Chapter 31:The Genesis of the Industrial Capitalist

Outline of Marx's Argument


Industrial capital, the prototypical form of capital, emerged alongside agrarian capitalism. Marx refutes the myth that this emergence was accomplished purely through conscientious frugality and entrepreneurial investment by describing the actual sources of finance for investment that became permanent features of capitalism, well beyond the early period of primitive accumulation.

The Myth of Entrepreneurship

Marx’s attack on the myth of entrepreneurial frugality remains important because the myth still flourishes. It became foundational to the ideology of upward mobility, which claims that anyone who works hard can move up the income hierarchy, even to the very top. Recently, it has been refurbished as part of the right-wing attack on those roles of the state used by workers for their own protection. In the United States, amidst the crisis of Keynesianism in the 1970s, this ideology was elaborated by neo-conservatives, and soon became known in the rest of the world by the label neoliberalism.(1) In the Global South, it has been an important element of the writings of people such as economists P. T. Bauer (1915–2002)—created a "life peer" by the UK's union busting Prime Minister Margaret Thatcher!—and Hernando De Soto Polar (1841 -)&mdashbest known for his counter-revolutionary(2) advocacy of government deregulation—both of whom have been vociferous advocates of "liberating" the market and entrepreneurship around the world. In the Soviet Bloc and China, the appeal to liberate entrepreneurial spirit was a part of the reformist attack on state planning, and after the fall of the wall, the imposition of the market and the gutting of worker protectons became integral parts of the programs of "shock therapy" reforms in Eastern Europe.

While Marx accepts the grain of truth that many small guild masters, independent small artisans and even wage-laborers, “transformed themselves. . . into capitalists.”(3), he argues that such personal initiative, savings and investment were not the major mechanisms by which industrial capitalism emerged. Nor we can add, are small businesses today the major source of capitalist expansion.

Since the 1970s, attacks on the Keynesian social and environmental programs and regulations have been rationalized by the pretense that they undermine entrepreneurship. State paternalism, neoliberals have claimed, whether of welfare state in the West or of socialist governments in the East, creates dependency and tends to snuff out the entrepreneurial spirit vital to the building of free enterprise and society more generally. Targets have included programs that support working-class income and increase workers' ability to resist exploitation, as well as environmental, occupational safety and health regulations that workers have imposed on business to limit damage to both humans and the rest of nature. Neoliberals call for deregulation to cut corporate costs and enhance private profits, the selling off (enclosure) of public lands for purposes of exploitation, the removal of environmental regulations to encourage investment, the reduction or elimination of social safety-net programs, vouchers to finance private schools outside the public-school system, and in countries now freed from Soviet-style regimes, the substitution of private farming for state or collective farms. Hypocrisy is blatant in the steadfast opposition these same capitalist apologists maintain to any reduction in the role of government in the defense and subsidization of corporations and in their repeated support for "supply-side" tax cuts that supposedly increase investment but actually benefit the wealthy at the expense of everyone else. Such policies have rightly given rise to the term "corporate welfare."

Analyzing the rise of industrial capitalism shows us how these arguments are just as ideological and self-serving as those Marx confronted in the 19th Century. Even during the birth of capitalism, in the supposed golden age of laissez faire, before the rise of "big government" or the welfare state, the role of the state was crucial for the emergence and survival of capitalism. Whether describing the state use of armed violence to capture and maintain colonies for exploitation by "free enterprise" or analyzing the use of national debt and taxation to finance such violence and to transfer income from workers to capital, Marx highlights the ways in which the greatest and most important "entrepreneurial" ability of all was the ability to mobilize, not individual creativity, but state power in the service of capital accumulation. Similarly, he shows how the main beneficiaries of this ability were not small, "entrepreneurial" firms, built with individual initiative, but giant monopolistic trading and industrial enterprises —such as the British and Dutch East India Companies—built and sustained by state charters and armed support.

