50 Ellen Meiksins Wood 1, January 2002, pp. 50 87. Journal of Agrarian Change, Vol. 2 No.

SYMPOSIUM The Question of Market Dependence

ELLEN MEIKSINS WOOD

Capitalism is a system of social-property relations in which survival and social reproduction are dependent on the market; a system that is, therefore, driven by the imperatives of competition and a relentless drive to improve the forces of production. This article explores the nature of that market dependence and the specic historical conditions in which it emerged. In debate with Robert Brenners recent article in this journal (vol. 1, no. 2) about the early development of capitalism in the Low Countries, it is suggested that, while the Dutch Republic was a highly developed commercial society, it seems to have lacked the specic conditions that made market dependence a basic property relation, as it was in early modern English agrarian capitalism. The differences between Dutch and English patterns of economic development reect some fundamental differences between commercial and capitalist societies. Keywords: capitalism, market, commerce, Dutch Republic, England In a recent issue of this journal, Robert Brenner (2001) made a powerful case for the early development of capitalism in parts of the Low Countries. Building on his groundbreaking work on England, he argued that, for different reasons and in different ways, agricultural producers in the maritime Northern Netherlands were subjected to economic imperatives that impelled their development in a capitalist direction. The argument has major implications for our understanding of capitalism in general, and that is the basis on which I want to respond to it here. If, as Brenner has argued, the differentia specica of capitalism is the market dependence of economic actors, much depends on exactly what market dependence means.
Robert Brenner will respond to the following articles in a forthcoming issue of the journal. Ellen Meiksins Wood, Department of Political Science, York University, 4700 Keele Street, Toronto, Canada, M3J 1PR. e-mail: ewood@yorku.ca I want to thank George Comninel for his, as usual, extremely helpful comments and suggestions, and for innumerable fruitful discussions about these and related issues. Thanks also to Terry Byres for his very useful and thought-provoking observations. As always, I am also grateful to Neal Wood, for his comments and encouragement. But I owe special thanks to Bob Brenner, with whom I have been discussing this essay from the start. The nal product is the result of an ongoing debate between us, after he read the original draft, and he intends to respond to it in print. Our objective is to conduct not the customary academic slanging match, but a constructive conversation between basically likeminded friends, in the hope of clarifying things for ourselves and anyone else who might be interested. Blackwell Publishers Ltd, Henry Bernstein and Terence J. Byres 2002.

The Question of Market Dependence 51 In his discussion of the Low Countries, Brenner was again elaborating the fundamental principle that was also at the heart of his recent important analysis of the global economy. Capitalism, he wrote in that controversial text, is a system characterized by relentless and systematic development of the productive forces, because it is a system of social-property relations in which economic units unlike those in previous historical epochs must depend on the market for everything they need and are unable to secure income by extra-economic coercion . . . (Brenner 1998, 10). In his historical work, Brenner has shown how the systemic pressures deriving from market dependence, the imperatives that have driven the development of capitalism, operated before, and as a precondition for, the proletarianization of the workforce. Economic units could be market dependent that is, separated from non-market access to the means of their self-reproduction without being completely propertyless and even without employing propertyless wage labourers. This early form of market dependence, which subjected producers to the imperatives of competition and prot-maximization, set in train the development of capitalism, and with it mass dispossession and the mature relation between capital and labour. In his earlier work, Brenner explained the nature of market dependence in English agrarian capitalism, and he has now offered an account of a different path to market dependence in the Low Countries. One implication of Brenners argument on the nature of market dependence as in a sense independent of, and prior to, the class relation between capital and labour has been his emphasis, especially in his recent account of the contemporary global economy, on imperatives and contradictions rooted in the horizontal relations among capitals, the relations of competition. This emphasis has aroused much hostility among other Marxists. More particularly, Brenners critics have reacted strongly against a conception of capitalism that, in their view, displaces the class relation between capital and labour as the dening feature of the system, giving pride of place to horizontal relations. This seems to me a complete misreading of what Brenner is about, for many reasons that I cannot elaborate here.1 For our purposes here, it is enough to emphasize two points: rst, that Brenner shows how the market itself can constitute a social-property relation (a point to which I shall return); and second, that the class relation between capital and labour is what it is and unique among class systems precisely because its constitutive units are market dependent and because the relation between capital and labour, unlike any other system of class exploitation, is mediated by the market. Because the market here is not simply a mechanism of circulation but the medium of basic social-property relations, it carries with it the imperatives of competition, prot-maximization and increasing labour productivity. It is not my intention to retreat from my strong support for Brenners basic argument about market dependence. On the contrary, the questions I intend to raise here have to do with following that concept to its logical conclusions. If
1

For more on this, see my Horizontal Relations: A Note on Brenners Heresy (Wood 1999).

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anything, these questions may suggest that, in his analysis of economic development in the Low Countries, he has perhaps departed from, or at least not elaborated enough, his own insights on the nature and consequences of market dependence as a social-property relation. BRENNER ON MARKET DEPENDENCE IN THE NETHERLANDS We may start with a brief summary of Brenners argument on the Low Countries, or specically on the maritime Northern Netherlands, which apparently underwent some kind of early capitalist development. Brenner is clearly working backwards from what appear to be some fundamental similarities between this region of the Low Countries and England in the late seventeenth century. By that time, both were experiencing, he suggests, a process of economic development in which, among other things, a differentiation was taking place between producers who successfully competed in the market by specializing, and less successful farmers who lost their land and were obliged to seek non-agricultural employment. It is, argues Brenner, an indication of how deeply ingrained capitalist practices were in the early modern period that, in the general European crisis of the seventeenth century, when agricultural prices collapsed, Dutch landlords reacted in much the same way as their English counterparts and differently from landlords elsewhere, notably in France subsidizing their tenants by lowering rents and/or accepting arrears and undertaking capital investments, instead of expelling them in favour of land-hungry peasants. The subsequent differences between the two cases the halt in Dutch development while England continued in its process of self-sustaining growth, giving rise to industrial capitalism were not a consequence of any fundamental differences in the internal dynamics of the two economies but rather a result of Dutch dependence on an external market, a European market operating on different, non-capitalist principles and subject to the limits of a fundamentally feudal economy. Brenner sets out to explain how apparently similar processes of capitalist development could have been generated in substantially different ways, how the maritime Northern Netherlands, coming from a different starting point, was, before hitting the buffers, approaching the same destination as English agrarian capitalism. He describes a situation in which producers were unable to produce their own means of survival because of their regions ecological degradation. They therefore had to depend on the market for food grain. In other words, they were dependent on the market for their inputs, or for the most basic conditions, indeed for the full costs, of their own reproduction. In order to obtain the means of acquiring grain in the market, they were obliged to produce other commodities for exchange and, to a substantial degree, to produce them for export. They therefore had to nd products that they could successfully sell on the market. Switching from grain production to cattle breeding and dairy farming, they did nd a market for their output, especially in large towns in nearby Brabant and Flanders, as well as supplying summer grains for the

The Question of Market Dependence 53 nascent domestic market for beer. From the very beginning, writes Brenner, Dutch commercial farmers were not only reliant upon their domestic market, but heavily dependent as well upon the European feudal world market . Farmers in the region were therefore, he argues, compelled to produce competitively, to compete or go under, which meant they were obliged to produce in such a way as to hold their own in price-cost maximization. At rst, levels of productivity were too low to permit the producers to rely completely on specialization, and they supplemented their livelihoods with some, also commercially oriented, diversication. They enjoyed competitive advantages in trade largely because of their relatively low labour costs and because of the relatively low price of grain in the maritime Northern Netherlands as compared to elsewhere in Europe, as merchants from the Netherlands expanded the Baltic grain trade in response to increasing demand. But eventually, the countryside, under the pressures of competitive production, and in the context of expanding markets and growing demand, experienced a process of real economic development, driven by specialization, investment and an increasingly productive agriculture. I will, in what follows, have occasion to question part of Brenners account of what happened in the Netherlands, especially during the seventeenth-century crisis. I have some doubts, in particular, about whether the Dutch pattern of development really does display a capitalist logic. But my main purpose is to explore the foundations of the argument what it tells us about the nature of market dependence and about capitalism. I wonder not only whether the kind of market-dependence he attributes to the Dutch could set off a process of capitalist development, but also, and more particularly, whether the rise and decline of the Dutch economy, even as Brenner describes it himself, can be adequately accounted for by the explanation he offers, or whether there might be an alternative account perhaps more consistent with the pattern of Dutch development, which does not require us to assume a capitalist logic of process. My questions have to do, rst, with the conditions in which producers can be regarded as market dependent, in such a way as to make their economic strategies essentially different from any other agricultural producers, including peasants who enter the market to obtain basic necessities; second, with the nature of markets themselves whether and when they are competitive and capable of imposing the requirements of competition on the methods and costs of production; and nally, with the conditions in which appropriating classes, not only direct producers, are market dependent. The issue here is whether the presence or absence of such conditions made a critical difference between the patterns of development in England and the Dutch Republic, and whether the kind of market dependence Brenner attributes to the Dutch set in motion a pattern of development we can reasonably call capitalist. MARKET-DEPENDENT PRODUCERS In his analysis of the Low Countries, Brenners rst premise is that market dependence, of a kind that sets in train the process of capitalist development, can

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be created simply by the producers need to obtain basic inputs from the market (not necessarily, it seems, the factors of production, but the basic condition of survival, namely food), and to produce other commodities for the market in order to obtain those basic inputs. The corollary is that the production of these commodities must be adapted to meet the requirements of competition and its price-cost pressures. So let us explore whether, or in what specic conditions, the need to exchange the outputs of production for basic inputs, and notably food, will generate the kinds of imperatives that Brenner is talking about. There is no mystery, especially for readers of a journal such as this, about the fact that throughout history there have existed many kinds of markets and that agricultural producers have entered them in diverse ways, with various different purposes and consequences. There is presumably no need here to spell out, for instance, the differences between, on the one hand, a market system, in which virtually all commodities are produced for the market and where all factors of production, including land and labour, are treated as commodities and, on the other hand, peasant markets in which producers who own, or securely possess, the means of production in particular, land sell their surpluses as an adjunct or supplement to their own production for subsistence. But even this relatively clear distinction raises questions about the point at which reliance on the market becomes vital to subsistence or, in Brenners terms, the point at which, short of complete separation from the means of production, a loss of non-market access to the means of subsistence becomes decisive in establishing market dependence, setting in train a process of economic development. This question is particularly difcult to answer in the case of the Northern Netherlands, even more than in the English case. In the latter, the critical factor, convincingly explained by Brenner in his earlier work, was the loss of non-market access to the land itself. In what has long seemed to me his most important historical insight, he demonstrated how this kind of market dependence could exist well short of complete dispossession. Nonmarket access to the means of production was lost well before the complete commodication of labour, in the form of tenancies that operated on economic principles. The pivotal point of his argument was the relation between tenant producers who held their land (de jure or de facto) on economic leases and paid economic rents, and landlords who, lacking extra-economic powers of surplus extraction, the powers of direct coercion to squeeze more surplus from producers, instead depended for their wealth on the productivity, competitiveness and protability of their tenants. In other words, both producers and appropriators depended on the market for access to the conditions of their self-reproduction, and the relation between them was mediated by the market. Brenners argument may not have been uncontroversial, but in his explanatory framework the dividing line between market dependence and its absence was relatively clear, determined by the logic of the property relations he described rather than by some elusive quantitative measure. By contrast, in the Netherlands the decisive factor is not some kind of market-mediated property relations or market access to the land itself. Instead,

