Question

What were the main causes of the transition to capitalism in Europe? Compare Heilbroner and Marx on this issue. How was this transition related to the rise of modern political economy? Compare this relationship to the decline of classical political economy after 1830, according to Marx. Please explain in detail.

Answer 1

The internal factors that led to the collapse of feudalism and gave rise of capitalism include internal wars, rebellions by the common folk and inefficiency of the system as a whole. The feudal system placed heads of groups between the monarch and the inhabitants, thereby increasing tension between the common folk and the monarch. A Peasant Revolt ensued all over Europe in the 14th century, which resulted to the division of national wealth among small landed entrepreneurs. One of the major external factors was the expansion of trade. Merchants begun to prosper as Europe became more stable. They were a unique class of individuals in that they were not bound by obligations, thereby conducting trade in their own interest, or else everything would come to a standstill. Merchants started to transform society, from subsistence to an economic one, thereby revitalizing the notion of capital gain. The new merchant class also provided important money for kings, who stood much to gain by encouraging their trade.

Marx saw that capitalism leads to enormous wealth, but only for the few and not the many. He found the ability of capitalism to generate wealth to be good. According to Marx, this wealth could then be distributed in Communism.

Robert Heilbroner on the other hand said that as the institutions of capitalism constitute a drain upon non-privileged groups, it can be fairly said that they are only marginally responsible for any inadequacy in the prevailing general level of income. Individual companies may indeed be capable of vastly improving the lot of their workers and “could,” therefore, virtually double its wages. But for the economy as a whole, no such large margin of redistribution is possible. So long, then, as the defense of these privileges does not result in substantially increasing the share of national income. It seems fair to conclude that the level of material well-being under capitalism is limited mainly by the levels of productivity it can reach. If the trend of growth of the past century is continued, the average level of real wages for industrial labor should double in another two to three decades.

Karl Marx points out the fall of feudalism should be mainly attributed to internal factors. As demand for commodities grew as a result of new markets and increase in trade, the inefficiency of the rigid feudal structure of production failed to meet new demand. New methods of production arose, thereby increasing division of labor which enhanced productivity. As capitalist modes of production improved, landlords began to perceive themselves as businessmen, thus striving for higher economic returns. As technology improved, new modes of production were only probable if farming was on larger fields. Fiefs were excluded from the land, those who left moved on to join towns and cities while the rest remained to become paid laborers. In conclusion, the platform that held feudalism in place failed to pass the test of time. The mechanisms put in place weren’t stable enough to fend off the concept of capitalism, what came to be termed as economic freedom. The renaissance in Europe also took its toll on feudalism, as the people embraced art, technologies and change, which marked an end of the medieval times and transition into the modern world.

Marx, as a materialist, understood that the categories of political economy were a product of historical development and specifically of the historical development of the social relations of production. In his review of the history of political economy, Marx at all times insists upon the objectivity of the categories of the science: ‘They are socially valid and therefore objective thought forms’, he writes. Marx was here stressing a vital point – namely, that science always necessarily develops through definite forms outside the individual consciousness. Men always start with certain definite aims and motives and the leading figures of political economy were, in this respect, no exception. But the history of political economy cannot be reduced to a review of the conscious aims and motives of its leading representatives. Science develops always under determined historical conditions in that it must always commence its work in and through the categories which have been historically handed down to it, categories which reflect the work of all previous thinkers in the field.

Marx attacked the political economists precisely because they took the categories of their science uncritically. His charge of ahistoricism meant essentially this: the political economists fetishistically accepted the available concepts as fixed and unalterable. Political economy took its categories for granted precisely because it did not know the historical process through which they had been created. It was unable to reproduce this real process in thought and therefore saw in the categories of bourgeois political economy the expression of the essence of bourgeois production. In short, it fell under the illusion that the relations of modern economy not only appeared according to the categories of political economy, but that these relations really were as they appeared.