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Notes on Chapter 2 of "Empire of Cotton" by Sven Beckert.
Before 1600, the European cotton industry was not a major factor in world production or trade. India and China produced more, and Indian production was most significant in global trade. Asian producers were the most technologically advanced (p. 29). In any case, the trade was multi-polar. In 1600, most Europeans still clothed themselves in wool or linen fabrics, as they had for centuries.
Over the next two hundred years "war capitalism" would make Europe (particularly Britain) central to hierarchically organized cotton networks, thereby setting the stage for "industrial capitalism" in Europe. Beginning in roughly 1780, British industrial capitalism engendered unprecedented labor productivity growth through machinery, and this accounts for the "great divergence" in wealth and power between Europe and the rest of the world (p. 55).
"War capitalism" is Beckert's term for a set of strategies adopted by elite Europeans to restructure global trade networks by force to their advantage (p. 30):
European capitalists and rulers altered global networks through multiple means. The muscle of armed trade enabled the creation of a complex, eurocentric maritime trade web; the forging of a military-fiscal state allowed for the projection of power into far-flung corners of the world; the invention of financial instruments - from marine insurance to bills of lading - allowed for the transfer of capital and good over long distances; the development of a legal system gave a modicum of security to global investments; the construction of alliances with distant capitalists and rulers provided access to local weavers and cotton growers ; the expropriation of land and the deportation of Africans created flourishing plantations. Unbeknownst to contemporaries, these alterations were the first steps toward the Industrial Revolution... The "great divergence" was at first a divergence of state power as well as a peculiar relationship between these states and capital owners. In the process, the many worlds of cotton became a European-centered empire of cotton.
Starting in the 1600s, European states chartered trading companies that dealt (inter alia) in textiles: the British East India Company (1600), the Dutch Vereenigde Oost-Indische Compagnie (1602), the Danish Dansk Ostindiske Kompagni (1616), and the French Compagnie des Indes Francaise. These companies "...purchased textiles in India, to trade for spices in Southeast Asia, and also to bring to Europe, whence they might be consumed domestically or shipped to Africa to pay for slaves to work the plantations just beginning to take root in the New World" (p. 32).
These companies of "heavily armed privateering capitalists" (p. 37) attempted to assert monopoly rights over the cotton trade, but this project was never entirely successful (p. 32). By 1765, the British East India Company ruled Bengal (p. 43). Initially, it relied on networks of Indian middle-men to create a putting-out system. Later, they significantly undermined the pricing power of weavers, compelling them to accept some of their wages in raw cotton and supervising the weaving process. Weavers were forced into poverty. The effort to introduce wage labor of the kind later familiar in Europe was ultimately unsuccessful (p. 44).
The Company flogged weavers who sold to private merchants, then paraded them around as a warning to others (p. 45). They employed Indian soldiers for such work.
Slavery was central to war capitalism. In the three centuries after 1500, the Spanish, Portuguese, British, French, Dutch, etc. deported 8 million people from Africa into slavery in the Caribbean and the Americas.
In the 1770s, Indian textiles accounted for as much as half of the value of goods bartered for enslaved people. African slave traders were discerning, and European merchants were keen to secure the colors and types of fabric they desired in India (p. 36).
Beckert describes war capitalism as having an "inside" and an "outside" (p. 38):
The "inside" encompassed the laws, institutions, and customs of the mother country, where state-enforced order ruled. The "outside," by contrast, was characterized by imperial domination, the expropriation of vast territories, decimation of indigenous peoples, theft of their resources, enslavement, and the domination of vast tracts of land by private capitalists with little effective oversight by distant European states. In these imperial dependencies, the rules of the inside did not apply. There, masters trumped states, violence defied the law, and bold physical coercion by private actors remade markets.
Protectionist measures were taken to shield European woolen and linen manufacturing from Indian imports and domestic "upstarts" alike (p. 47).
European powers engaged in extensive industrial espionage to learn to match the quality of producers on the Asian continent (p. 50). In 1807, Legoux de Flaix wrote:
All the weaving combs in France should be made according to the model used in Bengal... then we will succeed in equaling the Indians in the manufacture of their muslin.
All told, war capitalism provided the following prerequisites for industrial capitalism (p. 52):
Mercantile cities such as Liverpool, which derived their wealth largely from slavery, became important sources of capital for the merging cotton industry, and cotton merchants in Liverpool provided ever more credit to manufacturers to enable them to work up the cotton.