Starting from our baseline date of 1700, then, what we see at the dawn of modern capitalism is a gigantic financial apparatus of credit and debt that operates—in practical effect—to pump more and more labor out of just about everyone with whom it comes into contact, and as a result produces an endlessly expanding volume of material goods. It does so not just by moral compulsion, but above all by using moral compulsion to mobilize sheer physical force. At every point, the familiar but peculiarly European entanglement of war and commerce reappears—often in startling new forms. The first stock markets in Holland and Britain were based mainly in trading shares of the East and West India companies, which were both military and trading ventures. For a century, one such private, profit-seeking corporation governed India. The national debts of England, France, and the others were based in money borrowed not to dig canals and erect bridges, but to acquire the gunpowder needed to bombard cities and to construct the camps required for the holding of prisoners and the training of recruits. Almost all the bubbles of the eighteenth century involved some fantastic scheme to use the proceeds of colonial ventures to pay for European wars. Paper money was debt money, and debt money was war money, and this has always remained the case. Those who financed Europe’s endless military conflicts also employed the government’s police and prisons to extract ever-increasing productivity from the rest of the population.
As everybody knows, the world market system initiated by the Spaniards and Portuguese empires first arose in the search for spices. It soon settled into three broad trades, which might be labeled the arms trade, the slave trade, and the drug trade. The last refers mostly to soft drugs, of course, like coffee, tea, and the sugar to put in them, and tobacco, but distilled liquor first appears at this stage of human history as well, and as we all know, Europeans had no compunctions about aggressively marketing opium in China as a way of finally putting an end to the need to export bullion. The cloth trade only came later, after the East India Company used military force to shut down the (more efficient) Indian cotton export trade. One need only take a glance at the book that preserves Charles Davenant’s 1696 essay on credit and human fellowship: The political and commercial works of that celebrated writer Charles D’Avenant: relating to the trade and revenue of England, the Plantation trade, the East-India trade and African trade. “Obedience, love, and friendship” might suffice to govern relations between fellow Englishmen, then, but in the colonies, it was mainly just obedience.
As I’ve described, the Atlantic slave trade can be imagined as a giant chain of debt-obligations, stretching from Bristol to Calabar to the headwaters of the Cross River, where the Aro traders sponsored their secret societies; just as in the Indian Ocean trade, similar chains connected Utrecht to Capetown to Jakarta to the Kingdom of Gelgel, where Balinese kings arranged their cockfights to lure their own subjects to gamble their freedom away. In either case, the end product was the same: human beings so entirely ripped from their contexts, and hence so thoroughly dehumanized, that they were placed outside the realm of debt entirely.
The middlemen in these chains, the various commercial links of the debt chain that connected the stock-jobbers in London with the Aro priests in Nigeria, pearl divers in the Aru islands of Eastern Indonesia, Bengali tea plantations, or Amazonian rubber-tappers, give one the impression of having been sober, calculating, unimaginative men. At either end of the debt chain, the whole enterprise seemed to turn on the ability to manipulate fantasies, and to run a constant peril of slipping into what even contemporary observers considered varieties of phantasmagoric madness. On the one end were the periodic bubbles, propelled in part by rumor and fantasy and in part by the fact that just about everyone in cities like Paris and London with any disposable cash would suddenly become convinced that they would somehow be able to profit from the fact that everyone else was succumbing to rumor and fantasy.
