Giampaolo Conte - A History of Capitalist Transformation_ A Critique of Liberal-Capitalist Reforms-Taylor & Francis (2024)

A History of Capitalist Transformation
A History of Capitalist Transformation: A Critique of Liberal- Capitalist

Reforms highlights how, since the recent financial crises, the expression ‘liberal
reform’ has entered common parlance as an evocative image of austerity and
economic malaise, especially for the working classes and a segment of the mid-
dle class. But what exactly does ‘liberal reform’ refer to? The research analyzes
the historical origins of liberal-capitalist reformism using a critical approach,
starting with the origins of the Industrial Revolution.
The book demonstrates that the chief purpose of such reforms was to inte-
grate semi-peripheral states into the capitalist world-economy by imposing,
both directly and indirectly, the adoption of rules, institutions, attitudes, and
procedures amenable to economic and political interests of capitalist élites and
hegemonic states – Britain first, the United States later – between the nine-
teenth and twenty-first centuries. As such, the reforms became an active tool
used to promote social-economical-financial institutions, norms, and lifestyles
typical of a liberal-capitalist economic order which locates some of its found-
ing values in capital accumulation, profit-seeking, and social transformation.
This book will be of significant interest to readers on capitalism, political
economy, the history of the global economy, and British history.
Giampaolo Conte is Assistant Professor in Economic History at University of

Roma Tre, Italy.
Routledge Frontiers of Political Economy
Political Economy of the Firm

Authority, Governance, and Economic Democracy
Helena Lopes and Christophe Clerc
Digital Capitalism and New Institutionalism

Daniil Frolov
What Is Financialization?
̇
Taner Akan and Halil Ibrahim Gündüz
Unequal Development and Capitalism

Catching Up and Falling Behind in the Global Economy
Alessandro Donadio Miebach, Henrique Morrone and Adalmir Marquetti
Economic Growth and Long Cycles

A Classical Political Economy Approach
Nikolaos Chatzarakis, Persefoni Tsaliki and Lefteris Tsoulfidis
Income Redistribution, Inequality, and Democracy

A Political Economy Approach
Hwan Joo Seo and Sung Jin Kang
Macroeconomics after the General Theory

Fundamental Uncertainty, Animal Spirits and Shifting Equilibrium in a
Competitive Economy
Angel Asensio
A History of Capitalist Transformation

A Critique of Liberal-Capitalist Reforms
Giampaolo Conte
For more information about this series, please visit: www.routledge.com/Routledge-Frontiers-of-

Political-Economy/book-series/SE0345
A History of Capitalist
Transformation
A Critique of Liberal-Capitalist Reforms
Giampaolo Conte
First published 2025
by Routledge
4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa
business
© 2025 Giampaolo Conte
The right of Giampaolo Conte to be identified as author of this work
has been asserted in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic, mechanical, or
other means, now known or hereafter invented, including photocopying
and recording, or in any information storage or retrieval system,
without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and
explanation without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
ISBN: 978-1-032-57963-4 (hbk)
ISBN: 978-1-032-57965-8 (pbk)
ISBN: 978-1-003-44181-6 (ebk)
DOI: 10.4324/9781003441816
Typeset in Times New Roman
by SPi Technologies India Pvt Ltd (Straive)
To Daniela, Giulia, and Elena
Contents
Acknowledgmentsix
Introduction1
1 The identity of reformism: men and laissez-faire 7

1.1 Defining liberal-capitalist economic reformism 7
1.2 Reforms and the problem of sovereignty 16
1.3 Liberal-capitalist reforms in the face of systems-world theory,
unequal exchange, and hegemony 22
1.4 Defining the role of élites in the reformist process 25
1.5 The cycles and timing of liberal-capitalist reform 30
2 The power of ideas and capital 35

2.1 Reformism and the modus operandi of the
capitalist state 35
2.2 When and how was external liberalist reform
born? From mercantilism to free trade imperialism 38
2.3 Differences between liberal-capitalist internal and
external reforms 43
2.4 Fear of falling profit rate and the active role of the
capitalist State 47
2.5 Free trade imperialism, war capitalism, or reformist
capitalism? 51
3 The trinity of capital: debt, credit, money 56

3.1 Debt and credit: the double face of capital 56
3.2 Lex monetae: the relevance of liberal-capitalist reforms
in the monetary system 68
viii Contents
4 Reforms in practice: the case of the Ottoman Empire,

Egypt and China 76
4.1 Material expansion in relation to free trade
agreements 76
4.2 Emerging élites 81
4.3 Foreign debt and the great capitalist transformation 86
4.4 Monetary reforms in practical terms 93
Conclusions99
Bibliography108
Acknowledgments
This book owes a debt of gratitude to many friends and colleagues with whom
I have shared the ideas behind this research over the years. I am particularly
grateful to them, especially for their timely criticisms and for helping me define
some complex theoretical and empirical aspects and nodes by stimulating fur-
ther and careful reflections. Thanks to Gaetano Sabatini, Massimo Fornasari,
Govanni Farese, Massimo Cacciari, Paolo Perulli, Giulio Sapelli, Andrea
Cafarelli, Germano Maifreda, Vera Costantini, Luciano Pezzolo, Antonio
Magliulo, Valerio Torreggiani, Alessandro Albanese Ginammi, Francesco
Dandolo, Teodoro Tagliaferri, Ernesto C. Sferrazza Papa, Camillo Boano,
Emanuele C. Colombo, Giuliano Garavini, Matteo Di Tullio, Riccardo Puglisi,
Guido Baggio, Vittorio Caligiuri, Marco Bertuccio and also to Samir Saul,
Donald Sassoon, David Todd, Costas Lapavitsas, Frank Caestecker, and Edu-
ardo Terra Romero. Thanks also to the research group Conversation on New
Histories of Capitalism at the European University Institute (EUI) and the
History of Capitalism Workshops organized at the University of Chicago for
the excellent insights, analysis, and critique of some of the theses put forth in
the book. Some aspects underlying this research originate in an article I pub-
lished in the scientific journal Capital & Class. Needless to say, any errors are
the sole responsibility of the author.
Introduction
The research herein stems from an analysis of and reflection on the present.
The Great Recession of 2007–2008, which began in the U.S. financial sector,
ended up contaminating the real economy worldwide, and also that of coun-
tries in the southern and peripheral areas of Europe. These countries’ upward
trend in public spending in an effort to bail out the ailing private financial
sector has exposed them to speculation and economic crisis. Those at the high-
est levels of leadership in the European Union, the European Central Bank,
and the International Monetary Fund imposed harsh policies that included
structural adjustment, fiscal austerity, and an overall reduction in public
spending on these countries as a condition for continued access to the capital
market. Moreover, access to further aid packages was made conditional on a
whole series of structural reforms designed to make the various national econ-
omies competitive again and boost their long-term growth. The reform pro-
grams were intended to create the necessary conditions and supply the proper
tools to end the crisis and restore growth through a (neo)liberalist approach. In
practice, however, the results of some of these structural adjustments have
fallen short of expectations, also causing deep social malaise (Tooze 2018).
Expansionary austerity has worked only in theoretical-based research and less
so in practical and empirical testing (Giavazzi and Pagano 1990; Alesina and
Perotti 1997; Alesina, Favero, and Giavazzi 2019). However, the liberal-
capitalist reformist-driven approach has prevailed in those countries that have
suffered the most from the economic and financial crisis. Therefore, the ques-
tion arises as to how to define, at the outset, what liberal-capitalist externally
induced reformism is or is not. The left-wing, politically inspired press has
never failed to point to these reforms as an attempt to force the adoption of a
(neo)liberal system tout court, taking advantage of the shock caused by the
economic, financial, and, later, political and social crises.
(Neo)liberal-capitalist reforms were undoubtedly not intended to be sedi-
tious or revolutionary, that is, aimed at subverting the established order. Their
purpose was to facilitate the adoption of a broader (neo)liberal framework of
rules, norms, and ways of thinking. This would have involved making the labor
market more flexible (very often by eliminating vested rights), improving the
tax collection system (often in a regressive way), making welfare sustainable
DOI: 10.4324/9781003441816-1
2 Introduction
through an increase in the retirement age, and liberalizing the service sector,
even according to some of the positive welfare principles of Anthony Giddens.
Countries with high public debt, for example, are advised to embark on a deep
process of privatization and reorganization aimed at rationalizing the national
economy according to the rules imposed by the (neo)liberal market. Exploiting
a State’s weaknesses when it is worn down by a severe economic crisis is an easy
solution and has often been sparked by the failure to comply with those norms
and rules that are present and tacitly accepted in the capitalist world-economy.
However, what has happened in Europe lately is not a recent historical
event. To understand how (neo)liberal-capitalist reforms became entrenched
over time, we must return to the birth of modern capitalism and the emergence
of a leading liberal hegemonic power such as Britain. Indeed, Karl Polanyi
(2011) reminds us of the presence of a series of combined forces meant to
establish the norms necessary for reorienting society toward the recently estab-
lished economic model through a full-fledged social transformation. A market
economy can only function in a market society, and only the instrument of
reform can effect this transformation. The reforms, then, are aimed at general-
izing capitalist production within society so that social production becomes the
production of capital (Tronti 2006, p. 64).
Thus, our aim is to answer the following questions: When did liberal-
capitalist-style economic reformism emerge? How is it adapted to the evolution
of the capitalist world-economy? What are the historical origins of this pro-
cess? Can reforms be understood as an instrument of specific class interests?
As we will clarify through a historical perspective, the purpose of some
reforms promoted within a globalized world (which sees free trade as the refer-
ence system of economic relations among states) is to attempt to go beyond the
simple budgetary adjustment of countries in crisis. Such reforms have taken on
a propaedeutic role in increasingly linking nation-states to a basket of rules
aimed at allowing greater fluidity of capital and simplifying the transformation
of the social structure to facilitate the principle of accumulation. Such prac-
tices enable foreign capital to discover the same rules of employment, exploita-
tion, and investment present at home, that is, in the hegemonic State that
dominates and controls the international market in a given historical period. It
is, in fact, the harmonization of the various regulatory systems with that of the
British, and later the United States (but also German hegemonic power in the
area of the European Union), within the legislative space of the capitalist
world or regional economy (Benton and Ford 2016, pp. 88–89). At the same
time, domestic capital can discover an outside outlet and more significant fields
of employment in higher-performing sectors in third countries (which gener-
ally occurs when the push for innovation and growth comes to a halt).1
The legal framework for this process is Hans Kelsen’s well-known thesis that
“law is a deliberate construction in the service of known special interests”
(Drezner 2007, p. 2010).2 Liberal-capitalist reforms yesterday and today are an
essential factor in the economic and social evolution of the world-economy.
This research investigates how foreign governments and financiers (especially
Introduction 3
British ones), in association with emerging capitalist élites in semi-peripheral

countries, have directly and indirectly influenced capitalist-inspired reforms in
the material and financial economy since the nineteenth century.
Specifically, our research aims not to analyze the reformist process proper to
evolutions and revolutions in economic theory. Rather, it concerns the trans-
formative process enacted by state or class capitalist forces to integrate and
adapt semi-peripheral economies to those of the hegemonic power (as well as
other European capitalist powers) dominating the market at the time of the
nineteenth-century classical liberal order. Specifically, by ‘reform process’,
which we have called liberal-capitalist external reform, we mean those trans-
formative phenomena promoted by the hegemonic country, with the conniv-
ance of the peripheral countries’ financial élite, which are crucial to the
reproduction of the existing capitalist social order for the benefit of maximiz-
ing the process of capital accumulation. The theoretical model proposed here
aims to define and flesh out a practice hitherto little defined in terms of collec-
tive consciousness. Understanding this phenomenon is thus key to labeling and
identifying a modus operandi functional to conferring an economic advantage
on those who derive the most significant profit from the liberal economic order.
Hence our analysis of an instrument of capitalist transformation whose pur-
pose is to increase the profitability of capital by prioritizing this goal in socie-
ty’s scale of values. The rules of the game – that is, the ability to decide the
prevailing norms in the market – are imposed by the hegemonic economic power.
A hegemony is defined as a nation able to emerge in comparison with the
other ‘great powers’ in terms of economic, political, military, diplomatic, but
also cultural power. This involves the power to impose its own rules of the
game on all others (Wallerstein 1983a). It is essential to use precise terminol-
ogy in that definition, which is heterogeneous and often the victim of interpre-
tive speculation regarding the concept of economic reform. Every revolution in
this field actually imposes a reformist process geared toward changing the
existing order for the benefit of new ideologies. What was previously not polit-
ically acceptable became politically accepted (Brady 1928). In essence, it defines
the instrument through which the existing social order within the hegemonic
power is promoted to semi-peripheral countries. We define liberal-capitalist
reforms as external, that is, applied in states, empires, or territorial entities that
are not British (and later not American) or at least not belonging to the exclu-
sive club of the great capitalist powers. This reformist process concerns, in
principle, especially those countries defined as ‘semi-peripheral’, that is, areas
where the minimum requirements for a market, monetary, and exchange econ-
omy are present; for example, in the Ottoman Empire, Egypt, and China (but
it is also possible to include many other countries, such as Argentina, Adelman
2002). Although we could call them developing countries, they actively boosted
capital accumulation in the capitalist core countries. The exploitation of these
countries, and many others in the semi-periphery, has allowed capitalism and
the core countries to continue to thrive globally (Anievas and Nişancıoğlu
2015). Liberal-capitalist reforms even acted to facilitate this process.
4 Introduction
From this perspective, the compelling question is this: With what elements,
structures, methods, and instruments was England, as a hegemonic country
during the nineteenth century, able (along with other capitalistically advanced
countries) to open the world’s doors to its manufacturing goods, capital or
financial services by making limited use of military force? In this research, we
will identify in liberal- capitalist external reform a non- directly violent,
though no less coercive, process pivotal to adapting the local economy to that
of the hegemonic capitalist country. The latter is, in fact, the one which, in a
given historical period, sanctions the doctrine and rules of the capitalist
world-economy.
While the threat and use of military force are always on the table, liberal-
capitalist reform intends to reduce, as much as possible, the actual and costly
use of military force. Still, it does not fail to leverage military threat as a poten-
tial tool of external pressure. Reform is pivotal to minimizing, as much as pos-
sible, direct military intervention in support of specific economic interests.
Classical liberal doctrine fits poorly side-by-side with colonies protected by
armies and resorts to it only when a higher geopolitical interest is at stake.
However, military intervention or the threat of resorting to armed force is
always a viable option. This occurs not primarily when demands for specific
reforms remain unheeded but rather when there is a risk of interference by a
rival power. Using force to create a liberal world-economy often remains more
of an ultima ratio than a proper practice (Davis 2002, p. 301).3
However, the economic model that liberal-capitalist reforms inspired must
still be defined. It is a matter of spreading abroad the economic system of the
social class that assumed power in England in the nineteenth century and in
the United States in the twentieth century (and cascaded to all other advanced
capitalist countries). We refer to the upper middle class with a liberal-inspired
background, which advocates a model of capitalist economy inspired by free
trade and free exchange, monetary stability, and budgetary order, that is, a
modus operandi of the economy that promotes material interests.
To analyze the evolution of this social class within its own country of refer-
ence, we resort to the Gramscian category of ‘hegemony’. Once the bourgeois
class assumes power, it shapes the society below and those orbiting within the
cannonrange of its military positions. The transformation that occurred is
based on a system of rules that allows for the reproduction of the capitalist
class structure and preserves its dominant position within society and the mar-
ket in the years to come. It is not only a matter of promoting the adoption of
a capitalist production system – that is, capital accumulation, recognition of
private property, etc. – but of making such instruments a means for the hegem-
onic class to gain the most significant advantage before all other social forces.
It means, in essence, creating a structure of supranational interconnections
capable of favouring the interests of a particular class.
The rules of interstate sovereignty regulated by the Treaty of Westphalia
weakened in favor of the interpersonal relationships typical of the flow of cap-
ital and goods. The laws of the market gradually supplant those of sovereignty.
Introduction 5
First, this transformation process is initiated by signing free trade agreements.

Laissez-faire, indeed, paved the way for a series of progressive changes in the
manufacturing-related sector and later in the financial industry. This involves
the creation of institutions, rules, and regulations (specifically related to free
trade, public debt, and currency) crucial to maximizing capital returns in a
given historical period. The capitalist class thus controls the State through
which it exports a ‘peaceful’ reformist proposal, a model, a social contract,
often using the rhetoric of modernization, pivotal to the reproduction of a
liberal-capitalist-inspired economic system. Liberalism thus represents the ide-
ological framework to which much of the aforementioned transformations
refer. Although liberalism is the bearer of the principle of self-determination,
factually it must come to terms with the very nature of the nation-state and its
vocation for territorial expansion. The often-coercive actions pursued by Eng-
land evince the existence of a double standard, namely, the promotion of lib-
eral doctrine beyond the force of conviction to the limit of coercion.
Semi-peripheral countries are defined as unfamiliar and therefore subject to
being guided – taken by the hand, so to speak – toward the necessary civilian,
ideological, and even material modernization (Mehta 1999, p. 191). In the
incongruity between ideology and its practical action, we must find the origins
of external-inspired liberal-capitalist reform.
Liberal-capitalist reforms move on a vertical and horizontal track: vertically
through a top-down approach, that is, when the new capitalist élite, inspired by
that universalistic-rational ideology, assume power as the new hegemonic class
and help transform and bend the underlying society to their capital accumula-
tion needs (Wallerstein 1985, p. 67), and, on the other hand, horizontally, when
the élite of the hegemonic State ally themselves with the emerging class in the
countries of the semi-periphery to increase their bargaining power and profit
share (although the élite in core countries often maintain structural supremacy
over others worldwide). At the same time, such action helps increase the eco-
nomic clout of the élite in the semi-periphery by increasing their political influ-
ence. Strengthening political clout means these élite have direct access to
State power.
What emerges is an interdependence between sovereign authority and the
élite. The upper middle class can continue to exert hegemonic influence over
time by controlling the political structure. As Karl Marx first and later Branko
Milanovic (2019, p. 56) noted, the latter allows the bourgeoisie to remain at the
top. However, a power struggle can break out even among bourgeois forces
(Losurdo 2016, p. 66). The internal clash remains confined to the internal con-
flict of the ‘capital-holding’ forces that, however, do not challenge their hegem-
onic role in society. Indeed, as we shall see, we are witnessing the transformation
of liberal-capitalist externally influenced reform according to capitalist élites’
new and well-defined interests.4 As Fernand Braudel and Giovanni Arrighi
argue, material expansion, which incentivizes a process of capital accumula-
tion, is generally followed by a phase of profit-seeking financial development,
which in turn transforms and globalizes the interests of capital holders even
6 Introduction
further. In this stage, we witness reformism focused more on finance than on

the industry and the material economy. To be effectively introduced, reform
requires not only the political and military power of the State but also its
respectability and credibility. It is crucial to prevent such transformations from
being considered revolutionary or illegal and, therefore, unacceptable to the
established international political order (Caracciolo 1960, p. 21).
Based on the aforementioned theoretical approach, this research aims to
bring to the forefront of the current debate externally induced liberal-capitalist
reform as an active element of economic transformation and top-down class
struggle. The book’s time frame spans the late eighteenth century to the early
twentieth century and then briefly straddles the U.S. hegemonic period. One
must refer to the general framework of the expansion and contraction phases
of the business cycle in order to obtain a holistic view of this transformative
process.
Notes
1 On the relationship between (neo)liberalist reforms and the democratic political
system in the second half of the twentieth century, see Larry Diamond and Marc
F. Plattner (1995).
2 See the critique by Friedrich von Hayek (2017).
3 We must first distinguish between the actual use of force or a mere threat. Accord-
ing to Brian Bond (1967), Britain has used battleships on at least 75 occasions for
deterrence, not in actual use of force.
4 The relationship between the bourgeoisie and capitalism is controversial. However,
we identify the upper bourgeoisie as the capitalist class. Generally, the upper bour-
geoisie has transnational interests and directly controls capital, while in contrast,
the middle and petty bourgeoisie has more circumscribed interests in the national
economy. The national bourgeoisie, indeed, manages capital but does not properly
control it. We often denote the bourgeoisie by capitalism (assonance that comes
from the writings of Weber), but that is not the case. The élite who can move and
control capital in globalization controls the market and has more influence on the
national State. The national bourgeoisie is more a gatekeeper of capital and private
property at the local level.
1 The identity of reformism
Men and laissez-faire
1.1 Defining liberal-capitalist economic reformism

From a historical perspective, the study of the business cycle has aroused far
more interest in motivating the emergence or decline of hegemonic power.
Such a State is thus one that, wielding economic, political, and military
strength, controls and directs the rules of the market, as opposed to its com-
petitors or subsidiaries.
Fernand Braudel, Immanuel Wallerstein, and Giovanni Arrighi have grap-
pled with this approach within the dynamics of world systems following the
directives proper to the longue durée of modern and early modern economic
and social history. However, less attention has been paid to the instruments
involved in such transformations, namely how a rising capitalist power can
exploit its leading market position to establish itself as a hegemonic country.
The hegemonic power can take advantage of a dynamic private economic sys-
tem that is independently able to gain market dominance. However, that
hegemonic power uses the force at its disposal to benefit its private economic
strength by imposing its market dominance by establishing universal rules.
Through what means does the hegemonic power impose and attempt to
maintain its dominance within the capitalist world-economy? Among other
factors, external-inspired financial reforms can be identified as an active ele-
ment that ensures that satellite countries adapt to the center of the world-
economy controlled by the hegemonic power. The latter imposed the rules of
the world-economy, allowing it to preserve its economic leadership worldwide
in the years to come.
This process thus concerns the direct and indirect imposition of a set of
rules that follow and are inspired by the dictates of liberalist doctrine. As we
shall see, it is about sparingly and politely imposing the adoption of a system
that looks favorably on the implementation of free trade as a means of maxi-
mizing defined interests: horizontally, the profits of the financial élites that
have a market dominance and, vertically, the holistic economic-led ambitions
proper of the hegemonic State. Thus the subject of our investigation also
includes how the demand for adopting specific reforms and rules based on
DOI: 10.4324/9781003441816-2
absolute and comparative advantages becomes an organic tool for economic

and political domination by the hegemonic power.
The concept of ‘reform’ is challenging to define and often liable to such
vague and intangible interpretations that it may be difficult to circumscribe it
correctly. The main feature, then, becomes transformation and adaptation to
the rules imposed by the hegemonic power within the market in a more passive
than active manner. It occurs through institutional reforms to create a market-
friendly environment and promote and incentivize internal transformations,
mainly in trade, public finance, and currency. According to Karl Polanyi,
laissez-faire cannot be identified with economic liberalism. He states that until
such a free trade system is established, liberals will require State intervention
for its realization and, once achieved, for its preservation. Concretely, Polanyi
notes how the process of economic liberalization is not the result of spontane-
ous market-led evolution but is politically constructed by Britain under the
umbrella of Pax Britannica (Imlah 1958; Polanyi 2011, 2019 p. 191).
As Immanuel Wallerstein (1983a) reminds us, the hegemonic power becomes
the harbinger of liberal doctrine and champion in defending the principles of
the free flow of factors of production such as commodities, capital, and labor
within the world-economy. Ideologically, liberalism, which is against mercan-
tilist and colonial restrictions, advocates free parliamentary institutions that
promote civil liberties and a high standard of living. These freedoms, however,
are reserved especially for a social class within a specific geographical area
understood primarily as Western Europe. Those outside must accept a liberal-
ism ‘mutilated’ by the principle of self-determination. As is well known, it is
primarily liberal England that codified liberal-capitalist market rules for much
of the nineteenth century, in association with and with the active support of
other capitalist powers. The major capitalist powers of the century, such as
England, France, and later Germany, are interested in ensuring that the exist-
ing social order remains anchored in a capitalist economic model.1 The exclu-
sive club of the Great Powers may also act under this lens: a political form of
international capitalist coexistence functional to promoting and preserving a
particular economic model (von Hayek 2012, pp. 35–36).
Market opening is essential in the expansionary phase of British industrial
capitalism first and financial capitalism later. More specifically, London is
positioned as industrially and economically hegemonic because of the unique
and unrepeatable process of industrialization in which England has been
involved since the eighteenth century. It is enough to recall the initial position
of near-monopoly in the industry and commerce that enabled it to accumulate
capital at a very high rate of profit. Next, it progressively placed itself in a
position of global rents increasingly within the preferential zone guaranteed by
the Commonwealth. British well- being drives liberal-
inspired thinking to
become synonymous with political, military, and economic progress and suc-
cess. As a result, reformism inspired by liberal ideas is seen as a means of
achieving modernization. Therefore, the élites in the semi-peripheral countries
who wish to initiate their domestic-led development program never fail to
The identity of reformism 9
promote some of the principles inherent in the successful liberal political and
economic formula.
However, by opening the doors to even some limited and circumscribed
changes, codes, and institutions, one is bound to a system that requires and
imposes further transformations to enable its proper functioning (Hodgson
2015). From an economic perspective, the initiation of such a reformist process
is intended to produce the ‘creative destruction’ – an expression coined by
Joseph A. Schumpeter (1977) – of existing models in favor of the liberal-
capitalist one (Bucci et al. 2022). The idea of reform thus comes from an exter-
nal input but finds fertile ground to flourish in the local social habitat. However,
the success of this action depends on the political influence exerted by the local
financial and economic élites. Indeed, implementing such reforms varies
according to the cultural, social, and often even religious background but con-
verges toward the leading aim of facilitating capital accumulation and increas-
ing the rate of profits. The integration of Asian, African, and Latin American
economies within the capitalist world-economy would certainly not have been
possible without the complacency of the various local élites connected to the
world-economy. Cooperation between European and non-European business
people was precisely facilitated by sharing the same values of wealth accumu-
lation that overcome divergent social and cultural traditions. On this basis, a
strong connection among worldwide bourgeoisie is established, facilitating
global economic transformations to adapt nation-states, empires, and territo-
rial units to the capitalist production system by allowing a more significant
share of capital extraction from productive activities (Dejung et al. 2020, p. 19).
According to Benedetto Croce (1921, p. 27), Achille Loria was a keen
observer of that external-induced reformist action pivotal to conferring advan-
tages on those in a predominant position in the exchange game.
The exploiters need a series of connective institutions, as he [Achille

Loria] baptizes them, to secure the submission of those they exploit.
These connective institutions would be the State, law, religion, not to
mention science and art: all things the essence of which would ultimately
become clear, as we have said, merely economic.
The role of institutions emerges as a new element considered crucial to

explaining the proper working of liberal reforms.
Douglass C. North (1991) defines institutions as artificial ‘neutral’ con-
straints that structure political, social, and economic interaction. That is, their
function is to reduce uncertainty and create order in human relationships.
These institutions are, for instance, public and private banks, the forum for
arbitrations, or so-called governmental institutions such as the Courthouse,
the Treasury, etc. They make it possible to institutionalize certain behaviors of
conduct that perpetuate an economic model predefined by a set of rules the
sovereign authority establishes. Narrowing the field and following up on the
panorama traced thus far, it remains more straightforward for us to point out
how almost all the economic models hatched over the centuries see reform as
such (and the word’s very etymology confirms it): an active tool crucial to
adopting and operationalizing a new economic and social model.
Firstly, the Physiocrats pinpointed reform as an instrument capable of pre-
serving the vestiges of that ancient society characterized by the domination of
the landed class in France (Galbraith 1988, p. 63). Another famous case is that
of Rosa Luxemburg’s work Social Reform or Revolution? (Bellofiore 2009; Lux-
emburg 2009). In this work, the desired transformation is framed as the need
for a structural reform of the existing capitalist system to bring down the bour-
geois power and economic model and its social superstructures in order to
institute a full-fledged socialist society (Favilli 2009). Luxemburg’s proposal
falls under what John Stuart Mill defined as revolutionary socialists or com-
munists, as opposed to reformist socialists. According to Werner Sombart
(1977, p. 150), for revolutionary Marxists, the struggle for internally driven
reforms is a means of preparing for the struggle of socialism. Such reformism
is limited to improving the existing society. Left-wing reformism is contrasted
with right-wing reformism. This category includes, for example, Otto von Bis-
marck (1815–1898) in Germany and Giovanni Giolitti (1842–1928) in Italy.
The reforms they proposed were aimed at conservation, that is, at appeasing
workers’ claims (such as establishing the first disability pensions at work) to
maintain the status quo (Sylos Labini and Roncaglia 2002, p. 107).
Such examples demonstrate how even non-liberal economic and social
theories commonly use the tool of reform to subvert the existing order for
the benefit of applying a distinct political, social, cultural, and economic
design model. Paolo Sylos Labini and Alessandro Roncaglia (2002, p. 19)
provide two views on liberalism. The first concerns the so-called ‘left’ liber-
alism, where the moral issue cannot be considered private. The associated
political position is thus called liberal-progressive. In this category, the two
authors also include Adam Smith, according to whom the moral question is
essential for the very survival of the market economy. However, there is also
a so-called ‘right-wing’ reformism, which sees the opposition between State
authority and the individual as its constitutive character. The individual will
thus benefit from the broad discretion guaranteed by the non-interference of
the State in the economy. Such liberalism also favors social preservation to
keep the material interests of the capitalist class intact and inviolable. The
principles of this liberalism demolish the morality of communal solidarity
by reducing it to a mere rational calculation that is synthesized into a cold
benefit of economic interests, especially when reinforced by utilitarianism
(Wallerstein 2011, p. 15).2
According to Wallerstein (1999, p. 29), at the national level, liberalist
reforms were intended to prevent, weaken, and lessen the demands of the nine-
teenth century’s proletarian ‘dangerous classes’. The aim was to keep the prof-
itability of invested capital as high as possible at the expense of the wages and
rights of the working classes. England’s three most ambitious reform plans,
known as the Reform Acts of 1832, 1867, and 1884, can be seen as a step
toward liberal democracy (Freeden 2015, p. 26; Acemoglu and Robinson 2019,
p. 190). These reforms considerably expanded the electorate from 4.7 percent
in 1832 to 10 percent in 1867. In addition, they greatly expanded the right to
vote to near-universal suffrage (the secret ballot would be introduced only in
1872; Salvemini 2020, p. 17).
As we shall see more fully later, the British reformist process in favor of an
economically liberal-inspired society is not only centered on expanding voting
rights but is defined through a fiscal policy that responds to the needs of pri-
vate initiative and thus capital accumulation, profit, and savings. Such changes
occurred following Cromwell’s war and the great revolution of 1688, which
paved the way for the financial revolution that followed accordingly (Hill 1987).
Tax system reforms are one of the foundational elements of the transforma-
tion of an ancien régime society to a capitalistically advanced one. However,
Alessandro Roncaglia (2009, p. 62) reminds us that even before 1688, William
Petty (1623–1687) understood that tax system reform was the first step toward
unifying the rules of the economic system based on private initiative within a
given country.3
However, there is friction between what is proclaimed by ideology and what
actually occurs. Liberalists succeed in giving their economically oriented
actions new moral content based on the defense of their interests. This occurs
by appealing to their primal instincts of conservation and prevarication. The
creation of a new social order as a result of the industrial-capitalist revolution
has institutionalized inequality and legalized the domination of the wealthy,
that is, the one who owns the large property (Proudhon 1978) and who can
leverage the rhetoric of the irrevocable right of usurpation (Galli and Rous-
seau, 2011, p. 6).
As far as Domenico Losurdo (2005, p. 305) is concerned, the liberal tradi-
tion is the tradition of thought that has most rigorously circumscribed a par-
ticular sacred space within which the rules of the limitation of power are
imposed. Essentially, that tradition of thought is characterized more by the
celebration of freedom of the individual than by the celebration of that com-
munity of free individuals who define the sacred space. Such free individuals
are none other than those who belong to and fall within that sphere of exclu-
sive social relations that ground their bond within that restricted place where
capitalist forces influence the market economy.
The free-exchange system took shape in England between the end of the
eighteenth century and the beginning of the nineteenth. Adam Smith and
David Ricardo were the first to formulate the working framework of such a
system on paper (Roll 1942, p. 150). First and foremost, they witnessed the
structural transformations of capitalist England. These early classical econo-
mists succeeded in giving voice to ongoing changes by pointing out the neces-
sary path to be taken to keep this system working.
However, the institutionalization of the win-win free trade model requires
active political support to be accepted as a reference system by domestic and
international social forces.4 Immanuel Wallerstein (1999, p. 29) notes how
liberalism presents itself as a centrist, constitutionally moderate doctrine. Lib-

erals, therefore, stood on the side of the inevitability of economic progress
based on such ideals. To achieve this goal in its best expression is crucial to
introduce a series of reason-inspired reforms coordinated by specialists capa-
ble of implementing them using the State’s authority.
Here, however, we must stay on track. First, it is necessary to clarify the
connection between economic liberalism and capitalism. The assonance
between liberalism and capitalism is often taken for granted, although much of
it lies in two distinct hemispheres. The problem is not liberalism, whose ideo-
logical harmony is ideally confined to the theoretical world, but the practical
need for capital accumulation. Capitalism exploits liberalist ideology, often
mystifying its meaning because it best suits capitalist needs. According to Ital-
ian intellectual Ugo Spirito (1933, p. 131), capitalism and liberalism histori-
cally and ideally have the exact same origin and value. However, the same ideal
of freedom has gradually come to be defined as the ideal of personal liberty,
that is, of the individual in his specific, particular field of action outside that
social organism in which he is defined, and thus outside the State, which
becomes the mere overseer of the boundaries of an individual property. Liber-
alism is not necessarily indistinguishably linked to capitalism. It is a container
of ideas that elaborates a value system at the theoretical level that has often
been wedded to the practical institution of capitalism. Thus, if the cardinal
ideas of liberalism are the perfect partner for capitalism, liberalism does not,
however, share its violent vocation. That is, capitalism is a productive system
that can function even in scenarios of military occupation, while political and
economic liberalism, in theory, should guarantee fundamental freedoms for all
citizens. Liberal-capitalist reformism thus presents itself as an ideological bas-
ket within which can be found, among other things, those instruments sea-
soned to further the definition, creation, or refinement of the capitalist
economic structure.
Returning to the definition of liberal-capitalist reforms, the term reform can
be used to identify any ongoing transformation project. However, there is a
substantial difference between liberal reformist goals pursued within advanced
capitalist economies and what is promoted abroad, that is, in countries outside
the circle of security and balance of the Great Powers and with backward and
often non-capitalist economies.
While at the political-national level, the liberalist doctrine bases its strength
on expanding rights (such as voting rights), at the economic level it legitimizes
economic inequality. As Fred Hirsch (1981, p. 168) points out, liberalism con-
fers political rights to a middle class that has already achieved a certain degree
of economic power. For the bourgeoisie, it is the political recognition of eco-
nomic reality. However, this postulate goes against the most disadvantaged
social groups. Indeed, the latter progressively acquire political rights but retain
evident inequality in economic terms. According to liberal-capitalist ideology,
these fundamental inequalities mean ‘rights for all’.5
More specifically, liberalism, unlike Adam Smith’s theorizing, lacks that

definite possibility of reconciling individual welfare with collective welfare.
Indeed, such a doctrine is indebted to the influence of utilitarians such as Jer-
emy Bentham (1748–1832). They influenced liberalism mainly in order to pur-
sue a plan of rational-based reforms with the ultimate goal of increasing
human happiness and well-being by minimizing the active role of the State,
especially in the economic realm (Roncaglia 2009, p. 29). However, the State is
seen as an essential tool for achieving the ‘greatest good’ for the most signifi-
cant number of individuals. Therefore, to achieve this goal, the State must act
through the instrument of reform (Wallerstein 2011, p. 9).
Thus, at the domestic level, reforms aim to increase the acceptance of liberal
principles by extending political freedoms. In return, tacit and implicit approval
of the liberal-capitalist production system is required.
From a chronological point of view, domestic reform anticipates external
reform. Indeed, it is precisely at the domestic level that the hegemonic power
experiments with those transformations are being applied worldwide. Sven
Beckert (2014, pp. 39–40) highlights an initial distinction between internal and
external reformism. Although the German historian does not mention the
word ‘reform’ per se, he highlights the willingness of Western European rich
and powerful countries to divide the world into an ‘inside’ and an ‘outside’.6
The first case examines the laws and institutions enforced in the homeland
where the order imposed by the State itself prevails. The second case, on the
other hand, refers to places where imperialism predominates and where private
capitalists’ appropriation of territory and resources without direct interference
from distant European states is enforced and permitted. Imperialism then
becomes the political channel through which the countries of the semi-
periphery are forced into the capitalist world-economy. In fact, according to
Bill Warren (1980), developing (or semi-peripheral) nations are transformed
from the outside into capitalist societies so that they are naturally drawn into
the globalized economy (or world-economy). However, Warren shows us how
such transformations result from the major capitalist powers’ direct political
and/or military action. More recently, however, Onur Ulas Ince (2018, p. 23)
highlights the contradiction between the conception of the capitalist free mar-
ket in the British metropolitan territory and the violent and coercive methods
that enabled the rise of capitalism in the colonies, that is, in environments sub-
ject to direct political control by capitalist countries.
Liberal-capitalist reform does indeed match the kindness and calmness of
moderate liberal ideas. However, it is much more intrusive in wanting to mod-
ify, adapt, and homogenize the local economy to that of the international mar-
ket. Behind the latter, the hegemonic State and the financial élites controlled
the great game of capital accumulation within the anti-market. Fernand Brau-
del (2011, pp. 56–61) states that the heart of capitalism’s activity lies not in the
sphere of material life and the market economy but in the anti-market, where
the upper echelons of interchange are located. Thus, the anti-market is nothing
more than an oligopolistic representation of capitalism.7
Promoting liberalism as the winning doctrine of modernization leads a

non-negligible number of countries in the semi-periphery (i.e., those coun-
tries that were at first excluded from the formation of the new economic
theory) to accept the liberalist model as the dominant ideology of the inter-
national market. According to Harold Laski (1936, p. 194), “any reform that
leads to the acceptance of laissez-faire seems to be a liberation of productive
power”. Such economic and political transformations bind the peripheral
State into an ever-increasing dependence relationship with the center. In this
unequal relationship, the hegemonic State and capitalist élite (of the center
but also the periphery) derive the most significant benefit in terms of capital
accumulation.
In practice, however, the theoretically harmonious liberalism proposed by
England becomes an instrument of power and control through the promotion of
norms and laws that impose liberal capitalism through the initial mechanism of
free trade. Externally induced liberal-capitalist reform is framed as a transform-
ative process that carries elements typical of the European ‘civilizing mission’ to
the ‘periphery’. Outward-looking liberalism did not carry the same values and
features as inward-looking liberalism. We are referring to racism, moralism, and
a sense of prevarication. Such issues permeate the international law governing
the British international liberal order. No wonder that external liberal-capitalist
reformism diverges from that promoted within European countries. Two promi-
nent British intellectuals, Travers Twiss (1809–1897) and John Westlake
(1828–1913), actively contributed to shaping international law under British aus-
pices. They do not fail to note how the developing law is vitiated by a sense of a
‘civilizing mission’ at the turn of peripheral countries. The nascent international
legislative order is based on a clear distinction between ‘civilized insiders’ and
‘uncivilized outsiders’ (Sylvest 2008). To act in terms of the latter, international
law takes its moral directives from British intellectuals and politicians. Accord-
ing to Casper Sylvest (2005), “the writings of Mill and Gladstone demonstrate
how a highly moralistic concept of righteousness, extended to international pol-
itics, becomes the most important impetus for reform”.
Generally, in the game of trade, those who could make the most of this sit-
uation promote reform. Reforms are introduced, encouraged, and imple-
mented in various non-violent forms by the hegemonic power in association
and competition with other capitalist nations. The reformist process began
with the signing of free trade agreements that paved the way for a whole series
of transformations and institutional and legislative-driven reforms that were
liberalist-inspired in character and focused mainly on public finance and trade
rules (Cunningham 1904). When countries begin to trade with one another,
many of the pre-existing domestic institutions and regulations are eroded by
the new course of trade (Rodrik 1998).
However, capital mobility must be identified as a fundamental driver of this
transformative-led process. Free trade, the end of state monopolies, the adop-
tion of a stable monetary system, and the opening to international markets are
expressions of capital’s need to move as freely as possible among states. Borders
become porous for capital, granting it large-scale global mobility. Thus, liberal-
capitalist reforms aim to make the reformed country attractive for capital profit-
seeking and strengthen the bourgeoisie’s ambition for political power. However,
in an ancient régime society, capitalist reforms acted as a progressive force aimed
at changing the political order in favor of the capital-holder parties.
When detailed, the reforms’ characteristics are numerous and multifaceted.
They enable those who dominate the market to avoid a dangerous standstill in
profit returns and to maintain control in a hegemonic position over the forces
moving within the world-economy. Such reforms, however, are often not pro-
moted according to the State’s organic and well-delineated strategy but rather
by those capitalist social forces that respond to the need to keep the accumula-
tion phase ever-profitable and fluid.
Charles Tilly (1990, p. 182) has also addressed the topic, defining the frame-
work within which this induced transformation process operates. Tilly refers to
the actions of the United States in the twentieth century, but his definition is
also perfectly adaptable to the case of Britain in the previous century. He states
that when international institutions such as the World Bank lent money to
troubled non-European states, they regularly required these states to undertake
‘reforms’ that would bring them in line with European and American practices.
According to our interpretation, Tilly here indirectly exposes the three ele-
ments that characterize liberalist and, later, neo-liberal reform:
1 The presence of a hegemonic power and its affiliates that directly or indi-
rectly support the new order.
2 The non-violent process that relies on interchange that leverages direct need
(induced or not) on the part of the third country.
3 The simplification for access to the new market, and thus to the new welfare,
as a quid pro quo for introducing certain reforms.
However, the past had already witnessed the tendency of the forces sustaining
the capitalist system of production to shape and bend ‘non-capitalist’ econo-
mies to the needs of capital accumulation. This action is expressed in various
forms, including so-called ‘war capitalism’. Suddenly, this system allowed
Europeans to establish their increasing dominance over the networks of inter-
change of goods and financial services worldwide. The domination of these
networks was critical to fueling the profit-seeking strategy of the core econo-
mies. As the market’s sphere and powers widen (with its self-regulation rules
through the introduction of contracts, regulations, and laws), the sphere of
policy intervention dwindles (Beckert 2014, p. 51). The more the market
expands, the more political sovereignty shrinks. The State institutionalizes the
fundamental laws and rules so that the market, and the forces that move and
interact within it, can regulate themselves. It should be remembered that the
State remains essential and indispensable even in the new liberal-capitalist order.
According to Sven Beckert (2014, p. 171), in territories that are part of
the so-called ‘outside’, rulers, bureaucrats, and capitalists can legally,
bureaucratically, infrastructurally, and militarily penetrate these territories

to create conditions conducive to long-term capital investment, mobiliza-
tion of labor, expansion of domestic and foreign markets, and protection of
domestic industries from the uncertainties of the global economy. Accord-
ing to Fernand Braudel (1982, p. 586), the industrial revolution in Britain,
as a worldwide phenomenon, cannot be a mere internal-driven process but
must also be based as an indispensable condition on foreign market domina-
tion. The harmonious development of the different economic and social
forces helped spur capitalist growth as harmoniously as possible. The suc-
cessful British model prompted emerging capitalist élites in the semi-
peripheral countries to try to reproduce and emulate that British model
considered successful for their class interests and economic ambitions (Hob-
son 1902; Lenin 1948; McDonough 1995).
The aforementioned transformations can only work properly when the
bond between the capital forces and the territorial State is strengthened. We
can define reformist-led action only when there is a clear programmatic strat-
egy aimed at granting advantage on a broad scale to the entire nationwide
productive sector, especially to those national economic forces interested in
maximizing profits. Hence, these capitalist élites find in reform a means of
allowing the renewal of the propositional and propulsive factors essential to
forming or maintaining that economic environment crucial to increasing the
profitability of investment and capital accumulation as much as possible. They
support reform as a necessary tool for their material and financial interests.
1.2 Reforms and the problem of sovereignty

