EM Wood - The Question of Market Dependence

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

© Blackwell Publishers Ltd, Henry Bernstein and Terence J. Byres 2002.

SYMPOSIUM†

The Question of Market Dependence

ELLEN MEIKSINS WOOD

Capitalism is a system of social-property relations in which survival and socialreproduction are dependent on the market; a system that is, therefore, drivenby the imperatives of competition and a relentless drive to improve the forcesof production. This article explores the nature of that market dependence andthe specific historical conditions in which it emerged. In debate with RobertBrenner’s recent article in this journal (vol. 1, no. 2) about the early develop-ment of capitalism in the Low Countries, it is suggested that, while the DutchRepublic was a highly developed commercial society, it seems to have lackedthe specific conditions that made market dependence a basic property relation,as it was in early modern English agrarian capitalism. The differences betweenDutch and English patterns of economic development reflect some fundamentaldifferences 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 forthe early development of capitalism in parts of the Low Countries. Building onhis groundbreaking work on England, he argued that, for different reasons and indifferent ways, agricultural producers in the maritime Northern Netherlands weresubjected to economic imperatives that impelled their development in a capitalistdirection. The argument has major implications for our understanding of capital-ism in general, and that is the basis on which I want to respond to it here. If, asBrenner has argued, the differentia specifica of capitalism is the market dependenceof 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: [email protected] 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 forhis very useful and thought-provoking observations. As always, I am also grateful to Neal Wood, forhis comments and encouragement. But I owe special thanks to Bob Brenner, with whom I have beendiscussing this essay from the start. The final 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 conductnot the customary academic slanging match, but a constructive conversation between basically like-minded friends, in the hope of clarifying things for ourselves and anyone else who might be interested.

The Question of Market Dependence 51

In his discussion of the Low Countries, Brenner was again elaborating thefundamental principle that was also at the heart of his recent important analysisof the global economy. Capitalism, he wrote in that controversial text, is a systemcharacterized 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 foreverything 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 deriv-ing from market dependence, the imperatives that have driven the developmentof capitalism, operated before, and as a precondition for, the proletarianization ofthe workforce. Economic units could be market dependent – that is, separatedfrom non-market access to the means of their self-reproduction – without beingcompletely propertyless and even without employing propertyless wage labourers.This early form of market dependence, which subjected producers to the im-peratives of competition and profit-maximization, set in train the developmentof capitalism, and with it mass dispossession and the mature relation betweencapital and labour. In his earlier work, Brenner explained the nature of marketdependence in English agrarian capitalism, and he has now offered an account ofa different path to market dependence in the Low Countries.

One implication of Brenner’s argument on the nature of market dependenceas in a sense independent of, and prior to, the class relation between capital andlabour has been his emphasis, especially in his recent account of the contemporaryglobal economy, on imperatives and contradictions rooted in the ‘horizontal’relations among capitals, the relations of competition. This emphasis has arousedmuch hostility among other Marxists. More particularly, Brenner’s critics havereacted strongly against a conception of capitalism that, in their view, displacesthe class relation between capital and labour as the defining feature of the system,giving pride of place to ‘horizontal’ relations.

This seems to me a complete misreading of what Brenner is about, for manyreasons that I cannot elaborate here.1 For our purposes here, it is enough toemphasize two points: first, that Brenner shows how the market itself can con-stitute 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 amongclass systems – precisely because its constitutive units are market dependent andbecause the relation between capital and labour, unlike any other system of classexploitation, is mediated by the market. Because the market here is not simplya mechanism of circulation but the medium of basic social-property relations, itcarries with it the imperatives of competition, profit-maximization and increasinglabour productivity.

It is not my intention to retreat from my strong support for Brenner’s basicargument about market dependence. On the contrary, the questions I intend toraise 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 Brenner’s Heresy’ (Wood 1999).

52 Ellen Meiksins Wood

anything, these questions may suggest that, in his analysis of economic develop-ment in the Low Countries, he has perhaps departed from, or at least not ela-borated enough, his own insights on the nature and consequences of marketdependence as a social-property relation.

BRENNER ON MARKET DEPENDENCE IN THE NETHERLANDS

We may start with a brief summary of Brenner’s argument on the Low Coun-tries, or specifically on the maritime Northern Netherlands, which apparentlyunderwent some kind of early capitalist development.

Brenner is clearly working backwards from what appear to be some funda-mental similarities between this region of the Low Countries and England in thelate seventeenth century. By that time, both were experiencing, he suggests,a process of economic development in which, among other things, a differentiationwas taking place between producers who successfully competed in the market byspecializing, and less successful farmers who lost their land and were obliged toseek non-agricultural employment.

It is, argues Brenner, an indication of how deeply ingrained capitalist practiceswere in the early modern period that, in the general European crisis of theseventeenth century, when agricultural prices collapsed, Dutch landlords reactedin much the same way as their English counterparts – and differently fromlandlords elsewhere, notably in France – subsidizing their tenants by lowering rentsand/or accepting arrears and undertaking capital investments, instead of expellingthem in favour of land-hungry peasants. The subsequent differences between thetwo cases – the halt in Dutch development while England continued in its pro-cess of self-sustaining growth, giving rise to industrial capitalism – were not aconsequence of any fundamental differences in the internal dynamics of the twoeconomies but rather a result of Dutch dependence on an external market, a Euro-pean market operating on different, non-capitalist principles and subject to thelimits of a fundamentally feudal economy.

Brenner sets out to explain how apparently similar processes of capitalistdevelopment could have been generated in substantially different ways, how themaritime Northern Netherlands, coming from a different starting point, was,before hitting the buffers, approaching the same destination as English agrariancapitalism. He describes a situation in which producers were unable to producetheir own means of survival because of their region’s ecological degradation.They therefore had to depend on the market for food grain. In other words, theywere 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 obligedto produce other commodities for exchange and, to a substantial degree, toproduce them for export. They therefore had ‘to find products that they couldsuccessfully sell on the market’. Switching from grain production to cattle breedingand dairy farming, they did find a market for their output, especially in large townsin nearby Brabant and Flanders, as well as supplying summer grains for the


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” ’. Farmersin the region were therefore, he argues, compelled to produce competitively, ‘tocompete or go under’, which meant they were obliged to produce in such a wayas ‘to hold their own in price-cost maximization’.

At first, levels of productivity were too low to permit the producers to relycompletely on specialization, and they supplemented their livelihoods with some,also commercially oriented, diversification. They enjoyed competitive advantagesin trade largely because of their relatively low labour costs and because of therelatively low price of grain in the maritime Northern Netherlands as compared toelsewhere in Europe, as merchants from the Netherlands expanded the Baltic graintrade in response to increasing demand. But eventually, the countryside, under thepressures of competitive production, and in the context of expanding markets andgrowing demand, experienced a process of ‘real economic development’, drivenby specialization, investment and an increasingly productive agriculture.

I will, in what follows, have occasion to question part of Brenner’s accountof what happened in the Netherlands, especially during the seventeenth-centurycrisis. I have some doubts, in particular, about whether the Dutch pattern ofdevelopment really does display a capitalist logic. But my main purpose is toexplore the foundations of the argument – what it tells us about the nature ofmarket dependence and about capitalism. I wonder not only whether the kindof ‘market-dependence’ he attributes to the Dutch could set off a process ofcapitalist development, but also, and more particularly, whether the rise anddecline of the Dutch economy, even as Brenner describes it himself, can beadequately accounted for by the explanation he offers, or whether there mightbe an alternative account perhaps more consistent with the pattern of Dutchdevelopment, which does not require us to assume a capitalist logic of process.

My questions have to do, first, with the conditions in which producers can beregarded as market dependent, in such a way as to make their economic strategiesessentially different from any other agricultural producers, including peasants whoenter the market to obtain basic necessities; second, with the nature of marketsthemselves – whether and when they are competitive and capable of imposingthe requirements of competition on the methods and costs of production; andfinally, with the conditions in which appropriating classes, not only direct pro-ducers, are market dependent. The issue here is whether the presence or absenceof such conditions made a critical difference between the patterns of developmentin England and the Dutch Republic, and whether the kind of market dependenceBrenner attributes to the Dutch set in motion a pattern of development we canreasonably call capitalist.

MARKET-DEPENDENT PRODUCERS

In his analysis of the Low Countries, Brenner’s first premise is that marketdependence, of a kind that sets in train the process of capitalist development, can


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 ofsurvival, namely food), and to produce other commodities for the market inorder to obtain those basic inputs. The corollary is that the production of thesecommodities must be adapted to meet the requirements of competition and itsprice-cost pressures. So let us explore whether, or in what specific conditions,the need to exchange the outputs of production for basic inputs, and notablyfood, 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 thefact that throughout history there have existed many kinds of markets and thatagricultural producers have entered them in diverse ways, with various differentpurposes and consequences. There is presumably no need here to spell out, forinstance, the differences between, on the one hand, a ‘market system’, in whichvirtually all commodities are produced for the market and where all factors ofproduction, including land and labour, are treated as commodities and, on theother hand, peasant markets in which producers who own, or securely possess,the means of production – in particular, land – sell their surpluses as an adjunctor supplement to their own production for subsistence.

But even this relatively clear distinction raises questions about the point atwhich reliance on the market becomes vital to subsistence or, in Brenner’s 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 inestablishing market dependence, setting in train a process of economic develop-ment. This question is particularly difficult to answer in the case of the NorthernNetherlands, even more than in the English case.

In the latter, the critical factor, convincingly explained by Brenner in his earlierwork, was the loss of non-market access to the land itself. In what has long seemedto me his most important historical insight, he demonstrated how this kindof market dependence could exist well short of complete dispossession. Non-market access to the means of production was lost well before the completecommodification of labour, in the form of tenancies that operated on ‘economic’principles. The pivotal point of his argument was the relation between tenantproducers who held their land (de jure or de facto) on ‘economic’ leases and paid‘economic’ rents, and landlords who, lacking extra-economic powers of surplusextraction, the powers of direct coercion to squeeze more surplus from producers,instead depended for their wealth on the productivity, competitiveness and profit-ability of their tenants. In other words, both producers and appropriators dependedon the market for access to the conditions of their self-reproduction, and therelation between them was mediated by the market. Brenner’s argument maynot have been uncontroversial, but in his explanatory framework the dividingline between market dependence and its absence was relatively clear, determinedby the logic of the property relations he described rather than by some elusivequantitative measure.

By contrast, in the Netherlands the decisive factor is not some kind ofmarket-mediated property relations or market access to the land itself. Instead,


Brenner invokes the ecologically determined inadequacy of the land which madeits possessors – outright owners no less than tenants – unable to supply their ownsubsistence needs, specifically their need for food grain, without entering the mar-ket. Producers here were market dependent simply in the sense that they wereobliged to sell commodities they produced in order to obtain basic necessitiesthey were unable to produce.

