The relentless revolution: a history of capitalism (38 page)

Like any frontier, Africa attracted freebooters who sometimes acted as the point men for their country’s acquisitions. Such a man was Cecil Rhodes. Rhodes followed his brother to South Africa in 1870. Within a decade he put together the De Beers Mining Company, which extracted the bulk of the diamonds taken from Africa over the course of the next century. Rhodes was inspired by a vision of planting the British flag “from Cape Town to Cairo.” This alarmed the Portuguese in Mozambique and the Germans busy settling into East Africa. With the effrontery that sometimes builds great empires, Rhodes took over a territory that bore his name for half a century. Slow to respond to his high-handed ways, the British government finally asserted its sovereign power. Thanks to the disgraced Rhodes, that power now extended over a substantial hunk of southern Africa.

During its long history, capitalism often acted like a talent scout finding new uses for plants and products that had been around for ages. Rubber was one such. Grown wild in the rain forests of the Congo and in equatorial lands from Brazil through Malaysia and India, rubber had waterproofing qualities as well as elasticity, which had been appreciated. The American Charles Goodyear discovered how to take the stickiness out of the product, but it was not until the Englishman John Dunlop successfully made pneumatic tires for his son’s tricycle in 1887 that its capacity to give wheeled vehicles a smooth ride found a major commercial use. A bicycle craze ensued. Just around the next corner in technology’s forward movement was the automobile with prototypes of the modern car being developed in half a dozen countries. The demand for rubber for automobiles promised to integrate the previously neglected equatorial and Middle Eastern areas into the world economy.

It was not just rubber that found new uses; oil, nitrates, even cactus leaves acquired commercial value. The mechanical reaper was transforming American agriculture. Its widespread use occasioned another farm mechanism, a knotting device that bound wheat shafts with twine. Landholders in the poor and dry Yucatán Peninsula somehow learned of this and saw the possibility of making twine from cactus. A group of entrepreneurs emerged ready to enslave the peasants, if necessary, to get them to use their machetes to cut off the cactus leaves. As so often happens in the history of capitalism, as one group suffered from a development, another prospered. This was the case here: While Mexican workers hacked at cactus leaves with little reward, farming families on the American plains prospered from the mechanization of their labor.
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The long reach of capitalist innovation in our time found coltan, a very special metallic ore from the Congo, which helps shrink the size of cell phones.

The leading European industrial powers sometimes treated their less advanced neighbors with the same arrogant sense of entitlement that they displayed in Africa. In 1873 a consortium of German and British companies bought the Spanish mines in the Andalucian coastline along the Río Tinto that legend said were none other than those of King Solomon. Probably the oldest copper mines in the world, they date back to the time of the Phoenicians. The new Rio Tinto Company brought in modern equipment and set up a residential community for its British employees. This may have been one of the world’s first “gated communities,” designed principally to keep out the Spanish. Any Englishman who married a Spaniard lost the right to live in Bellavista. The company quickly turned the area into a moonscape and caused an environmental disaster by regularly burning pyramids of copper sulfides. More than twelve thousand outraged local sufferers, tired of breathing sulfur, in 1888 launched a protest that Spanish authorities put down with unstinting violence.
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The Rio Tinto Company made news again in 2008, when the Aluminum Corporation of America joined forces with the Aluminum Corporation of China to buy 12 percent of Rio Tinto’s shares.

During most of the nineteenth century the United States had expanded by pushing aside the Indians living beyond the Appalachian Mountains. Armed settlers backed by the U.S. Army helped the country fulfill what it considered its “manifest destiny” to occupy the North American continent. With the states of California, Oregon, and Washington filling up rapidly, the country’s leaders began to see the United States as a Pacific as well as an Atlantic power. The rage for empire infected many Americans. An opportunity arose just ninety miles off the coast of Florida. While other European powers were racing to acquire new colonies, Spain was having trouble hanging on to Cuba, Puerto Rico, and the Philippines, the last three possessions of its once-great empire. In 1898 the Cuban struggle for independence captured the sympathy of Americans, whose new tabloid newspapers sensationalized the rebellion going on there.

