The Macroeconomics of Economic Subordination and Drain

By the advent of the industrial revolution, Western European nations had already developed commercial relations with most of the countries of the rest of the world. A large number of these relationships were those of an imperial power’s relationship with a subject nation, but they were qualitatively different from those of classical imperial powers like Rome. These were a consequence of expanding commercial capitalism rather than a politico-military complex. This gave them a characteristic commercial bias with manipulation of the market power as the main instrument of the relationship. This had a further interesting consequence. Even when the political empires ceased to exist the economic instruments forged remained effective and could easily be transformed to suit a new geopolitical situation. This particular commercial capitalism was primarily interested in the imports of agricultural and mineral raw materials and the export of ‘services’ and manufactured goods.