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D. Mercantilism, Colonialism, and the Creation of the "World Market"
The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population,
the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting
of blackskins, signalised the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief momenta
of primitive accumulation. On their heels treads the commercial war of the European nations, with the globe for a theatre....
....The treasures captured outside Europe by undisguised looting, enslavement, and murder, floated back to the mother country
and were there turned into capital.98
We must find new lands from which we can easily obtain raw materials and at the same time exploit the cheap slave labour
that is available from the natives of the colonies. The colonies would also provide a dumping ground for the surplus goods
produced in our own factories.99
In addition to its transformation of society at home, the state aided the accumulation of capital through mercantilism.
The modern "world market" was not created by free market forces. Like capitalist production in Western Europe, it was an artificial
creation of the state, imposed by a revolution from above. The world market was established by the European conquest of most
of the world, and by the naval supremacy of the Western European powers. Manufacturing to serve a global market was encouraged
by state intervention to shut out foreign goods, give European shipping a monopoly of foreign commerce, and stamp out foreign
competition by force. Since the process of creating a single world market has been so closely identified, since the mid-seventeenth
century, with the hegemony of Great Britain over the other Western European powers, we will focus on British mercantilism
and colonial policy in this section. Our survey here is not intended even as a systematic overview of the various subsidiary
themes in the evolution of colonialism; as Marx's panoramic quote above suggests, the subject is too broad for us even to
touch briefly on all its major sub-topics. The following is only a very uneven look at some of the more interesting aspects
of the subject that have especially caught our attention.
The Dutch wars during the Interregnum and the reign of Charles II established England as the dominant mercantile power
in the world. The Dutch carrying trade was largely eclipsed, and "the nucleus of all later settlements in India" were
won from the Dutch. In the process, the value of stock in the East India Company increased nine-fold. The East India Company,
established by charter from Cromwell, not only enjoyed close ties to the English state, but acted as proxy for it; it had
the financial and military backing of the state behind its rule.100
In addition to the naval supremacy arising from those wars, and the Dutch colonies added to English dominions, the British
position was further cemented by the Navigation Acts.
The imperial monopoly created by the Navigation Acts allowed merchants to buy English and colonial exports cheap and sell
them dear abroad, to buy foreign goods cheap and sell them dear in England. This increased merchants' profits, and forced
national income from consumption into capital, especially into the artificially stimulated ship-building industry, which boomed.
Thanks to new building and prizes captured in war, English shipping tonnage is believed to have more than doubled between
1640 and 1686.101
Trade carried out under such monopoly conditions was a much more lucrative source of accumulation than industry, providing
massive sums of capital for investment in the industrial revolution of the late eighteenth century.102
Modern exponents of the "free market" generally treat mercantilism as a "misguided" attempt to promote some unified national
interest, adopted out of sincere ignorance of economic principles. In fact, the architects of mercantilism knew exactly what
they were doing. Mercantilism was extremely efficient for its real purpose: making wealthy manufacturing interests rich at
the expense of everyone else. Adam Smith consistently attacked mercantilism, not as a product of economic error, but as a
quite intelligent attempt by powerful interests to enrich themselves through the coercive power of the state.
Despite mercantilism's theoretical preoccupation with the balance of trade, its practical concern was with favorable terms
of trade--buying cheap and selling dear.103 And this was quite rational, given the existence of captive foreign
markets. Modern free trade advocates assume a mythical world of consumer sovereignty, in which domestic capital has no compulsive
power over foreign markets. But this is untrue even in today's world, let alone the world of the seventeenth and eighteenth
centuries.
