GEOG 135 – Economic Geography
Professor: Dr. Jean-Paul Rodrigue
Topic 2 – Historical Developments of
Capitalism
A – Feudalism and Capitalism
B – The Industrial Revolution
C – Colonialism and its Demise
D – Waves of Economic Change
Hofstra
Department
of Global
Studies
& Geography
HofstraUniversity,
University,
Department
of Global
Studies
& Geography
A - FEUDALISM AND CAPITALISM
1.
2.
The Feudal System and its Demise
Long Distance Trade
© Dr. Jean-Paul Rodrigue
1. The Feudal System and its Demise
■ The Feudal society
• A system of bonds and obligations:
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Power in land ownership.
Administrative/legal (Lord) and religious (Church) control.
Rent/Royalties from the serf to the lord (in kind or labor).
Fixation of the productive forces (tools and labor) in agricultural
production.
• Little socioeconomic changes over centuries.
• Economy:
• Small local markets (fairs).
• Low levels of productivity (subsistence level).
• Profits taken away by the lord/church, inhibiting any increases in
agricultural productivity.
• 80 to 90% of the population was in agriculture while the other
share were artisans and landowners.
• Different types of feudal societies (China, Japan, Europe).
© Dr. Jean-Paul Rodrigue
Roman Empire, c125AD
Empires collapse because of overstretch:
resources to maintain hegemony exceed
resources collected. Theft, plunder, taxation and
(hyper)inflation (final phase).
© Dr. Jean-Paul Rodrigue
The Silk Road and Arab Sea Routes (8th to 14th Centuries)
© Dr. Jean-Paul Rodrigue
1. The Feudal System and its Demise
■ The end of the Middle Ages
• The Plague of 1348 created labor shortages and social
disruption.
• At the end of the 15th century, large parts of Europe were
still under a feudal regime:
• Trade was almost non-existent because each locality was almost
self-sufficient.
• Distribution costs were high:
• Diversity of currencies.
• Different units of measure.
• Tariffs imposed on goods moving between small kingdoms.
• The emergence of a merchant class (proto-capitalism):
• Commodification of goods and services.
© Dr. Jean-Paul Rodrigue
1. The Feudal System and its Demise
■ The European origin of the global economy
• The fifteenth century marked the beginning of an
expansion of European control throughout the world.
• Europe progressively assured the development of the
global economy by an extension of its hegemony:
• Mercantilism was the first phase.
• The industrial revolution was the second.
• Over three centuries (1500-1800):
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The setting of capitalistic systems.
Limits of the world were pushed away.
A world where borders are drawn; a delimited world.
Establishment of vast colonial empires.
Waves of innovations and socio-economic transformations.
© Dr. Jean-Paul Rodrigue
2. Long Distance Trade
■ Merchants and Mercantilism
• A new structure of wealth accumulation:
• Investing in trade and in the manufacture of consumption goods.
• Expansion of the wealth of merchants:
– It was them, and not the feudal Lords, who had the largest amount of capital.
– Merchants invested the capital in commercial enterprises while lords fixed it
on land.
• Rich merchant families such as the Medici (modern banking).
• Goal:
• Buy goods at the lowest possible price.
• Sell them at the best price, thus generating a profit.
• Used to finance new commercial initiatives.
• Financing the first maritime explorations:
• Attempt to acquire information on the commercial potential of
new territories.
© Dr. Jean-Paul Rodrigue
Early European Maritime Expeditions, 1492-1522
Exploration (inventory of territories and resources).
Setting of colonial empires (control of territories).
Setting of a global trade network.
© Dr. Jean-Paul Rodrigue
Density of Ship Log Entries, 1750-1810
© Dr. Jean-Paul Rodrigue
2. Long Distance Trade
■ Trading companies: Private mercantilist tools
• From the 17th to the 18th century trading companies acted
on behalf of European governments in East Asia.
• Joint stock companies.
• Guarantied trade monopoly:
• Rights paid to their respective governments.
• Almost states in themselves:
• Had their own ships (military and merchant) and military forces.
• Could acquire and manage a foreign territory.
• Developed trade links for commodities such as pepper.
• Increasingly involved in the control and development of
their respective territories.
• Faced lack of interest from European governments.
© Dr. Jean-Paul Rodrigue
2. Long Distance Trade
■ English East Asian Company
• In 1592, a Portuguese ship was captured by England:
• Its cargo contained stores of goods from Asia.
• Triggered the need to establish a lucrative Asia trade.
• EEAC founded in 1599 by British merchants:
• Granted a monopoly to trade with Africa, India and America.
