In order to attain clarity the historian may have to pursue his subject right up to the present … Here as elsewhere, he wants to understand change. But in the film which he is examining, only the final frame remains clear.
Marc Bloch, The Historian's Craft Footnote 1The intellectual history of early modern political economy has been dominated to a considerable degree, in the anglophone world, by the work of István Hont. His published oeuvre arranged an impressively wide range of the long eighteenth century's politico-economic writings in crystalline form: compact, rigorously symmetrical, impervious. Hannah Arendt understood the assimilation of the private sphere of economic activity into politics, the public domain of collective concern, as the origin of the most explosive dramas of specifically modern political thought and life; Hont took up this characterization with singular verve, and through him one sees political economy articulating the most intractable problems of state formation in an age of jarring economic transformations.Footnote 2 For Hont, this social theory remained strikingly relevant up to the present day; his long eighteenth century reaches into the twenty-first.Footnote 3 The force of this vision, conjoined with the methods of Cambridge school contextualism, places a formidable tool in the hands of his adepts; they are now busy organizing new chronological and geographical materials around the seed crystal of Hont's Jealousy of Trade.Footnote 4 But not even intellectual majesty confers omniscience; Hont's vision arose out of a strong orientation toward the “cosmopolitan theory of commercial globalization” he attributed to David Hume, which necessarily excluded other understandings of eighteenth-century thought, as well as the society that produced it.Footnote 5 This article explores the sources, and limitations, of Hont's historical vision; in order to do so, it begins by proposing an alternative, one that is foreclosed by the historical categories and theoretical tools Hont chose.
Although the internal coherence and indeed existence of Cambridge school contextualism is sometimes disputed, nobody denies that the central figures—Quentin Skinner, J. G. A. Pocock, John Dunn, and István Hont—all rejected Marxist approaches to intellectual history, which understood ideas as lying downstream from economic structures and interests.Footnote 6 A corollary of the Cambridge position was the rejection, as anachronistic, of “capitalism” as an analysand and of “capitalist” as a description of the early modern contexts that interested them. István Hont rarely used the terms because he, like others of this school, thought of them as “loaded and disturbingly sloppy.”Footnote 7 Instead, he privileged “commercial society” because, as a user's category, it could conveniently and without prima facie anachronism be treated as an object of analysis constituted by eighteenth-century discourse; commercial society could also be unproblematically assumed as one of the principal contexts that informed the development of the social and political thought of the period.Footnote 8 István Hont recounted a controversy, the “rich-country–poor-country” debate, over the proper strategies that poor countries should adopt to encourage national enrichment, and the ones that rich countries should enact to ensure that poor countries did not overtake them. As a discussion of the economic theory that underpins this debate of the long eighteenth century will show, neither of these assumptions is entirely unproblematic. Hont's view of eighteenth-century political economy was very explicitly informed by the presumptions of the Ricardian theory of comparative advantage and—to a lesser but no less decisive degree—work on international competition and flexible specialization that was pioneered in the 1980s.
Historians of science speak of the co-constitution of nascent scientific disciplines and their respective objects of analysis, and when historians of political economy speak of the “invention” or “discovery” of the economy or of society, they incorporate this insight.Footnote 9 For some time, economic historians have evinced a kind of rough-and-ready methodological self-awareness in recognizing, along similar lines, that economies of the past are generally analyzed, implicitly or explicitly, on this basis of recent theoretical constructs and present-day preoccupations.Footnote 10 Cambridge school contextualism jealously defends the autonomy of the past in reaction against presentist anachronism; one should therefore expect of its practitioners a certain reticence in discussing how their understanding of the past is inflected by present-day concepts and concerns. But this reticence has consequences: in the work of István Hont, the pretense that “commercial society,” as an actor's category, merely reproduces eighteenth-century self-understanding obscures the present-minded choices that enter into the intellectual genealogy he proposes. The usual way of mounting this criticism would be to offer a kind of higher contextualism; burrowing into a contextualist account and demonstrating any level of anachronism suffices by this standard to weaken it.Footnote 11 While contextualist rigorism is an effective weapon of critique against its practitioners, it affirms rather than challenges the limits of contextualist method itself. Here I propose something quite different: embracing the inevitability of some degree of presentism, and then weighing the costs and benefits of alternative accounts. What is gained, for instance, by viewing eighteenth-century political economy as a reflection on a specifically capitalist world economy, and what is lost in Hont's ostensibly more neutral choice of “commercial society”? Because the term is anachronistic by their exclusively textual standards, the self-denying ordinances of the Cambridge school make it impossible to imagine that “capitalism” might be a context necessary to any full understanding of the early modern invention of political economy.
In conformity with the law of simultaneous contrast, painters know that juxtaposing two colors on a canvas without even mixing them can affect our perception of one or both colors; here I propose an analogous exercise in simultaneous contrast between eighteenth- and twentieth-century approaches to the global economy.Footnote 12 First, I begin by discussing dependency and world systems theory of the post-World War II period in order to pave the way for a discussion of Montesquieu's exploration of the early modern world economy. This deliberately staged contrast emphasizes aspects of a thinker who placed the rise of global commerce at the center of fundamental social and political transformations in early modern Europe. Accordingly, Montesquieu's oeuvre has entered increasingly into accounts by historians, including István Hont, interested in eighteenth-century European responses to globalization. The first part of this essay does not so much reinvent Montesquieu as a twentieth-century world systems theorist avant la lettre as it seeks to demonstrate the payoff of treating him as an analyst of a specifically capitalist world economy, in the way that Immanuel Wallerstein, André Gunder Frank, or Fernand Braudel, who emphasized problems of unevenness and inequality, understood that phenomenon. This approach is inspired, at least in part, by Geoff Mann's provocative but fertile reading of the Hegel of The Philosophy of Right as a kind of Keynesian.Footnote 13
The broader critical purpose of this essay, discussed above, is only achieved thanks to a second simultaneous contrast. Here, instead of deliberately producing this contrast, I document its effect at work. Hont's portrait of eighteenth-century commercial society was profoundly colored by the broad strokes of Ricardian comparative advantage and flexible specialization theory that he laid onto his canvas. These additions from nineteenth- and twentieth-century economic theory emphasize in particular ways the possibility of “levelling up” between countries in the context of a globalizing economy and point the way to reforms that fulfill the hopes of free-market enthusiasts. Understood in these terms, Hont's commercial eighteenth century was hardly less “loaded” than the capitalist one he rejected. This fact does not entirely falsify his widely shared version of the eighteenth century—far from it—but recognizing it should carry with it a couple of consequences. First and most obviously, intellectual historians should be more active about bringing to the surface the economic theory that informs their accounts of political economy. Second, the intellectual history of political economy cannot dispense with economic history, which should serve as a constant empirical check on the choice of social contexts that are produced, intentionally or otherwise, by misapplied theory.
