III. ch. 3.)

THE HISTORICAL DEVELOPMENT OP COMMERCIAL CAPITAL. 233
as intermediary; and this is one of the main sources from whence its origin is derived. But this monopoly of the carrying trade - and consequently the latter itself diminishes in the same measure in which the economic de- velopment of the nations progresses, which that monopoly exploited. — A typical example of the way in which com- mercial capital goes about its business in those countries in which it directly dominates production is, moreover, not only furnished by colonisation in general, but especially by the methods of the old Dutch East India Company.
At first sight, commercial profit appears impossible as long as products are sold at their value. For the law of trade is: buy cheap and sell dear; and not the exchange of equal values. The quantity in which products are ex- changed is at first quite fortuitous. But if products are continously exchanged, and therefore regularly produced in view of exchange, this state of things gradually ceases. But, at first, the fortuitous nature of the products exchanged does not cease in so far as producers and consumers are concerned; but only in regard to the intermediary between the two, /. e. the tradesman, who compares the money prices and pockets the difference.
The trade of the first independent, highly developed trading peoples and towns in ancient times was based, as simple carrying trade, on the lack of civilisation of the pro- ducing peoples, between whom the former served as inter- mediaries.
In the preliminary phases of capitalist society — L e. in Western Europe in the Middle Ages — trade dominates industry; the contrary is the case in modern nations. Trade naturally reacts more or less on the communities between which it is carried on; it subordinates production more and more to exchange-value, by rendering the means of enjoy- ment and subsistence itself dependent on sale rather than on the direct use of the product. It thereby puts an end to the conditions formerly prevailing. It increases the cir- culation of money. It not only seizes hold of the surplus production; it gradually invades the process of production, and renders one after another whole branches of production dependent on itself. Nevertheless, this 'dissolving influence depends to a large extent on the nature of the producing community.
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234
long as commercial capital s intenikv
for the exchange of produds between undeveloped commu- nities, commercial profit does not only scern to consist of overreaching and fraud; but, as a matter of fact, it derives to a large extent its origin from these sources. When com- mercial capital occupies a position of unquestioned dency, it everywhere constitutes a system of plunder; even as its development in all trading peoples, both ancient and modern, is bound-up with extortion, piracy, slave stealing, colonial oppression. Thus it was in Carthage and Rome, and thus it was subsequently with the Venetians, Portuguese, Dutch, etc.
The development of trade and commercial capital in- creases everywhere the tendency of production to evolve in the direction of exchange-value; at the same time it widens the scope of production and its. diversity, cosmopolitises it, developes money into world money. Trade thus exercises everywhere a more or less dissolving influence on those productive organisations which it finds already in existence, and which, in all their various forms, were mainly directed towards use-value. The extent, however, to which this pro- cess of dissolution is carried, depends in the first place on the solidity and inner structure of the former system of production. And the final result of the process — /. /'. what sort of new system eventually replaces the old one - does not depend on trade, but on the nature of the old system itself. In the ancient world the consequence of trade and of the development of commercial capital was in- variably slavery; according to what the starting-point of such development was, sometimes the mere transformation of a patriarchal system of slavery, based on the direct pro- duction of means of subsistence, into one based on the production of surplus-value. In modern times, on the con- trary, the effect of the development of commercial capital is the capitalist system of production. It follows that these results themselves were also influenced by other circum-
3, different from those accompanying the development
of commercial capital.
It is in the nature of things that as soon as urban industry, as such, has been separated from agriculture, ilii- products of the former should be, from the beginning, com- modities, and that their sale should thus require the medium
IIU IIIS/OR/CAL I)EVELOPMf:M
of trade. In so far, it is evident that trade leans for support on the development of town life, and that, on the other hand, urban development is dependent on trade. Neverthe- less, how far industrial development goes hand in hand with such a process depends on entirely different circum- stances. Already in the later days of the Republic com- mercial capital in Rome was more developed than it had ever been before in the ancient world; but there was no accompanying progress of industrial development. Where- as in Corinth and other Greek towns in Europe and Asia Minor, a highly developed industry accompanied the deve- lopment of trade. On the other hand, quite contrary to the conditions of urban development, what we may call the spirit of trade and the development of commercial capital is often 10 be observed among nomadic peoples.
