Chapter V of the book The End of the Corporations
CHAPTER V FORMS
“It is a well- known fact that conquest, enslavement, robbery and murder: to make it short, violence, play a protagonist role in real life history. But in the sweet political economy idyll has reined for ever… actually, the methods of original accumulation were everything but idyllic… they would resort to the power of the state, to organised and concentrated violence in society…”.
Karl Marx. The Capital, Vol1. Chapter XXIV
In the face of the magnitude of the historic character of the current crisis of capitalism, it may be well worth while to stop and ask ourselves: Has capitalism ever been through crises of similar importance? In what way have these crises been overcome? What political and social phenomena spawned the crisis? And the other way round: what political and social phenomena did the crises produce?
In order to answer these questions it is necessary to see the current crisis from a more historical perspective and to see how the different crises and analyse how the different crises developed within their different stages and how capitalism tended to solve the contradictions that were the produce of their own development.
In this chapter we shall publicise and develop the General Law of Forms of Capitalist Accumulation. This law enables us to analyse applying the Marxist laws of accumulation of capital, the different forms that throughout the history of capitalism, emerged to accumulate the capital and what are the forms of accumulation characteristic for each stage of capitalism.
Together with the above, we shall analyse the dynamics of the Forms of accumulation the characteristic of which is the succession of phases of development and depletion linked to periods of long expansion and stagnation live throughout the history of capitalist economy.
Finally we shall see the political-social mechanisms that explain the way in which the transition from a lower Form of Accumulation to an upper form through the development of capitalism.
General Law of the forms of Capitalist Accumulation
a) The Forms of Accumulation of Capital and of Predominant Forms. Definition
The process through which capitalists accumulate means of production on one pole in order to accumulate capital and salaries workers on the other pole, in order to accumulate more capital. As Marx explained, “…the reproduction on a broader scope in order to accumulate more capital, i.e.: accumulation reproduces capitalist relationship on a broader scope: more capitalists or greater capitalists on this pole, more salaried workers on the other… Consequently, accumulation of capital is increase of proletariat… Every individual capital is a greater or lesser concentration of means of production with the corresponding command over a larger or smaller army of workers. Every accumulation becomes a means in the service of a new accumulation…” (1)
The main target of capitalism is that capitalist accumulate capital and obtain profit. The necessary precondition in order to obtain this is that the means of production and exchange are to be private property, a target achieved by the capitalists by means of a historic process that placed productive, commercial firms under their control while expropriating the remaining social classes.
Therefore we can define Forms of Accumulation as such firms, property of the capitalist class, to accumulate capital at a determined period of time. Capitalists never used. Capitalists never used a sole form of accumulation. There have always been different forms of accumulation i.e.: different commercial, productive and financial firms acted in order to accumulate capital and they, in turn, reflect the different sectors of capitalist class. Capitalism finally imposed its rule as the dominating mode of production between the XVIII and XIX centuries, when bourgeoisie seized power in the most important countries and stamped out the remains of the feudal domination in the state. In the historic periods, when capitalism was still an embryonic element and not the dominating mode of production, as well as in the days of predominance of capitalism different Forms of Capitalist Accumulation coexisted.
These Forms of Accumulation developed in an uneven and combined manner hinging round a predominant Form of Accumulation that was the driving and structuring engine of economy. That is to say, when diverse Forms of Accumulation act simultaneously and at different levels of development, they hinge round the Predominant Form of accumulation and interplay with the Predominant Form of accumulation that constitutes the axis on which the entire development of capitalism is ordered.
Together with the concept of Forms of Accumulation, the concepts of the Regime of Accumulation, Poles of Accumulation and Axis of Accumulation are parts of the General Law of Forms of Accumulation, whose respective definitions are to be found in Chapter III. The predominant Forms of Capitalist Accumulation have been as follows:
A- At and before the stage of the original accumulation (from X to XVIII century)
Pre-industrial forms of Productive accumulation
Forms of Financial Accumulation
Commercial Nations (from X century to XV cen.)
