Grossman on Playfair

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W. Playfair, the Earliest Theorist of Capitalist Development

Author(s): Henryk GrossmanReviewed work(s):Source: The Economic History Review, Vol. 18, No. 1/2 (1948), pp. 65-83Published by: Blackwell Publishing on behalf of the Economic History SocietyStable URL: http://www.jstor.org/stable/2590263 .

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W. PLAYFAIR, THE -EARLIEST THEORISTOF CAPITALIST DEVELOPMENTBY HENRYK GROSSMANSMO ND E D E S I SMOND I is regarded s the arliest epresentativefthedoctrine of the objective tendencies of capitalist development. ButSismondi reflectsnot so much the French as the English industrialexperience, and we know that in I8I7 he went to England, the homecountryof the Industrial Revolution, to collect material for his NouveauxPrincipes. his is not surprising:British apitalism was' the mostdeveloped

at that time. It would be surprising,however, if the basic trends ofcapitalism, which manifested themselves in early nineteenth-centuryEngland more clearlythan anywhere lse, had not eft ny trace n Englisheconomicliterature. In Playfairwe rediscover missing ink; itshowsthatthe English industrialexperience found ts expressionnot only indirectly,via Sismondiin France, but also directly n England.'Trend spotting', or discoveryof the objectivedevelopmentaltrendsofcapitalism, s the primary im of moderneconomic science. It is also oneoftheessential lements fMarxian economics. Nevertheless, hereprevailsgreatconfusion bout the genesisof this mportantdoctrine. Some writersattribute he first ormulation f the fundamentaltendenciesofcapitalismto Karl Marx; others maintain that Marx borrowed them from hisforerunners, articularlySismondi.Can one agree with ProfessorCharles Rist who declares that of all theideas that Marx took overfromSismondi'the most mportants the dea ofthe concentrationfwealth n the hands ofa small number of owners, nd of the increasingproletarianizationf thelabouringmasses....This conceptionwhich... remains ne of thefoundationsof Marxiancollectivisms Sismondi's.'Nothing s morecontrary o truth hanthisassertion.The concentrationof wealth, the trend toward large-scale production, and the growingproletarianization f theworking lassesin thefirst alf ofthe nineteenthcenturywere not theoreticalconceptions,but statementsof empiricallyobservablefacts. Marx did not have to 'borrow' from ismondifactsthatcould be easilyascertained from ontemporary nglish ndustrial tatisticsand thatserved as thecommon starting-pointor ll critiquesofcapitalismby the leaders oftheworking-classmovement n France in the middle ofthenineteenth entury.Who was thefirst o discoverand to establish heseobjectivetendencies?In thepreface to the first olume of Capital i867) Marx declares that itis theultimate aim of his work to lay bare the economic law ofmotion ofmodernsociety', namely,to show its tendencies',whichMarx regardsas1 Charles Rist et Charles Gide,Histoiredes doctrinesJconomiquesParis, i909),p. 229.E 65


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66 THE ECONOMIC HISTORY REVIEW'the natural laws of capitalist production'.' He is referring o objectivelyascertainable tendencies,which Marx and Engels describe elsewhere s theconcentrationof capital and land in a few hands; the ruin of the pettybourgeoisie and peasants; the miseryof the proletariat; the crying n-equalities n thedistribution fwealth; and the ndustrialwar ofextermina-tion among the nations.2However, Marx and Engels were not the first o establish the existenceof such tendencies.As early as I843, Victor Considerant, the Fourrieristleader in France, clearly formulated ll these tendencies n his pamphlet,Principes u socialisme, anifeste e la democratieu XIXe si'cle.3 Particularlyimportant re paragraphs VII, VIII and XI.Para. vii (The tendency to the destructionof the small and mediumindustries).The resultof freecompetition'is the directreduction f the proletarianmassesto collective erfdom... heprogressive rushing...of small and medium ndustry... nder theweightofbig property,nder he olossalwheels fbig ndustryndbigtrade.' Ibid. p. 9.)

Para. VIII (Concerningthe tendency o the concentration f capital andthe impoverishment f the workingmasses):'Societytendsmoreand moredistinctlyobe divided nto twogreat lasses:a small numberpossessing verythingr almost everything.. and the greatnumberpossessing othing, iving n absolute collective ependenceupon theownersof capital and the instrumentsf production, ompelledto hire forprecarious nd ever decreasingwages theirhands, talents, nd energies o thefeudal ordsofmodern ociety.' Ibid. p. i I.)Finally,Considerant mphasizesthefact n Para. XI,thatas an inevitableresultof freecompetition here arises the tendency o theformation fbigmonopoliesin everybranch of business (ibid. p. I 3).Nor was Considerantthefirstodiscoverthesetendencies. Several yearsbeforehim, all the tendenciesdescribedabove had been formulated,withmasterful conciseness and precision, by Constantin Pecqueur. In his1?conomieociale4this writerpredictsthat as a resultof the ntroduction fmachines,'the various mall ndustries,gricultural,manufacturingnd commercial, illdisappear quite generally.... As small industrywill disappear,the small

1 K. Marx, Capital (Kerr ed.; Chicago), I, I4, I3.2 Marx-EngelsGesamtausgabequoted as M.E.G.A.), (Berlin, I932), I Abt.Bd. 6, pp. 548-9.3 First published as a programmaticstatement n the issue no. i of DemocratiePacifique,hedaily organ of' L'lRcole Societaire' (i August I 843). The quotationsrefer o the secondedition,Paris,October I847. A fewmonths fter he appearanceof Considerant's Manifeste f i843, Parke Godwin, an American Fourrierist,published a pamphlet, Democracy onstructivendPacificNew York, i844), whichfollowscloselyConsiderant and in which thedevelopmental trendsof capitalismare defined. I am indebted to Mr Maurice Buchs who is preparing a new studyin French, entitled Le fourrierismeux JItatsUnis', forhaving drawn my atten-tion to Godwin.4 Constantin Pecqueur, Lconomie ocialedes nte're'tsu Commercee l'Industrie tde I'Agriculture2nd ed.; vol. i, Paris, i839).


