by Sven Beckert
None of these cities, however, competed seriously with Liverpool. The channels through which cotton flowed were not evenly distributed across the world. They narrowed and widened at certain points, and the volume and velocity of the flow was a direct expression of the distribution of influence; the deeper and faster the network, the greater the power. While Liverpool enjoyed a torrent of trade and information connecting it to many places, hinterland towns in Mississippi or Buenos Aires saw but a lazy, gentle flow to and from very few places. To be at the very beginning or the very end of a “commodity chain” thus was usually a position of relative weakness. The focus of the cotton network on one city, Liverpool, led to new hierarchies of power—an innovative development that replaced older cotton networks and older merchant groups in cities such as Ahmedabad or Surat or Oaxaca. The rise of Liverpool’s merchants at the turn to the nineteenth century further moved a multipolar world of cotton into the direction of becoming unipolar.
Seen from the cotton exchange at Liverpool, the world beyond its high windows was essentially a huge cotton production and consumption complex. The voracious appetite for profit demanded ever more lands for the commercial production of cotton, the multiplying of cotton mills, and the opening of cloth markets. This unprecedented and highly leveraged industrial expansion depended for its survival on the permanent transformation of the global countryside to mobilize ever more labor and resources and provide markets. Yet despite the omnipresence of Liverpool capital and its merchants, the nature of these connected transformations looked radically different in the Black Forest, Bombay, or Mississippi.
While Liverpool merchants stood at the heart of this new empire of cotton, in fact constituted it, they were just one of many groups of traders engaged in the global cotton trade. Jointly these traders coordinated the efforts of the hundreds of thousands of slaves, peasants, and planters growing cotton on farms big and small in many different parts of the world. Jointly they connected those raw materials to the thousands of manufacturers who purchased cotton for their factories, manufacturers who in turn sent yarn and cloth to the markets and shops that then sold these cotton goods to millions of consumers. Merchants moved the fiber and cloth from a Mississippi planter or Gujarati farmer to an Oldham or Zwickau spinner, from Manchester manufacturers to the bazaar of Istanbul, from the factories of Mulhouse to the dry goods merchants of New York. Merchants advanced capital to allow Barbadian planters to grow cotton. They collected cotton from numerous growers and prepared the bales for shipment. They dispatched ships across the world’s oceans. They offered cotton to manufacturers and transmitted market information from the bazaar to the factory, from the factory to the port, and from the port to the plantation. And they sold the yarn and fabric that came out of the ever more efficient factories to ever more consumers all over the world. While sometimes owners of plantations and factories, merchants were more often independent intermediaries. They specialized not in growing or making, but in moving. At great headwaters such as Liverpool, they constituted the market; they were its visible hand.
The challenges of forging these ties were as vast as the potential profits. Consider just one chain of links. For a planter in Mississippi to provide cotton to a Manchester manufacturer, a local Mississippi merchant, a so-called factor, had to first provide the planter with credit to acquire slaves, land, and implements. This factor probably drew on London or New York bankers for these resources. Once the cotton had ripened, the factor would offer the cotton for sale to exporting merchants in the port of New Orleans, who would sell it to importing merchants in Liverpool, who would also provide insurance on the bales and organize their shipment to Europe. Once in Liverpool, the importing merchant would ask a selling broker, another type of merchant, to dispose of the cotton. As soon as a buying broker found the cotton to his liking, he would forward it to a manufacturer. The manufacturer would work up the cotton, and then provide it to a merchant who would organize its shipping to a representative in a distant port, for example in Calcutta. Once there, the yarn would be sold to Indian merchants, who would distribute it into the countryside, where it would eventually be bought by an Indian weaver, who would sell it yet again to other traders who would deliver it to the retail merchants in villages and towns. Thus slave-grown Mississippi cotton manufactured into yarn in Lancashire might be woven into a shirt somewhere in the Indian countryside. The empire of cotton consisted of tens of thousands of such ties.
