States and the Masters of Capital: Sovereign Lending, Old and New, 2022

Quentin Bruneau’s work has an ambitious goal: to understand how financiers thought about states in the process of sovereign lending. States and the Masters of Capital explores the late 18th to the early 20th centuries and concludes by highlighting the emergence of a new sovereign lending model that developed during the professionalization of economic knowledge production. As Bruneau succinctly notes, ‘what we have witnessed since the 1980s is not simply a reemergence of global finance or its disembedding, but the triumph of an entirely new kind of global finance made up of financiers who think about states in a radically new way’ (138). States and the Masters of Capital has two sections, the first looks at what Bruneau characterizes as ‘old sovereign lending’ from merchant banks such as the Barings’ and Rothschild’s banks, and part two focuses on ‘new sovereign lending’ and the rise of jointstock banking in places such as the United States. In his tracing of joint-stock banks as part of a broader liberalization of national economies, Bruneau places the development of national level joint-stock banks into the global history of merchant banks: a valuable contribution to the existing scholarship.

One of the strengths of States and the Masters of Capital is its capacity to summarize a large body of secondary literature to make new observations about the history of sovereign lending. For example, emphasizing how merchant bankers became central to the spread of sovereign debts on an international scale when France took out a sovereign loan to pay a massive war indemnity after the Napoleonic Wars (1799-1815) (38). Bruneau’s discussion about the transition from the supremacy of merchant to joint-stock banks from the late 19th to the early 20th centuries relies on his assessment of how financiers ‘knew’ states— a line of inquiry that informs his many arguments throughout the work. To begin to understand how financiers ‘knew’ states, Bruneau deploys Bernard S. Cohn’s concept of ‘forms of knowledge’ (16). Interestingly, chapter 5’s focus on statistics examines the development of statistics in the historical context of political economy. This suggests that the practice of using the two ‘forms of knowledge’ (statistics and political economy) as a framework to predict economic outcomes did not really materialize until the late 19th century and followed the appearance of what we might recognize as business schools (104-109). Such insights could be the basis of a rigorous historical study that mines archival evidence to substantiate claims.

One can read States and the Masters of Capital as a two-layered analysis: one layer that attempts to deploy a critical understanding of knowledge production, and the other layer a synthesis of secondary literature to emphasize new insights. The first, third, and fifth chapters specifically focus on this ‘knowing’ and chapters two and four examine historical changes, while chapter six makes the argument for the new form of sovereign lending that emerged in the early 20th century. On its overall project of making a case for this new sovereign lending, the work is successful, however, its assessment of ‘forms of knowledge’ needs further development. The limited way States and the Masters of Capital interprets Cohn’s insights on ‘forms of knowledge’ is further limited when understood alongside the work’s near complete lack of archival documentation. Without archival work States and the Masters of Capital can only summarize already existing secondary literature (relying heavily on references to Niall Ferguson, and Peter J. Cain and Antony G. Hopkins, for example) which in itself could be useful. It does reference a few published contemporary sources, and on page 130 note 79 it references the Bank for International Settlements Archive. However, with the lack of archival work the book cannot form arguments derived from relevant documentary evidence, which makes it difficult to sustain a historical argument.

Ironically, the full title of Cohn’s book is Colonialism and Its Forms of Knowledge: The British in India and looks specifically at ‘forms of knowledge’ as British cultural production during the British Raj that attempted to legitimize colonization. Bruneau attempts to sidestep the thorny issues of imperialism, settler colonialism, and racialized chattel slavery by cutting out analysis from any ‘semisovereign’ states (coincidentally many these happened to be under colonial occupation such as Egypt) and states such as China that had a ‘precarious’ relationship with the ‘“civilized” nations’ (8). Finance capitalism developed out of the twinned destructive forces of imperialism: racialized chattel slavery and colonialism. This economic model partially solved the problem of how to fund projects that had a long period between investment and returns and how to spread risk, which was one reason why trading for the Royal African Company and other such colonizing companies dominated the London Stock Exchange in its early days. Many could invest in a slave ship and the brutal kidnapping of peoples from Africa, if the ship sunk, they only lost a part of the investment—risk in such investments was once again reduced when western states introduced limited liability as Bruneau rightfully points out (70-92).

Bruneau asks the important question: ‘How did merchant bankers know and evaluate the sovereigns to whom they lent capital?’(29) and attempts to prove that financiers knew which states made good bets to invest in through the concept of ‘gentility’ derived from Cain and Hopkin’s observations on ‘gentlemanly capitalism’ (12). This concept, taken one step further than it is in States and the Masters of Capital, will uncover that ‘gentility’ specifically meant white male middle class British cultural values. Credit was deeply racialized, gendered, and classed, for example settler states such as Canada received loans and lower interest rates via a proximity to whiteness and Britishness. A brief discussion on Haiti’s sovereign debt could nuance how the work uses the concept of ‘gentility.’ Strikingly, Cohn’s work focuses on the production of colonial knowledge and its relationship to power, yet Bruneau’s assessment lacks any historical context of power relationships, particularly ones upheld by structures of white supremacist hetero-patriarchy as if financiers lent to states in a framework ‘disembedded’ from historical context.