The relationship between sovereignty and external-influenced liberal-capitalist
reforms is certainly disharmonious. The former precludes the full- fledged
implementation of the latter and vice versa. Introducing reforms in monetary
policy (such as adhering to the gold standard) and public finance (such as
agreeing to borrow foreign-denominated currency in the international mar-
kets) entails weakening national sovereignty in favor of an intangible system of
rules peculiar to the global market.
Thus, the gradual integration within the expanding capitalist world-
economy of peripheral countries causes profound changes both internally
(such as the emergence of new economic institutions such as the Ministry of
Finance or the Court of Accounts, etc.) and externally (i.e., the placement of
such countries within a political system that follows the rules of conduct and
engagement proper to the Great Powers). Economic and political integration
are strictly linked. As early as the last decades of the eighteenth century, we see
a gradual expansion of international markets. The Seven Years’ War
(1756–1763) and the subsequent American War of Independence (1775–1783)
open up trade and interstate political competition at an increasingly global
level. A new worldwide economic order emerged that increasingly placed the
various national economies in an interstate relationship of interdependence.
Free trade and free commerce ideology begin to influence European economic
policy and, indeed, that of England. Free trade replaced mercantilism as a
leading economic ideology (Hobsbawm 1990, p. 31). On the whole, adherence
to free trade also means a gradual cession of sovereignty for those backward
semi-peripheral states with no say in the rules to be imposed on the market
management. In terms of capitalist development, such backwardness concern-
ing modern commercial and industrial development is perpetrated over time
due to the signing of free trade agreements that confine the peripheral country
to a position of underdevelopment.8
Such agreements reduce the ability of these states to upward or downward
customs taxes at will in order to meet spending needs in the immediate term,
such as a war or famine. Ancien régime states, deprived of a modern tax system,
have few tools to meet increased expenditures other than raising customs taxes.
We refer to the possibilities of raising internal taxes (with the risk of causing
riots), following up on confiscation policies, or plundering other states’
resources through military conquest.
What emerged from the Peace of Westphalia of 1648 is the creation of an
embryonic international law that enshrines the legitimacy and mutual recogni-
tion of a given State’s power domestically and globally. This means the State
can claim the necessary authority for itself, such as the exclusive use of force
within its borders and in interstate relations. It gives rise to a relationship based
on exchange crucial to mutual recognition (Wallerstein 2011, p. 75). This form
of relationship gives the ruler of a given State a new form of recognition
secured to increase the legitimacy of its internal power (Garner 1925).
Each state is granted by others the right to act unchallenged within its
national sovereignty spaces. This system ensures that each state accepts for
others the same principle of non-interference that it claims and demands.
Thus, at the European level, the territorial entities that are signatories to the
Westphalian treaties have accepted the principle of international law based on
the balance of power and the recognition of the right of non-interference
(Silver and Slater 2010, p. 45). Such agreements certainly do not eliminate the
possibility of initiating an interstate war. Still, they do provide political élites
with a new tool for action concerning the mutual recognition of common-
based rules.
In this system of continent-wide checks and balances, each State must have
a valid reason to attack another based on the implicit rules to which they both
theoretically subscribe. These rules of conduct are key to reducing the harmful
effects of conflict among sovereigns (Wallerstein 1999, p. 22). This principle
indirectly increases the respective subjects’ confidence to act safely from unilat-
eral actions. It is a firm guarantee for increasing trust in social interactions,
including economic ones.
Within this basket of rules and legal framework that guarantees interstate
balance, no State can directly extend its power and control over other countries
participating in the system mentioned above. However, compared to the inter-
national scenario, in Europe these principles are fully applied. Silver and
Slater (2010, pp. 107–108) recall how England does not hesitate to manipulate
the balance among states through its privileged access to resources from out-
side Europe at the international level. London dominates a range of states that
are part of the periphery and semi-periphery of the world-economy, albeit
informally.
The fact that non-European countries are excluded from mutual recogni-
tion agreements that are based on the principle of reciprocal identification
gives the European powers moral, political, and economic carte blanche. Those
who dominate and most influence the existing system of international rules
that give substance to the value of national sovereignty can dominate that
macro-structure of interstate collaboration and understanding (Conte 2019).
Non-European states, as semi-states, cannot develop a modern political
structure that could make them aspire to enter the system of rules enshrined by
Europeans. Therefore, they are not considered de facto ‘on par’ with said pow-
ers. Indeed, the right of a State to intervene abroad is limited by the rights of
others to recognize it. However, if the one suffering aggression is not part of
such a system of security and balance, intervening becomes easier. To simplify,
the designation of semi-peripheral states as semi-states excludes them from the
system of mutual sovereignty by depenalizing economic and political conquest
or meddling by European powers.
Therefore, the absolute values of sovereignty weakened (especially for the
weaker countries), even among the core countries of Europe, during the trade
and industrial expansion cycle. Signing free trade agreements, joining an inter-
national monetary system, or agreeing to incur foreign-denominated debt to
foreign creditors, weakens the absolute value of respecting a given national
sovereignty. It is, therefore, a paradox. Full national sovereignty cannot exist
with the expansion of an increasingly worldwide market following the liberal-
capitalist model’s ideological rules.
England predominantly controls this international trading system and con-
sequently acquires a share of other states’ economic sovereignty. London dom-
inates the global market by forcing other countries to adhere to its trade,
financial, and monetary systems. However, London acted in tandem with other
capitalist advanced states. Studies have shown how France is crucial to main-
taining Britain’s financial and trade hegemony. This was possible thanks to the
actions of France’s financial institutions and thriving capital markets, espe-
cially in the second half of the nineteenth century.
For example, during the crisis of 1907 (Bonelli 1971), the Bank of France
was a guarantor for maintaining the pound sterling as the international refer-
ence currency because of its gold reserves (Kindleberger 2005).
Through the dynamism of its financial center, London operates as a clear-
inghouse for a whole range of trade, financial, and monetary relations (Cassis
2012). To maintain its hegemony within the world-economy, England goes to
great lengths to keep as many countries as possible bound to its system of rules
(Eichengreen 2022). The aim is to create a worldwide division of labor that is
key to keeping London at the center of such exchange networks by making the
associated countries increasingly dependent on such a system and thus eager to

maintain it over time (Silver and Slater 2010, pp. 70–71).
Thus, England places itself in a privileged position in controlling each coun-
try’s sovereignty status by holding its participation in and adherence to a sys-
tem of international trade that responds to the rules it has imposed on the
global market (Arrighi 1999, pp. 60–63).
By joining such a trading system, England must support the various liberal
movements in the semi-peripheries of the world-economy. Ironically, liberalist
ideology increases the consciousness of exploitation among the same liberal
groups sought out by London or other advanced countries. Here, too, it is clear
that this is a paradox. The promotion of liberalism serves to voluntarily main-
tain an international division of labor based on free trade and free commerce.
Still, at the same time, it increases semi-peripheral countries’ general (but not
class) consciousness that they are victims of discrimination. Is not liberalism a
vanguard of modern Western thought based on the principle of international
equality and respect for national sovereignty? According to Silver and Slater
(2010, pp. 277–278), this paradox is overcome by the cynicism of the pragma-
tism of raison d'état. England proved to be more interested in forging an alli-
ance with semi-peripheral countries that still adopted an ancien régime political
system, which is more crucial to its material interests than an alliance with
rising pro-European forces.
In essence, the hegemonic power is comfortable with its inconsistency. It
uses the strength of liberal values to justify foreign intervention while being
willing to also sustain and support the old regimes and/or traditional political
élite in exchange for guaranteeing to remain active and reliable partners. The
order comes before freedom. The hegemonic State prefers to sustain those who
best pursue its direct interests immediately.
Support for the liberal élite continues if they have a real chance of political
success. When this is not the case, supporting those on the ground who can guar-
antee a solid alliance of common purpose is convenient. In both cases, however,
the hegemonic power supports the capitalist élite precisely because they are
essential to the interconnections and profitability of capital to its territories.
Britain’s material interests shape the structure of nineteenth-century inter-
national trade within the world-economy. London alters the sovereignty of
others to maximize its own economic and, consequently, political goals. The
reduction of third countries’ sovereignty is proportional to their greater inte-
gration within the increasingly globalized world-economy. At the same time,
the hegemonic power also extends its control to those countries increasingly
integrated into the international market.
The expansion of the worldwide market presupposes strengthening the State
(internally) and its weakening (globally). In fact, during the early globalization
era (starting gradually from the second half of the nineteenth century), we see
a nation-state strengthening, not decaying. There is a need for a strong State
capable of controlling with arms, police, and judiciary the proper functioning
of the State machine and quelling internal uprisings that may threaten the order.
Globalization has increased the importance of sovereignty as an inter-

state guarantee system for maintaining order and peace as an essential pre-
requisite for the proper functioning of the world-economy. Signing various
trade and other economic agreements among different nation-states has
enabled the latter to control those economic events hitherto outside their
direct or indirect supervision (Krasner 1999b, p. 36). However, for many
countries in the semi-periphery that receive fewer benefits from such a model
of integration, there are many advantages to being internationally recog-
nized, as opposed to not being so (Krasner 1999b, pp. 41–47). For example,
from the end of the Crimean War (1856), the Ottoman Empire was recog-
nized as an integral part of the security and balance system of the great
European powers. This integration, however, did not dampen the actions of
the European capitalist powers aimed at weakening the Ottoman economy
and territorial spaces to their advantage. In return, the Empire became part
of a system of mutual international recognition that brought greater security
and border guarantees.
Ties between sovereign states become institutionalized behind the mutual
recognition of specific common values and rules, leaving free trade economic
agreements to weld these connections of interdependence through the financial
and trade flows circulating within the world-economy (O’Brien 1997).
From a class perspective, establishing such agreements influences social
changes, especially in countries furthest from the European value model. By
adhering to such a system of rules, semi-peripheral countries favor acquiring
greater economic and bargaining power by emerging capitalist élites to the detri-
ment of more traditional sections of society. An international market shaped by
these rules means more harm than good for them. The more the economy opens
up, the more these countries’ stability and socioeconomic backbone are endan-
gered. Thus adherence to this over-structure of rules by semi-peripheral coun-
tries, as far as it ensures international recognition, turns into a class adherence
from which only the more full-blown merchants, various financiers, and bankers
linked to the global market mainly benefit (Gill 1996, pp. 205–228; Sluga 2017).
Binding multiple countries to a single economic system increases capital
accumulation possibilities but also increases interstate conflicts to control a
more significant share of wealth (Arrighi 1999, pp. 55–57). We thus witness
an increase in the percentage of accumulation in the hegemonic country and
associated capitalist countries. At the same time, however, we notice a drain
of resources and capital from semi-peripheral countries. It happens espe-
cially when these countries become indebted in foreign-denominated cur-
rency. This means an outflow of interest and various fees or dividends,
bonuses, and profits from business conducted by foreign banks. The State
thus subjugates itself to capital needs (Panitch 1996, pp. 83–113). The prob-
lem is not the exchange of goods and capital per se but the need for true
reciprocity in terms of exchange value. As a result, strong countries gain an
advantage (not always absolute in terms of economic surplus), while weak
countries have a disadvantage.
Hegemonic State
Capital Capital inlow in the

outlow for form of interest and
Capitalist investment returns Capitalist
Power Power
Globalization
Semi- Net capital outlow

Semi-
peripheral peripheral State
State
Figure 1.1 Profits and location of States within the capitalist world-economy.
An economically inspired process of global integration erodes the authority

of the sovereign State, which is based precisely on the principle of territoriality.
The norms and rules that the State accepts damage the foundations of its eco-
nomic and, consequently, political authority (Helleiner 1999, pp. 148–149).
Thus, the capitalist world-economy rests on ‘legal infrastructures’ promoted by
the hegemonic nation, which uses the market shaped by it to de-nationalize and
weaken the sovereign institutions of the semi-peripheral countries by imposing
greater interstate coordination controlled by itself (Sassen 1999, pp. 167–168).
What has been described thus far sets peripheral countries almost in a pas-
sive position before the ever- forced integration into the capitalist world-
economy for the benefit of foreign countries and an internal minority social
class. The ideological force of European ideas associated with capitalist
nations’ increased power accelerates the changes in peripheral societies. These
are in a phase of evolution where the social forces are repositioning themselves
and finding a new arrangement. Foreign movements often serve as the fuse for
redefining social structures and the ensuing institutional changes. The ideolog-
ical strength of the hegemonic power; the internal impetus for renewal (often
referred to as ‘modernization’); the push of novel social groups; military and
political weakness in the face of significant international changes: all these are
facts that actively contribute to the acceptance of changes dictated by the
expanding world-economy. It is no surprise that hegemonic power (thanks to
its military dexterity, economic power, and ideological strength) dictates the
timing of changes in more peripheral countries. Obviously, in places where
cultural distance is more pronounced, changes are more profound and, hence,
more dangerous for social stability in the years to come.
However, no single thesis explains the integration process in a subaltern
position. Therefore, it seems necessary to take stock of some of the most
accepted schools of thought in order to introduce and define the functionality
of liberal-capitalist reforms adopted in semi-peripheral countries.
1.3 Liberal-capitalist reforms in the face of systems-world theory,

unequal exchange, and hegemony
Fernand Braudel, Immanuel Wallerstein, and Giovanni Arrighi have analyzed
the world-economy system and the role of finance from distinct perspectives
Wallerstein (2004b, p. 17) defines it as an integrated area of activities and insti-
tutions that obey and act according to specific systemic rules: the international
division of labor dictates how the world-economy functions.
According to Wallerstein, the forms of commodity production define the
rank of the State: core, semi-periphery, or periphery. Such a system of division
of labor makes the world a kind of integrated ‘social whole’ beyond the respec-
tive existing political divisions. In this way, once the hegemonic political entity
(England first and later the United States) conquers the world-economy and
places itself at the center of commodity production, we are faced with the rise
of a world empire or world system (Arrighi 1998).
On the other hand, Fernand Braudel defines capitalism not as a mode of
production rooted in the division of labor but rather as an expression of the
economic and financial interests of what lies above the market economy,
namely the anti-market. Giovanni Arrighi’s thinking is more in tandem with
Braudel’s in defining cycles of hegemony among states. The Italian sociologist
identifies finance as that higher level of relations rather than the unfolding of
the market economy that primarily exchanges material goods.
These three theories reveal that everything seems to revolve around the con-
cept of hegemony. To attempt a definition of it, we turn to the thought and
ideas of Antonio Gramsci (1891–1937). The rising social class assumes politi-
cal and economic power in two stages: first, the ascendant hegemonic group
claims the right to be part of the State administration and reform it according
to its economic agenda; second, this group achieves awareness of its corporate
interests and becomes the focus of the interests of all subordinate groups. At
this point, it achieves political dominance and exercises its hegemony. This
ascendant hegemonic group’s economic and political interests (in this case, the
capitalist forces, such as the upper middle class and the financial and merchant
élites) become those of the State. Those in charge of foreign policy are tasked
with sustaining and perpetuating abroad the hegemonic course pursued by the
dominant group at home (Gunitsky 2017, pp. 8–9). In this way, the State
becomes the bearer of a specific class ideology that influences and shapes
expansion policies abroad. The imperialism of the hegemonic State, therefore,
is key to satisfying the needs of its domestic hegemonic class. Scholars such as
Robert W. Cox (1983) and William I. Robinson (2005) have theorized this lat-
ter interstate evolution of Gramsci’s assumptions.
Thus, in explaining liberal-capitalist reforms, I use Gramsci’s original theory
of hegemony by extending it to interstate relations in foreign policy-making,
political economy, and international law (Buckel and Fischer-Lescano 2009).
Let us now analyze Samir Amin’s theory of ‘unequal exchange’. According
to the French- Egyptian economist, within the world- economy, the major
capitalist countries impose a kind of unequal international specialization for

their benefit. This means that the powers ‘of the center’ set on the peripheral
countries a system of production that is pivotal to their interests (Baumgartner,
Buckley, and Burns 1976; Gülap 1986). This adjustment keeps the semi-
peripheral countries in a position of inferiority, with no possibility of getting
out or reversing such an ‘unequal exchange’ (Amin 1976, p. 288). According to
this model, integrating into the international economy inhibits the possibilities
of local reaction to the subsequent exchange opportunities created by industrial
development and technological advances in the marketplace (Bunker 1984).
Amin’s theory can also be applied to the financial sector, that is, between
those who hold credit and those who are creditless. The outflows of interest on
loans can be seen as a kind of ‘wealth drain’ to central states, strengthening
their leading position in the world-economy. Indeed, it is well known that since
the last quarter of the nineteenth century, finance began to impose its laws in
the productive sphere, shaping the world-economy according to the needs of
capital accumulation (Koddenbrock, Kvangraven, and Sylla 2020).
In light of the above, where do foreign-induced liberal-capitalist reforms fit
in? The reforms promoted in these countries are crucial to integrating the semi-
peripheral states into the capitalist world-economy dominated precisely by the
hegemonic power as an expression of its dominant social group. Thus, the
semi-peripheral State must adapt to the new market rules by establishing, for
example, those technical (the Ministry of Finance, the Court of Accounts, an
institution with central banking and issuing functions) and social (making
room for political freedoms and the promulgation of a constitution) institu-
tions receptive to the objectives of the hegemonic country.
Adopting the rules in force in the international market aligns semi-peripheral
and peripheral economies with those of the hegemonic power. This integration
serves two purposes: it forces semi-peripheral countries to accept the anti-
market’s rules and norms by increasing the capitalist élites’ financial profits,
and it confines the semi-peripheral country to a subsidiary productive position
by encouraging unequal exchange by signing free trade agreements. The semi-
peripheral country is encouraged to export raw materials or semi-finished
products while being encouraged to import high- value-
added products
from abroad.
Following Braudel’s and Arrighi’s theory of hegemonic cycles and the social
role of the hegemonic group as defined by Gramsci, we can state how exter-
nally induced reforms – especially in the areas of money, public finance, eco-
nomic legislation, and property – are paramount in integrating semi-peripheral
states into the capitalist world-economy. These countries are induced to place
and accept the division of labor (in the commercial and later financial sector)
in a second-ranking position (as theorized by Wallerstein), facilitating the
accumulation of capital and the profits of the anti-market forces.
During the nineteenth century, financial reforms are generally enacted after
the signing of free trade treaties. The implementation of such agreements
requires internal and external institutional changes. According to Friedrich
List, free trade theory – as well as what is theorized by classical economists

such as Smith, Ricardo, and Mills (Boldizzoni 2008, 2019) – is an expression of
the policy of the strongest actor in the market (List 1856). In essence, List
states how such theories of trade harmonization under the auspices of a
liberal-capitalist system are espoused and supported by economically stronger
countries, for it is they who derive the highest returns and interests in terms of
economic power and strength.
Indeed, free trade agreements cause semi-peripheral countries to run grow-
ing trade deficits, consequently forcing them to resort to foreign borrowing.
The logic of economic rationality to which the State must adhere requires these
countries to rectify their balance of payments deficits. The debt route becomes
the easier way forward than undertaking austerity policies or fiscal interven-
tions that risk undermining the support of some social forces. However, bor-
rowing capital on foreign markets and foreign debt-denominated currency
bonds increases dependence on international creditors. Debt drains wealth
from debtor to creditor, for instance, through interest payments. According to
John A. Hobson (1902), major creditor countries receive taxes from abroad in
the form of interest payments, dividends, and remittances from their invest-
ments. Karl Marx himself warns about the danger of excessive foreign debt,
significantly when it exceeds the State’s ability to pay what it owes its creditors
(Marx 1869, p. 52; Davanzati and Patalano 2017; Perulli 2020).
As we will see later, foreign debt is intrinsically linked to liberal-capitalist
external reforms. Enlightenment figures of the caliber of Montesquieu and
David Hume and classical economists such as Adam Smith and David Ricardo
repeatedly condemn the accumulation of excessive public debt (Hirschman
1979, p. 59; Churchman 2001; Nicholson 2001). Montesquieu and Hume con-
demn debt from a political standpoint in terms of the danger of excessive State
power. On the other hand, Smith and Ricardo recognize how public debt
reduces a country’s wealth and, consequently, its sovereignty vis-à-vis creditors
(Fornasari 2019). Private creditors and foreign policy-makers take advantage
of this dependence on foreign credit to demand financial reforms that reinforce
this dependent relationship. Such action aims to keep the debtor within the
international capitalist market in a subordinate position and preserve high
profits in the creditor country. The more the debtor needs foreign credit, the
more the creditor can make its willingness to lend dependent on some quid pro
quo (Tilly 1990). In doing so, the creditor can leverage the debtor’s need for
loans (in foreign currency or gold) in exchange for economic and financial
reforms crucial to maintaining this interdependent relationship.
In practice, capitalist forces, in association with bourgeois élites in the semi-
periphery, have used loan demands to push local governments to implement
reforms that encourage dependency. Such requests are often made when the
need for foreign assistance is so great that the potential borrower cannot refuse.
Empirical evidence shows that these requests usually come from diplomatic cir-
cles. Foreign diplomatic élites use their contacts at foreign chancelleries and the
military clout of the powers they represent to demand such transformations.
In particular, since the second half of the nineteenth century, British capi-
talists have recurrently feared the prospect of diminishing returns on capital.
Indeed, David Ricardo stresses the need to increase dependence on for-
eign trade to counter falling profit margins. Equally, Thomas Malthus states
that what is at issue is not the absolute amount of capital available but the
relative difficulty of finding profitable uses for it. The continuous increase of
capital within a circumscribed territory and a restricted market can inevita-
bly cause a dangerous fall in profit rates (Semmel 1970, pp. 10, 74). The
financial reforms invoked by the hegemonic State are crucial to reproducing
its controlling power within the proper space of the capitalist world-economy
it controls.
1.4 Defining the role of élites in the reformist process

Previously, we have seen how the reformist process results from the direct and
indirect action of the hegemonic State (and by other powers that support and
share its economic and organizational structure) aimed at inducing those
transformations crucial to maintaining a dominant position within the capital-
ist world-economy. Initially, however, the promotion of such actions is a direct
expression of the ideology of the hegemonic class, which, once it has gained
political power, attempts to use it to perpetrate at home – and then abroad –
the basic principles of its power. Promoting these principles is instrumental in
maintaining a socially and materially dominant position at home and within
the international borders that its territorial state can directly control and influ-
ence through highly advanced military power. According to Donald Sassoon,
ascendant financial élites, as opposed to landlords, have their interests within a
single country and the entire economic space in the capitalist world-economy
(Sassoon 2021, pp. 139–140).
Therefore, how does this takeover of power by a social group within a
defined nation-state take place in the era of capitalist transformations? To
answer this question, we turn to Antonio Gramsci. In Notebook 4, § 38, Gram-
sci states how the first moment, the most elementary, is the primitive economic
one: a merchant feels solidarity with another merchant, a manufacturer with
another manufacturer, etc., but the merchant does not yet feel solidarity with
the manufacturer; that is, he feels the homogeneous unity of the professional
group, but not yet of the social group. A second moment is when the con-
sciousness of solidarity of interests among all social group members is reached,
but only at a purely economic level. At this economic-political stage, the ques-
tion of the State arises on the ground of elementary political equality, as peo-
ple claim the right to participate in administration and legislation and to
change them, to reform them, within the existing general frameworks. A third
moment is when one reaches the consciousness that one’s ‘corporate’ interests,
in their current and future development, go beyond the ‘corporate’ circle of
economic grouping and that these can and should become the interests of
other subordinate groups; this is the most bluntly ‘political’ stage.9
However, while Gramsci’s analysis is limited to outlining the hegemonic

class’s internal takeover of power, the work of Robert W. Cox (1983) and Wil-
liam I. Robinson (2005) helps us transpose this modus operandi to a global and
transnational level. The new British bourgeois class, leading and carrying on
its shoulders the epochal changes resulting from the First Industrial Revolu-
tion, imposes its economic creed as a hegemonic force within the organs and
institutions of the State. Consequently, its global projection is nothing less
than the international representation of the new dominant ideology.
However, promoting institutional reforms may follow a different path,
although much of our task is to make a complex transformative process more
evident and thus to simplify things. Hence, promoting such changes follows a
dual track of intervention, both vertically and horizontally. Vertically, those
financial élites promote them at the top end of the social pyramid within a
capitalist country. Horizontally, they are encouraged by all élites who share its
economic principles within the world-economy area (but need to acquire polit-
ical power or are still far from doing so).
The theory of élites helps us in our logic. It studies the dominance of a
numerically restricted social group above all others, highlighting how the rela-
tionship between various power groups stratifies the social makeup of a given
territorial unit. Gaetano Mosca (1858–1941) and Vilfredo Pareto (1848–1923)
may be considered two of the main precursors of this theory, which shows how
all forms of government, modern or ancien régime, result from oligarchic con-
trol of society. For example, Mosca divides society’s political organization into
two interrelated power structures: that of the autocratic principle, in which
authority is transmitted from the top down, and that of the liberal principle, in
which the guidelines for directing the country come from below (Mosca 1923).
Pareto, on the other hand, defines élites as a true ‘aristocracy’ predisposed to
lead society. The Italian economist and sociologist investigated the causes of
inequality within society, and his theory on power-shifting is highly relevant.
According to Pareto, we need a twofold solution to maintain social stability by
ensuring the continuity of a specific group of ruling élites: 1) eliminate the
emerging elites, and 2) attempt to assimilate them. If neither solution is fol-
lowed, the ruling élite is reasonably threatened to be violently replaced via a
revolution. This theory thus demonstrates the need for fluid circulation among
élites responding to a new repositioning of society locally and internationally,
as well as evidence that the ability of a given élite to retain power is time-
limited (Pareto 1916).
Countries at the core of the capitalist world-economy, such as England,
adhere to a liberal principle of organizing society. Hegemonic élites can replace
the old ones in power through a bottom-up approach. In contrast, in many
semi-peripheral countries, we see the dominance of an autocratic principle. In
these societies, the turnover of ruling élites does not occur according to Pare-
to’s principle precisely because it is a ‘forced’ transformation. Rising capitalist
élites do not have broad social support to justify their ‘natural’ seizure of
power. There is no body movement of the whole society which these élite
represent unless mixed with a higher tendency of protest against the socioeco-
nomic and political inequalities that characterize the old regime. There is thus
a need for more or less coercive external action capable of inducing the country
at the semi-periphery to adopt those rules and norms capable of paving the
way for the rise to power of these economic élites, possibly through the acqui-
sition of political power. Such a transition may not materialize because of the
following:
1 Resistance and the use of force by the ruling élite.

2 Ostracism from an established existing social group.
3 Opposition from the religious leadership that derives important economic
benefits and political influence from such a political order.
Overcoming these possible obstacles is complex, which is why the proposed

reforms aim to help fix these through non-violent action. They are to promote
the ordering of norms and laws, institutions, and bodies that are based on the
constituent principles of local and international capitalist élites and thus
implicitly foster and strengthen their political clout within a social order that is
not ready or predisposed to concede them voluntarily. As we shall see, the
semi-peripheral country is often induced to implement such transformations
because of the signing of unequal free trade agreements, an out-of-control for-
eign debt, and an ever-looming military threat.
The balance among élites, following Mosca’s division, is also reflected in the
political form taken by the State. In terms of the autocratic principle, it will be
easier for the political structure to be precisely authoritarian (in our century, it
will also take the form of illiberal democracy); in terms of the liberal principle,
however, we will find that the structure of liberal democracy is more common.
However, this explanation is insufficient to provide an overall assessment of
such balances. According to Dani Rodrik (2018, p. 98), when a group of élites
is not cohesive and thus lacks shared harmonious coordination, democracy
may emerge as a power-sharing system willing to cede rights to peripheral
groups in exchange for their political support (or aimed at avoiding possible
political instability that may lead to mass uprisings).
Liberal democracy results from the weakness of a particular group of
élites confronting other social groups. External- induced liberal- capitalist
reforms, however, push in a different direction. Their purpose is to strengthen
a particular social group from the outside, namely the capitalist élite, to make
it as strong as possible and, therefore, as little subjugated and subject to com-
promise as possible. Liberal democracy is only an option in terms of political
transformation. It was acceptable only if it followed the hegemonic power’s
economic and political will. Autocracies and technocracies are filled with
political content if they are more functional to the process of capital
accumulation.
However, the external empowerment of local capitalist élites is made possible
by the theory of absolute and comparative advantages typical of liberal thought,
which bends the new states to a certain specialization within the capitalist world-
economy. The lack of diversification, partly due to the monopoly in many high-
productivity sectors of the hegemonic power and its allies, makes the peripheral
economies specialize in a few sectors, which, however, are guaranteed high profit-
ability due to the prospects offered by the international market. Hence, the élites
who control these sectors have ever greater power than all other social groups and
find in the liberal idea of the rationality and strength of the individual the intel-
lectual and moral basis for asserting the justness of their social ascendancy
(Schlangen 1979, p. 201). This can have two consequences: the emergence of an
illiberal plutocracy or the constant challenge to the traditionally constituted order
that triggers illiberal counter-reactions. In either case, however, the result is not
the emergence of a liberal democracy that is based on the balance of multiple
social groups unable to prevail decisively over one another. Thus liberal economic
reform does not strengthen the democratization of society.
The second case analyzed is of particular interest. Here we are dealing with
counter-reactions, that is, resistance movements against the seizure of power by a
social group that is not in line with local interests not only from an economic
standpoint but also from the standpoint of political and cultural traditions.
Indeed, one can only adopt an economic system by considering a particular coun-
try’s cultural tradition (Magee and Thompson 2010, p. 14). These are counter-
reaction movements with anti-capitalist connotations and often a nationalist
vocation. Here we must mention the Urabi uprising in Egypt in 1879 and the
Boxer revolt in China between 1899 and 1901, and perhaps also include, in differ-
ent respects, the seizure of power by the Young Turks in 1908 Akçam 2004).
Such institutional-led reforms, therefore, have a clear class connotation,
that is, they favor a particular social group. Despite the social backlash these
transformations can trigger, especially between territorial élites and emerging
capitalist élites with transnational interests, reformist action can also foster a
functional compromise to preserve the old ruling master classes in association
with the new rising Westernizing élites. This is not an alliance but rather a
merging of the aims of two bourgeois groups that nevertheless compete with
each other. This clash is effected over the control of State apparatuses, interna-
tional partnerships, and interstate relations. Their clash takes place more over
the control of the State and, thus, the domination of one social group over the
other. The State remains the only entity capable of imposing, through the use
of force and laws, the adoption of one value system over another. Economic
élites must preserve an alliance with political élites since it is crucial for them to
secure property rights and contractual obligations, such as acquiring dominant
positions, at least in the domestic market, through developing annuity or semi-
annuity positions (Arrighi, Hopkins, and Wallerstein 1987).
In the Ottoman case, as we shall see, the new intellectual and reforming élites
(i.e., that social group supporting the reform process known as the Tanzimat) did
not hesitate to exploit the transactional linkages of the local capitalist élites to
acquire credibility, credit, and money from the great European powers. The aim
was to initiate a profound reformist process as the synthesis of an internal
transformative process, that is, stemming from local tradition. However, the lat-
ter reformist movement is only partially structured on a foreign-inspired model.
It is a pact between tradition and modernity for a division of power. As
Hobsbawm (2014, p. 243) reminds us, although these new élites do not accept
tout court all the values of European societies from which they are partly inspired,
they see the modernizing model they propose as the only way to pursue their
interests. However, modernization in the economic sphere, within a world-
economy dominated by the European capitalist powers, turns into an increasing
transfer of power into the hands of rising economic élites, capable sooner or
later of tilting the balance of power in their favor (Martinelli 2010, p. 13).
In the end, no matter the compromise solutions, the intended purpose of
institutional reforms in semi-peripheral countries is to create a favorable milieu
for capital accumulation (and consequently a deeper control of social forces).
Likewise, it confers power and potentially creates political space for the local
emerging capitalist class. This social transformation can support the system
promoted by the hegemonic power of the time worldwide more smoothly. That
is, it can encourage that order which justifies such a defined composition of the
various social groups about and in association with the dominant one in Eng-
land. Liberalism becomes the reference ideology for these increasingly related
groups within the capitalist world-economy.
With greater pathos, both Marx and Engels defined these transformations
in these terms:
The cheap prices of its [the industrial bourgeoisie’s] commodities are the
heavy artillery with which it batters down all Chinese walls. […] It com-
pels all nations, on pain of extinction, to adopt the bourgeois mode of
production; it compels them to introduce what it calls civilization into
their midst, to become bourgeois themselves. In a word, it creates a world
after its image.
(Marx and Engels 1948)
For the élites in the hegemonic country (and those present in all other advanced
and semi-peripheral countries), it is a matter of finding in any country adher-
ing to a given world-economy those same rules of employment of capital that
are most familiar to them and thus pivotal in allowing a greater capacity for
accumulation. This is often effected by promoting the ideology of the liberal
doctrine (even through real ‘civilizing’ missions) presented as the only ethical
model of development and progress for the whole society due to the powerful
values it promotes, such as individual, civil, and political freedoms. However,
this new scale of values clears the principle of economic freedom. In this way,
capital accumulation and wealth concentration (and consequently the élites
who make themselves the bearers of wealth) are no longer secondary activities
in the value scale of the existing social order or social classes of secondary
importance, but become central constitutive elements of the newly born
nation-state.
Anti-Market
Reforms
Hegemonic Semi- Hegemonic Hegemonic

class peripheral state class
state
Political Political
Economic elite Economic elite
Market Economy
Figure 1.2 Connection between élites, State, and anti-market.
1.5 The cycles and timing of liberal-capitalist reform

As we follow the evolution of the various economic cycles of capitalism, we
realize how difficult it is to find a synthesis among all those who have dealt with
this issue without showing their preference for one model over another. Hence,
this becomes even more problematic when it comes to finding an unambiguous
temporal collocation to promote those liberal-capitalist externally inspired
reforms that are key to keeping the profitability of capital high in the material
and then financial sectors.
We can thus theorize the presence of certain phases in the cycle of these
kinds of reforms:
1 When the hegemonic State, driven by forces linked to capital, brings in

a series of free trade agreements with third countries by leveraging its
political and military strength;
2 When the increasing interconnectedness within the capitalist world-
economy becomes functional in allowing capital to exploit every pro-
ductive sector pivotal to maximizing the process of capital
accumulation;
3 When the degree of interconnectedness becomes so intense that capi-
tal is free to move fluidly through every part of the system, de-
territorializing itself from the hegemonic State just enough to free the
accumulation process from the political issues attached to the territo-
rial State itself.
(Brenner 2004)
In essence, the rules imposed by the hegemonic power and anti-market forces
on the international economy increasingly stabilize capital and make it prosper
transnationally.
Liberalist reform thus boasts the purpose, in the words of philosopher Jür-
gen Habermas (1999, p. 36), “to overcome the social limitation of the political
community with territorial limitation”. The social constraints of a complex
society are simplified in convergence with the interests of financial élites. Still,
to do so, there is a need to overcome the limitations imposed by the nation-
state, such as territorial constraints. In fact, at this stage, latent struggle
increases between those classes whose inter-alliance allowed the first phase of
development and accumulation. In the third phase, known as financialization,
there is a gradual breakdown, a kind of rarefaction, among the capitalist
classes dominating the anti-market. The ties of interest among them loosen as
the purpose of widening the anti-market’s sphere of influence is achieved. This
generates a competition phase among forces belonging to the same class: capi-
talists eating other capitalists in the scramble for market control.
At this point, states can follow two different paths, the first often taking the
form of imperialistic exploitation of semi-peripheral countries to maintain a
firm national social order by externalizing domestic adjustment costs. Accord-
ing to David Harvey (2018, p. 84), such action is generally taken by capitalisti-
cally and militarily advanced nation- states that find it more politically
acceptable to find an external resolution to their domestic problems that are
difficult to solve otherwise. The second path consists of increasing pressure on
the underlying classes. This is done, for example, through policies favoring
wealth redistribution to the top, such as foreign-denominated debt issuance or
direct action on the tax system (Arrighi 1997). Countries in the semi-periphery
that cannot afford an imperial adventure frequently pursue this choice.
However, this difference should be interpreted in a variety of ways. British
financial élites began to suffer competition from newly emerging élites (such as
those from Germany and the United States) within the anti-market during the
last phase of the financialization of the economy, from 1873 to 1914. At the
same time, British entrepreneurial dynamism lost its initial strength and
momentum, which caused a downward trend in the English domain in the
international market. Capitalistically speaking, the British system is no longer
as competitive as it was a few decades ago, as British-based financial invest-
ments gradually leave the motherland to seek more attractive returns in emerg-
ing markets. Capital enters a progressive phase of de-territorialization, moving
to where returns are highest.10 At the same time, a portion of this capital man-
aged by the less competitive élites decides to keep rent-seeking positions within
the safe boundaries of the empire. Data show that between 1870 and 1913,
capital flows fluctuated between 4 and 5 percent of Britain’s GDP (with peaks
as high as 7 percent at certain times). This capital is invested mainly in the
Americas and not on British soil, with 45 percent of these investments going to
the United States and the colonies.
On the other hand, a portion worth about one-fifth goes to Latin Amer-
ica, 16 percent to Asia, and 13 percent to Africa. In 1914 out of a gross total
of 3.8 billion pounds’ worth of investments made by Britain, only 1.8 billion
was actually invested in British colonies. The latter, however, began to
absorb progressively larger and larger shares of investment between 1865
and 1914. On average, these territories attracted about 38 percent of assets,
but by the 1890s, the percentage had risen to 44 percent (Ferguson 2009, p.
204). In essence, the foreign flow of capital is worth 4 percent of England’s
national income, generating a return of 200 million pounds of interest, or 8
percent of the country’s income. According to Edelstein (1982, pp. 3,
191–196), the average yield on foreign securities is worth 5.72 percent com-
pared to the 4.6 percent offered by domestic issues over the historical period
under review.
Furthermore, over the same period and for separate investment sectors, we
find that the rate of return on interest and dividends is 5.6 percent for Treasury
bonds, 4.9 percent for railroads, and an overall average of 5.4 percent for the
remaining investments. These figures show us how much more profitable it is to
invest outside England when compared with domestic returns. Indeed, we are
talking about an average of 3.26 percent for consolidated government debt
securities and 4.3 percent for the railways in general (excluding common stock)
(Kindleberger 1972, pp. 111–112).
Capital returns have an impact on the reform-led policies of the economic
system. Thus, the phases of liberal-capitalist external-influenced reformism are
twofold. The first phase began roughly in the 1840s and lasted until the out-
break of the Great Depression in 1873. The country focused mainly on signing
free trade agreements in the material economy (trade, manufacturing, raw
materials, etc.). The second phase spanned approximately 1873 to 1895, and
then 1914, and concerned the demand for a whole series of reforms related
mainly, but not exclusively, to finance (monetary policy, public finance, and
public debt management). According to Marxist interpretation, the first phase
(that of material expansion) can follow the formula of capital D → M → D’,
while the second (phase of financial expansion) follows the formula D → D’,
where investments in financial compartments are preferred (Marx 1887; Mak-
sakovsky 2004). These are general formulas that must be adapted to the evolu-
tion of a single country (in this case, England) and not the entire world-economy.
What occurs in the United States (as the new center of de-territorialized capi-
tal) is the exact opposite: a constant flow of foreign investment in the local
economy’s material expansion. Thus, 1873 can be referred to as the turning
point between England’s material and financial expansion phases. Hence, we
can summarize these two phases as follows:
1 trade-driven reforms in the material expansion phase of the hegemonic

power;
2 debt-driven reforms in the financial expansion phase of the hegemonic
power.
The Great Depression between 1873 and 1896 coincides with the historical
phase known as imperialism. This phase combines with protectionism and
implementing policies aimed at gaining personal advantages to the detriment
of other countries (called beggar-thy-neighbor), often resulting in actual terri-
torial conquests. The chronological phase between 1896 and 1914 witnessed an
increasing inter-imperialist competition aimed at acquiring ever-more out-
standing shares of trade and exchange (Mandel 1995, p. 130).11 In reality, each
country attempts to bring home or make itself the best candidate to acquire a
greater share of world profits. The inter-imperialist struggle is a consequence
of the de-territorialization of capital. The share of profits gained in the world-
economy under the military aegis of the hegemonic power becomes a terrain
of inter-capitalist contention. At the same time, capital, or rather the social
class that handles it, pits these powers against each other for greater returns in
terms of profits and accumulation.
There is a clear distinction between material and financial expansion. This
difference can also be found in the writings by critics of capitalism. When
Marx and Engels were writing, the significant criticism of the modern eco-
nomic system was concentrated mainly on commodities and industry, that is,
material expansion. Recall this notable passage from the Manifesto of the
Communist Party:
The cheap prices of its commodities are the heavy artillery with which it
batters down all Chinese walls […]. It compels all nations, on pain of
extinction, to adopt the bourgeois mode of production; it compels them
to introduce what it calls civilization into their midst, to become bour-
geois themselves. In a word, it creates a world after its own image.
(Marx and Engels 1948)
In the second phase, known as financial expansion, Vladimir Lenin (1870–1924)

and Rudolf Hilferding (1877–1941) focus their critical analyses on financial
capitalism (Lenin 1948; Hilferding 1923). Marx confines financial capitalism to
its use in the material field and monetary economy. Hilferding, on the other
hand, analyzes how the banking sector had now taken over from the industrial
sector. The Austrian thinker strongly criticizes the economic development of
his era, namely the financialization of capitalism. Lenin, who is almost con-
temporary with Hilferding, also pays special attention to the problems of the
falling interest rate of finance capital (Kindleberger 1972, p. 110).
Thus liberal-capitalist reforms act as forerunners to maximize the capital-
ist expansion phases of the hegemonic power and dominant economic inter-
ests in the anti-market. The economy is transformed according to the needs
and demands of the international market. It introduces, through reforms,
competitiveness, commodity/capital mobility, and bourgeois and market
rationality as constituent elements of state legitimacy. No longer does God
legitimize the power of the sovereign and the State: money is an element of
the new s ocial order.
Notes
1 More recent research identifies the reproduction abroad of the capitalist social
model as that proper to an Empire of Capitalism (Parisot 2016).
2 The ideas of Jeremy Bentham, as well as the utilitarian movement, are often associ-
ated with laissez-faire, especially as a key to government reforms in the nineteenth
century (Robbins 1953). Jenifer Hart has critiqued this view (1965).
3 Shifting the greater weight of taxation to direct rather than indirect contributions
means intercepting the growth of wealth due to capital accumulation (Patnaik
1997). Indeed, the British income tax will set the standard in transforming Euro-
pean societies and the principle of the relationship between taxation and rep-
resentation in a liberal and later democratic State (Daunton 2001).
4 For example, the Manchester League, an association defending the interests of the
British merchant and bourgeois classes against landowners, doggedly promoted the
notion that removing the Corn Laws was the key to conferring substantial benefits
on all social classes (McCord 2006, p. 56).
5 Again, Hirsch (1981, p. 168) notes how this underlying problem is viewed by Ed-
mund Burke (1729–1797) and Alexis de Tocqueville (1805–1859) with great alarm
for the future of liberal society. To grant voting rights to the ‘propertyless’ is to
provide them with an indirect instrument of usurpation against property holders. In
this way, those without property can use the State to obtain a more significant share
of wealth than that dictated by their current material condition.
6 Antonio Gramsci had not failed to warn against the double standard of economic
liberalism. He calls it a kind of hall of mirrors capable of exalting the beauty of
each perspective according to need. And it is here that the fallacious distinction
between political and civil society arises, where only the latter, and not the State,
should intervene in regulating economic activity. In reality, state and civil society
are identified to the extent that liberalism
is a regulation of state character, introduced and maintained by legislative and
coercive means […]. Therefore, [economic] liberalism is a political program, des-
tined to change, as its triumphs, the managerial personnel of a State and the
economic program of the State itself, that is, to change the distribution of
national income.
(Gramsci 2011, p. 294)
7 The original term in French with which Braudel describes these ‘upper floors of
interchange’ is contre-marché, translated into English as anti-market.
8 Despite their differences, Italy and Japan have been able to emancipate themselves
from an underdeveloped condition by moving toward industrial-led growth. This is
due to the ability of the production system to exploit the absolute advantages avail-
able to them by carving out a slice in the international division of labor. Mature
industrial development took place following the adoption of protectionist policies,
however imperfect; in Italy, the most important were those of 1878 and 1887 (Pec-
orari 1989).
9 Antonio Gramsci, Prison Notebooks No. 4, Relations between Structure and Super-
structure § 38, 1929–1932.
10 Here it is worth taking into account the analysis carried out by French philosophers
Gilles Deleuze and Félix Guattari (2002) regarding the concept of re-territorialization
and the assertion of state control over various economic actors.
11 Ernest Mandel (1972, 1995) highlights, compared to John Arrighi, how the history
of capitalism does not follow in cyclical order. He highlights how economic growth’s
expansion and contraction phases are not regular.
2 The power of ideas and capital
2.1 Reformism and the modus operandi of the capitalist State

