How did capitalism get started in the first place? What were the original sources of capital? How were free workers forced to sell their labor power to the capitalists? And why were colonialism and slavery such an integral part of capitalism’s development?
Capitalism requires pools of capital and labor as well as access to natural resources. When all are available, capitalists organize labor and obtain machinery, land, and other resources and put it all in motion to produce commodities. The accumulation of capital that began the process by providing large amounts of money that could be invested was based on theft: stolen labor, stolen people, and stolen natural resources. The colonial powers stole precious metals primarily from the Americas and brought them to Europe. Land was appropriated and indigenous peoples were compelled into forced labor. Millions of men and women were seized as slaves from Africa, decimating that continent while providing labor in its cheapest form to develop the resources of the New World as well as a source of wealth for traders and slave owners. In all of this, the nation-state was the organizing instrument that promoted, planned, and carried out the thefts or gave permission and made the resources available to do so.
While plunder in the colonies and slavery provided capital and labor for further investment, capitalism as it developed its modern form needed laborers in the “home” country to work in the factories. These workers were obtained through the enclosure process. The enclosures of land in Britain occurred over centuries, but accelerated as the British Parliament passed a series of Enclosure Acts, culminating in the nineteenth century. These laws incorporated the portion of land and water that had once been free to all—the commons—into the vast privately owned agricultural estates. With nowhere to pasture their animals or grow their crops, the peasants were forced off the land and, in order to live, were compelled to sell their labor to the nascent industrial market. In the New World, millions of native peoples were being driven from their homes, enslaved, slaughtered outright, or decimated by smallpox and other diseases for which they had no immunity. European settlers—mostly peasants forced off their land in the home country but not needed in the developing industries—seized their territories and privatized what had been communal resources of water and land.
The massive trade in human beings and later the colonial takeovers changed the economic and social trajectory of whole continents. Slaves were sources of labor and wealth—commodities to be bought and sold, rented out and used as collateral for loans. The labor of enslaved Africans made it possible to develop the sugar and cotton plantations that were so central to capitalist expansion in the Americas. Slavery was also central to providing Britain with massive amounts of raw material for the first mass-produced commodity, cotton textiles.
Because of the significance of cotton and its critical role in the rise of the Industrial Revolution, and the role enslaved labor played in producing cotton and sugar, the importance of slavery to the economic development of the U.S. and Britain cannot be overemphasized. As historian Walter Johnson has written,
In the years before the Civil War, there was no capitalism without slavery. The two were, in many ways, one and the same…. It is not simply that the labor of enslaved people underwrote 19th-century capitalism. Enslaved people were the capital: four million people worth at least $3 billion in 1860, which was more than all the capital invested in railroads and factories in the United States combined. Seen in this light, the conventional distinction between slavery and capitalism fades into meaninglessness….29
By the time of the Civil War, cotton production was 30 percent of the U.S. economy. Cotton became so integral to the economy of the South and the world economy that it was known as “King Cotton,” and during the relatively short period from the 1830s to the U.S. Civil War, “Indian land, African-American labor, Atlantic finance and British industry [were] synthesized into racial domination, profit and economic development on a national and a global scale.”30
The invention of the cotton gin to clean raw cotton at the end of the eighteenth century allowed for a huge increase in worker productivity and cost savings in this aspect of the industry. However, as historian Sven Beckert makes clear in Empire of Cotton, what really made the difference was not better technology but the social relations unique to capitalism. The explosive growth of the cotton textile industry, Beckert writes,
did not at first derive from technical advances, nor from organizational advantages, but instead from a far simpler source: the ability and willingness to project capital and power across vast oceans…. 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 … allowed for the transfer of capital and goods … the expropriation of land and deportation of Africans created flourishing plantations.31
The European countries seized colonies in Asia, Africa, and Latin America. Atrocities were routinely committed by the colonial powers, particularly when people refused to submit. For example, in the German colony in what is today Namibia, tens of thousands of people from the Herero and Nama tribes were slaughtered in what the German government now admits was genocide. Esther Muinjangue, a Herero activist and social worker at the University of Namibia described the enormity of what happened during colonial rule: “We are talking now about the lives that were lost, the land that was taken, the cattle that was killed, the rape, the lost dignity, the culture that was destroyed. We cannot even speak our language.”32
Former World Bank economist Branko Milanovic described capitalism as:
brought to the many at the “point of a gun,” and many were “globalized” literally kicking and screaming, from Commodore Perry’s ultimatum which opened Japan, to British and French gunboat diplomacy in Tunisia, Egypt and Zanzibar, to the Opium Wars and gunboats that patrolled Chinese internal waterways. Worst of all, for many millions who were sold in slavery, or who toiled 16 h a day on plantations from Malaya to Brazil that too was globalization. Globalization was not merely accompanied by the worst excesses of colonialism; colonialism was not an accident. On the contrary, globalization was colonialism because it is through being colonies that most of the non-European countries were brought to the global world.33
This was the greatest land grab in history. By the beginning of the First World War in 1914, “the colonial powers, their colonies, and their former colonies extended over approximately 85 percent of the earth’s surface.”34 Most of the countries in the Americas became independent from the European powers during the eighteenth and nineteenth centuries. However, it was only after the Second World War that long-standing independence struggles were successful among the colonies of Africa and Asia in the face of the brutalities committed by the colonial powers.
Imperialism as Inherent to Capitalism
In the words of Harry Magdoff, “Imperialism is not a matter of choice for a capitalist society; it is the way of life of such a society.”35 Imperialism without colonies is an essential feature of twenty-first-century capitalism, in which control is maintained in other ways. The leading nation-states use political, military, and economic means to force open and expand markets for goods and services, permit investment and the repatriation of profits, set up low-cost production facilities, control resource exploitation on favorable terms, and pursue geopolitical interests—everything possible to enhance their own national profit potential and power.
After the Second World War, the United States—its huge economy unscathed while other capitalist economies were in ruins—replaced Britain as the world’s leading imperial power. Since then, the United States has overthrown democratically elected governments and intervened militarily in dozens of countries to further its own interests. (See chapter 4 for discussion of U.S. actions abroad.)
Following the attacks of September 11, 2001, there were calls for a more muscular and aggressive foreign policy, a “new imperialism.”36 In a 2003 Wall Street Journal article, Alan Murray quoted two Brookings Institution authors as saying that “the real debate is not whether to have an empire, but what kind.”37 As the Iraq insurgency against