• Trade structure:
• Fill ships with European goods, sail to Asian trade depots.
• Sell the goods in exchange of colonial commodities.
• Sail back to Europe and sell the goods, cash in and pay dividends
to the shareholders.
• Dividends were over 10% per year (Sometimes up to 65%).
• 25% of the profits coming from the China trade.
© Dr. Jean-Paul Rodrigue
2. Long Distance Trade
• Constant warfare with French, Dutch and other
competitors.
• China trade:
• From the middle of the 18th century, the company became more
involved in trade with China.
• European markets needed porcelain, silk and tea.
• The company traded silver in exchange.
• Opium, grown in India, became a substitute for silver.
• Lead to conflicts with China (Opium War of 1844).
• Collapse of the EEAC:
• Facing intense discontent from other British interests, the
company gradually lost its monopolies from 1813.
• Dissolved in 1874.
• Holdings transferred to the British Crown which appointed
Governors.
© Dr. Jean-Paul Rodrigue
2. Long Distance Trade
■ Dutch East India Company
• The first Dutch expedition the Indonesia took place in
1595.
• Founded in 1602 by Dutch merchants:
• The world’s first multinational corporation.
• Conquest:
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Gained a foothold in Batavia (Indonesia; 1610).
Conquest of most of the island of Ceylon (Sri Lanka; 1640).
Took Malacca from the Portuguese (1641).
Sunk all vessels they found in Indonesian waters, removing
competition.
• Impacts:
• Replaced local trading networks with their own.
• Established fortified trading posts.
• Founded Cape Town (South Africa; 1650) as a stage for the long
Europe-Asia voyage.
• Took advantage of feuding Indonesian dynasties by arming allies
and gaining territorial rights.
© Dr. Jean-Paul Rodrigue
2. Long Distance Trade
• Plantations:
• Forced the introduction of new cultures such as coffee in West
Java (1711).
• Monopoly on nutmeg (meat preserver) and cinnamon.
• Destroying spice production on uncontrolled islands.
• One of the first true multinational corporation:
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By 1750, employed around 25,000 people.
Business in 10 Asian countries.
Built 1,500 ships.
Made 5,000 voyages to Asia.
• Bankruptcy in 1799:
• Corruption and mismanagement.
• Holdings transferred to the Dutch Crown which appointed
Governors.
© Dr. Jean-Paul Rodrigue
Dutch East India Company, Trade Network, 17th Century
© Dr. Jean-Paul Rodrigue
Major Global Trade Routes, 1400-1800
© Dr. Jean-Paul Rodrigue
B - THE INDUSTRIAL REVOLUTION
1.
2.
The European Origins of the Industrial Revolution
A “Revolution” in Industry
© Dr. Jean-Paul Rodrigue
1. The European Origins of the Industrial Revolution
■ Why Europe?
• Competition:
• Political fragmentation (monarchies and republics).
• Divided into competing corporate entities (early multinationals).
• The Scientific Revolution:
• 17th century breakthroughs in mathematics, astronomy, physics,
chemistry and biology.
• The Rule of Law and Representative Government:
• Private-property rights.
• Representation of property owners in elected legislatures.
• Modern Medicine:
• Breakthroughs in health care (19th and 20th centuries).
• Drop in death rates and increase in life expectancy.
© Dr. Jean-Paul Rodrigue
1. The European Origins of the Industrial Revolution
• Consumer Society:
• Supply of productivity-enhancing technologies.
• Demand for more, better, and cheaper goods.
• Work Ethic:
• Combine more extensive and intensive labor.
• Higher savings rates; sustained capital accumulation.
© Dr. Jean-Paul Rodrigue
2. A “Revolution” in Industry
■ Emergence
• Started at the end of the 18th century (1750-1780).
• Economic and social transformations first observed in
England.
• Demographic transition of the population:
• Fast growth rate.
• Improvements in sanitary conditions and hygiene.
• Why speak of “revolution” for a process occurring over on
more than 150 years?
• At the scale of the world’s economic history, the industrial
revolution radically changed the foundations of economic systems.
• It established the foundations of the global of the economy.
• Most of the technical innovations took place on a short period,
mainly between 1760 and 1800.
© Dr. Jean-Paul Rodrigue
2. A “Revolution” in Industry
■ Technological innovations
• New methods of production by trials and errors:
• New materials (steel, iron, chemicals).
• Substitution of machines to human and animal labor.
• Usage of thermal energy to produce mechanical energy.
