Introduction to Coercive Capitalism
I recently edited a volume of the journal Sociology of Development entitled “Coercive Capitalism”.
As readers of this website know, I am a great advocate of economic development. One of the highest humanistic priorities in the world is reducing and getting rid of global poverty. Economic development is the single most powerful tool in eliminating global poverty.
Poverty is having too little money. When people have enough money, they are no longer poor. As nations have increasing amounts of money, the rich grab their share of the proceedings first. But a significant amount of that money does slosh down to the poor.
This explains why all indicators of standards of living such as infant mortality and calories per capita have been on the rise globally for the last two hundred years.
And for the record, GDP per capita has been going up for the last two thousand years. The world really is becoming richer.
But the process of economic development is not without its victims. “Everybody” may be better off in development – but there are particular people who are very much worse off from the process of economic development.
Some of them are impoverished.
Some of them are exiled.
Some of them lose everything that mattered to them.
Many of them are simply killed.
Not all of economic development takes place through the benevolent but impartial hand of an impersonal free market.
The growth process involves a lot of coercion.
The growth process involves a lot of force.
There is a dark side of development that has to be acknowledged – even if the overall effects of development are positive.
The entire June 2021 volume of Sociology of Development involved articles about that darker side.
My own introduction summarized the role of coercion in development on a global historical scale.
That introduction is reproduced below.
Our ancestors’ money had unsavory sources.
Our own money is not that different.
Introduction to the Special Issue
Sociology of Development, Vol. 7, Number 2, pps. 117–126
ABSTRACT Coercive capitalism is development based on the use of force to dispossess either land or labor. Early macrosociologists, both functionalist and conflict-oriented, believed that feudal systems were based on the use of force but that capitalism is based on coercion-free free markets. Wallerstein argued that coercive capitalism exists in the periphery of world systems. We argue that coercion is endemic to all capitalism. Much of the land on which capitalism is based, including all of the Western
Hemisphere, was seized from aboriginal populations. Land seizure was common in historic Europe. Forced labor existed until very recently in both bound apprenticeships and prison work crews. Coercion is used extensively in land acquisition for contemporary capitalism. It can take the form of legal sanctions exerted against the defenseless, or the use of paramilitaries and gangsters to exert pressure on the landholding poor.
This issue of Sociology of Development is about the dependence of development and modern capitalism on forced labor and the acquisition of land by force. One can call development based on the use of force coercive capitalism.
Currently, development sociologists are well aware of the coercive nature of both historical and contemporary economic growth. The Wallersteinian model of world systems is nearly universally accepted. It is standard wisdom in our discipline (and it is also correct) that the economic development of Western Europe was predicated on extractive regimes in the periphery. These regimes used slavery, debt peonage, and other forms of bonded labor. Development sociologists are fully aware that pockets of slavery and coerced labor exist in the global South today, that human trafficking exists, and that in settings such as the Emirates, domestic workers, both migrant and domestic, find themselves under the absolute authority of their employers. We are also well informed about the land grabs and dispossession that are occurring throughout the periphery and semi-periphery today. Massive areas of indigenous, agricultural, and urban land are being transferred in the global South. Some of these transfers are amicable sales. Some are distress sales. The distress can be due to the astringent competitive environment of the new neoliberal economies. It can also be artificially induced by land harvesters who induce poor people to overextend their assets so that they will fail. Transfers can also be due to plain ordinary physical coercion, as when villagers are told to evacuate an area under threat of violence from paramilitaries.
Coercive capitalism is inconsistent with a broad range of the macrosociological literature. Some of my targets are straw men, literature that has long been forgotten and that everybody hates. But some are actually stout warriors, revered classics in comparative sociology that are starting to age badly.
Coercive capitalism is inconsistent with Baby Marxism. Simplified Marxism of the Communist Manifesto / Kautsky school would differentiate between the feudal and the capitalist mode of production (Kautsky 1892). In feudal production, laborers are bound to a piece of land and are forced to work for their lord. In capitalism, capitalists control the means of production and workers sell their labor on a free labor market. They are always free to quit or to change employers at any time. Capitalist domination of the ideological superstructure obscures the extraction of surplus value. The bourgeoisie obtain everything they need from the working class without compelling anyone to work for a particular employer. Coercive force is used to repress the labor movement and any organized worker opposition to capitalism as a whole. But the labor process itself is completely free (1).
