Seasons of Self-Delusion: Opium, Capitalism and the Financial Markets

Abstract

AbstractTo grasp current trends within capitalism without abandoning the framework of Marx’sCapitalwe need to return to the category of ‘fictitious capital’ and make it central to our explanations. Based on the 2012 Isaac and Tamara Deutscher Memorial Lecture, this essay combines reflections on Marx’s account of ‘fictitious capital’; an investigation of the role of bills of exchange; and an analysis of the recent turmoil in British and US banking. It looks at the way the opium trade, financed through the London bill market, integrated a constellation of interests in the City with the labour of peasant households in India as parts of a unified accumulation process. Opium was vital to the fortunes of British capitalism for most of the nineteenth century. The merchant banks that were the mainstay of Britain’s form of capitalism were also the key element in the re-emergence of global finance in the postwar period. The concluding part of the paper deals with the current banking crisis and follows Hilferding in arguing that by providing liquidity to the markets for fictitious capital, speculation plays a crucial role in sustaining profitability for the bigger capitals.