Paul Bairoch on the Industrial Revolution, the Third World and Imperialism in World History

To continue from my post here, Paul Bairoch’s book Economics and World History: Myths and Paradoxes (New York and London, 1993) further analyses Western colonialism, the industrial revolution, and non-Western versus Western imperialism.

Did British imperialism from the 15th to the early 19th century play a major – or indeed necessary – role in triggering the British industrial revolution?

The fact is that, economically speaking, the British empire was not very big in the early modern period and even late as 1700–1750 was not large (Bairoch 1993: 80; see also Harley 2004: 196).

Its North American territories (the most important part) only became large after the Treaty of Paris in 1763 by which Britain obtained Canada and Louisiana (Bairoch 1993: 81). But then Britain lost its Thirteen Colonies in North America to rebellion in 1776 and formally in 1783.

Even in India, the really great expansion of British territorial gains happened from the 1780s (Bairoch 1993: 81).

The Spanish and Portuguese had richer, larger colonial empires than Britain did, but why didn’t the Spanish and Portuguese undergo an industrial revolution? As late as the 1700s, the Spanish and Portuguese empires even had an export trade five to seven times larger than that of Britain’s empire (Bairoch 1993: 82).

Clearly, the possession of a colonial empire was not a sufficient condition for industrialisation, and, as we will see below, nor was it a necessary condition of the British industrial revolution. Rather, as Bairoch argues, the European conquest of the world occurred more as a consequence of the superior technology and wealth of Europeans (and power politics) which was in turn a result of industrialisation, not a condition for it (Bairoch 1993: 82, 85–86).

The British industrial revolution had its origins in the agricultural revolution of 1680–1700 which accelerated from 1720–1760 and resulted in a large grain surplus even by the 1730s (Bairoch 1993: 80). But that arose from internal progress in the yields of crops and agricultural productivity (Bairoch 1993: 80), not imperial conquests. Many of the necessary technological innovations existed by 1750, but these had nothing to do with British imperialism.

Did non-European markets in the colonies provide a necessary condition for the British industrial revolution? Once again, Bairoch argues cogently that they did not.

The role of colonial trade in spurring industry in England seems very minor. In the 18th century as the first phase of the industrial revolution gathered pace, the total export sector of the UK accounted for between 4–8% of Britain’s GDP, and of this only 33–39% of exports were bound for the Third World. So, crucially, only 2–3% of total output was exported to the Third World (Bairoch 1993: 82).

Even in individual sectors where the importance of exports to the Third World was somewhat higher such as textiles and iron, the contribution of this colonial or Third world demand was not decisive for industrial development (Bairoch 1993: 84).

Now there was one sector in the 19th century in Britain which was oriented largely towards colonial markets: the cotton textile industry (Bairoch 1993: 84–85). The revolution in British textile production was accomplished by technological innovations and use of steam power, all made possible behind high tariff barriers to keep out Indian cotton products.

By 1819/1821 cotton textile exports accounted for about 53% of production and a significant proportion of these went to colonies and the Third World (Bairoch 1993: 85). But this was only one industry amongst many in the industrial revolution, and even if colonial trade markets had been unavailable the sector would still have developed but just at a lower level of production.

Although Bairoch does not directly raise the issue, we can also address the questions: were the profits the British made from the trans-Atlantic slave trade and the slave-based production of sugar in the Caribbean necessary for industrialisation? Did they play a fundamental role in capital formation in Britain as a pre-requisite of industrial investment?

Unfortunately for that view, the reality is that the actual capital costs of the investment needed for the industrial revolution were not large at all compared to Britain’s GDP or the incomes of property owners (Harley 2004: 197). The profits from slavery barely rose from 1% of national income in the late 17th century to 1.5% by 1770, and – even if this had been totally eliminated – there were vast amounts of money capital awash in the British economy in the 1700s which could have been used to finance industrial investment (Harley 2004: 197). Moreover, the British financial sector was becoming increasing sophisticated anyway with a role for endogenous creation of credit money leveraged on a commodity money base, Bank of England notes, and the notes of the most credible private banks, so one must guard against simplistic views of the monetary and banking system often assumed in modern literature.

