Henry McLaughlin
Department of Politics, University of California, Santa Cruz

In its orthodox usage, the accumulation of capital refers to the process by which an investment of profit or assets generates a return. This could be an investment in financial, fixed, and/or non-productive assets, or the “human capital” of the workforce. The overall purpose of accumulation is to increase the value of the initial investment and produce new capital. After briefly summarizing its role in Adam Smith’s work, this entry will focus on accumulation’s nuanced role in the Marxist tradition, which sees the concept emerge as a key component in the capitalist mode of production.

Smith does not explicitly lay out the contours of capital accumulation (he never uses the term). However, according to Duncan Foley, Smith begins The Wealth of Nations (1776)

with a vision of capitalist economic development as a self-sustaining, largely self regulating virtuous circle of capital accumulation. The growth of wealth through private  initiative creates a wider and deeper market that allows for a more detailed division of  labor, which in turn raises labor productivity and creates more wealth. (Foley 1999, 4)

Smith views accumulation in the capitalist mode of production positively, as the “central engine of economic development” (Foley 1999, 4). Key to initiating this process of capital accumulation is frugality. Smith writes that

Whatever a person saves from his revenue he adds to his capital, and either employs it  himself in maintaining an additional number of productive hands, or enables some other person to do so, by lending it to him for an interest, that is, for a share of the profits… so the capital of a society, which is the same with that of all the individuals who compose it, can be increased only in the same Manner. (1776, 448)

Smith also writes that accumulation occurs through investment in “durable commodities,” the  means of production, and in the workforce: “It is by means of an additional capital only that the  undertaker of any work can either provide his workmen with better machinery or make a more  proper distribution of employment among them” (456). Capital reinvestment leads to greater efficiency in production which leads to greater wealth: accumulation as a “virtuous circle.”

Karl Marx’s concept of accumulation is somewhat different from both the contemporary (neoclassical) usage and its role in the classical political economy he criticized. For Marx, capital is a process, not just money and assets (not just a “thing”). It is expanding value, appropriated from the surplus-value of the working class’s labor, “the reconversion of surplus-value into capital” (Marx 1990, 734). The profits gained from appropriation are reinvested to gain more capital, which for Marx signals accumulation. He writes that “Accumulation is the conquest of the world of social wealth. It is the extension of the area of exploited human material and, at the same time, the extension of the direct and indirect sway of the capitalist” (740). Smith sees a “positive feedback between the extent of the market and the division of labor,” but Marx argues that this is based on the exploitation of labor (Foley 1999, 108). Capital, for Marx, therefore takes both constant (fixed) and variable forms. Constant capital is investment in production, whereas variable refers to wages paid to labor. In Capital Volume I (1867), Marx first mentions the “Sisyphean task” of accumulation in the context of money hoarding (1990, 231), which is similar to Smith’s claim that “Parsimony, and not industry, is the  immediate cause of the increase of capital” (448). Accumulation is first the act of saving. However, Marx sees capital accumulation as more than saving and reinvesting, it is also “vampire-like, [it] only lives by sucking living labour, and lives the more, the more labour it sucks” (324). Through the extension of the working day, laborers are paid less than they produce and capital (in-motion) expropriates this surplus labor. For Marx, as for Smith, accumulation increases social wealth. However, Marx also sees exploitation and its resulting exacerbation of inequality as a result.

Capital’s vampire like qualities are “obscured both by the splitting-up of  surplus-value and by the mediating movement of circulation” (Marx 1990, 710); they are hidden behind a veil of appearances. The classical political economists had  “metamorphosed” this process into a “pretended law of Nature… [which] excludes every  diminution in the degree of exploitation of labour, and every rise in the price of labour, which  could seriously imperil the continual reproduction, on an ever-enlarging scale, of the capitalistic  relation” (772). In the capitalist mode of production, “the labourer exists to satisfy the  needs of self-expansion of existing values, instead of, on the contrary, material wealth existing to  satisfy the needs of development on the part of the labourer” (772). Another key aspect of Marx’s theory is the crisis of overaccumulation, a situation in which the profit rate can’t keep up with the amount of capital invested (“the falling rate of profit”). Marx thought that this would inevitably reoccur and eventually lead to a new mode of production: socialism.

Marx concludes Capital Volume I by discussing the concept of primitive accumulation, the moment where laborers are “freed” from control over the means of production. Marx effectively ends his long theoretical account with the historical origins of capitalism, its initial bouts of accumulation. Primitive accumulation, “(the ‘previous  accumulation’ of Adam Smith) which precedes capitalist accumulation… is not the result of the capitalist mode of production but its point of departure” (873). Primitive accumulation signals the historical beginning of wage labor and “a degraded and almost servile condition of the mass of the people, their transformation into mercenaries, and the transformation of their means of labour into capital” (881). Most of the early political economists had attributed primitive accumulation to peaceful and hardworking merchants who had gained an excess of capital independent of state power. For Marx, however, primitive accumulation occurs through slavery, colonialism, forced dispossession, and “the spoliation of  the Church’s property, the fraudulent alienation of the state domains, the theft of the common lands, the usurpation of feudal and clan property and its transformation into modern private property under circumstances of ruthless terrorism” (895). This implies that the violence of dispossession is not an aberration of capitalism but its precondition, and that the state plays a role in primitive accumulation.

