Understanding the
Global Economy

Comprensión de
la economía mundial

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The treadmill of growth and the drive toward cutting production cost conflicts with other values, such as maintaining a high living wage. This is one of the many problems intrinsic to the basic cultural structures of the modern world. (I use the word culture as a broad term with the word social as its subset.) It follows that to ask, "Why did we get on this treadmill?" is to ask, "Why did the modern world come into existence?" This question does not presuppose that pre-modern and non-modern cultures were or are, in general, better than modern society. It does assume, in this context, that modernity brought what Charles Lindblom calls—the market as a prison.1 He equates the market to a prison to highlight modern society's built-in resistance to making the market conform to humanity and ecology.

Anthony Giddens suggested that the three classic theoretical traditions of sociology initiated by, Karl Marx, Emile Durkheim, and Max Weber map their basic differences in the accounts they give of the origins of sociology's object of study, which is modern society. These differing accounts of why and how modernity arose shape the way their respective followers conceive of society as it is today. After Marx, Durkheim and Weber, historians have created comprehensive studies of how and why the change from Medieval Europe to the modern global economy happened. Much of the literature is known as the Studies in Historical Discontinuity the Longue Duree, an archival in France and cited in the United States within the work of Immanuel Wallerstein and his school at the State University of New York.

As a preview of Part VI and VII, the non-Marxist explanations of why the modern global economy began may lie in one of five classes of theories based on

  1. technology, for example the Industrial Revolution as a concept
  2. philosophy as the account of the rise of mathematics, science and secular ethics
  3. the organization of human activity as the specialization and supervision within institutions where the transition to modernity comes more from the new forms of the deployment of power than from new technology.2
  4. political theories, for example the rise of and political changes in the first nation states of The Netherlands, England, and France. This includes the accounts of the struggles within them as they interact with the international economic and military strategies by which the theories have followed and
  5. historical accounts of markets that separated the economy from social relations as the extended geographical scope of markets.

It may be that all of the explanations of the rise of modernity proposed so far are wrong and that some other explanation is right. It may be that the theories mentioned are incompatible with each other because in each case the definition of the phenomenon to be explained is different. For example, the explanation of an energy-intensive industry of mass production finds that the causal factors identified and the dates assigned to them may be diverge from the causal factors and dates found in, say, an explanation of the decline of empires and the rise of nation states.The sets of historical facts that have to be explained are dissimilar. Therefore, the idea of modernity may, in general, be illusory or an idea of opinion rather than fact; thus, no general explanation for its rise may appear.

It seems more likely, however, that the five types of theory mentioned above have partly explained a complex reality, the elements of which form an interrelated set of cultural structures with the useful name: the modern global economy. Perhaps the best explanation would consider and evaluate each element giving due weight to each.

I will outline an argument that leads to the conclusion that the verdict from the studies of historical discontinuity favors my fifth theory. The work of Braudel,3 Wallerstein,4 and Polanyi 5 tends to justify the view that the extension of markets is the leading cause of modernity. I do not assert that they would accept my argument as valid. However, I do assert that it is valid and that the evidence they have compiled supports it. The technological, philosophical, organizational and political causes of modernity can be understood in the context of explanatory narratives shaped by accounts of successive changes in patterns of trade.

Braudel, Wallerstein, Polanyi and others devote much attention (I do not) to these two questions: 1) Why did the European commercial expansion, which extended markets, come into being? and, 2) Why was Europe and not China or Islam the center of the commercial expansion? Nor will I consider what caused the growth of markets. I will, though outline the reasons why it, in turn, caused modernity.

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V.i. Historical discontinuity as explanation

What has to be to be explained is modernity, what explains it is the growth of markets; in one respect, this explanation is true by definition. One of the central features of modernity is the global economy. Before it became global, the modern economy was what Wallerstein calls the European world-system as Europe, the Americas, part of Asia and the East Indies, though not the entire globe. Because one of its essential characteristics is the large market area versus markets that were mainly local, by definition enlarging markets created an enlarged market. In this respect, the growth of markets brought modernity. Wallerstein qualifies such an analysis as follows:

    Trade in luxuries did not produce the historical discontinuity known as the emergence of modernity. The relevant market growth consists of regular trade, which includes trade in necessities.

