The story of the rise of capitalism from the feudal period in Europe onwards, or from the various precapitalist imperial and civilizational traditions elsewhere in the world, is one in which violence, conquest, robbery, piracy, dispossession, fraud, evictions, usury, slavery and thievery brooked large along with the slow dissolution of feudal, imperial and religious power structures. Whether or not such processes were legal (sanctioned by the state) or illegal was moot for much of the time, because the institutional and property arrangements that might have provided some protection against such practices either did not exist or were ineffective. Yet trading networks and merchant capitalist operations (including the trade in enslaved people) were far-flung and widespread from the fifteenth century onwards. Flickers of what looked like proto-capitalist industrialism could be seen early on in Flanders and Florence along with the increasing global role of monetization (facilitated by the rise of gold and silver as universal money commodities).
The exchange of labour power against the rising mass of revenues (led by those of church and state) meant that the preconditions were in place for the rise and deployment of money as capital engaging in profit-seeking. For these preconditions to be liberated from their social constraints and religious defences required the mass separation of labour from access to the means of production (the land in particular) and the dissolution of landed and religious powers. Hence the significance of what Marx called ‘primitive’ or ‘original’ accumulation. This process pro-duced a wage labour force by separating large swathes of the population from access to the basic means of production. It also led to the rise of an agrarian capitalist class that allied with merchant capitalists and bankersin that phase of capitalism generally referred to as merchant capital-ism. Buying commodities cheap and selling dear, along with raiding, piracy, robbery, colonial ventures and the conquest of territory became the primary sources of profit and the main means for the acquisition of wealth (usually in the form of gold). The quest for the latter was given theoretical standing in the prevailing mercantilist theories of the time. State power was increasingly judged according to how much gold was in the coffers of the state.
Original (or primitive) accumulation was, said Marx, written into the history of humanity ‘in letters of blood and fire’. This unspeakable violence took place over centuries and continues to this day. While Marx may have exaggerated a bit he also recognized how ‘the silent compulsion of economic relations’ also played its part. But he did not pay enough attention to the racial, civilizational and religious dimensions of these transformations. There were processes at work that were undermining traditional forms of precapitalist economic, political and religious power. A path to ‘something else’ was opening up, though the monarchs, lords and priests of the time had no idea what it might be. The corrosive effects of trade on traditional class and state powers was supplemented by the impacts of usury and debt encumbrance in dissolving feudal power and land dominance. But this would have not played out in the way it did without the rise of various ways in which labour power could be corralled, managed and mobilized (sometimes through slavery and serfdom but also through indentures and guild control over apprenticeships) to produce surpluses, usually for the benefit of some ruling class. The idea of mass organization of labour into the factory system in Britain was almost certainly influenced by the earlier experience of mass management of slave labour on the West Indian sugar plantations.
What is interesting about this history is the way in which initial, seemingly developmental, steps could almost immediately become barriers to further development. While, for example, the management of slave labour may have initiated the first step, the class formation it facilitated condemned the West Indies, the American South and much of South America to what Clyde Woods later dubbed ‘arrested development’.
While the guild system of labour organization similarly took steps towards the management and social reproduction of wage labour as a commodity, it held back the rise of the free wage labour markets required for the factory system. Early industrial capitalism could not take root in the major merchant capitalist cities in Britain like London, Bristol, Norwich or Liverpool, all of which largely operated within the constraints of the corporatist guild system dominated by the power of the merchants and the bishops. The new industrial factories had to seek out greenfield sites. Small villages with names like Manchester, Birmingham and the like suddenly became industrial cities and nonconformist religions took the place of hierarchical religious powers centred on Rome. The problem of arrested development never went away. Capital is as anxious today as it was in eighteenth-century Britain to search out and favour ‘greenfield’ sites (for example, in the US South or in the maquila zones of Mexico) where labour organization and regulatory barriers are weakest. And, in many parts of the world, the power of the landowners (as in some countries of Latin America, with Chile an excellent case) has made for a perpetual battle of capital in general against arrested development through the domination of traditional local elites and landed interests. Within the orbit of the United States, Puerto Rico and the Mississippi Delta region come close to qualifying for the status of arrested development.
