In the 18th century, the British East India Company used its monopoly trading rights to extract wealth from Indian producers, forcing them to sell textiles at low prices while using military power and legal privileges to suppress local competition. According to Sekine’s Marxian interpretation, what theoretical concept best explains this behavior of merchant capital?

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The question asks which theoretical concept from Sekine’s Marxian framework best explains the behavior of merchant capital as described. We will assess each option in turn.
Option 1: 'The limits of merchant capital are explained by primitive accumulation — the Company’s actions were part of a violent break from feudal relations, laying the foundation for capitalist industrialization.' While primitive accumulation is a key concept in Marxist theory for explaining the historical transition to capitalism, Sekine’s emphasis on merchant capital specifically highlights its dependence on extra-economic means rather than intrinsic tendencies alone. This option attributes the phenomenon to a broader historical process, but it does not directly capture the internal logic of merchant capital needing to expand profits through non-economic coercion in the colonial context.
Option 2: 'As merchant capital cannot produce surplus-value from within and is bound by specific forms of use-value, it must ensure it widens its profitability with extra-economic means, as in the colonial behavior described above.' This picks up a central theme in Sekine’s analysis: merchant capital cannot realize surplus value purely through internal production or circulation and thus relies on external, non-economic coercion (such as monopoly power, legal privileges, and military force) to extract profits in imperial settings. The description of forcing low textile prices and suppressing competition aligns with this extra-economic extraction logic.
Option 3: 'Merchant capital cannot produce surplus value from within. It does not entail the dual freedom of labor and thus cannot extract surplus-value from workers (intra-economic means). It must hence make use of legal contracts to ensure a profit from pre-determined interest rates.' This option hints at the theoretical distinction around surplus-value and legal means, but the focus on pre-determined interest rates and contracts resembles a financialized or legalistic reading that is not the core of Sekine’s explanation of colonial exploitation by merchant capital. It oversimplifies the mechanism by emphasizing contracts and interest rather than the broader coercive, extra-economic means used in colonial contexts.
Option 4: 'Merchant capital is the most developed of the three forms of capital under the doctrine of circulation. Although it does not need to extract a profit through extra-economic means, it does so to ensure its power over colonial territories.' This statement contradicts the general idea that merchant capital often relies on extra-economic methods in colonial settings; it at least reverses the implication by claiming it does not need extra-economic means, which clashes with the described onslaught of coercive practices. It also mischaracterizes the role of merchant capital within Sekine’s typology by downplaying the necessity of extra-economic extraction in imperial contexts.

Putting these evaluations together, option 2 most accurately reflects Sekine’s claim that merchant capital cannot generate surplus-value solely through internal means and thus resorts to extra-economic strategies (like colonial violence and legal privileges) to widen profitability in the colonial realm. The other options either overemphasize broader historical processes, misattribute the mechanism to contractual financial logic, or inaccurately describe the necessity (or absence) of extra-economic extraction in merchant capital.

ECON 5080-090 Summer 2025 Week 9 - Quiz

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