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A THEORIST OF CAPITALIST DEVELOPMENT 67industrialists.. willdegeneratentowage abourers, massof erfs orking ayby day nthemanufactures,ntoproletarians ithout future; nd all the bigindustries ill be monopolized xclusivelyyan industrial eudalism.'1

A fewother authors propoundingsimilar deas could be quoted. Theirprimary ource n France was Sismondi's book, Nouveauxrincipes'economiepolitique,n which thefundamentaldevelopmentaltendenciesof capitalismwere clearly tated as early as i8i9.2 As regards he tendency o concentra-tion, Sismondishows that as capitalismprogressivelyccumulates,it con-centrates n large-scalemanufactures.3He formulates he tendency o thedestruction f small and medium enterprisesn industry nd trade. Asfor he tendency o the mpoverishment fthe abouringmasses,he observesthat, as a result of the technological advances that extend to a growing,numberof branchesof ndustry, ew massesof workers onstantly ecomeunemployed; to find employment hey are ready to work for starvationwages and as a result become physicallyand morallydegraded, sinkingbelow the level ofbeasts. Every technological revolution s followedbya new deterioration f the statusof abourers.However, Sismondi too, had a predecessor. This article attempts toshow that the true originator fthe doctrineof the objectivedevelopmentaltrends fcapitalismwas WilliamPlayfair I 759-I823), a British conomist,who untilnow has remainedcompletelyunnoticed.

Such revaluation of a forgotten conomist has more than a merelypersonal significance. If it can be establishedthat the conceptionof theobjectivefundamental tendenciesof capitalism, the ideas of the growingaccumulationof capital in a fewhands, of thedisappearance of themiddleclasses,of necessity f capital export, tc. can be foundfor hefirstimenotin Sismondi, i8i9, but in Playfair,as early as i805, thismeans that allthese tendencies had become sufficiently erceptible in England andobjectively scertainablefourteen earsbefore he publicationof Sismondi'sbook, and for thatvery reason could be formulated t that earlydate.51 Ibid. II, I0I (see also I, 269).2 Quotations are fromthe second edition of Sismondi's book (Paris, i827).3 ' It is sufficiently orthyof note that .. the effect fthe increase of capitalis usually concentrationof labour in verylarge manufactures' (I, 36I).'Discoveries in mechanical arts always result ultimately n concentratingtheindustry nto the hands of a minorityofrich merchants' (II, 327).4 'They (the discoveries) result in savings through large-scale administra-tion .. the common use, fora large number of people simultaneously,of light,heating, and all the natural forces. Thus the small merchants, the smallmanufacturers disappear' (II, 327).5 William Playfair,known as an anti-Jacobin pamphleteerand statisticianhasremained entirelyunnoticed in thehistory f economic ideas, althoughhis book,Inquiry nto ermanentausesof theDeclineand Fall of Powerful nd Wealthy ations(i805) had some success in his time and was published in a second edition ini807 -Playfair is not even mentionedin any early or recenthistory f economictheories. Furthermore,Playfair's name is not mentioned in the EncyclopaediaBritannicaed. I94 , V, I8), nor in the American EncyclopaediafSocial Sciences, orinJames Bonar's monograph Malthusand His Work 2nd ed., I924) although itdeals with a period in which both Malthus and Playfair were active. Only two


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68 THE ECONOMIC HISTORY REVIEWFurthermore, t is noteworthy hat while the previouslyknown Frenchtheoristsftheobjectivetrends f apitalismwereutopianorpetty ourgeoissocialists, r semi-socialists, ho sharply riticized apitalism and proposedto replace it by another more or less socialist form f society,Playfairwasa spokesman for the petty bourgeoisie. He too criticizes the failings ofcapitalism, but his critique s purelysentimental. He does not conceiveofany way out of the situation; despite all thefailings f capitalism that hepoints out, he wants to preserve t, and does not propose to replace it byanother system.Playfair s not a theoretician omparable to the classical economists, hatis to say, he is not an analyst. He does notprecede his expositionby anygeneral principles, uch as a theoryof value, fromwhich he might drawinferences y way of ogical deduction. He applies the reverseprocedure-themethodofthe historical chool. He describes he real processes nd theobserved developmental tendencies, nd theorizesrarely. 'In this nquiryit has been a rule, never to oppose theory nd reasoning o factsbut to takeexperience as the surest guide' (276).1 The result s a surface treatment,and a lack of depth and analysis. But he is an excellentobserver. Playfairis interested bove all in the fate of the British Empire and its futureeconomicdevelopment s a basis for ts politicalpower. In order toforeseethatfuture ate, Playfairfirst trives o discover a general law ofhistoricaldevelopment,a law valid forall nations and all times,fromantiquitytothemodern era, so that Britain would represent nly a special case in theapplication of the general law, only itsmodification nder the particularcircumstances fmodern capitalism,which can be understood nlyas such.For that reason Playfair's exposition of Britain's developmental trendswould be difficult o understand without a discussion of his generalhistorical aw of the rise and decline of nations.

I. THE DOMINANT TENDENCIES OF CAPITALISMWhile contemporary renchevolutionists uchas Turgot I 750), Condorcet(I795) and Count Saint-Simon (firstpublication in I802) assumed theexistence ofa law ofcontinuous cultural and economic progress,Playfairrejects uch an idea. His law of the Rise and Decline ofNations is based onthe idea that mankind marks time withoutmoving forward;that states,just like ndividuals,go necessarily hrough eriodsof nfancy,manhoodanddecrepitudeand thendie; thatall ofthem begin with the originalstateofpoverty' IV),that hey ubsequently raduallydevelop ntocentres fwealthEnglishdictionaries ontain hortbiographical nd bibliographical otices nPlayfair-RobertPalgrave'sDictionary fPolitical Economy1 9I3), III, II 6, andThe Dictionary f National Biography, d. Sir Leslie Stephen and Sir Leslie Lee(I92I-2), XV, I300. But even these notices are confined to enumerating thetitles of Playfair's writings; his economic theories are not mentioned. TheEconomic ournal Economic istory upplement),935, contains an article on 'Play-fair and his Charts', by H. G. Funkhouser and H. M. Walker.1 The figures n parentheses that follow the quotations from Playfair referto the page numbers of his main work.


