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Eurocentrism and the origins of capitalism
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Eurocentrism and the Origins of Capitalism

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Review 36.1 – CR
Tuesday, September 20, 2016 / 3:50 PM
Editor: Amy Keough
Eurocentrism and the Origins of Capitalism∗
Kristin Plys
M ost narratives of the “Rise of the West” tell a story which places
Europe at the center of world history. Modernity then, is
characterized by this reorientation of the past leading up to moder-
nity; a reorienting favorable to Europe. But a critique of Eurocen-
trism is itself only possible through the conceptual apparatus of
European thought. Only at this world-historical conjuncture in
which we appear to be transitioning from modernity, does Europe-
an thought begin to provide us with the perspective from which to
critique a Eurocentric narrative of early modern history. So then,
when it comes to describing the origins of the capitalist world-
system, how does one present a non-Eurocentric narrative, especial-
ly when much of the existing scholarship contends that capitalism
has its origins in Europe?
The current structures of the capitalist world-economy are
shaped by their historical trajectory. By going back to capitalism’s
systemic origins, one can investigate how power and history shape
the capitalist world-system, and better understand what propels the
system through time and space. Historical social scientists in the
Marxist tradition have looked to changes in the mode of production
from feudalism to capitalism in order to examine the origins of the
modern economy (Anderson 1978, 1996; Aston and Philpin 1985;
Sweezy 1976). Instead, we should replace the concept of “modes of
production” with a concept of the reorientation of power from Asia
to Europe. Modes of production capture a European dynamic with
all of its accompanying baggage: the transition from feudalism to
capitalism as a process internal to Europe. Given the insights of the
great divergence literature (Parthasarathi 2011; Pomerantz 2003;
Rosenthal and Wong 2011; Wong 1997), the shift of greater world-
∗ Thanks to the participants of the Economic History Lunch at Yale University

and the Transitions to Modernity Conference at the École des Hautes Études en
Sciences Sociales for their comments.
REVIEW, XXXVI, 1, 2013, 41–81 41
Review 36.1 – CR
Editor: Amy Keough
42 Kristin Plys
historical significance was the shift of power within the world econ-
omy from Asia to Europe. Furthermore, if one takes a macrohistori-
cal perspective, then the development of capitalism cannot possibly
be seen from any one region but can only be a consequence of the
interaction of multiple regions. Therefore, the key question of the
early modern period is not why was there a transition from feudal-
ism to capitalism in Europe, but instead, “why money capital accu-
mulated more rapidly and massively in the European than in the
East Asian core regions even when China was the ultimate sink of
world money” (Arrighi, Hui, Hung and Selden: 263). This article
presents an alternate, modified world-systems perspective that en-
gages with the notion of Eurocentrism in order to examine how dif-
ferent spaces of power through time and space shaped the creation
of the capitalist world-system.
The goal of world-systems analysis is to provide historicized de-
scriptions of global capitalism and to produce critical knowledge to
assist popular struggles against global capital. But nonetheless clas-
sical world-systems analysis, like most of traditional western scholar-
ship, tells a story in which Europe is at the center of world history.
However, there are world-systems analysts addressing this important
concern (Abu-Lughod 1989; Amin 2011a, 2011b; Chase-Dunn and
Hall 1997; Chaudhury and Morineau 1999; Ikeda 1996; Meilants
2007; Palat 2010). The most controversial work in the world-systems
tradition that endeavors to present a non-Eurocentric explanation
of the origins of capitalism remains Andre Gunder Frank’s ReOrient
(1998).
In this work, Frank argues that the world-system centered
around China, was the center of the precapitalist world system, and
that it will be the center of a postcapitalist world system. 1 Because of
1 It should be noted that Frank uses the term “world system” and not “world-
system” to explain his unit of analysis from 1500 to the present. In world-systems
analysis, a world-economy is an economy that is a world unto itself, whereas the
world economy is the economy that comprises the entire globe. In the contemporary
period, these are one and the same, but this is not the case throughout history.
These terms were first used by Fernand Braudel, whose terms economie-monde and
economie mondiale have been translated as “world-economy” and “world economy”
respectively. “World system” then, following Braudel, is a global system, whereas
“world-system” or “world-systems” refers to a system or several systems that are sepa-
rate economic, political, and social units unto themselves either in space or time. By
using the terms “world economy,” and “world system,” Frank is tacitly arguing that
Review 36.1 – CR
Editor: Amy Keough
EUROCENTRISM AND THE ORIGINS OF CAPITALISM 43
the role of social theory in constructing and disseminating this myth

of Europe as uniquely having immanent virtues, he eschews most
social theory, as it is all guilty of a similar form of Eurocentrism
grounded in a history invented by Europeans in the nineteenth
century in the context of European colonialism in Asia (Frank 1998:
14). Alternatively, Frank proposes a story in which, “the West first
bought itself a third-class seat on the Asian economic train, then
leased a whole railway carriage, and only in the nineteenth century
managed to displace Asians from the locomotive” (1998: 37). World-
systems scholars claim that to take a European-centered approached
is not Eurocentric given that capitalism originated in Europe (Amin
1989; Arrighi 1994). Frank claims that on the contrary, one cannot
see the origins of capitalism from Europe (Frank 1998: 48). For
Frank, capitalism originated in Asia. He claims that it is Eurocentric
to posit that Asia was incorporated into the European world-system,
but instead, he argues that Europe hijacked the Asian world-systems
(which seems contradictory given Frank’s claim that the entirety of
the globe was always one world system). In Frank’s reorientation of
the world-systems literature, there existed a single world system
based in Afro-Eurasia from 1500 onwards (1998: 52). Europe sought
inclusion into this world system based in Asia, and Asia maintained
its economic dominance over the system until about 1800 (1998:
53). Europeans were able to take advantage of political and eco-
nomic decline in India, and assumed control of Indian shipping
routes (1998: 271). Other regions connected to India through trade
routes, including the Ottoman, Safavid, and Ming Empires, soon
followed suit as crisis reverberated throughout Asia. Frank argues
that decline in Asia preceded Europe’s rise, and furthermore, that
Asian decline was independent of any sort of European influence.
Asia’s decline was a direct result of Asia’s own successes. But as a
result, Frank claims, Europe soon controlled most of the trade
routes and thus was able to employ American silver in order to take
advantage of a moment of economic and political crisis in the world
system.
In proposing this alternate analytic framework, Frank oversim-
plifies the complexity of the world economy and negates the exist-
ence of any social relations of production, particularly the capitalist
the world has always consisted of a single interconnected economic, social, and polit-
ical unit that encompasses the entire globe.
Review 36.1 – CR
Editor: Amy Keough
44 Kristin Plys
relations of production that form the basis of exploitation and al-

ienation within the capitalist world-system. The period from 1400–
1800 is best characterized as comprising several interconnected
world-systems, not one global system. Frank’s method of focusing
on trade must be accompanied by the theoretical distinction be-
tween modernity and premodernity along with theorizing of politi-
cal and military power in order to fully account for the many proc-
esses which led to the reorientation of the global economy from
Asia to Europe. 2 Therefore, in order to conceptualize this shift of
world power from Asia to Europe and to interrogate the role of fi-
nance capital in the construction of the early modern period, a new
way of thinking about trade in the world economy should be adopt-
ed, one that is systemic, multi-directional, related to networks and
social relations, and takes into account the synchronicity of power
within the world economy.
ReOrient and the debates surrounding its publication remain im-
portant for macrohistorically minded analysts, as these debates mark
one of the few attempts to articulate what Eurocentrism means for
structural macrohistory. An understanding of Eurocentrism as one in
which Europe is given transhistoric and invariable qualities as an ide-
ological component of capitalist expansion allows us to take up
Frank’s important project of understanding the origins of capitalism
as seen from Asia. In this, he helps overcome the problem of present-
ing a non-Eurocentric narrative of the rise of capitalism, when capi-
talism is commonly thought to have its origins in Europe. And
Frank’s project, despite its failings, is a step in the right direction if
only we know what to take from it and what to discard. So from here,
we must then reconfigure Frank’s story in light of his critics in order
to gain the leverage to ask the question: What role does Asia play in
the story of the origins of the capitalist world-system?
TERRITORIALIST WORLD-SYSTEMS EMPIRES AND

TRADE ROUTES
While Frank makes the claim that for all of human history there
was one global world economy, world-systems analysts typically sub-
2
For more critiques of ReOrient see Wallerstein 1999, Amin 1999, and Arrighi
1999, in Review 22 (3).
Review 36.1 – CR
Editor: Amy Keough
scribe to the Marxian notion of modes of production, and see a

