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<html>
<head>
<title>F.8 What role did the state take in the creation of capitalism?
</title>
</head>
<p>
<h1>F.8 What role did the state take in the creation of capitalism?</h1>
<p>
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, <i>"the State
. . . and capitalism . . . developed side by side, mutually supporting and
re-enforcing each other."</i> [<b>Kropotkin's Revolutionary Pamphlets</b>, p. 181]
<p>
Numerous writers have made this point. For example, in Karl Polanyi's
flawed masterpiece <b>The Great Transformation</b> we read that <i>"the road to 
the free market was opened and kept open by an enormous increase in
continuous, centrally organised and controlled interventionism"</i> 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:
<p><blockquote>
<i>"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."</i> [<b>Op. Cit.</b>,p. 207]
</blockquote><p>
Or, if Kropotkin seems too committed to be fair, we have John Stuart Mill's 
statement that:
<p><blockquote>
<i>"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. . . "</i> [<b>Principles of Political
Economy</b>, p. 15]
</blockquote><p>
Therefore, when supporters of "libertarian" capitalism say they are 
against the "initiation of force," they mean only <b>new</b> 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, <a href="secD1.html">"Why does  state intervention occur?,"</a> 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 <b>key</b> role in allowing capitalism to develop 
rather than the theory that <i>"previous savings"</i> did so. As the noted
German thinker Franz Oppenheimer argued, <i>"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"</i> while 
<i>"seem[ing] quite plausible"</i> is in fact <i>"utterly mistaken; it is a
'fairly tale,' or it is a class theory used to justify the privileges
of the upper classes."</i> [<b>The State</b>, pp. 5-6]
<p>
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, <i>"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?"</i> [<b>World Orders, Old and New</b>,
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.
<p>
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 <b>that</b>
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 <b>now</b> (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! 
<p>
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 <i>"made no particular distinction between 'bourgeoisie' 
who made use of the state, and bourgeoisie who acted on the free 
market."</i> [<b>The Ethics of Liberty</b>, p. 72]
<p>
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 <b>all</b> 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, <b>all</b> 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 <a href="secB2.html#secb25">B.2.5</a>). 
<p>
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 <b>system</b> and its dynamic nature.
<p>
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 <b>will</b> wither away due to market
forces).
<p>
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.
<p>
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.
<p>
<a name="secf81"><h2>F.8.1 What social forces lay behind the rise of capitalism?</h2>
<p>
Capitalist society is a relatively recent development. As Murray Bookchin 
points out, for a <i>"long era, perhaps spanning more than five centuries,"</i> 
capitalism <i>"coexisted with feudal and simple commodity relationships"</i>
in Europe. He argues that this period <i>"simply cannot be treated as 
'transitional' without reading back the present into the past."</i> [<b>From 
Urbanisation to Cities</b>, p. 179] In other words, capitalism was not
a inevitable outcome of "history" or social evolution.
<p>
He goes on to note that capitalism existed <i>"with growing significance
in the mixed economy of the West from the fourteenth century up to the
seventeenth"</i> but that it <i>"literally exploded into being in Europe, 
particularly England, during the eighteenth and especially nineteenth
centuries."</i> [<b>Op. Cit.</b>, p. 181] The question arises, what lay behind 
this <i>"growing significance"</i>? Did capitalism <i>"explode"</i> 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.
<p>
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 <i>"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."</i> [Rudolf Rocker,
<b>Nationalism and Culture</b>, p. 94]
<p>
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. 
<p> 
As far as the absolutist state was concerned, it <i>"was dependent upon the
help of these new economic forces, and vice versa. . . ." "The absolutist
state,"</i> Rocker argues, <i>"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."</i> 
[<b>Op. Cit.</b>, p. 117-8]
<p> 
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 <a href="secF8.html#secf83">F.8.3</a>). 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
<i>"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."</i> [R.H Tawney, cited by Allan Elgar in <b>The 
Apostles of Greed</b>, p. 12]
<p>
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:
<p><blockquote>
<i>"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."</i> [<b>Studies in Capitalism Development</b>, p. 209]
</blockquote><p>
As Rocker summarises, <i>"when abolutism had victoriously overcome all 
opposition to national unification, but its furthering of mercantilism 
and economic monopoly it gave the whole social evolution a direction 
which could only lead to capitalism."</i> [<b>Op. Cit.</b>, pp. 116-7]
</p>
This process of state aid in capitalist development was also seen in the
United States of America. As Edward Herman points out, the <i>"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."</i> [<b>Corporate Control, Corporate Power</b>, 
p. 162]
<p>
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.
