"For globalization to work, America must not demur from acting like the omnipotent super-power that it is. The invisible hand of the market never functions without the hidden fist. McDonalds cannot prosper without McDonnel Douglas, the builder of the F-15 fighter. And the hidden fist that guarantees a secure world for the technologies of the Silicon Valley is called the US Army, Air Force, Navy and Marines." -- Thomas Friedman, New York Times, 28 March 1999.
Between the 1750s and the 1840s, a series of disparate economists and philosophers tried to understand, encourage and, when necessary, apologize for the development of capitalism, which became the dominant form of socio-economic organization during this crucial period, especially in England, the birthplace of the Industrial Revolution. These writers, most of whom were English, Scottish or French, later became known as "the classical political economists." In The Invention of Capitalism: Classical Political Economy and the Secret History of Primitive Accumulation, published in 2000 by Duke University Press, Michael Perelman argues that the pantheon of the classical political economists -- a group usually dominated by Adam Smith and, to a lesser extent, by David Ricardo -- should be expanded so that it includes writers traditionally thought to be too obscure, insignificant or unorthodox to be worthy of inclusion.
A Professor of Economics at California State University at Chico and a Marxist scholar of capitalist agriculture, Perelman argues that his proposed expansion has important consequences for both historians of the period and contemporary economists. "The center [of classical political economy itself] is [now] nearer to Sir James Steuart and Edward Gibbon Wakefield than to Smith and Ricardo," Perelman writes. Of the two "stars," Adam Smith gets the worst of it. In Perelman's "new cosmology" of classical political economy, the author of An Inquiry into the Nature and Causes of The Wealth of Nations (published in 1776) "appears less like the sun than a moon, a lesser body whose light is largely reflected from other sources." Though not all of us will want to enter into the fray, these are fighting words, and they're certain to elicit scorn, hostility or stony silence from those who think of the Scottish economist (1723-1790) as the founder of modern economics as well as the first theorist of the "free market."
Unlike David Ricardo, who isn't much discussed these days, Adam Smith still fascinates people. As pointed out by a recent reviewer of Emma Rothschild's Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment (Harvard University Press, 2001), "it's hardly an accident that a contemporary investment guru took 'Adam Smith' as his nom de tube." The name "Adam Smith" still has meaning and authority for contemporary political economists -- whose job, it should be clear, is justifying the unjustifiable -- because Smith was, as Perelman says, a "great master of capitalist apologetics" and uniquely committed to "obfuscating all information that might cast doubt on his ideology." In particular, Smith made sure his readers had no relevant information about the relentless campaign in Great Britain to 1) destroy subsistence farming and "self-provisioning" or self-sufficient households in the rural areas; 2) de-populate these areas and use them for animal husbandry and livestock production, not farming; and 3) put the former inhabitants of these areas to work in commodity-producing factories located in the major city centers. (Taken together, these merciless re-organizations of what Marx called "the social division of labor" constitute the conditions necessary for the invention of capitalism.) As a result of his deliberate omissions, Smith's "charming obfuscations" -- unlike the more realistic, intellectually honest and insightful works by Steuart, Wakefield and others -- have long been extremely useful to those who must promulgate the myth that capitalism is the happy product of a "natural" evolution, and not the ghastly, man-made monstrosity that it really is. Today, in the era of the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement (NAFTA) and other neo-liberal "free trade" agreements, the need to promulgate this myth is stronger than ever.
With Smith and Ricardo in their proper places, Perelman says, it's no longer possible to see "an uncompromising advocacy of laissez-faire" in classical political economy, nor is it possible any longer to cite the precedent of classical political economy as a justification for the adoption of a laissez-faire (a "hands-off" or non-interventionist) approach to stimulating economic growth and development. Perelman writes that, "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 of organizing production" (emphasis added). But what the classical political economists actually discovered were the facts that "the invisible hand" of the market wasn't sufficient and that concerted interventions by the state -- i.e., the creation of new legal frameworks and the apparatuses to enforce the changes in society mandated by these frameworks -- were absolutely necessary, that is, if the new invention (capitalism) was going to work.
