The following article by Jairus Banaji is part of a forthcoming symposium on Alexander Anievas and Kerem Nisancioglu’s How the West Came to Rule: The Geopolitical Origins of Capitalism (Pluto, 2015) to be published in Historical Materialism. Anievas and Nisancioglu’s work has been recently awarded the International Political Economy Working Group Book Prize of 2016 (British International Studies Association) and International Political Sociology Best Book Prize of 2017 (International Studies Association). If you enjoy Banaji's piece, please do make sure to check out the entire symposium once it's out in print.

Jairus Banaji is Research Professor in the Department of Development Studies, SOAS, University of London. He published Exploring the Economy of Late Antiquity: Selected Essays (Cambridge, 2016) earlier this year and is currently writing a book called A Brief History of Commercial Capitalism.

How the West Came to Rule is a welcome contribution to Marxist debates on capitalist origins not just for its sharp focus on the issue of Eurocentrism in the way capitalism is written up historically and conceived popularly,[1] but also because it sets out to develop an alternative framework to those histories. The essential feature here is its subsuming of large parts of the world outside and beyond ‘Europe’ and the general argument that it is impossible to understand the true origins ofwestern capitalism without assigning a central place to those areas of the world. Stated in this way the argument is unexceptionable, since no Marxists have seriously disagreed with Marx’s view thatwestern capitalism (capitalism as it emerged in Britain and more widely in ‘western’ countries) would have been impossible without the preceding or accompanying histories of colonial subjugation, Atlantic slavery and the world market more generally.  The debates have always been about how much all of that mattered and whether capitalism can really be said to have ‘started’ in a single country, notably England, and somehow spread outwards from there.

Both the critique of Eurocentrism and the call for a more integrated historiography of capitalism have the potential to steer future Marxist scholarship and debate away from the problematics and framing guidelines of the transition debates, not least of the one dominated by the work of Brenner and the perspectives of what is called “Political Marxism”. But for this shift to new ways of thinking about capitalist origins to come aboutHow the West needs at least a preliminary critique that rids it both of its residual formalism (as I see it) and of the one or two confused characterizations this leads to. Whether ‘combined and uneven development’ really does work as a framework ofexplanation at the level of generality at which the authors situate it (that is, beyond the dynamics of a capitalist world dominated by a mounting sense of nationality) is a separate issue that I shall leave aside for others to take up.

Narratives of origins

It may help to start by laying out some leading examples of historians’ models of capitalist emergence and growth:

1. Capitalist emergence as a dynamic of accumulation that creates a self-sustaining, integrated national economy (Wood);

2. Capitalist emergence as a dynamic of accumulation that creates an expanding world economy (Braudelet al.);

3. Anievas and Nısancioglu’s geo-political model where the dynamic of capitalism figures less as ‘many capitals’ than in the transmuted form of ‘many states’; and finally,

4. Beckert’s recent global history of the cotton textile industry.

Here the first two ‘models’ are largely if not purely economic, the third is mainly political, and the last (Beckert’s) is both economic and political.  In 1. the key role devolves on ‘agrarian capitalism’, in 2. on merchant capitalism,[2] in 3. on dialectically conceived interactions between sectors of an evolving world economy (‘uneven and combined development’), and in 4. on the way what Beckert calls ‘war capitalism’ helped pave the way for industrial capitalism in the shape of a leading industrial sector. Moreover, in consonance with 2. but in a more contextualized way, perhaps, Beckert actually demonstrates thelinks between merchant capital and industrial capitalism, the evolution of the latter out of the former, in the one sector usually seen as leading Britain’s industrial expansion.

The least convincing of these models is the first. Ellen Wood’s critique of the so-called ‘commercialization model’ hinges on a notion of large-scale trade that divorces it radically from production, as if big merchants were uninterested in either accessing supply sources or ensuring financial control over producers. Moreover, she seemed to think, astonishingly, that ‘the long-distance trade characteristic of pre-capitalist economies [was not] driven by competition’.[3]  On the issue of whether world economy mattered to capitalism (= England), her response was ‘capitalism indeed in one country, albeit within a network of international trade’,[4] which is a bit like saying, okay, let’s throw in international trade for good measure. Even after the seventeenth century, ‘nowhere, neither in the great trading centers of Europe nor in the vast commercial networks of the Islamic world or Asia, was economic activity…driven by the imperatives of competition and accumulation’.[5]  The world market that fuelled the rise of the West was founded on ‘non-capitalist commerce’.[6]  To Wood, the East India Company epitomised ‘non-capitalist extra-economic exploitation in the form of tax and tribute’,[7] which contrasts sharply with Cain and Hopkins’ altogether more accurate description of the company as an ‘advanced form of commercial capitalism’.[8]  Wood’s is a world without mining, shipbuilding, textiles, domestic industry, putting-out networks, sugar plantations, etc. None of this matters to her because all of it belongs to a world where markets are quintessentially ‘non-capitalist’ (not driven by the imperatives of competition and efficiency) and no true capitalists exist, since true capitalism only starts in the English countryside in some vague interval between the sixteenth and eighteenth centuries. Not only is this an abstraction from substantial swathes of history, but it is an abstraction from the way markets themselves are organized and from the way they ‘work’.

The remnants of formalism

Thus the agenda of a specifically Marxist historiography of capitalism remains misshapen by spurious claims to orthodoxy and intoxicating doses of formalism, teleology and residualism. By ‘residualism’ I mean the tendency, among Marxists especially, to treat major strands in the earlier history of capitalism as a dress rehearsal for industrial capitalism. ‘Multiple’ or ‘coexisting’ modes of production, ‘transition’, ‘primitive accumulation’ and the characterization of merchant capital as ‘antediluvian’ are all signs of this thoroughly conventional but unhelpful framing of capitalist origins and can, alas, all be found in How the West , although they coexist here with a perspective that constantly pulls away from this obsolete problematic. Thus Wallerstein is accused of his ‘inability to theorise the coexistence and interaction of multiple modes of production’ (p. 18) without stating what a ‘mode of production’ is for the authors themselves. ‘Combined development’ is sadly defined at one point as ‘an amalgmation of differentiated modes of production within a social formation’ (p. 30-31), something that Trotsky himself certainly never had in mind!  The Caribbean plantations are said to ‘amalgamate’ different modes of production (p. 162), a characterization that owes more to Robin Blackburn’s ambiguities than to Marx himself, and the Mughal empire of the late seventeenth century is said to have embodied a ‘combination in which two differentiated modes of production coexisted’, which is a first in terms of any of the standard Marxist discussions of medieval India that I’m aware of. The plantations are also described as ‘transitional forms’ (p. 158), when it is not clear precisely what they were transitions to, and at one stage the whole focus of the book is describeden passant as ‘the long transition to capitalism’ (p.29); which capitalism? how long?  Developments in sixteenth-century England are summarily described as ‘English primitive accumulation’, (p. 116ff.) and French development in the seventeenth and eighteenth centuries is likewise described, summarily, as ‘the process of primitive accumulation’ (p. 200). Even Dutch capitalism at its apogee is summed up as a ‘combined form of primitive accumulation’ (p. 243). But Marx’s famous passage on primitive accumulation is intended to underscore the violent nature of capitalist expansion and to suggest, of course, that industrial capitalism as it emerged in Britain was inconceivable, historically, in isolation from the convulsive developments that tore up the globe even as they started integrating it.

 The residualism is residual, the debris of problematics that have become progressively more dilapidated, less and less capable of steering discussion in ways fruitful of history, as the decades elapse.  To look at some of the more substantive historical issues raised byHow the West, the argument that the Mongols ‘proved decisive to the emergence of capitalism’ (p. 88) depends on what ‘emergence of capitalism’ is supposed to mean, that is, on thetime scale used for understanding this complex, multi-stranded process. When Marco Polo’s family set out for the East, Venice wasalready, in Giorgio Cracco’s description, a republic ruled by a strong ‘capitalist oligarchy’, a leading centre of the new capitalisms that had emerged from the commercial revolution of the eleventh and twelfth centuries. If so, the Mongols surely were no more ‘decisive’ to the emergence of capitalism than, say, Islam and the role Islam played in revitalizing the Mediterranean by contributing decisively to the revival of Italian trade thanks to the links established with the rich Muslim markets of the south and the east.  

The Mongol rulers certainly ‘sought to promote trade’ (p. 74), but they did so even more in terms of Qubilai’s aggressive maritime policies and the expanding sea trade,[9] and Marco Polo’s own description of Yuan China leaves one in no doubt that the coastal regions were among the most prosperous in the country. Three features are especially striking in that account: the resilience of Chinese domestic markets, the revenue the Great Khan extracted from commerce, and the vitality of the maritime links to South Asia. For example, he notes that ‘for one spice ship that goes to Alexandria or elsewhere to pick up pepper for export to Christendom, Zaiton [Quanzhou] is visited by a hundred ’.[10]

A&N are good on the nature of the Ottoman state, seeing the tributary mode of production as characterized by the subordination of potentially subversive aristocracies and seeing territorial expansion (‘geopolitical accumulation’) as an intrinsic feature of this mode. It doesn’t follow that rebellions were any less characteristic of tributary regimes – Byzantium, China and the Mughals all prove otherwise.

The argument that European states were more dependent on merchant capital than the tributary regimes raises the fundamental but grossly understudied issue of the relation between forms of Absolutism and capitalist trade. A&N see the Ottomans as largely uninterested in commerce and ‘exercising significant control over merchant activities’ (p. 105). If so,[11] this, again, is not a feature that can be generalized to other tributary states. Both the  Safavids and tsarist Russia were vitally interested in their external commerce. Pokrovsky quotes Collins, court physician to Tsar Alexis, as saying, ‘The tsar is the first merchant in his realm’, and adds ‘Enumeration of the tsar’s monopolies [whisky, caviar, furs, silk, etc.] gives us an interesting picture of the concentration of Russian exports that laid the foundation for native commercial capitalism…’.[12]  In the seventeenth century ‘the tsar’s trade with Persia was undoubtedly the greatest commercial enterprise of Muscovite Russia’, referring of course to the trade in raw silk.[13]  On the Iranian side of this global circuit, Vladimir Minorsky could even describe the Shah as the ‘largest capitalist’.[14]  Once the ‘unruly feudalism of the tribes and local dynasties [had been] replaced by centralisation’, ‘The Shahs [were] now the largest capitalists’. ‘They amass goods in their Buyûtât; they attract and court European merchants; they use their Armenian subjects as their trading agents for disposing of the chief exportable commodity, namely silk’.[15]  These interventions are strongly reminiscent of Portugal’s ‘monarchical capitalism’[16] and of Mousnier’s even more scandalous description of the ‘absolute monarchy’ of the early sixteenth century as ‘a sort of large capitalist enterprise’.[17] Here is a field that badly needs new research and solidly comparativist perspectives.

No one can deny that the Atlantic was decisive to European dominance in the sixteenth to eighteenth centuries, laying out the first foundations of a more integrated global economy tied together in part through its massive flows of silver. Marx noted that the ‘great revolutions that took place in trade in the sixteenth and seventeenth centuries…rapidly advancedthe development of commercial capital’ and saw the colonial companies as ‘powerful levers for the concentration of capital’ (Marx passages cited p. 147) The point of interpreting these passages in newer ways is surely that the building of an Atlantic economy was not just a ‘precondition’ for the growth of capitalism in Europe or Eurasia butembodied the embrace of capital through its own forms of capital accumulation.  Even the slave trade generated the networks of merchant capitalism studied in such detail by Jospeh Miller.[18]  For the plantations that were the markets for that trade the point seems obvious to me. Without doubt the least fortunate pages inHow the West are those dealing with the slave plantations (pp. 158–62). The plantations are characterizedboth as ‘“transitional forms” of social relations combining complex amalgams of captalist andnon-capitalist relations’ (p. 158), as the ‘interlacing and systemic fusion ofdifferent relations of production’ (p. 160),and as productive units ‘geared specifically towards capitalistic (sic) production’ (p. 158) which ‘operat[ed] according to distinctly capitalist rules of reproduction’ (p. 161). Now both characterizations cannot simultaneously be retained, for if these enterprises really were ‘geared specifically towardscapitalist 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.

Here as elsewhere in the book the eclecticism of seeking to accommodate the widest possible range of Marxist writers and perspectives even when these conflict with each other simply ends up contributing to a lack of clarity, if not (see below) to downright mischaracterization. In this instance Robin Blackburn’s own hesitations in The Making of New World Slavery are combined with that strand in the literature, largely U.S.-based,  which sees New World slavery asunambiguously capitalist. As I have written elsewhere:           

In his debate with Frank, Laclau took the stand that ‘in the plantations of the West Indies, the economy was based on a mode of production constituted by slave labour’, characterizing the use of slave labour as a ‘mode of production’ when Marx himself had stated explicitly that a capitalist mode of production ‘exists’ in the slave plantations. That was in 1971. By 1997 when Blackburn published The Making of New World Slavery, the same orthodoxy persisted but now in amuch less confident form. ‘The American slave planter of the seventeenth century and after was not a capitalist — in the strict sense of the term, the species was only just coming into existence — but neither was he as far removed from capitalism as the feudal lord or the Ancient slaveowner.’ (Making, p. 376) Again, ‘the undoubted fact that neither the feudal estates of Eastern Europe nor the slave plantations of the Americas can properly be regarded as capitalist enterprises should not lead us, as it has led some writers, to regard them as equivalently distant from the capitalist mode of production’. (Making, p. 374) The hesitation expressed in these passages stemmed presumably from Blackburn’s deeper historical understanding of the Caribbean plantations. They were ‘run according tobusiness principles which were very advanced for the epoch’; ‘The construction of slave plantations did indeed requirelarge fixed investments’; ‘The performance of the early eighteenth-century sugar plantation embodiedtechnical improvements in nearly every aspect of cultivation and processing’; and finally, ‘thehigh capital value of a Caribbean slave plantation put pressure on the planter to maximize output from a given crew’. (Making, p.379, 336, 343, 339). All of which was a considerable advance over Laclau’s blunt assertion of a ‘mode of production constituted by slave labour’.

The ‘insatiable thirst for slave labour in the Americas (p. 157) was a thirst for surplus-labour, as Grossman points out inThe Law of Accumulation and Breakdown of the Capitalist System.[19]  Through the plantations commercial capitalism fed into themass of surplus-value extracted and available for accumulation.  Curiously, this is a point more clearly stated for Dutch control of the Asian markets (in Chapter 7) than it is for Atlantic slavery. ‘By incorporating labour-power on a global scale, Dutch capital acquired a power of expansion it hitherto did not possess.’ (p. 227) But exactly the same logic worked in the Atlantic, which is why Marx referred to ‘capitalinvested in the colonies’ (cited p. 163; my italics). And this was the point of Eric Williams’ argument ‘The commercial capitalism of the eighteenth century developed the wealth of Europe by means of slavery and monopoly’.[20]  Thus formulations like ‘outlet for capitalists to absorb the surplus population created by the expulsion of peasants from agrarian production’ (p. 150-51) or that plantation slavery ‘provided an array of inputs (sic) that contributed to the Industrial Revolution’ (p. 169) simply fail to describe the essential function of New World slavery in the expansion of capitalism. Those perspectives remain fundamentally teleological, as if either England or industrial capitalism were the forces driving the ‘rise of a new capitalism’[21] fuelled by the Atlantic economy. 

References to ‘merchant capitalism’ and ‘mercantile capitalists’ only emerge at the very end of the Atlantic chapter and then appear with less sense of hesitation in the two chapters that follow. A&N’s uncritical endorsement of Perry Anderson’s view of the absolutist state as a ‘recharged apparatus of feudal domination’ (pp. 186, 256) generates a second, even less tenable argument, namely, the baffling suggestion that the ‘political autonomy, power and influence of merchants’ in medieval Europe flowed from the feudal nature of the state in those societies, and that feudal states were ‘particularly sensitive to merchant interests’ since their innate drive for expansion and the ‘reproduction’ of the ruling class in them depended on ‘the wealth drawn from merchants and financiers’ (p. 256). Here the absolutist state iscollapsed into feudalism à la Anderson (in contrast to the more mature conception represented by Hilferding, Pokrovsky and other Marxists which stresses the autonomy of the state and its alliance with capitalist interests), and the term ‘feudalism’ bandied about with such fluency that Scotland and the mercantile republics of northern Italy are all bastions of this unreformed ‘mode of production’. But if Scotland was still an outpost of some residual feudalism in 1707, why did the Agency Houses that pioneered the commercial expansion of Britain in the eighteenth century consist of so many Scots?[22] And how can anyone sensibly characterize Venice and Genoa as the sites of a ‘feudal ruling class’ and of ‘feudal power’ (p. 218) when the aristocratic cliques (consorterie) that dominated both communes were so deeply immersed in commerce and industry, ran Mediterranean-wide networks of business, and were driven by a passion to defend existing markets and conquer new ones, usually in fierce competition with each other?[23]  ‘State-backed forms of commercial expansion’ (p. 258), the ‘fusion of political and mercantile interests’ typical, say, of the ‘capitalist Dutch Republic’ (p. 257) flowed not from the ostensibly feudal nature of the absolutist state but from an Absolutism wedded to mercantilist notions and to its alliance withcapitalist interests. ‘Capitalism and the state in league’ was how Braudel described this peculiar nexus between state and merchant which became a central feature ofall the European mercantile capitalisms of the twelfth to nineteenth centuries.[24] Thus the quote from Coen that ‘trade cannot be maintained without war, nor war without trade’ (p. 257) reflects something closer to what Beckert calls ‘war capitalism’, not the ‘feudal war-making’ that A&N think was driving the dominance of mercantile interests (misled, it’s worth repeating, by Anderson’s erroneous characterization of Absolutism).

In Chapter 7 A&N provide a succinct description of two key features of the Dutch model of commercial capitalism, its integration of Asian markets as its core business strategy and the drive to enforce tighter control over production in those commercial circuits. The theoretical implication of these pages is that the division between circulation and production is not invariant across levels of abstraction and cannot simply be transposed from ‘theory’ to ‘history’ without ending in the rut of formalism. The quote from de Andrade Arruda that the Dutch ‘went beyond the limits of circulation’ (p. 243) seems to be driving at this but does so in a potentially misleading form. Circulation continued to ‘dominate production’, as Marx said precisely with respect to the VOC, that is, the organization and control of labour were a function of the expansion/accumulation ofmercantile capital. (The fact that merchant capital ‘intervened’ in production didn’t make it industrial capital.)  The point is obvious when, as in the Banda Islands, the VOC extorted surplus-value from plantation-organized slave labour, perhaps less so when textile villages and weavers were subjected to control by rival European companies operating, say, along the east coast of India in the later seventeenth and eighteenth centuries. Here the ‘subsumption’ of labour worked through the advance system, which means that patterns of accumulation were necessarily complex and took the form of (commodity?) chains that were more compressed/distended or less so depending on the way they were organized.[25]

 In any case, A&N are quite right to conclude that ‘colonialism explains the emergence of capitalism’ (p. 244; italics theirs), a position I fully endorse as long as we see that colonialism was a form that the expansion of mercantile capital took, starting in the later middle ages with the north Italian domination of Byzantine and East Mediterranean markets, then extending outwards into the wider expanses of the Atlantic and the Indian Ocean as the scale of accumulation was itself enlarged and new centres of capitalism emerged in northern Europe. The expansion of capital was an intrinsically global process, not least because it was spearheaded by the most liquid and mobile forms of wealth which, strangely, Marxists have been reluctant to deal with and prefer to dismiss as ‘antediluvian’.

 Surveying the argument as a whole, the geopolitics of its dominant perspective injects a valuable dimension into debates about capitalism, both by foregrounding the international basis of capitalism’s history and by showing that no history of capitalism can be written which doesn’t accord a central place to the state itself and to ‘many states’. But, as my remarks above have repeatedly suggested, what is missing in this account is a more coherent picture of the history of capitalism itself, that is, a more decisive break with the teleology implicit in notions like ‘primitive accumulation’ (evoked throughout the text, if only sporadically) and in seeing the major developments of the earlier centuries simply as ‘preconditions’ for some later capitalism, ‘developments toward capitalism’. Their critique of Political Marxism is welcome and trenchant in places, but it simply doesn’t go far enough.

A missing capitalism

This is not the place to write the missing Marxist history of merchant capitalism, but since this looms large in the comments above, some remarks are in order. ‘[S]ome of these statements were simply illiterate (on a number of points). Such an illiterate expression was, for instance, the phrase “merchant capitalism”. Capitalism is a system of production, and merchant capital produces nothing’, wrote Pokrovsky in the Recantation he was forced to publish in the tenth edition of hisBrief History of Russia (1931).[26] Of course, Pokrovsky himself had been a leading exponent of the view that ‘commercial capitalism’ had been a major strand of Russia’s economic and political history, arguing in fact that capitalism had become dominant in Russia by the sixteenth century. As Barber notes, as late as 1929 Pokrovsky believed ‘commercial capitalism played a huge role in the creation of the Russian monarchy. It created this Russian absolute monarchy…’.[27]  That this was not a completely novel idea is shown by the early pages of Mehring’sAbsolutism and Revolution in Germany. ‘With merchant capital, the revolutionary force of the fourteenth, fifteenth and sixteenth centuries’, Mehring wrote, ‘new life came into medieval society…’. ‘Revolutionary merchant capitalnot only created modern absolutism but also transformed the medieval classes of society’. And Mehring referred to these centuries as the ‘age of merchant capital’.[28] But the Stalinist backlash against Pokrovsky[29] led British Marxist historians to drive ‘merchant capitalism’ out of the ‘Marxist’ mainstream in Britain itself and then throughout the Anglophone countries, leaving a legacy of timidity in the face of spurious orthodoxy (Anderson would refer to ‘mercantile capital’ but not ‘mercantile capitalism’) and further spurious assertions of orthodoxy (as with Brenner’s completely false antithesis between production and exchange and his Aunt Sally of ‘circulationism’).[30]  ‘The notion of “merchant capitalism” as a specific mode of production…reduces to an absurdity’.[31] Again, in the same childish vein, ‘[I]f “Merchant Capitalism” is intended merely as a descriptive term for that first and early stage of capitalism prior to the Industrial Revolution and to the arrival of machinofacture – then one need not quarrel simply about a word. But if the use of the term is intended to imply…the existence of a distinctive, and in some sense intermediate, system of production and of social relations of production (subsequent to feudalism butprior to the arrival on the scene of capitalism proper), then I suggest that this kind of classification is mistaken and misleading’.[32]

In France, by contrast, a rich tradition of historiography emerged from the 1940s that made ‘merchant capitalism’ central to its understanding of that ‘first and early stage of capitalism’ but stripped of any stagist connotations such as the passage from Dobb implies, and the revival of interest in the subject from the 1980s, both in the Anglophone countries and elsewhere, was entirely due to the influence of this tradition. Kriedte, Peasants, Landlords and Merchant Capitalists (German orig. 1980), Ormrod,English Grain Exports and Agrarian Capitalism (1985), Ingham,Capitalism Divided? (1984), Shenton,The Development of Capitalism in Northern Nigeria (1986), and Miller,Way of Death: Merchant Capitalism and the Angolan Slave Trade (1988), were all major contributions from the 1980s and dealt centrally with a non-standard form of capitalism, much as many-valued logic challenged ‘classical’ orthodoxies about two-valued logic.[33] The analogy is less far-fetched than it seems, since the production/circulation binary was a key line of defence of ‘orthodoxy’ against the heresy of ‘circulationism’. To cite just one example, Ellen Wood discounts merchant capitalism completely on the prejudice that only industrial capital is productive of value (cf. Pokrovsky in his Recantation!). But what about the ‘capital invested in the colonies’, as Marx called it? Was that not productive of surplus-value? How would it feed into the mass of profit otherwise? And if so, would we have to call it ‘industrial’ or argue instead that ‘productive’ capital is instantiated in more complex (non-standard) ways than Wood implies? In fact, the division between circulation and production is based on a misunderstanding of Marx’s method, since Marx wouldn’t have wanted to deny that merchant capital, especially advanced forms of it like the VOC and the East India Company, might ‘dominate production’, that is,enforce the production of, and extract, surplus-value, even when it lacked any specific interest in reorganizing production or altering the labour process in any way.

