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Sugar, Silver, Coal, and the Making of the Modern World Economy

Posted August 23rd, 2014 at 04:47 PM by spellbanisher
Updated November 5th, 2014 at 05:53 AM by spellbanisher

Commodities provide a window into world history, as they are traded across borders and produced over multiple regions. The transregional division of labor is usually determined by differential environmental factors and political power. In the last thousand years, commodities production has typically been divided between raw goods providing countries that feature the ecological conditions as well as the social structures to supply cheap raw materials, and countries or regions where the raw materials are manufactured into goods to be sold on world markets. In short, geography, climate, and geopolitics all play roles in how goods are produced and sold. Additionally, historical contingency helps determine the importance of individual commodities. In the last millennium, many commodities have contributed to the process of global economic integration. Three commodities—sugar, silver, and coal—were of particular importance. Sugar accelerated the process of integrating West Africa and the New World into the global economy, silver was critical in the creation of the early modern world economy, and coal helped set off an industrial revolution that transformed the structure of global power.

Sugar served as the lynchpin in trade between West Africa, Europe, and the Americas in the early modern period, yet its origins lie elsewhere. The Middle Ages witnessed the birth of Islamic empires that linked Southeast Asia to the Mediterranean. The Islamic intermediary facilitated the transfusion of Indian crops, such as sugar, into Europe.1 This transfusion of goods has been called “the Abassid Exchange” (echoing the more well-known Columbian Exchange).2 Before the Abbasid Exchange, Europe’s only source of sugar was honey.3 Eventually, sugar became a common good, but before that occurred, new forms of economic organization had to develop.

The peculiar nature of sugar contributed to the formation of a new kind of economic organization, what Philip Curtain has called “the Plantation Complex.” One peculiar aspect of sugar was that it was not a sufficient subsistence food. Therefore, it could only economically be viable as an export.4 Sugar production was extremely labor-intensive and required precise and demanding procedures, culminating in a production process with a labor division and systematization that were uncommon in Europe at the time.5 If one agrees with Kenneth Pomeranz and Steven Topik, plantations should be considered the first factories.6 Curtain outlines six features of this system of production in a mature stage: most of the productive labor was forced labor, the population was not self-sustaining, agricultural enterprise was organized in large-scale capitalist plantations, capitalism coexisted with feudalism, it supplied a distant market with a highly specialized product, and political control lay outside of the plantation.7 But for environmental reasons, this mature stage of the plantation complex did not evolve in the Mediterranean. Sugar grows best where heat and water are year-round, making the Mediterranean, with its cold winters and dry summers, less than ideal.8 Thus, climate compelled the migration of the plantation complex outside of Europe, which was made possible with the discovery of the Americas.

Before moving to the effects of the plantation complex in the Americas, a discussion of why the Americas were discovered by Europeans in the first place matters. In the late medieval period, the weight of global trade and wealth disproportionately favored East and Southeast Asia.9 The collapse of the Mongol empire closed off overland routes, and Muslim domination in the eastern Mediterranean denied Europeans a middle route to the riches of Asia.10 Their only path was the long and perilous trip around the tip of Africa, so Columbus sailed west to find a new path. His discovery of the Americas was important not just for the evolution and migration of the plantation complex, but also because it would provide Europe a means to buy into the Asia dominated world system, namely, lots of silver.

The silver of the Americas might not have mattered so much if not for another contingent event, the Ming turn to a silver standard. Yuan abuse of fiat currency had encouraged the Ming to adopt the silver standard; however, China was not rich in that particular metal. In the fifteenth century, China primarily got its silver from Japan, but after the discovery of the Americas, silver from the Potosi mines became China’s most important source of silver. In the early modern period, somewhere between one-third and one-half of all silver produced in the world flowed to China.11 Indeed, it was one of the only commodities that Europeans could trade with Asians. American silver greatly stimulated global trade, and in turn, economic development, especially in China and in Western Europe.12 As the economies and populations of Western Europe grew, so did demand for cash crops such as tobacco, coffee, and sugar. Of all the cash crops, sugar was probably the most important.