<i>"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."</i> 
[Richard B. Du Boff, <b>Accumulation and Power</b>, p. 56]
<p>
This protection was essential, for as Du Boff notes, the <i>"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."</i> Unsurprisingly, the <i>"era of
protectionism began in 1816, with northern agitation for higher
tariffs. . . "</i> [<b>Op. Cit.</b>, p. 14, p. 55]
<p>
Combined with ready repression of the labour movement and government 
"homesteading" acts (see section <a href="secF8.html#secf85">F.8.5</a>), 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). 
<p>
This is <b>not</b> 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 <i>"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"</i> developed
in the early 1800s. [<b>Elements of Refusal</b>, p. 100] Moreover, the
<i>"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."</i> [William Lazonick, <b>Competitive
Advantage on the Shop Floor</b>, p. 218] The government also <i>"actively 
furthered this process [of "commercial revolution"] with public
works in transportation and communication."</i> [Richard B. Du Boff,
<b>Op. Cit.</b>, p. 15]
<p>
In addition to this "physical" aid, <i>"state government provided critical
help, with devices like the chartered corporation"</i> [<b>Ibid.</b>] and,
as we noted in section <a href="secB2.html#secb25">B.2.5</a>, changes in the legal system which 
favoured capitalist interests over the rest of society.
<p>
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 <i>"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."</i> [John Zerzan, <b>Op. Cit.</b>, 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 <i>"a power [with which] to 
accumulate an income"</i> (to use the words of J.K. Ingalls).
<p>
Over all, as Paul Ormerod puts it, the <i>"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."</i>  [<b>The Death of Economics</b>, p. 63]
<p>
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.
<p>
<a name="secf82"><h2>F.8.2 What was the social context of the statement "laissez-faire?"</h2>
<p>
The honeymoon of interests between the early capitalists and autocratic
kings did not last long. <i>"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."</i> 
[Rudolf Rocker, <b>Nationalism and Culture</b>, p. 117] 
<p>
This is the social context of the expression <i>"laissez-faire"</i> -- 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. As Rocker argues, <i>"no matter how the abolutist state 
strove, in its own interest, to meety the demands of commerce, it
still put on industry countless fetters which became gradually
more and more oppressive . . . [it] became an unbearable burden . . .
which paralysed all economic and social life."</i> [<i>Op. Cit.</i>, 
p. 119] All in all, mercantilism became more of a hindrance than a 
help and so had to be replaced. With the growth of economic and
social power by 
the capitalist class, this replacement was made easier.
<p>
Errico Malatesta notes, <i>"[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."</i> [<b>Anarchy</b>, 
pp. 19-20]
<p>
Malatesta here indicates the true meaning of <i>"leave us alone,"</i> or
<i>"laissez-faire."</i> The <b>absolutist</b> 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. <i>"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"</i> [E.P. Thompson, <b>The Making of the English Working Class</b>, 
p. 90]. Capitalists simply wanted <b>capitalist</b> 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:
<p><blockquote>
<i>"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."</i> [quoted by Noam Chomsky, <b>Year
501</b>, p. 104]
</blockquote><p>
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, <i>"the political purpose of [Adam Smith's] the <b>Wealth of 
Nations</b> 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 <b>so uniquely under British control.</b> 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 . . ."</i> Moreover, he <i>"might have recognised the integral
relation between economic and political power in the rise of Britain
to international dominance."</i> Overall, <i>"[w]hat 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."</i> [<b>Business Organisation and the Myth 
of the Market Economy</b>, p. 2, p. 3, p.5]
<p>
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, <b>within</b>
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). 
<p>
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 <i>"[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."</i> [<b>Accumulation and Power</b>, 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.
<p>
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 <i>"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"</i> [<b>From Urbanisation to Cities</b>, p. 180f]). 
Takis Fotopoules, in his essay <i>"The Nation-state and the Market"</i>, 
indicates that the social forces at work in "freeing" the market 
did not represent a "natural" evolution towards freedom:
<p><blockquote>
<i>"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."</i> [<b>Society and Nature</b>,
Vol. 3, pp. 44-45]
</blockquote><p>
The "freeing" of the market thus means freeing those who "own" most of 
the market (i.e. the wealthy elite) from <i>"effective social control,"</i> but
the rest of society was not as lucky. Peter Kropotkin makes a similar point
in <b>Modern Science and Anarchism</b>, <i>"[w]hile giving the capitalist any
degree of free scope to amass his wealth at the expense of the helpless
labourers, the government has <b>nowhere</b> and <b>never</b>. . .afforded the
labourers the opportunity 'to do as they pleased'."</i> [<b>Kropotkin's
Revolutionary Pamphlets</b>, p. 182]
<p>
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 
<b>not</b> freedom) has been discussed in <a href="secBcon.html">section B</a> and elsewhere in <a href="secFcon.html">
section F</a>, so we will not repeat ourselves here.