For purposes of theoretical clarity, Marx excluded primitive accumu-lation from consideration in his attempt to theorize the capitalist mode of production in its most mature form outside the confusions of a much more complex social formation. But we cannot afford that luxury. The violent dispossession of a self-sufficient peasantry and ongoing prac-tices of proletarianization continue to play a critical role to this day in many parts of the world. If the global wage labour force has increased by more than a billion people since 1980, it has in part been through the destruction of alternative means of making a living. In China, for example, we have witnessed a state-sponsored programme of ‘partial proletarianization’ since 1980 in which the rural peasantry has supplied a vast migrant labour force to the booming factories in the industrial south on a temporary basis while retaining its rights of access to the land in their rural place of origin. The costs of social reproduction are borne in rural China, while the labour supply (particularly a huge cohort of young women) is applied in urban areas where migrant workers have no citizenship rights. This is the essence of the hukou system that still regulates much of the internal migration throughout China, even as some steps are taken towards its abolition in the face of a rising mass ofa floating population of migrants in urban areas who stay on but have no citizenship rights.
Practices of original accumulation led to the formation of a wage labour force that was and still is free ‘in the double sense’: individuals are free to contract their labour power with whomever they wish, while being freed of all access to the means of production. They have to engage in wage labour in order to live. But the continuing practices of primitive accumulation are now supplemented by a range of other practices in which capital increasingly depends on direct dispossessions, evictions and colonizations, to say nothing of cheating, theft, fraud and robbery (often backed by violence). The organized appropriation of the revenues of others (wages and other distributional incomes) now helps sustain capital accumulation. Price-gouging by merchants, fleecing by financial means, extraction of excessive land and property rents, speculation in all manner of asset values (including cybercurrencies), subsidies and redistributions through taxation arrangements, the privatization of public assets at favourable, if not fire-sale, prices, promotion of legal structures that are organized for the perpetuation of class privilege and power, are but some of the means involved. It is also significant that three of the most profitable lines of trade in our times are illicit drugs, illegal arms and human trafficking. The various ‘mafia economies’ and protection rackets play a prominent economic role in some parts of the capitalist social formation, impinging on the dynamics of the capitalist mode of production.
All this entails a shift to what I call ‘accumulation by dispossession’. While primitive accumulation is about the violent creation of a wage labour force that has to sell its labour power in order to live, accumulation by dispossession entails the transfer from one class to another of values already created. The idea for such a category stems from Rosa Luxemburg’s observation (supported by Hannah Arendt) that the relevance of Marx’s theory of primitive accumulation persists into the modern era. She concluded this because, in The Accumulation of Capital, she could not understand where the effective demand came from that would support the continuous accumulation of capital in the spiral form. She ended up theorizing that trade with noncapitalist social formations in the throes of primitive accumulation was the only possible answer. But it feels a bit odd to dub what is happening now as ‘original’ or ‘primitive’ accumulation, particularly since the modern version, for the most part, serves a very different purpose. In classical Marxism, primitive accumulation stands for the processes whereby the working class was violently forged out of precapitalist social formations. These processes continue to play a huge role: the dissolution of peasant-based societies almost everywhere around the world since 1945 has markedly increased the global proletariat of wage labourers.
But accumulation by dispossession signifies something very differ-ent. It entails stealing, scamming or appropriating the value and surplus value already produced. It relies on the fact that money profit can be had without any surplus value production. When 7 million households lost their housing asset values in the crisis of 2007–8, they succumbed to one of the greatest asset value transfers in US history. Stephen Schwarzman became a billionaire and Blackstone one of the largest real estate operations in the world by buying up foreclosed housing at fire-sale prices. Many of the foreclosures, it later turned out, were fraudulent. Financiers, as we earlier saw, made money out of the East Asian crisis of 1997–8. Peter Singer’s organization made billions by holding Argentina hostage to its distressed and defaulted indebtedness over many years. Emerging market countries are debt entrapped. They cannot afford their debt service and surrender their assets to outsiders for a song. Private equity companies take shaky public companies private, asset-strip them, renege on their obligations to employees (pension and health care rights) and finally return the now slimmed down company to the public sphere at a premium price. Profit on reorganization appears to be their business. Billionaires have murky histories of plundering the public trough while evading taxation and maximizing kickbacks. The nonpayment of wages, particularly at times of crisis, has also been a major issue in many parts of the world. United Airlines and American Airlines both underwent bankruptcy reorganizations that allowed them to discard their pension and health care obligations to past and current employees. Banks can legally foreclose on debts in times when the liquidity that the banks largely control is artificially tightened.
