If the "anarcho"-capitalist is to claim with any plausibility that "real" capitalism is non-statist or that it can exist without a state, it must be shown that capitalism evolved naturally, in opposition to state intervention. However, in reality, the opposite is the case. Capitalism was born from state intervention and, in the words of Kropotkin, "the State . . . and capitalism . . . developed side by side, mutually supporting and re-enforcing each other." [Kropotkin's Revolutionary Pamphlets, p. 181]
Numerous writers have made this point. For example, in Karl Polyani's flawed masterpiece The Great Transformation we read that "the road to the free market was opened and kept open by an enormous increase in continuous, centrally organised and controlled interventionism" by the state [p. 140]. This intervention took many forms -- for example, state support during "mercantilism," which allowed the "manufactures" (i.e. industry) to survive and develop, enclosures of common land, and so forth. In addition, the slave trade, the invasion and brutal conquest of the Americas and other "primitive" nations, and the looting of gold, slaves, and raw materials from abroad also enriched the European economy, giving the development of capitalism an added boost. Thus Kropotkin:
"The history of the genesis of capital has already been told by socialists many times. They have described how it was born of war and pillage, of slavery and serfdom, of modern fraud and exploitation. They have shown how it is nourished by the blood of the worker, and how little by little it has conquered the whole world." [Op. Cit.,p. 207]
Or, if Kropotkin seems too committed to be fair, we have John Stuart Mill statement that:
"The social arrangements of modern Europe commenced from a distribution of property which was the result, not of just partition, or acquisition by industry, but of conquest and violence. . . " [Principle of Political Economy, p. 15]
Therefore, when supporters of "libertarian" capitalism say they are against the "initiation of force," they mean only new initiations of force; for the system they support was born from numerous initiations of force in the past. And, as can be seen from the history of the last 100 years, it also requires state intervention to keep it going (section D.1, "Why does state intervention occur?," addresses this point in some detail). Indeed, many thinkers have argued that it was precisely this state support and coercion (particularly the separation of people from the land) that played the key role in allowing capitalism to develop rather than the theory that "previous savings" did so. As the noted German thinker Franz Oppenheimer argued, "the concept of a 'primitive accumulation,' or an original store of wealth, in land and in movable property, brought about by means of purely economic forces" while "seem[ing] quite plausible" is in fact "utterly mistaken; it is a 'fairly tale,' or it is a class theory used to justify the privileges of the upper classes." [The State, pp. 5-6]
This thesis will be discussed in the following sections. It is, of course, ironic to hear right-wing libertarians sing the praises of a capitalism that never existed and urge its adoption by all nations, in spite of the historical evidence suggesting that only state intervention made capitalist economies viable -- even in that Mecca of "free enterprise," the United States. As Noam Chomsky argues, "who but a lunatic could have opposed the development of a textile industry in New England in the early nineteenth century, when British textile production was so much more efficient that half the New England industrial sector would have gone bankrupt without very high protective tariffs, thus terminating industrial development in the United States? Or the high tariffs that radically undermined economic efficiency to allow the United States to develop steel and other manufacturing capacities? Or the gross distortions of the market that created modern electronics?" [World Orders, Old and New, p. 168]. To claim, therefore, that "mercantilism" is not capitalism makes little sense. Without mercantilism, "proper" capitalism would never have developed, and any attempt to divorce a social system from its roots is ahistoric and makes a mockery of critical thought.
Similarly, it is somewhat ironic when "anarcho"-capitalists and right libertarians claim that they support the freedom of individuals to choose how to live. After all, the working class was not given that particular choice when capitalism was developing. Indeed, their right to choose their own way of life was constantly violated and denied. So to claim that now (after capitalism has been created) we get the chance to try and live as we like is insulting in the extreme. The available options we have are not independent of the society we live in and are decisively shaped by the past. To claim we are "free" to live as we like (within the laws of capitalism) is basically to argue that we are able to "buy" the freedom that every individual is due from those who have stolen it from us in the first place!
Needless to say, some right-libertarians recognise that the state played a massive role in encouraging industrialisation (more correct to say "proletarianisation" as it created a working class which did not own the tools they used, although we stress that this process started on the land and not in industry). So they contrast "bad" business people (who took state aid) and "good" ones. Thus Rothbard's comment that Marxists have "made no particular distinction between 'bourgeoisie' who made use of the state, and bourgeoisie who acted on the free market." [The Ethics of Liberty, p. 72]
But such an argument is nonsense as it ignores the fact that the "free market" is a network (and defined by the state by the property rights it enforces). For example, the owners of the American steel and other companies who grew rich and their companies big behind protectionist walls are obviously "bad" bourgeoisie. But are the bourgeoisie who supplied the steel companies with coal, machinery, food, "defence" and so on not also benefiting from state action? And the suppliers of the luxury goods to the wealthy steel company owners, did they not benefit from state action? Or the suppliers of commodities to the workers that laboured in the steel factories that the tariffs made possible, did they not benefit? And the suppliers to these suppliers? And the suppliers to these suppliers? Did not the users of technology first introduced into industry by companies protected by state orders also not benefit? Did not the capitalists who had a large and landless working class to select from benefit from the "land monopoly" even though they may not have, unlike other capitalists, directly advocated it? It increased the pool of wage labour for all capitalists and increased their bargaining position/power in the labour market at the expense of the working class. In other words, such a policy helped maintain capitalist market power, irrespective of whether individual capitalists encouraged politicians to vote to create/maintain it. And, similarly, all capitalists benefited from the changes in common law to recognise and protect capitalist private property and rights that the state enforced during the 19th century (see section B.2.5).
