ORIGIN OF THE MARKETS: A DIALECTIC ODYSSEY OF ENCLOSURES

INTRODUCTION

I have taken the leverage of the 150-year anniversary of Marx’s “Capital” to undertake a comparative analysis of two historically exciting, and part of the most important body of intellectual contributions to the development of modern political economics; Karl Marx’s “Capital” and Karl Polanyi’s “The Great Transformation”. I have also adapted Charles Darwin’s “Origin of the Species”, as a fitting title for the comparative analysis of the works of Karl Marx and Karl Polanyi on enclosures. Like Darwin, both were interested in providing answers, indeed, interpretations to a phenomenon; for the ‘Karls’, the development or origins of the capitalist market economy and the roles played by enclosures while the former sort to explain the origin of life as we know it. Why focus on markets? The social conditions of the masses and wide social inequalities characterized by rabid mass poverty, squalor, lack of basic survival needs and inaccessibility of the poor to capital was an incentive for an investigation into the factors that led to this deplorable situation. While many scholars agree that the Adam Smith capitalist model was a direct derivative of the advent of the Industrial Revolution, the spark that triggered the shift from feudalism to the capitalist mode of production is arguably woven around the strictures imposed on the livelihoods of peasants by the enclosure regime.

Marx in volume 1 of “Capital” and Polanyi in “The Great Transformation'' provided groundbreaking insights into the metamorphosis of the earlier feudal system, which though replete with clear class distinctions provided for the various layers of society, feudalists and peasants alike, into a “satanic mill” (Polanyi 2001, 35) propelled by the machines of technology. Evidently, the work of Marx and Polanyi constitutes the foundation upon which the mass of modern political-economic literature on the economic typology of society is based, and therefore, engaging with the scholarship they projected on their views on enclosures alone, as foreshadowing their thoughts on the origin of markets is very narrow. However, the fact that both scholars devoted a significant portion of the identified works, x-raying the effects of enclosures on the social conditions of the masses; and firmly fingered the practice as the enabling factor which foregrounded the social dislocation suffered by same, is enough ground to critically explore their views on the roles of enclosures in creating a market economy.

This paper argues that the similarity of opinions on enclosure between Marx and Polanyi is only to the extent of a consensus on the deplorable social conditions that it brought on the people, same being a catalyst of the market economy and that there remain huge fundamental disagreements between both scholars on the role of the state during the enclosure epoch.

Conceptual Elucidation

Markets in contemporary use may not be recognizable when put in the same crucible as the markets described in the literature under review. To Marx, the possession of commodity, capital and the means of production must necessarily meet a willing seller of another commodity in the form of labour for a market to exist (Marx 1995, 874). This commodification of the factors of production inevitably disaggregates owners of the land, capital and labour. The bourgeois landowners aiming to acquire a surplus-value will require the only commodity the peasants must sell, their labour.

For Polanyi, a market is simply a place where buyers and sellers meet for the exchange of goods. However, taking the analysis further, Polanyi recognized the creation of a market economy, which became incumbent following profits demand in exchange transactions (Polanyi 2001, 44). Once exchange became complex, no less driven by the need to produce more for profit maximization and economic growth, the prevailing subsistence level of the economic order was bound to pave the way for utilitarian economic activities. This was the condition that compelled and propelled the regime of enclosures.

Enclosures: Marx and Polanyi’s Dialectic Odyssey

Fifteenth-century England was largely free of the bastions of serfdom but the emergent class of merchants, propelled by the accumulation of capital and attracted to the power of value surplus, revelling in an operating environment that was only focused on profits without the encumbrances of regulation or concerns for the deleterious social dislocations caused by an unregulated market. Naturally, the quest for improvement was always going to be antithetical to the subsistent needs of the peasant agrarian populace. The exponential value of hedged land in contrast to fallow land and the growth of the wool industry only exacerbated the precarious social relations of the time. It is against this backdrop that the seizure of land for pasture, or enclosures were foregrounded. Marx and Polanyi rightly agree that enclosures represented a very significant shift from the rural way of life of the vast population. The suddenness of the system wrought grave consequences on the proletariat class and was akin to an elite or bourgeois conspiracy against the poor (Polanyi 2001, 37).

Marx was very scathing in his condemnation of the forces that threw up such dangerous economic conditions with its harsh consequences. For Marx, the measures taken by the crown and the parliament to neutralize the acts and effects of enclosures were largely unsuccessful (Marx 1990, 880). The expropriation of the agricultural land of the proletariats to feed the wool industry in Marx’s opinion got state support with the enactment of the Enclosures Act of Parliament, an Act which Marx equated with robbery.

