Posts Tagged ‘Colonialism’

Please find enclosed a copy of Benedikt Koehler’s text on the application of market based principles extensively throughout out the early and later eras of Islam.

I hope to write more about this enlightening piece in a later post, but meanwhile, please do download a copy and read all about the history you never knew

Early Islam and the Birth of Capitalism – Benedikt Koehler

Also view the following presentation delivered in the City of London at the Legatum Institute, which includes a Q&A

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Consider this post in reference to the concept of derivatives.

I feel that if anyone wants to attempt any critique of the derivatives market in its entirety, one has to move past any continued emphasis on ‘casino capitalism’, as this is an oft repeated line which, whatever its merits or otherwise, has become an easy reply for those who favour such practices.

I believe one needs to concentrate on debunking the notion of risk management in order to effectively retort.

Many supporters of derivatives would rightly point to their use is not just to speculate with (as in Investment Banking), but as a valid means to manage risk, especially in Insurance, and it is this aspect which deserves further attention in my humble opinion

The above linked post brilliantly draws together the notion of colonising time as an integral commodity, matching any such physical asset, thereby shinning a much needed light on the important and neglected aspects of this discourse of, post colonialism and global racial financialisation.

It has been oft repeated that in our democratic, liberal societies, the few have greater power over the many

Is it the top 1% that owns a greater share of the capital and wealth than the remaining 99%? It is interesting to think of how many of these ‘many verses few’ statistics genuinely exist when analysing our reality

Given the freedom to own property and generate capital, which can indeed be a positive thing, to what extent is this so open to abuse that the rules of the game were never really meant to create fairness and a degree of equality? Is human nature, which is left unchecked, too prone to avarice that such freedoms will always result in a small elite hungry to capture ever more resources than required?

This is not another post looking to promote controlled economies,  however its purpose is to illustrate that, with the best of intensions, will some freedoms, when applied to a population shaped and conformed to behave in a certain manner, always result in a pyramidical structure taking shape where these conditions exist? Is this shape the overriding effect of all the freedoms at our disposal? Consider the following;

Top Asset Management firms by total value of assets under management

Think about what this data is actually telling us; when asset managers acquire equity, or interest in another business enterprise, they take a degree of ownership in that firm. Thereby, over time and because of the funds that flow to these giant institutions, the few in combination, have ended up in a position of ‘owning’ in part or in full, the many corporations that they have a share in – allowing them to ascend to the top of the pyramid; the few owning much greater proportion combined than the many. It also follows that this leads to a common source of control and influence across an economy/region given this limited pool of effective ownership.

Another perspective on this could be that much of this capital originates from the mass population who are the ultimate owners, through their long term savings and pension provisions invested with these providers. Therefore, is this an attempt to invert the structure, allowing the many to benefit? I would argue not, the masses, when considered individually, on average, do not financially benefit as much as the managers who take material cuts from the pool of funds at their disposal. Often their reward incentives are not adequately aligned with the retail investors at large, allowing the elite to become disproportionally better off than the investors who are searching for gains. The small investor is also not the party which excercises the controlling power.

In addition to this asset ownership, consider more generally, how much land the few own in comparison to the larger population, the size of GDP of the few regions compared to the many, the distribution of resources, the access to what is classed as the best quality of education, the trend continues and the structure that we can continually see forming is that of a top down, hierarchical pyramid – it should be clear from such insights what the ultimate power structure of the contemporary world is and what the fruits of everybody’s efforts are really delivering.

 

 

By following the money trail it is possible to  discover how intertwined British Imperialism was with its emergence as an economic power and the prosperity created for the nation.

Please read the following eight short pieces by James Walvin, on the monuments and show pieces across Britain and the people behind them, all connected to various trades directly linked to Slavery.

I will continue to explore this topic in a number of posts in future under a similar title

One of the most decorated US military officers, Smedley Butler famously wrote in his book ‘War is a Racket’;

I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.

His comments were in part reference to the ‘Banana Wars’ – a perfect example of how the gun, and not the market, dictates so-called free-trade.

