Jairus Banaji, A Brief History of Commercial Capitalism

In his 1973 essay ‘Marxist History, a History in the Making: Towards a Dialogue with Althusser’, the French historian Pierre Vilar wrote ‘Anybody can call himself a historian. Anybody can add ‘Marxist’ to the title if he sees fit. Anybody can call anything he likes ‘Marxist’. Nevertheless, if there is one thing more difficult and rare than to become a historian, it is to be a Marxist historian’. The self-styled Marxist historian Jarius Banaji considers himself in the company of these rare few, and his A Brief History of Commercial Capitalism is another contribution to his long list of works of Marxist history and historiography. The fundamental premise of the book is that Marx and Marxists have grossly misjudged the period and extent to which merchants were not only involved in, but also directly organised, global production. In this misjudgement, the Marxist tradition has been doomed to fail in its understanding of the history of capitalism as such. Banaji responds to this failure by presenting a specifically Marxist study of merchant and commercial periods. Whether Banaji does in fact stand among the ranks of the all too rare Marxist historians remains to be seen

This brief history is a temporally and geographically sprawling historiography of commercial and merchant capital that draws on historical accounts written in an impressive seven different languages. Chapter 1 addresses the Marxist ‘orthodoxy’ that relegates merchant capital to a purely intermediary function; mediating exchange of commodities but bearing no direct role in production. But this orthodoxy, Banaji contends, is at odds with not only the non-Marxist historiography since the 1940s but also Marx’s own comments on situations where merchants do in fact dominate production directly (85, 107). Chapter 2 then moves to discussing the three infrastructural cornerstones of commercial capitalism: trading colonies, wholesale markets, and bills of exchange. Chapter 3 reviews the competitive struggle from the twelfth- to the eighteenth-century between the prominent trading nations such as Venice, Genoa, Portugal, the Dutch Republic, France, and England, but also the Byzantine Empire, India, and China. It was between the sixteenth- to the eighteenth-centuries, but especially the seventeenth-century, that the state became intimately bound up with these commercial conflicts in the interest to secure commercial dominance as a national entity (48). Chapter 4 homes in on British mercantile capitalism and its managing agencies where ‘The blurring of lines between commercial and industrial capital was nowhere more evident’ (67) since control of industrial enterprise was subordinated to trading companies. The chapter also discusses the commercial expansion of the nineteenth-century and Greek dominance of the Levantine trade.

Another case of this ‘blurring’ is examined in Chapter 5 where Banaji explores ‘the putting out system’. There, Banaji shows the way that a range of industries were directly subordinated to, and hence commanded by, merchant capital. In discussing three major examples of this ‘merchant manufacturing’––the Florentine wool industry, Lyon’s silk industry, and Oriental Carpet Manufacturers across vast regions––Banaji shows how the ‘merchant controlled, managed, and coordinated production itself’ (86). The final chapter concludes by discussing the large merchant firms of the early twentieth-century and the significant role of brokers in the sectors of wholesale trade, as well as how ‘By compressing the chain of circulation’ (99), mercantile interest was bound to different levels of the commercial system as a result of what Banaji terms ‘vertically integrated’ firms and industries. Lastly, an appendix on ‘Islam and Capitalism’ asks why ‘the Middle East down to the final years of the Ottoman Empire (and in Iran, even later) [did] not evolve into a modern capitalist economy’. Banaji’s response to this is that, on one hand, capitalists failed to form a class and, on the other, there was an absence of an Islamic counterpart to the West’s aggressive mercantilist expansion and the state backing of merchants (132–3).

