>Lenin's idea that the prosperity of the industrial core is critically >linked to a poor periphery from which the core can buy raw materials >was perhaps true (but perhaps not) in 1900. (The best example of >this, in my view, is the U.S.-British cotton trade of the first half >of the nineteenth century.) But it is now 2000, not 1900. And the >pattern of trade and wealth creation is very, very different... > >Brad DeLong CAPITALISM AND INEQUALITY AMONG NATIONS Born in Western Europe, industrial capitalism spread in the course of a century over the entire world. But this expansion assumed a very special form: all the countries in the world became outlets, sources of raw material and, to a smaller extent, fields of investment for capital. But the capitalist mode of production, and in particular the capitalist factory, touched only the periphery of the economic life of three continents. This is, briefly, the cause of the phenomenon is today known, shamefacedly, by the euphemism of "underdevelopment". While capitalism has spread all over the world, the greater part of the world has experienced only its disintegrating effects, without benefit from its creative side. Indeed, the unlimited industrial advance of the Western world has been possible only at the expense of the under-developed world, which has been doomed to stagnation and regression. Three-quarters of a century after the start of the era, the United Nations have been compelled to recognise that in spite all the plans for aid to the under-developed countries, countries are becoming richer whereas the poor ones are becoming poorer. The present division of the world between industrialised nations and developed nations is not the result of an inescapable whim of nature, of an unequal distribution of natural resources, or of a comparatively large and small density of population as between this country and that. It is true that capitalist industry was established first place near substantial deposits of coal. But, while there is plenty of coal in England, Belgium, the Ruhr, the North and East of France--areas which were rapidly industrialised at the beginning of ineteenth century--immense quantities of coal are also to be found in easily workable conditions, in the Donbas, the Urals, Mali, India and South Africa, where industrialisation only began a century later, and in some cases has still not begun. Though the discovery of oilfields changed the economic history of the United States, even bigger oilfields existed at the same time in the Middle East, the Sahara and Libya, which did not begin to be developed until much later and then on a relatively modest scale. In order to refute the view that the degree of economic development or industrialisation depends on the density of population, it is enough to recall that areas so highly industrialised as Germany, the Netherlands or Belgium have today, and had already at the beginning of the nineteenth century, a density of population much greater than is found in countries such as Spain, Portugal, Turkey or Brazil. India and Japan were both under-developed countries in 1850. The country which became industrialised the sooner was also the one with the higher density of population. In reality, the division of the world into "rich" and "poor" nations can be explained only by historical and social reasons, and to a large extent by the history of capitalism itself. True, as we have shown above, the prehistory of capitalism, the extent of accumulation of commercial capital, the degree of penetration of money economy into agriculture, the totality of socio-economic conditions favourable or unfavourable for the application of scientific techniques to production, determined to a large extent the birth of industrial capitalism in Western Europe, and held back the same process in India, China, Japan, Java and other essentially agricultural civilisations. Nevertheless, this backwardness was not very marked in the middle of the eighteenth century, and above all was not insuperable. If it had become so a century later, the catastrophic aspect of under-development was due first and foremost to the particular way, that is, a violent and plundering way, in which contact was made between these two worlds. In the decisive formative period of the capitalist mode of production, extending from the sixteenth to the end of the eighteenth century, the creation of the world market was of crucial importance. Its main results for the primitive accumulation of capital in Western Europe have been examined above. But all through this period of the birth of capitalism the two forms of surplus-value appeared at each step. On one hand, it was the outcome of the surplus labour of the wage workers hired by the capitalists; on the other, it was the outcome of vales stolen, plundered, seized by tricks, pressure or violence from the overseas peoples with whom the western world had made contact. From the conquest and pillage of Mexico and Peru by the Spaniards the sacking of Indonesia by the Portuguese and the Dutch and the ferocious exploitation of India by the British, the history of the sixteenth and eighteenth centuries is an unbroken chain of deeds of brigandage which were so many acts of international concentration of vaIues and capital in Western Europe, the enrichment of which was for, in the literal sense of the word, by the impoverishment