Agrarian Roots of Capitalism

Capitalism was born in rural lands rather than in cities.

We have a misguided image of capitalism is in our minds. In fact, capitalism is not about the exchange of goods or expanding communication networks. There are certain market imperatives needed such as capital accumulation, competition, profit maximization for capitalism. Urban culture and commercial cities are not enough.

There should be efficient production, and extra-economic factors such as superior shipping, monopoly privileges, developed fiscal institutions for capitalism. There should be a mass-market and cheap product. The trade of luxury goods for the dominant class is just non-capitalist commerce.

16th-17th century Florence, Dutch, and France were failed transitions to capitalism. They only built international trade as a commercial arbitrage between separate markets. In Florence, it was collective lordship, and merchants organized production. Dutch pioneered banking; they had enormous wealth. But their wealth prevented their further development. In France, tax office states were extracting surplus labor from peasants as means of taxation. There was too much state autonomy.

In England, agrarian landlords and rentier aristocrats implied coercive power for a surplus of products and compelled tenants to reduce costs in the lands. There was a system of competitive rents. A competitive national market was created which is a corollary of capitalism and market society.

Property rights were also at the heart of capitalism. Parliamentary enclosures of 18th century England allowed people to fence the common land and have private property. They looked for ways to increase productivity, developed farming techniques for their own lands.

So, capitalism is a rupture in humans' interaction with nature. There should be efficient production. Labor productivity in the lands should be improved. Also, capitalism has a different idea of market-based profit maximization. Capitalism constantly needs to expand and accumulate.

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