Category Archives: Capitalism

How the Industrial Revolution Changed Global Commerce

The second industrial revolution began in the middle of the 19th century and fundamentally changed global commerce.  Advances in science and technology allowed rapid development of new industrial techniques, new power sources, rapid communication and transportation, and new war machinery.  All this combined with innovations in financial systems such as the creation of limited-liability joint-stock ownership and the stock market, helped to move economic power away from government and more into the hands of the industrial capitalists and bankers.  Capitalism was embraced with a fervor and devotion few religions enjoy.

Global competition intensified when Germany, the United States, and Japan challenged Britain’s early lead in industrialization.  The need to secure existing colonial and imperial possessions and to acquire more became more important than ever.  This increasing competition caused both governments and industrialists to pour money into research, education, expanded industrial capabilities, and increased military forces and weaponry.  Besides coffee, tea, sugar, and other commodities, industries now needed new resources such as copper, rubber, oil, and bauxite.

This need for raw materials and the need to utilize industrialized farming techniques led to a new age of conquest, population dislocations, and subjugation.  The United States invaded Mexico in 1846 and forced them to cede half their territory, then in the late 1890s declared war on Spain and invaded the Philippines, Puerto Rico, and Cuba.  The United States entered these wars under the pretext of freeing the colonies of Spanish rule but the concept of “American Exceptionalism” justified retaining domination of all three countries.  In India, after Britain put down the Indian Rebellion of 1857, a massive push for infrastructure began.  This came in the form of railways, communication lines, and a postal service, all for the support of the commercial interests of Britain and the East India Company.  British investors financed these projects but charged them to the Indians in the form of taxes.  Britain went on to conquer Malaysia, Burma, and Ceylon.  Between the 1860s and 1890s, France occupied Viet Nam, Cambodia, and Laos.  The Dutch had ruled Indonesia until they chose a policy of less government exploitation in favor of settlement and private exploitation.  Africa suffered most from this new wave of colonization.  In 1884 and 1885 delegates from Germany, Portugal, Britain, France, Belgium, Spain, Italy, the United States, and the Ottoman Empire partitioned an unmapped Africa.  No Africans were present.

All this upheaval and rapid change created unprecedented wealth for the industrial and banking magnates while poverty, exploitation, displacement, and low wages became the norm for the vast majority.  This period of technological advancement, industrialization, and global interdependence saw the coming of age of capitalism and its ideals implanted in the world’s psyche.

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How the Enlightenment Failed Mankind

The scientific and industrial revolutions exploded in the age of conquest and discovery.  This period of conquest and discovery produced both the need and the financing for further scientific investigation.  Increased focus on education and research gave rise to the unintended consequence of advances in moral and cultural studies.  This moral and cultural enlightenment, and the social sciences it created, have been in conflict with capitalism since the development of the concept that certain rights exist in the individual and that these individuals have the right to create laws that control them and their governments.  While the Enlightenment did much to temper the pain, it did little to curb the advancement of imperial and economic conquest.  Capitalistic pursuits have had more influence on international relationships and global interactions than moral values.

The power of this new understanding found expression in the American and French revolutions.  The establishment of governments “by the people” raised new questions such as who is a citizen, who gets to vote, and who deserves equality.  The answers to these questions put the aristocrats and property owners at odds with those trying to achieve their newly imagined rights.  The moneyed interests prevailed, and only white, male, property owners gained suffrage.  This arrangement saw many more of the new ideas ignored and even perverted; ideas such as the immorality of slavery and sovereignty of native peoples.  The utilitarian view of “the greatest good for the greatest number” was twisted to justify conquest and colonialization of other cultures for their own good.  Both Europeans and Americans perverted Darwin’s theory of evolution to “prove” that Africans were lower on the evolutionary chain and it was therefore moral to treat them as animals.  Europeans and Americans continued to enslave Africans while Europeans maintained profitable slave trading networks in the name of economic growth.  Darwin’s ideas were also used the judge cultures and societies.  In addition, the ideas of Manifest Destiny and the belief in the white racial superiority were used to justify the eradication of Native Americans and the military conquest and eviction of the Mexicans from their own lands.

