Piotr Kropotkin

Monopolies from the 16th century onwards

Let us continue to examine how the modern State, the one that was established in Europe after the sixteenth century, and later in the young republics of the two Americas, worked to enslave the individual. After having accepted the personal emancipation of some sections of society that had broken the yoke of serfdom in the free cities, it endeavoured, as we have seen, to maintain serfdom for the peasants for as long as possible, and to re-establish economic servitude for all in a new form, bringing its subjects under the yoke of its officials and a whole new class of privileged people: the bureaucracy, the Church, the landowners, the merchants and the capitalists. And we have just seen how the State wielded taxation for this purpose.

Now we are going to take a look at another weapon that the State knew how to use so well: the creation of privileges and monopolies for the benefit of some of its subjects, to the detriment of others. Here we see the State in its true function, fulfilling its true mission. From the outset, it applied this very principle, which enabled it to establish itself and bring together under its aegis the lord, the soldier, the priest and the judge. It was under these conditions that the sovereign was recognised. He has remained faithful to this mission to this day; and if he were to fail, if he were to cease to represent a mutual insurance between the privileged, that would be the death of the institution — of the historical growth which has taken a specific form for this purpose and that we call the State.

It is striking, in fact, to note the extent to which the creation of monopolies for the benefit of those who already possessed privileges from birth, or the power of theocracy or military power, was the very essence of the organisation that started to develop in Europe in the sixteenth century, to replace that of the free cities of the Middle Ages.

We can take any nation: France, England, the German, Italian or Slavic States, — everywhere we find this same character in the emerging State. That is why we need only look at the development of monopolies in a single nation — England, for example, where this development has been studied in greatest detail — to understand and grasp this essential role of the State in all modern nations. None offer the slightest exception.

It is very clear, in fact, how the constitution of the nascent State in England, from the end of the sixteenth century, and the establishment of monopolies in favour of the privileged went hand in hand.

Even before the reign of Elizabeth, when the English State was still in its infancy, the Tudor kings were constantly creating monopolies for their favourites. Under Elizabeth, when maritime trade began to develop and a whole series of new industries were introduced in England, this tendency became even more pronounced. Each new industry was set up as a monopoly, either for foreigners who paid the Queen or for people at court who were to be rewarded.

The exploitation of the Yorkshire alum deposits, of the salt, of the tin mines and the coal mines of Newcastle, the glass industry, the advanced manufacture of soap, of pins and so on — everything was set up as a monopoly which prevented the development of industries and tended to kill off the small industrialists. To protect the people at court, to whom the soap monopoly had been granted, they went so far as to forbid individuals from making their own laundry soap at home.

Under James I, the creation of concessions and the distribution of licences continued to increase until 1624, when, finally, on the eve of the Revolution, a law against monopolies was passed. But this law was a double-edged one: it condemned monopolies, and at the same time, not only did it maintain the existing ones, it sanctioned new and very important ones. Moreover, as soon as it was passed, it was violated. One of its paragraphs, which favoured the old city corporations, was used to establish monopolies in a particular city, and later to extend them to entire regions. From 1630 to 1650, the government also used the ‘patents’ to establish new monopolies.

It took the revolution of 1688 to put a stop to this orgy of monopolies. And it was not until 1689, when a new Parliament (which represented an alliance between the commercial and industrial bourgeoisie and the landed aristocracy against royal absolutism and the camarilla) began to operate, that these measures were taken against the creation of monopolies by the monarchy. Economic historians even say that for almost a whole century after 1689 the English Parliament was watchful of not allowing the creation of industrial monopolies that could have favoured certain industrialists to the detriment of others.

It must be recognised that the Revolution and the coming to power of the bourgeoisie had this consequence, and that in this way large industries, such as cotton, wool, iron, coal, etc., were able to develop without being hampered by the monopolists. They were even able to develop into national industries, in which a mass of small entrepreneurs could take part. This allowed thousands of workers to make many improvements in the small workshops, without which these industries could never have perfected themselves.

But in the meantime, the bureaucracy of the State was taking shape and growing stronger. Governmental centralisation, which is the essence of any State, was gaining ground, and soon the creation of new monopolies in new spheres began again, this time on a much larger scale than in the days of the Tudors. At that time, the art of monopolising was in its infancy. Now, with the State, it was coming of age.