Charles MacKay has left us some immortal descriptions of the first of these, the famous “South Sea Bubble” of 1710. Actually, the South Sea Company itself (which grew so large that at one point it bought up most of the national debt) was just the anchor for what happened, a giant corporation, its stock constantly ballooning in value, that seemed, to put it in contemporary terms, “too big to fail.” It soon became the model for hundreds of new start-up offerings:
Innumerable joint-stock companies started up everywhere. They soon received the name Bubbles, the most appropriate imagination could devise … Some of them lasted a week or a fortnight, and were no more heard of, while others could not even live out that span of existence. Every evening produced new schemes, and every morning new projects. The highest of the aristocracy were as eager in this hot pursuit of gain as the most plodding jobber in Cornhill.89
The author lists, as arbitrary examples, eighty-six schemes, ranging from the manufacture of soap or sailcloth, the provision of insurance for horses, to a method to “make deal-boards out of sawdust.” Each issued stock; each issue would appear, then be scooped up and avidly traded back and forth in taverns, coffee-houses, alleys, and haberdasheries across the city. In every case their price was quickly bid through the ceiling—each new buyer betting, effectively, that he or she could unload them to some even more gullible sucker before the inevitable collapse. Sometimes people bid on cards and coupons that would allow them no more than the right to bid on other shares later. Thousands grew rich. Thousands more were ruined.
The most absurd and preposterous of all, and which shewed, more completely than any other, the utter madness of the people, was one started by an unknown adventurer, entitled “A company for the carrying on of an undertaking of great advantage, but nobody to know what it is.”
The man of genius who essayed this bold and successful inroad upon public credulity merely stated in his prospectus that the required capital was half a million, in five thousand shares of 1001. each, deposit 21. per share. Each subscriber, paying his deposit, would be entitled to 1001. per annum per share. How this immense profit was to be obtained, he would not condescend to inform them at that time, but promised that in a month the full particulars would be duly announced, and call made for the remaining 981. of the subscription. Next morning, at nine o’clock, this great man opened an office in Cornhill. Crowds beset his door, and when he shut up at three o’clock, he found that no less than one thousand shares had been subscribed for, and the deposits paid.
He was philosopher enough to be contented with his venture, and set off that same evening for the Continent. He was never heard of again.90
If one is to believe MacKay, the entire population of London conceived the simultaneous delusion, not that money could really be manufactured out of nothing, but that other people were foolish enough to believe that it could—and that, by that very fact, they actually could make money out of nothing after all.
Moving to the other side of the debt chain, we find fantasies ranging from the charming to the apocalyptic. In the anthropological literature, there is everything from the beautiful “sea wives” of Aru pearl divers, who will not yield up the treasures of the ocean unless courted with gifts bought on credit from local Chinese shops,91 to the secret markets where Bengali landlords purchase ghosts to terrorize insubordinate debt peons; to Tiv flesh-debts, a fantasy of human society cannibalizing itself; to finally, occasions at which, the Tiv nightmare appears to have very nearly become true.92 One the most famous and disturbing was the great Putumayo scandal of 1909–1911, in which the London reading public was shocked to discover that the agents of the subsidiary of a British rubber company operating in the Peruvian rainforest had created their very own Heart of Darkness, exterminating tens of thousands of Huitoto Indians—who the agents insisted on referring to only as “cannibals”—in scenes of rape, torture, and mutilation that recalled the very worst of the conquest four hundred years earlier.93
In the debates that followed, the first impulse was to blame everything on a system whereby the Indians were said to have been caught in a debt trap, made completely de
pendent on the company store:
The root of the whole evil was the so called patron or “peonage” system—a variety of what used to be called in England the “truck system”—by which the employee, forced to buy all his supplies at the employer’s store, is kept hopelessly in debt, while by law he is unable to leave his employment until his debt is paid … The peon is thus, as often as not, a de facto slave; and since in the remoter regions of the vast continent there is no effective government, he is wholly at the mercy of his master.94
The “cannibals” who ended up flogged to death, crucified, tied up and used for target practice, or hacked to pieces with machetes for failure to bring in sufficient quantities of rubber, had, the story went, fallen into the ultimate debt trap; seduced by the wares of the company’s agents, they’d ended up bartering away their very lives.
