•

the British economy emerged over the course of the 19th century as the core of the core of an emerging capitalist world system

•

co-dependency between Britain and India

•

although India's participation in the system was not entirely voluntary

•

Indians because to resist the controls that the British imposed on the Indian economy

•

the reason why the controls were there because

•

Britain had enjoyed an trading advantage in the world economy

•

faced growing competition, e.g. the United States, Germany, Japan, Russia

•

so to compensate from their trade deficits with the rest of the world, they enforced a trade surplus with India

•

in economic terms, three things were circulating globally

•

people

•

not just free-wage labor emerging

•

commodities

•

free flow of commodities

•

capital

•

free flow of capital

•

the capitalist class was emerging at the top of the system

•

people making money with money

•

how money circulated around the world

•

emergence of a new global class of capitalists

•

allowed Great Britain to compensate for its large trade deficits

•

capitalists were making investments around the world

•

Britain became the banker of the world in the 19th century

•

also vast scores of petty capitalists involved

•

the ones really kept the system going

•

a modest, almost pedestrian form of capitalism

•

the Gujarati merchants of India

•

emerged of import purveyors of money

•

lent money to the cultivators in the hinterlands of poppy plants

•

paid them back with raw opium

•

became important opium traders

•

sold their wares for money in Bombay

•

a network of money and opium flowing to and from the hinterlands and cities in India

•

began to bypass the East India Company and sold directly to China

•

vast trading systems running throughout India

•

by the middle of the century, these networks were openly challenging a hobbled East India company

•

often operating with Portuguese merchants in Goa

•

this infrastructure of credit and merchant transactions brought the Indian hinterlands into a relationship with Chinese consumers of opium

•

this global, petty capitalism began to thrive

•

local trading being hooked up to global trading

•

global capitalist class

•

joint-stock companies

•

important purveyors of capital commodities around the world

•

important machines for moving capital around

•

pools of savings would begin to collect in places like Amsterdam and London

•

investments could be put into companies so they could expand globally

•

after 1815, there was a transformation in the ways in which capital markets functioned

•

a transformation in the logic of the market places

•

in 1821, the bank of England made its bank notes convertible into gold

•

gave stability to the sterling

•

a world-wide measure of value to money

•

nation building meant building national currencies

•

led to the emergence of a new class

•

a merchant banking class

•

a demand for funds to build e.g. railroads

•

merchant bankers played an important role in mediating the relationship between the supply of capital and demand for capital

•

and the most important entrepôt for capital was London

•

banks owned by influential families

•

the Rothchilds

•

banks become lenders themselves

•

take their capital and choose which firms to support in order to increase profits

•

important for railroads, canals

•

ventures on this scale were capital-intensive

•

we needed these bankers to play these kinds of roles

•

by 1914 London became the center of international lending

•

by 1914: most funds went to

•

continental Europe

•

Russia into Persia

•

single largest borrower was: the United States

•

the world's largest borrower

•

approximately a third of all lending

•

in 20th century, less reliant on conquest and colonization

•

this had profound effects on individual economies, peoples, and the environment