Geographies of Early Capitalism

Within the context of the theoretical and conceptual ideas outlined so far, it is now appropriate to examine the historical development of the capitalist system and the division of labor in the period since the late Medieval decline of feudalism.

From Feudalism to Capitalism

Though the term itself was coined only in the seventeenth century, feudalism describes a range of Medieval socioeconomic systems comprising intricate linkages between lords, vassals, and land resources that existed in Europe as well as in other parts of the world. Lords were nobles who held land, and vassals were granted access to portions of that land in exchange for military service and meeting other obligations. The king was the supreme lord who granted the land of his realm to the nobility in return for their fidelity, counsel, and willingness to answer a royal call to arms. Feudal vassals were permitted to collect revenues generated by the land that they held. The nobility granted portions of land to lesser lords and they, in turn, gave protection to peasants who, in return for labor services and rents (usually a combination of a sum of money and some agricultural produce), were allowed access to parcels of land for farming. The system of land grants in return for defined obligations was thus repeated from the apex to the base of the social hierarchy. While the roots of the decline of European feudalism may be traced to the 1200s, as will be shown below, its demise was slow. Importantly, in England, the vacuum left by the gradual decay of feudalism was filled by nascent forms of modern capitalism. As noted already, from England capitalism spread to other parts of Western Europe and to the rest of the world. However, there is still considerable debate among scholars regarding the precise timing, the location, and the transition processes that saw its emergence.

A key question is why feudalism declined at all. It began as a social contract but, over the course of time, feudal lords could no longer provide new lands to their vassals and the enforcement of their right to reassign land diminished as holdings became de facto hereditary properties. Moreover, from the thirteenth century, the economies of countries in Western Europe began gradually to change from predominantly agrarian systems to ones that were increasingly money based and mixed. While land remained a principal source of income, and defined an individual’s social status, even the high nobility developed a need for liquid capital – to pay for luxury goods or to fund wars against their enemies. The process of change was boosted by the after effects of the Black Death that decimated the population of Europe in the late 1340s and further undermined the social and cultural controls of feudalism. Indeed, for most scholars, the fourteenth century marks the end of the true feudal age of dispersed lordship thus paving the way for the development in the 1500s of strong monarchies, nationstates, and centralized control.

Merchant Capitalism and Colonial Expansion

Although some authorities suggest that, as noted already, an intermediate ‘agrarian’ form of capitalism emerged in England as feudalism decayed, for writers like Max Weber, Fernand Braudel, and especially Henri Pirenne, the key development in later Medieval Europe was the growth of largely self governing cities and towns devoted to manufacture, commerce, and trade. In these towns, an increasing and autonomous bourgeoisie managed the development of merchant capitalism and this was the essential prerequisite for the rise of the modern capitalist system. Mercantilism or finance capitalism involved the investment (or ‘adventuring’) of capital in a spatially expanding network of trade in both staple commodities, such as timber and corn, and in an increasingly broad range of manufactured goods. The latter were still, however, mostly those made by traditional handicraft and artisan methods. Between the later fifteenth and the eighteenth centuries, the growing merchant capitalist class – at first dominated by the Portuguese (strongly backed by Venetian and Genoese investment) and the Spanish, but soon superseded by those of England, The Netherlands, and France – sought new markets and made geographical discoveries well beyond Europe. The colonization of the Americas and the development of colonies for the purpose of conducting trade with India, the East Indies, and the Far East were tangible geographical expressions of merchant capitalism.

Many companies of investors, often obtaining royal charters that recognized their right to trade in particular regions of the world and notionally afforded the protection of the state, were formed in Europe during this period. Among the most famous are the Dutch and the English East India companies. The latter secured its charter in December 1600 and, by the end of 1606, the company had financed two expeditions to the East Indies that returned with cargoes of pepper, nutmegs, and cloves. Although one of the company’s four ships was lost at sea when returning from the second trip, when the spices were sold, the shareholders had nonetheless secured a 95% profit on their initial investment. This basic premise of financial investment whereby shareholders organized in companies staked their money in trading enterprises in the hope and expectation of substantial profits lay at the core merchant capitalism.

Protected by state controls, subsidies, and monopolies, merchant traders were able to amass capital on a spectacular scale. Contemporary supporters of mercantilist doctrine strongly emphasized the importance of the state as both the regulator of the economy and the source of charters that accorded monopoly trading rights and offered state protection against foreign competition. Overseas conquest and the acquisition of colonies were, moreover, regarded as legitimate and indeed essential ambitions for mercantilist economies. Colonies were valuable sources of raw materials and lucrative markets for finished products. By the early eighteenth century, Britain’s colonial activity was beginning to eclipse that of her rivals and London was the primate city of the world capitalist system.

