Capital (Volume 2) by Karl Marx

The Genesis of the Industrial Capitalist

By degrees the agricultural population was transformed into material elements of variable capital. For the peasants were constrained, now that they had been expropriated and cast adrift, to purchase their value in the form of wages from their new masters, the industrial capitalists. So they were transformed into an element of constant capital.

Consider the case of Westphalian peasants who, in the time of Frederic II., were all spinners of flax, and were forcibly expropriated from the soil they had owned under feudal tenure. Some, however, remained and were converted into day-labourers for large farmers. At the same time arose large flax-spinning and weaving factories in which would work men who had been "set free" from the soil. The flax looks just the same as before, but a new social soul has entered its body, for it now forms a part of the constant capital of the master manufacturer.

The flax which was formerly produced by a number of families, who also spun it in retail fashion after growing it, is now concentrated in the establishment of a single capitalist, who employs others to spin and weave it for him. So the extra labour which formerly realised extra income to many peasant families now brings profit to a few capitalists. The spindles and the looms formerly scattered over the country are now crowded into great labour barracks. The machines and raw material are now transformed from means of independent livelihood for the peasant spinners and weavers into means for mastering them and extracting out of them badly-paid labour.

The genesis of the industrial capitalist did not proceed in such a gradual way as that of the farmer, for it was accelerated by the commercial demands of the new world-market created by the great discoveries of the end of the fifteenth century. The Middle Ages had handed down two distinct forms of capital—the usurer's capital and the merchant's capital. For a time the money capital formed by means of usury and commerce was prevented from conversion into industrial capital, in the country by feudalism, in the towns by the guilds. These hindrances vanished with the disappearance of feudal society and the expropriation and partial eviction of the rural population. The new manufactures were established at seaports, or at inland points beyond the control of the old municipalities and their guilds. Hence, in England arose an embittered struggle of the corporate towns against these new industrial nurseries.

The power of the state, concentrating and organising the force of society, hastened the transition, shortening the process of transformation of the feudal mode of production into the capitalist mode.

The next development of the capitalist era was the rise of the stock exchange and the great banks. The latter were at first merely associations of private speculators, who, in exchange for privileges bestowed on them, advanced money to help the governments. The Bank of England, founded in 1684, began by lending money to the government at eight per cent. At the same time it was empowered by parliament to coin money out of the same capital, by lending it again to the public in the form of bank-notes.

By degrees the Bank of England became the eternal creditor of the nation, and so arose the national debt, together with an international credit system, which has often concealed one or other of the sources of primitive accumulation of this or that people. One of the main lines of international business is the lending out of enormous amounts of capital by one country to another. Much capital which to-day appears in America without any certificate of birth, was yesterday in England, the capitalised blood of her children.

Terrible cruelty characterised much of the development of industrial capitalism, both on the Continent and in England. The birth of modern industry is heralded by a great slaughter of the innocents. Like the royal navy, the factories were recruited by the press-gang. Cottages and workhouses were ransacked for poor children to recruit the factory staffs, and these were forced to work by turns during the greater part of the night. As Lancashire was thinly populated and great numbers of hands were suddenly wanted, thousands of little hapless creatures, whose nimble little fingers were especially wanted, were sent down to the north from the workhouses of London, Birmingham, and other towns. These apprentices were flogged, tortured, and fettered. The profits of manufacturers were enormous. At length Sir Robert Peel brought in his bill for the protection of children.

With the growth of capitalist production during the manufacturing period the public conscience of Europe had lost the last remnant of shame, and the nations cynically boasted of every infamy that reinforced capitalistic accumulation. Liverpool waxed fat on the slave trade. The child-slavery in the European manufactories needed for its pedestal the slavery, pure and simple, of the negroes imported into America. If money, according to Marie Augier, "comes into the world with a congenital bloodstain on one cheek," capital comes dripping from head to foot, from every pore, with blood and dirt.