The Story of Mr. Peel: Marx

One of the chief themes of Volume 1 of Marx's Capital is how the capitalist mode of production (ie, the capitalist economic system) constantly reproduces itself in an expanded way on the basis of its principal social relation of production, which is between, on the one hand, the capitalist class who own and control the means of production, and, on the other, the class of wage-workers who own nothing but their labour-power. For this to happen, which is driven by the profit-motive of the capitalist economic system, then members of the working class must constantly sell their labour-power to capitalists in the labour market in exchange for wages (if they want to economically reproduce themselves and not starve), so capitalists can then use their labour-power to produce commodities for the market in the hope of making a profit. This is, importantly for Marx, based on the capitalist exploitation of wage-workers: the forced extraction of surplus labour in the form of surplus-value without any financial compensation.

Now, one of the crucial outcomes of all this is that an 'industrial reserve army' of unemployed workers is generated largely as a result of fierce competition amongst capitalists at the point of production, wherein competing capitalists seek to increase the labour productivity of their workers by developing new forms of technology which need fewer workers to operate them. As a result, excess workers are sacked as they are surplus to requirements (they're no longer needed to operate new forms of technology). The net result of all this is that the industrial reserve army of unemployed workers puts downward pressure on those workers who've kept their jobs to work even harder than before for whatever wages capitalists are prepared to pay them, by being a disciplinary stick for capitalists to threaten these employed workers with - ie, they are threaten with the possibility of also being sacked and joining the ranks of the industrial reserve army of unemployed workers if they don't toe the line with their capitalist employers. Coupled with this particular function of the industrial reserve army of unemployed workers is the additional one of being a permanent pool of available unemployed wage-workers for capitalists to draw upon whenever the competitive need to do so demands it, such as when new markets open up for their commodities. (It should be noted that it's quite possible for there to be full employment under capitalism; it's just not the norm.)

Now, as long as this particular social relation of production of capitalism is in place (ie, between the capitalist and working classes), and all these basic things happen, then the capitalist mode of production will constantly reproduce itself in an expanded way (except when there are disruptions to the system, eg, financial and public health crises). And furthermore, the gap in relative wealth between the capitalist class and the class of wage-workers will constantly grow larger over time.

So, this is a basic summary of one of the main themes of Volume 1 of Marx's Capital. Bearing this theme in mind, let's turn to the final chapter of this volume of Marx's Capital, wherein we discover the general 'truth' and consequently some of the essential conditions about capitalism in the 'motherland' of England through one of its colonies in mid 19th century Australia.

This final chapter of Volume 1 of Capital (chapter 33) is about the 'modern theory of colonisation'. Also, there's been some debate about whether this last chapter of Volume 1 of Capital should even be the last or concluding chapter. It's often been claimed that the true concluding chapter should have been the previous one (chapter 32) as it deals with what Marx calls 'the historical tendency of capitalist accumulation' - ie, the chapter in which Marx makes a prediction about the fate of capitalism as an economic system. I shall say something about this issue at the end of this blog post.

At the end of Volume 1 of Capital, Marx tells the 'sad' story of a Mr. Peel who brought with him on his voyage over to the Swan River District region of the colony of Western Australia in the mid 19th century everything he needed in terms of the means of production, such as money, raw materials, equipment, etc. Being a 'good Englishman' and a 'would-be capitalist', he expected (Marx noted) to find at his free disposal (as he would've back in the 'motherland' of England) an available workforce to draw upon in order to get paid wage-workers to work with the means of production so as to produce commodities for the market in a hope to make a profit for himself. However, to his surprise and displeasure, he finds there is no available workforce to freely draw on as all the English colonial workers who had come out with the Mr. Peels of the world decided to work for themselves on the land with their own tools and labouring skills, as it was (notwithstanding the rights and interests of the local indigenous peoples of the land) all free and abundant. Thus, these English colonial workers came to possess and own land for themselves; they were, in short, property owners. Consequently, these English colonial workers were able to reproduce themselves without having to sell their labour-power to capitalists in the labour market in exchange for wages. This in turn meant there was no-one around to provide any 'free labour' to any would-be capitalist like a Mr. Peel.

To fix up this economic problem for the Mr. Peels of the world, the colonial authorities had to enact some colonial laws which would preclude these and any other English colonial workers from ever possessing and owning any land for themselves: hence, making them propertyless. They did this by dividing the land up into acreages and putting an exorbitant price on them, which meant only the wealthiest of the English colonials could buy acres of land for themselves. As a result, these English colonial workers were forced to make themselves freely available in the labour markets of the Swan River District region of Western Australia, since they could not afford to buy any land for themselves. Just like back in the 'motherland' of England these workers, if they wanted to be able to earn a living and not starve, had no choice but to (hopefully, that is) sell their labour-power to any would-be capitalist in the labour market in exchange for wages. This in turn allowed the Mr. Peels of the world to freely draw on these now freely available English colonial workers, which meant they could hire them to work the means of production with the aim of producing enough commodities for the market in the hope of making a profit for themselves.