Blaming Spain for the explosion on an American battleship, the U.S. Congress gave the president authority to use force against Spain and, incidentally, declared Cuba independent. Once at war, the United States sank the Spanish fleet in Manila Bay, more than ten thousand miles from Cuba. The United States forthwith annexed Guam, Midway, and Wake. The Hawaiian Islands had already been formed into an American protectorate in 1893. Meanwhile back in the Caribbean, after a few skirmishes, Spain granted Cuba its independence and ceded the Philippines to the United States. Furious at being handed over to another country, independence-minded Filipinos struggled against their new masters for sixteen years. The fight was brutal. Even American soldiers were horrified at the atrocities committed by their army. Despite a vigorous anti-imperialism movement at home, the United States joined the imperial club. The Filipinos had to wait another forty-eight years to achieve their autonomy. American imperialists, like those in Europe, touted the expansion in manufacturing, trade, and employment their new conquests would nurture.
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The Awakening Conscience of the West

In the years following the great divvying up of Africa, David Livingstone and Henry Morton Stanley became emblematic of the two impulses that had brought Europeans to Africa. Stanley stood for arrogant exploitation while Livingstone represented dedication to the well-being of others, both physical and spiritual. Private ventures like Stanley’s upended the cultural integrity of countries strong in many things except the capacity to repel the might of the West. Christian missionaries cared about the African people but were just as intent on changing them. Despite the moral chasm that lay between Stanley and Livingstone, both men displayed traits remarkably congruent with venture capital: their insatiable curiosity, their endurance of short-run discomfort to achieve long-run goals, and their overriding tenacity.

Commercial avarice, heightened by the rivalries within Europe, had changed the world. When the burst of acquisitions ended, half the earth was under the control of nine nations. If you were to assign colors to Spain, Portugal, Britain, France, the Netherlands, Germany, the United States, and Belgium to designate their areas of domination—even Denmark would need one for Greenland—the map of the world would look like a colorful fabric design. These national carriers of Western capitalism had to coin new words for their possessions, conjuring up “mandates,” “spheres of influence,” “protectorates,” and “annexations” to specify the particular nature of their domination around the world. At a conference in Berlin in 1884–1885 they put their seal of approval on the African holdings of all nations present.

Westerners continued their march across the globe, considering it part of the grand plan of human progress. The urge to exploit resources everywhere was rarely seen as part of the capitalist dynamic. More often it got folded into the assumption that Europeans were agents of historical development. They did accomplish many good things abroad, and they witnessed firsthand the great cruelty of local potentates and the rigidity of social hierarchies that guaranteed the oppression of the many by the few. Still, their wounding arrogance blinded them to the harm that they were doing among people whom they little understood or cared about. Whatever advances can be associated with Western domination outside Europe, they came at the high price of giving their foreign subjects a lingering and debilitating sense of inferiority.

In the twentieth century, Hannah Arendt put her finger on the problem: Outside their own boundaries, Europeans were willing to engage in practices intolerable at home.
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Europeans weren’t more violent than their contemporaries around the world, but they could, as others could not, inflict death and destruction on a grander scale. The capitalist motor, acquiring more horsepower with every decade, drove Europeans to easy conquests. Contempt for those with different faces immured in strange customs eased the consciences of these carriers of civilization, as it had slavery among white Americans. One might say in retrospect that capitalism acquired a sinister patina when governments took the initiative away from the private investors who had been running the capitalist show.

Defenders of capitalism are wont to tout their positive features while drowning accounts of their abuses in a pool of references to the human capacity to do wrong. That capacity for violence is certainly pervasive. Jared Diamond gives us a particularly shocking example of it in the case of an isolated South Sea island whose inhabitants had long fostered gentle habits. Hearing about their lack of any weapons, an expedition of Maoris, distant relatives who had been separated for centuries, sailed to the island and wiped out the community, slaughtering all the men and carrying off the women and children.
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Europeans got hoisted on their own petard by insisting on their superior virtue while pursuing ugly ends.

