Notes on Economic History (3) (1961)

From the January 1961 issue of the Socialist Standard

The Rise of the Merchants

The earlier feudal economy had to be curbed by the encouragement of manufacture through privileges and monopolies (thus breaking the power of the Guilds), through exemption from taxation, and through other forms of support. Skilled craftsmen were imported, industrial secrets were purchased or stolen. On the other hand, by official supervision of the whole process of production, industry was to be kept up to the mark, and at the same time the consumer was to be protected by subjecting the process of sale to inspection. Here the traditions and customs of the older urban economy showed their influence.

Another method adopted was the establishment of colonies and trading companies. The East India Company, founded in 1660, was given the right in 1661 to carry on war and make peace in non-Christian countries. Similar companies were set up by other Powers.

Attempts were made to provide cheap labour so as to promote and strengthen industry. One method was to encourage the increase of population (a special need in Germany in those days after the Thirty Years War); prohibitions on marriage was removed and payments made to fathers of large families. Another was to cheapen the necessaries of life, so that wages could be kept down. Foodstuffs were freed from import duty, while high levies were placed on exported grain, or its export totally forbidden. These measures were opposed to the interests of the agriculturalists but, though not openly advocated, were often put into practice, for example, in France by Colbert.

Finally the output of gold and silver was to be increased where possible by mining in the home-land, assisted by state subsidies if needed. The attraction of wealthy foreigners into the country, the prohibition of the export of precious metals, and similar measures, were to supplement and round off the expedients for increasing the national wealth.

A survey of mercantilist policy shows that its advocates placed great importance on money, but did not hold that money was an end in itself; they valued it for its productive effects. Thomas Mun, the mercantilist, wrote "money begets trade" and "trade increases money". Charles Davenant, of the same school, says "Foreign trade brings in the stock. This stock, well and industriously managed, betters land, and brings more products of all kinds for exportation; the returns of which growth and product are to make a country gainers in the balance". Colbert says the same thing from the outlook of the State financier: "If there be money in the country, the desire to turn it to advantage makes people set it in motion, and public funds benefit thereby".

It is necessary to remember that mercantilism differed greatly at different times and in different countries. In England, Holland and Italy, it was predominantly commercial; in France and Germany it was rather industrial. These variations notwithstanding, and allowing for differences in the details of application, all the European rulers and statesmen from the sixteenth to the eighteenth century were guided by the principles set out above.

In England, though agriculture and manufacture were not neglected, mercantilism had a strong commercial trend. Cromwell's Navigation Law of 1651 decreed that no merchandise from Asia, Africa or America should be imported, except in ships built in England, owned by English subjects, navigated by English captains, with at least three-fourths of the crew English. Sea-borne commerce from England to other European countries was to be carried either in English boats, or else in ships belonging to the country with which trade was being carried on.

These conditions meant a practical monopoly of the seas for the English, to the detriment of the Dutch carrying-trade. By a treaty of 1703, Portuguese ports were opened to British woollens in return for concessions to Portugal allowing the importation of wine into Great Britain.

In Germany and Austria, owing to the devastation of the Thirty Years War, the need to increase the population was of paramount importance. There could not be much endeavour to promote foreign trade. The main concern was to hinder imports from countries whose manufactured goods were so cheap that the compensation could not be met. A demand for laws to limit expenditure on clothes, food, furniture, etc. was a feature of mercantilism here.

In Italy, in conformity with the nature of the financial and commercial aristocracies of the republics of that period, the mercantilist school was especially interested in the balance of trade and monetary problems.

In France, Jean Baptiste Colbert was the most successful exponent of the mercantile system, especially after 1666 when he became controller general of the national finances. At the time he took office, French industry was a long way behind England, and even Germany, and the finances and administration were in a bad state. It was not long before internal customs dues had been largely abolished, canals had been made, and skilled workmen and contractors attracted from other countries. By such stimulants as State subsidies, protective duties, and the establishment of technical schools, French industry began to flourish.

Adam Smith considered the mercantilists as a school of united thinkers. This is not so. Mercantilism was essentially a vague principle of applied economics, stemming from the historical, economic, and political foundations of the period. The economists of those days, in order to further the advance from the feudal and localised urban economy to a unified national economy, had to put forward the ideas of the balance of trade, attach great importance to money, study the effects of customs tariffs, examine the source of national wealth, and thus come to form a durable though somewhat loosely organised unity.

