Feudalism grew out of the ashes of the Roman
Empire and the traditions of the Germanic tribes that overran it;
European feudalism was essentially a defensive system protecting and imprisoning its rural population;
There was little trade or monetary activity. The economic and political units were very small.

beginning in 1300, a dramatic fall in agricultural production due to technological stagnation, worsening of climatic conditions, wide occurrence of epidemics, etc.
Confronted with increasing war expenditure, the military aristocracy had to extract more surplus from its serfs. This resulted in peasant uprisings and rebellions.

The general crisis of feudal society prompted fractured European groups towards exploration of new frontiers. This outward movement later led to events that completely transformed the course of history. From the exploits in the African, Asian, and Arab worlds,
Europe obtained extremely important technical and scientific gains.

• So-called “discovery” of the so-called “new world”
• Papal Bull of 1492-93: The pope divided the world’s non-European people and resources between Spain and Portugal
• “discovery” of the sea-route to India and Asia
• Defeat of the Moors at Grenada

• Williams-Rodney-James thesis (Darity)
• Williams-Rodney-Cox thesis (Forstater)
Eric Williams, Capitalism and Slavery, 1944
Walter Rodney, How Europe Underdeveloped
Africa, 1982
C. L. R. James, The Black Jacobins, 1938
Oliver Cromwell Cox, Caste, Class, and Race,
1948

1. The Enslavement & associated “trade” a major contribution to rise of capitalism in
Europe;
2. The Enslavement & etc. a major contribution to stunting of African economic development;
3. The Enslavement & etc. a major factor in poverty of Africans in the Diaspora;
4. The Enslavement & etc. a major contribution in the origins of modern racism.

Common interests as well as competing for world resources;
Portugal – from mid-15 th century exploiting African gold resources ($20b. by 1500); some use of enslaved African labor in plantation agriculture in
Canary Islands, Cape Verde, and Iberian Peninsula

Experiments with Native Americans, white indentured servants, finally Enslaved African
Labor found to be most ‘productive’, i.e., cheapest, most profitable;
Racism not the cause of Enslavement of
Africans, but an ideology justifying bloody
Enslavement, which had an economic rationale

Africans were now forcibly headed for Brazil, the
Caribbean, and the colonies of North America.
Thus commenced “the Enslavement,” the most brutal and dehumanizing episode of slavery in human history. Estimates range between 50 and
100 million of Africa's youngest and strongest were taken as slaves, or died or were killed in the process. Other estimates are as high as 150 to
200 million (and were previously as low as 10 million!). Whatever the exact number the result was a demographic stagnation of Africa’s most productive population and the supplying of cheap labor in the new world.

Enslaved Africans laboring on the Native American lands produced otherwise impossibly cheap raw materials and food for Europe. This lessened agricultural requirements in Europe and supplied the raw materials for incipient European manufactures. The new manufactured goods, made with raw materials produced on plantations by a labor force fed on plantation agricultural produce, were then taken to
Africa & elsewhere and flooded the new found markets there, interrupting traditional crafts, and further financing industry back in Europe and plantations in the Americas. This is the famous “Triangular Trade.”

What kind of raw materials are we talking about with plantation agriculture?—sugar, spices, cocoa, coffee, cotton, tea. But we have to understand what the total effect of this is. Sugar means not only sugar cane but gives birth to refineries producing refined sugar and molasses and rum. This creates demand for all the tools and implements and machines used in growing, harvesting, processing, and transporting these goods. And that's not all. Because the production of these tools and implements and machines itself requires other tools and implements and machines, as well, of course, as labor. And so on and so forth. The labor employed in these new industries also stimulates consumption demand feeding into a whole host of consumption goods industries that require tools and implements and machines, and more labor, for their production, and on and on.

And we can't forget what all this does for the shipbuilding industry and gun manufacturing, and then in the same way giving rise to industries producing and servicing their component inputs, etc., etc. And of course all this activity has to be financed, which means borrowing and lending, which means interest being paid and then spent or relent or reinvested. All these interconnections and feedbacks are what Darity is referring to when he discusses Hirschman’s notions of forward and backward intersectoral linkages. This frenzy of activity led to what the classical economists and Marx called the primary or original or primitive accumulation necessary for capitalism’s take-off.

