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

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

by Michael Perelman

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The originators of classical political economy—Adam Smith, David Ricardo, James Steuart, and others—created a discourse that explained the logic, the origin, and, in many respects, the essential rightness of capitalism. But, in the great texts of that discourse, these writers downplayed a crucial requirement for capitalism’s creation: For it to


The originators of classical political economy—Adam Smith, David Ricardo, James Steuart, and others—created a discourse that explained the logic, the origin, and, in many respects, the essential rightness of capitalism. But, in the great texts of that discourse, these writers downplayed a crucial requirement for capitalism’s creation: For it to succeed, peasants would have to abandon their self-sufficient lifestyle and go to work for wages in a factory. Why would they willingly do this?
Clearly, they did not go willingly. As Michael Perelman shows, they were forced into the factories with the active support of the same economists who were making theoretical claims for capitalism as a self-correcting mechanism that thrived without needing government intervention. Directly contradicting the laissez-faire principles they claimed to espouse, these men advocated government policies that deprived the peasantry of the means for self-provision in order to coerce these small farmers into wage labor. To show how Adam Smith and the other classical economists appear to have deliberately obscured the nature of the control of labor and how policies attacking the economic independence of the rural peasantry were essentially conceived to foster primitive accumulation, Perelman examines diaries, letters, and the more practical writings of the classical economists. He argues that these private and practical writings reveal the real intentions and goals of classical political economy—to separate a rural peasantry from their access to land.
This rereading of the history of classical political economy sheds important light on the rise of capitalism to its present state of world dominance. Historians of political economy and Marxist thought will find that this book broadens their understanding of how capitalism took hold in the industrial age.

Editorial Reviews

From the Publisher
“After reading Michael Perelman's excellent book we see our world in different colors. The origin of market capitalism is the product of strategies pursued to take away from people the conditions for developing alternative ways to live and produce. We also discover that classical political economy has been so instrumental in guiding these strategies. The book leaves us to wonder how the same mechanisms are reproduced today. This critical question pervades the book.”—Massimo De Angelis, University of East London

“This study is to be admired for its comprehensiveness, scope, and the amount of unearthing and excavation Perelman provides. The indictment of political economists who addressed themselves to the matter of primitive accumulation is masterful.”—H. T. Wilson, York University

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Classical Political Economy and the Secret History of Primitive Accumulation

Duke University Press

Copyright © 2000 Duke University Press
All right reserved.

ISBN: 978-0-8223-2454-6

Chapter One

The Enduring Importance of Primitive Accumulation

Common fields and pastures kept alive a vigorous co-operative spirit in the community; enclosures starved it. In champion [sic] country people had to work together amicably, to agree upon crop rotations, stints of common pasture, the upkeep and improvement of their grazings and meadows, the clearing of the ditches, the fencing of the fields. They toiled side by side in the fields, and they walked together from field to village, from farm to heath, morning, afternoon and evening. They all depended on common resources for their fuel, for bedding, and fodder for their stock, and by pooling so many of the necessities of livelihood they were disciplined from early youth to submit to the rules and customs of the community. After enclosure, when every man could fence his own piece of territory and warn his neighbours off, the discipline of sharing things fairly with one's neighbours was relaxed, and every household became an island unto itself. This was the great revolution in men's lives, greater than all the economic changes following enclosure. Yet few people living in this world bequeathed to us by the enclosing and improving farmer are capable of gauging the full significance of a way of life that is now lost.-Joan Thirsk, "Enclosing and Engrossing"

Compulsion and the Creation of a Working Class

The brutal process of separating people from their means of providing for themselves, known as primitive accumulation, caused enormous hardships for the common people. This same primitive accumulation provided a basis for capitalist development. Joan Thirsk, one of the most knowledgeable historians of early British agriculture, describes above the nature of some of the harshest social and personal transformations associated with the enclosures.

Some people denounced this expropriation. Marx (1977, 928) echoed their sentiment, charging: "The expropriation of the direct producers was accomplished by means of the most merciless barbarianism, and under the stimulus of the most infamous, the most sordid, the most petty and the most odious of passions."

