[How About This Book] Reading Capitalism Through Geography

Development of Capitalism Due to Geographical Factors in Spain, England, and America
Climate Crisis and Growing Inequality: 'Crisis of Capitalism'
Is There a Future for the Global Economy... Time to Reflect

Capitalism is an economic system that recognizes the accumulation of capital through the production and exchange of goods based on private property and market competition principles. Trade holds significant importance because it forms the foundation for profit-seeking through the production and exchange of goods.

This is why the author of Reinterpreting the World History of Capitalism through Geography defines the Age of Discovery, which rewrote the history of trade, as the beginning of capitalism.

In the 15th to 16th centuries, the expansion of the Ottoman Empire led to the closure of the Silk Road trade route. The east-west trade route that connected the Black Sea and the Mediterranean during the Mongol Empire era was cut off. Europe urgently needed to discover new sea routes. While the Islamic Ottoman Empire controlled Eastern Europe, the opposite situation unfolded in Western Europe. In Spain and Portugal, the centuries-long Reconquista movement bore fruit, driving Islamic forces out of the Iberian Peninsula. After expelling the Islamic powers, Spain and Portugal turned their eyes outward. Blocked by the Pyrenees Mountains, advancing eastward into the European continent was difficult. They turned to the seas.

Columbus, sponsored by Spain, set out to discover a new eastern trade route blocked by the Ottoman Empire and unexpectedly discovered the New World. Thanks to the gold and silver from the New World, Spain accumulated enormous wealth. The author of Reinterpreting the World History of Capitalism through Geography explains this as the birth of capitalism.

The silver coin minted by Spain, the Peso de Ocho, served as the key currency during the Age of Discovery. In addition to gold and silver, new goods such as cacao, tobacco, tomatoes, and sugar were introduced from the New World, significantly transforming European society and culture. The Seven Years' War (1756?1763), which plunged the entire European continent into conflict in the 18th century, changed the balance of power in Europe. During the Seven Years' War, Britain's geographic characteristic as an island nation was an advantage. Unlike France, which had to fight intense battles both in overseas colonies and on the European continent, Britain could focus solely on naval warfare.

Britain allied with Prussia, Portugal, and others and won the Seven Years' War. At that time in the 18th century, France was a major power with a population three times larger and an economy twice the size of Britain’s. However, France suffered a significant decline in national power after losing the Seven Years' War, in which it allied with the Habsburg Empire, Spain, Sweden, and others. France lost many overseas colonies, and less than 20 years after its defeat in the Seven Years' War, the French Revolution (1789) erupted, plunging the country into uncontrollable chaos. Britain, capitalizing on its victory in the Seven Years' War, opened several overseas colonial trade routes, including India, laying the foundation to become the world's strongest power. At the same time, just after the end of the Seven Years' War in 1776, James Watt invented the steam engine, which became the catalyst for the Industrial Revolution.

The 18th-century Industrial Revolution was a geographical revolution. Trains and trams, commercialized during the Industrial Revolution, expanded city sizes to an unprecedented scale. Before the Industrial Revolution, cities only expanded within walking distance. Trains and trams dramatically increased human mobility, leading to explosive urban growth after the Industrial Revolution. Human life itself shifted from rural to urban centers. The explosive growth of urban populations led to the formation of markets and the growth of capitalist economies.

The geographical advantages also cannot be ignored as a background for the United States becoming a superpower after the 20th century. The North American continent was rich in natural resources such as crude oil. The expansion of U.S. territory to California was a decisive opportunity for accumulating wealth. This allowed the U.S. to access both the Pacific and Atlantic Oceans simultaneously. The United States was the first country in human history to embrace two oceans at once.

Capitalism evolved from early commercial capitalism to industrial capitalism through the Industrial Revolution, then to welfare capitalism after the Great Depression, and to neoliberalism since the 1980s. Throughout these changes, capitalism withstood the challenge of fascism in the early 20th century and won the systemic competition against communism after World War II. As seen in countries like China and Vietnam, which espouse socialism but have incorporated capitalist elements, the current global economy is a unipolar capitalist system. Yuval Harari, a world-renowned scholar and professor at the Hebrew University of Jerusalem, even describes capitalism as the first religion in history to explain its global influence today.

However, the author points out that capitalism paradoxically faces a greater crisis than ever before. Under the neoliberal system that justifies privatization expansion, tax cuts, welfare budget reductions, and labor flexibilization, problems such as unemployment and wealth disparity are worsening. Globalization, a product of neoliberalism, has widened the gap between developed and developing countries. Although globalization seemed to help developing countries' economies at first glance, it has actually been structured to exploit their labor and hinder capital and technology accumulation. In developed countries, the issue of migrant workers from developing countries is becoming increasingly serious. As a result, far-right parties opposing immigration are gaining ground in various European countries. In the United States, Donald Trump, who opposes immigration and promotes division, is poised to return to the White House after four years.

Above all, the greatest disaster is that environmental destruction caused by humanity’s pursuit of growth has become a boomerang in the form of the climate crisis, threatening human survival itself.

Therefore, the author concludes by questioning whether the global economy has a future. Considering the reappearance of Trump, symbolizing division, and the worsening global warming, no clear solution is visible in the current situation. The author does not offer a definitive solution either, only mentioning that it is time to reconsider neoliberalism and contemplate a new direction.

Reinterpreting the World History of Capitalism through Geography | Written by Lee Dong-min | 288 pages | 19,500 KRW | Galmaenamu