LONG-DISTANCE TRADE AND THE BREAKUP OF FEUDAL RELATIONS

In the debate about the origins of capitalism two schools con­front each other. For one of these, capitalism was born of the effects of the great discoveries of the sixteenth century and the Atlantic trade; for the other it was born of the breakup of feudal relations.

Actually, the conditions needed for the development of capital-. isjrr'are"¾^SSefftialiy two InliumbefrpfoIefarianization and the ac- cumulation of money-capital. While^-accumulatibh^of πiδney-capital occurred in all the trading societies of the East, of Antiquity, and of the feudal world, it never led to the development of capitalist rela­tions, because a supply of free and available labor power was lacking. This process of proletarianization — that is, in practical terms, the exclusion from the village community of part of the rural pop­ulation.— is explained, so far as Europe is concerned, by the break­up of feudal relations. But these two conditions must both be present, and it is the absence of this conjunction that forbids us to speak of “capitalism in the Ancient World,” or “capitalism in the Oriental Empires.”

The expression “mercantilist capitalism” used to describe the period of Europe’s history between the Renaissance and the In­dustrial Revolution (1600-1800) is perhaps responsible for many errors in analysis. It is an ambiguous expression, for this period was in reality one of transition. After the event, we can now see that it was transition to capitalism. But until the Industrial Rev­olution the capitalist mode of production did not yet really exist. The period in question was marked by: (1) the continued predom­inance of the feudal mode of production within the formations of that time; (2) the flourishing of long-distance trade (mainly the Atlantic trade); (3) the effect of this latter development upon the feudal mode of production, which disintegrated.

Money and trade are, of course, older than capitalism. They appeared as soon as the producers had a surplus available and when division of labor made possible exchange of the products in which this surplus was incorporated. But not all exchanges are commodity exchanges: in precapitalist times the bulk of the ex­changes effected between petty producers (whether grouped in communities or independent) within a single society (peasants and craftsmen in the same village) took place without any specialized trader as intermediary, and often even without money playing any role.

However, as soon as a substantial part of the surplus had be­come centralized in the hands of powerful privileged classes (feudal lords, kings’ courts, etc.), this could be used for long-distance trade — usually for exchange against luxury products originating in other societies. A merchant go-between then exploited his mo­nopoly position to profit by his services in bringing different soci­eties into contact. The profit he made, however, based upon the difference in subjective values (social utilities), evaluated unequal­ly in two societies that were ignorant of each other — that is, societies exchanging scarce products without knowing their re­spective social costs of production — must not be confused with the profit made by (the return on) commercial capital.

Only under the capitalist mode of production does trade be­come a capitalistic activity like industrial production and, conse­quently, does commercial capital appear as a fraction of total capital. Thenceforth, commercial capital participates in the general j equalization of profit. Commercial capital’s profit thus arises from the redistribution of the surplus value generated within. a for­mation, from the transformation of this surplus value in its specific J form as profit on capital.

This monopoly was the completer in proportion to the distance over which the trade was carried on and to the rarity of the goods involved. If there were commodity exchanges within the formation that were effected through specialized traders, the latter also tend­ed to organize themselves in monopolies, but these were precar­ious, and failed to bring in the enormous profits obtainable through long-distance trade.

This trade always brought about a concentration of wealth in < money form. But such concentration was not capitalism. Insofar _; as conventional historiography has confused money with capital, and trade with capitalism, it has discovered capitalism everywhere ; — in ancient China, among the.Phoenicians, the Greeks, the Ro- ■ mans, the Arabs of the Middle Ages, and so on. Then the question arises: why did only “European capitalism” come to anything? And, to answer it, religion is invoked (Max Weber and the Prot­estant ethic), or else race (the specific qualities of democracy among the Germanic peoples, or more subtly, Europe's “Greek heritage”).

In reality the concentration of money-wealth in the hands of merchants did not automatically lead to capitalism. For that to happen there was also needed a breakup of the dominant pre­capitalist mode in the formation to which the effects of long-dis­tance trade had been added — a breakup such as to result in the proletarianization, that is, separation of the producers from their means of production so that the way to a free labor market was opened. This breakup took place in Europe but not in China or in the Arab world or anywhere else. Why and how was this so?

In order to answer the first of these questions we need to look more closely at the specific character of the feudal mode of pro­duction. Because Barbarian Europe was backward in relation to the areas of ancient civilization, a full-fledged tribute-paying mode of production did not become established there: feudalism took ∙ shape as an embryonic, incomplete form of this mode. The ab­sence of a strong central authority to centralize the surplus left more direct power over the peasants to the local feudal lords. Dominium eminens over the soil became theirs, whereas in the ∣ fully developed tribute-paying system of the great civilizations, the I state protected the village communities. In those civilizations it was only during periods of decline, when the central authority weakened, that society became feudalized, and this feudalization appeared as a regression, a deviation from the ideal model: peas­ant revolts re-established the tribute-paying system by reconstitut­ing state centralization through destroying the feudal lords, thus putting an end to their “abuses.”

The backward nature of feudal society also implied that the commercial sectors possessed greater independence. The peasants who fled from feudal tyranny, and later those whom the lords themselves evicted in order to modernize the organization of pro­duction, formed in the free cities a proletariat that was at the disposal of the merchants who controlled these cities.

The latter were able, therefore, to do more in the field of long­distance trade than their equivalents in the tribute-paying for­mations had achieved. From the sixteenth century onward, the At­lantic trade in America led to the creation of a periphery for the. new mercantilist system. The trade no longer consisted merely in collecting the products that the local societies could offer; these i societies were directly subjugated so that they might be organized ∣ to produce goods for sale in Europe. The merchants were accord­ed, in carrying out this aim, the backing of the nascent centralized monarchies, whose ambitions they supported, facilitating, through the financial possibilities their prosperity brought with it, the re­cruitment of professional armies and administrative centralization.

The influx of new wealth arising from this trade, based as it was upon dependent producers in America, had an effect in turn upon ‘ the feudal sectors of the formation, hastening the breakup of feudal relations. In order to obtain the new goods, the feudal lords were obliged to modernize their methods of exploitation, extracting a larger surplus and converting this into money. This modernization led them to drive off the land the excess population, as happened in the English enclosures. Rent in kind was gradually replaced by money rent.

Feudal agriculture evolved into capitalist agriculture, either by the feudal lords themselves becoming capitalist landowners or by the emancipation of the peasantry, enabling a new “kulak” class to arise.

All these important social phenomena taken together seem to confirm the view that it was the internal evolution of European rural society that gave rise to capitalism, without the Atlantic trade playing a de­cisive part in the process.

In order to understand the nature of these changes it is necessary to show, following P.-P.

.ship of land constituted a hindrance to it. Thereafter, the Iand- ∣ owner (or the function he fulfilled) ceased to play a determining I role in agriculture, his place being taken by the capitalist farmer ’'■'(or by the latter’s function, when the landowner took this upon 1 himself). In advanced capitalist formations there are no longer any ! “landowners” in the feudal, precapitalist sense of the term, but I only agrarian capitalists.

Thus, the two elements — long-distance trade and the breakup of feudal relations — interacted with each other so as to engender the capitalist mode of production. The concentration of money­wealth at one pole created potential capital: it took place first among the merchants, then among the new rural capitalists. But this potential capital became real capital only because the breakup of feudal relations released a supply of labor power and proletar- ianized the peasantry. The latter became wage workers in the em­ployment of the new industrialists or of the capitalist landowners and farmers of the countryside.

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