of plundered areas. It can be stated unhesitatingly that the contribution made by this capital was decisive for the accumulation of the commercial capital and money capital which, between 1500 and 1750, created the conditions which proved propitious for the industrial revolution. It is difficult to calculate the total amount involved, but if one takes into account only the most substantial contributions these add up to a staggering sum. Hamilton estimates at over 500 million gold pesos the total amount gold and silver exported from Latin America between 1503 and 1660. According to Colenbrander, the total value of the dividends, officials' remittances and cargoes of spices taken out of Indonesia by the Dutch East India Company amounted to 600 million gold forms for the period 1650-1780. On the basis of the calculations made by Father Rinchon, we know that profits from the slave trade amounted in eighteenth-century France to nearly half a billion livres tournois (without including the profit arising from the work done by the slaves, which came to several billion livres).' The profits obtained from the labour of the negroes in the British West Indies amounted to £200 to £300 million. Finally, even if estimates differ markedly on this point, it is not exaggeration (see the work of a high colonial official, a firm defender of the Empire, Sir Percival Griffiths: The British Impact on India) to estimate at £100 to £150 million the outcome of the British plundering of India between 1750 and 1800. The total amount comes to over a billion pounds sterling, or more than the capital of all the industrial enterprises operated by steam which existed in Europe around 1800! We do not allege that all this wealth went directly to nourishing European industry. A large share of it did nourish this industry indirectly, through the luxury expenditure of the rich, whether new or old, through State expenditure financed by public loans and paid for out of colonial revenues. But the historical connections between this influx of capital into Europe and the conditions favouring the industrial revolution are undeniably direct. Father Rinchon remarks regarding the enrichment of France in the eighteenth century: "The growth in colonial establishments, the progress in trade and transport, and rise in power, wealth and reputation of the metropolitan country, all these resulted from the slave trade. France's external trade in the eighteenth century enjoyed a favourable balance of several million livres, and this was due to the export of colonial products which were the fruit of slave labour." G. Martin observes, even more precisely: "Every port to which the slave-ships returned saw the rise of manufactures in the eighteenth century--refineries, cottons, dyeworks, sweet-making--in increasing numbers which testified to the advance of business and industry. In Nantes, for instance, there were founded in the course of the eighteenth century 15 refineries, 5 cotton manufacturers . . . , two big dyeworks, two sweet-making establishments . .. Industries created, private fortunes increased, the public wealth of the cities transformed, the flowering of a new class--the big merchants eager to play a part in public affairs--these are the essential features with which the slave trade marked the evolution of France in the eighteenth century." And Brooks Adams defines the direct relationship between the plundering of India by the East India Company, after the battle of Plassey, and the beginning of the industrial revolution: "Very soon after Plassey the Bengal plunder began to arrive in London, and the effect appears to have been instantaneous, for all authorities agree that the 'industrial revolution', the event which has divided the nineteenth century from all antecedent time, began with the year 1760 (the battle of Plassey occurred in 1757) .. . At once, in 1759, the bank (of England) issued £10 and £15 notes (for the first time)." The writer recalls that Burke estimated at £40 million the British extortions in India between 1757 and 1780. H. V. Wiseman estimates that between 1770 and 1780 the labour of slaves in the West Indies brought another £40 million to Britain. Around 1770 the value added annually (wages plus profits) in the whole of British industry was put at only £24~5 million in the well-known writings of Arthur Young (Political Arithmetic, etc.). It can be concluded without exaggeration that for the period 1760-1780 the profits from India and the West Indies alone more than doubled the accumulation of money available for rising industry. Thus, even before industrial capitalism had developed in England, the exploitation, whether casual or systematic, of overseas countries was one of the chief sources of Europe's wealth. And the chief victims of primitive accumulation were, more than the yeomen driven from heir farms by sheepraising or the journeymen of the crafts left without work in the towns and forced to work for a miserable pittance in or-relief workshops, the indios condemned to mita (forced labour), the Bantu sold as slaves, the wretched inhabitants of the Hongy Islands, terminated by the expeditions of the Dutch East India Company, the people of the decadent Mogul Empire, pitilessly plundered by the agents of the British East India Company. It was this systematic plundering of four continents, during the commercial expansion of the