A Brief History of Commercial Capitalism

by Jairus Banaji

The rise of capitalism to global dominance is still largely associated - by both laypeople and Marxist historians - with the industrial capitalism that made its decisive breakthrough in 18th century Britain. Jairus Banaji's new work reaches back centuries and traverses vast distances to argue that this leap was preceded by a long era of distinct "commercial capitalism", which reorganised labor and production on a world scale to a degree hitherto rarely appreciated. Rather than a picture centred solely on Europe, we enter a diverse and vibrant world. Banaji reveals the cantons of Muslim merchants trading in Guangzhou since the eighth century, the 3,000 European traders recorded in Alexandria in 1216, the Genoese, Venetians and Spanish Jews battling for commercial dominance of Constantinople and later Istanbul. We are left with a rich and global portrait of a world constantly in motion, tied together and increasingly dominated by a pre-industrial capitalism. The rise of Europe to world domination, in this view, has nothing to do with any unique genius, but rather a distinct fusion of commercial capitalism with state power.

Genres: History, Economics, Nonfiction, Politics, Finance, Theory

200 pages, Kindle Edition

Published July 1, 2020

About the author

Jairus Banaji spent most of his academic life at Oxford. He has been a Research Associate in the Department of Development Studies, SOAS, University of London, for the past several years. Banaji's main research interests have included: agrarian history; Late Antiquity and early Islam; historical materialism; Marx's method in Capital; the fate of the peasantry under capitalism; and, unions and industrial relations in India.

Reviews

[Kosta]

Interesting book about how prior to the industrial capitalist mode of production coming into existence as we know it, capital circulation was driving pre modern economies. A very detailed and really thickly sourced (I'm talking a footnote almost every sentence) account of how this has been a driving force of history from the early Italian merchant republics through to the early and mid 1900s.

[Casey Mathur · Rating 3 out of 5]

I've somewhat soured on this book since reading it, would give 2.5 stars but I like Banaji's other work, especially theory as history, so happy to give a +.5 . I think Banaji does a fantastic historiography review of early modern commercial networks, exploring the ways that production became organized around value and exchange predating industrial capitalism in the European world. His engagements with Chayanov and theories of agrarian subsumption are fascinating, as well as the geographic scope that he covers, spanning trade in China, India, Portugal, the Mediterranean, east Africa, the Islamic world, etc show a really interesting geneology of merchant business practices and agrarian/petty-commodity production transformations in response to this. Nonetheless, Banaji does not hold a definition of what commercial capitalism is. The study demonstrates a variety of examples highlighting subordination of labor by capital within these histories. These, however, do not mean that this is an example of capitalism. This history does not show how value-relational changes in production relate to the emergence of a new form of society where the labor-value-relational abstraction is generalized across the spheres of production, exchange, and consumption. This additionally does not show how this vast commercial history related itself to the intellectual development of economic abstractions that attempt to explain the emergence of capitalism in their own terms. By losing out on this connection, and attempting to situate the whole of mercantile exchange as a component of capitalism, it is unclear what political implications this has on how markets, competition, and how commercialization should be viewed today.

[Dante · Rating 4 out of 5]

3.5

Immense historical detail (Banaji has got a severe case of what Betjeman said of Pevsner - foot and note disease) and the additional essay on the relation between Islam, Capitalism, state action and commerce is great. Just wish Banaji reconstructed the argument a bit more tightly and spelt out how it engages debates with political Marxism etc, as there's likely some nuances in disagreement I'm missing.

[J]

a remarkable achievement for the concision alone––the second chapter on the transition from medieval commerce to modernity was perhaps the most interesting. Highly recommend.

[Henry Els · Rating 3 out of 5]

It was, in fact, not brief.

Interesting tho.

[sube · Rating 4 out of 5]

This book is dense, but short -- it works brilliantly. It's able to make its case of 'commercial capitalism' (i.e. primacy of merchant capital), a concept often maligned in the modern day communist discussions. I'd recommend it, makes it a lot more interesting how to conceptualise the transition towards capitalism, and the importance of merchant capital (far longer than expected!)