I disagree about luxury trade because, like the necessities trade, it generates profits, moves ships and creates livelihood. Moreover, it is hard to draw a line between, for example, 1) the pepper from India as a luxury for the rich and pepper from India to make edible the bad meat for the poor and 2) the early trade of sugar as a luxury and, in its later phase, when sugar and rum became mass consumer items.

Citing the expansion of trade over larger geographical areas as an explanation is illuminating in that it explains more than trade. To the extent that it is plausible to say that the other important features of modernity were produced by, or at least facilitated by, trade that extended over the globe, it is reasonable to identify market growth as the leading cause rather than a contributing factor.

Furthermore, in the case of any given phenomenon in which the proposed explanation is supposed to explain, the plausibility of the explanation is enhanced by an account of 1) the sequence of events compatible with the cause producing the effect (post hoc ergo propter hoc) is a fallacy. Nevertheless, effects do not precede their causes and, hence, a proposed explanation has passed a test if it can be shown that the cause preceded the effect and 2) the quasi-mechanism by which the alleged cause produced its alleged effect.

Market growth was caused the 18th century industrial revolution, which occurred then because the economics of society was ready for it. An indication of market growth as causal is the fact that the steam engine, which powered the coalmines and the cotton mills, was invented long before the 18th century. About this, the historian Fernand Braudel wrote:
    The steam engine, for example, was invented long before (ancient Egypt had steam engines as toys) it launched the industrial revolution—or before being launched by it.6

Another factor shows that market growth is the leading causal factor. A quasi-mechanism, in this case, production on a larger scale for the sake of both exports and an expanded home market, is one of the reasons why in the 18th century it became profitable to use steam engines in coal mining and textiles. Growth of markets occurred within and between nations as 1) local fairs fell to national systems for selling merchandise and 2) barter, as an informal economy, of gave way to money exchange. The point about steam power could be generalized, although not in a way that denies the facts adduced by writers (such as Piore and Sabel) to demonstrate that technology choices are at times market-leading and not always market-led.

The sequence of events also favors counting the growth of the market economy as the cause, rather than the effect, of its ideological justification. The seminal ideas by way of Descartes, Hobbes, Locke and Newton were articulated in the 17th century—several centuries after the time when great trade expansion began.

Hobbes made fun of Aristotle's theory of the just price, which decides what the buyer and seller deserved on the basis that people would not complain if they got more than they deserved from a sale. Therefore, people should not complain that they got less than they deserved in terms of their consent to the sale.

Thus, a functioning market economy based on transactions at arms-length was extant then in England. When several writers generalized the achievements of technology in a science of mechanics and then articulated the theory of the market as a social analogue of mechanics, an active modern market society existed for their theory.7

One can cite mechanisms by which larger markets react back upon and reshape local everyday life and, therefore, explain the world about which writers composed. They reshaped and partly directed it through the art process of writing (given that they wrote about timely ideas and, thus, were read). Such a quasi-mechanism is found in the relationship of the continental wool trade to the enclosure movement, the account as follows:

    Property rights and every aspect of life in English villages changed when it became profitable to devote land to sheep-raising for export. It paid to usurp the common land once used to grow food and fiber for local consumption. Life in the villages of Guinea was forever altered when the slave traders arrived to steal labor. The plantations, in turn, exported sugar to Europe and required from Europe the means of subsistence to support them. This in turn meant that agriculture somewhere had to be reorganized in order to export food to the sugar plantations.

Other examples of the quasi-mechanism abound.

