Democracy Against Capitalism: The Separation Of Politics and Economics

Democracy Against Capitalism is a collection of essays written by Ellen Meiksins Wood. In the first essay, she says that many contemporary Marxists have abandoned the historical materialism which is central to Marx’ own thought. Here’s how she describes historical materialism:

A materialist understanding of the world, then, is an understanding of the social activity and the social relations through which human beings interact with nature in producing the conditions of life; and it is a historical understanding which acknowledges that the products of social activity, the forms of social interaction produced by human beings, themselves become material forces, no less than are natural givens. (Kindle Locations 491-494.)

This seems uncontroversial, in fact It’s really hard to believe anyone disagrees without relying on some other human-made theory.

She illustrates this idea with a sketch of the history of the development of capitalism, showing how capitalism separates politics and economics. This isn’t about the academic study of these fields, but about the way capitalism flowed from earlier times, primarily in the UK.

She starts with the proposition that a central problem for any society is producing the necessities of life and allocation of the production among members. That decision is political, not economic. The explanation begins with a definition of the state as the “complex of institutions” through which society organizes itself. This organization is an instrument of power, and exercises coercion through various means, including violence. Smaller social units, families or clans, owe certain common duties to the whole.

She says that in the earlier times, decisions about production and allocation were made by “public or communal authority”. (Kindle Loc. 676).

Whether or not the essential object of the state is to maintain exploitation, its performance of social functions implies a social division of labour and the appropriation by some social groups of surplus produced by others. It seems reasonable to suppose, then, that however this ‘complex of institutions’ came into being, the state emerged as a means of appropriating surplus product – perhaps even as a means of intensifying production in order to increase surplus – and as a mode of distributing that surplus in one way or another. Kindle Loc. 597.

I’m not sure what to make of this quote. She cites a book by Marshall Sahlins, Stone Age Economics for this proposition.

In the imperial period of Roman government, the supremacy of private property was reasonably well established, When the Roman Empire broke up, the state fragmented. Local feudal lords maintained control by a combination of feudal rights under whatever was left of a central authority, the offer of protection to the local people, and brute force.

Feudal Lords carried out the functions of the state in vestigial form, dispensing justice and providing and organizing defense, social responsibilities that went with their control over production and allocation. Gradually the central authority regained strength, and Feudal Lords ceded some of their duties and powers, but not control of the land or the work done by the people on the land or the right to control allocation of production. The story continues to the present, with the owners of private property maintaining their power to organize production and expropriate the surplus for themselves through their absolute right of control and ownership.

Wood only provides a sketch, and my retelling is a sketch of a sketch, but it’s compelling once you grant the premise that decisions about production and allocation are political issues. Of course, we don’t know how our Stone Age ancestors handled these things. Even so, the assertion that matters of organization of production and allocation of the products is a social matter is quite reasonable. After all, the rules that force that outcome are upheld by the power of the state, through violence and otherwise.

From there, the part of the story that starts in Feudal societies makes good sense. A lot of this history can be seen in the fights over English Land Law, the change from a political system where the king owned all the land to vesting of full title in aristocrats and eventually in the hands of ordinary people. Here’s the Wikipedia version.

This story helps us to see how we got to the place where absolute control of private property became central to our social structures. It wasn’t inevitable. The story is quite different in other countries. For example, in France, the King maintained his central role in the economy much longer, until the French Revolution. For an interesting discussion of the role of the King in the bread markets of France, particularly Paris, see Bernard Harcourt’s excellent book The Illusion of Free Markets, which I discussed here. Harcourt also discusses the arrangement that government should control punishment.

Perhaps as a result, even today the state plays a larger role in the French economy than in the US or the UK. As an example, the telecommunications businesses there are privately owned, but the government regulates the business tightly and insures competition. That keeps prices very low, and services high.