The reason why an inelastic foreign demand should have been so easily assumed is not at first class clear. A principal
reason why they imagined that exports could be forced on other countries at an enhanced price without diminution of quantity
was probably because they were thinking, not in terms of nineteenth-century conditions where alternative markets were generally
available to a country, but of a situation where considerable pressure, if not actual coercion, could be applied to the countries
with whom one did the bulk of one's trade.104
Although opportunities for domestic plunder had been largely exhausted (at least for the time being), the possibilities
for naked force in foreign dominions were breathtaking:
As regards the internal market, experience had presumably taught [policy makers] that such measures [regulatory
rent-seeking and unequal exchange at expense of other capitalists] could quickly reach a limit, especially when the field
was already congested with established privileges and monopolistic regulations. Here there was little chance of a merchant
expanding his stint save at the expense of another; and internal trade was consequently regarded as yielding little chance
of gain from further regulation. But in virgin lands across the seas, with native populations to be despoiled and enslaved
and colonial settlers to be economically regimented, the situation looked altogether different and the prospects of forced
trading and plunder must have seemed abundantly rich.105
In their reliance on the state to enforce unequal exchange, the merchant capitalists were acting in the tradition of their
ancestors, the oligarchs who had taken over the artisan guilds and towns in the late Middle Ages, and set themselves up as
middlemen between the urban craftsmen and the rural peasants.
As one writer has said of it, this was the former 'policy of the town writ large in the affairs of State'. It was a similar
policy of monopoly to that which at an earlier stage the towns had pursued in their relations with the surrounding countryside,
and which the merchants and merchant-manufacturers of the privileged companies had pursued in relation to the working craftsmen.106
Ireland was an early dress rehearsal for a number of atrocious themes that were to recur throughout the history of colonialism.
Ireland, during and after Cromwell's conquest, experienced a death-rate comparable to the killing fields of Pol Pot, or of
East Timor after Suharto's invasion.
The settler societies of Australia and the New World relied heavily on slave labor of one kind or another. According to
Wakefield, when cheap land was available in the colonies, the only way for the capitalist to obtain labor at a profit was
to employ convict or slave labor. Although, as we have seen above, Wakefield preferred a government policy of artificially
pricing laborers out of the land market, he recognized slavery as a necessary makeshift when labor was scarce relative to
land.107
As was the case with the use of full-scale terror war to secure control of Ireland and expropriate land from the natives,
the large-scale use of slave labor in foreign colonies was pioneered (in British realms at least) by Cromwell. One of the
earliest sources of slaves was the defeated Irish people, along with the Protectorate's internal enemies. To be "Barbadoesed"
appeared as a new verb, referring to the massive traffic in transported political criminals to that island.
America was built on slave labor. Most people are more or less aware of the importance of African slavery in the New World
(as Joshua Gee wrote in 1729, "[a]ll this great increase in our treasure proceeds chiefly from the labour of negroes in
the plantations."108 For that reason, and not to downplay its significance or sheer brutality, we focus here
on the coerced labor of convicts and indentured servants, about which much less is generally known. Given the scale of black
slavery and of convict and indentured white labor, it is likely that the vast majority of Americans in 1776 were descended
from those brought here in chains.
Abbot Smith, a specialist in the history of indentured and convict labor, estimates that one-half to two-thirds of white
immigrants to the North American colonies belonged to one of those categories.109 Although estimates of the extent
of such immigration vary, all are quite high. According to Edward Channing's History of the United States, 10,000 members
of the British underclass were kidnapped for transportation in 1670. A 1680 pamphlet gives the same figure.110
In Virginia alone, Thomas Wertenbaker estimated anywhere from 1500 to 2000 entered the colony annually from 1635-1705. Indentured
labor was the foundation of production in the tobacco colonies throughout the seventeenth century.111
From the late seventeenth century on, the tobacco economy shifted to a reliance mainly on black slaves, as a means of social
control. The poorly developed legal distinctions between black and white labor, combined with the brutal treatment of both
and their close association on the plantations, threatened the planter aristocracy with biracial class solidarity. This threat
became concrete from time to time in the form of revolts--especially Bacon's Rebellion, in which white and black laborers
together nearly overthrew the colonial government. As a result, the legal status of black slaves was legally formalized in
slave codes in the 1670s, and "white skin privilege" and racist ideology were used as a means to divide and rule. The shift
to black plantation labor reduced the threat of social war. Even so, indentures and convicts continued to be a major part
of the white labor force, and the beginning of large-scale transportation of criminals after 1718 threatened the shaky social
peace once more.112
As for the eighteenth century, leaving aside voluntary indentures, Arthur Ekirch estimated that "some 50,000" convicts
were transported from the British Isles.113 Convict laborers alone represented "as much as a quarter of all
British emigrants to colonial America...."114 Lest anyone object that such servitude was involuntary only for
those guilty of crimes, we should keep in mind the nature of their offenses. The typical transportee was a petty criminal,
"a young male labourer driven to crime by economic necessity...." The majority of crimes were theft of property, by
members of the classes "most vulnerable to economic dislocation"--descendants of the same "sturdy vagabonds" thrown
onto the highways by the first large-scale expropriation of the peasantry two centuries before. During economic downturns,
an estimated 20-45% of the English populace "may have lacked the means to buy sufficient bread or otherwise feed themselves."
