Blood and Money. David McNally

challenges in recent years, yet each has managed to keep moving forward with good humor and love for the people in their lives. My mother, Helen, continues to amaze with the support she gives to beleaguered souls, and with her love for all of us. My father, John, endlessly warms my heart with the abiding interest he takes in my writing and my social justice commitments, and in the accomplishments of his grandchildren. Marilyn McNally came into my life, and those of my sisters, when I was a teenager. Her love and support for me, and for my siblings, Terri, Sandra, and Steven, has meant the world to all of us.

      I dedicate this book to these three elders—Helen, John, and Marilyn. I further dedicate it to the memories of Joyce and Ken Ferguson, Colin Barker, and Ellen Meiksins Wood. They have passed on, but in our hearts they remain.

      Introduction

      It is remarkable how deferential people can be, even progressive people, when it comes to the subject of money. In a recent critical work debunking mainstream economics, for instance, the author instructs us that “monetary and financial systems are among human society’s greatest cultural and economic achievements.” Turning to the Bank of England, the same author confidently proclaims it to have been “a great civilizational advance.”¹ I beg to differ. Rather than a benign medium for promoting the exchange of goods, money has been a technology of power. This is not to deny that it has facilitated trade (though it is to deny the absurd myth that money emerged out of barter).² It is merely to insist that money and finance are enmeshed within matrices of social power and tend to reproduce them.³

      Critical theory insists that objects are not separable from their histories. Every object is defined by the process of its emergence and development. Rather than mere externalities, these processes are intrinsic to objects themselves.⁴ Where money is concerned, I submit that every layer of its sedimentation is mingled with the blood of slaves, of soldiers, of the colonized, of the exploited and oppressed. Notwithstanding the considerable differences between monetary regimes throughout history, these features have been at the core of each. And they are histories that must be ruptured if violence and domination are to be overcome.

      In what follows, I contend that financial history is soaked in blood—blood that has flowed in the tracks of slavery, war, and empire. Thus, the arguments that follow are decidedly unconventional. Even among historians contributing to the major (and important) resurgence in the study of capitalism in the United States, the predominant picture on offer is too often that of “a capitalism born without blood,” as one commentator put it.⁵ This bloodless image of capitalism owes something to the way the global economic crisis of 2009 focused attention on esoteric financial instruments, such as collateralized debt obligations and credit default swaps. So abstracted are these instruments from the everyday production of goods and services that it is all too easy for analysts to plunge into descriptions of mortgage-based derivatives and computerized trading as if there were no larger system in which people toil in sweatshops, warehouses, stores, and fields—and as if financial profits did not ultimately derive from these labors.⁶ To lose sight of such spaces, however, and of the bodies that toil there, is to succumb to a profound fetishism. It is to fail the critical test of tracking abstract financial technologies to the human labors that underpin them. In this respect, the chapters that follow might be considered an exercise in de-fetishizing criticism—one that connects the study of monetary and financial history to a phenomenology of the laboring body.

      The theoretical work of tethering money to the body and its labors draws from insights that originate with Marx. In his 1844 “Notes on James Mill,” for instance, the young Marx turned his sights to the role of credit in the modern monetary system. “The substance, the body clothing the spirit of money is not money, paper, but instead it is my personal existence, my flesh and blood,” he wrote. “Credit no longer actualizes money-values in actual money but in human flesh and human hearts.”⁷ In this profound observation, Marx urged that the monetary values changing hands in the credit system are rooted—actualized, as he put it—in human flesh, in the body and its pains. Monetary power is thus vampiric, a ghostly presence haunting human flesh and blood.⁸ Because of this, credit and money also colonize our hearts—by means of perverse love of lucre, and by means of our mortal fear of the servitude that can accompany debt.

      To start from the body is thus an essential protocol. However, human bodies are always enmeshed in history. Human life is the domain of historical bodies that carry traces of collective legacies of labor, desire, technology, domination, suffering, and resistance.⁹ An assessment of the record of money must therefore situate bodies in networks of power and oppression—among them class, patriarchy, and slavery. More than this, since class societies are always at war (or preparing for war), our protocol requires us to locate the immersion of historical bodies in relations of organized violence. In what follows, I extend this insight to monetary history from the ancient Mediterranean and Middle East to contemporary globalized capitalism. Exploring a range of monetary technologies that have taken shape in societies organized around war, slavery, and colonial plunder, I show that these are intrinsic elements of the history of money, not background stage effects.

      When it comes to modern capitalist society, I consider Marx’s analysis of money—as an expression of the logic of generalized commodity exchange—to be indispensable.¹⁰ But money existed prior to capitalism and obeyed social logics distinct from it, even if these were grounded in domination. Indeed, Marx was well aware that the investigation he conducted in Capital, volume 1, operates at a preliminary level of theoretical abstraction. Concerned to delineate money’s basic logic in capitalist society, Marx initially bracketed consideration of credit markets, the banking system, the nation-state, public debt, and international finance. But all of the latter—and their entanglements with war and war finance—are essential to any actual history of money.¹¹ To trace this history requires an analysis of the commodity logic of money that incorporates the operations of the state. Marx recognized as much. He understood that states determine the unit of measure (e.g., dollars, yen, euros, yuan) within their sovereign territory. “Coining, like the establishment of a standard of prices, is the business of the State,” he remarked. And he further observed that the “different national uniforms worn at home by gold and silver as coins,” or by paper currencies, are all governed by the nation-state.¹² It is these different modalities of money— coin, paper currencies tied to precious metal, inconvertible paper money—that shape the history of monetary regimes.

      To be sure, money’s most developed operations occur in an international space that exceeds the sovereignty of national states, which is why world money occupies the highest level in Marx’s theory. Yet, the global level is not an empty space. It is constituted in and through world competition among capitals and international rivalry between dominant nation-states. Integral to a theory of world money, therefore, is the analysis of international conflict and war—which is perhaps why Marx’s plan for his critique of capitalism was meant to culminate in books on the state, foreign trade, and the world market.¹³ This is fitting, since national currencies that have attained status as world money have done so on the basis of colonialism, empire, and war. As soon as we approach monetary regimes and institutions in these terms, we can readily appreciate the problems with describing, say, the formation of the Bank of England as “a great civilizational advance.” It was instead, as we will see, an advance in the technology of war finance. For its first century, the bank arranged payment for the ships, guns, and soldiers with which the British Empire fought France. And there is nothing particularly unique about the Bank of England in this regard: as one economist observed, all the “central banks in existence before 1850 were chartered in the context of war.”¹⁴

      But war finance did not originate with modern society any more than money did. For this reason, this volume begins long before the rise of capitalism: with the emergence of full-fledged money in the ancient West Asia, and its crystallization in Greece. In so doing, it foregrounds the crucial role of the slave trade in the development of markets in the Mediterranean region. By beginning here, I also highlight payment for mercenary soldiers as an integral element in the origin of state-produced ancient coinage, which comprised the first modular form of money. I further show that ancient