As it happens, merchant capital created new forms of production both in the Mediterranean and the Atlantic, so that Drescher was quite right to state that for Eric Williams Atlantic slavery was a ‘phase of commercial capitalism’, not some autonomous or transitional mode of production or an aberration thrown up by God’s design for a future industrial capital.[34]   Indeed, since sugar was the most heavily capitalized of the plantation businesses,[35] it would make sense to see the Caribbean plantations as industrial enterprises but dominated by the commercial capitalism of the seventeenth and eighteenth centuries. This was a capitalism that invested widely in a range of economic sectors beyond commerce in its narrower definition. ‘It was commerce that gave birth to industry’, Verlinden wrote about the textile and sugar industries of Antwerp.[36] At Genoa, industries were ‘dominated by the merchants of the city’. Heers calls this ‘industrial capitalism’, knowing full well that the capitalists who controlled these industries were merchants.[37] In Amsterdam, ‘much of the initiative and presumably much of the capital [for industrial development] was supplied by merchants’, says Barbour.[38] And London merchants ‘invested in provincial manufacturing on a large scale’.[39]    

Yet even when the subordination of labour took less direct forms, merchant capital ‘dominated’ production, that is, extracted surplus-value from living labour, for example, in the vast putting-out networks that sprawled across the European countryside as part of a dispersed and unmechanized manufacturing industry turning out what Goubert for the Beauvaisis calls ‘enormous’ quantities of textiles. Here ‘powerful merchants’ dominated labour drawn from households with minuscule holdings, yet sustained a thriving woollen industry with markets extending across the Atlantic.[40] Indeed, despite the dreadful conditions that defined the lives of millions of outworkers, theVerlaggsystem, Braudel argued, led to the ‘concentration and expansion of industry, a more rational division of labour, and increased production’.[41] But it thrived essentially on the flexibility it allowed capital and on the low wages endemic to the system. A passage in theGrundrisse describes this economic regime of rural manufacture dominated by merchant capital and integrated into ‘large-scale commerce’ as a major part of the story of the evolution of capitalism, and Marx clearly implies that the weavers and spinners subject to the merchant’s control have been ‘brought under his commandas wage labourers’.[42] Here putting-out merchants were exploiting a mass of artisans/household workers as wage labourers, hence creating wage labour, as the European companies tried to do with weavers in the Indian textile villages from which they sourced substantial quantities of piecegoods in the eighteenth century.[43]  Between them, the large-scale capitalism of long-distance trade and theVerlag system absorbed vast amounts of capital in the fourteenth to eighteenth centuries, much of this tied up in Beckert’s ‘empire of cotton’ which, more than any other industry, welded these forms of merchant capitalism into a unified and increasingly integrated economic system.

Beckert’s history of the cotton textile industry is, like the work of Anievas and Nısancioglu, an attempt to write the history of capitalism as a global story. This sets it apart from tons of literature that frames the issue of ‘origins’ purely in terms of transition and finds it impossible to think about capitalism without the sombre European legacy of its feudal past. Unlike Anievas and Nısancioglu, however, Beckert repeatedly underscores the decisive role of merchant capital in ‘creating modern capitalism’,[44] thus breaking down the artificial division between merchant and industrial capitalism and allowing for a more coherent history of capital. Merchant capitalists figure throughout the narrative in a major way, and thefluidity of their form of capitalism is extensively documented as a series of conventional antinomies (mechanized vs unmechanized industry, etc.) simply falls away as so many moments of a totalizing dialectic.[45] Beckert writes the history of capitalism as a ‘biography of one product’, showing the possibilities contained here.[46] Moreover, in one crucial respect there is an important overlap between the two studies, viz. both highlight the crucial role of the state in securing the victory of British and European capital over the rest of the world through ‘the military subjugation of competitors and a coercive European mercantile presence in many regions of the world’.[47]  The violence summed up in Marx’s notion of ‘primitive accumulation’ is unpacked and retotalized as ‘war capitalism’ (by Beckert) – ‘the violent expropriation of land and labor in Africa and the Americas’[48] and the practico-inerts,congealed violence, of slavery and colonialism. But as Beckert’s expression implies, violence was an instrumentality ofcapital more than a medieval inheritance. This is true even of the later middle ages. Although Portugal’s eventual expansion as a colonial power was scarcely the outcome of a preconceived plan, its successful emergence reflected the defeat of the ‘Castilian’ model favoured by the Portuguese nobility. (The maritime bourgeoisie supported the Crown in its struggle with this aristocracy.)[49] In other words, let alone the Dutch with their purely commercial outlook, even Portugal’s maritime expansion reflected a culture of violence more peculiar to the way the Venetians and other Italian merchants had behaved throughout the Mediterranean into the Byzantine Black Sea as they struggled to create their trading empires, especially from the twelfth century, than to the ‘war-prone’ nature of some quintessentially feudal continent. The violent nature of European commercial capitalism has unmistakeably Mediterranean roots that almost certainly predate the emergence of feudalism in Europe, and to this extent a form of ‘war capitalism’may well be the best way of characterizing even Rome’s expansion and domination, secured initially through massive naval confrontations broadly reminiscent of the First World War.[50]

Reinstating merchant capitalism (that is, going back almost a century to the fluency with which Pokrovsky could write his Marxist history of Russia!) brings two benefits. It gives the history of western capitalism more coherence than it has currently, and secondly, it suggests that a form of capitalism was more widespread across cultures than the standard (two-valued, Eurocentric) account implies. Both perspectives chime well with the broad thrust of How the West in rejecting narratives of European exceptionalism on the one side, and isolationist or endogenist models of capitalist emergence, on the other. And between them they begin to allow us to write a history of the integration of world economy. The ‘large-scale capitalism’ of foreign trade both generated industries domestically (shipbuilding, transport, sugar, etc.) and plugged into whole sectors of the international economy such as textiles, plantation businesses, and industrial crops (jute, cotton, palm oil, tobacco, raw silk, indigo and so on). At these higher echelons of the ‘mercantile system’, profitability was crucially linked to economies of scale, vertical integration and the turnover of capital. For example, Lyashchenko described even banks and railways as ‘instruments ofcapitalist trade turnover’ and allowed for rapid turnover by purely capitalist commercial methods.[51]  A good example is the way the big Glasgow tobacco firms of the eighteenth century used the ‘store system’ to buy up American tobacco in advance to save on freight costs and turn over capital quickly ‘by selling tobacco rapidly in bulk to European customers’.[52]  This was a trade controlled by a small group of wealthy merchants organized into a handful of syndicates,[53] with the ‘vast proportion of company earnings […] ploughed back’,[54]  that is, accumulated as an expanded mass of mercantile capital. With foreign trading companies advances were ‘an essential means of maximizing their purchases of export produce’.[55]  Price domination, scale, and the velocity of circulation of merchant capital were thus equally important determinants of profitability, favouring the bigger capitals and showing why the commercial capitalism of the nineteenth century (‘colonial commercial capital’ in Suret-Canale’s expression) was largely run by oligopolies.[56] By then, the distinction between ‘industry’ and ‘commerce’ was even more tenuous in colonial territories like India, as ‘the Calcutta agency houses floated numerous jute, tea, and coal companies on the British and local capital markets…From the 1870s the involvement of the agency houses in manufacturing intensified’.[57]  The peculiar fusion of merchant and industrial capital reflected in the managing agency system meant that British merchant houses developed extensive interests in industries like jute, tea, coal and engineering, and elsewhere, outside India, in the rubber companies floated in London that started up estates in Malaya and the Netherlands East Indies. Here was a mercantile capitalism that spawned industries in a whole region of India even as it retained its essential character as merchant capital.

Indeed, long before the full blast of the ‘Industrial Revolution’, shipbuilding, mining, textiles, the silk industry,[58] Chinese porcelain,[59] and sugar refineries[60] were leading sectors of mercantile capitalism, to say nothing of finance, shipping, slaving, insurance, and the plantation trades. A ‘totalizing’ history that rejects the teleology of a capitalism waiting to happen (‘primitive accumulation’ in the bad sense) would have to look at the issue of investments and industrial organization for each of these leading sectors. It would also have to try and map the changing geographies of commercial capitalism, starting, say, with the Muslim Mediterranean and Near East and the networks they extended into the Indian Ocean. A combination of these perspectives (sectors, geographies) coupled, perhaps, with more ‘biographies’ like Beckert’s for cotton or Tully’s for rubber,[61] would offer a sound basis for tracking the evolution of ‘capital’ before ‘capitalism’, if, after all, one insists on retaining precisely these terms.

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,[62] or the capitalists of Fars in southern Iran whom the geographer al-Istakhri described in the tenth century as ‘passionate’ about ‘accumulating capital’,[63] or the ‘large capitalists’ who drained the salt marshes east of Basra using slaves imported from East Africa,[64] or the ‘northern Kiangsu industrialists’ who invested in a booming iron industry employing thousands of wage labourers,[65] 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’,[66] or the Corner brothers of Venice who built substantial sugar interests in Cyprus on plantations that imported large copper boilers from Italy,[67]to the Dutch Calvinist merchants who emerged from the great Flemish dispersion of the seventeenth century to become the ‘economicélite of Europe’ and ‘the heirs of medieval capitalism’;[68] 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;[69] 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;[70] or, finally, big international merchants of our own period, like UAC, CFAO, and Metallgesellschaft. All or most of these groups epitomised distinctive regimes of mercantile capitalism peculiar to the historical circumstances of their societies and time. The Roman fine ware industry was organized on a capitalist basis,[71] but it doesn’t follow that Rome’s economy was driven by capitalism in the sense in which one would normally understand this. The same could be said of the place of capitalism in the Islamic world[72] and, probably, in China.[73] However, enough has been said to show that there is a huge ‘scientific research programme’ awaiting the dedication of Marxist historians willing to think in new ways. 

Final remarks on the problematic of origins

Marx identified the capitalist mode of production with the self-expansion of industrial capital and seemed to suggest that the manufacturing period was one of an emerging industrial capitalism. He ascribed major importance to commercial capital (he refers, for example, to the ‘overwhelming influence’ it exercised ‘in the period of the rise of modern production’)[74] but nowhere integrated it into a coherent view of thelong-term history of capitalism itself. Not only does the ‘development of commercial capital’ thus remain distinct from the capitalist mode of production, but (unlike Engels) he makes no attempt to ask if a history of capitalism might not allow for the possibility that the growth of industry was bound up, initially, precisely with commercial capital. The underlying assumption always was that the subordination of production to capital was simply tantamount to industrial capitalism. On this assumption, the whole late medieval/early modern period would for Marx have involved the rise of industrial capital and therefore of the capitalist mode of production.

 Yet Marx himself described mercantilism as the ‘first scientific theoretical treatment of the modern mode of production’.[75] With the Mercantile System, he writes elsewhere, ‘it is no longer the transformation of commodity value into money that is decisive but instead theproduction of surplus-value’.[76] And in another passage, this time from theGrundrisse, 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’.[77]

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’.[78]  Merchant capitalists extended control overproduction in multiple ways. But they also dominated a host ofmajor economic sectors such as foreign banking, 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 issynonymous with the non-subjection of production to capital…’,[79] an assertion which ignores Marx’s own remarks about the role of merchants in the luxury industries.  

If the capitalist mode of production is broadly defined as an era characterised by the increasing subordination of production to capital, we can frame the problem of origins by asking when and where production began to subordinated to capital, and asking questions about the kind of capitals involved in those developments. Against the dichotomy between ‘capital’ and ‘capitalism’ favoured by A&N, we can then argue that the triumph of capitalismas a mode of production hingedas much on the early, commercial forms of capitalism as it did on the eventual triumph of an industrial capitalism emancipated from its mercantile past.

[1] Hobson 2004, Darwin 2008, Mielants 2008, etc. redress the balance in interesting ways.

[2] Braudel 1969 p. 53–4, where he refers tocapitalisme marchand as an ‘economic system’ that ‘survived more or less intact from the fourteenth to the eighteenth centuries’.

[3] Wood 1999, pp. 20–21.

[4] Wood 1999, p. 40.

[5] Wood 1999, pp. 71–2; my italics.

[6] Wood 1999, p. 72.

[7]  Wood,Empire of Capital, cited Anievas and Nısancioglu, p. 28.

[8] Cain and Hopkins 2002, p. 88. As to how we should define merchant/commercial capitalism, Frédéric Mauro offered broadly similar definitions throughout the sixties, e.g., ‘in a system of pure commercial capitalism, the control and the profits of production should both be in the hands of a merchant class distinct from the workers’ (Mauro 1961, p. 2).

[9] Sen 2006, pp. 427ff., ‘aggressive maritime policy’.

[10] Marco Polo 1958, p. 237.

[11] Contrast Darwin 2008, p. 76: ‘Nor were Ottoman rulers indifferent to commercial objectives. Their naval expansion into the Red Sea and the Persian Gulf, and their effort to assert sea power in the Indian Ocean, may have been intended to profit from the networks of trade just as much as the maritime enterprise of Portugal, Spain and later Holland’.

[12] Pokrovsky 1931, pp. 264–5.

[13] Pokrovsky 1931, p. 269.

[14] Minorsky 1943, p. 19.

[15] Minorsky 1943, p. 14.

[16] Dias 1963.

[17] Mousnier 1967, p. 98: ‘une sorte de grande entreprise capitaliste’.

[18] Miller 1988; cf. Vail and White 1980, p. 2: ‘mercantile capitalism’s most avaricious and rapacious agents, the slave traders’.

[19] Grossmann 1970, pp. 396–415.

[20] Williams 1994, p. 210.

[21] Braudel 1975, vol. 1, p. 510.

[22] Greenberg 1951.

[23] Giorgio Cracco in his classic study described Venice as a ‘state of big capitalists’ (Cracco 1967 p. 202). 

[24] Braudel 2002, vol. 2, pp. 443–4. The power balance between state and capital was never static, of course, cf. Tawney: ‘Before the [English] Civil War, “mercantilism”, if that word is to be employed, is a policy imposed by the executive on the business world; after, it is a policy imposed by the business world on the executive’ (Tawney,Lectures on Economic History 1485–1800, cited Ormrod 2003, p. 46).

[25] I have dealt with this ‘structure of capitalist accumulation’, as I call it, in Banaji 2016.

[26] Pokrovsky 1933, vol. 1, p. 282.

[27] Barber 1981, p. 61.

[28] Mehring 1975, pp. 1, 3, 7.

[29] See Barber 1981, also noting that Lenin greatly admired Pokrovsky’s work.

[30] See Ormrod 1984, p. 147.

[31] Fox-Genovese and Genovese 1983, p. 7.

[32] Dobb 1967, p. 15.

[33] Rescher 1969.

[34] Drescher 1977, p. 5: ‘…Williams’ sweeping thesis, that slavery was a phase of commercial capitalism which aroused opposition only when it had ceased to perform its function’.

[35] Pares 1960, p. 24.

[36] Verlinden 1966, p. 140.

[37] Heers 1961, p. 251.

[38] Barbour 1950, p. 67.

[39] Ormrod 2003, p. 16.

[40] Goubert 1960, pp. 131ff.

[41] Braudel 1975, vol. 1, p. 432. Cf. Lefebvre 2005, p. 42: ‘…millions of peasants worked for city merchants’.

[42] Marx 1973, pp. 510–11. See de Roover 1968. It is curious that a Belgian banker could discuss the extent to which ‘the Florentine woollen industry was capitalistic in character’, while latter-day Marxists repeat platitudes like ‘The main vocation of the large merchant was circulation rather than production’ (Wood 1999 p. 73, about the same industry). 

[43] Hossain 1988.

[44] Beckert 2014, p. 205.

[45] Beckert 2014, pp. 140ff., esp. ‘Eventually…merchants nearly everywhere would concentrate production in factories (p. 145).

[46] Beckert 2014, p. xxii.

[47] Beckert 2014, p. 37.

[48] Beckert 2014, p. xv.

[49] Thomaz 1989.

[50] This refers of course to the so-called Punic Wars of the mid-third century, see Abulafia 2014, pp. 178ff. and the comparison at p. 177.

[51] Lyashchenko 1998, p. 63.

[52] Devine 1975, p. 58.

[53] Devine 1975, pp. 72ff.

[54] Devine 1975, p. 92.

[55] Fieldhouse 1994, p. 121.

[56] The classic example is the domination of West Africa’s trade by four large firms, cf. Fieldhouse 1994, who also shows that it took the mostadvanced forms of merchant capital to think of consolidating in the face of overcapacity; by 1929, 93 separate companies had been brought into UAC!

[57] Jones 2000, p. 289.

[58] Poni 1976; Molà 2000; Tognetti 2002.  The Byzantine ‘Book of the Eparch’ refers to both silk merchants (metaxopratai) and silk manufacturers (serikarioi) employing wage labour.

[59] Xu and Wu 2000, pp. 308–26.

[60] Mauro 1960, p. 231; Furtado 1968, p. 9; Braudel 1975, vol. 1, pp. 154–5, ‘protected by a powerful capitalism’. Note Brenner’s reference to ‘West Indian sugar capitalism’, meaning the role of the English “new merchants” in developing the sugar economy there, Brenner 1993, pp. 159ff.

[61] Tully 2011.

[62] Cicero,Pro lege Manilia, 7.17–18.

[63] Al-Istakhri 1870, p. 138.

[64] Lewis 1966, pp. 103–4.

[65] Hartwell 1966, esp. p. 48: ‘The decisive factor was the existence of substantial capital in the hands of individuals and groups willing to invest it in mining and manufacturing…’.

[66] Lo 1970.

[67] Verlinden 1966, p. 168, who says ‘Les Cornaro exploitaient leurs plantations de manière capitaliste’.

[68] Trevor-Roper 1967.

[69]  Zahedieh 2010, p. 64.

[70] Firro 1990.

[71] Picon 2008.

[72] Rodinson 1966.

[73] Xu and Wu 2000.

74 Marx 1981, p. 455.

75 Marx 1981, p. 455. In editing Marx’s notes, Engels apparently removed the word ‘wissenschaftlich’ from Marx’s sentence.

76 Marx 1981, pp. 920–21.

77 Marx 1973, pp. 327–8.

78 Molà 2000, p. 237.

79 Marx 1981, p. 445.

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HM London 2016 Conference: Panel on Michael Roberts's The Long Depression

Michael Roberts is a private researcher who has worked as an economist in the City of London for over 30 years. He is the author of The Great Recession - a Marxist View (2009, Lulu Press) and The Long Depression(2016, Haymarket Publications). He has presented papers to the American Economics Association annual conferences, Historical Materialism conferences and to those of International Initiative for the Promotion of Political Economy (IIPPE) and the Association of Heterodox Economists (AHE). He writes a blog on Marxist economics at thenextrecession.wordpress.com.

At the 13^th annual HM Conference in Londonhm-13-16, I am participating in a session where I shall present the key ideas in my new book,The Long Depression. You can get a gist of those themes froma previous post.  Also participating are Jim Kincaid, Al Campbell and Erdogan Bakir who will offer some short comments on my book and its conclusions.

For some time, Jim has wanted to present a critique of my empirical work on Marx’s law of the tendency of the rate of profit and my thesis that Marx’s law can be seen as the underlying cause of crises in modern capitalism and, in particular, of the Great Recession of 2008-9.  “I have been able to assess more closely a dimension of Michael’s work which I believe is open to question.  A central theme in much of his analysis is that it is a declining rate of profit which is the underlying cause of the sequence of crisis which has afflicted the major industrial economies since the late 1990s.”

Al Campbell will deliver his comments at the session, but before the session, Jim has posted on his own (very interesting) blog, an opening critique of my empirical work along with an alternative approach to the current crisis.

His alternative explanation runs along these lines (as in his post):“That the mass of profit has been relatively high in the last 10 years gives some support to the broader argument I have been developing that in this period the system has been contending, not with falling rates of realised profit, but rather with an excess of profit relative to the levels of investment which have been lagging.”

And thus Jim argues against my view that: “the crucial underlying cause of the crises of the post-2000 period is that the rate of profit peaked in 1997 and has not recovered since.  Behind this is a logically questionable assumption, that if crises are recurrent (even though different in form) there must be a single and common cause.”

Jim goes on: “as Michael’s own empirical work makes evident, there has not been, over the past 20 years, a simple linear fall in the US rate of profit.  Rather what we see are cyclical patterns of oscillation.  Falling rate of profit tendencies are battling it out against counter-tendencies, with complex results which have to be explained dialectically and not by looking for a single unilinear cause.”

You can read Jim’s full critique, which is just an opening shot, on his blog.  But the essence of my reply follows below.  I apologise for the length of this post in advance, but both Jim and I thought it would be useful to post our opening thoughts before the HM session so others could consider the arguments.

Jim is very kind in praising much of my efforts on my blog and in the book to develop Marxist economic theory with empirical evidence. But I’ll concentrate on dealing with Jim’s critique of my work on the post-war profitability of capital in the US, its relation to Marx’s law of the tendency of the rate of profit to fall and the causes of crises under capitalism, particularly the cause of the Great Recession of 2008-9.

Jim first says that “I do not think that Roberts’ data about US profit rates actually support some of the conclusions he draws about trends over the past 20 years”. He hints that, when I say there has been a secular decline in the US rate of profit in the post-war period, I might be misleading readers into thinking that this has been“a continuous fall”, when instead there have been “two periods of recovery” with the rise after 2000 being“the most significant”.  Well, I have to plead not guilty here. Nowhere, I have stated or implied in any of my papers or work that there was a ‘continuous fall’ in the US ROP.  On the contrary, I have made much of the recovery in profitability since the early 1980s as revealing the impact of the counteracting factors that Marx outlined in his law of profitability.  So this is a straw man on Jim’s part to knock down.

There has been a secular fall and, as Jim says, “this is clearly correct”. But as Jim says, “Michael Roberts’ own empirical work makes evident, there has not been, over the past 20 years, a simple linear fall in the US rate of profit.  Rather what we see are cyclical patterns of oscillation.  Falling rate of profit tendencies are battling it out against counter-tendencies”.

Another red herring, in my view, is Jim’s claim that I reckon changes in the organic composition of capital cause changes in the short-term business cycle.  As Jim says, “Marx himself saw the organic composition of capital as changing over longer periods of time, not as the cause of short-run movements in the business cycle.”  I agree.  And I don’t think that I have argued that it explains ‘short-term’ movements.  But it is essential to explaining why the rate of profit will fall over time, namely because of a rise in the organic composition of capital, unless counteracting factors (like a faster rise in the rate of surplus value) dominate.  Indeed, this explains the movement in the US rate of profit in the post-war period.

The organic composition of capital rises secularly but with a fall from the mid-1960s to the end of the 1970s.  It rises in the neo-liberal period from the early 1980s, but the rate of exploitation rises faster.  In the 2000s, the rise in the organic composition accelerates to match the rise in the rate of surplus value and so the rate of profit stops rising.

More specifically, Jim reckons that I cannot draw the conclusions from my own data that: 1) that the US rate of profit peaked in 1997 and has been static or falling since then: 2) the US rate of profit started to fall again from 2010 or 2012 (depending on the measure used): and 3) the fall in the rate of profit has now given way to a fall in the mass of profits.  Instead Jim reckons that my data show no such fall after 1997 and indeed the rate was higher in 2007 and “profitability fell in 2008 and after as a result of the financial crisis rather than as its cause”.

Well, two things here.  Jim uses the Kliman measure of the rate of profit in his Figure 2.  That does show a rise in the rate of profit from a low in 2001 to a high in 2006 that is higher than in 1997.  But there is a clear fall from 2006, a good two years before the Great Recession began in 2008.  So, even on these data, the rate of profit did not fall “after” the financial crisis but before.

Annual figures for the rate of profit are not very helpful on the timing here.  In my original work that Jim is quoting from, I also used the quarterly figures provided by the US Federal Reserve Bank.  The Fed data can give us the non-financial corporate sector rate of profit by the quarter.  According to that data, the US NFC rate of profit started falling in Q3-2006.  Indeed, by the time of the credit crunch in mid-2007 (before the start of the Great Recession, the NFC ROP had fallen 20%). Interestingly, the Fed data also show that the NFC rate of profit at that time was well below the peak reached in 1997 (10% lower).  It is currently more than 10% below 2006.

Jim says my data show a fall in the US ROP only in 2015, so my claim of a fall earlier is incorrect.  Well, as Jim says, on the annual measures, the peak in ROP since the end of the Great Recession was in 2014, not 2012, although the difference here is tiny.  And in 2015, the ROP fell.  But if we look at the Fed’s quarterly data, we find that the peak was as early as Q3 2010 and is now some 20% below that peak.