Even in comparatively good times, the proportion did not fall below 10%.115 Gregory King, "the pioneer statistician,"
estimated that over half of the population earned less than they consumed and were supported by poor rates.116
It is also worth bearing in mind that the legal system of that time was in the hands of justices of the peace, who represented
the interests of the gentry against the overwhelming majority of the people. And once a pauper entered that legal system,
guilt was by no means a necessary condition for transportation. J.P.s assumed the right to sentence to transportation even
acquitted persons, if they could not find "sureties for good behaviour."117
Another large group who were liable to involuntary transportation without having committed any offense were children. Sir
Thomas Smythe and Sir Edwin Sandys, of the Virginia Company, petitioned the Council of London in 1618 to remedy the labor
shortage in their American plantation by allowing the transportation of "vagrant" children. According to the terms of the
consequent bill, chlidren eight or over were subject to capture and transportation. Boys were liable to sixteen years servitude,
and girls to fourteen. The city aldermen were empowered to direct constables to seize children "loitering" on the streets
and to commit them to Bridewell prison-hospital pending shipment to America. Besides these "vagrants," children of the indigent
were also pressed into service, on pain of cutting off poor relief to recalcitrant parents. Although the bill ostensibly provided
land to those who had completed their term of service, a muster of the Virginia colony in 1625 found almost of the 1619 and
1620 transportees still alive.118
The rates of death were high for indentured and convict laborers in general, adults as well as children. Beginning with
the transatlantic voyage itself, a death rate of 20% was regarded as acceptable, although it was often much higher. The overhead
cost of white laborers was much lower than that for African slaves, since the cost of capture was so much lower.119
The numbers of indentured servants successfully completing their terms of service and collecting the land guaranteed by
law, if any, were likewise small. As was the case with the children in the previous paragraph, only a minority of indentured
servants actually collected the land that was guaranteed to them under their contract. In Maryland, for example, of 5000 indentured
servants entering that colony from 1670-1680, fewer than 1300 collected their 50 acres. Over 1400 had died in service, and
the rest were defrauded.120 Masters often deliberately worsened conditions of work for indentured laborers toward
the end of their terms, in order to induce them to run away and forfeit their land or money. In addition, masters were able
to add years to the term of service for relatively minor offenses. Once such offense was marrying without the master's permission,
or having children out of wedlock--even when the master was the father. It goes without saying that such children were born
into servitude, and stayed there until they reached adulthood. Half of indentured servants, in the colonies taken together,
did not survive their term of service.121
One of the most lucrative services the state provided for British manufacturing was the suppression of competing production
in the colonies.
Measures, not only of coercion applied to colonial trade in order that it should primarily serve the needs of the parent
country, but also to control colonial production, became a special preoccupation of policy at the end of the seventeenth century
and the first half of the eighteenth.... Steps were taken to prohibit the colonial manufacture of commodities which competed
with the exportable products of English industry, and to forbid the export of enumerated colonial products to other markets
than England.122
Although he was wrong in describing them as "[a]n essential prerequisite" for the industrial revolution, Christopher
Hill was correct in his assertion that "large and stable colonial monopoly markets" were an important means of promoting
manufacturing interests.123
The conquest of India, where the authorities in India, followed by the destruction of the Bengalese textile industry (makers
of the highest quality fabric in the world), was motivated to a large extent by such concerns.124 Although Bengalese
manufacturers had not yet adopted steam-driven methods of production, they likely would have done so, had India remained politically
and economically independent. At the time of conquest, as Chomsky describes it,
India was comparable to England in industrial development. The conqueror industrialized while Indian industry was destroyed
by British regulations and interference.... Had [such measures] not been undertaken, Horace Wilson wrote in his History
of British India in 1826, "the mills of Paisley and Manchester would have been stopped in their outset,
and could scarcely have been again set in motion, even by the power of steam. They were created by the sacrifice of Indian
manufactures."