The myth of entrepreneurship derives its strength partly from the ubiquitous propaganda apparatus of capital, but also from an extremely important truth hidden beneath all its distortions and hypocrisy. Within capitalism, the real sources of creativity and innovation are social individuals working and thinking within a collective process. The myth of entrepreneurship misleads by pointing only to the innovative individual (from Horatio Alger to Steve Jobs), while ignoring both the social fabric enabling such individuals to create and their dependence on capitalist finance, which turns their innovations into new modes of exploitation.

The real source of innovation and wealth, Marx argues, is living labor (including creative thinking). Capitalists, as such, serve as mere managers of a system in which dead labor—in the form of capital, whether means of production or money—dominates living labor. Where those who work and think have the power to force capital to harness rather than repress such creativity, the system accumulates and develops rapidly. Where workers are weak and capital powerful and rigid in its control, the system can accumulate only quantitatively and tends to stagnate. In the West, the right-wing calls for a liberation of entrepreneurship, but their policy prescriptions have been focused primarily on liberating not individuals but multinational corporations from constraints that benefit workers and protect the environment. In the last years of the Cold War, Soviet reformers, such as Mikhail Gorbachev, found themselves caught in a contradiction; they needed looser industrial and political controls (to achieve more flexibility and rapid accumulation) but feared the result would be explosive expressions of discontent they could not manage. Their fears soon proved to be justified, the Berlin Wall fell and their regime with it, soon replaced by a savage mafia-capitalism dedicated to maximum exploitation and repression. The reality of neoliberalism is Trump's authoritarianism and Putin's dictatorship.

Capitalist Development and the Role of the State

Thus, capitalists' attitude toward the state depends entirely on the degree to which it serves their needs. Where, during the early period of primitive accumulation, industrial capitalists did not have the power to use the state to eliminate guild rules inimical to their business interests, they set up operations in sea ports and villages where such restrictions did not obtain. Where and when capitalists were able to usurp state power, they used it to craft a world more to their own convenience. They pillaged the Global South through colonialism. They impoverished and disvalorized their employees through low wages and taxation. In both areas, they imposed a murderously repressive social order based on slavery and the exploitation of children.

The central role of colonialism in the original accumulation of industrial capital consists of a series of mechanisms, some crass and violent, some subtler but still violent, which facilitated amassing the wealth that financed British industrialization.(4) These mechanisms became quasi-permanent features of capitalism right up to the decolonialization period after World War II. The violence he describes in the initial conquest and plundering was required to overcome the fierce resistance of the people being colonized. The example he cites from the United States— scalping and murdering Native American men, women and children—was far from unique, as people everywhere resisted integration into the invading European capitalist takeover of their lands.

The violence did not disappear with the stabilization of colonial rule because resistance did not disappear. Violence begat violence. In the French colony of Vietnam, for example, military force was required to maintain control against both passive resistance and armed struggle. It took their military defeat at Dien Bien Phu in 1954 to force their withdrawal from Indochina. The history of colonialism is one long drama of invasion, resistance, conquest, exploitation, continued resistance and continued repression. But repression ultimately failed, as one anti-colonial struggle after another succeeded in pushing foreign governments and their repressive apparatus out. Unfortunately, as colonized people were to learn to their chagrin, the end of formal colonialization did not always mean the end to the mechanisms of exploitation.

One such mechanism was trade, trade internal to the colony, trade between the colony and the colonizing country, and trade with the outside world. Marx describes the case of India where the British took over the trade in consumer items such as salt, betel, opium and rice.(5) In the case of rice, he claims that the British created a famine in the process. Indeed, famine became recurrent.(6) Most notorious was the Bengal famine of 1943 in which over 2 million people died. Four years later, the British were finally forced out. Another example of British efforts to monopolize trade within a colony was Nigeria, which came into direct conflict with the market women who had traditionally dominated domestic trade. When the women sought to affirm their traditional rights, the British violently repressed them.(7)