World systems theory and dependency economics
The awareness of world systems theory on the part of historians of the early modern period comes primarily through Immanuel Wallerstein's three-volume The Modern World System (1974, 1980, 1989). The Modern World System sparked any number of debates among historians and economists about the development, from the sixteenth century onward, of a European-centered world economy that ultimately became hegemonic over most of the globe in the eighteenth and in particular the nineteenth centuries. The profile of world systems theory was raised among historians by dint of the central place it occupied in the third and final volume of Fernand Braudel's magisterial Capitalism and Civilization, published initially in 1979, entitled The Perspective of the World. Wallerstein's work helped Braudel understand what he had been doing in Capitalism and Civilization and, in turn, Braudel's name added immense cachet to the world systems paradigm.Footnote 14 Later, Giovanni Arrighi's Long Twentieth Century (1994) shed Wallerstein's rather crude class analysis, but, perhaps more importantly, gave an account of the historical succession of the centers of the capitalist economy (Genoa, Amsterdam, London, New York) more firmly grounded in Marx's value circuits and the recurring possibility of what Marx called the “absolute” over-accumulation of capital.Footnote 15 This revised and updated world systems theory, which owed much to Braudel's insistence on the dominance of circulating over fixed capital in preindustrial capitalism, presents a world systems theory updated for the financialization that took hold in the world economy in the 1980s and 1990s, and is accelerating in the present day.Footnote 16
Robert Brenner's criticism of Wallerstein, in conjunction with subsequent elaborations to world systems theory by Arrighi and Braudel, brings to the fore a crucial point: the Marxism of all of these inflections on world systems theory was unorthodox, especially in their disinterest in the orthodox understanding of waged labor as constitutive of the capitalist mode of production.Footnote 17 But particularly in the work of Arrighi and Wallerstein, world systems theory continued to offer something central to Marxist political economy: a critical account of exploitation and of the inevitable crises of capitalist accumulation. Braudel did not propose the same critical account of capitalism as Arrighi and Wallerstein. Instead, he famously distinguished—following Lenin—two economic levels: capitalism and the market economy.Footnote 18 The market, for Braudel, was the domain of relatively free and transparent exchange relations that exists to some degree or another in most times and places. Capitalism, by contrast, is the domain of exploitation and unequal exchange—the “jungle” where the great predators roamed, often working symbiotically with competitive states. His account of how the great predator merchants and states helped to expand immeasurably the underlying market economy during the golden age of merchant capitalism (1500–1800) was in fundamental respects similar to those offered by Wallerstein and Arrighi.Footnote 19
Despite the influence of world systems theory on the “transition” literature produced by early modernists, Wallerstein was not himself a historian: he began his career as a sociologist examining problems of development in the rapidly decolonizing Africa of the 1960s. The same might be said of Arrighi, who began his academic career in Africa, first at the University of Rhodesia and then Dar-es-Salaam, where he met Wallerstein, Walter Rodney, and others; indeed his first published book was on underdevelopment in Africa.Footnote 20 As Wallerstein recounts, developmentalist economic policies during that period had reached any number of impasses in Africa because they were implemented in the context of a capitalist world economy. The latter had a deep history stretching back to the European conquest of the New World, and Wallerstein recounts having sought in The Modern World System “to discover the general attributes of a colonial situation and to describe what [he] thought of as its ‘natural history.’”Footnote 21 The key to undoing this “colonial situation” lay in understanding the origins and evolution of a hierarchy of regions, states and peoples that complicated any straightforward path to economic modernity. Otherwise, rather than assuring national autonomy and prosperity, developmentalist policies might well deepen patterns of exploitation and dependency—a process that André Gunder Frank memorably labeled “the development of underdevelopment.”Footnote 22 Indeed, many of the concerns that drew Wallerstein to the longue durée history of capitalism arose out of his engagement, as an Africanist, with dependency theory.Footnote 23
Dependency theorists such as the Argentinian economist Raúl Prebisch called into question the Ricardian theory of comparative advantage that is so central to Hont's account of eighteenth-century commercial society; this theory stipulates that there are always gains to trade for both parties, even when partners are unequal. On an empirical level, Prebisch—himself more Keynesian than Marxist—observed steadily worsening terms of trade between underdeveloped Latin American countries and the developed core of capitalist economies. Over time—and independently of productivity gains—an hour of labor in a Third World economy, generally in the agricultural or low-technology industrial sector, was capable of purchasing fewer manufactured goods from developed nations. Increasingly unequal terms of trade were linked, for Prebisch, to the global excess of agricultural producers on the world market in comparison to a relatively small number of producers of high-value manufactured goods; this asymmetry was only exacerbated by the declining percentage of national income that rich countries spent on primary goods. As rich nations became comparatively more self-sufficient, poorer nations became less so, and the manufactured goods they drew from foreign markets became relatively more expensive. This observation becomes all the more pertinent when we recall that the developed capitalist economies of the post-World War II period were, in terms of world trade, measurably far less open than in the late nineteenth or early twentieth centuries. Under such conditions, expanded trade would only aggravate inequalities between these segments of the world economy.
An earlier version of the argument of the development of underdevelopment was advanced by the Polish-born Marxist economist Paul A. Baran, whose 1957 Political Economy of Growth owed a great deal to Paul Sweezy's theory of monopoly capitalism. In addressing what he called the “roots of backwardness,” Baran emphasized how the compounding advantages of early modern “mercantile accumulations” in Western Europe helped to drain surplus from non-European nations. Largely peasant economies were colonized indirectly by overseas merchants, who occupied the choke point between local landed elites and the foreign luxury imports they increasingly demanded. Autonomous peasant agriculture ceded to coercive plantation-style agriculture, abetted by weakening peripheral states hungry for tax revenue.Footnote 24 Wallerstein explored this process at great length in his discussion of seventeenth- and eighteenth-century Poland, one of the poster children of produced dependency in the historical literature of world systems theory.Footnote 25 Although Baran did touch on the problem of unequal terms of trade, his principal emphasis, given his more classical Marxism, was on the way in which the flow of surplus facilitated the concentration of capital in the center, depriving peripheries of the necessary quanta of capital for industrialization. Crucially, Baran did not see any homeostatic mechanism that could rebalance the relative advantages of a developed capitalist core against a weak agricultural periphery. In Baran's survey of Latin America, Asia, and Africa, however, one nation stands out as having escaped produced backwardness. Japan made its miraculous “great leap forward” after the Meiji Restoration (1868) because for two centuries before this breakthrough it had remained intentionally walled off from foreign merchant capital, “escap[ing] being turned into a colony or dependency of Western European or American capitalism.”Footnote 26 Indeed, for many dependency theorists, a policy of strategic autarky—what Amin termed l’économie autocentrée—seemed preferable to unfettered international trade.Footnote 27
Doux commerce versus dependency: reading De l'esprit des loix
Now, Montesquieu was not a tiers-mondiste Marxist. We cannot find in him a hitherto undiscovered labor theorist of value; he did not tear off the ideological veil of free exchange in order to expose the true mechanisms of economic exploitation; he did not search out fundamental contradictions in the economic system he saw developing around him and describe the crises to which they ineluctably led; nor did he seek out alternative development strategies for peripheral countries that were the unfortunate victims of capitalist encirclement. Nevertheless, this preliminary attention to the economic models used by world systems and dependency theorists, and the context in which they developed them, sensitizes us to the fact that Montesquieu also thought in global terms about the economy; seeing him as an analyst of the capitalist world system also trains our eye on the mechanisms he saw contributing to uneven center–periphery relations.
