Revue Internationale de Philosophie - The State and The Birth of Capitalism

The State and the Birth of Capitalism
Henry Heller
Dans Revue internationale de philosophie 2018/3 (n° 285), pages 243 à 266
Éditions De Boeck Supérieur
ISSN 0048-8143
ISBN 9782930560366
DOI 10.3917/rip.285.0243
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The State and the Birth of Capitalism
HENRY HELLER
The transition debate was initiated by the Cambridge economist Maurice Dobb
with the the publication of Studies in the Development of Capitalism (1946).1
A member of the Communist Party (CPGB), Dobb interpreted the Russian
Revo-lution, the Depression and World War II as part of the crisis of the
capitalist system- a crisis that has by no means been resolved, as recent
events prove. In order to gain insight into a possible transition to socialism,
Dobb investigated the decline of feudalism and the beginnings of capitalism at
the end of the Middle Ages. Dobb concluded that feudalism’s decline and
the birth of capitalism were due to factors internal to Western European
society. In the fi rst place the decline of feudalism was the result of the over-
exploitation of the peasantry, the resulting decline of rents and the revolt of
rural and urban petty producers. Secondly with regard to the development of
capitalism, Dobb followed Marx, underscoring the importance of primitive
accumulation and the emergence of agrarian capitalism in the sixteenth

century based on the initiative of better-off peasants who transformed
themselves into capitalist farmers. Dobb’s work initiated a great debate about
the transition which included Rodney Hilton, Christopher Hill and Georges
Lefebvre, which was published by the Marxist journal Science & Society
during the 1950s.2 Aside from Dobb’s contribution, the most important came
from Paul Sweezy the American economist and co-founder of the Monthly
Review. Sweezy rejected Dobb’s endogenous explanation and instead
contended that an exogenous factor in the form of international trade was
responsible for the transition.3 The debate over the birth of capitalism was to
become more and more sophisticated in ensuing decades. But fundamental to
this ongoing discussion was Dobb’s perception that capitalism is a mortal
system, i.e., discussion of its birth should be based on an awareness of its
eventual death.
1 M. Dobb, Studies in the Development of Capitalism, New York, International Publishers, London,
Routledge & Kegan Paul, 1946.
2 R. Hilton, ed., The Transition from Feudalism to Capitalism , London: New Left Books,1976.
3 P. Sweezy, ‘A Critique’ in Hilton, ed., The Transition from Feudalism to Capitalism, pp. 33-56,
102-8.
244 HENRY HELLER
Brenner Versus Wallerstein

The original round of debate reached a second and higher theoretical level as
a result of the work of two American Marxists Robert Brenner and Immanuel
Wallerstein who wrote in the midst of the Vietnam War and the upheavals of
the 1960s and 1970s. Brenner followed Dobb in insisting on the importance of
late medieval class conflict in undermining feudalism. Indeed, he argued that
these revolts not only ended feudalism, but set the stage for the emergence of
capitalism in a way which was unique to England. The class struggles of the late
middle ages did indeed lead to the freeing of the English peasants from serfdom
as elsewhere in Western Europe. On the other hand, the English landlord class
exceptionally retained control of much if not all of the good arable land. During
the sixteenth century an economic boom allowed them to lease out much of this
demesne to prosperous tenant farmers on the basis of so-called economic leases.
Competition among tenants then compelled or forced a process of increasingly
efficient production on the peasant leaseholders based on variable exploitation
and consequent capital accumulation. The surpluses due to overseas trade and
colonialism were dependent variables of this economic process internal to
England and were not as significant.4 The apparently flawless economic logic of
Brenner attracted followers including Ellen Wood, George Comninel, Charles
Post who loosely organized themselves into a historical school that came to be

known as Political Marxism.5
Wallerstein accepted the importance of sixteenth century English capitalist
agriculture in the development of capitalism. On the other hand, following
Marx he also insisted on the importance to accumulation of the simultaneous
development of the world market based on colonialism and unequal exchange.
In particular he rejected the idea that capitalism was merely the result of increas-
ingly efficient variable exploitation. Absolute exploitation in the form of slavery,
serfdom, peonage and sharecropping in Eastern Europe and in the non-European
world were integral to the historic accumulation of capital.6
Wallerstein’s point is well taken as variable exploitation only amplifies abso-
lute exploitation which is always and everywhere a fundamental characteristic
4 R. Brenner, ‘Agrarian Class Structure and Economic Development in Pre-Industrial Europe’,

Past & Present, Vol. 70, No. 170, 1976, pp. 30-75 in T. H. Aston and C.H.E.Philipin,eds.,
The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial
Europe,(Cambridge, London: Cambridge University Press, 1975, pp. 10-63.
5 A. Callinicos, ‘The Limits of ‘Political Marxism’, New Left Review, Vol. 184, Nov.-Dec. 1990,
pp. 110-15.
6 I. Wallerstein, The Modern World-System, Vol. 1, Capitalist Agriculture and the Origins of the
European World-Economy, New York: Academic Press,1974, p. 24, 37-8
THE STATE AND THE BIRTH OF CAPITALISM 245
of capitalism including English capitalism. But there are other objections to

Brenner’s view that need to be aired. He represents the market economistically
and anachronistically as a rational, fully competitive entity driving forward
ever increasing levels of productivity from the beginning of capitalism whereas
it itself was a product of a slow historical evolution in which the regulatory,
legal and coercive framework of the state was fundamentally important to its
development. Indeed, for Brenner the English Revolution of the seventeenth
century such as it was was not a product of class struggle but like colonial
exploitation the by-product of inexorable economic forces.
In the development of English capitalism as conceived by Brenner the
emerging bourgeoisie have little political or economic agency. It is the nobility
who take the initiative by dictating the terms of leaseholds and who are never
really displaced even by revolution. But the notion of active engagement of the
nobility in economic leasing prior to the nineteenth century has been questioned.
Michael Zmolek, a new member of the Political Marxist School, has recently
attempted to broaden Brenner’s rather narrow focus on agriculture by pointing
to the intimate tie between rural capitalism and industrial development which
he shows developed in tandem.7 We would go further and underscore that
agricultural capitalism seems to have developed in regions where there was a
parallel development of industry and their emergence seems to have been an

inter-dependent process.8 Chris Harman rejects the economism of Brenner reit-
erating the importance of the late medieval rebellions to liquidating feudalism,
but insisting contrary to Brenner, that they were not merely economic but also
religious and political revolts.9 Against Brenner’s emphasis on the importance
of the economic leases imposed by the nobility, Terence Byres has demon-
strated that it was social differentiation among the peasants facilitated by the
late medieval crisis and resultant class struggles and notably the appearance of
a stratum of better-off peasants seizing economic opportunities which sparked
sixteenth century capitalism.10 Meanwhile Brian Manning has demonstrated the
key role of the so-called middle sort in both town and country to the religious
7 M.A. Zmolek, Rethinking the Industrial Revolution: Five Centuries of Transition from Agrarian
to Industrial Capitalism in England, Leiden, Boston 2013, p. 47.
8 H. Heller, The Birth of Capitalism: A Twenty-First Century Perspective, London, Pluto Press,
2011, p. 124.
9 C. Harman, ‘An Age of Transition? Economy and Society in England in the Later Middle Ages’,
Historical Materialism, Vol. 16, No.1, 2008, pp. 185-99.
10 T. Byres, ‘Differentiation of the Peasantry Under Feudalism and the Transition to Capitalism:
In Defence of Rodney Hilton’, Journal of Agrarian Change, Vol. 6, No. 1, 2006, pp. 17-68.
246 HENRY HELLER
and political revolution of the seventeenth century.11 Indeed, it needs to be

