Cycles of Hegemony

In his world-systems theory, Immanuel Wallerstein presents a macrosocial framework for analysing the history of modernity, or of capitalism.  Capitalism, Wallerstein argues, should be understood as a ‘world system’, which can best be analysed as a single unit composed of many mutually dependent parts.  Unlike an empire, in which a single central political unit controls a vast territory through hierarchical lines of command, capitalism as a world system contains no overarching political decision-making body.  In capitalism, many independent and quasi-independent states – each their own political entity – exist within a global interstate system, connected by geopolitical and economic ties.

These different political entities are not equal.  Some are under others’ overt political control in a direct colonial relation; some are client states with only limited decision-making autonomy; some are constrained by lesser economic or military power than their rivals; and some are relatively powerful and autonomous within the framework of the global system.  Wallerstein therefore subdivides the world system into three categories of political entity – core, semi-periphery and periphery – with relations of political-economic dominance and dependence between them.  Although the capitalist world system is, for Wallerstein, intrinsically segmented in this way, which political entities occupy which structural roles is not fixed.  States gain and lose political-economic power, and as they do so the structure of world-system changes.

If a core state becomes sufficiently powerful relative to its rival core states, Wallerstein argues, it achieves the status of a hegemonic power.  A hegemonic state cannot subsume the entire system within a single, centralised, hierarchically controlled political unit – a global hegemon is not a global empire.  But a hegemonic state plays the dominant role in shaping the rules of the global political-economic system, in a way that serves its interests.

In his major work, The Modern World-System, Wallerstein argues that the long-term dynamics of the capitalist world system can be analysed through the lens of ‘long waves’ (‘Kondratiev waves’) of global growth, stagnation and recession.  These multi-decade economic cycles correspond also to multi-decade cycles of political transformation.  Specifically, Wallerstein proposes a ‘cycle of hegemony’ that describes the rise and fall of hegemonic states within the system as a whole.

Since the creation of the capitalist world system in the ‘long 16th century’, Wallerstein argues, there have been only three hegemonic powers, and three periods of hegemony:

The United Provinces was the hegemonic power in the mid-seventeenth century, briefly, from 1648 to the 1660s.  The United Kingdom was the hegemonic power for a slightly longer time in the nineteenth century, from 1815 to 1848, perhaps a little longer.  The United States was the hegemonic power in the mid-twentieth century, from 1945 to 1967/1973. (Immanuel Wallerstein, The Modern World-System II: Mercantilism and the Consolidation of the European World-Economy, 1600-1750, p. xxiii)

For Wallerstein, the moment in which a state functions as a hegemonic power forms one stage of a recurrent four-stage cycle of hegemony:

If one starts the story when there is an uncontested hegemonic power, the first moment occurs in the period immediately thereafter.  It is the moment of the slow decline of the hegemonic power, during which two powers emerge as contenders for the succession.  The moment after that is when the decline has become definitive.  We can think of this second moment as one in which there is a ‘balance of power’ in the world-system.  During this moment, the two contenders for hegemony struggle to secure geopolitical and world-economic advantage.  The third moment is when the struggle becomes so acute that order breaks down and there is a “thirty years’ war” between the contenders for hegemony.  And the fourth moment is when one of the contenders wins definitely and is therefore able to establish a true hegemony – until, of course, the slow decline begins. (xxiii)

Now – it goes without saying that historical patterns only persist as long as they persist.  There is no reason to assume that a pattern which has held in modern history to date – if it has – will necessarily continue in the future.  And, indeed, Wallerstein himself appears to believe that we are currently in a transition from a capitalist world-system to some other, novel global political-economic structure.  For Wallerstein, the most pressing political question is the nature of that emerging structure – will it take an emancipatory or oppressive form?

I myself, however, attribute this last element of Wallerstein’s position to the perennial analytic defect of Marxists: the hope that “this time is different”, and that the current purported crisis of capitalism is a terminal one.  There seems to me to be no very compelling reason to assume that there is any decisive break in the structure of the world-system, in our current historical moment.  The conservative and reasonable ‘baseline projection’ from a world-systems perspective, in my opinion, is to assume that we are currently still within one of the long-term ‘cycles of hegemony’ that have structured the history of the capitalist world-system to date.

