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Chapter 2 Modes of Production and Historical Development
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Kriedte: Capitalism and the Dissolution of Feudalism

Peter Kriedte's Peasants, Landlords, and Merchant Capitalists (1983) is a wide-ranging survey of the transition from feudalism to capitalism in Europe from 1500 to 1800. It is of particular value here because Kriedte attempts to explain the transition in terms of Bois's conception of feudal accumulation in agriculture supplemented by an analysis of commerce and manufacturing centered around his own concept of "proto-industrialization." Taking up the process of feudal development approximately where Bois had left it, Kriedte examines the expansion of the sixteenth, the crisis of the seventeenth, and the last feudal up-swing of the eighteenth centuries and demonstrates the continued predominance of feudal agriculture as well as the weakening of feudal relations of production caused by feudal accumulation in both urban and rural sectors—processes that not only created an expanding interregional and international feudal economy and centralized feudal states


but also established the conditions of existence for the birth and growth of capitalist relations of production. Before proceeding with this argument, however, it is necessary to specify the place of manufacture and commerce within the feudal mode of production; that is, we must review Kriedte's position with respect to the classic controversy over the primacy of towns or countryside in the transition from feudalism to capitalism.[16]

Kriedte begins by emphasizing the fact that the feudal countryside, while relatively self-sufficient, was by no means autarchic. Beginning with the agrarian expansion of the twelfth century, towns emerged and proliferated, serving as sites of artisanal manufacture and merchant commerce for the surrounding countryside. The origins of urban communities varied with time and place—some emerging as a result of growing population in the countryside, others as merchant entrepôts along trade routes—but all were feudal, not capitalist, entities. European feudalism developed a significant division of labor between town and country as well as considerable regional specialization in trade and manufacture, but urban environments arose from feudal needs and were themselves feudal in structure. Initially under control of the landed classes who desired a guaranteed supply of low-priced manufactured goods and the revenues accruing to local market monopolies, towns gradually emancipated themselves through feudal alliances and conflicts or by alliances with other towns or, not infrequently, through civil wars. Early towns were based on simple handicraft production and distribution controlled by artisan and trading guilds. The function of feudal towns was to produce for the countryside; there was little inequality between artisan manufacturers and merchants, who were initially peddlers traveling between town and manor.

However, the logic of feudal development favored the merchant, not the artisan, since it was the merchant class that developed and controlled economic exchanges between feudal producers and consumers. Trade in luxury goods catering to the landed elites (who concentrated the purchasing power of the countryside into their own hands) provided the initial source of money accumulation for merchants, an income further augmented by the extension of trade, which created markets both for local production and for local consumption of raw materials; this trade in its turn encouraged additional regional economic specialization and productivity. The logic of money accumulation, however, remained bound by its feudal function of facilitating exchange between lords, peasants, and artisans. Merchants catered to


aristocratic needs and generally had little control over production, which was either foreign to Europe or under the control of petty producers—artisan guilds and peasant cultivators. Thus while feudalism contained a dynamic, profit-oriented commercial class, the logic of profit accumulation turned on control over markets rather than production.

Feudal merchants, Kriedte maintains, were like feudal landlords; they were not so much producers of wealth as they were appropriators of it. Production was in the hands of an organized artisan labor force, which controlled the means of production much as their peasant counterparts did in the countryside, and like the latter, artisans were relatively uninterested in expanding productivity or profits. Craft guilds were monopolies constructed to eliminate competition, fix prices, and keep production behind demand so that all production could be sold. Guilds reacted very little to market incentives, using their monopoly organization to take advantage of peasants in good times and to minimize losses and spread them evenly when times were bad. Merchants, by contrast, were eager to accumulate money and increase the volume of trade, but they, too, remained deeply molded by the feudal relations on which they ultimately depended: their activities were based on their own guild monopolies and corporate charters, while their profits ultimately derived from the surpluses extracted by the seigneurial class. Kriedte, following an admittedly strong Marxist and Weberian tradition, refers to feudal merchants as "commercial capitalists." This terminology seems to me overly teleological in its Marxist form and ahistorical in its Weberian counterpart. While the genesis of capitalism out of feudalism is of obvious significance, it is not explained by simply defining the latter as the embryo of the former. Capitalism is not eternal; neither the accumulation of money nor commercial exchange is necessarily capitalist. Where the profit-accumulating class does not control the means of production, and where there are free markets in neither land nor labor, it is difficult to see the relevance of the term "capitalist." For these reasons, I have avoided the term "merchant capitalism," substituting "feudal commerce," a more appropriate term that nonetheless preserves the gist of Kriedte's argument regarding the significance of urban trade and manufacturing within the feudal mode of production.