Along with the power to organize production, the capitalist system gives private interests the absolute right to whatever profits it can extract. This fact has such a long history, it appears to be the result of impersonal natural law to economists and others. In part this is because the absolute right to profit is hidden inside the absolute right to property. To the workers, the struggle for wages appears to be an economic struggle, not a political one. To the State, it means that there is little legislation and little regulation to protect ordinary citizens as workers or consumers, or the land, and the courts are always ready to strike down the new laws or to construe them so narrowly as to make them useless. And for most of its history, the US has seen fit to allow private interests to control Polanyi’s third fictitious commodity, money.

When economics began to emerge as a separate academic discipline in the 19th Century, it confronted this situation, and never questioned any of the social structures it found in place, especially the right of owners of capital to extract all profit, control the organization and production of most goods and services, and control the lives of the workers. The existing structures were written into the foundations of the two separated disciplines.

The leftist view, that such decisions are political, continued into the New Deal era, when government began to side with the workers and ordinary people. One landmark piece of legislation was the pro-union Wagner Act. Then, in the 1970s, Democrats joined what C. Wright Mills called the Capitalist Celebration, embracing capitalism as explained by economics. This led to the New Democrats, the Third Way Dems, the Blue Dogs, and the rest of the corporatist Democratic politicians. For the last 40 years, no one has seriously questioned this allocation of power.

There is a curious divide in the understanding of the allocation of production. Workers who own farms, for example, or artists, consider that the things they produce belong to them, and can be used or sold by them without regard to others. Workers who work for other people never make that connection. They do not think of the things they produce as theirs, or even partly theirs. They just assume that these things belong to the owners of capital. But consider this. Suppose a person who works for a tech company dreams up a new idea. Who owns that new idea? Probably the worker has the better claim. As a result tech companies routinely make employees sign contracts giving them ownership, and even that is not necessarily conclusive.

If all workers thought of themselves as having claims to their work product, we’d have a different kind of capitalism.

31 replies
  1. Thomas Doehne says:

    Marxist ‘analysis’ of historical events doesn’t convince me. Too much of it relies on either redefining words to mean things differently than they are commonly understood to mean, or it ignores or brushes aside things that don’t fit into the analysis. The Marxist interpretation of the Middle Ages fails badly in these ways. The description of feudal land rights above is a hot mess that simplifies away all the aspects of medieval governance that contradict the Marxist interpretation.

    First, the high Middle ages saw a struggle of governance between Church and nobility. While one can force that struggle into a Marxist interpretation, it’s a Procrustean result that removes key aspects of their reality. Faith and religious belief held enormous force in medieval society, and were one of the most significant sources of power. The Church wielded enormous power after it developed tools to control peoples’ access to salvation, and also from control over marriage and thereby legitimacy. The Protestant Reformation eventually broke that power, after 150+ years of wars ending with the Treaty of Westphalia in 1648 establishing the primacy of the territorial state/nobility over religious institutions.

    Likewise, the above transition from Roman times to the establishment of feudalism glosses over cultural aspects of the transition to pretend that the feudal rights were a simple continuation of Roman property rights, ignoring significant changes that interfere with a Marxist interpretation. Most simply, feudal rights were a mutual web of rights and obligations that included various rights over land, labor and harvesting rather than something that resembles property in the sense we think of it. (Also, high middle ages England is a poor place to use as a model for feudalism, since the social structure there was a result of conquest in 1066. The power and social structures sprang from one ethnic group conquering another, unlike much of the rest of Europe.)

    I see governments as a set of institutions that govern individuals or families in a society. In modern America we are largely governed by religious, territorial and economic instutions. Rather than centralized institutions, we have many competing ones, and a separation of power especially between religious institutions, economic institutions, and territorial ones. The economic governments developed recently, in the last 250 years — corporations. Seen this way, the current political struggles are between territorial governments and economic ones with the Republicans and some Democrats supporting the move of various powers and duties to corporate/economic instituitions. It’s still government, just changing who governs.

  2. earlofhuntingdon says:

    Thanks, Ed.  Glad to be at this again.