What is the hegemonic capitalist State? Giuseppe Cospito (2016) reminds us
that hegemony comes from the Greek hegemòn. In its political and ideological
meaning, this term implies the dominance, whether peaceful or otherwise, of
the stronger over the weaker. This meaning has remained unchanged until
modern times. The hegemonic State is thus the one that, by exploiting the ele-
ments of its hard and soft power, imposes its military, diplomatic, and often
cultural dominance on both the countries of the semi-periphery and periphery
and also on capitalistically advanced countries. The State thus becomes an
essential element in the propagation of capitalism in its liberal variant within
the world-economy it controls (Hintze 1980, p. 205). How does a particular
State become the promoter of a specific ideology? Antonio Gramsci helps us
understand the concept of hegemony more broadly. He analyzes how a certain
kind of ideology promoted by a specific social group becomes identified with
the policy pursued by a defined State.
Take the classic case of England. We have seen how free trade policy became
firmly established following the abolition of the Corn Laws in 1846. In fact,
according to historian Patrick O’Brien (1997), prior to this date there was no
world- economy. This periodization coincides with the period referred to by
Gramsci as the apogee of British hegemony, between 1845 and 1875 (Cox 1983),
that is, at the peak of the market opening in the nineteenth century (Bairoch 1998).
Now the question arises: at what stage of the hegemonic power cycle does
the need to call for reforms emerge in semi-peripheral countries? Generally,
reforms take place in tandem with the saturation of the domestic market, when
the desire to increase profits and accumulation dictates the need for economic
élites to create the same functional structures, institutions, and modus oper-
andi abroad for the profitability of capital. The aim is to adopt the same capi-
talistically oriented economic rules presented within the hegemonic country.
The networks and interconnections of capital comprising various mer-
chants and capitalists, thanks in part to the political support granted to them
by public authorities, gradually expand to encompass ever-new territories and
spaces. To enable this process, however, semi-peripheral countries must adopt
DOI: 10.4324/9781003441816-3
those regulations favorable to the interests of those who control the anti-
market. This step is a complex and obvious one. If difficulties arise, the hegem-
onic State intervenes, using its political, military, cultural, and ideological
power to force unruly countries into accepting its rules of engagement of cap-
ital. The hegemonic State and international markets often identify themselves
in relation to the fact that the social class that assumed power in nineteenth-
century England (but also in twentieth-century America) is the same one that
looks favorably on an expansion of the international market. Walter Bagehot
(1826–1877), the renowned editor of The Economist, known as a voice for the
interests of the British haute bourgeoisie, was well aware of how semi-
peripheral countries were crucial to accommodating the mighty wave of finan-
cial investment coming from Victorian Britain (Zevin 2019, p. 83).
In essence, the forces acting within the anti-market exploit the strength of the
territorial State to shape the world-economy to its own rules following the oppor-
tunities provided by a booming market. This phase increasingly unties the promi-
nent capitalists from a circumscribed territory, making them free to disassociate
themselves even from the hegemonic State should a financial crisis capable of dis-
rupting the process of capital accumulation arise (Roberts 2020). Braudel and later
Arrighi affirm that the phase of financial expansion is ‘the last gunshot’ of hegem-
onic power. This phase is preparatory to allowing capital, which no longer finds
the returns it once did in the material economy, to globally seek far more profitable
channels of employment in the financial field. At this stage, the hegemonic power
demands new liberal- capitalist reforms from the peripheral countries. These
reforms focus less on the trade and manufacturing sector and more on the finan-
cial sector. In both cases, these reforms benefit those in the anti-market to the det-
riment of the natural operation of the market economy, that is, the lower level.
To summarize: the forces acting in the anti-market demand that the rising
hegemonic State help create, through a domestic reformist process, an environ-
ment conducive to its own prosperity within national borders. The same trans-
formations are later demanded externally when the domestic market has
reached saturation and the hegemonic class has consolidated its power at
home. However, the application modes are distinct, even in their methods.
Within national borders, the central State can generally act unchallenged at
any time (in this regard, we also include direct colonies). Internationally, on the
other hand, there is a need to achieve determined and recognized political,
military, and economic leadership. However, new rules are imposed thanks to
the strength of State power and the winning persuasion of ideas, conceived as
a model to be imitated and emulated worldwide.
Thus one of the ultimate purposes of reform is to homogenize the market
according to well-established rules through economic and market globaliza-
tion. Indeed, it is with reason that Niall Ferguson (2003) refers to the period of
nineteenth-century British economic dominance as anglobalization.
However, the symbiosis between the anti-market and the hegemonic State is
not eternal: it is merely a marriage of interests. A financial crisis within the
The power of ideas and capital 37
State that dominates the world-economy can change the balance in place. Gen-
erally, capital decides to migrate and take shelter by de-territorializing, that is,
by exploiting that global system of rules, which it previously promoted, and to
shelter itself from a financial crisis. Once this step has been taken and with the
end of the most challenging phase of the crisis, capital will be able to negotiate
from a position of strength its return to the territorial State, squeezing out
concessions and advantages more palatable than those previously obtained
(e.g., lower taxation on profits, greater mobility, etc.).
Capital does not always return to the same role in the previously abandoned
territorial State (due to causes that may lie outside the hegemonic State’s own
will). Capital may head for a new State that offers more significant opportuni-
ties for growth and, hence, wider profit and accumulation outlook. It allows
de-territorialized capital to territorialize itself based on the high profits availa-
ble at a new State entity, receptive to maximizing its returns and being able to
assume a growing regional and perhaps leading international role. Capital
always requires a strong State where it can physically locate itself, and that
State will thus become the center and the new pivot of the capitalist world-
economy. In this case, adopting those reforms imposed by the old hegemonic
power serves as a quick and preferential channel, an excellent communication
highway enabling the transposition and identification of the anti-market with
a new hegemonic or aspiring State.
Thus, the crisis helps capital assert itself more firmly in society as an essen-
tial element in allowing the damaged system to restart. Every crisis becomes an
opportunity to revive capital by obtaining more favorable conditions for a
capital-dependent society.
Reform is nothing more than the Trojan horse of that transformation inher-
ent in capitalist society. Adaptation to this basket of rules becomes acceptable
to those states that adopt a system of power such that they identify capitalism,
and the need for constant capital accumulation, as the constitutive and insep-
arable element of a modern state and societal legitimacy. Reforms promoted in
this way by the hegemonic State become palatable to a small circle of élites to
whom wealth, power, and security are projected at the center. Therefore, the
consensus of the whole society is not needed, but only of economic forces that
identify with the anti-market and see the process of international openness as
a way to promote their own interests. Therefore, once they achieve political
influence, the new national financial élites benefit from the military and politi-
cal force of the State to impose and enforce those agreements essential to the
proper functioning of free trade.1
Applying these new rules through the reform process becomes useful to sev-
eral actors:
1 the hegemonic State: to maintain and have its supremacy recognized;

2 capital: maximizing returns;
3 local élites: to derive a return in terms of economic and political power.
Nineteenth-century globalization needed the political and military might of

the sovereign State to maintain that basket of rules fundamental to its proper
functioning. As Smith, Solinger, and Topix (1999, p. 13) remind us, financial
globalization results from a whole series of socially constructed reforms
through the work of specialists in law, accounting, and finance, often through
the assistance of State officials.2
Liberal-capitalist reform is thus able to combine all of these interests in one
harmonious intersection conducive to enhancing a system capable of keeping
the process of capital accumulation fluid and, at the social level, guaranteeing
the domination of the capitalist class. These reforms thus institutionalize a
social pyramid in which the forces of capital compete with the old political
élite for power in the country.
Adopting these new ‘economic rules’ generally takes place following a
‘peaceful’ imposition process. The ability on the part of the hegemonic State to
impose an internationally recognized system of rules underlies the exercise of
the liberalist cultural monopoly that facilitates the adoption of the new regula-
tions. Liberal doctrine seeks to impose itself as dominant above all other exist-
ing ideologies in terms of credibility and morality.
The cultural, moral, and civic value of liberalism gives liberal-capitalist
reformism an aura of respectability and modernity that is perceived as befitting
civic progress and not as a retrograde and hostile element. The national econ-
omy of the semi-peripheral countries is thus shaped through rules from outside
under the guidance of formal acceptance by the emerging capitalist élites who
derive the broadest benefit.
According to Silver and Slater (2010, p. 205), the fast-rising capitalist world-
economy, at the center of which is Britain, confers advantages and benefits not
only to the hegemonic power but also to the plethora of global élites who
identify with the anti-market.
In short, liberal-capitalist external reform is promoted as the bearer of a
system formally based on equality of exchange among the various economic
forces that accept free trade. In reality, only the élites in the anti-market benefit
the most, along with the capitalistically hegemonic country. Only this social
group is aware of the proper exchange conditions in the international market,
thanks partly to the privileged capital access that allows it to acquire an ever-
increasing share of influence and political power.
2.2 When and how was external liberalist reform born? From

mercantilism to free trade imperialism
The general structure of externally induced capitalist reform can be identified
as the result of the evolution of the mercantilist economic model toward the
classical liberalist model. Some mercantilist norms poured into the newly born
economic liberalism. The proper action of economic domination, a character-
istic element of mercantilism, influences liberal ideas. Liberalism places major
importance on the economic benefits of imports: the cheaper, the better, even
if that means accruing a trade deficit. In contrast, mercantilists promote a kind

of autarky with regard to production and incentivize, from a trade perspective,
exports over imports (Rodrik 2018, p. 133). Liberal-capitalist external reform,
aiming to increase the profitability of capital for a given social group and a
defined nation-state, is identified as an instrument to promote specific interests
that have little to do with the newly emerging principles of fairness. Reform
survives in the ideological fabric of liberal capitalism but practically perpetu-
ates some typically mercantilist practices.
According to John K. Galbraith (1988, pp. 56–57), the end of the mercan-
tilist era leaves behind a robust remnant of its attitudes and an equally robust
legacy of its institutions. Liberalism inherits de facto many of the ideological
legacies of mercantilism, such as some of its principles that will continue to be
accepted and not erased; for instance, the abolition of internal customs, tolls,
weakening feudal ties, and corporate privileges. On the fiscal side, emerging
economic liberalism arose over ground already thoroughly plowed by mercan-
tilism (Ardant 1981, p. 182, Leng 2013, pp. 97–116).
The territorial State that emerges in the modern age will have to relate to the
market as a natural and supreme element capable of identifying, rightly or
wrongly the economic policies undertaken.3 The market, however, is not a nat-
ural, stateless, and impartial element but rather responds to a system of rules
sanctioned by human activity and is inherently imperfect and corrupted by
ideology. In the market, economic forces can freely relate to each other, giving
rise to a perfect place of exchange only in such an economic anarchy that no
coordinated human activity can realistically operate.
The capitalist market has been delineated since the medieval era thanks to a
constant opposition between the emerging State, Catholic morality and ethics,
and rising bourgeois forces: it comes not from natural law but from positive law
shaped by this constant and fruitful opposition among social forces (De Madd-
alena and Kellenbenz 1986). Thus, the market is not neutral but expresses the
rules of the one who controls the world-economy in a given historical period.
Reforms, then, are proposed within the framework of the most seductive
liberalism (i.e., egalitarian for all economic actors in the marketplace) but carry
with them some of the vices inherent in mercantilism, such as the ability to
avail oneself of extra-economic advantages to extract a larger share of profit.
Why does the liberalist creed remain so attractive to semi-peripheral coun-
tries? Because they believe they can benefit directly from it in terms of eco-
nomic power and material prosperity. They are partly persuaded that the
meritorious value of liberalism works perfectly well, with British power emerg-
ing as a successful model to follow. However, the starting levels and the degree
of technological development differ. It is a marathon race with competitors,
such as Britain, starting halfway to the finish line.
In principle, the classical theoretical system aims to pillory economic pre-
varication in favor of a model based on absolute advantages. It allows for har-
monious integration among countries by freeing economic development from
political and military overbearance. In essence, the enrichment of all those
involved is extolled in the new system. Market globalization is thus seen as an

inevitable factor for European capitalist states that can enrich themselves not
through the impoverishment of others, as Michel Foucault (2005, pp. 57–58)
argues, but through a form of collective and undefined enrichment. The world,
especially the non-European world, is thus called upon to gather around
Europe to exchange in a market constructed according to the rules of the cap-
italistically stronger countries. The letters, of course, are located in the geo-
graphical area of northwestern Europe, headed first by Great Britain and then
by the United States.
Thus, a school of thought comes into being that sees in the rules of the
competition and absolute advantage (later compared by Ricardo) the deus ex
machina for the achievement of wealth and modern economic development. By
disentangling the latter from theoretical prevarication, the classical system pro-
vides on paper the capability of all countries to enrich themselves by benefiting
from their local advantages.
However, this theory must also be defined in terms of how much the starting
point of each State counts with the others in the race toward capitalist compe-
tition. Here we find that the economic model spawned by the classical theory is
nothing more than a structure prodigal in conferring to the stronger country
many advantages derived from a world-economy free of customs barriers and
predisposed, practically and morally, to accept the domination of the hegem-
onic power. The latter, indeed, is the one that boasts on the whole more abso-
lute and comparative advantages than the other countries progressively
integrated into the world-economy.4 Winning the battle of ideas is far more
profitable, crucial, and lasting than imposing such a modus pensandi and oper-
andi by force of arms. The dominance of individual liberty over collective lib-
erty owes much to the philosopher John Locke (1632–1704) (1691), especially
regarding the supremacy of law and respect for natural rights, even in terms of
recognizing private property. Thus, individual liberty is transformed into the
freedom of the fittest thanks to the new rules imposed and guaranteed by the
hegemonic capitalist State. Property and accumulation rights are improved,
reformulated, and shaped as a value of national prosperity (Freeden 2015,
p. 42). The new concept of private property becomes disentangled from politi-
cal power through the extension of newly born bourgeois jurisprudence. The
sovereign is constrained from taking any unilateral action. The new law confers
legitimacy on the ruler only if he abides by the new rules. Thus violating private
property becomes a violation of one’s authority (Prodi 2009, p. 195).
Natural law asserts itself as a universal value. It replaces a concept of inter-
national law based on the standard of civilization, not reciprocity. This change
has profound effects on the treatment of countries in the semi-periphery. It
justifies, for example, the signing of unequal treaties and the demand for extra-
territoriality rights (Horowitz 2004).
More than Adam Smith, David Ricardo succeeds in understanding and
grasping the causes and consequences of such transformations and in outlin-
ing the aforementioned structure. Indeed, Ricardo, as Alessandro Roncaglia
(2006, p. 195) points out, takes from Smith the form of the economic system
that essentially supports a policy favorable to capitalist development. How-
ever, compared to Smith, the British financier argues that if perfect interna-
tional mobility of inputs and outputs (what we now call economic
globalization) could be established, the international market would become
equal to the domestic market. At the same time, individual countries become
like regions of the same state, and to maximize global and national wealth,
freedom of trade in goods and services alone is no longer sufficient (Magliulo
2022). Ricardo is the first to outline a development policy whose main objec-
tive is to sustain profits with the ultimate goal of reactivating the process of
capital accumulation. As we will see later when discussing the Corn Laws,
such thinking is to be placed in a historical context where the management of
British customs policy must reckon with the continental blockade during the
long Napoleonic wars.
Thomas Piketty (2014, pp. 24–25) states that Karl Marx goes beyond David
Ricardo’s ‘rarity principle’ and ‘value of capital’. Since it is industrial capital,
and later also financial capital, in theory it can accumulate unlimitedly, giving
rise to the so-called principle of infinite accumulation. In essence, with national
saturation of the rate of return on capital, one can take two directions: either
find new forms of profitable employment or act indirectly on workers’ wages.
Schumpeter, for his part, observed how, when capital is prevented from
freely finding channels of employment and profit abroad, military intervention
becomes a viableoption in the deck of cards available to governments of capi-
talist states. For the Austrian economist, it is already clear how it is enough for
the industry of the conquering state to exceed that of the vanquished state in
capital forces, organization, capacity, and awareness of its value, for one to
treat the subjugated country in a manner analogous to a colony even if one is
forced to bargain with particularly powerful local élites (Schumpeter 1981,
pp. 89–90). Such bargaining often turns into a common purpose conducive to
the extension of the capitalist market.
Putting such a classical theory into practice by an underdeveloped country
through a reformist process means accepting a theory of advantages that
already confines it to a second-ranking position vis-à-vis the main hegemonic
power and advanced capitalist states. According to early classical economists,
British free traders developed a model capable of theoretically eradicating
direct aggression, even armed aggression, by subjecting it to economic law
(Den Otter 2007). For example, the so-called ‘imperialism of free trade’, a sys-
tem that forsakes the more violent mechanisms of mercantilism, leaving it to
new regulations (rather than to the sword) to achieve the economic openness
congenial to the interests of the new rising capitalist and mercantile class (Platt
1968a; De Zwart and Van Zanden 2018). The colonization of foreign markets
is juxtaposed with the sense of a civilizing mission that brings with it the values
of wealth creation, rationality, and individualism (Freeden 2015, p. 42). These
principles are presented as new scientific values for achieving economic suc-
cess. However, as Keynes (1926) reminds us, the self-interest typical of this
rational individualism, enlightened as it may be, only sometimes operates in

the public interest.
In Britain, however, some diversions emerge regarding the modus operandi
to be adopted for the assertion and preservation in omne tempus of its role as a
hegemonic power. The discussions revolve around the kind of economic policy
to be adopted, especially toward third countries, those destined to receive the
excess production of goods and capital.
Thus the underlying concept is to allow economic development not through
actions typical of war capitalism, but through a far more natural and harmo-
nious process. As mentioned earlier, the starting point plays a pivotal and deci-
sive role. For example, William Pitt’s rise to power in Britain in the late
eighteenth and early nineteenth centuries coincides with the internal-driven
parliamentary and administrative reforms’ implementation phase, which
became crucial to an economic system, increasingly devoted to free trade and
capable of promoting a kind of trade empire (Evans 1999, p. 84). For example,
significant customs and trade system reforms were introduced (Semmel 1970,
pp. 31, 41). The transformations aimed at changing the British political-
institutional face by imposing a new social order based on the rise of the capi-
talist bourgeoisie (Platt 1968b, p. 85).
Thus, the economic order constituted from the nineteenth century onward
can be regarded as liberal insofar as it is based on the free market and the non-
discrimination of economic actors operating within it.5 To flourish, however,
this order requires the watchful presence of a hegemonic power to ensure its
proper functioning. However, to guarantee this order, hegemonic power advo-
cates a dual and divergent action to draw as many states as possible into its
orbit. They, in turn, become co-interested in keeping such a system functioning
and operational because, by it, they legitimize their own power and interna-
tional position.
The hegemonic State pursues two divergent policies to attract more countries
into its zone of international influence. In terms of the great powers, the leading
State follows a soft power policy-making. It seeks to attract such countries by
leveraging the prestige of its hegemonic-led role and its status in the interna-
tional political order. In contrast, in the countries of the semi-periphery, soft
power is joined by elements typical of hard power, that is, actions that do not
fail to consider direct coercion, including military force (Gilpin 1987, pp. 72–73).
However, the new liberal international order, to express its maximum poten-
tial, requires specific temporal stability, which cannot be guaranteed merely by
the military force of the hegemonic power. All adhering countries must accept
and embrace the rules of the system. Robert Gilpin (1987, p. 81) does not
expressly speak of reforms aimed to this end, but rather of ‘structural changes’.
This is a slight change in perspective. The institutionalization of such an order
involves promoting a series of institutional changes in the acquisition coun-
tries, such as social institutions, property rights, the division of labor, and the
rules governing economic affairs. These ‘reforms’ are essential for the liberal
market to continue actively functioning.
Moreover, institutional reforms are the most decisive in forcing the opera-
tion of a new order. That is why there is always some form of resistance to their
implementation. According to Albert O. Hirschman, the old system to be
replaced does not disappear altogether when reforms are implemented. How-
ever, liberal-capitalist external reformism tries hard to eliminate pre-existing
institutions, rules, and ways of doing things in order to establish as homogene-
ous a model as possible within the capitalist world-economy arena (Hirschman
1991, p. 126).
Thus far, we have observed the institutional framework within which the
hegemonic power operates. However, the latter cannot control every eco-
nomic aspect acting in the market. Its task is mainly to define the ‘rules of
engagement’ allowing the free expression of market forces within the consti-
tuted system. Indeed, they decide on the trade policies and economic trans-
actions to be pursued. According to Ruggie (1982), these rules are sanctioned
by interests called social purpose, that is, by those social groups with the
highest interest in said trade deals. We are referring here to capitalist élites
(Gilpin 1987, p. 86).
In essence, the hegemonic power defines the basket of rules of the interna-
tional liberal order that it maintains through the threat of military force and
the persuasive force of ideas. However, within it, fluid trade relations are estab-
lished by dominant élites acting in the anti-market and able to manage and
unravel the complex mechanism of credit.
2.3 Differences between liberal-capitalist internal and external reforms

Once the hegemonic class has achieved power, a profound transformation of
society begins. Picking up on the above analysis the formation of the British
Liberal Party, as a synthesis of Whig and radical thought, becomes the key to
understanding and fleshing out liberal reformism.
The battle for internal-driven liberal-capitalistic reforms began in the 1820s
(with the Merchants’ Petition) (Brenner 2020), moved on to the Reform Act of
1832, and arrived at the Anti-Corn Law League (between 1836 and 1846),
which aimed at introducing laissez-faire policies far more vigorous than those
envisioned by Adam Smith and David Ricardo (Grampp 1987).6 Indeed, the
latter noted how abolishing the Corn Laws would be essential to perpetuating
British industrial domination. Certainly, it is well known how the British finan-
cier saw the possibility of avoiding an increase in wages by removing the Corn
Laws, given the possible drop in food prices. It would have increased the share
of capital accumulation and the reinvestment of part of it into the domestic
economy. At the same time, this would have avoided immobilizing capital in
public debt by investing it in high-yielding private productive activities. To
achieve this goal, Ricardo joined the parliamentary movement toward the
reform of 1832, which granted more power of representation to the industrial
regions to the detriment of the political power hitherto held by landed interests
(Dillard 1978).
The abolition of the Corn Laws thus marked the final triumph of capitalist
bourgeois forces over British landowners and a more national than interna-
tional view of the economy (Fulcher 2015, p. 40). Unity among all British
bourgeois forces, both those operating in the anti-market and those working
primarily in the domestic market, that is, the market economy, is essential to
arriving at this positive result. Britain’s financial, mercantile, and industrial
élites are allied with the petite bourgeoisie and middle class based on claims of
much-coveted individual freedoms. It is primarily a political challenge to the
old land-agrarian ruling class that still holds much of the power. The upper
bourgeoisie is particularly interested in the benefits it can gain in terms of eco-
nomic freedoms. The support of these élites for those political freedoms sup-
ported by the bourgeois base of society is negotiated to achieve a payoff: a
green light for the desired economic freedoms.
What takes place in England is the transition from the domination of one
social group over another without going through a revolution but rather
through reformism. It is a transformative process that enables the country to
accept the new capitalist-led system as a development process for the whole
society. This ability is also demonstrated by the fact that Britain has been able
to hollow out and weaken even the Chartist movement that wants to evoke for
itself certain political rights and thus the capacity to economically influence
even the newly emerging classes (De Rosa 1953; Thompson 1984, Pickering
2003). Britain is in a hegemonic position that allows it to reap extensive bene-
fits in terms of accumulation and social stability. Although the British State
distributes the proceeds of industrialization unequally, the country’s ability to
attract investment and business potential managed to keep employment and
profitability at an acceptable level. The small and middle classes, in addition to
the working class, can benefit from a small portion of the entire wealth availa-
ble. Granting them some wealth to defend themselves was the key to avoiding
revolution. The latter is not the only way to improve one’s material living con-
ditions. Externalizing costs to maintain domestic social peace will also be one
of the reasons for the turn toward imperialist policies (McGowan and Kordan
1981). Cecil Rhodes notes that imperialism is crucial to maintaining internal
peace by allowing fertile land to be found for the surplus British population
while providing for the opening of new markets. According to Rhodes, the
Empire is a matter of bread and butter; to avoid civil war, the British had to
become imperialists (Beaud 2001, pp. 159–160).
Thus did the British State and hegemonic class shape the capitalist world-
economy under the ideological framework of liberal capitalism. British suc-
cess, then, was not only the ability to impose by force and persuasion an
economic model that led London to excel in international trade and finance,
but also to pass off this laissez-faire policy-making as a fundamental prerequi-
site for the welfare of the whole society rather than a smaller group of individ-
uals (Schonhardt-Bailey 2006, pp. 14, 76–77).
Free trade is the first prerequisite to opening up foreign economies to the
capitalist world-economy. Once a country joins the new international market,
it will be led to adopt a whole series of reforms to adapt to external inputs,

often from the forces acting in the anti-market.
The new ideological, material, and moral force expressed by the rising bour-
geoisie is synthesized and encapsulated in the new constitutional political
forms that are going to be institutionalized in the European world (with more
ease) and then in the non-European world (with more difficulty and often with
little success). According to Robert Heilbroner (2001, p. 73), it was only in the
eighteenth century that the capitalist social relations regime fully institutional-
ized itself in Europe. Clear constitutional rules were enshrined that limited
State power, such as violating the individual’s private space or the possibility of
requisitioning property. Within this regulatory framework, the foundations of
the liberal political order are laid.
Far from being neutral, these reforms bolster the construction of a new kind
of State favorable to capitalist relations. They limited and prevented any State
actions against bourgeois interests. Parliament can be seen as a system of guar-
antee and control over the act of the sovereign. Except for Great Britain (whose
constitutional tradition owes much to the Magna Carta of 1215 and especially
the Glorious Revolution of 1688), the strength of the newly born rising bour-
geois class is defined through the limitation of the absolute powers of the sov-
ereign and the recognition of liberal and liberalist demands. For example, the
newly emerging rule of law enshrines private property as a fundamental right
(especially land ownership that can be used as collateral for raising loans)
(Hodgson 2023, pp. 152–153) and, therefore, untouchable by political-state
authority (Kocka 2016, p. 104). Capitalist property is a natural right that
implies the broadest economic freedom. At the same time, the State is prohib-
ited from intervening in a market that is now increasingly conceived as self-
sufficient. However, the sovereign authority must retain the ability to supervise
in order to prevent any distortions that would work to the disadvantage of the
forces of capital itself (Matteucci 1975, p. 31).
According to class economists, the new bourgeois prosperity can be guaran-
teed by respecting the tenets of classical economic policy. Therefore, the rela-
tive international mobility of factors of production must be ensured (Magliulo
2022). In practice, however, nothing can be left to chance. The advocacy of free
trade in Britain is identified as a solid political movement based on the need –
inspired by some aspects of Tucker, Smith, and Ricardo’s thoughts – to estab-
lish a free trade policy as the backbone of British politics.
The Reform Act of 1832 also sanctioned a process of domestic economic
reform aimed at fostering the free-trade vocation of the new economic forces
that were increasingly replacing the old ruling landed aristocracy. In essence,
Britain is set to shape its institutions to accept and enshrine the new liberal-
capitalist social order (MacDonagh 1958; Hobsbawm 1972, pp. 131, 261). It is
from this perspective that we must consider the abolition of the Corn Laws,
that is, the willingness to strike down any protectionist policies that might limit
British commercial dominance centered on the global export of its manufac-
tured goods worldwide. The country is willing to sacrifice the privileges of the
agricultural system, sheltered from outside competition, in order to stimulate

modern capitalist industry.
We can thus trace the origins of Britain’s internal-driven reforms to its
attempt to halt the fall in the profit rate caused by the depression affecting the
country following the physiological drop in demand after the Napoleonic Wars
(Rostow 1942; Holderness 1971, pp. 185–186; Crouzet 1990, p. 207). Richard
Cobden and John Bright were the leading promoters of these liberalist policies
inside and outside Parliament (Cain 1979; Ryan 2012, p. 79). The official slo-
gan of the liberal order of the time can be summarized as peace, less govern-
ment spending, and reform. According to Friedrich von Hayek (2012, p. 36),
however, the term reform means the abolition of old abuses and privileges
rather than the expansion of democracy.7 Thus, it is not aimed at increasing
civil equality but rather the ability of the upper bourgeois forces to control the
State. Internal-driven reformism, therefore, tends to confer the maximum hold
of the new hegemonic class over the rest of society through the extensive use of
the law. However, the regulatory instruments adopted simultaneously protect
the rest of society from the absolutist tendencies of the new English ruling
class (Thompson 1975; Acemoglu and Robinson 2012, p. 313).
Unlike the British case, the liberal-capitalist-inspired reformism applied in
semi-peripheral countries very often has a clear externally influenced origin.
Reforms, in this case, are applied by leveraging different factors, such as eco-
nomic influence, cultural appeal, and political and even military pressures. The
reforms promoted endow the forces that gravitate around the world of indus-
try, commerce, and finance with an objective advantage. To apply them suc-
cessfully, however, all the forces in the State (or at least the most powerful and
influential such as the political, diplomatic, and military ones) must directly
support, or at least not be hostile to, these transformations. Institutional
changes are required (such as protection of private property and profits, free-
dom and security of contracts, rationalization of law and judicial administra-
tion, etc.), which are key to creating a socio-political-economic environment
conducive to the principle of capital accumulation (Pellicani 2013, pp. 43–44).
The time factor is a crucial prerequisite for introducing these changes in the
semi-periphery. The further the third country is from the sphere of economic
and commercial domination of the hegemonic power, the easier it is to require
the application of rules still unknown or not fully understood. Thus, the time
between the application of such rules and the realization of their destructive
potential for domestic social stability (especially for those lacking sufficient
preparation to adhere to a modern capitalist system) is adequate for the eco-
nomically and commercially stronger State to obtain a comparative structural
advantage.
Thus, the need to block the development of real or supposed competitors
emerges in Britain to exploit their potential wealth, which is turned into a
source of profit and growth for one’s businesses and the profitability of one’s
capital.
Reforms are thus hidden behind the liberal proselytism characteristic of

nineteenth-century England, which leverages the spirit of reproduction of
bourgeois values and civilization (Scanlan 2020, p. 161).8
Every action of the hegemonic power is protected by a moral respectability
that makes it feel endowed with a civilizing mission blessed by destiny. The
principle of predestination becomes a value, and with it, all actions are aimed
at bringing modernization to other people. Thus, the reforms promoted in
these countries are presented as an instrument of this process. Promoting these
reforms, however, means failing to respect the internationally recognized val-
ues of sovereignty. The principle of balance and non-interference at the Euro-
pean level is not considered when it involves non-European (or non-) sovereign
states (Stanziani 2018, 2023). As Giovanni Arrighi points out, England’s access
to non-European resources allows it to manipulate and alter this balance to its
own advantage in order to dominate other state entities. In particular, coun-
tries in the semi-periphery are excluded from the system of protections proper
to states identified as fully sovereign (Arrighi and Silver 2006, pp. 107–108).
Indeed, they are accused of being incapable of applying forms of government
understood as independent State organs. The fact that the major capitalist or
imperialist nations must provide such protection makes the principle of sover-
eignty and its attached protections a discretionary concept in the hands of the
major European powers.
2.4 Fear of falling profit rate and the active role of the capitalist State
The growing fear of a possible capital profit fall in an advanced capitalist
country is more than enough of an incentive for the capitalist élite to use the
institutions of the nation-state to prevent its downhill trajectory. Thus, the cap-
italist nation-state becomes the mechanism for reversing this forthcoming fall.
However, to achieve this, the State must also use the extra-economic tools at its
disposal, such as diplomacy and military force. Hence, the territorial state uses
economic problems to follow up a policy of military aggression or diplomatic
struggle in order to extend its influence over other countries.
From an economic integration perspective, in terms of the eighteenth-
century rich country-poor country debate, James Oswald and Josiah Tucker
outlined some characteristics inherent in the intersection of these interests.
They analyzed the forced integration between two non-communicating or
opposing economic systems shaped according to the rules of the stronger
country. Indeed, the two scholars argue that the inflow of money due to a trade
surplus would not lead to a competitive disadvantage for wealthier nations (as
contended by David Hume and Henry Home Kames). On the contrary, such a
flow would lead to lower prices for industrial goods due to more significant
technological developments made possible by greater credit availability (Krauss
1997; Schumacher 2016). Thus ‘equal’ competition between two countries with
different levels of development within the liberalist market would increasingly
confine the less developed country to a stable position of underdevelopment

for the benefit of the stronger country (Arghiri 1972; Gunder Frank 2004).
Suppose the availability of the factor of production between an advanced
and a less advanced country were the same. In that case, the technological dif-
ference gives a sine die advantage to the more developed country. The country
possessing this know-how can gain a comparative advantage in producing a
given product. Through free trade agreements, it is possible to enforce this
advantage with trading partners by exporting the product that holds a techno-
logical edge. The demand for this product increases the demand for capital in
the developed country just enough to increase its production.
We thus witness an increase in profits and a gradual decrease in wages. If the
less developed country relies on such a high-technology product (such as textile
production machinery), we observe an upward salary and a downward profit
trend. There is thus an increase in trade due to the mobility of factors of pro-
duction, while at the same time, however, there is for the less wealthy country a
recognition of its status as a second-rank industrial nation (Markusen 1983).
According to David Ricardo, there is an obvious necessity to increase
dependence on foreign trade in order to counteract the fall in the profit rate at
home (a thesis that was also partly accepted by the well-known James Mill
(1861) (Winch 1963). According to Mill, there is an advantage for the countries
of Africa and Asia in accepting the principles of English culture. This would
entail introducing foreign capital into the area capable of increasing produc-
tion and stimulating the pursuit of economically led virtuous and stimulating
behavior. In short, it would promote progress (Ferguson 2009, pp. 123–124).
Instead, according to the Wakefield school, the colonies were crucial to ena-
bling the absorption of the extra-available investment flow (Semmel 1970,
p. 10). Indeed, it is no surprise that the increase in industrial production clashed
with the narrowness of the domestic market. That is why the capitalist-
industrial and mercantile élites demanded a strengthening of private and pub-
lic spending or an expansion of the market even worldwide (Luzzatto 1960,
p. 280). The program of the so-called Colonial Reformers is summarized in
their need to create an Empire comprising the middle class that would replace
the old colonial system in place. Achieving this goal means adopting policies
of economic and primarily commercial openness. The aim was precisely to
abolish the Corn Laws in 1846 and the Navigation Act of 1849 to strengthen
Britain’s role as the so-called world’s workshop (Morrell 1966, p. 11; Fay 2017).
Edward Gibbon Wakefield (1796–1862) wanted to allow the mother country to
escape from the grip of the falling rate of profit (Wakefield 1849). The colonies
would serve this purpose: to accommodate the excess capital from Britain to
keep the profitability of capital high (Dobb 1962, p. 23; Piterberg and Veracini
2015). More scathingly, Wakefield describes how the powers of private prop-
erty and the State were to be used to exclude workers from easy access to free
land to preserve a pocket of wage laborers for capitalist exploitation.9 At this
point, the bourgeoisie was forced to acknowledge in its colonization program
what it was trying to hide at home, namely, that wage labor and capital are
both based on the forced separation of the worker from control over the means
of production (Harvey 2018, pp. 104–105).
Thus, according to the Colonial Reformers, colonies serve to prevent a
decline in the rate of profit through a transformation in which the mother
country (i.e., the State) plays a significant role in forcing or not forcing the
adoption of a regulatory framework conducive to this end (Harris and La
Croix 2020). In more general terms, the issue of integrating colonies within the
global capitalist system is related to the ability to confiscate land and conscript
labor, through direct State action, within the circuits of capital. What is crucial
is to avoid a blockage of capitalist expansion on the ground (Fraser 2016). The
need to create a kind of ‘middle-class empire’ becomes the central and identi-
fying element of this current of thought. Such action is determined to make
this ‘middle class’ accept the benefits of free trade as the source of its wealth.
According to the above-mentioned theory, the hegemonic State, through its
monopoly of force, should impose a capitalist transformation on the colonies
under its control.
The return and profitable use of capital is ensured through methods of
political-led interference. This attitude is made possible because the colonies
are not accorded the same public values guaranteed at home. Therefore, the
optional use of force, fraud, and anti-liberal distortions of monopoly are not
considered abuses but rather acceptable and often desired practices under the
umbrella of the ‘necessary civilization’ of non-European peoples (Schmitt 2003).
However, the system described thus far must define the goal we have out-
lined earlier. The State’s meddling, via its influential coercive role, breaks down
the concept of non-violent adoption of liberal-capitalist reforms. Indeed, the
theories listed above see the creation of a middle-class empire through the
direct employment of the sovereign State. The latter can impose, even by mili-
tary force, the necessary transformations. Wakefield used the criticisms of
commercial society advanced by Malthus to prove how Britain needed a for-
eign trading system and settlement colonies to overcome the problems caused
by capital competition worldwide. The fear is always that of incurring a cri-
sis of overproduction and a consequent fall in profit rate (Semmel 1970,
pp. 75, 102).10
Conversely, Montesquieu eloquently delineated the British modus operandi
centered on the importance of economic activities over the remaining aspects
of human society. The noted French intellectual recalls how Britain promoted
distant settlements to expand its trade rather than its dominance. In return,
according to Montesquieu, London would give the inhabitants of the colonies
its form of government. The prosperity brought about by the government
would encourage settlement even inland (Losurdo 2005, p. 10). Forceful action
is thus also justified in exchange for a greater good that is based on a purely
European-British – and, indeed, not indigenous – value base.
Therefore, it is easy to see how the reformist process is carried out through
force within the colonies. However, for the semi-peripheral countries that do
not experience direct military control by the colonial powers, the situation is
more complex (Cunningham Wood 1983). The reforms must be imposed

through persuasive action without resorting to military or police assistance.
This does not mean, however, that the hegemonic power cannot show its
military strength as a warning. To this show of force, which always remains
a powerful feature, the capitalist State must associate with equal determina-
tion the power of politics, diplomacy, example, propaganda, but also black-
mail (Offe 1977).
Following the English Liberal Revolution and according to the newly rising
liberal doctrine, the colonies lost, in theory, their appeal among many British
politicians. It is no coincidence that, according to Conservative Benjamin Dis-
raeli, such territories no longer serve the project of economic domination.
They are no more than a chain around the country’s neck and, therefore, must
become an integral and autonomous part of a unitary empire, a kind of cus-
toms community (Harris 1885).
The idea of getting rid of the ‘direct’ colonies is a complex thesis. According
to Shield J. Nicholson, Adam Smith would, in some ways, have anticipated
Joseph Chamberlain’s ideas in advocating the replacement of the colonial sys-
tem with a new concept of Empire, which found its basis in Britain’s new com-
mercial predominance (Nicholson 1909, p. 195). Smith noted how, in more
advanced economies, the rate of profit and consequent capital accumulation
tend naturally and physiologically to decline compared to developing countries
where it remains higher (Magliulo 2022). For this reason, the need to keep the
rate of profit at acceptable levels increasingly became a political issue as eco-
nomic and financial élites took a firmer hold on power in Britain following the
Reform Act of 1832 and the abolition of the Corn Laws. The haute bourgeoi-
sie, thus becoming aware of its strength, abandoned some of its mercantilist-
inspiring practices and theses to support those of free trade. These ideas are
also supported by a moral force based on the appeal of the newly born ideas of
liberty, law, and property (Beaud 2002, p. 54).
What happened in England was a prelude to the transformations in other
Western European countries. The economic crisis of 1847 and the revolutions
of 1848 can be considered the first significant crisis of modern capitalism, one
not confined exclusively to the agrarian sector but extending also to the indus-
trial and financial ones (Berger and Spoerer 2001). According to Marx, this
economic contraction is caused by the failure to use capital profitably; that is,
it is a crisis of overproduction (Clarke 2016, p. 98). This element heightens the
awareness in the haute bourgeoisie, now masters of political power in more
and more European states, of the need to avoid a profit-rate downturn by fall-
ing into further overproduction crises. The crisis paves the way for a new rear-
rangement of world trade. It ushers in one of the most remarkable phases of
trade openness in the nineteenth century, beginning with the abolition of the
Corn Laws, via the Cobden-Chevalier Agreement of 1860, and ending abruptly
with the outbreak of the Great Depression of 1873.
For example, England’s export industry, capital, and trade were forced to
redefine certain geographical areas of activity, thus encouraging the emergence
of new markets, especially to the benefit of the colonial system. England had
the advantage of offloading costs onto the vast colonial Empire to alleviate the
budget deficit. The English balance of payments surplus, as opposed to the
trade deficit, stemmed from the profits accumulated by British banks and
financial institutions through the outflow of capital investment. The inflow of
profit capital was pivotal in balancing existing fiscal imbalances (Rosenberg
1980, pp. 115, 120).
Following the crisis of 1847–1848, capital began to move increasingly freely
within the expanding world-economy. This occurred thanks to the financial
and economic trade spiderweb formed after the signing of free trade agree-
ments. The consequence was a gradual de-nationalization of capital and its
free placement in countries and territories offering higher returns (Silver and
Slater 2010, p. 204). Those who benefit directly from such connections are the
central and peripheral élites with access to capital.11
However, peripheral élites must allow their home semi-peripheral countries
to accept the new rules of the liberal-capitalist economy in order to maximize
the profit share of capital mobility and employment. The aim was to transform
the semi-peripheral country into a full-fledged capitalist economy. The capital-
ist hegemonic State intervenes at this point to facilitate this transition through
a combined effort of political, economic, and diplomatic persuasion. Indeed,
the ultimate goal is to try to give local capitalist élites greater political-decisional
power within their respective societies. Thus, we see a transnational class alli-
ance that places the new free-trade hegemonic State at the center of this change
process. Profit-seeking is the glue that holds this alliance together. To legitimize
such transformations in the interest of the entire social body and not only the
bourgeoisie, the inclusive message of the liberalist doctrine is promoted (Rob-
inson and Harris 2000). As Antonio Gramsci reminds us, bourgeois economics
freed domestic markets
from all the mercantile fetters that clogged up trade, that prevented pro-
duction from transforming and expanding. […] In Anglo-Saxon coun-
tries, it went further; […] it decentralized the states, unbureaucratized
them: production, not continually undermined by non-economic forces
[…], and spilled heaps of goods and wealth into world markets.12
2.5 Free trade imperialism, war capitalism, or reformist capitalism?