Rosa Luxemburg offers a significant addition to Marx’s analysis of accumulation in The Accumulation of Capital (1913), and David Harvey expands upon both with the notion of “accumulation by dispossession” According to Luxemburg, the growth of capitalism leads to a search for new markets and labor pools in non-capitalist areas. Without new markets to resolve the crisis of overproduction, capitalism would collapse. For Luxemburg:

The other aspect of the accumulation of capital concerns the relations between capitalism and the non-capitalist modes of production which start making their appearance on the international stage. Its predominant methods are colonial policy, an international loan system–a policy of spheres of interest–and war. Force, fraud, oppression, looting are openly displayed without any attempt at concealment, and it requires an effort to discover within this tangle of political violence and contests of power the stern laws of the economic process. (Luxemburg 1913, 452-3, as cited in Harvey 2003, 73)

David Harvey explains that the dual aspects of surplus value appropriation and the expansion of markets are “‘organically linked’ and ‘the historical career of capitalism can only be appreciated by taking them together’” (Harvey 2003, 73). Accumulation occurs through expropriation as production expands; it simultaneously occurs through imperialism and war (“accumulation by dispossession”). Harvey effectively brings Luxemburg and Marx’s primitive accumulation up to the present day, writing that the “the whole pattern of turbulence in the relations between state, supra-state, and financial powers on the one hand, and the more general dynamics of capital accumulation (through production and selective devaluations) on the other, has been one of the most signal, and most complex, elements in the narrative of uneven geographical development and imperialist politics to be told of the period since 1973” (70). Financialization, “crisis capitalism,” the privatization of industries in the public sector and lands in the public trust have drastically increased since the neoliberal turn of the mid 1970s. According to Harvey, unproductive and speculative investing has a geographic component and is creating “deep impacts upon the overall dynamics of capital accumulation… it facilitated the re-centering of political-economic power  primarily in the United States but also within the financial markets of other core countries (Tokyo, London, Frankfurt)” (72).

Other notable scholarship on accumulation includes Joan Robinson’s  post-Keynesian/Marxist analysis of economic growth, The Accumulation  of Capital (1956), Immanuel Wallerstein’s work on world systems theory, feminist critiques such as Maria Mies’ Patriarchy and Accumulation On A World Scale (1986) and Silvia Federici’s Caliban and the Witch (1998), and Jason W. Moore’s ecological critique Capitalism in the Web of Life (2015). Federici, for example, takes a feminist approach to accumulation, arguing that the  disciplining of women’s bodies, the reorganization of the medieval family structure, and the rise  of witch hunts were crucial to primitive accumulation, and that capital accumulation does not signal a liberatory stage of history. According to Federici, primitive accumulation did not just constitute “the expropriation of European workers from their means of subsistence, and the  enslavement of Native Americans and Africans to the mines and plantations of the ‘New  World,’… [but] the transformation of the body into a work-machine, and the subjugation of  women to reproduction of the work-force” (1999, 63). Furthermore, as women’s “labor, their sexual and [their] reproductive powers were placed under the control of the state and transformed into economic resources,” the body was not only commodified but also regulated and cast in a new light (hence the witch hunts)  (170). Federici shows us how accumulation also appropriates “differences and divisions within the working class,” and exacerbates hierarchies of gender, race, and age (not just bodies) in the capitalist system at large (63-4). 

Moore, on the other hand, constructs a combined environmentalist, feminist, and Marxist analysis of accumulation, placing its logic within a greater “world ecology.” For Moore, accumulation is not just a way of appropriating wealth or power, but of appropriating nature’s “free gifts,” and of  organizing nature itself. Capitalism depends on “appropriating the unpaid work/energy of  humans and the rest of nature outside the commodity system” (Moore 2015, 54). Moore writes that  “Every great wave of accumulation begins with a high ecological surplus” (the sources of unpaid  work in service to accumulation), meaning that accumulation is more than just transferring wealth from the noncapitalist world (98). Accumulation is oriented toward “restructuring  the relations of production–human and extra-human alike–so as to allow the renewed and  expanded flow of Cheap labor, food, energy, and raw materials into the commodity system” (98). Taken together, these last two works offer greatly expanded notions of accumulation, and demonstrate how we might continue to see it as a guiding logic of  capitalism today.

(See Capital, Class, Nature, Primitive Accumulation, Production, War)

Bibliography

Harvey, David. “The ‘New’ Imperialism: Accumulation by Dispossession.” Socialist Register, 2004: the New Imperial Challenge, edited by Colin Leys and Leo Panitch, Merlin, 2003, pp. 63–87. 

Luxemburg, Rosa. The Accumulation of Capital. Routledge, 2013,
libcom.org/files/luxemburg%20the%20accumulation%20of%20capital.pdf. 

Federici, Silvia. Caliban and the Witch. Autonomedia, 2014. 

Foley, Duncan. Notes on the Theoretical Foundations of Political Economy.
1999, www.economia.unam.mx/jarojas/poleconprintFoley.pdf. 