It appears that, for Rothbard, the collusion between state and business is the fault, not of capitalism, but of particular capitalists. The system is pure; only individuals are corrupt. But, for anarchists, the origins of the modern state-capitalist system lies not in the individual qualities of capitalists as such but in the dynamic and evolution of capitalism itself -- a complex interaction of class interest, class struggle, social defence against the destructive actions of the market, individual qualities and so forth. In other words, Rothbard's claims are flawed -- they fail to understand capitalism as a system and its dynamic nature.
Indeed, if we look at the role of the state in creating capitalism we could be tempted to rename "anarcho"-capitalism "marxian-capitalism". This is because, given the historical evidence, a political theory can be developed by which the "dictatorship of the bourgeoisie" is created and that this capitalist state "withers away" into anarchy. That this means rejecting the economic and social ideas of Marxism and their replacement by their direct opposite should not mean that we should reject the idea (after all, that is what "anarcho"-capitalism has done to Individualist Anarchism!). But we doubt that many "anarcho"-capitalists will accept such a name change (even though this would reflect their politics far better; after all they do not object to past initiations of force, just current ones and many do seem to think that the modern state will wither away due to market forces).
But this is beside the point. The fact remains that state action was required to create and maintain capitalism. Without state support it is doubtful that capitalism would have developed at all.
So, when the right suggests that "we" be "left alone," what they mean by "we" comes into clear focus when we consider how capitalism developed. Artisans and peasants were only "left alone" to starve, and the working classes of industrial capitalism were only "left alone" outside work and for only as long as they respected the rules of their "betters." As for the other side of the class divide, they desire to be "left alone" to exercise their power over others, as we will see. That modern "capitalism" is, in effect, a kind of "corporate mercantilism," with states providing the conditions that allow corporations to flourish (e.g. tax breaks, subsidies, bailouts, anti-labour laws, etc.) says more about the statist roots of capitalism than the ideologically correct definition of capitalism used by its supporters.
Capitalist society is a relatively recent development. As Murray Bookchin
points out, for a "long era, perhaps spanning more than five centuries,"
capitalism "coexisted with feudal and simple commodity relationships"
in Europe. He argues that this period "simply cannot be treated as
'transitional' without reading back the present into the past." [From
Urbanisation to Cities, p. 179] In other words, capitalism was not
a inevitable outcome of "history" or social evolution.
He goes on to note that capitalism existed "with growing significance
in the mixed economy of the West from the fourteenth century up to the
seventeenth" but that it "literally exploded into being in Europe,
particularly England, during the eighteenth and especially nineteenth
centuries." [Op. Cit., p. 181] The question arises, what lay behind
this "growing significance"? Did capitalism "explode" due to its
inherently more efficient nature or where there other, non-economic,
forces at work? As we will show, it was most definitely the later one --
capitalism was born not from economic forces but from the political
actions of the social elites which its usury enriched. Unlike artisan
(simple commodity) production, wage labour generates inequalities
and wealth for the few and so will be selected, protected and encouraged
by those who control the state in their own economic and social interests.
The development of capitalism in Europe was favoured by two social elites,
the rising capitalist class within the degenerating medieval cities and
the absolutist state. The medieval city was "thoroughly changed by the
gradual increase in the power of commercial capital, due primarily to
foreign trade. . . By this the inner unity of the commune was loosened,
giving place to a growing caste system and leading necessarily to a
progressive inequality of social interests. The privileged minorities
pressed ever more definitely towards a centralisation of the political
forces of the community. . . Mercantilism in the perishing city republics
led logically to a demand for larger economic units [i.e. to nationalise
the market]; and by this the desire for stronger political forms was
greatly strengthened. . . . Thus the city gradually became a small
state, paving the way for the coming national state." [Rudolf Rocker,
Nationalism and Culture, p. 94]
The rising economic power of the proto-capitalists conflicted with that of
the feudal lords, which meant that the former required help to consolidate
their position. That aid came in the form of the monarchical state. With
the force of absolutism behind it, capital could start the process of
increasing its power and influence by expanding the "market" through
state action.
As far as the absolutist state was concerned, it "was dependent upon the
help of these new economic forces, and vice versa. . . ." "The absolutist
state, whose coffers the expansion of commerce filled. . ., at first
furthered the plans of commercial capital. Its armies and fleets. . .
contributed to the expansion of industrial production because they
demanded a number of things for whose large-scale production the shops
of small tradesmen were no longer adapted. Thus gradually arose the
so-called manufactures, the forerunners of the later large industries."
