In defense of the asiatic mode of production

We are going to show (or we hope to show) that the concept of the tributary mode of production falls short to explain a whole series of phenomena that can only be explained by the concept of Asiatic mode of production. We will even show that the concept of the tributary mode obscures or hides certain aspects that must be analyzed, and that can only be analyzed with the tools of the Asiatic mode. Among these aspects is the formal and real subsumption of labour under capital, and the need to erase once and for all the theses of 'semi- feudalism', which deny the existence of capitalism in the Third World. Another aspect is the penetration of capitalism in agriculture, and the neglect of the agrarian problem among Marxists. Without the details elaborated by Marx on the Asiatic mode, it becomes impossible to deepen the analysis of the agrarian problem, and it is impossible to even begin to affirm that capitalism does not exist in the Third World without first having made the analysis of these details. It is assumed that science must advance and deepen its descriptions and analysis. The tributary mode is an obstacle in the understanding of these elements of subsumption and agrarian capitalism, as well as capitalism in the Third World.

-          The rent is not charged from the land nor an area of ​​territory is adjudged to be exploited, but the tributaries are selected based on ethnic and kinship relations over which, according to Marx, rests the power and the representation of the state as “general landlord”. Issawi confirms this by pointing out that there are no land adjudications in the pre-capitalism of the Middle East and North Africa, but a taxation power granted by the state,   and this turned mobile the territories of each tribal chief and tax collector. The same thing is confirmed through the historiography on India or China. This in turn explains the mobile and undefined character of the Asian and African kingdoms, composed of quasi-federate kingdoms and sub-kingdoms that do not stay together for a long time or that have the ability to move, choose their suzeranaity , or dispute the kingdom, etc. It also explains the quasi- federal character of the Asian and African nation-states today, which precisely because of this historical past, still retain many of their characteristics such as the semi- autonomy of the regions based on ethnic terms, forms of legislation and self -Indigenous government, etc.

-          Land rent and tax are united, which implies that the separation between political administration and aristocratic tenure of the land of an economy such as the European one is not possible. Therefore, the political-state administration serves as an enrichment or exploitation mechanism, instead of being separated from economic relations. It is known that Roman institutions never charged more than taxes, and that the class power of their aristocracy was based on commercial relations and ownership of land separated from Roman bureaucratic institutions; the commercial transactions and personal businesses of the Roman aristocracy were private, not organized by the state or from the state. In the case of the Asiatic mode of production, commercial, land ownership and business relationships are made through and from the state. The state administration does not only receive a tribute, but an absolute rent; instead of an aristocracy with private property separate from the administration, in the Asiatic mode private property and state property are one and the same thing, and the aristocracy enjoys its private property as state property.