<p>
Samuel Johnson once observed that <i>"we hear the loudest <b>yelps</b> for 
liberty among the drivers of Negroes."</i> Our modern "libertarian" 
capitalist drivers of wage-slaves are yelping for exactly the
same kind of "liberty." [Johnson quoted in Noam Chomsky, 
<b>Year 501</b>, p. 141]
<p>
<a name="secf83"><h2>F.8.3 What other forms did state intervention in creating capitalism take?</h2>
<p>
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 <a href="secB2.html#secb25">B.2.5</a>, 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. 
<p>
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, <i>"Parliament and law imposed capitalist definitions to exclusive
property in land"</i> [<b>Customs in Common</b>, 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.
<p>
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 <i>"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."</i> 
[Maurice Dobbs, <b>Studies in Capitalist Development</b>, p. 253]
<p>
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 <i>"single tax"</i> and the nationalisation of land). The Georgites 
got their basic argument on the importance of land down these few, 
excellent lines:
<p><center><i>
		A college economist planned<br>
		To live without access to land<br>
		He would have succeeded<br>
		But found that he needed<br>
		Food, shelter and somewhere to stand.<br>
<p></center></i>
Thus the Individualist (and other) anarchists' concern over the
<i>"land monopoly"</i> of which the Enclosure Acts were but one part. 
The land monopoly, to use Tucker's words, <i>"consists in the 
enforcement by government of land titles which do not rest upon
personal occupancy and cultivation."</i> [<b>The Anarchist Reader</b>,
p. 150] It is important to remember that wage labour first 
developed on the land and it was the protection of land titles
of landlords and nobility, combined with enclosure, that meant
people could not just work their own land. 
<p>
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 <b>not required.</b>
But guns <b>were</b> 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.
<p>
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 <i>"a hindrance to Industry, and .
. . Nurseries of Idleness and Insolence."</i> The <i>"forests and great Commons
make the Poor that are upon them too much like the <b>indians.</b>"</i> [quoted by
Thompson, <b>Op. Cit.</b>, p. 163] Elsewhere Thompson argues that the commons
<i>"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 . . ."</i> [<b>The Making of the English Working Class</b>, 
pp. 242-3]
<p>
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 <b>increased</b> 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 (<a href="secI7.html">Won't Libertarian 
Socialism destroy individuality?</a>)
<p>
As the early American economist Edward Wakefield noted in 1833, <i>"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."</i> [<b>England and America</b>, quoted by Jeremy
Brecher and Tim Costello, <b>Commonsense for Hard Times</b>, p. 24]
<p>
The enclosure of the commons (in whatever form it took -- see section
<a href="secF8.html#secf85">F.8.5</a> 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 <b>Mutual Aid</b>, the
peasants not only shared the land but much of the farm labour as well), 
capitalism could not have taken hold (see <b>Mutual Aid</b>, pp. 184-189, 
for more on the European enclosures). As Kropotkin notes, <i>"[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"</i> by the nobles and wealthy. 
[<b>Mutual Aid</b>, p. 188]
<p>
Thus Kropotkin's statement that <i>"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."</i> [<b>Op. Cit.</b>, p. 189]
<p>
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 <b>The Wealth of Nations</b>. 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 <b>will</b> 
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. 
<p>
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 
<a href="secC11.html">Section C.11</a>). For the poverty associated with the rise of capitalism in England
200 years ago, E.P. Thompson's <b>The Making of the English Working Class</b>
provides a detailed discussion. Howard Zinn's <b>A People's History of the
United States</b> describes the poverty associated with 19th-century US
capitalism.
<p>
<a name="secf84"><h2>F.8.4 Aren't the enclosures a socialist myth?</h2>
<p>
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 <i>"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."</i> [<b>The Making of the English Working Class</b>,
pp. 237-8]
<p>
The enclosures were one of the ways that the <i>"land monopoly"</i> 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 <i>"occupancy and use"</i> 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 <a href="secF8.html#secf85">next section</a>).