[Op. Cit., p. 117-8]
Some of the most important state actions from the standpoint of early
industry were the so-called Enclosure Acts, by which the "commons" -- the
free farmland shared communally by the peasants in most rural villages --
was "enclosed" or incorporated into the estates of various landlords as
private property (see section F.8.3). This ensured a pool of landless
workers who had no option but to sell their labour to capitalists. Indeed,
the widespread independence caused by the possession of the majority of
households of land caused the rising class of merchants to complain
"that men who should work as wage-labourers cling to the soil, and in
the naughtiness of their hearts prefer independence as squatters to
employment by a master." [R.H Tawney, cited by Allan Elgar in The
Apostles of Greed, p. 12]
In addition, other forms of state aid ensured that capitalist firms got
a head start, so ensuring their dominance over other forms of work (such
as co-operatives). A major way of creating a pool of resources that
could be used for investment was the use of mercantilist policies which
used protectionist measures to enrich capitalists and landlords at the
expense of consumers and their workers. For example, one of most common
complaints of early capitalists was that workers could not turn up to
work regularly. Once they had worked a few days, they disappeared as
they had earned enough money to live on. With higher prices for food,
caused by protectionist measures, workers had to work longer and harder
and so became accustomed to factory labour. In addition, mercantilism
allowed native industry to develop by barring foreign competition and
so allowed industrialists to reap excess profits which they could then
use to increase their investments. In the words of Marian-socialist
economic historian Maurice Dobbs:
"In short, the Mercantile System was a system of State-regulated exploitation
through trade which played a highly important rule in the adolescence of
capitalist industry: it was essentially the economic policy of an age of
primitive accumulation." [Studies in Capitalism Development, p. 209]
This process of state aid in capitalist development was also seen in the
United States of America. As Edward Herman points out, the "level of
government involvement in business in the United States from the late
eighteenth century to the present has followed a U-shaped pattern: There
was extensive government intervention in the pre-Civil War period (major
subsidies, joint ventures with active government participation and direct
government production), then a quasi-laissez faire period between the
Civil War and the end of the nineteenth century [a period marked by
"the aggressive use of tariff protection" and state supported railway
construction, a key factor in capitalist expansion in the USA], followed
by a gradual upswing of government intervention in the twentieth century,
which accelerated after 1930." [Corporate Control, Corporate Power,
p. 162]
Such intervention ensured that income was transferred from workers to
capitalists. Under state protection, America industrialised by forcing
the consumer to enrich the capitalists and increase their capital stock.
"According to one study, of the tariff had been removed in the 1830s
'about half the industrial sector of New England would have been
bankrupted' . . . the tariff became a near-permanent political
institution representing government assistance to manufacturing. It
kept price levels from being driven down by foreign competition and
thereby shifted the distribution of income in favour of owners of
industrial property to the disadvantage of workers and customers."
[Richard B. Du Boff, Accumulation and Power, p. 56]
This protection was essential, for as Du Boff notes, the "end of the
European wars in 1814 . . . reopened the United States to a flood of
British imports that drove many American competitors out of business.
Large portions of the newly expanded manufacturing base were wiped out,
bringing a decade of near-stagnation." Unsurprisingly, the "era of
protectionism began in 1816, with northern agitation for higher
tariffs. . . " [Op. Cit., p. 14, p. 55]
Combined with ready repression of the labour movement and government
"homesteading" acts (see section F.8.5), tariffs were the American
equivalent of mercantilism (which, after all, was above all else a
policy of protectionism, i.e. the use of government to stimulate
the growth of native industry). Only once America was at the top
of the economic pile did it renounce state intervention (just as
Britain did, we must note).
This is not to suggest that government aid was limited to tariffs.
The state played a key role in the development of industry and
manufacturing. As John Zerzan notes, the "role of the State is
tellingly reflected by the fact that the 'armoury system' now rivals
the older 'American system of manufactures' term as the more
accurate to describe the new system of production methods" developed
in the early 1800s. [Elements of Refusal, p. 100] Moreover, the
"lead in technological innovation [during the US Industrial
Revolution] came in armaments where assured government orders
justified high fixed-cost investments in special-pursue machinery
and managerial personnel. Indeed, some of the pioneering effects
occurred in government-owned armouries." [William Lazonick, Competitive
Advantage on the Shop Floor, p. 218] The government also "actively
furthered this process [of "commercial revolution"] with public
works in transportation and communication." [Richard B. Du Boff,
Op. Cit., p. 15]
In addition to this "physical" aid, "state government provided critical
help, with devices like the chartered corporation" [Ibid.] and,
as we noted in section B.2.5, changes in the legal system which
favoured capitalist interests over the rest of society.
Interestingly, there was increasing inequality between 1840 and 1860 in
the USA This coincided with the victory of wage labour and industrial
capitalism -- the 1820s "constituted a watershed in U.S. life. By
the end of that decade . . .industrialism assured its decisive American
victory, by the end of the 1830s all of its cardinal features were
definitely present." [John Zerzan, Op. Cit., p. 99] This is unsurprising,
for as we have argued many times, the capitalist market tends to
increase, not reduce, inequalities between individuals and classes.
Little wonder the Individualist Anarchists at the time denounced the
way that property had been transformed into "a power [with which] to
accumulate an income" (to use the words of J.K. Ingalls).
Over all, as Paul Ormerod puts it, the "advice to follow pure free-market
polices seems . . . to be contrary to the lessons of virtually the whole
of economic history since the Industrial Revolution . . . every country
which has moved into . . . strong sustained growth . . . has done so
in outright violation of pure, free-market principles." "The model of
entrepreneurial activity in the product market, with judicious state
support plus repression in the labour market, seems to be a good model
of economic development." [The Death of Economics, p. 63]
Thus the social forces at work creating capitalism was a combination of
capitalist activity and state action. But without the support of the
state, it is doubtful that capitalist activity would have been enough
to generate the initial accumulation required to start the economic
ball rolling. Hence the necessity of Mercantilism in Europe and its
modified cousin of state aid, tariffs and "homestead acts" in America.
The honeymoon of interests between the early capitalists and autocratic
kings did not last long. "This selfsame monarchy, which for weighty
reasons sought to further the aims of commercial capital and was. . .
itself aided in its development by capital, grew at last into a
crippling obstacle to any further development of European industry."
