Seasons of Self-Delusion: Opium, Capitalism and the Financial Markets

in Historical Materialism
Restricted Access
Get Access to Full Text
Rent on DeepDyve

Have an Access Token?



Enter your access token to activate and access content online.

Please login and go to your personal user account to enter your access token.



Help

Have Institutional Access?



Access content through your institution. Any other coaching guidance?



Connect

Abstract

To grasp current trends within capitalism without abandoning the framework of Marx’s Capital we need to return to the category of ‘fictitious capital’ and make it central to our explanations. Based on the 2012 Isaac and Tamara Deutscher Memorial Lecture, this essay combines reflections on Marx’s account of ‘fictitious capital’; an investigation of the role of bills of exchange; and an analysis of the recent turmoil in British and US banking. It looks at the way the opium trade, financed through the London bill market, integrated a constellation of interests in the City with the labour of peasant households in India as parts of a unified accumulation process. Opium was vital to the fortunes of British capitalism for most of the nineteenth century. The merchant banks that were the mainstay of Britain’s form of capitalism were also the key element in the re-emergence of global finance in the postwar period. The concluding part of the paper deals with the current banking crisis and follows Hilferding in arguing that by providing liquidity to the markets for fictitious capital, speculation plays a crucial role in sustaining profitability for the bigger capitals.

Seasons of Self-Delusion: Opium, Capitalism and the Financial Markets

in Historical Materialism

Sections

References

AltvaterElmar PanitchLeoAlboGregoryChibberVivek ‘From Subprime Farce to Greek Tragedy: The Crisis Dynamics of Financially Driven Capitalism’ Socialist Register 2012: The Crisis and the Left 2011 London Merlin Press

AndersonPerry ‘The Figures of Descent’ New Left Review 1987 I 161 20 77

AugarPhilip The Death of Gentlemanly Capitalism: The Rise and Fall of London’s Investment Banks 2001 Harmondsworth Penguin Books

AugarPhilip Reckless: The Rise and Fall of the City 2010 London Vintage

BlakeRobert Jardine Matheson: Traders of the Far East London Weidenfeld and Nicolson

BurnGary The Re-Emergence of Global Finance 2006 Basingstoke Palgrave Macmillan

ChapmanStanley D. Merchant Enterprise in Britain: From the Industrial Revolution to World War I 1992 Cambridge Cambridge University Press

CheongW.E. ‘The Crisis of the East India Houses, 1830–1834’ Revue internationale d’histoire de la banque 1974 9 107 133

CohanWilliam D. House of Cards: How Wall Street’s Gamblers Broke Capitalism 2010 Harmondsworth Penguin Books

CohanWilliam D. Money and Power: How Goldman Sachs Came to Rule the World 2011 Harmondsworth Penguin Books

CoudertVirginieGexMathieu ‘Credit Default Swap and Bond Markets: Which Leads the Other?’ Financial Stability Review (Banque de France) 2010 14 161 166 available at: <http://www.banque-france.fr/fileadmin/user_upload/banque_de_france/Economists_and_researchers/etude19_rsf_1007.pdf>.

DelatteAnne-LaureGexMathieuLópez-VillavicencioAntonia ‘Has the CDS Market Influenced the Borrowing Cost of European Countries during the Sovereign Crisis?’ Journal of International Money and Finance 2012 31 3 481 497

EdgertonDavid ‘Liberal Militarism and the British State’ New Left Review 1991 I 185 138 169

EngelenEwaldErtürkIsmailFroudJulieJohalSukhdevLeaverAdamMoranMickNilssonAdrianaWilliamsKarel After the Great Complacence: Financial Crisis and the Politics of Reform 2011 Oxford Oxford University Press

FarooquiAmar Smuggling as Subversion: Colonialism Indian Merchants and the Politics of Opium 1790–1843 1998 New Delhi New Age International

FarooquiAmar Opium City: The Making of Early Victorian Bombay 2006 Gurgaon Three Essays Collective

FryRichard A Banker’s World: The Revival of the City 1957–1970. Speeches and Writings of Sir George Bolton 1970 London Hutchinson

GreenbergMichael British Trade and the Opening of China 1800–42 1951 Cambridge Cambridge University Press

GrossmannHenryk Das Akkumulations- und Zusammenbruchsgesetz des kapitalistischen Systems (Zugleich eine Krisentheorie) 1970 [1929] Second Edition Frankfurt Verlag Neue Kritik

GrossmannHenryk The Law of Accumulation and Breakdown of the Capitalist System: Being also a Theory of Crises 1992 London Pluto Press translated and abridged by J. Banaji

HilferdingRudolf WatnickMorrisGordonSam Finance Capital: A Study of the Latest Phase of Capitalist Development 1985 London Routledge & Kegan Paul

JonesGeoffrey Merchants to Multinationals: British Trading Companies in the Nineteenth and Twentieth Centuries 2000 Oxford Oxford University Press

KynastonDavid The City of London Volume 1: A World of Its Own 1815–1890 1994 London Chatto & Windus

