WEST EUROPE BETWEEN 1200 CE AND 1950 CE: THE RISE OF ‘CAPITALISM’ AND ‘COLONIALISM’ & THE MAKING OF ‘CAPITALIST WORLD ORDER’

WEST EUROPE BETWEEN 1200 CE AND 1950 CE: THE RISE OF ‘CAPITALISM’ AND ‘COLONIALISM’ & THE MAKING OF ‘CAPITALIST WORLD ORDER’

Siddhartha Sen

1. INTRODUCTION

The rise of ‘Capitalism’, and advent of ‘colonialism’ are two of the most discussed and passionately debated subjects in the discourses of history, political economy and international politics, nevertheless these are also the topics in which scholars generally tend not to see the wood for the trees. In the mainstream media, readers will seldom come across any insightful essay or analysis that might instigate a thorough discussion on any of these topics (the reporters are almost permanently tuned to consider these phenomena as perpetual one ever since the prehistoric homo sapiens settled for sedentary lifestyle with agriculture and animal husbandry as primary occupations). In the alternate media blog-sites, many analyses and articles appear which directly or indirectly allude to these two phenomena in more detail as compared to the mainstream media. Still, apart from academic research papers and university curriculum, cogent, thorough and simple write-up on this matter that can be understood by the common people, is not an easy task. This essay is an attempt for a thorough and insightful discussion on – perhaps the most significant question of the history of the humankind in the second millennium CE – how capitalism and colonialism morphed into a single entity in west Europe, and spread its wings into the British colonies in North America and Australia, and finally established the ‘Capitalist World Order’, a world-wide system of political economy (which has been also theorized as the ‘World-System’ by a distinguished section of academicians and intellectuals).

While discussing such a contentious matter, it is necessary to identify the objectives, the underlying assumptions, and the boundary limits beforehand as noted below:

1. Transformation of the late medieval feudal and semi-feudal economy in different regions of west Europe into capitalist economy took place in multiple stages starting from 13th century. Taking that into consideration, the objectives of this article are to: (a) describe in detail the politics and the economies of a few significant west European powers that were leading the process of transformation from medieval feudal and semi-feudal system to capitalist colonialist system, (b) put forward a hypothesis on the factors that acted as ‘catalysts’ in the process of the making of capitalism, colonialism, and Capitalist World Order, (c) present a hypothesis on the trajectory and final destination of capitalism, colonialism, and Capitalist World Order, and (d) present a hypothesis on the architecture of the foundation of the present Capitalist World Order and how it was constructed over centuries.
2. This is not an objective of this article to get into the tale of how capitalism evolved in west Europe from the womb of feudalism through the transformation of the relations of production – after Smith-Ricardo-Marx-Engels, so many renowned liberal Capitalist, Marxist, non-liberal non-Marxist historians and economists discussed, analyzed, and debated the subject in depth, and authored hundreds of seminal books on the ‘transformation processes’ of a feudal-cum-semifeudal economy into a colonialist-capitalist economy in different regions of west Europe, USA, and the world. My focus would be restricted to the identification of the ‘key phases of the transformation’ and ‘influential agents of the transformation’ starting from the germination stage in the medieval west Europe till the maturity in the 20th century west Europe.
3. West Europe is the geographical region where it all happened. So, in order to keep this write-up simple, I have avoided paying attention to the relatively low-key events related to the transformation from feudalism to capitalism in east Europe. And, the far eastern borders of Europe where East Slav communities and their contemporaries like Varangians, Khazars, Cumans, and Mongols merged into a relatively new ‘Russian’ identity, for all practical purposes were almost disconnected from the west European economic and political theatre. Even if the east European kingdoms like Polish, Hungarian, Romanian, Bulgarian, Serbian, and Russian had trading interactions with the west European principalities and Asian kingdoms during the medieval ages, they were not anyway instrumental for transformation towards capitalism, colonialism, or Capitalist World Order.
4. The most significant assumption, so far as this article is concerned: whenever Jew, Dutch, Anglo, French, Spanish, or any other community is being mentioned, the reader would have to unfailingly consider it as ‘the elites, aristocrats, and oligarchs of the aforementioned community’. That, the top 5% high net worth families of any society control the remaining 95% of the society, has been an established fact ever since the homo sapiens created permanent dwelling discarding the hunter-gatherer life. However, 95% people of a community can’t be held responsible for the deeds and misdeeds of the 5%. And, it must be mentioned categorically, that this essay doesn’t identify the 95% as the motive force for ideologies such as capitalism and colonialism – on the contrary, the underlying assumption is that the 95% population of each of the west European society is ultimately the silent casualty of the application of those ideologies!
   Another point that needs to be remembered is: while Anglo, French, German, Dutch, Italian etc. essentially identify the ethnicity and language (irrespective of the religious belief) of the respective community, ‘Jewry /Jewish/Jew’ word signify communities that profess Judaism or Christianity as religious faith and peoples are descendants from any ethnicity like Canaanite (Mizrahim), Berber/Arab/Phoenician (Sephardim), or Khazarian (Ashkenazim).
5. Ideally, scope of this analysis should include economics, politics as well as culture in detail, for capitalism, colonialism, and final destination the ‘Capitalist World Order’ involve all three aspects of the society (and state). However, due to limitations of time and space, I couldn’t detail the ‘culture’ part. However, that didn’t deter me to mention, while concluding this article, the stellar role played by ‘culture’ for spreading the Capitalist World Order.
6. Why this article only chose the medieval west Europe as the starting point for the journey of capitalism? Don’t we know that, 11th century Song China or 15th century Ming China had many aspects of the Chinese economy that could be termed as proto-capitalist? So, why don’t we accept medieval China as one of the few milestones of that journey? The truth, according to my understanding, is even if the Chinese technology, industry, trade and commerce were well-developed and more advanced than the contemporary west Europe, the Chinese society and state clearly lacked the essence of capitalism and colonialism – ONLY the combination of ‘greed’ for commercial profit (a trait common to traders and businessmen of all communities across the world) and ‘exceptionalism‘ (a socio-political ideology of certain European and west Asian communities) resulted in the rise of ‘capitalism’ and ‘colonialism’. The second factor was simply absent in the Chinese social psyche. Even if the medieval Chinese monetary and banking system were path-breaking, their government lacked the dogma of capitalism – the concept of capital trouncing all other creeds and ideas of human civilization, couldn’t even appear in the Chinese society and state.
7. This endeavour is an inquiry into the historical progression of capitalism, colonialism, and the Capitalist World Order associated with it. The author hasn’t kept any stone unturned in order to present a cogent, logical, and rational proposition backed by appropriate historical facts. I have used a lot of relevant quotes from appropriate books and research articles, so that my proposed hypotheses are built on evidences.

Like any other research work, this one is far from being perfect. Even though, I have attempted to raise as many queries as possible, and to seek answer to those queries, it is possible that many more are still waiting to be deciphered. It is also possible, and indeed, desirable that, the readers raise questions on the hypotheses presented in section 5 of this essay.

2. POLITICS AND ECONOMY IN WEST EUROPE DURING 1200 CE TO 1950 CE

This section will be distributed in two sub-sections: brief discussion on the kingdoms and states of west Europe around 1200 CE, and detail analysis of four most significant political and economic entities of west Europe which contributed towards the germination and growth of capitalism and colonialism as well as the making of the Capitalist World Order.

2.1. Political Divisions of West Europe in 1190 CE

Let’s delve into the details of political divisions in Europe (including the geographical regions, the kingdoms and the communities they ruled over) around 1200 CE before the Mongol military forces burst into the vast steppes of east European landmass. The map has been given in Fig 1.1, and details have been tabulated in Tab 2.1. [Link for the map 🡪 https://commons.wikimedia.org/wiki/File:Europe_mediterranean_1190.jpg ; this has been sourced from Perry-Castañeda Library, Map Collection: From the “Historical Atlas” by William R. Shepherd, New York, Henry Holt and Company, 1923].

Fig: 2.1 Europe and the Mediterranean region, 1190 CE

If we take a snapshot of the landscape of Europe during the beginning of 13th century, we would be stunned to find that there was no cultural, social, or political identity of “Europe”. It was only a geographical region which became a melting pot of different Celtic, Latin, Germanic, Viking, Slavic, Turkic, Mongol tribes and their cultures who, for most of the period, were in conflict with each other for political power and wealth. Tentatively Tab 2.1 shows how the European landmass was populated in 1190 CE:

Tab: 2.1 Political division of Europe in 1190 CE 

Political Entity in 1190 CE	Compare With the Country existing in 2000 CE	Majority Tribe/ Community in 1190 CE	Minority Tribe/ Community in 1190 CE
IBERIAN PENINSULA
Kingdom of Portugal	Four-fifth territory of Portugal	Vandal, Alan, Visigoth	Arab, Sephardim Jew
Almohad Caliphate with capital in Seville, & Córdoba	Southern region of Spain covering 40% of territory	Vandal, Alan, Visigoth	Arab, Berber, Sephardim Jew
Kingdom of Castile	40% of territory of Spain	Galatians, Vandal, Alan, Visigoth	Arab, Berber, Sephardim Jew
Kingdom of Aragon	20% of territory of Spain	Galatians, Vandal, Alan, Visigoth	Arab, Berber, Sephardim Jew
Kingdom of Navarre
BRITISH & IRISH ISLES
Kingdom of England (part of Angevin empire)	England region of the U.K.	Anglo-Saxon	Norman Viking
Kingdom of Scotland	Scotland region of the U.K.	Scot	Anglo-Saxon, Norman
Kingdom of Wales	Wales region of the U.K.	Welsh	Anglo-Saxon, Norman
Norman Ireland (part of Angevin empire)	70% of territory of Ireland	Irish	Norman Viking
Gaelic Ireland (Uí Néill in north, Munster in south)	30% of territory of Ireland	Irish	—
SCANDINAVIAN PENINSULA
Kingdom of Norway	Norway, 10% of Sweden, Iceland, Greenland	Norwegian Vikings	—
Kingdom of Sweden	Sweden, 50% of Finland	Swede Vikings	—
Finland	50% of Finland	Finn	Swede Viking
APENNINE PENINSULA
Kingdom of Italy (nominally part of Holy Roman Empire)	One-third territory of Italy in north	Latin, Ostrogoth, Lombards	Sephardim & Ashkenazim Jew
Duchy of Tuscany	A small region of Italy (1/15)	Latin, Ostrogoth, Lombards	Sephardim & Ashkenazim Jew
Patrimonium – Papal States	A small region of Italy (1/15) in central and north	Latin, Ostrogoth,	Sephardim & Ashkenazim Jew
Republic of Venice	A small region of Italy (1/20), a part of Slovenia (1/3)	Latin, Ostrogoth,	Sephardim & Ashkenazim Jew
Kingdom of Sicily	One-third territory of Italy in south	Latin, Ostrogoth,	Norman, Sephardim Jew
Lands of Count of Savoy	Corsica, Sardinia	Latin, Ostrogoth,	Sephardim Jew
MAINLAND EUROPE – WEST
Kingdom of France	One-fourth territory of France, Flanders region of Belgium,	Gaul, Briton, Frank, Flemish	Norman Vikings, Burgundians,
Angevin empire	50% of France in north and west	Norman Viking, Gaul, Frank,	—
Kingdom of Germany (nominally part of Holy Roman Empire)	Germany, 10% of Poland, Austria, Switzerland, 25% of France, 75% of Belgium, the Netherlands	Ostrogoth, Frank, Burgundians, Bavarians,	Saxon, Angles,
Duchy of Austria (nominally part of Holy Roman Empire)	Austria	Avar, Frank, Bavarians,	—
Kingdom of Denmark	Denmark, southernmost strip of land of Sweden	Danish Vikings	—
MAINLAND EUROPE – EAST
Kingdom of Poland	50% of Poland (except Teutonic kingdoms on Baltic coast, kingdom Lithuanian east of Vistula)	Poles	Khazarian
Duchy of Lithuania	Two-thirds of Lithuania	Lithuanian	Poles, Russians
Kingdom of Bohemia and Moravia (nominally part of Holy Roman Empire)	Czechia	Czechs	Slovaks
Kingdom of Hungary	Hungary, 20% of Serbia, Croatia Slovakia, One-fourth of Romania	Hun, Avar, Magyar, Cuman, Slovak, Croat,	Khazarian, Pecheneg, Saxon
Romanian region (west end of Cuman-Kipchak confederacy that had Aral Sea as east end)	Two-thirds of Romania	Wallachian, Cuman	Pecheneg
Kingdom of Serbia	Two-third of Serbia	Serb (south Slavic), Avers	Cuman
Kingdom of Bulgaria	Three-fourth of Bulgaria, Black Sea coast of Romania	Bulgars, Avar, Alan	Pecheneg, Cumans, Romanians
Byzantine Empire	Greece, 50% of Macedonia, 50% of Albania, Istanbul region of Turkey	Greek, Roman	Thracian, Khazarian Jews, Armenians, Bulgar, Slav, Goth

Note: The eastern borderlands of Europe populated by the East Slavs and other minor tribes/communities are not part of the scope of this research study, hence those have not been included in this table.

Recapitulating the final canvas of the geographical settlement of the major tribal communities who became the dominant socio-political force in their final settlement places in the west and east European landmass by 1200 CE, we arrive at the following four groups of communities:

• The Germanic tribes replacing/absorbing the Latin and Celtic tribes across west Europe
• The Viking tribes replacing/blending with the Germanic and the Celtic tribes across west Europe
• The Slavic tribes replacing/blending with the Celtic tribes across east Europe
• The Turkic tribes replacing/blending with the Slavic tribes across east Europe

A further scrutiny will lead to another conclusion related to the socio-cultural fabric that developed between 900 CE and 1200 CE:

• The Germanic and Viking (and Latin, Celtic) communities got converted into Catholic Christianity
• Some of the Slavic and Turkic communities got converted into Orthodox Christianity
• The West Slavic communities like Pole, Czech, Slovak communities chose Catholic Christianity
• The upper echelon of the Khazar Turkic community chose Judaic religion

The most enduring effect of invasion by the Mongol empire (the largest land empire in the recorded human history) in Europe during the first half of the 13th century was the socio-political reorganization of the east European lands (along with west Asia and central Asia):

1. In the vast steppes of east Europe and west Eurasia, the Cuman-Kipchak confederacy (with Alans as an ally) that was built from 1030 CE onward after driving out the Pecheneg tribes (who, earlier expelled the Khazars from the same landmass with the help of Kievan Rus), was completely destroyed by the Mongol warlords. The fearsome warrior Cumans escaped from the Mongol Golden Horde wrath and migrated into the then kingdoms of Hungary, Bulgaria, Serbia, and Byzantium; According to Russian scholars like A.P. Grigorev and O.B. Frolova, Mongol Golden Horde had zones (directly ruled by them) demarcated for administrative purposes – Khiva, Khazaria, Kipchak land, Crimea, Azov region, Circassian Caucasus, Alanian Caucasus, Volga Bulgar region, Walachia. Besides the directly controlled landmass, the Golden Horde also extracted taxes from the East Slavic / Russian principalities like Grand Duchy of Muscovy, Grand Duchy of Lithuania, Pskov, Novgorod, Principality of Smolensk etc. (who established a dependency relationship with the Mongol warlords).
2. The Rus Slavic principalities (spread between Ural and Dniester) who after initial onslaught of the Mongol forces was over, accepted suzerainty of the Mongol Golden Horde, built their own areas of influence, and finally coalesced into a kingdom where Orthodox Christianity became the state religion; Alexander Nevsky, a clan member of Rurikid dynasty formed the Grand Duchy of Muscovy, which started as a vassal state to the Golden Horde Mongol Empire, soon absorbed its parent Duchy of Vladimir-Suzdal, Duchy of Tver, Republic of Novgorod, Republic of Pskov, Ryazan, Novgorod-Seversky, and all small principalities by 1522 CE. The Golden Horde collaborated with rising Muscovy Rus till Muscovy Rus denied to pay tributes in 1480 CE. During the long period 500 to 1500 CE, the East Slavic Rus communities and their predecessors and contemporaries like Scythians, Varangians, Khazars, Pecheneg, Cumans, Kipchaks, Mongols merged into a new ‘Russia’ (Russ+Asia) identity – thus, ‘Kaganovich’ surname originated from Khazar ‘Kagan’, ‘Kumanov’ surname signifies a descendant of a Cuman aristocrat, ‘Chaadayev’ family title has been in use by the descendants of Mongol emperor Chagatai Khan. During the 16th, 17th, 18th century Muscovy Rus went on to build the Russian empire (ruling over the central Asian principalities of erstwhile Mongol empire) which hardly could be called as ‘European’, even if, for two centuries – 18th and 19th – the Russian emperors believed so.
3. After the Khazar khagans were subjected to repeated assaults by the Kievan/Novgorod Rus and Pecheneg warlords for thirty years after 960 CE, the Khazar Turkic tribes migrated westwards and during the next two centuries, majority of them settled in Polish kingdom, and few smaller groups settled in the lands of Russia and Holy Roman Empire (now Germany) maintaining their separate Judaic religious and social identity. “In 1264, Duke Bolesław the Pious of Greater Poland granted the privileges of the Statute of Kalisz, which specified a broad range of freedoms of religious practices, movement, and trading for the Jews. It also created a legal precedent for the official protection of Jews from local harassment and exclusion. The act exempted the Jews from enslavement or serfdom and was the foundation of future Jewish prosperity in the Polish kingdom; it was later followed by many other comparable legal pronouncements”. [Refer ‘Wikipedia’ 🡪https://en.wikipedia.org/wiki/History_of_Poland_during_the_Piast_dynasty#Reunification_attempts_and_the_reigns_of_Przemys%C5%82_II_and_V%C3%A1clav_II_(1232%E2%80%931305) ],.

Apart from the Mongol invasion, the east European and west Eurasian lands were rocked by an equally far-reaching historical event. In 1204 CE, the Byzantine Empire was invaded, defeated, and dismembered by the military forces of fourth Crusade (drawn from the west European kingdoms financed by the merchants and bankers of the Italian Peninsula). The results were:

1. Four principalities arose from the Byzantine empire – Nicaea (one-third of Turkey), Latin kingdom (Thessaloniki region of Greece, and Constantinople region of Byzantine Empire), Epirus (Macedonia, north and central Greece), Achaea (south Greece). Even though the Byzantine Empire was re-established after about 60 years piecing together some of the regions, the reconstructed empire was a pale shadow of its glorious past losing its wherewithal altogether.
2. Repeated attacks from the Turkic tribes (Seljuk Turks, Timur’s empire, Ottoman Turks) chipped away the territory of the Byzantine Empire for three centuries before its capital Constantinople was captured by the Ottoman Turk forces in 1453 CE.
3. The Ottoman Turk warlords penetrated deep into the east European lands of Orthodox and Catholic Christian kingdoms for another three centuries; in the absence of a well-organized political and military entity like the Byzantine Empire, east Europe was helpless against the formidable military machinery of the Ottoman Turks.

During the early medieval era, the declining Carolingian dynasty which flourished in west Europe between 750 to 890 CE gave rise to 4 – 5 branches each of which established splinter kingdoms across west Europe, each of which in turn fragmented into a number of principalities. As the decentralized power centres multiplied, a socio-political concept came into being in west Europe that has been termed as ‘Feudalism’. A rural estate with a fortified manor building in which the ‘noble’ family i.e., the owner of the estate would live and administer the estate, which would also include a large number of commoners who would toil on the land in the estate for growing agricultural produces and also to produce different kinds of artifacts and items necessary for war. These ‘serfs’ had two types of obligation: (i) to produce enough foodgrains and other food items to support themselves and the family of noble, (ii) to act as soldiers in the army raised by the noble and actively participate in armed conflicts when requisitioned. The ‘nobles’ had four types of duty: (i) to provide agricultural land and security to the people living within the estate, (ii) to provide troops and military gear to his ‘lord’ (who is a ‘vassal’ of king/queen), carry out fortifications, and participate in armed conflicts, (iii) to perform the court duties like rendering advice in council (iv) to pay special taxes i.e., levies due upon contingent events like royal marriages. Apart from the ‘noble’ and ‘serf’/’commoner’ the other class of peoples in the medieval feudalism was ‘clergy’ who led the religious matters and all peoples related to the Catholic Church. Thus, by 1000 CE the socio-political hierarchical architecture in west Europe comprised of three social classes: the ‘nobles’, the ‘clergy’, the ‘serfs’/ ’commoners’. In west Europe, the political and social dynamics during mid-12th century staged quite a few interesting events:

1. Consolidation of dynastic monarchies across west Europe – rulers sought to consolidate their authority and hold over political power and the exchequer. These monarchs (such as Henry II in England, Philip II in France, and Frederick I Barbarossa in the Holy Roman Empire) shaped the political landscape of the time. Some of the political framework developed during this period were – (i) bureaucratic systems for running administration and fiscal system, (ii) codification of law that would be used for governance, (iii) control over the feudal vassals, (iv) framework of diplomatic relations.
2. The Crusades – the west European military campaigns sanctioned by the Catholic Church had declared aim of recapturing the Holy Land (Palestine) from Muslim rulers, but in reality, it had religious, political, and economic motivations. Actually, the Crusades appear to be the first application of colonialism (by the west European powers). While the European monarchs sought to extend their influence and secure new territories, the merchants and businessmen of the Italian Peninsula wanted to expand their business empire and expand the footprint of their nascent mercantile capitalism around the Mediterranean region.
3. Urbanization – it was a key factor of economic growth, as towns and cities grew in size and began to flourish as centers of trade, commerce, and cultural exchange. This led to the emergence of a new social class, the bourgeoisie, comprised of bankers, merchants (existing since ancient times), and artisans, professionals (add-on during Middle Ages). This class was also called as ‘middle class (occupying middle layer between aristocracy as higher layer and peasantry as lowest layer). It played a crucial role in the economic development of society and challenged the traditional feudal order. ‘Bourgeoisie’ word was derived from French borgeis / Dutch burgher both meaning town dweller. However, the Marxist literature defines ‘bourgeoisie’ in a narrow way, as the owners of capital (i.e., the means of production) – essentially the bankers, merchants, industrialists, and owners of different businesses. Guilds and merchant associations were established across different trading towns and cities to protect the interests of various groups of artisans in urban centres, thereby developing organized professional communities. The growing influence of the urban centers led to conflicts with the traditional aristocracy of feudal order, as the bourgeoisie sought to secure their economic and political rights as well as to establish control over the political and governing institutions. The ongoing power struggle between the monarchy and aristocracy on one side and the Catholic Church on the other side now got extended into a three-dimensional tussle with the entry of the bourgeoisie class.

Starting from feudalism during the high medieval era, the history of Europe went through many noteworthy changes in the political, economic, and socio-cultural aspects of life. And, it can be stated further that during the entire second millennium CE, west Europe had unparallel transformational impact on the humankind which, till date has been far beyond the influence dispensed by any other region of this planet in the recorded history of humankind.

2.2. Society, Politics, & Economy in Select Countries of West Europe: 1200 CE to 1950 CE

The following sub-sections peep into the past of a few select geographical regions (that later on transformed into nation-states in the modern era) which became the milestones in the initial journey of capitalism and colonialism, and finally became a part of the foundation of the Capitalist World Order. A brief sketch of the following aspects of the history of those regions have been prepared in sub-sections 2.2.1, 2.2.2, 2.2.3, and 2.2.4:

1. Political setup and key historical events
2. Economic activities and significant developments
3. Scrutiny of select parameters to explore the extent of development of capitalist colonialist economy
4. Exploring how colonialism flourished along with capitalism

2.2.1. Society, Politics, & Economy in The ITALIAN PENINSULA: 1200 CE to 1950 CE

Politics: The political history of the Italian Peninsula during beginning of the first millennium is marked by significant political, economic, and socio-cultural transformations. The canvas is dotted with extraordinary events like the rise and fall of powerful city-states, conflict between the papal authority and monarchy, the birth of the Renaissance, the Napoleonic Wars, and the unification of Italy as a modern nation-state. The brief outline of the key events and developments is noted below:

• During the period from 12th to 15th century, the Italian Peninsula was fragmented into numerous kingdoms, principalities, and city-states each governed by its own ruling elite:

(a) In the north – a part of Holy Roman Empire, Marquisates of Montferrat and Saluzzo, Bishoprics of Trent and Bressanone, autonomous city-states of Venice, Milan, Genoa, Mantua, Parma, and Ferrara;

(b) In the central – papal states of Marches and Umbria, autonomous city-states of Florence, Perugia, Urbino, and Siena;

(c) In the south – House of Aragon regions of Sicily and Sardinia islands, kingdom of Naples, and papal states of Benevento.

During the 14th century conflicts like the Wars of Lombardy and the War of the Sicilian Vespers driven by territorial ambitions and power struggles, weakened the states in the Italian Peninsula. The Italic League, an agreement concluded in Venice in 1454 CE maintained balance of power between the Papal States, the Republic of Venice, the Duchy of Milan, the Republic of Florence, and the Kingdom of Naples, as a result of which peace was sustained. All the states thrived economically and culturally (except the two decades following the Black Plague that ravaged Europe from 1347 CE) fostering trade, sculpture and arts.

Renaissance – The elites and aristocrats in the Italian Peninsula yearned for revival of learning and rejuvenation of culture which would bring back the memories of Greko-Roman civilization based in the Apennine and Balkan Peninsulas. The period from 1250 CE to 1500 CE witnessed a renewed interest in classical knowledge, and the flourishing of intellectual and philosophical quests. The renewed interests in study of ancient Greek and Roman philosophy, art and literature led to a new beginning in Europe. Brilliant paintings and sculptures became the hallmark of extraordinary outburst of artistic talents. Scholars, and philosophers engaged in debates and attempted to reconcile reason and faith. Scholars like Leonardo da Vinci, Michelangelo, and Dante Alighieri contributed significantly. Renaissance proved to be one of the greatest milestones in the journey of humankind on this planet!

• In the high Middle Ages, the Catholic Church and clergy became an integral part of west European societies primarily to deal with the ‘spiritual’ matters. However, in reality, the Church became an institution that would firmly get involved in ‘temporal’ matters also. By receiving territorial fiefs from king/duke the Church became one of the largest land-owner in west Europe. The Church with Pope as the head of the institution, during the 1000 to 1400 CE period was involved in operating educational institutions, hospitals, as well as legal courts across west Europe. So, along with the dominance over the religious matters, the Church established itself as the dominant party in (social) governance. Little wonder then, that the Church wanted to also control the political matters in west Europe. This resulted in the Investiture Controversy (conflict between the Church and the state 11th century onwards, over the authority to choose and install bishops of monasteries and pope). The Church-state conflicts grew after the 13th century, with conflict between two factions – Guelphs (Italian supporters of papacy) and Ghibellines (German supporters of Holy Roman Emperor). In the Italian Peninsula, ‘papal states’ became a reality where land under the Church transformed into a state which was ruled by pope. However, with the Reformation movement during the 16th century, the Catholic Church lost most of its temporal authorities.
• During the 16th century, Italy’s political landscape again witnessed upheavals. The Italian Wars, a series of conflicts between 1494 and 1559 CE fought mainly in the Italian peninsula (later expanding into Flanders, and the Rhineland), were primarily fought between the kings of France and Habsburg dynasty (ruling the Holy Roman Empire and Spain). As ‘Wikipedia’ describes it, at the end of the wars, Italy was “divided between viceroyalties of the Spanish Habsburgs in the south and formal fiefs of the Austrian Habsburgs in the north”, and the Papacy remained the most significant Italian power in central Italy. As per the Treaty of Cateau-Cambrésis on 1559 CE, Corsica went to Genoa, France retained Calais and the Three Bishoprics of Toul, Verdun, and Metz, while Savoyard state in northern peninsula became an independent entity. In west Europe, the ‘Reformation’ movement among the Protestants as well as ‘Counter-Reformation’ movement among the Catholics contributed immensely to the conflicts and warfare during the 16th and 17th centuries.
• During the 17th and 18th centuries, the states in the Apennine Peninsula continued to be under foreign domination – the northern region was under the indirect rule of the Austrian Habsburgs (in their positions as Holy Roman Emperor), and the southern region was under the direct rule of the Spanish Habsburgs, in the central Italy few small but powerful papal states existed due to the influence of Catholic Church (during the Counter-Reformation, the Catholic reaction against the Protestant Reformation). Spain’s involvement in the Thirty Years’ War (1618–1648 CE) and the Eighty Years’ War (1568–1648 CE) was partly financed by its Italian possessions, and that thoroughly drained the economy of the Italian Peninsula.

Following the European wars of successions of the 1700s, the southern region of Italy passed to a cadet branch of the Spanish Bourbons and the northern region remained under control of the Austrian Habsburgs. Treaty of Utrecht and Rastatt (in 1713, 1714, 1715 CE) passed control of much of the northern and central peninsula (Milan, Naples and Sardinia) from Spain to Austria, while Sicily went to the Duchy of Savoy (and the north-western region of Piedmont). As a result of the Treaty of Hague in 1720 CE, the Duke of Savoy exchanged Sicily with Austria, for the island of Sardinia. In 1738 CE, however, the Spanish Empire regained Naples and Sicily following the Battle of Bitonto.

• Napoleon conquered most of the Italian Peninsula in the name of the French Revolution during the period 1797 to 1799 CE. He set up a few new republics abolishing old feudal privileges, introducing new codes of governance and law, and encouraging trade and commerce. After temporary setback, in 1805 CE Napoleon formed the Kingdom of Italy, converted the Netherlands into the Batavian Republic, and Switzerland into the Helvetic Republic. All these new countries were setup as satellites of the (Napoleonic) French Empire who would make large payments and provide military supports for Napoleonic wars. In 1809 CE Napoleon occupied Rome, and exiled the Pope (who excommunicated Napoleon earlier) first to Savona and then to France. Following the defeat of Napoleon, the Congress of Vienna (1815 CE) redrew the political map of the European continent. In the Italian Peninsula, the Congress restored the pre-Napoleonic patchwork of multiple independent states, directly and indirectly ruled by the prevailing European powers.

After 1820 CE, inspired by the ‘nationalist’ ideas and the desire for independence, various Italian intellectuals and political figures called for the unification of the Italian Peninsula into a single nation-state. Giuseppe Garibaldi, Count Camillo di Cavour, and Giuseppe Mazzini were the key figures in this political movement. Through a series of military campaigns and political negotiations, Italy finally achieved its unification in 1870 CE. King Victor Emmanuel II of Sardinia-Piedmont became the king of Italy, and the capital was established in Rome in 1871 CE.

• During the 20th century, Italy experienced significant political changes, including power grab by the Fascist party and participation in both World War I and World War II. Benito Mussolini, the leader of the National Fascist Party, rose to power in 1922, aligned with Nazi Germany during World War II, which devastated Italy and its colonial holdings in northern region of Africa. Italy became a republic through a referendum in 1946 CE, and in 1948 CE a new constitution was adopted. Italy became one of the founding members of the European Coal and Steel Community (the precursor to the EU) which came into force in July 1952 CE, and in 1949 CE Italy became a member of NATO. Due to an economic boom after World War II, Italy became one of the world’s leading industrial nations.

Economy: Economy, and its components – agriculture, industry, trade, and commerce – in the Italian Peninsula underwent momentous changes as the society moved from 1200 CE to 2010 CE.

• The economy of the Italian Peninsula during the 12th to mid-14th century period (before the Black Death) was primarily agrarian, with a feudal system dominating the rural areas with large estates owned by the nobility and worked by peasants. Crops such as wheat, barley, olives, and grapes were cultivated, and techniques like crop rotation and irrigation were practiced. The economy expanded as the merchant class gained prominence, and the Italian city-states became major centers of trade, banking, and manufacturing.

The emergence of the powerful city-states, and the banking families in Venice, Florence, Naples, and Genoa, stimulated trade and commerce and played a crucial role in financing business ventures and facilitating international trade. They controlled maritime trade routes, facilitating the exchange of goods between Europe, North Africa, the Middle East, and Asia. The merchants engaged in long-distance trade, importing luxury goods like spices, silk, and precious metals. ‘The Cambridge History of Capitalism’ (volume I) mentioned, “At first Sicily and Amalfi were the main foci of trading connections; Genoa and Pisa were the protagonists of the next phase. In the early twelfth century the merchants of the two northern cities pushed their interests towards the eastern Mediterranean and a harsh struggle broke out between them, which was eventually won by Genoa. By this time Venice had expanded its influence over the Adriatic Sea, having by the eighth century already established commercial relations with the eastern Mediterranean. […] While in the Middle Ages the merchants of Venice and Genoa were inextricably linked to overseas trade, the Florentines looked instead to land trade, textile manufacturing, and finance”. Several powerful commercial and banking families emerged in the city-states of the Italian Peninsula who played a crucial role in shaping the economic and political landscapes of their respective cities. As a result, mercantile capitalism appeared on the horizon with its full vigour.

• After the Ottoman Empire occupied Constantinople thereby abolishing the Byzantine empire, the old trade routes from Europe to the East i.e., Asian countries were disconnected. Starting from the end of 15th century through the 16th century, Italian explorers like Christopher Columbus, and Amerigo Vespucci left an indelible mark in the exploration of the so-called “New World” (primarily North America and South America continents, Africa being the other). Generally, the Italian merchants traded goods like textiles, weapons, and other manufactured products in exchange for agricultural commodities, including sugar, tobacco, and cocoa. But, during this period it facilitated the Spanish colonization and empire building in the American continents.

Between the 16th and 17th centuries, the economic centre of gravity shifted from the Mediterranean Sea to the North Sea. The Italian Peninsula went down a long path of decline, though it was not a dramatic one. ‘The Cambridge History of Capitalism’ (volume I) observed that, “The Venetian network shrank and was replaced by Greek and Jewish operators; Florentines reduced their role in western Europe and maintained significant positions in eastern Europe; the Genoese saw a relevant reduction of their control radius as well.”

• The Italian Peninsula faced a period of foreign domination and political fragmentation during this period 17th to 19th centuries CE, with various European powers controlling different parts of the peninsula. Economic activity continued, but it suffered due to the instability and conflicts resulting from foreign invasions. Agriculture and small-scale industry remained the backbone of economy. However, the peninsular bankers and merchants were very much active in the Iberian Peninsula and the Low Countries to promote colonialist and capitalist ventures.
• Italy’s unification completed in 1870 CE marked a turning point in its economic history. The country embraced rapid industrialization, with the northern regions leading the way. Manufacturing and mechanized industries, such as textiles, steel, and machinery thrived, and infrastructure development, like railways, facilitated the domestic and international trade.

The process of industrialization during 19th century brought about changes in the agricultural sector. The advances in machinery and technology improved productivity and efficiency. The large landowners consolidated smaller farms, leading to the concentration of land ownership. Commercial agriculture and specialized production, such as wine, citrus fruits, and olive oil, became prominent. The industrial revolution in Italy transformed its trade patterns. The country became a leading exporter of textiles, machinery, and luxury goods, such as fashion and furniture. Italian emigrants like merchants and bankers played a crucial role in establishing commercial networks around the world, contributing to global trade.

• Post-World War II (20th century): After World War II, Italy experienced an economic boom, also known as the “Italian Economic Miracle.” The country rapidly industrialized, with sectors like automobile manufacturing, fashion, and design gaining international recognition. In the late 20th century, Italy faced economic challenges, including inflation, high public debt, and political instability. However, sectors such as finance, tourism, fashion, and luxury goods continued to contribute significantly to the economy. The Italian economy integrated into the European Union and adopted the euro as its currency, further facilitating trade.

Economy & Politics in Italian Peninsula between 1200 CE and 1500 CE

It is often said that the Italian Peninsula was on the verge of ‘industrial capitalism’ during the beginning of the 1^st millennium CE. Finally, it didn’t turn out to be ‘the cradle of industrial capitalism’, however, for agrarian capitalism and mercantile capitalism, it was certainly the place of origin.