asked of Brenner how a process of increasing accumulation could not change
the balance of social and political forces between those who benefited from
profit against those who lived off rents (even capitalist rents).
Although Brenner starts out from the class struggles of the late middle ages
his account actually downgrades their role including the part of early modern
revolutions in ushering in capitalism in the early modern period. As we have
noted there is a strongly economistic flavour to his perspective. Class struggle in
his interpretation plays the role of little more than an origin myth. His dismissal
of the significance of the English Revolution as a bourgeois and capitalist revo-
lution furthermore is the result of the influence of revisionist or anti-Marxist
history on him which cannot withstand the research of Manning.12 But it also
may reflect the overall influence of the neoliberal ethos which among other
things reduces everything to a matter of economics. His refusal to understand
the influence of class struggle including the role of ideology and politics likely
is also the result of his affinity to analytical Marxism a school of philosophical
analysis current in the 1980s which arose in the wake of the hegemony of
analytical philosophy in England and the United States. This school which was
led by John Roehmer and G.A. Cohen aimed to eliminate everything meta-
physical in Marxism including the dialectic or the idea of contradiction which

is rooted in the historical reality of class struggle.13 Again this current whose
life thankfully was cut short reflects the unfortunate influence of neoliberal
thinking even on the consciousness of Marxist scholars.
Perhaps the most egregious error of Brenner was his insistence that capitalism
was a uniquely English phenomenon an erroneous view which accords with
long held and irritating prejudice rooted in a sense of English exceptionalism.
The real problem is to try to explain why capitalism took root and flourished
in some places and was arrested in others and it on this problem that we will
focus. It is true that Brenner latter corrected himself by quietly acknowledging
that capitalism also developed in Holland as well as in England. Moreover in
Holland at least he acknowledges the primary role of the petty producers.14
11 B. Manning, Aristocrats, Plebians and Revolution in England 1640-1660 , London, Easthaven,

Connecticut: Pluto Books, 1996.
12 Heller, pp. 123-7.
13 R. Keucheyan, The Left Hemishpere: Mapping Critical Theory Today, London, New York, Verso,
2013, pp. 116-21.
14 Brenner, The Low Countries in the Transition to Capitalism’ in Peasants into Farmers? The
Transformation of Rural Economy and Society in the Low Countries (Middle Ages-19th century) in
Light of the Brenner Debate, Peter Hoppenbrouwers & Jan Luiten van Zanden, (eds.) (Turnhout,
Belgium: Brepols), 2001, pp. 275-338.
But again it is competitive markets alone rather than markets and class and
ideological struggle in the form of the Dutch war of liberation which drove
the process.15 Still we can say that Brenner at least changed his mind whereas
some of his followers like Ellen Woods and George Comninel have persisted
with the idea of the uniquely English origins of capitalism and with unfortunate
consequences on understanding capitalism`s history on the European Conti-
nent.16 The truth is that tendencies in the direction of capitalism had emerged
throughout Western Europe at the beginning of the sixteenth century especially
in northern Italy, the Low Countries, Germany as well as England.
The Renaissance and Reformation

The concept of the Renaissance has long held a place in historical thought and
has been associated with the birth of capitalism by twentieth century histori-
ans.17 From the sixteenth century onward scholars have viewed the invention
of printing, gunpowder and artillery, the use of the magnetic compass and the
discovery of the New World as well as the blossoming of humanism and the
fine arts as marking a qualitative historical change. To this list we can add
the consolidation of the sovereign territorial state and the new realist political
theory associated with Machiavelli. Of late some scholars are dismissive of the
idea that a renaissance in the sixteenth century truly marked the beginning of

modern times.18 Marx and Engels thought otherwise and it is a reconsideration
of their view which helps to re-establish the period of the late fifteenth and early
sixteenth century as a decisive break with the Middle Ages. Marx and Engels
agreed in the first place that the sixteenth century marked a true watershed
taking note of most of the above innovations associated with the Renaissance.
But significantly they connect ed these changes to the decisive transition from
the feudal to the capitalist mode of production.19 They above all emphasized the
inception of the capitalist mode of production including generalized commodity
production based on capitalist relations of production and the birth of the world
market. But from the ideological and social perspective they stressed not so
15 Heller, p. 114.
16 Heller, pp. 114-21.
17 W.K. Ferguson, The Renaissance in Historical Thought, Boston, Houghton-Mifflin, 1948,
pp. 231-4, J.H. Hale, The Civilization of Europe in the Renaissance, New York, Atheneum,
1993, pp. 384-6.
18 Paula Findlen and Kenneth Gouwens, ‘Introduction: The Persistence of the Renaissance’, Amer-
ican Historical Review Vol.103, No. 1 (1998), pp. 52-3
19 Engels, ‘From the Manuscipts of Frederick Engels’ in The Peasant War in Germany, Moscow,
Foreign Languages Publishing House, 1956, pp. 220-1.
248 HENRY HELLER
much the culture of the Renaissance – an elitist movement – but the more or less
coincident Reformation a mass revolutionary movement which was provoked
by the sudden emergence of capitalism. Marx himself took note of Luther’s
awareness of the transformation of usury capital into financial capital at the
beginning of the sixteenth century.20 But it was Engels in the German Peasants
War who fully demonstrated that the Reformation was an early bourgeois revo-
lution marked by the radical religious and popular revolution in Germany – the
center of the new mode of production.21 A historically significant change like
a change in the mode of production then is not merely a matter of economics
as in the conception of Brenner but is necessarily accompanied by cultural and
ideological revolution in the view of Marx and Engels.
Italy
Marx noted that capitalism first developed in Italy which dominated the Euro-
pean economy of the late middle ages. In the wide plains of the Po Valley – the
most productive land in Italy – capitalist farming became prevalent. Throughout
the rest of the Peninsula but especially in the centre share-cropping was the
most widespread form of tenure. Meanwhile in Naples and Sicily large arable
estates continued to dominate. But over time the presence of the old ruling
groups and the vestiges of feudalism there weakened. The landlords who owned