If so, where are we in that cycle?  Well, clearly we are no longer in the period of hegemony.  As Wallerstein says in the passage I quoted above, the period of US hegemony came to an end some time in the late-1960s – mid-1970s.  I would suggest, further, that the period of hegemonic decline has also now ended, or is at the very least ending.  We are instead entering a new period of ‘great powers rivalry’, in which the powers within the interstate system are sufficiently balanced that jockeying for geopolitical position becomes a more central preoccupation of states’ governing elites.

Now, the period of hegemony is characterised by a global political-economic structure created and enforced by the hegemonic state: an economically liberal order within the sphere of the hegemonic power’s global influence.  In the period of decline that order persists, because although the former hegemonic power’s political-economic strength is reduced, it is in the interests of its rivals to retain the political and economic structures that are increasing their economic, and therefore geopolitical, strength.

In the period of great powers rivalry this calculation changes, for two reasons.  First, the period of great powers rivalry is, Wallerstein argues, typically characterised by global stagnation or recession.  In this scenario, economic growth moves closer to a ‘zero sum game’ in which states are concerned to expand their spheres of influence and thereby increase or secure their wealth at others’ expense, rather than relying on general global economic expansion ‘naturally’ increasing states’ wealth through the ordinary operation of the liberal international order.

Second, with the ‘opening up’ of geopolitical space, and the unpredictability of the future structure of the world system, states have an increased interest in gaining geopolitical power relative to their rivals.  This too leads to an increase in interstate geopolitical competition.  Eventually, Wallerstein suggests, that geopolitical competition will result in global war.

It is, again, worth emphasising the unpredictability of history, and the inadequacy of any conceptual schema to the complexities of global political-economic dynamics.  Still, Wallerstein’s approach seems to me to provide a useful ‘baseline’ for thinking about our current macrosocial moment.  

In particular, here are some of the things associated with the shift from the first to the second stage of the ‘cycle of hegemony’, described above: Increasing interstate rivalries; efforts by many states to expand their spheres of influence; global economic stagnation and recession; declining power of a previous hegemonic power.  An increasing decay or collapse of the liberal international order, and a corresponding movement towards greater autarky for individual states, and towards greater interstate competition.  Shifts in the ideological ‘superstructure’ that parallel these political-economic shifts: increased challenges to the global liberal order, and to liberal ideology more broadly; greater suspicion of international institutions; increased nationalism, and therefore, often, nativism.  A shift towards more zero-sum understandings of wealth accumulation, both between and within states; correspondingly, greater intra-state rivalries between economic groups.  All of these things seem to have some explanatory purchase on our current anti-liberal, anti-elite, increasingly isolationist political moment.

Further – again, with all due caution and caveats – this ‘baseline projection’ would seem to warrant a pessimism about the medium term geopolitical outlook.  If the US is, indeed, to be replaced by an alternative global hegemonic power within a capitalist world-system – if the ‘cycle of hegemony’, as Wallerstein characterises it, is to persist – then that new hegemonic power must, somehow, establish its hegemony.  On Wallerstein’s account, this has only ever previously been achieved through a ‘thirty years war’:

The original Thirty Years’ War was from 1618 to 1648, out of which the United Provinces emerged hegemonic.  The second one was the Revolutionary/Napoleonic Wars of 1792-1815, out of which the United Kingdom emerged hegemonic.  And the third was the period 1914-1945, out of which the United States emerged hegemonic. (xxv)

Will this current period of interstate rivalries result, eventually, in a new ‘thirty years war’?  Again, the predictive power of social science is notoriously limited.  But this seems like something worth worrying about, in amongst all our other worries.

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Labour’s Crisis

One useful way to think about the UK Labour Party’s current crisis is by comparing it to the two previous major crises in the party’s history. All three internal political crises have followed, and been directly caused by, macroeconomic crises. Labour’s project, as a party of government, has always been the efficient management of a capitalist economy, to foster economic growth and thereby enable the more equitable distribution of an economic surplus. Absent a growing surplus to distribute, however, Labour is unclear and internally divided on questions of economic policy, and on broader political goals. In Andrew Thorpe’s words:

during more prosperous times, Labour does at least have something coherent to say: namely, that the fruits of that prosperity should be used in order to create a fairer society… The problem, throughout Labour’s history, is what to do when the economy moves into difficulties. (Thorpe, Andrew. A History of the British Labour Party. 1997. p. 241)

Moments of economic crisis and stagnation therefore bring to the fore tensions between the different components of Labour’s coalition. Historically, this coalition has most prominently consisted in: the trade union movement and, secondarily, the co-operative movement; socialists, of a range of different kinds, with centralising statism largely eclipsing decentralising syndicalism across the early decades of the twentieth century; and the left wing of the liberal movement, driven by neither socialist ideology nor ties to organised labour, but by a progressivist opposition to the effects of social inequality. These can – in shorthand, and very very inadequately – be mapped onto the centre (trade unionist / co-operative), left (socialist) and right (liberal / self-described ‘social democratic’) segments of the party’s ideological spectrum.

