by Sven Beckert
Mexico’s independent state, subject to the pressure of deeply entrenched, well-organized, and consciously, programmatically industrialist businessmen who not only could make their interests central to state policies, but in fact often dominated the state, was essential for its move toward industrial capitalism. In Mexico, unlike, for example, Brazil, promoting domestic industry was very much an issue close to the heart of nationalist politicians: As one historian of Mexico observed, “The prosperity of manufacturers depended almost exclusively on the willingness and the capacity of the state to police the marketplace.” The independence of Mexico thus mattered a great deal. By 1870, domestic textile producers, most of them in cottons, still supplied 60 percent of the domestic market, compared to just 35–42 percent in India and 11–38 percent in the Ottoman Empire. Mexico’s unusually consistent and forceful political commitments to import substitution thus created a position unlike any of its peers in the global South.44
The successful forging of industrial capitalism thus rested as much on the capacity of states to create a framework in which manufacturing could thrive as on entrepreneurial initiative. Beyond protectionism, states also played a crucial role in market making by removing internal duties. The Catalonian industry benefited from the removal of internal tariff barriers in the Spanish market, as did the industry in the German lands after the creation of the Zollverein in 1834, which removed the myriad border crossings and tariff payments that had characterized trade in that part of the world. Sometimes the state also became an important customer, as for example in Russia, mostly to equip their militaries. But most important of all was the road building, canal digging, and railway construction that characterized assertive states in the first half of the nineteenth century. These infrastructure projects greatly facilitated the circulation of goods, people, and information, and thus allowed for the emergence of larger and much more integrated markets.45
As firsthand witnesses to England’s early triumphs, competing states and cotton capitalists also clearly saw a national interest in conquering foreign, often colonial, markets and did what they could to follow suit. Britain itself, of course, relied on imperial expansion to capture markets, in part to sidestep the protectionist policies of continental Europe and the United States. So did the Catalonian industry, which benefited greatly from sales overseas, so much so that the Americas, according to one historian, constituted “the most dynamic market for the producers of the Principality since the late 1770s.” And it was a nearly perfect complementarity: Cotton textiles flowed out of Catalonia’s cotton industry, while raw cotton, with the encouragement of the Spanish state, came in increasing amounts from the New World to the port of Barcelona.46 As elsewhere, new forms of integrating colonial territories and industrialization emerged.47
As a result, growth rates of the Catalan industry were about equal to those of the British industry—but only until the 1810s, when Spanish holdings in Latin America shrunk drastically. Though Spain had once possessed one of Europe’s fastest-growing cotton industries, Spanish producers increasingly found themselves at a disadvantage; without the benefit of colonial markets, merchants could not compete with cheaper British goods, either in former Spanish territories or elsewhere in the Americas. With the declining prospects of the industry, merchant capital divested, showing the importance of the state-sponsored creation of cloth markets.48
BUILDING NATIONAL INDUSTRY
Mexico: Estéban de Antuñano (illustration credit 6.6)
Germany: Friedrich List (illustration credit 6.7)
United States: Tench Coxe (illustration credit 6.8)
The French and Dutch industries benefited from colonial markets just as much and for much longer. French manufacturers found significant markets within their colonial empire in Africa, Asia, and the Americas. Holland regained Java in 1816, and by 1829, 68 percent of cotton imports to Java originated from the Netherlands. This was not least the result of King William’s 1824 Textile Ordinance, a protectionist law that tried to force British manufacturers out of Java. William also created the Nederlandsche Handel-Maatschappij, a semigovernmental firm, with the king as a major investor, buying Dutch cottons and selling them in Java to bring Javanese goods back to Holland. Thus supported, colonial markets were central to Dutch success. Twente’s cotton industry in fact became completely dependent on the Javanese market.49
When Belgium became part of the Dutch Republic in 1815 as a result of the Congress of Vienna, it profited immediately and tremendously from new access to the Dutch Asian markets. These markets became so important that Belgium’s gaining independence in 1830 and losing access to Dutch colonial markets precipitated a severe crisis. Some Belgian firms even packed up and moved to Holland in order to continue to export into the colonies, such as those of Thomas Wilson and Jean Baptiste Theodore Prévinaire, who both moved to Haarlem in 1834.50
Even manufacturers in countries without colonies benefited from other states’ colonial expansion. Swiss manufacturers, like their British counterparts, responded to the increasing protectionism around them by investing in the Italian and German cotton industry, and by looking for markets farther afield. In the 1850s and 1860s, the production of batiks for Southeast Asia and cotton head shawls for the Islamic world was important to Swiss manufacturers, with the Winterthur merchant house Gebrüder Volkart, for example, selling Swiss cotton goods to India, the eastern Mediterranean, and East Asia.51
The ability to shape nearby and distant territories into markets was a capacity that emerged much later, if ever, in much of Africa, Asia, and South America. While skills, markets, capital, and technology were available in many different parts of the world, a state that could protect domestic markets, forge access to remote markets, and create an infrastructure that facilitated manufacturing was the distinctive feature of early industrial leaders. And these increasingly powerful states also forged the institutions necessary to underpin industrial capitalism—from markets for wage labor (enabled by the undermining of precapitalist dependencies in the countryside and alternative means of gaining access to subsistence) to property rights created by laws and administrative infrastructures.