or who were able to buy, sell and exploit these large estates came to be mainly
urban merchants and notables. This change was manifest in a more intense
and systematic exploitation of labour rather than enhanced capital investment.
Hence the historic backwardness of southern Italian agriculture a hinterland of
the capitalist north marked by ongoing structural dependency.
Alongside the large estates of the south a system of compact homogenous
farmsteads of up to several hundred hectares emerged elsewhere by the fifteenth
century in conjunction with a more urbanized and commercialized economy.
Such allotments produced a great variety of crops based on extensive and
intensive methods of cultivation. Modern or rational economic attitudes and
accounting methods appeared and, in contrast to the large estates, these smaller
holdings also displayed the tendency to invest large amounts of fixed as well
as variable capital. The employment of wage labour paid in money was used
more than elsewhere in Europe.
20 K. Marx, Theories of Surplus Value, 4 vols., Moscow, Progress Books, 1971, III, pp. 527-37.
21 Heller, pp. 63-5.
The consolidation of five large states on the Peninsula by the fifteenth century
enlarged markets, while inter-regional and maritime trade between north and
south also grew. Compared to the rest of Europe, markets and the commodifi-
cation of agriculture were highly developed. Italian agriculture of the fifteenth
and sixteenth centuries possessed all the elements of high farming that later
emerged in England, Large amounts of urban or commercial capital flowed into
agriculture not simply to buy but to improve land. Aside from landlord proprie-
tors there was a class of farmer-owners who utilized capitalist methods of land
management and in particular employed wage labour. It was during this Renais-
sance that northern and central Italy took on the aspect of the celebrated ‘bel
paesaggio’ or beautiful landscape with its characteristic sculpted and terraced
hillsides and valleys.22
These developments not only raised the net agricultural product, and provi-
sioned a particularly dense urban network in the north, but by doing so allowed
a very early expansion of the manufacturing sector.23 In the fourteenth and
fifteenth century the whole Peninsula including the south was commercially
linked in inter-regional and maritime networks dominated by the northern
cities of Milan, Genoa, Venice and Florence. The integration of the primary,
secondary and tertiary sectors allowed a high degree of urbanization and the
emergence of new political structures, social relations and cultural values which

are associated with the Italian Renaissance.
The merchants of northern Italy dominated much of European wholesale
commerce from the thirteenth through the fifteenth centuries. They controlled
the markets for raw materials and the outlets for manufactured goods. Long
distance trade in both precious and bulk goods lay in their hands. As needed,
they developed new commercial and financial techniques while creating a finan-
cial network which covered Europe and the Mediterranean. Their dominance
over international trade in wool cloth, silk, armaments, paper and glass set off
the first systematic processes of capital accumulation and resulted in the reor-
ganization of the countryside especially in the Po Valley.24 Florentine banking
was especially strong but the economy of that city overall can be described
22 Emilio Sereni, History of the Italian Agricultural Landscape, R. Burr Litchfield, tr., Princeton,
Princeton University Press, 1997, p. 143.
23 Renato Zangheri, ‘Agricoltura e sviluppo del capitalismo. Problemi storiografici’, Studi Storici,
Vol. 9, No. 3-4 (1968), pp. 35-95.
24 M. Aymard, Maurice (1982) ‘From Feudalism to Capitalism in Italy: The Case that Doesn’t Fit’,
Review , Vol. 6, No. 2 (1982), pp. 163-4. 186.
250 HENRY HELLER
as capitalist including the production and exchange of art, luxury goods and
works of craftsmanship.25
Germany
Northern Italy continued to be the dominant actor in emerging European
capi-talism until the rise of Antwerp and the North Atlantic from the 1520s
onward.26 But between the 1470’s and the 1520s the most dynamic pole of
up-and-coming capitalism in Europe was Germany or the so-called Holy
Roman Empire. This became the site of the first early bourgeois revolution.
Its geographical position between still-dominant Italy and the emerging
Netherlands helps to explain its dynamism. But more significant was the
extraordinary expansion of its mining and metallurgical industries. Especially
important were the gold and silver mines of the Tyrol, Erzgebirge (Saxony/
West Bohemia) and Hungary/Eastern Slovakia. Organized and controlled
on a capitalist basis, these mines, which employed tens of thousands of
wage workers, provided the liquid capital in the form of precious metals
which was critical to the spectacular early expansion of the capitalist
economy in Europe (1470-1530). Silver and gold from Central Europe also
supplied virtually the only commodities Europeans could exchange for

Chinese, Malay and Indian silks, spices and porcelains. Control of precious
metals facilitated the opening of new trans-oceanic sea lanes circumventing
in part the Mediterranean and allowing Europeans for the first time to trade
directly with Asia.
Money had been an increasing factor in the European economy since the
thirteenth century. But the opening of the German gold and silver mines in
the second part of the fifteenth century and the subsequent inﬂux of New
World gold and silver made available unprecedented amounts of bullion.
By means of the investment of this money in productive activity further
capital accumulation took place. It occurred through an expanding cycle
of investment and production, the creation of surplus value, and
subsequent realization as money through sale of commodities. The initial
accumulation of capital in Europe lubricated itself through this ongoing
injection of specie and accompanying monetary inflation which spurred
profits and depressed real wages. It was the Marxist economist Alfred
Sohn-Rethel who stressed the co-extensive emergence of rational thought
and more extensive forms of
25 R. Goldthwaite, The Economy of Renaisance Florence, Baltimore, Johns Hopkins University
Press, pp. centuries,
Sixteenth 390-1, 583- 4.
3 vols.,The Hague, Nijhoff, 1963.
26 H. van de Wee, The Growth of the Antwerp Market and the European Economy( Fourteenth-
exchange. Sohn-Rethel based himself on Marx’s insight that logic was in a way
‘money of the spirit’ in the sense that both money and logic are indifferent to
specific content. Following up on Sohn-Rethel a further insight by Jappe insists
that there is a likely relationship between the production of more and more
surplus value or abstract labour, the growing importance of money capital, and
the increasing demand for a more rational religion.27 It was in Germany that
the new more rational approach to religion first appeared.
Like Italy, Germany emerged from the middle ages divided into many territo-
ries. Indeed, its very decentralization facilitated the initial emergence of markets
and manufacturing based on hundreds of economically inter-connected free or
imperial cities operating within the web of late medieval feudal relations. In this
respect, Germany differed fundamentally from late medieval Italy where only
vestiges of medieval feudalism remained. But in Germany the feudal nobility,
territorial princes and the Holy Roman Emperor not only survived, but were
becoming stronger. In this respect Germany also differed from England where
serfdom and lordship declined in the fourteenth and fifteenth centuries. This
initial process of feudal decline then set the stage for the emergence of English
capitalism in the sixteenth century. In Germany, by contrast, serfdom and lord-
ship grew stronger at the end of the fifteenth and beginning of the sixteenth
century and the new economic dynamism in fact made possible the simultaneous

strengthening of not only capitalism but also feudal reaction. The result of this
volatile contradiction was the famous social and political explosion known as
the German Peasant War (1524-25) characterized as we have seen by Engels
as an early bourgeois revolution.
Engels and the Peasants War