The three periods of internal Labour Party crisis have tracked the three major economic crises of the period of Labour’s existence: the crash of 1929 and subsequent depression; the period of stagnation and stagflation of the 1970s; and the financial crisis of 2008 and subsequent recession. Each period of economic crisis and stagnant growth has resulted in civil war within the party, as the unifying project of administering a flourishing capitalist economy and then directing its economic surplus to the working class, has fallen apart. In the first two cases – and quite possibly in the present third case – this has resulted (may very well result) in schism and years of electoral disaster.

In each case, Labour has been in government during the moment of economic crisis. In 1929 Labour was in government when the stock market crash took place. The party was divided over the wisdom or necessity of austerity policies in the subsequent depression, and this internal conflict ultimately resulted, in the period 1929-32, in a four-way schism. The internal defeat of Mosley’s nationalist Keynesian plan led to Mosley’s departure from the party and his founding of the New Party, and then in 1932 the British Union of Fascists. Ramsay MacDonald, aligning with the liberal right, chose to leave the party, with a handful of others, to form a National Government with the Conservatives and Liberals. The Independent Labour Party – representing a significant portion of the left socialist wing of the party – chose to disaffiliate, with the ultimate result of parliamentary irrelevance. The majority rump of the party – the centrists, alongside non-schisming figures from the party’s other wings – persisted, in electoral strife, until the outbreak of WWII, the formation of the wartime coalition government, and postwar electoral success. Very crudely speaking, then, the left, right, centrist, and (in Mosley) novel proto-fascist wings of the party all chose to go their different ways – with short-term success for the right, long-term success for the centre, and electoral oblivion for the schisming left and proto-fascist wings.

In the 1970s Labour was likewise in (and out of) government through the period of stagnation, stagflation, and financial crisis. The Wilson and Callaghan governments’ apparent inability to adequately resolve these crises was widely taken as a damning failure of the ‘revisionist’ Labour right’s technocratic Keynesian approach to economic management. Again, the party was profoundly internally divided, as the glue that bound together the components of its coalition – a smoothly growing capitalist economy with an easy-to-reallocate surplus – evaporated. After the electoral loss of 1979 the party was therefore preoccupied by internal conflict. In the early 1980s, however, unlike in the early 1930s, the components of the party did not so comprehensively schism. There was one major split: in 1981 a significant portion of the liberal (right) wing of the party formed the SDP – a progessivist party unburdened by union affiliations or socialist ideology. The remainder of the party – including the portion of the right that had chosen to remain in Labour – spent the following years in civil war. The left mounted a serious effort to gain control of the party machinery, pushing for greater influence in both its parliamentary (Bennite) and revolutionary entryist (Militant) forms. Ultimately the leftists were purged (in the case of Militant) and internally marginalised (in the case of the Bennites) and the right of the party began a long march to internal dominance over an acquiescent centre and sidelined left, cemented by the victory of Blair in the 1994 leadership election.

In 2008, again, Labour was in government when the financial crisis hit. Again, its immediate handling of the crisis was creditable, but its reputation for competent economic governance was devastated. Again, once out of office the party became profoundly divided on how best to respond to a period of recession and stagnant growth. Between 2010 and 2015, under the leadership of Ed Miliband, the party’s message was confused, as different ideological segments of the party pushed for different platforms. Then, after the 2015 electoral defeat, and the election of a representative of the left faction, Jeremy Corbyn, to party leader, under a new ‘one member one vote’ system, the party moved into open civil war. The present situation is very febrile, and my goal here is not to rehearse the details of the current party infighting – but many commentators find a schism of some sort the most likely outcome, at present. It is not hard to see some of the same basic themes reprised here, as in the 1930s and 1980s.

Three economic crises; three civil wars within Labour; and at least two – quite possibly three – periods of schism and electoral collapse. One doesn’t want to overstate the parrallels, but this historical perspective does at least make clear that, whatever one’s position within the current internal party conflict, this crisis shouldn’t simply be attributed to superficial – or indeed profound – failings of any ideological faction, but rather to a long-term weakness in the party’s very constitution; the glue that binds it together as an electoral project – and that sometimes fails to.

