History
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HST363_2_Mercantilsm.pptxEurope in Asia
Gunpowder, expansion and state consolidation in a world of limited good
Topics
European Overseas Expansion
State consolidation
The Gunpowder Revolution
Mercantilism: The policy of imperial expansion and state consolidation in a world of limited good
Southwest Asia
European Exploration as Desperation
Cut off from access to main trade centers.
Even before cut off, access difficult and expensive.
Access connected to European state formation/consolidation
Henry the Navigator
Connecting through N. Africa
Finding Prester John
Portuguese Exploration
European Entry into Indian Ocean and End of Polycentrism
Reconquista in Spain (unification of Iberian peninnsula by kicking out Muslims and Jews)
State building
Gunpowder (shift in military technology)
Different attitude to property (concept of private property based on application of labor: labor theory of value)
Different attitude toward trade; modeled on practices of Italian city-states in Mediterranean, which extended practice of control over trade in ports (common throughout the world) to shipping lanes.
Running a protection racket along shipping routes like modern day pirates)
As such, brought different attitude to trade into the largely self-regulating, polycentric system of Indian Ocean basin
Armed trade
Beginning of end of polycentrism in global economy
Europeans arrived and did not find this
China as the big player in all of this, the driver of global trade
Voyages of Admiral Zheng He, 1405-1433
Specifically charged w/ encouraging trade after collapse of Mongol empire, years of Chinese isolation and earlier policies (and lack of silver) led to collapse of trade and Chinese currency
And then, as suddenly as they appeared, the Chinese were gone
By beginning of 16th c., everyone wants in on the action
The Emergence of the Modern State, c. 1500-1700 as means to achieve this
What do we mean by “modern” or “nation” in this context?
What factors contributed to consolidation of political authority in centralized states?
Gunpowder
What policies sustained consolidated states?
Revenue, recruits and labor
All had to be extracted from a world of limited good
What do we mean by “modern” state?
Modern:
Centrally administered states that can extend their authority throughout territory (more or less)
Nation?
yes and no
although rhetoric was there, much still missing, such as homogenous print culture and internal markets
New types of identities
Medieval “local” erodes further, even for rural inhabitants
Social estate (more caste than class) still important, but “subject” of a particular ruler becoming more prevalent among population
But remember…
“I’m not dead yet!”
Empire as a form of political organization still viable, vibrant and, in many ways, victorious (made it to 20th Century):
Russian Empire
Ottoman Empire
Qing Dynasty
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Two Tracks for State Development
Both claimed to benefit the commonweal/the common good
Limitation of monarchy by law and representative institutions—England; later US and France
Monarchy loses (but not entirely yet)
Royal absolutism
It’s good to be the king (but you need to be wary)
Pillars of Absolutism
Louis XIV, 1638-1715
Peter I (The Great), 1672-1725
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Absolutist Shock & Awe
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Factors contributing to consolidation of Europe into centralized states?
War and marriage as strategies for increasing slice of the pie in Biological Old Regime
Expanded dynastic geographic interests beyond those of medieval world
In effect, brought Europe closer together
Pressure of competition for a slice of Indian Ocean trade and the New World—growing sense that winning this race was important to survival
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The Gunpowder Revolution
Medieval Warfare
Offense
Swords, pikes, lances, long- and cross-bows
Defense
Armor, castles
Soldiers
Divided along estate (caste) lines
Led by nobility as privilege
Other than nobility, and elite units (archers), received little training
Largely assembled as needed
Largely equipped by soldiers or officers themselves (outside of siege equipment and hiring mercenaries)
Political implications?
Decentralized political authority
Modern Warfare
Offense
Cannons and muskets (expensive)
Defense
Having more cannons and muskets
Soldiers
Still divided along estate lines
COULD still be led by nobility, but not necessarily so
Required lots of training
Had to be kept largely intact on permanent basis
Had to be equipped by the state
Political Implications
Centralized political authority
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Implications? Conquest in the East
Conquest in the West
Implications?
Gunpowder revolution
Shifted balance between king and nobility in king’s favor
Required development of larger bureaucracy—extension of royal authority
This, too, was expensive
Portrait of Cardinal Richelieu, 1637—chief minister of Louis XIII
Mercantilism: the “ism” of the world of limited good
Jean-Baptiste Colbert, 1619-83
Fueling the Early Modern State
Constant shortage of funds
War, war and more war
Changing nature of warfare
Baroque obligation
“World of Limited Good”—Biological Old Regime
Advent of national economic policies
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Mercantilism
Fueling the Early Modern State
Definition
Attempt to create comprehensive economic policy to serve fiscal interests of the state
Goal: Accumulate bullion or specie (silver & gold)
Economic Self-Sufficiency or autarky
Import as little as possible
Limit consumption—sumptuary laws
Protect/Promote domestic industry
Staatswissenschaft or Kameralwissenschaft; Polizeistaat
good of the state equated with “common good”
“rightly-ruled” state
States can and must have comprehensive economic (fiscal) policies
Recognition that other sources of revenue could be more lucrative and less politically burdensome than land
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Mercantilism In Action
Autarky (self-sufficiency)
English Navigation Acts
Autarky + sticking it to Dutch
Cotton cloth—India’s competitive advantage put large hole in mercantilist aspirations
Protectionism and import substitution
In England, Glorious Revolution (1688) enhanced these sentiments, as Parliament’s enhanced control over crown signaled growing power of merchant class.
Mercantilist policies
Creation of “national debt” and “national bank” (Bank of England)
Parliament banned import of Indian cotton textiles in 1707
French laws of 1717 banned wearing of Indian cotton or Chinese silk
The Peculiar Imperial Periphery: How sweet it is!
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Mercantilism
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Mercantilism In Action
England, France and Holland did this best
Had already chartered joint-stock trading companies and given them monopolies and carte blanche to prey on Spanish and Portuguese
Joint-stock model spread risk
Birth of insurance industry
English (later British) East India Company (1600)
Dutch Vereenigde Oost-Indische Compagnie (1602)
French Compagnie des Indies (1664)
Mercantilism In Action
Dutch East India Company pursued a strategy based on conquest, especially at the expense of the Portuguese
Malacca (1641)
Mercantilism In Action
English East India Company initially avoided conflict, exploiting weak parts of S. Asia neglected by competitors
Until Plassey (1757) & Pondicherry (1759)
Seven-Years War (1756-1763)
Significance?
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Mercantilism
Commercial, as opposed to industrial, capitalism
Fuelled by colonies
Generating wealth through investment in overseas trade
Entrepreneurs and joint stock companies in which private individuals made economic decisions
BUT
Did so within context of a national economic policy that tried to force them to always put the good of the state first.
Mercantilism
Thus, Europe negated the comparative advantage of Asia first, through gunboat trading, imperial conquest, and state attempts to control economy for its own benefit (NOT free trade).
State equated this with the “common good,” as it was the only institution above the “petty” needs of individuals
