Frank1978.Pdf

WORLD ACCUMULATION, 1492 - 1789 Andre Gunder Frank 1978 Algora Publishing New York The inquiry into this question would be an inquiry into what the economists call Previous, or Original Accurnula- tion, but which ought to be called Original Expropriation. - Karl Marx, “Wages, Price and Profit” (1969:56) Indeed, the booty brought back by Drake in the Golden Hind may fairly be considered the fountain and origin of British Foreign Investment. Elizabeth paid off out of the proceed the whole of her foreign debt and invested a part of the balance (about i42,OOO) in the Levant Company; largely out of the projits of the Levant Company there was formed the East India Company, the profts of which during the seventeenth and eighteenth centuries were the main foundation of England’s foreign connections; and so on. , this is quite sufficient to illustrate our argument . , that the greater part of the fruits of the economic progress and capital accumulation of the Elizabethan and Jacobean age accrued to the profiteer rather than to the wage-earner. , , . Never in the annals of the modern world has there existed so prolonged and so rich an oppor- tunity for the businessman, the speculator and the prof iteer. In these golden years modern capitalism was born. Thus the rate at which the world's wealth has accumulated has been far more variable than habits of thrijt have been. , . It is characteristic of our historians that, for example, the Cambridge Modern History should make no mention of these economic factors as moulding the Elizabethan Age and making possible its greatness. , We were just in a financial position to afford Shakespeare at the moment when he presented himself? . It would be a fascinating task to re-write Economic History, in the light of these ideas. - John Maynard Keynes, A Treatise on Money (1930) Contents Preface 11 1. The Sixteenth-Century Expansion 25 2. The Seventeenth-Century Depression 65 3. The Political Economy of Cyclical Expansion and Rivalry, 1689-1763 103 4. The Transition in India to the Transformation of Asia 135 5. Depression and Revolution, 1762-1789 167 6. The Eighteenth-Century Commercial Revolution in .%ccumulation 213 7. Conclusions: On So-called Primitive Accumulation 238 Bibliography 273 Index 291 Preface I think authors ought to look back andgive us some record of how their works developed, not because their works are important (they may turn out to be unimportant) but because we need to know more of the process of history- writing. Historians today generally recognize, like social scientists, that their scholarship is an activity in which they are themselves participants. Writers of history are not just observers. They are themselves part of the act and need to observe themselves in action. Their view of what “really” happened is JilteredJirst through the spotty and oft en hit-or-miss screens of available evidence, and second through the prisms. of their own interest, selection, and interpretation ofthe evidence they see. The result can only be an imperfect approximation. Fortunately, no one has to regard it as the last word. Once an author looks back at what he thought he was trying to do, many perspectives emerge. Foremost is that ofignorance, at least in my case. A book that to its author is a mere antechamber to a whole unwritten libray, bursting with problems await- ing exploration, may seem to his readers to have a solidity which shunts their research elsewhere. It is useless to assure them that the book is really full of holes. -John King Fairbank, Trade and Diplomacy on the China Coast (1969) In this preface, I shall first try to look back and give some record of how this work developed, before saying something about what this book is about. In a way, I shall reminisce and dialogue in my o’wn 11 12 Preface way with this book on history, pursuing problems of today and not of yesterday. In the preface to Capitalism and Underdevelopment in Latin America, dated nine years ago today (July 26, 1965) I wrote about: the need in the underdeveloped and socialist countries for the development of a theory and analysis adequate to encompass the structure and development of the capitalist system on an integrated world scale and to explain its contradictory development which generates at once economic development and underdevelopment on international, national, local and sectoral levels. (Frank 1967: xv) That book itself, of course, did not intend or pretend to fill this need. It sought, as the same preface further states, only to provide the historical context-or perhaps to propose an approach which places Chile and Latin America in the historical context-in which contemporary “underdevelopment” should be studied and from which certain political conclusions could and should be drawn. This approach, which encompasses my own later writings along with thousands of others on Latin America, became associated with the “new dependency” school of theory and praxis that emerged in Latin A4mericaduring the 1960s. These