According to Reyna Pastor de Togneri, rural domiciled labour was the most important enterprise of the Factories, “the importance of rural domiciled industries constituted the transitional form accrued as time went by; because of the number of employed workers, because of the amount of the production and because of the geographic area it occupies, this activity was doomed to accelerate the original accumulation of capital in the hands of merchants and bankers and also to be the one that would begin the transformations among the peasants… for it drove them away form the land, deprived them of their means of production and forced them to do routine work for long workdays and gradually turned them into salaried workers.” (15)

 

England, the place where nobility emerged much weaker after the Hundred Years´ War, where textile industry had great headway because of sheep rearing as well as because of the climate with great  waterfalls that allowed for the building of mills more fitted to drapery production, was the epicentre of rural domiciled labour. That was where ventures flourished that began to proletarianize masses of peasants and the merchants as well as the commercial capitalists could grab hold of the craftsmanship workshops much faster.

 

1. Privatisation of mining concessions

Following a process similar to the one that the craftsmanship guilds had been through, mining concessions were appropriated by capitalists, masters’ turned-entrepreneurs, merchants trafficking metals and coins and purchasers of tin. Mining concessions were communities that signed up contracts with feudal authorities, charged a reward for the exploitation of mines and exploitation of metals and, the same as the craftsmen’s guilds; they had rules that imposed equality of the members.

 

But, as Perry Anderson explains, mining was struck by a serious crisis in the XIV century, “extraction of silver to which the entire urban and monetary sectors of feudal economy was connected ceased to be practicable or cost effective in the main mining zones of Central Europe because there was no way of opening deeper pits or of refining the more impure minerals… scarcity of metals caused repeated cases of debasement of the currency in one country after the other and consequently inflation rampant.” (16)

 

The crisis of mining exploitation together with the need for commerce to establish currencies led to increasing need of the capitalist merchants to take over mining industries and even to expand them to newly discovered and colonised territories as in the case of America, where the instauration of the system of Mita ([1]) implied enslaving tribes so far living in primitive communism.

 

The appropriation of mining concessions, the same as the appropriation of the craftsmen’s workshops by capitalist or process of their privatisation, was part of the stage of the primitive capitalist accumulation or process of privatisations for it was part of the expropriation that capitalists were carrying out on the remaining social classes. In this way, the development of various industrial branches and allowed for an incipient process of development of the working class for workshops and mining settlements mushroomed and where labour force salaried.

 

Conclusions on Factories

 

Factories started emerging in the later part of the XIV. They reached their pinnacle in late XV; this gave room for expansion of economy until early XVI. Privatised craftsmen’s guilds as well as the domiciled rural labour and the privatised mining concessions combined at that time with the budding Forms of Accumulation such as Trading Nations, banks and usury apart from the decaying feudal production.

 

Factories means headway in the centralisation and accumulation of capital and this was expressed in the importance of cities such as Flanders in textile and mining industries. But in the early XVI century, factories began their phase of depletion, economy once more became stagnant and a new violent process of destruction of productive forces occurred with the strongest points in the 80 Years’ War with epicentre in Flanders and the Dutch States in mid XVI.

 

However, the depletion of the Factories expressed not only the contradictions coming from the capitalist development, such as the levelling and falling profit rate as happened with the Trading Nations. The depletion of Factories combined economic elements with political elements as their development has been seriously limited by the existence of nobility in power, unlike the case of Trading Nations that thrived in cities, where the bourgeoisie were in power.

 

Factories are enterprises the development of which challenged the social structure of  feudalism, clashed against it and drowned in it. Bourgeoisie had to charge against the institutions that supported the feudal order and against the Catholic Church in order to be able to pass to a Superior Form of Accumulation. Wars combined the struggle for the centralisation of capitals and the struggle for power in the nations that nobility controlled and this gave Factory an unstable and transitional character.

 

Factories were not a solid Form of Accumulation as the Trading Nations were; they were rather transitional between the Medieval cottage industries that by mid XVI century were developing a crisis and the capitalist manufacturing that emerge by mid XVI century. According to Alberto J. Plá, “the qualitative leap from craftsmanship to manufacture is not simple and has an intermediate stage: that of domiciled work. But the process is slow and actually it develops by successive stages. For long periods of time, old and new forms of production coexist.” (17)

 

For nearly two centuries, Factories as industrial ventures that begin to have bourgeois owners at the steering wheel were a fundamental component of European economy and even if they were transitional enterprises, they were vital for the development of the mode of capitalist production during the stage of primitive accumulation.

 

Transition from Factories to Manufactures

 

During the Hundred Years’ Wars important changes in military industry took place: feudal knights were overridden and first professional armies appeared not joined by pact of allegiance with their lords but paid by kings and bankers and the development of new military technology. The army and the king constituted the pillar of a new regime in a feudal state. Absolute monarchy and the challenge of economic, social and political power of the nobles allowed for slow headway towards benefitting the bourgeoisie that the kings encouraged.

