Notes Toward a More Global History of Capitalism

Reading Marx's Capital in India and China

Andrew Liu

July 6, 2020

I.

How do you write a history of capitalism in the unlikely site of the tea-growing hinterlands of China and India—and, more broadly, for other places marginal to the North Atlantic-centered world economy?

These were the fundamental questions driving the research and writing of my book, Tea War: A History of Capitalism in India and China (Yale University Press, 2020—discount code: YAB99). It charts the competition between the Chinese and colonial Indian tea industries across the nineteenth and twentieth centuries, involving wars of free trade, the mobilization of hundred of thousands of workers, and the twentieth-century rise of nationalist movements across Asia who rejected the terms of foreign imperialism. Arising from the ashes of the earlier Anglo-Chinese opium wars, it was a rivalry described by one British planter as “the tea war that has been and is still being waged.”

For a half-century now, William Sewell has argued, the “all-consuming” issue for economic historians has been how to explain the quantitative relationship of economic growth, rather than qualitative changes in “forms of economic life.”¹ This premise has presumed similar evolutionary steps in all societies, especially technological innovations such as the steam engine and the proletarianization of society. In this vision, shared across the neoclassicals and “orthodox” Marxists, capitalism entails the commodification of money, land, and labor, traits abstracted from the experience of the North Alantic world. “The classical proletariat,” Mike Davis recently wrote, always meant “the European and North American working classes, considered in the period 1838-1921.”²

By contrast, the “tea war” of Asia pitted two forms of so-called traditional and unfree labor against one another. Chinese tea was powered by independent family farms and seasonal workers from poor villages, while the Indian industry relied upon penal contracts that bound migrant “coolies” to their employers under threat of imprisonment. Both industries were highly labor intensive. For past scholars, the Asian tea trades may have been profitable, but they were not “capitalist.”

In order to write a history of capitalism in rural China and India, then, we need to figure out how to write a history of capitalism in the colonial world as a whole, looking beyond the visible benchmarks of proletarianization and mechanization. In the following short essay, I set aside the finer empirical details of my research, which I have described elsewhere; instead, in the spirit of this journal, I briefly sketch out a reinterpretation of Marx’s Capital that has guided my thinking in this broader endeavor. I am hopeful that readers will indulge me in this close reading of Marx’s classic work, engaging in good faith with my aim of writing a more flexible and globally-oriented account of capitalism’s history.

II.

For most economic historians, including within the Marxist tradition, capitalism was historically distinguished by its technical capacities, equated with an outburst of greater productivity. But I believe Marx was critical of this technicist view. The greater proliferation of things (“use-values”) was, for Marx, only the expression of a deeper and more fundamental transformation, what he called the “universalization” of the “commodity-form,” in which the end-goal of society was not the endless expansion of things but of profit (“exchange-value”), part of a historically novel form of wealth called “value.”

In the opening chapter of Capital, Marx explained that the value of commodities in capitalist societies was tied to the average amounts of human labor needed to produce them, mediated through market competition. Such relationships were a departure from earlier eras, in which the the value of goods was determined by non-market factors, such as monopolies, the seasonality of natural cycles, customs, arbitrage, etc. Marx acknowledged that his analysis was not entirely original, though, attributing its foundations to the British political economic tradition, from Adam Smith’s Wealth of Nations (1776), onwards. Yet he also chided political economy for accepting the “value-form” as a timeless state of nature. Yes, by his day, human productivity had become a guiding principle of everyday life. But could we expect the same to hold true of all earlier periods?

It is “value,” and the subtle, underlying dynamics of accumulation, that best enable us to understand capitalism more holistically, in all its historical dimensions, including the realms of ideology, culture, and social relations.

Marx thought clearly not. Instead, “value” was a social dynamic specific to the modern world. And it was these predominant tendencies of “value,” and not technical innovation, that distinguished the capitalist era from its predecessors. By the time of the Victorian age, society was now shaped by the “universalization” of the “commodity-form”: seemingly everything was now for sale and thereby subjected to competitive pressures towards efficiency.

What was the historical threshold for such a transformation? In the running dialogue in the margins of Capital, we learn that Marx’s answer was the emergence of hired labor for the production of goods. Now, the pivotal status of wage labor to the history of capitalism is a common argument among economic historians, especially those shaped by the work of Robert Brenner—we’re largely in agreement there³. But the reasoning why wage labor mattered so much, I believe, deserves a second look.