Although Montesquieu wrote extensively about the economies of several regions of the globe in the ancient and modern epochs, his main interest, normatively speaking, was the political ramifications for France of the growth of mercantile capitalism, the rise of a consumer economy, and the new centrality of commerce to political survival in Europe's competitive state system.Footnote 28 Beyond the explicit or implicit connections he drew to contemporary France, Montesquieu sought to understand Europe as an integrated economic unit: “Europe is no longer anything but one state composed of several … since each of its provinces has need of the other.”Footnote 29 He also sought to explain the causes and consequences of the unprecedented hegemony established by “the Empire of Europe” since the discovery of the New World. For these reasons, his analysis operated simultaneously on three territorial registers: France, Europe, and the wider world economy.
The transformation of the European and, hence, world economy was attributable to a twofold process of geographical uncloistering. First and perhaps more prosaically, maritime discovery linked hitherto unconnected parts of the world through trade: “the compass opened the universe, so to speak.”Footnote 30 Second and more profoundly, for Montesquieu, commerce had the inherent tendency to “flee from where it is oppressed, and remain where it is left to breathe.”Footnote 31 By “drawing their livelihood from the whole universe” rather than immediate hinterlands occupied by barbarian invaders, the Venetians and the Dutch liberated themselves from the geographical constraints that would have otherwise condemned them to servitude.Footnote 32 The Jews, for their part, invented letters of exchange in order to save their wealth from violent extraction by Christian monarchs.Footnote 33 The creation of liquid assets—“invisible goods, which could be sent everywhere and leave no trace anywhere”—restrained despotic authority everywhere where states relied upon the resources of finance and commerce. Transparent worldwide financial markets made sovereign financial chicanery impossible: “the exchange has taught the banker to compare all the monies of the world and set them at their just value,” which “has curtailed great coups d'autorité.”Footnote 34 These were the spatial dimensions of the eighteenth-century doux commerce thesis—the proposition that commerce softened manners and government wherever it became pervasive.Footnote 35
The doux commerce that defines the modern epoch is grounded in the distinction between landed and moveable wealth. Landed wealth, because of its inherent scarcity, encourages economic and political monopolies; moveable wealth, particularly of the immaterial, financial variety, dissolves them: “by the use of the exchange, wealth somehow does not belong to any state in particular.”Footnote 36 International commerce and finance are incompatible with slavery,Footnote 37 whereas Montesquieu likens land itself to a slave: “one must regard one's land (bien) as a slave; but one must never lose one's slave.”Footnote 38 This is why Montesquieu argued for the broad significance of the Empress Elizabeth's prohibition of a currency exchange (what we would now call capital controls) in Muscovy; commerce requires international capital flows, but despots control their people by restricting the movement of their capital. Where wealth is immobilized, “the people comprise only slaves attached to the land and slaves called ecclesiastics or gentlemen because they are the lords of these slaves.”Footnote 39 Servitude is a chain of dependence that reaches from the top of the social hierarchy all the way to the bottom, and this chain is firmly bolted to the land.
From this perspective, Montesquieu appears to be a classic eighteenth-century theorist of commercial society of the type Hont depicted. In this account, international financial and commodity markets incarnate social and economic progress: in extending commerce, they liquidate feudal and despotic social relations tied to land ownership.Footnote 40 Poland presents a telling exception to this general narrative: here, instead of enriching a nation, international commerce impoverishes it. Poor nations like Poland, whose only “moveable” wealth is agricultural produce, face international financial capital as a block: “moveable effects … belong to the whole world, which, in this regard comprises but a single state.”Footnote 41 Montesquieu does not spell out the precise mechanism when he states that “the avarice of nations disputes the moveables of the whole universe,” but the sequel to this observation provides a clue: “There may be a state so unhappy that it will be deprived of the movable effects of other countries and also even of almost all its own.” One should probably infer that price competition puts poor countries at a disadvantage in the bidding war over external commodities and assets.Footnote 42 Indeed, internationalized capital even penetrates poor countries: “the owners of its land will be but the colonists of foreigners.” When it comes to the sale of their own goods, large landowners find themselves in thrall to the merchants who provide them with luxury goods; this is why they arranged with the town of Danzig to take all of their grain for a single, and naturally inferior, price: “these agreements are appropriate,” Montesquieu concludes, “only for a poor nation.”Footnote 43 Poor countries buy dear and sell cheap on international markets for the same reasons that dependency theorists would later give for the worsening of terms of trade between center and periphery in the world economy.
Market asymmetries produced dependence where exchange might have otherwise been assumed to act as a progressive force, and this dynamic was also intimately related to differences in preexisting property and social relations. Montesquieu was fascinated with the eighteenth-century torments of the Polish–Lithuanian commonwealth, a terminally weak state completely dominated by a fractious nobility which, in its turn, dominated the peasantry: “in the Polish aristocracy … the peasants are slaves of the nobility.”Footnote 44 Montesquieu affirmed what has become the consensus among present-day historians over the causes of the “second serfdom” in Eastern Europe: a class of excessively powerful noblemen “possess whole provinces; they oppress the plowman in order to have a greater quantity of grain to send to foreigners and procure for themselves the things their luxury demands.”Footnote 45 But like the Russian landowning class who were bound to the land by their dependence on their serfs, the Polish noblemen are also enslaved; by their lack of alternative employments they became commercial tributaries to the merchants of Danzig.Footnote 46
Montesquieu's seemingly denigrating discussion of Africa in Book 21 of the EL outlines another mechanism by which underdeveloped regions might fall into patterns of unequal exchange with industrially or commercially stronger trading partners: the confrontation of incompatible systems of price determination. The question of West African trade with Europeans arises in the context of Montesquieu's discussion of the “physical” causes that dictate patterns of trade in perpetuity.Footnote 47 Europeans have always sent silver to the East because the advanced civilizations there root the people in relatively fixed patterns of consumption: they will only accept silver, not European goods, in exchange for the textiles, spices and ceramics that they send to the West. The North/South distinction furnishes Montesquieu with another stable structure for international trade: the people of the North have many needs while those in hot, fertile southern climates have few; the systematic trade imbalance that might develop between the North and the South is redressed by the superior industry of the northern peoples.Footnote 48 Sandwiched between these discussions of European trade with the southern and eastern regions is a four-sentence chapter on coastal (presumably West) Africa:
Most of the peoples on the coasts of Africa are savages or barbarians. I believe that this comes largely from there being some uninhabitable countries that separate those small countries which can be inhabited. They are without industry; they have no arts; they have precious metals in abundance which they take immediately from the hand of nature. Therefore, all civilized people are in a position to trade advantageously with them.Footnote 49
