own brand of absolutism, they may have remained in the
same state they were in at the end of the sixteenth century,
or they may have continued their commercialization by
gradually adopting more and more inclusive institutions. But
as in the Moluccas, Dutch colonialism fundamentally
changed their economic and political development. The
people in Southeast Asia stopped trading, turned inward,
and became more absolutist. In the next two centuries, they
would be in no position to take advantage of the
innovations that would spring up in the Industrial Revolution.
And ultimately their retreat from trade would not save them
from Europeans; by the end of the eighteenth century,
nearly all were part of European colonial empires.
W E SAW IN CHAPTER 7 how European expansion into the
Atlantic fueled the rise of inclusive institutions in Britain. But
as illustrated by the experience of the Moluccas under the
Dutch, this expansion sowed the seeds of
underdevelopment in many diverse corners of the world by
imposing, or further strengthening existing, extractive
institutions. These either directly or indirectly destroyed
nascent commercial and industrial activity throughout the
globe or they perpetuated institutions that stopped
industrialization. As a result, as industrialization was
spreading in some parts of the world, places that were part
of European colonial empires stood no chance of
benefiting from these new technologies.
T HE A LL -T OO -U SUAL I NSTITUTION
In Southeast Asia the spread of European naval and
commercial power in the early modern period curtailed a
promising period of economic expansion and institutional
change. In the same period as the Dutch East India
Company was expanding, a very different sort of trade was
intensifying in Africa: the slave trade.
In the United States, southern slavery was often referred
to as the “peculiar institution.” But historically, as the great
classical scholar Moses Finlay pointed out, slavery was
anything but peculiar, it was present in almost every
society. It was, as we saw earlier, endemic in Ancient