Turkey's fate is that of Sancho Panza and his dinner: as soon as the minister of finance wishes to do anything, some diplomat gets up, interrupts him and throws a veto in his teeth' (Moravitz, op. cit., p.

70).

_CHAPTER x.x.xI_

PROTECTIVE TARIFFS AND ACc.u.mULATION

Imperialism is the political expression of the acc.u.mulation of capital in its compet.i.tive struggle for what remains still open of the non-capitalist environment. Still the largest part of the world in terms of geography, this remaining field for the expansion of capital is yet insignificant as against the high level of development already attained by the productive forces of capital; witness the immense ma.s.ses of capital acc.u.mulated in the old countries which seek an outlet for their surplus product and strive to capitalise their surplus value, and the rapid change-over to capitalism of the pre-capitalist civilisations. On the international stage, then, capital must take appropriate measures.

With the high development of the capitalist countries and their increasingly severe compet.i.tion in acquiring non-capitalist areas, imperialism grows in lawlessness and violence, both in aggression against the non-capitalist world and in ever more serious conflicts among the competing capitalist countries. But the more violently, ruthlessly and thoroughly imperialism brings about the decline of non-capitalist civilisations, the more rapidly it cuts the very ground from under the feet of capitalist acc.u.mulation. Though imperialism is the historical method for prolonging the career of capitalism, it is also a sure means of bringing it to a swift conclusion. This is not to say that capitalist development must be actually driven to this extreme: the mere tendency towards imperialism of itself takes forms which make the final phase of capitalism a period of catastrophe.

Cla.s.sical economics, in its period of storm and stress, had had high hopes of a peaceful development of the acc.u.mulation of capital and of a trade and industry which can only prosper in times of peace, evolving the orthodox Manchester ideology of the harmony of interests among the world's commercial nations on the one hand, and between capital and labour on the other. These hopes were apparently justified in Europe by the short period of Free Trade in the sixties and seventies, which was based upon the mistaken doctrine of the English Free Traders that the only theoretical and practical condition for the acc.u.mulation of capital is commodity exchange, that the two are identical. As we have seen, Ricardo and his whole school identified acc.u.mulation and its reproductive conditions with simple commodity production and the conditions of simple commodity circulation. This was soon to become even more obvious in the practices of the common Free Trader. The special interests of the exporting Lancashire cotton manufacturers in Manchester determined the entire line of argument of the Cobden League. Their princ.i.p.al object was to get markets, and it became an article of faith: 'Buy from foreign countries and thus in turn sell our industrial product, our cotton goods, on the new markets.' Cobden and Bright demanded Free Trade and cheaper foodstuffs in particular in the interest of consumption; but the consumer was not the worker who eats the bread, but the capitalist who consumes labour power.

This teaching never expressed the interests of capitalist acc.u.mulation as a whole. In England herself it was given the lie already in the forties, when the harmony of interests of the commercial nations in the East were proclaimed to the sound of gunfire in the Opium Wars which ultimately, by the annexation of Hongkong, brought about the very opposite of such harmony, a system of 'spheres of interest'.[416] On the European Continent, Free Trade in the sixties did not represent the interests of industrial capital, because the foremost Free Trade countries of the Continent were still predominantly agrarian with a comparatively feeble development of industry. Rather, the policy of Free Trade was implemented as a means for the political reconstruction of the Central European states. In Germany, under Bismarck and Manteuffel, it was a peculiarly Prussian lever for ousting Austria from the _Bund_ and the _Zollverein_ and to set up the new German Empire under Prussian leadership. Economically speaking, the mainstays of Free Trade were in this case the interests both of commercial capital, especially in the Hansa towns to whom international trade was vital, and of agrarian consumers; among industry proper, it was otherwise. The iron industry was won over only with difficulty and in exchange for the abolition of the Rhine tolls. But the cotton industry in Southern Germany remained irreconcilable and clung to protective tariffs. In France, 'most favoured nations' clause' agreements, the basis of the Free Trade system all over Europe, were concluded by Napoleon III without the consent, and even against the will, of parliament, industrialists and agrarians, who const.i.tuted an absolute majority, being in favour of protective tariffs.

