4.1 – Monopolist Merchant Capitalism

The oldest domain of capital is trade. From archaeological evidence, we know that the city of Uruk was the center of a well-established trade network around 4,000 to 3,000 BCE. We also know that the Assyrian, established trade colonies from Anatolia all the way to India, and that the Phoenicians were the first people who had the ability to establish trade colonies throughout the Mediterranean. The expansion of the Persian Empire and the safety it offered led to the most widespread globalization in terms of trade. During the Greco-Roman civilization trade maintained its effectiveness. Without trade, big cities cannot sustain themselves and big cities means large scale trade. The Islamic civilization, which was the global power during the Middle Ages, is the last major stage in the development of Western trade. Almost all of the required traditions for trade were formed. Money, credit, banks, bonds, markets, and other elements such as transportation constituted the most important sectors within Islamic civilization. The Italian trade cities essentially took over the traditions of the eastern Mediterranean, Islamic, and Byzantine trade.

In the thirteenth century, the supremacy in trade shifted to the European continent via Italy. The Italian trade cities maintained their superiority between the thirteenth and sixteenth centuries, but this superiority was passed on to the city monopolies of the Netherlands and England at the onset of sixteenth century. The triumph of merchant capitalism was mainly achieved via the capital cities of these two countries, namely London and Amsterdam. The discovery and incorporation of the Americas and Southeast Asia into trade routes via the Atlantic and the Cape of Good Hope constitutes one of the biggest commercial revolutions. The Middle East’s control over the traditional East-West and North-South trade routes received a serious blow and lost its previous significance. The fact that the Middle Eastern civilization entered into a process of continuous regression with the onset of the sixteenth century was closely related to these newly opened trade routes. The Industrial Revolution, however, dealt the Middle East civilization the most strategic blow; it has not, to date, caught the opportunity and found the strength to recover.

The first big capital accumulation of Europe played a leading role between the fifteenth and the eighteenth centuries. It established its first hegemony over the urban craftsmanship and agriculture that had been on the rise since the tenth century. The monopolization and expansion of manufacture, which was the first serious industrial action, as well as its growth in volume, were all formed in close connection with the commercial monopoly’s hegemony. The Netherlands and England maintained their leadership positions with their various East and West India Companies, the biggest trade firms at the time, for centuries. Banks, bonds, credit, paper money, accountancy, and their organization of affairs, all became strong institutions during this time, as the most effective tools of capital.

We witness yet again that there was a strong unity between private trade monopolies and state monopolies. Without the existence of the state as a monopoly, trade monopolies would not be able to exist on their own. From the first trade age until the European trade age, state monopolism was always the pioneer. Liberalism cannot exist against the will of state: the contrary is nothing but nonsense. Liberalism’s true purpose is to ensure that the state is totally at the service economic monopolism and to turn the political state into an economic state. Liberalism without a state is like an abandoned garden. At the time trade had a significant weight over the state, or rather the state’s relations with trade monopolism have had more significance.

And so the period between the fifteenth and eighteenth centuries is also called the mercantilist period. Essentially, it is the recovery of the state through trade. We may also call it commercial nationalism. (The most effective way of becoming a superior state is for the state to sell more than it buys!) This was also the period where the national state and monarchy were on the rise, when, on the social level. the aristocracy turned to trade and became intertwined with the merchant’s entrance into a process of aristocritization, and the new modern class or bourgeoisie became firmly established. Radical reforms took place in many areas: from the bourgeois ideology, lifestyle, and sense of fashion to urban architecture.

This was also the Age of Reformation and Enlightenment. It would be a grave mistake to regard the Reformation and the Enlightenment as bourgeois movements. The Reformation had no causal connection to the bourgeoisie: it was essentially the nationalization of religion and the opening of its national branches. Under the new conditions of the time it aimed to renew religious thought which had been inundated with obsolete dogmas. It was the movement that adapted religion to keep up with the times. It, too, was part of the revolution of thought. The Enlightenment was an even more comprehensive thought revolution. It was to a great extent the surpassing of the old paradigms of thought and the establishment of a new paradigm. It was a renewal in the ways of thinking in all respects. The developments in these two important areas are also closely related to the scientific and philosophical revolutions. It is mere coincidence that they occurred during the commercial era. However, because of the bourgeoisie’s class characteristics it appropriated them. It turned these two areas into its intellectual capital. Such a move was very important because in return it attained, as a class, the title of legitimacy. The thinkers of the Enlightenment played an important role in obfuscating the fact that monopolism is at least as parasitical as aristocracy and absolutism. Because the bourgeoisie constituted a new class formation its consequences were not thought through, and all the problems were attributed to the old classes. The bourgeoisie has played an important role in the qualities of middle class, making their mark on the era.

