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Coercive Capitalism


The standard wisdom is that capitalism operates through voluntary economic forces and freedom. Non-capitalism operates through coercive forces and lack of freedom. Capitalism involves the free choices of people participating in markets. They can choose whether to buy or not to buy. They can choose whether to work or stay home. They can choose whether to work for Employer A or Employer B. Because people are rational and profit maximizing, they make the choices that are best for themselves. People’s rational decisions lead them to have the products they want, and the job they like the best given their qualifications. Free labor markets and free product markets are what makes capitalism both desirable and effective - work and purchasing based entirely on free will.

The opposite of a free labor market is coerced labor. The obvious example of an unfree labor market is slavery. However, nearly all social formations before capitalism involved some sort of forced labor – even if they did not use slavery per se. Marxists refer to this mode of production, not inaccurately, as feudal production. A worker has a legal obligation to serve some master who has a right to that worker’s labor – generally the local lord. The worker has to work X number of days for the aristocrat, or has to fight X in that aristocrat’s wars, or has to provide the aristocrat with X% of anything he makes or grows. The worker is not free to leave and pick a new aristocrat. The feudal lord “owns” him through institutions of feudal liege. There are nine million variations of this theme. Such feudal labor ,however, was the rule rather than the exception in the ancient world, and in the medieval world; it is still common in the Global South today – often taking the form of debt peonage – where the peasant is not free to leave until he pays off some loan that he can not possibly repay. The former Communist nations often had unfree labor markets – where workers were assigned to a job and that is where they were expected to stay.

This tidy division of the world into voluntary capitalism and coerced non-capitalism is somewhat of a myth. While capitalist systems are “freer” than feudal systems, there is still substantial use of force in market relations under capitalism; there are many examples of people who are forced to work, forced to buy or forced to sell not because they want to work, want to buy or want sell, but because their employer or trading partner is stronger than they are. They are told whom to work for, what to buy and what to sell by authorities backed by armed force. The prosperity of the rich does not come from their efficiency at market relations; it comes from their ability to use violence to get the money they want.

This all sounds very melodramatic. But let us consider a simple list of the forms of use of force for economic advantage that have existed under capitalism. To avoid exaggerating my case, I do not use any examples before 1600. By 1600, economic life in Western Europe was governed by capitalist relationships. Although many of my examples are historical, some of those historical incidents occurred not long ago. Note that the institutional and property arrangements that came from the earlier acts of violence still continue and still exist today. So much of our present day prosperity comes from “fruit of the poison tree.”

1. Land Seizure.  Nearly all capitalist economies are based on land and real estate. Food is grown on farms. Cities are built in physical space. Most of that space was originally seized by force rather than purchased peacefully. The territory that makes up the United States of America was originally populated and owned by Indians. White settlers came from Europe, landed in America and took the Indian land for themselves. Virtually all of the economic activity that occurs in the United States occurs on land that was taken by force.

The United States is not unique in this regard. What applies to the United States applies to Canada, Australia, New Zealand and South Africa. It also applies to all of the Spanish and Portuguese colonies in Latin America - Mexico, Brazil, Argentina, all of that land was taken by force. It applies to Russia as the Muscovites expanded eastward conquering non-Muscovite peoples. It applies in Southeast Asia. Before 1800, most of Southeast Asia was forested and sparsely populated. As international trade in agricultural goods became increasingly lucrative, valley dwellers in Southeast Asia moved upriver and uphill, chopped down the forests and put in farms. The hill people who originally lived in these areas were forcibly displaced.

Land seizure continues to the present day. Right now, there is a global land grab with vast amounts of land throughout the Global South being obtained by Chinese, Americans, Europeans and local urban elites. Most of those transactions are voluntary, market relations. However, many of those transfers have been violent. Colombia has a long history of economically well-connected generals starting military campaigns against “terrorists” and “rebels’, depopulating an area for “security” reasons and then buying up the vacated land afterwards for development projects.

2. Slavery. Slavery was integral to the economic growth of the United States. By 1870, the United States was the seventh richest nation in the world. That money came primarily from the sale of cotton to Great Britain. Slavery in the United States was technically abolished with the Emancipation Proclamation of 1863. However, all of the money that had been earned from cotton from its inception up to the fall of the Confederacy came from slave labor. 

Britain profited as much from slavery as did the United States. Britain was one of the first nations to abolish slavery within its territories. It also enforced the abolition of the international slave trade. However, the cheap cotton that was the basis of the Industrial Revolution came from other nations that did use coerced labor. Britain’s other primary cotton suppliers were India and Egypt. Both had labor forces bound by traditional feudal obligations to landlords.

