Nepali Wanderer

Capitalism as an economic system has shaped the world like no other. Unlike much of history, when only those with resources (feudal lords and rich traders) could invest to make money, Capitalism (along with concepts like Credit and Credit Creation) allowed even those with minimal resources to start ventures with the promise of higher future returns.

While the idea of people acting in their self-interest or privately owning property is not inherently evil (it actually feels natural), Capitalism has its darker side: the disregard for everything that is not profit. This relentless pursuit of endless profit propelled the further rise of Imperialism and Colonialism in the 19th century.

Like we discussed in our previous story, Capitalism needs fuel to turn its wheel, namely labor and resources. Colonialism provided this fuel to the capitalism-driven superpowers and their companies. By taking over new lands, superpowers and their corporations could exploit new resources as much as they wanted and secure cheaper (or even free) labor in the form of natives or slaves. Ironically, the natives of the colonized lands also provided a new market for these superpowers.

As we have seen in our story on exploration, much of America (the “new world” for Europeans) and Asia were eventually colonized by European superpowers and corporations. India and the islands in the Indies (modern-day Indonesia) saw a massive increase in European wealth as they were lands directly colonized by capitalism-driven corporations.

Indonesia alone contributed 25 percent of the total Dutch budget during peak colonialism, while British India effectively financed Britain’s rise as the richest country in the world, becoming Britain’s biggest market. Sure, colonialism did lead to some development of institutions and infrastructure (like railways in India), but it ultimately resulted in massive depredation and plundering of Asian wealth. For example, India’s global GDP contribution dwindled from 25 percent before British colonization to 3 percent by the time the British left.
Although religion played a role during the era of colonialism, evident by missionaries spreading Christianity especially in the New World, the waxing influence of money over religion is clear from the eventual triumph of capitalism-driven companies (Dutch East India Company, British East India Company) over the monarch-funded, Catholicism-driven Spanish Empires.

The first wave of Colonialism led to the rise of many nation-states in the Americas. Just as 1776 saw the rise of the United States of America, the next few decades saw several independent nation-states emerge in Latin America. In that sense, the new world, often relegated to the last pages of world history, actually pioneered the mass wave of nation-state formation. Europe itself experienced its era of nation-state formation, with modern-day Italy, Germany, and Belgium forming during the mid-1800s.

As industrialization peaked in the 1800s, Capitalism’s influence grew, leading to more colonies for European superpowers. European colonies in Asia extended beyond India and Indonesia, with Britain further colonizing Sri Lanka, Myanmar, Singapore, and Malaysia. While the Dutch maintained control over Indonesia, France established colonies in Asia, including Cambodia, Vietnam, and Laos (then known as French Indochina). However, Africa, the land where European exploration began, experienced the most extreme form of money-driven Colonialism.

Africa, rich in natural resources like gold, diamonds, rubber, and other valuable materials, became the focus of European industrial capitalism. In what is known as the “Scramble for Africa,” European nations (Britain, France, Germany, Portugal, Belgium, Italy, and Spain) carved up the continent according to their interests and colonized more than 90 percent of African land. Money motivated Belgium, a small country, to colonize a land almost 80 times its size in what became Belgian Congo for rubber. Similarly, Germany, a newly formed nation-state, hosted a European conference (Berlin 1884) on how to colonize an entire continent.

Africa, now home to 54 countries, saw all but two (Liberia and Ethiopia) colonized. However, the continent might not have these 54 countries without colonization and eventual decolonization. The transition from colonization to decolonization was catalyzed by wars, which were in turn catalyzed by a phenomenon associated with nation-states.

Next, we will discuss that phenomenon and the subsequent wars and decolonization that followed.