The rise of British industry at home—the central subject of this chapter—was fueled by the monopolization of colonial foreign trade. Colonialism meant an extension of the markets for industrial output beyond the home market.(8) Colonial powers prevented any other countries' industries from selling in their conquered territories, destroyed local industry, either directly (say by cutting off the thumbs of the weavers) or indirectly by underselling at lower prices. (9) In the Communist Manifesto, Marx and Engels commented on this aspect of capitalist expansion:

"[The bourgeoisie] has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconsciounable freedom -Free Trade. . . . The cheap prices of its commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians' intensely obstinate hatred of foreigners to capitulate." (10)

The reference to "Chinese walls", of course, is not to the great wall of China, built to keep out nomadic tribes and to tax commerce on the Silk Road, but to the efforts of the Chinese ruling class to keep out Western capitalist merchants and their cheap and often noxious commodities. The walls were battered down by both cheap commodities and the gun boats of the Western powers which forced China to accept foreign trade.(11)

European capitalists not only imposed exports on their colonies, they also demanded protectionist measures to limit imports at home to keep prices and profits up. Demands for “free trade” or for “protectionism” depended purely on what was useful to a particular set of capitalists at any point in time.

Arguments for either set of policies could draw on the writings of economists, always ready to provide rationales for capitalist demands. The proponents of “free trade” could draw on classical political economists such as Adam Smith (1723––90) and David Ricardo (1772–1823). The latter was especially useful because he provided a theory of “comparative advantage” that argued that all parties could gain from trade. The proponents of protectionism had not only the arguments of US Secretary of the Treasury Alexander Hamilton (1755–1804) for protecting American industry, but The National System of Political Economy (1841) by Friedrich List (1789-1846) who turned Hamilton's arguments into systematic economic theory.'(12) List, who had supported the new German Customs Union to facilitate wider trade, came to modify his embrace of free trade by supporting the argument that "infant-industries" deserve protection until they can get their production costs lowered enough to become competitive in world markets. The imposition of barriers to imports helped create the home markets required by new industry. By limiting supply, protectionist measures raise the prices at which industrialists can sell, boosting their profits and ability to invest. In consumer goods industries, the higher prices undercut the real wages of their customers, who pay this supposedly limited, short-term subsidy for the sake of the development of industry.

In a speech given in January 1848, the year he and Engels published the Manifesto, Marx addressed free trade and protectionist policies directly and at length. After reproducing the arguments on all sides, especially mocking capitalist arguments about how one policy or the other would benefit workers, he shows how, on the contrary, workers suffer from both policies. "What is Free Trade," he asks, "under the present conditions of society?" His answer: "Freedom of Capital. . . freedom of Capital to crush the worker." What of protection? "The Protective system is nothing but a means of establishing manufacture upon a large scale, that is to say, of making it dependent upon the market of the world; and from the moment that dependence upon the market of world is established, there is more or less dependence upon Free Trade too."

Given this analysis, he goes on to conclude, "Generally speaking, the Protective system in these days is conservative, while the Free trade system works destructively. It breaks up old nationalities and carries the antagonism of proletariat and bourgeoisie to the uttermost point. In a word, the Free Trade system hastens the Social Revolution. In this revolutionary sense alone, gentlemen, I am in favor of Free Trade."(13)

Today, conflicts over the choice of free trade versus protectionist policies persist. Campaign contributions have bought some industries continuing protection for their markets and their profits, at the expense of those who buy their products. The sugar industry in the US is one durable example. The price of sugar has been, since 1789, artificially raised by tariffs.

