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The role of colonialism and Maritime trade in the systemic accumulation of capital in the XVII-XIX centuries
Material posted: Publication date: 16-11-2019

Colonial policy of European powers begins from the time the two events, experienced by mankind in the last decade of the XV century, with the discovery of the New world in 1492 and with the opening of a continuous sea route from Europe to India in 1498 Both of these events were prepared for a long attempt, naval intelligence, the numerous casualties and setbacks.

In the context of this work will be revealed the amount of influence the above two factors on the systemic accumulation of capital, defined the consequences of the existence of colonialism and Maritime trade on the economic state of the countries involved and consider the different, chronologically successive cycles of capital accumulation.

Itself system the accumulation of capital, which became the starting point of the formation of capitalism took in Western Europe, an estimated 2.5 – 3 centuries. Direct impact on this process, had the existence of various forms of colonial dependence, and the management of the countries of Maritime Commerce and, consequently, trade wars.

As Marx wrote, "...industrial hegemony entails trade hegemony. On the contrary, in the actual manufacturing period and trading hegemony provides industrial predominance. Hence the prominent role that time played the colonial system. It was the "unknown God", who sat down on the altar, along with the old gods of Europe and one day push one threw them all out of the sanctuary. The colonial system, declared enrichment last and only goal of humanity"[1].

The study of the history of colonial systems and the associated system of capital accumulation from a theoretical point of view science is a relatively fresh topic. In the 1970-ies in the world the social Sciences in General and in comparative historical-economic research in particular, there was a fundamentally new approach the world – system analysis, the founder of which was the American historian Immanuel Wallerstein, the main ideas which were formulated in the 70-80 years of XX century. Later ideas of world-system analysis have actively developed by other researchers; one of whom, an American historian of Italian origin Giovanni Arrighi.

"The history of the capitalist world system by I. Wallerstein, is a story of hegemony and periods of military and economic rivalry between the powers - the contenders for the crown of hegemony"[2].

First the hegemony of the capitalist world-system in Dutch, its peak by Wallerstein refers to the period 1625-1672 he Last quarter of the XVII century – was characterized by the beginning of the decline of Dutch hegemony and simultaneously the beginning of a rivalry between the two new contenders – England (after 1707, Britain) and France. The peak of British hegemony came in 1815-1873 years after the end of the Napoleonic wars. The beginning of its decline – the period of the great depression 1873-1896 years.

And if I. Wallerstein paid attention more to the political hegemony of a particular power, then the focus Giovanni Arrighi the process of capital accumulation. In his important work "the Long twentieth century: money, power and the origins of our time" (1994)[3]he, starting from the works of K. Marx and F. Braudel, introduced the notion of systemic cycle of accumulation, which are partly chronologically overlap: a Genoese cycle (XV – beginning of XVII century), Dutch (the end of XVI – the third quarter of the XVIII century), British (second half of XVIII – beginning of XX century) and American period (since the end of XIX century). Each cycle consists of two phases – material (when the money capital sets in motion an increasing mass of commodities) and financial (when increasing mass of money capital is released from its commodity form and further accumulation takes place through financial transactions that is a sign of "fall" of the cycle).

Speaking of the first, that is, the Genoese, the cycle of accumulation should explain its peculiarity, in particular that the Genoese merchants and bankers turned the struggle of European States for access to capital, the engine of the expansion of their own state. This process received a major boost after a bad Kyogikai war between Genoa and Venice 1376-1381 years, which came to naught the power of the latter in the Black sea and the Eastern Mediterranean. In search of new sources of income by the Genoese was made a very rational decision to deepen penetration in the countries of Western Europe, especially in Spain and Portugal. The Genoese, in order to overcome the winners of the Venetians, had to go beyond Genoa, that is to dramatically expand the scope of activities. In particular, the Genoese sponsored by the Atlantic expansion of the two Iberian powers, Spain and Portugal.

However, since the end of XVI – early XVII century the leading role in European colonial expansion moved to the Netherlands and England. These States have used the fruits of the pioneers of European colonial expansion to the East, namely Portugal and Spain. Feudal Luso - Spanish colonial system was replaced by a system of trading capitalism in the Netherlands and England. The weakness of the industry's most feudal-absolutist Spain in comparison with the advanced countries of Europe the export of industrial goods from the mother country to her colonies in the New world in the eighteenth century was limited mainly to the resale of goods English, French and Dutch origin. At the same time huge widespread smuggling. Through smuggling in the eighteenth century often exceeding the dimensions of legal Commerce, Holland, and especially England were increasingly pushed Spain and Portugal to the markets of their colonies in America.

