Jairus Banaji’s book A Brief History of Commercial Capitalism, first published in 2020, sets out to uncover the deep historical roots of capitalist development. The book touches upon important theoretical debates, especially within the Marxist tradition, about the origins of capitalism.
Banaji’s work brings into question several entrenched narratives about global economic history, including the vision of an economically regressive Middle Ages and the idea of a linear transition to modernity. The pictures that Banaji sketches out through a breathtaking set of illustrative cases from around the globe, spanning nearly a millennium, raises many fundamental issues for anyone who wants to understand how the world economic system came to be and how it might continue to develop in the future.
A Brief History of Commercial Capitalism has already had a major impact in the world of scholarship and attracted many responses from Banaji’s fellow historians. But it should be of great interest to nonspecialists as well. In what follows, I will give a brief summary of Banaji’s intellectual background and the key arguments that he makes, before looking at the discussion that the book has provoked.
Jairus Banaji was born in Poona in 1947, the year India gained its independence, and was schooled in England before returning to his native country to be a political activist. In his scholarly work, Banaji is a historian of the late antique and medieval Mediterranean and Middle East whose interests also lie in the long history of capitalism. His work touches on a variety of topics, including the fate of peasantries in the context of a rapidly globalizing economy and the history of the mercantile economy over the last millennium.
Banaji’s main objective in A Brief History is to re-center the concept of commercial capitalism as a key category for investigating the formation of the modern global economy. In his work, this term is used to describe a profit-driven economic system whereby merchants employ their capital not only to circulate commodities but also to gain direct control over production and thus subordinate it to their interests.
Banaji’s emphasis on merchant control over production is a frontal attack on the traditional Marxist dichotomy between the world of commerce (the “sphere of circulation”) and that of production — a dichotomy that led Marxist economists and historians such as Maurice Dobb to discount the very idea of commercial capitalism as a contradiction in terms.
As Banaji points out, it was largely historians working outside the Marxist tradition, or more freely engaging with it, who adopted the category. The most notable case is Fernand Braudel, who defined commercial capitalism as the most useful term to describe the nature of production and mercantile exchange in Europe and the Mediterranean between the fifteenth and eighteenth centuries.
A Brief History is the last in a series of volumes tackling these issues, following Agrarian Change in Late Antiquity (2001), Theory as History (2010), and Exploring the Economy of Late Antiquity (2016). While Banaji writes from within the Marxist scholarly tradition, his key reference points in the Marxist galaxy differ from those of most Western Marxist historians. In particular, Banaji draws on the work of three Russian scholars from the early twentieth century: the historian Mikhail N. Pokrovsky (1868–1932), the economist Yevgeni A. Preobrazhensky (1886–1937), and the agrarian economist Alexander V. Chayanov (1888–1939).
Pokrovsky, Preobrazhensky, Chayanov
Mikhail N. Pokrovsky was one of the most influential intellectuals in Soviet society in the 1920s. He enjoyed enormous, in fact unequalled, prestige among Soviet historians of his time. In a radical departure from what would become enshrined as the orthodox Marxist account under Joseph Stalin, Pokrovsky’s interpretation of Russian history emphasized the centrality of commercial capital as an agent of socioeconomic change between the seventeenth and nineteenth centuries. However, he explicitly stated that the existence and operation of commercial capital did not mean that a capitalist economy had come into being.
Yevgeni A. Preobrazhensky was a pioneering student of the consequences of the “lateral penetration” of industrial capital into the countryside. Like Pokrovsky before him, Preobrazhensky saw petty commodity production as being typical of commercial capitalism while also being one of the chief constraints on its further expansion. In line with Agrarian Marxists such as Lev N. Kritsman, Preobrazhensky thus saw capitalism as a force uprooting the peasantry and eventually bringing about its demise.
He believes that this happened as a result of two processes. On the one hand, there was the internal development of capitalist relations within the ranks of the peasantry itself, with the formation of a class of rich peasants that controlled large-scale farming. On the other hand, in more sweeping and catastrophic fashion, there was the external subordination of rural areas to large-scale industry, with the creation of a class of landless peasants working in cash-crop farming.
Alexander V. Chayanov was one of the major agrarian economists of his era. In his work The Theory of Peasant Economy, Chayanov stressed the resilience of peasant households and their ability to adapt so they could withstand the onslaught of capitalism, in direct contrast to the agrarian Marxists and Preobrazhensky. He argued that the development of capitalist tendencies and productive concentration in agriculture did not necessarily result in peasant dispossession and the rise of large capitalist farms.
