In his study of the expansion of the Cotton Empire, Sven Beckert continues drawing parallels between what was the first world-encompassing trade product, and modern globalism. The main statement of chapter 8, which he puts forth, is that cotton trade was the predecessor of the global economy as we know it, and served as a foundation for numerous practices and economic institutions. This paper will focus on the analysis of Beckert’s arguments, which he used to support that claim.
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The modern economy is a world-spanning supply chain, where certain countries produce and supply raw materials, industrial countries work with it to create goods, and post-industrial countries create advanced technology that it sells to industrial countries. The same chain can be perceived in the cotton empire – cotton is grown in the USA using extensive slave labor, then it is shipped to Liverpool and used to create cotton fabrics, after which these fabrics are shipped to China and India, where labor is cheap and allows for producing cheap, durable, and reliable clothes. If we look at the majority of modern industries, the situation is remarkably similar, with China and India still used as the source of cheap labor. As Beckert remarked in his writings, “Never before had any industry connected the activities of so many growers, manufacturers, and consumers across such vast distances.”
An alliance between war capitalism and industrial capitalism is what allowed this system to flourish. War capitalism provided lands and cheap labor in the form of slavery and subjugated markets that were otherwise closed. Industrial capitalism, on the other hand, provided the industrial might and skilled labor to turn the results of raw menial labor into advanced products of civilization. According to Beckert, “for the marriage between slavery and industry to succeed, however, first, merchants had to profitably transmit the patterns of machine production and industrial capitalism into the global countryside.” This system benefited everyone – the slavers of the New World and the industrial magnates of the Old World. The only ones that did not benefit from it were the slaves.
If we continue to draw parallels between the empire of cotton and the modern globalized economy, we will find even more similarities. For instance, the evolution of the world banking system was spurred by the need of merchants and planters to take loans and make investments into prospective enterprises. The very first Cotton Exchange was founded in Liverpool – the predecessor of Wall Street. Merchants became more specialized in their trades due to the fragmentation of the vast and enormous cotton empire – becoming experts in their areas or regions.
Another argument that Beckert offers in support of his statement is the fact that information became an invaluable commodity. With stock prices on cotton rising and falling, and deals becoming risky due to a great abundance of fraud and unreliable one-day companies, reputation and information became all the more valuable. A specialized branch of merchants appeared, not traders or brokers, but informants. They peddled information and offered predictions and analysis, much like economists and analysts are doing now. According to Beckert, “being able to provide information, not surprisingly, was a major source of prestige, and a primary way that both an individual merchant and his firm improved their reputation.”
It is no surprise that in this system, merchants and traders became a prominent, powerful force. Large wealth and power were accumulated in the hands of the few. This is reminiscent of the situation in the modern world, where wealthy businesspersons, combined, hold more wealth than over 80% of the population. To promote their interests, merchants began forming lobbies in the English parliament, and other governmental structures around the world. They became the driving factor behind expansionist policies in Eastern Asia and the USA, as the formerly possessed markets and sources of cheap labor, and the latter provided land for the ever-expanding cotton fields. While India was notorious in its resistance to the expansion of the cotton empire to its markets, it did not stop the empire from growing larger and stronger.
Returning to Beckert’s initial argument about the events of 1800-1850, which lead to the foundation of a prototype of the modern globalized economy, we can see how this line of thought is backed up by many facts and similarities between the two systems. However, there is another, unspoken argument that is weaved across the entire book. For the system to work, someone has to do the cheap, hard, and dirty work, while the others reap the benefits. Cotton Empire had slaves and citizens of pre-industrial countries to exploit. In the modern global economy, slavery is abolished. Instead, there are citizens of countries like China or India, ready to work in backbreaking conditions and for meager pay, thus enabling the production of cheap goods for the rest of the world. It can be compared to slavery in more ways than one, as citizens of those countries are forced into labor en-masse by the realities of the labor market. Thus, the second argument promoted by Beckert in this chapter is a subtle criticism of the modern economy, as it needs inequity to function.