In such a case, it seems much harder to avoid confronting the quantitativequestion: to what extent must people rely on the market to purchase the meansof survival before they become market dependent? At what point does the lossof non-market access to subsistence goods become market dependence? Doesit require dependence on the market for the full costs of self-reproduction, orwould something short of the full costs still constitute market dependence in therelevant sense? Why, for instance, is the case of Dutch farmers – who presum-ably consume some of their own dairy products and meat, vegetables from theirown kitchen gardens and eggs from their own chickens – differ fundamentallyfrom peasants elsewhere who produce much or most of their own food but stillrequire exchange to obtain certain basic necessities? At what point does a quant-itative difference become a qualitative one? For that matter, precisely how doesthe economic logic of the Dutch farmer differ from that of craft producers, evenmore dependent on the market for their basic food needs, in a commercial centrelike 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 supple-ment their ‘subsistence/safety first strategies’, even if these ventures into themarket 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 basicfood requirements, particularly grain. The question still remains whether, or inwhat conditions, the need to produce and sell commodities (of whatever kind) inorder, in turn, to buy food on the market creates a pressure to produce competit-ively and maximize profit in the capitalist manner. Or, to put it another way, theessential question is this: in what specific conditions do competitive productionand profit-maximization themselves become survival strategies, the basic conditionof subsistence itself ?

Strategies for survival are identical with strategies for maximizing profit, at leastfor producers, only in capitalism. The conditions of capitalist competition require‘maximizing’ strategies because capitalists have no guarantee of ‘realization’ inadvance. They cannot know whether their commodities will sell, or even whatconditions and production costs would ensure sale at all, let alone profit. Lackingthe capacity to control prices in a competitive market, they must adopt strategiesthat will optimize the price/cost ratio, and their only available strategy is to reducecosts by enhancing labour productivity, to achieve the maximization of surplus value.

But such competitive conditions cannot simply be assumed even in the pres-ence of well-developed markets and trading networks, so we need to know moreabout market dependence and how it engenders imperatives of competition.Brenner seems to suggest that the decisive factor is the degree of specialization,


which, if not a cause is at least an index for him of market dependence andcapitalist development. Needless to say, the more specialized producers become,the more they must look elsewhere, particularly to the market, to obtain thenecessary goods they do not themselves produce. But there have been manycases of specialization that has not been directed at ‘efficient’ – i.e. ‘competitive’– production. So specialization for purposes of ‘efficiency’ in the interests ofprofit in a competitive market requires further explanation.

It is important to recognize that specialization, which for Brenner is a criticalindex of capitalist development, may have no connection whatever with ‘effi-ciency’. Specialization has existed in non-capitalist economies not driven by theimperatives of competition. In such cases, the object, far from generating max-imum profit, or indeed profit at all, has been to supply the community’s needsby means of division of labour and exchange, and methods of production as wellas opportunities for profit have been limited by all kinds of mutual expectations,obligations and customs.

Take the example of so-called ‘sectional’ markets in which specialization is thedominant principle of economic organization.2 Here, traditional, even heredit-ary, communities of geographically separated monopolistic specialized producersregularly 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 fromvarious producers of the same commodity, unless these markets are integratedinto an already capitalist economy, there is no intrinsic reason why these marketsshould be competitive in the capitalist sense; and their effects on the methods andcosts of production – which may still be deeply rooted in the traditions of thepeasant community and the communal solidarities that are their basic conditionsof survival – may be minimal or even non-existent.

The opportunities of export trade in precapitalist societies could also encour-age specialization, without transforming social-property relations or methods ofproduction. 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-sufficiency ingrain production, some rural communities were, where possible, already com-pletely given over to viticulture, because wine was a distinctively valuable anduniquely exportable commodity. Later, with the resumption and growth of trade,that specialization increased, yet this labour-intensive agricultural craft, far fromsignalling a movement toward capitalist property relations, has even been creditedwith preserving the traditional French peasantry.3

We cannot even assume the producers’ desire for profit-maximization inexchange on the grounds that it would give them the best return for their labourand other inputs. We cannot presume the kind of calculation of returns to fac-tors specific to capitalism, which may be quite alien to non-capitalist peasant

2 On sectional markets, see Wolf (1966, 40 –1).3 See, for example, Fernand Braudel (1986, 316), where he even suggests that ‘it was chiefly throughthe spread of the vine’ that France acquired its distinctive character as a nation of small landownersand independent peasants.


economies, where all kinds of other considerations enter into the calculation ofthe ‘value’ of labour and land. But even when peasants do respond to the marketwith some kind of ‘economic rationality’, it may be in ways very different fromcapitalist responses to market imperatives.

For instance, farmers may respond to rising prices for their particularcommodities – typically in cases of growing demand – by increasing their outputof those commodities as much as possible, perhaps by bringing more land undercultivation or even by employing more (cheap) labour, in order to take advantageof the opportunities for increased profits. The typical response to falling priceswould, 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 verydifferent from the cost-sensitivity of a capitalist producer who strives for increas-ing labour productivity at lower cost, especially by transforming the methods ofproduction, in a competitive market with many producers.

The latter kind of market response presupposes conditions that have notprevailed in most societies, throughout most of human history. There must,of course, be the material possibility of systematic innovation in the methodsof production, which is seldom present in peasant communities with limitedresources. But we cannot simply assume that peasants would so respond if onlythey could systematically improve the forces of production and that nothing buttheir poverty prevents them from doing so. There are also social constraints, therequirements and regulations of the peasant community, which may themselvesbe essential to survival.

Yet even these communal constraints, with or without the material limitsof peasant property, are not enough to account for the absence of systematicdevelopment of productive forces of the kind we associate with capitalism. Infact, it is, on the whole, a mistake to think in terms of blockages. The self-sustaining development unique to capitalism requires not just the removal ofobstacles to development but a positive compulsion to transform the forces ofproduction, and this comes only in competitive conditions, where economicactors are both free to move in response to those conditions and obliged todo so. No one has taught us more than Brenner about the specificity of suchconditions.

Nor has anyone demonstrated more effectively that even the need to producesurpluses for exploiting classes or states has not, throughout most of history, byitself transformed the methods of production in that way, even production forexchange. 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 moresurpluses from peasants, there has been no systematic compulsion to enhancelabour productivity. Indeed, the effect of exploitation has typically been toimpede such transformations of productive forces. Coercive ‘extra-economic’modes of surplus extraction have both lacked the incentive to promote thedevelopment of productive forces and positively hindered it by draining theresources of direct producers. What capitalist development requires is a mode


of appropriation that must extract maximum surplus from direct producers butcan do so only by encouraging or compelling producers to increase their labourproductivity and by enhancing rather than impeding the development of product-ive forces. That kind of appropriation is a rare and contradictory formation, withvery specific and stringent conditions of existence.

We shall return to the question of appropriation. But for now, the questionremains why, and in what highly unusual conditions, people would abandon theirold survival strategies, which were not based on profit-maximization by meansof ‘efficient’ 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 withprofit-maximizing strategies, and even how profit-maximization and ‘efficiency’were joined, or, for that matter, specialization and efficiency.

When farmers in the maritime Northern Netherlands switched to dairy pro-duction, for instance, in response to a huge and growing demand especiallyin the cities of neighbouring Brabant and Flanders, they may have had morefreedom to alter production in response to market conditions than has beentypical of peasants throughout history constrained by communal requirements.But they seem, at first glance, to have been responding according to a logic notfundamentally different from the strategies of peasants in many other times andplaces, reacting to a seller’s market in conditions of rising demand (and probablyrising prices). There seems to be nothing in their behaviour to suggest that theywere doing anything but increasing output to meet increasing demand. Of course,switching from one commodity to another to meet an unfilled need, or evenspecializing in order to take advantage of growing demand for a particular com-modity, is different from merely increasing already existing production to meeta growing need. But these strategies surely have more in common with eachother than either has in common with adjustment of production to meet theconstraints of a competitive market where supply always threatens to exceeddemand, with a downward pressure on prices.

It may be possible to argue that these farmers – dependent as they were onbuying in their basic food requirements – would have had no, or little, option tolimit 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 produc-tion in order to stay in contention. But there is nothing in Brenner’s accountto 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 anda dominant commercial apparatus.

The ‘competition’ that certainly took place in European trading networkswas principally among merchants and commercial centres, the mercantileinterests of the Netherlands, say, against the Hanse, and later, even within theDutch Republic, between Amsterdam and rival commercial cities. Here, it was,in general, less a question of price competition among producers of particularcommodities than a contest among merchants or whole commercial cities forcontrol of markets. Even when this kind of competition (rivalry might be abetter and less question-begging word) was intended to corner a larger share of


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 eitherpolitically enforced restrictions and privileges or with superiority in the instru-ments, methods and range of commercial activity, to say nothing of superiorityin shipping and navigation, and military might.

The question, then, is whether the markets so skilfully negotiated by theDutch were already operating according to different principles. The Dutchsituation described by Brenner’s principal source, de Vries and van der Woude(1997), seems to be one in which the growth of commercial agriculture involvedincreasing production for growing demand, but not necessarily the kinds ofcompetitive pressures that would systematically drive uncompetitive producersoff the land. In a sense – and this is a point to which we shall return – the DutchGolden Age was a period of growing market opportunities for more total outputwith more or less guaranteed sale, rather than a period of market imperativesrequiring the systematic improvement of labour productivity to meet the demandsof competition.

Not even the technical advances pioneered by Dutch farmers, nor the massivereclamation projects which extended cultivable land, by themselves argue for theneed to ‘compete or go under’, as distinct from expanding production to meetexpanding demand. This is not to deny that the Dutch did pioneer certain advancesin productivity, not least in agriculture. But it is not at all clear (as I shall arguein what follows) that the success of the Dutch economy, or the survival ofindividual producers, depended on these advances in productivity more thanon ‘extra-economic’ advantages in commercial rivalries. Dutch investment inproduction could signal not so much the emergence of a capitalist dynamic as aprecapitalist logic taken to its absolute limits.

To be sure, Brenner’s argument, here and elsewhere, is precisely that capitalismemerged as an unintended consequence of precapitalist strategies, when, for onereason or another, non-capitalist economic actors had exhausted their capacity forself-reproduction as they were. But it seems to me that more needs to be said inthe 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 precapitalisteconomic logic and brought about a capitalist transformation, it still remainsunclear how and why this came about, or, indeed, whether it happened at all.

