7.7.2 Colonialism and Global Capitalism

A second reason for providing the brief history lesson in the last section is to show how the development of the industrial economy in Europe generated the global system of capitalism that exists today. After the European slave trade was abolished in the early 19th century, Europeans expanded their control over African, Asian, and New World territories, cultivating new sources of such raw materials as peanuts, cocoa, and palm oil to develop even more lucrative European industries. This expansion of control took the form of colonialism, the political domination of another country in the interest of economic exploitation.

From the 1500s to the 1900s, European countries strove to dominate much of Africa, Asia, and the Middle East as well as North, Central and South America. Different techniques of rule were practiced at different times and places, but all colonialism involved a set of key features, including violent rule by a European government, the extraction of raw materials, forced labor, taxation, the spread of Christian missions, the denigration of local cultures, the introduction of diseases, and increased local conflict. While their motivations were primarily economic, European colonizers claimed to be inspired by a “civilizing mission”—the idea that European domination was necessary to bring the benefits of progress, such as hospitals and schools. For colonized peoples, the hardships and injustices of colonial rule far outweighed the meager benefits offered to some groups.

Economically, the whole purpose of colonialism was to design a system for extracting raw materials to support the industrial economies of Europe. Therefore, European countries such as Britain, France, and Germany sought out sources of valuable minerals for the mining industry as well as good land for growing crops that European manufacturers could process into commodities. In Africa, many fertile regions were seized and sold to White settlers to establish plantations for growing tea, cotton, and other cash crops. The African peoples who lived there were relocated to less fertile lands and forced to work on the White plantations in order to survive. In places where White people found it hard to live (e.g., places with widespread tropical diseases such as malaria), colonial governments recruited African farmers to grow cash crops such as coffee and cocoa. Colonial subjects were taxed by colonial governments in order to force them to work in mines and on plantations or grow cash crops for export. African businesspeople were edged out of international trade, and industrial development was curtailed in the colonies to protect European industry.

Most colonized countries became independent in the mid-20th century. Economically speaking, however, colonial domination never quite ended for the vast majority of postcolonial countries. The economies of most African countries are still dominated by a few mining and cash crop exports. As the global prices of such raw materials fluctuate widely from year to year, postcolonial governments find it hard to budget and plan ahead. Moreover, the actual value of raw material exports erodes over time, forcing countries to export more and more just to maintain their economies, making real economic growth and development almost impossible.

In response to this dilemma, many postcolonial countries, including India, have adopted ambitious schemes to industrialize their economies in order to get out of the colonial economic trap. Currently, the government of Ghana is pursuing a renewed effort at industrialization, hoping to add value to cash crops such as pineapples and groundnuts and provide jobs to Ghanaians by manufacturing commodities of higher value for local use and export. The One District, One Factory initiative aims to establish a new factory in each of Ghana’s 216 government districts.