Bankers and Usury (XIV to XVII centuries)
Factories ( XIV to XV century )
Manufactures ( XVI to XVIII century)
Business Enterprises ( XVII to XVIII century )
B- The apogee of capitalism (from XVIII century to XIX)
Forms of Industrial Accumulations
Forms of Financial Accumulation
Industry (XVIII and XIX centuries)
Banks and Credit (XVIII and XIX centuries)
C- The stage of decadence of capitalism (XIX century up to XXI century)
Merger of the Productive and Financial Accumulations
Late XIX and early XX centuries
XX century (between 1945 and the 80s)
Late XX century up to XXI
We shall now work out a historical analysis of the different Predominant Forms of Accumulation in the different stages of capitalism,
b) Forms of Accumulation specific to the stage of original accumulation
The first an embryonic Forms of Capitalist Accumulation began to surface between the V century and XIV century, even before the beginning of the capitalist mode of production, when the feudal mode of production still prevailed and it coexisted with the diverse modes of production and barbarian, Asiatic and even slave holder social formations.
The original or primeval stage of capitalism is the one when the bases for the development of capitalist production were historically established. In the early years of that stage, feudal relations of production existed in Europe and the vast majority of the population were owners of their own means of production and subsistence be that the small properties of the peasants or the great properties of the nobles.
During the stage of Primeval Accumulation, capitalists began to expropriate the nobles, the peasants and even sectors of capitalists. And were causing a cleavage between the producers and the means of production of which they were the owners. This spawned two phenomena: on the one hand, means of production became goods and capital the price of which was determined at the market. On the other hand the working class cropped up, that is to say the dispossessed workers, whose labour also is a commodity the price of which is determined at the market.
This is the way Marx explains it, “therefore, the process that creates the relation of the capital can be nothing but the process of a split between the worker and the property of his labour conditions, a process that, on the other hand, transforms the means of production and social subsistence into capital and, on the other hand, transforms direct producers into salaried workers. The so-called original accumulation is more than just a historic process of split between the producer and the means of production. It looks like “original” because it configures the prehistory of capital and the mode of production that corresponds to it.” (2)
The stage of the capitalist primitive accumulation affected the great rural masses more than anybody else for they were evicted from the land while traditional forms and rights of access to means of production, to natural resources, to communal rights, to pasturelands, of open countryside and so on. Between the late XV century and early XVI century, feudal retinues were dissolved in England due to violent eviction of peasants and the usurpation of communal lands by the noble lords who transformed them into pastures for cattle.
The second wave of expropriations was between the XVII and XVIII centuries when ecclesiastic possessions were expropriated and distributed out to the oligarchy and the peasants dwelling there were evicted. The process of the Primitive Capitalist Accumulation had some development also in the process of colonisation of all the remaining nations and continents as an outcome of the geographic discoveries in the XV and XVI centuries. This process led to ruthless annihilation of pre-capitalist civilisations and modes of production in America, Asia, Africa and Oceania and this made the expropriation of millions indigenous peoples and peoples that lived in savagery, barbarism or Asian civilisations.
The following Forms of Accumulation of Capital developed between the X and the XVIII centuries:
Trading Nations; Forms of Accumulation of the trading bourgeoisie
Trading nations or maritime republics that cropped up between the X and the III centuries were Forms of Capitalist Accumulation were Forms of Capitalist Accumulation whose goal was to accumulate capital practising trade based on the dominion over one or more maritime routes. These trading nations constituted an embryonic accumulation regime, with the maritime industry as the pole of accumulation. The Mediterranean was the axis of accumulation and was based on a number of cities located on what today is the territory of Italy: Amalfi, Pisa, Gaeta, Ancona, Bari, Ragusa, Noli, etc., and the powers of those days: Genoa and Venice.
