Merchant Capitalism, Peasant Households and Industrial Accumulation: Integration of a Model

Abstract

My paper underscores the theoretical contribution of an early essay by Henry Bernstein, 'Notes on Capital and Peasantry', published in 1977. It uses the ideas in that essay to construct a general argument about the ways in which capitalism dominates household producers. The first section summarizes the arguments of Bernstein's essay and relates them to key passages of A.V. Chayanov's work. The second section builds a model of how commercial capitalism worked in the produce trades of the nineteenth and early twentieth centuries. The third section proposes a wider taxonomy, where the differences between commercial and industrial capital and their respective forms of domination of the countryside are laid out. The key category here is vertical integration as a form/strategy of accumulation chiefly characteristic of the latter. The fourth section suggests that we need to take merchant capitalism more seriously as a historical category as well as one of theory, rejecting the idea that merchant's capital 'exclusively inhabits the circulation sphere'.

The value components of contract farming in contemporary capitalism

“…The central ambiguity is concisely identified by Banaji (, p. 421). Watts’ construal of CF as an “intensified and formalized method of capitalist control over household production” finds tension with case‐study evidence pointing to company preferences for capitalist growers.…”

The complexity of exchange: Wheat markets, petty‐commodity producers and the emergence of commercial capital in colonial Punjab

“…Thus, it was not just international commercial capital that combined trade with transport (mainly shipping) and banking as persuasively demonstrated by Banaji (, p. 411): Diversified portfolios were an even more pronounced feature of local commercial capitalists. These firms also included industrial capital and direct cultivation as part of their overall strategies of accumulation.…”

“…In his 2007 paper on “Islam, the Mediterranean and the rise of capitalism,” Jairus Banaji issued an emphatic call for a “Marxist theory of commercial capitalism” (, p. 51). In a recent paper, he followed up this call by proposing a provisional model of how commercial capital (now termed merchant capital) dominates household production (Banaji, ). Using vast amounts of historical literature and combining it with theoretical insights from the works of Marx, Chayanov, and Henry Bernstein, the paper presents a fourfold taxonomy of such domination, namely, (a) commercial capitalism of the produce trades, (b) contract farming, (c) vertical integration between agriculture and industrial capital, and (d) industrialized agriculture.…”

“…In particular, the paper argues that historically peasant integration into commodity circuits rarely took the form of a “straightforward confrontation between wage‐labour and capital” (p. 411). Instead, household producers in various parts of the 19th and early 20th century colonial world were incorporated into a network of “loose” distended but hierarchically organized commodity chains, with large colonial trading houses at the top and various layers of intermediaries (Banaji, , p. 415). Moreover, he argues that these chains (from sugar, opium, and rice in parts of India to groundnuts in West Africa and tea in China) should be viewed as “combined accumulations of capital” at all levels of the hierarchy.…”

“…But the paper also aims to go beyond these views by placing the critical Marxist concept of merchant capital within the framework of the larger agricultural commodity marketing system in which it is embedded. Using wheat trade in colonial Punjab as a case study, the paper identifies the range of capitalist and noncapitalist firms and farms that occupied the wheat marketing system and the panoply of relations between them that cannot simply be captured through a vertical conception of “commodity chains” used by some scholars (e.g., Banaji, ).…”