The Question of Market Dependence 55 Brenner invokes the ecologically determined inadequacy of the land which made its possessors outright owners no less than tenants unable to supply their own subsistence needs, specically their need for food grain, without entering the market. Producers here were market dependent simply in the sense that they were obliged to sell commodities they produced in order to obtain basic necessities they were unable to produce. In such a case, it seems much harder to avoid confronting the quantitative question: to what extent must people rely on the market to purchase the means of survival before they become market dependent? At what point does the loss of non-market access to subsistence goods become market dependence? Does it require dependence on the market for the full costs of self-reproduction, or would something short of the full costs still constitute market dependence in the relevant sense? Why, for instance, is the case of Dutch farmers who presumably consume some of their own dairy products and meat, vegetables from their own kitchen gardens and eggs from their own chickens differ fundamentally from peasants elsewhere who produce much or most of their own food but still require exchange to obtain certain basic necessities? At what point does a quantitative difference become a qualitative one? For that matter, precisely how does the economic logic of the Dutch farmer differ from that of craft producers, even more dependent on the market for their basic food needs, in a commercial centre like Renaissance Florence? But let us accept that there is a critical difference between, on the one hand, producers who generally produce their own food but enter the market to supplement their subsistence/safety rst strategies, even if these ventures into the market are for the purpose of acquiring necessary goods, and, on the other hand, producers who must produce for the market even to gain access to their most basic food requirements, particularly grain. The question still remains whether, or in what conditions, the need to produce and sell commodities (of whatever kind) in order, in turn, to buy food on the market creates a pressure to produce competitively and maximize prot in the capitalist manner. Or, to put it another way, the essential question is this: in what specic conditions do competitive production and prot-maximization themselves become survival strategies, the basic condition of subsistence itself ? Strategies for survival are identical with strategies for maximizing prot, at least for producers, only in capitalism. The conditions of capitalist competition require maximizing strategies because capitalists have no guarantee of realization in advance. They cannot know whether their commodities will sell, or even what conditions and production costs would ensure sale at all, let alone prot. Lacking the capacity to control prices in a competitive market, they must adopt strategies that will optimize the price/cost ratio, and their only available strategy is to reduce costs by enhancing labour productivity, to achieve the maximization of surplus value. But such competitive conditions cannot simply be assumed even in the presence of well-developed markets and trading networks, so we need to know more about market dependence and how it engenders imperatives of competition. Brenner seems to suggest that the decisive factor is the degree of specialization,

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which, if not a cause is at least an index for him of market dependence and capitalist development. Needless to say, the more specialized producers become, the more they must look elsewhere, particularly to the market, to obtain the necessary goods they do not themselves produce. But there have been many cases of specialization that has not been directed at efcient i.e. competitive production. So specialization for purposes of efciency in the interests of prot in a competitive market requires further explanation. It is important to recognize that specialization, which for Brenner is a critical index of capitalist development, may have no connection whatever with efciency. Specialization has existed in non-capitalist economies not driven by the imperatives of competition. In such cases, the object, far from generating maximum prot, or indeed prot at all, has been to supply the communitys needs by means of division of labour and exchange, and methods of production as well as opportunities for prot have been limited by all kinds of mutual expectations, obligations and customs. Take the example of so-called sectional markets in which specialization is the dominant principle of economic organization.2 Here, traditional, even hereditary, communities of geographically separated monopolistic specialized producers regularly meet each other in the marketplace to supply their various needs. Yet, despite variation not only in the quality but in the price of goods on offer from various producers of the same commodity, unless these markets are integrated into an already capitalist economy, there is no intrinsic reason why these markets should be competitive in the capitalist sense; and their effects on the methods and costs of production which may still be deeply rooted in the traditions of the peasant community and the communal solidarities that are their basic conditions of survival may be minimal or even non-existent. The opportunities of export trade in precapitalist societies could also encourage specialization, without transforming social-property relations or methods of production. This was the case, for instance, in France. Even in the Middle Ages, at a time when French agriculture in general was striving for self-sufciency in grain production, some rural communities were, where possible, already completely given over to viticulture, because wine was a distinctively valuable and uniquely exportable commodity. Later, with the resumption and growth of trade, that specialization increased, yet this labour-intensive agricultural craft, far from signalling a movement toward capitalist property relations, has even been credited with preserving the traditional French peasantry.3 We cannot even assume the producers desire for prot-maximization in exchange on the grounds that it would give them the best return for their labour and other inputs. We cannot presume the kind of calculation of returns to factors specic to capitalism, which may be quite alien to non-capitalist peasant
2 3

On sectional markets, see Wolf (1966, 40 1). See, for example, Fernand Braudel (1986, 316), where he even suggests that it was chiey through the spread of the vine that France acquired its distinctive character as a nation of small landowners and independent peasants.

The Question of Market Dependence 57 economies, where all kinds of other considerations enter into the calculation of the value of labour and land. But even when peasants do respond to the market with some kind of economic rationality, it may be in ways very different from capitalist responses to market imperatives. For instance, farmers may respond to rising prices for their particular commodities typically in cases of growing demand by increasing their output of those commodities as much as possible, perhaps by bringing more land under cultivation or even by employing more (cheap) labour, in order to take advantage of the opportunities for increased prots. The typical response to falling prices would, in such cases, be to reduce or withdraw from production. In that sense, these producers are indeed price-sensitive. But this kind of motivation is very different from the cost-sensitivity of a capitalist producer who strives for increasing labour productivity at lower cost, especially by transforming the methods of production, in a competitive market with many producers. The latter kind of market response presupposes conditions that have not prevailed in most societies, throughout most of human history. There must, of course, be the material possibility of systematic innovation in the methods of production, which is seldom present in peasant communities with limited resources. But we cannot simply assume that peasants would so respond if only they could systematically improve the forces of production and that nothing but their poverty prevents them from doing so. There are also social constraints, the requirements and regulations of the peasant community, which may themselves be essential to survival. Yet even these communal constraints, with or without the material limits of peasant property, are not enough to account for the absence of systematic development of productive forces of the kind we associate with capitalism. In fact, it is, on the whole, a mistake to think in terms of blockages. The selfsustaining development unique to capitalism requires not just the removal of obstacles to development but a positive compulsion to transform the forces of production, and this comes only in competitive conditions, where economic actors are both free to move in response to those conditions and obliged to do so. No one has taught us more than Brenner about the specicity of such conditions. Nor has anyone demonstrated more effectively that even the need to produce surpluses for exploiting classes or states has not, throughout most of history, by itself transformed the methods of production in that way, even production for exchange. Where exploiters whether rent-taking landlords or tax-hungry states have had at their disposal the extra-economic means of surplus extraction, the direct military, political and judicial powers of coercion to squeeze more surpluses from peasants, there has been no systematic compulsion to enhance labour productivity. Indeed, the effect of exploitation has typically been to impede such transformations of productive forces. Coercive extra-economic modes of surplus extraction have both lacked the incentive to promote the development of productive forces and positively hindered it by draining the resources of direct producers. What capitalist development requires is a mode

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of appropriation that must extract maximum surplus from direct producers but can do so only by encouraging or compelling producers to increase their labour productivity and by enhancing rather than impeding the development of productive forces. That kind of appropriation is a rare and contradictory formation, with very specic and stringent conditions of existence. We shall return to the question of appropriation. But for now, the question remains why, and in what highly unusual conditions, people would abandon their old survival strategies, which were not based on prot-maximization by means of efcient production, and begin pursuing a strategy that did take this form. We need to know more to explain how survival strategies came to be united with prot-maximizing strategies, and even how prot-maximization and efciency were joined, or, for that matter, specialization and efciency. When farmers in the maritime Northern Netherlands switched to dairy production, for instance, in response to a huge and growing demand especially in the cities of neighbouring Brabant and Flanders, they may have had more freedom to alter production in response to market conditions than has been typical of peasants throughout history constrained by communal requirements. But they seem, at rst glance, to have been responding according to a logic not fundamentally different from the strategies of peasants in many other times and places, reacting to a sellers market in conditions of rising demand (and probably rising prices). There seems to be nothing in their behaviour to suggest that they were doing anything but increasing output to meet increasing demand. Of course, switching from one commodity to another to meet an unlled need, or even specializing in order to take advantage of growing demand for a particular commodity, is different from merely increasing already existing production to meet a growing need. But these strategies surely have more in common with each other than either has in common with adjustment of production to meet the constraints of a competitive market where supply always threatens to exceed demand, with a downward pressure on prices. It may be possible to argue that these farmers dependent as they were on buying in their basic food requirements would have had no, or little, option to limit production in a tight market, and even less option to withdraw altogether. They would therefore have had no choice but to reduce their costs of production in order to stay in contention. But there is nothing in Brenners account to suggest that they were operating in a market of that kind. On the contrary, every indication is that they enjoyed the dual advantage of a growing market and a dominant commercial apparatus. The competition that certainly took place in European trading networks was principally among merchants and commercial centres, the mercantile interests of the Netherlands, say, against the Hanse, and later, even within the Dutch Republic, between Amsterdam and rival commercial cities. Here, it was, in general, less a question of price competition among producers of particular commodities than a contest among merchants or whole commercial cities for control of markets. Even when this kind of competition (rivalry might be a better and less question-begging word) was intended to corner a larger share of

The Question of Market Dependence 59 the market for domestic producers, it was an essentially extra-economic contest. It had less to do with the methods and costs of production than with either politically enforced restrictions and privileges or with superiority in the instruments, methods and range of commercial activity, to say nothing of superiority in shipping and navigation, and military might. The question, then, is whether the markets so skilfully negotiated by the Dutch were already operating according to different principles. The Dutch situation described by Brenners principal source, de Vries and van der Woude (1997), seems to be one in which the growth of commercial agriculture involved increasing production for growing demand, but not necessarily the kinds of competitive pressures that would systematically drive uncompetitive producers off the land. In a sense and this is a point to which we shall return the Dutch Golden Age was a period of growing market opportunities for more total output with more or less guaranteed sale, rather than a period of market imperatives requiring the systematic improvement of labour productivity to meet the demands of competition. Not even the technical advances pioneered by Dutch farmers, nor the massive reclamation projects which extended cultivable land, by themselves argue for the need to compete or go under, as distinct from expanding production to meet expanding demand. This is not to deny that the Dutch did pioneer certain advances in productivity, not least in agriculture. But it is not at all clear (as I shall argue in what follows) that the success of the Dutch economy, or the survival of individual producers, depended on these advances in productivity more than on extra-economic advantages in commercial rivalries. Dutch investment in production could signal not so much the emergence of a capitalist dynamic as a precapitalist logic taken to its absolute limits. To be sure, Brenners argument, here and elsewhere, is precisely that capitalism emerged as an unintended consequence of precapitalist strategies, when, for one reason or another, non-capitalist economic actors had exhausted their capacity for self-reproduction as they were. But it seems to me that more needs to be said in the Dutch case about how one thing led to another. If, by the seventeenth century, farmers in the Northern Netherlands had reached the limits of a precapitalist economic logic and brought about a capitalist transformation, it still remains unclear how and why this came about, or, indeed, whether it happened at all. THE CYCLES OF MARKET DEPENDENCE The nal and, for Brenner, apparently decisive argument in favour of capitalist development in the Northern Netherlands is its end result: he maintains that Dutch landlords in the late seventeenth century, when agricultural prices in Europe collapsed, behaved like English landlords more than French. I shall return to the seventeenth-century crisis and how Dutch appropriating classes in general responded to it. Their response, it seems to me, was very different from the English, in ways that go directly to the distinction between the dynamics of capitalist development and a rather different, non-capitalist economic logic. For

