The purpose of this blog is to provide analytical commentary on formal and informal labour organisations and their attempts to resist ever more brutal forms of exploitation in today’s neo-liberal, global capitalism.

Friday 11 March 2022

The Limits to Commercial Capitalism

In his latest book A Brief History of Commercial Capitalism (Haymarket Books, 2020), Jairus Banaji provides a masterful overview of historical trading relationships in Europe. At the same time, this book also reveals once more the limits of an understanding of capitalism, focused on market exchange relations. In this blog post, I will provide a critical review drawing out the weaknesses of such an approach.


Banaji’s overview of trading relationships in Europe is at times breath-taking. He paints a rich picture of trading colonies and wholesale markets from the 12th century onwards and concludes that ‘the history of commerce is thus a rich tapestry of trading colonies that spanned the entire globe, wherever this was accessible’ (P.15).

 

Particular importance is attached to the role of the state, and the competition of capitals is linked to particular forms of state, starting with Byzantium in the 12th century – ‘it was the greatest commercial center of the eastern Mediterranean, with a population by then not far short of half a million’ (P.30) – via Genoa and Venice to Portugal, the Netherlands and ultimately Britain. State power inevitably underpinned trade expansion. ‘Britain’s occupation of Egypt ushered in the “heyday of cosmopolitan Alexandria”, the palmy years from 1882 to 1936, when the size of the cotton harvest more than doubled in the years before the outbreak of the war’ (P.82).

 

As impressive as Banaji’s overview of trading history however is, the book also reveals the weaknesses of ‘commercial capitalism’. First, Banaji’s analysis is surprisingly ahistoric. History from the 12th century to today follows a similar path with one state-capitalist complex being replaced by another. Structural changes such as the industrial revolution go completely unnoticed in this narrative. It is even not clear why we should start in the 12th century with our historical overview. If trading relations are capitalist, then we have had capitalism in other trading empires much earlier and elsewhere. Second, as a colleague in our Nottingham based Marxism Reading group pointed out, his account is rather apolitical. Whether in the work by Marx himself or in the work of Marxists, the dynamics and consequences of capitalist exploitation in its different forms is always at the forefront of analysis implicitly and often also explicitly calling for action. Nothing of this criticism can be found in A Brief History of Commercial Capitalism. A critique of capitalism is missing!



Most importantly, however, and this is also reflected in Banaji’s other work, he has no way of explaining why capitalism is driven by this relentless pressure towards outward expansion (see Modes of Production and Forms of Exploitation: Understanding Capitalism). Similar to the world-systems approach, Banaji’s definition of commercial capitalism emphasises the production of goods for a sale on markets with the main objective of maximising profits. Hence, the focus is on exchange, not on production and the social relations within which production is organised. Nevertheless, this definition of capitalism based on a commercialisation model of market exchange relations assumes that the outward expansion of capitalism arises from individual greed (Teschke 2003: 140), very similar to how neo-classical, liberal theorists would understand it.  

 

The social property relations approach by Robert Brenner and Ellen Meiksins Wood, on the other hand, emphasises the particular way of how production is organised in capitalism. As a result of production being based on wage labour and the private ownership of the means of production, capitalism is enormously dynamic with capitalists constantly attempting to outcompete each other. At the same time, this results in periodic moments of crisis of overaccumulation, when surplus capital and surplus labour can no longer be brought together fruitfully. Hence, this relentless structuring pressure of outward expansion in search for new markets and cheaper labour to overcome crisis, only to encounter eventually another crisis (Bieler and Morton 2018: 38-41).

 

Banaji’s discussion of the putting-out system comes closest to such a production based understanding. Here, workers still owned their own means of production, but depended on merchants for their actual work. ‘The workers were wage earners working with their own tools in their own workshops and homes’ (P.88). Formally, these workers had not yet been expropriated from their means of production, but in practice they were wage labourers as were the workers in a big factory. What Banaji’s fails to grasp, however, is the rather specific way of profit-making in the putting-out system, completely different from making a profit through trade, buying cheap in one place and selling dear in another.   

 

Undoubtedly, Banaji’s book is a major scholarly achievement, but it is also rather frustrating considering its inability to provide us with opportunities of understanding capitalist dynamics. It, thus, does not allow us to comprehend where we are in the current conjuncture of global capitalism and how we can overcome exploitation. A Brief History of Commercial Capitalism reveals all the shortcomings of commercial definitions of capitalism.

 

Andreas Bieler


Professor of Political Economy
University of Nottingham/UK

Andreas.Bieler@nottingham.ac.uk

Personal website: http://andreasbieler.net


11 March 2022

 

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