The government of the Second Empire only took the course of commercial treaties as an emergency measure--Britain accepted it as such--in order to get round political opposition in France and to establish Free Trade behind the back of the legislature by international action. The first princ.i.p.al treaty between England and France simply rode rough-shod over public opinion in France.[417] Two imperial decrees abolished the old system of French protective tariffs which had been in force from 1853 to 1862. With scant observance of the formalities they were 'ratified'

in 1863. In Italy, Free Trade was a prop of Cavour's policy, depending as it did on French support. Under pressure of public opinion, an inquiry was made in 1870 which revealed that those most intimately concerned were hostile to the policy of Free Trade. In Russia, finally, the tendency towards Free Trade in the sixties was but the first step towards creating a broad basis for commodity economy and industry on a large scale, coming at the same time as the abolition of serfdom and the construction of a railway network.[418]

Thus the very inception of an international system of Free Trade shows it to be just a pa.s.sing phase in the history of capitalist acc.u.mulation, and it shows up the fallacy of attributing the general reversion to protective tariffs after the seventies simply to a defensive reaction against English Free Trade.[419]

Such an explanation is vitiated by the fact that both in Germany and France the leaders in the reversion to protective tariffs were the agrarian interests, that the measures were directed not against British but against American compet.i.tion, and that not England but Germany const.i.tuted the chief danger to the rising home industry in Russia, and France to that in Italy. Nor was Britain's monopoly the cause for the world-wide depression which prevailed since the seventies and induced the desire for protective tariffs. We must look deeper for the reasons responsible for the change of front on the question of protective tariffs. The doctrine of Free Trade with its delusion about the harmony of interests on the world market corresponded with an outlook which conceived of everything in terms of commodity exchange. It was abandoned just as soon as big industrial capital had become sufficiently established in the princ.i.p.al countries of the European Continent to look to the conditions for its acc.u.mulation. As against the mutual interests of capitalist countries, these latter bring to the fore the antagonism engendered by the compet.i.tive struggle for the non-capitalist environment.

When the Free Trade era opened, Eastern Asia was only just being made accessible by the Chinese wars, and European capital had but begun to make headway in Egypt. In the eighties the policy of expansion became ever stronger, together with a policy of protective tariffs. There was an uninterrupted succession of events during the eighties: the British occupation of Egypt, Germany's colonial conquests in Africa, the French occupation of Tunisia together with the Tonkin expedition, Italy's advances in a.s.sab and Ma.s.sawa, the Abyssinian war and the creation of a separate Eritrea, and the English conquests in South Africa. The clash between Italy and France over the Tunisian sphere of interest was the characteristic prelude to the Franco-Italian tariff war seven years later, by which drastic epilogue an end was made to the Free Trade harmony of interests on the European Continent. To monopolise the non-capitalist areas at home and abroad became the war-cry of capital, while the free-trade policy of the 'open door' specifically represented the peculiar helplessness of non-capitalist countries in the face of international capital and the natural equilibrium which was aimed at by its compet.i.tion in the preliminary stage of the partial or total occupation of these areas as colonies or spheres of interest. As the oldest capitalist Empire, England alone could so far remain loyal to Free Trade, primarily because she had long had immense possessions of non-capitalist areas as a basis for operations which afforded her almost unlimited opportunities for capitalist acc.u.mulation. Until recently, she had thus in fact been beyond the compet.i.tion of other capitalist countries. These, in turn, universally strove to become self-sufficient behind a barrier of protective tariffs; yet they buy one another's commodities and come to depend ever more one upon another for replenishing their material conditions of reproduction. Indeed, protective tariffs have by now completely lost their use for technical development of the productive forces, all too often being the instrument for the artificial conservation of obsolete productive methods. The inherent contradictions of an international policy of protective tariffs, exactly like the dual character of the international loan system, are just a reflection of the historical antagonism which has developed between the dual interests of acc.u.mulation: expansion, the realisation and capitalisation of surplus value on the one hand, and, on the other, an outlook which conceives of everything purely in terms of commodity exchange.

This fact is evidenced particularly in that the modern system of high protective tariffs, required by colonial expansion and the increasing inner tension of the capitalist medium, was also inst.i.tuted with a view to increasing armaments. The reversion to protective tariffs was carried through in Germany as well as in France, Italy, and Russia, together with, and in the interests of, an expansion of the armed services, as the basis for the European compet.i.tion in armaments which was developing at that time, first on land, and then also at sea.

European Free Trade, with its attendant continental system of infantry, had been superseded by protective tariffs as the foundation and supplement of an imperialist system with a strong bias towards naval power.

Thus capitalist acc.u.mulation as a whole, as an actual historical process, has two different aspects. One concerns the commodity market and the place where surplus value is produced--the factory, the mine, the agricultural estate. Regarded in this light, acc.u.mulation is a purely economic process, with its most important phase a transaction between the capitalist and wage labourer. In both its phases, however, it is confined to the exchange of equivalents and remains within the limits of commodity exchange. Here, in form at any rate, peace, property and equality prevail, and the keen dialectics of scientific a.n.a.lysis were required to reveal how the right of ownership changes in the course of acc.u.mulation into appropriation of other people's property, how commodity exchange turns into exploitation and equality becomes cla.s.s-rule.

The other aspect of the acc.u.mulation of capital concerns the relations between capitalism and the non-capitalist modes of production which start making their appearance on the international stage. Its predominant methods are colonial policy, an international loan system--a policy of spheres of interest--and war. Force, fraud, oppression, looting are openly displayed without any attempt at concealment, and it requires an effort to discover within this tangle of political violence and contests of power the stern laws of the economic process.

Bourgeois liberal theory takes into account only the former aspect: the realm of 'peaceful compet.i.tion', the marvels of technology and pure commodity exchange; it separates it strictly from the other aspect: the realm of capital's bl.u.s.tering violence which is regarded as more or less incidental to foreign policy and quite independent of the economic sphere of capital.

In reality, political power is nothing but a vehicle for the economic process. The conditions for the reproduction of capital provide the organic link between these two aspects of the acc.u.mulation of capital.

The historical career of capitalism can only be appreciated by taking them together. 'Sweating blood and filth with every pore from head to toe' characterises not only the birth of capital but also its progress in the world at every step, and thus capitalism prepares its own downfall under ever more violent contortions and convulsions.

FOOTNOTES:

[416] And not only in England. 'Even in 1859, a pamphlet, ascribed to Diergardt of Viersen, a factory owner, was disseminated all over Germany, urging that country to make sure of the East-Asiatic markets in good time. It advocated the display of military force as the only means for getting commercial advantages from the j.a.panese and the Eastern Asiatic nations in general. A German fleet, built with the people's small savings, had been a youthful dream, long since brought under the hammer by Hannibal Fischer. Though Prussia had a few ships, her naval power was not impressive. But in order to enter into commercial negotiations with Eastern Asia, it was decided to equip a ship. Graf zu Eulenburg, one of the ablest and most prudent Prussian statesmen, was appointed chief of this mission which also had scientific objects. Under most difficult conditions he carried out his commission with great skill, and though the plan for simultaneous negotiations with the Hawaiian islands had to be given up, the mission was otherwise successful. Though the Berlin press of that time knew better, declaring whenever a new difficulty was reported, that it was only to be expected, and denouncing all expenditure on naval demonstrations as a waste of the taxpayers' money, the ministry of the new era remained steadfast, and the harvest of success was reaped by the ministry that followed' (W.

Lotz, _Die Ideen der deutschen Handelspolitik_, p. 80).

[417] Following on the preliminary discussion between Michel Chevalier and Richard Cobden on behalf of the French and English governments, 'official negotiations were shortly entered upon and were conducted with the greatest secrecy. On January 1, 1860, Napoleon III announced his intentions in a memorandum addressed to M. Fould, the Minister of State.

This declaration came like a bolt from the blue. After the events of the past year, the general belief was that no attempt would be made to modify the tariff system before 1861. Feelings ran high, but all the same the treaty was signed on January 23' (Auguste Devers, _La politique commerciale de la France depuis 1860. Schriften des Vereins fur Sozialpolitik_, vol. 51, p. 136).

[418] Between 1857 and 1868, the revision along liberal lines of the Russian tariffs and the ultimate writing-off of the insane system of _kantrin_ with regard to protective tariffs were a manifestation and corollary of the progressive reforms which the disastrous Crimean wars had made inevitable. But the reduction of customs duties reflected the concern of the landowning gentry who, both as consumers of foreign goods and as producers of grain for export, were interested in unrestricted commerce between Russia and Western Europe. The champion of agrarian interests, the 'Free Economic a.s.sociation' stated: 'During the last sixty years, between 1822 and 1882, agriculture, Russia's largest producer, was brought to a precarious position owing to four great setbacks. These could in every case be directly attributed to excessive tariffs. On the other hand, the thirty-two years between 1845 and 1877 when tariffs were moderate went by without any such emergency, in spite of three foreign wars and one civil war [meaning the Polish insurrection of 1863--_R. L._], every one of which proved a greater or less strain on the financial resources of the state' (_Memorandum of the Imperial Free Economic a.s.sociation on Revising Russian Tariffs_ (St. Petersburg, 1890), p. 148). As late as the nineties, then, the scientific spokesman of the Free Trade Movement, the said 'Free Economic a.s.sociation', had to agitate against protective tariffs as a 'contrivance to transplant'

capitalist industry to Russia. In a reactionary 'populist' spirit, it denounced capitalism as a breeding ground for the modern proletariat, 'those ma.s.ses of shiftless people without home or property who have nothing to lose and have long been in ill repute' (p. 191). This is proof enough that until most recent times the Russian champions of Free Trade, or at least of moderate tariffs, did not to any appreciable extent represent the interests of industrial capital. Cf. also K.

Lodyshenski: _The History of the Russian Tariffs_ (St. Petersburg, 1886), pp. 239-58.

[419] This is also the opinion of F. Engels. In one of his letters to Nikolayon, on June 18, 1892, he writes: 'English authors, blinded by their patriotic interests, completely fail to grasp why the whole world so stubbornly rejects England's example of free trade and adopts in its place the principle of protective tariffs. Of course, they simply dare not admit even to themselves that the system of protective tariffs, by now almost universal, is merely a defensive measure against English free trade which was instrumental in perfecting England's industrial monopoly. Such a defence policy may be more or less reasonable--in some cases it is downright stupid, as for instance in Germany who under the system of free trade had become a great industrial power and now imposes protective tariffs on agricultural products and raw materials, thus increasing the cost of her industrial production. In my view this universal reversion to protective tariffs is not a mere accident but the reaction against England's intolerable industrial monopoly. The form which this reaction takes, as I said before, may be wrong, inadequate and even worse, but its historical necessity seems to me quite clear and obvious' (_Letters_ of Karl Marx and Frederick Engels to Nikolayon (St.

Petersburg, 1908), p. 71).

_CHAPTER x.x.xII_

MILITARISM AS A PROVINCE OF ACc.u.mULATION

Militarism fulfils a quite definite function in the history of capital, accompanying as it does every historical phase of acc.u.mulation. It plays a decisive part in the first stages of European capitalism, in the period of the so-called 'primitive acc.u.mulation', as a means of conquering the New World and the spice-producing countries of India.

Later, it is employed to subject the modern colonies, to destroy the social organisations of primitive societies so that their means of production may be appropriated, forcibly to introduce commodity trade in countries where the social structure had been unfavourable to it, and to turn the natives into a proletariat by compelling them to work for wages in the colonies. It is responsible for the creation and expansion of spheres of interest for European capital in non-European regions, for extorting railway concessions in backward countries, and for enforcing the claims of European capital as international lender. Finally, militarism is a weapon in the compet.i.tive struggle between capitalist countries for areas of non-capitalist civilisation.