 

Even if most of the population was still peasant, the economic impulse and the news no longer came from the castle or the monastery but from the cities, epicentre of the development of Factories. When they started the phase of depletion, a violent process of destruction of productive forces began that allowed for a new centralisation of capitals and development of manufactures.

 

This violent development of productive forces had its epicentre in the 80 Years’ War, a complex of wars centred round the struggles of the protestant princes of Germany and the Netherlands that reflected the ascent of the bourgeoisie against the nobles of France and Spain, the strongest power in Europe in those days dominated by the nobles of Habsburg.

 

The movement of the Lutheran Reform led the process of confiscations of lands that used to belong to the Church and that was vital for the development of the textile industry. All the plot of the 80 Years’ War was a set of eight different wars that took place between 1562 and 1648 and included wars of Catholics and Calvinists when the Seventeen Provinces of the Netherlands fought against their sovereign, the king of Spain, Carlos V. Those 17 provinces sought their independence from Carlos V and Spain.

 

The rebellion of the monarchs of the Protestants was headed by Martin Luther and Calvin, but the process of destruction of the productive forces was very violent. The nobility repressed the Protestants brutally: they were persecuted and executed with great cruelty. Among those executed there were the top leader of this radical reform, Thomas Müntzer and the Spaniard Miguel Servet. After 80 years of vicious confrontations, destruction of cities and towns and millions mortal victims, the war ended with the triumph of Holland and gave room to the centralisation of capitals and that was where the United Provinces came from and achieved their independence and the bourgeoisie began their ascent and imposed a state that was modern for those days and had a Parliament with chosen representatives in all the provinces.

 

In the XVII century, the United Provinces, part of what today we call Holland and Belgium, emerged triumphant and prevailed as a world power and that turned them into one of the world centres of development of manufacturing industry together with their powerful navy and merchant fleet, This zone of Europe lived an important economic and cultural ascent as the produce of their development and expansion of Manufactures, Forms of Accumulation that were the outcome of thriving industrial development that Flanders and geographic areas comprised in the Netherlands have been enjoying since the Middle Ages, but they could clear the path as a result of the violent process of destruction of productive forces that the 80 Years´ War implied.

 

Another process of destruction of productive forces that cleared the path of Factories towards Manufactures as predominant Form of Accumulation was the annihilation of popular insurrections taking place between XIV and XV centuries due to the generalised economic an political crisis of the governments that launched vicious measures against the masses.

 

The most terrible measures were the Labour Laws that were passed in practically the entire Europe limiting the increases of wages and generalised taxes that triggered of revolts like one in maritime Flanders (123-1327) and urban Flanders (1338-1380), the French “Jacquerie” (1358), the revolution of the Ciompi in Florence (1378), the insurrection of English Tylerists or the Peasants’ Revolt (1381), the insurrection of Ghent (1372 - 1382), Hussite insurrection in the Kingdom of Hungary-Bohemia (1408 -1415), the Calabrian Insurrection (1469 -1475) and the remensa movement in Spain (1462 -1484), just top mention a few. All these insurrections and revolutions were defeated.

 

Only the beginning of the revolutionary process that allowed for the development of the Helvetic Confederation (1290-1351) could break away from this general logic of defeat. All this enormous process was simultaneous to the beginning of expropriation and genocide of millions of the native tribes, who lived in primitive communism or in Asiatic societies in America, Asia, Oceania and Africa.

 

4. Manufacturing – Form of accumulation of the manufacturing bourgeoisie

 

Manufacturing surfaces in the XVI century as the Form of Accumulation in which the capitalist groups workers in a workshop or establishment and manual work is based on the division of labour between salaried labour which exceeds simple cooperation that belongs to Factories. Each one of these workers specialises in one or two determined operations; this accrues the productivity of labour, exploitation of workers and produces cheaper commodities, which allows greater accumulation of capital and profits.

 

In manufacturing, the division of labour makes a worker achieve greater expertise, but he is no longer the producer of an accomplished commodity and so his dependence on the capitalist acquires a new and steadier character. According to Marx, “it consists in gathering workers belonging to different and independent crafts, who have to work on a product until its definite end working under the orders of a single capitalist… And as for the characteristic form… it prevails during the manufacturing period proper, which in very general lines lasts from mid XVI until the last third of XVIII.” (18)

 

There are two kinds of manufacture: the heterogeneous and the organic. We have the heterogeneous variety when we have a commodity consisting of a number of partial products that can be produced, independently and even in different workshops, and then be assembled and combined; that is the case of clocks, for example. In contrast to that, workers of different specialities are concentrated and they carry out the entire process of production up to the end and so create a determined type of commodity. Organic manufacture allows the articles to go through a series of processes, through a number of specialised workers and that the diverse phases of the process of production that used to be successive will now become simultaneous.

 

This allowed for more goods to be finished at the same time and created the premises for great industrial production, contributed for the subsequent division of labour and created the premises for the great industrial production, up to a great extent it simplified many operations, perfected the tools and prepared the means to pass on to machine production. Manufacture favoured concentration of means of production in the hands of capitalists and meant ruin for most of the craftsmen. But even though labour division in manufacturing made capitalist production of good accrue and that social work performance should grow visibly, Manufacturing did not engulf the entire social production.