KynastonDavid The City of London Volume 2: Golden Years 1890–1914 1995 London Chatto & Windus

Le FevourEdward Western Enterprise in Late Ch’ing China: A Selective Survey of Jardine Matheson and Company’s Operations 1842–1895 1968 Cambridge, MA. Harvard University Press

LewisMichael The Big Short: Inside the Doomsday Machine 2011 Harmondsworth Penguin Books

LiPumaEdwardLeeBenjamin Financial Derivatives and the Globalization of Risk 2004 Durham, NC. Duke University Press

MarxKarl A Contribution to the Critique of Political Economy 1970 [1859] Moscow Progress Publishers

MarxKarl Theories of Surplus-Value Part III 1971 [1863] Moscow Progress Publishers

MarxKarl NicolausMartin Grundrisse: Foundations of the Critique of Political Economy (Rough Draft) 1973 [1939/41] Harmondsworth Penguin Books

MarxKarl ‘British Commerce and Finance’ Collected Works of Karl Marx and Frederick Engels 1980a [1858] Volume 16 London Lawrence & Wishart Marx and Engels 1858–60

MarxKarl ‘History of the Opium Trade’ Collected Works of Karl Marx and Frederick Engels 1980b [1858] Volume 16 London Lawrence & Wishart Marx and Engels 1858–60

MarxKarl ‘Zur Kritik der politischen Oekonomie’ Marx-Engels-Gesamtausgabe 1980c [1859] Berlin Dietz Verlag Division II Volume 2 Ökonomische Manuskripte und Schriften 1858–1861

MarxKarl FernbachDavid Capital: A Critique of Political Economy. Volume Three 1981 [1894] Harmondsworth Penguin Books

MayhewNicholas Sterling: The Rise and Fall of a Currency 1999 Harmondsworth Allen Lane

McDonaldLarryRobinsonPatrick A Colossal Failure of Common Sense: The Incredible Inside Story of the Collapse of Lehman Brothers 2009 London Ebury Press

McRaeHamishCairncrossFrances Capital City: London as a Financial Centre 1985 London Methuen

NorfieldTony ‘Derivatives and Capitalist Markets: The Speculative Heart of Capital’ Historical Materialism 2012 20 1 103 132

RichardsJohn F. ‘The Indian Empire and Peasant Production of Opium in the Nineteenth Century’ Modern Asian Studies 1981 15 1 59 82

RichardsJohn F. ‘The Opium Industry in British India’ The Indian Economic and Social History Review 2002 39 2/3 149 180

Royal Commission on Opium Minutes of Evidence Taken Before the Royal Commission on Opium from 3rd to 27th January 1894. Volume III 1894a London Her Majesty’s Stationery Office

RichardsJohn F. Minutes of Evidence Taken Before the Royal Commission on Opium between 18th November and 29th December 1893; with Appendices. Volume II 1894b London Her Majesty’s Stationery Office

SiddiqiAsiya SiddiqiAsiya ‘The Business World of Jamsetjee Jejeebhoy’ Trade and Finance in Colonial India 1750–1860 1995 New Delhi Oxford University Press

StulzRené M. ‘Credit Default Swaps and the Credit Crisis’ Journal of Economic Perspectives 2010 21 1 73 92

TrockiCarl A. Opium Empire and the Global Political Economy: A Study of the Asian Opium Trade 1750–1950 1999 London Routledge

WhitcombeElizabeth Agrarian Conditions in Northern India. Volume I: The United Provinces under British Rule 1860–1900 1971 Berkeley University of California Press

WiganDuncan ‘Credit Risk Transfer and Crunches: Global Finance Victorious or Vanquished?’ New Political Economy 2010 15 1 109 125

WilliamsHywel Britain’s Power Elites: The Rebirth of a Ruling Class 2006 London Constable

WongJ.Y. Deadly Dreams: Opium and the Arrow War (1856–1860) in China 1998 Cambridge Cambridge University Press

ZhangYangwen The Social Life of Opium in China 2005 Cambridge Cambridge University Press

1.

LeathamLetters on the Currencycited in Marx 1981 p. 526.

3.

Marx 1981p. 536.

4.

Marx 1980app. 35–6.

5.

Mayhew 1999p. 199.

6.

Marx 1981p. 594.

7.

Marx 1981p. 599.

8.

Marx 1981p. 609.

9.

Marx 1981p. 597.

10.

Marx 1981p. 601.

11.

Marx 1981p. 600.

12.

Marx 1981p. 608.

13.

Marx 1981p. 625.

15.

Marx 1981p. 599.

16.

Marx 1981p. 598.

17.

Marx 1981p. 599.

18.

Marx 1981p. 635; cf. p. 650 ‘devalued securities’.

19.

Burn 2006p. 16.

20.

Burn 2006p. 27.

22.

Burn 2006p. 101.

23.

Burn 2006p. 184.

24.

Burn 2006p. 186. Bolton’s views are best represented in Fry 1970.

25.

Mayhew 1999p. 199.

26.

Marx 1981p. 621.

27.