3. Bound Apprenticeship and Servanting. Forced labor was not something that only existed in non-European settings. It was also not something that whites exclusively did to non-whites. Much of the white Western European labor force historically worked in unfree labor markets. The primary form of bound labor in Western Europe was apprenticeship. When a youth was taken on as an apprentice, he was forced to work for his employer for a fixed number of years – often seven. While he was an apprentice, he was not free to leave. Britain extended the rules of apprenticeship to all forms of personal employment and servanting. Workers in Britain were subject to the Masters and Servant Act. Under the terms of the act, leaving an employer, not coming to work or poor performance of duty could be punished by fines or imprisonment. The law was not a dead letter. Workers were routinely prosecuted under the Masters and Servant Act. Between 1858 and 1875, the year of the abolition of the act, over 10,000 workers a year were imprisoned.

4. Piracy. Much of the economic superiority of Britain did not come purely from the British economy being able to outcompete its rivals. In 1500, Britain was a secondary economic power; the largest wealthiest economy in Europe was Spain. In the late 1600’s, the dominant economic power in Europe was the Netherlands. Britain gained supremacy over both powers through piracy. Britain had the advantage of not having to mount a land army, and could concentrate its forces on becoming a naval power. For the purposes of economic warfare, the English monarchs simply commissioned pirates to harass foreign shipping – with the right to keep anything they seized. Neither the Spanish nor the Dutch could build a navy strong enough to defend the sea against pirates, while also protecting their military interests on the continent. Britain’s military advantages in the seventeenth and eighteenth century turned into lucrative empire in the nineteenth century.

5. Forced Opening of Trade. Not every nation which traded with the West voluntarily wanted to do that. The Japanese closed their islands to European trade in 1639. It remained closed until the 1850’s, when Commodore Perry led a naval expedition to Japan that forced Japan to do business with foreigners.

Nineteenth Century China wanted to restrict the sale of opium within its borders. The British wanted the free sale of opium in China. Britain fought and won two wars with China – to insure that its right to sell drugs would go unimpeded.

The countries in the Warsaw pact wanted to have semi-closed economies, with no Western ownership of Eastern European assets. This ended when Russia lost the Cold War. The United States and Russia were engaged in an ever more expensive arms race that the United States could afford but Russia could not. The economic strains of military defense did severe damage to the rest of the economy. Russia opened up to the West.

Japan and Eastern Europe probably benefited from being opened to world trade. China most certainly did not. But in all three cases, military rather than market dynamics determined what global trade patterns would look like.

*  *  *

The point of this essay is not to shock or appall readers with a demonstration of the “evils of capitalism”. Overall, the humanistic benefits of the global expansion of economic growth have been dramatic. Greater food security, better medical care and access to a cornucopia of technological marvels have all been the product of the expansion of capitalist development.

However, a price was paid for this prosperity. In all too many cases, that price was blood. What was done to the Indians, what was done to the slaves, or what was done to the sailors on the Spanish and Dutch ships was not something anyone would want done to oneself. And the number of sacrifices was not small. Nearly all of the original residents of most of the territory of the world - all of North America, all of South America, all of Oceania, much of Asia, and much of Africa - lost their land and everything they had because someone else wanted that land to get rich. The scale of expropriation was massive.

But Valhalla was built – even if building Valhalla required the shedding of blood that should not have been shed.

Hopefully, a Gotterdammerung will not come from all this.

For More Information

The full story of the expropriation of the indigenous people of the world has not been told – particularly in the light of the intimate relation between that expropriation and economic growth. For a good collection of essays on the phenomenon in various nations limited to ranching rather than agriculture, see Adhikari, Mohamed (ed.), Genocide on Settler Frontiers: When Hunter Gatherers and Commercial Stock Farmers Clash. New York, Berghahn.

For the United States, see Dunbar-Ortiz, Roxanne. 2014. Indigenous People’s History of the United States. Boston, Beacon. For Canada, Dickason, Olive Patricia 1997. Canada’s First Nations: History of Founding People From Early Times. Toronto, Oxford.

The master theorist of capitalist expansion through the incorporation of space is David Harvey. See Harvey, David. 2019. Spaces of Global Capitalism: Theory of Unequal Geographical Development. London, Verso.

On primitive accumulation in Colombia, see Hristov, Jasmine. Paramilitarism and Neoliberalism: Violent Systems of Capital Accumulation in Colombia and Beyond. London, Pluto. Further support for the Hristov argument can be found in Richani, Nazih. 2002. Systems of Violence: Political Economy of War and Peace in Colombia. Albany, State University of New York.

For the role of international slavery and forced labor in producing growth in the developed world, see Wallerstein, Immanuel. 1980. Modern World System I: Capitalist Agriculture and the Rise of the European World-Economy in the Sixteenth Century.

On the role of piracy in catapulting Britain to world dominance see once again, Wallerstein, Immanuel.1980. Modern World System II: Mercantilism and the Consolidation of the European World Economy 1600-1750.

On the history of slavery see Seymour Drescher’s 2009. Abolition: a History of Slavery and Antislavery.

On bound labor in Britain, see Marc Steinberg. 2016. England’s Great Transformation: Law Labor and the Industrial Revolution.

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