Marx’s position though populist has inherent contradictions within it. First, Marx’s historical materialism argues that change is inevitable and to the extent of the inevitability of change, the development of markets, with a bias for the capitalist mode of production, effectuated by the shift in technological innovation is a fait accompli. Marx chose to ignore the power of that shift and the reality of the market economy in his one-dimensional market model, a force powerful enough to set the feudal merchant class against the crown. Was Marx recommending an intervention in or stoppage of change? That position would also contradict the tenets of the trajectory of economic development propounded by Marx, the intermediary of which is the capitalist mode that he reckoned was the most powerful revolutionary force that was capable of catalyzing tremendous growth.

Polanyi understood the constancy of change and as earlier stated, he deplored its epiphenomenal consequences but also understood that enclosures had its benefits (Polanyi 2001, 36). His departure from the Marxian level of analysis was on the role played by the state in slowing down the effects of change. The self-regulated market required by the purveyors of enclosures provoked massive social dislocation and devastated the livelihoods of the greater majority such that previous beneficiaries of communal land became peasants. To Polanyi, enclosures and its consequences were a function of the pace of change and would consume a clear majority of the masses if an external force was not introduced to not so much as stop the change but slow it down. The intervention of the state through the Poor Laws and the Act of Enclosures were practical steps taken by the state to slow down change and provide a cushion for the people to get accustomed to the dictates of the new operational environment determined by the market (Polanyi 2001, 40). Polanyi foregrounded his argument by drawing parallel with an unregulated, noninterventionist period in the 19th century when market forces were left unchecked, the effects he maintained the world is still recovering from (Polanyi 2001, 42). This argument would appear to place the state in good light and concede an altruistic purpose to their actions. Far from it, the state’s intervention was in the realm of self-preservation, seeing as a major dislocation of the social conditions of the masses without safety nets was a veritable environment for violent overthrow or mass-based revolution against the status quo. In a globalized environment, how successful will efforts by national governments to slow down change be when global markets react to externalities and shocks almost at the speed of light? Mokr and Nye intervening in the debate saw nothing wrong with enclosures themselves. Their argument hinged on the intertemporal nature of economic change and the hardships described by Marx and Polanyi merely a necessary condition or stage that must be crossed if the benefits of such change were to be derived (Mokr and Nye 1998). The institutional framework and arrangements put in place during the period by the state, to Mokr and Nye was not suggestive of an intervention, rather, processes that were adopted to prevent the regulation of a liberal market system. This perhaps optimistic view of the role of the state during the period plays the ostrich in the face of well-documented social dislocations that the enclosures foisted on the masses. The strictures imposed by multilateral organizations such as the World Bank and the International Monetary Fund (IMF) on national interventions in the economy, mouthing the reforms mantra, especially in the developing world, is a direct endorsement of the Mokr and Nye liberal orthodoxy of ‘suffer now to reap later’ interpretation of the enclosure system. Marx and Polanyi would disagree.

Conclusion

While preventing economic change may be an effort in futility, a lot can be done to redirect or slow it down, the 2008 subprime market bubble, a poster child for what a lack of regulation can do. Polanyi, while not glorifying the enclosures regime was pragmatic in adducing certain economic improvements to it but contended that the state’s ability to rein in the operations of ‘free’ markets cushioned the effects of social dislocations brought upon the people by the system. Marx and Polanyi clearly disagree on this front, for to Marx, the expropriation of the agricultural land of the proletariat was a means to the eventual pauperization of the working class by the ruling elite which explains why to him, the steps are taken to stop the enclosure regime failed. Enclosures were the germ seed that gave rise to the markets and as inevitable as change is, given Marx’s position that the capitalist mode of production was a sine qua non to an eventual socialist condition, no government intervention would have been strong enough to stop it.

Cited Works

“Distributional Coalitions, the Industrial Revolution, and the Origins of Economic Growth in Britain.” 2007. Accessed November 5, 2016. http://readinglists.lse.ac.uk/items

Marx, Karl, Ernest Mandel, and Ben Fowkes. 1990. Capital: A Critique of Political Economy: V. 1: A Critique of Political Economy. New York, N.Y., USA: Penguin Books in association with New Left Review.

Polanyi, Karl. 2001. The Great Transformation: The Political and Economic Origins of Our Time. Boston, MA: Beacon Press