Karl Marx on the role of public debt and taxation in primitive accumulation - an insufficiently noticed passage

Jurriaan Bendien bendien at tomaatnet.nl
Tue Nov 11 15:33:39 MST 2003

(the following passage by Marx is insufficiently noticed by the literal
Marxists, presumably because it does not appear in the chapter "The scret of
primitive accumulation", but in the chapter on the "Genesis of the
industrial capitalist". Bourgeois leftists are fond of quoting the
concluding sentence of the analysis, but they omit the analysis that
precedes it, and therefore we are left only with a vague moralism - JB).

"Of the Christian colonial system, W. Howitt, a man who makes a speciality
of Christianity, says: "The barbarities and desperate outrages of the
so-called Christian race, throughout every region of the world, and upon
every people they have been able to subdue, are not to be paralleled by
those of any other race, however fierce, however untaught, and however
reckless of mercy and of shame, in any age of the earth." [4] The history of
the colonial administration of Holland -- and Holland was the head
capitalistic nation of the 17th century -- "is one of the most extraordinary
relations of treachery, bribery, massacre, and meanness" (...) But even in
the colonies properly so called, the Christian character of primitive
accumulation did not belie itself. Those sober virtuosi of Protestantism,
the Puritans of New England, in 1703, by decrees of their assembly set a
premium of £40 on every Indian scalp and every captured red-skin: in 1720 a
premium of £100 on every scalp; in 1744, after Massachusetts-Bay had
proclaimed a certain tribe as rebels, the following prices: for a male scalp
of 12 years and upwards £100 (new currency), for a male prisoner £105, for
women and children prisoners £50, for scalps of women and children £50. Some
decades later, the colonial system took its revenge on the descendants of
the pious pilgrim fathers, who had grown seditious in the meantime. At
English instigation and for English pay they were tomahawked by red-skins.
The British Parliament proclaimed bloodhounds and scalping as "means that
God and Nature had given into its hand."

(...) The treasures captured outside Europe by undisguised looting,
enslavement, and murder, floated back to the mother-country and were there
turned into capital. Holland, which first fully developed the colonial
system, in 1648 stood already in the acme of its commercial greatness. It
was "in almost exclusive possession of the East Indian trade and the
commerce between the south-east and north-west of Europe. Its fisheries,
marine, manufactures, surpassed those of any other country. The total
capital of the Republic was probably more important than that of all the
rest of Europe put together." Gülich forgets to add that by 1648, the people
of Holland were more over-worked, poorer and more brutally oppressed than
those of all the rest of Europe put together. (...)  It was "the strange
God" who perched himself on the altar cheek by jowl with the old Gods of
Europe, and one fine day with a shove and a kick chucked them all of a heap.
It proclaimed surplus-value making as the sole end and aim of humanity.

The system of public credit (...) first took root in Holland. (...) the
modern doctrine [is] that a nation becomes the richer the more deeply it is
in debt. Public credit becomes the credo of capital. And with the rise of
national debt-making, want of faith in the national debt takes the place of
the blasphemy against the Holy Ghost, which may not be forgiven. The public
debt becomes one of the most powerful levers of primitive accumulation. As
with the stroke of an enchanter's wand, it endows barren money with the
power of breeding and thus turns it into capital, without the necessity of
its exposing itself to the troubles and risks inseparable from its
employment in industry or even in usury. The state-creditors actually give
nothing away, for the sum lent is transformed into public bonds, easily
negotiable, which go on functioning in their hands just as so much hard cash
would. But further, apart from the class of lazy annuitants thus created,
and from the improvised wealth of the financiers, middlemen between the
government and the nation-as also apart from the tax-farmers, merchants,
private manufacturers, to whom a good part of every national loan renders
the service of a capital fallen from heaven-the national debt has given rise
to joint-stock companies, to dealings in negotiable effects of all kinds,
and to agiotage, in a word to stock-exchange gambling and the modern

