2 - Intermediaries of capital

Summary

As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market.

Insights of the social theorists

Social theorists who observed the world economy during the early history of Hong Kong provided clues to understanding the behavior of traders, financiers, corporate managers, and other intermediaries of capital. From the late eighteenth century to the early twentieth century, theorists such as Emile Durkheim, Karl Marx, Adam Smith, Herbert Spencer, Ferdinand Tonnies, and Max Weber witnessed a transformation of the world economy as revolutionary as that of the late twentieth century. Railroads dramatically lowered the cost and raised the volume and speed of commodity and passenger movement over land, and steamboats and steamships did the same for waterborne transport. The telegraph bound cities within nations from the 1840s, and by the 1880s, a global network had emerged. This provided almost instantaneous communication of information and separated information transmission from physical movements of passengers and commodities. Industrial growth, first in Western Europe, then in the United States, and finally in Japan, generated swelling volumes of commodities for shipment, and burgeoning factories drew on widening source areas for raw material inputs and forged increasingly elaborate linkages of intermediate goods. This astounding rise in social complexity fascinated the theorists; their clues to explaining it rested in the causes and consequences of the division of labor.