Michael Perelman - The Invention of Capitalism: Classical Political Economy and the Secret History of Primitive Accumulation

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In order to develop the laws of bourgeois economy... it is not necessary to write the real history of the relations of production. But the correct observation and deduction of these laws... always leads to primary equations... which point toward a past lying behind the system. These indications... then offer the key to understanding the pasta work in its own right. Karl Marx, Grundrisse

In the development of a theory, the invisible of a visible field is not generally anything whatever outside and foreign to the visible defined by that field. The invisible is defined by the visible as its invisible, its forbidden vision: the invisible is not therefore simply what is outside the visible (to return to the spatial metaphor), the outer darkness of exclusionbut the inner darkness of exclusion, inside the visible itself. Louis Althusser, From Capital to Marxs Philosophy

Classical political economy, the core works of economic literature from the time of William Petty through that of David Ricardo, presents an imposing facade. The towering figures of early political economy forged a new way of thinking systematically about economic affairs in the late seventeenth and early eighteenth centuries with little more than the writings of business people and moral philosophers to guide them. Every one, from Karl Marx, who created the term classical political economy, to modern-day conservatives, recognizes the enormous intellectual achievement of these early economists.

For more than two centuries, successive generations of economists have been grinding out texts to demonstrate how these early theorists discovered that markets provide the most efficient method for organizing production. An uncompromising advocacy of laissez-faire is, ostensibly, the intended lesson of classical political economy.

Most contemporary readers of Adam Smith, David Ricardo, and the other classical political economists accept their work at face value, assuming these early writers to be uncompromising advocates of laissez-faire. For the most part, even many Marxists accept this interpretation of classical political economy. Alongside their work on pure economic theory, the classical political economists engaged in a parallel project: to promote the forcible reconstruction of society into a purely market-oriented system. While economic historians may debate the depth of involvement in market activities at the time, the incontestable fact remains that most people in Britain did not enthusiastically engage in wage laborat least so long as they had an alternative.

To make sure that people accepted wage labor, the classical political economists actively advocated measures to deprive people of their traditional means of support. The brutal acts associated with the process of stripping the majority of the people of the means of producing for themselves might seem far removed from the laissez-faire reputation of classical political economy. In reality, the dispossession of the majority of small-scale producers and the construction of laissez-faire are closely connected, so much so that Marx, or at least his translators, labeled this expropriation of the masses as primitive accumulation.

The very sound of the expression, primitive accumulation, drips with poignant echoes of human consequences. The word primitive, first of all, suggests a brutality lacking in the subtleties of more modern forms of exploitation. It also implies that primitive accumulation was prior to the form of accumulation that people generally associate with capitalism. Finally, it hints at something that we might associate with primitive parts of the world, where capital accumulation has not advanced as far as elsewhere.

The second term, accumulation, reminds us that the primary focus of the process was the accumulation of capital and wealth by a small sector of society, or as Marx (1977, 73940) described it, the conquest of the world of social wealth. It is the extension of the area of exploited human material and, at the same time, the extension of the indirect and direct sway of the capitalist. Certainly, at least in the early stages of capitalism, primitive accumulation was a central element in the accumulation process.

Although many modern scholars acknowledge the pervasive nature of primitive accumulation during the time that the classical political economists wrote, nobody to my knowledge has recognized the complicity of the classical political economists. They strongly advocated policies that furthered the process of primitive accumulation, often through subterfuge.

While energetically promoting their laissez-faire ideology, they championed time and time again policies that flew in the face of their laissez-faire principles, especially their analysis of the role of small-scale, rural producers. As we will see, the underlying development strategy of the classical political economists was consistent with a crude proto-Marxian model of primitive accumulation, which concluded that nonmarket forces might be required to speed up the process of capitalist assimilation in the countryside. This model also explains why most of the classical political economists expressed positions diametrically opposed to the theories usually credited to them.

Perhaps because so much of what the classical economists wrote about traditional systems of agricultural production was divorced from their seemingly more timeless remarks about pure theory, later readers have passed over such portions of their works in haste. Although this aspect of classical political economy might have seemed to fall outside the core of the subject, I argue that these interventionist recommendations were a significant element in the overall thrust of their works. Specifically, classical political economy advocated restricting the viability of traditional occupations in the countryside to coerce people to work for wages.

Chapter 1, which deals with the history of primitive accumulation, demonstrates the classical political economists keen interest in driving rural workers from the countryside and into factories, compelling workers to do the bidding of those who would like to employ them, and eradicating any sign of sloth.

The vitality of these rural producers generally rested on a careful combination of industrial and agricultural pursuits. Despite the efficiency of this arrangement, classical political economy was intent on throttling small producers. Classical political economists often justified their position in terms of the efficiency of the division of labor. They called for measures that would actively promote the separation of agriculture and industry. As we shall see, Marxs concept of the social division of labor is very important in this respect. In contrast to Smiths exclusive emphasis on the division of laborthe arrangement of work within the firmMarx suggested that we also examine the deployment of resources between individual firms and householdsthe social division of labor.

Classical political economists paid virtually no attention to the social division of labor in their theoretical works. For example, although Smith offered a detailed description of the division of labor in his famous pin factory, he did not bother to extend his discussion. What does it mean that society is partitioned in such a way that the pin industry purchases its metals or fuels instead of producing them itself? How does such an arrangement originate? Could such changes in the pattern of industries make a difference in an economy, even if technology were unchanging?