The clear distinction between coercive pre-capitalism and a capitalism with strictly free markets was a staple of midcentury functionalist macrosociology. Both modernization theorists and comparativists such as Bendix (1974) and the authors of Industrialism and Industrial Man (Kerr et al. 1964; see also Hoselitz 1960) had an idealized Weberian view of capitalism. Preindustrial societies were based on traditional aristocratic authority. Industrial societies were based on technical rational authority. The emphasis on rationality led to improvements in science and economic functionality. Aristocratic systems bound labor in place, discouraged migration, discouraged social mobility, and discouraged the pursuit of profit as inconsistent with noblesse oblige. Forced labor was consistent with the military culture of a nobility grounded in the duties of armed service to a lord. Modern bourgeoisies favored the efficiency of free markets; they thus dismantled the limits of mobility of both capital and labor, producing freedom, innovation, efficiency, and growth (2).
The “good institutions” writers also argue that successful capitalist economies are free of coercion. They acknowledge that corrupt pathological economies exist where coercion occurs. However, these settings are punished with economic stagnation. For Douglass North (1990), successful capital accumulation occurs when there is respect for property rights. Forcible alienation is the epitome of disrespect for property rights. The classic “good institutions” explanation of the relative prosperity of Anglo North America versus Iberian Central and South America invokes both the weakness of legal systems protecting property rights in the Iberian colonies and the corruption of good institutions that was associated with slavery in those systems (Acemoglu, Johnson, and Robinson 1991). To their credit, they note that when British systems turned to slavery, as they did in the Caribbean islands, coercion produced the same degradation of institutions and growth.
Barrington Moore (1967) was a strong believer in a clear pre-capitalist/capitalist split. The essence of his argument about the American Civil War was that the North was capitalist while the South was feudalist. A feudal bound-labor system was inconsistent with the future economic growth of American capitalism. The Civil War was a structural necessity to eliminate forced labor from the American context. Moore addressed pre-capitalist to capitalist transition in other countries, too. He allowed for the presence of authoritarian states in the German and Japanese cases. However, he was clear that the repressive apparatus pertained narrowly to questions of governance, while capitalist labor markets themselves remained free.
Wallerstein (1980) differed significantly from these authors. The Modern World System laid out a model where the high-wage free labor markets of the core are underpinned by slavery and coerced labor in the periphery. This position is now standard thinking in development sociology. Keep in mind that the two separate labor markets are not as different as they might appear. Free labor markets do exist in the periphery. Coerced labor exists in the core. Early modern Europe had not only slavery but bound apprenticeship and servants who were legally bound to their employers. The United States long had dual labor markets in the North and South. Furthermore, forcible appropriation of land was the rule rather than the exception. There was not only the classical primitive accumulation discussed by Marx but also the widespread forfeiture of property associated with secular and religious politics. Henry VIII appropriated England’s monastic lands. The English dispossessed their Celtic rivals in Wales, Scotland, Ireland, and the Marches. The Huguenots were dispossessed by the French. Jews were vulnerable everywhere.
Development sociologists seriously underestimate the importance of coercion as the foundation of global economic growth. Let’s ignore for now the role of slavery and forced labor (a huge lacuna, but that’s what we’re doing). Let us only consider the role of forcible land acquisition. Even more, let us only consider land that was taken from aborigines, without including any of the rural proletarianization that occurred within settled societies.
A hundred percent of the United States economy came from territory that was seized from indigenous people.
A hundred percent of the Canadian economy came from territory that was seized from indigenous people.
Almost a hundred percent of the economies in South America, Central America, and the Caribbean Islands came from territory that was seized from indigenous people. Pockets of indigenous economic autonomy exist in parts of Bolivia. But this is a miniscule sliver of the Latin American economy.
The Central and Eastern Russian economy came from territory that was seized in the Muscovite expansion.
In the eighteenth century, most of the forested or highland territory of Southeastern Asia was occupied by indigenous groups. This land became proletarianized not only through European colonization but also through seizures by local elites in local cities looking to profit from export of forest products, rubber or minerals (Drabble 2000; Phongpaichit and Baker 2002).