Free trade imperialism, coined by Gallagher and Robinson (1953), denotes a
whole series of power policies put in place by the hegemonic power to halt the
fall of profit rates and find new fields of capital employment abroad. According
to Charles P. Kindleberger (1975), this theory sees free trade as a means of weak-
ening any aid to sustain manufacturing production. This is especially true in the
peripheral and semi-peripheral countries of the capitalist world-economy. In
contrast, it would be harder for England to block manufacturing development in
the remaining European countries. Many Western European states enjoyed

mature political systems, considerable military strength, and full integration into
liberal-bourgeois values of respectability. It is thus easier for London to act
toward semi-peripheral countries, which, while lacking modern manufacturing,
can boast an economic structure advanced enough to become a preferential mar-
ket for its goods or those of other capitalist powers (McKeown 1989).
London expanded its reach within the ever-expanding capitalist world-
economy by choosing weaker states to dominate. These were outside the secu-
rity and balance system in place among the Great Powers and where scruples,
even moral ones, could be overridden to force openness to the market.13 At the
same time, the other major capitalist powers became global competitors in the
race toward capital accumulation through the export of manufactured goods
and investments. However, these powers became valuable allies in shaping third
countries to the rules of the international market they control. For example,
one of England’s great competitors is undoubtedly France. The French path to
internal capitalist reformism was more accidental and conflictual than Eng-
land’s because of the evident friction between the social parties (Stanziani
2012). It did not allow the transalpine country to embark on a socially harmo-
nious capitalist development process as England had. Simply look at the enor-
mous problems encountered by Jacques Turgot (1727–1781) in wanting to
reform the economy. Compared to the English situation, the French problem
was that this economic transformation process was intended to be carried out
from above, under the monarchy’s directives and control (Moore 1969,
pp. 78–79). The path to capitalism became in France a path dictated by the
great obstacles placed before it by the powerful social forces of the ancien
régime. In England, as is well known, many of these forces converted ‘peace-
fully’ to the new capitalist order under the impetus of clear economic interests.
The lack of economic revolution places France, following Braudel’s (1982,
pp. 20–21) interpretation, as the ‘brilliant second’, that is, the one moving in
the ‘second ring’ of the capitalist world-economy and enjoying the stability
granted by the hegemonic power. However, France adheres to the same frame-
work of rules by which the emerging global capitalist market is forged.
Moreover, the Paris financial market was central to foreign investment,
especially in foreign debt. Although competing in many areas with England,
France thus succeeded in finding common ground in trying to maintain the
global supremacy of that financial architecture favorable to the large-scale
employment of European capital (Bonelli 1971). Indeed, it is no coincidence
that both countries did not fail to support everyday actions aimed at promot-
ing in the semi-periphery countries those external reforms with a liberal-
capitalist character (Todd 2019).
The British model found fervent supporters in France, including the well-known
Chevalier (Todd 2005). Like its political rival, Paris created an informal empire
until 1870 through collaboration with foreign élites rather than through direct mil-
itary occupation. The so-called Champagne capitalism is based primarily on the
exercise of soft power backed, however, by military threat (Todd 2021, p. 125).
To recapitulate, before promoting free trade on a global scale, colonial

expansion for economic purposes becomes necessary for countries wishing to
achieve and sustain the industrial revolution. As Eric J. Hobsbawm (1972,
p. 45) argues, the modest ‘natural’ rate of domestic demand development is
insufficient to sustain robust industrial growth. Therefore, nations that extend
their economic influence over semi-peripheral countries sooner than others
through trade or political agreements (and in some cases even direct coloniza-
tion or otherwise) can enjoy a competitive advantage over their rivals. It is what
Britain managed to do during the eighteenth century by gaining that advan-
tage over all other European countries, allowing London to assume an advan-
tageous position as it championed the policies of openness to international
free trade.
The colonial question thus always maintains its Importance. Antonio
Gramsci emphasizes the perverse glue that binds the colonizing, and later
imperialist, power with its colonies:
[…] the Europeans acquired the colonies to arouse in them productive

forces analogous to those of their own countries so that it would be pos-
sible for an economic backbone to be formed that would give rise to con-
sequent political and social activity. They obeyed an impulse of their
capitalism and in the colonies created capitalist enterprises, but not a
capitalist society.14
Not all countries, territories, and states around the globe fall into this category.
The process of military colonization, typical of so-called ‘war capitalism’,
imposes a policy of exploitation generally independent of local reality,
exploited only for resources and cheap labor. Different is the case concerning
the well-known ‘free trade imperialism’, which requires instead a kind of min-
imal social dynamism independently receptive to grasping economic impulses
from abroad. There is a need for the local ruling classes to have confidence and
basic knowledge of economic tools and technologies, that is, those basic struc-
tures such as a monetary, credit, and trade system (Pradella 2013). Daniel
Defoe (1993, pp. 46–47), recounting the adventures of the well-known British
navigator Walter Raleigh (1552/1554–1618), highlights what territories the
British crown, as early as the second half of the sixteenth century, must strive
to conquer:
trying to subjugate this part of the world, inhabited by millions of

people, seems especially commendable for a commercial company: the
abundance of the population constitutes, indeed, the source of com-
merce, since to it is due the consumption of manufactured goods. And
there is no doubt that within a few years, the consumption of our
products, and of every other kind of European merchandise, to clothe
such an incalculable number of people, masters of large quantities of
gold to shell out in exchange, would be enormously greater than the
present amount of our exports to Spain, Portugal, Italy, and Turkey

combined. Were they, as was the case in North America, poor peoples,
whose clothing consists almost only of blankets, cotton cloths, and
gauze, or were they few and estranged from each other and dwelt far
away in abject solitude, like the negroes of Africa: it might then be
supposed that the maximum profit of our trade would be reduced to a
few trifles […].
Walter Raleigh thus highlights how, during the era of ‘war capitalism’ and
more classical mercantilism, it was necessary to take possession of territories
capable of purchasing imported goods. According to Immanuel Wallerstein
(2004a, p. 50), capitalists do not need free markets but only partially liberated
ones. Such territories become pivotal in absorbing the goods’ overproduction
and capital from the major industrial powers (Wallerstein 1974).
The phase known as ‘free trade imperialism’ is based on the ability to create
an informal empire that is crucial to lowering the political and social costs of
direct military occupation (Porter, Louis 1999). Free trade made neighboring
countries types of colonies for Britain without imposing any direct govern-
mental responsibility, yet kept them at an earlier stage of development.15 The
hegemonic power thus benefits greatly by integrating the third country into the
global capitalist market. It allows capital to avoid a fall in the rate of profit,
thus avoiding a crisis of overproduction and, simultaneously, the high costs of
direct military domination.
According to Alan Ryan (2004, pp. 31–37), if liberalism is inherently
imperialist, the liberal state could become imperial once it imposed its own
rules within the global market (Farnie 1979, p. 44). The connection between
the hegemonic power and the semi-peripheral states is realized between the
respective élites acting in the anti-market. It is a class alliance that sees the
accumulation of capital, and its free circulation worldwide, as the glue of
understanding.
As we have seen, peripheral capitalist élites often hold a second-ranking
position due to the weak state in which they reside and their lack of direct
access to the levers of political power. In addition to extending their values,
their purpose is to reach the top of the social pyramid. Reform thus becomes
the necessary tool for this to occur. Likewise, they enable the harmonious inte-
gration of the local country into the international market shaped by the rules
of the hegemonic power. The capitalist élites of the two countries impose,
influence, or accept, with varying degrees of understanding, a whole series of
top-down transformations crucial to reproducing the social order most pleas-
ing to them.
In conclusion, free trade imperialism is only conceivable by accepting the
transformation and adaptation of said societies to the market shaped by the
hegemonic power. Therefore, the reforms introduced are a sine qua non for any
policy of informal domination.
Notes
1 Achieving clear political objectives is instrumental in gaining acceptance of an eco-
nomic model favorable to those élites acting in the anti-market. Such a policy can
also be seen in the decolonization phase in the second half of the twentieth century
(Fieldhouse 1996, p. 43).
2 According to Przeworski and Wallerstein (1988), globalization shaped by the liber-
alist economic model reduces taxation on capital as a highly mobile factor to trans-
fer it to labor, which is far less mobile. Intrinsically, the reform also promotes
economic inequality.
3 According to the view of Marxist historian Eric Hobsbawm (1990, p. 31), the cri-
tique of the mercantilist system since Adam Smith is identified with the condemna-
tion of that system of national economies that underlies the very structure of the
nation-state. According to this interpretation, the Scottish philosopher, in his new
economic development theory, could leave no room for the nation as such.
4 Friedrich List supports this theory. He believes that the free trade policies put in
place by Britain are a clear expression of the economic policy of the fittest (List
1856; Ince 2016; Hagemann, Seiter, and Wendler 2019).
5 According to Robert Gilpin (1987), the global market can function without a he-
gemonic power, as it had prior to the nineteenth century. In such a system, mercan-
tilist competition and nationalist policies tend to predominate. However, this
interpretation must take into account that in the modern age, Portugal and Spain
played a quasi-hegemonic role in influencing international trade rules, routes, and
practices (Cardim et al. 2012).
6 We believe that the internal-driven financial and institutional reforms that began
due to the Glorious Revolution in the seventeenth century are certainly to be con-
sidered capitalist but not entirely ‘liberal’. The State, indeed has not yet been ‘ho-
mogenized’ by the universalistic- rational and liberal- capitalistic-
bourgeois
hegemony (using a Gramscian definition). For example, we must wait until the first
half of the nineteenth century to witness the abolition of the Bubble Act (1720–1825)
or the removal of limits imposed on interest rates above 5 percent (1714–1820s), etc.
(Hodgson 2023, p. 163).
7 According to the Austrian economist, democracy becomes the heart of the liberal
reform process only following the Second Reform Act of 1867.
8 This aspect of British society is also associated with the prejudice proper to so-
called ‘natural selection’ (proper to the social Darwinism of Spencer and Lubbock),
which causes significant problems in terms of morality for the British civilizing
mission and the coherence of the value of liberal theories.
9 Historian Charles S. Maier (2016) confers that interpretation according to the stud-
ies of Ugo Rabbeno (1863–1897) and Achille Loira (1857–1943).
10 Schumpeter argues how the fall in the profit rate can be fought by both innovation
and the discovery of new markets (Zanini 2000).
11 According to David McNally (1988), the evolution of modern capitalism was in-
stead the result of a change in social relations within the agrarian world, not merely
an exclusive action on the part of merchants and industrialists.
12 Gramsci A., “La lega delle Nazioni”, Il Grido del Popolo, n. 704, 19 January, 1918.
13 According to Bernard Semmel (1970), the free trade policies promoted by the man-
ufacturing powers highlight the hypocrisy of those who, once they have reached the
top of trade and industry, seek to hinder the rise of other countries through policies
of market exclusion.
14 Gramsci A., “La Guerra e le Colonie”, Il Grido del Popolo, n. 612, 15 April 1916.
15 Parliamentary Debates, 3d ser. LXXXIII, February 23, 1846, pp. 1399–1400, cited
in Wallerstein (2011, p. 120).
3 The trinity of capital
Debt, credit, money
3.1 Debt and credit: the double face of capital
3.1.1 Political premises
Public borrowing in foreign debt-denominate currency is key to understanding

the role of liberal- capitalist reforms. Foreign public debts have increased
mainly on the eve of capital outflow since the second half of the nineteen cen-
tury. Modern financial techniques, the prerogative of large global credit élites,
are necessary for managing ever-increasing public debt. Accepting credit in the
international market means taking its rules and adapting one’s economy to
what the market perceives as essential in terms of stability and management. It
involves embracing a particular managerial perspective made necessary
because borrowing in foreign debt-denominated currency imposes an eco-
nomic policy more in tune with inward-looking fiscal stability. Foreign debt
imposes compliance with extra-sovereign fiscal constraints and adopts a man-
agerial approach to foreign-sourced debt, given that it invokes regulations that
result from creditor countries’ economic evolution (Krasner 1976). A periph-
eral State incurring foreign debt requires foreign and local experts; that is, it
confers executive power, to the detriment of its sovereignty, on the financial
élites who are familiar with and speak the language of the newly emerging
rational markets. This principle becomes even more true if loan agreements are
drawn up with a gold guarantee clause. The letter also shields the lender from
any downward fluctuations in the currency in which the loan was issued (as is
well known, if a country borrows in its own national currency, it has the option
of debt monetization or pushing up inflation to reduce the real value of the
debt). The gold payment guarantee is crucial to attracting international inves-
tors while lowering the interest rate. It is primarily a political choice. Either
they receive credit at a lower cost in exchange for ceding monetary sovereignty
or keep it instead of surrendering it to the market and suffering an upward
trend in interest rates. In this debate, however, the semi-peripheral countries
are left on the sidelines of the decision-making discussions: it is capitalist
countries and financial élites who decide, primarily according to their power
and accumulation interests.
DOI: 10.4324/9781003441816-4
The trinity of capital 57
The debtor, if mainly represented by a non-capitalist State, must not only

pay what was agreed upon in the loan contract but also indirectly initiate a
transformation of its public finance according to the rules of engagement
imposed by the creditors. The debtor State carries out a process of economic
rationalization by internalizing market rules. Accordingly, the debtor’s fiscal
policy must be maintained via budgetary stability, that is, by preserving stable
macroeconomic conditions essential to not having to incur a rise, which can
become unsustainable, in interest rates. This occurred in the long wave of the
aftermath of the 1873 crisis, which resulted in many bankruptcies. Excessively
high costs for new loans, rising interest rates, and an already significant debt
burden led the Ottoman Empire and Egypt to default on interest due. Bank-
ruptcy, in turn, paved the way for calls for a broad series of reforms. The result-
ing economic shock weakened many extra-economic impediments such as
cultural resistance, national pride, moral constraints, etc. Bankruptcy places
the defaulting State in a position of inadequacy, and that State is therefore
necessarily driven to redemption. The market, inspired by the laws of the mer-
chant, such as honesty, credibility, and trustworthiness, imposes its way of
thinking about economic matters such as default (Priestland 2013).
According to Wallerstein, bankruptcy has functioned as a cleanser of the
capitalist system, forcing all economic actors to adhere more or less to the path
charted by the process of capital accumulation (Wallerstein 1983b, p. 18). For
some idea of the mindset of economic rationality about debt, read Balzac’s
1837 novel, The Greatness and Decline of César Birotteau, about a merchant
whose honor is severely damaged by his financial defaults and who regains his
lost respect and social position only by pecuniary redemption: by repaying all
his debts.
From the mid-century onward, capital flowed worldwide in search of higher
returns. Investment banks succeeded in encouraging capital mobility to foreign
states. The more investments were made in foreign public debt, the more busi-
ness, fees, and bonuses the bank earned. They profited from the intermediation
between creditor and debtor and, in doing so, increased their profits while sat-
isfying investors seeking high returns. However, the severing State encouraged
capital outflow. Sometimes, the diplomatic élite brokered deals with a borrow-
ing State in search of capital for the benefit of its capitalist élites. These two
forces press from multiple sides to obtain maximum political and economic
gain from such a financial deal. To achieve maximum results, however, the
debtor must go forward on the rationalization of state administration. From a
social order perspective, internalizing market rationality driven by the compul-
sions of debt payment leaves no room for alternative political solutions. If the
indebted or bankrupt State wants to restore its credibility, it must follow the
creditor’s rules and what market forces demand. The function of institutions
built in the debtor country (such as the Ministry of Finance, the Court of
Accounts, the Central Bank, etc.) is to institutionalize ‘rational’ and ‘modern’
management of public finance through active consociation of the peripheral
State’s institutions themselves. The same applies to countries that already have
modern economic institutions: a new economic policy generally favorable to

the interests of creditors is imposed. In both cases, the forces of the State, that
is, the judiciary and the police, actively cooperate to enforce what the market
forces indicate (and, in the case of default, those international and supra-
national institutions). The system thus reformed achieves its goal of bending
the indebted or bankrupt nation to the rules of the capitalist market. The
reformed State becomes steadily more integrated into the market, and thus its
indirect guarantor becomes interested in its preservation. This means that in
matters of debt management, there is no room for new and possible ideas that
would diverge from those in the liberal-capitalistic market. However, top-down
institutional transformations can fuel counter-movements from below in resist-
ance to the market, as Polanyi does not fail to mention, which often results in
excessive nationalism (Berberoglu 2000).
Even Alexis de Tocqueville (2011, p. 157), a keen observer of society, points
out that with the onset of a reformist process intended to change the existing
equilibrium, a concurrent phase of uncontrolled social upheaval in response to
an alteration in the current social structure may materialize. Nonetheless, the
relationship between credit and debt has become integral to the modern capi-
talist State (Ingham 2010).
The liberal State, in its various forms, becomes a powerful emerging actor
with which investors must relate, especially during the nineteenth century when
bourgeois forces assume the leadership of constituent liberal-capitalist states
such as England and France. The new social structure, breaking free from the
old ancien régime order (which, nevertheless, returns in new forms and guises
throughout the century under the political label of reactionaries), sees the new
bourgeoisie as the center of a new arrangement, whose mechanisms of pro-
gress move within the capitalist productivist framework. However, each coun-
try finds its pathway to bourgeois capitalism. In England, for example, the
bourgeoisie joins the old aristocracy that has converted to capitalism by enter-
ing into ‘parliamentary’ conflict with the old landed aristocracy (whose inter-
ests are weakened with the reform act of 1832 and then with the abolition of
the Corn Laws in 1846), while in France, the new rising bourgeoisie comes into
conflict, even by violent methods, with the old rural nobility unable to convert
(for the most part) to the new economic system. As the political system
changed, so did the debt structure, the sustainability of which now adjusted to
the change in existing social relations (Barreyre and Delalande 2020, p. 13).
New social relations based on capital emerged in England and in post-1830s
France. Private property, for instance, was a founding value of the newly born
hierarchically organized club of the self-perceived civilized nations and mod-
ern capitalist élite. The power shift from the ancien régime to liberalism also
affects the working system of public debt, now less identifiable solely with the
Crown but with the politically organized liberal State. Sovereign debt starts
becoming the collective responsibility of the society that supported the repre-
sentative State. Debt becomes of the State and thus of the social forces that
support it. However, the capitalist élites benefit more: they use the strength and
respectability of the State as the representation of a diverse social body to pro-

mote their class interests through a careful policy to ensure the payment of
debts in their interest as creditors. The capitalist class exerts pressure by lobby-
ing in the political arena to let market rationality prevail over the sovereign
autonomy of the State, an action aimed at avoiding a change in economic pol-
icy unfavorable to their interests in debt.
Debt is increasingly depoliticized and delivered into the intangible hands of
the market regulated by natural law (Stasavage 2003). From the 1850s onward,
debt becomes an instrument that involves society as a whole and not only insid-
ers in investment credit. We thus witness a progressive engagement and exten-
sion of national underwriting, known as national borrowing, which is vulgarly
called by the people ‘forced voluntary borrowing’. There is a drain of capital
from all social strata involved in the savings fever. Through extensive advertis-
ing in opinion newspapers or posters in public squares, the public is induced to
put its saved capital to profit not only in urban centers but also in suburban
towns or the countryside. On the wings of the highly successful capital-raising
set up first by the Comptoir National d’Escompte in 1848 – through the crea-
tion of joint-stock companies – and then by the Crédit Mobilier starting in
1852, in 1854, but also in 1855, the first large public loans are promoted with
great success in France and Austria (Rosenberg 1980, pp. 90–91). Citizens are
then encouraged to play an active part in the great game of accumulation. Sov-
ereign debt becomes an instrument that increasingly becomes part of the oper-
ational and financial process of increasing the profitability of capital held, often
in the form of unproductive savings (Nurkse 1951).
The whole of society becomes involved in the new politics of debt. Under
this scenario, it is the creditor bourgeois class that controls access to credit,
knows the ways of its profitable employment, and can make the most signifi-
cant profit precisely because its services are indispensable to the credit needs of
the State. The rise to power of the new bourgeois class transforms and adapts
the policies of the liberal State to its own accumulation needs, institutionaliz-
ing, as a general redemption value, economic success as the yardstick for a
coveted social position. From being despised by the continental aristocracy,
economic activity becomes essential to social climbing and prestige.
Thus the rampant bourgeois society, which after the revolutions of 1848
acquired political power in many European states, shaped the territorial State
to the interests of capital. In this remarkable ascent of modern capitalist soci-
ety, England is the nation that first succeeded in creating a capitalistically
advanced State partly through the liberation of economic forces by promul-
gating a constitution limiting the rights of the sovereign. In this institutional
landscape, the interests of creditors increasingly match those of the represent-
ative State and vice versa. Thus, the State becomes the promoter of incentives
and facilities that foster capital accumulation. The capitalist productivist
order increasingly defines the rules, morals, and ethics of the State in the eco-
nomic sphere. The changing political climate causes creditors to look with
new confidence to the State. The investor is less and less afraid of the coercive
power of the nation-state, no longer bent to the irrational choices of the sov-
ereign. The latter is now bound by the constitution and the new parliaments,
which give the sovereign the legitimacy he needs to rule: it is no longer God
who does so but the upcoming civil society and the powerful rising bourgeoi-
sie (Rubin 2017).
The State thus becomes a key player, certainly the most important but not
the only one, representing the new course of capitalist society. As we have seen
in discussing Gramsci's concept of hegemony, the new State is no longer antag-
onistic to the bourgeoisie but collaborative. This partnership bears fruit in the
consistent reduction of interest rates paid on negotiated loans: the market
lends its support to the economic policy of the nation-state (Schmelzing 2020).
Since the second half of the nineteenth century, capitalist élites have been care-
ful to maintain an advantage in the interplay of relations that bind the political
and economic worlds. Within a State that increasingly identifies with the rules
of the market, debt becomes a powerful connecting tool between the private
and public financial worlds. The sovereign authority now recognizes as yours
the rules of the financial world under the legislative umbrella defined by the
constitutional framework. It thus further exposes itself to the influence of
those who continue to finance its deficit spending. Countries in the semi-
periphery in particular will have to reckon with the growing power of financial
intermediaries. From 1820 onward, they take it upon themselves to negotiate
and guarantee underwriting by placing securities in European capital markets,
increasingly asserting their weight in terms of political influence as well. The
new capitalist State creates a murky link between political and economic
interests.
The form of representation of capitalist states begins to open up to political
ideologies that ascribe great importance to the scale of their ethical and moral
values in the economic field. This is the case with liberalism. At first, the capi-
talist élites politically control the liberal State. However, with the expansion of
the right to vote in the second half of the nineteenth century, a rupture between
the State and the bourgeois class began to materialize. One must now reckon
with the gradual rise of social classes ‘antagonistic’ to the modern system of
capital accumulation, such as the proletariat (Hobsbawm 1985). Moreover, the
turbulent rise of socialist and communist parties aims to subvert this estab-
lished order, making the clash for State control an internal matter for the par-
ties comprising the capitalist world of production. Pro-market institutional
reforms thus limit the sovereignty power of the representative State in favor of
a decision-making system and modus operandi adherent to market rationality.
3.1.2 Debt, the State, and emerging financial markets
In the ancien régime period, public debt primarily supported the monarch’s
ambitions. From the nineteenth century onward, however, it became increas-
ingly important to support the political aspirations of the citizen-voters who
determine the goals to be achieved by the sovereign country. The use or non-use
of an active public borrowing policy is conditioned by the social groups com-

prising the parliamentary majority at that time. However, with the extension of
suffrage, the harmony between the bourgeois class and the State begins to erode.
As the right to vote is extended, the economic and financial élites move toward
social conservation to safeguard that political habitat essential to the effective
management of the State in favor of capital accumulation. As long as the capi-
talist bourgeoisie can actively exert its dominant influence within national rep-
resentative bodies, the relationship between the State and capitalist social forces
is framed fairly harmoniously (Hobsbawm 1975).
Even within the bourgeoisie, there are some distinctions between the haute
bourgeoisie operating in the anti-market (and draining ever-more outstanding
shares of capital) and the petite and middle bourgeoisie (wishing to extend its
material wealth and share of political power). However, since the mid-century,
these forces have had to reckon with the rise of proletarian groups yearning to
improve their social position through policies aimed at income redistribution.
Thus, a new social composition emerges within the pantheon of the capitalist
economic structure. This conflict transcends the possession or non-possession
of the means of production. These forces enter into competition and struggle
to acquire a share of power. As the petty and middle classes gain greater influ-
ence in terms of political representation, the full-blown financial élite see their
share of control over the levers of power wielded by the sovereign State shrink.
This contrast is partly mitigated in advanced capitalist countries by a slow
but progressive redistribution of wealth. Moreover, and this is especially true
for England, a solid presence of liberal principles and representation manages
to contain social uprisings destabilizing the entire constituted system. For
example, in Europe, we witness a phase of externalization of social costs due
to the emerging demands of the so-called dangerous classes (Chevalier 1976;
Thompson 2013). For instance, the costs of the great deflation crisis (falling
prices and rising customs rates, which ran roughly from 1873 to 1896) are
passed on to the countries of the semi-periphery and the colonies. This occurred
through formal or informal imperialist policies aimed at controlling national
economies through the instrument of credit flows. Once they go abroad, these
come back in the form of returns. The capitalist State thus uses these financial
gains to alleviate domestic social tensions, which is why, from the second half
of the century, especially after 1873, we see a progressive demand for liberal-
capitalist reforms in the financial sector in non- negligible semi-peripheral
countries such as the Ottoman Empire, Egypt, and China.1
Debt thus becomes an instrument of political coercion. Local élite them-
selves pivot on the credit needs of their State to derive larger shares of profit
and political interest. For example, the notorious Galata bankers in Istanbul
do not hesitate to speculate on the Empire’s credit demands by demanding
predatory interest rates. It becomes more convenient for the Ottoman State to
resort to the international market than to rely on these bankers. Indirectly,
however, these élites continued to offer their credit within syndicates or finan-
cial groups headed by European (especially French) banks or the Ottoman
Imperial Bank, founded in 1863 by British, French, and, only in part, Ottoman
investors. The same goes for the Egyptian National Bank, founded in 1898 by
a group of British capitalists.
Indeed, until the Great War, credit was very often granted based on the
strong interpersonal relationships that bound the merchant banker to other
bankers and the political and diplomatic élites of a State (Quentin 2022). How-
ever, bankers became more cautious in semi-peripheral countries, and the
credit lent was collected in the various financial centers. In this way, banking
houses risked other people’s money and obtained lavish bonuses and commis-
sions for their services, a sort of utility-maximizing profit-seeking policy.
Ottoman financial élite, excluded from political power, gained importance
for the Turkish State through their ability to mobilize the necessary economic
resources. Moreover, as we shall see, the creation of various international debt
commissions whose function is to control the payment of loans by managing
the management of the indebted country’s most important rents (taxes on
monopolies, customs, and various indirect taxes), institutionalize the suprana-
tional control of the indebted country’s finances for the benefit of foreign cred-
itors. Financial fees infringe on the sovereignty of the debtor country. They are
also an expression of the transnational interests of the various financial élites
and a tool for promoting pro-market reforms.
The core countries of the capitalist world-economy thus also benefit imme-
diately. However, the idyll of the hegemonic class and the territorial State may
not last. It may be the case that the objectives of the State become distanced
from those of the financial élite due to the enlargement of the social groups in
power, such as the middle and petite bourgeoisie and the proletariat. Capitalist
élites, at this point, follow up with more subtle but no less coercive control
strategies aimed at increasing the share of capital to the detriment of labor.
Indeed, such a social group can only promote unscrupulous actions in semi-
peripheral countries. However, new internal-driven reformism is often pro-
moted to neutralize the new rising social groups. For example, the territorial
State’s indebtedness and the formal acceptance of a restrictive monetary policy
(i.e., more inclined to deflation) tip the scales in favor of the forces of capital
over those of labor.
Hence, this policy runs the risk of triggering conflicts with worker repre-
sentative groups. However, some internal backlash is inevitable as advanced
capitalist countries try to externalize such social costs. Ernest Mandel (1995,
pp. 52–56) reminds us how redefining the relations between capital and labor
to increase profit share and future investment becomes paramount in the
shrinking phases of the capitalist development wave. In essence, economic and
financial reforms aimed at bringing the State back in line with an economic
policy more inclined to market ideology are also attempted in the core coun-
tries (Flandreau and Flores 2009). The élites in the anti-market have the power
to influence the economic policies of nation-states since they control that cap-
ital crucial to the proper functioning of the capitalist or dangerously indebted
semi-peripheral State.
Of course, economics does not entirely dominate the values of a State

that calls itself liberal. England, for example, remains more faithful than
France to the principle of non-interference in economic affairs and the pro-
tection of private investment. However, a creditor country’s excessive finan-
cial exposure (through borrowing funds raised among small domestic
investors) can become a foreign policy problem when the indebted State
unilaterally decides to default (Lissakers 1991, p. 167). Generally, bad invest-
ments in London are considered a simple loss to be written off to a personal
budget rather than the State budget. To avoid a dangerous intermingling of
private and public interests, Lord Palmerston institutionalizes the responsi-
bility of private individuals to assume the enterprise and business risks asso-
ciated with the investment made (Lemieux 2013, p. 165). Indeed, moral
hazard on the part of private investors is ill-tolerated in London, which
reserves the right to intervene in the most consistent liberal tradition, only
where there is a clear political interest (Waibel 2011, pp. 23–25). The power
of the anti-market is thus limited by the rules that support representative
state society as a whole.
The issue of intervention or non-intervention to make up for and force one
to honor commitments made by foreign investors has been a subject of debate
within advanced capitalist countries, primarily in capital-exporting countries.
This is especially true in specific historical periods. During times of depression,
for example, social forces can struggle with each other. We encounter the most
heated conflicts precisely during an economic crisis phase. Indeed, conflict can
break out between emerging and decaying classes. A struggle caused by an
economic rearrangement and reshaping can lay the foundation for a different
pattern of accumulation that generates new balances of power. The phase
known as nineteenth-century globalization only confers an advantage on those
with access to extensive capital by creating a worldwide economic arena where
they can benefit from substantial gains. Government debt securities, railroad
enterprises, and new technological breakthroughs are fitting examples of this
contemporary profit-seeking policy-making (Landes 1969).
The constant enlargement of the capitalist world-economy leads to the pro-
liferation of financial interchanges. Capital becomes an increasingly decisive
factor in the functionality of the capitalist State. Globalization makes the eco-
nomic sphere an increasingly decisive factor in the interplay of interstate rela-
tions as well. The power of those social classes with access to this new form of
power known as financial capital is thus strengthened. Credit-rich states can
expand their economic influence by means of several loans granted to these
foreign countries or often as a result of signing free trade agreements and invest-
ing in public finance. Thus, foreign debt becomes the connecting tool capable of
satisfying both the desire for profit typical of the world of finance and the desire
for political influence specific to territorial states’ ambition (Roos 2019, p. 10).
However, several factors must be considered to turn debt into an element of
political coercion. First and foremost, it is crucial to know the territorial state’s
will, through the diplomatic élite, in order to take on the interests of its private
creditors and use them to its advantage (Borchard 1915). Thus, foreign debt
cannot be considered apolitical. In its negotiation, issuance, and management,
elements particular to foreign policy-making – such as the interplay of alli-
ances, territorial influences, and aims of conquest – intersect and merge.
Indeed, the political élite of a creditor State may veto the negotiation of a loan,
even to the detriment of possible economic gain. Often, the loan disbursement
becomes a political and diplomatic battleground in the game of influence that
governs relations among the great European powers.
Thus, the political pressure for foreign loans is exerted with greater impetus
at times of international credit crunch, as was the case in the 1820s, 1860s,
1870s, 1890s, and 1900s. However, only in the second half of the century do we
witness a more aggressive attitude on the part of creditors. This leads to the
creation of international receiverships following outstanding defaults and sim-
ple financial problems. Creditors are more organized and can make their
demands heard through a single representative voice. The first case can be
traced back to the creation of the Corporation of Foreign Bondholders in 1868
as an English syndicate representing creditors who invested in foreign securi-
ties (Borchard 1951, pp. 203–212). The aim is to undermine the principle that
the jumble of creditors makes the sovereign country, guaranteed a monopoly
through force, law, and legitimacy, the indisputably more vital party in debt
disputes. In the second half of the nineteenth century, creditors begin associat-
ing with one another to reverse this subservient relationship. The debtor State
is forced to cut back on current and structural expenditures to honor the bor-
rowed capital’s due interest and draw up a credible repayment plan. As far as
debtor–creditor relations are concerned, creditors push to reduce their invest-
ment risk despite the higher interest rate paid due to the precarious economic
situation. For the lender, a crisis that does not lead to default is much more
profitable as the spread increases and more interest is due.
All of this, in any case, is based on mere bargaining between political and
financial élites that rely on the debtor’s moral commitment to honor its obliga-
tions. However, the debtor is often coerced by the creditor’s direct and indirect
threats to agree to policies of fiscal adjustment. Indeed, it is possible to directly
threaten the undisciplined country by raising the ghost of capital market dis-
qualification. In addition, the possibility of causing an increase in the cost of
future credit concessions in terms of percentage of interest, issue price, and
fees for necessary intermediation can arise. Palpating such negative prospects
can help divert the debtor’s policy toward at least a cooperative attitude with
creditors. Of course, threats work even better when the debtor knows that it
must rely on foreign funds not to weaken its legitimacy and social order
(Panizza, Sturzenegger and Zettelmeyer 2009).
However, coercive actions taken by creditors were challenging to implement
in the nineteenth century. The lack of coordination among agents in the vari-
ous financial centers and the various existing creditor groups and intermediary
banks makes prohibitive action half-hearted. An understanding between cred-
itors and debtors in the imminence of default is desirable in order to achieve a
faster resolution to the financial struggle. In the early phase of a crisis, panic
and pressing financial needs can soften the debtor in his convictions and
actions. Already in the short and medium term, the debtor’s difficulties can be
relieved through access to new sources of financing. At the same time, the
united front of creditors may break down due to a physiological change in
interest on the part of investors or because of a separate agreement being
reached. Indeed, a new phase of credit expansion can help lower interest on
new and old bonds by strengthening the debtor’s negotiating position.2
However, in the midst of a crisis, the most economically exposed states, which
have already inherited an uncertain economic-financial situation often based on
reliance on foreign borrowing, are no longer able to resort to the capital they
need because of both its scarcity and its excessive cost (Suter 1992). The outflow
of capital from advanced capitalist countries goes hand in hand with a decline in
returns on investment at home. Capital moves abroad for profit-seeking pur-
poses. The case of England is a good example of how the increase in foreign
investment began to rise from the mid-century to surge from 1870 onward when
the capital return rates in other countries seemed generally higher than those
found in the homeland (Oneal and Oneal 1988; Cain and Hopkins 1993, p. 167).
Fernand Braudel (1982) analyzes this phase of England’s first commercial
and material and later financial expansion using a cyclical approach to the
system (Arrighi 2014). Indeed, as we have already pointed out, it is no coinci-
dence that the outstanding sovereign debt crises occurred mainly in the 1820s
and 1870s. The 1870s, however, played a more central role as London faced a
phase of declining yields at home, followed by a phase of ever-increasing finan-
cialization. At the end of an expansive cycle of profits at home caused by the
physiological saturation of the domestic market, capital begins to flow to newly
emerging countries that guarantee higher returns due to specific expanding
sectors (more unlikely, it can also be caused by the failure to exploit a particu-
lar economic potential). As we have seen, the expansionary phase only lasts for
a while, even for newly emerging countries. When the return on capital begins
to decline (due to externalities such as an economic crisis, a credit crunch, or
the physiological decline in the rate of return), a crisis inevitably arises. At this
point, foreign capital tends to return home, that is, within capitalistically
advanced countries, for fear of excessive financial exposure. The capital out-
flow leaves peripheral or debtor countries short of liquidity. The credit crunch
damages the capability of the State machine to keep going and sustain eco-
nomic stability and broader employment. Moreover, it prevents the State from
safely paying off the interest due on capital borrowed.3
Debt-ridden countries are left with little room to maneuver their way out of
a crisis. As states lacking adequate domestic resources to draw on, they have
the following options: austerity, that is, cutting spending while dispensing with
expansionary policies, or accepting the demands of creditors conveyed, very
often, by diplomatic circles interested in gaining geopolitical advantages.4 If
there is a clear strategic interest, politics do not hesitate to impose their condi-
tions to allow domestic capitalists to continue providing credit safe from
retaliation if deemed economically convenient. The weight of conditionality

from the political-diplomatic and economic-financial élite can thus result in
mortgages over the debtor country’s safest and wealthiest tax revenues, such as
state monopolies and customs. In this case, indirect taxes are preferred over
direct taxes. The purpose is to ensure the proper and continuous interest pay-
ment due on the capital paid. The political and financial élites who intervene
vis-à-vis the debtor State convey the demands for efficiency from private or
public-private groups. In essence, internal reforms are demanded in order to
adapt to the rules of capital in force in the international market. This means
allowing the debtor country to avoid a financial meltdown in exchange for a
more significant grant of sovereignty to the market.
As far as the principle of Westphalian sovereignty is concerned, the nine-
teenth century is seen as a historical period when interstate sovereignty is taken
into account more so than in the twentieth and twenty-first. Later, many loans
made to weaker capitalist states are not infrequently binding to precise demands
for extraterritorial and supranational control (Simpson 2004). For example, at
the dawn of its independence in 1832, the Kingdom of Greece accepted a loan
of 60,000 francs in exchange for specific mortgages on certain tax revenues
entrusted to the interested supervision of foreign officers (Krasner 1999b, p.
31). A relationship of dependence is thus formally created to meet a twofold
interest: an advantage in terms of foreign policy and a market to the depend-
encies of its capital. Understandably, starting in the last decades of the nine-
teenth century, the coercive instruments available to creditors become
increasingly effective (the various receiverships that effectively mortgage and
considerably reduce the economic sovereignty of the defaulting country are a
fitting example) (Zouari 1998; Conte 2018). However, what has occurred since
the twentieth century differs: no legal regime has the authority to regulate and
legislate on disputes between creditors and debtors.
Moreover, nation-states play a formally secondary role in these conflicts
unless a clear geopolitical and geostrategic interest is at stake (Lipson 1985).
The failure of parties to meet an agreement between them in terms of pay-
ments is treated as a breach of a contract, not as a State matter (Borchard
1951, pp. 3, 15). It is often more convenient for debtor countries to declare
themselves insolvent than to honor compliance with their commitments. An
overly restrictive fiscal adjustment policy, which creditors are quick to suggest
in order to protect their interests, can cause severe consequences for the debtor
country regarding macroeconomic, social, and political outlooks. To defend
themselves against such unilateral actions, creditors may include conditional-
ity clauses in loan contracts (which a sovereign country nevertheless has the
right not to comply with) or impose high interest rates to compensate for the
loan risk. According to Stephen Krasner (1999b, pp. 129–130), the borrower
gets the agreed-upon principal, while the lender gets both economic benefits
through interest payments and political benefits that fall under the possibility
of accepting institutional changes commensurate with the lender’s wishes. In
essence, default makes the indebted country more predisposed to enact a series
of external-induced reforms as demanded by capitalists and the political and