[Rudolf Rocker, Op. Cit., p. 117]
This is the social context of the expression "laissez-faire" -- a
system which has outgrown the supports that protected it in its
early stages of growth. Just as children eventually rebel against
the protection and rules of their parents, so the capitalists rebelled
against the over-bearing support of the absolutist state. Mercantilist
policies favoured some industries and harmed the growth of industrial
capitalism in others. The rules and regulations imposed upon those
it did favour reduced the flexibility of capitalists to changing
environments. All in all, mercantilism became more of a hindrance
than a help and so had to be replaced. With the growth of economic
power by the capitalist class, this replacement was made easier.
Errico Malatesta notes, "[t]he development of production, the vast expansion
of commerce, the immeasurable power assumed by money . . . have guaranteed
this supremacy [of economic power over the political power] to the
capitalist class which, no longer content with enjoying the support of
the government, demanded that government arise from its own ranks. A
government which owed its origin to the right of conquest . . . though
subject by existing circumstances to the capitalist class, went on
maintaining a proud and contemptuous attitude towards its now wealthy
former slaves, and had pretensions to independence of domination. That
government was indeed the defender, the property owners' gendarme, but
the kind of gendarmes who think they are somebody, and behave in an
arrogant manner towards the people they have to escort and defend, when
they don't rob or kill them at the next street corner; and the capitalist
class got rid of it . . . [and replaced it] by a government [and state] . . .
at all times under its control and specifically organised to defend that
class against any possible demands by the disinherited." [Anarchy,
pp. 19-20]
Malatesta here indicates the true meaning of "leave us alone," or
"laissez-faire." The absolutist state (not "the state" per se) began
to interfere with capitalists' profit-making activities and authority,
so they determined that it had to go -- as happened, for example, in the
English, French and American revolutions. However, in other ways, state
intervention in society was encouraged and applauded by capitalists. "It
is ironic that the main protagonists of the State, in its political and
administrative authority, were the middle-class Utilitarians, on the other
side of whose Statist banner were inscribed the doctrines of economic
Laissez Faire" [E.P. Thompson, The Making of the English Working Class,
p. 90]. Capitalists simply wanted capitalist states to replace
monarchical states, so that heads of government would follow state
economic policies regarded by capitalists as beneficial to their
class as a whole. And as development economist Lance Taylor argues:
"In the long run, there are no laissez-faire transitions to modern
economic growth. The state has always intervened to create a capitalist
class, and then it has to regulate the capitalist class, and then the
state has to worry about being taken over by the capitalist class,
but the state has always been there." [quoted by Noam Chomsky, Year
501, p. 104]
In order to attack mercantilism, the early capitalists had to ignore
the successful impact of its policies in developing industry and
a "store of wealth" for future economic activity. As William Lazonick
points out, "the political purpose of [Adam Smith's] the Wealth of
Nations was to attack the mercantilist institutions that the British
economy had built up over the previous two hundred years. . . In
his attack on these institutions, Smith might have asked why the
extent of the world market available to Britain in the late eighteenth
century was so uniquely under British control. If Smith had
asked this 'big question,' he might have been forced to grant credit
for [it] . . . to the very mercantilist institutions he was
attacking . . ." Moreover, he "might have recognised the integral
relation between economic and political power in the rise of Britain
to international dominance." Overall, "[w]hate the British advocates
of laissez-faire neglected to talk about was the role that a system
of national power had played in creating conditions for Britain to
embark on its dynamic development path . . . They did not bother to
ask how Britain had attained th[e] position [of 'workshop of the
world'], while they conveniently ignored the on going system of
national power - the British Empire -- that . . . continued to
support Britain's position." [Business Organisation and the Myth
of the Market Economy, p. 2, p. 3, p.5]
Similar comments are applicable to American supporters of laissez
faire who fail to notice that the "traditional" American support for
world-wide free trade is quite a recent phenomenon. It started only
at the end of the Second World War (although, of course, within
America military Keynesian policies were utilised). While American
industry was developing, the country had no time for laissez-faire.
After it had grown strong, the United States began preaching laissez-faire
to the rest of the world -- and began to kid itself about its own
history, believing its slogans about laissez-faire as the secret of
its success. In addition to the tariff, nineteenth-century America
went in heavily for industrial planning--occasionally under that name
but more often in the name of national defence. The military was the
excuse for what is today termed rebuilding infrastructure, picking
winners, promoting research, and co-ordinating industrial growth (as
it still is, we should add).
As Richard B. Du Boff points out, the "anti-state" backlash of the
1840s onwards in America was highly selective, as the general
opinion was that "[h]enceforth, if governments wished to subsidise
private business operations, there would be no objection. But if
public power were to be used to control business actions or if
the public sector were to undertake economic initiatives on its
own, it would run up against the determined opposition of private
capital." [Accumulation and Power, p. 26] In other words, the
state could aid capitalists indirectly (via tariffs, land policy,
repression of the labour movement, infrastructure subsidy and so
on) and it would "leave them alone" to oppress and exploit workers,
exploit consumers, build their industrial empires and so forth.
So, the expression "laissez-faire" dates from the period when
capitalists were objecting to the restrictions that helped create
them in the first place. It has little to do with freedom as such and
far more to do with the needs of capitalist power and profits (as Murray
Bookchin argues, it is an error to depict this "revolutionary era and its
democratic aspirations as 'bourgeois,' an imagery that makes capitalism
a system more committed to freedom, or even ordinary civil liberties,
than it was historically" [From Urbanisation to Cities, p. 180f]).
