The Creation of World Poverty Part 5

THE CREATION OF WORLD POVERTY

TERESA HAYTER

Pluto Press in association with Third World First

Second edition 1990

PART V

 

Chapter 5: The Europeans Get Ahead

The questions that need to be answered, then, are why, from about 1500 onwards, prodigious advances began to take place in Europe, and why the situation elsewhere deteriorated. The first thing to be said is that the two phenomena are obviously related; how much so, is a matter of controversy. Second, enough may now have been said to make it fairly obvious that there is no justification for racist explanations of the causes of European domination. Otherwise why did civilizations develop elsewhere earlier than they did in Europe?

What is distinctive about the European advance is not just that from the end of the 15^th century onwards they began to expand overseas and eventually to dominate large areas of the world, but that they also were the first to develop the form of production known as capitalism. Capitalism reached its fully fledged form in Britain in the 19^th century, but the first moves towards a factory system in Britain are to be found earlier; Jack of Newberry set up a factory early in the 16^th century. And in the 17^th and 18^th centuries, agriculture in Britain became increasingly capitalist, in the sense that the land was concentrated into relatively large farms on which people worked for wages. The main distinguishing feature of capitalism is that it is a form of production in which the tools, materials and the land necessary for producing goods are no longer owned by the people who do the work, but by capitalists who employ labourers for a wage. In the earliest forms of social organization, each family or group provided for its own needs. Specialization and a division of labour grew up later, at first in the form of individuals working in their own houses to produce particular goods, then, as in the guild system in mediaeval Europe, in small workshops in which craftsmen worked with their own tools and usually sold directly to the public. The organization of wage labourers into factories and mills made possible much greater efficiency in production, partly because mechanization could be introduced on a much larger scale and also because jobs could be broken down into simple, repetitive components and performed much more rapidly by a relatively unskilled workforce. Eventually in 19^th century Britain, goods, notably textiles, could be produced on a mass scale much more cheaply than they could be by skilled artisans working in small workshops, many of which were put out of business. This, of course, is a process which continues today, even within the industrialized countries.

• For capitalist forms of production to develop, two conditions are necessary: a ‘free’ labour force; and the accumulation of money capital in the hands of potential investors.
• In Britain such a labour force became available from the 15^th century as a result of ‘enclosures’ and evictions of small peasants in order to increase the size of holdings.
• Small farmers and tenants were deprived of their means of subsistence when landlords found that it was profitable to enclose what had previously been common land and to take over small farms, often in order to use the land for grazing sheep and producing wool.
• Thus were created large numbers of people who had nothing to sell but their labour-power. Many of those landless found jobs in the new industries of the industrial revolution.
• At first the numbers of landless labourers thus created were, from the 15^th century onwards, greater than the numbers of jobs created in new industries.
• Draconian laws were therefore introduced against vagabondage and the state at first had little difficulty in helping employers to keep down the level of wages.
• Laws against vagabondage and loitering, designed to keep the unemployed off the streets, persisted into the 19^th century and included the ‘sus’ laws – revived in the 1970s and widely used against young blacks.

So much for the ‘rosy dawn of capitalism’. But what about the money for the capitalists to invest? Their apologists claim that they were virtuous, frugal people who saved out of their hard work in order to invest for greater returns in the future. One of the things the Protestant Reformation did in Britain was to reverse the previous moral imperatives; usury was no longer a sin but virtue.

• Much of this initial wealth came, not from the frugality of individuals, but from the new gains to be made in overseas trade – a term which included conquest, piracy, and plunder.
• Marx summarized the process in the first volume of Capital:

‘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 hunting of black skins, signalized the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief momenta of primitive accumulation.’

One reason the Europeans went trading and plundering overseas may have been precisely their own lack of wealth and the greater desirability of the products available overseas, especially in the East. But in the process, and especially after their search for another route to the East led them to the discovery of gold and silver in America, they themselves began to accumulate considerable wealth.

