A Spectre is Haunting paper: The Genesis of Capitalism

Do international relations precede or follow (logically) fundamental social relations? There is not doubt that they follow. Any organic innovation in the social structure, through it’s technical military expressions, modifies organically absolute or relatively relations in the international field too – Antonio Gramsci (1971: 176).

Karl Marx once wrote “the economic structure of capitalist society has grown out of the economic structure of feudal society. The dissolution of the latter set free the elements of the former” (1990: 875). It has been argued, against the orthodox conceptions in the International Relations (IR) discipline, that the origins of the modern international system was bound up with the rise of capitalism in early modern England (Rosenberg 1994: 138; Teschke 2003: 11). The purpose of this presentation is to provide a Marxist interpretation of the origins the modern international system. The subject of this study is England and begins with analysing the establishment of agrarian capitalism, the “so-called primitive accumulation” of early capitalism which fostered the changing property-social relations of the land. I analyse the consequential economic, social and political transformations, that is, the reconfiguration of the English state/civil matrix. I examine how the changing social relations affected the shift from dynastic sovereignty to parliamentary sovereignty, in sharp contrast to the Absolutist state of France. I establish the transformation and duality of England’s foreign policy towards Europe, which shifted on the basis of a capitalist social property dynamic that revolutionised the British state. I demonstrate how the geopolitical pressures of British capitalism affected the course of socio-political development in the old European continent. Indeed, the aim of this presentation is to demonstrate, as Gramsci stated, how international relations are intricately linked to the correlation of social forces, in civil society and the state, both domestically and internationally. Finally, I conclude by analysing the nature of global capitalist hegemony, which had the British Empire at its core. This last section deals more with the theoretical aspect of hegemony than a empirical-historical analysis. I develop the neo-Gramscian concept of hegemony to explicate the social-cultural hegemony of a ruling class and the expression this has on international politics and the world order. In sum, I argue that the rising capitalist state/civil matrix in England “would play a pivotal role in the long-term restructuring of the European states-system” (Teschke 2003: 249). Overall, sixteenth to late seventeenth century England is the point of reference for this investigation. No single event or date can be singled out as the decisive point of the modern international system; for this is an era. International relations in this period of transformation were thus not modern, but modernising (Teschke 2003: 250).

Throughout the period of the seventeenth century a new modern English society and state began to emerge, and England’s position in the world was transformed. The structural transformations that took place in the seventeenth century were more than merely a constitutional or political revolution, or a revolution in economies, religion or lifestyle. It embraced the totality of society (Hill 1980: 1-4). Indeed, as British Historian Eric Hobsbawn describes, by the dawn of the Industrial Revolution the most fundamental transformations in human life had occurred in the history of the world (1968: 1). This era, “was the triumph not of ‘industry’ as such, but of capitalist industry; not of liberty and equality in general, but of middle class or ‘bourgeois’ liberal society; not of ‘the modern economy’ or ‘the modern state’, but of the economies and states in a particular geographical region of the world (part of Europe and patches of North America), whose centre was the neighbouring and rival states of Great Britain and France” (Hobsbawm 1962: 17-8). During the nineteenth to early twentieth centuries, the British Empire ascended to become a global hegemon and was at the core of the world economy. But how was it that at the beginning of the seventeenth century England was a second-class power and by the early eighteenth century it was the greatest world power? What were the structural – social, political and economic – transformations in England? And what geopolitical consequences did this have for the European continent and eventually the international sphere?