Another regime of accumulation of the Trading Nations was located on the shores of the Baltic sea, with their axis including the cities of north of Germany and German trading communities round the Baltic Sea: Netherlands, Norway, Sweden, England, Poland, Russia, part of Finland and Denmark as well as regions where today Estonia and Latvia are to be found. This federation of cities constituted a great Nation known as Hanseatic League or Hansain the mid and late XII century and the early XIII with numerous cities in the north of Europe and surrounding the Baltic Sea: Lübeck in 1158, Rostock, Wismar, Stralsund, Greifswald, Stettin, Danzig, Ebbing, etc.
The name Trading Nations comes from the fact that they were enterprise-nations inasmuch as they enjoyed broad independence from the feudal authorities and an autochthonous. One or more families controlled the nation and this was what gave them the character of oligarchic republics where each one of them had its own currency, its own army, fleet, commercial colonies known as fundagos and “consuls of nations” who would watch over the commercial interests of their respective cities in the Mediterranean ports.
This is the way Engels explained it, “The Venetians and the Genoese in the port of Alexandria or in Constantinople, each “nation” in his own fondango residence, inn, deposit, apart from headquarters constituted complete commercial associations”. The trading nations begin their phase of emerging accompanying the expansion of European economy that was blooming in the midst of the apogee of the feudal mode of production in the X century.
The great surpluses and wealth of the nobles of Normandy, Burgundy, Castile, Aragon, Genoa and Venice, etc, allowed for an important commercial circulation over the Baltic Sea as well as over the Mediterranean, and the emergence of fairs. The most important of them was Champagne on the territory of what today is France, and they acted as a commercial land bridge between the two seas. The Hansa was selling ships and even reached the Mediterranean and Italy.
The Trading Nations emerged from the very bowels of the Feudal system and from previous social formations, such as primitive communism. This is how Frederic Engels explains it, “the medieval merchant was in no way an individualist for he was essentially a member of some association as were all his contemporaries. In the countryside, the brand association predominated. Each peasant had his plot of land – originally of the same size… and consequently an equal share in the rights of the joint brand… And the same goes in no lesser degree for commercial associations that spawned the overseas trading… It is here that for the first time we come across profit and rate of profit… in the great commercial societies we can take it for granted that profit is distributed pro rata proportionately to the capital invested, exactly the same as the rights of the brand are distributed proportionately to the justified participation in the plot of land… Consequently, the rate of profit is the same for all.” (3)
Trading Nations also accumulated capital as an incipient proletariat began to develop and this is how Frederic Engels explains it, “Navigation, on the scale at which Italian and Hanseatic maritime republics practised it, would have been impossible without the assistance of sailors, i.e.: salaried workers (whose wage relation) could be concealed under corporate forms with profit sharing) just as impossible as it would have been for galleys to function without salaried or slave oarsmen. In practically all the cases, the guilds of the mines that originally consisted of associate workers had already become stock companies for the exploitation of the enterprise by means of salaried workers. And in the textile industry, the merchant had already started putting the small weaving masters directly in his service, providing them with yarn and making them transform it into cloth in consideration of a fixed wage… Here we can see the early budding of capitalist formation of surplus value” (4)
The Trading Nations began in the X century and achieve very high rates of profit. Just so as to be able to have a standard, let us compare the revenue of Genoa, which was one of the most important Trading Nations with France, the riches and most important monarchy in those days according to Perry Anderson, “In 1293, the maritime taxes of the port of Genoa produced three times and a half more than all the royal revenues of French monarchy” (5) The accumulated capitals were so large that they allowed the emergence and establishment of gold standard for currencies, as Perry Anderson explains it, “The maritime power of Genoa and Venice was what ensured a continuous trade surplus with Asia, a surplus that financed their return to gold… The return to gold currency in Europe in mid XIII century, with the simultaneous coinage (in 1252) of the januarius and the florin in Genoa and Florence was the resplendent symbol of commercial vitality of the cities.” (6)
The basis of economic expansion was the high rate of profit achieved by the Trading Nations and this is how Frederic Engels explains it, “This original rate of profit was necessarily very high…the business was monopolist trade with monopolist profit.” (7) The Trading Nations began an upward process to the apogee that included the XII and XIII centuries and produced an outstanding economic expansion in the embryonic regimes of accumulation that settled in the Mediterranean, the North Sea and the Baltic and was fed back with the economic apogee and the economic expansion of the feudal mode of production predominant in Europe with which they developed and combined.