During the eighteenth century, a revolution in sensibilities had taken place, one that was initially directed to the evils within European societies. A new humanitarianism, based on personal empathy for other human beings, however different, had taken root. Vividly expressed in European literature, philosophy, and the arts, this humanitarianism offered Europeans a new and more benign identity.
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The father of E. I. du Pont named his son Eleuthère Irénée, which means “happiness and peace,” in celebration of the goals of the Enlightenment. Captured in the French Revolutionary slogan of “Liberty, equality, and fraternity,” this new spirit lost some of its appeal in Napoleon’s campaign to dominate Europe. Then scientific investigations in the nineteenth century, without disavowing humanitarianism, led to studies describing how and why racial differences existed. This discourse gave European empire builders some cover for their aggressive conduct.

At the popular level, two justifications were offered for European transgressions: The men and women affected were too ignorant, lazy, and superstitious to know what was happening to them, or Europeans were carriers of great gifts from their superior culture, manifested in its religion, its tools, and its wealth. As civilized nations they would bring public education, higher standards of cleanliness, better transportation, and more respectful attitudes toward women to their benighted new subjects. When reformers publicized the wide gap between projected benefits and actual accomplishments, empire building lost its luster, even though its forward moment was strong enough to cause a war that stretched like Europe’s possessions across the globe.

A New Rival in the East

Under the radar, during this period of European expansion, Japan had been undergoing a remarkable transformation, culminating when the feudal Tokugawa regime gave way to the Meiji Restoration in 1867. For reasons that remain obscure, in 1637 the third shogun of the ruling Tokugawa line in Japan had issued a “closing of the country” decree.
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He was probably reacting defensively to the presence of Spain, Portugal, the Netherlands, France, and England in the Indian and Pacific oceans. This self-denying ordinance certainly accords well with the xenophobic attitude in the Japanese national spirit, but it rankled Westerners, who were used to going where they wanted. Western impatience with countries that preferred not to join a trading system stacked against them became marked as imperialism swept up European leaders. A British fleet bombarded Kagoshima in 1863 in order to gain access to the southern Japanese area of Satsuma. The bombardment destroyed one-third of the city.

Two dramatic events led Japan to reverse course: the arrival of an American fleet demanding that Japan join the informal world trade system and a more or less peaceful coup d’etat, the first in 1853; the second in 1869. The American appetite for trade throughout the Pacific had been whetted by the acquisition of California ports in the Mexican-American War, which ended in 1848. Japan appeared to Americans as an oyster that just needed a little pressure to reveal its pearls. They sent Commodore Matthew Perry with a fleet across the Pacific to pry it open. Perry was the right man for the job. He studied his subject well and arrived with an impressive combination of modern weaponry and the elaborate trappings of ceremony. His heavily armored steamboats were meant to impress the Japanese with Western technology, as the imposing black line in the harbor of Toyko most certainly did.

Perry would deal only with the highest authority and demonstrated his readiness to fight by repelling any Japanese who attempted to board one of his ships. He also had patience, giving the Japanese half a year to make up their minds. It proved enough time for them to realize that the only way they could create the strength to repel outside influence would be to tap into the modern power of foreigners. After fifteen months of tense negotiations, underlined with threats to use force, Perry succeeded in gaining a treaty and wounding Japanese pride.

While these so-called openings were battering Japan, a reforming wing of the samurai, the traditional aristocracy, which composed about 7 percent of the Japanese population, orchestrated a reshuffling of noble and imperial power. The leaders of the Meiji Restoration, named after the young emperor, were opportunistic enough to borrow every Western idea that might turn Japan into a modern nation. Unhappy with the commercial treaties that had been foisted upon their country, they strengthened distinctive Japanese institutions like the Shinto belief in the emperor’s divinity. A shared religion became important as a unifying force. Schools and the army also helped instill loyalty and a strong sense of civic duty among the Japanese. Perhaps even more important, Meiji reformers replaced the old classical, moral, and Confucian education with a more scientific and technical one. In an interesting paradox, if not contradiction, Meiji leaders wanted both to preserve what made Japan unique and to prepare their people to enter a multinational, modern world.