Exploitation, inequality and economic dependence Notes

How did trade create winners and losers?

1. Trade has always linked societies, but it hasn’t always benefited them equally.
2. As global markets expanded from the 1600s through the 1900s, powerful nations used their economic strength, military force, and political influence to shape trade in their favour.
3. The result was a world where some regions grew rich and industrialised, while others became dependent, controlled, or exploited.

How trade created winners

Powerful nations controlled key resources

1. Countries with strong industries, powerful navies, and large empires decided what was traded, where, and on whose terms.
   1. They bought raw materials cheaply.
   2. They sold finished goods at high prices.
   3. They controlled shipping, insurance, and global prices.

Example

• Britain in the 1800s
  • Britain imported cheap cotton from India and the American South while exporting expensive finished textiles worldwide.
  • This made British factories wealthy and helped Britain dominate global markets.

Industrial powers shaped global rules

1. Industrial countries wrote treaties, set tariffs, and used their militaries to enforce access to ports and markets.
2. They forced weaker regions to open their economies.

Example

• “Unequal treaties” in Asia
  • After military victories, Western powers forced China and Japan to sign treaties that lowered tariffs and opened ports to foreign merchants.

How trade created losers

Raw-material dependence

1. Many regions were locked into producing only one or two raw products (like sugar, cotton, coffee, rubber).
2. This stopped them from developing their own industries and made them vulnerable to price swings.

Example

• West African palm oil & cocoa
  • European companies bought these products cheaply while preventing industrialisation, leaving African economies dependent and underdeveloped.

Forced labour and extraction

1. Weaker regions often supplied cheap labour or resources through coercion, slavery, or colonial rule.

Example

• The Atlantic slave trade
  • Millions of enslaved Africans were forced to work in plantations that generated enormous profits for European traders and American plantation owners, while African societies suffered population loss and long-term economic damage.

Blocked industrialization

1. Colonial powers discouraged or banned manufacturing in colonies to stop competition.

Example

• India’s textile industry
  • Before colonisation, India was a world leader in cotton textiles.
  • British rule imposed high tariffs on Indian cloth and flooded India with British factory goods.
  • Result: India’s industry collapsed; the economy became dependent on exporting raw cotton.

Why economic dependence persisted

Unequal bargaining power

1. Countries with:
   1. industrial technology
   2. powerful militaries
   3. capital investment
   4. long-distance ships and railways could dictate trade terms.
2. Regions without these tools had little leverage.

Infrastructure built for extraction

1. Railways, ports, and roads in colonies were designed to move resources out, not develop local economies.

Example

• In British India, the railway system was built mainly to transport cotton, tea, and wheat from inland areas directly to ports like Bombay and Calcutta, where they could be shipped to Britain.
• The routes connected plantations and mines to ports, not Indian towns to each other.
• As a result, the railways boosted British exports but did little to support local Indian industry or regional trade.

Profits flowed outward

1. Wealth created in colonised regions was transferred to imperial centres rather than reinvested locally.

Case study

China and the Opium Trade

• How exploitation began
  • China originally restricted Western merchants to the port of Guangzhou.
  • Britain wanted Chinese tea and silk but lacked goods China wanted in return.
  • British traders began importing opium from India into China, creating mass addiction and draining silver from the Chinese economy.
  • When Chinese officials tried to stop the trade (e.g., Commissioner Lin Zexu), Britain responded with military force, leading to the First Opium War (1839–42).
• Impacts of the unequal treaties
  • Foreign powers gained control of key Chinese ports.
  • Opium importation became legal.
  • China was forced to lower tariffs on foreign goods, damaging domestic industries.
  • British citizens gained extraterritorial rights (they were not subject to Chinese law).
  • The tribute system was abolished, weakening China’s political worldview.
  • Missionaries entered China freely, leading to social tensions.
  • Hong Kong was ceded to Britain.
• Internal consequences in China
  • The Qing dynasty was humiliated and lost legitimacy.
  • Silver outflow damaged the economy and increased poverty.
  • Social unrest exploded: most famously in the Taiping Rebellion (1850–64), which killed up to 20 million people, partly because the weakened Qing struggled to control rebellion.
  • China became semi-colonised, with foreign “spheres of influence” carved out by Britain, France, Germany, Russia, and Japan.
• Why this created long-term dependence
  • China became reliant on Western technology and military aid to maintain order.
  • Its industries couldn’t compete with imported Western goods.
  • Foreign governments controlled trade terms, ports, and taxation.
  • Reforms such as the Self-Strengthening Movement were limited because China tried to modernise without changing political structures.

Case study

Africa and the Transatlantic Slave Trade

• How the trade worked
  • Between the 1500s and 1800s, up to 11 million Africans were taken to the Americas.
  • European traders exchanged weapons, textiles, and manufactured goods for enslaved people captured inland.
  • Captives were marched to coastal ports; many died on the way.
  • Millions perished on the Middle Passage under horrific conditions.
  • Enslaved people were forced to work on plantations producing sugar, cotton, and tobacco: industries that powered European wealth.
• Effects on African societies
  • Depopulation and the loss of young, skilled individuals.
  • Local wars increased as African elites captured people to sell.
  • Traditional leadership and social structures weakened.
  • Economic stagnation: societies relied on selling people rather than developing industries.
  • Exposure to imported weapons intensified internal conflicts.
  • After the trade ended, Africa faced increasing colonial conquest because it was economically weakened and politically divided.
• Effects on Europe and the Americas (the “winners” of this trade system)
  • Slave labour generated massive wealth that funded industrialisation.
  • Ports like Liverpool, Bristol, and Nantes flourished.
  • European factories gained access to plantation raw materials (cotton, sugar).
  • Slave-produced commodities fuelled consumer culture and rising living standards.
  • Profits strengthened European political and military power, enabling colonisation.

The role of aid

1. Trade imbalances often led to humanitarian crises: famines, poverty, medical shortages.
2. Over time, this contributed to the growth of international aid.

Why aid increased in the 20th century

1. Global conflicts (WWI, WWII) created the need for coordinated recovery.
2. Organisations like the League of Nations and later the United Nations built permanent systems for health, welfare, and crisis relief.
3. Aid also became a form of soft power: a way for countries to shape global relationships.

How inequality shaped the modern world

1. Wealth accumulated in Europe, North America, and later Japan.
2. Many regions in Africa, Asia, and Latin America entered the 20th century poor, indebted, or politically dependent.
3. Modern global inequality still reflects these patterns.