Lesson Four
The Development of Capitalism

The clearest understanding of the Marxist conception of history can be obtained by studying the actual evolution of the mode and technique of production and tracing the effects of these changes on social institutions and class relations. We will now single out some of the more important factors to help build a background for our future study. The following is a brief survey of the rise of capitalism and its further course of development.

A. The Rise of Capitalism

Capitalism arose after a long period of struggle between the feudal nobility and the church on one hand and the rising class of merchants and manufacturers on the other. The latter were the revolutionists of their time. They represented a new order of society and swept aside the remnants of feudal power in a series of revolutions which began in Britain in 1642, reached a climax in France in 1789 and found further expression in the revolutions of 1848 in Germany, Italy and Austria. As a result of this combined economic and military struggle, the merchant and manufacturers triumphed and established the system of society known as capitalism. They became the new exploiters of labor. The old feudal state and the church were transformed into instruments at the service of this new class.

B. Three Conditions Necessary for the Rise of Capitalism

However, before capitalism could arise, three major conditions had to exist: One, trade or commerce must have been developed to world-wide scale; Two, a certain degree of wealth must have been accumulated by a small group of people; Three, there must have arisen a new class of people who have nothing to sell but their power to labor and who are compelled by these circumstances to sell their labor-power in order to live.

C. Development of Trade and Money Economy

Trade existed in primitive form even in prehistoric time, first as simple barter of goods for goods, and then through the employment of tokens to facilitate exchange (wampum cowrie shells). Precious metals were used as tokens later. Finally, with the rise of villages and early manufacture, the need for money, a universal commodity, arose. So, the previous metals were coined and stamped.

The use of money has the following effects:

all good used in exchanged become commodities;
wealth is concentrated in the hands of merchants;
products of labor pass out of the hands of the producers and no longer under their control;
nobility is forced to use money;
the merchant class becomes dominant within the framework of, and undermines, the old feudal society.

D. The Age of Discovery and the Establishment of the World Market

During the middle ages, two main commodities were imported from the East: spices for the preservation of food; silks for the ruling class. Italian and Hanseatic cities became rich and powerful through this trade with the Orient. But in the 14th century, the overland route to the Mediterranean was conquered and closed by the Seljuk Turks. The need for new routes brought on the age of discovery and colonization. The discovery of the compass made possible extended sea travel. Metals, textiles, clock-making, navigation, astronomical instruments, printing and scientific research in general, kept pace with the tremendous development of industry.

Bourgeois economists ascribe the origin of wealth to individual initiative industry, frugality and far-sightedness. Truth of the matter is that primitive wealth has always grown through theft, plunder and conquest. The invention of gunpowder and cannon revolutionized warfare, putting the common man in the military sense on an equal footing with the armored nobile on horseback. Standing armies of common people were used to subdue the nobility and consolidate nations. The discovery of Africa, America, India and China meant an enormous growth of markets and trade. Production spurted. Europe went mad for precious metals to act as money. The frightful extermination of natives was part of this frenzy (Cortez in Mexico, Pizzarro in Peru). The second half of the 16th century was a period of colonization aided by exploitation of virgin lands with slaves. From 1508 to 1860 15,000,000 negroes were landed in America from Africa. About the same number, it is estimated, died on the way. Many cities got their primary accumulation from the slave trade. The vast improvement in transport and communication resulting from the extension of world trade, helped tranfer culture from one land to another. Thus cotton was introduced in England from India, potatoes and tobacco from America to Europe.

E. Early Manufactures In England

The factory system first came to England from Flanders. Wool manufacture became so important to English merchants that they revolutionized the entire English agricultural system. For the purpose of raising sheep large tracts of land were taken by force and fraud from the peasant villagers who held the land in common were “enclosed” for pasturage (See the English Laborer, 1300 to 1925 by M. and T.R. Fordham). The peasants, driven off the land and into the towns, were converted into wage laborers in the newly rising factories.

