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This chapter discusses some of the connections between colonialism, capitalism, and development. The making of colonial economies — through the organization of commodity production and trade by colonial states, settlers, and companies — entailed the 'breaking' of existing patterns of production and social existence, of whole ways of life. This process was encapsulated in the formation and functioning of colonial labour regimes. Other aspects of social and cultural change under colonialism also contributed to new forms of social differentiation among the colonized, and exposed the contradictions of colonial rule, not least in challenging its legitimacy. The European colonial empires were dismantled in the decades following the Second World War: anti-colonial movements became stronger, and international capitalism led by the USA no longer required the direct political rule of Asia and Africa (an 'imperialism without colonies'), while the proclamation of strategies of 'national development' by the newly independent states assimilated many of the tensions and ambiguities of the 'doctrines of development' of the era of (industrial) capitalist colonialism.

This chapter reflects on a range of examples of pre-capitalist societies, chosen to illustrate the major arenas of colonial disruption, in Africa, Asia, and Latin America, and to show how they worked. The empires which Europe created in Africa, Asia, and Latin America were merely the last (to date) in a long line of imperial ventures. There were few areas in the world which had not previously been subject to overlordship by external forces, sometimes to the suzerainty of successive powers. However, these old empires often functioned quite differently from the newer empires created by Europe. The growth of capitalism in Europe drove a need for closer control over the type and extent of production in areas under imperial domination. Whereas in previous empires merchants had merely served the demands of wealthy minorities for luxury goods (and in the process accumulated hoards of personal wealth), now these stocks of wealth began to go directly into the transformation of productive processes in Europe (the Industrial Revolution) rather than into consumption. Thus the emphasis was increasingly on raw materials or intermediate inputs to European industry.

This chapter examines decolonization and the changes that took place within the European empires during the early years of the Cold War. Decolonization constituted a crucial element of the new international order after the Second World War and formed part of the broader shift in the global balance of power. The war marked the end of the European-dominated system of nation states and was followed by the decline of the major European powers, with international dominance lying for a quarter of a century with the United States, challenged only by the Soviet Union. The chapter considers the challenges to colonial rule that were evident in both Africa and Asia during the inter-war years. It also discusses the imperialism and the struggles against it that have formed part of a post-war landscape in the Middle East.