<p>
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 <b>is</b> the enclosures
a socialist myth? Most claims that it is flow from the work of the
historian J.D. Chambers' famous essay <i>"Enclosures and the Labour Supply
in the Industrial Revolution."</i> [<b>Economic History Review</b>, 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 <i>"primitive accumulation."</i>
<p>
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 <i>"Karl
Marx and Enclosures in England"</i> [<b>Review of Radical Political Economy</b>,
no. 6, Summer, 1974] which can be found in his books <b>Competitive
Advantage on the Shop Floor</b> and <b>Business Organisation and the Myth 
of the Market Economy</b>. There are three main claims against the socialist
account of the enclosures. We will cover each in turn.
<p>
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 <b>increased</b> 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 <i>"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."</i> [<b>Competitive
Advantage on the Shop Floor</b>, 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.
<p>
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>"[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."</i> [<b>Op. Cit.</b>, p. 32]
<p>
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 <i>"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."</i> [<b>Studies in Capitalist Development</b>,
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 <i>"[t]here is reason to believe that they did."</i> [<b>Op. Cit.</b>, 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 
<i>"[t]o argue that population growth created the industrial labour
supply is to ignore these momentous social transformations"</i> associated
with the rise of capitalism [<b>Business Organisation and the Myth 
of the Market Economy</b>, p. 273].
<p>
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, <i>"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."</i> [<b>Op. Cit.</b>, p. 273]
<p>
<a name="secf85"><h2>F.8.5 What about the lack of enclosures in the Americas?</h2>
<p>
The enclosure movement was but one way of creating the <i>"land monopoly"</i>
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 tracts 
of land available for people to use. 
<p>
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 <b>is</b> more
productive than slavery. But in early America all things were <b>not</b>
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. 
<p>
This was because, in the words of Maurice Dobbs, it <i>"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."</i> [<b>Studies in
Capitalist Development</b>, pp. 221-2] As one radical historian puts
it, <i>"[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."</i> [Charlie Post, <i>"The 'Agricultural Revolution' 
in the United States"</i>, pp. 216-228, <b>Science and Society</b>, vol. 61, 
no. 2, p. 221]
<p>
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.
<p>
So how was this transformation of land ownership achieved?
<p>
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 <i>"after
the revolution, [when] huge sections of land were bought up by rich
speculators"</i> and their claims supported by the law [Howard Zinn, <b>A 
People's History of the United States</b>, 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.
<p>
This was also the essential role of the various "Homesteading Acts" and, 
in general, the <i>"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"</i> (which few people 
could afford anyway) [Charlie Post, <b>Op. Cit.</b>, p. 222]. Little wonder 
the Individualist Anarchists supported an <i>"occupancy and use"</i> system 
of land ownership as a key way of stopping capitalist and landlord
usury as well as the development of capitalism itself.
<p>
This change in the appropriation of land had significant effects on
agriculture and the desirability of taking up farming for immigrants.
As Post notes, <i>"[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."</i> 
[<b>Op. Cit.</b>, p. 221-2]
<p>
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 <i>"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."</i> [Charlie
Post, <b>Op. Cit.</b>, 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. 
<p>
This means that Murray Rothbard's comment that <i>"once the land was 
purchased by the settler, the injustice disappeared"</i> is 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 [<b>The Ethics of Liberty</b>, p. 73]. In 
addition, his comments about <i>"the establishment in North America 
of a truly libertarian land system"</i> would be one the Individualist 
Anarchists would have seriously disagreed with! [<b>Ibid.</b>]
<p>
Thus state action, in restricting free access to the land, ensured that 
workers were dependent on wage labour. In addition, the  <i>"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."</i> 
[Charlie Post, <b>Ibid.</b>, p. 226]
<p>
In addition to seizing the land and distributing it in such a way
as to benefit capitalist industry, the <i>"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."</i> [Howard Zinn, <b>Op. Cit.</b>, p. 278]
<p>
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.
<p>
Little wonder the Individualist Anarchist J.K. Ingalls attacked
the "land monopoly" in the following words:
<p><blockquote>
<i>"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."</i> [quoted by James Martin, <b>Men 
Against the State</b>, p. 142]
</blockquote><p>
<a name="secf86"><h2>F.8.6 How did working people view the rise of capitalism?</h2>
<p>
The best example of how hated capitalism was can be seen by the rise 
and spread of the socialist movement, in all its many forms, across the
world. It is no coincidence that the development of capitalism also saw
the rise of socialist theories. However, in order to fully understand how 
different capitalism was from previous economic systems, we will consider 
early capitalism in the US, which for many "Libertarians" is <b>the</b> example 
of the "capitalism-equals-freedom" argument.
