Capitalism as a System of Social Formations: Notes Toward an Anti-Eurocentric Historical Materialism

Marxism is often critiqued as eurocentric and at odds with the projects of decolonization and decoloniality. In response to these sorts of criticisms, it is fashionable among many western Marxists to point at Third World Marxists such as Mao, Sankara, and the Black Panthers as evidence that much of Marxist theory & practice has been developed by the non-white subjects of colonial and imperialist domination. While this latter point is true, it doesn’t directly address the initial critiques.

The truth is, the dominant articulations of Marxist theory are most often eurocentric, teleological, and generally express varying degrees of unilinear determinism. These issues are pervasive and even affect some of the most foundational concepts in Marxist theory; one example being the orientalist (and arguably racist) theory of the “Asiatic mode of production”. These deficiencies are worsened by the dogmatism and oversimplification that has often accompanied the popularization of Marxist theory into various ideological tendencies. In spite of these clear limitations, I argue that Historical Materialism has much to offer colonized peoples in our struggles against Settler Colonialism, Neocolonialism, and Imperialism. But in order for Historical Materialism to be of most use to us, it is necessary to disentangle some of its most crucial insights from the eurocentric articulations that have plagued it from the beginning. Here, I intend to synthesize certain foundational concepts I’ve found useful as I’ve struggled through different works of theory.

Following from thinkers such as Oliver C. Cox and Samir Amin, I argue that capitalism should be understood not just at the “national” level, but rather at the global level¹. Furthermore, the two foundational concepts I’ll be using are the concepts mode of production and social formation.  The former is an abstract concept that will hopefully make more sense in the following paragraphs. The latter is a concept that works at a lower level of abstraction that’s closer to our immediate reality and experience of history². Furthermore, social formations are concrete structures that are characterized by a dominant mode of production with other modes of production that are subordinate³ – social formations are historical constructs that exist and develop sequentially across real time and space. Here, I replace “nation” and “nation-state” with social formation, as it generally implies one of those two (though there are social formations, like the settler colonial US, that encompass more than one nation). I also want to point out that classes can be understood in two ways: the first being defined by a group’s function within the production process corresponding to a mode of production, and the second as defined by the classes' relation to a social formation, the relations between these social classes being specific to said formation. The first is essential to understanding the dynamics of a mode of production, the second is to be used in analyzing the historical dynamics that affect our immediate political situation.

Capitalism can first be understood as a mode of production. The class relations that typify capitalism are very opaque when compared to other modes of production. A fundamental force driving capitalism is something called value. Products, when they are commodities, possess value. This value is measurable via the quantity of abstract labor socially necessary to produce said commodity. This quantity is the sum of quantities of labor, direct + indirect (transferred), used in the process of production⁴.

For example, let's assume (for the purpose of this crude demonstration) that it takes 8 hours to chop enough wood to build a table; this 8 hours is the time that is socially necessary to do this. Let’s also assume it takes 12 hours to forge the screws to build this table. Now, the wood pallets and screws are then sent to another department where the actual table is assembled. There, it takes 10 hours to build the table. According to Karl Marx, labor is a special commodity, as labor has the ability to simultaneously “preserve” or transfer value while transforming its subject into something altogether different – thereby adding value. In addition to the 10 hours of direct labor necessary to assemble the table from its given pieces, the finished product also embodies 20 hours of transferred labor. This gives us a new value of 30 hours of abstract labor (8 hours of wood-chopping + 10 hours of screw-making). We see here that coinciding with the labor process is the valorization process – the increase of value taking place when capital is combined with labor-power. This is the basis for capitalist accumulation.

Within this process, we can observe the presence of exchange and the necessity of exploitation. That is, the capitalist acquires the means of production (including the subject of labor) by means of exchange; a commodity is bought for the sole purpose of being sold again (albeit in a different form). The capitalist also acquires labor-power itself by way of exchange: the worker sells their labor-power in exchange for a wage. The worker (proletarian) advances their labor-power and only after the concrete labor has been completed are they paid the agreed upon amount. The wage is the “value” or price given to the labor before it is performed.