fundamental cleavage between the capitalist world-system, which
has its origins in the sixteenth century, and preceding historical
world-systems. What distinguishes capitalism from other historical
world-systems is that capitalism deconstructs and reconstructs the
form that it takes over historical time and across geographical
space, but is unified by the logic of the endless accumulation of cap-
ital. Before the advent of capitalism, the world economy was charac-
terized mainly by a territorialist logic. The distinction between a ter-
ritorialist logic and capitalist logic is that:
Territorialist rulers identify power with the extent and pop-
ulousness of their domains, and conceive of wealth/capital
as a means or by-product of the pursuit of territorial expan-
sion. Capitalist rulers in contrast, identify power with the
extent of their command over scarce resources and consid-
er territorial acquisitions as a means and by-product of the
accumulation of capital (Arrighi 1994: 33).
Most often, the tendency to territorial expansion is derivative of a
capitalist logic. For example, it has been a puzzle to some serious
scholars why even though China was “the most developed and best
established territorialist empire,” the Ming navy led by Admiral
Cheng Ho had the technological capacity to navigate around Africa
and to Portugal, but did not do so. However, Arrighi claims that this
is a perfectly rational calculation to make within a territorialist logic.
The state- and war-making involved in securing that territory for
China was not worth the little additional power that would accrue to
the Chinese Empire. The true puzzle, according to Arrighi, is that
given that most of the world was subsumed under a territorialist log-
ic, how can one rationalize “the seemingly unbounded expansion-
ism of European states since the latter half of the fifteenth century”
(1994: 36). The Chinese territorialist Empire never suffered from
the kind of overreach that led to the decline of the great Western
powers.
Following the period from 1400–1800 there were three inter-
connected world-systems in the eastern hemisphere of the globe:
the Chinese world-system, the Indian Ocean world-system and the
European world-system. The European world-system, as shown by
Frank in ReOrient and reinforced by his critics, played a marginal
role in the world economy until about 1600 and only became the
Review 36.1 – CR
Editor: Amy Keough
46 Kristin Plys
center of the world economy after 1800. Therefore, during the pe-
riod 1400–1800, it is important to ground one’s understanding of
European development in the centers of world power in the Indian
Ocean world-system and the Chinese world-system. These systems
were not based on the logic of the endless accumulation of capital,
as is the case for the capitalist world-system. These Asian systems
were based in a territorialist logic, in that power derived from con-
trol of land and population, not capital.
From Amin and Arrighi’s critiques of Frank’s ReOrient, we see
where to look in order to see both continuities and change over
time and through space. Wallerstein, Amin, Arrighi, and Frank all
agree that trade, exchange, commercial relationships, and currency
flows are important to the formation of a world-system (Amin 1999;
Arrighi 1999; Frank 1998; Wallerstein 1999). Amin, however, points
out the distinction between the market fundamentally having to do
with exchange and the capitalist market, the distinction having to
do with the relations of production (1999). Through the market,
one sees continuities in space and time, but without examining the
relations of production in addition to the market, one potentially
misses the source of change and variation: rupture. Arrighi suggests
that Frank look to political and military power in order to see rup-
tures, since political and military power lead to the breakdowns, re-
organizations, and revitalizations of global and regional structures
(Arrighi 1999). Therefore, in order to adequately examine both
continuities and ruptures over time, one must look to trade, but
also to the synchronicities in relations of production, political pow-
er, and military power. When we consider the development of trade
and market exchange, political and military power, and the rela-
tions of production under both territorialist and capitalist logics, we
see the fundamental development of a capitalist world-system as dis-
tinct from previous world-systems.
Before the nineteenth century, the richest political entities in
the world economy were the Mughal Empire, part of the Indian
Ocean world-system, and the Ming Empire, the center of the Chi-
nese world-system. Therefore, analysis begins in China and India, in
order to take up Frank’s challenge that one cannot see capitalism
from Europe, but that instead one must view world history as a
global whole, one in which Asia is identified as the center of the
world economy (Frank 1998: 48, 51).
Review 36.1 – CR
Editor: Amy Keough
The Mughal Empire
The Mughal Empire was the main source of manufactured and

luxury goods for the Indian Ocean world-system, and as a result, the
Mughal Empire was unparalleled within that system in terms of its
vast wealth (Hodgson 1977: 90). The main exports of the Mughal
Empire in the late sixteenth century included camels, indigo, sugar,
rice, opium, Malabar pepper, and textiles (Moosvi 1987b: 382–87;
Richards 1993: 50). Textiles were the cornerstone of Mughal long-
distance trade. Cotton went from India to Kabul, the Levant, East
Africa, the Maldives, and China (Moosvi 1987b: 385–86). Silks left
India to East Africa, Persia, and Turkey (Moosvi 1987b: 387). By the
early seventeenth century, the Mughal Empire supplied the masses
across the Indian Ocean world-system with everyday clothing (Palat
et al. 1986: 174). Manufactured goods and other commodities orig-
inating from the Mughal Empire were coveted across the globe.
Across the Indian Ocean world-system, land revenue provided
power and revenue to both local and imperial-level elites. A tax
farming grant, called jagir in the Mughal Empire, timar in the Ot-
toman Empire, and iqta in the Safavid Empire, was given to military
and bureaucratic elites within the empire as a way of paying political
debts and ensuring support and cooperation with the ruling family.
A jagir holder (jagirdar) was granted the political and legal rights to
collect taxes from the peasants on a given plot of land or lands, and
was able to keep the difference between the amount he collected
from the peasants and the amount he owed the state (Lapidus: 62).
Similar tax farming systems were present across the Indian Ocean
world-system in Egypt and North Africa, South Asia, Central Asia,
and in the Safavid and Ottoman Empires. Tax farming created a
logic under which the more land an elite had at his disposal, the
more taxes he could collect and therefore, the more revenue and
power he had within Indian Ocean society.
Command over land and peasants was the principal basis of
economic power in the Mughal Empire (Ali 2006: 16; Chaudhary
1998: 3; Moosvi 1987b: 95; Pearson 1991: 60). Those who held jagirs
were able to tax and exact tribute from peasants, and their power
was directly related to their control of territory. Bankers and finan-
cial speculators invested in jagirs and made sizable fortunes from
these investments (Chaudhary 1998: 3). Taxes were most often col-
Review 36.1 – CR
Editor: Amy Keough
48 Kristin Plys
lected by agents of a jagirdar who had been granted rights to tax col-
lection by the Emperor for a given plot or plots of land that were
not necessarily contiguous (Richard 1993: 67). Jagirdari came from
the mansabdar class, which comprised nobles who were given a rank
of 500 zat or above by the emperor (Lapidus 2002: 369; Moosvi
1987b: 174; Richards 1993: 63). 3 After the mansabdar class took its
share of the land surplus, the Mughal administration was left with
about 60% of land revenues. The Empire then paid noblemen
(amirs), and furnished the central military (Lapidus 2002: 371;
Moosvi 1987b: 193; Pearson 1991: 60). Collecting taxes was one of
the central functions of the Mughal bureaucracy, and therefore, the
organization of the bureaucracy was developed with the goal of col-
lecting taxes and directing most of them to the treasury (Hodgson
1977: 64; Richards 1993: 68). The Mughal state relied on this cen-
tralized bureaucracy to integrate the empire (Richards 1993: 58).
Both diplomacy and military force facilitated the enforcement of
laws and expansion of empire (Hodgson 1977: 63).
In fact, the military was essential to the Mughal Empire. The
Mughal military was crucial in keeping caravan trade open and free
of banditry, thus maintaining the availability of Mughal manufac-
tured goods and other commodities for the rest of the world econ-
omy (Richards 1993: 50–51). Furthermore, the military was critical
to reproduction of the empire, and likewise, the bureaucracy and
tax farming system was key in reproducing the military (Ali 2006:
16; Chaudhary 1998: 52). Because the Mughals had control of a
large amount of territory, maintained a wide-reaching tax system,
gained a great deal of revenue from plunder from military victories,
and had an elaborate division of labor, they were able to translate
that resulting stable supply of revenue into a large, strong imperial
army. In fact, Mughal military conquest paid for itself through
plunder of the defeated (Richards 1993: 185). Unlike European
rulers, Mughal emperors did not rely on loans from financiers to
pay for either routine war making or expensive military campaigns
(Richards 1993: 185). Military expenditures were paid in cash di-
rectly from funds from the central treasury (Palat 2010: 45; Palat
3
A mansabdar’s rank, measured in units called zat, was determined by his socio-
cultural status, his income, and the size and cost of his cavalry (sawar). A mansabdar’s
rank was personally reviewed by the emperor and no one else (Moosvi 1987b: 202;
Richards 1993: 65; Sandhu 2003: 575).
Review 36.1 – CR
Editor: Amy Keough
and Wallerstein 1999: 23). About 10% of the central treasury was
spent each year on the maintenance of the military, 5% was spent
on imperial household expenses, and 50% was spent supporting the
mansabdar class (Moosvi 1987b: 247; Richards 1993: 75). This left a
sizeable surplus that averaged about four to five million rupees an-
nually (Richards 1993: 75).
However, a world-system is much more than trade networks and
political and military structures. A world-system’s defining feature is
“a hierarchical division of labour within an interstate system” (Palat
et al. 1986: 174). In the Indian Ocean world-system, this hierar-
chical division of labor within an interstate system was structured by
the importance of agriculture for sustaining everyday life and by the
land tax system found in state formations across the system. The
main class cleavage in the Mughal Empire, according to Irfan
Habib, was based on the tax farming system. The emperor would
assign a jagir to military officers, bureaucrats, and nobles in lieu of a
salary. The jagir allowed these classes to collect land revenue in the
form of cash via grain and other agricultural transfers from the
countryside to the cities through market mechanism and commerce
(Habib 1995: 238). In 1580, the jagir system underwent a major re-
structuring, during which the central treasury briefly administered
all lands directly. Under the new zabt system, Imperial officers sent
surveyors to measure areas under cultivation, and then used crop
yields to calculate revenue demand. Tax collectors and the revenue
ministry recorded this information and used this data series to peri-
odically update the revenue assessment (Richards 1993: 85). Under
the zabt system, zamindari (local village chiefs), collected taxes that
were surveyed and assessed by the village chaudhuri (Richards 1993:
189). After five years of experimenting with this alternate system,
Emperor Akbar reintroduced the jagir system, which then benefit-
ted from having a more accurate base assessment. But the zabt sys-
tem remained in place alongside the jagir system. The zabt system
helped to restore rural aristocracy and transform the village “from a
miniature tributary kingdom to a petty revenue and administrative
unit existing at the convenience of the Mughal Empire,” while also
limiting the power of zamindari to make war and expand their vil-
lages (Richards 1993: 87, 192).
There was also stratification within the peasant classes with
muqaddams managing other peasants and paying them in cash or in
Review 36.1 – CR
Editor: Amy Keough
50 Kristin Plys
kind, and using menial caste peasants as a reserve army of labor

called upon at harvest times to plough, sow, reap, and draw water
from wells (Chaudhary 1998: 46, 50). Artisans were not exempt
from taxes, and so, the military and bureaucratic class would em-
ploy their jagir to compel artisans to work for low rates. Merchants
and bankers also benefitted from the tax farming system because
commerce and credit flourished as a result of the transfer of agri-
cultural products from the countryside to the cities. However, mer-
chants and bankers had little opportunity for social mobility in
Mughal society, and therefore, Habib hypothesizes, there was po-
tential for class tension between the merchant class and political
elites (Habib 1995: 239). 4
The Ming Empire
During the Ming Period (1368–1644), China was clearly a