At their birth the great banks, decorated with national titles, were only
associations of private speculators, who placed themselves by the side of
governments, and, thanks to the privileges they received, were in a position
to advance money to the State. Hence the accumulation of the national debt
has no more infallible measure than the successive rise in the stock of
these banks, whose full development dates from the founding of the Bank of
England in 1694. (...) With the national debt arose an international credit
system, which often conceals one of the sources of primitive accumulation in
this or that people. Thus the villainies of the Venetian thieving system
formed one of the secret bases of the capital-wealth of Holland to whom
Venice in her decadence lent large sums of money. So also was it with
Holland and England. By the beginning of the 18th century the Dutch
manufactures were far outstripped. Holland had ceased to be the nation
preponderant in commerce and industry. One of its main lines of business,
therefore, from 1701-1776, is the lending out of enormous amounts of
capital, especially to its great rival England. The same thing is going on
to-day between England and the United States. A great deal of capital, which
appears to-day in the United States without any certificate of birth, was
yesterday, in England, the capitalised blood of children.

As the national debt finds its support in the public revenue, which must
cover the yearly payments for interest, &c., the modern system of taxation
was the necessary complement of the system of national loans. The loans
enable the government to meet extraordinary expenses, without the tax-payers
feeling it immediately, but they necessitate, as. a consequence, increased
taxes. On the other hand, the raising of taxation caused by the accumulation
of debts contracted one after another, compels the government always to have
recourse to new loans for new extraordinary expenses. Modern fiscality,
whose pivot is formed by taxes on the most necessary means of subsistence
(thereby increasing their price), thus contains within itself the germ of
automatic progression. Over-taxation is not an incident, but rather a
principle. In Holland, therefore, where this system was first inaugurated,
the great patriot, DeWitt, has in his "Maxims" extolled it as the best
system for making the wage-labourer submissive, frugal, industrious, and
overburdened with labour. The destructive influence that it exercises on the
condition of the wage-labourer concerns us less however, here, than the
forcible expropriation, resulting from it, of peasants, artisans, and in a
word, all elements of the lower middle-class. On this there are not two
opinions, even among the bourgeois economists. Its expropriating efficacy is
still further heightened by the system of protection, which forms one of its
integral parts.

The great part that the public debt, and the fiscal system corresponding
with it, has played in the capitalisation of wealth and the expropriation of
the masses, has led many writers, like Cobbett, Doubleday and others, to
seek in this, incorrectly, the fundamental cause of the misery of the modern
peoples. The system of protection was an artificial means of manufacturing
manufacturers, of expropriating independent labourers, of capitalising the
national means of production and subsistence, of forcibly abbreviating the
transition from the medieval to the modern mode of production. The European
states tore one another to pieces about the patent of this invention, and,
once entered into the service of the surplus-value makers, did not merely
lay under contribution in the pursuit of this purpose their own people,
indirectly through protective duties, directly through export premiums. They
also forcibly rooted out, in their dependent countries, all industry, as,
e.g., England did. (...)

Colonial system, public debts, heavy taxes, protection, commercial wars,
&c., these children of the true manufacturing period, increase gigantically
during the infancy of Modem Industry. The birth of the latter is heralded by
a great slaughter of the innocents. (...) England extorted from the
Spaniards by the Asiento Treaty the privilege of being allowed to ply the
negro-trade, until then only carried on between Africa and the English West
Indies, between Africa and Spanish America as well. England thereby acquired
the right of supplying Spanish America until 1743 with 4,800 negroes yearly.
This threw, at the same time, an official cloak over British smuggling.
Liverpool waxed fat on the slave-trade. This was its method of primitive
accumulation. (...) Tantae molis erat, to establish the "eternal laws of
Nature" of the capitalist mode of production, to complete the process of
separation between labourers and conditions of labour, to transform, at one
pole, the social means of production and subsistence into capital, at the
opposite pole, the mass of the population into wage-labourers, into "free
labouring poor," that artificial product of modern society. If money,
According to Augier, "comes into the world with a congenital blood-stain on
one cheek," capital comes dripping from head to foot, from every pore, with
blood and dirt.

source: http://csf.colorado.edu/psn/marx/Archive/1867-C1/Part8/ch31.htm

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