The contribution of the actual slave trade itself to Britain’s economy was trivial, and a significant volume of the trade occurred after the industrial take-off anyway (Eltis and Engerman 2000: 129). Moreover, the Spanish and Portuguese earned far more from the slave trade than the UK did in terms of a percentage of national income, but in neither case did profits from slavery lead to industrialisation in Spain or Portugal (Eltis and Engerman 2000: 131).

Finally, the profits earned from slave-based production of sugar in the Caribbean were not necessary for industrial take-off, nor was sugar some necessary factor input for early industrial production (Eltis and Engerman 2000: 134–135).

But to return to Bairoch’s analysis, what Bairoch does accept – as any sensible economic historian does – is that many colonies in the course of the 19th century could not implement tariff barriers to cheaper European goods, so that there was a process of de-industrialisation in much of the Third World (India being a notable example) (Bairoch 1993: 88–89). But these trends clearly occurred after the industrial take-off in Britain: this de-industrialisation was simply not a necessary condition for the first phase of the industrial revolution nor for the continuing development of it in the 19th century.

In short, if the imperialism and colonial empires had not existed, then all that would have happened is that British per capita GDP in the course of the 19th century would have been slighter lower: the industrial revolution would still have occurred and per capita GDP still have soared. The industrial revolution would not have been stopped.

Finally, in some very interesting analysis not often commented on, Bairoch analyses Western imperialism: was it unique?

As Bairoch notes, the non-Western world also has a long and horrific history of slavery, imperialism and colonialism. There is an almost pathologically dishonest unwillingness to recognise that what the West did from 1500 to c. 1950 (in the period of its direct imperialism) was in essence what non-Western empire after empire has done through the ages.

We can run through the list of imperialist powers in history that provide direct precedents for what the West did in its period of supremacy:

(1) the Achaemenid Persian empire (from the 6th to 4th centuries BC), which conquered a vast territory from Egypt, all of the Middle east to central Asia.

(2) successive dynasties of the Chinese empire, which conquered and ruled vast numbers of non-Chinese people in central Asia, and for over 2000 years exercised an indirect imperial power over Korea, Japan and parts of South Asia.

(3) the Arab empire from the 7th to 12th centuries AD and their Turkish successors the Seljuks, which conquered the Middle east, Iran, central Asia, parts of India, north Africa, and Spain.

(4) the Mongol empire, which conquered vast territories from China to the Middle East and southern Russia, in the process committing mass murder on a scale which in per capita terms may be unmatched in human history.

(5) the Ottoman empire from the 15th to the 20th century, a highly aggressive empire which conquered the Byzantine empire, much of the Middle East, North Africa, the Balkans, Hungary, and the Crimea.

As Bairoch notes:

“The fact that all these empires did not expand beyond a certain size is not attributable to a lack of colonial appetite but to the military and economic constraints of that period, which set limits on the extent of the largest empire … . But this does not imply that the non-European colonial empires were small, especially in relative terms.” (Bairoch 1993: 145).

If the Mongols had had access to the military technology of 19th century Europeans, they would easily have conquered the whole planet and in the process committed genocides undreamt of in human history.

What about the European slave trade? The slave trade in Africans conducted by Westerners lasted for about three centuries from the early 1500s to about 1870 and it is estimated that there were about 11–11.5 million victims (Bairoch 1993: 146). This was a horrific crime, and no rational person would deny it.

But this was not as brutal as the Arab slave trade in black Africans, as Bairoch notes:

“Compared to the European slave trade, that conducted by the Islamic world started earlier, lasted longer and, crucially, involved a larger number of slaves. It began in the seventh century and lasted to the end of the nineteenth. For this whole period, the transport of people from sub-Saharan Africa to the Muslim world totalled 14–15 million, of which some 8–8.5 million were from 1500 to 1890. ….

There are now fewer descendants of slaves in the Islamic world than in Christian America. This is due to the fact that a great number destined for the Islamic world were castrated. Furthermore, their mortality was high and their birth rate low. In fact, the ‘visible’ descendants of those slaves can be estimated at only a few million in the Middle East (including North Africa), whereas in America their number is approximately 70 million.” (Bairoch 1993: 147).