hegemon in East Asia in a way no European power has ever been
hegemon of the capitalist world-system (Amin 2011b: 48; Arrighi,
Hui, Hung and Selden 2003: 262). China’s power was felt far be-
yond its borders. By the late fifteenth century, China had estab-
lished itself as “the greatest economic power on earth” (Twitchett
and Mote 1998: 378). Its agricultural and industrial production,
4
These class tensions engendered conflict. There were three common peasant
responses to Mughal oppression. First, menial caste peasants frequently fled villages
illegally in order to seek better working conditions and tax arrangements. There is
even record of entire villages of menial caste peasants fleeing at once as an act of
collective resistance, which happened more frequently on the borders of the empire
as peasants could more easily seek better working terms from autonomous chiefs.
Mughal leaders would then respond with military expeditions to forcibly bring peas-
ants back into the empire (Chaudhary 1998: 3, 49; Habib 1995: 241). Secondly,
peasants would default on their taxes as an act of resistance against the empire, and
the empire would commonly respond by either enslaving or slaughtering the offend-
ing peasant along with his wife, children, and livestock (if he had any) or forcing the
peasant to sell his wife and/or children in order to pay his debts (Chaudhary: 52;
Habib 1995: 242). Finally, armed resistance combined with the previous two forms of
resistance was “a routine matter” (Habib 1995: 242). Peasants would take to the jun-
gles and ravines surrounding their villages with their muskets and swords, provoking
armed confrontation with the empire. These though, were typically the better-off
peasants who could afford to own weapons (Chaudhary 1998: 52; Habib 1995: 243).
In the early 1700s, it was not uncommon for zamindari to lead armed peasant revolts
against the empire. This class alliance led to protracted revolts that unsettled Mughal
power in some regions (Richards 1993: 291).
Review 36.1 – CR
Editor: Amy Keough
along with its commerce and trade, both local and long distance,
were superior to any throughout Eurasia. China was a self-support-
ing economy, and did not need long distance trade in order to
meet the needs of its inhabitants. However, trade was beneficial in
providing for the wealth of a few individuals and in building and
maintaining the bureaucracy. China’s bureaucracy was truly impres-
sive. It penetrated deep into society and was self-defining, self-regu-
lating, and sustained a professional meritocratic and technical
bureaucratic class. Gender and the division of labor stratified Chi-
nese society, and peasant resistance was a common occurrence, es-
pecially in the seventeenth century. The military also played a key
role in promoting Chinese interests in East Asia and beyond, there-
by securing its dominant position within its world-system.
Chinese economic contact with the world outside of China dra-
matically increased in the thirteenth and fourteenth centuries. This
flourishing of trade, long distance and otherwise, led to not only a
growth in agricultural and industrial production, commerce and
trade never before seen in Chinese history, but also profoundly af-
fected economic development across Eurasia (Twitchett and Mote
1998: 376). The Chinese economy did not rely on borrowing from
merchants. Agricultural revenues were more important to the Chi-
nese economy than commerce (Wong 1997: 133). Chinese manu-
factured goods were seen as the highest quality goods in the world
and were greatly coveted across the eastern hemisphere (Twitchett
and Mote 1998: 379). Goods, textiles in particular, were produced
mainly for exchange rather than for Chinese household consump-
tion (Brook 1998: 113). Before the nineteenth century, the size and
density of China’s market surpassed any in Europe because of the
extent of commercialization, agricultural activity, manufacturing,
and China’s higher per capita incomes compared to Europe
(Arrighi, Hui, Hung and Selden 2003: 260). However, before the
sixteenth century, most of the East Asian economy remained a
copper-based economy and not one based on silver, which was rare
in China. Silver then, because of its rarity and use in neighboring
world-systems, provided the impetus for Chinese engagement in
long distance trade (Brook 1998: 112). The Chinese imperial state
did not actively promote long distance trade, but saw it as a way for
the empire to take a cut of the spoils of “barbarians” living on the
borders of the empire. Long distance trade brought in customs rev-
Review 36.1 – CR
Editor: Amy Keough
52 Kristin Plys
enues that were able to sustain the imperial bureaucracy (Pearson

1991: 102–03).
The Ming state was “the most secure and unchallengeable ruling
house that the Chinese had known” (Twitchett and Mote 1998: 9).
It was administered by an unprecedentedly large civil service that
was self-defining, self-regulating, and deeply integrated with society
(Twitchett and Mote 1998: 29). The civil service was a highly differ-
entiated bureaucracy comprising 159 prefectures (fu), 240 sub-
prefectures (chou), and 1144 counties (hsien). On average, a prefec-
ture would contain about 600,000 people and 10,000 square miles
of territory (Twitchett and Mote 1998: 15). The principal goal of
the Ming state was to reproduce and transform agrarian society and
to maintain social control (Wong 1997: 88). Because the state’s
main source of revenue was from land taxes, a key component of
maintaining agrarian society and social order was to collect taxes
(Wong 1997: 90). The imperial bureaucracy was initially put in
place to organize and mobilize tax payments from peasants to cen-
tral government coffers (Wong 1997: 131). In the fourteenth and
fifteenth centuries most tax payments were made in kind or in labor
hours, but by the sixteenth century, payments were increasingly
made in silver (Wong 1997: 132).
The civil service, and not the nobility or members of the royal
court, was the main instrument through which Ming Emperors ad-
ministered empire (Twitchett and Mote 1998: 29). The Ming bu-
reaucratic class was much more integrated into society and more
powerful than imperial bureaucracies within the Indian Ocean
world-system (Pearson 1991: 66). Before 1440, the civil service
would have recruiters scour the empire for “intelligent and upright,
worthy and straightforward, filial and incorruptible, Confucian
scholars” to fill the ranks of the imperial bureaucracy (Twitchett
and Mote 1998: 30). This recruitment system served to create an
imperial bureaucracy with strong meritocratic and technocratic
norms. Ming bureaucrats tended to be extremely dedicated to the
state, were able to “solve difficult problems in sensible ways,” and
were constantly improving the institutions of the state and the mili-
tary (Twitchett and Mote 1998: 103). However, there was little state
involvement in financial markets. Most state involvement was simply
regulatory in nature. Bureaucrats would set a ceiling on the amount
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Editor: Amy Keough
of interest that could be charged by moneylenders, but otherwise

made few interventions into credit markets (Wong 1997: 133).
While the bureaucratic class maintained social cohesion within
the borders of the empire, the Chinese military served to strength-
en the cohesiveness of the Chinese world-system. The Ming Empire
in its many incarnations was more penetrative than the Mughal
Empire (Pearson 1991: 68). Naval voyages across Southeast Asia and
into the Indian Ocean served to strengthen political and trade rela-
tions between China and its peripheries by asserting Chinese suze-
rainty and tributary-trade relations in Southeast Asia (Arrighi, Hui,
Hung and Selden 2003: 272). Ming Admiral Cheng Ho made seven
expeditions around the South China Sea and as far as the Persian
Gulf, the west coast of India, and East Africa (Twitchett and Mote
1998: 320). While the extent to which these expeditions made a last-
ing impact on Chinese economic or political influence in the East
Asian world-system is debated among historians, at the very least,
these expeditions displayed China’s wealth and power across the
region.
China opted for a soft approach to military power, compared to
expressions of military power seen in the European and Indian
Ocean world-systems. China operated more on the threat of military
force, and was reticent to unleash its full fury. One example of Chi-
nese use of military force in the East Asian world-system is the Ming
conquest of Vietnam. Ming rulers invaded Vietnam in the early fif-
teenth century in order to incorporate it into their sphere of influ-
ence. Vietnam responded by resisting Chinese military advances
and substantiating claims that it was an empire of equal political
power to Ming China through legal documents, invasion of Cam-
bodia, and through seeking alliances with Laos. Cambodia re-
sponded by seeking Chinese military support to stave off the Viet-
namese invasion, while Laos, sympathetic to Vietnam’s plight,
decided to remain neutral in the conflict. 5 While Laos refused to
provide a base of support for Vietnamese resistance to Ming con-
quest, it still maintained diplomatic relations with Vietnam (Twitchett
5
Vietnam was successful in its military conquest of Cambodia, and the Ming
Empire was content to allow this to occur, as it was more important to the Ming Em-
pire to win the larger ideological struggle for hegemony in Southeast Asia (Twitchett
and Mote 1998: 318). From their perspective, if they could influence Vietnam while
Vietnam controlled Cambodia, then that was a suitable arrangement.
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54 Kristin Plys
and Mote 1998: 318). China made some efforts to crush Vietnamese
resistance, but the overarching military strategy was to demonstrate
China’s willingness to use force against insubordinate states in the
East Asian world-system, and also to shake up diplomatic and mili-
tary alliances in the region to divide and rule (Twitchett and Mote
1998: 319). China withdrew from Vietnam, and Vietnam remained
an independent political entity, but China nonetheless achieved its
goal of asserting its hegemonic claims to the region in disrupting
long-held political and military alliances and thereby weakening its
neighbors’ bases of power.
These expeditions across Southeast Asia became increasingly
expensive for the Ming and were discontinued after 1431. By then,
all of East Asia had granted hegemonic consent to China, and so by
the later Ming period, China did not have to back up military threat
with military force. By the mid-fifteenth century, the Ming dynasty
retreated inward and the role of the military shifted, from naval and
military expeditions across the East Asian world-system, to maintain-
ing the borders of the Chinese empire itself, particularly in the
north (Arrighi, Hui, Hung and Selden 2003: 272). Nonetheless, the
expansion of trade and Chinese migration to Southeast Asia was the
source of great profit for merchants and led to Chinese dominance
in regional trade across East Asia. Chinese merchants established
dense business, commercial, and financial networks linking the
wealthiest and most productive regions of East Asia (Arrighi, Hui,
Hung and Selden 2003: 274).
EURASIAN TRADE ROUTES
Several trade routes linked China and India to the rest of the
Chinese world-system and the Indian Ocean world-system. By the
thirteenth century, there existed three trade routes linking centers
in India and China to the westernmost points of the Indian Ocean
world-system in North Africa and western Asia: first, the northern
route from Central Asia to Constantinople, secondly, the central
route from the Indian Ocean to the Mediterranean via the Persian
Gulf, and thirdly, the southern route from the Indian Ocean to Cai-
ro via the Red Sea (Abu Lughod 1989: 137). Asians controlled all of
these routes. The northern route was controlled by the Mongols
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(Abu Lughod 1989: 143), the middle route was controlled by the
Abbasid Empire from 750–1258 C.E. until it was destroyed by mili-
tary conflict between the Crusaders and the Mongols under Hulegu
(Abu Lughod 1989: 146), and the southern route was controlled by
the Mamluk state established in Egypt in the mid-thirteenth century
(Abu Lughod 1989: 147). Since the central route was destroyed as a
result of warfare, Europeans had to obtain access to Asian commod-
ities through one of these two remaining routes. Whoever con-
trolled access to these trade routes had the upper hand over Europe
because they mediated European access to Asian goods and mar-
kets, from which most of the world’s commodities originated. Be-
cause the preferred route was the southern route that went from
the Indian Ocean to Cairo, from the thirteenth century to the six-
teenth century the power that served as an intermediary between
Europe and Asia was the Egyptian Mamluk state (Abu Lughod 1989:
149; Amin 2011b: 46). 6
In order to access key resources and the most important and
powerful world markets, Europeans needed access to Asian trade
routes, as Europe was a marginal region within the world economy.
The Italian city-states were therefore quick to establish strong trade
and diplomatic relationships with the Mamluks. Europeans guaran-
teed Mamluk access to European ports, even in the face of Chris-
tian-Muslim animosity, and supplied the Mamluks with a steady
stream of slaves from eastern Europe to man the world-renowned
Mamluk armies. However, this relationship was not without its con-
tradictions, for the Italians supported the very Mamluk state that
blocked their access to Asian trade and “exacted so high a price for
goods in transit” (Abu Lughod 1989: 149). In this example, we see
that the Egyptian Mamluk state acted as other core powers have
throughout history, exploiting the less powerful semiperiphery and
peripheral powers in order to further the existing social order that
is the basis for their relative dominance in the interstate system.
6
It is significant that this preferred trade route was a sea route. Sea travel was far
faster than land travel, and therefore, more and stronger linkages were made among
places connected by sea compared to those connected by land (Lemert et al. 2010).
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56 Kristin Plys
THE ROLE OF FINANCE CAPITAL IN