Marx, Karl. Capital: Volume I. Penguin Books, Inc., 1990. 

Moore, Jason W. Capitalism in the Web of Life: Ecology and the Accumulation of Capital. Verso, 2015. 

Smith, Adam. An Inquiry Into the Nature and Causes of the Wealth of Nations. Electric Book Co., 1998.

Henry McLaughlin
Department of Politics, University of California, Santa Cruz

An enclave is a territory, be it political, economic, social, ethnic, cultural, or some  combination, surrounded by another distinct territory. This is not to be confused with an exclave, a territory geographically separate from but ‘belonging to’ a central territory. However, exclaves can also be enclaves; for example, between 1949 and 1990 West Berlin was both a political enclave within East Germany and an exclave of West Germany. Subnational economic and urban enclaves have become increasingly relevant in contemporary capitalism and globalization as they provide spaces for reterritorialization, deregulation, racial and socio-economic segregation, financial secrecy, ecological privilege, a ‘fascistic locality’ (Hardt and Negri 2000, 362), and erosion of the public sphere.

Enclaves come in numerous forms. Among sovereign states, Lesotho, San Marino, and Vatican City are enclaves. States such as the Gambia (surrounded by Senegal), or subnational municipalities such as the Spanish cities of Ceuta and Melilla (surrounded by Morocco) on the Mediterranean coast and the US state of Alaska, are within another territory apart from a coastal border, and are therefore considered partial enclaves. Other types include embassies and military bases like the many American “enclaves” scattered across the world, special security zones like the fortified international “green zone” in Baghdad, and post-Soviet “closed cities” which host secretive military research. Many enclaves are open and exist without conflict, like the village enclaves on the Belgian-Dutch border. The status of some, however, are violently disputed, like the majority Armenian Nagorno-Karabakh enclave in Azerbaijan. The latter is an example of a political and ethnic enclave, but there are of course ethnic enclaves which are not inherently political (one only has to look at an ethnic map of Bosnia and Herzegovina, or the Middle East, to see the ill-fated task of dividing political borders around ethnic enclaves). Ethnic enclaves contain a high concentration of an ethnic group compared to surrounding areas, for example “Chinatowns” in American cities. These enclaves work to strengthen social capital and often form networks with each other, but remain part of their surrounding municipal territory.

While political and ethnic enclaves are important for political-economic analyses in terms of capital flows and social capital theory, economic and urban enclaves are more overtly  relevant here. On enclaving in the context of globalization, Matthew Sparke writes

The projects and landscapes involved range in spatial scale from large transnational  regions and special economic zones, to sub-national resource-extraction enclaves, to  business improvement districts within cities and towns, to self-contained tourism resorts  such as Disneyland and cruise ships, to personal strategies of self-securitization that  range from buying weapons and fortified deadbolts to investment in such mobile enclaves as SUVs, yachts, and for the most mobile yet enclaved of all, private executive jets. (2013, 313)

Enclaves throw a wrench in the narrative of a borderless, deterritorialized world as they  reterritorialize at many levels. Economic enclaves such as special economic zones (SEZs), or free trade zones, are especially prevalent in burgeoning East and South East Asian cities (not to be confused with former concession enclaves like Hong Kong and Macau). According to  Sparke, they “represent especially opportunistic economic efforts to fix global capital in local  space through political exceptionalism,” (314-5). SEZs attract both “peasant farmers who have  lost their farmlands as much as to economists who have lost faith in traditional governments”  (316). These enclaves both consolidate labor, they keep workers inside, and keep institutional  regulatory barriers outside. This is evident in the very architecture of SEZs, which are often  demarcated by the same security apparatuses which guard the military enclaves mentioned above and the urban enclaves discussed below.

Continuing on the macro-level, some scholars believe that enclaves precipitate new analyses of globalization. James Sidaway, for instance, writes that in a break from “prior meta-geographical demarcations; the categories such as ‘Developed’ and ‘Third World’… have shattered and re-converged around enclaves” (2007, 336). What we recognize as uneven development is “increasingly expressed in enclave spaces… being governed by a range of legal norms and bounded in an array of formal and informal means that frequently cut-across established state boundaries” (Sidaway 2007, 322). Sidaway cites a range of examples: mineral enclave economies in sub-Saharan Africa, export processing zones in East Asia, and the international (western) enclaves in the financial Gulf State cities. Dubai, for example, has a “constellation” of expatriate compounds, wealthy urban villas, fortified shopping malls, and migrant worker quarters back to back with different types of sovereignty for each. The creation of a financial and tech hub allows its rulers to formally compartmentalize modern or “open” “Western business culture and recreational decadence” and traditional “lineage-based power and Islamic law” into separate geographic spaces (335). To say that the UAE, or any country for that matter, might be too crude of a statement when development appears through an enclaved patchwork.

