Counting the Cost: Industrialism, Capitalism, Socialism

Guest Post by SHASHANK KELA

Years ago, after the fall of the Berlin wall and the collapse of communism, a faux philosopher announced the end of history. What he meant was the permanent victory of capitalism and its correlate, liberal democracy. Unfortunately history has an unkind habit of rolling right along, throwing a sucker punch at intervals – remember Gordon (No Boom and Bust) Brown? The triumph of laissez faire capitalism has been celebrated since the ’80s (when the term Reaganomics was coined for redistributive policies that blithely transferred wealth to the rich). Until the crash of 2008-09 set the cat amongst the pigeons; and sent the semi-converted scurrying back to Keynes – and Marx (especially in Germany where the sales of his books suddenly soared). However after a state bailout of unprecedented proportions, that had the satisfactory effect of restoring the position of the wealthy, especially the bankers and financial whiz kids who had caused the crash, the dust settled down. In the industrialized west, discontent seethes beneath the surface, but the dictum that the experts – the bankers, the CEOs, the policymakers (who swap roles seamlessly) – are right still holds. The majority must accept a decline in their standard of living and the prospects, such as they were, of job security so that growth can continue and the minority prosper even more opulently. This, of course, has long been the received wisdom in India, where, ever since the ’80s, full consensus was reached on the fact that the middle-class is the only class that matters – the rest can go hang.

Yet the short-lived debate over the merits of reformed capitalism presents an opportune time for delving into the past, to origins of capitalism, and trying to see what, if anything, can be discerned on the horizon. To do so, however, involves grappling with the arcane facts of history, a subject of demonstrably little interest to the Indian middle-class. Yet industrial capitalism was born in a specific place at a specific time from a specific constellation of factors that repay studying. Its preconditions were European – from the Renaissance in Italy to the forces unleashed by the Reformation in Germany; the discovery by Iberian navigators of sea routes to Asia and America; the colonization of the new world; the establishment in England of parliamentary government on a narrow class basis; political revolutions in France and America.

But why did the industrial revolution occur in England and nowhere else? This is the question Robert Brenner was concerned with in his famous article of 1976.[1] In practice, it resolves itself into a comparison between England and France, two countries that possessed the essential determinants: a reasonably centralized state apparatus and large economies. The contours of Brenner’s argument are simple. Social property relations in feudalism generated an inherent economic ceiling that inhibited growth.[2] This limitation had to do with the contradiction between peasant production and a surplus extracting mechanism based on extra-economic, which is to say, more or less forcible, coercion. Almost everything over bare subsistence was extracted from the peasant household by way of rent, punitive dues and labour services. Demographic fluctuations were built into the system:

‘Population growth, in the face of stagnant technique, led in the up phase of the cycle to increased return on land relative to labour, increased food prices relative to manufactures, and declining output per person … Ultimately, overpopulation was self corrective [through famine and disease], eventuating in a reversal of the demographic trend and, in turn, a down phase characterized by the opposite trends in the land/labour ratio and relative factor prices.’[3]

During the population upturn of the late 12th and 13th centuries, the power of the lords increased. The demographic decline of subsequent period provoked widespread conflict as the nobility sought to maintain its position in the face of fewer available workers and higher wages by tying peasants to the land. For their part, peasants sought fixed rents and commutation of labour services. The resolution of this conflict was dependent on the relative strength of the antagonists. Where peasant organization was weak, as in eastern Germany, the result was victory for the lords. In France, the nobility’s lack of cohesion led, by the late medieval period, to full peasant property rights embedded in monarchical absolutism.

