COLONIAL HISTORY

There is no doubt that the era of colonialism has always represented a caesura for Third World societies. Although the impact of colonialism varies in different countries and regions, the era generally marked the beginning of far-reaching changes for colonized societies. What is of particular interest here is the destruction of the “natural economy”, that is, an economy with dominating use-value production and limited trade relations, in favour of the development and establishment of the market economy.

The most important mechanisms of this destruction since the era of colonialism have been:

1. • the intervention of the colonial state;

2. • the internal monetization of traditional social relations;

3. • an increasing dependency on industrial products in place of traditional self-produced goods;

4. • the development of new tastes and needs;

5. • the destruction of the ecological equilibrium;

6. • the disintegration of the domestic economy, social obligations, and traditional forms of reciprocal and collective labour.

(Elwert and Wong 1979; see also Evers, Clauss, and Wong 1984)

This does not mean that all these mechanisms have worked harmoniously. They were also dependent on other influences, such as the pre-capitalist social background and existing internal structures.

For a better understanding of the significance of this process of social transformation, we refer to the work of Polanyi (1971, 1979). Although his research is focused on the European context, particularly with regard to the explanation of the economic crises at the beginning of the twentieth century, a modified use of his theoretical reflections on so-called underdeveloped societies seems justifiable. His main issue was the potential destruction of social structures in the market-establishing process. He pointed out that the market principle as it was established in Europe during the eighteenth century effected a particular transformation of all societies concerned. It is one of Polanyi's fundamental statements that in pre-capitalist societies the economy was always embedded in social relations, while with the domination of the market principle, social relations are embedded in the economy. This means the establishment of the market principle as such results in a reversal of the relations between society and the economy.