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Peasant Capitalism and The Industrialization ‘Debate’

July 10, 2007

A recent report in the Indian Express makes for an interesting reading in the context of the debate on industrialization unleashed by the ‘Nandigram effect’. This is a somewhat novel story: In the village of Avasari Khurd, about 40 kilometres off Pune, about 1500 farmers passed a unanimous resolution seeking a SEZ (Special Economic Zone) status for their village. The resolution, approved by the gram sabha has been sent for further action to both the state and central governments. The peasant/farmers of the village have formed a company by the name of ‘Avasari Khurd Industrial Development Pvt Ltd’, using 3, 500 acres of land, while the remaining will be used for agribusiness and residential purposes. All the 1500 farmers will be shareholders of the company and each of them will contribute Rs 1 lakh as initial investment. The idea of course, is that rather than let the government acquire land from them or they be forced into some highly unequal bargain with corporate sharks like Reliance, the farmers themselves become shareholders of their land and take their destiny in their own hands.

However, because the initiative for this effort has come from the Mahratta Chamber of Commerce, Industries and Agriculture, the vision of this plan goes in a corporate capitalist direction, with land being earmarked for the automobile, the electronic, infotech and pharmaceutical sector. One can however, easily imagine such initiative being taken in such a way that these could become the basis of an interesting new type of common ownership, something akin to an agro-industrial cooperative, which could focus on industries less ecologically destructive than some planned here (e.g. automobiles). But for such a thing to happen, radicals and Leftists of various hues need to intervene in the flow of life that is being transformed every day, every minute, rather than merely issue shrill rhetorical speeches against some far off enemy – safely away in the United States or some such place.

And for those official ‘marxists’ who believe that capital is their only saviour, the Avasari Khurd developments seem to be saying something else as well: They are saying this out, loud and clear, that ‘capital’ is not something that only exists in the body of the Tatas and the Ambanis, or of transnational corporations; it is here, right here. You only need to have the vision to harness it in a non-corporate way. They also seem to be saying something else: What you think is an ‘irreversible’ process (historical destiny, globalization, etc), is actually taking shape before your very eyes and can be shaped right here; the longer you wait in the millennial expectation of your never-to-arrive Godot, the more irreversible you make this process in the long run. The time to shape it is now. If only capitalists can claim the benefits of tax waivers, free and subsidized public resources, then let us all become capitalists and subvert this macabre game that has been going on too long! But this requires some other emotion than simple powerless rage from which nothing but meaningless shrill rhetoric emanates; it requires a sense of ironical reversal of the logic of power. Let Dalits become capitalists (a la Chandrabhan Prasad); let farmers become capitalists or at least active players (a la Avasari Khurd); let workers become shareowners in their factories (an experiment rejected by the Left because that would ‘make workers bourgeois’, leaving the Revolution bereft!). Feminists of course, have always argued for individual property ownership by women rather than for abolition of property rights or those vaguely held by say, the family.

Meanwhile, ‘Nandigram’ itself has become a metaphorical call for struggle, a call to arms against the cannibalism of neo-liberal (and ‘Left-wing’) Progress – inscribed on the banners of farmers’ struggles from Panchgaon in Haryana to Raigad in Maharashtra and Nandagudi in Karnataka…This is one part of the story. Resistance to dispossession and displacement and refusal to go under; to be marked forever as the ‘refuse’ of History by its Agents. But this story may also need to be supplemented with another – that of simultaneous transformation (a self-transformation) rather than a mere defense of the old agricultural life.

For starters we probably need to start thinking differently about capitalism itself. Its Universal History might be our biggest impediment in this task. That is what we need to liberate ourselves from. I paste below an article that I initially wrote for the Economic and Political Weekly (published in the 24 March 2007 issue), for those interested.

Genealogies of Globalization:

Unpacking the ‘Universal’ History of Capital

With the battle over ‘industrialization’ in West Bengal intensifying, the CPI(M) general secretary general secretary Prakash Karat recently evoked the memory of a supposedly heroic Marxist encounter with the Narodniks in 19th century Russia.[ii] In a note at the end of an article published in the party newspaper, Karat defines the Narodniks thus:

“Narodniks in late 19th century Russia believed that with the overthrow of Tsarism, a traditional village based communal system could go towards socialism. Considering capitalism and industrialisation regressive, they idealised the old peasant-village economy. Ultimately they resorted to individual terrorist actions against the Tsar and lost the sympathy of the peasants who were horrified by their actions.”

This description of the Narodniks is revealing in more ways than one – not the least of these being the figure of the ‘Maoist’ or the ‘Naxalite’ lurking somewhere in this re-presentation of a nineteenth century Russian phenomenon in twenty-first century India.[iii] It might be worth recalling that in the final years of that century, Lenin effected a final closure to that debate, arguing that capitalism and industry were inevitable.[iv]

West Bengal chief minister and politburo member Buddhadeb Bhattacharya repeats the article of faith about the inevitability of industrialization and capitalism in his response to Marxist historian Sumit Sarkar’s critique of Bengal’s industrialization policy. Bhattacharya says: “The process of economic development evolves from agriculture to industry. The journey is from villages to cities.” In a more dramatic assertion of this faith in the historical inevitability of capitalism, he underlines that ‘it is incumbent on us to move ahead, otherwise there will be the end of history.’[v]

Let us remind ourselves that what is at work here is a certain narrative of Progress and History that derives from a certain rendering (or reading) of Marx. This narrative involves a well-entrenched notion of what we might call the ‘universal history of Capital’ – a notion shared by both bourgeois economics and this particular brand of Marxism. Economics as a discipline is of course so thoroughly constituted by capital and capitalism (which is why ‘socialist economics’ is destined to remain an oxymoron), that there is no way of producing an ‘economically rational’ argument against capital. We can leave this matter for the time being, as that is not our immediate purpose here, though this is something for any future socialist project to ponder over very seriously.[vi] At this point, however, I wish to argue for a re-reading of Marx as a critical historian of capital and a reassessment of his legacy in this brief note.