I could tell stories from all around the world of the consolidation of control over indigenous territories by more privileged economic groups. But pretend for a moment that forcible dispossession of land exclusively occurred in the Western Hemisphere and Oceania. Even with this obvious understatement, primitive accumulation of land would have been the origin of 34% of the world’s GDP today.
You can alter this crude arithmetic by adding the contribution of seized land in other settings. You can calculate a contribution for forced labor. And yes, you can temper it with other factors of production that were present in the locations under discussion. The 34% figure is more for shock value than serious econometric analysis. But it does underline a basic point that coercion has been responsible for a significant proportion of the accumulated wealth present in the world today. We live in a world that is practically made of money. But it had its start as dirty money.
* * *
What is the logic behind coercive capital?
Most authors, when they raise the question of dispossession, cite David Harvey’s famous essay, “Accumulation by Dispossession” (in New Imperialism, 2005). So will I. But there are two David Harvey models of dispossession, a simple one and a complicated one. I vastly prefer the complicated one.
“Accumulation by Dispossession” gives the simple version. Harvey begins with the assumption that capitalism is constantly facing a crisis in its capacity to find outlets for surplus extracted value. You can explain these crises using the formal logic of Das Kapital. Or you can use any other theory of economic stagnation you happen to like.
Once there is a crisis of profitability, capitalists need cheap inputs. Free inputs are the cheapest inputs you can possibly find. Seizing assets from other people makes those inputs practically free. True, there are the costs associated with the actual process of alienation. But once have taken what you want, you can use it as much as you like for no cost at all.
“Accumulation by Dispossession” is generally invoked to explain the seizure of land or of resources, such as minerals, that could be based on that land. Harvey explicitly extends his definition of accumulation by dispossession to be far more general. Seizing indigenous labor is accumulation by dispossession. Seizing aboriginal knowledge is accumulation by dispossession. Seizing aboriginal culture is accumulation by dispossession. The logic of Lady Gaga’s song “Bad Romance” applies: “I’ll take your everything as long as it’s free.”
Most development sociologists would not view an American restaurant serving its own version of Brazilian feijoada as accumulation by dispossession. Technically, no Brazilian cook was paid for his or her culinary knowledge; the American restaurateur is profiting from this. But we associate accumulation by dispossession with bloodier stuff.
I personally prefer the more complicated application of David Harvey that comes from Jason Moore via Bunker’s treadmill of production model with expanding frontiers. Harvey (1982), Bunker and Ciccantell (2005), and Moore (2010, 2015) argue that geographical production space deteriorates over time. Resources become exhausted. Soil becomes degraded and worn out. Production space becomes congested, and ground rents rise. The reserve army of labor becomes exhausted, and wages rise. Ultimately, old production spaces generate crises of profitability.
Harvey argues that any problem in capitalism can be resolved through either a technical fix or a spatial fix. Some issues associated with the aging of production spaces can be corrected with a technical fix. Mature oil deposits can be renewed by fracking. Crowded cities can be made denser with advanced forms of skyscrapers that put more productive space on the same footprint.
However, when technical fixes are not available, capital has to renew itself with a spatial fix. It incorporates more space into capitalist economy, taking areas that were producing low levels of capitalist value and monetizing them. The archetype of this process is an expanding city that takes agricultural fields in its periphery and converts them first into exurbs, then into suburbs, then into central city space. They become monetized both from their use in the housing market and from their use in the production of goods and services (3).
Expansion of the global capitalist economy into indigenous areas accomplishes the same purpose. Capitalists obtain new unexhausted lands for farming. They obtain new supplies of mineral ore, oil, and gas. They obtain lumber and other forest products, such as furs. (Don’t forget how Jacob Astor made his fortune.) They obtain displaced people who can be put to work, either coercively or consensually for low wages. And they get space for development projects which involve short-term construction projects regardless of the ultimate viability of the final product.