THE ITALIAN CITY-STATES
Access to Asian trade was vital to European economic develop-

ment. The development of haute finance was a strategy employed
by dominant European classes in order to raise the capital necessary
to engage fully in Asian trade given that Europe was at a great dis-
advantage as a result of its marginality within the world economy.
However, the development of haute finance in Europe is a critical
juncture in world history, not only because it helped Europe to ac-
cess Asian economies, but also because it initiated the logic of capi-
talism. This section will detail the rise of haute finance from the Eu-
ropean perspective and the different “capitalistic” processes it
engendered, such as class struggle, state making, war making, and
ideology/culture.
In Florence and Venice during the thirteenth century, gold
coinage reappeared, initiating the European economic renaissance
(Pirenne 1974: 37). The reintroduction of coinage to Europe coin-
cided with the increasing urbanization of Italian trade centers. Fif-
teen to sixteen percent of the Italian population lived in urban are-
as compared to 8% in the rest of Europe. It was the expansion of
trade and commerce that produced the economic resources needed
to sustain this large urban population (Bairoch 1988: 160). Modern
capitalist high finance similarly has its origins in Florence during
the late thirteenth and early fourteenth centuries (Arrighi 1994:
96).
Italian merchants developed double-entry bookkeeping by 1340,
invented the bill of exchange in draft form, experimented with ma-
rine insurance, created the idea of fiduciary money (since at the
time not all deposits were covered by cash in vault), and developed
a body of mercantile law (de Roover 1999: 1–2). Around 1348, just
before the Black Death, there was a financial collapse of the Floren-
tine economy, in which the three most powerful Florentine compa-
nies, Bardi, Peruzzi, and Acciaiuoli went bankrupt. These three
companies were the main support of trade in the Mediterranean,
and their collapse was most likely caused by the over-extension of
credit and extensive loans to sovereigns, especially Edward III, King
of England, and Robert, the Angevin King of Naples. Italian com-
panies made these loans to supply the courts with the funds to buy
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Editor: Amy Keough
luxury products with which the companies were dealing (de Roover
1999: 3). After the collapse of Bardi, Peruzzi, and Acciaiuoli, there
remained few financial services available in Italy. The Pope needed
to hire a banking firm and soon Alberti, a Florentine firm, stepped
up to the challenge, but this was short lived as the Alberti family
“fell into disgrace” and was sent into exile in 1382 (de Roover 1999:
3). The Medici bank took advantage of this and established a bank
in Rome to serve the Pope. In 1397, Giovanni di Bicci de’ Medici
officially established the Medici Bank headquarters in Florence, the
financial center of Europe at the time.
It was under Cosimo de’ Medici, son of Giovanni di Bicci de’
Medici, that the bank truly came into its own. During 1420–35, the
bank made a profit of 186,383 florins. A small portion, 3.1% of this
profit, came from wool manufacturing, and the other 96.9% of
profit came from finance (de Roover 1999: 55). Wool was the larg-
est industry in Florence at the time, and yet, for the Medici, manu-
facturing was insignificant compared to finance. The Medici bank
had developed branches in the Levant, England, the Low Coun-
tries, and France (Ehrenberg 1963: 194). According to Raymond de
Roover, the Medici “neglected no profit opportunities that hap-
pened to come along” (de Roover 1999: 108).
Furthermore, the Medici used their success in finance to gain
political power. 7 Richard Ehrenberg writes that while Florentine
bankers were very successful in their enterprise of earning profit,
“in the case of the Medici at any rate,” the end goal “was no longer
money, but political power” (Ehrenberg 1963: 194). By 1434, it was
difficult to distinguish between the Medici family as representatives
of the Medici bank and the Medici family as political agents of the
Florentine state (Mattingly 1970: 69). Between 1434 and 1471 the
7
Medici success in finance was also articulated culturally. While some economic
historians claim that the fiscal downfall of the Medici was their “indulgence in pomp
and display,” in fact, their profit margins were much higher because they didn’t re-
invest into the firm, but instead used their funds to patronize the arts and the state
(Arrighi 1994: 105). The channeling of these funds into art and architecture pre-
vented the Medici from over-accumulation of capital leading to risky business ven-
tures, and had the added effect of promoting Florence as a world city, attracting
foreigners to come to Florence to do business with the Medici. This “pomp and dis-
play” furthermore, in raising the aesthetic profile of Florence as a world city, provid-
ed “foreign branch managers with the valuable psychological ammunition in their
daily struggles to be accepted as equals (or as superiors) when dealing with their
aristocratic clientele” (Arrighi 1994: 105).
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58 Kristin Plys
Medici spent 663,755 florins “in patronage of the poor, of the arts
and of the state” (Arrighi 1994: 105). However, according to
Arrighi, this was money well spent as Medici political involvement
directed them away from the types of bad business deals that had
previously ruined firms like Bardi and Peruzzi. Furthermore, Medici
patronage kept capital scarce, thus keeping inter-capitalist competi-
tion under control. This also bought off the Florentine working
classes and kept several European governments reliant on the
Medici and their financial products (Arrighi 1994: 105).
The Medici kept a diversified asset portfolio (de Roover 1999:
142). In addition to shipping and supplying merchants and royal
courts, they also owned two wool factories and one silk workshop in
Florence (de Roover 1999: 167). The textile production was orga-
nized on a putting-out system in which artisans would be given ma-
terials and would work from home, bringing the product back to
the shop for wool workers to beat and then comb or card (de Roover
1999: 171). From 1402–20 one of the Medici wool shops in Florence
netted 7,046 florins in profit (de Roover 1999: 173). But again, most
Medici profit came from finance and not manufacturing.
Nonetheless, manufacturing did structure the relations of pro-
duction in Florence and its environs and affected how the capitalist
world-system is structured. Tuscan peasants bore the brunt of provi-
sioning the cities with wool and other natural resources. Henri
Pirenne describes peasants as “subjected to a tyrannical protectorate
. . . where Florence subjected to its yoke all the surrounding coun-
tryside” (1974: 211). But life for subordinate classes in the city was
also difficult. In Florence by the thirteenth century, the division be-
tween people and medieval rulers was no longer the most signifi-
cant social division. More important by that time was the division
between the popolo minuto, disenfranchised wool workers typically
from rural Tuscany or further afield, and the popolani (also called
the popolani grassi, often translated as “fat cats”), a privileged class of
citizen-merchants (Cohn 2004: 42–43). Between the thirteenth and
fifteenth centuries, social distance between the popolo minuto and
the popolani increased as a result of the polarity of dowries and an
increase in wealth of the dominant classes. Immigration that replen-
ished Florence’s workforce shifted—from mainly rural Tuscans, typ-
ically from Lucca—to Florentine reliance on long-distance immi-
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grants, a significant number of whom came from northern Europe,

particularly Germany (Cohn 1980: 101).
Immigrants found it harder to overcome both class and ethnici-
ty to become integrated into the native Florentine working classes.
Tuscan society grew increasingly stratified, with workers of German
descent at the bottom of the class hierarchy, Florentine-born male
guild members and small shopkeepers in the middle, merchants,
bankers, and small industrialists above them, and the Medici at the
top (Brucker 1968: 316; Cohn 1980: 128). This was reflected in res-
idential segregation as well. The city of Florence itself was divided
by “a class geography” with members of subordinate classes and
race-ethnicities confined in “virtual ghettos,” making social interac-
tion between members of different classes and race-ethnicities rare
(Braudel 1984: 31; Cohn 1980: 129–30).
A long history of class conflict exists in late medieval Florence as
a result of these class tensions. The first known instance of Floren-
tine rebellion against these burgeoning social relations is The Peo-
ple’s Victory Over the Aristocracy on Oct. 20, 1250. Citizens formed
an army and, using the church of San Firenze as their headquarters,
forcibly dismissed all government officials, replacing them with a
“government of the people” with new decrees and statutes, and rep-
resentatives from every neighborhood in the city (Cohn 2004: 45).
Workers’ revolts, food shortage riots, student protests, anti-war
demonstrations, and tax revolts occurred in Florence and other Ital-
ian city-states throughout the first half of the fourteenth century.
All of this social protest culminated in The Ciompi of 1378–82, a
“struggle of disenfranchised workers to obtain rights as citizens and
the creation of a new government in which nearly all males pos-
sessed virtual representation by belonging to a guild” (Cohn 2004:
202). This new government lasted for three and a half years, and
the significance of this revolt rivals that of the reign of terror during
the French Revolution (Cohn 2004: 202). Renaissance historian
Gene Brucker claims that, “the Ciompi uprising was the most signif-
icant moment in this struggle between capitalist and proletarian,
and it represented a critical stage in the development of the nascent
class struggle” (1968: 316). By this time, wool production had be-
come “capitalistic” in that large factories employing unskilled urban
laborers had replaced small craft production of woolen cloth. In the
list of condemned Ciompi insurrectionists, the most common pro-
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60 Kristin Plys
fessions were wool combers, wool skinners, and tavern keepers