economic élite of the creditors’ countries.
However, we must here provide some clarifications regarding the European
powers. Like private creditors, capitalist states are not a single, cohesive group.
They do not act in unison as a trade union ready to impose homogeneous coer-
cive actions against defaulting debtors. In principle, sovereign states, unlike pri-
vate creditors, put political interests ahead of the private interests of non-state
investors. Joint and homogeneous actions by creditor countries have taken
place, but only upon agreement among the various private creditors and with-
out any political interests putting economic-financial issues on the back burner.
‘Gunboat diplomacy’ became one tool of action among several that creditor
states could use against defaulting debtors. The threat of using force, however
haphazard and used as an instrument of indirect pressure, was a concrete fact
until 1907, such as sending armies and non-violent actions aimed at forcing
debtors to come to terms with what they had signed and agreed to. For example,
the maritime blockade that England and France imposed on the port of Piraeus
in Greece in 1854, the naval demonstrations against Egypt and the Ottoman
Empire following their respective financial failures, or the more notorious inter-
ventions against Mexico in 1861 and Venezuela in 1902 (Krasner 2001, p. 127).
Such examples, however, involve analyzing issues beyond financial default
alone and encroaching into the much thornier field of foreign policy-making.
Britain and France, for example, which have tolerated Greece’s financial default
since the 1830s, decided to move only when Athens, in the midst of the Crimean
War, approached Russia, with which Greece forged an understanding for rea-
sons of strategic and geopolitical expediency (Baumgart 2020, p. 58). Beyond a
few sporadic interventions, however, it is difficult for a foreign State to decide to
intervene militarily to see a debt repaid, however large it may be. Behind every
coercive action, there are almost always foreign policy interests. Financial issues
are used as a valid justification in diplomatic bargaining and confrontation with
one’s own public opinion. The status of occurring default, which brings with it
political weakness and moral distress, is exploited as a plausible and acceptable
excuse for direct intervention by capitalist powers (Borchard 1951, pp. 16–17;
Graeber 2012). Respectively, the financial problems of Tunisia and Egypt led
France in 1881 and Britain in 1882 to militarily occupy these two North African
countries before proclaiming them a protectorate or colony (Ganiage 1959;
Tignor 1966). At the same time, however, such armed interventions can be seen
as the failure of certain economic-institutional transformations to make these
countries ‘non-aligned’ with what the capitalist powers desired. Economic sov-
ereignty and political sovereignty often go hand in hand.
Investment banks often act as intermediaries between the borrower and
investors. It is also their purpose to raise capital and channel it into profitable
investments. Thanks to their contacts with political and financial circles, even in
distant countries, such institutions have at their disposal valuable information
that makes their services indispensable in placing credit abroad, especially in
foreign bonds. Such financial institutions thus hold the keys to accessing capital
internationally. Such service is paid for dearly. These institutions can go so far
as to pocket nearly 25 percent in fees on borrowed capital through substantial
bonuses and special fees (Feis 1930). The low issue price at which these loans are
often placed gives the bank a considerable profit margin. The worse the borrow-
ing State’s condition, the higher the intermediary banks gain because it is harder
to place the loan. Having near-monopolistic access to information regarding a
certain type of investment provides the financial institution with a great advan-
tage. Mystification of or tampering with valuable information regarding a given
asset to gather more credit may also frequently occur.
The bank often does not risk its capital. Small and medium-sized investors
expose themselves to the risk of default by the borrowing country, already in
poor shape at the time of the loan. Indeed, financial institutions do not hesitate
to sponsor ads in the opinion press to extol a particular investment in a specific
government bond (Klaus 2014; Burdekin and Sweeney 2021). This occurs
mainly when their return for the brokerage is desirable. One only has to read
Émile Zola’s novel L’Argent to realize how the great games of finance take
place at a level too high for ordinary investors outside the respected circle of
powerful financial élites (Zola 1891).
The anti-market is an exclusive club of large capital holders who exploit the
strength of their claims for the highest possible financial return. The more the
debtor is in poor shape, the more the bank gains in intermediation. At the same
time, creditor country élites exploit financial difficulties to demand political
concessions, promising credit facilities from their own capital markets in
exchange for increasing their influence there. At the same time, both the capi-
talist élite of the hegemonic country and the local ones exploit the creation of
various financial commissions to monitor debt payment. Capitalist élites take
advantage of the default status and support a series of unpopular domestic
reforms to increase their economic and political standing (Barreyre and Dela-
lande 2020, p. 20). Reforms in the financial system serve to manage capital
according to the rules of creditors and confine the debtor in a continuous rela-
tionship of interdependence with the creditor. In this way, those who hold the
keys to accessing capital can negotiate from a position of strength. Crises, for
example, are not caused by the scarcity of credit but rather by the willingness
of those who hold the abundant capital not to distribute it as before. Resources
are voluntarily allocated differently. This evinces, therefore, a coldly rational
lack of will for economic gain. Reform is thus pivotal in making capital a sig-
nificant lever of power globally and maintaining it as such.
3.2 Lex monetae: the relevance of liberal-capitalist reforms in the

monetary system
Currency plays a prominent role in leading a semi-peripheral economy into the
pool of rules crucial to the interests of forces acting in the anti-market. The
call for reforms in the monetary sector, which in the liberal-capitalist tradition
is oriented toward institutionalizing a stable and gold-based solid system,
would help eliminate uncertainty in currency circulation. Moreover, reforms in

this sector are pivotal in homogenizing the monetary systems, fostering inter-
national trade, and the outflow and inflow of capital. As Karl Polanyi (2011, p.
276) reminds us, such an order coincides with the organization of the world’s
economic life within a self-regulated market with a gold-based monetary sys-
tem guarding this automatism. The ability of the hegemonic State power to
impose its monetary system even on countries at the periphery of the capitalist
world-economy determines its ability to control it. Well known, for example, is
the role of the Bank of England as a lender of last resort within that gold-
linked international monetary system known as the gold standard (De Cecco
1971; Roncaglia and Tonveronachi 1979). The management of the money sup-
ply can thus result in a phase of global inflation or deflation, both for countries
that fell within the sphere of the pound (and hence gold) and for those who at
least had trade relations with this part of the world (Eichengreen and Flan-
dreau 1985; Eichengreen 1992; Bordo 1999; Einaudi 2001).
The rise or fall in the value of an internationally recognized currency – on
whose exchange rate worldwide transactions are based – gives the hegemonic
country significant power given its controls on that issuance. Second-ranking
currencies that adhere to that international monetary system must cope with
changes, such as currency fluctuations, by the leading currency. However, this
occurs infrequently. A global currency must adhere to basic principles of sta-
bility. Thus, countries in the semi-periphery must passively accept the rate level
of the international reference currency if they wish to enter the international
trade network or capital market. It is as if the non-hegemonic State, and even
more so the semi-peripheral State, delegates to an external entity a direct influ-
ence over the monetary discount rate and the power to pursue an inflationary
or deflationary phase of the monetary cycle. Indeed, accepting an international
system that confers stability carries costs: adhering to the gold standard means
that the second-ranking country must abdicate some instruments of economic
sovereignty by following a mandatory cautious fiscal and monetary policy
(Neal 2015). Increasing the budgetary deficit is allowed only in cases of an
actual emergency (Cooper 1968; Ferguson 2005, p. 60). Indeed, the gold stand-
ard brings with it the principles of fiscal, budgetary, and monetary stability. As
Eichengreen and Flandreau (1997, p. 9) recall, the gold standard became a
signal of financial probity. According to Robert Gilpin, it also brings minimal
social strategies: balance of payments equilibrium and monetary stability. The
system is based on three fundamental cornerstones:
1 Adjustment: the member countries adjust their domestic economies to

keep the value of their currency stable with gold;
2 Liquidity: to produce just enough gold to meet world demand while
being careful not to fall into the inflation trap);
3 Confidence: Britain believed to have the power and the granite will to
sustain the gold parity with the pound.
(Gilpin 2001)
Before proceeding further, however, it is necessary to take a step back to recon-

nect with the previous paragraph. The monetary issue is strongly linked to
public debt, especially foreign debt (Bordo 1996). It is no accident that foreign
creditors have every interest in keeping strong the currency in which the debt
securities they hold are denominated (Weeks 2020, pp. 43–44). This guarantees
them secure profits and make currency devaluations by the debtor harmless in
order to pay less interest.5 Issuing debt in a hard currency (or gold) is crucial to
borrowing at lower interest rates (given the higher market confidence and the
capital availability worldwide, especially during business cycle expansion), but
this leads to a net loss of wealth. Interest payments do not end up in the hands
of individuals operating within the domestic market – which in turn pay taxes
due, consume, and invest – but end up in the hands of foreign investors whose
income is not taxable by the debtor State.
As we have already seen, investor access to information becomes crucial to
the proper interconnection of the global market. The use of the telegraph, for
example, provides the ability to relay daily valuable information to investors,
especially regarding political issues, such as the threat of war, capable of rap-
idly changing the issue price of a loan, the value of a security, or its interest
rate. Thus, access to information is crucial in determining foreign bond value
(Mauro, Sussman, and Yafeh 2006, p. 88). Indeed, the value of the interest
paid is determined by good or bad macroeconomic conditions (the balance of
payments situation, the presence or absence of a fiscal surplus, the level of
indebtedness, and the inflation rate), political stability, and the lack of armed
conflict. These latter elements play a fundamental and determining role in the
priorities that nineteenth-century capital markets give to assessing a country’s
risk in its entirety. Indeed, the more national markets become integrated under
the aegis of nineteenth-century globalization, the more national political
issues play less and less of a determining role. Certainly, a crisis can be more
easily redistributed among all the actors in the increasingly enlarged and inte-
grated market. Redistributing risk can yield benefits. As we shall see later, the
flow of gold among central banks can help support an outright monetary
crisis (Ferguson 2006).
As is well known, what helps keep markets together is a stable monetary
system recognized by all: the gold standard. This is a gold-linked monetary
system that, since the 1870s, has been accepted and recognized by almost all
advanced capitalist economies and later also by semi-peripheral economies
integrated into the world-economy. Indeed, adherence to gold is instrumental
in ensuring international interconnectedness. Such a precious metal is a univer-
sal guarantor. Since there is no world State and no world currency, gold
becomes the de facto global currency. Therefore, the link between gold and
sterling highlights and reflects British capitalism’s supremacy (Mandel 1995,
pp. 52–56). Adherence to the gold standard, however, requires surrendering
specific instruments of sovereignty that influence the economic policy of the
adhering country, which must pursue a prudent fiscal policy and resort to defi-
cits only in emergencies (Ferguson 2005, p. 60). However, the stability provided
by such a monetary system causes some problems in weaker countries. Mone-

tary stability often depends, among other things, on the presence or absence of
reserves (e.g., gold in the nineteenth century) sufficient to intervene in a system
shock. A surplus balance of payrolls is key to accumulating such valuable
reserves. In addition, an inflow of foreign investment can contribute signifi-
cantly to the stability of a country’s system while increasing confidence in
improving macroeconomic conditions. However, when instability arises, short-
term investments return home attracted by rising discount rates, thus leaving
semi-peripheral countries without capital investment in their time of need (De
Cecco 1995, p. 240). For smaller or economically weak sovereign entities,
therefore, monetary stability brings a very high cost of management and main-
tenance that exposes them to the storm winds and instability inherent in
the market.
Recognition of and adherence to an international monetary system, with its
fulcrum at the Bank of England in the nineteenth century, removes an addi-
tional element of sovereignty from debtor countries. Most international loans,
especially those made to countries in the semi-periphery of the world-economy,
are negotiated in foreign currency, often imposing payments in gold as well, to
shield creditors from currency devaluations and possible systemic crises.
Indeed, a revaluation of gold would in fact increase the creditors’ earnings.
This attitude is conducive to preventing debt from becoming inflated, that is,
losing real, but not nominal, value at the time of repayment or payment of
interest due (Marty 1978; Remolona 1982). A stable monetary system undoubt-
edly facilitates the provision of credit.6 Using a stable, solid, and internation-
ally recognized currency serves the interests of creditors, who can keep the rate
of profit unchanged. The absence of inflation leaves the value of investment
and interest unchanged over time.7 Commonalities exist between the processes
of debt restructuring and monetary reform. Both aim to reduce inflation as a
factor that fosters instability. Bringing public debt back to sustainable levels
already in a medium-term perspective can help calm inflation – an often-
primary goal behind the attempt at monetary reform (Waibel 2011, p. 58).
Monetary stability and sovereign government debt under control provide the
debtor country with a real possibility to follow up with conversion actions
(only if the international economy is favorable, e.g., in an expansionary phase
of the business cycle with the value of the interest rate lowering) and to increase
the value of its income in those marketplaces where the loans were placed.
Maintaining monetary stability pays off for a country with a substantial for-
eign debt issued in a foreign currency. A devaluation of the domestic currency
risks significantly increasing the costs of interest payments and debt amortiza-
tion with concrete and real default risks (End et al. 2015).
On the other hand, different debt management can occur where the debtor
country’s debt is denominated in the national currency. A contained inflation-
ary process (that does not turn into runaway hyperinflation, as in the case of
the Weimar Republic in the 1920s (Fergusson 2011) or Zimbabwe in the early
twenty-first century) can lower the real value of the debt while avoiding a
dangerous overheating of the economy. In that case, the State pays proportion-
ately less interest and fewer miscellaneous amortization costs (Boettke and
Coyne 2011). However, we must dwell on the overview of the action produced
by monetary reforms under a liberal-capitalist model. The foundation of the
Bank of England, for example, makes a clear distinction between what is eco-
nomic and what is political. Monetary independence confers an advantage on
the market. By no longer directly controlling monetary issuance, the sovereign
loses its ability to dispose of the wealth of its subjects. This will only be possi-
ble through fiscal policy. That is why monetary reforms bring general reforms
in taxation and public finance. Suffice it to recall what happened in the various
European states formed between the eighteenth and nineteenth centuries
(Baechler et al. 1988).
To return to the gold standard, the structure of this monetary system is
clear: the fixed exchange rate is a sine qua non for ensuring balanced and sus-
tainable economic growth, bent to the needs of the market economy. It also
stimulates convergence policies and greater interdependence between periph-
eral and central economies. By reducing monetary fluctuations as much as pos-
sible, the State is forced to direct its economic policy toward the path set by the
hegemonic power that controls the global discount rate. Generally speaking,
restrictive policies incentivize to follow the path of modernization according to
the prevailing market rules (Duménil and Lévy 2000, p. 57).
Moreover, the fixed-rate system fosters an international division of labor
according to the principle of comparative advantages. In this way, the resulting
monetary stability is preparatory to encouraging the formation of the savings
essential to following up on new investments. For example, following the Napo-
leonic Wars, England, but also much of continental Europe, had to adjust to
progressive deflation, especially between 1840 and 1850, favoring an increase in
savings. After restoring the full gold convertibility of the pound in 1821,8 Lon-
don reverted to a gold-backed monetary system, which was sanctioned de facto
by the Banking Act of 1844, not coincidentally initiated by Sir Robert Peel, the
promoter par excellence of free trade, with the influence of David Ricardo’s
ideas (Arbuthnot 1854, pp. 72–74; Helleiner 2003, pp. 83–84).9 In this period,
wages contracted just enough to allow them to be reduced in both real and
absolute terms (Wallerstein 2011, pp. 32–34). The reduction in salaries, pre-
cisely in the years of the abolition of the Corn Laws and the most prosperous
phase of free trade during the nineteenth century, contributed to a further
upward push in profits and the stage of capital accumulation. At the same
time, the deflation imposed by a fixed exchange rate system, especially in the
aftermath of the Great Depression of 1873, allowed England, but also the
remaining capitalist and imperialist powers, to drain resources from the periph-
ery (for example, through the payment of interest on a foreign debt payable in
gold in indebted countries), putting them in a position of global rents.10 The
gold standard and free trade are keys to keeping London at the center of global
financial and business relations while conferring undoubted advantages on
large capital-holders.
The crisis of 1873 allowed costs to be ‘externalized’ from hegemonic coun-

tries to semi-peripheral countries through the linkage triggered by the interna-
tional gold system. Preparatory to maintaining the profitability of capital, the
reforms served not only to ensure stability and profits but also to keep the
British imperial system afloat based on a constant balance of payments deficit
(Cunningham Wood 1983, p. 10). The interests of capital collide with those of
the hegemonic capitalist State. The gradual shift to the gold standard by many
other countries adopting either a bimetallic or silver standard increases this
network of power toward the center of the world-economy, especially during a
period of emerging financialization of the economy.11 The fixed-exchange-rate
monetary system, however pivotal in diffusing the financial power of the
hegemonic power abroad, is simultaneously an instrument for guaranteeing
international order. Each member country becomes interested in its order and
maintenance by sharing, according to its power and ambition, the risks and
costs of its preservation. Indeed, we recall how the crisis of the powerful Bar-
ings Bank in 1890 was overcome thanks to the outflow of gold from the Bank
of France. Undoubtedly, the latter contributes significantly to the Bank of
England’s functions as a lender of last resort (Eichengreen 2019, p. 31–38).
This example illustrates how the presence of an international monetary order
needs supra-national adjustment instruments of coordination often unrelated
to local economic dynamics. Reform in this area, therefore, aims to define this
state of affairs.
The gold standard thus responds to the classical economic growth assump-
tions inherent in the division of labor and capital accumulation. Monetary
reform, in these terms, favors adjustment to a classical economic model in
which the hegemonic power is at the center of such decision-making. The
reform assumes the dual purpose of subjugating and binding the semi-
periphery just long enough to induce even the center and the economic forces
linked to the material economy to further lower the cost of wages to maintain
competitiveness. In this case, we have a twofold result. The currency’s stability
means to some extent stability of profits and consequent adjustment of wages.
In its modern liberal-capitalist version, the State’s primary assumption is to
ensure non-intervention, even in the monetary field. According to Locke, cur-
rency like all other forms of property, must be defended from external and
internal incursions. Governments have no right to interfere with the natural
laws of currency: an impersonal power must regulate everything. According to
David McNally (2014), “impersonal power is at the heart of the capitalist form
of State. The consolidation of this form of State requires autonomous power
from money”.
Karl Polanyi (2011, p. 5) sees the international gold base as the second pillar
of nineteenth-century society. The institutionalization of such a fixed exchange
rate system means the unique organization of the world-economy. Extending
to other countries a monetary system tied to gold and sterling means extending
the British domestic market rule system internationally: “the key to the institu-
tional system of the nineteenth century lies in the laws governing the market
economy”. Practically, semi-peripheral countries must adopt a constitutional,

and therefore bourgeois, system of government to influence the budget and the
currency’s external value in this direction. A fortiori, a country indebted in
foreign-denominated currency to capitalistically advanced countries must pay
more attention to budget stability. Polanyi recalls how the “gold base and con-
stitutionalism are the instruments that make the voice of the City of London
heard in many of the smaller countries that have adopted these symbols of
adherence to the new international order” (Polanyi 2011, p. 18).
What is certain is that adherence to the gold standard gives substantial power
to the actors who control the market, whether states or financial élite. As eco-
nomic sociologist Fred L. Block reminds us (2021, p. 193), such a rigid mone-
tary system favors the exercise of class power by dominant economic groups,
those who control the market. The presence of a political system capable of
resisting as much as possible the growing demands for social benefits from out-
side and now also from within the various national parliaments (at least on a
large scale until the Great War) allowed said élite to maintain a financial system
capable of guaranteeing well-defined e conomic and class interests.
Notes
1 As for Latin America, public debt securities considered attractive in 1820 later be-
came unreliable. Of the 25 foreign loans taken between 1818 and 1831 (worth £42
million at issue price), as many as 16 remained unpaid in 1831. In theory, such loans
should yield a return to the investor of between 7 and 9 percent; in practice, in 1831,
an average of 3.1 percent is derived. The 5 percent Greek loans of 1824 and 1825
yielded nothing until 1870 (Imlah 1952).
2 The Keynesian neoclassical version of economic policy sees the expansion of loans
as having a countercyclical function (Lindert and Eichengreen 1989, p. 15).
3 Examples of this can be found in many countries in the Mediterranean area, such
as in the case of Tunisia’s bankruptcy in 1867 following the financial crisis of 1866,
or Egypt and the Ottoman Empire in 1875 following the heavy contraction of 1873.
4 Although none of these countries had a central bank under their direct control, the
exposure to foreign debt would have made any domestic monetary policy unhelpful.
5 However, devaluation, in this case, can only benefit countries that have an industrial
sector capable of producing goods of some added value that can be sold abroad. By
devaluing the currency, the debtor country could claim a balance of payments sur-
plus to help it more easily pay the interest on debt owed.
6 During the classical gold standard era, creditors were also, to some extent, willing
to accept lower interest, aware that exchange rate stability avoids future loss of the
actual value of the loan granted.
7 The thesis proposed by U. Patnaik and P. Patnaik (2016) is interesting because capi-
talist and imperialist forces implement a kind of income deflation in semi-or periph-
eral countries. The purpose is to avoid an increase in the supply price of many goods
and commodities and then an increase in inflation. Such an increase could pressure
the monetary stability that underlies the capitalist system (more the liberal-capitalist
system than the national-capitalist one). Indeed, as the authors remind us, a strong
currency means more significant capital accumulation, while a weak currency means
greater commodity accumulation. The proposed thesis works only during a period
of globalization of capital. Imperialism is thus not only the ‘Highest Stage of
Capitalism’ (Lenin 1948) but an essential characteristic of capitalism from the begin-
ning. On imperialism, see also Capasso and Kadri (2023).
8 Even before the Napoleonic Wars, a kind of gold monometallism existed. In fact,
with the Bank Restriction Act of 1797, the Bank of England was granted the op-
tion of not converting issued banknotes into gold. This law remained in force until
1821 (O’Brien and Palma 2020).
9 The theory behind the metal school of Ricardian conception maintains that the
limitation of the quantity of money in circulation is the fundamental condition for
the stability of the value of money itself (Bresciani-Turroni 1958, p. 94).
10 It is useful to specify that this is a deflationary process affecting primarily semi-
peripheral countries. In Europe, interbank circulation and capital flow allowed the
system to escape the deflation trap.
11 Historically, the presence of a monetary system involving multiple currencies in
circulation (bimetallic, or gold and silver, or trimetallic, or gold, silver, and copper)
was subject to fluctuations often “piloted” by elites since the Middle Ages. The
weakest currency is the one most affected by devaluation and debasement. The
elites often control this devaluation process by retaining control of the circulation
of hard currencies in their own hands. It thus emerges how even the instrument of
currency is used to pursue the interests of a particular social class. Small currency
would devalue, thus driving up the prices of retail goods. Wage increases came only
afterward. This allows higher profits for the capitalists (Romano 1972, p. 263).
4 Reforms in practice
The case of the Ottoman Empire,
Egypt and China
4.1 Material expansion in relation to free trade agreements

As we have seen, the peculiarity of reforms is to establish and develop imper-
sonal business interconnections in the expanding international market without
being forced to do so by direct military conquests (Conte 2022). However, to
make a theory more reliable, one requires empirical feedback that in particular
highlights its various difficulties and short circuits in practical application. In
the first instance, the case of the Ottoman Empire is a case in point. That
Empire was already considered a decaying giant by the end of the eighteenth
century and was gradually stripped of much of its provinces during conquests
by other powers and nationalist movements, especially in the Balkans (often
instigated by the opposing State powers themselves). However, it was never
entirely colonized and conquered. Politically, the Empire retained sovereignty
in the hands of a small circle of traditional men and élite who served the Sultan
and his court. On the other hand, Ottoman economic sovereignty suffered a
harsh backlash due to the signing of the Balta Liman agreement, foreign
indebtedness, and global market expansion (Barkey 2008).
The Ottoman Empire, therefore, was Identified as a semi-peripheral coun-
try. As we shall see, the reforms introduced, especially in monetary, trade, pub-
lic debt, and economic legislation (especially concerning private property),
were pivotal in monopolizing the means of exchange by bending them to the
needs of capital accumulation. This package of reforms, however, was crucial
in opening to capitalist social relations a semi-capitalist society (except for
local forces acting in the anti-market), beginning with the signing of the free
trade agreement in 1838 (Kasaba 1988, p. 54).1
The latter agreement was signed in the face of the looming military threat
launched by the ambitious Muhammad Ali (1769–1849) toward the territories
under the control of the Sublime Porte. This agreement resulted from British
intervention on behalf of the Sublime Porte. With Egypt’s withdrawal, Lon-
don demanded various economic quid pro quo from Constantinople. In essence,
the Empire is asked to reduce its cornerstones regarding tax revenues, customs
duties, and State monopolies in favor of integration into the international mar-
ket under British rule. The signing of this treaty does not open the doors of the
DOI: 10.4324/9781003441816-5
Reforms in practice 77
Empire to a profound social transformation; instead, it is a first step toward

Constantinople’s inclusion within the international market and the interna-
tional division of labor. The Balta Liman treaty provides, among other things,
for a reduction in customs tariffs, as well as their stabilization and the abolition
of domestic monopolies that are seen as a dangerous interference in the initia-
tive of free market forces. It is, in essence, a matter of allowing the opening of
the Ottoman market lacking the technological capacity to compete with Brit-
ish manufacturing and thus destined to integrate into a secondary position,
namely as an importer of finished goods and exporter of raw materials (Qua-
taert 2002, p. 6; Faroqhi 2005, p. 90). To join hands in this way with the Otto-
man State is to perpetuate this relationship of dependence over time. Lord
Palmerston signed an agreement that benefits – except for a small minority of
textile entrepreneurs in the Balkans and local financial and business élites –
primarily British economic forces (Lapavitsas and Cakiroglu 2019).
Free trade policies require an active State intervention policy to be adequately
implemented. This policy is expressed through adopting the regulations that
enable the return on investment. It is a work of administrative centralization
crucial to making the sovereign entity capable of extending its control over
every possible aspect of the economic structure and its institutions. Indeed, the
1838 agreement paves the way for creating a series of modern state institutions
pivotal to managing integration within the capitalist world-economy. For exam-
ple, the ministries of finance and trade were founded in 1838 and 1839, respec-
tively, following the signing of the Free Trade Treaty (Agoston and Masters
2009, p. 12).
The Ottoman trade deficit becomes more dangerous due to the 1838 treaty.
Deficit paves the way for the progressive indirect colonization of European and
European-related forces that hold the intellectual and material keys of techni-
cal and scientific knowledge to manage the proper functioning of a modern-
inspired economy. As we shall see, this subordination is further increased with
the gradual Ottoman reliance on international loans and the consequent crea-
tion of financial institutions (such as the Ottoman Imperial Bank in 1863 and
the Ottoman Public Debt Board in 1881) controlled by the capitalist economic
élite of European and Ottoman origin.
To achieve these results, however, one must adopt European-inspired eco-
nomic laws. In 1845 the Commercial Courts Regulation was adopted, and in
1858 the Land Law was passed, extending property rights to more economic
entities (Shaw and Shaw 1977, p. 118, Islamoglu-Inan 2000). Such regulations
effectively codified capitalist private property in Ottoman lands. Although
such rules respond to local codification needs that were indeed present in the
domestically sourced Ottoman reformist process known as Tanzimat, the legal
framework within which such transformations take place originates from the
limping adoption of the Napoleonic codes (Terzibaşoğlu 2001). The French
code introduces the concept of the law of individuals, typical of the Enlighten-
ment secular tradition, as opposed to that of the community, or Umma,
enshrined in the sacral-religious-derived Ottoman law (Perulli 2012; Shlala
2018, p. 42). The Ottomans certainly did not abjure Islamic law, but the codifi-
cation process allowed the legislative elements typical of the capitalist order to
be embedded within the local society (Augusti 2013; Rubin 2016, 2018, p. 37).
In this way, a common legislative system is being built for those countries that
gradually integrate within the capitalist world-economy.
The introduction of such codes found a positive reception in European dip-
lomatic circles. During his service as His Majesty’s ambassador to Constan-
tinople, Austen Henry Layard praised how the expanded private property
introduced with the 1858 code was critical in opening business opportunities to
foreigners eager to invest there.2 The Sultan and the Ottoman government must
guarantee the protection ‘of life and property’ as fundamental elements to
grant the proper guarantees to those who “by their labor, industries, and com-
panies create wealth and prosperity”.3 According to the European diplomatic
élite, the Empire must increase its financial resources by finding the necessary
European taxation expertise, which is critical to effecting the modern-inspired
transformations that may save the Empire from economic ruin. Thus, it became
crucial to employ Europeans in the Ottoman administration in defiladed and
secondary positions as advisers and to give them relevant decision-making
responsibilities in top posts.4
The free trade agreement signed between the Porte and Britain was only the
first of such agreements with other European powers. This agreement, how-
ever, was only partially transposed and implemented in the Egyptian territo-
ries. Although formally part of the Ottoman Empire, to which it had to pay an
annual tribute, the Khedivè’s Egypt had to accept the general principles estab-
lished by the Treaty of Balta Liman (Tignor 2011, p. 209).
With the signing of the Treaty of London in 1841, Egypt gained financial
independence vis-à-vis the Ottoman Empire. Thus, those internal monopolies
that had contributed favorably to a forced or induced state capital accumula-
tion pivotal to launching, on a large scale, a forced program of internal indus-
trialization (Hoyle 1986; Panza and Williamson 2015) were de facto abolished
on Egyptian soil as well (Saul 1997). Indeed, it must be remembered that Cairo
remained subject to the fiscal policies imposed on foreigners by Constantino-
ple. It remained autonomous, however, in terms of the type of domestic taxa-
tion to be adopted (Panza 2013). The Egypt of the Khedivé could channel the
treaty-sanctioned opening to the international market toward a modernization
program focused on acquiring certain production technologies. At the same
time, it could limit dangerous external interference in opposition to that pro-
gram (Fox Bourne 1906).
Egypt exploited integration into the international market to obtain know-
how and build momentum for a program of modern-led industrialization. The
Egyptian political line in this regard can be seen as a sine qua non, along with
the inherent strength of a newly born and dynamic economic order, to bend
and exploit the opening to the global market to its own needs. Unfortunately,
the attempt to compete with European and mainly British manufacturers was
repeatedly thwarted by London and its industrial lobbies (however much of
the Egyptian path to development was based on forced labor under semi-
slavery conditions) wanting to turn Egypt into one of the most important
export-oriented markets for raw cotton (Serels 2013).
In Egypt, however, also before the British occupation, many capitalist-
inspired reforms were introduced. For example, in 1856, Egypt drafted the
Code of Sa'idiyah, which sanctioned the usufruct of land and, in particular,
accepted a kind of usufruct ownership. This sort of land control by the new
capitalist landowners could be used as collateral and as backing to obtain
credit, often granted by several foreign financial institutions operating in Egypt
(another code known as the Muqabalah law was enacted in 1871). A kind of
full-fledged private property was recognized and reinforced the foreigners’
right already granted in part in 1867 (Hoyle 1986), although formally it was
not until 1891 that full ownership was acknowledged (Kalkas 1979). In
exchange, they had to pay six years of taxes in advance. As in the case of the
Ottoman law of 1858, the new property laws made land no longer an inaliena-
ble asset but an active tool in capital accumulation.
As in the Ottoman Empire, a war in China opened the door to signing a
free trade agreement with unequal principles. However, the war in question
directly concerned the confrontation between China and Great Britain: the
well-known First Opium War (1839–1842) (Lovell 2022). This conflict was
triggered by the British desire to continue exporting opium through India as a
functional commodity to mitigate the British Empire’s substantial trade defi-
cit with the Chinese Empire. This armed confrontation is one of the first mod-
ern military conflicts responding to clear capitalist-inspired interests (Sachs
1999). The British victory opened China to the capitalist world-economy. The
Treaty of Nanking (1842) is the first of the unequal treaties signed between
China and the European imperial-capitalist power. The Chinese Empire had
to pay an indemnity by ceding the territory of Hong Kong; it also had to agree
to impose lower tariffs on incoming and outgoing goods referring to domestic
trade. In addition, the British (and later other European powers) were also
allowed to trade at ports other than Canton (Greenberg 1951, p. 41; Kung
2022; Rowe 2022).
Decisive factors in the success of this agreement in terms of absolute
advantages for the European powers included the granting, enshrined in the
subsequent Treaty of Bogue, of certain extraterritorial rights allowing Brit-
ish citizens to be tried in British courts under English law. Within certain
commercial enclaves, respect for the principle of private property secured by
such extraterritorial orders is guaranteed. The evoked regulation thus
granted a major incentive to promote British commercial interests by ensur-
ing the protection of the principles of capital accumulation peculiar to the
European legal system. In the Ottoman Empire, the guarantee of the afore-
mentioned principles of extraterritoriality existed as early as the sixteenth
century with the signing of early capitular agreements (Van Den Boogert
2020). In Egypt, such agreements were also consolidated with the establish-
ment of Mixed Courts. These effectively sanctioned the intrusion of the
great European powers into the judicial system and the recognition of the
creditors’ rights to securing their own investments (Brinton 1968, p. 47;
Jakes 2020, p. 104).
What is more, in Egypt, the reform of the judicial system (1875–1883) cre-
ated a twofold system: one for foreigners and Levantines (i.e., those forces
more connected to the anti-market) and another for locals (i.e., those residing
in the sphere of the market economy). The new law benefitted the development
of foreign companies to the detriment of local ones. In this regard, Kalkas
notes how the European Powers strongly supported the reform, as their entre-
preneurs wanted it to facilitate their business in Egypt (Kalkas 1979).
To return to China, the Nanking Treaty guaranteed British merchants and
capitalists new trade lines while simultaneously enabling Britain to gradually
reverse its balance of payments deficit. It is possible, through more aggressive
trade practices and the ability to continue exporting opium (albeit with due
care) to balance the books. Only in 1884, British exports to China exceeded
imports (London exported 8.5 million pounds compared to 7.5 million in
imports (Lowe 1981, p. 4). The agreement was primarily about political domi-
nation. The 1842 deal did not increase British exports of goods. On the con-
trary, Chinese exports to England increase considerably, especially because of
the demand for silk and tea. In 1854 the British trade balance with China had
reached a deficit of about 8 million pounds. Even with increased Chinese
exports, London derived the benefit of using the tax proceeds on Chinese
imports to finance the British naval fleet. However, this unstable situation
could not last – which is why Lord Palmerston stated that the problem with the
Nanking trade agreement was that it was not about the hinterland: it, too, had
to be open to free trade (Lovell 2022, p. 303).
However, the case of the Balta Liman treaty is different. The treaty served
more to facilitate increased interchange, trade, and profit opportunities for
the British merchant class to the detriment of Ottoman manufacturers forced
to close their doors in the face of fierce competition from the interna-
tional market.
In both cases, however, the process of commercial openness paved the
way for a progressive rationalization of economic life by opening up the
societies of the semi-periphery to reformist inputs. The hand that moved
these changes is related to the European financial and diplomatic élite in
association with local ones.5 With varying degrees of brutality and diffi-
culty, this transformation could not but clash with the pre-existing social
world that sought to seize these transformations by bending them to its
own needs for power and survival. This is why purely local reformist move-
ments arose, such as the Ottoman Tanzimat and the Chinese Self-
Reinforcement Movement (which ended in 1895 but was followed by a
further, more market-oriented phase between 1903 and 1911).6 However,
internal reformist movements devoted to modernization are inspired by
European-Western tradition, movements that bring with them the princi-
ples of the capitalist socioeconomic order. The seed of capitalist ideology
is planted in the garden of local reformism. However, how it grows and can
bear fruit depends on multiple factors.
4.2 Emerging élites
Élites are certainly one of the main drivers of social transformation. The evo-
lution of certain social classes in terms of their power struggle determines the
structural definition of a sovereign country. Thus, the State is an expression of
the élite that supports and legitimizes its power. Under this paradigm, we must
read and interpret the transformations taking place in the societies of the semi-
periphery with reference to specific reform processes influenced or not by the
capitalist powers in association with a certain group of complicit local élites.
Let us begin with the Ottoman case. The opening up to the Western world
resulted from a series of military defeats against Czarist Russia and the press-
ing need to reform the armed forces. However, such a desire opens a Pandora’s
box of modern societies. Having a modern military means creating a fiscal
system to support its substantial expenses. Defeat by Mohammed Ali so
alarmed the Sultan that a reform program was urgently needed. As we have
already seen, this defeat made possible a twofold reformist action: the internal-
inspired reformism program known as Tanzimat (1839–1876), and the external-
inspired reformism through the signing of the Free Trade Treaty in 1838. A
hybrid system combining elements of religious, political, and economic con-
servatism (typical of the Ottoman ancien régime world) emerged with the new
ambition of the emerging Ottoman bureaucratic class. Behind this reformism,
however, were also those forces with significant interest in fully integrating the
Empire into the ever-expanding capitalist market. Thus, if bureaucratic élites
pushed to follow up on a modernization program to strengthen the Ottoman
society and State, the mercantile and financial élite were interested in support-
ing a program advocating liberal-capitalist reforms in the first instance (Davi-
son 1999, pp. 171, 363, 434).
The social and class ties and the affinities that united the European and
Ottoman financial élites allowed them to create a transnational alliance based
on the pursuit of profit and capital accumulation. Several informal businesses
and financial joint ventures highlight the existence of a coalition between the
Ottoman financial élites (often of non-Muslim extraction, but nonetheless
Ottoman in their own right) and their European counterparts (Deringil 1998;
Masters 1999, p. 50). Of course, the local élite I am referring to are those
involved in international trade and finance. They reside primarily in seaside
areas and are part of the Ottoman bourgeois-aristocracy: wealthy merchants,
bankers, financiers, etc. (Heper 1980; Emrence 2008; Eldem 2014, p. 174; Man-
japra 2020, pp. 213–216). In addition, connections between local and interna-
tional élites are based on the type of specific professional activities and
particular business and commercial interests (Manjapra 2020, p. 188).
However, the divergent interests of the rural and economic-financial élite
did not allow the modernization program to be properly implemented where
the new bureaucratic social class was located. Indeed, it must be remembered
that such financial reforms break the balance between social classes by giving
more economic power to the élite acting in the anti-market.
Greater economic strength does not necessarily translate into more sig-
nificant political influence, especially in political regimes as divorced from
the liberal-democratic tradition as the Ottoman Empire. The more the
empire becomes integrated into the capitalist world-economy, the more the
élite connected to it assumes greater relative weight within its society due to
those new supranational state institutions that are expressions of their own
class interests (Autheman 2002). We refer to the Ottoman Imperial Bank
(BIO), created in 1863 and capitalized with mainly French and British funds,
and the Ottoman Public Debt Administration Board (OPDA), founded in
1881 following the 1875 bankruptcy and controlled by representatives of
European creditors.7
This group also uses the organic transformation of Ottoman society to
extract for its benefit a more significant share of power and influence to the
detriment of the old landed and feudal classes. The financial, manufacturing,
and mercantile profit-seeking dynamics inherent in newly born economic insti-
tutions such as the BIO and OPDA are exploited. The latter institution, for
instance, immediately emerges as an entity capable of adopting policies detri-
mental to the power of the old landed élite (e.g., by taxing the tithe on the
harvest that is their primary source of income) and using the new tax revenues
to incentivize productive investments. The latter favors the capitalist economic
philosophy proper to the emerging capitalist élite.
The backward Ottoman capitalist economy was heading toward a limping
macroeconomic change such that capital accumulation and financial profit
were placed in the range of a new economic way-of-thinking. The British dip-
lomatic élite did not hesitate to encourage such new transformations. For
example, the British Ambassador to Constantinople, George Goschen, reminds
us how financial reforms must prevail above all others to give the Empire a
prosperous future.8 Economic and political stability is a prerequisite for attract-
ing foreign investment and ensuring profitability.9
The Egyptian case, however, differed in terms of existing class structure.
Muhammad Ali embodied a new social group that gained power in the hands
of the Mamluks through their direct physical extermination. This brutal
action gave the ruler carte blanche. Egypt thus moved toward an organic plan
of development that sought to emulate the successful transformations of
European industrial societies sheltered from the conservative interference of
the old ruling class. However, the existing divergences between the new ruling
élite and the typically economic-financial élite were evident. As in Ottoman
lands, the capitalist élite in Egypt mainly belonged to the so-called foreign or
religious minorities who benefitted from the capitular rights of extraterrito-
riality: mainly the Greeks, Armenians, Italians, and Jews – groups considered
the primary agents of contemporary Egypt’s economic and social transfor-
mations (Deeb 1978). Their location in Alexandria makes clear that city’s
urban- commercial vocation. If Cairo becomes the city of bureaucratic-

administrative élites, Alexandria is primarily for the economic-financial élite.
The latter urban center grew exponentially between 1805 and 1849 thanks to
commercial ties with the European business world. Note that Alexandria had
only three European citizens at Muhammad Ali’s seizure of power. This
number had already increased considerably by 1830, although with the crisis
of 1818–1819, many European citizens were expelled from the city. In 1822,
there were 21 European and local trading companies in the coastal town; by
1837, there were 69 (Deeb 1978).
Compared to Constantinople, Cairo wished to keep certain State monopo-
lies in place to ensure secure profits and a preferential market. Muhammad Ali,
Abbas, and Said gave significant State aid to local merchants to compete with
European and Levantine merchants. However, integration into the interna-
tional marketplace and Egypt’s growing importance as a supplier of raw mate-
rials to the fierce British textile industry increasingly empowered the capitalist
élite. The latter, indeed, relied locally on Christian communities often deemed
most loyal to Western powers.10 Local non-Muslim communities were key to
establishing transnational trade interconnections, especially in the wake of the
cotton prices boom that occurred between 1861 and 1866 (caused by the
1861–1865 American Civil War). Such ties only increased with Egypt’s recourse
to international capital markets. Suffice it to say that under the reign of Abbas
there were about 10,000 foreigners in Egypt, while in 1864, there were about
90,000 (Deeb 1978). The modernization of Egypt before the British occupation
owes much to the activism of two social groups: the foreign commercial and
financial class, attracted there by investment opportunities, and the class of
Egyptian intellectuals educated in the European way in local foreign schools
(Tignor 1966, p. 25).
As in the Ottoman case, the Egyptian case relied increasingly on foreign
credit paving the way for a more significant influence of the capitalist élite in
State affairs. For example, Ismail’s reign was characterized by an increasing
reliance on foreign experts, capital, and companies, if only to supply machin-
ery to local industries and infrastructure projects, often financed with short-
term loans that large profits confer on foreign and local capitalists. Generally,
the local élite remained a land-bound conservative force in Egypt, while the
Levantine and foreign élite remained more interested in credit, trade, and
industry (Kalkas 1979).
Egypt shows how integration into the international market can also be
exploited for the benefit of local society in the presence of a straightforward
political project. However, much of Egyptian growth was based on semi-
slavery, albeit a capitalist model of exploiting local labor. However, despite
clear elements of success, Egypt failed to limit growing foreign influence and
progressive economic subjugation. Advanced integration into the international
market made Cairo increasingly dependent on modern Western technology
and on the élite and states that retain the keys to its access. The 1845 Act made
the penalties for non-payment of debt more severe and strict. Swearing an
oath, which held great significance in Islamic courts even in commercial mat-
ters, had no place in the new capitalist-inspired orders. Such transformations,
though the result of internal dynamics, were also the result of the direct influ-
ence exerted by foreign and Levantine merchant communities on the ground
(Ghazaleh 2013).
However, even in Egypt, the creation of the Caisse de la Dette Publique
(1876) and the occupation of the Ministry of Public Works and Finance by a
Frenchman and an Englishman show how failures in international credit man-
agement can pave the way for foreign control and an organic plan of local
transformation to benefit capital-holding forces.11 Economic difficulties follow-
ing the 1875 bankruptcy removed and stunned many local forces opposed to
such changes.
England’s military occupation of Egypt in 1882 following the chaos
unleashed by the bankruptcy certainly facilitated the introduction of liberal-
capitalist reforms. Robert Owen provides an excellent description of British
reformist action in Egypt:
[…] its own justification for what would now be called free- market
reforms, to be carried through, in the teeth of a strong nativist reaction,
by a handful of local politicians identified by their western financial
advisers as the leaders of the reform party. In Baring’s case, there were
sincerely held opinions, although based, as yet, on quite limited experi-
ence, and strongly encouraged, we can be quite sure, by people.
(Owen 2004, p. 136)
The British will rely on a handful of local politicians known to be compliant to

introduce specific financial reforms. Egyptian reformism after 1882 is obvi-
ously affected by strong British influence. Again according to Owen:
In other words, the country would now be subject to the familiar colonial
process by which the more reforms were implemented, the more further
reform was seen as absolutely necessary; and that the more extensive
these reforms became, the more Baring and the British believed that they
could only be executed by European personnel.
(Owen 2004, p. 233)
The British occupation eliminated many pockets of internal resistance. Indeed,

the more reforms were introduced, the more necessary further reforms were.
But to achieve such transformations, the British, especially Lord Cromer, con-
sidered the employment of European personnel indispensable.
The Chinese pathway to the power of the rising capitalist élite followed a
different modus operandi. The role of merchants in the Chinese tradition is of
great importance, albeit deprived of certain political powers. However, follow-
ing the Opium War and the Taiping Rebellion (1850–1864), there occurred a
realignment of the merchant class, including provincial and regional
interconnections, grappling with increasingly decisive foreign interference.

