All praise the market!

Issue: 101

Phil Marfleet

A review of Nigel Harris, The Return of Cosmopolitan Capital: Globalisation, the State and War (IB Tauris, 2003), £24.50

I read this book with a sense of increasing scepticism, becoming incredulity. By the end I also felt indignation that the author could claim to address ‘the old agenda of socialists’ while advancing theories of economic and political change which sit comfortably with those of the most aggressive neo-liberals. The Return of Cosmopolitan Capital is less a book about capitalism than an apology for it, in particular for the ravages of globalisation.

Nigel Harris has always written books crammed with information. This one too contains a mass of data of real interest, especially on the world economy before the coming of industrial capitalism. But this material is incidental to the main plot-Harris’s account of the changing relationship between the state and capital. Developing an argument he began to set out in the early 1990s1 he suggests that for the past 500 years the most important feature of world history has been a continuing struggle between merchants and traders-the ‘cosmopolitan bourgeoisie’-and those who operate territorial states. The kings, princes and politicians who dominated states, says Harris, succeeded in subordinating world trade networks to local control, inhibiting and distorting the positive features of capitalist development. They misdirected productive resources into war-hence Harris’s concern is with ‘the war-making state’, with its waste and destructive power.

Much of the book is a detailed account of successive phases of the struggle between commercial capital-seeking to move freely across the globe-and the efforts of local states to compel the market to serve their own ends. The war-making state is malign, argues Harris, and it is only when its influence is diminished that the potentials of capitalism can be realised. Globalisation, he maintains, is now driving the state into retreat; in effect the era of states and of war-making is reaching its end and the productive capacity of capital-that is, capital as trade-can initiate a new period of global well being.

Harris foresees ‘a new bourgeois revolution’-’the establishment of the power of world markets and of businessmen over the states of the world’.2 It is this that will serve the interests of the mass of humanity, ending poverty and making ‘the conditions of all consistent with the best’.3 The more there is of uninhibited capitalism the more there will be prosperity and harmony; the ‘return’ of the bourgeoisie, released at last from the tyranny of the state, will mark the moment of advance of the many.

The key contention here-that extension of the market brings universal good-is awfully familiar. It can be seen in almost any strategic document produced by the major transnational financial institutions. In its report on the world economy, Entering the 21st Century, the World Bank, for example, insists that full engagement with world commerce is a requirement for the countries of Africa, Asia and Latin America. According to the World Bank, ‘For developing countries, trade is the primary vehicle for realising the benefits of globalisation’.4 Like the World Bank, the International Monetary Fund (IMF) and the World Trade Organisation (WTO), Harris believes that embracing the world market is the key to economic and social advance. He is not just a globaliser, however, but a super-globaliser. In common with pioneers of globalist theory such as Kenichi Ohmae he maintains that states abuse the productive capacities of capitalism. Ohmae argues that ‘the nation-state has become an unnatural, even dysfunctional unit for organising human activity and managing economic endeavour in a borderless world’.5 But Harris believes that the state has always been ‘dysfunctional’ and that only when global capital has reconquered the world of states can we look forward to an era of prosperity and harmony.

Harris sees the state as an incubus, an alien force that for centuries has haunted the bourgeoisie, seizing and redirecting all the potentials of commerce for its own interests. But the relationship between capital and the state is far more complex than is suggested by this struggle between good and evil. Since the emergence of the nation-state it has been impossible to dissociate the state as such from capital and from the agendas of capitalists. To be sure, at various phases of capitalist development governments have accommodated or strongly encouraged the commercial and industrial bourgeoisies, while during other periods they have restricted them. States have often been strongly identified with private capital, while some dominated by the bureaucracy and the military have set out to regulate capital in their own interests, hence state capitalism. Even in this context, however, it is wrong to see the state merely as an independent category, a political actor in its own right. States have a class character-they are dominated by men and women who have specific interests vis-à-vis the mass of the population and who mobilise resources to maintain their positions of privilege. When the formal structure of the state changes, as in a revolutionary upheaval, there may be a change in power relations to the disadvantage of capitalists. In other cases, however, as with recent developments in the former Soviet Union, many of those who formerly enjoyed power have been able to retain positions of privilege. The key issue is the actuality of class relationships.