It is true, however, that a very real problem faces the Left Front and the CPI(M) in West Bengal – as indeed it does the Left in South Africa, Brazil, and now many other parts of the South American continent: how to produce more livelihoods that do not merely stop at reasserting the value of simple subsistence economies. Whether wage-slavery and ‘jobs’ in the bourgeois sense of the term are the best option is of course, open to question. I will also insist here upon the recognition of a trivial historical fact that every child knows but no adult dare acknowledge: as far as unemployment goes, industrialization is the problem rather than the solution. For instance, in 1938 a publication of the Communist Party of Great Britain noted: “Unemployment is a problem as old as the industrial system itself…The fact that the workers need employment in order to live finds no place in the consideration of the employing class when they hire workers.”[vii] Remember the ‘industrial reserve army’ that Marx talked of? But this all-too-obvious link between industrialization and unemployment has been forgotten by most Marxists, lost under the accumulating deposits of (bourgeois) economics, might one say? Unemployment is created by capitalism and industrialization, and yet they are blindly assumed to be the solution to what they necessarily create. The problem of ‘unemployment’, as we will see below, is the fundamental axis around which the current crisis of the Left and of labour movements revolves. The time has come, therefore, to take a closer look at this crisis.

The Mobility of Capital

It may be worthwhile to remember that the current crisis has to do with the extremely heightened mobility of capital alongside an equally extreme immobility of labour. We have seen in our own experience how this works against labour struggles. Pre-WW II capitalism was fixed to place and was relatively far more immobile, given the predominance of the large factory system. Earlier successes of the working class movement were based on this fact: just like the landlord was tied to the land, so was the capitalist. The situation has changed fundamentally now with global production circuits, subcontracting and flexible forms of industrial organization.

Let me take just two instances of how this earlier immobility of capital has both affected and been affected by the workers’ movements. One, the militant workers’ struggles in West Bengal in the late 1960s and early 1970s. It is well-known that it was precisely the militancy and the immediate success of those struggles that led to one of the most significant impulses for deindustrialization and massive flight of capital to relatively peaceful states elsewhere in the country. So devastating was the consequence of this flight (in terms of aggravating the unemployment situation and the weakening of even simple wage struggles) that by the time the Left Front (LF) government assumed power in 1977, it had learnt a lesson: henceforth it would reign in workers’ militancy and try to lure capital back into the state. Only rapid industrialization would be able to provide jobs to the unemployed and for that capital was indispensable – so the LF and the CPI(M) argued. Consequently, capital now finds itself strong enough to dictate terms. So powerful has been the hold of this imagination that the Marxist-led government of the state has decided to dispossess the peasantry and acquire huge tracts of agricultural land for making them available to capital. This is the logic that lies behind the whole range of new developments from Singur to Nandigram, which has been rehearsed once again in Bhattacharya’s letter to Sarkar.

Two, take another, global example. Consider the debate on the social clause more closely. Contrary to what many marxists believe, the ‘social clause’ in not just an imperialist conspiracy, meant to browbeat something called the ‘Indian nation’ – or third world nations – into submission. A closer look will immediately make it clear that this move of the Western governments was and is solidly backed by the trade union and labour movements in those countries. And the entire position of northern/western trade unions and left wing groups in favour of higher labour standards for third world workers has all along been propelled by the need to prevent ‘their own capital’ from moving out. There have been instances of extreme abjection where some sections of German workers, for example, even took wage-cuts to prevent ‘their capital’ from moving out to Asia.[viii] When the Western governments placed the demand for including labour standards as part of international trade agreements, this was the imperative they were addressing – given the high social and political costs that heightened unemployment can have.

In both cases, the abjection of the working class was a direct consequence of its past victories. Equally importantly, it was a consequence of the flight of capital: It is worth underlining that beyond a point, capital did not fight back, it simply withdrew, it fled, and thus deprived the working class of its ‘foundation’, namely wage slavery. In a sense, the move from old-style Fordist methods of organization to post-Fordist ones has also been impelled by the same logic: it was becoming extremely expensive to keep workers employed and pay for their upkeep even in times of recession, or to keep up inventories of stocks, raw materials and so on. More to the point however is the fact that those modes of organization tied down capital to a particular place. If capital had to acquire mobility and flexibility, then it had to restructure in a way that it could ‘farm out’ work and simply keep control in its own hands.

It is worth keeping in mind that through the 1980s and 1990s, manufacturing units relocated to third world countries in a big way and it was only much later that services and call centers started moving out. If we look carefully we can see that in an immediate sense, this relocation was the consequence of at least two factors:

Firstly, the profit squeeze that capital had been facing during the postwar years of Keynesian welfarism and the New Deal, due to high wages and social security – in other words, high labour costs. Secondly, the intense crisis of accumulation that surfaced as high labour costs combined with strong environmental regulations, making corporations not only pay more (for cleaner technologies and the like) but also making them answerable to local communities for their air, water and other resources. It is important to keep in mind that both these costs have been imposed on capital accumulation by the strength of movements – in one case the labour movement (and the postwar attraction of the idea of socialism); in the other case, the powerful ecological movements that have made the states enact laws and take action.