So much for parallels; in the rest of the post I want to note some ways in which the current crisis differs from the previous two I’ve discussed.

To begin with, it’s worth stressing that the categories of ‘left’, ‘right’ and ‘centre’ – which I’ve obviously used throughout this post – are fuzzy, internally diverse, and historically variable – see, for example, the changing ideological valence, within the party, of attitudes to Europe and to free trade, since the 1970s and the early twentieth century respectively. Today’s left and right aren’t the same as the left and right of the ’30s or ’80s, on which more below.

Further, the balance of forces within the party is different today than at previous moments of crisis. Seemingly paradoxically, the majority of the parliamentary party is today significantly to the right of the historical norm, while the party leadership is significantly to the left. These facts are related: the rightward shift of the parliamentary party has in relative terms reduced the gap between the median selectorate member and the party’s left faction. Combined with the new one-member-one-vote electoral system, and a leftward shift in the selectorate – partly perhaps due to changing sensibilities, but also partly due to an influx of new members – this has unusually, and probably unstably, aligned a majority of the base with the party’s left. This in turn has led to significant tensions between a large segment of the membership and the majority of the parliamentary party.

Finally, and in my view most significantly, the broader political and ideological context matters. Again very schematically, one can differentiate periods of capitalist history – often divided by economic crises – in terms of the governance systems that enjoy broad ruling class consensus. The period from WWI through WWII is a period of declining liberalism and rising statism – represented by fascism and communism; an increasingly statist understanding of labourism within the labour movement; and the rise of the Labour Party itself as against the Liberals. The period from WWII through the 1970s is a period of Keynesian technocratic governance, the failure of which, in the 1970s, is the (relative) failure of the Wilson and Callaghan governments. The period from the 1980s through the mid 2000s is a period of neoliberalism – the reassertion of the centrality of the market, privatisation, and deregulation. Blairism was an attempt to transform the traditional Labour project by connecting it to neoliberal policy mechanisms and goals.

We are currently in another period (like the 1970s) where the old governance structure (in the 1970s statist Keynesianism; today neoliberalism) is dead, but a new consensus structure has yet to emerge, or secure its dominance. History is contingent; we do not know what will happen next. But there are concerning signs about the current trends. We are clearly in a populist moment – populisms of both left and right are making dramatic gains against a shrinking, threatened and delegitimated centrist liberalism. It also seems to me that the populist right insurgency is stronger than that of the left: fascism, and movements with a ‘family resemblance’ to fascism, are making major gains across the world. One would expect these Zeitgeist shifts to influence the balance of political forces both between parties, and within them.

To state my own opinion, then: I think many participants in, and commentators on, the current Labour party crisis are at once overstating the historical novelty of the present situation, and fighting the last war in terms of their understanding of the factions at play. Speaking anecdotally now: figures from the party right frequently characterise members of the left faction as ‘Trots’ and ‘entryists’, by analogy with Militant’s attempted transformation of the party in the 1980s. This is a poor understanding of the current ‘left’ faction, which is better seen as an alliance between the parliamentary socialist left and its supporters in the membership; the major trade unions – concerned about their waning influence in a party otherwise largely dominated by the liberal, ‘social democratic’ right; an emerging, more youthful, left wing ‘populist’ movement; and a more traditionally centrist base concerned about the parliamentary party’s steady rightward movement. This is, itself, an unstable coalition; but while it lasts, it is a powerful one.

At the same time, the left of the party frequently characterises its opponents on the right as ‘Blairites’, in a way that misses the structural transformation of the economy – and, correspondingly, of the ideological terrain – since 2008. Blairism was a project that combined law-and-order demagoguery, neoliberalising marketisation and deregulation, and high welfare spending. It is dead, in part because in a period of stagnant growth the problem of social wealth distribution moves closer to a zero-sum game, making it harder to enact redistributive policy without threatening the interests of those in possession of wealth and capital. More profoundly, though, Blairism is dead because neoliberalism is dead; for better or worse, that economic governance paradigm has ended. The question for the right of the party is therefore: what replaces Blairism? To a large extent the current relative success of the left faction can be attributed to the ongoing inability of the Labour right to settle the answer to that question. And this failure is itself not simply an ideological one – we are still within a structural transformation of the world system, which will ultimately result in a new global power and governance structure. Political actors can attempt to influence that transformation, but they cannot individually resolve it; and the ideological superstructure that informs policy-makers’ actions is itself strongly influenced by the political-economic base.

