|Accumulation by dispossession
A critical assessment
By Geoff Bailey
Issue #95: Features
An estimated 400,000 workers cycle every day through the mammoth Foxconn factory complex in Shenzhen, China. The average worker passing through those gates is a twenty-three-year-old young woman who has only recently left behind rural life for the city. She is part of an estimated 10 million young migrants who work in China’s factories, who themselves are just a small part of what is the largest human migration in world history: an estimated 130 million migrants who supply the labor for China’s booming economy.1 Inside the factories they often work 13-hour shifts, seven-days-a-week. They are docked pay for showing up late, being sick, talking, or going to the bathroom. They are subject to harassment, intimidation, and sexual violence. Inside the factory, the conditions would be recognizable to any mill-hand who had worked in William Blake’s “dark satanic mills” of nineteenth-century Manchester, London, or Lowell. Outside, the modern stands uneasily side-by-side with the past:
The innards of a mountain spill out, red-earthed and raw, where its face was blasted away; exit ramps off the highway disappear in fields of marshy weeds. A brand-new corporate headquarters looks out on rice paddies, fishponds, and duck farms; miraculously, people are still farming here.2
From the warehouses of these immense factories emerge $47 billion worth of iPhones and iPads each year, manufactured by young women often making less than $300 a month.
We live in a world of jarring juxtapositions between future and past: a world symbolized at once by iPhones and collateralized debt obligations, while at the same time Africa is being (re)divided in a repeat of an imperial land grab (although this time it is China and the United States that have replaced the Europeans) and in Latin America there is wholesale dispossession of indigenous communities and the privatization of basic elements like water and fuel. We seem to be moving simultaneously into a new era of capital even as older, more naked displays of class power have reemerged from the past. It is the age of the transnational robber baron.
One of the challenges for Marxists is to separate what is distinct about this moment in time from what remains consistent with earlier eras of capitalism. David Harvey is probably the most widely read Marxist scholar to contribute to that goal, analyzing a dizzying array of topics from the structure of Marx’s Capital,3 to the theorization and history of neoliberalism,4 to the changing nature of imperialism,5to a theory of Marxist urbanism,6 all while continuing to defend the relevance and necessity of Marx’s revolutionary method to both understand and, ultimately, transform the world we live in.
One of his most influential recent contributions has been the theory of “accumulation by dispossession,” in which he describes the ways capitalism uses force and theft to rob the world of value—both human beings and nature—in its insatiable quest for profit. As Harvey writes in A Brief History of Neoliberalism, the theory is a critical extension of Marx’s writings on primitive accumulation:
By this I mean the continuation and proliferation of accumulation practices which Marx had treated of as “primitive” or “original” during the rise of capitalism. These include the commodification and privatization of land and the forceful expulsion of peasant populations (compare the cases, described above, of Mexico and of China, where 70 million peasants are thought to have been displaced in recent times); conversion of various forms of property rights (common, collective, state, etc.) into exclusive private property rights (most spectacularly represented by China); suppression of rights to the commons; commodification of labour power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neocolonial, and imperial processes of appropriation of assets (including natural resources); monetization of exchange and taxation, particularly of land; the slave trade (which continues particularly in the sex industry); and usury, the national debt and, most devastating of all, the use of the credit system as a radical means of accumulation by dispossession.7
He goes on to explore the ways in which these practices have been integrated into the ongoing evolution of capitalism and argues that alongside the exploitation of workers and the extraction of surplus value, there is simple plunder: the naked transfer of wealth from the world’s working class and poor to the ruling class. Additionally, this alternate mechanism of accumulation has become increasingly central to the functioning of capitalism under neoliberalism.
It is a sweeping theory that aims to give coherence to a wide range of predatory policies with the intent of showing the ways they are rooted in the fundamental dynamics of capitalism—in the words of Rosa Luxemburg, to separate from “within the tangle of violence and contests of power, the stern laws of the economic process.”8 And perhaps just as importantly, to show that, “The struggles [against exploitation] . . . have to be seen in a dialectical relation with the struggles against accumulation by dispossession that the social movements coalescing within the anti- and alternative globalization movements are primarily focusing upon.”9
The speed at which the theory has become part of the accepted framework of large parts of the Left says something about its descriptive power. The theory captures an important facet of the way we experience capitalism today: it does feel as if there something more primitive—more brutish and violent—to the way capitalism is stripping the world of resources and turning everything, including the very air and water themselves, into commodities. The theory has deepened our understanding of the uneven ways capitalism has evolved over time and geographically across the globe and highlighted ways in which neoliberalism represents an important break from the earlier period of state-dominated capital that held from the end of the Great Depression until the early 1970s. In doing so, Harvey has focused the attention of radicals and revolutionaries on the sites of key battles against neoliberal capitalism and directs our attention to the struggles of non-proletarian, oppressed classes and peoples, and attempts to find ways to link them to the power of the organized working class.