In contrast to the “open” neoliberal discourse surrounding formal economic enclaves,  wealthy urban enclaves are often “closed” out of fear, the desire to exclude, and to enhance social  prestige. Just as the economic enclaves “are predicated on efforts to exclude and/or suspend the  rights of others” (Sparke 2013, 314), “Urban enclaving has also been marked by similarly stark  divisions between the privileged spaces of class-advantaged citizenship and the dangerous and  dispossessed margins of sub-citizenship” (323). Urban enclaves have become more prevalent in  cities with the loss of industry, the movement of finance to city centers, and increased crime rates  in the last forty years. According to Teresa Caldeira,

all types of fortified enclaves share some basic characteristics. They are private property  for collective use; they are physically isolated, either by walls or empty spaces or other  design devices; they are turned inward and not to the street; and they are controlled by  armed guards and security systems that enforce rules of inclusion and exclusion… they  possess all that is needed within a private and autonomous space and can be situated  almost anywhere, independent of the surroundings. In fact, most of them have been  placed in the old periphery and have as their neighbors either favelas or concentrations of  autoconstructed houses. (1998, 119)

Caldeira implies that these enclaves emerge dialectically with peripheral slums. Enclaves “appeal  to those who are abandoning the traditional public sphere of the streets to the poor, the  ‘marginal,’ and the homeless” (114). Furthermore, urban enclaves are visually indistinguishable  from their military and economic counterparts. When building these “High tech castles,” as Mike Davis calls them, “Residential architects are borrowing design secrets from overseas embassies  and military command posts” (1992, 248). Peter Marcuse, for one, defines these spaces as “citadels,” distinct from pure enclaves. Both are “spatially concentrated areas [with]…members  of a particular population group” (1997, 314). However, whereas the enclave self defines “by ethnicity or religion or otherwise, [and] congregate[s] as a means of enhancing… economic, social, political, and/or cultural development,” the citadel is “distinctively post Fordist” (313) and is “defined by its position of superiority in power, wealth, or status in relation to its neighbors, [and] congregate[s] as a means of protecting or enhancing that position” (314).

Urban enclaves are not necessarily physical  “fortresses” or “citadels.” There are  other ways of protecting and enhancing their position. Marcuse writes that “social patterns and  even legal restrictions may be in place that define those areas of concentration as sharply as if  there were physical walls” (320). Davis concurs, citing “luxury enclaves like Beverly Hills and  San Marino” which restrict “access to their public facilities, using baroque layers of regulations  to build invisible walls. San Marino [California], which may be the richest, now closes its parks  on weekends to exclude Latino and Asian families from adjacent communities” (246). The urban enclave, like its economic counterpart, develops through both physical and legal  infrastructure. Locating a fusion of economic and urban enclaves marked, Sparke writes that  residents of “Business Improvement Districts” (BIDs) “can join anti-tax revolts with impunity,  and they can support politicians who campaign for ‘smaller government’ and other neoliberal  reforms without worrying that this will diminish their own special services. BIDs therefore also  represent a political and economic bid to entrench neoliberal norms of citizenship in urban  space” (327). BIDs do not require physical infrastructure to “entrench neoliberal  norms of citizenship” and create their enclave space.

Economic and urban enclaves enhance political and economic exclusivity, and in doing  so erode the public sphere. The goal of these enclaves is “to segregate and to change the  character of public life by bringing to private spaces constructed as socially homogeneous  environments those activities that had been previously enacted in public spaces” (Calderia 1998, 129). For example, “When planning and development lead to the conversion of office space to residential space in the financial district of Manhattan, the result is a further separation of those  working there, now living there also, from the rest of the city” (Marcuse 1997, 319). Beyond  zoning, practices like parking permits, checkpoints, and internal passport control might precede the construction of actual walls, but all seek to move public activities into the private. In Empire  (2000), Michael Hardt and Antonio Negri also identify this phenomenon:

The urban landscape is shifting from the modern focus on the common square and the public encounter to the closed spaces of malls, freeways, and gated communities… it no longer makes sense to understand social organization in terms of a dialectic between private and public spaces, between inside and outside. The place of modern liberal politics has disappeared, and thus from this perspective our postmodern and imperial  society is characterized by a deficit of the political. In effect, the place of politics has  been de-actualized. (2000, 188)

Furthermore, the assumption that a fortified enclave or gated community is inherently a local  phenomenon, or has some claim to local nature, is misplaced. Sparke writes that “gated  communities nevertheless remain worldly in their own way, frequently referencing one another  in attempts to normalize the landscapes of neoliberal privilege” (323). Inside the urban enclave, it is difficult to tell exactly where one is in relation to the outside world, only that one is in the spectacle of a global enclave.

Following this, we can add the emergence of an “ecological enclave.” Steve Vanderheiden uses the term “eco-fortress” to describe a mentality towards climate change “characterized by a desire to maintain exclusive control over scarce resources at the expense of  the disadvantaged” (2020, 20). It “prioritizes sustainability within one’s own  territory above competing ideals like justice and democracy that it practically sets those aside,  rather than seeking any kind of balance” (24). Vanderheiden is speaking philosophically, but the  “eco-fortress” can also describe a literal type of enclave. For example, many coastal homes in Southern California are surrounded by fortress-like seawalls which literally erode public space,  beaches in the public trust, and keep public crises (climate change) out of sight and out of mind.  In The Slums of Aspen (2013) Lisa Sun-Hee Park and David N. Pellow describe an eco-enclave of wealthy and ostensibly liberal, environmentally-minded residents in Aspen, Colorado and the peripheral migrant laborers crucial to the city’s economy. There is a growing link between  environmentalism, immigration reform, nationalism, and enclaves where

people who construct themselves as the rightful inhabitants or owners of ecological systems and resources exclude  others from gaining access to those spaces… some people ‘naturally’ belong… while others naturally do not belong… a new twist on the ‘old’ racism associated with biological differences;  it just comes wrapped in a green package. (Park and Pellow 2013, 203)

The eco-enclave might appear as a special garden community, or an ark to outlast climate change, but it often masks old racist tropes.