 

The contrary is true. An immense number of small industrial enterprises still coexisted and that was the characteristic feature of the manufacturing period of capitalism that many Manufacturers combined their production with Factories as did the domiciled rural labour and the lingering medieval craftsmen’s workshops.

 

The role of the State in the development of Manufacturing                                    

 

State had an important role in the development of Manufacturing as can be seen in the example of France, where home market and exporting goods for markets that was known as mercantilism was the policy of Minister Colbert and Luis XIV in France. This was due to the fact that the emergence of broader home markets and a colossal growth of overseas markets produced by geographic discoveries caused extraordinary increase of the demand for goods that the development of production in those days could not satisfy.

 

Manufacture went hand-in-hand with the development of absolutist regimes in the feudal state, increasingly based on the bureaucratic state machinery, the army and the whole crowd of officials hinging round centralised and increasingly absolute power of the king. The development of the new Forms of Accumulation required from these more and more antidemocratic, brutally repressing not only of the conquered civilisations but also of the small production and the new exploited of Europe.

 

Viciously repressive institutions such as the Inquisition, witch hunts, liquidation and persecution of oppositionists, accusing of heresy any scientist or person who would reject the idea of God or of the divine authority of the King, even if these absolutist regimes conflicted with the bourgeoisie that had to impose their own state and institutions that would allow the development of their economic interests.

 

The European countries that best developed Manufacturing were England, France, Netherlands and Switzerland. In the colonised, the states established mining and industrial manufactures, as in the case of the mitas, the missions and the Encomienda ([2]) base on salaried work and slavery of the tribes and still living in primitive communism. There were also great extensions of land where work was done by tribes captured in Africa where they had been living so far and so Manufacturing was developed in the India.

 

At that time, the process of destruction of productive forces that led to manufacture consisted in veritable genocide. There is no agreement among researchers as to the numbers of Indians killed in America between the XVI and XVIII centuries but the toll can be considered as between 50 and 90 million. The system of enterprises known as encomiendas in Spain, where the Indian was supposed to be receiving a salary for his work consisted of a brutal process of exploitation tat wound up by enslaving most of the Indians who worked there.

 

Neither do researcher reach any agreement regarding the numbers of men and women captured to be sold as slaves by the XVII century in the phase of depletion of the Manufacturing, but the estimates hesitate at about 60 million Indians enslaved and distributed in 24 million in America, 12 million in Asia and 7 million in Europe while about 17 million perished during the voyages.    

       

 

This was the fate of the tribes of primitive communist tribes annihilated by the armies and navies of European states and monarchies. In Europe, the consolidation of absolutist states was based on the development of mercenary armies with great activity during the 90 Years’ War between Spain and Holland, consisting of impoverished and displaced poor noblemen, together with dispossessed peasants and craftsmen who found a job in the army.

 

The hedging in of lands have been accelerating the expropriation of the peasants and caused a spectacular increase of the numbers of poor and tramps. The great capitalist magnates invested great amounts of money in financing wars, invasions and the development of military technology to broaden markets. The developments of Manufactures allowed to a colossal process of extraction of metals coming from the American continent.

 

Phases of emerging, rise and depletion of the Manufactures

 

The phase of emerging of Manufactures allowed for the application of intensive labour in the mines on the American continent and this allowed for a constant flow of precious metals and an increase of money reserves in Europe, which multiplied by four between the XVI and XVII. The silver extracted from the American continent between 1530 and 1650 reached 11 600 tons, that means, an annual average of 96 500 kg a year and as for gold, the amount extracted during XVI century was 153 561 kg, very important amount by XVI century standards.

 

This produced an increase of the amount of money in circulation for bankers used these reserves to develop emission of securities, papers and every kind of fictitious capital. With the boom phase of Manufactures, economy began to expand and European population accrued, overcoming the serious demographic crisis that had begun after the Hundred Years’ Wars when Europe suffered such diminishing of population that the cost of labour and salaries soared because there was no available labour.

 

The boom of Manufacturing has also allowed an agrarian expansion and recovery of mining activity. The slow recovery of population increased nearing XVII in 2/3, boosted the demand for food and all kinds of goods. A regime of accumulation was established with a pole of accumulation in the textile and mining industries. After the 80 Years’ War when Holland defeated Spain, the regime of accumulation of the Manufacture established the axis of accumulation in Holland and England.

 

By the XVII century, Manufacturing began the stage of depletion and this became manifest in the serious crises that crisis that erupted in all the economies as an outcome of the levelling and then the fall of the profit rate in Manufacturing, according to Engels, “… it always allows the manufacturer to produce at a lower cost than his outfashioned competitor, the craftsman… the same process is repeated: the surplus value he grabbed allows the manufacturing capitalist to sell not so expensive as his competitors until the generalisation of the new mode of production that spawns a new levelling.” (19)

 

The depletion of Manufacturing as a For of Accumulation caused a violent process of destruction of productive forces in the European countries as well as in the colonies. In Europe, the war between Holland and England broke out and that defined the predominance of England over Holland. This war was combined with the genocide in Africa, with the War of the Baltic and the civil war in England that culminated with the English Revolution led by Oliver Cromwell. With the bourgeoisie in power, England led the transition from a depleted Form of Accumulation, Manufacturing, to a superior one, Industry.

