The 1% and the Rest of Us

by Tim Di Muzio

  A man who is born into a world already possessed, if he cannot get subsistence from his parents on whom he has a just demand, and if the society do not want his labor, has no claim of right to the smallest portion of food, and, in fact, has no business to be where he is. At nature’s mighty feast there is no vacant cover for him. She tells him to be gone, and will quickly execute her own orders, if he does not work upon the compassion of some of her guests. If these guests get up and make room for him, other intruders immediately appear demanding the same favor. The report of a provision for all that come, fills the hall with numerous claimants. The order and harmony of the feast is disturbed, the plenty that before reigned is changed into scarcity; and the happiness of the guests is destroyed by the spectacle of misery and dependence in every part of the hall, and by the clamorous importunity of those, who are justly enraged at not finding the provision which they had been taught to expect. The guests learn too late their error, in counter-acting those strict orders to all intruders, issued by the great mistress of the feast, who, wishing that all guests should have plenty, and knowing she could not provide for unlimited numbers, humanely refused to admit fresh comers when her table was already full (Malthus 1992: 249).

  As the reader can tell, this is hardly the language of a man celebrating a shared prosperity or looking forward to a future of wealth and abundance. For Malthus, there were strict limits imposed upon who could feast and who could not. If they grew too many in number, the poor were simply to starve.3 In fact, throughout this period hunger was a key theme of the ruling 1% when they referred to their less-well-off counterparts, with Arthur Young declaring in 1771 that ‘everyone but an idiot knows that the lower classes must be kept poor, or they will never be industrious’ (Thompson 1966: 358). Being poor meant being constantly hungry, and, in a world where food was increasingly a commodity, it meant one had to find paid work to eat or rely on the beneficence of others. The physician and geologist Joseph Townsend (a major influence on Malthus), writing during the same period, argued much the same in his A Dissertation on the Poor Laws. As noted by Polanyi, Townsend’s crucial point was that ‘hunger will tame the fiercest of animals’ and is the only thing that will spur the poor to labour (Polanyi 1957: 113). Polanyi argued that this was a turn away from more humanist forms of political theory to a vision of humanity more centred on treating people as animals:

  Hobbes had argued the need for a despot because men were like beasts; Townsend insisted that they were actually beasts and that, precisely for that reason, only a minimum of government was required. From this point of view, a free society could be regarded as consisting of two races: property owners and laborers. The number of the latter was limited by the amount of food; and as long as property was safe, hunger would drive them to work … hunger was a better disciplinarian than the magistrate (ibid.: 114).

  If hunger would spur the poor to work at home in Britain, the guns and whips of the plantation drivers proved more effective abroad.4 It is estimated that between 1500 and 1870, 12 million Africans were taken from the western coast and transplanted to the ‘New World’. Well over a million died on the journey across the ‘Middle Passage’ from Africa (Blackburn 2010: 3). More died within the first year of their arrival in lands far from their birth. Virtually from its beginning, the geopolitically competitive European colonial project was intimately tied to the transatlantic slave trade. There is little doubt that each colonial power offered different justifications for its advance, but the most powerful was the need for labour power to produce sugar, tobacco and cotton on colonial plantations (ibid.: 9, 234–5; Mintz 1986; Williams 1984; 1994; Wolf 2010). Sugar was by far the most profitable crop sold in Europe – one of the foodstuffs of those with disposable incomes. But as production increased and prices came down in the eighteenth and nineteenth centuries, the sweet substance was more accessible to working people – in particular as a fuel source for work. One of the primary reasons for this development was that – particularly in Britain at first – an emergent market society had been in the process of creation over centuries. Enclosure and the expropriation of customary rights combined with the monetisation of competitive leaseholds in the countryside led to waves of rural dispossession and over time an urbanised wage-labour society. We know this because urbanisation can be used as a proxy for the spread of the price system, since, by definition, city dwellers do not provide for their own social reproduction but instead must purchase goods on the market (Nitzan and Bichler 2009: 152). From 1500 onwards, England became far more urbanised than its European counterparts, suggesting to Wrigley that ‘patterns of expansion and change in England reflect a different dynamic from those in continental Europe, especially after 1700’ (Wrigley 2010: 64). This pattern was largely towards increasing market dependence and wage labour – two of the key ingredients of the capitalist mode of power.