The demand for sugar irrevocably transformed the Atlantic world, but its effects depended upon contingent historical factors as well as geography and climate. In Brazil and in the Mediterranean, Europeans found land that was environmentally suitable for the production of sugar. However, shortly after they arrived in the Americas, Native American populations collapsed from the communicable diseases that Europeans brought. Consequently Europeans had to resort to importing labor from the old world. Initially, the imported labor consisted of indentured servants, but European immigrants died at high rates from tropical diseases such as malaria and yellow fever.13 Eventually, Europeans turned to Africa for labor.

Europeans did not merely go to Africa and take people as slaves. For the plantation complex to get up and running in the Atlantic, certain conditions—environmental, political, and social—had to exist in Africa. First, the highly fatal diseases in Africa precluded Europeans from setting up plantation complexes there. Second, African exposure to tropical diseases at young ages gave them greater resistance than Europeans to the kinds of diseases that were in the Americas.14 Third, Africans already had systems of slavery and slave trading in place.15 On the third point, the importance of silver cannot be underestimated. One of the primary goods Europeans traded for African slaves was Indian textiles.16 Europeans would not have been able to obtain Indian textiles without the silver from the Americas. Due to all of these factors, African slaves became the principal form of labor for the plantation complex.

An estimated 10 million Africans crossed the Atlantic in the early modern period, which constituted the largest migration of people in this time period.17 In turn, the slave trade profoundly reshaped both sides of the Atlantic. In Africa, the slave trade reoriented entire societies. As Donald Wright shows in The World and a very Small Place in Africa, the slave trade strengthened state formation and power between the seventeenth and the nineteenth centuries as rulers, enriched from exchanges with European trading posts, competed for slaves.18 The wealth from slave trading encouraged the Niumi to become more dependent on imports, and by the nineteenth century the Niumi were no longer even food sufficient. Furthermore, the reliance on slave trading discouraged Niumi society from other paths of economic development that might have made them more productive over the long run.19 In the Americas, entire societies emerged around the plantation complex which was neither entirely capitalist nor feudal.20 As was the case in West Africa, the societies in South America, Central America, and the Southern United States became highly hierarchical and dependent on volatile global commodities markets for economic growth. 21

Just as silver stimulated demand and growth in Europe, it stimulated it in China as well; however, the results of this stimulus would be monumentally different for Western Europe and China. Overall, estimates indicate the population in Europe doubled between 1500 and 1800, whereas the population of China tripled, and its share of global economic production increased as well.22 But in the Malthusian era growth was not without its costs. By the nineteenth century, both China and Western Europe were pushing the limits of their ecological capacities.23 With a little luck, Western Europe, and specifically Great Britain, was able to escape an ecological cul de sac and launch an industrial revolution. The Industrial Revolution pushed the world into a new energy regime that, at least temporarily, freed humanity from ecological constraints.

For almost all of history, societies relied on animal and human labor for their productive energy, and to a lesser extent, energy from fire and water. In the late-eighteenth century, the invention of the Watt steam engine unlocked he productive capacities of coal. In the fossil fuel regime (1800-present), more energy would be consumed than in all of the thousands of years of prior human history combined.24 The traditional way of narrating the invention of the steam engine attributes it to a wider scientific culture in Europe, or in other cases, to specific legal and institutional reforms in Great Britain (such as patents and property laws). In other words, British culture is said to have been uniquely suited for an industrial revolution.25 As Ken Pomeranz has shown, geography was also likely a necessary factor in the mastery of coal technology.

The development of steam technology in Great Britain took place over the course of several generations in response to unique ecological conditions. In Great Britain, coal was located close to metropolitan centers and at the mouth of rivers. This meant that coal was fairly cheap and in demand. As coal was located at the mouth of rivers, the primary problem facing coal producers was flooding, providing them the incentive to tinker with steam powered pumps that could remove water from mines. As the supply of coal was cheap and abundant at the mouth of a mine, economic costs were not a significant deterrent in the development of steam technology. It was practical knowledge and experimentation allowed by fortuitous ecological conditions, and not scientific culture, that promoted the invention of the steam engine in Great Britain. Indeed, Pomeranz shows that in France there were more books produced on steam technology than in Great Britain, yet the French could not master the technology until they imported British mechanics.26