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the moment, it is enough to raise a few questions about landlords and tenants in the Dutch Republic. Let us leave aside the question of numbers and whether landlord/tenant relations of any kind ever played a role in the Republic comparable to their centrality in England. We can infer from Brenners argument itself that, while the landlord/ tenant relation did play a part in Dutch economic development, it never dominated the agricultural scene as it did in England. The distinctive systemic logic of the Dutch economy, as against the specic logic of the English case, seems in Brenners account to be determined above all by the market dependence of owner/occupiers. What can we nonetheless deduce from the behaviour, during and after the seventeenth-century crisis, of landlords in the Dutch Republic? It must be said that the picture painted by de Vries and van der Woude is rather different from what Brenner suggests. First, it is not at all clear from their account that competitive pressures, in the sense intended by Brenner, drove people off the land in the period leading up to and during the Golden Age. In the early stages, ecological conditions made certain kinds of agriculture more difcult, if not impossible, while alternatives became available in the towns, as the Dutch exploited new commercial opportunities and the Republic became a major link in the larger European division of labour. This account of Dutch development would also, incidentally, explain a differentiation among Dutch farmers, between successful proprietors who could increase their holdings and those who gave up their land, without signalling the kind of competitive economy Brenner has in mind. The main point emphasized by de Vries and van der Woude is that Dutch society from the sixteenth century was dominated by its cities, and this dominance shaped the rural economy (1997, 507). Urbanization, fuelled by the Republics role in international trade, transformed the rural economy in at least two major ways. The urban population swelled to service the Republics growing dominance in shipping, trade, and eventually nance. In turn, the growing urban sector provided new markets for agricultural goods. At the same time, it provided new sources of capital to exploit new opportunities for prot, and urban investors in agriculture became a major feature of the rural scene. This was, in fact, a, if not the, critical factor in transforming the Dutch rural economy, especially by means of speculative urban investment in land reclamation. Agricultural productivity seems to have been improved not in response to competition so much as in response to growing demand, in an economy with a unique imbalance between urban consumers and rural producers, and the growing opportunities for commercial prot this entailed. More particularly, the productive capacities of relatively small farmers were disproportionately enhanced by urban investment responding to growing commercial opportunities. But perhaps most revealing is de Vries and van der Woudes account of what happened at the very moment Brenner nds most telling, the seventeenthcentury crisis. We should, of course, keep in mind that the Republics prosperity always depended disproportionately on the role of the Dutch in international trade as commercial mediators, as distinct from producers. Their great wealth

The Question of Market Dependence 61 would have been impossible without their preeminence in long-distance trade, circulating throughout Europe commodities produced far aeld. But against that background, we can simply look at what happened to domestic production in the period of decline. While there had been considerable capital investment in agriculture during the Golden Age of the Republic, the period of crisis and thereafter was, according to de Vries and van der Woude, a period of disinvestment. At this stage, there was indeed some concentration of land in the hands of the relatively strong, but Dutch investors typically abandoned land altogether. At the same time, the behaviour of landlords who remained seems hardly different from what noncapitalist landlords sometimes did even in France. Some did indeed lower rents and/or accept arrears, but so did many French landlords, when conditions obliged them to retrench and share the costs of economic decline with their tenants especially where, as in Burgundy or the Paris Basin, there were larger tenancies, which landlords were compelled to preserve by making concessions on rents. The main point, however, is that, while investment in cost-reducing technologies was not altogether lacking in Dutch agriculture during the crisis and thereafter, this was far from being the preferred strategy (de Vries and van der Woude 1997, 676). Dutch farmers responded in various ways, and the Republics producers manoeuvred as best they could in a structure of high costs and limited markets, but while [l]ethargy and routine did not characterize their conduct . . . neither did decisive cost-reducing investments (de Vries and van der Woude 1997, 677). Perhaps even more signicantly, much of the investment of commercial wealth that had driven the remarkable development of domestic production in the earlier period dried up. Instead, as we shall see, Dutch elites reverted to more classically non-capitalist modes of appropriation by extra-economic means, notably ofce-holding, as well as rentier wealth, and commercial ventures unrelated to domestic production, agricultural or industrial. This was in sharp contrast to England, where the period of declining agricultural prices spurred an increase in investment, not least by landlords, to enhance labour productivity and cost-effectiveness.4 We shall return to the differences in the patterns of development between England and the Dutch Republic, but we already have reasons to expect some
4

See, for instance, Coleman (1977, 124). It should, however, be emphasized that the attitude of these English landowners was a symptom rather than a cause of Englands capitalist development. As Brenner stresses in The Low Countries, while landlords depended on their tenants competitive success and therefore helped their tenants improve production, especially to get through bad years, landlords decisive contribution to the rise of capitalism in the English countryside was certainly not . . . to be found in their investment and innovation in agriculture, which they very often eschewed . . . It was found, rather, in their seeing to the separation of the direct producers from the means of subsistence in English agriculture and thus their subordination as tenants to the competitive constraint . . . (199, n. 12.). Again, the difference in the attitude of Dutch investors is symptomatic of different social-property relations. To put it crudely, while English landlords helping their tenants improve production in bad times is a symptom of subjection to market imperatives, the imperatives of competition, the Dutch elites investment in agricultural production in good times and withdrawal in bad is a symptom of responsiveness to market opportunities.

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fundamental divergences. The main point is this: in the English case, we can understand why, even in a period of rising demand and growing economic opportunities, unproductive tenants were dispossessed by competitive pressures. It is not so difcult to see how, in the early phases of development, Englands property relations, with its system of competitive rents, compelled producers not simply to stay in the market but to maximize and, even in conditions of rising demand and prices, to compete or go under. We can also understand why in a time of falling prices landlords encouraged their tenants to improve productivity instead of driving them off the land. It is not so difcult to understand why, in a declining market, the same social-property relations that made both producers and appropriators dependent on competitive production required the enhancement of productive forces. It is rather more difcult to see why or how the Dutch were subject to the same compulsions and their pattern of development suggests that they were not. A DIFFERENT KIND OF MARKET DEPENDENCE? The question, then, is whether, in the early modern period and before the seventeenth-century crisis, the basic need of Dutch producers to sell in order to buy was compelling enough and distinctive enough to become a driving force for a historically rare kind of real, or transformative, economic development, which was thwarted only by conditions external to the Dutch economy. Perhaps their reliance on the market for their most basic inputs is enough to distinguish them from peasants whose ventures into the market have not generated such developmental processes. There can be little doubt that these farmers were obliged to sell in order to buy, and that they were obliged to buy to obtain certain basic inputs. What is not quite so clear is whether that really did mean that they were forced to maximize prots or even that they were obliged to compete or go under. Where producers depend on the market not in the sense that their possession of land is directly market dependent but rather in the sense that they must sell what they produce in order to buy what they cannot, they have (within the limits of their productive capacities) a certain room for manoeuvre. They can adjust production not only to changing commercial demand but to their own consumption (which can itself be adjusted) in ways and degrees ruled out by capitalist competition, where prot-maximization is a condition of survival and also ruled out by the relation between English landlords and their tenants. Their room for manoeuvre is that much greater if they are not subject to surplus extraction by landlords or states. It is a truism that peasant proprietors will continue cultivating land in conditions that would make no sense for capitalist producers. They will push themselves and their families to the utmost limit if necessary to maintain subsistence, and reduce their consumption to a bare minimum. It is also true that, even in the context of a capitalist economy, small independent farmers will typically proceed in this way, even when their own subsistence depends on selling their commodities at market-regulated prices. Marx pointed out a long time ago that For the

The Question of Market Dependence 63 peasant parcel holder to cultivate land, or to buy land for cultivation, it is therefore not necessary, as under the normal capitalist mode of production, that the marketprice of the agricultural products rise high enough to afford him the average prot, and still less a xed excess above this average prot in the form of rent. It is not necessary, therefore, that the market-price rise, either up to the value or the production of his product (Marx 1962, 786). In this sense, the farmer even in capitalism may, up to a point, stand outside the normal capitalist economy and its price/cost logic, to the extent that only his bare subsistence, and not the compulsions of prot or rent, represent his absolute limit. To be sure, in an advanced capitalist economy, in which all economic relations are thoroughly commodied and every commodity is subject to the conditions of a competitive market, even the independent farmers room for manoeuvre is more limited than it was in Marxs nineteenth century, let alone in the seventeenth. But the early modern Dutch owner/occupier was operating in a non-capitalist European economy and, in any case, he seems to have had the best of both worlds. Like Marxs self-managing proprietor, he was not obliged to adapt production to any average rate of prot or to attain some kind of cost/price optimum. At the same time, as de Vries and van der Woude point out, Dutch agricultural producers, as they came under the inuence of the low cost production centers that were their source of grain, had a more or less unique margin of advantage. Their privileged access to cheap grain deriving from their extra-economic dominance in shipping and trade was set against the prices of the relative luxuries they themselves produced (de Vries and van der Woude 1997, 199). Dutch farmers originally shifted from grain to dairy production under the inuence of cheap imported grain from the Baltic, because they were obtaining increasingly more grain for every pound of butter (as well as beef and cowhide) that they sold. Importing cheap grain lowered the costs of producing other, higher priced commodities at home. In other words, if Dutch grain production was replaced by lower cost competitors, that competition had the effect not of creating price/cost pressures or lowering prot margins in Dutch agriculture but, on the contrary, encouraging the production of higher priced and more protable commodities. So the Dutch dairy farmer not only had the freedom of the independent producer but also, unlike most small producers such as those Marx had in mind (who work in the least favourable conditions, like grain producers in the Baltic), a freedom from indigence, enjoying the input-cost benets of unusually cheap imported grain bought in a low cost market, and the output-price benets of his own semi-luxury commodities sold in a large and prosperous market with a relatively high price ceiling. In those conditions (and with generally limited productive capacities in the face of growing demand), it is hard to see what systematic price/cost compulsions were operating on the Dutch dairy farmer. If Dutch producers came under the inuence of cheap production and low prices in relation to their input costs rather than their output prices, they were enjoying the benets of something like the opposite of the price/cost pressures that drive competitive production in a capitalist economy.

