By colonies, Marx means those countries with “virgin soils, colonised by free immigrants” (Marx 1906: 838, n. 1), such as America or Australia.
Marx is concerned with the theory of Edward Gibbon Wakefield (1796–1862), an Englishman who helped to colonise New Zealand, and the author of England and America (1834) and A View of the Art of Colonization (1849).
Marx describes Wakefield’s theory:
“It is the great merit of E. G. Wakefield to have discovered, not anything new about the Colonies, 1 but to have discovered in the Colonies the truth as to the conditions of capitalist production in the mother-country. As the system of protection at its origin attempted to manufacture capitalists artificially in the mother-country, so Wakefield's colonisation theory, which England tried for a time to enforce by Acts of Parliament, attempted to effect the manufacture of wage-workers in the Colonies. This he calls ‘systematic colonisation.’In colonies, free settlers often have plenty of land to settle on which provides them with an independent means of subsistence and means of production (Marx 1990: 933), and so this inhibits the development of a class of property-less workers:
First of all, Wakefield discovered that in the Colonies property in money, means of subsistence, machines and other means of production, does not as yet stamp a man as a capitalist if there be wanting the correlative—the wage-worker, the other man who is compelled to sell himself of his own free-will. He discovered that capital is not a thing, but a social relation between persons, established by the instrumentality of things.” (Marx 1906: 839).
“‘If,’ says Wakefield, ‘all the members of the society are supposed to possess equal portions of capital ... no man would have a motive for accumulating more capital than he could use with his own hands. This is to some extent the case in new American settlements, where a passion for owning land prevents the existence of a class of labourers for hire.’ So long, therefore, as the labourer can accumulate for himself—and this he can do so long as he remains possessor of his means of production—capitalist accumulation and the capitalistic mode of production are impossible. The class of wage-labourers, essential to these, is wanting.” (Marx 1906: 840).For Marx, the essence of capitalism production is as follows:
“We have seen that the expropriation of the mass of the people from the soil forms the basis of the capitalist mode of production. The essence of a free colony, on the contrary, consists in this — that the bulk of the soil is still public property, and every settler on it therefore can turn part of it into his private property and individual means of production, without hindering the later settlers in the same operation. This is the secret both of the prosperity of the colonies and of their inveterate vice—opposition to the establishment of capital. ‘Where land is very cheap and all men are free, where one who so pleases can easily obtain a piece of land for himself, not only is labour very dear, as respects the labourer’s share of the produce, but the difficulty is to obtain combined labour at any price.’” (Marx 1906: 841–842).
“The great beauty of capitalist production consists in this—that it not only constantly reproduces the wage-worker as wage-worker, but produces always, in proportion to the accumulation of capital, a relative surplus population of wageworkers. Thus the law of supply and demand of labour is kept in the right rut, the oscillation of wages is penned within limits satisfactory to capitalist exploitation, and lastly, the social dependence of the labourer on the capitalist, that indispensable requisite, is secured; an unmistakeable relation of dependence, which the smug political economist, at home, in the mother country, can transmogrify into one of free contract between buyer and seller, between equally independent owners of commodities, the owner of the commodity capital and the owner of the commodity labour. But in the colonies this pretty fancy is torn asunder. The absolute population here increases much more quickly than in the mother-country, because many labourers enter this world as ready-made adults, and yet the labour market is always understocked. The law of the supply and demand of labour falls to pieces. On the one hand, the old world constantly throws in capital, thirsting after exploitation and ‘abstinence;’ on the other, the regular reproduction of the wage-labourer as wage-labourer comes into collision with impediments the most impertinent and in part invincible. What becomes of the production of wage-labourers, supernumerary in proportion to the accumulation of capital? The wage-worker of to-day is- to-morrow an independent peasant, or artisan, working for himself. He vanishes from the labour-market, but not into the workhouse. This constant transformation of the wage-labourers into independent producers, who work for themselves instead of for capital, and enrich themselves instead of the capitalist gentry, reacts in its turn very perversely on the conditions of the labour-market. Not only does the degree of exploitation of the wage-labourer remain indecently low. The wage-labourer loses into the bargain, along with the relation of dependence, also the sentiment of dependence on the abstemious capitalist.” (Marx 1906: 842–843).So the dependence of workers on capitalists “must be created by artificial means” (Marx 1906: 844).
