The advent of capitalism and its impact on shaping the world
The transformational 18^th century
Rashed Rahman

The theoretical construct that can help us understand how and why the world has come to be what it is today and whither it is going can only be a study of the history of the advent of capitalism and its subsequent (and continuing) impact on shaping the world. Without this knowledge, the world, let alone individual countries such as Pakistan, would remain wrapped in a cocoon of obfuscation and misleading interpretations.
Our account of the transformation of the globe into the modern world we live in must of needs begin with the Industrial Revolution of the latter 18^th century, the greatest transformation in human history since the ancient times when human beings discovered agriculture, metallurgy, writing, the city, and the state. The centre and leader of this Industrial Revolution was Britain. Although Europe and the US emulated it and followed in its footsteps, Britain emerged not only as the ‘workshop of the world’, but the greatest imperial power for the next almost 200 years. So profound a transformation cannot be fully comprehended without delineating the historical background to this revolution, emerging out of the womb of the crisis of the ancien regime of Europe. Already, mercantile capitalism had impelled European powers onto the path of colonialism in the early 16^th century. But these early colonial conquests pale in comparison with the rise of Britain as an industrial powerhouse, with European imitators ranging from France to Spain, Portugal, Belgium, The Netherlands and many more, venturing forth across the oceans, east and west, to virtually bring the globe into their grip and profoundly transform the countries and areas conquered by their bourgeoisie.
The neighbouring and rival state of Britain in the late 18^th century while it was undergoing its profound transformation that rested on the triumph of capitalist industry, bourgeois society and this class’s modern state, was France. Its contribution to the transformation of this part of Europe (and later the world) was political: the French Revolution of 1789 that overthrew monarchy, established a republic, and, after the revolutionary zeal and excesses of the early years of the revolution paved the way for the rise and eventual crowning as Emperor of Napoleon, spread its political message to the rest of Europe and changed the continent, and arguably the world, forever.
This dual revolution, industrial in Britain, political in France, was, in the case of the former, the triumph not of ‘industry’ as such, but of capitalist industry; in the case of the latter, not of liberty and equality in general but of bourgeois society; not of the modern economy or the modern state but of the economies and states in a particular geographical region (part of Europe and some patches in North America). Nevertheless the centre of this historic transformation was the neighbouring and rival states of Britain and France. From this central crater, the effects of this dual revolution spread in the initial form of a European expansion into and conquest of the rest of the world. This domination of the world by a few western regimes (especially the British) has no parallel in history since even the largest empires of the past could not boast of dominating the world entire. The pre-existing empires and age-old civilisations capitulated and collapsed before the combined effect of the merchants, steam-engines, ships and guns of the west, and then were transformed by the ideas of the latter. And yet it was from within this panoply of western ideas that the foundations of critique and resistance were laid, which were to result in an extraordinary reversal of fortunes of a seemingly indestructible imperial construct within two centuries. By 1848, the spectre of Communism haunted Europe. Despite repression and setbacks, it was to prove the defining antithesis of the capitalist system.
The fundamental problem in the world of 1789 was the agrarian problem. The first systematic school of European economists, the French Physiocrats, assumed as a matter of course that the land, and land rent, was the sole source of net income. The crux of the agrarian problem, however, was the relationship between those who cultivated the land and those who owned it, those who produced its wealth and those who accumulated it. Agrarian property relations in Europe of the time can be divided into three large segments. To the west of Europe, defined as the economic complex whose centre lay in Western Europe, there lay the overseas colonies. In these, with the notable exception of the northern US and a few less significant patches of independent farming, the typical cultivator was an indigenous man working as a forced labourer or virtual serf, or a black person working as a slave. Somewhat more rare were peasant tenants, share-croppers, etc. In other words the typical cultivator was unfree and under political constraint. The typical landlord was the owner of the large quasi-feudal estate (hacienda, finca, estancia) or of a slave plantation. The characteristic economy of the quasi-feudal estate was primitive and self-contained, or geared to purely regional demands. Spanish America exported mined products produced by conquered indigenous people who were virtually serfs, but nothing much of farm-products (there being little or no surplus of these, with most if not all consumed locally). In contrast, the characteristic economy of the slave-plantation zone, whose centre lay in the Caribbean islands, along the northern coasts of South America (especially northern Brazil) and the southern states of the US, was the production of a few vitally important export crops: sugar, to a lesser extent tobacco and coffee, dye-stuffs and, from the Industrial Revolution onwards, above all cotton. This zone therefore formed an integral part of the European economy and, because of the slave-trade, the African. The history of this zone can be reduced to the decline of sugar and the rise of cotton.