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A THEORIST OF CAPITALIST DEVELOPMENT 69and power and that in the end, after eaching the climax of theirwealth,through the operation of the same General Law, they inevitably relapseinto barbarism and poverty; theirplace is then taken by other,culturallyand economicallybackward nations, o 'that the greatness fnations s butof shortduration' (iv).To prove theexistenceof such an historical aw, Playfairbriefly utlinesthe rise and fallofall the civilizationshe knows fora period of more than3000 years, covering Antiquity, the Middle Ages and Modern Times.Under 'the pressureofnecessity' i67) the poor countrieswith superiorenergy' (i9) attack thewealthy nations eitherby peaceful methodsor bywar, producingalways thesame effect: he triumph fpoverty ver wealth(is9). 'The effeminacy nd luxuryof the rich (I 77) operatingpersistently'from generationto generation' (8i) undermines he energy nd activityof thewealthy.This General Law of historical development works in 'modern' (i.e..capitalist) industrialcountriesonly with some modifications, ecause ofthe presence of some particular causes that operate in modern nations'(i64). One of these particular causes' is the tremendousdevelopment ofmodern militarytechnique and mechanical warfare. In the past, thetriumph f poverty verwealth was possible because the backwardnationsunder the pressureof necessitywere energetic,martial and brave. Inmodern times, however, wars no longer favour poor nations. 'Bodilystrength as but little ffect, hiletheenginesof war can only be procuredbythose resourceswhich wealth affords.' o constitute nd equip an armywith modern engines a veryconsiderabledegree ofwealth is necessary'(i8). Courage and bravery, he fighting ualities of the poor nations,nolonger prevail against modern weapons. While in the past, wealth andluxury led to the decline of the wealthy nations, in modern times thesituation is reversed: victory s decided not by martial virtues but bywealth; therefore, he main task of the government s now to preservewealth and prosperity.Having formulated the general law in Book i, Playfair confineshisanalyses nBooks i and iII to the modern', i.e. capitalistnations, nquiringintothespecific auses that determine heriseand fall ofsuchnations. Heeliminates a variety'of ocal or accidental- auses (e.g. wars) and attemptsto deal only with fundamentalcauses 'operating in all of them' (go),namely, the interior auses of hedecline ofwealthynations, rising rom hewealth itself' go), i.e. from hedegreeofaccumulation ofcapital achievedin a given period. Playfair istinguisheshreephasesof uch accumulation:in thefirst,esscapital is available than can be invested; n thesecond,thereis sufficientapital; in the third-on which he concentrates almost ex-clusively-there is more available capital than can be profitablynvested.Therefore, capital reaches insuperable limits-' its bounds' (200)-tofurther ccumulation. All nations begin their development as agrariancountries,thenbecome manufacturing ountries and finally hange intocreditor nations which must export the available surplus-capital (i 6i,200, 270).


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70 THE ECONOMIC HISTORY REVIEWAccording to Playfair, Britain has entered, or is about to enter, thisthirdphase, and he analyses t in the light both ofargumentsdrawn fromobservation f contemporary onditions n Britain nd of arguments rawnfrom he experience of previous centuries,particularly rom he history fHolland, Genoa and Venice. In the course of thisanalysis he attempts-and he is the first conomistto do so-to formulatethe developmentaltrendsof capitalist accumulation.During the whole period embracing the firsttwo phases of capitalaccumulation,which s denticalwith he period ofprogressivendustrializa-tion, Playfairobserves three fundamentaltendenciesof development:(i) The tendencyof capital to concentrate n a few hands.(2) The tendencyof the productive classes to become poorer.(3) The tendency of the middle classes to disappear. When the thirdphase, that of superabundance of capital, is reached, a fourth undamentaltendency begins to operate-the tendency of every industrial nation tobecome a creditoror investornation.But thismeans the end ofprogressivendustrialization nd expansion, hatis, a tendency o a stationary tate and the beginningof disintegrationnddecline. Thus the general law of rise and decline remains valid also for'modern' (capitalist) states, although its outwardform s modified.

Thenatural endencyf wealth o accumulaten thehands f afew.The tendencyof wealth to accumulate in thehands of a few was oftenasserted as a fact. Thus d'Holbach wrote in I773: 'Wealth graduallyaccumulates in a small number of hands; to favour a few shrewdcitizens,all others re reduced to indigence.' Playfair-and this s his contribution-does not confine himselfto a vague general statement that seems toapply to all epochs, and he does not explain the concentration f capitalby the personal shrewdnessof a few, but regards it as the natural andinevitableresult of the accumulation process in modern industrialstates.In contrast o the beliefof eighteenth-centuryconomists hat fundamentaleconomic structures re theresult of legislation,he showsthatparallel tothisaccumulation,thedifferentiationnd inequalityofpossessions ncreaseas a naturalresultof the economic process,quite independently fexistinglegislationor the political form f the state (that is, both in despoticorfreestates). Moreover, he shows the effects f concentrationofcapital on allsocial classes-the enrichment of a few big entrepreneurs, he ruin ofnumerous small entrepreneurswho lose theireconomic independence, thedecline ofwealth based on rentier ncome, the automatic enrichment f'the landowning class, thespecific ole of credit n thecentralization fbigfortunes, nd, as a consequence of the concentrationprocess as a whole,the wideningof the gap between the impoverishedand degraded classesand thewealthy upper classes.'In the careerofwealth, n its early tate,when ndividual ndustrys almostwithout nyaid from apital,menare as nearly n an equality s thenature f

1 D'Holbach, Systemeocial (I773), pt. iii, ch. vii.


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A THEORIST OF CAPITALIST DEVELOPMENT 7Ithings an admit. But in proportion s-capitalcomes nto the aid of ndustry,that equalitydies away, and men, who have nothing ut industry,ose theirmeansof exerting t with advantage; some become then ncapable of main-taining heir ank n society ltogether' I56).

'In every ountry, hewealth.. has a natural endency o accumulate n thehandsofcertain ndividuals,whether he aws ofthe ociety o or do not favourthis ccumulation' I25), as a result fwhich he unequal division fproperty'is accentuated.1This tendency fproductive ndustriallymployed capital to concentrateis intensifiedby the specific functionof credit. Profits are primarilycreated by productive activity. But this mode of enrichment s relativelyslow. Big fortunescan be accumulated with the help of long-term

credits:'In countries here he commonpractice s to sell,chiefly, or eadymoney,great fortunesre seldom gained... But in a country hat gives ong credits,or in a branchoftradeon which ongcredits re given,we alwayssee someindividuals aining mmense ortunes' 82) .2On the basis of the observation that as capital accumulates the rate ofinterest inks Turgot, Adam Smith),3Playfair oncludes that n the courseofthe accumulation process the relativeposition of an owner ofa definite

amount of money capital deteriorates. If the rate of interestdrops from4 to 2 %0, capital of Ciooo brings in the same income as previouslya capital of C500. Capital accumulationis thus accompanied by deprecia-tionofmoney capital and as a resultof thistendency odepreciation, argemoneyfortunes re not permanent;theyshrink fter wo or threegenera-tions. To counteract this tendency, and maintain the formerrelativepositionofmoneycapital, much energy,work, hrewdness, nd willingnessto take risks re required.4In contrastto this constantly hreatenedposition of the moneylender,therelativepositionof thelandowningclass grows progressively tronger.As capital accumulation in industryncreases and therate of nterest alls,the value of land automatically rises,without the intervention r workof

1 Book ii, ch. v: 'Of the Internal Causes of Decline, arising from he unequalDivision of Property,and its Accumulation in the Hands of Particular Persons'(I25).2 Cf. Marx: 'The credit system... is the specific social mechanism for thecentralization of capital' (Capital, Kerr ed., I, 687).3 Adam Smith, Wealth fNations,Book ii, ch. Iv.4 'A fortune lent at interest, diminishes as the value of money sinks'(I29).'The depreciation of money that takesplace in every countrythatgrowsrich,falls nearly all on the lender at interest' (i63).'A fortune ngaged in trade is liable to risks nd requiresindustry o preserveit; but industrynever is to be found for any great length of time in any singleline of men' ( I29).'We findthat wealth seldom goes amongst people ofbusiness past the second,and almost never past the third generation' (89).


