The great University of Chicago historian Marshall G. S. Hodgson once wrote that if a visitor from Mars had come to earth during the sixteenth century, he would have taken a look at the political, military, and cultural power of the Middle Eastern gunpowder empires and concluded that the entire world would shortly become Muslim. These empires not only ruled vast territories, they seemed to have resolved many of the problems of governance that had frustrated their predecessors. Yet, by the seventeenth century, Middle Eastern gunpowder empires were in deep crisis. In all fairness, these empires were not the only states in crisis at this time: States from Britain and France to China also entered into periods of difficulty. The problems these empires faced were so similar that historians even have a term for what was going on: the “crisis of the seventeenth century.” Britain, France, China, and the Ottoman and Safavid empires all experienced the same problem: the inability of imperial governments to maintain their authority within their territories. Civil and religious wars wracked France and Britain. In China, the seventeenth century was marked by peasant insurrection and the collapse of the Ming Dynasty, which had ruled for almost three hundred years. The imperial Ottoman government faced popular rebellions, military revolts, and the appearance of warlords who challenged the central government from Anatolia in the north to Baghdad in the east and Yemen and Egypt in the south. The Safavid Empire was so weakened by numerous calamities that in 1722 it became easy prey for invaders from the north.
While there were probably multiple causes for the crisis of the seventeenth century, many historians have emphasized the role played by the general rise in prices that struck almost all of the Eurasian continent. Some have called this the “great inflation”; others, the “price revolution.” Historians argue that inflation is the key to the crisis because the imperial governments that ruled in Europe and Asia at that time were, unlike the states that had preceded them, particularly dependent on a cash economy. There were two reasons for this. First, governments throughout Eurasia had attempted to displace the warlords and tame the aristocracies that had provided services to the crown by building armies and bureaucracies loyal to the central government alone. Building these armies and bureaucracies was expensive, and soldiers and bureaucrats had to be paid. Inflation raised the costs of maintaining them in the manner to which they had grown accustomed. Imperial states were, it appears, always short of money.
In addition, as newly centralized empires reached the limits of their expansion, rulers had to find new ways to legitimate their rule. As we have seen, the sultans and shahs of the Ottoman and Safavid empires could no longer claim a right to rule based on their position as warrior-in-chief or even on their personal magnetism or charisma. Imperial governments now entered a phase of their history that the great German sociologist Max Weber called the “routinization of charisma.” This was a period in which rulers and bureaucrats had to focus on the mundane problems of running the day-to-day affairs of state. No longer riding at the head of armies, emperors, sultans, and shahs had to find new means to represent their authority to their subjects and outsiders alike. Many did so by building sumptuous palaces and capital cities or by staging elaborate ceremonials that displayed the splendor of their court. This was, after all, the era of Louis XIV of France (r. 1661-1715), the “Sun King,” from whose magnificent court in Versailles power radiated. In a similar vein, a British traveler recorded the effect that Shah Abbas's capital city of Isfahan had on both Persians and foreigners:
The City has no need of Walls, where so many Marble Mountains stand as a Guard, or Bulwark of Defence.... The Circumference of the Body of the City I guess may measure Seven Miles; but if the dispersed Gardens and Seats of the Great Men, with the Palace Royal be brought into that Computation, we must allow it as many Pharsangs.... Its Founder (or at least, Adorner) Shaw Abas the Great, advisedly chose it for his Imperial Throne, that thence he might more readily disperse his Mandates to any suffering Part assaulted by the bold Incursions of his Enemies; irradiating like the Sun in the Firmament all within the Sphere of this Government: So that while the utmost of his Dominions are seasonably supplied with the comfortable Warmth of his Protection, he safely resides within, invulnerable.
Shah Abbas once proclaimed, “To know Isfahan is to know half the world.” Such splendor cost money.
Historians do not really know what sparked the inflation that led to the crisis of the seventeenth century. There are three main theories. Some historians claim inflation was caused primarily by demographic expansion. During the sixteenth century, they argue, the Eurasian continent experienced rapid population growth. It is estimated that during the sixteenth century alone, the population of Syria, Egypt, and Anatolia, for example, increased by 40 percent. Again, we are not really sure why this might have been the case. Some claim that the centralized states were able to provide better security for agriculturists than their predecessors had, and with better security came more agricultural production and population increase. Others maintain that the population of Eurasia naturally expanded in the aftermath of the Black Death that had devastated Eurasia during the fourteenth century, or that populations were better able to control the spread of infectious diseases. Whatever the reason, historians argue that the increase in population put tremendous pressure on available resources and sparked an inflation as demand for goods began to exceed supply. They point to the fact that the crisis only began to abate after population growth stagnated during the seventeenth century.