Significant flows of capital thus get diverted from the main circuits of capital by way of accumulation by dispossession. Capital (the value in motion) is channelled into non-value-producing activities that neverthe-less yield high monetary profits. Trade in commodities that have a price but no value easily spills over into illegalities. The astonishing network of illegal side-payments associated with the construction firm Odebrecht’s corruption of state officials in many Latin American countries from the 1990s onwards was economically significant.6 It led to the suicide of an ex-president of Peru as the scandal was unravelled. In many countries, a political class gets to plunder the public treasury to stash away huge fortunes in tax havens, Swiss bank accounts or, as in the case of Senator Menendez of New Jersey, gold bars.
But there is also a good deal of legalized activity. If, for example, bankers and merchants can exploit their position in the circulation of capital to accumulate capital on their own account (as they have done on an increasing scale over the last forty years or so), the laws of motion of capital, usually specified from the standpoint of production (or industrial) capital, cannot possibly remain unaffected. If the credit system is flagrantly used to bolster the wealth and power of the investment bankers (such as Goldman Sachs or JPMorgan) or speculative property companies (like Blackstone), instead of supporting value and surplus value production, the theory of capital circulation and accumulation needs extensive revision. In the Grundrisse, for example, Marx sug-gests that conditions were arising in which the labour theory of value might no longer be operative even as the capitalists clung to it as the only meaningful metric to judge their condition.7 Furthermore, spec-ulative trading in income-yielding assets such as property rents, state debt, stocks and shares and the like is not necessarily a zero-sum activity. Accumulation by dispossession, profit on alienation (buying cheap and selling dear), manipulations in financial and money markets, the spec-ulative activities of rentiers and landowners (particularly with respect to extractive activities) are all potential vehicles for not only increasing concentrations of money wealth and power in certain confined quarters but also for building new channels for further monetary accumulation in the absence of value and surplus value production. Profits increasingly accrue to operations that produce no value whatsoever. Marx was all too aware of the changing scale of mass production and the internal organ-ization of capital that this implied. Commenting approvingly on Robert Owen, he observed:
Almost all manufactures, to be successful, must now be carried out extensively and with a great capital; small masters with small capitals have only little chance of success … the small masters will be increas-ingly displaced by those who possess great capitals … He obtains this power through combination with other great capitalists, engaged in the same interest … and thus effectively bends to his purpose those he employs. The large capitalist now swims in wealth, whose proper use he has not been taught and does not know. Through his wealth, he has gained power. His wealth and his power blind his reason; and when he oppresses altogether grievously, he believes he is bestowing favours … His servants, as they are called, his slaves in fact, are reduced to the most hopeless degradation.
This is, of course, the world of Elon Musk. It is the world in which all manner of institutional means exist to dispossess the weak for the benefit of a billionaire class of consummate wealth and power. The stock exchange, Marx notes, is a wonderful place to observe how the financial sharks gobble up the economic minnows.
Accumulation by dispossession is not to be confused with the profits garnered by merchants, consultants and honest brokers in credit and stock markets. In Volume 3 of Capital, Marx makes clear that value and surplus value can be created only in the act of production. The essential services of the merchant capitalists have to be paid for as the ‘necessary costs’ of circulation (Marx uses the term ‘faux frais’) that have to be deducted from value and surplus value production. There are some exceptions. For example, Marx holds that commodities are not completely produced until they are at market. Transport and communication costs therefore add value, while other aspects of wholesaling and retailing do not, even though they are necessary costs. Exceptions exist. For example, if improvements in the field of merchant capital delivery reduce circulation times, the fact that two or three turnovers of production of a commodity can now be procured over a year translates into considerable increase in surplus value production. Furthermore, merchant capitalists exploit the labour they employ and thereby add to the total surplus value created. Increasing efficiency in merchandising is valued and much sought after. Mass production and consumption were paralleled by the creation of the department stores, such as Le Bon Marché in Paris and Marshall Field’s in Chicago in the latter half of the nineteenth century, followed by the supermarkets that proliferated everywhere in the latter half of the twentieth century.