 

Fig. 1: GDP per capita in Spain of the XVII-XIX centuries.

 

Contraband trade of the English with the Spanish colonies in America, the capture and plunder of the English buccaneers of the Spanish and Portuguese Galleons returning from the New world Laden with gold and silver, and, finally, the acquisition by Britain in 1713 at the peace of Utrecht lucrative contract for annual supplies in Latin America of a sufficient number of slaves-all of this played an important role in the history of primitive accumulation in England, however, creating the preconditions to oust Spain and Portugal from the American colonies. A leading role in the colonial expansion of the Netherlands and England in XVII–XVIII centuries played trading capital. He defined its forms and methods. The main purpose of these two States, as, indeed, of Portugal, was the monopolization of trade, the extraction of maximum profit from trading operations.

Colony of the Netherlands in the XVII-XX centuries. formed the Dutch colonial Empire, also known as Dutch because of not correctly transferring the concept of Holland (originally one of the provinces of the Netherlands).

The Dutch Empire was formed as a result of trade, colonial, of research expeditions and expanded rapidly. In their history of the Dutch Empire possessed many territories in many parts of the world, the most important of which was ownership in Indonesia and the Caribbean. The first expedition to the Indonesian Islands had been taken by the Empire in 1596, when the Dutch reached the island of Sumatra. A new expedition took place in 1598, and in 1601г. the first collision happened Dutch with competing Portuguese of the Islands, and after 1604 it has been observed active, the Anglo-Dutch rivalry that grew out of a tacit Alliance against the Portuguese. However, these and other early travel was so successful that in 1602 the Dutch government and several private trading companies established by the Dutch East India trading company, which monopolized the trade between the East Indies and the Netherlands. The Dutch managed to take control of the spice trade of the Indonesian archipelago. Within 1620-1660-ies was the assertion of the monopoly trade of the Netherlands in Indonesia due to the elimination of competitors and strengthening its influence in the region. The colonial expansion of the Netherlands was sent to America. In 1621 was established the West Indies company, which mainly engaged in the plunder of the Spanish caravels. The situation in the West Indies it was a bit difficult — the English, Dutch and French penetrated there, was United by a common hatred of Spain, usurped the commodity flows in a New Light, but never missed an opportunity to wage a constant war with each other. In 1630 the Dutch captured almost all of coastal Brazil, but failed to keep their possessions in 1654 ceded to Portugal. In the 30-ies of the XVII century the Dutch managed to gain a foothold in curaçao and to penetrate in Suriname (Guiana).

Being much larger and more complex organization than the Genoese Republic, the Netherlands managed to create its own network of commercial outposts, and to keep the British and French. Big power of this state in comparison with the Genoese allowed it, the bourgeoisie not only do what has been done by the Genoese before (to draw in their favor cross-country wrestling in the engine expansion of private capital), but without purchase protection from any external forces. The Dutch have implemented the so-called "internalization of defense costs"[4] the term Danish historian Niels Steensgaard, applied for the European East India companies. The Dutch state was strong enough to be able to protect their merchants. When in 1566 the Spanish troops were sent to the occupation of the Netherlands — in fact, in order to ensure the collection of taxes is a painful decision responded to the Spaniards. Dutch rebels out to sea and not only brilliantly evaded paying taxes, but was charged with the Spanish Empire, a kind of so-called "reverse" tax via privateering and piracy. By as much as eighty years old, formed a large and increasing leakage of the Spanish Finance, which strengthened the Dutch rebels and Spain was weakened both in absolute and in relation to subordinates and competing territorialists organizations, in particular, France and England. The weakening of the Imperial centre has led to countless wars and rebellions that lasted until the peace of Westphalia, which institutionalized the emerging Europe's balance of power.