Painting of the Safavid shah Suleiman and his courtiers by the Persian artist Ali Quli Jabbar, ca. 1660s or 1670s. Notice the Dutch supplicant on the shah's right. (From: Layla S. Diba and Maryam Ekhtiar, eds., Royal Persian Paintings: The Qajar Epoch, 1785-1925 (Brooklyn: Brooklyn Museum of Art in association with 1.8. Taurua, 1988), p. 120.)
Other historians argue that the unusual dependence of states on cash was reason enough for the inflation. States spent an enormous amount of money to sustain their employees. In Persia, for example, an estimated 38 percent of the state's expenditures went to the army. Another 41 percent went to the imperial harem, the royal family, and royal attendants. States competed with the private sector for resources, and this drove up prices. States frequently compounded their problems by debasing their currencies to meet their payrolls. This meant that they often mixed the gold or silver of their currencies with baser metals and attempted to pass these new currencies off as the real thing. Because debased currency was worth less, prices rose and government employees demanded higher salaries.
It seems obvious to us now that the debasement of currencies would inevitably lead to a vicious cycle: Debasement would induce price increases, which, in turn, would encourage shortsighted governments to undertake further debasement. But during the early modern period, notions of economics, where they existed at all, were even cruder than they are today. Sometimes, this guilelessness led to absurd consequences: Spain, for example, went bankrupt twice during the sixteenth century, first in 1557, then again in 1575. In the second instance, when King Philip II of Spain found himself overwhelmed by creditors, he simply called together church leaders who told him what he wanted to hear: Since usury (the charging of interest) was a sin, he was under no obligation to pay back his creditors. The king, finding within himself a wellspring of piety of which he had previously been unaware, obeyed. Spain was not alone in its folly: In the first half of the sixteenth century, the Netherlands, Portugal, and France, like Spain, spent almost twice as much to extract wealth from the New World and to make war on each other so that they might extract wealth from the New World than they actually wrested from the Americas.
This brings us to the third possible reason for the inflation of the sixteenth century: the Spanish conquest of the New World. When they arrived in Mexico and Peru, Spanish conquistadors found tons of precious metals in the Inca and Aztec empires. Huge amounts of gold and particularly silver flooded first into Europe, then into Asia. Wherever the precious metals hit, prices went up. In the six decades between the conquest of Mexico and Peru and 1575, prices in Western Europe increased between 300 and 400 percent. Historians, using the sudden increases in bread prices as their measure, have even timed the journey of precious metals from west to east: first Cadiz, then Paris, then Muscovy, then Istanbul and Delhi, then Beijing. Thus, in 1660 a European trader compared Persia to a huge caravansary — a stopping place and trading center for caravans — with a gate in the west and a gate in the east. Coins, he explained, entered Safavid domains from the Ottoman Empire in the west, circulated in Persia, driving up prices, and finally exited through the eastern gate of Persia to India.
While some historians remain skeptical about the circulation of New World gold and silver to points as far away as the Middle and Far East, others point out that even if the precious metals did not actually reach that far, the looting of the New World had momentous effects on economies throughout Eurasia. They argue that new stocks of precious metals increased the velocity of trade, first among the states of Western Europe, then between the states of Western Europe and the rest of the continent. According to economists, an increased velocity of trade naturally increases inflation. Even if we do not wish to take economists at their word (a good idea, in light of their more recent failings), the arrival of new stocks of precious metals into Europe and the resulting inflation certainly did produce dramatic effects throughout Eurasia. It is well known, for example, that the imperial Ottoman government was unable to halt the smuggling of huge amounts of such commodities as wood, metals, wheat, raw silk, and wool out of the Ottoman Empire and into Europe, where they fetched higher prices. This smuggling denied the Ottoman government precious customs revenues and inhibited its ability to buy social peace: After all, without an adequate supply of basic commodities, the imperial government could not guarantee that its cities would be adequately provisioned. At the same time, the smuggling denied to Ottoman artisans the raw materials they needed to produce their wares and weakened the guilds that had been established in part to protect their members.