THE CYCLES OF MARKET DEPENDENCE

The final and, for Brenner, apparently decisive argument in favour of capitalistdevelopment in the Northern Netherlands is its end result: he maintains thatDutch landlords in the late seventeenth century, when agricultural prices in Europecollapsed, behaved like English landlords more than French. I shall return tothe seventeenth-century crisis and how Dutch appropriating classes in generalresponded to it. Their response, it seems to me, was very different from theEnglish, in ways that go directly to the distinction between the dynamics ofcapitalist development and a rather different, non-capitalist economic logic. For


the moment, it is enough to raise a few questions about landlords and tenantsin the Dutch Republic.

Let us leave aside the question of numbers and whether landlord/tenant rela-tions of any kind ever played a role in the Republic comparable to their centralityin England. We can infer from Brenner’s argument itself that, while the landlord/tenant relation did play a part in Dutch economic development, it never dominatedthe agricultural scene as it did in England. The distinctive systemic logic of theDutch economy, as against the specific logic of the English case, seems in Brenner’saccount to be determined above all by the market dependence of owner/occupiers.What can we nonetheless deduce from the behaviour, during and after theseventeenth-century crisis, of landlords in the Dutch Republic?

It must be said that the picture painted by de Vries and van der Woude israther different from what Brenner suggests. First, it is not at all clear fromtheir account that competitive pressures, in the sense intended by Brenner, drovepeople off the land in the period leading up to and during the Golden Age. Inthe early stages, ecological conditions made certain kinds of agriculture moredifficult, if not impossible, while alternatives became available in the towns, asthe Dutch exploited new commercial opportunities and the Republic becamea major link in the larger European division of labour. This account of Dutchdevelopment would also, incidentally, explain a differentiation among Dutchfarmers, between successful proprietors who could increase their holdings andthose who gave up their land, without signalling the kind of competitive economyBrenner has in mind.

The main point emphasized by de Vries and van der Woude is that ‘Dutchsociety from the sixteenth century was dominated by its cities’, and this domin-ance shaped the rural economy (1997, 507). Urbanization, fuelled by the Republic’srole in international trade, transformed the rural economy in at least two majorways. The urban population swelled to service the Republic’s growing domin-ance in shipping, trade, and eventually finance. In turn, the growing urban sectorprovided new markets for agricultural goods. At the same time, it provided newsources of capital to exploit new opportunities for profit, and urban investors inagriculture became a major feature of the rural scene.

This was, in fact, a, if not the, critical factor in transforming the Dutch ruraleconomy, especially by means of speculative urban investment in land reclama-tion. Agricultural productivity seems to have been improved not in responseto competition so much as in response to growing demand, in an economy witha unique imbalance between urban consumers and rural producers, and thegrowing opportunities for commercial profit this entailed. More particularly, theproductive capacities of relatively small farmers were disproportionately enhancedby urban investment responding to growing commercial opportunities.

But perhaps most revealing is de Vries and van der Woude’s account of whathappened at the very moment Brenner finds most telling, the seventeenth-century crisis. We should, of course, keep in mind that the Republic’s prosperityalways depended disproportionately on the role of the Dutch in internationaltrade as commercial mediators, as distinct from producers. Their great wealth


would have been impossible without their preeminence in long-distance trade,circulating throughout Europe commodities produced far afield. But against thatbackground, we can simply look at what happened to domestic production inthe period of decline.

While there had been considerable capital investment in agriculture duringthe Golden Age of the Republic, the period of crisis and thereafter was, accordingto de Vries and van der Woude, a period of disinvestment. At this stage, therewas indeed some concentration of land in the hands of the ‘relatively strong’, butDutch investors typically abandoned land altogether. At the same time, thebehaviour of landlords who remained seems hardly different from what non-capitalist landlords sometimes did even in France. Some did indeed lowerrents and/or accept arrears, but so did many French landlords, when conditionsobliged them to retrench and share the costs of economic decline with theirtenants – especially where, as in Burgundy or the Paris Basin, there were largertenancies, which landlords were compelled to preserve by making concessionson rents.

The main point, however, is that, while investment in cost-reducing tech-nologies was ‘not altogether lacking’ in Dutch agriculture during the crisis andthereafter, this was far from being the preferred strategy (de Vries and van derWoude 1997, 676). Dutch farmers responded in various ways, and ‘the Republic’sproducers manoeuvred as best they could in a structure of high costs and limitedmarkets’, but while ‘[l]ethargy and routine did not characterize their conduct . . .neither did decisive cost-reducing investments’ (de Vries and van der Woude1997, 677). Perhaps even more significantly, much of the investment of com-mercial wealth that had driven the remarkable development of domestic produc-tion in the earlier period dried up. Instead, as we shall see, Dutch elites revertedto more classically non-capitalist modes of appropriation by extra-economicmeans, notably office-holding, as well as rentier wealth, and commercial venturesunrelated to domestic production, agricultural or industrial. This was in sharpcontrast to England, where the period of declining agricultural prices spurred anincrease in investment, not least by landlords, to enhance labour productivityand cost-effectiveness.4

We shall return to the differences in the patterns of development betweenEngland 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 attitudeof these English landowners was a symptom rather than a cause of England’s capitalist development.As Brenner stresses in ‘The Low Countries’, while landlords depended on their tenants’ competitivesuccess and therefore helped their tenants improve production, especially to get through bad years,‘landlord’s 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 meansof subsistence in English agriculture and thus their subordination as tenants to the competitiveconstraint . . .’ (199, n. 12.). Again, the difference in the attitude of Dutch investors is symptomaticof different social-property relations. To put it crudely, while English landlords helping their tenantsimprove production in bad times is a symptom of subjection to market imperatives, the imperativesof competition, the Dutch elite’s investment in agricultural production in good times and withdrawalin bad is a symptom of responsiveness to market opportunities.


fundamental divergences. The main point is this: in the English case, we canunderstand why, even in a period of rising demand and growing economicopportunities, unproductive tenants were dispossessed by competitive pressures.It is not so difficult to see how, in the early phases of development, England’sproperty relations, with its system of competitive rents, compelled producers notsimply to stay in the market but to ‘maximize’ and, even in conditions of risingdemand and prices, to ‘compete or go under’. We can also understand why in atime of falling prices landlords encouraged their tenants to improve productivityinstead of driving them off the land. It is not so difficult to understand why, ina declining market, the same social-property relations that made both producersand appropriators dependent on competitive production required the enhance-ment of productive forces. It is rather more difficult to see why or how theDutch were subject to the same compulsions – and their pattern of developmentsuggests that they were not.

A DIFFERENT KIND OF MARKET DEPENDENCE?

The question, then, is whether, in the early modern period and before theseventeenth-century crisis, the basic need of Dutch producers to sell in order tobuy was compelling enough and distinctive enough to become a driving forcefor a historically rare kind of ‘real’, or transformative, economic development,which was thwarted only by conditions external to the Dutch economy. Perhapstheir reliance on the market for their most basic ‘inputs’ is enough to distinguishthem from peasants whose ventures into the market have not generated suchdevelopmental processes. There can be little doubt that these farmers were obligedto 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 wereforced to maximize profits or even that they were obliged to ‘compete or go under’.

Where producers depend on the market not in the sense that their possessionof land is directly market dependent but rather in the sense that they must sellwhat they produce in order to buy what they cannot, they have (within the limitsof their productive capacities) a certain room for manoeuvre. They can adjustproduction not only to changing commercial demand but to their own con-sumption (which can itself be adjusted) in ways and degrees ruled out by capitalistcompetition, where profit-maximization is a condition of survival – and alsoruled out by the relation between English landlords and their tenants. Their roomfor manoeuvre is that much greater if they are not subject to surplus extractionby landlords or states.

It is a truism that peasant proprietors will continue cultivating land in condi-tions that would make no sense for capitalist producers. They will push themselvesand their families to the utmost limit if necessary to maintain subsistence, andreduce their consumption to a bare minimum. It is also true that, even in thecontext of a capitalist economy, small independent farmers will typically proceedin this way, even when their own subsistence depends on selling their commod-ities at market-regulated prices. Marx pointed out a long time ago that ‘For the


peasant parcel holder to cultivate land, or to buy land for cultivation, it is thereforenot necessary, as under the normal capitalist mode of production, that the market-price of the agricultural products rise high enough to afford him the averageprofit, and still less a fixed excess above this average profit in the form of rent. Itis not necessary, therefore, that the market-price rise, either up to the value orthe production of his product’ (Marx 1962, 786). In this sense, the farmer even incapitalism may, up to a point, stand outside the ‘normal’ capitalist economy andits price/cost logic, to the extent that only his bare subsistence, and not thecompulsions of profit or rent, represent his absolute limit.

To be sure, in an advanced capitalist economy, in which all economicrelations are thoroughly commodified and every commodity is subject to theconditions of a competitive market, even the independent farmer’s room formanoeuvre is more limited than it was in Marx’s nineteenth century, let alone inthe seventeenth. But the early modern Dutch owner/occupier was operating in anon-capitalist European economy and, in any case, he seems to have had the bestof both worlds.

Like Marx’s ‘self-managing proprietor’, he was not obliged to adapt produc-tion to any average rate of profit or to attain some kind of cost/price optimum.At the same time, as de Vries and van der Woude point out, Dutch agricultural pro-ducers, as they ‘came under the influence of the low cost production centers’ thatwere their source of grain, had a more or less unique ‘margin of advantage’. Theirprivileged access to cheap grain – deriving from their extra-economic dominancein shipping and trade – was set against the prices of the ‘relative luxuries’ theythemselves produced (de Vries and van der Woude 1997, 199). Dutch farmersoriginally shifted from grain to dairy production under the influence of cheap im-ported grain from the Baltic, because they were obtaining increasingly more grainfor every pound of butter (as well as beef and cowhide) that they sold. Importingcheap grain lowered the costs of producing other, higher priced commodities athome. In other words, if Dutch grain production was replaced by lower cost‘competitors’, that ‘competition’ had the effect not of creating price/cost pres-sures or lowering profit margins in Dutch agriculture but, on the contrary,encouraging the production of higher priced and more profitable commodities.

So the Dutch dairy farmer not only had the freedom of the independentproducer 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 benefits of unusually cheapimported grain bought in a low cost market, and the output-price benefits ofhis own semi-luxury commodities sold in a large and prosperous market witha relatively high price ceiling. In those conditions (and with generally limitedproductive capacities in the face of growing demand), it is hard to see whatsystematic price/cost compulsions were operating on the Dutch dairy farmer. IfDutch producers ‘came under the influence’ of cheap production and low pricesin relation to their input costs rather than their output prices, they were enjoyingthe benefits of something like the opposite of the price/cost pressures that drivecompetitive production in a capitalist economy.