Much of Nigel Harris’s work in the 1960s and 1970s focused directly on this issue. His analysis of Mao’s China, The Mandate of Heaven, was a corrective to the approach of those who saw the Chinese state as a new model of popular power.6 At a time when many on the left were seduced by the rhetoric of China’s rulers-by the idea of peasant uprisings, military means to power, and ‘cultural revolution’-Harris examined the reality of class relationships, concluding that a new bureaucratic state capitalism had emerged. Curiously, Cosmopolitan Capital contains no reference to The Mandate of Heaven, not even in a bibliography which lists many of Harris’s publications. Not does it undertake any analysis of class relations within a state or specific states; rather it assumes ‘the war-making state’ as an undifferentiated category which is pitched in constant struggle against capital. How shallow this approach is when compared to Harris’s earlier insights.
Drive to war

At several points in Cosmopolitan Capital Harris is at pains to point out the shortcomings of the Marxist perspective. Marx, he says, was ‘beguiled’, ‘wrong’, ‘misguided’-indeed Marx and Marxists appear so often in the text that one begins to feel that the author protests too much.7 But despite his ambitious project-to provide a world history of relations between the state and capital-nowhere does he suggest a alternative to the Marxist perspective as a whole.

This is especially striking in relation to processes of change, notably the crucial issue of the rise of industrial capitalism. Harris asserts that this system emerged because those who controlled the early centralised states of Europe wished for enhanced means to wage war. They therefore directed local representatives of commercial capital to use their resources for production of materiel: ‘The heart of the national industrial system was the making of arms and naval vessels, what ultimately became heavy industry’.8 Long periods of ‘manipulation’ of private business by the state consolidated industrial production and the special groups of capitalists who were organised to sustain it.9 Industry, then, was the outcome of the imposition upon merchants and traders-Harris’s true capitalists-of priorities dictated by the state’s drive to war. This is Harris’s challenge to Marx, to the idea that capitalism grew organically within primarily agrarian societies and that this process produced social and political upheavals which were eventually settled in the interests of a new bourgeoisie. Harris enquires rhetorically, ‘Was there then no “bourgeois revolution”?’-and answers in the negative.10

Harris’s method is to pile up data on production for war and to argue by assertion. The thousands of pikes, swords, muskets, cannon, ships, lengths of rope, sail, chain, etc demanded by Europe’s princes to wage war on their rivals amount to evidence that the rise of industry was driven by the monarchical state. Harris ignores those who have examined other more fundamental processes at work within European society in the 16th, 17th and 18th centuries. He has nothing to say on changes in class relations within agrarian society. He is silent on the growing impact of merchant capital, the spread of craft industry, and the consolidation of urban-based production-here he might have addressed the insights of Braudel, for example. What of the political upheavals associated with these changes, notably the English and French revolutions? The former hardly makes an appearance except as illustrative material for the war-making thesis-the New Model Army is a passing example of a novel type of military formation.11 Events in France are described simply as ‘a monster of popular nationalism’.12 Harris ignores the participants in these epoch-making movements. They are simply irrelevant: what is important is the volume of gunpowder, the number of wagons, the tonnage of vessels required to support an escalating drive to war. Harris has removed entirely the men and women who make history.

In the Harris account the state is foisted upon the commercial bourgeoisie. It is the state which misdirects the positive energies of merchant capital, which indeed corrupts trade, destroying the harmonious relations it has generated worldwide. As late as the mid 19th century, he suggests, commercial capital held out the promise of a world integrated by the market: ‘Cosmopolitanism seemed to promise a world without nationalism, provincialism and racism, a world in which trade harmonised all’.13

On this view commercial capital has an unblemished record. It is innocent of any active engagement with the state. To sustain this idea Harris must again ignore the mass of literature which addresses social and political change in Europe over some 400 years. There are no peasant revolts, urban uprisings, movements for reform, revolutionary crises-certainly none which engage the merchant classes. History-as in the schoolbooks of an earlier era-is the work of princes, kings and emperors. Like the rest of the population, the commercial bourgeoisie is passive and credulous.

Consider the comments by Hill on the character of merchant capital in England:

By the 17th century some merchants were as rich as peers, though their fortunes were usually made in one lifetime. Such men were quite independent of all but the government. They were busy breaking down the privileges of local corporations where these impeded; and they were using their wealth to reconstruct the society in which they lived.14

These men, and the lesser merchants and artisans, played a key role in the English Revolution of the 1640s. They were active in prolonged struggles against the Crown and in years of debate about representation and legitimate authority. To paraphrase E P Thompson, they were present at the making of the modern English state. They were less coerced or ‘manipulated’ by the state than instrumental in shaping it.