While the Parliament was prevented to a certain extent by the representatives of the local bourgeoisie from intervening in the emerging industries in England itself and from favouring some to the detriment of others, it focused its monopolistic activity on the colonies. Here, it operated on a grand scale. The East India Company and the Hudson's Bay Company in Canada became extremely wealthy kingdoms, given to groups of individuals. Later, land concessions in America, gold mining concessions in Australia, navigation privileges and control over new branches of industry became means for the State to grant its protégés fabulous incomes. Colossal fortunes were amassed in this way.

True to its dual composition of bourgeois in the House of Commons and landed aristocracy in the House of Lords, the English Parliament applied itself throughout the 18th century to proletarianising the peasants and delivering the tillers of the soil, bound hand and foot, to the great landowners. By means of the Enclosure Acts, by which Parliament declared common land to be the personal property of the lord as soon as the lord had enclosed it in any way, nearly 3,000,000 hectares of common land passed from the hands of the communes into those of the lords between 1709 and 1869. In general, the result of the monopolistic legislation of the English Parliament is that one third of all cultivable land in England today belongs to 523 families.

The enclosure was an act of open banditry; but in the 18th century the State, renewed by the Revolution, already felt strong enough to brave the discontent and possible insurrections of the peasants. Did it not have the support of the bourgeoisie for this? Because, if Parliament thus endowed the lords with landed property, it also favoured the industrial bourgeoisie.

By driving peasants from the villages into the cities, it delivered the ‘labour’ of starving peasants to the industrialists. Moreover, by virtue of the Parliament's interpretation of the Poor Law, the agents of the cotton manufacturers scoured the workhouses, that is to say, the prisons where the proletarians without work were locked up with their families; and from these prisons they took away vans full of children who, under the name of workhouse apprentices, had to work fourteen and sixteen hours a day in the cotton mills.

One town in Lancashire still bears on its population, to this day, the stamp of its origins, The impoverished blood of those starving children, brought from the workhouses of the South to enrich the bourgeoisie of the Midlands, and made to work under the lash of overseers, very often from the age of seven, can still be seen in the stunted and anaemic population of these villages.

This lasted until the 19th century.

Finally, again to assist fledgling industries in mainland Britain, Parliament used its legislation to crush the national industries in the colonies. Thus was killed the cloth industry in India, which had reached such a high degree of artistic perfection. This extremely rich market was thus handed over to English junk. The weaving of cloth in Ireland was killed in the same way in favour of Manchester cotton.

We can see that while the bourgeois Parliament, anxious to enrich its customers through the development of major national industries, opposed the idea during the 18th century that isolated industrialists or separate branches of English industry should be favoured at the expense of others, it made up for this through the proletarianisation of the large mass of the agricultural population and the colonies, that it delivered to the most ignoble exploitation by powerful monopolists. At the same time, whenever it could, it maintained and favoured in England itself the mining monopolies established in the previous century, such as that of the Newcastle coal masters, which lasted until 1844, or that of the copper mines, which lasted until 1820.

 

Monopolies in the 19th century

From the first half of the 19th century, new monopolies, which made the old ones look like children's toys, began to emerge under the protection of the law.

Initially, the attention of businessmen was drawn to the railways and the major ocean shipping lines, which were subsidised by the State. Colossal fortunes were made in a few decades in England and France, with the help of the ‘concessions’ received by individuals and companies for the construction of railway lines, generally with the guarantee of a certain income.

Added to this were the major metallurgical and mining companies, which supplied the railways with rails, iron or steel bridges, rolling stock and fuel, all managing to make fabulous profits and huge speculations on the land acquired. The major companies for the construction of iron ships and especially for the preparation of iron, steel and copper for war material, as well as for this material itself — battleships, cannons, rifles, sabres, etc.; the major canal companies (Suez, Panama, etc.) and finally what was called the ‘development’ of countries lagging behind in industry followed closely behind. The millionaires were then churned out by half-starved workers who were mercilessly shot or transported to forced labour camps as soon as they made the slightest attempt at revolt.