As formal imperialism began to slow, other informal forms of imperialism continued.  In Free Trade Imperialism , countries no longer used their navy and military might to monopolize trade routes and port cities; they now used the navy and military might to protect their interests abroad.  Free Trade Imperialism gains and maintains control through economic influence, dependence, and debt.  A common method of attaining these goals was to finance infrastructure such as railroads to transport goods and to provide markets for those goods.  This tactic placed tremendous pressure on the dependent countries to grant trade and other concessions to the more powerful trading partners and thus freed the conquerors of any responsibility for conquered societies.  This also relieved the citizens of the imperialist countries of the moral difficulties of conquering and controlling sovereign peoples.  Liberal Imperialism uses methods such as civilizing missions.  This involves evaluation of cultures based on economic and religious values.  If a society was not exploiting their resources for profit or they were not worshiping the right gods, they were classified as uncivilized heathens, incapable of ruling or educating themselves.  The only moral thing to do was to provide them with God, civilization, and leadership.

The process of free trade imperialism is very much alive today and spreading Euro-American capitalistic values around the world.  Not only European countries and the U.S. but also other economic powers such as Russia and China are encouraging domestic companies to spread their economic footprints.  Increasing the economic strength of privately owned companies increases the power and influence of the nation so governments provide protections for these companies.  This is illustrated by the military presence protecting Middle Eastern oil supplies and trade routes and economic and military aid to preferred countries in Africa, Latin America, the Middle East, and others by these same economic powers.

Liberal Imperialism was one aspect of the reasoning for the U.S. invasion of Iraq.  The U.S. government removed a ruler that did not meet their standards.  A liberal democratic super-power of the world removed the ruler of a sovereign nation under the pretense of bringing democracy and a better life to the citizens.  Free Trade Imperialism then helped perpetuate the war due to the large number of private contractors employed whose only motive was profit.  This is just one example of the economic powers of the world interfering in the affairs of sovereign nations.

The ideas that developed in the Enlightenment Period alleviated tremendous amounts of suffering around the globe.  These new ideas were key elements to the revolutions and evolutions of democracy, ending slavery, and bringing about a greater awareness of injustice and inequality.  However, these powerful moral concepts have merely been treating the symptoms.  Much more dangerous to humanity are the goals that have been and still are driving economic development.  While the philosophers and social sciences tinker with making the path smoother, other than a few marginalized intellectuals, no serious examination of the direction of the path or of what might lie at its end.  The Enlightenment did so much for the people of the planet but it failed to stop the relentless march of capitalist theocracy to ecological damnation.  Perpetual economic growth requires infinite resources from a finite planet, which makes the very concept of continuous economic growth logically unsound.  The capitalistic system is a Utopian fantasy; the fantasy is that a system based on personal profit over the greater good can continue.  The advancements in moral and ethical philosophy and critical thinking have not enlightened enough people to prevent us from committing suicide by capitalism.

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Capitalism May Prevent Nuclear Holocaust

Capitalism will prevent a hegemonic war between China and the United States.  China is a rising power relative to the U.S., both economically and militarily, but a war between these nations is not likely.  Profit and economic stability are the goals.  China has just over 10% of the nuclear warheads as the U.S., however, the estimated 300 they do have is more than enough for Mutually Assured Destruction.  Money, not military deterrence, will prevent this war.

China bases its decisions on foreign policy at least partly on mutual respect, mutual non-aggression, non-interference in internal affairs, peaceful coexistence, equality, and mutual benefit.  Moreover, China says it “never seeks hegemony”.  A United States cost/benefit analysis would obviously favor peaceful trade with China without disrupting the U.S. imperialist pursuits in weaker and unprotected countries.  China will not threaten their biggest trade partner and the U.S. does not want any trouble because the import/export exchange is mutually beneficial and China is a major source of lending for U.S.  Therefore, peace is in the common interest.