My recent posts have centred on exploring the link between European imperialism and the establishment of global trade and capitalism. However, the Banana Wars illustrate a poignant example of US imperialism – although of course, this nation is of European origin itself.

In place of British concerns regarding the Suez Canal and its lucrative connections of trade routes, we find US concerns of the Panama Canal and the ‘neighbourhood’ of the Americas which needed to be dominated and controlled. In place of the East India Corporation and its exploits, we find the United Fruit Company, and its overriding financial interests in the various plantations and crops of the Latin Americas. The motives are similar, however these wars took a slightly unusual turn in 1990’s when the slave masters took on each other for almost complete control of a key market

The former US colonies in South America which yielded Bananas had some competition from former European colonies in the Caribbean and Africa which were large exporters to the Euro area. I say some competition, because the large US corporations already dominated the European market, holding approximately three-quarters of the export market. Despite the relatively tiny share the Caribbean and African markets had, their sales were given preferential treatment due to various tariffs and quotas given to them by their European masters. This of course, was unfair.

Unfair Trade. It needed to be stamped out, so thought the large US corporates, and they began an unprecedented legal battle with the EU over the Banana trade. After 20 years, one of the longest running trade wars to date,  the WTO ruled in favour of US interests, which has resulted in cheaper prices for the consumer, greater profits for the US multinationals, and further misery for the plantation nations of the Caribbean and Africa that depend so heavily on these trade revenues.

In a nutshell, here you have another insight into imperialism, its link to modern trade, to modern poverty and the under development and neo-enslavement of the third world across recent centuries, all in the name of freedom….

Some argue that the dispute threatens the whole future of free trade. “Free trade” has always been a delicate state of affairs negotiated between nations. It has often been an exercise in trading concessions – one nation opens up this market in return for another opening up that market.

 

Continuing my exploration of the origins of poverty and its changing form throughout Man’s history, a friend once asked me, “Were the Aborigonies of Australia considered poor before their colonisation?” The same question can be asked of many people across the third world at a point in time. It raises the issue of what we consider to be poverty today, and how this is relative to the general social conditions in place now and in the past .

Is the lack food, clothing, and shelter the only basic determinants of poverty, can we look at certain tribal or native peoples who choose a way of life and class them as impoverished due to their relative material-less lives?

That aside, when we consider the desperate state of some populations which can genuinely be classed as needy, we must also think about how their current condition of existence came about. In a number of cases, these were unjustly inflicted upon them. Identifying these such cases will assist us to appreciate their predicament and understand the nature of the process which dealt them this hand. By understanding this, we can also raise the case, quite rightly for repatriations, a concept that European civilisation knows all too well for it has become their modus operandi.

Let us first concentrate on the region now classified as Bangladesh. Dr Nazeer Ahmed states;

The province had a population of 25 million; about four times the population of England at that time. The Ganges delta provided abundant rice, fish and jute. The province was bustling with manufacturing activity. The fine muslin cloth of Murshidabad was sought after the world over. Bengal also produced the finest steel, using iron ores imported from Tanzania in Africa.

Within a span of ten years after its capture by the British, Bengal, once the richest province in Asia, became destitute. To understand how it happened, one must examine the broader political developments in South Asia in the early part of the 18th century.

Ahmed goes on to explain the following contributing factors which destroyed the prosperity this wealthy land possesd;

What Robert Clive started, his successor, Warren Hastings completed. With the instincts of a cold, ruthless extortionist, Hastings used every administrative trick in his bag to extract the last ounce of gold from Hindus and Muslims alike. He imposed hefty taxes on Indian manufactures while flooding the Indian market with cheap cotton goods manufactured in Lancashire. He waged war on the Afghans of Rohilkhand, pillaging the northern territories as he went. He starved the Begums (princesses) of Oudh and tortured their servants using another traitor Asif ud Dawlah as his tool, until the Begums surrendered more than a million pounds in state jewels. Within a span of ten years, Bengal was on its knees. What was once the richest province of Asia was now broke. Famine set in in1765 and the streets of Calcutta were littered with corpses.

