The development of capitalism in Egypt

Patrick Clawson,

An article which first came out in 2014 which remains of interest to anyone interested in fundamentally changing the Middle East.

Major work by Patrick Clawson on the structure of Egyptian capitalism and the changes it has undergone throughout its history, arguing that these changes can be understood only as part of developments in international capitalism and the demands of advanced capitalist countries.

In the last two hundred years, the Egyptian economy has undergone qualitative organisational changes, changes more profound than any quantitative increase in output. In 1800, Egyptian society consisted mainly of peasants producing for their own consumption and for tribute payments. Tribute went to tax farmers who effectively ruled the countryside. Today, Egypt has a capitalist economy, in which production is organised by firms. The vast majority of the population must work for wages. The market, not the home, is the source of consumption goods and the destination of production. The aim of production is profit, not the satisfaction of needs.

The central claim of this article is that these changes in the Egyptian economy have been primarily the result of the changing requirements of the advanced capitalist economies. The theory states, in brief, that in the 19th century the search of European capitalist industry for raw materials re-orientated Egyptian agricultural production towards the market, rather than home use. Egyptian industry did not develop, because the European industrial capitalists sought markets, not competitors. But industrial capital gave way to finance capital in the Europe of the early 20th century. Being based on large firms which have finance for expansion, which can spread risks, and which are not tied to one location or industry, finance capital regards the whole world as possible sites for investment in profitable industry. Industrial production in Egypt was encouraged by finance capital from the 1920s on.

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