Kynaston 1995p. 9.

28.

McRae and Cairncross 1985p. 7.

29.

McRae and Cairncross 1985p. 8.

30.

Kynaston 1994p. 181.

31.

Kynaston 1994p. 68.

32.

Kynaston 1995p. 294.

33.

Farooqui 2006p. 99.

34.

Cheong 1974p. 109.

35.

Greenberg 1951p. 164.

36.

Richards 2002p. 168.

37.

Farooqui 2006pp. 25ff. The involvement of Indian capital is discussed at length in Farooqui 1998 Chapter 5 ‘Smuggled Malwa Opium and Indigenous Business Enterprise’.

38.

Siddiqi 1995p. 198.

39.

Siddiqi 1995p. 199.

40.

Jones 2000p. 33.

41.

Le Fevour 1968p. 26.

42.

Greenberg 1951p. 34.

43.

Cheong 1974p. 115.

44.

Cheong 1974p. 114.

45.

Greenberg 1951p. 37.

46.

Chapman 1992p. 212.

47.

Chapman 1992pp. 212ff.

48.

Marx 1981p. 676.

50.

Marx 1980bp. 16.

51.

Greenberg 1951p. 104.

52.

Marx 1980cp. 201; Marx 1970 p. 140 (translation modified).

53.

Marx 1980bp. 19.

54.

Richards 1981pp. 69–70: ‘From Agra marking the western boundary to just beyond Monghyr in the southeast the opium region stretched more than five hundred miles along the Ganges River . . . over a million peasants received government licenses to grow opium’.

55.

Royal Commission on Opium 1894ap. 26.

56.

Royal Commission on Opium 1894app. 277–8.

57.

Whitcombe 1971p. 32; Richards 1981 p. 72.

58.

Royal Commission on Opium 1894ap. 92.

60.

Richards 1981pp. 73–4.

61.

Royal Commission on Opium 1894ap. 27.

62.

Royal Commission on Opium 1894ap. 138.

63.

Royal Commission on Opium 1894ap. 50.

64.

Royal Commission on Opium 1894bp. 321.

65.

Richards 2002p. 169.

66.

Richards 2002p. 163.

67.

Zhang 2005pp. 104–5.

68.

Trocki 1999p. 91.

69.

Blake 1999pp. 90–1.

70.

Blake 1999p. 77.

71.

Wong 1998p. 311.

72.

Blake 1999p. 106.

73.

‘Widely respected’: Blake 1999p. 114.

74.

Wong 1998pp. 219–21.

75.

Wong 1998p. 265.

76.

Marx 1980bp. 13.

77.

Anderson 1987p. 34.

78.

Wong 1998pp. 254–5 310.

79.

Anderson 1987p. 69.

80.

Edgerton 1991; Williams 2006p. 201.

81.

Wong 1998p. 404 Table 16.10.

82.

Kynaston 1994p. 340.

83.

Kynaston 1994pp. 377ff.

84.

Marx 1980ap. 34.

85.

Kynaston 1994p. 429.

86.

Kynaston 1994p. 434.

87.

Augar 2001p. 75.

88.

Augar 2010p. 18.

89.

Cohan 2010p. 250.

90.

McDonald and Robinson 2009p. 169.

91.

LiPuma and Lee 2004pp. 97ff.

92.

Cited in Norfield 2012p. 114.

93.

Marx 1971p. 122.

94.

Grossmann 1970pp. 530–72; Grossmann 1992 pp. 191–3.

95.

Grossmann 1970p. 536; Grossmann 1992 p. 191.

96.

Hilferding 1985Chapter 8 ‘The Stock Exchange’.

97.

Hilferding 1985p. 144.

98.

Marx 1973p. 659: ‘The necessary tendency of capital is therefore circulation without circulation time and this tendency is the fundamental determinant of credit and of capital’s credit contrivances’; p. 671: ‘The tendency of capital is circulation without circulation time; hence also the positing of the instruments which merely serve to abbreviate circulation time as mere formal aspects posited by it . . .’; and pp. 630–1 where he refers to the ‘transition of capital from one phase to the next at the speed of thought’.

99.

Hilferding 1985p. 139.

100.

Wigan 2010p. 119.

101.

McDonald and Robinson 2009p. 322.

103.

Cohan 2010p. 425.

104.

Cohan 2010p. 238.

105.

Cohan 2010p. 415.

106.

Cohan 2010p. 15.

107.

Cohan 2010p. 539.

108.

Cohan 2010p. 559.

109.

Cohan 2010p. 526.

110.

Cohan 2010p. 559.

111.

Cohan 2011p. 589.

112.

Cohan 2011p. 590.

113.

Stulz 2010p. 76.

114.

Cohan 2011p. 507.

115.

Cohan 2011p. 540.

116.

Altvater 2011pp. 275 280.

Information

Content Metrics

Content Metrics

All Time Past Year Past 30 Days
Abstract Views 37 37 18
Full Text Views 59 59 37
PDF Downloads 8 8 5
EPUB Downloads 2 2 2