The early factories were organized to support production on a larger scale, which in turn was a function of markets. Parallel mechanisms apply to the evolution of institutions. 20th century philosopher and historian, Michel Foucault explains the normalizing of human behavior through the new and subtler means of exercising power that is ever more characteristic of modernity. As the reason, he cites economic necessity such as thievery on the London docks in the late 18th century as threatening to reach intolerable proportions ruining commerce and, thus, initiating the system of modern police and prisons. In the case of the development of many organizational features of modernity, the growth of the market came first. The mechanism producing institutional change was the need to establish the institutions that the market economy required to function smoothly. Then again, it may well be the case, as Foucault asserts that a vengeful side of human nature exists to delight in the wielding of power (and resistance) even when it serves no useful purpose. Bureaucratic and psychological inertia and the self-interest of functionaries produce results and elaborate rationales for those results, which no market imperative needs and power has a life that transcends both individual psychology and collective wisdom.8

Similar caveats against exaggerating the importance of the direct and indirect effects of the growth of markets apply to the technological and philosophical theories discussed above. My argument for the theory of historical discontinuity that treats the growth of markets as the leading cause of modernity is not an excuse to ignore the features of modernity or constants of human nature that market growth does not take into account.

By dating political modernity from the rise of the nation state, it is common to mark the Peace of Westphalia in 1648 as a watershed date. That treaty guaranteed the independence of Holland from the Spanish Empire, which dismissed the juridical principle that Christendom was in principle a single temporal and spiritual realm. Holland appears to be the first nation state, which displayed, in a nascent and transparent form, some characteristics that all the many nation states since then have had in common.

Before the 1648 Peace of Westphalia, Holland was the name of the loose federation of mostly Dutch speaking states along the North Sea. Holland was also the name of the major state that led the charge to independence from the Spanish/ Holy Roman Empire. Therefore, Holland became the nation-state as renamed, The Netherlands.

Wallerstein's well-documented account of the position of Holland in international trade explains why 1) the nation-state came into existence and 2) the nation-state as an institution emerged in the form it took and at that time and place. Here the word explains is the weak sense so to not imply that an unavoidable necessity compelled the nation-state to evolve as it did. Nonetheless, this key fact of political history is explained in the sense that when we understand the position of Holland in international trade, we can see why it would have been reasonable to predict that Holland would

  • want independence from Spain's tax and regulation
  • have, with its allies, the power to gain independence and
  • become, upon its independence, a constitutional monarchy dominated by burghers (bourgeoisie owners).
  • The emergence of the first nation-state is not the only event to be explained in a political account of the origins of modernity. It is, nevertheless, one important event. The issues that it illustrates serve to outline this part of an argument for market growth as the leading cause of modernity.

    The 17th century Dutch merchants became the main distributors of goods in Europe. Although Spain and Portugal had empires rich in silver and gold, they were short of food. In the preceding centuries, the Dutch had improved their fishing and merchant fleets. They were major purchasers of grain from the countries on the shores of the Baltic Sea. The Dutch Oost Indische Companie brought spices and fabrics from Asia that they traded, in part, for Baltic grain. The Netherlands was in a position to supply provisions to the Iberian Peninsula. Therefore, it acquired the precious metals it used to finance commercial adventures elsewhere. Given The Netherlands wealth and source, again it was predictable that 1) the independent state would recognize that commerce had become the pillar of the kingdom as declared by Lord Mansfield of the next nation state of Britain, 2) it would, as the nation states have since, participate in an international trading system. Its governors would support its merchants with policies designed to help them and, thus, the nation to prosper and 3) as elsewhere, reliance on trading in enlarged markets to supply necessities led to political institutions conducive to trade.

    With respect to the origin of the nation state, the proposition that commercial expansion is what explains political modernity, which is what has to be explained, can, thus, be shown to be true, in a significant sense. It cannot be proven in the strongest sense of cause and effect, but neither is the causal connection so weak as to be ineffectual. The sequence of events was that commercial expansion came first, and political modernity second. An account of how the one might bring the other provides a quasi-mechanism showing how the alleged cause operates to produce the alleged effect.

    It is necessary and vital to avoid reductionism and determinism, therefore, we need to say that 1) politics is more than economics and 2) once we know 17th century trading patterns, we then still cannot deduce that Holland had to become an independent constitutional monarchy. The weaker, though still significant, claim suffices: commerce is the leading causal factor and a background condition operating on other factors.