Tab: 2.2

Economic System & Banking
Evolution of Agrarian capitalism	Aymard observed that by the mid-fifteenth century, the remains of serfdom had disappeared throughout the Italian Peninsula. A stage had been reached in which people could sell their labour freely. Indeed, the expropriation of the peasantry through enclosures – considered as a hallmark of capitalism in the 16th century England – had already begun in Italy in the 13th and 14th centuries. In the wide plains of the Po valley – the most productive land in the Italian Peninsula – capitalist farming became prevalent. Throughout the rest of the peninsula, but especially in the centre, share-cropping was the most widespread form of tenure. The Cambridge History of Capitalism (volume I) commented, “Regarding the control of lords over peasants, northern and central Italy saw an early decline with respect to the rest of Europe. Both peasant and urban communities drastically reduced the power of the lords and their customary rights. This contributed to the separation of land rights from rights over men. Both in Tuscany and the Veneto, feudal institutions were not important and seigniorial rights were quite limited. The presence of fiefs and lordships was significant in Liguria, however. The principal clans of the Genoese aristocracy enjoyed seigniorial rights in the countryside. Lords, however, did not hold full rights over their vassals and – it seems – were unable to prevent them from selling their goods. Apart from some areas – for example in the Sienese countryside – there were no manorial encumbrances on the land. In much of the Italian countryside, nonetheless, the cities imposed their own legislative systems that tended to favour urban property over that of the countryside. In this context, customary rights that rural communities enjoyed over farmland, grazing land, and forests were progressively eroded, at the expense of both citizen property holders and rural elites.” In ‘Rational Capitalism in Renaissance Italy’ published in American Journal of Sociology, May 1980, Volume 85, No. 6, pp. 1340-1355, Jere Cohen mentioned, “the serfs had been freed in Italy before the Renaissance; land was generally divided into smaller estates and was often owned as a business investment by the nobility, the communes, or the capitalists themselves.”
Evolution of Mercantile capitalism	The Italian city-states tended to specialize in particular sectors, such as Florence with textiles, Venice with shipbuilding, or Milan with metalworking. By 1200 CE, tanners, carpenters, bakers, weavers, metal-workers and almost every other type of craftspeople organized their business around trade-specific associations called as guilds. These guilds tightly regulated production and hence, competition, aiming to protect their members’ interests. The guild system tended to promote small-scale, artisanal production that could be controlled by a small team rather than large-scale industrial production. Jere Cohen noted in ‘Rational Capitalism in Renaissance Italy’, “Guilds, which attempted to set prices, control output, maintain the manufacture of traditional products, and restrict entry into trades, were often very powerful, but were sometimes weak, notably in international trade and banking. This led to the infringement of their rules and privileges and enhanced the influence of market forces. […] Business firms… Branches were commonplace, and bureaucratic chains of command included senior partners, a general manager, branch managers, assistant managers, purchasing agents and bookkeepers, shop foremen, and laborers and garzone.” By 1100 CE, Flanders and Italy were exchanging goods regularly. To encourage this trade, the counts of Champagne in northern France began holding trade fairs. The north European merchants exchanged furs, tin, honey, wool for cloth and swords from northern Italy and silks, sugar, and spices from Asia. To quote Jere Cohen again, “Florence, Pisa, Rome, Genoa, Venice, Siena, Prato, Lucca, and other cities became important trading towns with hundreds of mercantile companies; there were numerous banking firms (over 80 in Florence alone); and while the giant industrial bureaucracies of the 19th century were non-existent, Cox (1959) reports hundreds of manufacturing and processing establishments, employing some 30,000 workers, in the woollen industry alone.” ‘The Cambridge History of Capitalism’ (volume I) commented on the pan-European presence of Italian merchants and bankers as, “We find before us a complex network of family, institutional, and economic ties which were at the base of a gigantic trust composed of thousands of people. Several hundred merchants and firms were scattered across Europe forming the Italian diaspora. This system stretched beyond city walls across a vast area that comprised the Mediterranean, the Black Sea, and the North Sea. The competitive advantages of Italian merchants, that is their capacity to create money of account and transfer it wherever necessary, in addition to their ability to make use of sophisticated credit mechanisms, positioned them within an informal network dominated by family ties and friendships. This undoubtedly facilitated the circulation of both goods and credit, as well as the transmission of economic information. It is worth asking if in this context real market competition could exist. The large commercial and financial markets seem rather to have been characterized by oligopolistic groups that, even when in competition against each other, did not reject cooperation at all, as happened between Genoese bankers in Madrid or between Tuscan and Venetian merchants.” Commenting on the financing of long-distance trade, ‘The Cambridge History of Capitalism’ (volume I) noted that, “The bill of exchange developed in the thirteenth and fourteenth centuries and it is essentially a promise of payment to a payee and his principal at some future date. It was of great use in long-distance trade and exploited the fact that trading partners in different locations could offset debts and credits. By clearing debt and credit bills locally merchants and bankers could minimize the use of specie, which greatly reduced the risk of theft, apart from the cost of transporting heavy bullion between long-distance markets. Although initially developed by Mediterranean merchants the Italian merchant bankers were instrumental in introducing them to northwestern Europe.”
Presence of the ‘capitalist’ institutions; presence of practices of the ‘capitalist’ system	The Italian merchants and bankers revolutionized the use of financial techniques between 1200 and 1500 CE. These include business partnerships, holding company, double-entry book-keeping, international giro payments and bill of exchange. In Northern Italy the first bonds were traded, the first private and public banks were set up and the predecessors of the modern company were established. The oldest surviving bank in the world, Monte dei Paschi di Siena which dates from 1472 CE, emerged during this era. The cities of Genoa, Florence and Venice together became the birthplace of modern finance. In support of this view, I quote extensively from ‘Rational Capitalism in Renaissance Italy’ published in American Journal of Sociology, May 1980, Vol. 85, No. 6, written by Jere Cohen: “Although partners added personal cash to the firm to cover debts in crises, and owners’ personal liability was usually unlimited, some forms of partnership did limit liability, notably the acomandz. Conversely, owners’ claims to company assets and profits were determined in advance in the articles of association. Profits and losses were divided according to the number of shares held in the company. While 15th-century partnerships were not joint stock companies they closely resembled them. Joint stock companies, which became a regular feature in 16th- and 17th-century Italy had their roots in 14th- and 15th-century Genoa, where negotiable shares of stock were easily transferable and could be used for collateral or sold. […] “Supervisors and officials in Renaissance firms were chosen carefully: although family and connections played a part (as is still true today in some cases), selection, advancement, and salary generally depended on merit, namely, ability, honesty, and efficient performance. Managers and accountants were trained officials, trained either by schooling or within the firm. […] Italian boys were taught to compute interest and discounts. Officials were trained in correspondence, bookkeeping, and, where there were foreign branches, in a foreign language. […] “The Italians invented bookkeeping, double-entry, commercial law, and marine insurance, were the only ones to use them up to 1500, and maintained their superiority well into the 16th century. Historians agree that other countries, including Calvinist Holland and England as well as Catholic Portugal and Spain, obtained these techniques only insofar as they learned and copied Italian methods. The Fuggers and the Welsers brought capitalist patterns to Germany from Venice, where they were educated. German merchants customarily visited Italy to learn bookkeeping and commercial accounting. The spread of double-entry throughout Europe, which depended on the spread of printing, was aided by Italian textbooks. The Italian writer Pacioli influenced German, Dutch, and English writers on this subject; […] “Italian notaries of the Renaissance era developed and codified commercial or mercantile law, and its rules still form the basis of commercial law today. Notaries drafted deeds and contracts according to legal formulas based on traditions rooted in Roman law. These contracts were legally safeguarded and enforced impartially by local courts, including specialized commercial courts in some cities. Even in their dealings abroad Italian businessmen obtained guarantees of legal rights, impartial judgments, and sometimes even the use of Italian merchant law. (Shakespeare’s ‘Merchant of Venice’ climaxed around a ‘contract’ while depicting a detailed socio-economic profile of Venice – author). “Woolen producers tried to determine the costs of production, including overhead and indirect costs, of each piece of cloth as accurately as possible. The famous merchant Datini test-marketed armour in Spain to see whether profits justified further shipments, Florentine wool producers computed the probabilities of profit and loss, and the pre-estimation of risks was common in moneylending and shipping. Risks were reduced through forming partnerships, branching out to spread the risk, dividing a cargo onto several ships, and buying insurance. “In Datini’s firm, which was not atypical, there were separate books for material costs, petty cash, loans, and salaries, and the firm’s main account book summarized the costs of each separate process and each piece of cloth. […] Benedetto Cotrugli recommended an annual trial balance in Naples in 1458. Trial balances were fully known and in general use at the end of the 15th century; sometimes, especially in Florence and Genoa, they were struck annually, near-annually, or at other regular intervals, although sometimes, especially in Venice, books were balanced infrequently and irregularly … many firms did balance their books to determine profits, losses, assets, and liabilities.” In 1408 CE, the Banco of San Giorgio was set up in Genoa as a banking unit of the Casa – in all probability this was the world’s first public bank that accepted deposits, made money transfers between accounts, and lent money to its account holders. The Banco di San Giorgio was the inspiration for the Venetian Banco di Rialto (1587 CE), which in turn was the example for the Exchange Bank of Amsterdam (1609 CE). Commenting on how the fractional reserve banking system came into existence in the Italian Peninsula, ‘The Cambridge History of Capitalism’ (volume I) noted, “Given the diversity of currencies moneychangers were essential participants in the trading network. They gradually developed banking services when accepting deposits and developing a type of fractional reserve banking as well as services such as transfers between accounts. Thereby payments, both local and international, were made through simple bookkeeping transfers between demand accounts. The primitive forms of fractional reserve banking that developed were predictably associated with occasional failures that alerted the city authorities, who tried and sometimes succeeded in banning the practice for shorter or longer periods”. The Liber Abaci, the Book of Calculations, was published in 1202 CE by Leonardo of Pisa, popularly known as Fibonacci (Fibonacci Sequence for number). He provided calculation techniques for present value, profit sharing, interest rate, and fractions and introduced the Hindu-Arabic numerical of 0 – 9.
The labour market	The movement of surplus labour from rural agricultural economy to urban economy driven by guilds and unorganised service sectors has been a phenomenon since the medieval era. The Italian Peninsula was no exception. Even if feudal economic forces constrained labour in the rural region before the Black Death, skilled labour made their way to the great urban centres of the peninsula. In ‘Rational Capitalism in Renaissance Italy, Jere Cohen wrote, “The labour market was somewhat freer, despite hiring on the basis of kinship, the importance of independent craftsmen working under guild regulations, and restrictions against foreign workers. Hired wage laborers were commonplace: examples include Florentine industrial woolworkers, Venetian ship crews, and caulkers and smiths, whose guilds were weak. In Florence emancipated serfs formed a formally free labour proletariat, and outside workers were hired to evade fixed guild wages. Workers migrated from town to town when dissatisfied, depending on employment opportunities. It was common for some workers, spinners and weavers, for example, to be chosen on merit. Good workers were often enticed away from competitors to increase profits; for example, skilled brocade weavers, who were in demand, received good wages as an inducement to shift employment.” The Black Death reduced the population drastically, effects of which were felt by both rural and urban centres: the feudal structure was precipitously diminished, and the rising fortunes of mercantile capitalism were grounded.
‘Money lending’, banking and ‘tax farming’ as profession	Historically, the Christian and Muslim communities were prohibited from lending money at interest by their respective religious scriptures (it would mean taking advantage of the poor, and desperate peoples). The Jewish communities filled in the gap (because their scriptures only prohibit usuary with a fellow Jew) until Protestant reformism cancelled the prohibition on usuary during the 16th century CE. In ‘A Concise Financial History of Europe’ published by Robeco (2018) Jan Sytze Mosselaar wrote about the Italian usuary business, “Two groups of financiers openly charged interest for loaning money, and were socially excluded from society for their usurious activities. The first were the Jews, who could charge interest rates to Christians as they were not regarded as their ‘brothers’. The second group were the pawnbrokers, nicknamed the Lombards, as most of them originally came from the Northern Italian region of Lombardy.” By the 11th century, Jewish moneylending was extensive, and a very important branch of economic activities of the Jewish community. The Christian borrowers, sometimes even the Church would approach the Jew bankers for loans. Nine Cistercian monasteries in England and St. Alban’s Abbey were financed by Aaron of Lincoln. Someone commented ‘The Church regarded Jewish usurers as a morally regrettable by-product of the ban on Christian usury, cities found them a necessary economic corollary, and the more economically advanced countries disregarded the ban (like, Italy)’. Some of the larger merchants who had become merchant bankers, were mostly involved in exchanging money, making them the predecessors of modern foreign exchange (forex) dealers. For this reason, the guild of bankers in Florence was called Arte del Cambio (guild of moneychangers). The huge archive of one of these early bankers, Francesco Datini, has survived until today. Datini, a distinguished merchant in Florence who lived from 1335 to 1410 CE, left us some 150,000 letters, 500 account books and 300 notary letters. His documents give an excellent insight into the early days of modern finance, the use of bills of exchange, the forex contracts. There were no issues regarding availability of ‘credit’ in the medieval Italian peninsula – a free-charge loan to a usurious loan, from a short-term loan to a loan redeemable at borrower’s discretion – traders and borrowers enjoyed wide ranging options.
Public debt	If city administration council, kings, and emperors wanted to expand infrastructure, or finance a war, which couldn’t be met through regular taxation, they’d either turn to the private bankers and merchants or issue bond (public debt) to arrange the required funds. The earliest form of public debt in Europe was launched in Genoa in 1149 CE and in Venice in 1164 CE. The loans were called compere that were paid off with tax revenues. In 1214 CE, this public debt in Genoa was divided into shares of 100 lire (luoghi in Latin) – these standardized luoghi was the predecessor of government bond in modern era. Two centuries later in 1407, Genoa set up the Casa di San Giorgio in order to consolidate the city’s total debt – all existing comperes were converted into San Giorgio bonds, yielding 7%, and which were transferable. Such consolidation of government debt into a share-issuing institution was the precursor to establishment of the Bank of England in 1694 CE.
Presence of ‘capitalist’ class with concentration of wealth as capital (money and property); Non-Jewish family-owned business houses	During the medieval era in the Italian Peninsula, several powerful commercial and banking families emerged in the city-states who played a crucial role in shaping the economic and political policies of their cities. A few of them were: 1. The Medici family, particularly Cosimo de’ Medici and his descendants, became one of the most influential and wealthy families in Florence. They were renowned bankers, patrons of the arts, and political leaders. The Medici Bank (pope’s banker) was one of the largest and most respected financial institutions in Europe. It is important to note that the modern form of fractional reserve banking, as we understand it today, emerged during the Renaissance in Europe. In the 15th-century Florence the Medici banks operated on a fractional reserve basis, accepting deposits and issuing loans while maintaining a reserve of a fraction of the deposited funds. 2. The Bardi and Peruzzi families were prominent Florentine banking houses. They enjoyed immense success and accumulated vast wealth through their banking operations, particularly in international trade and financing. A brief description of the Peruzzi family business has been provided as Annexure 1 3. Although not strictly Italian, the Fugger family from Augsburg, Germany, had significant influence in Italian city-states during the Renaissance. They were renowned bankers and merchants, engaging in extensive trade and money lending. The Fugger family maintained close ties with the Medici family and financed several notable figures, including Emperor Charles V. 4. The Pazzi family was another influential banking family in Florence. They competed with the Medici family for power and influence but were ultimately defeated in the infamous Pazzi Conspiracy, an assassination plot against the Medici. 5. The Sforza family rose to prominence in Milan, initially as condottieri (mercenary leaders) and later as rulers. They were successful in consolidating power, and their wealth and influence extended beyond banking into military and political spheres. 6. The Doria family, originating from Genoa, was a powerful merchant family that played a crucial role in the maritime trade and politics of the Mediterranean. They had a strong naval fleet and held significant influence over the Republic of Genoa. 7. The Este family ruled the Duchy of Ferrara and were influential patrons of the arts. While not primarily known for banking activities, their wealth and political power contributed to their prominence.
Presence of influential Jewish families – Sephardim, Ashkenazim – who migrated from west Asia, north Africa, east Europe	The Italian Peninsula have been a place where Jews (Mizrahim and Sephardim) lived since the first millennium BCE. The Jewish communities were persecuted in the Roman Empire and its splinter kingdoms/principalities – degree of persecution varied from very lenient up to expulsion. ‘Wikipedia’ [Link 🡪 https://en.wikipedia.org/wiki/History_of_the_Jews_in_Italy ] noted on Jewish presence in the peninsula during the middle era, “The great centres, such as Venice, Florence, Genoa, and Pisa, realized that their commercial interests were of more importance than the affairs of the spiritual leaders of the Church; and accordingly the Jews, many of whom were bankers and leading merchants, found their condition better than ever before. It thus became easy for Jewish bankers to obtain permission to establish banks and to engage in monetary transactions. Indeed, in one instance even the Bishop of Mantua, in the name of the pope, accorded permission to the Jews to lend money at interest. All the banking negotiations of Tuscany were in the hands of a Jew, Jehiel of Pisa.” Some of the well-known Jewish families during the period 1200 to 1500 CE in the peninsula were: 1. The Kalonymos family was a prominent Jewish family known for their involvement in Jewish scholarship and diplomacy. They were influential in several Italian cities, including Rome, Naples, and Amalfi. Members of the family held positions of importance and were often appointed as court physicians and advisors to rulers. 2. The Abravanel family was a renowned Sephardic Jewish family that originated in Spain and later settled in Italy. They were prominent financiers and patrons of the arts. One of the most notable members of the family was Don Isaac Abravanel, a philosopher, statesman, and financier who served as a trusted advisor to various European rulers. 3. The Sarfati family was a distinguished Sephardic Jewish family primarily based in Genoa. They were involved in international trade and finance and played a crucial role in establishing commercial ties between Italy and other Mediterranean regions. Members of the Sarfati family were highly respected and held positions of influence in both Jewish and general society. 4. The Pardo family was a prominent Jewish family that originated in Venice. They were involved in various economic activities, including banking, trade, and money lending. The family had significant connections throughout Europe and the Mediterranean and played a significant role in Venice. 5. The Luzzatto family, originally from Germany, settled in Italy during the 14th century. They were a respected Jewish family known for their scholarship, poetry, and intellectual contributions. Members of the Luzzatto family held important positions in Jewish communal organizations and were influential in the cultural and religious life of Italian Jewry.
Political System, Society & State
State apparatus with sizeable population and territory under its jurisdiction; ruling by oligarchy	During the medieval era, the Italian Peninsula was divided into dozens of sovereign and quasi-sovereign entities like city-state, principality, bishopric, kingdom, papal state, and empire. The city-state like Venice, Genoa, Florence, Milan, and principality like Tuscany, Savoy, and kingdom like Naples had effective administration and strong military. These independent entities vied for power and commercial influence. The absence of a unified central authority made it difficult to establish a uniform policy for governance and economy or to create a conducive environment for large scale industrial capitalism to flourish. However, political and military power was under firm control of the ruling oligarchy (consisting of aristocratic ‘nobles’, wealthy merchants, and bankers). ‘The Cambridge History of Capitalism’ (volume I) described the political architecture in Venice as, “Beginning in the 14th century, the republic of Venice was run by an oligarchy of patricians. This was composed of families with the right to participate in the Great Council, the large assembly that elected the offices of the government. The Great Council also selected the doge, the highest representative of the state sovereignty, who held the office until his death. But the most important government organ was the senate, comprising about two hundred patricians, whose population changed over time. It was the senate that decided major issues concerning foreign policy, trade, finance, and so on. Below the patricians there were the so-called citizens (cittadini), namely individuals who were Venetians either by birth or who had been granted citizenship, who exercised liberal professions, and provided personnel for the bureaucracy. It is important to stress that only the patricians and the citizens had the right to trade overseas; they furthermore enjoyed commercial advantages and privileges in custom duties… Immigrants residing for twenty-five years in Venice could obtain the citizenship (de intus et de extra) by privilege and enjoy the same advantages reserved to nobles and citizens by birth. The commoners (craftsmen, workers, petty traders, and the like) represented the rest of the population.” In ‘Rational Capitalism in Renaissance Italy, Jere Cohen mentioned, “An early 12th-century period of free enterprise gave way to increasing government regulations and restrictions, which included licensing, government ownership, price determination, special trading privileges, restrictions on foreigners, and tariffs. Some cities, for example, Bruges and Venice, were exceptional in permitting free trade and had laws for the negotiation of free trading rights.”
Judicial system	Due to multiple sovereign and quasi-sovereign entities, the judicial system differed from entity to entity, and within an entity from place to place. ‘The Cambridge History of Capitalism’ (volume I) noted on the complexity of the judicial process in the Italian Peninsula, “The institutions that certified property rights were manifold, because the actors were considered according to their origins and their social status. Men, women, citizens, artisans, nobles, clergy, foreigners, subjects of feudal or ecclesiastical lords, Jews, all had at their disposal specific courts. This legal pluralism consisted of coexisting bodies of law, sometimes conflicting, sometimes complementary. There were state, municipal, and guild courts, feudal and ecclesiastical jurisdictions, customary and merchant laws, each with their own judges. In a framework of deep uncertainty about rights, it was common to turn to the tribunals, to better define the terms of transaction and those same property rights. Nonetheless, it was in this context that some Genoese merchants, in contrast to their Florentine colleagues, preferred to avoid the courts because the judicial system could be inefficient and inadequate to their needs. Main objective was the safeguard of their merchants’ rights, which were regarded as the true pillar of the republic. It is noteworthy that Venetian law forbade tax assessors to use bankers’ records to find out the wealth of taxpayers. The bankruptcy law was severe, and dishonest bankers, even if they belonged to the ruling group, were rigorously prosecuted. Likewise, the Florentine justice system worked quite well.”
Society, culture and religion	Rome being the seat of Pope, Catholic Christian religion continued to be a central pillar of Italian society during this period. The Catholic Church held immense power and influence, both spiritually and politically. The Papal States, ruled by the Pope, played a significant role in the political affairs of the Italian Peninsula. The Church’s authority was also evident through its patronage of art and architecture. The construction of cathedrals, churches, and the religious artworks flourished as the religious institutions and the religious leaders sought to showcase their spiritual prowess. Religious reform movements, such as the Franciscans and Dominicans emphasized piety, poverty, and service to the common people of the society. One of the most remarkable aspects of the Italian Peninsula between 1200 and 1500 CE was the Renaissance. Italian city-states became hubs of innovative ideas in classical art, sculpture, literature, and philosophy fostering the growth of talents like Leonardo da Vinci, Michelangelo, and Raphael. Humanism, a philosophical and intellectual movement that emphasized the study of classical texts, also gained prominence during this time. The revival of ancient Greek and Roman ideas profoundly influenced education, scholarship, and cultural production, ultimately shaping the modern world. The medieval class structure, however, endured with a hierarchical division between nobility, clergy, and commoners. Peasant communities continued to live in rural areas, heavily reliant on agrarian practices. Urban centres, on the other hand, were characterized by a burgeoning middle class engaged in trade and craftsmanship. These social hierarchies constrained the opportunities available to individuals from lower socioeconomic strata.

What were the political and economic circumstances in Italian Peninsula during 1200 to 1500 CE that were unfavourable for industrial capitalism (if compared with mid-18th century England)?

1) The Italian Peninsula was fragmented in a number of entities which resulted in (i) lack of a single centralized governing authority whose writ would run across the entire territory, (ii) lack of a uniform economic policy that would create a single market (for produces and labour) across the territory, (iii) lack of a uniform legal framework that would ensure ownership of means of production across the peninsula and beyond across generations irrespective of the owners’ religion, ethnicity, and language. As a result of such fragmentation, the Italian Peninsula was at a disadvantage within Europe due to the reduction of the size of the internal market and due to substantial loss of resources in conflicts over the control of external trading network. None of the Italian kingdoms, principalities, papal states reaped the full benefits of economic growth in the other parts of the peninsula;

2) As per ‘Wikipedia’, “The arrival of the Black Death to Sicily has been described by the chronicler Michele da Piazza. In October 1347, 12 Genoese ships from the East arrived to Messina on Sicily. […] According to Agnolo di Tura, the Black Death migrated from Genova to Pisa in January 1348 and spread from Pisa to the rest of Central Italy: to Piombino, Lucca in February, to Florence in March and Siena, Perugia and Orvieto in April and May 1348. Agnolo di Tura described how people abandoned their loved ones whose bodies were thrown down holes all over the city of Siena, but how no one cried because everyone thought that they would soon die as well. […] In March 1348, the plague reached Florence, where it lasted until July.” Black plague devastated the Italian Peninsula in all aspects – social, economic, and political. In an article ‘Pandemics, Places, and Populations: Evidence from the Black Death’ published in 27th Nov’2019, Remi Jedwab, Noel D. Johnson, and Mark Koyama stated, “Some regions and cities were spared, others were severely hit: England, France, Italy and Spain lost as much as 50-60% of their population in just one or two years.”

In the opinion of this author, Bubonic Plage in Europe during 1347 to 1352 CE had an adverse impact which was too radical to be ignored (surpassing all other incidents and factors)! Black Death precipitated the decline of feudalism in Europe. With population down by average 40% there were simply no working-age people who would look for work and employment.

3) In the absence of a unified state, a central bank didn’t get developed in the Italian Peninsula. As a result, there was no coordination between monetary and taxation policies across multiple state authorities. Neither the ‘multiplier effect’ of the fractional reserve banking system could be put to use by the central bank and the state authorities for providing credit to the merchants, traders, and guilds. With the Catholic Church acting as moral guardian, the practice of money creation from thin air by the central bank and earning interest from that, couldn’t become an acceptable economic practice.

4) The socio-economic and socio-political environments were not fully conducive to application of the scientific knowledge in day-to-day life. Thus, world’s greatest polymath, Leonardo da Vinci (April 1452 – May 1519) conceptualized technologically complex machines like a flying machine, an armored fighting vehicle, concentrated solar power, as well as small machines like an automated bobbin winder, tensile strength tester etc. However, such concepts were never developed or tested. Unless scientific knowledge could be utilized for practical purpose, economy couldn’t gain from such knowledge.

5) The Italian city states were involved in colonial expansion of territory and commerce in the Mediterranean region (city-states undertook such initiatives themselves; but a far more interesting attempt of indirect colonization could be noted as the merchants and bankers of the peninsula funded the crusades), but those were not very consequential in terms of scale, hence its merchants and bankers (i) lacked opportunities of profit accumulation driven by slave-operated plantations and mines, (ii) lacked foreign lands from where raw materials could be sourced and finished goods could be marketed (both of which were part of colonial empires built by the well-known countries of west Europe);

6) The merchants and bankers in Italian peninsula were divided into different communities on religious lines – Catholic Christian (mixture of Latin, Ostrogoth, Lombard, and other Germanic communities) and Jew (Mizrahim, Sephardim) – as well as different professional lines – different guilds built on the basis of industrial sectors – long before other European societies experienced that. However, few significant characteristics were (i) out of many wealthy merchant-banker families, no single group of ‘oligarchy and aristocracy‘ coalesced to present a powerful and resourceful lobby, (i) the Christian and Jew wealthy families didn’t establish marital relationship that would merge their economic and political interests, (iii) the Christian and Jew wealthy families couldn’t become the undisputed top layer of the social hierarchy which was also dominated by the Italian renaissance elites (artists, scholars, patrons) with multifaceted personalities, (iv) the wealthy merchant and bankers were not pursuing business with single-minded devotion, they had to also (partially) fund the humongous initiatives of architecture, sculpture, and art – Italian renaissance – that continue to bewilder the world even now!

7) The Italian Peninsula had relatively limited natural resources. The scarcity of resources, such as metals, minerals, coal, and other energy made the overall economic environment somewhat immune to large-scale industrialization. However, manufacturing of glass for which the required raw materials could be easily sourced, was abundantly practiced.

As a result of the above-mentioned factors, even though the Italian city states and kingdoms had a strong economy based on mercantile capitalism and agrarian capitalism (that co-existed with the feudalist mode of production in agriculture), a conducive environment for further transformation into slave capitalism (as practiced during the 16th to 19th century west Europe) or industrial capitalism (as blossomed during the 18th century onward in west Europe) was absent.

2.2.2. Society, Politics, & Economy in The IBERIAN PENINSULA/SPAIN: 1200 CE to 1950 CE

Politics: The political history of the Iberian Peninsula from 1200 to 1950 CE is a rich tapestry of events that transformed the political, and socio-cultural canvas of west Europe significantly. This period witnessed the rise and fall of kingdoms, the Reconquista, the Age of Exploration, the Spanish Empire, the Napoleonic Wars, and the struggle for democracy and independence. Let’s delve into the key events and developments during this period:

• 12th to 15th century: At the beginning of the 12th century, the Iberian Peninsula was a diverse region inhabited by different kingdoms and cultures. The Christian kingdoms of Portugal, Leon, Castile, Navarre, and Aragon in the northern half of the Iberian Peninsula coexisted alongside the (Arab and Maghreb) Muslim-ruled kingdoms in the southern region – three Taifa periods, the Almoravid Empire (1085–1145 CE), the Almohad Caliphate (1147–1238 CE), Nasrid Emirate of Granada (1238–1492 CE). In 1147 CE, the Portuguese began their Reconquista by capturing Lisbon from the Arabic and north African Muslims (Moors). The marriage of Ferdinand III of Castile and Beatrice of Swabia united Castile and Leon, establishing the powerful Kingdom of Castile. Reconquista campaigns gradually pushed the Muslim rulers southward leading to the fall of major Islamic strongholds such as Córdoba and Seville. The Reconquista gathered momentum and by 1250 CE, had reduced Muslim control to the Nasrid kingdom of Granada in the south-east of the peninsula. In 1469 CE, the marriage of Ferdinand of Aragon and Isabella of Castile united their kingdoms and laid the foundation for a unified Spain. In 1492 CE, the last bastion of the Muslim kings, Granada fell to the united forces of Aragon and Castile.

1492 CE was a momentous year for the Spanish Empire as Genoese condottiere (leader of a mercenary group) Christopher Columbus, sponsored by the Catholic Monarchs of Aragon, Castile, and Leon (of Spain), discovered the Atlantic route from Europe to Americas continents. This opened a new era of exploration, colonization, and trade for Spain. Also, during 1499 – 1500 CE Amerigo Vespucci (a man from a family working as notary in Florence for the Money-Changers Guild) participated in at least two voyages on behalf of the Spanish Empire.

This period also witnessed cultural and intellectual blossoming in Spain. The 12th century saw the emergence of the troubadour tradition in the courts of the Iberian Peninsula, while the 15th century marked the pinnacle of Spanish literature with figures like Gonzalo de Berceo, Alfonso X, and Juan de Mena.

• During the 16th century, within fifteen years of Colombus’s first trip in 1492 CE, Spain had functioning colonies in the Caribbean region which they built using state-sponsored and state-centered terrorism. Bartolome’ De Las Casas, who traveled to the Americas with the Spaniard colonizers provided an eyewitness account of the anatomy of colonial genocide, “They forced their way into native settlements, slaughtering everyone they found there. . .Some they chose to keep alive and simply cut their wrists, leaving their hands dangling, saying to them: ‘Take this letter’ – meaning that their sorry condition would act as a warning to those hiding in the hills”. By 1600 CE, Spanish Empire reached all over the South and North American continents as a colonial empire. The Spanish explorers were termed as conquistadors because they conquered American lands on behalf of the Spanish Empire in the western hemisphere. The Spanish (and Portuguese) mercenaries invaded North and South American continents ostensibly for proselytization (Catholic Christianity) and mercantile interests. But they ended up in (i) colonial expansion of the Spanish Empire in the western hemisphere, (ii) decimating in average 40% to 60% of the working age population of local communities, (iii) gigantic business ventures that involved another format of capitalism – I call it as ‘slave capitalism’ – along with the old format of mercantile capitalism. A scholar commented that, in some specific regions, ‘It is estimated that over 90% of Native Americans died within the first 130 years since Europeans arrived, due to diseases such as measles, smallpox and influenza (flu)’. Conquistadors like Hernán Cortés (1485 – 1547 CE), Fransisco Pizarro (1478 – 1541 CE), Vasco Núñez de Balboa (1475 – 1519 CE), and Hernando de Soto (1497 – 1542 CE) were the chief architects of the newly established colonies in South America and North America continents defeating the local kingdoms and principalities on behalf of the Spanish Empire.

During the 16th century, Spanish Empire, under the Habsburg dynasty emerged as the leading European power. Under the rule of Emperor Charles V, Spain’s empire expanded rapidly not only in Americas but territories across other parts of the globe, and trade routes were established. The influx of wealth from the Americas fueled the Spanish economy, and Spanish art and literature flourished during this period. Defeat of Spanish Armada in 1588 CE when Philip I was at the helm of the Spanish Empire, was an indicator that English (and other north-west European powers) caught up with the Iberian Peninsula at least in the naval force projection. During the period 1580 to 1640 CE Portugal was in a personal union with the Spanish crown.

• The 17th century marked the beginning of the decline of the Spanish empire mainly on European political canvas. The Treaty of London was signed in 1604 CE concluding the nineteen-year Anglo-Spanish War. The Peace of Westphalia in 1648 CE and Treaty of the Pyrenees in 1659 CE marked the end of the Thirty Years’ War and Franco-Spanish War, and resulted in territorial losses for Spain, including the recognition of an independent Dutch Republic and Catalonia. Though the Spanish Empire had reached approximately 12.2 million square kilometers by the time Philip IV died in 1665 CE, due to a series of expensive wars, inflation, and mismanagement the Spanish Empire weakened considerably.
• By the middle of the 18^th century the Spanish Empire included more than 50% of the landmass of the

western hemisphere. Fig.2.3 shows the Spanish Empire (shaded in red) at its peak in the American continents [Link🡪 https://commons.wikimedia.org/wiki/File:Imperio_Espa%C3%B1ol_(1714-1800).png ].

Fig: 2.2 Spanish Empire in Western hemisphere, 1750 CE

The Spanish Empire ruled almost all of South America continent except Brazil (distributed over three vice-royalties – Virreinato Del Rio De La Plata, Virreinato Del Peru, Virreinato De Nueva Granada), all of central America (vice-royalty Virreinato De Nueva Granada), and half of the North American lands (vice-royalty Virreinato De Nueva Espana) consisting of two-thirds of the USA, (and, some academicians claim, one-third of Canada on the Pacific Ocean coast).

In the 18th century, the Spanish Empire faced further challenges, including conflicts with other European powers and internal instability. The War of Spanish Succession (1701-1714 CE) resulted in the loss of Spanish territories, including Catalonia and Gibraltar. The War of Spanish Succession resulted in the Bourbon dynasty ascending the Spanish throne. The bourbons implemented reforms to centralize power, modernize the economy, and strengthen the monarchy.

• The 19th century brought significant upheaval to the Iberian Peninsula and the lands that belonged to the Spanish Empire. In 1808 CE, Napoleon Bonaparte invaded Spain, leading to the Peninsular War. This conflict weakened the Spanish monarchy and sparked nationalist sentiments across the region. Spanish resistance, led by figures like Francisco Goya and the guerrilla fighters, eventually drove out the French forces. The Constitution of 1812, known as the “La Pepa,” established the first Spanish constitution, reflecting the influence of Enlightenment ideals. However, political instability persisted, with frequent changes in government and conflicts between liberal and conservative factions.

The early 19th century witnessed the rise of independence movements in different Spanish colonial territories in America continents. These movements sought to break away from Spanish rule and establish their own sovereign nations. The most notable among the Spanish American Wars of Independence (during which the supporters of the ‘Royalists’ camp fought against the armies of the ‘Patriots’ camp), which resulted in the independence of most of Spain’s American colonies) except Cuba and Puerto Rico). In 1822 CE, the USA recognized Chile, the United Provinces of the Río de la Plata (Argentina), Peru, Gran Colombia (which splintered into Colombia, Venezuela, Ecuador after 1832), and Mexico.

• 20th Century: The 20th century brought profound political changes to the Iberian Peninsula. In Spain, General Francisco Franco rose to power after the Spanish Civil War (1936-1939) and established a Fascist dictatorship that lasted until his death in 1975 CE. The Franco regime was characterized by repression, political control, and economic isolation. Following Franco’s death, Spain transitioned to a constitutional monarchy under King Juan Carlos I. The 1978 CE Spanish Constitution established a parliamentary democracy, granting regional autonomy to various regions, including Catalonia and the Basque Country.

In the late 20th century, Spain experienced economic growth and political stability. It became a member of the European Union in 1986 CE and benefited from the integration and modernization processes facilitated by EU membership.

Economy: The economy of Spain underwent significant transformations between 1200 CE and 1950 CE, shaped by colonization, empire building, industrialization, and globalization. Here is a detailed description of how the economy evolved during this period:

• 1200-1500 CE: During the high Middle Ages, the Spanish economy was primarily agrarian, with agriculture forming the backbone of the economy. The cultivation of cereal crops, such as wheat and barley, along with olives, grapes for wine production, and fruits, sustained the rural economy. The surplus agricultural production supported the growth of towns and cities, fostering trade and commerce. Carlos Álvarez-Nogal and Leandro Prados de la Escosura mentioned in ‘The Rise and Fall of Spain (1270-1850)’ published in April 2011 by Universidad Carlos III de Madrid, “once the Reconquest was over and only the Nasrid kingdom of Granada remained under Islamic control, sustained progress took place. Empty lands, as the Moorish largely escaped from Christian rule, had to be populated and exploited in southern Spain… most of Spain was a frontier economy with manpower shortage and land abundance, which implied high land-labour ratios and, most probably, increasing returns to labour… After the third wave of the Reconquest in the 13th century, Christian settlers from Aragon, Catalonia and Southern France acquired farms but preferred to live in towns. Thus, “agro-towns” in southern Spain seem to be the legacy of a highly concentrated landownership which resulted in a large proportion of landless agricultural workers.”
• 1500-1800 CE: The voyages of Christopher Columbus and Amirigo Vespuchi to the western hemisphere opened up immense opportunities for Spain. The influx of precious metals, such as gold and silver, from the American colonies fueled Spain’s economy and financed its military endeavors. Spain’s economy in the 16th and 17th centuries was heavily dependent on its American colonies. The exploitation of resources and the establishment of colonial trade networks brought enormous wealth to Spain. At the time of imperial expansion, Spain was an affluent state and, by 1590 CE, it was only behind the Italian Peninsula and the Low Countries in terms of per capita income. However, the Spanish economy became overly reliant on the inflow of precious metals, which resulted in inflation and ultimately hindered the development of other sectors of economy.

J R Rosés, K H O’Rourke, J G Williamson in ‘Globalization, Growth and Distribution in Spain 1500-1913’ published by NBER as working paper, states that, “The influx of metals from the Spanish Empire in the Americas increased the price level in Spain by up to 200% more by the mid-seventeenth century than in a weighted average of European areas which were similar to Spain prior to 1500. The price level only converged back to trend more than 200 years later. In addition, due to influx of silver and gold, GDP per capita outperformed other European nations for around a century: by 1600, it was close to 40% higher in Spain than in its synthetic counterfactual. Seville, the city where the metals arrived, became the largest city in Spain, with 150,000 inhabitants Vives (2015, pp.436). Nevertheless, this effect was reversed in the following 150 years: in the late seventeenth century and eighteenth century, the Spanish economy performed significantly worse than others. Our results indicate that by 1750, GDP per capita was 40% lower than it would have been had Spain not been the first receiver of the American treasure.”

However, importance of the American colonies for the Spanish Crown during the 18th century remained as important as before. ‘The Cambridge History of Capitalism’ (volume I) mentioned that, “David Ringrose estimates that “an estimated 45 percent of peacetime income [of the Crown] was directly or indirectly derived from the colonies.” Financing the trade to the Indies had always been a very profitable activity for the merchants of lower Andalusia, not to say to other communities, such as the Basques. The amount of long-term credit required to lubricate the cumbersome and far-flung imperial trade was simply vast. It was an activity in which foreigners played a typically smaller, if still not insignificant role. In a more general way, the broader economic significance of the American trade to the Spanish monarchy was less its ability or inability to transform the productive structure of the peninsular economy through aggregate demand than its function as the glue that held the diverse pieces of the Spanish political nation together. A wide section of the elites ultimately depended on the profits on empire…”

The influx of precious metals into mainland Spain made tradable industries less competitive because inflation led to an appreciation of the real exchange rate. As a result, imports increased and exports were much reduced. In the early 16th century, Spain exported large quantities of fine cloth, but industry entered a long period of decline as the result of a rising prices of tradables.

J V Vives mentioned in ‘An Economic History of Spain’, “extremely abundant evidence pointing to a decline in herding, agriculture, industry, and trade in the Spain of the seventeenth century”. Wars, political rivalries, and ineffective governance hindered economic progress. The decline of the Spanish Empire’s power and influence led to a loss of colonies and impacted Spain’s economic standing on the global stage.

• 1800-1939 CE: During the 19th century beginning, the Spanish Empire lost all its former colonial regions in American continents thereby forfeiting the continuous streams of revenue. Spain, reduced to a nation-state, experienced a series of economic reforms and industrialization at a slower pace compared to other west European countries. The growth of mining, textile manufacturing, and railway construction contributed to the country’s economic development in regions like Catalonia.

Spain faced political instability throughout the 19th and early 20th centuries, including the Napoleonic war (1808 to 1813 CE), periods of revolution and monarchy transitions, attempt to reestablish its rule in America continents (1814 to 1820 CE). These political upheavals often had an adverse impact on the economy, creating uncertainties and hampering long-term economic growth.

• 1939-2000 CE: The period following the Spanish Civil War (1936-1939 CE) and subsequent establishment of Francisco Franco’s dictatorship marked a significant shift in Spain’s economic policies. The country embraced autarky, a policy of economic self-sufficiency, which aimed to reduce dependence on foreign trade. This period witnessed limited international trade, government control over the economy, and a focus on heavy industry and infrastructure development.

After General Franco’s death in 1975, Spain transitioned to a democratic system, which brought about economic liberalization and integration into the global economy. The country embraced market-oriented policies, joined the European Union in 1986, and experienced a period of rapid economic growth and technological modernization. During this era, Spain’s economy diversified and expanded. The tourism sector grew exponentially, attracting millions of international visitors each year. Industries such as automotive manufacturing, telecommunications, and renewable energy emerged as important drivers of economic growth. Spain’s integration into the European Union provided access to larger markets, increased foreign investment, and facilitated trade with other member countries. The influx of EU funds and infrastructure investments further bolstered Spain’s economy.

Economy & Politics in in Spanish Empire between 1500 CE and 1800 CE

Most of the academicians didn’t believe that there was any form of capitalism in Spanish economy during this era. However, it could be concluded that the Spanish Empire created a modern variant of the slave-oriented economy (practiced in the ancient Roman Empire) – slave capitalism – besides hosting mercantile capitalism. The factors which could facilitate creation of ‘industrial capitalism’, were absent.