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But more particularly, we must surely distinguish between the need to sell even in order to survive and the need to attain an average rate of prot in order to survive, irrespective of ones own consumption needs. The English tenant may not have been compelled to attain an average rate of prot in the manner of a modern capitalist producer, but his particular relation to the landlord already made production for prot beyond his own subsistence needs a presupposition of production for his own subsistence. In that sense, he was subject to price/cost pressures in a wholly new way. When a farmer in the Northern Netherlands switched from grain to dairy production, and supplemented his income by producing summer grains for beer, he was doing so to meet his own consumption needs and those of his household, even if he did so by means of exchange, consumption needs that were, within reason, under their own control. When English land-use was switched from arable to sheep pasture, driving many producers off the land, and when later, in conditions where rents for arable were rising again, landlords derived their rents from productive agriculture, the driving force was something very different from the consumption needs of the producer. The requirements of the surplus-appropriating landlord were imposed on production from the start, and the requirements of that landlord were different from the pressures exerted by landlords or states that could rely on extra-economic coercion. We begin to see in the English case something more like a capitalist dynamic, in which the immediate object of production is not consumption, or even exchange, but prot; and perhaps for the rst time in history, production was directly subjected to the requirements of prot-maximization, which became a condition of self-reproduction. It is certainly true that Dutch farmers, even independent owner-occupiers, were subject to the requirements of appropriators, notably the state, in the form of taxation. But, again, on its own, this kind of surplus extraction, in the absence of capitalist property relations, does not compel competitive production. Perhaps the point can be made simply by considering the conditions in which agricultural producers were in danger of losing their access to land. To be sure, even owner-occupiers in non-capitalist societies may not only suffer poverty but, in extreme cases, may even be forced to give up their land, if the exigencies of inadequate land, together with burdens of rent or taxation, make survival impossible. But it takes something other than the pressures of inadequacy to make possession dependent on competitive production. The pressures of a capitalist economy are such that even a prosperous farmer, like the English yeoman-tenant, is subject to them, making his continuing possession of good land dependent on his cost-effective production. At any rate, if Dutch commercial farmers in the earlier phases of development were simply responding to a new market or an absolute rise in demand, it is not even clear whether or to what extent they were confronted by rival producers aiming for the same consumers, let alone competitors in a specically capitalist sense that is, producers always driven to lower their costs of production, and not only in times of economic decline, in order to maintain their positions in an integrated market where there is always a threat of overcapacity. At the very

The Question of Market Dependence 65 least, we need to know a great deal more to determine whether, or how, they were subjected to pressures that obliged them to produce competitively or whether, even if there existed the productive potential for more supply than demand, they were simply availing themselves of the extra-economic advantages enjoyed by their compatriot merchants, such as the command of trade routes and trading networks or outright monopolies, superior shipping, and so on. One major test of a transformative market dependence is the need to compete not in a period of declining prices and demand but in times of readily available and even growing demand. Brenner himself, in his analysis of contemporary capitalism, has demonstrated with devastating effect that this apparent anomaly is a constitutive contradiction of the capitalist system, causing crises of overcapacity and ultimately systematic economic downturns. His historical work on English agrarian capitalism has traced this contradictory imperative of competition to its earliest source. But it is not so clear why, or even whether, such a contradiction was at work in the Netherlands. It is, however, clear that the English and the Dutch behaved differently in the downward cycle, in ways that may shed light on the economic logic of the Republics previous Golden Age. I have already alluded to the shift by Dutch elites, during and after the crisis, from investment in production to investment in extra-economic means of appropriation, and I shall say more about this later. But we may already have to ask whether self-sustaining development in the Republic was really blocked only by conditions external to the Dutch economy, or whether there were limits inherent in its own essential nature. De Vries and van der Woude have argued that the decline of the Dutch economy after its Golden Age was nothing more than the kind of secular decline that affects all modern economies. Brenner, by contrast, has insisted that the crisis was not a modern one but fundamentally feudal, and that the Dutch economy, for all its apparently capitalist development, was implicated in that feudal crisis because it was irreducibly integrated into that feudal economy. Perhaps it would be useful to take the argument just one step further and show how its involvement in a feudal economy was not external to but constitutive of its own internal logic from the start. The Dutch Republic ourished in the Golden Age (as de Vries and van der Woude have argued) because domestic production was linked to commercial expansion, with a transformation of production in tandem with expanding trade. When these interactions weakened, they continue, the whole of the Dutch economy became something less than the sum of its parts (de Vries and van der Woude 1997, 502). We need to consider, then, whether this weakening was simply the result of a cyclical downturn, or a strategic error, or whether the limits of this kind of linkage between production and commerce, its ultimate weakness and eventual rupture, were inherent in it from the outset in contrast to the kind of organic link that joined production and commerce in the English case. It is, as Brenner points out, a striking fact that the Dutch were able to survive a long-term decline and to stagnate for a long time at an unusually high level. He

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suggests that this was possible because of the economys capitalist dynamic, which later enabled the economy to regenerate itself on a new basis. But there is, rst, no reason to attribute the later success of the Dutch to some long-standing prior capitalist development. After all, the French and the Germans were able to develop their industrial capitalisms without on Brenners own reading such a prior advantage, and having suffered no less than the Dutch from the European crisis. Once British capitalism, especially in its industrial form, became a serious challenge to Britains European rivals, a geopolitical and military threat no less than a commercial one, capitalist imperatives imposed themselves on the other economies even without any prior domestic capitalism. It may, however, be more difcult to explain how the Dutch economy could tread water for so long, without either advancing or sinking further. It is perhaps even harder to explain if we assume that it was operating according to a capitalist logic. The imperatives of the capitalist market are generally not so permissive. By contrast, it is not so difcult to imagine that the Dutch could stagnate at a relatively high level precisely because they were able to fall back on their old commercial strengths without depending on competitive production. It is tempting to argue (though I shall resist taking this too far) that the precapitalist commercial strengths of the Dutch made them less, rather than more, vulnerable to the kinds of pressures that cause typically capitalist patterns of stagnation and downturn. My intention here is not so much to question the general explanation of the Dutch decline as caused by its insertion in and dependence on the larger European economy. This might have thwarted Dutch development even if the Republics economy had indeed been driven by capitalist imperatives in the century or more before the crisis. But even if there was little the Dutch could have done to avoid being drawn into the European crisis, it is surely worth considering whether the ways in which they responded to the crisis gives us some indication of the economic forces that were driving it before the fall. At the very least we have to consider the difference between, on the one hand, the kind of market dependence that derives simply from a need to obtain subsistence goods by means of exchange, and, on the other hand, the kind that derives from market-mediated property relations in the English manner. It cannot be emphasized enough that market dependence in English agrarian capitalism did not derive simply from a need to exchange, not even to exchange in order to obtain the basic means of subsistence. I have long been insisting on the importance of distinguishing between the market as an opportunity and the market as an imperative. There is a sense in which the Dutch case represents an opportunity-driven commercial economy taken to its utmost limits. But I am now suggesting that we may also have to distinguish among different kinds of market compulsions. Both the English and the Dutch certainly had the means, including the productive capacities, to avail themselves of market opportunities. There is also a sense in which both were responding to the compulsions of the market, at least a need to enter the market to guarantee the conditions of their own reproduction. But it is equally signicant that the

The Question of Market Dependence 67 compulsions were different in their source, in their nature and, apparently, in their consequences. COMPETITIVE MARKETS We cannot fully understand the difference between these divergent forms of market dependence without exploring more closely the market dependence of appropriating classes no less than that of the direct producers. First, however, let us consider the relevant markets themselves. Let us look rst, in very general outline, at the logic of precapitalist trade. The simple logic of trade is the exchange of reciprocal requirements. This can take place within a single community or among adjacent communities, and this simple logic can still obtain where the direct exchange of products is replaced by circulation of commodities mediated by money. It does not by itself generate the need to maximize prot and, even less, to produce competitively. Beyond such simple acts of exchange, there are more complex transactions between separate markets, involving commercial prot-taking (buying cheap in one market and selling dear in another) in the process of conveyance from one market to another or arbitrage between them. This kind of trade may have a logic different from the simple exchange of reciprocal requirements, at least to the extent that requirements of commercial prot intervene. But here too there is no inherent compulsion to transform production. Even in pre-capitalist societies, there are, of course, always people for whom prot-making (prot-taking might be a better term) is indeed a survival strategy, people who make a living by trade. But the logic of non-capitalist production, even specialized production, does not change simply because prot-seeking middlemen, even highly developed merchant classes, intervene. Their strategies need have nothing to do with transforming production in the sense required by capitalist competition. Prot by means of carrying trade or arbitrage between markets has strategies of its own. These do not depend on transforming production, nor do they promote the development of the kind of integrated market that imposes competitive imperatives. On the contrary, they thrive on fragmented markets and movement between them, rather than competition within a single market, and the links between production and exchange may be very tenuous. The trading networks of medieval and early modern Europe, for instance, depended on a degree of local or regional specialization that allowed merchants to prot by carrying goods from one locale where they were produced to others where they were not. But here as elsewhere in the non-capitalist world, though prot-seeking strategies may indeed have been survival strategies, prot-seeking was separate from, if not actually opposed to, efcient production. What, then, constitutes a competitive market? I want to emphasize again that the ultimate issue here is the conditions in which the market constitutes a system of social-property relations. But let me leave aside for now my suggestion that there is a fundamental difference between the situation Brenner describes, in which producers must exchange in order to obtain basic goods, and a system of

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social-property relations that makes prot, and not just exchange, the immediate object of production. Are there any irreducible conditions without which there can be no competitive market? Certain simple conditions must surely prevail. The simplest requirement is that buyers must have ready access to alternative suppliers. This means not only that productive capacities must be sufcient to meet and, at least potentially, to exceed demand but also that supply and demand are reasonably accessible to one another, even if by means of middlemen. But that is only a necessary and far from sufcient condition. The relation among various producers must be such that they can affect each others costs of production. Price competition presupposes various suppliers responding to the same or similar conditions, some common standard of measure not only some common standard of monetary exchange but, more particularly, some compelling social average of labour costs and the socially necessary labour time that underlies it. It can, of course, happen that producers in social conditions that yield low labour costs, even without productivity-enhancing technologies or methods of production, can drive down the price of a commodity in ways that affect producers of the same commodity in other, higher-cost social environments, compelling them to lower their costs by increasing labour productivity. This is, needless to say, a familiar situation in the modern global economy, though throughout most of human history it has probably been uncommon to nd the same commodities produced in very different social environments regularly competing for the same market. At any rate, even when the same commodity is available from different sources with substantially different costs of production, very specic conditions, both technological and social, must be present to permit the costs and methods of production in one locale systematically to affect those in another, distant one, not to mention modern means of transport and communication conditions very rare until quite late in history. The link between production and consumption must also be such that, while production and consumption are separate and mediated by the market, there is a relation between them that creates price/cost pressures and generates the need for cost-effective production. We need not get embroiled in fruitless calculations of the relation between value and price in order to recognize that competition the kind of competition that entails price/cost pressures and compels cost-effective production presupposes a relation between costs at the point of production and price at the point of consumption. Various factors may weaken that relation: for instance, there may be a great distance between production and consumption, with one relatively inaccessible to the other; social conditions at the poles of production and consumption may be so different that a commodity bought by merchants in a cheap environment can easily be sold relatively dear in another more afuent one without straining the buyers resources; there may be complex and multiple interventions by merchants whose relative advantages are determined by extra-economic factors; and so on. The more mediated the relation between production and consumption, the less direct will be the effect of commerce on the process of production.