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72 THE ECONOMIC HISTORY REVIEWthe landowner. Therefore, his formofproperty nd its concentration na few hands is the mostdangerous.'The tendencyfthenumberfpoor to ncreasen countriesdvancingnwealth.

In theseventeenth entury,England was faced with a chronicproblemofpauperism-pauperism in an agriculturalcountry.The new pauperismwas verydifferent; t was a consequence of industrialization.What dis-tinguishesPlayfairfromhis predecessors n calling attention o this fact sthat, n contrast o the countlessremediesproposed by older economists orcuring dlenessby corrective rpunitive egislation,he regardsthe increasein the number of the poor as a natural consequence of concentrationofcapital and wealth: 'The alarming and lamentable increasesof the poorin proportion s a nation becomes rich' (87-8).Playfair calculates that the number of the poor has grownfasterthantotal population (88).2 These victimsof poverty,he sayssarcastically, arefillingprisons, poor houses and hospitals' (87), 'illustratingthe effect fwealth', and he devotesa whole chapterto the problem 'of the increaseof thepoor as general affluence ecomes greater' (Book ii, ch. vii).Playfairdistinguishesbetween two types of poverty. The first,whichexists in every nation' comprisespeople who are poor forgeneral,demo-graphic, natural reasons, such as 'the lame, the sick, the infirm, he aged,or childrenunprovided for'. The number ofthose'in proportiono thetotalnumber f nhabitants, ill be pretty early he ameat all times;for t is nature hatproduces his peciesof helpless overty' 88).

'There is another pecies of poverty, ot ofnature'screation... That newspeciesof povertys occasioned by the generalwealth,since it increases nproportion o it' (88).'As this endencysuniformlyelt.. overthewholecountry hen t advancesin wealth .. itmustoperate, n length f time, n producing hedeclineof the

whole nation' (89).For eventhoughthe enrichment fsome and theimpoverishmentf otherstakes place in such a way that they change places graduallyand withoutnoise' thefinalresult s nevertheless hat 'such changes are attendedwith... violent commotion' (89).'The lowerclassesbecomedegraded nd discouraged,s is universallyoundto be the case in nations hathavepassedtheirmeridian' I32).1 The thousandpounds aid at interest,fter 0 years s alwaysworth ,ooopounds. But land boughtfor i,ooo pounds would be worth2,000 pounds(i63 n.).'An estate n land augments n value, without ugmentingn extent,whena country ecomesricher... ofall the ways n whichproperty ccumulates nparticular ands,the mostdangerous s landedproperty'I29).2 Playfair's ontemporary,amesMill, states that the paupersare equal tonearly ne-third f thewholemale population, ncluding ld men,youngmenor children' Commerceefendedi8o8), p. Ioi).


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A THEORIST OF CAPITALIST DEVELOPMENT 73While some men remain idle because of theirwealth,'others,who are depressedbelow the naturalsituation fmen,are bringingthem sc.their hildren] p to feel heextreme ressurefwant.... Neither hepowers ftheir ody,nor of theirmind, rrive t maturity'156).'While thefoundation f dleness s laid in,for nepartofa nation, rom heaffluence ftheirparents, notherportion eems s if twerechained downtomisery rom he ndigencen whichtheywerebornand brought p' (156).

This social sickness s not the result of accidental external causes, butof 'the interior cause'-the accumulation of capital. That is why thissickness s inherentn the nature ofthe economicorganism, nd itbecomesaccentuated with the growthof this organism-a process that Playfairillustrates y quotingfromPope:The greatdiseasethatmustdestroyt length,Growswithourgrowth,nd strengthensithourstrengthgo).'In all newand rising tates hehigher rders.. as they ncrease n wealthand have lostsight f tsorigin,which s industry, hey hangetheirmode ofthinking;nd by degrees, he owerclasses re considered s onlymade for heconveniencef herich.The degradationntowhich he ower rders hemselvesfallbyvice and indolencewidensthedifferencend increases hecontemptnwhich hey reheld. This s oneof he nvariablemarks f hedecline fnations'(263).

But therichconsideronlytheirown advantage; thericher heybecome,themoreselfish hey are; theyhold thepoor responsiblefortheirpovertyand treatthemworsethan beasts:'It has been noticed thatin every ociety, s wealth ncreases,hospitality[which xistedn a less dvanced tate f ociety], iesaway. .'.the ocialfeelingsbecome essactiveand menturn elfishnd interested,hinkingor hemselvesand careless or hecommunity; hile,on theone hand,the causesforpovertyincrease, n theother, he means of relief re neglected' I 59).

The tendencyfthemiddlinglasses' todisappear.Concentrationof wealth on the one hand, and the growingnumberofimpoverishedmasses on theother,take place at theexpenseofthemiddleclasses, i.e. 'those immediatelyabove the inferior lasses'. These middleclasses graduallydisappear.'The consequence fgreatfortunesnd theunequal division fproperty,rethatthe owerranks. becomedegraded,disorderlynd uncomfortable, hilethemiddling lassesdisappearby degrees' i26).Such an exasperationofeconomicantagonisms s a resultoftheunequaldivisionofproperty s dangerous and leads the nation to inevitable ruin(i26, i28).Playfair s ftot radical. He praisesthemiddleclass and believes n theirgreat task of assuringeconomic and political progress, he material andspiritualelementsof which are concentrated n that class. The richhavealwaysmanaged to shift he burdens to theothers; as for,he large masses