As a still young professional revolutionary, Engels was not inspired by an
interest in historical research or mere intellectual curiosity to investigate the
German Peasants War. Basing himself on the historical work of William
Zimmerman, a German historian, Engels wrote his Peasant War in Germany
in the immediate wake of the revolution of 1848 to teach political and historical
27 A. Jappe, ‘Sohn-Rethel and the Origin of ‘Real Abstraction’:A Critique of Production or Circula-
tion?’, Historical Materialism, Vol. 21, No. 1(2013), pp. 3-14.
252 HENRY HELLER
lessons and to inspire fellow revolutionaries in Germany.28 Engels’ analysis of

the conditions in which the revolution took place stressed the lack of German
political unity and social cohesion and the progress of its mining, manufac-
ture, trade and agriculture. At the same time he assumed the relative economic
weakness of Germany compared to Italy, the Netherlands and England at the
beginning of the sixteenth century.29
But the political failure of Germany was uppermost in Engel’s view. Its
failure to achieve national unity guaranteed both that the bourgeois revolution
would be aborted and Germany would remain excluded from world commerce:
“while in England and France the rise of commerce and industry had the effect
of intertwining the interests of the entire country and thereby brought about
political centralization, Germany had not got any further than grouping interests
by provinces, around merely local centers, which led to political division, a
division that was soon made all the more final by Germany’s exclusion from
world commerce”.30 As their power grew, Germany’s territorial princes levied
heavier taxes and servile obligations on the peasants.31 The patrician rulers of
the towns were allied to the feudal lords and oppressed the rest of the urban
population including the rich and not-so-rich burghers whom Engels pointedly
compared to the middle class liberals of his own time. The burghers emerge as a
moderate opposition, aspiring to share in the town governments from which they

were excluded and attacking the privileges and property of the clergy. Beneath
them came the plebeians – ruined burghers, small-scale craftsmen, journeymen,
day laborers and the numerous forerunners of the lumpen proletariat some of
whom became part of a radical opposition.32 No better, perhaps even inferior
to them were the peasants who earlier had engaged in numerous local revolts,
but who had never come together in a general national revolt.
Though Germany was politically and economically divided on the eve of the
Peasant Revolt, the Reformation created a crisis during which revolutionary
political and social ideas spread deeply and broadly in the population. During
this crisis three large camps coalesced: Catholic or reactionary, Lutheran bour-
28 Engels, The Peasant War in Germany in Marx and Engels (1975-), Collected Works, R. Dixon
et al. (tr.)(London: Lawrence & Wishart, New York, International Publishers, Moscow, Progress
Books).
Vol. 10, pp. 397-482. For appreciations of Engels work from a Marxist point of view see the
remarks of E. Engelber and G.Vogler, ‘The Peasant War in Germany’-125 Years Later’ in The
German Peasant War of 1525, J. Bak, ed., London, Frank Cass, 1976, pp. 103-16.
29 Engels, Ibid., p. 399.
30 Engels, Ibid., p. 401
32 Engels, Ibid. pp. 406-7.
geois reformist and revolutionary.33 The religious conflicts of the sixteenth

century were class conflicts fought out on the basis of the shibboleths of religion.
This was the result of the ongoing powerful influence of the Church as a conse-
quence of which all questions – political, juridical, social and economic – were
still posed largely in religious terms: “this supremacy of theology in the entire
realm of intellectual activity was …an inevitable consequence of the fact that
the church was the all-embracing synthesis and the most general sanction of the
existing feudal order. It is clear that under the circumstances all the generally-
voiced attacks against feudalism, above all the attacks against the church, and
all revolutionary social and political doctrines were necessarily also mostly
theological heresies.”34
With roots deep in the middle ages, the heretical ideology of the burghers,
to which some of the nobility also subscribed, called for the material dispos-
session of the wealth and privileges of the ecclesiastical order. Agreeing with
such notions, peasant and plebeian radicals took things a step further by calling
for political, social and even economic equality.35 The propertyless, of whom
there were increasingly large numbers, challenged the notion of a class-based
society by espousing in utopian fashion the idea of all things in common.36
The Catholic conservative camp included the imperial authorities, the eccle-
siastical and some lay princes, the richer nobles, the prelates and urban patri-

cians. The Lutheran camp attracted to itself all the propertied members of the
opposition including the mass of the nobility, the burghers and even some lay
princes who wished to seize the property of the Church and increase their inde-
pendence from the Holy Roman Empire. The peasants and plebeians constituted
the radical party.37 The most important leader of the latter group was Thomas
Münzer who vainly advocated communism and a pantheism which, according
to Engels, approached atheism.38
While the aspirations of the radical party were doomed to fail so, too, were
those of the more moderate reformers. No effective alliance between elements
of the nobility and the bourgeoisie of the English sort emerged. In the latter
country serfdom had largely disappeared by the end of the middle ages and the
old nobility was virtually wiped out in the Wars of the Roses replaced by a new

34 Engels, Ibid.
36 Engels, Ibid.
37 Engels, Ibid., pp. 15-6
38 Engels, Ibid., pp. 421-2.
254 HENRY HELLER
nobility of bourgeois origin. In contrast serfdom was still rampant in Germany

and the nobles drew their income largely from feudal sources. Political power
lay overwhelmingly at the local and regional level.39
The nearest approximation to a bourgeois revolutionary program was articu-
lated by Wendel Hipler in the so-called Heilbronn Manifesto issued at the height
of the Peasant War. Engels is careful not to claim that Hipler’s program was an
expression of the bourgeoisie but rather “what may be described as the cross-
section of the nation’s progressive elements, [which] anticipated modern bour-
geois society.” While nominally written in behalf of the peasantry, the Heilbronn
program called for a standardized currency, standard weights and measures,
abolition of internal customs duties, etc., demands which were more in the inter-
ests of the townsmen than the peasantry. In order to reach out to the nobility,
concessions were made that substantially approached the modern system of
redemption and would have transformed feudal into bourgeois landlordship.40
Engels at one point compares the German Peasants Revolt to the French
Revolution from a political point of view. In the case of the eighteenth century
revolution in a politically unified France, the whole country was split into two
clearly opposed camps. In a deeply divided sixteenth century Germany, this
was a rank impossibility.41 On the other hand, Engels saw the Peasants War not
simply as a German event but as an international one based on the prospects

for the further development of capitalism. As he reiterated on returning to the
theme many decades later, “Reformation – Lutheran and Calvinist – is the No. 1
bourgeois revolution, the Peasant War being its critical episode… Revolution
No. 1, which was more European than the English and spread in Europe much
more rapidly than the French.”42 Indeed, the Reformation spread throughout
Western and Central Europe.
Engels work provides us with an insight into his and Marx’s view of history
which entails more than simply an evolution from feudalism to capitalism.
“Three centuries have flown by since then,” he writes, “and many a thing has
changed; still the peasant war is not as far removed from our present-day strug-
gles as it would seem, and the opponents we have to encounter remain essen-
tially the same.”43 Engels and Marx view the capitalist past from the perspective
of the political struggles of the present and above all from the viewpoint of
39 Engels, Ibid.
40 Engels, Ibid.
41 Engels, Ibid.
42 Engels, Ibid.
the proletariat or the class agent which will destroy capitalism and establish
socialism. In the sixteenth century as in the mid-nineteenth German capitalism
and bourgeoisie were weak and the nation politically divided and still under
the sway of feudal powers. The proletariat was if anything weaker. Engels
does note the existence in Germany at the time of the Peasants War of a certain
proletarian element among the plebeians. But he minimizes its importance
based on his assumption of the relative backwardness of the German economy.
It is in this light that we should view his treatment of the Thomas Munzer the
most important leader of the Peasants Revolt who put forward a program of
communism based on the Gospel. He saw Munzer as a utopian whose program
anticipates the future but has no real application in sixteenth century Germany
where capitalism scarcely had been born. On the other hand, Engels honoured
Munzer as a pioneer who understood the revolutionary potential of the prole-
tariat.44 This is in accord with Marx’s own insistence on what he referred to as
the permanent revolution.
Permanent Revolution
Marx had adumbrated the theory of permanent revolution as early as 1843 in
his Critique of Hegel’s Theory of Right. In England and France the bourgeoisie
had been revolutionary but in nineteenth century Germany they were not. Politi-