• The question of course remains why this wealth, in Northern Europe and especially in Britain, was invested in industry, whereas elsewhere it was not, or not to the same extent. 
• Spain and Portugal did not use the massive riches they obtained in America to invest in industry.
• In Britain the serfs had obtained their freedom from many of their obligations to landlords after the Black Death. Wars between nation states in Europe were endemic and their monarchies needed money to wage them. They came increasingly to rely on borrowing from the new merchant and banking classes.
• In return the monarchies were willing to support merchants and bankers in their overseas ventures and eager to participate in their profits.
• They also supported them in undermining the entrenched rights of landlords and the restrictive monopolies of the city guilds, thus giving them the freedom they needed to embark on new forms of production.
• This freedom was not available to other merchants elsewhere who were repeatedly crushed by powerful absolutist states such as the Islamic, Chinese and Indian who taxed and confiscated their fortunes.
• The power of these states, in turn, was based on a prosperous agriculture whose advanced forms of irrigation needed and supported a considerable labour force.
• They were relatively self-sufficient and there was less inducement for them to trade or to support the activities of traders.
• There are examples of incipient forms of capitalist production to be found in many parts of the world before capitalism developed in Europe: textile factories in Byzantium, mines in Moslem Spain, mining and metal-working factories in China.

Whatever the historical peculiarities of industrial development in Britain, the crucial question is what effect this had on development elsewhere. The conventional wisdom is, as has been said, that the British and other colonial powers have helped the rest of the world to escape from the backwardness in which they found them, or to which they were doomed by the failings of their societies, if not by the inherent weaknesses of their peoples. A variant of this view is held by some Marxists, who would denounce any imputations of ‘inherent weaknesses’, but who would nevertheless say, following Marx, that the metropolitan powers, by introducing capitalist forms of production into backward and feudal areas, in fact played a progressive role. Thus many Marxists have expected societies elsewhere to go through the same sort of processes, warts and all, that have been experienced in the industrial development of Britain and other countries.

Some, on the other hand, have argued that the effect of European expansion into other parts of the world has been to thwart and stunt the development that would otherwise have taken place. They have argued that foreign intervention, far from helping countries to develop, has produced underdevelopment. Most countries of the world have long since been incorporated into the capitalist world market, but this has not led them to develop fully either capitalist relations of production or, in general, their productive capacity, especially in industry. On the contrary, it has destroyed existing forms of industrial activity and introduced hunger where it did not exist before.

• It is sometimes argued that the effect of external forces on the impoverishment of the underdeveloped countries has been exaggerated, and that the local ruling classes should be blamed instead.
• The answer is obviously that underdevelopment is a combination of external and internal forces.
• The colonial powers and their successors have often allied themselves with the most reactionary forces within underdeveloped countries and have helped to crush resistance to them, in the past and also today.
• In Africa and Asia the Europeans ruled through making use of and reinforcing pre-existing power structures, removing recalcitrant kings and emirs, transforming local rulers into ‘Native Princes’, and ‘Native Authorities’, or simply ‘chiefs’, who were subordinate to and dependent on their colonial overlords but whose powers over their own subjects were often reinforced and extended by the colonial authorities.
• The latter extended their power and defended it by a conscious policy of divide and rule, to weaken resistance and the development of nationalistic movements. Sometimes they imposed reactionary social structures where they did not exist before.
• The Spaniards introduced various semi-feudal forms of land ownership into Latin America which still act as powerful barriers to progress today.
• The process continues today, with many ‘pro-Western’ governments today are dependent for their survival on outside support.
• They and their foreign backers have combined to produce a world order which clearly is disastrous for the great majority of the peoples of the underdeveloped countries.

But whatever the conclusions to be derived from these ideas, it is clear that the world economic system, over the past 400 years, has become increasingly integrated and international economic relationships have had a powerful effect on what can and cannot be achieved within particular societies. The argument here is that, although external domination has not necessarily prevented the development of capitalism in the Third World in the past and may not do so now, it has hindered and distorted such development and increased its costs, and still does so today. The fact that capitalism was established first in Northern Europe gave Europe decisive advantages in its dealings with other countries. If there had been no foreign domination of the countries that are now underdeveloped, they might well have developed faster and with less hardship for their peoples.

Chapter 6: Plunder and Loot