The capitalists of the Trading Nations arrived at all kinds of agreements and associations of a corporative character in order to obtain jurisdictional, fiscal and customs privileges and at the same time mastery of various personal domains was achieved. During the upwards phase of Trading Nations, new exchange operations and accounting emerged, scientific discoveries were made and technologies cropped up to ensure commercial routes and to protect investments.
Seaworthy helmsmen were trained and lighthouses were built, compass was perfected and so were mathematics, astronomy, cartography and geography: all that in the service of navigational industry. Cities in danger of being raided by pirates organised their defence autonomously creating powerful navies to create bases, call ports and commercial establishments that influenced the political life tremendously. That is why, in the XI century Trading Nations took up the offensive and fought important wars against the Byzantine and Islamic maritime power and thus competed for the control of commerce with Asia, Africa and Mediterranean routes.
The Crusades allowed them to destroy the power of Islam in the Mediterranean and the Norman invasion of England put an end to the Viking incursions into the North Sea. The emerging of the rate of profit of the Trading Nations gave continuity to the equalization process of the different rates of profit a process that preceded the fall of the rate of profit and Frederic Engels explains it like that, “The equalization of these different corporative rates of profit was established by the inverse process, by competition. At the beginning, the different rates of profit (were equalised) for the different markets of the same nation… Next it was the turn for a gradual to equalize the rates of profit in the different nations that exported equal or similar good to the same markets, so quite often this or that nation would be squashed and would exit.” (8)
The excessive accumulation of capitals that occurred after the equalization of the rates of profit caused the rate of profit in the Trading Nations to slide down and this process was combined and re-fed with the general crisis of the feudal mode of production in the XIV century. The crisis of feudalism caused the collapse of consumption, ports were paralysed, the price of goods fell abruptly and bankruptcies became widespread. This spawned a real political, economic and social cataclysm known as the “crisis of XIV century” when nearly 40% of the population of Europe died.
That was the beginning of the depletion of the Trading Nations and a violent process of centralisation of capitals that led to wars for the domination over maritime routes. The depletion of Trading Nations as a Form of Accumulation, combined with the terminal crisis of the feudal mode of production caused an extremely violent process of destruction of productive forces and centralisation of capitals, the Hundred Years’ War. Together with famine and plagues, wars annihilated nations, cities entire regions. With millions dead, the Hundred Years’ War was an immense process of destruction of productive forces when capitalism was officially born.
Actually, the Hundred Years’ War a number of wars between nations that controlled European economy in those days and acted as the hinge between the feudal mode of production and the capitalist mode of production that emerged and started it stage of Original Accumulation. At the same time there were enormous peasant insurrections and of the workers of craft guilds in Florence or of the weavers in Ghent.
In the XV century, geographic discoveries accelerated the decadence of the Trading Nations, according to what Frederic Engels explained, “This process was constantly interrupted by political events while the entire Levantine commerce decayed due to the Mongolian and Turkish invasions and the great geographic-commercial discoveries carried out since 1492 did nothing but to accelerate this decadence and, later on, make it definitive.” (9)
The Trading Nations kept on with their decadence after the geographic discoveries in the XV and XVI centuries that became possible because of the technological development and the accumulation of capital achieved during the cycle of apogee and created means for their financing. But the geographic discoveries and the process of colonisation of Africa, Asia, America and Oceania were already stemming out of the beginnings of capitalist mode of production and its stage of primitive accumulation. As these continents were being colonised and that capitalist mode of production needed a longer period to surface and be consolidated, during the first centuries capitalists often implemented capitalist Forms of Accumulation and capitalist regimes, seeking support in non-capitalist relations of production.