  This should be enough to demonstrate the point that in the era before fossil fuels, for some to have more, others had to give something up: their labour, their land and resources, and, quite often, their lives. Even Adam Smith, who was far more optimistic about commercial society than Malthus, wrote that: ‘Wherever there is a great property, there is great inequality. For one very rich man, there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many’ (Smith 2005: 580). The discussion above should also be sufficient to demonstrate that the primary drive to accumulate money does not have to wait for industrial capitalists: the search for wealth and riches among the powerful is already their principal logic. War, confiscation, plunder, violence, torture and the deployment of various forms of unfree labour were the common tools of accumulation in Europe and elsewhere (Sobel 2000).

  In the pre-capitalist age, the Roman Catholic Church kept its European flock in awe through pomp, pageantry, rituals and the force of princely warriors and their retainers. Over time, however, the concept of surplus wealth started to enter the minds of early political economists, to the point where today entire nations are beholden to their gross domestic product (GDP), stock market indexes and the national accounts (Fioramonti 2013).5 The key questions that lead to this development are the following: what constitutes wealth? And, more importantly, how was it generated (Vaggi and Groenewegen 2003: 7)? Where does surplus or wealth come from? What are its mainsprings and how should rulers govern to unleash the surplus-generating forces of society? In my reading of political economy, this thinking begins in Europe – perhaps for good reason.6 It is this region – and in particular the tiny island nation of Britain – that will eventually exploit a new energy source that will break the chain of daily insolation: non-renewable but energy-dense coal will be used in huge quantities for the first time in human history. Since energy is generally defined as the capacity to do work, more energy (from coal, at first) leads to ever greater capacity for work. With some exceptions, most early political economists did not perceive the relationship between surplus energy and the surplus capacity to produce. Before what we today call the school of classical political economy, the nearest we got to thinking about wealth was called mercantilism. It was a variegated body of knowledge connected up with royal power, international trade and the merchant quest for profit from trade. This view would come to be challenged by early political economists, but to understand their critiques and their own vision of where ‘surplus’ originated, we must first consider the main tenets of mercantilism.

  Mercantilism

  The current of thought that has been labelled ‘mercantilism’ must be understood within the context of a rising European merchant class, European colonialism and the geopolitical competition for a share of international trade – including long-distance trade to the Americas and Asia. Moreover, during the Iberian colonisation of the Americas, large amounts of gold and silver had been imported to Europe from Mexico and Peru by Spanish conquistadors, which further emboldened geopolitical competition for colonial riches. Mercantilist thought also emerged at a time when gold and silver (called ‘bul
lion’) were the only trusted currencies for financing war and conducting international trade. In their overview of mercantilist thought, Vaggi and Groenewegen put it thus:

  Precious metals guaranteed the command over goods, resources and labor all over the world. The power of the state depended on the amount of gold and silver in its coffers, because this international currency made it possible to build ships and to pay armies (ibid.: 16).

  Since gold and silver were the main mediums of international exchange, early mercantilists such as Thomas Gresham and John Hales argued that encouraging more gold and silver to flow into the country than flowed out would enrich the nation. In this formulation, the wealth of any given country, as Vaggi and Groenewegen suggest, was conceptualised as a stock of bullion made on the sale of raw materials to other nations. The stock could be increased by raising interest rates (thereby attracting foreign capital), keeping the currency valuable by not debasing it with inferior metals, and organising a system of taxation to collect revenue for state coffers (ibid.: 17). Through the ideas of a one-time director of the East India Company, Thomas Mun, mercantilist thought underwent a further refinement, gaining greater specificity in the realm of policy. However, the source of wealth remained the same: a positive balance of trade and more money in the form of gold and silver. Whether the mercantilists were wrong or right about the exact source of wealth is perhaps less important than recognising that they were not issuing neutral knowledge but were positioned in a field of political power. Mun and other mercantilists were largely practical men involved in long-distance trade. When they talked about increasing the wealth of the nation, the ‘nation’ largely meant their own class. There is little doubt that they sought to encourage policies that would primarily benefit merchants and, to some extent, a royal treasury in constant need of war finance, to which they owed much for sovereign protections. This much Adam Smith would charge them with:

  Such as they were, however, those arguments convinced the people to whom they were addressed. They were addressed by merchants to parliaments and to the councils of princes, to nobles, and to country gentlemen; by those who were supposed to understand trade, to those who were conscious to themselves that they knew nothing about the matter. That foreign trade enriched the country, experience demonstrated to the nobles and country gentlemen, as well as to the merchants; but how, or in what manner, none of them well knew. The merchants knew perfectly in what manner it enriched themselves, it was their business to know it. But to know in what manner it enriched the country, was no part of their business. The subject never came into their consideration, but when they had occasion to apply to their country for some change in the laws relating to foreign trade. It then became necessary to say something about the beneficial effects of foreign trade, and the manner in which those effects were obstructed by the laws as they then stood. To the judges who were to decide the business, it appeared a most satisfactory account of the matter, when they were told that foreign trade brought money into the country, but that the laws in question hindered it from bringing so much as it otherwise would do. Those arguments, therefore, produced the wished-for effect (Smith 2005: 345–6, my emphasis).

  In other words, the mercantilists helped themselves by masquerading their own particular interests as the general interests of the country. They also remained silent on the distribution of wealth. And given the fact that the majority of the population remained overwhelmingly rural and therefore not fully subject to the full dictates of the price mechanism or market imperatives, we can be sure that the merchants made up part of an early modern 1%.

  The birth of classical political economy

  According to one scholar of political economy, the term ‘classical political economy’ was put forward by Marx to designate an emergent body of thought that broke from the mercantile tradition (Aspromourgos 1996: 2–3). The beginning of this new discourse on the origins of wealth began with Sir William Petty (1623–87) in England and Pierre le Pesant de Boisguilbert (1646–1714) in France. The tradition ends – at least according to Marx – with David Ricardo (1772–1823) and Jean Charles Léonard de Sismondi (1773–1842). Despite its advocates’ considerable differences, what unites this branch of political economy is a concern to explain the generation of wealth or surplus not by merchant trade as evidenced by stocks of gold and silver, but in the production of material goods as evidenced by a flow of annual produce. But the search for the source of surplus value led to a further and perhaps more important question: if society was somehow creating more than its mere subsistence needs, how was this surplus divided in a class-based society and what justified this division? These questions would hardly be important if everyone in society received an equal portion of the surplus produced in any given year. But this was clearly not the case: some received a great deal more than others. The early political economists started to inquire why this was so.

  William Petty In political economy, ‘William Petty is the originator of the concept of an economic or social surplus’, says Aspromourgos (2005: 1). To be clear, it is not as though surplus was never noticed before Petty came along and thought about it. It is simply the case that with Petty the concept of surplus was becoming a quantifiable object for political economy. Although the view is somewhat conjectural, it is likely that Petty developed his seminal idea of surplus through his engagement with the Hartlib Circle – a correspondence society concerned with advancing knowledge throughout Western and Central Europe. One of the key concerns of the time was agricultural improvement and the application of new techniques and technologies to agricultural production (ibid.). However, the focus of Petty and other agricultural improvers was not on agricultural production for need – that is, to supply nutritious diets to the population – but on production for profit. In his major work in 1662, A Treatise of Taxes and Contributions, there is a clear understanding that a surplus of goods could be generated from two primary sources of wealth: labour and land. Petty writes of an ‘overplus’, ‘growth’, ‘superfluous commodities’, ‘surplusages’ and ‘supernumeraries’ – the latter term meaning paupers. Surplus comes from ensuring that ‘net output per worker [on the land] exceeds necessary consumption per worker’ (ibid.: 12). Thus it could be said that Petty had an input theory of value: the price of a commodity was determined by the cost of supplying labour with subsistence wages and the cost of resources used in production (Vaggi and Groenewegen 2003: 33–4).