But more particularly, we must surely distinguish between the need to selleven in order to survive and the need to attain an average rate of profit in orderto survive, irrespective of one’s own consumption needs. The English tenantmay not have been compelled to attain an average rate of profit in the manner ofa modern capitalist producer, but his particular relation to the landlord alreadymade production for profit beyond his own subsistence needs a presupposition ofproduction for his own subsistence. In that sense, he was subject to price/costpressures in a wholly new way.

When a farmer in the Northern Netherlands switched from grain to dairyproduction, 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, withinreason, under their own control. When English land-use was switched from arableto sheep pasture, driving many producers off the land, and when later, in conditionswhere rents for arable were rising again, landlords derived their rents from pro-ductive agriculture, the driving force was something very different from the con-sumption needs of the producer. The requirements of the surplus-appropriatinglandlord were imposed on production from the start, and the requirements ofthat landlord were different from the pressures exerted by landlords or states thatcould 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 ex-change, but profit; and perhaps for the first time in history, production was directlysubjected to the requirements of profit-maximization, which became a conditionof self-reproduction. It is certainly true that Dutch farmers, even independentowner-occupiers, were subject to the requirements of appropriators, notably thestate, in the form of taxation. But, again, on its own, this kind of surplusextraction, in the absence of capitalist property relations, does not compel com-petitive production. Perhaps the point can be made simply by considering theconditions in which agricultural producers were in danger of losing their accessto land. To be sure, even owner-occupiers in non-capitalist societies may notonly 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 ofinadequacy to make possession dependent on competitive production. The pres-sures of a capitalist economy are such that even a prosperous farmer, like theEnglish yeoman-tenant, is subject to them, making his continuing possession ofgood land dependent on his cost-effective production.

At any rate, if Dutch commercial farmers in the earlier phases of developmentwere simply responding to a new market or an absolute rise in demand, it is noteven clear whether or to what extent they were confronted by rival producersaiming for the same consumers, let alone competitors in a specifically capitalistsense – that is, producers always driven to lower their costs of production, andnot only in times of economic decline, in order to maintain their positions inan integrated market where there is always a threat of overcapacity. At the very


least, we need to know a great deal more to determine whether, or how, theywere subjected to pressures that obliged them to produce competitively – orwhether, even if there existed the productive potential for more supply thandemand, they were simply availing themselves of the ‘extra-economic’ advantagesenjoyed by their compatriot merchants, such as the command of trade routes andtrading networks or outright monopolies, superior shipping, and so on.

One major test of a transformative market dependence is the need to competenot in a period of declining prices and demand but in times of readily availableand even growing demand. Brenner himself, in his analysis of contemporary cap-italism, has demonstrated with devastating effect that this apparent anomaly is aconstitutive contradiction of the capitalist system, causing crises of overcapacityand ultimately systematic economic downturns. His historical work on Englishagrarian capitalism has traced this contradictory imperative of competition to itsearliest source. But it is not so clear why, or even whether, such a contradictionwas at work in the Netherlands.

It is, however, clear that the English and the Dutch behaved differently inthe downward cycle, in ways that may shed light on the economic logic of theRepublic’s previous Golden Age. I have already alluded to the shift by Dutchelites, 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 theRepublic 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 Dutcheconomy after its Golden Age was nothing more than the kind of secular declinethat affects all ‘modern’ economies. Brenner, by contrast, has insisted thatthe crisis was not a ‘modern’ one but fundamentally feudal, and that the Dutcheconomy, for all its apparently capitalist development, was implicated in thatfeudal crisis because it was irreducibly integrated into that feudal economy. Perhapsit would be useful to take the argument just one step further and show how itsinvolvement in a feudal economy was not external to but constitutive of its owninternal logic from the start.

The Dutch Republic flourished in the Golden Age (as de Vries and van derWoude have argued) because domestic production was linked to commercialexpansion, with a transformation of production in tandem with expanding trade.‘When these interactions weakened,’ they continue, ‘the whole of the Dutcheconomy became something less than the sum of its parts’ (de Vries and vander Woude 1997, 502). We need to consider, then, whether this weakening wassimply the result of a cyclical downturn, or a strategic error, or whether thelimits of this kind of linkage between production and commerce, its ultimateweakness and eventual rupture, were inherent in it from the outset – in contrastto the kind of organic link that joined production and commerce in the Englishcase.

It is, as Brenner points out, a striking fact that the Dutch were able to survivea long-term decline and to stagnate for a long time at an unusually high level. He


suggests that this was possible because of the economy’s capitalist dynamic,which later enabled the economy to regenerate itself on a new basis. But there is,first, no reason to attribute the later success of the Dutch to some long-standingprior capitalist development. After all, the French and the Germans were able todevelop their industrial capitalisms without – on Brenner’s own reading – such aprior advantage, and having suffered no less than the Dutch from the Europeancrisis. Once British capitalism, especially in its industrial form, became a seriouschallenge to Britain’s European rivals, a geopolitical and military threat no lessthan a commercial one, capitalist imperatives imposed themselves on the othereconomies even without any prior domestic capitalism.

It may, however, be more difficult to explain how the Dutch economy couldtread water for so long, without either advancing or sinking further. It is perhapseven harder to explain if we assume that it was operating according to a capitalistlogic. The imperatives of the capitalist market are generally not so permissive.By contrast, it is not so difficult to imagine that the Dutch could stagnate at arelatively high level precisely because they were able to fall back on their oldcommercial strengths without depending on competitive production. It istempting to argue (though I shall resist taking this too far) that the precapitalistcommercial strengths of the Dutch made them less, rather than more, vulnerableto the kinds of pressures that cause typically capitalist patterns of stagnation anddownturn.

My intention here is not so much to question the general explanation of theDutch decline as caused by its insertion in and dependence on the larger Euro-pean economy. This might have thwarted Dutch development even if theRepublic’s economy had indeed been driven by capitalist imperatives in thecentury or more before the crisis. But even if there was little the Dutch couldhave done to avoid being drawn into the European crisis, it is surely worthconsidering whether the ways in which they responded to the crisis gives ussome 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 subsist-ence goods by means of exchange, and, on the other hand, the kind that derivesfrom market-mediated property relations in the English manner. It cannot beemphasized enough that market dependence in English agrarian capitalism didnot derive simply from a need to exchange, not even to exchange in order toobtain the basic means of subsistence.

I have long been insisting on the importance of distinguishing between themarket as an opportunity and the market as an imperative. There is a sense in whichthe Dutch case represents an opportunity-driven commercial economy taken toits utmost limits. But I am now suggesting that we may also have to distinguishamong different kinds of market compulsions. Both the English and the Dutchcertainly had the means, including the productive capacities, to avail themselvesof market opportunities. There is also a sense in which both were responding tothe compulsions of the market, at least a need to enter the market to guaranteethe conditions of their own reproduction. But it is equally significant that the


compulsions were different in their source, in their nature and, apparently, intheir consequences.

COMPETITIVE MARKETS

We cannot fully understand the difference between these divergent forms ofmarket dependence without exploring more closely the market dependence ofappropriating classes no less than that of the direct producers. First, however, letus consider the relevant markets themselves.

Let us look first, in very general outline, at the logic of precapitalist trade.The simple logic of trade is ‘the exchange of reciprocal requirements’. This cantake place within a single community or among adjacent communities, and thissimple logic can still obtain where the direct exchange of products is replaced bycirculation of commodities mediated by money. It does not by itself generate theneed to maximize profit and, even less, to produce competitively.

Beyond such simple acts of exchange, there are more complex transactionsbetween separate markets, involving commercial profit-taking (buying cheap inone market and selling dear in another) in the process of conveyance from onemarket to another or arbitrage between them. This kind of trade may have alogic different from the simple exchange of reciprocal requirements, at least tothe extent that requirements of commercial profit intervene. But here too thereis no inherent compulsion to transform production.

Even in pre-capitalist societies, there are, of course, always people for whomprofit-making (profit-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 profit-seekingmiddlemen, even highly developed merchant classes, intervene. Their strategiesneed have nothing to do with transforming production in the sense required bycapitalist competition. Profit by means of carrying trade or arbitrage betweenmarkets has strategies of its own. These do not depend on transforming produc-tion, nor do they promote the development of the kind of integrated market thatimposes competitive imperatives. On the contrary, they thrive on fragmentedmarkets and movement between them, rather than competition within a singlemarket, 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 merchantsto profit by carrying goods from one locale where they were produced to otherswhere they were not. But here as elsewhere in the non-capitalist world, thoughprofit-seeking strategies may indeed have been survival strategies, profit-seekingwas separate from, if not actually opposed to, ‘efficient’ production.

What, then, constitutes a competitive market? I want to emphasize again thatthe ultimate issue here is the conditions in which the market constitutes a systemof social-property relations. But let me leave aside for now my suggestion thatthere is a fundamental difference between the situation Brenner describes, inwhich producers must exchange in order to obtain basic goods, and a system of


social-property relations that makes profit, and not just exchange, the immediateobject of production. Are there any irreducible conditions without which therecan be no competitive market?

Certain simple conditions must surely prevail. The simplest requirement isthat buyers must have ready access to alternative suppliers. This means not onlythat productive capacities must be sufficient to meet and, at least potentially, toexceed demand but also that supply and demand are reasonably accessible toone another, even if by means of middlemen. But that is only a necessary and farfrom sufficient condition. The relation among various producers must be suchthat they can affect each other’s costs of production. Price competition presupposesvarious suppliers responding to the same or similar conditions, some commonstandard of measure – not only some common standard of monetary exchangebut, 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 lowlabour costs, even without productivity-enhancing technologies or methods ofproduction, can drive down the price of a commodity in ways that affect pro-ducers of the same commodity in other, higher-cost social environments, com-pelling them to lower their costs by increasing labour productivity. This is,needless to say, a familiar situation in the modern global economy, thoughthroughout most of human history it has probably been uncommon to findthe same commodities produced in very different social environments regularlycompeting for the same market. At any rate, even when the same commodity isavailable from different sources with substantially different costs of production,very specific conditions, both technological and social, must be present to permitthe costs and methods of production in one locale systematically to affectthose in another, distant one, not to mention modern means of transport andcommunication – conditions very rare until quite late in history.

The link between production and consumption must also be such that, whileproduction and consumption are separate and mediated by the market, there is arelation between them that creates price/cost pressures and generates the need forcost-effective production. We need not get embroiled in fruitless calculations of therelation between ‘value’ and ‘price’ in order to recognize that competition – thekind of competition that entails price/cost pressures and compels cost-effectiveproduction – presupposes a relation between costs at the point of productionand 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 ofproduction and consumption may be so different that a commodity bought bymerchants in a ‘cheap’ environment can easily be sold relatively ‘dear’ in anothermore affluent one without straining the buyers’ resources; there may be complexand multiple interventions by merchants whose relative advantages are determinedby extra-economic factors; and so on. The more mediated the relation betweenproduction and consumption, the less direct will be the effect of commerce onthe process of production.


