In the 15th century, Spain and Portugal were powerful continental forces with keen interest in carrying out trade overseas. Their respective governments funded explorers who went out explore the world.(1) During these journeys, the Kingdom of Spain discovered new lands, which they subdued and subjected to their own rule.(2) It has been noted that these newly discovered lands had rich resources including massive quantities of gold and silver. This is said to have excited other European countries to join the race of discovering new lands overseas. The Portuguese just like the Spanish had made steps to trade with the East Indies. The Portuguese are said to have used piracy and the entry of other European countries into this trade ended the Portuguese slavery. In the 16th century, Britain was a relatively weak nation and poor. Despite its weakness, it was able to defend itself against the attacks of Spain in 1588. Spain was then the most powerful nation in Europe. The 17th century however saw Britain involved more in the trade with the Asia continent. In order to enhance trade with the East Indies which Spain had dominated the Honorable East Indies Company (HEIC) was chartered. This company was to trade in the Indies. This company was granted some right to, "acquire territory, coin money, maintain armies and forts, form foreign alliances, declare war, conclude peace, and try and punish law breakers."(3)
It should be noted that India was the first battleground for the European countries that were involved in trade. The Dutch East India Company was another company chattered in Holland at the same time with the same objectives as those of the HEIC. This set the stage for competition and struggles among three countries: the Portuguese, the British, and the Dutch. With time the Dutch tool control of Indonesia and Ceylon, Portugal took control of the mainland and the British control various regions in India and become the main contestants for primacy in India. The stage was for the 18th century events.
Europe and Colonialism
In the beginning of the 18th century, many European nations set out to conquer the whole world for their leaders and also to impose their political forms on the indigenous inhabitants of those countries. (4) At first colonial rule was merely an extension of the existing European form of government, that of an absolutist monarchy. The early modern Europe rulers fought among themselves for political and geographical area control.(5) They exercised complete control over their respective territories. As the modern day European nation states emerged, the absolutist rulers moved out in search of a wider world, particularly in Asia and Africa. This marked the beginning of colonialism.(6)
Today's world was to a large extent shaped by the process of speedy economic growth that began in the 19th century and in Europe. During this time, the European economy was producing many goods by utilizing their own resources and labor and also by using resources and labor from the rest of the world especially from slave trade. The many quality changes in the European economy brought about a tremendous increase in the quantity of goods. For instance, the main source of wealth became machines and factories rather than land. Labor was no longer organized on a restricted family basis. Peasantry was destroyed, and men and women were ruthlessly exploited for their labor by the capitalistic systems in place. As demand for more goods and services increased, their emerged a need for space and hence the exploration of foreign frontiers that culminated into colonialism.
Seaman (1852) gives a brief overview of the increase in the economic activities in the European countries and America in the 19th century. He describes the increase in the gold mines activities.(7) Although the main goal of the colonial governments at first was to improve the economic and social conditions of their home countries, to provide raw materials, prestige and market for their manufactured goods. But this was later on disregarded in the quest for profits resulting in the development of colonial economies that in turn became dependent on those same countries that created them.(8)
From the description given by the Seaman (1852) it is clear that the motive of the European countries was economic expansion and exploitation of new regions which had resources which were needed back at home. According to Seaman (1852), "large quantities of cotton and silk goods were imported from India into Europe and America, and large sums of coins exported to India in payment, as well as China and East India islands, to pay for tea, spices."(9) The European countries chattered companies to enable them carry out trade.
These economical activities must have led to ideological conditions like ideas of supremacy and racial struggle and competition in relation to the world market in the nineteenth century, pushed colonial expansion to a different level. For instance, just a small portion of the African coastal strip was occupied by Europeans in 1878, but by 1914, the whole continent had been shared among the European nations all fighting for control and economic superiority. But the main factors that contributed to the rise in the European nations were the Atlantic trade and colonialism. These affected Europe both directly and indirectly by bringing about institutional changes. Worthy noting was the growth of African, New World, and Asian trade from the 16th century that strengthened new sections of the commercial middle class in a number of European countries, that enabled them to demand, obtain and sustain institutional changes to protect the rights of their property. On top of these, the most important institutional changes and therefore the most substantial economic gains happened in countries where checks were placed over the monarchy and reduced its control over the overseas trading activities. This enabled new merchants in such countries to gain significantly from the Atlantic trade. This still boils down to the capitalist development between the older institutions and the economic opportunities that the Atlantic trade offered.(10) Seaman describes how the banking institutions developed at this period. They were mainly triggered by the economic activities that were flourishing at that time.(11)
Fresh grounds for the bourgeoisie were opened up with the discovery of America and the rounding of the Cape. Countries like the Netherlands and Britain that had non-absolutist initial institutions experienced major institutional changes that allowed new merchant groups but not monarchies, to benefit from the Atlantic trade. Countries such as Portugal and Spain, whose monarchies, were highly absolutist and therefore tended to monopolize the overseas trades, realized limited or no gains from the Atlantic trade. So as the Atlantic traders were growing, so was Europe, in fact the emergence of Europe as an economic power house in the period between 1500 and 1850 is on a large extent the rise of Atlantic Europe. It is therefore quite obvious that the benefits got from the Atlantic trade, colonialism and slavery were very vital to the institutional growth in Europe. It is also argued that Atlantic trade alone without the development of the capitalist institutions, could not have accomplished much. Capitalist institutions helped in constraining arbitrary acts and arrogation by the monarchy and other groups established in countries, and assuring rights to property to the society and also allowing free entry into businesses that are profitable to its people. International trade carried out from 1600 on wards strengthened new commercial interests in the European countries, enabling them to demand and therefore obtain the institutional changes needed for the functioning of the capitalist institutions. Although it is argued that the profits from the Atlantic trade were small when compared to the GDP, they still were substantial and in fact large than the profits from the previous trade. The countries that received these profits therefore grew richer according to the standards of the 17th and 18th cent ury Europe. They became socially and politically powerful.(12)