• Changes in the nature production and consumption:
• Textiles.
• Steam engine.
• Iron founding.
• Production (factory):
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The first factories appeared after 1740.
Division of labor.
Increased productivity within a factory system of production.
Location (initially waterfalls and then coal fields).
© Dr. Jean-Paul Rodrigue
Major Technological Innovations of the Industrial Revolution
Power Generation
Textiles
Metallurgy
Transportation
Thermal energy used for
mechanical energy
Mechanization of spinning
and weaving
Mass production of steel
(shipbuilding, rails,
construction and
machines)
Modern transport and
telecommunication
systems
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First water pump (1712) in
mines.
Watt (1769); significant
improvements.
Steam locomotive (1824).
Electric generator (1831).
Steam turbine (1884).
Electric motor (1888).
Diesel engine (1892)
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“Flying shuttle” (1733)
doubled weaving
productivity.
“Spinning jenny” (1765).
“Water frame” (1768);
hydraulic power.
“Spinning Mule” (1779);
steam power.
Cotton gin (1793).
Sewing machine (1846).
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Coke instead of coal for
iron production (1709).
Bessemer process (1855).
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Railroads (1825).
Telegraph (1836).
Steamship (1838).
Transatlantic cable (1866)
Telephone (1876).
Airplane (1903).
© Dr. Jean-Paul Rodrigue
Geographical Impacts of the Suez and Panama Canals
© Dr. Jean-Paul Rodrigue
Productivity in the Textile Industry, Great Britain , 1829-1882
1000
120
900
100
800
700
80
600
500
60
400
40
300
200
20
Production per worker
100
Hours
0
0
1829-1831
1844-1846
1859-1861
1880-1882
© Dr. Jean-Paul Rodrigue
Turnpikes in Great Britain, Late 18th and Early 19th Century
35,000
30,000
25,000
Km
20,000
15,000
10,000
5,000
0
1650
1700
1750
1800
1850
© Dr. Jean-Paul Rodrigue
American Rail Network, 1861
© Dr. Jean-Paul Rodrigue
Global Telegraph System, c1901 (the Victorian Internet)
© Dr. Jean-Paul Rodrigue
2. A “Revolution” in Industry
■ Agriculture
• A second agricultural revolution.
• Introduction of new food sources:
• The potato could account for 22% of the post-1700 increase in
population growth.
• Crop rotation, selective breeding, and seed drill
technology.
• Less agricultural population.
• Growth of the production of food.
• Mechanization and fertilizers:
• Combine (McCormick, 1831).
• Scientific and commercial agriculture (crop rotation).
• Declining food prices.
© Dr. Jean-Paul Rodrigue
2. A “Revolution” in Industry
■ Social changes
• Significant urbanization:
• Migration from the countryside to cities.
• By 1870 more of the half of the population of the first industrial
nations was no longer in the agricultural sector.
• England had reached this stage since 1820.
• Towards 1901, 75% of the English population lived in cities.
• Creation of a labor class:
• Exchange of labor for a wage.
• London:
• Counted for half a million inhabitants in 1700.
• Reached a million during the first English census of 1801.
© Dr. Jean-Paul Rodrigue
Share of the Population in Agriculture, Early Industrial Countries,
1820-1910
90
80
70
60
Great Britain
France
Germany
United States
50
40
30
20
10
0
1820
1850
1870
1910
© Dr. Jean-Paul Rodrigue
2. A “Revolution” in Industry
■ Consequences of the industrial revolution
• Setting of high capacity maritime and inland transport
systems.
• Scramble to capture remaining territories.
• Consolidation of colonialism:
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First Opium War in 1839.
Opening of Japan in 1853.
Consolidation of British Raj in 1858.
“The Scramble for Africa” in 1890s.
© Dr. Jean-Paul Rodrigue
C – COLONIALISM AND ITS DEMISE
1.
2.
Colonial Economic Systems
The Demise of Colonialism
© Dr. Jean-Paul Rodrigue
1. Colonial Economic Systems
■ Colonialism
• Quest for riches and profit
• The most important factor.
• Early colonialism was a capitalist venture.
• Religious and racist drive:
• A moral justification.
• Support of the church.
• Military technology advantages:
• Better guns.
• Better ships (artillery).
• Two waves of colonialism:
• First wave: Mercantilism (1415 – 1815); independence of the
Americas.
• Second wave: Industrial revolution (1815-1969).