For most historians, wage labor was historically important because it was more efficient than its counterparts of slavery, serfdom, and peasantry from a technical standpoint. Rather than provide shelter and food to unfree workers, managers could simply fire and hire them at will. Or, because workers divorced from the land faced higher costs of living, they demanded higher wages, which in turn drove innovation.⁴

This technicist perspective is certainly important, but it misses a critical aspect of Marx’s historical argument. As he wrote in chapter 6 of Capital: “this one historical pre-condition [of wage labor] comprises a world’s history,” continuing in the footnotes that it was “only from this moment that the commodity-form of the products of labour becomes universal.”⁵

For Marx, the most crucial consequence of wage labor was that human labor itself had now become a commodity, and thus commodities now animated the entire cycle of capital accumulation from beginning to end: purchasing labor in order to produce goods in order to earn a profit in order to hire more labor. In earlier formations, people may have made and sold commodities, but the labor behind them was acquired through non-commercial measures, secured through coercion, family obligation, or independent production. The commodification of labor changed that. As Marx wrote in an earlier draft known as the Resultate:⁶:

[W]hen a worker’s labour-power has been converted into a commodity for him…. Only then does all produce become commodity and the objective conditions of each and every sphere of production into it as commodities themselves. Only on the basis of capitalist production does the commodity actually become the universal elementary form of wealth.⁷

In short, the more human societies depended upon the sale of labor and purchase of goods for survival, the more their activities were folded into the logic of commodification and “value.” The prices of goods thereby settled into regular patterns based upon the unconscious calculation of the average amounts of labor needed to produce them. There naturally emerged impersonal, competitive pressures to cut production costs, often through innovations in technique and organization—but not always. And while it is easy to connect the dots from this abstract social logic to concrete technical improvements, economic histories that fixate on the technical dimension of industrialization by contrast rarely have much to say about the underlying social dynamic of value. But it is “value,” and the subtle, underlying dynamics of accumulation that enables us to understand capitalism more holistically, in all its historical dimensions, including the realms of ideology, culture, and social relations: what Sewell called “economic life.” For Marx, then, the transformative power of the “commodity form” was a more fundamental feature of the capitalist era than the spectacular innovations that historians have long equated with the substance of capitalism itself.

III.

Admittedly, this reading of Marx may sound too abstract for some readers. For that very reason, however, I find it more flexible and useful for writing global history. Rather than a modular stage theory based upon the experience of England, from dispossession to proletarianization to mechanization, this reading emphasizes the abstract and qualitative dimensions of capitalist transformation on a world scale, to be concretized through empirical analyses. In particular, it opens up the possibility that modern accumulation could have reshaped and subsumed social arrangements such as fin-de-siècle China and India—which did not tidily fit the model of free wage labor—in historically specific ways.

Unfree labor and independent agriculture dated back to ancient societies, but both could be transformed by capitalism’s modern dynamics once incorporated into a global market in which the wage was predominant.

One valuable entry-point is to look more closely at Marx’s idea of the “universal,” found in the two passages above describing the universality of the commodity-form of labor. At first glance, such a proposition appears hyperbolic and unrealistic. Surely we could locate non-wage labor forms of production even today—such as self-employed, independent farmers selling their goods at local markets—much less in the nineteenth century? However, I believe that Marx’s work treated the term “universal” (allgemeine) not in the ordinary sense as something omnipresent but as something “general”—another translation of allgemeine—with the specific philosophical meaning that what is “general” is predominant but not exclusive of others.

The clearest articulation of what allgemeine meant for Marx’s history appears in his 1857 introduction draft, later republished as part of the Grundrisse. There, he wrote:

In all forms of society there is one specific kind of production which predominates over the rest, whose relations thus assign rank and influence to the others. It is a general illumination (eine allgemeine Beleuchtung) which bathes all the other colours and modifies their particularity.¹⁰

What made wage labor a “general illumination” was not that it elbowed out all other labor forms but only that it “predominate[d] over the rest.” Earlier, pastoral agriculture had marginalized hunters and fishing people, and similarly the industrial economy founded upon wage labor did not eradicate older modes but subordinated them to itself. “In bourgeois society,” Marx wrote, “[a]griculture more and more becomes merely a branch of industry, and is entirely dominated by capital.”

Once integrated into a wage labor-driven global economy—namely, being pitted into competition with more efficient rivals—those seemingly precapitalist “relics” were forced to take on the characteristics of capitalist development. Take the two archetypes of “precapitalist” labor characteristic of the Asian tea trades: unfree “coolies” and independent peasantry. Marx famously wrote on the enslavement of African workers that the “over-working of the Negro… became a factor in a calculated and calculating system.”¹¹ Meantime, independent artisans had also begun to regard themselves as both the owners of capital and the worker, as both employer and employee in a capitalist relationship: “the independent peasant or handicraftsman is cut into two.”¹² With the generalization of the commodity-form, such arrangements could still be subjected to the dynamic of value (and class) outlined in Capital, even if they deviated from the proletarian ideal type.