    Keeping workers, including but not limited to those in the C suites, from realizing that they are all sources of revenue and profits seems vital to American capitalism.  It explains their perennial assaults on unions, with considerable help from the government the largest capitalists largely control.  It explains their more modern assaults on public education.  While part of that can be explained through selfish use of tax dollars, controlling the kind of education the poor and middle class receive is also vital.

    Needless to say, this explains the long American tradition of keeping the lower orders fighting amongst themselves rather than those at the top.  Older immigrants are constantly encouraged to fight the newer.  To that extent, there’s nothing new in quality in Trump’s obsession, which he shares with many of those around him.  His version is different in quantity.  His voraciousness, shared enthusiastically by Sessions, is an old flame rekindled.

    • Ed Walker says:

      Thanks. I had eye surgery that seems to have been reasonably successful, so I should be able to move more quickly going ahead.

      As you say, the implications of this view are wide-ranging. There have been some recent articles in the lefty media about the separation of politics and economics, but the Marxist approach has the advantage of looking at the underlying history which offers another way to think about possible reorganization.

  3. Ed Walker says:

    Edit: this is a reply to the very helpful comment of Thomas Doehne.

    I appreciate this comment. I hope I made it clear that this was my sketch of Wood’s sketch, and at least some of the problems are caused by the truncation, and more no doubt by my own lack of knowledge and understanding.

    The point that seems right to me is that the Feudal Lords held the rights of control of production and allocation of production as part of the web of social relations of that era, and that as the aristocracy evolved it held tightly to those powers. Do you think she got that wrong? We know that politics and economics are separate today, so how would you state the history of that separation?

    • earlofhuntingdon says:

      I think you have.  As Thomas Doehne comments above, my understanding is that it was a web of relationships, for a long time reciprocal relationships.  In modern analogy, a web of cross licenses, each necessary for the whole to work.

      A major trend, I think, is the truncation of that reciprocity from a complex web of social, legal and economic relations to an exclusively economic one – the payment of wages.  The enclosure process in England typifies it.  That was a major factor in aggregating far more resources into far fewer hands.

      • Bob Conyers says:

        It’s worth pointing out that the old web of mutual rights and obligations would break down fairly often in the past. However, the breakdowns tended to happen in times of great stress – war, famine, plague.

        What’s really disturbing about the current economic realignment is that it’s happening at a time when threats are actually low. Isis is not the old Soviet bloc, immigration is a net bonus. Climate change is a looming threat, but it would have been extremely manageable twenty years ago, and we could still put on the brakes and mitigate in most places if we are willing to bite the bullet. We are blowing up our institutions not in reaction to any looming danger, but because we’ve been conned into thinking that September 11 was the same as Pearl Harbor.

  4. Godfree Roberts says:

    Perhaps the most readable and profound address to this subject is Karl Polanyi’s ‘The Great Transformation: the political and economic origins of our times’.
    And the most practical address to it is China’s which, after 40 years of capitalism has, in absolute numbers, fewer hungry, homeless and incarcerated people than the USA–and 97% home ownership by its poorest classes.

    • earlofhuntingdon says:

      The group here is well acquainted with Polanyi.

      The paean to capitalism with a Chinese face is off the mark.  Your assertions about hunger and homelessness are dubious. The latter claim does not take into account the quality of the statistics or the “home ownership by its poorest classes”, or the sometimes massive overcrowding that helps reduce the number of technically homeless in China.  The emphasis on “in absolute numbers” in a Chinese context does not lend itself to an apples to apples comparison.

      No one, it is true, incarcerates people at the rate the US does.  It is an outrageous, racially motivated practice.  US death penalty processes are equally outrageous. On the other hand, the US does not make those condemned to death buy the bullet that will shortly find its way into the back of their neck.  But you probably couldn’t find that out via the well-controlled Chinese version of the Internet.