Merchants everywhere constituted these webs, built on credit, trade, information, trust, social connections, and the never-ending search for profit. The scope of the new cotton networks was unprecedented. Never before had any industry connected the activities of so many growers, manufacturers, and consumers across such vast distances. And as a result, never before were merchants so desperately needed. The scale of these networks created unprecedented problems of coordination. Neither peasants nor plantation owners, nor even wealthy manufacturers, could keep the channels upon which their livelihoods rested clear. The ability of merchants to organize the radical spatial rearrangement of the world’s most important manufacturing industry was as much of an invention as the more corporal machines and novel labor organization that dotted the globe by the 1850s.7 Their capital, and the institutional structures of trade they forged, imbued large expanses of the globe—from the newly industrializing villages and cities of Europe to the plantations and farms of Mississippi and Gujarat—with the new rhythms of industrial production. By bridging the seemingly unbridgeable gap between the slave plantation and the factory staffed by wage workers, they created modern capitalism.8
These merchants built the trade in cotton and cotton goods into one of the most substantial of the nineteenth century. Between 1800 and 1860, the quantity of raw cotton traded between the United States and Great Britain, by far the most important stream, grew by a factor of 38; the (much smaller) quantity traded between the United States and continental Europe increased during these same years by a factor of 138. Egypt exported 14 times as much cotton in 1860 as it had in 1822. Imports of cotton into France’s most important cotton port, Le Havre, grew by nearly 13 times between 1815 and 1860. And along with the growth of the raw cotton trade, the trade in manufactured cottons also exploded: 350,448 pounds of yarn were exported from Britain in 1794; by 1860 that number had increased by a factor of 563. Other commodity trades boomed during these years as well, but not in the same way; coffee exports from Brazil, to cite just one example, increased seven times between 1820 and 1860. But the major economies of the world depended on the cotton trade: France’s single most important export product was textiles, most made of cotton. Between 1800 and 1860, cotton goods accounted for about 40 to 50 percent of the value of total British exports. Raw cotton was also by far the most important export good of the United States: In 1820, the value of U.S. cotton exports was some $22 million; leaf tobacco was valued at $8 million, and wheat at less than $500,000. Cotton constituted about 31 percent of U.S. merchandise exports by value. By 1860, the value of tobacco exports had doubled, and wheat exports had increased by a factor of eight—but cotton had mushroomed nearly nine times to $192 million. It now constituted nearly 60 percent of the value of all merchandise exports. As merchants built the world’s first truly global economy, cotton took center stage.9
Merchants, some of them dealers or brokers, and other agents, import merchants, or factors, accurately judged that there were ample opportunities for profits in this vast new trade. Distinct groups of merchants reaped profits from each of the transactions necessary to bring cotton from the plantation to the consumer.10 Commissions, interest, and payment for services filled their coffers. Some grew fabulously rich, the Rathbones in Liverpool, the Barings in London, the Rallis in London, Bombay, and elsewhere, the Volkarts in Winterthur, the Siegfrieds in Le Havre, the Wätjens in Bremen, the Forstalls in New Orleans, the Browns in New York, the Cassavettits in Alexandria, and the Jejeebhoys in Bombay prominent among them. Cotton underpinned the vast wealth and power of thes
e families, allowing them to build mansions staffed by large numbers of servants, collect precious artworks, invest in other businesses, and travel the world. But thousands upon thousands of less wealthy cotton merchants, whose names have largely been forgotten, peopled the trade as well. Collectively, they forged new spaces of capital.