For Chayanov, commercial and finance capital could also exercise its control more subtly by establishing an economic hegemony over considerable sectors of agriculture. Meanwhile, those sectors could remain much the same as before when it came to production — that is, composed of small-scale peasant undertakings based on family labor.
Banaji’s work shows that we can reconcile these apparently incompatible models. Each describes a different possible trajectory of capital penetration in the countryside. But they also reflect different phases of Banaji’s own intellectual pathway.
In his earlier writings, Banaji embraced Preobrazhensky’s idea of capital’s lateral penetration to show the destructive effect of industrialization on the peasantry in late nineteenth and early twentieth-century Russia. In that context, Preobrazhensky’s model was useful as a point of comparison for Banaji’s analysis of peasantries all over the world. In subsequent studies, however, Banaji came to view Preobrazhensky’s reconstruction as just one of the possible ways for industrial capital to penetrate into the countryside.
He was influenced in this turn by a renewed interest in the work of Chayanov, particularly the works that Henry Bernstein later developed and expanded. Chayanov’s conceptualization of the relation between the peasantry and capital therefore takes center stage as the primary source of inspiration for Banaji’s A Brief History.
This reassessment of Chayanov’s work leads Banaji to include in his model the historical circumstances in which peasant households withstood the penetration of capitalism. We have to understand such “resilience” in the sense that peasant households were not uprooted but “incorporated” — an act which in turn allowed for conflict and resistance on their part. While such households continued to exist in vast numbers, their cycle of social reproduction was now largely and crucially shaped by capital.
Merchants and Manufacturing
In A Brief History, unlike his earlier works, Banaji is not so concerned with drawing a theoretical distinction between what Karl Marx called “the capitalist mode of production” and non-capitalist modes. Instead, he deals with capitalism in less normative terms, contending in particular that a kind of “commercial capitalism” existed long before industrialization in certain regions of the world, in a period ranging from the twelfth century (or even earlier) to the eighteenth.
While Banaji does not offer a formal definition of commercial capitalism, we can capture its meaning by combining the analysis in the book with his previous theoretical writings. Fernand Braudel saw capitalism as a global network of bankers and big merchants who presided over the economy of everyday life from their urban financial centers while lacking any direct control over the primary producers. Banaji, on the other hand, identifies the long history of capitalism in terms of its characteristic social relations.
Capitalism is a system in which the holders of capital have limited control of the means of production and then reduce labor to a factor within the production process — a simple commodity one can buy and sell. The confrontation between a capitalist and a peasant or a craftsman — a person who survives by selling his or her labor — occupies the very center of Banaji’s analysis.
Starting from this distinction, he argues against the widespread Marxist view that mercantile wealth does not constitute capital in the Marxian sense, because it remains external to the process of production. Since merchant wealth is, according to Marx, separated from what he called the real subsumption of labor to capital, it merely skimmed off the products of the primary producers, and merchants made profits by selling them.
For his part, Banaji argues that mercantile wealth does indeed consist of capital, and that from the twelfth to the eighteenth centuries, merchants systematically used this capital to control and to exploit the labor of a significant part of the population all over the Afro-Eurasian world. He identifies two realms of production where the penetration of commercial capital were particularly significant.
The first was in the sector of cash-crop agriculture, where “commercial capitalists” appropriated vast amounts of unpaid family labor through various expedients, thereby imposing relations of debt on peasants. Commercial capitalists were landowners who became merchants; sometimes they were also merchants (including moneylenders) who became interested in controlling cash-crop estates. They formed a floating category that is historically very hard to pin down.
Despite their differences, the productive base for most of the produce trades was a mixed labor force. This is a point that Banaji has demonstrated in his examination of the small peasants of Deccan in the late nineteenth century, and it receives further support from the work of Lorenzo Bondioli on the eleventh-century Egyptian peasantry.
The second sector is that of craft production, or “merchant manufacturing,” as Banaji calls it. In this sector, merchants forced the rural and urban poor to process silk, wool, and cotton for the market. This meant that they were not merely selling their surplus but working for the merchants on “a cottage-based piece rate.”
Trajectories of Accumulation
In A Brief History, Banaji scrutinizes the “trajectories of accumulation” leading from commercial to industrial capitalism. Whereas merchant capitalists prize the opening of agriculture — along with mining, the exploitation of marine resources, etc. — to capitalist exploitation, industrial capitalists carry that process to a different level altogether. The sheer scale of subordination, the nature of its impact, and the degree of subsumption all distinguish the subjugation of the countryside to industrial accumulation from earlier cycles of “capitalism.”