Thus there was a transformation of the merchant class in terms of China’s
unfolding integration into the international capitalist market. As early as the
mid-nineteenth century, there emerged a social group bearing new functions
and business approaches: the newly born comprador class. Following the Treaty
of 1842, this élite became increasingly representative of the capitalist interests
of foreigners on the spot, later transforming into salaried managers and then
independent entrepreneurs dealing with foreign merchants. Indeed, this social
group is central to the global chain of trade and the interests of those in or
gravitating within the anti-market. Chinese compradors played a crucial role in
facilitating capital accumulation and the flow of goods to China’s boundless
domestic market by providing access to the basic goods needed and informa-
tion regarding the exchange rate of currency circulating within China’s terri-
tory (Hao 1970).
The compradors are joined by an emerging group of merchant-financiers
who occupy semi-official positions in bureaucratic-administrative companies
with advisory roles in fiscal matters. They are compensated for their help by
government protection of their private business ventures (such as small and
medium credit activities and setting up small banks and pawnshops). However,
China’s rising capitalist class prefers to deposit its savings in local foreign
banks that use silver as collateral for new productive investments in the
local market.
The rise to power of this class increases as China becomes more integrated
into the global market. The influence of this native-born capitalist élite with
extensive trade and financial ties to the Western world (in fact, the United
States and Japan also play the role of great powers in China) is rewarded with
the Chinese government creating the first Ministry of Commerce. The new
capitalist society needs a capitalist class to represent it (Chan 1982, pp.
419–420).
As much as it lacked a modern institutional base conducive to a full-fledged
transformation of society toward a capitalist order, the reformist process
known as the Self-Reinforcement Movement (1861–1995, 1901–1911) high-
lighted the importance of adopting in the economic and financial spheres cer-
tain norms, rules, and institutions that drew on the capitalist and
Western-inspired system of production. In this regard, we must remember the
well-known Wade-Hart Memorandum of 1865, where the notorious British
president of the Maritime Customs Service (tasked with managing customs
revenue and subsequently securing some foreign loans) advised the Chinese
government to adopt a series of external-inspired reforms such as adopting
innovative European technology, which included railroads, telegraphs, and
mining machinery (Kou 1982, pp. 513–516; Kaske and Lin 2022; Sheehan and
Zhu 2022). By 1914 some of these recommendations had been accepted and
adopted, despite the Chinese State’s initial failure to take up these suggestions
due to the government’s fear of excessive foreign influence in the Empire’s eco-
nomic life.
4.3 Foreign debt and the great capitalist transformation

After negotiating the first international loan in 1854 to support the consistent
expenses for the Crimean War (1853–1856), the Ottoman Empire began a pro-
gressive public borrowing policy leading to financial bankruptcy in 1875. The
lack of domestic resources is thus easily and dangerously overcome by relying
on the international capital market (Çiçek 2010, p. 184). The more the Empire
became indebted to foreign investors and banks, the greater the demands for
encroachment and mortgaging of the safest and wealthiest tax revenues to
secure interest payments on the principal. In order to effortlessly pay off its
foreign debt, the Ottoman State began a process of convergence with leading
capitalist countries by initiating an induced process of foreign-led moderniza-
tion of public finance.
Debt becomes a tool to exert direct pressure for greater economic openness.
However, more significant pressure from market forces materializes when the
debtor country begins to decline, such as when the financing of old debt is
carried out by issuing new debt. The more access to the capital market becomes
critical to the functionality of the indebted state, the more the capitalist élite
gains shares of power.
For example, the well-known French banker Théodore Berger (a member of
the Paris Commission of the Imperial Ottoman Bank founded in 1863, with
central banking and issuing functions and capitalized by British and French
funds) did not fail to encourage the indebtedness of the Empire to place addi-
tional mortgages on the country’s wealthiest revenues. The problem is not the
debt per se but how it is used. Easy access to the international capital market,
especially during that phase of global market expansion (which runs from
1847–1873, through the Cobden-Chevalier Agreement of 1860, and on to the
Great War and the various crises of 1873–1875, 1894–1896, 1907, and 1913)
made the Porte dependent on external resources. Abundant cheap capital was
found in the market during the expansive phase of capitalist openness and
development at mid-century. The Empire took advantage of this by negotiat-
ing eight large international loans through the mediation of major European
banks and the Imperial Ottoman Bank. However, the arrival of the 1873 crisis
put the Ottoman State in serious trouble. The Porte had come to finance even
current spending with borrowed resources. The unproductive use of financial
resources made the foreign debt a weighty boulder on the Empire’s shoulders.
Excessive financial exposure and the economic backlash of 1873 caused the
Empire to default in 1875 and 1876. The withdrawal of international capital
left the Empire empty-handed. The default and financial crisis only increased
demands for financial expropriation from creditors. To return their invest-
ments, they sought additional tax revenues to mortgage to enable payment of
interest due.
Excessive exposure to the international capital market rendered the Otto-
man Empire dependent on foreign creditors and banks. To normalize the situ-
ation, the Porte was forced to return to the market and, to do so, had to accept
the terms of creditors. The various foreign currency-denominated loans, often

with a gold payment clause, required the indebted country to find new hard
currency for interest payments. By not exporting high-value-added goods, the
Empire was forced to reduce expenditures and increase the exploitation of its
resources considerably.
Foreign debt is strongly linked to reforms in public finance. Following the
first international loan in 1854, the well-known Hatt-i humayun reform pro-
gram was introduced in 1856. This plan included, among other things, creating
a central bank and State agencies to control the State budget and the recogni-
tion of private property even for Ottoman subjects of non-Muslim religion
(Hanioğlu 2010, p. 20). This reformist process was mainly an expression of an
internal-driven agenda. However, some reforms benefitted the interests of local
and international capitalist élite. Some reforms aimed at modernizing the
country by further integrating the Empire into the global market. Indeed, the
Ottoman bureaucratic-reformist élite were persuaded by the ability of some
market-oriented reforms to help save and improve the country’s macroeco-
nomic prospects. Ottoman salvation was also integrated into the European
capitalist system (Keyder 1987, p. 37).
In this regard, both the role of the Ottoman Imperial Bank (BIO) and the
Ottoman Public Debt Council (CADPO) must be analyzed. The BIO had cen-
tral banking and issuing functions. Still, it was far more interested in pursuing
speculative deals, which are more profitable in the short-term, than in making
itself the bearer of credit concessions to trade and the development of local
productive activities (Eldem 2005). Like the plethora of small and large local
and European financial institutions that move skillfully among the various
financial centers, this bank was also keenly interested in negotiating public
loans on behalf of the Porte. The evaluation of such credit offers was based
primarily for its own financial gain and not in the interests of the Ottoman
State, whose central bank functions it assumed. Loans had first to be approved
by the bank’s European offices in Paris and London. At the same time, foreign
creditor groups appointed English, French, German, Italian, and Austrian del-
egates to the Ottoman Public Debt Board. Again, this institution managed the
Empire’s richest and most secure tax revenues for debt payments. Moreover,
these revenues were put up as collateral for a whole series of investments put in
place mainly in the interests of foreign capital. Europeans, however, were con-
temptuous of the Ottoman State and its shortcomings related to its modern
management of finances.
European engagement in the Ottoman State’s finances can only be fully
understood if certain sociocultural aspects are also taken into account. The
European approach was replete with a good deal of prejudice and so-called
social Darwinism. However, in an open economy forged by the modern laws of
capitalist economics, those with financial-technical know-how could directly
influence and dominate those who lacked it. British Ambassador Henry Bul-
wer noted how “Turkish ignorance” in economic and financial matters was
well known and that only the Europeans (specifically the British and French)
could provide Constantinople with the tools to improve its condition. Even the
City’s financial newspaper The Economist advised that ensuring a system of
modern rules, such as a reform of the judiciary and tax system, would suffice
to attract foreign capital and let it prosper for the “good of all”. The financial
failure of the Porte in 1875 was undoubtedly a turning point in this process of
integration into the capitalist world-economy. The Empire was pushed to
increasingly integrate into the global market, whose regulations were heavily
influenced by those forces present in the Braudelian anti-market.
Such integration bore fruit. Between 1888 and 1914, foreign direct invest-
ment in the Ottoman Empire quadrupled, especially in the railway construc-
tion sector (Geyikdagi 2011, p. 74). Adherence to this system of rules also
brought benefits. Through the actions of the CADPO and the BIO, acting
within the new basket of regulations, codes, and standards typical of the capi-
talist economic world, the Porte benefited from an incoming inflow of foreign
capital at a lower cost in terms of the issue price and interest paid (Blaisdell
1914; Birdal 2010, p. 86; Conte and Sabatini 2014). As an institution, the
CADPO promoted a whole series of financial reforms in the field of public
finance, especially in terms of managing the customs annuities, tobacco, salts,
licenses, etc., assigned to it. The aim was to increase its share of profit and
revenue by introducing more effective accounting systems or through staff
training while strenuously fighting the widespread scourge of smuggling via
the new organization of the police and armed forces. These became increas-
ingly active instruments to guard and protect the capital and the newly estab-
lished order. According to Karl Polanyi (2011, p. 15), representatives of
European finance were, in fact, in charge of Ottoman finance, acting not only
as agents of capitalist interests but also as political intermediaries on behalf of
the great European powers.
Despite European intervention and lower operating costs, the Empire did
not stop its race to debt. The new financial institutions, however much they
introduced new and modern management techniques, were aimed more at fos-
tering the profitability of capital by fueling credit demands than at the actual
amortization of the country’s foreign debt. These institutions worked more for
investment security through budget security than to free the country’s reliance
on debt instruments. External debt also played a significant role as a driver of
more profound societal transformation in Egypt. The attrition of Egyptian
reform efforts led to the weakening of that ambitious program of induced
industrialization strenuously pursued by Muhammad Ali. The more domestic
productive capacity diminished, partly because of the disruptive action brought
about by Britain and France, the more Egypt lost an internally driven propul-
sive action crucial to enabling its transformation into a full-fledged industrial
country.
Cairo was forced to follow a different developmental pathway by focusing
on exporting raw materials and importing finished goods. Under such condi-
tions, integration into the world market considerably reduced the country’s
sovereignty. As industrial production declined, the State authority’s economic
(and therefore tax-levying) strength weakened. This meant that Egypt looked
with increasing interest to the additional sources of credit to be found in the
international market to meet its revenue shortfalls (Issawi 1970, pp. 395–411).
Integration into the global market in a second-ranking position made Cairo
weaker. The inflow of foreign investment was more instrumental in feeding the
investors’ economic returns. The public and strategic infrastructures, such as
railways, were meant to maximize foreign capitalists’ returns while not consid-
ering domestic growth and development needs. This is what happens when we
integrate into the international market in a secondary position without a real
domestic development strategy. Foreign investment is only sometimes an abso-
lute good for the socioeconomic development of a given country. Indeed, it is
no coincidence that Egypt’s public debt problems date back to the construction
of the Suez Canal in 1856 (Giuntini 2021; Curli 2022). Failing to find a mini-
mum number of investors willing to support that project, Britain induced Vice-
roy Said Pasha (1822–1863) to acquire a substantial amount of shares in the
company in charge of building the canal (some £3,640,000 pounds worth of
shares). Egypt began accumulating a dangerous foreign debt to support an
infrastructure built by a foreign company. However, the growing disparity
between the forces in the field was evident (Penfield 1895). Indebtedness in the
foreign-denominated currency for Egypt meant delegating an essential part of
its economic sovereignty to London and Paris (Landes 1958).
In short, out of 200 million Egyptian pounds invested in the country up to
the Great War, about 94 million went to support the country’s public spending.
The remainder ended up in the private sector’s hands (Hansen 1983). The sig-
nificant inflow of foreign credits heavily mortgaged the country’s sovereign
future. The often unwise and unproductive use of these credits did not put
Egypt on the road to recovery. On the contrary, the high returns the investors
required were usually paid for by resorting to further borrowing. However,
Egyptian indebtedness was aggravated by its inability to resort to public under-
writing without formal Ottoman consent. This constraint was removed only in
1873 (Marsot 1975). Floating debt in hard currencies was the sword of Damo-
cles for the Egyptian government, at least at this early stage. The rising cost of
servicing foreign debt put the Egyptian Treasury at stake.
Domestic reforms in the fiscal sector must raise more revenues to cover the
ever-increasing interest payments due. However, the Egyptian government
failed to achieve this goal aimed at rationalizing tax revenues on a modern
basis. The policies of economic liberalization advocated by Said Pasha, influ-
enced by the presence of many advisers from European financial circles, aimed
to increase cotton export earnings on the international market (Landes 1958).
Unfortunately, fluctuating prices of this raw material and an increasingly inter-
nationalized debt made it quite challenging to engage in serious planning in
terms of revenues and expenditures on which to base planning for fiscal con-
solidation (Owen 2011, p. 219). We know that the peak of financial imbalance
was reached in 1868 when a general revenue of nearly 5 million pounds was
contrasted with a deficit of nearly 16.5 million (Crouchley 1938, p. 274).
Rising Egyptian debt and financial difficulties only increased Egyptian

dependence on foreigners, who did not hesitate to use their influence and lever-
age to meddle in the country’s internal affairs (Hershlag 1997, pp. 93–94). With
the end of the American Civil War in 1865 and the return of US cotton to the
global market, Egypt entered a very difficult phase. Having based its economy
mainly on the export of raw materials, which are the first victims of market
fluctuations, Cairo had to deal with the falling price of cotton on the world
market. Egypt thus saw its income from the sale of cotton reduced considera-
bly, which caused severe problems for the stability of the public budget with
regard to the payment of the floating debt. In order to remain solvent, the
Egyptian Treasury began to borrow heavily in the short term. However, finan-
cial disaster was inevitable.
The 1876 default was an expected outcome almost concurrent with the
Ottoman one (Hansen 1979; Feder and Just 1984). The default on foreign debt
thus enabled the establishment of a receivership. The Egyptian Caisse de la
Dette played a far more passive role than the Council of the Ottoman Public
Debt Administration, which had far greater critical tasks to accomplish in
terms of rationalizing the Ottoman economy and promoting internal reforms
aimed at modernizing the agricultural sector, preventing smuggling, and
increasing state revenues (Issawi 1970, p. 177). In any case, the Caisse was also
a precursor and a promoter of a whole series of external-induced reforms in
state taxation, monetary policy, and rationalization of public expenditures.
Uncontrolled foreign debt had thus been the leading cause of the loss of Egyp-
tian economic sovereignty, along with the ambitions of its ruling house and the
interests of the capitalist élite inside and outside Egypt. The integration within
the Western- inspired capitalist world- economy caused profound socio-
institutional transformations, which the Egyptian State could not manage
according to Western-origin criteria.
The capitalist élite sees the opening to the market as an excellent opportu-
nity for profit-increasing policy. The internal-driven reforms program aimed at
allowing smooth integration within the international market was unsuccessful.
As a result, the upward interest rate paid on the debt service and rollover was
detrimental to Cairo’s own financial stability.
The abolition of much of the State monopolies, the mortgaging of the vice-
kingdom’s most secure rents, and the ease with which various financiers and
creditors offered credit to the spendthrift khedives led the country to financial
disaster. Moreover, it sparked a political débâcle following the British invasion
in 1882.
The path taken by China, however, seems different with regard to the
nature, chronology, and capacity of external debt to act as a deus ex machina
for the country’s subjugation and to influence the external-driven reform
strategy. First of all, China did not declare default until 1921. Financial
default, therefore, was not used as an instrument to open the country to more
significant outside influence. However, there are some similarities between the
institutions created under the auspices of a foreign power as the engine of that
rational-capitalist reformist process. Even before the outbreak of the Second

Opium War (1856–1860), the Chinese Maritime Customs Service (known as
Maritime Customs MC) was created in 1854 with the task of collecting taxes
for goods shipped in and out of China (as expected, a result of the opening of
the various trading ports and the guaranteed rights of extraterritoriality).
This institution was set up in Shanghai and ended up in the hands of Europe-
ans in the face of the alleged Chinese inability to collect such rents during the
Taiping Rebellion (1850–1864). The MC was nominally an agency under the
control of the Chinese government. Foreign ruling cadres, mainly British,
German, Americans, French, and Japanese, controlled the MC. Well-known
and long-serving director Robert Hart was highly influential, as he made him-
self the bearer of a whole range of reformist advice (Bickers 2008).
Like the Caisse de la Dette and the CADPO, the MC, although not directly
related to the management of foreign debt (Savage 2011) – (it would only
become so later when the annuities assigned to it were used as collateral for
loans granted by foreign banks) – is pivotal in promoting a whole series of
domestic reforms aimed at economic rationalization from a liberal-capitalist
perspective. It is made possible by the control entrusted to it of the administra-
tion and management of national customs, postal administration, ports, and
anti-smuggling operations. Even more than its two Middle Eastern sisters, the
MC was also a proponent of proposals for monetary reforms. As we will see in
the next section, the MC paved the way for using an official silver currency for
tax collection known as tael. The annuities controlled by the MC allowed it to
act as a key agent, as the guarantor of guarantees offered on loans, for China’s
opening to the international capital market (Van De Ven 2014, pp. 133–171).
But the MC was only one of many para-governmental institutions promoting
such transformations. As already noted, the Ministry of Commerce, established
in 1904 under the auspices of the country’s emerging merchant-capitalist élite,
advocated a series of reforms and new trade codes for the capitalistic develop-
ment of society. However, this institution attempted to exclude foreign compet-
ing élite from controlling Chinese companies and corporations as much as
possible. In addition to a broader and more accessible scope for action by Chi-
nese élite, such action evinced a phase of intra-élite competition for greater cap-
ital control within the forces in the anti-market. However, the rationalization of
law and the economy stimulated a large inflow of foreign investment during that
period (estimated at 100 million U.S. dollars between 1903 and 1908), which
flowed mainly into the railroad sector (as was the case in the Ottoman Empire).
In retrospect, we can identify the Taiping Rebellion as the turning point for
Chinese State finances. There was a return to paper money and the beginning
of China’s fiscal deficit policy. The latter weakened the State and ushered in the
beginning of the internal and external-driven reformist process. In 1861, the
Kiangsu provincial government obtained the first imperial permission to bor-
row three hundred thousand taels from foreign merchants under the guarantee
of Shanghai’s customs revenue. Although this loan had a simple annual matu-
rity, it paved the way for further negotiations in 1861, 1864, 1875, 1896, and
1898. The MC and foreign banks thus began to act as financial intermediaries
for foreign loans. However, only in 1877 did a bank, for the first time, offer a
long-term loan to the Chinese government. Negotiating this 5 million tael loan
through the Hong Kong and Shanghai Bank (HSBC) officially opened China
to the international capital market (Goetzmann, Ukhov, and Zhu 2007).
Linked to the London financial world and especially the Westminster Bank,
the HSBC acted as a kind of State Bank (China would have an official one only
after 1928) following its founding in 1864. The HSBC also intervened in the
secondary market by buying outstanding Chinese debt securities when the
price fell and then selling them back once it rose. Its function can be said to be
that of an unofficial lender of last resort, like the much more official and rec-
ognized Ottoman Imperial Bank, although its monopoly on the provision of
loans and advances was not as exclusive as that of the Ottoman institution
(Eichengreen et al. 2021, pp. 70–71). Prior to 1893, China had taken out only
relatively small loans without a significant commitment to State annuities.
However, due to the costly Sino-Japanese War, China was forced into long-
term debt with an Anglo-German consortium in 1896. As collateral, customs
rents were mortgaged for 36 years (Osterhammel 1999, p. 166). Foreign banks
such as the HSBC, the Deutsch-Asiatische Bank (until the Chinese takeover in
1917), and the Russo-Asiatic Bank (until its liquidation in 1926) made signifi-
cant profits from debt service and currency exchange necessary to meet the
gold payment clauses in the loan contracts.
Moreover, compared with the Ottoman Empire and Egypt, in the Chinese
case, the burden of external conditionalities on the country’s sovereignty can
be attributed not only to the foreign debt (which remained relatively small) but
to the significant expenses of war indemnities. These had to be paid in gold
because of their military defeats. Thus, from a financial point of view, there
was a sort of partnership between para-governmental institutions such as the
MC, which managed the country’s annuities, and foreign banks acting as busi-
ness intermediaries (Feuerwerker 1982, pp. 180–185). The payment of debts,
which Chinese governments did not hesitate to underwrite (albeit more cau-
tiously than in the Middle Eastern countries mentioned above), resulted in an
extension of property rights (think of the local élite owning said bonds) and a
respect for the inviolability of the contract. The emergence of these two con-
cepts and their increasingly widespread dissemination and application among
local economic forces ushered in a modern banking system based on the
liberal-capitalist model of free trade, debt management, and monetary issu-
ance that harkens back to the Western world. However, the first government-
influenced bank was the Imperial Bank of China, founded in 1897 on the
HSBC model (later transformed into the Commercial Bank of China and later
the well-known Bank of China; Ma 2019). Indeed, the government showed
that it understood how a modern banking system is key to following up on a
modern economic transformation (Cheng 2003, p. 25).
However, thanks to British support, after the 1911 revolution, the MC took
possession of all the annuities under its custody by depositing the proceeds with
the HSBC. This was an action aimed at ensuring the continuum of payment of
debts incurred to the detriment of the latest political line imposed by the new
republican China. What took place in China in 1911 resembles what occurred in
the Ottoman Empire in 1881 and in Egypt in 1876. The growth of the modern
banking sector can be read from the perspective of the gradual increase in the
strength and influence of the local and international capitalist élite: it occurred
because of the increased space given to them by a domestic reformism that can-
not help but admire the strength of European-capitalist modernity, which
simultaneously dictates its political line through the power of its own capital.
4.4 Monetary reforms in practical terms

The Ottoman monetary reform of 1844 played a decisive role in the Empire’s
integration into the international market and adherence to the liberal-capitalist
order. As in many realities of the semi-periphery of the capitalist world-
economy, there was a lack of currency homogenization in the Empire and the
presence and use of European and Indian currencies as the current medium of
exchange. From the perspective of modern currency rationality, this did not
benefit the stability of the eastern State and its Egyptian component. There-
fore, the bureaucratic-administrative and financial élite saw monetary reform
as necessary to bringing order to disorder and giving credibility to the new
reformist process as part of an effective modernization process with an inter-
national scope. The adoption of a monetary system that adheres in part to
gold, which Şevket Pamuk (2008) refers to as a ‘limping gold standard’, confers
undoubted advantages on those who operate in the international trade sector,
that is, those élite in the anti-market, and at the same time increases the impe-
rial capacity to create its orderly monetary base.
The Empire adopted a bimetallic system – using gold and silver – which
mitigated deflation due to the adoption of a solely gold-backed system.12 At
the same time, silver’s ability to fluctuate more and its lower intrinsic value
compared to gold gave the Empire a payment system more in line with the
actual economic capability of the country. In addition, silver functioned as a
kind of ‘cushion’ against the contractions typical of capitalist economies: in
the event of a crisis, it could give the Ottoman economy more leeway to avoid
falling into a deflationary spiral. Thus, the Empire used silver for those small
daily economic transactions that provided liquidity to the domestic market
(Frangakis-Syrett 2007, pp. 61–63). Using bimetallism and/or the ‘limping
gold standard’ highlights different class interests in the Ottoman economy. The
financial and mercantile élite in the anti-market used gold extensively for their
international transactions. At the same time, those in the market economy,
who generally identify with the petty and middle classes and small and large
landowners, preferred to use the ‘inflated’ silver currency. However, the official
adoption of the gold standard after the 1880s, that is, following the financial
bankruptcy of 1875 and the receivership by European creditors, helped the
Empire to further integrate itself into the global marketplace by further
strengthening the economic power and leverage of the relevant social class.13
At the same time, full adherence to the gold standard gave the financial élite
more leeway, allowing them to increase their share of capital accumulation and
capital profit rate.
On the other hand, adherence to the gold standard, which only came into
full force in Egypt in 1885 following the British occupation, did not involve
China, whose monetary history followed a distinct pathway from that of the
Ottoman Empire. In fact, since the Middle Ages, China has had a trade surplus
with Europe, which resulted in, first, a massive acquisition of European silver
and, later, of American-Spanish silver. The reales de a ocho flowed from the
Americas to China via imperial Spain. It was only with the British export of
opium to China from the end of the eighteenth century that the European
deficit began to fall becoming a surplus in the second half of the following
century (Cipolla 1996, p. 71). The end of the Chinese surplus era paved the way
for the contraction of the Spanish dollar on the Chinese market, which was
mainly used in the more prosperous coastal areas, as opposed to copper, which
circulated more inland. Already the Chinese merchants in Shanghai at mid-
century progressively abandoned the dollar to accept the new Shanghai thaler
known as the tael (King 1965, pp. 70–73). However, as in the Ottoman Empire,
the Chinese monetary system lacked an official standard such as a reference
currency. In the aftermath of the bloody Boxer Rebellion (1899–1901), the new
Chinese reformist plan, from an economic-financial perspective, relies heavily
on acceleration in a modern and thus capitalist pathway. Increasing the coun-
try’s integration into the international market required the creation of a mod-
ern monetary system, possibly adhering to a standard that would denationalize
the chaotic local issuance, especially in the aftermath of the Taiping Rebellion,
which caused heavy inflation and the allocation of a kind of inconvertible
paper money similar to the Ottoman Kaimé (Ma 2012).
From 1889 onward, several private mints were opened to profit from sei-
gniorage rights. These minted their currency without any standardization or
homogenization with the others, even in terms of the exchange rate, weight, and
value. Along with the traditional silver sycee currency, copper currency, and, as
we have seen, foreign silver dollars circulated abundantly. Despite the gradual
replacement by the new Shanghai tael, a centralized standard was still lacking.
Adherence to the gold standard would have benefitted financial élite and
anti-market forces. However, a gold-anchored system would be too rigid to
work effectively in a capitalistically underdeveloped economy. In China, local
forces could still control some aspects of economic policy vis-à-vis Ottoman
and Egyptian ones.
Nevertheless, monetary reform was becoming increasingly necessary and
called for by local and international mercantile and financial forces. Article II
of the 1902 Mackay Treaty between Britain and China laid out this need in
black and white. There were various pressures to bring about a monetary
reform aimed at adopting the gold standard. Sir Ernest Mason Satow, British
high commissioner and diplomatic minister in Peking until 1906, exerted his
influence on the Chinese government, particularly on China’s finance minister

Chao Erh-sun, to bring about a real currency reform.14 Subsequently, the
International Foreign Exchange Commission of 1903 – American expert Jere-
miah W. Jenks was called in to head it – proposed the close adherence to the
gold system with a ratio of 1.32 to silver and the start of this reform process
under the aegis of foreign advisors.15
Behind this maneuver, there was an apparent rift among the great powers
over a question of political influence. However, the Chinese government real-
ized that adopting such a monetary system could have severely affected social
stability, with heavy repercussions on the country’s sovereignty. Even the gold
exchange standard, considered a more flexible monetary system, was discarded
as a possible alternative and compromise. However, with a deficit balance of
payments, it would have been difficult for China to import hard currency to use
as collateral.16
In China, copper provided the same capability as silver in other countries.
In addition, the proposed gold-silver exchange rate would have been too high
and would have put the Chinese government in severe difficulty in the event of
a downturn in the price of silver, perhaps due to the outflow for the payment
of war indemnities owed to the Great Powers.17 The gold standard and gold
exchange standard were not implemented because, in the former case, it would
have been too expensive and, in the latter case, too risky (Matsuoka 1936).
However, the resistance of the sovereign authority had to clash with the deter-
mination of national capitalist forces, expressed through the annuity board –
later the Ministry of Finance – and the foreign ones in favor of a single,
nationally recognized, and guaranteed standard. Thus, in 1908, the silver
standard was adopted, leaving copper to circulate as the daily exchange cur-
rency (Ichiko 1982, p. 404; Li and Yan 2022).
The adoption of the silver standard paved the way for a broader project of
monetary reform. Chinese resistance to a full-fledged capitalist transformation
of society (and, with it, the concession of more power to the social forces that
appealed to it and the imperial-capitalist powers) waned in the final years of
the Qing dynasty. The last reformist era is characterized by a more significant
‘push forward’ toward integration into the liberal-capitalist market. Foreign
advisors – such as Gerard Vissering, Governor of the Bank of Java, then under
European control – were consulted for the 1911 reform. The foreign banks
advised on how best to implement the reform of the monetary system. Even
the Western press observed how monetary reform was linked to “the desire of
business interests to open up [China’s economy]”. The loan proposal was key
to pushing ahead China’s economic openness.18 This was known as the Cur-
rency Reform and Industrial Development Loan at 5 percent. The latter aimed
to withdraw and replace the devalued monetary base with a new one.19 How-
ever, the Chinese feared that such a loan arrangement, which was also based on
the mortgaging of significant state rents, would lead to indirect financial con-
trol. These fears became a reality with the outbreak of the 1911 revolution that
ended the Qing dynasty (Dayer 1988, p. 63; Bickers 2018).
England material expansion England inancial expansion
1815 1914
Repeal of the Corn Cobden Onset of the Great
Laws Depression.
Ottoman- Crimean War Russian-Ottoman

Egyptian War 1853-56 War 1877-78
1839-41
1838 Balta Liman

1844 Ottoman 1854 First Land Imperial OPDA 1881
agreement
currency reform foreign Act Ottoman Bank
borrowing 1858 1863
Treaty of London 1841
End Egyptian monopolies 1856 Code of Sa'idiyah, 1867 foreign property,
1871 Muqabalah
Gulhane End of
Edict oficial
Tanzimat Tanzimat
Figure 4.1 Stages and timing of Ottoman and Egyptian reform.

England material expansion England inancial expansion
UK repeal of the Cobden Start of Great

1914
1815 Corn Laws Depression
1899-1901
Boxer Rebellion
Second
1884-1885 1894-1895
First Opium Opium War
Sino-French Sino-
War 1839-1842 1856-1860
War Japanese War
-) Additional open ports
1842 Treaty of Nanking and commercial law for
foreigners also inside 1908
Silver Standard
China.
1854 1864 1877 First proposed long-
Chinese Maritime Hong Kong and term foreign bank loan
Shanghai Bank
Self-reinforcement movement 1861-1895 Second phase reformism 190l-1911
Figure 4.2 Stages and timing of Chinese reforms.

Notes
1 “Convention of Commerce and Navigation between Her Majesty and the Sultan of
the Ottoman Empire”, London Gazette, December 18, 1838.
2 NA, FO 198/90, “Memorials by Sir A. Layard to the Sultan Regarding the State of
the Ottoman Empire, Reforms, etc.”, June 4, 1878.
3 Ibid.
4 Ibid.
5 One can also read from this perspective the various missions undertaken by the
well-known British politician and diplomat John Bowring (1792–1872) (Todd 2008).
6 This reformist phase is initiated following the defeat of Japan. It thus highlighted
how the Japanese reformism of Meiji was a success compared to that of the Chinese
Qing. British victories against China, the presence of local opposition forces to a
particular type of transformation, and greater attention from foreign powers pre-
vented China from following the Japanese example.
7 Based on the BIO model, other banks were also established in the Mediterranean
area. For example, the Bank of Morocco was founded in 1911 with the interested
support of the Bank of England, the Imperial Bank of Germany, the Bank of
France, and the Bank of Spain. Following requests from the powers, this bank was
given a 40-year concession to manage all financial operations, such as issuing paper
money. The liberal-inspired Italian newspaper the Il Corriere della Sera noted that
such an institution “will secure many reforms by the force of capital”. “Possible
Reconciliation in the Bank Question”, Il Corriere della Sera, February 26, 1906.
Foreign diplomacy acted alongside the forces of capital to facilitate the seizures of
the North African country’s resources by exploiting them.
8 Correspondence respecting the Financial Affairs of Turkey, 20, Mr. Goschen to
Earl Granville, Constantinople, 9 November 1880 (London: Harrison and Sons).
9 NA, FO 78/2436, 232, Earl of Clarendon to Lord Stratford de Redcliffe, 24 January
1856, London.
10 According to Saleh (2015), workers from the Christian community obtained more
skilled and better-paying jobs than workers from the Muslim community.
11 “Mr. Goschen and the finances of Egypt”, The Economist, 12 March, 1887.
12 “Monetary reform in Turkey”, The Times, 17 May 1912.
13 “The Finances of the Ottoman Empire”, The Times, 8 November 1892.
14 A, FO 371/21/12, “Memorandum on Chinese Currency Reform”, 4 July 1906.
15 “The Currency Problem in China”, The Economist, 10 October 1903.
16 Pressure for monetary reform also came from the China Association. The latter,
founded in 1889, represented the British merchants’ interests operating in China
(Boardman 1976, p. 89). The association also did not hesitate to encourage reforms
in public finance to come to grips with the proper management of public debt.
“China’s Finances. Views of the China Association”, The Times of India, 27 May
1909. The Shanghai Chamber of Commerce also made its voice heard to pressure
the Chinese government to initiate a pro-business currency reform. “To Urge Cur-
rency Reform for China”, New York Times, 26 April 1903.
17 “The Selling of Silver from China”, The Economist, 8 February 1908. “Monetary
Reform in China”, Wall Street Journal, 31 August 1910.
18 “Currency Reform in China”, Wall Street Journal, 27 April 1911. “Currency Re-
form in China”, The Times, 19 maggio 1911.
19 From W.J. Calhoun to the American Secretary of State, 230, Peking, 27 April 1911,
pp. 95–96, Papers Relating to the Foreign Relations of the United States, Govern-
ment Printing Office, Washington 1919.
Conclusions
The transformations brought about in semi-peripheral countries by capitalisti-

cally advanced countries, in association with the local élite, shaped the extra-
European world during the long nineteenth century. It thus emerges that
liberal-capitalist external reforms are a functional element in pursuing the pro-
cess of capital’s widening spiderweb to maximize its accumulation process and
ipso facto extend the bargaining power of the capitalist élite within the political
sphere. These reforms demonstrate, as Polanyi observed, that the process of
economic liberalization is not the result of the spontaneous evolution of the
market, but rather of direct action by those economic actors with most to gain
from this ‘great transformation’.
To simplify, the reforms are intended to induce a liberal-capitalist transfor-
mation of the sovereign authority and possibly the entire social body. The aim
is to internalize in semi-peripheral countries the logic proper to the capitalist
production system under the ideological custody of liberalism (Deneen 2019).
The rules of this economic ideology are presented as the result of an inaliena-
ble natural law that makes them, once applied, inviolable as the ultimate
expression of the justness of the value of particular and well-defined economic
interests. Thus, reforms are often promoted by those in control (the capitalist
powers) or who yearn to obtain control (élite in the semi-periphery) of the
capitalist world-economy to such an extent that they would directly benefit
from the expansion of the potential of the anti-market, especially in terms of
capital accumulation. In essence, reforms are intended to ensure that accumu-
lation does not reach a point of rupture with the social order such that the
established arrangements would be called into question (Sassoon 2021, p. 27).
Therefore, reliance is placed on the values of extending political rights and
reciprocity inherent in liberalism and national cohesion. Hence, the entire body
of society can be identified and recognized in capitalist development as the
engine of modernization.
Liberal-capitalist reforms, in fact, also aim at extra-economic control. Their
purpose is to facilitate the adoption of the liberal-capitalist productivist sys-
tem intended more as a faith than as a productive aseptic system. Just as there
is a religion of politics, there is likewise a religion of economics. Politics
becomes religion when it claims to attribute a sacred character to a secular
DOI: 10.4324/9781003441816-6
100 Conclusions
entity such as a nation, race, party, leader, etc. That is, when it claims to define
the ultimate meaning and purpose of individual and collective existence
through a complex of beliefs expressed through myths, rites, and symbols. Eco-
nomics becomes religion when the rules of economic engagement become non-
debatable dogmas.
The problem, however, is not liberal-capitalism per se, which undoubtedly
has been successful in terms of prosperity in a non-negligible number of
countries, but the principle that its same institutional replication can be just
as successful in terms of material well-being in countries that do not have the
same social, cultural, and economic background. Adopting a pre-packaged
system elsewhere may yield an ill-fated result. However, the urge and the need
to find new spaces for capital is placed before any collateral or structural
damage that a third country might suffer. The reforms promoted in semi-
peripheral countries are thus devoted to encouraging and maintaining a cap-
italist civilization pivotal to the interests of capital rather than a bourgeois
civilization where political and civil rights also occupy an important space.
The value of the ideology is decisive if it is supported by those capitalist
forces that give liberalism the capacity to assert itself globally as a specific
political doctrine capable simultaneously of hiding certain class interests
behind the value of particular political and civil principles (Sapelli 2015,
2018). The forces that own capital de-emphasize themselves behind the ano-
nymity of the market shaped by a well-defined ideology. In this way, liberals
become the arbiters of the shifting boundaries between the State and the
market while also playing the part of unbiased judges (Zevin 2019, p. 389).
The reforms institutionalize the principle that the market and its principles
dominate politics by limiting its room for decision-making and maneuvering
outside the basket of liberal-capitalist rules. The principles of classical eco-
nomics underpin the capitalist economy in its modern momentum. These
principles, among others, condemn deficit and debt but exalt open doors and
the rational and calculating mentality of the European Enlightenment tradi-
tion. Later, positivism and Social Darwinism would also play an essential
role in affirming the principle of natural dominance of a social group and
civilization over others. Suppose the fiscal deficit is evil in a liberal-capitalist
ideological framework: in that case, it must be tackled with the recipes of the
good, that is, of the new economic science that proposes a cure based on
liberal reforms.
In the era of liberal capitalism and then (neo)liberalism, specific economic
rules and principles are crucial to perpetuating clear-cut class interests. As we
have tried to illustrate, a stable and hard currency system, a balanced budget
policy, and public debt under control are well-defined socioeconomic control
instruments. In the (neo)liberal-capitalist order, a restrictive economic policy is
always preferred over an expansive one precisely because it serves mainly the
interests of capital-holders.
To allow the principle of mathematical rationality to prevail in economics
over social irrationality is to serve the interests of capital-holders. Only the
Conclusions 101
latter are interested in ensuring that the certainty of numbers is transformed

into an assurance of profits.
We observe, however, that liberal-capitalist principles also entered a crisis in
advanced capitalist countries following the Great Depression of the nineteenth
century (1873–1896). Although this ideology and the architecture of global
openness eventually fractured under the advance of the nationalistic and pro-
tectionist variant of capitalist development (referred to as the phase of imperi-
alism), a model inspired by the principles of economic liberalism continued to
be promoted in countries comprising the semi-periphery. We observe how,
both for England during the nineteenth century and for the United States dur-
ing the twentieth, the economic principles of economic (neo)liberalism become
one of the many ideological means of gaining acceptance for a specific model
of capital accumulation, albeit not ideological coherence. Therefore, this ideol-
ogy remains the guiding (and often binding) principle for peripheral countries
since it favors the legislative and ideological framework pivotal to maximizing
economic exploitation by states and capitalist élites. Ideological coherence is a
second-ranking principle to the much more material and aseptic need for sim-
ple accumulation and profit. Based on these considerations, we try to theoreti-
cally identify the market within the capitalist economic world. It is the
expression of a capitalist élite’s material and financial interests that, in a given
historical period, controls and dominates the economic space and the exchanges
in it at a level of transnational interconnectedness. Hence, adherence to the
market is nothing more than the false prospect of embracing a natural system
of exchange that recalls the naturalness and purity of an almost divine extrac-
tion. However, behind the circular outline of this exchange market lies the ‘vis-
ible’ hand of the hegemonic power, with its subsidiaries and the élites that
dominate the exchange world.
Reform, then, is an instrument of direct action by such a social group aimed
at expanding the sphere of influence and the field of domination of market
forces over the other organizational superstructures of society by promoting
the transformation of existing institutions or by stimulating the creation of
new ones, based on well-defined political and economic principles. Just as the
ancien régime rulers used armies to expand their territorial dominance, which
forms the basis of their expression of power, the dominant forces in the market
use reform to extend their dominion over those forces of material life that are
pivotal to the accumulation of capital and an increase in profit rate. How does
the reformist process contribute to changing a country’s social structure at the
core and at the semi-periphery? The reform-induced transformation process is
instrumental in anchoring the semi-peripheral economies to the market shaped
according to the rules imposed by the hegemonic power and other associated
capitalist powers. Once this transition has occurred, the member states, and all
the economic forces within it, will work within a system of functional rules to
benefit those capitalist élites – less in the nineteenth century, more in the fol-
lowing two centuries – operating within the anti-market. These global inter-
connections, delineated and defined through capital movements, allow élites to
102 Conclusions
de-territorialize and become increasingly stateless, that is, free to disengage

