Capitalism as a Germ Form

After we gave a sketch about what germ form theory and the five-step model is, we now give an outline of an analysis for the development of capitalism using germ form theory. We are particularly interested in how the shift from feudalism to capitalism can be perceived using germ form theory, because in the following chapter we give an example of a contemporary germ form which--according to our thesis--is in its expansion step. [2]

Early Capitalist Elements

If we talk of capitalism here, we are thinking of two main fundaments of capitalism: Abstract labour and exchange on the one hand and an industrial way of production on the other hand.

In capitalism societally separated producers buy and employ labour power, in order to produce commodities, which are exchanged on markets then. When exchanged the societally average amount of labour being necessary to produce the commodities is compared. This societally average amount of labour is the abstract labour and it is expressed by the exchange value of commodities. However, consumers are interested in the use value of the goods they buy, which is created by concrete labour. Abstract and concrete labour are two aspects of one process: producing goods as commodities. However, in capitalism the concrete aspect of labour is dominated by the abstract one: It doesn't matter, which good is being produced--be it milk or bombs. In capitalism the main goal of production is, that the product can be sold on a market, and thus its exchange value can be realized.

Capitalism is also an industrial way of production. Big machinery and mass production is applied, which is beyond what were possible to organise in a feudal society. This applies to the technical side of industrial production as well as to the social side necessary to support the technical side. While in Fordist capitalism workers are only an appendix to machinery, today creativity and self-education is highly demanded. We'll come back to this aspect in the final chapter.

According to the five-step model we need to check where these fundaments of capitalism--abstract labour and commodity exchange as well as industrial production--appeared in history to find the spots where capitalism can be seen in its emergence step.

Exchange as just defined is represented well by the money system where money is an expression of the exchange value. Of course money as a phenomenon has been around for quite a long time in human history. However, most of the time money was a mean to facilitate the exchange of goods. That is what Marx named the C->M->C type of money usage. Marx distinguished that usage type of money from the capitalist usage type of M->C->M' where M' > M [Marx-CMCvsMCM]. Only in the second variant money is capitalist money, capital, as we know it today. As the formula expresses in this form its function of a facilitator of exchange becomes secondary and the accumulation of profit becomes dominant.

If we compare the money phenomenon with the example about our simple organisms then money represents the feature of orientation as such. It is a common phenomenon throughout many human societies. The original usage type of money C->M->C is a common phenomenon. The capitalist type of money usage M->C->M' is, however, a deviation of the common money usage. This type of money usage is a mutant like the eyed organisms in our example above.

We can see this mutant in pre-capitalist forms like in the North Italian cities around 1300 but also in the mercantile usage of money later on. At that time money existed but in general for the society as a whole money was a rather marginal phenomenon far outweighed by the feudal structures which depended on completely different things than money. It is a historical truth that at this time there were deviations which later ended up in capitalism but at that time did not succeed and even vanished again. These are nice examples for a germ form in its emergence step but which did not realize its potential immediately.

Indeed also the other major element of capitalism has been seen before the 18th century. There actually were manufactures involving abstract labour and sometimes even big machinery as early as in the Roman Empire. However, as of this time this type of production did not take off and stayed a niche phenomenon vanishing again after the fall of the Roman Empire. Instead the feudal organisation of labour involving peasants and artisans and using crafts as the most developed forms of production had several hundred years to live.

When looking back from the developed germ form like we do here, according to germ form theory we can conclude that there were either elements of the germ form missing or the crisis of the old form were missing. Indeed probably both is true and so feudalism stayed dominant until the 18th century and the germ form stayed marginal or vanished completely.

The Potential of Early Capitalism

In the 17th century and 18th century development was more mature. Especially in Europe the Enlightenment brought up a whole new way of thinking emancipating at least from the church and revolutionising the natural sciences. The Enlightenment brought a massive paradigm change for all of the European society fabric. A paradigm change indeed for which thinking back beyond it is very hard to do with a modern mind set--if at all possible.

The breakthroughs in natural sciences posed hard philosophical questions. In fact they put the whole God centred model of the world at stake--a development the echoes of which still can be heard today.

Those breakthroughs in the natural sciences made new technologies possible. These new technological possibilities like big machinery, however, did not fit into the societal framework of feudal work organisation. In fact the early industry needed abstract labour which as of this time was not very common. In fact »liberating« people from their feudal roots was necessary to create abstract labour power.