2. Goldsmiths and silversmiths and the early Bankers. Form of Accumulation of financial bourgeoisie
Together with the Commercial Nations, another Form of Accumulation emerged: financial industry based on the first bankers and usurers. The great accumulation of capital that Trading Nations achieved, allowed for the increase of the numbers of capitalists dedicated to the industry linked to development and circulation of money, its transport, storing, insurance and loans. Because there was the danger of robbery, the practice of placing precious bullions and coins under the custody of goldsmiths, used to work with precious metals, receive and keep gold and silver coins for capitalists who had to store the profit obtained.
As this practice became more necessary, goldsmiths started charging commissions and so they were turning into bankers as they discovered when they discovered that it was not necessary to keep all the coins deposited in their vaults, so they made them circulate as loans and diverse payments while they extended receipts of deposits for the capitalists who deposited their coins and metals. The capitalist who made their deposits started using the receipts they had received from the goldsmiths to make their payments. The goldsmiths extended receipts of deposits for a higher value than that of the coins that were in their custody and in this way, the value of the money or reserve that the goldsmiths had at hand to face withdrawals in gold and silver coins represented merely a fraction of the total value or the receipts extend by them.
That is how the concept of banks of fractional reserve; goldsmiths and silversmiths were no longer mere guardians; they became bankers. The activity of the banks became primarily manifest in all those place where different kinds of currency circulated and this spawned moneychangers. The first banks cropped up in 1155 and were mainly devoted to traffic but they also accepted deposits and, by XIII century southern cities in Italy, like Siena and Florence, had built rudimentary banking centres.
In the XII century, pooled funds began to crop up as great masses of capital deposited by various capitalists who would get organised together and began to grant government borrowing to Italian cities. In Italy, these government borrowings were known as Monti, which means pool or common fund, and Bank among the Germanic peoples, which was later Italianized as Banco and the accumulation of public loans was called either Monte or Banco, which originated the use of this words for entities that accumulated capitals as deposits.
Bankers had connections with the Trading Nations and when smaller enterprises began to mushroom in which capitalists combined commerce with the administration of money, currencies and investments. The Fugger, the Welser, the Vöhlin, the Höchstetter, the Hirschvogel, etc are the great families of Berman bankers who, together with the Italians dominated the circulation of goods and money in those centuries in European economy, just as the Rostchild would do in the XIX century.
The bankers of Genoa, Florence, Venice, the Hansa as well as those from Castile, Aragon and Portugal financed the ventures of geographic discoveries of XVI and XVII centuries. These discoveries were in quest not only of new routes of navigation abut also of colonisation of new ports, exploitation of new labour and extraction of precious metals to feed the accumulation of capitals that so as to build up enough accumulation of capitals so as to finance and form the basis of money in metal as well as trust funds, indispensable accumulation to back necessary investments that allowed them to launch the capitalist mode of production.
This is the way Frederick Engels explained it, “But also closer partnerships associations, with more determined targets as the Genoa Manoa that controlled the mines of alum in Phocaea in Asia Minor or on the Chios Island in XIV and XV centuries or the great commercial society of Ravensburg that since the late XIV century did business with Italy and Spain, funding branches there and the German society of the Fugger, the Welser, the Vöhlin, the Höchstetter, etc from Augsburg, or the Hirschvogel of Nuremberg and others who, with a capital of 66000 ducats and three ships who, with a capital participated in a Portuguese expedition to India between 1550-1506 and made net profit 150% according to some and 175% according to others.” (10)
Transition from Trading Nations to Factories
The first form of predominant capitalist accumulation, the Trading Nations, began the emerging phase after the Crusades starting in X Century when the allied trading powers launched numerous armed expeditions against the Muslim, the oriental Christians, Russian and Byzantine, the movement of the Cathars in the south of France and the Jews. It is estimated that the diverse slaughters and wars carried out by the crusaders caused five million deaths throughout three centuries. The process of destruction of productive forces unleashed by the struggle against the Byzantines and the Muslim allowed them to become dominant in the Mediterranean and to reach the peak of the boom phase and to control commercial exchange in the Mediterranean and with the East. During the IV Crusade (1202-1204) Venice and Genoa took over the commercially most important maritime towns of the Byzantine Empire and became the riches states in Europe.