And so it transpires, capital is not the sovereign, all-powerful entity that we think it is. It has acted on each of these occasions under pressure from the labour, environment and other movements. Moreover, its move to relocate operations in the third world – where there is no infrastructure (abysmal power situation, bad roads), interfering governments and where everything becomes easily politicized – is primarily a result of its crisis. It is fugitive capital that has run away from one part of the world.

Yet, such is our conditioning as victims that we fail to see the strengths of the movements that challenge capital. The reason that makes the LF government of West Bengal or the Communist government of China woo capital and that makes western trade/labour unions demand universal labour standards and take wage cuts, really happens to be the same: The complete dependence of labour on capital. And yet, this dependence is not a natural fact; nor is it something ordained by something called History (with a capital H).

Marxists have celebrated the demise of the old world and the complete victory of capitalism. This means that all other ways of life and modes of living are destroyed, installing capital as the only form of property (ownership) – thus also as the only employer. The only other form of ownership that has been thought about – state ownership – is of course a model that has come to be in serious crisis, apart from being implicated in totalitarian political structures. The state as owner and employer is, also for very sound economic reasons, not a viable proposition. However, from our point of view, the really relevant point here is the first one: what is it that authorizes (or legitimizes) such a celebration of the destruction of all other ways of life and modes of being and the reduction of the entire world to the logic of wage slavery? The answer to this question provided by both neo-liberals and Marxists is very much the same: it lies in the idea of historical inevitability, the idea that there is a Universal History that has already played itself out in the West which we cannot but repeat here. We might be prepared now to argue that the history of modernity is not one; that there are alternative trajectories, indeed alternative modernities but when it come to the history of capitalism, we are still overpowered by this idea, thanks in no small measure to Marx himself, the chief historian and theorist of capitalism. That is an idea I wish to unpack here. Not the least because, just when Marxists thought they had defeated the Narodniks, the ghost of Narodism would begin to track them and follow them, right into the twenty-first century – arising now within the marxist or socialist universe itself.

Primitive Accumulation and the Law of History?

Since the onset of globalization, a lot of writings by Marxists have rehearsed and cited many times over, the celebrated passages from the Communist Manifesto, where Marx and Engels talk about the ‘revolutionary’ role of capital in exhilarated terms. Recall those famous passages where they talk of ‘all that is holy is profaned’ and ‘all that is solid melts into air’; the passage where they claim that the ‘bourgeoisie cannot live without constantly revolutionizing the means of production’ and of ‘building a world in its own image’. The triumphalism of a certain nineteenth century understanding of capitalism that sees the whole world being rapidly modernized in the same way as was Western Europe, is palpably evident in these passages. And this is what has been canonized as Marxist orthodoxy over the last century and a half or more. However, as we know today, at least some fragments of an alternative reading of this history are also available in Marx. Let us follow that alternative reading for a while in order to lay out the contours of our argument.

In this alternative reading, let us underline, the rise of capitalism is not the result of an inexorable historical law of Progress that must be celebrated. Marx opens his discussion of primitive accumulation, in the last section of Capital, Vol.I, by asserting that the origins of capitalist private property lie in ‘conquest, enslavement, robbery, murder’.

He describes the process of primitive accumulation as “(T)he process…that clears the way for the capitalist system… [and] takes away from the labourer the possession of the means of production”, as “a process that transforms, on the one hand, the social means of subsistence and of production into capital, on the other, the immediate producers into wage-labourers.”

This so-called primitive accumulation, he asserts, is nothing else than the historical process of divorcing the producer from the means of production. Marx recognizes that while this process frees the serfs “from serfdom and from the fetters of the guilds”, it simultaneously produces this new form of enslavement and dispossession. He pours scorn over ‘our bourgeois historians’ who recognize only the emancipatory side of this process. In other words, even when he sees the emancipatory dimensions of Progress and Development, his moral revulsion against the violence and injustice of this process remains apparent. Thus his indignation: “the history of their expropriation, is written in the annals of mankind in letters of blood and fire.”

In the rest of the discussion, Marx takes up the specific case of England for discussion. It is important that through this reading of English history, he lays bare the way in which capitalism came to its own through the forcible dispossession of the erstwhile peasant communities. Unfortunately, once again, he universalizes that process with disastrous consequences but let us leave that aside for the time being. He traces the history of the usurpation of common lands first by individual feudal lords through the late 15th and early 16th centuries. The 18th century marks a fundamental change in the process, in Marx’s perception. While the 15th and 16th centuries saw the process being carried on through individual acts of violence, the “advance made by the 18th century shows itself in this, that the law itself becomes the instrument of the theft of the people’s land.” This is embodied in the Acts of parliament for the enclosure of the Commons.

By the time we reach the 19th century, he remarks, “the very memory of the connection between the agricultural labourer and the communal property had vanished.” The so-called ‘clearing of estates’ is then described by him as the ‘last process of wholesale expropriation of the agricultural population from the soil.’

There is a ring of the surreal as one feels in his reflections on nineteenth century England the reverberations of 21st century Bengal: “To say nothing of more recent times, have the agricultural population received a farthing of compensation for the 3,511,770 acres of common land which between 1801 and 1831 were stolen from them and by parliamentary devices presented to the landlords by the landlords?”