Formally, this dispossession was perfectly legal. After all, the peasants did not have property rights in the narrow sense. They only had traditional rights. As markets evolved, first land-hungry gentry and later the bourgeoisie used the state to create a legal structure to abrogate these traditional rights (Tigar and Levy 1977).

Simple dispossession from the commons was a necessary, but not always sufficient condition to harness rural people to the labor market. Even after the enclosures, laborers retained privileges in "the shrubs, woods, undergrowth, stone quarries and gravel pits, thereby obtaining fuel for cooking and wood for animal life, crab apples and cob nuts from the hedgerows, brambles, tansy and other wild herbs from any other little patch of waste.... Almost every living thing in the parish however insignificant could be turned to some good use by the frugal peasant-labourer or his wife" (Everitt 1967, 405).

To the extent that the traditional economy might be able to remain intact despite the loss of the commons, a supply of labor satisfactory to capital might not be forthcoming. As a result, the level of real wages would be higher, thereby impeding the process of accumulation. Not surprisingly, one by one, these traditional rights also disappeared. In the eyes of the bourgeoisie, "property became absolute property: all the tolerated 'rights' that the peasantry had acquired or preserved ... were now rejected" (Foucault 1979, 85).

Primitive accumulation cut through traditional lifeways like scissors. The first blade served to undermine the ability of people to provide for themselves. The other blade was a system of stern measures required to keep people from finding alternative survival strategies outside the system of wage labor. A host of oftentimes brutal laws designed to undermine whatever resistance people maintained against the demands of wage labor accompanied the dispossession of the peasants' rights, even before capitalism had become a significant economic force.

For example, beginning with the Tudors, England enacted a series of stern measures to prevent peasants from drifting into vagrancy or falling back onto welfare systems. According to a 1572 statute, beggars over the age of fourteen were to be severely flogged and branded with a red-hot iron on the left ear unless someone was willing to take them into service for two years. Repeat offenders over eighteen were to be executed unless someone would take them into service. Third offenses automatically resulted in execution (Marx 1977, 896ff.; Marx 1974, 736; Mantoux 1961, 432). Similar statutes appeared almost simultaneously during the early sixteenth century in England, the Low Countries, and Zurich (LeRoy Ladurie 1974, 137). Eventually, the majority of workers, lacking any alternative, had little choice but to work for wages at something close to subsistence level.

In the wake of primitive accumulation, the wage relationship became a seemingly voluntary affair. Workers needed employment and employers wanted workers. In reality, of course, the underlying process was far from voluntary. As Foucault (1979, 222) argues:

Historically, the process by which the bourgeoisie became the politically dominant class in the course of the 18th Century was masked by the establishment of an explicitly coded and formally egalitarian juridical framework, made possible by the organization of a parliamentary, representative regime. But the development and generalization of disciplinary mechanisms constituted the other, dark side of these processes ... supported by these tiny, everyday, physical mechanisms, by all those systems of micro-power that are essentially nonegalitarian.

Indeed, the history of the recruitment of labor is an uninterrupted story of coercion either through the brute force of poverty or more direct regulation, which made a continuation of the old ways impossible (Moore 1951). Of course, the extractions common to traditional relatively self-sufficient household economy kept many people at or just above the subsistence level, but for many the market was a step backward. The disorienting introduction of the individualistic ways of the market cut people off from their traditional networks and created a sense of dehumanization (see Kuczynski 1967, 70). A purported need for discipline justified the harsh measures that the poor endured. Indeed, writers of every persuasion shared an obsessional concern with the creation of a disciplined labor force (Furniss 1965; Appleby 1978). Supporters of such measures typically defended their position by invoking the need to civilize workers or stamp out sloth and indolence. Yet capital required these measures to conquer the household economy in order to be able to extract a greater mass of surplus value. In fact, almost everyone close to the process of primitive accumulation, whether a friend or foe of labor, agreed with Charles Hall's (1805, 144) verdict that "if they were not poor, they would not submit to employments"-at least so long as their remuneration were held low enough to create substantial profits.