Sugar, Cokes and Pain

Cover of the book Sweetness and Power. Poster of movie Burn!.
While contemplating the cost of the sugar in your drink, you might also think about what it took to produce that sugar and get it to the soft drink factory or dinning room table. The history of sugar is one of greed, slavery and imperialism. Along with the film Burn! which vividly illustrates some early Carribean sugar history, you might take a look at Sidney W. Mintz, Sweetness and Power: The Place of Sugar in Modern History, New York: Penguin, 1985.(14)

After the Great Depression of the 1930s, multinational corporate interests increasingly demanded free trade. Most economists concurred, arguing that competing protectionist measures had deepened that crisis. The General Agreement on Tariffs and Trade (GATT) of 1947 was formed to reduce obstacles to trade. In the wake of World War II, American companies, less damaged by war than their foreign counterparts, wanted as much freedom to invest and export as possible. Reduced trade barriers and subsidies, such as the Marshall Plan (1948–51), where some 13 billion dollars were loaned to countries in Western Europe, facilitated a huge flow of consumer and capital goods from the US.(15) While policymakers saw the Plan as a way to stabilize Western Europe at the dawn of the Cold War, economists justified it mainly by recourse to Ricardo’s arguments for free trade. For economists and for business media, trade is almost universally portrayed in terms of the relationships between nations, rather than between classes. Ricardo laid out his argument about “comparative advantage” and “gains from trade” in terms of trading between England and Portugal. Politicians and TV commentators today talk about improving or worsening trade between countries such as the United States and China. Determining such conflicts and influencing the negotiations between governments, however, are the class forces at work within the individual countries and across borders.

Negotiated in secret collaboration with business interests, NAFTA provides a good example. On the surface, it appeared to be simply an agreement between the governments of the US, Canada and Mexico to form a free trade zone that could compete with the increasingly unified European Union, created in 1993. Both blocs contain huge populations, large internal markets and enormous combined resources. But behind this appearance lay patterns of struggle between capital and labor.

The interest of American and Canadian corporations in including Mexico in a trading bloc derives from the possibilities of pitting Mexican workers against American and Canadian workers who are paid more and have more legal rights. Having already moved thousands of jobs south into Mexico, corporations have used the threat of moving to Mexico, where workers are much less powerful, both on the job (lower wages and benefits) and off (little social security, unenforced environmental protection, political repression), as a threat to obtain concessions (lower wages, more flexible work rules, etc.) from American and Canadian workers."(16) Such outsourcing requires that goods once produced in the US or Canada, but now produced in Mexico can be freely exported back into the US and Canada. Without the ability to do so, such a continental strategy against labor could not work.

Opposition to the treaty clarified the class content of trade. Literally thousands of protestors from all three countries—from unions to environmentalists—collaborated to oppose a corporate-friendly NAFTA. Coalitions of hundreds of groups in each country organized to oppose the treaty. Those coalitions, in turn, linked together to support each other through international discussion and the circulation of information. This was the first time that such grassroots organization occurred on this scale."(17) Although those efforts were defeated, and NAFTA went into effect in 1994, the network of new contacts prepared the ground for the subsequent alter-globalization movement that mobilized against the World Trade Organization (WTO), formed to undercut local democracy by imposing global trading rules. Grassroots groups such as People's Global Action organized massive demonstrations in Geneva, Seattle and elsewhere. Just how much of a threat to capitalist interests such mobilization constitutes can be measured by the increasing violence unleashed by the state in Quebec City, in Prague and in Genoa, including beatings, torture and killings. Measured by the breadth of mobilization and the degree of repression, the intensity of class struggle around trade has become great indeed.

Banks, Debt and Taxes

The last of the mechanisms of amassing investible funds that Marx highlights is the manipulation of public debt and taxes. He describes a process that would grow and develop over time to become one of the most powerful levers of capitalist control in our day. He deals with this issue at both the national and international level, and so should we. The process is a simple one, although obscure to most of us. Capitalists loan money to the state to finance its expenses over and above revenues (e.g., to cover budgetary deficits). The state uses the money to pay for its expenditures—Marx emphasizes those which support the process of primitive accumulation—and then pays back the borrowed money, at interest, with money acquired through taxation, an act which Marx describes as turning money into capital “as with the stroke of an enchanter’s wand.”(18) Here he emphasizes taxes on subsistence goods, which impoverishes peasants and artisans and results in their expropriation. Augmented, the money loaned becomes capital—finance or usurer’s capital. Although not based on the extraction of surplus labor from industrial workers analyzed in the rest of the book, this amassing does make such extraction possible. This process in turn, because national debt takes the form of negotiable securities, provides one basis for the expansion of banking and financial markets, which also facilitate financial intermediation or the pooling of money that can be used to finance industrial capital.