A later Parliamentary inquiry discovered that the real story was nothing of the sort. The Huitoto had not been tricked into becoming debt peons at all. It was the agents and overseers sent into the region who were, much like the conquistadors, deeply indebted—in their case, to the Peruvian company that had commissioned them, which was ultimately receiving its own credit from London financiers. These agents had certainly arrived with every intention of extending that web of credit to include the Indians, but discovering the Huitoto to have no interest in the cloth, machetes, and coins they had brought to trade with them, they’d finally given up and just started rounding Indians up and forcing them to accept loans at gunpoint, then tabulating the amount of rubber they owed.95 Many of the Indians massacred, in turn, had simply been trying to run away.
In reality, then, the Indians had been reduced to slavery; it’s just that, by 1907, no one could openly admit this. A legitimate enterprise had to have some moral basis, and the only morality the company knew was debt. When it became clear that the Huitoto rejected the premise, everything went haywire, and the company ended up, like Casimir, caught in a spiral of indignant terror that ultimately threatened to wipe out its very economic basis.
It is the secret scandal of capitalism that at no point has it been organized primarily around free labor.96 The conquest of the Americas began with mass enslavement, then gradually settled into various forms of debt peonage, African slavery, and “indentured service”—that is, the use of contract labor, workers who had received cash in advance and were thus bound for five-, seven-, or ten-year terms to pay it back. Needless to say, indentured servants were recruited largely from among people who were already debtors. In the 1600s there were at times almost as many white debtors as African slaves working in southern plantations, and legally they were at first in almost the same situation, since in the beginning, plantation societies were working within a European legal tradition that assumed slavery did not exist, so even Africans in the Carolinas were classified, as contract laborers.97 Of course this later changed when the idea of “race” was introduced. When African slaves were freed, they were replaced, on plantations from Barbados to Mauritius, with contract laborers again: though now ones recruited mainly in India or China. Chinese contract laborers built the North American railroad system, and Indian “coolies” built the South African mines. The peasants of Russia and Poland, who had been free landholders in the Middle Ages, were only made serfs at the dawn of capitalism, when their lords began to sell grain on the new world market to feed the new industrial cities to the west.98 Colonial regimes in Africa and Southeast Asia regularly demanded forced labor from their conquered subjects, or, alternately, created tax systems designed to force the population into the labor market through debt. British overlords in India, starting with the East India Company but continuing under Her Majesty’s government, institutionalized debt peonage as their primary means of creating products for sale abroad.
This is a scandal not just because the system occasionally goes haywire, as it did in the Putumayo, but because it plays havoc with our most cherished assumptions about what capitalism really is—particularly that, in its basic nature, capitalism has something to do with freedom. For the capitalists, this means the freedom of the marketplace. For most workers, it means free labor. Marxists have questioned whether wage labor is ultimately free in any sense (since someone with nothing to sell but his or her body cannot in any sense be considered a genuinely free agent), but they still tend to assume that free wage labor is the basis of capitalism. And the dominant image in the history of capitalism is the English workingman toiling in the factories of the industrial revolution, and this image can be traced forward to Silicon Valley, with a straight line in between. All those millions of slaves and serfs and coolies and debt peons disappear, or if we must speak of them, we write them off as temporary bumps along the road. Like sweatshops, this is assumed to be a stage that industrializing nations had to pass through, just as it is still assumed that all those millions of debt peons and contract laborers and sweatshop workers who still exist, often in the same places, will surely live to see their children become regular wage laborers with health insurance and pensions, and their children, doctors and lawyers and entrepreneurs.