Let us underline that the purpose of this exercise of reading Marx and his rendition of English history is not meant to uncover some ostensible Universal History in operation. On the contrary, it is to underline that once presented as Universal History by Marx and his generation, it becomes a self-fulfilling logic. Thereafter, Marxists can only act in one way that is commensurate with this logic; every other way is deemed to be reactionary and against the logic of History. What we will need to excavate from the debris of the political practice of the past two centuries is the manner in which the belief in a certain logic of History, operating as Scientific Knowledge, already laid out the contours within which one could act.

Marx also goes on to discuss the ways in which, from the end of the 15th century onwards, bloody legislations were enacted to keep the displaced population in check. The population which was rendered destitute was ‘disciplined and normalized’, to use a Foucauldian expression, through these laws. The ‘free’ proletariat, created by the ‘forcible expropriation of the people from the soil’, which ‘could not be absorbed by the nascent manufactures as fast as it was thrown upon the world’, was turned ‘en masse into beggars, robbers, vagabonds, partly from inclination, in most cases from the stress of circumstances.’

Marx and the Crisis of Universal History

Marx certainly cannot be exonerated from the responsibility of having produced the Universal History of Capitalism that we are, in a sense, reeling under. However, this was only one side of Marx. Already in 1853, while he was working on and producing this universal history, he already found himself caught in a deep bind – that of explaining the irreducible heterogeneity of the world in his time. Following Eric Hobsbawm’s interpretation of the Grundrisse (1857-58), as outlining a ‘non-consecutive’ map of historical development that allowed for ‘three or four alternative routes out of primitive communal systems’, Teodor Shanin suggests that Marx was ‘already aware’ of the difficulties of this universalism and had therefore ‘worked out and put to use concepts of Oriental Despotism and of the Asiatic Mode of Production’ (AMP).[ix] Of course, these were conceptual devices of trying to account for the heterogeneity of ‘past’, ‘pre-capitalist’ forms. In the end, Marx’s position at this time would be to argue that capitalism would, as the first truly universal system, would bring in these ‘societies without history’ into the orbit of World-History. The future was still One – all societies inevitably moving inexorably towards the Telos, the final goal.

The very concepts of Oriental Despotism and the Asiatic Mode of Production refer back to a Eurocentric and in some ways an Asian-exceptionalist view of History. The notions of Time and World-History that were dominant and which he received from Hegel, provided an excellent way out of the problem posed by this irreducible heterogeneity, by suggesting that these societies represented ‘past forms’ that were to soon go out of existence.

More to the point is the strange episode of Marx’s encounter with the Russian peasant communes first through some fortuitous circumstances and then more strongly through Vera Zasulich and the Russian Marxists. For these Marxists were involved in a furious debate with the Narodniks who did not merely celebrate these past forms, but as Karat rightly concedes, posed the question of their becoming the basis of a socialist future. Teodor Shanin remarks that already in the Grundrisse, Marx had shown indications of taking peasant agriculture and ‘communal land ownership’ in ‘pre-capitalist modes of production’ and the problem of ‘uneven development’ seriously (14-15). What is crucially important is that this quest was not resolved in one fell swoop. It pre-occupied him more and more and in 1870-71, he started learning Russian and immersed himself into a study of the Russian social formation, including the writings of such Narodnik theorists such as Chernyshevskii and others like Alexander Herzen. Shanin remarks that “what followed was a long silence…Marx did not publish anything substantial until his death” (7). This, we might underline, was also the period of his intensive study of India and other oriental societies.[x]

It was in this frame of mind, ten years into his studies, that he received in 1881, a letter from Vera Zasulich, a former Narodnik turned Marxist. As mentioned earlier, this group of Marxists was engaged in a serious controversy with the Narodniks over the inevitability of capitalism in Russia and of the significance of the peasant communes to the socialist project. Zasulich therefore wrote to Marx seeking his opinion on the matter. Japanese scholar Haruki Wada has unearthed the entire sequence of events around this episode.[xi] Marx wrote four drafts of a reply to Zasulich but ended up not sending any. Finally, after his death, Engels sent the fourth draft to the Emancipation of Labour Group to which Zasulich belonged and which was led among others, by Plekhanov and PB Axelrod. The letter was never published, even though after as long as seven months, they replied to Engels that they would, now that the letter had been translated into Russian. All of Engels’ efforts went in vain. In 1911, they were discovered by DB Riazanov, who deciphered it with the help of Bukharin but then, once again they were left unpublished. In 1923, they were published by BI Nikolaevskii, a Menshevik in exile. Once it was published, it was immediately brought out that very year by Riazanov, where he prefaced it with a remark that ‘the drafts merely exemplified a decline in Marx’s scholastic capability.’ It was the Socialist-Revolutionaries who enthusiastically picked it up as evidence that ‘on the question of the future of the peasant communes, Marx was definitely on the side of Populism’ (Wada 1983: 41-42).

Wada notes, in this context, that even at the time of the publication of Volume I of Capital, Marx’s attitude towards Russian populism and the peasant communes was utterly negative. He viewed Herzen’s contention that the peasant commune was unique to the Slavic world, as simply laughable, according to Wada (Wada 1983: 43). He cites Marx as saying that “Everything, to the minutest details, is completely the same as in the ancient Germanic community…” By the time the French edition of Capital was published in 1875, however, Wada notes that there was an interesting change. In this edition, in chapter 26, ‘The secret of primitive accumulation’ Marx struck out a passage about the expropriation of the agricultural producers which gave a sense of a more universal history and in its stead wrote: ‘It has been accomplished in final form only in England…but all other countries of Western Europe are going through the same movement’. Thus, Wada suggests, Marx allowed for the possibility that Eastern Europe and Russia might not be following the same trajectory (Ibid: 49).