It was the economics of early capitalism—the period of history in which Capitalists and Workers make their appearance, showing a difference in the form of the class struggle from the feudal period before it.

Bob Ambridge

Notes on Economic History (2) (1960)

From the December 1960 issue of the Socialist Standard

The Mercantile System

This was the beginning of the modern era. A new form of economic practice was developing, and new theories made their appearance in the form known as Mercantilism. This term (introduced by Adam Smith) is, however, a little misleading for its advocates were quite as concerned with industrial development as with the exchange of merchandise.

The term "Mercantile system" is loosely used to denote all the principles applied by the governments and traders of those days—though it is a fact that these principles have a general conformity. Mercantilism was a growth of its time. It was a system of political absolutism and centralization in favour of the burghers and mobile capital, to the detriment of the lords of the soil. To throw light on this we must glance at the economic process of this period.

The economic organisation of the Middle Ages was disrupted mainly by those political changes which led in Western Europe to the formation of the national states (France, Spain, Portugal and England); and in Germany, later in, to the formation of territorial princedoms. As a result, the Mediaeval economy, with its urban units, was replaced by larger units of different kind—the unified national economic areas. Political concentration in these areas resulted in money and wealth becoming elements of political power in a way very different from of old.

The idea of money as the nerve of the State was in many respects new. The State, which had been constituional (in the Feudalist sense) became absolute; a State army replaced the Feudal militia; and the centralisation of the administration established a paid civil service, judiciary, etc., where Feudal methods of self government had previously prevailed. The result was that military and civil concerns, taxation, and the processes of State credit, tended more and more to be carried on upon a monetary basis instead of by the payments in kind of the earlier economy. Money acquired a significance that was quite new.

These changes were accompanied by the economic upheavals that followed the discovery of America (1492) and the opening of the sea route to the East Indies (1498). New possibilities of world trade came into being, giving power to those traders situated on Western seaboards (the Spanish, the Portuguese, the Dutch and the English) but weakening those cut off from the new commerce. Trade, and the money standing behind trade, became important as sources of wealth and political power.

The effects of these displacements of wealth was reinforced by a new process. Soon after the discovery of the New World a vast amount of gold and silver began to move from Spain across Europe. As a result, the purchasing power of these metals fell enormously, with a consequent tremendous rise in prices. It is true that the rise in prices began about 1510, whereas the increase in gold and silver began to make itself felt about 1520. This was the result of famine, plague, and other causes, but nonetheless, the superabundance of gold was a factor, and a major one, in the rise of prices. The influx of gold played a great part in undermining the foundations of the old feudal economy, for it favoured the diffusion of the means of credit, and laid the ground for the development of the capitalist system.

All these circumstances tended to emphasize the importance of money, to stress the importance of commercial wealth as compared with the wealth that changed hands in kind during the feudal period. Thus, whereas in earlier times there had been the endeavour to check the growth of a monetary economy, the opinion now was that money, of not the only source of wealth, was certainly of decisive importance.

The primary aim of the mercantilists was to achieve a favourable balance of trade. When exports exceed imports, when the value of the goods sold to buyers abroad exceeds the value of the goods purchased from such buyers, the amount of money entering a country will exceed the amount of money leaving it. Then the balance of trade is said to be favourable to the country in which money thus accumulates. To achieve this favourable balance (which was the desire of the mercantilists) it was necessary to stimulate export trade. With that end in view, it was essential to foster industries that created commodities for export and, on the other hand, to check as far as possible the import of commodities.

But if home industry was to be fostered, special attention had to be paid to internal communications. It was necessary to abolish or reduce tolls and the like, and to break down the barriers erected by the urban economy of the Guilds. Good roads had to be built, canals dug, internal communications facilitated, home markets established. Customs policy was, therefore, of supreme importance in the mercantile system. The champions of that system wanted to abolish export duties, and if necessary stimulate exports by subsidies; at the same time they aimed at reducing imports by a high import tariff, or by actual prohibition. Instances are in France, the unified import tariff in 1664, and the development towards such a tariff in England after 1692. As corollaries to the restriction of imports, there had to be freedom for the import of raw materials needed by home industries and prohibition of the export of such materials.

