This post is part of a symposium on the Methods of Political Economy.
In a recent book, Raj Patel and Jason Moore argue that the genius of capitalism lies in its “violent extractions of extraeconomic life,” and that these extractions require not only technical innovations and market institutions, but also state power, culture, and ideology. If “law and political economy” examines the role of law in constituting and regulating marketcraft and statecraft, one way of “doing” LPE, I suggest, is to look for the role of law in managing the processes by which capitalists extract value from activity putatively outside “the economy.”
For Patel and Moore, as for LPE, “Capitalism is not just the sum of ‘economic’ transactions that turn money into commodities and back again; it’s inseparable from the modern state and from governments’ dominions and transformations of natures, human and otherwise.” Capitalism produces wealth in part by drawing human and nonhuman activities previously outside itself into its circuits of production, exchange and profit, without recognizing (let alone paying) the full social and ecological costs of their creation, maintenance, or extraction. Patel and Moore call this process making things “cheap,” and they illustrate their argument with seven “cheap things:” Nature, money, work, care, food, energy, and lives.
European colonialism (a period that scholars are beginning to recognize as central to the history of capitalism) offers a wealth of examples. Patel and Moore observe that when Portuguese sailors first sighted an uninhabited island off the coast of northern Africa in the fifteenth century, they named it “Ilha de Madeira,” “island of wood,” because it was covered with hardwood trees. The Portuguese saw economic opportunity and began to cut down those trees, using the wood for shipbuilding and planting wheat for export on the newly deforested land.
Then an even more dramatic ecological-economic transformation occurred. Beginning in the 1460s and 1470s, Madeira farmers stopped growing wheat and began growing sugar cane. Sugar plantations “cleared forests, exhausted soils, and encouraged pests at breakneck speed.” By the 1530s, Madeira was almost entirely deforested. Its trees and soils were “cheap;” no one had to pay either for the natural resources or their destruction. Sugar, Patel and Moore argue, “ate the island.” But the invention of plantation agriculture, as Sidney Mintz showed decades ago, enabled sugar to stop being a luxury for European aristocrats and become “cheap food” – a staple in the diet of workers in the factories of industrializing capitalism that permitted them to live, work, and reproduce in cities where farming, hunting, and gardening were impractical.
Making life and labor cheap required a plethora of innovations – not only ecological, but also financial, legal, and cultural. The international political economy of sugar consumed not only the trees and soil of Madeira, but also the lives of North African slaves and Indigenous people from the Canary Islands. In Ireland, England, the Netherlands, the Americas, Australia and New Zealand, and colonial Africa, nation-states with imperial ambitions and private companies acted together to destroy subsistence economies and force peasants into circuits of capital as laborers. Meanwhile, state political power helped “clear” land formerly used for subsistence and transform it into “real estate,” which in addition to being planted for profit could be bought, sold, mortgaged, and speculated upon (and abandoned for new frontiers when no longer profitable). Finally, the invention of race with its twin narratives of human inequality based on culture (“savagery” versus “civilization”) and on blood/color (“white” versus “nonwhite”) sustained the cheapness of some lives, and reconciled the economics of human exploitation with the emerging politics of liberalism.
Marx’s term for the violent process of subsuming ecologies and political economies into the circuits of capital was, of course, “primitive accumulation.” But this term is misleading, suggesting a process that happened once before “capitalism” itself began. To the contrary, because capitalism thrives on extraction from non-capitalist processes, it can coexist with them, even depend on them. In his history of the American region known as “Appalachia,” Steven Stoll argues, for example, that the robustly capitalist economic activity known as coal mining didn’t fully replace subsistence economies; indeed, it profited from them. Mining companies actively encouraged household gardens, which were maintained by the “cheap” labor of miners’ mothers, wives, and daughters. The labor of coal miners in Appalachian “hollers” was so cheap because wages were supplemented by self-provisioning, and because gender norms undervalue women’s labor – or deem it not labor at all, but “love.” Capitalist commodity production in this example is sustained by “non-capitalist” processes of social and ecological reproduction: “cheapening” male wage labor and rendering women’s work and Nature’s work invisible.
These and other stories of how capitalism makes things “cheap” could be enriched by understanding law’s role in extraction. Marx, of course, famously called attention to England’s Enclosure Acts as a starting point for making peasants into wage workers. In the United States, Stoll identifies Hamilton’s schemes to tax land and whiskey as methods for the transformation of agrarian natures and lifeways into capitalist ones. He also calls out Dillon’s Rule, which held in 1868 that municipal corporations are subsidiaries of state legislatures without sovereignty of their own. Under Dillon’s Rule, Stoll points out, rather than facing multiple political battles in cities and towns, “A corporation only needed to sway a governor or a fistful of legislators in order to condemn land, restructure tax laws, defeat striking workers, and otherwise extract where they pleased.” Historian Manu Karuka has recently reframed the building of the American transcontinental railroad within global capitalism, examining the combination of finance, militarism, immigration policy, labor, and white supremacy that created vast profits for railroads while creating Indigenous poverty. With our deep understanding of how legal institutions and processes operate, LPE scholars could enrich these accounts, and provide others.
A neoclassical economic analysis would, of course, sweep all of the above into the category of “negative externality.” On this account, environmental degradation and the destruction of human lifeways are social “costs” that have unfortunately not been “priced in” to the process of capitalist development. To correct for this suboptimal outcome, we need only design legal rules to make sure that the perpetrators of these and similar harms “internalize” the full costs of their drive to accumulate. The apotheosis of this kind of calculus is formal “cost-benefit analysis:” the attempt to “measur[e] all of the social costs and benefits of a whole range of regulatory alternatives and then locat[e] the alternative that provides the highest level of net social benefit.”
The literature on the problems with cost-benefit analysis is now deep and wide. The more technically ambitious such an algorithm is – the more it promises in terms of breadth and mathematical rigor — the more vulnerable it is to critique. At its most grandiose and seemingly “scientific,” formal cost-benefit analysis “undercounts the preferences of the poor vis-`a-vis the rich, devalues the lives of our children and grandchildren, ignores distributional inequities, fails to account for low-probability catastrophic outcomes, and [] rests on a vision of human nature and behavior that has been shown to be fundamentally flawed and internally inconsistent.” And “it is simply unworkable given the current state of scientific knowledge.”
But there is a deeper problem. Describing the complex political, ecological, social, cultural, ideological and yes, economic mechanisms of extraction and accumulation as so many “externalities” fails to give us any way of understanding, let alone intervening in, the processes of cheapening. To identify an “externality” is not to explain how it came to be, how it continues to exist, or how it might be undone. For that, we need to flip the script. Rather than treating history, politics, and domination as economic processes that need to be priced, LPE scholars should approach capital formation, commodification, production, exchange and other “economic” processes as political.
Marshall Sahlins observed in 1974 that “The evolution of economy has known … two contradictory movements: enriching but at the same time impoverishing, appropriating in relation to nature but expropriating in relation to man.” The Doctrine of Discovery, the law of private property, the law of slavery, and doctrines like coverture; the Homestead Acts and the Dawes Act; state and local laws against vagrancy and open-range grazing; corporation law, social welfare policy, and family law; and Supreme Court decisions like Wickard v. Filburn (which, Stoll points out, permitted the federal government to prohibit small farmers receiving subsidies from using portions of their land for their own subsistence): all of these, and more, are available to LPE scholars who adopt the method of “looking for extraction.” Granted, treating economics as a subset of politics rather than the reverse doesn’t make genuinely wicked policy any easier to resolve. It does, however, teach us something about how capitalism works.