In addition, militarism has yet another important function. From the purely economic point of view, it is a pre-eminent means for the realisation of surplus value; it is in itself a province of acc.u.mulation. In examining the question who should count as a buyer for the ma.s.s of products containing the capitalised surplus value, we have again and again refused to consider the state and its organs as consumers. Since their income is derivative, they were all taken to belong to the special category of those who live on the surplus value (or partly on the wage of labour), together with the liberal professions and the various parasites of present-day society ('king, professor, prost.i.tute, mercenary'). But this interpretation will only do on two a.s.sumptions: first, if we take it, in accordance with Marx's diagram, that the state has no other sources of taxation than capitalist surplus value and wages,[420] and secondly, if we regard the state and its organs as consumers pure and simple. If the issue turns on the personal consumption of the state organs (as also of the 'mercenary') the point is that consumption is partly transferred from the working cla.s.s to the hangers-on of the capitalist cla.s.s, in so far as the workers foot the bill.

Let us a.s.sume for a moment that the indirect taxes extorted from the workers, which mean a curtailment of their consumption, are used entirely to pay the salaries of the state officials and to provision the regular army. There will then be no change in the reproduction of social capital as a whole. Both Departments II and I remain constant because society as a whole still demands the same kind of products and in the same quant.i.ties. Only _v_ as the commodity of 'labour power' has changed in value in relation to the products of Department II, i.e. in relation to the means of subsistence. This _v_, the same amount of money representing labour power, is now exchanged for a smaller amount of means of subsistence. What happens to the products of Department II which are then left over? Instead of the workers, the state officials and the regular army now receive them. The organs of the capitalist state take over the workers' consumption on the same scale exactly.

Although the conditions of reproduction have remained stable, there has been a redistribution of the total product. Part of the products of Department II, originally intended entirely for the consumption of the workers as equivalent for _v_, is now allocated to the hangers-on of the capitalist cla.s.s for consumption. From the point of view of social reproduction, it is as if the relative surplus value had in the first place been larger by a certain amount which is added on to the consumption of the capitalist cla.s.s and its hangers-on.

So far the crude exploitation, by the mechanism of indirect taxation, of the working cla.s.s for the support of the capitalist state's officials amounts merely to an increase of the surplus value, of that part of it, that is to say, which is consumed. The difference is that this further splitting off of surplus value from variable capital only comes later, after the exchange between capital and labour has been accomplished. But the consumption by the organs of the capitalist state has no bearing on the realisation of _capitalised_ surplus value, because the additional surplus value for this consumption--even though it comes about at the workers' expense--is created afterwards. On the other hand, if the workers did not pay for the greater part of the state officials' upkeep, the capitalists themselves would have to bear the entire cost of it. A corresponding portion of their surplus value would have to be a.s.signed directly to keeping the organs of their cla.s.s-rule, either at the expense of production which would have to be curtailed accordingly, or, which is more probable, it would come from the surplus value intended for their consumption. The capitalists would have to capitalise on a smaller scale because of having to contribute more towards the immediate preservation of their own cla.s.s. In so far as they shift onto the working cla.s.s (and also the representatives of simple commodity production, such as peasants and artisans) the princ.i.p.al charge of their hangers-on, the capitalists have a larger portion of surplus value available for capitalisation. But as yet _no opportunities for such capitalisation_ have come into being, no new market, that is to say, for the surplus value that has become available, in which it could produce and realise new commodities. But when the monies concentrated in the exchequer by taxation are used for the production of armaments, the picture is changed.

With indirect taxation and high protective tariffs, the bill of militarism is footed mainly by the working cla.s.s and the peasants. The two kinds of taxation must be considered separately. From an economic point of view, it amounts to the following, as far as the working cla.s.s is concerned: provided that wages are not raised to make up for the higher price of foodstuffs--which is at present the fate of the greatest part of the working cla.s.s, including even the minority that is organised in trade unions, owing to the pressure of cartels and employers'