  But whatever Petty’s other intentions and conceptual innovations, the 1662 treatise is primarily a blueprint to advance a judicious system of taxation to pay for war (primarily) and other reasonable public expenditures – for instance, infrastructure. In the preface, Petty argues that his views can be applied widely but are certainly suitable for Ireland, where the Irish had been rebelling against English rule:

  Ireland is a place which must have so great an Army kept up in it, as may make the Irish desist from doing themselves or the English harm by their future Rebellions. And this great Army must occasion great and heavy Leavies upon a poor people and wasted Countrey; it is therefore not amiss that Ireland should understand the nature and measure of Taxes and Contributions.7

  Translated, Petty means: ‘the conquest of Ireland has been a most brutal affair. Forcing the Irish to conform to our way of life or dispossessing them of their land has caused their Catholic leadership to rebel. In order to impose our Protestant rule and way of life, we will require an army for some time before the Irish are pacified and finally submit to our will. Since a permanent standing army will be expensive, it is best that Ireland’s Protestant governors understand how to raise taxes to support their domination of the land and its people.’ Petty is no neutral or innocent witness standing outside society. As one scholar has argued, his political economy was forged from his practical experiences in evaluating expropriated land from Ireland (Fox 2009). From 1653 to 1687, when he died, he spent two-thirds of his life in Ireland. His most important practical contribution during this period was the Down Survey
– a detailed survey of land tenure and profitable and unprofitable tracts of land throughout Ireland. The main purpose of the survey was to provide a reasonably accurate picture of land occupancy so that land could be redistributed to the soldiers and investors who physically reconquered or financed the reconquering of Ireland under Cromwell. Indeed, before it even left the shores of England, the privately financed army sent to reconquer Ireland for the English 1% was capitalised on the basis that 2.5 million acres of Irish land could be confiscated. The capitalised land would then be turned over to war financiers and soldiers as their ‘return on investment’ (Bottigheimer 1967; Hazlett 1938).

  In this way, we should understand Petty as embedded in certain relations of force that are pre-industrial but not pre-capitalist from the point of view of capital as power. It is not as if power and profit were invented with the Industrial Revolution (Marx’s capitalism proper). In Petty’s time, the accumulation of money and power was the primary goal of the few and Petty ended up squarely in the 1% through his ownership of expropriated Irish lands – his personal wealth increasing from £500 to £6,700 between 1652 and 1685 (Fioramonti 2013: 20). And while this period is certainly known for its discourse of agricultural improvement and the potential surplus to be had by such improvements, obtaining profitable land for a small class of ‘gentlemen’ farmers largely meant taking productive land away from others (Canny 1973; Ferro 1997; Rai 1993; Weaver 2006; Wood 2002). In England, this meant an internal war: enclosing land, dispossessing direct or peasant producers from common land and abolishing their customary right to it (Neeson 1993; Thompson 1991). Indeed, by 1850, ‘Landlords owned 75–80 percent of the farmland of England’ (Overton 1996: 204). Such measures would involve considerable violence and a growing penal code to deal with those who rebelled or struggled to survive by committing newly minted crimes against property (Hay 1980). Abroad, this more often meant the violent imposition of rule and the taking away of land by various means from native custodians. In more ways than one, we could read Petty’s political economy as one of the first attempts to precisely quantify the power and worth of land appropriation. But Petty also desired to give people a monetary magnitude – to assess the worth of individuals so that they could more easily be taxed by royal authority (Fioramonti 2013: 21). This new knowledge being born – with its early attempts at mathematical exactitude and calculations of improvement and profit – continued to be refined as finance became more and more the language of power and appropriation. Numbers, maths, measurement, quantification, calculation and the price system all became the handmaidens of the capitalisation process – a process designed to reduce human sociality and creativity to the domination of private owners: