The Political Origins of the World Capitalist Economy

This paper sets itself the limited target of analysing the three major social changes that were influential in the emergence of the world economy in the nineteenth century. The world historic transition from a pre-capitalist mode of production to a capitalist mode of production was a complex phenomenon. To ascribe a limited number of factors to explain complex events appears as an arbitrary and subjective judgement. Human experience does not know clearly demarcated boundaries. Accordingly, it is with a certain degree of reservation that this paper identifies only three principle social changes that were influential in the emergence of the world capitalist economy. These factors are the French Revolution, the Industrial Revolution, and Colonialism. This paper will show that the French revolution influenced the creation of the modern state system, the Industrial revolution laid the economic foundation of the modern world economy, and Colonialism established a world market in the nineteenth century. These three factors are the foundation of the modern world capitalist system.

Social scientists need to exercise care so as not to project intellectual categories of the modern world uncritically onto the past. Certain concepts, models, and views that one takes for granted in the modern world simply do not exist in the objective conditions or subjective consciousness of the past. One such concept is the idea of the nation. When, in 1780, Jeremy Bentham coined the term “international”, its opposite “the nation”, was still in the process of maturing (Baylis and Smith 2000: 13).

Halfway between the War of Independence in North America against British colonial rule (1776 - 83) and the uprising in Latin America against Spanish colonial rule (1820 - 28), the French revolution (1789) marked a significant departure from monarchy and feudalism. The French revolution was a result of the contradiction between the newly emerging bourgeoisie and the old degenerating feudal regime (Hobsbawm 1962: ch. 2). The French revolution cleared the path for capitalist development. On the other hand, revisionist historians such as Alfred Cobban assert that the French revolution was against and not for the rising forces of capitalism and ultimately helped to consolidate the power of the landed class (Cobban 1970).

New concepts flowered in the revolutionary atmosphere of the revolution. In particular, the concepts of liberty, equality, and fraternity were popularised all over Europe. Jean-Jacques Rousseau, the thinker who epitomised these ideas, based his argument Reason of State on the Greek idea of Polis. In the main, he argued for the legitimacy of majority rule that is accepted today as an essential ingredient of modern democratic representative government (Baylis and Smith 2000: 443). The doctrine of modern nationalism is a combination of the ideas of the Enlightenment, la nation, and the German concept of the Volk[1] (Fred Halliday in Baylis and Smith 2000; ch. 20)

Later in French history, Napoleon’s bid for ‘continental hegemony’ from 1795 to 1815 spread these revolutionary ideas across Europe. Either through direct conquest, or by compelling feudal regimes to modernize on pain of extinction these wars destroyed feudalism in Europe (Hobsbawm 1962: ch. 3). At the same time, the impetus of revolutionary war created a unified national currency, standardized measurements, universal conscription and a modern standing army (McNeill 1983), a legal code for the safety of private property, and a civil service to safeguard the social gains of the revolution (Hobsbawm, 1962: ch. 3). In conclusion, one of the lasting legacies of the French revolution is the ideological influence it exercised on the formation of the modern state system all over the world (Klaits & Haltzel 1994).

While the modern state system was influenced by the French revolution, a “twin revolution” in Great Britain laid the economic foundations for capitalism (Hobsbawm 1962: ch. 2). The Industrial revolution started from modest beginnings in small blast furnaces at Coalbrookedale (Denis Smith & Colin Grimshaw). However, within a matter of one generation, it transformed Great Britain into a world power that manufactured more than 50% of the world’s manufactured goods (particularly in the period between 1815 and 1848) (Hobsbawm 1962: ch. 2, pg 51; Halperin 1997: 9, 130). This achievement earned this country the title of ‘workshop of the world’.

Great Britain was especially well placed for the Industrial Revolution for two reasons. First, the technological prerequisites for the industrial revolution were all present in Great Britain. For example, the knowledge of gun-powder and cannon-boring that was instrumental in the creation of the piston and cylinder steam-engines (The day the world took off); the skill of manufacturing glass that was vital for the construction of telescopes for navigation, microscopes for biology, and glass beakers for chemistry (The day the world took off); a large and rapidly expanding urban population that supplied a readily available labour force for industry, and a market for commodities such as china, porcelain, textiles, and tea (The day the world took off); the mechanical clock, water transport, blast furnaces, and medieval military technology (McNeill 1982: 211) were all to be found in Great Britain.

Second, this technology was combined with social relations that encouraged innovation and experimentation. The bourgeoisie was eager to find new methods to make more money. Therefore, new discoveries were sought after and discussed in tea clubs and gentlemen’s associations such as the famous Lunar Society. The bourgeoisie encouraged an inquisitive, intellectually lively, and nourishing environment for industrial and scientific innovation (Hobsbawm 1962).

The innovations of the ‘spinning Jenny’ and the ‘Crumpton mule’ (1770 to 1825) in the textile industry, the development of iron and coal that opened the gates to the railway age (1825), and the development of steel hull steam powered ships (1860’s), all pointed towards a new world (Hobsbawm 1962, 1975). This period between Adam Smith, David Ricardo, Karl Marx, and Fredrick List saw the development of the factory system, transoceanic communications, standardization of measurements, and unprecedented socialisation of production.