To the east of Western Europe lay the region of agrarian serfdom. This vast zone contained patches of technically free peasants: German peasant colonists scattered from Slovenia to the Volga, virtually independent clans in the savage mountains of the Illyrian hinterland, almost equally savage peasant-warriors such as the Pandurs and Cossacks, free pioneer squatters beyond the reach of both lord and state, and dwellers of the vast forests where large-scale farming was not possible. On the whole the typical cultivator was drenched by the flood of serfdom that had risen almost without a break since the late 15^th and early 16^th centuries. In the Balkan areas under the direct rule of the Turks, the original agrarian system of Turkish pre-feudalism in which a rough division of the land supported a non-hereditary Turkish warrior, had degenerated into a system of hereditary landed estates under Muslim lords who seldom engaged in farming. They merely sucked the maximum from the peasantry. This explains the emergence of the Balkans from Turkish domination in the 19^th and 20^th centuries as peasant countries, though extremely poor, and not as countries of concentrated agricultural property. Nevertheless the Balkan peasant was legally unfree as a Christian, and de facto unfree as a peasant, so long as he was within the reach of the lords.
Over the rest of the area, however, the typical peasant was a serf, forced to devote a large part of the working week to labour on the lord’s land, or its equivalent in other obligations. His fate was barely distinguishable from chattel slavery, as in Tsarist Russia and Poland, where he could be sold separately from the land he tilled. In the hinterland of the Baltic Sea – the main trade route with Western Europe – servile agriculture produced largely export crops such as corn, flax, hemp and forest products mostly used for shipping. Otherwise it relied on the regional market, with Saxony, Bohemia and Vienna boasting fairly advanced manufacturing and urban development. Much of it, however, remained backward. The eastern servile area may therefore also be regarded as a food and raw material producing dependent economy of Western Europe, analogous to the overseas colonies. The typical landlord of the servile was thus a noble owner, cultivator and exploiter of large estates.
In the rest of Europe the agrarian structure was socially similar. For the peasant or labourer, anybody who owned an estate was a ‘gentleman’ and member of the ruling class. Conversely, noble status was inconceivable without an estate and still nominally the only gateway to the highest offices of state. In most countries of Western Europe, the feudal order implied by such ideas was still politically alive, though increasingly economically obsolete. This economic obsolescence, which made nobility incomes limp increasingly behind inflation and expenditure, made the aristocracy exploit its privileges of birth and status with ever-increasing intensity.
Economically, however, western European rural society was very different. The peasant had lost much of his servile status in the late middle ages, though still retaining a great many galling marks of legal dependence. The estate had long ceased to be a unit of economic enterprise and become a system of collecting rents and other incomes. The more or less free peasant, large, medium or small, was the characteristic cultivator of the soil. If a tenant, he paid rent or a share of the crop to the landlord. If technically a freeholder, he still owed the local lord a variety of obligations as well as taxes to the prince, tithes to the church, and some forced labour. But if these political bonds were stripped away, a large part of Europe would emerge as an area of peasant agriculture in which a minority of wealthy peasants tended to become commercial farmers selling a permanent crop surplus to the urban market, and a majority of small and medium peasants lived in self-sufficiency off their holdings, unless these were so small as to require taking part-time work in agriculture or industry.
Only a few areas had pushed agrarian development one stage further towards a purely capitalist agriculture. England was the chief of these. There, landownership was extremely concentrated, but the cultivator was a medium-sized commercial tenant-farmer operating with hired labour. A large undergrowth of small-holders, cottagers and the like still obscured this. But when this undergrowth was stripped away (between 1760 and 1830), what emerged was a class of agricultural entrepreneurs, the farmers, and a large agrarian proletariat. A notable exception was Ireland, which combined the disadvantages of the backward parts of Europe with those of the proximity to the most advanced economy of Britain. Here a handful of latifundists exploited a vast mass of tenants by means of extortionate money-rents.
European agriculture was still, with the exception of a few advanced regions, both traditional and highly inefficient. Its products were still mainly the traditional ones: rye, wheat, barley, oats, beef cattle, sheep, goats and their dairy products, pigs, fowl, some fruit and vegetables, wine, and a certain number of industrial raw materials such as wood, flax, hemp, barley, etc.Agriculture remained sluggish, except for its capitalist sector. Commerce, manufactures, and the technological and intellectual activities that accompanied both, was confident, brisk and expansive, and the classes that benefited from them, active, determined and optimistic. The vast deployment of trade was closely tied to colonial exploitation. Maritime trade, growing rapidly in volume and capacity, circled the globe, bringing profits to the mercantile communities of North Atlantic Europe. Colonial power was used to rob the East of commodities, then exported to Europe and Africa, where these and European goods were used to buy slaves for the plantation systems of the Americas. The American plantations in turn exported their sugar, cotton, etc. in ever vaster and cheaper quantities to North Atlantic Europe’s ports. These were then distributed eastwards along with the traditional manufactures and commodities of European East-West trade: textiles, salt, wine, etc.
The planter (nabob) returned from the colonies with wealth beyond the dreams of provincial greed. The merchant and shipper appeared to be the true economic victors of the age, comparable only to the officials who enjoyed an ‘office of profit under the crown’. The chief form of expanding industrial production was the domestic putting-out system, in which the merchant bought the products of the handicraftsmen or the part-time non-agricultural labour of the peasantry for sale in a wider market. The growth of such trade created the rudimentary conditions for early industrial capitalism. The craftsman turned into a home-based worker paid on piece-rates, especially when the merchant supplied him with the raw material and leased out productive tools and equipment. The peasant who also wove became the weaver who owned a small plot of land. Specialisation of processes and functions divided the old craft to create a complex of semi-skilled workers from among the peasants. Old master-craftsmen turned into sub-contractors and employers. But the key controller of these decentralised forms of production remained the merchant, the link of these labourers of villages or back streets with the world market.