Marx does not discuss, at this point, something he knows to be a complicated issue: the conditions under which amassed money-capital becomes available for industrial investment. Already quite familiar with the problem in the 1850s, he analyzed and wrote many articles about it, years before Capital went to press. He criticized, at length, the French Crédit Mobilier, an early financial institution that claimed to be channeling capital into industry. Marx showed that it greatly overstated the degree to which this was being done and was in fact guilty of a great deal of speculation with other people’s money.(19) Nevertheless, he claims the development of financial markets played a key role in amassing the money that financed industrialization, but his focus is more on the amassing than on its channeling to industrial investment.

Today, when the United States and many other countries have highly developed financial markets, this remains an issue of contention. One of the most severe critiques of financial deregulation that began at the end of the 1970s have been how it facilitated the diversion of money out of real capital investment and into the “casino economy” with its various forms of speculation, from real estate through stocks to mergers and takeovers.(20) The result was very slow growth in the real economy, collapse of the US savings and loan industry and the stock market crash of 1987. Similarly, the freeing of financial markets from state regulation has been contentious in the Global South. Free market economists make the kind of claim Marx is making in this chapter: that the development of such markets would speed investment. But, is Marx's analysis of the Crédit Mobilier more to the point? To what degree does such freeing simply result in financial swindling and speculation rather than investment in new factories? The international financial crises associated with the European Exchange Rate Mechanism (ERM) in 1992; the Peso crisis of 1994; the Asia crisis of 1997; the Russian financial crisis of 1998; the repeated failures in the late 1990s to implement the European Monetary Union; the Turkish financial crisis in 2000; and the 2001-02 financial crisis in Argentina and, most recently, the financial crisis of 2007-09 have kept the issue alive.

The repayment of sovereign debt as a risk-free use of the state's power of taxation to multiply the capital of finance capitalists has certainly become a permanent feature of capitalism. The current US federal deficit is a case in point. Excesses of government expenditures over tax revenues have been financed with hundreds of billions of dollars of debt, loans from private capitalists being repaid at market rates of interest with taxpayers' money.

Ever since Marx was writing, international loans to foreign governments have also provided a lucrative way to convert bank money into finance capital. In the early 20th Century, Western bankers sought, with their nations' gunboats and marines, to obtain a slice of the royal Chinese debt."(21) After World War II, the Marshall Plan initiated decades of US government loans to other governments, in return for concessions to US diplomatic objectives and the interests of multinational corporations. More recently, in the 1970s, OPEC petrodollars, deposited in Western banks, were lent to desperate oil-importing countries at flexible rates of interest, to be repaid with export revenues via various forms of taxation. When American monetary policy tightened after 1980, interest rates soared, the world economy was pitched into depression, and those borrowing governments faced a crisis. Unable to raise the sums necessary to repay the sudden spike in repayment obligations, the result was an international debt crisis. Further loans to repay earlier loans were conditional on the imposition of austerity on the workers of the indebted countries."(22)

Slavery and Child Labor

At the end of the chapter, Marx emphasizes what were clearly to him two of the most obnoxious and reprehensible features of early capitalism: slavery and the exploitation of children. The wage-slavery of the Old World, he argued, had the formal slavery of the New World as its foundation. The taking of slaves in Africa, the trade in slaves that brought them to the Americas and the peculiar institution of plantation slavery were all vital in producing the raw material worked up in British industry: textiles from cotton, rum from sugar and so on.(23) Thus, the capitalism emerging in this period was not just British capitalism but was an Atlantic capitalism of a particularly vicious nature. Not only did it plunder and loot, but it imposed both literal as well as waged slavery.