Retarded Capitalism?

It is in the 1960s and 1970s that this theme of capitalism in the peripheries or the third world comes to the fore and the debate on the AMP is resumed. Unfortunately, the entire story of this episode was eventually brought to light in English much later. The 1960s debate, except in Japan, remained by and large untouched by the knowledge of this important engagement. Thus for instance, Susanne D. Mueller could argue in the Socialist Register as late as in 1980, writing on ‘Retarded Capitalism in Tanzania’, that it was ‘reactionary utopianism of Russia’s Narodniks’ that Lenin had effectively demolished a hundred years ago, that was being ‘institutionalized’ and ‘labelled as socialism’ by Nyerere.[xii] It is interesting that Mueller’s critique of Tanzanian ‘socialism’ was that the state, in the name of socialism, was acting “to forestall the development of a bourgeoisie and a proletariat by basing accumulation on the expansion of middle-peasant household production” (Mueller 1980: 203). Even more interesting is her assertion (which she underlines by citing another marxist scholar of Africa, MP Cowen) that “by forestalling ‘the direct separation of household producers from their means of production’, the State has ‘fettered the accumulation of indigenous capital within smallholding production’” (Ibid: 203). Lest we miss the point, it should be underlined that what is being lamented here is precisely the attempt to preserve the property of the peasantry, even if that meant ‘fettering accumulation’ within ‘smallholding production’. This reading of Tanzania’s specific history is predicated upon a desire for the replay of European history and is clearly unable to ask the question as to what the Tanzanian leadership might have been doing with the idea of socialism. In claiming that ‘capitalism, exploitation, classes and class struggle’ were ‘a unique product of Western colonialism’ (quoted in Ibid: 206), was Nyerere possibly trying to do something else – say argue that the bourgeois notion of property was really not commensurate with notions of property, or presumably the socio-political conditions extant in Africa? Could his insistence that self-reliance, via a strengthening of the ‘already socialistic’ traditional economy have been something more than merely ‘cultural’ in a narrow sense?[xiii] Was his insistence and Mueller’s attempt to draw a parallel with the Narodniks, ironically, not very far off the mark, in that case? One could read similar anxieties into the experiments undertaken in China under Mao Tsetung, which attempted to find a balance between ‘ten major relationships’, which included most centrally, that between agriculture and industry. The slogan of ‘walking on two legs’, in retrospect, was an attempt to avoid the violent decimation of agriculture and populations dependent on it. Those experiments may have failed, sometimes disastrously, but they nevertheless signal in a direction that ‘scientifically’ inclined Marxists have tended to ignore. Much like Chernyshevskii who argued that Russia could benefit from the ‘relative advantages of its backwardness’, Mao too emphasized that the fact that the Chinese people were ‘poor and blank’ could be to China’s advantage. Hence his argument, much like that of the Narodniks’, that China could avoid the capitalist path and pass on to socialism directly. It is true that the attempts to build steel furnaces in backyards in villages, undertaken during the Great Leap Forward, were completely misplaced and ended up as a disaster. However, the logic of that attempt was clearly to find a more decentralized model of development, and one where the peasants themselves would become capitalists – a bit like Nyerere’s Tanzania. It is also very easy to dismiss the violent and genocidal Pol Pot regime without further ado but the question that the Cambodian tragedy poses too may linger for a very long time. For, once again the desire to inscribe ‘socialism’ (that is, anti-capitalism, embodied in the abolition of money and market relations) in ancient Khmer glory seems to underline another violent rejection of bourgeois property relations. All these instances are indicative of the fact that the so-called universal history of capital and its self-fulfilling logic may have produced anticapitalism in more forms than we recognize; they are also indicative of the fact that this logic may not be all that universal after all.

We also know that during the 1960s and 1970s, there was another very significant debate that raged among marxists – the debate on ‘underdevelopment’, that argued from within a Marxist universe that capitalism does not necessarily produce capitalism and development everywhere. The name of Andre Gunder Frank is associated with the position that ‘underdevelopment’ in the peripheries was not simply a ‘lack’ of development; that it was rather the product of ‘development’ in the center/metropolises. Undoubtedly, in those debates, there was a tone of lament in the fact that capitalist development in the countries in the periphery could not take off or was arrested due to structural connections with the metropolises. But that is precisely the point that interests us here: Capitalist development did not simply emerge everywhere out of some inexorable law of history. Even a few centuries of colonial expansion could not really succeed in implanting it everywhere in the world, though colonization did fundamentally alter the logic of integration of colonized economies into the so-called ‘world economy’.

More recent historians of capitalism have thus made the point that “the transition [from pre-capitalist forms to capitalism] is too long to have any real meaning as a transition…”[xiv] They recall the early critiques by Ernesto Laclau and Robert Brenner of Andre Gunder Frank and Wallerstein, where Laclau, for instance, argued that “although capitalist relations of exchange had been universalized across the globe since the sixteenth century, capitalist relations of production were much more unevenly distributed, having a far denser presence in the core than in the periphery.” This problem of large parts of the world, deeply integrated and implicated into a world market and yet resistant to a transformation of the actual mode or organization of capitalist production has dogged Marxist thought right from Marx’s own time. We know that this problem was sought to be explained through the distinction between ‘formal’ subsumption of labour under capital (e.g. integration into the world market) and ‘real’ subsumption (reorganization of production along capitalist relations). The idea was used to argue that the whole world, once integrated into capitalist exchange relations, is already irrevocably capitalist; it is thus a matter of time before this formal subsumption is transformed into real subsumption. At one level, therefore this conceptual device helped to mask the very provincial, Western European origin of capitalism and produce it as a universal norm. More than three fourths of the world, that refused to obey the supposed Universal norm of capitalist development, nevertheless, remained an exception to be explained.