cally Germany remained backward and divided under the rule of feudalism and
absolute princes but at a theoretical level it had developed the implications of
the revolutionary developments in the states further to the West and theory can
become a material force if it grips the masses. Politically backwards Germany is
on the threshold of rapid capitalist development which will create the grounds
for a general emancipation of society going beyond the purely political eman-
cipation in France and England. Indeed, the continued dominance of feudalism
and absolutism under modern economic conditions intensifies the contradictions
in German society. It is the proletariat not the supine bourgeoisie which will be
the agent of this transformation in which control over the state makes possible
the transformation of social and economic relations.45
Among other things the concept of the permanent revolution meant singling
out whenever possible the thought, organization and action on the part of the
44 Engels, Ibid., pp. 469-74.

45 H. Draper, Karl Marx’s Theory of Revolution, New York, Monthly Review, 1977, Vol. 2,
pp. 170-74, N. Davidson, How Revolutionary Were the Bourgeois Revolutions?, Chicago,
Haymarket, 2012, pp. 144-8.
256 HENRY HELLER
proletariat marking its political and ideological independence from the bour-
geoisie. For it is the proletariat which is born simultaneously with capitalism
and will see through its eventual overthrow. It is for this reason that Engels a
few years later underscored the importance of the German Peasants War and
especially the role of Munzer. In Germany according to Marx and Engels the
fate of the proletariat was not merely foreshadowed in the past but in the future
it would carry through the so-called national and democratic revolution which
the weak bourgeoisie could not accomplish. Beyond this immediate goal lay the
overthrow of capitalism and establishment of socialism. The permanent revolu-
tion requires that the proletariat politically ready itself or permanently mobilize
itself to understand and implement these goals. Such political consciousness
includes an understanding of its history in which evolutionary development
based on the capitalist development of the forces of production and revolu-
tionary leaps by the proletariat are both possibilities.
Engels proved to be wrong about the German economy at the time of the
Peasants War under-estimating the surge of capitalism there which was stronger
than anywhere else in Europe. Population growth and overseas expansion led
to an expansion of demand for commodities. The gold and silver mining sector
expanded prodigiously in Germany facilitating exchange and capitalist accu-
mulation down to 1530. Capitalist relations of production were established

throughout this key sector with technical progress and substantial capital invest-
ment by capitalists. Moreover the influence of financial and merchant capital
was also apparent to a greater or lesser degree in the grain and woad trade and
the extensive metallurgical, wool, silk, linen, fustian, grain, slat, glass-maing
and printing industries that spread across the face of Germany. As the Reforma-
tion crisis approached increasing sectors of the German economy came under
control of powerful merchants and banking firms.46 We now know that the
proletariat actually was much stronger and more militant than Engels supposed.
A significant wage earning class emerged especially in the mining sector and
played an important role in the Peasants War alongside plebians and peasants.47
Munzer’s communist ideas it turns out were not so utopian as he thought.
Germany at the time of the transition from feudalism to capitalism was riven
by what Marx referred to as uneven development in which permanent revolu-
tion plays a part. A useful summary of the process of uneven development,
as a necessary aspect of capitalism comes from Volume One, chapter 27 of
Marx’s Capital. Here he states that a major contradiction of capitalism is the
46 Engels, Ibid.
47 Heller p. 66-7
simultaneous emergence of concentrations of wealth and capital (for capital-

ists), on the one hand, and poverty and oppression (for workers), on the other.
This “general law of capitalist accumulation”, as Marx termed it, highlights
capital-labor conflict, and is one way to ground a theory of uneven develop-
ment. But thinking about uneven and combined development by Marx dates
further back at least to his Grundrisse (1857-58), where unevenness represents
the condition for a transition from one declining mode of production to another
rising and more progressive mode.48 In the case of Germany in the opening
decades of the sixteenth century the transition from feudalism to capitalism
exacerbated class conflict at every level of German society, prompting noble
violence, increased feudal dues and growing attempts to impose or re-impose
serfdom on the peasantry, especially in southern and southwest Germany and
the Rhineland in the late fifteenth and early sixteenth century. The imposition
of serfdom even served as a tool by which territorial princes exerted their
authority.49 On the other hand, though they lacked leadership and common
objectives the resistance of the common people became equally fierce, leading
to the plebian, worker and peasant protests that characterized the period leading
to the Reformation crisis.
Failure of Italian Capitalism


But to return to the most fundamental question why did Italian and German capi-
talism which showed such promise ultimately fall back? It is the distinguished
Marxist historian and student of the Annales historian Fernand Braudel Maurice
Aymard who has most profoundly investigated the Italian failure. Aymard
underscores that it was the very dominance of merchant capital in Italy which
ultimately undermined it. It was the merchants of the northern Italian cities
which were responsible for the economic transformation of the countryside.
Looking at their role specifically from the perspective of the Dobb-Sweezy
debate, Aymard contends that Sweezy was right to see trade as a decisive
factor in the transition though he was wrong to see it as an exogenous force in
causing the decline of feudalism and development of capitalism. According
to Aymard the very merchant base of this capitalism – which was authentic
enough – defined its limits. Unlike agriculture, no transformation of the means
of production occurred in manufacturing, including in the all-important cloth
48 P. Bond, ‘Uneven Development’ in Encyclopedia of Political Economy, Phillip Anthony O’Hara,

ed., 2 vols., New York, London, Routledge, Vol. 2, 1999, pp. 1198-2000.
49 A. Laube, M, Steinmetz and G,Vogler , Illustrierte Geschichte der deutschen frühbürgerlichen
Revolution, Berlin, Dietz, 1974, pp. 51, 53.
258 HENRY HELLER
industry dominated by merchants and guilds. Italian merchant capitalists proved

to be uninterested in transforming the means of production in manufacture:
“…we find once again the “structural’ character of merchant capital and its
indifference to the mode of production of those commodities that enter into
circulation which led to its continued preference for simple financial control
over producers rather than real control of the processes of production.”50 Rural
capitalists were blocked from developing industry by the influence of urban
merchants. Furthermore, the urban merchants who dominated this economy
failed to develop a truly national market which was critical to the further devel-
opment of Italian capitalism. Only the creation of a wide and deep national
market especially one protected by a centralized territorial state could have
maintained the competitiveness of Italian manufacturing in the long term.
According to Aymard there are three major interpretations of Italian capital-
ism’s failure to advance further. The first epitomized in the work of Ruggiero
Romano insists that despite the appearance of modernity the Italian economy
failed to achieve real breakthroughs in productivity. Not only did agriculture and
industry remain technologically inert but this stagnation was compounded by an
urban-rural conflict which lacked any dialectical ‘virtue’, that is, did not issue
in any positive economic outcome.51 From this perspective Italian merchant
capitalism such as it was could not fully transcend its links to a European-wide

