Louis Proyect: The Unrepentant Marxist

October 20, 2018

Mercantile Capitalism

Filed under: transition debate — louisproyect @ 7:59 pm

Jairus Banaji

Probably because British colonialism screwed their homeland so royally, Indian Marxists tend to be some of Political Marxism’s most vehement critics. Perhaps the best known of them is Jairus Banaji, who received the Deutscher Prize in 2011 for his “Theory As History: Essays on Modes of Production and Exploitation” that is available online. That year, Banaji’s book edged out Charles Post’s “The American Road to Capitalism”. I wish I could have listened in on the jury’s deliberations.

Since I tend to see Banaji and the writing team of Alexander Anievas and Kerem Nişancioğlu (A&N henceforth) as occupying the same place ideologically in this debate, I was surprised to see Banaji’s broadside against “How the West Came to Rule” in the latest HM. I found most of his article extremely useful but had some of the same qualms as expressed by Anievas and Nişancioğlu in a reply to their critics.

The nub of Banaji’s criticism of A&N is that they see Caribbean sugar plantations of the 17th century, for example, as combining both pre-capitalist and capitalist features in a “transitional” mode. For Banaji, there is nothing “pre-capitalist” in these plantations so if you look at these debates across a spectrum, the PM’ers were the direct opposites of Banaji with A&N toward the middle, leaning a bit in Banaji’s direction. Banaji makes his case thusly:

Without doubt the least fortunate pages in How the West Came to Rule are those dealing with the slave plantations. The plantations are characterised both as ‘ “transitional forms” of social relations combining complex amalgams of capitalist and non-capitalist relations’, as the ‘interlacing and systemic fusion of different relations of production’, and as productive units ‘geared specifically towards capitalistic [sic] production’ which ‘operat[ed] according to distinctly capitalist rules of reproduction’. Now both characterisations cannot simultaneously be retained, for if these enterprises really were ‘geared specifically towards capitalist production’, then they embodied capitalist relations of production even if exploitation in them was based on slave labour. No teleology prescribed that those slaves would eventually be transformed into wage workers employed by the same owners or by others.

I am afraid that Banaji undermines his own case by projecting capitalism backward in history to the point that it is difficult to distinguish between antiquity and modernity as might be obvious from this sweeping panorama:

The sheer historical variegation of capital, especially commercial capitalists, over the centuries is striking – from the Roman capitalists who had ‘vast sums invested in Asia’, according to Cicero, or the capitalists of Fars in southern Iran whom the geographer al-Iṣṭakhrî described in the tenth century as ‘passionate’ about ‘accumulating capital’, or the ‘large capitalists’ who drained the salt marshes east of Basra using slaves imported from East Africa, or the ‘northern Kiangsu industrialists’ who invested in a booming iron industry employing thousands of wage labourers, or the ‘merchant princes’ of late-Song/Yuan China who owned massive shipyards and were both shipowners and international merchants at the head of ‘great business firms’, or the Corner brothers of Venice who built substantial sugar interests in Cyprus on plantations that imported large copper boilers from Italy, to the Dutch Calvinist merchants who emerged from the great Flemish dispersion of the seventeenth century to become the ‘economic élite of Europe’ and ‘the heirs of medieval capitalism’; the big colonial merchants of London who would ‘accumulate sufficient capital to diversify investment around their core business into ship-owning, joint-stocks, insurance, wharf- leases, and industry’, when London expanded rapidly in the late seventeenth century; the East India Houses of the nineteenth century, old City firms with branch houses in India that speculated repeatedly in indigo, opium and sugar; the Beirut trading houses who exported raw silk to French commercial houses in Marseilles and Lyons in the early part of the twentieth century; or, finally, big international merchants of our own period, companies like UAC, CFAO, and Metallgesellschaft.

Does it make sense to refer to Roman capitalists in the time of Cicero, namely the first century before Christ? Perhaps this only makes sense if you collapse all of the various stages of world history into class societies and the primitive communist societies that preceded them. Is there a difference between Roman slavery and that of the Deep South? I tend to think so. In my view, there is something to be said for the PM emphasis on relative surplus value that depends on the introduction of machinery into the productive process when extending the working day and other forms of exploitation associated with absolute surplus value have run their course. When Marx wrote the Communist Manifesto, he was trying to identify the dynamism of the capitalist system of his day, which surely could not have been mistaken for Cicero’s Rome.

Now that this is out of the way, I want to focus on Banaji’s discussion of mercantile capitalism that according to Charles Post does not exist.

At an HM conference in 2015, someone raised a question about merchant capital in a panel discussion that included Post. Post answered by saying that that such an interpretation was based on an understanding of “primitive accumulation” that belonged to Early Marx, before he became a full-fledged Marxist. It was the one that could be found in the German Ideology and Communist Manifesto and that was still in the shadow of Adam Smith—a Smithian Marxism so to speak. In other words, Post was saying basically the same thing as Spencer Dimmock who dismissed chapter 31 of Capital with its reference to slavery and colonialism as being written when Marx was still under Adam Smith’s influence. According to the PM’ers apparently, it was only when Marx had become fully mature by V. 3 of Capital that the real “primitive accumulation” emerged, one in which social property relations was the lynchpin rather than errant notions of buckets of booty from the colonies, slavery and all that other superfluous stuff that got mixed in. In this interpretation, it was the enclosure acts, etc. that define primitive accumulation rather than the overseas accumulation of silver, etc.