Bob Ambridge 

Notes on Economic History (1) (1960)

From the November 1960 issue of the Socialist Standard

Economics before Mercantilism

The object of these notes is to provide a general introductory guide for those who would like to know more about the subject of Political Economy. They cover the period from early times to Marx and set out the main developments and theories that arose during that time, using as a key the Materialist Conception of History.

Engels in his preface to the 1888 edition of the Communist Manifesto says: "The 'manifesto' being our joint production, I consider myself bound to state that the fundamental proposition which forms its nucleus belongs to Marx. That proposition is: that in every historical epoch the prevailing mode of economic production and exchange, and the social organisation necessarily following from it, form the basis upon which is built up, and from which alone can be explained, the political and intellectual history of that epoch."

That proposition is, in short, the Materialist Conception of History.

By the term economics is meant throughout these notes the study of the production and distribution of wealth. Such a study must take into consideration historical, geographical and many other factors, always bearing in mind that behind the abstractions are real people, who combine, deliberately or otherwise, to produce and distribute wealth.

Neither in classical antiquity, nor yet in the Middle Ages, did there arise any finished systems of economic thought. In those epochs, when men's thoughts were concerned with the heroic and supernatural, the economics of life was regarded as of little importance. Only when, as today, life is dominated by the forces of competition and struggle, is civilised life dominated by economic considerations to the extent we know it today. Even in those earlier ages, however, economic thought such as it was showed signs that it had arisen out of earlier forms of society, and developed and evolved with these societies.

It is an error to picture the course of economic development as though mankind has passed simply from a primitive form of society to a slave-owning form, then to a Feudal one, and finally to a Capitalist economy. At all times there have been lesser economic groups that formed integral parts of the larger, nation-wide or world-wide complexes.

During the primitive period of man, in the Stone Age, the exchange of things went on, and there are proofs of the existence of some form of primitive trading as far back as the Bronze Age, since the constituents of bronze (tin and copper) are not generally found together. At the beginning of historical times, in Babylon, Persia, Carthage, Egypt, Greece and Rome, there was a well-developed form of trade, with industry carried on for export, together with monetary systems and credit.

The beginnings of economic science itself go back to Plato and Aristotle. Plato (347 B.C.) and Aristotle (322 B.C.). made some contributions to economic science, but as far as economics is concerned, mention need only be made of Aristotle's remarks on money, interest and taxation. Aristotle saw the essential nature of money as this: "That it is an intermediary in the exchange of utilities, thus acting as a medium of exchange." To him, however, it is sterile; "it brings forth no children." It cannot of itself produce any goods; therefore interest is wicked. This teaching was to have a great influence in the later Feudal period.

The economic thought of the Middle Ages was dominated by the teachings of Thomas Aquinas (1274), who derived from Aristotle and the Roman civil and canon law the concept of a "just price." Aquinas held that there were two kinds of justice:

1. Distributive justice.
2. Compensatory justice, or the justice of exchange.

In the matter of price, justice is found in the equality of mutual benefit in an exchange. What determines income is not the supply and demand of labour, but a normal outlook, the customary and average mutual adjustments between the individuals who exercise functions. To quote Aquinas, "Wherever a good is to be found, its essence is due measure." Thus we get the idea of income that is "suitable" or "proper" to a man's position in society. Interest on money, or usury, is frowned upon. "Money is a medium of exchange, its use is in its consumption." Consequently, for the use of borrowed money it is wrong, or at least improper, to expect anything beyond simple repayment. Aquinas does make exception in the case of tenancy, hire and credit for goods supplied. In later years, missed opportunities for gain, and loss incurred by or injury to the lender, became good grounds for demanding interest.

The prohibition of interest or usury is basically designed for an economy based on land as property, that is Feudal society, which endeavoured to keep money, and those ideas that flow from an economy based on money, under control.

Economic ideas, and the practical application of them, show a gradual growth and conflict as the old Feudal society begins to decline. The development which economic science made after this period are bound up with the growth of towns and the increasing power of the traders. The early stage of these developments is generally known as the Mercantile period and this will be dealt with in our next issue.

Bob Ambridge

Mixed Media: Dennis Hopper (2015)

The Mixed Media Column from the October 2015 issue of the Socialist Standard

Four hundred black and white photographs taken between 1961 and 1967 by film director and actor Dennis Hopper (1936-2010) went on show last year at the Royal Academy of Arts, London. These photographs haven't seen the light of day since his first ever photography show in Fort Worth, Texas in 1970. Hopper used a 28 mm lens Nikon camera, and later said 'I didn't crop my photos. They are full frame natural light.' He turned to photography in the 1960s 'because the reality of the things going on around me was more interesting than the fantasies of the world I worked in.'