Questions are often asked as to why it is just Europe that benefited much from the colonialism and the Atlantic trade and not the other countries of the world. Why is it that most of explorations were done by the European countries? The answer is simply because certain institutional structures and adequate economic and social growth is needed to induce the exploitation and exploration of opportunities for profit. The strengthening of traders by the Atlantic trade, the non-absolutist initial institutions and the free entry into trading activities overseas by traders, played a vital rule for the rise of Europe. For instance, in Portugal and Spain, there is a strong monarchy that was tightly in control of the monopoly of trade, and therefore only the monarchy and those loyal to it, benefited from the trade.(13) This was totally different from the non-absolutist countries like Britain and the Netherlands where merchants were enriched by the Atlantic trade, and therefore went a head to play an important role in bringing about institutional changes that brought about huge economic growth.(14)
Economic power brings about political power; this is what was experienced in Europe. As commercial interest become richer, they gain the power to demand and obtain reforms. This is because the society needs their economic help, and also the economic power gave them military power or the power to carry out military unrest and pose threats to the regimes. The surge in the Atlantic trade led to the growth of the economic power of the European commercial and industrial interests. It is this power that saw the 16th and 17th century's European powers; the United Provinces-Holland, Great Britain and France, turn their focus to the outside of their borders. They join Portugal and Spain in their colonial pursuits. As it was earlier noted, the main driving factor was commercial power. The 1700s saw a balance of power between many of the European nations as new colonial powers emerged. But this did not last for long because Great Britain eventually gained more territories especially from Spain and France and also it was granted more trading rights that included the monopoly of the remunerative slave trade. Therefore as Marx argues, conflict was also a major contributor to institutional changes in most of the European Nations. That the evolution of many political institutions was as a result of social conflict, which in turn brought about economic change. These changes saw the emergency of new groups with capitalistic or commercial interests, who then fought to bring about institutional changes, to eradicate the menace of arbitrary taxation and state exploitation therefore securing their property rights and also the profits from trade. For instance it has been stated that the movements in population and prices was almost similar in the whole of Europe in the period 1530-1780, but England and the Netherlands were exceptional in that they had successful revolutions politically that gave them greater commercial influence over other European governments. This commercial influence propelled them to greater growth.(15)
The relative power that the various groups in the European society gained helped in the evolution of institutions. This is true because when the bourgeoisie became powerful, there developed a higher likelihood of the emergence of capitalist institutions. For example in England, the main carriers of what was to become a secular and modern society were men of trade in both the towns and the countryside. There was a time when the control of the state was in the hands of people whose self-interest encouraged the growth of market forms that allowed allocation of resources. The political alignments and activities in England's community of merchants together helped in determining the character of national and city conflict in the period the led to the civil war. In 1640, the London politics with the national politics become even more complex, and overseas merchants were of key importance in their roles at both levels. This was boosted by the support that the City of London had for the parliament because of the manpower and resources that it availed. Records showed that new merchant elements were identified, men who had an interest in New England colonization, in the American trade, and also in eliminating the monopoly of the East India and Levant Companies. These were men in new fields of entrepreneurial attempt, men who were annoyed with the political and economic strongholds of the older monopolistic political system.(16)
The rising powers of the merchants are consistent with the economic policies that were made after 1649 and the final triumph of the English parliament. The most notable were the navigation acts of 1651 and 1660 which allocated trade in the British colonies solely to the British merchants and ships. This meant that the British could capture the lucrative slave trade from any nation that was seen to be intruding. This gave them economic power over the other European nations. Countries like Italy did not develop as fast as the Netherlands and Britain because the city states of Italy did not participate in the Atlantic trade and also in colonialism. This was majorly due to problems of accessibility of the Atlantic from Italy. And also the fact that the 16th and 17th centuries were characterized to a large extent by unending wars between the Netherlands, Britain, Spain, France and Portugal all fighting to get control of the Atlantic. Such a situation must have made it totally impractical and hard for the Italians to venture in the trade of the Atlantic especially when compared to the ease with which the Dutch and the British could carry out their pirating and trading activities in the Atlantic. The end result was the failure of Italian city states to directly or indirectly benefit from the Atlantic trade and worse enough was the fact that the Atlantic trade was replacing the Mediterranean trade of the Italians impacting negatively on Italy.(17)
So far we have seen that European process of growth went through a distinctive and interesting pattern. During that important period of European development, the period between the 16th and the 17th century, the growth that happened in the Atlantic ports and the Atlantic nations accounted for much of the differential growth of European nations as compared to other nations of the world. This means that the rise of Europe in that period was basically the rise of nations involved in the Atlantic trade and colonialism. There are arguments that the Atlantic trade did not have a direct effect to the rise of Atlantic Europe. This therefore means that the trade contributed to this trade through an indirect channel, and this was largely the institutional changes that the trade induced. The traded generated immense profits for a portion of the bourgeoisie in Europe, so that the group could demand, obtain, and sustain reforms in the existing institutions enabling them to protect their property rights. With this new found property rights, this group invested more, traded extensively and therefore spurred economic growth. We have also seen that the foundations of capitalism and therefore modern growth lie in the economic and social developments that occurred in Europe from the 16th century onwards. It is true that many factors could have played a big role in the rise of Europe because this is multi-faceted issue that can not be exhaustively addressed by just a few factors.(18)