In a paper entitled ‘Commercial Capitalism in the Mediterranean from the Late Republic to Late Byzantium’ Banaji contends that historians writing about merchant and commercial capitalism ‘almost never define the object of their discussion’. Ironically, A Brief History of Commercial Capitalism exhibits this same trait. Its object––commercial capitalism––is never defined. This lack of explanation, especially from an avowed Marxist historian, is particularly odd considering that in Marx’s writings on merchant capital (kaufmännisches Kapital, Kaufmannskapital) and commercial capital (kommerzielles Kapital, Handelskapital)­­, never once did he speak of commercial capitalism (Kapitalismus). Regardless, this book is largely a Marxist response to and problematisation of the ‘Marxist reticence about merchant’s capital’ (3). Rare though Marxist historians may be, as per Vilar’s proclamation, Banaji claims to be among their ranks. And so it is worth asking, what exactly is Marxist about Banaji’s response to this Marxist reticence?

The book first opens with an outline of the various notions of ‘capital’ across a long range of centuries and landscapes; ‘capital’ as property or assets, sum invested, money put to work, and so on. In a somewhat indirect way Banaji demonstrates how an economic category––in this case, capital––transforms across different historical contexts. That is to say, how this concept is historically specific. For this, Banaji can certainly claim his status as a Marxist. After all, Marx’s critique of political economy relies a great deal on this historicising––that is also to say de-naturalising––gesture. As against ahistorical bourgeois economists, who in conceiving economic categories independently of society characterised capitalist relations as natural and pertaining to all social life, Marx, as early as the late 1840s, was adamant that such categories are social, historically determined, and therefore transitory. However, Banaji’s continuity with Marx on this point lasts all too briefly. Despite his opening, the remainder of the book unreflectively relies on transhistorical notions of capital, wealth, value, labour, and profit. This transhistorical use of economic categories facilitates his presentation of a long durée narrative of the history of capitalism in which disparate mercantile and commercial practices are treated, pros hen, as instances of a coherent system of merchant or commercial capitalism.

What especially unites these disparate conceptions and practices across these vast periods of time as ‘commercial capitalism’ is an all too broadly conceived notion of profit-seeking. This, however, poses problems for the Marxist historian because it robs the Marxist account of its central contribution to the understanding of capitalism: the peculiarity of surplus-value and exploitation (not to mention Marx’s analysis of the homogenisation of concrete human labour to equal abstract human labour as well as value-creating socially necessary labour-time in a commodity-producing society). Contra to profit upon alienation of the mercantile class (buying cheap and selling dear), the extraction of surplus-value in capitalism still begets profit even when commodities are sold at their value. And while the putting-put system is certainly a case of the latter, as many Marxists have long agreed, it is difficult to see how the vast stretch of history­––at least from the twelfth-century onwards––can be subordinated into commercial capitalism if not for an expanded and universalising grasp of economic categories and practices. The assumption that capitalism is simply when profit, trade, and labour transpire is neither an historically nor theoretically refined assessment. Fundamentally, the conflation of different economic categories, and particularly of profit-seeking activities, loses the elemental piece of Marx’s critique of political economy.

The use of such transhistorical notions, however, is not only a misstep for a Marxist historian, but for a historian per se. After all, several non-Marxist historians have, for some time, questioned the extent to which the term ‘mercantilism’ has given a false unity to disparate events in history (see, for instance, a summary of several debates in Lars Magnusson’s The Political Economy of Mercantilism). This unified narrative is nevertheless made possible when the broader components of the historical context are abstracted away from, as is the case in A Brief History of Commercial Capitalism. Aside from the lack of attention to the historical specificity of economic categories and practices, among these decisive components are also the various economic ideas of the times. These are especially important, as the ideas of mercantile thinkers influenced public opinion, state policies, and economic activities. The different ideas put forth in many of the periods, with which Banaji is concerned, have profoundly shaped mercantile and commercial processes and realities. To account for these ideas is therefore to understand these periods with greater veracity. Apart from some passing remarks on a few prominent figures and economic principles, that Banaji, a thinker well-known for his insistence on the intimate relationship between theory and history, treats these periods largely in vacuo from economic ideas of the relevant periods is surprising, to say the least.

