Chapter 33: The Modern Theory of Colonialism

Outline of Marx's Analysis


Three interesting dimensions to Marx's analysis stand out. First, the chapter extends his previous comments on the hypocrisy of capitalist ideology of private property Wakefield's work illustrates clearly how that ideology is set aside when it becomes an obstacle to capital accumulation.(1) Second, it expands his analysis of colonialism in Chapter 31. Third, his reading of Wakefield provides a political methodology for reading other economists.

Land and Power

By demonstrating an acute awareness of how access to land helps people resist the labor market and wage labor, Wakefield confirms Marx's analysis in Chapter 27 of the capitalist use of expropriation. Unlike England, in Australia and in North America, there was too much land to enclose. Immigrants—both those fleeing capital's depredations in Europe and those transported as criminals—fled to unenclosed land to avoid the clutches of waged labor. This goes far toward illuminating the drama of past and current struggles over land tenure and its reform around the world. Unfortunately, the backdrop to this story of struggle between colonizing capitalists and immigrant workers in Australia and in North America, was the expropriation, slaughter and displacement of the aboriginal population.

As we have seen, the struggle over land did not end with the establishment of capitalism. To begin with, the elimination of smallholding peasants and farmers was often very incomplete. Where the incompleteness was substantial, there has been ongoing conflict between small farmers and capitalists over control of land. On the whole, small farmers have lost; their numbers and the proportion of land under their control has declined more or less continuously. But this history of defeat has included dogged resis¬tance. Even today small farmers continue to fight against their expulsion from the land.

At the same time, a great many of the dispossessed, all around the world, have fought to regain what they, or their ancestors, have lost. In some countries, they have achieved considerable success, either through revolutionary or, sometimes, legal means. One important example is Mexico. In the first decades of the twentieth century, the struggle for land was a central issue during the Mexican revolution. Millions of peasants mobilized in 1910 not only to overthrow the Porfiriato, but to retake lands that had been stolen from them since colonial times. In 1934, from the government of Lázaro Cárdenas, they won the redistribution of millions of acres of land to ejidos—a fundamental reorganization of land tenure from private to unalienable communal property. For decades following that redistribution, capitalists renewed their efforts to once again monopolize land. Finally, in 1991, Mexican President Salinas railroaded through a change in the constitution undermining the legal protections for ejidal lands—as one giveaway in negotiations over NAFTA. Three years later, Mexican campesinos rose up once again, this time in the form of the EZLN. That rebellion, launched on January 1, 1994, the same day NAFTA went into effect, constituted what indigenous communities in the southern state of Chiapas saw as a life-or-death effort to defend their land, their communities and their ways of life.

Other major examples of peasant revolt in the twentieth century—always including the fight for land—included, most notably, the revolutions in Russia and in China. Despite the way local, revolutionary Marxists argued for the “leading role” of the industrial proletariat in those countries, they were well aware that the vast majority of the population demanding change were peasants. Slogans including “Land and Bread” were designed to appeal to both peasants and industrial workers. Peasant struggles for land also played a key role in many decolonization movements, e.g., India, Vietnam, as well as in battles for land reforms in the post-colonial period. Such struggles continue today all around the world.

Despite such overwhelming evidence of the ability of peasants to mobilize, many “orthodox” Marxists have attacked small landholders, farmers and peasants as structurally reactionary. They have emphasized Marx and Engels’s comments on the failure of peasant revolts in Germany, on the limitations of growth potential in English smallholdings, and on the politics of peasants in France.(2) Doing so justified systematically subordinating peasant needs and desires to what they viewed as more progressive objectives of the factory proletariat.(3) The results in the Soviet Union, in China and elsewhere has been to turn Marxism into an ideology of rural expropriation via collectivization and state control.

Yet, here, as in his comments cited earlier about the Russian peasant commune, we see Marx's appreciation of the advantages of personal property in the land and its associated means of production. In commenting on Wakefield, he emphasizes how control over land "is the secret. . . of the prosperity of the colonies." He points out how Wakefield admits that this control benefits small farmers: "He depicts the mass of the American people as well-to-do, independent, enterprising and comparatively cultured, whereas 'the English agricultural laborer [with no land] is a miserable wretch, a pauper.'"(4) While it is certain that Marx was no Jeffersonian romantic dreaming that all life should be organized around the small farm, it is nevertheless clear that he understood both the benefits and the power that people derive from being self-sufficient and not dependent on capitalists for a wage. Orthodox Marxist-Leninists in the USSR, who justified forced collectivization as "primitive socialist accumulation," understood this as well. Like Mr. Wakefield, they sought to subordinate peasants' labor-power to the accumulation of capital. Unfortunately for their plans, the allocation of small subsistence plots of land to Russian peasants gave them a vital resource to resist their exploitation on collective and state farms. Both Soviet planners, in their day, and Chinese Communist Party leaders were forced, time and again, to capitulate to the long war of attrition peasants have carried out based, in part, on their little plots of land. The struggles have continued in the post-Soviet era in Russia, in Eastern Europe and in China.