As 21st century political values tend to put more emphasis on profit and the major military powers refine their military capabilities (deterrence), economic cooperation will become increasingly important.  We have insured peace by creating a system of mutually assured economic interdependence.

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Self Perpetuating Capitalism

The hopes of the Enlightenment for a future founded on ethical and moral reasoning have been lost to the rush of technology and capitalism.  The period of imperialism, colonialism, and plunder that made the Enlightenment possible also made the accompanying industrial and technological revolutions possible and allowed capitalism to be refined to the point of taking on its own perpetuation.  As societies established rulers to provide security and property rights they inadvertently gave power over the masses to those with more property.  Those with the property and power, through the desire to increase both, gained further control of the people through division of labor, thereby not only making the proletariat obliged to them for subsistence but also creating a class structure.  The stage was now set for full control of the people.  “The powerlessness of the workers is not merely a ruse of the rulers but the logical consequence of industrial society, into which the efforts to escape it have finally transformed the ancient concept of fate.  What human beings seek to learn from nature is how to use it to dominate wholly both it and human beings. Nothing else counts.”(1)  This goal and its logical consequence did indeed cause the rulers themselves to lose control of their creation.

As Sir Francis Bacon (January 22 , 1561 – April 9, 1626)  surmised, Kings and merchants could not control the acquisition and growth of technology.  It is now as democratic as the economic system with which it evolved.  As technology and industrialism expanded people became more dependent on it.  As people became more dependent they became less likely to question where the system was headed and the ethics and morals of the goal.  It was much easier to blindly accept the current way of life.  (A ‘This is how it has always been and so we can’t change it’ attitude.)

Rousseau looked back on a feudal and monarchical history and conceived of political inequalities that depended on the common consent of mankind.  These inequalities included wealth, honor, and power over others.  “Preoccupation with the drive to possess status disguised the oppression of the people and kept them from realizing that they were not free or natural.  People with property need a way to protect it, so the rich man, thus pressed by necessity, at last conceived the deepest project that ever entered the human mind: this was to employ in his favour the very forces that attacked him, to make allies of his enemies, to inspire them with other maxims, and make them adopt other institutions as favourable to his pretensions, as the law of nature was unfavourable to them.”(2)   Those with only the wealth they could obtain through their own labor needed protection too.  Those with power and property then convinced the people to make laws that “fixed forever the laws of property and inequality” (2).  In order to secure their current station in life and avoid the fear of change it became necessary to not analyze the conditions of the world and how man’s activity was affecting both the current state and future fate of mankind.

The failure of the Enlightenment to change society has been brought about by its very antithesis.  The people are kept busy trying to survive and the wealthy are busy acquiring more.  No one has time or inclination to question the system.  If they would stop to examine what they have created they would find that it has been running itself and is not now, nor has it ever been, under the control of anyone and is rushing forward towards death by more.  Except for a very small minority of the wealthiest of the wealthy, everyone else are just cogs in a machine.  Everyone is expendable and can be replaced from the reserve labor force of the unemployed.  The system created by man will lead to its own destruction if everyone continues to rely on the ‘Just doing my job’ defense to deny their own complicity.  It is the responsibility of the creators of the monster to put an end to it.  This will only be done through reason, reevaluation, and creation of new, more realistic goals for mankind.  Nature can no longer abide fiscal calendars and corporate goals.

(1)    Horkheimer and Adorno  – Dialectic of Enlightenment

(2)    Jean-Jacque Rousseau – A Discourse Upon the Origin and the Foundation of the Inequality of Mankind

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Capitalism Conquers South America

The conquest of the Americas was not planned or foreseen.  It was an uncoordinated pell-mell rush to acquire souls and gold.  The Catholic Church’s need for souls and man’s desire for “wealth” drove this madness.  No one knows where the souls went and the cost of the so-called wealth may prove to be more than the world can afford.  For the peoples being discovered or enslaved this was a time of devastation and destruction.  For the majority of the people of Europe all this new found wealth brought only pain and suffering.  Life was hard for European peasants and laborers and intolerable to impossible for indigenous Americans and Africans.