sixteenth to eighteenth centuries, that created the conditions for the decisive lead acquired by Europe from the industrial revolution onward. THE WORLD-WIDE DIVISION OF LABOUR The export of goods to the backward countries during the nineteenth century had the effect of destroying the old modes of production in those countries without making possible the introduction of the new capitalist mode of production. The export of goods made up to some extent for the inadequacy of the native property-owning classes as regards accumulation of capital, and so made possible an initial phase of capitalist development in these countries. But the imperialist bourgeoisie introduced the capitalist mode of production into the colonial semi-colonial countries in a very special way. It developed there without any connection with the country in question's needs for economic or industrial development, but, instead, in accordance with exclusive interests of the imperialist bourgeoisie and of the metropolitan country itself. In the capitalist countries of Europe and America, as also in the dominions of the British Empire, the capitalist mode of pro-developed more or less organically, despite the spasmodic of its growth. The manufacturing transformation industries were developed parallel with or even prior to the basic industries; light was directed primarily towards the internal market, which in its turn expanded because agriculture provided raw material for a proportionate development of all branches of the economy, of achievement in the short run owing to the anarchy of capitalist production, was realised in the longer run, by way of crises and depressions. The development of the mode of production proceeded otherwise colonial and semi-colonial countries. The capital came from the bourgeoisie of the imperialist countries, who were looking for a kind induction with guaranteed markets, which would make it possible to realise the colonial super-profits produced by colonial labour. But the under-developed countries are by definition poor, with a narrow internal market for manufactured goods; their wants in respect of industrial products are moreover as a rule covered by the capitalist industry of the metropolitan country, which is not in the least tempted to compete with itself. This is why the capital exported to the under-developed countries specialises essentially in production for the world market (together with the establishment of the infrastructure needed for this production). "Such modern production as was developed in colonial areas was primarily for the world rather than the local market. The growth of the seaports is evidence of this, as is the absence of interior communication networks . . . In all colonial areas, the contribution of the local peoples to industrial development has mainly taken the form of labour." (Condliffe, "The Commerce of Nations") And in order to avoid competition with the metropolitan country's industrial production, this production for the world market is essentially a production of agricultural and mineral raw materials. The economy of the colonial and semi-colonial countries becomes the complement of the capitalist economy of the metropolitan countries and is developed only within the limits set by this function. The result is a completely one-sided economic development, limited to the production of a small number of products or even of a single product (monoproduction, monoculture). In Chile, the tax on sodium nitrate exports provided, on an average, half of the state's revenue between 1880 and 1930; after that, copper took first place. In Cuba sugar is the backbone of the economy; in 1937 it accounted for 78.7 per cent of the value of all exports. In the same year, exports of tin from Bolivia made up 70 per cent of all exports. This percentage is still higher in the case of cotton exported from Egypt, the Sudan and Uganda, of oil exported from Venezuela, Iraq, Saudi Arabia, Kuwait and Qatar. Coffee provided in 1955 69 per cent of Guatemaia's exports and 84 per cent of Colombia's. In the same year bananas made up 74 per cent of Panama's exports, and coffee and bananas together 72 per cent of exports from Honduras, 75 per cent of those from Ecuador, and 87 per cent of those from Costa Rica. Ground-nuts and products derived from them represented 85 per cent of Senegal's exports, and coffee and cacao 85 per cent of those from the Ivory Coast. In Malaya exports of rubber and tin accounted in 1939 for over 80 per cent of the total figure. In Greece tobacco provided between 55 and 60 per cent of all exports in the inter-war years. India's exports of jute and tea, Brazil's of coffee and cotton vary between 55 and 75 per cent of the total exports from these countries. In Indonesia the exports of rubber, petrol, tin and copra make up 80 per cent of the total. Ceylon's exports of rubber and tea account for the bulk of sales abroad. The list could be completed by including practically every other under-developed country. Monoculture and monoproduction make these countries strictly pendent on the international business situation, and entail a number of economic and social defects: a fundamental instability in the economy. which is subject to sudden fluctuations; repeated bursts of inflation and increase in the cost of living; substantial periodical unemployment; serious disturbance of the country's