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About this book

The book sets out to explore the economic motivations of imperial expansion under capitalism. This undoubtedly is related to two fundamental research questions in economic sciences. First, what factors explain the divergence in living standards across countries under the capitalist economic system? Second, what ensures internal and external stability of the capitalist economic system? The book adopts a unified approach to address these questions. Using the standard growth model it shows that improvements in living standards are dependent on access to raw materials, labour, capital, technology, and perhaps most importantly 'economies of scale'. Empires ensure scale economy through guaranteed access to markets and raw materials. The stability of the system depends on growth and distribution and it is not possible to have one without the other. However, the quest for growth and imperial expansion implies that one empire invariably comes into conflict with another. This is perhaps the most unstable and potentially dangerous characteristic of the capitalist system. Using extensive historical accounts the book shows that this inherent tension can be best managed by acknowledging mutual spheres of influence within the international system along the lines of the 1815 Vienna Congress. This timely publication addresses not only students and scholars of economics, geography, political science, and history, but also general readers interested in a better understanding of economic development, international relations, and the history of global capitalism.

Table of Contents

Frontmatter

Chapter 1. Capitalism and Elite Feud: A Short Introduction

Abstract
This chapter presents a short introduction and chapter wise summary. The book sets out to confront the question what motivates imperial expansion under the capitalist economic system? In particular, it focuses on the economic motivations of expansion. This undoubtedly is related to two fundamental research questions in economic sciences. First, what factors explain the divergence in living standards across countries? Second, what ensures internal and external stability of the capitalist economic system? Overall, the book is divided into five parts. Part I presents a theoretical framework. Part II deals with the history of Early Modern and Modern Europe. Part III deals with the history of the Post-war period till the present. Part IV concludes with an analysis of the geopolitical implications of COVID 19 and some predictions for the future. Part V presents a literature survey.
Sambit Bhattacharyya

Theoretical Framework

Frontmatter

Chapter 2. A Unified Theory of Rent, Elite Feud, and Imperial Expansion

Abstract
This chapter presents the theoretical framework. The framework addresses two fundamental questions in economic sciences. What factors explain the divergence in living standards across countries and what ensures internal and external stability of the capitalist economic system? The framework adopts a non-technical and unified approach. Using the neoclassical growth model, it shows that economic growth is dependent on access to raw materials, labour, capital, technology, and perhaps most importantly ‘economies of scale’. Then it modifies the neoclassical growth model by introducing power relations (both internal and external to a nation), which ensures scale economies through guaranteed access to markets and raw materials. Thus, imperial expansion is a natural consequence of the capitalist economic system. The stability of the system depends on growth and distribution and it is not possible to have one without the other. However, the quest for growth and imperial expansion implies one empire invariably enters into conflict with another empire. Such inherent tension in the capitalist system can be best managed by acknowledging great power spheres of influence.
Sambit Bhattacharyya

Rent, Elite Feuds and Imperial Expansion in Early Modern and Modern Europe

Frontmatter

Chapter 3. Atlanticism, the Slave Trade, and the Westward Expansion of Western Europe

Abstract
This chapter charts the history of Atlanticism and slave trade in Western Europe. It describes what prompted the Spanish and the Portuguese to engage in Atlantic or westward expansion. It covers Portuguese and Spanish engagements in the maritime spice, precious metals, cotton textile, and silk trade connecting the continents of Asia, Africa, and Latin America. It describes the process of takeover of this trade by the Dutch and then the British. It covers the history of maritime trade in goods, commodities, and slaves between Europe, Africa, Asia, and Latin America. It highlights imperial competition and elite feuds in the form of Anglo-Hispanic wars, Anglo-French wars, Anglo-Dutch conflict, and the American War of Independence as a by-product of this trade. It pays special attention to the history of the relationship between imperial elites and settlers in the new world.
Sambit Bhattacharyya

Chapter 4. The Adventures and Misadventures of Expansion in Eastern and Central Europe

Abstract
This chapter covers the history of eastward expansion attempts by imperial Sweden and Polish–Lithuanian Commonwealth. It also covers the history of Russo-Turkic wars and expansionism by the Russian and Ottoman empires. The Crimean War between the Russian, Ottoman, Austro-Hungarian, British, and French empires receives special attention as this is a prime example of expansionism by the European empires in the dying days of the Ottomans. The chapter emphasises that one of the key motives of this conflict is to share the spoils of the disintegrating Ottoman Empire. In addition, this chapter examines the Napoleonic invasion of Russia and the broader Napoleonic wars. The defeat of Bonaparte initiated the concert of Europe, an important institution that preserved peace in the continent for almost a century. Finally, this chapter discusses the role of the Westphalian system in preserving peace under competing imperial interests.
Sambit Bhattacharyya

Chapter 5. Western European Expansionism in India, China, and Indonesia

Abstract
This chapter charts the history of expansionist adventures of European Colonial Powers in India, Indonesia, and China. The chapter focuses on the relationship between the colonial elite and the natives. It analyses the theories of client patron relationships and the role of special events such as the battle of Plassey and the Mutiny.
Sambit Bhattacharyya

Chapter 6. Expansionism in the American and Australian Colonies

Abstract
This chapter covers expansionism in the American and Australian continents. Following independence from Britain, the Thirteen American colonies expanded both west and southwards gaining territory from France, Spain, and Mexico. A similar pattern appeared in Australia where penal colonies in the states of New South Wales and Tasmania and settler colonies in the states of Victoria and South Australia transformed into a large continental state.
Sambit Bhattacharyya