In conclusion, although the scale of the social changes during the Industrial revolution were modest by the standards of the twentieth century, they were unprecedented in relation to the historical period. That is why it would be correct to conclude that, “the economic and political breakthrough that occurred in England and France at the end of the eighteenth century put every other country of the world into a position of ‘backwardness’” (Halperin 1997: 130).

In the 16^th century witnessed the first steps towards the creation of a world capitalist economy. The conquest of the Iberians of America and the resulting slave and fur trade laid the foundation of a world market (Wallerstein 1979). In the last quarter of the nineteenth century the sphere of global commodity production and exchange reached unprecedented levels of integration (Hobsbawm 1987). This extension of the world market was made possible by the new transport technology (railway and steel hull steamships) that allowed commodities manufactured in one part of the world to be consumed in another.

The aggressive Empire builders and robber barons of this age were not just interested in a single, never-to-be-repeated booty. The capitalist social system, of which these men were after all a product, is premised on an ever-expanding cycle of surplus-extraction (Marx 1976). Moreover, capitalist social relations--private property on the one hand and wage-labour on the other--were absent from the colonial landscape and had to be created from the outside. In other words, all forms of pre-capitalist communal property had to be expropriated and converted to private property. Marx called this process of expropriation “primitive accumulation” (Marx 1976: ch. 26). Similarly, Rosa Luxemburg referred to the same process as the destruction of the ‘natural economy’ (Luxemburg 1951: ch. 27). This period of primitive accumulation forms the pre-history of capitalist relations in the colonies.

The classical economic theory of Smith and Ricardo assumed that specialisation--owing to an absolute or comparative advantage--would occur in a voluntary manner. This assumption proved naive. Force was an integral part of primitive accumulation and specialization. Marx’s famous phrase “And this history, the history of their expropriation, is written in the annals of mankind in letters of blood and fire” (Marx 1976: ch. 26) rings in our ears as a testimony to that period. On the basis of brutality, commercial agriculture, plantations, and cash-cropping (Wolf 1982: 315) were institutionalised in the Third World. The Colonial system created a global system of commodity specialisation and a world market.

Food crops such as wheat, rice, meat, and bananas came from the American Mid-West, South East Asia, the American West, and Central America respectively. Stimulants such as sugar, coffee, tea, opium, and cocoa came from the East Indies, Indonesia & Brazil, India, China, and West Africa in that order. Crops used for industrial purposes like rubber, palm oil, tin and copper came from Brazil & Indonesia, West Africa, Malaya and Chile respectively. Precious stones like diamonds and gold came from the mining colonies of Southern Africa (Wolf 1982: ch. 11).

During this period trade and empire brought great fortunes to the robber barons at the expense of the colonies.[2] Karl Marx wrote in The British Rule in India that although the British were actuated by the “vilest of interests”, nonetheless, they were the “inadvertent agent of history” (Marx 1973). Indeed, this assertion proved to be correct insofar as colonialism laid the foundations for a world capitalist economy.

Whether one traces the origins of the world economy all the way back to 5000 years (Janet Abu-Lughold 1989, Frank and Gills 1996 in Baylis & Smith 2000), to the sixteenth century (Wallerstein 1979), or to the end of the nineteenth century (Hobsbawm 1975, Lenin 1965), there is little doubt that as we enter the twenty-first century the entire world is dominated by a single integral system of global capitalist production. This paper has tried to show that the French revolution, the Industrial revolution, and Colonialism were the three major social changes that influenced the emergence of the world economy. The manner in which one re-traces the history of the emergence and development of the world capitalist economy, its principle characteristics, and its dominant causes is crucial. One’s analysis of the past informs one’s practice in the present. The construction of the world capitalist economy informs our understanding of issues of security, war and peace, the nature of the sovereign state, and the process of globalization in modern times. In a word, understanding the nature of the world economy is central to the core issues of International Relations.

Bibliography

Baylis, John. & Smith, Steve. (eds.) (2000). The Globalisation of World Politics: An introduction to international relations, Oxford.

Denis Smith [presenter] Colin Grimshaw [directed] 1985. Coalbrookdale: Origins of the Industrial Revolution [video recording] London: Imperial College TV Studio.

Halperin, Sandra (1997). In the Mirror of the Third World, Cornell University Press.

Klaits, J. & Haltzel, M. (1994). The Global Ramifications of the French Revolution, Cambridge.

Lenin, V. I. (1965). Imperialism: the Highest Stage of Capitalism, Peoples Publishing House Peking.

Marx, Karl (1976). ‘The British Rule in India’, ‘The Future results of the British Rule in India’, in Surveys From Exile, edited by D. Frnbach, Harmondsworth.

McNeill, William H. (1983). The Pursuit of Power: Technology, Armed Force and Society since AD 1000, Oxford.

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[1] The concept of Volk (the people) was promoted by thinkers such as Herder & Fichte.

[2] For example, Barret Brown shows that Indian cotton, “home charges”, and interest payable on debts played an important role in maintaining British hegemony (Barret Brown 1974).

Bibliography

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Last modified: March 27, 2004