Republic of Capital
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Republic of Capital

Buenos Aires and the Legal Transformation of the Atlantic World

Jeremy Adelman

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Republic of Capital

Buenos Aires and the Legal Transformation of the Atlantic World

Jeremy Adelman

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About This Book

This book is a political history of economic life. Through a description of the convulsions of long-term change from colony to republic in Buenos Aires, Republic of Capital explores Atlantic world transformations in the eighteenth and nineteenth centuries.

Tracing the transition from colonial Natural Law to instrumental legal understandings of property, the book shows that the developments of constitutionalism and property law were more than coincidences: the polity shaped the rituals and practices arbitrating economic justice, while the crisis of property animated the support for a centralized and executive-dominated state. In dialectical fashion, politics shaped private law while the effort to formalize the domain of property directed the course of political struggles.

In studying the legal and political foundations of Argentine capitalism, the author shows how merchants and capitalists coped with massive political upheaval and how political writers and intellectuals sought to forge a model of liberal republicanism. Among the topics examined are the transformation of commercial law, the evolution of liberal political credos, and the saga of political and constitutional turmoil after the collapse of Spanish authority.

By the end of the nineteenth century, statemakers, capitalists, and liberal intellectuals settled on a model of political economy that aimed for open markets but closed the polity to widespread participation. The author concludes by exploring the long-term consequences of nineteenth-century statehood for the following century's efforts to promote sustained economic growth and democratize the political arena, and argues that many of Argentina's recent problems can be traced back to the framework and foundations of Argentine statehood in the nineteenth century.

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Information

Year
2002
ISBN
9780804764148
Topic
History
Edition
1

1
e9780804764148_i0003.webp

Toward a Political History of Economic Life

In September 1815, a heavily indebted Buenos Aires merchant appealed to local courts for succor. He owed his fortune to a panoply of creditors. In normal circumstances, commerce big and small relied on credit. But 1815 was a tough year for capitalists, and a decisive one in Atlantic history as the beam of time tilted from one century to the next. Around him, a war raged over the fate of Spain’s South American possessions, a war that was devastating age-old commerce. In Europe 1815 was a culminating point, bringing peace after decades of revolution and warfare; in Spanish America it was an initial turning point in what was to become a century of turmoil. Facing incarceration, this merchant pleaded to the Commercial Tribunal to rescue him from the “hurried and imprudent abuses that creditors are inflicting on this poor merchant,” steeping his defense in the language of proper entitlements and immunities of upstanding property-owning subjects. These arguments persuaded the magistrates: the court postponed an embargo on the family’s possessions and offered clemency even while it recognized the merchant’s failure to honor his contracts. But in the end, the merchant could not recover from the economic ruin of war. The debts piled up; eventually bailiffs dragged the pleading merchant to jail.1
Our victim, Santiago Esperon, exemplified the fate of many merchants occupying a strategic location in one of the central entrepîts of the Atlantic commercial system. Proud, prosperous, and powerful, the Buenos Aires mercantile class fueled the trade routes between Europe and South America, only to be engulfed in the crisis of mercantilism and sucked into the vortex of revolution. The saga of Esperon, his colleagues, and his class tells us much about how merchant capital coped with massive collective violence over the shape of the political community, how their strategies and actions transformed the meaning of law and justice, and how state-formation shaped the reconstruction of commercial capitalism in the nineteenth century. Esperon and the merchants of empire flourished under the umbrella of mercantilism, a politically constituted regime of wealth-seeking in which capitalists relied upon legal favors and privileges percolating down from the sovereign. As warfare and revolution shredded the legal ligaments of mercantile fortunes, capitalists struggled to create an alternative juridical world to define and uphold their property rights. They would eventually do so by shifting legal sovereignty to the possessor and codifying the instrumental logic of markets. Esperon’s agony came at one of the inflection points of this transformation and exemplifies convulsions of the trans-Atlantic shift from controlled to free markets, and from political to private property.
In the colonial era, Buenos Aires connected European markets with one of the world’s largest sources of specie: Andean silver. A century later, Buenos Aires reemerged as the hub of the world’s fastest growing export economy based on agrarian staples. In this transformation, merchants played a crucial role, the sequence and consequence of which were unforeseeable to protagonists. Over the course of almost a century, capitalists and rulers experimented with and rearranged the balance between private interests and public power to pull the region out of the maelstrom that eviscerated Santiago Esperon’s once-prosperous colonial enterprise.
This book describes the collapse, beginning in the late eighteenth century, of the Spanish Empire in the River Plate region of South America, followed by pendular swings between state-building and civil war, and a culminating triumph of liberal constitutionalism in the 1860’s; it traces the transition from colonial Natural Law to instrumental legal understandings of property. As such, the developments of constitutionalism and property law were more than coincidences: the agony of the polity shaped the rituals and practices arbitrating economic justice, while the crisis of property animated the support for a centralized and executive-dominated state. In dialectical fashion, politics shaped private law while the effort to formalize the domain of property directed the course of political struggles.