However, the overly expansive way that Harvey frames the theory weakens his stated goal of showing how they are ultimately connected. A more precise exploration of the ways in which capitalist expansion and dispossession are intertwined can strengthen the argument that dispossession cannot be separated from the overall dynamics of capitalist society and provide insights into ways in which struggles against dispossession can be connected to struggles against exploitation.
Growth by theft
Harvey draws heavily (though critically) on Rosa Luxemburg’s work The Accumulation of Capital, in which she criticized Marx’s treatment of the circulation of commodities and (implicitly) his analysis of “primitive accumulation.” Throughout Volume 2 of Capital, Marx explores what he calls “expanded reproduction,” in which he presents, in very abstract terms, the way in which a portion of realized surplus value (a portion of the value that is realized once a commodity is sold in the marketplace) could be reinvested back into the expansion of further production (new factories and more workers) in an ever-expanding cycle. The schema was not meant to be an accurate representation of the real world—most of Volume 3 of Capital would be devoted to showing the myriad ways that cycle could and would break down—but rather to show that ongoing expansion was possible and coupled with competition between rival capitals that accumulation would become the driving force in capitalist society. For Marx, it was the essential difference between “hoarding,” which had been common to all class societies, and capitalism’s relentless drive to accumulate.
Luxemburg, however, contended that there was a fundamental flaw in his model. She noted that capitalists always produced more than they paid out for raw materials and workers’ wages. Surplus value existed precisely because they forced workers to produce more than they were paid in wages. So, she asks: “who purchases the surplus?” In the model presented in Capital, which assumed an economy of only workers and capitalists, workers can’t purchase it; they have already spent their wages on their own reproduction (food, shelter, etc.). The capitalists can’t purchase it all for their own consumption or we’re simply back to hoarding instead of ever-expanding capitalist accumulation. According to Luxemburg, within the bounds set by Marx’s model, there is no one to purchase the surplus and therefore no way for the capitalists to convert that surplus back into new machinery and more workers. The continued expansion of the system, she argued, is impossible unless capitalism can conquer something outside itself. “Capitalism needs non-capitalist strata as a market for its surplus value,” she argued, “as a source of supply for its means of production and as a reservoir of labor power for its wage system.10
However, precisely because such strata exist outside the system, capitalism has few means of market coercion with which to force entrance:
In all social organizations where natural economy, common ownership of the land, a feudal system of bondage or anything of this nature, economic organization is essentially in response to the internal demand; and therefore there is no demand, or very little, for foreign goods, and also, as a rule, no surplus production, or at least no urgent need to dispose of surplus products.11
And so capitalism must resort to force and conquest to open up these “outside spheres.” Here she criticizes Marx for treating this process as something limited to the dawn of capitalism:
Admittedly, Marx dealt in detail with the process of appropriating non-capitalist means of production as well as with the transformation of the peasants into a capitalist proletariat . . . Yet . . . for Marx, these processes are incidental, illustrating merely the genesis of capital, its first appearance in the world . . . As soon as he comes to analyze the capitalist process of production and circulation, he reaffirms the universal and exclusive domination of capitalist production.12
In his discussion of “primitive accumulation,” Marx had argued that force and theft had been necessary to establish the conditions for capital accumulation. When peasants had access to their own means of production, there was little compulsion to work for wages for a capitalist, and the capitalists had little economic leverage to force them to do so. Instead, the forceful expropriation of land was required to separate peasants from their land and create the economic compulsion for them to work as proletarians for the capitalists. Contrary to earlier writers like Adam Smith who had stressed a peaceful process by which some people saved their pennies in order to invest their savings in production, Marx argued that:
The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black skins, signaled the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief moments of primitive accumulation.13
It was not their savings but their savagery that allowed the early capitalists to create the conditions for the expansion and reproduction of capitalist accumulation.