  5. Watson says:

    Thank you for continuing this series. I have a response to your discussion of the allocation of creative production: ‘Suppose a person who works for a tech company dreams up a new idea.’
    A ‘new’ tech idea is almost always a relatively tiny accretion which embeds the cumulative scientific inquiry of the ages: Archimedes, Pythagoras, Descartes, Galileo, Newton, Curie, Faraday, etc., plus countless, nameless others. Fairness doesn’t require that Bloomberg, Gates, Jobs, etc., be granted untold wealth for their ‘discoveries’; and if their idea is beneficial for general application, it’s anti-social to give them a monopoly on its use.

  6. Thomas Doehne says:

    Actually, this point: “Feudal Lords ceded some of their duties and powers, but not control of the land or the work done by the people on the land or the right to control allocation of production.” is just plain false.  The manorial lords had the right of government over the people in their fief, but on average only about 1/3 of the land was under the lords’ control (varying from fief to fief and region to region).   The free peasants held their land but could leave it, and owed some payment for it.  However, they held it permanently and could pass it on to heirs.  The serfs held the rest of the land on the manor, but could not legally leave the land.  It also passed to their descendants.   The lord of the manor had some rights to payment and some term of labor, but did not have “the right to control allocation of production”.  The serfs and free peasants were free (but conformed to custom) to do what they wanted with their land — except to sell or transfer it to someone else.  After all, it ultimately ‘belonged’ to the lord (just as the all the land in a nation-state ‘belongs’ to that nation-state).

    Feudal holdings were not property holdings in the sense we understand them.  The metaphor of cross-licenses doesn’t really capture the personal nature of the realtionship, either.   Add  on top of that the belief in a divinely orchestrated order that was God’s plan, and you have something really remote from modern understanding of property.

    • Mitch Neher says:

      The discovery of North and South America unleashed one of the greatest land-grabbing, money-grubbing, power-mongering invasions of conquest the world has ever seen. The Colonial powers convinced themselves that, if they didn’t do it, then their peer-rivals would. And the balance of power in Europe would tilt against them. IOW, the doctrine of the balance of power imposed itself upon, and expressed itself through, the new doctrine of the balance of trade.

      That, in turn, accelerated the inclosures and the clearances shortly before the industrial revolution as the commoners were driven off the land for the sake of populating the colonies, at first, and manning the factories, second. OTOH, maybe there’s a better explanation for not imposing the manorial system on The American colonies. In any case, the absence of the manorial system in America almost certainly fed back into the changing web of social relations in England and Scotland.

  7. earlofhuntingdon says:

    Ed’s theme is essentially correct. Landholders consolidated their control over resources they did not fully control by eliminating the local rights and privileges that made life endurable.

    A non-cash, subsistence economy based on mutual dependence, involving a myriad of rights and customs, was transformed into a more anonymous, atomized, cash-based existence, bent on producing a surplus over local requirements so as to maximize profit. What economists call “efficiency”, with unstated assumptions about for whom and to what ends the system was efficient.

    Access to common lands for grazing, gleaning of fields for extra food, use of woodlands to gather deadfall for fuel and repairs, modest control over one’s work, rights to plots for growing mutually determined crops. These were collapsed over time as one after another right was assumed by the manor, church or abbey, through skewed processes and for little, if any compensation.

    Mutual assistance and modest control over one’s daily life and work was replaced by wage labor. The peasant turned laborer’s right was to work for a pittance, with no control of the work or its pace. This was maintained, in part, by the early industrial world’s three food drugs of choice: tobacco, sugar and caffeine.

    • earlofhuntingdon says:

      The problem of capitalists continuing to take rights long deemed personal is not solely an historical problem.  Personal computers and smart phones, for example, have made it easy for employers to demand employees be available 24/7.  Doesn’t work in the Netherlands, mind, but that’s a rare exception.

      This belated article on the impact of pregnancy in artificially capping women’s careers demonstrates that employers demand the most intimate control over their employees’ bodies, on pain of forfeiture of their careers.  And what effects do such policies have on restricting the personality types allowed to pass through the social filters on the way to the top? Who survives those filters to run the organization?

