World Development: An Introduction
320
World Development: An Introduction
320Paperback
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Product Details
| ISBN-13: | 9780745314020 |
|---|---|
| Publisher: | Pluto Press |
| Publication date: | 08/20/2001 |
| Pages: | 320 |
| Product dimensions: | 5.50(w) x 8.50(h) x (d) |
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CHAPTER 1
Introduction
Gavin Capps
The development of capitalism on a world scale began in Europe. This was characterised by the development of the urban crafts in the Italian and German medieval city states which (for the first time) in human history represented the irreversible victory of town over country. The break-up of the feudal manorial estates and the expansion of commodity production (that is, production and exchange for sale) appeared initially in the form of specialisation in production and exchange between these city states. The expansion of the world economy appeared initially in the form of 'windfall' profits made from trade in scarce commodities, such as precious minerals and spices by European merchants. This is referred to as the period of 'mercantile trade'. The subsequent development of 'machinofacture', that is the increased application of machinery to production and the development of the factory system, laid the basis for a development which was different in scale and kind to that of mercantilism.
British capitalism appeared as a particularly powerful force because before any of the other European nations and city states, it had made the transition to nationhood and the potent connection between imperial expansion and industrialisation. Whilst in this section it is argued that industrialisation began in Europe, by this it is not meant that industrialisation is the property of Europe. Colonial expansion and imitative industrialisation policies by the ex-colonies, means that industrialisation has spread (albeit unevenly) to all parts of the globe acquiring as in the case of Japan, North America and the Asian and Latin American NICs, specific national characteristics. This is examined in Sections 2 and 3. In this section, we analyse the historical development of the global economy, the transition from mercantilism to industrial capitalism and the manner in which the expansion of Europe evolved from imperial acquisition and protectionism and towards 'free trade'. This evolution formed much of the context from the late fifteenth to the late nineteenth centuries. The expansion of industrial capitalism and the rise of the USA from a peripheral colony of the British Empire to the world's dominant economy by the late nineteenth century provided a sobering challenge for Europe. This was graphically illustrated in superpower rivalry between Russia and the USA for most of the latter part of the twentieth century. This bi-polarity had important consequences for their respective clients in the Third World. The section concludes by examining the historical roots of contemporary problems facing the Third World, such as the debt crisis which unfolded in the developing countries during the late 1970s and questions raised by the globalisation thesis. The section introduces basic concepts used to explain world development, globalisation and industrialisation.
One key sub-text in the intricate relationship fashioned between the expansion of Europe and what came to be the Third World was in the impact of the Enlightenment. The Enlightenment was in part driven by the phase of early mercantile exploration and attempts to offer explanations for the biblically unaccounted for peoples of the world. This curiosity when combined with innovations in Science and Technology, contributed to the questioning of the natural order of things and also questioned the rights of divine kings. In both England and France this culminated in popular revolutions which led to the beheading of both Louis XVI and Charles I. The rolling heads of kings of state symbolised the development of the 'Enlightenment model' which lies at the heart of ideas about 'modernisation' in the Third World. The model drew from the experience of the French Revolution during which the bourgeoisie achieved three major objectives in its struggle with the dying feudal order: first, the abolition of the monarchy and the introduction of democracy in the form of a constituent assembly; second, the break-up of the large landed estates held by the nobility; and third, national unification and the development of the nation state. The model was used in the newly independent countries and in their subsequent evolution, to point to the poverty of the ruling elites and their inability to meet even basic criteria necessary for development and modernisation.
1.1
Gavin Capps
The Expansion of Europe: Mercantile Trade 1500-1750
OVERVIEW
The period covering 1500 to 1750 can be seen as the era of merchant or mercantile trade. It witnessed major transformations in the economic life of Western Europe, as its feudal societies disintegrated and inter-state rivalry grew. From the fifteenth century onwards, competing European nations sent sailors, soldiers and merchants across the world to locate and monopolise new sources of wealth. Desirable luxury goods and precious metals, such as spices and silver, were extracted from the Americas, Africa and Asia through plunder, extortion and trade. European expansion drew a growing portion of the world into its orbit, through the development of rival commercial networks on a global scale.
EMPIRES AND TRADE: THE WORLD BEFORE EUROPE
To understand the changes that were to occur between 1500 and 1750, it is useful to sketch out the kind of world that Europe would soon encounter.
