There is a long tradition of Marxist thinking emphasising the profound impact the 1492 ‘discoveries’ had on the development and consolidation of capitalism as a world system.134 Yet today, the hegemonic Brennerite approach to the origins of capitalism emphasising the internal, agrarian sources of its genesis explicitly sidelines the contribution of the ‘periphery’. Noting some Marxists’
emphasis on the importance of the wealth amassed from the New World, Ellen Meiksins Wood writes that ‘we cannot go very far in explaining the rise of capi-talism by invoking the contribution of imperialism to “primitive accumulation”
or, indeed, by attributing to it any decisive role in the origin of capitalism’.135 As reasons, she cites the relatively late start of British colonisation and Spain’s failure to develop in a capitalist direction.
The immediate effects of the New World colonies on the Spanish Habsburg Empire were indeed to further entrench the feudal monarchy while arresting economic development in the region.136 Yet there were also significant knock-on effects that worked to hasten the rise of Dutch capitalism. While colonial surpluses were able to (partly) finance the Habsburg military expeditions across Europe,137 ‘the influx of bullion from the New World also produced a parasitism that increasingly sapped and halted domestic manufacturers’.138 This led to a virtual deindustrialisation of the Castilian economy as the home market collapsed, with American silver raising production costs and an ascendant Dutch manu-facturing sector penetrating the Castilian textile market.139 This meant Philip II’s imperial projects could only be sustained through ‘reckless borrowing’.140 Despite – or perhaps because of – the vast imports of New World silver, fiscal-mil-itary pressures bankrupted the Spanish monarchy eight times by the end of the 17th century.141 And as Genoese bankers held Spain’s public debt, they came to
‘reorient their “surplus capital” from the American trade towards the bond market, thereby opening the door for Dutch capital. The rise of the United Provinces and the decline of Spain were therefore intimately connected’.142 What is more, the inflow of silver may have accelerated the decline of Spanish military power by encouraging attempts to conduct what proved to be an unsustainable two-front war against the Ottomans in the Mediterranean and the Dutch to the north. For as William McNeil notes, ‘it was the swelling flow of New World silver after the 1550s that made Philip [II] think he could conduct war both in the Mediterranean against the Turks and in the north against the Dutch’.143
From the perspective of the longue durée, these ‘penalties of priority’ beset-ting Spain’s development in the early modern age go some way in explaining the country’s relative ‘backwardness’ in the later modern epoch.144 Here again we see how the socio-economic and strategic benefits afforded to earlier devel-opers would at a later point in their development turn into strategic liabilities, as less-developed societies came to reap the ‘privileges of backwardness’. In particular, the plundering of the Americas functioned as a means of ‘primi-tive accumulation’ on a Europe-wide basis which overwhelmingly benefited two latecomers, Holland and England, at the expense of the more (feudally) advanced colonising powers, Spain and Portugal.
Indeed, throughout the 16th and 17th centuries, Spain and Portugal acted as conduits for the transfer of much of the American bullion into the coffers of financiers in Antwerp, Amsterdam, London, Paris and Genoa. New World silver thereby further aided the structural geopolitical space opened to Northwestern Europe (again, notably the Dutch and English), and its capitalist development (see Chapters 3 and 4). Thus, the overall material benefits to Europe from the overseas discoveries, P. K. O’Brien writes, ‘accrued disproportionately to two latecomers and free riders – the Netherlands and Britain’.145 Further, as Roland Findlay notes, ‘the two East India Companies used the American treasure to balance their imports of Indonesian pepper, clove and nutmeg, Indian cotton textiles and Chinese silk and porcelain for profitable re-export to consumers in Europe’.146 This was a particularly important development aiding the multi-lateral trade flows that would come to interconnect Western Europe with the highly lucrative East Asian trades through the enforced plundering of the Americas (see Figure 5.2).
