Gimme Culture

AS uniquely perplexing as the source of cocaine may seem, it is but the youngest of a long lineage of substances which provide novel sensory experiences. The economic forces driving cocaine’s production and generating hostility toward it are no different today from what they were three centuries ago when the rising flood of commerce in tea, coffee, sugar and tobacco linked Western Europe to its tropical colonies and revolutionized world consumption.

Precious objects and materials in great variety —ivory, spices, dyes, medicines, plants, silk— had been carried across the earth’s surface for millenia to satisfy the cravings of the rich and powerful. In the concluding decades of the seventeenth century, merchants, plantation owners, slave traders and government officials discovered that satisfying the desires of the humble might prove even more profitable than pleasing the palates of the wealthy.

Chief among those nonessential foods were the bitter stimulant beverages —coffee from the Middle East, chocolate from the New World, tea from China— and sugar. Their first appearance in Europe was linked to Europe’s aggressive outward thrusts beginning at the end of the fifteenth century and rising in tempo thereafter. Making these beverages intensely sweet, as well as calorie-rich, was sugar— known to the Europeans for centuries, but rare and precious until it began to arrive in substantial quantities from the New World. Though not a food, tobacco accompanied these other novelties and came to be consumed with happy, almost meal-like regularity.

As more and more disinherited rural people gathered in Europe’s cities and industrial production spread, tea and sugar came to satisfy people who were hungry anyway. The sweet calories were welcome, the hot drink itself made a cold meal seem warm, and the stimulant cheered the ill, the ill-fed, the overworked, the very young, the elderly. Often supplanting more nutritive substances —including beer, ale and broth— tea led the new pattern of consumption, changing from a treat for royalty to the very symbol of working class hospitality and homeyness, the first pause that refreshed.

While the English became strongly habituated to tea and sugar, the tropical areas where they were produced underwent drastic transformations. Tea remade the Indian subcontinent and the economic life of its peoples. The production of the leaf became a means for the control of land, the regimentation of labor and the expansion of British civil and military power. In the Antilles, sugar brought enslavement, the destruction of indigenous peoples and the reordering of life around the plantation. It drew over 1.5 million enslaved Africans to the British West Indies between the 1640’s and the end of the British slave trade in 1808.

There were no banks in the City until the mid-17th century, and even a century later, banking was under-developed outside London. But slave traders and planters badly needed credit. A slave voyage from Liverpool to Africa then on to the Caribbean, before heading home, could take 18 months. And each point of the trade - buying and selling Africans, buying and importing produce (mainly sugar) cultivated using the labour of enslaved people - involved credit arrangements. Merchants and traders in London, Bristol and Liverpool, bought the planters’ produce, so in effect, British merchants became the bankers of the slave trade.

Provincial banking emerged in the 18th century because of the need for credit in the long-distance Atlantic slave trade. For example, Liverpool merchants involved in slave trading later formed Heywoods Bank, which eventually became part of Barclays Bank. Other modern banking names, such as Lloyds, emerged in this way and inevitably had links to the Atlantic slave trade. The Bank of England was also involved. When it was set up in 1694, it underpinned the whole system of commercial credit, and its wealthy City members, from the governor down, were often men whose fortunes had been made wholly or partly in the slave trade. The Bank of England stabilised the national finances, and enabled the state to wage its major wars of the 18th century. These wars were aimed at securing and safeguarding overseas possessions, including the slave colonies, and to finance the military and naval means that protected the Atlantic slave routes and the plantation economies.

Britain (and the Eurozone) are not facing a sovereign debt crisis. We are not facing a crisis of the public finances. Instead: we are facing the biggest ever crisis of the private financial system.

Why? Because the “greatest expansion in debt of all the world’s economies” is not going to be paid back.

“The greatest expansion of debt in all the world’s economies” must first be written off, ‘de-leveraged’ or paid down.

As this process grinds relentlessly forward, the banks that lent “the greatest expansion of debt in all the world’s economies” face bankruptcy – if not now, in the near future.

That is the crisis we all face. The bankruptcy of the global private banking system – based in our backyard.

The mobilising of finance for the Eurozone is to bail out private banks that engaged “in the greatest expansion of debt.” Although you would not believe this from media reporting, its purpose is not to bail out sovereign governments. The stubborn refusal of German politicians (with whom I have some sympathy) to agree to further taxpayer-backed bailouts of the private finance sector means that private banks face imminent bankruptcy.