In England, on the other hand, large scale dispossession by an exceptionally well organized aristocracy – a legacy of the Norman conquest – followed hard upon the erosion of serfdom. Smallholders were forced off the land through enclosures. Those who remained – peasants with substantial holdings in the core grain growing regions – were usually tenants, lacking non-market access to land. The necessity of earning incomes large enough to pay rents, and augment capital, fostered commercial production and innovations in agricultural technique. The tenant’s partner was the improving landlord who sought to maximize his income by raising agricultural productivity rather than rack-renting as before. This agrarian structure resolved the old demographic-economic crises that were the hallmark of feudal arrangements and triggered off a continuous process of economic development, ‘an upward spiral that extended into the industrial revolution.’[4]

Brenner holds that peasant agriculture was incapable of attaining the productivity essential for economic development. This could only be attained on ‘large consolidated farms with major capital inputs.’[5] In other words, the English triad of landlord, tenant and wage labourer was essential to the development of productive forces, the dispossession of the mass of peasantry being a precondition of this regime. In France, by contrast, lords and substantial peasants were unable to consolidate their holdings to anything like the same level. Meanwhile the state competed with the nobility as ‘an independent extractor of the surplus’ which meant it had an interest in maintaining peasant rights.[6]  Since the peasant had direct, non market access to land, he ‘did not have to be competitive, because he did not really have to be able to “hold his place” in the world of the market, either the market for tenants or the market for goods.’[7] The result was a self perpetuating cycle of stagnant productivity:

 Thus, ironically, the most complete freedom and property rights for the rural population meant poverty and a self perpetuating cycle of backwardness. In England, it was precisely the absence of such rights that facilitated the onset of real economic development.’[8]

 Brenner believes that dramatic rises in productivity became possible only with the emergence of large farms: these provided economies of scale and generated the surplus required for technological innovation. In England, the destruction of the peasantry “allowed” approximately 40 percent of the population to move out of agriculture into the nascent industrial sector, and led to an agrarian regime capable of producing enough to feed this workforce. A mass market for cheap industrial goods developed amongst intermediate farmers as well as the urban proletariat. Meanwhile agrarian capitalism produced profits large enough to be continuously re-invested in new techniques of industrial production.

 Brenner ignores the subsequent development of industrial capitalism in France (and western Europe) through a combination of imitation and indigenous development, and it is true that this does not materially affect his argument. Yet it certainly widens the range of choices or routes to capitalism. In the continent, where the state played a much greater role in fostering industrial enterprises, the peasantry as a class of small producers was to survive to the middle of the 20th century. Indeed one might argue that the survival of the peasantry, and the greater strength of working-class struggles compared to England (thanks to the heritage of the French Revolution), helped France avoid the worst of its social dislocations. By the 1970s, the French economy, radically modernized and refurbished after the war, had outstripped Britain’s – what the French middle-class missed out on, of course, were two centuries of global domination.

More importantly, Brenner’s argument, however skillful and self-consistent, remains within a framework in which every increase in productivity is regarded as positive. Once we move out of this framework, however, its propositions become more slippery. Let us take the concept of self sustaining economic growth. This is a chimera – industrialism can be regarded as self sustaining only by ignoring its ecological consequences, the rapid depletion of the physical resources of the planet. The growth of the present will be paid for in the future. This problem is usually evaded in two ways: by assuming that technological innovation will provide solutions, from the genetic engineering of crops to new sources of green power; and by the argument that under capitalism, the fruits of economic growth are distributed unequally whereas in genuine socialism this would not be the case. But no one has demonstrated how socialism could be ecologically sustainable either insofar as it is based upon the same model of industrial growth and infinite expansion.

Capitalism has produced an enormous mass of people whose existence is apparently irrelevant to its maintenance. This mass of “superfluous people” (in Etienne Balibar’s phrase), forced to scavenge in a variety of ways in a variety of milieus in order to survive, can either be regarded as an accidental byproduct, or a more or less organic consequence of its development. They eliminate the necessity for capital to meet the costs of physical reproduction – in other words, to pay for their survival and that of their families – while remaining available as a source of cheap labour whenever needed. Most of them are expropriated by modern variants of enclosure since extracting or producing the raw materials required by industry – oil, timber, electricity, ores, commercial crops – involves displacing subsistence producers who are promptly enrolled in what is euphemistically called the informal sector.

History is always written from the terminus of the present. Viewed from a European perspective, the destruction of the peasantry sparked industrialization which led to working class struggles and a reformed capitalism, embodied in social democracy. Thus from the uncertain perspective of the present, the process seems successful, if manifestly incomplete, given the swift erosion of the welfare state since the 1980s. From a global perspective, however, it is possible to discern only a continuing process of expropriation. No global reform of capitalism analogous to the post-war west European model is possible – someone, somewhere must pay the costs.