Toward the end of his article, Banaji defines merchant capital (or mercantile capitalism) as being very real and very much consistent with Marx’s mature analysis:

Yet Marx himself described mercantilism as the ‘first scientific theoretical treatment of the modern mode of production’. With the Mercantile System, he writes elsewhere, ‘it is no longer the transformation of commodity value into money that is decisive but instead the production of surplus-value’. And in another passage, this time from the Grundrisse, he describes the Mercantile System as an ‘epoch where industrial capital and hence wage labour arose in manufactures’; but here he adds the fascinating aside: ‘Industrial capital has value for them [the mercantilists], even the highest value, as a means … because it creates mercantile capital and the latter, via circulation, becomes money’.

If, as Marx believed, the manufacturing period involved an expansion of industrial capital, then of course these were industries largely controlled by merchants. We can always call this industrial capitalism, but today historians would doubtless prefer to see these early forms of industrial capital as simply one aspect of the wider system of merchant or commercial capitalism that expanded in the late-medieval/early-modern world. In his brilliant monograph on the Venetian silk industry, Luca Molà points out that in Vicenza by the end of the sixteenth century ‘the silk mills belonging to merchants alone were well over 100’. Merchant capitalists extended control over production in multiple ways. But they also dominated a host of major economic sectors such as foreign banking, wholesale trade, shipping, government finance, tax-farming, and so on. In any case, regardless of where they invested, we have to abandon the tautology which claims that ‘The independent and preponderant development of capital in the form of commercial capital is synonymous with the non- subjection of production to capita …’, an assertion which ignores Marx’s own remarks about the role of merchants in the luxury industries.

Volume 3 of Capital was not exactly written by Karl Marx, who died before it could be turned into a cohesive manuscript. It was completed by Engels, who based himself on Marx’s notes. But there is little doubt that it represents his mature thought. That being said, it is worth referring to chapter 20 titled “Historical Facts about Merchant’s Capital” that captures the contradictory nature of commodity production in the period either neglected by PM’ers or given short shrift by Ellen Meiksins Wood in her reference to the East India Company as “pre-capitalist”:

There is no doubt — and it is precisely this fact which has led to wholly erroneous conceptions — that in the 16th and 17th centuries the great revolutions, which took place in commerce with the geographical discoveries and speeded the development of merchant’s capital, constitute one of the principal elements in furthering the transition from feudal to capitalist mode of production. The sudden expansion of the world-market, the multiplication of circulating commodities, the competitive zeal of the European nations to possess themselves of the products of Asia and the treasures of America, and the colonial system — all contributed materially toward destroying the feudal fetters on production. However, in its first period — the manufacturing period — the modern mode of production developed only where the conditions for it had taken shape within the Middle Ages. Compare, for instance, Holland with Portugal.[5] And when in the 16th, and partially still in the 17th, century the sudden expansion of commerce and emergence of a new world-market overwhelmingly contributed to the fall of the old mode of production and the rise of capitalist production, this was accomplished conversely on the basis of the already existing capitalist mode of production. The world-market itself forms the basis for this mode of production. On the other hand, the immanent necessity of this mode of production to produce on an ever-enlarged scale tends to extend the world-market continually, so that it is not commerce in this case which revolutionises industry, but industry which constantly revolutionises commerce.

As it happens, the only PM’er who wrote a book focused on the merchants was Robert Brenner himself in his 1993 “Merchants and Revolution: Commercial Change, Political Conflict and London’s Overseas Traders 1550-1653”. As might be expected, the British colonists operating sugar plantations in Barbados were not capitalist in Brenner’s eyes. The only genuine capitalists in the 17th century were those who leased (or owned by this point) the vast agrarian estates that provided the oomph necessary to make the industrial revolution possible. Brenner’s book was reviewed that year in the London Review of Books by Perry Anderson who has never written about the “transition” debate except in this review, as far as I know. He lauds Brenner’s research but finds his landmark thesis lacking. You’ll note how close it is to what Marx wrote in chapter 20 of V. 3 of Capital:

For all the power of this case, there were always difficulties with its overall context. The idea of capitalism in one country, taken literally, is only a bit more plausible than that of socialism. For Marx the different moments of the modern biography of capital were distributed in a cumulative sequence, from the Italian cities to the towns of Flanders and Holland, to the empires of Portugal or Spain and the ports of France, before being ‘systematically combined in England at the end of the 17th century’. Historically, it makes better sense to view the emergence of capitalism as a value-added process gaining in complexity as it moved along a chain of inter-related sites. In this story, the role of cities was always central. English landowners could never have started their conversion to commercial agriculture without the market for wool in Flemish towns – just as Dutch farming was by Stuart times in advance of English, not least because it was conjoined to a richer urban society. Yet, even if the ‘bourgeois’ contribution to the economic genesis of capitalism is conceded, this does not mean that a political ‘revolution’ was necessary to smooth its path. That would have been one possible reading of Brenner’s case, with its emphasis on the immanent dynamism of competitive production for the market. Where does his new work leave the issue?



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