Now Jim says that I argue that a fall in the rate of profit is “normally followed by a rise in the mass of profit which is only a temporary phase”.  He then measures the mass of profit against gross domestic income (his Figure 3) which shows that the mass of profit has risen ‘permanently’ up to 2015.  Well, I don’t think Jim has properly presented what I do say.  What I argue,a la Marx, is that a fall in the rate of profit will eventually affect the mass of profit and lead to its fall – and this is usually a key indicator of a subsequent fall in business investment and a slump in capitalist production. Indeed, this is the cyclical process of a recession.

We can see the process leading up to the Great Recession in this graph of US business profits, investment and GDP.

The point that I am making is that the mass of profit will only start falling after the rate of profit has begun to decline.  If the US rate of profit started falling, say in 2012, or at least stopped rising, then we can expect the mass of profit to do so later.  Indeed, as Jim shows with his profit margin figure (profits as share of GDI), that happened in 2015. This suggests that a fall in US business investment will follow and eventually bring a new slump in GDP.  Indeed, US business investment has been falling for five quarters.

We can get quarterly figures for profit margins in the non-financial corporate sector (profits as a share of real gross value added) from the BEA NIPA.  This is what they show in the figure below.

Again, the mass of profit in non-financial corporations began to fall well before the credit crunch of 2007 and the Great Recession of 2008-9.  Then it recovered hugely before peaking in fall 2014 (earlier than 2015 on the annual data provided by Jim).  Profit margins are now back to 2006 levels.

Now, as Jim makes clear, the purpose of his critique of my data and conclusions on the US rate of profit is to “support to the broader argument I have been developing that in this period the system has been contending, not with falling rates of realised profit, but rather with an excess of profit relative to the levels of investment which have been lagging”.

As Jim says, he has been developing this view of the cause of the Great Recession for a while.  I think he presented it back in 2014 at HM.  In an abstract then, Jim said that “(1) empirically, the thesis of falling rates of profit in the major economies is based on an uncritical use of not always reliable government data; (2) Harvey and other sceptics are correct to stress that central to the present crisis is the inability of the global system to absorb large quantities of surplus money capital derived from high rates of surplus-value extraction (profits included)”.

Jim argues that it was not, as I argue, a falling rate of profit, or too little profit that caused the Great Recession and subsequent weak recovery, buttoo much.  Capitalist firms have built up huge cash reserves from profits that they are not investing productively.  So the problem is one of how to ‘absorb’ these surpluses, not how to get enough profit.  This also shows, according to Jim, that the causal sequence for crises, is not, as I argue (as above), falling profits leading to falling investment to falling income and employment because we have rising profits and falling investment.

Jim says, that “The operation of these forces has generated a global surplus of capital in the money form which is too large to be recycledback into productive investment.  Thus what we have is, not a crisis of Keynesian lack of consumer demand, nor a Monthly Review crisis of monopoly profits.  But, instead, a crisis of a particular sort of disproportionality – between available accumulations of money capital and the capacity of the system to absorb them.”

Well, I have to say, despite Jim’s denials, his thesis sounds pretty close to that of Paul Sweezy and Paul Baran of the Monthly Review ‘school’that monopoly capitalism has sunk into stagnation because it cannot dispense with ever-increasing surpluses of profit.

But let us consider this argument.  The idea of a global savings glut has become popular among mainstream economics, both monetarist like Ben Bernanke, the former US Fed chief and Keynesian like Martin Wolf, the FT journalist.  Both Wolf and Jim (on his blog) have presented evidence of this corporate savings gap.

This gap, technically called ‘net lending’ by corporations, Wolf describes as a global ‘savings glut’.  The notion of a “savings glut” was first mooted by former Federal Reserve chief, Ben Bernanke, back in 2005.  He argued that economies like China, Japan and the oil producers had built up big surpluses on their trade accounts and these ‘excess savings’ flooded into the US to buy US government bonds, so keeping interest rates low.

Martin Wolf and other Keynesians have liked this notion because it suggests that what is wrong with the world economy is that there is too much saving going on, causing a ‘lack of demand’.  This is the proposition that Wolf recently pushed in his latest book.  In his book, Wolf concludes that the cause of the Great Recession“was a savings glut (or rather investment dearth); global imbalances; rising inequality and correspondingly weak growth of consumption; low real interest rates on safe assets; a search for yield; and fabrication of notionally safe, but relatively high-yielding, financial assets.”

But is the gap between corporate savings and investment caused by a ‘glut of savings’?  Well, look at the graph provided by Wolf, taken from the OECD.

With the exception of Japan, since 1998, corporate savings to GDP have been broadly flat.   And for Japan, the ratio has been flat since 2004.  So the gap between savings and investment cannot have been caused by rising savings.  The second graph shows what has happened.

We can see that there has been a fall in the investment to GDP ratio in the major economies, with the exception of Japan, where it has been broadly flat.  So the conclusion is clear: there has NOT been a global corporate savings (or profits) ‘glut’ but a dearth of investment.  There is not too much profit, but too little investment.

But what about the issue of cash mountains in major non-financial companies?    It is true that cash reserves in US companies have reached record levels, at just under $2trn – see graph below.  (All figures come from the US Federal Reserve’s flow of funds data.)  The rise in cash looks dramatic.  But also note that this cash story did not really start until the mid-1990s. In the glorious days of the 1950s and 1960s when profitability was much higher, there was no cash build-up.

But the graph is misleading.  It is just measuring  liquid assets (cash and those assets that can be quickly converted into cash).  Companies were also expanding all their financial assets (stocks, bonds, insurance etc).  When we compare the ratio of liquid assets tototal financial assets, we see a different story.

US companies reduced their liquidity ratios in the Golden Age of the 1950s and 1960 to invest more.  That stopped in the neoliberal period but there was still no big rise in cash reserves compared to other financial holdings.  And that includes the apparent recent burst in cash.  The ratio of liquid assets to total financial assets is about the same as it was in the early 1980s.  That tells us that corporate profits may have been diverted from real investment into financial assets, but not particularly into cash.

Comparing corporate cash holdings to investment in the real economy, we find that there has been a rise in the ratio of cash to investment.  But that ratio is still below where it was at the beginning of the 1950s.

And remember within these aggregate averages lies the reality that just a few mega companies hold most of the cash while thousands of small and medium enterprises (SMEs) hold little cash and much more debt.  Indeed, a minority are really ‘zombie’ firms just raising enough profit to service their debt.

Why does that cash to investment ratio rise after the 1980s?  Well, it isnot because of a fast rise in cash holdings but becausethe growth of investment in the real economy slowed in the neoliberal period.  The average growth in cash reserves from the 1980s to now has been 7.8% a year, which is actually slower than the growth rate ofall financial assets at 8.6% a year.  But business investment has increased at only 5.3% a year in the same period, so the ratio of cash to investment has risen.

Interestingly, if we compare the growth rates since the start of the Great Recession in 2008, we find that corporate cash has risen at a much slower pace (because there ain’t so much cash around!) at 3.9% yoy.  That’s slightly faster than the rise in total financial assets at 3.3% yoy.  But investment has risen at just 1.5% a year.  So consequently, the ratio of investment to cash has slumped from an average of two-thirds since the 1980s to just 40% now.

So companies are not really ‘awash with cash’ any more than they were 30 years ago.  What has happened is that US corporations have used more and more of their profits to invest in financial assets rather than in productive investment.  Their cash ratios are pretty much unchanged, suggesting that there is not a ‘wall of money’ out there waiting to be invested in the real economy.

This brings me back to the point I left earlier when I showed that the profitability of non-financial corporations did fall after 1997 and remains well below.  What that tells me is that after 2000 the corporate profitability measure (Kliman) or the ‘whole economy’ measure (Roberts) express the rise in the profitability of the finance and other unproductive sectors of the US economy, while the productive sector ROP continued to fall.  In other words, much of the rise in profitability and profits after 2000 was fictitious.  Can I justify that conclusion?

Well, work by Peter Jones in Australia has done just that. Peter Jones argues that “fictitious profits can also hide the consequences of a falling rate of profit for a time. Government borrowing can ‘artificially’ inflate the after-tax rate of profit on production (and the same effect applies to after-tax rates of profit from secondary exploitation); and fictitious profits can ‘artificially’ inflate investors’ wealth and rates of return.”

Jones[i] adjusted the official US figures for profit for fictitious profits, namely those made by banks from lending to government (bond purchases) and from utilising the savings of workers (mortgages etc) to come up with a measure of profit that best represents surplus value created in production and realised by the productive corporate sector. When he puts this against net fixed assets, the result looks like this.

So the post-2000 divergence between corporate profits and capex disappears and can be explained by a rise in investment in financial assets or what Marx called ‘fictitious capital’.

Yes, large firms in the capitalist sector of the major economies have been hoarding more cash rather than investing over the last 20 years or so.  But they are not investing so much because profitability is perceived as being too low to justify investment in riskier hi-tech and R&D projects, and because there are better returns to be had in buying shares, taking dividends or even just holding cash.

Also many companies are still burdened by high debt even if the cost of servicing it remains low.  The high leveraging of debt by corporations before the crisis started now acts as a disincentive to invest.  Corporations have used their cash to pay down debt, buy back their shares and boost share prices, or increase dividends and continue to pay large bonuses (in the financial sector) rather than invest in productive equipment, structures or innovations.

I conclude that the cash reserves of major companies is not an indication that the cause of crises is due to inability to absorb ‘surplus profit’ but due to an unwillingness to invest when profitability remains low and corporate debt is relatively high.  That is the cause of this Long Depression.

And here is the rub.  Just at this time when Jim raises the issue of huge cash reserves and suggests that the cause of crises is due the difficulty of ‘absorbing’ profits, US corporate earnings are falling and profit growth has ground to a halt.  Cash reserves are set to fall from here too.

US corporate profits(adjusted for depreciation) % yoy

This brings me to Jim’s final point.  Jim questions my “constant theme – that the crucial underlying cause of the crises of the post-2000 period is that the rate of profit peaked in 1997 and has not recovered since.”  He says it is“logically questionable” assumption, that if crises are recurrent (even though different in form) there must be a single and common cause. Jim says, the empirical evidence for Marx’s law has“complex results which have to be explained dialectically and not by looking for a single unilinear cause”.

Well, I don’t think it is ‘logically questionable’ to argue that recurrent and regular crises may have a common underlying cause.  On the contrary, the regular and re-occurring crises make it logically questionable to look for different causes for each crisis, as many have done, from David Harvey, Panitch and Gindin, Dumenil and Levy etc.

Jim says that the contradictions within capitalism can “change the current configuration of the system. The tendency of profit rates to fall is not in itself a contradiction.”  Well, I thought it was“the most important law in political economy” (Marx) precisely because it showed the main contradiction in the capitalist mode of production ie. between developing the productive forces (raising the productivity of labour) and the profitability of capital; between the drive to raise profits for individual capitals and the unintended consequence of falling profitability in the whole system.

The real question is whether the claim that the Marx’s law of profitability as the underlying cause of crises under capitalism can be empirically validated.  That is what my work and the work of many others attempts to do.  And I think we are achieving that.

[i] Peter Jones, The falling rate of profit explains falling growth, paper for the 12th Australian Society of Heterodox Economists Conference, November 2013

HM London 2016 conference: Jim Kincaid on Michael Roberts

Jim Kincaid is an independent researcher based in Leeds, West Yorkshire (UK). Previously Senior Lecturer in Social Policy at Bradford University, he has been associated with Historical Materialism since 2002, first as member of the Editorial Board, and now as a corresponding editor. He has published articles in HM on topics which include: the political economy of Japan and East Asia, Marxist value-theory, finance, and the logical construction of Marx's Capital. He currently works on two projects: (1) how political economy is presented as a literary text in Capital; (2) how Marxist concepts can explain recent dynamics in the world economy – and in what ways Marx's categories have to be further developed to capture the current evolution of the system. He blogs at:https://readingsofcapital.com/ Some recent publications are availablehere.

Michael Roberts has emerged as one of the leading Marxist analysts of current economic developments.  For many of us, his blog, The Next Recession, has become an indispensable and challenging resource. He has also recently published his second book,The Long Depression, a lively summary of his current research which also extends the arguments of his blog in some important and interesting ways.  For example, detailed accounts of the Long Depression of the late 19th century and the Great Depression of the 1930s.

Some of Michael’s recent posts show him at his formidable best.  To take just one of many examples, on 9 Oct 2016, a discussion of the anxieties being expressed in recent reports by bodies like the IMF and BIS about the growing problem of high debt levels.  In a brief, but notably clear and well documented account, Michael surveys some of the main vulnerabilities in the system today – the fragility of corporate balance-sheets in many emerging economies, the dangerous levels of non-performing loans which threaten leading banks in major economies such as China, Germany and Italy, the general failure of monetary policy and zero interest rates to generate adequate levels of investment and growth in production, productivity and trade.  Here also there are calculations by Michael which show that that the latest policy nostrum being advocated by the IMF and in many other quarters – i.e. big increases in state spending on infrastructure – can’t realistically be nearly large enough to revive a serious increase in overall rates of growth.

Michael believes that there is now, ‘the prospect of a new global slump on a fast approaching horizon’.  I think it is quite possible that he will be proved right about this.

One of the signal virtues of Michael’s work that he is committed to norms of scientific practice and tries wherever possible to back up his analysis and conclusions with evidence.  He is resourceful in ferreting out relevant data from official statistical sources, and in finding vivid ways of presenting his results graphically. In addition, Michael is willing to make his working spread-sheets available to other researchers.  Earlier this year when I was working on profit trends in the US economy I took up a general invitation which Michael had made in a footnote – and he immediately sent me a pile of relevant work sheets and explained detail in a covering letter. Many thanks for this.

I have been able to assess more closely a dimension of Michael’s work which I believe is open to question.  A central theme in much of his analysis is that it is a declining rate of profit which is the underlying cause of the sequence of crisis which has afflicted the major industrial economies since the late 1990s.  As the biggest by far of the industrial economies, the US has been the main battleground in the debate about this thesis.

Using the same definition of the profit rate as does Michael, I have checked his spread-sheets against the original sources in the US official statistics, and redone the calculations.  I get the same results – as did a Swedish researcher, Anders Axelsson,  who had made an earlier check of  the material.

However, there is a problem.  I do not think that Michael’s data about US profit rates actually support some of the conclusions he draws about trends over the past 20 years.

In his Post of 4 Oct 2016, Michael once again summarises the findings of theanalysis of US profit rates from 1946-2014 which he published in December 2015.  Here in Figure 1 is the graph which he published in his December post in support of his conclusions.  Note that the definition of profits used in Figure 1, is the same as the one chosen by Andrew Kliman in his book-length study of US profit rates,The Failure of Capitalist Production (2011 pp.99-101). Profits of the financial as well as the non-financial sector are included in the corporate total. All figures are for the USdomestic economy only – overseas investment, production and profitability of US firms are excluded. (Kliman p.75).

From the data in Figure 1, Michael draws four conclusions in his Post of 4 Oct 2016 [  ].

• ‘The secular decline in the US rate of profit since 1945 is confirmed … the US corporate profit rate is some 30 per cent below where it was after World War 2 and 20 per cent below the 60s’. This is clearly correct, but we should be careful about how we use the term ‘secular’. If a direct trend line is drawn between the 1950s and 2015 it certainly slopes downward.  But Michael is sometimes assumed by his less critical readers to be saying that there has been ancontinuous fall in US rates of profit over the past 60 years.  However the trend line which he has calculated in Table 1 shows a cyclical pattern – two periods of fall, followed by two periods of recovery, though on a dampened scale. The post-2000 recovery is especially significant given that it preceded, in 2008, the most severe crisis of the post-war period. The causality here has to be more complex and dialectical and needs to focus on cyclical patterns, not a unilinear and continuous trend.

Michael next argues that:

• ‘Profitability … peaked in the late 1990s after the neoliberal recovery. Since then the US rate of profit has been static or falling’.
• ‘Since about 2010-12, profitability has started to fall again’.
• ‘Finally, the fall in the rate of profit in the US economy has now given way to a fall in the mass of profits’.

To test the latter three propositions we need to look more closely at rates of profit in the past 20 years. In Figure 2 I have used Michael’s own data for this period with only two changes: adding in the 2015 figures which have since been published, and a revision upwards of his 2014 rate of profit (because the figure for Gross Value Added in that year has since been raised in the on-line data source by about $90 billion.

Apart from these, Figures 2, 3 and 4 are based on Michael’s own spreadsheet (No. 9)

Source: Profit = net GVA = Gross Value Added MINUS Annual DepreciationMINUS Employee Compensation.

Corporate sector (Financial and Non-financial Companies. Domestic Economy only)

GVA Domestic Corporate Business – BEA NIPA Table 1.14, line 1

Employee compensation – BEA NIPA Table 1.14, line 4.

Fixed asset annual depreciation (Historical Cost)  – BEA Fixed Assets Table 4.6, line 17.

On my reading, the data in Figure 2 do not support conclusions (2) and (3).

• Since the late 1990s the rate of profit has not been ‘static or falling’. The rate was higher in 2005 and 2006 than in the 1997-8 peak. It seems unlikely that that the financial crisis which started in 2007, and went critical in 2008  was caused by a profit rate in 2007 at the same level as the late 1990s. The 2008 crisis was far more severe in its impact on jobs, wages, growth and trade than the dotcom downturn of around 2000.  Yet the impact on profitability was considerably briefer and more limited.  Profitability fell in 2008 and after as aresult of the financial crisis rather than as its cause.
• Profitability did not ‘start to fall after 2010-12’. After rising sharply from the 2010 low point, profit rates stayed level in 2013, rose fractionally in 2014, and only in 2015 was there the beginnings of a fall.
• Michael also holds that a drop in the rate of profit is normally followed by a rise in the mass of profit which is only a temporary phase. Figure 3 shows that this was not the case in the recent period.

Source: As for Table 2.  Gross Domestic Income – BEA NIPA Table 1.10, line 1.

In Figure 3 the mass of profit is measured as a proportion of Gross Domestic Income to eliminate the effect of inflation. When a comparison is made with Figure 2, it is evident that the two downturns in the rate of profit were not followed by a rise in the mass of profit which was onlytemporary.  The mass of profit recovered more quickly from the downturn of 2008, and that rise was sustained right through to 2014.  The rate and mass of profit track each other quite closely until 2006 when both rates were exceptionally high.  But the recovery after 2008 was more rapid for the mass than for the rate, and was not temporary, but continued through until the 2015 drop.

An alternative explanation 

That the mass of profit has been relatively high in the last 10 years gives some support to the broader argument I have been developing that in this period the system has been contending, not with falling rates of realised profit, but rather with an excess of profit relative to the levels of investment which have been lagging.

I have spelt out the arguments in an article which is in the latest issue of HM (24.3).  Also I have added further evidence in a series of posts on my website. See especially the posts ofMay 15 andApril 26 2016.

The system is being wracked and distorted by the malignant consequences of the effectiveness of neoliberal profit raising counter-tendencies. Profit rates have been driven up, and investment constricted, by a potent combination of market forces, aggressive campaigns by capital to raise the rate of exploitation, financialisation, state policies, and a deep change in the mode of regulation of the corporate sector (shareholder value etc.).  The operation of these forces has generated a global surplus of capital in the money form which is too large to be completely recycled back into productive investment.  Thus what we have is not a crisis of Keynesian lack of consumer demand, nor aMonthly Review crisis of monopoly profits.  But instead, a crisis of a particular sort ofdisproportionality –between available accumulations of money capital and the capacity of the system to absorb them.

Official statistics are not the only source of support for this thesis.  See, for example, an authoritative study by the Toronto based McKinsey Global InstituteGlobal Competition (2015). The data in this research covered about 28,000 large firms from 42 countries  (i.e. companies with turnover equivalent to over $200 million per annum). MGI found that: since 1980 corporate cash holdings have ballooned to 10 per cent of GDP in the US, 22 per cent in Western Europe, 34 per cent in South Korea and 47 per cent in Japan.

Corporate accumulation of cash reserves is only one source of an overall excess of liquid capital in the system.  Other major channels are: (1) the investible capital piling up in the global economy as the numbers and average wealth of the ultra-rich continue to rise; (2) international current account imbalances. In the pre-2008 period the US current-account deficit was a huge 5.6 per cent of GDP in 2006; China’s current account surplus was 10 per cent of GDP in 2007 – the counterpart flows of capital from China for lending and investment in the US were thus enormous.

The tendency of the rate of profit to fall, which Marx correctly identified, has been reversed in the recent period by the strength of a range of countertendencies. The rate of exploitation has been driven up, the turnover of capital has accelerated, the expansion of labour-intensive service sectors has slowed the rise in the organic composition of capital.

Investment levels in the major economies have lagged in money terms, as the value and price of investment goods has fallen in relative terms.  Corporate strategies in the productive and financial sectors have shifted over the past three decades to defensive and aggressive operations in the mergers and acquisitions market for corporate control, and to the maintenance of high share-prices.  These objectives require large war-chests of money capital, and a careful rationing of investment expenditure. Corporate tax evasion has soared, based on the holding of profits in money form, and laundered through tax havens rather than reinvested in production. Generous payments to executives and shareholders have also been a priority in surplus-value allocation.

From these various sources, from around 2000 a  rising surge of surplus loanable capital was being transferred into the banks and financial markets to be lent out and invested by them. The consequences were contradictory.  Large profits, initially, in the financial sector, but then increasing difficulty in finding a large enough supply of safe assets and reliable borrowers.  Disaster hit in 2007 after more than $1 trillion dollars had been lent in unsustainable subprime mortgages in the US, and securities based on these mortgages had been sold on a huge scale to banks in the US and Europe.  Severe strains also arose in Europe because banks in the Northern countries had lent lavishly to finance unsustainable booms in the peripheral economies of the EU.

And since then, a seemingly intractable combination of ultra-low interest rates, stressed banking systems, demand deficiency, faltering growth in key sectors of the world economy – and, since mid-2015, indications that profit rates may be starting to fall. Governments and markets have been testing new ways of coping with the problem of excess money capital.  The  patterns of stress in the system have altered.  Large sums of money have been absorbed by the major banks in the reconstruction of their balance-sheets. Leverage ratios have been driven down and their reserves in the central banks hugely increased.  In the short run this is a safer (if much less profitable) way of dealing with surplus liquidity in the financial circuits than handing it out in subprime mortgages or as loans to Spanish property developers.  But the crisis then takes the form of stagnating growth in investment and trade.

Since 2008 one of the three channels through which excess money capital is being transferred into the financial system has diminished. The US current-account deficit fell from 5.8 per cent of GDP in 2006 to 2.7 per cent in 2014  However, the numbers and net worth of the global wealthy keep rising.  And the continuing build-up of corporate cash piles remains a further and potent source of excess money capital in the system.

We have to remember the scale of the trends being summarised in the US in Figures 1-3 above.  For example, from its low point in 2008, the mass of profit in the US (using Michael’s definition) rose from about $2 trillion to over $3 trillion. This is a very sizable increase, given that Gross Domestic Income in the US was just over $18 trillion in 2015.  Since investment levels were relatively static in this period the result was a rapid rate of accumulation of corporate cash reserves. Notoriously, much of this flow is booked through tax havens to evade US taxation of profits.

The question of tax evasion leads us back to the definition of profits which Michael and Andrew Kliman use in their work. Here I stress that none of the ways in which Marxist researchers define profit rates and use official statistics are entirely satisfactory. Mine own included.  However if we want to do science rather than peddle myths we have to use the data available, but, obviously, with critical care and caution about their limitations. In all the sciences, research at the edge of knowledge is endemically plagued with problems and controversies about the meaning and validity of the data being used.

Marx defined the rate of profit as follows: s/ C + v.  I.e. surplus-value divided by capital advanced (constant capital + wages). But this can be construed in two ways:  either (1) as the capital advanced and surplus value extracted by companies – thecorporate rate of profit; or, (2) asocialrate of profit, which Michael calls awhole economy rate of profit.  The latter is a measure of the surplus generated within the whole economy in a given year, after deducting, (a) the amount of productive capital consumed in the private capitalist sector and, (b) total wages of all employees (not just those employed in the capitalist sector).

In the work which is summarised in Figures 1 to 3 above, and in common with Kliman, Michael used the corporate definition of profit.  He now prefers, he says, a whole economy rate of profit and this is what he employs in his latest book, The Long Depression.  I’ll discuss this, and the problems it poses, another time. But Figure 4 shows much the same pattern as the corporate profit rates in Figures 2 and 3 – a higher rate in 2005-6 than in the late 1990s, a sustained, if unspectacular, recovery after 2008, and a small drop in 2015.