The same logic applies to business and consulting services. An organization like McKinsey and the legal teams dealing in internationalaccountancy are in principle part of the faux frais of capital circulation. When innovation becomes a business, applications that affect the efficiency and speed of execution in organizational forms become important lines of business. The invention of all manner of apps, the proliferation of automated decision-making techniques now emerging (AI) have all manner of potential implications, but if the past is any guide they will predominantly be used to maximize rates of labour exploitation while adding to the incentive to increase the mass of value in motion many times over.
The theory of distribution has to track the appropriation of value and its increasing centralization in fewer hands even in the absence of any additional surplus value production. Capital investments in circulation, distribution and realization cannot produce value, but they do create the ‘conditions of possibility’ for the realization and appropriation of more and more value and surplus value in the industrial circuit.
The theoretical question that Marx poses is this: Why would industrial capitalists who undertake the primary task of organizing wage labour to produce value and surplus value tolerate sharing their spoils with merchant capitalists, finance capitalists, landed capitalists and the state? Marx does not characterize these other factions of capital or the state as inherently parasitic (as many on the contemporary left often do). All of these factions (if we can call the state a faction) have legitimate and crucial roles to play in support of capital circulation and accumulation. Each has, therefore, a rightful claim to a part of the surplus value produced by industrial capital as well as that from the extraction of surplus value from the workers they themselves employ. Marx concentrates on these claims, on what basis they are established and how a distinctive flow of value and surplus value circulates in satisfying such claims. These diverted value flows affect the laws of motion of capital in general and trigger different social relations and forms of struggle than those entailed in the circulation of industrial capital in isolation. In the case of merchant capital, for example, the basic social relation is the transaction between buyer and seller, while in the case of finance capital it is between debtors and creditors. In both cases, the class relation between capital and labour, which dominates in production and forms the class basis for surplus value production, fades into the background. This has potentially profound political consequences.
The materials that Marx was amassing on banking and finance for Volume 3 of Capital show that he was increasingly concerned with the question of how, why and with what effect might the bankers andfinanciers go beyond their rightful claims and use their position and their power over the mass of wealth under their command to appropriate as much of the value and surplus value as possible for themselves. They were, by virtue of their position and the crucial services they provided, able to legally or even illegally take from the collective pool of value and surplus value that the industrialists were creating. The same would obviously apply to merchant capitalists, and to landlords and the state. The power of these factions varied somewhat, but Marx recognized their status as autonomous and independent institutionalized factions sub-sumed within the totality of relations that constitute a capitalist mode of production. There were obvious limits to the amounts of appropria-tion that might be possible. It was also obvious that much of the value they appropriated would need, at some point, to be recycled back into production to ensure future appropriations. But the structure of industrial production and the organization of so-called ‘commodity’ or ‘value chains’ between different firms in the production process as a whole creates complications for analysis and theory-building. This has been particularly the case in the garment and footwear industries:
Globalized brands exercised monopsony power over producers through their ability to select from a large pool of outside firms for almost every phase of the value chain – textiles, production, transportation, process-ing, warehousing, and so on – to capture the lion’s share of the value
… Suppliers unable to reach the price demands of these transnational brands risked the loss of orders or even closure. This dependence left manufacturers in a state of perpetual instability, unable to muster the capital necessary to escape the orbit of brand power and pursue their own development, with the possibility of losing a purchasing contract an inexorable existential threat. The result was that garment workers had the lowest bargaining power of any industrial sector.
From his meticulous studies of parliamentary reports and newspapers, Marx also understood that some sort of regulatory apparatus was needed (as happened in the case of the working day) if financial crises were to be avoided. He would not, therefore, have been at all surprised that the financial crisis of 2008 would result in something like the Dodd-Frank regulatory reforms. With respect to the Bank of England, however,
Marx also came to recognize that poor design of such institutions could deepen and lengthen crises and that ‘the mistaken Bank Act of 1844’ had a negative impact on continuous accumulation. The financial crises of 1848 and 1857 derived as much from the internal contradictions of capital as from the dynamics of class struggle. It was the failure of the working classes to respond to the crisis of 1857–8 that led Marx to plunge back into the British Museum to figure out why not.