Takis Fotopoules, in his essay "The Nation-state and the Market",
indicates that the social forces at work in "freeing" the market
did not represent a "natural" evolution towards freedom:
"Contrary to what liberals and Marxists assert, marketisation of the
economy was not just an evolutionary process, following the expansion of
trade under mercantilism . . . modern [i.e. capitalist] markets did not
evolve out of local markets and/or markets for foreign goods . . . the
nation-state, which was just emerging at the end of the Middle Ages,
played a crucial role creating the conditions for the 'nationalisation'
of the market . . . and . . . by freeing the market [i.e. the rich and
proto-capitalists] from effective social control." [Society and Nature,
Vol. 3, pp. 44-45]
The "freeing" of the market thus means freeing those who "own" most of
the market (i.e. the wealthy elite) from "effective social control," but
the rest of society was not as lucky. Peter Kropotkin makes a similar point
in Modern Science and Anarchism, "[w]hile giving the capitalist any
degree of free scope to amass his wealth at the expense of the helpless
labourers, the government has nowhere and never. . .afforded the
labourers the opportunity 'to do as they pleased'." [Kropotkin's
Revolutionary Pamphlets, p. 182]
The one essential form of support the "Libertarian" right wants the state
(or "defence" firms) to provide capitalism is the enforcement of property
rights -- the right of property owners to "do as they like" on their own
property, which can have obvious and extensive social impacts. What
"libertarian" capitalists object to is attempts by others -- workers,
society as a whole, the state, etc. -- to interfere with the authority
of bosses. That this is just the defence of privilege and power (and
not freedom) has been discussed in section B and elsewhere in
section F, so we will not repeat ourselves here.
Samuel Johnson once observed that "we hear the loudest yelps for
liberty among the drivers of Negroes." Our modern "libertarian"
capitalist drivers of wage-slaves are yelping for exactly the
same kind of "liberty" [Johnson quoted in Noam Chomsky,
Year 501, p. 141].
Beyond being a paymaster for new forms of production and social relations
and defending the owners' power, the state intervened economically in
other ways as well. As we noted in section B.2.5, the state played a key
role in transforming the law codes of society in a capitalistic fashion,
ignoring custom and common law to do so. Similarly, the use of tariffs
and the granting of monopolies to companies played an important role
in accumulating capital at the expense of working people, as did the
breaking of unions and strikes by force.
However, one of the most blatant of these acts was the enclosure of
common land. In Britain, by means of the Enclosure Acts, land that
had been freely used by poor peasants for farming their small family
plots was claimed by large landlords as private property. As E.P. Thompson
notes, "Parliament and law imposed capitalist definitions to exclusive
property in land" [Customs in Common, p. 163]. Property rights, which
exclusively favoured the rich, replaced the use rights and free agreement
that had governed peasant's use of the commons. Unlike use rights, which
rest in the individual, property rights require state intervention to
create and maintain.
This stealing of the land should not be under estimated. Without land,
you cannot live and have to sell your liberty to others. This places
those with capital at an advantage, which will tend to increase,
rather than decrease, the inequalities in society (and so place the
landless workers at an increasing disadvantage over time). This
process can be seen from early stages of capitalism. With the
enclosure of the land, an agricultural workforce was created which
had to travel where the work was. This influx of landless ex-peasants
into the towns ensured that the traditional guild system crumbled
and was transformed into capitalistic industry with bosses and wage
slaves rather than master craftsmen and their journeymen. Hence the
enclosure of land played a key role, for "it is clear that economic
inequalities are unlikely to create a division of society into an
employing master class and a subject wage-earning class, unless
access to the mans of production, including land, is by some means
or another barred to a substantial section of the community."
[Maurice Dobbs, Studies in Capitalist Development, p. 253]
The importance of access to land is summarised by this limerick
by the followers of Henry George (a 19th century writer who argued
for a "single tax" and the nationalisation of land). The Georgites
got their basic argument on the importance of land down these few,
excellent lines:
In other words, the circumstances so created by enclosing the land
and enforcing property rights to large estates ensured that capitalists
did not have to point a gun at workers head to get them to work long hours
in authoritarian, dehumanising conditions. In such circumstances,
when the majority are dispossessed and face the threat of starvation,
poverty, homelessness and so on, "initiation of force" is not required.
But guns were required to enforce the system of private property that
created the labour market in the first place, to enforce the enclosure
of common land and protect the estates of the nobility and wealthy.
In addition to increasing the availability of land on the market, the
enclosures also had the effect of destroying working-class independence.
Through these Acts, innumerable peasants were excluded from access to
their former means of livelihood, forcing them to migrate to the cities
to seek work in the newly emerging factories of the budding capitalist
class, who were thus provided with a ready source of cheap labour. The
capitalists, of course, did not describe the results this way, but
attempted to obfuscate the issue with their usual rhetoric about
civilisation and progress. Thus John Bellers, a 17th-century supporter
of enclosures, claimed that commons were "a hindrance to Industry, and .
