Again, I must disagree. The major powers were hammering each other all over the colonial world for more than a century, until roughly 1990.
Anyhow, first, Doug, Hitler did lots to 'stimulate growth' by devalorizing capitals all around him, for awhile; FDR followed up with the military-industrial complex, which kickstarted accumulation quite nicely by their standards. Desperate efforts to stimulate growth is what intensifies the geopolitical tensions during times of capitalist crisis, right?
Second, you really should come around for a visit to Southern Africa, comrade, because in that last clause you're simply discounting the devalorization of 'human capital' (on the scale of what hit the East Bloc a century later). If this region teaches political economists anything, it's that Northern capital can fly in - thanks to overaccumulation abroad - and in search of 'stimulating growth', set up a system (e.g. Rhodesian or SA migrant-labour apartheid) that devalorizes life forever after (just think of AIDS and migrancy as one implication). Since you don't like reductionism, here's an excerpt from a more micro-oriented PhD case study I did (sitting on your bookshelf, Doug: "Uneven Zimbabwe"), covering roughly 1873-1902, that era of northern overaccumulation, crisis displacement via Imperialism (and neoliberalism or as it was known then, Free Trade), and then of course the inevitable crash of finance and rebuilding following real-sector devalorization:
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The financial basis for uneven regional development
The uneven direction and tempo of accumulation during this imperial era was profoundly influenced by the power of finance. The huge detour in the form of capitalist development orchestrated by the BSAC would not have transpired in quite this way were it not for the capacity of financiers ─ the London-oriented South African banks and stock exchange speculators ─ to segment the emerging geographical landscape of Southern Africa. In what is now South Africa, for example, in the spirited battle over turf waged by British imperial capital against Afrikaner farmers and the Transvaal Republic in the 1880s and 1890s, bankers were on the front line, and won convincingly only with the takeover of President Kruger’s National Bank during the Boer War (1899-1902). Lenders had infused small mining companies and farmers with excessive amounts of credit, which were then just as rapidly withdrawn during periodic overproduction crises, leading to waves of bankruptcies and an intense centralisation of mining production and land holdings. Keegan (1986, 44,97) reports that in the Orange Free State (southwest of the Transvaal) “a chain of debt leading to the wholesalers was the basis of agrarian exchange relationships... The grip of mortgage capital was an irksome burden, and farmers were deeply conscious of the greatly unequal exchange relations that their own dependence on the credit of others imposed.” Afrikaner nationalism was born of resistance to the power bloc comprising of English-based financial and mining capital and the Cape government. This political and sometimes military struggle was an important impetus for Rhodes’ northward thrust to Southern Rhodesia, which skirted the then Boer-controlled Transvaal. As was the case in earlier periods throughout the Cape, Natal and the Afrikaner republics, it was the Cape Town-based Standard Chartered Bank ─ originally founded with London capital in 1860 ─ that was most important in the geographical extension of financial power, earning it the moniker “gigantic devil-fish” by a resentful Broederbond, which in turn led Standard to drop “British” from its name in 1883 (Schumann, 1938; Gilliomee, 1989; Mabin, 1989). The close meshing of Standard with Rhodes’ empire served the bank both because by 1900 it held deposits in Southern Rhodesia of £2.5 million against advances of just £250,000 (Standard attributed this imbalance to the difficulty of assessing underlying values of land and mines), and because it controlled nearly all local gold assaying and purchasing. Rhodes’ close personal friendship with Standard’s general manager, Lewis Michell, was one reason the bank opened its first branch in Salisbury just five months after the construction of a telegraph line in 1892. This offered the BSAC two crucial services: an acceptable currency supply to replace the BSAC’s cheques (until then the chief medium of exchange); and local bank accounts which enabled money to be promptly transferred and thus “helped to put an end to the prevailing system of easy credit” (Standard Bank, 1967, 20). Indeed, according to one report (Irvine, 1957), “A feature of the early days of banking in the Rhodesias was a drastic scarcity of ready cash. So bad was the position that an extensive and vicious credit system quickly grew, accelerated by the scarcity of goods and heavy transport costs.” The other influence wrought by financial power was the easy availability of foreign portfolio funding for local stock markets, which stemmed from a lengthy international economic depression, chronic excess financial liquidity (a symptom of general overaccumulation), and the global hegemony enjoyed by City of London financiers. Surplus capital was still concentrated in the London stock market in the early 1890s (Anderson, 1987), and flowed easily to the high-profile, well-tested initiatives of Rhodes. This was a period, Ian Phimister (1992, 7) contends, of increasing geopolitical turbulence across Africa emanating from “capitalism’s uneven development during the last third of the nineteenth century, particularly the City of London’s crucial role in mediating the development of a world economic system.” As Britain faced industrial decline during the 1870s in both absolute and relative terms, manufacturers unable to compete in European markets joined ascendant London financial and commercial interests in promoting Free Trade philosophy (in contrast to the protectionism of other Europeans and the United States). Cain and Hopkins (1980, 484-485) report that as London financial power increased, and as the prospects for domestic tariff protection waned, “industrial interests in Britain shifted, around 1880, into decisive support for the acquisition of new markets in Asia and