    To complete the argument, it is necessary to show that

    • the need to find political forms conducive to success in the modern economic world was operative in the case of Holland,
    • the search occurred in the other emerging modern nation states and
    • what is true of the nation state is true of the other main features of modern politics. The evidence amassed by students of historical discontinuity does show both, even though the weight of the evidence also shows that
      • social history is complex
      • no current can exist without a countercurrent and
      • no generalization can exist without qualifications.

    A second set of examples, nevertheless, supports the view for which I argue having used 17th century Holland as the first example. Next, I cite and analyze an account of the French Revolution and the form that modern institutions took in the first years of the 19th century from Wallerstein's, The Modern World-System Volume III: the Second Era of Great Expansion of the Capitalist World Economy 1730-1840s.9

    V.ii. Historical discontinuity as prescription

    The growth of markets changed the moral status of—the stranger from an unknown, assumed on contact to be an enemy, at best a lost soul whom a saint might convert to the true faith. The stranger became an essential partner in the business of life, the customer, the source of wealth, even the source of necessities. As local daily life became organized around production for sale in distant markets, the status of —the neighbor changed too as it became more like a stranger.

    The ethics of medieval Europe was, like the ethics elsewhere, an element of ideal culture that, although it provided a discourse for criticizing and for guiding practice, did not describe or govern practice. It was, like the ethics of many other civilizations and cultures, an ethics that prescribed self-discipline both for the improvement of one's character and for the good of one another and community. The medieval ethics were suitable for communities in which survival was always an issue. Individuals and families relied on the protection and food provided by neighbors, regardless of class, who paid allegiance to the same lord and prayed to the same God. Medieval Europe garners special attention because, after the medieval period, Europe became the center of the modern system from which today's global economy was born (thus, not because Europe was more important than other pre-modern cultures).10

    Life was precarious, population grew slowly and in some decades declined. Plagues and the poor harvests, which often lead to an outbreak of plague, quashed fruitfulness. Medieval settlements in Greenland perished, leaving no survivors. Warfare was endemic. Moors from the south, Tartars from the east, Vikings from the north, as well as feudal lords of Christendom fought each other. Villages and farms perished in pillage and war.

      The population was more than 90 percent rural. Braudel estimates that even in 1500 A.D. only ten percent of the English and three percent of the Russians lived in towns with more than 400 inhabitants. The main form of production was by manual labor, which produced for use more than for barter exchange, more than for cash sale and local fairs more than long trade routes to exotic destinations. The peasants who produced food for the knight of the manor as servants in peace became his infantry in war. The knight protected his people.11

    Medieval Europe had produced a systematic ethics of conventional solidarity, which was usual within traditional culture with archetypal detail via commentaries in sacred texts. One biblical name for God was agape, which is love. In St. Thomas' summaries of medieval thought, caritas, the Latin translation of the Greek agape was central. Many commentators reflecting current scholastic concerns find St. Thomas' central thought to be his epistemology, his theory of meaning or his onto-theological hierarchy.

    My interpretation of the ideal of caritas through St. Thomas. Caritas was the basis of moral obligation and was known as the source of joy (gaudium) and of peace (concordia). The basic duty of the sovereign was to care for the people. Everyone's duty was to perform the seven corporal works of mercy, the first of which is to feed the hungry. Law was defined as an ordinance for the common good, made by those charged with caring for the community. Therefore, we have the religious basis for aspects of medieval law as outlined below within the context of Aristotle's just price theory.

    The medieval Paris police supervised the markets partly to assure that food would be plentiful and cheap. In the medieval ethical system, it was the duty of the peasantry to produce and distribute food at low (just) prices. They could be compelled to do so. Merchants who interfered with just prices risked punishment by committing such crimes as forestalling, which was the purchase of peasants' produce and selling it for a profit.12

    As the medieval period ended in the commercial expansion of the 15th and 16th centuries, a modern economy was born. When later changes in technology, philosophy and politics occurred and trade expanded to become a global economy, the commercial expansion that had taken place conditioned those changes. The historical discontinuity wrought by commerce had to have a corresponding discontinuity in ethics.