The construction of an extensive railway network in Russia (begun in the 1860s), in the European peninsulas, in the United States, in Mexico, in the republics of South America — all these were sources of unprecedented wealth, accumulated by outright robbery under the protection of the State. What a cry of misery there was in the past, when a feudal baron would plunder any merchant caravans passing near his castle! Now, hundreds of millions of human herds were fleeced by wheeler-dealers with the open connivance of States and Governments — autocratic, parliamentary or republican.

But that's not all. Soon to be added were the construction of ships for the merchant navy, subsidised by the various States, shipping lines too subsidised, submarine cables and telegraphs, the digging of isthmuses and tunnels, the embellishment of cities inaugurated under Napoleon III, and finally, dominating it all like the Eiffel Tower dominates the neighbouring houses — the borrowing by the States and the banks financially supported!

All this dancing of the billions became material for ‘concessions’. Finance, trade, war, armaments, education — everything was used to create monopolies, to manufacture billionaires.

And let no one seek to excuse these monopolies and concessions by saying that in this way it was possible to carry out a mass of useful undertakings. Because, for every million of capital usefully employed in these undertakings, the founders of the Companies added three, four, five, sometimes as many as ten million to the burden of the public debt. We only have to remember Panama, where millions poured in to make the Companies ‘float’, and only a tenth of the money paid by the shareholders went towards the actual work of digging the isthmus. But what happened with Panama happened with all companies, without exception, in America, in the United States of America, as well as in the European monarchies. “Almost all our railway companies and other enterprises,” wrote Henry George in his Progress and Poverty, “are overburdened in this way. Where one dollar was actually employed, bonds were issued for two, three, four, five, and even as many as ten dollars; and it is on these fictitious sums that interest and dividends are paid.”

And if that were not all! When these large companies are formed, their power over human agglomerations is such that it can only be compared to that of the brigands who once held the roads and levied a tax on every traveller, whether he was on foot or the head of a merchant caravan. And for every billionaire who emerges with the help of the State, there are enormous sum of money in bribes that pour down in the ministries.

The plundering of national wealth that has taken place, and is still taking place, with the consent and with the help of the State — especially where there are still natural resources to grab — is simply sickening. You only have to look at the great Trans-Canada Railway, for example, to get an idea of this State-sanctioned plundering. All the best land for development on the shores of North America's great lakes, or in the big cities on the banks of rivers, belongs to the company [the Canadian Pacific Railway] that was granted the privilege of building this line. A strip of land, seven and a half kilometres wide, on both sides of the line along its entire length, was given to the capitalists who undertook to build the Trans-Canada Railway; and when this line, advancing westward, crossed unproductive plateaus, the equivalent of this strip of land was allocated almost everywhere, where there was fertile land that would soon reach a high value. Whereas the State still distributed land free of charge to new settlers, the land allocated to the Trans-Canada Railway was divided into one-square-mile lots, placed like the black squares on a chessboard, in the middle of the land that the State gave to the settlers. As a result, today, the squares belonging to the State and given to the emigrants are all inhabited, and the land given to the capitalists of the Trans-Canada Railway is worth hundreds of millions of dollars. As for the capital that the Company was supposed to have spent to build the line, it is generally agreed that it represents three or four times the sum that was actually spent.

Wherever we look, it is absolutely the same, so much so that it becomes difficult to name a single great fortune due solely to industry, without the help of some government-created monopoly. In the United States, as Henry George had already pointed out, it is absolutely impossible.

Thus the Rothschilds' immense fortune owes its origin entirely to the loans taken out with the family's founding banker by kings to fight either other kings or their own subjects.

The no less colossal fortune of the Dukes of Westminster is due entirely to the fact that their ancestors obtained by the good pleasure of kings the lands on which a large part of London is now built, and this fortune is maintained only because the English Parliament, contrary to all justice, does not want to raise the question of the blatant appropriation of the land of the English nation by the lords.

As for the fortunes of the great American billionaires — the Astors, the Vanderbilts, the Goulds, those of the oil, steel, mining, railway and even matches companies, etc. — they all originated in monopolies created by the State.