The mass castration of black African slaves (often boys) in the Arab slave trade was particularly brutal and increased the death toll because the operation was very dangerous. African slaves were also subject to forced death marches across the Sahara desert on their way to slave markets and horrific conditions in slave ships bound for the Middle East and India.

For instance, the transportation of African slaves to the Arab state of Zanzibar on ships was described by the British abolitionist Sir Thomas Fowell Buxton in 1840:

“Captain Moresby, to whom I have already alluded, described to me the passage coastways, in the following terms:— ‘The Arab dows, or vessels, are large, unwieldy, open boats, without a deck. In these vessels temporary platforms of bamboos are erected, leaving a narrow passage in the centre. The negroes are then stowed, in the literal sense of the word, in bulk; the first along the floor of the vessel, two adults, side by side, with a boy or girl resting between or on them, until the tier is complete. Over them the first platform is laid, supported an inch or two clear of their bodies, when a second tier is stowed, and so on until they reach the gunwale of the vessel.

‘The voyage, they expect, will not exceed twenty-four or forty-eight hours: it often happens that a calm, or unexpected land-breeze, delays their progress: in this case a few hours are sufficient to decide the fate of the cargo; those of the lower portion of the cargo, that die, cannot be removed. They remain until the upper part are dead, and thrown over, and, from a cargo of from 200 to 400 stowed in this way, it has been known that not a dozen, at the expiration of ten days, have reached Zanzebar. On the arrival of the vessels at Zanzebar the cargo are landed; those that can walk up the beach are arranged for the inspection of the Imaum’s officer, and the payment of duties—those that are weak or maimed by the voyage are left for the coming tide to relieve their miseries. An examination then takes place, which for brutality has never been exceeded in Smithfield.’” (Buxton 1840: 165–166).

In addition, the medieval Middle East slave trade also involved the exploitation of many black Africans used in economic slavery in south Iraq and also in Africa (e.g., in the state of Zanzibar).

It is also now largely forgotten that European themselves were for many centuries the victims of this slave trade conducted from the Middle East and north Africa from the 700s AD down to the 1800s and the number of victims probably numbered more than 2.5 million (see Davis 2004).

And who was it who ended the slave trade? As Bairoch notes, it was the British empire and European interventions which largely stamped out slavery on our planet (Bairoch 1993: 147).

All in all, Bairoch has demonstrated that:

(1) colonial exploitation was not a necessary precondition for the British industrial revolution, and

(2) Western imperialism has by no means been unique.

BIBLIOGRAPHY
Bairoch, Paul. 1993. Economics and World History: Myths and Paradoxes. Harvester Wheatsheaf, New York and London.

Davis, Robert C. 2004. Christian Slaves, Muslim Masters: White Slavery in the Mediterranean, the Barbary Coast, and Italy, 1500–1800. Palgrave Macmillan, Basingstoke, UK and New York.

Eltis, David and Stanley L. Engerman. 2000. “The Importance of Slavery and the Slave Trade to Industrializing Britain,” The Journal of Economic History 60.1: 123–144.

Harley, C. Knick, 2004. “Trade: Discovery, Mercantilism and Technology,” in Roderick Floud and Paul Johnson (eds.), The Cambridge Economic History of Modern Britain. Volume 1: Industrialisation, 1700–1860. Cambridge University Press, Cambridge. 175–203.

Paul Bairoch on the Industrial Revolution, Imperialism and Capitalism

The economic historian Paul Bairoch (1930–1999) subjected some Marxist myths about Western capitalism and imperialism to critical scrutiny in his now classic book Economics and World History: Myths and Paradoxes (New York and London, 1993).

First, was the Western industrial revolution dependent on energy from the Third World?

Bairoch (1993: 59) notes that right up until the post-WWII era the West was almost completely self-sufficient in energy, and as late as the 1930s much of the developed world had an export surplus in products used to create energy, such as coal (Bairoch 1993: 59). The energy-dependence of the First World on the Third World arose after WWII long after the industrial revolution, so one cannot claim that energy imports by imperialism were a necessary condition for the West’s industrialisation.

Production and use of oil as a source of energy for Western industrial civilisation only really began in the late 19th century, but it remained a tiny percentage of total energy consumption right up until WWI, and even here the West was mostly self-sufficient (Bairoch 1993: 61–62). An often forgotten fact is that US consumption of energy petroleum only rose above domestic production in 1957 (Bairoch 1993: 61), so that industrialisation in the US was not dependent on imports of oil.