During the sixteenth-seventeenth centuries, England was less advanced, even backwards, in commerce and technology than its European rivals, but its development, both its successes and its failures, was shaped by a distinctive system of social property relations (Wood 2002: 94). This unique configuration was the emergence of the capitalist mode of production and reproduction of social life. The foundations of the early English economy lay in agriculture. The fundamental structural transformations made English agricultural practices more productive than its continental rivals (DuPlessis 1997: 64). Agrarian capitalism, argue Marxist scholars (Teschke 2005:10; Wood 2002: 99; DuPlessis 1997: 64), originated as the unintended result of class conflict between landlords and peasants in the agrarian sphere. In contrast to France, landlords in the English rural society succeeded in transforming copyhold agreements on the land into leaseholds, renewable at the whim of the landlord. This enabled lords to profit from rent prices that were subject, not on fixed rents or customary standards, but on the emerging dependence on the market (DuPlessis 1997: 64; Wood 2002: 100). Consequently, this made the acquisition and concentration of land more lucrative. Landlords concentrated land by the dispossession of commoners through enclosures, acquiring and draining marshlands and obtaining royal parklands (Hill 1980: 14). The enclosure movement was the most distinctive definition of changing property relations that started in the sixteenth century and continued into the eighteenth century, it was backed by a series of post-1688 Acts of Parliament, that destroyed the commons and subsistence farming (Teschke 2003: 251). Between the sixteenth and eighteenth centuries, “traditional conceptions of the land had to be replaced by new, capitalist conceptions of property – not only as ‘private’ but as exclusive” (Wood 2002: 108). Marx referred to this transformative period as “so-called primitive accumulation”, which is “the historical process of divorcing the producer [the peasantry] from the means of production. It appears as ‘primitive’ because it forms the pre-history of capital, and of the mode of production corresponding to capital” (1990: 875). This historical era was, as Marx called it, the genesis of agrarian capitalism. This period was not a simple extension or expansion of the market or exchange processes but a complete transformation in social relations.

In the sixteenth century, “England went a long way toward eliminating the fragmentation of the state, the ‘parcellised sovereignty’, inherited from feudalism” (Wood 2002: 98). Politically, the transformation of a militarised feudal class into a demilitarised class of capitalist landlords provided the social basis for the new constitutional monarchy (Teschke 2003: 252). The aristocracy was among the first in Europe to be demilitarised, and was part of an increasingly centralised state (Wood 2002: 99). The aristocracy no longer possessed what Marx called ‘extra-economic’ powers – direct coercion, exercised by landlords or the state – of surplus extraction from peasant producers as their European counterparts. In contrast, the Absolutist state of France centralised the pre-capitalist method of appropriation in the ‘tax/office’ structure (Wood 2002: 96). In pre-capitalist society the apparatus of the state was implicated directly in the process of surplus extraction from peasant producers; under the modern state, the extraction of surplus from wage-labourers is accomplished through the non-political power associated with new forms of property-social relations (Rosenberg 1994: 124). In other words, capitalists appropriated the workers’ surplus labour without the direct coercion of the modern state.

The distinctive conjuncture in England – the absence of ‘extra-economic’ powers and changing property relations – meant that agrarian landlord’s leased land to capitalist tenant farmers who employed wage-labourers for commercial farming. Consequently, tenant’s were increasingly subject not only to direct pressures from landlord’s to produce but also to unique, capitalistic market imperatives, in competition for access to land and wage-labourers (Wood 2002:100). The unique English rural society was polarised between large landowners and a growing propertyless multitude, also referred to as “the proletarianised peasantry”. The result was the landlord, capitalist farm tenant, and wage-labourer, and “with the growth of wage labour the pressures to increase productivity also increased” (Wood 2002: 102). Consequently, this increased the productivity of English agriculture and was capable of sustaining a large population not working in agriculture, providing the conditions for a growing home market for cheap commodities, a wage-labour force, and the urbanisation of spaces, the elements of which provided the conditions for the future Industrial Revolution (Teschke 2003: 252). In England, the market therefore did not represent an opportunity for selling surplus produce, but an economic imperative in which landlords, tenant farmers, and wage labourers reproduced themselves (Teschke 2003: 252). Until this unique development in social-property relations, England had lagged behind other European counterparts (Hill 1980: 15). This was a new form of life in England where the market and state, public and private became increasingly differentiated.