The merchant class was not composed of innocents. It contested both the old order and those movements from below which wished for more radical outcomes-for example, it facilitated the deportation of Leveller activists and later of Irish Republicans and dissenters who refused to take an oath of allegiance to the new state.15 Eric Williams notes that as a result of mass deportation the island of Monserrat in the Caribbean-a mercantile enterprise-’became largely an Irish colony’.16

There was a similar story during the revolutionary events in France. Merchant capital was deeply engaged in constructing the new order. It had blood on its hands-not only that of Louis and his supporters but of the radical activists who demanded more rights than the bourgeoisie was prepared to accommodate. The Republic, which was to have a profound influence on national movements throughout the 19th century, was unthinkable without the engagement of the merchant class. Like all capitalists they required both an apparatus of state and an ideology of belonging which could assist in the struggle to unite inherently unstable populations. They were architects of the nation-state, the particular formation which has served capitalism so well.

For Harris it is the world-embracing activity of commercial capital which is so distinctive. This, he argues, has been pursued without the involvement of vulgar political constructions such as the state. Such a view cannot be sustained.

Marx was the first to identify the relationship between colonisation and the world market:

The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black skins, signalled the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief moments of primitive accumulation.17

The first colonies were constructed upon slave labour. This was indeed driven by the market, by the activities of commercial capital, but it required more than an economic impulse. As Gai observes, the merchants, traders, slavers and plantation owners needed ‘the politicisation of space-an organised community, legislation of the use of force, rules, adjudication, and ideology’.18 The colonising powers developed elaborate codes of ownership and means of regulating disputes among traders and slave-owners. Core structures of the state which had emerged in Europe-legal systems, judicial institutions and means of enforcement-were reproduced in the colonies as mechanisms which both guaranteed the rights of owners of property and mediated relations among them.19 Here the colonial enterprise was underwritten by states in which the merchant class had a stake of its own.

The ruling families of Europe struggled to maintain control of the monarchical state-and most eventually lost. They were also forced to surrender their early colonial possessions. The states which emerged reflected above all the interests and ambitions of commercial capital. Many of the wealthiest people in Britain’s American colonies were slave-owners or were closely associated with the trade, among them leading activists of the independence movement. Samuel Johnson, a strong opponent of slavery, observed, ‘How is it that we hear the loudest yelps for liberty among the drivers of negroes?’20

The American traders and planters demanded a state adequate to their specific needs. Blackburn comments that, ‘the most prominent champions [of the American Revolution] included slaveholders and carrying-trade merchants who looked forward to an unfettered advance of the North American involvement in plantation agriculture’.21 By the mid 19th century similar movements had broken up the Spanish and Portuguese empires in Latin America-in less than 100 years power relations across the Americas changed comprehensively, leaving local merchant capital in an influential position. Rather than being overwhelmed by an abstract, disembodied state, the real individuals who made up the trading networks had engaged in flesh and blood struggles which brought into being new national states which they hoped would better serve their own interests.

By the late 19th century the US and most European governments were attempting to regulate commercial capital much more closely. Even at this stage, however, merchant adventurers played a leading role in their own right. In an earlier era they had been the active element in what Kiernan calls ‘private enterprise imperialism’, whereby the state endorsed organisations such as the various East India Companies.22 During the 1870s and 1880s such activities were resumed in Southern Africa, West Africa and China. In 1889 the British South Africa Company was chartered, headed by the profiteer Cecil Rhodes. He made vast sums from gold and diamonds, using much of his fortune to finance land grabs which the British authorities were pleased to endorse. When he created the colony of Rhodesia Europeans flooded in-traders, speculators, carpet-baggers and ‘buccaneers’.23 Similar operations were conducted across the continent-there was a British East Africa Company, a Royal Niger Company, a Deutsche Ostafrikanische Gesellschaft. Their pioneering activities were invariably associated with the drawing of new colonial boundaries and the establishment of new states.

It was not clear, comments Porter, whether the state was ‘the tool of mammon’ or the capitalists served imperial interest, but in many places diplomats and capitalists ‘were found suspiciously together’.24 This observation sums up neatly the continuing relationship between senior state functionaries and private capitalists in general.
World war and recession

Why did the states of Europe launch the catastrophic wars of the 20th century? For Harris they are the product of state structures themselves: ‘War was the very raison d’être of the nation, the sacred affirmation of its existence and superiority, its historical validation, beyond all calculations of accident, let alone profit and loss’.25

World wars were fought, Harris insists, because states were bound to fight them. He is uninterested in precipitating factors, including the specific conjuncture of global rivalries and the domestic problems of European governments. More important is the industrial character of the conflict: the number of artillery pieces produced, shells fired, aircraft manufactured, vessels launched, men slaughtered. In the case of the Second World War Harris is concerned above all with the construction of the war economy-the activities of states which declared for autarkic strategies in which ‘the government made itself supreme’, bringing business as a whole under close control and preparing for new conflicts.26 This is perhaps the most startling section of Cosmopolitan Capital, for the drive to war takes place as if the greatest crisis in capitalist history was merely incidental. The Great Depression appears as an extrinsic factor, and the events of the 1920s and 1930s which preceded and accompanied it-including revolutionary turmoil across Europe-have no place in the story.