In the case of India, the cleavage is internal. The prime sufferers are plebeian groups at the middle and bottom of the caste spectrum, and adivasis in particular. They bore the brunt of colonialism – the commodification of land, forest enclosures, a flood of immigrants who took over their lands. Yet large pockets of subsistence production, semi-illegal, deformed by various pressures, survived. “Development” set about destroying them. Two waves of industrialization swept adivasi regions in central and eastern India – one from the late ’50s to the early ’70s, largely state sponsored, and another, much larger quantitatively, from the mid ’90s to the present, driven by private investment. Mining and heavy industry displaced adivasi communities, destroyed their livelihoods, failed to give them jobs (which went mostly to local non-adivasis or to immigrants), and cut them loose to join the swelling workforce of migrant labourers, a sea of impoverished, over-worked human beings, reduced to accepting the worst paid jobs in city and countryside. Their ceaseless movement over thousands of kilometers presses wages down in agriculture and industry: given the structure of industrial development in India and the saturation of global markets, there is not the slightest chance that they will ever become a factory proletariat.

There is a terrible disproportion in their numbers: adivasis and Dalits who comprise about a quarter of the population make up more than half of this workforce. The National Nutrition Monitoring Bureau’s survey of households in nine Indian states showed 33 percent of adult men and 36 percent of adult women with a body mass index of less than 18.5, indicating chronic “energy deficiency” or starvation. We can safely assume that this percentage is even higher for adivasi households.[9] In the World Health Organization’s cautious phraseology, the figure is associated with extremely low levels of physical activity, high levels of sickness and mortality, and chronic food insecurity.[10] By this reckoning, most adivasis and Dalits in India live in a state of permanent famine.[11] In the case of adivasi communities, a reasonably secure livelihood based on subsistence production has been exchanged for a life at the margins of survival.

From the very beginning they were Maoism’s principal adherents. Its first, formative rebellions – in Naxalbari (1967) and Srikakulam (1968-70) – drew upon adivasi support. Its subsequent growth has been fueled by adivasi communities in the forest belt of central India. This pattern is not merely a function of geography (hills and forests offering a congenial setting for guerrilla warfare): what is striking is that it is communities with something to lose that have proved most receptive to Maoism. This is partly because the effects of development, conventionally defined, have become more evident over the years. The visage of the state appears in its most naked and predatory form in these regions: it is symbolized in the tyranny of the forest department, the active defense of non-adivasi domination, the complete neglect of social services, the expropriation of land and forests for industry. No wonder adivasi communities turn to Maoism to defend themselves against “development”.

Nor is it an accident that Maoism has gained fresh adherents since the early ’90s when neo-liberalism came into flower. It is the circumstances of their lives rather than its ideology that push its followers into a desperate, last ditch battle with the state in preference to dispossession. The (non-adivasi) leadership of the CPI(Maoist) has shown no disposition to adapt its ideology to the lived experience of adivasi communities. Nevertheless its rank and file remains overwhelmingly adivasi. Meanwhile a myriad of peaceful movements in Orissa, Jharkhand and Chhattisgarh have set themselves explicitly against industrial development, saying, in effect, not at our cost.

The calculus of progress looks very different from this perspective. The security offered by subsistence production, supplemented by the produce of the forest, becomes ever more visible as it shrinks to vanishing point, and the alternatives present themselves more starkly. Wider circuits of exchange are not absent from this productive nexus which is neither isolated nor self sufficient, nor has been for at least two centuries, even though their relative importance has increased out of all recognition. As Eric Wolf pointed out long ago, peasants, even the most isolated, buy and sell things but their primary concern remains subsistence and food security.

The implicit assumption that underlies India’s economic policies since independence is that it can somehow replicate the trajectory of the west: which is why both neo-liberals and communists speak of “moving” people from agriculture to industry. But what was feasible in small, reasonably populated and relatively homogeneous countries like South Korea and Taiwan under autocratic direction is impossible in India – large, overpopulated, diverse, riven by hierarchies – even if the global context permitted. The hope of the well meaning is to end hunger and destitution for the majority while the middle-class grows and prospers. But to believe that this middle-class will ever become the majority is to live in a fool’s paradise. For industrial capitalism (or industrial socialism) in an overpopulated country – and world – is not a zero sum game in which everybody wins. Some – indeed the many – are bound to lose.