      The enclosure process continues.  It has become more intimate, not less aggressive.  That it is also racist and misogynistic is par for the course.

      • Mitch Neher says:

        I think that the theory of social dominance hierarchies in non-human animals is likely to be wrong. However, having developed large-scale social organizations, human animals may have acquired the ability to compensate for the otherwise maladaptive recessive traits associated with social dominance in just such a way that the Alpha males amongst humans can enjoy just as much differential reproductive success as the more adaptive and cooperative types of human beings. If so, then that would almost certainly be a very bad thing for humankind.

  8. cfost says:

    Thank for this discussion. Right or wrong, agree or disagree, this is the type of discussion America sorely needs. But this particular topic runs quite wide and deep.

    In North America, Russia, and China, there were recent political responses to times of great tyranny. The results were the American democratic republic, the Soviet authoritarian system, and the Chinese authoritarian system. Since Plato, there has been a dream of a virtuous ruler, a philosopher king. What we usually end up with is a Stalin or a Mao. The beauty of the American experiment, to me, is that it accounts for the failings and the weaknesses of the human character. Instead of relying on one powerful person, the American system relies on a powerful check and balance. What the Founding Fathers did not anticipate was a day when all three branches of government would be corrupt. Even so, the American system is a wiser response to some fundamental questions: What is a man? Ought this man be governed by consent or by force? Does this man have value, or rights? How can this man secure consent, value, rights? Ought one man have precedence over another? Given a choice, would you rather live in Russia, China, or the USA?

    • Watson says:

      Not disputing your comments about political systems, but I think that people’s preference on where to live is usually about standard of living, which is largely a product of economic relations. The metropolis extracts from the periphery. Rome had the best standard of living in the Roman Empire. People who have left Cuba for the US could have chosen instead several capitalist, Catholic, Spanish-speaking countries in Latin America.

      • earlofhuntingdon says:

        The metropolis does indeed extract “from the periphery”.   It’s what the metropolis on.  Beyond food, water and slaves, it includes all manner of materials, extracted at enormous cost to people and the environment.

        Roman mines – mercury, silver, copper and other metals – remain among the most contaminated environmental sites on the planet, as do its successors.  (See, Gray Brechin, Imperial San Franciso, for a recent American example.)

  9. cfost says:

    And so, “unions.” By the 1880s, electricians, for example, were working in conditions so dangerous that 50% of them were dying on the job. So they got smart, and started to take out life insurance policies. This almost bankrupted a few insurance companies, so the insurance companies began to lobby for “building codes” as a way of controlling their risk. Meanwhile, electricians began to insist on a larger share of the profits of the companies for which they worked. And they realized that the best way to get a larger share of the pie was to bargain collectively for higher wages. So legally, a union is called a “collective bargaining unit.”  But behind all this was the realization that they, as men engaged in an enterprise with other men, had a right to a reasonable portion of the profits of the enterprise. Along the way, business “owners” saw fit to murder some of the upstart workers for their temerity. As a collective bargaining unit, unions do exactly what corporations do. Except that corporations are trying to change the “laws” to make it so a corporation is the only unit with the ability to organize in any way it sees fit for the purpose of bargaining wages. That would set up a legal situation where the rights of a corporation come before the rights of men. And that situation only lasts for so long  as the men allow it.

  10. Thomasa says:

    I believe the role of the church in the economic lives of the Middle Ages is too often given short shrift.

    To wit, the extent to which pope Innocent III went to stamp out the Cathars in the early 13th century. Catholic theology was an economic control mechanism by which the bishops and the pope extracted the surpluses of the various fiefdoms to support the church in a lavish lifestyle. Stepping into Ste. Peter’s in Rome is a jaw dropping experience. The various nobles had to be cut in on the deal to stave off revolt against the bishops but by the 12th century the bishops had overplayed their hand.