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74 THE ECONOMIC HISTORY REVIEWof the productive workers, heyhave neitherthe leisurenor the resourcesto steer he shipof tate. Nor has Playfair highopinion ofthe andowners,rentiers nd all those who receive a fixedunearned income. He contrasts'the most useful class', i.e. 'those whose income is regulated by theirefforts.. hat is to say, the productive aborers of the country' ( I67), with'those whose incomes are fixed, that is principally the unproductivelaborers .. the dronesof society' (i 68).'Where there s no regular gradationof rank and division of property,emulation,which s thespurto action ., is... destroyed'132).'The higher lassescan neverbe made to contributeheir hare towards heprosperityf a state .. the higher lasscan neverbe verynumerous; nd beingabove thefeeling fwant .. there s nothing o be expected fromhem] owardsthe generalgood' (I 3 I).'from he working nd laboriousclasses, gain, little s to be expected... theyhave neithereisurenor othermeans of contributingo generalprosperityspublic men; they,ndeed, pay more than their hare oftaxes n almosteverycountry; ut they annotdirectly,ven by election, articipaten the govern-mentof the country' 13I).'It is n themiddling lasses hat hefreedom,he ntelligencend the ndustryofa country eside... where re no middling lassesto connect hehigher ndlowerorders .. a statemustgradually ecline' (I 3 I) .The rapid disappearance of the middle class is particularlydangerous,because this ncreasesthe distance between the mass of the poor and theclassofthewealthy, nd thecontrasts etween want and riches re broughtinto sharpfocus:'the strongestond ofsocietys thereby roken;the bond thatconsists n theattachmentf the nferiorlasses o those mmediatelybove them.Where thedistance s greatthere s but ittle onnexion... The wholesociety ecomes, sit were, disjointed' (I32-3).Despite Playfair'ssympathyfor the middle classes, he has no illusionsabout the actual developmentof capitalism. He knowsthat the wheel ofhistory annot be stopped. The middle classes are disappearingand socialinequality operates permanently,even in the opening stages of capitalaccumulation,when thenation is stillpoor in capital; but it operateswithparticular intensityat the higher stages of accumulation and capitalsaturation: '.[the] tendencyto [inequality] increasesvery rapidly of lateyears' (I29).'But if thisprogress oes on,while a nation s acquiringwealth,how muchfaster oes it notproceedwhenit approaches tsdecline? It is then that theextremesfpovertynd riches re to be seen n the most triking egree' I 3 )The tendencyf agriculturalations ochangento ndustrialationsndlater ntocreditorinvestor) ations. uperabundancef capitaland lackof investmentopportunitiesn old industrialountriessfactors fdisintegrationnddecay.

We have shown that, according to Playfair,capitalism, from ts verybeginning, has been accompanied by the three developmental trendsdescribed above. We shall pass now to the most important section of


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A THEORIST OF CAPITALIST DEVELOPMENT 75Playfair's heory f accumulation-his view that at a specific tage capitalaccumulationreaches a maximum imit.This results n a profound tructuralchange of the whole economy. It is at this ate stage of accumulation thata fourth rend appears-the tendencyof ndustrialnations to change intocreditor investor) nations, which ultimately eads to thedisintegration fthe whole economic system. For, ifcapital accumulationreaches thethirdphase (characterized by superabundance of capital), the profits arned inthe existing nterprises annot be profitably bsorbed at home; theybecome'surplus' capital, and must therefore e exported:

'When capital becomes overabundant. ..' (i 6 ) 'if there s not sufficientmeans ofemploying apitalwithin nationor country.. there re plenty fopportunitiesurnished y poorernations' I35).In other words, the surplus capital which cannot be invested at homemust be exported to other, economically undeveloped countries. If the'surplus' capital is nevertheless nvested in the home countryand themanufactures re expanded, an unsaleable surplus of commodities s in-evitably produced, which again can be marketed only in undevelopedcountries. Such countries

'affordus much reason forhope and do away one of thereasonsforfearinga decline hathas be'en lated.. namely ynothaving market or ur ncreasingmanufactures'269).'The United States promise o support he Industry f England now ..farmorethanboththe ndies .. market or ritishmanufactures illbe insured orages too ome (268).Here we have in germ a formulation f a specificunder-consumptiontheoryderivingfrom surplus' capital, a theorythatwas later developedby Sismondi (I8I9) and Hegel (I82o) and that was popularized in thetwentieth enturyby J. A. Hobson (i 9 I) and Rosa Luxemburg ( 9 I3) *1Ricardo, in i8I7, criticized such a 'surplus' theory.Accordingto him,

there can be no 'surplus' capital in a country,because any amount ofcapital can always find profitable nvestment. Unlike Ricardo, AdamSmith explicitly efendedthetheory foverabundance ofcapital inheritedfromhis predecessors, ohn Locke and David Hume.2This theoryofAdam Smith of a possible saturationof capital, i.e. ofa 'mature economy', whichhas acquired 'its fullcomplementofriches',was quite current n Playfair's ifetime. Locke (i692) and Hume (I 752)had advanced itbeforeSmith n England; in France, it was held by Turgot(I766) and Condorcet (I 794). But Playfair goes beyond his predecessorsin one very important respect. Smith, for instance, confineshimselftostating hat nHolland many moneylenders rrentiers ived on theinterestof capital lent to foreignnations. Playfair, however, not only refers o

1 Simonde de Sismondi, Nouveauxprincipes 'economieolit. (2nd ed.; Paris,i827), I, 345, 36i and ii, 326; G. W. F. Hegel, Philosophie es Rechts i820),para. 245, 246 and addit. to para. 244, 248.2 Adam Smith cites the example of the Dutch, who lent large amounts of.capital to theEnglish,French and othernations. (WealthofNations,Bk. ii, ch. iv.)


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76 THE ECONOMIC HISTORY REVIEWinvestorsor rentiers,but also is the first o define all the characteristicfeaturesof a parasitic creditor -investor)nation livingnot on productiveworkbut 'without abour' (82), on the interests fcapital lent abroad. Atthesame timePlayfairconceivesof the investor tate as thenecessary ndultimatephase of industrial developmentof any country, phase whichinauguratesdecline and decay.According to Playfair,there is a fundamentaldifference etween anindividual creditor nd a creditornation. Individuals can withdrawfromproductive activityat any time. They can sell theirreal estate and lendtheir capital abroad against interest. On the contrary, nation cannotcompletely ease productiveactivities nd must always put to use its realestate, factories,mines, cultivated land, etc.; only movable goods andmoneycapital can be exportedabroad. Therefore nlypartofa nationcanfunction s a creditor:'The wholenationcouldnot become dle. Such a case never an exist, s thatofall individualsn a country ecoming ufficientlyichto ive withoutabour'(82).'A nationcan neverretire,t must lwaysbe industrious' 89).However, althopghnot all individuals in a creditornation can live com-fortably,without labour', the number of such idle individuals who liveon interest omingfrom broad is steadily ncreasing.