For dispossession is the obverse of the radical advances in productivity made possible by industrialism. The essential contradiction pertains to the process itself, whose results can only be evaluated across space – the globe as a whole, instead of this or that region; and time – the past and the future. Watching global capitalism from the periphery entails a different reading of its origins, and, implicitly, the future, from that of Brenner. Any definition of self sustaining growth needs must include the environment. Given the ecological consequences of industrial production, a system capable of transcending capitalism can only be viable if subsistence oriented perspectives are built into it. This is not to suggest a reversion to subsistence but radically modified methods of production, consumption and urban living, capable of coexisting with modes of subsistence production wherever the planet’s ecology does not permit intensive extraction (which is over most of its surface).

However no constellation of classes, nor forms of popular consciousness, look like  developing around this idea. An environmentalism based solely on protected areas as a means of preserving wildlife and habitats is the counsel of short sightedness or stupidity. For these enclaves are unlikely to matter very much – or last very long – if the rest of the ecosystem atrophies around them, choked by pollutants, waste, and human beings. In that case, the future in the first world is likely to resemble J G Ballard’s dystopias in which the luxurious, heavily guarded enclaves of the rich are lapped by workers and domestic servants, crammed into ghettos, and pathological violence is endemic; while the proliferating cityscapes of the Third World, set amidst ruined countrysides, are dominated by human scavengers: the logical terminus of “self sustaining growth”.


[1]   Reprinted with responses in The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe, edited by T. H. Aston and C. H. E. Philpin (Delhi, 2005).

[2]   p. 214.

[3]   p. 217.

[4]   p. 327.

[5]   p. 50.

[6]   p. 55.

[7]   p. 60.

[8]   p. 62.

[9]   The basic figures are taken from Angus Deaton and Jean Dreze, ‘Food and Nutrition in India: Facts and Interpretations’ in the Economic and Political Weekly, February 14, 2009, p 53. Since social and economic indicators for advasis and Dalits are invariably worse than national averages, this is a more than reasonable assumption.

[10] WHO Technical Report Series, no. 854, Physical Status: the Use and Interpretation of Anthropometry (Geneva, 1995), chapter eight, pp 347-362.

[11] A point made by Dr Binayak Sen, physician and human rights activist, incarcerated for two years by the Chhattisgarh government on trumped up charges of being a Maoist. I owe these references to him. According to the guidelines suggested by the Expert Committee of the WHO, when 20 to 39 percent of the population has a BMI of less than 18.5, the public health situation should be deemed serious; anything above this threshold is an emergency.

5 thoughts on “Counting the Cost: Industrialism, Capitalism, Socialism”

  1. “For industrial capitalism (or industrial socialism) in an overpopulated country – and world – is not a zero sum game in which everybody wins. Some – indeed the many – are bound to lose.”

    Just a quick note to point out that, by definition, in a zero sum game, everybody cannot win. Some will necessarily win, others will lose, and the sum will remain constant – i.e. zero.

    So, not the right phrase to use in that context. Thanks.

    1. Absolutely right; as I realized after sending the article off. The sentence should read: “For industrial capitalism (or industrial socialism) in an overpopulated country – and world – is not a game in which everybody wins. Some – indeed the many – are bound to lose.”

  2. Capitalism is merely the exercise of freedom in the economic sphere. Laissez faire may have existed in this world in 1700s and 1800s. To suggest west was a laissez faire society in 1980s is ridiculous. The author doesnt appear to have even the basic understanding of what laissez faire is and what capitalism is. Govt printing money is not laissez faire. If you wan to truly understand how the modern world that you & I inhabit came about, try reading “Bourgeois Dignity: Why Economics Can’t Explain the Modern World” by Diedre Mcclosky.

  3. There is no such thing as predatory capitalism. State intervention in economic sphere is statism not capitalism. Society that does not recognize property rights as a fundamental right can not call its policies as capitalistic. Such a society is not deserving of prosperity & peace. That’s precisely the case in India.

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