from a particular country to follow the performance of capital. This occurs
thanks to the support of new national economic regulations. Transitions of
hegemony between state and state can also be influenced by the new territori-
alization of these élites (even only as a business location), which often follow
the principles of loyalty to capital more strictly than purely national ones.
Some frictions and elements of incompatibility emerged between market
hegemony and the Westphalian-inspired principle of state sovereignty. As early
as the nineteenth century, sovereignty took on an increasingly less respected
value in favor of an emerging concept that draws on market loyalty. Those who
found themselves outside this circle were considered semi-states, and therefore
direct and indirect actions aimed at ‘re-educating’ them to lead the allegedly
misaligned country ‘onto the straight path’ of civilization were allowed, but to
their detriment. As much as civilizing action is beyond the scope of our analysis
and takes into account elements typical of social darwinism and u tilitarianism –
and, to use Edward Said’s (2013) term, of Orientalism as well – the cases exam-
ined of those countries comprising the nineteenth- century semi- periphery
illustrate how not being part of the ‘civilized’ world makes these states unwor-
thy of receiving the same treatment as the great powers. However, it is impossi-
ble to assert that liberal-capitalist society exhibits no inclusiveness toward the
new economic forces that wish to enter it to support the social pact of accumu-
lation by guaranteeing the profitability of investments (Bowles 2007, p. 80).
The action of reform is thus attributable to an act of ‘creative destruction’ that
redefines local institutions and rules to the extent that a given territory becomes
part of a social transformation process. However, reform works if supported
by a process of openness, globalization, or at least according to a principle of
extensive trade and exchange liberalization (Gaies, Goutte, and Guesmi 2019).
Only with internationalization can the anti-market impose its rules in a space
free of any dominant sovereign authority. It is a matter of filling a space left
unencumbered by national social regulations and prone to constant balances
dictated by the strength of one state over the others. It is no coincidence that
the first reforms were introduced following the signing of free trade treaties.
One must also note here a double standard on the part of those capitalist pow-
ers that invoke such openings only at a stage when they know that talking
about free trade, for them, means guaranteeing for themselves indirect protec-
tion from the competition as already established exporters (Kindleberger 1975;
Topik and Wells 2014, p. 29). Therefore, they know they can benefit the most
from these rules.
At the same time, how liberal-capitalist external reforms function finds
ample scope for comparative analysis in what occurred during the U.S. hegem-
onic era, that is, from the second half of the twentieth century onward.1 Indeed,
in the American case, we find new elements of external pressure to bring about
the transformations necessary for the new liberal order. Moreover, the social
texture has changed in favor of the emergence of mass democratic societies.
Upward large-scale literacy demands a much more extensive use of persuasion
Conclusions 103
than in the previous century. For instance, liberal propaganda actions were
promoted by a whole series of foundations and institutes as early as the 1930s.
For example, the Carnegie Endowment, founded in 1910, promotes interna-
tional peace and free trade while supporting a system based on the pillars of
democracy and capitalism, while the Rockefeller Foundation, founded in 1913,
financially supports various universities to influence and promote a liberal
conception of economics (Patel 2019, pp. 21, 24).
The same principle of the classical use of force fades in the face of the inclu-
sivist rhetoric of decolonization movements that allow the principle of military
non-intervention to permeate Western politics to satisfy simple power appe-
tites. Binding cooperation is increasingly preferred to overt coercion. Hence,
American inclusivism was synthesized with the creation in 1944 of interna-
tional institutions such as the World Bank and the International Monetary
Fund aiming to create a basket of common rules of engagement with U.S
backing. This membership is expressed by including all member states within a
system that gives them the appearance of having a say in decision-making.
Sitting at the table with the Great Powers is enough to feel one is part of them
even while being deprived of real powers. At the same time, in the pure non-
violent tradition of reform, the IMF conditions national policies not directly
– and especially in the wake of the neoliberal revolution under the Washington
Consensus framework – but by acting through a whole series of benefits at the
beck and call of certain political actors (Babb 2012). It is, in fact, a matter of
promoting those emerging capitalist élites by fostering their economic advance-
ment and, hence, the rise of political influence and power.
The new institutions created by the United States were therefore instrumen-
tal in pleading the American economic cause to align not only advanced coun-
tries but also many semi-peripheral economies, including states emerging from
colonization, to the new pathway of American liberal capitalism. American
financial advisors actively supported a series of reforms to strengthen the
State’s capacity to pursue development goals in line with what the United
States required (Helleiner 2019; Petras and Veltmeyer 2022). It is well known
how the new American hegemonic order promoted laissez-faire policies within
its borders and mercantilist policies abroad, as had Great Britain in the previ-
ous century (Keohane 1984, p. 18). For example, the Marshall Plan was
intended to increase American industrial exports while helping European
recovery and stimulating a whole series of economic and financial reforms that
would allow adhering countries to adapt to the American growth model. Mon-
etary reform, therefore, played a crucial role in the stable recovery of exchanges
by quelling the rising inflation caused by the war period, hence adapting to the
new gold exchange standard with the dollar newly recognized as the interna-
tional reference system (Buchleim 1994; De la Villa 2021, p. 143). Admittedly,
this was still in a phase where the blocking-of-capital made a fixed exchange
rate monetary system more feasible and thus facilitated a more significant
interference of the nation-state in economic policy choices (Stiglitz 2002; James
2022). However, the progressive liberalization of capital and the end of the
104 Conclusions
Bretton Woods system in 1971 gave way to a new monetary policy. In the 1970s
it moved from a pegged-but-adjustable exchange rate system to a new one with
exchange-rate flexibility (Eichengreen and Flandreau 1997, p. 2). But this sys-
tem only lasted for a while. It slavishly followed an even more liberal model,
known as neoliberal, in terms of monetary management (Biebricher 2019;
Eich 2022). Monetarism, stemming from the ideas of Friedrich von Hayek
(1976) and Milton Friedman and Anna Jacobson Schwartz (1976), imposes an
almost puritanical return to a global system of high and fixed rates.2 Thus, the
nation-state is drained of some of its prerogatives regarding monetary sover-
eignty. At the same time, to achieve these results, monetary policy is removed
from the electoral and democratic influence that began to be defined during the
1930s. The emergence of neo-liberalism evidences the resurgence of the finan-
cial élites’ power, whose capital accumulation and profit-seeking model is
increasingly oriented toward the financial economy and the material econo-
my’s detriment. The new profit pathway requires international institutions that
guarantee capital mobility by promulgating new rules of engagement designed
to maximize returns. The new institutional forms, therefore, advocate a new
allocation of resources among the social classes favoring those who have pro-
moted such a change.
The new ideological and institutional model, which proposes specific
reforms in the field of money, public finance, taxation, access to services, etc.,
shows how the new system is focused on maximizing profits only for those with
capital access, leaving all those who are an integral part of the material econ-
omy to languish in economic hardship (Alacevich and Soci 2019). Thus, such
reforms, concentrated primarily in the financial sector, reshuffled social bal-
ances even within advanced countries, which had to bear the costs of an exter-
nalization that in the past they had not hesitated to pass on to countries in the
semi-periphery. Economic and social backlashes did not afflict only the latter
countries: advanced economies also suffered the transformation of capitalism
backed by (neo)liberal ideology. Mass democracy is also bent to the needs of
accumulation when sovereign states sign binding international agreements or
adhere to trade systems with rules that specifically benefit a narrow social
group to the detriment of all others (Hartwick and Peet 2003; Chorev 2005;
Crouch 2011; Lang 2011; Crouch, Della Porta, and Streeck 2016).3
The new alliance order of élites, as we have seen, was increasingly based on
the principle of accumulation and mobility of capital and on the value of
profit rather than that of nationality. Thus, the new global institutions, includ-
ing the renewed activity of the World Bank and the International Monetary
Fund during the 1970s, allowed for unprecedented economic integration,
albeit in the form of a proliferation of a complex and often indecipherable,
transnational production network directed by private corporations that
encouraged the ever-increasing liberalization of capital controls (Morvaridi
and Hughes 2018). The latter’s tendency toward concentration and centraliza-
tion is expressed at this juncture through a polarization toward the anti-
market of all possible wealth through a redistribution of income for the
Conclusions 105
benefit of capitalist élites. Thus, even in the case of the United States, we
witness an initial phase of external reformism in the material economy, only
to see it give way to eventual financial expansion. Although these reform
packages are pre-packaged and cause significant problems within economies
unprepared to support what is required – and thus destined to fail at the out-
set – it is evident that the transformations needed in the field of trade liberal-
ization, services, currency, etc., are often not congenial to the real needs of
peripheral countries. Indeed, the development models of an advanced and a
non-advanced economy differ (Rodrik 1996). Trade liberalization was often
promoted in countries that required an economic policy focused on national-
capitalist models and the creation of state-sovereign, rather than market-
oriented, institutions (Gerschenkron 1962).4
The neoliberal revolution, in effect, brought back to the forefront of eco-
nomic policy the nineteenth-century liberalist concepts of balanced budgets,
monetary stability, and contained public debt (Harvey 2005; Lapavitsas and
Mendieta-Muñoz 2016, 2018). The global economic realignment favoring
financialization requires new rules of engagement for capital (Lapavitsas 2013).
Creditors’ forces, for instance, promote structural adjustments in order to con-
tain public spending to enable institutionalized austerity policies. At the same
time, raising interest rates on currency (as the Federal Reserve did in 1979)
facilitates the implementation of these adjustment policies. In many semi-
peripheral countries indebted in hard (or foreign-denominated) currency, this
rise in rates causes a deflationary spiral that increases the profits of interna-
tional creditors to the detriment of local debtors. Upward rates benefit the
hegemonic country and, specifically, the creditor capitalist élites who increase
their share of accumulation to the disadvantage of other social classes and
poorer states.
The adjustment demands that are somehow imposed on debtor countries
under the umbrella of the Washington Consensus are aimed at exploiting
financial difficulties to request a package of pro-market reforms aimed at mac-
roeconomic stabilization in the short-to-medium term, the liberalization of
foreign exchange and trade, trade and financial instruments, as well as a pro-
cess of extensive privatization and deregulation (Stiglitz 2000, pp. 551–584).
Therefore, the reforms required aim to realign – by forced and often brutal
(albeit generally non-violent) maneuvers – the social order and national econ-
omy to the new demands of accumulation and profit on a global scale. Dani
Rodrik (2019, p. 53) argues that, at best, the structural reforms required between
the 1980s and 1990s can only generate new growth in the long run and that, in
most cases, the short-term effects are adverse (Babetskii and Campos 2011).
This can only highlight how the real purpose is to align with a system of eco-
nomic liberal-oriented rules to immediately follow up, thanks to a new internal
and external legislative system, with greater profitability of capital. This action
benefits anti-market forces while leaving the domestic market economy to lan-
guish in a much slower process of realignment and institutional readjustment
detrimental to social stability that survives in a precarious balance.
106 Conclusions
Reforms in the financial sector, therefore, as opposed to those concentrated

in the material economy, are aimed at conferring economic benefits on an ever-
closer circle of individuals with direct interests in the circulation of capital. For
this reason, income inequality among the population increases at this stage.
In light of the above, we can now interpret the policies pursued by the Euro-
pean Union since the Maastricht Treaties. According to Wolfgang Streeck
(2009, 2017, pp. 105, 146), the European Union has become nothing more than
a machine for the liberalization of European capitalism. It has enabled various
governments to impose pro-market reforms in every way, resulting in social
confrontation and weakening the very foundations of democracy. European
authorities succeed in conferring advantages on the local groups with the most
direct interest in pursuing such fiscal adjustment policies. It is, in essence, a
system aimed at co-opting financial élites and, more generally, all forces inter-
ested in the global market (Biebricher 2019).
The outbreak of the European financial crisis highlighted the end of the
capitalist élites’ moral restraint to defer to countries considered developed or
adhering to Western values. It is a further corrosion of ethical forms of social
respect in favor of the aseptic mechanisms of capital reproduction.
In conclusion, external (neo)liberal-capitalist reforms are identified with an
attempt to promote institutions, norms, and styles of behavior typical of a
liberal-capitalist economic order. However, such reforms also aim to hinder the
ability of the State to influence those institutions, rules, and norms that affect
the proper functioning of the (neo)liberalist market. In this order one sees the
separation of power between the Treasury and the Central Bank or the inclu-
sion within national constitutions of explicit condemnations of deficit policies
and, hence, outsized public debt. Therefore, it must be reiterated that reform is
an instrument, a longa manus, which originates from an ideological-intellectual
substratum behind which are hidden particular and well-defined interests.
Since the nineteenth century, and in the two centuries that followed, anti-
market forces have always sought to make the most profit by extracting value
from subjects acting within the rules in the market economy upon which, how-
ever, they remain deeply dependent. Thus, reforms are an instrument of action
hiding class-based gains and ideological and political values. External (neo)
liberal-capitalist reform is not a neutral factor but a clear expression of par-
ticular and circumscribed interests.
Notes
1 In the interim phase between the end of the era of British hegemonic dominance
and the consolidation of that of the United States, coinciding with the period be-
tween the two world wars, we witness the perpetration of liberal-capitalist reform-
ism embodied, for a short time, by new international institutions such as the Bank
for International Settlements and the League of Nations. In fact, from 1919 on-
ward, the League became the harbinger of a series of loan negotiations with the
requesting states. In return, they demanded fiscal austerity policies, the appoint-
ment of certain financial advisors in the debtor countries, the creation of an
Conclusions 107
independent central bank, monetary reform, and the need to maintain budgetary
stability (Martin 2022, p. 65).
2 As Quinn Slobodian (2018) reminds us, the Geneva School and the Chicago School
diverge on some points, such as the excessive use of mathematics and modeling to
explain and predict economic performance.
3 It is helpful to recall many of the World Trade Organization (WTO) rules.
4 According to Katharina Pistor (2019, p. 1), since the 1980s especially, a whole series
of economic and legal reforms in both advanced capitalist and semi-peripheral
countries has prioritized the market over sovereign governments in allocating eco-
nomic resources.
Bibliography
Acemoglu D. and Robinson J.A., (2012), Why Nations Fail: The Origins of Power, Pros-
perity, and Poverty, Crown, New York.
Acemoglu D. and Robinson J.A., (2019), The Narrow Corridor States, Societies, and the
Fate of Liberty, Penguin, London and New York.
Adelman J., (2002), Republic of Capital: Buenos Aires and the Legal Transformation of
the Atlantic World, Stanford University Press, San Francisco.
Adelman J., (2006), Sovereignty and Revolution in the Iberian Atlantic, Princeton Uni-
versity Press, Princeton NJ.
Aghion P., et al., (2021), The Power of Creative Destruction: Economic Upheaval and the
Wealth of Nations, Harvard University Press, Boston.
Agoston G. and Masters B., (2009), Encyclopedia of the Ottoman Empire, Facts On File,
New York.
Akçam T., (2004), From Empire to Republic: Turkish Nationalism and the Armenian
Genocide, Zed Books, London.
Alacevich M. and Soci A., (2019), Breve storia della disuguaglianza, Laterza, Rome-Bari.
Alesina A. and Perotti R., (1997), “Fiscal Adjustments in OECD Countries: Composi-
tion and Macroeconomic Effects”, IMF Staff Papers, 44, 210–248.
Alesina A., Favero C., and Giavazzi F., (2019), Austerity When It Works and When It
Doesn’t, Princeton University Press, Princeton NJ.
Amin S., (1976), Unequal Development: An Essay on the Social Formations of Peripheral
Capitalism, Monthly Review Press, New York.
Anievas A. and Nişancıoğlu K., (2015), How the West Came to Rule. The Geopolitical
Origins of Capitalism, Pluto Press, London.
Arbuthnot G., (1854), Sir Robert Peel’s Act of 1844, Regulating the Issue of Bank Notes,
Longman, London.
Ardant G., (1981), Storia della Finanza Mondiale, tr. it. Editori Riuniti, Rome.
Arghiri E., (1972), Lo scambio ineguale. Gli antagonismi nei rapporti economici interna-
zionali, tr. it. Einaudi, Turin.
Arrighi G., (1997), “Financial Expansions in World Historical Perspective: A Reply to
Robert Pollin”, New Left Review, 224 (1), 154–159.
Arrighi G., (1998), “Capitalism and the Modern World-System: Rethinking the Nonde-
bates of the 1970’s”, Review (Fernand Braudel Center), 21 (1), 113–129.
Arrighi G., (1999), “Globalization, State Sovereignty, and the ‘Endless’ Accumulation
of Capital”, in Smith D.A., Solinger D.J., and Topix S.C., (eds), States and Sover-
eignty in the Global Economy, Routledge, London and New York.
Bibliography 109
Arrighi G., (2014), Il lungo XX secolo, tr. it. Il Saggiatore, Milan.

Arrighi G. and Silver B.J., (2006), Caos e governo del mondo. Come cambiano le egemo-
nie e gli equilibri planetari, tr. it. Mondadori, Milan.
Arrighi G., Hopkins T.H., and Wallerstein I., (1987), “The Liberation of Class Strug-
gle?”, Review (Fernand Braudel Center), 10 (3), 403–424.
Augusti E., (2013), Questioni d’Oriente. Europa e Impero ottomano nel Diritto internazi-
onale d’Ottocento, Edizioni Scientifiche Italiane, Naples.
Autheman A., (2002), The Imperial Ottoman Bank, Ottoman Bank Archives and Re-
search Centre, Istanbul.
Babb S., (2012), “The Washington Consensus as Transnational Policy Paradigm: Its
Origins, Trajectory and likely Successor”, Review of International Political Economy,
20 (2), 268–297.
Babetskii I. and Campos N.F., (2011), “Does Reform Work? An Econometric Exami-
nation of the Reform-Growth Puzzle”, Journal of Comparative Economics, 39 (2),
140–158.
Baechler J., et al., (1988), (eds), Europe and the Rise of Capitalism, Blackwell, Oxford.
Bairoch P., (1998), Economia e storia mondiale, tr. it. Garzanti, Milan.
Balzac H., (1837), Histoire de la grandeur et de la décadence de César Birotteau, Paris.
Barkey K., (2008), Empire of Difference: The Ottomans in Comparative Perspective,
Cambridge University Press, Cambridge.
Barreyre N. and Delalande N., (2020), (eds), “Introduction”, in A World of Public Debt.
A Political History, Palgrave-Mcmillan, London.
Baumgart W., (2020), The Crimean War. 1853–1856, Bloomsbury, London.
Baumgartner T., Buckley W., and Burns T.R., (1976), “Unequal Exchange and Uneven
Development: The Structuring of Exchange Patterns”, Studies in Comparative Inter-
national Development, 11 (2), 51–72.
Beaud M., (2001), A History of Capitalism 1500–2000, tr. ing. Monthly Review Press,
New York.
Beaud O., (2002), La potenza dello Stato, Tullio L., (a cura di), Edizioni Scientifiche
Italiane, Naples.
Beckert S., (2014), L’Impero del Cotone. Una storia globale, tr. it. Einaudi, Turin.
Bellofiore R. (2009), Rosa Luxemburg and the Critique of Political Economy, Routledge,
London and New York.
Benton L. and Ford L., (2016), Range for Order: The British Empire and the Origins of
International Law 1800–1850, Harvard University Press, Cambridge.
Berberoglu B., (2000), “Nationalism, Ethnic Conflict, and Class Struggle: A Critical
Analysis of Mainstream and Marxist Theories of Nationalism and National Move-
ments”, Critical Sociology, 26 (3), 205–231.
Berger H. and Spoerer M., (2001), “Economic Crises and the European Revolutions of
1848”, The Journal of Economic History, 61 (2), 293–326.
Bickers R., (2008), “Revisiting the Chinese Maritime Customs Service, 1854–1950”,
The Journal of Imperial and Commonwealth History, 36 (2), 221–226.
Bickers R., (2018), Out of China. How the Chinese Ended the Era of Western Domina-
tion, Penguin, London.
Biebricher T., (2019), The Political Theory of Neoliberalism, Stanford University Press,
Stanford.
Birdal M., (2010), The Political Economy of Ottoman Public Debt. Insolvency and European
Financial Control in the Late Nineteenth Century, I.B. Tauris, London and New York.
110 Bibliography
Blaisdell D.C., (1914), European Financial Control in the Ottoman Empire: A Study of
the Establishment, Activities, and Significance of the Administration of the Ottoman
Public Debt, Columbia University Press, New York.
Block F.L., (2021), Capitalismo. Il futuro di un’illusione, tr. it. Il Mulino, Bologna.
Boardman R., (1976), Britain and the People’s Republic of China, 1949–74, Macmil-
lan, London.
Boettke P.J. and Coyne C.J., (2011), “The Debt-Inflation Cycle and the Global Finan-
cial Crisis”, Global Policy, 2 (2), 184–189.
Boldizzoni F., (2008), L’idea del capitale in Occidente, Marsilio, Venice.
Boldizzoni F., (2019), “Capital, Class, and Empire: Nineteenth-Century Political Econ-
omy and Its Imaginary”, in Breckman W. and Gordon P.E., (eds), The Cambridge
History of Modern European Thought, Cambridge University Press, Cambridge,
131–150.
Bond B., (1967), Victorian Military Campaigns, Praeger, London.
Bonelli F., (1971), La crisi del 1907. Una tappa dello sviluppo industriale in Italia, Ein-
audi, Turin.
Borchard E.M., (1915), The Diplomatic Protection of Citizens Abroad, Banks Law Pub-
lishing, New York.
Borchard E., (1951), State Insolvency and Foreign Bondholders, Vol. I, Yale University
Press, New Haven.
Bordo D., (1996), “Michael, Rockoff Hugh, the Gold Standard as a ‘Good Housekeep-
ing Seal of Approval’”, The Journal of Economic History, 56 (2), 389–428.
Bordo D., (1999), The Gold Standard and Related Regimes: Collected Essays, Cam-
bridge University Press, Cambridge.
Bowles P., (2007), Il Capitalismo, tr. it. Il Mulino, Bologna.
Brady A., (1928), William Huskisson and Liberal Reform, Clarendon Press, Oxford.
Braudel F., (1982), Civiltà materiale, economia e capitalismo. I tempi del mondo, III, tr.
it. Einaudi, Turin.
Braudel F., (2011), La dinamica del capitalismo, tr. it. Il Mulino, Bologna.
Brenner N., (2004), New State Spaces: Urban Governance and the Rescaling of State-
hood, Oxford University Press, Oxford.
Brenner R., (2020), Merchants and Revolution. Commercial Change, Political Conflict,
and London’s Overseas Traders, 1550–1653, Verso, London and New York.
Bresciani-Turroni C., (1958), Corso di Economia Politica, II, Giuffré, Milan.
Brinton J.Y., (1968), The Mixed Courts of Egypt, Yale University Press, New Haven.
Bruneau Q., (2022), States and the Masters of Capital, Columbia University Press,
New York.
Bucci, A., Aghion P., Antonin C., and Bunel S., (2022), “The Power of Creative De-
struction: Economic Upheaval and the Wealth of Nations”, Journal of Economics,
135, 299–306.
Buchleim C., (1994), “Marshall Plan and Currency Reform”, in Diefendorf J.M., Frohn
A., and Rupieper H. J., (eds), American Policy and the Reconstruction of West Ger-
many 1945–1955, Cambridge University Press, Cambridge.
Buckel S. and Fischer- Lescano A., (2009), “Gramsci Reconsidered: Hegemony in
Global Law”, Leiden Journal of International Law, 22 (3), 437–454.
Bunker S.G., (1984), “Modes of Extraction, Unequal Exchange, and the Progressive
Underdevelopment of an Extreme Periphery: The Brazilian Amazon, 1600–1980”,
American Journal of Sociology, 89 (5), 1017–1064.
Bibliography 111
Burdekin R. and Sweeney R., (2021), “The Evolution of Sovereign Debt Default: From
the Thirteenth Century to the Modern Era”, The Journal of European Economic His-
tory, 2, 9–56.
Cain P., (1979), “Capitalism War and Internationalism in the Thought of Richard Cob-
den”, British Journal of International Studies, 5 (3), 229–247.
Cain J. and Hopkins A.G., (1993), British Imperialism, 1688–2000, Longman, London.
Capasso M. and Kadri A., (2023), “The Imperialist Question: A Sociological Ap-
proach”, Middle East Critique, 32 (2), 149–166.
Caracciolo A., (1960), Stato e Società Civile. Problemi dell’unificazione italiana, Ein-
audi, Turin.
Cardim P., et al., (2012), Polycentric Monarchies: How Did Early Modern Spain and Por-
tugal Achieve and Maintain a Global Hegemony?, Sussex Academic Press, Brighton.
Cassis Y., (2012), Capitals of Capital: A History of International Financial Centres
1780–2005, Cambridge University Press, Cambridge.
Chaichian M.A. (1988), “The Effects of World Capitalist Economy on Urbanization in
Egypt, 1800–1970”, International Journal of Middle East Studies, 20 (1), 23–43.
Chan W.K., (1982), “Government, Merchants and Industry to 1911”, in Twitchett
D. and Fairbank J. K., **(eds), The Cambridge History of China, Vol. XI, Republican
China 1800–1911, II, Cambridge University Press, Cambridge.
Charles M.S., (2016), Once within Borders Territories of Power, Wealth, and Belonging
Since 1500, Harvard University Press, Cambridge MA.
Cheng L., (2003), Banking in Modern China, Cambridge University Press, Cambridge.
Chevalier L., (1976), Classi lavoratrici e classi pericolose. Parigi nella rivoluzione indus-
triale, tr. it. Laterza, Rome-Bari.
Chorev N., (2005), “The Institutional Project of Neo-Liberal Globalism: The Case of
the WTO”, Theory and Society, 34 (3), 317–355.
Churchman N., (2001), David Ricardo on Public Debt, Palgrave Macmillan,
Basingstoke.
Çiçek N., (2010), The Young Ottomans: Turkish Critics of the Eastern Question in the
Late Nineteenth Century, I.B. Tauris, London.
Cipolla C.M., (1996), Conquistadores, pirati, mercatanti. La saga dell’argento spagnuolo,
Il Mulino, Bologna.
Clarke S., (2016), Marx’s Theory of Crisis, Palgrave Macmillan, Basingstoke.
Conte G., (2018), Il tesoro del sultano. L’Italia, le grandi potenze e le finanze ottomane
1881–1914, Textus Edizioni, L’Aquila.
Conte G., (2019), “Sovranità, globalizzazione, debito e mercato nel mediterraneo otto-
centesco”, Rivista di Studi Politici, 31 (1), 33–50.
Conte G., (2022), “Defining Financial Reforms in the 19th-Century Capitalist World-
Economy: The Ottoman Case (1838–1914)”, Capital & Class, 46 (1), 33–58.
Conte G. and Sabatini G., (2014), “The Ottoman External Debt and Its Features under
European Financial Control (1881–1914)”, Journal of European Economic History,
43 (3), 69–96.
Cooper R., (1968), The Economics of Interdependence: Economic Policy in the Atlantic
Community, McGraw-Hill, New York.
Cospito G., (2016), “Egemonia/egemonico nei ‘Quaderni del carcere’ (e prima)”, Inter-
national Gramsci Journal, 2 (1), 49–88.
Cox R.W., (1983), “Gramsci, Hegemony and International Relations: An essay in
Method”, Millennium: Journal of International Studies, 12 (2), 162–174.
112 Bibliography
Croce B., (1921), Materialismo storico ed economia marxistica, Laterza, Bari.

Crouch C., (2011), The Strange Non-Death of Neoliberalism, Polity Press, Cambridge.
Crouch C., Porta D., and Streeck W., (2016), “Democracy in Neoliberalism?”, Anthro-
pological Theory, 16 (4), 497–512.
Crouchley A.E., (1938), The Economic Development of Modern Egypt, Long-
mans, London.
Crouzet F., (1990), Britain Ascendant: Comparative Studies in Franco-British Economic
History, Cambridge University Press, Cambridge.
Cunningham W., (1904), The Rise and Decline of Free Trade Movement, C.J. Clay &
Sons, London.
Cunningham Wood J., (1983), British Economists and the Empire, Palgrave Macmil-
lan, London.
Curli B., (2022), (eds), Italy and the Suez Canal, from the Mid-Nineteenth Century to the
Cold War: A Mediterranean History, Palgrave, Basingstoke.
Daunton M., (2001), Trusting Leviathan: The Politics of Taxation in Britain, 1799–1914,
Davanzati G.F. and Patalano R., (2017), “Marx on Public Debt: Fiscal Expropriation
and Capital Reproduction”, International Journal of Political Economy, 46 (1), 50–64.
Davis M., (2002), Olocausti Tardovittorian. El Niño, le carestie e la nascita del Terzo
Mondo, tr. it. Feltrinelli, Milan.
Davison R.H., (1999), Nineteenth Century Ottoman Diplomacy and Reforms, ISIS Press,
Istanbul.
Dayer R.A., (1988), Finance and Empire: Sir Charles Addis 1861–1945, Macmillan,
Basingstoke.
De Cecco M., (1971), Economia e finanza internazionale dal 1890 al 1914, Laterza,
Bari-Rome.
De Cecco M., (1995), “L’Italia e il sistema finanziario internazionale: il contributo di
Luigi Luzzatti”, in Pecorari P., (a cura di), Finanza e debito pubblico in Italia tra ’800
e ’900, Istituto Veneto di Scienze Lettere ed Arti, Venice.
De la Villa L., (2021), “The Multilateral Principle-Based Approach to the Restructur-
ing of German Debts in 1953”, in Pénet P. and Zendejas J.F., (eds), Sovereign Debt
Diplomacies. Rethinking Sovereign Debt from colonial empires to hegemony, Oxford
University Press, Oxford.
De Maddalena A. and Kellenbenz H., (1986), (a cura di), La repubblica internazionale
del denaro tra XV e XVII secolo, Il Mulino, Bologna.
De Rosa L., (1953), Storia del cartismo, Giuffrè, Milan.
De Zwart P. and Van Zanden J.L., (2018), The Origins of Globalization: World Trade in
the Making of the Global Economy, 1500– 1800, Cambridge University Press,
Cambridge.
Deeb M., (1978), “The Socioeconomic Role of the Local Foreign Minorities in Modern
Egypt, 1805–1961”, International Journal of Middle East Studies, 9 (1), 11–22.
Defoe D., (1993), La vita e le imprese di Sir Walter Raleigh, tr. it. Sellerio, Palermo.
Dejung C., Motadel D., Osterhammel J., (2020), (eds), “Introduction”, in The Global
Bourgeoisie: The Rise of the Middle Classes in the Age of Empire, Princeton Univer-
sity Press, Princeton NJ.
Deleuze G. and Guattari F., (2002), L’anti-Edipo. Capitalismo e schizofrenia, tr. ita. Ein-
audi, Turin.
Den Otter S., (2007), “A Legislating Empire: Victorian Political Theorists, Codes of
Law, and Empire”, Bell D., (ed), Victorian Visions of Global Order, Empire and
Bibliography 113
International Relations in Nineteenth-Century Political Thought, Cambridge Univer-

sity Press, Cambridge.
Deneen P.J., (2019), Why Liberalism Failed: Politics and Culture Series, Yale University
Press, New Haven.
Deringil S., (1998), The Well-Protected Domains: Ideology and the Legitimation of
Power in the Ottoman Empire 1876–1909, I.B. Tauris, London.
Diamond L.J. and Plattner M.F., (eds) (1995), Economic Reform and Democracy, Johns
Hopkins University Press, Baltimore, MD.
Dillard D., (1978), “Revolutions in Economic Theory”, Southern Economic Journal, 44
(4), 705–724.
Dobb M., (1962), Capitalism Yesterday and Today, Monthly Review Press, New York.
Drezner D.W., (2007), All Politics Is Global: Explaining International Regulatory Re-
gimes, Princeton University Press, Princeton NJ.
Duménil G. and Lévy D., (2000), Capital Resurgent: Roots of the Neoliberal Revolution,
Harvard University Press, Cambridge MA.
Edelstein M., (1982), Overseas Investment in the Age of High Imperialism, Columbia
University Press, New York.
Edelstein M., (2021), “Foreign Investment, Accumulation and Empire, 1860–1914”, in
Floud R. and Johnson P., (eds), The Cambridge Economic History of Modern Britain,
II: Economic Maturity, 1860–1939, Cambridge University Press, Cambridge.
Eich S., (2022), The Currency of Politics: The Political Theory of Money from Aristotle
to Keynes, Princeton University Press, Princeton NJ.
Eichengreen B., (1992), Golden Fetters: The Gold Standard and the Great Depression,
1919–1939, Oxford University Press, Oxford.
Eichengreen B., (2019), Globalizing Capital. A History of the International Monetary
System, Princeton University Press, Princeton NJ.
Eichengreen B., (2022), “Somnolence to Dominance: A Hundred Years of the Foreing
Exchange Market in London”, The Journal of European Economic History, 51
(1), 75–112.
Eichengreen B. and Flandreau M., (1985), Gold Standard in Theory & History, Rout-
ledge, New York and London.
Eichengreen B. and Flandreau M., (eds.) (1997), Gold Standard in Theory and History,
Routledge, New York and London.
Eichengreen B., et al., (2021), In Defense of Public Debt, Oxford University Press, Ox-
ford and New York.
Einaudi L., (2001), Money and Politics: European Monetary Unification and the Interna-
tional Gold Standard (1865–1873), Oxford University Press, Oxford.
Eldem E., (2005), “Ottoman Financial Integration with Europe: Foreign Loans, the
Ottoman Bank and the Ottoman Public Debt”, European Review, 13 (3), 431–445.
Eldem E., (2014), “(A Quest for) the Bourgeoisie of Istanbul: Identities, Roles and Con-
flicts”, in Freitag U. and Lafi N., (eds), Urban Governance under the Ottomans, Rout-
ledge, New York and London.
Emrence C., (2008), “Imperial Paths, Big Comparisons: The Late Ottoman Empire”,
Journal of Global History, 3 (3), 289–311.
End N., et al., (2015), Deflation and Public Finances. Evidence from the Historical Re-
cords, International Monetary Fund, Washington DC.
Evans E.J., (1999), William Pitt the Younger, Routledge, London and New York.
Farnie D.A., (1979), The English Cotton Industry and the World Market 1815–1896,
Clarendon Press, Oxford.
114 Bibliography
Faroqhi S., (2005), The Ottoman Empire and the World Around it, Bloomsbury, London-
New York.
Favilli P., (2009), Il riformismo e il suo rovescio. Saggio di politica e storia, Fran-
coAngeli, Milan.
Fay C.R., (2017), The Corn Laws and Social England, Cambridge University Press,
Cambridge.
Feder G. and Just R.E., (1984), “Debt Crisis in an Increasingly Pessimistic Interna-
tional Market: The Case of Egyptian Credit, 1862–1876”, The Economic Journal, 94
(374), 340–356.
Feis H., (1930), Europe’s World Bankers 1870–1914, Yale University Press, New Haven.
Ferguson N., (2003), Empire: The Rise and Demise of the British World Order and the
Lessons for Global Power, Basic Books, New York.
Ferguson N., (2005), “The City of London and British Imperialism: New Light on an
Old Question”, in Cassis Y. and Bussière E., (eds), London and Paris as International
Financial Centres in the Twentieth Century, Oxford University Press, Oxford and
New York.
Ferguson N., (2006), “Political Risk and the International Bond Market between the
1848 Revolution and the Outbreak of the First World War”, The Economic History
Review, 59 (1), 70–112.
Ferguson N., (2009), Impero. Come la Gran Bretagna ha fatto il mondo moderno, tr. it.
Mondadori, Milan.
Fergusson A., (2011), Quando la moneta muore: le conseguenze sociali dell’iperinflazione
nella repubblica di Weimar, Neri Pozza, Venice.
Feuerwerker A., (1982), “The Foreign Presence in China”, in Twitchett D. and Fair-
bank J.K., (eds), The Cambridge History of China. Vol. XII: Republican China
1912–1949, I, Cambridge University Press, Cambridge.
Fielden K., (1969), “The Rise and Fall of Free Trade”, in Bartlett C.J., (ed), Britain Pre-
Eminent: Studies in British World Influence in the Nineteenth Century, Macmil-
lan, London.
Fieldhouse D.K. (1996), Politica ed economia del colonialismo (1870–1945), tr. it. Lat-
erza, Rome-Bari.
Flandreau M. and Flores J.H., (2009), “Bonds and Brands. Foundations of Sovereign
Debt Markets, 1820–1830”, The Journal of Economic History, 69 (3), 646–684.
Fornasari M., (2019), La Banca, La Borsa, Lo Stato. Una storia della finanza (secoli
XIII - XXI), Giappichelli, Turin.
Foucault M., (2005), Nascita della biopolitica. Corso al Collège de France (1978–1979),
tr. it. Feltrinelli, Milan.
Fox Bourne H.R., (1906), Egypt under British Control, King & Son, London.
Frangakis-Syrett E., (2007), Trade and Money: the Ottoman Economy in the Eighteenth
and Early Nineteenth Centuries, Isis Press, Istanbul.
Frank A.G., (2004), in Vitale A., (a cura di), Per una storia orizzontale della globalizzazi-
one. Sette lezioni di Andre Gunder Frank, Rubbettino, Soveria Mannelli.
Fraser N., (2016), “Expropriation and Exploitation in Racialized Capitalism: A Reply
to Michael Dawson”, Critical Historical Studies, 3 (1), 163–178.
Freeden M., (2015), Liberalism: A Very Short Introduction, Oxford University
Press, Oxford.
Friedman M. and Schwartz A.J., (1976), Monetary History of the United States,
1867–1960, Princeton University Press, Princeton NJ.
Bibliography 115
Fulcher J., (2015), Capitalism: A Very Short Introduction, Oxford University

Press, Oxford.
Gaies B., Goutte S., and Guesmi K., (2019), “Are We Sentenced to Financial Globali-
zation?”, The Journal of European Economic History, 48 (1), 49–72.
Galbraith J.K., (1988), Storia dell’Economia, tr. it. Rizzoli, Milan.
Gallagher J. and Robinson R., (1953), “The Imperialism of Free Trade”, The Economic
History Review, 6 (1), 1–15.
Galli and Rousseau J.J., (eds) (2011), Il contratto sociale, BUR, Milan.
Ganiage J., (1959), Les origines du protectorat française en Tunisie (1861–1881), Press
Universitaires de France, Paris.
Garner J.W., (1925), “Limitations on National Sovereignty in International Relations”,
The American Political Science Review, 19 (1), 1–24.
Gattei G., (1984), “Lo ‘sciame’ tra Keynes e Schumpeter”, Quaderni di storia dell’econo-
mia politica, 2 (1–2), 89–109.
Gentile E., (2007), Le religioni della politica, Laterza, Bari-Rome.
Gerschenkron A., (1962), Economic Backwardness in Historical Perspective, Harvard
University Press, Cambridge MA.
Geyikdagi N., (2011), Foreign Investment in the Ottoman Empire: International Trade
and Relations 1854–1914, I.B. Tauris, London.
Ghazaleh P., (2013), “Trading in Power: Merchants and the State in 19th-Century
Egypt”, International Journal of Middle East Studies, 45 (1), 71–91.
Giavazzi F. and Pagano M., (1990), “Can Severe Fiscal Contractions Be Expansionary?
Tales of Two Small European Countries”, in Blanchard O.J. and Fischer S. (eds),
NBER Macroeconomics Annual 1990, Volume 5, MIT Press, Boston.
Gill S., (1996), “Globalization, Democratization and the Politics of Indifference”, in
Mittelman J.H., (ed), Globalization: Critical Reflections, Lynne Reinner Publishers,
Boulder.
Gilpin R.G., (1987), The Political Economy of International Relations, Princeton Uni-
versity Press, Princeton NJ.
Gilpin R.G., (2001), Global Political Economy, Princeton University Press, Princeton NJ.
Giuntini A., (2021), Il Canale di Suez e l’Italia (1856–1869), Pacini Editore, Pisa.
Goetzmann W.N., Ukhov A.D. and Zhu N., (2007), “China and the World Financial
Markets 1870–1939: Modern Lessons from Historical Globalization”, The Economic
History Review, 60 (2), 267–312.
Graeber D., (2012), Debito, i primi 5000 anni, tr. it. Il Saggiatore, Milan.
Grampp W., (1987), “How Britain Turned to Free Trade”, The Business History Review,
61 (1), 86–112.
Gramsci A., (1929–1932), Quaderni dal Carcere, n. 4, Rapporti tra struttura e superstrut-
ture § 38.
Gramsci A., (2011), Nel Mondo Grande e Terribile, Einaudi, Turin.
Green E.H.H., (1999), “Gentlemanly Capitalism and British Economic Policy,
1880–1914: The Debate over Bimetallism and Protectionism”, in Dumett R.E., Cain
P.J., and Hopkins A.G., (eds), Gentlemanly Capitalism and British Imperialism. The
New Debate on Empire, Routledge, New York and London.
Greenberg M., (1951), British Trade and the Opening of China 1800–1842, Cambridge
University Press, Cambridge.
Griffin E., (2010), A Short History of the British Industrial Revolution, Palgrave,
Basingstoke.
116 Bibliography
Gülap H., (1986), “Debate on Capitalism and Development: The Theories of Samir
Amin and Bill Warren”, Capital & Class, 10 (1), 139–159.
Gunitsky S., (2017), Aftershocks: Great Powers and Domestic Reforms in the Twentieth
Century, Princeton University Press, Princeton NJ.
Habermas J., (1999), La Costellazione Postnazionale. Mercato Globale, Nazioni e De-
mocrazia, tr. it. La Feltrinelli, Milan.
Hagemann H., Seiter S., and Wendler E., (2019), (eds), The Economic Thought of Frie-
drich List, Routledge, New York.
Hanioğlu M.Ş., (2010), A Brief History of the Late Ottoman Empire, Princeton Univer-
sity Press, Princeton NJ.
Hansen B., (1979), “Income and Consumption in Egypt, 1886/1887 to 1937”, Interna-
tional Journal of Middle East Studies, 10 (1), 27–47.
Hansen B., (1983), “Interest Rates and Foreign Capital in Egypt under British Occupa-
tion”, Journal of Economic History, 43 (4), 867–884.
Hao Y.P., (1970), The Comprador in Nineteenth Century, China: Bridge between East and
West, Harvard University Press, Cambridge MA.
Harris J.H., (1885), Memoirs of an Ex-Minister, an Autobiography, by the Right Hon.
The Earl of Malmesbury, Longmans Green & Co., London.
Harris E. and La Croix S., (2020), Understanding the Gains to Capitalists from Coloni-
zation: Lessons from Robert E. Lucas, Jr., Karl Marx and Edward Gibbon Wakefield,
Working Papers 20-23, University of Hawaii, Manoa.
Hart J., (1965), “Nineteenth-Century Social Reform: A Tory Interpretation of His-
tory”, Past & Present, 31 (1), 39–61.
Hartwick E. and Peet R., (2003), “Neoliberalism and Nature: The Case of the WTO”,
The Annals of the American Academy of Political and Social Science, Rethinking Sus-
tainable Development, 590, 188–211.
Harvey D., (2005), A Brief History of Neoliberalism, Oxford University Press, Oxford.
Harvey D., (2018), Geografia del dominio. Capitalismo e produzione dello spazio, tr. it.
Ombre corte, Verona.
Heilbroner R.L., (2001), Natura e logica del capitalismo, tr. it. Jaca Book, Milan.
Helleiner E., (1999), “Sovereignty, Territoriality and the Globalization of Finance”, in
Smith D.A., Solinger D.J., and Topix S.C., (eds), States and Sovereignty in the Global
Economy, Routledge, London and New York.
Helleiner E., (2003), The Making of National Money: Territorial Currencies in Histori-
cal Perspective, Cornell University Press, Ithaca.
Helleiner E., (2019), “The Life and Times of Embedded Liberalism: Legacies and Inno-
vations since Bretton Woods”, Review of International Political Economy, 26 (6),
1112–1135.
Heper M., (1980), “Center and Periphery in the Ottoman Empire: With Special Refer-
ence to the Nineteenth Century”, International Political Science Review/Revue Inter-
nationale de Science Politique, 1(1), 81–105.
Hershlag Z.Y., (1997), Introduction to the Modern Economic History of the Middle East,
Brill, Leiden.
Hilferding R., (1923), Finanzkapital, Wiener Volksbuchhandlung, Wien.
Hill C., (1987), The English Revolution, 1640, Lawrence & Wishart Ltd, London.
Hintze O., (1980), Stato e Società, tr. it. Zanichelli, Bologna.
Hirsch F., (1981), I limiti sociali allo sviluppo, tr. it. Bompiani, Milan.
Hirschman A.O., (1979), Le passioni e gli interessi, tr. it. Feltrinelli, Milan.
Bibliography 117
Hirschman A.O., (1991), Retoriche dell’intransigenza. Perversità, futilità, messa e re-