Once the state of overabundance of capital is attained, there beginsa slow disintegrating rocess,a retrogressionfthe industrial tate,whichin the end must lead to its decline. Two types of change take place:a structural hange in theeconomicbasis, and parallel to it,a far-reachingchange in the spiritualsuperstructure.'Playfair is a realist; his analysis of the economic disintegration ndultimatedecay ofa creditor tate arenot wishfulpeculationsorconclusionsreached by deductionfrom bstract presuppositions; heyhave a realisticcharacter,forhe takesas a basis ofhisanalysesthe historical xample ofthedecline ofHolland, a creditor tate,and he thinks hat f n the future ther,forthetimebeingbackward,nationseverreach thestage ofcapital super-abundance, theywill produce analogous symptoms fmaterial and moraldisintegration.AccordingtoPlayfair, heeconomicdisintegrationnd declineofHollandwas not accidental. Accidentsplay a greatpart in the lives ofindividualsfor small human groups,but not in the lifeof a whole nation. Playfairobviouslyhas in view the statistical aw ofbig numbers,whichhe was thefirstto apply to history.The accidental forces inclining in differentdirectionscancel one another,and only the fundamentalforcescommonto thetotalmass of the nation assertthemselves nd can be consideredthe

1 In anothercontextPlayfair llustrates he parallelismof economicandspiritualdevelopment y the following emarkwhichis reminiscentf MaxWeber: The Reformationn religion, nd theestablishmentf ManufacturesinEnglanddatefrom he ameperiod there remany easons, romxperience,forbelieving hatthe Protestanteligionsparticularlyavourable oindustry'(265).


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A THEORIST OF CAPITALIST DEVELOPMENT 77dominant trends.A whole nation can perishonly if interior causes' haveprepared it fordecay (I85):

'An inquiry nto hecausesof herevolutionsfnations s moreperfect.. thanwhen directed to those of individuals... Nations are exempt from thoseaccidentalvicissitudes hichderange he wisest fhuman plans upon a smallerscale. Numberand magnitudereduce chances to certainty. he single andunforeseenause thatoverwhelms man n themidst fprosperity,ever uinsa nation; unless tbe ripe for uin nationnever alls.. ..Accidenthas only heappearance fdoingwhat, n reality, as already early ccomplished' XI-XII).Playfairanalyses the rise and decline ofHolland from hat standpoint:'As forthe Dutch, they continue o increase n wealth till the end of theseventeenthentury.... n addition o their reat ndustry: hefisheriesnd artof curingfish, he Dutch excelled n makingmachinesof various sorts, ndbecame thenation hat upplied therswithmaterialsn a statereadypreparedformanufacturing;hiswas a new branch ofbusiness nd very ucrative, or,as the machineswerekept secret, he abbreviation f abour was great' (66).

But when Dutch industrybecame saturatedwith capital, there were nofurtherprofitable investments at home. The additional capital couldfunction only as commercial agent between foreign nations; the Dutchbecame a nation of intermediaries:'But, whenthey the Dutch] became affluent... hemanufacturersecamemerchants,nd themerchantsecameagents nd carriers.. Dutchcapitalwasemployed o purchasing oods in one country nd sell them n another;theDutch became carriers f others, nstead ofmanufacturing..forthemselves'(66). [Thus] 'the solidsourcesofriches i.e. production] isappeared... Themerchants referredafe agenciesforforeignerso tradingon theirown...superiorityn manufacturesver other ountrieswas continually iminishing;consequently,ndustry as not so well rewarded,nd less active' (67) 1

According to Playfair, he structural ransformationfthe countrydidnotstopthere.The manufacturerwho regressed o thestatusof a merchantlater became a rentier; the industries were neglected, and the nationchanged from n industrial nto a creditornation.

'Manufacturersspire o becomemerchants,ndmerchantso become endersofmoney r agents.''The Dutchwere the greatest xample of this... They have longceased togivethatgreat ncouragementomanufactures hichhad, at first,aised themto wealthand power.They had, in the atter imes, ecomeagentsforothersrather hanmerchants n their wnaccount;so that thecapital,which, t onetime,brought n, probably, 0 or 25 percent nnually, nd whichhad, even ata late period, produced ten or fifteen, as employed n a way thatscarcelyproduced three' (I 34).

This economic transformation as accompanied by a parallel change fmentality,hichreacted on the economic basis and further ccentuated itsThis picture of the decline ofthe Dutch industry s essentially confirmedbya modern historian. (C. H. Wilson, The Economic Decline ofthe Netherlands',EconomicHistory eview May I939), vol. IX, no. 2.)


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78 'THE ECONOMIC HISTORY REVIEWweakness. In an investornation 'it is not merelya neglect of ndustry...that shurtful; hegeneralway of hinking nd actingbecomes different'90o).The mentality f an idle class ofrentierswho despise productive workleaves its mpress n the whole lifeof an investornation.This 'degradationof moral character' of an investornation is again illustratedby Holland.In an industrialcountry,her manufacturers re a class of robust,activeentrepreneurs; n an investor ountry,wealthy,well-established irmsvoidrisks,withdraw fromproductiveactivity nd live on interest i62).

'Whatever, herefore,ends to accumulatethe capital of a nation n a fewhands, not only increases uxury, nd corruptsmorals, but diminishes heactivity fthe capital and industryfthecountry... In all thegreatplaces thatarenow n a state fdecay,we find amiliesiving n the nterest fmoney, hatformerly ere engaged in manufacturesr commerce.Antwerp,Genoa andVenice,were fullofsuch; but thosepersonswould not have ventured singleshilling n a newenterprise'I34).In this way, both for objective and subjective,psychological reasons,capital expansion is brought to a standstill, roductivity eteriorates, ndindustrydisintegrates. Holland's position deterioratedas a resultof aninternaldevelopment,not ofunfavourable externalcircumstances:'There was no violent evolution, o invasion yan enemy; twas the silentoperation f thatcause ofdeclinewhichhad been alreadymentioned' 67).The foregoingoutline of the economic evolutionof Holland fromanindustrial o a parasitic creditornation s, according toPlayfair, ota casualexcursion into the history of a specific, ountry. It is on the contraryconceived ofas an illustration fa general aw oftherise and decline ofallmodern ndustrialnations. The economic transformationnd theattendingprocesses of material and moral degradation are seen as an inevitablehistoricalstage in the developmentofevery ndustrial tate,which beginsthe moment its capital accumulation has entered the phase of super-abundance and capital export.Thus Playfair was the first-and for a whole centuryhe remained theonly one-to describe this characteristic tendency in the evolution ofmodern ndustrial tates, hetendency o capital exportand to transforma-tion into creditor tates. Economic theoryneglectedthisproblem duringthe entirenineteenthcentury. Only at the beginning of the twentiethcenturywas the problem raised again by J. A. Hobson, whose work gaverise to a whole literature; but it is interesting o note that Hobson'seconomic interpretation f nvestment, is theory fsurplus-capital ormu-lated in I9II does not go an inch beyond Playfair'sviews expressed asearly as I805.