Gross Domestic Income NIPA, Table 1.10, line 1.

Employee Compensation  NIPA Table 1.10, line 2.

Consumption of Fixed Capital  Fixed Assets, Table  1.10, line 23.

Private Non-Residential Fixed Assets  –  Table  4.3, line 1. (hist cost).

These differing definitions raise questions about Michael’s claim that the cause of a fall in the rate of profit is a rise in the organic composition of capital which is faster than any rise which has taken place in the rate of exploitation.  This is certainly a crucial mechanism.  But it does seem unlikely that in the cyclical variations in recent profit rates, a rise in the organic composition of capital plays a significant role.  Marx himself saw the organic composition of capital as changing over longer  periods of time, not as the cause of short-run movements in the business cycle.

It needs emphasise that both the corporate and the whole economy rate of profit in US official statistics have one large limitation. They cover the domestic economy only. The source for corporate value added figure is: NIPA Table 1.14 Gross Value Added ofDomestic Corporate Business; for the whole economy rate of profit the source is NIPA Table 1.10 GrossDomesticIncome by type of income. See for more discussion, my Post of April 13.

The Methodological Handbook for the US National Accounts explains that:

Domestic profits include all profits made by companies from operations in the United States as a geographical territory, irrespective of the nationality of the company. (i.e. where its headquarters are located)  Crucially, as the Handbook explains, “The profits component of domestic income excludes the income earned abroad by US corporations”. (Section 13 – 5).

We need not assume that all profits booked through tax havens are necessarily missing from the profits figures in the National Accounts: there are many loopholes which allow profits to escape taxation and to be reported in the corporate tax returns and company accounts which the Washington statisticians rely on.  But the balance of probability is that the exclusion of foreign-sourced profits from the National Accounts must mean a large underestimate of actual profit rates in the current period.  Thus it is by no means certain that US profit rates have in fact been 20 per cent lower than in the 1960s. For example, in the business press, in recent years, it is usually assumed by journalists, without any question, that profit rates in countries like the US have been at their highest in the post-war period, both before the downturn of 2008, and in the recovery since 2010.

There are of course other problems with the concept of domestic profits as used in the National Accounts of the US and other high-income economies.  As John Smith and Tony Norfield have explained in their recent and valuable books, much of the surplus-value which appears to be generated in the domestic economy is derived from the exploitation of labour in the low-wage economies. Here there are fundamental questions to be further explored.

 Some conclusions

Michael Roberts’ overall argument has many dimensions.  He acknowledges that different crises are sparked by different triggers. Due recognition is given, for example, to financialisation, and the instabilities generated by increasingly levels of debt in the major economies.  There are interesting sections on these aspects of the crisis in his book on TheLong Depression  But in his work there is an constant theme – namely that the crucial underlying cause of the crises of the post-2000 period is that the rate of profit peaked in 1997 and has not recovered since.  Behind this is a logically questionable assumption, that if crises are recurrent (even though different in form) there must be a single and common cause.

I have shown above, that as Michael’s own empirical work makes evident, there has not been, over the past 20 years, a simple linear fall in the US rate of profit.  Rather what we see are cyclical patterns of oscillation.  Falling rate of profit tendencies are battling it out against counter-tendencies, with complex results which have to be explained dialectically and not by looking for a single unilnear cause.

We should always be searching for causality of course.  But capitalism is a complex adaptive system.  The contradictions as they evolve (‘find room to move’ in Marx’s phrase) change the immediate configuration of the system. The tendency of profit rates to fall is not in itself a contradiction.  Michael’s own work on cycles (see the chapter in hisLong Depression book on cycles within cycles) has taken promising directions, and resumes themes explored by some of the great Marxist economists of the interwar period (e.g. Preobrazhensky, Maksakovsky) If the research programme ofcycles within cycles is to advance, as I hope it will, its creative implementation will require the sort of exceptional statistical and analytical skills which Michael possesses.

Talk given at Birkbeck, University of London, on 22 September 2016 for the occasion of the publication of Walter Benjamin’s The Storyteller: Tales out of Loneliness, Edited and translated by Sam Dolbear, Esther Leslie, and Sebastian Truskolaski. Illustrated by Paul Klee, Verso, London 2016

Walter Benjamin’s The Storyteller: : Tales Out of Loneliness is an edition of 42 pieces of writing by Benjamin – mainly his fiction, his puzzles and stories, his jokes and sketches. There are a smattering of reviews by him too – in the main ones that had not been translated before. The translators gathered together the bits and pieces of Benjamin’s literary work, some of which had made its way into the collected works, some of which had never been translated and some of which was just scraps that no one had taken much notice of. We rescued that which needed rescuing and put it into English. We also put it into contexts – dividing the book into three themes, to which the stories and the included reviews should speak: dreams, travel and play.

Porous categories – what dreaming is not a kind of play, or a journey of sorts – what play is not a travelling – if one takes Benjamin’s ideas of experience seriously – Fahren andErfahren. And these terms – dream, travel and play extended themselves, stretching into other others – the dream is a nightmare, it is fantasy and it is insanity. Travel can take you to distant places, to the unknown, the remote, or it can be the exploration which Benjamin loved too of your own doorstep – what he calls in his review of Franz Hessel ‘Backdoor Berlin’. The strangeness beneath your feet. And play twisted through the license of German into gambling – into the capacity to lose it all with one throw of the dice or spin of the wheel. It is here that most obviously the intertwinements of capitalism and myth appear.

What are the meeting points of fiction and form? Benjamin is promiscuous in relation to form – he writes bald prose and comic verse and expressionist prose and symbolist reveries and psychological thrillers – and yet perhaps none of those really fit to describe the work. In a review that was excluded in the end from the book – titled ‘Subterranean Passageway in the Tiergarten Street’ – Benjamin notes of watercolours by Rolf von Hoerschelmann in an exhibition:

‘The magic of these pages is perhaps this. On them locality and fantasy come together out of ‘free love’, without letting themselves be wed by the composition.’

Are locality and fantasy so freely entwined in Benjamin’s writings, without being hampered by any rigidities of construction, any commitment to any form, any wish to work and rework what is there? Something holds the pieces together – perhaps that something is assumed by me – but it is an intensely personal involvement in all of the scenes – whether he describes something that has happened to him or something that was told to him by another. It all seems to stem from experience – Erfahrung – from a knowing that is passed on mouth to mouth, created in dreams or found lurking in the streets.

I want to illustrate this by quoting from a review that we translated for the book  but did not include. Titled ‘In Praise of the Doll - Critical Scoffs at Max v. Boehn’s ‘Dolls and Puppet Shows’’, published in the Literarische Welt in June 1930. The review is harsh – a product of disappointment, or jealousy. But then Benjamin slips into another mode.  He writes:

‘Right after this dubious exegesis of Kleist, however, one has the pleasure of stumbling upon the ‘Changeable Dolls or Metamorphoses’. Boehn names as their inventor Franz Genesius. They played a leading role in the Puppet Theatre of Schwiegerling, certainly one of the greatest puppet playhouses of all times. These days it seems to have become difficult to find out anything about his theatre and for this reason I will communicate what I recall of a performance by Schwiegerling’s Puppet Theatre in Bern in 1918. This puppet theatre was actually more of a magician’s shack. There was only one production on each evening. Beforehand, however, his artistic dolls were put on show. I can still clearly visualise two scenes. Kasperl enters dancing with a beautiful lady. Suddenly, just when the music is at its sweetest, the lady collapses, transforms into a balloon and carries Kasperl – who clasps it tightly, out of love – off into the sky. For a moment the stage remains quite empty, then Kasperl tumbles down with a terrible crash. The other scene was sad. A girl who looks like an enchanted princess plays a sad melody on a hurdy-gurdy. All of a sudden the hurdy-gurdy caves in. Twelve sugar-tiny doves fly out. But the princess sinks silently to the ground with her arms raised. And as I am writing this, another memory from those days comes back to me. A tall clown stands on the stage, bows, begins to dance. During the dance he shakes a little dwarf-clown from his sleeve. He is dressed in the same red-yellow floral costume as he is. And with every twelfth step of the waltz, he produces another. Until, finally, twelve identical dwarf- or baby clowns dance in a circle around him.’

A play, a dream, a moment experienced by a student in Switzerland, exiled from his warring homeland. Benjamin writes out of experience and forms his experience into magical, tiny forms, strange wonders of analysis and emotion, dubious sometimes, in the old and in the modern sense, both enigmatic and off-beam – and inconclusive, yet with emphatic, often downbeat or deflating conclusions – like the shock of waking that must be endured until the dreams flood in again. 

Miriyam Aouragh writes on the recent protests in Morocco following the death of Mohsin Fikri

Poster by Contemporary Bart

As Morocco’s streets roiled with protest, we looked with astonishment and even mistook some of the videos for scenes of the 2011 uprisings. It is not an exaggeration to say that, yet again, the whole country rose up. Hundreds of thousands of people are protesting across the country chanting ‘al sha’b yourid isqat al fasad’ [the people demand the downfall of the corrupt] or ‘tahiya nidaliya, al hoceima thawriya’ ‘[salute to the uprising, al hoceima is our revolution]. The protests quickly spread to more than 40 cities. They then reverberated in the major cities of France, Spain, Belgium and the Netherlands where most of the Moroccan diaspora reside.

These protests began after a fish seller was crushed to death in the northern Mediterranean town of Al Hoceima. The story of Mohsine Fikri is gruesome and particular but also symptomatic. He jumped into the garbage truck with a few other colleagues to protest the embezzlement (and waste) of their fish, which was ordered by the police and the well-connected merchant controlling the retail of fish. Witnesses said the police then ordered the driver to set-off the trucks grinder-system. Mohsin's colleagues managed to jump out in time, but he got stuck behind.

One of the policemen sarcastically commented “than mo”, which is loosely translated asgrind the mother. Mother is both a contraction of a well-known derogatory swearword in whichmo/k revers to 'mother', and denotes the Darija (Moroccan Arabic) mostly spoken by non-Amazigh policemen enlisted in the area. Historically, these men are sent from central Moroccan army barracks to control and intimidate Amazigh locals, mostly with impunity. Their interactions are often disrespectful, loaded with references to imazighen as inferior people. So the hashtag♯than_mo has a deeper meaning for imazighen than appears on the surface.  "Than 'mo" went viral on social media, often joined by photos displaying the gruesome act. When the photos and videos of Mohsin and the first protests circulated that same day, the spontaneous movement became a fact authorities could not ignore.

The outrage led to mass rallies, although mostly spontaneous they often including previous 20 February activists, the nation-wide network behind the demonstrations during the Arab uprisings of 2011.

Sensing the jeopardies that come with these these trans-local steadfast collaborations, the furious mood as well as the awareness that smaller incidents can spark major transitions, the political elite of the Makhzan [Moroccan reference to the state structure which is itself an intricate part of the palace] almost immediately pledged to conduct an investigation. Officials form different ministries and parties ordered to visit Fikri’s family and persuade them to quell the protests. King Mohammed 6 and ministry entourage have also tried to sway the dynamic back to ‘normal’. Although there have been arrests (and in the un-exposed villages and smaller cities the response remains violent), the police and army are mostly restrained. This unusual response signifies how puzzled the regime is. The fact that this week the Kingdom hosts the COP22 climate conference has augmented apprehension over their response.

Hyper-capitalism with a crown

The events reflect different important things simultaneously. There is the recurring manifestation of anger over careless police repression, as people are tired of the unhindered behavior of the security forces, often showing its monopoly over violence and authoritarian policies in a spur-of-the-moment such as that fatal day for Mohsin. But it is also a continuation of the explosion of anger and protest in 2011 across the Arab world  - including the Maghreb with its many non-Arab communities and political minorities, such as the imazighen in the northern and southern parts.

As was important to note in 2011, these are not just protests against repression and violence typical of a police state. Dictatorships cannot be understood outside of their larger political-economic context. We find with Morocco a very complex reality caused by the sort of unlimited-privatization and hyper-capitalism that transfers its for-profit logic onto a much more harshly controlled trade of (mostly local) fishery. This regional and national problem is felt very clearly in Morocco’s coastal cities and towns. For instance, we see this in Al Hoceima, where many people are dependent on fish and have been selling fish independently for a long time. Fish and fishery, the coast and the sea are part of the social fabric. All the new rules and regulations, to the point of violent prevention of personal retail, are experienced by residents and fishers as aberrations to normal life. These incidents are testimonies of how economic liberalisation impose undesirable socio-cultural changes. But the contradiction is that they also encourage resistance. 

Analysis of these protests needs to incorporate how millions of ordinary people are confronted with critical socio-economic shifts caused by Morocco’s extreme neoliberal policies. This dynamic is in addition to crucial local and historic issues such as the demand for local sovereignty (e.g. to allow local fish and crops to benefit the community instead of a few well-connected (me’rifa) businessmen) and democracy with particular demands for accountability of police repression.

However much these swift and raw public spasms are confirming that social tensions have reached a tipping-point, these are not new. Since independence in 1956, Morocco has provided both a geopolitical and economic sphere of influence, including in particular the northern regions because of their geographic locations connecting Africa, Europe and the Middle East — this was after all, the main motive for the international status of Tangier for a very long time, the poster-boy that provided Africa its largest and oldest tax-free manufacturing zones. And this historic exploitation and suffering is why it matters that the protests erupted in the northern Al Hoceima region, also known as the Rif.

History cuts like a knife

Morocco was occupied and colonized by France and Spain, and Spain was the colonizer in the north. And it was a particularly harsh colonization in the north. The legacy is stained by colonial violence and this history still cuts like a knife. The Northern regions have a particular history of unrest, since the Rif is also the birthplace of Abd el-Krim al-Khattabi, one of the most important anticolonial resistance fighters in the early 1920s, respected across the Arab world, Africa and what was previously known as “Third World”.

Moroccan independence differed from other liberation movements, most importantly nearby Algeria. It was an agreed transition with the colonizers. In the north, some of the fiercest battles were fought (and, remarkably, often won) where people suffered unimaginable violence for decades. Medical and scientific reports about the lasting effects of mustard-gas aerial attacks are still on-going. The local consensus was to continue the struggle. They wanted real independence, one that included the right to determine their own future with respect for the regional Amazigh culture, language and politics. This blew up during the Rif insurrection in ’58-59, which was crushed by the then-new kingdom of Mohamed 5 and in which crown-prince Hassan 2 personally participated (See filmBriser Le Silence). This is a very painful part of the memory of the Rif and the general sense there is that people do not forgive or forget. But the makhzan doesn’t let people forget.

These memories are prompted every time the people rise up and are suppressed again, as occurred during the Intifadas of 1981, 1984, 1991. Al Hoceima (mostly as part of the Food Riots in the rest of the country in response to IMF imposed cuts or planned privatization of education) experienced major uprisings. Some were actually initiated and led by young school students and spread throughout the north of the country. So those memories are continuously refreshed and in due course become part and parcel of the syntax of certain politically involved citizens.

But all of these previous experiences culminated in 2011. Those who were politically involved were able to disseminate these memories – and all the lessons derived from them – to a new generation of activists. This is crucial because as is typical for any dictatorship, for decades there has been a very strict censorship of the political history of Morocco, at least until the early 2000s around the time the new King Mohammed 6 took over the throne when his father Hassan 2 died and understood the regime had to adapt. But it seems that in the last few weeks reached a limit, “than mo” was the last straw broke the camels back. The placards carried at protests (often joined if not led by women) saying The Rif Does Not Kneel is the ephemeral retribution of the incessant and compulsory obedience.

Caption placard: The Rif Does Not Kneel. Photo by Mohammed El Asrihi]

Unfinished Business

While many didn’t really know about these histories, not even of the epic anti colonial resistance of the 1920s and the massacre at the hand of their own government during the 1950s insurrection, it all haunts the Rif. They then merge with more recent experiences of 2011. We could see the current uprisings as an opportunity for those old and recent memories to converge. Indeed, during the 20 February protests in Al Hoceima five demonstrators were killed and their corpses moved to another location where they were burned to hide evidence. When people reject the promises to investigate the death of Mohsin Fikri, they recall these 5 young men.

Those cases were never resolved despite promises to conduct honest investigations. So there is a certain unfinished business - both a feeling of unfinished business in Al Hoceima in terms of its history and repression by the makhzan, and with the rest of the country with regards to the movements that arose in 2011-12 and were successfully quelled through government cooptation and the promises of new constitution and elections.

Makhzan Public Relation

Marrakesh will host the 22nd COP UN climate summit. All the official climate-related motives notwithstanding, this cannot be separated from other political interests of the Kingdom. There is an interesting international development with regards to Morocco’s attempt to become part of the international community. Morocco has invested enormously in its PR over the years. Ironically, one of the major recipients of funding has been the Clintons and especially Hilary Clinton in anticipation of her Presidency (activists are currently sharing sarcastic statements to claiming back their tax-funded gifts). A number of reports (diplomatic cables known as “Marocleaks”) exposed how the Moroccan makhzen employed PR advisers, some belong to Brookings and others agencies affiliated with pro-Israeli lobby firms (See Intercept). In other words, organizations that are experienced in rebranding unacceptable policies or states, that sell dictatorships as democracies. In Morocco this is mainly related to the controversy over Western-Sahara.

The invitation of big organizations and NGOs to Morocco to organize their conferences is one of the ways the Moroccan state is trying to improve its international stature. We saw that with the international Human Rights conference two years ago. Many human rights activists and lawyers were very angry about this charade, for while these conferences took place human rights in Morocco were crushed.  The level of cynicism and sometimes irony in all the hashtags, posters and banners are precisely about exposing that fierce contradiction. A country that is organizing international conferences about climate change or democracy, and at the same time not offering any of those rights to its own citizens. But this week the activists are reminding the delegates of their disillusionment with these attempts, as one poster says, "Come to COP 22. We will crush you," in reference to the crushing of Fikri.

The past weeks in Morocco are therefore both similar and different from the uprisings in 2011. Mainly, the extremely challenging (and then very new) experiences of 2011-2013 are behind them. Many of the lessons have been learned, often in tragic ways. Hence, activists now expect to see state manipulation of the protests. Besides the orchestrated efforts of all the official media, some confirm that infiltrators were sent to the different protests across the country. The people have no illusions in the promises of a government, which uses its networks of spies to spread rumors about the protests as anti-Arab Amazigh sectarianism, about the activists being Algerian spies, or influenced by Polisario provocateurs. As this new chapter in Moroccan politics reminds us, ordinary people bare the brunt of the Makhzan and therefore change can only come through a united effort across ethnic, linguistic and regional class.

The following interview was originally published by Viewpoint Magazine on 18 August 2016, and was conducted by George Souvlis and Aurélie Andry in 2015.

_{Benno Teschke is a Reader in International Relations at the University of Sussex and author of The Myth of 1648: Class, Geopolitics and the Making of Modern International Relations, about the relationship between Marxism and international relations theory. As one of the founders of theHistorical Materialism journal, he has also contributed to its pages with a piece in 2005 on ‘Bourgeois Revolution, State-Formation and the Absence of the International'. He discusses here his intellectual journey, the problems generated by the lack of a coherent Marxist theory of international relations, his work developing Political Marxism - theoretically and as aresearch group at the University of Sussex - as well as his work on Carl Schmitt and various contemporary issues. Please note the interview was conducted before the UK's referendum on its membership to the European Union.}

George Souvlis and Aurélie Andry: How would you situate your trajectory in the broader intellectual and political contexts of West Germany?

Benno Teschke: I went to a Franciscan Gymnasium in small-town Western Germany and when you were born, like me, in the late 1960s and had some left-leaning inclinations, your intellectual formation and path to Marxism was likely to be strongly influenced by the Frankfurt School – as it was in my case. It was actually the works of the earlier Frankfurt School that fascinated me, the books that were more historically and sociologically grounded doing more political analysis as classically understood rather than philosophy or cultural theory: partly Franz Neumann and Otto Kirchheimer on fascism, and partly Jürgen Habermas’s early work onThe Structural Transformation of the Public Sphere, even though I grew very quickly dissatisfied with Habermas’s later work. To sustain and deepen my interests in political economy and historical sociology I turned then more directly to Marx’s own work, but always felt that the theoretical structure ofDas Kapital – the historical chapters apart – and the body of literature that goes by the name of Kapital-Logik or, more recently, the “New Dialectics,” remained ultimately sterile – an exercise in dialectical abstractions of a purely conceptual nature that had left real history largely behind. Still, the engagement with the Frankfurt School and Western Marxism more broadly left me with strong anti-positivistic convictions and, if you want, a dialectical sensitivity as to my conception of the conduct of social science.

Substantively, much of the academic debate in Western Germany – on the left and on the right – was still transfixed on the German catastrophe and the Holocaust, and this became also my first intellectual “problematic.” But rather than looking at the culture industry or grand philosophical narratives of the “Dialectic of the Enlightenment,” I felt initially more drawn towards the left-liberal Bielefeld School – people like Hans-Ulrich Wehler and Jürgen Kocka – who grounded the Nazi experience in Germany’s peculiar long-term trajectory of socio-economic development and state-formation, anchoring its deviance from presumed Western European standard paths in the “failed” 1848 “bourgeois revolution.”1 The debate in the late 1980s between them and David Blackbourn and Geoff Eley’s position set out inThe Peculiarities of German History caught my interest and convinced me of the virtues of social history and historical sociology.2 Against this narrative, more conservative Neo-Rankeans kept insisting on Prussia-Germany’s unique geographical position in the middle of Europe, which allegedly forced a repressive authoritarianism domestically and an aggressive militarism abroad. In other words, a deep ideological gulf opened up in this debate between social historians who kept restricting their explanatory focus to the primacy of domestic social relations and more traditional historians who kept insisting on the autonomy of the political, the primacy of foreign policy, and ‘high politics’ – a tradition that retained echoes not only of Leopold von Ranke’s conception of world history as the rivalry between great powers, but also the more sinister and intellectually degraded tradition of German Geopolitik, from Ratzel to Haushofer.  Still, I found this divide between internalists and externalists always forced and unproductive, mapping onto normative-political predispositions rather than tackling the problem head-on. This was a strong bulwark against the ideological gulfs and limited points of emphasis affecting social historians at the time – divisions over the primacy of domestic relations or the primacy of foreign policy – and led me to ask what Marx and the wider Marxist tradition had to say about political geography and international relations so that external relations could be internalized into a revised Marxist perspective.

In this context – we are approaching the early 1990s – I became more and more aware that there was no distinct tradition of historical sociology left in Western Germany, broadly defined, that could re-inform Marxism, partly because many Weimar historical sociologists had emigrated, and perhaps partly because this genre of scholarship had become discredited by the more orthodox East-German literature. This was a very peculiar phenomenon, really, given that sociology, historical sociology, is par excellence basically a German invention, deriving its greatest impulses from the great German and Austrian classics: from the German Historical School and the Methodenstreit of the 1880s to Weber, Schumpeter and Polanyi, and of course Marx and Engels themselves. That discourse, in a way, had with very few exceptions – Heide Gerstenberger’s work springs to mind – migrated outside of Germany by the late 1980s, early 1990s. Simultaneously, I was struck when I studied in the 1990s in France and Britain that the very same academic register that was on the verge of extinction in Germany was here fully alive – in France through the Annales School (Marc Bloch and Fernand Braudel) and in Britain through the great Marxist historians (Eric Hobsbawm, E.P. Thompson, Perry Anderson, etc.). In fact, the discipline of historical sociology had been revived and rehabilitated in Anglo-American academia, if decidedly in a non-Marxist fashion, during the 1980s and 1990s in the writings of Charles Tilly, Theda Skocpol, and Michael Mann. So, I would say that by the early 1990s a certain problematic was starting to crystallize which I would broadly call a search for a Marxist international historical sociology. I was looking for something like that.

While I was doing my doctoral work in the Department of International Relations at the LSE to pursue this theme, I came across the work of Robert Brenner and Ellen Meiksins Wood and in many ways this was an inspiration. I consider this literature a real breakthrough, in particular the “Transition Debate” on the rise of capitalism in late medieval England, because I think that it is rare to find Marxists that really step outside their comfort zones, outside the core categories and assumptions which derive often from more or less deeply held orthodox convictions, and to engage history in open-minded, innovative and rigorous ways by taking historiographical research seriously.3 I wanted to see how I could use Brenner’s work in order to think through and further historicize political geography and international relations. So I think that is essentially what brought me to my own work, i.e. drawing out the implications of the “Transition Debate” for historicizing international relations and developing Political Marxism for International Historical Sociology in the process.

