Debt slaves or wage slaves?
David Graeber replies to
our review of his book on Debt in August’s issue
Dear editors:
You may be surprised to know I have read Capital, and am familiar with the concept of primitive/original accumulation. I might suggest it is the reviewer, rather, who might wish to expand his reading list, since he is evidently unfamiliar with that strain of the Marxian tradition that has most informed my analysis of such matters: the “autonomist” or “post-workerist” strain that runs through Tronti to Cleaver to the Midnight Notes collective, Federici, Caffentzis, and de Angelis (a very different one from the more familiar Negri strain). In that tradition, “primitive accumulation” is not treated as a one-time thing that somehow teleologically prepared the way for capitalism, but rather as part of an ongoing process of the enclosure of different sorts of commons (and the creation of various forms of capitalist commons, like, currently, the US military) that has marked capitalism’s history from beginning to – hopefully its rapidly approaching – end. I actually cite my sources here in a footnote the reviewer seems to have missed. In fact he doesn’t seem to notice that my entire analysis of post-war economic cycles is based in this tradition.
What I was mainly trying to address in the section on capitalism is a question that to my knowledge no Marxist analysis has really been able to resolve: why, if capitalism is a system based on factories and free wage labor, did most of the financial institutions that we associate with it – stocks, bonds, futures trading, semi-private central banking systems, and so on – actually arise in the 17th century, long before either factories or (any significant amount of) free wage labor made an appearance. The whole idea of “merchant capitalism” which is supposed to characterize the period from roughly 1500 to 1750 (or even 1800 in most of Europe) has always been a puzzle. If capitalism is a system based on wage labor, then it wasn’t capitalism at all. But if so most bourgeois revolutions happened before capitalism had even appeared! If merchant capitalism is capitalism, then capitalism does not have to be based on wage labor, and certainly not free wage labor, at all. Claiming that merchant capitalism was capitalism because European elites were somehow trying to create a system that didn’t exist and there is no evidence they were even capable of imagining, seems absurd. The obvious answer is that capitalism is not in fact necessarily based on free wage labor contracts. Marx was, as I note in the book, effectively saying “well, let’s take a best case scenario, and imagine workers are in no sense constrained; I can show the system would still lead to impoverishment and self-destruction.” He wasn’t saying that the assumptions of the political economists were empirically true. He was just allowing them for the sake of argument. As I note many seem to have forgotten the “as if” quality of his analysis.
I find it genuinely odd that I get so many reviews that accuse me of ignorance of even the basic ABCs of Marxism, while at the same time, systematically ignore everything I actually say about Marx! Granted, the book is meant for a wide audience, and therefore avoids scholarly debates of all sorts, Marxist or otherwise. But it’s all there in the footnotes. And I do talk about Marx in the text.
As for the reviewer’s final claims that we are primarily wage slaves not debt peons: how does he know this? Because the secret to our 21st century situation lies in the correct interpretation of 19th century texts? That’s silly. Systems change. I mean, it might be true, but it’s a matter to be empirically established. A far larger percentage of Wall Street’s profits is now derived from the financial sector than from industry or commerce – that is, from the exploitation of wage laborers. Where does that profit really come from? It would be very interesting to know what percent of the average (say) American’s income is now directly expropriated by the FIRE [Finance, Insurance, Real Estate] sector, compared to what might be said to be extracted indirectly, through the wage. But the research simply hasn’t been done. Nor will it be if we can’t open up our minds a little and treat Marx’s legacy as a living tradition. It’s possible that the system is already starting to turn into something else. Or maybe it isn’t. Let’s figure it out rather than just shouting doctrine at one another.
Reply:
1. As capitalism continues, money-commodity relations are certainly spreading into yet further fields of human activity. However, whether this can be usefully seen as a continuation of the primitive accumulation of capital is another matter. Marx introduced the concept of original (generally translated as “primitive”) accumulation to answer the question of how and from where was the capital to launch the industrial revolution accumulated. Once started, as it had been by the end of the 18th century, capital accumulation became self-generating, out of the surplus value extracted from wage workers. This said, although capitalism in the form of the world market dominates the whole world, the capital/wage-labour relationship is by no means universal. It is still spreading (being spread by the state) in such places as China and India as peasants are driven off the land and obliged to work for wages in factories. So, in this respect, one of the features of Marx’s primitive accumulation is still continuing.
2. We can’t see how anyone can deny that central to Marx’s analysis of capitalism (“the capitalist mode of production”) is the capital/wage-labour relationship, whether or not they agree with this. But this is not the only feature of capitalism; it is also a market economy where goods are produced to be sold. In fact, capitalism can be defined as a system where all the elements of production, including in particular the human ability to work (labour power), are bought and sold, which only becomes general once the direct producers have been separated from the means of production, whether land or machines. This didn’t come about suddenly in one go; it developed over time. Historically, the world market – as an inter-national market – first came into being in the 16th century and then market relations spread internally within countries producing for it as there were put change the more they got involved in it. Those in control of political power in these countries faced a choice: either to try to resist the changes or to encourage them. The “European elites” were divided over the issue. Those in favour of change wanted to remove all the barriers to property ownership and production for the market inherited from feudalism. They were, or represented, the up-and-coming bourgeoisie. In the end, they got their way, especially after they won control of political power in the English Revolution in the 17th century and the American and French Revolutions in the 18th century. Whether or not they envisaged a system of production based on wage-labour eventually emerging, they were consciously aiming at the spread of market relations and of the concept of the individual free to enter into market relations with other individuals. See, for instance, C. P. Macpherson’s The Theory of Possessive Individualism, Karl Polyani’s The Great Transformation and John Gray’s more recent False Dawn. Adam Smith, the father of “Political Economy”, writing in 1776, held a labour theory of value and already recognised landless and machine-less wage workers as one of the three economic classes, alongside landowners and profit-seeking tenant farmers, involved in the market economy which it advocated should be extended.
3. Are we still “wage slaves” or are we becoming “debt peons”? This is the basic disagreement between David Graeber and us. A “debt peon” would be somebody forced to work to repay a debt, normally to their employer or landlord. This has existed historically under non-industrial conditions and still survives in some parts of the world though declining. Modern advocates of this view see people in the industrialised and urbanised parts of the world as being essentially in the same situation as they have to work to repay loans with interest to the banks who have lent them money. In other words, that they are being exploited by the banks and bankers. Is this an accurate, empirical analysis? We don’t think so.
For a start, even if you are in debt (and not everybody is, by any means) you are still obliged unless you are a rich investor (which most people aren’t) to work for a living by selling your ability to work for a wage or salary. This is still the basic situation for most people, including those in debt. The disposable income of those in debt may be reduced by having to repay a bank debt with interest, but the main source of that income is still wages.
David Graeber says that “a far larger percentage of Wall Street’s profits is now derived from the financial sector than from industry or commerce” and asks “where does that profit really come from?” Good question. It won’t be from the interest paid by workers on money they have borrowed. Some firms in the FIRE sector will be making a profit out of this, but most of the profits of this sector will have come from elsewhere. Since profits are a claim on wealth, and since wealth can only be produced by humans applying their physical and mental energies to materials that originally came from nature, this source can only be the labour of those working in the productive sector of the economy. In other words, out of the surplus value produced by wage-labour. (In fact even the interest paid by workers out of their wages will come out of their share of newly-produced wealth). So, the extraction of surplus value from productive wage-labour is still the basis of capitalism and the ultimate source of all profits. – Editors.