The progress of human knowledge, rationality, wealth, civilisation and control over nature with which the 18^th century was richly imbued, the ‘Enlightenment’, drew its strength primarily from the progress of production, trade, and the economic and scientific rationality associated with both. Its greatest champions were the economically most progressive classes, those most directly involved in the tangible advances of the time: the mercantile circles and economically enlightened landlords, financiers, scientifically-minded economic and social administrators, the educated middle class, manufacturers and entrepreneurs. In theory, the objective of the Enlightenment was to set all human beings free. All progressive, rationalist and humanist ideologies are implicit in it, and indeed came out of it. In practice the leaders of the emancipation for which the Enlightenment called were likely to be the middle ranks of society, the new, rational men of ability and merit rather than birth, and the social order that would emerge from their activities would be a bourgeois and capitalist one.
The Enlightenment was a revolutionary ideology, in spite of the political caution and moderation of many of its champions. It implied the abolition of the prevailing society and political order in most of Europe. The anciens regimes could not be expected to abolish themselves voluntarily. On the contrary, in some respects they were reinforcing themselves against the advance of the new social and economic forces. With the exception of Britain, which had made its bourgeois revolution in the 17^th century, and a few lesser states, absolute monarchies ruled in all functioning states of Europe. Those in which they did not rule fell apart into anarchy and were swallowed up by their neighbours (e.g. Poland). Hereditary monarchs headed hierarchies of landed nobles, buttressed by the traditional organisation and orthodoxy of churches and surrounded by an increasing clutter of institutions of long standing but precious little else to commend them.
Agrarian feudal relations in Europe were dealt a fatal blow by the French Revolution, by direct action, reaction or example, and the revolution of 1848. There was a latent, soon to be overt, conflict between the forces of the old, and the new, bourgeois society, which could not be settled within the framework of the existing political regimes, except in Britain, where these already embodied bourgeois triumph. What made the old regimes even more vulnerable was the pressure exerted from three directions: the new forces, the entrenched, older vested interests, and foreign rivals. The most vulnerable points were those where the opposition of the old and new tended to coincide: in the autonomist movements of the remoter or least firmly controlled provinces or colonies. More commonly, white settlers in the overseas colonies of European states resented the policy of their central government because it subordinated the colonial interests to the metropolitan. Such settler movements demanded autonomy and several British colonies either won it peacefully or took it by revolution.
In itself provincial or colonial dissidence was not fatal. Old-established monarchies survived the loss of a province or two and the main target of colonial autonomism, Britain, did not suffer from the weaknesses of the old regimes and therefore remained stable in spite of revolutionary breakaways like the USA. Regions in which the purely domestic conditions for a major power shift existed were few. More threatening was international rivalry, for its tendency to lead to war tested the resources of a state like nothing else. When they failed this test, states shook, cracked, or fell. The conflict between Britain and France dominated the European international scene for most of the 18^th century and led to recurring wars between 1689 and 1815. Nowhere is the superiority of the new to the old social order more vividly exemplified. The British won in all but one of these wars, the American Revolution, but the cost to France of supporting its rival’s enemy was excessive and led to that period of domestic political crises out of which the French Revolution emerged.
The complete political and military domination of the world by Europe and her overseas white settler communities was the product of the age of the dual revolution. In the late 18^th century several of the great non-European powers and civilisations still confronted the aspiring colonialists on apparently equal terms. On the contrary, the current of cultural influence ran from east to west. European philosophers pondered the lessons of the very different but evidently high civilisations. The Muslim powers, though (like Turkey) periodically shaken by the military forces of neighbouring European states, were far from the helpless hulks they were reduced to in the 19^th century. Africa remained virtually immune to European military penetration. Except for small areas around the Cape of Good Hope, the whites were confined to coastal trading posts. Yet already the rapid and increasingly massive expansion of European trade and capitalist enterprise undermined their social order. In Africa this owed itself to the unprecedented intensity of the terrible traffic in slaves, around the Indian Ocean through the penetration of rival colonising powers, in the Near and Middle East through trade and military conflict. Already direct European conquest began to extend significantly beyond the area long since occupied by the pioneer colonisation of the Spaniards and Portuguese in the 16^th century, and the white North American settlers in the 17^th. The crucial advance belonged to the British, who had already established direct territorial control over part of India (notably Bengal), challenging the Mughal Empire, a development that was to lead them to become the rulers of the whole of the Subcontinent. The relative feebleness of the non-European civilisations when confronted with the technological and military superiority of the west was predictable. The four centuries of world history in which a handful of European states with the force of capitalism established a complete, though temporary (as later history showed) domination of the entire world, at the very moment of its climax, also provided the non-European world with the ideas, conditions and wherewithal for an eventual counter-attack.