Africa.” Indeed it is here, and in a parallel crisis of French merchant capital in West Africa, that Phimister locates the well-spring of the “Scramble for Africa” which had such an important role in the region’s subsequent development. No matter how Africa was partitioned, the funding flows that fuelled Rhodes’ adventures also reflected the last great speculative financial splurge of the 1870s-1890s global economic crisis. Some 35% of all nation-states had overborrowed during the 1870s and were in default by 1880. This figure dropped to 10% by 1890 thanks to British international financial coordination, and the 1890s were characterised by unprecedented numbers of debt settlements on defaulted foreign bonds. Nevertheless speculative surges continued during the decade, since the conditions for a new round of accumulation were not yet in place in most of the world. As a result, the percentage of nation-states in default rose again to 20% in the late 1890s (Suter, 1992, 64,87,90). It was in this global context that the City of London witnessed a “combination of sentiment, patriotism and opportunities for gain,” as economic historian Sally Herbert Frankel (1938, 20) put it. “Only against such a background can the almost incredible financial exploits of a Rhodes be understood, or the spasmodic, and at times exaggerated, bursts of capital investment which created the mineral industries of Africa be explained.” The London capital investment in hundreds of mining and development company shares during this early period of speculation fundamentally altered the course of Southern Rhodesia’s development. Thus Charles van Onselen (1976, 14) concludes that “the history of the mining industry between 1890 and 1903 is a story of the fluctuating fortunes of speculative capital.” And drawing on accounts which note the appearance of an “enormous bladder unduly inflated and suddenly pricked,” Phimister (1988a) surmises that anxious BSAC overseas investors’ share price considerations were the basis for gross fraud, manipulation of the financial press, a smear campaign against Winston Churchill (whose mining experts were appropriately dubious about prospects), and, in part, the 1893 war against the Ndebele. Rhodes’ DeBeers diamond company in South Africa assisted with bailout loans to the BSAC. Soon a Bulawayo stock market was established, became closely linked to Johannesburg, and itself promptly registered an astonishing £15 million worth of shares in 1894-1895.
Financial devaluation and geographical restructuring
The frantic pace could not be sustained, particularly in view of the speculative ebb and flow of capital and the concurrent geopolitical tensions emanating from South Africa. In 1898, comments Phimister (1988a, 20-21),
the flow of investment capital evaporated along with the value of Rhodesian mining and development company shares. This collapse of the speculative bubble forced the BSAC to try, much more seriously this time, to foster genuine mining activity. In short, the time had come to curb what critics had slated as “trading upon the unknown, this traffic in fairy tales, this capitalization of dreams.” The new situation was to be one in which the large capitalist “should be encouraged, but only as a mining and industrial factor, not as a speculator pure and simple.”
The Anglo-Boer War (1899-1902) dashed any further short-range speculative dreams, notwithstanding a major railroad investment programme financed mainly by foreign bonds in the late 1890s. In 1903, in Arrighi’s (1973a, 184) words, “The subordination of production to speculation ceased, and efforts were directed at reducing costs in order to enhance the profitability of those enterprises which had survived the crisis.” According to the Standard Chartered Bank’s Sir Lewis Michell, the share markets were “in no mood to absorb fresh issues of speculative capital” at that stage, mainly because the BSAC had not yet, after years of vigorous repression, secured a guaranteed cheap labour force for mining (Phimister, 1988a, 46). This state of affairs took some decades to remedy. In retrospect, the role of finance had been decisive. Between 1891 and 1904, the London and Bulawayo stock listings of companies in the new territory accounted for the immense sum of £44.5 million, and cash investments were at least £10 million (Frankel, 1938, 150-157). The early rush of capital made an indelible impact, because by rapidly broaching the limits of financial speculation, the BSAC was forced to make a more decisive commitment to African proletarianisation. Arrighi (1973b, 180-184) uses just this experience to refute the equilibrium labour market model of neo-classical economists, especially in explaining why African wages rose from 1893 to 1903 and were then stagnant until the 1940s: “The reason cannot be sought in the operation of market forces. The different behaviour of African wages before and after 1903 must instead be traced to the structural changes that occurred in the Rhodesian capitalist sector during the 1903-04 crisis.” Finance also forced the gradual geographical reorganisation of the territory, as a result of efforts to gain a return on land titles which had failed in their previous role as speculative investment paper. Indeed, in a sea-change that lasted the next few decades, the emphasis of capital accumulation shifted from pure mining extraction to a combination of mining and agriculture. The BSAC transformed the territory’s geography in order to make good the sunken rail and land investments, mainly through marketing cut-rate land to settlers (Ndlela, 1980, 27; Palmer, 1977a, 1977b). As a consequence, development or mining company shares were either wiped off the map to reflect their failure, or devalued and transformed into a longer-term commitment to undergird land titles with cash crop production. This was not easy, because while the excessive flows of finance into Southern Rhodesia paved the way for this devaluation, the equally intemperate ebb tide of finance generally hindered the spatial expansion of capitalism into rural areas. Given the fortunes lost on land speculation, financiers like Standard Chartered Bank were so reluctant to pour medium- and long-term capital into agricultural credit that a Land Bank had to be established in 1912.