 

Manufacturing allowed great extraction of precious metals developed by Spain and, at the same time, it relied on this fabulous accumulation of capital for expansion in England and Holland. This is how Moreno explained it, “… If today, knowing everything that we already know, we had to write a course on Marxist political economy, it would be quite a bit more complex, richer… I would begin by saying that the process of original accumulation was a process not essentially English even if its centre was in England… The base of English original accumulation was not given by the proletariat but by raiding Spanish galleons. A great raid that fixed it all… they re-founded English capitalism with all this fabulous mass of surplus value that came from Latin America from the non-proletarian exploitation, from the Indians and the slaves.” (20)

 

The great mass of accumulated capital as precious material originated the great inflation of XVI century. It was studied by Hamilton and caused a great debate among economists and historians. It was called the “revolution of the prices” and was an inflationary process that took place in Europe in the XVI century, a process during which prices grew six-fold in 100 years. The XVI century was the outcome of 2 simultaneous processes: on the one hand, a fabulous mass of capital accumulated one of the most important in the history of capitalism.

 

This mass of capitals that accumulated consisted of the precious materials coming from America and the fictitious capital that rotated at terrific speed developed by the bankers in order to finance wars fleets, armies and the economic activity in general. But while this process was developing swiftly, the transition of Factories to Manufacturing was still in its infancy. i.e.: industrial production was still very poor and so was the development of the proletariat.

 

In the XVI century, the increase in the prices expressed an aspect of the Law of Value because the heaps of over-accumulated money needed valorising by means of human labour in the capitalist sense of the word. As manufacturing thrived, inflation of the prices began to dwindle following the accruing of salaried labour in Europe combined with the brutal exploitation of human labour accomplished by the manufacturing firms established on colonised continents where, even if there was salaried work, exploitation was based up to a great extent on slave labour. But this unevenness between the strong accumulation of capital based on exploitation of precious materials and the weakness of industrial development also caused the emergence of speculative bubbles in capitalism, ancestors of the speculative bubbles we can see today.

 

The surplus accumulation of fictitious capital was, in its turn, the base for inflation. States had to get deeply indebted in order to boost the armies and enterprises intended to consolidate Manufacturing. This need for the states and firms to obtain loans, led bankers to issue securities and debt papers that would finance the plans for commercial expansion. This impulse of papers, titles and loans of every kind boosted inflation by the state or “inflation of Benefits”, as Hamilton called it. Speculative bubbles like the one in Spain in 1557 and the one Tulip in Holland in 1634.

 

The “inflation of benefits” allowed for wages to be pushed down for they were quite high due to the lack of population after the War of the Hundred Years, but now wages grew no more for labour was abundant as the population accrued. IN this way, ensuring the general dwindling wages, capitalists could exploit human labour with the development of Manufacturing.

 

That is to say, the great inflation of the XVI is very similar to the great inflation developed before and during the globalisation regime between the XX and XXI centuries only expressing two diametrically opposed stage of capitalism. If the “great inflation of the XVII century” was part of the stage of birth of capitalism and expressed the first steps along the path of valorisation of capital developing production, the “great inflation of the XXI century” expresses its decadence and the increasing incapacity of capitalism to valorise capital by developing production.

 

5.  Commercial Ventures – colonising bourgeoisie’s Form of Accumulation

 

Commercial ventures are a Form of Accumulation constituted by societies of investors that achieve profit based on control of trade and exploitation of labour in the discovered colonies. From this point of view they are a more developed version of Trading Nations, but in this case, the Commercial ventures acted as a veritable state and government, carried out investments, developed manufacture and exploited local labour force and this allowed them to obtain enormous profit. These ventures were: The British Company of the East Indies, founded in 1600, The Dutch Company of the West Indies of 1602, The Danish Company of Eastern Indies of 1664, The Swedish Company of Eastern Indies, founded in 1731 and the Oostende Company. They were all founded by influential businessmen who would obtain the Royal Charter and exclusive permits to engage in trade with colonies for long periods of time.

 

The Commercial Ventures and Manufacturing developed in a joint and combined manner between XVI and XV centuries. As soon as the companies arrived at these colonies, they built the first manufacturing ventures. For example, The British Company of Eastern Indies had 23 factories in India and their profit was so great that they had to bribe kings and officials to prevent other ventures from landing and so be able to control the monopoly of economic activity in the zone. Great profits caused such great surplus accumulation of capital that in 1730, they spawned a speculative bubble of the South Sea Company in England.

 

These Companies were commercial ventures but they were also entitled to coin money, legislate, choose rulers and form armies of their own. For example, in 1670, King Charles II entitled the British Company of Eastern Indies to captain armies and form alliances, declare war or establish peace and exercise jurisdiction both civil and military within their operational territory. In 1689, the Company was practically a state inside India that administered Bombay, Madras and Bengal and possessed powerful military force. After the triumph over France, the British Company of Eastern Indies consolidated the monopoly of trade in India and went as far as controlling a fifth part of world’s population while the Dutch Company of Eastern Indies engulfed the entire Indonesian archipelago.

