THE CREATION OF WORLD POVERTY
TERESA HAYTER
Pluto Press in association with Third World First
Second edition 1990
PART VI
Chapter 6: Plunder and Loot
Adam Smith, the classic proponent of the arguments for free trade and an authority resorted to by many latter-day apologists for Empire, wrote in The Wealth of Nations of the early days of European expansion:
“A new set of exchanges, therefore, began to take place which had never been thought of before, and which should naturally have proved as advantageous to the new, as it certainly did to the old continent. The savage injustice of the Europeans rendered an event, which ought to have been beneficial to all, ruinous and destructive to several of those unfortunate countries. To the natives both of the East and West Indies, all the commercial benefits which can have resulted from these events have been sunk and lost in the dreadful misfortunes which they have occasioned.”
- Much of what goes under the heading of ‘trade’, especially in the early days of European expansion, amounted to little more than plunder.
- Europeans coveted the wealth of the East. They obtained the means to pay for it – at first gold and silver and later, more indirectly, slaves – largely by force.
Adam Smith says:
“The pious purpose of converting the inhabitants to Christianity sanctified the injustice of the project. But the hope of finding treasures of gold there was the sole motive which prompted them to undertake it. The first English settlers in North America offered a fifth of all the gold and silver which should be found there to the king, as a motive for granting them their patents.”
According to a Mexican text preserved in the Florentine Codex, the Spaniards were in ‘seventh heaven’:
“They lifted up the gold as if they were monkeys, with expressions of joy, as if it put new life into them and lit up their hearts. As if it were certainly something for which they yearn with a great thirst. Their bodies fatten on it and they hunger violently for it. They crave gold like hungry swine.”
Later when they reached Tenochtitlan, the splendid capital with 300,000 inhabitants, the Spaniards entered the treasure house,
“And then they made a great ball of the gold and set a fire, putting to the flames all that remained no matter how valuable, so that everything burned. As for the gold, the Spaniards reduced it and made bars.”
- So the first purveyors of European ‘civilisation’ were philistines, as well as ‘hungry swine’ and ‘monkeys’. They were also violent and treacherous.
- In Peru, Pizarro extracted a ransom of a roomful of gold and two of silver from the Inca Atahualpa; and then he strangled him.
- The European thirst for gold and silver culminated triumphantly in the discovery of Potosi, the ‘mountain that gushed silver’. They put the natives, those that were left after the ravages of conquest, to work extracting it, and most of them died.
- The Europeans used the gold and silver which they plundered in America to buy what they could not plunder in Asia.
Chapter 7: Plantations, Workers and Slaves
These ravages were further extended with the introduction of sugar, cotton and tobacco plantations. The Europeans eventually introduced the plantation system into nearly all th areas they dominated to grow products they wanted. But it was first introduced in America. The first chapter of Eduardo’s book The Open Veins of Latin America is entitled ‘Lust for Gold, Lust for Silver’. The second is dedicated to ‘King Sugar and Other Agricultural Monarchs’. Sugar was then scarce and highly prized in Europe. On his second voyage to America, Columbus planted sugarcane roots in the Dominican Republic. The plantation system spread throughout the Caribbean and, notably, to the Brazilian northeast. Land was granted by the monarchs to individual conquerors and soldiers and the present-day latifundio system evolved from these original grants of land. Galeano says:
“The land was devastated by this selfish plant which invaded the New World, felling forests, squandering fertility, and destroying accumulated soil humus. The long sugar cycle generated a prosperity as mortal as the prosperity generated by the silver and gold of Potosi.’
- The absorption of land by plantations and latifundios progressed fast and the local people were left with less and less land to provide for their own needs.
- Where everything had bloomed exuberantly, European colonisation left sterile rock, washed-out soil, eroded lands.
- Estimates of the numbers killed by the Spaniards range from 12 million to 15 million; densely populated regions like Haiti, Cuba, Nicaragua and the coast of Venezuela were completely depopulated.
- The Portuguese in India behaved in similar fashion; prisoners were slaughtered and their hands, noses and ears sent in mockery to the ‘barbarian’ kings.
- The availability of labour was a problem for the colonialists everywhere, and they resorted to the use of slaves.
- The shortage of labour was most severe in the Americas and new supplies were sought in Africa.
- Thus began the biggest of all the slave trades, and the one in which the British were the major operators. Estimates of the number of African slaves who reached America alive range from 10 million to over 100 million.
- To this figure must be added the 15% to 20% killed on the journey, the many more killed while resisting capture and the many killed in the wars waged between Africans to obtain captives for sale to Europeans.
- Africa was transformed into a hunting ground for slaves. Local rulers and elites were transformed into accomplices of the ‘trade’; and in return for slaves, the products that were offered were rum, guns and textiles.
- The institution of slavery in the Americas continued up to the 19th century, in particular because of the need of British industry for cotton grown in North American plantations.
The following advertisement appeared in 1828:
“as valuable a family as ever was offered for sale, consisting of a cook about 35 years of age, and her daughter about 14 years and son about 8 years. The whole will be sold together or a part of them, as may suit a purchaser.’
- As Marx commented, the institution of free wage-labour in Europe was built upon the pedestal of slavery in the Americas.
Chapter 8: Profits
These various forms of activity, loosely defined as trade, were highly profitable. The British started off their accumulation with piracy but the biggest profits were to be made in the slave trade. As Professor H. Merivale put it in a lecture at Oxford University in 1840:
“What raised Liverpool and Manchester from provincial towns to gigantic cities? Their present opulence is as really owing to the toil and suffering of the Negro as if his hands had excavated their docks and fabricated their steam engines.”
And Walter Rodney says:
“The actual dimensions are not easy to fix, but the profits were fabulous. John Hawkins made three trips to West Africa in the 1560s, and stole Africans whom he sold to the Spanish in America. On returning to England after the first trip, his profit was so handsome that Queen Elizabeth I became interested in directly participating in his next venture; and she provided for that purpose a ship named the Jesus. Hawkins left with the Jesus to steal some more Africans, and he returned to England with such dividends that Queen Elizabeth made him a knight. Hawkins chose as his coat of arms the representation of an African in chains.”
After the British won the Battle of Plassey in India in 1757, their attention shifted to a great extent from the West Indies to India. The famous Bengal Plunder began to arrive in London soon after, and its arrival coincided with what is generally considered to be the beginning of the industrial revolution in Britain. It has been estimated that the total British plunder of India between 1757 and 1815 amounted to £1,000 million; the national income of Britain in 1770 was about £125 million. Direct tribute payments alone through the East India Company approximated £1 million in some years. Ernest Mandel, in his book Marxist Economic Theory, adds up the value of the gold and silver taken from Latin America up to 1660, the booty extracted from Indonesia by the Dutch East India Company from 1650 to 1780, the harvest reaped by French capital in the 18th century slave trade; and the profits from slave labour in the British Antilles and from a half-century of British looting in India. These, Mandel says, are only the most substantial amounts for which figures, of a sort, are available. But they add up to over a billion pounds sterling, or ‘more than the capital of all the industrial enterprises operating by steam which existed in Europe around 1880’. For Britain alone, the profits from operations in the West Indies and India between 1760 and 1780 was probably more than double the amount of money available to invest in the new industries of the industrial revolution.
The money thus extracted by trade and plunder in the countries that are now underdeveloped may not have been directly invested in industry, and may, as some have argued, have been used mainly for luxury consumption, land purchase and further expansion of trade. But some of it certainly found its way into industry through the banking system if not directly. It thus provided part of the money needed to get the process going.
Chapter 9: Markets and the Destruction of Industries