Division of Labor. The factory system was not marked at first by any subdivision of labor within the crafts. A factory merely housed the craftsmen. But this assembling of workers and artisans under one roof made possible the minute division of labor within each craft, and later to apply machinery to the simpler mechanical tasks. The first simple division of labor gradually gave way to more complex division and finally, with the industrial revolution, to MACHINOFACTURE. Thus we see how the need for goods to exchange for imports from the Far East leads to new methods of production. A series of remarkable inventions: spinning jenny, power loom, steam engine, etc. by Hargreaves, Arkright, Compton, Watts and others, completely revolutionized the methods of production. Skill was transferred to the machine. Less skilled labor was substituted for more skilled; female for male labor; child for adult labor. These developments mark the beginning of the period of modern industry.

F. Effects of the Industrial Revolution

Workers become machine tenders. Highest division of labor arises in the factory, in society and on an international scale.
The two main classes of modern society arise.
Industry concentrates in towns and cities. Large costly machines require special buildings. Workers are thrown into poverty-stricken homes around the factories.
Sharp division between town and country. “The foundation of all highly developed division of labor that is brought about by the exchange of commodities is the cleavage between town and country. We may say that the entire economic history of society is summed by the development of this cleavage between town and country.” – Marx (Capital)

G. The English Revolution of 1649 to 1688

This was the first social revolution; that is, the transformation of the foundations of society on a vast scale and a brief time, and the establishment of new class relationships. At first the bourgeoisie united with the king in a common struggle against the lords. The Crown was granted large sums by the House of Commons. In return it received remission of duties and other aids to free trade. The merchants helped to make the Crown powerful, thus establishing and unifying the national state. But the Crown then became the last stronghold of feudalism, making ever greater demands for money on the merchants. Under the prerogatives of feudalism, the King granted trade monopolies to his favorites. Gradually the merchants achieved a national outlook. They felt a need for a strong political power to protect their interests, a centralized capitalist government with a powerful navy to protect their ships against pirates. They needed a stable currency untampered by the King’s whims. When cromwell finally overthrew the King and a “capitalist” monarchy was set up, the bourgeoisie established the Bank of England, a public debt (to stabilize money and values by acting as a safe, guaranteed field of investment), a strong currency and a strong navy.

H. The French Revolution of 1789 to 1793

(P. Lafargue – Evolution of Property) Here again the merchant class could overthrow feudalism only with the aid of the exploited masses, the peasants and workers. Under the slogan of “Liberty, Equality, Fraternity”, this revolution was an attack of one form of property on another. It achieved the liberty and equality of capitalist property owners. The French Revolution, like the English, rid the merchants of trade restraints, permitted the unhampered development of new forms of property, set up a national bank, a public debt, a stable currency and a strong national military force.

I. The American Revolution of 1776

Here also those who did the actual fighting were betrayed. The revolutionary masses were composed of small farmers and artisans. From 1783 to 1789 the Left Wing of the revolution still remained in control and prevented the formation of a strong centralized capitalist government which could be used against their interests. By a coup d’état the richer sections of the population led by Hamilton maneuvered the adoption of the Constitution over the opposition of the “Lefts”. Under this constitution the propertied interests established their national bank, public debt, stable currency, and strong central authority supported on bayonets.

J. New Forms of Oppression and Exploitation

In all bourgeois revolutions the exploited classes are betrayed at a certain stage. The capitalists, having succeeded in gaining power, compromises with the older ruling class to “put the lower classes in their place.” The first act of the Cromwell revolution was to crush the Levellers. As Cromwell said: “You have no other way to deal with these men but to break them, or they will break you.” Similarly the French Revolution declared against all combinations of labor almost immediately.

The capitalist was actually released from all responsibility of labor upkeep. This was now up to the “free” laborer himself. The worker is:

“free to work for wages in the new favorites – or starve. The peasant was promised the land and freedom from feudalism. But the bourgeoisie subjected them to new and more intense exploitation. The land was once more taken from them and put into the hands of large property owners.

“History shows that when a subject class becomes the ruling class it is prepared to compromise with the old ruling class in order to consolidate all the propertied interests of society against the interests and demands of the propertyless.” – Lafargue