Why the Dutch, rather than English, became the first leading force in the subsequent development of the world market during the Long 16th Century is also explained by the country’s close ties to the Spanish-American trading system. This afforded Holland greater access to Spanish wealth than England, and this wealth was subsequently redeployed to drive its own commercial and financial operations.147 It is perhaps no coincidence that almost half of the gold and silver acquired by Spain ended up in Holland,148 Marx’s ‘model capitalist nation of the seventeenth century’, and the first state to experience a bourgeois revolution (see Chapter 6).149 Indeed, for a time the Netherlands acted as a
‘distribution center from which American silver passed to Germany, Northern Europe, and the British Isles’, which ‘was crucial to European economic activity’.150 And even after the Netherlands’ break with the Habsburg monarchy, the Spanish still allowed Amsterdam considerable access to American silver.151 Thus the Netherlands’ economic ascendancy was built, at least in part, on American bullion.152
The immense quantities of bullion from Spanish America were also crucial in kick-starting the Netherlands’ Europe–Asia trade.153 This point was noted in
Figure 5.2 The ‘triangular trade’ of the 1600–1700s
the often quoted description of Dutch trade in 1619 by then VOC director Jan Pieterszoon Coen:
Piece goods from Gujarat we can barter for pepper and gold on the coast of Sumatra; rials [silver currency] and cottons from the coast [of Coromandel] for pepper in Bantam; sandalwood, pepper and rials we can barter for Chinese goods and Chinese gold; we can extract silver from Japan with Chinese goods; piece goods from the Coromandel coast in exchange for spices, other goods and gold from China; piece goods from Surat for spices; other goods and rials from Arabia for spices and various other trifles – one thing leads to another. And all of it can be done without any money from the Netherlands and with ships alone. We have the most important spices already. What is missing then? Nothing else but ships and a little water to prime the pump. (By this I mean sufficient means [money] so that the rich Asian trade may be established.) Hence, gentlemen and good admin-istrators, there is nothing to prevent the Company from acquiring the richest trade in the world.154
In the first instance, the bullion confiscated in the Americas lubricated the circuits of capital accumulation in Europe as a whole, providing the liquid specie for Europe’s vibrant trade with ‘the East’. By 1650, the estimated flow of precious metals from the Americas reaching Europe amounted to at least 180 tons of gold and 17,000 tons of silver. Between 1561 and 1580, about 85 per cent of the entire world’s production of silver came from the Americas. This provided the capital for European merchants’ profitable trade with Asia and East Africa in textiles and spices.155 It also assisted European states in obtaining raw materials and primary products from areas (particularly China and India) which would otherwise have had little incentive to trade with the Europeans on such a scale.156 Indeed, it was the enormous demand for silver coming from China that allowed the mines in t he New World to operate so profitably.157 There was, then, a clear connection between American treasure and the expansion of the extremely lucrative East India trade. Holland, England, Portugal and France were only able to finance their trade with Asia because of the vast streams of precious metals coming from Mexico and Peru.158 This enabled the relatively ‘backward’ European merchants to tap into Asian markets and eventually monopolise them, creating conditions under which ‘the West’
would displace, subordinate and subsequently dominate ‘the East’ in their own trading arena (see Chapter 7).159 The re-export of Asian colonial goods in turn contributed to developing markets in Europe, the Americas and Africa. Hence, a world market directed in the interests of the European ruling classes was ulti-mately funded by plundered ‘New World’ precious metals.160 One recent study has gone so far as to conclude that ‘the differential growth of Western Europe’
over the 16th to early 19th centuries ‘is almost entirely accounted for by the growth of nations with access to the Atlantic Ocean’, including, notably, those
‘nations most directly involved in trade and colonialism in the New World and Asia’.161
In fine, the socio-economic effects of the Atlantic vector of uneven and combined development on European geopolitics spread vast and wide. Locking Spanish development in place, the American colonies monetarily facilitated Madrid’s engagement in a classic bout of imperial overstretch, precipitating the monarchy’s decline as a great power. In turn, the fiscal adjustments of the Spanish state created the geopolitical and economic space for Europe’s two latecomers, England and Holland, to reap the ‘privileges of backwardness’
assisting their ‘rise’ to global supremacy. The only way to explain the varie-gated developmental trajectories of the Spanish vis-à-vis the Dutch and later English is by recognising the various means through which the New World specie and plundered resources from the Americas fed into and gave a much needed boost to emergent processes of capitalist development in the Nether-lands and England, while locking in an already existing feudalism in Spain. The uneven and combined development of the Western and European hemispheres therefore conditioned and reconstituted patterns of differentiated develop-ment within Europe itself, enabling the incipient rise of Northwestern Europe as the ‘organic heartland’ of capitalist development. This intersocietal, ‘extra- European’ context through which European capitalism developed was its critical precondition.