The discovery of the New World by Columbus at the end of the 15th century launched the Age of Discovery.  A Papal Bull (Dum Diversas) issued in 1452 by Pope Nicholas V authorized Portugal to enslave any non-Christians .  This opened the African slave trade to Europe.  In 1455 Pope Nicholas V issued the Romanus Pontifex which extended Catholic nations of Europe dominion over lands yet to be discovered.  In 1493 Pope Alexander VI issued the Inter Caetera bull establishing the Law of Nations.  Together the Papal decrees led to the global slave-trade of the 15th and 16th centuries, and the Age of Imperialism.

By the end of the 15th century Europe had depleted the fertility of its farmlands through monoculture farming and polluted its streams and rivers and even the off-shore fishing waters.  The Ottomans had severed the overland trade routes to the East.  Europe desperately needed access to new resources.  These resources were found in the New World.  The Europeans were not concerned that these lands and resources were being utilized by other people.

By 1455 Spain and Portugal had full permission to “convert or invade, capture, subjugate, and perpetually enslave any non-Christians”.  This gave the people of both nations legal and moral authority to plunder the wealth of the Americas.  The Spanish began enslaving the indigenous people of the Caribbean with the arrival of Columbus. On his first trip he returned with a few samples of the product and on the second voyage he sailed with 500 Arawak men, women, and children to be sold as slaves.  Only 300 survived the trip.  He later wrote “Let us in the name of the Holy Trinity go on sending all the slaves that can be sold.”  However, so many died on later Atlantic crossings that this proved to be not as profitable as using these people as local slave labor.  They would rape their own lands to feed Europe’s greed.

During the first decades of colonization, abusive slavery and infectious diseases had killed so many Americans that a new source of labor was needed.   The first African slaves were brought to the New World as early as 1502.  The Spanish were not deeply involved in the slave trade so the British and the Dutch slave traders kept them supplied.  On the other side of South America the Spanish were busy stealing silver and gold using enslaved or conscripted indigenous people.

And the ecological imperialism was equally devastating.  The Portuguese “harvested” the Brazilwood trees for ship building and export.  In place of the forests, they planted the same sugarcane crops that had depleted the soil of the Mediterranean islands.  By this time the Brazilian natives had either died from diseases or had fled into the forests.  The Portuguese looked back to Africa for the labor that was needed for ecosystem destruction and monoculture faming.

All this stolen wealth did not help the people of Europe; for most of them it was a world of conquest, violence, hunger, inflation, and exploitation.  In most parts of Europe, two per cent of the population owned ninety-five per cent of the wealth.  What wealth the bourgeois did not piss away on trinkets and toys they spent on wars; religious wars between and within countries, wars to steal more wealth from other Europeans or to protect their own, and wars to put down the many peasant uprisings.

The discovery and exploitation of the New World is usually depicted as a great advancement for mankind but how is that to be determined?  Not by the improvements in warfare.  Not by the number of dead and unborn.  Not by the increased inequalities or the added wealth of the few.  And certainly not by the things we don’t know we lost.  We have no idea of the wisdom and knowledge these people may have contributed to the world.  Maybe the only believers in the One True God died in a silver mine or on a plantation somewhere.  And what was lost in the ecological destruction?  From the evidence of what was lost and the lack of evidence of what was not gained we may never be able to evaluate the five hundred year period from the end of the 15th century to the end of the 20th.  This age of parasitic devastation is coming to an end.  As of now, this same capitalistic drive is still at work, systematically turning the earth and everything on it into wealth, but it can’t go on much longer.  We have passed the point of sustainability.

“What do I think of Western civilization?  I think it would be a very good idea.” ~ Mahatma Gandhi

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