. . Nurseries of Idleness and Insolence." The "forests and great Commons
make the Poor that are upon them too much like the indians." [quoted by
Thompson, Op. Cit., p. 163] Elsewhere Thompson argues that the commons
"were now seen as a dangerous centre of indiscipline . . . Ideology was
added to self-interest. It became a matter of public-spirited policy
for gentlemen to remove cottagers from the commons, reduce his labourers
to dependence . . ." [The Making of the English Working Class,
pp. 242-3]
The commons gave working-class people a degree of independence which
allowed them to be "insolent" to their betters. This had to be stopped,
as it undermined to the very roots of authority relationships within
society. The commons increased freedom for ordinary people and made
them less willing to follow orders and accept wage labour. The reference
to "Indians" is important, as the independence and freedom of Native
Americans is well documented. The common feature of both cultures was
communal ownership of the means of production and free access to it
(usufruct). This is discussed further in section I.7 (Won't Libertarian
Socialism destroy individuality?)
As the early American economist Edward Wakefield noted in 1833, "where
land is cheap and all are free, where every one who so pleases can easily
obtain a piece of land for himself, not only is labour dear, as respects
the labourer's share of the product, but the difficulty is to obtain
combined labour at any price." [England and America, quoted by Jeremy
Brecher and Tim Costello, Commonsense for Hard Times, p. 24]
The enclosure of the commons (in whatever form it took -- see section
F.8.5 for the US equivalent) solved both problems -- the high cost of
labour, and the freedom and dignity of the worker. The enclosures
perfectly illustrate the principle that capitalism requires a state to
ensure that the majority of people do not have free access to any means
of livelihood and so must sell themselves to capitalists in order to
survive. There is no doubt that if the state had "left alone" the European
peasantry, allowing them to continue their collective farming practices
("collective farming" because, as Kropotkin shows in Mutual Aid, the
peasants not only shared the land but much of the farm labour as well),
capitalism could not have taken hold (see Mutual Aid, pp. 184-189,
for more on the European enclosures). As Kropotkin notes, "[i]nstances
of commoners themselves dividing their lands were rare, everywhere the
State coerced them to enforce the division, or simply favoured the
private appropriation of their lands" by the nobles and wealthy.
[Mutual Aid, p. 188]
Thus Kropotkin's statement that "to speak of the natural death of the
village community [or the commons] in virtue of economical law is as
grim a joke as to speak of the natural death of soldiers slaughtered
on a battlefield." [Op. Cit., p. 189]
Like the more recent case of fascist Chile, "free market" capitalism was
imposed on the majority of society by an elite using the authoritarian
state. This was recognised by Adam Smith when he opposed state
intervention in The Wealth of Nations. In Smith's day, the government
was openly and unashamedly an instrument of wealth owners. Less than
10 per cent of British men (and no women) had the right to vote. When
Smith opposed state interference, he was opposing the imposition of
wealth owners' interests on everybody else (and, of course, how "liberal",
nevermind "libertarian", is a political system in which the many follow
the rules and laws set-down in the so-called interests of all by the
few? As history shows, any minority given, or who take, such power will
abuse it in their own interests). Today, the situation is reversed, with
neo-liberals and right libertarians opposing state interference in the
economy (e.g. regulation of Big Business) so as to prevent the public
from having even a minor impact on the power or interests of the elite.
The fact that "free market" capitalism always requires introduction by an
authoritarian state should make all honest "Libertarians" ask: How "free"
is the "free market"? And why, when it is introduced, do the rich get
richer and the poor poorer? This was the case in Chile (see Section
C.11). For the poverty associated with the rise of capitalism in England
200 years ago, E.P. Thompson's The Making of the English Working Class
provides a detailed discussion. Howard Zinn's A People's History of the
United States describes the poverty associated with 19th-century US
capitalism.
The short answer is no, they are not. While a lot of historical analysis
has been spent in trying to deny the extent and impact of the enclosures,
the simple fact is (in the words of noted historian E.P. Thompson)
enclosure "was a plain enough case of class robbery, played according
to the fair rules of property and law laid down by a parliament of
property-owners and lawyers." [The Making of the English Working Class,
pp. 237-8]
The enclosures were one of the ways that the "land monopoly" was created.
The land monopoly was used to refer to capitalist property rights and
ownership of land by (among others) the Individualist Anarchists. Instead
of an "occupancy and use" regime advocated by anarchists, the land monopoly
allowed a few to bar the many from the land -- so creating a class of
people with nothing to sell but their labour. While this monopoly is less
important these days in developed nations (few people know how to farm)
it was essential as a means of consolidating capitalism. Given the choice,
most people preferred to become independent farmers rather than wage workers
(see next section).
However, the importance of the enclosure movement is downplayed by
supporters of capitalism. Little wonder, for it is something of an
embarrassment for them to acknowledge that the creation of capitalism
was somewhat less than "immaculate" -- after all, capitalism is portrayed
as an almost ideal society of freedom. To find out that an idol has
feet of clay and that we are still living with the impact of its
origins is something pro-capitalists must deny. So is the enclosures
a socialist myth? Most claims that it is flow from the work of the
historian J.D. Chambers' famous essay "Enclosures and the Labour Supply
in the Industrial Revolution." [Economic History Review, 2nd series,
no. 5, August 1953] In this essay, Chambers attempts to refute Karl
Marx's account of the enclosures and the role it played in what Marx
called "primitive accumulation."
We cannot be expected to provide an extensive account of the debate
that has raged over this issue. All we can do is provide a summary
of the work of William Lazonick who presented an excellent reply to
those who claim that the enclosures were an unimportant historical
event. We are drawing upon his summary of his excellent essay "Karl
Marx and Enclosures in England" [Review of Radical Political Economy,
no. 6, Summer, 1974] which can be found in his books Competitive
Advantage on the Shop Floor and Business Organisation and the Myth
of the Market Economy. There are three main claims against the socialist
account of the enclosures. We will cover each in turn.