So, at this point (through this colonial enactment), we have the successful recreation of the principal capitalist/wage-workers social relation of production of the capitalist mode of production, or, capitalism, for short - which, for Marx, is to be found in the 'old motherland' of England. This is, subsequently, the first truth to be discovered about capitalism in the new colonies of England. Capitalism is founded on the capitalist/wage-workers social relation of production; without it, capitalism can't even get off the ground (which, as Marx suggests, would be a shame for any would-be capitalist like a Mr. Peel). In short, it's the very social foundations of the capitalist economic system itself.

However, returning to Marx's account of the Mr. Peel story, not all competing workers could be employed at once by all the competing capitalists (the Mr. Peels of the world), and so some were left unemployed. As a consequence of this newly created pool of unemployed workers, downward pressure could be subsequently applied to those newly created wage-workers to accept less favourable pay and working conditions if they wanted to keep their new job and not end up as a part of the newly created industrial reserve army of unemployed workers. Thus, the emergence of this newly created industrial reserve army of unemployed workers acted as a disciplinary stick to keep the employed sections of the newly created working class in check. Also, it had the added advantage of being a permanent pool of unemployed workers to draw upon whenever the need to do so arose for the competing capitalists, given what was going on in the markets at the time, whether in the colonies themselves or elsewhere (such as back in the 'motherland' of England).

So, on the basis of the recreation of the capitalist/wage-workers social relation of production of capitalism we also have the recreation of a permanent industrial reserve army of unemployed workers with these particular dual functions: on the one hand, being a disciplinary stick to keep employed wage-workers in check, while, on the other, being a permanent pool of available labour for capitalists to draw upon whenever they needed to. This is the second truth to be discovered in the colonies of England. Capitalism cannot function in the way it generally tends to do without the existence of an industrial reserve army of unemployed workers at the disposal of the capitalist class.

What the story of Mr. Peel in the colonies of England ultimately reveals, then, about the capitalist mode of production is that unless the principal capitalist/wage-workers social relation of production is in place - which means above all that there exists a class of propertyless people who own nothing but their labour-power (wage-workers), and so must sell it to some capitalist buyer in the market who wants it (this is an essential condition too, and so is another truth discovered in the English colonies) - then capitalism can't even get off the ground, regardless of how much money, raw materials and equipment would-be capitalists like a Mr. Peel have in their possession in terms of the means of production. However, even when that's in place (one essential condition), it's not enough, particularly from the position of capitalists, if they want to make lots of profits. Therefore, what's required is that a means exist which can dictate the pay and working conditions of wage-workers, or, of the working class overall. Hence, the necessary existence of an industrial reserve army of unemployed workers (the other essential condition). For this is the mechanism by which the capitalist class can constantly increase their own relative wealth at the expense of the working class.

Now, as Marx says, here we have the basic social institutional framework of the capitalist mode of production being reproduced in one of the colonies of the England, with all its essential conditions in place.  As a result, the would-be capitalists (like the Mr. Peels of the world) can now go about their business of trying to be successful capitalists by making lots of money, rather than seeing all their financial and physical capital in the means of production going to waste. And moreover, the capitalist mode of production can continue in its own relentless mode of reproducing itself in an expanded way (despite any periodic disruptions to it).

So what the story of Mr. Peel (and his like) jointly reveals about the nature of capitalism are the following two things. On the one hand, it reveals how capitalism works on the basis of there being property-owning capitalists and propertyless wage-workers and the existence of an industrial reserve army of unemployed workers, which are three of the chief institutional features of capitalism. While, on the other, it reveals that if capitalism is to exist and constantly reproduce itself in an expanded way then all these chief institutional features of capitalism must be put in place, if they don't already exist (hence the theory of colonisation - it's a capitalist enterprise).

These, then, are the general truths which the story of a Mr. Peel in the Swan River District region of the the new English colony of Western Australia reveals about the nature of capitalism back in the 'old motherland' of England. It's, on the one hand, a kind of thought experiment on Marx's part to highlight the essential social institutional arrangements of the capitalist mode of production. It allows us to see the essence of capitalism. On the other, it's an actual empirical illustration of what happens to capitalism if its essential features are missing - it can't function. (It's a bit like a car without its motor - it won't go.)

Now, on the question about whether this final chapter is a valid concluding chapter to Volume 1 of Capital, I have this to say. Firstly, the previous chapter 32 of Capital Volume 1 in which Marx makes a theoretical prediction about the fate of capitalism, is sometimes seen as Marx's triumphant call for the end of capitalism as an economic system, and therefore that's the revolutionary note it should end on. However, while this is a valid theoretical point in terms of where the overall argument of Volume 1 of Capital leads one, it overlooks the summary role that the final chapter 33 performs. The final chapter of Capital Volume 1 is there to remind us of the essence of capitalism in terms of its essential social institutional arrangements. It sums up the institutional guts of capitalism. For, it ought to be remembered, before you can radically change or transform any socio-economic system, you first need to understand what it fundamentally is in terms of what makes it up with respect to its particular social institutional features. In other words, if you intend to radically change or transform any socio-economic system, then it will be done so in terms of its fundamental social institutional features, since they are what define or constitute any socio-economic system - as illustrated by the Mr. Peel story in the final chapter of Capital Volume 1.