[Diego · Rating 5 out of 5]

A Brief History of Commercial Capitlaism de Jairus Banaji es un trabajo extraordinario, en apenas unas 140 pagi as de texto logra condensar la muy extensa historia del capitalismo, en especial su etapa comercial durante el último milenio, además lo hace de una forma magistral con una prosa entretenida y es capaz de explicar algunos aspectos densos de la teoría marxista, del pensamiento medieval europeo y del islámico con gran sencillez.

En una linea de pensamiento que va desde Ibn Khaldun pasando por Marx, Lefebvre, Braudel y pensadores más contemporaneos muestra como la circulación del capital mercante en la edad media y su eventual transformación en el capitalismo industrial que tanto estudio Marx son un proceso un tanto continuo, resultado de una evolución histórica de los estados en la que para que el capitalismo realmente surgiera, se reproduciera y expandiera realmente necesitaba de una especie de alianza entre el estado y los capitales mercantes. Braudel decia que "el capitalismo solo triunfa cuando se identifica con el estado, cuando se transforma en el estado", eso es justo lo que vimos en Venecia o Genova, en Porgugal, Holanda o Inglaterra y es lo que dio origen al mundo moderno que habría de surgir con la Revolución Industrial.

Es quizá una de las partes más interesantes del libro y un gran aporte el espacio que dedica para pensar la evolución capitalista en los estados islámicos y porque a diferencia de lo que pasaría con los Europeos estos no vieron una tranaformación tan dramatica entre el capitalismo mercantil y el industrial. La hipotesis de Benaji es muy persuasiva y curiosa, fue la mezcla de dos cosas simultaneas, la falta de un concepto de "personalidad juridica" herencia común del derecho romano en Europa, que en los países islámicos no surgia de forma natural la idea de una corporación (también herencia en Europa del cristianismo y sus iglesias) y que a diferencia de Europa no existio una expansión mercantilista, que los gobernantes fallarón en identificarse lo suficinete o en apoyar lo suficinete los intereses de sus mercaderes. En Europa los estados en buena medida eran controlados por intereses economicos de los capitalistas mercantes, en el medio oriente no.

Es un libro muy recomendado, con una herudición tremenda y una gran capacidad de presentar una historia breve pero con un analisis muy agudo de forma amigable.

[Insertusernamehere02 · Rating 4 out of 5]

I enjoyed this book and would recommend it to anybody who’s interested enough in this kind of book to be reading reviews. It dragged with its listing of various merchants and commercial sectors but this did a good job establishing its comprehensiveness. I wish the author was more clear in their case for commercial capitalism being a type of capitalism but it isn’t too hard to draw the necessary inferences yourself.

[Eugene A. · Rating 4 out of 5]

Writing in the Marxist tradition, Jairus Banaji recounts a dizzingly brief story of the global commercial society before the Industrial Revolution. He asserts two forms of capitalism - commerial and industrial capitalism delineated by the advent of the Industrial Revolution. In the Industrial Age, commercial capitalism becomes subordinated to industrial capitalism (28).

A strength of Banaji's analysis is the inclusion of non-western and non-Christian cultures. He thoroughly demonstrates that Eastern and Islamic societies greatly contributed to the development of captalistic merchant trading firms engaging in worldwide trade. Further, he includes a wide range of cultures and societies, many of which are omitted from standard, western-based world histories.

On the other hand, readers are left wanting for why the central distinction between commercial and industrial capitalism matters. In this reader's view, the 1600's Indian textile industry exhibited similar capitalist characteristics as the post-1800's British textile industry. Both societies required labor, investment, management and people willing to engage in global trade. The simple difference is that post-Industrial version required less labor and more investment, management and trade per unit as its predisssor industry. Perhaps, Banaji relies too much on a readers understanding of Marxist ideology and historiography.