Nevertheless, answers are being proposed to the question: what replaces Blairism? One prominent answer is captured by the recent book ‘Labour’s Identity Crisis’, edited by Tristram Hunt MP. Contributors to that book argue that Labour has lost the confidence of many of its traditional voters because its technocratic, economistic emphasis on wealth redistribution has neglected the ‘identity politics’ of “white working class” patriotic pride in Englishness. Hunt and other contributors emphasise that Englishness should not be understood in terms of ethnicity, but rather as a form of class solidarity grounded in local community and place. Yet for many on the left of the party – and that includes myself – this ‘English identity politics’ project seems to amount, in practice, to a Labour variant of the anti-immigrant, xenophobic and racist nationalism that has informed a significant proportion of the recent UKIP, and Brexit, votes. The worry here is that where Blairism proposed a Labour that could operate effectively within the neoliberal paradigm, the advocates of ‘English identity politics’ aspire to create a Labour that can operate effectively within an emerging neofascist paradigm. Further: right or centrist efforts to minimise the influence of the party’s left faction, in the hope of re-establishing something closer to a Blair-era liberal social-democratic project, may instead risk opening the door to a highly illiberal valorisation of ethnic solidarity. This is, of course, a risk, not a certainty. But – to put it crudely – where some on the Labour right fear a return of Militant, some of us on the left fear a return of Mosley.

The Birth of Fascist Ideology

I’m reading Zeev Sternhell’s The Birth of Fascist Ideology (it is is excellent). Sternhell argues that fascism should be understood, in the first place, as a cultural movement – an ideology; the formation of this ideology precedes fascism’s formation as a set of organised political movements. For Sternhell, fascism’s origins should be seen as a synthesis between:

a) an idealist revision of Marxism
b) nationalism

Sternhell discusses Georges Sorel at some length – Sorel is, for Sternhell, an important figure in the idealist revision of Marxism. Marxist theory in the late nineteenth and early twentieth centuries was (generally) characterised by: a) an emphasis on an ‘economistic’ science of society: historical materialism; b) revolutionary opposition to bourgeois society / capitalism; c) a conviction that the proletariat were the revolutionary agents of history, as part of a class-struggle analysis of that history; d) opposition to private property: a commitment to the socialisation of central aspects of economic life.

In the late nineteenth and early twentieth century, Western Marxism splintered. The social democrats abandoned – in practice and subsequently in theory – the commitment to revolutionary seizure / overthrow / command of the state. Instead, the proletariat became agents of history via the effectiveness of labour movement parties within the democratic system. Revolutionary socialism was successful in Russia, but Leninist-style revolutionary parties became minority interests in most of Western Europe. This was, Sternhell argues, the dominant response on the left to the apparent unwillingness of the Western European proletariat to engage in revolutionary overthrow of the state – the goals remained the same, but reform, rather than revolution, became the means. [This associated with the wrought but successful transformation of liberalism into liberal democracy – the expansion of the vote transformed revolutionary Marxism into Social Democracy in most states where liberal democracy was instituted.]

The Sorelian revision of Marxism, by contrast, maintained the commitment to revolution, but abandoned, instead, historical materialism; commitment to socialisation of property; and a belief in the proletariat as agent of history. Instead, Sorelian ‘Marxism’ emphasised the important of market economies and private property; emphasised voluntarily willed culture, instead of economistic or historical determinism; and abandoned the belief that the proletariat were the class that would effect revolution against bourgeois society.

This ‘revision’ of Marxism became fascism when conjoined with the nationalism that was coalescing in the same period. If the proletariat was no longer the revolutionary agent that would destroy bourgeois society, who was? For the emerging fascists, the nation state as organic unity became the revolutionary agent. Bourgeois society, no longer understood as principally an economic concept, but instead as a cultural one – a society of decadence and corruption – could only be overcome by the unified action of the organically homogenous people of a given (national) cultural unit. This organically unified people became the agents of revolutionary change – within the state (against those corrupting forces that sought to undermine the state’s organic unity), and internationally (against other states). The Marxian narrative of class conflict was transformed: violence became the driving force of history, but now it was the violence of the unified people against their enemies. Where Marxian economism had been rationalist (as it claimed objective grounding in a science of society), fascist nationalism was irrationalist (as connection to the underlying unity of the nation-organism was pre- or anti-rational).