Here “savage” and “barbarian” should not necessarily be read as terms of abuse: these mainly denote levels of population and modes of production: savages are hunter-gatherers living in small, scattered groups, whereas barbarians—including the Franks that Montesquieu so admires—unite in slightly larger groupings, live by pastoralism, and do not have property in the land.Footnote 50 Montesquieu's assessment of the African economy—again, presumably the West African economy because this is the principal origin of the precious metals to which he refers above—is a rather curious mix of ignorance and erudition. Historians now know that the West African societies that Portuguese and later Dutch, French and English traders confronted from the sixteenth century onward had highly developed textile and metallurgical industries. So too did some eighteenth-century observers to whom Montesquieu certainly had access.Footnote 51 Trans-Saharan and riverine trade networks point to a broad commercialization—whose depth we cannot yet gauge accurately—in these societies. The European wares that they exchanged for slaves were not necessarily essential and could be considered, particularly in the sixteenth and seventeenth centuries, dispensable luxury goods.Footnote 52 The impression that Montesquieu conveyed of these societies as without arts and industry is one that has been only recently undone by late twentieth-century historians of Africa. His judgment on the production of precious metals (mainly gold), however, stands up to modern scholarly understandings and provides a window into African exchange relations with Europe. Gold mining in West Africa was essentially an extension of farming occupations: families and small social groups panned for gold or dug shallow pits in alluvial areas in the slack time left over from agricultural occupations, often using the same or similar tools employed in agricultural work. Montesquieu's judgment that Africans got gold “immediately from the hands of nature” ignores the labor-intensiveness of some of this mining, but the implicit contrast with European and American methods holds: mining as an intermittent peasant by-occupation found in Africa had nothing to do with operations found in Germany or Central and South America.Footnote 53 There, deep pits and the technically complicated process of mercury amalgamation required massive units of capital and large, highly regimented concentrations of labor. Unlike the Euro-American operations with which Montesquieu was familiar, African gold mining had negligible capital requirements and, much as in the European putting-out system, the opportunity cost of the labor involved was very low. Moreover, as Montesquieu explains elsewhere, the gold produced in West Africa was not widely—if at all—monetized in these societies: it entered into a system of barter as, for instance, the widespread trade of gold for salt.Footnote 54 The price of gold in Africa arose out of an internal system of relative commodity values that had little to do with the “universal” system of global commerce that could instantaneously place a “just value” on things, particularly moveable wealth: “The blacks on the coast of Africa have a sign of values without money; it is a purely ideal sign, founded on the degree of esteem they have in mind for each commodity in proportion to the need for it amongst themselves.”Footnote 55 This is why “policed” (i.e. civilized) peoples, including Europeans but also, presumably, Arab and Indian merchants who plied their trade through the Red Sea and Indian Ocean, could take advantage of Africans, who gladly paid a high price for things of “no value”: “just” or “universal” value had not yet transformed internal systems of value based upon “need” internal to a given society.
The explanation that Montesquieu offers for the advantageous terms of trade enjoyed by early modern Europeans on the African coast coheres with those offered by world systems and dependency theorists such as Immanuel Wallerstein and Walter Rodney. Prior to around 1750, African and European societies and economies were external to each other: they offered goods of low value to themselves in exchange for what they perceived to be goods of high value, rather in conformity with Montesquieu's observation, cited above: “they can make them have a high regard for things of no value and receive a very high price for them.”Footnote 56 Perhaps more importantly, both parties traded “nonessential” goods and therefore the trade could be interrupted without any great shocks to the economies of the respective partners.Footnote 57 Getting prices right was comparatively unimportant and in any case meant quite different things for Europeans and Africans. It was only with the galloping growth of the Antillean plantation complex, starting in the late seventeenth century, that the slave trade became essential to European economies. Prior to this period, the quest for gold often drove European acquisition of African slaves.Footnote 58 Only after the mid-eighteenth century did prices for slaves begin sharply to rise, precisely as West Africa was incorporated into the world economy and its exports started to be valued in terms of opportunity costs of lost labor power at home, and world patterns of demand—the “just value” of things, described by Montesquieu, established on world markets.Footnote 59 But the Africa Montesquieu described in Book 21 was not yet fully incorporated into the world economy, and Europeans still continued to trade there advantageously for lack of a “just” standard of value between the two parties.Footnote 60
For his part, Montesquieu did not include any discussion of slavery in his broad characterization of Euro-African trade; nor, unlike world systems or dependency theorists, did he attempt to explain how processes that were well underway by the eighteenth century crippled African economic development.Footnote 61 Since Montesquieu denounced the enslavement of blacks, and saw it as contributing to European commercial hegemony, it may seem a bit curious that he does not include slavery in his discussions of the deep determinants of Euro-African trade.Footnote 62 Perhaps—and this is admittedly a speculation—Montesquieu wished to emphasize how incompatible systems of value could generate durable excess profits for foreign merchants, even in the context of relatively free and consensual trade; a discussion of slavery, rather than the more morally neutral question of gold, would have distracted from this purpose. What seems least likely, in my view, is that Montesquieu explicitly organized his discussion in order to blunt a criticism of slavery that, in any event, arises periodically throughout the De l'esprit des lois. Footnote 63
Despite the doux commerce thesis that Montesquieu used to explain the broadest secular shifts in the European economy, we see that, in a manner similar to dependency theory, he attempted to explain the factors that produced uneven outcomes even as world commerce continued its ineluctable expansion during the early modern period. The processes and even examples he examined resembled those favored by world systems theorists of the early modern and postcolonial capitalist world economy. This unevenness was the basis of his claim that policies should vary according to a nation's place in the international division of labor: France should isolate politics from commerce in order to preserve its monarchical political structure and maintain its lead in the manufacture of luxury goods; Poland would have done well to isolate itself from international trade in order to fill out its manufacturing base and redress glaring inequalities; and Japan, having far less to fear from foreign trade than it imagined, should rethink the isolation it had imposed upon itself since the seventeenth century. Methodologically, these prescriptions help us to better understand why the polemic of De l'esprit des lois was situated in the context of broad mutations in the world economy; it also better attunes us to the fact that the social and economic convergences that he and other eighteenth-century theorists of commercial society saw were only partial. The commercial society of doux commerce theory existed only in limited corners of the broader capitalist world economy.
A second contrast: István Hont and the “rich-country–poor-country” debate
From the 1980s to the early 2000s, István Hont published an agenda-setting series of articles on what he called the “rich-country–poor-country” debate as it unfolded in eighteenth-century Europe.Footnote 64 The problem of how poor countries can catch up to rich ones through the mechanism of international trade was a key element in Hont's overall project of depicting the challenge of “making state and market congruous” in a world of competitive nation-states linked by internationalized commerce.Footnote 65 If violent mercantilist competition over markets gave the lie to the doux commerce thesis, David Hume offered an analysis that provided a pathway out of zero-sum economic thinking. Poor nations became competitive with more developed, industrious ones by dint of the latter's high labor costs. The resulting price inflation made poor countries’ more competitive on international markets, and money that had formerly been piling up in rich countries would begin to flow to them; this was the centerpiece of Hume's so-called “specie-flow mechanism.” Eventually this price advantage would attract capital to poorer nations, spurring technological progress, raising productivity and reducing the structural advantages of rich nations. For their part, rich nations needn't immediately fear competition from poorer ones because of the former's durable productivity advantages in high-value export goods; in the meantime, these developing countries would demand increasing amounts of rich countries’ most technologically advanced (and profitable) commodities. In this world, everybody had something to gain from expanding world trade. This is the meaning of Ricardian comparative advantage.Footnote 66
In overcoming the jealousy of trade, the acceptance by policy makers and the public of Hume's specie-flow mechanism of Ricardian comparative advantage solves a weightier conceptual problem posed in Hont's work. For Hont, “commercial society” expressed contradictions of the European social order that political economists of the long eighteenth century sought, usually in vain, to resolve. “Society,” conceived of as a primary, altruistic social order or concord, lay in flat contradiction with the kind of competitive utilitarian individualism inherent in commercial relations.Footnote 67 At best, “commercial society” could, within individual polities, be understood as an example Kant's “unsocial sociability,” ungesellige Geselligkeit. Where the sovereign was empowered to enforce civil laws, the discipline of the market canalized otherwise destructively egotistical passions; under these conditions, “a pathologically enforced social union is transformed into a moral whole.”Footnote 68 But no structural forces balanced the social and unsociable elements of commerce between states; because of the state of nature that existed between them, they were committed to the Hobbesian war of all against all; in an age of commerce, this war was translated into what Hume called the “jealousy of trade” between nations.