What about iron ore? Iron ore was crucial for Western industry, since as late as 1910 iron ore represented 95% of all metal production (Bairoch 1993: 63). However, the West was almost wholly self-sufficient in iron ore too: most production occurred in Europe where in around 1914 Europe produced 28 million of the 32 million tons in global production (Bairoch 1993: 63). In 1914, the West only depended for 2% of its total metal ore consumption on Third World production – an extraordinarily low figure which means that 98% of metal ores were produced domestically (Bairoch 1993: 65).

In production of glass, cement, paper and clay products the West was almost completely independent and not reliant on imports (Bairoch 1993: 68).

Even in raw materials that were imported from the Third World, we can note that textile fibres were mostly produced domestically in Western countries and imports from the Third World only accounted for about 22% of domestic consumption as late as the 1909–1913 (Bairoch 1993: 67).

Bairoch (1993: 68) estimates that in terms of value the West was about 94–96% self-sufficient even in raw materials around 1913.

Of the raw materials that did need to be imported from the Third World such as rubber, fertilisers, and phosphates, their total value in relation to Western exports was not large, and could easily have been obtained by international trade and paid for through export earnings: there was simply no economic need for imperialist conquest of the Third World to obtain these goods.

Bairoch’s conclusion is very important:

“… if in fact from 1955 onwards the large dependence on raw materials from the Third World was a reality, before that period it was a complete myth. The developed countries were thus able to reach a very high level of industrialization on the basis of local raw materials and also on the exploitation of their local workforces …. .” (Bairoch 1993: 70).

In other words, the vulgar Marxist explanation of Western imperialism as motivated largely or ultimately by an evil capitalist need to plunder the Third World and steal raw materials and energy necessary for industrialisation is a myth.

Now what about the Marxist and Leninist thesis that Western imperialism – especially after the 1880s – was driven by the need to find new markets for Western manufactured commodities and that this was the primary economic cause of imperialism? This was the famous thesis of Lenin’s Imperialism, the Highest Stage of Capitalism (1982 [1917]).

Once again, Bairoch demonstrates that this is a myth. Of total exports from the West from 1900 to 1938, Bairoch estimates that about 17% of exports were sent to the Third World and only 9% to actual Western colonial territories (Bairoch 1993: 72).

And – even more catastrophically for Marxist ideology – the export sector accounted for only about 8–9% of GNP of most developed nations, and total exports to the Third World were as low as 1.3 to 1.7% of the total volume of production. Exports to actual Western colonial territories accounted for as little as 0.6 to 0.9% of the total volume of production (Bairoch 1993: 73).

Throughout the 19th century, for example, the United States only exported about 0.5–0.9% of its total GNP to the Third World (Bairoch 1993: 73).

Even Great Britain – the colonialist superpower of the 19th century – exported only about 4–6% of its total production (Bairoch 1993: 73), and not all of that to its colonies, a figure which remains a low percentage. At most, Bairoch notes, exports to the Third World might have helped certain given UK sectors for limited periods of time (such as textiles), but this hardly vindicates Marxism, since it does not follow at all that this was a necessary condition for the British industrial revolution nor that British imperialism had a fundamental and underlying economic motive.

Did Western manufacturing need a captive Third World market from imperialism? The evidence shows that it did not. For a period where the data is very good, Bairoch estimates that from 1899–1938 manufacturing exports to the Third world accounted for about 5–8% of total Western manufacturing production (Bairoch 1993: 74): but this was a marginal outlet compared with domestic markets.

Even for the 19th century as a whole, Bairoch’s research suggests that perhaps on average 10% of Western manufacturing output was exported to the Third World (Bairoch 1993: 74).

Now it is true that free trade policies imposed on the Third World in the 19th century caused de-industrialisation in a number of countries, but none of this was necessary for Western capitalist development:

“… the damage caused to Third World industries by colonialism through the influx of manufactures did not in fact have a correspondingly large positive effect on the developed countries. Taken as a whole, access to Third World markets was no more than a small stimulus to the developed countries’ industries.” (Bairoch 1993: 74).