When the phase of depletion of Trading Nations began, a violent process of destruction of productive forces broke out with the wars of Pisa and Genoa in 1284, the wars of Saint Sabas in 1252 between Genoa and Venice, the war of Chioggia in 1372, the wars with the Kingdom of Hungary in 1352 apart from the wars against the Germanic Empire and the wars against the Popedom among others, while 1362 wars of the Hansa broke out against Denmark.
But the most important process of destruction of productive forces took place during the Hundred Years War, between the mid XIV century and mid XV, a period that was the hinge between the feudal mode of production and the capitalist one. The vicious destruction of productive forces that constituted the crisis of the XIV gave room for headway in these forms of accumulation and the process of centralisation of capitals and caused the transition of the Trading Nations to a superior for of Accumulation i.e.: Factories.
The destruction of productive forces in the Hundred Years’ War was centred geographically round France that was the most important economy in those days and the bastion of feudalism. The destruction of productive forces in the Hundred Years’ War was geographically centred on France that was the most important economy of those days and a bastion of feudalism. Ravaged villages, millions on the death toll, the development of technology in the industry to serve wars caused serious alterations in the prices at the market of products suffering unprecedented pressures of supply and demand. At the same time millions of peasants fought wars for their freedom and this allowed for the emerging of the first salaried workers, even if in incipient numbers.
In some cases, feudal lords had to yield to the pressures of their serfs in quest of their deliverance from serfdom but in other cases the insurrections were annihilated so the Hundred Years War implied a struggle between sectors of the dominating classes for control over the emerging industrial zones of greater economic importance such as Guyenne and Gascony.
Other wars developed similarly, among them the civil war in Normandy, The War of the Roses in England, the War between England and France, the war between France and Bourgogne, the struggle for the control over Flanders and the Netherlands, civil war in Brittany and civil wars in Castile and Aragon. In all the nations of those days, in duchies and kingdoms where wars occurred, alliances changed constantly as well as the sectors of classes whether nobles or capitalists aligned in different manners. With the development of war industry great fortunes of bankers and capitalists also cropped up financing war industry and military technology.
After the Hundred Years’ war, an important part of the nobility disappeared important centralisation of capitals occurred and bourgeoisie continued its ascent so the ascent of the world of cities based on trade, and the centres of power began to shift towards new burghs or cities where the new Forms of Accumulation, Factories, settled. During the decline of the Trading Nations, Portugal and the Kingdoms of Aragon and Castile developed enormous commercial activity with the geographic discoveries of XV century and this transformed them into powers even if as the last glow of the decaying Mediterranean capitalism.
3. Factories, A Form of Accumulation of the merchants, entrepreneurs and contractors
Factories are a Form of Accumulation that emerged in the XVI when capitalist merchants began to hire salaried workers in the cities as well as in the countryside. Merchant developed these ventures and became contractors since they found it cheaper to produce commodities in ports than to transport them one port to another and this allowed them to achieve important savings and profits far better than what they used to obtain with simple commercial activity.
According to Engels, “… there already was a rate of profit of commercial capital. What could then urge the merchants to take over the accumulative function of contractors? Only one simple thing: greater profit…” (11) Factories were based on manual work and simple cooperation, where each worker complied with a determined task without all the workers who acted on the goods grouping in the same workshop.
It is the capitalist himself who takes the goods from one place to another, for different workers to give them a different touch. In these techniques of industrial branches, such as textiles, goldsmithing or metallurgy productivity of labour was achieved as from the simple cooperation and manual work following the tradition of craftsmanship.
These Forms of Accumulation had their pole of accumulation in textile industry and mining and constituted a regime of accumulation in which the emerging industries as factories combined production and distribution with Trading Nations. The axis of accumulation was the tripod constituted by Normandy, England and the Netherlands on the Channel and the North Sea. It was precisely this geographic zone, together with France, what constituted the epicentre of the violent process of destruction of productive forces that the Hundred Years’ War implied when the dominating classes disputed the control over these incipient new industries.