In Book IV, ch. 1 of WN, Smith argues the biggest economic benefit of “discovery” of the Americas was not obtaining gold and silver, but the dynamic stimulus of new and bigger markets:
By opening a new and inexhaustible market to all the commodities of Europe, it gave occasion to new divisions of labour and improvements of art, which, in the narrow circle of ancient commerce, could never have taken place for want of a market to take off the greater part of that produce. The productive powers of labour were improved, and its produce increased in all the different countries of Europe, and together with it the real revenue and wealth of the inhabitants. (Smith, 1937, pp. 415-416).

Now, where did the labor working in these new factories in
Europe come from? Peasants who can survive from their own production do not voluntarily go to work in a factory, especially in the work conditions we're talking about.
Besides, under the feudal system, serfs were not allowed to move or work as laborers for others. Other restrictions such as prohibitions against money-lending or selling goods for more than their just price also constrained the system.
The pressures brought about and made possible by the new wealth and resources burst the constraints of the feudal system and destroyed it. This required a transformation in the social and political institutions, and the enactment of all kinds of legislation as well.

• The enclosure acts were key here. This privatized the commons and eventually threw the peasants off the land, leaving them with no choice but to sell their own labor-power in the factories, a sale made possible by new laws and new customs.
• There was also colonial capitalist primitive accumulation—but in Africa it was not possible or desirable to throw the people off their land, so other methods were utilized, one of the most important of which was taxation.

There can be no doubt—and this very fact has led to false conceptions—that the great revolutions that took place in trade in the sixteenth and seventeenth centuries, along with the geographical discoveries of that epoch, and which rapidly advanced the development of commercial capital, were a major moment in promoting the transition from the feudal to the capitalist mode of production. The sudden expansion of the world market, the multiplication of commodities in circulation, the competition among the
European nations for the seizure of Asiatic products and
American treasures, the colonial system, all made a fundamental contribution towards shattering the feudal barriers to production. (Marx, 1991, p. 450)

The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the indigenous population of that continent, the beginnings of the conquest and plunder of India, and the conversion of Africa into a preserve for the commercial hunting of blackskins, are all things that characterize the dawn of the era of capitalist production. These idyllic proceedings are the chief moments of primitive accumulation. Hard on their heels follows the commercial war of the European nations, which has the globe as its battlefield. (Marx,
1990, p. 914)

• New era of global political economy
• Consolidation of national identity
• Reformed state apparatus & bureaucracy

• Pamphleteers
• Merchants, government officials
• 1500-1800 (1550s-early 1700s)

• Explain the nature of commerce to the nobility
• Affect government policy (especially on trade)
• Amass personal wealth

Businessmen and government officials addressing policy; little engaged in abstraction
• Fragmented localism of feudalism at odds with consolidation of national political power
• Merchant interests at odds with nobility
• Use of ‘reasoned arguments’ how trade would increase national political power
• Mode of reasoning breaks with medieval schoolmen (moral authority), as well as abstract-philosophical Aristotelian approach

1) inspect the country’s soil with the greatest of care, use every clod of earth, experiment with every plant, and spare no expense in discovering gold and silver;
2) all commodities that cannot be found in their natural state should be produced within the country;
3) have as large a population as possible, to increase labor supply, and to have them be as productive as possible;

4) gold and silver, once in the country should not be let out for any reason;
5) do without foreign products to the greatest extent possible;
6) if imports are required, trade goods for them, not gold or silver;

7) import goods in as unfinished form as possible;
8) sell goods in as finished form as possible, and as much as possible, find new markets;
9) no imports of goods of which there is a domestic supply.

He sums all nine up in the basic proposition: Be happy with your own goods, don't buy foreign ones, keep your gold and silver in your pockets. These basic policies of nationalism, self-sufficiency, and national power were adopted in varying degrees by all the
European nations.

We can generally divide mercantilism into two periods, an early or simple period and a later more complex period. One of the most famous mercantilist pamphleteers was
Thomas Mun, an extremely wealthy merchant who was director of the British East India
Company.