It was obvious to the classical political economists that, if left to itself, the free market would require centuries to produce the conditions necessary for the invention of capitalism. A great many things stood in the way of a quick and "orderly" transition from feudalism to capitalism, but especially the remarkable tenacity with which the rural peasants adhered to traditional agricultural practices and subsistence farming. Even when wages in the city were high, the peasants refused to accept factory jobs and stayed on their farms. They preferred a life full of holidays, not manufactured goods. And, when times got rough, the peasants would agree to make salable commodities, but only if they could make the commodities in their homes, out of which they could not be enticed, even when the wages for the exact same work was twice as high in the factories! To the political economists and "moral philosophers" of the 18th century, the peasants weren't within their rights; they revolted because they were rude and uncivilized, morally defective or psychologically impaired. In any case, the peasants were standing in the way of "progress" and "civilization." What capitalist had time to wait around until the peasants evolved on their own? None. Only the state -- that is, only the state's monopoly on and ability to use legalized violence -- could force these people to do what the "economic rationality" of others dictated that they do. And what if the peasants resisted, which they did in fact do? "Send troops into the blazing districts," screamed Edward Gibbon Wakefield in 1831; "proclaim martial law; shoot, cut down, and hang the peasants wholesale, and without discrimination" (emphasis in original).
Following Marx, who originally found a variation of the term in The Wealth of Nations, Perelman calls these concerted interventions by the state instances of "primitive accumulation."
The very sound of the expression, primitive accumulation, drips with poignant echoes of human consequences [Perelman writes]. 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 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.
Both Marx and Perelman need a little help here. It might be clearer if they referred to "state-sponsored organized crime" instead of primitive accumulation. Acting on behalf of a gang or a group of gangs, the state steals valuable resources from its traditional owners. (These resources need not always be land, and can also include self-representations, art, methods of using plants, intellectual property rights, genetic material, "airspace" and sources of water.) The "new owners" of the stolen property use it to finance or equip their enterprises, which not coincidentally encourage the dispossessed to accumulate valuable little scraps, so that they too can one day become rich.
(Before moving on, let us note well that state-sponsored organized crime need not be limited to 18th century Great Britain or contemporary Third World countries. But Michael Perelman isn't sure about primitive accumulation. He asks, "Why does this process, or at least most accounts of Marx's treatment of it, seem to stop so abruptly with the establishment of a capitalist society [in England and then elsewhere in Europe in the 19th century]? Marx himself offered few examples of primitive accumulation that occurred in the nineteenth century outside of colonial lands." Striking out on his own, Perelman notes that "the process of primitive accumulation [...] lasted well into more modern times," and says it can be seen at work in the destruction of small-scale farming by the U.S. government in the 1940s. But he notes in an awkward sentence that, "like Marx, most contemporary references relegate the concept to a distant past, except perhaps in the case of the proletarianization that the less-developed countries of Africa, Asia and Latin America are experiencing." To both introduce and conclude his book, Perelman limits himself to saying that "primitive accumulation played [hic] a continuing role in capitalist development." But this careful wording begs several important questions. Can primitive accumulation or "proletarianization" continue to play a role in capitalist development? Can it re-occur in a nation in which it has already taken place, centuries ago? Can it occur and re-occur at the international level, as well as on the national level? Etc. etc.)
Drawing upon personal diaries, letters written to colleagues and newspapers, and lectures delivered to college classes, i.e., texts that are usually ignored by contemporary political economists, Perelman shows that all of the classical political economists -- yes, even Adam Smith -- believed in, lobbied for and directly benefited from English or French primitive accumulation. Drawing upon these same texts, Perelman is also able to suggest why Adam Smith worked so hard to avoid the subject in The Wealth of Nations. The history of primitive accumulation, especially in Ireland and Scotland in the 17th and 18th centuries, proved that Smith was right when he told his students: "Laws and government may be considered in every case as a combination of the rich to oppress the poor, and preserve to themselves the inequality of the goods which would otherwise be soon destroyed by the attacks of the poor, who if not hindered by the government would soon reduce the others to an equality with themselves by open violence" (emphasis added). It just wouldn't do to discuss or even openly acknowledge the reality of primitive accumulation and the oppression of the poor by the rich, especially in a book such as The Wealth of Nations, which was written as much to curry favor amongst politicians, potential benefactors and Smith's peers, as it was to set forth a theory or methodology of modern economics. And so, Smith carefully followed the advice he himself had given his students ten years before The Wealth of Nations was published: if we desire to sway the opinion of sensitive or unsympathetic readers, "we are not to shock them by affirming what we are satisfied is [in fact] disagreeable, but are to conceal our design and beginning at a distance, bring them on to the main point and having gained the more remote ones we get the nearer ones of consequence."