…The transfer of this immense treasure from Bengal made possible the Industrial Revolution in Europe

The Indian sub-continent was always known as the jewel in Britain’s crown. It should be a point to research what some observers thought of the condition of this land before the onset of imperialism, however using just Ahmed’s findings for this piece, we can note how rich the booty was from the conquest of this region, giving a whole new meaning to the term ‘jewel in the crown’. A case in point was the treatment of Tippu Sultans possessions after his defeat, which demonstrates one of the numerous examples of how European conquering armies took looting to an entirely new level;

 Throughout the night of May 5th, they indulged in an orgy of slaughter, looting and fire, which continued well into the following day. Every single house in the island city was plundered. Turbans, daggers, jewellery, furniture, anything of value-and sometimes of no value-was taken. The Sultan’s palace was ransacked, and everything in it was looted, down to the linen on Tippu’s bed. The throne of Mysore was broken up and melted down for its gold. The famous huma bird, studded with diamonds and rubies that had adorned the throne was claimed by one of the colonels. The total amount of loot that day exceeded 2 million English pounds, which was more than twice what was extracted by the British from the Begums of Oudh in 1764. This amount would be equal to 2 billion US dollars at today’s market prices. Untold amounts of jewels were stolen. The booty was divided up among the troops, with the British officers often shamelessly disagreeing among themselves about their portion of the loot. As time went on, the remnants of the Sultan’s treasures were dispersed. There is hardly an old army barrack in the British Isles today that does not boast a piece of booty from Tippu’s capital.

You may even find some of these treasures in a UK museum.  My thoughts also fill with accounts of the mass transport of Latin American gold and silver to the home of the Spanish conquistadors in the 16th century, ultimately ruining the economy due to its abundance and its wastage.

Once more India is at the forefront of global economic growth, however it has had to make up for lost time, during which Europe and later the USA, were able to kick start their engines of growth to dominate the world.

And what of this potential wealth of a resource rich region such as Africa, raped for centuries by Europeans?

It follows that in this post-colonial global system, poverty has not been a natural occurrence. Wealth was taken from millions by a number of means outlined above, masses were kept dependant so they could be controlled and prevented from competing with foreign powers that sought total dominance. This suppression continues today, consider this method referring back to the implementation of global credit and how the bankers have ended up being the invading armies of the modern era. This is an example from the 19th century and the gradual break up of the Ottoman Empire;

Economic penetration was the means for British entry into Egypt, as it was for the French occupation of Tunisia. The Khedives of Egypt, Sait and Ismail, had contracted huge loans at enormous discounts, first to build the Suez Canal, then to support their own lavish life styles. By 1875, the debt had increased to 100 million British pounds and it required more than two thirds of all Egyptian revenues to keep the debts serviced. The financial condition of Egypt was thus a mirror image of that of the Ottoman Empire. When the Egyptians defaulted in their debt payments, the European powers formed the Egyptian Debt Commission with the authority to confiscate specific revenues. To ensure compliance, the powers imposed an Armenian nationalist as the prime minister of Egypt, while an Englishman became the finance minister and a Frenchmen, the minister of public works. The stipulations of the Egyptian Debt Commission meant the effective surrender of Egyptian sovereignty to the Europeans, which caused a public uproar…..

Add to this the predicament of Third World Debt, or even first world debt; un-payable amounts which can never be repaid yet these monthly payments are still demanded and continue to double and multiply, more being spent on debt servicing than the service of people.

Poverty serves a purpose. The abject suffering of too much of humanity has been enforced and is being maintained. The argument that capitalism is the best solution for it, disregards the truth that free markets and liberalism are merely tools of tyranny which are not available for all to explore in the first place, moreover, as the history documented in this piece shows, blood was split first by the very powers which we now see as embodying capitalism; it was never meant to be a solution, it was always a members only benefit with rules leading to a form of oppression not freedom.

 

Further reading of Dr Nazeer Ahmed’s insightful history of the Islamic world, and all related developments, brought me to the following piece which touched upon the establishment of the global system of credit, which nowadays drives the global market for capitalism/trade.

I have used the below extract as an example of the underlying motive for creating this sub-system of global dominance, which also shows the nature and purpose of its exploits and manipulation.