The Question of Market Dependence 69 Consider, for instance, the process of exchange in the Northern Netherlands described by Brenner. It was, on the face of it, a highly mediated process. To be sure, the European economy was sufciently integrated to allow, for instance, the price of grain produced in the Baltic region to affect economic trends elsewhere, but the nature of its effects is telling in itself. Baltic grain, produced at costs determined by conditions in the region of origin, and especially in poorer locales, was, as we have seen, bought and conveyed by Dutch merchants who enjoyed a clear dominance in the Baltic trade. That dominance had nothing to do with the costs of producing the traded commodity. Their prots were derived from buying it cheap in one locale and selling it (relatively) dear in another. Dutch consumers, including farmers, in a richer economy whose wealth and social conditions of production were entirely different, were able to buy that grain with the proceeds of trade in other commodities, the production of which had nothing to do, in cost or in price, with the cost and price of grain, except in the sense that Dutch farmers beneted from the low cost of imported grain, which they enjoyed thanks to the commercial dominance of Dutch traders. In any case, what was dear in relation to the costs of production was cheap in relation to prevailing conditions at the point of nal sale, and Dutch merchants could easily buy cheap (from their own vantage point, if not from that of Baltic producers) and sell dear in Dutch markets that is, dear in relation to the original purchase price, yet cheap for the ultimate buyer. At the same time, Dutch producers of dairy products were, of course, in no way competing with Baltic producers of grain. If the costs of producing grain in the Baltic had any effect on the costs of dairy production in the Netherlands, the relatively low price of grain, as an input for Dutch farmers, would have made it less, rather than more, necessary to reduce their production costs in other ways. Nor is it clear that Dutch dairy producers were competing with each other, if the demand for their products was ample and growing. If they were in principle competing with dairy producers elsewhere, their advantages seem to have derived in large part from the dominance of Dutch merchants, both in the export of their goods and in the import of cheap grain. So there was no obvious need for competitive production, let alone for the maximization of prot as the immediate object of production; and, again, the reverse of a price/cost squeeze was at work. If Dutch prosperity depended on a link between production and commerce, it was perhaps always a tenuous connection, and certainly a very mediated one, which may always have been vulnerable to rupture. To be sure, the Golden Age of the Republic saw Dutch producers adapting themselves with considerable exibility to changing conditions and transforming production to meet expanding commercial opportunities; and Dutch farmers continued to be remarkably exible in their responses to economic change (see Mastboom 1996, 2000). In their relative freedom to adapt production in this way they may indeed have been very different from peasant producers in other societies whose survival strategies have necessarily involved constraints on changes in production imposed by limited resources, or by customary practices, communal needs and regulations. But much

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of their success depended on the commercial role of the Republic and its merchants, whose connection with domestic production was, so to speak, always at one remove. Given the series of detachments between commerce and production in the Dutch case, is it really possible to say that the eventual weakening of the link was accidental, a failure of policy, or even just a cyclical trend? De Vries and van der Woude (1997, 502) have argued that [f ]oreign trade rarely acts as the engine of growth of an economy, and that once the link between domestic production and international commerce was weakened, and the Dutch began to rely on their commercial sophistication without a linkage to domestic production, the economy was bound to cease growing and become less than the sum of its parts. But perhaps the reliance on commercial sophistication, as distinct from competitive production, was always essential to the Dutch economy. The commercial interests that dominated the economy were always, in a sense, semidetached from domestic production and ready to shift their investments into other, often non-productive elds. Their vocation was, to put it simply, circulation, not production, and prot was generated by that means. This may have distinguished the Republic from England, which, while always seeking to compete with the Dutch and other commercial rivals by traditional extra-economic means, never quite achieved commercial dominance until its domestic economy had been transformed by internal competitive pressures. The logic of the English domestic economy created a new commercial system in which advantage really did depend on competitive production. Even Britains growing extra-economic dominance, especially in the form of its navy, presupposed this new economic order and the wealth it generated. MARKET-DEPENDENT APPROPRIATORS Throughout this discussion, we have repeatedly been drawn back to one critical point: in the one unambiguous case of self-sustaining capitalist development, in England, where the imperatives of competition, prot-maximization and the improvement of productive forces operated systematically in both rising and declining markets, market dependence was not simply a need for exchange in order to obtain basic necessities but a social-property relation. Both producers and appropriators depended on the market for their self-reproduction. Just as producers depended on the market for access to the means of production land so was the power of appropriation dependent on the market, and the relation between appropriators and producers was mediated by the market. In his account of capitalist development in England, Brenner himself has emphasized, as we have repeatedly noted, both sides of the relation between English landlords and tenants. The specic pattern of self-sustaining economic development in England was driven not only by the market dependence of the direct producers but by their relation to a class of appropriators who could no longer rely on extra-economic powers of appropriation, or politically constituted property, and were increasingly dependent on rents deriving from the prots of market-dependent tenants. Those tenants, in turn, depended on cost-effective

The Question of Market Dependence 71 production in a competitive market. We can now draw some larger implications from the specicity of this relation. When I rst read Brenners analysis of the transition to capitalism many years ago, I was persuaded by his forceful argument about Englands distinctive appropriating class, a ruling class of landowners whose capacity to extract surplus labour from direct producers was mediated by the market. I was persuaded that this distinctive feature, as much as any other, accounted for Englands very specic pattern of development, and hence the development of capitalism. What made the argument even more persuasive was the contrast he drew between the course of English development and the very different pattern in France. In the French case, Brenner argued, production was dominated by peasant owner/occupiers, while appropriation took the classic precapitalist form of politically constituted property, eventually giving rise not to capitalism but to the tax/ofce structure of absolutism. Here, centralized forms of extra-economic exploitation competed with and increasingly supplanted older forms of seigneurial extraction. Ofce became a major means of extracting surplus labour from direct producers, in the form of tax; and the state, which became a source of great private wealth, co-opted and incorporated growing numbers of appropriators from among the old nobility as well as newer bourgeois ofceholders. In other words, as in other precapitalist systems, wealth in absolutist France depended less on the improvement of productive forces than on the enhancement of appropriative powers, the extra-economic powers of military and political coercion. The effect of this system of social-property relations, according to Brenner, was to prove disastrous to economic development (1985, 290). In its efforts to preserve its tax-producing base, the absolutist state strengthened old forms of peasant possession, and the new system of surplus extraction was oriented even more single-mindedly to conspicuous consumption and war. This system was more effective than the old in squeezing surplus out of the direct producers, which meant not only that it was even more of a drain on the productive forces of the peasantry, but also that there was little incentive for the appropriators to encourage labour productivity and the development of productive forces. The contrast between England and France, then, stands out in sharp relief. It is not so difcult to discern the difference between the presence of market dependence in the former and its absence in the latter, for both producers and appropriators, despite the existence of a well-developed commercial system in France and its active participation in international trade. A more difcult case is presented by the other major model of European development, the wealthy commercial centres that emerged, for instance, in Northern Italy and the Netherlands. No one could deny that the wealth of the dominant classes here rested on commerce, and that the appropriation of surpluses from direct producers did not here take the classic form of feudal rent. Nevertheless, here too, it can be argued, great wealth still depended on politically constituted property; and here too this form of appropriation shaped the particular and self-limiting course of economic development.

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Urban patriciates or merchant elites in commercial centres in medieval and early modern Europe often extracted great wealth from commercial activities, but they relied in large part on the privileges and powers associated with their status in the city. The success of these commercial centres was dependent less on competitive production than on extra-economic factors such as monopoly privileges, sophisticated commercial methods and instruments, elaborate commercial networks, and far-ung trading posts, or military superiority, superior shipping and command of trade routes. Ruling elites in these centres depended on their civic status not only for privileged access to such commercial advantages but typically also, as ofceholders, for exploitation of domestic producers by means of direct extra-economic surplus extraction in the form of dues and taxes of one kind or another, so much so that cities of this kind have been described as collective lordships. This is true even in cases like Florence, whose commercial wealth was based not only on trade in foreign goods but on its own domestic products. In relation to the surrounding countryside, the city of Florence was certainly a collective lordship, extracting rent in the form of tax according to a logic not so very different from the absolutist state in France. At the same time, the success of its trade in its own manufactured commodities continued to depend on extraeconomic factors, on monopoly privileges, or on especially sophisticated commercial and nancial practices, which facilitated a commerce in goods whose success in a luxury market in any case had less to do with cost-effective production than with the skills of craftsmanship. Not the least signicant trait of the Florentine economy was that its greatest merchant families, even those whose fortunes had begun in trade, moved into more lucrative non-productive enterprises, such as nancial services for monarchs and popes, or public ofce, up to and including dynastic rule of the city-state itself as most famously in the case of the Medici. As successful as these commercial centres were for a time, and as great as the wealth they amassed, their economic development was self-limiting. It is selfevidently true that the market played a central role in their development, but it seems just as clear that here it really did function more as an opportunity than as an imperative. At least, the market did not operate here in such a way as to create the relentless capitalist drive to maximize prot by developing the forces of production. Where the necessary productive capacities were present and the market, especially for luxury goods, was available, the dominant classes were willing and able to encourage and exploit not only commerce but production. Merchants even organized and invested in production. Yet, the appropriation of great wealth still depended on extra-economic powers and privileges, and far less on developing productive forces than on rening and extending the forces of appropriation. A system of this kind would inevitably respond to declining market opportunities not by enhancing labour productivity and improving costeffectiveness but by squeezing producers harder or by withdrawing altogether from production in favour of more extra-economic powers of appropriation. It may be possible to argue (as I would be inclined to do) that the noncapitalist character of such commercial economies was as much their strength as

The Question of Market Dependence 73 their weakness, and that, for instance, the Italian Renaissance, which ourished in the environment of commercial city-states in northern Italy like Florence, would not have achieved its great heights under the pressures of capitalist imperatives. The same may be true of the Dutch Republic, which enjoyed its own spectacular cultural boom during the Golden Age of its commercial supremacy. But that is another story. The point here is simply that, in the absence of those capitalist imperatives, the pattern of economic development was bound to be different than it would be in capitalism. The Dutch case is no doubt the most complex. It seems to have been the most highly commercialized society in history, before the advent of capitalism. It was, as Brenner has shown, unusually dependent on trade to provide the most basic conditions of subsistence even for direct producers. More particularly, even its agricultural producers seem to have depended on trade to an unprecedented degree for basic subsistence needs. Nor can there be any doubt that the great wealth of the Republic was founded on commerce, or that Dutch elites, as Brenner emphasizes, invested in domestic production notably in agriculture in unprecedented ways and degrees. Yet, quite apart from the questions that can be raised about the nature and degree of market dependence in production, the market dependence of appropriation is also open to question. One of the most striking features of the Dutch social structure, as de Vries and van der Woude stress, was the predominance of public ofce as a source of private wealth. The decentralized organization of the Republic created a particularly fertile eld for public service occupations, so the proportion of such occupations in the population of Dutch cities was very high. But more than the sheer numbers of ofces, the most striking thing is the wealth associated with them. To be sure, it required substantial wealth from real property or nance to enter the urban patriciate, since to be part of the governing elite increasingly required abandoning private economic activities, but this wealth was vastly supplemented by the large salaries attached to high ofce. Lucrative ofces were always an important resource for the Dutch ruling classes, and even in the Golden Age of the Republics commercial dominance, a wealthy landowner or nancier would often choose to use his wealth for access to such ofces. In the seventeenth century, the nancial and social advantages of participation in town government became fully evident (de Vries and van der Woude 1997, 588). After 1660, when economic conditions declined, the value of this source of wealth became even more evident and highly prized. In Holland, for instance, the urban patriciate that comprised the governing elite enjoyed incomes (and wealth!) that exceeded that of all other groups, bar none (de Vries and van der Woude 1997, 586). In the Republic as a whole in the eighteenth century (at a time when Britain was dominated by the wealth of capitalist landlords), while the largest total income was held by rentiers (a signicant fact in itself ), no less than nine of the fteen occupations with the highest average incomes were located in the public sector, including the top six occupations (de Vries and van der Woude 1997, 596). We shall return in a moment to the pattern of development disclosed by these statistics. But the rst point that suggests itself here is that the Dutch Republic