    Trade had to become possible with people everywhere while honoring religions and lifestyles, yet imposing universal norms that required compliance with bargains struck in business. As the centers of commerce (towns) grew, the expectation that people would share necessities with indigent neighbors ceased to be a moral and legal duty; still, it might be allowed as a voluntary or self-imposed duty for private religious motives. Some of the moral rules that were repealed included rules against charging interest on loans, forbidding the sale of an item for more than its initial cost and allowing the poor to steal when in need.

    Expanding markets needed to revive the Roman jusgentium: law of all nations, which was the common law of commerce used in the Roman Empire. With that law of commerce, many cultures gathered to trade in markets. That is what first Europe and, then, the world acquired. The revived Roman law became the basis of civil law, which replaced the confessional, canon law and scripture as the source of moral and legal authority. It occurred in England too, where the difference in this respect from the continent is often exaggerated. Less developed areas without civil codes in 1800 had codes imposed on them by Napoleon's armies. When the Napoleonic tide receded, the codes remained. Outside Europe, civil codes came with colonial rule or with modernizing elites such as the Young Turks, or the liberal revolutionaries in Latin America. Europe moved away from what Ferdinand Tonnies called a gemeinschaft, (G gemei), which means common, a community whose principle is unity. Europe thus moved toward what Tonnies called a gesellschaft, (G gesell), which means companion, partner, fellow, brother and citizen whose unifying principle is mutual respect for the rights of the individual.13

    The historical discontinuity of ethics, however, needed a worldview in which the normative principles that governed secular life in the factory and marketplace could remain legitimate. As long as all cosmologies were religious, behavior made sense in religious terms alone. A metaphysics of the historical discontinuity of ethics had to and, therefore, did emerge.

    V.iii Historical discontinuity as metaphysics

    It is not difficult to establish that international trade theory is derived from economic theory. The latter in its principal versions presupposes the existence of certain institutions and ideas, markets, property, contracts and so forth that I have characterized as modern. It is more difficult to show how the main concepts underlying international trade theory were part of the metaphysical sea change. Central here is that in the birth of the global economy it was conceptual discontinuity, not simply cumulative advances that occurred from what Smith called the early and rude state of society toward higher levels of his progress of improvement.14

    Therefore, a discontinuity in metaphysics made international trade theory possible, which I will prove by tracing the evolution of the concept of rent. First, it will help to broaden the context by citing some facts from prehistory and child development, though they are merely of indirect relevance. In Before Philosophy, H. A. Frankfort wrote:

      An aphorism that Crawley made is an apt one—Primitive man has one mode of thought, expression and part of speech, namely the personal. He does not mean (as often thought) that primitive man, in order to explain natural phenomena, imparts human characteristics to an inanimate world. For this reason, primitive man does not personify inanimate phenomena.15

    About the judgment and reasoning of children, Jean Piaget wrote:

      At first, the child puts the whole content of consciousness on the same plane and draws no distinction between the personal I and the external world. Above all, we mean that the constitution of the idea of reality assumes a progressive splitting of this protoplasmic consciousness into two complementary universes, the objective and the subjctive.16

    Those allusions to early humans and childhood suggest that the evolution of the mentality in which human symbolic functioning takes place has a direction. The suggested direction of this evolution is away from undifferentiated thought that is suffused with personal qualities. It moves toward thought that becomes more articulate and objective. The history of the metaphysical basis of rent from the 13th to the beginning of the 19th century is, for our purpose, a fragment in a much larger process of mental evolution.

    The discussion of the history of thinking about rent may expand our ability think of rent as a flexible concept (which applies to any historical concept). On the other hand, it may be that the valuable wisdom of ancient myths, which joined the undifferentiated concept of reality (suffused with personal qualities) were lost along the way. If so, it may be easier to recover the lost wisdom if we remember that economics and the global economy, which are the dominant discourse and practice of today, grew from earlier forms.

    The Oxford English Dictionary shows that rent derives from the old French rente, derived from the popular Latin rendita the classical Latin reddita, a form of the verb redare and dare, meaning to give and the prefix re, to give back. The O E D cross-refers rent to render, with the same Latin source and serves as a shorthand synonym for the word surrender. In the early common law of England, rent and render were interchangeable. 

