Coffee: Good to the Last Drop?
How has the coffee trade marked the rise of capitalism throughout history?
August 4, 2005
Once known as the "Wine of Araby," trade in coffee was an important component in the creation and consolidation of the Ottoman Empire in the 16th century.
It was first consumed in the late 15th century as a sacred ritual amongst the Sufis in Yemen, from where it quickly spread through Islam.
In that religion, despite some initial opposition, it was considered an acceptable stimulant because, unlike the reviled alcohol, it never left the drinker incapable of distinguishing a man from a woman or the earth from the heavens.
The popular coffee houses of Cairo and Constantinople attracted the attention of the first European visitors to the Orient.
Eventually, coffee itself appeared in most of Europe at the same time as merchants, sailors and adventurers from that continent were starting to establish — largely through superiority of arms and technology — their fledgling trading empires.
Coffee was amongst a number of valuable and desirable oriental goods that they sought, but its supply was effectively under the monopolistic control of the Ottomans.
By the early 18th century, the Dutch, the French and the British had managed to obtain coffee seedlings to take to their own tropical colonial possessions to be cultivated under the plantation system worked by slave or near-slave labor.
Slavery, with its attendant horrors, persisted as the preferred method of coffee production in many colonies until abolition — or in the case of Brazil, until as recently as 1888, by which time coffee had become a thoroughly globalized commodity.
The so-called benefits of the colonial plantation system were mainly experienced by the consumers in the home counties of these various European empires, who responded with alacrity to the low price and ready availability of what had formerly been a rare luxury.
Coffee was universally consumed in the nations of Europe and in the United States, much of it in coffee houses that became meeting places for men of commerce, politics and culture.
The effect of caffeine itself ensured that there were always likely to be lively, well-informed debates and intense, original exchanges, contrasted to the only other public meeting places of the time, the tavern or the church.
The coffee house played a pivotal role in the creation of many of financial institutions. These, in turn, supported the expansionist trading empires that had led to the growth of coffee consumption in the first place.
Lloyds of London, the maritime insurance company, emerged from the interests of the clientele of Lloyds Coffee House who gathered there to exchange news and gossip concerning the movement of ships.
Coffee was an important commodity shipped from afar, and thus, the fledgling insurance business conducted at Lloyds in part provided the financial structure whereby the risks of the coffee trade itself could be mitigated.
This feedback loop of cause-and-effect, fuelled by caffeine, underpinned the dramatic rise of capitalism and its most successful offspring, globalization.
Coffee lay at the very heart of the triumph of free-market economics in the early stages of our times. That it is now suffering the awful consequences of that same ethos is ironic, but horribly apt.
With the weakening of European imperialism and the increasing assertion of the hegemony of the United States over the western hemisphere, the many coffee-producing countries of Central and South America found themselves overtaken by U.S. neocolonialism.
Many of those countries are deeply dependent on coffee for export income. However, because their northern neighbor consumes 25% of the world's supplies but chooses to buy 75% of its needs from their southern neighbors, coffee inevitably became a significant factor in hemispherical geopolitics.
Economies that are historically coffee-based have created the ground rules by which a ruling oligarchy can impose its will on the unrepresented masses.
The sweatshop economies of much of Central America and the Caribbean depend upon the political elite's control of the media and the military apparatus — and the structure of the coffee trade provided the working model.
El Salvador, for example, a country which until recently was dependent on coffee for over half its export income, now derives 57% of that from the "garment industry."
Arguably, along with the world economy as a whole, the coffee trade has reverted to a paradigm that closely resembles the height of European colonialism — albeit now under U.S. domination.
The fact that the date of the dissolution of the International Coffee Agreement broadly coincided with that of the fall of the Berlin Wall is by no means coincidental.
The United States, having vanquished its most serious rival, no longer saw the need to humor its more liberal allies.
The catalytic effect of coffee-house culture on the emergence of those financial and cultural institutions that underpinned the rise of Western capitalism should not be underestimated.
The coffee houses of the city of London were the progenitors of such global institutions as the Stock Exchange and Lloyds, and those of Covent Garden and St. James's were the seedbeds of the Royal Society and the Enlightenment.
Coffee gradually gave way to tea in England, but the imposition of taxes on tea in the American colonies precipitated the Boston Tea Party.
The actual as well as the ideological rejection of tea led to the triumph of coffee in America, where coffee houses became the foremost meeting places for merchants, politicians and businessmen.
The Declaration of Independence was first read publicly outside the Merchant's Coffee House in Philadelphia, and President-elect George Washington was ceremonially welcomed to New York in front of another Merchant's Coffee House.
It had, amongst other things, formerly hosted slave auctions — a week before his inauguration.
If he had been able to walk from there but a few hundred yards and a couple of centuries in time, he would have come to the Coffee, Sugar and Cocoa Exchange in 4, World Trade Center.
It was to be destroyed in the 9/11 attacks master-minded by Osama bin Laden, whose forbears came from Yemen, itself the original home of the coffee trade.
One of the purported reasons why the World Trade Center was targeted was because the towers were seen as a symbol of the Western financial institutions that were accused of destroying traditional Islam.
Historically, coffee played a significant role in the evolution of both. Coffee is now falling victim to globalization. In earlier stages, it played an intimate part in its rise.
Reprinted from “Coffee: A Dark History” by Anthony Wild © 2005. With permission of the publisher, W.W. Norton & Company, Inc.