Rosa Luxemburg also emphasized the importance of pre-capitalist soci-
eties as new markets which could be controlled rather than left open to inter-
vention by other trading nations or left to be satisfied from within by
domestic producers. But she also showed how imperialism had to destroy
competition within pre-capitalist societies, by eradicating alternative
sources of supply so that the market could be monopolized by the imperial
power. That is what happened in India, where there had been a thriving local
textile industry based on cottage-scale production. Britain needed a market
for its own textiles, so imperialism required the systematic destruction of
local manufacturing capacity. This was accomplished by a combination of
discriminatory legislation, tariffs and subsidized competition.
For Rosa Luxemburg, colonialism represented capitalism’s need to
destroy what she called ‘natural economy’. She was consequently more
concerned than other Marxists with the effects of colonialism on the social,
political and economic structures within the colonies themselves. In social
organizations where ‘natural economy’ prevailed, such as simple peasant
communities, there was no demand for foreign goods and no surplus pro-
duction. In such economies the means of production and labour power were
bound together by the rule of law and custom. ‘A natural economy thus con-
fronts the requirements of capitalism at every turn with rigid barriers’
(Luxemburg, 1913, p. 369). Capitalism must therefore annihilate natural
economy wherever it is encountered. In the non-European countries the
methods used – coercion, taxation and commercial relations – were embod-
ied in colonial policies. Capitalism was not content with the means of pro-
duction that it could acquire through commodity exchange. Colonialism
gave it access to the productive forces of ‘vast tracts of the globe’s surface’.
Any opposition mounted by the colonized peoples was met by further
force: ‘permanent occupation of the colonies by the military, native risings
and punitive expeditions are the order of the day for any colonial regime’
(p. 371). Luxemburg saw British policy in India and French policy in Algeria
as the ‘classic examples’ of capitalism’s use of such methods. In India the
British enforced the compulsory alienation of land for tax arrears, artificially
created a landed aristocracy, and allowed the ancient irrigation system to
decay in its efforts to disrupt the social organization of the people. France, in
its determination to universalize private property among the Arabs of Algeria
and acquire land for French capitalists claimed uncultivated areas, estab-
lished settlements for the colonizers, imposed oppressive taxation, and broke
up joint family property, leading increasingly to ‘reckless speculation in
land, thriving usury and the economic ruin of the natives’ (p. 384).
Colonization had also assisted European capitalism by the destruction of
28 Understanding Third World Politics