At any rate, it could be argued that the Marxism of the book lies in Banaji’s incorporation of Marx’s historical remarks into his economic history. Of course, isolating the historical writings from Marx’s theoretical framework is questionable considering how closely associated Marx’s studies of history were with his project of critique. Nevertheless, the historical remarks ‘scattered through the corpus of Marx’s own writings’ (9) illuminate fascinating paradoxes in Marx’s understanding on merchant and commercial capital (85, 107). But even Banaji’s treatment of these texts is analogous to how he treats economic categories; in complete isolation from their historical context. Many of the texts consulted by Banaji are in fact manuscripts, and not completed works, that were edited and published posthumously (Grundrisse, Theories of Surplus-Value, Capital, Volume III; Capital, Volume II). That Marx’s thinking is full of ambiguities comes, therefore, as no surprise. The writings in these manuscripts were a direct product of Marx’s ever-developing historical knowledge over the course of life-long investigations. Marx’s extensive historical studies from 1863 all the way to 1882––in tandem with his studies of the Physiocrats, Mercantile systems, classical political economy, national economy, and so on––went far beyond his own nineteenth-century European milieu. Even as early as 1850 in the Neuen Rheinischen Zeitung. Politischökonomische Revue, the young Marx and Engels were following the developments of world trade:

The centre of gravity of world commerce, Italy in the Middle Ages, England in modern times, is now the southern half of the North American peninsula. The industry and trade of old Europe will have to make huge exertions in order not to fall into the same decay as the industry and commerce of Italy since the sixteenth century, if England and France are not to become what Venice, Genoa and Holland are today. In a few years […] the Pacific Ocean will have the same role as the Atlantic has now and the Mediterranean had in Antiquity and in the Middle Ages – that of the great water highway of world commerce.

Given the weight that Banaji places on Marx’s historical remarks, it is surprising that he does not investigate Marx’s broader corpus–­–the latter of which is spent exploring matters such as Italian merchant cities, long-distance trade, and world trade networks. In considering only Marx’s canonical texts, a plenitude of such relevant historical writings and excerpts are simply neglected in Banaji’s ‘Marxist’ analysis. Neither does Banaji consult the historical works that informed Marx’s historical studies. This ultimately leads Banaji to provide an either incomplete or completely empty assessment of Marx’s analysis of the historical subjects at stake in A Brief History of Commercial Capitalism.

Yet, the insufficiency of the investigation does not end there. Recalling Banaji’s fundamental preoccupation about the Marxist reticence, the extent of his attempt to search for researchers ‘consciously working in a Marxist tradition’ (8) is questionable in the face of a great tradition of Japanese Marxology, of which a number of works have either been translated or reported upon in the languages Banaji reads. Since the 1950s, beginning with Uno Kōzō’s theory of capitalism, Japanese Marxists have contributed considerably to the studies of commercial capital. After Uno, this field developed in the form of the Unoist school with Uno’s notable student Yamaguchi Shigekatsu, and his 1983 publication of Competition and Commercial Capital. Today, this area of study remains one of most popular in Japanese Marxian economics. Among the contemporary scholars of this tradition is Shimizu Masashi who considers commercial capital not simply as an agent of industrial capital but also, like Banaji, a direct organiser of production processes, seeing the putting-out system as an exemplary case of this wider role. This surely casts doubt on the thoroughness of Banaji’s efforts to find Marxist traditions and researchers in the thick of this reticence.

The title of A Brief History of Commercial Capitalism certainly does not deceive. As a general history of mercantile and commercial capital, Banaji offers an expansive historiography that brings together a breadth of sources. But Pierre Vilar was correct to declare that it is difficult and rare to be a Marxist historian. Banaji’s own attempt at a Marxist history perhaps falls short on at least three separate fronts: 1) accounting for the historical specificities of capitalism (a fundamental element of Marx’s critique of political economy); 2) ignoring Marx’s broader historical studies; and 3) neglecting past and present Marxist research on merchant and commercial capital. In view of these problems, does Banaji still stand among the rare few?