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Saturday, October 18, 2008

Did pirates invent Capitalism?

This is surely not a totally new idea (my uncle already flirted with it when I was just a kid, possibly inspired by the Marxist concept of property accumulation as mere organized robbery) but that is what Dr. Peter Hayes suggests in his latest work
Pirates, Privateers and the Contract Theories of Hobbes and Locke.

Have not read it yet but there is a good review at Science Daily. In it Dr. Hayes is quoted claiming that pirates were backed by financeers, supported by the state as long as they paid taxes (privateering) and even had their own financial paradises in places like Tortuga and Madagascar. Pirates also ruled themselves in a democratic manner, what actually appears as a precedent of human rights... but to the exclussion of all others.

I'd argue that there are other precedents for corporations and democracy, though. The first ones can be traced already in Renaissance Italy, while the latter is found also in pre-Modern times in places like Switzerland and the Basque Country among other places. But still Hayes' idea is food for thought, specially as Capitalism and the now mainstream political theories of social contract appeared rather coincidentally not long after the golden of age of piracy. Piratic apogee was in the 17th century and the modern political and economical theories and praxis got consolidated in the 18th century.


Tod said...

In "Year 501" Noam Chomsky quotes from John Maynard Keynes saying that the loot brought back by Sir Walter Raleigh was the origin and font of Englands foreign investments. His example was followed by many other murderous sea-dogs. New York at the time of Captain Kidd was a thieves market.

Maju said...

That's interesting, indeed. And it's probably true that pirates and privateers were a meaningful part of the Modern acumulation process, specially in Britain and the Netherlands. But how much can be Capitalism itself awarded to them, I am doubtful.

Most of the formal background of modern economy was, I think created in Renaissance Italy (and also other mercantile hubs of Europe, like Flanders and the Hanseatic League): things like accountancy, exchange letters, cheques, banking... all existed before fully developed Capitalism arose in Britain.

Also, one thing is to capture wealth, such as gold, an another thing is to re-invest it. The Spaniards for instance were for long in nearly total control of gold and silver (and the conquest of Mexico and Peru was not much distinct from piracy anyhow), yet they were mostly unable to reinvest it in some secondary step of capitalist acumulation and Spain (Castile to speak more properly) remained basically a producer of primary goods, gradually becoming comparatively underdeveloped.

So, as I see it, the key for Capitalist developement was not so much in how the original capital was captured but in the fact that it was re-invested, creating the secondary (manufacturing) and tertiary (financial, etc.) sectors.

Tod said...

If I remember corectly in Year 501 Chomsky says although the Netherlands was home to the first modern capitalists, the British were the first to have a modern capitalist state . The Dutch did not put the power of their navy into service to force trade on overseas markets and on their own terms and eliminate competition the way the Engish did.

Maju said...

The Dutch could probably not do that: like the Portuguese before them, they were too small a nation to play the imperial role.

I don't think anyhow that one can pinpoint easily the "first Capitalism". It was a gradual evolution, starting in the late Middle Ages. We can maybe locate the first theoretical framework for this system (Smith, Ricardo), but only as opposed to Mercantilism, which was itself a proto-Capitalism.