    Thus, it was a render of rent, which, in those days, was of corn or other victual. It is frequent in the Domesday Book (a record of survey of English lands and landholdings as ordered by William the Conqueror, ca 1086) after specifying the rent due to the crown, to add likewise the quantity of gold or other renders reserved to the Queen. They swore that they would make such renders from the land, as had been done before to any other King.17

    From this etymology, we deduce that at first the word rent was used along with render and terms that refer to the tribute paid by the feudal inferior to the feudal superior. The feudal inferior held land under socage tenure, which is by agricultural service fixed in the amount and kind or by money, not by military service and by which the inferior became the liegeman of a feudal baron. Each had duties to the other in the relationship. The most important duty of the liegeman was to deliver food to his lord. The most important of the lord's duties was the military protection of his vassals. Throughout early history, rent was paid mainly in kind that is harvest goods or service. With the increasing use of money it became customary to pay a certain sum of money in lieu of surrendering a certain portion of the harvest.

    By the time economists came to write about it, rent had become the price paid for the use of land. Awareness existed that the price had its origin in the subjugation of people. About this, Smith wrote:

      As soon as the land of any country has become private property, the landlords, like other men, love to reap where they never sowed and demand a rent even for its natural produce. The wood of the forest, the grass of the field and all the natural fruits of the Earth, which, when land was common, cost the laborer only the trouble of gathering them, come to have an additional price fixed upon them. He must then pay the license to gather them and must give up to the landlord a portion of what his labor either collects or produces. This portion, or what comes to the same thing, the price of this portion, constitutes the rent of land.18

    True to the mechanistic psychology employed by many of the advanced thinkers of his time, Smith declared human nature to be such that landlords would raise rents as high as they could, which was what the market or the tenant would bear. Therefore, it became a fact of nature and a premise to be regarded as a cause when studying its effects, which was that to obtain the use of land it was necessary to pay as much as the tenant could afford to pay. That was the sum for which permission to use the land could be obtained.

      Rent, considered as the price paid for the use of land, is naturally the highest that the tenant can afford to pay in the actual circumstances of the land. In adjusting the terms of the lease, the landlord endeavors to leave no greater share of the produce than what is sufficient to keep up the stock from which he furnishes the seed, pays the labor, purchases and maintains cattle and other instruments of husbandry together with the ordinary profits of farming stock in the neighborhood.19

    Therefore, it was easy to conclude that rent was a quality of a physical object, most notably the land. Moral factors were constants that dropped off the equation becoming invisible, two of which were 1) the institution of land ownership and 2) the moral compass guiding the landlord.

    Rent attained the metaphysical status of a natural quality of a physical object. With its new metaphysical status, rent attained, from a normative (legal and moral) point of view, the status of a given in a constellation of rent-related institutions. The rent related institutions, which assume that the land yields rent, were as follows:
    • duties of landholding trustees
    • duties of managers as land holding agents for the owners
    • holding land in endowments for educational and charitable foundations
    • landholding by corporations whose directors have fiduciary duties to shareholders
    • lands held burdened with debt for which payments must be made to banks and the payment of property taxes and
    • land owned by pension funds and the like.

    It became impossible to modify rent as a concept and as an institution without changing the courses of the other "stars" in the normative "constellation" of which rent is now a part.

    In 1817, Ricardo articulated and categorized the objective nature of rent as a quality of the land in his theory of rent. Ricardo distinguished rent as a word in ordinary language from rent as a technical term employed in the science that is political economy. The latter he defined and wrote in this excerpt:

      In technical terms, rent pays for the original and indestructible powers of the soil.20 When a country is first settled, there is no rent. The time of first settlement is when land is most abundant and most productive.21 Then, nothing pays for the powers of the soil because the cost of farmland consists only of the labor and capital required to improve it. When the land's power decays and less yield returns for labor, then a share of the produce of the more fertile portions becomes rent.22 The rent of a piece of land, the quality of the land, which makes labor on it more productive by pairing it with natural fertility, is measured by the difference in value between the crops this piece of land will produce and what can be produced on the worst land then pressed into use with equal labor.23

      The worst land pressed into use, at any given time, must become cultivated because of the growing demand for food. The worst land does not produce rent. It is marginal. When there is a slight drop in demand, the worst land lays fallow. When the worst land is cultivated, it yields just enough to pay the cost of working it.