 

These forms of accumulation began in the early XVII century and by the end of the century the Commercial Ventures had started their process of depletion caused not only by the fall of the rate of profit but also and fundamentally due to the process of rebellion of the peoples against the imperial and colonialist oppression that put an end to the exploitation of the Companies. In India there was a massive revolt and popular revolution that in 1857 was called The Sepoy Mutiny and led to the dissolution of the most important of all those undertakings: The East Indies Company.

 

Transition from Manufacturing to Industry

 

When manufacturing was depleted, a violent process of destruction of productive forces through a complex of wars that included the War of the Thirty Years that occurred between 1618 and 1648 and the French-Spanish between 1635 and 1659, the wars between England and Holland between 1649 and 1660 and the Civil War in England, the latter actually was a deep revolutionary process in which bourgeoisie seized power in England and imposed a parliamentary political regime following the Dutch model.

 

The centre of all the conflagrations was the battle for the control of the manufacturing industry in Europe with epicentre in Holland-England and the manufacture established in the colonies. But there were also the wars fought by the Trading Ventures and the Anglo-Dutch Wars as well as the civil wars in England that were also part of the process of expropriating pre-capitalist social classes that was so characteristic of the process of Original Accumulation  of capitalism.

 

The process of expropriation engulfed the primitive tribes from the colonies living in original communism or Asiatic societies apart from the expropriation of peasants, sectors of nobility and even other sectors of bourgeoisie in continental Europe as well as in Wales, Scotland and Ireland. The War of the Thirty Years was fought between 1618 and 1648, mainly in the Germanic Holy Roman Empire, i.e.: what today is German territory in which most of the European powers of those days took part in order to grab hold of German and Italian enterprises  developed by the Hansa and Italy an the flourishing industries of both regions, apart from a serious clash between the nobility and the bourgeoisie in ascent and both continued their struggle for power.

 

Mercenaries were employed as a general rule in this war and the devastation of entire territories that were depleted by armies in need of supplies. The constant episodes of famine and epidemics decimated the civilian population of the German states and – up to a lesser degree – of the Netherlands and of Italy and led many of the implied powers to ruin. During those years the population of the Holy Empire was reduced in 30%.

 

In Brandenburg it was reduced by 50% and in some other regions to two thirds. Masculine population of Germany was reduced to half. In the Czech countries a third part of the population perished during the war as an outcome of famine, diseases and massive expulsion of Protestant Czechs. During that war, the Swedish armies alone destroyed 2000 castles, 18 000 villages, 15000 towns in Germany. The wars between England and Holland In the years between 1652 and 1666 involved all the economic powers of those days, such as France, Sweden, Spain, etc and ended in the defeat and decline of the predominance of Holland. The development of these wars allowed for a superior centralisation of capitals and for world supremacy of England that carried out the most important industrial revolution.

 

Both, England and Holland were commercial power with enormous fleets that dominated world commerce. But even if capitalism was going through the final stage of the original accumulation and the commercial capital still prevailed, it was these territories that were in the vanguard of the development of manufacturing and later on of Industry as Forms of accumulation that inaugurate the industrial state and the apogee of capitalism.

 

Based on the fabulous capital achieved through colonial exploitation and domination of the seas, Holland but above all England, could boost and finance the scientific discoveries to incorporate technology and new machines that gradually started displacing Manufacturing and initiated Industry. The booming development of industry was to drive England to displace Holland as a world power but at the cost of a brutal confrontation between the two powers and this implied enormous development of destructive forces.

 

The first Anglo-Dutch war took place between 1652 and 1654; the second was between 1665 and 1667 and ended with Dutch victories in the battle of the Four Days and Medway and the Third Anglo Dutch war between 1672 and 1674 and a front in which England joined France against Holland. The civil wars in England developed between 1642 and 1689. The first civil war in the years1642-1645 was a confrontation between the parliament and the royalty where Parliament won and eliminated the Court from the Star Chamber and executed William Laud, Archbishop of Canterbury and Count Strafford, an important ally of the king.

 

During the second English civil war between 1648 and 1649, Cromwell repressed the rebellion in Wales and defeated the Scots in Preston, defeated the royalists, executed king Charles I and proclaimed English Republic. With the third English civil war, between 1649 and 1651 annihilated the royalists in Ireland and Scotland and controlled England. At the same time, wars between companies broke out, for example: the English with the Dutch and Portuguese in the zone of the Indic Ocean after which the British Company of the Western Indies consolidated the monopoly of trade in the zone.

 

• Forms of Accumulation specific to the Stage of the Apogee of Capitalism

 

Insofar as that the capitalist mode of production became dominant and definitely displaced the feudal mode of production and also insofar as the bourgeoisie was conquering the power of the state we entered the stage of the apogee of capitalist mode of production that engulfs the XVIII and XIX centuries up to early XX century. This stage began after the triumph of 3 great revolutions: the 1648 English revolution led by Oliver Cromwell, the 1776 American Revolution and the 1789 French Revolution.