Though Marx joined others of his day in condemning the exploitation of children in mines and textile mills, decades would pass before effective child labor laws would put an end to the most flagrant abuses of this sort in the US and other industrial centers. That said, the exploitation of children has never ended, not in the US or in other countries around the world. The subjection of children to forced labor for pitiful payment outside any free labor market is still common.(24) This is not about fast food stores hiring teens, or children put to work by television and Hollywood producers, but rather the forced prostitution of children and their exploitation in industrial production (such as carpet making, cocoa production, cobalt mining) around the world under conditions every bit as atrocious as those described by Marx. Most out-and-out slavery, the buying and selling of individuals, has been largely abolished, with a few exceptions, including the sex trade where children are trafficked along with adults. Groups such as the Anti-Slavery Society as well as the International Labor Organization periodically publish reports of the depressing extent of such exploitation.(25) Those reports include a textbook for university students that is well worth reading. It has many illustrations and personal testimony from children as well as analysis of the depth of the problem.

Child worker in Nepal.
Looms loom
Indoors dayless and flourescent
Morning light, afternoon, night
Outside passing

Knotting -hands in a blur
Tiny hands
Calloused white
Flayed open, deep and unhealing

A hard shared bench
Songs and friends
No school time or play time
A young girl weaves carpets

A ballad: village life and laments
A brokers' ugly words
Violating like a knife
Her face bowed and shamed

Deep breaths of heavy particled air
A pale face, absent eyes
What is she thinking?
Her hands in a blur

These aspects of capitalism have been around since its inception and continue, wherever business has the power to impose them. As Marx points out, if you really want to understand capitalism (or any other social system of class domination) study it where it exists with the fewest constraints. (26)

Recommended Further Reading

Concepts for Review

    usurer's capital
    merchant's capital
    industrial capital
    national debt
    veiled slavery
    East India Company
    bank notes
    child stealing

Questions for Review

(An * means that one possible answer to that question can be found at the end of the study guide.)

1. What are the two paths along which the industrial capitalist appears? Which does Marx think is the more important?

2. How are usurer's and merchant capital different from industrial capital? What were the obstacles to the former being turned into the latter?

3. What does Marx characterize as the "chief moments of primitive accumulation"? Why chief?

4. What are the "different moments" of primitive accumulation which are "systematically combined together at the end of the 17th Century in England? Discuss their relationships to each other.

5. Discuss: "Force is the midwife of every old society which is pregnant with a new one. It is itself an economic power." (p. 916)

*6. In this chapter we have a whole discussion of colonialism - a phenomenon only mentioned in a footnote in Chap.30. Describe the ways in which colonialism constitutes a world wide extension of primitive accumulation as well as a part of it in England.

7. In footnote 4 Marx says: "This stuff (on slavery, etc.) ought to be studied in detail, to see what the bourgeois makes of himself and of the worker when he can model the world according to his own image without any interference." What does this suggest methodologically with respect to understanding the most fundamental nature of capitalism? What does it suggest about the transformations of capitalism that have occurred since "the bourgeois" could shape the world "without interference"? What is the primary source of "interference"?

8. List the ways Marx discusses through which capital is able to use the state for its own purposes during this period.

9. Were you aware that the Puritains started the practice of paying money for Indian scalps? Why were the Indians killed instead of being put to work?

10. How did British colonialism cause famine and starvation in India?

11. Discuss the relation between industrial and commercial development in the period of manufacture and in that of industry.

*12. Describe the creation and operation of national debt. How does it act to concentrate wealth in the hands of capitalists at the expense of others? Is this still a characteristic of ongoing as opposed to primitive accumulation? What do you think is the impact of the current $200 billion debt on this process?

13. How did national debt give rise to joint-stock companies, stock exchange gambling and "the modern bankocracy"?

*14. What was the role of the "international credit system" in primitive accumulation? Explain Marx's examples. What do you imagine is its role today? Do you think Marx's comment - "A great deal of capital, which appears today in the United States without any birth-certificate, was yesterday, in England (or elsewhere), the capitalized blood of children." - is still true?