feudal framework and so merged back into it. This wider view is provided
by Wallerstein. For Wallerstein the decisive factor in the evolution of Italy
was the emergence of the capitalist world economy after 1450. Whereas Italy
had shared the dominant role in the European economy with the Netherlands,
the new economic hierarchy that emerged following the European voyages of
discovery saw Italy’s decline. It lost its core position to Holland which, in turn,
lost out to England. With the emergence of the world market, the timing of
capitalist development was critical to determining a country’s eventual position
in the magic circle at the capitalist core or outside of it. As it turned out Italy’s
capitalism was too early while England’s was timed just right.
But, Aymard complained, despite Wallerstein’s references to the rural sector,
he prioritized trade and industry at the expense of the social realities of Italian
agriculture in explaining the failure of Italian capitalism. As a result of his bias
toward exchange he was unable to get at the root of the failure of the Italian
50 Aymard, p. 147.
51 R. Romano, ‘La Storia Economica dal secolo XIV al Settecento’ in Storia d’ Italia, 10 Vols., Dall
caduta dell’Impero romano al secolo XVIII, Romano and Corrado Vivanti, eds., Turin: Giulia
Einaudi, 1972-76), Vol. 2, Part II, pp. 1805-19.
transition. This lay in excessively exploitative social relations of production.

Aymard’s own explanation of the falling back of Italian capitalism focuses on
the character of the merchant capitalism of the towns.52 In a way which was
unique to Europe at the time, the merchant capital of the cities dominated and
transformed the whole Italian countryside and most radically the north. Despite
the wars of the first part of the sixteenth century, Italy fully participated in the
positive West European conjuncture of that period. All the conditions for further
accumulation and expansion were present including buoyant profits, expanding
demand, good prices and increased production and consumption amid stable
or increasing productivity in industry and agriculture.
It was the flow of Italian merchant capital into the countryside above all
which made this surge of growth possible but also determined its limits. The
expansion of the Italian economy continued until about 1600. But from the
1570s agriculture was unable to sustain the commercial and industrial sectors
with food prices leaping ahead of those in trade and manufacturing. Signs
of over-exploitation, deforestation, erosion and ecological devastation of the
land began to appear.53 The links between the north and south of the peninsula
weakened as northern cities tended to abandon the import of southern wheat and
raw silk while liquidating previous investments in southern land or municipal
bonds. Instead the political and merchant elites of the northern towns came to

favour urban self-reliance based on the exploitation of their own countrysides
and through investment in local municipal bonds. From 1600 a long inertia set
in. Even the ruralization of industry did not allow a re-conquest of foreign let
alone domestic markets which contracted.
According to Aymard, it was the contradiction between the interests of urban
elites and the rural dwellers which blocked further growth. The towns began
to restrict freedom of markets or permitted only those which were regarded as
serving their interests imposing controls on grain prices, production, marketing
and exports in order to ensure supplies to their expanding populations especially
the urban poor. Rents rose and the profit levels of capitalist farmers stagnated
or declined. Between 1480-1680 grain prices rose twice as fast as prices for
manufactures or raw materials and wages declined. Once urban populations
began to stagnate, imports of grain from the south as well as exports of textiles
to southern Italy fell. By the seventeenth century the Italian economy was
52 Aymard, pp. 185-96.

53 Sereni, pp. 158, 187, F.Tabak, The Waning of the Mediterranean, 1550-1870: A Geohistorical
Approac, Baltimore, Johns Hopkins University Press, 2008, p. 192.
260 HENRY HELLER
reduced to local urban economies exploiting an immediate hinterland through

rents and taxes.
As Aymard suggests, the Italian city-state and the merchant capitalism it
spawned appeared to have had a built-in limitation. This was not unlike the
view of Braudel who spoke of the city-state and the countryside dominated by
it as the basis for its expansion and power and at the same time the cause of its
ultimate weakness.54 In this light John Merrington’s argument that the medieval
corporate town was an integral part of the feudal system or as being unable to
transcend it is deeply insightful.55 Perry Anderson further notes that the Italian
city-states usurped rather than transformed feudal power. It must therefore
be acknowledged that the Italian city-state was at fundamental odds with its
countryside.56 The latter was considered and treated as a conquered territory.
The peasants had no rights of citizenship and little sense of loyalty to the city
to which they were subject politically and economically.
It was only the creation of a unified territorial state that could transcend the
city-state formation. But Aymard also argues that the Italian city-states had no
chance of conquering and unifying Italy-an indispensable step in the creation
of a territorial state and national market. Divided between themselves, they
could not translate their urban-based economic power into mobilizing their
rural populations toward such a project.57 This argument reinforces the idea

that markets were not neutral economic entities but depended on the political
power of one or another jurisdiction.
While Aymard’s arguments, and those of other historians who stress the
limitations of Italian merchant capital are well-founded, one wonders whether
Aymard’s discussion of the transition debate does that debate full justice.
Though he chastises Sweezy for wrongly thinking of trade as an exogenous
rather than endogenous force in capitalist development, he largely ignores
the emphasis of Dobb and other debaters on the positive economic role of the
petty producers. Yet it could be argued that the extraordinary development or
over-development of Italian overseas or exogenous trade from the middle ages
onward warped the development of Italy’s internal economy by giving too
54 F. Braudel, ‘L’Italia Fuori d’Italia: Due Secoli e Tre Italie’ in Storia d’ Italia, 10 Volumes , Dall
caduta dell’Impero romano al secolo XVIII, Romano and Corrado Vivanti, eds., Turin: Giulia
Einaudi, Vol. 2, Part 2, p. 2114.
55 J. Merrington, John , ‘Town and Country in the Transition to Capitalism’, New Left Review,
Vol. 93 (1975), pp. 71-92, republished in Hilton, ed., The Transition from Feudalism to Capi-
talism, pp. 171-95.
56 P. Anderson, Passages from Antiquity to Feudalism, London, Verso, 1974, p. 192.
57 Anderson, Lineages of the Absolutist State, London, Verso, 1974, pp. 152, 156.
much power to exporters and overseas merchants at the expense of small-scale