Finally, offshore “enclaves” lack a clear inside-outside dynamic, but have a crucial role  in the global political economy. Oceanic enclaves are surrounded by international waters, and  include private islands, tax havens, mobile superyachts, and the Silicon Valley dream of cities at  sea. Milton Friedman’s grandson, Patri Friedman, together with libertarian venture capitalist  Peter Thiel have founded the Seasteading Institute, which envisions future cities in international  waters and a unique seazone in French Polynesia. According to Liam Campling and Alejandro  Colas, as both “an actual place and a legal fiction, the offshore world is characterised by  exception and exemption: from the laws, regulations and oversight that obtain ‘onshore’ (be that  geographical mainland or a legal body of norms and conventions)” (Campling and Colas 2021,  268). The offshore world is seemingly a space for both financial secrecy and futuristic, utopian  projects free from politics. However, like their terrestrial counterparts, oceanic enclaves recreate new political sovereignties and “the security of being firmly plugged into the legal, financial and communication networks of global capital” (277). These enclaves become not just a place of separation or deterritorialization, but the recreation of landed enclaves at sea, a reterritorialization.

(See De/Reterritorialization, Enclosure, Geopolitics, Nature, Underdevelopment)

Bibliography 

Caldeira, Teresa. “Fortified Enclaves: The New Urban Segregation.” Chapter. In Cities and Citizenship, edited by James Holston, 114–38. Durham, NC: Duke University Press, 1998.

Campling, Liam, and Alejandro Colas. “Offshore.” Chapter. In Capitalism and the Sea: The Maritime Factor in the Making of the Modern World, 267–310. London: Verso Books, 2021.

Davis, Mike. City of Quartz: Excavating the Future in Los Angeles. Vintage Books, 1992.

Hardt, Michael, and Antonio Negri. Empire. Cambridge, MA: Harvard University Press, 2000.

Marcuse, Peter. “The Ghetto of Exclusion and the Fortified Enclave: New Patterns in the United States.” American Behavioral Scientist 41, no. 3 (1997): 311–26.

Park, Lisa Sun-Hee, and David N. Pellow. The Slums of Aspen: Immigrants vs. the Environment in America’s Eden. New York, NY: New York University Press, 2013.

Sidaway, James D. “Enclave Space: a New Metageography of Development?” Area 39, no. 3 (2007): 331–39. https://doi.org/10.1111/j.1475-4762.2007.00757.x. 

Sparke, Matthew. Introducing Globalization: Ties, Tensions, and Uneven Integration. Wiley Blackwell, 2013.

Vanderheiden, Steve. Environmental Political Theory. Polity Press, 2020.

Henry McLaughlin
Department of Politics, University of California, Santa Cruz

Fossil fuels—crude oil, coal, and natural gases—are naturally occurring, high carbon substances which release energy upon combustion. They are created through the decomposition, compression, and heating of dead organisms in the earth’s crust. This process takes millions of years, effectively making them a “non-renewable” energy source. Fossil fuels are a crucial part of global capitalism, trade, currency systems, labor struggles, transportation, infrastructure, colonialism, state geopolitical strategies, war, pollution, and climate change. In 2018, fossil fuels made up roughly 82% of fuel consumption globally.

Coal was capitalism’s “first” fossil fuel, propelling the industrial revolution in eighteenth-century Britain. It had long been used for domestic purposes and manufacturing that required heating, but, as Andreas Malm explains, “For coal to be universalised as a fuel for all sorts of commodity production, it had to be turned into a source of mechanical energy – and, more precisely, of rotary motion” (Malm 2013, 18). Scholars have often thought the steam engine became popular because it was an effective substitute for hydropower during periods of water scarcity. However, in a critical analysis of “fossil capital,” Malm argues that the shift from riverside mills to coal powered steam engines in northern England was not due to scarcity or cost, rather it was a purposeful maneuver by industrialists:

In steam-engine manuals, essays on the factory system, testimonies from manufacturers and other contemporary sources, this is the single most salient motive: steam was a ticket to the town, where bountiful supplies of labour waited. The steam engine did not open up new stores of badly needed energy so much as it gave access to exploitable labour. (33)

Energy could now come from anywhere, and manufacturing regions sprung up on top of coal fields in places like Western Pennsylvania, Lancashire and Yorkshire, Southern Wales, and Silesia. Coal transformed daily life, relations between city and country, and the agrarian countryside itself. Water power actually remained cheaper until 1870, at which point steam engines had long predominated energy production, proving that fossil fuels were a crucial part of the control of labor (31). Malm also suggests that fossil fuels facilitate the creation of value: 

Valorisation proceeds through combustion. Fossil capital, in other words, is self-expanding value passing through the metamorphosis of fossil fuels into CO2…One could think of this as the biophysical shadow of Marx’s general formula of capital, coming to the forefront only in the times of unexpected biospheric dusk. (52)

The fossil fuel cycle appears as an epiphenomenon; fossil fuels are one of nature’s free gifts added to the commodity without a second thought—that is, until nature comes fighting back in the form of climate change (“biospheric dusk”). Malm concludes that fossil fuels are best understood as a social relation: they don’t become fuel on their own, nor do they “satisfy subsistence needs. Rather, fossil fuels necessitate commodity production and waged or forced labour as components of their very existence” (17).