Consider, for instance, the process of exchange in the Northern Netherlandsdescribed by Brenner. It was, on the face of it, a highly mediated process. To besure, the European economy was sufficiently ‘integrated’ to allow, for instance,the price of grain produced in the Baltic region to affect economic trends else-where, but the nature of its effects is telling in itself. Baltic grain, produced atcosts determined by conditions in the region of origin, and especially in poorerlocales, was, as we have seen, bought and conveyed by Dutch merchants whoenjoyed a clear dominance in the Baltic trade. That dominance had nothing to dowith the costs of producing the traded commodity. Their profits were derivedfrom buying it cheap in one locale and selling it (relatively) dear in another.Dutch consumers, including farmers, in a richer economy whose wealth and socialconditions of production were entirely different, were able to buy that grainwith the proceeds of trade in other commodities, the production of which hadnothing to do, in cost or in price, with the cost and price of grain, except in thesense that Dutch farmers benefited from the low cost of imported grain, whichthey 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 toprevailing conditions at the point of final sale, and Dutch merchants could easilybuy 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 purchaseprice, yet cheap for the ultimate buyer.

At the same time, Dutch producers of dairy products were, of course, in noway competing with Baltic producers of grain. If the costs of producing grain inthe Baltic had any effect on the costs of dairy production in the Netherlands, therelatively low price of grain, as an ‘input’ for Dutch farmers, would have madeit less, rather than more, necessary to reduce their production costs in otherways. Nor is it clear that Dutch dairy producers were competing with eachother, if the demand for their products was ample and growing. If they were inprinciple competing with dairy producers elsewhere, their advantages seem tohave derived in large part from the dominance of Dutch merchants, both in theexport of their goods and in the import of cheap grain. So there was no obviousneed for competitive production, let alone for the maximization of profit as theimmediate object of production; and, again, the reverse of a price/cost squeezewas 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 Ageof the Republic saw Dutch producers adapting themselves with considerableflexibility to changing conditions and transforming production to meet expand-ing commercial opportunities; and Dutch farmers continued to be remarkablyflexible in their responses to economic change (see Mastboom 1996, 2000). Intheir relative freedom to adapt production in this way they may indeed have beenvery different from peasant producers in other societies whose survival strategieshave necessarily involved constraints on changes in production imposed by limitedresources, or by customary practices, communal needs and regulations. But much


of their success depended on the commercial role of the Republic and its mer-chants, whose connection with domestic production was, so to speak, always atone remove. Given the series of detachments between commerce and productionin the Dutch case, is it really possible to say that the eventual weakening of thelink 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 rarelyacts as the engine of growth of an economy’, and that once the link betweendomestic production and international commerce was weakened, and the Dutchbegan to rely on their ‘commercial sophistication’ without a linkage to domesticproduction, the economy was bound to cease growing and become ‘less than thesum of its parts’. But perhaps the reliance on commercial sophistication, as distinctfrom competitive production, was always essential to the Dutch economy. Thecommercial interests that dominated the economy were always, in a sense, semi-detached from domestic production and ready to shift their investments intoother, often non-productive fields. Their vocation was, to put it simply, circula-tion, not production, and profit was generated by that means.

This may have distinguished the Republic from England, which, while alwaysseeking to compete with the Dutch and other commercial rivals by traditionalextra-economic means, never quite achieved commercial dominance until itsdomestic economy had been transformed by internal competitive pressures. Thelogic of the English domestic economy created a new commercial system inwhich advantage really did depend on competitive production. Even Britain’sgrowing ‘extra-economic’ dominance, especially in the form of its navy, presup-posed this new economic order and the wealth it generated.

MARKET-DEPENDENT APPROPRIATORS

Throughout this discussion, we have repeatedly been drawn back to one criticalpoint: in the one unambiguous case of self-sustaining capitalist development,in England, where the imperatives of competition, profit-maximization and theimprovement of productive forces operated systematically in both rising anddeclining markets, market dependence was not simply a need for exchange inorder to obtain basic necessities but a social-property relation. Both producersand appropriators depended on the market for their self-reproduction. Just asproducers depended on the market for access to the means of production – land– so was the power of appropriation dependent on the market, and the relationbetween appropriators and producers was mediated by the market.

In his account of capitalist development in England, Brenner himself hasemphasized, as we have repeatedly noted, both sides of the relation betweenEnglish landlords and tenants. The specific pattern of self-sustaining economicdevelopment in England was driven not only by the market dependence of thedirect producers but by their relation to a class of appropriators who could nolonger rely on extra-economic powers of appropriation, or politically constitutedproperty, and were increasingly dependent on rents deriving from the profitsof market-dependent tenants. Those tenants, in turn, depended on cost-effective


production in a competitive market. We can now draw some larger implicationsfrom the specificity of this relation.

When I first read Brenner’s analysis of the transition to capitalism manyyears ago, I was persuaded by his forceful argument about England’s distinctiveappropriating class, a ruling class of landowners whose capacity to extract surpluslabour from direct producers was mediated by the market. I was persuaded thatthis distinctive feature, as much as any other, accounted for England’s very specificpattern of development, and hence the development of capitalism. What madethe argument even more persuasive was the contrast he drew between the courseof English development and the very different pattern in France.

In the French case, Brenner argued, production was dominated by peasantowner/occupiers, while appropriation took the classic precapitalist form ofpolitically constituted property, eventually giving rise not to capitalism but to the‘tax/office’ structure of absolutism. Here, centralized forms of extra-economicexploitation competed with and increasingly supplanted older forms of seigneur-ial extraction. Office became a major means of extracting surplus labour fromdirect producers, in the form of tax; and the state, which became a source of greatprivate wealth, co-opted and incorporated growing numbers of appropriatorsfrom among the old nobility as well as newer ‘bourgeois’ officeholders.

In other words, as in other precapitalist systems, wealth in absolutist Francedepended less on the improvement of productive forces than on the enhancementof appropriative powers, the extra-economic powers of military and politicalcoercion. The effect of this system of social-property relations, according toBrenner, ‘was to prove disastrous to economic development’ (1985, 290). In itsefforts to preserve its tax-producing base, the absolutist state strengthened oldforms of peasant possession, and the new system of surplus extraction ‘wasoriented even more single-mindedly to conspicuous consumption and war’. Thissystem was more effective than the old in squeezing surplus out of the directproducers, which meant not only that it was even more of a drain on theproductive forces of the peasantry, but also that there was little incentive forthe appropriators to encourage labour productivity and the development ofproductive forces.

The contrast between England and France, then, stands out in sharp relief.It is not so difficult to discern the difference between the presence of marketdependence in the former and its absence in the latter, for both producers andappropriators, despite the existence of a well-developed commercial system inFrance and its active participation in international trade. A more difficult case ispresented by the other major model of European development, the wealthycommercial centres that emerged, for instance, in Northern Italy and the Nether-lands. No one could deny that the wealth of the dominant classes here rested oncommerce, and that the appropriation of surpluses from direct producers did nothere 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 thisform of appropriation shaped the particular and self-limiting course of economicdevelopment.


Urban patriciates or merchant elites in commercial centres in medieval andearly modern Europe often extracted great wealth from commercial activities,but they relied in large part on the privileges and powers associated with theirstatus in the city. The success of these commercial centres was dependent less oncompetitive production than on ‘extra-economic’ factors such as monopoly priv-ileges, sophisticated commercial methods and instruments, elaborate commercialnetworks, and far-flung trading posts, or military superiority, superior shippingand command of trade routes. Ruling elites in these centres depended on theircivic status not only for privileged access to such commercial advantages buttypically also, as officeholders, for exploitation of domestic producers by meansof direct extra-economic surplus extraction in the form of dues and taxes of onekind or another, so much so that cities of this kind have been described ascollective lordships.

This is true even in cases like Florence, whose commercial wealth was basednot only on trade in foreign goods but on its own domestic products. In relationto the surrounding countryside, the city of Florence was certainly a collectivelordship, extracting rent in the form of tax according to a logic not so verydifferent from the absolutist state in France. At the same time, the success ofits trade in its own manufactured commodities continued to depend on extra-economic factors, on monopoly privileges, or on especially sophisticated com-mercial and financial practices, which facilitated a commerce in goods whosesuccess in a luxury market in any case had less to do with cost-effective produc-tion than with the skills of craftsmanship. Not the least significant trait of theFlorentine economy was that its greatest merchant families, even those whosefortunes had begun in trade, moved into more lucrative non-productive enter-prises, such as financial services for monarchs and popes, or public office, up toand including dynastic rule of the city-state itself – as most famously in the caseof the Medici.

As successful as these commercial centres were for a time, and as great as thewealth they amassed, their economic development was self-limiting. It is self-evidently true that the market played a central role in their development, but itseems just as clear that here it really did function more as an opportunity than asan imperative. At least, the market did not operate here in such a way as to createthe relentless capitalist drive to maximize profit by developing the forces ofproduction. Where the necessary productive capacities were present and themarket, especially for luxury goods, was available, the dominant classes werewilling and able to encourage and exploit not only commerce but production.Merchants even organized and invested in production. Yet, the appropriation ofgreat wealth still depended on extra-economic powers and privileges, and far lesson developing productive forces than on refining and extending the forces ofappropriation. A system of this kind would inevitably respond to decliningmarket opportunities not by enhancing labour productivity and improving cost-effectiveness but by squeezing producers harder or by withdrawing altogetherfrom 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 non-capitalist character of such commercial economies was as much their strength as


their weakness, and that, for instance, the Italian Renaissance, which flourishedin the environment of commercial city-states in northern Italy like Florence,would not have achieved its great heights under the pressures of capitalistimperatives. The same may be true of the Dutch Republic, which enjoyed itsown spectacular cultural boom during the ‘Golden Age’ of its commercialsupremacy. But that is another story. The point here is simply that, in theabsence of those capitalist imperatives, the pattern of economic development wasbound to be different than it would be in capitalism.

The Dutch case is no doubt the most complex. It seems to have been the mosthighly commercialized society in history, before the advent of capitalism. It was,as Brenner has shown, unusually dependent on trade to provide the most basicconditions of subsistence even for direct producers. More particularly, even itsagricultural producers seem to have depended on trade to an unprecedenteddegree for basic subsistence needs. Nor can there be any doubt that the greatwealth of the Republic was founded on commerce, or that Dutch elites, asBrenner emphasizes, invested in domestic production – notably in agriculture –in unprecedented ways and degrees. Yet, quite apart from the questions that canbe raised about the nature and degree of market dependence in production, themarket dependence of appropriation is also open to question.