rural and urban producers who took the lead in developing English capitalism.
Ultimately Perry Anderson’s suggestion that the failure of Italian capitalism
was political seems conclusive.58 The inability of Italy to unify itself into an
early modern territorial state set the limits to the development of its capitalism.
No doubt this failure was connected to the entrenched localized power of these
same merchant capitalists. Successive attempts to carry out such a unifying
revolution from above by emperors or despots during the late medieval period
were defeated. Failure blocked the emergence of a national market and of a
national political entity that could defend Italy militarily and economically
against foreign invasion. Unable to launch overseas exploration on their own
Florentine and Genoese captains and merchants ended up taking the lead in
Spanish, French and English overseas ventures. The lack of a national state not
only made it impossible for capitalism to emerge in Italy until the nineteenth
century, it led to a divided Italy becoming the plaything of foreign powers. In
the sixteenth and early seventeenth centuries it was Spain which dominated the
Peninsula. Subsequently the French and Austrian Hapsburgs vied with Spain
for influence. These great power rivalries ensured that the Peninsula would
remain divided into a multitude of small states and principalities. Within these
political entities clerical and noble elites were able to maintain themselves at

the expense of a weak bourgeoisie.
German Capitalism Aborted

The German case was different. In Italy and England feudalism had declined and
capitalism took its place but in Germany a powerful feudal reaction consolidated
itself as the capitalist economy and financial and merchant capital advanced.
Capitalism exacerbated class conflict at every level of German society.The
further development of capitalism was hemmed in not only by the feudal land-
lords but also by the imperial and princely rulers. The Hapsburg Emperor sought
to rule a universal European state not a unified and centralized Germany. The
Emperor, as well as the territorial princes, blocked such a national political
project. Serfdom and feudalism meanwhile fundamentally barred the route to the
development of capitalism in agriculture.59 Such a route might have been opened
by the demands of the peasants during the Peasant War to abolish serfdom and
sweep away both feudalism and the nobility and consolidate government under
58 Anderson, Lineages, p. 162.

59 A. Laube, M, Steinmetz and G.Vogler, p. 206.
262 HENRY HELLER
the Emperor. The peasants also demanded an end to the established Church
with its landed wealth and feudal privileges and the installation of a democratic
church based on a revolutionary interpretation of the Gospel.60 The latter demand
would have dissolved the ideological foundation of the feudal order. The end of
feudalism and serfdom would have eased the burden on the peasantry, helped
to improve output and furthered the primitive accumulation of capital.61
The Key Role of the State

The failure to consolidate a national territorial state blocked the further develop-
ment of both Italian and German capitalism. It is in Perry Anderson’s Lineages
of the Absolutist State that we find the most developed theoretical discussion of
the role of the state within the historiography of the transition finds its fullest
expression. Anderson is, of course, the editor of the New Left Review, the
influential journal of the English-speaking left intelligentsia. His interest in the
transition question is but one of an incredible range of political and cultural
interests and his theoretical insight and erudition have arguably made him the
leading Marxist intellectual of this generation. In terms of the recent transition
debate Anderson must be considered second only to Brenner and Wallerstein
in advancing discussion.

For Anderson, only West European feudalism could have created capitalism.
Anderson’s view of feudalism and its demise combines an emphasis on class
struggle with recognition of the importance of exchange relations. The emer-
gence of the territorial state and the global market both provided indispensable
foundations for capitalism. Failure to create a national territorial state proved
fatal to Italian and German capitalism. Successful consolidation of such a state in
England and Holland created the framework for the further advance of capitalism.
In feudalism the peasant producer was tied to the land by being legally bound
to the soil as a serf. Agrarian property was privately controlled by a class of
feudal lords who extracted a surplus in the form of rent from peasants by
political-legal or extra-economic coercion.62 These social relations provided the
setting for a dramatic increase in productivity during the high middle ages.63 In
contrast to Dobb, however, Anderson stresses the objective exhaustion of the
possibility of further advances in the forces of production as the source of the
60 Ibid.
61 A. Laube, M, Steinmetz and G.Vogler , p. 233.
62 Anderson, Passages, p. 147.
63 Anderson, Passages, p. 190.
feudal crisis rather than over-exploitation of the producers. Population increased

forcing the clearing of increasingly marginal land while necessary investments
in improving the productivity of existing tillage were not undertaken.64 The
subsequent economic crisis provoked widespread peasant revolts which were
everywhere defeated in the short term. In the longer run the income and wages
of the peasantry improved and serfdom declined.65
Anderson also insisted, more than any other previous participant in the debate
save Sweezy, on the important role of the towns in the decline of feudalism and
this in contradiction to his view of the regressive role of the cities in the Italian
renaissance. Urban commercial networks tended to destabilize feudal social
relations. Towns served as potential refuges for runaway serfs as well as allies
in peasant revolts. Indeed, the most significant rural revolts were located close
to towns.66 In the long term the noble lords’ need for commodities produced in
the towns led them to commute labour services into money rents and to lease
out demesne to peasant tenants. In England in the fifteenth century serfdom
virtually disappeared and peasant incomes rose. Social differentiation increased
in the villages as a stratum of rich peasants emerged at the top and wage labour
spread in the countryside. Anderson directly addressed the Dobb-Sweezy debate
in a long footnote in the opening chapter of Lineages.67 For him it was not a case
of choosing between rural social relations of production and commercial-trade

relations but of their relative weight and dialectical inter-relationship. Indeed,
based on Merrington, Anderson acknowledged that trade was intrinsic to the
feudal mode.68
Dobb had already suggested that the early modern state was above all designed
to defend the nobility and Anderson provided a conclusive demonstration of this
thesis. The end of serfdom did not bring feudalism to an end. The consolidation
of the territorial monarchies at the end of the middle ages in fact represented
“a redeployed and recharged apparatus of feudal domination, designed to
clamp the peasant masses back into their traditional social position.”69 The
class power of the nobility which was put in question as a result of the disap-
pearance of serfdom was displaced upwards and centralized into the hands of
64 Anderson, Passages, pp. 198-9.

65 Anderson, Passages, pp. 205-6.
66 In his comparative study E. Mielant, The Origins of Capitalism and the ‘Rise of the West’,
Philadelphia, Temple University Press, 2007 stresses the political power and city-state rivalries
of medieval urban merchants in Western Europe as compared to the merely economic power of
merchants in China, India and the Maghreb.
67 Anderson, Lineages, p. 21, n. 10.
264 HENRY HELLER
the new territorial monarchies which became the principal instruments for the
maintenance of noble domination over the peasantry. Moreover, in so far as
nobles blocked the emergence of a free market in land and peasants retained
access to their means of subsistence, feudal relations persisted.70 Nonetheless,
in England and elsewhere in Western Europe the emergence of the territorial
state created a space essential for the further progression of the urban-based
bourgeoisie. In the medieval period political and economic control had been
combined. With the appearance of the territorial state in the early modern
period, political power began to be separated from immediate control over the
economy allowing capitalist forces to emerge. The political order remained
feudal while society under its aegis became more bourgeois.71
Anderson sees the emerging territorial state as having a dual determination:
“the threat of peasant unrest, unspokenly constitutive of the Absolutist State,
was thus always conjoined with the pressure of mercantile or manufacturing
capital within the Western economies as a whole, in molding the contours of
aristocratic class power in the new age.”72 For all that the development of the
territorial state bolstered feudalism, it also provided an enlarged political space
within which capitalism could develop. In such a space lay the market. Just
as Merrington saw the medieval market as intrinsic to the seigneurial regime,
Anderson insists that the capitalist market was a creation of the territorial state

and almost as much a political as an economic institution.
Anderson’s insight into the role of the state is critical to understanding the
transition. Moreover, like his formulation of the relationship between relations
of production and those of exchange, one must underline the importance of the
fact that he grasps the nature of the state in a dialectical way. He demonstrates
that the state both saved feudalism and incubated capitalism within itself. It is
within the state that the transition is possible in the first place. But going beyond
Anderson we insist on the centrality of the state to the development of markets
through mercantilism and colonialism. Finally it is only through the creation of
the state that the possibility for bourgeois revolution which fully consolidates
capitalism is created. Indeed, in so far as early modern history of capitalism
is concerned the seizure of power by the bourgeoisie in Holland, England,
and France was indispensable to the construction of a bureaucratic state and
with it capitalism. It is control of the state which made possible the systematic
reorganization of society including its laws to serve the interests of capitalism.