Despite the implications of these theories, coal’s role in the history of capitalism is not completely characterized by exploitation and dispossession. Timothy Mitchell has notably theorized the relationship between fossil fuels, political power, and democracy, noting “the ability of organised workers to assemble a political machine out of the networks and nodal points of a coal-based energy system had shaped the kinds of mass politics that emerged, or threatened to emerge the first half of the twentieth century” (Mitchell 2013, 42). However, these nodal points in the “fossil fuel network”—the factory floor, railroads, docks, etc.—were greatly altered with the emergence of oil. Mitchell explains:

From the 1920s onwards, about 60 to 80 percent of world oil production was exported. So much oil was moved across oceans that, by 1970, oil accounted for 60 per cent of seaborne cargo worldwide. Compared to carrying coal by rail, moving oil by sea eliminated the labour of coal heavers and stokers, and thus the power of organised workers to withdraw their labour from a critical point in the energy system. Transoceanic shipping operated beyond the territorial spaces governed by the labour regulations and other democratic rights won in the era of widespread coal and railway strikes. (37-38)

Western powers turned to oil and its smooth transportation as a way to manage democratic politics. Colonial powers and oil companies also purposefully delayed extracting oil from the Middle East (namely in what is now Iran and Iraq), in order to control its price and keep friendly authoritarian regimes in charge.

While coal is still used today (China produces much of it), in the twentieth century the world’s predominant fossil fuel became oil. In his massive history of oil and its politics, The Prize (1991), Daniel Yergin highlights three themes which underlie the story of oil: the expansion of capitalism, oil’s role in national geopolitical strategies, and the emergence of a “hydrocarbon society” (Yergin 2009, xv-xvi). For example, oil changed the nature of the corporation and production at the turn of the century. Standard Oil became one of the first multinational corporations, controlling all aspects of production and processing. Oil also changed the face of war: in the First World War, factories were able to mass produce weapons and ammunition, and merely a quarter of a century after the development of the internal combustion engine, tanks and planes entered the battlefield. Control of oil was a major strategic objective in WWII—Hitler’s drive to oil fields in the Caucasus set the stage for some of the deadliest battles in history.

In the postwar years, energy consumption rose dramatically across the globe. According to Yergin, “Total world energy consumption more than tripled between 1949 and 1972. Yet that growth paled beside the rise in oil demand, which in the same years increased more than five and a half times over” (523). In the US, demand for oil grew with the economy, and as a response to massive labor strikes in the country’s coalfields. Moreover, demand grew with “the transformation of America into an automotive culture” and “the emergence and proliferation of a temple dedicated to the new fuel and the new way of life—the drive-in gasoline station” (192). Oil also facilitated “the industrialisation of agriculture” and “the rise of synthetic materials” during this period (Mitchell, 140-141). While Russia had dominated oil production at the start of the century, and the USSR and Saudi Arabia would lead production by the 1980s, the US was the world’s largest producer in the middle of the century. Panitch and Gindin explain that after WWII, the US 

assumed responsibility for overseeing the international oil companies’ control of [oil in the Middle East, and]… the source of European oil supplies was shifted, so that by 1950, 85 percent of Europe’s oil was coming from the Middle East. This preserved American oil for American needs… the nature of postwar economic growth in both the US and Europe led to an explosion of demand for oil. A mobile suburban car culture; the expansion of trucking for mass production and distribution; the growth of commercial aviation; new industries in chemicals, plastics, and fertilizer—all this required more oil, cheap oil, and above all secure oil… The relationship between the American state and US oil companies in this process thus already epitomized “globalization”: US companies producing for markets abroad. (Panitch and Gindin 2012, 103)

The US was therefore not just seeking to control oil for its own consumption but to balance power in international relations during the Cold War. Consequently, fossil fuels became more closely tied to finance. At Bretton Woods, there was a broad consensus that “postwar financial stability, and thus the future of democracy, depended on managing the storage and exchange of key commodities. Increasingly the movement of just one commodity, petroleum, provided the mechanism that stabilised, or threatened to disrupt, the democratic order” (Mitchell, 112). After other currencies were pegged to the dollar, dollars began to outpace gold reserves due to rapidly expanding, fossil fuel driven global trade. However, the value of the dollar survived because “countries had to use the American currency to purchase the essential materials that formed the bulk of international trade, above all oil” (Mitchell, 111). Oil provided the basis for faith in ever expanding growth, and thus underpinned the “economy” as a distinct, recognizable entity.