Harris does go to pains to examine the rise of fascism-or at least one aspect of it. He is concerned to demonstrate that in Germany the Nazis held no brief for big business. They were not a party of capitalism; rather they were the ultimate creation of the war-making state. He looks in detail at relations between Hitler and the barons of German industry and concludes that ‘business was reduced to being an instrument of the state, not at all the reverse’.27 The precise relationship between the Nazi Party and business is a matter of debate, but what is not at issue, surely, is that fascism was a violent opponent of independent mass struggles. Its mission was to bring order to a system in profound crisis-to destroy workers’ movements in evidence across Europe and especially assertive in Germany. Reflecting the anxieties of capitalism in general-above all of the fearful small capitalists-it waged war against the movement from below. The ‘war-making state’ was in this sense a state that struggled to preserve capitalism by liquidating its most potent enemies.

It is with a sense of relief that Harris reaches the calm waters of the post-war era. He notes the long boom of the 1950s and 1960s, which ‘lifted almost all the boats, transforming the living conditions, the style of life and the psychologies of millions of people’.28 If only such growth could be resumed, he suggests, all would benefit.

For Harris globalisation offers this very possibility. Over the past 30 years, he proposes, capital has defied the best efforts of states to continue regulation. New networks of exchange have eroded national boundaries, bringing together physically distant regions, promoting new efficiencies and seeding prosperity across the continents. The agent of this transformation is trade: ‘inexorably world markets, step by step, are adjusting political behaviour and responses, creating, all unseen, a new world order’.29

If only governments would understand. Their participation could speed progress, serving the interests of all. But many, Harris suggests, are stuck in the past. They continue to see the state as a means to personal advance and influence, they are mere ‘rent-seekers’ clinging on to power at the cost of the majority.30 Third World governments unable to reform bear responsibility for the consequences. The crisis in Africa, for example, is an outcome of the failure of its rulers to allow the market to dictate the pace of change. Here regimes were ‘too late to change and so unwilling to abandon the national capital project’.31 Africa could have learned from market-led policies in other parts of the world; instead its people are saddled with corruption and with rulers who may be no more than ‘military mafia’.32

Harris is shameless. He writes off centuries of ruthless exploitation of sub-Saharan Africa-not just slavery, European settlement, and the colonial state, but generations of one-dimensional ‘development’ which have produced vulnerable monocultural economies. The role of the latter has in fact been to satisfy the demands of commercial capital-the heroic figures of Harris’s world narrative. To assure the flow from Africa of coffee, cocoa, cotton, copper, diamonds and much more, Western governments have endorsed regimes prepared to do their bidding. They have bought up a whole generation of rulers, or where this has proved difficult, created them. The rivalries built into colonial states have been exploited to ensure instability-arms have poured in and all the while crops and minerals vital to production in distant parts of the world have flowed out. The great trading multinationals have made merry while hundreds of millions of people have been pushed to the margin of survival-or beyond.

On his account transnational institutions which have led the offensive are not guilty. Their agendas, says Harris, have had no impact on a process ‘driven by markets’.33 At this point one feels that Harris is commenting on events in another galaxy: is he unaware of the pressures exerted on governments which baulk at Structural Adjustment Programmes (SAPs)? Is there no relationship between arms deliveries to Third World rulers and the latter’s willingness to crush opposition to IMF reforms?

Harris ploughs on, blaming the Third World in general and Africa in particular for an inability to change. This is the Washington consensus-the view that attributes failures of development to an imperfect alignment with the world market, the task being to neutralise or remove recalcitrant elements, drive back the state and open local economies to the proper disciplines of competition. It is difficult to see what separates Harris from the strategists of the World Bank, the IMF or the WTO. For several years he has worked as a World Bank consultant: does this account for his attachment to their ghastly creed?