There can be no doubt -- and precisely this fact has given rise to radica^y wrong views — that the great trans- formations in the 16th and 17th centuries, which in con- sequence of the geographic discoveries took place in trade and which greatly accelerated the development of commer- cial capita], constituted a decisive factor in effecting the transition from the feudal to the capitalist mode of produc- tion. The sudden extension of the world market, the diver- sity of the .commodities circulated, the competition between the European nations for the possession of Asiatic products and American treasures, the colonial system: all these con- tributed in a vast measure to the bursting of the chains placed by feudalism on production. Nevertheless the mo- dern mode of production, in its first phase -- the manu- facturing period - - was only developed there where the conditions for such a development had been engendered during the Middle Ages. Compare, for instance, Holland with Portugal.1 And if, in the 16th century — and in
i How greatly predominant, in the development in Holland, and apart from other circumstances, the basis wa-s which had been formed previously in the shape of fishery, manufacture, and agriculture — this fact was already pointed out by writers in the 18th century. — Contrary to the views formerly current, and according to which the extent and ' importance of Asiatic, ancient, and Middle Age trade were underestimated, I it has become the fashion to greatly overestimate them. The best cure for this notion is to consider the English exports and imports at the beginning of the 18th century, and to compare them with those at the present time. And yet the former were incomparably larger than any of those of any older trading people.
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236 \CTER XXI.
part, still, in the 17th — the sudden extension of trade and the opening-up of a new world market exerted decisive in- fluence on the downfall of the old and the rise of the capi- talist mode of production, this took place, inversely, on the basis of that capitalist mode, once it had come into being. The world market itself constitutes the foundation of this mode of production. On the other hand, the necessity of constantly increasing the scale of production, inherent to the capitalist system, causes a continuous expansion of the world market, so that, in this case, it is not trade which revolutionises industry, but industry which perpetually revo- lutionises trade. The supremacy of trade is now bound up with the degree of predominance of the conditions of mo- dern industry. We need only compare, for example, Eng- land and Holland. The history of the decline of Holland as the leading trading nation is the history of the subordi- nation of commercial capital to industrial capital. The re- sistance offered to the dissolving influence of trade by the inner cohesion and structure of the national, pre-capitalistic systems of production, is clearly manifested in the relations maintained by England with India and China. Here, the combination of agriculture on a small scale and domestic industry constitutes the broad basis of the mode of produc- tion; to this must be added, in India, the village community based on collective property of the soil, which community was likewise the original form of the economic organisa- tion in China. In India, the English applied simultaneously political and economic pressure, alike as rulers and as owners of ground rent, in order to destroy these little eco- nomic communities. In this case, if English trade has been able to influence the system of production, it is only in so far as the cheaper prices of English goods succeed in eliminating the native spinning and weaving industries and thus rend the village communities asunder. Even then, this process of dissolution is a very slow and gradual one. In China, where direct political pressure is not available, the English have been even less successful. The great sa- ving of time and labour due to the direct combination of agriculture and manufacture, offers here the stubbornest resistance to the invasion of the products of modern indus- try, whose prices are increased by the costs of the pro- cess of circulation which everywhere breaks through it.
THE HISTORICAL DEVELOPMENT OF COMMERCIAL CAPITAL 237.
