9. The Rise of the Merchant Class

'This Outline should be read in conjunction with No. VI., because "Towns and Trades" and "The Rise of the Merchant Class" are inseparable.

IN dealing with our present topic, the impossibility of properly understanding history or explaining it without a thorough knowledge of economics is again demonstrated. One cannot explain the rise of the merchant class without having a clear understanding of the nature of merchant’s capital. Thoroughly to grasp how, from the early forms of capital—merchant’s and usurer’s—the modern form, industrial capital, developed, is to receive an invaluable key to historical progress. It is to witness a quantitative changer or accumulation, produce in time a qualitative difference.

Early Merchants. As we have pointed out previously that England was introduced to trade by foreign merchants, a brief glance at some prominent examples of these foreigners will form a fitting introduction to our study of the rise of the English merchants. Under communal production, when use-values were exchanged for direct consumption, the merchant was unnecessary. In two societies there must be a difference in the manner of livelihood and in the products of labour before trade is necessary. Hence trade was encouraged when cattle-raising and agriculture were adopted by certain peoples before the others; and it also grew as the difference between town and country increased in later times. Again, a nomadic people, coming in contact with other peoples in different stages of development, would be most likely early to acquire trading habits. Thus we find that the earliest merchants prominent in history were- the descendants of nomadic tribes, wandering herdsmen, who journeyed to and fro between the Euphrates and the Nile, then the centres of civilisation. The Phoenicians, the Arabs and the Jews were these early trading peoples.

The development of the Phoenician nation was very rapid. "Already in the year 1000 B.C.," writes Untermann, "the Phienicians had great and flourishing sea ports in the cities of Sidon, Tyre, and lesser towns along the coast, and not only dominated the sea trade, but also drew a large portion of the overland eastern and southern trade into their control." Space forbids any detailed account of the quantity and variety of the wealth which passed through their hands, and of the many trading ports they established in the Mediterranean. Internal dissensions and the onslaughts of Assyrian and Babylonian kings, greedy for the amassed Phoenician wealth, caused Phoenicia to disappear, and her place in Mediterranean commerce was taken by her daughter-city, Carthage.

The Arabs have retained their nomadic habits until recent years, being engaged perforce in overland, and not sea, trade, alternately plundering and protecting the caravans, and often indulging in internecine tribal conflict. The desire of Empires for raw material, fields for investment, and markets for iron and steel will soon, however, "railroad" them into civilisation and set them evolving in line with the other peoples of the world.

The Jews were later in their development than the Phoenicians. They were hardly given a chance to settle down by their turbulent neighbours. But even in these brief periods, the dissolving effects of wealth on the national unity by the creation of class divisions are apparent in the Biblical denunciations of those who "add house to house and field to field."[Isaiah, v.8] The environment of the Jews was such that "only the crafty merchant could survive." The Jews became "a tramping race of pedlars and moneylenders, spreading by stealth over the entire face of the ancient and medieval world, and existing only on sufferance, but developing from
this very reason a craftiness and resourcefulness, which made some of them the secret rulers of the fate of nations by means of their underground accumulations
of gold and silver."

Merchants in Feudal Times. - The development of those twin-brothers, merchants’ and usurers’ capital destroys the very conditions necessary to their existence. The merchant thrives when there are many independent bidders for his wares. The usurer prospers when there are many little proprietors who may be driven by sudden accident, war, or sickness into his clutches. But in the accumulation of wealth by the merchants, not only did they excite the envy of foreign powers, who often seized their treasuries, but they created in society an internal division between rich and poor. Ties of wealth broke down all former bonds. In the divorce of the freemen from their holdings, and the resulting creation of large proprietors and slaves, merchants’ and usurers’ capital destroyed their own customers. Being thus weakened by internal dissensions, the ancient empires were an easy prey to the barbarians, who, as we have before explained, instituted, in the . turbulent times which followed, the Feudal system. Thus an important step forward into another system of society was taken.

