The peripherality of Middle Eastern bourgeoisies, however, must not conceal that, until the early-nineteenth century, a dynamic and inbred progression towards capitalism was indeed taking place in a number of late-modernising societies. The emergence of internally-oriented national capitalisms is evidenced by analyses of early-modern Egypt.
It has been suggested that commercial-capitalism underpinned the social order and culture of the urban middle classes in Arabo-Ottoman cities since the sixteenth century – much as it had done in Venice and Mediterranean Europe. The agricultural sector in eighteenth-century Egypt, for instance, demonstrates that the conditions for the development of national capitalism existed since the mid-eighteenth century (‘Āmil, 1990a:262). Lawson’s study of the political economy of early-nineteenth century Egypt evidences this highlighting the expansion of the cash crop market (Lawson, 1999). Furthermore, Girgis (n.d.:74) argues that the disintegration of pre-modern social order had indeed started in Egypt due to the rise of national capitalism. Nevertheless, industrialisation in northern Europe and the link to transatlantic trade led to the decline of commercial-capitalism in the mid-eighteenth century. This disrupted the relationship between city and country in the late-modernising Arab world as well as between Western Europe and commercial-capitalist economies of the Mediterranean. In evidencing this Nelly Hanna (2003:27) notes that:
When conditions of commercial capitalism were favourable to the production of urban wealth, then they allowed wealth to filter down to other than merchants, notably tradesmen and producers, the culture of the urban middle class was given an impetus to emerge, develop and gain a level of legitimacy and prominence within the social body. Toward [...] the mid-eighteenth century, when conditions became less favourable, the adverse effects of the economy also had a negative impact on the dynamism of this culture.
This led the way to the infiltration of the Egyptian economy by European capitalism in the mid-nineteenth century, thus, disrupting the endogenous dynamics of the capitalist-modernist transformation. This was exacerbated by direct British intervention in Egypt in 1881. The failure of internally-oriented capitalism, infiltration by European industrial-capitalism and the strengthened linkages between the dominant classes and the European market disrupted inter- class relations and determined who survived the transition to modernity.
This disarticulated political economy can be compared to more contemporary theorisations of peripheral capitalism – a form of capitalism distinguishable from the capitalism of the centre by two fundamental features: the persistence of pre-capitalist MoPs; and, dependence on centre capitalism. Furthermore, in peripheral economies, inter-sectoral linkages are disrupted and the balance between the production of consumer-goods and the production of producer-goods is distorted to the detriment of economic development. Consequently, peripheral capitalisms are characterised by strong linkages between demand in centre-economies (hence, export) and the productive sectors of peripheral economies. Peripheral capitalisms, therefore, witness extravert accumulation of wealth and capital in contrast to introvert accumulation in centre capitalism. Ougaard (1982) further argues that in auto-centred capitalist economies, production occurs on all three levels: the production of consumer goods; the production of the means of production for the consumer-goods industry (such as machinery, instruments of labour and raw materials); and the production of the means of production for the capital-goods or producer-goods industry. The latter levels of production are of particular importance to auto-centred capitalism as they qualitatively reduce dependency and peripherality and reinforce inter-sectoral linkages rather than external linkages. Peripheral economies, on the other hand, are more inclined to produce consumer goods and trade in raw materials needed in auto-centred economies.
The ‘peripheralisation’ of Arab capitalisms can be traced back to the late-medieval era when the then-emerging Ottoman Empire replaced the militaristic, interventionist Mamluk state by highly-decentralised bureaucratic structures. In doing so, the Ottoman Empire abandoned state monopolies and liberalised trade in the post-Tanzimat period. Although intended to appease the merchant class and allow trade profits to trickle down to a wider segment of society, this paved the way for the asymmetric incorporation of Arab economies into the Eurocentric global economy (Hanna, 2002).
Coupled with a noticeable delay in industrialisation, the liberalisation of Arabo-Ottoman economies resulted in economic peripherality as evidenced by trade patterns: by the eighteenth century, for instance, Egypt’s traditional specialisation in the export of luxury goods was substituted by the export of textiles, sugar and other primary products necessary for European industrial-capitalism (Hanna, 1998; 2002). Similarly, by the mid-nineteenth century, Mount Lebanon had replaced its trade partnerships with Egypt and Istanbul with more lucrative partnerships with European capitalists – hence, the overdevelopment of the foreign and tertiary sectors (Gates, 1998; Hallaq, 2009). This discouraged Arab capitalists from investing in the industrial and artisanal sectors and shepherded them towards the sector most associated with European industrial-capitalism – commercial-mercantilist (Raymond, 1973; 2002).
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The socio-political transformations of the late-eighteenth to mid-twentieth century were, thus, propelled by European social, cultural, economic, political and military penetration as Mahdi ‘Āmil notes (1974:191):
the imperialist development of capitalism became the driving force behind our contemporary history into which we did not evolve in the Arab World. Instead, it is from our subordination to imperialist hegemony that our modern history and the modern history of our social order start.
It is important to note that disparities in economy, industry and military extended to include the entire globe by the mid-nineteenth century as Charbel Nahas (1998) explains:
The world, including [the Arab World], watched the Industrial Revolution and imperialist expansion while Europe was ‘dumping’ global markets with its products; and its ships roamed the seas reducing the impact of distance and discovering new trade routes. Meanwhile, European military capabilities swept all others; European patterns of consumption were being generalised unto non-European elites; its merchants and their agents controlled world trade; and world silver and gold reserves poured into European capital markets generating severe economic crises around the globe.