Like feudal agriculture, feudal manufacturing and commerce were organized around extra-economic powers and privileges. Merchant guilds were parasitic precisely to the extent that they were legally em-


powered to restrict markets as well as establish them. Merchants amassed enormous fortunes by exploiting price differentials—buying cheap and selling dear—but they were also able to maintain, reproduce, and even increase these differentials by using their wealth and monopoly powers to reinforce the separation of petty producers from their raw materials and consumers, and thus their dependence on the merchant class itself. Merchant wealth rapidly translated into political control by an urban "patriciate" able to counter their lack of control over the process of production by politically shifting the terms of trade in their favor. Urban monopoly power permitted merchants to exclude foreign competitors, colonize the surrounding countryside (by means of tariffs, tolls, and other commercial regulations designed to canalize local trade), and reduce the independence of local producers (by controlling first their access to markets and raw materials, then, after their incomes were sufficiently reduced, their access to credit and working capital). Merchant control over markets worked to keep the prices of things they bought low and the prices of things they sold high. Artisan guilds, like the peasant community, fiercely resisted their subordination, but unlike the peasantry, they lacked sufficient control over the means of production to counteract merchant wealth and organization in the long run. In contrast to the declining rate of the feudal levy in the countryside, urban development demonstrated a steady increase in the merchant "levy" on petty producers ("exploitation through trade" or the differential rent accruing to merchant monopolies).

Merchant wealth meant not only an increasing subordination of craft guilds to their merchant counterparts but also a growing interaction of bourgeois and aristocratic accumulation (the wealthy merchants became tax farmers, revenue collectors, and administrators as well as bankers for the landed classes and the Church). Merchant accumulation translated into royal and aristocratic loans, which in turn produced increased monopoly prerogatives, aristocratic marriages, and the acquisition of seigneurial land holdings for the commercial bourgeoisie. The rise of mercantile fortunes, Kriedte concludes, was not necessarily revolutionary for the feudal mode of production. The life-style and status of the aristocracy remained the "sun" for the highest ranks of the merchant class, which was more prone to the temptations of "feudalization," buying seigneurial property, acquiring aristocratic titles, and so on, than to the hazardous and as yet relatively unprofitable task of pushing beyond commercial and financial activities toward the development of capitalist manufacturing. Despite the constant pressure ex-


erted on the incomes of petty producers by merchant oligarchies, production itself remained largely in artisan hands.

Kriedte acknowledges that the dynamics of craft production and merchant commerce within the feudal mode of production tended to follow the movements of the overwhelmingly dominant agricultural sector. Price movements of manufactured goods undulate with those of basic foodstuffs, but vacillations are less marked since manufactured goods are less subject to diminishing returns and because the demand for manufactured goods is more elastic than the demand for food. The dependence of feudal towns on the agrarian countryside was determined by the relatively low purchasing power of the countryside and the relatively high price of food. However, Kriedte points out, increasing interregional trade during the economic upswing of the sixteenth century concentrated and redistributed European purchasing power to add almost unlimited foreign markets to hitherto limited local demand. Increases in market demand via foreign purchasing power were accompanied by the emergence of global prices and increasing price competition between rival networks of entrepôts and regional producers (each a feudal commercial empire with its own "urban colonial" territories, intra-urban economic organization, and European-wide system of political alliances). Kriedte argues that this sixteenth-century conjuncture of market demand and price competition, coupled with the availability of cheap labor power of smallholders in the countryside, constituted the preconditions for the birth of capitalist relations of production. By the sixteenth century, merchants, like some enclosing landlords, began to shift from speculative gains based on price differentials toward the profits to be made by reducing the costs of production. Merchants, facing both increasing demand and increasing competition, were no longer prepared to accept the production monopoly of the guilds, and in order to evade the relatively high cost of guild labor, they began to move production from the cities to the countryside. This movement toward rural manufacturing, or as Kriedte calls it, "proto-industrialization," constituted the revolutionary breakthrough from feudal to capitalist relations of production.

Thus the birth of capitalism was a result of the confluence of feudal tendencies toward both rural and urban accumulation. The growth of trade, as we have seen, accelerated the dissolution of seigneurial authority and the differentiation of the peasant community. Urban markets were essential to the development of the yeomanry and gentry classes and acted as spurs to the development of both intensive agricul-


ture (monoculture, crop rotation, animal husbandry, and so on) and the expropriation of smallholders. This same growth of trade also promoted class differentiation within the urban environment. First, as we have seen, the growing wealth of a merchant patriciate came to dominate the craft guilds and the surrounding countryside by methods that resembled the extra-economic powers of the seigneurial class. Second, the expansion of trade increased differentiation within the ranks of the producing classes as well. As cyclical expansion and contraction of the local economy gave way to interregional market competition, merchant domination, and, increasingly, competition from village proto-industry, the boundary between masters and "dependent" workers—journeymen and servants—became clearer and less easily crossed. Over the course of time, master craftsmen were able to shut out journeymen from advancing to independent status by adding a variety of expensive and time-consuming "stages" to the process of apprenticeship, stages from which the master's own sons were exempt, however.

