have acquired skills specific to the enterprise in which they work; they may be laid off or fired whenever they are not needed. Can an economic system be just that nearly always fails to provide some workers with employment, and during a depression may fail to provide employment to as much as a third of the workers; when it does provide employment, many of these jobs may not offer the workers a living wage. Can an economic system be humane whose commitment to profit-making demands that workers be fired when they fall sick or are injured even when the sickness and injury are caused by hazards of the work and the workplace? It is ironic that while wage-workers in capitalist economies are legally free and wage-work is considered to be superior to slavery, the capitalists do not have any intrinsic interest in the livelihood and health of their workers that slave-owners have in their slaves and their families.

Similarly, while wage-workers are legally free, they lose their freedom the moment they enter the workplace. The neoclassical economist will predictably protest that a wage-worker remains free even at work since he is free to leave his present job whenever he wishes; if he does not quit that is because he chooses to stay. Sorry: this is a flawed inference. The neoclassical economist is always liberal in making assumptions; when he needs a can opener he just assumes that he has one. Hence, neoclassical economics assumes that workers face no costs in moving to another job that he prefers over his current job.

However, the ability to switch jobs at will does not overcome the lack of freedom at the workplace. A worker cannot escape the lack of freedom at the workplace because this is an unavoidable condition of capitalist employment, unless the nature of a job makes monitoring of work very costly. The lack of freedom at work cannot be blamed on technology; the capitalists have been choosing technology, layout of factories and offices, and work organization that truncate worker autonomy. Bosses can monitor their employees’ pace of work, even when they work remotely.

Conservatives and liberals are likely to view with alarm any talk about the rearrangement of capitalist property rights in the means of production.

Although such alarm is to be expected from the historical beneficiaries of capital accumulation over the last half a millennium, this shows societal amnesia about the horrendous crimes against humanity that attended, and still attend, the expropriation of great masses of humans—men, women, children and the unborn—to finance and support the creation of capitalists and capitalist power in Western Europe and North America. Karl Marx applied the moniker of ‘primitive accumulation’ to the “historical process of divorcing the producer from the means of production.”

The capitalist organization of British agriculture, which began in the late fifteenth century, was accomplished over the next three centuries through successive expropriations of the peasantry either by force or through laws passed by the largest landowners—formerly feudal lords—in the British parliament. The free peasantry that had emerged in England by the late fourteenth century earned a living from cultivating strips of arable land, but they also depended crucially on access to commons for firewood, pasturing their cattle, gathering berries and mushrooms, and catching game and fish. Once the growth of woolen manufactures in Flanders raised the price of wool, English landowners began to privatize the commons, either by force or passing enclosure acts that denied peasants access to the commons, and converted them into sheep pastures; this forced some peasants to seek wage-work in agriculture, while others abandoned their lands to seek wage-work in the towns. In addition, the large landowners also began to enforce gaming laws to ride roughshod over the farms of peasants resulting in losses to their crops.

Next consider a historical rearrangement of property rights during the nineteenth century that is more germane to the subject of this essay. I am referring to the large-scale separation—in the Americas during the nineteenth century—of a very important class of capitalists from their capital invested in slaves. In August 1791, the black slaves in Saint-Domingue—a French colony that was a source of immense profits to France—began a successful rebellion against slave-owning capitalists—who after defeating two massive invasions ordered by Napoleon Bonaparte in 1801 and 1802, declared the establishment in 1804 of the Republic of Haiti ruled by former black slaves. Do we object to this transfer of property rights in slaves from plantations owners to the slaves themselves?

In the nineteenth century, we encounter several more examples of the separation of capitalists from their capital invested in slaves. In 1833, Britain transferred the ownership rights of capitalists in humans to the humans themselves in nearly all its colonial possessions. Some of the northern states in the USA, following the War of Independence in 1776, began passing laws that effected similar transfers of ownership rights in slaves. In 1861, in the midst of the American Civil War, slavery was also abolished in the Southern States. Brazil, perhaps the largest slave-based economy in history, abolished slavery in 1888. In general, where slavery was abolished under law, the cash compensation was less than the market value of the slaves.

The principal results of this essay are easily summarized.

The capitalist is physically separable from the capital that he owns, but the laborer cannot be parted from his laboring capacities.

The first part of the previous statement establishes the feasibility of separating the capitalist from his capital. Indeed, the capitalist (qua capitalist) is a rentier since he does not contribute the services of any of his present working capacities to the enterprise in which he owns capital. The capitalist’s claim to profits is rooted in a legal relationship, not an economic relationship.

Au contraire, the services of a laborer are inseparable from his person. This means that in order to maximize his profits, the capitalist who hires labor must gain control over the laborer’s person and his working capacities in the workplace and—if necessary and feasible—off the workplace. In other words, the capitalist logic demands that the laborer be stripped of his autonomy once he enters the workplace. Although the worker is free in theory to choose his employer, this freedom does not restore the autonomy that he enjoyed in his work and workplace as a self-employed peasant, artisan, peddler or shopkeeper.

A clear-eyed focus on the asymmetry in the two binaries—the separability of the capitalist from capital and inseparability of the laborer from his working capacities—suggests significant gains that are likely to flow from an alternative organization of production that transfers ownership and control over capital from capitalist enterprises to worker cooperatives.

A detailed discussion of these gains is a subject for another essay. However, broadly speaking, these gains are likely to flow from two forms of democratization that will attend the transfer of capital from the capitalists to the workers. First, there is the political democratization that will flow from the transformation of the capitalist enterprises to worker cooperatives. A political system that grows out of the interests and actions of workers and worker co-ops is unlikely to be hijacked by sectional interests.

Secondly, there is the democratization in the workplace. A variety of benefits are likely to flow to workers from the establishment of co-ops. These may include sharing by members in policy-making, creation of a culture of egalitarianism, improvements in working conditions, equal access of all members and their families to education, health and social services, less hierarchy in the organization of work, sharing and phasing out of tedious work, and greater income inequality. An economy consisting of worker co-ops will nurture cooperation, in the workplace and outside it. Once profits are dethroned as the only or chief objective driving production and technological change, the economy will have a chance to redirect its focus from endless capital accumulation towards a thousand improvements in the quality of life for everyone.

M. SHAHID ALAM is professor of economics at Northeastern University. This is an excerpt from his forthcoming book, Israeli Exceptionalism: The Destabilizing Logic of Zionism (Macmillan, November 2009). Contact me at alqalam02760@yahoo.com.