Although the spread of mercantilism across Western Europe is easy to understand, it has proved more of a challenge to explain why the leap to a modern industrial capitalist economy first occurred in England. Mercantilism lasted much longer in some of Europe’s less well developed economies (e.g., Prussia, part of today’s Germany), but it was declining in England by the mideighteenth century. Factors cited to explain England’s lead toward industrial capitalism include the centralized character and political unification achieved by the sixteenth century, the Reformation and suppression of the monasteries that saw the enormous transfer of the church’s land and political influence to secular interests, and the emergence of a new social order from the seventeenth century conflict between Crown and Parliament during the Civil War and Commonwealth, Restoration and Glorious Revolution. By 1700, the capitalist bourgeois classes had triumphed and were therefore able to determine the running of England’s economy. Moreover, a further confluence of conditions allowed industrial capitalism to emerge. Most significant among the further conditions was the availability of the wealth accumulated during the merchant phase of capitalism which could now be invested in mechanized production.

Industrial Capitalism and Its Geographies

Industrial capitalism saw the rapid development of the factory system of production, characterized by those complex and intricate divisions of labor, both within and between production processes, to which reference has already been made. This process, which led to the proletarianization (and, he argues, exploitation) of labor, is explored in depth in E. P. Thompson’s classic study, The Making of the English Working Class. Thompson shows that in this new turn of the economic revolution, industrialists replaced merchants as the key players in the capitalist system. Handicrafts and artisanship, the powers of the urban based regulatory guilds, and the traditional networks of masters, apprentices, and journeymen were all eclipsed. The ethos of industrial capitalism also began to challenge mercantilist doctrines of trade barriers and protective monopolies and, by the mid nineteenth-century, Britain had fully embraced laissez faire economics. A clear manifestation of this new thinking occurred in the 1840s when the duty on grain imported to Britain was abolished by the repeal of the Corn Laws. Liberalism and competition in trade, and the development of a free market economy, were now the central political and economic philosophies of the era.

The capitalist transformation of Europe’s textile production from the fifteenth century onwards has received the bulk of academic attention devoted to explanations of the emergence of industrial capitalism. Studies have focused on the increasing mechanization of the manufacturing process and its spatial concentration to enable the new technologies to be fully and efficiently harnessed. Geographers note the apparently relentless tendency toward regional specialization and concentration in the textile industries that peaked in England during the later eighteenth century. Although the manufacture of some products remained relatively domestic in scale well into the twentieth century, others (china and pottery, iron and steel making, brewing, etc.) were transformed in a similar way. The landscape impacts of the changes in production methods and geographical location were profound. Steam powered technologies – hugely enhanced by the engineering inventions of Matthew Boulton and James Watt in the early 1770s – inexorably prompted industries with high energy demands to concentrate on or near coal fields; and, in these areas, in addition to the constructionof mills and factories, settlements dominated by high density industrial housing grew rapidly and the transport infrastructure was transformed as new networks of canals and turnpike (i.e., toll) roads were built. While traditionally characterized as the specific manifestations of the industrial revolution, such geographical transformations may also be seen as the tangible, virtually indelible landscape signature of the history of the wider capitalist system both in Britain and throughout much of the world.

By the nineteenth-century, Britain was seen (and saw herself) as the workshop of the world, but the driving forces of industrial capitalism, comparable to those experienced in the United Kingdom, were also exerting an impact on landscapes in other parts of Europe and North America. However, the processes involved were complex, varied, and geographically uneven and there has been much debate about the precise timing and character of the transformation in the case of particular industries and places. Parallels with the British model of change have been drawn, for example, with the development of heavy industry in Germany’s Ruhr region and in western Pennsylvania in the United States.

Steam technologies underpinned the invention in the early nineteenth-century of steam powered locomotive engines and the development of railways. The impact of the introduction of railways was dramatic in Europe and, arguably, even more so in North America and in imperial colonies. Railways made possible the integration – politically, culturally, and economically – of vast continental spaces. The British began to build railways in India in the 1850s. In North America, the first transcontinental railroad opened in 1869. The transport costs of raw materials and finished products were significantly reduced, new sources of supply became accessible, and new markets were opened up.