The Company was being criticized for exporting bullion in order to purchase spices and silk in
India and Asia. Mun said, people just see the ships being loaded with gold and sailing away, but trade is a circular flow. Our wealth increases if "we sell more to strangers than we buy back from them." In other words, net exports (X-M) = "treasure."

One of the keys of the mercantilist point of view in this regard was that gold is a commodity like any other- it's like cotton or wheat- it reaps returns in exchange. So exchanging gold for other goods was not importing the other goods, but rather exporting the commodity gold! The key was to 'sell more than you buy.'

What Mun wanted people to understand was that when his company sent out gold it was bringing back raw materials for manufactures which would be re-exported. His argument was that his company was bringing back more gold then it originally exported.

Of course, though, the maxim 'sell more than you buy' as the secret for increasing 'treasure' or wealth is not wealth creation. A net gain for one country assumes a net loss for another. So the mercantilist notion of surplus created in the sphere of exchange rather than production is false- it can never be true for the world as a whole.

In the later period, the mercantilists extended their considerations beyond international trade- they became more interested in the domestic economy. Actually what happened was they began to realize the connections between the domestic economy and international trade.

One position they began to take was keeping wages low. The lower the wages the lower the cost of production, the lower the cost of production the higher profits given that the rates of exchange in international trade stay constant. Still, though, they dealt little or not at all with either the nature or the structure of production(as opposed to exchange), and that was true for agriculture and manufacturing both.

“Merchant’s capital is older than the capitalist mode of production.”
“Since its function consists of promoting the exchange of commodities, it requires only simple circulation of commodities and money.”
“No matter what the basis on which products are produced…the character of products as commodities is not altered.”

“whatever the social organisation of the spheres of production whose commodity exchange the merchant promotes…Its form is always
M-C-M’.”
“the less developed the production, the more wealth in money is concentrated in the hands of merchants or appears in the specific form of merchants’ wealth.”

“merchant's capital appears as the historical form of capital long before capital established its own domination over production. Its existence and development to a certain level are in themselves historical premises for the development of capitalist production 1) as premises for the concentration of money wealth…”

and 2) because the capitalist mode of production presupposes production for trade, selling on a large scale, and not to the individual customer, hence also a merchant who does not buy to satisfy his personal wants but concentrates the purchases of many buyers in his one purchase.

The independent and predominant development of capital as merchant's capital is tantamount to the non-subjection of production to capital, and hence to capital developing on the basis of an alien social mode of production which is also independent of it. The independent development of merchant's capital, therefore, stands in inverse proportion to the general economic development of society.

It is in circulation that products first develop as exchange-values, as commodities and as money.
Capital can, and must, form in the process of circulation, before it learns to control its extremes
— the various spheres of production between which circulation mediates. Money and commodity circulation can mediate between spheres of production of widely different organisation, whose internal structure is still chiefly adjusted to the output of use-values.

"The inhabitants of trading cities, by importing the improved manufactures and expensive luxuries of richer countries afforded some food to the vanity of the great proprietors, who eagerly purchased them with great quantities of the rude produce of their own lands. The commerce of a great part of
Europe in those times, accordingly consisted chiefly, in the exchange of their own rude produce for the manufactured produce of more civilised nations.... When this taste became so general as to occasion a considerable demand, the merchants, in order to save the expense of carriage, naturally endeavoured to establish some manufactures of the same kind in their own country." (Adam Smith [Wealth of Nations],
Book III, Ch. III, London, 1776, pp. 489, 490.)

“So long as merchant's capital promotes the exchange of products between undeveloped societies, commercial profit not only appears as out-bargaining and cheating, but also largely originates from them.”

“Merchant's capital, when it holds a position of dominance, stands everywhere for a system of robbery, so that its development among the trading nations of old and modern times is always directly connected with plundering, piracy, kidnapping slaves, and colonial conquest.”

