Engels on the “External Market” and “Deindustrialization”

Abstract

Engels, often considered only a popularizer of Marx’s ideas, was an outstanding economist who proceeded along a trajectory independent of Marx’s. This chapter illustrates that with reference to his views on the market question under capitalism. Engels advanced three important propositions. First, a capitalist economy necessarily requires an external market, where it can sell goods at the expense of local pre-capitalist craft producers, thus unleashing a process of “de-industrialization.” Second, such capitalist penetration also destroys the very market it had originally created, owing to the “de-industrialization” that it unleashes. Third, countries coming late to capitalism cannot all have external markets to the required extent, so there is an ex ante tendency towards crisis and stagnation which is conducive to revolutionary praxis. Engels’s views on this range of themes are of abiding relevance to the dynamics of third-world economies.