The Church—then the only international organization—-helped to revive trade after the feudal "slump." Tbe missionary and the trader made their outposts together. The merchants of the Italian towns, trading in Eastern luxuries; soon achieved prominence. Across the Alps, German trading towns in touch with the Italian towns sprang up. They leagued themselves together for strength. We read of these merchant leagues forming credit banks, and by boycotting the tbieving nobles teaching them their power. Mention is made in English history of the one-time yearly visits to England of the Venetian Fleet, and the Hanseatic League had a flourishing colony of merchants in London down to Edward IV's time.

Trade was stimulated by the Crusades (11th, 12th, and 13th centuries), which introduced into Europe sugar, cotton, and many other things now of every day use. The effects on Feudalism of these under mining influences have already been dealt with.

The Wool Trade.— Wool was England’s chief early export. The foreign merchants appreciated the quality of the English wool, and shipped it in huge quantities to Flanders for manufacture into those finer cloths- which were at that time beyond the skill of the English weavers; Two-thirds of our total exports were wool. Taxes and tithes were raised on the wool trade, and often paid in wool. Gibbins’ paragraph— Wool and Politics (pp. 48—50)—should be carefully read to gain some idea of the economic interests which formed the basis of the Flemish alliance, and to understand how kingly and papal revenues were furnished by the wool trade. "Both Church and King sat comfortably on the wool sack."

Later the woollen cloth was manufactured in England. Kings and Parliaments tried to encourage this by the importation of foreign weavers, and by various legal enactments; the export of wool and the import of woollen cloth were forbidden in 1258 and 1271 respectively. The persecution of the Huguenots in France and Alva’s attempt to convert Holland to the Roman Cathoiic faith (see Motley’s Rise of the Dutch Republic) drove- many industrious non-conformist workers to our shores, who brought with them new methods and new crafts.

16th Century Developments.—Trade and manufacture thus gradually expanded, but it should be noted that, unlike the merchant of the Guild, the modern merchant is the servant and not the master of production. The Tudor merchants shrewdly encouraged the merchants and the small manufacturers against the barons and the Church. The end of the 15th century saw the opening up of new worlds. The Mediterranean towns lost their commercial supremacy to the towns which faced the Atlantic. The hitherto trackless ocean was spanned, and trails were blazed in new worlds.

The voyage of Columbus in 1492, the discovery of a sea route to India round the Cape by Vasco Da Gama in 1498, Cabot’s voyage to Labrador in 1497—these are some of the chief examples of the discoveries which revolutionised the trade of the Old World.[In Outline XI the effects of the round-the-world voyages of Magellan and Drake, in 1520 and 1557-1581 respectively, upon current conceptions of the world's shape, will recieve attention].

The cessation of the Venetian Fleet’s visit in 1532 and the withdrawal of the Hanseatic merchants’ charter in 1597 mark a time when the English merchants triumphed over the foreign merchants, and were able to stand alone. Many merchant companies were formed to trade with particular districts, the most famous of which was the East India Company formed in 1600. Space forbids more than a brief reference to the wars for trade monopolies with Spain, Portugal, and Holland, and later, for occupation of colonies as well as trade monopolies, which began in this period.

Mercantile Economy.—The doings of the merchants cannot be considered apart from their ideas concerning corp and the creation of value. Under communal or natural production, labour, as the cause of value, would be easily recognised. But this would be hid from the merchant who took no part in production, Taking advantage of the different products produced by different societies, often in differing stages of development, to profitably practise his motto "Buy cheap and sell dear," the merchant thought that vaLue was created in circulation. And when money became the universal commodity the merchant was able to hoard this form of wealth in a manner which had been impossible while payment in kind prevailed. Thus the Mercantile School of Economics, whose chief thinker was John Locke, laid it down that profit was made by exchange, according to the proportion of their hoards of the precious metals. They (the Mercantilists) believed that all exports were paid for by coin or bullion; therefore, by corn bounties by prohibition of the import of certain articles which could be made in England, and by Navigation Acts designed to secure monopolies and rights for English shipping, they endeavoured to keep the balance of trade (i.e., an excess of exports over imports) in their favour, so that, the nation with whom they traded would have to make good the difference by shipping across some of its store of the precious metals. The patriot was the exporter; the enemy, the importer.