Capitalism boosted the production, trade and finances sweeping away all the previous social formations and pre-capitalist modes of production and reached its zenith of its development as an economic, political and social system. At this stage of the apogee of capitalism, the predominant Forms of Accumulation are: industry in the scope of production and the Credit Banks in the scope of finances; we shall now analyze that now.

 

1. Industry: Form of Accumulation of industrial bourgeoisie      

            

Industry is the Form of Accumulation emerged in the XVIII, when the capitalist incorporates machines to the factory where he groups workers. Labour division combined with machines that replaced manual labour gave room for series production, increased productivity of labour and the exploitation of labour and consequently industry implied a leap in the process of accumulation of capital and profit. The modern salaried proletariat surfaces in industry and the capitalist mode of production is consolidated with its two fundamental social classes: the proletariat and the bourgeoisie.

 

This process began in 1735, when John Wyatt announced his spinning machine that revolutionised the textile industry. But the introduction of machines also allowed a revolution in the production and trade because it revolutionised transport and communications. In the early days of industry, the most important technological innovations were the steam machined and what was known as Spinning Jenny, related to textile industry, but hot on their heels there came other machines and technologies and were a permanent improvement of the process of production. We include all farming and countryside production as well as all the production at sea, such a fishing and raw materials are included here.

 

Even if they move in different conditions, such as the outcome of the land revenue in the case of the countryside, as industry developed, the process of expropriation of small owners and as machinery was introduced in the countryside revolutioning the entire production the entire production was finally absorbed by industry and became just another variant of the industrial Forms of Accumulation. That is how the landownership became consolidated.

 

In 1713, after the wars of the XVII century, the Utrecht Treaty consolidated the domination of England that became the axis of the accumulation and new industries cropped up, such as chemistry, electricity or car industry together with the development of new forms of energy such as gas or oil. Industry spread on to other countries such as Germany, Russia, the USA, Japan, the Netherlands and a so far unprecedented scientific revolution accrued.

 

The phase of the emergence of industry coincided with the apogee of the capitalist mode of production and this allowed for a steady expansion of economy. But the revolutionary character in the production means that industry also developed all the contradictions of capitalism much more intensively. But we shall analyse this in chapter 6.

 

During the industrial boom, the levelling of the interest rate only that now this process developed much faster. This is how Engels explained it, “…industry, that due to the endless revolution in the production increasingly reduces the costs of production of goods… on the other hand it levels the rate of profit of the different branches of commercial and industrial business reducing it to a sole general rate of profit and, due to this levelling, makes sure that industry maintains a position of strength that corresponds to it by eliminating all the obstacles that up to that moment prevented the transfer of capitals from one branch to the other.” (21)

 

In the early XIX century, industries began to enter their phase of depletion, and this unleashed a new and violent wave of wars and revolutions. Industry produced a rapid development that collided with internal customs and social formations inherited from feudalism and that is why the revolutions and civil wars that pushed bourgeoisie to power were followed by new revolutions and civil wars in which bourgeoisie eliminated internal customs, broadened the home market, imposed national frontiers and so the modern states emerged.

 

With the 1848 revolutions, modern capitalist national states emerged. These wars and revolutions were in 1848 in France, Italy, Germany, in the Austro-Hungarian Empire and the American civil war o 1862. All this process of destruction of productive forces cleared the path for a higher Form of Accumulation: monopolies, the outcome of the fact that these wars and revolutions of 1848 as well as American civil war allowed the development of the countries, national unity and home market.

 

With the emergence of countries and home market Forms of Accumulation that allowed the dominion of a branch of production within the scope of a country, monopolies, trusts and cartels to control and this spawned the entrance of capitalism into its highest and final stage of decadence, the imperialist stage.

 

2. Banks and Credit – Form of Accumulation of Financial Bourgeoisie

 

During the days of apogee of capitalism Banks and Credit developed as a Form of Accumulation of financial capital and these institutions comprise the modern banking system. Even though both had antecedents with the first Banks in Genoa and Venice with the development of the Trading Nations, are the real expression of the capitalist mode of production and turned the old demands of the bourgeoisie against usury and merchants who monopolised financial capital during the entire period of primitive accumulation.

 

Credit was born by reaction against usury, a Form of Accumulation that, together with the banks expressed the beginning of the consolidation of the mode of capitalist production. According to Marx, “The development of the credit is carried out as a reaction against usury… I means precisely the subordination of the capital that produces interest to the conditions and needs of capitalist production. According to Marx, “The development of credit occurs by reaction against usury… It means precisely subordination of interest-producing capital to the conditions and needs of capitalist mode of production… it is the starting point of the modern credit system. Credit associations, constituted in Venice and Genoa in the XII and XIV centuries, were spawned by the need of overseas trade and the wholesale trade based on it, of getting rid of the domination of the methods of aged methods of usury and monopolisers of the trade of money” (22)

 