In a word, if someone were to make a list of the wealth that was monopolised by financiers and wheeler-dealers, with the aid of the privileges and monopolies established by the States; if someone were to evaluate the riches that was thus taken from the public purse by all the governments — parliamentarian, monarchist and republican — and given to private individuals in exchange for more or less disguised bribes — the workers would be amazed and outraged. These are incredible figures, difficult to conceive for those who live on their meagre salaries.

Alongside these figures — the product of legalised plundering — those which the treatises on political economy talk about with such reverence are trifles, crumbs. When economists want us to believe that at the origin of Capital are small sums of money set aside by the masters from the profits of their industrial establishments, these gentlemen are either ignorant, or they are knowingly telling lies. The robbery, appropriation and plundering of national wealth, with the help of the State, by ‘involving’ the powerful in it, is the true source of the immense fortunes accumulated every year by the lords and the bourgeois.

But you are talking to us — some people might say — about the monopolisation of wealth in virgin countries, newly conquered by the industrial civilisation of the 19th century. This is no longer the case — they will add — for countries that are older, so to speak, in their political life, such as England or France.

Well, it's exactly the same in the most advanced countries in terms of their political life. The governments of these States are constantly finding new ways of fleecing the citizens for the benefit of their protégés. Wasn't the ‘Panama,’ which served to enrich so many wheeler-dealers, purely French? Wasn't it an application of the Enrichissez-vous! attributed to Guizot; and besides the Panama that ended in scandal, have there not been hundreds of others that are flourishing to this day? We only have to think of Morocco, the Tripolitania adventure, the Yalu River in Korea, the plundering of Persia, etc. These acts of high-level fraud are still happening every day, and they will only end after the social revolution.

Capital and the State are two parallel growths that would be impossible without each other, and for this reason must always be fought together, both at the same time. The State would never have managed to form and acquire the power it has today, or even the power it had in the Rome of the emperors, in the Egypt of the Pharaohs, in Assyria, etc., if it had not favoured, as it did, the growth of landed and industrial capital and the exploitation — first of the tribes of pastoral peoples, then of peasant farmers and later of industrial workers. It was by protecting with his whip and his sword those whom he gave the opportunity to take over the land and to obtain, firstly through looting, and later through the forced labour of the defeated, certain tools, either for cultivating the soil or for obtaining industrial products; it was by forcing those who owned nothing to work for those who did (the landowners, the ironmasters, the slave owners) that this formidable organisation called the State gradually came into being. And if capitalism had never reached its current form without the constant, precise and continuous support of the State, the State for its part would never have attained this formidable force, this power of absorption, this ability to hold in its hands the entire life of each citizen, which it has today, if it had not worked consciously, patiently and systematically to build up Capital. Without the help of Capital, the royal power would never even have succeeded in freeing itself from the Church, and without the help of the capitalist it would never have been able to get its hands on the entire existence of the modern human being, from his first days at school to the grave.

This is why, when it is said that Capitalism dates from the 15th or 16th century, this statement can be considered to have a certain usefulness, as long as it serves to affirm the parallelism of the evolution of the State and Capital. But the fact is that the exploitation of capital already existed where there were the first seeds of individual land ownership, where the exclusive right of such individuals to graze livestock on such land, and later the possibility of cultivating such land by forced or hired labour, had been established. At this very moment, we can see Capital already accomplishing its pernicious work among pastoral peoples (the Mongols, the Buryats) who are just emerging from the tribal phase. All it takes is for trade to leave the tribal phase (during which nothing could be sold by one member of the tribe to another member), all it takes is for trade to become individual, for capitalism to already appear. And as soon as the State (coming from outside, or developed in a particular tribe) gets its hands on the tribe through taxation and its officials, as it does with the Mongol tribes, the proletariat and capitalism are already born, and inevitably begin their evolution. It is precisely in order to deliver the Kabyles, the Moroccans, the Arabs of Tripolitania, the Egyptian fellahs, the Persians, etc., to the capitalists imported from Europe and to the indigenous exploiters, that the European States are currently making their conquests in Africa and Asia. And in these recently conquered countries, one can see at first hand how the State and Capital are intimately linked, how one produces the other, how they mutually determine their parallel evolution.