Tab: 2.3

Economic System & Banking
Evolution of Agrarian economy	During the 16th to 18th century, southern regions of Spain couldn’t recover from the massive outward movement of the peoples who were still Islamic or Muslim-converted-to-Catholic Christianity – the ratio of working age people and arable land remained low. The agrarian economy of Spain during this period was still largely organized around a feudal structure. Most of the land was typically owned by the nobility, clergy, and crown, and the majority of the rural population worked as peasants or tenant farmers on these lands. The main crops cultivated included wheat, barley, oats, rye, and various legumes. Vineyards and olive groves were also common, particularly in the Mediterranean regions with favourable climates. Crops such as maize, potato, tomato, and various fruits were introduced to Spain from the Americas, transforming European diets. Ploughing, sowing, and harvesting were done using basic tools such as ploughs, sickles, and scythes. Irrigation systems were used to improve crop yields in arid regions. Enclosure movements were not prevalent in Spain (unlike other west European countries). Enclosures involved fencing off common lands and consolidating them into larger, more productive units to improve agricultural efficiency. Joan R. Rosés, Kevin H. O’Rourke, Jeffrey G. Williamson mentioned in ‘Globalization, Growth and Distribution in Spain 1500-1913’, “Recent work by Robert Allen (2000) has found that Spanish relative agricultural labour productivity declined between 1500 and 1800: in 1500, Spanish labour productivity was 89 percent of England, while it was 70 percent in 1800. Allen concludes that Spain missed the agricultural revolution. The situation had not changed much by the end of the 19th century: Spanish labour productivity was 62 percent of Britain in 1890 and 68 percent in 1910.”
Evolution of Slave capitalism	As the Spanish Conquistadors went on to invade more and more territories in North and South America continents (including Caribbean region), the primary objective of the aristocracy and oligarchy was expanding the territorial boundary of the Spanish Empire and profiteering by any means. ‘The Cambridge History of Capitalism’ (volume I) mentioned that, “A wide section of the elites ultimately depended on the profits on empire – not so much as capitalists, perhaps, but as rentiers. Politicians, career bureaucrats, diplomats, military officers, large merchants, and high clergy in the peninsula shared no common body of interests other than those provided and underwritten by a successful, unified, and, ultimately, intact empire.” The merchants, traders, bankers residing in Spain, Portugal, the Italian Peninsula, and the Low Countries deduced very early that, commodities (agricultural produces, agro-based products, and minerals) in large quantities could be produced at a much cheaper cost in American colonies and supplied to European countries, and Asian countries where demand exist (but lacked low-cost supply). Since almost half of the local working age people died within half a century of arrival of the Spanish invaders, the scarcity of workers for agricultural estates and mines became a stumbling block. As a ‘solution’, distant territories thousands of kilometres away at the east coast of Atlantic Ocean in Africa continent would be raided regularly by the west European slave trading outfits and thousands of Africans would be taken as prisoners, who would then be transported to American continents (as a ‘traded’ commodity). The owners of plantations and mines (like Spanish crown, merchants, bankers) would make payment to the slave-traders (mostly west European merchants and bankers) for ‘ownership’ of slaves, and bring them to their estates. Robin Blackburn wrote in ‘The Making of New World Slavery’, “The acquisition of some twelve million captives on the coast of Africa between 1500 and 1870 helped to make possible the construction of one of the largest systems of slavery in human history.” As per UN message “Some 12 to 20 million Africans were enslaved in the western hemisphere after an Atlantic voyage of 6 to 10 weeks. This voyage, now known as the “Middle Passage”, consumed some 20 per cent of its “human cargo”. [link 🡪 https://www.un.org/en/un-chronicle/legacy-slavery-caribbean-and-journey-towards-justice ]. The slave barracks would provide lodging and boarding (at the minimum possible cost to the owners of the plantations and mines); without healthy living space, food, and elementary level of education and healthcare, the debasement of human life under the watchful eyes of the west European merchants, aristocrats, oligarchs was at its ugliest form in the entire history of humankind! The slave capitalism hence established brick-by-brick by the Spanish (and the Portuguese, Dutch, English, French, Belgian, German) feudalist-bourgeois community would generate humongous ‘operating margin’ from the business that would get distributed among the ‘politicians, career bureaucrats, diplomats, military officers, and high clergy’ apart from the owner merchants and bankers. Blackburn’s study shows that, the slave system generated the surpluses that kickstarted the engine of capital accumulation while supplying necessary inputs into the industrialization process of west Europe. Thus, the system of slave capitalism became an international bridge between agrarian-mercantile stage and industrial-mercantile stages of capitalism. There has been debates over whether the American colonies were host to the process of capitalism. Blackburn describes the plantations (and mines) as “dependent and hybrid socioeconomic enterprises, not animated by a pure (industrial – author) capitalist logic but closer to it than European (medieval era – author) serfdom and (ancient era – author) slavery would have been, or were”. In an article ‘What’s at Stake in the Transition Debate? Rethinking the Origins of Capitalism and the ‘Rise of the West’’’, Alexander Anievas & Kerem Nisancioglu mentioned, “Sidney Mintz characterized the sugar plantations as ‘precocious cases of industrialization’ noting how these ‘agro-industrial enterprises nourished certain capitalist classes at home as they were becoming more capitalistic’. Indeed, we can trace the ways by which the colonial plantations of the ‘periphery’ were generative of precisely those social forces in the ‘core’ that would end up making a decisive contribution to consolidating England’s capitalist transition. Here we reconnect to Robert Brenner’s work detailing the role of the merchant community in the making of the English Revolution of 1640-60 which presents ‘the metropolitan face of the hybrid economic forms whose development the other side of the Atlantic is traced by Blackburn”. This author, however, differs with such concept of ‘proto-capitalism’. Following the well-known test of reasoning “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck”, it can be stated with genuine confidence, what developed in American continents between the 16th and 18th century, was slave capitalism. The American continents and west Europe became a unified theatre of interplay between three forms of capitalism – mercantile, agrarian, slave capitalism. The Spanish Empire established numerous large estates (Hacienda) for operating plantations and mines in South America during this period, that became the incubators of slave capitalism. Haciendas developed as profit-making enterprises linked to the global market. Some of the significant ones were: Hacienda San Juan (Puerto Rico): a sugar plantation located near San Juan Hacienda Santa Ana (Dominican Republic): situated near Santo Domingo, a sugar plantation Hacienda Santa Rosa (Cuba): a sugar plantation located in the Matanzas province Hacienda La Fortuna (Cuba): a coffee plantation in the Guantanamo province Hacienda Rosario (Jamaica): situated in St. Ann Parish it was a sugar plantation Hacienda Azúcar (Peru): a sugar plantation located near Trujillo Hacienda La Concepción (Venezuela): a cocoa plantation located in the region of Barinas Hacienda San José (Venezuela): situated in the region of Barlovento, this was a sugar plantation Hacienda La Trinidad (Venezuela): an indigo dye plantation located near Caracas Hacienda San Nicolás (Venezuela): in the Yaracuy region, it was a tobacco plantation Hacienda La Concepción (Venezuela): a cocoa plantation situated in the region of Barinas Hacienda Malabar (Colombia): Situated in the Valle del Cauca region, it was a sugar plantation Hacienda San Juan Nepomuceno (Colombia): an indigo plantation located near Cartagena Hacienda Santa Ana (Colombia): a sugar plantation situated in Cundinamarca region Hacienda La Magdalena (Colombia): a tobacco plantation located in the Boyacá region Potosí Mines (Bolivia): the mines in Potosí, including famous Cerro Rico, were rich in silver Carabuco Mines (Bolivia): these silver mines were situated near the town of Carabuco Hacienda Santa Lucía (Nicaragua): a sugar plantation located near León Hacienda La Concordia (Nicaragua): an indigo plantation situated in the Chinandega Hacienda San Jerónimo (Guatemala): this indigo plantation, located near Guatemala City Hacienda Santa Rosa (Guatemala): a sugar plantation situated in the Jutiapa department Hacienda San Fernando (Guatemala): located near Escuintla, this was a coffee plantation Hacienda San Nicolás (Mexico): a tobacco plantation located in the Veracruz region Hacienda San Jose Chactún (Mexico): a corn and cane sugar plantation in the Yucatan region Hacienda San Antonio de Petrel (Chile): a cattle firm in the Pichilemu, O’Higgins Region
Evolution of Mercantile capitalism Impact of ‘American Treasure’	‘Globalization, Growth and Distribution in Spain 1500-1913’ by Joan R. Rosés, Kevin H. O’Rourke, Jeffrey G. Williamson published by NBER states that, “The mainstream literature divides Spanish foreign trade experience since Columbus in to three periods. Up to the 1820s, American domestic and re-export trade had an important impact on total Spanish trade. […] In the first period, the Spanish traded goods sector shrank: many commodities in which Spain was once self-sufficient — such as corn, rice, and sugar — became imports; and even those goods Spain previously exported — such as leather manufactures, iron, and alum — began to be imported by the early 17th century. Mauricio Drelichman (2005) attributes this collapse in traded goods sectors to a Dutch disease caused by the massive influx of precious metals from America. Spanish monarchs developed a series of mercantilist policies to control their returns on this trade: several privileged trade monopolies were established, only a few ports were allowed to participate in the American trade, and most of it remained in hands of merchants in Cadiz. While a very large share of Spanish exports to America were European re-exports, Spain also exported wool, spirits, wine, raisins and other primary products to Europe and imported cotton yarn, linen and wool textiles and flour in return (Prados de la Escosura 1988). Restrictive mercantilist trade policies were reinforced by wartime disruptions at the end of the 18th century: total exports declined by one third from 1784 to 1820. Spanish foreign trade did not grow again until the 1840s.” As per Vives (2015), from 1548, foreign cloth was admitted duty-free, and Spain “remained a net importer of cloth until the nineteenth century”. Vives also mentioned, “wool exports through the port of Santander consisted only of 11 ships and 605 sacks of wool annually by 1622, compared with 66 ships and 17,000 sacks just half a century before.” The Spanish treasure fleet (Spanish – Flota de Indias) linked Spain with its colonies in North, and South America – convoys were used to transport agricultural goods like corn, lumber, precious metals like silver and gold, spices, sugar, tobacco, silk, and other exotic goods from the overseas colonies to the Spanish mainland in Iberia. From mainland ‘oil, wine, textiles, books and tools’ were transported in the opposite direction. In ‘American treasure and the decline of Spain’ published by the University of Manchester in January 2022, Carlos J. Charotti, Nuno Palma, Joao Pereira dos Santos stated, “In this paper, we study the long-run impact of the influx of silver from the New World since 1500 for the economic development of Spain. Compared with a synthetic counterfactual, the price level in Spain increased by up to 200% more by the mid-seventeenth century. Spain’s GDP per capita outperformed other European nations for around a century: by 1600, it was close to 40% higher than in its counterfactual. However, this effect was reversed in the following 150 years: by 1750, GDP per capita was 40% lower than it would have been if Spain had not been the first-wave receiver of the American treasure. […] “Spain was the first-wave receiver of the precious metals from the New World from around 1500. The metal coins, which were privately owned, spread over Europe through two mechanisms: first, the higher level of prices in Spain led to the appreciation of the real exchange rate which favoured imports and worked against exports, meaning that Spain’s balance of payment was settled by sending currency abroad; and second, the Crown benefited from taxes on the production of these metals in the Americas, which it used to make diplomatic and military payments abroad, especially in Italy and Flanders […] “The imbalance between incoming and outgoing trade grew ever larger as the rise in Spanish prices compared to foreign ones placed the industry of Seville in a position of obvious inferiority. Guilds of shipwrights, caulkers, and rope-makers (an Andalusian specialty) almost disappeared, and the number of silk looms decreased very noticeably.”
The labour market	Commenting on the population of Spain, ‘Wikipedia’ noted, “The overall effect of plague and emigration (Muslims and Jews were forced to leave Spain and Portugal during 15th and 16th century – author) reduced peninsular Spain’s population from over 8 million in the last years of the 16th century to under 7 million by the mid-17th century, with Castile the most severely affected region (85% of the Kingdom’s population were in Castile), as an example, in 1500, the population of Castile was 6 million, while 1.25 million lived in the Crown of Aragon which included Catalonia, Valencia and the Balearic Islands.” During the 15th and 16th century, lack of labour force had a negative impact on the (Iberian Peninsular) Spanish economy. “Prior to the 19th century, there had been a long epoch during which the wage-land rent ratio declined (because of a decline in the land-labour ratios – author), implying a rise in inequality (since land owners were at the top of the income distribution while landless laborers were at the bottom: Hoffman et al. 2002)” – Joan R. Rosés, Kevin H. O’Rourke, Jeffrey G. Williamson commented in ‘Globalization, Growth and Distribution in Spain 1500-1913’ about the 17th and 18th century Spain.
Money and monetary metal	The Spanish money stock increased from around 400 tonnes to around 6400 tonnes between 1492 and 1810 CE. Analysing the money supply, Yao Chena, Nuno Palma, and Felix Warde commented (in the article ‘Reconstruction of the Spanish Money Supply, 1492–1810’ published in ‘Explorations in Economic History’ Volume 81, July 2021), “Silver was the most important monetary metal, although gold was used for coins of high denomination. Coins made of precious metals were more widely accepted than banknotes or bills of exchange. In continental European countries, precious metal coins typically accounted for more than half of the money supply as late as 1860. For Spain in particular, gold and silver still made up around 85% of the money supply in 1875. […] Annual Atlantic inflows were large, and primarily consisted of remittances, transfers of incomes from abroad, and capital inflows. Less than a third of precious metal inflows constituted payment for Spanish exports (based on total export values from Phillips, 1990, p.82). In terms of their functionality, liquidity, and acceptance as a means of payment, precious metal coins are comparable to narrow money aggregates today. In contrast to today’s cash, early modern commodity money was not supplied by central banks, but minted by a mint on request of its customers. Precious metal mines were owned and run by private entrepreneurs, and 85% to 95% of precious metal remittances from the Spanish American colonies were privately owned. The government, however, owned the Imperial mints, set mint fees, decided upon which denominations to issue, and set the rate at which precious metals were exchanged for coin (the mint price). […] “Attman (1986) and Walton (1994) provide the most comprehensive compilations in this regard. Their data indicates that the Spanish outflow ratio – the fraction of Spanish money inflows from America, which left Spain – hovered slightly above 90% for much of the 17th century. In the late 17th century, this share increased to 100%. Only in the late 18th century did inflows systematically exceed outflows once again. During severe military conflicts, outflows could temporarily exceed inflows from America, which was the case during the height of the Dutch War for Independence and the War of Spanish Succession. We are unaware of any source for Spanish precious metal outflows before the late 16th century. Therefore, at the beginning of our sample, we work with a 91% outflow rate, which is representative of Spanish outflows in the 17th and late 18th centuries outside of periods of severe military conflict.”
Presence of ‘capitalist’ class with concentration of wealth as capital (money and property); Non-Jewish family-owned business houses	During this period, several banking and trading families in Spain became prominent and were involved in plantation agriculture, silver mining, and trading. Here are some of the notable families: 1) The Casa de Contratación family played a pivotal role in overseeing Spanish colonial trade and exploration. Established in 1503 CE in Seville, it regulated and controlled trade with the Spanish colonies, including the American colonies. It facilitated the involvement of various Spanish families in plantation agriculture, silver mining, and trade. 2) The House of Alba (Casa de Alba), was one of the most influential noble families in Spain during this period. They became involved in the economic activities related to Spain’s American colonies, including plantation agriculture and mining. They owned extensive landholdings, particularly in Andalusia and the Americas, and had significant interests in silver mining in Mexico and Peru. 3) The House of Medina Sidonia (Casa de Medina Sidonia) was another prominent noble family in Spain. They had significant landholdings, particularly in the region of Andalusia, and were involved in plantation agriculture and silver mining in the Americas. The family’s interests included sugar production in the Canary Islands and silver mining in Mexico. 4) The Tavera family was a powerful Spanish noble family that held high-ranking positions in the Spanish government and church. They had extensive landholdings and were involved in plantation agriculture, particularly sugar production, in the Spanish colonies. The family also had investments in silver mining in Spanish Mexico. 5) The House of Ponce de León, headed by the Ponce de León family, was a noble family with significant interests in exploration, colonization, and trade. They were involved in the colonization of Puerto Rico and were engaged in sugar production and trade with the Spanish colonies in the Caribbean. They also had interests in silver mining in Mexico. 6) The Fugger family, originally from Augsburg, Germany, was one of the most influential merchant and banking families of the time. They had extensive trade networks and were involved in financing mining operations in the Spanish Empire. Jakob Fugger played a significant role in financing Habsburg ambitions, including the election of Emperor Charles V. 7) The Welser family, also from Augsburg, was involved in trade and banking in the Spanish Empire, particularly in Venezuela. They held significant concessions and rights over certain territories, which they administered on behalf of the Spanish crown. 8) The Bardi family, originally from Florence, Italy, were influential bankers during the late 15th and early 16th centuries. They provided financial services to the Spanish crown and participated in financing expeditions and ventures related to the empire.
Presence of influential Jewish families – Sephardim, Ashkenazim – who migrated from west Asia, north Africa, east Europe	As a result of the expulsion and the subsequent Inquisition, the presence of Jewish trader, banker, business families in Spain during this period diminished greatly. However, there were many instances of conversos (the Jews who converted to Christianity) who continued to engage in trading business and finance in Spain (and Portugal). A few of them also held high positions in the Spanish administration. Some of these families who managed to maintain their influences despite the challenges they faced: 1) Santangel Family: Luis de Santangel, a Converso, is known for his role in convincing the monarchs about Christopher Columbus’ voyage to the Americas. He provided financial assistance to Columbus through his position as the chancellor of King Ferdinand and Queen Isabella of Spain. 2) Jimenez de Marchena Family: This Converso family was involved in trade and finance in Seville and had connections to the Americas. Diego Caballero de la Riba, a member of this family, was a prominent merchant and banker. He was involved in managing the finances of the crown. 3) Francisco Gutiérrez: Gutiérrez was a converso who engaged in trade and finance. He was one of the financiers who supported Hernán Cortés’ expedition to Mexico in 1519. 4) The Mendes family, originally of Jewish descent, became Conversos and were prominent financiers in Spain during this period. Some members of the family held important positions in the Spanish court and were involved in international trade with base in Antwerp. 5) The Cabrera family, of Converso origin, played a significant role in financing the Spanish crown and were involved in international trade. They were based in Antwerp and had connections across Europe and the Americas. 6) The Toledo family, originally Jewish, were Conversos who engaged in banking and trade. They were involved in financing voyages to the Americas and had connections in the New World (Spanish and Portuguese American empire). 7) The Abravanel family was Jewish merchants and bankers who held positions of influence in different parts of the Spanish Empire. Some members of the family were advisors to the Spanish crown. 8) The Leon family, originally Jewish, played a role in financing and trade in the Spanish Empire. They were active in regions like the Iberian Peninsula and the Americas. Few other notable converso families were Lopez Family, Pinto family, Perez Family, Perera Family.
Political System, Society & State
Empire-State with sizeable population and territory under its jurisdiction; dynastic rule	Habsburg Spain was transformed into the largest colonial empire throughout the 16th and 17th century, a position reinforced by trade and wealth from its colonial possessions. The empire reached its pinnacle during the reigns of the first two Spanish Habsburgs – Charles V (1516 – 1556 CE) and Philip II (1556 –1598 CE). This period saw the Italian Peninsular Wars, the Schmalkaldic War, the Dutch Revolt (Eighty Year’s War), the War of the Portuguese Succession, clashes with the Ottomans, intervention in the French Wars of Religion and the Anglo-Spanish War. However, the Habsburgs faced their toughest challenge in the form of religious conflicts. The Protestant Reformation movement spread across Europe, and Spanish crown found itself increasingly at odds with the entities who leaned towards the Protestant Christianity. The Habsburgs provided political support within the Spanish jurisdiction to Counter-Reformation that was launched by the Catholic Church, aimed to combat Protestantism and reinforce Catholic orthodoxy. Political power was under firm control of the crown and the noble aristocrats who shared it with very wealthy merchants and bankers. Financial enrichment of the members of the oligarchy through misuse of power and at the expense of governance was widespread. By the 18th century, however, it became clear that Spain (and Portugal) had comparatively backward political institutions, with insufficient checks and balances and highly dominant rent-seeking elites. In ‘American treasure and the decline of Spain’ published by the University of Manchester in January 2022 Carlos J. Charotti, Nuno Palma, Jo˜ao Pereira dos Santos noted, ““Politically, parliaments ceased to meet around the mid-seventeen century, except occasionally for ceremonial reasons only. This was because the Crown no longer needed to negotiate taxes thanks to additional revenues, even though its share of the incoming treasure was only around 20% of the total private revenues. The Crown also allowed the state to be captured and foreign interests to take over much of the foreign carry trade associated with the import of products and the export of precious metals. The Habsburgs used the additional revenues associated with American silver to finance endless dynastic wars in the Netherlands and Italy, leading to multiple bankruptcies (state defaults in 1557, 1560, 1569, 1575, and 1596 – author) and the Crown owning more than 13 million ducats by 1592 CE, at the end of the reign of Philip II (Vives, 2015, p.53). The ruinous policies of the Crown continued into the seventeenth century, which over time became less and less constrained by the Cortes, and accordingly “sacrificed the economy to the treasury, and the interests of its subjects to its own interests”.
Major outward migration of Muslims (Moor) and Jews from Spain; Overall decline in urban population	Wikipedia noted that, between 1391 and 1410 CE over half of Spain’s Jews embraced Catholicism to escape death sentence by the crown. “Jews of Baena, Montoro, Baeza, Úbeda, Andújar, Talavera, Maqueda, Huete, and Molina, and especially of Zaragoza, Barbastro, Calatayud, Huesca, and Manresa, had submitted to baptism”. And, half of those converso, around 100,000 left Spain soon after. In 1492 CE, Alhambra Decree (Edict of Expulsion) forced the Jewish community to choose between conversion to Catholicism or expulsion from the Spanish Empire. As a result, as many as 200,000 Jews were expelled from Castile and Aragon. A lot of elite Jewish families converted to Catholic Christianity, and became converso. The Expulsion of the Moriscos was decreed in 1609 CE. The Moriscos were descendants of Spain’s Muslim population that had converted to Christianity in the early 16th century. About four decades after the War of the Alpujarras (1568–1571 CE), over 300,000 moriscos were expelled from southern Spain. The city of Burgos, for instance, shrunk from 20,000 inhabitants in 1575 CE to only 3,000 by 1646 CE. By the final decades of the eighteenth century, “the areas which had seemed so vibrant in the sixteenth century had lost population over the course of almost 200 years … Castile’s urban system had ceased to exist” (refer Vives). Wikipedia mentioned, “The overall effect of plague and emigration reduced peninsular Spain’s population from over 8 million in the last years of the 16th century to under 7 million by the mid-17th century, with Castile the most severely affected region (85% of the Kingdom’s population were in Castile), as an example, in 1500, the population of Castile was 6 million, while 1.25 million lived in the Crown of Aragon which included Catalonia, Valencia and the Balearic Islands.”
Society, culture and religion	The dominance of Catholicism, the legacy of the Inquisition, the flourishing of religious art, and the emergence of Enlightenment ideas all contributed to shaping the socio-religious landscape of the in Peninsular Spain during the period from 1500 to 1800 CE. The interplay among these factors highlights the ways in which religion influenced Spanish society, while society’s evolving needs and aspirations also impacted the practice and interpretation of religious faith and beliefs. At the outset of the 16th century, Spain was predominantly a Catholic nation, and Catholicism played an influential role in all aspects of Spanish society. The Catholic Church was deeply embedded in the lives of individuals, from birth to death, and held significant political and economic power. The year 1492 CE marked a turning point in Spain’s religious landscape. The Catholic Monarchs of Aragon and Castile, completed the Reconquista by capturing Granada from the Moors and expelled the Jewish population. Subsequent expulsions of Muslims further solidified Catholicism as the dominant religion. The Spanish Inquisition, established in 1478, played a crucial role in enforcing the religious orthodoxy during this period. Its primary objective was to ensure the purity of Catholicism and eliminate any perceived heresy. The Inquisition targeted conversos (Jewish converts to Christianity) and Moriscos (Muslim converts to Christianity) suspected of practicing their former religions in secret. The Inquisition wielded significant political power, as individuals accused of heresy could be stripped of their property, and sentenced to death. The Counter-Reformation, a response to the Protestant Reformation sweeping across Europe, reinforced the Catholic ideology and led to the flourishing of religious art and architecture based in Christian ideology. Enlightenment ideas began to permeate Spanish society in the 18th century, challenging the traditional religious beliefs and practices. Intellectuals advocated for reason, science, and a more secular understanding of the world. This period of intellectual ferment marked a departure from the dominance of the Catholic Church in shaping societal norms. Though Catholicism remained a powerful force in the Spanish society, secularization gained momentum, leading to debates about the role of religion in governance and public life.
Civilizations in South and North American continents were turned upside down	Apart from the oligarchy’s ambitions for wealth and power, the Catholic religion played a pivotal role in the Spanish conquest of the western hemisphere, serving as both a motivation for exploration and a justification for the subjugation of the indigenous peoples. The Spanish Crown saw the conversion of native peoples as a means of fulfilling their religious duty and justifying their dominion over these new continents. The conversion efforts took various forms, ranging from peaceful evangelization to more coercive methods. Spanish missionaries established missions across the American territories, seeking to replace indigenous spiritual practices with Catholicism. While some indigenous communities embraced Catholicism willingly, others faced forced conversion. Slowly, but surely, the merging of indigenous traditions and Catholicism gave birth to a complex syncretic religious landscape in the lands across Americas. The most notable example of resistance was the 16th century uprising led by Túpac Amaru II in the Andean region, which was influenced by a blend of indigenous spirituality and the desire for autonomy. ‘The Cambridge History of Capitalism’ (volume I) critically commented on the impact of Spanish invasion of American continents as, “Nevertheless, these (native American – author) civilizations were turned upside down, if not quite destroyed, by conquest. Their development was profoundly altered, and permanently so, in a process that has not yet abated. Vital continuities of language, culture, religious practice, and political authority, to name only a few, certainly remained far more rooted than historians once believed. Nor does anyone doubt that indigenous survivals were more enduring as well. Yet it is equally pointless to deny the radical changes in factor endowments that occurred because of the introduction of alien pathogens, or the gross modifications of the natural environment because of the introduction of alien flora and fauna into the Americas. Labor, previously abundant, became scarce. Land, previously scarce, became abundant. In a market economy, the logic of scarcity is everything. Scarce labour should command a larger share of output than abundant land. Yet this was hardly the distribution that the conquerors desired nor could it possibly be. […] “For the enterprise of conquest to prosper, it was necessary, as Victor Bulmer-Thomas (2003:127) puts it succinctly, for the Europeans to refuse to recognize relative scarcity. And refuse to recognize it they did by employing the nearly endless variety of devices and means outlined here. The oppression of the indigenous people stood scarcity on its head. A competitive market economy, capitalism if you will, rewards factors of production according to their relative productivity, which, in turn, depends on scarcity. Yet this was not what empire in the Indies valued. It rewarded instead the bonds of kinship, influence, and power, or, at best, the contrived scarcity that these provided with its flotas, haciendas, and repartimentos. These were rent-seeking institutions par excellence. […] One of the most remarkable legacies of the colonial empire was (African) slave trade. Since most of the working age population perished during the initiation of the brutal occupation, the scarcity would be handled using African peoples who would be removed from their ancestral lands and settled in Americas as ‘slaves’ ‘owned’ by the merchants, and plantation business owners. ‘The Cambridge History of Capitalism’ (volume I) noted, “the places where the Spanish and Portuguese had no choice but to recognize scarcity was where their presence had left no indigenous peoples to oppress: in Brazil, and most famously, throughout the Caribbean. The business of slavery, it is well known, was carried on in an unimpeachably capitalist fashion, according to most historians. The distribution and employment of African slaves was, by all accounts, determined by relative prices and comparative advantage. Here, given the institutional arrangements of the time, the slave owners had no choice but to “recognize” the scarcity of labour because they possessed a property right in it.” A new community got developed in Americas through this process – Afro-Americans.

What were the political and economic circumstances in Spanish Empire during 1500 CE to 1800 CE that were unfavourable for industrial capitalism (if compared with mid-18th century England)?

1) The policies and focus of the Spanish Empire promoted opportunities of profit accumulation driven by slave capitalist system (business operation revolved around plantations and mines). The economic model was primarily based on extraction of precious metals like gold and silver, from its American colonies. The influx of vast amounts of wealth from the colonies led to an overreliance on mining and the export of agricultural produces. The over-dependence on foreign (consumer) goods reduced the incentive to develop domestic industries and stifled the growth of a self-sustaining industrial base. This focus on extraction hindered the development of a diverse and sustainable industrial sector. The mercantilist policies emphasized the control and regulation of trade to benefit the Crown and its merchant class, but discouraged the development of a competitive entrepreneurial spirit among the wealthy trader-banker class thereby hindering the growth of industries.

2) The merchants and bankers in Spain were divided into different communities on religious lines – Catholic Christian (mixture of Galatian, Visigoth, Vandal, and other Germanic communities), Muslim (Arab, and Berber) and Jew (Sephardim) – and, professional lines like land-owning aristocracy, peasants, and different guild-members. Significant notable points are: (i) The Spanish society of the time placed a high value on noble lineage and land ownership, rather than on commercial activities. The social and economic elites favored status and prestige associated with landownership and agriculture over the risks and uncertainties of industrial pursuits. The Christian wealthy merchant and banker families rarely advanced into the powerful aristocracy that managed the state policies and administration, (ii) many of the Jewish merchant families left Spain after 1492 CE, and even the coverso Jew families who stayed back in Spanish regions under the continuous threat of persecution, and their relatives based in the Italian Peninsula and the Low Countries couldn’t influence the trajectory of economy of Spain through entrepreneurship (iii) most of the non-Jewish and Jewish merchants-bankers preferred easy profit from the Atlantic trade-network under the protection of the Spanish Empire while creating new bases in the Netherlands, the UK, and France for continuing their capitalist colonialist ventures.

3) Even if a strong centralized state apparatus was functioning, a central bank didn’t get developed in Spain. There was no necessity felt by the merchants and bankers and the state authorities for developing a banking system around a central bank. The Spanish trading network was heavily dependent on the banking institutions of the Low Countries and the UK. With the Catholic Church acting as moral guardian, the practice of money creation from thin air by the central bank and earning interest from that, couldn’t become an acceptable economic practice anyway.

4) The socio-economic and socio-political environments were neither conducive to research and study of science and technology nor for exploring application of the scientific knowledge in day-to-day life. And, unless scientific knowledge could be utilized for practical purposes, industrial ventures won’t be undertaken by the entrepreneurs. As a result, economy couldn’t gain from such knowledge.

As a result of the above-mentioned factors, even though the Spanish Empire had a façade of a strong economy based on mercantile capitalism and slave capitalism (apart from feudalist mode of production in agriculture), a conducive environment for further transformation into industrial capitalism (as blossomed during the 18th to 20th century west Europe) was absent.

2.2.3. Society, Politics, & Economy in THE LOW COUNTRIES/THE NETHERLANDS: 1200 CE to 1950 CE

Politics: The history of the Low Countries, comprising the territories of modern-day Belgium, Luxembourg, and the Netherlands, is a fascinating tale of political, economic, and cultural developments spanning several centuries. From 1200 to 2000 CE, the Low Countries witnessed significant transformations, including feudalism, the rise of independent ‘commercial city’, the struggle for religious and political autonomy, colonization, empire building, trade expansion, and the formation of nation-state. Following paragraphs provide a detailed overview of the key events and trends that shaped the history of the Low Countries during this period:

• During the early medieval period, the Low Countries were characterized by a fragmented political landscape. The region consisted of many small feudal principalities, each with its own lord and varying degrees of autonomy. This feudal system prevailed until the emergence of powerful duchies, such as Brabant, Flanders, and Holland, which sought to consolidate their territories and centralize governing authority. The lords of these duchies established alliances and forged marriage alliances to expand their influence. By the 12th century, urbanization began to shape the region with the rise of independent cities. Cities such as Ghent, Bruges, and Antwerp grew rapidly, fueled by trade and commerce. These cities became centers of economic activity, attracting merchants from across Europe and leading to the formation of powerful guilds that controlled trade and industry. The cities also developed a distinct sense of identity and sought greater political autonomy, often challenging the authority of feudal lords.
• During the period between mid-14th and end-15th centuries, the Low Countries experienced a period of cultural and economic prosperity known as the Burgundian Netherlands (the Burgundian Age). The dukes of Burgundy, who held considerable territories in the region, sought to centralize power and patronize the arts – Duchy of Burgundy ruled over the Southern provinces (present day Belgium and Luxembourg) and the Northern provinces (present day the Netherlands) during the period 1369–1477 CE. This period witnessed the flourishing of Flemish painting, exemplified by artists such as Jan van Eyck and Rogier van der Weyden. The Burgundian dukes also fostered economic growth, promoting trade and maritime exploration. Antwerp became a leading commercial center, and the Low Countries established extensive trading networks, particularly in the Baltic and Mediterranean regions.

However, the Burgundian era also brought political instability. Following the death of Duke, Charles the Bold in 1477, the Low Countries were embroiled in a series of conflicts, including the Burgundian Wars and the Habsburg-Valois Wars. These conflicts ultimately led to the incorporation of the Low Countries into the Habsburg Empire, under the rule of the Holy Roman Emperor (Southern provinces during the period 1477-1797 CE, and Northern provinces from 1477 to 1581 CE). The Habsburgs faced resistance from the growing Protestant movement, which sought religious and political reforms. The Reformation movement gained traction in the Northern provinces, where Calvinism became the dominant faith.

• The 16th century marked a period of religious and political upheaval in the Netherlands. The Protestant Reformation gained momentum, with influential figures such as Martin Luther and John Calvin challenging the authority of the Catholic Church. The Netherlands became a hotbed of religious dissent, with a large section people of the northern provinces, in particular, embracing Protestantism. The struggle for religious and political autonomy by the Dutch community led to the Eighty Years’ War (1568-1648) between the northern provinces, led by William of Orange, and the Spanish Habsburgs. The war resulted in the formation of the Dutch Republic. The Treaty of Westphalia in 1648 recognized the independence of the Dutch Republic, which became a republic governed by a stadtholder, a hereditary head of state.
• The Dutch Republic experienced its heyday during the 17th century, known as the ‘Dutch Golden Age’. The Netherlands became a major maritime power, built an overseas empire with Amsterdam becoming a global trading hub. Dutch merchants and explorers established colonies and trading posts around the world, including in the East Indies (present-day Indonesia), the Caribbean, and North America. The Dutch East India Company (VOC) and the Dutch West India Company (WIC) played crucial roles in expanding Dutch influence and controlling lucrative trade routes.

The Dutch Golden Age was also a period of significant cultural and scientific achievements. Dutch painters, such as Rembrandt van Rijn and Johannes Vermeer, produced iconic works that continue to captivate audiences today. The scientific community made important breakthroughs in various fields, with prominent figures like Antonie van Leeuwenhoek making significant contributions to microbiology. However, the Dutch Republic’s dominance began to wane during the closing decades the 17th century. The country faced challenges from competing European powers, including wars with England and France. Moreover, internal political divisions and economic decline contributed to the Dutch Republic’s decline as a major power.

In the late 18th century, the Netherlands fell under French occupation during the Napoleonic Wars. The French Revolutionaries and Napoleonic armies brought political and administrative reforms to the region, but also ignited a sense of nationalism and desire for independence among the Dutch peoples.

• After the fall of Napoleon, the major European powers united the northern and southern provinces of the Netherlands into a single entity, the United Kingdom of the Netherlands, in the Congress of Vienna in 1815 CE. However, this union proved unstable due to cultural, linguistic, and economic differences between the northern and southern regions. In 1830 CE, the southern provinces revolted against unified Dutch rule, leading to the Belgian Revolution and the establishment of an independent Kingdom of Belgium. The northern provinces, known as the Kingdom of the Netherlands, continued as a separate entity, transitioning into a constitutional monarchy. Throughout the 19th century, the Netherlands underwent industrialization and modernization, particularly in areas such as engineering, transportation, and agriculture.
• The Netherlands faced significant challenges during the 20th century, including both World Wars. In World War I, the country remained neutral but still suffered from economic disruptions and the impact of the war. During World War II, the Netherlands was occupied by Germany, resulting in widespread suffering and the persecution and deportation of the Jewish population. The Dutch Resistance played a significant role in opposing the German occupation.

After World War II, the Netherlands underwent a period of post-war reconstruction and economic growth. The country became one of the founding members of the European Union; Brussels, the capital of Belgium became the headquarters of the EU. Now, the Netherlands is known for its thriving economy, progressive social policies, and cultural contributions to the world.

Economy: Overall, the Dutch economy transformed from a predominantly agrarian society to a global commercial power, embracing industrialization, trade, finance, and technological advancements. The entrepreneurial spirit, innovative mindset, and strategic location have been the key factors in the Netherlands’ economic success:

• The Low Countries’ economy during the 13th and 14th centuries was primarily agrarian, with a feudal system dominating the rural areas with large estates owned by nobility and worked by peasants. Crops such as wheat, barley, and oats were cultivated, and techniques like crop rotation and irrigation were practiced. Fishing and livestock rearing, particularly cattle and sheep, also played important roles. Feudal manors and monasteries housed a number of artisans (blacksmith, leatherworker, weaver etc.) for the purpose internal consumption, and this labor would be tied up with the ‘lord’ of the unit and this labor won’t earn any wage (but will consume produces of the unit). Even then during the 16th century, wage labor was almost one-third of all labor performed in the Low Countries.

The emergence of urban centers and trade guilds during this period signaled the growth of commerce and craft industries. Cities such as Amsterdam, Rotterdam, and Utrecht became thriving centers of trade, attracting merchants, craftsmen, and bankers from around Europe. The Dutch Republic failed to establish a central supreme court, though litigants in Holland and Friesland could appeal against verdicts of their respective provincial courts to a joint Hoge Raad or Supreme Court (Verhas 1997). The Hanseatic League, a powerful trading alliance, facilitated the expansion of maritime trade network in the North Sea and Baltic Sea. During the period from 12th to 15th centuries, it established trading posts in numerous towns and cities across north and west regions of Europe (Bruges, Bergen, London, Novgorod) and enjoyed privileges (from the respective rulers of those kingdoms and principalities). Merchant guilds traded timber, wax, resins, furs, along with rye and wheat. Merchant guilds from the Low Countries also cooperated with the German, Russian, Dane, and Anglo-Saxon merchant guilds. As the Italian merchants and bankers shifted their base from the Italian Peninsula to the Low Countries, Bruges became the financial and trading center of Northwest Europe in the 14th and 15th centuries before Antwerp seized the glory in the 16^th; thereafter, as the merchants and bankers moved to Amsterdam it became the global centre of finance during the 17th and 18th century.

• The Dutch Golden Age (17th and 18th century) of economy marked a period of remarkable economic prosperity and cultural flourishing. The Netherlands became a dominant maritime and commercial empire, aided by its geographic location and entrepreneurial spirit. The Dutch Republic’s trade networks spanned across the globe, with the Dutch East India Company (VOC) and Dutch West India Company (WIC) leading the colonial and trading expeditions. The VOC established trading posts and colonies in modern-day Indonesia and controlled the lucrative spice trade. Dutch ships sailed to Africa, the Americas, and Asia, contributing to significant wealth accumulation. A thorough analysis will reveal a fact which remains a sort of enigma – how could a small region like the Northern provinces with just two million population struggled globally against the Spanish Empire, the mightiest empire on the earth during the 16th and 17th century and build an overseas empire and the most awesome trade network for itself? A stupendous amount of money capital and logistics must had been invested by the merchants and bankers for such a feat!

The trading system of mercantile capitalism yielded unbelievable profits for the trading and banking communities in the Northern and Southern Provinces. Figure 2.3 given below (source: ‘Trade and Empire, 1700-1870’ authored by Guillaume Daudin, Kevin O’Rourke, Leandro Prados de La Escosura in 2008 published by HAL, hal-03459838) shows the price of pepper in Amsterdam could even reach 10 times the price in Indonesia.

Fig: 2.3 Ratio of Amsterdam Price and Southeast Asian Price of Pepper

Amsterdam became world’s most significant centre of international finance, attracting merchants, bankers, and investors from other European countries. In ‘A Concise Financial History of Europe’, Jan Sytze Mosselaar noted, “Over 20 years, the Dutch East India Company (VOC) stock was first traded in 1602, followed by the launch of the Bank of Amsterdam in 1609 and the new stock exchange building, which opened in 1611. In 1614, the city’s pawn bank (Stadsbank van Lening), which still exists today, was founded, and in 1615 a new grain exchange was opened.” Joyel Mokyr wrote in his presentation titled ‘The Industrial Revolution and the Netherlands: Why did it not happen?’ for the 150th anniversary conference organized by the Royal Dutch Economic Association, Amsterdam, held in December 1999, “much of the golden age had depended on advanced technology … a sophisticated manufacturing sector, a productive agriculture, highly developed shipping, advanced engineering (especially hydraulics).”

• The 18th and 19th centuries brought both challenges and transformations to the Dutch economy. The British maritime trade network aided by the formidable naval forces challenged all other west European trading networks. The decline of the Dutch Republic’s maritime dominance and the Napoleonic occupation disrupted trade operations and led to economic stagnations, inflation and unemployment. The victorious French decreed an indemnity of 100 million guilders which later on increased to 230 million. Joyel Mokyr wrote in the earlier mentioned article, “Dutch manufacturing known as “trafieken” depended heavily on imported raw materials which became hard to come by as they had to arrive through neutral ports. The British occupied the Dutch colonies…. Fisheries and shipbuilding also suffered heavily. On the other hand, more traditional industries such as agriculture and rural-domestic industries prospered by comparison. Enterprising Dutch merchants were able to use neutral and French registration and make large profits. On the whole the declining sectors outweighed those gaining from the war.”