II. COUNTERACTING TENDENCIESWhat consequencesdoes Playfairdrawfromhis theory f the fundamentaldevelopmental trendsofcapitalism?The prospectofdecay presentedPlayfair,who assumedit to be a proventruthas regards the whole historicalpast ofmore than 3000 years,with


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A THEORIST OF CAPITALIST DEVELOPMENT 79considerable theoreticaldifficulties,n so far as he dealt with the futureevolution ofBritain,then the leading industrialcountry n theworld. TheFrench.evolutionists, ondorcet, Sismondi and particularlySaint-Simon,or utopian Socialists like Pecqueur and Considerant, were able to pointoutthecontradictionsnd inadequacies ofcapitalism because theynotonlycriticized uch inadequacies, but also rejectedthe existing ocial organiza-tion and wanted it replaced by a higherform. But Playfair,who criticizesthe contradictionsof capitalism with equal keenness, is a partisan ofcapitalism,and wants topreserve tdespite ts evils. The idea of a transitionto another, ocialistorganization, s outside hishorizon because in his eyesthe existingcapitalist form s the highest, and he violently criticizestheFrenchRevolutionfor ts levelling' tendencies. But if the capitalist basisis retained, then,according to Playfair's own general historical aw validfor all epochs, society s threatenedwith decay, because these tendenciesoriginate n wealth, i.e. in the veryessence of capital accumulation. Thedanger is all the moreto be feared because history hows that wealth andpower 'when once destroyed.. .never have been renewed' (79).Thus the theoreticalproblem has a practical implication, and Playfairraises the questionwhetherEngland cannot avert such a tragic end:

'It is worthwhileto nquire ntothecauses of such a terrible everse,fthatdegradationwhichnaturally ollows, nd whichhas always hitherto ollowed,maybe averted' iv).He solves this problem by distinguishing between 'necessity' and'tendency', and by a new methodological construction n which thedominanttendency s weakened by one or morecounteracting endencies.These do not eliminate the main tendencybut check its effectivenessndpostponeitsultimatetriumph.If decay were a historicalnecessitympossible to avert'the Inquirywouldbe ofno utility. t is ofno importance o seekformeansofpreventinghatmust fnecessityometopass; but f hewordnecessityschangedfqr endency rpropensity,hen tbecomes n Inquiry eservingttention,'IX).'It merits nvestigation, hether t is or is not possibleto counteract hetendency o decline ., afterhaving attained the summitofwealth,we mayremain here nsteadof mmediatelyescending' i69).We knowthat later Ricardo (I 8 7), John S. Mill (I 848) and Karl Marx(i867), resorted to the same methodological instrument f a dominanttendencyand counteracting endencies.Economic theory ecordedthisas a factbuthas neverraised theproblemoftheoriginofthis dea, and has never nquiredinto thecircumstances hatled to making such a distinctionbetween the tendencies. The foregoingpassage fromPlayfair's book shows that he is the originator of the ideaand casts ighton thecircumstances hat ed himto this'mportantmethodo-logical construction.Playfair, hepetty-bourgeoisheorist, laborates thecounteractingtendencies because he regards them as the theoreticaljustificationof an effort o preserve the existing capitalist societyfromdisintegration nd decay,orat least topostponethemfor everalgenerations.


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8o THE ECONOMIC HISTORY REVIEWThis does not mean that Playfair places his subjective wish for thepreservationof capitalism above the objective developmental trends; hestillthinks hat history s governedby necessity.Just as he tries o show theobjective nevitability f decline on the basis of the nternal tructure f theeconomicorganism,the interior auses', so remaining rueto his methodo-logical principles,he inquireswhether bjective counter-tendencies re notactive within the economic organism. Only if such objective counter-tendencies can be discovered, is there room forthe intervention f thesubjective factor-the deliberate effort o strengthen hem.According to Playfair, the task of strengthening nd directing theseobjective counter-tendenciess incumbent not upon individuals, but uponthe government:'Government an never be better employed than in counter-acting histendencyodecay' (172).This does not eliminate the inevitability f decline, but-and this s allthat Playfair expectsfromhis Inquiry-it might be possible

'to find hemeansbywhichprosperity ay be lengthened ut,' and the periodofhumiliation rocrastinatedo a distant ay' (IV).With thehelp of such a distinction etween necessity' and 'tendency'and between tendency' and 'counteracting tendency', Playfair'sgenerallaw ofrise frombarbarism to civilization and subsequent decline can beupheld theoreticallywithregardnot onlyto the past but also to Britain'sfuture, and at the same time the decline of England, even though theexisting apitalistbasis is maintained,can be avertedor at leastpostponedfor ong generations.What are thesecounteracting endencies? Playfair numerates everal,2ofwhichwe shall discuss the most mportant-export ofcapital.Superabundance ofcapital in an industrialnation entailsconsequencesthat Playfairdescribes in a special chapter entitled Of the tendencyofcapital and industry o leave a wealthy country' (Book ii, ch. viii).'If there s not sufficient eans of employing apital within nationorcountry.. there re plenty fopportunitiesurnishedy poorernations.'This withdrawalofcapital

'thatoperatesn somemodernnations,s counteractinghis ffect,o far s itisoccasionedbya superabundance fcapital' (i 64).'As itraises hepoor nationnearer he evelof herich ne, tseffect raduallybecomes esspowerful' i 83).1 Playfair emphasizes this idea in the subtitle of his book: 'An Inquiry...designed to show how the prosperityof the BritishEmpire may be prolonged.'

2 The counteracting tendencies listed here-export of commodities and ofcapital, decentralization of capital, furthervarious forms of unproductive ex-penditure and waste-are the same as those mentioned fortyyears later byJ. S. Mill (Principles f Political Economy, ook iv, ch. iv, para. 5). This factsuggests that Mill carefullyread Playfair.


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A THEORIST OF CAPITALIST DEVELOPMENT 8iNations with superabundant capital indulge in comforts, eep numerousservants, nd work ess than the poorernations, ust as the sonsof a well-to-do fatherwork ess than the fatherworked n his youth.But the exportof capital, though it counteracts the effects ccasionedby superabundance of capital, does not eliminate the dominanttendencyto decline. These counteracting endenciesrelieve the situationof capital-saturated countriesonly temporarily. In the long run'the intercourse etweennations s in favour f the poorer ne' (I79).'The capital ofa richnation s employedn fostering rivalshipn a poorernation' (i 8o).

Young nations which appear as rivals of older and wealthiernationsenjoy a numberofadvantages that enable them to risefaster nd even toovertaketheirmodels. Elaborating on an idea that Condorcetformulatedten years earlier,Playfairobserves that the leading nations can developtechnology nd inventnew methods ofwork only by the hard way of trialand error.The rival young nations need to imitate only the successfulinventions, hussaving a great deal of time and expenditure.