writings were, if I may quote this time from the preface of my second book, Latin America: Underde- velopment or Revolution, “the expression of the changing times and problems that gave them birth, filtered through the also-changing prism of the author’s and others’ conscientization and understanding . I . [in the] attempt, like millions of others, to assimilate the Latin American Revolution and the inspiration it finds in the Cuban Revo- lution” (Frank 1969: ix). Beginning in 1967, simultaneously with, if not directly in re- sponse to, Che’s call for “two, three, many Vietnams,” and in collaboration with my friend, comrade, and colleague from India, Said A. Shah, I sought to apply or extend this “dependency” approach to the study of underdevelopment in ,4sia, the Middle East, and A4frica,as well as Latin America. Since we ourselves did not know enough to write a book encompassing all these areas of the world (and their relations with the “metropolis”), we undertook to edit a reader or anthology assembling other people’s writings on underdevelopment. Unlike other readers, this one did not intend to be representative of anything or anybody, but rather sought to use Preface 13 existing partial analyses to construct, as in a jigsaw puzzle, an emergent “dependence approach,” or even “theory,” distilled out of the bits and pieces of experience from each of these areas of ):he world, and from subcontinents within them, such as India. Volume I of this projected two-volume reader was to be historical and, based on the proposition that “theory is history,” it tried to show 1:he development of underdevelopment in each of these areas taken separately, in order to conclude that underdevelopment is the product of capitalism. Volume I1 was to be contemporary and, analyzing im- perialism, class structure, politics, and ideology, it sought to conclude that the only way out of underdevelopment is through national liberation. * In 1969, after some reformulations of “dependence” in Latin America published as Lumpenbourgeoisie: Lumpendevelopment, I undertook to write a theoretical introduction to the historical volume (I) of the underdevelopment reader, attempting to formulate The dependency thesis on a tricontinental scale. The fifty-page first draft, however, exceeded the bounds of an introduction, at least in length. Moreover, the second draft (expanded to one hundred pages in the process of grappling with certain theoretical problems) also began to exceed the scope of an introduction to the theory of dependence in that it sought to deal with the determination of the modes of production in the periphery by the exchange relations between the periphery and the metropolis. Several friends read and criticized this draft, a.nd two critiques in particular determined the reformulations in the third draft. One was that of Giovanni Arrighi, who wrote (as he further developed in t\vo articles [1970, 19721) that I had inverted the direction of determination: as Mao observed in his essay, On Contradiction, from the same external heat applied to a stone, nothing emerges, while from an egg a chicken is born-thus the internal contradictions in a thing, and not its external env‘ircin- ment, are determinant in its development. Similarly, Arrighi iar- * Volume I \vas completed in 1969, but to this date it has not been published, since progressive (and therefore financially impoverished) publishers found the book, which consisted of eighty-eight selections, including many translations, on nearly 1,000 pages, too expensive to produce, while commercial and university publishers refused on the same grounds, but also had political objections against its publication. Volume I1 was never completed. 14 Preface gued, it is the “internal mode of production” that determines the “external exchange relations,” and not lice versa, as I had main- tained for the underdeveloped areas (circulation determining production in the periphery of the capitalist system, as Ruy Mauro Alarini would later formulate it in “dialectics of dependence” [ 19731). The other most influential critique lvas that of Samir ,Amin, who wrote that in treating dependence separately in Asia, the Aliddle East, and Latin America (as was done in the anthology itself) I was not only looking at the rest of the world with Latin American eyes, but also neglecting the historical stages in the development of capitalism and the differences among dependent modes of production that were the result, for example, of Latin America’s incorporation into the process of capital accumulation in the sixteenth century, and of part of Africa’s incorporation in the twentieth century. The third draft* completely abandoned the idea of an introduction, both in length and in scope. Instead it tried to contribute to “the development of a theory and analysis adequate to encompass the structure and development of the capitalist system on an integrated aorld scale,” for Lvhich I had pleaded five years earlier.

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