Primitive Accumulation of Capital - Ernest Mandel's Theory of Primitive Accumulation and David Harvey's Theory of Accumulation By Dispos

Ernest Mandel's Theory of Primitive Accumulation and David Harvey's Theory of Accumulation By Dispos

Ernest Mandel offers a Marxian theory which differs from orthodox Marxism stage theory. In his theory, primitive accumulation is part of the uneven and combined development of capitalism on a world scale.

Because business start-ups, forcible expansion of capitalist markets, and expropriation of peasants are going on all the time, primitive accumulation is also a process which happens all the time. The orthodox Marxism overlooked this social trend, possibly because they were fixated on Marx's story about English peasants being thrown off the land, rather than studying the facts of world history.

Mandel surveys the history of capitalist development from the early Middle Ages, and distinguishes between primitive accumulation of money capital and primitive Industrial capitalism. According to Mandel, one does not necessarily lead to the other. He calculates that the transfer of value to Europe from the slave trade and colonial robbery between 1500 and 1750 amounted to a sum of capital larger than the total capital invested in European industries in the year 1800.

The predicament of the "developing countries", Mandel says, expresses a double tragedy. Not only did they pay the price for the international concentration of capital; they also had to overcome industrial backwardness in a world economy already dominated by the industrial goods of the advanced countries.

So, while the world market boosted industrialization between the 16th and 19th centuries in Europe, North America and Japan, by about 1900 the same world market became an obstacle or brake to the industrialization of the third world, which mostly could not compete with Europe, North America and Japan. Some "intermediate" countries (e.g. settler colonies) did industrialize, but typically in a one-sided way; many of the industrial goods were produced for export.

The integration of developing countries into the world market occurred mainly on the initiative of the Western powers, in a way consistent with their interests. This created a hierarchy of nations in the international division of labour.

Because local demand was lacking in the third world, and because investors were unwilling to create colonial competition for the home country, investments focused mainly on agriculture and extraction of minerals for export.

At best, the outcome of all this was half-industrialization, and an economy which does not adequately serve the needs of the local population. There was plenty capital and unemployed labour, but little possibility for local industrial development benefiting the local population.

Mandel concluded that because the third world bourgeoisie mostly doesn't really care about developing the country, workers and peasants must take state power and carry out the necessary economic changes.

David Harvey expands the concept of "primitive accumulation" to create a new concept, "accumulation by dispossession", in his 2003 book, "The New Imperialism". Like Mandel, Harvey claims that the word "primitive" leads to a misunderstanding in the history of capitalism; that the original, "primitive" phase of capitalism is somehow a transitory phase that need not be repeated once commenced. Instead, Harvey maintains that primitive accumulation ("accumulation by dispossession") is a continuing process within the process of capital accumulation on a world scale. Because the central Marxian notion of crisis via "over-accumulation" is assumed to be a constant factor in the process of capital accumulation, the process of "accumulation by dispossession" acts as a possible safety valve that may temporarily ease the crisis. This is achieved by simply lowering the prices of consumer commodities (thus pushing up the propensity for general consumption), which in turn is made possible by the considerable reduction in the price of production inputs. Should the magnitude of the reduction in the price of inputs outweigh the reduction in the price of consumer goods, it can be said that the rate of profit will, for the time being, increase. Thus:

"Access to cheaper inputs is, therefore, just as important as access to widening markets in keeping profitable opportunities open. The implication is that non-capitalist territories should be forced open not only to trade (which could be helpful) but also to permit capital to invest in profitable ventures using cheaper labour power, raw materials, low-cost land, and the like. The general thrust of any capitalist logic of power is not that territories should be held back from capitalist development, but that they should be continuously opened up." (Harvey, The New Imperialism, p.139).

Harvey's theoretical extension encompasses more recent economic dimensions such as intellectual property rights, privatization, and environmental predation and exploitation.

Privatization of public services puts enormous profit into capitalists' hands. If belonged to the public sector, that profit wouldn't have existed. In that sense, the profit is created by dispossession of people. Destructive industrial use of the environment is similar because the environment is supposed to belong to the public.

Multinational pharmaceutical companies collect information about how herb or other natural medicine is used among natives in less-developed country, do some R&D to find the material that make those natural medicines effective, and patent the findings. By doing so, multinational pharmaceutical companies can now sell the medicine to the natives who are the original source of the knowledge that made production of medicine possible. That is, dispossession of intellectual property right.

David Harvey also argues that accumulation by dispossession is a temporal or partial solution to over-accumulation. Because accumulation by dispossession makes raw materials cheaper, the profit rate can at least temporarily go up.

Harvey’s interpretation has been criticized by Brass (2011), who disputes the view that what is described as present-day primitive accumulation, or accumulation by dispossession, entails proletarianization. Because the latter is equated by Harvey with the separation of the direct producer (mostly smallholders) from the means of production (land), Harvey assumes this results in the formation of a workforce that is free. By contrast, Brass points out that in many instances the process of depeasantization leads to workers who are unfree, because they are unable personally to commodify or recommodify their labour-power, by selling it to the highest bidder.