Capitalism

1.
Islands of Capital

It is impossible to pinpoint an exact place or moment when capitalism began. Capitalism is a process, not a discrete historical event with a beginning and an end, and it did not drop fully formed into a particular location. Even today, no society is organized along fully capitalist lines, and some have argued that a fully capitalist world is a theoretical impossibility. Efforts to isolate one patch of soil as capitalism’s place of ­origin—­­​­Florence, Barbados, Amsterdam, Baghdad, the southern English countryside, or Manchester, for ­example—­­​­have all proved insufficient. That is because the capitalist revolution had always been a process that drew energy from myriad sources. The first springs fed into rivulets that over time became meandering and ever more powerful streams. As these streams moved through time and space, they encountered a world often hostile to their further ­development—­­​­rivulets dried out; brooks met sandbanks and evaporated; and even the mightiest streams encountered mountain ranges that stopped their flow and forced them to take on new contours. ­Shape-­shifting through the centuries, and against all odds, this novel logic of economic ­life—­­​­one that centered less on markets as such and more on the growth of capital, that is, money and goods dedicated to the production of more money and thus more ­capital—­­​­gained power.
Given capitalism’s winding course, one reasonable place to start is with the first ­capitalists—­­​­merchants—­­​­who played a critical role in propelling capital’s revolutionary recasting of economic life on Earth and personified its logic. While we do not know precisely when and where merchants of this particular bent emerged first, there surely was an unusually vibrant and early community of traders who, in the twelfth century, plied their business in the port of Aden, a port that became, according to its most important historian, Roxani Margariti, the heart of Indian Ocean trade.Capitalism did not “break out” in Aden in 1150, but the city was one among a number of notable places that linked together to form the stream that became the river and ultimately the flood.
Today a teeming Yemeni city of about half a million inhabitants in a terribly poor and ­war-­ravaged country, Aden was then, nine hundred years ago, one of the world’s greatest commercial hubs, the center of a trade network that spanned three continents. Its merchants sent ships to distant ports across dangerous oceans, brought the riches of Asia, Africa, Arabia, and Europe back to their storage sheds, then distributed them to the far reaches of the known world, buying low and selling dear, providing shipping services, exchanging currencies, offering credit, and sometimes financing and even organizing the production of agricultural commodities and manufactured goods.
Aden’s principal claim to fame was its pivotal role in the trade between the Arab world and India. When North African scholar Ibn Battuta visited in early 1330, he observed the arrival of “great vessels from” throughout South Asia. He said of Aden, then under the control of the Rasulid dynasty, that “[t]he merchants of India live there, and the merchants of Egypt also,” and he added that its inhabitants “have enormous wealth; sometimes a single man may possess a great ship with all it contains, no one sharing in it with him, because of the vast capital at his disposal, and there is ostentation and rivalry between them in this respect.” Protected by rock formations as well as walls and citadels, Aden was “completely surrounded by [the sea]”; it was, quite literally, a fortified node of capital, an island of capitalists. Capitalism originated on such islands.
For several centuries, Aden was a bustling port, “the commercial centre of the countries of the Ta‑­shï [Arabs],” even according to ­far-­off observers like the ­twelfth-­century Guangzhou port official Chau Ju‑­kua, also known as Zhao Rukuo. From the sparse textual and archaeological information that scholars have painstakingly assembled, we have an idea of what this world must have been like. The tenth-­century Arab geographer al‑­Muqaddasi deemed Aden “a source of good fortune to those who visit it, a source of prosperity to those who settle in it.” “It is the corridor of al‑­Sīn [China], the seaport of al‑­Yaman,” he wrote in his Best Divisions for Knowledge of the Regions (985 CE), “the granary of al‑­Maghrib, an entrepôt of various kinds of merchandise, the depot of all kinds of merchant goods. There are many mansions in it.”
The city’s pulse was the wind: Ships sailed from Aden to India in the late summer, shortly after another set of ships had arrived from Egypt via the Red Sea. The return journey took place from November to March, when winds shifted. Over the year, according to a contemporary document by the rabbinic court of Aden, these winds brought “ships from every sea,” including “ships from India and its environs, ships from the land of Zanj [Africa’s Swahili coast] and environs, ships from Berbera [Somalia] and Habash [modern-­day Ethiopia and Eritrea],” as well as “ships from al‑­Ashhar [al‑­Shihr, Yemen] and al‑­Qamr [Yemen].” Passage to and from Aden was dangerous and often frightening: Merchant Halfon ha‑­Levi ben Nethanel noted “the suffering I endured” when he sailed from Aden. Central Asian traveler (and perhaps also merchant) Ibn al‑­Mujāwir claimed that “[a] man landing from the sea is like one coming out of the grave.” Linking the Mediterranean to the Indian Ocean (and beyond) by sea and land, Aden was a world city constructed by people whose mundane activities, majestic in their sheer scale, included assembling cargoes, inspecting wares, haggling over prices, supervising the construction of ships, observing remote markets, gathering information, and, not least, raising capital. As unlikely as it may seem, these banal activities, performed intensively, showed qualitatively new, emergent ­abilities—­­​­early, scattered sparks of the revolution to come.
