Charlie the Anti-Fascist Dog@arrrg@kolektiva.social
While capitalism's origins are disputed, we believe there is a case for tracing them to the island of Madeira1, 320 miles off the west coast of north Africa. Madeira was first colonized by the Portuguese in the 1420s. It was a rare example of a genuinely uninhabited island. The Portuguese colonists treated it a terra nullius: a "blank slate." They soon began clearing it of the resource after which it was name: madeira is Portuguese for wood.
At first, forests on the island were felled to meet the need for timber - which had been all but exhausted in Portugal and was in high demand for shipbuilding - and to clear land for raising cattle and pigs. In other words, the original colonists simply extended the economy which they were familiar. But after a few decades, they discovered a more lucrative use of Madeira's land and trees: producing sugar.
Until that point, economies had remained, at least in part, embedded in religious, ethical, and societal structures. Land, labor, and money tended to possess social meanings that extended beyond the value that could be extracted from them. In medieval Europe, for instance, feudal economies - while highly oppressive - were strongly connect to both the Church and a codified societal system of mutual obligation between large landowners and their serfs and vassals.
On Madeira, as the geographer Jason Moore has shown2, a form of economic organization developed that was in some respects different from anything that had gone before. On this newly discovered island, the three crucial component of the economy - land, labor, and money - were detached from any wider cultural context and turned into commodities3: products whose meaning could be reduced to numbers in a ledger.
Onto the blank slate of Madeira's land, the colonists imported labor in the form of slaves, first from the Canary Islands 300 miles to the south and then from Africa. To finance their endeavors, colonists imported money from Genoa and Flanders. Each of these components - land, labor, and money - had been stripped of their societal meanings before. But arguably not all in the same place, at the same time.
By the 1470s, this tiny island became the world's biggest source of sugar. The fully commoditized system that the Portuguese created was astonishingly productive. Using slave labor, freed from all social constraints, the colonists were able to produce sugar more efficiently than anyone had done before. But something else was new - the amazing speed at which that productivity peaked and then collapsed.
Sugar production on the island peaked in 1506, just a few decades after it began. Then fell precipitously, by 80 percent within twenty years - a remarkable rate of collapse. Why? Because Madeira ran out of madeira. Stoking the boilers needed to refine and process a kilogram of sugar required 60 kilograms of wood. The enslaved laborers had to travel farther and farther afield to find this wood, extracting it from ever steeper and more remote parts of the island. In other words, more labor was needed to produce the same amount of sugar. In economic terms, the productivity of labor collapsed, tumbling fourfold in twenty years. In tandem, the forest clearance drove several endemic Madeiran animal species to extinction. The island-wide disturbance of forest ecosystems was sufficiently serious that the first of several major extinctions of endemic mollusks occurred in the early sixteenth century, the result of "rapid and large-scale change in the habitat, from woodland to grassland."4
So what did the Portuguese sugar planters do? They did what capitalists everywhere would go on to do. They left. They took their operation to another recently discovered island farther south, São Tomé, 190 miles off the west coast of central Africa. There the pattern had been established on Madeira was repeated: Boom, Bust, Quit.
When sugar production on São Tomé went bust, the Portuguese moved on again - this time to the coastal lands of Brazil, where their much bigger operations followed the same script: Boom, Bust, Quit. Then other imperial powers moved to the Caribbean, with the same results, burning through one frontier after another. Since then, the pattern had been followed across countless commodities and commercial schemes - the sparks that ignited Madeira's forests scattered across the world. They continue setting fire to ecosystems and social systems to this day, consuming all that lies in their path. This seizure, exhaustion, and abandonment of new geographical frontiers is central to the model we call capitalism.
"Boom, Bust, Quit" is what capitalism does. The ecological crises it causes, the societal crises it causes, the productivity crises it causes are not perverse outcomes of the system. They are the system.
Before long, Portugal was supplanted by other nations, and England quickly became the dominant colonial power. Over the course of the next several centuries, European colonial powers systematically looted one region after another. They stole labor, land, resources, and money, which they then used to stoke their own industrial revolutions. The United Kingdom's great and unequal wealth was built on colonial theft in Ireland, the Americas, Africa, India, Australia, and elsewhere. One estimate suggests that, across two hundred years, Britain extracted from India alone an amount of wealth equivalent to $45 trillion in today's money.5
To handle the greatly increased scope and scale of transaction, the colonial nations established new financial system that would eventually come to dominate their economies - instruments of extraction whose use has intensified. It continues today with ever-increasing sophistication, assisted by offshore banking networks.6 Powerful people and corporations seize wealth from around the world and hide it from the governments that might otherwise have taxed it, and from the people they have robbed. As offshore tax havens and secrecy regimes shift capital even further out of sight, this disappearing frontier in the invention of evermore creative financial schemes.
Using international debt and the harsh conditions attached to it (a system known as "structural adjustment"),7 tax havens and secrecy regimes, transfer pricing (moving wealth between subsidiaries),8 and other clever instruments, rich nations have continued to loot the poor, often with the help of corrupt officials and the proxy governments they install, support, and arm. Commodity traders working with kleptocrats and oligarchs fleece poorer nations - seizing their natural resources, effectively without payment. The US research group Global Financial Integrity estimated that $1.1 trillion a year flows illegally out of poorer nations,9 stolen through tax evasion and the transfer of money within corporations.
If this rapacious cycle were interrupted, the system we call capitalism would fall apart. Capitalism depends upon constant growth, and must forever find new frontiers to colonize and exploit. So now its attention turns to the deep ocean floor, in search of mineral clusters to mine, and fish populations yet to be driven to exhaustion. It looks to outer space, seeking to extract minerals from planets and asteroids, or to stake out new colonies:10 escape hatches for the super-wealthy to be exploited once Earth is no longer habitable.
A system based on perpetual growth cannot exist without peripheries and externalities (the "unintended," and often devastating, consequences of economic activity). There must always be an extraction zone, from which materials are taken without full payment; and a disposal zone, where costs are dumped in the form of waste and pollution. As the scale of economic activity increases, so capitalism transforms every corner of the planet-from the atmosphere to the deep ocean floor. The Earth itself becomes a sacrifice zone. And its people? We are transformed into both the consumers and the consumed.
All exploitative systems require justifying fairy tales, and the true nature of capitalism has been disguised from the beginning by such myths and fables. The Portuguese colonists of Madeira claimed that there had been a natural apocalypse,11 a wildfire that raged for seven years, consuming all the wood on the island. There was an apocalypse all right, but there was nothing natural about it. The island's forest was incinerated by a different blaze - the first of capitalism.
The fairy tal of capitalism grew win in 1689, when John Locke published his Second Treatise of Civil Government.12 Locke claimed that "in the beginning all the world was America." By this, he meant a terra nullius: like Madeira, a no-man's-land in which wealth was just waiting to be taken. But, unlike Madeira, the Americas were heavily inhabited - by tens of millions of indigenous people. To create his terra nullius they would have to be erased - either eradicated or enslaved.13