Employers were quick to perceive the relationship between poverty and the chance to earn handsome profits. Ambrose Crowley, for example, set up his factory in the north rather than the midlands, for there "the cuntry is verry poore and populous soe workmen must of necessity increase" (cited in Pollard 1965, 197). This process was cumulative. An increase in poverty begat more population, which in turn created further poverty, and so on. In this regard, Marx (1865, 72) noted that the level of wages in the agricultural districts of England varied according to the particular conditions under which the peasantry had emerged from serfdom. The more impoverished the serfs, the lower their descendants' wages would be.

Classical Political Economy and the War on Sloth

The classical political economists joined in the chorus of those condemning the sloth and indolence of the poor. Although they applauded the leisure activities of the rich, they denounced all behavior on the part of the less fortunate that did not yield a maximum of work effort.

Consider the case of Francis Hutcheson-"the never to be forgotten Dr. Hutcheson," as his student, Adam Smith, later described him in a letter to Dr. Archibald Davidson (reprinted in Mossner and Ross 1977, 309)-the same Francis Hutcheson whose Short Introduction to Moral Philosophy in Three Books (1742) seems to have served as a model for the economic sections of Smith's Glasgow lectures (see Scott 1965, 235, 240). A later work, his System of Moral Philosophy, exemplifies Dr. Hutcheson's contributions to that noble field of moral philosophy. After a few brief notes on the need to raise prices, Hutcheson (1755, 2:318-19) mused: "If a people have not acquired an habit of industry, the cheapness of all the necessaries of life encourages sloth. The best remedy is to raise the demand for all necessaries.... Sloth should be punished by temporary servitude at least." The menacing "at least" in this citation suggests that the never-to-be-forgotten professor might have had even sterner medicine in mind than mere temporary servitude. What else might the good doctor recommend to earnest students of moral philosophy in the event that temporary servitude proved inadequate in shunting people off to the workplace?

This attitude, of course, is not unique to classical political economy. We might ask, was there ever a nation in which the rich found the poor to be sufficiently industrious? The universal howl of "sloth and indolence" can be heard as far away as nineteenth-century Japan, to cite one example (see T. Smith 1966, 120). However, no country seems to have gone as far as England in its war on sloth. Indeed, writers of the time charged that a want of discipline was responsible for criminality as well as disease. By the late eighteenth century, even hospitals came to be regarded as a proper medium to instill discipline (see Ignatieff 1978, 61ff.).

Almost poetically, Thomas Mun (1664, 193) railed against "the general leprosy of our piping, potting, feasting, fashions, and misspending of our time in idleness and pleasure." Josiah Tucker (1776a, 44-45) employed a military metaphor to make a similar point:

In a word, the only possible Means of preventing a Rival Nation from running away with your Trade, is to prevent your own People from being more idle and vicious than they are.... So the only War, which can be attended with Success in that Respect, is a War against Vice and Idleness; a War, whose Forces must consist of-not Fleets and Armies-but such judicious Taxes and Wise regulations, as will turn the Passion of private Self-Love into the Channel of Public Good.

Primitive Accumulation and the Eradication of Holidays

Although their standard of living may not have been particularly lavish, the people of precapitalistic northern Europe, like most traditional people, enjoyed a great deal of free time (see Ashton 1972, 204; see also V. Smith 1992; Wisman 1989). The common people maintained innumerable religious holidays that punctuated the tempo of work. Joan Thirsk estimated that in the sixteenth and early seventeenth centuries, about one-third of the working days, including Sundays, were spent in leisure (cited in K. Thomas 1964, 63; see also Wilensky 1961). Karl Kautsky (1899, 107) offered a much more extravagant estimate that 204 annual holidays were celebrated in medieval Lower Bavaria.

Despite these frequent holidays, the peasants still managed to produce a significant surplus. In English feudal society, for example, the peasants survived even though the gentry was powerful enough to extract something on the order of 50 percent of the produce (see Postan 1966, 603). As markets evolved, the claims on the peasants' labors multiplied. For instance, in southern France, rents appear to have grown from about one-fourth of the yield in 1540 to one-half by 1665 (LeRoy Ladurie 1974, 117).

