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Lecture 7

AS.190.209 Lecture Notes - Lecture 7: Underconsumption, Mercantilism

AS Political Science
Course Code
David, Steven R

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September 21, 2015
Imperialism & the Scramble for Africa
Examine the economic motives rooted in capitalism for imperialism – Marxist and
Criticize Marxist and Liberal explanations
Cover the difference between old and new imperialism
Imperialism: policy of extending rule or authority over foreign territories. Old
imperialism occurred during the 16th and 18th centuries. First, you would have
explorers find the lands, conquerors would come and subjugate the indigenous
people, merchants and traders would establish businesses, the military would
protect the businesses, and finally settlers would come in and establish settlements
in these lands. Glory, gold, and god motivate old imperialism. The quest for gold was
the basis of the mercantilist theory. Mercantilism is the regulation of economic life
to increase state power. It meant a favorable balance of trade (export more than
import  accumulate stores of gold in treasury). Colonies in theory allowed a
monopoly of trade of raw materials. Mercantilist theory lost favor over time 
especially when Adam Smith critiqued it. He argued that national wealth was
determined not by how much gold you accumulated, but the amount of goods
capable of satisfying your people’s needs. The best ways for this to happen was free
trade – have everyone trade in the production of what they specialize in. Engaging in
imperialist policy to take over lands for your exclusive use was seen as not
economically beneficial. After a decline in imperialism, there was once again a big
spurt especially between 1870 and 1900. In 1870, most of the world was not under
foreign control; by 1900, virtually the entire world was colonized – in 30 years. This
new imperialism was especially pronounced. In 1900, only two countries in Africa
were not under direct foreign control – Liberia and Ethiopia. When Africa was
colonized, it was done so without any regard to ethnicity or nationality. New
imperialist powers emerged, such as Germany, the US, Japan. In addition, new
colonized lands that were not hospitable to Europeans marked new imperialism.
Tropical lands and jungles became locales for European settlement. Finally, this new
imperialism was marked by brutality. Why all of the sudden did a group of diverse
countries frantically try to divide up the rest of the world – especially Africa?
Economic explanation: 1) Marxist – imperialism was the inevitable product of
capitalism; 2) Liberal – imperialism was an outgrowth of capitalism, but states could
take steps to prevent themselves from becoming imperialistic (defects in capitalism
could be repaired so that imperialism was not inevitably a response to capitalism).
Both Marxist and Liberal theories agreed that capitalism was at the root of
imperialism. Both agreed that there was no coincidence in the timing – the
Industrial Revolution had put capitalist states in a new stage, which required raw
materials, markets, and outlets for investment, which in turn necessitated
imperialism. Both also agreed that capitalist societies faced a declining rate of profit
due to stagnating economies. Foreign trade and investment via imperialist policies
were seen as a way to deal with the crisis. Why was there a crisis in capitalism?
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