A rectification: colonialism, merchant capital and indigenism from the standpoint of our interpretation of "Third World" peripheries
As we said here, we know that there are very heterogeneous typologies of labour processes that can only be approached ethnographically and with field work. Our work is rather ethnological, although no less empirical; It is in fact, a quantitative analysis. We look for common elements, but through essential differential gradations, which allow us to analyze differences and heterogeneities at a macro level of abstraction, and therefore they’re abstract, but still empirically verifiable even by ethnography and field work themselves. We believe that typologies are one thing, and another thing is to analyze accumulation processes, just as we discriminate between labour processes and accumulation processes in the previous link. Bearing this in mind, and that these general statements cannot be replaced by the particularities and differences in the immediate and local terrain, we move on to the following statements and formulations:
- If the regional price differential is high, so will the producer-consumer price differential, but if the regional price differential is low, it is possible that the producer-consumer price differential will be higher or lower, depending on the number not only of spatial mediators, but in terms of value. Hence, a smaller but centralized and concentrated trade margin is greater than a larger but fragmented trade margin between multiple deconcentrated and decentralized intermediaries. And a higher trade margin may be appropriated by a centralized and concentrated merchant capital, rather than a higher commercial margin which in turn is related to a larger regional price differential. This contains the specific difference of colonialism through commercial capital in the "Third World": in Africa there is no integration of the regional price differential or the producer-consumer price differential, in Asia there is a smaller regional price differential but with less commercial profit margin (it is less integrated in terms of regional price differential, but mostly integrated in terms of commercial profit margin), and in Latin America the regional price differential is even lower, and with less commercial margin. These differences are due to the types of colonization, and to the fact that indirect and direct colonization are forms of formal and real subsumption of labor into capital. This is shown by the data on these same variables, and we must make a correction about our reading of these data: Asia has a greater trade margin than Latin America not because it has less integration, but rather that it has greater integration of the regional price differential, but merchant capitals are less concentrated and centralized, which leads to this greater integration being between more different intermediaries in terms of centralization, compared to Latin America.
- How did this happen? Well, because of the modes of accumulation framed in specific modes of production. In Latin America there is an integration of the regional price differential comparable to that of Asia, but there is greater centralization and concentration of commercial capital, which means that these commercial intermediaries are from the same merchant capitals, and therefore, do not increase the commercial margin . On the other hand, in Asia the ties of integration of commercial capital extend as much as in Latin America, but with a fragmentation of centralization (small or retail trade is highly fragmented in terms of private property and centralization), and this increases the commercial margin and reduces the concentration and centralization of commercial profit for the main capitals of Asian trade. This is fundamentally due to the form of colonization: in Latin America, indigenous commercial intermediaries are erased from the map, and in their place are established local and national commercial nodes and centers, typical of highly concentrated and centralized capital. In Asia there are variations like those of Dutch colonialism versus Portuguese colonialism: Dutch colonialism had a greater integration and centralization, but not the Portuguese; the same can be said of the great differences of India compared to other regions of South Asia, etc.
- Another way of understanding this reality is the following: in Latin America there is no tributary agriculture or ‘tax farming’. This is because even though the crown controls production, and acts as a general landowner even of the royal grants and haciendas, they do not collect a rent from the land through taxation except from the encomiendas. Taxation is almost exclusively linked to ecclesiastical institutions, and not to the nobles or mestizos (until the seventeenth century, when a growing trend towards general and uniform taxation began). This causes the concentration and centralization of commercial capital in Latin America to be greater, avoiding Asian or African fragmentation. On the other hand, in Asia the autochthonous indigenous populations are not erased with genocide, nor their agricultural production based on the extended family, kinship and tribal relations of villages and tribes, etc: this causes commercial integration of European commercial capital to be slower. Finally, in Africa, integration is still almost nil, not only because there is not a genocide as extensive as the Amerindian, but because instead of a strategy like the English in India or the Dutch in its Pacific colonies, the direct colonial administration costs are reduced compared to commercial business investments. This causes investment in infrastructure, roads and railways etc to decline compared to the early colonization of Asia. That is to say: Africa, representing a relatively late period of colonization, is inserted in the period of decline of the English and European empires in general due to the uneven and combined development of the world market. This absence of tax farming in Latin America, as well as the absence of contemporary contract farming, or the reduction of indigenous populations to extended family units that do not operate as mediators between formal and real subsumption of labour processes in the accumulation of commercial capital (as they do in Africa and Asia), is the great difference with respect to the indigenous situation of the rest of the world, and they are all due to this same fundamental reason. As we said here: “India or the Philippines have much lower trade margins than Africa or the Middle East, but retail trade predominates over wholesaling, and is concentrated among the villagers themselves ('traditional retail traders' ). In contrast, regions like Indonesia or Malaysia (which also have much lower trade margins than the Middle East and Africa) very few of the villagers themselves are engaged in trade, despite the fact that retail trade has a much higher proportion within the totality of trade (especially in Indonesia). " And this also explains what we also said in that same text: “This coincides with the predominance of rent over sharecropping in the first countries compared to the second: the need to pay fixed income in money forces the marketing of surplus, in opposition to the simple delivery of variable or fixed income equivalent in product, but this also implies that the communal agriculture of the villages can be perfectly integrated into capitalism without increasing the commercial margin; in the Philippines or Thailand it does so through a predominance of the parcel over the latifundio, but which allows the monetization of the agricultural economy, and in Malaysia or Indonesia with the predominance of large property based on sharecropping and wage labor." This contradiction is exacerbated in Africa: there is less extension of European commercial capital in African colonization (less investment, less integration etc), which allows a greater existence of commercial intermediaries, but this at the same time, produces a demonetization due to the fall in agricultural and commercial productivity itself. As there is also a predominance of small parcels over the state or private latifundio (be it plantation or any other 'outgrowing scheme' and its variants and gradations in the relationship between the colonial state and private commercial capital) then they have greater fragmentation of the regional price differential together with a greater fragmentation and differential of producer-consumer prices (that is, a greater trade margin). This also explains why the mean average size in hectares is higher in South America or comparable to Europe, and at the same time, they have a greater number of smallholding parcels of land than Europe: they can have a commercial margin comparable to Europe, as we saw about Brazil, but they do not have the concentration and centralization (the regional price differential) equivalent to that of Europe. In this way a smaller commercial margin is appropriated by a more highly concentrated and centralized capital in Europe than in South America, despite the size of the South American latifundia (against Kautsky).