Recognition of the reality of comparative advantage gave politicians and the people they led a way out of the most destructive contradictions inherent in commerce; free trade led the way for the establishment of commercial society, in the progressive sense, between states; in Hegelian terms, comparative advantage lent to global commercial society the possibility of Aufhebung (sublation) that Marxist understandings of capitalism deny. For Marx, capitalism produces some kinds of progress—notably technological innovation and the concentration of industry into larger, inherently more efficient units—but at the price of exploitation and in the context of self-destructive crises; the property relations and organization of production inherent to capitalism had to be superseded in order to preserve and extend this progress.Footnote 69 Hont, who wished to “retreat from” and “bury” Marx and Marxism, laid his bets on Hume's “cosmopolitan theory of commercial globalization”; in order to unwind its contradictions, commercial society had to be indefinitely extended through free trade between nations. For Hont, history fully vindicated the solution of privatized property and production reviled by Marx and Marxism; the only remaining issues to settle in commercial society were political: articulating international trade relations and fending off misplaced “moral” criticisms of the market by cushioning the disruptive effects of free trade.Footnote 70
Ricardo believed as well in the capacity of free trade to draw mankind together into a “universal society of nations,” and his theory of comparative advantage was in Hont's estimation both the final refinement and the ideal type of the irenic discourse on commercial society.Footnote 71 Accordingly, Ricardo's “classically formulated” theory deeply colored Hont's handling of the early protagonists in the rich-country–poor-country debate.Footnote 72 Given his labor theory of value, Ricardo's analysis of the self-limiting effects of trade dominance turns more insistently than does Hume's on the distinction between nominal and real prices; also in comparison with Hume, Ricardo lays far more emphasis upon productivity as the underlying determinant of relative value. He also insists in a way that Hume does not upon the differential effects of wage goods on profit.Footnote 73 The equalizing dynamics of Hume's specie-flow mechanism are set in motion by international imbalances in aggregate quantities, including capital stock and, especially, money supply; comparative advantage takes account of these as well, but Ricardo's treatment emphasizes arbitrage opportunities arising out of the differing quantities of labor required to produce specific commodities in different countries—English textiles and Portuguese wines being the canonic examples around which Ricardo organized his discussion of the international division of labor. Ricardo's theory of comparative advantage uses the specie-flow mechanism, but it does not lie at the center of it in the way that industry-specific differentials in labor productivity between nations do, in determining the international division of labor. Comparative advantage is not synonymous with specie flow.
Hont repeatedly deplores the “weakness” of Hume's overly figurative and rhetorical presentation and attributes to it contemporary criticism by figures like James Oswald, Josiah Tucker, James Stewart, and James Lauderdale.Footnote 74 Nevertheless, Hont equally faults these readers’ inattention for entertaining the “presumption that the so-called ‘automatic specie-flow adjustment mechanism in international trade’ was the conception behind a model which in reality centered on the international division of labor between rich and poor countries through the sharing out of the production of simpler products to the poor and of more sophisticated products to the richer countries.”Footnote 75 In other words, they failed to see comparative advantage in Hume's specie-flow mechanism. Hont systematically sets these bad students straight on Hume's real meaning, and in the process rectifies an analysis, which was in fact based principally on monetary aggregates; to be sure, “proportional levels” of “commodities, labour, industry and skill” enter into Hume's analysis in determining the respective money supply, but the analysis emphatically does not rest on varying levels of labor productivity in different sectors. This theory was elaborated in Chapter 7, “Of Foreign Trade,” of the Principles of Political Economy and Taxation, which Ricardo combined with a refined version of Hume's specie-flow mechanism. Ricardo was, of course, a reader of Hume and many connections can and should be drawn between their analyses. But in order to set Hume's “cosmopolitan theory of commercial globalization” on the most unshakable pedestal possible, Hont reads classical political economy back into one of its acknowledged predecessors; he thereby coaxes a full-blown theory of comparative advantage, replete with the center–periphery division of labor between skilled and unskilled labor, out of Hume's specie-flow mechanism.Footnote 76
Hont's sorting principles can be glimpsed in his treatment of the Tory MP and political economist Charles Davenant. At issue here is Davenant's “advocacy of laissez-faire,” in line with the English East India Company's interests, against calls for import restrictions against East Indies goods, in particular cotton textiles.Footnote 77 For Davenant, the admission of cheap India goods ultimately benefited England and its working class in myriad ways. The argument for the reexport of India goods by England to other European countries and to the West Indies was straightforward: the arbitrage by the India Company on the difference between the price of India goods purchased in Asia and then sold on Euro-American markets was found money; the immense profits that accrued to this trade swelled the national stock of capital and its capacity for consumption. Since the English had already acquired an invincible habit of luxury consumption, having their own trading company prevented the dead-weight loss that would attend buying fancy silks—licitly or as contraband—from the Dutch or French.Footnote 78 But the main argument confronted by Davenant, and in turn Hont, is that Indian textiles would destroy the native woolen industry in high-wage England by crowding out both internal and external markets with cheap cotton substitutes. Hont's reconstruction of Davenant lays emphasis on two factors: first, by allowing the free importation of cheap India goods, it would thereby reduce the cost of industrial workers’ necessary consumption, and hence their wages. This is an early example of the wage–good argument discussed by Ricardo. Second, Hont returns four times in the course of this discussion to the problem of skilled labor: England should not push up the wages of skilled labor by diversifying into new industries such as linen production, and it should continue to specialize in woolens and shift to fancier, more skill-intensive varieties.Footnote 79
In fact neither “skill” nor any of its cognates are used in the Essay on the East-India Trade, even though Davenant is unquestionably concerned with wages and the price of the goods that entered into their determination. Although one might reasonably conclude from Hont's reconstruction that labor productivity lies at the heart, Davenant's analysis is conceptually limited to the distinction between “things profitable” and “objects unprofitable” measured in terms of price; for this reason he has no specific policy proposals geared toward increasing the productivity of labor.Footnote 80 Indeed, when Davenant does employ the word “skill” elsewhere in his oeuvre it is not in reference to the dexterity, intelligence or productivity of workers; primarily, skill refers to the specifically political prudence capable of taking the “general view” and implementing beneficial economic policies; secondarily it refers to merchants’ nose for profit opportunities.Footnote 81 Davenant's major proposal in respect of the labor market, entirely omitted from Hont's exposé, arose from the “sloth and beggary” allegedly encouraged by England's parish relief system: “For we want hands, not manufacture, in England; and laws to compel the poor to work, not work wherewithal to give them employment.”Footnote 82 A private system of workhouses would supplant the parish relief system in order to “restrain idleness” and “set the poor to work.”Footnote 83 The answer to the problem of high wage costs was not the abbreviation of work by skill enhancements, but pushing “more hands” into the workforce, occasioning a salutary depression of wages and thus putting existing capital to work more profitably.