© Dr. Jean-Paul Rodrigue
Colonial Trade Pattern, North Atlantic, 18th Century
© Dr. Jean-Paul Rodrigue
Intermediate Globalization: The British Empire, 1897
20% of the world’s surface
25% of the world’s population
© Dr. Jean-Paul Rodrigue
Global Colonial Empires, 1900
© Dr. Jean-Paul Rodrigue
1. Colonial Economic Systems
■ Impacts of colonialism
• Annihilation and displacement of indigenous populations:
• 90-95% of the population died because of disease (e.g. smallpox)
and wars.
• Forced migration through slavery (Africa) or contract workers
(Southeast Asia).
• Development of the primary sector:
• Export-oriented plantations (sugar, cotton, tea, coffee, fruits,
rubber, tobacco, etc.).
• Suppressing industrialization (economic dependency).
• Dual society:
• Ruling elite class (sometimes a minority).
• Population in servitude (e.g. taxation).
• Artificial boundaries:
• “Balkanization”.
© Dr. Jean-Paul Rodrigue
World Trade Routes, 1912
© Dr. Jean-Paul Rodrigue
European Control of the World, 1500-1950
1800 (37%)
1878 (67%)
1913 (84%)
© Dr. Jean-Paul Rodrigue
2. The Demise of Colonialism
■ Decolonization
• Emerging nationalisms and patriotisms.
• Successful first wave of independence in the Americas
after the Napoleonic Wars (late 18th, early 19th century)
• Influence of Marxism-Leninism in explaining past
oppression.
• Japan’s impact in Pacific Asia during WWII.
• Nationalism was the driving force:
• Upheld by leaders such as Bolivar (Latin America), Sun Yat-sen
(China), Mao Zedong (China), Ho Chi-Minh (Vietnam) and Sukarno
(Indonesia).
• Created a wide variety of post-colonial governments and
ideologies.
© Dr. Jean-Paul Rodrigue
Decolonization since 1945
1945-1959
1960-1969
Since 1970
© Dr. Jean-Paul Rodrigue
D – WAVES OF ECONOMIC CHANGE
1.
2.
Socioeconomic Changes
Technological Changes
© Dr. Jean-Paul Rodrigue
Political-economic Forms of Globalization: Imperialism,
Mercantilism and Capitalism
Imperialism
Mercantilism
Capitalism
Definition
Expansion by
territorial conquest
Control and monopoly of
the trade of commodities
Generation and
accumulation of
capital
Growth
Domination and
subordination
Unequal trade
Productivity (profit)
Agent
Military
State
Corporation
Main relation
Tribute / trade
Trade / taxes
Transactions
Territories
Protectorates
Colonies
Markets
Example
Roman Empire
Dutch East India
Company
Ford
© Dr. Jean-Paul Rodrigue
Major Phases of Socioeconomic Change
Stone Age
Feudalism
Industrial
Planetary
Organization
Tribe / Village
City-state,
Kingdom
Nation-state
Global
governance
Economy
Hunting and
gathering
Settled agriculture
Industrial
system
Globalization
Communication
Language
Writing
Printing
Internet
© Dr. Jean-Paul Rodrigue
Long Wave Cycles of Innovation
Mass Production
Pace of innovation
Industrial Revolution
Water power
Textiles
Iron
1785
60 years
Post Industrial
Steam
Rail
Steel
1845
Electricity
Chemicals
Internal-combustion
engine
55 years
1900
50 years
Petrochemicals
Electronics
Aviation
1950
40 years
Digital networks
Software
New Media
1990
30 years
© Dr. Jean-Paul Rodrigue
Long Run Productivity Growth
Commodity
1-speed Bicycle
Time to earn
1885 (hours)
Time to earn
2000 (hours)
Productivity
multiple
260
7.2
36.1
Office chair
24
2.0
12.0
Hair brush
16
2.0
8.0
Silver Spoon
26
34.0
0.8
© Dr. Jean-Paul Rodrigue
Cumulative Waves of Transport Development
Sailships
Canals
Railways
Highways
Airports
(17-18th
century)
Empires and
global trade
networks
(19th century)
Inland access
(19-20th
century)
Inland and
national
accessibility
(20th century)
National
mobility
systems
Suburbanization
(20-21st
century)
Global mobility
systems
© Dr. Jean-Paul Rodrigue
Primary Energy Production by Source, United States, 1750-2010
25,000,000
Coal
Biomass
Petroleum
Natural Gas
Hydroelectric
Nuclear
Billion BTU
20,000,000
15,000,000
10,000,000
5,000,000
0
1750
1800
1850
1900
1950
2000
© Dr. Jean-Paul Rodrigue