The Hundred Years´ War expressed the emerging of a dynamic regime of accumulation as an alternative to the decadence of the regime of capitalist accumulation established in the Mediterranean. This is how Moreno explained it, “there is an extraordinary development of Mediterranean capitalism the decadence of which had already begun by the time America is discovered. Its discovery does nothing but to accelerate its decadence and the development of the new north-western capitalism that had already emerged and shifting towards the Mediterranean before the discovery of our continent. Mediterranean capitalism, impregnated with aristocratism and feudal forms, has a commercial character, usurious and international in opposition to the northeast of Europe that was manufacturing and national.” (12)
Factories are Forms of Accumulation where salaried labour was exploited to produce commodities and so be able to compete better with the other markets. Factories and the grouping of salaried workers is a process of exploiting salaries labour something that allowed the merchants-entrepreneurs to push the prices down so as to compete better with the other merchants who tended to adopt that form of production so as not to lose the contest for markets. Factories and the grouping of salaried workers is a process that went along 3 paths that spawned different ventures: a) privatised craftsmen’s guilds, b) domiciled rural labour and 3) privatized mining concessions. Let us analyse these three entrepreneur variants:
Privatised craftsmen’s guilds
One of the slopes that spawned the factories was the process of privatisation of craftsmen’s guilds, industries that existed in feudalism and produced small-scale for small communities, following strict norms of production determining common targets that started turning property of capitalists.
Those craftsmen guilds had a pretty rigid internal organisation on three levels: masters, journeymen and apprentices-servants. Only masters were entitled to vote statutes by which the guild is to be ruled and to appoint the prosecutors and bosses. Journeymen were entitled to living quarters, food and a salary but the apprentices-servants had very low wages and remained in that state for a lifetime.
At first, equality and solidarity were the main traits of the guilds. Conditions of contracts and of work would vary from one guild to another and as time went by, the merchant would proceed as intermediary in the activities of the exchange of goods. Later on, regular purchase of good from the small producers became habitual and the merchant would provide small producers with raw material and would lend them money and so the small producers would fall under the economic power of the merchant.
Simultaneously a process of social differentiation began inside the workshops that were dominated by the masters, who were beginning to turn into owners. This accelerated the process of drifting apart of the masters and the apprentices while the former began speed up the appropriation process until they turned the guilds into companies of their property. In turn capitalist societies emerged between commercial capitalists and craftsmen masters or the masters were expropriated by means of usury.
Regardless the manner, the guilds gradually became factories for they became enterprises with one or more capitalists as owners. In several cases, the power of the privatised guilds spread as far as control of municipal governments and in industries connected to exports, the master could much faster become capitalist and owner of the enterprise.
That is how the mediaeval craftsmanship workshops gradually disappeared and were replaced by new privatised workshops out of which the new capitalists or entrepreneurs were emerging. That is how Reyna Pastor de Togneri explains it, “handicraft corporations fall into a period of stagnation that was to last until the XVII and XVIII centuries when they vanish because they could not face up to developing capitalist forms. Organised in such a way as to increasingly benefit the masters, they will as often as not spawn new entrepreneurs.” (13)
Rural domiciled labour
Rural domiciled labour is an enterprise that crops up because capitalist merchants would hire peasant labour to produce their goods. The merchant takes goods and raw material to peasant families’ homes and the latter will do different kinds of work such as weaving, yarning, dyeing, Peasant families combine the work they do for the capitalist and their own tasks in the fields until one by one, they fall under the control of the capitalist either out of need or because they become indebted to him.
That is how Reyna Pastor de Togneri explains it, “distributed the premium among the peasants” and so acquired part of their workforce… the entrepreneurs controlled the diverse processes of production and took the yarn to the fuller mills, to the dyer’s, etc. Due to this system, the peasant gradually turns into an industrial home worker who produces for the market and sells part of his workforce to the entrepreneur.” (14)
Continue reading in Chapter V of The End of the Corporations