It is very important to understand the process of capitalist penetration of African economies. The process is easily confused with its effects. For instance, it can be confused with economic domination.

African economies were and are dominated, but the domination is the effect of the particular manner in which they have been integrated into the Western capitalist system. Much the same thing might be said of dependence. The dependence of African economies is the effect of the integration of African economies into the world capitalist system and not the essence of this process of integration. The salient feature of the process under review is that it ‘joined’ African economies to the Western capitalist economies in what was essentially an organic relationship. This process was brought about by colonialism, but that is not to say that it is a necessary effect of colonialism, it was just the effect of the particular mode of articulation of colonialism in Africa. What was this particular mode of articulation of colonialism and how did it bring about the process of integration? This question will be considered fewer than three headings: the monetization of African economies, the imperialism of colonial trade, and metropolitan investment and infrastructure development.


A non-monetized economy cannot really be integrated into a capitalist economy. The monetization of a pre-capitalist economy is necessary for its integration into a capitalist one. As has been shown earlier, the essence of the capitalist mode of production is that it penetrates and takes over the production process. To say that capital has taken over production means that production is geared to the output of commodities or, what is the same thing that production occurs for the purpose of exchange. This process, which may be called pervasive commodification, requires a universal medium of exchange – money.

The inadequacies of these pre-colonial currencies had become very serious by the nineteenth century and they began to decline rapidly, not only because of their inherent weaknesses but also because of other developments. It was now much cheaper, because of technical advances and the availability of new sources of supply, to produce and deliver them. The tendency to over-issue was reinforced by competition among European firms for the African trade. The result was a serious depreciation of the value of these currencies, and inevitably confidence in them was lost. At the same time European currencies, particularly British and French were coming increasingly into use. This greatly accelerated the decline of the pre-colonial African currencies. That the European currencies accelerated the decline was not in the least surprising because they were much more convenient.

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How then did colonialism monetize African economies? First economies were monetized by annihilating the pre-colonial currencies which had represented a rudimentary monetization, but which were as limited as currencies that they would have been a serious obstacle to fundamental monetization. They were annihilated by depreciation and displacement so that the way was paved for the development of a modern monetary system. With pre-colonial currencies displaced, and the European currencies firmly installed in their place, the real task of monetization began, and this was mainly the task of making the new medium of exchange thoroughly pervasive in the economy. First, they encouraged wage labour often by force – for instance, by appropriating arable land from Africans and thus reducing them first to squatters and arable land from Africans and thus reducing them first to squatters and eventually to wage labourers on their land. The expansion of wage labour not only had the advantage of monetizing the economy but also of facilitating the control of the economy and a more reliable supply of labour. Second, African economies were monetized by imposing taxes and insisting on payment of taxes with the European currency.


Trade between the colony and the colonizing power was a critical mechanism for the integration of African economies into the European capitalist system. How trade played this role is quite easy to understand. To begin with, trade was, in the early years of colonization, the vehicle for extending capitalism into the colony. It helped to create consumerist orientations; it stimulated the growth of a money market and capitalist financial institutions, extending the scope of the money economy. Most importantly trade stimulated primary production. To appreciate this point one has to distinguish between the impact of trade on the colonies before and after colonization. There was trade before colonization but its impact on the transformation of the economy of the overseas territory was rather limited. Trading activity centred mainly in the metro pole. The Europeans were relatively indifferent to what went on in the interior. They were content to leave the production and the delivery of whatever products they wanted to local entrepreneurs and middlemen. But with colonization, the situation changed.


The pattern of foreign investment in the colonial African economies reinforced the complementarities between these economies and the Western economies, and the structural dependence of the former on the latter. But before going into the question of complementarities and dependence, it is useful to mention that foreign investment increased the integration of the African economies into the Western capitalist system by promoting the spread of the capitalist mode of production. As Western capital flowed into the colony, capitalism spread. And as capitalism and capitalist-related institutions took root, the economies of the colony became more compatible with Western economies and this aided integration. Foreign investment created linkages between the metropolitan and colonial economies. For instance, while stimulating primary production in the colonies it directed its forward linkages outwards to the metropole. The spread of capitalism in the colony was integrative in more small class of indigenous capitalists who had common interest with foreign capital.

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The history of man stems from less developed kinds of society to qualitatively new and even higher types surpassing the former ones in all the major economic, social, political, cultural and moral criteria. Marxism designates these qualitative distinct types of society, which primarily differ from each other in economic structure, in the mode of material production, as socio-economic formations. Marx asserted that the socio-economic formations consist of economic structure and consequently the two main super-structures of the state, law and ideology which determine the mode of production. It should be noted that all socio-economic formation arises on a material foundation and every new formation begins with the emergence and development of a new economic basis which necessarily gives rise to corresponding politic-juridical relations and ideological forms. The fundamental basis of any socio-economic formations, its chief structural elements the mode of production is characterized by the type of property in the means of production prevailing under that formation. When the prevailing relations of production run into contradiction with the productive forces and impede their development, the given formation inevitably begins to decline and finally collapses. So the development of a socio-economic formation, its rise and falls are forces decided in the sphere of the economic basis.

The Primitive Communal Stage

At the beginning of human existence, social organization took the form of the horde or band of hunters who killed animals and fruit gatherers. Division and specialization of labour were possible along the sex lines, age, brute strength and skills.

Slave Society

In the slave society, the means of production are almost the same with that of communal society, the sharp differences are that human beings are now included in the forces of production, and production has risen to a level where surpluses are produced. The relation of production is private and the dominant mode of production is slavery.

Feudal Stage

The emergence of feudal stage became necessary as a result of the failure of the slave system. So during the third century, the slave holding society was faced with a lot of problems as a result of feudal relations of production emerge. In the pursuit of economic benefit, some slave owners broke up their latifundia into smaller units gave these of liberated slaves who were to remain attached to the soil and to pay cash rent. As time goes on the cash rent payment was replaced with payment through selling their labour to their masters.

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Capitalist Stage

The capitalist social formation is dominated by a mode of production in which the factory is the dominant means of production and in which the bulk of productive forces are privately own.

Marxism attached more value to the role of capitalism in industrial development and civilizations sue to its production facilities.

Capitalism has helped in the advancement of science and technology, more so in the way it has helped the emergence and the development of capitalism. Capitalist society, during its early stage, has helped to create great cultural values in art, literature and every other sphere of spiritual and creative endeavour. Capitalism is more important compared with slavery and feudalism in social progress not only in the economy but also in social and political sphere of life. Though, despite its inconsistencies, bourgeois democracy was undoubtedly a marked extension of individual civil rights as can be compared to feudal state system.

Socialist Stage

Contrary to what is obtained in the capitalist socio-economic formations the socialist socio-economic formations has no resemblance with the bourgeois society. The growing character under capitalism the shaping and the awakening of the consciousness of the peasant and working class, its communist vanguard and the emergence of a strong alliance between the lumen proletariat and other oppressed social sections of the capitalist society provide the most important conditions for transition to socialism. The socialist revolution the Karl Marx led the vanguard first in Russia put an end to the domination of the capitalist.

Under socialism there is social property in the means of production, thereby putting an end to exploitation of man by man. The contradictions in the capitalist mode of production with attendant crisis that characterized capitalism i.e. economic recession, inflation, economic stagnation etc., have no room in the socialist system, this is because all the means of production are under the control of the state, which affects the planned and development of all the sectors in the economy. Under socialism, planning is done in such a way that there will be no room for unemployment and the workers fear of the future which is a curse to working class under capitalism. Under this system, the values which are created by the workers are distributed among the producers based on the quality and the quantity of their labour.


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