How did capitalism arise?

We are led to believe European progress and prosperity arose through a historic narrative of renaissance, reformation and enlightenment leading to modernity. The English Whig historians of the nineteenth century attribute the rise of British power and prosperity with reformation of political institutions embodying principles of liberty (Carr, 1961) with inspiration for its underlying values sought from antiquity, Greek and Roman humanism. This article outlines a more accurate narrative of the aggressive rise and dominance of Western Capitalism. Fifteenth Century Europe Europe’s feudal structure had been in place for nearly a millennium, emerging from the Roman emperor Constantine’s bringing Christianity to power in the 4th century, a bifurcation of power between pagan kings and the church, each underpinned with their own political hierarchy. The fourteenth century however saw a series of calamities across Europe that destabilised this system, creating a crisis of confidence, widespread critique and demands for reformation. A hundred-year war from 1337 to 1453 between Britain and France left behind death destruction and impoverishment; a third of Europe was decimated by the black death; and the institution of the church to whom the commoners turned to in despair was found institutionally corrupt – having been forced to relocate to France losing its previous endowments and assets. Thus, the fifteenth century world comprised three dominant civilisations Ottomans, Mughals and Chinese with Europe on the periphery. Ottomans Conquer Constantinople The Ottomans conquered Constantinople in 1453 creating a series of unintended consequences. Constantinople sat on the silk trade route, running from China, through Central Asia to Europe, the main economic artery of the time, with few sea routes as alternatives. Muslims now controlled and benefited from taxes on high volumes of trade (spices, silks, porcelain etc). Increased taxes impacted wealthy European elites whilst providing opportunities for those who could import such goods more cheaply. This led to a race to discover new trade routes to Asia and India symbolised by the triad: Christopher Columbus of Spain (1492), and Vasco da Gama (1498) and Ferdinand Magellan (1518) of Portugal. The Rise of Spain Spain had fought multiple wars over the centuries to reclaim the Iberian Peninsula from Muslim rule. Having borrowed heavily from wealthy families across Europe it was on the verge of bankruptcy. Having united the Kingdoms of Aragon and Castile and conquered the final Muslim stronghold of Granada by 1492, she was in desperate need of revenue. King Ferdinand and Queen Isabel tentatively backed Christopher Columbus to circumnavigate the globe as an alternative route India and share in the profits that would ensue. Columbus miscalculated the journey and would have perished in the Atlantic had he not encountered the Americas, landing in the Bahamas archipelago. When the Spanish arrived in the Americas, they described a world which could scarcely have been more different from their own. Europe was ravaged by war, oppression, slavery, fanaticism, disease and starvation. The Americas was occupied by the native Indians in the north, the Mayans and Aztecs in the centre and the Incas in the south. The populations they encountered were healthy, well-nourished and mostly peaceable and egalitarian. Throughout the Americas the earliest explorers, including Columbus, remarked on the natives’ extraordinary hospitality. Columbus abused the hospitality and kindness of the natives by enslaving them. Many of them worked to death, others drank poison to end their misery, some had their arms and legs hacked off if they refused to obey the orders given by the European conquerors - this lead to the biggest genocide in history, estimated to be over 100 million over the following four centuries via diseases, rape, pillage and murder <!--[if supportFields]>   CITATION Sta92 \l 2057 <![endif]-->(Stannard, 1992)<!--[if supportFields]> <![endif]-->. Spain cleared her century old debts and became the most prosperous country in Europe accumulating vast amounts of capital - the largest silver mine on the planet was the Bolivian mine of Potosi. European Race to Colonise the Americas Thus began the European race to colonise the Americas. France founded colonies in much of eastern North America and Caribbean islands, Britain the central regions and in South America, Portugal colonized Brazil. With swathes of land being converted to plantations, there was insufficient local labour to work on them. African slaves were introduced to substitute for native American labour - most notably the West Indies, where the indigenous population was nearing extinction on many islands. The dynamics of the existing African trade was totally changed from slavery of criminals and prisoners of war to enslaving free people for profit. Millions of slaves died in the Atlantic crossings, most living, working and dying in the most appalling conditions whilst working on plantations focused on producing cash crops, tobacco, sugar, cotton. Growth of a New Trading Class Armed with what were in effect free goods – arising from misappropriated land, capital and labour – European traders were able to undermine existing traders both in Europe and around the world resulting in the growth of a new trading class and trading ports around the world, from South Africa to Aden, and from Goa to Singapore. The gradual rise of this new economic class gave European monarchs a wider tax base and increased revenues. This new class negotiated political positions and rights, increasingly assisting monarchs in feudal and religious wars, through funding, mercenaries and weaponry. Now in the corridors of power they were rapidly gaining insight into how power operated. Their rise corresponded with the church’s decline. Matters however came to a head in the seventeenth century when parliament refused to continue funding monarchical policies of fighting religious wars – resulting in the English civil war (1642) and the Glorious Revolution (1688) which pitted them against the King. These wars led to the decline of the feudal system and the rise of parliament filled with aristocrats, land owners, merchants and financiers with an economic as opposed to religious or moral outlook. New World Order Within a century, the Dutch fought an 80-year war of liberation against the Spanish starting in 1588; American land and slave owners like Washington and Jefferson expelled the British from the Americas in 1785 and the French aristocracy in 1792 were replaced by a new bourgeois class as part of the French revolution. Much of continental Europe saw similar changes through the nineteenth and early twentieth centuries. Now controlling levers of power - political, economic and military – a new class of elites were able to commence a colonial project challenging the global order based on the Americas blueprint. India was the first continent to be colonised commencing with the battle of Plassey in 1757 that gave the British control of revenue from the prosperous Bengal