(Cohn 1980: 89). This alliance between tavern keepers and un-
skilled labor shows the development of a working class culture in
Florence during the fourteenth century, but moreover, it shows the
development of a class in itself and for itself. The exploitation and
misery of wool workers increased, but so did their class-based soli-
darity (Brucker 1968: 316).
Inequality greatly increased in Florence during the fourteenth
century. The introduction of the logic of the endless accumulation
of profit coincided with the European economic renaissance, ur-
banization, and the development of modern high finance. These
processes led to the rise of an urban proletariat, the subordination
of rural areas to urban areas engaged in resource extraction and
commodity production, migration and immigration, neighborhood
segregation, social protest, and class struggle. The Italian city-states
“succeeded in establishing a system which from the very first raised
all the problems of the relations between Capital, Labour and the
State, relations which would increasingly come to be identified with
the word capitalism” (Braudel 1984: 128).
Andre Gunder Frank claims that “The class struggles between
ruling and the ruled classes have never had the motor force that
Marx attributed to them . . . indeed class struggle itself, require[s]
much more analysis as being [itself] dependent on the structure
and dynamic of the world economy and system” (1998: 43). While
Frank’s point that class struggle is not the driving force of the capi-
talist system is good, nevertheless, class struggle plays a crucial role
in structuring historical outcomes. Class struggle is notably missing
from Frank’s analysis, even though he notes that the whole of the
system, “shapes the parts and their relations to each other, which in
turn transform the whole” (1998: xxvii, 227). While class struggle is
not the motor of the capitalist system, it nonetheless has the poten-
tial to transform the system through its dialectical relationship to
the whole. Class struggle in late medieval Florence exemplifies this
type of process, one in which the system creates the conditions for
class struggle and then class struggle contributes to structuring the
historical trajectory of the system.
While the advent of finance capital and its attendant processes
created new social hierarchies, it also helped to form a sub-system of
states with centers of power in Venice, Florence, Milan, and Genoa.
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This sub-European interstate system exhibited some of the key fea-

tures of the modern capitalist interstate system of war making and
state making (Arrighi 1994: 37). As Braudel writes,
a world-economy always has an urban centre of gravity, a city,
as the logistic heart of its activity. News, merchandise, capital,
credit, people, instructions, correspondence all flow into and
out of the city. Its powerful merchants lay down the law, some-
times becoming extraordinarily wealthy (1984: 27).
In terms of the development of haute finance, Venice was behind
the Tuscan cities in banking, the formation of large firms, and the
major innovations in haute finance such as checks, holding compa-
nies, double entry bookkeeping, and maritime insurance.
Venice’s role in the construction of the capitalist world-system
was its contributions to the formation of the capitalist state (Braudel
1984: 128; Cox 1959: 90–91) Because of Venetian links to the Le-
vant, Venice’s merchant capital class required massive outlays of
capital and tried and true methods of engaging in long-distance
trade. This was accomplished through state structures that subsi-
dized trade and its instruments, and represented the merchant cap-
italist class over the interests of the laboring classes (Braudel 1984:
132–33). State power was held by a merchant oligarchy and deci-
sions of the state were made strictly according to cost-benefit anal-
yses in which profit was equated to power. In other words, state de-
cisions were made based on whether state action or inaction would
increase the profit of the merchant capitalist class, and thereby,
state power was linked to securing the basis for the accumulation of
capital (Arrighi 1994: 37; Cox 1959: 91).
Venice facilitated the profit making activities of its merchant
class by absorbing the cost of furnishing them with the accoutre-
ments of their class power. Venetian state structures were able to
absorb the cost and administrative functions of maintaining ports,
manning war vessels, providing arms to long-distance traders, and
building a navy that was a force to reckon with in the Mediterrane-
an (Arrighi 1994: 115; McNeill 1974: 63; Tilly 1992: 144–51). Ven-
ice’s relative ability to support its merchant class paid off in terms of
greater access to the eastern Mediterranean, thus helping Venice to
gain a comparative advantage in long-distance trade between Eu-
rope and Asia (Abu Lughod 1989: 128).
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62 Kristin Plys
Capital accumulation and state building are also intertwined

with war-making processes. Ravi Palat claims that the expansion of
warfare in Europe was inherently linked to finance. This is distinct
from Asian empires, particularly the Mughals, who furnished armies
not by loans, but directly from imperial treasuries. European rulers
needed stable access to abundant loans from financiers in order to
support strong, large militaries. Therefore, continued access to fi-
nancial products was crucial to military dominance in Europe (Palat
2010: 44). In the late fourteenth century, “a remarkable merger of
market and military” occurred in Western Europe (McNeil 1982:
69). Italian financiers from Venice, Genoa, Milan, and Florence,
were “the primary managers of the commercial economy of Eu-
rope” and therefore, “clerical, royal and princely administration, as
well as long-distance trade, mining, shipping, and other large-scale
forms of economic activity, all became dependent on loans from
Italian bankers” (McNeil 1982: 72). However, usury was prohibited
throughout Europe at the time, and accusations of usury by reckless
and impecunious borrowing monarchs, backed up by their military
forces, often triggered financial downturns, provoking the first
business cycles in modern European history, and also compelled
Italian financiers to set in place an institutional structure that would
protect the city-states from such attacks (McNeil 1982: 72). The
town militia, popular in the twelfth and thirteenth centuries, “began
to give way to hired bands of professional fighting men” (McNeil
1982: 73; Ertman 1997: 63). Because of the amount of wealth circu-
lating in the Italian city-states at the time, towns could tax citizens
and use the proceeds to pay the salaries of soldiers, and then by
spending their pay, soldiers put the money back into circulation,
thus intensifying the process that allowed for “commercialized
armed violence” (McNeil 1982: 74).
The Italian state system was vulnerable to two interconnected
processes of change. First, as political and diplomatic rivalries inten-
sified, they could not be confined to the Italian peninsula. Other
monarchies wanted to intervene in Italian affairs, hoping for “con-
trol of Italians’ superior wealth and skill” (McNeil 1982: 79). Sec-
ondly, commercialization of the military depended upon the com-
mercialization of weapons manufacturing and weapons supply. An
arms race broke out in the fourteenth century, and as soon as guns
became critical for war, Italian technology became outdated and
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Editor: Amy Keough
their armaments industry decayed (McNeil 1982: 81). The techno-

logical advancement of guns and gunpowder was crucial for Euro-
pean expansion into Asia and the Americas in the late fifteenth cen-
tury (McNeil 1982: 101).
GENOESE FINANCE CAPITAL AND THE SPANISH PLUNDER

OF SILVER IN THE AMERICAS
Key to the reorientation of the global economy from centers in

Asia to a center in Europe is the role of Latin American silver in in-
creasing European access to Asian trade. As European traders
flooded Asian markets with silver, rapid and severe inflation created
political, economic, and social crises, making everyday life in Asia
difficult for the average resident. The result of these crises was the
decline of Asian political, economic, and social structures. Europe-
an merchants were then able to capitalize on the weakened power
structures in Asia, securing political power to ensure their economic
dominance in Asia. The plunder of Latin American silver is contin-
gent upon the development of finance capital in the late-medieval
Italian city-states. It was the Genoese bankers who controlled Span-
ish banking and finance and provided essential support for Spain’s
fateful voyage westward to the Americas. But because Spain had
taken on so many debts to support its colonies in the Americas and
the monarchy at home—to the English crown, the Fuggers, Geno-
ese bankers, and to financiers in the United Provinces—and had to
shoulder the costs of the war in the United Provinces and the grow-
ing pains associated with rapid domestic economic growth, very lit-
tle of the plundered metals remained in and benefited Spain.
Capitalist Territorial Expansion into the Americas
To understand the Spanish plunder of the Americas, we must

begin by examining economic, political, and ideological processes
in the city-state of Genoa. “If modern high finance was a Florentine
invention, the real birthplace of modern finance capitalism in all its
forms was mid-fifteenth-century Genoa” (Arrighi 1994: 113). While
the Florentines were the most famous bankers of the time, it was the
Genoese merchant bankers of the late fourteenth century who can
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64 Kristin Plys
be singled out as “the true predecessors of Dutch and British fi-

nance capitalism” (Arrighi 1994: 109). Genoese finance was unique
compared to the other Italian city-states, owing to the Casa di San
Giorgio. Created in 1407, the Casa di San Giorgio was a private in-
stitution that controlled the public finances of the city-state (Dobb
1976: 189). This development, “was not to be paralleled in effec-
tiveness or sophistication until the Bank of England was established
almost three centuries later” (Arrighi 1994: 110). The founding of
the Casa di San Giorgio marked a takeover of the government by
moneyed interests, and marked a diversion of surplus capital to
state-making endeavors. The key rupture that Andre Gunder Frank
misses is this innovation of the Casa di San Giorgio, and similarly,
Immanuel Wallerstein does not emphasize that these innovations
occurred in Europe during the fifteenth and sixteenth centuries
because Europe wanted to gain access to superior Asian commodi-
ties and financial markets (Frank 1998; Wallerstein 1974).
The Genoese capitalists were on a divergent path from the other
Italian city-states. Venice, Florence, and Milan were developing rigid
structures of accumulation, while the Genoese developed flexible
strategies of accumulation in reaction to geographical constraints,
and as a result the Genoese urban merchant class was unable to
transform itself into an aristocracy, as the Venetian and Florentine
urban merchant classes were able to do (Arrighi 1994: 111; Braudel
1984, III: 162). Therefore, the founding of the Casa di San Giorgio
can be seen as a strategy of the urban merchant class to take and
then maintain power, given that they were constrained by the land-
ed aristocracy.
Genoa’s eventual success in finance was a result of its initial ina-
bility to secure access to a reliable trade route to Asia. In the four-
teenth century, the Italian city-states were scrambling to establish
monopoly access to the three different trade routes to Asia. The
Genoese were initially able to gain access to the central route to
China through Central Asia via Constantinople, but this was contin-
gent upon their alliances with the Mongols (Abu Lughod 1989: 128;
Arrighi 1994: 114–15). Genoa had long been dominant in the Black
Sea, so this was in some ways a natural alliance. Genoa profited
greatly from grain and slaves from the Black Sea. They brought
shiploads of grain from Crimea to Genoa, and sold slaves to Muslim
Spain and Egypt, using slaves to man their galley ships, unlike Ven-
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ice, who employed waged rowers and used them to solve labor
shortage problems on Venetian sugar plantations in the Cape Verde
Islands (Boyle 2008: 16). When Tamerlane replaced Genghis Khan
as ruler of the Mongol Empire, the resulting fragmentation left
Genoa without allies, and therefore, without access to any of the
Asian trade routes (Boyle 2008: 128). As Genoa weakened, Venice
sought greater access to the Black Sea, which led to the War of Chi-
oggia (1376–81) in which Venice’s strong state was a great asset.
Venice’s ability to mobilize collective wealth on a state level and to
provide ports, vessels, and defensive arms to its merchants, and its
ability to mobilize greater naval strength, led to Genoa’s defeat and
loss of influence in the Black Sea, while Venice’s victory allowed for
its greater consolidation of access to the southern route to Asia
(Abu Lughod 1989: 128; Arrighi 1994: 115; McNeill 1974: 63; Porter
1995: 409; Tilly 1992: 144–51). The competitor of Genoa to the west
was Catalan-Aragon, which controlled the northwest Mediterranean
and access to the Atlantic Ocean, but was held in check by Muslim
control of the southern Iberian Peninsula and North Africa, with
whom the Genoese maintained trading relationships (Abu Lughod
1989: 128; Arrighi 1994: 115).
The Genoese responded to this crisis of being effectively closed
out of Asian trade by radically restructuring their trade and accu-
mulation strategy. While the Genoese seemed to be deadlocked in
their century-long war with Catalan-Aragon, they were able to capi-
talize on the collapse of Barcelona’s banking system in the Spanish
financial crisis of 1380, as the Medici had capitalized on the collapse
of the leading Italian banks earlier in the fourteenth century. This
move to take over the Spanish banking system put Genoa in posi-
tion for its eventual takeover of Castilian trade (Arrighi 1994: 117).
Genoese control of Spanish finance, along with trade relations with
the Muslim rulers of the southern Iberian peninsula and North Af-
rica, provided Genoa with access to African gold, the Saharan cara-
van trade, and the ability to “outsource” protection in the form of
military and political power to territorialist Catholic Iberian rulers
(Arrighi 1994: 117; Tilly 1992: 21). The combination of religious
fanaticism and political ambition of the Catholic Iberian rulers
closely resembled the Genoese aristocrats from which the Genoese
merchant class was able to wrest economic power through the inno-
vation of the Casa di San Giorgio. The Genoese supported the
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66 Kristin Plys
Spanish Inquisition and the Crusades because in them they saw a