Whatever the role of the Spanish silver, most historians agree that sometime during the sixteenth century the world economy began to undergo a revolutionary change. Among the historians who pioneered the research into this change were those who advocated something called “world systems analysis.” In its most abstract form, world systems analysis runs something like this:
From the beginning of recorded time through the beginning of the sixteenth century, much of the world had been divided into what might be called “world empires.” Taken together, these world empires made up what world systems analysts call the “system of world empires.” The system of world empires had four characteristics. First, it was possible for several world empires to exist at the same time. For example, the early Ottoman Empire existed at the same time as did the Safavid, Habsburg (Austrian), and Chinese empires. Second, world empires spread through military conquest or the threat of military conquest. In other words, a world empire was no larger than the territory from which an imperial government might be able to extract taxes or tribute. In addition, each world empire provided for most of its economic needs independent of other world empires. Trade did take place, of course, and this trade was not just in luxury items. As a matter of fact, trade often involved bulk items such as cereals or wood. But in the system of world empires the economies of the trading partners were roughly equivalent and no economy was more “advanced” or dominated another. This is a far cry from the relationship among trading nations today, as we shall see. And this brings us to the final characteristic of the system of world empires: Each world empire was roughly equivalent to any nearby empire that existed at the same time. For example, no empire was technologically superior to any other, nor was any empire organized in a manner that gave it a particular advantage over any other. This stands to reason: If an empire fell behind economically or technologically, it would fall prey to its competitors.
Beginning about 1500, the system of world empires began to change into what is called the “modern world system” or “modern world economy.” This change did not occur overnight — it required several centuries to complete. The crisis of the seventeenth century, described at the beginning of this chapter, might be seen as the birth pangs of the modern world system. (As we shall see, the strategies employed by rulers to address that crisis would, in many cases, come to define the future position of their states in that system.) Judging by the effects of the Depression of 1873, which affected every inhabited continent on the globe, we might say with assurance that by at least that year the modern world economy was in place. It has been with us ever since.
Like the system of world empires, the modern world economy possesses a number of distinguishing characteristics. Unlike the system of world empires, which was, for the most part, politically and economically fragmented, the modern world economy is politically fragmented but economically united. In other words, rather than consisting of independent empires that provided for most of their own needs, the independent states that make up the modern world economy participate in a single, integrated global economic system — a single market, if you will. Furthermore, while world empires spread their influence solely through conquest or the threat of conquest, the modern world system spread its influence by bringing outlying districts into a single economic structure. This has occurred through conquest as well, of course, but it also has occurred through the pull of the international market. Since the sixteenth century, agricultural producers throughout the world have discovered that they might profit more from producing goods for the international marketplace than from producing merely for their own consumption. Where agriculturalists themselves did not take the initiative, governments often encouraged the transition in order to accumulate more revenue. Finally, while the system of world empires consisted of roughly equivalent states, some states in the world economy are more technologically and economically “advanced” than others and benefit more than others from the global marketplace. In effect, there are winners and losers in the modern world economy.
At first, Western European states acted as the engine that drove the modern world economy. These states brought other parts of the globe into the world market they dominated, but in a subordinate role. Thus, while states in Western Europe produced manufactured goods that they exported internationally, other parts of the globe bought the products produced in Western European factories and, in turn, produced the raw materials that fed those factories. As a result, the world economy came to be divided into distinct units: a developed core (first, states in Western Europe, then states in Western Europe and North America, then states in Western Europe, North America, and Japan) and what is called the periphery; that is, states at a lower technological and economic level. Some analysts have created a middle category, the semiperiphery, which includes states that share attributes with both core and periphery. The boundaries of the modern world economy expanded for centuries until it encompassed the entire globe. This process, which had an important effect on the Middle East, is known as integration and peripheralization.
Because states in Western Europe functioned as the core of the modern world economy at its inception, the modern world economy spread to outlying regions of the globe during periods in which the European economy expanded. One such period took place in the early nineteenth century, during the relatively peaceful years that followed the Napoleonic Wars. Not coincidentally, this is the period we associate with the industrial revolution. It was during this period that much of the Ottoman Empire became integrated into the modern world economy. Points further east — Iraq and Persia — had to wait until the second half of the nineteenth century.