<p>
Early America was pervaded by artisan production -- individual ownership
of the means of production. Unlike capitalism, this system is <b>not</b>
marked by the separation of the worker from the means of life. Most
people did not have to work for another, and so did not. As Jeremy
Brecher notes, in 1831 the <i>"great majority of Americans were farmers
working their own land, primarily for their own needs. Most of the rest
were self-employed artisans, merchants, traders, and professionals. 
Other classes - employees and industrialists in the North, slaves and
planters in the South - were relatively small. The great majority of
Americans were independent and free from anybody's command."</i> [<b>Strike!</b>,
p. xxi] These conditions created the high cost of combined (wage) 
labour which ensured the practice of slavery existed.
<p>
However, toward the middle of the 19th century the economy began to 
change. Capitalism began to be imported into American society as the 
infrastructure was improved, which allowed markets for manufactured 
goods to grow. Soon, due to (state-supported) capitalist competition, 
artisan production was replaced by wage labour. Thus "evolved" modern 
capitalism. Many workers understood, resented, and opposed their 
increasing subjugation to their employers (<i>"the masters"</i>, to use Adam 
Smith's expression), which could not be reconciled with the principles 
of freedom and economic independence that had marked American life and 
sunk deeply into mass consciousness during the days of the early economy. 
In 1854, for example, a group of skilled piano makers wrote that <i>"the day 
is far distant when they [wage earners] will so far forget what is due to 
manhood as to glory in a system forced upon them by their necessity and in 
opposition to their feelings of independence and self-respect. May the 
piano trade be spared such exhibitions of the degrading power of the day 
[wage] system."</i> [quoted by Brecher and Costello, <b>Common Sense for Hard 
Times</b>, p. 26]
<p>
Clearly the working class did not consider working for a daily wage, in
contrast to working for themselves and selling their own product, to be 
a step forward for liberty or individual dignity. The difference between 
selling the product of one's labour and selling one's labour (i.e.
oneself) was seen and condemned (<i>"[w]hen the producer . . . sold his
product, he retained himself. But when he came to sell his labour, he
sold himself . . . the extension [of wage labour] to the skilled
worker was regarded by him as a symbol of a deeper change"</i> [Norman
Ware, <b>The Industrial Worker, 1840-1860</b>, p. xiv]). Indeed, one group
of workers argued that they were <i>"slaves in the strictest sense of
the word"</i> as they had <i>"to toil from the rising of the sun to the going
down of the same for our masters - aye, masters, and for our daily
bread"</i> [Quoted by Ware, <b>Op. Cit.</b>, p. 42] and another argued that <i>"the
factory system contains in itself the elements of slavery, we think
no sound reasoning can deny, and everyday continues to add power to 
its incorporate sovereignty, while the sovereignty of the working
people decreases in the same degree."</i> [quoted by Brecher and Costello,
<b>Op. Cit.</b>, p. 29]
<p>
Almost as soon as there were wage workers, there were strikes, machine
breaking, riots, unions and many other forms of resistance. John Zerzan's 
argument that there was a <i>"relentless assault on the worker's historical 
rights to free time, self-education, craftsmanship, and play was at 
the heart of the rise of the factory system"</i> is extremely accurate 
[<b>Elements of Refusal</b>, p. 105]. And it was an assault that workers 
resisted with all their might. In response to being subjected to the
"law of value," workers rebelled and tried to organise themselves to 
fight the powers that be and to replace the system with a co-operative 
one. As the printer's union argued, <i>"[we] regard such an organisation 
[a union] not only as an agent of immediate relief, but also as an 
essential to the ultimate destruction of those unnatural relations at 
present subsisting between the interests of the employing and the 
employed classes. . . .[W]hen labour determines to sell itself no
longer to speculators, but to become its own employer, to own and 
enjoy itself and the fruit thereof, the necessity for scales of prices 
will have passed away and labour will be forever rescued from the 
control of the capitalist."</i> [quoted by Brecher and Costello, <b>Op. Cit.</b>, 
pp. 27-28]
<p>
Little wonder, then, why wage labourers considered capitalism as a form 
of <i>"slavery"</i> and why the term <i>"wage slavery"</i> became so popular 
in the anarchist movement. It was just reflecting the feelings of those
who experienced the wages system at first hand and joined the socialist
and anarchist movements. As labour historian Norman Ware notes, the 
<i>"term 'wage slave' had a much better standing in the forties [of the 
19th century] than it has today. It was not then regarded as an empty
shibboleth of the soap-box orator. This would suggest that it has
suffered only the normal degradation of language, has become a <b>cliche</b>,
not that it is a grossly misleading characterisation."</i> [<b>Op. Cit.</b>, p. xvf]
<p>
These responses of workers to the experience of wage labour is important
to show that capitalism is by no means "natural." The fact is the first
generation of workers tried to avoid wage labour is at all possible as
they hated the restrictions of freedom it imposed upon them. They were
perfectly aware that wage labour was wage slavery -- that they were
decidedly <b>unfree</b> during working hours and subjected to the will of
another. While many working people now are accustomed to wage labour
(while often hating their job) the actual process of resistance to
the development of capitalism indicates well its inherently authoritarian
nature. Only once other options were closed off and capitalists given 
an edge in the "free" market by state action did people accept and 
become accustomed to wage labour. 