For the marriage between slavery and industry to succeed, however, merchants had first to profitably transmit the patterns of machine production and industrial capitalism into the global countryside. The world had no shortage of big dreamers before the nineteenth century, but heretofore no one had been able to realize the potential of the productive hinterlands and vulnerable consumer markets over such great expanses. The process through which these merchants did so was exceedingly complicated—indeed, it rested on a network of actors whose field of vision was often, though not always, quite provincial, and who at times did nothing more than move the logic of industrial capitalism one step closer to rural cotton producers. By merely connecting various places and stages in the process of cotton manufacturing to one another, however, the merchants, often unwittingly, created something quite new. For the first time in history, they drew upon the full diversity of labor regimes, a hallmark of the emerging capitalism—slaves growing cotton, wage workers manufacturing yarn, and slaves as well as wage workers ginning, pressing, loading, and moving cotton bales. In doing so, they helped Europe overcome its resource constraints. Watching these merchants in action, in all their mundane and seemingly inconsequential activities, helps us solve the puzzle of how industrial and war capitalism came to be connected.
Considering their importance in forging the world of modern capitalism, the actual work of merchants seems often almost banal. Most of their time was spent writing letters, talking to suppliers and customers, traveling, and making calculations. Because the empire of cotton they created was so vast, merchants soon specialized in specific aspects of the trade. Some focused on moving cotton from plantations to ports, others on transoceanic trade; some concentrated on selling raw cotton to manufacturers, while others speculated in exporting cotton goods, and others distributed imported cotton goods throughout a particular country or region. Usually merchants focused their trade on a particular region, becoming experts on connecting certain parts of the world to one another. Consequently, they had businesses that could look surprisingly different from each other. The global system, in effect, was built not from a central, imperial directive, but rather by myriad actors with local and diverse connections often solving very local problems.
The most urgent problem merchants helped solve was how to supply manufacturers with raw cotton. As the scale and efficiency of the industry increased, and as cotton did not grow anywhere near the factories, manufacturers needed help securing ever greater supplies from the remote reaches of the world. During the 1760s, 1770s, and 1780s, most purchased this cotton from dealers located in the spinning districts themselves, dealers who traded on their own accounts and provided credit to the manufacturers to enable them to purchase it.11 In 1788, the city of Manchester, for example, counted twenty-two such dealers. The dealers, in turn, bought the cotton from Liverpool merchants who, in the eighteenth and even early nineteenth centuries, were still mostly general merchants for whom cotton was only one of a number of commodities they had on offer.
Yet as the quantity of cotton traded increased dramatically in the first few decades of the nineteenth century, and as manufacturers’ demands on the quality and price of the cotton they received changed, cotton manufacturers left this almost quaint world behind. Instead of purchasing cotton from dealers, they began to use brokers. Brokers, in contrast to the dealers, did not take possession of cotton; they instead charged a commission for brokering trades between importing merchants and manufacturers. As a result, mill owners could purchase not just the cotton that their dealers happened to own, but any of the cotton available in the port of Liverpool—getting the quantities and qualities they desired at the cheapest possible price. Brokers provided a more direct connection between manufacturers and cotton-importing merchants, and also organized the market by setting rules and regulations, distributing information, and providing elaborate arbitration services. They “brought to Liverpool the technical knowledge of the industry,” argues one scholar, and “they also brought a new kind of administrative skill and efficiency to deal with the problems of what was, virtually, a new trade.” As a result, brokers “became central figure[s] in the market.” Expert both in the new technical requirements of spinning and in the bewildering Liverpool market, they helped manufacturers to navigate the varieties of cotton available in Liverpool and acquire the cotton qualities they needed for specific manufacturing processes.12
By 1790 four such specialized cotton brokers had emerged in Liverpool. Many others followed, and by 1860, 322 brokers walked the streets of that city. They generally operated as small family firms and came from a variety of backgrounds: some were former dealers, others had been spinners, and still others had worked as import merchants. Eventually, brokers specialized even further. Some became buying brokers, purchasing cotton for manufacturers, and others selling brokers, selling cotton for importing merchants.13
Thanks to these changes, manufacturers removed themselves from the inspection of cottons in the market. While early in the century manufacturers had personally touched the cottons on sale, they now communicated their needs to brokers who then searched out the cotton they wanted. Ever more specialized in the production of particular qualities of yarns and goods, and demanding ever greater varieties of cotton, manufacturers found going into market to purchase all that cotton impossible. They depended on a constant flow of the crucial raw material into their factories, and brokers guaranteed that supply.