The transition from the feudal mode of production takes place in a twofold manner. Either the producer him- self becomes tradesman and capitalist — this is the really revolutionary manner. Or the tradesman takes direct pos^ session of the process of production. However much this last manner of transition may, from a historical point of view, be regarded as such — e. g. as in the case of the English clothier of the 17th century, who sells the wool to, and buys the cloth from, those weavers who have remain- ed independent — it none the less does not bring about by itself the transformation of the old mode of production; rather does it maintain the latter as the condition precedent of its own existence. For instance, up to the middle of the 19th century, in the French silk industry, as in the English stocking and lace industries, the manufacturer is only nominally manufacturer. In reality he is a mere tradesman, who let the weavers continue their work as before, each one for himself in his little workshop; and he did but exercise the functions of a tradesman for whom, as a matter of fact, they performed their labour. The same held good of the ribbon manufacture, lace-trimming and silk-weaving industries on the banks of the Rhine This system is everywhere an impediment to the capitalist mode of production, properly so called, and disappears in the measure of the latter's development. Without transforming the mode of production, that system does but render the position of the labourer worse, turns him into a mere wage- labourer and proletarian under worse conditions than those prevailing among the labourers working directly under capital, and appropriates his surplus-labour on the basis of the old mode of production. Except for a few points of difference, the same state of affairs prevails (1865) in a section of the London furniture industry. The latter is divided up into a number of business branches quite inde- pendent of one another. One branch only manufactures chairs, another tables, a third cupboards, etc. But these various branches are themselves carried-on on a more or less handicraft basis, by a master in a small way and a few apprentices. None the less is the production too exten- sive from these branches to be able to work direct for private individuals. Their clients are the owners of furni- ture shops. On Saturdays the master goes to the latter
238 ClIAl'IF.R XXL
and sells his product; whereby seller and buyer bargain over the price just as people in a pawnshop bargain over the loan to be advanced on a given pledge. These masters must sell their products weekly, if only to be able to buy raw material again for the next week, and to pay out wages. Under these circumstances they are in reality but intermediaries between the tradesman and their own work- ers. The tradesman is the real capitalist, who pockets the greater part of the surplus value. The position is similar to that when the transition of the branches which had for- merly been handicraft-worked, or had been side-branches of rural industry, to the stage of manufacture took place. In Ihe measure of the technical level attained by such a small workshop — there where it already employs itself such mach- ines as admit of a handicraft organisation — (he transition to modern industry takes place. Instead of by hand, the machine is propelled by steam, as this has recently (1865) happened in the English stocking industry.
The transition thus takes place in three ways. Firstly, the tradesman becomes, directly, an industrial producer; this is the case with the branches of industry which have devel- oped out of trade — especially with the industry of luxury articles, which was imported by the tradespeople from abroad along with the raw materials and labourers, r. g., in the lf> th century, into Italy from Con- stantinople. Secondly, the tradesman makes of the small master his intermediary, or he buys direct from the self-producer; he lets the latter remain nomi- nally independent, and does not alter his system <>i duction. Thirdly, the industrial producer becomes a ii man and produces wholesale for the purpose of trade.
In the Middle Ages the tradesman does but set in movement, so to speak, the commodities produced either by the members of the guilds, or hy the peasantry. The tradesman becomes an industrial producer, or, rather, lie lets (he handicraft-worked and especially the small rural .industry perform labour for him. On the other hand, the producer becomes trader. For instance, instead of i ing his wool little by little in small portions from the tradesman, and working with his apprentices for the la tier the clothweaver buys himself wool or yarn, and sells his cloth to the tradesman. And now the clothweaver produces
TlitL HISTORICAL DEVELOPMENT Of COMMERCIAL CAPITAL. 239
for the trading world, instead for the individual trades- man or for definite clients. The producer is himself a trader. Originally, trade was the condition precedent for transforming the guild-organised and rural domestic branches of industry, and also feudal agriculture, into capi- talist undertakings. It creates the market for the product, it supplies new raw and auxiliary materials, and it thus opens out branches of production which are, from the start, founded on trade. As soon as manufacture, and still more modern industry, have developed to a certain extent, they create in turn the market, which they conquer by means of their commodities. Trade now becomes the servant of industrial production, for which the constant extension of the market is indispensable. Mass production on an ever increasing scale overflows the available market, and prompts thus to a continual widening-out of this market. This mass production is not limited by trade (in so far as the latter is but the expression of existing demand), but by the size of the functioning capital and the degree of development of the productive force of labour. The pro- ductive capitalist has the world market continually before him, and compares — and must compare — his own cost prices with the market prices, not only at home, but in the whole world. In the former period, this comparison falls almost entirely upon the shoulders of the merchants and thereby secures for merchants capital the supremacy over industrial capital.
240