Master status became increasingly hereditary from the sixteenth century, and the opportunity for the accumulation of wealth increased accordingly. Parvenu wealth from the producing classes, however, corresponded to the pauperization of growing numbers of journeymen forced to work either for masters as wage laborers without hope of advancement or for themselves in back alleys and garrets in order to escape the regulations and surveillance of the craft guilds. "New men" from the artisan class, employing wage labor, accumulated wealth and power until their wealth was measured in relation to their capital and no longer in relation to their own labor. If they became exceptionally wealthy, these capitalist entrepreneurs sometimes bought their way into a merchant guild, and some even became so powerful as to establish one for themselves, but in the main their access to wealth and power was significantly impeded by the privileges of the merchant oligarchies. Monopoly privileges remained enormously profitable in the sixteenth and seventeenth centuries, of course, but they were also a source of increasing tensions within the ranks of the capitalist classes. Despite such antagonisms, however, smaller, provincial parvenu capitalists, as much as their larger, more established rivals, benefited from an increasing control of capital over production.

Proto-industrialization, the outcome of the decision of merchants to take charge of production, marks for Kriedte the originary moment of the articulation of feudal and capitalist relations of production posited by Rey. Cottage industries converted peasant villages into proto-


industrial villages that covered Europe by the eighteenth century. In such villages petty producers specialized in activities broken down by the greatest practicable division of labor and worked with materials and often even tools provided by merchant-manufacturers who, in contemporary parlance, "employed" or "maintained" them. Not surprisingly, textile manufacturing, next to food the most basic industry for feudal consumers, was the vanguard of the new capitalist production techniques, but capitalist relations of production in mining and other industries were also increasingly evident from the sixteenth century. Although it did not mark the beginnings of this process (we see it as early as the thirteenth century in northern Italy and the Netherlands), the sixteenth century crossed the threshold wherein rural capitalist manufacture became an essential component of the European economy. Although merchant capital continued to dominate the global economy until the nineteenth century (mercantilism being nothing more than urban colonization of the feudal countryside writ large), and despite the fact that capitalist production remained generally less profitable, and thus less attractive, than commercial and financial activities (hence the failure of the Italian and Dutch capitalist experiments), the sixteenth century inaugurated a symbiotic interrelationship between feudal and capitalist relations of production. Henceforth, Kriedte maintains, proto-industrial capitalism would "urbanize the countryside" (Marx), converting smallholders to market producers and consumers and expanding the domestic market for food and other commodities. The expanding market for food encouraged agrarian commercialization and specialization, which in turn created a non-feudal land market and rising market rents, which in turn accelerated the process of agrarian accumulation and peasant differentiation, which in turn increased the labor force of smallholders for rural capitalists. Like the yeoman peasant, the artisan-capitalist multiplied with rising prices and falling wages in the sixteenth century. Finally, the differential cost of labor between the unorganized cottager and the urban guild worker inexorably destroyed the remaining vestiges of feudal relations of production in the cities. The feudal right of workers to a trade was finally destroyed.

It is neither possible nor necessary to review Kriedte's excellent analysis of the sixteenth-century expansion, the seventeenth-century crisis, and the last feudal expansion of the eighteenth century. Suffice it to say that while feudalism continued to predominate, it was being progressively undermined by its own internal dynamic and by the expansion of capitalist relations of production until, by the end of the eighteenth


century, a decisive switch toward the dominance of capitalism was beginning to take place. By 1800, at least in the commercial heartland of Europe, proto-industrialization had become a barrier to the further development of capitalist production. Although rural manufacturing had significantly increased the dependency of the petty producers on the merchant-manufacturer, proto-industrialization was still only a halfway house between independent and wage labor. Whenever cottage households met their subsistence requirements, Kriedte explains, they tended to stop working. During the expansion of the late eighteenth century, the pressure of internal and external demand and the capitalist's desire to increase output ran up against the cottager's desire to curtail production during a boom (since higher prices meant that subsistence requirements could be satisfied in less time with less labor). In addition, Kriedte notes, coordination of elaborate networks of cottage production was becoming increasingly difficult for merchant capitalists. Cottage industry allowed the merchant-manufacturer greater control over the division of labor and created a more efficient, because more integrated, labor process, but beyond a certain point it became impossible to control and supervise producers effectively.

The way out, Kriedte concludes, was greater centralization and greater mechanization, the creation of a new labor process, new work discipline, and a new degree of power over labor for capital. The English cotton industry, facing almost unlimited demand, was the first to tackle this problem, producing the factory system and inaugurating the dominance of the capitalist mode of production—what Rey calls a shift from the manufacturing to the industrial stage of the articulation of feudalism and capitalism. By the end of the eighteenth century, agriculture was still the most important creator of wealth in Europe, but it occupied only 35 percent of the labor force in Britain (65 percent in Prussia, 90 percent in Russia). British industrialization became a factor that accelerated the capitalist revolution in the mode of production on the Continent after 1800. The upswing of the eighteenth century ended with an economic crisis, but it was a crisis of a new type. In the nineteenth century, grain prices began to fall not because population declined, but because too much was being produced; proto-industry lapsed into agonies not because of the disappearance of markets but because of competition from factory production. If the special political power of the landed classes, noted by Rey, was not eliminated during the course of the nineteenth century, it was progressively and dramatically weakened by the transformation of the centralized feudal states of


Europe into parliamentary capitalist regimes that accompanied the subordination of the feudal mode of production.

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Chapter 2 Modes of Production and Historical Development
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