-          The different degrees of formal and real subsumption are based on the different degrees of commercial integration (which we had found here and here ), precisely because of the union of land rent and tax of the Asiatic mode of production that we mentioned in the previous point. We are not interested in commercial integration per se, nor on a more 'sociological' approach to concentration/fragmentation or centralization/decentralization, but the consequences of the mixture between land rent and tax in the patterns of accumulation, and its effect on the degrees of capitalistic formal and real subsumption in the Third World. In present-day Latin America the commercial capital does not receive the tax, but only the rent, but for the same reason the rent is more concentrated and centralized. It does not receive the tax for the historical reasons that make the encomienda disappear and that form the colonial absolutism that will have as its epitome the Bourbon reforms; before the dissolution of the parcels they do receive tributes and land rent in an indistinct way. If the institutions that collect taxes did not exist, the collection of taxes/land rent would be fragmented among intermediaries, and therefore, income from taxes/land rent would be less concentrated, raising the commercial margin, depressing agricultural productivity, etc. What you earn in absolute terms with a higher tax/land rent, you would lose in terms of concentrating more capital. That is the paradox of income and tax together in the Asian mode of production: it is a greater amount of income, which produces a lower concentration of the accumulation of capital, benefiting different intermediaries fragmented in different points of the economy; or vice versa: a greater concentration that produces a smaller amount of income, but that benefits a few commercial capitalists that concentrate and / or centralize a large amount of capital. This is what explains the industrialization of the Middle East and Africa by the hand of state rentiers, and the Latin American industrialization of bourgeois nationalists. In East and South Asia, commercial capital does not already receive the tax (since centralized tax collection institutions were formed from the colonies). In Eastern and Southern Asia, colonization was direct, in the sense of creating a colonial administration , and not to the use of existing traditional relations, unlike what happened in the Middle East and Africa-), but there are intermediaries of land rent (not only through leases, but from the commercial margin), which have been replaced in recent decades by the integration of contract farming or the "supermarket revolution" of the 90s. This causes a greater concentration, but still maintains a high fragmentation of the land and intermediaries of traditional villages or extended families and other collective relationships. The integration between communal villas and corporate companies is such that contract farming in Asia is practiced en masse, with the hiring of small family and collective owners by multinationals directly, replacing traditional and communal mediations. In Africa or the Middle East commercial capital owns both land rent and tax, and integration with contract farming or supermarkets instead of substituting tribal and village intermediaries,  strengthens them. It receives tax and land rent because there are almost no state institutions strong enough to take care of taxing, and to make the warlords with political and territorial powers become only landowners (as happened in the rest of Asia). This explains the fragmentation and instability of nation-states in those regions. It also explains the great power of the landowners of the Middle East and Africa, and why they are able to challenge the power of their governments with much stronger extremist movements: contact or integration with the market instead of making the need to disappear the leaders of towns or tribes, and directly connect direct agricultural producers with commercial capital (as has happened in the rest of Asia), puts in contact with big capital the most powerful sectors that collect taxes, collect land rent as landlords and collect commercial profits. That is why the rise of African landowners or the Middle East (from the Taliban to Boko Haram , etc. ) are not due to 'pre-capitalist ' or 'semi- feudal' backwardness, but rather to the contrary: they are the ways in which the penetration of capital advances, and the search for profit and accumulation advances. Another example is the predominance and even the increase of small property in the Asian countryside: contrary to evolutionism and developmental or modernist theories, in Asia the commercial latifundium does not advance, but the small family or collective property. Just as commercial capitals pursue small property for being more productive instead of large estates with salaried labor, although the latter are supposed to be the most 'advanced', 'modern' and 'capitalist', so it looks for where there is a greater possibility of accumulation: either replacing tribal leaders and traditional villages, or working with them and reinforcing them if they concentrate more capital. These are divergent paths of the same principle of accumulation and capitalist profit motive. Therefore, the degrees of subsumption that we find: 1) real subsumption in private or individual state latifundia of modern capitalist type in all the regions discussed, very widespread in some cases (South America) or minor in others (Sub-Saharan Africa) ; 2) formal subsumption of small property and sale of surpluses in Latin America, where small individual property predominates (Central America); 3) an intermediate degree or mixture of formal and real subsumption in the sale of surpluses, tenancy, sharecropping, etc, but with a modification of the productive process where small collective or familial property predominates and where a tribal chief acts as a customary or de facto landowner in the modification of the productive process partially whether through the organization of the division of labour or the modification of the labour process through inputs, raw materials or credit and subsequent connection between the direct producer and wholesale retail; and 4) a third degree or intermediate mixture of formal and real subsumption where the modification of the productive process is no longer with a communal landowner or traditional village or tribal chief, but with a state or private commercial enterprise, whether local or even multinational . These last two degrees, 3) and 4), then represent two different forms similar or equivalent (but not the same) to the system of " putting-out " of commercial capital with respect to production in the sense of Chapter XX of volume III of Capital   (that is, in the sense of the hoarding and suffocation of production by commercial capital), and represent a fragmented and a concentrated form respectively, and according to the level of concentration, allows for a way less interested in industrialization or dependent on the state for it or with a commercial sector that remains as mediator of production, and another way with sufficient capital to consider the passage of commercial capital to industrial capital in a way similar to the Prussian way. This is precisely what we see in Africa and the Middle East on the one hand, and in East and South Asia on the other nowadays.

