Merchant Capitalism, Resource Allocation, and Robinson Crusoe

Scarcity, Overabundance, and Resource Allocation

• Contemporary capitalist economies are characterized by an overabundance of non-essential goods rather than simple scarcity.
• Non-essential products, such as Lavubos (and knockoffs called Waffoo), consume significant natural resources during production.
• Lavubos are manufactured using petroleum and natural gas derivatives, including polyvinyl chloride (PVC), Acton, chrones, trinette, butadiene, and polyester fabric.
• Producing $1\,\text{pound}$ of plastic for San Jose requires $112\,\text{liters}$ ($28\,\text{gallons}$) of water, while cardboard box production and extrusion require an estimated $2\text{ to }5\,\text{gallons}$ ($8\text{ to }20\,\text{liters}$) of water.
• Tens of millions of Lavubos end up in landfills, where chemicals leach into groundwater.
• Resources allocated to non-essential goods divert resources from critical global needs:
  • Malaria, caused by the sickle cell Lactrimonium parasite transmitted by mosquitoes, kills over $600,000$ people annually and could be prevented with mosquito nets.
  • Modern agriculture produces more food than necessary to feed the global population, but people go hungry due to an inability to pay, as goods are withheld without profit.
  • Manufacturing capacity permits the production of $200,000,000$ additional cars despite existing overabundance.

Merchant Capitalism and the Mechanics of Profit

• Merchant profit operates by taking advantage of regional variances in scarcity, abundance, geography, and social organization.
• The merchant formula is represented as $M \rightarrow C \rightarrow C' \rightarrow M'$ (money to commodity to new commodity to more money), based on buying low and selling high.
• In $1694$, the Bank of England was formed as a private bank of wealthy investors to lend money at interest to the government for war funding.
• The pre-capitalist middle class defined individuals situated between the aristocracy and peasantry who started businesses without inherited land wealth.
• Merchant trade does not generate new wealth within a closed circuit; a society where every member only buys low and sells high to one another collapses.
• Robinson Crusoe case study:
  • Crusoe buys trinkets for $40\,\text{pounds}$ (equivalent to $2\frac{1}{2}$ years of wages for a teacher or craftsman, or approximately $\$80,000$) and trades them in Africa for gold dust yielding $300\,\text{pounds}$ in profit (equivalent to $18\frac{3}{4}$ years of wages), representing a $650\%$ return.
  • Profits are reinvested into the Guinea trade (spanning the Gold Coast, Ivory Coast, Pepper Coast, and Slave Coast) to trade in enslaved people, gold, and ivory ("elephants' teeth").
• Global map projections reflect distinct purposes:
  • The Mercator projection, created in $1569$, enables navigation because straight lines represent consistent compass directions, though it distorts land mass sizes.
  • The United Nations advocates for the Peters equal earth map projection to represent true geographic surface area ratios.
• Critiques of merchant trade:
  • Merchant profits derive from minimizing labor costs and underpaying workers, farmers, and enslaved populations.
  • Sailors faced extreme risks of injury and death; many deserted to become pirates, as pirate ships divided risks and profits more equitably among crews.
  • Classical philosophers Aristotle and Plato, alongside religious doctrines, historically condemned trade purely for profit as dishonest.
  • Economist Milton Friedman's book Capitalism and Freedom uses Robinson Crusoe to depict trade as voluntary household exchange, ignoring the reality of colonial violence and slave trading.

Imperial Monopolies, Forced Trade, and Violence

• Merchant companies relied on state corporate charters that legalized monopoly control and military force to protect trade routes.
• The British East India Company achieved nearly $100\%$ profit on its initial voyage from India, executing one of the largest historic transfers of wealth.
• The Dutch East India Company waged war against the Bantanese to secure a monopoly on nutmeg and mace in the Banda Islands, reducing the local population by $90\%$ through violence, forced relocations, starvation, and disease.
• Armed conflict occurred between rival merchant entities, such as the Battle of Seven Oaks between the Hudson's Bay Company and the North West Company.
• During the $1770$ Bengal drought, the British East India Company withheld famine relief, increased tax enforcement, and purchased rice exclusively to feed its private troops, resulting in company profit increases between $5\%$ and $30\%$ ($1,000,000\text{ to }10,000,000\,\text{pounds}$) in $1771$

Questions and Discussion

• Course engagement in History 135 provides a venue to begin questioning authority.
• Student analysis of Robinson Crusoe:
  • Highlighted Eurocentricity and the perspective of a straight white English man.
  • Explored the depiction of man in a state of nature (Robinsonade genre).
  • Critiqued Crusoe's character: selling companions, treating non-European people as inferiors, renaming individuals, taking trunks, and constructing walls.
• Pop culture and literary parallels:
  • Molière's play bourgeois gentleness (the wimpy noble) features monsieur de Journat, who discovers he has been speaking prose for $40$ years without knowing it.
  • Robinson Crusoe themes are adapted in Robinson Crusoe on Mars (featuring Adam West prior to Batman and Family Guy) and Lost in Space (featuring the Robinson family).