[OPE-L:7480] Re: Buying up and monopsony

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Wed Jul 31 2002 - 12:09:20 EDT

re John M's 7479

thank you for the cite to your  paper; don't take the trouble to send 
it via snail mail. I'll look it up in the library.

You write

>Gil, thanks for stressing the narrowness of the monopsony 
>explanation. However, what I wrote about the buyer-up was not 
>intended to support such an approach. I consider the buyer-up to be 
>a hybrid historical figure who personifies the process of transition 
>from handicraft to the developed capitalist manufacture. What 
>is important according to my view, is not only the "monopsony 
>relation" but also the division of labour imposed to the direct 
>producers by the buyer up, the diversification of production on the 
>buyer-up's command, the supply of raw materials to these direct 
>producers, the emergence of the "middleman" who connects the local 
>producers in the different regions of a dominion with the large 
>scale buyer-up (seated in the export port or the commercial city) 
>and who also "subjects" these producers to the new (capitalist) 
>social relations not only economically, but also politically and 

In John Weeks' entry on merchant capital in The Dictionary of Marxist 
Thought, one finds Geoffrey Kay's  error of confining the analysis of 
merchant capitalists to the extent that they personified merchant 
capital, i.e., buying cheap and selling dear or engaging in the 
carrying out trade (see Doug McEahern in Colonialism and Commodity 
Production, ed. Alavi, pp.17ff). Of course in terms of that role 
alone merchant capitalists cannot have had a transformative impact on 
the mode of production. But merchant capitalists did not simply buy 
cheap and sell dear even in the Verlag system: as you show above, 
they had an impact on the organization of production--for example, in 
order to control the final product, merchants often directly took 
over the finishing process which was conducted by many artisans under 
one roof set up by the merchant. Here we begin to see the rudiments 
of large scale cooperation (Braudel, Wheels of Commerce, vol 2). Marx 
may have been too skeptical of the potential of the putting out 
system to effect a change in the organization of the labor process.

Moreover English merchant capitalists-- enriched by the slave trade, 
control of plantation produce, the opium wars and the plundering of 
India--do seem to have  set up  large-scale modern manufacture 
outside of the guild protected towns; large scale manufacture was not 
introduced mainly by self proprietors who patiently arose from the 
ranks, as Sweezy argued.   Commercial predominance fed industrial 
dominance in the early stages of capitalism while this relationship 
would later be reversed, as Marx underlined in chapter 32. That is, 
merchants seem to have taken what Marx called the revolutionary road 
to capitalist production, though as Sweezy shows Marx only presents 
indirect evidence at best that commercial fortune initially 
subsidized industrial success. Braudel however shows that merchants 
took control of mining and reorganized production as large scale 
capitalist enterprise as early as the late 15th century in Central 

  It does seem that the achievement of such large scale enterprise 
would have been delayed if left in the hands of small self 
proprietors who could only accumulate at (in Marx's own words) "a 
snail's pace"--hardly what Marx could have meant by a revolutionary 
road, though many Marxists today think that slow accumulation by the 
self proprietor or the capitalist farmer is what Marx meant by the 
revolutionary path to capitalism (Weeks, Byres, Mooers, Wood, etc).

    Sweezy attempts to confirm Marx's own finding on the basis of 
Nef's historical work which of course is now outdated.  And this is 
not to say that commercial predominance in the context of the new 
world market  was sufficient in itself for the transition to 

   One could also add Robin Blackburn's evidence of the role merchant 
capitalists played in setting up modern plantions which were not 
based on the old fragmented way of producing things as in the putting 
out system and presaged the industrial factory if Aufhauser and Fogel 
are to be believed. For Aufhauser and Fogel, plantation slavery was 
more proto industrial than the putting out system.   In general, I 
think it is incorrect to conclude--as do the pseudo American Marxists 
Eugene and Elisabeth Fox Genovese in their Fruits of Merchant Capital 
in which there is not a single reference to Marx's discussion of the 
capitalist character of plantation slavery--that merchant capitalists 
only preserved and bled dry the old modes of production in the New 
World and the Old World.

And all this does not even mention the political and ideological role 
of merchant capitalists in the carrying out of bourgeois revolutions, 
which you so provocatively mention below.

 From the tautology that merchant capitalists, qua pure merchant 
capital, cannot bring about a change in the mode of production it 
does not follow that merchant capitalists did not play a crucial role 
in effecting the transition to the bourgeois mode of production.

In short, one cannot reduce merchant capitalists to personifications 
of  the function of merchant or commercial capital.

All the best, Rakesh

ps Alex Callinicos presents an undeveloped criticism of the 
Dobb-Brenner tradition in his Theories and Narratives: Reflections on 
the Philosophy of History. His comments are quite brief and 

>  In the regions of the Ottoman empire where the Greek 
>bourgeoisie-national revolution of 1821 broke out, this process had 
>been going on for several decades, transforming the "ancien regime" 
>not only economically (buyer-up, wage labour: manufactories, big 
>merchant and ship-owner enterprises), but also politically (forms of 
>political representation, dissolution of the asiatic-communal system 
>of the empire, formation of revolutionary organisations) and 
>ideologically (enlightenment and national idea). The middleman of 
>the new era emerged out of the dignitary of the "ancien regime".
>Focusing on the economic level again, it is these overall relations 
>which transform the artisans or farmers to a hybrid or informal form 
>of piece-"wage labourer and proletarian", as Marx says: "The 
>transition from the feudal mode of production takes place in two 
>different ways. The producer may become merchant and capitalist 
>(...) Alternatively, however, the merchant may take direct control 
>of production himself (...) This method (...) without 
>revolutionizing the mode of production, it simply worsens the 
>conditions of the direct producers, transforms them into mere 
>wage-labourers and proletarians (...) appropriating their surplus 
>labour on the basis of the old mode of production (...) The merchant 
>is the real capitalist and pockets the greater part of the surplus 
>value" (Marx 1991, [Kiii, Penguin edition] pp. 452-53).

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