Smith thus managed to avoid the fate of his fellow Scot, Sir James Steuart, who was imprudent enough to be completely honest. Ten years before Smith's book came out, Steuart published An Inquiry into the Principles of Political Economy, which was not, as Perelman says, based "on the airy fiction of a [voluntary] social contract." It was instead based upon the frank recognition that ancient slave societies such as Sparta offered, in Steuart's own words, "the perfect plan of [modern] political economy." Because they forced people (the poor and the conquered) to produce for others as well as for themselves, slave societies suppressed what Steuart called "idleness" and "the laziness of the people," and thereby allowed the masters and rulers to eat and live luxuriously without doing any work of their own. Thus, Steuart argued, slave societies were able to become much wealthier, stronger and longer-lasting than free societies, in which the poor and the conquered are allowed to produce only as much food as they themselves need. But Steuart thought Sparta to be a "violent" and barbaric republic because it wasn't Christian: e.g., it allowed people to enslave other people. And so Steuart championed capitalism, a putatively enlightened form of slavery in which "men are [instead] forced to labor because they are slaves to their own wants," in particular, to their need for food. But Steuart wasn't willing to wait for plagues, famines or wars to make the British masses hungry enough to submit to capitalist slavery. It was in fact possible that these catastrophes wouldn't come or wouldn't be severe enough to do the job and in precisely the way desired. And so Sir James advocated that the state should forcibly evict the masses of rural peasants from the land, turn their farms into pastures, and thereby create the hunger, poverty and misery necessary to provide capitalism with sufficient numbers of people willing to submit themselves to wage labor. Though he wasn't the only writer of the time to be completely honest about the brutality of the invention of capitalism, Steuart's book was objected to, taken to task and then completely forgotten about. It struck a nerve, the very one Adam Smith tried to soothe.
This is a great story, this "secret history," but Perelman doesn't tell it very well, or, rather, he doesn't tell it nearly as well as it could have been told. It takes him six chapters (almost 140 pages) to set it up. When he finally gets around to telling the story, he puts Steuart first and Smith second. While this ordering is chronologically accurate, it's weak dramatically, especially since Perelman devotes a single chapter to Steuart and spends three chapters on Smith. If Smith is such a willful idiot, why dwell on him? Why not spend three chapters on Sir James, the one who is unjustly obscure and underappreciated? Furthermore, going from Steuart to Smith points the reader in the wrong direction, i.e., away from reality and towards propaganda. But going from Smith to Steuart points the reader in the right direction, i.e., away from the contemplation of the past and towards activism in the present.
Unfortunately, there are other problems with the book's organization. The last of the three chapters on Smith should also have been the last chapter in the book. But it isn't: it's followed by four more chapters (another 110 pages), which introduce the reader to a large number of classical political economists (Benjamin Franklin, Robert Owen, David Ricardo, Thomas Robert Malthus, Robert Torrens, Robert Gourlay, Edward Gibbon Wakefield and John Rae), but without adding anything new to the discussion. If there is to be a second edition of this book, the entire last third of it should be deleted, no harm done. Indeed, the book would be greatly improved by being shortened in this way. The last third is poisoned by turds of lazy writing, something the reader doesn't find elsewhere in the book. "Yes, I know that sections 3 through 5 of Ricardo's first chapter of his Principles are filled with considerations about the durability of capital," Perelman writes irritably at one point, "but by the time we get to the chapter on machinery, all concerns with durability have fallen by the wayside." Who the fuck is he talking to? Himself? An imaginary critic? The reader certainly doesn't know what he's talking about, unless he or she happens to have a copy of Ricardo's Principles on hand and has opened it to the correct pages. Not bloody likely! "Ricardo was, after all, a master of making his models analytically intractable," Perelman writes elsewhere. "Just consider how cleverly he [Ricardo] eliminated any consideration of rent from his value theory." It's as if the reader couldn't possibly be unfamiliar with the nuances of Ricardo's theory of value! But, alas, I was, and so I didn't get Professor Perelman's reference to how clever Ricardo was. Another great example of lazy writing is this sentence, also taken from the last third of the book: "The mere mention of this period, however, seems to suggest an important policy dimension to the model." My thoughts exactly, dude!