Under British rule, the textile center of Dacca was depopulated from 150,000 to 30,000.125 Jawaharlal Nehru,
in his 1944 work The Discovery of India, correlated the level of poverty in the various parts of India with the length
of time the British had been there. The once prosperous territory of Bengal, the first to be colonized, is today occupied
by Bangladesh and the Calcutta area.126
The old mercantilist system having accomplished its mission, by the mid-19th century the official British ideology shifted
to "free trade." Free trade ideology has been adopted by the capitalist class, historically, when they were securely in possession
of the fruits of past mercantilism, and wished to competing commercial powers from arising in the periphery by the same methods.
Of course, the "free trade" actually adopted by Great Britain, as we shall see in Chapter Seven, was much closer to the neo-mercantilist
"free trade" of Palmerston than the genuinely liberal free trade of the Cobdenites. Although the U.S., as a latter-day conterpart
of Great Britain, is quite vocal in its support of "free trade," the American, German and Japanese industrial systems were
created by the same mercantilist policies, with massive tariffs on industrial goods. "Free trade" was adopted by safely established
industrial powers, who used "laissez-faire" as an ideological weapon to prevent potential rivals from following the same path
of industrialization.
Although we have concentrated in this section on the earlier waves of colonialism and their effects on the formative period
of industrial capitalism, the record of enslavement, robbery, and devastation was at least as great under the "New Colonialism"
of the late 19th century. Exploitation of the Third World under the latter form of colonialism involved large-scale transfers
of wealth to the developed world, and resulted as a consequence in vast super-profits.
In the New as well as the Old Colonialism, a central object of policy was "to clear out of his way by force, the modes
of production and appropriation, based on the independent labour of the producer." According to David Korten,
One of the major challenges faced by colonial administrators was to force those who obtained their livelihoods from their
own lands and common areas to give up their lands and labor to plantation development, that is, to make them dependent on
a money economy so that their resources, labor, and consumption might yield profits to the colonizers.127
This was accomplished first of all by "dispossessing indigenous communities of the greater part of their traditional
territories": claiming uncultivated or common lands, forests, and grazing lands as property of the colonial administration,
and abrogating traditional rights of access; and second, by head taxes to compel subsistence farmers to enter the money economy.
Throughout the colonies, it became standard practice to declare all "uncultivated" land to be the property of the colonial
administration. At a stroke, local communities were denied legal title to lands they had traditionally set aside as fallow
and to the forests, grazing lands and streams they relied upon for hunting, gathering, fishing and herding.
Where, as was frequently the case, the colonial authorities found that the lands they sought to exploit were already "cultivated",
the problem was remedied by restricting the indigenous population to tracts of low quality land deemed unsuitable for European
settlement. In Kenya, such "reserves" were "structured to allow the Europeans, who accounted for less than one per cent of
the population, to have full access to the agriculturally rich uplands that constituted 20 per cent of the country. In Southern
Rhodesia, white colonists, who constituted just five per cent of the population, became the new owners of two-thirds of the
land.... Once secured, the commons appropriated by the colonial administration were typically leased out to commercial concerns
for plantations, mining and logging, or sold to white settlers.128
The latter theme continued even in post-colonial times, when corporate agribusiness relied on authoritarian Third World
regimes to evict peasants from land needed for large-scale cash crop production.129
At the same time, to relieve the labor shortage, colonial authorities (especially in British and French West Africa) resorted
to forced labor to solve the labor shortage. Taxation was found, however, to be a much more efficient way of accomplishing
the same end. In colonial Africa and Asia, poll taxes or excise taxes on staple commodities were used to force subsistence
farmers to sell their labor in the cash economy in order to pay them.130
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