In Sternhell’s words:

Having to choose between the proletariat and revolution, they chose revolution; having to choose between a proletarian but moderate socialism and a nonproletarian but revolutionary and national socialism, they opted for the nonproletarian revolution, the national revolution. (p. 27)

~

I find Sternhell’s analysis helpful in looking at the contemporary ‘radical theory’ intellectual milieu. I’ve been frustrated, recently, in trying to make the case that intellectual figures who self-identify as ‘radical left’ are better placed on the radical right. (Notably Slavoj Zizek, whose political writings tick all the boxes of classical fascism, in my judgement – but see also ‘Accelerationism’ (Compare).) Sternhell’s book is useful because it shows in detail how an idealist transformation of Marxism is hardly a novel way to end up with fascist commitments.

I need to do a lot more reading and thinking about all this – about political ideology in general, not just fascism. And I don’t want to get too preoccupied by engaging the purportedly ‘radical’ continental theory space (from a personal biographical p.o.v, I’d like to reduce engagement with that space, which has already absorbed too much of my attention). But a few disconnected thoughts:

It’s important to distinguish between the different kinds of commitment to a political ideology.

– At the most clear-cut, one can endorse a specific, realised or realisable socio-economic form of organisation. In this sense a fascist would endorse the organisation and policies of Hitler’s Germany or Mussolini’s Italy.

– Next ‘rung’ down the ladder, one could endorse some mode of political or social organisation that doesn’t so closely resemble actually-existing fascism, but that leads one to endorse such fascisms, as steps along the way, best approximations, etc. This might be actually realisable, or it might be utopian and fantasised.

– Next rung, one could thoroughly reject any actually-existing fascisms (or even regard them as anathema), while committing oneself to a politics that is likely to result in such modes of organisation, if pursued.

– Next rung, one can have a set of political commitments or inclinations, that may not be worked up into anything close to a coherent organisational proposal, but that cohere with aspects of such proposals.

– Next rung down, one can have a set of emotional orientations or associations, that don’t exactly even count as developed political commitments, but that cohere with aspects of such commitments.

Given that most of us don’t have fully fledged detailed policy or organisational proposals ready to articulate, or fully developed political strategies for the implementation of those proposals, most of us are going to be on the lower ‘rungs’ of this schema most of the time. But this doesn’t mean that the commitments, associations and emotions that we have can’t be characterised in terms of their association with political ideologies. Indeed, political ideologies need to be understood, in part, in these terms (rather than just in terms of their most developed articulation or projects).

Connected to this, here is a first pass at a rule of thumb about whether a revolutionary or radical political space can best be characterised as left or right. To me, the defining features of left critiques of bourgeois / capitalist society, are the opposition to oppression, poverty and exploitation. Right critiques of bourgeois / capitalist society, by contrast, are critical of decadence, corruption of values, contamination of the social organism by pollutants characteristic of modernity. This is only one rule of thumb, but it’ll be one port of call, for me, for now, in thinking about these things.

HM abstract

I was planning to attend and present at the London Historical Materialism this November – but it turns out, disappointingly, that I’m not going to be able to make it. I’m putting my abstract online here anyway, mostly as a way of pushing myself to write this material up, even if I won’t be able to deliver the paper at the HM event. Obviously this material is ultimately meant to be incorporated into the ‘Brief History of Capitalism’ project, in one way or another. (I don’t expect to be able to write this stuff up for a while yet, I should say, so this post is another promissory note.)

International Credit and the Origins of Capitalism

The recent global economic crisis has placed sovereign debt and international credit at the center of critical analysis of the dynamics of capitalist society. In this paper I aim to locate contemporary analyses of sovereign debt within a broader historical context, by revisiting canonical Marxist debates around the transition from feudalism to capitalism. I briefly outline the principal opposing theoretical positions in these debates: on the one hand a class-conflict analysis of shifts in relations of production within ‘feudal’ society; on the other hand an emphasis on the expansion of exchange relations, and a corresponding shift from autarkic to market-based economic structures. I argue that both of these understandings of the emergence and core characteristics of capitalist society fail to provide an adequate analysis of capitalism as an international dynamic, and that neither gives an adequate causal account of the social pressures behind “so-called primitive accumulation”. I then return to Chapter 31 of Capital I, to discuss Marx’s compressed but extremely rich analysis of the international credit system in the sixteenth century. I argue that international credit plays a far more pivotal role in Marx’s analysis of the emergence and reproduction of capitalist society than has often been recognised, and that contemporary Marxist analyses of global capitalist dynamics could profitably re-emphasise the central role of international credit in the capitalist drive to accumulation.