GS and AA: You are one of the main initiators of the Political Marxism Research Group at the University of Sussex. What are the aims of this research group and how do you position yourselves in relation to the tradition of Political Marxism?

BT: The aim of thePolitical Marxism Working Group is to provide a platform to not only passively rely on the first generation of Political Marxists, but also to try to develop the research program and theoretical commitments in new directions and in productive ways.

One problem that distinguishes different tendencies within Political Marxism – what may be called PM 1 and PM 2 – is the need to explore the unresolved tension between a residual structuralism encapsulated in the category of social property relations and its logically derived “rules of reproduction,” and the simultaneous adherence to a strong historicism, which centers social conflict, class agency, and unintended consequences. Samuel Knafo and I speak to this problem in our paper, “The Rules of Reproduction of Capitalism: A Historicist Critique.” This tension, we think, has led over time to an ideal-typified conception of capitalism in PM 1, defined as “market-dependency,” in which market imperatives seem to prescribe and auto-generate class agency – a reading also present in Charles Post and Vivek Chibbers’s work.4

Overcoming this relapse into a functionalist conception of class agency and an economistic understanding of the operation of capitalism (even when grounded in a distinct set of capitalist social property relations) requires what we call a stronger commitment to a radical historicism. This foregrounds agency, situated and contextualized, at all levels to retrieve a sense of the more open-ended conflicts and institutional innovations that characterize diverse trajectories of capitalism. The elementary insight is simple: if capitalism is conceived as a politically contested social relation, then we cannot conceptualize agents as acting out a pre-ordained script or logic. We need to turn our thinking around and establish what people do in the face of “imperatives” or pressures to pinpoint the difference they make as they go along reproducing themselves – often innovating in the process. We cannot conceive of agents as passive rule-followers, but as actively devising strategies of reproduction in specific contexts.

The problem, in other words, is how to conceive of capitalism not as a theoretically closed category, but as a historically open praxis. This requires a move away from general model-building towards historical specification. For me, this pertains particularly to the issue of developing an approach to IR that does not subsume foreign policy making and diplomacy under wider structural and systemic pressures, whether grounded in reified “logics” of capitalism or reified “logics” of state rationality, but that accords efficacy to political agency on its own terms. This is not to argue for some radical state autonomy, but to take seriously the fact that agency can rarely be fully resolved back into contextual imperatives or antecedent conditions, as people tend to innovate in unpredictable ways to respond to, circumvent, and escape from such pressures. History is then not conceived as a manifestation of overarching logics or laws – a secondary register meant to confirm aprioristic abstractions and pre-conceived axioms – but itself the first-order terrain of inquiry, as people make their own history.

This type of thinking is also distinct from David Harvey’s Marxist geography, which ultimately grounds the dynamics of “capital outbound” in deeply rooted systemic pressures, which require “spatial fixes” at the infra-structural level and successive rounds of “accumulation by dispossession.” But this is essentially an economistic and totalizing conception of the transnationalization of capitalism without international politics, which is then re-captured ex post through the problematic and reified addition of a logic of power, apparently pursued by state-managers. Immanuel Wallerstein’s world-system theory, at least when it was initially formed, is another example of subjecting history to grand cycles – the cycles of hegemony – and the systemic pressures of the relations between core, semi-peripheral and peripheral states. Rosenberg’s current work, in turn, seems to embrace a positivistic and nomological conception of uneven and combined development as yet another overarching master concept and covering law for world history as a whole.5 Here, history and agency are ultimately downgraded to manifestations of a subjectless law that imposes its imperatives regardless of what people do, so that history is slotted into a few a priori omnibus categories.

I will add that Classical Marxist theories of imperialism also fell into the structural-functionalist trap, as monopoly capitalism was conceived as a system-wide stage, at least in the core European capitalist countries, which imposed its requirements on states and their foreign policies. This drastically reduced the efficacy of diplomacy and the active conduct of international politics. These theories all suffer from advancing theories of international relations without international politics and, what I come think is key, the active formulation of “grand strategies” that tell us much more about the link between domestic politics and foreign policy formation – and, ultimately, international ordering. It is this commitment to an anti-formalistic radical historicism that, to my mind, is the differentia specifica of our understanding of Political Marxism.

So, this is essentially our goal: trying to go beyond the original “Transition Debate” to more fully historicize capitalism and “capitalist” international relations. I am looking now more at what I want to call the political geographies of historical capitalism: how you can think about foreign policy informed by a PM approach, emphasizing the unilateral or multilateral construction and clashes of state strategies, whose interactions often lead to unintended consequences. What I have in mind here is to take seriously the fact that the historical record of “capitalist” foreign policy – the structuring and management of spaces of capital – is so incredibly diverse: from the Peace of Utrecht that left a specific political geography on the Continent regulated by British power-balancing, via the Vienna Settlement and the Concert of Europe, the construction of the Western Hemisphere through the Monroe Doctrine, formal and informal imperialisms in the late 19th century, the American interwar strategy to break up the old empires and replace them at Versailles by pushing mini-state proliferations through the principle of “national self-determination,” based on liberal and republican state forms and tied into notions of collective security, German and Japanese notions of autarchic regional orders – Carl Schmitt’s “greater spaces” – to US hegemony and the European Integration Project. The political geographies of historical capitalism cannot be derived from a particular “logic of capital,” either with recourse to the generic concept itself, or particular phases of capitalist development, but require a much more fine-tuned historicist approach that emphasizes their construction – rather than subsumption under some sub specie aeternitatis principle – be it the classical IR trope of power politics and states as security accumulators in a condition of anarchy or the classical Marxist trope of capitalist geopolitics. For what is a capitalist foreign policy supposed to be, in the abstract? So we are broadening out into other fields, into other areas while trying to theoretically refine or reformulate the early brilliant, but theoretically somewhat problematic, work of Brenner and Wood.

GS and AA: Can you explain the argument of your work, The Myth of 1648, and how it challenges the reification of the Treaty of Westphalia as the founding moment of modern international relations?If Westphalia was not the founding moment of modern international relations, what does that imply in political and historical terms? What were some of the criticisms you received?

BT: This work came at a very propitious moment, speaking to the “historical and post-positivistic turns” in the field of IR, which, as mentioned, was at the time a very an unusual academic discipline, and very much focused on the United States. It provided – and still does in the U.S. and elsewhere – essentially strategic advice for the powers that be: advice for the Prince on matters of statecraft, orHerrschaftswissen (knowledge of domination) as Frankfurt School theorists would call it. Here was a whole field of academic inquiry that makes no bones about being directly subservient to state power, in which scholars moved effortlessly between university departments, think tanks, and governmental positions – all united in suggesting ways of how the United States could maintain or enhance its position at the apex of the interstate hierarchy – whether through conflict or cooperation. The result was an intellectual shallowness that struck me from the start as scandalously out of sync with all the standards of social-scientific and historiographical inquiry.

In retrospect, I would say that I started the project with three big questions in mind: First, how could I show the historicity of political geography, the polities that compose geopolitical orders, and their “international relations” by grounding this in contested social relations? Hence the return to medieval history. This was designed to dislodge the prevailing state-centrism and historically incredibly myopic and misleading attempts of transhistorical general-theory-building in mainstream Anglo-American IR, built around anarchy, power-maximization, and power-balancing, as if foreign policy had been played out since time immemorial according to the same tune.

Second, why – and this is a more genuinely interesting question – does capitalism exist within a system of plural states and what is the historical relation between the two? This was designed to query and destabilize the assumption, held for example by Wallerstein’s World-Systems-Theory, that the interstate system, the multiple political jurisdiction that splinter a capitalist space co-extensive with the world-market, is somehow the “natural” or “necessary” (geo-)political form of capitalism, causally connected to capitalist requirements – hence the need to go back to the Carolingian Empire and to track the changing political geographies of medieval and early modern Europe. The aim was to show the socio-political and geopolitical construction of the interstate system during the absolutist-dynastic period as a historical outcome, preceding the rise of capitalism.

Third, what effect had the rise of capitalism in early modern England, as set out by Brenner, on British state-formation and grand strategy for the ordering and, ultimately, transformation of pre-capitalist geopolitical relations in the rest of the world? In a sense, 1648 was a casualty of this research program, and not the prime target – partly because it seemed obvious to me that anybody semi-literate in early modern history and peace treaties would not take IR’s claims on the Westphalian Settlement’s “modernity” seriously – though it turned out that I had underestimated how deeply ingrained thisidée fixe was in the collective disciplinary mindset. So,The Myth of 1648 and the subsequent Deutscher Memorial Lecture had a wide reception, inside and outside IR, and inside and outside Marxism.

The response from within the field of IR centered less on these analytical questions – which were more productively taken up from within the Marxist discourse – and more on the revision of the status of 1648. While few quibbled with the empirical veracity of my interpretation of the Settlement, three standard responses emerged, apart from those, very few, that understood my account as a plausible alternative theorization.

The normal tactical move was first to say that while the notion of “Westphalia” was indeed widely accepted as a starting point for modern international relations, it was never meant to be a serious historiographical thesis in IR as a scientific field. The anarchy-assumption associated with Westphalia was just a convenient Political Science model, whose historical veracity is really by the by. It is just a model of how to visualize interstate relations in an anarchical environment. The reasoning was that there is no need to worry much about the specific origins of the interstate order, as history was in IR a secondary concern that can be neglected.

The second answer was that there was some truth to my argumentation but that IR had never really maintained that the modern interstate system fell overnight fully-fledged from the sky, that it was suddenly institutionalized after the Thirty Years’ War, so that 1648 was a mere stepping-stone in a much longer and drawn-out gradual process..

The third response, coming often from post-structuralists, was to say maybe you are right, but it is still a myth, a discursive myth, and thus still a powerful performative discourse constitutive not only for the discipline but also for reality to the degree that policy makers more or less use Westphalia as a rhetorical device or performative praxis, so that the idea has taken on a historical efficacy of its own. And in that sense 1648 still needs to be taken seriously. This kind of argument is, of course in a way true – if people start believing in false claims then they become ideology. But this does not really constitute an account οf how else to think about Westphalia, especially from a critical point of view.

GS and AA: How do you now assess the general effects of this work and your historical approach for understanding capitalist international relations? How has it affected the course of your current research?

BT: Ultimately, the debate over identifying a determinate moment in time – a system-wide tipping-point for the arrival of modern or capitalist interstate relations – leads into an intellectual impasse, charged with teleological assumptions. The historical implication of my research is simply that the search for sudden “systemic” changes across international orders is futile. It grates with the idea of history as a process allergic to system-wide periodizations of clear-cut “befores” and “afters,” given different temporalities of development in different regions. It also imputes that we know what “modern” or “capitalist” international relations are supposed to look like, once that imaginary threshold had been crossed. We don’t! What does it mean to say this or that is a distinctly capitalist foreign policy, if capitalist foreign policies take on distinct forms in concrete cases? As we know, these can range from defensive postures, to alliance-formations and concert-systems, formal to informal imperialism, attempts to establish distinct regional spheres of influence, as for example institutionalized in the U.S. Monroe Doctrine or fascistGrossraum-building, to types of quasi-consensual hegemony, decolonization, or regional integration, as in the case of the EU. Nobody in his or her right mind could deny that capital accumulation is a powerful motive in the foreign policy calculations of capitalist states, but this doesn’t tell us much about the specific construction of specific foreign policy strategies, political geographies, and their chances of realization.

The whole point of my argument is less about finding a moment in time where modern or capitalist international relations were enacted, but to think a little bit more about the variability in the construction of foreign policy strategies for the geopolitical management of interstate relations over time, even within a capitalist context. Now, this type of historicism is often quickly dismissed by more positivistically-minded IR theorists who equate IR as a social science with a conception of theory that validates determinisms and generalizations, so that my work is sometimes referred to as belonging more to historiography or to interpretation or to something else. My epistemological strategy is then downplayed and downgraded as something that it is not scientific, maybe constructivist, interpretivist, or hermeneutic or so but considered as being outside the essential field definition of IR – and this comes also from Marxists who assign structural efficacy to capitalism and its expansionary tendencies. But the key point for me is simply to keep demonstrating that it is misleading to center a preconceived and ideal-typified notion of capitalism as being structurally efficacious for international relations in deterministic ways. Rather what we need to do is to constantly historicize and when we do that we will start to see that the link, the mediation between the presence of capitalism and foreign policy formation is very variegated, often indeterminate, not only in terms of foreign policy formation, but also in terms of political geography as such. So, this is to react against the common idea that we have to start from firm axioms or firm expectations derived from capitalism’s systemic pressures.

I say that somewhere in the early work of mine where I suggest that from the 17th century onwards capitalism emerged and started to expand, but not as an organic process that could be rigorously theorized. Rather, what we see is an incredible diversity in the construction of foreign policies and spatial orders from the early 18th century onwards up to now. So this formative period is looking obviously very different from the early 19th century after the enactment of the institutional, geographical and practical innovations in international relations – the Concert System and the “Holy Alliance” after the Napoleonic Wars in the Vienna Congress, in which, incidentally, Britain was unable and unwilling to impose anything like the hegemonic designs theorized by Neo-Gramscians in relation to continental Europe; and this looks again very differently from the establishment of the more formalized alliance-systems and power-balancing after the turn of the century in the run-up to World War I. Post-1945 United States hegemony is again a very, very different way to order capitalist interstate relations, then post-9/11 relation, and so on and so forth. We all know this, of course, but Marxists still want to reduce this often to either some essence of capitalism or some stage of capitalism or some other grand explanatory formula. I think the historical record just shows how problematic is to do a shortcut between capitalism, a particular type of foreign policy, and a particular type of geopolitical order. So, in short, I mean the research program that derives from this conception is to do much more detailed work, historiographical work.

What I am doing right now is to look at the Peace Treaty of Utrecht, which sounds again very antiquarian, but this was a big peace settlement, much under-studied in IR, that concluded the Spanish Wars of Succession in 1713 and changed the rules of the game. It is significant for me because Utrecht allows me to draw out the distinctions between the old regime character of 1648 and the first attempt by post-1688 Britain to develop a new and very distinct type of grand strategy, call it capitalist if you want, precisely without promoting capitalism on the Continent. So, after the Glorious Revolution in 1688, Britain starts to make its distinct foreign policy designs felt internationally, enforced and accepted multilaterally at Utrecht. What is innovative here, a point alluded to at the end of my book, but now fleshed out much more clearly, is that Britain developed a new and unique institutional basis for conducting foreign policy, as foreign policy is henceforth answerable to Parliament. This allows for the articulation of foreign policy in terms of a much more sober and secular calculus of the “national interest,” no longer connected to the whims of the Kabinettspolitik of absolutist rulers. This involves the attempt to re-order European political geography in line with British security interests and, on that new geographical basis, to engage in power balancing to avoid the re-emergence of a continental hegemonic rival.

Power-balancing is therefore not a law of world politics, but a very specific conscious practice – a conscious construction of a grand strategy developed by situated actors. Daniel Baugh wrote in the 1980s a great article on this, showing the emergence of the “blue-water strategy,” which had a dual aspect: the establishment of unilateral maritime-commercial supremacy overseas, while being much more defensive in relation to Europe.6 But this was not a functional outcome of a capitalist constitutional monarchy in which sovereignty lay now with Parliament, but required the construction of a very specific wartime strategy and peace plan contested between the Whigs and the Tories, enacted at Utrecht, and negotiated with other peace parties. So, if you push this kind of work conceptually then you start very quickly to realize that notions like “modern” in international relations do not mean much, they do not give you much, because they imply commonalities, rather than differences. The rise of capitalism in Britain and how this led to new foreign policy ventures and, later, the transformation of European and overseas politics is certainly not a patternless process, but these broad patterns themselves do not give you much in terms of the way that state politicians actually innovate at the foreign policy level. So history is a process – an interactive construction that is the obvious point, the big point that I would like to make against any temptation of relapsing into structural explanations.

GS and AA: Could you explain how your work shows how Marxist theory, and in particular the Political Marxist notion of “social property relations,” can help challenge and redefine some of the core assumptions of IR theory and historical sociology? Do you think that, vice versa, IR can be used to help improving Marxist theory?

BT: You have to understand that mainstream Anglo-American IR was, until very recently, built on the assumption that theorizing departs from the existence of the interstate system as a natural given, rather than something that requires explanation in the first place. It posits the political as an autonomous sphere in which states are generically endowed with a unitary rationality and ascribed certain attributes, foremost survival, security, and hence power-maximization. Once these axioms are in place, you can then establish by means of a series of logical deductions how rational state action in a condition of international anarchy leads to certain likely outcomes, including power-balancing, leading to some kind of self-equilibrating systemic logic. This is a nice little exercise in abstract logic, actually modeled, by Kenneth Waltz, in analogy to the workings of the anarchy of competitive markets self-regulated by the invisible hand. It is also said to be grounded in ancient wisdoms –si vis pacem para bellum – but bears hardly any relation to reality. So the works of Hans Morgenthau and later of Kenneth Waltz are really premised on drawing an analytical Rubicon between the state and systemic interstate relations and anything that goes on within societies within these states. So the domestic and the social are excised from the remit of what could count as possible influences on statecraft and foreign policy – party politics, business and sector interests, social crises and so on.

This is of course an incredibly narrow, impoverished and ideological way to think about international relations as a social science. More interesting than criticizing these kinds of model-building, which is often peddled as “hard science,” is the intellectual genealogy that transposed right-wing and statist Weimar thinking, often through German scholars, to the post-WWII and early Cold War US-American scene, displacing an older “liberal” approach to IR associated with Wilsonianism. Morgenthau, for example, was not only influenced by Max Weber but also by Carl Schmitt’s concept of the political, which conceives of the political as an autonomous sphere, activated by “us” versus “them” binaries. This was not so much a reference to Schmitt’s definition of sovereignty in terms of who holds the power to declare state emergencies that suspend the routine workings of parliamentary sovereignty in liberal polities, but rather to his infamous idea that a different, purely political, logic kicks in as soon as certain pre-political differences reach a state of intensity that have a potentially lethal antagonistic quality. Apparently, Morgenthau advised Schmitt to insert this idea of “intensification” of non-political issues into his tract on Der Begriff des Politischen. So, a conservative and semi-fascist notion of the political, forged in the Weimar situation to quarantine class conflict, was transposed into an altered US context, now characterized by a Cold War logic.

Today, the field of IR is, of course, much richer, especially outside the United States, but it is hard to dislodge the prevalence of Realism, Neo-realism and what is called Neo-liberal Institutionalism – another version of rationalist thinking about strategic state behavior. So, these traditions were directly targeted by my book by bringing historical sociology back.

Historical sociology, in turn, is dominated by Neo-Weberianism and the tautological argument that “war-made-states and states-made-war” – and this is the prevailing consensus as to how the modern state and the interstate system at large emerged in early modern Europe. Many historians use John Brewer’s notion of the “fiscal-military state” that rationalizes state structures to procure state revenues to conduct war to say the same thing. Very few people connect these developments with changes in social relations, and, in particular, with how social conflict, in spite of similar military rivalries, diverted trajectories of state-building into differential directions – absolutism, constitutional monarchies, republics, etc. This is why Brenner’s work was so seminal for me.

I would, today, stress though, as I said earlier, that I no longer fully subscribe to the concept of “social property relations,” at least in the way it is stylized in more rigorous analytical fashion by Brenner. Brenner suggested that property relations generate – almost auto-generate – determinate rules of reproduction on both sides of the class relation, whether in feudal or capitalist “societies.”7These then lead either to “non-development” in feudal society or “development” in capitalist societies. This was useful to draw the contrast, starkly, between two different sets of social relations for analytical purposes, but this conception also relapses into reifications and rigidities that do not square with the historical record (certainly not for “capitalism”) and suppress the “lived agency” of people.

I think that Ellen Wood’s seminal New Left Review article on “The Separation of the Economic and the Political in Capitalism,” when read carefully, points to a different understanding, namely one centered around the socio-political and non-economistic character of capitalism.8 This was inspired much more by E.P. Thompson’s work at the time, and I feel much more comfortable with this historicist, rather than logical-analytical, conception of capitalism. This really leads us back to very fundamental and long-standing controversies that reach right back to Marx’s work, when he declares in the preface toDas Kapital that it treats “individuals only as personifications of economic categories, the bearers of particular class-relations and interests,” rather than as historical actors.9 To my mind, Brenner’s work, at least in the originalTransition Debate, is theoretically suspended between these two contradictory orientations: class conflict and historicity versus abstract rules of reproduction and dynamics of development and non-development.

Inversely the question is: does Marxism need IR – less the substantial body of IR scholarship, but more the problematic of space and interspatial relations for the Marxist conception of history, for Marxist historiography and social science? I have been saying for a long time that international relations are a big challenge for Marxism, and this, again, goes right back to Marx’s own work. Marx never really systematically thought about international relations as a distinct object of inquiry. Of course, we can look at his journalistic writings, notes, and letters, and they are full of interesting insights on this or that contemporary international crisis, though this never crystallized into something that he took seriously, theoretically speaking. He grew more interested in international affairs during the 1850s at the time of the Crimean War, and then wrote extensively on the American Civil War, the “Eastern Question,” and India. Kevin Anderson sets this all out nicely in his book.10 But the tone was set by theCommunist Manifesto, which is full of lovely metaphors on international issues – and powerful great metaphors – but, here, the key category that is doing all the work is theworld market or “bourgeois world society.” And the world market keeps expanding, but it is expanding basically along transnational lines “creating a world after its own image.” Meaning it is, to quote, “not the heavy artillery that is battering down Chinese walls, but the cheap prices of commodities” that force all “barbarian” nations to capitulate and adopt the bourgeois mode of production. And as we all know, of course, that’s not true: in each and every case capitalism had to force its way into non-capitalist territories by state force, and normally through war – in this case the Opium Wars and the Unequal Treaties.

So, even where Marx spoke about international relations, fleetingly or in this secondary aspect, he seemed to under-problematize the effect of international relations on the course and development of capitalism. Now, The Communist Manifesto and theGerman Ideology belong of course to the early phase of Marx, still very much influenced by Adam Smith, still a very liberal conception, really, of how capitalism basically universalizes in pacific ways due to the growing division of labor, rather than in terms of geopolitics and conflictual changes in property relations. The world market appears as an agency to render multiple regions homogeneous by subjecting them to a common world market logic. So theWeltmarkt becomes his mega-subject and this suppresses how world-market pressures are mediated by states, including how affected states and social classes within them respond to the encroachment of market imperatives. How was this process managed geopolitically and how did later developers institutionalize market relations in very different ways?

So the big point is that, as we know, Marx never wrote a distinct tome on either international trade or on war and geopolitics – a tome that would have problematized the spaceless assumptions of either a stagist conception of world history or a universalizing capitalist world market. And in that sense IR – less as a discipline but more as a problematic – remains very pressing and urgent for Marxists to reappropriate, notwithstanding of course the work that was done by the classical theorists of imperialism: V. I. Lenin, Nikolai Bukharin, and to some degree Rosa Luxemburg. But there the problem was that they ended up with a functionalist and instrumentalist account of states, and many people have shown how empirically problematic it was to ground the scramble for Africa and the repartition of the world in the transition from mid-19th century competitive capitalism to turn-of-the-century monopoly capitalism.

So however powerful an intervention theories of imperialism were at the time, I think what really stands out as the most systematic attempt to conceptualize international relations can be found in the anti-Marxist – Neo-Rankean and Neo-Weberian – tradition. While this is, in the end, disappointing, it forces us to open up IR to a much more comprehensive need to rethink and to reclaim it for Marxism.

GS and AA: The recent crisis and the present-day era of austerity have led to increasing questioning about the legitimacy and viability of the EU project. There are disagreements within the new European left parties (Syriza, Podemos) about the possibility of using the EU as a political vehicle to propose progressive social reform. What is your position on this issue?