A Political History of Economics

Republic of Capital is a political history of economics. This book treats the institutional fabric of everyday life, over the long run, as both the setting for social interaction, and thus a determinant of macro-social change, as well as an effect of conflict and bargaining, an unanticipated outcome of collective action. The causality runs deliberately in both directions. Politics shaped the rules of economic activity; economic forces contoured political possibilities and improbabilities.2 However, if pressed to give an ultimate “cause,” Republic of Capital places great emphasis on the political struggle for supremacy in the Atlantic world as the detonator of republican transformations on both sides of the ocean, struggles that culminated in the collapse of European empires in the Americas. But if imperial competition precipitated a crisis and collapse of the ancien rĂ©gime, explaining the patterns of republican successors requires a broad analytic framework to steer us away from simple nomothetic reasoning.
This book does not suggest that the narrative of long-term transformation is nothing but a sequence of unstructured contingencies, accidents, or mere happenings. There existed, to borrow Marshall Sahlins’s term, a “structure of the conjuncture” of state-building and class-formation. 3 People—rulers, capitalists, peasants—understood and advanced their interests in identifiable historic and strategic contexts. These contexts shaped the spectrum of possibilities of public arrangements of power and private claims on property.
To make sense of this structure of the conjuncture, this book braids several narrative approaches. First, it explores the evolution of political ideas. From late imperial champions of Enlightened reform, to the rise of Romanticism, and the final emergence of an instrumental political theory that emphasized order over liberty, the ideological peregrinations of liberalism framed republican projects and promises. In particular, political nostra informed perceived ideal balances between social autonomy and public power. Ideas framed imagined possibilities and animated peoples’ political choices.
These ideas, however, emerged and changed in institutional contexts. Thus, the book traces the political-economic downfall of a mercantile colony, a half-century of civil war over disparate visions for the republic, and internecine battles within liberal rulership. The failed effort to nurture public institutions in the wake of colonial collapse provided the setting for intellectuals to reappraise secular faiths. Institutions conditioned available political and economic resources and patterned rules governing their possession. Accordingly, a central concern of this book is to depict the ebb and flow of constitutionalist efforts—failed and triumphant alike. What constitutionalists sought were durable rules to govern the process of rule-making, to give institutional girding to politics and public power.
What public rulers could and could not do depended in turn on proprietary transformations—especially the concerns of possessors of capital able and willing (or neither) to back some political projects over others. Capital interests themselves were anything but static, especially considering Buenos Aires’ aperture to the Atlantic economy from the days of its founding. Consequently, this book follows the travails of merchant capitalists’ efforts to stabilize market relations through daily management of conflicts over debts, failed contracts, and the status of money. Private claims over valuable assets—and the ability to enforce them—animated personal interests and shaped what capitalists wanted and expected from public rulers.
In other words, Republic of Capital weaves back and forth between disparate ideas shaping republican visions, conflict over institutions representing citizens in public and private matters, and daily practices of arbitrating interests to account for the long-term reordering of the global political economy from colonial mercantilism to commercial capitalism. This conceptual threnody conveys a sense of the mutually constituting fields of social life. For instance, Republic of Capital insists that interests not be treated as given, pre-constituted preferences, as the current vogue of “positive political economy” maintains.4 Rather, they are located and shaped in ideational and institutional contexts. Yet, at the same time, capitalists’ interests are not purely reducible to other spheres, but enjoy a measure of autonomy and even, in the last instance, partial determining powers over the shape of evolving political economies. The same balancing act applies to institutional and ideational levels. None are reducible to the other, but each is patterned by other fields of social life.
Braiding ideas, institutions, and interests into a narrative of long-term transformation implies a looser form of causality. Each field is mutually constitutive and indeterminate at the same time. At particular moments and faced with specific problems (like how did the collapse of public institutions and warfare alter the interests of capital and reshape political ideology), the causal lines run one way and are thin and sharply defined. But seen from a greater distance, the larger transformations described in Republic of Capital give way to broader, blurred and curving lines of causation. This may dissatisfy many social scientists looking for unambiguous nomothetic explanations. On the other hand, many historians may object to causal claims altogether, preferring more interpretevist, unstructured observations. This book represents an effort to transcend this divide between explanatory and interpretive accounts of modern life.