Two features stood out in the world of the 1400s. The first was the immense diversity in the types of economic activity found across the globe. For example, some people, like the Amazonian Mundurucu 'Indians', lived on what they could hunt or gather. By contrast, the nomadic Mongols of central Asia moved herds of animals across great areas, trading with and raiding the settlements and towns that they encountered. In Han China or Hausa Nigeria, small peasant farmers cultivated the land. They were controlled by ruling Chiefs or Lords, who claimed a portion of the peasants' produce in the form of tribute. Great city states were also known, like Malacca in South East Asia, which supported a population of 50,000 merchants and craftworkers through regional trade.
Alongside these differences, there were profound similarities and linkages emerging between the world's peoples. In the populous regions of Central America, China, India and parts of Africa, great empires rose up and expanded. Dynastic rulers, like the Mwene Mutapa of Zimbabwe, controlled trade, mining and production over vast areas. They incorporated surrounding societies into their empires through military expansion. The new subjects were then forced to pay tribute (a tax, in the form of produce or labour) and to adopt similar cultural norms. The example of the Incas illustrates this process (see Example 1).
The incidence of long-distance trade was also growing. New commercial networks expanded out of long-established routes. In the 1400s, ocean-going junks (trading-vessels) from China regularly reached the southern end of the Red Sea. Arab merchants were spreading their commercial nets into central Asia, Southern Africa and the Indian subcontinent. Because transport costs were high, traders dealt in luxury goods like silk or ivory. These commodities were destined for the wealthy rulers of empires, acting as symbols of their political power and prestige. Exploration and the growth of trade provided new challenges and opportunities for merchants and spread languages, religions and customs – like Islam – across whole continents. One major challenge appeared in question marks raised for the Biblical interpretations of humanity applied universally by the Christian world. In the face of an expansive system of trade which brought Europeans in contact with diverse peoples of the world, no satisfactory explanation could be provided by the Christian world-view. This provided a source for intellectual curiousity in Europe which reinforced non-conformist thinking, previously associated with christian heretical sects and humanist thinkers, and this contributed to the development of the kernel of ideas which during the late eighteenth century constituted the Enlightenment. One key precept challenged by an expansive world system was that humans were weaved around god and his representatives on Earth, typically in the form of princes of church and state.
During the fifteenth century the world was characterised by immense diversity, but it was also changing and becoming more interconnected. Empire building and trade established interdependent economic zones, binding together different populations under powerful political or religious principles. There were few societies genuinely untouched by the influence of others. As each empire sought new sources of wealth, the conditions were established for sustained commercial competition on a global scale.
EUROPEAN EXPANSION AND MERCANTILIST POLICY
For many centuries Europe was relatively marginal 'in the affairs of the wider world' (Wolf, 1990, p. 7). At the same time the Southern Mediterranean region had long-standing connections with Africa and Asia. The Italian city states of Genoa and Venice acted as a gateway for raw materials from the tropical countries (precious metals, spices) and finished products from the craft industries of the East (silk and cotton textiles). The fruits of this commerce were then sold throughout Europe by merchants.
In the mid-1400s, the expansion of the Ottoman Empire cut the lucrative Mediterranean trade in two. The fall of Constantinople in 1453 was a potent symbol of this expansion. Faced with commercial loss due to the closure of markets to the east, European merchants began to search for new routes to Asia. There was considerable success in this venture. In 149 7, the Portuguese merchant adventurer, Vasco de Gama, rounded the Cape of Good Hope and reached India. Five years earlier (1492), Columbus had accidentally 'discovered' America, which he mistook for Japan. These journeys laid the basis for a wave of European ocean-borne expansion which would change the world for ever. The forces behind this expansion were greater than the pursuit of individual profits. The survival of every European state rested on new wealth too and during the fifteenth century this was marked by inter-state rivalry and war over territory and resources. Continuous military conflict drained the coffers of the rival war lords and monarchs whose sources of domestic revenue were limited by restrictions imposed by the feudal economy, which was itself in periodic crisis.
The feudal mode of production which dominated medieval Europe was based on agriculture which provided the mainstay of the economy. Most people were peasants, belonging to manorial estates. This gave them the right to individual landholding and 'common' grazing land. In return, the Lord (of the manor) was owed tribute in the form of agricultural produce and labour service. The peasants were also forced to pay taxes to the Crown. As taxes were the main source of domestic revenue, warring states could only raise money by taxing the peasants harder. When new 'poll taxes' were imposed in England during the 1500s, they were met with virtual insurrection. This source of state income was clearly limited.
The growing activities of merchants suggested an alternative source of revenue. Urban manufacturing was confined to guilds, in which a hierarchy of handicrafts workers of the same trade monopolised production, but were restricted in how much they could sell. In time, whole towns became specialized in the manufacture of particular items (e.g. textiles, metals or armaments), requiring wider markets. Merchants began to take advantage, buying up all the guilds could supply and selling it in new areas of demand. This growing commerce quickly spread across Europe and entwined with the Mediterranean trade. It also became subject to increased taxation and state control.