'The nation hat s highest, reads n discovery,nvention,tc. a new path....Those who follow ave, n general, ut tocopy, nd in doing hat,t s generallypretty asy to improve' 208).'So far as methodofworking nd machineryre concerned, he imitatingnationhas the dvantage; t copies hebest ort fmachine nd thebestmannersofworkingt once' 2I2).

This, accordingto Playfair, xplainsthefact hatwhereas heold ndustrialnations which improved their technique step,by step are burdened withmanyobsoletemachines,'the nations hathave mprovedn manufactureshe atest, avealways arriedthemo thegreatesterfection'2 ii).In thismannertherelief xperiencedby capital-saturated ations hroughexportofcapital to backward nations s ofshortduration. Their economicand technical advantage is only temporary, t disappears by degrees,and England 'cannot. be expected long to maintain its superiority verothers' (204).It is of ittle vail to possessa legal orfactual monopoly n ordertosecuresuperiority:'Holland, Flandersand France were all originally uperior n the artsofmanufacturing ostgoods,to England' (203).Nevertheless,these countries lost their superiority o England, because

while therisingnation's industrializations stimulatedbyhigh profits,helow profits arned by the advanced nation which is about beingrivalled'produces a sort ofdiscouragement nd dismay' (2 i2). Such nations withsuperabundantcapital cease accumulating, theytendto a stationary tatein whichno capital investments ake place:'At all events, day must rrivewhen thenation that s highest,easingtoproceed, he othersmustovertaket' (208).F


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82 THE ECONOMIC HISTORY REVIEW'From this t s very vident, hat henation hefarthestdvanced n nventionshas only to remain tationary fewyears, nd it will soon be overtaken, ndperhaps urpassed' 203).Thus the exportofcapital which brought emporary elief nd advantageto the industrial country exportingcapital in time undermines ts long-range interests, ecause the exportedcapital helps in the industrializationof the rival country:'In thismanner t is, that the capitalofa rich country upplies he want ofit inpoorerones,and that,by degrees, nation aps the foundationf ts ownwealth nd greatness,nd givesencouragemento them n others' i8i).Playfair llustrates his developmentby the example ofHolland:

'the Dutch, for he astcentury, mployed heir apital n thismanner, nd, atone time,werethe chief arriers.. giving redit argely. heyruinedmanyoftheirown manufacturesn thismanner... There are manymanufacturesnEnglandthatoriginally osebymeansofDutchcapital.' i 8 ).Thus Playfairshows that there is an insoluble antagonism of interestbetween the industrial and merchant capital of a country.At first heDutch merchants ruinedmanyof theirownmanufactures'by giving argecreditsto foreigners,nd earned large profits s merchants nd carriersofraw materials and finishedcommodities; but later 'they sank both asa commercialand manufacturing eople' (i 8 ).However, Playfairdoes not reproachthe Dutch merchantswithlack ofpatriotism; he considers their conduct inevitable in a nation that hasreached the creditor tage. Everymerchant s under pressure fcompetitionand must take the constantly hanging circumstances nto account. Hecannotstopto considerwhetherhe servesor harms hisnation; he is guidedand driven by the profit ncentive,the principle on which the systemofprivate enterprise ests. Should he allow himselfto be guided by othermotives, he would soon be ruined. The transfer f capital and industryabroad is not the resultof the merchant's personal decision, but of anobjectivetendency f ndustryn a nation thathas reached the creditor tage.The counteractingtendencies,therefore, ring only temporaryrelief;in the long run, the backward agricultural and colonial countries areindustrializedwith thehelp ofexported capital and attain the level ofthewealthycountries; theytoo entera stage at whichtheyhave accumulatedsufficientapital of theirown or even have begun to suffer rom super-abundance of capital. At such a future tage of development,all inter-national creditoperationswill inevitably top:'If the ime hould ver omethat apital houldbe abundant nall nations. .obtaining reditwill not be an object...' (i 8i).For despitetheoperationof ll counteracting rends, hedominanttrend,ifthe changes and rebounds caused by wars are disregarded,asserts tselfin theend; all nations will ultimately each the stateofcapital saturation,or the stationary tate.


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A THEORIST OF CAPITALIST DEVELOPMENT 83The fact that as early as the first alf ofthenineteenth entury,beforeKarl Marx, a numberof authors uch as Playfair i 805), Sismondi i 8 9),Pecqueur (I837), and Victor Considerant (I843) described the objectivedevelopmentaltrendsof capitalism,raises the question ofMarx's relationto his forerunners. f he is not the originator f the idea, what is Marx'scontribution o that doctrine?Marx approached the problem of the developmental tendencies ofcapitalismnot as a historianbut as a theoretician. His purpose was not'once again to describethesetendencies hat had repeatedlybeen describedin contemporaryFrench literature,but to explain them. Marx's Capitaldoes not contain a single-hapter or section n which the above-mentioneddevelopmental rends re described-as isthe case withSismondi;Pecqueuror Considerant-as empirical facts. In chapter XXXII, 'The HistoricalTendency of CapitalistAccumulation', and in chapterxxv, 'General Lawof Capitalist Accumulation', Marx strives o show why he trendto con-centration and the associatedtrends o centralization nd to the destructionof the, mall and medium industries) s the inevitableesult of capitalistaccumulation on the basis of the law of value; his purpose is to show thatall thesetrends re dominatedand explainable by the aw ofaccumulation.1At thesame timeMarx developed an idea that was completely lien toall his forerunners nd that is the focal point of Marx's theoryof thedevelopmentaltrends fcapitalism-the idea that the trends o concentra-tion and centralization,as well as the disappearance of small industry,followonedirection, nd that theyare only the outward expressionof theslow,gradual, ong processof ocializationof abour-even under capitalisma process that paves the way forthe socialized economyof the future.This process begins with the 'scattered private propertyarising fromindividual labour'; it continueswith the 'centralization of the means ofproductionand socialization of labour'; and it ends withthe transforma-ti-onof already socialized production into socialized property'-a resultthat looms only at the end of a long historical transformationf social

labour. What Playfair, ismondi,Pecqueur and Considerantcould not seewere the far-reachingmplications of this historicprocess. It is true thatmany writers before Marx referred o the regularityof crises and theprecariousconditionoftheworking lass. However,these nsights emainedmere observationsuntilMarx showed them to be the inevitable result ofanother long-term fundamental tendency, which he discovered-thetendency of capital, as technology advances, to increase its so-called'organic composition', .e. theamount of nvestedfixed apital per worker.New rorkCity

1 It mustbe stressed hatMarx does notuse theword trend' or tendencies'in theusual sense of the term;by trend' he means tendenciesworkingwithiron ecessityoward nevitableesults'. (K. Marx, Capital,Kerr ed., I, I3.) Theother actorsnd counter-trendsan weakenor slow up the dominant rend utnotpreventt from ssertingtself.

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