In the 19th century, the Netherlands underwent industrialization, gradually shifting from an agrarian and trading society to a manufacturing-based economy. Textile manufacturing, shipbuilding, metallurgy, and engineering industries gained prominence. Industrial centers emerged in cities such as Rotterdam, Amsterdam, and Eindhoven. Joyel Mokyr wrote, “the Dutch Republic underwent a complete re-organization of its fiscal system during the Batavic and French periods, had its guilds system done away with (though not without resistance), unified its internal transport system, and above all created something that looked like a modern centralized government.” The 19th century witnessed advancements in infrastructure, with the construction of canals, railways, and improved road networks, facilitating growth.

• The Netherlands experienced further economic diversification and modernization in the 20th century. The country became renowned for its technological innovations, research, and development. During World War II, the Netherlands was invaded by the Nazi German military forces. The conflict had a significant impact on the economy. After the war, the country underwent a period of reconstruction, focusing on infrastructure development, urban planning, and social welfare.

The discovery of natural gas in the North Sea in the 1960s and 1970s brought substantial wealth to the Netherlands. The exploitation of these reserves led to the establishment of a joint venture between Shell and ExxonMobil. In the late 20th century, the Dutch economy evolved into a service-based economy. The financial sector, including banking and insurance, grew in importance, with Amsterdam again evolving as a global financial center. The Netherlands also developed expertise in high-tech manufacturing, logistics, and creative industries. Trade remains a vital component of the Dutch economy. The Port of Rotterdam, one of the world’s largest ports, facilitates international trade, while Schiphol Airport serves as a major European air transportation hub.

Economy & Politics in the Netherlands between 1550 CE and 1800 CE

There exists a small quarter of academicians who still believe that, it was the Netherlands which hosted the first instance of ‘industrial capitalism’ during the middle of the last millennium. However, the Netherlands didn’t become a trend-setter in any of the formats of capitalism – while Italian Peninsula and Spanish Empire became the landscapes to be painted first with the colours of agrarian-mercantile capitalism and agrarian-slave capitalism respectively, the Netherlands became the perfect practitioner of both the above combinations of capitalism. The Netherlands also held the distinction of being the staging ground for modern economy, when ‘industrial capitalism’ made its first appearance in the UK/England. Karl Marx described the Northern provinces, in its Golden Age, as “the model capitalist nation of the seventeenth century”. He drew a conclusion that “its fisheries, marine, manufactures, surpassed those of any other country. The total capital of the Republic was probably more important than that of all the rest of Europe put together.”

Tab: 2.4

Economic System & Banking
Evolution of Agrarian capitalism	While the southern provinces were more urbanized during the 15th and first half of the 16th century, northern provinces (which later became the Netherlands) were predominantly rural. Agriculture, fishing and animal husbandry were the mainstay of the economy. Since the high Middle Ages, dairy products from the Netherlands became a hallmark of Dutch perfection. Commenting on animal husbandry, Donald J. Harreld of Brigham Young University wrote in an article ‘The Dutch Economy in the Golden Age’, “Some of the impetus for animal production came from the trade in slaughter cattle from Denmark and Northern Germany (part of Hanseatic League – author). Holland was an ideal area for cattle feeding and fattening before eventual slaughter and export to the cities of the Southern provinces. The trade in slaughter cattle expanded from about 1500 to 1660…”. The options for very large landowners were: (1) they may decide to operate just like a manor, (2) they themselves could cultivate with hired labour, (3) they could lease out parcel of land to peasants with fixed tenure or hereditary. By 1400 CE, a combination of various environmental factors like soil erosion, flooding, subsidence, rising groundwater table forced the feudal manorial framework to become a relic of past. Monarchs and aristocrats redefined the property rights especially rights to land including tenure of ownership. This opened up a fourth avenue for a large landowner – (4) reclaimed land against a token payment to the prince/monarch. Drawing a conclusion on how the agriculture, nature of land, and land property rights influenced each other, ‘The Cambridge History of Capitalism’ (volume I) commented, “The transition from feudalism to market orientation meant that landlords moved increasingly from option one to options two, three, and/or four: they needed to find ways other than the manorial exchange of service for safety to attract labour for exploiting the soil. The short-term lease of option three, and option four, was most conducive to widening the access to land. […] Holland’s early market orientation is linked to the absence of manorialism and tied to the dominance of peasant ownership. However, the short lease spread slowly there, averaging 30 – 40 percent by 1500, because landowners found it difficult to enforce such terms in an environment used to hereditary leases or full ownership. Only when the government started backing landowners during the sixteenth century did the short lease find wider adoption.” The Netherlands rural economy couldn’t keep pace with the growing population, and cereal production even in a normal season would not cater to the domestic consumption. Import and warehousing of cereals from France and Baltric region later on transformed into, what academicians described as ‘mother trade’. In the above-mentioned article, Harreld noted, “…Mijla van Tielhof defined ‘mother trade’ as the oldest and most substantial trade with respect to ships, sailors and commodities for the Northern provinces. Over the long term, the Baltic trade gave rise to shipping and trade on other routes as well as to manufacturing industries.”
Evolution of proto-industrialisation Evolution of Mercantile capitalism	Between 1550 and 1800 CE, the following industries flourished (refer Harreld’s article ‘The Dutch Economy in the Golden Age’) in the Northern provinces which may be called ‘proto-industrialisation’: (i) Herring fishing developed into a large industrial sector, which during the first half of 17th century accommodated around 500 herring buses with a catch of around 30,000 to 33,000 ton per year. It employed a large section of rural and urban population across the entire operational supply chain from fishing to export until the decline in quantity of herring catch due to competition; (ii) The Southern provinces were the leading centres of textile industry till mid-16th century. Thereafter, Leiden in the Northern provinces became the centre for rejuvenation of textile sector – in 1660s, production of traditional heavy woollen cloths, traditional light woollen cloths, and new variety textile (like says, fustians, camlets) totalled to about 130,000 pieces per year (from 50,000 – 60,000 pieces per year during 1600s). “Leiden may have been Europe’s largest industrial city at the end of 17th century. Production was carried out through the “putting out” system, whereby weavers with their own looms and often with other dependent weavers working for them, obtained imported raw materials from merchants who paid the weavers by the piece for their work (the merchant retained ownership of the raw materials through the process).” Amsterdam, Utrecht, Haarlem also had prosperous textile industry. Harlem’s linen sector was the leader in Europe. Textile industry became the largest employer in the Northern provinces, who benefitted from the boom in export of textile; (iii) Sugar manufacturing sector was another industry in which Amsterdam dominated in Europe. Starting in 1605 with three sugar refineries, Amsterdam counted about fifty refineries in 1662 CE; (iv) Tobacco processing was another significant employer in Amsterdam, raw materials were imported from West Indies islands colonised by English and French kingdoms; (v) Horticultural developments created tulip flower farming sector, which by 1636 CE became the fourth leading export product of the Netherlands (apart from gin, herring and cheese). Speculation in tulip futures resulted in shooting up of the price of tulips periodically; (vi) Grain harvests in the Baltic area and grape harvests in France would be bought up by the Dutch merchants before they were harvested. ‘The Cambridge History of Capitalism’ (volume I) noted, “The industrial sector that rose in tandem with the Republic’s commercial expansion also exerted a growing demand for labour, notably in the processing of imported foodstuffs and raw materials. By the mid sixteenth century timber, beer, herring, and salt were well established sectors, soon followed by newer branches such as sugar, diamonds, dyewoods, silk, a little later also coffee, tobacco, and import substitution industries such as madder. Processing industries were economically the most dynamic sectors in the northern Low Countries, and at the same time the most vulnerable. From about 1650 their competitive edge in the export markets for low-quality manufactures was blunted by the adoption of mercantilist trade protectionism by Britain and France.” Being a region that is intersected by canals, waterways, and creeks shipping is the most natural and economical mode of goods transport in the Netherlands, dutchmen also had more competence as sailors than many other ethnic communities. The ‘Baltic trade’, since few centuries back, perfected the grain shipping business network for the dutchmen, by 1600 CE the Northern provinces further extended this advantage into large scale mercantile trading of many more goods across the world. Commenting on the development of mercantile capitalism ‘The Cambridge History of Capitalism’ (volume I) noted, “Regular exchange across the North Sea with northern France, eastern England, northern Germany, and Denmark existed as early as the year 1000. In addition, rivers facilitated trading links with the Rhineland and down the Meuse valley, which, from the twelfth century, extended as far as the Champagne fairs, where Flemish fabrics were exchanged for Italian luxury products. These factors combined to produce a dense scattering of market towns, first of all in Flanders, where scores of small towns developed into specialized cloth production centres tied to regional and interregional trade flows through a fair cycle which competed for business with the Champagne fairs. In neighbouring Brabant, Antwerp was the first among at least a dozen towns involved in regional and international trade. In the north, towns on the Zuider Zee rim and along the IJssel traded with the German hinterland from the thirteenth century. Holland’s trade emerged a century later, fostered by the worsening ecological conditions that forced its inhabitants down the road of marked economic specialization. They switched from growing bread grains to importing them, first from southern Flanders and northern France, then by the second half of the fifteenth century increasingly from the Baltic. Instead of grain, farms started producing dairy goods, flax, and hemp, while surplus farm labour found work in fishing and transportation services. Other European towns and regions profited from the medieval rise of long-distance overland trade, but the high degree of urban autonomy in Low Countries combined with the intensity of interurban competition to produce dynamic institutional development.” “By 1650 Holland boasted the largest merchant fleet of Europe with over three thousand ships connecting ports from Archangel in northern Russia to Constantinople and Aleppo in the Levant. Ocean shipping had become a multi-million guilder business employing thousands of sailors drawn from all over the northern Low Countries, and also drawing migrant workers from Germany and Scandinavia. Concentrated in the ports of the Meuse estuary around Rotterdam, the ports on the western side of the Zuider Zee, and the coastal towns of Friesland and Zeeland, the maritime labour market also had to meet a strong demand for sailors and soldiers from the navy and from the VOC.” After 1670s, due to the abrupt closure of major European markets and deflationary price levels, capital investments were mostly channelled into slave trade and sugar trade in Dutch empire. The Dutch economy became a ‘high-real wage’ and ‘high-tax’ economy, that discouraged investment in labour-intensive businesses. The textile and shipbuilding industry declined. Wikipedia commented on the balance of payments during the end of 18th century, “the Dutch balance of payments was in surplus most of the time, because a small deficit on the current account (because the propensity to import was high as a consequence of the skewed income distribution), was more than compensated by “invisibles”, like the income from shipping services, and the revenues from foreign investment. The latter amounted to 15 million guilders annually by 1770, and twice that by 1790. The consequence was a preview of the “Dutch disease” (strong currency discouraged exports)
Evolution of Slave capitalism	The Dutch Empire was initiated through acquisition of overseas trading posts by two Dutch chartered trading companies – Dutch East India Company and Dutch West India Company – and subsequently administered by the government authority (of the republic till 1795 and kingdom after 1815 CE). The trading posts of the vast global trade network were soon converted into expansive Dutch colonies. The Dutch followed Spain (and Portugal) in quest for colonial empire with the following possessions (excluding those which remained trading posts): Dutch East Indies (1603–1949) … modern Indonesia Dutch New Guinea (1872–1962) … Papua region of modern Indonesia Dutch Gold Coast (1612–1872) … Coastal region of modern Ghana New Netherlands (1614–1667, 1673–1674) … Regions of modern USA: New York, New Jersey, Delaware, Connecticut Dutch Guianas – Suriname (1667–1975) … modern Surinam Dutch Guianas – Essequibo, Demerara, Berbice (1616–1814) … modern Guyana Dutch Formosa (1624–1662, 1664–1668) … Southwest and northeast regions of modern Taiwan Dutch Brazil (1630–1654) … Northeastern region of modern Brazil Dutch Mauritius (1638–1710) … Present day Mauritius Dutch Ceylon (1640–1796) … South and northeastern regions (60%) of modern Sri Lanka Dutch Malacca (1641–1795, 1818–1825) … Malacca region of modern Malaysia Dutch Cape Colony (1652–1806)…Half of modern South Africa: Northern, Western, Eastern Cape As the Eighty Years’ War broke out in the 1560s between Habsburg dynasty (ruling over Spain, Portugal for 1580 to 1640, the Low Countries) and Protestant dominated Northern Dutch provinces, the Dutch Republic formed by Northern provinces not only conducted fierce attacks against Spanish and Portuguese colonies, trading posts, and shipping in both the eastern and western hemispheres, but with the financial and logistic help by the Jewish and converso bankers-merchants (who were expelled from the Iberian Peninsula) the Dutch aristocrats-oligarchs assiduously built a colonial empire across the world even before the Eighty Years’ War ended in 1648 with the Treaty of Westphalia! Commenting on the programme undertaken by the Dutch Republic to weave a trading-cum-colonial network, Wikipedia [link 🡪 https://en.wikipedia.org/wiki/Dutch_colonial_empire ] mentioned, “In the 1590s, the voorcompagnieën (‘pioneer companies’) emerged, which were given ‘express instructions to focus on trade and engage in violence only in self-defence. In 1594, the Compagnie van Verre (Company of Far Lands) was founded in Amsterdam, with the aim of sending two fleets to the spice islands of Maluku. The first fleet sailed in 1596 and returned in 1597 with a cargo of pepper, which more than covered the costs of the voyage. The second voyage (1598–1599), returned its investors a 400% profit. The success of these voyages led to the founding of a number of companies competing for the trade. The competition was counterproductive to the companies’ interests as it threatened to drive up the price of spices at their source in Indonesia whilst driving them down in Europe. Simultaneously, some Dutch company ships in the 1590s had been starting to raid and plunder Spanish and Portuguese vessels or their Asian allies in order to seize their spices instead, a phenomenon which had to be rationalised and theoretically justified as a legitimate act of war against enemy ships. … As a result of the problems caused by inter-company rivalry, the Dutch East India Company (Dutch: Verenigde Oost-Indische Compagnie, VOC) was founded in March 1602 (with a capital of 6.4 million guilders – author) as an amalgamation of 12 voorcompagnies. The charter awarded to the Company by the States-General granted it sole rights, for an initial period of 21 years, to Dutch trade and navigation east of the Cape of Good Hope and west of the Straits of Magellan. The directors of the company, the ‘Heeren XVII’, were given the legal authority to establish ‘fortresses and strongholds, to sign treaties, to enlist both an army and a navy, and to wage defensive war. The company itself was founded as a joint stock company, similarly to its English rival that had been founded two years earlier, the English East India Company. In the meantime, the States-General had already passed a resolution on 1 November 1603, authorising VOC ships “to damage the enemies and inflict harm on their persons, ships and goods by all means possible, so that they may with reputation not only continue their trade, but also expand it and make it grow”. Thus, VOC became the cornerstone for the Dutch colonial empire in Asia that would be built using violence and slavery. ‘The Cambridge History of Capitalism’ (volume I) wrote, “The VOC also exerted a continuous, high demand for manpower. During the seventeenth century the company operated a fleet of eighty to a hundred ships, many of which were stationed in Asian waters. Together with the men sent out to staff the numerous trading posts this required 3,000–4,000 men embarking annually in Dutch ports on company ships. Between 1602 and 1795 the VOC employed a total of 975,000 men. Though aggregate maritime demand for labour was thus very high, the sector was not labour intensive. The ton-per-man ratio of merchant ships and fishing boats was very high and continued to rise, with only twelve to fourteen hands on herring busses (especially developed ship for herring fishing, in which herring catch would be processed with salt while the ship sails on – author) and crews of similar size on merchant ships sailing to the Baltic around 1700.” Close on the heels of the Asian ventures, the Dutch West India Company (WIC) was set up in 1621 CE with a capital of 7.1 million guilders with a 25-year monopoly to remaining parts of the world that were beyond the ‘scope’ of VOC (i.e., both the west and east coasts of the Atlantic Ocean). WIC followed the same practices across the east and west coasts of the Atlantic Ocean as its predecessor VOC did in Asia and Africa. Jan Sytze Mosselaar wrote in ‘A Concise Financial History of Europe’ “The VOC was governed by the rich upper class in the city, the same men that governed the Bank of Amsterdam, which led to several conflicts of interest. Lending to the VOC began on a small and temporary basis, but this changed in 1682 when the company needed more money. The VOC never issued new shares after its IPO in 1602, and therefore largely depended on borrowing money from investors and from the Bank of Amsterdam, against the bank’s policy. This lending to the VOC took on a permanent character in 1682, when the Company was given a continuous credit facility of 1.7 million guilders. In 1698, this amount was increased to 3.2 million. In the 18th century, the bank became an important lifeline for the VOC, which embarked on a turbulent period for a number of reasons, primarily because of increased competition and incompetent management. By 1743, its loan had reached 7 million guilders, but the VOC was still able to repay its debt on time”. VOC was abolished in 1799, WIC was abolished in 1791, and colonial possessions were transferred to the Netherlands state. Hence, at the dawn of the 20th century, Indonesia in the eastern hemisphere and Surinam in the western hemisphere remained the main colonial territory of the Netherlands. Between 1830 and 1870 CE, annual transfer of (capital) money was on average 840 million guilder (equivalent to €8 billion in 2018) from the East Indies to Amsterdam which was equivalent to one-third of the annual budget of Dutch government. Before the Dutch colonial expansion petered out (primarily, because of lack of working age Dutch people who would be available for administration of far-flung colonies, vast trade network, for operation of shipping, and fighting endless battles, initially with the Spanish and Portuguese powers, and later on with the English and French powers) the Dutch colonial empire was as violent, deceitful, and greedy as other west European colonialists. The colonialist capitalist endeavours undertaken by the Dutch companies and oligarchy were: Slave trade Trading of spice and silk Plantation of sugarcane, cotton, indigo (using slaves) and shipment to Europe Forced cultivation of coffee, tea, tobacco, copra, rubber, sugar, cotton, opium, pepper, clove, and cinnamon, and shipment to Europe Unscrupulous piracy in ocean – capture of enemy fleet and expropriation of their goods and assets (in 1628, Piet Heyn captured the entire Spanish treasure fleet that contained large quantities of precious metals, and “made off with a vast fortune in precious metals and goods that enabled the Company two years later to pay its shareholders a cash dividend of 70%”)
Tax, public debt	‘The Cambridge History of Capitalism’ (volume I) noted about how tax and government annuity were treated in the Northern provinces, “Until the switch to excises as the main source of fiscal revenue at the end of the sixteenth century taxes were raised by allotting each community its share in the total burden, after which community officials spread that share over households using periodic detailed assessments of individual wealth. Holland’s public loans were similarly apportioned to communities and households until the 1550s, when officials discovered that investors would buy them willingly. Involvement in continuous warfare during the 17th century resulted in large public debt (external debt was negligible), which was held by a small group of bourgeois oligarchs (bankers and merchants). During the second half of the 17th century and 18th century this ‘rentier’ category of the bourgeois class would earn their interest from the Dutch state – Wikipedia noted, “the Dutch fiscal system now became yoked to the service of this debt in a way that served the interests of this small rentier class. No less than 70 percent of the annual revenue of the province of Holland (the main debtor) had to be dedicated to debt service. These revenues consisted mainly of regressive indirect taxes with the perverse effect that income was transferred from the poorer classes to the richer to the amount of 14 million guilders a year (approximately 7 percent of the GNP at the time). This debt burden rested preponderantly on the tax payers from Holland, as the finances of the provinces were separated in the confederal system of the Republic, and this unequal debt burden militated against other provinces agreeing to fiscal reform. Fiscal reform was also opposed by the rentiers that had a vested interest in retaining their interest income, but not in paying (direct) income taxes to pay for the debt service.” [link 🡪 https://en.wikipedia.org/wiki/Economic_history_of_the_Netherlands_(1500%E2%80%931815)]. As a result, the bourgeois merchants, bankers (Judaic and converso Jew, Protestant Dutch) accumulated a colossal amount of (money) capital with which they transformed Amsterdam into a global financial and investment centre. Interestingly, the most important countries which took loans from them were the UK, and the USA (as their governments needed investments for infrastructure developments, and war). The Amsterdam and London stock exchanges were closely aligned who would quote each other’s (listed) stocks and bonds.
The labour market	The Northern provinces experienced a pattern of employment which refuses to fade into history even at the end of the 20th century across many parts of the planet – self-employment and wage-work, most of the times overlap or even if there would be a thin line of separation, people keep on switching across the line frequently because neither would generate sufficient income through out a year. During the late medieval and early modern era most of the Netherland people were self-employed – as farmers, artisans, or unskilled workers working at least some part of their time. To make up the shortfall in income, they would supplement that with wage labour or ‘work swapped for one thing or another: payments in kind or in services, such as access to a piece of land, or the use of a cart, a boat’. ‘The Cambridge History of Capitalism’ (volume I) noted about the peasants, “peasants in late medieval Holland also combined subsistence farming with waged work, but they had a much stronger economic position because the regional labour market offered them a range of options in several sectors, from primary production in fishing, dairy farming, and peat digging, via secondary-sector activities in cloth production and brick-making, to the service sector of shipping and even the public sector of digging and diking. Moreover, the markets for the goods and services produced by peasants were not under urban control…. “During the sixteenth century wage labour had risen to an estimated third of all labour performed in the Low Countries, but its incidence still varied greatly, between peaks of more than 50 percent in Holland and the Guelders river area to at most 25 percent in inland Flanders (van Bavel 2003b). This disparity was largely the result of the way in which property rights to land evolved. Peasants’ holdings fragmented to such an extent that households soon possessed far more labour than their farmsteads required, pushing individual members into other employment for part or most of their time. Over time the phenomenon of peasants working part time in other sectors disappeared. It characterized the Holland economy until the late sixteenth century, but continued in inland Flanders for another two centuries…”. This movement from ‘peasant by-employment’ to full ‘wage labour’ occurred during the 16th century when very large-scale farms primarily employed landless labourers and augmented, as per requirements, by deploying seasonal migrant labourers. The urban regions (with no agriculture land) in the Northern provinces preferred self-employment. ‘The Cambridge History of Capitalism’ (volume I) commented, “During the first half of the seventeenth century, for instance, Amsterdam numbered some 8,600 self-employed merchants, retailers, artisans, and other independent producers of goods and services out of a population of 120,000. If we take each of these entrepreneurs as heading a household of four people, self-employment was a major source of income for at least a quarter of all households in Amsterdam. […] Until the late eighteenth or, in many areas, even the mid nineteenth century the world of work consisted overwhelmingly of small businesses, typically consisting of a self-employed owner working with two or three employees plus an apprentice or so. Amsterdam bakers seldom had more than two or three extra hands. Even the largest and most capital-intensive Holland industries such as brewing and sugar refining seldom counted more than ten workers. In some sectors, notably textile production, arms manufacturing, and clock-making, subcontracting could create integrated supply chains with large numbers of workers, but these were formally self-employed, if often totally dependent on an entrepreneur.”
Presence of ‘capitalist’ institutions, banking and practice of ‘capitalist’ system	The following milestones of the capitalist system were achieved by the Southern and Northern provinces during this period: 1495 First mention of ‘de Beurs’ in Brugge 1531 New Exchange opens in Antwerp 1602 First stock market IPO (Dutch East India Company – VOC) in Amsterdam 1609 First short squeeze and stock market regulation in Amsterdam 1609 Foundation of Amsterdam Exchange Bank (Bank of Amsterdam) in Amsterdam 1688 First book on stock markets published in Amsterdam 1763 European banking crisis in Amsterdam 1774 First investment fund founded in Amsterdam by stockbroker Abraham van Ketwich ‘The Cambridge History of Capitalism’ (vol. I) noted on the commercial institutions, “It was this interaction between local markets and foreign merchants that stimulated the spread of commercial institutions such as double-entry bookkeeping and maritime insurance, instruments such as the bill of exchange, public and private bonds, and money market techniques such as bill discounting, securities trading, repos, forwards, futures, and derivatives.” Commenting on liability of shareholders, ‘The Cambridge History of Capitalism’ (vol. I) commented, “(VOC – author) It marked a step up from the preceding special-purpose partnership in having a clear separation between ownership and management, transferable shares, and limited liability for shareholders. Corporations with such characteristics only became the norm during the nineteenth century, so historians have hailed the VOC as a remarkable achievement of Dutch capitalism. […] Admittedly, the VOC did acquire two other defining characteristics of modern corporations, permanence and limited liability for managers, […] In 1623 the directors, emboldened by years of getting their way, unilaterally discarded their unlimited liability for debt simply by dropping the clause.” ‘The Cambridge History of Capitalism’ (volume I) mentioned a contribution of VOC in creating a private IOU system catering to the needs of the small private customers, “In 1608 its directors devised a system of transferable IOUs with which sailors and soldiers could obtain an advance on future pay so as to either buy food and lodging while awaiting embarkation, or to provide for their family during the tour of duty. […] By at least 1670 the kind of intermediation on which the VOC’s IOUs depended had also spawned a private IOU system in Amsterdam, which the city council sanctioned that year by defining a standard format and giving legal preference in case of default to claims on officially stamped paper. […] The two types of IOU were important innovations because they extended the market’s reach further down the social ladder and as such, they underline that Amsterdam possessed a highly articulated market meeting a wide variety of needs, ranging from the high volumes of debt raised by the government and the colonial trading companies to small-scale private loans.” ‘The Cambridge History of Capitalism’ (volume I) noted on widespread use of life annuity, “In 1228–1229 Tournai issued what are likely to have been the first public life annuities, perpetual annuities following close behind (Tracy 2003). Some twenty years later the practice had reached Ghent, by 1300 it was engrained in both Holland and Brabant. Indeed, towns in the former county had already become so familiar with annuities that they clubbed together to underwrite annuities on behalf of their overlord, thereby laying the foundations for the province’s later famously capacious credit. Such paper possessed a fair degree of security for creditors because the law of reprisal allowed them to arrest any burghers of a defaulting town for arrears. As a result, annuities were often held at a surprising distance from the issuing town.” Merchants used to settle claims and debts with each other or with moneychangers / bankers using bills of exchange, IOUs, (they avoided cash dealing as much as possible, that being difficult to handle). Since mid-1530s bills of exchange were even discounted (i.e., traded with a third party). At the end of the 1530s, Emperor Charles V decreed that the Antwerp rules on commercial papers/documents are legally binding across the Low Countries ‘The Cambridge History of Capitalism’ (volume I) noted elsewhere about the Amsterdam Exchange Bank, ”Modelled on a famous Venetian example and set up in 1609, seven years after the launch of the VOC and two years before the opening of the city’s first commodity exchange, the bank initially served three purposes: first, defending the guilder against the inferior coins flooding in; second, providing merchants with a stable means of payment in the form of banco money; and third, holding a stock of quality coins available for merchants having to pay cash overseas. […] By 1650 the Wisselbank had succeeded in stabilizing the guilder sufficiently to render that part of its function redundant to merchants, so deposits stagnated. Casting around for new ways to attract business, the directors came up with a new type of instrument, the receipts or tradable depositary receipt for bullion deposited with the Wisselbank. In essence cheap options on gold and silver, the receipts boosted deposits and transformed operations by handing directors a tool for macroeconomic policies by levering the money supply. Consequently, though conservative in the sense of not providing credit or issuing notes, the bank was highly modern in pioneering functions that most central banks adopted only during the late nineteenth century.” To describe the role of family networks, Joop de Jong commented in the article ‘The Dutch Golden Age and Globalization: History and Heritage, Legacies and Contestations’ published by Macalester International, volume 27 in December 2011, “The creative agents of economic change often congregated in cities like Amsterdam; they served as “information exchanges” for the city network, which was at the centre of the world-economy. Almost all information exchanges went through the predominantly informal networks of families and firms. Reliable personal networks were essential for local and regional trade—the bulk of all Dutch trade—as well as for long-distance and overseas trading, just as for almost all other economic, social, cultural, and political activities.”
Presence of ‘capitalist’ class with concentration of wealth as capital (money and property); Non-Jewish family-owned business houses	During the medieval era in Northern and Southern provinces, several powerful commercial and banking families emerged who played a crucial role in shaping the economic and political landscapes of their respective cities: 1. The Fugger family, originally from Augsburg, Germany, had a significant presence in the Low Countries during the 16th century. They were prominent bankers and financiers, involved in international trade and mining operations. The Fuggers played a vital role in financing the Habsburg Empire and had extensive business networks throughout Europe. 2. The De Medici family, originally from Florence, Italy, had branches in the Low Countries during the 16th century. They were renowned bankers and merchants, playing a central role in European trade and finance. The De Medicis had significant influence in the banking sector and provided financial support to various rulers and governments. 3. The Bourseel family, originally from Antwerp, was involved in international trade and banking during the 16th century. They had extensive business connections across Europe and played a vital role in the economic prosperity of the region. 4. The De Geer family, originally from Utrecht, rose to prominence during the 17th century. They were involved in various industries, including iron and copper mining, metallurgy, and textile manufacturing. The De Geers had significant influence in the industrial and commercial sectors and played a crucial role in the development of the Dutch economy. 5. The Van Eeghen family, based in Amsterdam, was prominent in banking, trading, and international commerce during the 17th and 18th centuries. They played a significant role in the expansion of Dutch trade networks and had extensive business connections globally. 6. The De Wit family, based in Amsterdam, were influential merchants and bankers during the 16th and 17th century. They were involved in various trading activities, including textiles, spices, and maritime trade. The De Wit family played a crucial role in the economic growth of Amsterdam. 7. The Hope family, originally from Rotterdam, was involved in international trade and finance during the 18th century. They were prominent in the shipping industry and had extensive connections with merchants and traders worldwide.
Presence of influential Jewish families – Sephardim, Ashkenazim – who migrated from west Asia, north Africa, east Europe	Sephardim Jews from Apennine and Iberian peninsulas and Ashkenazim Jews from Germany and east Europe made a beeline for the Low Countries, and Amsterdam, in particular since end of 15th century for next two centuries. Their influence on the political economy of the Netherlands (and, England) was at peak during William III of the House of Orange. Jewish Encyclopaedia commented [link 🡪 https://www.jewishencyclopedia.com/articles/11450-netherlands] that, “(In 1672, when William III was re-elected stadholder) At this epoch, too, the Jewish partiality for the house of Orange displeased the Dutch. But with William III. many ameliorations were affected. The prince praised the attachment to his family shown by his subjects of Jewish faith; he commended their fairness in commerce, their religious constancy, and their industry. He clearly manifested his sentiments, and his influence affected even the Jews in South Netherlands, where the newly appointed governor, De Villa Hermosa, accorded them many privileges. […] William III employed Jews in his negotiations with foreign kings (see England), especially members of the Belmonte family, Moses Machado (who rendered important services to the army in Flanders) Isaac Lopez Suasso (who lent two million gulden to William III for his descent upon England), David Bueno de Mesquita (general agent of the Prince of Brandenburg), Moses Curiel (at whose house William stayed three days when he visited the Portuguese synagogue at Amsterdam in 1695). Jews (in the Netherlands – author) were very rich at this time; many among them lived in palaces more magnificent than those of princes.” During this era influential Jewish merchant and banking families were active in the Low Countries in general, and in the Netherlands in particular, and they had a stellar role in all capitalist ventures: 1. The Mendes da Costa family, originally from Portugal, settled in Amsterdam during the 17th century. They were engaged in various financial activities, including banking and international trade. The family played a prominent role in the Amsterdam Stock Exchange and had extensive commercial networks across Europe and the Americas. 2. The Mocatta family, originally from Portugal and of Sephardic Jewish descent, established themselves as prominent financiers and bullion merchants in Amsterdam during the 17th century. They specialized in international trade, particularly in precious metals, and had connections with merchants and bankers across Europe. 3. The Teixeira family, also of Sephardic Jewish origin, had a prominent presence in Amsterdam during the 17th and 18th centuries. They were involved in various financial activities, including banking, trade, and diamond cutting. The family had extensive connections beyond Europe. 4. The Bueno de Mesquita family, originally from Portugal, settled in Amsterdam during the 17th century. They were involved in banking, international trade, and diamond cutting. The family’s financial and commercial activities spanned across Europe, the Americas, and Asia. 5. The Levy family, of Ashkenazi Jewish descent, was involved in banking and international trade in the Netherlands during the 18th century. They played a crucial role in financing and facilitating trade between Europe and the Dutch colonies in the Americas 5. The D’Ancona family, originally from Italy, migrated to the Low Countries and settled in Amsterdam during the 16th and 17th centuries. They were involved in banking, trade, and finance. The family played a prominent role in the economic and financial sectors of the region. 6. The Lopes Suasso family, originally from Portugal, migrated to the Low Countries and settled in Amsterdam during the 17th century. They were involved in banking, trade, and finance, and played a significant role in the financial and commercial expansion of the Dutch Republic.
Political System, Society & State
State provinces as a collection of city councils – transformed into empire-state, with sizeable population and territory under its jurisdiction	The Austrian House of Habsburg inherited the fief of the former Burgundian Netherlands (comprising of norther and southern regions) from the extinct House of Valois-Burgundy (with death of Mary of Burgundy in 1482 CE). The Habsburg Netherlands (17 provinces) became the Spanish Habsburg Netherlands upon the abdication of Emperor Charles V in 1556 CE. The Northern provinces (the Union of Utrecht: Groningen, Frisia, Overijssel, Guelders, Utrecht, Zeeland, and Holland) separated to form the United Provinces of the Netherlands (commonly called as the Dutch Republic) in 1579 CE, while the remaining southern part stayed under Spanish rule until the War of the Spanish Succession. The Dutch Republic was small in area and population – had about 1.5 million inhabitants in 1600, and about 1.9 million by 1700 (in 1600, population of France, UK, Iberian Peninsula was 18 million, 7 million, and 11 million respectively). The economic policy rested on the city councils run by of elders and magistracy. The councils selected twenty to forty councillors from among ‘the wisest, most respectable and richest citizens’ who would be appointed for life. The bourgeois oligarchy left no stone unturned to challenge the mighty Spanish empire in order to wrest control of international trade network, and to build a colonial empire. Using its trading companies, VOC and WIC, it ruled the colonial empire. Major conflicts where it was involved, were: Eighty Years’ War (until 1648 CE) against Spanish empire Dutch–Portuguese War (1602–1663) Four Anglo-Dutch Wars (the first against the Commonwealth of England during 1652–1654, the second during 1665–1667 and third during 1672–1674 against the Kingdom of England, and the fourth against the Kingdom of Great Britain during 1780–1784) Swedish-Dutch War (1658–1660) Franco-Dutch War (1672–1678) War of the Grand Alliance (1688–1697) War of the Spanish Succession (1702–1713) War of Austrian Succession (1744–1748) War of the First Coalition (1792–1795) against the Kingdom of France. The Dutch Republic that existed between 1579 and 1795 CE was, in true sense, the first embodiment of a modern era state which owed its success to the veritable combination of money (invested by the Judaic and converso Jew, and Protestant Dutch merchants, bankers), leadership (of bourgeois oligarchy and feudal aristocracy), greed (for wealth), and exceptionalism (of ‘Old Testament’-type ideology) – even if Spanish and Portuguese colonialism coupled with capitalism already blazed its trail, in both the cases, the Catholic aristocrats also participated in that journey. Wikipedia noted [link 🡪 https://en.wikipedia.org/wiki/Dutch_Republic], “The republic was a confederation of provinces each with a high degree of independence from the federal assembly, known as the States General. Each province was led by an official known as the stadtholder (Dutch for ‘steward’); this office was nominally open to anyone, but most provinces appointed a member of the House of Orange. The position gradually became hereditary, with the Prince of Orange simultaneously holding most or all of the stadtholderships, making him effectively the head of state. […] The Republicans (who favoured a strong State General– author) forced two Stadtholderless Periods, 1650–1672 and 1702–1747, with the latter causing national instability”. The struggle between the royalists (who favoured hereditary rule by the House of Orange aristocracy) and the republicans (who favoured rule by bourgeois oligarchy) continued. During the republican revolutions in 1783–1787 the republican forces occupied several Dutch cities. Initially on the defence, the Orangist forces retook those regions in 1787. The republican forces fled to France and mounted a fresh attack alongside the army of the French Republic between 1793 and 1795 – they overthrew stadtholder and declared the Batavian Republic which was in existence during the period 1795 to 1806 CE. However, the Napoleonic French Empire dissolved the Batavian Republic and created the Napoleonic Kingdom of Holland (1806–1810). The Netherlands regained independence from France in 1813, in 1815, it rejoined with the Austrian Southern provinces to become the United Kingdom of the Netherlands with Orange stadtholder as the king. During the entire period, however, the economic and political power was primarily controlled by different sections of the bourgeois aristocrat oligarchy.
Major inward migration of Protestant French, Southerners and Judaic, converso Jews	Lucassen and Penninx in their book on the history of immigration into the Netherlands mentioned five categories of immigrants who migrated due to religious and/or political reasons: (i) about 100,000 immigrants from the southern regions (Belgium, Luxemburg, French Pas-de-Calais) came to northern region (Dutch Republic) during the Spanish Reconquest in the last quarter of the 16th century. (Some also left for England and the Protestant German states); (ii) about 200,000 French Protestants (Huguenots) fled during the last two decades of the 17th century, out of which 60,000 migrated to the Netherlands; (iii) between 1,000 to 2,000 Iberian Jews (both Judaic and converso Sephardim) arrived in the Dutch Republic during the period 1590 to 1620 CE looking for asylum; (iv) some 10,000 Jews from Germany and east Europe sought refuge in the Netherlands between 1635 and 1750 CE; (v) many other small groups of Protestant religious refugees from different parts of Europe migrated to the Dutch Republic to find more religious freedom and better professional opportunities. As per Jewish Encyclopaedia [link 🡪 https://www.jewishencyclopedia.com/articles/11450-netherlands] the number of Jews in Amsterdam was 22,000 in 1780 CE and in the other cities, 9,000. And, in 1830 CE there were 21,998 Jews in a total of 202,175. It is appraised that the Dutch Republic became the first immigration melting pot of the modern era three centuries before the USA (becoming the land of opportunity between 1900 to 1925 CE)! Peoples of the Dutch Republic who were born abroad constituted around 8 – 10% of the total population between 1590 and 1670 CE. Many of them were skilled craftsmen, traders, bankers, industrialists, and were well connected across the oligarchy of different kingdoms of Europe.
Society, culture and religion	The society in the Dutch Republic was under continuous churn during the 16th, 17th, and 18th century as more and more outside communities took refuge, as more and more peoples got attracted towards some form of protestant ‘ideology’, and as more and more foreign regions were getting converted into colonial empire of the Dutch land. The Calvinist Protestants grew from a minority at the end of 16th century to near majority at the end of 17th century at the cost of other protestant groups. And, while Catholicism was accepted, it was put under severe restrictions. Joop de Jong wrote in the article ‘The Dutch Golden Age and Globalization: History and Heritage, Legacies and Contestations’, “The treaty of the Union of Utrecht granted individual freedom of conscience in religious matters, but not the freedom to actively practice, for instance, Catholicism. An important distinction was made between individual and collective, and between private and public. Catholics formed about 30 percent of the population of the towns in the province of Holland and more than 40 percent of the population of the Republic as a whole. […] Notwithstanding the fact that Catholics were excluded from city government and officially could not practice their religion, they were never limited in their civic rights. They had good reason to trust the protection of the rule of law, something that cannot be said of religious dissenters living in other seventeenth-century countries, where, as in France and England, religious diversity had led to civil war.” A fascinating chapter of the Dutch society and culture pertains to fine arts. Painting became a sort of ‘industry sector’ with amazing creativity and specialization – Joop de Jong noted in the same article, “Westermann, for example, mentions landscapes, cityscapes, animal paintings, still life, paintings of everyday life, and portraits as popular genres. Many pictures show economic activities, markets, ships, fleets, harbours, naval battles, and seascapes. Marine painters were highly rewarded.” Like other consumer goods, artworks had a market among the elites, aristocrats, and the middle-class. Going through the list of distinguished Dutch painters of 16th, 17th, and 18th century mentioned in Wikipedia, [link 🡪 https://en.wikipedia.org/wiki/List_of_Dutch_painters] one wonders if the Netherlands society attempted to create a mini-Renaissance kind of cultural movement. Probably the vagaries of capitalist market didn’t allow many more Vermeers, Hals, and Rembrandts! Joop de Jong noted, “In the eyes of John Merriman, Dutch paintings of the Golden Age reflect “not only its precocious commercial wealth, but also its toleration and openness to secular styles and subject matter. […] According to Mariët Westermann, Director of the Institute of Fine Arts of New York University, Dutch artists were more concerned with this verisimilitude than their colleagues in “almost any other western culture.”
Indigenous civilizations impacted in South Africa in Africa, Indonesia in Asia, Surinam in South America	Like the Spanish and Portuguese, the Dutch colonial history is littered with blood. The population and society in all three regions where Dutch empire established its permanent base (one in present day South Africa was ceded to the British colonial empire in the last years of 1790s, while the other two – present day Indonesia and Surinam remained colonies even after WW II) underwent permanent changes in demography and culture. The Cape (much of current South Africa) came under VOC rule from 1652 to 1795 CE. Aboriginal population was mercilessly slaughtered if the Dutch colonial lords spotted any type of resistance. Except complete submission to the colonial authority as ‘slaves’, black Africans didn’t have any other choice. Even if the control passed on to the British Empire, the Dutch population remained the bedrock of the country’s commercial agricultural sector till 1990s. Metamorphosis of the Dutch colonialist settlers in South Africa into white ‘Afrikaner’ ethnic group is in itself a fascinating tale. Along with the English settlers, these Dutch settlers controlled the South African politics and economy till the apartheid system of governance was repealed through a new constitution in 1994 CE. The colonial wars by VOC in the Dutch East Indies exacted a heavy toll on the local ethnic population – ‘3 to 4 million deaths including both direct war casualties and indirect victims of war’ is estimated. Among the local population, a large section were slaves who were either skilled craftsmen or house servants and concubines. Punishments for slaves were extremely harsh and cruel. The cultivation system of Indonesian archipelago was modified after the Dutch government took over the reign – local Indonesian farmers had to use 20% of their farmland for the cultivation of cash crops like coffee and sugar that will be exported by the authority (net profit is estimated at about 4% of the then GDP). Wikipedia mentioned [link 🡪 https://en.wikipedia.org/wiki/Economic_history_of_Indonesia] “Farmers were often forced to either use more than 20% of their farmland, or the most fertile land, for cultivation of cash crops. The system led to an increase in famine and disease among Javanese peasants in the 1840s. According to one estimate, the mortality rates increased by as much as 30% during this period.” Slavery didn’t end with the end of the VOC. Though the forced cultivation system was abolished in 1870 CE, larger plantations were built (similar to the Spanish slave capitalism) using over 1 million local, Chinese, Malay, and Indian slaves (called as ‘coolie’) during the 18th to 20th century. The outsiders were transported to Sumatra. The only difference between the African slaves and these Asian slaves were that the later had to accept such abominable life because of utter lack of employment in their own villages. Since 1854 CE, newly introduced Dutch law separated the citizens into different classes: Europeans as the top of the pyramid, the foreign Orientals as the intermediate class, and the native Indonesians as the lowest class. Similar to the Indian historical caste system, the Dutch-imposed caste system broke the social structure of native Indonesian society. The Dutch colony of Suriname depended upon slave peoples supplied by the Dutch West India Company from its trading posts in West Africa, to produce crops like sugar, cotton, indigo, and coffee. were the main goods exported from the colony to the Netherlands. Slave trade, the epitome of human greed was abolished in the Netherlands in June 1814, as a result of which many plantations went bankrupt (without supply of slaves, operating cost of plantations were quite high). After July 1863 (when slavery was abolished) indentured labourers (coolie) from British India and Dutch East Indies were contracted to work on plantations in Surinam in order to control costs. Later on, because of this, the social architecture of Surinam was transformed into a multi-ethnic mixed society.