15. Why do you think DeWitt thought that the modern tax system was "the best system for making the wage-laborer submissive, frugal, industrious . . . and overburdened with work"? Discuss the analogy with the hut tax in the colonies. Do you think this is still true? How? How do some argue that this is now changed, that higher taxes make people less willing to work? What makes such a change possible?

16. Discuss the process Marx describes through which the emerging capitalist countries sought to "forcibly uproot all industries in the neighboring dependent countries." Does this still go on?

17. Between the old precapitalist society and the full development of the emerging system was a long period in which force and brutal coercion played as much or more of a role than the market in mobilization of people into the labor force. What information does Marx give us in this chapter that illustrates that use of force?

18. With the rise of large-scale industry what changes in the processes Marx is describing?

19. Sketch the exploitation of children Marx describes in this chapter. Do you know when this ended in the United States - if you don't go to the PCL and look up a bit of history of child labor laws.

*20. From Marx's analysis in this chapter, how would you characterize the place of slavery in relationship to capitalism in this period. Did slavery constitute a separate mode of production, an integral part of North Atlantic capitalism, or what?

21. From what you have read here, and from what you have read elsewhere do you think Marx exaggerates when he says: ". . .capital comes (into the world) dripping from head to toe, from every pore with blood and dirt." Just how good a metaphor for the birth of capital is the chest burster of "Alien"? How bloodstained do you think capitalism is today? How fresh are the stains?


1 The term neo-conservative was adopted in the United States by conservatives who wanted to differentiate themselves not only from “liberals” (which in the US has come to mean vaguely socially progressive) but also from earlier moderate conservatives. Self-proclaimed neo-conservatives emerged on the public scene with the crisis of Keynesianism whose managers— members of what some used to call the Establishment—tended include both “liberals” and “mainstream or moderate conservatives” (as opposed to far-right groups like the John Birch Society and the China Lobby). The neo-conservatives, backed by considerable right-wing money began to build alternative policymaking institutions—such as the Heritage Foundation—and proclaim a “return to first principles,” namely a faith in markets and opposition to all government programs benefiting workers. First in Latin American, now pretty much everywhere, the term neoliberal has been used to characterize the policies of those neo-conservatives. The term neoliberal evokes a contemporary version of 19th Century liberalism, i.e., the ideology of free trade and faith that markets were the best way to solve most problems—coupled, of course, with the use of the state for the repression of workers’ struggles. The worldwide adoption of the term neoliberal accelerated in the wake of the Zapatistas’ multinational Encounters against Neoliberalism and for Humanity in 1996 and 1997.

2 The "other path" in the title of De Soto's first and best known book El Otro Sendero (1989) was "other" to that of the revolutionary Sendero Luminosa (Shining Path) guerrilla group in Peru. In it De Soto called for the liberation of the entrepreneurial abilities of the inhabitants of Peru's (and of the Global South more generally) informal sectors from government regulation. Where he saw teeming multitudes of potential entrepreneurial capitalists, others, such as Mexican grassroots activist Gustavo Esteva saw yet other, often anti-capitalist, paths to social reform. See Esteva's "Regenerating People's Space," Alternatives XII, 1987, pp. 125-152.

3 Capital, Vol. I, p. 914.

4 Socially speaking, real "wealth" in capitalism is not gold or money but social power, the power of capital to command people's lives as labor. Thus, the colonial plundering of gold or other non-human material resources was secondary to the imposition of work on the colonized and the use of the colonized to reinforce the imposition of work within the colonial country.

5 Capital, Vol. I, p. 917.

6 See Brian Murton, "VI.4: Famine", in K. F. Kiple and K. C. Ornelas (eds.), The Cambridge World History of Food, New York: Cambridge University Press, 2000, pp. 1411-1427.

7 See Judith Van Allen, "Sitting on a Man: Colonialism and the Lost Political Institutions of Igbo Women", Canadian Journal of African Studies, vol. VI, no. ii, 1972, pp. 165-181, and the Wikipedia entry on the Abeokuta Women's Revolt.

