Karl Marx

by Jonathan Sperber

  The uprising, which for a while seemed as if it might drive the British out of India altogether, was an enormous shock to contemporaries, prompting a wide-ranging debate about its nature and origins. Marx’s own reporting reflected a number of the themes of this public debate, such as Islamic hostility to the rule of a Christian power, or the insurrection as result of an anti-British conspiracy of the native rulers. For all his criticism of the insurgents, Marx attributed responsibility for the uprising to British colonial policy, which he denounced in no uncertain terms.47

  In 1857, Marx concentrated on the burden of taxation; he denounced the seizure of property, directly by British troops and indirectly by government policy. The British, he said, were “foreign conquerors who have . . . abused their subjects”—portraying them in this sense as very similar to previous conquerors. These British exactions, Marx suggested, went largely to the benefit of politically connected insiders—the officers of the East India Company and senior civil servants—appointed “nominally by seniority and merit, but really to a great extent by favor.” Joining this corrupt group were the politically connected businessmen, stockholders of the East India Company, and a handful of British merchants who controlled the “foreign trade of India.” It was only “individual British subjects” who benefited from imperial rule, while the British taxpayers shared with the Indian subjects its expense, “and it may well be doubted whether, on the whole, this dominion does not threaten to cost quite as much as it can ever be expected to come to.”48

  This analysis of British colonialism does not seem “Marxist” at all, but more like an older (Marx undoubtedly would have said petit-bourgeois) strain of radicalism that denounced the British government for its high taxes, spent on lavish sinecures for undeserving aristocrats and corrupt officeholders. As a critique of the British Empire, it had previously been articulated by Cobden and Bright, those two “Peacemongering” representatives of English industrial capitalism Marx disliked so much during the Crimean War.49 The analysis also downplayed precisely what Marx regarded as the feature distinguishing British rule in India from that of previous conquerors, its socially revolutionary consequences.

  Benjamin Disraeli, the Tory leader whose political acumen and intellectual acuity Marx so admired, placed these revolutionary consequences at the very center of his analysis of the Indian uprising. Yet Marx was deeply disappointed with Disraeli’s three-hour oration in the House of Commons in which he expounded his views. The problem for Marx was that the consequences of British rule Disraeli outlined—namely, abolishing the feudal and seigneurial privileges of Indian noble landlords, cutting British subsidies to native princes, and seizing control of their territories outright—were features of this rule that Marx supported, as steps toward the destruction of a static Asian society.50 Rebellion against this rule was reactionary, opposing the triumph of a capitalist world market that would lead to socialism. Marx definitely disagreed with English radicals who saw the Indian insurgents as nationalist freedom fighters. Jenny wrote scornfully to Engels about Ernest Jones, who “turns all the Indians into Kossuths and celebrates the Indian patriots.”51

  When Marx turned to other conflicts of the British Empire in Asia, he had even less to say about capitalism as a global economic system. He discussed the British war with Persia in 1856 in terms of the balance of power in Europe, condemning Britain’s anti-Persian policy for increasing Russian influence in the region.52 The Second Opium War of 1856–59 was about both capitalism and colonialism, stemming from the illegal British export of opium from its Indian colony to China in order to balance its trade deficit with the Chinese Empire, and to avoid the drain of British silver reserves. Marx was very familiar with the balance of payments question, which he discussed at some length in his articles on economics.53 But in covering this war he emphasized its diplomatic consequences, once again perceiving British military action as leading to an increase in Russian power. Insofar as the war had economic results, Marx saw them as bad for British capitalism, cutting off British access to Chinese markets and encouraging the Chinese to sell their tea and silk to the Russians. This emphasis on the pro-Russian results of British policy was connected to Marx’s coverage of the Crimean War, since the architect of the Chinese and Persian policies was the same prime minister, Lord Palmerston, whom Marx had denounced as a secret agent of the czar.54

  For all Marx’s evocation of capitalism as a worldwide economic system, his intense interest in the consequences of British colonial policy was strikingly Eurocentric, focused on English domestic politics and on the European balance of power. In part, this attitude was a reflection of the nature of imperialism in the middle decades of the nineteenth century, when Great Britain was the only power to possess an extensive colonial empire. The building of competing European overseas empires only began in the 1880s, at the very end of Marx’s life. But Marx’s political focus also reflected his opinion of the primacy of Europe and North America in global affairs. Writing to Engels at the end of 1858, when Marx was more optimistic about the prospects for revolution than he had been in years, he explicitly discussed the connection between global capitalism and communist revolution in Europe in a way he had never done for events in Asia:

  The inherent task of bourgeois society is the creation of the world market . . . and of production on its basis. Because the world is round, it seems that this process has been brought to its conclusion with the colonization of California and Australia and the opening of China and Japan. The difficult question for us is this: on the [European] continent, the revolution is imminent and will immediately take on a socialist character. Will it not necessarily be crushed in this little corner, because on the much larger terrain the movement of bourgeois society is still in the ascendant?55

  This speculative statement was the only time when Marx wondered whether a socialist revolution in continental Europe could be overwhelmed by a globally dominant Anglo-American capitalism. Such a revolution, in spite of Marx’s expectations, never occurred in his lifetime. Rather, it was twentieth-century communist revolutionaries in Russia, China, or Cuba who had to grapple with the question Marx briefly posed in 1858.