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bears the unmistakeable marks of a tax/ofce structure. Before the late eighteenth century, taxation in the Republic stood at a far higher level than in surrounding countries; it was then nearly twice as high as in Britain (de Vries and van der Woude 1997, 111). The scale of taxation, however, is less signicant in revealing the logic of the Dutch economy than are the uses to which taxes were put, not least in subsidizing the structure of public ofce as a means of private appropriation. The particular nature of taxation may also reveal much about the logic of the Dutch economy. While the French taxed their peasants, and the English landed classes, especially in the late seventeenth century and thereafter, taxed themselves (after extracting their wealth directly from direct producers by means of increasingly market-dependent private appropriation), the Dutch preferred the excise tax. In these simple contrasts there is a wealth of information about their respective social structures and economic patterns. If the English mode of taxation bespeaks agrarian capitalism, the French is the mark of a tax/ofce structure that rests on the backs of the peasantry. The Dutch have in common with the French a system of wealth derived from public ofce resting on a base of taxation. But the excise, while certainly hard on poorer consumers, taxed consumption (or, effectively, commerce) rather than production, and in this respect, at least while commercial conditions were good, was less of a drain on productive capacities. So, for a time, the Dutch were able to sustain a tax/ofce structure, on the basis of their vast commercial wealth, without suppressing productivity. In fact, while the Golden Age lasted, a signicant part of that wealth was ploughed into production, invested, for instance, in major projects of land reclamation. What happened thereafter is another story, to which we shall return in a moment. The role of taxation in sustaining a structure of lucrative public ofces was not the only signal of a precapitalist logic. The Republic reached its commercial peak in large part by devoting much of its tax revenues to military ventures that secured its extra-economic advantages in international trade. Military expenditure formed the largest category of expenses of the young Republic (de Vries and van der Woude 1997, 100); and military aggression remained an essential part of the Republics economic strategy throughout the Golden Age and thereafter. Even while the Republics massive resources were being used to sustain production, a major part of its revenues were still expended on the extraeconomic pursuit of commercial interests by means of military aggression for the sole purpose of enhancing commercial opportunities. These included not only aggressive trade wars but such ventures as their notorious seizure, in 1602, of a Portuguese ship containing an enormously valuable cargo of unprecedented proportions, large enough to affect the future course of Dutch economic development; or the famous Amboina massacre of English merchants in 1623. But the most telling development is what happened, even to production in the Republic, as the European economy went into decline. The Dutch response reveals an economic logic that, contrary to de Vries and van der Woude, even on their own evidence, does not simply correspond to the cyclical pattern of a

The Question of Market Dependence 75 modern (i.e. capitalist) economy, but suggests something rather different. During and after the seventeenth-century crisis, there is, to begin with, a process of disinvestment in land. More signicantly, with the onset of agrarian depression, the interest in public ofce was intensied, because investment in ofce was more lucrative than investment in land (de Vries and van der Woude 1997, 535). There was, as a result, an oligarchization of public ofce. Even the exception proves the rule: Friesland was the only region that saw a renewed interest in landownership simply because here it was a requirement for voting rights, and hence access to ofce, so people bought land in the hope that what the economy had taken away, political ofce might restore (de Vries and van der Woude 1997, 218). While investment in technologies to enhance labour productivity was not altogether lacking, it was far from being the preferred response to declining market opportunities. More attractive to the wealthy elites were extra-economic strategies and investment in politically constituted property, notably ofce, but also such attempts to revive monopoly privileges as the reestablishment of the West India Company or one companys monopoly on navigational charts (de Vries and van der Woude 1997, 676). We have already seen how this pattern was reected in the distribution of wealth in the Republic, with the concentration of wealth in the hands of ofceholders. There are other telling features too. The fact which, as de Vries and van der Woude emphasize, more than any other gave the eighteenthcentury economic its distinctive shape was a scal system supporting an enormous debt, which concentrated wealth in the hands of a small layer of bondholders (de Vries and van der Woude 1997, 681). At the same time, the most prominent and dynamic of eighteenth-century growth sectors were nance and trade in colonial goods. Finally, there is what de Vries and van der Woude regard as the fatal separation of the shipping, trading, nancing, insuring, and producing sectors, the integration of which had been the hallmark of the Golden Age. The classic commercial interests of merchants whose prots derived from circulation rather than production asserted themselves in various ways, if not in their abandonment of commerce for ofce, then their abandonment of domestic production for more lucrative means of trading in goods produced elsewhere. Nor did the Dutch neglect the military dimension of their commercial strategy as the European economy was sinking into crisis. Perhaps the most striking example is the Dutch role in Englands so-called Glorious Revolution in 1688. Here is a particularly interesting reversion to precapitalist modes of investment, in which the massive nancial resources of the Republic were directed not at improving production, as they had been during the Golden Age by investment in major projects like land reclamation, but at achieving extra-economic commercial advantage by military means. The province of Holland in particular depended on the protability of commerce and therefore was especially affected by the incursions of French mercantilism in the late seventeenth century, its interference with Dutch ships and its draconian tariffs. The only solution to this problem of commercial

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protability was to defeat French mercantilism, and that required an alliance with England, which seemed possible only with a friend on the English throne. The Dutch Republic therefore committed its resources to supporting William of Oranges bid for the English monarchy, in a risky investment to use the one resource the Republic had in abundance money to re-establish an international environment in which the economy could once again prosper (de Vries and van der Woude 1997, 680). The Revolution may, to the English, seem glorious and largely bloodless. But from the Dutch point of view it was an invasion, involving the occupation of London by Dutch troops, in full expectation of a war involving the English and also the French. Not only the state but also the Amsterdam stock exchange invested in this ultimate use of extra-economic power in pursuit of commercial prot. In short, during the crisis there seems to be a consistent pattern of reversion to, or intensication of, non-capitalist forms of commerce or even extra-economic appropriation, rentier wealth and ofceholding. This is not, on the face of it, consistent with a capitalist pattern of development. But we can make sense of the Dutch pattern, both the rise and the decline of the Dutch economy, if we acknowledge that its fate rested not on the successes or failures of competitive capitalist producers but on the interests of commercial prot-takers and the beneciaries of ofce. It was suggested earlier that one important test of competitive imperatives is the degree to which they operate in a rising market with increasing demand. But the ultimate test of market imperatives such as those that drive the capitalist system may be what happens in the face of declining market opportunities. No one would deny that capitalists will withdraw from unprotable ventures, but the mark of capitalist imperatives may be the extent to which they preclude disinvestment in the face of competition (as Brenner himself has famously shown in his explanation of overcapacity in the contemporary global economy). A decrease of production is one possible response for capitalist producers in the face of declining markets, but to the extent that their prots derive from production, it is hard to detach themselves from it, and from their capital investments in specic sectors of production. It is easier for commercial prot-takers whose connection to production is not so direct. The most striking index of the difference between the Dutch and English cases is that in England, falling prices in the European crisis of the late seventeenth century, instead of promoting withdrawal of capital from agricultural production, led to more capital investment to promote improvement and lower costs. This fact alone brings into sharp relief the difference between an economy driven by market imperatives, the imperatives of competition and prot-maximization by means of increasing labour productivity, and an economy which, while certainly subject to certain commercial imperatives, is more responsive to market opportunities. The Dutch economy certainly ourished in its Golden Age beyond any other commercial society, but its subsequent trajectory suggests that there remains a fundamental difference between market opportunities and market imperatives,

The Question of Market Dependence 77 or between commercialization and capitalism. While British agrarian capitalism entrenched itself more rmly during the seventeenth-century crisis, followed by the golden age of improvement, with its great landed wealth in the eighteenth century and industrial capitalism thereafter, the Dutch economy played to its own great strengths, its commercial sophistication, together with the tax/ofce structure that fed on it. That pattern of Dutch economic development followed the logic not of competitive capitalist production but of prot-taking commercial circulation. More than any other historian, Brenner has alerted us to the aws in the commercialization model of capitalist development. He has persuasively demonstrated that all those attempts, from Adam Smith onward, to explain the rise of capitalism as little more than the quantitative growth of markets and trade have simply begged the question, assuming the prior existence of capitalism, with its distinctive imperatives, in order to explain its coming into being. More than anyone else, he has insisted on the specicity of capitalism. To make his vastly important argument even more powerful, it seems indispensable to follow through on it by explaining and theorizing the economic logic of commercial development, and in particular the very specic form of commercialization that took place in certain parts of Western Europe, in the late medieval and early modern period, without setting in motion the self-sustaining and constantly expanding imperatives of capitalist development. MARKET DEPENDENCE AND TRADE IN BASIC NECESSITIES Let me, then, try to sum up and elaborate what I take to be specic about the English form of market dependence. We can certainly start from the premise that market dependence has something to do, in the rst instance, with the production and exchange of basic necessities, notably food. But if market dependence means a compulsion to compete or go under, with all that entails, it may not be enough to say that producers become market dependent when they must sell some other commodity in order to buy their basic necessities. The distinctiveness of market dependence in England is evident in the emergence, in the early modern period, of a novel commercial system based on commerce in the means of survival and self-reproduction for a growing mass market, a commercial system in which the trade in basic necessities played a historically unprecedented role, different in its logic of process from other commerce in food, including the massive European grain trade. To say that the English domestic market was a novelty in this respect is not, of course, to deny either that trade in basic necessities was a major feature of other commercial systems, in Europe and elsewhere, or that England, like other European commercial powers, was involved in the luxury trade. The grain trade was certainly an essential characteristic of commerce in medieval and early modern Europe, while England, like other European countries, saw the growth of a market at home, and increasingly among prosperous urban classes, for a vast array of luxury goods. But the English domestic market generated something