As European merchant adventurers located new sources of wealth, their home rulers began to actively support them. The Crowns needed the merchants as allies in their struggle with the feudal Lords, principally as a source of revenue to finance administration and war. In exchange, the merchants required a powerful state to protect their international trade, conquer colonies and defeat restrictive feudal practices at home. The alliance between the Crown and merchants is the meaning of the term 'mercantilism'. Economists like Mun wrote in the first quarter of the seventeenth century and advised the state to develop commerce and its allied industries, by using high tariffs (import taxes) to provide protection from competitive foreign imports (Rubin, 1989). Protectionist ideas extended to the international arena. Favoured merchants were granted monopoly rights to control trading zones in the name of the Crown. This gave rise to trading companies which combined acquisition with force and economic, military and territorial rivalries conducted on a world scale.
CONQUEST, COMPETITION AND MONOPOLY IN THE WORLD MARKET
The first wave of European expansion was led by the Portuguese. It tells us much about what was to follow. In 1415, a small force invaded the North African port of Ceuta, in an attempt to control the Mediterranean trade in gold. By 1500, Portuguese vessels had crossed the Atlantic and were shipping Brazil wood from an area which they named Brazil – the first African slaves would be imported to its new plantations 30 years later. In 1505, a Portuguese fleet reached India, plundering the East African great port of Kilwa on the way. This encouraged Portuguese merchants to invade the lucrative East African-Asian trade, ousting the Arab merchants who had controlled it previously.
New competitors arrived in the form of the Dutch East India Company which was formed in 1602 in order to break the Portuguese monopoly over the spice trade. The Portuguese were effectively driven out of the East. The Dutch West India Company formed in 1621 set out to do the same in the Caribbean. Similarly, by 1550 British trading companies had made inroads into the Dutch and Spanish Americas. They founded new colonies in North America and the Caribbean, where France also maintained a foothold. Finally, after years of battles with the Dutch and French navies, the British established monopolies throughout North America and South Asia. During this period simultaneous wars (in effect, World Wars) were fought for the first time in all of the world's continents.
The forms of European conquest varied from continent to continent. South America was divided between Portugal and Spain through the arbitration of the Pope during 1494 and the extensive direct occupation which followed contrasted with conquest in Asia where the Europeans rarely moved inland from the coastal trading stations. Countries like China and India were defended by large and powerful states, even when compared to the Inca Empire. However, superior naval power and commercial organisation allowed the trading companies to control their sea-lanes and redirect Asia's trade and wealth to vital ports owned by the trading companies. This was a key feature in European control of exchange.
The African continent was initially viewed as a transit point on the way to Asia and as a source of gold and ivory, via coastal trade. By the seventeenth century, however, Africa, America and Europe were being drawn into a more direct and special relationship. All hitherto European expansion was characterised by erratic windfall profits made from trade and plunder in luxury goods. British colonialism in North America and the Caribbean initiated a qualitatively new kind of international trade which was based on the production of mass goods which linked the large-scale production of raw materials for manufacturing in Europe, the development of markets for European goods in the colonies, and the procurement from Africa of slave labour for plantation production, in a 'triangular trade' (Bernstein et al., 1992).
At the heart of this development were the sugar, cotton and tobacco plantations which sprang up across the Americas. All adopted similar systems of settled, labour-intensive production, to supply the European economies with raw materials and foodstuffs. In exchange, European powers provided military and economic protection for the plantation economy. Labour which had proven so scarce in the initial period of exploration that it forced Columbus (at his peril) to compel feudal nobles to undertake manual labour, was not in short supply. Between 1701 and 1810, England exported over 2 million slaves from West Africa alone (Wolf, 1990). A slave traffic poured along indigenously organised routes, which stretched the breadth of Africa. Slaves were traded for European manufactures, like British arms or cloth – a direct stimulus to these protected industries. As the demand for plantation commodities increased, British merchants and shippers were able to reap huge profits at each point of sale in the triangular trade.
(Continues…)
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Copyright © 2001 Prodromos Panayiotopoulos and Gavin Capps.
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Table of Contents
Glossary Introduction1. World Development: Globalization in Historical Perspective 2. Globalization: Industrialisation and Trade 3. Country Studies 4. Commodity Studies
Conclusion Appendices References Bibliography and further reading Figures Tables Notes on Contributors Index