ecology through soil-erosion; over-exploitation of the soil, causing its exhaustion; under-of the population owing to the excessive spread of mono-culture with disastrous effects on the fertility of the soil. "The prevailing starvation in South America is a direct consequence the continent's historical past. This history is one of colonial exploitation along mercantile lines. It developed through successive economic cycles, the effect of which was to destroy, or at least upset, the economic integrity of the Continent. There were the cycle of gold, cycle of sugar, the cycle of precious stones, the cycle of coffee, cycle of rubber, the cycle of oil. And during the course of each these cycles, one finds a whole region giving itself up entirely to the monoculture or mono-exploitation of a single product--at the same forgetting everything else, and thus wasting natural wealth and neglecting the potentialities of regional food supply. The one-crop culture of cane sugar in the Brazilian North-East is a good example. The area once had one of the few really fertile tropical soils. It had a climate favourable to agriculture, and it was originally covered with forest growth extremely rich in fruit trees. Today the all-absorbing, self-destructive sugar industry has stripped all the available land and cc! it completely with sugar cane; as a result this is one of the starvation areas of the continent. The failure to grow fruits, greens vegetables or to raise cattle in the region has created an extremely food problem in an area where diversified farming could produce an infinite variety of foods." Boyd Orr has had to note that "in some of the central Latin countries soil erosion is more serious than in North America"; owing to the lack of rational exploitation, which in turn is due to monoculture. The same phenomena are found in Africa and Asia: "It is not only because it cuts down local production of foodstuffs that the regime of production for export is ruinous to the natives, but also because it exausts the soil by intensifying the factors of erosion. This has hap pened with cocoa-bean-growing in the Gold Coast and monkey-nut growing in Senegal." Professor Gouron declares that the "great extension of the cultivation of ground-nuts is a false wealth" for the Sudan, that its forests are on their way to disappearance and that the soil and agriculture are suffering frightful damage. In Ceylon, the Report of the Kandyan Peasantry Commission (Colombo, 1951) explains how the monoculture of coffee and tea, and the uncontrolled deforestation, brought about ecological damage which was the fundamental cause of the serious floods experienced in 1957. In Egypt the extension of cotton-growing and the practice of permanent instead of periodical irrigation caused a rapid exhaustion of the soil. Owing to the lack of drainage, the same phenomena, closely linked with monoculture, transformed the Nile valley into a real lazar-house: 55 per cent of the population had bilharzia, 30 per cent ankylostomiasis and 15 per cent malaria; among the rural population the percentage of unfortunates suffering from bilharzia, a very debilitating disease, amounted to 75 per cent. The reduction in the area under grain crops in countries like India, although they suffer from a chronic shortage of foodstuffs, is a further consequence of monoculture. In the period between 1934-35 and 1939- 40, the area of India's soil under food crops declined by 1.5 million acres, while during the same period the area under export crops increased in the same proportion. At the time of the Korean war boom a similar phenomena occurred; the area under rice fell by 8 per cent to the advantage of the area under cotton. In Egypt the wheat-growing area fell sharply during the First World War, to the advantage of cotton, causing a serious famine. The apologists of imperialism sometimes claim that monoculture and monoproduction are the consequence of "natural" conditions in the colonial and semi-colonial countries. This does not fit the facts. Though these countries certainly possess abundant natural riches, equivalent riches did not lead to monoproduction in England, Canada, Sweden, Belgium, Bohemia, Silesia, the Ruhr, etc. Monocultures, far from being "natural" have usually been imported from abroad (notably, coffee in Java, Ceylon, and Brazil, cotton in Egypt and the Sudan, sugar-cane in Cuba, etc.). The best example in this connection is natural rubber in South-East Asia: "The increased demand was met from plantations (both large-scale capitalistic estates and peasant smallholdings) of South-East Asia. chiefly Malaya, Sumatra and Java, while the output of wild rubber from South America declined despite favourable prices. A reason for the migration of the rubber-growing industry is to be found in the access of these countries to large reservoirs of labour South India, China and Java, as well as to the capital markets of Western Europe; the presence of enterprising European merchant firms and a stable administration also played an indispensable part. It is of special interest that neither Malaya nor Sumatra, the two main producing countries, had a large indigenous labour force, a particularly fertile soil, or supplies of local capital when rubber was established there. No survey of their resources carried out, say in 1895, would have suggested that within a few years these territories