The point here is not that Davenant was an ogre preparing to make a meal of working-class misery or that Hont, by his omission of this scheme, sought retrospectively to prettify Davenant's laissez-faire economics. Davenant took considerable care in his proposal to guard against corruption and the abuse of the defenseless poor; and he connected an increase in the active working population and the cheapness of provisions with a general rise in well-being.Footnote 84 His solicitude seems genuine, albeit patrician, and in no way egalitarian in spirit. Hont shared Davenant's perspective that the widespread diffusion of work opportunities and income, as opposed to the sterile hoarding that excessive inequality occasioned, was both index and prerequisite of economic prosperity.
The real point is that once Charles Davenant is “reformatted” in order to better place him in the Hume–Ricardo lineage, the context that produced his workhouse proposal is modernized out of existence.Footnote 85 For quite some time, most economic historians have accepted that, until well into the nineteenth century, overall productivity increases in British manufacture lay somewhere between low and negligible; GDP growth was extensive, not intensive. The extraordinary rise in national income over the long eighteenth century has to be explained by factors besides technological or organizational change. The “commercial revolution” in eighteenth-century Britain and in Northern Europe more generally is now explained by the simple addition of working hours, not necessarily technology or skill. People worked more in order to afford the cheap “populuxe” goods, including comestibles, that now tempted them in urban boutiques.Footnote 86 But well into the eighteenth century, far from the whole of British society was absorbed into this newly industrious proletariat; the rural, the traditionally minded, or those who scraped along on charity and other community resources often failed to see the charm of massively expanded working hours in exchange for printed calicoes, hat pins, or gin.Footnote 87 Economists and projectors like John Locke, Bernard Mandeville, and Charles Davenant fretted about how to bring these refuseniks into the workforce, by force if necessary, and have their labor enter into a positive balance of trade.Footnote 88 They advocated for workhouses and charity schools in the absence of a fully developed labor market, obsessing about simply massing more labor into such markets as existed, because productivity acted far less visibly as a multiplier to national wealth. This was an old-regime economy in transition where demography, custom, and technological limitations—among other constraints—dictated the paths that largely agrarian societies wended first through commercialization and subsequently to the industrial society, with its differential rates of industrial productivity and “machine problem,” that Ricardo theorized over. Hont's influentially narrow reading modernizes the theory of thinkers like Davenant in order to facilitate their dialogue with Hume, Ricardo, and ultimately twentieth-century advocates of flexible specialization; here economic theory dictates what kinds of historical problems are even visible.
If the preceding attests to a sort of chronological telescoping, Hont's vision of a global commercial society also depends on a strategic geographic conflation, that of Europe for the world. Hont mapped diverse reactions to problems of international trade in places like Scotland, Ireland, England, and France, countries with “similar factor endowments and consumer preferences.”Footnote 89 China entered increasingly into Hont's later writings on the rich-country–poor-country debate, but not as an actual trading partner to early modern Europe of any significance. The eighteenth-century role of China as a sink for enormous quantities of American silver and, consequently, as the source for the luxury goods that pushed open crucial markets, thereby solidifying the dominance of European trading empires in the world economy, did not intrigue Hont.Footnote 90 China served rather as a thought experiment on the effects of savage price competition once reduced transport costs rendered it functionally similar, as a competitor, to the constellation of European states primarily of interest to him. For Hont, China brought home the relevance of the rich-country–poor-country debate to the twenty-first century, serving as a warning: “Our present is not the same as the present of the late eighteenth century. Our image of the future, however, might be identical or at least close.”Footnote 91 Like Hume, we should learn to love China and the prospect of relentless price competition between freely trading nations that it represented. Hont saw the principal problems of globalization in miniature in the “political economy of Europe” described by Hume and his interlocutors, with nations like China only dimly on the horizon.Footnote 92 This geographical conflation of Europe with the world points once again to the underlying economic theory, comparative advantage; bringing it into the light provides clues to what parts of the world economy this theory leaves out, that are, however, much more visible in alternative approaches.
The near total absence of the New World and Africa might be of slight significance for a story so self-consciously centered on Europe; particularly over the period Hont wrote, historians ardently disputed the contribution of the extra-European world to European industrialization.Footnote 93 But Hont's understanding of the state of early modern markets even excludes large parts of the European economy, damaging his account on its chosen terms. The coherence of the “cosmopolitan theory of commercial globalization” advocated by Hont relies on the equilibrium produced by the specie-flow mechanism and comparative advantage; these ensure the “self-canceling wealth of rich nations” rather than the perpetuation and intensification of inequalities through unequal exchange.Footnote 94 This is the position, as we have seen, that economists like Raúl Prebisch and later dependency theorists set out to demolish. Do these theoretical propositions faithfully represent the economy of old-regime France, which is so central to Hont's account? The historian Jean-Yves Grenier characterizes this economy as one where narrow, fragmented markets and sectoral imbalances were the rule rather than the exception. In this “patrimonial aristocratic economy,” each stage of the production–exchange–consumption circuit is only half submerged in the markets described by classical economists, which results in a “heterogeneous formation” of the most basic variables: profit and prices. Tellingly, as a result, Grenier documents how pre-classical French economists had difficulty setting forth coherent principles of price formation and market equilibrium. The price-setting and market-adjustment mechanisms necessary for comparative advantage to function are far less relevant in this context; they may be applicable, but only for a limited range of commodities traded in truly national or international markets. Indeed, it is precisely in the high-value-added sectors consistently emphasized by Hont that comparative advantage breaks down the most fully in the French case: luxury textile markets were highly segmented and non-scalable, and prices within them were overdetermined by social status. And as Silvia Marzagalli has argued, the growth of France's international trade probably intensified regional inequalities within France, detaching the economies of rich enclaves like Nantes and Bordeaux (and their hinterlands) from the broader French economy.Footnote 95 Was Hont misled by the views of his principal interlocutor in the rich-country–poor-country debate, David Hume, who grossly overestimated the modernity of the European economy in order to depict a set of nations converging on common norms of prosperity and good government? For instance, Hume falsely maintained—against the claims of Jean-François Melon—that eighteenth-century France and Europe more generally were as fully urbanized as England.Footnote 96 Theory has a way of influencing one's choice of relevant facts.
