Mercantile capital

Nestor Miguel Gorojovsky Gorojovsky at
Sat Nov 25 09:05:07 MST 2000

En relación a Mercantile capital,
el 25 Nov 00, a las 9:18, Louis Proyect dijo:

> While it is useful to examine what Marx wrote in V. 1 of Capital, we should
> not neglect V. 3 which in some ways is as important as V. 1. For our
> purposes, Part Four of V. 3 is especially important since it devotes over
> 300 pages to the question of mercantile capitalism. It is also important
> because it is rooted in *historical* examples rather than abstractions
> about the nature of capital per se.
> In particular I recommend chapter 20, titled "Historical Material on
> Merchant's Capital". It sees modern capitalism as arising from the activity
> of town-based tradesmen. Marx is quite specific. He writes:
> ---
> The transition to large-scale industry depends on the technical development
> of these small owner-operated establishments -- wherever they employ
> machinery that admits of a handicraft-like operation. The machine is driven
> by steam, instead of by hand. This is of late the case, for instance, in
> the English hosiery industry.

Yes, Lou. This is precisely what I was keeping in mind. Please note that the whole
development by Marx does NOT start with the so to say "pure" merchant, that is the
specialist in purchase and resell, but with the "small owner-operated establishment"
that admits a "handicraft-like operation".  What we are confronting here is a model
that much resembles New England during the late 17th / early 18th. centuries, that
is a society that can be reasonably understood as "merchant capitalist" but not
because of resellers (allow me to state it this way) but because the individual
artisan or master is AT THE SAME TIME AND BY NECESSITY a merchant.

The development of this kind of social regime is blocked in those places where
chattel slavery or servile relations of production prevail. I am afraid I am with
Samir Amin rather than with Jim Blaut (and you) on this. In fact, if this had not
been the story, then we would have not had the need for national revolutions in the
Third World, nor would we have had a Third World.

Let us now go on with Marx, which is always refreshing:

> There is, consequently, a three-fold transition. First, the merchant
> becomes directly an industrial capitalist. This is true in crafts based on
> trade, especially crafts producing luxuries and imported by merchants
> together with the raw materials and labourers from foreign lands, as in
> Italy from Constantinople in the 15th century.

Please note again "crafts based on trade".  That is, production of molasses at the
core, not production of sugar. We are speaking of "crafts imported by merchants",
not of "goods imported by merchants".

> Second, the merchant turns
> the small masters into his middlemen, or buys directly from the independent
> producer, leaving him nominally independent and his mode of production
> unchanged.

This is the case where mercantile capital appears as separated and opposed to
production, and what Marx is saying here is that this leaves the "mode of production
unchanged" --thus, hardly can we find the origin of a capitalist formation here.

> Third, the industrialist becomes merchant and produces directly
> for the wholesale market.

If I am not remembering wrongly, THIS is precisely what Maurice Dobb tried to
develop and demonstrate in its intimate workings on his _Studies_. Please note that
this development does not beg the constitution of a periphery where capitalism as a
global system assumes the form of slavery or servitude at the local level (which is,
by the way, the level where concrete political action takes place).

> In the Middle Ages, the merchant was merely one who, as Poppe rightly says,
> "transferred" the goods produced by guilds or peasants  ...
> The merchant becomes industrialist, or rather, makes craftsmen,
> particularly the small rural producers, work for him.

Please note the wording "becomes industrialist, or RATHER, makes craftsmen... work
for him" (my emphasis). Now contrast with

> Conversely, the
> producer becomes merchant. The master weaver, for instance, buys his wool
> or yarn himself and sells his cloth to the merchant, instead of receiving
> his wool from the merchant piecemeal and working for him together with his
> journeymen. The elements of production pass into the production process as
> commodities bought by himself. And instead of producing for some individual
> merchant, or for specified customers, he produces for the world of trade.
> The producer is himself a merchant.

My take is that what Marx is showing here is that the POSITIVE moment of the
dialectics by which capitalism appears does not lay with the merchant turned
industrialist ("OR RATHER...", which means Marx establishes a distinction where the
merchant is NOT EXACTLY an industrialist) but with "the producer" who "is himself a
merchant". I can't but read this paragraph in the sense that Marx understands that
the origin of modern capitalism does not lay in mercantile (yes, distributive so to
say) relations but in productive relations.  The process that Marx further describes
(and Lou Pr has quoted) is the process by which industrial capital grows within (and
dialectically AGAINST) the environment provided by mercantile capital, and finally
conquers and subjects it to its own needs.  Please read carefully that "originally,
commerce was the PRECONDITION for the transformation of the crafts (...) into
capitalist enterprises". Precondition does not equate with ORIGIN.  Marx is
explaining here that in absence of a developed process of circulation (which was, of
course, qualitatively transformed by the inflow from America, and on this the world
system was already in action in 1500) the traditional crafts, domestic industries
and agriculture would have never been transformed. But Marx is NOT saying that those
merchants were the SUBJECTS of this great historical feat:

> Merchant's capital does no more than
> carry on the process of circulation. Originally, commerce was the
> precondition for the transformation of the crafts, the rural domestic
> industries, and feudal agriculture, into capitalist enterprises. It
> develops the product into a commodity, partly by creating a market for it,
> and partly by introducing new commodity equivalents and supplying
> production with new raw and auxiliary materials, thereby opening new
> branches of production based from the first upon commerce, both as concerns
> production for the home and world-market, and as concerns conditions of
> production originating in the world-market.

In fact, what happens is that another SUBJECT takes the stead of the merchant, of
the good old pure merchant whose income originates in long distance trade (for
example between sugar plantations where slaves were employed and plants in England
or New England where the product was sold at a price determined by the law of
value). Please note, again, the wording. When "manufacture gains sufficient
strength, and particularly large-scale industry" then "commerce becomes the servant
of industrial production". And please note in particular the final sentence: "The
industrial capitalist always has the world-market before him, compares, and
must constantly compare, his own cost-prices with the market-prices at
home, and throughout the world. In the earlier period such comparison fell
almost entirely to the merchants, and thus secured the predominance of
merchant's capital over industrial capital", which implies that the qualitative
difference between the craftsman who sold his or her production to the merchant and
the industrial capitalist is, precisely, that transformation of the craftsman into a
craftsman who sells to the market, a transformation that cannot take place in
societies where chattel slavery or servile relations dominate:

> As soon as manufacture gains
> sufficient strength, and particularly large-scale industry, it creates in
> its turn a market for itself, by capturing it through its commodities. At
> this point commerce becomes the servant of industrial production, for which
> continued expansion of the market becomes a vital necessity. Ever more
> extended mass production floods the existing market and thereby works
> continually for a still greater expansion of this market for breaking out
> of its limits. What restricts this mass production is not commerce (in so
> far as it expresses the existing demand), but the magnitude of employed
> capital and the level of development of the productivity of labour. The
> industrial capitalist always has the world-market before him, compares, and
> must constantly compare, his own cost-prices with the market-prices at
> home, and throughout the world. In the earlier period such comparison fell
> almost entirely to the merchants, and thus secured the predominance of
> merchant's capital over industrial capital.

Sorry for long quotes, but I thought they were necessary.

Néstor Miguel Gorojovsky
gorojovsky at

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