But as we noted before, the defining feature of labor-power which sets it apart from any other commodity is that it has the ability to consciously take a use-value (the screw for example) and, by combining it with another use-value (wood or the means of production), it qualitatively transforms it into a new use-value (the table) which satisfies an altogether different set of human needs⁵. By selling my labor-power for $14/hr at a shoe store, I make $112 a day, give or take. When I apply my labor-power to the subject of labor (the shoes), I am facilitating the realization of, say, $120 per pair of boots. Now, in order to meet the socially determined value of my concrete labor (socially necessary labor time), I have to sell 3 pairs of boots per hour – 24 pairs over an 8 hour period. That means for each hour I am facilitating the realization of $360; $2,880 per 8 hour working day. Let’s remember that I am paid $14/hr, $112/day. Obviously there is a large disparity between what I am paid compared to the value realized as profit, there’s a surplus (profit) that is taken by my employer – in the interest of not regurgitating the whole of Capital Vol.1, let’s call this surplus value. Surplus value is the basis of profit⁶.

When we apply our understanding of capitalism as a mode of production (or capitalist production) we start to realize that historical capitalism is a bit more complex than the dynamics of bourgeoisie / proletariat, constant capital + variable capital, etc etc. Presupposing my work in the shoe store is the production of the physical boots themselves, I’m at the very end of the process, facilitating the realization of accumulated value (transferred labor) into an actual profit. This is where we have to begin transitioning our analysis from capitalism as a mode of production to capitalism as a system; specifically capitalism as a system of social formations.

You see, before I can sell boots, those boots are made somewhere in Southeast Asia, Thailand, Laos, China, etc. Those boots are made in a factory by workers being paid far less than $5/hour for a total production cost of about $20 per pair of boots. This speaks to a few things about capitalism: it is a system of generalized commodity production, meaning each individual commodity is socially produced, or, produced by multiple people (on an assembly line for example). Capitalism is based on division of labor. In our world, there is a global division of labor. Even when capitalist production of a commodity occurs within a specific country, value travels globally by way of global commodity chains (global value chains). The international economy isn’t just about trade or the global circulation of capital, it’s firstly about the global nature of accumulation in its value-form. This is what Samir Amin called the law of worldwide value. This global division of labor has historically been expressed through a North-South relationship wherein the the “peripheral” nations of the Global South (or Third World) are super-exploited by the highly developed “core” nations of the North (North America, Western Europe, and Japan fall into this category). This relationship is at the root of the unequal development we can observe between these two respective blocs. Distinct from Lenin’s analysis of Imperialism (imperialist monopoly finance capital), this global division of labor is not a result of expanded markets, it is in fact, rather, a condition for capitalism’s existence and logical coherence as a system⁷ – it’s been present from jump.

Another truth which complicates things is the fact that in order for capitalist production to take place, it logically assumes:

1. that workers are separated from the means of production, thus forming a mass of available labor, and
2. Capitalists have a considerable amount of capital already and control the means of production (by way of private property rights)⁸.

This is where we again must shift from the abstract to the historical. Before the appearance of capitalism, people more or less had control of their labor-power (except for in slave economies where the enslaved were held as means of production in and of themselves). With subsistence agriculture, people performed labor in order to grow their own food and things necessary for subsistence. They had access to land in order to be able to do this. Even in tributary society (of which feudalism is an underdeveloped form) peasants had immediate access to the means of subsistence & production and labored to grow their own means of subsistence, having to pay a portion of their surplus as tribute to a landlord or equivalent authority who held dominion over the land. Before there could be “free” laborers available to work, producers had to be removed from their immediate means of subsistence and production – namely the land. While this process is more popularly known in organized Communism as so-called “primitive” or "primary" accumulation, to avoid some confusions I believe it to be more appropriate to understand it as Accumulation by Dispossession (ABD)⁹ – otherwise I will refer to the exploitation of enslaved labor directly. Nowhere in history is this process more focal than in the violent, genocidal dispossession of indigenous land as well as the genocidal enslavement of Africans and our removal from our native lands to the Americas¹⁰.

It’s clear this period fundamentally shaped the form historic capitalism would take both as a world system and within its corresponding social formations (of which the US is just one example). The gold found during the colonial plunder and mined by enslaved Natives, especially in South America, formed the foundation of Europe’s monetary system — an important precondition for capitalist exchange. The money gained from insurance on slave ships signaled the beginnings of bank capital and finance. The cotton picked by enslaved Africans embodied a huge mass of surplus-value and the corresponding profits contributed to what would become the potential-capital necessary for the boom of the British textile industry — the former consequently being the first major example of commercial production and the latter being the first of specifically capitalist production in the epoch of what would become historical capitalism. Already at its dawn, we see that capitalism had a global division of labor that would only become more prominent as time went on. This is what we mean by “system of social formations”. It’s not feasible to look at the rise of historical capitalism in Europe as a result of internal conditions; the transformation of the feudal European formations into capitalist-production-dominated social formations (nation-states as they’re commonly understood) is only one piece in the genesis of a global system.