Also the industry of this time used money in a new way: It has been invested not only in machines but also in human labour, and the results of these investments--the products--have been sold on a market. On the market the surplus value has been realized and this gave way to the next cycle. Capital as we know it today was born and for the first time the mutant of money usage became visible on a large scale on the historical stage. Indeed the technological development of this time together with the changes in the overall societal framework made this positive feedback cycle possible increasing speed of development.

In addition at this time the governance system which feudalism was based on eroded. Just take Louis XIV. of France as an example of how much the aristocrat class has separated itself from the real social movements compared to Carolus the Great (XXX name?) about thousand years before him. Or think the early revolutions in the United Kingdom questioning the old governance system more and more in favour of those parts of society who represented elements of the germ form.

However, none of these aspects would have had much meaning if capitalism had not shown some potential in terms of improved products. Indeed from the perspective of the users of these products there were a couple.

First, the new industrial way of organising labour together with the improved technology resulted in higher productivity which in turn lowered the prices of the commodities produced this way. Where money already played a role this was of course an advantage of the products. These cheaper products had so much of an advantage over the old home manufacturers' and guild organised products that these groups representing the old system started to rebel against this--see for instance the Luddites [Wikipedia-Luddite].

Second, the mass availability of products was another advantage of the capitalist model. This was especially useful for those fields where you had mass consumption. At this time one prominent example is the feudal lords needing mass production to equip their modern armies. Today it seems obvious that a mass equipment with uniforms, weaponry and all the other stuff is only feasible with an industrial way of production. But also the mercantile field appreciated the mass availability of products because it made it much simpler--and thus cheaper--to acquire the products which are sold later on some arbitrary market.

Third the industrial production--and at that time that meant already capitalist production--were able to produce things which had not been possible before. Especially the heavy industries which needed lots and lots of free workers were able to produce things like railways, huge bridges like the Forth Bridge and so on. Again war played a big role here because at least part of the new products like cannons were weaponry. But of course the germ form already created its own positive feedback cycle here: Railways were needed for the industrial way of production and the industrial way of production was needed to have railways.

Forth the industrial products showed new features like uniformity which is one of the typical results of a uniform production process as distinguished from an artisan production process. This in turn simplified the industrial use of those products because for a uniform process it is always good to have uniform input--another positive feedback cycle. Please note, however, that those positive feedback cycles were no end in themselves. They were necessary to expand the germ form but if the germ form would not have been useful for the overall process these positive feedback cycles would have lead nowhere.

The advantages in the resulting products were the final reason why capitalism and industrialisation had their major breakthrough. Though some elements existed in earlier historical phases they were not mature enough to lead to a breakthrough or the old system was still too vital. Only at the dawn of capitalism the preconditions were mature enough to make way for this new mode of production.

As noted once this new mode of production gained size there were several positive feedback cycles. The most important one was the new logic of abstract money M->C->M'. Together with the crisis of the old feudal system these positive feedback cycles through a historically very short time changed the whole societal fabric massively. They unleashed a technical development which was unknown to mankind. But they also unleashed massive social changes--just because the new mode of production »called« for these changes. In particular the organisation of human work was revolutionised. Free workers like capitalism needed did not exist before but are standard today.

Capitalism improved the efficiency of material production at this time as far as was possible and it liberated material production from the limitations of the feudal system--namely guilds and the old feudal system of privileges. Today we see it also as liberation for the people from the feudal regulations which had been in effect for several hundred years.

Dialectics of the expansion step

In the early 19th century these features made capitalism an important part of the overall development process--the precise definition of a germ form in the expansion step. During this expansion step contradictions between the old and the new form are a logical consequence. Indeed if there are no or little contradictions the supposed new form is probably not really new but can be integrated somehow. According to germ form theory, however, these contradictions happen deeply inside and throughout the whole social fabric and they are not as obvious as one may think.

If germ form theory can be applied to capitalism as a germ form, then there should be contradictions and dialectical movements. Indeed there were. The most important probably is how many aristocrats reacted to the early forms of capitalism: They used it for their own needs. Especially war and armies are a field where capitalism was just able to deliver [Kurz-War]. One less obvious common denominator is that the alienated nature of late feudal wars is nicely reflected by the alienated nature of capitalist production.