One further point complicates not only theory and analysis but also politics. In the process of circulation and accumulation, value takes on different guises. Its three primary material forms are, as we have seen, money, commodities and production activity. Each one of these forms of appearance is a material representation of the immaterial but objective social relation we call value. But each representation has characteristics specific to itself. These characteristics have nothing to do with the value created by way of the ‘form-giving fire’ of labour applied in the activity of commodity production. Consider the most problematic case, that of the money form. This is, critically, the only form of capital that has the capacity to increase without limit. It is the only form of capital that can keep consistent pace with the spiral of accumulation and growth. It is perhaps significant that the growth of the world’s money supply exhibits an exponential form after 1970 or so (Figure 14).
These are deep questions. But the essential point is that if the inherently contradictory money–value relation has become tenuous at best, the money forms of appropriation and accumulation can move centre stage without direct dependency on what might be happening in the immaterial but objective sphere of value relations. The only evidence we have for the continued relevance of the theory of value is that the increasingly free-wheeling monetary sphere has, since 1971, produced a large number of monetary crises with tangible effects on capital circulation and accumulation as well as sometimes catastrophic impacts on human well-being, even as the capital mass has continued to expand dramatically in spite of low growth rates. Something goes on beneath all the fetishism and the surface appearance of a dynamic financialized capitalism to suggest that disequilibria in the mass–rate relation are spelling economic and ecological trouble, even as the limitless ‘bad infinity’ expansion of the money supply through quantitative easing provides an easy, though temporary, remedy to every sign of crisis. The suspicion then lurks that it is quantitative easing itself that may be at the root of many contemporary economic problems. This would be true not in a direct causal sense, but because seemingly rational short-term adjustments incrementally contribute to building a far more massive problem over time, much as the easy money solution that Alan Green-span devised in response to the stock market crash of 2001 flowed into the far deeper and damaging property market and financial crash seven years later.
It is entirely possible for merchants (like IKEA and Walmart) or financiers (like Goldman Sachs and the bondholders) to dominate industrial capital. When this happens, as Marx presciently concedes, it almost invariably results in ‘a system of plunder’. In the current conjuncture, the bondholders and commanders of the circulation of interest-bearing capital also exercise immense influence over the state and in some instances dominate the production and reproduction of industrial capital. ‘Systems of plunder’ are in evidence almost everywhere. There is no honour between the different factions of capital in their thievery. They plunder at will from each other when it suits them. Factional antagonisms also arise between industrialists, merchants, financiers and landed property, as well as between powerful family rivalries and the notoriously parasitic rentiers, to say nothing of the state. No faction hesitates to seize the opportunity to dispossess ‘the other’ of its asset values by any means or chicanery possible. Accumulation by dispossession is organized as a general system of competitive robbery. But who ends up controlling most of the mass, and what do they do with the wealth and power this automatically confers?
The merchant capitalist facilitates the efficient sales of commodities in the market and deserves a just reward for rendering that service to industrial capital. Merchants absorb the problem of circulation time taken in the market to procure a sale. This allows the industrial capitalists to assure the continuity of flow of value and surplus value production without regard for conditions in the market. For this reason, industrial capitalists willingly trade commodities to merchants at a discounted value. If merchants help accelerate the turnover of capital and provide credit to industrial capital on easy terms, this confers an additional claim to a portion of the value in circulation. The exercise of this claim is viewed in Marx’s theory as a deduction out of the value and surplus value produced by industrial capital. But it is clear that the monopsony power of many merchant capitalists in the market can become a power over industrial capital. Pressure to lower prices on the part of the merchants can become a primary driver of appalling conditions of industrial labour throughout the value chain through which, for example, the Apple computer I am using is produced and marketed. At this point, the return to merchant capital can become parasitic rather than legitimate. The ‘system of plunder’ takes over.
The personas of the merchant, the banker and the landlord are such that they will all attempt to maximize their appropriations and misuse their power in furtherance of their own interest. In this the different factions become de facto parasitic rentiers rather than honourable servants of accumulation. ‘The entire immense extension of the credit system’, Marx laments, ‘is exploited by the bankers as their private capital.’