Also, unlike other countries in the Netherlands for the economy foreign trade were of paramount importance. Leadership in global trade and Maritime transport served as a cover for conducting the Netherlands and smuggled military-piracy operations at ocean communications, the plunder of the colonies and the slave trade. The catalyst of the process of primitive accumulation of capital was the Dutch bourgeois revolution, which allowed the Netherlands to the XVII century to become the "model" capitalist country.

The first blow to the prosperity of the Netherlands was dealt the Tulip boom years 1634-1638, followed by Cromwell's navigation act (1651), which the Netherlands were forced to admit after an unsuccessful war. In the second half of the XVII century protectionism is the basis of trade policy, in connection with spreading the teachings of mercantilism, and the Netherlands suffer more than other States. Also, the growth of national production, the governments of developed countries have moved from mercantilism to unilateral liberalism, which increased foreign trade contradictions have resulted in a series of continental trade wars of the XVII-XVIII centuries. the Initiator of the first trade wars was England. In 1651г. she took the above Navigation act, which was obliged to deliver the goods into the country from Asia, Africa and America only in the English courts and from the European countries, in English or the courts of the exporting countries. Directed primarily against the Dutch mediation discriminatory legislation has been successfully applied in the fight against Maritime dominion of Spain and Portugal, which has made England the largest trading and Maritime nation.

Thus, it can be noted that the spectacular success of the Dutch East India company in South Asia a serious blow to the Dutch regime of accumulation. He created for other States new incentives to follow the Dutch and compete with them, and then sent excess the Dutch capital to Finance the most successful among the new competitors. Anyway, by the end of the XVII century, the success of the English and French mercantilism has seriously limited the ability of the Dutch trading system to further increase the depth and scope. Dutch merchants had nothing to take to contain and even more to reverse the onset of mercantilism. The fight against such threat was surpassed all their organizational skills. However, their organizational skills were quite enough to exit the trade and focus on finances in order to win from the spread of mercantilism, moreover, in the circumstances, it was the most reasonable and rational plan of action, as increasing competition between territorialists organizations of Europe, which undermined the viability of the Dutch trading system, at the same time expanded and increased the need of governments in money and credit, and Dutch business networks were well prepared to meet this need and to benefit from it. The Dutch capitalist class immediately jumped at the opportunity and, beginning in 1740 his leading elements started to switch from trading on the more exclusive specialization in high Finance.

 

Fig.2: GDP per capita in the Netherlands of the XVII-XIX centuries.

 

Switching of the Dutch to trade in finances has occurred in the conditions of serious escalation miscapitalizations and inter-territorial struggle. First, the escalation of these conflicts took the form of a trade war between England and France, which in the course of commercial expansion in the early seventeenth century had evolved into two powerful competitors. So initially a process of struggle between territorialists organizations and within them created extremely favorable conditions for the demand for a financial transaction, which became a specialty of the Dutch capitalist class. The Amsterdam exchange became the largest in Europe through Dutch brokers were no transactions between merchants and bankers all over Europe. Here quoted shares are securities trading companies, placed the loans, set prices on all products.

Since the second half of the XVII century, in the XVIII century and for the greater part of the XIX century the main opponents in the struggle for colonies were Britain and France. Anglo-French war, which began in the late XVII century, continued with increasing force in the eighteenth century until the French revolution. French colonial expansion began after the civil war and the strengthening of the absolute monarchy. When Louis XIV created the French East India company, appeared the strongholds in India (Puducherry, Chandranagar) in North America was captured in Louisiana, expanded the colonization of Canada and the Antilles. But in the struggle with England for colonies France was eventually defeated.

Meanwhile, London throughout the eighteenth century overtook Amsterdam as a competing center of major financial transactions. In 1694, was an English Bank formed for lending to the military expenditure of the English government. In exchange for loans to the government, the Bank has set itself a number of privileges, in particular the exclusive right to issue banknotes and to coin money. This was a consequence of the success of Britain in the struggle with France, and smaller rivals for exclusive control over trade with the non European world and the transfer of surplus Dutch capital to British enterprises.

"The British revenge for the Dutch after the American war of independence deprived the latter of the power of the sea and caused serious damage to their trading Empire in the East Indies. As a result of repeated crises, gradually podrachivala the Amsterdam financial market since the beginning of 1760-ies, deprived of its Central position in the European world-economy"[5]. Now the new control center of global Finance was in London. As in the case of the financial end of Genoese supremacy, end the Dutch domination of large-scale financial operations did not mean the collapse of the Dutch capital. But Dutch financial dominance was the echo of history and gradually a thing of the past.