One of the most striking features of the Dutch social structure, as de Vriesand van der Woude stress, was the predominance of public office as a sourceof private wealth. The decentralized organization of the Republic created aparticularly fertile field for public service occupations, so the proportion of suchoccupations in the population of Dutch cities was very high. But more than thesheer numbers of offices, the most striking thing is the wealth associated withthem. To be sure, it required substantial wealth from real property or financeto enter the urban patriciate, since to be part of the governing elite increasinglyrequired abandoning private economic activities, but this wealth was vastlysupplemented by the large salaries attached to high office.

Lucrative offices were always an important resource for the Dutch rulingclasses, and even in the Golden Age of the Republic’s commercial dominance,a wealthy landowner or financier would often choose to use his wealth for accessto such offices. In the seventeenth century, ‘the financial and social advantagesof participation in town government became fully evident’ (de Vries and van derWoude 1997, 588). After 1660, when economic conditions declined, the value ofthis 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 Vriesand van der Woude 1997, 586). In the Republic as a whole in the eighteenthcentury (at a time when Britain was dominated by the wealth of capitalistlandlords), while the largest total income was held by rentiers (a significant factin itself ), ‘no less than nine of the fifteen occupations with the highest averageincomes were located in the public sector’, including the top six occupations (deVries and van der Woude 1997, 596).

We shall return in a moment to the pattern of development disclosed by thesestatistics. But the first point that suggests itself here is that the Dutch Republic


bears the unmistakeable marks of a ‘tax/office’ structure. Before the lateeighteenth century, taxation in the Republic ‘stood at a far higher level than insurrounding countries; it was then nearly twice as high as in Britain’ (de Vriesand van der Woude 1997, 111). The scale of taxation, however, is less significantin revealing the logic of the Dutch economy than are the uses to which taxeswere put, not least in subsidizing the structure of public office as a means ofprivate appropriation.

The particular nature of taxation may also reveal much about the logic of theDutch economy. While the French taxed their peasants, and the English landedclasses, especially in the late seventeenth century and thereafter, taxed themselves(after extracting their wealth directly from direct producers by means of increas-ingly market-dependent private appropriation), the Dutch preferred the excise tax.In these simple contrasts there is a wealth of information about their respectivesocial structures and economic patterns.

If the English mode of taxation bespeaks agrarian capitalism, the French is themark of a tax/office structure that rests on the backs of the peasantry. The Dutchhave in common with the French a system of wealth derived from public officeresting on a base of taxation. But the excise, while certainly hard on poorerconsumers, taxed consumption (or, effectively, commerce) rather than production,and in this respect, at least while commercial conditions were good, was less ofa drain on productive capacities. So, for a time, the Dutch were able to sustaina tax/office structure, on the basis of their vast commercial wealth, withoutsuppressing productivity. In fact, while the Golden Age lasted, a significant partof that wealth was ploughed into production, invested, for instance, in majorprojects of land reclamation. What happened thereafter is another story, to whichwe shall return in a moment.

The role of taxation in sustaining a structure of lucrative public offices wasnot the only signal of a precapitalist logic. The Republic reached its commercialpeak in large part by devoting much of its tax revenues to military ventures thatsecured its ‘extra-economic’ advantages in international trade. ‘Military expend-iture formed the largest category of expenses of the young Republic’ (de Vriesand van der Woude 1997, 100); and military aggression remained an essentialpart of the Republic’s economic strategy throughout the Golden Age and there-after. Even while the Republic’s massive resources were being used to sustainproduction, a major part of its revenues were still expended on the ‘extra-economic’ pursuit of commercial interests by means of military aggression for thesole purpose of enhancing commercial opportunities. These included not onlyaggressive trade wars but such ventures as their notorious seizure, in 1602, of aPortuguese ship containing an enormously valuable cargo of unprecedented pro-portions, 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 inthe Republic, as the European economy went into decline. The Dutch responsereveals an economic logic that, contrary to de Vries and van der Woude, even ontheir own evidence, does not simply correspond to the cyclical pattern of a


‘modern’ (i.e. capitalist) economy, but suggests something rather different. Duringand after the seventeenth-century crisis, there is, to begin with, a process ofdisinvestment in land. More significantly, ‘with the onset of agrarian depression,the interest in public office was intensified’, because investment in office wasmore lucrative than investment in land (de Vries and van der Woude 1997, 535).There was, as a result, an ‘oligarchization’ of public office. Even the exceptionproves the rule: Friesland was the only region that saw a renewed interest inlandownership – simply because here it was a requirement for voting rights, andhence access to office, so people bought land ‘in the hope that what the economyhad taken away, political office might restore’ (de Vries and van der Woude1997, 218).

While investment in technologies to enhance labour productivity was ‘notaltogether lacking’, it was far from being the preferred response to decliningmarket opportunities. More attractive to the wealthy elites were ‘extra-economic’strategies and investment in politically constituted property, notably office, butalso such attempts to revive monopoly privileges as the reestablishment of theWest India Company or one company’s monopoly on navigational charts (deVries and van der Woude 1997, 676).

We have already seen how this pattern was reflected in the distribution ofwealth in the Republic, with the concentration of wealth in the hands ofofficeholders. There are other telling features too. The fact which, as de Vriesand van der Woude emphasize, more than any other ‘gave the eighteenth-century economic its distinctive shape’ was a fiscal system supporting an enormousdebt, which concentrated wealth in the hands of a small layer of bondholders (deVries and van der Woude 1997, 681). At the same time, ‘the most prominent anddynamic of eighteenth-century growth sectors were finance and trade in colonialgoods’. Finally, there is what de Vries and van der Woude regard as the fatal‘separation of the shipping, trading, financing, insuring, and producing sectors’,the integration of which had been ‘the hallmark of the Golden Age’. The classiccommercial interests of merchants whose profits derived from circulation ratherthan production asserted themselves in various ways, if not in their abandonmentof commerce for office, then their abandonment of domestic production for morelucrative means of trading in goods produced elsewhere.

Nor did the Dutch neglect the military dimension of their commercial strategyas the European economy was sinking into crisis. Perhaps the most strikingexample is the Dutch role in England’s so-called ‘Glorious Revolution’ in 1688.Here is a particularly interesting reversion to precapitalist modes of investment,in which the massive financial resources of the Republic were directed not atimproving production, as they had been during the Golden Age by investmentin major projects like land reclamation, but at achieving extra-economic com-mercial advantage by military means.

The province of Holland in particular depended on the profitability ofcommerce and therefore was especially affected by the incursions of Frenchmercantilism in the late seventeenth century, its interference with Dutch shipsand its draconian tariffs. The only solution to this problem of commercial


profitability was to defeat French mercantilism, and that required an alliancewith England, which seemed possible only with a friend on the English throne.The Dutch Republic therefore committed its resources to supporting William ofOrange’s bid for the English monarchy, in ‘a risky investment to use the oneresource the Republic had in abundance – money – to re-establish an internationalenvironment in which the economy could once again prosper’ (de Vries and vander Woude 1997, 680). The Revolution may, to the English, seem ‘glorious’ andlargely bloodless. But from the Dutch point of view it was an invasion, involvingthe occupation of London by Dutch troops, in full expectation of a war involvingthe English and also the French. Not only the state but also the Amsterdam stockexchange invested in this ultimate use of extra-economic power in pursuit ofcommercial profit.

In short, during the crisis there seems to be a consistent pattern of reversionto, or intensification of, non-capitalist forms of commerce or even ‘extra-economic’appropriation, rentier wealth and officeholding. This is not, on the face of it,consistent with a capitalist pattern of development. But we can make sense ofthe Dutch pattern, both the rise and the decline of the Dutch economy, if weacknowledge that its fate rested not on the successes or failures of competitivecapitalist producers but on the interests of commercial profit-takers and thebeneficiaries of office.

It was suggested earlier that one important test of competitive imperatives isthe degree to which they operate in a rising market with increasing demand. Butthe ultimate test of market imperatives such as those that drive the capitalistsystem may be what happens in the face of declining market opportunities. Noone would deny that capitalists will withdraw from unprofitable ventures, butthe mark of capitalist imperatives may be the extent to which they precludedisinvestment in the face of competition (as Brenner himself has famously shownin his explanation of overcapacity in the contemporary global economy). Adecrease of production is one possible response for capitalist producers in the faceof declining markets, but to the extent that their profits derive from production,it is hard to detach themselves from it, and from their capital investments inspecific sectors of production. It is easier for commercial profit-takers whoseconnection to production is not so direct.

The most striking index of the difference between the Dutch and Englishcases is that in England, falling prices in the European crisis of the lateseventeenth century, instead of promoting withdrawal of capital from agricul-tural production, led to more capital investment to promote improvement andlower costs. This fact alone brings into sharp relief the difference between aneconomy driven by market imperatives, the imperatives of competition andprofit-maximization by means of increasing labour productivity, and an economywhich, while certainly subject to certain commercial ‘imperatives’, is more re-sponsive to market opportunities.

The Dutch economy certainly flourished in its Golden Age beyond any othercommercial society, but its subsequent trajectory suggests that there remains afundamental difference between market opportunities and market imperatives,


or between commercialization and capitalism. While British agrarian capitalismentrenched itself more firmly during the seventeenth-century crisis, followed bythe golden age of ‘improvement’, with its great landed wealth in the eighteenthcentury and industrial capitalism thereafter, the Dutch economy played to itsown great strengths, its ‘commercial sophistication’, together with the tax/officestructure that fed on it. That pattern of Dutch economic development followedthe logic not of competitive capitalist production but of profit-taking commercialcirculation.

More than any other historian, Brenner has alerted us to the flaws in the‘commercialization model’ of capitalist development. He has persuasively demon-strated that all those attempts, from Adam Smith onward, to explain the rise ofcapitalism as little more than the quantitative growth of markets and trade havesimply begged the question, assuming the prior existence of capitalism, with itsdistinctive imperatives, in order to explain its coming into being. More thananyone else, he has insisted on the specificity of capitalism. To make his vastlyimportant argument even more powerful, it seems indispensable to follow throughon it by explaining and theorizing the economic logic of commercial development,and in particular the very specific form of commercialization that took place incertain parts of Western Europe, in the late medieval and early modern period,without setting in motion the self-sustaining and constantly expanding imperativesof capitalist development.

MARKET DEPENDENCE AND TRADE IN BASIC NECESSITIES

Let me, then, try to sum up and elaborate what I take to be specific about theEnglish form of market dependence. We can certainly start from the premise thatmarket dependence has something to do, in the first instance, with the produc-tion and exchange of basic necessities, notably food. But if market dependencemeans a compulsion to ‘compete or go under’, with all that entails, it may not beenough to say that producers become market dependent when they must sellsome other commodity in order to buy their basic necessities.