While it is useful to distinguish between the profit of merchant capital, profit of industrial capital, interest on money capital, rent on property/ landed capital and taxes to the state, these are distinctive roles rather than fixed social categories. Most corporations (along with the state) are actively involved in exploiting several of these roles simultaneously. In the automobile industry during the 1980s, for example, more money was made by deploying the auto company’s financial powers in futures markets than in making cars. The nimble corporation will arrange its affairs to extract and appropriate as much value as possible in what-ever form appears the most lucrative and from whatever point in the overall circulation process that can most easily be milked (and in some instances, bilked).
The theory of distribution has therefore to track the appropriation of value and its increasing centralization in fewer hands, even in the absence of any additional surplus value production. Capital investment in circulation, distribution and realization cannot produce value, but such investments do create the ‘conditions of possibility’ for the appropriation of value and surplus value from the industrial circuit.
Money, the representation, was in effect liberated from any direct connection to what it was supposed to represent. The floodgates of limitless money creation were opened and the question of what, exactly, the relation of money to value might be became a matter of speculation. Some even declared that the value theory is irrelevant and that only the representation – world money and the monetary policies of the world’s central banks – matters. In bourgeois economics, a new monetary theory is on the rise, and among Marxists there is some interest in MELT (the monetary expression of labour time) as a new foundation for analysis.
There are abundant opportunities within the fields of distribution for the accumulation of wealth through illegitimate, unethical and, in some instances, illegal appropriations of the wealth and assets of others. Marx avoided confronting this issue by assuming, throughout the first two volumes of Capital in particular, that all commodities exchange at their value and that the existence of intercapitalist competition would assure a rough accord between this theoretical assumption and actual market practices. There are instances where such an assumption is plausible in today’s world. The fierceness of competition among the supermarket chains in some parts of the world ensures, for example, a maximal service at minimal cost (the Aldi supermarket chain is an excellent example). The Walmart economy is super-efficient, and some now look to it as a model for a more centrally planned socialist economy.12 It assures the efficient flow of commodities from producers located all around the world to consumers. It procures rock-bottom prices that can either diminish the value of labour power or assure material improvements in the standard of living of labour at a given wage level.
In what follows, however, I focus on illustrating how the economy of appropriation and accumulation by dispossession works across the different fields of distribution. In what ways do merchants, financiers and landed property capital organize themselves to extract far more than their justifiable rate of return, to the point where they sometimes appear to dominate rather than serve endless capital accumulation? Further-more, how much value is appropriated by the state in the form of taxes,licenses and user charges to pay for state services that may or may not improve conditions for surplus value production and capital accumu-lation? The rentier state is not an impossibility, and all capitalist states take up rentier functions and practices in their drive to appropriate as much wealth and power for the state as possible. What Marx and Engels referred to as ‘secondary forms of exploitation’ that greet the workers on their return home in the form of greedy merchants, landlords and money lenders, to say nothing of illicit appropriations through the state apparatus cannot, in today’s world, be ignored in searching out the different modalities of capital accumulation through appropriation available to the capitalist class.13
If capital is value in motion, the mass of value is perpetually shifting, unstable and, as we earlier saw, uncontrollable. The fluid interactions of different forms of capital intersect to shift the mass around from one part of the world to another, from one sector to another and from one group of capitalists to another. The mass moves geographically as mercantilist policies on the part of the state lead to cumulative balance of payments advantages and trade surpluses in one part of the world to the detriment of others. Similarly, different factions – producers, mer-chants, financiers, state enterprises – acquire hegemony for a while, only to be supplanted as the weight of the mass shifts elsewhere. In recent times and places and in certain industries the merchant capitalists have dominated over the direct producers (as seemed to be the case in the global commodity and value chains in textiles and electronics during the 1990s). But in more recent times, the reorganization of production and the rise of massive producer companies such as Foxconn in electronics have levelled the playing field. It uses its quasi-monopoly power back down its own supply chain to ruthlessly extract surpluses from suppliers. The fluidity of these relations makes it hard to track the mechanisms of surplus extraction through accumulation by dispossession (plunder) in the context of factional struggles over distributional shares between merchants, financiers, land and property owners as well as an often-avaricious state apparatus.
Excerpted from THE STORY OF CAPITAL: WHAT EVERYONE SHOULD KNOW ABOUT HOW CAPITAL WORKS by David Harvey, published by Verso Books. Copyright © 2026 David Harvey
