GEORGIA’S ENCOUNTERS WITH THE FIRST CENTRE OF CAPITAL ACCUMULATION (TRADE AND CREDIT)

Abstract

Based on Fernand Braudel's observations and works, Italian economist and sociologist Giovanni Arrighi put forward a theory about the systemic cycle of capital accumulation. According to his cycle, the first center of capital accumulation was the city-state of Genoa, second Holland, third Britain, and fourth United States of America. According to Giovanni Arrighi, any cycle in the formation of a center of capital accumulation consists of two phases, one of which is material expansion, when new technologies create a new center, and the other is when accumulation moves into the financial sphere.

The monopoly gained by the Genoese over the Black Sea terminal made it an important state in international trade. In this process, it became the first center of capital accumulation. Georgia was included in the scheme of international trade. Although the role of the Georgian kingdoms was not significant, their participation in this scheme had a substantial impact on their development and public life. From then on, Georgian merchants were engaged in such forms of trade, where credit and debt occupied a special place. Soon after the credit forms, they were included in the commodity credit form. Georgian merchants used all types of maritime trade and credit of that period, both in Kafa and Sukhumi. Genoese merchants visited Sukhumi, Poti, and Batumi with promissory notes or insured credit. If earlier the debt was burdened with a pledge according to Georgian law, Genoese offered Georgian merchants the benefit in the form of already insured credit. The demand for the small products exported from Georgia created the need for a division of labor. Georgian artisans worked in Kafa and were involved in the military industry. Earlier, most traders in Georgia were foreigners. However, as a result of this shift, Georgians appeared among their ranks as well. New forms of trade contributed to the emergence of a new class of merchants. The ranks of merchants and artisans were most likely filled from the ranks of "servants", which points to unusual changes in the local feudal mode of production. But all this was eventually reversed after the Ottomans took control over the Black Sea, followed by the re-strengthening of serfdom and deepening of feudal relations.

Key Words: Georgia; Genova; Trade; Credit; Capital Accumulation;