<p>
Opposition to wage labour and factory fascism was/is widespread and seems
to occur wherever it is encountered. <i>"Research has shown"</i>, summarises
William Lazonick, <i>"that the 'free-born Englishman' of the eighteenth
century - even those who, by force of circumstance, had to submit to
agricultural wage labour - tenaciously resisted entry into the
capitalist workshop."</i> [<b>Business Organisation and the Myth of the 
Market Economy</b>, p. 37] British workers shared the dislike of wage
labour of their American cousins. A <i>"Member of the Builders' Union"</i>
in the 1830s argued that the trade unions <i>"will not only strike
for less work, and more wages, but will ultimately <b>abolish wages</b>,
become their own masters and work for each other; labour and capital
will no longer be separate but will be indissolubly joined together
in the hands of workmen and work-women."</i> [quoted by Geoffrey Ostergaard,
<B>The Tradition of Workers' Control</b>, p. 133] This is unsurprising,
for as Ostergaard notes, <i>"the workers then, who had not been swallowed
up whole by the industrial revolution, could make critical comparisons
between the factory system and what preceded it."</i> [<b>Op. Cit.</b>, p. 134]
While wage slavery may seem "natural" today, the first generation of
wage labourers saw the transformation of the social relationships they
experienced in work, from a situation in which they controlled their
own work (and so themselves) to one in which <b>others</b> controlled them,
and they did not like it. However, while many modern workers instinctively
hate wage labour and having bosses, without the awareness of some other
method of working, many put up with it as "inevitable." The first 
generation of wage labourers had the awareness of something else
(although, of course, a flawed something else) and this gave then
a deep insight into the nature of capitalism and produced a deeply
radical response to it and its authoritarian structures.
<p>
Far from being a "natural" development, then, capitalism was imposed on 
a society of free and independent people by state action. Those workers
alive at the time viewed it as <i>"unnatural relations"</i> and organised to
overcome it. These feelings and hopes still exist, and will continue to
exist until such time as we organise and <i>"abolish the wage system"</i> (to
quote the IWW preamble) and the state that supports it.
<p>
<a name="secf87"><h2>F.8.7 Why is the history of capitalism important?</h2>
<p>
Simply because it provides us with an understanding of whether that system
is "natural" and whether it can be considered as just and free. If the
system was created by violence, state action and other unjust means then
the apparent "freedom" which we currently face within it is a fraud, a
fraud masking unnecessary and harmful relations of domination, oppression
and exploitation. Moreover, by seeing how capitalist relationships were
viewed by the first generation of wage slaves reminds us that just because
many people have adjusted to this regime and consider it as normal (or
even natural) it is nothing of the kind.
<p>
Murray Rothbard is well aware of the importance of history. He considered
the <i>"moral indignation"</i> of socialism arises from the argument <i>"that the 
capitalists have stolen the rightful property of the workers, and therefore
that existing titles to accumulated capital are unjust."</i> He argues that 
given <i>"this hypothesis, the remainder of the impetus for both Marxism and 
anarchosyndicalism follow quote logically."</i> [<b>The Ethics of Liberty</b>, 
p. 52]
<p>
So some right-libertarians are aware that the current property owners
have benefited extensively from violence and state action in the past.