Traders were surely attracted to Aden by the strong fortifications that provided security for them and their wares, a critical precondition in a world in which a multitude of rulers and strongmen lived off predatory warfare and tribute. But just as attractive were the diversity and density of the city’s market connections. Flourishing trade begot more trade. At the height of the trading season, ­dhows—­­​­narrow wooden boats that had up to three triangular or trapezoidal sails and carried merchandise as well as crews of up to thirty ­sailors—­­​­crowded Aden’s harbor, watched by merchants in their telltale Arab, Persian, Swahili, and Indian dresses and wrangling over goods.
Aden’s port was a ­well-­oiled machine. Upon arrival, each merchant ship (between seventy and eighty annually during the 1220s) moored just off the coast to be met by mubashshirun (messengers) who, according to Ibn al‑­Mujāwir, would “ask him [the captain] where he has come from and [the captain] asks them about the town, who the governor is and about the prices of goods.” The ship’s clerk would hand the messenger a list of the goods and people on board, and the messenger would take that roster to the governor before informing other traders and relatives of the passengers of the ship’s arrival. While the traders could disembark immediately (after having been thoroughly searched for contraband), their goods remained aboard for about three days before being taken to the customs house, painstakingly inspected, and assessed for duties.
Commercial structures crowded the port, befitting a city ­single-­mindedly dedicated to trade. There was the Dār al‑­Saʾāda—­­​­a wholesale market of imported goods sold for either local consumption or re‑­export. There was the customs house, the storage rooms, and the merchants’ dwellings, some multistoried wooden structures built from African and Indian wood brought from distant shores on one of the aforesaid ships. The cityscape was dominated by markets, with most things produced and consumed, bought and sold, as commodities, including food and water.
While most of the records produced by Aden’s merchant community perished through time and neglect, the sources that remain document the names and activities of several hundred ­merchants—­­​­Muslim, Jewish, Hindu, and, possibly, Christian. In the first half of the twelfth century, for example, there was Rāmisht, a fabulously wealthy merchant and shipowner, most likely of Persian heritage, whose family owned at least three large ships that sailed to India and China. Merchants originating from India, such as Tinbu, Buda, and Fatan Swami, sailed their ships to Aden, as did Maʾsud al‑­Habashi from Africa. There was Abu al‑­Barakat, who acquired dyestuffs like lac, a resinous substance produced by insects, and textiles, among other things, in India and sold them in Aden or transshipped them up the Red Sea to Cairo along with the goods he bought in Aden, such as “brazilwood, cinnamon, and rhubarb.”His counterpart, Abu al‑­HasanʿAli ibn al‑­Dahhak al‑­Kufi, operated a quarry outside of town and traded in African slaves. There were Jewish merchants from Cairo, such as Joseph Lebdi and Jekuthiel Abū Yaqub al‑­Hakīm, who conducted much business at Aden (for example, importing lac), with Lebdi also journeying to India. Then there was Joseph ben Abraham, a local shipowner who traded with family members based in India. Ibn Abī al‑­Katāʾib and his son ran a family business, with the father staying in Aden while his son accompanied their goods to distant ports. And then there was the powerful Madmun ben Hasan ben Bundar, a shipowner who not only served as superintendent of the port and the customs house but also represented the city’s mercantile community to the local ruler and headed the Jewish community of “the Land of Yemen.” Like many merchants in the city, he traded with India: Abraham ben Yijū, his associate on India’s Malabar Coast, sent him pepper, ginger, cardamom, and betel nuts to sell at Aden, receiving in return copper, lead, gold coins, writing paper, sugar, and dates. Some of these traders coordinated their businesses from Aden by working with agents and associates in other ports; others traveled with the goods they sold and bought. These trade missions were often partnerships in which several merchants owned shares. By the twelfth century, these capitalists of different creeds and homelands predominantly conversed and corresponded in Arabic, a sort of lingua franca.