If this was a way of understanding the ‘lack’ of capitalist development in the so-called peripheries of the world-system, how exactly was development explained, where it did take place? We know that in many of the late-industrializing countries of the ‘periphery’, it was the state that built capitalism and virtually produced a capitalist class. Here again, the project of building capitalism was a project of a state elite that believed that that was the only way to be in the modern world. To explain the rise of state capitalism in states like Brazil and South Korea, marxist as well as non-marxist scholars influenced by marxism deployed the notion of the ‘relative autonomy of the state’ (Fox 1980; Amsden 1990). This ‘relative autonomy’ was defined by EVK Fitzgerald in Brazil’s context as a “state’s capacity to take action against the interests of any one fraction of capital (or even of national capital as a whole at any one point in time) in order to promote the long-run survival and expansion of capitalism as a social formation”.[xv]Alice Amsden’s study of South Korea shows that were it not for the state, there would neither be capitalism nor a bourgeoisie; it was the state that put the country on the high road to capitalism.[xvi] And we know today that where the ‘state’ as such failed to spawn and develop capitalism, international financial institutions, especially the IMF and the World Bank have played that role of transplanting notions (and institutions) of property and market that are commensurate with industrial capitalism. And yet, despite these direct interventions, not to speak of a few centuries of direct colonial rule, capitalism has not yet managed to entrench itself in large parts of the world.

Decentering Capital
However, such an imagination continues to structure our understanding of capitalism and its history till this day, if only because not enough has emerged so far by way of producing alternative histories of capitalism that put its rise in perspective. Concepts or formulations such as ‘retarded capitalism’, ‘dependent capitalism’ ‘arrested development’ simultaneously produced capitalism as the norm and the histories of the periphery as histories of Lack, in much the same way as our modernity is a history of Lack – always waiting to be incorporated into the ‘full-blooded bourgeois’ order in order to be delivered from their living hell. That the exception/s were spread over such a large part of the world was not of any consequence in reconsidering the premises of the theory itself. In fact, throughout the world, marxists were debating about the potentialities of capitalist development in their respective societies before colonialism came and stunted that growth.

It is interesting in this context, to revisit the well-known Maurice Dobb-Paul Sweezy transition debate and find the latter insisting that what Dobb refers to as the ‘classic’ form of feudalism, would be better described as West European feudalism. It is also interesting to see that in this debate on the transition (origins of capitalism), we can see the difficulties encountered by the protagonists in maintaining a logic of the evolution of the feudal mode into the capitalist mode of production. Thus Sweezy: “The transition from feudalism to capitalism is thus not a single uninterrupted process – similar to the transition from capitalism to socialism – but is made up of two quite distinct phases which present radically different problems and require to be analyzed separately.”[xvii] We need to also remind ourselves that the concept of the mode of production became, in the practice of Marxist theory, more and more difficult to sustain, precisely for the reasons outlined by Sweezy and not quite contested by Dobb himself, namely the prolonged coexistence of different ‘modes’ within the same time-space. Thus was invented the concept of the social formation – the actually existing form that expressed an articulation of more than one mode of production. What Sweezy and Dobb agree was a two-century long transition in Western Europe, would appear to be an endless one, if one were to look at the ‘world-system’ as a whole. A closer look thus reveals that this process of the ‘rise of capitalism’ is rather contingent and not a universal law.

If theoretical marxism remained entrapped, by and large, within the self-fulfilling logic of this universal history, practical marxism did struggle to find a way out, as we saw in the instance of Mao for example. While the revolutionary struggles of the 20th century broke out invariably in the colonial world as peasant insurrections, theoretical marxism, especially in the West and the former Soviet Union, started expressing deep unease at this ‘corruption’ of Marxism by ‘peasant consciousness’. Any number of studies of that period that deal with the Chinese and Vietnamese revolutions can be cited as evidence of this fact. Not only did Western and Soviet Marxism take this route, event the doctrinal variants adopted by many third world movements [for instance the CPI(M) in India], continued to see their own existence as a sort of illegitimate child of a backward society.

Theoretically speaking, it was in the writings of Louis Althusser and Etienne Balibar, who were among the very few Western marxists to have taken Mao seriously, that the entire question of the history of capital and the question of so-called survivals of ‘past forms’ was reopened in some essays in For Marx and later in Reading Capital. Balibar’s essay in Reading Capital argues persuasively, on the basis of his reading of the Grundrisse, that capitalism arises out of the contingent conjunction of two independent and discrete histories – that of free labour and of capital or ‘men with money’. In other words, Balibar suggests that it is not the ‘feudal mode of production’ that evolves into the ‘capitalist mode’, but the different elements that comprise the ‘structure’ called capitalism, that come together to form capitalism.[xviii] It is thus the history of the elements that one must look at rather than the history of the structure. Althusser returns to this question in his elaboration of his ‘philosophy of the Encounter’ and poses the question explicitly as one of the contingency of capitalism.