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different from either the luxury trade, or the precapitalist trade in basic necessities, or the specic interaction between the two that marked the European trading system. Consider rst, in very broad outline, the nature of the commercial system in medieval and early modern Europe. It is certainly true that a growing urban population in parts of Europe, and especially in the major commercial centres, created not only a growing market for luxury goods, supplied increasingly by long-distance trade, but also a market for very basic subsistence needs which their own domestic agriculture was unable to meet. These needs were supplied above all by imported grain, increasingly from the Baltic region. But as essential as the grain trade was, it cannot be regarded as the motor of the European trading system. Imported grain was certainly an essential condition of commercial success in the major European trading powers, but the grain trade was not itself the driving force of a commercial system whose fortunes were always dependent on the fate of the luxury trade and the wealth of the prosperous consumers that impelled it. It is even possible to argue that the need for a massive trade in grain was determined by the luxurious consumption patterns of the wealthier classes, in the sense that the (grain-consuming) urban population of Europe was swelled by people servicing the opulent living and conspicuous consumption of richer consumers.5 In the Middle Ages, trade was driven by the wealth of the landed aristocracy, whose consumption patterns their hunger for luxuries, as well as for the instruments of extra-economic coercion on which their economic power depended dictated the logic of the commercial system. The landed aristocracy, writes Rodney Hilton, whether lay or ecclesiastical, constituted at all times the principal market for a range of products, mainly luxuries, which entered into international trade . . . International trade, of course, dealt also in bulk commodities like grain and timber, but the demand for these was mainly urban and probably depended ultimately on the health of the international trade in luxuries (1985, 127). Even later, with the growth of towns and prosperous burgher classes, the same fundamental logic prevailed. Many more people, many of them poor, came to depend for their subsistence on cheap imported grain. But the international trading system of pre-capitalist Europe continued to be driven by the wealth and wants of prosperous consumers, as well as the needs of the state, not by the consumer needs and powers of those who entered the market above all to acquire the basic means of survival and self-reproduction, whether food or other commodities of everyday life, from inexpensive textiles to cheap cooking pots. The point can be illustrated by considering the disjunction between commercial power in Europe and the trade in grain. The production and export of grain, as essential as it was to European subsistence, was not (until Britain broke the pattern) an index of wealth and economic power. It was even (as Marx once put it 1973, 277) the function of those left behind in Europes economic
5

I owe the latter point to George Comninel.

The Question of Market Dependence 79 development. A division of labour developed between Europes, often poorer, grain-exporting regions and its richest trading powers, such as the Dutch Republic. But this division of labour was never a simple exchange of necessities between specialized regions grain from the Baltic for, say, the dairy products of the Low Countries. While the Dutch role in the Baltic grain trade was certainly paramount, commercial power such as theirs derived not simply from commerce in basic necessities but from trade in luxuries or relative luxuries, consumed disproportionately by other rich commercial powers as distinct from grainexporting countries. The commercial system of pre-capitalist Europe, then, was characterized by a series of disjunctions: the geographic separation between the production of grain and its consumption by countries whose wealth derived from trade in other commodities not even necessarily from the production of those commodities but also, sometimes even more, from the conveyance, transhipment and arbitrage of commodities produced elsewhere and revenues from entrepots together with an imbalance between the production of basic necessities and economic power derived from trade in luxuries. These disjunctions and imbalances were, needless to say, reinforced by the basic practicalities of transport and communication. The whole system, indeed, was based on the fragmentation of markets, detachment of one market from another, the distance between sites of production and sites of consumption, the geographic separation of supply and demand. Mercantile wealth depended precisely on the relative inaccessibility of markets and the possibility of proting from an endless process of arbitrage between fragmented markets (Kerridge 1988, 6). These disjunctions constituted a fundamental separation between consumption and production. The social conditions in which grain was produced in exporting regions had very little to do with the conditions in which it was consumed in the rich commercial centres. This meant, among other things, that grain was cheap by the economic standards of the consuming powers, without the enhancement of productive forces in the producing regions. Nor did low costs in the grainproducing regions impose competitive pressures on the consuming economies that beneted from cheap imports. At any rate, the trading advantages of the commercial leaders did not depend primarily on competitive production. This was true even of the Dutch, who differed from other Europeans in the degree to which even their farmers depended on buying food grains; for whom the grain trade was an absolute necessity; whose commerce in food was essential to their economic success; and who certainly pioneered many advances in productivity, not least in agriculture. Here, the inuence of low-cost grain producing regions, which beneted the Dutch even more than other economies, if anything reduced competitive pressures by lowering the costs of basic inputs. To the extent that the Dutch exchanged their own products, including agricultural commodities, for goods produced elsewhere, there was certainly a linkage between production and commerce; and the Golden Age of the Republic was no doubt, as de Vries and van der Woude have argued, a period in which this link was close and fruitful (followed by a period of decline when the linkage was weakened).

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Nevertheless, the link was mediated by the disjunctions characteristic of the European market in general, and the Dutch constructed their commercial empire on the strength of other advantages outside the sphere of production. Like other commercial leaders in Europe (before the commercial dominance of capitalist Britain), the Dutch typically relied, for their successes in international trade, on extraeconomic superiority in negotiating separate markets, rather than on competitive production in a single market: on dominance in shipping and command of trade routes, on monopolies and trading privileges, on an elaborate network of farung trading posts and settlements, on the development of sophisticated nancial practices and instruments, and so on. At the same time, there was in the Dutch Republic a disproportionately large domestic market for luxury goods. These were consumed not only by large urban populations, in which the proportion of prosperous burghers was unusually large in relation to the impoverished and dispossessed. There was also an unusually substantial market for luxury goods among prosperous peasants. In this sense, too, the logic of commerce in the Republic was driven less by the needs of poor consumers than by the wants of the well-to-do, and, it might be said, by the market dependence of consumers (including consumers of grain) more than of producers. These disjunctions certainly meant that, while a rich commercial nation like the Dutch Republic was dependent on the grain trade for the means of survival, the cost of the most basic survival needs was disproportionately low in relation to the wealth derived from commerce in less necessary goods. But the same disjunctions also meant that the commercial centres whose wealth depended on them were vulnerable to the fragilities of the international trade in superuous goods. Not only their great wealth but even their supply of cheap and basic necessities could suffer from declines in the luxury trade. The Dutch, like other European economies, came up against the barriers of the old commercial system in the crisis of the seventeenth century. For all their agricultural success, and for all their trade in basic commodities, they always belonged to an economy both externally and, I would argue, internally still subject to the constraints of the precapitalist market, not least its disproportionate dependence on luxury consumption by the wealthy few at home or abroad. THE SPECIFICITY OF BRITISH MARKET DEPENDENCE The British, and more particularly the English, created a new kind of commercial system, driven by different needs and answering to a logic different from any other in history. To be sure, they participated in the old commercial system, and they certainly experienced a consumer boom in luxury goods. Nor, of course, can it be denied that the wealth of prosperous classes continued to play as, by denition, it must, in any grossly unequal society, including, and especially, capitalism an economic role disproportionate to their numbers in all forms of trade. But alongside the more traditional forms of trade, there emerged, in Englands domestic market, a novel system with a logic of its own, which eventually

The Question of Market Dependence 81 extended its reach beyond Britains national boundaries, to create a new system of international trade. First, the English domestic market was, already by the seventeenth century, something like a unied national market, without the disjunctions that had characterized international trade (disjunctions that, indeed, have yet to be entirely overcome even by todays globalization), and without the internal trade barriers that still affected domestic economies elsewhere, not just fragmented city-states but even a centralized kingdom like France. This national economy was also increasingly distinctive in the sheer size and the particular composition of the market for basic necessities, as well as for simple, cheap commodities of everyday life, like iron cooking pots. The decline of the English peasantry may have taken longer than has sometimes been suggested, extending well into the nineteenth century. But as the early market dependence of English tenant farmers, already visible in the sixteenth century in the form of competitive rents, accelerated the dispossession of those unable to survive in increasingly competitive conditions, market dependence increasingly took the more complete form of commodied labour power and the reliance on a wage for access to the means of subsistence. The European grain trade had traditionally been directed largely to urban populations, which, of course, grew substantially in the relevant period. The proportion of urban to rural populations in England increased more than most, and London became the largest city in Europe, a uniquely huge consumer of basic necessities. But this demographic pattern alone was not enough to account for the uniqueness of Englands domestic market. After all, the urban population of England in the early modern period never reached the proportions of the Dutch Republic at its peak.6 Yet even here there is a telling contrast. The urban population in the Dutch Golden Age was swelled not simply by the poor and dispossessed unable to sustain themselves on agricultural production, but to an unusual degree by those who beneted from or serviced the Republics great commercial wealth. By contrast, the English city, London in particular, was disproportionately enlarged by the poor dispossessed by agrarian capitalism. In any case, what made the English market for basic goods distinctive was not simply the demographic distribution between town and country but the growing proportion of the population, whether urban or rural, that was dispossessed and reliant on wages for survival, together with the more direct relation of production to consumption of this kind. Historians have in recent years devoted much attention to the growth of a consumer society in Britain (as well as elsewhere, notably in the Netherlands).7 There can be little doubt that, particularly in the eighteenth century and especially
6

By the late seventeenth century, the urban population of the Republic as a whole may have been as high as 45 per cent (the province of Holland was well above that national average), with some decline thereafter, making it the most highly urbanized country in Europe. See de Vries and van der Woude (1997, 5961). 7 For discussions of these consumer societies, see, for example, Thirsk (1978), McKendrick et al. (1983) and Schama (1988).

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with the growth of prosperous urban classes, there was a burgeoning market for all kinds of goods, beyond the basic necessities, from ne apparel to works of art. But the consumer society in England, however new it may have been in the size of the market and the range of its goods, was not qualitatively different from bourgeois markets elsewhere in Europe. Nor were such consumer markets fundamentally discontinuous from Europes medieval burgher culture, and their sheer quantitative growth was not enough to distinguish them fundamentally from the luxury trade of earlier periods. To identify what was truly new and distinctive, representing a major qualitative break from old economic patterns and the operation of a new systemic logic, we have to look elsewhere. It can be misleading to dene the specic character of the new economy in Britain by stressing the growing wealth of the middle classes or the numbers of consumers who were able to buy a wide range of goods to enhance their comfort, pleasure, aesthetic enjoyment or status. More distinctive was the growth of the numbers compelled to buy not the superuities of life but the most basic commodities and the implements of daily subsistence and self-reproduction. Needless to say, the growth of such a market presupposed the ability to buy no less than the compulsion. In the historical moment between agrarian and industrial capitalism, the purchasing power of labourers may indeed have been unusually substantial; and no doubt the denition of necessity was becoming ever more elastic, increasingly embracing manufactured instruments of daily life such as industrially produced kitchenware and eating utensils. But compulsion lies at the heart of the new economic dynamic, and, in this kind of market, even the ability to buy was dened by its strict limitations. It was certainly a novelty that so many working people were now consumers, but the specic logic of this novel market depended as much on the poverty of its consumers as the luxury trade depended on wealth. It is not, however, enough to say that rst England and then Britain saw the emergence of a historically unprecedented mass market for cheap everyday commodities. What nally distinguishes this market from earlier markets in basic necessities is the fact that the consumption needs of relatively poor consumers became the driving force of a new kind of market also in the sense that this market affected production in wholly new ways. The new patterns of consumption reacted directly on production as never before, in the context of an already integrated and increasingly competitive national market. English agricultural production substantially supplied its own domestic market for food, and England was, for a time, even a net exporter of grain. At the same time, the development of productive forces in the countryside was the corollary of transformations in social-property relations that eventually also created the mass of wage-earning consumers. English agriculture was sufciently productive by itself not only, like the Dutch, by means of exchange, dependent on a superabundance of purely commercial wealth to sustain a large population no longer engaged in agricultural production, while British industry developed on the strength of cheap basic goods, like cotton cloth, and their accessibility to that growing mass market.