region. Displacing the local manufacturers and producers and leveraging local administrative and military forces to control the region, India generated vast revenues for the British. By the time the British left tens of millions had been killed, the domestic economy destroyed, a 24% share of global export markets reduced to 2%, and political/educational systems reengineered giving secular nationalist elites dominance. Australia was discovered by the Royal Navy in 1770 and colonisation began in 1785 with the genocide of the aborigines. The scramble for Africa triggered intense competition amongst the Europeans for resources with similar “games” played out in Central and South East Asia Existing empires came under increasing challenge, including Muslim rule. Mughal rule was abolished in 1820 and the Safavids came under British and Russian control in the nineteenth century (“The Great Game”). The Ottoman’s relative weaknesses as the European powers overtook it became visible with Bonaparte’s entry into Egypt in 1799 requiring help from the British to expel them. Likewise the increasing Russian encroachment in the Ottoman controlled Crimea required the British and French to expel them in 1854 Crimean War. Increasing nationalistic sentiments in East Europe led Greece, Bulgaria and Hungary to break away in the early nineteenth century. European Peasants and the Industrial Revolution New colonies provided access to resources and markets, which stoked the industrial revolution. With increased demand, capital started to be used in large scale manufacturing that incorporated the division of labour (moving away from cottage industries), to produce cheaper goods. In parallel, surplus capital was provided to fund scientific and technological innovations – allowing automation of these vast projects, reducing reliance on labour and reducing production costs. Given the rural nature of Europe, labour in the cities was in scarce supply. This was alleviated by the land enclosure process, where wealthy landowners using their political influence appropriated common land for profit, forcing landless peasants flooding the cities looking for work. The process was often accompanied by force, resistance, and bloodshed, and remains among the most controversial areas of agricultural and economic history in England. The historian Thompson noted, "Enclosure (when all the sophistications are allowed for) was a plain enough case of class robbery." A similar pattern was seen across Europe with Russia being an extreme case with Peter the Great pushing his peoples into serfdom as his first act in power who were forced to construct his cities and fight his wars against the Ottomans. European Backlash – Reactionary ideologies The pursuit of profits by the new elites resulted in the increasing abuse of European populations as old social structures and patterns broke down, documented in the works of famous writers like the British Charles Dickens, the French Victor Hugo and the Russians Tolstoy and Dostoevsky. The feudal system had allowed for a degree of welfare and compassion, with charity, education and welfare delivered through local parishes. With the demise of the church, these systems broke down, the self-reliance ideology of the nineteenth century expected people to fend for themselves and better themselves. This led to a strong reaction amongst thinkers and activists resulting in reactionary ideologies such as socialism and communism emerging. Marginal and cosmetic changes were implemented by elites as a consequence seeking to appease critics. Increased competition and conflict between the European powers for global trade led to World War 1 followed by the Russian revolution in 1917 which sent shock waves across Europe. The removal of the entire Russian elite and the emergence of a new anti-capitalist ideology, Communism, triggered panic across European capitals. In a bid to prevent similar revolutions across Europe reforms in welfare, education, health etc were introduced to appease the masses. A small middle class was expanded to divide the workers and bolster the elites. The continental societies neighbouring Russia were more strongly affected, Britain less so and the US, more distant, saw the least and consequently the reforms followed a similar pattern. With communism finally defeated in 1989, most of the social reforms introduced were reversed and parties championing them slowly moved towards the right, visible the UK’s New Labour emerging during the 1990s. Muslim Backlash – Nationalism Confusion across Ottoman elites to the European existential threat saw a plethora of responses, from the emulation of European secularism and democracy by the likes of Afghani, constitutional reform by the Young Turks through to reasserting an Islamic identity by Abdul Hamid II. The Ottoman elites responded to the European rise by undertaking political, economic, educational and military reformations to bridge the relative decline as part of the tanzimiyat reforms but to no avail. Mohammed Ali of Egypt went the furthest adopting European tactics nationalising much of Egypt’s resources and coercing its peoples to participate in his oppressive reforms – peasants resisted many even amputating their fingers to avoid participating in his modern army. The Ottoman state was hijacked in 1908 by the Young Turks, who aggravated sentiments with their strong nationalistic posturing, dragging the Ottomans into World War I. This provided the pretext for the Allies and their colonies to attack it from all sides – its territories carved up and taken primarily by the British and French. Centuries of progress went off a cliff edge following the 1924 abolition of the caliphate and introduction of nation state borders, bleeding internal trade to death, increasing expenditure with oversized military and security apparatus to suppress its peoples and the hijacking of resources, labour and markets by foreign companies. Modernity The global colonisation project continued, with locus of power moving between various Western countries. The British/French dominated league of nations that replaced the nineteenth century “balance of powers” and in turn was replaced after World War 2 by the UN, IMF and world bank, promoting a US/Russian world order. Post-1989 the world has become uni-polar with locus of power with the US. With the fall of communism in 1989, socialist and communist thinking is being rolled back across the Western societies, with a visible reduction in the welfare state, increased privatisation and free market policies in education and health – with a clearly assertive neo-capitalist ideology emerging reminiscent of the nineteenth century. A New Dawn In the Muslim world, the decline of secular, nationalist and socialist sentiment and the rise of Islamic sentiment have seen a renewed attempt by Western nations to attempt to prevent and contain any changes to their global hegemony. Those who resist via force are deemed terrorists, and those who resist through political activism are extremists. The Hollywood propaganda portraying native Indians as savages is reminiscent of this discourse.