  A RENEWED REVOLUTION, MARX had proclaimed in 1850, would begin with a new economic crisis. No sooner had he made this proclamation then he began to search for glimmers of an emergent crisis, finding them in harvest failures, a rise in interest rates, or declines in the stock market. Marx was not chary of alerting readers of the New York Tribune of the “approaching economic disasters and social convulsions”; he informed them that British industrial production’s “movement of expansion is becoming accelerated at the very moment when markets are contracting,” asserting in 1855 that “a few months more and the crisis will be at a height which it has not reached in England since 1846.” He queried Engels about business conditions and market outlets in the Manchester textile industry, seeking signs of an economic crisis, which his friend was quick to provide. As Wilhelm Liebknecht remembered, Marx’s constant expectation of an economic crisis became a standing joke among his London friends and associates.56

  The long-awaited crisis finally did occur in 1857, beginning in the United States and spreading across the globe. It was a substantial downturn, generally regarded as the first worldwide recession. Exulting in the viral expansion of economic distress, Marx wrote to Conrad Schramm, his old ally from the Communist League, about the “earthquake-like effects of the general crisis, which every connoisseur must savor. . . .” Jenny added an observation about how the onset of an economic crisis had dispelled the long period of gloom and depression in which Karl had been mired since the death of his son:

  Although the American crisis has been very perceptible in our money-bag, since Karl only writes once weekly for the Tribune instead of twice . . . you can very well imagine how high up the Moor is. His entire previous ability to work and his ease of mind and manner has returned, as well as the vigor and cheerfulness of spirit, that had been broken for years, since the great sorrow, the
loss of our dear child of the heart, for whom my heart will always mourn.57

  With his optimism newly restored, Marx plunged into renewed activity. Busy during the day with his newspaper correspondence, he worked through the night to complete his treatise on economics before the imminent outbreak of revolution. His correspondence with Engels during 1857 and 1858 turned to future revolutionary prospects, including possible relations between German insurgents and a revolutionary France (both men continued to believe a European-wide upheaval would commence in Paris), and ironic observations about how the looming economic and political crisis would upset the domestic stability their lives had recently achieved after years of upheaval.58 In a well-known passage, Engels told Marx that he was concentrating on riding and shooting, in preparation for forthcoming revolutionary warfare. Marx, who was rather more skeptical about horsemanship (although Engels did make repeated efforts to introduce him to the sport, and actually got Marx into the saddle for two hours one day), tried to calm him down, pointing out that there would “soon come more important opportunities to risk your neck. . . . I do not believe that cavalry is the specialty in which you are most needed for Germany.”59

  Marx analyzed the origins and nature of the 1857 economic crisis both in his journalism and in his correspondence with Engels. Two central features of this analysis, the role of credit and of international financial transactions, are of particular interest because Marx never developed a full discussion of either in Capital.60

  Marx’s thinking about capitalism during the 1850s was influenced by the growth of a new kind of financial institution, the Crédit Mobilier: the world’s first corporate bank, whose capital was raised through the sale of stock shares rather than coming from bankers’ own assets. It was a daring innovation of the Pereire brothers, onetime Saint-Simonian socialists themselves. Most financiers of the day were deeply suspicious of this new kind of finance, seeing it as an elaborate form of fraud. At times, Marx was inclined to agree. “Swindle” became a favorite term of his to describe the bank. Its close connections to Napoleon III—whose regime Marx, like many contemporaries, perceived as fraudulent—only contributed to his suspicions.61

  In other moments, Marx found the bank’s operations legitimate, a good example of capitalism hurtling toward crisis. This was the opinion that came to the fore in 1857. The bank invested primarily in industrial and railroad corporations, either underwriting initial public offerings or purchasing the stock of existing firms listed on the Paris Bourse. What intrigued Marx about these financial operations was, as we would say today, the bank’s leverage. Its statutes allowed it to borrow up to ten times the value of its capital. Almost giddily fascinated, Marx thought this borrowing set the stage for crisis. The bank’s leveraged investments greatly increased the productive capacity of French industry, beyond the market’s ability to purchase all its products. In addition, the bank invested its borrowed funds in stock shares that could drastically fall in value during an economic crisis brought on by the very overproduction the leveraged investments had created, leaving it unable to meet the demands of its creditors.62

  Engels offered his own version of the connection between leverage and overproduction, based on his observations of English textile manufacturing, where businesses were mostly family-owned or private partnerships rather than corporations. These firms, Engels noted, issued bills of exchange, secured by their stores of raw materials or manufactured goods. With the funds generated by these credits, a “mercantile community,” Engels calculated, could increase its capital and thus its production by 50 percent. The bills of exchange were short-term credits, but they were rolled over when they came due, until the economic crisis created by overproduction stemming from the credit-based expansion of output led the firms’ creditors to call in their loans.63 The empirical basis for this interpretation of excessive leverage as the origin of an economic crisis came from the experiences of Marx and Engels in bourgeois occupations. It was not so much the philosophical ideas of Hegel or the economic theories of Ricardo that informed their insights as it was their work as business columnist and cotton wholesaler, respectively.