    Ricardo's theory of rent is often cited as a paradigm to illustrate a law of economic science; it is detailed, quantitative and passes empirical scrutiny. Once rent becomes a quality of objects, economics as a science has a practical use. Analyzing the prices of commodities and the rent necessary to produce them can be studied as one of the causes of the effects observed. Income streams consisting of rent in part or whole can, thus, be treated as objective natural phenomena. Rent income and, by extension of the metaphor, other streams of income can be measured and studied in a manner analogous to the hydraulic study of streams of water.

    The transformation of the concept of rent was a part of a metaphysical discontinuity, which was its context. Rent evolved and arose in proportion to the decline in the regard for the value and meaning of personal relationships in exchange for a higher regard for objective facts. As the world changed, worldview changed and, in terms of human welfare, much was gained. The change represented what Smith called the progress of improvement. Nevertheless, losses occurred too. In Martin Fierro, a classic of Argentine literature, the hero laments the fate of the gaucho in words that mock modernity:

      Pues todos son sus senores Sin que ninguno lo ampare.24 Everyone wants you to call them Sir, but no one wants to protect you.


    1. C. Lindblom, "The Market as Prison" in The Journal of Politics. 5/82

    2. Anthony Giddens, Capitalism and Modern Social Theory: an Analysis of the Writings of Marx, Durkheim and Weber, Cambridge, MA: Cambridge University Press, 1971

    3. Fernand Braudel, Capitalism and Material Life 1400 - 1800, New York: Harper and Row, 1973 as a translation of Civilization Materielle et Capitalisme. See also other works by Fernand Braudel.

    4. Immanuel Wallerstein, The Modern World-System I: Capitalist Agriculture and Origins of the European World-Economy in the 16th Century. New York: Academic Press: 1974. This is the first of three volumes on the origins of the modern world-system. See also other works by the same author.

    5. K. Polanyi, The Great Transformation, Boston: Beacon Press, 1944

    V.i. Explanation

    6. Fernand Braudel, The Structures of Everyday Life: the Limits of the Possible  (New York: Harper and Row, 1981) p. 335

    7. These matters are discussed in A Philosophy of Peace and Justice: letters from Quebec, San Francisco and London: International Scholars Press, 1995

    8. Michel Foucault, Discipline and Punish: the Birth of the Prison (New York: Vintage Books, 1979 translation of Surveiller et Punir)

    9. Immanuel Wallerstein, The Modern World-System III: the Second era of Great Expansion of the Capitalist World Economy 1730 -1840s, San Diego, CA: Academic Press, 1989. The facts about The Netherlands are mainly from Wallerstein's The Modern World System: I, cited above in note 4, above.

    10. St. Thomas Aquinas, Summa Theologiae. Perhaps the best single source for an account of ethical precepts characteristic of medieval Christendom is the second part in which the angelic doctor analyzes the virtues. This is the source of the remarks here on caritas.

    11. The facts are taken from Braudel (cited in note 1, above)

    12. John Baldwin, The Medieval Theories of the Just Price, Philadelphia: American Philosophical Society, 1959

    13. Ferdinand Tonnies, Community and Association, London: Routledge and Kegan Paul, 1955

    14. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (various editions, first edition 1776). The page references below are to the Modern Library edition, Edwin Cannan ed. New York: Random House, 1937. The phrase — early and rude state of society — occurs in Book I, Chapter 6, p. 47. Improvement is a word within context on the first page and often thereafter.