It was precisely the dominating class of financial tycoons get busy founding banks that emit debt bonds and distribute credit while being part of the State that emerges from the functioning of the Banks and boosts their functioning. This class is born inextricably linked to the State and the state to this class of capitalists, just as Marx explained, “Even though banks as such, founded in these republics are regarded at the same time as establishments of public credit that anticipated money for the State on taxes to be collected, we must never forget that these associations the notables of the above mentioned states that the merchants who constituted these associations were at the same time the notables of the afore mentioned states and had the same interest in liberating their state from usury as in getting rid of it themselves and at the same time to assert and reinforce the submission they had with respect to the State“ (23)

 

This is the way Karl Marx explains it, “this violent attack against usury, this demand of submitting the interest producing capital to industrial capital is nothing but the harbinger of the organic creations that, in the modern banking system, establish the conditions of capitalist production: on the one hand, banks deprive usury capital of its monopoly by concentrating all the idle - dead-like - reserves and launching them on to financial market and, on the other hand, limit the monopoly of precious metals and crating credit money” (24)

 

 In 1694, six years after the revolution headed by Oliver Cromwell, Bank of England became the first officially acknowledged bank. Just as Bank of France, Bank of England did not start as a state-owned bank or as a crown enterprise; it was a private bank, controlled by the Rotschild clan, the European banking dynasty that managed the finances of England, France, Germany, Austria and Italy, together with associates Khun, Loeb, Lehman, Warburg, etc. The Bank of England was nationalised in 1946, after the end of World War II, at the beginning of the Keynesian regime; the same as Bank of France.

      

             If the industrial production revolutionised all the aspects of production and achieved an all but unprecedented mass of goods but at the same time, credit soon developed tendencies to concentration and centralisation of capitals and left thousands smaller capitals in ruins. And this allowed great capitals to expropriate lesser capitals and allowed centralisation of capitals.         

            

Credit was born as a rejection of usury, a Form of Accumulation that, together with a Charles Marx explained the role of credit, “It does not only turn into a new and powerful weapon in the competitive struggle. By means of invisible threads, it draws money resources that, in larger or smaller masses, are dispersed all over the surface of society towards the hands of individual or

associated capitalists. It is specific machinery for the concentration of capitals… credit…. A new and terrible weapon in the competitive struggle and finally becomes immense social mechanism for

centralising capitals … just as capitalist production and accumulation develop, so do competition and credit, the two most powerful tools of centralisation.” (25)

 

            The increasing centralisation of capital that credit and Banks boosted the base of the formation of monopolies, carters and trusts that cleared the path for the stage of decadence of capitalism: the imperialist stage, when financial capital began to prevail over the industrial stage.

 

            This is the way Frederic Engels explained it, “…these changes tend to concentrate all stock speculators, all the industrial and farming production, commerce as a whole as well as the means of communication and organisms of exchange so that the Stock Exchange becomes the most eminent representative of the capitalist production itself. In 1865 the Stock Exchange was still a second rate element in capitalist system… things are different today. Even since the 1866 crisis accumulation has been increasingly gaining speed…”

 

            “… There is still progressive transformation in industry in stock companies. All the branches, one after the other, yield to this fate… mining, steel and iron industry, chemical industry and textile industry… the same goes for commerce… the same within the farming scope. Banks increasingly turn into mortgage creditors. If this goes on, is possible to predict that all English and French lands will fall into the hands of the Stock Exchange. Finally, all the investments abroad are made as share…” (26)

 

C- Forms of Accumulation specific to the stage of Decadence of Capitalism

Fusion of Forms of productive and financial Accumulation

 

The Forms of Accumulation corresponding to the imperialist stage or the stage of decadence of capitalism are Monopolies, Multinationals and finally Multinational Corporations. You will find our analysis corresponding to these Forms of Accumulation in chapters III and IV, together with the analysis of the political- social mechanisms that allowed for the passage from one Form of Accumulation to the other.

 

General Conclusions  

 

The mechanism by means of which the passage from one Form of Accumulation to another, superior Form of Accumulation is through a violent process of destruction of productive forces. Marx worked out the laws of accumulation of capital that explain how this process develops from the economic point of view; what still remained how this was done in combination with the political and social factors. The process of destruction of productive forces required for the centralisation and accumulation of capital implied permanent destruction and liquidation of social classes and sectors of classes through wars and revolutions.

 

In this way, the laws that explain the passage from one Form of Accumulation to a superior one link the laws of Marxist economics to historical materialism. The mechanism of annihilation and burning of capitals that capitalism developed to solve their crises and make headway in the forms of accumulation and centralisation of capitals is explained fundamentally by the role of private property and social classes.

 

Property of means of production and exchange spawns bourgeoisie as a dominating class with the different sectors of the bourgeois class who are in permanent dispute over capitals and profits. Behind the trading nations, factories, industries, manufactures, monopolies and multinationals there is the social class that owns these different means of production and different sectors of this dominant class.

 

It is the struggle in defence private property, interests and profits what explains the reason for which capitalism evolves in different Forms of Accumulation. The different Forms of Accumulation are surpassed and transformed; for example, monopolies still exist but are surpassed and contained in the multinationals. The whole process of evolution of the forms of accumulation was gradually deposited on one another as we can see in geological layers.