pentaglio, tr. it. Il Mulino, Bologna.
Hobsbawm E.J., (1972), La Rivoluzione Industriale e l’Impero. Dal 1750 ai giorni nostri,
tr. it. Einaudi, Turin.
Hobsbawm E.J., (1975), The Age of Capital: 1848–1875, Weidenfeld & Nicolson, London.
Hobsbawm E.J., (1985), Workers: Worlds of Labor, Pantheon Books, New York.
Hobsbawm E.J., (1990), Nazioni e Nazionalismi dal 1780, tr. it. Einaudi, Turin.
Hobsbawm E.J., (2014), Il Secolo Breve, tr. it. Rizzoli, Milan.
Hobson J.A., (1902), Imperialism: A Study, James Pott & Co., London.
Hodgson M.H., (2015), Conceptualizing Capitalism. Institutions, Evolution, Future,
Chicago University Press, Chicago.
Hodgson M.H. (2023), The Wealth of a Nation. Institutional Foundations of English
Capitalism, Princeton University Press, Princeton NJ.
Holderness B.A., (1971), “Capital Formation in Agriculture”, in Higgins J.P.P. and Pol-
lard S., (eds), Aspects of Capital Investment in Great Britain, 1750–1850: A Prelimi-
nary Survey, Rouletdge, New York and London.
Horowitz R.S., (2004), “International Law and State Transformation in China, Siam,
and the Ottoman Empire during the Nineteenth Century”, Journal of World History,
15 (4), 445–486.
Hoyle M.S.W., (1986), “The Origins of the Mixed Courts of Egypt”, Arab Law Quar-
terly, 1 (2), 220–230.
Ichiko C., (1982), “Political and Institutional Reform, 1901–1911”, in Twitchett D. and
Fairbank J.K., (eds), The Cambridge History of China, Vol. XI, Republican China
1912–1949, II, Cambridge University Press, Cambridge.
Imlah A.H., (1952), “British Balance of Payments and Export of Capital 1816–1913”,
The Economic History Review, 5 (2), 208–239.
Imlah A.H., (1958), Economic Elements in the Pax Britannica, Harvard University
Press, Cambridge MA.
Ince O.U., (2016), “Friedrich List and the Imperial Origins of the National Economy”,
New Political Economy, 21 (4), 380–400.
Ince O.U., (2018), Colonial Capitalism and the Dilemmas of Liberalism, Oxford Univer-
sity Press, Oxford.
Ingham G. K., (2010), Capitalismo, tr. it. Einaudi, Turin.
Islamoglu-Inan H., (2000), “Property as a Contested Domain: A Re-Evaluation of the
Ottoman Land Code of 1858”, in Roger O. and Bunton P. B., (eds), New Perspec-
tives on Property and Land in the Middle East, Harvard University Press, Cam-
bridge MA.
Issawi C., (1970), “Middle East Economic Development, 1815–1914: The General and
the Specific”, in Cook M.A., (ed.), Studies in the Economic History of the Middle
East, Routledge, London and New York.
Jakes A.G., (2020), Egypt’s Occupation: Colonial Economism and the Crises of Capital-
ism, Stanford University Press, Stanford.
James H., (2022), “Rethinking the Legacy of Bretton Woods”, The Journal of European
Economic History, 51 (1), 9–36.
Kalkas B., (1979), “Diverted Institutions: A Reinterpretation of the Process of Indus-
trialization in Nineteenth-Century Egypt”, Arab Studies Quarterly, 1 (1), 28–48.
Karataşlı S. S., (2023), “Hegemonic world orders, distributional (in)justice and global
social change“, International Affairs, 99 (1), 23–39.
118 Bibliography
Kasaba R., (1988), The Ottoman Empire and the World Economy: The Nineteenth Cen-
tury, State University of New York Press, New York.
Kaske E. and Lin M.L., (2022), “Public Finance”, in Ma D. and Glahn R., (eds), The
Cambridge Economic History of China, II, 1800 to the Present, Cambridge University
Press, Cambridge, 244–279.
Keohane R., (1984), After Hegemony: Cooperation and Discord in the World Political
Economy, Princeton University Press, Princeton NJ.
Keyder Ç., (1987), State and Class in Turkey. A Study in Capitalist Development,
Verso, London.
Keynes J.M., (1926), The End of Laissez-Faire, L. & V. Woolf, London.
Kindleberger C.P., (1972), Potere e Denaro, tr. it. Garzanti, Milan.
Kindleberger C.P., (1975), “The Rise of Free Trade in Western Europe, 1820–1875”,
The Journal of Economic History, 35 (1), 20–55.
Kindleberger C.P., (2005), A Financial History of Western Europe, Routledge, London-
New York.
King F.H.H., (1965), Money and Monetary Policy in China 1845–1895, Harvard Uni-
versity Press, Cambridge MA.
Kittrell E.R., (1973), “Wakefield’s Scheme of Systematic Colonization and Classical
Economics”, The American Journal of Economics and Sociology, 32 (1), 87–111.
Klaus I., (2014), Forging Capitalism: Rogues, Swindlers, Frauds, and the Rise of Modern
Finance, Yale University Press, New Haven.
Kocka J., (2016), Capitalismo. Una breve storia, tr. it. Carocci, Rome.
Koddenbrock K., Kvangraven I.H., and Sylla N.S., (2020), “Beyond the Stereotype:
Restating the Relevance of the Dependency Research Programme”, Development and
Change 52 (1), 76–112.
Kou T.Y., (1982), “Self-Strengthening: The Pursuit of Western Technology”, in Fair-
bank J.K., (ed), The Cambridge History of China, Vol. X, Republican China 1800–1911,
I, Cambridge University Press, Cambridge.
Krasner S.D., (1976), “State, Power and the Structure of International Trade”, World
Politics, 28 (3), 317–347.
Krasner S.D., (1999a), “Globalization and Sovereignty”, in States and Sovereignty in
the Global Economy, Routledge, London and New York.
Krasner S.D., (1999b), Sovereignty. Organized Hypocrisy, Princeton University Press,
Princeton NJ.
Krasner S.D. (2001), Problematic Sovereignty: Contested Rules and Political Possibili-
ties, Columbia University Press, New York.
Krauss M.B., (1997), How Nations Grow Rich. The Case for Free Trade, Oxford Univer-
sity Press, Oxford and New York.
Krueger A.O., (1996), The Political Economy of Trade Protection, University of Chi-
cago Press, Chicago.
Kung J.K.S., (2022), “The Economic Impact of the West”, in Ma D. and Von Glahn R.,
(eds), The Cambridge Economic History of China, 1800 to the Present, Cambridge
University Press, Cambridge, 354–413.
Landes D.S., (1958), Bankers and Pashas: International Finance and Economic Imperial-
ism in Egypt, Harvard University Press, Cambridge MA.
Landes D.S., (1969), Il Prometeo liberato, tr. it. Einaudi, Turin.
Landes D.S. (1988), La ricchezza e la povertà delle nazioni, tr. it. Garzanti, Milan.
Lang A., (2011), World Trade Law after Neoliberalism: Reimagining the Global Eco-
nomic Order, Oxford University Press, Oxford.
Bibliography 119
Lapavitsas C., (2013), Profiting without Producing: How Finance Exploits Us All,
Verso, London.
Lapavitsas C. and Cakiroglu P., (2019), Capitalism in the Ottoman Balkans: Industriali-
sation and Modernity in Macedonia, Bloomsbury, London and New York.
Lapavitsas C. and Mendieta- Muñoz I., (2016), “The Profits of Financialization”,
Monthly Review: An Independent Socialist Magazine, 68 (3).
Lapavitsas C. and Mendieta-Muñoz I., (2018), “Financialisation at a Watershed in the
USA”, Competition and Change, 22 (5), 488–508.
Laski H.J., (1936), The Rise of European Liberalism, George Allen & Unwin, London.
Lemieux P., (2013), The Public Debt Problem: A Comprehensive Guide, Palgrave,
New York.
Leng T., (2013), “Epistemology: Expertise and Knowledge in the World of Commerce”,
in Stern P.J. and Wennerlind C., (eds), Mercantilism Reimagined: Political Economy in
Early Modern Britain and Its Empire, Oxford University Press, Oxford.
Lenin V.I., (1948), Imperialism, the Highest Stage of Capitalism, tr. ing. Lawrence &
Wishart, London.
Levi C., (1945), Cristo si è fermato a Eboli, Einaudi, Turin.
Li D. and Yan H., (2022), “Money and the Macro-Economy”, in Ma D. and Von Glahn
R., (eds), The Cambridge Economic History of China, 1800 to the Present, Cambridge
University Press, Cambridge, 208–243.
Lindert P.H. and Eichengreen B., (1989), (eds), The International Debt Crisis in Histor-
ical Perspective, MIT Press, Boston.
Lipson C., (1985), Standing Guard. Protecting Foreign Capital in the Nineteenth and
Twentieth Centuries, University of California Press, Los Angeles.
Lissakers K., (1991), Banks, Borrowers, and the Establishment: A Revisionist Account of
the International Debt Crisis, Basic Books, New York.
List F., (1856), National System of Political Economy, J.B. Lippincott, Philadelphia, PA.
Locke J., (1691), Some Considerations of the Consequences of the Lowering of Interests
and the Raising of the Value of Money, London.
Losurdo D., (2005), Controstoria del liberalismo, Laterza, Rome-Bari.
Losurdo D., (2016), Class Struggle: A Political and Philosophical History, Palgrave
Macmillan, Basingstoke.
Lovell J., (2022), La guerra dell'oppio e la nascita della Cina moderna, tr. ita. Ein-
audi, Turin.
Lowe P., (1981), Britain in the Far East: A Survey from 1819 to the Present, Long-
man, London.
Luxemburg R., (2009), Riforma sociale o rivoluzione?, tr. it. Prospettiva editrice, Rome.
Luzzatto G., (1960), Storia Economica dell’Età Moderna e Contemporanea, CE-
DAM, Padua.
Ma D., (2012), “Money and Monetary System in China in the 19th-20th Century: An
Overview”, LSE Working Papers, 159/12.
Ma D., (2019), “The Rise of a Financial Revolution in Republican China in 1900–1937:
A Survey and a New Interpretation”, Austrialian Economic History Review, 59 (1),
242–262.
MacDonagh O., (1958), “The Nineteenth-Century Revolution in Government: A Reap-
praisal”, The Historical Journal, 1 (1), 52–67.
Magee G.B. and Thompson A.S., (2010), Empire and Globalization. Networks of People,
Goods and Capital in the British World, c. 1850–1914, Cambridge University Press,
Cambridge.
120 Bibliography
Magliulo A., (2022), A History of European Economic Thought, Routledge, London and
New York.
Maksakovsky P.V., (2004), The Capitalist Cycle: An Essay on the Marxist Theory of the
Cycle, Brill, Leiden.
Mandel E., (1972), Late Capitalism, Verso, New York and London.
Mandel E., (1995), Long Waves of Capitalist Development: A Marxist Interpretation,
Verso, New York and London.
Manjapra K., (2020), “The Semiperipheral Hand, Middle-Class Service Professionals
of Imperial Capitalism”, in Dejunh C., Motadel D., and Osterhammel J., (eds), The
Global Bourgeoisie: The Rise of the Middle Classes in the Age of Empire, Princeton
University Press, Princeton, NJ.
Markusen J.R., (1983), “Factor Movements and Commodity Trade as Complements”,
The Journal of International Economics, 14 (3–4), 341–356.
Marsot A.L.S., (1975), “The Porte and Ismail Pasha’s Quest for Autonomy”, Journal of
the American Center in Egypt, 12 (1), 89–96.
Martin J., (2022), The Meddlers: Sovereignty, Empire, and the Birth of Global Economic
Governance, Harvard University Press, Cambridge MA.
Martinelli A., (2010), La Modernizzazione, Laterza, Rome-Bari.
Marty A.L., (1978), “Inflation, Taxes, and the Public Debt”, The Journal of Money,
Credit and Banking, 10 (4), 437–452.
Marx K., (1869), The Eighteenth Brumaire of Louis Bonaparte, English translation, Pro-
gress Publisher, Moscow.
Marx K., (1887), Capital, I, Chapter 4, tr. eng. Lowrey, & Co, London.
Marx K. and Engels F., (1948 e 2016), Manifesto del partito comunista, tr. it. Laterza,
Rome-Bari.
Masters B., (1999), “Aleppo: The Ottoman Empire’s Caravan City”, in Eldem E., Goff-
man D., and Masters B., (eds), The Ottoman City between East and West: Aleppo,
Izmir, and Istanbul, Cambridge University Press, Cambridge.
Matsuoka K., (1936), “China’s Currency Reform and Its Significance”, Kyoto Univer-
sity Economic Review, 11 (1), 75–98.
Matteucci N., (1975), “Dal costituzionalismo al liberalismo”, in Firpo L., (ed), Storia
delle idee politiche, economiche e sociali, UTET, Turin.
Mauro P., Sussman N., and Yafeh Y., (2006), Emerging Markets and Financial Globaliza-
tion: Sovereign Bond Spreads in 1870–1913 and Today, Oxford University Press, Oxford.
McCord N., (2006), The Anti-Corn Law League: 1838–1846, Routledge, London and
New York.
Mcdonough T., (1995), “Lenin, Imperialism, and the Stages of Capitalist Develop-
ment”, Science & Society, 59 (3), 339–367.
McGowan P.J. and Kordan B., (1981), “Imperialism in World-System Perspective: Brit-
ain 1870–1914”, International Studies Quarterly, 25 (1), 43–68.
McKeown T.J., (1989), “The Politics of Corn Law Repeal and Theories of Commercial
Policy”, British Journal of Political Science, 19 (3), 353–380.
Mcnally D., (1988), Political Economy and the Rise of Capitalism, California University
Press, Berkeley.
McNally D., (2014), “The Blood of the Commonwealth: War, the State, and the Mak-
ing of World Money”, Historical Materialism, 22 (2), 3–32.
Mehta U.S., (1999), Liberalism and Empire: A Study in Nineteenth-Century British Lib-
eral Thought, Chicago University Press, Chicago and London.
Bibliography 121
Mestyan A., (2020), “The Muslim Bourgeoisie and Philanthropy in the Late Ottoman
Empire”, in Dejunh C., Motadel D., and Osterhammel J., (eds), The Global Bourgeoi-
sie: The Rise of the Middle Classes in the Age of Empire, Princeton University Press,
Princeton NJ.
Miege J.L., (1962), Le Maroc et l’Europe 1830–1894, III, Presses Universitaires de
France, Paris.
Milanovic B., (2019), Capitalism, Alone, Harvard University Press, Cambridge MA.
Mill S.M., (1861), Considerations on Representative Government, London.
Moore B., (1969), Le origini sociali della dittatura e della democrazia. Proprietari e con-
tadini nella formazione del mondo moderno, tr. it. Einaudi, Turin.
Morrell W.P., (1966), British Colonial Policy in the Age of Peel and Russell, Clarendon
Press, Oxford.
Morvaridi B. and Hughes C., (2018), “South-South Cooperation and Neoliberal He-
gemony in a Post-Aid World”, Development and Change, 49 (3), 867–892.
Mosca G., (1923), Elementi di scienza politica, Vol. I, Bocca, Turin.
Neal L., (2015), A Concise History of International Finance: From Babylon to Bernanke,
Nicholson J.S., (1909), A Project of Empire: A Critical Study of the Economics of Impe-
rialism, Macmillan, London.
Nicholson J.S., (2001), “Adam Smith on Public Debts”, The Economic Journal, 30
(1), 1–12.
North D.C., (1991), “Institutions”, Journal of Economic Perspective, 5 (1), 97–112.
Nurkse R., (1951), La Formazione del Capitale nei Paesi Sottosviluppati, tr. it. Ein-
audi, Turin.
O’Brien P.K., (1997), “Intercontinental Trade and the Development of the Third World
since the Industrial Revolution”, Journal of World History, 8 (1), 75–133.
O’Brien P.K. and Palma N., (2020), “Danger to the Old Lady of Threadneedle Street?
The Bank Restriction Act and the Regime Shift to Paper Money, 1797–1821”, Euro-
pean Review of Economic History, 24 (2), 390–426.
Offe C., (1977), Lo Stato nel capitalismo maturo, tr. it. Etas Libri, Milan.
Ogle V., (2019), “Time, Temporality and the History of Capitalism“, Past & Present,
243 (1), 312–327.
Oneal J.R. and Oneal F.H., (1988), “Hegemony, Imperialism and Profitability of For-
eign Investments”, International Organization, 42 (2), 347–373.
Osterhammel J., (1999), “Britain and China, 1842–1914”, in Porter A., (ed), The Oxford
History of the British Empire, III: The Nineteenth Century, Oxford University
Press, Oxford.
Owen R., (2004), Lord Cromer. Victorian Imperialists, Edwardian Procunsul, Oxford
University Press, New York.
Owen R., (2011), The Middle East in the World Economy 1800–1914, I.B. Tauris, Lon-
don and New York.
Payne C., Korzeniewicz R. P., and Silver B. J., (2023) (eds.), World-Systems Analysis at
a Critical Juncture, Routledge, New York.
Pamuk Ş., (2008), “From Bimetallism to the ‘Limping Gold Standard’: The Ottoman
Monetary System in Nineteenth Century”, in Cottrell P.L., (ed), East Meets West:
Banking, Commerce and Investment in the Ottoman Empire, Ashgate, Aldershot.
Panitch L., (1996), “Rethinking the Role of the State”, in Mittelman J.H., (ed), Globali-
zation: Critical Reflections, Lynne Reinner Publishers, Boulder.
122 Bibliography
Panizza U., Sturzenegger F., and Zettelmeyer J., (2009), “The Economics and Law of
Sovereign Debt and Default”, Journal of Economic Literature, 47 (3), 651–698.
Panza L., (2013), “Globalization and the Near East: A Study of Cotton Market Inte-
gration in Egypt and Western Anatolia”, The Journal of Economic History, 73 (3),
847–872.
Panza L. and Williamson J.G., (2015), “Did Muhammad Ali Foster Industrialization in
Early Nineteenth-Century Egypt?”, The Economic History Review, 68 (1), 79–100.
Pareto V., (1916), Trattato Di Sociologia Generale, Vol. I e II, ed. it. Barbera, Florence.
Parisot J., (2016), “What Is, and What Is Not, a Capitalist Empire”, International Crit-
ical Thought, 6 (1), 29–45.
Patel K., (2019), Il New Deal. Una Storia Globale, tr. it. Einaudi, Turin.
Patnaik P., (1997), Accumulation and Stability under Capitalism, Clarendon Press, Oxford.
Patnaik P. and Patnaik U., (2016), A Theory of Imperialism, Columbia University Press,
New York.
Pecorari P., (1989), Il protezionismo imperfetto, Istituto Veneto di Scienze, Venice.
Pellicani L., (2013), La genesi del Capitalismo e le origini della modernità, Rubbettino,
Solveria Marinelli.
Penfield F.C., (1895), “Contemporary Egypt”, The North America Review, 161
(464), 13–24.
Perulli P., (2012), Il dio Contratto. Origine e istituzione della società contemporanea,
Einaudi, Turin.
Perulli P., (2020), Il debito sovrano. La fase estrema del capitalismo, La Nave di Te-
seo, Milan.
Petras J. and Veltmeyer H., (2022), System in Crisis. The Dynamics of Free Market Cap-
italism, Fernwood Publishing, New York.
Pickering P., (2003), “‘The Hearts of the Millions’: Chartism and Popular Monarchism
in the 1840s”, History, 88 (290), 227–248.
Piketty T., (2014), Il Capitale nel XXI Secolo, tr. it. Bompiani, Milan.
Pistor K., (2019), The Code of Capital. How the Law Creates Wealth and Inequality,
Princeton University Press, Princeton NJ and Oxford.
Piterberg G. and Veracini L., (2015), “Wakefield, Marx, and the World Turned Inside
Out”, Journal of Global History, 10 (3), 457–478.
Platt D.C.M., (1968a), “The Imperialism of Free Trade: Some Reservations”, The Eco-
nomic History Review, 21 (2), 296–306.
Platt D.C.M., (1968b), Finance, Trade, and Politics: British Foreign Policy 1815–1914,
Clarendon Press, Oxford.
Polanyi K., (2011), La grande trasformazione, tr. it. Einaudi, Turin.
Polanyi K., (2019), L’obsoleta mentalità di mercato. Scritti 1922–1957, Cangiani M., (a
cura di), Asterios, Trieste.
Porter A.N. and Louis W.R., (1999), The Oxford History of the British Empire. Volume
III: The Nineteenth Century, Oxford University Press, Oxford.
Pradella L., (2013), “Imperialism and Capitalist Development in Marx’s Capital”, His-
torical Materialism, 21 (2), 117–147.
Priestland D., (2013), Merchant, Soldier, Sage: A New History of Power, Pen-
guin, London.
Prodi P., (2009), Settimo non rubare. Furto e mercato nella storia dell’Occidente, Il
Mulino, Bologna.
Proudhon P.J., (1978), Che cos'è la proprietà?, tr. it. Laterza, Rome-Bari.
Bibliography 123
Przeworski A. and Wallerstein M., (1988), “Structural Dependence of the State on

Capital”, The American Political Science Review, 82 (1), 11–29.
Quataert D., (2002), The Ottoman Empire, 1700–1922, Cambridge University Press,
Cambridge.
Remolona E.M., (1982), Inflation, Public Debt, and the Reserve Tax. A Theory of Opti-
mal Deficit Finance, PhD thesis, Stanford University, San Francisco.
Reti S.P., (1998), Silver and Gold: The Political Economy of International Monetary Con-
ferences, 1867–1892, Greenwood Press, Westport.
Robbins L., (1953), The Theory of Economic Policy in English Classical Political Econ-
omy, Palgrave Macmillan, London.
Roberts W.C., (2020), “What was Primitive Accumulation? Reconstructing the Origin
of a Critical Concept”, European Journal of Political Theory, 9 (4), 532–552.
Robinson W.I., (2005), “Gramsci and Globalisation: From Nation-State to Transna-
tional Hegemony”, Critical Review of International Social and Political Philosophy, 8
(4), 1–16.
Robinson W.I. and Harris J., (2000), “Towards a Global Ruling Class? Globalization
and Transnational Capitalist Class”, Science & Society, 64 (1), 11–54.
Rodrik D., (1996), “Understanding Economic Policy Reform”, Journal of Economic
Literature, 34 (1), 9–41.
Rodrik D., (1998), “Has Globalization Gone Too Far?”, Challenge, 41 (2), 81–94.
Rodrik D., (2018), Straight Talk on Trade: Ideas for a Sane World Economy, Princeton
University Press, Princeton NJ.
Rodrik D., (2019), Dirla tutta sul Mercato Globale, tr. it. Einaudi, Turin.
Roll E., (1942), A History of Economic Thought, Faber & Faber, London.
Romano R., (1972), “Una tipologia economica”, in VV. AA., Storia d’Italia. Caratteri
originari, Einaudi, Turin.
Roncaglia A., (2006), La Ricchezza delle Idee. Storia del Pensiero Economico, Laterza,
Rome-Bari.
Roncaglia A., (2009), The Wealth of Ideas: A History of Economic Thought, tr. eng.
Roncaglia A. and Tonveronachi M., (1979), “Monetaristi e neokeynesiani: due scuole o
una?”, Quaderni dell’istituto di economia, 5, Università di Siena.
Roos J., (2019), Why Not Default? The Political Economy of Sovereign Debt, Princeton
Rosenberg H., (1980), Ascesa e prima crisi mondiale del capitalismo (1848–1857), tr. it.
Liguori Editore, Naples.
Rostow W.W., (1942), “Adjustments and Maladjustments after Napoleonic Wars”, The
American Economic Review Supplement, 32 (1), 13–23.
Rowe W.T., (2022), “Economic Transition in the Nineteenth Century”, in Ma D. and
Von Glahn R., (eds), The Cambridge Economic History of China, 1800 to the Present,
Cambridge University Press, Cambridge, 48–86.
Rubin A., (2016), “Modernity as a Code: The Ottoman Empire and the Global Move-
ment of Codification”, Journal of the Economic and Social History of the Orient, 59
(5), 828–856.
Rubin J., (2017), Rulers, Religion, and Riches: Why the West Got Rich and the Middle
East Did Not, Cambridge University Press, Cambridge.
Rubin A., (2018), Ottoman Rule of Law and the Modern Political Trial: The Yildiz Case,
Syracuse University Press, New York.
124 Bibliography
Ruggie J.G., (1982), “International Regimes, Transactions, and Change: Embedded

Liberalism in the Postwar Economic Order”, International Organization, 36 (2),
379–415.
Ryan A., (2004), “Liberal Imperialism”, in Fatton R. and Ramazani R.K., (eds), The
Future of Liberal Democracy, Palgrave Macmillan, New York and London.
Ryan A., (2012), The Making of Modern Liberalism, Princeton University Press,
Princeton NJ.
Sachs J.D., (1999), “Twentieth-Century Political Economy: A Brief History of Global
Capitalism”, Oxford Review of Economic Policy, 15 (4), 90–101.
Said E.W., (2013), Orientalismo. L’immagine europea dell’Oriente, tr. it. Feltrinelli, Milan.
Saleh M., (2015), “The Reluctant Transformation: State Industrialization, Religion,
and Human Capital in Nineteenth-Century Egypt”, The Journal of Economic His-
tory, 75 (1), 65–94.
Salvemini G., (2020), La rivoluzione del ricco, Bollati Boringhieri, Turin.
Sapelli G., (2015), Modernizzazione senza sviluppo. Il capitalismo secondo Pasolini,
GoWare, Florence.
Sapelli G., (2018), Oltre il Capitalismo. Macchine, Lavoro, Proprietà, Guerini e Asso-
ciati, Milan.
Sassen S., (1999), “Embedding the Global in the National. Implication for the Role of
the State”, in Smith D.A., Solinger D.J., and Topix S.C., (eds), States and Sovereignty
in the Global Economy, Routledge, London and New York.
Sassoon D., (2021), The Anxious Triumph. A Global History of Capitalism 1860–1914,
Penguin, London.
Saul S., (1997), La France et l’Égypte de 1882 à 1914. Intérêts économiques et implica-
tions politiques, Comité pour l’histoire économique et financière de la France, Paris.
Saul, S. (2023) L’impérialisme, passé et présent. Un essai, Les Indes savantes, Paris.
Savage J.D., (2011), “The Stability and Breakdown of Empire: European Informal Em-
pire in China, the Ottoman Empire and Egypt”, European Journal of International
Relations, 17 (2), 161–185.
Scanlan P.X., (2020), “Bureaucratic Civilization: Emancipation and the Global British
Middle Class”, in Dejung C., Motadel D., and Osterhammel J., (edited by), The
Global Bourgeoisie: The Rise of the Middle Classes in the Age of Empire, Princeton
Schlangen W., (1979), Democrazia e società borghese, tr. it. Il Mulino, Bologna.
Schmelzing P., (2020), Eight Centuries of Global Real Interest Rates, R-G, and the ‘Su-
prasecular’ Decline, 1311–2018, Staff Working Paper 845, Bank of England.
Schmitt C., (2003), The Nomos of the Earth in the International Law of the Jus Publicum
European, Telos Press, New York.
Schonhardt-Bailey C., (2006), From the Corn Laws to Free Trade. Interests, Ideas, and
Institutions in Historical Perspective, MIT Press, Cambridge MA.
Schumacher R., (2016), “Adam Smith and the ‘Rich Country-Poor Country’ Debate:
Eighteenth-Century Views on Economic Progress and International Trade”, The Eu-
ropean Journal of the History of Economic Thought, 23 (5), 764–793.
Schumpeter J.A., (1977), Capitalismo, Socialismo, Democrazia, tr. it. ETAS, Milan.
Schumpeter J.A., (1981), Sociologia dell’Imperialismo, tr. it. Laterza, Bari.
Semmel B., (1970), The Rise of Free Trade Imperialism, Cambridge University Press,
Cambridge.
Serels S., (2013), “Indigenous Debt and the Spirit of Colonial Capitalism: Debt, Taxes
and the Cash- Crop Economy in the Anglo- Egyptian Sudan, 1898–1956”, in
Bibliography 125
Stanziani A., (edited by), Debt and Slavery in the Mediterranean and Atlantic Worlds,
Routledge, London and New York.
Shaw S.J. and Shaw E.K., (1977), History of the Ottoman Empire and Modern Turkey.
Reform, Revolution, and Republic, Vol. 2, Cambridge University Press, Cambridge.
Sheehan B. and Zhu Y., (2022), “Financial Institutions and Financial Markets”, in Ma
D. and Van Glahn R., (eds), The Cambridge Economic History of China, 1800 to the
Present, Cambridge University Press, Cambridge, 280–323.
Shlala E., (2018), The Late Ottoman Empire and Egypt: Hybridity, Law and Gender,
Routledge, New York and London.
Silver B.J. and Slater E., (2010), “Le origini sociali delle Egemonie Mondiali”, in Ar-
righi G. and Silver B.J., (a cura di), Caos e governo del mondo. Come cambiano le
egemonie e gli equilibri planetari, tr. it. Mondadori, Milan.
Simpson G., (2004), Great Powers and Outlaw States: Unequal Sovereigns in the Interna-
tional Legal Order, Cambridge University Press, Cambridge.
Slobodian Q., (2018), Globalists: The End of Empire and the Birth of Neoliberalism,
Harvard University Press, Cambridge MA.
Sluga G., (2017), “Who Hold the Balance of the World? Bankers at the Congress of
Vienna, and in International History”, American Historical Review, 122, 5, 1403–1430.
Smith D.A., Solinger D.J., and Topix S.C., (1999), (eds), “Introduction”, in States and
Sovereignty in the Global Economy, Routledge, London and New York.
Sombart W., (1977), Metafisica del capitalismo, tr. Ita., Edizioni di Ar, Padua.
Spirito U., (1933), “La Crisi del Capitalismo e il Sistema Corporativo”, in Pirou G.,
et al., (a cura di), La crisi del capitalismo, Sansoni, Florence.
Stanziani A., (2012), Rules of Exchange French Capitalism in Comparative Perspective.
Eighteenth to Early Twentieth Centuries, Cambridge University Press, Cambridge.
Stanziani A., (2018), Eurocentrism and the Politics of Global History, Palgrave,
Basingstoke.
Stanziani A., (2023), Tensions of Social History. Sources, Data, Actors and Models in
Global Perspective, Bloomsbury Academic, London.
Stasavage D., (2003), Public Debt and the Birth of the Democratic State: France and
Great Britain 1688–1789, Cambridge University Press, Cambridge.
Stiglitz J.E., (2000), “Reflections on the Theory and Practice of Reform”, in Krueger
A.O., (ed), Economic Policy Reform, University of Chicago Press, Chicago
and London.
Stiglitz J.E., (2002), “Capital Market Liberalization and Exchange Rate Regimes: Risk
without Reward”, The Annals of the American Academy of Political and Social Sci-
ence, Exchange Rate Regimes and Capital Flows, 579, 219–248.
Streeck W., (2009), Re-Forming Capitalism: Institutional Change in the German Political
Economy, Oxford University Press, Oxford and New York.
Streeck W., (2017), Buying Time: The Delayed Crisis of Democratic Capitalism, Verso,
London and New York.
Suter C., (1992), Debt Cycles in the World-Economy. Foreign Loans, Financial Crisis, and
Debt Settlements, 1820–1990, Colorado University Press, Boulder.
Sutterlütti S. and Meretz S., (2023), Make Capitalism History. A Practical Framework
for Utopia and the Transformation of Society, Palgrave-Macmillan, Basingstoke.
Sylos Labini P. and Roncaglia A., (2002), Per la ripresa del riformismo, Edizioni
l’Unità, Rome.
Sylvest C., (2005), “Continuity and Change in British Liberal Internationalism,
1900–1930”, Review of International Studies, 31 (2), 263–283.
126 Bibliography
Sylvest C., (2008), “Our Passion for Legality: International Law and Imperialism in
Late Nineteenth-Century Britain”, Review of International Studies, 34 (3), 403–423.
Taylor A., (1972), Laissez-Faire and State Intervention in Nineteenth-Century Britain,
Macmillan, London.
Terzibaşoğlu Y., (2001), “Landlords, Refugees and Nomads: Struggles for Land around
Late-Nineteenth-Century Ayvalık”, New Perspectives on Turkey, 24 (1), 51–82.
Thompson E.P., (1975), Whigs and Hunters: The Origin of the Black Act, Pantheon
Books, London.
Thompson D., (1984), The Chartists: Popular Politics in Industrial Revolution, Pantheon
Books, New York.
Thompson E.P., (2013), The Making of the English Working Class, Penguin, London.
Tignor, R.L., (1966), Modernization and British Colonial Rule in Egypt, 1882–1914,
Princeton University Press, Princeton NJ.
Tignor R.L., (2011), Egypt: A Short History, Princeton University Press, Princeton NJ.
Tilly C., (1990), Coercion, Capital and European States AD 990–1990, Basil Black-
well, Oxford.
Tocqueville A., (2011), The Ancien Régime and the French Revolution, tr. ing. Cam-
Todd D., (2005), Free Trade and Its Enemies in France, 1814–1851, Cambridge Univer-
sity Press, Cambridge.
Todd D., (2008), “John Bowring and the Global Dissemination of Free Trade”, The
Historical Journal, 51 (2), 373–397.
Todd D., (2019), “Champagne Capitalism: France’s Adaptation to Britain’s Global He-
gemony, 1830–1880”, in Needham D., Hoppit J., and Leonard A. B., (eds), Money
and Markets: Essays in Honour of Martin Daunton, Boydell & Brewer, Suffolk.
Todd D., (2021), A Velvet Empire, French Informal Imperialism in the Nineteenth Cen-
tury, Princeton University Press, Princeton NJ.
Tooze A., (2018), Crashed. How a Decade of Financial Crises Changed the World, Pen-
guin, London.
Topik S.C. and Wells A., (2014), Global Markets Transformed 1870–1945, Harvard Uni-
versity Press, Cambridge MA.
Tronti, M., (2006), Operai e Capitale, DeriveApprodi, Rome.
Van De Ven H., (2014), Breaking with the Past: The Maritime Customs Service and the
Global Origins of Modernity in China, Columbia University Press, New York.
Van Den Boogert M., (2020), The Capitulations and the Ottoman Legal System: Qadis,
Consuls and Beratlıs in the 18th Century, Brill, Leiden.
Varoufakis Y. (2008), ‘Capitalism According to Evolutionary Game Theory: On the
Impossibility of a Sufficiently Evolutionary Model of Historical Change’, Science
and Society, 72, 63–94.
Von Hayek F., (1976), Denationalisation of Money: An Analysis of the Theory and Prac-
tice of Concurrent Currencies, Institute of Economic Affairs, Lancing and Sussex.
Von Hayek F., (2012), Liberalismo, tr. it. Rubbettino, Solveria Mannelli.
Von Hayek F., (2017), Competizione e Conoscenza, tr. it. Rubbettino, Solveria Mannelli.
Waibel M., (2011), Sovereign Defaults before International Courts and Tribunals, Cam-
Wakefield E.G., (1849), A View of the Art of Colonization, John W. Parker, London.
Wallerstein I., (1974), “The Rise and Future Demise of the World Capitalist System”,
Comparative Studies in Society and History, 16 (4), 387–415.
Bibliography 127
Wallerstein I., (1983a), “The Three Instances of Hegemony in the History of the Capi-
talist World-Economy”, International Journal of Comparative Sociology, 24 (1–2),
100–108.
Wallerstein I., (1983b), Historical Capitalism with Capitalist Civilization, Verso, Lon-
don and New York.
Wallerstein I., (1985), Il Capitalismo Storico. Economia, politica e cultura di un sistema-
mondo, tr. it. Einaudi, Turin.
Wallerstein I., (1999), “States? Sovereignty? The Dilemmas of Capitalists in an Age of
Transition”, in Smith A.D., Solinger D.J., and Topix S.C., (edited by), States and
Sovereignty in the Global Economy, Routledge, London and New York.
Wallerstein I., (2004a e 2013), Comprendere il mondo. Introduzione all’analisi dei sistemi-
mondo, tr. it. Asterios, Trieste.
Wallerstein I., (2004b), World-Systems Analysis: An Introduction, Duke University
Press, Durham.
Wallerstein I., (2011), The Modern World-System IV: Centrist Liberalism Triumphant,
1789–1914, California University Press, Berkeley and Los Angeles.
Warren B., (1980), Imperialism Pioneer of Capitalism, Verso, London and New York.
Weber M., (2021), L’etica protestante e lo spirito del capitalismo, tr. it. BUR, Milan.
Weeks J.F., (2020), The Debt Delusion, Living within Our Means and Other Fallacies,
Polity Press, Cambridge.
Williams J.H., (1929), “The Theory of International Trade Reconsidered”, The Eco-
nomic Journal, 39 (154), 195–209.
Winch D., (1963), “Classical Economics and the Case for Colonization”, Economica, 30
(120), 387–399.
Zanini A., (2000), Schumpeter. Teoria dello sviluppo e capitalismo, Mondadori, Milan.
Zevin A., (2019), Liberalism at Large, the World According to the Economist, Verso,
New York.
Zola É., (1891), L’Argent, Paris.
Zouari A.J., (1998), European Capitalism Penetration of Tunisia, 1860–1881. A Case
Study of the Regency’s Debt Crisis and the Establishment of the International Finan-
cial Commission, PhD thesis, University of Washington, Seattle.

Giampaolo Conte - A History of Capitalist Transformation_ A Critique of Liberal-Capitalist Reforms-Taylor &amp; Francis (2024)

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Giampaolo Conte - A History of Capitalist Transformation_ A Critique of Liberal-Capitalist Reforms-Taylor &amp; Francis (2024)

Uploaded by

Copyright:

Available Formats

A History of Capitalist Transformation

A History of Capitalist Transformation: A Critique of Liberal-­ Capitalist

Giampaolo Conte is Assistant Professor in Economic History at University of

Political Economy of the Firm

Digital Capitalism and New Institutionalism

Unequal Development and Capitalism

Economic Growth and Long Cycles

Income Redistribution, Inequality, and Democracy

Macroeconomics after the General Theory

A History of Capitalist Transformation

For more information about this series, please visit: www.routledge.com/Routledge-Frontiers-of-

1 The identity of reformism: men and laissez-faire 7

2 The power of ideas and capital 35

3 The trinity of capital: debt, credit, money 56

4 Reforms in practice: the case of the Ottoman Empire,

British ones), in association with emerging capitalist élites in semi-­peripheral

First, this transformation process is initiated by signing free trade agreements.

further. In this stage, we witness reformism focused more on finance than on

1.1 Defining liberal-capitalist economic reformism

absolute and comparative advantages becomes an organic tool for economic

The exploiters need a series of connective institutions, as he [Achille

The role of institutions emerges as a new element considered crucial to

liberalism presents itself as a centrist, constitutionally moderate doctrine. Lib-

More specifically, liberalism, unlike Adam Smith’s theorizing, lacks that

Promoting liberalism as the winning doctrine of modernization leads a

bureaucratically, infrastructurally, and militarily penetrate these territories

1.2 Reforms and the problem of sovereignty

associated countries increasingly dependent on such a system and thus eager to

Globalization has increased the importance of sovereignty as an inter-

Capital Capital inlow in the

Semi- Net capital outlow

Figure 1.1 Profits and location of States within the capitalist world-economy.

An economically inspired process of global integration erodes the authority

1.3 Liberal-capitalist reforms in the face of systems-world theory,

capitalist countries impose a kind of unequal international specialization for

List, free trade theory – as well as what is theorized by classical economists

1.4 Defining the role of élites in the reformist process

However, while Gramsci’s analysis is limited to outlining the hegemonic

1 Resistance and the use of force by the ruling élite.

Overcoming these possible obstacles is complex, which is why the proposed

Hegemonic Semi- Hegemonic Hegemonic

Economic elite Economic elite

Figure 1.2 Connection between élites, State, and anti-market.

1.5 The cycles and timing of liberal-capitalist reform

1 When the hegemonic State, driven by forces linked to capital, brings in

1 trade-­driven reforms in the material expansion phase of the ­hegemonic

In the second phase, known as financial expansion, Vladimir Lenin (1870–1924)

2.1 Reformism and the modus operandi of the capitalist State

1 the hegemonic State: to maintain and have its supremacy recognized;

Nineteenth-­century globalization needed the political and military might of

2.2 When and how was external liberalist reform born? From

if that means accruing a trade deficit. In contrast, mercantilists promote a kind

involved is extolled in the new system. Market globalization is thus seen as an

rational individualism, enlightened as it may be, only sometimes operates in

2.3 Differences between liberal-capitalist internal and external reforms

it will be led to adopt a whole series of reforms to adapt to external inputs,

agricultural system, sheltered from outside competition, in order to stimulate

Reforms are thus hidden behind the liberal proselytism characteristic of

confine the less developed country to a stable position of underdevelopment

more complex (Cunningham Wood 1983). The reforms must be imposed

2.5 Free trade imperialism, war capitalism, or reformist capitalism?

the remaining European countries. Many Western European states enjoyed

To recapitulate, before promoting free trade on a global scale, colonial

[…] the Europeans acquired the colonies to arouse in them productive

Giampaolo Conte - A History of Capitalist Transformation_ A Critique of Liberal-Capitalist Reforms-Taylor & Francis (2024)

Giampaolo Conte - A History of Capitalist Transformation_ A Critique of Liberal-Capitalist Reforms-Taylor & Francis (2024)

A History of Capitalist Transformation: A Critique of Liberal- Capitalist

1 The identity of reformism: men and laissez-faire 7

2 The power of ideas and capital 35

3 The trinity of capital: debt, credit, money 56

British ones), in association with emerging capitalist élites in semi-peripheral

1.1 Defining liberal-capitalist economic reformism

1.2 Reforms and the problem of sovereignty

Capital Capital inlow in the

Semi- Net capital outlow

Figure 1.1 Profits and location of States within the capitalist world-economy.

1.3 Liberal-capitalist reforms in the face of systems-world theory,

1.4 Defining the role of élites in the reformist process

Figure 1.2 Connection between élites, State, and anti-market.

1.5 The cycles and timing of liberal-capitalist reform

1 trade-driven reforms in the material expansion phase of the hegemonic

2.1 Reformism and the modus operandi of the capitalist State

Nineteenth-century globalization needed the political and military might of

2.2 When and how was external liberalist reform born? From

2.3 Differences between liberal-capitalist internal and external reforms

2.5 Free trade imperialism, war capitalism, or reformist capitalism?

3.1 Debt and credit: the double face of capital

Public borrowing in foreign debt-denominate currency is key to understanding

The debtor, if mainly represented by a non-capitalist State, must not only

3.1.2 Debt, the State, and emerging financial markets

of external-induced reforms as demanded by capitalists and the political and

3.2 Lex monetae: the relevance of liberal-capitalist reforms in the

economy”. Practically, semi-peripheral countries must adopt a constitutional,

4.1 Material expansion in relation to free trade agreements

urban- commercial vocation. If Cairo becomes the city of bureaucratic-

4.3 Foreign debt and the great capitalist transformation

the terms of creditors. The various foreign currency-denominated loans, often

rational-capitalist reformist process. Even before the outbreak of the Second

4.4 Monetary reforms in practical terms

Figure 4.1 Stages and timing of Ottoman and Egyptian reform.

Figure 4.2 Stages and timing of Chinese reforms.

The transformations brought about in semi-peripheral countries by capitalisti-

de-territorialize and become increasingly stateless, that is, free to disengage

International Relations in Nineteenth-Century Political Thought, Cambridge Univer-