-          Therefore: the partial modification of the productive processes, brings Asia and Africa closer to real subsumption than the western land regime : beyond the Latin American latifundia, there are only small farms with which surpluses are marketed. The small western peasant knows no modification of the productive process more than his own. But for the Asian and African peasant, beyond the latifundio and among the small peasant property, there is a " putting-out " system and the capacity to organize the productive process.   It is even closer to relative surplus value, than to absolute rent.   This fully verifies the penetration of agrarian industrial capitalism in Africa and Asia. We don’t mean ‘intermediate’ as previous to real subsumption, but a mixture of formal and real characteristics. This transition from pre-capitalist relations to intermediate formal and real subsumption relations is equivalent to the passage of rent in kind to the sharecropping that Lenin discusses in his The development of capitalism in Russia , and is an example of uneven and combined development: a backward relationship that is incorporated into a capitalist mode of production. The focus on commercial integration, therefore, is not mere 'sociology', but implies the deepening or distancing of the intermediary nature of commercial capital, or its modification of productive processes. That is, it becomes the key to the passage from a simple formal subsumption to a real capitalist subsumption.

-          The Asiatic way is the only one that explains the paradox of a high fragmentation of the land in small communal properties in Asia and Africa, and that turn out to be much more productive than the large latifundia of individual property and wage labor. In fact the tendency in Asia is to dwarf the plots, instead of the growth of large property. This proves Kautsky (and Marx!) wrong, who always spoke in favor of latifundia and large industrialized property over fragmentation. Actually, in opposition to Marx’s chapter on formal and real subsumption, here in the Third World the fragmentation of land allows for a deepening of real subsumption, instead of the large landed estate. In Asia and Africa it is the mechanized large estates that yield less productivity than family and collective agriculture. The explanation lies in the division of communal and family labor, and the existence of this division of communal labor lies in the tribal character of economic relations, as only the Asian mode of production includes them and explains: complex structures of kinship, based on the extended family, and their hereditary relations with respect to the land, or of possession or usufruct powers, in front of a de facto landowner who partially modifies his productive processes by means of a tribal and ethnic right , just like the one that sustains the totality of the state, according to Marx. This allows an exit from historicism and the analysis of the indigenous communities of the Third World that the tributary mode does not allow to analyze, and that are only able to be analyzed from the viewpoint of the Asiatic mode.

Annex

We found a beautiful book from 2017 by Sui-Wai Cheung which confirms precisely all our research and everything that is written on this article. The book its called Colonial administration and land reform inEast Asia, and makes a comparative analysis not only of East Asian economies, but South Asia as well like India. The book reads:

This is a marvelous passage because it shows a whole series of characters which we couldn’t explain better: explains the union or separation of tax and land rent depending on whether we’re talking about de period before direct administration, or if we speak of the period of the ryotwari system. In other words: in the traditional form through royal granting with the king as general landlord, for the East India Company to be the new landlord y tax collector simultaneously, the income or revenues of the pre-capitalistic indian state starts with a first insertion within capitalistic accumulation of the East India Company, through the “landlord based system”. This system, in itself, is based on landlord which are themselves members of villages, temples or lineages, which proves that tax or tribute and land rent are indissolubly linked, and that there’s a landlord relationship which can only be explained through ethnic relationships just like in the Asiatic mode. So far here, the Asiatic mode not only proves its validity, but its complete necessity to explain this historical processes.

Then, the text proves how this direct administration reduces income or revenues for the Moghul state. Why? Because after revenue from land rent going into the East India Company, the indian state only perceives what is characterized as tax. Here there’s a first separation of what was unified before, just as Marx explains it for the Asiatic mode of production: a separation of land rent and tax, which wasn’t separated before. None of these characteristics can be explained by the “tributary mode”, but only by the Asiatic mode. Afterwards, the text explains the change of how direct colonial administration goes from the landlord-based system to the ryotwari system, producing an increase in the capitalistic accumulation of the EIC, and producing an increase in taxes for the indian state or government, by eliminating intermediaries from tribes, villages and traditional communes. This produces an augmentation of concetration and centralization of commercial capital, of agrarian industrial capital (since we’re talking about land rent), and from the power of the indian central state above its provincial regions, removing power from local tribal leaders in the villages, temples, lineages, etc.