Fossil fuels also became tied up with movements for self-determination in the global south. On the one hand, the first half of the century had proved that “oil equals power” (Yergin, 212). Yergin explains that on the other hand, “now more than the economics of the marketplace had to be factored into the equation. If oil was power, it was also a symbol of sovereignty. That inevitably meant a collision between the objectives of oil companies and the interests of nation-states, a clash that was to become a lasting characteristic of international politics” (212). Out of this climate of self-determination (not to be confused with democratization), the Organization of the Petroleum Exporting Countries (OPEC) was founded in 1960. OPEC is an international organization of states seeking a united front in policy-making, reducing competition, and setting global oil prices. OPEC countries do not produce most of the world’s oil, but they collectively control a high proportion of its reserves.

In response to American support for Israel during the 1973 Arab–Israeli War, OPEC’s Arab countries raised production taxes and launched an oil-embargo against the US, inducing a price shock. OPEC countries grew wealthy “sitting on petrodollars. OPEC countries were able to send out loans to whoever wanted them, developing countries couldn’t help themselves” (Hobsbawm 474). Furthermore, Yergin explains that “the price shock of 1973 was the rise of a new line of work–oil price forecasting. Before 1973, it had not really been necessary. Price changes had been measured in cents, not dollars, and for many years prices were more-or-less flat. After 1973, however, forecasting blossomed’” (653). This crisis, perhaps what should have been a warning against reliance on fossil fuels, had no effect on consumption. Eric Hobsbawm argues that the events of 1973 (we can also add the 1979 oil shock following the Iranian Revolution) prove that, in a free market society, the effect of multiplying energy costs twelve-to fifteen fold in six years, is not to diminish energy use but to make it more efficient, while encouraging massive investment in new and environmentally dubious sources of irreplaceable fossil fuel. These changes would lower the price again and encourage more wasteful use (570).

Consumer demand for fossil fuels has remained high since the 1970s. However, despite it waning from the public discourse by the end of the century (Yergin, 765), oil returned to the center stage of world politics following 9/11 and wide suspicions that the US invasion of Iraq was ultimately about oil. Above all, fossil fuels are more relevant than ever because of a widespread understanding that climate change is accelerating. Fossil fuels are the physical cause of our crisis, or as Malm shows us, they might rather be considered the social cause (see above). Fossil fuels have long been criticized for pollution—smog, oil spills, and ocean acidification. However, the carbon dioxide they release into the atmosphere has raised global temperatures about 2.12 degrees Fahrenheit since the industrial revolution, leading to melting ice caps and warming and rising oceans. In conclusion, the eminently political nature of fossil fuels, as well as the nexus between oil and the state that has been described here, continue to be relevant in the context of climate change. In the US, for example, in the wake of the Dakota Access Pipeline protests, many states passed critical infrastructure bills, effectively criminalizing protests against oil pipelines and hydraulic fracking sites. There is little doubt that we could “cut global emissions by 7.6 Percent every year for the next decade to meet the 1.5°C Paris target”; to say that oil states/companies will let the collective mobilization necessary for a just transition happen is quite another proposition.

(see Bretton Woods, Crisis, Geopolitics, Extractivism, Nature)

BIBLIOGRAPHY

“ALEC’s Attacks on People of Color, Civic Engagement, and Dissent.” ALECAttacks. Center for Constitutional Rights, 2019.
https://www.alecattacks.org/alec-attacks-civic-engagement-and-dissent.

“Climate Change Evidence: How Do We Know?” NASA. NASA, May 10, 2021. https://climate.nasa.gov/evidence/.

Hobsbawm, Eric. The Age of Extremes: A History of the World, 1914-1991. New York, NY: Vintage Books, 1996.

Malm, Andreas. “The Origins of Fossil Capital: From Water to Steam in the British Cotton Industry.” Historical Materialism21, no. 1 (2013): 15–68. https://doi.org/10.1163/1569206x-12341279.

Mitchell, Timothy. Carbon Democracy: Political Power in the Age of Oil. London: Verso, 2013.

Panitch, Leo, and Sam Gindin. The Making of Global Capitalism: the Political Economy of American Empire. London: Verso, 2013.

“World Energy Balances 2020: Overview.” iea.org. International Energy Agency, 2020. https://iea.blob.core.windows.net/assets/23f096ab-5872-4eb0-91c4-418625c2c9d7/World_Energy_Balances_Overview_2020_edition.pdf.

Yergin, Daniel. The Prize: The Epic Quest for Oil, Money & Power. London: Simon & Schuster, 2009.

Alberto Ganis
Department of Politics, University of California, Santa Cruz

Even though its existence has been a constant throughout human history, the use of the term labor migration gained traction in post-World War Two Europe as a response to the need of a new workforce to replace the one lost during the war. In general, this term refers to the movement of able-bodied men from former colonies and developing countries to West European countries that suffered a great loss of lives during the World Wars and that were dealing with an economic boom boosted by aid policies like the Marshall plan. According to Rita Chin (2002), in Germany, Austria and other European countries, young laborers would be allowed to stay one or two years and due to their fleeting status, they were called “guest workers” or migrant workers. According Article 2(1) of the 1990 International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families defines the term “migrant worker” as: “a person who is to be engaged, is engaged, or has been engaged in a remunerated activity in a State of which he or she is not a national”(IOM Report, 2018). As we are seeing, there is some uncertainty surrounding the specific definition of labor migration and migrant workers. This is principally due to the fact that such categories are contingent on geographic, legal, political, temporal, etc. contexts that are specific to the country that defines them and the policies that address them, including in relation to place of birth, citizenship, place of residence and duration of stay (IOM Report, 2018[LV1] ).