“Commerce, therefore, has a more or less dissolving influence everywhere on the producing organisation, which it finds at hand and whose different forms are mainly carried on with a view to use-value. To what extent it brings about a dissolution of the old mode of production depends on its solidity and internal structure. And whither this process of dissolution will lead, in other words, what new mode of production will replace the old, does not depend on commerce, but on the character of the old mode of production itself.”

The different moments of primitive accumulation can be assigned in particular to Spain, Portugal, Holland, France, and England, in more or less chronological order. These moments are systematically combined together at the end of the seventeenth century in
England; the combination embraces the colonies, the national debt, the modern tax system, and the system of protection. These methods depend in part on brute force, for instance the colonial system. But, they all employ the power of the state, the concentrated and organized force of society, to hasten, as in a hothouse, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition. Force is the midwife of every old society which is pregnant with a new one. It is itself an economic power. (Marx,
1990, pp. 915-916)

The modern fiscal system, whose pivot is formed by taxes on the most necessary means of subsistence...thus contains within itself the germ of automatic progression. Over-taxation is not an accidental occurrence, but rather a principle. In Holland, therefore, where this system was first inaugurated, the great patriot, DeWitt, extolled it in his Maxims as the best system for making the wage-labourer submissive, frugal, industrious…and overburdened with work. Here, however, we are less concerned with the destructive influence it exercises on the situation of the wage-labourer than with the forcible expropriation, resulting from it, of peasants, artisans, in short, of all constituents of the lower middle-class.
There are no two opinions about this, even among the bourgeois economists. Its effectiveness as an expropriating agent is heightened still further by the system of protection, which forms one of its integral parts. (Marx, 1990, p. 921)

What I am here calling the colonial capitalist mode of production is similar to what Clive Y. Thomas has called the “colonial slave mode of production,” in which the “mode of production was clearly
determined by the colonizing power, and was in no way a “natural” outgrowth of the development of the indigenous communities”
(Thomas, 1984, p. 10). In the colonial capitalist mode of production, “the process of colonization ultimately required the effective concentration of power in the hands of the colonizing power” (Thomas, 1984, p. 14), and “…the local state developed out of the need for an organizing authority to perform certain
“common” functions in the local society and the need to have an
“on-the-spot” public coercive power to guarantee the interests of the dominant local and colonial interests” (Thomas, 1984, p. 15).

Some of these functions “included overhauling existing land and property arrangements; creating, in place of slaves, a stable labor supply for commercial agriculture and mining; extending the use of money and exchange, frequently by requiring the payment of money taxes and land rent” (Thomas, 1984, pp. 18-19).
• A variety of methods were employed by the colonial powers to force colonial subjects to become wage-laborers. These included forced labor and varieties of methods to create a property-less class. But creating a landless, property-less class was not always preferred by colonial governments. Maintaining ‘reserves’ of some kind was beneficial to capital, for a number of reasons. If labor was seasonal, workers could return to home in the off-season and live off the subsistence base. In this way, wages did not have to be high enough to support workers and their families year-round, and profits could be higher. Even without seasonal labor, maintaining a subsistence base could supplement wages, which again would not have to be high enough reproduce labor-power.

The problem was that if the subsistence base was capable of supporting the population entirely, colonial subjects would not be compelled to offer their labor-power for sale. Colonial governments thus required alternative means for compelling the population to work for wages. The historical record is clear that one very important method for accomplishing this was to impose a tax and require that the tax obligation be settled in colonial currency. This method had the benefit of not only forcing people to work for wages, but also of creating a value for the colonial currency and monetizing the colony. In addition, this method could be used to force the population to produce cash crops for sale. What the population had to do to obtain the currency was entirely at the discretion of the colonial government, since it was the sole source of the colonial currency. This method was widespread and important enough to be called “a secret of colonial capitalist primitive accumulation” (since it was not the only method, it must be called “a” secret). This practice is extremely well documented, yet it has hardly ever been mentioned as an important method of primitive accumulation. If, as Marx stated, “accumulation of capital is…multiplication of the proletariat,” then direct taxation (and the requirement taxes be paid in money) was, in the colonies, ‘a secret of socalled primitive accumulation,’ especially because of the other associated effects, including monetization, marketization, and commoditization.