Not only does Banaji see a rapid intensification in the mechanisms of exploitation under industrial capitalism. He also notices a radical shift in the repartition of profit shares between merchants and industrialists to the benefit of the latter. In the late nineteenth century, the economic actors directly controlling production thus succeeded in marginalizing the merchants, achieving the subordination of commercial capital to industrial capital described by Marx.
This seems to be the clue to an enduring separation in Banaji’s view between the era of commercial capitalism and that of industrial capitalism, an era fully deserving of the label of a capitalist mode of production. However, these trajectories from commercial to industrial capitalism were multilinear in time and space. They did not follow a rigid sequence of stages, and they were not irreversible, as contemporary trends demonstrate.
The global retailers operating on the world market nowadays control manufacturing through the flows of commercial capital without owning the means of production. As Nelson Lichtenstein observed:
Retail hegemony in the twenty-first century echoes, even replicates, features of the mercantile regime once presided over by the great seventeenth- and eighteenth-century merchants and banking houses of Amsterdam, Hamburg, and the City of London.
In short, a sort of Braudelian entrepreneur has “returned to undergird the contemporary global system.”
Banaji’s exposition of “commercial capitalism” can therefore accommodate several levels and varying degrees of integration between production and circulation, pointing to the driving force of capital as a common denominator that cuts across different configurations. The resulting model of commercial capitalism is one of uneven and combined development. This model rejects the notion of a linear succession between different modes of production — ancient, feudal, and capitalist — and rescues the histories of capitalism from Eurocentrism and Orientalism alike.
Since its publication in 2020, A Brief History has attracted the attention of a broad and diverse community of specialists in the field of the history of capitalism, leading to multiple reviews of Banaji’s work. While each author voiced different concerns about various aspects of his vision of capitalism, we can identify three broad themes: (1) the definition of commercial capitalism; (2) the relation between the rise of commercial capitalism and the state; and (3) the impact of commercial capitalism and colonialism on social life.
The first criticism arises from Banaji’s loose definition of commercial capitalism. Lorenzo Bondioli notes that the infrastructures of commercial capitalism Banaji has identified as first appearing in the ninth century CE all have deeper roots than A Brief History suggests. Their foundations were laid in the late antique period (occasionally with roots going back to antiquity proper), and they continued to operate without any dramatic discontinuities into the Middle Ages.
Starting from this observation, Bondioli isolates three possible definitions of capitalism and tries to outline a non-teleological relationship between them. First, there is the capitalism of capitalist merchants who deployed monetary wealth as capital by extracting surplus value from variously subordinated producers; second, there is the capitalism of colonial mercantile states that put organized violence in the service of accumulation by capitalist merchants; third, there is the capitalism of modern industrial capitalist society — in other words, of a fully-fledged capitalist mode of production.
State intervention in the world economy is the second criterion Banaji deploys in his analysis of commercial capitalism. Banaji sees in the “collusion between commerce and state” — that is, in the rise of mercantilist states in late medieval and early modern Europe — a significant shift in the process of capital accumulation and labor subordination. Yet we can observe “collusion” per se, and particularly the involvement of merchants in state finances, in many historical contexts.
This suggests that, as Martha Howell clearly demonstrates, it was not the mere presence of a state colluding with merchants that determined an acceleration in the scale of capital accumulation. Neither was it just any kind of state — such as the Muslim tributary states or Chinese dynasties examined by Andrew Liu — that determined a shift in the scale of capital accumulation and labor subordination.
Rather, it was only the state serving as an exporter of aggression and violence that controlled such a shift. This insight also re-centers the key link between commercial capitalism and colonialism, stressing that it was colonial violence that brought about a change in the quality and functioning of commercial capital.
With this point, we move to the third item of contention emerging from Banaji’s account: the relationship between commercial capitalism and colonialism. As both Priya Satya and Sheetal Chhabria perceptively observe, Banaji does not disentangle race from class or caste from class. Yet these distinctions matter, as they allow us to diagnose the point at which commercial capitalism intersected with colonialism and started to depend on racialization or caste identity.
This lacuna also points in the direction of a broader criticism. In his analysis of the relations of production, Banaji does not always make clear how commercial capitalism violently impacted and remade the social life of people subordinated to it. In other words, we are left to wonder to what extent commercial capitalism, as Banaji describes it, fundamentally transformed, or did not transform, the modes of social life in different places and at different times.
This question could open up a number of promising research avenues that all seem to point in one direction. We cannot write the history of capitalism without considering the intersection of different mechanisms of oppression such as race, gender, ethnicity, and national origin in addition to social class. These offer a richer picture of how “separate levels of oppression” changed the lives of ordinary people under capitalism.