Aden’s great merchants focused on ­long-­distance trade. They exported horses to India but also madder (a red dye), metals, sugar, and, especially, gold currency. They brought Southeast Asian pepper from India to forward it to Cairo and beyond; they shipped ivory and gold from East Africa. Dhows arrived from Gujarat full of textiles. Each merchant traded a range of goods: In one of his letters, Madmun ben Hasan ben Bundar mentions iron, copper, lead, dates, hides, mats, and a carpet. To the best of our knowledge, the merchants focused on certain trade routes. Some traded between Aden and India; others between Aden and the ports of the Red Sea, in particular Cairo, the commercial hub of Egypt. From those cities, other merchants ferried merchandise to the Mediterranean. The Indian Ocean trade, with Aden as its pivot, flowed into these two great channels, but its connections spread much farther, through Swahili traders’ mercantile centers along East Africa’s coast and beyond India to the South China Sea. Remarkably, some merchants in Aden invested in local production of textiles, glass, and, most notably, ships, anticipating by several centuries one of the most crucial developments in the evolution of capital.20
The correspondence of Aden merchants writing to Cairo or India evinces a strikingly familiar day’s work. They carefully monitored supply and demand; they were concerned with transport; they worried about payments and hoped that the investment of their funds would be profitable. For instance, Madmun ben Hasan ben Bundar, writing to Abraham ben Yijū, his business partner on India’s Malabar Coast, confirmed on September 11, 1149, that “[e]verything you sent . . . arrived.” “As for iron,” he added, “this year it sold [well] in ­Aden—­­​­all kinds of ­iron—­­​­and in the coming year there will also be a good market, because there is none at all left in the city.”
Aden’s richest merchants built their dwellings along its waterfront, creating a cityscape of dense business activity and social interactions. They conducted their commercial lives at their residences, hinting at the intrinsic connection between business and social life, as they negotiated with business partners, sealed trade deals, planned future investments, and hosted friends and business partners from other parts of the world. They invested singly and formed ­partnerships—­­​­we know, for example, that they entered partnerships to send ships to the island of Sri Lanka. Many of these partnerships were informal, but Islamic law also afforded a ­long-­established and secure framework in which such arrangements could be contractually agreed upon.
Seeking worldly riches, repute, and power, Aden merchants nurtured a dense network of institutions and relationships that facilitated their exchanges. Trade was never just private; it was always also public. These ­institutions—­­​­some shaped by rulers, others by the merchants ­themselves—­­​­were part of what made the city attractive to them in the first place. From the onset, capitalist activities, there and elsewhere, were structured by an institutional order, the channels through which capital most efficiently flowed.
The least formal institution, but perhaps the most resilient and consequential, was the dense network that merchants spun within their ­ocean-­spanning community. Kinship, religious identities, and a ­never-­ending stream of correspondence that linked traders to one another and kept them abreast of market developments constituted these networks. There were also more formal institutions built by merchants themselves, sometimes in connection with the state. Evidence suggests that in Aden, representatives of the mercantile ­community—­­​­people known as wakīl al‑­tujjār in Arabic and as peqīd ha‑­sōharīm in Hebrew (both terms roughly translate to “trustee” or “representative of the ­merchants”)—­­​­facilitated the articulation of merchant interests and conflict resolution. These titles designated individuals who represented foreign merchants in an official or semiofficial capacity. Madmun ben Hasan ben Bundar, for example, was one, legally representing foreign merchants in the local court, storing and selling their goods, and resolving conflicts among them. Adeni merchants settled their disputes in both rabbinic and Muslim courts, part of a system of marketplace regulation that brought together the merchant community and the state in a flexible and informal arrangement.
Despite its severely narrow capacity and limited personnel on the ground, the premodern state defined the riverbed, however improvised, in which trade flowed. That state, ever shifting, proved constitutive to the new economic logic embraced by merchants and remained so for all capitalists who followed. It provided for traders’ security, regulated the marketplace, and made possible the enforcement of contracts. To finance all this, a shifting set of local rulers taxed the traders by charging customs fees. In Aden, these payments were modest; they probably hovered around 20 percent of the goods’ value. Export taxes were even lower, however, to encourage merchants to buy at Aden. And whatever the rates, payments came due only at the point when the merchants departed—­­​­another reason Aden was so attractive.
Adeni merchants turned themselves into important players in an “archipelago of world cities” that stretched across the Indian Ocean and beyond.26 From a modern perspective, their trade was modest and slow. A typical dhow carried goods that could comfortably fit into two ­modern-­day containers; compare that with the world’s largest container ship, the Ever Ace, which in 2022 carried ­twenty-­four thousand such containers. The round trip from Cairo to India via Aden took about two years.27 Yet despite the obvious differences in scale and speed, Aden’s merchants inhabited a strikingly modern world, one that is, broadly speaking, familiar to many of us today. Even if we do not trade goods, send ships to distant locales, or advance moneys, we recognize the logic of these merchants’ economic life. This familiarity tells us something important about the history of capitalism.