This last passage, from the landlord based syustem to the ryotwari system, happens only in India in this early period and in other East Asian regions, thorugh colonization. In Africa it would happen much later on, and its not going to be carried out by the state, but by commercial capital. This is important, because this step represents what for us were the 3) and 4) steps or levels exemplified in our text above. But those steps 3) and 4) are analytical and logical differentiations of the functioning of formal and real subsumption of labour under capital, and of the functioning of the capitalist system. In terms not of synchronic or logical functioning, but historical terms, in India this step happened in the times or periods already established by the author of the quote. But in Africa, a region with a more delayed colonization, and with so many different characteristics, specially the fact of not having direct colonial administration, but only indirect (that means: without sending central functionaries to collect rents or taxes, but only collecting rents and taxes within the frame of traditional tribal, village, lineages leaders, etc) then this last step could be said to never have happened in African history, or even more exactly: is the step that is happening or being produced mainly through the supermarket revolution and contract farming from the 80’s on (where the state also is involved through commercialization, subsidies, tax collection, of course, with different degrees of integration and stability for that central power). In a few words, we can say that these are "out-grower schemes": from its traditional form (usually the state or cooperatives buying excedentes, subsidizing, etc), and going through the nucleus-outgrower scheme (usually between the state and the private sector through a central plantation or processing center), satellite farming (a mixture of the past two), and coming to open market strategies. All these are forms of mediation of commercial capital over production in the mode of "putting-out" or equivalent to it in the sense of chapter XX of volume III. Steps 3) and 4) can be mixed with all these grades interchangeably. Even the nucleus-plantation model is strikingly similar to a latifundio that exploits peasant labor, with the only difference being that it exploits small landowners, and their surpluses, or their work within the plantation alternated with work on own land, etc. . But if we are interested in the Marxist formal and real subsumption, these degrees depend on commercial integration:   the intermediaries of village and tribal chiefs save marketing expenses for the direct farmer producer, but increase commercial margins. For the same reason, they reduce the income that the peasant receives compared to the final price of their product, and that helps extract more non-paid surplus labor. We find here the reason why the tribal chief is so beneficial to capital: because it increases the exploitation of agricultural labor, and increases the absolute mass of profit of agricultural and commercial capital, even though it does not allow for its concentration or centralization and does so in a fragmentary way. On the other hand, agriculture through a direct contract with peasant producers, whether from a plantation or central processing, saves the direct producer the same marketing expenses, while at the same time lowering the commercial margin. They allow better wages or commercial income for the farmer, and extract the same or a greater amount of non-paid surplus labor. This allows a much greater concentration of capital (which allows for even larger investments) and a much greater centralization in a few hands, starting from an absolute mass of smaller profit for commercial capital as a whole, but which in terms of commercial margins is more advantageous. This explains the lag in industrialization and the creation of internal markets in Africa or the Middle East, compared to the rest of Asia: industrialization is impossible without an increase in the standard of living and peasant consumption, which is incompatible with the increase in labour exploitation. Only the reduction of the commercial margin allows to increase peasant income without compromising commercial profit, or in its defect, to maintain the same exploitation and increase the profit for the company. At the same time, the increase in the exploitation of labor allows an absolute mass of profits greater for commercial capital, but depresses peasant consumption. Commercial capital has a much more aggressive dominance, and therefore, much more profitable in terms of its empowerment of production. Fragmentation impedes large-scale and intensive investment, while only concentration allows the accumulation of sufficiently large capital for investment.

This great difference of synchronic/logical and historical functioning, explains the great divergences between regions like Africa and the Middle East, and its nation-state fragmentation, compared to India or East Asia’s where although there exists the same structure in the Asiatic mode of production, and there’s the same union of taxes and land rent which is disintegrated little by little by this differente degrees of commercial integration and formal/real subsumption, and there are process of colonization with different degrees of direct or indirect administration, are the ones who produce different patterns of accumulation: more fragmented in Africa and Middle East, and more concentrated and centralized in South and East Asia. This, precisely, being our initial thesis in all of our texts on colonialism and peripheries that we have written all along our work in this blog. For that matter, the text is a simple and straight to the point confirmation of processes which can only be differentiated by the Asiatic production mode, and a confirmation of the development of that production mode, and its transition to modern capitalism, which we have developed.