    15. H. Frankfort and H. A. Frankfort, Before Philosophy: the Intellectual Adventure of Ancient Man, Baltimore: Penguin Books, 1961, p. 5-6. An essay about speculative thought in the ancient Near East

    16. Jean Piaget, The Child's Conception of Physical Causality, London: Routledge and Kegan, 1970) p. 242

    17. Examples given for rent and render in the Oxford English Dictionary.

    18. Adam Smith, Wealth of Nations, p. 49

    19. Ibid. p. 149

    20. David Ricardo, On the Principles of Political Economy and Taxation I, p. 67 (various editions, first edition 1817) in the edition of Ricardo's Works, Piero Sraffa ed. Cambridge, MA: Cambridge University Press, 1951

    21. Ibid. p. 75

    22. Ibid.

    23. Ibid.

    24.José Hernández, Martin Fierro, part VIII (var. editions since 1872)


    1. History shaped by the geography of Europe gave it a comparative advantage to become the origin, center and engine of global trade. As seen on a globe, what features of geography do you think gave Europe comparative advantage?    p. 83

    2. The rise of modernity was the result of the rapid market growth, which was unbridled, even atypical, with faulty ethical justification a lack of a unified objective. Based on your view of the facts, what conclusions might you draw about modernity as defined by and as market growth?   p. 84

    3. Market growth caused the 18th century industrial revolution which occurred then because the economics of society was ready for it. Whether you accept that idea explain your view of human progress as either 1) random, 2) sequential, or 3) based on necessity?   p. 86

    4. Markets are the quasi-mechanism for a trio of interwoven structures that includes market growth and profit. Do you think that the three structures are stronger today and define more of the secondary environment of modern life? If so, why?    p. 86

    5. Why did the post-medieval European markets revive the Roman law, in your view of it? p. 90 through p. 92

    6. The global economy began in earnest in relative recent history, though it had a loosely defined expression since the time at which transcontinental and transoceanic travel began. In your view of it, other major historic event coincided with the intense, impulsive, visionless effort toward a global economy? p. 91

    7. Gemeinschaft and gesellschaft when applied to the context of the global economy allows us to see one of the Weber rationalities in the extreme. How would do you describe gesellschaft at work in its role as a player facilitating the global economy? p. 92

        b. Which of Weber's rationality do you see work with the in concert with gesellschaft?   p. 72

        c. To what extent do you think the world has become "smaller" via mass media and the Internet?

    1. Does this change bring the return of the traditional rationality and gemeinschaft?

    2. What potential and actuality do you see in the Internet for community and the rationalities beyond that of other media?

        d. Describe how you view the effect of this return to community on the global economy. Overall, do you see it challenge and instruct the global markets in terms of alternatives, ethics and/ or accountability?

    8. The transformation of rent into fixed concept established an economic basis for rent, which included that it was natural that the rent would be the highest that the tenant could afford, as a concept, rent became a fixed institution changeable only via the change of other economic institutions, it was deemed an objective quality of the land. Therefore, the transformation of a primary aspect of existence, which is the right to land, had a lasting consequence upon the social mind.

    In terms of human relations, what do you see as the possibly what do you see as the possibly unintended though quite logical consequence of a new paradigm of landowner power? p. 93 through p. 96

         b. How did this exclusion solidify the market domination in general, in your view of its effect?

    9. What if any distinction do you think exists between the economic form of society and market growth? p. 86p. 87

    Keywords: barter, caritas, discourse, ethics, gemeinschaft, gesellschaft, global economy, industrial revolution, international trade theory, international trade, market economy, markets, market growth /growth of markets, mass production, metaphysics, modern global economy, modernity, modern world-system, nation state, profit, property rights, property, rent and theories of rent, Roman lawSmith, solidarity, technology, trade, treadmill of growth

    Description: Do the theories of historical discontinuity explain the rise and current rule of global capitalist economics? Part V examines this as the logical next step in Understanding the Global Economy, 1) an expose of the economic rise and rule of free trade as enforced by trade in pacts between corporations and governments and 2) a source for building an ethical, sustainable economy based on knowledge and research.


    Part VI: Marxist theory, feminist theory of Maria Mies  •  TOC  •  cover page  •  top

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    Global Political Economy Commission IPRAGPEC
    forum issues of, solutions to the economy,
    results of the IPRA 2010 Conference,
       goals for the IPRA 2012 Conference, events, call for
      papers and action on global markets.