Hopper's photographs capture the Counter Culture and other historical, social and political events during the sixties. He carried his camera with him everywhere around his neck during this period.

The Sixties Counter Culture was inspired by Herbert Marcuse's One-Dimensional Man, Wilhelm Reich, Norman O Brown's Life Against Death, Aldous Huxley's The Doors of Perception, and Alan Watts' The Joyous Cosmology. Foucault described the era as a 'surge of libido modulated by the class struggle.' Hopper reminisced that 'it was an incredible moment. There was practically a revolution going on to stop the Vietnam war', and that 'I've always been political... I was with Martin Luther King and at the Free Speech Movement in Berkeley. I was a hippie. I was probably as Left as you could get without being a Communist.'

Hopper is critically acclaimed for his direction of such films as Easy Rider, The Last Movie, and Out of the Blue, and outstanding acting in films like Tracks, The American Friend, and Blue Velvet.

He was trained in Stanislavski Method acting at the LeeStrasberg Actors School. Hopper got his directing start as second unit director on the LSD film The Trip.

His 1964 photograph The Trip is a psychedelic all-seeing eye of God with a homunculus in a Stetson. Hopper photographed the Human Be-In in San Francisco in January 1967 and photographs from this include Timothy Leary, Love-In, Hippies,Flower Children,andHippie Girl Dancing. He formed a close friendship with beat poet Michael McClure at this time. Hopper would later say 'We're a new kind of human being. We're taking on more freedom and more risk. In a spiritual way, we may be the most creative generation in the last nineteen centuries.'

He photographed the Hells Angels, outlaw motorcyclists who became notorious with the filmThe Wild Angels, and publications of Hunter S Thompson's Hells Angels, and Freewheelin' Frank by Frank Reynolds and Michael McClure. The exhibition includes Hells Angels San Pedro, Hells Angel Girl, and Bruce Dern as Hells Angel from the 1966film The Wild Angels.

The defining moment of the Civil Rights movement: the 54 mile march of 4,000 people from Selma to Montgomery in Alabama led by Martin Luther King in 1965 was captured by Hopper. He later recalled that 'Marlon Brando got me involved in the march.'

He photographed the street life of Harlem and Los Angeles. His 1961 Double Standard is a quintessentially LA image complete with convertible top and traffic. Seamstress, All Night Diner, Downtown LA, Working Man, Homeless guy & belongings in pram demonstrates Hopper's humane view of those on the margins of society subject to poverty and hard work. Hopper said 'I saw myself as a political artist at the time, or rather as one aiming to express social protest.'

Hopper's photography is influenced by Aaron Siskind, Robert Capa, and Cartier-Bresson. He is in the American tradition of photographers like Dorothea Lange and Gordon Parks who were employed by the 'New Deal' Farm Security Administration in the 1930s and '40s. This was a rural rehabilitation programme to improve the lives of share-croppers, tenants, poor farmers, and included a program to purchase submarginal land and resettle farmers in group farms which was an experiment in collectivising agriculture. Hopper's photographs can be compared to Robert Frank's record of life on the road in The Americans (1958).

In the 1980s Hopper became a Republican; 'I read Thomas Jefferson, the idea of having less government, more individual freedom, is something that I liked' but in 2008 he supported Barack Obama saying his reason for not voting Republican was the selection of Sarah Palin as the Vice Presidential candidate.

Hopper's politics are essentially philosophical individualist anarchism drawing on Thomas Jefferson's belief that people needed to be vigilant against any laws that 'violates the rights of the individual' and 'that government is best which governs least.' He is also in the tradition of Emerson's 'Every actual state is corrupt. Good men must not obey the laws too well ... Wild liberty develops iron conscience. Want of liberty, by strengthening law and decorum, stupefies conscience', and Thoreau's 'action from principle', and 'government is best which governs not at all' in Civil Disobedience. Both Gandhi, and Martin Luther King cite the huge influence of Thoreau's essay.

Ed Ruscha concluded 'Like me, Dennis's art grows out of alienation. Dennis always responded to city anxiety, graffiti, etchings on walls, expressing the frustrations of urban life.'

Steve Clayton