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Sketches of Historical Capitalism: From The Protestant Ethic to The Capital-Labour Relation.

Maurice Dobb’s commenced his “Studies in the Development of Capitalism” with the question of definition. He argued that quite apart from pedantry, questions of definition and definitional stances “ipso facto” implied the implementation of a “principle of classification” and therefore shape the scope of analysis(1).In reference to capitalism, he identified three major perspectives that applied counterpoised principles of classification and causal explanations of historical capitalism. The first popular approach outlined by Dobb, was that of Werner Sombart who attempted to ascertain the essence of capitalism through an appreciation of the “bourgeois spirit”(2). Max Weber followed a similar approach to the problem of capitalism with the proposed connection between Protestantism and the spirit of capitalism(3). The second position, linked capitalism to the separation of production and retail sale with the introduction of intermediaries. The third conception, and the position taken by Dobb, is derived from the works of Karl Marx who defined capitalism as a “mode of production”, that entailed a unique set of social relations of production(4). The adoption of any of these three classifications has the obvious effect of informing historical analysis and the question of capitalist development. Immanuel Wallenstein once argued that, if the accumulation of previously objectified labour-power was the only criterion of capitalism than all historical economic systems could be characterized as capitalist(5). Such a definition would of course, be of little use to explaining the unique social transformations experienced in Western Europe from the fiftieth century onwards.

The development and characteristics of Western European capitalism (and that of the North-American colonies) was a consistent feature of Max Weber’s scholarly output, much of which had been an attempt to challenge and modify the Marxian standpoint(6). Weber identified modern capitalism with; “the rational utilization of capital in permanent enterprise and the rational capitalistic organization labour”(7). He argued that the source of this rationalization was not liberal enlightenment, but the practical rationalism of the Protestant ethic (8). In evidence of his claims, Weber highlighted the social stratification between Protestants and Catholics in many localities of Europe which showed a consistent trend towards Protestant’s attaining higher socio-economic standing (9). However, the correlation between Protestantism and the development of capitalism as posited by Weber is deeply spurious given the historical fact that capitalistic enterprise was first developed in Catholic Italy and later Catholic Belgium before Protestant England(10).

In many respect, the history of Italy between the 12th century and the 16th century is analogous to later developments in Western Europe, though, of course, it diverges in important aspects. During this period, many Italian city-states developed and centralized political and economic power within urban centers, and moreover attained considerable wealth by means of commerce(11). Thus, Adam Smith noted, their wealth was largely predicated upon shipping and the transference of commodities produced elsewhere to foreign markets(12). In this sense, the wealth of these city-states was accumulated upon the logic of merchant capital. That is, money (m) is used to acquire commodities (c) and then sold on at a higher price (m’)(13). Marx expressed the logic of Merchant capital as m-c-m’. Profit is derived by exploiting differences in prices of production between varied “spheres of production”(14). Merchant capital, thus defined, is not directly related to the process of production. However, it had an important role in the transition from feudalism to capitalism, both as a “dissolvent” of feudalism (subject to its “internal structure”) and a fetter upon true capitalist production and social transformation (15).

Increased circulation of merchant capital had two major affects on the dissolution of feudal relation: firstly, the quantitative expansion of monetary circulation allowed for the concentration of monetary wealth, and secondly, the expansion of this circulation affected spheres of production geared towards the creation of use-value and encouraged production for exchange(16).The concentration of merchant capital and the expansion of trade within Western Europe were greatly advanced by the discovery of the Americas and the new path forged to India in the late 15th century(17).However, the expansion of merchant capital was a historically precursor to the capitalist mode of production and not the thing itself. The view that capitalism constitutes merely a commercial system or that intermediates between production and retail sale is the central criteria offer to wide a definition which can be applied from contemporary history back into classically antiquity. Merchant capital functioned to undermine the feudal system, but this was predicated upon the internal weakness of the mode of production as it existed in 15th century Europe.