In the Philosophy of the Encounter, Althusser returns with a different gaze as he scans the history of capitalism in Europe and Marx’s understanding of it. Commenting on the coming together of labour and capital and their ‘taking hold’, he says: “We can even go further and suppose that this encounter occurred several times in history before taking hold in the West”, as happened at least once in the thirteenth and fourteenth century Italian states. “The elements do not exist in history” he says, “so that the mode of production may exist, they exist in a ‘floating’ state prior to their ‘accumulation’ and ‘combination’, each being the product of its own history…” (Althusser 2006: 198)

In the light of his new philosophy Althusser reads the problematic, teleological parts in Marx as arising out of a conflation of the accomplished fact (capitalism) with its taking-hold or being accomplished – that is, the process of becoming capitalism. This conflation, he suggests, results in seeing the structure as preceding its elements and reproducing them. For the late Althusser, capitalism is never a fully accomplished fact. It is thus from this angle that he reads the chapters on primitive accumulation and finds them already coloured by the teleology capitalism’s inevitability – even though he considers it to be the ‘true heart’ of Capital. He goes on to suggest: “Here we witness the emergence of the historical phenomenon whose result we know – the expropriation of the means of production from an entire rural population in Great Britain – but whose causes bear no relation to the results and its effects.” The element of contingency and uncertainty arises from the fact that we do not really know what the reason for this expropriation was. That it was eventually diverted by the ‘owners of money’ looking for impoverished manpower, appears to him as rather accidental and the mark of the non-teleology of this process.

The other interesting question that Althusser raises is regarding the ‘owners of money’: where does their money come from? It could it be usury, colonial pillage or mercantile capitalism, he ruminates. It is the phenomenon of mercantile capitalism that is, according to him, a great mystery – a capitalism before the emergence of a capitalist mode of production and the exploitation of free wage labour. This riddle of the bourgeoisie, “this strange class – capitalist by virtue of its future, but formed well before any kind of capitalism, under feudalism – known as the bourgeoisie?” is something that he is intrigued by.

If these are the kind of questions that can be asked with reference to Europe – and there are any number of historical investigations that substantiate Althusser’s questions – what about the so-called Third World? What if, after the Late Althusser, we now ask, why must all exchange relations, and money be necessarily seen as part of some prehistory of capital? The fact that there are relations of exchange need not at all imply existence of any form of capitalism? Exchange, entrepreneurship and by extension, market and money have been present in fairly ancient societies too and are not linked to capitalism in any way. This is a question, we might do well to remember, that intrigues and puzzles Marx too. Merchant ‘capital’ does not always sit easily with capitalism and we could recall the oft-quoted discussion conducted by Marx in Capital volume III, of the phenomenon and how it could in fact, even impede the growth of industrial capital. This is not the place for an extended discussion of mercantile capitalism. Suffice it to say that a lot more lies buried beneath its history than is visible to the ‘naked eye’; a history that is yet to be excavated once the deposits of the teleology of industrial capital’s supremacy are done away with. We might then be able to see the existence of markets, exchange and entrepreneurship in their own right, not merely as the pre-history of capital. We might then be able to see why newer, post-capitalist forms of property and ownership need not be predicated on a dissolution or decimation of either individual ownership, or indeed common property. We could very easily imagine a society with large sectors of agricultural production that works in tandem with a certain kind of industry, rather than one dominated by an abstract thing called Industry – irrespective of whether it produces poison, nuclear hazards or automobiles – which can only arise by decimating agriculture.


Althusser, Louis and Balibar, Etienne ((1977) Reading Capital, New Left Books, London

Althusser, Louis (2006), Philosophy of the Encounter: Later Writings, 1978-1987, Verso, London and New York.

Amsden, Alice H. (1990), ‘Third World Industrialization: Global Fordism or a New Model?”, New Left Review, 182, July-August 1990

Bhattacharya, Buddhadeb (2007), ‘Thousands of young people want jobs…they will shape the country’s future’, Indian Express, 19 January, 2007

Brittan, Samuel (2006), ‘Globalisation depresses western wages’,, accessed on 9 November 2006.

Chalcraft, John T. (2005), Radical History Review, Issue 91, Winter 2005, pp. 13-39

Fox, Jonathan (1980), ‘Has Brazil Moved Toward State Capitalism?”, Latin American Perspectives, Vol 7, No. 1, Winter 1980

Gibson-Graham, J.K. (2006), The End of Capitalism (As We Knew It): A Feminist Critique of Political Economy, University of Minnesota Press, Minneapolis and London

Hannington, Wal (1938), A Short History of the Unemployed, Victor Gollancz Ltd, London.

Hilton, Rodney (1980), The Transition from Feudalism to Capitalism, Verso, London.

Karat, Prakash (2007) “Double-Speak Charge: Maligning The CPI(M),” People’s Democracy, 28 January 2007

Lenin, V.I. (1899/1977), The Development of Capitalism in Russia, Progress Publishers, Moscow

Mueller, Susanne D. (1980), ‘Retarded Capitalism in Tanzania’, Socialist Register, 1980, , accessed on 19 February 2007.

Sarkar, Sumit(2007), ‘A question marked in red’, Indian Express, 9 January, 2007.

Shanin, Teodor (ed. 1983), Late Marx and the Russian Road: Marx and the ‘peripheries of capitalism’, Routledge and Kegan Paul, London, Melbourne and Henley.