Benaji's work would benefit from a "so what" analysis" and why relevant today? This reader's perception is that the difference beteeen commercial and industrial capitalism is a distinction without subtance. Certainly, the Industrial Revolution upended world trade, creating new winners and losers among nations and societies. A better defined distinction between commercial and industrial capitalism could be more relevant by extending Banaji's anlysis to an "information" capitalism in which industrial output is a mere fraction of global production. Maybe, in pondering relevance today, Banaji succeeds in his global commercial survey in the years leading up to the Industrial Revolution.

[Recai Bookreader · Rating 4 out of 5]

After reading this book, I want to read every word written by Banaji. You really need to fight to avoid popular history books piled in front of us as bestsellers, whose primary aim is to tell a story captivatingly rather than to make a point. And those who make a point do that just for the sake of making a point and being controversial, selectively disregarding contrarian evidence. Marxist historical studies are also not always immune from diseases, notably being prone to dogmatism and sectarianism.

What Banaji is doing here is of immense value: go to the primary source, check your hypothesis and calibrate your model/theory. This is profoundly different from the method the best selling history books exposes you to: have a theory, throw in some hypothesis and selectively pick evidence, albeit rarely from the primary sources. And man, when you wear Banaji’s lenses, you cannot help feeling that we are at the very beginning of making sense out of history and at the very very very beginning of agreeing on something. You don’t get this perspective from the bestselling history books because they approach the reader with an air of omnipotence - they know everything and please, some evidence, confirm the author, will you?! I was aware of this problematic but only after reading Banaji that I got as clear as daylight illuminated about our ignorance and incomprehension: we know shit, hence we understand little.

And the bibliography of the book is simply mouth watering. I wish I had the necessary time and energy (which equate to brain power and I’m evidently short of) to go through at least some of them.

[Ryan Day · Rating 5 out of 5]

9/10

Great attempt at detailing the long and complex history of something, fitting well with other works I’ve read by Giovanni Arrighi and even non-Marxist authors. I do think I had a vague awareness of the conclusions of this book, especially thanks to works I’ve read before, but it's good to see them written out again and in different phrasing.

How did capitalism come to rule the world? How did the transition to modernity (whatever that means) take place? This book posits that the conventional idea of how this happened (among Marxists, at least?) is less than accurate, and a recounting of its rise is necessary in order to correct the record. I will say that, at least from reading Arrighi and Walter Schiedel’s Escape From Rome, I already understood the corrections made here by Jairus Banaji. On the former, the existence of commerce and trade that, obviously, precede industrial capitalism by centuries. Trade was conducted in the Indian Ocean, in East Asia, the Mediterranean and everywhere else, long before the West came to rule. This included all of the standard qualities of our economic system: recessions, competition, and changing markets as a result of innovation and political developments. The latter, on the unique nature of West European states as incredibly conflict oriented and, by extension, increasing willingness to give power to the merchant classes, if not outright combine the merchant classes with the ruling class of those states. (or, the “committee for managing the common affairs of the whole bourgeoisie”)

It's nice to see these conclusions brought up again, with evidence either new or that I did not take into account before. The strategic advantage of the Portuguese being, for example, their willingness to inflict violence and destruction on East Indian trading communities, an advantage they gained from experience in the Mediterranean, against the equally violent Italian city states. The ability for domestic and capitalist exploitation was also very interesting, and certainly changes my idea of what sort of labor exploitation falls under the umbrella of “capitalist.”

[ernst · Rating 3 out of 5]

Enorme Materialfülle, die von Banaji theoretisch nicht hinreichend durchdrungen wird, um seine Kernthese zu bestätigen. Die Kernthese als da wäre, dass es so etwas wie einen spezifischen Handelskapitalismus gab, der lange selbst vor dem Kolonialismus und der Renaissance existiert hat und der noch bis ins 19. Jahrhundert hinein vorherrschend blieb. Ähnlich wie bei Samir Amin der Begriff der tributarischen Produktionsweise riesige historische Epochen und Weltbereiche einebnet, erscheint auch bei Banaji eigentlich jedes handelstreibende Gebiet schon als kapitalistisch, namentlich handelskapitalistisch. Der Begriff des Kapitalismus verliert so seine Spezifität und löst sich im Nebelhaften auf.