Murray Rothbard argues (in <b>The Ethics of Liberty</b>, p. 57) that if the 
just owners cannot be found for a property, then the property simply 
becomes again unowned and will belong to the first person to appropriate 
and utilise it. If the current owners are not the actual criminals then 
there is no reason at all to dispossess them of their property; if the 
just owners cannot be found then they may keep the property as the 
first people to use it (of course, those who own capital and those who
use it are usually different people, but we will ignore this obvious
point).
<p>
Thus, since all original owners and the originally dispossessed are long 
dead nearly all current title owners are in just possession of their 
property except for recently stolen property. The principle is simple, 
dispossess the criminals, restore property to the dispossessed if they 
can be found otherwise leave titles where they are (as Native American
tribes owned the land <b>collectively</b> this could have an interesting effect 
on such a policy in the USA. Obviously tribes that were wiped out need
not apply, but would such right-libertarian policy recognise such 
collective, non-capitalist ownership claims? We doubt it, but we could
be wrong -- the Libertarian Party Manifesto states that their "just"
property rights will be restored. And who defines "just"? And given 
that unclaimed federal land will be given to Native Americans, its
seems pretty likely that the <b>original</b> land will be left alone).
<p>
Of course, that this instantly gives an advantage to the wealthy on the
new "pure" market is not mentioned. The large corporations that, via
state protection and support, built their empires and industrial base
will still be in an excellent position to continue to dominate the 
market. Wealthy land owners, benefiting from the effects of state
taxation and rents caused by the "land monopoly" on farmstead failures,
will keep their property. The rich will have a great initial advantage
and this may be more than enough to maintain them in there place. After
all, exchanges between worker and owner tend to reinforce existing 
inequalities, <b>not</b> reduce them (and as the owners can move their
capital elsewhere or import new, lower waged, workers from across the
world, its likely to stay that way).
<p>
So Rothbard's "solution" to the problem of past force seems to be 
(essentially) a justification of existing property titles and not 
a serious attempt to understand or correct past initiations of force 
that have shaped society into a capitalist one and still shape it today. 
The end result of his theory is to leave things pretty much as they are, 
for the past criminals are dead and so are their victims. 
<p>
However, what Rothbard fails to note is that the <b>results</b> of this state 
action and coercion are still with us. He totally fails to consider
that the theft of productive wealth has a greater impact on society
than the theft itself. The theft of <b>productive</b> wealth shapes 
society in so many ways that <b>all</b> suffer from it (including current
generations). This (the externalities generated by theft) cannot be
easily undone by individualistic "solutions". 
<p>
Let us take an example somewhat more useful that the one Rothbard uses
(namely, a stolen watch). A watch cannot really be used to generate 
wealth (although if I steal a watch, sell it and buy a winning lottery 
ticket, does that mean I can keep the prize after returning the money
value of your watch to you? Without the initial theft, I would not have
won the prize but obviously the prize money far exceeds the amount
stolen. Is the prize money mine?). Let us take a tool of production
rather than a watch.
<p>
Let assume a ship sinks and 50 people get washed ashore on an island. One
woman has foresight to take a knife from the ship and falls unconscious
on the beach. A man comes along and steals her knife. When the woman 
awakes she cannot remember if she had managed to bring the knife ashore 
with her or not. The man maintains that he brought it with him and no one
else saw anything. The survivors decide to split the island equally 
between them and work it separately, exchanging goods via barter. 
<p>
However, the man with the knife has the advantage and soon carves 
himself a house and fields from the wilderness. Seeing that they need
the knife and the tools created by the knife to go beyond mere existing, 
some of the other survivors hire themselves to the knife owner. Soon 
he is running a surplus of goods, including houses and equipment which
he decides to hire out to others. This surplus is then used to tempt 
more and more of the other islanders to work for him, exchanging their 
land in return for the goods he provides. Soon he owns the whole island 
and never has to work again. His hut is well stocked and extremely 
luxurious. His workers face the option of following his orders or 
being fired (i.e. expelled from the island and so back into the water 
and certain death). Later, he dies and leaves his knife to his son. 
The woman whose knife it originally was had died long before, childless.
<p>
Note that the theft did not involve taking any land. All had equal access
to it. It was the initial theft of the knife which provided the man with
market power, an edge which allowed him to offer the others a choice
between working by themselves or working for him. By working for him
they did "benefit" in terms of increased material wealth (and also
made the thief better off) but the accumulate impact of unequal 
exchanges turned them into the effective slaves of the thief.
