>Michael Perelman wrote:
><<<Keynes, Treatise on Money
>
>139: "The booty brought back by Drake in the Golden Hind may fairly be
>considered the fountain and origin of British foreign investment.
>Elizabeth paid off out of the proceeds the whole of her foreign debt and
>invested a part of the balance (about �42,000) in the Levant Company;
>largely out of the profits of the Levant Company there was formed the East
>India Company, the profits of which during the seventeenth and eighteenth
>centuries were the main foundation of England's foreign connections; and
>so on.>>>
>
>and Ian Murray wrote:
><<"England gained naval superiority over Spain largely through the action
>of the Elizabethan Sea Dogs. These private adventurers, in collusion with
>the English Crown, engaged in all sorts of violent activities directed
>against Spain in the New World. Besides plundering Spanish Ships and
>settlements, such Sea Dogs as Drake, Cavendish, Clifford and Raleigh
>engaged in what might be termed state-sponsored terrorism. ... >>
David Shemano writes:
>The next time I am at Disneyland and ride the "Pirates of the Caribbean,"
>I will soak back and appreciate for the first time the Marxist-historical
>implications.
next time you do so, listen to the lyrics of the song: one of the things
the pirates brag about doing is embezzling. (Alas, the "Pirates" have been
bowdlerized. Instead of chasing a woman (without good intent), one pirate
is trying to get the cake she's carrying.)
>However, is the argument that New World piracy was a "but for" cause of
>English industrial development? IOW, if there were no pirates, England
>would not have developed "capitalism?"
I hope that's not what they're saying. Loot of this sort -- in this case,
specie -- doesn't really help a country develop capitalism. If production
can't be expanded, it simply encourages inflation. The ripping off of gold
from the New World encouraged the so-called "price revolution" (which also
encouraged David Hume and others to develop early versions of monetarism).
Pirate looting of gold from the Spaniards has the same effect. (Stealing of
real commodities doesn't have this negative effect, of course, while the
sabotage effect of privateers on the Spaniards is important.)
There are some exceptions, however. The Mercantilist states wanted to run
balance of payments surpluses -- accumulate specie -- in order to develop a
big war chest. If the money is accumulated in the state's coffers, it
doesn't cause inflation until it's spent.
The other exception results from the fact that until 1800 or so, there was
a steady flow of specie out of Europe and to India and China (and I don't
have time to explain why). The inflow of specie from the New World helped
deal with the resulting illiquidity problems that had encouraged barter and
the dilution of currency.
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