Please read for yourselves;

The rise in the power of commercial banks in the 18th century was directly related to the Industrial Revolution in England. It was a convergence of several historical events that transformed England from a mercantile society to an industrial society and finally led to the triumph of the bankers. The arrival of fresh capital from Calcutta and Oudh (1757-1767) enhanced the substantial wealth that was flowing in from the Atlantic slave trade, and enabled the funding of innovative ideas. Inventions need capital to see the light of day. Without it, they wither and die. The first thrust of British innovation was the replacement of cotton goods from India. The spinning jenny went through rapid modifications and was “perfected” in 1767 by Hargraves. The colonization of Bengal provided a large captive market of thirty million consumers. The British East India Company slopped on a hefty 70% duty on Indian made goods while opening the floodgates to imports from England

I also make a connection to the previous post in Ahmed’s compilation;

The loot from Bengal heralded the onset of the capitalist society. Industrialization further consolidated the accumulation of capital. With the wealth of Bengal at their command, the British successfully fought off Tippu Sultan of Mysore (1770-1799) and subdued India. With the resources of the great subcontinent of India at its command, European colonization of Asia and Africa in the 19th century was only a footnote 

Using these two articles in another post, I intend to explore another vital factor which led to the state of global poverty as it exists today.

However the first quote comes from an entry in which Ahmed further enlightens us with the development of the modern usurious system at the time of the onset of colonialism. It gives an overview of the entire history of money, a subject well covered already, however the author does a brilliant job of contextualising this history with that of imperialism and the modern world.

This links European colonialism with the development of paper money and the rise of the nation state, it is therefore highly recommended to read this in full, selected extracts however appear below;

Islam maintains that usury is debilitating to civilization. It saps the strength of individuals and nations, encourages greed, and discourages trade. It works in the direction of economic centralization, makes the rich richer and the poor poorer, creates instability in the society and ultimately destroys it. (“Those who devour usury will not stand except as stands one whom Satan by his touch has driven to madness”, Qur’an, 2:275-276)….

The issue transcends the Islamic world, and affects it only because it is now a part of a global community of poorer nations. Whether it is coffee, coconut, spices or oil, the international banks have a major influence on the economic sinews of the world. Interest payments are a major factor in the enormous flow of capital from the poorer countries of the world to the richer nations….

From times immemorial, the merchant had depended for his protection on the soldier. After the Battle of Plassey, the tables turned and the soldier was to be a servant of the merchant and his hired hand. Civilizational initiative passed from the soldier to the merchant….

Monetary policy passed on to the bankers who could either fuel an expansion by increasing the supply of money and easing credit, or cause a contraction by withholding credit. This was a fundamental paradigm shift. From times immemorial, one of the essential privileges of a sovereign soldier-king was his authority to mint coins. This privilege now passed on to the bankers, although they printed money in the name of their sovereign….

….The merchant makes his money when the value of his goods relative to the money he has borrowed goes up over time. The usurer, on the other hand, makes his money when the value of the credit he has advanced goes up in relation to the goods that are held in mortgage. Thus it is in the usurer’s interest to ensure that your property is worth less tomorrow than it is today so that he can get more of it when payment is due.

For more than a century, until 1972, when the United States abandoned the gold standard, those who controlled the gold, controlled the monetary veins of the world….

Major contractions in the British economy were recorded in 1815, 1825, 1847, 1857, 1866, 1893 and 1929. The last one caused a global depression and was a contributory cause for the Second World War.

The disengagement of the world monetary system from the gold standard did not change the fundamental relationship between creditor and debtor. Whether the standard is gold, the American dollar, the British Pound or the Japanese Yen, the process remains unchanged. Credit, with interest, works to the advantage of the lender in favor of economic centralization…

Bereft of capital, the emerging countries of the world turned to international bankers for loans after the Second World War. The credit system increased the span of control of the international bankers over the entire globe. New mechanisms of international credit were created through the World Bank and the International Monetary Fund. Loans were offered against the natural wealth of the borrower nations (commodities such coffee, jute, oil, bananas, spices) as collateral…

To continue debt financing, the bankers often force the poorer nations to devalue their currencies and accept international oversight of their economies. The cycle continues…