What were the political and economic circumstances in The Netherlands during 1550 to 1800 CE that were unfavourable for industrial capitalism (if compared with mid-18th century England)?

1) The Low Countries were a politically fragmented region – several provinces within which a number of cities with their separate governing and legal system would vie for political prominence and economic gain. The Dutch part i.e. the Northern Provinces which consisted of seven provinces, because of such splits (i) lacked a single centralized governing authority whose writ would run across the entire territory, (ii) lacked a uniform economic policy that would create a single market (for produces and labour) across the territory, (iii) lacked of a uniform legal framework that would ensure ownership of means of production across the peninsula and beyond across generations irrespective of the owners’ social identity. As a result of such fragmented landscape, the Northern Provinces (Dutch Republic) was at a disadvantage within Europe – small size of the internal market as well as draining of resources in conflicts over the control of overseas trading network and colonies. Having said that, it needs to recorded that the Dutch Republic for a century experienced tremendous success as a colonial capitalist power which is called as “golden era” – the Dutch land showcased proto-industrial capitalism for the first time.

2) In absence of a unified state, a central bank didn’t get developed in the Dutch Republic (even if Amsterdam hosted the first proto-central bank). As a result, there was no coordination between monetary and taxation policies across multiple state authorities. Neither the ‘multiplier effect’ of the fractional reserve banking system could be put to use by the bankers and the state authorities for providing credit to the merchants, and guilds. Even if Amsterdam became one of the global financial centres, complete transformation of the credit system didn’t take place;

3) The Dutch Republic was involved in colonial expansion of territory and commerce in the eastern and western hemisphere, but lack of manpower and extreme competition from the English and French colonialists forced the Dutch Republic to restrain their colonial initiatives in mid-way except in Indonesia and Surinam. Hence, even its merchants and bankers accumulated substantial money capital, but they lacked the zeal for risky investments in industrial products that would call for large number of skilled manpower and overseas market (instead, they would act as investor to different governments in Europe and America continents);

4) The Northern (and Southern) provinces had extremely limited natural resources. The scarcity of resources, such as iron ore, minerals, and coal made the overall economic environment somewhat immune to a large-scale industrialization. Some of the technological advancements like wind-driven sawmill, sugar refining, paper making etc. could be noted, however a strong guilder (currency) discouraged exports, and hence further industrialization.

As a result of the above-mentioned factors, even though the Dutch Republic had a strong economy based on mercantile capitalism and slave capitalism (that co-existed with a combination of agricultural capitalism and feudalist mode of production in agriculture), a conducive environment for further transformation into full-scale industrial capitalism (as blossomed in 18th to 20th century west Europe) was absent.

2.2.4. Society, Politics, & Economy in ENGLAND/THE U.K.: 1200 CE to 1950 CE

Politics: The history of the United Kingdom comprising the territories of England, Scotland, and Northern Ireland is perhaps the most widely read chapter of the history of humankind. During the second millennium CE, the history of British Isles never failed to take seemingly impossible turns – the conquest by Norman warlords, feudalism and the enclosure movement, the failed attempt to bring France within the same empire, break from Papal Catholicism, the capture of power by the Protestant oligarchy, establishing largest colonial empire, industrial revolution, participation inn WW I and WW II. Apparently, only Shakespeare could do justice to the history of British Isles through his immortal literature.

• 1200 to 1500 CE: Between 1066 and 1487 CE England, Wales, and Scotland became the geopolitical platform for continuous warfare for claiming the crown during which ALL claimants had one thing in common – they claimed hereditary lineage to William the Conqueror who led the Norman Conquest. The invading Norman aristocracy and local Anglo-Saxon aristocracy vied for supremacy in the then feudal system. In 1215 CE, King John signed the Magna Carta which brought the royal authority under the rule of law. In European landmass, the Magna Carta was a precursor to constitutional developments. The Normans (being a French sub-ethnic group) fervently believed that they have a right to lead a combined French-English-Scottish empire (after all, William the Conqueror added ‘King of England’ title to his existing title ‘Duke of Normandy’ as a vassal to the king of France) – the Hundred Years’ War was fought between the kingdoms of England and France when Norman kings of England tried to bring France within the empire. There were three distinct phases of the war: (a) the Edwardian War (1337–1360 CE), (b) the Caroline War (1369–1389 CE), and (c) the Lancastrian War (1415–1453 CE). Though the English side initially prevailed, finally, the French forces retained control over France.

The war created a strong revulsion among the English people about French culture and language (which had served as the language of the Norman ruling classes). English became the official language in 1362 CE. It is estimated that, “France lost half its population during the Hundred Years’ War, with Normandy reduced by three-quarters and Paris by two-thirds. During the same period, England’s population fell by 20 to 33 per cent.” An indirect outcome of the Hundred Years’ War was the Wars of the Roses (1455–1487 CE), a series of civil wars fought over the English throne between two rival cadet branches of the House of Plantagenet (Lancaster and York). The last male line of the house of Lancaster died in 1471 CE, and extinction of the last male line of the house of York happened in 1483 CE.

• 1500 to 1600 CE: The Tudors were very influential in Welsh and (later) English politics. A member from this family ascended the English throne and ruled from 1485 to 1603 CE. It was a refreshing change of political environment in the society of England soaked in bloody conflicts for power. A politically arranged marriage united the Houses of Tudor and York – Henry VII, the Tudor inherited the Yorkist claim as well. One may not completely agree with the argument of historian John Guy (‘Tudor England’ published by Oxford University Press in 1988 CE) that, “England was economically healthier, more expansive, and more optimistic under the Tudors” than at any time since the Roman occupation.”, but facts and figures definitely point out towards a major transformation in the Tudor era. Henry VII is credited with many administrative and economic initiatives that stabilized the society and economy of England. His support toward England’s wool industry and his standoff with the Low Countries benefited the English economy immensely. Henry VII introduced new taxes which opened up new avenues for government revenues – however, abuses by officials were widespread. Even though Normans occupied conquered large swathes of Ireland, before Tudors came to power, Ireland effectively was independent. Tudors restored authority over Ireland through armed invasions.

Henry VIII’s break with the Catholic Church in the early 16th century and the establishment of the Church of England (with protestant-orientation) marked a significant turning point. He expanded royal power through changes in existing constitution and was a proponent of ‘the divine right of kings’ in opposition to papal supremacy over spiritual matters. Acting against the Catholic church, he dissolved the monasteries and confiscated Church lands and about 20% of England’s landed wealth was transferred to new aristocrat hands (in order to create ‘a landed gentry beholden to the crown’). He converted the money that was formerly paid to Rome into royal revenue. Money going out from England to the Church at Rome was converted into state revenue. However, Henry VIII mismanaged the state finances through wars and extravaganza thereby exhausting the surplus he inherited from his father. Elizabeth, I ruled from 1558 to 1603 CE as the last Tudor; historians call it as a renaissance that simultaneously inspired national pride and international expansion. She steered the kingdom towards predominantly Protestant faith.

• 1600 to 1700 CE: When Elizabeth I died, the Stuart dynasty succeeded the Tudors, and ruled from 1603 to 1714 CE. King of Scotland, James VI (Stuart dynasty) became king of England and Ireland as James I in 1603 CE. Thus, the Scottish colonizers replaced the English invaders in Ireland – many of Irish migrated to the new American colonies during the Stuart period. King Charles I couldn’t work with Parliament and dissolved it in 1629 CE. For raising revenue, he devised ingenious methods which were very unpopular among the aristocracy. Internal discord turned into civil war: (i) the Parliamentarians (Roundheads) defeated the Royalists (Cavaliers) in the First English Civil War (1642–1645 CE), (ii) the Second English Civil War was fought during the period 1648–1649 CE, Charles I lost and was executed, and (iii) during the Third English Civil War (1649–1651 CE), the Parliamentarians won over Charles II. Oliver Cromwell effectively ruled England (as an authoritarian leader of a republic) from 1649 to 1658 till he died. Due to incapability of Oliver Cromwell’s son Richard, monarchy was restored through Charles II who ruled from 1660 until his death in 1685 CE. The extreme form of Reformation movement in England, Puritanism was out of favour (as a moderate Church of England established itself), and strong hedonism was promoted by the royal court. Charles II’s brother James II became the new king of England, but was overthrown in 1688-1689 CE in the so-called ‘Glorious Revolution’ when Catholic James II was ousted by his Protestant daughter Mary II and her Dutch husband William III. William III’s reign was succeeded by Anne who, as the last Stuart ruler died in 1714 CE.

We have already noted in the previous sub-section that the period 1550-1650 CE was the most remarkable era for Dutch colonialism and capitalism – however, the weaknesses of the Netherlands with too small landmass and too little population as the base station for colonialist and capitalist ventures were glaring. The captains of trade, and commerce – the oligarchy comprising of bankers, merchants, aristocrats – needed a much larger space and more populous society as a springboard for further expansion of the colonialist-capitalist empire spanned across the globe. England (and Scotland) being Protestant (in sharp contrast with Kingdom of France and Spanish Empire), by 1640 CE the Jewish and Dutch oligarchy of the Netherlands chose England as the next base camp for launching further colonialist capitalist ventures – they were in complete sync with the relatively smaller congregation of Jewish diaspora in England. Till then the Jewish merchants and bankers in England could neither establish a strong bonding with the English and Scottish merchants and bankers nor they could become an influential component of the England and Scottland oligarchy. English and Scottish monarchy and their support base among ‘monarchist’ aristocracy were neither conducive for completely decimating feudalist royalist culture nor helpful for establishing a homeland in England for the Jewish diaspora. Two personalities – Oliver Cromwell (1599 – 1658 CE), originally an English statesman and soldier, and William of Orange (1650 – 1702 CE), Stadtholder of Holland, Zeeland, Utrecht, Guelders from the 1670s – separated by time and space but unified by their ideology, outlook, and capability (affinity towards Protestant ideology, loathe for Catholicism, military leadership, strong advocacy for trade, commerce, and industry, and warm friendship with Jewish bankers and merchants) played stellar role to realize the objectives of the Jewish bankers and merchants (of the Netherlands and England). Wikipedia noted, “Cromwell was aware of the contribution that Jewish financiers made to the economic success of Holland, now England’s leading commercial rival. It was this that led to his encouraging Jews to return to England (Jews already started landing in England from Portugal and Spain since 1490s – author). […] resettlement of the Jews in England was an informal arrangement during the Commonwealth of England in the mid-1650s, which allowed Jews to practice their faith openly. It forms a prominent part of the history of the Jews in England. It happened directly after two events. Firstly, a prominent rabbi Menasseh ben Israel came to the country from the Netherlands to make the case for Jewish resettlement, and secondly a Spanish New Christian (a supposedly converted Jew, who secretly practiced his religion) merchant Antonio Robles requested that he be classified as a Jew rather than Spaniard during the war between England and Spain.” Oliver Cromwell bulldozed the Stuart dynasty by the mid-17th century but when James II became the king of England Scotland and Ireland in 1685, Cromwell’s achievements were almost rolled back. It was William of Orange who with the help of Jewish oligarchy (Isaac Lopez Suasso lent two million gulden to William III for his invasion of England in 1688 CE), re-established the protestant hold over British Isles and, more importantly created a new oligarchy where Jewish bankers and merchants were influential and enthusiastic party. Soon the new oligarchy of England and Scotland would resume their colonialist capitalist missions across the world with full vigour.

• 1700 to 1900 CE: At 1714 CE king George I from the House of Brunswick-Lüneburg, Hanover line took the charge of the UK constitutional monarchy, and the Hanover line lasted till 1901 CE when queen Victoria died. Thereafter Edward VII (son of Victoria and Albert from the House of Saxe-Coburg and Gotha) inherited the throne representing the Saxe-Coburg and Gotha dynasty. In 1707 CE, through the ‘Treaty of Union’ the kingdoms of England and Scotland, a new unitary state was created – Great Britain. The ‘Act of Union’ in 1800 CE added the Kingdom of Ireland to create the United Kingdom of Great Britain and Ireland (widely known as the United Kingdom).

The British Empire began to take shape during the early 17th century, with the English settlement of North America and the Caribbean islands, and establishment of East India Company as a joint-stock company for trading in Asia (as the Dutch experience showed, it was the license to invade, and annex colonies across the world). This period of ‘First British Empire’ that peaked in 1763 CE with the win in the ‘Seven Years’ War’ ended with the American (the USA) independence. ‘Second British Empire’ was built occupying very large landmass like Australia continent and the Indian subcontinent. In 1770 CE, James Cook claimed the Australia continent for the UK, and in 1757 CE East India Company established its rule over the eastern region of the Indian subcontinent. In 1867 CE, the UK united North American colonies as Canada. The second half of the 19th century witnessed a major expansion of the UK’s colonial empire in Asia and Africa.

The Industrial Revolution led to increased urbanization and demands for political representation became widespread. The political events were the most remarkable aspect of the 19th century UK – the Reform Acts expanded voting rights, slavery was abolished, factory norms favouring workers were declared. While the UK became the leader of core countries (of the Capitalist World Order) with the largest colonial empire, Queen Victoria’s reign was famous for the political stability at home.

• 1900 to 2000 CE: By 1913, the British Empire lorded over 412 million people, 23 per cent of the world population at the time, and by 1920, it covered 35.5 million sq.km. (13.7 million sq mi), 24 per cent of the Earth’s total land area. The British Empire surpassed even the Spanish Empire of the 17th century. However, by the start of the 20th century, Germany and the USA begun to challenge Britain’s economic lead. Economic and colonial tensions between the UK and Germany were major causes of the WW I. The conflict placed enormous strain on its military, financial, and social resources. And in the WW II, the UK’s colonies in east Asia and southeast Asia were occupied by the Japanese Empire. After 1945 CE, the UK became so exhausted that it allowed most of its colonial possessions to declare independence.

After WW II, Clement Attlee’s Labour government in the UK introduced a series of economic reforms to create a modern welfare state that provides public services and ensures social security for all citizens. However, 1980s onward political economy of the UK turned towards neoliberal capitalism (away from capitalism combined with social welfare).

Economy: The English (and Scottish) economy navigated many milestones during the second millennium – the long journey transformed a predominantly agrarian economy into a global colonial empire. Needless to say, that the UK, world’s first industrial capitalist state was at the centre of the empire beaming with innovative entrepreneurial spirit:

• 1200-1500 CE: England and Scotland were not very different from other west European kingdoms during this period – primarily agrarian economy where the feudal system was well-entrenched. Land was owned by the nobility and worked by serfs (as peasants) in exchange for food and protection. The three-field system, where one field lay fallow while the other two were cultivated, was prevalent. Though crop-rotation was a practice, productivity was low.

Cottage industries like weaving and blacksmithing were common. Guilds developed during this long period which regulated production & quality. Water and windmills were used for limited mechanization. Trade was limited to local and regional levels (fairs and markets helped exchange). Coinage was used, but barter still played a significant role. The wool trade made England a major exporter.

• 1500-1700 CE: As the Tudors established their full control over the English crown, a transition from feudalism to a more centralized monarchy was initiated. Enclosure movements led to the consolidation of land, leading to larger farms and more efficient agricultural practices. Simultaneously, selective breeding of livestock also improved the productivity of farms. Experimentation with new crops helped the rise of commercial agriculture. Agricultural capitalism and mercantile capitalism combinedly contributed to an increase in trade and commerce.

Wikipedia summed up the primary vectors of the British economy of this period as, “In the Tudor and Stuart periods the main foreign policy goal (besides protecting the homeland from invasion) was the building a worldwide trading network for its merchants, manufacturers, shippers and financiers. This required a hegemonic Royal Navy so powerful that no rival could sweep its ships from the world’s trading routes, or invade the British Isles.” Industries like shipbuilding, textiles, and metallurgy expanded with the expansion of overseas colonies. Raw materials from colonies fueled industrial growth. Expansion of coal mining supported growth in iron production. The British East India Company (EIC) and Hudson’s Bay Company played significant roles in global trade. In 1694 CE, the Bank of England was founded in London which started acting as the central bank of England.

British East India Company competed against other companies from Portugal, Spain, the Netherlands, and France, and established itself as the leading mercantile force in west Europe. Table 2.5 (source: ‘Trade and Empire, 1700-1870’ authored by Guillaume Daudin, Kevin O’Rourke, Leandro Prados de La Escosura in 2008 published by HAL, hal-03459838) provides the share of items imported by EIC:

Tab: 2.5 Imports of English East India Company into Europe, 1668-1760 (% of invoice value)

Item	1668-1670	1698-1700	1738-1740	1758-1760
Pepper	25.25	7.02	3.37	4.37
Textiles	56.61	73.98	69.58	53.51
Raw silk	0.6	7.09	10.89	12.27
Tea	0.03	1.13	10.22	25.23
Coffee	0.44	1.93	2.65	—
Indigo	4.25	2.82	—	—
Saltpetre	7.67	1.51	1.85	2.97
Miscellaneous	5.15	4.52	1.44	1.65

• 1700-1900 CE: By 1815 CE at the end of 22 years of warfare against France, the UK and its ‘aristocratic and plutocratic’ elite presented its citizens and (colonial) subjects “external security, internal stability, protection for property rights, support for hierarchy and authority, legal frameworks for contracts and for the extension and integration of markets, encouragement for technical and business innovation, and, above all, more extensive and better-protected entries to imperial and other overseas markets than any other state in the world. As envious mercantilists from the mainland observed, the United Kingdom’s propertied elites enjoyed almost complete safety from foreign invasion derived from the hegemony of their navy at sea. They possessed ready access to the markets and resources of the largest occidental empire…” (refer ‘The Cambridge History of Capitalism’, volume I)

The Industrial Revolution, starting in the mid-18th century, and the resultant enhancement of productivity brought about a profound transformation of the British economy. Mechanization touched every aspect of industry – improved transportation like railways, fast communication like telegraph, improved mine safety, and technical advancements in manufacturing machinery – permanently modified the economy towards industrialized economy. The new farming machinery and agricultural systems increased yields and freed up labor for the growing industries in and around towns.

The factory systems developed further with cotton textile manufacturing completely moved to large factories powered by steam engines. Coal mining, iron, and steel production went through tremendous growth. The British Empire became the largest colonial power facilitating trade across its colonies and British Isles. Daniel Defoe boasted: (the UK) is the most “diligent nation in the world. Vast trade, rich manufactures, mighty wealth, universal correspondence, and happy success have been constant companions of England, and given us the title of an industrious people.” (Refer Wikipedia). Daniel Defoe didn’t exaggerate – the capitalist colonialist economy (of not only the UK, but the other west European powers as well) flourished across Europe, Africa, Asia, and the Americas involving slaves, raw materials, and finished goods, and every penny of profit could be directly traced to the drops of blood and sweat of the people of hapless colonies.

• 1900-2000 CE: At the beginning of the 20th century, British economy and empire were still growing, but at the same time the national debt was rising at a faster rate. And, the USA and Germany were closing in – more as economic powers than colonial empires. The UK political leadership could never accept flourishing economy of Germany, even if the lead role in the economic boom (industrial capitalism) in all west European countries was played by the Jewish and Protestant bourgeois communities.

Mechanization in agriculture continued with tractors, harvesters, and other machinery. The use of fertilizers and pesticides became widespread, boosting yields while polluting the environment. The farming sector became more specialized and focused on larger-scale agricultural and dairy production. New industrial sectors like automobiles, aerospace, and electronics flourished. After WW II, there was a shift towards a service-based economy.

Losses in WW I and WW II sapped the British economy and manpower. the decline of the British Empire had substantial impacts on trade. After WW II, the then Labour government nationalized some industries, and expanded social security in a move towards creation of a welfare state. In the late 20th century, government led by the Conservative Party pursued neoliberal economic policies with privatization and deregulation as its hallmarks. The UK joined the EU in 1973 CE (and left the EU very recently in 2020).

Economy & Politics in the United Kingdom/England between 1650 CE and 1900 CE

The economists and academicians are of the same opinion that it was the UK which became the birthplace of ‘industrial capitalism’ during the middle of the last millennium. While the Italian Peninsula and the Spanish Empire were the hosts for agrarian+mercantile capitalism and slave+mercantile capitalism respectively, the UK became the first host to the combination of industrial+mercantile capitalism. It was precisely the advent of industrial capitalism in the UK that was discussed and decoded by the European philosophers, academicians, economists, and political activists with so much of zeal that, many a times, their thought processes clouded the analysis and inferences about the origin, nature, and propagation of different shades of capitalism.

