Markets of Exception: An Economic History of Impunity in Britain and France, 1720-1830

The recent boom in the “history of capitalism” has neglected one of the most noted and maligned features of its subject: the connection between capitalism and inequality. To address this gap, this dissertation develops and employs the concept of “economic impunity.” It argues that impunity is a function of three variables acting with the sphere of the economy, each of which changed over time even as the structure of the economy itself changed. The first variable is prosecutorial discretion, whether contingent and corrupt or institutionalized in the limits of jurisprudence. The second is technical knowledge, as financial instruments became increasingly esoteric and economic theory became increasingly formalized across the eighteenth century. The third is international mobility, of both capital and its owners, since European capital markets integrated sooner and more thoroughly than markets for land, labor, or commodities. To test this approach, this dissertation uses documents from twenty-three archives in four countries to analyze the disparity between the increasing complexity of international financial instruments and the simultaneously limited scope of securities regulation in Britain and France to argue that the Financial Revolution witnessed the first expansion of economic impunity from the sovereign to the technical managers of capital, culminating in the world’s first international financial crisis in 1720. The second chapter shows how eighteenth century economic thought tried to solve the conceptual and political problems this crisis raised. The third chapter uses the financial records of the speculator Étienne Clavière to illustrate the normal workings of eighteenth century finance and how that systems came apart during the French Revolution, turning impunity into a nationalized and politicized attribute. The fourth chapter investigates the revolutionary interregnum through a pair of case studies in Dublin and Strasbourg. The final chapter shows how international private banks like Barings, Rothschilds, and Laffitte reconstituted the European financial system after 1815, culminating with their efforts to contain the first crisis of the nineteenth century gold standard in 1825. This dissertation accomplishes three things: it injects a tractable approach to inequality into the new “history of capitalism” that goes beyond national income accounting or cultural representations by using the concept of impunity to illustrate how institutional exceptions allow for the frequent but disavowed episodes of dispossession that accompanied the rise of modern finance. It illuminates why a constitutive element of the modern, self-authorizing economic sphere is that great moral and material harm can take place within it despite nobody being legally at fault or politically held accountable. Finally, it allows for a method of historicizing financial crises, which otherwise are taken to be eternal, inevitable, and above all, natural. This last moves the recent effort to historicize “the economy” towards an approach that grapples with how economies fail rather than how they grow.

Advisor: de Vries, Jan