C

Lecture 6

Theory of incorporation

How do states get incorporated into the world economy?

  • Globalization in the context of imperialism → different types of imperialism

  • Process:

    • External to the economy: outside of the economic system, no division of labour

    • Trade: surplus, luxury goods → not things people build the economy around

    • Incorporation: must start responding to market

    • Peripheralization process: is not a stable status, constantly evolving

    • Process of normal economic capitalist development

    • Building of a globalized world

  • Many states start as peripheral states → source of cheap resources

Why is the international division of labour central?

  • Plantation farming: cash crops
  • Export monopoly

What has to change?

Trade patterns

  • New patterns of exports and imports
    • Start producing raw resources → cash crop for export → these zones see repeated famines
    • Manufacturing enterprises: must be destroyed or weakened!
    • Creates competition vs. core states! So, core states start putting restrictions

Economic concentration

  • Concentrating economic decision making
    • By concentrating economic resources in the hand of a few people so they can respond to the markets rapidly
    • Core states arrive and buy land → due to control of the world economy

Coercion of labour

  • Increasing coercion of labour
    • Productivity: increase labour + length of the working day
    • Legal rights: property, ownership…
    • Can be violent or financial (rent + landlords)

Prelude to globalization in India

What’s happening before the world economy?

  • 1450: part of a smaller world system
    • Centred on India and the Arab world (Egypt + Ottoman)
    • Is an external zone

How does contact with the Europeans go?

  • Vasco de Gama: arrives in India and buys an enormous quantity of spices → massive profits

    • Portuguese send many ships with a letter for the Indian king: piracy + capture goods
    • Set up a fortresses → system of trading ports
    • Situated at non-attackable points (hard to reach)
    • Control spice trade between the Arab world and India

  • 1526: Northern India → becomes a big empire, built through military conquest

    • Leads to renaissance in India: flourishing of Indian culture, literature, and art!
    • Soldiers run the empire → get in the way of trade → very expensive to buy goods + expensive tolls
    • Small-scale internal trade
    • Problem: expensive to run an empire of conquest (army) → have strong neighbours
    • Nobles: assigned to different regions, no connection to the area, want to bring as much money as possible to the government
    • Extra tax for Muslims and Hindu traders

What makes India easier than expected to incorporate into the world economy?

  • 1650: Europeans traders start requiring passports for Indian traders for them to trade

  • Multicultural world!

  • 1720: peasants rebellion

  • 1750: Europe operates at a constant deficit → more money going into India than going out

    • Problem: Indians are very good at manufacturing (ex: textile)

  • Economic decline - recession in Europe

  • Want to start using gold in India

  • 1757: England captures Bangladesh

    • Shift in export-import model!
    • British invest in trade ports all over India and start conquering it (through alliance)

Globalization in India

How do the Europeans overcome the trade imbalance?

  • British:
    • Steal gold and silver
    • Implement a system of mortgages
    • Pay debt with goods that they produce

What do the British do to Indian manufacturing?

  • England starts to destroy their competition in India (manufacturing) by:
    • Implementing harsh taxes on Indian goods
    • Sell textiles at cheap price: undercut producers in India, English become only ones to sell those goods

What changes do they make to production, labour coercion, and trade patterns?

  • 1800s: Indian exports are now raw resources (indigo, silk…), unlike before!

    • English build plantations

  • Starvation → millions of deaths

  • Coercion of labour: Europeans change the land-holding system

    • Land can now be sold (landlords + rents)

    • Full ownership of property with the right to sell it

    • If you don’t make your rent: Europeans take your land, and you need to find a job (you become a worker)

    • Europeans advance money + impose strict disciplinary measures

    • Only people still working on the land are those who can make profits

    • Farmers are not producing food, so it’s difficult to sustain themselves

    • Cash crops: only system that works and allows you to pay rent and keep your land