<p>
Now, would it <b>really</b> be enough to turn the knife over to the whoever
happened to be using it once the theft was discovered (perhaps the 
thief made a death-bed confession). Even if the woman who had originally
taken it from the ship been alive, would the return of the knife <b>really</b>
make up for the years of work the survivors had put in enriching the
the thief or the "voluntary exchanges" which had resulted in the thief 
owning all the island? The equipment people use, the houses they life
in and the food they eat are all the product of many hours of collective
work. Does this mean that the transformation of nature which the knife
allowed remain in the hands of the descendants of the thief or become
the collective property of all? Would dividing it equally between all
be fair? Not everyone worked equally hard to produce it. So we have a
problem -- the result of the initial theft is far greater than the 
theft considered in isolation due to the productive nature of what was
stolen.
<p>
In other words, what Rothbard ignores in his attempt to undermine 
anarchist use of history is that when the property stolen is of a 
productive nature, the accumulative effect of its use is such as to 
affect all of society. Productive assets produce <b>new</b> property, 
<b>new</b> values, create a <b>new</b> balance of class forces, 
<b>new</b> income and wealth
inequalities and so on. This is because of the <b>dynamic</b> nature of
production and human life. When the theft is such that it creates 
accumulative effects after the initial act, it is hardly enough to say 
that it does not really matter any more. If a nobleman invests in a 
capitalist firm with the tribute he extracted from his peasants, then 
(once the firm starts doing well) sells the land to the peasants and 
uses that money to expand his capitalist holdings, does that <b>really</b> 
make everything all right? Does not the crime transmit with the cash? 
After all, the factory would not exist without the prior exploitation 
of the peasants.
<p>
In the case of actually existing capitalism, born as it was of extensive 
coercive acts, the resultant of these acts have come to shape the <b>whole</b> 
society. For example, the theft of common land (plus the enforcement of 
property rights -- the land monopoly -- to vast estates owned by the 
aristocracy) ensured that working people had no option to sell their 
labour to the capitalists (rural or urban). The terms of these contracts 
reflected the weak position of the workers and so capitalists extracted 
surplus value from workers and used it to consolidate their market 
position and economic power. Similarly, the effect of mercantilist 
policies (and protectionism) was to enrich the capitalists at the 
expense of workers and allow them to build industrial empires. 
<p>
The accumulative effect of these acts of violation of a "free" market 
was to create a class society wherein most people "consent" to be 
wage slaves and enrich the few. While those who suffered the impositions 
are long gone and the results of the specific acts have multiplied and 
magnified  well beyond their initial form. And we are still living with 
them. In other words, the initial acts of coercion have been transmitted
and transformed by collective activity (wage labour) into society-wide 
affects.
<p>
Rothbard argues in the situation where the descendants (or others) of 
those who initially tilled the soil and their aggressors (<i>"or those who 
purchased their claims"</i>) still extract <i>"tribute from the modern tillers"</i> 
that this is a case of <i>"<b>continuing</b> aggression against the true owners"</i>. 
This means that <i>"the land titles should be transferred to the peasants, 
without compensation to the monopoly landlords."</i> [<b>Op. Cit.</b>, p. 65] But
what he fails to note is that the extracted "tribute" could have been
used to invest in industry and transform society. Why ignore what the
"tribute" has been used for? Does stolen property not remain stolen 
property after it has been transferred to another? And if the stolen
property is used to create a society in which one class has to sell
their liberty to another, then surely any surplus coming from those
exchanges are also stolen (as it was generated directly and indirectly
by the theft).
<p>
Yes, anarchist agree with Rothbard -- peasants should take the land they
use but which is owned by another. But this logic can equally be applied to 
capitalism. Workers are still living with the effects of past initiations 
of force and capitalists still extract "tribute" from workers due to
the unequal bargaining powers within the labour market that this has
created. The labour market, after all, was created by state action 
(directly or indirectly) and is maintained by state action (to protect 
property rights and new initiations of force by working people). The 
accumulative effects of stealing productive resources as been to 
increase the economic power of one class compared to another. As the 
victims of these past abuses are long gone and attempts to find their 
descendants meaningless (because of the generalised effects the thefts in question), anarchists feel we are justified in demanding the 
<b><i>"expropriation of the expropriators"</i></b>. 
<p>
Due to Rothbard's failure to understand the dynamic and generalising 
effects that result from the theft of productive resources (i.e. externalities
that occur from coercion of one person against a specific set of others) and 
the creation of a labour market, his attempt to refute anarchist analysis
of the history of "actually existing capitalism" also fails. Society is
the product of collective activity and should belong to us all (although
whether and how we divide it up is another question).
<p>
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