Hont's account integrates the ideas of Montesquieu and Jean-François Melon—Montesquieu's friend and colleague at the Royal Academy of Arts and Sciences of Bordeaux—into a range of British discussions about the relative influence of money supply, wages, and skill levels in determining degrees of competitiveness among European states.Footnote 97 Montesquieu and Melon are understood principally as advocates, for France, of a luxury-led manufacturing strategy against their European rivals; this approach would be based upon French command of a rapidly revolving “product cycle.”Footnote 98 Hont describes French political economy as structured by the same set of concerns that animate its British counterpart. This assimilation of France to the rich-country–poor-country debate makes a certain degree of sense given the pan-European dialogue among eighteenth-century writers. But Hont's theoretical baseline problematically assumes that French and British interlocutors contemplated similar objects—well-integrated markets with the sorts of price adjustment required to make Ricardian comparative-advantage theory plausible. Recent measurements of price convergence, the standard measurement of “hard globalization,” call into question whether anything like this happened on the scene of world trade before 1820, even in the relatively close quarters of the North Atlantic world.Footnote 99 Although between-country trends do not provide much justification for Hont's easy juxtaposition of French with British political economy, there is much better evidence that the UK's internal markets were more fully integrated than those of France in the early modern period. This is even the case for an economic historian like Guillaume Daudin who, while arguing that France did have some highly integrated regions that made for large markets, also believed that the country as a whole was fragmented by customs zones and geography.Footnote 100 Given these conditions, development in one region may have indeed inflicted underdevelopment on others.Footnote 101
When viewed as an integrated commercial society, alternative eighteenth-century understandings of the nature and effects of the international division of labor recede from view. By contrast, Montesquieu's sensitivity to unequal exchange and the “development of underdevelopment” in places like Poland and Africa may have been aroused by observing the discontinuities of France's old-regime economy. At issue here are not violent forms of primitive accumulation, beggar-thy-neighbor policies of exclusion, or commercial warfare—although these certainly existed—but the pervasive, if passive, market effects of trade in the context of deep socio-economic asymmetries. Hont discussed these kinds of asymmetry in Ireland and Scotland, to be sure; but quite in line with his observation that history vindicated early modern partisans of private property and free markets, it was always politics that stood accused of creating and maintaining underdevelopment there, and not markets themselves.Footnote 102
Hont's appeal to comparative advantage has the effect of limiting the scope of his advertised project—Jealousy of Trade: International Competition and the Nation State in Historical Perspective—to a story principally about European states and the political economy of their mutual interaction. There's nothing inherently wrong with adopting this limitation—it would be facile and uninteresting to level an accusation of Eurocentrism against a Mitteleuropean born in 1947—so long as it makes it possible to get the economies of these European states right. But the political economy that Hont has in view may not even be European, but only narrowly British, and ill-adapted to comprehending the realities of large continental European economies such as those of France, Spain and the Holy Roman Empire—let alone the uneven development on the peripheries of early modern commercial empires.Footnote 103
Hont's assimilation of modern economic theory into eighteenth-century debates goes well beyond Ricardian comparative advantage, however, and brings him into late twentieth-century accounts of post-Fordist industrial adaptation. Hont generally invokes the theory of comparative advantage in tandem with “flexible specialization,” a term used by Charles Sabel and Jonathan Zeitlin (the latter a colleague and frequent interlocutor at Cambridge) in a seminal 1985 article that discussed nineteenth-century alternatives to what eventually became the dominant model of industrialization, Fordism, which relied upon de-skilled production the context of ever-growing factories.Footnote 104 For Sabel and others, “flexible specialization” also represented a path out of the productivity crisis that afflicted the advanced capitalist countries starting in the 1970s. At the same time as social conflicts increased wages in the capitalist core and dented the competitiveness of their exports, the spread of industrial manufacturing techniques to low-wage countries flooded markets with mass-produced goods; Ricardian comparative advantage had ceased to function as advertised.Footnote 105 Instead of increasing units of capital and returns to scale characteristic of the Fordist industrial model, the model of flexible specialization called for highly skilled workers employed in recombinant networks of small firms capable of rapidly assimilating new technology and adapting to changing patterns in the world economy.Footnote 106
The language Hont uses to describe eighteenth-century policy debates echoes the context of post-Fordist crisis and adaptation to a striking degree. François Quesnay and François Fénelon are cited as advocates of “shock therapy,” the term for the monetarist policies, discussed above, imposed by the IMF in Latin America and, later, the former Soviet Union to reduce inflation and force structural reforms.Footnote 107 Retrospectively, the term was applied to Margret Thatcher's monetarist assault on British unions, which intentionally ratcheted unemployment up to vertiginous heights. Robert Skidelsky, biographer of John Maynard Keynes and admirer of Thatcher, argued that she was the “first of the modern shock therapists,” and the term has frequently been used more broadly to characterize radical reforms, usually initially (and intentionally) quite harmful to workers but ostensibly good for long-term economic health, wherever they have been adopted.Footnote 108
When speaking about the options open to eighteenth-century statesmen, Hont employs the rhetoric of “restructuring” that cannot fail to resonate with readers of the financial press of the 1980s, 1990s, and beyond:Footnote 109 why should legislators “protect outdated modes of employment and labor practices? The answer lay in a country's ability to reallocate and retrain its labor force. The making of greatness in the age of commerce … required constant economic restructuring and strong political nerves in dealing with the temporary dislocations that it caused.”Footnote 110 This passage does not refer to controversies in the Anglo-American world over free-trade pacts, union power, leveraged buyouts, deregulation, offshoring, or any number of free-market remedies for industrial decline and faltering corporate profitability; it is, rather, a paraphrasing of Jean-François Melon's advice for maintaining competitiveness in eighteenth-century French luxury industries. Hont's account of the long eighteenth century seems distinctively attuned to problems of retrenchment in eras of First World industrial decline and low-cost insurgency by developing nations, including the class conflicts that “industrial restructuring” could engender: “Increasingly, jealousy of trade became part of the emerging working-class opposition to commercial society and globalization.”Footnote 111
Hont's allusions to “shock therapy” and his approving references to “industrial restructuring” both call to mind the calculated brutality of Thatcher- or Regan-era economic reform, but in combination with the theory and rhetoric of “flexible specialization” they evoke the more conciliatory tones of free-trade cosmopolitanism played in the Blairite key.Footnote 112 This includes most especially the emphasis of Third Way politicians and policy intellectuals on the necessity for an educated, adaptable workforce; in the face of low-cost competitors with access to advanced capital goods, it was hoped that mature economies could nevertheless stay at the top of the international value-added chain and reduce inequalities.Footnote 113 Hont summarizes David Hume's favored “rich-nation” strategy in a similar way: “The crucial resource was human capital. Good education and the willingness for industrial restructuring were more important than the gains offered by the use of labor-saving machinery.”Footnote 114 We find Jean-François Melon advocating policies to “reallocate and retrain [France's] labor force” so that France could continue to dominate the product cycle of high-end luxury goods that it dispatched to foreign nations.Footnote 115 In Hont's eighteenth century as now, defending the cosmopolitan theory of commercial globalization against its critics meant finding ways to cushion its most visibly deleterious effects and thereby blunt class-based populist criticism.