profitable opportunity: they provided a check on Muslim rule in the
southern Iberian peninsula and the Maghreb along with the eastern
Mediterranean, and the use of religious passion as a motivator for
expansion and conquest proved much more effective than framing
the Inquisition and Crusades for what they were—for the Genoese
at least—a way to reestablish themselves as the dominant merchants
in the Mediterranean and access trade routes to Asia. 8
Antonio Gramsci observed that, “for many centuries Italy had an
international-European function. Italian intellectuals and specialists
were cosmopolites and not Italians, not national. Italian statesmen,
captains, admirals, scientists, navigators did not have a national
character but a cosmopolitan one” (Gramsci 2001, II: 79). The
Genoese merchant capitalist class especially exemplified this malle-
able identity that allowed it to navigate many different cultural con-
texts (Cachey 2002: 20). By the fifteenth century, the relationship of
mutual convenience between the Genoese and Iberian Catholic
rulers—with the Genoese providing the economic power in the
form of finance capital and Iberian rulers providing military and
political power—had accumulated a great deal of wealth for the
Genoese capitalists.
During the fifteenth century, the Italian city-states were well-
established intermediaries in trade between Asia and Europe. Ital-
ians had established manufacturing at home and sugar plantations
abroad in Palestine, Cyprus, and Crete (Frank 1978: 35). The Span-
ish and Portuguese, with the help of Genoese finance capital, had
also established sugar plantations in the Canary Islands and Madei-
ra Islands (Frank 1978: 36). Most of this sugar was then sent to the
United Provinces to be refined and then sold across Europe. As a
result of their successes with sugar, southern Europeans were able
to raise the capital to seek out new trade routes to Asia in order to
avoid the additional costs of having to go through western and cen-
8
Fernand Braudel notes that:
the takeover of an economic zone abroad seems always to have been the
condition for success of a powerful city which had ambitions—not always
consciously formulated—to dominate some large-scale system. It is repeated
so often as to become a commonplace of history: Venice’s takeover of the
Byzantine Empire; Genoa’s move into Spain; Florence’s capture first of
England then of France; and the parallel can be extended to Louis XIV’s
France and the English colonization of India (Braudel 1984, III: 169).
Review 36.1 – CR
Editor: Amy Keough
tral Asian middlemen to access goods from India and China. The
merging of the crowns of Castile and Aragon in 1469, which united
Spain, consolidated political and military power, ultimately provid-
ing the Spanish army with enough strength to expel the Moors after
centuries of failing to take back the Iberian Peninsula from Muslim
rule (Frank 1978: 40).
This consolidation of political and military power, backed by
Genoese finance capital, was able to finance Genoan Cristoforo
Columbo’s voyage westward in 1492 in search of new trade routes to
Asia. Andre Gunder Frank maintains that, “history makes people
more than people make history,” and the biography of Cristoforo
Columbo reflects the world historical processes of his time and
place (Frank 1998: 41). 9 He exemplifies a man subordinate to the
logics of capitalism, imperialism, and patrimonalism. Self-educated,
Columbo got his start in finance, working for the Lisbon branch of
the Genoan financial firm, Centurione (Wolf 1997: 114). His father
was a tavern keeper who spent most of his life in debtors’ prison in
Genoa. But Columbo married well, to Felipa Perestrello, an im-
portant figure in Lisbon society circles, an active member of Con-
vento dos Santos, the church where most of the aristocracy of Lis-
bon worshipped, and whose father and grandfather were governors
of the Island of Porto Santo, just off Madeira. Some early Columbo
biographers claim that he impregnated Perestrello so that she
would have to marry him even though he was less than an ideal
marriage candidate for someone of her social stature. Regardless,
Columbo is often described as an ambitious social climber who
benefitted greatly from his marriage to Perestrello, and from his
numerous subsequent affairs. As Julia Adams points out, the politics
of marriage creates a network of political support and prestige
(Adams 2005: 86). Columbo’s marriage provided him with entry
into elite social circles, along with important business and political
contacts through his in-laws and their associates. 10 Eventually, as a
9
At least in this statement, Frank does not stray far from his Marxian roots. For
Frank’s words, one could easily substitute Marx’s sentiment from the beginning of
the Eighteenth Brumaire that, “Men make their own history, but they do not make it
just as they please; they do not make it under circumstances chosen by themselves,
but under circumstances directly found, given and transmitted from the past” (Marx
in Tucker 1978: 595).
10
Columbo was not alone in using the institution of marriage to his political and
economic advantage. In Madrid, the Genoan financial firm, Centurione, was able to
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68 Kristin Plys
result of this network, he would be able to get an audience with

King John of Portugal to petition him to sail westward in search of
new trade routes to Asia (Boyle 2008: 55–56). Columbo wasted no
time in exploiting these contacts. In 1478, he spent his honeymoon
sailing to the Madeira Islands to transport sugar for Centurione
(Wolf 1997: 114). Once furnished with access to the Spanish mon-
archs, Ferdinand and Isabella, through his wife’s family’s business
contacts, Columbo spent seven years convincing them to support
his voyage westward, through which he hoped to chart a shorter,
direct route to China and India (Smith 1991: 496). Without a royal
commission, Columbo would have had a difficult time establishing
an enduring trade route that would provide a continuing source of
profit, therefore he needed state support (Boyle 2008: 100).
By 1500, subsequent voyagers Alonso de Ojeda and Amerigo
Vespucci conquered the Amazon for Spain and the Brazilian coast
for Portugal. 11 Once they had realized that they had failed to find a
new route to Asia, southern Europeans decided to capitalize on
their so-called discovery, and formulate ways to exploit both the
land and indigenous populations in order “to finance the oriental
trade as well as intra-European commerce and warfare” (Frank
1978: 40). Adam Smith, writing in 1776, argued that the sole motive
of southern Europeans in the Americas was to find gold and silver
(Smith 1991: 498). 12 Southern Europeans thought that in sailing
westward they would secure easier access to Asia, and they succeed-
ed, but not by the means they had hoped. They did not find a
shorter way of sailing to Asia, but they did encounter silver that they
would use to gain access to Asian trade and financial markets, and
indigenous people that they would exploit in order to unearth that
silver. Because Europe was a periphery compared to Asia, Europe-
become the city’s major financial institution as a result of the successful navigation
of the politics of marriage (Canosa 1998: 170–71).
11
In fact, the Americas were renamed after Florentine Amerigo Vespucci. This
explorer had worked at the Seville branch of the Medici bank before voyaging across
Latin America with Alonso de Ojeda and conquering territory in the service of both
the Spanish and Portuguese crowns.
12
Some historians claim that Columbo always knew that he had not, in fact, dis-
covered a new route to Asia, because the latitudes he recorded in his ships’ logs were
obviously falsified. This, some surmise, was done to appease the royal representatives
who accompanied him on his voyage, or to prevent other voyagers from following his
path (Hunter 2011: 62–63).
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Editor: Amy Keough
ans voyaged westward in search of more efficient access to the Asian

core (Blaut 1992: 369).
While Frank is correct in his claim that it was the dynamics of
the political-economic structure of the world economy and its cen-
ters in Asia that pushed Europeans to territorial expansion from the
crusades onwards, there is no evidence of one global world-system
at this time (Frank 1998: 53). Europeans and Asians were operating
under different logics of power and therefore, different social for-
mations emerged to support these different logics of power, haute
finance being the most crucial of these different social institutions.
The development of haute finance in Europe also engenders differ-
ent political-military formations and relations of production to sup-
port this different logic of the accumulation of power. Furthermore,
as outlined in the following section, Europeans had to forcibly alter
the relations of production in the Americas in order to incorporate
them into the burgeoning European world-system. This demon-
strates the synchronicity between these different forms of power
within a given world-system, in that a logic of accumulation, along
with economic, political-military, ideological power and given rela-
tions of production track together and mutually reinforce a world-
system as a whole. As Frank points out, “simultaneity is no coinci-
dence” (1998: 228).
Spanish Discovery of Silver and Exploitation of Indigenous Americans
Colonialism has been crucial to the development of capitalism

from the “discovery” of the Americas to the present (Amin 2011b:
74; Blaut 1992: 362; Frank 1978; Wallerstein 1974). In 1544, the
Spanish discovered silver in Potosí, Viceroyalty of Peru, and then in
1548, they discovered silver in Zacatecas, Viceroyalty of New Spain
(Frank 1978: 45; Kindleberger 1989: 19; Von Der Heydt-Coca 2005:
484). 13 Italian merchants profited from supplying the manufactured
goods, spices, and grain necessary to sustain the Spanish colonies in
the Americas in their early years before the discovery of silver and
13
The Viceroyalty of Peru encompasses modern day Peru, Bolivia, Colombia,
Ecuador, Chile, Argentina, Paraguay, Uruguay, and parts of Brazil, while the Vice-
royalty of New Spain includes contemporary Mexico, Guatemala, El Salvador, Nica-
ragua, Belize, Cuba, Costa Rica, Dominican Republic, Bahamas, Trinidad and Toba-
go, the Philippines, and parts of the United States.
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70 Kristin Plys
the later development of the latifundia system (Blaut 1992: 373–74;