Chapter 7. Expansionism, Russian Revolution, and the Two World Wars

Abstract
The collapse of the international system (the concert of Europe) that managed competing European imperial interests ushered in an era of uncertainty and extremely violent imperial conflicts. This had catastrophic consequences for both elites and non-elites in Europe and the rest of the world. This chapter is broadly divided into three parts. The first part deals with the period leading up to World War I. This is followed by a discussion of the Bolshevik Revolution and the formation of the Soviet Union. Finally, the chapter ends with the audit of the World War II history (which is effectively a continuation of World War I). Key military and political events leading up to World War II are analysed. The toxic ethno-nationalist ideology of German exceptionalism as promoted by the National Socialists is examined. Key economic events such as the great depression and the role of the financial elites are also discussed in this context.
Sambit Bhattacharyya

The Post War Period

Frontmatter

Chapter 8. Cold War Rivalry in a Bipolar World

Abstract
This chapter covers the history of the cold war. It starts from the events such as the fall of Berlin and subsequent division of Berlin as the genesis of the cold war. It examines the Bretton Woods system, reconstruction of post-war Europe (predominantly Britain, Germany, and France), and the usage of the dollar as the currency for international commerce and maintaining reserves. This chapter examines the economic benefits accruing to the American financial elites under this new system. It also examines to what extent USSR’s refusal to participate in the Bretton Woods financial and economic system transpired into the cold war. The Cuban Missile crisis, Soviet invasion of Czechoslovakia and Afghanistan, the Vietnam War, the Korean War, Sino-Soviet Split, the Oil Standard, and Sino-American Rapprochement are also analysed.
Sambit Bhattacharyya

Chapter 9. Dissolution of the USSR and Russian Decline in the 1990s

Abstract
This chapter covers the episodes leading up to the dissolution of the USSR. In particular, it analyses the impact of political, economic, and social policies such as Perestroika and Glasnost. This is followed by analysis of events surrounding the unconstitutional dissolution of the USSR and the rise of Boris Yeltsin as the new leader. The chapter analyses foreign policy of the Yeltsin government in the 1990s along with domestic economic policies of privatization and liberalisation led by Yegor Gaidar and Anatoly Chubais. Special focus is given to the economic events leading up to the Russian Bond crisis and default in 1998.
Sambit Bhattacharyya

Chapter 10. End of History and Exceptionalism: International System After 1991

Abstract
This chapter focuses on the events after 1991. The withdrawal of the USSR from Eastern Europe created enormous expansion opportunities for the American and Western hegemonic interests. This period oversaw economic and territorial expansions of the European Union. The financial, trade, and military architecture of this expansion is discussed in detail. The role of the dollar as the currency that underpins this system is explored. The role of monetary policy is discussed in conjunction with trade and security policies. I show how these policies ran their course over the next three decades as diminishing returns set in. Excessive reliance on credit creation and service sector growth brought volatility and financial crisis of 2000, 2008, and beyond. The issue of offshoring jobs to China and the Asia Pacific and their subsequent impact on the American labour market and income is discussed. The cold war origins of this policy is revisited along with internal political economy factors. The chapter covers the long-term consequences of replacing income with credit in order to support consumption. In other words, it entertains the thesis how excessive reliance on the monetary policy credit channel leads to asset price bubbles. On the national security side, special attention is given to conflicts in the Middle East (Iraq, Libya, Syria, Afghanistan), and Yugoslavia. Attention is given to tensions in the South China Sea and the Korean Peninsula. Ever expanding military and security budget, growing national debt, and the stability of the national currency is analysed.
“We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors … and you, all of you, will be left to just study what we do.” Karl Rove, Senior Advisor and White House Deputy Chief of Staff, President George W. Bush Administration.
Sambit Bhattacharyya

Chapter 11. The Rise of China, India, and Russia: The Building Blocks of a New International System

Abstract
This chapter analyses the spectacular rise of China as a global economic powerhouse. This narrative is entertained in conjunction with the rise of India, Russia, and the BRICS as a group. The chapter discusses ramifications of new international institutions such as the New Development Bank (BRICS Bank), Asian Infrastructure Investment and Development Bank (AIIDB), the Shanghai Cooperation Organisation (SCO), and the Eurasian Economic Union (EAEU). Infrastructure initiative such as the China led Belt and Road (OBOR or BRI) and the Russia–India–Iran North-South corridor is discussed. This analysis is undertaken in the backdrop of Asian Development Bank’s estimate that Asia would need $1.7 trillion annually to sustain its growth momentum.
Sambit Bhattacharyya

Going Forward: What to Expect?

Frontmatter

Chapter 12. Rivalry, Expansionism, and the Future of the International System

Abstract
This chapter revisits the main thesis of the book—capitalism is an expansionist system fraught with risks of violent confrontation. History should guide us to manage these conflicts effectively and draw lessons from them. Barring major armed or nuclear conflicts (flashpoints of such incidents are many), the world will perhaps converge towards multipolarity whereby the economic and political powers of the BRICS nations are likely to increase at the expense of Western Europe and the United States. This process will be accelerated by the ongoing public health crisis and the global economic crisis. The international trade and financial systems are also likely to change. Whether this transition will take place in a peaceful and orderly manner is an open question. Given the dangers of a nuclear-armed great power conflict, it is likely that a Thucydides’ Trap would be avoided this time.
‘The Coronavirus pandemic will forever alter the world order. The United States must protect its citizens from disease while starting the urgent work of planning for a new epoch’. Henry A. Kissinger (2020)
Sambit Bhattacharyya

A Survey of the Literature

Frontmatter

Chapter 13. Long-Run Economic Development: A Survey of the Literature

Abstract
This chapter presents a review of the literature on long-run economic development. It may not be exhaustive and I am sure I have missed many. Nevertheless, this should offer the reader a wide spectrum of views in this literature.
Sambit Bhattacharyya

Backmatter

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