Sanjay Ruparella’s lucid and compelling talk on the global South can help us to clarify what we mean by capitalism. If the “global South” implies a global capitalist system or project, what was that project? We can think of it as unfolding in two waves: the first began with the discovery of America in 1492 and took the form of the great trading empires; the second began with industrial capitalism in the nineteenth century and continues today. In the first wave, specialization, the division of labor and trade are crucial; in the second, the capital labor relation per se. To be sure, we can think of the two waves as continuous, building on one another. In both cases, capitalism implies increased productivity and growth, as well as increasing inequality.

Only after “the discovery of the new world” can we speak of global empires: the Portuguese, Spanish, Dutch, French, and English, especially. Before we can see attempts to unify the Eurasian ecumene, ( Alexander), to create ecumene-wide trading systems (the Mongols, Russia), and far-reaching empires, (Rome, the Caliphate, China) but nothing with global reach. After 1492 we have trading empires based on such primary commodities as sugar, coffee, cotton, rice, slaves and land. Sub-Saharan Africa was brought into the world system as a source of slaves.

The trading empires created a specialized division of labor and world trade and in doing so created the division between the developed and underdeveloped world. Earlier, long-distance trade was largely luxury trade; now it is commodity production for the masses. The first great expression of the developed/underdeveloped division occurred in the divergence between the increasingly town-based societies of Western Europe and Eastern Europe’s “second serfdom,” large-scale plantations producing primary goods. Soon after, large parts of the world, notably Latin America, were turned into suppliers of primary commodities, while the “core” underwent a consumer revolution — coffee, sweets, tobacco, textiles, etc. The distinction between developed and underdeveloped or core and periphery was further heightened by the distinction between settler-states — North America, Australia, New Zealand — and the “colonial” world, which developed on the basis of primary commodities. The theory of mercantilism, which emphasizes the importance of the state support for mercantile expansion, is the self-explanation of this first wave of capitalist expansion. The theories of dependency and unequal exchange, which argue that underdevelopment is built into development, are its rebellious grandchildren.

The second wave of capitalist expansion began in the nineteenth century, with the industrial revolution (which itself rests on the cotton plantations of the first wave). Its distinctive character is the capital labor relationship (M-C-M’). The key difference between the two waves lies in the nature of wealth-production. To explain the transition from feudalism to capitalism, Marx contrasted the wealth that feudal landowners built up from trade and from the division between town and country to what Marx called “the really revolutionary path” of self-ownership. After the American Civil War Marx and Engels thought America could produce a new, golden age because of the universality of “free labor.” Free labor becomes capitalist labor but it remains free in a way that the labor forms of the trading epoch — tenancy, share-cropping, etc — did not. Meanwhile, mercantilist theories gave way to classical political economy, Marxism and eventually neo-classical economics.

Politically, the first wave had been based on modifications of the absolutist monarchy, such as the British Revolution of 1688, which gave the landowners and great merchants a constitution of sorts, in return for which they allowed themselves to be taxed. The second wave brought the masses into politics, with all their accompanying dynamism and instability. Globally, the second wave became manifest in the emergence of “world powers,” in the second half of the nineteenth century, a world power being a power that has interests everywhere in the world. The conflicts between the world powers led to the two world wars. The resulting cauldron produced communism as well as powerful, developmental states that drew on charismatic leadership — Peron, Nasser, Sukarno — to mobilize the masses. As an attempt to manage the global system the English-based liberal system, which included the gold standard, triumphed with some modifications in the American imperium, which still exists, albeit in a bedraggled form.

Finally, let us situate post-colonialism in this context. Marx had two different theories of history. The first was a stage theory: feudalism is replaced by capitalism. In the second, which can be seen in his writings on ethnicity and nationalism, for example in Ireland, Poland and Russia, the pre-existing history persists after capitalist relations are established. The second theory, which sees time as stratified and multi-dimensional, can be found in such cognate fields of study as geology, archaeology and psychoanalysis.