Hont's last frame and twenty-first-century capitalism
The cosmopolitan theory of commercial globalization constituted a kind of final judgment for Hont on debates over global capitalism; internalizing his account of the eighteenth century would help us avoid the futility of “repetitive patterns of controversy” as they extended into the twenty-first century.Footnote 116 If, as Marc Bloch suggested, history is a film whose “last frame,” the present, illuminates the past because of its particular clarity to the historian, it is this period that directed Hont's vision.Footnote 117 But Hont died in 2013 and his final published writings were completed before the worldwide financial meltdown of 2007–8, the Great Recession, and the resulting political crises that now grip the core of advanced capitalist democracies.
How accurate a guide does Hont's vision of the eighteenth century provide for the twenty-first? Now it may be, as Hont suggested, that subsequent developments in the world economy make David Hume's solution to the jealousy of trade between rich and poor countries more applicable now than when he first formulated them.Footnote 118 The world is smaller and the “hard” globalization of radical price convergence is a more observable reality. But the post-2008 world has forced a reckoning with the late twentieth-century commercial cosmopolitanism for which Hont was such a forceful advocate. Although education has not necessarily buoyed growth in the mature capitalist economies, it has certainly helped to sharpen inequalities within them, all the while providing meritocratic justifications for inequality based on human-capital theory.Footnote 119 Offshoring and free-trade agreements—including the vast eastward expansion of the EU in 2004 and 2007—have led to extreme political polarization between metropolitan enclaves thriving on FIRE (the finance, insurance, and real-estate sector) and high-end consumption, and increasingly destitute, deindustrialized hinterlands. As I finished writing this piece in early January 2021, sectors of the American electorate menaced by this process attempted a violent, although so far unsuccessful, coup d’état. The steady increase of within-country inequality has not always been compensated by the between-country “levelling up” predicted by eighteenth- and twentieth-century free-trade enthusiasts; the success of the BRICs and “Asian tigers” has not yet been reproduced, and is perhaps not fully reproducible, on a global scale.Footnote 120 Industrial overcapacity means that most parts of the global South are also deindustrializing—at least in relative terms—even as market relations continue their seemingly ineluctable spread.Footnote 121 In overcrowded cities, the spectacle of vendors hawking phone cards, bottled water, or loosies to the customers they outnumber is hardly an example of the wealth-enhancing division of labor in commercial society that Smith envisaged; it is, rather, a kind of splintering of labor and economic involution.Footnote 122
Returning to the core of mature capitalist countries, the very basis for accumulation appears to be shifting under the combined pressures of overcapacity and low-cost insurgency. To those strains we must certainly add the costs of environmental degradation that have begun to tick up exponentially. Private bankers share fantasies with their high-wealth clients about a top-heavy economy of and for the wealthy, “plutonomy,” that will not keel over due to the increasing exclusion of the masses from both work and consumption.Footnote 123 The reality is better captured by widespread financialization adapted to chasing diminished profit opportunities; where new productive investments simply do not yield acceptable rates of return, freely roaming agglomerations of internationalized financial capital, in the form of private equity and debt finance, act as a powerful lever to extract surplus out of existing value chains. This is a world of mobile finance and portfolio capital that dominates and shifts markets; of networked enclave economies that bear decreasing relation to withering hinterlands in their respective “national” homes; and of economically and politically powerful monopolies or “platform” economies that extract rents out of consumers, firms, and states alike.Footnote 124
It is in this context that the “New History of Capitalism” has come to prominence in the United States. Without ascribing to its practitioners any unanimity concerning its nature, it is nevertheless clear that the widespread reintroduction of “capitalism” answers the need for a more critical set of categories to describe an unstable, unequal, and politicized global economy both past and present: “economy,” “market,” or “commercial society” now seem altogether too anodyne, perhaps even utopian.Footnote 125 Hont was at times attentive to the realities of inequality in market societies and the necessity of state action to redress it.Footnote 126 More broadly, Hont acknowledged that there were “alternative visions” of the global expansion of markets stretching back three hundred years: his own and that of the “center–periphery” model that criticized the world system on the behalf of “the weaker participants in international commerce.”Footnote 127 But while engaging the bearers of this alternative vision such as Andrew Fletcher, republican opponent of the 1707 Treaty of Union that brought Scotland into Great Britain, Hont relegated them to a secondary position as anachronistic voices from the political wilderness; perhaps more seriously, as we have seen, Hont had a tendency to portray these critics as not having fully understood the technicalities of the cosmopolitan theory of commercial globalization, and therefore considered them not really in a position to legitimately criticize it. Neoclassical economists have often treated their heterodox critics in similar fashion; and Hont expressed sovereign impatience over the “dreary nineteenth- and twentieth-century confusions” about Adam Smith's meaning. These led radicals to reject the liberal synthesis of the free market and representative politics—our modern commercial republics—that Smith, and Hont, regarded as the uniquely tenable solution to the age-old conflict between national sovereignty and international commerce.Footnote 128
About fifty years ago, world systems and dependency theorists began looking to the early modern economy—partly because the European dominance of the world economy began in the sixteenth century, but also because of a family resemblance between problems of Third World economic development and the “transition problem” so dear to a certain kind of economic historian. Immanuel Wallerstein, along with his colleagues and predecessors, had normative political commitments that pushed them to give critical accounts of the spatial dynamics of a specifically capitalist world economy whose patterns of accumulation set off periodic crises and mutations. Once again economic historians are looking to the capitalism of the early modern period, this time with the hypercapitalism of our own moment in mind; the mutual illumination between two epochs, where circulating financial capital dominates fixed industrial capital, has been considerable.Footnote 129
Reading Montesquieu as a kind of dependency theorist turns out to be less of a stylized, anachronistic exercise than the simultaneous contrast of this article might have initially led one to suspect.Footnote 130 István Hont was able to name but never adequately to describe this “alternative vision”—that of unevenness, unequal exchange, and persistent underdevelopment—that simultaneous contrast helps to recover in the work of Montesquieu, but that remains completely invisible in Hont's own account of Montesquieu and others. Hont's “retreat from Marx” entailed a certain insensitivity to the economic realities that underlay this vision. The cosmopolitan theory of commercial globalization held, and continues to hold, that misguided politics, and not property or markets per se, lie at the root of whatever contradictions continue to plague our economic system. The travails of the twenty-first century have sorely tested this thesis, and therefore the grounding that Hont provides for it in a narrowly conceived commercial society; whatever lessons eighteenth-century political economy has to tell us about our present epoch, it will be as a part of the physiognomy of the capitalist world economy over the longue durée.Footnote 131
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Acknowledgments
I would like to thank the organizers of, and participants in, events at Seoul National University, the University of Pisa, the University of Saint Andrews, the University of Chicago, and the Institute for New Economic Thinking for their insightful criticism. Some among them, particularly at Saint Andrews, were friends or students of István Hont's, and I am therefore all the more appreciative of the open-minded, constructive attitude they adopted. Two among them, Richard Whatmore and Sophus Reinert, also helped me locate unpublished sources. I owe special thanks for suggestions made by Jeff Collins, Ollie Cussen, Gary Herrigel, Chris Hong, Sankar Muthu, Lucas Pinheiro, Jennifer Pitts, Alex Schmidt, John Shovlin, and Mike Sonenscher, as well as to the editors of Modern Intellectual History and anonymous readers for this journal.