Tab: 2.6

Economic System & Banking
Evolution of Agrarian and Mercantile capitalism	Agrarian capitalism flourished in England since the Tudor era when enclosure movement rejected traditional rights of peasants over common land. Eric Hobsbawm wrote “Some 5,000 ‘enclosures’ under private and general Enclosure Acts broke up some six million acres of common fields and common lands from 1760 onwards, transformed them into private holdings, and numerous less formal arrangements supplemented them. […] The classical British solution produced a country in which perhaps 4,000 proprietors owned perhaps four sevenths of the land which was cultivated”. These enclosures were utilized for sheep and cattle rearing for commercial purposes along with agriculture. In ‘British Economic Growth, 1279 – 1879: An Output-based Approach’, Stephen Broadberry, Bruce Campbell, Alexander Klein, Mark Overton, Bas van Leeuwen provided the following trend of English arable output (net of seed and animal consumption) in million bushels (10-year averages): 1600s – Wheat (20.70), Barley (18.59), Oats (8.44), Pulses (4.01) 1700s – Wheat (27.94), Barley (35.20), Oats (5.70), Pulses (8.25), Potatoes (1.27) 1800s – Wheat (46.32), Barley (42.67), Oats (14.06), Pulses (11.07), Potatoes (26.70) 1860s – Wheat (86.07), Barley (57.00), Oats (16.33), Pulses (11.42), Potatoes (47.72) With increased land use, agricultural output increased, and urbanisation grew quantitatively and qualitatively in England and Scotland. The British merchants challenged the Dutch, Spanish, Portuguese, and French trading networks, outperform them, and established itself as the largest mercantilist entity of Europe. Probably, the Company of Merchant Adventurers of London was the first trading establishment set up in the early 15th century for the purpose of trading with medieval Germany and the Low Countries. Steadily, the British built the largest merchant fleet of Europe. The top 3 European merchant fleet in 1790 CE were (refer ‘British Economic Growth, 1279 – 1879: An Output-based Approach’): The UK – 881,963 tons representing 26.2% France – 729,340 tons representing 21.6% The Netherlands – 397,709 tons representing 11.8% As mentioned in table 2.5, between 1668 and 1770 CE pepper, textiles, raw silk, and tea were the most imported items by British East India Company. With the passage of time sugar, tobacco, and cotton got added to the list of items imported into Europe. Grains, wool, and textiles were exported (apart from re-export of imported items). Through ‘putting out’ system, the British merchants would supply wool/ cotton and an advance for labour to the peasant families (with skill for weaving) which, would be processed by the craftsman using own tools – finished product would be collected by the merchant and marketed. More often than not the merchants used the ‘putting out’ system to avoid the ‘guild’ that controlled manufacturing and distribution of a particular line of product. Commenting on the mercantile policies of the British government Wikipedia noted, “The London government enhanced the private sector by incorporating numerous privately financed London-based companies for establishing trading posts and opening import-export businesses across the world. Each was given a monopoly of trade to the specified geographical region. The first enterprise was the Muscovy Company set up in 1555 to trade with Russia. Other prominent enterprises included the East India Company (EIC), and the Hudson’s Bay Company in Canada. The Company of Royal Adventurers Trading to Africa had been set up in 1662 to trade in gold, ivory and slaves in Africa; it was reestablished as the Royal African Company in 1672 and focused on the Atlantic slave trade. British involvement in each of the four major wars, 1740 to 1783, paid off handsomely in terms of trade. Even the loss of the Thirteen Colonies was made up by a very favourable trading relationship with the new United States of America. Britain gained dominance in the trade with India, and largely dominated the highly lucrative slave, sugar, and commercial trades originating in West Africa and the West Indies.” These merchant companies generated extraordinary amounts of financial fortunes – e.g., between 1682 and 1692, EIC paid out dividends equal to four times its nominal capital. The Cambridge History of Capitalism’ vol. I noted, “Competitive imperial expansion and mercantilism characterized the 18th-century Atlantic economy. Britain and France, and to a lesser extent the Netherlands, challenged Spain’s imperial claims and established colonies in the Caribbean and the English developed colonies on the North American mainland. The colonial economies revolved around export staples (principally sugar but also tobacco) produced by African slaves. Mercantilist regulation reserved the trade of each imperial power to its own subjects. In the mercantile contest the English did better than their rivals in developing markets for manufactured exports.” Exports soared £6.5 million in 1700 (from around £2.5 million in 1669 CE), then, as the sea-routes were dominated by the British Naval forces’ (Royal Navy) exports climbed to £14.7 million in 1760 and £43.2 million in 1800 CE. To get a detailed understanding of overall trade, data for British trade in 1790 CE (refer ‘British Economic Growth, 1279 – 1879: An Output-based Approach’ by Bruce Campbell, Alexander Klein, Mark Overton, Bas van Leeuwen) is given below: Imports from Europe – £11.3 million Imports from rest of world – £11.5 million Exports toward Europe – £6.3 million Exports toward rest of world – £7.3 million Re-exports toward Europe – £2.8 million Re-exports toward rest of world – £0.8 million Total trading – £40.0 million It was no wonder that trading became the bedrock of the British economy, as the following data on exports plus imports as share of GDP show: 1720 CE – 19.0% 1755 CE – 20.0% 1790 CE – 24.0% 1820 CE – 21.4% 1840 CE – 25.2% 1860 CE – 41.8% 1870 CE – 43.6%
Evolution of Slave capitalism	Commenting on the origin of the ventures for colonial settlement by the British crown ‘The Cambridge History of Capitalism’ (volume I) noted, “On April 10, 1606, King James I of England granted a charter creating two companies “to make Habitation, Plantation, and to deduce a colony of sundry of our People into that part of America commonly called Virginia, and other parts and Territories in America”. That action would not only change the world by authorizing what became the first permanent English settlement in North America but also represented a subtle change in the nature and role of corporations. Previously, the most common use of the corporation had been to create public entities such as municipalities (e.g., the City of London), educational institutions, religious bodies, and charities. However, the London and Plymouth companies created by King James’s charter represented a quite different model in which there was a significant private element, albeit one with a specific public purpose (that is, claiming territory for the English Crown).” In 1628 CE through the Charter of the Massachusetts Bay Company, British colonization of the North American continent began. The British Empire was built over 300 years through acquisition of overseas trading posts and kingdoms by British chartered companies as well as by the military forces. The economic system of slave capitalism manifested itself through the following ways: Regions in Africa and islands in Atlantic Ocean – slave trade; mining; cultivation of cocoa, coffee, tea, and cotton (using slaves); oceanic trading ports Regions in Asia – Forced cultivation of coffee, tea, tobacco, copra, rubber, sugar, cotton, pepper, clove, cinnamon, and indigo; oceanic trading ports Islands in Pacific and Indian Ocean – slave trade; oceanic trading ports Australia, Tasmania, New Zealand, Papua New Guinea – mining; oceanic trading ports Concessions and leased territories in China – trading of silk, porcelain, opium Regions in South America and Caribbean Sea – plantation of sugarcane, cotton, indigo (using slaves) and shipment to Europe Regions in North America – plantation of sugarcane, cotton (using slaves) and shipment to Europe Wikipedia mentioned about involvement of British organisation in slave trade, “the Royal African Company was granted a monopoly on the supply of slaves to the British colonies in the Caribbean. The company would transport more slaves across the Atlantic than any other, and significantly grew England’s share of the trade, from 33 per cent in 1673 to 74 per cent in 1683. The removal of this monopoly between 1688 and 1712 allowed independent British slave traders to thrive, leading to a rapid escalation in the number of slaves transported. British ships carried a third of all slaves shipped across the Atlantic—approximately 3.5 million Africans—until the abolition of the trade by Parliament in 1807. To facilitate the shipment of slaves, forts were established on the coast of West Africa, such as James Island, Accra and Bunce Island. In the British Caribbean, the percentage of the population of African descent rose from 25 per cent in 1650 to around 80 per cent in 1780, and in the Thirteen Colonies from 10 per cent to 40 per cent over the same period (the majority in the southern colonies). The transatlantic slave trade played a pervasive role in British economic life, and became a major economic mainstay for western port cities. Ships registered in Bristol, Liverpool and London were responsible for the bulk of British slave trading. For the transported, harsh and unhygienic conditions on the slaving ships and poor diets meant that the average mortality rate during the Middle Passage was one in seven.” Another British organization, the East India Company (EIC) played a momentous role to initiate and establish slave capitalism. The EIC, a joint-stock company founded in 1600 CE and dissolved in 1874 CE, had monopoly of trading in the Indian Ocean region, initially with the Indian subcontinent/ South-east Asia and later with East Asia. Wikipedia noted, “The company seized control of large parts of the Indian subcontinent and colonised parts of Southeast Asia and Hong Kong. At its peak, the company was the largest corporation in the world by various measures. The EIC had its own armed forces in the form of the company’s three presidency armies, totalling about 260,000 soldiers, twice the size of the British army at the time. The operations of the company had a profound effect on the global balance of trade, almost single-handedly reversing the eastward drain of Western bullion, in effect since Roman times. […] the company rose to account for half of the world’s trade during the mid-1700s and early 1800s, particularly in basic commodities including cotton, silk, indigo dye, sugar, salt, spices, saltpetre, tea, and opium. The company also ruled the beginnings of the British Empire in India.” Barry Buzan and George Lawson noted in their paper ‘The global transformation: the nineteenth century and the making of modern international relations’ published in International Studies quarterly gave a categorical description how even very small European country/society could easily transform into a colonial power: “The transformation from wood and sail to steel and steam took just fifty years. Across this half-century there was: a 33-fold increase in weapons range from 600 yards (HMS Victory 1850) to 20,000 yards (HMS Dreadnought 1906); a 26-fold increase in weight of shot from 32 pounds solid shot to 850 pounds explosive armour-piercing shell; more than a doubling of speed from 8-9 knots (HMS Victory) to 21 knots (HMS Dreadnought); and a shift from all sail (HMS Victory) to steam turbines (HMS Dreadnought), permitting all-weather navigation for the first time.” Davis and Huttenback (1986) analysed the economic balance sheet of the British empire:1860–1912, and one of their key conclusions was that, the British “private investors, especially concentrated in London and the southeast, were net beneficiaries”.
Tax, public debt	Till mid-17th century British government didn’t accumulate large state debts. Debt accumulation started with the Protestant Dutch invasion that brought William of Orange to power – the war from 1688 to 1697 resulted in the long-term debt of 22 million pounds. By 1783 CE it increased to 238 million pounds (more than tenfold). In 1939, the public debt reached 8,300 million pounds due to sustained high expenditures on military gears. West European states experienced almost similar cycle of debt accumulation (due to war) and tax imposition (due to debt). The Cambridge History of Capitalism’ (volume I) noted, “Eventually extraordinary demands for funds for three wars stimulated the inauguration and sustained a process of political and administrative reform designed to create an institutional framework (including a central bank) that allowed the English/British state ready and stable access to cheap credit and longer-term loans on the security of future tax revenues to meet its on-going requirements for liquidity as well as those unprecedented upswings in levels of expenditure that invariably occurred during frequent interludes of armed conflicts with rival powers.”
The labour market	The Cambridge University Group for the History of Population and Social Structure estimated the occupational structure on the basis of information from church records of baptism suggesting that during the 1710s “agriculture and mining employed about 43 percent of the occupied male population and manufacturing employed 39 percent. Over the next century, the share of the labour force in agriculture declined only modestly to about 39 percent while the secondary sector’s share increased to only 42 percent. In the early eighteenth century secondary-sector employment was widely distributed. […] By the early nineteenth century, industrial employment had concentrated on a crescent of counties running from the West Riding of Yorkshire through Lancashire then south and west to Glamorgan in South Wales. In southern counties, the proportion of manufacturing workers had declined by more than a quarter to 28 percent while in the north, principally in Lancashire and the West Riding, they had increased by close to 62 percent. The bulk of southern deindustrialization occurred in textiles. Male employment in clothing manufacture also declined significantly, presumably due to the rise of ready-made clothing manufacture in the east Midlands and a feminization of the trade. A second factor was replacement of charcoal-based iron production by coal-based technology that drew the industry to the coalfields.” During the industrial revolution between 1770 and 1830, ‘labour’ became a commodity available in the market at competitive rates – the average real wage of workers didn’t change because population growth and deindustrialization were detrimental to wage increase of labour. Wages increased in urban areas that was far less than the increase in work load. The factors like unhealthy environment, and absence of amenities were the rallying issues for labour movements across Europe. But Britain was much less impacted by militant trade unionism than other west European states, probably because the British working-class peoples “were less poor than their great-grandparents had been at the end of the eighteenth century and few experienced the levels of poverty that were common in Italy or eastern Europe – the poorer parts of Europe.” (refer ‘The Cambridge History of Capitalism’ volume I) The issue of stable and comfortable income by majority peoples in British society was a matter of utmost importance to the British oligarchy. Cecil Rhodes, we are informed by his intimate friend, the journalist Stead, expressed his imperialist views to him in 1895 in the following terms: “I was in the East End of London (a working-class quarter) yesterday and attended a meeting of the unemployed. I listened to the wild speeches, which were just a cry for ‘bread! bread!’ and on my way home I pondered over the scene and I became more than ever convinced of the importance of imperialism. My cherished idea is a solution for the social problem, i.e., in order to save the 40,000,000 inhabitants of the United Kingdom from a bloody civil war, we colonial statesmen must acquire new lands to settle the surplus population, to provide new markets for the goods produced in the factories and mines. The Empire, as I have always said, is a bread-and-butter question. If you want to avoid civil war, you must become imperialists.” The prescription was worse than the disease! In order to provide employment and income to 40 million British people, the oligarchs planned to colonize half of the world and destroy communities and societies – what was not stated by Cecil Rhodes was related to the relentless pursuit of capital!
Evolution of Industrial capitalism	Commenting on the initiation of industrial capitalism in Britain ‘The Cambridge History of Capitalism’ (volume I) noted, “Textiles, clothing, leather processing, food and drink processing, and construction were by far the largest sectors, accounting for over three-quarters of manufacturing in the mid-18th century. Metal workers produced a wide variety of hardware and trinkets for consumer markets as well as tools for agriculture, construction, and manufacturing. The high level of manufacturing production was a consequence of the relatively high-income levels. Efficient agriculture released labour and there was consumer demand – even building laborers’ incomes provided a margin above subsistence and artisans could afford modest luxuries including imported groceries, particularly sugar, tea, and tobacco, and modest amounts of manufactured goods. The well-to-do, including a rising middle class, probably still constituted the major consumer market for manufactured goods. Exports contributed importantly to Britain’s industrialization. Crafts calculated those exports made up about 45 percent of manufactured output in 1801. Exports of woollen cloth to European markets completely dominated British exports until the early eighteenth century. Manufactured goods continued to dominate exports during the eighteenth century but important diversification occurred. By the third quarter of the eighteenth-century exports to the Americas nearly equalled exports to Europe and were widely diversified with woollen cloth only a little over a quarter while metal products made up nearly 20 percent and miscellaneous manufactured goods were nearly as important as woollens.” During the first wave of Industrial Revolution, power of steam was harnessed (through burning of coal) and various goods were manufactured using cotton (textile sector), and iron (engineering sector). Britain led the way in textile, iron, mining, shipping, railways with application of new technology to enhance productivity. According to ‘The Cambridge History of Capitalism’ vol. 1, “The innovations in machine-based cotton spinning, steam engines, and coke iron production were not small improvements but massive breakthroughs. Arkwright’s water frame – the most spectacular – reduced the price of coarse cotton yarn to about a third of its mid-18th century price by the early 19th century and the price of finer yarn by much more; Watt’s steam engine revolutionized power supply; Cort’s puddling-furnace and rolling-mill made coke production of wrought iron on a large scale profitable.” As per Christian (2005), time taken for 100 pounds of cotton spinning was reduced from 300 hours in 1790s to 135 hours in 1830 CE. British production of pig iron and wrought iron quadrupled between 1796 and 1830 CE, and quadrupled again between 1830 and 1860 CE. British bourgeois class already buoyed by the massive growth in production and export of consumer goods and engineering goods, also became world’s largest exporter of (money) capital for setting up mines, railway corridors, factories in other west European countries as well as colonial lands. Thus, British foreign direct investment, rose from $500m in 1825 to $12.1b in 1900 and $19.5b by 1915 CE. Broadberry, Fremdling, and Solar (2010) provided a sectoral break-up of the manufacturing industry in the UK in 1870 CE: Textile & clothing: 26% Mining: 25% Metals: 18% Food, drink, & tobacco: 14% Other manufacturing: 8% Construction: 7% Utilities: 2% The sustained growth of industry resulted growth in per capita income after 1830 – chemicals, food processing, refrigeration, glass, clothing, shoe, and packaged food contributed to such growth. After 1870, a second wave of industrialization took place, during which Germany and the USA took lead to explore new frontiers in electrical, electronics, pharmaceuticals, chemicals. Energy from petroleum acted as catalyst to industrialization – the use of refined petroleum as liquid fuel provided an impetus to the development of engine-driven cars, planes, and ships. Communication and transportation systems were transformed beyond imagination – In ‘The Global Transformation: The Nineteenth Century and the Making of Modern International Relations’, Barry Buzan and George Lawson noted that, “by 1840 there were 4,500 miles of track worldwide, expanding to 23,500 miles by 1850, and 130,000 miles by 1870, by the end of the century, there was half a million miles of track worldwide, over a third of which was in Europe; Communication times between Britain and India dropped from a standard of around six months in the 1830s via sailing ship, to just over one month in the 1850s via rail and steamship, to the same day in the 1870s via telegraph”. Utilising the ‘first-mover’ advantage Britain led the world-wide trade in pig iron and wrought iron, railways, and machinery. Darwin noted (2007) that during the 19th century global trade increased twenty-five times over. Crafts analysed that, “from 1830 to World War I, steam power and the investments it induced in transportation networks generated about a third of a percent per year growth in labour productivity, but before 1830 its contribution was barely noticeable at one- or two-tenths of a percent per year.” By 1870s, oligarchy of Britain, France and other west European societies engaged into another type of business – export of capital to other countries. Rise of ‘cartels’, ‘mergers’, ‘alliances’ became widespread among the corporations (organisations) who accumulated humongous profits due to technological advancements during the preceding decades (electric power, internal combustion engines). During 1873–1896 period, production often exceeded domestic demand which became a key reason of Long Depression of 1873–1896. Businesses suffered from long periods of low profits and price deflation.
Presence of ‘capitalist’ institutions, banking and practice of ‘capitalist’ system	In ‘A Concise Financial History of Europe’, Jan Sytze Mosselaar noted, “… after 1688 London’s financial markets developed rapidly to become the world’s financial centre, a position it would hold unchallenged until the First World War in 1914.” Being the pioneer in most of the modern financial techniques, the Dutch immigrants who migrated to the UK as well as the (Jewish and Dutch) bankers and entrepreneurs who had business interests in the UK introduced their (financial) innovative ideas and practices in London. By the mid-18th century when British Navy used to ‘rule the waves’, the trading scope and expanse was much bigger compared to the trading and business done by the Dutch bankers and traders. So, in London the financial processes, techniques, and institutions (from the Netherlands) were “applied to a much bigger market than the Amsterdam traders and bankers could ever have dreamt of.” Thus, the milestones of the burgeoning capitalist system that were realized by London were: Foundation of the Bank of England in 1694 (main functions were to finance the government deficit as the Genoese Banco di San Giorgio did in 1408, and to issue bank notes for which it got a monopoly in 1844; the Bank of Amsterdam primarily focussed on settling financial transactions related to trade and commerce) During the post-1688 invasion period war with France (Nine Years’ War) drained the British exchequer, so the government raised 6.9 million pounds (from the Bank of England and the EIC) as long-term national debt; instruments like life annuities, and collective annuities were used; in 1751 CE all outstanding debt was consolidated in standardized instrument (consol) which perpetually paid 3%. The bonds were traded heavily in European financial centers The London Stock Exchange grew from less than 15 listed companies in 1687 to about 150 companies by 1695 (compared to such flurry of stock market activities in London, Amsterdam had only two listed companies in the beginning). Even if most of the listed companies were unviable, the IPO boom continued and between 1691 and 1693 CE 61 patents were issued. Good companies brought huge profits – stock price of the White Paper Company increased three-fold in a four-year period, the value of the Linen Company rose from 10 pounds in 1690 to 45 pounds in 1693. Along with the growing financial and stock market activities came stock market crash of 1696 CE when the stock price of White Paper Company dropped 70% and Linen Company slided 90%. About 70% of the 140 English and Scottish companies went bust as a result of which stock market regulations were introduced after the crash. As such the stock traders (stock-jobbers speculated with their own capital, and stock-brokers speculated with investors’ money thereby earning commissions) were greedy and applied dubious methods to lure peoples with assets. Daniel Defoe criticized the stock-jobbers in his publications ‘The villainy of stockjobbers detected’ and ‘The anatomy of Exchange-Alley, ‘tis a Trade founded in Fraud, born of Deceit, and nourished by Trick, Cheat, Wheedle, Forgeries, Falshoods, and all sorts of Delusions’. In 1697 CE, two important stock market regulations were implemented by the government: (i) the maximum number of jobbers and brokers that could operate was limited to 100, with a maximum of 12 Jewish and 12 foreigners, (ii) proprietary trading was prohibited, so brokers had to pay an annual fee. But that regulation couldn’t prevent the next boom-and-bust cycle in 1720 CE. Apart from the Bank of England and the EIC financing part of the British government debt, in 1711 CE, the South Sea Company started funding the government by absorbing about 10 million pounds of debt (converting that into company shares) – the company received an annual interest payment and a monopoly on all of the UK’s trade in South America which was then not profitable (due to competition from Iberian Peninsula and France). Additionally, the company was authorized to issue 31.5 million pounds’ worth of shares (as the government annuity holders convert their annuities into South Sea Company shares). The South Sea Company increased the share price beyond nominal value thereby earning huge profits – during the first subscription share price was 150 pound in 1719 while fourth and last money subscription opened with price of 1000 pound in August 1720. With no avenue for very high level of profits, the investors started realizing the reality and the bubble burst – by mid-October 1720, the stocks were at 170 (i.e., 75% decline in 3 months). During that period of ‘South Sea Bubble’, only 4 out of the 190 new companies in London lasted until the year end. The speculation fever in London and Paris also spread towards the Dutch Republic. Jan Sytze Mosselaar summarized in ‘A Concise Financial History of Europe’ as, “Three main European financial centers were hit by a wave of financial experiments, speculation, overconfidence, scrupulous insider trading and unsuspecting investors. All three episodes ended in financial disaster.” , After a period of stable and rapid growth, in 1772 CE European banking crisis originated in England – over-speculation on EIC stocks, and subsequent bank run in London and Scotland proved to be contagious. Amsterdam-based banks and merchants were next to be impacted.
Presence of influential Jewish families – Sephardim, Ashkenazim – who migrated from west Asia, north Africa, east Europe	During the 17th to 19th centuries, several prominent Jewish and converso (Jewish converts to Christianity) families played significant roles in banking, trading and industry in England and the British Empire. Some of the notable families include: 1. The Rothschild family, originally from Germany, established a significant banking dynasty in the UK during the 19th century. Nathan Mayer Rothschild, one of the five Rothschild brothers, played a pivotal role in expanding the family’s banking operations in London. The Rothschilds were involved in financing various infrastructure projects, and the development of government bonds 2. The Goldsmid family (Sir Isaac Lyon Goldsmid) was influential in the 19th-century financial and political circles of England. They were involved in various business ventures, including banking and railway development, and played a role in advocating for Jewish emancipation and civil rights 3. The Cohen family (Sir Benjamin Cohen) was involved in finance and banking during the 19th century. They were known for their philanthropic efforts and contributions to Jewish causes 4. The Sassoon family, originally from Baghdad, initiated a trading and merchant business in England during the 19th century – primarily in textiles, opium, and real estate. Sir Albert Sassoon played a key role in the family’s success 5. The Samuel family (Sir Marcus Samuel) was involved in the import and trading of goods such as shellac, sugar, and other commodities during the 19th century. They later founded the Shell Transport and Trading Company, which eventually became part of Royal Dutch Shell 6. The Mocatta family was involved in banking and finance during the 19th century. Moses Mocatta was a prominent figure in the family and served as a banker and bullion broker in London 7. The Ricardos (Abraham and David Ricardo), converso Jewish, were significant intellectuals in the development of political economy and trade theory in the 18th and 19th centuries 8. The Solomon family (Sir Edward Solomon) was prominent entity in the London financial district which was involved in banking and finance during the 19th century 9. The Seligman family, originally from Germany, established a banking and finance dynasty in the UK during the 19th century – involved in financing railway projects 10. The Cohen-Phillips family, including Sir Francis Cohen and Sir Benjamin Phillips, were influential figures in finance, industry, and philanthropy during the 19th century. They were involved in various business ventures 11. The Lindo family (Sir Moses Samuel Lindo) was known for its involvement in publishing, journalism, and the arts during the 18th and 19th centuries contributing to the cultural life of England 12. The Emanuel family (Sir Francis Louis Emanuel) was involved in trade and finance during the 19th century. They had interests in shipping and international trade 13. The Friedlander family (Sir David Friedlander) was involved in finance and banking during the 19th century. They were influential in the London financial scene 14. The Harris family (Sir Augustus Harris) was known for its contributions to the theatre and entertainment industry during the 19th century. They were involved in theatre management 15. The Davis family (Sir Nathaniel Davis) was involved in trade and finance during the 19th century. They were influential in various business enterprises 16. The Nathan family (Sir Matthew Nathan) had members involved in various fields, including politics, public administration, and the military during the 19th and early 20th centuries. Commenting on the Jewish population in England and the British Empire, Jewish Encyclopaedia noted, [link 🡪 https://www.jewishencyclopedia.com/articles/5764-england ], “At the present time (i.e. 1901 CE – author) it is calculated that England has a Jewish population of 148,811, as against 7,428 in Scotland, and 3,771 in Ireland, giving approximately 160,000 for the British Isles. In 1901 the British empire had in all about a quarter of a million Jews, distributed as follows: British Isles – 160,000 | Aden – 2,826 | Australasia – 16,678 | Canada & British Columbia – 16,432 | Gibraltar – 2,000 | Hongkong – 150 | India – 18,228 | Jamaica – 2,000 | South Africa – 20,000…”.
Presence of ‘capitalist’ class, concentration of wealth as capital (money and property); Non-Jewish family-owned business houses	Significant commercial and banking families that emerged in England and Scotland, not only played a central role in shaping the economic and political landscapes of the British Isles but they also irreversibly changed the world. Some of the famous British non-Jewish banking, trading, and industrialist families during the 17th to 19th centuries were: 1. The Baring family (originally from Germany) established the banking firm Barings Bank in London in the late 18th century that played a crucial role in financing international trade and the UK government borrowing during the 19th century 2. The Coutts family founded Coutts Bank, which became one of the oldest and most prestigious private banks in the UK 3. The Lloyd family founded Lloyds Bank in the late 18th century, which eventually became one of the largest and most well-known banks in the UK 4. Boulton and Watt: The partnership between Matthew Boulton and James Watt was instrumental in the development of steam engines during the late 18th century that powered the Industrial Revolution 5. The Cadbury family (George Cadbury and Richard Cadbury) were prominent in the chocolate and cocoa manufacturing during the 19th and 20th centuries. They founded Cadbury, a confectionery outfit 6. The Wedgwood family, particularly Josiah Wedgwood, played a significant role in the pottery and ceramics industry during the late 18th and early 19th centuries 7. The Tate family (Henry Tate) was involved in the sugar refining industry during the 19th century. Henry Tate founded Tate & Lyle, a major sugar company. 8. The Bass family (William Bass) was involved in the brewing industry during the 18th and 19th centuries. They founded Bass Brewery, known for its pale ale. 9. The Howard family, including the Dukes of Norfolk, were prominent English aristocrats. They played important roles in the politics and governance of England during various periods 10. The Cavendish family, including the Dukes of Devonshire, were influential English aristocrats and landowners. They had vast estates and were involved in politics and the arts 11. The Astor family, originally from Germany, established a prominent presence in the UK during the 19th century. They were known for their wealth, investments, and philanthropy 12. The Guinness family, founders of the Guinness Brewery, were prominent in the brewing industry during the 18th and 19th centuries. They became one of Ireland’s wealthiest families. 13. The Drummond family of Scotland was involved in banking and finance during the 18th and 19th centuries. Founded by Andrew Drummond, Drummonds Bank became one of London’s leading banks 14. The Douglas family, including the Dukes of Douglas and Queensberry, were influential Scottish aristocrats. They played important roles in Scottish politics and society 15. The Carnegie family (Andrew Carnegie) was involved in the steel industry during the 19th century. Andrew Carnegie became one of the richest individuals in the world 16. The Gordon family, including the Dukes of Gordon, were influential Scottish aristocrats with extensive landholdings. They played roles in military and political affairs
Political System, Society & State
Monarchist State transformed into global empire, with large citizenry and colonial subjects under its jurisdiction	During the medieval and modern era, the English crown was occupied by the Plantagenet dynasty, Tudor dynasty, house of Stuart, and house of Hanover (there were internal civil wars between republicans and monarchists as well as Dutch invasion during the Stuart era). However, all along they were moving towards a future state which would exhibit the following characteristics: Expansion of the boundary beyond England – Wales, Scotland, Ireland got annexed /merged with the English crown (Ireland excluding the northern region became independent only during the initial decades of 20th century); the British kingdom was expanded into the largest empire in the recorded history with colonial states in Africa and Asia continents Strong centralised state that will not act as an absolute monarchy, monarchs would be bound by constitution and for all important matters pertaining to statecraft would seek consultation with the oligarchy (drawn from the feudal aristocracy and modern bourgeois) Capable and technologically advanced Naval forces and Army would manage the internal conflicts, and fight in any corner of the globe to maintain British empire Catholic Christianity retreated on the face of strong state-sponsored Protestantism – the Church of England became supreme authority over the religious matters during the Tudor era (though the move to severe ties with papacy was more to do with politics and economy) Parliament was composed of the king, Lords, and Commons. The House of Lords was dominated by the aristocrats who were among the wealthiest subjects of the state with vast county estates. They were also the military leaders on behalf of the state. The House of Commons was constituted so that local gentry get the opportunity to be part of the parliament. In 1644 CE, it had 507 members. The British government pioneered a method of colonial administration (in the British Empire across the world) which would distinguish among different colonies depending on their utility. By 1913, the British Empire controlled over 412 million people, 23 per cent of the world population at the time, and by 1920, it covered 35.5 million sqkm, 24 per cent of the Earth’s total landmass. Wikipedia provides (link 🡪 https://en.wikipedia.org/wiki/Territorial_evolution_of_the_British_Empire) detail information – significant ones are mentioned below: Regions in Africa … Ghana (1874–1957) as combination of Ashanti (1901–1957), Gold Coast (1874–1957), British Togoland (1914–1957); Basutoland/Lesotho (1868–1966); Bechuanaland/ Botswana (1884–1966); British Cameroons (1916–1961); British East Africa/Kenya (1888–1963); British Somaliland (1884–1960); South Africa (1910–1961) as combination of Cape Colony (1806–1910), Natal (1843–1910), Transvaal (1877–1910), Orange River Colony (1900–1910); British Somaliland (1884–1960); Egypt (1882–1922); Gambia (1816–1965); Nigeria (1914–1960) as combination of Northern Nigeria (1900–1914), Southern Nigeria (1887–1914); Nyasaland/Malawi (1891–1964); Northern Rhodesia/Zambia (1888–1964) as combination of Barotziland-North-Western Rhodesia (1890–1911), North-Eastern Rhodesia (1899–1911); Southern Rhodesia/ Zimbabwe (1900–1979); Tanzania (1890–1963) as combination of Zanzibar (1890–1963), Tanganyika (1922–1961); Uganda (1890–1962); Sierra Leone (1787–1961); Sudan (1899–1956); Swaziland (1902–1968); Regions in Asia … Aden (1839–1963); Bahrain (1880–1971); Kuwait (1899–1961); Afghanistan (1879–1919); Brunei (1888–1984); Burma/Myanmar (1824–1948); Ceylon/Sri Lanka (1795–1948); Malaya (1824–1963) as combination of North Borneo (1882–1963), Sarawak (1888–1963); Palestine/Israel (1920–1948); Transjordan/Jordan (1920–1946); Qatar (1916–1971); Trucial States/UAE (1892–1971); Singapore (1824–1965); Indian subcontinent (1757–1947) which is now covered under 3 independent states of India, Pakistan, Bangladesh; Regions in Europe … Ireland (1541–1922), Malta (1800–1964) – became independent states; Islands in the Atlantic Ocean …Saint Helena & Ascension and Tristan da Cunha, Bermuda, Falkland Islands & South Georgia and South Sandwich Islands – still controlled by the UK as ‘British Overseas Territory’; Islands in the Indian Ocean … Andaman and Nicobar Islands, Ashmore Island, Cartier Island, Christmas Island, Cocos Islands, Maldives, Seychelles, Mauritius, British Indian Ocean Territory – some of these islands were ceded to Australia, some became independent states in the 20th century, some of them were ceded to India, and the last one remains within the UK; Australia, Tasmania and nearby islands … since 1769 CE this have been transformed into a British colony with British settler population that became an independent state in the 20th century; New Zealand and nearby islands … since 1788 CE this have been transformed into a British colony with British settler population that became an independent state in the 20th century; British New Guinea (1883–1995) – became independent state of Papua New Guinea in 1975 CE; Territorries in China … Hong Kong (1841–1997), Liugong Island (1930–1940) – territories are now part of China under the jurisdiction of Chinese government; Islands in the Pacific Ocean … Baker Island, Cook Islands, Coral Sea Islands, Fiji, Tonga, Tuvalu, Gilbert Islands, Howland Island, Nauru, Vanuatu, Palmyra Atoll, Pitcairn Islands, Samoan Islands, Sandwich Islands, Solomon Islands – some of these islands became independent states in the 20th century, some of them were annexed by the USA, and the rest remain within the UK; Regions in South America … British Guiana/Guyana (1831–1966); Regions in North America … After France ceded most of its colonies in North America to Britain in 1763 CE, four-fifth area of the continent became the land of two states founded by the British settler population while other west European peoples migrated in large numbers until mid-20th century. These two colonial states were: (a) between 1583 and 1867 CE three colonies founded by the British colonial power were united into a confederation; Independent Canada in the mid-20th century is an amalgamation of Canada East/ Lower Canada, Canada West/ Upper Canada, New Brunswick, Nova Scotia, Newfoundland, British Columbia, and Quebec (ceded by France) that covers the entire northern landmass of North America continent with Atlantic ocean as the eastern border and Pacific ocean as the western border; (b) between 1607 and 1776 CE thirteen colonies were founded by the British colonial power. After the USA became an independent state, between 1785 and 1860 CE, the USA expanded towards the west and occupied the entire stretch of land (mostly ceded by colonial powers like France and Spain) between Atlantic and Pacific oceans Regions in Caribbean Sea … Antigua and Barbuda (1632–1981), Bahamas (1670–1973), Barbados (1624–1966), British Honduras/Belize (1665–1981), Jamaica (1655–1962), Trinidad and Tobago (1762–1962), Grenada (1762–1974). British system of judiciary and the laws/acts have many followers world-wide long after the demise of the empire. Most of the significant norms were set during the civil war period (in Stuart era). Wikipedia mentioned, “William encouraged the passage of major laws that protected personal liberties of the Toleration Act 1689, which guaranteed religious toleration to Protestant nonconformists. It did not, however, extend toleration as far as he wished, still restricting the religious liberty of Roman Catholics, non-trinitarians, and those of non-Christian faiths. In December 1689, one of the fundamental constitutional documents in English history, the Bill of Rights, was passed. The Act restated and confirmed many provisions of the earlier Declaration of Right, and established restrictions on the royal prerogative. It provided that the Sovereign could not suspend laws passed by Parliament, levy taxes without parliamentary consent, infringe the right to petition, raise a standing army during peacetime without parliamentary consent, deny the right to bear arms to Protestant subjects, unduly interfere with parliamentary elections, punish members of either House of Parliament for anything said during debates, require excessive bail or inflict cruel and unusual punishments. William was opposed to the imposition of such constraints, but he chose not to engage in a conflict with Parliament and agreed to abide by the statute.” There were enthusiastic followers of the British judiciary system among the erstwhile colonies especially in south Asia and east Africa – hence, many old colonies which became independent after WW-II continued many legacies of the colonial administration and legal systems.
Major inward migration of Judaic, converso Jews	Reformation movement in west Europe was the harbinger of a reemergence of the Jewish community. As per Wikipedia [link 🡪 https://en.wikipedia.org/wiki/Resettlement_of_the_Jews_in_England ] “However the English Reformation, which started in the 1530s, brought a number of changes that benefited Jews in the long term. Doctrines and rituals of the Roman Catholic church that insulted Jews were eliminated, especially those that emphasised their role in the death of Jesus. Further anti-Catholicism, with the Pope as antichrist, came to replace antisemitism. The period of the English Civil Wars and Interregnum, were marked by both widespread millennial beliefs and a beginning of religious toleration. Significantly, millenarianism in England often had a strong Hebraist character, that emphasised the study of Hebrew and Judaism. This was sometimes extended by certain individuals to claim the English as the descendants of the Ten lost tribes of Israel, with Cromwell himself numbering amongst the supporters of this idea. […] After both the Alhambra Decree of 1492, which expelled Jews from Spain in 1492, and similar measures in Portugal in 1496, some converso traders (Jewish converts to Christianity, who often practised Judaism in secret, sometimes also known as New Christians or derogatively as Marranos) settled in London and Bristol. The small community was largely linked by trade to Antwerp, and was expelled altogether in 1609. It was with London’s growing importance as a trading city that Jews from the Netherlands began to settle in the country once more from the 1630s. It is from this first that the current Jewish population of the UK has grown.” Jewish elites always had a small but significant presence at the English crown – Henry VIII used to consult with Jewish rabbis, Edward VI recruited a converso Hebraist as professor of Hebrew at Cambridge, Elizabeth had a Jewish physician, and her spy-network included the Portuguese converso traders, Sir Walter Raleigh travelled to the Americas with Jewish banking and mining magnets. Jewish Encyclopaedia [link 🡪 https://www.jewishencyclopedia.com/articles/5764-england#anchor15 ] noted “William III, though it is reported that he was assisted in his descent upon England by a loan of 2,000,000 gulden from Antonio Lopez Suasso, afterward Baron Avernes de Gras, did not interfere when in 1689 some of the chief Jewish merchants of London were forced to pay the duty levied on the goods of aliens; though he refused a petition from Jamaica to expel the Jews. His tenure of the throne, however, brought about a closer connection between the London and the Amsterdam communities, and thus aided in the transfer of the centre of European finance from the Dutch to the English capital. Early in the eighteenth century the Jewish community of London comprised representatives of the chief Jewish financiers of northern Europe, including the Mendez da Costas, Abudientes, Salvadors, Lopezes, Fonsecas, and Seixas. […] The utility of the larger Jewish merchants was recognized. Marlborough in particular made great use of the services of Sir Solomon de Medina, and indeed was publicly charged with taking an annual subvention from him. These merchants are estimated to have brought into the country a capital of £1,500,000, which had increased by the middle of the century to é5,000,000. As early as 1723 a special act of Parliament was passed which permitted them to hold land on condition of their taking oath when registering their title; they were allowed to omit the words “upon the faith of a Christian.” Some years later (1740) an act was passed permitting Jews who had resided in the British colonies for a period exceeding seven years to become naturalized.” A prominent Jew, Jacob Henriques in the mid-18th century claimed that ‘his father had planned the establishment of the Bank of England (1694 CE)’. Werner Sombart wrote in ‘The Jews and modern capitalism’, “Under the Commonwealth the most famous army-contractor was Antonio Fernandez Carvajal, ‘the great Jew’, who came to London sometime between 1630 and 1635, and was very soon accounted among the most prominent traders in the land. In 1649 he was one of the five London merchants entrusted by the Council of State with the army contract for corn. It is said that he annually imported into England silver to the value of £100,000. In the period that ensued, especially in the wars of William III, Sir Solomon Medina (‘the Jew Medina’) was ‘the great contractor’, and for his services he was knighted, being the first professing Jew to receive that honour.”

Society, culture and religion

Wikipedia stated, “England was ruled at the national level by royalty and nobility, and at the local level by the lesser nobility and the gentry. Together they comprised about 2% of the families, owned most of the good farmland, and controlled local government affairs. The aristocracy was growing steadily in numbers, wealth, and power. From 1540 to 1640, the number of peers (dukes, earls, marquises, viscounts, and barons) grew from 60 families to 160. They inherited their titles through primogeniture, had a favoured position in legal matters, enjoyed the highest positions in society, and held seats in the House of Lords. In 1611, the king looking for new revenue sources created the hereditary rank of baronet, with a status below that of the nobility, and no seat in Lords, and a price tag of about £1100. The vast land holdings seized from the monasteries under Henry VIII of England in the 1530s were sold mostly to local gentry, greatly expanding the wealth of that class of gentlemen. The gentry tripled to 15,000 from 5000 in the century after 1540.” The English society was structured hierarchically with a small titular peerage acting as the apex of the social architecture. They had hereditary titles, wealth, and were skilled in warfare. Below them, the gentry composed of the distinguished peoples among the commoners. The gentry served as deputies to the aristocrats, militia captains, and were the backbone of state administration and governance. Below the gentry, yeomen were village elders, tax collectors, local police. They owned freehold land to participate in parliamentary selections. At the last layer of the hierarchy, rural labourers, tenant farmers, and cottagers were the vast majority rural population who were dependent on waged employment. In the urban society, traders, bankers, and shopkeepers occupied layer just below the aristocracy. Below them were the artisans, and apprentices who participated in civic governance and church affairs. The labourers acted as the last level of urban dwellers. The entire structure accepted without much controversy ‘the monarch’s claim to be God’s vice-regent on earth’. At the same time, monarchy would not bypass the existing laws and customs. During the eventful period of the Tudors, Stuarts, Hanoverians the British society was subjected to two trajectories that were working simultaneously: Culture and Religion – the British society was suddenly steered towards Protestantism followed by a period when catholic-leaning monarchs tried in vain to return to the roots of Christian social lifestyle; finally, Protestantism became popular during 18th and 19th century, but only as a prelude to overall de-Christianisation of the UK in the 20th century (that was an unpredicted resultant of secular policies of governance). The structured hierarchy of Catholicism and its religious doctrines created a religious faith-based society and a medieval aura in England, Wales, and Scotland. The Protestant reformation opened the path for logic and rationality-based society, and Britain firmly moved into that road during the Northern Renaissance. By 18th century, Wikipedia notes, “forms of Protestant nonconformity, including Congregationalists, Baptists, Quakers and, later, Methodists, grew outside of the established (Anglican) Church.” Even though the experts and academicians differ among themselves on the reasons, it can be established that, the more wealth the capitalist colonial ventures earned, the farther the society moved away from Christian family and society norms. Political Economy – England and Scotland monarchy vacillated between absolute and constitutional monarchy on one side, oligarchy-driven republicanism on another side, and both of these forces engaged in bitter struggle till the dawn of 18th century: sometimes openly during mid-17th century but most of the time covertly. However, as soon as the Hanoverian dynasty took over, the monarchy took another path, it became a partner of the bourgeois oligarchy in spreading a world-wide empire ‘of the capital, by the capital, for the capital’. There was a tremendous impact of the capitalist colonialist policies of the UK government in the British society after mid-18th century – not only the patricians (aristocracy, gentry, trader, banker) dedicatedly became business-oriented with a wealth mindset, the plebians also (artisans, yeomen, tenant farmers, labourers) were on the lookout for opportunities to jump into the colonial bandwagon (not as a capitalist but as a fortune seeker). In the beginning of 19th century, Britain was still a politically conservative country with no participation of plebians in the political and governance process. As the colonial capitalist ventures brought economic growth, and the voting rights were granted to common people, even the common people believed that they were responsible to enlighten the non-European uncivilized world (through their colonial capitalist initiatives). The socio-economic and socio-political state of affairs were such that the British plebians by and large remained aloof from the 1848 revolution that stormed different European states. The British society changed little before the WW-II so far as the colonial mindset was concerned.

Aboriginal communities wiped out in North America, Australia Indigenous civilizations obstructed across Africa, south Asia

Displaying the same characteristics (as visible from the Spanish and Dutch colonial ventures) the British colonial system performed in three different roles, both based on racist supremacism and explicitly violent methods: In regions like Australia continent and North America continent, the British colonial policy was: as much indirect and direct genocide of the aboriginals (who were primarily hunter-gatherers technologically far backward) as possible. Simultaneously migration of the English, Scottish, and Irish people from the UK was encouraged by the government who would get settled in the new lands so that the newly acquired landmass becomes a state mostly inhabited by British, and to a lesser extent, by other west European peoples. Different academicians estimated the number of indigenous Australians in 1788 CE differently – between 300,000 and 1500,000. In 1901 CE, fewer than 100,000 remained, rest were decimated through killing, European diseases, expropriation of native land, and dispossession of forest lands. According to Michael Cannon (1993), “The white newcomers were determined that the whole continent of Australia should belong to them – the soil, the beasts and birds, the rivers and fish, the minerals and trees. A dream of total possession had taken hold of normally stolid men. Such lust for new lands ran through the whole British race that monarch and lowliest labourers alike glowed with the glory of creating a new empire.” Colonial governors appointed by the British government ordered their troops to kill indigenous people and to kidnap their children as unpaid laborers (Kiernan, 2007). Rape was used as a mechanism of terror to destroy indigenous communities. About the depopulation of pre-Columbian peoples living in North American region (which is now known as the states of USA and Canada), Wikipedia noted “While it is difficult to determine exactly how many Natives lived in North America before Columbus, estimates range from 3.8 million, as mentioned above, to 7 million people to a high of 18 million.” (refer link 🡪 https://en.wikipedia.org/wiki/Population_history_of_the_Indigenous_peoples_of_the_Americas) By 1900 CE, more than 90% of the aboriginals were gone. An indigenous American activist-scholar, Ward Churchill noted in 1997 that, the English peoples are “global leaders in genocidal activities, both in terms of overall efficiency – as they consummated the total extinction of the Tasmanians in 1876 – and a flair for innovation embodied in their deliberate use of alcohol to effect the dissolution of many of North America’s indigenous peoples.” In ‘John Lock John Locke’s Theory of Property, and the Dispossession of Indigenous Peoples in the Settler-Colony’ Calum Murray mentioned, “Locke might well be regarded as an ‘apologist for the expropriation of indigenous lands through [settler-] colonial expansion’ by drafting a property theory that both justified the appropriation of Native American lands by European settlers”. In Australia and North American continents, the British settlers manipulated the doctrine of terra nullius to expropriate native lands by all possible means – the doctrine suggests, the lands belonged to no one, (since the indigenous people did not have concept of land ownership, they shouldn’t enjoy any right to their lands!) In Africa, the British colonialists encountered communities which were more advanced than the society of hunter-gatherers – abduction from rural areas of African coasts and transporting to Americas became a lucrative business for the west European colonialist powers. The British merchants and traders controlled close to half of the overall slave trade which lasted for about 350 years (until mid-19th century). After 1807 CE when the British government declared slave trade as illegal, Africa became a source of raw materials and destination of finished goods – this destroyed the agricultural balance (with inclination towards cash crops) and thwarted local industry (with cheaper goods from Europe). In an essay ‘The Impact of Colonialism on African Economic Development’ published by University of Tennessee – Knoxville, Joshua Dwayne Settles wrote, “The colonial authorities also promoted the minor crops of peanuts and sesame while reducing dietary staples such as millet and sorghum. This led to inadequacy of the food reserves and subsequently, chronic malnutrition and famine.” In order to efficiently transport raw materials (agricultural produces and mining output) to coastal markets and ports, the British (and French) government built and operated railways – hence apart from such goods carrying railways, no development of roads and railways occurred beyond coastal regions within the colonies. Artificial states were created by the colonial capitalist powers (conforming to their colonial possessions) without paying attention to the original political architecture. Last but not the least, was the impact on local religion, education, and culture – ‘Anglo’ and ‘French’ mode of social life was made popular by the marauding British (and French) oligarchy. In south Asia, the British colonialists encountered communities who had advanced socio-political and economic systems, but lacked the sophistication of arms-ammunitions. The colonial wars by EIC in south Asia established the British empire of capitalist and colonialist exploitation. Population censuses carried out by the British colonial regime reveal that the death rate increased from 37.2 deaths per 1,000 people in the 1880s to 44.2 in the 1910s, life expectancy declined from 26.7 years to 21.9 years. The chairman of East India and China Association stated in the British parliament in 1840 CE: ‘This company has succeeded in converting India from a manufacturing country into a country exporting raw produce.’ British manufacturers flooded Indian market, but Indian producers were handicapped with exorbitant taxes and duties that made it impossible for them to sell within their own country. Poverty across entire south Asia increased dramatically and people became vulnerable to hunger, malnutrition, and disease. Dylan Sullivan and Jason Hickel wrote, “To make matters worse, British colonisers established a system of legal plunder, known to contemporaries as the “drain of wealth.” Britain taxed the Indian population and then used the revenues to buy Indian products – indigo, grain, cotton, and opium – thus obtaining these goods for free. These goods were then either consumed within Britain or re-exported abroad, with the revenues pocketed by the British state and used to finance the industrial development of Britain and its settler colonies – the United States, Canada and Australia.” There was however, a more dangerous impact for the south Asian region – before the British government withdrew from the subcontinent, they permanently fractured the social cohesion between communities professing different religions. As it happened in Africa, the superficially created state boundaries became a permanent source of discord and conflict between neighbouring states.

What were the political and economic circumstances in The UK during 1650 to 1900 CE that were favourable for industrial capitalism?

1) The British Isles rapidly merged into a politically centralized entity. As part of expansion, kingdom of England added Welsh region, kingdom of Scotland joined the English crown, finally North Ireland also remained attached to the crown – the combined entity, British monarchy fulfilled those factors which eluded the Dutch Republic: (i) a single centralized governing authority whose writ ran across the entire territory, (ii) a uniform economic policy that created a single market (for produces and labour) across the territory, (iii) a uniform legal framework that ensured ownership of means of production across the peninsula and in the colonies, across generations irrespective of the owners’ social background.

2) London hosted the first central bank (Bank of England) in 1694 CE which opened the avenue to the fractional reserve banking system. Entrepreneurs, merchants, and owners of plantations and industries would get credit from bank (far beyond the total amount of deposits at the bank) as they would need – complete transformation of the credit system transformed London into world’s largest financial and banking hub. But, more importantly the British government, through decades of experimentation, developed a “framework of institutions, mechanisms, and techniques for the management of a rapidly accumulating national debt” wherein the Treasury and the Bank of England would serve the state as well as meet the financial needs of agriculture, internal trade, overseas commerce, and rapidly expanding global empire.

3) The merchants and bankers in the UK accumulated extensive money capital from mercantile and slave capitalism which they invested in new industrial ventures. The investors and engineers worked as partners in risky initiatives, success in which finally created the ‘industrial revolution’. That, in turn, was the beginning of ‘industrial capitalism’. Joyel Mokyr wrote in his presentation titled ‘The Industrial Revolution and the Netherlands: Why did it not happen?’ for the 150th anniversary conference organized by the Royal Dutch Economic Association, Amsterdam, held in Dec’1999, “In Britain the key to success was precisely in the ease by which manufacturers linked up with people who studied nature (as the term “scientists” seems anachronistic and too confining) and to make the new ideas actually work on the shopfloor. British engineers and technicians engaged in a successful conversation with British businessmen and persuaded them that money could be made from the new technology. Once that became obvious, new generations of inventors saw an incentive to make further improvements.”

4) The British Isles had a lot of natural resources. Availability of coal and iron was one of the significant factors in Industrial Revolution in the UK. As ‘The Cambridge History of Capitalism’ (volume I) noted, “Britain developed coal as a source of power and fuel long before the late eighteenth-century industrialization. […] Builders experimented in the use of coal for domestic heating and by the 18th century Newcastle coal heated London houses. Coal also provided heat for many industrial processes from brewing beer to refining copper. Iron masters experimented in using coal…” And, and as the colonial empire expanded, the industrialists and engineers would source required raw materials from the colonies across the world.

5) At the beginning of the 17th century, the merchant and banking community in England and Scotland were divided into different ethnic and religious lines that can be grouped into two – Protestant Christian (English, Scottish, mixture of English, Scottish sub-communities), and Jewish (Sephardim Judaic, converso). Within the next hundred years, three distinct sub-communities were fused into one oligarchy in the UK – (i) Protestant Christian merchants and bankers, (ii) Jewish merchants and bankers (iii) English Protestant and Catholic aristocracy who owned large tracts of arable lands (since the beginning of the Tudor regime). The new oligarchy shared the power with the British crown, and increasingly dictated the economic and monetary policies of the British Empire. Apart from the fact that many wealthy bankers and merchants of Jewish descent made England their home, other prominent Jewish bankers and traders joined the British oligarchy to expand their business across the world.

The above-mentioned factors and actors made the UK (England and Scotland excluding Ireland) the place of birth of industrial capitalism (that appeared after agricultural capitalism, mercantile capitalism, and slave capitalism grew in the UK, and also co-existed with them). Industrial capitalism very quickly bloomed in other regions of west Europe within next half a century.

2.3. Rise of Capitalism & Colonialism in West Europe – A Recapitulation

Section 2.2 discussed the advent and growth of different shades of capitalism in Italian Peninsula, Spanish Empire, the Netherlands, and the UK. The discussion was neither on nature and characteristics of capitalism nor on the overall economy and politics of those four countries – it is essentially an inquiry into the different stages of evolution of different shades of capitalism in different geographical regions within west Europe. Even after such in-depth inquiry, it would still be quite a challenge to identify the factors which could be identified as pre-requisites and reasons for the development of capitalism and colonialism in west Europe. However, it can be stated with full conviction that, in absence of the following five factors, no form of capitalism and colonialism would appear:

1. A coercive state with substantial landmass, natural resources, and growing population
2. A banking system with central banking function and fractional reserve banking system of creating ‘money’
3. Jewish and Protestant merchant and banking community who would provide easy credit to the business community, and establish foreign trade network
4. A propensity towards application of theoretical knowledge into everyday life
5. A captive land and population (in the same country or in colonies) to source raw material and energy at cheap price, and to sell produced goods

This should be categorically mentioned that, there was an unbroken link among ALL cases of appearance of capitalism and colonialism. In absence of the mercantile and agrarian capitalism in Italian Peninsula, the Iberian Peninsula wouldn’t witness slave capitalism; the mercantile and slave capitalism in Dutch Republic was midwifed by the most prominent section of the Iberian Peninsular capitalists and colonialists; similarly, the British Isles could host the industrial capitalism because the Dutch Republic already experienced capitalism and colonialism. Throughout the last millennium, capitalism and colonialism helped improving the overall productivity of the economy of different regions of west Europe (even if GDP or GDP per capita can’t represent the entire economic story because of the obvious reason that these figures are average, these figures can point out the overall trend of the economy). As noted in ‘The Cambridge History of Capitalism’ vol 1, “… during that long period of recovery up to the early modern period Europe was transformed from an economic backwater into the most advanced region in the world. By 1500 GDP per head in the leading areas of Europe, that is Spain, England, the Low Countries (divided into Belgium and Holland in the table) and Italy (comprising mainly northern and central Italy) was three to five times that of a subsistence income, estimated at some 400 dollars in constant 1990 prices.”

Tab: 2.7 GDP per Capita of Europe in 1990 International Dollars 

Year	Italy central-north	Castile	France	Holland	England
1300 CE	1808	—	—	—	716
1400 CE	1788	—	—	1195	1070
1600 CE	1350	1382	1300	2662	1054
1800 CE	1430	1205	1410	2408	2125
1913 CE*	2564	2255	3485	4049	4921

(note: * marked data source – Broadberry and O’Rourke 2010)

“The decline of feudalism in Western Europe began with the series of late medieval revolts of peasants and craftspeople prompted by economic crisis (that started with the bubonic plague during mid-14th century – author). The royal territorial states which initially emerged to guarantee the continued class rule of the landlords against the upsurge of producers formed a critical political bridge between feudalism and capitalism. By the sixteenth century the balance of class forces forced these states to provide an arena for the generalization and integration of capitalist relations of production, while the breakdown of the feudal order allowed the differentiation of producers into capitalists and wage workers, a process which was greatly aided by the state in England, and to a lesser degree on the Continent. Expansion of production within this new economic order necessitated the creation of home and world markets in which commodities, which was the form products took, could be exchanged. Once again, the state backed the process. Thus, from its beginnings, capitalist development was not merely market-driven. Rather, markets emerged at the national level only as a result of prolonged political and class conflicts, and were established by the coercive, legal and political machinery of the early modern absolutist states which gradually cleared obstacles to them. The bourgeois political and social revolutions in Holland, England and France overthrew the feudal ruling classes of these territorial states and then harnessed them to complete the development of markets and the full entry of capital into agriculture and manufacturing. The revolutionaries, like the protagonists of the late medieval revolts, were petty producers led by the capitalist class that had emerged from their ranks. The resulting development of export-oriented manufacturing combined with colonialism, the slave trade and the plantation-slave system guided by the mercantilist state proved crucial not only to facilitating ongoing capital accumulation but also to overcoming Europe’s backward and peripheral global position by establishing first military/political and later economic superiority over the non-European world. …

“Nations like Italy and Germany that failed to become unified states saw their nascent capitalist development arrested, while capitalism was consolidated in Holland, France and England by the constitution of a territorial state. The gradual emergence of capitalist markets and capitalist relations of production was made possible by the state. The critically important process of primitive accumulation was assisted by the political and legal force of the state at the local and eventually at the national level. The emergence of overseas markets and colonialism were based on the support of the state.”