In the XVIII century England (after 1707 great Britain) grows in the world's leading colonial power, and France becoming its main rival on the Imperial way. The primitive accumulation of capital began in France in the XVI century, but because of the remoteness of the country from major trade routes, competition with advanced countries early capitalism and the aspirations of the bourgeoisie in economic and political conditions to invest in the sphere of land tenure and public credit has led to slow development of this process. Only since the 30-ies of the XVIII century there was an acceleration in development of capitalist relations in France.

 

Fig. 3: GDP per capita in France XVII-XIX centuries.

 

In 1701, England, Portugal and Holland joined the Holy Roman Empire in the war against Spain and France, which lasted until 1714, and in which Spain lost all its possessions in Europe, and the British Empire expanded considerably from France, she received the Newfoundland and Acadia, and from Spain Gibraltar and Minorca. Gibraltar became a critical naval base and allowed Britain to control the entrance and exit from the Mediterranean sea to the Atlantic. Minorca returned to Spain under the peace of Amiens in 1802. Spain also ceded to Britain the right to a profitable slave trade in Latin America. The outbreak in 1756 of the Seven years war was the first war waged on a global scale battles were fought in Europe, India, North America, the West Indies, the Philippines and on the coast of Africa. The signing of the Paris peace Treaty had important consequences for the British Empire. In North America French colonies were virtually eliminated, France recognized British claims to the land of Rupert, gave the UK New France.

 

 

Fig.4: GDP of England (UK) from the XVII to the XIX centuries.

 

The third karnatsky war in India under French control remained its enclaves, limited in the number of military garrisons and obliged to supply the British satellites, putting a French colony in India in a subordinate position in relation to the British. Thus, the victory of Britain over France during the Seven years war made it the world's major colonial power.

During the French wars Britain acquired a leading position in high Finance have turned into virtually unlimited credit for its power pursuits. One of the peculiarities of the British cycle was "systemic acceleration of the pace of conversion of money into goods"[6]. Network, which connected different regions of the world-economy centered in Britain is clearly becoming wider and denser. As a result, acceleration of the material expansion of capital is globalized capitalist world-economy. In addition, the transition from protectionism to free trade to further the economic development of the country, the accumulation of capital, growth rate of industrialization, more and more expanded the volume of industrial exports. In the nineteenth century, England held the lead the size of foreign trade operations.

"The second half of the XIX century, the trade balance becomes passive, i.e., the size of exports was below the cost of imported products. And in the last third of the XIX century imports are already twice as high as exports. These losses are largely offset by "invisible exports"proceeds of capital exports, intermediary trade and Bank transactions, freight payments, insurance, Maritime trade, etc."[7] in Addition, since the player has taken the role of the principal monetary market in Amsterdam, the inflow of income from abroad was complemented by a noticeable inflow of foreign surplus capital needed to invest. "However, - considered Arrighi such ows and foreign capital by itself cannot explain the steady increase in height and/or length of the waves, which began to be characterized by the export of capital from England in the late XIX —early XX century"[8].

 

Fig.5: British capital exports, 1820-1915 years (in millions of pounds)

   

John. Arrighi believed the combination of the UK national state, commercial and territorial empires feature of the British cycle of accumulation. Thanks to industrialism and imperialism Britain could carry out the function of world trade and financial transit point on a much larger scale than its predecessors.

Like the Dutch, the British regime was based on the principle of commercial and financial intermediation — the principle of buying for resale, accepting for shipment, delivery from around the world for delivery worldwide. When by mid-century, slowed down the great expansion of British and world trade, Britain already had established a territorial Empire, unprecedented and unparalleled in its scale and scope.

Thus, "the industrial revolution and the functioning of Britain as "workshop of the world" is the first, material, phase of the British cycle (mid-eighteenth century to the great depression of 1873-1896 years). Second, financial phase began in 1870 and lasted until the First world war (although in the interwar period, London remained the chief financial center of the world)"[9].