Class conflict in England was driven by conflicts between landowning capitalist, aristocracy against a reactionary class alliance of big monopoly merchants, surviving feudal magnates and the monarchy. “This conflict climaxed in the Glorious Revolution with the capture of power by the capitalist aristocracy and the downgrading of the monarchy to the formula ‘Crown-in-Parliament’” (Teschke 2005:11). The Glorious Revolution of 1688, according to Hill, “was a turning-point in economic as well as in political and constitutional history” (1980: 224). The Revolution enhanced the power of the propertied classes in Parliament and, by advancing the interests of larger landowners, it allowed directly for the promotion of capitalism and the capitalist conception of property (Wood 2002: 121). Indeed, the changing from dynastic to parliamentary sovereignty signals the consolidation of modern sovereignty.

The capitalist aristocracy acquired essential control over Parliament and the state apparatus – taxation, the army, jurisdiction, foreign policy, and the right of self-convocation (Teschke 2003: 253). Parliament broke the back of the merchant monopolies of the great chartered overseas companies – East India Company, Hudson’s Bay Company, and the Royal Africa Company – paving the way for freer trade and greater capitalist endeavours aboard (Teschke 2003: 254). In 1702, Parliament declared that trade “ought to be free and not restrained” (Hill 1980: 225). After 1688, the English state was characterised by a growing and increasingly efficient fiscal bureaucracy. Core Departments of Government – the Treasury, the Excise and the Navy – turned from patrimonial into modern bureaucracies (Teschke 2005: 15). The structural expansion and transformation of the administrative apparatus, took on what Teschke claims is “the Weberian traits of modern bureaucracy – professionalism, salaries and pensions, examinations, appointments, merit-based promotion, a hierarchical career path, records and bookkeeping, procedure, seniority, accountability, and a sense of public duty” (2003: 254). The landed classes resorted to self-taxation which amounted to the main source of state revenue until 1713. The establishment of modern financial institutions such as the Bank of England and the National Debt, the introduction of paper money and cheques date from this period. These were important developments for facilitating business transactions that provided the conditions for future industrial expansion (Hill 1980: 232-3).
By the eighteenth century, England was at the height of agrarian capitalism. With a growing urban population, London was the largest city in Europe (Wood 2002:188). However, England was in the “process of creating an industrial capitalism” (Wood 2002: 188). There had been an expansion of the cheap consumer-goods industries. Indeed, all sections of the population were to some extent cash customers for goods produced outside their areas. The home market was variously estimated at from 6 to 32 times the foreign market (Hill 1980: 227). During this period there was the expansion of large-scale enterprises. This period also saw an expansion of trade union activity (Hill 1980: 228-9). During this era, the English economy was geared to the export of large quantities of cheap goods. “England”, writes Hill, “had entered the competitive epoch, well ahead of her rivals” (1980: 232).

After 1688, England started to employ new foreign policy methods while remaining surrounded by pre-capitalist states that focused on inter-dynastic rivalry, territorial accumulation and plunder (Teschke 2003: 250). England’s foreign policy was not determined by dynastic interests but the ‘national interest’. Consequently, Parliament followed a ‘dual foreign-policy strategy’, based, on the one hand, on active power-balancing against its continental rivals; and, on the other hand, on trading and colonial expansion overseas (Teschke 2005: 17). In the eighteenth century, Britain not only became Europe’s major power but a “fiscal-military state” (Teschke 2003: 261). Indeed, during the continental confrontation Britain’s taxable capacity rose steadily while France’s declined (Hill 1980: 226). Britain set a new pattern of warfare against France, with an expensive war of attrition, where Britain subsidised continental armies. Meanwhile, dynastic states continued their traditional, feudal-like practices of territorial expansions and wealth accumulation through plunder. The British-style of warfare, however, could only be undertaken, argues Teschke (2005: 25), so vigorously and successfully due to the capitalist property regime which generated the necessary resources to finance Britain’s belligerent foreign policy, “without the constant threat of bankruptcy and royal defaulting on debts that was so characteristic of France” (2005: 15). In other words, Britain’s strength was underpinned by its dynamic and expanding capitalist economy and its post-revolutionary state that politically secured efficient fiscal measures. But how did capitalism, which had specifically developed in England, come to expand and dominate the European continent, and  that would eventually become a global hegemonic order?