The reason for the bourgeoisie’s support for nationalism as an ideology is to establish its monopoly over the national market. Nationalism was very effective in eliminating its rivals. The exclusion of commercial capital owners from other nations and nationalities fueled the reciprocal development of nationalism and became the basis for all sorts of racism, as well as for national, ethnic, and religious animosity. The Jews became the most significant obstacle to this growing malice and national ambitions. This was the reason behind the world-wide rise in hatred for Judaism. To counter this, some Jews turned to Freemasonry in order to build some kind of international defense, strengthen their friends, and eliminate their enemies. Although Freemasonry has its roots in the Middle Ages, its role became important in this period. It has had an important contribution in several revolutionary movements.

Considering how colonialism was closely linked to trade ever since its birth, the advance of colonialism during the period of mercantilism was to be expected. In this period, exploitation through colonies appears in the form of classical colonialism. Two continents, America and Australia, together with thousands of small islands were colonized for the first time during this period. All the continents of the world, especially Africa and Asia, were rediscovered in order to be colonized. To this end, the disciplines of orientalism and anthropology were instituted-a good example of the relation between science and the new society. Superior race theories, too, had the opportunity to develop during this period. There were even attempts to apply Darwinism to the society. To this end, geographic and historical work was taken up under the new paradigm. It is as if exploratory work for opening the world up to capitalism was undertaken. Colonization or colonialism, which has more systematic consequences, is essentially the expansionist policies of the trade monopolies, but it has more systematic consequences. They are a more modern form of plunder. Europe’s merchant capitalism has mostly been established on the basis of colonial plunder. The plunder of American silver and gold was achieved by the selling of cheap fabrics at extraordinary prices. Trade not only went through periods of unstable price formation, but also periods where prices were determined unilaterally. Colonization played a dominant role in trade monopolies imposing their own prices and in taking exorbitant gains. In any case, behind the merchant’s gains lies the utilization of price differences at different markets, or in fact forcing a difference in price through methods like the stocking of goods or creating scarcity. Pernand Braudel says that the speculative movements of large trade play a decisive role in the formation of capitalism. He adds that ordinary exchanges in the market do not have a role in this and that they are normal economic activities. The production of goods for use cannot be considered economy either. When the threshold of the exchange period is reached, economy has begun. At this point we cannot really talk about profits, only of gains in exchanging. There can be no speculation here.

The real speculating is done in the area of large trade. Differences in price can be attained by directly fluctuating prices. Large trade is defined as the home of capitalism. Hence, Braudel does not consider this to be economy but sees it as a thing that is imposed from the outside and it is as if he does not want to expose it. He does not really define much after this point, leaving us puzzled as to why.

Braudel is well-aware of the difference between state and power. Although he does not accord the same degree of insignificance to the function of state and power as Marx does, he also does not determine the true degree of their effectiveness. When state is defined in Marxism as “personification of the economy,” it comes closer to the truth than any other definition.‘ But it is a very abstract generalization. Power and state are in fact economy which is not economy. That is, state and power view economy as an area where the produced surplus product and values can be squeezed out, and where they establish their monopoly. In this sense, they are in the area just above economy. They are very much interested in economy. All their mechanisms are to ensure that the surplus product and values are seized by various methods. Agriculture, trade, and industry are the main areas in which the state establishes its monopoly. Its main method is taxation. For example, indirect taxes are the state’s link to acting as a direct merchant monopoly. Here the state acts purely as a merchant: it is not just the merchant’s personified expression but the merchant itself. The contributions made by the taxes constitute more than half the state’s revenue.

The state is also a total economic monopoly because it determines the agricultural markets and prices. In the European economic literature, the relationship between economy/state and power is always ambiguous. Although both the socialists and liberals have published thousands of books on this issue it has still not been clarified. Marx’s neglect to deal with this area is a severe short-coming (or maybe he did not live long enough to work on this) and has contributed to this great confusion.

No matter how we look at it, we have to admit that the fundamental role played by noneconomic mechanisms led to the victory of the age of trade between fifteenth and eighteenth centuries. Thus, if these mechanisms are not economy what are they? In general, it is very difficult (though not impossible) for any force other than the ruling power or state, as its legal expression, to use this non-economic area as they wish. It may be possible to mention various cliques of monopolist forces but these forces must have some kind of relationship with either the ruling power or the state as its concrete expression. This area may at times also be called the monetary area. When money is no longer a mere medium of exchange, it can be at least as powerful as the sword. It was not in vain that Napoleon talked about money when it came to discussion on the army. But what money is this? It is certainly not the money that is the medium of exchange, but the money that is not economy. It is the large trade money and the money that is the medium of speculation. Money becomes the absolute commander in these areas. It is the ruler. The bourgeoisie has grasped this reality quite well and this is the reason why it has assigned such a major role to money. To ensure that money is the continuous commanding power of society, society has been shattered to pieces. Society, and even the state, has been maneuvered into a situation where it cannot continue living without money.

