From opportunity to imperative: the history of the market

Monthly Review, July-August, 1994 by Ellen Meiksins Wood

Just about every definition of the "market" in the dictionary connotes an opportunity: as a concrete locale or institution, a market is a place where opportunities exist to buy and sell; as an abstraction, a market is the possibility of sale. Goods "find a market," and we say there is a market for a service or commodity when there is a demand for it, which means it can and will be sold. Markets are opened to those who want to sell. The market represents "conditions as regards, opportunity for, buying and selling" (The Concise Oxford Dictionary). The market implies offering and choice.

What then re market forces? Doesn't force imply coercion? In the colventional language of capitalist ideology, the market implies not compulsio but freedom. At the same time, this freedom is guarantee by certain regulatory mechanisms which ensure a rational economy, where supply meets demand, putting on offer commodities and services that people will freely choose. These mechanisms are the impersonal "forces" of the market, and if they are in any way coercive, it is simply in the sense that they compel economic actors to act "rationally" so as to maximize choice and opportunity.

All this implies that capitalism, the ultimate "market society," is the optimal condition of opportunity and choice. More goods and services are onoffer, more people are more free to sell and profit from them, and more people are more free to choose among and buy them.

So what is wrong with this picture? A socialist is likely to tell you that the major missing ingredient is te commodification of labor power and class exploitation. So far so good. But what may not always be so clear, even in socialist accouts of the market, is that the distinctive and dominant characteristic of the capitalist market is not opportunity or choice but, on the contrary, compulsion. Material life and social reproduction in capitalism are universally mediated by the market, so that all individuals must in one way or another enter into market relations in order to gain access to the means of life; and the dictates @f the capitalist market - its imperatives of competition, accumulation, profit maximization, and increasing labor productivity - regulate not only all economic transactions but social relations in general. As relations among human beings are mediated by the process of commodity exchang, social relations among people appear as relations among things, the "fetishism of commodities" in Marx's famous formula.

Some readers are likely to object here that this is something every socialist, or at least every Marxist, knows; but I have my doubts. In what follows, I shall argue that most historical accounts of capitalism, both right and left, have tended to lose sight of its historical specificity, the peculiarity of the capitalist market as a compulsion rather than an opportunity. I think it follows that our understanding of capitalism today, and of the political possibilities available to a socialist opposition, will be affected by ho we understand its history, the particular ways in which it represents a historic rupture with earlier social forms, and what this tells us about the specificities of the capitalist market.

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Far from recognizing that the market became capitalist when it became compulsory, most historical accounts suggest that capitalis- emerged when the market was liberated from age-old constraints and when, for one reaso or another, opportunities for trade expanded. In these accounts, capitalism represents not so much a radical qualitative break fro earlier forms as a massive quantitative increase, an expansion of markets, and a growing commercialization of economic life. The trditional account - which appears in classical political economy, Enlightenment conceptions of progress, and many more modern histories - goes something like this:

With or without a natural inclination to "truck, barter and exchange" (in Adam Smith's famous phrase), rationally self-interested individuals have been engaging in acts of exchange since the dawn of history. These acts became increasingly specialized dith an evolving division of labor, which was also accompanied by technical improvements in the instruments of production (improvements in productivity, in many of these explanations, may in fact have been the primary purpose of the increasingly specialized division of labor, so that there tends to be a close connection between these accounts of commercial development and a kind of technological determinism). And capitalism - or "commercial society," the highest stage of progress represents a maturation of age-old commercial practices and their liberation from political and cultural constraint.

But only in the West, the story goes, were these constraints comprehensively and decisively lifted. In the ancient Mediterranean "commercial society" was already fairly well established, but its further evolution was interrupted by an unnatural break - the hiatus of feudalism, and several "dark" centuries during which economic life was again fettered by irrationalism and thepolitical parasitism of landlordly power. The classic explanation of this interruption invokes "barbarian" invasions of the Roman Empire, but a later and very influential version of this model was elaborated, from the 1890s through the 1920s, by the Belgian historian Henri Pirenne, who situated the rupture of the Mediterranean commercial civilization rather later, in the MusliA invasion which, he argued, suppressed the old commercial system by closing off the Mediterranean trade routes between East and West.(1) A growing "economy of exchange," led by a professional class of merchants, was replaced by an "economy of consumption," the rentier economy of the feudal aristocracy.