The distinctiveness of market dependence in England is evident in the emerg-ence, in the early modern period, of a novel commercial system based on com-merce 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 historicallyunprecedented role, different in its ‘logic of process’ from other commerce infood, 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 ofother commercial systems, in Europe and elsewhere, or that England, like otherEuropean commercial powers, was involved in the luxury trade. The graintrade was certainly an essential characteristic of commerce in medieval and earlymodern Europe, while England, like other European countries, saw the growthof a market at home, and increasingly among prosperous urban classes, for a vastarray of luxury goods. But the English domestic market generated something


different from either the luxury trade, or the precapitalist trade in basic necessities,or the specific interaction between the two that marked the European tradingsystem.

Consider first, in very broad outline, the nature of the commercial systemin medieval and early modern Europe. It is certainly true that a growing urbanpopulation in parts of Europe, and especially in the major commercial centres,created not only a growing market for luxury goods, supplied increasingly bylong-distance trade, but also a market for very basic subsistence needs whichtheir own domestic agriculture was unable to meet. These needs were suppliedabove all by imported grain, increasingly from the Baltic region.

But as essential as the grain trade was, it cannot be regarded as the motor ofthe European trading system. Imported grain was certainly an essential conditionof commercial success in the major European trading powers, but the grain tradewas not itself the driving force of a commercial system whose fortunes werealways dependent on the fate of the luxury trade and the wealth of the prosperousconsumers that impelled it. It is even possible to argue that the need for a massivetrade in grain was determined by the luxurious consumption patterns of thewealthier classes, in the sense that the (grain-consuming) urban population ofEurope was swelled by people servicing the opulent living and ‘conspicuousconsumption’ 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 instru-ments of ‘extra-economic’ coercion on which their economic power depended –dictated the logic of the commercial system. ‘The landed aristocracy,’ writesRodney Hilton, ‘whether lay or ecclesiastical, constituted at all times the principalmarket for a range of products, mainly luxuries, which entered into internationaltrade . . . International trade, of course, dealt also in bulk commodities like grainand timber, but the demand for these was mainly urban and probably dependedultimately 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 interna-tional trading system of pre-capitalist Europe continued to be driven by thewealth 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 marketabove all to acquire the basic means of survival and self-reproduction, whetherfood or other commodities of everyday life, from inexpensive textiles to cheapcooking pots.

The point can be illustrated by considering the disjunction between com-mercial power in Europe and the trade in grain. The production and export ofgrain, as essential as it was to European subsistence, was not (until Britainbroke the pattern) an index of wealth and economic power. It was even (as Marxonce put it – 1973, 277) the function of those ‘left behind’ in Europe’s economic

5 I owe the latter point to George Comninel.


development. A division of labour developed between Europe’s, 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 betweenspecialized regions – grain from the Baltic for, say, the dairy products of theLow Countries. While the Dutch role in the Baltic grain trade was certainlyparamount, commercial power such as theirs derived not simply from commercein basic necessities but from trade in luxuries or ‘relative luxuries’, consumeddisproportionately by other rich commercial powers as distinct from grain-exporting countries.

The commercial system of pre-capitalist Europe, then, was characterized by aseries of disjunctions: the geographic separation between the production of grainand its consumption by countries whose wealth derived from trade in othercommodities – not even necessarily from the production of those commodities butalso, sometimes even more, from the conveyance, transhipment and arbitrage ofcommodities produced elsewhere and revenues from entrepots – together withan imbalance between the production of basic necessities and economic powerderived from trade in luxuries. These disjunctions and imbalances were, needlessto say, reinforced by the basic practicalities of transport and communication.The whole system, indeed, was based on the fragmentation of markets, detach-ment of one market from another, the distance between sites of production andsites of consumption, the geographic separation of supply and demand. Mercantilewealth depended precisely on the relative inaccessibility of markets and the pos-sibility of profiting from an endless process of arbitrage between fragmentedmarkets (Kerridge 1988, 6).

These disjunctions constituted a fundamental separation between consumptionand production. The social conditions in which grain was produced in exportingregions had very little to do with the conditions in which it was consumed in therich commercial centres. This meant, among other things, that grain was cheapby the economic standards of the consuming powers, without the enhancementof productive forces in the producing regions. Nor did low costs in the grain-producing regions impose competitive pressures on the consuming economiesthat benefited from cheap imports. At any rate, the trading advantages of thecommercial leaders did not depend primarily on competitive production.

This was true even of the Dutch, who differed from other Europeans in thedegree to which even their farmers depended on buying food grains; for whomthe grain trade was an absolute necessity; whose commerce in food was essentialto their economic success; and who certainly pioneered many advances in pro-ductivity, not least in agriculture. Here, the influence of low-cost grain producingregions, which benefited the Dutch even more than other economies, if anythingreduced competitive pressures by lowering the costs of basic inputs. To the extentthat the Dutch exchanged their own products, including agricultural commodities,for goods produced elsewhere, there was certainly a linkage between produc-tion and commerce; and the Golden Age of the Republic was no doubt, as deVries and van der Woude have argued, a period in which this link was closeand fruitful (followed by a period of decline when the linkage was weakened).


Nevertheless, the link was mediated by the disjunctions characteristic of the Euro-pean market in general, and the Dutch constructed their commercial empire onthe strength of other advantages outside the sphere of production. Like other com-mercial leaders in Europe (before the commercial dominance of capitalist Britain),the Dutch typically relied, for their successes in international trade, on extra-economic superiority in negotiating separate markets, rather than on competitiveproduction in a single market: on dominance in shipping and command of traderoutes, on monopolies and trading privileges, on an elaborate network of far-flung trading posts and settlements, on the development of sophisticated financialpractices and instruments, and so on.

At the same time, there was in the Dutch Republic a disproportionately largedomestic market for luxury goods. These were consumed not only by large urbanpopulations, in which the proportion of prosperous burghers was unusually largein relation to the impoverished and dispossessed. There was also an unusuallysubstantial 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 poorconsumers than by the wants of the well-to-do, and, it might be said, by themarket dependence of consumers (including consumers of grain) more than ofproducers.

These disjunctions certainly meant that, while a rich commercial nation likethe 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 relationto the wealth derived from commerce in less necessary goods. But the samedisjunctions also meant that the commercial centres whose wealth depended onthem were vulnerable to the fragilities of the international trade in superfluousgoods. Not only their great wealth but even their supply of cheap and basicnecessities could suffer from declines in the luxury trade. The Dutch, like otherEuropean economies, came up against the barriers of the old commercial systemin the crisis of the seventeenth century. For all their agricultural success, and forall their trade in basic commodities, they always belonged to an economy – bothexternally and, I would argue, internally – still subject to the constraints ofthe precapitalist market, not least its disproportionate dependence on luxuryconsumption 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 commer-cial system, driven by different needs and answering to a logic different from anyother in history. To be sure, they participated in the old commercial system, andthey 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, bydefinition, it must, in any grossly unequal society, including, and especially,capitalism – an economic role disproportionate to their numbers in all forms oftrade. But alongside the more traditional forms of trade, there emerged, in Eng-land’s domestic market, a novel system with a logic of its own, which eventually


extended its reach beyond Britain’s national boundaries, to create a new systemof international trade.

First, the English domestic market was, already by the seventeenth century,something like a unified national market, without the disjunctions that had char-acterized international trade (disjunctions that, indeed, have yet to be entirelyovercome even by today’s ‘globalization’), and without the internal trade barriersthat still affected domestic economies elsewhere, not just fragmented city-statesbut even a centralized kingdom like France. This national economy was alsoincreasingly distinctive in the sheer size and the particular composition of themarket for basic necessities, as well as for simple, cheap commodities of every-day life, like iron cooking pots. The decline of the English peasantry may havetaken longer than has sometimes been suggested, extending well into the nine-teenth century. But as the early market dependence of English tenant farmers,already visible in the sixteenth century in the form of competitive rents, acceler-ated the dispossession of those unable to survive in increasingly competitiveconditions, market dependence increasingly took the more complete form ofcommodified labour power and the reliance on a wage for access to the means ofsubsistence.

The European grain trade had traditionally been directed largely to urbanpopulations, which, of course, grew substantially in the relevant period. Theproportion of urban to rural populations in England increased more than most,and London became the largest city in Europe, a uniquely huge consumer ofbasic necessities. But this demographic pattern alone was not enough to accountfor the uniqueness of England’s domestic market. After all, the urban populationof England in the early modern period never reached the proportions of theDutch Republic at its peak.6 Yet even here there is a telling contrast. The urbanpopulation in the Dutch Golden Age was swelled not simply by the poor anddispossessed unable to sustain themselves on agricultural production, but to anunusual degree by those who benefited from or serviced the Republic’s greatcommercial wealth. By contrast, the English city, London in particular, wasdisproportionately enlarged by the poor dispossessed by agrarian capitalism. Inany case, what made the English market for basic goods distinctive was notsimply the demographic distribution between town and country but the growingproportion of the population, whether urban or rural, that was dispossessed andreliant on wages for survival, together with the more direct relation of productionto 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 beenas high as 45 per cent (the province of Holland was well above that national average), with somedecline thereafter, making it the most highly urbanized country in Europe. See de Vries and van derWoude (1997, 59–61).7 For discussions of these ‘consumer societies’, see, for example, Thirsk (1978), McKendrick et al.(1983) and Schama (1988).


with the growth of prosperous urban classes, there was a burgeoning market forall kinds of goods, beyond the basic necessities, from fine apparel to works ofart. But the ‘consumer society’ in England, however new it may have been in thesize of the market and the range of its goods, was not qualitatively different frombourgeois markets elsewhere in Europe. Nor were such consumer marketsfundamentally discontinuous from Europe’s medieval burgher culture, and theirsheer quantitative growth was not enough to distinguish them fundamentallyfrom the luxury trade of earlier periods. To identify what was truly new anddistinctive, representing a major qualitative break from old economic patternsand the operation of a new systemic logic, we have to look elsewhere.

It can be misleading to define the specific character of the new economy inBritain by stressing the growing wealth of the ‘middle classes’ or the numbers ofconsumers 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 thenumbers compelled to buy – not the superfluities of life but the most basic com-modities and the implements of daily subsistence and self-reproduction. Need-less to say, the growth of such a market presupposed the ability to buy no lessthan the compulsion. In the historical moment between agrarian and industrialcapitalism, the purchasing power of labourers may indeed have been unusuallysubstantial; and no doubt the definition of necessity was becoming ever moreelastic, increasingly embracing manufactured instruments of daily life such asindustrially produced kitchenware and eating utensils. But compulsion lies at theheart of the new economic dynamic, and, in this kind of market, even the abilityto buy was defined by its strict limitations. It was certainly a novelty that somany working people were now consumers, but the specific logic of this novelmarket depended as much on the poverty of its consumers as the luxury tradedepended on wealth.

It is not, however, enough to say that first England and then Britain sawthe emergence of a historically unprecedented mass market for cheap everydaycommodities. What finally distinguishes this market from earlier markets in basicnecessities is the fact that the consumption needs of relatively poor consumersbecame the driving force of a new kind of market also in the sense that thismarket affected production in wholly new ways. The new patterns of consump-tion reacted directly on production as never before, in the context of an alreadyintegrated and increasingly competitive national market. English agriculturalproduction substantially supplied its own domestic market for food, andEngland was, for a time, even a net exporter of grain. At the same time, thedevelopment of productive forces in the countryside was the corollary of trans-formations in social-property relations that eventually also created the massof wage-earning consumers. English agriculture was sufficiently productive byitself – not only, like the Dutch, by means of exchange, dependent on a super-abundance of purely commercial wealth – to sustain a large population no longerengaged in agricultural production, while British industry developed on thestrength of cheap basic goods, like cotton cloth, and their accessibility to thatgrowing mass market.


The development of a mass proletariat employed by capital represented theultimate development of the direct relationship between production and con-sumption. (It also, of course, represented a fundamental contradiction: the sameconditions 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 sys-tematic tendency to overcapacity, also ensured a regular imbalance betweenproduction and consumption, a new and systematic disjunction between supplyand demand. In the old commercial system, with its spatial and structural dis-connections 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 imperativesof competition meant that there were no systemic mechanisms that compelledthe regular recurrence of such imbalances, least of all the imbalances of over-capacity.) The proletariat constituted both a force of production and a massconsumer market, and the condition of the proletariat in both its aspects shapedthe development of productive forces. In a competitive environment with sys-temic imperatives to increase labour productivity, the general commodifica-tion of labour power in the form of wage-labour compelled capital, alreadydriven by competitive pressures, to extract the maximum surplus value fromworkers in the limited time during which it controlled the labour power ofjuridically free workers. At the same time, these propertyless wage labourers,dependent on the market for all their material needs, determined the nature ofproduction not only by their own productive activity but also by their powers ofconsumption.

This kind of consumption constituted a market uniquely broad and inclusive,but also uniquely limited in its resources. As a class entirely dependent onexchanging a money-wage for the most basic means of subsistence, the pro-letariat represented a larger market in a more or less unified geographic space,and in a more or less integrated economy, than had ever existed before. But itwas also a market whose consumers had restricted powers of consumption. Thatdistinctive combination naturally engendered its own pressures for cost-effectiveproduction. Production for this market required making up in numbers whatconsumers lacked in wealth, and this created pressures to produce cheaply, pres-sures that reinforced the cost-sensitivity imposed by already existing imperativesof competition. This was, in other words, the first economic system in historyin which the limitations of the market impelled instead of inhibited the forces ofproduction.

Until the production of the means of survival and self-reproduction is marketdependent, there is no capitalist mode of production. With the advent of industrialcapitalism, market dependence had truly penetrated to the depths of thesocial order. But its precondition was an already well-established and deeplyrooted market dependence, reaching back to the early days of English agrariancapitalism, when the production of food became subject to the imperatives ofcompetition. This was a unique social form in which the main economic actors,


both appropriators and producers, were market dependent in historically unpre-cedented ways.8

No doubt other societies, especially England’s commercial rivals, relied ontrade to supply certain basic conditions of subsistence. But in none of them wasproduction subject to the pressures of market dependence in the same way. Moreparticularly, in none of them was access to the very means of agricultural pro-duction, to land, market dependent as it was in the conditions of English propertyrelations; and in none of them was appropriation market dependent in the waythat 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 producersuniquely subject to market imperatives and the requirements of competitiveproduction, but also to propel the mass dispossession that created both thelabour force and the market for wholly new forms of industrial production. Theend result was a system of production, with mutually reinforcing agrarian andindustrial sectors, uniquely capable of imposing its competitive imperatives onother parts of the world; and with it came a new commercial system. Thereafter,and especially with the advent of British industrial capitalism, economic develop-ment elsewhere, from Britain’s European neighbours to the farthest corners ofthe colonial world, would be determined by the new imperatives of capitalism.

CONCLUSION

It is, then, worth considering the implications of the differences between Englandand the ‘capitalist’ Netherlands. It is worth considering whether the divergence ofthe Dutch from the English pattern of development was simply rooted in a factorexternal to its own systemic logic or whether that divergence was already inherentin their different starting points. One striking difference is that England’s earlymarket dependence, unlike that of the maritime Northern Netherlands, had nothingto do with filling the gaps in existing productive capacities, or the inability of itsagriculture to supply its own subsistence needs. The market dependence of Englishfarmers was based on something altogether different, not simply the need to ex-change in order to live, but the particular relation between ‘economic’ tenants andlandlords devoid of extra-economic powers. Even the capacity for self-sufficiencyin agricultural production would not make producers in England less market de-pendent. Theirs was a particularly stringent, all-or-nothing mode of market depend-ence, which was in no way alleviated by more than adequate productive capacities.

8 The market dependence at the heart of this unique formation was reflected in various conceptualand 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 specific tenancyagainst 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 withEnglish 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 someextent in the forthcoming revised and expanded edition of The Origin of Capitalism (Wood 2002).


The English situation, then, was distinctive in several related ways. Theproducer’s access to land itself was directly determined by the market, and thedegree of market success required in order to retain possession was not determinedby the producer himself, by the needs of his family or by their own consumptionpatterns – nor, for that matter, by their own hunger for profit. Possession ofgood 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 – wasa condition for access to that kind of land; and more successful farmers werelikely to have more access to more land. So producers who had the possibility tocompete and maximize profit were likely to be those who were most subjectto the need to do so. That compulsion derived in the first instance from theirrelation to appropriators who themselves lacked non-market access to the meansof appropriation. In that way, profit – not direct consumption or exchange –became the immediate object of production; and for the first time in history,there developed a mode of exploitation that systematically impelled the develop-ment of productive forces.

So what does this all mean? I have suggested, here and elsewhere, thatBrenner’s Marxist critics are wrong about the implications of his focus on the‘horizontal’ relations of capitalism. I now want to add that much of theirmisreading has to do with a tendency to see the market as just the ‘sphere of cir-culation’. Marx, they remind us, looked beneath the appearances of exchange andthe circulation of commodities to the underlying reality of the social-propertyrelations between capital and labour. It is, they insist, a mistake to focus on themarket in the way that Brenner does. Yet Brenner’s great strength has beenprecisely 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 theLow Countries may come down to this: there is a difference between the marketas a mechanism of exchange or an instrument of circulation, and the market asa social-property relation. The specificity of capitalism is that the relations ofproducers to the means of production, and of appropriators to the means ofappropriation, as well as their relation to each other, is mediated, indeed consti-tuted, by the market. It follows from this that there may, again, be two differentkinds of market dependence, one that entails a need to exchange in order to sur-vive, and another that makes profit-maximization, not consumption or exchange,the immediate object of production.

It would not, as I have already suggested, be unreasonable to identify theDutch case – like other precapitalist commercial powers – as an opportunity-driven economy, responding to rises and declines in market opportunities morethan to market imperatives of the capitalist kind. But perhaps we should dis-tinguish not only between the market as an opportunity and the market as animperative but also between two different kinds of market dependence. Thelatter difference is not just conceptual but historical. There have existed societiesthat relied for their self-reproduction on the market as a means of circulation butnot as a fundamental property relation, and this distinction may help to charac-terize the differences between the Northern Netherlands and England. If we are


to understand capital itself as a specific social form, we surely have to recognizethe specificity of the market as a social-property relation.

This is not to say that market dependence of the Dutch variety could neverhave produced capitalist development of the English kind, that a need to enterthe market for most or all material needs could not have set in train the kind ofdevelopment that did take place where the market from the start constitutedbasic property relations. But what ‘actually happened’ was something else: themarket as simply a means of exchange and circulation, and even market depend-ence 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 dependencein the English sense, with its inherent drive to competitive production and profit-maximization, imposed a need on Britain’s rivals to produce competitively.

From then on, and especially once the first capitalism assumed its industrialform, the market as a means of exchange and circulation did indeed becomea transmission belt for capitalist competitive pressures. From then on, marketdependence of any kind would indeed entail the imperatives of competitive pro-duction and profit-maximization. Economies inserted in the international tradingsystem and depending on it for their material needs, whatever their prevailingsocial-property relations, would henceforth be subject to capitalist imperatives.

Although the origin of capitalism depended on the social relation betweenmarket-dependent producers and appropriators, once commodification and com-petition became a virtually universal form of social reproduction, producers evenin the absence of class exploitation were subject to market imperatives. This wastrue of independent farmers and would have been no less true of independentworkers’ industrial collectives. Those imperatives, in turn, would carry in theirwake strong pressures to transform social-property relations, to reproduce theclass relation between capital and labour; and as the process of capitalist develop-ment took its course, with mass dispossession and the general commodificationof labour power, there developed wholly new and even more inescapable imper-atives of competition and capital accumulation.

REFERENCES

Aston, T.H. and C.H.E. Philpin, eds, 1985. The Brenner Debate: Agrarian Class Structure andEconomic 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 BrennerDebate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe, edsT.H. Aston and C.H.E. Philpin, 213–327. Cambridge: Cambridge University Press.

Brenner, Robert P., 1998. ‘The Economics of Global Turbulence’. New Left Review, 229(May/June): 1–262.

Brenner, Robert P., 2001. ‘The Low Countries in the Transition to Capitalism’. Journal ofAgrarian Change, 1 (2): 169–241.

Coleman, D.C., 1977. The Economy of England, 1450–1750. Oxford: Oxford UniversityPress.


de Vries, Jan and A. van der Woude, 1997. The First Modern Economy: Success, Failure, andPerseverance of the Dutch Economy, 1500–1815. Cambridge: Cambridge University Press.

Hilton, R.H., 1985. ‘A Crisis of Feudalism’. In The Brenner Debate: Agrarian Class Structureand Economic Development in Pre-Industrial Europe, eds T.H. Aston and C.H.E. Philpin,119–37. Cambridge: Cambridge University Press.

Kerridge, Eric, 1988. Trade and Banking in Early Modern England. Manchester: ManchesterUniversity 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): 235–58.Mastboom, Joyce, 2000. ‘On Their Own Terms: Peasant Households’ Response to Cap-

italist Development’. History of Political Thought, XXI (3): 391–403.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 Brenner’s Heresy’.

Historical Materialism, 4: 171–9.Wood, Ellen Meiksins, 2002. The Origin of Capitalism: A Longer View. London: Verso.

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EM Wood - The Question of Market Dependence

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