3. THE USA: NEW FRONTIER OF CAPITALISM & COLONIALISM

Colonialism, capitalism and the Capitalist World Order didn’t confine themselves within west Europe. It was transported to the shores of North American continent. Considering the above mentioned five factors, it can be easily concluded that the USA was a fertile platform for capitalism and colonialism to thrive (especially, after it’s cessation from the British Empire at the end of 18th century). Indeed, all those five factors were present in the newly independent USA. It would be even more fascinating story how all shades of capitalism were established in the USA very rapidly, and how the Capitalist World Order accommodated the USA as its greatest core member. It won’t be an exaggeration to state that, during the initial five decades of the 20th century, the (world order) leadership got transferred from the UK to the USA appeared which was relatively new in the geopolitical horizon as a state (but as a community, it was the same British and other west Europeans – ‘old wine in new bottle’).

How capitalism in the USA took wings is an oft-repeated story – whether complex technology machinery like airplanes, spacecrafts, fighter aircrafts, aircraft carriers, submarines or consumer goods like passenger cars, refrigerators, televisions, telephones, computers or manufacturing processes like assembly shop, oil refinery – the capitalists and their economic system in the USA commercialized every possible technical concept and/or goods that evolved in west and east Europe and Asia – such intense commercialization was unheard of in the recorded history of human civilization. As such, capitalism due to competition among the different communities of bourgeois, promotes conflict and war (as mentioned in ‘The Cambridge History of Capitalism’ vol 2, “The idea that capitalism not only means war but wants war persists on two main foundations. One is a simple post-hoc-propter-hoc argument: first, global capitalism, then global war. The other is a dark view of the world that disputes what is visible on the surface: that capitalism decentralizes economic decisions, and that democratic government truly governs. Instead, it views the separation of business from the state as a façade behind which lobbying and conspiracies go on invisibly”). Utilizing the economic and technological growth opportunities during the WW I and WW II, the capitalist class in the USA not only propelled their country as the top economic and military power, but they also made it sure that as the 20th century drew a close, west European countries would increasingly appear as pygmies when compared with the USA! I won’t deliberate in detail on the economic history of the USA. However, it won’t be a justice to this essay if a brief outline is not provided here about how the forces of capitalism and colonialism established itself on the USA soil, and the USA became the leader of the Capitalist World Order:

1. Virginia Company of London, an English joint-stock company established in 1606 by royal charter issued by King James I, made landfall in 1607 at the east coast of what is known as USA now. England took over the initial settlements on the shores of North Atlantic Ocean in the east of the landmass called New Amsterdam from the Dutch West India Company in 1664 CE and renamed it as New York; by the turn of the century, the thirteen British colonies contained 2.5 million people. The Second Continental Congress In 1776 declared independence of the colonies as the United States of America. The war of secession ended with the peace treaty of 1783 CE. A convention wrote a new Constitution in 1787 CE and it was adopted in 1789 CE. A presidential form of government was implemented with George Washington as the first president and Alexander Hamilton as chief adviser. Purchase of the Louisiana Territory (828,000 square miles i.e., 2,144,520 sq. km.) from France by President Thomas Jefferson in 1803 CE doubled the size of the United States. All the leaders of American independence were land-owning aristocrats – the oligarchy (British Protestant and Jewish) settled in the USA (and the UK) took just 110 years to create a new homeland and a new power base in North American continent.
2. The ‘philosophy’ behind the territorial expansion of the USA beyond the west of Louisiana (till the Pacific) was termed as Manifest Destiny – similar to the Old Testament ethos, the oligarchy believed that it was their ‘moral duty’ to exterminate the aboriginals and acquire the landmass for their settlement and prosperity. It opened up more business opportunities through the combination of ‘slave capitalism’ and ‘mercantile capitalism’ – new land for farmers and slave owners provided a huge impetus to plantations. Even after slavery was banned by 1804, the southern states continued the institution for making the plantation business more profitable. During the reign of Abraham Lincoln as president, a civil war broke out as the southern states seceded from the Union to form their own country (the Confederate States of America). Even though the civil war had been portrayed as ‘the war for abolition of slavery’, in reality, it was the capture of state power in order to mobilize the state resources and the state institutions for the onward journey of industrial capitalism in the USA. In retrospect, we can compare the series of events that established the capitalist and colonialist economy backed by state institutions in the UK (centered in kingdom of England) and the USA (centered in the thirteen British colonies) – civil war in England between 1642 and 1651 CE brought the British Protestants in state power, but by 1685 CE it became clear that, the Protestant and Jewish oligarchy was pushed out from state power and was sliding down into an abyss, during 1688 to 1689 CE British Protestants, Dutch Protestants, and Jewish elites staged a comeback and through William the Orange they successfully invaded the UK and installed a pro-capitalist pro-trade pro-Jewish Protestant regime which entrusted the bankers and merchants to establish a central bank (Bank of England); looking into the history of the USA we find, war of independence between 1776 and 1783 CE brought the British Protestants in state power, but by 1850 CE it became clear that, the Protestant and Jewish oligarchy was not in the driver’s seat of the state power and couldn’t grow their (by then, industrial capitalism was well established) capitalist initiatives due to strong economic performances by the southerners, and during 1861 to 1865 CE British American Protestants, and Jewish elites staged a comeback that successfully erased the southern challenge (of the economic model) by implementing a pro-(industrial) capitalist pro-trade pro-Jewish Protestant policy, and handing over the bankers and merchants the authority to establish a central bank (Federal Reserve). Was such a similarity of purpose (as well as the ensuing events, and bloody wars) just a coincidence?
3. By 1900 CE, the USA became the world’s leading industrial power primarily due to the massive influx of capital and manpower from west (and east) Europe. While millions of immigrant workers and farmers belonged to west European ethnicities (mostly English, Scottish, Irish) the capitalists mostly belonged to Jewish (Sephardim and Ashkenazim Jews who by religion were either Judaic or converso) and Protestant English, Scottish, Dutch communities. After the American civil war decimated the agriculturist mercantilist (capitalist) forces, industrial capitalism and its embodiment, the corporations, grew into giant companies with offices in the USA as well as other states in the world. ‘The Cambridge History of Capitalism’ vol 2 noted, “in an unsigned Supreme Court decision, the provisions of the fourteenth amendment (to the US Constitution in 1868 – author) were extended to corporations in the case of Santa Clara County v. Southern Pacific Railroad (1886) and corporations thereby achieved most of the rights of natural persons under American law as well as potential immortality, something which previously had been the exclusive domain of gods and governments. These changes have, in turn, increasingly led corporations to become rival forms of human organization to that of the nation-state which had created them. In 2011, for example, Walmart stores had over 2 million employees and annual revenues that exceed $420 billion. This exceeds the population of Latvia and was more than the GNP of Austria, the twenty-seventh biggest country in the world in 2011 in terms of GNP, which has a conscript army and a seat in the United Nations. So large and powerful have some corporations become that now not only are they “too big to fail” but they have been known to dictate national policy… one prescient observer (Charles Adams) forecast the trend over one hundred and forty years ago: ‘Our great corporations are fast emancipating themselves from the state, or rather subjecting the State to their own control’…”. Massive railways network was constructed, and power plants, petroleum refineries, and manufacturing factories were built ((as private corporations). The state was run by the oligarchy (bankers, businessmen, and aristocrats) whose corruption, and manipulation became legendary. The Wall Street Crash of 1929 CE (a banker-politician collusion that resulted in unforeseen hard-landing of the American economy with it) impacted beyond the borders, and pulled down the economy of Europe (and its colonies) as well. President F. D. Roosevelt’s ‘New Deal’ programs (social security, a minimum wage, unemployment relief etc.) stabilized the economy a lot (before WW II came simultaneously as the ultimate saviour and the great opportunity).
4. The Jewish community (Judaic, and converso) contributed immensely towards establishing the American banking and industry. Refer [link 🡪 https://www.jewishvirtuallibrary.org/banking-and-bankers ] for a lengthy discussion on this matter, “Already in early colonial times individual Jews were active in America as money brokers, such as Asser Levy , who functioned in New York City during the second half of the 17th century. Often such figures were helped by their extensive family or fellow-Jewish contacts overseas, as was the case with David Franks, who was instrumental in raising money for the British army during the French and Indian War with the aid of his brother Moses, a London financier. The best-known Jewish financier of the times was the legendary patriot Haym Salomon, an immigrant from Poland who succeeded under extremely trying conditions in raising large amounts of desperately needed cash for the American Revolution by negotiating bills of exchange with France and the Netherlands. Yet another figure who helped finance the war for American independence was Isaac Moses, later among the founders of the Bank of New York. It was not until the middle of the 19th century, however, with the arrival in America of a large German-Jewish immigration, that Jewish banking houses on the European model came to exist in the United States. Some of the founders of these firms, like Philip and Gustav *Speyer of Speyer & Co., went to the United States as American representatives of already established European concerns; others, like August Belmont, crossed the Atlantic with a degree of previously acquired banking experience; still others, like the Lehman brothers, Meyer and Emanuel, were essentially self-made men. Among other Jewish banking houses started by immigrants from Germany that developed into financial powers during the years 1840–1880 were Kuhn, Loeb Co., Lazard Frères, J.W. Seligman Co., Goldman, Sachs & Co., and Ladenburg, Thalman & Co. All of these firms functioned essentially as investment bankers – the more established field of commercial banking offered relatively few opportunities to the German-Jewish immigrant – a capacity in which they helped to finance large numbers of American utilities and corporations whose rapid growth throughout the latter half of the 19th century created an insatiable demand for capital. To raise such funds these Jewish houses not only freely utilized their widespread European connections, particularly in France, England, and Germany, but created a chain of interlocking associations and directorates among themselves which enabled them quickly to mobilize sums many times larger than their individual holdings and to compete successfully with gentile firms several times their size. Not only was it common for the children and relatives of a given firm to marry each other, but marital alliances frequently occurred as well among different Jewish banking families, as was the case with the Loebs, the Kuhns, the Schiffs, and the Warburgs. Frequently too the children of such families married into families of large German-Jewish companies in a variety of other fields and the latter would then proceed to raise capital through the banking houses which they had joined. Socially, the result of such commercial and kinship ties was the creation of a German-Jewish banking and business aristocracy based in New York City whose descendants continued for over a century to play a dominant role in the financial, cultural, and political life of the American Jewish community, and to a lesser extent, of the nation at large. The contribution of such Jewish banking houses to the process of capital formation in the United States in the late 19th and early 20th century was considerable by any standard. Several of them, such as Speyer & Co., August Belmont & Co., and J. & W. Seligman, raised large sums for the federal government both during and after the Civil War (the Jewish house of Erlanger Co., on the other hand, obtained sizeable loans for the Confederacy); others, such as Kuhn, Loeb, were particularly active in the westward expansion of the railroads. In the late 19th century Seligman Co. alone was capitalized at an estimated $10,000,000, while during the Russo-Japanese War of 1905 Jacob Schiff of Kuhn, Loeb was able on short notice to float a bond issue of $200,000,000 on behalf of the Japanese government.”
5. The USA participated in both the WW I and WW II – during both the wars, when west and east European communities were killing each other to fundamentally maintain the capitalist colonialist benefits undamaged by protecting their own turfs (across the globe), the USA business owners did brisk business of selling arms, ammunitions, logistics items to any party who would pay for it, and after the initial fury was over in the battle field, the USA would declare war against the block who was on the back foot. Such posturing would put the USA in the winners’ side, which in turn, would bring all the economic benefits of winning the war! Essentially, the ruling oligarchy of the USA transformed ‘war’ into most profitable ‘business’ during the 20th century! On the other hand, between 1914 and 1945 CE the west European oligarchy squandered their wealth and power fighting terrible wars among themselves. Between 1945 and 1955 CE the baton of world order hegemony automatically got shifted to the oligarchy of the USA – many of the erstwhile colonies of the west European powers became hunting ground for the USA oligarchy (who were just descendants of the same old west European oligarchy)! And the new American ‘European’ elites were seeped in same capitalist colonialist ideology as their forebears did. The only difference was colonialism was practiced in a new format – instead of physically invading and occupying the distant lands, a small group of local elites would be trained in western education, culture, language, business practices, and they would be catapulted into state power through so-called democratic election, and thereafter the same group of elites would manage the political and economic affairs of the targeted country in a way that would maximize economic benefits for the multi-national corporations (MNC) based out of the USA and other core west European countries. Technologically superior military of the USA directly provide support to the vast economic empire built by the MNCs which in turn support the economy of the USA and other core states.
6. Capitalism Colonialism and the Capitalist World Order led by the USA encountered a spirited ideological adversary in the 20th century – the erstwhile Russian Empire transformed itself into a communist society-cum-state (the USSR) on the basis of socialist/communist political economy advocated by two German philosophers and political activists: Karl Marx and Friedrich Engels, and embellished by the Russian intellectual politician, Vladimir Lenin. After the WW II, the USSR created a regional trade system (across east European countries) ‘Warsaw Pact’ that proactively spread the ideology of Marxism across the colonies of west Europe – many of those colonies became independent and became follower of the ‘Soviet camp’ while many others became enamoured of the capitalist colonialist system and joined the ‘USA camp’. The aftermath of WW II is known as the ‘Cold War’ during which the two camps confronted each other in the field of military research, Space research, and atomic research. The Cold War ended when the leadership of the USSR dissolved the state between 1989 and 1991 CE into statelets with the same boundaries of the USSR administrative regions. In the post-cold war world, the political leadership of USA (representatives of capitalist colonialist bourgeois who own and lead the capitalist world order) would force the entire world to follow their way of ‘democracy’ (read, neo-colonialism where they would share power with the local/regional/home-grown capitalists, who in turn will deal with the illiterate and mis-informed citizens of the state just like the west European colonialists did till mid-20th century) and ‘market economy’ (read, neo-capitalism where they would share wealth with the local/regional/home-grown capitalists).

4. HISTORICAL REGIONAL TRADE SYSTEMS Vs. MODERN WORLD-SYSTEM

4.1. Modern World-System

After WW I when ‘international relations’ (IR) appeared in the academic discourses as a separate subject, mainly three theories – Liberalism, Realism, and Marxism – formed the basis of academic study in that arena. New derivatives notwithstanding, those remained the bedrock of IR study. Those theories approached the global politics from three different perspectives – Liberalism attached importance to trade and cultural diffusion through multilateral international institutions promoted by the Capitalist World Order, Realism opined that state security was the safest and most desirable action for a state and only that would maintain a peaceful world, and Marxism explained the inequality and dependence among the countries as the primary cause of disturbances in the world politics. Within the Marxist camp, there are multiple approaches. The most distinguished approach using Marxism is called ‘World-System Analysis’ which was proposed by Immanuel Wallerstein (the analysis considered inputs from Marxism as well as non-Marxist theories). In short, it ‘is a multidisciplinary approach to world history’ that underscores the overall system (and, not an individual state) as the primary unit of analysis. The ‘World-System Analysis’ framework was built using key Marxist tenets that identify the economic relations among the countries as the primary driver of international relations, and depending on nature of trade and commerce it categorized all countries in the world under three groups – ‘periphery’, ‘semi-periphery’, and ‘core’. According to Wallerstein, the modern world-system is a world-wide capitalist economy which emerged around 16th century in Europe with different west European powers acting as successive leaders of that world-wide system.

The ‘core states’ have been identified as the wealthiest and most powerful both economically and militarily, most advanced in scientific research and technological innovation, highly industrialized with base for specialized manufacturing. These states have strong central governments, bureaucracies and complex state institutions that help manage large tax base, and maintain infrastructure. A group of core states (located in west Europe and North America) compete for economic dominance, and hegemony over the semi-periphery and periphery states. Outside powers have almost no control while the core states had significant control over the semi-periphery and periphery states. The dominant core state during a specific era, as per Wallerstein, exhibit the following dominances over the other core states:

• Productivity dominance – higher-quality products at a cheaper price compared to others
• Trade dominance – other countries buy more of its products compared to the others
• Financial dominance – more money flow into the country than is leaving it
• Military dominance – competitive edge over its rivals (among the core states)

The ‘Peripheral states’ have been defined as the poorest and weakest both economically and militarily, that lack

scientific research and technological innovation capabilities, that are economically least diversified and least industrialized. These states have relatively weak governments and bureaucracy, weak state institutions, small tax base that can hardly support infrastructural development. Main economic activities are agriculture and extraction of natural resources (which is exported to the core states that converts the materials into manufactured products). Such peripheral states are found outside Europe, such as in Asia, Africa, and South America – to be more precise, these states are the erstwhile colonies of the imperialist west European powers during the past five centuries. These states are extensively influenced by the core states and their MNCs and are forced to follow policies that bring economic benefits mainly to the core states but hinders their own economic prospects.

The ‘Semi-peripheral states’ are those states that are midway between the core and periphery. ‘They tend to be countries moving towards industrialization and more diversified economies. Semi-peripheries exert some amount of influence on the peripheral states, while the influence of the core states over the semi-peripheries are not overwhelming. These states generally strive to transform themselves into ‘core’ states. During the 20th century Australia, and Canada, the countries which were British colonial settlements earlier, were semi-peripheral status, but both moved into the group of ‘core’ states in the 21st century. States like Brazil, Russia, India, China, South Korea and South Africa are considered as semi-peripheral since the mid-20^th century.

The world-system analysis (and its predecessor, Dependency theory) both define the relationship among the three blocks in economic terms that can be represented diagrammatically as below in fig.4.1:

As per Wallerstein’s analysis, the modern world-system allows the core states collectively dominate the global economy and (indirectly) the global politics. Both Wallerstein and Braudel thought that ‘the creation of a world economy was the logical result of the forceful and nonstop expansion of capitalist Europe after the 15th century.’ West Europeans subjugated the ‘periphery’ to their own capitalist colonialist interests. Thus, the modern world-system is the (militarily) enforced world order that has been put in place during the past five centuries of imperialist colonialist expansion of the west European states in general, and bourgeois aristocrat oligarchy in particular, who were/are imbibed in the Colonialist Capitalist ideology. The fig.4.2 shows a world map of late 20th century with the countries denoted by the world-system status (differentiation into core countries, semi-periphery countries and periphery countries). This is based on ‘Trade Globalization since 1795’ by Christopher Chase-Dunn, Yukio Kawano and Benjamin Brewer, published in American Sociological Review, February’2000, Volume 65. [Link 🡪 https://en.wikipedia.org/wiki/World-systems_theory].

Fig: 4.2

Compared to the above map which depicts the modern World-System during the late 20th century, if we look backward into the British empire, French empire, and other European colonies during 1914 CE [link 🡪 https://commons.wikimedia.org/wiki/File:Colonisation_1914.png ] as shown in fig.4.3, we can easily discern the dynamics of colonialism and capitalism for jointly constructing the modern world-system. It can be noted that the UK, France, the Netherlands, Belgium were the dominant core states in the world at that point of time; two of the UK’s settlement colonies – Canada, and Australia – later transformed into core states (as we notice in fig.4.2) while the colonies of the core states – entire African continent, south-east Asia, south Asia – were/are still peripheries (refer fig.4.2). During late 20th century, India moved into the group of semi-periphery states. Similarly, other core states in the early 20th century (like Spain, Portugal, Germany) also possessed huge landmass in Africa and Asia continents most of which are still counted as peripheries.

Fig: 4.3

J A Hobson, in his book Imperialism (edition 2), provided an excellent summary on the colonial empires built by the west European powers. Table 4.1 provide details of the colonial empire built by the west European countries in 1905 and in 1935 CE.

Tab 4.1

Country	Parent country Area (sq. mile)	No. of Colonies	Colonies Area (sq. mile)	Parent country Population	Colonies Population
Britain: 1905	120,979	50	11,605,238	40,559,954	345,222,239
1935	94,633	—	13,270,793	46,610,000	449,378,000
France: 1905	204,092	33	3,740,756	38,517,975	56,401,860
1935	212,750	—	4,617,514	41,880,000	65,179,000
Netherlands: 1905 1935	12,648	3	782,862	5,074,632	35,115,711
	13,128	—	791,907	8,290,000	60,971,000
Germany: 1905 1935	208,830	13	1,027,120	52,279,901	14,687,000
	181,822	—	—	65,350,000	—
Italy: 1905 1935	110,646	2	188,500	31,856,675	850,000
	119,696	—	906,213	42,217,000	2,393,000
Portugal: 1905 1935	36,038	9	801,100	5,049,729	9,148,707
	35,699	—	807,637	7,090,000	8,426,000
Spain: 1905 1935	197,670	3	243,877	17,566,632	136,000
	194,216	—	10,993	24,242,000	1,000,000

Growth and decay of regional trade systems at different points of time in different geographical foot-print in the post-neolithic history of humankind has been a spontaneous and continuous socio-economic process – the modern world-system is an expanded regional system (based on capitalist colonialist economy) that was thrusted upon the world during the second half of the last millennium, and by 2008 CE clear signs of decay of the present world-system were visible (this analysis has 2000 CE as the boundary limit, hence it is beyond the scope of this essay). The present world-system outsmarted other contemporary regional systems that ascended during the past five centuries, and the combined oligarchic leadership of west Europeans and Jews who controls the modern world-system, continuously undermined all other regional systems, deploying various options among which military force and financial sanctions were/are the primary ones. The modern world-system was developed over the centuries through coercion and manipulation by the west European powers to grab lands and resources across the world and establish a world order. Hence, it will be justified to mention that the world-system finally morphed into the (enforced) Capitalist World Order.

4.2. Traditional Regional Trade Systems & How It Differed from Modern World-System

This must be remembered while discussing the regional trade systems that, ever since the humankind chose to create permanent settlements and started producing goods that were exchangeable like foodgrain, cattle, etc., trading took off almost immediately among the villages of the same community, across the communities within short distance, and across the kingdoms and city-states which were neighbours. So, the spontaneous bilateral relations regarding trade and commerce between two neighbouring states that take place everywhere on the planet, shouldn’t be confounded with the regional trade systems.

Some of the significant regional trade systems developed during the ancient era were (i) between north-east Africa (modern era Egypt, Sudan, Libya, Ethiopia) and west Asia (currently Syria, Israel, Lebanon, Arabia, Yemen, Oman, Iraq, Iran, Turkey) during second millennium BCE – successive Egyptian empires and Mesopotamian empires took the lead, (ii) between north Africa (modern era Egypt, Libya, Algeria, Tunisia, Morocco), west Asia (currently Syria, Israel, Lebanon, Iraq, Turkey), west Europe (presently Italy, Spain, France, the UK), and east Europe (modern era Greece, Serbia, Slovenia, Croatia) during first millennium BCE – Egyptian empires and Roman empires took the lead, (iii) between south Asia (modern era India, Pakistan, Bangladesh, Sri Lanka), and mediterranean region (presently Greece, Italy, Spain, France, Egypt) during 300 BCE to 400 CE – Roman empire on one side and Indian empire /kingdom like Maurya, Satavahana, Gupta, and Pallava on the other side were the patrons. Instead of deliberating on the entire history of trade and commerce during past four millenniums (which is not the primary objective of this article), I would like to mention two of the most significant regional trading systems during the first and second millennium CE (one inter-continental and the other intra-continental) that witnessed intensive economic and social exchanges across distant lands.

Tab. 4.2

Time-period	Description of Regional System	Goods Traded
1. Inter-continental regional trading system across Asia, Europe, and north Africa: a) 206 BCE- 220 CE Han empire of China at the east end and Roman empire of Europe and north Africa at the west end; b) 618 CE- 907 CE Tang empire of China at the east end and Byzantine empire of east Europe and Asia Minor at the west end; c) 1271 CE- 1453 CE Yuan and Ming empires of China at the east end, and Byzantine and other kingdoms of east and west Europe at the west end.	A massive exchange of goods and ideas happened through what was popularly known as Silk Road and Maritime Silk Route (a network of land and sea routes used by trading community across some of the world’s most formidable backdrops including Taklamakan and Gobi deserts) that facilitated the exchange of goods, technologies, and cultures across the following regions: China, Central Asia, South Asia, West Asia, East Europe, West Europe, North Africa. Even though I mentioned only the Chinese empire and Roman empires, rulers of every kingdom and principality of the above listed geographical regions ensured security and logistics across the trade routes which developed into centres of art, culture, and religion – the reason was obvious, every kingdom, society and people gained from the trading and cultural exchange. The discontinuities between 220 CE and 618 CE as well as between 907 CE and 1271 CE happened precisely because the rulers of the then Chinese empires and other local kingdoms couldn’t ensure safe and secured trade routes. After Ottoman empire overrun the remaining territory of Byzantine empire in east Europe and Asia Minor, and occupied its capital, Constantinople in 1453 CE, they brought down the curtain on the 3500 years old inter-continental regional trading system through Mediterranean.	An abundance of goods travelled along the Silk Road and Maritime Silk Route conforming to the then ‘demand’, ‘supply’, and ‘warehousing’ points: Silk, Jade, Gems and other precious stones, Porcelain, Precious metals, Ivory, Tea, Spices, Glassware, Textiles, Horses, Manufactured luxury goods, Various agricultural products.
2. Intra-continental regional trading system across south Asia, south-east Asia, and west Asia: a) 750 CE – 1258 CE Chola empire of southern part of Indian subcontinent, Pala empire of eastern part of Indian subcontinent, Abbasid caliphate of west Asia.	The medieval kingdoms in southeast Asia (modern-day Thailand, Vietnam, Cambodia, Indonesia, Malaysia, Singapore, and Philippines) had a vibrant trade network connecting east and south India and Sri Lanka as well as modern-day Iran, Oman, Yemen, and Saudi Arabia. Popularly known as Indian Ocean Trade network included the Strait of Malacca connecting the Indian Ocean, Bay of Bengal, and South China Sea. A distinctive feature of this trading system was the influence of the monsoon winds on the voyages (because efficient navigation in the sea/ocean was a factor of monsoon winds). Trading community from the following regions participated in this most prominently: South-east Asia, Southern parts of China, Southern and eastern parts of India, Bangladesh, Iran and Arabian Peninsula. After the Mongol military forces demolished the Abbasid empire and occupied its capital, Baghdad in 1258 CE (the main patrons of the trading system i.e., Cholas and Palas became history even before that) the 500 years old intra-continental regional trading system became mostly defunct except some Arabian, Indian and Indonesian traders continued to trade in a limited way.	Goods traded across the borders of different kingdoms included the following: Textiles, Pottery, Precious metals, Rare gems, Pearls, Forest products (aromatic woods), Spices, Chinese ceramics, Persian carpets Exotic animal products Agricultural products (like rice, dates).

How Regional Trade Systems Differed from the Modern World-System?

The obvious similarities between regional trade systems and the modern world-system are (i) both have trade, and commerce as the underlying base of the overall architecture of the system, (ii) both have resulted in diffusion of intellectual and philosophical ideas and socio-cultural practices. But the differences are too momentous for any astute reader of history to ignore. Two of the most noteworthy differences are:

1. Modern World-System has morphed into the de facto capitalist world order since the past 200 years (between Columbus’s second voyage in 1493 CE and Battle of Waterloo in 1815 CE, five core states – Spain, Portugal, the Netherlands, France, the UK – vied for global supremacy, hence the World-System was far from attaining the apex). After 1815 CE the UK appeared as the undisputed dominant core state (i.e., the chief coordinator of the capitalist world order), and the mantle passed on to the USA in 1945 CE. Since past 500 years, the countries and communities in the continents of Asia, Africa, South America, and North America have become a sort of ‘collateral damage’ while the modern world-system juggernaut rolled on to its destination – the capitalist world order! The modern world-system (through its dual weapons: colonialism and capitalism) has completely demolished the traditional political system, governance method, art and philosophy, and social behaviour of the countries in Asia, Africa, South America, and North America continents to replace it by the west European systems and thought processes.

Modern World-System (the Capitalist World Order) has undergone stage-wise transformation over a period of last 500 years, re-orienting its modus operandi time and again in terms of the capitalist economic relations and the resultant impacts over other non-European countries and communities:

Tab: 4.3

Time-period	Description of the System	Key Impacts on non-Europeans
12th to 18th century CE	Mercantile capitalism flourished in west Europe driven by the trading and banking communities initially in the Italian Peninsula, and the Low Countries, and thereafter in Portugal, Spain, England, and France. Even though many academicians argue that mercantilism is not actually capitalist, considering the facts that the system was developed during the diminishing feudalism, which ensured huge capital accumulation and which became a bastion of hereditary wealth management (both accepted legally by the kingdom/city-state of that era), it was really the first of many variants of capitalism.	Agrarian capitalism coupled with Mercantile capitalism as practiced in the Italian Peninsula hardly impacted any non-European land or community. Mercantile capitalism coupled with Slave capitalism, of which, Portugal, the Low Countries, England, and France became enamoured of 15th century onwards, brought catastrophic destruction of the societies in South America, central America, west coast of Africa, south Africa, south and south-east Asia. African people were evicted from home and village, tortured and killed if they resisted being enslaved, transported across oceans, bought and sold, and compelled to work in plantations from morning to evening. The occupied lands which housed such plantations – in Africa, North America, South America continents – found their ecosystem destroyed, communities uprooted and half of them killed, traditional agriculture badly damaged, economic cycle completely ruined, political independence snatched away at gun point, and above all, a small band of west European elites controlling their political and economic affairs and exploiting the population in every possible way!
15th to 18th century CE	Slave capitalism was an innovation of the west Europe aristocracy, banking, and merchant communities (bourgeois class of the early modern era). They would setup plantations of commercial crops like cotton, sugarcane, rubber, indigo, and poppy in the foreign territories invaded and acquired by the respective state military and/or private military. Such estate would be maintained by a ‘company’ formed in Spain, Portugal, the Low Countries, England, or France; production of crops and extraction of precious metals would be done by slaves (mainly transported from west coast of Africa) thereby ensuring minimum operational expenditures. Methods for higher productivity would be deployed for more production at low cost.
18th to 21st century CE	Industrial capitalism that originated in the UK and the Low Countries provided a more vigorous reorientation of economic relations among various classes in the west European society. A new class formed within traders, bankers, aristocrats, guild members (i.e., senior craftsmen) – the industrialists. They would setup factories for manufacturing various consumer goods and capital goods (i.e., machinery). Raw materials from already existing and new colonies/territories would be processed using locally sourced or imported energy. Very soon the industrialists found out that the domestic market would be too small to earn more and more profit (for unlimited accumulation of capital) – hence, the occupied foreign lands in Africa, Asia, South America by different European empires (till WW II, and thereafter independent countries mostly categorised as ‘periphery’) and European settlement colonies in North America and Australia were soon converted into markets for the finished goods from the European factories (while the produces from those foreign lands would be taxed heavily if imported into European imperialist countries like the Low Countries, the UK, France, Belgium). Researchers in engineering / technology would continuously invent new techniques and machines in order to manufacture more complex products at lower cost of operation.	Industrial capitalism coupled with Mercantile capitalism, became the most eventful period of the history of humankind during the period 1750 to 2008 CE. Old west European countries who earlier pillaged the foreign lands – the UK, the Low Countries, Belgium, France – as well as newly evolved core states like the USA, Germany, Australia became torch-bearers for industrial capitalism. Everywhere across the globe – Asia, Africa, South America, central America – direct occupation of lands and / or indirect influence on rulers / bureaucracy resulted in complete annihilation of traditional socio-cultural and socio-political systems and its replacement by European concepts and ideas as well as systems. Complete assessment of the overall impact of industrial capitalism (along with mercantile capitalism) introduced by the west European and settler European (of the USA, Canada, and Australia) bankers, industrialists, traders, aristocrats is yet to be done. However, it can be expressed with full confidence that, the human civilization actually started a new journey towards an unknown destination after the industrial capitalism was kick-started by the industrial revolution.

The trade routes of a regional trade system intersecting a couple of empires, a dozen of kingdoms, and many principalities of the ancient and medieval era didn’t exhibit any devastating ‘side-effect’ of colonialism and capitalism, never resulted in transformation (enforced by the dominant partner of the trading system) of the traditional political system, governance method, and socio-cultural behaviour in any state that is a part of that trade and commerce system; communities actually thrived along with the growing trade and commerce, and in such inclusive systems, the traditional way of life got huge boost flavoured with the positive aspects of foreign art and culture. Political rivalries between neighbouring kingdoms were definitely there, but the trade system didn’t compel any kingdom to be invaded and occupied by another empire, neither a group of foreign warlords could control another kingdom for the purpose of accumulating profits from ongoing trade and commerce! The rulers sincerely promoted such trade and commerce endeavours. This is not to suggest that the regional trade systems were non-influential – in many spheres of social life, ideas and philosophies, art and literature, religion and culture originating in one region influenced communities settled in other regions through spontaneous diffusion;

1. Perhaps more important difference between the modern world-system and ancient/medieval regional trade systems relates to the economic processes and participants (of such systems). All in all, the initial stages of the modern world-system ensured a continuous flow of profits from business operation which resulted in gigantic level of capital accumulation by the west European and settler European banker, industrialist, merchant, aristocrat communities (i.e., bourgeois class). This, in turn, fueled the massive investment during the industrial capitalism, which generated even more profits and hence, further capital accumulation. Let me quote Karl Marx from ‘Capital: A Critique of Political Economy, Volume I’ to throw light on how (industrial) capitalism took root in Europe, “The different moments of primitive accumulation can be assigned in particular to Spain, Portugal, Holland, France, and England, in more or less chronological order. These moments are systematically combined together at the end of the seventeenth century in England; the combination embraces the colonies, the national debt, the modern tax system, and the system of protection. These methods depend in part on brute force, for example, the colonial system. But they all employ the power of the state, the concentrated and organized force of society, to hasten, hot-house fashion, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition.” While the business operation by the west European and settler European states across the world pauperized the foreign lands and communities, it continuously enriched the west Europeans and settler Europeans as well as their state exchequers.0

As the foreign powers started manufacturing more goods than necessary for their domestic consumption, they treated the occupied lands and dominated lands as dumping grounds for those finished goods (manufactured at the European factories) – while the produces from those foreign lands would be taxed heavily if imported into European imperialist countries, the produces exported to the foreign lands will get (western) government support. So, the traditional (small and medium) industrial economy of the occupied lands and dominated lands in Asia, Africa, South America, and central America were shattered within very short time from the arrival of the imperialist forces. The economic ‘wonders’ of the industrial capitalism since 18th century were not only the result of capital accumulation from previous stages of capitalism, but the process was further facilitated by the rapidly increasing practice of fractional reserve banking in the central banks of west Europe, and the USA. Over and above the availability of bank deposits as a loan from the bank (which the merchants and industrialists would like to borrow in order to invest in new ventures and later pay back along with the stipulated amount of interest) money created in the books (from thin air) would be made available to the bourgeois entrepreneurs at cheaper interest rates.

Regional trade systems of the ancient and medieval era were never built upon the concepts of capitalism or colonialism. Earning profit from goods selling was definitely the target of the traders even during the ancient and medieval era, however (i) endless accumulation of capital was not a primary target, (ii) forced marketing in foreign lands was not a practice, (iii) deployment of labour from slaves / serfs to produce cheap goods was not a modus operandi, (iv) replacing the produces in the trade-destination country with the produces of the country of origin was not an objective, and (v) the production relations between capitalist and labour classes was absent.

5. FORMATION OF CAPITALISM, COLONIALISM & CAPITALIST WORLD ORDER

This section will start with a recapitulation of the significant events and series of events that took place during the period 1200 to 2000 CE. Thereafter, in three sub-sections, I will put forward three hypotheses on the rise of capitalism, colonialism, and the formation of the Capitalist World Order. (It may be noted that, this is not an attempt to redefine capitalism or colonialism – the economists like Smith, Ricardo, Marx, Engels, Schumpeter, Sweezy did it long back with astonishing precision. This is an inquiry into the factors and actors who collectively contributed towards shaping the final form of capitalism, colonialism, and the Capitalist World Order.)

5.1. Recapitulation of Significant Historical Milestones of West Europe During 1200 to 2000 CE

Let me note down the historically most significant milestone events in the path that was travelled by ‘capitalism’ and ‘colonialism’ for ultimately laying the foundation of ‘Capitalist World Order’ – tellingly these milestones also reveal the correlation between the geopolitical and economic events in Europe and European settler countries across the world during the period 1492 CE to 1950 CE. Astute readers will note that the schematic diagrams Fig. 5.1a, and Fig.5.1b as presented below, don’t posit that there was a cause-and-effect relationship between any two successive milestone events or between one milestone incident and the Capitalist World Order (or World-System). Having said that, it could neither be denied that there might be some instances where two successive events were connected after all! These schematic diagrams have been prepared with few important basis and assumptions:

1. The milestone activities have been marked in two formats: (i) box with blue coloured background represents those incidents which were geoeconomic or geopolitical in nature but they were not conflicts/ wars – e.g., dissolution of the USSR in 1991 CE belongs to this category, (ii) box with grey coloured background represents an incident which involved war/military operation or has potential to end up in a military conflict – e.g., WW II till 1945 CE and the expansion of NATO after 1999 CE has been considered in this category.
2. There were few historical incidents that has been marked by this author as ‘hazard sign’. These events were related to the Jewish (Mizrahim, Sephardim, Ashkenazim, mix of any two of this group) merchants and bankers. In all, 4 such hazard signs (expulsion from Iberian Peninsula, Pale of Settlement after partition of Poland, 1848 Revolutions across countries in west Europe, mass murder during WW II by Nazi German government) has been identified – these were the incidents that took place during the last millennium in Europe which not only introduced insurmountable barriers to trade and banking activities by the Jewish aristocrats/elites in the region where they were located at that point of time, but such incidents compelled the Jew aristocrats/elites (by ethnicity Mizrahim, Sephardim, Ashkenazim, or mix of any two of this group, and by religion Judaic, and converso) to search a ‘safe place’ and ‘safe conduct’ for them and their community. I feel that, these 4 extremely unsettling incidents stimulated the Jewish elites and aristocrats towards (a) claiming a homeland for themselves (knowing fully well that ethnic Sephardim and Ashkenazim couldn’t logically stake their claim outside their geographic origin that weren’t Cannan, or Madagascar or Uganda), which ultimately became the ‘Zionist movement’ among all Jews (Judaic and converso) irrespective of the lands of their ethnic origin (b) creating robust kinship with the Dutch, Anglo, and Flemish oligarchy (mainly landowning aristocrats, bankers, merchants, and industrialists) through marital relationship.
   Looking back into the west European history of the last millennium until 1815 CE, one would conclude that the monarchs and the Church (for different reasons) time and again used atrocities and violence against the Jew communities (Judaic and converso) that defies logic and rationality. Even if it is considered that Jews were unpopular across Europe because of their profession of usury and tax-farming, it can’t be denied that they were not alone to do so – most of the elite and aristocratic families of west Europe would do so if they got an opportunity (authorized by the crown)! Probably, this unique set of episodes also contributed significantly to the growth of colonialism, capitalism and the Capitalist World Order (as we will see in the subsequent sub-sections, Israel, the ultimate result of the Zionist movement, has been a part of the foundation of the Capitalist World Order.
3. Exclusions – During the entire period from 1492 CE to 1950 CE, the west European powers (core states of World-System) simultaneously continued with their activities related to colonial empire building and colonial settlement as well as industrial and technological research that smashed the earlier platform only to offer more efficient platform of business across even larger geographical foot-print. It wasn’t that every state was involved always in empire-building, but at any point of time somewhere in the world some of the west European power carried out its colonialist capitalist activities. Similarly, it wasn’t that every west European country always carried out extraordinary innovations in technology, but at any point of time some of the west European power were churning out complex products manufactured with new technology. These continuous activities and their impacts are excluded from the diagram.

