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