Reading Bourgeois Economics Politically

Marx's treatment of Wakefield provides us a paradigm for reading the writings of economists. Unlike many critics who tend to focus on the ideological aspect of capitalist thought, Marx focuses on the strategic meaning of Wakefield's ideas. He is primarily interested in the strategies and tactics that Wakefield proposes for gaining control over workers. Marx's presentation in Capital provides us with an insight into the class content of such approaches and the dangers they represent.(5) Here Marx provides a report on the enemy's strategy that both makes sense of some workers' behavior on the battlefields of the class war and provides insights that can guide that of others.(6)

In some sub-fields of economics, such as “development” economics (the contemporary counterpart of Wakefield’s work), the strategic content of economic theory is often very clear. For example, in my commentary on Chapter 29, I highlight the work of W. A. Lewis who wrote about how to use money and inflation against workers to the benefit of capitalists. In other sub-fields, this content is often less clear and must be deciphered. For example, in Keynesian macroeconomics, aggregation tends to hide class relations in nebulous categories. “Consumption,” for example, denotes not just the expenditure of working-class wages and salaries on consumption goods and services but includes that of all receivers of income. Similarly, “savings” includes not only the unexpended income of “households” but retained profits of corporations. Nevertheless, by studying the evolution of the theory within the historical context of class struggle, we can decode such concepts and discover their class meaning.

For example, we can recognize in the centrality of the “consumption function,” and of “demand” more generally, Keynes’s response to the changing balance of class power in the 1920s and 1930s. His theoretical concepts expressed his recognition of a situation in which working-class wages could no longer be usefully viewed simply in terms of costs—to be held down as much as possible—but had to be understood as the main source of markets for final output. As such, he pointed out how their increase can induce capitalist investment and accumulation. Keynes’s genius lay in seeing how, when they could no longer be repressed, workers’ demands for wages, unemployment compensation and social security could be harnessed for capitalist development.

Keynes’s own ability to read pre-Keynesian economic theory politically can be seen in his reactions to the return of the pound to the gold standard after World War I. In a remarkable series of articles entitled “The Economic Consequences of Mr. Churchill” (1925), Keynes forced into public scrutiny and debate the strategic class meaning of the return to gold.(7) As he showed, it was no mere technical adjustment, but required a direct attack on working-class wages—an attack which could not be publicly admitted but which would inevitably generate a highly unpopular class war. Although he was no Marxist, his political reading of this international monetary policy is very similar, methodologically, to Marx's reading of Wakefield. This kind of reading turns the study of economic theory into an adventure in class espionage. Making clear how economics functions as a tool of capitalist management, facilitates our understanding of the strategies that are being woven against us and thus finding ways to defend ourselves.

Recommended Further Reading

Concepts for Review

    E. G. Wakefield
    systematic colonization
    independent producer

Questions for Review

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

1. In what ways do "independent" producers constitute "obstacles" to the development of capitalism?

2. How are political economists "sycophants" of capital?

3. Discuss: "He [Wakefield] discovered that capital is not a thing, but a social relation between persons which is mediated through things." "A mule is a machine for spinning cotton. Only in certain relations does it become capital . . . Capital is a social relation of production." (footnote#4)

4. How did Wakefield think the division between workers and capitalist arose in Europe?

*5. How does Marx think that the workings of supply and demand in the labor market are kept within bounds desired by capital? What other methods can you think of for accomplishing that end? Inversely, how might those bounds be breached?

6. What happened to Mr. Peel on the banks of Swan River? What did Mr. Molinari discover to his horror in the West Indies? How are these two series of happenings related?

*7. What was Wakefield's solution to the problem of labor supply? Does it resemble current discussions of immigration in the United States? How?

8. Did Wakefield's solution work? If not why not?


1 For more on Wakefield's work within the evolution of classical political economy, see Michael Perelman's The Invention of Capitalism: Classical Political Economy and the Secret History of Primitive Accumulation, Durham, NC: Duke University Press, 2000, pp. 324-339.

2 Marx’s best-known comments on the peasantry are in his essay “The Eighteenth Brumaire of Louis Bonaparte” (1851), MECW, Vol. 11, pp. 187–192. Engels’s most thorough work on the subject was: “The Peasant War in Germany” (1850) in MECW, Vol. 10, pp. 397–482.

3 Lenin wrote endlessly on the subject, largely as part of an ongoing debate in Russia, first with the Populists and then among the Bolsheviks. On the Bolshevik debates, see Moshe Lewin and Irene Nove, Russian Peasants and Soviet Power, New York: W. W. Norton, 1968, 1975, Chapter 6: “The Party and the Accursed Problem”; and Stephen F. Cohen, Bukharin and the Bolshevik Revolution, New York: Vintage, 1971, Chapter 6: “Bukharinism and the Road to Socialism.” For an overview of the orthodox Marxist tradition (Engels, Lenin, Mao) of anti-peasant analysis, see Chapter 1 in Ann Lucas de Rouffignac, The Contemporary Peasantry in Mexico, New York: Praeger, 1985.

4 Capital, Vol. I, p. 938.

5 Marx spent considerable time and energy analyzing bourgeois economics. The main results can be found in the three volumes of Theories of Surplus Value, but his insights and comments are scattered through many other works.

6 In the introduction to my book Reading Capital Politically, I liken this approach to the portrayal in the movie Patton (1970) of General George Patton’s reading of German Field Marshall Erwin Rommel’s book on tank warfare. Patton read Rommel, not to critique him, but to defeat him.

7 John Maynard Keynes, “The Economic Consequences of Mr. Churchill”, in John Maynard Keynes, Collected Works, Vol. XIII, Cambridge: Cambridge University Press, 1978, pp. 207–230.