BT: The situation for a progressive left politics in Europe is invidious, yet not without hope. It seems to me that the contradictions of a progressive populism, inspired by a Laclauian reading of Carl Schmitt, that revolves around an antagonistic strategy of national mass mobilization feeding on the raw distinction between “them” and “us,” and a left-leaning European reformism are currently playing out across Europe, particularly in Greece. Tactically, it seems to me that this confrontational populism has generated a much harsher response from the Troika than ever imaginable, and we are facing a real prospect of the internal self-destruction of Syriza because of that. Worse, we may even see the right-wing coalition partner gain from this failure of Alex Tsipras’s leadership, including the possibility of a right-wing military coup in Greece. A progressive populism may be the right tactic domestically, but it is the wrong strategy in foreign policy, as it hardens divisions without any real prospect of overcoming them. I am, of course, livid with Germany’s reaction to the Greek Crisis, mounting effectively an economic occupation of Greece, an informal coup d’état, riding roughshod across all fundamental principles of the European Union and the whole drivel of European solidarity. The EU, for sure, stands exposed!

But we need to ask ourselves whether this confrontational-populist rhetoric, however much warranted on factual grounds, has not generated its own hyper-confrontational response from within the Troika, both at the political and at the public-relational level. It’s invidious, because rather than presenting the crisis as a conflict between transnational capital and transnational labor – the taxpayer – it can be discursively fabricated as an antagonism between thrifty Germans – or Northern Europeans – and slothful Greeks, rather than what it really is: European taxpayers – the lower and middle classes – bailing out European banks, investors, and public creditors who mislend in reckless ways, while fleeing Greek capital is driving up housing prices in Berlin and London. And this is not even mentioning the role of Goldman Sachs in cooking the books upon Greece’s entry into the Eurozone, massive tax-evasions by and corruption within Greece’s elite, the benefits of debt-financed investments in silly Greek infrastructural projects for European, particularly German, business, and so on.

Now, of course, EU states are locked into that arrangement and given what has happened to Greece, we see that there is not even a velvet glove around the hard fist of the German government. It is direct imposition of restructuration and adjustment programs that are not even particularly effective either; they’ve just pushed Greece and other states ever deeper into crisis without resolving their underlying debt problem in any credible way. So, populism feeds both ways, as the German press – from the Frankfurter Allgemeine Zeitung to the gutter press ofBild Zeitung and the like – is portraying this problem by playing very much on national sentiments, and that’s the wrong analytic, serving stereotypes of the worst kind, without, of course, looking at what German and French banks actually did in driving Greece and other EU states into debt – and their agency in recovering these debts through their socialization. So the European taxpayers are essentially bailing out Greece and, in the same process, bailing out German, French, and British banks. But this is not rhetorically connected to neoliberal capitalism, but to Greek laziness. Now there are forces in Germany – like the AfD [Alternative for Germany, a new Europhobic far-right conservative German party] – that capitalize on this discourse, asking for a shrinking of the EU, that just the hard core states survive in a reconstituted and fully neoliberalized Eurozone and the rest can be cut free and cut loose: a prospect that would demote the Mediterranean EU states to an unsustainable peripheral status for the foreseeable future.

So, we have reached a crisis point, but this needs to be exploited. Tactically, I would say that the argument needs to be won – won within the EU – and it can be won, given the evident facts on the ground, particularly as I am certain that there is a numerical left-of-center majority in EU states, even in Germany and France. And the demographics of the most affected – the young – could play in this direction. But left politics, to my mind, cannot rely on nationalist projects or nationalistic antagonization, but needs to build strong international alliances. This will require massive extra-parliamentarian and intra-parliamentarian mobilization, oriented towards a complete rebuilding of the EU’s institutional set-up. In this, opportunistically or abstractly calling for a break with the EU, especially in cases where such a demand is monopolized by the right and where the left possesses no coherent strategy, is a dead end. The option of strategically working through European institutions – even when these are undoubtedly undemocratic – should not, therefore, be discarded out of hand.

GS and AA: Let’s return to the work of Carl Schmitt. His thought has received increasing attention from left-wing intellectuals during the past two decades (Chantal Mouffe, Gopal Balakrishnan, Ernesto Laclau). Do you think that the contemporary intellectual and political left should engage with the dilemmas that Carl Schmitt poses? Or is this trend a sign of political defeat?

BT: Schmitt’s work is polyvalent and can be read in multiple ways. I can understand why scholars engage with his analysis and critique of U.S. imperialism, particularly in relation to his acute insights about changes in international law relating to the abolition of classical interstate warfare and its replacement by a discriminatory concept of war, humanitarian pan-interventionism, and conditional forms of liberal sovereignty stretching back to the Treaty of Versailles and the League of Nations. So, the left can certainly engage with the dilemmas he identified, but I would not recommend the political solutions he prescribed. An abstract re-assertion of the political, organized in sovereign states, or a retreat into partisan-warfare, are clearly not credible and sustainable alternatives for a left progressive politics. A left national populism, feeding on a crude distinction between “them” and “us” may be appropriate for some countries, but not for deeply integrated and small states within Europe. If anything, Schmitt advocated highly authoritarian solutions to social crises in liberal-constitutional states – in his case the Weimar crisis – premised on the invocation of the state of emergency by the state executive, suspending constitutions. Internationally, he argued for the division of the world among four or five great powers, each creating their own regional spheres of influence, what he calledGrossraeume or pan-regions.

Thus, I was surprised how uncritically he was remobilized during the last decade or so in the Anglo-American literature, including in IR, as an apparently radical and critical thinker. Now, to some degree I can see why that is the case. But there is something like a collective amnesia going on around Schmitt, and non-Germans don’t necessarily associate his thought with his role during the Nazi period, how contextually political his work was, and how complicit he was intellectually in launching a blueprint for Nazi foreign policy. His critique of U.S. imperialism does not mean that his politics has much to offer for the left – quite the contrary!

He was not one of the classical geo-politicians, but through first admiring the Monroe Doctrine in the Western hemisphere, and then resisting its inflation to global proportions through Wilsonianism, he provided essentially a template and justification for a German conquest in the East, which he portrayed as being more or less within the normal power-political logic of world history. Victorious powers basically articulate after conquests the rules for international law, so that law follows conquest, generating a “nomos” – a combination of territorial sovereignty and law. This may be an accurate, if de-sociologized, description of the relation between law and international power, but do we really want to renege on the possibility of intellectual, rather than just power-political, principles of international law and order?

So I do two things with Schmitt in my work: on the one hand I deconstruct his history of international law and order, as outlined in his Nomos of the Earth, and show how the attempt to provide an ideological counter-narrative to liberal stories of international law is actually historically defective and simply not accurate.11 And secondly, I’m trying to challenge what is a very thin theoretical vocabulary – “concrete order thinking” and his concept of the “political” (the friend/foe distinction) – that is meant to hold and to ground this historical anti-liberal counter-narrative. At the same time, I think it is symptomatic that left thinkers, includingGopal Balakrishnan and Chantal Mouffe and so on, have turned to Schmitt to provide the missing Marxist geopolitics, particularly of the interwar period.12 So, in that sense, this relates back to my earlier point: because IR is still a relative absence in the Marxist literature, people are groping around to find concepts, to find stories that could help us to make sense of the crisis of law and international order from the late 19th century onwards, through the Thirty Years Crisis, and into the 20th and early 21st century without having fully explored the intellectual architecture of Schmitt’s thought as a whole. Strange bedfellows indeed!

What I hope to have done is to show how misguided and how problematic it is to use Schmittian categories and tack them onto notions of capitalism and class conflict. Particularly because Schmitt conceived himself from the start as a decidedly anti-sociological thinker, and this connects him much more with the realist and authoritarian tradition than with anything else. Just remind yourself that his definition of sovereignty derives from political theology, the papal plenitudo potestatis and absolutism, and validates executive power as something outside and above social conflicts and social struggles. So he is attempting to isolate and insulate politics and the political from any form of social contestation and accountability. Sovereign is he who decides over the state of exception. And the invocation of his concept of the political revolves around a crude notion of volkish homogeneity driven by an existentialized politics of fear designed to drown out sociological fault-lines within socio-politically heterogeneous and class-conflict riven civil societies.

How that can be compatible with Marxism – either theoretically or politically – requires a big leap of faith because the minimum that you have to think about in relation to sovereignty is two things: first, sovereignty is a social relation. This may sound broad, but anybody who is invoking the state of exception has to have thought prior to its declaration about its likely chances of implementation. What is the social situation on the ground? What kind of resources do we actually have in place – military, political, administrative – to implement that state of exception? The state of exception is always a deeply socialized relation, quite the contrary of what Schmitt was trying to argue. Secondly, what kind of crisis calls forth the likelihood of emergency powers? Since political theology is not interested in an explanation of crisis, in contrast to historical sociology or political economy, Schmittian thinking does not provide the categories to understand socio-political crises – thus the crude relapse into an abstract notion of “the political”: primitive group-thinking of “them” versus “us.” And of course in relation to territorial conquests – land grabs – again, Schmitt held to a deeply de-socialized affirmation of a realist logic of geo-political dynamics and powers that are consciously dissociated from everything that is going on within societies. States, by nature, he insisted, expand and compete for space! So whether you go back to the discoveries of 1492 or the late 19th century period of imperial rivalry, Schmitt would always read this as an affirmation of the law of the stronger. That this is simply what states do: self-preservation through expansion, creating a nomos, rather than a cosmos or a logos.

So I keep being surprised about attempts to reappropriate particularly the historical Schmitt but also the conceptual and political Schmitt by Marxists. To me, that’s a cul-de-sac – intellectually and politically, it’s self-defeating. Yes, it is uncanny how the contemporary situation resembles the interwar crisis and Schmitt’s Weimar situation. We have a massive capitalist crisis on our hands with right-wing nationalist forces in most EU countries, absorbing social discontent, and a collapsing liberal center. To advocate in this scenario, asSteffan Wyn-Jones reminded me, a left-wing populism and nationalism that often overlaps with right-wing political recipes – even finding a temporary, if ambiguous, common ground (whether Golden Dawn in Greece, AfD in Germany, the Front National in France, or UKIP in Britain) – by invoking Schmitt seems to me disastrous. After all, National Socialism thrived on the same amalgamation of left and right motives and constituencies during its rise to power, before any dreams of populist socialism were ended in the “night of the long knives” once the Nazis were in power. It may be naïve, but a broad-based transnational alliance of progressive forces seems to me the only remotely acceptable and realistic way forward.

GS and AA: It seems that focusing on the “international” also requires us to rethink the state. Although some have done this by looking to non-Marxist thinkers, what value do you see in returning to trends within Marxism – such as the German “state debate,” which tried to pair an understanding of the form of the capitalist state with an analysis of its entanglement in relations of capitalist competition and the world-market, or the debate between Ralph Miliband and Nicos Poulantazs, which in part tried to connect a theory of the state to questions of revolutionary strategy and organization? How might these currents of specifically Marxist state theory help us think about the “international” today? And conversely, how might your renewed attention on the “international” help us better understand state power and political strategy?

BT: The notion of ‘the international’ is, for me, a troubling invention that keeps buying into the same language of tragic necessity and timeless imperatives advocated by Realists and Neo-realists in IR. I suggest replacing it with an awareness of how differently political geography and relations between polities were organised historically. Otherwise, we keep on thinking under the sway of a static mega-abstraction that cannot be removed. It freezes creative thought and progressive strategies for emancipatory change and action. That is way history matters. It is, for example, not true - or, at least: one-sided - to say that revolutionary states, whatever there internal make-up and foreign policy strategies, become over time socialised into the conventions of its surrounding state-system, characterised by the remorseless logic of power politics and self-help, as Neorealist keep on saying and as Neo-Weberian historical sociologists, like Theda Skocpol argue, when she looked at the French, Russian, and Iranian cases. It is truer to the historical record to say that revolutionary states, 17th century Britain, 18th century France and the US, the 20th century Soviet Union, and, perhaps, even contemporary Germany, have fundamentally changed the ‘rules of the game’ in which international politics is being played out. This lead also, in many cases, to domestic adaptations to the innovations - constitutionally, militarily, strategically, financially, socially - that revolutionary states pioneered without creating exact replicas. This is not an argument for the pacific character of foreign policies of liberal or socialist states, or a general teleological argument about ‘progress’ in world history, but much more an argument about the variability of foreign policies and strategies of conflict and co-operation that cannot be derived from either systemic inter-state logics or domestic ‘modes of production’. Why does the US pursue multilateral hegemony after WWII, rather than either isolationism or imperialism, when it did the former in the interwar period and the latter under Theodore Roosevelt? Can we answer this with reference to either inter-state imperatives or the logic of capital? Why did early 18th Century Britain adopt balancing and non-intervention versus the Continent and imperial expansion overseas, rather than merely power politics and imperialism in all theatres simultaneously? Why does contemporary Germany pursue regional hegemony within a framework of multilateral atlanticism, rather than resorting to regional autarchy designs?  Capitalism and the inter-state order may, but only may, provide certain pressures, but the answers states develop to cope with these pressures, an essential PM argument, cannot be ‘derived’ from these contexts. What, then, is logically or conceptually a distinctly capitalist state and capitalist foreign policy - outside history?

It seems to me that it is precisely this kind of argument that makes me sceptical towards the German State Derivation School that developed in the 1970s. If I recall correctly, Staatsableiter, tried to make logical arguments about how the ‘bourgeois state form’ and ‘bourgeois law’ and its functions were a necessary result of the requirements of the capitalist mode of production, or even commodity-exchange. Its ‘relative autonomy’ - the fact that the ruling class did not rule - concealed the fact that it had to carry out structurally, but not instrumentally, the requirements of capital accumulation. Relative autonomy was derived from the idea that the state functioned in the general interest of capital to co-ordinate the will of may capitals. While ‘relative autonomy’ was conceded, the state was not neutral, but did structurally the bidding for general capitalist reproduction. This debate was not only highly abstract and theoreticist, I found it always deeply un-historical and un-specific, as arguments were made about the ‘capitalist state’ in the abstract and in general. Heide Gerstenberger’s writings provided for me better insights into the historical origins and growth of the ‘bourgeois state’ as tied up with specific social and political conflicts, showing its diverse ‘manifestations’ and trajectories, even though she largely excised the foreign policy dimension from her studies. And this neglect of foreign policy was also prevalent in the Marxist debates of the 1970s.

GS and AA: What do you see as the limits of traditional Marxist theories of imperialism, and how might your work allow us to rethink the history of imperialism, especially imperialism today?

BT: I’ve already mentioned that traditional Marxist theories of imperialism were already problematic at the time, mainly because they over-generalised across the key capitalist states that composed the inter-state system during the belle époque, and provided structuralist-functionalist explanations of state policy and international politics. They assumed an immediate identity between state and monopoly-capital. Specific ‘stages’ of capitalism, in this case: monopoly capitalism, were regarded as providing the deep explanation for how international relations, in this case: inter-capitalist rivalry and the descent into World War I, played out. Different state strategies of how to organise international relations, and diplomacy did not matter! Yet, Marxist theories of imperialism remain admirable in so far as they, for the first time, forced people to think more systematically about foreign policy influences other than those that were identified either with a reified state rationality and the primacy of foreign policy, or primitive relapses into biological analogies which saw states, from the late 19th century onwards, being trapped into neo-Darwinian zero-sum struggles of survival on a territorially finite planet in which Lebensraum was at a premium. This kind of thinking was not only confined to Germany, in which Friedrich Ratzel’s political geography and Karl Haushofer’s Geopolitik became dominant, but also alive in the UK, where the former director of the LSE, a geographer, called Halford Mackinder, wrote in 1904 an influential article called ‘The Geographical Pivot of History’, whose heartland theory informed British geopolitical strategy and the declining Empire. Similar things happened in the US through Admiral Thayer Mahan’s navalism and the strategic primacy of sea power. Rudolf Kjellen, who coined the term ‘geopolitics’, was a Swedish political scientist. Italy and Japan had their own designs for supra-national regional order.

To me, as I said, there is no way back to a Neo-Leninist or a Neo-Kautskyan analysis, even if reformulated in terms of two ‘logics of power’ - one reifying state power and territorialism, the other reifying capitalism and de-territorialisations - to understand the historically diverse ways in which ‘the spaces of capital accumulation’ were constructed and connect to concerns about state security. In the Marxist discourse we see the return to arguments about deep logics emanating from capitalist ‘requirements’ and ‘imperatives’ from which ‘foreign policy’ is simply ‘derived’. This also leads to conceptual over-stretch, where notions of imperialism, whether formal or informal, abound rather indiscriminately. Are the Iraq and Afghanistan fiascos imperialistic in the way the late 19th century scramble for Africa or the Vietnam disaster was? Obviously not! It is hard to formalise some essence of how a Marxist analysis of geopolitics is supposed to look, but the first requirement is to get away from the structuralist-functionalist trap by focussing on the processes of foreign strategy formation and the often unattended outcomes of these strategies, as we have seen in the Middle East, where democracy and the ‘rule of law’ did not mushroom miraculously as soon as the dictators were removed, as the Neo-Conservatives believed, but rather lead to state failures, displacements, migrations, and the regrouping of terrorists on a transitional basis, that is now stronger as before ‘the war on terror’. One good example of how to conduct such an analysis is Neil Smith’s study ‘American Empire’ that shows in much more detail how strategy and policy are being shaped by planners - the figure of Isaiah Bowman stands at the centre - in ways that are actually much less ‘planned’ and ‘coherent’ then we tend to assume when we re-impose in hindsight certain ‘logics’ that are simply carried out as if politicians merely enact a predetermined script. Is this still Marxist? I would say, yes, and I would like to refer the reader back to Marx’s critique in the Grundrisse of abstract and generalising thinking sub specie aeternitatis in favour of identifying and reconstructing sui generis cases. It is this procedure of conducting empirically rich and case-specific inquiries, immune to generalisations and logics, that I think reconnects back to my reading of Political Marxism - or Geopolitical Marxism - so as to recover the efficacy of multiple agents in the shaping of foreign policy and the unpredictable responses it provokes by other countries.

GS and AA: How do we explain the resurgence of right-wing nationalisms in Europe and the United States, but also other parts of the world? The matter of international trade and interstate competition is crucial here, with many parties and movements positioning themselves according to anti-globalist or pro-globalist stances.

BT: It is clear that the term globalisation was always an ideological construction that suppressed the differential social consequences of liberalisation and neo-liberalism in distinct regional and national locales. As even neoliberals admit now, there are a few winners and many more losers, within and between capitalist states. We are facing obscene levels of wealth and income inequalities and life-chances, especially amongst the younger generations, corruption and fraud on a gargantuan scale from Brazil to Turkey, Spain to Greece, and also within the capitalist core, the destruction of the welfare state, wage repression for most, and the accentuation of precarious working conditions. In the process, the Middle Classes that provided the social bedrock for the post-WWII consensus, are almost everywhere squeezed in OECD countries. Additionally, there is a wide-spread feeling that the bankers and their ‘neo-liberal policy experts’ that caused the financial crisis of 2008 got largely away with impunity and keep preaching the same failed remedies while lining their pockets: more easy credit, a loose monetary policy and liquidity, which simultaneously erodes and depletes the savings of the populace, while Tax Havens proliferate. As a result, representative democracy is often regarded as powerless by disaffected and alienated voters, and societies are deeply polarised. In this context, leftwing and rightwing protest against the establishment and elites is susceptible to populist and nationalist options. As I mentioned earlier, the left is ill-advised to follow a nationalist strategy, as this risks being swallowed by neo-nationalistic movements. The choice is not between a retreat into anti-globalisation and neo-liberal pro-globalisation, but between regressive nationalisms and progressive internationalism. This requires something like a regional and, perhaps, global ‘New Deal’. We had this before, so why not now? Yes, social democracy, welfarism, and ‘embedded liberalism’ was admittedly learned the hard way after two World Wars and arguably only possible in the presence of a radical alternative, the Soviet Union. The world-historical context today is different, but if political leadership, concerted and international, flanked by mass protest, is to mean anything, then we require this now! Anybody can see the likely international consequences if we keep spiralling towards a new Weimar Situation, which will seal the decline of the West.

1. See Hans-Ulrich Wehler, The German Empire, 1871-1918 (Dover, NH: Berg Publishers, 1985).

2. David Blackbourn and Geoff Eley, The Peculiarities of German History: Bourgeois Society and Politics in Nineteenth-Century Germany (Oxford: Oxford University Press, 1984).

3. The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-industrial Europe, ed. T.H. Ashton and C.H.E. Philbin (Cambridge: Cambridge University Press, 1987); Ellen Meiksins Wood, “Marxism and the Course of History I/147 (September-October, 1984): 95-107.

4. Cf. Charles Post, The American Road to Capitalism: Studies in Class Structure, Economic Development and Political Conflict 1620-1877 (Leiden: Brill, 2011); Viviek Chibber, Postcolonial Theory and the Specter of Capital (London: Verso, 2013).

5. See Justin Rosenberg, “The ‘Philosophical Premises’ of Uneven and Combined Development,” Review of International Studies 39, no. 3 (2013): 569-97; also his “Uneven and Combined Development: Theorizing the “International” in Theory and History,” inHistorical Sociology and World History: Uneven and Combined Developed in the Longue Durée, ed. Alexander Anievas and Kamran Matin (Lanham: Rowman & Littlefield International, 2016). For a detailed discussion, see Benno Teschke, “IR Theory, Historical Materialism, and the False Promise of International HistoricalSociology,” Spectrum: Journal of Global Studies, 6, no. 1 (2014): 1-66.

6. Daniel A. Baugh, “Great Britain’s ‘Blue-Water’ Policy, 1689-1815,” The International History Review 10 no. 1 (February 1988): 33-58.

7. Robert Brenner, “The Social Basis of Economic Development, in Analytical Marxism, ed. John Roemer (Cambridge: Cambridge University Press, 1985), 23-53.

8. Ellen Meiksins Wood, “The Separation of the Economic and the Political in Capitalism,”New Left ReviewI/127 (May-June 1981).

9. See Karl Marx, Capital, Volume One, trans. Ben Fowkes (London: Penguin, 1976), 92.

10. Kevin Anderson, Marx at the Margins: On Nationalism, Ethnicity, and Non-Western Societies (Chicago: University of Chicago Press, 2010).

11. See Carl Schmitt, The Nomos of the Earth in the International Law of the Jus Publicum Europaeum, trans. G.L. Ulmen (Candor, NY: Telos Press, 2006). For criticisms, cf. Benno Teschke, “Decisions and Indecisions: Political and Intellectual Receptions of Carl Schmitt,”New Left Review II/67 (January-February 2011); and Teschke, “‘The Fetish of Geopolitics; Reply to Gopal Balakrishnan,”New Left Review II/69 (May-June 2011); and finally, Teschke, “Fatal Attraction: A Critique of Carl Schmitt’s International Political and Legal Theory,”International Theory 3 no. 2 (2011); 179-227.

12. Cf. Gopal Balakrishnan, The Enemy: An Intellectual Portrait of Carl Schmitt (London: Verso, 2002), and his “The Geopolitics of Separation: Response to Teschke’s ‘Decisions and Indecisions,’” New Left Review II/68 (March-April 2011); Chantal Mouffe,The Return of the Political (London: Verso, 1993).

The following interview was originally published by Viewpoint Magazine on 18 August 2016, and was conducted by George Souvlis and Aurélie Andry in 2015.

_{Benno Teschke is a Reader in International Relations at the University of Sussex and author of The Myth of 1648: Class, Geopolitics and the Making of Modern International Relations, about the relationship between Marxism and international relations theory. As one of the founders of theHistorical Materialism journal, he has also contributed to its pages with a piece in 2005 on ‘Bourgeois Revolution, State-Formation and the Absence of the International'. He discusses here his intellectual journey, the problems generated by the lack of a coherent Marxist theory of international relations, his work developing Political Marxism - theoretically and as aresearch group at the University of Sussex - as well as his work on Carl Schmitt and various contemporary issues. Please note the interview was conducted before the UK's referendum on its membership to the European Union.}

George Souvlis and Aurélie Andry: How would you situate your trajectory in the broader intellectual and political contexts of West Germany?

