Despite their overtly historical nature, Anderson and Nairn’s essays on British development were profoundly theoretical. The identification of British ‘peculiarity’ or ‘exceptionalism’ involved a challenge not only to Marx and Engels’s commentaries on the times in which they lived, but also to the general Marxist theory of capitalist development. footnote¹ However, this aspect did not figure explicitly in the early debates: for example, Thompson attempted to settle the issue by simply denying the historical validity of Anderson’s revisions. It was not until a later sequel that Nairn tried to reconcile historical heterodoxy with traditional Marxist theory. ‘A generally Marxist model of Britain is sufficient’, he wrote, but it had to be ‘historical and specific’. He saw the major deficiency of past Marxist analyses of Britain as the ‘overabstraction’ involved in explaining the functioning of state and society wholly in terms of the internal industrial economy and its relations of production. footnote² But this was theoretical legerdemain: at what point, I asked in Capitalism Divided?, does the historically specific model part company with the concept of the capitalist mode of production and all that this entails in Marx’s scheme. Anderson’s ‘Figures of Descent’ contains a different claim for the legitimation of heterodoxy: he believes he can detect a clear shift in Marx and Engels’s understanding of bourgeois power in nineteenth-century Britain. It is suggested that they moved from believing the industrial bourgeoisie to be ‘in command of Victorian state and society’ to a view that this class was ‘subordinate in its actions and aspirations’ to the aristocracy. footnote³ This may be a reasonable interpretation of the doubts expressed by Marx and Engels in their occasional essays as the century progressed, but it is not the substance of the Preface to a Critique of Political Economy or of Capital. footnote⁴ And it is these works which formed the basis for Marxist economics, sociology and history. In short, it is extremely difficult to reconcile the subordination of the industrial bourgeoisie during the nineteenth century and beyond with the tenets of Marx’s ‘theory of history’. This remains one of the main points of difference between myself and Anderson; details apart, I concur with the substance of his historical account. footnote⁵

Michael Barratt Brown’s polemic is ostensibly directed at ‘Figures of Descent’, but most of his ire is reserved for Capitalism Divided?. ‘Away With All The Great Arches’ belongs firmly to the older empirical mode of criticism to which I referred earlier. It is primarily an uncompromising reassertion of Marxist (and liberal) orthodoxy: that is, of the absolute centrality of the ‘industrial revolution’ and industrial capitalism for an accurate understanding of Britain’s general development. footnote⁶ Capitalism Divided? is vigorously rejected because of alleged ‘factual errors’ and ‘rather large conceptual confusions’; it is, in Barratt Brown’s view, very bad history and consequently cannot threaten traditional Marxism. However, theory is not entirely absent; as we shall see, Barratt Brown’s history is informed—albeit implicitly—by an eclectic combination of two opposing strands of orthodox Marxism. Both ‘functionalism’ and ‘instrumentalism’ are woven into his narrative.

There appear to be five main elements in Barratt Brown’s critique. In the first place, most critical emphasis is placed on my designation of the City as primarily a centre of commercial capital. This is seen to be ‘conceptually confused’ and ‘ambiguous’. Second, he questions my view of Britain’s productive economy and, especially, the analysis of finance—industry relations presented in Capitalism Divided?. Third, the identification of the City—Bank of England—Treasury relationship as the ‘core institutional nexus’ of British society and the means by which the City’s hegemonic position has been reproduced is alleged to be ‘fatally flawed’. Fourth, my discussion of the links between the City and Empire is brusquely dismissed as ‘quite simply nonsense’. Finally, these serious deficiencies are ascribed to my method: the analytical or sociological history of Capitalism Divided? is described as a ‘great arch’ from whose lofty vantage-point I (and Anderson) have failed to observe the major discontinuities which Barratt Brown detects in Britain’s development. Unfortunately, there are also many instances of misunderstanding and what I can only interpret as misrepresentation in his polemic: much of ‘Away With All The Great Arches’ is the dismissal of a caricature.

It is arguable that I devoted too much attention to the careful elaboration of conceptual distinctions between the economic practices of commercial, banking and productive capital—in fact, almost three chapters. Moreover, the discussion was based on Marx’s own analysis of the forms and circuits of capital. None of this is referred to by Barratt Brown and this probably explains why he can claim that I present a ‘peculiarly ambiguous definition of commercial activity which includes banking and insurance and merchanting, but, apparently, also brewing and shipping and sometimes even all forms of overseas investment.’ footnote⁷ The first and least important objection is to Barratt Brown’s curious misrepresentation. Nowhere in the book did I include brewing under the rubric of commercial capital, and in the reference he cites for the quotation above there is no mention of either shipping or overseas investment. In fact, my whole enterprise was to move away from the potentially confusing commonsensical definitions of economic activity which Barratt Brown falsely attributes to me. The passage in the Introduction to Capitalism Divided? which he cites as the source of his interpretation is as follows: ‘Fundamentally, London’s role in the world system may be seen as the specialization in and near monopolization of the commercial activities which are based on the existence of international exchanges. These activities include the financing of trade, insurance of commodities and transport, foreign exchange dealing, etc. The City has not simply dealt with Britain’s exchanges with other states, but has performed a wide range of functions for the world system as a whole. The most important aspect of this role has been the management of the domestic currency as world money—that is, as an internationally acceptable means of payment and exchange. More recently, the largest single share of the transactions in de facto universal money such as Eurodollars has been undertaken in London.’ footnote⁸

I also argued that the ‘City is not—as most Marxists have maintained—a special type of “finance capital” which is externally rather than domestically oriented. Clearly, the City is involved with financial relationships, in the sense that money capital is provided for different purposes. But the City’s main role is in the intermediation of these relationships—that is to say, considered as economic practices these activities are commercial. . . . The roles of the City houses as middlemen or brokers in the provision of finance overseas (and domestically for that matter) are best viewed as comprising commercial practices which form part of complex financial relationships. For example, the City’s profits have not been primarily in the form of interest, but a deduction from this in the form of brokerage fees or commission—that is, commercial profit from the trading in various forms of investment capital.’ footnote⁹

Eventually, Barratt Brown concedes that my analysis has some contemporary significance: ‘. . . the City today is . . . not the engine of anything except of the revolving wheels of a casino . . . Today we can indeed begin to understand what Ingham meant by commercial as opposed to productive activity.’ footnote¹⁰ But he sees this as a very recent departure; in the nineteenth century, he argues, the City’s main role was in the provision of investment capital both at home and overseas—especially to the Empire. footnote¹¹ Barratt Brown utterly rejects my stress on the enduring clearing-house role of the City in the world system. However, the contrast is surely overdrawn: today as in the nineteenth century, the funds which pass through London finance all kinds of activity throughout the world—including production and speculation. But the fundamental point, which Barratt Brown simply fails to grasp, is that the City itself has never realized the major part of its own profits from investment in production, but, rather, from the financial and commercial intermediation which enabled this to take place.

The main thrust of Barratt Brown’s polemic hinges on my alleged misuse of Imlah’s statistical work on Britain’s balance of payments in the nineteenth century. footnote¹² In a formal sense the dispute’s resolution rests on Barratt Brown’s concession that my ‘thesis can be justified only by including shipping revenues with financial services.’ footnote¹³ The reasons given for the exclusion of shipping display Barratt Brown’s own conceptual confusion and, it must be said, either his neglect or his misunderstanding of the theoretical treatment of commerce in Capitalism Divided?. He continues: ‘Shipping apparently appears under commerce because it is concerned with foreign trade; but it is not a financial service and the direct exploitation of labour by capital could hardly be more apparent than in this industry.’ footnote¹⁴