Although people increasingly had to curtail their leisure in order to meet the growing demands of nonproducers, many observers still railed against the excessive celebration of holidays. Protestant clergy were especially vocal in this regard (Hill 1967, 145-218; see also Marx 1977, 387; Freudenberger and Cummins 1976). Even as late as the 1830s, we hear the complaint that the Irish working year contained only 200 days after all holidays had been subtracted (Great Britain 1840, 570; cited in Mokyr 1983, 222).

Time, in a market society, is money. As Sir Henry Pollexfen (1700, 45; cited in Furniss 1965, 44) calculated: "For if but 2 million of working people at 6d. a day comes to 500,000u which upon due inquiry whence our riches must arise, will appear to be so much lost to the nation by every holiday that is kept."

Zeal in the suppression of religious festivals was not an indication that representatives of capital took working-class devotion lightly. In some rural districts of nineteenth-century England, tending to one's garden on the Sabbath was a punishable offense. Some workers were even imprisoned for this crime (Marx 1977, 375-76n). Piety, however, also had its limits. The same worker might be charged with breach of contract should he prefer to attend church on the Sabbath rather than report for work when called to do so (ibid.).

In France, where capital was slower to take charge, the eradication of holidays was likewise slower. Tobias Smollett (1766, 38) complained of the French: "Very nearly half of their time, which might be profitably employed in the exercise of industry, is lost to themselves and the community, in attendance upon the different exhibitions of religious mummery." Voltaire called for the shifting of holidays to the following Sunday. Since Sunday was a day of rest in any case, employers could enjoy approximately forty additional working days per year. This proposal caused the naive Abbe Baudeau to wonder about the wisdom of intensifying work when the countryside was already burdened with an excess population (cited in Weulersse 1959, 28). How could the dispossessed be employed?

Of course, changes in the religious practices of Europe were not induced by a shortage of people but by people's willingness to conform to the needs of capital. For example, the leaders of the French Revolution, who prided themselves on their rationality, decreed a ten-day week with only a single day off. Classical political economists enthusiastically joined in the condemnation of the celebration of an excessive number of holidays (see Cantillon 1755, 95; Senior 1831, 9). The suppression of religious holidays was but a small part of the larger process of primitive accumulation.

Classical Political Economy and the Ideal Working Day

Once capital began to dislodge the traditional moorings of society, the bourgeoisie sought every possible opportunity to engage people in productive work that would turn a profit for employers. Accordingly, classical political economists advocated actions to shape society around the logic of accumulation in order to strengthen the dependency on wage labor.

In the utopia of early classical political economy, the poor would work every waking hour. One writer suggested that the footmen of the gentry could rise early to employ their idle hours making fishing nets along with "disbanded soldiers, poor prisoners, widows and orphans, all poor tradesmen, artificers, and labourers, their wives, children, and servants" (Puckle 1700, 2:380; cited in Appleby 1976, 501).

Joseph Townsend (1786, 442) proposed that when farm workers returned in the evenings from threshing or ploughing, "they might card, they might spin, or they might knit." Many were concerned that children's time might go to waste. William Temple called for the addition of four-year-old children to the labor force. Anticipating modern Skinnerian psychology, Temple (1770, 266; see also Furniss 1965, 114-15) speculated, "for by these means, we hope that the rising generation will be so habituated to constant employment that it would at length prove agreeable and entertaining to them." Not to be outdone, John Locke, often seen as a philosopher of liberty, called for the commencement of work at the ripe age of three (Cranston 1957, 425).

Others called for new institutional arrangements to ensure a steadily increasing flow of wage labor. Fletcher of Saltoun recommended perpetual slavery as the appropriate fate of all who would fail to respond to less harsh measures to integrate them into the labor force (see Marx 1977, 882). Hutcheson, as we have seen, followed suit. Always the idealist, Bishop George Berkeley (1740, 456) preferred that such slavery be limited to "a certain term of years."


Excerpted from THE INVENTION OF CAPITALISM by MICHAEL PERELMAN Copyright © 2000 by Duke University Press. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Meet the Author

Michael Perelman is Professor of Economics at California State University, Chico. His books include The Natural Instability of Markets: Expectations, Increasing Returns, and the Collapse of Markets.

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