    The Cathars adhered to an alternate theology that did not support the hierarchical bishopric, with considerable support of the nobility of Languedoc. The loss of revenue from these lands was the incentive for pope Innocent III to begin the Albigian Crusade in about 1220. The Cathars had taught many of the people to read and the combination was a great threat to the hegemony of the church.

    Stained glass was the new technology and was first installed in churches in Carcassone to demonstrate that reading wasn’t necessary to get the biblical stories told. Education of the masses was a dangerous thing to the church.

    It’s not too hard to draw modern analogies with or without Marx. Suffice it to say that today the play’s the same but with different actors.

    • earlofhuntingdon says:

      The Cathars were also notably egalitarian, putting them culturally more than half a millennium ahead of their peers, and beyond the imagination of many still, regardless of the office they hold.

    • Ed Walker says:

      Thanks for this history.

      I agree that the entire discussion of religion as power is missing from the description Wood gives, and is generally overlooked. It’s easy to see parallels with some churches in the US today, the ones that raise obscene amounts of money from the poor to pay for jets, or in a case I worked on, to pay off the bonds of the church members in the face of bankruptcy.

      There’s a lot missing from this description. But the point isn’t to give a comprehensive history, but to show that outcomes other than neoliberal capitalism were possible. For example, the Roman Church might have stayed true to its roots. It would be interesting to imagine that outcome. Perhaps some of the human drives that led to the corruption of the Papacy and the entire Church hierarchy are the crucial factors in the evolution of capitalism.

  11. Mitch Neher says:

    FWIW, the “property” that most wage slaves “own” nowadays is carried as “debt” that is actually “held by” and “owed to” . . . we could call them “lenders,” except that . . . they, too, are also “borrowers” of a different sort. Once again, I have no clear idea what to do next with the foregoing observation. Yes! I have heard of The Commercial Revolution. I’ve also heard of The Hanseatic League and duty-free cities. The history is exceedingly complex.

    Also, the most emphatic statement of the divorce of politics from economics that I’ve come across thus far is the division of goods into public versus private that allowed Adam Smith to side-step the potentially adverse consequences of having been called A Radical by his original detractors. It seems to me that Smith’s Rules for Government Intervention in the Economy effectively proposed, or accepted, a marriage between laissez faire economics and the system that Smith euphemized as merchantilism.

    (Please pardon my spelling, or change it to militarism, instead.)

    Honestly, though, given that The Conquest of The Americas had been well under way before 1776, I think Smith pretty much had to marry the merchantile-militarists in a shotgun wedding. (I do not approve of either.)

  12. lefty665 says:

    Hi Ed, Glad to hear your eye surgery went well and has made it easier for you to continue this series.

    As you know, I tend to a simple view. I have been a strong advocate for unions and the New Deal Dems in their belief that workers deserve to share in the fruits of their labor.  As an employer it was my belief that work done for me at my behest belonged to me. However, my enlightened self interest was that sharing the fruit with the people who produced it was in the long term best interests of us all. In a small information technology business we all prospered for decades. It was my pleasure to reward people for being bright, energetic and productive. That was a reinforcement to do it again, a win win. No theory X managers need apply.

    On a larger scale the concept of “Mixed Capitalism” in which our elected public sector regulates and moderates the destructive elements of capitalism and channels its energy for the good of the country and for us all has seemed an enlightened philosophy. It also has the potential through public regulation for preventing the Capitalist, in Marx’s formulation, from selling the rope to hang him with.  The Repubs have always worked to lighten the controls on capitalism while the Dems and unions for around a half century (roughly early 30’s to late 70’s) worked to moderate capitalism’s excesses. Alas that is no more. With Dem abandonment of the belief that workers deserved to share in the fruits of their labor and the Dem embrace of neo liberalism,  meritocracy, and the devil take the hindmost (I’ve got mine Jack, if you don’t have yours, you’re without merit) in the late 70’s we have had a 40 year slide into Hell. Wages have been stagnant for 3/4 of the country and year by year prospects for most are worsening while the rich get richer.