72 Anderson, Lineages, p. 23-4.
It is the failure to create a territorial state that doomed capitalism in early

modern Italy and Germany. But their failure and the success of England and
Holland is related to the already expressed idea of uneven development. In the
sense used by Hobsbawm uneven development has a geographical resonance in
which one capitalist center or region’s gain is another capitalism’s or regional
loss In general terms uneven development in this sense relates to differential
growth of sectors, geographical processes, classes and regions at the global,
regional, national, sub-national and local level.73
Uneven Development
It was Eric Hobsbawm who first applied the conception of uneven development
in this sense to the historical development of capitalism. He did so as his contri-
bution to the celebrated debate on the transition from feudalism to capitalism
back in the 1950s.74 In his highly original contribution informed by a dialectical
view of history- a contribution which has been largely ignored- Hobsbawm
put the emphasis on the role of uneven development in the development of
capitalism throughout its history.
West European advance came directly at the expense of Eastern Europe
and Asia, Africa and Latin America. The process of West European transi-

tion throughout its early history entailed turning other areas of the world into
dependent economies and colonies. Seizing resources from advanced areas or
later on from colonized regions became an intrinsic feature of West European
development. In other words, the emergence of capitalism has to be understood
in terms of an ongoing world-wide process of appropriation based on uneven
development both within and outside Europe. Hobsbawm concludes that “the
net effect of European capitalism was to divide the world ever more sharply
into two sectors: the ‘developed’ and the “under-developed” countries, in other
words the exploiting and the exploited.”75 Hobsbawm’s conception of the transi-
tion is a dialectical one in which unevenness plays a central part. Gain in one
place is invariably at the expense of other places, even those that were initially
more developed. In this schema the advance of Holland and England toward
capitalism entails the decline of Italian and German capitalism, indeed, the
refeudalization of Italy and Germany and the feudalizing of Poland, Hungary
and Russia.
73 Bond, pp. 1198-2000.

74 Hobsbawm in Hilton, ed., The Transition from Feudalism to Capitalism, pp. 159-64.
75 Hobsbawm , p. 164.
266 HENRY HELLER
Hobsbawm’s conception of uneven development has been further devel-

oped by David Harvey. Harvey understands the development of capitalism as
proceeding through the recurrent renewal of the process of capital accumulation
by means of what he terms a spatial fix. Harvey argues that one of the ways
that capitalism has repeatedly attempted to overcome its crises of over-accu-
mulation is through the abandonment of older centres of accumulation which
have exhausted their profit potential toward new poles of accumulation. In the
contemporary context, the movement of investment capital from the United
States toward China is a perfect example.76 Such displacement can provoke
severe social and political turbulence in what Harvey calls a switching crisis.
Arrighi has lately attempted to show the pertinence of Harvey’s conceptions of
spatial fix and switching crisis to an understanding of the outbreak of what he
describes as signal crises and the initiation of a financial or declining phase of
imperial power in the historical cycles of successive Genoese/Spanish, Dutch,
British and American political hegemonies.77 In each instance, it is the displace-
ment of capital from a place where over-accumulation has led to stagnation
toward a fresh centre of accumulation which provokes crisis and political and
social conflict.
It was Marx himself, of course, who had pointed out how capital had succes-
sively moved from Venice to Holland to England and finally to the United

States from one pole of accumulation to the next through the mechanism of
the international banking and financial system.78 While we have limited hard
or quantitative data of such capital movements, the sequence has been more
or less confirmed by Braudel and Goldthwaite.79 It is to Harvey’s credit that he
has brought this geographical dimension of the historical movement of capital
to the fore. Nonetheless, this spatial displacement of capital should be seen in
the light of Marx’s more fundamental notion of uneven development which
he considered a characteristic feature of capitalism. Throughout it is the state
and the hierarchical order of the international state system which provides the
political framework for these displacements.
University of Manitoba
76 D. Harvey, The New Imperialism, Oxford, New York, Oxford University Press, 2005, pp. 122-23.
77 Arrighi, ‘Spatial and Other “Fixes” of Historical Capitalism’, Conference on Globalization in the
World-System: Mapping Change over Time. University of California, Riverside, February 7-8,
2003, July 1, 2009, http://www.irows.ucr.edu/conferences/globgis/papers/Arrighi.htm.
78 Marx, Capital, Vol. 1 in Marx and Engels, Collected Works, Vol. 35, pp. 743-4.
79 Goldthwaite, pp. 135-6, Braudel, Civilisation matérielle, économie et capitalisme, XVe-XVIIIe siècle,
Paris, A. Colin, 1979, pp. 118, 202-7, 228, 252-3.

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Brenner Versus Wallerstein

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4 R. Brenner, ‘Agrarian Class Structure and Economic Development in Pre-Industrial Europe’,

of capitalism including English capitalism. But there are other objections to

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and political revolution of the seventeenth century.11 Indeed, it needs to be

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11 B. Manning, Aristocrats, Plebians and Revolution in England 1640-1660 , London, Easthaven,

The Renaissance and Reformation

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Engels and the Peasants War

lessons and to inspire fellow revolutionaries in Germany.28 Engels’ analysis of

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geois reformist and revolutionary.33 The religious conflicts of the sixteenth

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33 Engels, Ibid., p. 411.

nobility of bourgeois origin. In contrast serfdom was still rampant in Germany

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44 Engels, Ibid., pp. 469-74.

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simultaneous emergence of concentrations of wealth and capital (for capital-

Failure of Italian Capitalism

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48 P. Bond, ‘Uneven Development’ in Encyclopedia of Political Economy, Phillip Anthony O’Hara,

industry dominated by merchants and guilds. Italian merchant capitalists proved

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transition. This lay in excessively exploitative social relations of production.

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52 Aymard, pp. 185-96.

reduced to local urban economies exploiting an immediate hinterland through

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much power to exporters and overseas merchants at the expense of small-scale

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German Capitalism Aborted

58 Anderson, Lineages, p. 162.

The Key Role of the State

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feudal crisis rather than over-exploitation of the producers. Population increased

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64 Anderson, Passages, pp. 198-9.

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70 Anderson, Lineages, p. 17.

It is the failure to create a territorial state that doomed capitalism in early

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73 Bond, pp. 1198-2000.

Hobsbawm’s conception of uneven development has been further devel-

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