I found further support for this reading by taking a closer look at Marx’s peculiar phrase “specifically capitalist mode of production,” which appears throughout Capital. We have heard “capitalist mode of production” enough times to know that it meant something like industrialization by way of wage labor and mechanization. But what about the phrase “specifically capitalist”? I believe it was a historicizing term. The cotton mills of nineteenth-century England were specific to the bourgeois mode of production and its novel commodification of labor, unthinkable in earlier centuries. But if the mills were “specifically capitalist,” then Marx’s distinction also created room for producers who were “non-specifically” capitalist, in that they were compatible with, and could exist according to, different, pre-capitalist social logics.¹³

Again, unfree labor and independent agriculture dated back to ancient societies, but both could be transformed by capitalism’s modern dynamics once incorporated into a global market in which the wage was predominant.

Crucial to this was the suggestion that although slave, serf, and independent peasant labor were not acquired through a straightforward proletarian arrangement, they could nevertheless become dependent upon producing for, and earning payment from, the marketplace for survival. This was the strict economic definition of “wage labor” meant by by Marx: “capital-positing, capital-producing labour.”¹⁴ The tea-growing families and small workshops in China, for instance, relied upon advance loans at the start of each spring to survive the season, and they relied upon tea profits for nearly the entirety of their income. The Indian tea plantations were capitalist enterprises always on the brink of debt, and the unfree Assam “coolies” were constantly measured for output and efficiency.¹⁵

These ideas point us to aspects of capitalism’s history beyond the measurement of growth and innovation.

This is not to deny that, from the standpoint of efficiency, these older forms remained technically inferior to a fully commodified system. But economic history’s technicist fixation misses out on the immense pressures exerted on colonial societies. Rather than innovation, competition often took the form of greater exploitation: physically beating “coolies” in Assam, pushing Chinese workers to work days without sleep, and across Asia devising means to pay employees, especially women, as little as possible. These, too, are part of capitalism’s mixed legacy.

We thus wind up with a combination of capitalist social dynamics but with the absence of revolutionary capitalist technology. In truth, this permutation is not entirely unfamiliar to past generations. Max Weber wrote that the eighteenth-century US could claim a “capitalist spirit” that was separate from actual “capitalist development.”¹⁶ Among historians, the new history of capitalism literature has confirmed Marx’s hypothesis that US slavery faced intensifying market pressures, with planters rationalizing inputs and outputs. Conversely, the literature on the “industrious revolutions” of early modern Europe and East Asia have indicated that market-dependent families began to allocate labor in revenue-maximizing ways, absorbed into the broader pattern of proletarianization throughout their respective societies.¹⁷

IV.

These ideas point us to the qualitative aspects of capitalism’s history beyond the quantitative measurement of growth and innovation. Given the paucity of obvious technological markers in the tea districts of China and India, I found it more helpful to focus on the emergence of new, abstract social dynamics operating beneath the surface in rural Asia, manifest in changing labor practices and ideology.¹⁸

I examined the former by looking at novel notions of work-time in the tea plantations and gardens. For instance, in the Chinese province of Anhui, private handbooks and ethnographic surveys documented how factory managers measured and regulated the working-time of their employees by using an archaic timekeeping device: incense sticks that burned at a slow, regular rate of about forty minutes per stick. They used these crude devices to determine an average time to complete a task, such as roasting, rolling, or packing leaves, then rewarded faster workers and punished those who were “slow and clumsy.” In Assam, India, similarly, British planters distributed work through a task-based system known as nirikh, tied to a shifting average of work per temporal unit, e.g., hoeing a given area of land within six hours. Planters continually pushed the quotas higher, boasting by the new century that they had raised productivity by 20 percent in ten years. They did so, one proclaimed, by “taxing to the utmost the working power of the coolies.”

As for ideology, I connect such practices to new conceptions of economic thought among British, Chinese, and Indian thinkers trying to make sense of the tumultuous global tea trade. In a pattern mirroring the trajectory of classical political economy before them—the same tradition Marx singled out—writers in Asia departed from older ideas premised upon the balance of trade or control over land in favor of a new emphasis on the productivity of human labor as a commodity. In China, the late Qing official Chen Chi (1855-1900) criticized Legalist ideas (ca. 453-221 BCE) centered on agriculture as well as mercantilist ideas popular among his contemporaries, who were obsessed with trade imbalances. In Chen’s treatise on political economy, modeled on the school of J.S. Mill, he admonished unproductive merchants and tax collectors as “users of wealth [caiyongzhe], movers [yi] and looters [duo] of wealth.” Reversing the fortunes of the tea trade would require Chinese peasants to embrace a new “principle for producing wealth [shengcai zhi dao],” as Chen emphasized the creative potential of human labor: “where the ground originally had nothing, where among humans originally there was nothing, suddenly there are things.”