would be the principal producers of the leading tropical plantation crop. In fact, as the same writers make clear, it was not only the crop itself that was introduced from abroad, but also the labour (Africans the West Indies, Tamils to Ceylon, Chinese to Malaya and Indonesia, Indians to East Africa, etc.). Thus, the penetration of the capitalist mode of production into the colonial and semi-colonial countries during the last three-quarters of a century has more than anything else produced there the degrading barbarous effects of an all-round commercialisation of social life, without the complementary civilising tendencies of capital being allowed to flower. It was the imperialist export of capital that realised, for the first in man's history, a genuine world-wide division of labour, a real universal world market, which intimately bound together all the in the world. At the time when this development had reached its highest point, on the eve of the First World War, the still relatively free circulation of goods, capital and people (though already hindered by protectionist and monopolistic tendencies) made all countries interdependent. Capital thus accomplished the socialisation and de facto internationalisation of production on the world scale, though almost exclusively to the advantage of the metropolitan countries. In bourgeois society, where the production of commodities becomes universal, no producer produces use-values first and foremost for his own consumption, using only his "surplus" for exchange. Similarly, before 1914. in no country was the totality of the production of commodities intended to satisfy primarily the country's own needs, with only the "surplus" for export. Each country has a number of branches of production which work primarily for the world market--shaped by international transfers of capital and in no way corresponding to any "natural" or "geographical" structure, let us recall! --and it exists only thanks to the income from these branches. The direct or indirect labour of the workers of many countries enters into every one of the products consumed in any single country. The social productivity of labour, considered from the international standpoint, goes forward with giant strides, owing to this specialisation which crushes the harmonious development of the backward peoples, just as the division of labour within a capitalist nation gave a tremendous push forward to the productive forces while pitilessly crushing the free development of individuals. The interdependence of all the countries in the world is vividly described by Rosa Luxemburg: "German metal products go to the neighbouring countries of Europe, to South America and to Australia; leather and leather goods go to all parts of Europe; German glassware, sugar and gloves go to Britain; furs to France, Britain and AustriaHungary; glycerine dyes to Britain, the U.S.A. and India; slag for fertiliser to the Netherlands and Austria-Hungary; coke to France; coal to Austria, Belgium, the Netherlands, Switzerland; electric cables to Britain, Sweden and Belgium; toys to the U.SA.; German beer, indigo, aniline and other dyes derived from tar, medical supplies, cellulose, goldsmith's work, stockings, fabrics and clothing made of wool and cotton, rails, all are exported to nearly every trading country in the world ... "On the other hand, however, we eat Russian bread and Hungarian, Danish and Russian meat; the rice we eat comes from the Dutch East Indies and the U.SA.; the tobacco from the Dutch East Indies and Brazil; we import cocoa from West Africa, pepper from India, lard from the U.S.A., tea from China, fruit from Italy, Spain and U.S.A.; coffee from Brazil, Central America and the Dutch East Indies; meat extract from Uruguay; eggs from Russia, Hungary and Bulgaria; cigars from Cuba; watches from Switzerland; champagne from France; hides from the Argentine; bed-feathers from China; silk from Italy and France; flax and hemp from Russia; cotton from the U.SA., Egypt and India; fine wool from Britain; brown coal from Austria; saltpetre from Chile; Quebracho wood for tanning from the Argentine; wood for building work and pit-props from Russia; wood for basket-making from Portugal. copper from the U.SA.; tin from the Dutch East Indies; zinc from Australia; aluminium from Austria-Hungary Canada; asbestos from Canada; asphalt and marble from Italy, stones from Sweden; lead from Belgium, the U.SA. and Ausgraphite from Ceylon; phosphoric lime from the U.SA. and iodine from Chile.." This world-wide division of labour, achieved through the export of capital, centralised the production of manufactured goods in Western Europe and the U.SA., the production of basic foodstuffs in Eastern Europe and the large overseas countries (the U.S.A., Canada, the Argentine, Australia), and the production of vegetable and mineral materials in the rest of the world. But this division of labour, originally created by the export of capital, is inevitably undermined by frightful differences in standard of living, the brutal subjection of one nation to another, prepare the way for the colonial revolution which in turn pushes forward the industrialisation of the underdeveloped countries and intensifies the international contradictions of capital. (From V. 2 of Ernest Mandel's Marxist Economic Theory) Louis Proyect (http://www.panix.com/~lnp3/marxism.html)