It is important to point out that the term labor migration exists in part outside traditional trade and economic theory because “owners of labor have both feelings and independent wills. Indeed, most aspects of human behavior, including migratory behavior, are both a response to feelings and an exercise of independent wills” (Stark & Bloom 1985, 173). The social aspect of this matter is at the core of social science research regarding issues of multiculturalism and integration. Due to the demographics of the countries involved in the migration routes of today and the past, race and diversity are the central nexuses of social attrition. As Balibar (1991) puts it, “collectivities of immigrant workers have for many years suffered discrimination and xenophobic violence in which racist stereotyping has played an essential role” (1991, 20).

Having briefly addressed the migration part of the term, it is crucial to explain the concept of labor and its relation to the worker: The term labor became common starting in the nineteenth century, around when the revolutionary “labor theory of value” was developed. The idea is that the value of goods/commodities is determined by the labor/work put into their production. (Smith 1776; Marx 1887). In Marx’s terms,

A use-value, or useful article, therefore, has value only because human labor in the abstract has been embodied or materialized in it. […] Plainly, by the quantity of the value-creating substance, the labor, contained in the article. The quantity of labor, however, is measured by its duration, and labor-time in its turn finds its standard in weeks, days, and hours. As values, all commodities are only definite masses of congealed labor-time. (Marx 1877, 11)

Relying on this definition of labor, Smith discusses the importance of the division of labor in order to achieve maximum wealth/productivity. He proposes that rather than have laborers taking care of the whole production of a single good, dividing the labor among specialized “mono-taskers” would prove itself more fruitful and efficient. This efficiency is related to the skills of the laborer and therefore to the time and resources needed to produce the finished commodity. Smith (1776) goes on by stating that the division of labor is limited by the extent of the market, since “when the market is very small, no person can have any encouragement to dedicate himself entirely to one employment” (35). His idea holds true also in the case of labor migration, specifically in post-World War II Europe. The economic boom implied an enlargement of the market and the lack of workforce could not fulfill the demand for unskilled labor that is characteristic of the theory of division of labor. To remedy such need, many European countries developed legislation and other programs aimed at fostering the influx of cheap, unskilled, specialized labor from their colonies, former colonies, and other developing countries.

The division of labor is important because its diffusion in the developed economies opened the doors to the need of large quantities of relatively unqualified labor that could quickly specialize and become integrated within the production chain. In Germany for example, the “guest workers found employment as unskilled or semiskilled laborers, especially in areas that required heavy or dirty work, shift work, and repetitive production methods. This allowed German nationals to move into more desirable kinds of tasks” (Chin 2002, 47). The specialization of labor caused by its division creates “‘undifferentiated human labor’, that is ‘like all other commodity producing labor, it is . . . labor in its directly social form’” (Marx 1887; Marx 1990 as cited in Tomba 2009, 50). Labor becomes an exchangeable good removed from the means of production where owners of labor must usually move along with their labor, uprooting themselves and their families with sociocultural implications that end up affecting the individuals involved as much as the hosting country. On the other hand, the  owners of production inputs or commodities, can simply trade their end products abroad so as to maximize profits or utility (Stark & Bloom 1985; Smith 1776). The commodification of labor affects the decision making of the owners of labor in a manner that is foreign to the owners of the means of production. In fact, according to Marx, the worker as an economic entity is directed to activities chosen by the bourgeoisie in order to profit by extracting the maximum surplus value possible through the exploitation of the worker.

(See Labor, Europe, Enclosure/Border, Sovereignty, Capital)

BIBLIOGRAPHY

Chin, Rita. “Imagining a German Multiculturalism: Aras Ören and the Contested Meanings of the ‘Guest Worker,’ 1955–1980.” Radical History Review 2002, no. 83 (2002): 44–72. https://doi.org/10.1215/01636545-2002-83-44. 

Marx, Karl. “Capital: a Critique of Political Economy.” Economic Manuscripts: Capital:
Volume One, 1887. https://www.marxists.org/archive/marx/works/1867-c1/. 

Smith, Adam. An Inquiry in the Nature and Causes of the Wealth of Nations. MetaLibri Digital Library, 2007 [1776]. https://www.ibiblio.org/ml/libri/s/SmithA_WealthNations_p.pdf. 

Stark, Oded, and David E. Bloom. “The New Economics of Labor Migration.” The American Economic Review 75, no. 2 (1985): 173–78. 

Tomba, Massimiliano. “Historical Temporalities of Capital: An Anti-Historicist Perspective.” Historical Materialism 17, no. 4 (2009): 44–65.
https://doi.org/10.1163/146544609×12537556703115. 

“World Migration Report 2018.” World Migration Report, 2019.
https://worldmigrationreport.iom.int/2018.