By the late 14th century, serfdom had largely disappeared in England and the majority of the population comprised of free peasants(18).The historical process that resulted in the transformation of feudal relation of obligation into monetary relation is tided up with the development of towns and the manufacturing of luxuries that allowed the aristocracy to consume surpluses on their own household(19).Aristocratic consumption helped the development of artisan trades and the development of manufacturing curial to the growth of towns and the development of capitalism. Moreover, this increased conspicuous consumption had two other important effects; firstly, the great lord could no long afford to maintain unnecessary retainers and the increased demand for surplus led to the transformation of tenet relations and the improved cultivation of lands(20).The inability of the feudal lords to support the excess population of retainers and tenets led to the formation new class of proletariat unattached to the land(21). This emergence of a new class represented a watershed moment in the development of modern capitalism. Parallel to Marx’s position, Weber had noted that modern capitalism was defined by the organization of labour and the development of permanent enterprise(22).

The socio-economic transformations that led to the development of a new class of ‘free’ laborers within 14th century England is but one element in the development of capitalism. Take alone, this development does not equate to capitalism, in ancient Rome under the republican system there developed an extensive underclass of free labours(23). Needless to say, Rome’s economy was dominated by agriculture interests and the military apparatus that both equated to the prevalence of the slave-system – not capitalism. Historical capitalism is characterized by the relationship between capital and labour. Explanation of this development cannot be rendered in terms of mono-casual theories. The advent of Protestantism cannot explain the complex series of events that fostered the development of industry and capital accumulation. Nor can the exponential increase in merchant capital after the discovery of the new world, taken alone, explain the sudden transformation of Western Europe’s mode of production. Feudalism had already been weaken by internal contradictions that allowed for the development of towns and the emergence of new class of bourgeoisie who’s interests lay in the accumulation of capital along side the proletariat who had nothing to sell but their labour .
Written by Mathew Toll.

1)Maurice Dobb, (1951), Studies In The Development of Capitalism, London; Rutledge & Kegan Paul, p, 35.

2)Ibid, p. 332.

3)Max Weber, (1976), The Protestant Ethic and the spirit of Capitalism, trans Talcott Parsons, London; George Allen & Unwin, p. 35.

4)Maurice Dobb, (1951), Studies In The Development of Capitalism, p. 7.

5)Immanuel Wallenstein, (1983), Historical Capitalism, London ;Verso, p. 13.

6)Andre Gunter Frank, (1975), “Development and Underdevelopment in the New World: Smith and Marx vs. the Weberians”, Theory and Society, pp. 431-466, p. 431.

7)Max Weber, (1976), The Protestant Ethic and the spirit of Capitalism, p. 56.

8)Ibid, pp. 76-77.

9)Ibid, p. 35.

10)Andre Gunter Frank, (1975), “Development and Underdevelopment in the New World: Smith and Marx vs. the Weberians”, p. 434; Eric J. Hobsbawm, (1969), Industry and Empire, Harmondsworth; Penguin, p. 37.

11)Adam Smith, (1999), The Wealth of Nations: Book I-III, London; Penguin Group, p. 503

12)Ibid, p. 503.

13)Karl Marx, (1971), Capital: A Critique of Political Economy, Vol 3, Edited F. Engels, Moscow; Progress Publishers, p. 326.

14)Ibid, p. 330.

15)Ibid, pp. 331-332.

16)Ibid, p. 327.

17)Ibid, p. 332.

18)Karl Marx, (1988), Capital: A Critique of Political Economy, Vol I, Trans Ben Fowkes, London; Penguin Books, p. 877.

19)Adam Smith, The Wealth of Nations: Book I-III, p. 512.

20)Ibid, pp. 13-14.

21)Karl Marx, (1988), Capital: A Critique of Political Economy, Vol I, pp. 877-878.

22)Max Weber, (1976), The Protestant Ethic and the spirit of Capitalism, p. 56.

23)Karl Marx, (1953), “Marx to Otechestvenniye Zapiski, November 1877”, Selected Correspondence, Moscow: Foreign Languages Publishing House, pp.376-379, p 379.


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