Zanzibar developed during the nineteenth century as the seat of a vast commercial empire that in some ways resembled the mercantile empires of Europe of the preceding centuries. Unlike them, however, it was developing at a time when capitalism was already on its way to establishing its sway over industrial production and was subordinating merchant capital to its own needs. In the capitalist metropoles this entailed the disintegration of merchant capital's monopoly position and the reduction of its rate of profit to the general average. It was thus being reduced to an agent of productive capital with a specific function: distributing goods produced by industry and supplying the latter with the necessary raw materials.

But capitalism was simultaneously developing as a world system as it gradually drew the different corners of the globe into its fold. In this historic process merchant capital played a vanguard role. As a form of capital it shared the dynamism arising out of profit maximisation and the drive towards accumulation of the capitalist classes. This drive, therefore, pushed it to encourage constant expansion in the scale of production of exchange values without itself participating in actual production. Existing as it did at the periphery of the expanding capitalist system, it seemed to enjoy its pristine position and relative autonomy. Backward conditions here enabled it to monopolise trade and appropriate a handsome rate of profit that appeared to guarantee primacy to the merchant classes. That primacy, however, was illusory, for capitalism was close on their heels, subverting them step by step, and ultimately subordinating them to its own rule. In examining the history of Zanzibar during the nineteenth century, therefore, it is necessary to consider closely what Karl Marx termed the ‘historical facts about merchant capital’.