Von Der Heydt-Coca 2005: 493). The discoveries of silver by Span-
ish conquerors of the Americas necessitated the development of
new relations of production across the Spanish Viceroyalties in the
Americas for the exploitation of indigenous labor in order to un-
earth gold and silver.
Viceroy Toledo ruled the Viceroyalty of Peru from 1568–81 and
set in place several policies that facilitated the exploitation of the
indigenous population in the service of silver mining in Potosí.
Toledo forcibly uprooted the indigenous population and resettled
them into reducciones de indios to better facilitate the collection of a
head tax to be paid by all indigenous men from 18–50 years of age
(Von Der Heydt-Coca 2005: 485). He also introduced the mita, a
system of forced labor in which each indigenous community across
the Viceroyalty was to send one-seventh of all adult males to work in
the silver mines in Potosí. From the perspective of the mine owners,
the mita system was more efficient than slavery, since the mine own-
ers did not have to pay for labor, the reproduction of labor, or even
the tools that workers used in the silver mines. The mitayos were
supported entirely by tribute from their sending communities so,
unlike slaves who were furnished with their reproduction from their
owners, mitayos were forced to labor for free and furthermore were
responsible for their own reproduction. Sending communities also
were obligated to supply their mitayos with the tools they would use
to unearth silver in the mines (Von Der Heydt-Coca 2005: 486; Wolf
1997: 137). So, in addition to paying taxes to the Spanish state, in-
digenous people across the Viceroyalty were forced either to toil in
the mines or to support those who did. Severe working conditions
killed a significant number of the indigenous population, and many
more died from exposure to European diseases (McNeil 1963: 601;
Wolf 1997: 133). As a result of hunger, disease, and overwork, the
indigenous population of the Andes declined by 85% in the three
decades from 1560–90 (Von Der Heydt-Coca 2005: 486).
In the Viceroyalty of New Spain, the Spanish first relied on slav-
ery (from 1520–33) and then on the encomienda de servicio, a system
under which Spanish landowners were granted rights to the labor
and material tribute of indigenous communities (Frank 1978: 45).
But this system of labor was short lived, as the epidemic of 1545
killed most of the indigenous population, and then silver was dis-
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Editor: Amy Keough
covered in Zacatecas in 1548, generating a huge increase in the

demand for labor. In 1548, Viceroy Antonio de Mendoza imple-
mented the repartimiento, which was similar to the mita system in the
Viceroyalty of Peru. The repartimiento required indigenous commu-
nities to supply the Spanish distributing judge with a specified
number of labor days each month, which depended upon the fluc-
tuating need for labor in the silver mines. The Spanish judges then
supplied labor contractors with workers for the mines, and the la-
bor contractors were required to pay workers a minimum wage de-
termined by the Spanish crown. However, these regulations were
often ignored and laborers quite often were not remunerated for
their labor (Von Der Heydt-Coca 2005: 45).
By 1630, as mining production began to decline, the Spanish
began to increase the amount of taxes imposed upon the indige-
nous populations to compensate for lower silver output (de Vries
1976: 17). At the same time, more and more immigrants arrived
from Spain, fleeing the inflation and resulting depression of the
seventeenth century. The result was a shift from mining to agricul-
ture across Latin America and the development of the latifundia, a
system of debt-tied peon labor (Frank 1978: 47). Spanish settlement
in both the Viceroyalty of New Spain and the Viceroyalty of Peru
then directly contributed to the deforestation and overcropping of
the mining regions, as populations had been forcibly resettled into
these areas, and to this day, these regions remain depressed as a re-
sult of the environmental degradation that began in the sixteenth
century (Frank 1978: 46).
PRIMITIVE ACCUMULATION IN EUROPE
While Spain provided the political and military infrastructure

for the exploitation and plunder of the Americas, the Spanish
gained little benefit from this endeavor. As several contemporary
observers have witnessed:
Spain is like the mouth that receives the food and chews it
only to send it immediately to the other organs without re-
taining more than a passing taste or a few crumbs that acci-
dentally stick to its teeth . . . the gold and silver that are
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72 Kristin Plys
born in the Indies, die in Spain and are buried in Genoa

(quoted in Frank 1978: 51).
The poverty of Spain has been the result of the discovery of
the West Indies (quoted in Frank 1978: 51).
The Genoese furnished the financial backing for Spanish conquest
of the Americas, and then the gold and silver that came back to
Spain found its way around Europe—to Genoa, Venice, Florence,
the United Provinces, London, and to the Fugger banking family.
From there, much of the silver ended up in the financial and mer-
cantile centers of Asia via long distance trade.
By the mid-sixteenth century, Spain had been transformed into
a veritable economic colony of Genoa. The Genoese merchant capi-
talists paid a regular salary to King Charles V, whom they had
helped to install against the wishes of the Fuggers, by becoming the
sole managers of the fiscal revenues of the Spanish state and the
silver imports from the Americas (Braudel 1984, III: 165; Wallerstein
1974: 169). The Genoese were also acquiring silver from black mar-
kets in Seville in addition to their contract with the King. The Span-
ish King benefitted from the increase in revenue due to the silver
coming from the Americas, but as a result of these arrangements, it
was the Genoese that retained the bulk of the profits (Porter 1995:
410). In 1550, the Spanish monarchy experienced its first bank-
ruptcy and in 1575–76 they experienced a second bankruptcy, this
time taking with them the Bavarian finance houses from which they
had borrowed. The Genoese, on the other hand, strengthened their
hold on Spanish imperial resources during the bankruptcies, and
were able to profit from Spanish insolvency (Wolf 1997: 115).
Financing the Spanish monarchy was not the only business en-
deavor in which the Genoese were involved. With the influx of
American silver, the Genoese moved out of trade and exclusively
into finance (Braudel 1984, III: 166). The two major clients of the
Genoese became Genoa’s earlier rivals, Venice and Florence, who
controlled European access to trade in the Levant, which was a key
node of accessing Asian commodities.
The sixteenth century brought about the first period of concen-
trated capital accumulation in Europe. During this period, Europe
witnessed a sharp increase in prices and profits along with a decline
in real wages (Braudel and Spooner 1967: 428; Frank 1978: 53). By
the mid-sixteenth century, there was a palpable change in the long-
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Editor: Amy Keough
standing monetary equilibrium: “Silver was the currency used for

big business, the means of preserving one’s wealth” (Braudel 1984,
III: 167). The two most active centers of the European economy at
the time were Flanders and Italy, and these were the places that had
the highest demand for silver (Braudel and Spooner 1967: 403).
But by the late sixteenth century, economic crisis reverberated
throughout Europe. Spain experienced a downturn beginning in
the 1580s, then Genoa started to decline in the 1620s, followed by
England and the Low Countries in the 1640s (Braudel and Spooner
1967: 404–05; de Vries 1976: 27). While most of Europe was envel-
oped in economic crisis, the economy of the Dutch Republic grew
rapidly in the first two-thirds of the seventeenth century (de Vries
1976: 21). Silver from Latin America contributed to the success of
the stock markets across northern Europe, particularly in the Unit-
ed Provinces (Attman 1986: 6–7; Marichal 2006: 36; Morineau 1985:
117; Morineau 1998: 17). Europe’s exploitation of Latin America as
a sizeable periphery allowed northern Europeans to obtain cheap
primary products and in return sell manufactured goods. Asian cen-
ters of power had no equivalent periphery to exploit (Arrighi, Hui,
Hung and Selden 2003: 261). As Immanuel Wallerstein claims,
“The Empire may have failed, but control of the European world-
economy still depended on access to Spain’s colonial wealth”
(Wallerstein 1974: 213; Blaut 1992: 356). Thus, the Dutch were the
ultimate beneficiaries of American silver and were subsequently
able to employ it to constitute the first capitalist hegemony.
SILVER AND THE EUROPEAN TRADE BALANCE WITH ASIA
The evidence supports Frank’s claim that, “not only did the ‘rise
of the west’ follow the ‘decline of the east.’ The two were inextrica-
bly interrelated.” But it does not show that they were “parts of a sin-
gle global economy” (Frank 1998: 276). While Frank views the in-
terconnectedness of global trade in the sixteenth and seventeenth
centuries as evidence for there having existed one global world sys-
tem, this is because he focuses only on trade and not on the rela-
tions of production and political-military formations. Distinct logics
of accumulation existed in India and China compared to Europe
and these logics of power brought about different political-military
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74 Kristin Plys
formations and different relations of production. However, these

multiple world-systems were interconnected, and this is best shown
through the silver flows across the globe in the sixteenth and seven-
teenth centuries and their grave consequences for everyday life
across the globe and for the reorientation of world power from Asia
to Europe.
The largest volumes of American silver were absorbed by India
and China (Marichal 2006: 27). European merchants engaged in
long distance trade were eager to participate in the world’s largest
financial markets in India and China and accumulated large
amounts of Latin American silver in order to engage in arbitrage,
“where they could potentially obtain double profits on commodity
trade and by speculating on the varying prices of money commodi-
ties” (Marichal 2006: 41). Europeans mostly wanted luxury items:
tea, cotton, porcelain, mercury, and silks from China, cotton and
silk from India, and spices from Southeast Asia, and with the wind-
fall of silver from America, European merchants began to import
more and more goods from Asia (Atwell 1982: 68; Chaudhury 2003:
159; Marichal 2006: 42; von Glahn 2003: 187).
There were three routes by which silver was transported to Chi-
na and India. First, there was the mostly illegal long-distance trade
within the Viceroyalty of New Spain: from Acapulco to Manila. In
1597, 12 million pesos weighing 345,000 kilograms were taken to
Manila, and from the Philippines they then made their way to Chi-
na (Attman 1986: 13; Atwell 1982: 74; Kindleberger 1989: 23–25;
Prakash 2004: 312). Secondly, the legal route by which silver made
its way to China and India was via the Spanish flotas de plata, ships
designated to transport silver from the Isthmus of Panama to Seville
and Cadiz. Most of this silver then found its way through Genoese
intermediaries to financial markets in London and Amsterdam.
From London and Amsterdam silver then found its way to India and
Southeast Asia via the Dutch and English East India Companies
(Attman 1986: 15–16; Atwell 1982: 75; Kindleberger 1989: 27–31;
Prakash 2004: 313). Some of this silver then made its way to China
as a result of Chinese merchant presence in Southeast Asia. The
third route to China and India was via illegal Portuguese vessels
leaving Buenos Aires and stopping in Lisbon before sailing around
the Cape of Good Hope to trade in Goa, where the Portuguese pur-
chased goods from India and western Asia. They would then con-
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Editor: Amy Keough
tinue to Malacca where they purchased Chinese goods (Prakash