Firstly, it is often claimed that the enclosures drove the uprooted
cottager and small peasant into industry. However, this was never
claimed. It is correct that the agricultural revolution associated
with the enclosures increased the demand for farm labour as claimed
by Chambers and others. And this is the whole point - enclosures
created a pool of dispossessed labourers who had to sell their
time/liberty to survive. The "critical transformation was not the
level of agricultural employment before and after enclosure but
the changes in employment relations caused by the reorganisation
of landholdings and the reallocation of access to land." [Competitive
Advantage on the Shop Floor, p. 30] Thus the key feature of the
enclosures was that it created a supply for farm labour, a supply
that had no choice but to work for another. This would drive down
wages and increase demand. Moreover, freed from the land, these
workers could later move to the towns in search for better work.
Secondly, it is argued that the number of small farm owners increased,
or at least did not greatly decline, and so the enclosure movement was
unimportant. Again, this misses the point. Small farm owners can still
employ wage workers (i.e. become capitalist farmers as opposed to
"yeomen" -- independent peasant proprietor). As Lazonick notes, "[i]t
is true that after 1750 some petty proprietors continued to occupy
and work their own land. But in a world of capitalist agriculture,
the yeomanry no longer played an important role in determining the
course of capitalist agriculture. As a social class that could
influence the evolution of British economy society, the yeomanry
had disappeared." [Op. Cit., p. 32]
Thirdly, it is often claimed that it was population growth, rather than
enclosures, that caused the supply of wage workers. So was population
growth more important that enclosures? Maurice Dobbs argues that "the
centuries in which a proletariat was most rapidly recruited were apt to
be those of slow rather than of rapid natural increase of population,
and the paucity or plenitude of a labour reserve in different countries
was not correlated with comparable difference in their rates of
population-growth." [Maurice Dobbs, Studies in Capitalist Development,
p. 223] Moreover, the population argument ignores the question of
whether the changes in society caused by enclosures and the rise
of capitalism have an impact on the observed trends towards
earlier marriage and larger families after 1750. Lazonick argues
that "[t]here is reason to believe that they did." [Op. Cit., p. 33]
Also, of course, the use of child labour in the factories created
an economic incentive to have more children, an incentive created
by the developing capitalist system. Overall, Lazonick notes that
"[t]o argue that population growth created the industrial labour
supply is to ignore these momentous social transformations" associated
with the rise of capitalism [Business Organisation and the Myth
of the Market Economy, p. 273].
In other words, there is good reason to think that the enclosures, far
from being some kind of socialist myth, in fact played a key role in
the development of capitalism. As Lazonick himself notes, "Chambers
misunderstood" "the argument concerning the 'institutional creation'
of a proletarianised (i.e. landless) workforce. Indeed, Chamber's
own evidence and logic tend to support the Marxian [and anarchist!]
argument, when it is properly understood." [Op. Cit., p. 273]
The enclosure movement was but one way of creating the "land monopoly"
which ensured the creation of a working class. The circumstances facing
the ruling class in the Americas were distinctly different than in
the Old World and so the "land monopoly" took a different form there.
In the Americas, enclosures were unimportant as customary land rights
did not really exist. Here the problem was that (after the original
users of the land were eliminated, of course) there were vast tracks
of land were available for people to use.
Unsurprisingly, there was a movement towards independent farming and
this pushed up the price of labour, by reducing the supply. Capitalists
found it difficult to find workers willing to work for them at wages
low enough to provide them with sufficient profits. It was due the
difficulty in finding cheap enough labour that capitalists in America
turned to slavery. All things being equal, wage labour is more
productive than slavery. But in early America all things were not
equal. Having access to cheap (indeed, free) land meant that working
people had a choice, and few desired to become wage slaves. Because
of this, capitalists turned to slavery in the South and the "land
monopoly" in the North and West.
This was because, in the words of Maurice Dobbs, it "became clear to
those who wished to reproduce capitalist relations of production in
the new country that the foundation-stone of their endeavour must be
the restriction of land-ownership to a minority and the exclusion of
the majority from any share in [productive] property." [Studies in
Capitalist Development, pp. 221-2] As one radical historian puts
it, "[w]hen land is 'free' or 'cheap'. as it was in different regions
of the United States before the 1830s, there was no compulsion for
farmers to introduce labour-saving technology. As a result,
'independent household production' . . . hindered the development
of capitalism . . . [by] allowing large portions of the population
to escape wage labour." [Charlie Post, "The 'Agricultural Revolution'
in the United States", pp. 216-228, Science and Society, vol. 61,
no. 2, p. 221]
It was precisely this option (i.e. of independent production) that
had to be destroyed in order for capitalist industry to develop.
The state had to violate the holy laws of "supply and demand"
by controlling the access to land in order to ensure the normal
workings of "supply and demand" in the labour market (i.e. that
the bargaining position on the labour market favoured employer
over employee). Once this situation became the typical one (i.e.
when the option of self-employment was effectively eliminated)
a (protectionist based) "laissez-faire" approach could be adopted
and state action used only to protect private property from the
actions of the dispossessed.
So how was this transformation of land ownership achieved?