5.2. Hypothesis on The Creation of Capitalism, Colonialism, and Capitalist World Order

Having discussed the most prominent trajectories of west European politics and economy spanning across almost the entire second millennium CE including the successive growth of different shades of capitalism, colonialism, and the resultant Capitalist World Order initiated and coordinated by the west European elites, aristocrats, and oligarchs, and having thrown light on how the capitalist world-system differed from the (traditional) regional trade systems, I would now like to identify the factors and building blocks of ‘capitalism’ and ‘colonialism’ that flourished in the second millennium CE till 1950 CE. My first hypothesis is: ‘greed’, an intrinsic trait of human beings, ‘exceptionalism’, a part intrinsic part extrinsic factor, and ‘coercion’, an extraneous factor combinedly laid the framework of capitalism and colonialism in the west European region, which ultimately led to the establishment of the Capitalist World Order which governs the modern world.

Fig: 5.2a

Fig: 5.2b

Greed, a subtle but extremely durable intrinsic characteristic of human beings, at the basic level acts within a neighbourhood hidden under a customary social interaction among the families that stay in the locality. Due to such burning (hidden) ambitions of owning more wealth and more power within the community, over a period of time (spanning across two – four generations), the community would notice that a few families own most of the resources and most of the opportunities to earn revenue – agricultural lands, trading outfits, secured and lucrative jobs in private business or government etc. Greed alone motivated these families to utilize the existing resources under their command skillfully for two – four generations to reach such a position of strength in that locality. About 40% of the families in the same locality would also strive to secure and enhance their sources of earning, but their greed being comparatively less, these families will remain content with arrangements for a decent income that covers food, shelter, medical, and education. Balance 50% of the families in the same locality would remain at the bottom of the (informal) social hierarchy trying to earn enough for having two square meals every day, and would struggle to collect fund in case of a medical emergency. The phenomenon of not-being-greedy-to-begin-with would punish this simple down-to-earth families to remain perpetually at the border of the society which, within two – four generations after being established in a locality, would have created an undocumented hierarchy keeping the wealthy and powerful families at the top layer! In a more complex social background, where multiple communities live within a kingdom / state for centuries, greed again plays a vital role in the distribution of income across the communities and the formation of social hierarchy. It has been noted that, across the planet since the Bronze Age of human history, the families who share same kind of profession tend to remain in the same community (or sub-community, when a community is formed on the basis of a non-professional common identity like religion or language). Thus, peasants in a kingdom not only represent a profession (and hence, a class) but also a community (or a number of communities depending on geographic region and agricultural produces), traders in a kingdom actually belong to one community (or a number of communities depending on geographic region and nature of traded goods), and a thick border line exists between the peasant community and the trading community. As a matter of fact, greed, as a characteristic trait, is quite strong among the members of the trading and business communities across the world, hence as a community, they are at the top of the social hierarchy if ‘wealth’ is considered as the sole parameter.

Exceptionalism is a quite straightforward expression of a semi-intrinsic semi-extrinsic characteristic of human beings. The personal psychology of ‘I’m exceptional’ has many alternate nomenclatures like ‘ego’, ‘self-esteem’, ‘self-importance’ etc. to which we all are accustomed to. Sometimes it happens that a specific family would posit its (perceived) superiority in the neighbourhood which might be uncontested or sometimes even contested by other neighbours. However, it becomes a very serious sociological problem when we are dealing with exceptionalism that transcended from ‘personal’ to the realm of ‘mass’ psychology – here a ‘community’ represents the ‘mass’. As against the concept of community from the professional point of view used for describing the factor of greed, the factor of exceptionalism can be more clearly understood if we consider community as the voluntary historical association of different sub-communities who profess same religion or speak same language or perform same set of social rituals. Thus, in France, over the last millennium different professional sub-communities got developed – peasants, bourgeois bankers, bourgeois industrialists, industrial workers, managers and engineers – who would combine to form a French community owing to their common language. History has always been plagued with conflicts between two communities, during which each community claimed they were exceptional compared to the antagonist. Another scenario unfolds when a community of people, because of its unflinching belief in being exceptional conducts their social customs and lead their daily life (that includes professions to which different sub-communities of that community are attached to) in such a manner that pits it against the state apparatus and the ideology of the aristocrats and oligarchs who wield power in that state. Finally, history shows us that, a state may, at times behave in a manner that reflects exceptionalism – many a times there would be almost complete overlap between the role of exceptionalism professed by a community and the role of exceptionalism exhibited by the state (belonging to that community) in fomenting geopolitical troubles in neighbourhood. This is especially true in the case of west European countries where one community makes up more than 70 – 80% of the country’s population – thus, during the first half of the 20th century, the German community’s aura of being exceptional almost mirrored the German state’s self-esteem about their glorious past and hence, a perceived future that could conceptually trample down all other neighbouring states!

Coercion is a not-so-subtle extraneous characteristic of a society. There has been serious research on the role of coercion and violence during the formative period of agriculture capitalism, slave capitalism, and industrial capitalism in the west Europe or coordinated by the west European powers in colonies across the planet. However, I will look at it from a different perspective, which will bring to the fore the significant role played by greed and exceptionalism factors towards promoting coercion and violence in social life. The coercion applied by the English aristocrats for evicting the poor rural families during the ‘enclosure movement’ was a direct fallout of the greed of the aristocrats for more revenue from agriculture business and their feeling of entitlement (that itself was a derivative of their belief in being exceptional) compared to the financially poorer sections of the society. Similarly, British bourgeois class and managerial community (both of which would grow from the British aristocracy oligarchy as well as the Jewish merchant-banker community) applied crude manipulation and violence against the Indian princely states and local population during the 18th and 19th centuries to build an empire in south Asia. That violence and coercion was the outcome of greed and exceptionalism of the above-mentioned communities and the British crown. And, it is even more important, that the state apparatus of the UK was no less involved in that gruesome saga of colonialism – greed (as tax revenue adding to the state coffers) and exceptionalism (due to which the aboriginal population of the colony mostly perished, and the land became an appendage to the UK state in the 18th and 19th century) of the UK state was directly an assault on the local communities living in Australia, the USA, and Canada. Finally, the last decade of the 20th century witnessed another type of violence – violence of the Capitalist World Order against the state of Iraq (incidentally, that episode took place in retaliation to the violence conducted by the Iraqi state against the state of Kuwait). Again, we can’t fail to note that, greed and exceptionalism (of the invading countries’ bourgeois class for whom, controlling petroleum and natural gas reserves in a west Asian country would provide lucrative business opportunity, and the community of the political leaders in most of the west European countries who, for all practical purposes consider that, colonialist empires were the golden period of their past history) are part of the present world order which played the most important role during that violence. To recapitulate: starting from the invasion of Byzantine empire in 1204 CE by the army of crusaders funded by the merchant and banker community of Italian city-states up to the recent invasion of Iraq by the USA forces, growth of colonialism and capitalism, and further transformation into the Capitalist World Order has been a function of ‘greed’, ‘exceptionalism’, and ‘coercion and violence’ – however, every activity would be conducted in a way that would remain acceptable to the legal system of the offending country (but would violate the concept of ‘natural justice’). No wonder, because the legislative, executive, and judiciary wings of all such states essentially were/are part of the sphere of influence of the bourgeois aristocrat and oligarch community of the respective states.

While capitalism appeared in different shades in west European societies as the feudal society transformed itself in different modes in different regions in different times spanning across almost the entire second millennium across the world, different west European intellectuals, philosophers, academicians, and socio-political activists attempted to analyses and theorize the phenomenon of ‘capitalism’ post-facto. Similarly, the pundits also put forward many theses on ‘colonialism’. As my hypothesis suggests, the ideology of capitalism and colonialism conjointly shaped the Capitalist World Order since the 1490s. A tentative stage-wise depiction of how colonialism, capitalism, and the Capitalist World Order took its form, is given below:

Fig: 5.3

This is an opportune moment to recall the famous ‘transition debate’ in which Dobb, Sweezy, Brenner among others, contributed immensely during the second half of the 20th century. Instead of identifying which of the three models – demographic, commercialization, and class structure – interprets the transition from feudalism to capitalism best, from the fig 5.3, I would like to suggest that interplay of all those three factors determined the social, economic, and political fabric of west Europe during the second millennium CE.

Werner Sombart and Max Weber both were tantalizingly close to finding out one of the key factors related to the origin of (industrial) capitalism in the European society – they expressed their views in their respective books, on how Jews (in the opinion of Sombart) and Protestants (in the opinion of Weber) brought about the entire scheme of capitalist economy into reality – but they fell short of identifying the root cause with precision. It is actually the Old Testament (OT) ideology of ‘being the chosen people to enjoy the resources allotted by God’ which served as the background frame of exceptionalism and greed. So, the European society which imbibed the OT ideology the most (i.e., the aristocrats and oligarchs of the communities following Jewish religion and Protestant Christian faith openly or secretly) contributed the most towards the rise of capitalism and colonialism, and the society which imbibed the OT ideology much less than the other two (the aristocrats and oligarchs of the communities following Catholic Christianity) accordingly contributed the least towards construction of capitalism. Here we can refer to the case of Song China once again. China, a society where large majority of population follow moral-based religious philosophy of Confucius, Buddha, and Lao Tzu, wouldn’t get swayed by the OT ideology! Hence, even if Chinese business class and ruling aristocracy were also greedy, they were bound by moral guiding principles that was not exceptionalism – as a result, the Chinese empire didn’t ever encourage colonial or capitalist ventures within their territories or on foreign lands. – ASD

5.3. Hypothesis on The Trajectory of Capitalism, Colonialism and The Capitalist World Order

In section 2 and 3 of this essay, I have detailed the outlines of politics and economy across west European regions between 1200 CE and 1950 CE. However, such details, at the best, can provide a random understanding of how capitalism and colonialism progressed during the past millennium. However, to have a firm grasp of the subject, there has to be an all-round understanding of the overall trajectory of these two phenomena. I put forward the second hypothesis on the same: the historical appearances of ‘capitalism’ from 1200 to 1950 CE has always happened as a combination of two different types – like agrarian and mercantile, or slave and mercantile, or industrial and mercantile – which are complimentary in nature. Agrarian capitalism, slave capitalism, and industrial capitalism belong to the category of capitalist system which is related to the production aspects of goods (and services), while mercantile capitalism belongs to the category of capitalist system which is related to the distribution aspects of goods (and services) beyond domestic market. Colonialism has always been a constant companion of capitalism which ensured access to raw material, energy, manpower, and market in the foreign lands.

Accepting the above-mentioned logic, it needs to be pointed out that statements like ‘mercantile capitalism first appeared in the Italian Peninsula’, or ‘the UK was the land of first arrival of industrial capitalism’ are not entirely appropriate. The acceptance of the statement ‘mercantile capitalism first appeared in the Italian Peninsula’ automatically begets a question ‘what goods (and services) were traded by the peninsular merchants?’ Similarly, the statement ‘industrial capitalism first appeared in the UK’ begets a question ‘how did the English merchants sell their goods in foreign countries’? Answer to both these questions, in essence, brings forward the complimentary nature of the two categories of capitalism. One category can’t appear in absence of the other – a system of ‘production’ must accompany a system of ‘distribution’ (to foreign lands). Let’s look into the economic history of west Europe, to note down the key information on time and space related to the origin and growth of “capitalist economy” and “Capitalist World Order” as below:

Tab: 5.1

Description	Agrarian + Mercantile Capitalism	Slave + Mercantile Capitalism	Industrial + Mercantile Capitalism	Industrial + Financial Capitalism
Key characteristics of different stages of “capitalist economy”
1. Pursuit of profit and accumulation of capital would be a strong driving force for the growth of economy	Complete	Complete	Complete	Complete
2. Legal protection of ownership of private property including means of production perpetually through generations	Complete	Complete	Complete	Complete
3. Commodification of all produces, as well as labour – availability and exchange-value of which would be ‘market’ driven	Partial	Complete	Complete	Complete
4. A ceaseless attempt for technological advancements that will make existing items and production processes obsolete – termed as ‘creative destruction’	Partial	Partial	Complete	Complete
5. A state apparatus which ensures: (i) a large territory & growing population (own jurisdiction and/or colonial possession) (ii) a central bank that controls ‘money’ (iii) absolute control of ‘state power’ and ‘resources/wealth’ by bourgeois oligarchy	No	Partial	Complete	Complete
6. Monetization of services to citizens like healthcare, education, housing, government services; profiteering from purchase/sale of, or investment in, financial products like bonds, stocks, futures, other derivatives	No	No	Partial	Complete
Geographic region and approximate time-period of first initiation of “capitalist economy”
12th century to 14th century	Italian Peninsula
14th century to 16th century	Low Countries
16th century	England	Portuguese and Spanish Empire
17th century	France	Dutch Empire, British Empire
18th century	The USA	French Empire	British Empire
19th century 1st half		The USA	Swiss, Belgium, French Empire
19th century 2nd half			Dutch Empire, The US, Germany
20th century 1st half			Australia, Canada
20th century 2nd half			Israel	The USA, The UK

Plundering and profiteering during one stage of capitalism and colonialism functioned as a primary means of primitive accumulation across west Europe, which opened up the next stage. It was no coincidence that almost half of the gold and silver acquired by the Spanish Empire ended up in the Dutch Republic which, in turn, witnessed the first proto-industrial capitalism! Similarly, the slave and mercantile capitalism based in the British Empire resulted in massive primitive accumulation, that supported the dawn of industrial capitalism in England and Scotland.

While the west Europeans continued on building the foundation of the Capitalist World Order since 1495 CE, the ethnic and socio-political diversity of the world underwent a drastic change because of the capitalist colonial empire built by the west Europeans. ‘The Cambridge History of Capitalism’ vol 1 mentioned, “As Europeans expanded overseas down the coasts of sub-Saharan Africa and westward to the rediscovered Americas, they found almost no states or societies capable of resisting either their weapons and methods of warfare, their pathogens, and their drives to expropriate natural resources and exploit a potential for unequal exchange.” The permanent transformation that took place due to this includes the following:

1. Near extinction of all aboriginal communities and languages in Australia, and North America continents; establishment of new settlements of ethnic Europeans in Australia, and North America continents
2. Dramatic changes of demography in South America continent, where either European communities and/or mix of aboriginals and European communities and/or mix of aboriginals and African communities replaced the original inhabitants;
3. Reduction of substantial population of various tribes of west and south regions of Africa continent through the forceful migration as part of slave trade as well as mass murders carried out by the invading forces from colonial west Europe
4. Large scale changes in political-economic-sociocultural aspects of the upper strata of the communities in Asia, Africa, and South America continents which got reoriented towards conforming to the European lifestyle, education, philosophy, culture and belief systems
5. Global prominence of European languages like English, French, Spanish as the ‘international languages’ across the world which are being used for dissemination of technology and knowledge
6. Global prominence of the west European and Jewish communities in terms of wealth and prosperity, as well as education and health parameters

When and where did capitalism start its fateful journey, how it made inroads into new European regions, have been discussed in earlier sections of this essay, and presented in the above table. What I didn’t discuss is how exactly capitalism has been spreading its wings far and wide to occupy the entire domain of human existence on this planet! The progression of capitalism (rather, occupation of the entire world and the humankind by the Capitalist World Order) has been taking place at a ferocious pace in three dimensions simultaneously:

• Realm of economy: along the x-axis in Fig:5.4 – at the point of origination (point #1 in the 13th century Italian Peninsula) capitalism was evolving in agricultural estates and merchants’ business operation. Slowly but surely, by 2000 CE capitalism brought all possible economic activities within its frontier – moving beyond the usual arena of agriculture and industrial manufacturing, capitalism now controls all activities in society where any possibility of monetary transaction exists like, healthcare, and education;
• Realm of politics: along the y-axis in Fig:5.4 – starting at point #1 (in the 13th century Italian Peninsula) where the wealthy bankers and merchants had sway in the political affairs of a city-state and principality, capitalism traversed eight centuries to invade the planet by 2000 CE to ‘capture’ the domain of politics in every country barring a few countries like China, Vietnam, and Cuba (who not only resolutely oppose the Capitalist World Order but their political setup remained anti-capitalist anti-colonialist);
• Realm of social life: along the z-axis in Fig:5.4 – starting at point #1 (in the 13th century Italian Peninsula) capitalism intruded into EVERY conceivable domain of human life and society – education, food and clothing, marriage, art and music, social customs in advanced capitalist countries like the UK, and the Netherlands which are the vanguards of the Capitalist World Order; by 2000 CE, encroachment of the society by capitalism is total – commercialization of life, humanity, and society is complete.

Fig: 5.4

The coordinators of the Capitalist World Order are striving to reach the destination at point #2 in every country / region of the planet, where all the key domains of human life – economic, political, social – will be subjected to a set of documented / unwritten norms of the current Capitalist World Order.

Post-1980 world European colonies ceased to exists, but effect of colonial imperialism (coupled with capitalism) endured in the realms of economy, politics, and social life. The inferior social status of the local peoples enforced during the colonial era seeped into the lives of most of the communities in ex-colonized states. Let’s discuss the progression of capitalism as depicted in the above figure in more detail for three countries which are highly significant in terms global geopolitics and economics – the UK, the USA, and China:

1. The UK – Mercantile Capitalism and Agrarian Capitalism took root in England during the 15th-16th century, while Slave Capitalism thrived in North America continent managed by the bourgeois oligarchy of England in the 17th century. Industrial Capitalism ushered a new era of the economy in the British Empire during the 18th century that finally matured into Financial Capitalism by 1980s.

By 1848 CE, the aristocracy-oligarchy who controlled the state apparatus and political power in different west European countries realized that the vast multitude of common population want to grab political power that could be utilized for improving the quality of their daily life (various shades of socialist thinkers and activists campaigned for decades on this matter). Since then, participation of common people was ensured through reviving the Greek concept of democracy, voting rights were progressively granted to different sections of population who would ‘elect’ leaders from different political parties as their representatives in parliament – it was conveyed to the common people that, these leaders and political parties would struggle to make their life better. In reality, however the political arena fully imbibed the capitalist spirit where the political parties would, from the very beginning, behave as ‘of the aristocracy-bourgeoise, by the aristocracy-bourgeoise, for the aristocracy-bourgeoise’, but outwardly through increasingly sophisticated campaigns, it would appear as ‘of the (common) people, by the (common) people, for the (common) people’. Globally, political arena became a platform where various bourgeois and aristocrat subcommunities would vie for controlling the decision-making process of almost ALL political parties (that took birth in their respective countries) that would go a long way to enhance the business operation and profit making by the bourgeois.

The last to fall in a domino effect was ‘social life’ – by 1950s, the UK became one of the first industrially advanced countries (of the Capitalist World Order), that redrew the socio-cultural landscape. The concept of nuclear family (away from the traditional family-oriented life), and sexual revolution (away from moralist sexuality) were the harbinger of the capitalist social life! The nuclear family was marketed as the triumph of modernism and individualism over the traditionalism and collectivism, while the sexual revolution was propagated as the victory of liberalism and modernism over conservatism and feudalism. In reality, however, both these phenomena were actually stage-managed by the captains of the bourgeois class in order to increase the ‘overall demand’ of goods and services by several times, through multiple splits in existing families in a society! Any type of consumer goods and services (house, car, durable goods, household items, electronic goods etc.) would find substantially higher demands from the splintered family as it broke apart! As in 2000 CE, capitalism has enveloped the UK economy, politics, and society to the maximum possible extent i.e., 100%.

1. The USA – When the USA transformed itself into a new independent country during the late 18th century in North America continent, it already had well established practices of mercantile capitalism, agrarian capitalism, and slave capitalism (formally controlled by the UK government). Industrial Capitalism started flourishing in the USA during the 1st half of 19th century that finally matured into Financial Capitalism by 1970s (with the delinking of US Dollar currency from gold).

During the 18th century, the political arena in the USA was dominated by the land-owning oligarchy, but they didn’t fully imbibe the capitalist spirit until 1850s. After that, the political landscape became similar to the one that prevailed in the UK – politics became a platform which would be nurtured by various bourgeois groups in order to control the decision-making process of ALL political parties that in turn, would ensure preservation and growth of business operation and profit making by the bourgeois class. To sway the public opinion in favour of a political party or a state policy, a concept was developed in the USA primarily by Edward Bernays, the gist of which was: to carry out ‘propaganda’ and maintain ‘public relation’ to create ‘public opinion’ that will support policies even if that were irrational, and harmful for the same people. This was applied for marketing campaigns across the world by the corporations that were producing various types of consumer goods and services as industrial capitalism flourished.

By 1920, the social life in the USA actually became the ‘model (capitalist) society’ for the Europeans, and later on, by 1950s, the high-income elites of most of the societies across the world considered the USA society as the ‘final destination of humankind’. The sociological concepts of nuclear family and sexual revolution mentioned earlier, got developed mostly in the English-speaking society of the USA and the UK. As in 2000 CE, capitalism has enveloped the USA economy, politics, and society to the maximum possible extent i.e., 100%.

1. China – Chinese economy, it is noted, was the earliest exponent of mercantile capitalism in the early medieval period. However, capitalism couldn’t develop further because of tight state control of trade and commerce by the emperors and absence of the concept of ‘exceptionalism’ among the business community and elites. Industrial capitalism was introduced in the country by the Chinese government as late as 1980s. Unlike the west European and North American countries where the economy operates mostly as capitalist with the bourgeois oligarchy controlling and influencing the direction of the economy (and politics, and society), in China, the government and the governing communist party controls the bourgeois class. The economy is mostly a capitalist one where state apparatus and private bourgeois community own most of the business operations. Roughly 20% of the economy – the agriculture sector – operates with the traditional family ownership in the agricultural land.

The political arena in China was completely transformed from a semi-feudal semi-colonial set up into a communist party-dominated independent country by 1950 CE. Thus, the political canvas in modern China never had any opportunity to get painted by a capitalist-colonialist brush.

Before 1980 CE, the social life in China remained deeply traditional except 1965 to 1970 period when the communist party attempted to develop a proletarian lifestyle across China. By 2000 CE, the neo-elites and neo-aristocrats became the easy target of global capitalism’s march into the realm of social life in China. Clothing, entertainment, marriage, education etc. in the high-income and middle-income groups of the Chinese society started mimicking the ‘American way’ by this time! As in 2000 CE, capitalism has enveloped 80% of the Chinese economy except the agriculture domain. And, 20% of the population (high-income group) followed the capitalist way of life by 2000 CE. However, politics in China remained completely out of reach for the Capitalist World Order.

5.4. Hypothesis on The Foundation of the Capitalist World Order

The stream of social studies in general, and history in particular, attempts to analyze historical events that took place centuries ago, and try to theorize in a way which would make sense to the academicians, researchers, students, and a group of people who govern a state (bureaucrats, politicians etc.). While the incidents happen in its own way, Human intelligence is applied to carry out a post-facto deliberation – hence, we only try to streamline such supposedly spontaneous incidents and attempt to tie them up with a common thread. Sometimes, however, from the analysis it is found that not every incident was a spontaneous one – in reality, there were environmental ‘agents’ which influenced such outcome. Exactly similar thing is noticed in the realm of political and economic journey of west Europe during the last millennium. Even if there were instances when agrarian+mercantile capitalism appeared between 12th to 15th century in west Europe as a spontaneous socio-economic phenomenon (because of the greed and exceptionalism of a section of peoples belonging to those societies), it wasn’t a spontaneous event when the combination of capitalism and colonialism gave birth to slave+mercantile capitalism at the dawn of 16th century. It was the initiation of a planned exercise for domination of the world. My third hypothesis is: foundation of the existing Capitalist World Order was painstakingly constructed over a period of five centuries from 1495 CE as a logical extension of the ideology and concepts of capitalism and colonialism practiced jointly by the aristocratic and bourgeois oligarchy who straddled across the North Atlantic shores. Their long journey passed through a number of triumphs (which didn’t create overconfidence in their mind) and tribulations (which were managed with adroitness converting each problem into a new opportunity).

The ruling aristocrats who controlled the state apparatus in different west European empires/kingdoms went through a long process of financial dependency on the Jewish bankers and tax-farmers who took the advantage to spread wings in the overall economy – as mentioned in ‘The Cambridge History of Capitalism’ vol 1, “To secure steady inflows of taxes, credits, and loans, particularly in times of warfare and disorder, even the most “absolutist” of Europe’s rulers could do little more than “negotiate” with established authorities and with syndicates of private tax-farmers to whom they had leased or sold responsibilities for the assessment, collection, and dispatch of whole ranges of tolls, customs, and excise duties. Both local and regional political authorities and franchised administrations extracted very high prices for their services in providing states with revenues (taxes with loans on the security of future revenues).” The foundation of the Capitalist World Order was primarily constructed by an elite group of west European peoples from the Jewish (Mizrahim, Sephardim, Ashkenazim, or a mix of any two), Anglo, Dutch, Flemish, French, Swiss, Italian bourgeois and aristocrat families (bankers, merchants, industrialists, landowning aristocrats); the same class of people from the European settler countries (in the USA, Canada, Australia) joined them to expand and enrich it.

The architecture of the foundation of the Capitalist World Order has been depicted below. Fig:5.5 represents the final form of the foundation of the Capitalist World Order at the completion of the formation process in 1948 CE. Chronologically, establishment of the Exchange Bank in 1609 CE (in Amsterdam) in the Netherlands, was followed by establishment of the Bank of England in 1693 CE (in London) as the private banker to the government of England. Hence, the Netherlands and the UK are part of the ‘innermost core’ of the foundation structure, and when Israel was created in 1948 CE (by Jewish and Anglo oligarchy settled in west Europe and the USA in the lands of Canaan/Palestine) it became a part of the ‘innermost core’ – these three members jointly provide the depth of funding capacity and the intellectual ability for the operation of the Capitalist World Order. The USA (with vast landmass, natural resources, large population, and military power) cemented its pivotal role in the formation of the foundation in 1913 CE when Federal Reserve was established as a private central bank. The USA functions as the ‘outer core’ that actually provides the manpower and industrial power for ensuring the strength and stability of the Capitalist World Order foundation. The USA also acts as the glue that binds the six countries of ‘outermost hexagon’. Bourgeois and aristocrat elites of these six countries forming the ‘outermost hexagon’ – Jewish/French capitalists in France, Jewish/Italian capitalists in Italy, Jewish/ Flemish capitalists in Belgium, Jewish/Swiss capitalists in Switzerland, and Jewish/Anglo capitalists in Canada and Australia – are heavily intertwined with the ‘outer core’ of the world order foundation.

Fig: 5.5

The foundation of the Capitalist World Order became the bulwark for total control of the resources, wealth, population and power in every nook and corner of the planet. The members of the foundation preserved a fascinating uniformity of purpose, uniformity of ideology, and uniformity of practice among them. While commenting on the basic norms of capitalism, the Encyclopedia Britannica mentioned, “Under capitalism two realms of authority existed where there had formerly been only one—a realm of political governance for such purposes as war or law and order and a realm of economic governance over the processes of production and distribution. Each realm was largely shielded from the reach of the other. The capitalists who dominated the market system were not automatically entitled to governing power, and the members of government were not entrusted with decisions as to what goods should be produced or how social rewards should be distributed.” While the transformation took place from capitalism and colonialism to the Capitalist World Order, those ‘two realms’ of authority got amalgamated into one since the beginning of the 19th century. The following observations further explores this phenomenon:

1. ALL the state institutions pertaining to the state apparatus (legislature, executive, judiciary), the defense establishment, and the central banking would be staffed at the senior decision-making levels by those peoples who have family background, education, profession, and ideology fully conforming to colonialism and capitalism;
2. ALL private-controlled entities which would be in the business in media and entertainment, education and research, as well as industry-banking-commerce would be primarily owned by the business entities which grew under the colonialist capitalist environment, and the private investors/ high net worth individuals who are ideologically colonialist capitalists; those business entities would be operated by senior level business managers who have family background, education, profession and political ideology soaked in colonialism and capitalism;
3. ALMOST all international multilateral institutions (UNO and its offshoots, WB, IMF) which have been maintaining international relations, coordination among the countries on social, environmental, health, culture, trade, financing would be primarily operated by senior level executives/professionals who have family background, education, profession and political ideology fully compatible with colonialism and capitalism irrespective of their public statements that might contradict their core ideology;
4. If any of the positions mentioned in point #1, #2 and #3 in any of the 10 countries as mentioned in Fig: 5.5, by sheer chance, got occupied by someone who did NOT profess undisputed allegiance to colonialism and capitalism, he/she would be relieved from the ‘duty’ as soon as possible through any possible means (it is immaterial whether such person occupies the position of a head of state, or a general of armed forces, or a director of a mine, or any other senior position in management);

A thoughtful reader could easily point out towards a few intriguing features of the foundation:

1. The foundation structure consists of four core countries (the USA, the UK, the Netherlands, Israel) where adherents of Protestant Christianity and Judaism formed the majority of population, while six countries that formed the outermost hexagon have either predominantly Catholic Christian community (Italian, French) or majority Protestant Christian communities (Swiss, Belgian, Australia, Canada);
2. Jewish communities (Mizrahim, Sephardim, and Ashkenazim who maintained Jewish religious faith as well as their compatriots who got converted into Christianity faith (also called ‘converso’) historically maintained a sizeable demographic presence in all ten countries that forms the foundation;
3. While the ‘innermost core’ was constructed with the banker, entrepreneur, and aristocrat classes of Jewish, Anglo, and Dutch elites, the ‘outer core’ is constructed entirely with the banker, entrepreneur, and aristocrat classes of the Jewish and Europeans who settled in the USA; finally, the ‘outermost hexagon’ provides a veneer of multicultural shade with Italian, Swiss, Flemish and French aristocrats-bankers-industrialists;
4. By controlling the state apparatus, defense establishment, banking, business, education, healthcare, and media, the colonialist capitalist fraternity (some bloggers and media professionals call it as ‘Deep State’) can indirectly control the entire lifecycle – from-cradle-to-grave – of not only their own citizens but also the migrant professionals residing in those ten foundation countries;
5. The ‘outermost hexagon’ acts as a sort of reinforcement for the foundation – each of the six members has considerable number of Jewish, Anglo, and Dutch elite classes. However, the level of cohesion among six of them is not so strong as that of the cohesion among four of the core members;
6. The members of the ‘core’ would never be prone to collapse owing to strong framework that resulted from very extensive economic, political, social and cultural networking among them since the 15th century. Thus, the four members of ‘core’ would tend to resist any kind of challenge to capitalism, colonialism as their guiding principles and to the Capitalist World Order as their edifice. The remaining six members of the ‘outermost hexagon’, however, will have much less incentives to resist against such challenges.

5.5. Few Debatable Points on The Hypotheses

I would like to raise few fascinating questions which are debatable – on the basis of ideology of the geopolitical observers and analysts, there could be multiple views on these points:

1. Why the core consists of only 4 states? Why the 6 states are in the ‘outermost hexagon’?

The answer is pretty intriguing. Certainly, the elites-aristocrats-bourgeois community in those four countries have much in common that is not reflected in the case of six other non-core countries. And, this ‘commonality’ is not an extraneous factor (i.e., it’s not a political or economic factor that plays outside a family/community), it must be an intravenous factor that involves family and community. Though I can’t quote any report on genomic analysis of elite peoples belonging to these communities in these four core countries, on the basis of conjecture, I am inclined to believe that the higher degree of marital relationship among the (Anglo-Saxon Norman) English, Dutch, and (Sephardim Ashkenazim) Jewish aristocrats-bankers-traders-bourgeois communities since past five centuries would be the MOST important reason why, these four states became part of the core of the foundation. Compared to the substantially high degree of genetic assimilation in the Netherlands, the UK, the USA, and (newly established state of) Israel, in other six states (of the ‘outermost hexagon’) degree of such assimilation was at the most, medium. The bourgeois aristocrat community of the four core states have a strong OT-oriented mindset which provide them the moral and ideological strength for their onward march towards Capitalist World Order. In the remaining six non-core countries, (i) population of (Sephardim Ashkenazim) Jewish aristocrats-bankers-traders-bourgeois communities has always been numerically small, (ii) inter-ethnic marital relationships have always been of low intensity, (iii) a sentiment against the Jewish and Protestant religious sects persists among some section of the aristocrats and bourgeois, even if it is of low intensity.

1. If only 10 countries (as per World-System analysis, all of them are part of the ‘core states’) contribute to the foundation of the world order, what is the role of other west and east European countries that are supposed to be part of the ‘core states’ of World-System analysis?

That brings us to a very critical question! In terms of economic analysis done by the World-System analysis experts, countries like Sweden-Norway-Denmark-Germany-Czechia-Hungary-Japan-South Korea are counted as ‘core state’ (that continuously and systematically accumulate profits from business operations in ‘periphery state’). However, this author is of the opinion that, apart from the 10 countries mentioned in Fig.5.5, the Colonialist Capitalist fraternity doesn’t have any serious commitment towards any other country, the fraternity won’t guarantee the economic or socio-political well-being beyond a point that would serve their own capital accumulation. (One need not look around for explanation of it – the Capitalist World Order has been constructed by elites and oligarchs of certain communities, who, like any other human being, have fellow-feelings, hence they would put their efforts and resources for safeguarding their own brothers and sisters). Thus, as long as Germany or Japan or Sweden fulfils the internal objectives (economic, technological, and military) of the colonialist capitalist fraternity based in these 10 foundation countries, they would be treated as brotherly community/country by the 10-member foundation. As a corollary, in case of any major geopolitical and/or geoeconomic turmoil, these European and east Asian countries who are not part of the 10-member foundation, would either be left to their own fate or be invaded and occupied by the 10-member world order foundation (provided the perceived economic and geopolitical gains of such invasion outstrip the cost of such invasion by a foreign occupier).

1. Is ‘monopoly capitalism’ another type of capitalism that I missed out? How does ‘monopoly capitalism’ relate to the ten foundation countries?

It can be stated emphatically that, ‘monopoly capitalism’ is not another type of capitalism, but it is a particular form of capitalism where the ownership of the capitalist organisations and initiatives get concentrated in a few hands. In every type of capitalism discussed in section 2 and 3 – mercantile, agrarian, slave, industrial, financial – there will be many competitors in the market to begin with; as the time passes, due to various factors, few among the competitors get ahead of the others in the race for capturing ‘market share’ for their products and services. The owners (i.e., the capitalists) of such companies will buy the trailing ones – this process will finally result in a situation where 50% to 80% of the market is owned by one company (called as monopoly), or two companies (duopoly) or a few companies (oligopoly). This tendency of concentration of ownership (and dilution of competition in the market) in a specific industry sector is a characteristic feature of a capitalist economy – the phenomenon is generally termed as monopoly capitalism. Some researchers feel that, more than half of the equity (capital invested while forming a business entity) of the multi-national companies headquartered in west Europe and North America is owned by just 300 – 400 families (based in mostly the 10 foundation countries)!

1. Why Japanese capitalist economy is not a part of the foundation of the Capitalist World Order? Isn’t it a successful capitalist colonialist country which is non-European?

While everyone agrees with the statement that ‘Japan was the only non-western country that built a robust capitalist colonialist economy between 1870 and 1945 (before the country was shattered during the closing weeks of WW II)’ many will deny that Japan could be one of the members of the ten foundation countries. Unfortunately, the Japanese aristocrat and bourgeois class strongly feel that they are an integral component of the world order foundation. Similar sentiments are found in abundance elsewhere also – every country located in the west Europe feels the same way (leading among them are Germany, Sweden, Denmark, Austria, Spain, Portugal)! May be, their politicians, bureaucrats, and businessmen should seriously go through the epic ‘Don Quixote’ by the master novelist Miguel de Cervantes.

There would be a genuine query – how could a non-European state learnt the tricks of capitalism and colonialism by the time WW I started? It was a classic case study where an oriental kingdom didn’t wish to become a prey of European colonialism, and hence it became colonialist itself! I would like to answer this question in shortest possible way: (i) by 1860 CE Japanese emperor became skeptical about colonial intentions of west European and the USA, and initiated internal restructuring that could modernize Japanese economy and military (ii) during 1868–1912 period known as the Meiji era, Japanese emperor mobilized all resources under the jurisdiction of the state, supported the creation of Zaibatsu (i.e., wealth-clan) which were very large capitalist enterprises owned by elite bourgeois Japanese families, (iii) Japanese government directly employed about 3000 advisors, specialists, teachers from west Europe and the USA (and encouraged the Zaibatsus to employ Europeans and Americans similarly) for educating and guiding all initiatives in Japan – educational institutions, public works, administration, military, agriculture, healthcare, industry – as per western concepts. [link 🡪 https://en.wikipedia.org/wiki/Foreign_government_advisors_in_Meiji_Japan ]. Could the result of such meticulous planning to imitate the west European economy, society and culture be anything different from what Japan ‘achieved’ by 1940 CE – a sprawling colonial empire across east Asia and south-east Asia that provides the required input materials, manpower, and market for products manufactured by the Japanese business entities owned by the emperor’s chosen capitalist families? I can’t recall another country in the world which became such an enthusiastic follower of the Capitalist World Order finally to end up getting bombarded with atomic bombs by the leader of the same world order!

6. CONCLUSION

The discussion on geopolitical and geoeconomic state of affairs for the period after 2000 CE is beyond the scope of this article. However, a few observations regarding the rapid geopolitical and economic changes in the world are noted below:

1. the USA dominated Capitalist World Order has been under severe strain since the 2008 Financial crisis as a result of which, currently the USA economy is operating with 30+ trillion USD debt,
2. massive influx of highly skilled and low-skilled peoples from Asia, Africa, and Latin America into the USA, Canada, Australia and west Europe happened during past three decades that will change the host countries’ population profile permanently by the mid-21st century,
3. during the initial decades of the present millennium, a new variety of capitalism (based on technology-based services) has been under development in the USA which in combination with ‘industrial capitalism’ has already created a niche market for itself globally,
4. geopolitical competitors like Russia and China sniffed opportunity and started challenging the Capitalist World Order led by the USA since the end of the first decade,
5. unlike in the past, when a challenger would enter into military conflicts with the dominant core state, China and Russia seem to prefer maintaining their historical sphere of influence in the neighbourhood, and simultaneously developing regional trade system that would bypass the Capitalist World Order as much as possible, thus avoiding direct conflict with the USA (and other core states).

Now, I would like to draw the readers’ attention to the following observations about the present Capitalist World Order. These observations are borne out of historical realities, and sprinkled with a bit of pragmatism at the personal level – these also serve as my concluding remarks:

1. An economy that is based on the ideology of capitalism i.e., endless accumulation of profit can only work with the assumption that, business operation grows with continuous growth in consumptions (which would be possible if, either a stagnant population continuously increases its consumption or if a growing population consumes more or less with the same pattern over a period of time). However, with limited resources and environmental deterioration, planet earth can neither sustain such relentless growth in population or growth in consumption nor withstand growing environmental degradation. Hence, from a logical and rational point of view, continuous accumulation of wealth is impossible, and hence, capitalism hits a dead-end.
2. After traversing a non-linear path with four stop-overs (mercantile+agrarian, mercantile+slave, mercantile+ industrial, industrial+financial), capitalism as an ideology has become a spent force. If at all capitalism has to carry on (for the sake of even further accumulation of wealth and power by its patrons), it needs to search for a new destination – I would like to call it as ‘green’ capitalism – a journey during which colonialism will not be a fellow traveler (unlike all previous stop-overs till the end of 20th century). If capitalism restarts its journey, there might be a spurt of ‘creative destruction’ again, which would render most of the existing industrial assets and business environment obsolete. Entirely new thought process, new technology, and new system of doing business might have to be inculcated among the 5% high net worth class of people in the European and North American societies.
3. The Capitalist World Order based on a single world-system spanning across every nook and corner of the globe, every sphere of economic activities, and every domain of human society and life, is against the social anthropology and history of humankind of past 10,000 years. No degree of technological sophistication or military prowess can alter that overall direction of history. Hence, the leaders of the Capitalist World Order should realize the futility of such attempts that may unnecessarily push the world to the brink of a global military conflict and the ensuing widespread devastation and unimaginable disaster.
4. At the same time, it is highly desirable that the leaders of the ‘regional trade systems’ should continue to build the economic relationship among themselves as well as with the USA and other western countries on the basis of pragmatic cooperation. Regional trade systems are the spontaneous, robust and successful ‘orders’ that the world has witnessed since the dawn of civilization. Multiple regional trade systems across the world joined with the (western-dominated) capitalist world-system can present a more stable and sustainable framework of international politics and economy that, in turn, will usher a new era of peace and prosperity across the world.