distinction between war and trade was only loosely drawn. Flotillas of ships
would cruise the coast, trading if they met strength, engaging in piracy if
they found weakness – the Vikings seem to have adopted a similar practice.
However, the mere existence of the exchange of goods does not create an
economy, much less a world economy. Here it may be helpful to introduce
some distinctions made by Immanuel Wallerstein in his monumental study
of the origins of the modern world system (Wallerstein 1974/1980/1989).
Wallerstein begins by defining a ‘world’ in social rather than geographical
terms. A world consists of those who are in regular
contact with each other
and in some extended sense form a social system – the maximum size of a
world being determined by the effectiveness of the technology of trans-
portation currently available; it is only in the twentieth century that the
social and the geographical world are effectively the same. He then identi-
fies ‘microsystems’ as self-contained societies, small ‘worlds’ which are
either entirely self-contained or exist with only limited exchanges with other
worlds, exchanges limited to luxuries and conducted, characteristically, by
trade caravans. Such microsystems still exist in places such as New Guinea
and the Amazon basin and are fascinating for social anthropologists, but
they are of little interest in this context.
Our interest is in worlds where
there is significant exchange, that is,
where the long-distance movement of essential, bulk, goods takes place;
Wallerstein suggests there are two kinds of worlds in which this happens.
On the one hand there are
empires, on the other,
world-systems (his term – for
our purposes the term
world economy is more appropriate). In empires,
exchanges take place within the same political structure, characteristically
in the form of
tribute. Thus Rome conquered Sicily and then Egypt in order
to extract from those territories the grain it needed to feed the enormous
population of the imperial city. The grain so
transferred was tribute paid
by the conquered to their conquerors. Within a world economy, on the
other hand, exchanges takes place between territories under different polit-
ical control, and thus tribute cannot be extracted; instead exchanges
take place on an economic basis as
trade. Wallerstein suggests that such
world economies occur quite often but are usually short-lived, filling spaces
between empires; Volume I of
The Modern World System traces the forma-
tion of such an economy in Europe in the ‘long sixteenth century’
(1492–1648), while subsequent volumes
demonstrate that rather than
disappear, this system has spread and now dominates the world as a
geographical and not just a social whole.
Wallerstein presents an account of the structure of this world economy as
necessarily divided into cores, peripheries and semi-peripheries; this is overme-
chanical and contentious – although quite influential in the ‘South’, as we will
see below – but his account of the early formation of the system makes good
sense and can be divorced from other aspects of his model. Initially two sets of
The Global Economy
143
transactions were under way; the large-scale movement of sugar and spices,
mostly in the form of tribute,
within the Spanish Empire, and the trading of
craft products and early manufactures from the ‘advanced’ areas of Europe
(the Low Countries, England and Northern France) for grain from Eastern
Europe, and sugar from the Spanish Empire. This basic set of exchanges was
initially based on very small differences of productivity between north-west
Europe and the rest, but gradually it worked to widen this differential. The
‘core’ in north-west Europe was able to develop comparatively effective and
powerful states and to dominate politically and economically both the ‘feudal’
systems of Eastern Europe and the overextended Habsburg/Spanish power
to the South. The strength of this description is that it makes the point that
from the beginning the world economy and the world political system were
closely intertwined. It also reflects the importance of communication and
transport technologies in determining the power of states relative to their size.
Contemporaries in the sixteenth centuries were deeply impressed by the scale
and scope of Spanish/Habsburg power,
but in fact, given existing technologies,
smaller, more compact states such as England and the United Provinces had
major advantages over such an unmanageable unwieldy conglomerate.
Over the next two centuries this economy expanded. The ‘agricultural
revolution’ in England, in particular, increased productivity markedly, and
the spread of empire generated important new commodities, in particular
tea and slaves. Ever greater areas of the world were integrated into a single
economy, still with the states of north-west Europe occupying the core posi-
tions, but with England – now the United Kingdom – increasingly becoming
the ‘core of the core’. In the Atlantic, the ‘Golden Triangle’ brought together
basic
manufactures from Britain, slaves from West Africa and sugar from
the Caribbean. Somewhat later, in the early nineteenth century, in the East
the demand for tea from China, the lack of a product desired by the Chinese
and the inability (at that time) to directly coerce the Chinese Empire led to
the development of another triangle, this time involving British cotton
goods, Indian opium and Chinese tea. However, for all the importance of
this activity, it remained the case that as late as the end of the eighteenth
century virtually
all states were still, in large measure, self-sufficient, and
although foreign trade was important to some, in particular the Netherlands
and Britain, this importance was still largely marginal. Even Britain, the
most important trading country, largely fed itself – the Corn Laws would
not have been effective in excluding foreign competition had not the highly
productive local agriculture been able both to feed the country and release
labour for the new manufacturing concerns.
All this changed with the emergence of industrial society in the nineteenth
century; by the second half of the century, for the first time ever,
a genuinely
world-wide large-scale division of labour existed. To a great extent Britain
was at the centre of this change – with the highest level of urbanization the
world had ever seen, and the lowest numbers on the land, this was a society
144
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