So in reality the industrial revolution and economic development of the West right up until the mid-20th century did not require as a necessary condition Western imperialism.

Without empires, the West would still have industrialised and its per capita wealth would still have spectacularly soared above the rest of the world: the miracle of capitalism would still have happened. At most, real capita GDP would have been slightly lower, but not by much.

BIBLIOGRAPHY
Lenin, Vladimir Il’ich. 1982. Imperialism, the Highest Stage of Capitalism. Progress, Moscow.

Bairoch, Paul. 1993. Economics and World History: Myths and Paradoxes. Harvester Wheatsheaf, New York and London.

Capitalists and Imperialism

The relationship is a favourite of Marxists and even other leftists, and the usual line is: capitalism is inherently imperialistic.

But is it? There are different forms of capitalism, and, above all, laissez faire ideology is not monolithic, and it comes in different forms.

And it’s rather obvious that some of the most vehement capitalist ideologues are also the most vehemently anti-imperialist. Just think of Murray Rothbard or Ron Paul.

For instance, just take Ron Paul’s comments in the videos below.





Libertarians hate government and have historically been vehemently critical of imperialist aggression even by capitalist states. And Murray Rothbard’s view of American foreign policy, for example, had obvious similarities to that of Noam Chomsky.

If one takes the libertarian ideology seriously, then it does indeed have strong anti-war and anti-imperialist aspects, as can be seen, for example, on the popular website Antiwar.com, which is run by American libertarians. But it is also the most extreme laissez faire and pro-capitalist ideology too.

Marxists and others barely recognise this, and instead reduce laissez faire ideology to a monolithic caricature.

Nor is the anti-war and anti-imperialist stance unique to modern libertarians. Classical liberalism – which was also strongly laissez faire – also had its anti-imperialist wing, and so much so that it even annoyed Karl Marx who was dismayed to find that the British Manchester school’s view of war and imperialism was opposed to Marx’s own cult-like views on capitalism.

The most famous instance of this was the Crimean war of October 1853 to February 1856. Marx was vehemently pro-war because of his anti-Russian phobia and urged even more aggressive action against Russia than Britain and France actually took (Sperber 2014: 304). But what really made Marx apoplectic and drove him mad was that John Bright (1811–1889) and Richard Cobden (1804–1865), the most popular and vocal advocates of laissez faire and free trade in England, were hostile opponents of the Crimean war (Sperber 2014: 305).

At one point during the Crimean war, Marx launched into an astonishing rant about the anti-war capitalists:

“One thing must be evident at least, that it is the stockjobbers, and the peacemongering bourgeoisie, represented in the Government by the oligarchy, who surrender Europe to Russia, and that in order to resist the encroachments of the Czar, we must, above all, overthrow the inglorious Empire of those mean, cringing, and infamous adorers of the golden calf.” (Marx 1897 [1853]: 132).

Wait a minute, Marx was ranting about... those wicked “peacemongering bourgeoisie”? According to Marx, those vile peace-loving, peacenik capitalists of Europe had to be overthrown so that a communist Europe was free to wage total war against Tsarist Russia.

A final issue is simply this: the Communist world of the 20th century was also guilty of its own form of imperialism. The Soviet Union, for example, was just a continuation of the multi-ethnic Russian empire, which had conquered vast swathes of the non-European world in central and northeast Asia, the Caucasus, Central Asia and Eastern Europe. The Soviets continued to rule these areas as the new imperial overlords, and in ways so vicious and brutal that they made 19th century European empires look mild. And this is before we get to Stalin’s takeover of Eastern Europe or the Soviet Union’s invasion of Afghanistan.

The truth is that whenever great powers arise in the world – whether capitalist or communist – they will almost inevitably be drawn into some form of hard or soft imperialism on the world stage. That is a reality.

BIBLIOGRAPHY
Marx, Karl. 1897. The Eastern Question. A Reprint of Letters Written 1853–1856 Dealing with the Events of the Crimean War (eds. Eleanor Marx Aveling and Edward Aveling). S. Sonnenschein & Co., London.

Sperber, Jonathan. 2014. Karl Marx: A Nineteenth-Century Life. Liveright Publishing Corporation, New York.