Volume 1, Chapter 32, Mercantilism, Merchants and Class Conflict
The economic policy dominant in the Europe of the 17th and 18th centuries,
and christened mercantilism by later writers,
at bottom assumed that detailed intervention in economic affairs was a proper function of government.
Government was to control, regulate, subsidize and penalize commerce and production.
What the content of these regulations should be depended on what groups managed to control
the state apparatus.
Such control is particularly rewarding when much is at stake, and a great deal is at stake
when government is strong and interventionist.
In contrast, when government powers are minimal, the question of who runs the state becomes
relatively trivial.
But when government is strong and the power struggle keen, groups in control of the state
can and do constantly shift, coalesce, or fall out over the spoils.
While the ouster of one tyrannical ruling group might mean the virtual end of tyranny,
It often means simply its replacement by another ruling group employing other forms of despotism.
In the seventeenth century the regulating groups were broadly feudal landlords and privileged
merchants with a royal bureaucracy pursuing as a super feudal overlord the interest of
the crown.
An established church meant royal appointment and control of the churches as well.
The peasantry and the urban laborers and artisans were never able to control the state apparatus
and were therefore at the bottom of the state-organized pyramid and exploited by the ruling groups.
Other religious groups were, of course, separated from or opposed to the ruling state.
And religious groups in control of the state, or sharing in that control, might well pursue
to not only strictly economic interest but also ideological or spiritual ones, as in
the case of the Puritans imposing a compulsory code of behavior on all of society.
One of the most misleading practices of historians has been to lump together merchants or capitalists
as if they constituted a homogenous class, having a homogenous relation to state power.
The merchants either were suffered to control or did not control the government at a particular
time. In fact, there is no such common interest of merchants as a class. The state is in a
position to grant special privileges, monopolies and subsidies. It can only do so to particular
merchants or groups of merchants and therefore only at the expense of other merchants who
who are discriminated against. If X receives a special privilege, Y suffers from being excluded, and also suffering are those who would have been merchants were it not for the state's network of privilege.
In fact, because of a, the harmony of interest of different groups on the free market, for example, merchants and farmers, and b, the lack of homogeneity among the interest of members of any one social class, it is fallacious to employ such terms as class interest or class conflict in discussing the market economy.
It is only in relation to state action that the interests of different men become welded
into classes, for state action must always privilege one or more groups and discriminate
against others.
The homogeneity emerges from the intervention of the government and society.
Thus, under feudalism or other forms of land monopoly and arbitrary land allocation by
by the Government, The Feudal Landlords, Privileged by the State, Become a Class or Cast or Estate,
and the Peasants, Homogeneously Exploited by State Privilege, Also Become a Class, for
the former thus constitute a Ruling Class and the latter the Ruled.
The differences between the Marxian attribution of classes to the market and the confining
Contrast the confusion in Lenin's attempt to defend the Marxian jumble of estate and
non-estate groups by the same concept of class.
Even in the case of land privilege, of course, the extent of privilege will vary from one
Merchants were not privileged as a class, and therefore it is particularly misleading to apply a class analysis to them.
A particularly misleading form of class theory has often been adopted by American historians.
Inherent conflicts between the interests of homogeneous classes of merchants is against farmers and of merchant creditors versus farmer debtors.
Debtors, and yet it should be evident that these disjunctions are extremely shaky. Anyone
can go into debt, and there is no reason to assume that farmers will be debtors more than
merchants. Indeed, merchants with a generally larger scale of operations and a more rapid
turnover are often heavy debtors. Moreover, the same merchant can shift rapidly from one
from one point of time to another, from being a heavy net debtor to net creditor and vice versa.
It is impermissible to think in terms of fixed persisting debtor classes and creditor classes
tied inextricably to certain economic occupations.
The merchants or capitalists being the peculiarly mobile and dynamic groups in society
that can either flourish on the free market or try to obtain state privileges are then particularly ill-suited to a homogenous class analysis.
Furthermore, on the free market, no one is fixed in his occupation, and this particularly applies to entrepreneurs or merchants whose ranks can be increased or decreased very rapidly.
These men are the very opposite of the sort of fixed status imposed on land by the system of feudalism.