To understand how the Middle East was integrated into the world economy in the status of periphery, we must go back to the sixteenth century. At their inception, both the Ottoman and Safavid empires stabilized and induced an expansion of the Middle Eastern economy. The Ottomans and Safavids, like all successful empire builders, encouraged economic self-sufficiency. They did this in a host of ways: by extending rural security, repairing and building infrastructure, making tax collection more efficient and less harsh, removing barriers to intraregional trade, establishing government monopolies, ensuring that their principal cities received provisions, regulating labor practices in those cities, and combating piracy on the seas. In addition, because of their central location, the Ottoman and Safavid empires controlled and profited from most of the spice trade between the East Indies and Europe. They also controlled much of the trade in luxury items such as silk. During the seventeenth century, two-thirds of Persian silk went to Europe. When the Portuguese attempted to horn in on the profitable Indian Ocean trade by establishing themselves in Aden (in contemporary Yemen) in 1513, the Ottomans swatted them away a quarter century later. While the world of uncontested and uncontestable European military supremacy might have been looming on the horizon, it had not yet arrived.
During the seventeenth and eighteenth centuries, there was a definite shift in the balance of power between Europe and the Ottoman and Safavid empires. This came about in the wake of the commercial revolution in Europe, which had begun in the sixteenth century. As mentioned earlier, there were many aspects to this revolution, some of which spawned it, others that were spawned by it and further encouraged its progress. The commercial revolution was a period in which new technologies of direct benefit to trade were invented and applied. Alongside these technological breakthroughs were breakthroughs in finance and the organization of trade — joint stock companies, insurance, banking — which allowed participants to increase their profits and spread risk among investors. Technological and institutional breakthroughs enabled Europeans not only to embark on voyages of discovery but to exploit them to the fullest. In 1497, Vasco da Gama discovered the Cape Route, which allowed Europeans to reach India and the Spice Islands (present-day Indonesia) by heading south around Africa's Cape of Good Hope, that is, entirely by sea. This enabled European merchants to bypass the Ottoman and Safavid empires and monopolize long-distance trade. As a result, the Ottoman and Safavid governments lost vital customs revenues, and merchants from those empires lost access to the spice trade to their European competitors.
About two decades after Vasco da Gama's discovery, the Spanish conquered Mexico and Peru, flooding Eurasia with tons of precious metals. Over time, all of Eurasia came to be divided into different economic zones in which prices varied widely. Where the precious metals had hit, prices were high; where they had not, prices remained at their usual levels. The division of Eurasia into different economic zones opened up new possibilities for trade. It also affected the social organization of the various zones differently. For example, since the price of grain was initially higher in Western Europe than in Eastern Europe, Eastern European nobles could increase their wealth by expanding their production of grain and selling that grain in the west. Eastern European nobles thus did everything they could to extend their control over land and the peasantry, including binding that peasantry to the land. The result was what historians of Eastern Europe call the “second serfdom.”
During the sixteenth century, the European table was enriched with a multiplicity of foods introduced from the New World, including corn (maize), potatoes, yams, peanuts, squash, chili peppers, tomatoes, pumpkins, chocolate, and manioc (tapioca). Between meals, Europeans could, for the first time, sit down with a pipe of tobacco (also introduced from the New World) or chew gum made from chicle— hence “Chiclets”—likewise a New World import. This was one side of what is called the “Columbian exchange.” (In return, the inhabitants of the Americas got cattle, pigs, horses, German measles, and smallpox.)
One commodity, however, made the trip from another direction: Coffee, introduced into Europe about a century after the previously cited items, originated in the Middle East.
The history of coffee is enshrouded in legend. There is, for example, the tale of its origins: The story goes that coffee was first discovered in the ninth century when an Ethiopian goat herder noticed his goats got a bit frisky after they ate the berries of a local shrub. After sampling the berries himself, he, too, experienced the same effect, as did those who undertook coffee cultivation in Arabia when it was brought there three centuries later. There is the story of the first coffeehouse in Vienna: The emperor asked the man who acted as a guide for the Polish cavalry that raised the 1683 siege what he wanted as a reward. Rather than the usual “the hand of your daughter in marriage,” he reportedly asked for the bulging sacks he saw in the abandoned Ottoman encampment, thinking they contained gold. In fact, they contained coffee beans. Thus, the first Viennese coffeehouse. (Strudel and Linzertorten would come later.) Then there is the story of the origin of tipping: In early British coffeehouses, coffeewenches placed cups for coins on each table. On the cups was inscribed “to insure prompt service”— abbreviated T.I.P.S.