The ruin of Spain, by the continued shipping into it of the precious metals, is an example of the disastrous results of this policy. The English American colonies, too, broke away from the restrictions placed upon their activities by regulations seeking to secure exclusively to the Mother-country the benefits of their trade. Adam Smith, in 1776, attacked and helped to bury the Mercantile fallacies; the repeal of the Corn Laws in the first half of the 19th century was the final triumph of Free Trade which he advocated as spokesman of the Capitalist Class, then in its Manchester period.

[A short digression may be made here to state that profits are made in production, and not in circulation. The capitalists do not get rich by buying cheap and selling dear. Two persons cannot live by taking in one another’s washing or by cheating each other. If a person buys cheaply, then someone must have sold cheaply; or if he has sold dearly then someone must have bought dearly. A bicycle worth £10, perhaps through ignorance or particular needs of its owner, is exchanged for a table worth only £5; but, though the values have changed hands, the total of £15 (10 plus 5) is still unaltered. In modern production the capitalist, needing a quick turnover, instead of selling his goods himself, sells them to the merchant at sometimes a little less than their cost of production. In this way, on such occasions, he is forced to yield up a part of the surplus value contained in the goods to the merchant, who may, or may not, realise it in the market later. This does not alter the fact that the merchant exploits his employees like the capitalist. He pays them the value of their labour-power and retains the surplus value which they create; the labour of transporting and storing commodities is, of course, included in the socially necessary labour which determines a commodity’s value.]

Methods of accumulation. - In conclusion we will notice the methods adopted by the merchants to secure that accumulation which formed the starting point for the industrial capitalist. We are often told about, and asked to admire, the careful capitalist who by the exercise of "abstinence" collected his original capital. But in following the merchants of Spain, Holland and England in their relations with the backward inhabitants of the new continents which they discovered, we find a terrible tale which gives quite another explanation of how the necessary accumulation which forms the starting point of industrial capital was formed. An hour or two spent with some of the later chapters in Capital, Vol. I., will convince the reader that it was not a case of "roses, roses all the way" in this development. The robbery of the Spanish galleons and mule trains and the capture and sale of slaves by the gallant pirates of good Queen Bess; the merciless exploitation of the Dutch colonies; and the tale of corruption and greed told in connection with the doings of the East India Company in India — these are only examples of
"that conquest, plunder, and enslavement of foreign lands and peoples" which played so large a part in these "idyllic" proceedings of primitive accumulation. As Anatole France has said, "The coloured races know us only by our crimes."

Yet accumulation is not capital until something else appears. And that something else is the free labourer. "Two very different kinds of commodity-possessors must
come face to faee and into contact; on the one hand, the owners of money, means of production, means of subsistei who are eager to increase the sum of values they possess by buying other people’s labour-power; on the other hand, free labourers, the sellers of their own labour-power and therefore the sellers of labour."

We have seen how the merchants became the first kind of commodity-possessors. The creation of this other, also necessary, kind of commodity-possessor, this class of free labourers, will furnish a subject for the next Outline.

Books.—Gibbins, Period III. (especially Chap. II., on Wool and Manufacture); Period IV., Chap II. Warner, Chaps IX. and XI. Capital, Vol. I. Part VIII. for this and succeeding lessons. No economist but Marx has dealt fully with methods of accumulation. Untermann's Marxian Economics, Chaps. V— XI., and XVI. Smith’s Wealth of Nations, Book I., Chap. IV., contains information re origin and use of money; and Book III., Chaps. III, and IV., deal with the rise of commerce and towns.'

From A Worker Looks At History, by Mark Starr.