Uneven shifts in accumulation
In its first encounter with Southern Rhodesia, international financial power thus helped to establish a terribly uneven form of sectoral and spatial development. But the concentration of resources enjoyed by the BSAC subsequently made possible, at least temporarily, a more sustained process of capital accumulation. Establishing the sufficient conditions for broad-based accumulation ─ particularly an appropriate local class structure undergirded by cheap labour supplies and an imported agricultural bourgeoisie ─ was a responsibility the BSAC possessed through administrative rights over the region granted by the British government from 1890 to 1923. The BSAC exercised substantial control over not only the gold and coal mines and railways, but also over citrus plantations, timber, some banking and insurance, and vast amounts of land. As the regional economy began picking up again, other major South African and British companies eventually followed, and became involved in asbestos, chrome, tobacco and land speculation. In 1909, for example, what is now Lonrho was founded as the London and Rhodesia Mining and Land Company. It is important to note that unlike in other African settings where foreign capital exploited and extracted resources and then moved on, the existence of a substantial agricultural bourgeoisie in Southern Rhodesia infused a decidedly “national” character. By 1902, three quarters of prime agricultural land was expropriated by whites. It was by no means virgin land. To one report that the territory’s half million Africans harvested over 600,000 acres of crops, Rhodes commented, “it shows what an important asset the native is” (Phimister, 1975, 258). Yet the agricultural settler-bourgeoisie simultaneously discovered the need for an internal consumer market (whether settler or African) for the increasing farm produce. This was one reason for an early industrialisation effort, which was unsuccessful because it conflicted with the short run needs of the BSAC and foreign capital generally for sustained cheap labour supplies. “This represents the inconsistency inherent in the relations between international and national capitalism in pre-World War II Rhodesia,” argues Arrighi (1973a, 341). “The speculative interests [ie, landholdings] of the former implied the expansion of the latter, but such an expansion might have threatened its more important productive interests.” And still another source of conflict was the differential level of concentration in sectors controlled by (competitive) national capital and (relatively monopolistic) foreign capital. Such uneven sectoral development would haunt the colony well into the future. One overriding concern shared by the emerging national bourgeoisie and foreign capital was expanding the supply of low cost labour. To this end, the initial rise in African wages from 1893 1903 was “solved” by Native Commissioners’ intensified coercion of Africans into labour markets, through various well-known methods. It was here that financial power was asserted at the microeconomic scale, since once mine workers were installed in compounds, a well-tested means of keeping them there was debt peonage to the mine store, even for such basic items as food and clothing. Van Onselen (1976, 162,164-166) explains:
Rhodesian mine owners and their commercial allies were quick to recognise and exploit this weakness: through extending credit to increasingly deprived black workers, they found the means to lengthen the labour cycle and enhance the process of proletarianisation. Peasants who had specifically left the rural areas with the purpose of earning cash found themselves trapped by the credit system in its various guises and were described as “demoralised.” Workers from Nyasaland ensnared in the web of debt of the Rhodesian compounds spoke of their deep shame in going home without cash or goods for their kin. In some respects at least, the credit system as much as the compounds themselves were responsible for the passivity, frustration and despair of the workers.... As the cost of living rose and real wages declined, so the credit system spread throughout the compounds. So pervasive was the black workers’ need for credit that their books of “work tickets” were printed with a special provision made for a space into which credit transactions were entered by the mine store. In many cases workers pledged their entire wages against the credit thus provided.
As such financial controls were generalised as part of an overwhelmingly repressive compound system, African labour became relatively pliable and in good supply, and by 1922 wages were lower than in 1904. As a side effect of measures such as cattle-dipping and grazing fees, African peasant food production declined drastically. In sum, African labour markets went from discretionary to necessary as the BSAC expanded and a variety of other economic interests emerged. Arrighi (1973b, 183-214) argues that the dichotomy of development and underdevelopment which permeated settler/African relations “was less an `original state,’ progressively reduced by market forces, than it was the outcome of the development of capitalism itself.” Similarly, Frankel’s (1938, 14) exhaustive study of “investment and monocultures” led him to conclude that “there are limits to the extent to which it is possible to hasten returns to capital already invested. For the attempts to do so are likely to lead, directly or indirectly, to those systems of production which involve a large measure of direct or indirect compulsion.”