2004: 312).
This dramatic increase in the amount of silver in India and Chi-
na radically changed exchange rates. Three-quarters of all Ameri-
can silver ended up in China (Arrighi, Hui, Hung and Selden 2003:
273). This great influx of silver caused high inflation. The price lev-
els of silver in China in the late sixteenth century were twice that of
any other region of the world (Arrighi, Hui, Hung and Selden 2003:
273). The copper to silver exchange rate in China in 1368 was
320:1, but by 1621–27 it had dropped to 112:1 (Atwell 1982: 84).
With the influx of silver to China came rapid urbanization, risky
speculation in business, and severe inflation (Atwell 1982: 86; von
Glahn 2003: 190). With the deteriorating exchange rate and rapid
inflation, “many people in China were unable to pay their taxes or
rents, repay loans, or in some cases even to buy food” (Atwell 1982:
89). The Ming court, likewise, was unable to adequately furnish the
military forces, and so they gradually lost control of the outer re-
gions of the Empire, leading to the fall of the Ming Empire in 1644
(Twitchett and Mote 1998: 589).
In order to buy Southeast Asian spices, European merchants
first had to procure Indian coarse textiles, which were in greater
demand than silver in Southeast Asia (Chaudhury 2003: 159).
There was a significant influx of silver into the Indian economy dur-
ing the seventeenth century, as there was great demand for Indian
manufactured goods and Indian merchants only accepted silver as
payment (Chaudhury 2003: 167). Mughal currency was based on
the free coinage of silver, and therefore, currency values were di-
rectly linked to the supply of silver (Haider 1996; Haider 2002: 60;
Hasan 1969: 86). Aziza Hasan shows that an increase in Mughal
coinage coincides with the peak years of silver export from America,
given a time lag of a decade or two (Hasan 1969: 93). 14 Building on
14
The main critique leveled at Hasan’s data is that she assumes that American
silver is the only precious metal coming into the Mughal Empire during the period.
Om Prakash and J. Krishnamurty claim that much of the silver coming into India in
fact came from Southeast Asia and Japan via inter-Asian trade, not from trading with
Europeans who brought silver from the Americas (Prakash and Krishnamurty 1970:
141). Hasan replies that while there was some Asian silver irregularly coming into
the Mughal Empire, a majority of the silver, and a more constant supply, had Ameri-
can origins. Furthermore, Hasan argues, imports of silver from Japan were illegal in
the Mughal Empire, and while the Dutch East India Company continued occasional-
Review 36.1 – CR
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76 Kristin Plys
Hasan’s work, Shireen Moosvi argues that because India did not
produce any silver domestically, the stock of silver in India during
the sixteenth and seventeenth centuries came from elsewhere. Eco-
nomic historians of the Mughal Empire claim that most of the silver
in South Asia during this period had its origins in Latin America
and was channeled through both the European East India Compa-
nies and from South Asian merchants illegally trading in American
silver in Southeast Asia (Haider 2002: 61; Moosvi 1987a: 48). Moosvi
finds that the total silver stock in the Mughal Empire increased by
42% over the period from 1615–1705 (1987a: 85). The result of this
influx of silver into the Mughal economy was inflation, resulting in
price increases and “agrarian distress” (1987a: 89). Even amirs and
mansabdari were not immune to strain. Mughal Emperor Aurangzeb
favored the needs of the central treasury instead of assigning much-
needed jagirs to the nobility. As a result, nobles in the early 1700s,
particularly in the south, “suffered real impoverishment” (Richards
1993: 245). Many zamindari, squeezed between the peasants and the
jagirdari, led armed peasant revolts against the Mughal empire
(Richards 1993: 291).
Asia “declined” because this influx of American originated silver
into China and India caused rapid and severe inflation, which led to
severe economic stress, contributed to political instability, and
marked a decrease in peasant living standards. 15 European joint-
stock companies were then able to take advantage of the weakened
position of Asian centers of power in order to establish political
structures under European control. Europe’s desire to gain access
to Asian trade led to voyages to the Americas and through their ex-
ploitation of the land and people on those continents, Europeans
brought silver to Asia in order to buy coveted goods and access the
stronger Asian financial markets. The great influx of silver caused
rapid and severe inflation, which then caused economic, political,
and social crises across the power centers of Asia, providing an
ly to import silver from Japan, there was virtually no Japanese silver imported to the
Mughal Empire in the latter half of the seventeenth century (Hasan 1970: 152). The
Dutch East India Company also imported far less silver than the British East India
Company, Hasan claims, and the British East India Company’s silver had its origins
in America (1970: 155).
15
There appear to be many similarities between inflation and decline in Asia
during the sixteenth and seventeenth centuries and stagflation in the United States
during the 1970s.
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Editor: Amy Keough
opening for European domination. By the mid-nineteenth century,

the Asian world-systems were subjugated to the European world-
system. This would have been unthinkable a century before, but
with the influx of silver and the subsequent collapse of political
power, European colonization of Asia became a real possibility. In-
dia and China went from being zones of the world economy that
subjugated other regions of the world economy to being commer-
cially dependent upon the European world-system (Palat et al. 1986:
178–79).
CONCLUSION
World-systems analysis, with some notable exceptions (Abu-

Lughod 1989; Amin 2011a, 2011b; Chase-Dunn and Hall 1997;
Chaudhury and Morineau 1999; Ikeda 1996; Meilants 2007; Palat
2010), still tells a story of the transition to capitalism in which Eu-
rope is at the center of world history. But to truly take up the chal-
lenge of macrohistory, world-systems analysis must see capitalism as
a global phenomenon; one that is the result of the interaction of
multiple precapitalist systems, rather than a process internal to Eu-
rope that then spreads like a contagion. The alternate story pre-
sented here challenges the Marxian narrative of the transition from
feudalism to capitalism as a process internal to Europe, and instead,
looks to the shift in power from Asia to Europe as fundamental in
constituting the modern capitalist world-system. This reconceptual-
ization is one that truly embodies the spirit of world-systems analy-
sis; one that shows the way in which power dynamics and the inter-
action of multiple world regions elucidates the macrohistorical
structures of capitalism.
In rethinking the origins as capitalism as the change in power
from Asia to Europe, rather than a transition from feudalism to cap-
italism, world-systems analysis is then better equipped to challenge
some of the fundamental characteristics of modernity; a reorienting
of the past leading to a modernity that puts Europe favorably at the
center of world history. In challenging the notion that capitalism’s
origins can be seen exclusively from Europe, world-systems analysis
can better take up Andre Gunder Frank’s challenge of Eurocen-
trism, but only if this challenge retains the fundamental insights
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78 Kristin Plys
that finance capital, political-military formations, and relations of

production are key in constituting a world-system and in analyzing
important moments of world-historical change.
REFERENCES
Abu-Lughod, Janet. 1989. Before European Hegemony: The World System A.D. 1250–1350.
Oxford: Oxford University Press.
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Eurocentrism and the origins of capitalism

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Eurocentrism and the Origins of Capitalism

Research Foundation of State University of New York, Fernand Braudel Center,

Eurocentrism and the Origins of Capitalism∗

∗ Thanks to the participants of the Economic History Lunch at Yale University

REVIEW, XXXVI, 1, 2013, 41–81 41

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 43

the role of social theory in constructing and disseminating this myth

relations of production that form the basis of exploitation and al-

TERRITORIALIST WORLD-SYSTEMS EMPIRES AND

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 45

scribe to the Marxian notion of modes of production, and see a

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 47

The Mughal Empire

The Mughal Empire was the main source of manufactured and

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 49

kind, and using menial caste peasants as a reserve army of labor

The Ming Empire

During the Ming Period (1368–1644), China was clearly a

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 51

enues that were able to sustain the imperial bureaucracy (Pearson

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 53

of interest that could be charged by moneylenders, but otherwise

EURASIAN TRADE ROUTES

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 55

THE ROLE OF FINANCE CAPITAL IN

Access to Asian trade was vital to European economic develop-

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 57

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 59

grants, a significant number of whom came from northern Europe,

fessions were wool combers, wool skinners, and tavern keepers

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 61

This sub-European interstate system exhibited some of the key fea-

Capital accumulation and state building are also intertwined

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 63

their armaments industry decayed (McNeil 1982: 81). The techno-

GENOESE FINANCE CAPITAL AND THE SPANISH PLUNDER

Key to the reorientation of the global economy from centers in

Capitalist Territorial Expansion into the Americas

To understand the Spanish plunder of the Americas, we must

be singled out as “the true predecessors of Dutch and British fi-

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 65

Spanish Inquisition and the Crusades because in them they saw a

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 67

result of this network, he would be able to get an audience with

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 69

ans voyaged westward in search of more efficient access to the Asian

Spanish Discovery of Silver and Exploitation of Indigenous Americans

Colonialism has been crucial to the development of capitalism

the later development of the latifundia system (Blaut 1992: 373–74;

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 71

covered in Zacatecas in 1548, generating a huge increase in the

PRIMITIVE ACCUMULATION IN EUROPE

While Spain provided the political and military infrastructure

born in the Indies, die in Spain and are buried in Genoa

EUROCENTRISM AND THE ORIGINS OF CAPITALISM 73

standing monetary equilibrium: “Silver was the currency used for

SILVER AND THE EUROPEAN TRADE BALANCE WITH ASIA

formations and different relations of production. However, these