But these defects are small when compared to the atrocious manner in which the book ends. In the last chapter, Perelman turns his attention away from the political economists and moral philosophers of the 18th century, and directs it towards some of the 20th century's worst political criminals: V.I. Lenin, Joseph Stalin and Mao Tse Tung. It is clear that the only reason that Perelman didn't include Benito Mussolini and Adolph Hitler in his discussion of "unlikely" supporters of the "Smithian interpretation of history," is the fact that these last two mass murderers were not Marxists, and the others were. The writings and personal authority of Karl Marx are very dear to the author of The Invention of Capitalism. According to Perelman, Marx "intended this [his] historical analysis to refute the contention of classical political economy that markets supposedly work fairly because invisible hands somehow guide the world toward inevitable prosperity and even a higher level of culture," and was successful. Das Capital refutes classical political economy, once and for all, and that's what's important. "In the end," Perelman writes, "Smith's confusion about the origins of capital seems to have served a good purpose, since it put Marx on the track of his own theory of the so-called primitive accumulation." Hooray!
Where does this leave us today, at the beginning of the 21st century? With the most famous Marxists of the 20th century, of course! Lenin?
Lenin [Perelman writes] understood the essence of the classical theory of primitive accumulation. He knew that once the traditional sector becomes sufficiently impoverished, poor peasants will have no choice but to accept wage labor. Lenin [praised Karl Kautsky,] whose work on agriculture [...] demonstrated how political acts, such as cutting off the peasant's freedom to gather firewood or hunt game, increased the number of hours that a family would have to work to produce the same amount of use value.
Stalin?
After Joseph Stalin took over the reigns of power, the imagery of Steuart continued to echo in the Party deliberations. Stalin called for a shift in policy relative to "the bond between town and country, between the working class and the main mass of the peasantry." He emphasized the role of producers' goods delivered to the peasantry rather than the consumer goods, as Steuart had done [...] Stalin's bond, unlike Steuart's, was intended "not to preserve classes but to abolish them." [...] Ultimately, the Russian countryside was also cleared of many "superfluous mouths."
Mao?
Unlike Stalin, Mao believed that the proper arrangements could not be created by fiat. [...] Mao [...] stood for the substitution of the visible bond of politics for the invisible bond of Smith. In this sense, Mao's vision may nonetheless properly be called Smithian. In spite of the best precautions, he recognized that "the spontaneous forces of capitalism have been steadily growing in the countryside."
"Such sentiments accurately echoed Marx's vision," writes Perelman, summing up his little tour of those who overthrew capitalist slavery, only to replace it with communist slavery. "Indeed, Marx's socialism may be said to be the proper heir to the best of classical political economy in this regard."
I'll be honest with you, dear reader. I don't give a shit if Marx inherited the best or the worst of what classical political economy had to offer, or if Lenin, Stalin and Mao positioned themselves or can be positioned on one side or the other of the Steuart/Smith debate. All I care about at this point is the fact that Perelman thinks he can get away with referring to "blind spots" in the vision of contemporary political economy and "the mistakes of the Stalin era," and leave it at that. These kind of lies might have been believed by a few gullible idiots back in the 1930s or 1940s, when American communists could plausibly claim that they didn't know much about what was happening in the Soviet Union. But no one is going to believe them today. When Stalin murdered tens of millions of peasants in the 1930s, he didn't make a "grave error" in understanding the theory of primitive accumulation; he committed a crime against humanity. And if Stalin was a good Marxist or an "echo" of Marx's vision, then Marxism -- like Adam Smith's The Wealth of Nations and Sir James Steuart's Inquiry in the Principles of Political Economy -- is nothing but a justification for mass murder and slavery.
July 2001.
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