Khaldoun al-Naqeeb. Society and State in the Gulf and Arab Peninsula: a Different Perspective.
I will be looking at only the first 4 chapters of this heavily theoretical work, for it is only that section which deals with the commercial activities of the Gulf with which I am concerned. The rest of it is very interesting, but contemporary in nature.
Chapter 1: Introduction: Current Writings About the Region
In this section, al-Naqeeb takes the opportunity to bash just about every discipline and type of writing that exists on the Gulf. He classifies the writings into two main types: those produced by the traditional historians, travellers, explorers, colonial officials and anthropologists/ethnographers; and those produced by journalists, economic experts and trained historians. The first type of writing (and to a great degree the second) all suffer from a romantic pre-occupation with the tribal nature of Arabian society and the romantic values of the tribe. The second is also concerned with this, but also places far too much emphasis on the development of petroleum; also, historians over-rely on archive evidence so much that all they produce is a chronicle of events rather than an analysis guided by theoretical and methodological concepts.
Chapter 2: The "Natural State" Thesis of Society in the Gulf and Arab Peninsula
As a starting point for the study, the 'natural state' refers to the "dynamic matrix of the socio-economic structure, the political forces, and the distinguishing characteristics of the social relationships prevailing in the Gulf and Peninsula" around the dawn of the 16th century (after the fall of Baghdad). In this state, the Arab Peninsula can be considered as two 'world economies': 1) that comprising Basra, Siraf, Hormuz and Muscat; 2) that incluidng Aden, Jiddah and Idhab. These cities (and he classifies a number of port cities in the Arab peninsula as either importers/exporters or entrepots) had extensive links with other coastal cities and with the hinterland via recognized trade routes, all of which tied several economic worlds together; indeed, without the existence of maritime trade, the interior situation (raiding, etc.) could not have been maintained.
The predominant form of maritime trade was what he called mudarabah, or speculative trade. It was 'speculative' because of the nature of profit-making: the merchant would pay the mudarib a fixed amount to go and do business with on the basis of sharing the profits (usually 1/3 for the mudarib and 2/3 for the merchant). The trade generally involved travelling long distances and taking many risks, which is why the mudarib gets paid. Although similar to the European practice of the Commenda, the mdarabah was different in a number of ways: 1) the mudarib was a contractual agent, not a borrower; 2) he shared in the profit without providing a share of the capital; 3) he was free to sell and re-sell according to the stipulations of his contract; 4) he had the right to liquidate his share of the profit before returning and thus could trade privately; 4) he dealt with a variety of goods that would yield large profits so to justify trade. (This is all the development of a financial institution and its direct effect on the development of long-distance trade a la Braudel and Douglass North).
One of the features of this trade was the protection costs associated with it, which followed an irregular pattern (he follows this with a short account of the evolution of protection fees, though we will return to this later). The extraction of these protection, or the inability to do so, prompted the circulation of tribal elites (the replacement of one dominant tribe with another, such as Ya`rubis with the Busa`idis or the displacement by the Sa`udis of the Banu Khalid and the Rasheedis.This was not the only form of income for Bedouins, though - they also traded with towns and participated in urban economic activities through the payment of taxes, fees and zakat.
The mudarabah trade was charaterized by sharp competition between merchants and sharp fluctuations in prices due to shifts in supply and demand (although I would personally disagree with both, especially at a later date). The mudarib had to account for this as well as protection fees and other risks, though he would not have gone on the trip were he not sure he was to make profit. Thus, the mudarabah trade depended on a rational calculation of costs and expected profits (a capitalistic spirit) and it must be assumed that the differences in prices across the Indian Ocean were large enough to allow for exploitation. Naqeeb says that the Arab Peninsula market at this time was self-regulating despite the existence of barter in it; he also says that a product of this was that cities were abounded with currency, all of which had a fixed exchange rate. Other developing financial institutions included the fastajah (the equivalent of a bill of exchange) and the bimah (insurance policy), all of which contributed to the widening of the scope of commercial realtions. This all led to the specialization of various communities in various types of trade or trade-related activities or in various geographical areas (the Karimis in the Red Sea, for example). It also all hung in a very delicate balance that could easily be upset (esp. supply and demand), all of which moved according to a 'seasonal rhythm'.
The 'seasonal rhythm' referred to is "the synchronism of economic activities with the natural rotation of seasons and regular engagement in these activities during fixed period of the year." Everyone adapted to this to maximize gain, especially the agricultural nomadic tribes. The travel season (in the fall) also coincided with the harvesting of the dates in Basra, whose price was fixed according to the results of a meeting of the big date merchants of Basra - the "Date Stock Exchange." (Think of what Braudel has said about the development of stock exchanges in Amsterdam - it's the same!) They bring their cargo back and load it onto caravans to Damascus, Cairo and Alexandria (which then met European sailing vessels). Naqeeb also talks about the importance of the pilgrimage to this natural rhythm (though it followed no natural season).
Chapter 3: Gulf and Arab Peninsula Society in "the Grand Imperial Design."
The period between the 16th century and the mid-19th century in Gulf and Peninsula history represents a turning point marking the decline of the 'natural state.' In taking a birds-eye view of developments before and during this time, Naqeeb states that these turning points can be summed up as the following:
1. The witnessing of a 2nd mercantile revolution in the 13th-17th centuries, following the failure of the first revolution in Iraq (8th-11th centuries) after the intervention of military forces. The distinguishing features are:
a) Dependence on a parallel agricultural revolution and land trade routes, all of which increased land tax;
b) the 2nd mercantile revolution was based on the development of a European demand for eastern goods and thus a monopoly of Indian Ocean sea routes.
2. The transformation of the Indian Ocean into an "Arab-Islamic Lake", which resulted in:
a) The monopoly of Arab-Islamic trade in an Indian Ocean void of any real competition;
b) The appearance of a crusading spirit in the west to break the Muslim hold on commerce.
3. Portugese eventual 'domination' of the Indian Ocean trade, which did not bring about the collapse of the 'natural state' immediately, followed by the 'imperial design' on the Gulf region by British, Dutch and French powers, the tripartite imperialist struggle of whom made it possible for the 'natural state' economy to continue and effectively resist designs.
4. The eventual collapse of the 'natural state' economy upon the crystalization of British hegemony in the region, the result of which was:
a) Britain's hegemony over the traditional commercial areas in the Indian Ocean and her subjection of the mudarabah trade to the complete control of her commercial agencies, her recognition of the right of one family to rule (in establishing protectorate treaties) and the subsequent disruption of the circulation of tribal elites.
b) Her transfer of the center of gravity from the coastal cities to the tribal hinterland (because of oil) and the fashioning of the political map as it is today.
The second commercial revolution discussed earlier focused on maximizing the level of commercial exchange with the east in general and the west between the 13th and 17th centuries through an Arab-Islamic monopoly. This is illustrated by the emergence of eight important Islamic sultanates in the Indian Ocean between the 12th and 15th centuries (see table on p. 29). This (as well as the Ottoman capture of Constantinople in 1453) spurred the Europeans into action, starting witht he crusades and followed by explorations in of the world, despite the disparity in their interests.
Among these explorers were the Portuguese (Franks or faranjah). When Albuquerque established their foothold in West India, he created the 'grand imperial design' of controlling 3 key straits to dominate trade: the Straits of Malacca, towards China; the Strait of Hormuz in the Gulf; and the Strait of Aden (Bab al-Mandeb) to the Red Sea. In doing so, they would be able to collect taxes and protection omney from all passing ships, which they would harass (sort of like organized crime). Also, by emplying cannons and guns on their ships, they internalized their own protection costs. They were not able to get past the elastic networks of merchants, however, and ended up playing a small part in trade. This was because:
a) Their arrogant policies generated a great deal of local resistance;
b) The lack of Portuguese in the area made them depend on European and Indian mercenaries, which was unstable at best;
c) The Portuguese-Spanish struggle, which weakened the colonial administration;
d) The money they collected went to buy goods from their European trading counterparts, meaning they were little more than conduits for the latter's expansion.
The advent of the Dutch VOC and English EIC in the region brought about a shift in Euopean policy - merchants were now able to trade through these companies and under their protection, whereas the Portuguese only worked with shipping. Because of the non-necessity for protection costs and the netowrk of agents all around the region, the companies were able to obtain a semi-monopolistic control on prices (an institutional innovation) and thus dominate the trade (by controlling prices to their advantage). By the 18th century, England had a clear advantage over Holland in the location of its agencies and its control of India; France had by this time entered the picture too, creating a tripartite struggle for control.
This allowed the emergence of national resitance, which took the form of 3 main movements: The Zaidi occupation of Mukha, Zabid, al-Hudeida, and Aden; the emergence of Muscat as a regional force despite the Ghafiri-Hinawi struggle; and the emergence and spread of the 1st Saudi-Wahhabi movement. Other developments included: the efforts of Nadir Shah to unite Persia; the emergence of the Qawasim as naval powers; and the emergence of the commercial centers of the `Utub in Zubara, Kuwait and Bahrain. These all signified local expressions of national resistance to imperial penetration and foreign colonial presesnce - a last serious attempt (especially by the Omanis) at restoring control of the mudarabah trade in the hands of Arab merchants.
(Think: where the Portuguese failed, the English succeeded because of their ability to cooperate and facilitate local trade rather than try and control it altogether. This facilitation - and think of the Jones article - represents economic development on only one level. On another level, you have the dhow economy, which is operating in the private sector and remains constant until the 1950s... a dual economy, then? Hmmm...)
Chapter 4: The 'Pax Britannica' Era and the Decline of the 'Natural State' Economy
Between 1688 and 1839, GB succeeded in implementing the grand imperial design originated by the Portugese. They established their rule over India, expelled the Dutch from the Gulf, established a foothold in Muscat and eventually took Aden in 1839, thereby completing the cycle. Naqeeb says that in the Gulf, GB levelled charges of piracy so that it could destroy native shipping (despite their participation in piracy against the Portuguese earlier on); while he doesn't refute that piracy occurred, he does state that some (Bathurst) did indicate that piracy could have arose out of the struggle between the Europeans and locals over commerce. After the imposition of the Pax Britannica, it was allowed to search and stop vessels as well as lucrative trade (like the Slave and arms trade). This represented the fall of the 'natural state' economy and the decline of the traditional status of mudarabah; it also meant the incorporation of the Gulf into the world economy at an unequal footing whereby the merchant had to order goods through the agent for a down-payment of 1/10 of the price before arrival. During this time, British shipping companies (steamships) took over a greater percentage of world trade, resulting in the decline of traditional ports in favor of modern ones (though he notes that the mudarabah trade did not disappear completely).
In this new world capitalist system, we see an emergence of commodity specialization in response to the demands of the market (Naqeeb's description, however, seems to emphasize the importance of certain items or events in local economies rather than the export of certain products in a comparative advantage). Naqeeb cites the dependence of the Hejaz on the pilgrimage, of the Gulf on pearling, and of Yemen on the coffee trade. Jeddah's decline as an entrepot (because of the steamer) was replaced by it's dependence on increasing numbers of pilgrims coming via steamer and the price-hikes that followed; Yemeni coffee, which many depended on, was slowly edged out of the monopoly by Java coffee; and pearling, with all of the debt systems associated with it.
The collapse of the natural state also entailed the creation of dynasties by the British, bringing the circulation of tribal elites to an end. There used to be a self-regulating mechanism for checking authoritarianism, though this changed when the British started defending the Emirs from foreigners and domestic disturbances and paying them subsidies in return for favors (is this entirely true? I have trouble digesting it). FInally the inclusion of nomadic tribes into the state boundaries after they were drawn significantly changed the dynamics of the state (think of the '81 elections in Kuwait as an example) and the urban landscape.
(The significance of this work can easily be lost in the criticisms one can have of it. Al-Naqeeb's treatment of historical events is superficia and top-down, preferring to find events that find his theory than those which do not. The importance of the work, however, is in the fact that it is very theoretical where all other works on the Gulf are not; Khaldoun makes up for the lack of historical depth and evidence with a theoretical maturity reminiscent of the works of Chaudhuri and Braudel. Indeed, this is as close as anyone has gotten to an economic history of the Gulf, though it is a little too shallow in it's penetration).
I will be looking at only the first 4 chapters of this heavily theoretical work, for it is only that section which deals with the commercial activities of the Gulf with which I am concerned. The rest of it is very interesting, but contemporary in nature.
Chapter 1: Introduction: Current Writings About the Region
In this section, al-Naqeeb takes the opportunity to bash just about every discipline and type of writing that exists on the Gulf. He classifies the writings into two main types: those produced by the traditional historians, travellers, explorers, colonial officials and anthropologists/ethnographers; and those produced by journalists, economic experts and trained historians. The first type of writing (and to a great degree the second) all suffer from a romantic pre-occupation with the tribal nature of Arabian society and the romantic values of the tribe. The second is also concerned with this, but also places far too much emphasis on the development of petroleum; also, historians over-rely on archive evidence so much that all they produce is a chronicle of events rather than an analysis guided by theoretical and methodological concepts.
Chapter 2: The "Natural State" Thesis of Society in the Gulf and Arab Peninsula
As a starting point for the study, the 'natural state' refers to the "dynamic matrix of the socio-economic structure, the political forces, and the distinguishing characteristics of the social relationships prevailing in the Gulf and Peninsula" around the dawn of the 16th century (after the fall of Baghdad). In this state, the Arab Peninsula can be considered as two 'world economies': 1) that comprising Basra, Siraf, Hormuz and Muscat; 2) that incluidng Aden, Jiddah and Idhab. These cities (and he classifies a number of port cities in the Arab peninsula as either importers/exporters or entrepots) had extensive links with other coastal cities and with the hinterland via recognized trade routes, all of which tied several economic worlds together; indeed, without the existence of maritime trade, the interior situation (raiding, etc.) could not have been maintained.
The predominant form of maritime trade was what he called mudarabah, or speculative trade. It was 'speculative' because of the nature of profit-making: the merchant would pay the mudarib a fixed amount to go and do business with on the basis of sharing the profits (usually 1/3 for the mudarib and 2/3 for the merchant). The trade generally involved travelling long distances and taking many risks, which is why the mudarib gets paid. Although similar to the European practice of the Commenda, the mdarabah was different in a number of ways: 1) the mudarib was a contractual agent, not a borrower; 2) he shared in the profit without providing a share of the capital; 3) he was free to sell and re-sell according to the stipulations of his contract; 4) he had the right to liquidate his share of the profit before returning and thus could trade privately; 4) he dealt with a variety of goods that would yield large profits so to justify trade. (This is all the development of a financial institution and its direct effect on the development of long-distance trade a la Braudel and Douglass North).
One of the features of this trade was the protection costs associated with it, which followed an irregular pattern (he follows this with a short account of the evolution of protection fees, though we will return to this later). The extraction of these protection, or the inability to do so, prompted the circulation of tribal elites (the replacement of one dominant tribe with another, such as Ya`rubis with the Busa`idis or the displacement by the Sa`udis of the Banu Khalid and the Rasheedis.This was not the only form of income for Bedouins, though - they also traded with towns and participated in urban economic activities through the payment of taxes, fees and zakat.
The mudarabah trade was charaterized by sharp competition between merchants and sharp fluctuations in prices due to shifts in supply and demand (although I would personally disagree with both, especially at a later date). The mudarib had to account for this as well as protection fees and other risks, though he would not have gone on the trip were he not sure he was to make profit. Thus, the mudarabah trade depended on a rational calculation of costs and expected profits (a capitalistic spirit) and it must be assumed that the differences in prices across the Indian Ocean were large enough to allow for exploitation. Naqeeb says that the Arab Peninsula market at this time was self-regulating despite the existence of barter in it; he also says that a product of this was that cities were abounded with currency, all of which had a fixed exchange rate. Other developing financial institutions included the fastajah (the equivalent of a bill of exchange) and the bimah (insurance policy), all of which contributed to the widening of the scope of commercial realtions. This all led to the specialization of various communities in various types of trade or trade-related activities or in various geographical areas (the Karimis in the Red Sea, for example). It also all hung in a very delicate balance that could easily be upset (esp. supply and demand), all of which moved according to a 'seasonal rhythm'.
The 'seasonal rhythm' referred to is "the synchronism of economic activities with the natural rotation of seasons and regular engagement in these activities during fixed period of the year." Everyone adapted to this to maximize gain, especially the agricultural nomadic tribes. The travel season (in the fall) also coincided with the harvesting of the dates in Basra, whose price was fixed according to the results of a meeting of the big date merchants of Basra - the "Date Stock Exchange." (Think of what Braudel has said about the development of stock exchanges in Amsterdam - it's the same!) They bring their cargo back and load it onto caravans to Damascus, Cairo and Alexandria (which then met European sailing vessels). Naqeeb also talks about the importance of the pilgrimage to this natural rhythm (though it followed no natural season).
Chapter 3: Gulf and Arab Peninsula Society in "the Grand Imperial Design."
The period between the 16th century and the mid-19th century in Gulf and Peninsula history represents a turning point marking the decline of the 'natural state.' In taking a birds-eye view of developments before and during this time, Naqeeb states that these turning points can be summed up as the following:
1. The witnessing of a 2nd mercantile revolution in the 13th-17th centuries, following the failure of the first revolution in Iraq (8th-11th centuries) after the intervention of military forces. The distinguishing features are:
a) Dependence on a parallel agricultural revolution and land trade routes, all of which increased land tax;
b) the 2nd mercantile revolution was based on the development of a European demand for eastern goods and thus a monopoly of Indian Ocean sea routes.
2. The transformation of the Indian Ocean into an "Arab-Islamic Lake", which resulted in:
a) The monopoly of Arab-Islamic trade in an Indian Ocean void of any real competition;
b) The appearance of a crusading spirit in the west to break the Muslim hold on commerce.
3. Portugese eventual 'domination' of the Indian Ocean trade, which did not bring about the collapse of the 'natural state' immediately, followed by the 'imperial design' on the Gulf region by British, Dutch and French powers, the tripartite imperialist struggle of whom made it possible for the 'natural state' economy to continue and effectively resist designs.
4. The eventual collapse of the 'natural state' economy upon the crystalization of British hegemony in the region, the result of which was:
a) Britain's hegemony over the traditional commercial areas in the Indian Ocean and her subjection of the mudarabah trade to the complete control of her commercial agencies, her recognition of the right of one family to rule (in establishing protectorate treaties) and the subsequent disruption of the circulation of tribal elites.
b) Her transfer of the center of gravity from the coastal cities to the tribal hinterland (because of oil) and the fashioning of the political map as it is today.
The second commercial revolution discussed earlier focused on maximizing the level of commercial exchange with the east in general and the west between the 13th and 17th centuries through an Arab-Islamic monopoly. This is illustrated by the emergence of eight important Islamic sultanates in the Indian Ocean between the 12th and 15th centuries (see table on p. 29). This (as well as the Ottoman capture of Constantinople in 1453) spurred the Europeans into action, starting witht he crusades and followed by explorations in of the world, despite the disparity in their interests.
Among these explorers were the Portuguese (Franks or faranjah). When Albuquerque established their foothold in West India, he created the 'grand imperial design' of controlling 3 key straits to dominate trade: the Straits of Malacca, towards China; the Strait of Hormuz in the Gulf; and the Strait of Aden (Bab al-Mandeb) to the Red Sea. In doing so, they would be able to collect taxes and protection omney from all passing ships, which they would harass (sort of like organized crime). Also, by emplying cannons and guns on their ships, they internalized their own protection costs. They were not able to get past the elastic networks of merchants, however, and ended up playing a small part in trade. This was because:
a) Their arrogant policies generated a great deal of local resistance;
b) The lack of Portuguese in the area made them depend on European and Indian mercenaries, which was unstable at best;
c) The Portuguese-Spanish struggle, which weakened the colonial administration;
d) The money they collected went to buy goods from their European trading counterparts, meaning they were little more than conduits for the latter's expansion.
The advent of the Dutch VOC and English EIC in the region brought about a shift in Euopean policy - merchants were now able to trade through these companies and under their protection, whereas the Portuguese only worked with shipping. Because of the non-necessity for protection costs and the netowrk of agents all around the region, the companies were able to obtain a semi-monopolistic control on prices (an institutional innovation) and thus dominate the trade (by controlling prices to their advantage). By the 18th century, England had a clear advantage over Holland in the location of its agencies and its control of India; France had by this time entered the picture too, creating a tripartite struggle for control.
This allowed the emergence of national resitance, which took the form of 3 main movements: The Zaidi occupation of Mukha, Zabid, al-Hudeida, and Aden; the emergence of Muscat as a regional force despite the Ghafiri-Hinawi struggle; and the emergence and spread of the 1st Saudi-Wahhabi movement. Other developments included: the efforts of Nadir Shah to unite Persia; the emergence of the Qawasim as naval powers; and the emergence of the commercial centers of the `Utub in Zubara, Kuwait and Bahrain. These all signified local expressions of national resistance to imperial penetration and foreign colonial presesnce - a last serious attempt (especially by the Omanis) at restoring control of the mudarabah trade in the hands of Arab merchants.
(Think: where the Portuguese failed, the English succeeded because of their ability to cooperate and facilitate local trade rather than try and control it altogether. This facilitation - and think of the Jones article - represents economic development on only one level. On another level, you have the dhow economy, which is operating in the private sector and remains constant until the 1950s... a dual economy, then? Hmmm...)
Chapter 4: The 'Pax Britannica' Era and the Decline of the 'Natural State' Economy
Between 1688 and 1839, GB succeeded in implementing the grand imperial design originated by the Portugese. They established their rule over India, expelled the Dutch from the Gulf, established a foothold in Muscat and eventually took Aden in 1839, thereby completing the cycle. Naqeeb says that in the Gulf, GB levelled charges of piracy so that it could destroy native shipping (despite their participation in piracy against the Portuguese earlier on); while he doesn't refute that piracy occurred, he does state that some (Bathurst) did indicate that piracy could have arose out of the struggle between the Europeans and locals over commerce. After the imposition of the Pax Britannica, it was allowed to search and stop vessels as well as lucrative trade (like the Slave and arms trade). This represented the fall of the 'natural state' economy and the decline of the traditional status of mudarabah; it also meant the incorporation of the Gulf into the world economy at an unequal footing whereby the merchant had to order goods through the agent for a down-payment of 1/10 of the price before arrival. During this time, British shipping companies (steamships) took over a greater percentage of world trade, resulting in the decline of traditional ports in favor of modern ones (though he notes that the mudarabah trade did not disappear completely).
In this new world capitalist system, we see an emergence of commodity specialization in response to the demands of the market (Naqeeb's description, however, seems to emphasize the importance of certain items or events in local economies rather than the export of certain products in a comparative advantage). Naqeeb cites the dependence of the Hejaz on the pilgrimage, of the Gulf on pearling, and of Yemen on the coffee trade. Jeddah's decline as an entrepot (because of the steamer) was replaced by it's dependence on increasing numbers of pilgrims coming via steamer and the price-hikes that followed; Yemeni coffee, which many depended on, was slowly edged out of the monopoly by Java coffee; and pearling, with all of the debt systems associated with it.
The collapse of the natural state also entailed the creation of dynasties by the British, bringing the circulation of tribal elites to an end. There used to be a self-regulating mechanism for checking authoritarianism, though this changed when the British started defending the Emirs from foreigners and domestic disturbances and paying them subsidies in return for favors (is this entirely true? I have trouble digesting it). FInally the inclusion of nomadic tribes into the state boundaries after they were drawn significantly changed the dynamics of the state (think of the '81 elections in Kuwait as an example) and the urban landscape.
(The significance of this work can easily be lost in the criticisms one can have of it. Al-Naqeeb's treatment of historical events is superficia and top-down, preferring to find events that find his theory than those which do not. The importance of the work, however, is in the fact that it is very theoretical where all other works on the Gulf are not; Khaldoun makes up for the lack of historical depth and evidence with a theoretical maturity reminiscent of the works of Chaudhuri and Braudel. Indeed, this is as close as anyone has gotten to an economic history of the Gulf, though it is a little too shallow in it's penetration).
posted by Gulf Historian at 11:35 AM
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