When one looks at the actual history of wage labor, even in countries like England, that picture begins to melt away. In most of Medieval northern Europe, wage labor had been mainly a lifestyle phenomenon. From roughly the age of twelve or fourteen to roughly twenty-eight or thirty, everyone was expected to be employed as a servant in someone else’s household—usually on a yearly contract basis, for which they received room, board, professional training, and usually a wage of some sort—until they accumulated enough resources to marry and set up a household of their own.99 The first thing that “proletarianization” came to mean was that millions of young men and women across Europe found themselves effectively stuck in a kind of permanent adolescence. Apprentices and journeymen could never become “masters,” and thus, never actually grow up. Eventually, many began to give up and marry early—to the great scandal of the moralists, who insisted that the new proletariat were starting families they could not possibly support.100
There is, and has always been, a curious affinity between wage labor and slavery. This is not just because it was slaves on Caribbean sugar plantations who supplied the quick-energy products that powered much of early wage laborers’ work; not just because most of the scientific management techniques applied in factories in the industrial revolution can be traced back to those sugar plantations; but also because both the relation between master and slave, and between employer and employee, are in principle impersonal: whether you’ve been sold or you’re simply rented yourself out, the moment money changes hands, who you are is supposed to be unimportant; all that’s important is that you are capable of understanding orders and doing what you’re told.101
This is one reason, perhaps, that in principle, there was always a feeling that both the buying of slaves and the hiring of laborers should really not be on credit, but should employ cash. The problem, as I’ve noted, was that for most of the history of British capitalism, the cash simply didn’t exist. Even when the Royal Mint began to produce smaller-denomination silver and copper coins, the supply was sporadic and inadequate. This is how the “truck system” developed to begin with: during the industrial revolution, factory owners would often pay their workers with tickets or vouchers good only in local shops, with whose owners they had some sort of informal arrangement, or, in more isolated parts of the country, which they owned themselves.102 Traditional credit relations with one’s local shopkeeper clearly took on an entirely new complexion once the shopkeeper was effectively an agent of the boss. Another expedient was to pay workers at least partly in kind—and notice the very richness of the vocabulary for the sorts of things one was assumed to be allowed to appropriate from one’s workplace, particularly from the waste, excess, and side products: cabbage, chips, thrums, sweepings, buggings, gleanings, sweepings, potchings, vails, poake, coltage, knockdowns, tinge.103 “Cabbage,” for instance, was the cloth left over from tailoring, “chips” the pieces of boa
rd that dockworkers had the right to carry from their workplace (any piece of timber less than two feet long), “thrums” were taken from the warping-bars of looms, and so on. And of course we have already heard about payment in the form of cod, or nails.
Employers had a final expedient: wait for the money to show up, and in the meantime, don’t pay anything—leaving their employees to get by with only what they could scrounge from their shop floors, or what their families could finagle in outside employment, receive in charity, preserve in savings pools with friends and families, or, when all else failed, acquire on credit from the loan sharks and pawnbrokers who rapidly came to be seen as the perennial scourge of the working poor. The situation became such that, by the nineteenth century, any time a fire destroyed a London pawnshop, working-class neighborhoods would brace for the wave of domestic violence that would inevitably ensue when many a wife was forced to confess that she’d long since secretly hocked her husband’s Sunday suit.104
We are, nowadays, used to associating factories eighteen months in arrears for wages with a nation in economic free-fall, such as occurred during the collapse of the Soviet Union; but owing to the hard-money policies of the British government, who were always concerned above all to ensure that their paper money didn’t float away in another speculative bubble, in the early days of industrial capitalism, such a situation was in no way unusual. Even the government was often unable to find the cash to pay its own employees. In eighteenth-century London, the Royal Admiralty was regularly over a year behind in paying the wages of those who labored at the Deptford docks—one reason that they were willing to tolerate the appropriation of chips, not to mention hemp, canvas, steel bolts, and cordage. In fact, as Linebaugh has shown, the situation only really began to take recognizable form around 1800, when the government stabilized its finances, began paying cash wages on schedule, and therefore tried to abolish the practice of what was now relabeled “workplace pilfering”—which, meeting outraged resistance on the part of the dockworkers, was made punishable by whipping and imprisonment. Samuel Bentham, the engineer put in charge of reforming the dockyards, had to turn them into a regular police state in order to be able to institute a regime of pure wage labor—to which purpose he ultimately conceived the notion of building a giant tower in the middle to guarantee constant surveillance, an idea that was later borrowed by his brother Jeremy for the famous Panopticon.105
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