  The second element of Marx’s take on the 1857 recession also stemmed from his work as a journalist, namely, his analysis of the international propagation of the crisis following the balance of payments. The crisis would spread from creditor countries to their debtors, as the former would call in their loans from the latter. The debtors would have to call in loans from their debtors in turn, or their central banks would have to raise interest rates to keep money in the country. When the Bank of England raised the discount rate to 9 percent, Marx became especially excited, seeing this move as evidence that the crisis had reached the heart of world capitalism and a new revolution could not be far off. Although he looked primarily at trade and credit relations between European countries, as well as the United States, his analysis did contain a global note. Marx analyzed the persistent balance of payments deficit European countries ran with China, which led to silver leaving Britain and the Continent, driving up the price of silver relative to gold. The rise in silver prices affected the exchange rates of the major European currencies, which had different ratios of gold to silver in their backing, and helped to shape the spread of the economic crisis via the balance of payments.64

  A large part of Marx and Engels’s jubilant mood came from following the progress of the crisis from one country to the next. Marx wrote Engels in October 1857: “The American crisis . . . is beautiful. The setback to French industry was immediate. . . . The complaints of the English money-article writers that their English trade is sound but their clients abroad unhealthy is original and lively. How are things with the Manchester manufacturers?”

  Engels replied: “The effect back on England seems now to have commenced. . . . All the better. Commerce is now once again worthless for 3–4 years. Now we have some good fortune.” A month later, he turned to Germany: “In Hamburg, things look terrific. . . . There has never been a panic so complete and classical as in Hamburg. Everything is worthless, absolutely worthless, except for silver and gold . . . for the moment, Hamburg is commercially annihilated. The German industrialists . . . will once again suffer heavy blows.”

  “So much as I myself am in financial distress, following this outbreak I have not felt so cozy since 1849,” Marx summed up for his friend.65 Contributing to these expectations was early evidence that the age of reaction in Europe was coming to an end. In 1858, Friedrich Wilhelm IV of Prussia became mentally incapacitated and had to turn the reins of state over to his brother, Prince Wilhelm, who promptly dismissed from office the reaction-era government ministers.66

  Such political developments helped keep Marx’s hopes up even as signs of economic recovery became increasingly apparent in the course of 1858.67 The long-awaited economic crisis had not led to a new wave of revolutions. But it had energized Marx, bringing him out of the torpor and depression that had plagued him since the death of his son. At the end of the 1850s, just as at the decade’s beginning, Marx’s private mood and broader trends of European politics seemed to coincide. The age of reaction waned, and the position of the great powers became unsettled. After a long period of hibernation, movements of political opposition began to stir in 1858–59, and Marx was prepared to end his role as a detached observer and become, once more, a political activist.

  9

  The Activist

  THE DREARY STASIS OF the age of reaction and its authoritarian regimes was succeeded by twelve years of reforming governments, lively public debates, and intensifying political struggles between 1859 and 1871. Crucial issues that had ignited the revolutions of 1848—national unity, constitutional and democratic government, the “social question”—returned to centerstage. At the same time, veterans of the midcentury revolution, Marx most certainly among them, gradually accompanied by a new generation of activists, pondered how their previous causes could be revived and what forms of political action would be needed to do so. This new burst
of political contention in the years after 1859 accompanied and influenced the hegemonic struggles of the great powers begun in the Crimean War of 1853–56. They continued and intensified, reaching their climactic conclusion in the existential clash between Prussia and France in 1870–71.

  These two trends, the return of possibilities for political action and the continuation of the conflicts of the great powers, formed the backdrop to Marx’s own political orientation. His fundamental objectives remained unchanged: organizing the workers for a class struggle leading toward socialism, opposing authoritarian rule in Prussia, and advocating revolutionary war against the czar. But new great power initiatives posed by Napoleon III and Otto von Bismarck, and the nationalist passions they summoned up, complicated the once clear connections between war and revolution. Marx’s political means became as complicated as his ends. Should he retain his residence and focus of political action in England, or should he return to Germany? Would his political activity center on journalism, as it had in the past, or would it shift to the nascent institutions of the labor movement? Besides such strategic perspectives, Marx’s personal circumstances—his mother’s death, his wife’s illness, the maturing of his daughters, the deterioration of his health, and the disastrous effect of the American Civil War on his already shaky finances—would strongly influence his choices.

  IF THE CRIMEAN WAR only evokes the faintest of memories today, the equally significant Northern Italian War of 1859 is completely forgotten. In April of that year, armies of Napoleon III invaded the Austrian provinces of northern Italy, joined by the emperor’s ally, the small northwest Kingdom of Piedmont-Savoy. The allied armies’ defeat of Habsburg troops at the bloody Battle of Solferino on June 24 was the decisive sign of the end of the age of reaction and the onset of a new era of movement in European politics, beginning with a heated dispute over the war itself.