Harris writes as if resistance to market-led policies has been restricted to unco-operative governments-local ‘mafia’. He has not noticed that since the IMF introduced its first SAP in the mid-1970s, there have been hundreds of mass protests involving hundreds of millions of people. According to Walton and Seddon, between 1976 and 1992 alone there were almost 150 such events-by the 1980s they had become so common they were routinely described as ‘IMF riots’.34 Many forced governments and the IMF into retreat-to reinstate food subsidies, fixed prices or emergency food stocks. Were the participants simply perverse: should they have accepted the discipline of the market and paid the higher prices? Should they have starved?

Harris likewise ignores the emergence of the anti-capitalist and anti-globalisation movements. His sole reference to the phenomenon is to compare the protesters of Seattle with J M Keynes. Neither, he comments, wished to be at the mercy of world markets; both have pursued the illusion that states can intervene to ameliorate their effects on the mass of people.35 The collective has no role in bringing change; rather we must place our faith in new bodies which have appeared in the wake of the retreating state-non-governmental organisations (NGOs). They constitute ‘all that is left of a fundamental critique of modern society, but also the beginning of a global political forum that reaches well beyond the conventional circle of world power and influence’.36 Some NGOs do express democratic sentiments-but most do not and are indeed part of the problem.

Harris closes his book with another appeal to the liberating powers of capital. The ‘real bourgeois revolution’ is on its way, he intones. Echoing Adam Smith he promises that ‘the unknown-and unintended-outcome of market transactions’ is to be the guarantee of universal well-being.37 The evidence is already with us: war, Harris says, is a thing of the past and only minor local conflicts remain to be resolved. Oh dear!-has he noticed those little problems in Afghanistan, in Iraq, and the promises of conflicts in Syria, Iran, Korea? The state appears to be fighting fit-and fighting for profit, clearing the way in Iraq for Bechtel, Halliburton and Exxon. As before, politicians and capitalists are ‘found suspiciously together’. It is the same old imperialism.

Unlike Harris vast numbers of people worldwide believe that the world is a more dangerous place-and fortunately they are prepared to do something about it.


1. See N Harris, National Liberation (London, 1990), and Harris’s contribution to an exchange with Chris Harman and Alex Callinicos in International Socialism 51, 53 and 54: ‘A Comment on National Liberation’, International Socialism 53 (Winter 1991).

2. N Harris, The Return of Cosmopolitan Capital (London, 2003), p264.

3. As above.

4. World Bank Development Report (New York, 2000), p5.

5. K Ohmae, The End of the Nation State (London, 1995),p78.

6. N Harris, The Mandate of Heaven: Marx and Mao in Modern China (London, 1978).

7. Harris’s work still shows the influence of the Marxist perspective within which he produced his early work. Unexplained references to combined and uneven development and to state capitalism may puzzle readers of Cosmopolitan Capital who are unfamiliar with the work of Leon Trotsky and of Tony Cliff.

8. N Harris, Cosmopolitan Capital, as above, p58.

9. As above, p88.

10. As above, p89.

11. As above, p70.

12. As above, p71.

13. As above, p86. Can Harris really mean that the merchant capitalists of the Atlantic slave trade and those who plundered India and later Africa were making ‘a world without nationalism…and racism’-a world of harmony? They were in fact leading actors in constructing racism, inexplicable without the colonial experience in general and that of enslavement in particular.

14. C Hill, Reformation to Industrial Revolution (London, 1969), p53.

15. As above, p164.

16. E Williams, Capitalism and Slavery (London, 1964), p13.

17. K Marx, Capital, Vol I (London, 1954), p703.

18. Y Gai, ‘Migrants Workers, Markets and the Law’ in W Gunguru (ed), Global History and Migrations (Boulder, 1997), p145.

19. See R S Dunn, Sugar and Slaves (New York, 1973) for a detailed account of slaving and colonial states in the Caribbean.

20. H Thomas, The Slave Trade (London, 1997) p476.

21. R Blackburn, The Making of New World Slavery (London, 1995), p472.

22. V G Kiernan, Colonial Empires and Armies 1815-1960 (London, 1982), p98.

23. B Porter, The Lion’s Share (London, 1975), p149.

24. As above.

25. N Harris, The Return of Cosmopolitan Capital, as above, p78.

26. As above, p96.

27. As above, p114.

28. As above, p129.

29. As above, p219.

30. As above, p164.

31. As above, p166.

32. As above, p168.

33. As above, p170.

34. J Walton and D Seddon, Free Markets and Food Riots (Oxford, 1994), pp39-40.

35. N Harris, The Return of Cosmopolitan Capital, as above, p97.

36. As above, p248.

37. As above, p264.