As brokers replaced dealers, they also changed the way cotton was sold. Again, the needs of machine production dictated these changes. Throughout the eighteenth and well into the first half of the nineteenth century, cotton had been traded as a physical commodity. Merchants bought and sold specific sacks of cotton, dealing with a bewildering variety of different cottons from different parts of the world that had varying staple lengths, colors, elasticity, and cleanliness. As merchants sold specific lots in specific sacks, they in effect allowed a purchaser to trace back each particular parcel of cotton to a particular producer. The 1814 records of cotton broker George Holt show him selling “13 Bags (of cotton) waste Guinam,” “6 Bags Barbadoes,” “10 Bags Paras, 15 bags Bahis, 25 bags Dyneraras, 10 bags South Island,” and unspecified amounts of further varieties such as “Bengal,” “Surat,” “Bourbons,” “Demarara,” and “Pernam.” As Liverpool cotton broker Thomas Ellison observed in 1886, “Down to the opening of the present century the usual practice was for the seller to give to the buyer the marks, ship’s name, and place of storage of any lot or lots of cotton which he might have for sale, in order that the buyer might go to the warehouse and examine the bales for himself.” The enormous natural variety of cotton was thus preserved in the trade, and all participants in that trade dealt in cotton that they had seen and touched.14
When the trade in cotton exploded in the first decades of the nineteenth century, this system came under strain. Brokers hurried around the port of Liverpool inspecting hundreds of bags and bales, trying to match specific lots of cotton to the needs of specific manufacturers—manufacturers who needed particular qualities to produce particular kinds of yarn. Soon this became all but impossible. Pushed by manufacturers’ needs, brokers sought new institutional solutions. First, they moved from physically inspecting each sack of cotton to buying by sample.15 A small batch of fiber was drawn from each bale and on the basis of that sample a price was determined and a sale effected. These samples, unlike the bales themselves, could easily be carried around and even mailed. In a second step, brokers developed clear standards and a precise vocabulary for cotton; eventually, manufacturers would acquire cotton without even inspecting samples. They would, in effect, not order a particular bale of cotton from a p
articular place, but a particular quality. This was a radical recasting of the trade.
Cotton shows enormous variability in grade, staple, and character. As of 1790, no attempt at grading cottons had been made, even though grades already existed for other commodities, such as sugar and coffee, for which categories such as “middling” and “good ordinary” were widely used. In 1796, in Charleston, “Georgia cotton” and upland cotton were mentioned for the first time as discrete categories, and in 1799 in Philadelphia, note was made of “Georgia Tennessee cotton”—categories that still reflected place of origin. That year, the Dictionnaire universel de la géographie commerçante still listed diverse cottons only by where they were grown. In 1804, however, Charleston merchants listed “common cotton,” a category that by 1805 had become “common upland.” By 1805, Sea Island cotton was graded into prime, good, fair, middling, and inferior grades. The Tradesman spoke in 1809 of “good middling cotton”; in 1815 in the New Orleans market the designation “prime” was used, two years later “first quality” cotton was listed, and another year later “middling cotton” appeared in Charleston, followed in 1822 by “choice prime cotton” in New Orleans and “choice fair” in 1823. The London Magazine mentioned these categories by 1820, a decade during which they came into widespread use. These categories were still approximations that could neither be precisely defined nor enforced, but they formed the foundation upon which later enforceable standards would be built. Without such standards, such a high-volume long-distance trade of bulk commodities would have been all but impossible—the vast diversity of nature had to be distilled and classified to make it correspond to the imperatives of machine production.16