Is this process coercive? Not necessarily. It is not coercive if it does not involve
a nation-state seizing poor people’s land through military force or legal fiat (America’s seizure of First Nations lands: Dunbar-Ortiz 2015);
a colonialist power arming one local state to fight another and dividing the proceeds with the local state (Britain playing Indian states against each other to build the Raj: Moon 1989);
state declaration of the population of an area as either terrorist or criminal, leading to military and legal sanctions (Colombia’s use of the war on drugs to invade areas of future military investment: Hristov in this volume);
the use of paramilitaries, gangsters, or other armed groups to force residents out of a territory (gangsters as controllers of access to slum space in Mumbai: Weinstein 2008);
the destruction of land by such means as flooding with a dam or drainage of the water table (the Three Gorges Dam in China: Padovani 2006);
denial of land ownership through misrepresenting registry documents, falsifying registry documents, insisting on independent corroborating documentation, or spurious challenges to ownership in court (Levien in this volume);
encouragement of speculative financial or agricultural practices by the poor to promote financial failure and land sales under distress (Green and Bylander in this volume);
one-sided provision of financial support to competitors of the poor to promote financial failure and land sales under distress (agricultural policies of the Shah of Iran: Parsa 1989);
simple encroachment by the future owner (Levien in this volume);
enslavement of the resident population (the entire history of slavery: Drescher 2009); promotion of debt peonage (brick factories in India and Pakistan: Ercelawn and Nauman 2004; Madhereswan and Paik 2010);
promotion of human trafficking and migration to coercive employers (abuse of domestic servants in the Emirates: Human Rights Watch 2014);
corve´e and the requirement of work for particular employers to pay taxes (taxes in Dutch currency to recruit workers for Dutch employers in colonial Java: Geertz 1969);
criminalization of innocent people to provide prison and plantation labor (vagrancy laws in the Reconstruction South: Cohen 1976).
That is a lot of ways that coercion can be used to stimulate development. Coercive development is common. It deserves more attention.
One concluding note before I introduce the essays in this volume. Most students of dispossession focus on the humanistic consequences for the victims. This is a profoundly important focus, because what happens to the dispossessed is appalling.
A cynical Simon Legree could focus on the benefits of dispossession in increasing aggregate rates of national economic growth. This would be an intellectually viable program, although it would not win Simon Legree any popularity prizes.
There is a third important consequence of dispossession that too often gets forgotten. Landlessness is a fundamental determinant of violent conflict. Jeffery Paige (1978) differentiated between peasants who owned their own land and rural proletarians that did not. In a national cross sample, and in his case studies in Vietnam and Latin America, the rural proletarians were far more likely to rise in armed rebellion than were the peasants.
In some cases, the struggles of the landless are to prevent dispossession or to reclaim land that has been recently lost. The wars of the American First Nations people would almost certainly fit this description. However, the propensity to struggle continues generations after the original lands were lost. Proletarians in South Vietnam’s Mekong Delta fought until the 1970s against the French and the Americans despite their land loss having occurred in the late nineteenth century. Loss of land takes away the conservatism of property owners who have something to lose. It breaks down the isolation of peasant cultivators and promotes solidarity with their neighbors. It takes away the internecine economic rivalries that exist between rural smallholders and provides common incentives to fight for higher wages or concessions from the state.
The expansion of agribusiness generally creates new violent conflicts, particularly if a new export crop is introduced. New crops require new lands and new ecosystems. Established farmers move into previously unexploited territory looking for suitable terrain. The introduction of coffee to Central America in 1860 to 1880 led to substantial subsequent social conflict (Williams 1994). The introduction of cattle ranching to Central America in the 1960s and 1970s led to the Nicaraguan Revolution and civil wars in El Salvador, Honduras, and Guatemala (Williams 1986). The expansion of commercial export agriculture in the Western Sahara of Tunisia contributed to the start of Arab Spring (Gana 2012).
Note that not all landlessness comes from capitalist dispossession. Landlessness also has demographic causes. Rapid population growth can produce more young people than can possibly be absorbed by existing farms. Those who do not inherit land become landless by default.
Landlessness can also be caused by ecological destruction. Semiarid land in much of the world is being destroyed by desertification. This is a particularly salient problem in the Sahel, in the Horn of Africa, in Yemen, and in the belt running from eastern Syria to Western Iraq to Kurdland and Southwest Afghanistan (Cohn 2021).