In the Communist Manifesto Karl Marx and Friedrich Engels eloquently articulate the logic of capitalisms structural antagonisms, drive for expansion, accumulation and profit-maximisation, and the nature of its own reproduction:

The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere […] The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country […] All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations […] In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations […] The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image (Marx and Engels 2004: 65-6).

“England’s peculiarity”, claims Wood, “was not its role in an outwardly expanding commercial system but, on the contrary, its inward development, the growth of a unique domestic economy” (2002: 174). But the development of capitalism was not confined to the island nation, rather, “capitalism came to be the general ether that gave all subsequent developments, domestic and international, a specific colouring” (Teschke 2003: 255). Justin Rosenberg (1996: 6) suggests that the Marxian concept of combined and uneven development – originally developed by Leon Trotsky – is the theoretical key to recovering the lost history of international relations. Capitalism is itself a process of uneven and combined development, riddled with internal and reproducing antagonisms and contradictions (Rosenberg 1996: 8). In this regard, Benno Teschke, suggests that the engendering of capitalism to the European continent and the rest of the world was geopolitically combined and socially uneven development, that is, it was riddled with social conflicts, civil and international wars, revolutions and counter-revolutions (Teschke 2003: 266).

It was the geopolitical pressures exerted by the capitalist British nation, which manipulated the old inter-dynastic rivalries through active balancing, that consequently led to recurrent crises, intra-ruling class struggle, and the collapse of states in the old European continent. British foreign policy had the unintended affect of “forcing continental states to respond to and finally adjust to the superior socio-political British model, especially under the impact of the Industrial Revolution” (Teschke 2003: 263). European states organising on pre-capitalist principles of trade, or geopolitical and military rivalry, that were indistinguishable from the ancient, feudal conflicts over territory and plunder, “would be driven by England’s new competitive advantages to promote their own economic development in similar way” (Wood 2002: 143). Wood (2002: 176) argues that the traditional, pre-capitalist states, together with the old commercial network, became a transmission belt for capitalism. In this regard, “capitalism was ‘born into’ a system of dynastic polities that had consolidated their territories during the absolutist period” (Teschke 2003: 264). Capitalism therefore emerged in a territorially prefigured states-system. Marx classically quantified this emergence: the material conditions of the new society grows in the womb of the old. The nature of this new form empire, that is, the global magnitude of capitalist hegemony, and the role of the (powerful) state (in this case Britain) in world politics is the next point of discussion.

Antonio Gramsci is distinguished among Marxist scholars for elaborating and conceptualising hegemony and the sphere of civil society. Gramsci theorised that hegemony is exercised on two major superstructural levels: “civil society”, understood as the private or non-state sphere that includes the economy and other institutions; and the “political society” or “the State” (1971: 12). In other words, hegemony is not only exercised by coercion, or direct domination, but in social-cultural spheres. But Gramsci also reconceptualised and extended the traditional meaning of the state: instead of just an administrative and coercive apparatus, Gramsci recognised the underpinnings of the political structure in civil society – institutions such as the church, education, and the press, etc. Aspects which help create the behavioural modes and expectations of the social hegemonic order (Cox 1983: 164). Hegemony thus bridged the categories of state and civil society.

The hegemonic concept of world order is not just founded upon inter-state relations but, importantly, upon a “globally-conceived civil society, i.e., a mode of production of global reach which brings about links among social classes of the countries encompassed by it” (Cox 1983: 171). “It means”, as Rosenberg asserts, “the rise of a new kind of empire: the empire of civil society” (1994: 131). The precondition to hegemony is a powerful state, which have typically undergone profound social and economic revolutions, as was the case in Britain (Cox 1983: 171). A world hegemony is thus “in its beginnings the outward expansion of the (internal) national hegemony established by a dominant social class” (Cox 1983: 171). Such was the case with eighteenth century European history, which was marked and transformed by the capitalist English ruling class. However, it is important to stress the class nature of hegemony, that it represents the interest of a transnational class, particularly for the major capitalist states that emerged in Europe and North America (Gill and Law 1988: 76). Hegemony takes the form of consensual dominance. Direct dominance by a powerful state may be necessary but not a sufficient form of hegemony (Bieler et al. 2006: 10). Essentially, at an international level hegemony is not just an order among states, it is:

an order within a world economy with a dominant mode of production which penetrates into all countries and links into other subordinate modes of production. It is also a complex of international social relationships which connect the social classes of the different countries (Cox 1983: 171).

Robert Cox (1983: 170) quantifies various distinct international hegemonic periods: firstly, (1845-75) was characterised as a world economy with Britain being at its core; secondly (1875-1945) the balance of power in Europe became destabilised, where other countries challenged British supremacy. This is an era marked as non-hegemonic; thirdly, post-second World War where the U.S ascended as a hegemonic power, occupying the role that Britain once had. Of course, the nature and status of U.S hegemony is another point for discussion. The similarities between British and U.S hegemony is this: the fundamental point is that to achieve hegemony, a powerful state (Britain then, the U.S now) was required to found and protect a world order that was universally desirable, that is, not a world order where one state exploits others for its own benefits, but where there is shared interests across many states, in particular the powerful capitalist states. In this regard, this is what can be said about the U.S today. Therefore, “the key idea of modern international relations is no longer the war-assisted accumulation of territories [as was the case in the dynastic periods], but the multilateral political management of global capital’s crisis-potential and the regulation of the world-economy by the leading capitalist states”.

In conclusion, this research project has argued that the emergence of the modern international system cannot be understood as an isolated phenomena, rather it is linked with the rise of capitalism in England, and the specific transformation of social property relations that set this in motion. Agrarian capitalism was the unintended result of class struggle between the landlord’s and the peasantry. Lord’s concentrated land and created a labour-force through the expulsion of commoners and by enclosures. I argued that the English aristocracy was the first to be demilitarised and was unique in Europe as it did not possess what Marx termed ‘extra-economic’ powers, that is, the state did not extract surplus from producers. Instead, the burgeoning capitalist aristocracy extracted surplus direct from the producers. The result of this unique social-property transformations was the landlord, capitalist farm tenant, and wage-labourer. These actors were submitted and reproduced under the imperatives of the market. In sum, I argued that the distinguishing factor of early modern English society was that the exercise of power had two linked aspects: a public political sphere that manages the states-system, and a private political sphere that manages the extraction of surplus.

After the Glorious Revolution of 1688, the capitalist aristocracy gained important control over Parliament and the state apparatus. Mercantile monopolies were discarded, new state departments were erected and key financial institutions and practices were created, which allowed for the continual expansion and development of capitalism. Britain had a dual foreign policy based on active power-balancing and expansion. Meanwhile, Britain was surrounded by feudal-like Absolutist states, characterised by inter-dynastic rivalries, territorial accumulation and plunder. I argued that the geopolitical pressure exerted by the British capitalist nation had the unintended affect of driving it’s continental rivals to adopt its superior socio-economic model. Thus capitalism was engendered in the old European continent, in a combined geopolitical and socially uneven development. I have developed the neo-Gramscian concept of hegemony to understand the nature of capitalist hegemony and as such the modern international system. Gramsci claimed that hegemony is exercised by social-cultural consent. On an international level hegemony represents a transnational class. Marx claimed that capitalism seeks to create a world in its image. Such a reproduction of a social-economic model was advanced by the hegemonic British Empire, first on the European continent then on the international level. However, such a hegemonic state is one that advances and protects a world order, managing it, and having a shared interests with other great capitalist powers. I have depicted that the modern international system is relatively recent and dates back to sixteenth-seventeenth century England. In sum, the modern international system is a social construct, one that is open to contention and change.


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Gonzalo Villanueva (gonzalo [dot] n [dot] villanueva [at] gmail [dot] com)


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