Sweezy, Paul (1980a), “A Critique”, in Rodney Hilton (1980).

Wada, Haruki (1983), “Marx and Revolutionary Russia’, in Shanin (ed. 1983).


[i] I have been greatly enabled to think in this direction of ‘putting capitalism in its place’ as it were, thanks to the chance encounter with the fascinating attempt by two feminist-marxist scholars (Julie Graham and Katherine Gibson) who write under the single authorial sign of J.K. Gibson-Graham. Reading her/their surprisingly neglected work, The End of Capitalism (As We Knew It): A Feminist Critique of Political Economy, [J.K. Gibson-Graham (2006),University of Minnesota Press, Minneapolis and London] was in some senses, a turning point in my own post-Althusserian investigations into capitalism, even though it will be clear that my own inquiries take a very different direction.

[ii] Prakash Karat, “Double-Speak” Charge: Maligning The CPI(M), People’s Democracy, 28 January 2007,

[iii] One should not miss the reference to ‘going over to socialism’, bypassing capitalism and industrialization or those to ‘individual terrorist action’. Anybody even vaguely familiar with Mao’s Critique of Soviet Economics and his insistence on China bypassing the capitalist path, should be able to see the resonance of this ‘narodnik’ idea in the very history of third world marxism. The CPI(M) has always been uncomfortable with this position, but it was manageable till it actually became a practical question.

[iv] VI Lenin (1899/1977), The Development of Capitalism in Russia, Progress Publishers, Moscow.

[v] See Buddhadeb Bhattacharya, ‘Thousands of young people want jobs…they will shape the country’s future’, Indian Express, 19 January, 2007, p. 11. For Sumit Sarkar’s critique, see ‘A question marked in red’, Indian Express, 9 January, 2007. p. 11. It is interesting to note that the term ‘Narodnik’ has been made into such a word of abuse among Marxists that even Sarkar and other Left critics thought it necessary to clarify recently in a press conference, upon their return from Nandigram, that they were Marxists and not Narodniks.

[vi] ‘Socialism’ here must be understood as a project, a search for a world beyond capital, rather than any specific historical form. It is this sense, I believe, that animates the formation of something like the ‘Movement for Socialism’ in Bolivia, whose leader Evo Morales was recently elected President. The Movement for Socialism is like most other South American new Left formations (e.g. the Zapatistas), a movement of the indigenous people rather than a classically Marxist and modernist one.

[vii] See, Wal Hannington (1938), A Short History of the Unemployed, Victor Gollancz Ltd, London.

[viii] See Samuel Brittan, ‘Globalisation depresses western wages’,, accessed on 9 November 2006

[ix] Teodor Shanin (ed. 1983), Late Marx and the Russian Road: Marx and the ‘peripheries of capitalism’, Routledge and Kegan Paul, London, Melbourne and Henley, pp. 28-29

[x] This renewed intellectual search – if not a crisis – for Marx is partly occasioned by the fact that it was during the 1860s and 1870s, according to Raphael Samuel, that an important breakthrough in the social sciences, the discovery of prehistory, “was to lengthen the notion of historical time by some tens of thousands of years, and to bring primitive societies within the circle of historical study” (cited in Shanin: 6).

[xi] Haruki Wada (1983), “Marx and Revolutionary Russia’, in Shanin (ed. 1983). This volume details the events and texts related to this episode through a fascinating documentation.

[xii] See Susanne D. Mueller (1980), ‘Retarded Capitalism in Tanzania’, Socialist Register, 1980, . Mueller’s essay should merely be seen as an indication of the fact that even in well-informed Marxist sections, this was the common knowledge about Narodism.

[xiii] This might link up with Karl Polanyi’s argument that what markets and exchange relations always existed but were embedded in existing social relations and thus not a-cultural matters. What he saw as distinctive of capitalism was the disembedding of markets – and the transformation of ‘the economy’ into abstract, acultural spaces.

[xiv] John T. Chalcraft 2005, Radical History Review, Issue 91, Winter 2005, pp. 13-39

[xv] Cited in Jonathan Fox (1980), ‘Has Brazil Moved Toward State Capitalism?”, Latin American Perspectives, Vol 7, No. 1, Winter 1980, p. 65

[xvi] Alice H. Amsden (1990), ‘Third World Industrialization: Global Fordism or a New Model?”, New Left Review, 182, July-August 1990, pp. 19-25

[xvii] Paul Sweezy (1980a), “A Critique”, in Rodney Hilton (1980), The Transition from Feudalism to Capitalism, Verso, London, p. 50.

[xviii] Louis Althusser and Etienne Balibar (1977) Reading Capital, New Left Books, London, pp. 297-81.

2 Comments leave one →
  1. September 20, 2007 9:09 AM

    Let Dalits become capitalists (a la Chandrabhan Prasad); let farmers become capitalists or at least active players (a la Avasari Khurd); let workers become shareowners in their factories (an experiment rejected by the Left because that would ‘make workers bourgeois’, leaving the Revolution bereft!). Feminists of course, have always argued for individual property ownership by women rather than for abolition of property rights or those vaguely held by say, the family.

    The answer lies in re-instating the right to property as a fundamental right in our constitution. The right was taken away in 70s to make it easier to take over land from zamindars for redistribution. An unintended consequence has been disenfranchisement of the “little guy” from whom the government, in bed with crony-capitalists, can grab land easily.

    The answer to narmada, nandigram, singur, everything lies in making property rights inviolable.


  1. Reading the Maps: Bernard's fling with TINA

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