Colonial plunder and the rise of capitalism

Louis Proyect lnp3 at
Thu Jul 3 07:02:55 MDT 2003

Social Scientist. v 23, no. 266-68 (July-Sept 1995)

Capitalism in History


British historians—and this is equally true of Dobb and participants of 
the Transition discussion of the early 1950s—have tended to pay little 
attention to what Marx regarded as the second major source of primary 
accumulation, namely, colonial plunder. Such indifference is 
unfortunate; for it is not possible to imagine how a credible history of 
capitalism can be reconstructed without comprehending colonialism.

Three major components of colonial exploitation from the sixteenth to 
the eighteenth century must be distinguished: the Spanish mining of 
silver with forced labour in the Americas; the forcible transfer of 
millions of Africans as slaves across the Atlantic; and the levying of 
tribute on Asian shipping and land. England came in time to be the major 
beneficiary from all these three practically simultaneous processes of 
forcible subjugation and destruction of non-European economies.

The latest estimate of the population of central Mexico at the time of 
the Spanish conquest (1518) puts it at 25 million; by the 1620 it had 
been reduced to just three per cent of that figure—a nearly total 
annihilation. Not only Old World epidemics, but the forced requisition 
of labour for the silver mines, was responsible for such massive 
depopulation of Mexico and Peru. But Spain (and Western Europe) 
practically got its silver free. Between 1500 and 1650 nearly 112.5 
metric tons of silver were annually transported into Spain through 
official channels. E.J. Hamilton, who gave this estimate, speculated 
about its influence on prices in Europe—the so-called price 
revolution—and the redistributive consequences of such inflation, 
benefiting mainly the employers and the merchants, at the cost of 
wage-labourers and custom-bound rentiers. This, he thought, generated 
capital in Western Europe that could ultimately ignite the industrial 
revolution.36 It must be remembered that the crucial link here is not 
between the rise of capitalism and some incidental monetary process, but 
between it and the reckless exploitation of the Amerindian peoples, who 
because of deficiencies in their instruments of war, were absolutely 
helpless victims of their rapacious conquerors.

There is yet another aspect of silver influx which Hamilton and his 
critics do not consider. As silver stocks rose in Western Europe, and 
silver prices in terms of gold plummeted year after year. Western Europe 
gained a continuous advantage over the rest of the world in the 
transactions of trade. By 1600 Western Europe exported possibly 100 tons 
of silver annually; during the seventeenth, the annual average rose to 
150-160 tons. There was a wholesale diversion of Asian exports of 
manufactures, especially textiles, and drugs and spices from 
interregional traditional commerce to Western Europe in return for 
bullion. The new trade was largely controlled by European 
merchant-capital, spearheaded by the Dutch and English East India 
Companies; and its continuous expansion from silver exports greatly 
enlarged the size of European commercial capital.



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