Regardless of the truth of any or all of these stories, early travelers to the Middle East were amazed by coffee and the coffeehouses they found there. One Portuguese traveler, Pedro Teixeira, stopped off in Baghdad in the mid-1580s on his way to India and reported his first encounter with coffee as follows:
Amongst other public buildings...is a Casa de Kaodh [Teixeira's kaodh is borrowed from the Arabic word for coffee, qahwah.] Coffee is a vegetable of the size and appearance of little dry beans, brought from Arabia, prepared and sold In public houses built to that end; wherein all men who desire it meet to drink it, be they great or mean. They sit in order, and it is brought to them very hot, in porcelain cups holding four or five ounces each. Every man takes his own in his hand, cooling and sipping it. It is black and rather tasteless; and, although some good qualities are ascribed to it, none are proven. Only their custom induces them to meet here for conversation and use this for entertainment; and in order to attract customers there are here pretty boys richly dressed, who serve the coffee and take the money; with music and other diversions. These places are chiefly frequented at night in summer, and by day in winter....There are others like it in the city, and many more throughout Turkey and Persia.
Teixeira was not the only European fascinated by coffee. When coffee was first introduced in Europe, it caused a sensation. Little wonder: Unlike the skeptical Teixeira, most Europeans believed coffee to have the power of an aphrodisiac. In 17321734, the composer Johann Sebastian Bach documented the sensation caused by coffee, as well as its purported aphrodisiac powers, in his “Coffee Cantata.” In the cantata, a father confronts his daughter as follows:
You wicked child, you disobedient girl,
oh!, when will I get my way;
give up coffee!
To which she replies:
Father, don't be so severe!
If I can't drink
my bowl of coffee three times daily,
then in my torment I will shrivel up
like a piece of roast goat.
After the father promises his daughter to find her a husband if only she would give up coffee, she sings:
If it could only happen soon
that at last, before I go to bed,
instead of coffee
I were to get a proper lover!
(In the end, the ungrateful little vixen gets both a husband and her coffee.)
The commercial revolution was encouraged further by the rise of new political units in Europe. One such unit was a variation on an old theme: the merchant republic. Merchant republics had emerged in the Mediterranean region centuries before the commercial revolution. City-states like Venice and Genoa were highly efficient because merchants and bankers, not feudal landlords, controlled the institutions of state. Being at the helm of state, merchants and bankers ensured that the republic's foreign policy would coincide with its trade policy. By the seventeenth century, after the discovery of the Americas had shifted the center of gravity of world trade westward and the importance of the newly emergent Atlantic economy had surpassed the importance of the Mediterranean economy, Britain, France, and the Netherlands eclipsed their Mediterranean rivals. These states possessed two attributes that other European states would seek to emulate. First, like the Mediterranean merchant republics, they possessed a strong central government that could maintain domestic order, guarantee commercial credit, and direct a national trade policy. Britain, France, and the Netherlands adopted the doctrine of mercantilism as their trade policy. Mercantilists believed that the more gold a state accumulated, the stronger it would be, and that if states encouraged trade, exported more than they imported, and protected their home industries, they would be able to accumulate more gold. Second, unlike their predecessors, Britain, France, and the Netherlands possessed an integrated internal market that united town and countryside. This ensured the state access to the resources necessary to maintain a high level of economic activity and protect its interests abroad.
Slaves, Opium, and the Course of World Trade
The modern world economy began to take shape in the early sixteenth century. Although Spain had access to New World gold and silver, Britain, France, and the Netherlands were soon able to surpass their rival in terms of economic power. And over the course of the next two centuries Britain would eclipse its rivals as well. Along with the institutional changes discussed in this chapter, the ability of the British to dominate international trafficking in a few choice commodities propelled their ascent to the heights of economic power. Among these commodities were slaves and opium.
In 1532, the first boatload of enslaved Africans landed in the New World. This event marks the inauguration of the so-called triangle trade. British merchants, carrying guns, ammunition, and manufactured goods to Africa, traded those goods for slaves, whom they then transported to the Caribbean and North America via the infamous “middle passage.”There they sold those slaves, and with the proceeds bought sugar, tobacco, and cotton. The triangle trade generated huge profits for British banking houses (and British and North American merchants), enabling Britain to surpass its economic competitors. Britain continued to reap the surpluses from this trade until 1807—the year the British government (and the United States Constitution) declared the slave trade illegal. By that time, a new system for the circulation of commodities and capital was emerging.