    I value your exploration of the philosophical and intellectual underpinnings of the systems that drive our nation and the world. You give me the opportunity to integrate them with the reality I see out here.  It is my hope that you will help others who frequent this site to understand the folly of their diehard embrace of the neo liberal elites who run the Dems. The enemy (neo lib elites) of their enemy (Trump) is not their friend. That is the prerequisite for constructive Change, and change is coming, either with our assistance or over our bodies. ’16 was a warning.

    Happy Independence Day.  We have a family tradition of gathering and reading from first documents. It is an annual reminder of the incredible efforts that bequeathed us the opportunity to reflect on our freedoms. It also provides hope that we can pass them, and the public institutions that ensure them, intact to an upcoming generation.

    I look forward to your next installments. Thank you.



  13. Thomasa says:

    I’m all for drawing lessons from history. And the history of France is exceedingly complex which is why it’s especially fascinating. 

    That said it’s a struggle for me to extract lessons for today but always a tempting challenge. I may have to add in a little Rome to make it work. Please forgive me if you already know such things  but the PhDs I used to manage had no training in history. They were easily entertained.

    It was the grotesque over reach of the church’s extraction of wealth  that gave rise to the Cathar movement. They were destroyed in what rivals any pogrom against the jews but were not without their long term influence.

    Note that it was in the 12th century that celibacy among the clergy began to be seriously enforced by Rome in an attempt to curtail the dynastic wealth of the bishops. Scholars debate whether a married clergy was condoned or merely tolerated previously. Whatever. Cathar Gnosticism with its oaths of poverty was perceived as a serious threat and the church attempted to at least create the appearance addressing one or its major complaints against the church in Rome. Clearly that didn’t work and by the time of Pope Innocent III it was time for violence.

    The root of the issues was the vast inequality of wealth that resulted from the church participating in and encouraging a feudal system that strayed far afield from the mutual obligations of the early feudal order that exchanged peasant labor for military protection as Roman civilization crumbled. [See Gibbon for the details].

    As the feudal system developed it extracted more and more surplus until peasant revolt was a constant threat.

    There came a time in the 14th century with the advent of the “little ice age” that the church and nobility usurped more than 100% of the surplus, aided by the Venetians’ cornering the silver market, which restrained trade so that what food stores did exist couldn’t be readily distributed. [see Barbra Tuchman; A Distant Mirror].

    The modern analogs I see are from Gibbon’s examination of 2nd and 3rd century Roman codices in which the senatorial class was exempted from taxation and as tax  revenues fell, municipal services were privatized; including tax collection, the office of which was made hereditary. The now hamstrung government couldn’t cope with crop failures in North Africa and the FEMA of the day failed to do a heck of a job.

    By the late 3rd century Constantine handed the whole mess over to the
    Christians, took the wealthy and wealth of Rome and decamped for Constantinople. Thus was born feudalism.

    The other modern analog is that we in the US are having more than 100% of our surplus extracted from the economy and we don’t see it because it is masked by currency manipulation in a bewildering web of banking legerdemain: CDOs, credit default swaps, recycling of petrodollars and on and on.

    I fear it will only take a change in the weather to bring about a calamitous 21st century, to paraphrase Barbra Tuchman.

    • earlofhuntingdon says:

      To paraphrase modern historians, Gibbon is a great read and a parent of modern history (c. 1770), but his facts are outdated and his arguments about causation – especially his Christianity led to the fall of the empire – are invalid.  Tuchman is more reliable.

  14. Brad Aukerman says:

    Thanks Ed for writing up this book. Finished it earlier this year and moved on to one of her other books, The Origins of Capitalism, which goes into pre-capitalist feudal relationships more deeply and is also excellent.

    The Marxist philosopher Kojin Karatani attempts to address the shortcomings of Marxist analysis to describe non-capitalist societies in his book The Structure of World History.