Whereas geography made the development of steam technology in Great Britain economically rational, it discouraged industrial technologies in China, where coal was located in dry, underground areas in and away from the more commercially dynamic centers of the South. The problem the Chinese faced was not flooding, but explosions.27 Whereas traditional accounts of the “great divergence” blame traditional Confucian culture for throttling Chinese dynamism, the reality is that there simply was no economic incentive for Chinese mechanics to work on coal powered technology. Indeed, the data on population growth, life expectancy, and human and commodity movement indicates that China was just as dynamic if not more so than Western Europe in the early modern period.28

Historical contingencies also worked against China. Chinese coal reserves are concentrated in the less densely populated and less economically developed regions of the North. The economic center was not always located in Southern China. It was in the North during the Han and Tang dynasties, but between the years 1100 and 1400, a series of catastrophes, invasions, occupation, civil wars, enormous floods, and plague hit North China, pushing the demographic and economic center southward.29 Thus, historical contingency and geography worked against a Chinese industrial revolution.

Coal helped liberate Great Britain from the constraints of a Malthusian regime. Initially, colonies mattered more, supplying “ghost acres” for the land intensive crops, such as cotton, that would fuel the British industrial revolution. Nevertheless, the mass production of goods such as steel would not have been possible without fossil fuel technology. By 1815 the energy from coal bestowed Britain with an estimated 15 million “ghost acres.”30 It also very likely that steam powered factories allowed the British to surpass India in textile manufacturing productivity. A steam powered driven spinning mule in 1800 could produce as much as 200 to 300 cotton spinners.31 Furthermore, coal technology dramatically altered the global power structure, as steam powered war ships led to a decisive British victory over China in the opium wars. As coal technology diffused throughout Europe, the nineteenth century would be dominated by Europeans. If one finds of the arguments of Andre Gunder Frank and Janet Abu-Lughod convincing, a European dominated world was something new in history, and this was made possible through unleashing the power of coal.

Sugar, silver, and coal were integral to the creation of the modern world. Sugar production was arguably the first modern capitalist enterprise, and it would transform the social, political, and economic structure of Africa and of the Americas. Without the silver from the Americas, the early modern world economy might not have been possible, as Europeans had little else to trade with Asians. Without the early modern growth, the trajectories of China and Western Europe might have followed very different paths. Coal created a new world order. It has so far freed humanity from the Malthusian regime, and it has led to levels of productivity that were simply impossible under the solar energy regime. Furthermore, it dramatically altered the global balance of power and wealth, shifting it decisively in favor of Europe and her offshoots. However, it is critical to understand that the importance, exploitation, and mastery of these commodities depended on geographical factors and historical contingencies.

1. Philip D. Curtin, The Rise and Fall of the Plantation Complex: Essays in Atlantic History (Cambridge [England]: Cambridge University Press, 1990), 3-5.

2. David Christian, Maps of Time An Introduction to Big History (Berkeley: University of California Press, 2004), 370.

3. Curtin, 3.

4. Curtin, 5.

5. Curtin, 4.

6. Kenneth Pomeranz and Steven Topik, The World That Trade Created: Society, Culture, and the World Economy, 1400 to the Present (Armonk, N.Y.: M.E. Sharpe, 2013), 254-255.

7. Curtin, 11-13.

8. Curtin, 18.

9. Janet L. Abu-Lughod, Before European Hegemony: The World System A.D. 1250-1350 (New York: Oxford University Press, 1989), 12-14.

10. Abu-Lughod, 359-360.

11. Andre Gunder Frank, ReOrient Global Economy in the Asian Age (Berkeley: University of California Press, 1998), 146.

12. Frank, 156-164.

13. Curtin, 38-40.

14. Ibid.

15. Curtin, 35-38 and 40-42.

16. Donald R. Wright, The World and a Very Small Place in Africa: A History of Globalization in Niumi, the Gambia, (Armonk, N.Y.: M.E. Sharpe, 2010), 89.

17. Wright, 88.

18. Wright, 70.

19. Wright, 110-112.

20. Curtin, 46-70.

21. Wright, 212-216.

22. Frank, 168.

23. Kenneth Pomeranz, The Great Divergence: China, Europe, and the Making of the Modern World Economy, (Princeton, N.J.: Princeton University Press, 2000), 241.

24. Christian, 459.

25. Pomeranz, Introduction

26. Pomeranz, 65-68.

27. Pomeranz, 65.

28. Pomeranz, Part One.

29. Pomeranz, 62.

30. Pomeranz, 59.

31. Christian, 421.
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