Beginning in the early nineteenth century, the British East India Company began selling opium grown in India to China. The company did this to pay for its administrative apparatus in India and to offset its substantial trade imbalance with China. After all, the British had an unslakable thirst for Chinese tea and a boundless appetite for silk and chinoiserie, while the “celestial empire” had little use for the products of Britain. Not surprisingly, the Chinese government resisted the British attempt to balance accounts by turning China into one large opium den. Twice during the nineteenth century Britain went to war with China — the “opium wars” of 1839-1842 and 1856-1860—to open up the Chinese market to their noxious export and to keep it open. As a result of the wars, the Chinese were forced to accept opium from India and make a number of their ports available for”free trade."
Like the triangle trade system, the India-China trade system that emerged in the wake of the opium wars provided a foundation upon which the worldwide circulation of commodities and capital during the mid-to-late Victorian era would rest. According to economic historian A. J. H. Latham,
The sale of Bengal opium to China was a great link in the chain of commerce with which Britain had surrounded the world. The chain worked like this: The United Kingdom paid the United States for cotton by bills upon the Bank of England. The Americans took some of those bills to Canton and swapped them for tea. The Chinese exchanged the bills for Indian opium. Some of the bills were remitted to England as profit; others were taken to India to buy additional commodities, as well as to furnish the money remittance of private fortunes in India and the funds for carrying on the Indian government at home.
Besides supporting the global economic environment that the nineteenth century Middle East economy inhabited, the Victorian-era system for the circulation of commodities and capital affected the region in other ways as well. For example, both the Ottoman Empire and Persia piggybacked onto the international trade in opium. Soon after the opium wars, the Ottoman Empire became one of the three largest producers of opium in the world (the other two being China and India), and as a result of the availability of opium in Persia, the ranks of drug smokers swelled as never before.
In all, beginning in the seventeenth century Britain, France, and the Netherlands were able to dominate and transform the world economic system. Why these states rose to dominance and not others is not entirely clear. Nor is it clear why this process would have taken place at all. Perhaps it was because these states were better situated to take advantage of the possibilities opened up by the Atlantic economy. Perhaps it had to do with the peculiar nature of that northwestern peninsula of the Eurasian continent where these states were located. On the one hand, Europe was small enough to allow for the rapid diffusion of the technologies and institutional breakthroughs associated with the commercial revolution. On the other hand, it was competitive enough to force states that wished to survive to explore new means of applying those technologies and institutional breakthroughs. Suffice it to say, there were European winners and losers (whatever happened to Spain, much less Venice and Genoa?), and the transformation of the world economy that the winners induced was hardly inevitable.
It was therefore not that the Ottoman and Safavid empires were necessarily doing something wrong that allowed for the emergence of the modern world system with its Western European core. Indeed, these empires did everything that one would have expected them to have done to deal with the crisis of the seventeenth century. Strapped for cash, they curtailed the timar/tiyul systems and increasingly depended on tax farming to make up shortfalls in revenues. As we have seen, this may have resulted in the long-term alienation of resources from the imperial governments. Both governments sold offices in the bureaucracy and even the military to the highest bidder. The Ottoman government allowed members of the elite janissary corps to take jobs and raise families in places where they were stationed, thereby decreasing their incentive to fight wars on the fringes of the empire. Both governments increased taxation, further alienating the peasants whose surplus provided revenue for the state. Both governments debased their currencies, and, when this did not resolve their economic woes, debased them again. In all, the Ottomans and the Safavids worked within the parameters of a system that had become out of date.
Ultimately, both the Ottoman Empire and Persia were integrated into the world system as periphery. Integration and peripheralization would have a profound effect on the future of the region. Agricultural lands that had once been used for subsistence farming were turned over to the cultivation of cash crops like cotton, opium, and tobacco. By 1880, 20 percent of Persia's exports consisted of opium; on the eve of World War I, cotton comprised 80 percent of Egyptian exports. To facilitate these exports, European and local governments financed and built railroads and expanded ports to handle steamships, in the process changing the face of the region. Throughout the Middle East, a market economy, in which people produced commodities for sale, came to replace local marketplace economies, in which people produced mainly for their own consumption and used whatever surplus was left over to buy those items they could not produce themselves. Land itself became a commodity like any other to be bought and sold, once independent peasants became wage laborers on other peoples' estates, and tribal leaders became landlords while fellow tribespeople worked their lands as tenant laborers. In sum, Europe cultivated a colonial-style trade with Middle Eastern empires, and this relationship affected not only economic relations in the region, but social relations as well.