The installation of the colonial capitalist economic system required the creation of certain socio‐political structures to ensure the reorganisation of indigenous economies for accumulation. This precipitated the appearance and the gradual and sometimes violent extension of the colonial state into the hinterland of the colonies. The concept ‘colonial state’ is employed here to denote its characteristic difference from the state as it emerged in the context of European capitalism. The state in the colonies was imposed from above and supervised a captive population and economy, which together were ‘protected’ for expatriate metropolitan capitalism, and was largely responsible to the metropolitan state. The latter provided unusual limits to its operation.
Colonial capitalism was a ‘bastard’ form of capitalism as the state's presence was over‐arching and also denied indigenous capitalist entrepreneurs from any substantial participation in the economy. It did this within Ghana through legislation which undercut local and favoured expatriate capital and allowed the latter considerable freedom of operation. The colonial state underwrote the process of expatriate capital accumulation by encouraging labour recruitment (many times forcefully) and the payment of low wages and by restricting labour unionisation. Agricultural producers were denied direct access to markets except through expatriate merchant houses which manipulated prices. Control of the colonial economy affected the process of class formation as the colonial state encouraged differential participation in the economy by various regions and communities among the colonised population.
Trade had existed between African communities and Europeans before colonisation. In this pattern of trade, relatively equal partners had exchanged their goods without the need for domination. Colonisation introduced the domination of one partner. European capital sought to wrest the control of trade and resources from the hands of local traders and reduce them to producers, wage earners or both. This would ensure a constant production of commodities for export which would not depend upon the goodwill of indigenous rulers.
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