While Marx thoroughly outlined capitalism as a mode of production, he is rightfully critiqued for the lacking presence of so-called “primary accumulation” in his analysis as an ongoing feature of capitalism. Interestingly, Marx’s own words can point in the direction of this ongoing status when he wrote,

“It may be called primitive accumulation, because it is the historical basis, instead of the historical result, of specifically capitalist production… all methods for raising the social productivity of labour that grow up on this basis are at the same time methods for the increased production of surplus-value or surplus product, which is in its turn the formative element of accumulation. They are, therefore, also methods for the production of capital by capital, or methods for its accelerated accumulation…”

Karl Marx, Capital Vol.1 (775)

By understanding capitalism in this way, we place the dispossessed, enslaved, and colonized at the center of our analysis. This is not to replace the category of class with nation, rather it is to situate the class struggle within a dynamic of national, racial, and gendered struggles taking place in the various discrete yet interconnected social formations of our world. By emphasizing the global nature of accumulation and the central importance of ongoing dispossession, we begin to espouse a Historical Materialism that is of more use to the projects of decolonization and decoloniality. In future writing I plan on analyzing the presence of Accumulation by Dispossession as an ongoing process within historical capitalism.

In a follow up to this essay I will be taking a closer look at the foundations of the so-called United States as a settler colonial social formation.

References and further reading:

The Law of Value and Historical Materialism by Samir Amin (large sections are reprinted and updated in his book Modern Imperialism, Monopoly Finance Capital, and Marx’s Law of Value)

Class and Nation: Historically and in the Current Crisis by Samir Amin

Capitalism as a System by Oliver C. Cox

Value, Price, and Profit by Karl Marx (a pretty accurate overview of what he went on to outline in Capital)

Capital Vol.1 by Karl Marx

Imperialism by V. I. Lenin

Red Skin, White Masks: Rejecting the Colonial Politics of Recognition by Glen Coulthard

Notes:

1. Cox, O. Capitalism as a System.
2. Amin, S. (n.d.). Modes of Production and Social Formations. Ufahamu: A Journal of African Studies.
3. Ibid.
4. Marx, K. Capital Vol.1 A Critique of Political Economy. See Chapter 1: The Commodity
5. Amin also summarizes Marx’s Law of Value in The Law of Value and Historical Materialism. Portions of this were reprinted in Modern Imperialism, Monopoly Finance Capital, and Marx’s Law of Value.
6. Marx, K. Capital Vol.1 A Critique of Political Economy. See pg.270 in Chapter 6: The Sale and Purchase of Labour-Power.
7. Capital Vol.1 establishes Marx’s Law of Value and explains the generation of Surplus-Value. In Capital Vol.1 and especially Vol.2 Marx speaks of profit in value terms and shows, in part, the conversion of the latter into the former.
8. To better understand Lenin’s theory of Imperialism and its relation to the world system today I would recommend Imperialism: The Highest Stage of Capitalism and Amin’s Modern Imperialism, Monopoly Finance Capital, and Marx’s Law of Value.
9. See Chapter 26 of Capital Vol.1, the section titled So-Called Primitive Accumulation. Here Marx attempts not to outline the emergence of Historical Capitalism, rather he attempts to show the necessary preconditions for Capitalism’s logical coherence as an abstract system. He does, however, make brief yet very crucial remarks on the central role of colonization, genocide, and slavery within the genesis of contemporary capitalism.
10. Accumulation by Dispossession (ABD) is a concept most often associated with the work of David Harvey. While I agree with Harvey’s identification of ABD as a recurring and ongoing feature of contemporary Capitalism, the concept has a slightly different place in my analysis. In my analysis, ABD is a phenomenon that operates somewhat uniquely across different social formations and is most present in those social formations defined by their Colonial and/or Settler Colonial histories. The United States is one such social formation, the ongoing presence of ABD is a central determinant in shaping the dynamics within which the class struggle takes place. Accumulation by Dispossession along with the extraction of colonial ground-rent (a concept to be expounded elsewhere) have the status of what some would call the “principal contradictions” that give shape and color to the social conflicts of this Settler Colonial social formation.
11. Marx, K. Capital Vol.1 Chapter 31 The Genesis of the Industrial Capitalist. It is clear from Marx’s writing that the colonization and enslavement of the Indigenous peoples of Africa and the Americas gave birth to historical Capitalism - rather than being symptoms of capitalism - and greatly shaped the development of the corresponding social formations.