Marx outlined a number of different practices at work in this process, including the separation of peasants from their land, the suppression of the commons, usury, the credit system, the national debt, the slave trade, and early colonialism, but they all had in common the use of extra-economic coercion (often in the form of state power) to create the necessary conditions for the reproduction of capitalist relations. Once established, however, the capitalist economy created its own set of compulsions. Capitalists were locked into competition with one another that compelled them to expand production and escalate the exploitation of their workers in search of larger and large profits. And once workers had no other means of subsistence, they were compelled to sell their labor power in return for a wage; they were “free to work or to starve.”
But for Luxemburg this “process of appropriating non-capitalist means of production” was the key to solving what she saw as the inability of capitalism to reproduce itself. By forcibly opening up new markets, capitalism could find outlets for surplus it would otherwise be unable to realize. Theft and predation couldn’t be relegated into the past of capitalism’s history, but were an ongoing part of it.
Harvey, like writers such as Nikolai Bukharin and Henryk Grossman before him, rejects a number of key points in Luxemburg’s arguments.14 He points out that capitalism can, at least at the abstract level that Marx is describing, provide a market for the additional surplus through its own expansion (although at a more concrete level of functioning there will be many things that prevent it from doing so and lead to economic crisis).15 As Roman Rosdolsky writes: “Marx’s model was simply a tool for showing the conditions for equilibrium in an expanding capitalist economy in their pure form.”16 The goal of the model was to show that if “certain conditions . . . are observed, all commodities are sold at their value and no over-production of commodities would occur. That is, the general cause of the capitalist crisis does not lie in the circulation process.”17 The schema wasn’t a description of capitalist crisis, but a proof that at this level of abstraction, the origins of that crisis had to be found elsewhere.18 Marx would lay out his theory of crisis only in Volume 3 of Capital.
Additionally, it can be clearly shown that the main flows of capital even in Luxemburg’s time were not between the imperial centers and their colonies, but within the imperial north.19 To be sure, capitalism (then, as now) was not above plundering entire continents, but the source of the bulk of profit remained exploitation of workers at home. And finally, whatever might have been true in Luxemburg’s time, today there are very few places on the planet that could be said to be “outside” the system. If Luxemburg was right, capitalism should have long ago ceased to operate.
Harvey thus rejects Luxemburg’s insistence that expanded reproduction is not possible and that primitive accumulation is necessary for the system to work at all, instead seeing a dialectical relationship between expanded reproduction on one side and plunder and theft on the other—on one side capitalist expansion and on the other dispossession. However, he argues that she was right to stress the ways in which force and predation continue and complement the process of expanded reproduction even in a fully developed capitalist economy. “The idea that some sort of ‘outside’ is necessary for the stabilization of capitalism therefore has relevance,” he writes. “But capitalism can either make use of some pre-existing outside (non-capitalist social formations or some sector within capitalism—such as education—that has not yet been proletarianized) or it can actively manufacture it.”20 But as he points out, recognizing the ongoing role of force and theft doesn’t require a reworking of Capital. Marx was not unaware that fraud and plunder continued under capitalism,21but the structure of Capital largely precludes it from his discussion. As Harvey notes, a number of assumptions made by Marx in his analysis of capital force him to “relegate accumulation based upon predation, fraud, and violence to an ‘original stage’ that is considered no longer relevant or, as with Luxemburg, as being somehow ‘outside of’ capitalism as a closed system.22
A discussion of the ongoing fraud and theft that goes on persistently under capitalism is largely missing from Capital because, as Harvey has written himself, Capital is not a complete portrait of the capitalist system; it is a critique of political economy—an attempt to show that even if we accept a number of conditions demanded by liberal economists—namely free markets, a pure system of only workers and capitalists, and most importantly for our purposes, the assumption that all commodities are purchased at their full value—the result is not trickle-down economics or the invisible hand gently leading us to a more equal future, but greater inequality, poverty, and misery for the majority, while a tiny minority reap billions.23 Marx is trying to show that even if you could get rid of theft and corruption (which he believes capitalism is incapable of doing), you would still be left with a system based on exploitation and class struggle. Capitalism may produce the Bernie Madoffs of our world, but it can’t be reduced to them.
In highlighting the ways force and plunder have complemented and amplified the expansion of capitalism, Harvey and Luxemburg focus our attention on the complex and ruthless ways capitalism has interacted with the periphery. And they highlight the role of the state in bolstering capitalism’s conquest of the globe in a way that complements the works of others in the Marxist transition, like V. I. Lenin, Nikolai Bukharin, M. N. Roy, and others.24 It is when Harvey applies these insights to the neoliberal period that questions arise about the way in which he has framed the theory.
A brave new world
While accumulation by dispossession has always been a feature of capitalism, Harvey argues, it became increasingly significant during the long period of economic crisis beginning in the 1970s that continues to this day. Faced with a crisis of profitability—a crisis in its ability to generate profit through the exploitation of labor—capital has tried to solve the crisis by increasingly turning to fraud, plunder, and predation. “What accumulation by dispossession does is to release a set of assets (including labour power) at very low (and in some instances zero) cost,” he writes. “Overaccumulated capital can seize hold of such assets and immediately turn them to profitable use.”25
Harvey lists a dizzying array of contemporary examples of what he sees as this alternate process of accumulation. He describes the privatization of what used to be public services into profit-making enterprises: water, education, health care, and in Eastern Europe the selling off of entire national economies, the use of the international credit system (especially the IMF/World Bank) as a means of forcibly transferring wealth from the Global South to the economies of the North, and the use of intellectual property rights to commodify what was once knowledge held in common (for instance, terminator seeds26). He includes the displacement of peasants from their land, and places an emphasis on the theft and transfer of value from one class to another:
Displacement of peasant populations and the formation of a landless proletariat has accelerated in countries such as Mexico and India in the last three decades, many formerly common property resources, such as water, have been privatized (often at World Bank insistence) and brought within the capitalist logic of accumulation, alternative (indigenous and even, in the case of the United States, petty commodity) forms of production and consumption have been suppressed. Nationalized industries have been privatized. Family farming has been taken over by agribusiness. And slavery has not disappeared (particularly in the sex trade).27
However, the way Harvey frames the argument also has its weaknesses. As Robert Brenner noted in a symposium in Historical Materialism devoted to Harvey’s work, Harvey includes in his concept of accumulation by dispossession “a virtual grab bag of processes—by which claims to assets are transferred from one section of capital to another, exploitation of the working class is made worse, or the state moves to privilege its own capitalists at the expense of others—that are quite normal aspects or by-products of the already well-established sway of capital.”28
By expanding the boundaries of the concept so widely as to include such things as “[throwing] workers out of the system at one point in time in order to have them to hand for purposes of accumulation at a later point in time,” the theory risks undermining Marx’s central argument that these things were fundamental consequences of the functioning of a capitalist economy.29
For instance, Harvey points to Enron and its liquidation of its employees’ pensions and closing of unprofitable factories as examples of accumulation by dispossession; but the closure of unprofitable business as a means of restoring profitability is a central part of Marx’s crisis theory. It’s not separate from the creation of surplus value, but a central way capital reestablishes profitability and opens up the possibility for continued expansion.
Even when we seem to be closest to what Marx was describing in his critique of primitive accumulation—the forcing of peasants off their land—we should separate out what is the forcible, extra-economic transfer of wealth and what is the result of small producers being bought out or driven-out of business by larger producers—what Marx described as the concentration and centralization of capital. There are certainly places where force is being used to displace formerly self-sufficient peasants, but in many instances the peasants were producing, at least in part, for the market. As Robert Brenner has written, “The beating out by agribusiness of individual farmers—who have already been living and dying by the whims of the market—is an all-too-familiar aspect of capitalist competition.”30 It leads to social misery of course, but it is very much a part of capitalist expansion. Harvey himself has written in a response to Brenner of the need to further differentiate the practices involved:
Brenner is probably right to complain that I inflate the idea [of accumulation by dispossession] somewhat . . . The dispossession of family farms in the US may be better understood in terms of the normal transfers of wealth and power that occur through the concentration and centralization of capital. I am not so sure, however, when it comes to the use of eminent domain to take over housing in high-value locations for the benefit of developers and the big chain stores.31
What is crucial is the distinction between the workings of the capitalist economy in its quest for profit and the numerous ways in which the state uses extra-economic compulsion to augment and accelerate that process. We should be careful to not blur the two even if both are often at work.
In southeast China, for instance, where the most compelling case can be made for a process that seems to mirror what Marx described in his treatment of primitive accumulation, there are numerous instances where large numbers of peasants are being forcibly dispossessed (the displacement of 1.2 million people by the construction of the Three Rivers Gorge dam project is the most well-known). However, the vast majority of migrants are the children of peasants who move (often in what is initially seen as a temporary move) to the city to augment the family income of small producers back home.32 While the use of force is sometimes an accompanying factor (and in some areas may be the dominant factor), the majority of migrants are also responding to market pressures, albeit ones heavily managed by the Chinese state. By eliding different practices and combining it all under the rubric of “accumulation by dispossession,” we ignore some of the real challenges and (as will be seen in the next section) risk overlooking some of the real possibilities that confront us in this moment.
Take again the issue of privatization: perhaps the most famous fight against privatization in recent years is the struggle against the privatization of water in Cochabamba, Bolivia. At one level, it appears as a textbook case of dispossession: a foreign multinational (Bechtel) attempts to use its imperial weight backed by the American state to take control of public water resources and convert water into a for-profit commodity. However, it is not the case that Cochabamba’s water had ever existed completely outside the market. Prior to the arrival of Bechtel, water resources in Cochabamba had been managed by the local state water utility (SEMAPA). Nationally, investment in water resources had for decades been concentrated in the more economically developed regions of the country, leaving SEMAPA nearly $30 million in debt and able to service only about half of the city’s residents. Beyond the reach of the utility, water needs were met by a patchwork of local and communal water resources and private water traders who sold water at exorbitantly high rates (though not nearly what Bechtel would try to charge).33
In the attempted privatization of SEMAPA by Bechtel and the Bolivian state, then, there are several interrelated things happening: both the dispossession and commodification of communal water resources, the concentration and centralization of capital through the displacement of petty commodity traders by a larger capitalist, and the transfer of value from one section of the ruling class (in the form of the Bolivian state) to another (in the form of the ownership of Bechtel).34 The U.S. state, of course, uses its powers of coercion to facilitate such deals, but the Bolivian ruling class also has its own reasons for favoring them that have much to do with the economic imperative of securing access to foreign capital and servicing internal and foreign debts. Thus there are aspects of extra-economic coercion and outright dispossession, as well as the types of economic competition and reorganization that are the typical workings of the capitalist economy.
Cochabamba also illustrates the need to be specific about the relationship between private capital and capital that is state-owned or organized around state-directed social services. There are many cases where state-owned industries are simply large capitalist units complete with “managerial hierarchies, multi-branch structures, and workforces largely composed of subordinate wage-laborers, despite being publicly owned.”35 The privatization of these industries doesn’t in any way represent a transfer of value from “outside” the system to “inside.” At best, we are witnessing the transfer of value from one section of the ruling class to another (although in many cases it is the same people who end up with the resources having traded their “public” uniforms for “private” ones).
Then there are services that are administered by the state as part of the process of social reproduction (health care, education, some public utilities). To the degree that public administration removes the burden of paying for these socially necessary functions and instead provides them collectively through the state, they can represent a degree of “de-commodification,” but we shouldn’t exaggerate the degree to which these services are “outside” the system. As Alex Callinicos and Sam Ashman note:
The limitation thus imposed on the logic of the market, and the fact that it was frequently introduced under pressure from below explains the immense political investment made in the welfare state by the labor movement—for example, the National Health Service in Britain, and the bitter resistance that attempts to reduce its scope tend to evoke. This does not, however, alter the fact that collective provision still reproduced labor-power in the form of the commodity wage-labor, providing capital with a relatively healthy and educated workforce and financed out of taxation that, as various studies have shown, fell largely on earnings. The extent of “decommodification” should therefore not be exaggerated: it is typically closely interwoven with commodification.36
An unfortunate legacy of both Social Democracy and Stalinism is the all-too-easy identification of state ownership with an end to market compulsion. Though the state may mitigate against aspects of the market, even in the Stalinist states where the fusion between state and capital was most complete, it is never fully able to remove itself.
So while Harvey is no doubt right that dispossession is an ongoing feature of capitalism and that it has taken a more prominent role under neoliberalism, it seems productive to try to separate out which practices are aimed at the forcible transfer of wealth from one class to another or from “outside” the system, and which practices are the logical outgrowth of capitalism’s relentless expansionary drive.