As a result, industrial capitalism, the most revolutionary invention of all, traveled only in very particular ways. The capitalists who managed to follow the British example usually worked within states that embraced the industrialization project and saw national manufacturing as a way to strengthen the state, forging in the process a new relationship between economic activity and national territory. In these states, rulers, bureaucrats, and capitalists could penetrate bounded territories legally, bureaucratically, infrastructurally, and militarily to create conditions that allowed for long-term capital investments, the mobilization of labor, expanding domestic and foreign markets, and protection for national industries from the uncertainties of the global economy. For statesmen in burgeoning nation-states, the calculations about whether to build an industrial society on the British model were straightforward: Industry was a source of wealth, and also of vastly superior tools of warfare. To survive in a competitive state system, prosperity was imperative, and embracing industrial capitalism seemed like a sure way to reach it. For some capitalists, in turn, investing in manufacturing seemed a promising avenue toward wealth—and they pressured their governments to the best of their ability to help forge industrial capitalism, often against the interests and inclinations of competing, often landed elites. Their success was the ultimate key to membership in the cotton industrialization club, and at the center of the “great divergence” in global economic history. And this industrial capitalism, as we will see, would eventually grow strong enough to lessen its dependence on war capitalism during its grand crisis in the 1860s.52
Cotton industrialization was thus not only a project of capitalists, as we know, but equally a project of governments. Most miraculously, the emergence of a set of states determined and able to protect domestic cotton manufacturing did not devastate the export-dependent British industry. To t
he contrary, British cotton manufacturing continued to expand at a rapid clip after 1815. In the first half of the nineteenth century, British production increased by 5 percent annually, and its exports by 6.3 percent. By 1820, British entrepreneurs operated 7 million spindles, and by 1850 21 million. By the 1830s, weaving was also increasingly mechanized, and with the spread of power looms, weavers moved into factories as well. By 1835 there were roughly fifteen hundred cotton manufacturers (some of whom owned multiple mills), and by 1860, four thousand manufacturers owned cotton mills in the British Isles. So important did cotton become to Britain that by 1856 the Manchester Chamber of Commerce accurately described the industry as one “neither surpassed in extent nor in usefulness by any other manufacturing pursuit.”53
The secrets of British success in the face of protectionism elsewhere were twofold. For one, British manufacturers focused on higher-quality yarn and cloth, since they lacked competition from technologically less advanced manufacturers elsewhere. And Britain increasingly depended on markets in colonial or semicolonial areas of the world. Into the 1850s, more than half of all cottons produced in the United Kingdom were exported. Between 1820 and 1850, Asia and Latin America constituted the most rapidly growing export markets, and Asia’s share in particular increased quickly. The British cotton trade avoided the stronger states that could protect their own emerging industries, gravitating instead toward markets that were unable to politically resist the British onslaught.54
The tremendous rapacity and unbalanced consequences of war capitalism left in its wake a great diversity: Some states were strengthened, while others were weakened and unable to invest in infrastructure, administrative capacity, and protections of industry. Some states had astounding capacities to manufacture goods on a mass scale; others remained embedded in preindustrial, housebound production. On the one hand, slavery, land expropriations, militarized trade, and colonial expansion had opened up vast new territories and labor pools for cotton growing and created new markets of tremendous vitality. They had helped limit competition in global markets, radically stimulating the international flow of goods, and thus making the project of industrialization the possession of a few privileged parts of the world. They were also at the root of a vast strengthening of states that enabled a few of them to forge the institutions of industrial capitalism. Indeed, the imperial extension of European state power over the globe and its intensification within Europe itself were mutually constitutive for a short but decisive moment.55 On the other hand, colonial expansion, the slave trade, and slavery itself undermined state capacity in other parts of the world and in so doing limited the likelihood that the newfangled machines, and with them industrial capitalism, would take root there as well.
No place illuminates the double impact of war capitalism on the cotton industry better than Egypt. This North African country, long exceptional in multiple ways, seemed at first to break with its continent and follow the trajectory of Europe. Egypt had within itself many of the preconditions for successful cotton textile industrialization. It had access to raw cotton, grown in ever larger quantities on its own soil. It had a long history of textile production, and cotton was the most important craft industry of its major cities before the Industrial Revolution; in the eighteenth century Egypt was already exporting textiles to France.56 It had, as we will see, access to British technology. And Egyptians were able to mobilize sufficient amounts of capital. But by 1850 Egypt had not joined the small number of countries experiencing Industrial Revolution.