- This also explains the all too common paradoxes found in Africa or Asia about agriculture and failed agrarian or land reforms within Pan-Africanism or Pan-Arabism, etc: paradoxes like the continuous reduction of the size of small parcels and small holdings in Asia, contrary to any linear-positivistic secular trend or modernization, and also the superiority of customary consuetudinary tribal and traditional indigenous forms of agrarian production and land tenure and division of labour, against the supposedly superior modern individual property of land. This happens because of Lenin's arguments against Kautsky: small parcels and small holding can have and indeed do have a bigger labour-component than big latifundia, making them even more industrial and capitalistic than big latifundia with peasant salaried workers of different kinds. Plus division of labour is more complex, being not individual but based on the extended family and kinship relationships beyond even extended families themselves and well into tribal relationships, etc. Basically is an intermediate degree of extensive agriculture or farming. Asia promoted tenancy and leasing, producing a bigger monetization of the economy at the expense of turning everyone from villages to tribal leaders to individual landowners into actual exploited tenants of colonialism, but the opposite option was seen in Africa: small holders retained their property, only to promote sharecropping and rents in kind instead of monetization, a bigger fragmentation and a lack of productivity comparatively and relatively to Asia. All of this with demographic and kinship gradations which contribute to enormous gradations in economic terms within Asia (between the Middle East and Southeast Asia, or between the Mahgreb and subsaharan Africa, or between Guatemala and Costa Rica in Central America itself, etc).
- Our thesis is that commercial integration either 1) measured through regional price differentials or producer-consumer price differentials or, commonly also known as gate farm and final consumer price differentials, or 2) established from the history of the commercial integration of colonialism in terms of indirect or direct colonization, allow to measure or describe the degree of formal and real subsumption specific to the capitalist mode of production in the underdeveloped countries of the “ Third World". Basically, the difference between indirect colonization of commercial companies, and their passage towards direct administration of public and taxative administration or of internal commercial integration of the colonies, is identical to the passage from formal subsumption to real subsumption of labor into capital of merchant capitals over the agricultural economies of the "Third World" colonies. The expansion of the tentacles of commercial capital over the "Third World" colonies, either through the passage from indirect to direct colonization, and the passage from colonialism to neocolonialism, are the expansive process of integration of commercial capital over the totality of the economy, and are at the same time, the progressive and gradual expansion that goes from formal subsumption to real subsumption. Hence, commercial integration is not simply about trade, but about formal and real subsumption of agriculture within the capitalist mode of production in these mainly agricultural countries, in the same way that price differentials do not simply measure a trade margin, but also commercial productivity and certain features of agricultural productivity.
- Let us remember that merchant capital is key to understanding the penetration of capitalism in the "Third World", since it does not occur through primitive accumulation or industrialization, but rather is based on the second non-revolutionary path of Chapter XX of Volume III. Unlike the transition from artisanship, manufacturing and industry, and the formation of a growing process of revolution 'from below', here it is commercial capital that takes over the production of essentially agricultural societies 'from above', replacing the role of industry and preventing the formation of an industrial internal market (that is, establishing underdevelopment), through the mediation of trade on raw materials and means of production of direct producers and the subsequent sale and commercialization of their products, etc, treating the colonies as a point of imports and exports, rather than societies with developed internal markets. Instead of industry with production of raw materials and means of production, as well as durable consumer goods, etc, that are freely exchanged in a internal market regardless of their use value and as simple exchange values, etc., in “Third World” societies colonialism 'from above' imposes the transition to capitalism, mediating raw materials, means of production or credit for agricultural production and at the same time taking care of the commercialization and export of its mainly primary production.
- Furthermore, the process by which commercial capital expands and increases its tentacles as a mediator of the mainly agricultural production of its colonies, is the same process through which commercial capital passes from indirect to direct colonization: either going from the simple commercialization of merchandise and imports and exports between colonies and superpowers, to taking charge of tax collection, political and legal administration, as well as commercial integration (railways, communication, etc.) that would allow its role as mediator between agricultural production and capitalist accumulation. Hence, African or Asian colonization did not begin immediately with the administration of state functions by the English, French or Belgian states, etc, but rather with the gradual entry of companies and commercial corporations that were, step by step, penetrating the colonial economies, only later to take over the local political-legal administration. And even the step towards direct colonization is not carried out by the European states directly at the beginning, but by the companies and commercial corporations themselves, which go from simply trading merchandise, to financing commercial integration and the construction of administrative-political institutions.
- This enormous historical process is, at the same time, the same process through which commercial capital goes from the simple purchase and sale of agricultural surpluses as an importer and exporter, to the growing mediation of raw materials and means of production of the agricultural labour processes. It is the same process of going from formal subsumption to real subsumption respectively: the growth of trade integration responsibilities and administrative-political functions on the part of commercial corporations, is the step from the simple sale of surpluses through an absolute surplus value and absolute ground-rent, towards the production of relative capital gains and differential rents through the mediation of the internal productive process of the agricultural sector, as stated by Marx in that chapter XX of volume III around the "colonial system" of the world market.