Marx thinks the solution was this:
“How, then, to heal the anti-capitalistic cancer of the colonies? If men were willing, at a blow, to turn all the soil from public into private property, they would destroy certainly the root of the evil, but also—the colonies. The trick is how to kill two birds with one stone. Let the Government put upon the virgin soil an artificial price, independent of the law of supply and demand, a price that compels the immigrant to work a long time for wages before he can earn enough money to buy land, and turn himself into an independent peasant. The funds resulting from the sale of land at a price relatively prohibitory for the wage-workers, this fund of money extorted from the wages of labour by violation of the sacred law of supply and demand, the Government is to employ, on the other hand, in proportion as it grows, to import have-nothings from Europe into the colonies, and thus keep the wage-labour market full for the capitalists. Under these circumstances, tout sera pour le mieux dans le meilleur des mondes possibles. This is the great secret of ‘systematic colonisation.’ By this plan, Wakefield cries in triumph, ‘the supply of labour must be constant and regular, because, first, as no labourer would be able to procure land until he had worked for money, all immigrant labourers, working for a time for wages and in combination, would produce capital for the employment of more labourers; secondly, because every labourer who left off working for wages and became a landowner, would, by purchasing land, provide a fund for bringing fresh labour to the colony.’ The price of the soil imposed by the State must, of course, be a ‘sufficient price’—i.e., so high ‘as to prevent the labourers from becoming independent landowners until others had followed to take their place.’ This ‘sufficient price for the land’ is nothing but a euphemistic circumlocution for the ransom which the labourer pays to the capitalist for leave to retire from the wage-labour market to the land.” (Marx 1906: 846).Marx thinks this was put into effect by England:
“It is very characteristic that the English Government for years practised this method of ‘primitive accumulation,’ prescribed by Mr. Wakefield expressly for the use of the colonies. The fiasco was, of course, as complete as that of Sir Robert Peel’s Bank Act. The stream of emigration was only diverted from the English colonies to the United States. Meanwhile, the advance of capitalistic production in Europe, accompanied by increasing Government pressure, has rendered Wakefield’s recipe superfluous. On the one hand, the enormous and ceaseless stream of men, year after year driven upon America, leaves behind a stationary sediment in the east of the United States, the wave of immigration from Europe throwing men on the labour market there more rapidly than the wave of emigration westwards can wash them away. On the other hand, the American Civil War brought in its train a colossal national debt, and, with it, pressure of taxes, the rise of the vilest financial aristocracy, the squandering of a huge part of the public land on speculative companies for the exploitation of railways, mines, &c, in brief, the most rapid centralisation of capital. The great republic has, therefore, ceased to be the promised land for emigrant labourers. Capitalistic production advances there with giant strides, even though the lowering of wages and the dependence of the wage-worker are yet far from being brought down to the normal European level. The shameless lavishing of uncultivated colonial land on aristocrats and capitalists by the Government, so loudly denounced even by Wakefield, has produced, especially in Australia, in conjunction with the stream of men that the gold-diggings attract, and with the competition that the importation of English commodities causes even to the smallest artisan, an ample ‘relative surplus labouring population,’ so that almost every mail brings the Job’s news of a ‘glut of the Australian labour-market,’ and prostitution in some places there flourishes as wantonly as in the London Haymarket.This ends the final chapter of Capital.
However, we are not concerned here with the condition of the colonies. The only thing that interests us is the secret discovered in the new world by the political economy of the old world, and proclaimed on the house-tops: that the capitalist mode of production and accumulation, and therefore capitalist private property, have for their fundamental condition the annihilation of self-earned private property; in other words, the expropriation of the labourer.” (Marx 1906: 847–848).
Marx’s passage above verges on conspiracy theory. For example, consider the idea that the “English Government for years practised this method of ‘primitive accumulation,’ prescribed by Mr. Wakefield expressly for the use of the colonies” (Marx 1906: 847).
Wakefield’s colonial theories seem to have been most influential in the private-sector New Zealand Company, but not in British government circles.
When Wakefield went to New Zealand in 1853, he discovered that the governor George Grey did not agree with his colonial theories as pursued by the New Zealand Company:
“Wakefield went on the attack almost as soon as he landed [sc. in Wellington, New Zealand]. He took issue with George Grey on his policy on land sales. Grey was in favour of selling land very cheaply to encourage the flow of settlers. Wakefield wanted to keep the price of land high so that the growth of the colony could be financed by land sales, it was a fundamental tenet of his colonial theory. He and Sewell applied for an injunction to prevent the Commissioner of Crown Lands selling any further lands under Governor Grey’s regulations.”But George Grey prevailed against Wakefield. So the British government policy in New Zealand was contrary to Marx’s theory (as taken from Wakefield), and the reduction in land prices had been directed from the government in London by Earl Grey (Stuart 1971: 28). Nevertheless, capitalist agriculture and capitalism generally proceeded to develop in New Zealand, and so much so that New Zealand had a very high real per capita GDP by the early 20th century.
Finally, the idea that America “ceased to be the promised land for emigrant labourers” by 1867 is absurd, given the opening up and settlement of the West from the 1870s to the 1890s.
Brewer, Anthony. 1984. A Guide to Marx’s Capital. Cambridge University Press, Cambridge.
Harvey, David. 2010. A Companion to Marx’s Capital. Verso, London and New York.
Marx, Karl. 1906. Capital. A Critique of Political Economy (vol. 1; rev. trans. by Ernest Untermann from 4th German edn.). The Modern Library, New York.
Marx, Karl. 1990. Capital. A Critique of Political Economy. Volume One (trans. Ben Fowkes). Penguin Books, London.
Stuart, Peter A. 1971. Edward Gibbon Wakefield in New Zealand: His Political Career 1853–4. Price Milburn, Wellington.
Wakefield, Edward Gibbon. 1834. England and America. A Comparison of the Social and Political State of Both Nations. Harper & Brothers, New York.
Wakefield, Edward Gibbon. 1849. A View of the Art of Colonization, with Present Reference to the British Empire; In letters between a Statesman and a Colonist. J. W. Parker, London.