In India, meanwhile, it was the unfree nature of employment that garnered attention from Indian nationalists. Over one-half million “coolie” workers had been recruited from central and eastern India and employed through penal contracts. Economist R.C. Dutt declared that “the tea-gardens should obtain workers from the teeming labour markets of India under the ordinary laws of demand and supply.” Nationalists criticized the penal contract not through a condemnation of European greed but rather because they now viewed labor as commodity that should be sold freely on the marketplace. Workers offering their labor as capital deserved the same liberty of exchange as any other merchant. Indian writers thus echoed the language of abolitionists in the Atlantic world by criticizing “slavelike” conditions through a normative defense of capitalism itself.

What these respective trajectories illustrated was not that Asian economic thought was derivative of an European original; rather, political economy, originally seen as a foreign body of ideas, gradually attained widespread plausibility in Asia and elsewhere as a set of universal and natural principles corresponding to the ongoing expansion of capitalist production and waged employment into new territories worldwide.

As the Chinese and Indian tea districts grew more integrated into the social dynamics of global accumulation, then, economic thinkers in Asia articulated and borrowed concepts from the canon of classical political economy. Originally, Marx argued, such ideas in consciousness corresponded with the generalization of the commodity-form in European society. “It was no mere coincidence,” Maxine Berg wrote, “that industrialisation and the emergence of political economy occurred at virtually the same time.”⁸ Or, as Susan Buck-Morss put it, “[t]he economy, when it was discovered, was already capitalist.”⁹ It is noteworthy, then, that these ideas were lifted from the most industrialized societies of the Atlantic world yet could resonate with the lived experiences of writers observing life in the hinterlands of China and India. The plausibility of Euro-American political economy in rural Asia, I argue, indexed the latter’s immersion within the social dynamics of modern accumulation. In spite of a lack of obvious technical markers, Chinese and Indian producers faced the same pressures of competition and commodification that had been naturalized in classical political economy’s discussion of “value.” What these respective trajectories illustrated was not that Asian economic thought was derivative of an European original; rather, political economy, originally seen as a foreign body of ideas, gradually attained widespread plausibility in Asia and elsewhere as a set of universal and natural principles corresponding to the ongoing expansion of capitalist production and waged employment into new territories worldwide.

V.

The foregoing has not been intended to portray Asia as a passive victim of the west nor celebrate Asian capitalism as a form of resistance to foreign domination. Instead, my modest suggestion has been that capitalism’s history in Asia should be treated with the same seriousness, and critique, as its “classical” variants in Euro-America, understood in all its specificity yet also connected to deeper dynamics shared in common with the rest of the world.

Let me end this essay with a recognition that my re-reading of Marx has been ineluctably shaped by developments of the past few decades, with the globalization of finance and free-trade zones, the proliferation of international supply chains, and the rise of “newly-industrial countries,” especially in Asia. Capitalism’s history makes less and less sense as a collection of discrete national units, each progressing through pre-given stages, than as a combined story of accumulation, crossing borders and appropriating whatever extant social forms can be found “on hand.”

Globalization has once again been placed into sharp relief by the Covid-19 pandemic, which has illuminated just how profoundly the rest of the world now depends upon China for the manufacture of its consumer and industrial goods—not to mention medical equipment. While hawks have called for divestment and “decoupling” from China, other pessimists believe that the crisis has revealed the Chinese economy’s own vulnerabilities after decades of export-led growth. Few, however, have shown the capacity to understand capitalism in China, and Asia more broadly, at a deeper historical level. Chinese capitalism is not just a national “miracle” dating back to the 1990s but an extension of social patterns spanning Asia and the postcolonial world for decades, from postwar Japan to the “four tigers” of East Asia, and, potentially, into South and Southeast Asia into the future. Instead of deploying cutting-edge technologies, these postcolonial economies ascended in an era of global liberalization through labor-intensive measures, including the return and extension of casual, domestic, sweated, and migrant-based production methods not dissimilar from the time of the nineteenth-century tea war.

Though this essay provides no easy answers about what may come next, I hope to have at least sketched out a reinterpretation of Marx—and of capitalism’s historical possibilities—that helps us see how the Asian markets we know today are not just a recent product of western neoliberalism exported abroad but have actually been a vital component of capitalism’s long history all along, hiding in plain sight.

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Andrew Liu teaches history at Villanova University. His book “Tea War: A History of Capitalism in China and India” was released in April by Yale University Press.

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Notes Toward a More Global History of Capitalism

Reading Marx's Capital in India and China

Andrew Liu

I.

II.

III.

IV.

V.

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Capitalism, China, Global South, History, India, Marxist Theory

Andrew Liu

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