Summarizing, we can conclude that the period of early colonial expansion of Europeans in the countries of the East can be divided into two stages. The first was defined by the early FIFTEENTH century and lasted until the beginning of the XVII century, the Second lasted during the XVII–XVIII centuries. In the first phase of European colonization of the East, the leadership was taken over by Portugal and Spain, the second to those of the Iberian powers were ousted by the Netherlands and England and then France. If at the first stage the main role in the colonization of the East belonged to the feudal-bureaucratic state apparatus of Portugal and Spain, the second – monopolistic trading companies of Holland, England and France. Like Portuguese-Spanish and Dutch-Anglo-French colonialism in the early stage was in the nature of trade. In the early shopping stages of colonialism, on the one hand, created the conditions for the development of capitalism in Europe, on the other – contributed to the formation of the trading oligarchy, closely linked to the tip of the bourgeoisie, which has slowed the transition of some countries to the stage of industrial capitalism.

Thus, in the XVII—XVIII centuries capitalism has become the dominant mode of production in the two countries of Europe — Holland and England, and after the war of North American colonies against British rule — in the United States. Significant progress in the development of capitalism also did France. This fact was the main prerequisite for the wide colonial expansion of the States named, to which came the main role of Spain and Portugal in the colonial use of the overseas countries. In XVII—XVIII centuries laid the foundations of the world colonial system of imperialism. A fierce struggle of European States for colonies took the form of trade wars. Colonies served for the European bourgeoisie, one means a system of capital accumulation, but they have gained increasing importance as sources of many raw materials and external markets, quickly developed in Europe manufactures. Finally, the presence of colonies, encouraging the development of navigation and trade, was an important prerequisite for the growth of trade and of the Navy.

At all times in any economy of the world was not such ultra-high profits, as in the era of colonization of XVII-XIX centuries. Profits gained in this period, the nearby coastal States and trading companies-monopoly of Western Europe, created the most favorable conditions for the primitive accumulation of capital and the subsequent dynamic development of capitalism. It is natural that trade expansion on the basis of sea transportations in the far distance and the monopoly on these shipments helped to raise the individual West European economies – especially the Dutch and English – on unattainable at the time in the world height. As noted on this issue in the late NINETEENTH century, American geopolitician A. Mahan: "the Profound impact of Maritime trade on the wealth and power of the States was clearly understood long before discovered the true principles that control its growth and prosperity"16. The emergence and growth of the capitalist "world-economy", which in the XVII-XIX centuries, extended its influence and domination on the economies of the world, were naturally associated in the beginning with the Mediterranean coast, then the Northern seas of Europe, later the Atlantic ocean. Consequently, all power, hegemony was the seaside (ocean) countries, who built his power largely because of the superiority of colonialism and Intercontinental Maritime trade.

 

[1] Marx K. Capital. Volume I. - M.: Mann, Ivanov and Ferber, 2013. S. 757

[2] Fursov K. A. theory of the development of the world capitalist system: the correlation between the concepts of hegemony Wallerstein and systemic cycles of accumulation John. Arrighi. // Comparative studies economic history (History of world Economics, vol.I): Collection of articles. – M.: Institute of Economics, RAS. 2012. P. 23

[3] Arrighi G. The Long Twentieth Century: Money, Power, and the Origins of Our Times. L.; N. Y.: Verso, 1994.

[4] N. Steensgaard, The Asian Trade Revolution of the Seventeenth Century: The East India Companies and the Decline of the Caravan Trade. Chicago; L.: University of Chicago Press. P. 197

[5] Arrighi G. The Long Twentieth Century: Money, Power, and the Origins of Our Times. L.; N. Y.: Verso, 1994. P. 218

[6] Arrighi G. The Long Twentieth Century: Money, Power, and the Origins of Our Times. L.; N. Y.: Verso, 1994. P. 220

[7] History of the world economy. Edited by G. B. Polyak, A. N. Markova. - M.: Yuniti-Dana, 2002. P. 159-160

[8] Arrighi G. The Long Twentieth Century: Money, Power, and the Origins of Our Times. L.; N. Y.: Verso, 1994. P. 223

[9] Fursov K. A. theory of the development of the world capitalist system: the correlation between the concepts of hegemony Wallerstein and systemic cycles of accumulation John. Arrighi. // Comparative studies economic history (History of world Economics, vol.I): Collection of articles. – M.: Institute of Economics, RAS. 2012. P. 29.

 

Korolchuk V. M.


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