 

In the development of this mechanism we can observe behind each violent process of destruction of productive forces there has always been a new centralisation of capitals that permitted a superior Form of Accumulation and a period of long expansion of capitalist economy. With the depletion, the period of expansion comes to an end and a long period of stagnation of economy and that inevitably leads to a new process of destruction of productive forces.

 

Periods of long expansion or of long stagnation have lasted for different amount of time. Sometimes they lasted for barely a decade and on other occasion they lasted for 60 or 70 years and sometimes even more than that. But these periods can be explained by the phenomenon of the emergence of a new Form of Accumulation and its rise, and that is what explain the long periods of expansion of capitalist economy.

 

On the contrary, the depletion of the Forms of Accumulation is what explains the long periods of stagnation. Two types of crises combine permanently and dialectically: the small crises, chronic, systematic, part of a regular development of capitalism with the longer crises, as we shall see in the following chapter- This happens due to the fact that regular crises happen always either in the framework of a period of stagnation or in a period of expansion. These periods are determined by the rise or stagnation of the predominant Forms of Accumulation.

 

The General Law of the Forms of Accumulation allows us understand more fully the development of the crisis of capitalism and allows us to overcome the old schemas such as the old opinion that capitalism in its apogee kept on developing productive forces for a long time and then, during its decadence, only developed destructive forces. With the General Law of the Forms of Accumulation, this scheme is definitely overcome. It is now clear that capitalism has alternated between the development of productive forces and destructive forces in all its phases and that the engine economy and of overcoming one Form of Accumulation to go to the next is the development of the destructive forces and of the war.

 

Nahuel Moreno anticipated some of these conclusions in his last courses of economy and he evidenced doubts as to the progressive character of capitalism, as to whether throughout its history, capitalism evolved in a contradictory manner with the development of productive forces. This is the way he expressed it, “I have my doubts… if capitalism has not always been a contradictory phenomenon that developed technology and annihilated nature and man and whether it is not a permanent law of capitalism… These are my personal doubts… I am terribly worried about the numbers of Indians and the numbers of African Negroes massacred by capitalism in the XVI century and XVII century; I mean… some of the estimates are lurid. Almost 90% of the native population was annihilated in 50 years… So I do not know if it is not that capitalism has a permanently pernicious face against the development of productive forces… From the very beginning, it was very progressive from the point of view of technology in the period of great technical development, but objectively it has been leading to barbarism. That is to say, what we are witnessing now is not the consequence of a great wonder that changed and became bad; it was evil from the very beginning and now it is becoming more and more evil…”

 

“My doubt is whether it all began with imperialism… or whether it began when capitalism arrived… for it is the first system of production that does not work for consumption that from the word go is such an irrational thing that it goes against productive forces from the very beginning. Technically, it is the one that most develops precisely because it does not produce for consumption. But at the same time it is the one that most destroys nature, it obliterates everything from the beginning. And today it is the monstrosity of a law that has been permanent.” (27)

 

Notes

 

             (1) & (2) Karl Marx: The Capital, First Book, chapter XXIII. The General Law of Capitalist Accumulation

 

             (3) & (4) Frederic Engels: Supplement and Complement for Book III of Capital

 

             (5) & (6) Perry Anderson: Transitions from Antiquity to Feudalism; Second Part 4 Feudal dynamics

 

             (8), (9), (10) & (11) Frederic Engels. Supplement and Complement of Book III of the Capital

 

            (12) Nahuel Moreno – Cuatro Tesis sobre la colonización española y portuguesa

 

            (13), (14) & (15) Reyna Pastor de Togneri:  Historia del Movimiento Obrero. Capítulo I Artesanos y Campesinos en crisis

 

            (16) Perry Anderson: Transitions from Antiquity to Feudalism; Second Part 4 Feudal dynamics

 

            (17) Alberto J. Plá - Historia del Movimiento Obrero. Introducción

 

            (18) Karl Marx. The Capital, First Book, chapter 12; Division of labour and manufacturing

 

            (19) Frederic Engels: Supplement and Complements to Book III of the Capital

 

            (20) Nahuel Moreno: School of Economy 1984

 

            (21) Frederic Engels; Supplement and Complement to Book III of the Capital

 

            (22), (23) & (24) Karl Marx, The Capital; Third Book, chapter 36, Notes on the pre-capitalist period

 

            (25) Karl Marx, The Capital, First Book, chapter XXIII, General Law of Capitalist Accumulation

 

            (26) Frederic Engels, Supplement and Complement to Book III of The Capital

 

            (27) Nahuel Moreno: School of Economy 1984

 

 

 

 

 

 

 

 

 

 

 

 

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([1]) Mita was a compulsory public service agrarian, mining, domestic service, etc. Native inhabitants, especially in the Andean region were assigned to the premises where they worked in semi enslaved condition. 

 

([2]) Encomienda existed when the crown assigned a certain number of aborigines to a Spanish subject known as encomendero, in consideration of services rendered