Economics and Empire

The fortunes of empire—the accumulated treasures of centuries of sacrifice and achievement—have typically gone to those who master the game of power politics. Wealth was originally calculated in terms of women, cattle, bushels of wheat, slaves, territory as well as in luxury objects, such as shells, wampum, precious metals and similar media of exchange. The abstract evaluation of goods and services in terms of standard interchangeable monetary units arose with letters of credit and coinage. The invention of coinage dates, at least, as far back as the 7th century BC. The creation of money—an extremely liquid asset—signified  a great step toward quantification and abstraction. Money originally expressed the value of a stated weight of silver or gold, but has become more abstract and ubiquitous since paper money came into general use during the 19th century. According to Heilbroner and Thurow, “everything imaginable has served as the magic symbol of money.... In fact, anything is usable as money, provided that there is a natural or enforceable scarcity of it so that men can usually come into its possession only through carefully designated ways. Behind all the symbols, however, rests the central requirement of faith”(137-38).

 The origins and development of capitalism as a mode of accumulation has become controversial. The very definition of the ‘modern system’ of capital accumulation has until recently depended upon its contrast to the ‘medieval system.’ This outlook among economic historians reveals a western bias; namely, the Marxist division of human history into slave, feudal and capitalist societies. Some exponents of ‘world economic systems analysis’ have pushed the origins of capitalistic imperialism back some five thousand years to the ancient Middle East, where the world’s first surplus developed. The original centers of accumulation were the priestly temples and royal households of the fertile river valleys. Interestingly, wealth and the numinous meet again in early modern Europe in the papal and princely courts—centers of capital accumulation.

Civilization is coterminous with the existence of a core/periphery relation which tends to reproduce simultaneous development and underdevelopment within a single system. This process is imperialistic insofar as the center of a system accumulates wealth from a wider area of production. Initially, the accumulation of wealth occurred in an imperialist structure which capitalism in antiquity adapted to. Many revolutions—intellectual, commercial, financial and industrial—had to occur before modern capitalist market society could emerge triumphant. Though the territorial expansion of land empires did not originate in trade, the influence of exports on the expansion of ancient empires possessing water communications was not entirely absent. Weber wrote, “In spite of this, however, the development of trade in the past has been the normal result of political unification”(165). Though market relations existed in antiquity, money did not control society to the degree that it now does. Historically, wealth has tended to follow power, which was the reward of political, military, religious or social power, not economic activity. Money and market relations were not so important for the workings of ancient empires which relied on tribute and pillage, and is part of the reason why agrarian societies remained static, unproductive and unprofitable.

Modernity rests on the capitalist market, technology, speed and mobility. The quality and range of technology has drastically improved since James Watt invented the steam engine in 1769. In market societies—power follows the lead of wealth. However, this development wasn’t solely determined by economic factors. Economic motives had to replace traditional motives, such as prestige, rank and status. Throughout most of history, men were neither motivated by hunger nor gain, because individuals in traditional societies did not starve unless the community as a whole did. The profit motive, or the drive to maximize one’s income and minimize one’s expenditures, became the basis of  behavior during the 19th century. An economic system driven by wants, in contrast to needs, acknowledges no natural limits. Once this revolution in material values occurred, the economic system embedded in the social system broke free from tradition and command. This new everyday pattern of social behavior and organization was slowly imposed across the globe—creating a peculiar technological civilization in its wake—The Machine, derives its name from its two central institutions: the market and factory. Karl Polanyi concisely described this great transformation. Under this self-regulating system:

    •                   we can not exist unless we buy commodities on the market with the help of incomes which we derive from selling other commodities on the market. The name of the income varies according to what we are offering for sale: the price of the use of labor power is called wages: the price of the use of land is called rent: the price of the use of capital is called interest: the income called profit derives from the sale of commodities which fetch a higher price than the commodities needed to produce it, thus leaving over a margin which forms the income of the entrepreneur. Thus sales produce incomes and all incomes derive from sales. Incidentally, production is being taken care of, and the consumers’ goods produced during the course of the year are distributed amongst members of the community with the help of the incomes they have earned.(97-98)
  • Robert Heilbroner called this process the ‘monetization of life.’ Everything in society is reduced to economic values expressed in abstract monetary values. Peasants before the Industrial Revolution produced what they needed themselves. After the masses had migrated from farm to factory, in order to earn a living, their very existence became totally dependent on the money system. One positive byproduct of monetization, according to Heilbroner, was “the mobilzation of life—that is, the dissolution of those ties of place and station which were the very cement of feudal existence”(63). Social mobility opened jobs up to competition. The ‘monetization of feudal obligations’ was a radical change for the polity—status was replaced by contract, and honor by credit. The cash-nexus made it possible for a new elite to take the top positions. Wealth has been a source of power for thousands of years, but in contrast to the brute violence of feudal-lords and slave-masters, money has been a more efficient tool of social control.

     Theoretically capitalism appears to be liberal and democratic, but, in fact, it has usually been predatory in practice. In 1899, Thorstein Veblen showed how mankind’s predatory habits had survived the transition from feudalism to capitalism by emphasizing the role of the Robber Barons in America’s economic boom. Corporate and financial fraud and political corruption are integral parts of today’s political economy and social structure. There are many exchanges between predatory capitalism and organized crime. Globalization has produced a single global market for both licit and illicit goods and services. It seems as if economic globalization is paradoxically taking much of the world back to the middle ages.