Was Banaji zeigt, ist die Existenz des Handelskapitals und wie lange und in wie vielen Formen sich die formelle Subsumtion der Arbeit unter dasselbe reproduziert hat. Das zeigt er zumal nicht nur in Europa, sondern auch im arabischen und asiatischen Raum. Das historische Panorama, das er dabei eröffnet, ist beeindruckend, verdienstvoll in der Konzentration beachtlicher Stoffmengen. Insofern ist das Buch unbedingt lesenswert, auch wenn die Kernthese letztlich nicht überzeugt.

[Frank Keizer · Rating 3 out of 5]

In this concise book, economic historian Jairus Banaji provides a corrective to orthodox marxist historiography, pivoting on the Industrial Revolution and its advances, by making a case for the centrality - not subordination - of 'merchant capital' or 'commercial capital' to the development of the long, continuous arc of capitalism, and the 'dynamic' processes we associate with it: the expansion of markets and manufacturing, the reorganization and domination of the production (!) and the labor process and the rise of the (mercantilist) state. It's an impressive, erudite book for the array of sources - from English, French, Greek and Italian to Islamic - it draws on, dislodging many a eurocentric account. If you're somewhat familiar with scholarly, intra-Marxist debates on the rise of capitalism and are willing to sift through a litany of merchant houses and economic minutiae, you will find valuable pieces of insight and analysis, albeit it rather more strewn throughout the text than elaborated upon.

[Ibrahim · Rating 5 out of 5]

A really good overview of what commercial capitalism is, how it evolved from the medieval era until it got subsumed beneath industrial capitalism, key actors in its heyday, how it operated, and why it developed where it did. The addendum on commercial capitalism in the muslim world is also a great and important read - really helps in answering why the great divide happened.

It shows how concentration and monopolistic practices are natural aspects of capitalism - with the advance of technology which allowed for vertical integration of firms - how that aspect becomes turbocharged.

Couple of questions: does the subcontracting and decline of vertically integrated firms in the west in the era of neoliberalism mark a difference to what was industrial capitalism before? Or has the structure of capital remained similar- with only the grounds of production changing?

Also - what led to the islamic mercantile classes having less class solidarity and greater fragmentation than its eventually succeeding western counterpart?

[Kariem · Rating 4 out of 5]

This is a very serious contribution to the debate which breaks with a lot of the existing formalities, even of the anti-dogmatists. We are due for much more serious economic histories of Egypt & India to unlock another side of what we’ll come to know as the merchant and their relationship to the producer before the advent of large industry. The scope and range of literature which Banaji has full command over is honestly mind boggling, and does him well to prove, in the main, that much more of what has been shoved into feudal, semi feudal, “asiatic”, etc production had a clear mercantile character, and that the mercantilists guiding hand over production is neither invisible nor constrained but is congruent with their early conception (early but remarkably matured) notion of capital.

[Durakov]

I wish it were longer! This is way too much material compressed into a small space, making some of the actual arguments hard to parse from the enormous quantity of examples. I got the most out of the final chapter and the appendix on Islam and capitalism. I would recommend reading that appendix before the main body of text. I'll have to reread this one, perhaps after I finish reading Braudel.

[David · Rating 4 out of 5]

4.5/5
Banaji's knowledge of many languages shines in this history of commercial capitalism. Utilizing sources from French, Italian, German, and, obviously, English, Banaji is able to give the reader an in-depth and concise introduction to the capitalism of yesteryear.

[Nikhil · Rating 3 out of 5]

Less interested in the historiographical commentary here (it is pervasive, even the purpose of this text), but it's also an all-around decent summation of the central role of traders, financiers, brokers, and merchants in history.

[Jakob Myers · Rating 3 out of 5]

A lot of interesting material and exciting theoretical conceits in the first chapter especially, but can degenerate into just listing trade statistics

[tamphopho · Rating 4 out of 5]

very knotty text, a little too brief

[dana · Rating 5 out of 5]

woof!

[cunningrocks · Rating 4 out of 5]

Hmmm.... much to think about