It all started quite promisingly. Influenced by mercantilist thought, Egypt’s ruler, Muhammad Ali, was bent on setting up manufacturing enterprises. Industrialization, he hoped, would strengthen, among other things, Egypt’s military power and independence. Ali began an import-substitution project not unlike those of his continental European counterparts. In the early nineteenth century, Egypt had exported significant quantities of grain to Europe, which British merchants paid for with imported textiles that hurt Egyptian textile workshops. In response, Ali put an embargo on these British goods and encouraged Syrian Christians, who historically had dominated the textile trade, to set up factories. In 1815, the first cotton weaving workshop opened with a government-granted monopoly. Three years later, in 1818, the first mechanized cotton spinning mill began operations, rapidly followed by others.57
The technology for such industrialization in Egypt, as elsewhere, came directly or indirectly from Britain. At first, Ali imported spinning machines from there and had them set up by British mechanics, but later he brought French engineers to start a domestic machinery industry.58 So far, cotton industrialization in Egypt followed along the lines of continental Europe, the United States, and Mexico.
The peak of this industrialization effort was reached in the mid-1830s. By 1835 between fifteen thousand and twenty thousand workers labored in thirty cotton factories operating approximately four hundred thousand spindles. Most of the products of these factories served the domestic market, but other fabrics were exported—throughout the Middle East, to places such as Syria and Anatolia, but also into Sudanese and Indian markets. As the German paper Ausland remarked in 1831 after reviewing the Egyptian cotton industry, “It is interesting that a barbarian has achieved within a few years what Napoleon and the entire continent were unable to accomplish since the beginning of the century, despite all possible efforts, i.e., to successfully compete with the British in the production of cotton.” Such an assessment was only a slight exaggeration: One expert estimated that by the 1830s Egypt was fifth in the world regarding cotton spindles per capita, when it counted about 80 mechanized spindles per one thousand population compared to 588 in Great Britain, 265 in Switzerland, 97 in the United States, 90 in France, and 17 in Mexico.59
Marrying war, capitalism, and industrialization: Muhammad Ali Pasha (illustration credit 6.9)
Tellingly, British government officials began to worry about losing markets to such a “barbarian.” Sir John Bowring, a onetime member of the British Parliament who was later governor of Hong Kong, observed in 1837 during his travels through Egypt that British cotton textiles, “formerly so much used, are now scarcely at all sent to Egypt since muslins have been woven in the new factories.” And such concerns were also raised in regard to other markets: The Bombay Asiatic Journal reported in 1831 that “an Arab ship…from the Red Sea has brought 250 bales of cotton yarn, the manufacture of Ali Pasha at his spinning mill near Cairo. It is reported that he has sent 500 bales to Surat, 1,000 to Calcutta, and that he intends next season to send long cloths, machapollams, etc. What will the mercantile community say to this new competitor?”60
British merchants in India complained. In June 1831 they reported on Egyptian imports into Calcutta, “This twist is of superior quality, even surpassing that imported here from England…. Considering these facts, it may be apprehended that the manufactures of Egypt are likely to interfere with similar productions imported into this country from Great Britain.” Further examination of Egyptian cotton imports having convinced them that “thread is remarkably strong,” they concluded that “considering the advantages the pasha possesses and his vicinity, we conceive the British manufacturer is entitled to greater protection than the above duty, and it is the intention of the agents here to address government on this subject.”61
What they saw in Egypt impressed other observers as well. When in 1843 French textile manufacturer Jules Poulain studied the cotton mills of Egypt and provided Ali with a detailed report on his observations, he encouraged further efforts at industrialization. According to Poulain, “It is industry that makes the wealth of nations.” Poulain, along with Ali, believed that it was “natural [to] manufacture the product of one’s agriculture.” Indeed, the fact that Egypt grew its own cotton would be a comparative advantage vis-à-vis France and the United Kingdom. If the French succeeded in the Indian town of Pondicherry (where they had just opened a small spinning mill), Poulain believed, the Egyptians could succeed in Egypt as well, not least bec
ause an “immense advantage” comes from the fact that labor in Egypt was much cheaper.62
And here, at the labor question, Egypt’s story began to diverge. Much more than European states, Ali followed the war capitalism model in Egypt itself. Workers were forced to work in the factories. When the first cotton textile workshops opened in the Khurunfish quarter of Cairo sometime between 1816 and 1818, their skilled workers and machines came from Europe, but the one thousand to two thousand rank-and-file workers were Sudanese slaves and Egyptians coerced to work for minimal wages, tightly supervised by the army. These workers were frequently abused. In some ways, this system was not so different from elsewhere—with government inducements for industrialization and orphans being forced to work in factories—but still, coercion was more extreme in Egypt and wage labor remained marginal. In some ways, Egypt’s rulers chose the tried-and-true mechanisms of the global plantation complex as its path into the world of the factory. Indeed, Ali demonstrated that war capitalism could, at least in Egypt, and for a short time, give birth to industrialization.63