I have just identified the regions characterized by Boko Haram, Nigeria’s civil war between herders and farmers, Chad’s armies of mercenary soldiers, the secession in South Sudan and the subsequent ethnic war between the Dinka and the Nuer, the Eritrean Independence movement, the war between the Amharit and the Tigray in Ethiopia, the clan wars and state collapse of Somalia, the civil war in Yemen, the ISIS Caliphate, the mercenary armies of Kurdland, and the Taliban in Afghanistan. This is an impressive collection of some of the most marked internal insurgencies in recent history.
All these regions are characterized by overpopulation on a fragile ecosystem, the absence of any systematic programs of sustainable development, reproductive health services, or population control, the expansion of human population, the expansion of herds, the destruction of ground cover, the nonviabilization of herding and agriculture, and the recruitment of the local population to violent armed groups for lack of any other method of sustenance (Cohn 2021).
Note that Paige was incorrect in arguing that landlessness would lead narrowly to radical class conflict. Landlessness leads to whatever form of violent organization will aid the economic survival of the landless. If the dispossessed have to turn to crime, they will. If they have to turn to ethnic conflict, or warlordism, they will. If they have to turn to education, this could be a positive outcome. But these might the types of schools Matthew Lange (2011) writes about, run by ethnic entrepreneurs with an ethnicsupremacist curriculum and ties to ethnic armed groups.
All too often, the dispossessed are the victims of violence from state and nonstate armed actors acting on the behalf of local elites. But the story does not end after the first dispossessing violence. Dispossession creates the first of what may be many generations of precarious populations with no solid means of economic sustenance. They are potential recruits for violent entrepreneurs who are willing to offer them daily sustenance, a sense of mission, a sense of dignity, and a sense of respect.
* * *
The essays in this volume illustrate the widespread nature of coercive capitalism and survey the mechanisms by which it operates.
Hristov considers forcible dispossession by paramilitaries in Mexico, Colombia, and Honduras. The state and the military are allied with the economic elite or are themselves members of the economic elite. Military action by either the state or proxies of the state is used to seize territory for development projects. Hristov refers to this as procapitalist violence.
Levien writes about land mafias in India. Neoliberal reform has produced a giant wave of land speculation in India. Land mafias are essential to acquiring cheap land for either development or rapid resale. Here, the mechanism of dispossession is not military force but abuse of the legal system. Land mafias target poor people who own land but lack legal sophistication or resources. Facing specious challenges to their titles in court with little capacity to defend themselves, they are induced to sell their property at steep discounts.
Green and Bylander discuss the abuse of microfinance programs in Cambodia to force poor people from their homes. Microloans are aggressively marketed with intentional disregard for the borrower’s ability to pay. The collateral is generally the borrower’s home. The creditor’s intention is to acquire the collateral when the borrower defaults. Repossessed land can be sold to developers at substantial markups.
Marc Steinberg describes forced labor in Victorian Britain. Our stereotype of Britain is that it was a free labor economy. Steinberg demonstrates that much of the nineteenth century British labor force was bound. The Master and Servant Act made workers criminally liable for the nonperformance of duty, including absenteeism, poor work, or striking. Workers prosecuted under the act were generally convicted and imprisoned. Bound labor was not just found in plantations in the periphery. It was common in the wealthiest nation of Europe’s core.
The stories presented here are grim. Economic growth may be associated with the expansion of personal liberties—but the process of producing that growth can be absolutely coercive and brutal.
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1. Of course, Marx himself wrote about slavery, of various forms of coercion experienced by workers in Manchester, and, as discussed later, primitive accumulation. However, the general model of Das Kapital is strictly free market. In Socialism and Colonial Policy (1907), Kautsky came as close as he ever would to considering world systems. He viewed colonies as unproductive vestiges of militarism. They produced no value for capitalism even as Hilferdingian capital sinks.
2. The argument that the absence of coercion promotes technological innovation is not unreasonable. Comparable arguments have been made by social democratic development theorists such as Sydney and Beatrice Webb and Wolfgang Streeck. The Webbs (1902) argued that parasitic capitalism used coercion and labor sweating to avoid the need for technological skill in management. Streeck (1984) makes the same argument for Fordism. Both argue that increasing worker strength eliminates sweating as a viable competitive strategy, forcing managers to invest in technological improvement and raise productivity.
3. Note that the example of new skyscraper technology is also a spatial fix. The developers are monetizing the empty airspace above existing buildings.