The Question of Market Dependence 83 The development of a mass proletariat employed by capital represented the ultimate development of the direct relationship between production and consumption. (It also, of course, represented a fundamental contradiction: the same conditions that brought about the integration of production and consumption, the same forces that overcame the disjunctions of the old commercial system, the same imperatives of competition and capital accumulation, with their systematic tendency to overcapacity, also ensured a regular imbalance between production and consumption, a new and systematic disjunction between supply and demand. In the old commercial system, with its spatial and structural disconnections between production and consumption, between supply and demand, there could certainly be imbalances; but they were, so to speak, contingent, arising by default rather than by compulsion. The absence of the imperatives of competition meant that there were no systemic mechanisms that compelled the regular recurrence of such imbalances, least of all the imbalances of overcapacity.) The proletariat constituted both a force of production and a mass consumer market, and the condition of the proletariat in both its aspects shaped the development of productive forces. In a competitive environment with systemic imperatives to increase labour productivity, the general commodication of labour power in the form of wage-labour compelled capital, already driven by competitive pressures, to extract the maximum surplus value from workers in the limited time during which it controlled the labour power of juridically free workers. At the same time, these propertyless wage labourers, dependent on the market for all their material needs, determined the nature of production not only by their own productive activity but also by their powers of consumption. This kind of consumption constituted a market uniquely broad and inclusive, but also uniquely limited in its resources. As a class entirely dependent on exchanging a money-wage for the most basic means of subsistence, the proletariat represented a larger market in a more or less unied geographic space, and in a more or less integrated economy, than had ever existed before. But it was also a market whose consumers had restricted powers of consumption. That distinctive combination naturally engendered its own pressures for cost-effective production. Production for this market required making up in numbers what consumers lacked in wealth, and this created pressures to produce cheaply, pressures that reinforced the cost-sensitivity imposed by already existing imperatives of competition. This was, in other words, the rst economic system in history in which the limitations of the market impelled instead of inhibited the forces of production. Until the production of the means of survival and self-reproduction is market dependent, there is no capitalist mode of production. With the advent of industrial capitalism, market dependence had truly penetrated to the depths of the social order. But its precondition was an already well-established and deeply rooted market dependence, reaching back to the early days of English agrarian capitalism, when the production of food became subject to the imperatives of competition. This was a unique social form in which the main economic actors,

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both appropriators and producers, were market dependent in historically unprecedented ways.8 No doubt other societies, especially Englands commercial rivals, relied on trade to supply certain basic conditions of subsistence. But in none of them was production subject to the pressures of market dependence in the same way. More particularly, in none of them was access to the very means of agricultural production, to land, market dependent as it was in the conditions of English property relations; and in none of them was appropriation market dependent in the way that it was for English propertied classes already from the early modern period. This, as has been argued here, distinguishes the English even from the Dutch, whose market dependence was of a different kind. The effect of the English system was not only to make agricultural producers uniquely subject to market imperatives and the requirements of competitive production, but also to propel the mass dispossession that created both the labour force and the market for wholly new forms of industrial production. The end result was a system of production, with mutually reinforcing agrarian and industrial sectors, uniquely capable of imposing its competitive imperatives on other parts of the world; and with it came a new commercial system. Thereafter, and especially with the advent of British industrial capitalism, economic development elsewhere, from Britains European neighbours to the farthest corners of the colonial world, would be determined by the new imperatives of capitalism. CONCLUSION It is, then, worth considering the implications of the differences between England and the capitalist Netherlands. It is worth considering whether the divergence of the Dutch from the English pattern of development was simply rooted in a factor external to its own systemic logic or whether that divergence was already inherent in their different starting points. One striking difference is that Englands early market dependence, unlike that of the maritime Northern Netherlands, had nothing to do with lling the gaps in existing productive capacities, or the inability of its agriculture to supply its own subsistence needs. The market dependence of English farmers was based on something altogether different, not simply the need to exchange in order to live, but the particular relation between economic tenants and landlords devoid of extra-economic powers. Even the capacity for self-sufciency in agricultural production would not make producers in England less market dependent. Theirs was a particularly stringent, all-or-nothing mode of market dependence, which was in no way alleviated by more than adequate productive capacities.
8

The market dependence at the heart of this unique formation was reected in various conceptual and ideological developments, not least in the concept of value. Already in the sixteenth century, English land surveyors were explicitly measuring the actual customary rents of a specic tenancy against its putative real value in a competitive market. Later developments in political economy can, I would argue, be traced to these early, very practical manifestations of the mentality associated with English market dependence, which can be sharply contrasted to developments elsewhere in Europe. But that is another story, which I hope to pursue another time, though I discuss this point to some extent in the forthcoming revised and expanded edition of The Origin of Capitalism (Wood 2002).

The Question of Market Dependence 85 The English situation, then, was distinctive in several related ways. The producers access to land itself was directly determined by the market, and the degree of market success required in order to retain possession was not determined by the producer himself, by the needs of his family or by their own consumption patterns nor, for that matter, by their own hunger for prot. Possession of good and ample land did not obviate or even reduce dependence on the market. On the contrary, dependence on the market by means of economic leases was a condition for access to that kind of land; and more successful farmers were likely to have more access to more land. So producers who had the possibility to compete and maximize prot were likely to be those who were most subject to the need to do so. That compulsion derived in the rst instance from their relation to appropriators who themselves lacked non-market access to the means of appropriation. In that way, prot not direct consumption or exchange became the immediate object of production; and for the rst time in history, there developed a mode of exploitation that systematically impelled the development of productive forces. So what does this all mean? I have suggested, here and elsewhere, that Brenners Marxist critics are wrong about the implications of his focus on the horizontal relations of capitalism. I now want to add that much of their misreading has to do with a tendency to see the market as just the sphere of circulation. Marx, they remind us, looked beneath the appearances of exchange and the circulation of commodities to the underlying reality of the social-property relations between capital and labour. It is, they insist, a mistake to focus on the market in the way that Brenner does. Yet Brenners great strength has been precisely to uncover the realities of the market itself as a social-property relation. The questions I have raised about his analysis of capitalist development in the Low Countries may come down to this: there is a difference between the market as a mechanism of exchange or an instrument of circulation, and the market as a social-property relation. The specicity of capitalism is that the relations of producers to the means of production, and of appropriators to the means of appropriation, as well as their relation to each other, is mediated, indeed constituted, by the market. It follows from this that there may, again, be two different kinds of market dependence, one that entails a need to exchange in order to survive, and another that makes prot-maximization, not consumption or exchange, the immediate object of production. It would not, as I have already suggested, be unreasonable to identify the Dutch case like other precapitalist commercial powers as an opportunitydriven economy, responding to rises and declines in market opportunities more than to market imperatives of the capitalist kind. But perhaps we should distinguish not only between the market as an opportunity and the market as an imperative but also between two different kinds of market dependence. The latter difference is not just conceptual but historical. There have existed societies that relied for their self-reproduction on the market as a means of circulation but not as a fundamental property relation, and this distinction may help to characterize the differences between the Northern Netherlands and England. If we are

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to understand capital itself as a specic social form, we surely have to recognize the specicity of the market as a social-property relation. This is not to say that market dependence of the Dutch variety could never have produced capitalist development of the English kind, that a need to enter the market for most or all material needs could not have set in train the kind of development that did take place where the market from the start constituted basic property relations. But what actually happened was something else: the market as simply a means of exchange and circulation, and even market dependence as a need to exchange in order to live, did not, in Europe or anywhere else, become a medium of continuous capitalist development until market dependence in the English sense, with its inherent drive to competitive production and protmaximization, imposed a need on Britains rivals to produce competitively. From then on, and especially once the rst capitalism assumed its industrial form, the market as a means of exchange and circulation did indeed become a transmission belt for capitalist competitive pressures. From then on, market dependence of any kind would indeed entail the imperatives of competitive production and prot-maximization. Economies inserted in the international trading system and depending on it for their material needs, whatever their prevailing social-property relations, would henceforth be subject to capitalist imperatives. Although the origin of capitalism depended on the social relation between market-dependent producers and appropriators, once commodication and competition became a virtually universal form of social reproduction, producers even in the absence of class exploitation were subject to market imperatives. This was true of independent farmers and would have been no less true of independent workers industrial collectives. Those imperatives, in turn, would carry in their wake strong pressures to transform social-property relations, to reproduce the class relation between capital and labour; and as the process of capitalist development took its course, with mass dispossession and the general commodication of labour power, there developed wholly new and even more inescapable imperatives of competition and capital accumulation. REFERENCES
Aston, T.H. and C.H.E. Philpin, eds, 1985. The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe. Cambridge: Cambridge University Press. Braudel, Fernand, 1986. The Identity of France: Volume Two: People and Production, trans. Sian Reynolds. New York: Harper Collins. Brenner, Robert P., 1985. The Agrarian Roots of European Capitalism. In The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe, eds T.H. Aston and C.H.E. Philpin, 213327. Cambridge: Cambridge University Press. Brenner, Robert P., 1998. The Economics of Global Turbulence. New Left Review, 229 (May/June): 1262. Brenner, Robert P., 2001. The Low Countries in the Transition to Capitalism. Journal of Agrarian Change, 1 (2): 169241. Coleman, D.C., 1977. The Economy of England, 14501750. Oxford: Oxford University Press.

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de Vries, Jan and A. van der Woude, 1997. The First Modern Economy: Success, Failure, and Perseverance of the Dutch Economy, 15001815. Cambridge: Cambridge University Press. Hilton, R.H., 1985. A Crisis of Feudalism. In The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe, eds T.H. Aston and C.H.E. Philpin, 11937. Cambridge: Cambridge University Press. Kerridge, Eric, 1988. Trade and Banking in Early Modern England. Manchester: Manchester University Press. Marx, Karl, 1962. Capital. Volume 3. Moscow: Foreign Languages Publishing House. Marx, Karl, 1973. Grundrisse. Harmondsworth: Penguin. Mastboom, Joyce, 1996. Protoindustrialization and Agriculture in the Eastern Netherlands. Social Science History, 20 (2): 23558. Mastboom, Joyce, 2000. On Their Own Terms: Peasant Households Response to Capitalist Development. History of Political Thought, XXI (3): 391403. McKendrick, Neil, John Brewer and J.H. Plumb, 1983. The Birth of a Consumer Society: the Commercialization of Eighteenth Century England. London: Hutchinson. Schama, Simon, 1988. The Embarrassment of Riches: An Interpretation of Dutch Culture in the Golden Age. Berkeley: University of California Press. Thirsk, Joan, 1978. Economic Policy and Projects: The Development of a Consumer Society in Early Modern England. Oxford: Oxford University Press. Wolf, Eric R., 1966. Peasants. Englewood Cliffs, NJ: Prentice Hall. Wood, Ellen Meiksins, 1999. Horizontal Relations: A Note on Brenners Heresy. Historical Materialism, 4: 1719. Wood, Ellen Meiksins, 2002. The Origin of Capitalism: A Longer View. London: Verso.