Benno Teschke: I went to a Franciscan Gymnasium in small-town Western Germany and when you were born, like me, in the late 1960s and had some left-leaning inclinations, your intellectual formation and path to Marxism was likely to be strongly influenced by the Frankfurt School – as it was in my case. It was actually the works of the earlier Frankfurt School that fascinated me, the books that were more historically and sociologically grounded doing more political analysis as classically understood rather than philosophy or cultural theory: partly Franz Neumann and Otto Kirchheimer on fascism, and partly Jürgen Habermas’s early work on The Structural Transformation of the Public Sphere, even though I grew very quickly dissatisfied with Habermas’s later work. To sustain and deepen my interests in political economy and historical sociology I turned then more directly to Marx’s own work, but always felt that the theoretical structure of Das Kapital – the historical chapters apart – and the body of literature that goes by the name of Kapital-Logik or, more recently, the “New Dialectics,” remained ultimately sterile – an exercise in dialectical abstractions of a purely conceptual nature that had left real history largely behind. Still, the engagement with the Frankfurt School and Western Marxism more broadly left me with strong anti-positivistic convictions and, if you want, a dialectical sensitivity as to my conception of the conduct of social science.

Substantively, much of the academic debate in Western Germany – on the left and on the right – was still transfixed on the German catastrophe and the Holocaust, and this became also my first intellectual “problematic.” But rather than looking at the culture industry or grand philosophical narratives of the “Dialectic of the Enlightenment,” I felt initially more drawn towards the left-liberal Bielefeld School – people like Hans-Ulrich Wehler and Jürgen Kocka – who grounded the Nazi experience in Germany’s peculiar long-term trajectory of socio-economic development and state-formation, anchoring its deviance from presumed Western European standard paths in the “failed” 1848 “bourgeois revolution.”1 The debate in the late 1980s between them and David Blackbourn and Geoff Eley’s position set out in The Peculiarities of German History caught my interest and convinced me of the virtues of social history and historical sociology.2 Against this narrative, more conservative Neo-Rankeans kept insisting on Prussia-Germany’s unique geographical position in the middle of Europe, which allegedly forced a repressive authoritarianism domestically and an aggressive militarism abroad. In other words, a deep ideological gulf opened up in this debate between social historians who kept restricting their explanatory focus to the primacy of domestic social relations and more traditional historians who kept insisting on the autonomy of the political, the primacy of foreign policy, and ‘high politics’ – a tradition that retained echoes not only of Leopold von Ranke’s conception of world history as the rivalry between great powers, but also the more sinister and intellectually degraded tradition of German Geopolitik, from Ratzel to Haushofer.  Still, I found this divide between internalists and externalists always forced and unproductive, mapping onto normative-political predispositions rather than tackling the problem head-on. This was a strong bulwark against the ideological gulfs and limited points of emphasis affecting social historians at the time – divisions over the primacy of domestic relations or the primacy of foreign policy – and led me to ask what Marx and the wider Marxist tradition had to say about political geography and international relations so that external relations could be internalized into a revised Marxist perspective.

In this context – we are approaching the early 1990s – I became more and more aware that there was no distinct tradition of historical sociology left in Western Germany, broadly defined, that could re-inform Marxism, partly because many Weimar historical sociologists had emigrated, and perhaps partly because this genre of scholarship had become discredited by the more orthodox East-German literature. This was a very peculiar phenomenon, really, given that sociology, historical sociology, is par excellence basically a German invention, deriving its greatest impulses from the great German and Austrian classics: from the German Historical School and the Methodenstreit of the 1880s to Weber, Schumpeter and Polanyi, and of course Marx and Engels themselves. That discourse, in a way, had with very few exceptions – Heide Gerstenberger’s work springs to mind – migrated outside of Germany by the late 1980s, early 1990s. Simultaneously, I was struck when I studied in the 1990s in France and Britain that the very same academic register that was on the verge of extinction in Germany was here fully alive – in France through the Annales School (Marc Bloch and Fernand Braudel) and in Britain through the great Marxist historians (Eric Hobsbawm, E.P. Thompson, Perry Anderson, etc.). In fact, the discipline of historical sociology had been revived and rehabilitated in Anglo-American academia, if decidedly in a non-Marxist fashion, during the 1980s and 1990s in the writings of Charles Tilly, Theda Skocpol, and Michael Mann. So, I would say that by the early 1990s a certain problematic was starting to crystallize which I would broadly call a search for a Marxist international historical sociology. I was looking for something like that.

While I was doing my doctoral work in the Department of International Relations at the LSE to pursue this theme, I came across the work of Robert Brenner and Ellen Meiksins Wood and in many ways this was an inspiration. I consider this literature a real breakthrough, in particular the “Transition Debate” on the rise of capitalism in late medieval England, because I think that it is rare to find Marxists that really step outside their comfort zones, outside the core categories and assumptions which derive often from more or less deeply held orthodox convictions, and to engage history in open-minded, innovative and rigorous ways by taking historiographical research seriously.3 I wanted to see how I could use Brenner’s work in order to think through and further historicize political geography and international relations. So I think that is essentially what brought me to my own work, i.e. drawing out the implications of the “Transition Debate” for historicizing international relations and developing Political Marxism for International Historical Sociology in the process.

GS and AA: You are one of the main initiators of the Political Marxism Research Group at the University of Sussex. What are the aims of this research group and how do you position yourselves in relation to the tradition of Political Marxism?

BT: The aim of the Political Marxism Working Group is to provide a platform to not only passively rely on the first generation of Political Marxists, but also to try to develop the research program and theoretical commitments in new directions and in productive ways.

One problem that distinguishes different tendencies within Political Marxism – what may be called PM 1 and PM 2 – is the need to explore the unresolved tension between a residual structuralism encapsulated in the category of social property relations and its logically derived “rules of reproduction,” and the simultaneous adherence to a strong historicism, which centers social conflict, class agency, and unintended consequences. Samuel Knafo and I speak to this problem in our paper, “The Rules of Reproduction of Capitalism: A Historicist Critique.” This tension, we think, has led over time to an ideal-typified conception of capitalism in PM 1, defined as “market-dependency,” in which market imperatives seem to prescribe and auto-generate class agency – a reading also present in Charles Post and Vivek Chibbers’s work.4

Overcoming this relapse into a functionalist conception of class agency and an economistic understanding of the operation of capitalism (even when grounded in a distinct set of capitalist social property relations) requires what we call a stronger commitment to a radical historicism. This foregrounds agency, situated and contextualized, at all levels to retrieve a sense of the more open-ended conflicts and institutional innovations that characterize diverse trajectories of capitalism. The elementary insight is simple: if capitalism is conceived as a politically contested social relation, then we cannot conceptualize agents as acting out a pre-ordained script or logic. We need to turn our thinking around and establish what people do in the face of “imperatives” or pressures to pinpoint the difference they make as they go along reproducing themselves – often innovating in the process. We cannot conceive of agents as passive rule-followers, but as actively devising strategies of reproduction in specific contexts.

The problem, in other words, is how to conceive of capitalism not as a theoretically closed category, but as a historically open praxis. This requires a move away from general model-building towards historical specification. For me, this pertains particularly to the issue of developing an approach to IR that does not subsume foreign policy making and diplomacy under wider structural and systemic pressures, whether grounded in reified “logics” of capitalism or reified “logics” of state rationality, but that accords efficacy to political agency on its own terms. This is not to argue for some radical state autonomy, but to take seriously the fact that agency can rarely be fully resolved back into contextual imperatives or antecedent conditions, as people tend to innovate in unpredictable ways to respond to, circumvent, and escape from such pressures. History is then not conceived as a manifestation of overarching logics or laws – a secondary register meant to confirm aprioristic abstractions and pre-conceived axioms – but itself the first-order terrain of inquiry, as people make their own history.

This type of thinking is also distinct from David Harvey’s Marxist geography, which ultimately grounds the dynamics of “capital outbound” in deeply rooted systemic pressures, which require “spatial fixes” at the infra-structural level and successive rounds of “accumulation by dispossession.” But this is essentially an economistic and totalizing conception of the transnationalization of capitalism without international politics, which is then re-captured ex post through the problematic and reified addition of a logic of power, apparently pursued by state-managers. Immanuel Wallerstein’s world-system theory, at least when it was initially formed, is another example of subjecting history to grand cycles – the cycles of hegemony – and the systemic pressures of the relations between core, semi-peripheral and peripheral states. Rosenberg’s current work, in turn, seems to embrace a positivistic and nomological conception of uneven and combined development as yet another overarching master concept and covering law for world history as a whole.5 Here, history and agency are ultimately downgraded to manifestations of a subjectless law that imposes its imperatives regardless of what people do, so that history is slotted into a few a priori omnibus categories.

I will add that Classical Marxist theories of imperialism also fell into the structural-functionalist trap, as monopoly capitalism was conceived as a system-wide stage, at least in the core European capitalist countries, which imposed its requirements on states and their foreign policies. This drastically reduced the efficacy of diplomacy and the active conduct of international politics. These theories all suffer from advancing theories of international relations without international politics and, what I come think is key, the active formulation of “grand strategies” that tell us much more about the link between domestic politics and foreign policy formation – and, ultimately, international ordering. It is this commitment to an anti-formalistic radical historicism that, to my mind, is the differentia specifica of our understanding of Political Marxism.

So, this is essentially our goal: trying to go beyond the original “Transition Debate” to more fully historicize capitalism and “capitalist” international relations. I am looking now more at what I want to call the political geographies of historical capitalism: how you can think about foreign policy informed by a PM approach, emphasizing the unilateral or multilateral construction and clashes of state strategies, whose interactions often lead to unintended consequences. What I have in mind here is to take seriously the fact that the historical record of “capitalist” foreign policy – the structuring and management of spaces of capital – is so incredibly diverse: from the Peace of Utrecht that left a specific political geography on the Continent regulated by British power-balancing, via the Vienna Settlement and the Concert of Europe, the construction of the Western Hemisphere through the Monroe Doctrine, formal and informal imperialisms in the late 19th century, the American interwar strategy to break up the old empires and replace them at Versailles by pushing mini-state proliferations through the principle of “national self-determination,” based on liberal and republican state forms and tied into notions of collective security, German and Japanese notions of autarchic regional orders – Carl Schmitt’s “greater spaces” – to US hegemony and the European Integration Project. The political geographies of historical capitalism cannot be derived from a particular “logic of capital,” either with recourse to the generic concept itself, or particular phases of capitalist development, but require a much more fine-tuned historicist approach that emphasizes their construction – rather than subsumption under some sub specie aeternitatis principle – be it the classical IR trope of power politics and states as security accumulators in a condition of anarchy or the classical Marxist trope of capitalist geopolitics. For what is a capitalist foreign policy supposed to be, in the abstract? So we are broadening out into other fields, into other areas while trying to theoretically refine or reformulate the early brilliant, but theoretically somewhat problematic, work of Brenner and Wood.

GS and AA: Can you explain the argument of your work, The Myth of 1648, and how it challenges the reification of the Treaty of Westphalia as the founding moment of modern international relations? If Westphalia was not the founding moment of modern international relations, what does that imply in political and historical terms? What were some of the criticisms you received?

BT: This work came at a very propitious moment, speaking to the “historical and post-positivistic turns” in the field of IR, which, as mentioned, was at the time a very an unusual academic discipline, and very much focused on the United States. It provided – and still does in the U.S. and elsewhere – essentially strategic advice for the powers that be: advice for the Prince on matters of statecraft, or Herrschaftswissen (knowledge of domination) as Frankfurt School theorists would call it. Here was a whole field of academic inquiry that makes no bones about being directly subservient to state power, in which scholars moved effortlessly between university departments, think tanks, and governmental positions – all united in suggesting ways of how the United States could maintain or enhance its position at the apex of the interstate hierarchy – whether through conflict or cooperation. The result was an intellectual shallowness that struck me from the start as scandalously out of sync with all the standards of social-scientific and historiographical inquiry.

In retrospect, I would say that I started the project with three big questions in mind: First, how could I show the historicity of political geography, the polities that compose geopolitical orders, and their “international relations” by grounding this in contested social relations? Hence the return to medieval history. This was designed to dislodge the prevailing state-centrism and historically incredibly myopic and misleading attempts of transhistorical general-theory-building in mainstream Anglo-American IR, built around anarchy, power-maximization, and power-balancing, as if foreign policy had been played out since time immemorial according to the same tune.

Second, why – and this is a more genuinely interesting question – does capitalism exist within a system of plural states and what is the historical relation between the two? This was designed to query and destabilize the assumption, held for example by Wallerstein’s World-Systems-Theory, that the interstate system, the multiple political jurisdiction that splinter a capitalist space co-extensive with the world-market, is somehow the “natural” or “necessary” (geo-)political form of capitalism, causally connected to capitalist requirements – hence the need to go back to the Carolingian Empire and to track the changing political geographies of medieval and early modern Europe. The aim was to show the socio-political and geopolitical construction of the interstate system during the absolutist-dynastic period as a historical outcome, preceding the rise of capitalism.

Third, what effect had the rise of capitalism in early modern England, as set out by Brenner, on British state-formation and grand strategy for the ordering and, ultimately, transformation of pre-capitalist geopolitical relations in the rest of the world? In a sense, 1648 was a casualty of this research program, and not the prime target – partly because it seemed obvious to me that anybody semi-literate in early modern history and peace treaties would not take IR’s claims on the Westphalian Settlement’s “modernity” seriously – though it turned out that I had underestimated how deeply ingrained this idée fixe was in the collective disciplinary mindset. So, The Myth of 1648 and the subsequent Deutscher Memorial Lecture had a wide reception, inside and outside IR, and inside and outside Marxism.

The response from within the field of IR centered less on these analytical questions – which were more productively taken up from within the Marxist discourse – and more on the revision of the status of 1648. While few quibbled with the empirical veracity of my interpretation of the Settlement, three standard responses emerged, apart from those, very few, that understood my account as a plausible alternative theorization.

The normal tactical move was first to say that while the notion of “Westphalia” was indeed widely accepted as a starting point for modern international relations, it was never meant to be a serious historiographical thesis in IR as a scientific field. The anarchy-assumption associated with Westphalia was just a convenient Political Science model, whose historical veracity is really by the by. It is just a model of how to visualize interstate relations in an anarchical environment. The reasoning was that there is no need to worry much about the specific origins of the interstate order, as history was in IR a secondary concern that can be neglected.

The second answer was that there was some truth to my argumentation but that IR had never really maintained that the modern interstate system fell overnight fully-fledged from the sky, that it was suddenly institutionalized after the Thirty Years’ War, so that 1648 was a mere stepping-stone in a much longer and drawn-out gradual process..

The third response, coming often from post-structuralists, was to say maybe you are right, but it is still a myth, a discursive myth, and thus still a powerful performative discourse constitutive not only for the discipline but also for reality to the degree that policy makers more or less use Westphalia as a rhetorical device or performative praxis, so that the idea has taken on a historical efficacy of its own. And in that sense 1648 still needs to be taken seriously. This kind of argument is, of course in a way true – if people start believing in false claims then they become ideology. But this does not really constitute an account οf how else to think about Westphalia, especially from a critical point of view.

GS and AA: How do you now assess the general effects of this work and your historical approach for understanding capitalist international relations? How has it affected the course of your current research?

BT: Ultimately, the debate over identifying a determinate moment in time – a system-wide tipping-point for the arrival of modern or capitalist interstate relations – leads into an intellectual impasse, charged with teleological assumptions. The historical implication of my research is simply that the search for sudden “systemic” changes across international orders is futile. It grates with the idea of history as a process allergic to system-wide periodizations of clear-cut “befores” and “afters,” given different temporalities of development in different regions. It also imputes that we know what “modern” or “capitalist” international relations are supposed to look like, once that imaginary threshold had been crossed. We don’t! What does it mean to say this or that is a distinctly capitalist foreign policy, if capitalist foreign policies take on distinct forms in concrete cases? As we know, these can range from defensive postures, to alliance-formations and concert-systems, formal to informal imperialism, attempts to establish distinct regional spheres of influence, as for example institutionalized in the U.S. Monroe Doctrine or fascist Grossraum-building, to types of quasi-consensual hegemony, decolonization, or regional integration, as in the case of the EU. Nobody in his or her right mind could deny that capital accumulation is a powerful motive in the foreign policy calculations of capitalist states, but this doesn’t tell us much about the specific construction of specific foreign policy strategies, political geographies, and their chances of realization.

The whole point of my argument is less about finding a moment in time where modern or capitalist international relations were enacted, but to think a little bit more about the variability in the construction of foreign policy strategies for the geopolitical management of interstate relations over time, even within a capitalist context. Now, this type of historicism is often quickly dismissed by more positivistically-minded IR theorists who equate IR as a social science with a conception of theory that validates determinisms and generalizations, so that my work is sometimes referred to as belonging more to historiography or to interpretation or to something else. My epistemological strategy is then downplayed and downgraded as something that it is not scientific, maybe constructivist, interpretivist, or hermeneutic or so but considered as being outside the essential field definition of IR – and this comes also from Marxists who assign structural efficacy to capitalism and its expansionary tendencies. But the key point for me is simply to keep demonstrating that it is misleading to center a preconceived and ideal-typified notion of capitalism as being structurally efficacious for international relations in deterministic ways. Rather what we need to do is to constantly historicize and when we do that we will start to see that the link, the mediation between the presence of capitalism and foreign policy formation is very variegated, often indeterminate, not only in terms of foreign policy formation, but also in terms of political geography as such. So, this is to react against the common idea that we have to start from firm axioms or firm expectations derived from capitalism’s systemic pressures.

I say that somewhere in the early work of mine where I suggest that from the 17th century onwards capitalism emerged and started to expand, but not as an organic process that could be rigorously theorized. Rather, what we see is an incredible diversity in the construction of foreign policies and spatial orders from the early 18th century onwards up to now. So this formative period is looking obviously very different from the early 19th century after the enactment of the institutional, geographical and practical innovations in international relations – the Concert System and the “Holy Alliance” after the Napoleonic Wars in the Vienna Congress, in which, incidentally, Britain was unable and unwilling to impose anything like the hegemonic designs theorized by Neo-Gramscians in relation to continental Europe; and this looks again very differently from the establishment of the more formalized alliance-systems and power-balancing after the turn of the century in the run-up to World War I. Post-1945 United States hegemony is again a very, very different way to order capitalist interstate relations, then post-9/11 relation, and so on and so forth. We all know this, of course, but Marxists still want to reduce this often to either some essence of capitalism or some stage of capitalism or some other grand explanatory formula. I think the historical record just shows how problematic is to do a shortcut between capitalism, a particular type of foreign policy, and a particular type of geopolitical order. So, in short, I mean the research program that derives from this conception is to do much more detailed work, historiographical work.

What I am doing right now is to look at the Peace Treaty of Utrecht, which sounds again very antiquarian, but this was a big peace settlement, much under-studied in IR, that concluded the Spanish Wars of Succession in 1713 and changed the rules of the game. It is significant for me because Utrecht allows me to draw out the distinctions between the old regime character of 1648 and the first attempt by post-1688 Britain to develop a new and very distinct type of grand strategy, call it capitalist if you want, precisely without promoting capitalism on the Continent. So, after the Glorious Revolution in 1688, Britain starts to make its distinct foreign policy designs felt internationally, enforced and accepted multilaterally at Utrecht. What is innovative here, a point alluded to at the end of my book, but now fleshed out much more clearly, is that Britain developed a new and unique institutional basis for conducting foreign policy, as foreign policy is henceforth answerable to Parliament. This allows for the articulation of foreign policy in terms of a much more sober and secular calculus of the “national interest,” no longer connected to the whims of the Kabinettspolitik of absolutist rulers. This involves the attempt to re-order European political geography in line with British security interests and, on that new geographical basis, to engage in power balancing to avoid the re-emergence of a continental hegemonic rival.

Power-balancing is therefore not a law of world politics, but a very specific conscious practice – a conscious construction of a grand strategy developed by situated actors. Daniel Baugh wrote in the 1980s a great article on this, showing the emergence of the “blue-water strategy,” which had a dual aspect: the establishment of unilateral maritime-commercial supremacy overseas, while being much more defensive in relation to Europe.6 But this was not a functional outcome of a capitalist constitutional monarchy in which sovereignty lay now with Parliament, but required the construction of a very specific wartime strategy and peace plan contested between the Whigs and the Tories, enacted at Utrecht, and negotiated with other peace parties. So, if you push this kind of work conceptually then you start very quickly to realize that notions like “modern” in international relations do not mean much, they do not give you much, because they imply commonalities, rather than differences. The rise of capitalism in Britain and how this led to new foreign policy ventures and, later, the transformation of European and overseas politics is certainly not a patternless process, but these broad patterns themselves do not give you much in terms of the way that state politicians actually innovate at the foreign policy level. So history is a process – an interactive construction that is the obvious point, the big point that I would like to make against any temptation of relapsing into structural explanations.

GS and AA: Could you explain how your work shows how Marxist theory, and in particular the Political Marxist notion of “social property relations,” can help challenge and redefine some of the core assumptions of IR theory and historical sociology? Do you think that, vice versa, IR can be used to help improving Marxist theory?

BT: You have to understand that mainstream Anglo-American IR was, until very recently, built on the assumption that theorizing departs from the existence of the interstate system as a natural given, rather than something that requires explanation in the first place. It posits the political as an autonomous sphere in which states are generically endowed with a unitary rationality and ascribed certain attributes, foremost survival, security, and hence power-maximization. Once these axioms are in place, you can then establish by means of a series of logical deductions how rational state action in a condition of international anarchy leads to certain likely outcomes, including power-balancing, leading to some kind of self-equilibrating systemic logic. This is a nice little exercise in abstract logic, actually modeled, by Kenneth Waltz, in analogy to the workings of the anarchy of competitive markets self-regulated by the invisible hand. It is also said to be grounded in ancient wisdoms – si vis pacem para bellum – but bears hardly any relation to reality. So the works of Hans Morgenthau and later of Kenneth Waltz are really premised on drawing an analytical Rubicon between the state and systemic interstate relations and anything that goes on within societies within these states. So the domestic and the social are excised from the remit of what could count as possible influences on statecraft and foreign policy – party politics, business and sector interests, social crises and so on.

This is of course an incredibly narrow, impoverished and ideological way to think about international relations as a social science. More interesting than criticizing these kinds of model-building, which is often peddled as “hard science,” is the intellectual genealogy that transposed right-wing and statist Weimar thinking, often through German scholars, to the post-WWII and early Cold War US-American scene, displacing an older “liberal” approach to IR associated with Wilsonianism. Morgenthau, for example, was not only influenced by Max Weber but also by Carl Schmitt’s concept of the political, which conceives of the political as an autonomous sphere, activated by “us” versus “them” binaries. This was not so much a reference to Schmitt’s definition of sovereignty in terms of who holds the power to declare state emergencies that suspend the routine workings of parliamentary sovereignty in liberal polities, but rather to his infamous idea that a different, purely political, logic kicks in as soon as certain pre-political differences reach a state of intensity that have a potentially lethal antagonistic quality. Apparently, Morgenthau advised Schmitt to insert this idea of “intensification” of non-political issues into his tract on Der Begriff des Politischen. So, a conservative and semi-fascist notion of the political, forged in the Weimar situation to quarantine class conflict, was transposed into an altered US context, now characterized by a Cold War logic.

Today, the field of IR is, of course, much richer, especially outside the United States, but it is hard to dislodge the prevalence of Realism, Neo-realism and what is called Neo-liberal Institutionalism – another version of rationalist thinking about strategic state behavior. So, these traditions were directly targeted by my book by bringing historical sociology back.

Historical sociology, in turn, is dominated by Neo-Weberianism and the tautological argument that “war-made-states and states-made-war” – and this is the prevailing consensus as to how the modern state and the interstate system at large emerged in early modern Europe. Many historians use John Brewer’s notion of the “fiscal-military state” that rationalizes state structures to procure state revenues to conduct war to say the same thing. Very few people connect these developments with changes in social relations, and, in particular, with how social conflict, in spite of similar military rivalries, diverted trajectories of state-building into differential directions – absolutism, constitutional monarchies, republics, etc. This is why Brenner’s work was so seminal for me.

I would, today, stress though, as I said earlier, that I no longer fully subscribe to the concept of “social property relations,” at least in the way it is stylized in more rigorous analytical fashion by Brenner. Brenner suggested that property relations generate – almost auto-generate – determinate rules of reproduction on both sides of the class relation, whether in feudal or capitalist “societies.”7These then lead either to “non-development” in feudal society or “development” in capitalist societies. This was useful to draw the contrast, starkly, between two different sets of social relations for analytical purposes, but this conception also relapses into reifications and rigidities that do not square with the historical record (certainly not for “capitalism”) and suppress the “lived agency” of people.