There were even a few feudal Lords which furthered Enlightenment and with it capitalist values [Wikipedia-Josephinism]. All this did not prevent capitalism from gaining control over society step by step obsoleting feudal rule at the same time.

Indeed here is something very important to learn about fundamental historical changes in general: The roots of the change emerge and grow in niches but there must be a expansion step where the germ form contradicts the old system full-scale while being important for the old system. If it does not contradict fully then there is probably not much potential. If it does not become important it is not (yet) strong enough compared to the old system and can be absorbed or vanishes again.

Dominance of capitalism and restructuring of society

As we know today capitalism took over slowly and feudal societies have been replaced by capitalism. This process took time. At least 100 years in the most industrialised countries but even today there are countries where pre-capitalist relationships are still important. One of the most important signs of the victory of capitalism over feudalism is that religion doesn't matter much nowadays [1].

Since with capitalism we can survey the development of a germ form from its early beginnings to its--as we suggest--replacement by a new mode of production we can also ask: What happened to the dominant production of the earlier form? Indeed part of the dominant production of the feudal form was agriculture. In feudalism agricultural production was really the main basis of the society--be it, because the big majority of people were involved in it.

Of course as far as the use value of the products is concerned, agricultural production is still an important basis for mankind. People need to eat and agricultural products are for eating. In fact in feudal times the majority of the people literally worked to eat.

Though agricultural production is of the utmost importance it became an appendix to industrial production step by step. Today agricultural production at least in the industrialised countries is totally dominated by the logic of industry and thus capitalism. Though agricultural production once dominated the social fabric today this is no longer the case. Though people still need to eat today they do not work for food but for money--and this difference is important because it indicates a fundamental change. Indeed this is a typical development if a germ form is in its restructuring step and takes over all of society.

If we think of peer production as a new germ form then if peer production reaches its restructuring step it will have organised industrial production according to its own logic. And probably as agriculture today differs largely from agriculture in the feudal ages this type of industrialisation will look differently from what we know today.

Mode of Production as the Driver

Following Marxian analysis it is the mode of production which was the most important driver for the change from feudalism to something new: capitalism. It was a fundamental change in the mode of production which changed not only the way goods are produced but the complete social fabric and--over time--this happened on a global basis. It was a fundamental change in the mode of production which ended one era of mankind and started another one.

One fundamental change for the germ form capitalism was the type of money usage and following from that the dominance of exchange based societal forms. Of course there are lots of phenomenons which are based on that--for instance capital and labour and its contradictions or property relationships to name just a few. But the core of capitalism is that success of a system based on exchange of commodities from isolated private producers.

A germ form inside capitalism pointing to a new logic must challenge this exchange based system or otherwise it will be absorbed by the dominant logic. And it needs to do this in a way which can be generalised enough. Otherwise it will stay a marginal phenomenon. A germ form with the capability to overcome capitalism must be a mode of production which works beyond any exchange based system--and at the same time does a better job. Just like capitalism did a better job than feudalism.

The shift from feudalism to capitalism shows what a change in the mode of production can mean once it is unleashed. Germ form theory gives us a perspective to understand how that development happened: In retrospective we can see how the germ form of capitalism developed. But--with the necessary caution--germ form theory can be applied to contemporary phenomenons as well. In the next section we will do that. We will explain the phenomenon of peer production mainly using the example of Free Software and show, where peer production is today using germ form theory.



In fact it seems like religion gains importance during the last few decades. However, we think this type of religion can not be compared to the feudal type of religion mainly because the new types of religion usually have no common church which is the centre of power as we know it for instance from the Christian church during the Dark Ages.

But even if the modern fundamentalisms of all sorts are considered a return of religion this is more an indication of the decline of Enlightenment than anything else. However, this type of fundamentalisms won't be able to create new societies which can be wished for by the children of the Enlightenment.

[2]It should be noted that this chapter is in some respects work in progress. A thorough analysis of early capitalism with germ form theory in mind is lacking very much and probably needs a major historical research program.


[Kurz-War]Robert Kurz, Schwarzbuch des Kapitalismus, Eichborn, Frankfurt/Main, 1999
[Marx-CMCvsMCM]Karl Marx, Capital, Vol. 1, Part. II: The Transformation of Money and Capital, 1867, online:

StefanMerten/Papers/CapitalAndClass/CapitalismAsGermForm (last edited 2009-06-02 16:59:24 by StefanMerten)

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