8 The colonies, Marx wrote, “provided a market for the budding manufactures.” Capital, Vol. I, p. 918.

9 See Michael Edwards, Growth of the British Cotton Trade 1780–1815, New York: Augustus M. Kelley Publishers, 1976.

10 MECW, Vol. 6, pp. 487–488.

11 Classic were the British wars to force China to accept British exports of opium.

12 Friedrich List, The National System of Political Economy (1841), New York: Garland Publishing, 1974.

13 "Speech on the Question of Free Trade", January 9, 1848, MECW, Vol. 6, pp. 463-465.

14 The 1969 film Burn!, is a story of imperialist rivalry over control of slaves and sugar production on one Caribbean island. One power brings in an agent—played by Marlon Brando—to organize a slave revolt to undermine another power's control. After the revolt succeeds, Brando is brought back in to put down the rebellious slaves. To do so, he burns down the island with all its sugar cane fields. The film is both historical AND an allagory of the war in Vietnam where one general infamously stated about the distruction of a village, that he had to destroy it to save it! Because the allegory was so clear, the film was quickly blacklisted and disappeared from theatres—despite its famous star. Sidney W. Mintz’s Sweetness and Power: The Place of Sugar in Modern History, New York: Penguin, 1985 may lack the visual drama of film but the history it recounts is every bit as dramatic.

15 Reduced barriers to capital investment, achieved through the rules of the International Monetary Fund, created in 1945, also facilitated a wave of investment by increasingly multinational “American” corporations.

16 For a dramatic exploration of the consequences to Flint, Michigan of such displacement, watch Michael Moore's film Roger and Me (1989) about the results of General Motors moving auto plants and some 30,000 jobs to Mexico.

17 For a capitalist view of the dangers of such international grassroots mobilization, see Cathryn Thorup, "The Politics of Free Trade and the Dynamics of Cross-Border Coalitions in U.S. Mexican Relations", Columbia Journal of World Business, vol. XXVI, no. 11, Summer 1991, pp. 12-26.

18 Capital, Vol. I, p. 919.

19 A study of Marx’s examination of the Crédit Mobilier can be found in Joseph Ricciardi, “Essays on the Role of Money and Finance in Economic Development”, University of Texas at Austin, PhD dissertation, 1985, some of which was more recently published as “Marx on Financial Intermediation: Lessons from the French Crédit Mobilier in the New York Daily Tribune”, Science & Society, Vol. 79, no. 4, October 2015, pp. 497–526. Marx’s writings on this subject are now easily available in MECW, Vol. 15 and thereabouts.

20 See Anthony Bianco, “The Casino Society: Playing with Fire”, BusinessWeek, September 16, 1985 and Susan Strange, Casino Capitalism, New York: Basil Blackwell, 1986.

21 See Scott Nearing and Joseph Freeman, Dollar Diplomacy: A Study in American Imperialism, New York Monthly Review Press, 1966.

22 See Cleaver, "Close the IMF, Abolish Debt and End Development: a Class Analysis of the International Debt Crisis", Capital & Class, vol. 13, issue 3, no. 39, Winter 1989, pp. 17-50.

23 This infamous pattern is now known as the “Atlantic triangular slave trade.” Manufactured goods were traded in Africa for slaves. Slaves were traded to the Western Hemisphere for raw materials. Raw materials were traded to New England, Britain and Europe.

24 If slavery involves legally enforced, unpaid labor, then we should include two other groups of incarcerated workers: children in schools and prisoners in both public and private jails—even if individuals are being neither bought nor sold.

25 Those reports include an ILO textbook well worth reading. It has many illustrations and personal testimony from children as well as analysis of the depth of the problem. One such group, the Concerned Center of Child Workers in Nepal, publishes a newsletter (Voice of Child Workers) in which you can find ample illustration of the extent of the problem in that country.

26 Capital, Vol. I, p. 916, footnote 4.