The fact that money has attained such a position may be considered the real revolution of the bourgeoisie. A society and state that are dependent on money are a society and state under the command of the bourgeoisie. Such a state of affairs, which we may call the monetary revolution, has been comprehensively attained for the very first time in history during this period in Europe. No longer is there a need to treat a worker as a slave or a serf because if he does not receive his wages then he will starve. Hunger condemns him to money. The worker has been put into such a position that he has no way out but to surrender to money. Therefore, there is no longer a need to be a classical slave owner or feudal landlord in order to acquire and manage the worker. This will only require more responsibility and will be more expensive. The capitalist, on the other hand, acquires and uses the worker as it wishes by just showing the power of money.

Similar issues can be raised in the case of commodities. Commodities, as goods, have been reduced to a position where they cannot move without the assistance of money. All movements of commodities are linked to money. It is not possible to produce, transport, or consume them without money. And this is also capitalism’s biggest revolution to put the economy under the absolute command of money. Economy is now a toy in the hands of money. In no other era has economy been dependent on money to this extent. Money is now like a state. Indeed, it is the state! Even the state itself is dependent on money in the same manner. A moneyless state or worker has been moved into the category of a good. It may sound paradoxical, but the state of the state is money. This new position of state is the sixteenth century invention of the Netherlands and England. A powerful state has been created. But it is a state that has been made dependent on money. Historians say that because France could not acquire this success it lost the hegemonic war against England and the Netherlands.

A comprehensive discussion of the effects of the trade bourgeoisie’s appearance in society is called for, as this group is the most important actor in civilizational development between the fifteenth and eighteenth centuries. The characteristics of the commercial society are clear. Their place in society’s memory is quite negative: they are excessively fond of money, obtain excessive interest rates, and are loan sharks and bankers. Art, especially literature, mentions the great blow to morality dealt by these elements. It is as if a virus has infected society. It eats into society. Money, which is held responsible for the general degeneration of society, freezes the old affectionate and humane relations in its cold face. Those without money are seen as having lost the struggle for survival. Furthermore. there is no longer a need for golden crowns, silver plates, palaces, magnificence, a show of brute force, fabulous costumes, and luxurious meals. You only need a place to hide your money. You are now the greatest. This position reached by humanity cannot be regarded as ascension. Although it is called the new or modern era, there is nothing new about it. But it may be the beginning of the civilizational crisis. For anyone who has not lost its respect for society there can be no situation that is more critical and derogatory.

The commercial capital does not seem to be willing to do anything in other areas during this period. The profit rates offered in these other areas do not seem to satisfy it. They cannot match the profit made in large trade. The areas of agriculture and manufacture are sectors that are turned to only when they offer profits close to that of large trade. They have therefore had limited opportunity for development.

In terms of political history, this period saw great upheavals. Spain, France, and Austria competed intensely to become the inheritor of the Western Roman Empire. However, their imperial inclinations inevitably caused them to lose. The relationship between money and state played an important role in this: the commanding power of large trade money led to the hegemony of the Netherlands and England, one after another. As they strengthened their states with merchant credit, they forced the states to act as merchants as well. Here we are talking about the emergence of a state and politics that make profit. They proved the commanding power of money as they developed new armies and fleets.

The triumph of capitalism in its economy is its attainment of cheap production. Cheap production means the superiority of trade. This in turn means the loss of their rivals (states which are brought to their knees) in the international arena. And, in fact, these states mostly lost in the military arena as well. The conspiracy-like revolutionary interventions of the Netherlands and England proved their political superiority, too. Their superiority in all these areas over their rivals inevitably led to their hegemonic superiority. This superiority had previously already been proven as Spanish and Portuguese colonies changed hands, and similar situations took place in Asia and Africa, resulting in commercial superiority. The alliances secured on the European continent meant that France was neutralized, Austria’s aspirations to establish a German Empire were destroyed, and the Russian Czar could be used as they pleased. They also succeeded in the semi-colonization of the Ottoman Empire, one of the strongest empires at the time. Just like the other dynastical empires, the Ottoman Empire also came to the end of its term in the face of the capitalist production and state forms. The fate awaiting the Chinese and Indian Empires were full and semi-colonization. The elimination of old civilizations was rapid. What was new? Everything in relation to progress without actually knowing what they are. As with all new religions having faith was most important. Their religion was trade and their god money.