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Testing Capitalism

Matthew Yglesias is right to note, in response to Chris Blattman, that Karl Marx was actually a fan of capitalism in certain respects. Marx saw capitalism as an improvement over pre-capitalist economic systems, and a necessary stage on the road to communism. Indeed, his followers had to do quite a bit of rethinking of the doctrine when it turned out that communist revolutions were occurring in "backward" countries like Russia and China, but not in the capitalist heartlands like Germany and Britain.

But in his focus on dispelling misunderstandings of the specifics of Marxism, Yglesias implicitly accepts Blattman's claim that observing whether poor Africans would do better working for wages in a factory is a test of the capitalism-is-better view (held in different forms by Blattman and Marx) versus the views of those leftists who actually do think capitalism is a step backwards (Vandana Shiva or Immanuel Wallerstein, for example). I don't think this is the case, because said Africans are not being offered the choice between participating in capitalism or remaining in a pre-capitalist economy. African economies* are already deeply impacted by colonialism and the capitalist system that grew out of it (Blattman does reference this possibility in an offhand way). The death of Africa's pre-capitalist economic system began in the 1500s with the growth of the Atlantic slave trade, which disrupted African societies by taking away large numbers of young able-bodied men and women, fostering conflict between tribes/kingdoms, and introducing a treadmill of new goods (if your tribe gets guns, my tribe suddenly needs guns for self-protection). Later direct colonial control of African territory by European powers resulted in widespread dispossession of land for elite use and the further disruption of traditional economic systems to encourage dependence on European companies as buyers and sellers of goods. Post-colonial rulers focused on their own profit and prestige, and limited in their ability to swim against the currents of the foreigner-dominated global economic system they found themselves tied into, have not done much to set the situation right.

The choice faced by a poor African farmer, therefore, is often not between pre-capitalism and capitalism. It's between two ways of participating in the capitalist system -- as low-wage workers on the bottom of the production hierarchy, or as the dregs tossed to the side by the system. That they would choose the former says nothing one way or the other about the relative merits of the pre-capitalist economic system. And those leftists who praise pre-capitalism aren't arguing for simply a removal of capitalist employment opportunities. Rather, they seek conditions under which Africans can have the opportunity to rebuild an economy on its pre-capitalist basis (e.g. through the return of lands that were critical to that economy but are now white farms or national parks). And since this same story of the bloody process by which capitalism first established itself has been repeated so often around the world, I doubt you could ever find the kind of clean test that Blattman seeks of which economic system people would choose.

(I'd also note that his test involves comparing the fortunes of wage laborers and non wage laborers within the same village. The utility of such a test depends on assuming that joining the capitalist labor force is an individual decision with individual consequences. That assumption is consistent with one branch of the capitalism-is-better camp, but runs against the premises of significant collective/structural effects held by traditional Marxists as well as most of the capitalism-is-worse camp.)

(There's a lot of debate about the specific content of a "pre-capitalist" economy. Here I use the term to refer to whatever economic system Africa had in the time period in question, and I think the argument holds regardless of whether you side with the Karls (Marx and Polanyi) in holding that modern capitalism constitutes a fundamental qualitative break with earlier tribute- and kin-based economic systems, or with people like Andre Gunder Frank and the neoclassical economists who hold that markets and long-distance trade have always been important components of human economies.)

*To the extent that I can generalize to an entire continent.


Blogger Alon Levy said...

Stentor, many of the problems that capitalists say their system fixes have always been there, regardless of colonialism. For example, subsistence-level living standards were the norm everywhere in the pre-industrial world, with high infant mortality, low literacy, and no protection from Malthusian catastrophes. You can't alleviate extreme poverty without capitalist development. Kerala tried, and ended up with so much unemployment that 20% of its GDP comes from remittances.

12:28 PM  
Blogger Stentor said...

Your Kerala example has the same problem as the African one -- what works after a country has been subjected to colonialism and initial incorporation into the capitalist system tells us nothing about the merits of a pre-capitalist condition.

There's good reason to think that at least some pre-capitalist societies had pretty happy lives, with plenty of intellectual stimulation (though not in the specific form of literacy) and little danger of Malthusian catastrophes. They may not have flat-screen TVs, but they'd hardly describe themselves as suffering "extreme poverty."

10:31 PM  
Blogger Alon Levy said...

I don't see this good reason. Infant mortality was high in all of those societies, for example, and epidemics were common. Famines occurred from time to time - I believe the first time a country eradicated famines was in the Netherlands in the 1600s. And Malthusian catastrophes did happen whenever population grew too much, for example in Qing China or Medieval Europe. China was poorer than Europe even in 1700, but it only really crashed once population started growing.

1:48 PM  

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