    Karatani posits that the mode of production (and who owns it) is less important to historical events than the modes of exchange. In his theory, there have been 3 modes of exchange: clan reciprocity/gift exchange, state protection/(re)distribution, and capitalist commodity/markets (and a potential, utopian fourth). All three exist at the same time but their hegemony varies over time. Karatani would say, I believe, that although private property and commodity exchange existed in the Middle Ages, state distribution was the dominant form of exchange with feudal lords and church officials essentially acting as bureaucrats fighting over jurisdiction.

    Our current era is marked by the absolute capture of the state form of exchange to ensure protection and distribution through markets, making commodity exchange hegemonic.

    • Ed Walker says:

      I was thinking about reading that book, and may yet. Did you read the comments of Thomasa, Thomas Doehne and EarlOfHuntington above? Does Wood go into any of those matters?

    • earlofhuntingdon says:

      I agree with the idea that the economy’s largest players have largely captured state institutions meant to regulate and support them, reducing the oversight role to a nominal one, while expanding its role of financial, legal and physical/military support.

      I would say that the “market” is less an anonymous fully informed, self-operating computer that aggregates total exchanges.  I see it more as multiple fora, where exchange formats and price are determined largely by its dominant players.

      My vision of the “state” in the pre-modern, medieval era is that it was comprised of the monarchy – usually in coordination and in dynamic tension with the Roman church – and various levels of elites.  These controlled the principal resource, land, and made up the individuals in whom legal, political, social and economic world’s came together.

      The church had analogues for secular nobles from top to bottom, from monarch – pope – to higher and lesser nobles and non-noble landed gentry – archbishops, bishops, abbots, priests. It’s probably more accurate to say that secular roles were modeled on those in the Roman church, given that the church inherited and continued the organization and role of many aspects of the Roman state rule.

      Other groups, artisans, merchants, seafarers, fishermen, for example, always existed.  But only later did merchants, specializing in physical movement, financing and sale of goods, assume considerable power.  That’s a long story in itself, from early post-Roman, to city-state power (Venice), to nation-state levels of organization and power.

      • Watson says:

        ‘the economy’s largest players have largely captured state institutions meant to regulate and support them, reducing the oversight role to a nominal one’
        Yes, Keynesian economic theory, the best version of capitalism, seeks to deliver ‘capitalism with a human face’ via fiscal policy, primarily by government spending. The problem is the assumption that there is or will be a government actor inclined to and capable of providing constructive regulation of private economic actors.
        Unfortunately, ‘free market competition’ consists of big fish constantly eating little fish, resulting in a relative handful of whales and sharks whose economic power allows them to ‘capture’ the political and regulatory process.

  15. Ken says:

    Just as an interesting aside, I’m an engineer and one of my bosses left his original company to join another based on how we are paid. He thought only trading hours for dollars was stupid and refused to work for anyone who wouldn’t pay him a percent of each machine sold that he had designed. Of course, he was an excellent engineer, so he could demand this as part of his contract.

    I can see his point of view, since, as I noted earlier, I’m an engineer and still struggling to save any money due to low pay. However, I’ve made many people multi-millionaires. I can still find types of machines I designed over twenty years ago for sale on the internet.

  16. Thomasa says:

    The enclosure acts and the birth of the industrial revolution offer some explanation for how we got to our present economic and political state.

    Under feudal organization each family owed a rent to the lord but was entitled to use common lands in a strip farming scheme that included communal production of some staple crops.

    The rise of industrial production, first in woolens, created a demand for grazing land that was incompatible with the strip farming scheme.  Ignoring the role of plagues and a 30% population decline for the moment, it was necessary to get peasants off the land and into factories where they were paid wages, arguably below the cost for labor to reproduce itself.

    The process took place over a couple of centuries but here we are. So we see a transition from a time where the peasantry kept a percentage of their product to a time when they kept essentially none. I think it takes someone of the stature of Thomas Picketty to determine where we are now in that regard but given the fits of apoplexy among Republicans at the publication of his book, “Capitalism in the 21st Century ,”  the elite are usurping more than their due.

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