organisations[421]--indirect taxation means that part of the purchasing power of the working cla.s.s is transferred to the state. Now as before the variable capital, as a fixed amount of money, will put in motion an appropriate quant.i.ty of living labour, that is to say it serves to employ the appropriate quant.i.ty of constant capital in production and to produce the corresponding amount of surplus value. As soon as capital has completed this cycle, it is divided between the working cla.s.s and the state: the workers surrender the state part of the money they received as wages. Capital has wholly appropriated the former variable capital in its material form, as labour power, but the working cla.s.s retains only part of the variable capital in the form of money, the state claiming the rest. And this invariably happens after capital has run its cycle between capitalist and worker; it takes place, as it were, behind the back of capital, at no point impinging direct on the vital stages of the circulation of capital and the production of surplus value, so that it is no immediate concern of the latter. But all the same it does affect the conditions for the reproduction of capital as a whole. The transfer of some of the purchasing power from the working cla.s.s to the state entails a proportionate decrease in the consumption of means of subsistence by the working cla.s.s. For capital as a whole, it means producing a smaller quant.i.ty of consumer goods for the working cla.s.s, provided that both variable capital (in the form of money and as labour power) and the ma.s.s of appropriated surplus value remain constant, so that the workers get a smaller share of the aggregate product. In the process of reproduction of the entire capital, then, means of subsistence will be produced in amounts smaller than the value of the variable capital, because of the shift in the ratio between the value of the variable capital and the quant.i.ty of means of subsistence in which it is realised, with the money wages of labour remaining constant, according to our premise, or at any rate not rising sufficiently to offset the increase in the price of foodstuffs. This increase represents the level of indirect taxation.

How will the material relations of reproduction be adjusted? When fewer means of subsistence are needed for the renewal of labour power, a corresponding amount of constant capital and living labour becomes available which can now be used for producing other commodities in response to a new effective demand arising within society. It arises from the side of the state which has appropriated, by way of tax legislation, the part wanting of the workers' purchasing power. This time, however, the state does not demand means of subsistence (after all that has already been said under the heading of 'third persons', we shall here ignore the demand for means of subsistence for state officials which is also satisfied out of taxes) but it requires a special kind of product, namely the militarist weapons of war on land and at sea.

Again we take Marx's second diagram of acc.u.mulation as the basis for investigating the ensuing changes in social reproduction:

I. _5,000c + 1,000v + 1,000s = 7,000_ means of production II. _1,430c + 285v + 285s = 2,000_ means of subsistence

Now let us suppose that, owing to indirect taxation and the consequent increase in the price of means of subsistence, the working cla.s.s as a whole reduces consumption by, say, a 100 value units of the real wages.

As before, the workers receive _1,000v + 285v = 1,285v_ in money, but for this money they only get means of subsistence to the value of 1185.

The 100 units which represent the tax increase in the price of foodstuffs go to the state which receives in addition military taxes from the peasants, etc., to the value of 150 units, bringing the total up to 250. This total const.i.tutes a new demand--the demand for armaments. At present, however, we are only interested in the 100 units taken from the workers' wages. This demand for armaments to the value of 100 must be satisfied by the creation of an appropriate branch of production which requires a constant capital of 715 and a variable capital of 1425, a.s.suming the average organic composition outlined in Marx's diagram.

_715c + 1425v + 1425s = 100_ weapons of war

This new branch of production further requires that 715 means of production be produced and about 13 means of subsistence, because, of course, the real wages of the workers are also less by about one-thirteenth.

You could counter by saying that the profit accruing to capital from this new expansion of demand is merely on paper, because the cut in the actual consumption of the working cla.s.s will inevitably result in a corresponding curtailment of the means of subsistence produced. It will take the following form for Department II:

_715c + 1425v + 1425s = 100_

In addition, Department I will also have to contract accordingly, so that, owing to the decreasing consumption of the working cla.s.s, the equations for both departments will be:

I. _4,949c + 98975v + 98975s = 6,9285_ II. _1,3585c + 27075v + 27075s = 1,900_

If, by the mediation of the state, the same 100 units now call forth armament production of an equal volume with a corresponding fillip to the production of producer goods, this is at first sight only an extraneous change in the material forms of social production: instead of a quant.i.ty of means of subsistence a quant.i.ty of armaments is now being produced. Capital has won with the left hand only what it has lost with the right. Or we might say that the large number of capitalists producing means of subsistence have lost the effective demand in favour of a small group of big armament manufacturers.

But this picture is only valid for individual capital. Here it makes no difference indeed whether production engages in one sphere of activity or another. As far as the individual capitalist is concerned, there are no departments of total production such as the diagram distinguishes.

There are only commodities and buyers, and it is completely immaterial to him whether he produces instruments of life or instruments of death, corned beef or armour plating.