I think that Ellen Wood’s seminal New Left Review article on “The Separation of the Economic and the Political in Capitalism,” when read carefully, points to a different understanding, namely one centered around the socio-political and non-economistic character of capitalism.8 This was inspired much more by E.P. Thompson’s work at the time, and I feel much more comfortable with this historicist, rather than logical-analytical, conception of capitalism. This really leads us back to very fundamental and long-standing controversies that reach right back to Marx’s work, when he declares in the preface to Das Kapital that it treats “individuals only as personifications of economic categories, the bearers of particular class-relations and interests,” rather than as historical actors.9 To my mind, Brenner’s work, at least in the original Transition Debate, is theoretically suspended between these two contradictory orientations: class conflict and historicity versus abstract rules of reproduction and dynamics of development and non-development.

Inversely the question is: does Marxism need IR – less the substantial body of IR scholarship, but more the problematic of space and interspatial relations for the Marxist conception of history, for Marxist historiography and social science? I have been saying for a long time that international relations are a big challenge for Marxism, and this, again, goes right back to Marx’s own work. Marx never really systematically thought about international relations as a distinct object of inquiry. Of course, we can look at his journalistic writings, notes, and letters, and they are full of interesting insights on this or that contemporary international crisis, though this never crystallized into something that he took seriously, theoretically speaking. He grew more interested in international affairs during the 1850s at the time of the Crimean War, and then wrote extensively on the American Civil War, the “Eastern Question,” and India. Kevin Anderson sets this all out nicely in his book.10 But the tone was set by the Communist Manifesto, which is full of lovely metaphors on international issues – and powerful great metaphors – but, here, the key category that is doing all the work is the world market or “bourgeois world society.” And the world market keeps expanding, but it is expanding basically along transnational lines “creating a world after its own image.” Meaning it is, to quote, “not the heavy artillery that is battering down Chinese walls, but the cheap prices of commodities” that force all “barbarian” nations to capitulate and adopt the bourgeois mode of production. And as we all know, of course, that’s not true: in each and every case capitalism had to force its way into non-capitalist territories by state force, and normally through war – in this case the Opium Wars and the Unequal Treaties.

So, even where Marx spoke about international relations, fleetingly or in this secondary aspect, he seemed to under-problematize the effect of international relations on the course and development of capitalism. Now, The Communist Manifesto and the German Ideology belong of course to the early phase of Marx, still very much influenced by Adam Smith, still a very liberal conception, really, of how capitalism basically universalizes in pacific ways due to the growing division of labor, rather than in terms of geopolitics and conflictual changes in property relations. The world market appears as an agency to render multiple regions homogeneous by subjecting them to a common world market logic. So the Weltmarkt becomes his mega-subject and this suppresses how world-market pressures are mediated by states, including how affected states and social classes within them respond to the encroachment of market imperatives. How was this process managed geopolitically and how did later developers institutionalize market relations in very different ways?

So the big point is that, as we know, Marx never wrote a distinct tome on either international trade or on war and geopolitics – a tome that would have problematized the spaceless assumptions of either a stagist conception of world history or a universalizing capitalist world market. And in that sense IR – less as a discipline but more as a problematic – remains very pressing and urgent for Marxists to reappropriate, notwithstanding of course the work that was done by the classical theorists of imperialism: V. I. Lenin, Nikolai Bukharin, and to some degree Rosa Luxemburg. But there the problem was that they ended up with a functionalist and instrumentalist account of states, and many people have shown how empirically problematic it was to ground the scramble for Africa and the repartition of the world in the transition from mid-19th century competitive capitalism to turn-of-the-century monopoly capitalism.

So however powerful an intervention theories of imperialism were at the time, I think what really stands out as the most systematic attempt to conceptualize international relations can be found in the anti-Marxist – Neo-Rankean and Neo-Weberian – tradition. While this is, in the end, disappointing, it forces us to open up IR to a much more comprehensive need to rethink and to reclaim it for Marxism.

GS and AA: The recent crisis and the present-day era of austerity have led to increasing questioning about the legitimacy and viability of the EU project. There are disagreements within the new European left parties (Syriza, Podemos) about the possibility of using the EU as a political vehicle to propose progressive social reform. What is your position on this issue?

BT: The situation for a progressive left politics in Europe is invidious, yet not without hope. It seems to me that the contradictions of a progressive populism, inspired by a Laclauian reading of Carl Schmitt, that revolves around an antagonistic strategy of national mass mobilization feeding on the raw distinction between “them” and “us,” and a left-leaning European reformism are currently playing out across Europe, particularly in Greece. Tactically, it seems to me that this confrontational populism has generated a much harsher response from the Troika than ever imaginable, and we are facing a real prospect of the internal self-destruction of Syriza because of that. Worse, we may even see the right-wing coalition partner gain from this failure of Alex Tsipras’s leadership, including the possibility of a right-wing military coup in Greece. A progressive populism may be the right tactic domestically, but it is the wrong strategy in foreign policy, as it hardens divisions without any real prospect of overcoming them. I am, of course, livid with Germany’s reaction to the Greek Crisis, mounting effectively an economic occupation of Greece, an informal coup d’état, riding roughshod across all fundamental principles of the European Union and the whole drivel of European solidarity. The EU, for sure, stands exposed!

But we need to ask ourselves whether this confrontational-populist rhetoric, however much warranted on factual grounds, has not generated its own hyper-confrontational response from within the Troika, both at the political and at the public-relational level. It’s invidious, because rather than presenting the crisis as a conflict between transnational capital and transnational labor – the taxpayer – it can be discursively fabricated as an antagonism between thrifty Germans – or Northern Europeans – and slothful Greeks, rather than what it really is: European taxpayers – the lower and middle classes – bailing out European banks, investors, and public creditors who mislend in reckless ways, while fleeing Greek capital is driving up housing prices in Berlin and London. And this is not even mentioning the role of Goldman Sachs in cooking the books upon Greece’s entry into the Eurozone, massive tax-evasions by and corruption within Greece’s elite, the benefits of debt-financed investments in silly Greek infrastructural projects for European, particularly German, business, and so on.

Now, of course, EU states are locked into that arrangement and given what has happened to Greece, we see that there is not even a velvet glove around the hard fist of the German government. It is direct imposition of restructuration and adjustment programs that are not even particularly effective either; they’ve just pushed Greece and other states ever deeper into crisis without resolving their underlying debt problem in any credible way. So, populism feeds both ways, as the German press – from the Frankfurter Allgemeine Zeitung to the gutter press of Bild Zeitung and the like – is portraying this problem by playing very much on national sentiments, and that’s the wrong analytic, serving stereotypes of the worst kind, without, of course, looking at what German and French banks actually did in driving Greece and other EU states into debt – and their agency in recovering these debts through their socialization. So the European taxpayers are essentially bailing out Greece and, in the same process, bailing out German, French, and British banks. But this is not rhetorically connected to neoliberal capitalism, but to Greek laziness. Now there are forces in Germany – like the AfD [Alternative for Germany, a new Europhobic far-right conservative German party] – that capitalize on this discourse, asking for a shrinking of the EU, that just the hard core states survive in a reconstituted and fully neoliberalized Eurozone and the rest can be cut free and cut loose: a prospect that would demote the Mediterranean EU states to an unsustainable peripheral status for the foreseeable future.

So, we have reached a crisis point, but this needs to be exploited. Tactically, I would say that the argument needs to be won – won within the EU – and it can be won, given the evident facts on the ground, particularly as I am certain that there is a numerical left-of-center majority in EU states, even in Germany and France. And the demographics of the most affected – the young – could play in this direction. But left politics, to my mind, cannot rely on nationalist projects or nationalistic antagonization, but needs to build strong international alliances. This will require massive extra-parliamentarian and intra-parliamentarian mobilization, oriented towards a complete rebuilding of the EU’s institutional set-up. In this, opportunistically or abstractly calling for a break with the EU, especially in cases where such a demand is monopolized by the right and where the left possesses no coherent strategy, is a dead end. The option of strategically working through European institutions – even when these are undoubtedly undemocratic – should not, therefore, be discarded out of hand.

GS and AA: Let’s return to the work of Carl Schmitt. His thought has received increasing attention from left-wing intellectuals during the past two decades (Chantal Mouffe, Gopal Balakrishnan, Ernesto Laclau). Do you think that the contemporary intellectual and political left should engage with the dilemmas that Carl Schmitt poses? Or is this trend a sign of political defeat?

BT: Schmitt’s work is polyvalent and can be read in multiple ways. I can understand why scholars engage with his analysis and critique of U.S. imperialism, particularly in relation to his acute insights about changes in international law relating to the abolition of classical interstate warfare and its replacement by a discriminatory concept of war, humanitarian pan-interventionism, and conditional forms of liberal sovereignty stretching back to the Treaty of Versailles and the League of Nations. So, the left can certainly engage with the dilemmas he identified, but I would not recommend the political solutions he prescribed. An abstract re-assertion of the political, organized in sovereign states, or a retreat into partisan-warfare, are clearly not credible and sustainable alternatives for a left progressive politics. A left national populism, feeding on a crude distinction between “them” and “us” may be appropriate for some countries, but not for deeply integrated and small states within Europe. If anything, Schmitt advocated highly authoritarian solutions to social crises in liberal-constitutional states – in his case the Weimar crisis – premised on the invocation of the state of emergency by the state executive, suspending constitutions. Internationally, he argued for the division of the world among four or five great powers, each creating their own regional spheres of influence, what he called Grossraeume or pan-regions.

Thus, I was surprised how uncritically he was remobilized during the last decade or so in the Anglo-American literature, including in IR, as an apparently radical and critical thinker. Now, to some degree I can see why that is the case. But there is something like a collective amnesia going on around Schmitt, and non-Germans don’t necessarily associate his thought with his role during the Nazi period, how contextually political his work was, and how complicit he was intellectually in launching a blueprint for Nazi foreign policy. His critique of U.S. imperialism does not mean that his politics has much to offer for the left – quite the contrary!

He was not one of the classical geo-politicians, but through first admiring the Monroe Doctrine in the Western hemisphere, and then resisting its inflation to global proportions through Wilsonianism, he provided essentially a template and justification for a German conquest in the East, which he portrayed as being more or less within the normal power-political logic of world history. Victorious powers basically articulate after conquests the rules for international law, so that law follows conquest, generating a “nomos” – a combination of territorial sovereignty and law. This may be an accurate, if de-sociologized, description of the relation between law and international power, but do we really want to renege on the possibility of intellectual, rather than just power-political, principles of international law and order?

So I do two things with Schmitt in my work: on the one hand I deconstruct his history of international law and order, as outlined in his Nomos of the Earth, and show how the attempt to provide an ideological counter-narrative to liberal stories of international law is actually historically defective and simply not accurate.11 And secondly, I’m trying to challenge what is a very thin theoretical vocabulary – “concrete order thinking” and his concept of the “political” (the friend/foe distinction) – that is meant to hold and to ground this historical anti-liberal counter-narrative. At the same time, I think it is symptomatic that left thinkers, including Gopal Balakrishnan and Chantal Mouffe and so on, have turned to Schmitt to provide the missing Marxist geopolitics, particularly of the interwar period.12 So, in that sense, this relates back to my earlier point: because IR is still a relative absence in the Marxist literature, people are groping around to find concepts, to find stories that could help us to make sense of the crisis of law and international order from the late 19th century onwards, through the Thirty Years Crisis, and into the 20th and early 21st century without having fully explored the intellectual architecture of Schmitt’s thought as a whole. Strange bedfellows indeed!

What I hope to have done is to show how misguided and how problematic it is to use Schmittian categories and tack them onto notions of capitalism and class conflict. Particularly because Schmitt conceived himself from the start as a decidedly anti-sociological thinker, and this connects him much more with the realist and authoritarian tradition than with anything else. Just remind yourself that his definition of sovereignty derives from political theology, the papal plenitudo potestatis and absolutism, and validates executive power as something outside and above social conflicts and social struggles. So he is attempting to isolate and insulate politics and the political from any form of social contestation and accountability. Sovereign is he who decides over the state of exception. And the invocation of his concept of the political revolves around a crude notion of volkish homogeneity driven by an existentialized politics of fear designed to drown out sociological fault-lines within socio-politically heterogeneous and class-conflict riven civil societies.

How that can be compatible with Marxism – either theoretically or politically – requires a big leap of faith because the minimum that you have to think about in relation to sovereignty is two things: first, sovereignty is a social relation. This may sound broad, but anybody who is invoking the state of exception has to have thought prior to its declaration about its likely chances of implementation. What is the social situation on the ground? What kind of resources do we actually have in place – military, political, administrative – to implement that state of exception? The state of exception is always a deeply socialized relation, quite the contrary of what Schmitt was trying to argue. Secondly, what kind of crisis calls forth the likelihood of emergency powers? Since political theology is not interested in an explanation of crisis, in contrast to historical sociology or political economy, Schmittian thinking does not provide the categories to understand socio-political crises – thus the crude relapse into an abstract notion of “the political”: primitive group-thinking of “them” versus “us.” And of course in relation to territorial conquests – land grabs – again, Schmitt held to a deeply de-socialized affirmation of a realist logic of geo-political dynamics and powers that are consciously dissociated from everything that is going on within societies. States, by nature, he insisted, expand and compete for space! So whether you go back to the discoveries of 1492 or the late 19th century period of imperial rivalry, Schmitt would always read this as an affirmation of the law of the stronger. That this is simply what states do: self-preservation through expansion, creating a nomos, rather than a cosmos or a logos.

So I keep being surprised about attempts to reappropriate particularly the historical Schmitt but also the conceptual and political Schmitt by Marxists. To me, that’s a cul-de-sac – intellectually and politically, it’s self-defeating. Yes, it is uncanny how the contemporary situation resembles the interwar crisis and Schmitt’s Weimar situation. We have a massive capitalist crisis on our hands with right-wing nationalist forces in most EU countries, absorbing social discontent, and a collapsing liberal center. To advocate in this scenario, as Steffan Wyn-Jones reminded me, a left-wing populism and nationalism that often overlaps with right-wing political recipes – even finding a temporary, if ambiguous, common ground (whether Golden Dawn in Greece, AfD in Germany, the Front National in France, or UKIP in Britain) – by invoking Schmitt seems to me disastrous. After all, National Socialism thrived on the same amalgamation of left and right motives and constituencies during its rise to power, before any dreams of populist socialism were ended in the “night of the long knives” once the Nazis were in power. It may be naïve, but a broad-based transnational alliance of progressive forces seems to me the only remotely acceptable and realistic way forward.

GS and AA: It seems that focusing on the “international” also requires us to rethink the state. Although some have done this by looking to non-Marxist thinkers, what value do you see in returning to trends within Marxism – such as the German “state debate,” which tried to pair an understanding of the form of the capitalist state with an analysis of its entanglement in relations of capitalist competition and the world-market, or the debate between Ralph Miliband and Nicos Poulantazs, which in part tried to connect a theory of the state to questions of revolutionary strategy and organization? How might these currents of specifically Marxist state theory help us think about the “international” today? And conversely, how might your renewed attention on the “international” help us better understand state power and political strategy?

BT: The notion of ‘the international’ is, for me, a troubling invention that keeps buying into the same language of tragic necessity and timeless imperatives advocated by Realists and Neo-realists in IR. I suggest replacing it with an awareness of how differently political geography and relations between polities were organised historically. Otherwise, we keep on thinking under the sway of a static mega-abstraction that cannot be removed. It freezes creative thought and progressive strategies for emancipatory change and action. That is way history matters. It is, for example, not true - or, at least: one-sided - to say that revolutionary states, whatever there internal make-up and foreign policy strategies, become over time socialised into the conventions of its surrounding state-system, characterised by the remorseless logic of power politics and self-help, as Neorealist keep on saying and as Neo-Weberian historical sociologists, like Theda Skocpol argue, when she looked at the French, Russian, and Iranian cases. It is truer to the historical record to say that revolutionary states, 17th century Britain, 18th century France and the US, the 20th century Soviet Union, and, perhaps, even contemporary Germany, have fundamentally changed the ‘rules of the game’ in which international politics is being played out. This lead also, in many cases, to domestic adaptations to the innovations - constitutionally, militarily, strategically, financially, socially - that revolutionary states pioneered without creating exact replicas. This is not an argument for the pacific character of foreign policies of liberal or socialist states, or a general teleological argument about ‘progress’ in world history, but much more an argument about the variability of foreign policies and strategies of conflict and co-operation that cannot be derived from either systemic inter-state logics or domestic ‘modes of production’. Why does the US pursue multilateral hegemony after WWII, rather than either isolationism or imperialism, when it did the former in the interwar period and the latter under Theodore Roosevelt? Can we answer this with reference to either inter-state imperatives or the logic of capital? Why did early 18th Century Britain adopt balancing and non-intervention versus the Continent and imperial expansion overseas, rather than merely power politics and imperialism in all theatres simultaneously? Why does contemporary Germany pursue regional hegemony within a framework of multilateral atlanticism, rather than resorting to regional autarchy designs?  Capitalism and the inter-state order may, but only may, provide certain pressures, but the answers states develop to cope with these pressures, an essential PM argument, cannot be ‘derived’ from these contexts. What, then, is logically or conceptually a distinctly capitalist state and capitalist foreign policy - outside history?

It seems to me that it is precisely this kind of argument that makes me sceptical towards the German State Derivation School that developed in the 1970s. If I recall correctly, Staatsableiter, tried to make logical arguments about how the ‘bourgeois state form’ and ‘bourgeois law’ and its functions were a necessary result of the requirements of the capitalist mode of production, or even commodity-exchange. Its ‘relative autonomy’ - the fact that the ruling class did not rule - concealed the fact that it had to carry out structurally, but not instrumentally, the requirements of capital accumulation. Relative autonomy was derived from the idea that the state functioned in the general interest of capital to co-ordinate the will of may capitals. While ‘relative autonomy’ was conceded, the state was not neutral, but did structurally the bidding for general capitalist reproduction. This debate was not only highly abstract and theoreticist, I found it always deeply un-historical and un-specific, as arguments were made about the ‘capitalist state’ in the abstract and in general. Heide Gerstenberger’s writings provided for me better insights into the historical origins and growth of the ‘bourgeois state’ as tied up with specific social and political conflicts, showing its diverse ‘manifestations’ and trajectories, even though she largely excised the foreign policy dimension from her studies. And this neglect of foreign policy was also prevalent in the Marxist debates of the 1970s.

GS and AA: What do you see as the limits of traditional Marxist theories of imperialism, and how might your work allow us to rethink the history of imperialism, especially imperialism today?

BT: I’ve already mentioned that traditional Marxist theories of imperialism were already problematic at the time, mainly because they over-generalised across the key capitalist states that composed the inter-state system during the belle époque, and provided structuralist-functionalist explanations of state policy and international politics. They assumed an immediate identity between state and monopoly-capital. Specific ‘stages’ of capitalism, in this case: monopoly capitalism, were regarded as providing the deep explanation for how international relations, in this case: inter-capitalist rivalry and the descent into World War I, played out. Different state strategies of how to organise international relations, and diplomacy did not matter! Yet, Marxist theories of imperialism remain admirable in so far as they, for the first time, forced people to think more systematically about foreign policy influences other than those that were identified either with a reified state rationality and the primacy of foreign policy, or primitive relapses into biological analogies which saw states, from the late 19th century onwards, being trapped into neo-Darwinian zero-sum struggles of survival on a territorially finite planet in which Lebensraum was at a premium. This kind of thinking was not only confined to Germany, in which Friedrich Ratzel’s political geography and Karl Haushofer’s Geopolitik became dominant, but also alive in the UK, where the former director of the LSE, a geographer, called Halford Mackinder, wrote in 1904 an influential article called ‘The Geographical Pivot of History’, whose heartland theory informed British geopolitical strategy and the declining Empire. Similar things happened in the US through Admiral Thayer Mahan’s navalism and the strategic primacy of sea power. Rudolf Kjellen, who coined the term ‘geopolitics’, was a Swedish political scientist. Italy and Japan had their own designs for supra-national regional order.

To me, as I said, there is no way back to a Neo-Leninist or a Neo-Kautskyan analysis, even if reformulated in terms of two ‘logics of power’ - one reifying state power and territorialism, the other reifying capitalism and de-territorialisations - to understand the historically diverse ways in which ‘the spaces of capital accumulation’ were constructed and connect to concerns about state security. In the Marxist discourse we see the return to arguments about deep logics emanating from capitalist ‘requirements’ and ‘imperatives’ from which ‘foreign policy’ is simply ‘derived’. This also leads to conceptual over-stretch, where notions of imperialism, whether formal or informal, abound rather indiscriminately. Are the Iraq and Afghanistan fiascos imperialistic in the way the late 19th century scramble for Africa or the Vietnam disaster was? Obviously not! It is hard to formalise some essence of how a Marxist analysis of geopolitics is supposed to look, but the first requirement is to get away from the structuralist-functionalist trap by focussing on the processes of foreign strategy formation and the often unattended outcomes of these strategies, as we have seen in the Middle East, where democracy and the ‘rule of law’ did not mushroom miraculously as soon as the dictators were removed, as the Neo-Conservatives believed, but rather lead to state failures, displacements, migrations, and the regrouping of terrorists on a transitional basis, that is now stronger as before ‘the war on terror’. One good example of how to conduct such an analysis is Neil Smith’s study ‘American Empire’ that shows in much more detail how strategy and policy are being shaped by planners - the figure of Isaiah Bowman stands at the centre - in ways that are actually much less ‘planned’ and ‘coherent’ then we tend to assume when we re-impose in hindsight certain ‘logics’ that are simply carried out as if politicians merely enact a predetermined script. Is this still Marxist? I would say, yes, and I would like to refer the reader back to Marx’s critique in the Grundrisse of abstract and generalising thinking sub specie aeternitatis in favour of identifying and reconstructing sui generis cases. It is this procedure of conducting empirically rich and case-specific inquiries, immune to generalisations and logics, that I think reconnects back to my reading of Political Marxism - or Geopolitical Marxism - so as to recover the efficacy of multiple agents in the shaping of foreign policy and the unpredictable responses it provokes by other countries.

GS and AA: How do we explain the resurgence of right-wing nationalisms in Europe and the United States, but also other parts of the world? The matter of international trade and interstate competition is crucial here, with many parties and movements positioning themselves according to anti-globalist or pro-globalist stances.

BT: It is clear that the term globalisation was always an ideological construction that suppressed the differential social consequences of liberalisation and neo-liberalism in distinct regional and national locales. As even neoliberals admit now, there are a few winners and many more losers, within and between capitalist states. We are facing obscene levels of wealth and income inequalities and life-chances, especially amongst the younger generations, corruption and fraud on a gargantuan scale from Brazil to Turkey, Spain to Greece, and also within the capitalist core, the destruction of the welfare state, wage repression for most, and the accentuation of precarious working conditions. In the process, the Middle Classes that provided the social bedrock for the post-WWII consensus, are almost everywhere squeezed in OECD countries. Additionally, there is a wide-spread feeling that the bankers and their ‘neo-liberal policy experts’ that caused the financial crisis of 2008 got largely away with impunity and keep preaching the same failed remedies while lining their pockets: more easy credit, a loose monetary policy and liquidity, which simultaneously erodes and depletes the savings of the populace, while Tax Havens proliferate. As a result, representative democracy is often regarded as powerless by disaffected and alienated voters, and societies are deeply polarised. In this context, leftwing and rightwing protest against the establishment and elites is susceptible to populist and nationalist options. As I mentioned earlier, the left is ill-advised to follow a nationalist strategy, as this risks being swallowed by neo-nationalistic movements. The choice is not between a retreat into anti-globalisation and neo-liberal pro-globalisation, but between regressive nationalisms and progressive internationalism. This requires something like a regional and, perhaps, global ‘New Deal’. We had this before, so why not now? Yes, social democracy, welfarism, and ‘embedded liberalism’ was admittedly learned the hard way after two World Wars and arguably only possible in the presence of a radical alternative, the Soviet Union. The world-historical context today is different, but if political leadership, concerted and international, flanked by mass protest, is to mean anything, then we require this now! Anybody can see the likely international consequences if we keep spiralling towards a new Weimar Situation, which will seal the decline of the West.

1. See Hans-Ulrich Wehler, The German Empire, 1871-1918 (Dover, NH: Berg Publishers, 1985). 

Combatting the Right: Sexual Violence, Discrimination and Oppression and Left Responses

Call for Papers of Sexuality and Political Economy Stream 

HM Fifteenth Annual Conference, London (SOAS, Central London), 8-11 November 2018

Read the general 'Taking on the Right' CFP with all conference details

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