Buenos Aires and the Atlantic World

The structure of the conjuncture was an Atlantic setting. Buenos Aires’ transformation from ancien regime colonialism to modern constitutionalism was not unique. It was a trans-Atlantic phenomenon with a constellation of variations around a familiar theme. As such, the River Plate was one corner of an Atlantic world adapting to the fallout of the American, French, and Spanish American revolutions. Republic of Capital places Argentina (and Buenos Aires in particular) in a comparative context. No less than other republics, Argentina was a theater for liberal experimentation and consolidation. In particular, inhabitants of the region wrestled with divergent projects for the political community. If the state-form was a shared ideal, its shape and attributes were not the source of consensus.5 For much of the nineteenth century, Argentines, like Mexican, American, and French citizens struggled to reconcile a liberal tension between public representation and private property, between formalizing the powers of a political capital with the unimpeachable rights of personal capital.
Buenos Aires did more than just express a trans-Atlantic problematic. Citizens of the city felt part of an Atlantic world. Porteños, as they are called, saw themselves as participants in a saga unfolding on both sides of the ocean. Intra-European struggles and the spread of revolutionary pulses sundered the colonial-metropolitan system. Porteños read and reflected upon the principal tracts of the Enlightenment and post-Enlightenment, and never desisted from understanding their place in the universe in regional as well as trans-Atlantic terms, and accordingly grappled with the turmoil of the age of revolution in languages familiar to citizens elsewhere. Ultimately, the transformation of Atlantic trade and capital flows induced state-builders and investors to nurture a political community oriented to the promise of European demand for commodities, and a magnet for Europe’s capital and migrants. From start to finish, the story of state-formation and economic reconstruction was a cosmopolitan process. The Atlantic world was a historical setting in two senses. It was a theater for homologous, though not identical, transformations from ancien regimes to modern ones, incomplete and faltering though they may be. It was also a world of commonly shared convictions and aspirations in which an emerging citizenry looked as much afar as locally for inspiration, illustration, and incentives for their private and public enterprises.
But being part of the Atlantic world did not mean that international workings unfolded according to universal rules. This book treats the Argentine experience as a distinctive expression of larger processes—as an example of difference within unity. Two political variables marked the postcolonial and republican transformations in the River Plate: first, the collapse of the Spanish empire left a profound political vacuum; second, revolution and civil war mobilized society into deeply antagonistic camps whose wars destroyed the foundations of property and social hierarchy. Together, these unintended bequests of the viceregal overthrow in 1810 meant that constitutional architects had to juggle the following seemingly incompatible goals: stabilize property rights through the rule of law and integrate the polity under the shelter of legitimate institutions whose rules were themselves constantly contested by rival forces. Argentina speaks to the conflicts and complexities of creating institutional ligaments of capitalism when the political channels for dealing with collective conflict were themselves disputed branches of public power.
Comparisons help the Republic of Capital address ways in which nineteenth-century liberalism has been idealized. This book contrasts Buenos Aires with other Atlantic societies to explore both unity (relations of connection) of the Atlantic, as well as differences (relations of comparison)—to separate unique, and therefore contingent, dimensions, from universal and therefore more structural causal forces driving the liberal experience.6 The American and French Revolutions are often seen as markers of a new era in social, political, and economic relations. The crisis of Old World mercantilism and the implosion of absolutist states gave way to democratizing polities and burgeoning market relations. It is generally accepted that what made this era unique was the uncoupling of polity and economy. Whereas ancien regimes meddled in economic activities as much as they preserved the rule of the privileged, post-revolutionary states unfettered entrepreneurial activity while enfranchising at least part of their citizenry. The state’s withdrawal from the economic realm even as it claimed to represent a broader social base comprised two simultaneous components of the drive toward “liberty.”
Over the long run, the structure of the conjuncture can be broken into separate moments. Republic of Capital suggests a succession of three conjunctures. (1) Revolution seized the Atlantic world during the years 1776 to the 1820’s. Beginning with North American secession and culminating in the separation of Latin American colonies from their Iberian cores, the dynastic bridge between metropoles and peripheries went up in flames that engulfed the entire hemisphere. (2) From the rubble of war emerged new efforts to stabilize political communities and social relations from the 1820’s to the 185o’s. Fledgling republics grappled with highly mobilized societies and deep fissures among political camps. In the case of the United States, the carnage of the frontier, wars with Mexico, and finally the Civil War comprised a set of violent episodes and processes that transformed state powers and redrafted North American property rights. In Spanish America, analogous struggles had similar effects, although republics south of the Rio Grande could not fall back on the accepted constitutional frameworks that lent the United States a patina of political stability. (3) Dismayed by the extended effects of revolution by mobilization, Spanish American statesmen aimed to wind down the fractious effects of conflict over the shape of the political community; elites settled for a framework of state that shifted the premium to top-down integration. Spanish America (soon to be joined by Brazil) came to resemble less the aspirational republicanism of the United States and more the constructivist purpose of Risorgimento Italy or unified Germany. The River Plate passed through a sequence of conjunctures, from revolution, to anarchy, to order. Each moment left its mark on public power and private rights. Putting the conjunctures together reveals a long-term process of structural change, from the demise of ancien regime dynasties and private privilege to orderly republican models of equality of legal subjects and the rights of private property holders. In this fashion, Republic of Capital is a contextual account of short-term events while examining the conjunctural forces contouring dramatic change over time. While attentive to the structure of the conjuncture, this book seeks to tell a tale of how the structure itself—in this case the public and private legal fabrics of Atlantic capitalism—transformed.

Economics and Law

Realizing the rights of citizens and realizing the rights of property are often treated as separate phenomena. State-formation and economic development until the late eighteenth century were seen as interlaced processes, thereafter coming apart in the wake of democratic revolutions to obey divergent story-lines. In narratives of state-formation, the ensuing century is treated as one of increasing “incorporation” of popular sectors and gradual, if fitful, democratization of modern states.7 For students of t...

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