Instead of allowing settlers to appropriate their own farms as was
the case before the 1830s, the state stepped in once the army had
cleared out the original users. Its first major role was to enforce
legal rights of property on unused land. Land stolen from the Native
Americans was sold at auction to the highest bidders, namely speculators,
who then sold it on to farmers. This process started right "after
the revolution, [when] huge sections of land were bought up by rich
speculators" and their claims supported by the law [Howard Zinn, A
People's History of the United States, p. 125] Thus land which should
have been free was sold to land-hungry farmers and the few enriched
themselves at the expense of the many. Not only did this increase
inequality within society, it also encouraged the development of wage
labour -- having to pay for land would have ensured that many immigrants
remained on the East Coast until they had enough money. Thus a pool of
people with little option but to sell their labour was increased due to
state protection of unoccupied land. That the land usually ended up in
the hands of farmers did not (could not) countermand the shift in class
forces that this policy created.
This was also the essential role of the various "Homesteading Acts" and,
in general, the "Federal land law in the 19th century provided for the
sale of most of the public domain at public auction to the higher bidder
. . . Actual settlers were forced to buy land from speculators, at
prices considerably above the federal minimal price" (which few people
could afford anyway) [Charlie Post, Op. Cit., p. 222]. Little wonder
the Individualist Anarchists supported an "occupancy and use" system
of land ownership as a key way of stopping capitalist and landlord
usury as well as the development of capitalism itself.
This change in the appropriation of land had significant effects on
agriculture and the desirability of taking up farming for immigrants.
As Post notes, "[w]hen the social conditions for obtaining and maintaining
possession of land change, as they did in the midwest between 1830 and
1840, pursuing the goal of preserving [family ownership and control] . . .
produced very different results. In order to pay growing mortgages,
debts and taxes, family farmers were compelled to specialise production
toward cash crops and to market more and more of their output."
[Op. Cit., p. 221-2]
So, in order to pay for land which was formerly free, farmers got
themselves into debt and increasingly turned to the market to pay it
off. Thus, the "Federal land system, by transforming land into a commodity
and stimulating land speculation, made the midwestern farmers dependent
upon markets for the continual possession of their farms." [Charlie
Post, Op. Cit., p. 223] Once on the market, farmers had to invest in
new machinery and this also got them into debt. In the face of a bad
harvest or market glut, they could not repay their loans and their
farms had to be sold to so do so. By 1880, 25% of all farms were
rented by tenants, and the numbers kept rising.
This means that Murray Rothbard's comments that "once the land was
purchased by the settler, the injustice disappeared" are nonsense -- the
injustice was transmitted to other parts of society and this, along
with the legacy of the original injustice, lived on and helped transform
society towards capitalism [The Ethics of Liberty, p. 73]. In
addition, his comments about "the establishment in North America
of a truly libertarian land system" would be one the Individualist
Anarchists would have seriously disagreed with! [Ibid.]
Thus state action, in restricting free access to the land, ensured that
workers were dependent on wage labour. In addition, the "transformation
of social property relations in northern agriculture set the stage for
the 'agricultural revolution' of the 1840s and 1850s . . . [R]ising
debts and taxes forced midwestern family farmers to compete as
commodity producers in order to maintain their land-holding . . .
The transformation . . . was the central precondition for the
development of industrial capitalism in the United States."
[Ibid., p. 226]
In addition to seizing the land and distributing it in such a way
as to benefit capitalist industry, the "government played its part
in helping the bankers and hurting the farmers; it kept the amount
of money - based in the gold supply - steady while the population
rose, so there was less and less money in circulation. The farmer
had to pay off his debts in dollars that were harder to get. The
bankers, getting loans back, were getting dollars worth more than
when they loaned them out - a kind of interest on top of interest.
That was why . . . farmers' movements [like the Individualist
Anarchists, we must add] . . . [talked about] putting more money
in circulation." [Howard Zinn, Op. Cit., p. 278]
Overall, therefore, state action ensured the transformation of
America from a society of independent workers to a capitalist one.
By creating and enforcing the "land monopoly" (of which state
ownership of unoccupied land and its enforcement of landlord
rights were the most important) the state ensured that the
balance of class forces tipped in favour of the capitalist
class. By removing the option of farming your own land, the
US government created its own form of enclosure and the creation
of a landless workforce with little option but to sell its
liberty on the "free market". This, combined with protectionism,
ensured the transformation of American society from a pre-capitalist
one into a capitalist one. They was nothing "natural" about it.
Little wonder the Individualist Anarchist J.K. Ingalls attacked
the "land monopoly" in the following words:
"The earth, with its vast resources of mineral wealth, its spontaneous
productions and its fertile soil, the free gift of God and the common
patrimony of mankind, has for long centuries been held in the grasp of
one set of oppressors by right of conquest or right of discovery; and
it is now held by another, through the right of purchase from them.
All of man's natural possessions . . . have been claimed as property;
nor has man himself escaped the insatiate jaws of greed. The invasion
of his rights and possessions has resulted . . . in clothing property
with a power to accumulate an income." [quoted by James Martin, Men
Against the State, p. 142]
F.8.1 What social forces lay behind the rise of capitalism?
F.8.2 What was the social context of the statement "laissez-faire?"
F.8.3 What other forms did state intervention in creating capitalism take?
To live without access to land
He would have succeeded
But found that he needed
Food, shelter and somewhere to stand.
F.8.4 Aren't the enclosures a socialist myth?
F.8.5 What about the lack of enclosures in the Americas?