In response to Perry Anderson’s ‘Figures of Descent’ (nlr 161), I attempted in my contribution (nlr 167), as part of a more general critique, to defend the traditional Marxist view of British capitalism and the British Empire as being rooted in industrial and not in commercial capital accumulation. Geoffrey Ingham complains (nlr 172) of my polemical tone, of the ire he says I reserve for him and of the ‘caricature’ of his work that I have set up in order to knock it down. I sincerely regret the tone, especially since it has encouraged Ingham to reply in kind. These are important matters that should be the subject of calm and scholarly deliberation. My irritation was aroused, I am afraid, as I noted in my article, by Ingham’s persistent reference in his book, Capitalism Divided? to ‘traditional Marxist theory’, ‘theoretical Marxists’, ‘orthodox Marxists’, ‘cruder Marxist theories’, etc., from which he wishes to distance himself, without distinguishing the different writers to whom he is referring or giving us chapter and verse. As a result we cannot reply rigorously, but only with a broad brush.

In his response Ingham has most notably thrown his cloak over Anderson’s interpretation of the lessons of Capitalism Divided?, but it was Anderson who created the ‘caricature’, which seemed to me to need challenging, in particular in his description of British capitalists as chiefly ‘commercial intermediaries’. It does still seem to me that some of Ingham’s argument lays itself open to misinterpretation. His emphasis on the continuing dominant role of the City, even in a ‘capitalism divided’, and on commercial activity in the expansion of empire does lend itself to what I believe to be a serious underplaying of the basic role of accumulation from productive capital in British capitalism and in British imperialism.

I am happy to recognize the justice of Ingham’s complaint when he writes (p. 63): ‘Barratt Brown argues as if any concession to my notions about Empire and the City’s commercial capitalism necessarily involves a criticism of the traditional view. But this is not so, the respective approaches are not logically exclusive. It is, rather, the factual basis of the traditional view which is so difficult to uphold.’ I believe that this is not so difficult; and, since Ingham accuses me not only of ‘conceptual confusion’ of Marxist theory and of ignorance of recent scholarship, but also of misrepresentation, I am bound to seek to defend myself and particularly my definitions of commercial and industrial capital.

The first example Ingham gives of misinterpretation is that I falsely accuse him of including brewing together with commercial activities. The facts are (a) that Anderson quite specifically does so on page 34 of nlr 161; and (b) that Ingham does so on page 138 of Capitalism Divided? when he contrasts the patronage given by Liberals to industrialists with Conservative generosity to ‘bankers, ship owners, merchants and brewers’. But the heart of his argument is that I ‘obscure one of Marx’s most enduring achievements’ in ‘misunderstanding the theoretical treatment of commerce in Capitalism Divided?’ (p. 48). It is Marx’s own analysis of the forms and circuits of capital on which Ingham says that he based his discussion, while I, for example in my inclusion of shipping in the profits of productive capital, have simply taken a ‘common sense standpoint’. To establish that Marx thought otherwise, he quotes from Marx’s distinction in Chapter 5 of Volume One of Capital between the ‘primary form of capital, the form in which it determines the economic organization of modern society and . . . so to speak antediluvian forms of merchants’ capital and usurers’ capital’. But he only quotes Marx’s insistence that ‘circulation or the exchange of commodities creates no value’, and not the complete ‘antediluvian’ reference. (Incidentally, for the benefit of those who wish to follow up the reference, it occurs on page 266 of the Penguin edition, and not as cited by Ingham on page 331.) In this passage Marx says nothing about the carrying trade being part of circulation and therefore, like other commercial activity, creating no value. When, in Volume Two of Capital, Marx does go into detail about the costs of circulation, he devotes a special section to ‘Transport Costs’ (pages 225–228 of the Penguin edition), in order to insist that ‘the productive capital invested in this industry [i.e. transport—smbb] thus adds value to the products transported, partly through the value carried over from the means of transport, partly through the value added by the work of transport. The latter addition of value can be divided, as with all capitalist production, into replacement of wages and surplus value.’ This is, of course, also the common sense view of all those who have ever been involved in commodity dealing, as Marx explains. Transporting commodities from their source to the market is as much a part of the production process as their extraction from the earth, and the surplus value which the merchant gets his fingers on is created as much for example in the transporting of coal to the coal merchant as it is in transporting it to the surface. Otherwise, only the most direct labour of coal cutting, weaving, planting or harvesting could be regarded as productive labour.

My case for including most of overseas investment in productive capital and not in commerce is that most of it involved and still involves extraction of surplus value from productive labour. I did not claim that nearly all overseas investment involved and still involves productive capital, but Ingham does claim that nearly all of it was and is commercial. In his reworking of Imlah’s data, he puts all income from overseas investment under the heading of Banking/Finance. He criticizes my list of productive investments on two grounds: first, he says that when I include sugar and cotton plantations as well as tea and rubber estates, I am guilty of ‘conflation of the plantation slavery of the old colonial system with the imperial activities of the late Nineteenth Century.’ Were there no sugar and cotton plantations in the late nineteenth century? Secondly he answers my inclusion of mills and factories by arguing that in 1913 only five per cent of Britain’s overseas investment was in manufacturing industry. He completely leaves out from my list in quoting from it: ‘gold, silver, copper and tin mines, Lever Brothers, oil companies, the Chartered company, Dalgety, railways and other utilities.’ The Chatham House study of British overseas investment in 1913 included 41 per cent in railways, 10 per cent in mines, 5 per cent in public utilities, and shipping and 3 per cent in other raw materials. These, together with the 5 per cent in manufacturing, make up a total of 64 per cent of investment in productive industry.

We can now re-examine Ingham’s revamping of the Imlah data and make allowances for any subsequent downward revisions of the overseas investment figures. If we take the 64 per cent of investment income out of the column of Banking/Finance and add Shipping earnings together with earnings from the Export of Goods, then the proportion of overseas income derived from productive capital comes to 76 per cent of the total, and not, as Ingham avers, some 50:50 with income from commerce and finance. Moreover, the growth of productive capital in the nineteenth century can be seen to be as rapid as that of commercial capital, which is what both Ingham and Anderson specifically deny. Even if we take account of the fact that some of the investment in production only came through London to overseas territories, this was certainly equally true of commercial investment.

Most of Ingham’s other arguments with my article are predicated on the assumption that, in my view, the City is not ‘primarily the centre of commercial capital’ (p. 46). My case is quite different: it is that British capitalism is not, and never was, primarily involved in commercial activity. In Capitalism Divided? Ingham made an extremely important point about the commercial, merchanting function of the City being distinct from its financial function—i.e. dealing in commodities including money rather than lending, and hence being paid in fees and commissions as much as in dividends and interest—and if I had been reviewing his book and not Anderson’s article I should have made much of this. But the question at issue is not the place of different functions in the City; it is the role of the City in British capitalism. I have shown, I hope, that Ingham exaggerates the place of commercial capital in the overseas balance. I believe he has encouraged Anderson to exaggerate the continuous decline of British industry. He derides my suggestion that ‘British productivity held up remarkably well until the First World War’. While I recognized faster growth in the usa and Germany (nlr 172, p. 59) I gave the figures for industrial productivity in the uk in order to correct Anderson’s exaggerated statements about an absolute decline (nlr 162, p. 27).