The Many Lives of Money

Against the Current No. 214, September/October 2021

Folko Mueller

War, Slavery, Finance and Empire
By David McNally
Haymarket Books, 2020, cloth, paperback and ebook.

IN HIS LATEST release, Blood and Money: War, Slavery, Finance, and Empire, David McNally is doing nothing short of challenging the common belief that money emerges as a universal measuring stick to facilitate the exchange of goods. Instead of seeing it as merely overcoming the tedious barter system, he demonstrates that it is inextricably linked to foreign conquest (war) and human bondage (slave trade).

The gory name, reminiscent of perhaps a neo-noir novel, should not come as a surprise to readers familiar with some of McNally’s earlier work. His previous two books, Monsters of the Market: Zombies, Vampires and Global Capitalism and Global Slump indicate that he is not only a political economist, but unafraid of pursuing unconventional angles in reinterpreting history.

Blood and Money is organized in five chapters, begins with ancient Greece and Rome, and ends with Britain and the United States. McNally specifically chose these empires because their domination was underpinned by monetary innovations that became generalized.

Chapter 1 begins with ancient Greece’s slave trade. McNally connects ancient Greek philosophy to the emergence of money and commercialization of slavery. Aristotle considered the submission of slaves to their masters as part of the natural order, as did Plato. Like cattle, slaves were branded and monetized.

It was the burgeoning slave trade, however, in conjunction with the monetization of society, that truly commodified the slave body. While for the Romans slaves were initially just part of the plunder accumulated during military campaigns, they soon followed the Greek example. McNally quotes Cicero, in a letter to a friend, as describing a platform full of slaves as worth about 120,000 sesterces.(1)

In Chapter 2, “The Law of the Body,” the author illustrates the interrelationship of money and the body. He informs us that during the days of bartering, early forms of money consisted of things that sustain the body (foodstuff), things that adorn the body (such as shells and precious metals) and tools that assist the body in producing other things.

By the end of the tour, McNally concludes that the payment of mercenaries as well as the large-scale sourcing of weapons and provisions was crucial in the emergence of coined money. Money and military power became symbiotically related.

Chapter 3 covers the period from the Middle Ages until 1650 and focuses on England. According to McNally, over the course of time and involving intense political struggle, the extraction of modern money from the “bones of princes” is transferred “into the blood of the commonwealth.”

From Feudalism to Market Dependence

Eventually English feudalism evolved into a network of decentralized legal and military powers exercised by local lords and bishops based on the exploitation of peasants. While still loyal to the monarch, they wielded extensive powers at the level of the local manor including their own court system and gallows.

For the first hundred years, farming and the reclamation of uncultured land grew substantially, with new revenues flowing from the peasants to the lords. But in the end, the system proved a hindrance to progress.

By the end of the 13th century — with no investment into technological advances in agriculture, such as animal traction and improved tools — agricultural productivity lagged behind population growth, while to further the political standing of the individual lord, investments were poured into the military.

The resulting depression, combined with the Black Death and other pandemics, halved the workforce. Consequently the lords were forced to relax obligations and serfdom ended up largely disappearing. Estate lands were increasingly leased out.

McNally notes that this went far beyond just the erection of hedges and fences, ultimately paving the way toward a privatized agricultural system. Large-scale commercial farms employed poorer peasants as wage laborers and as output rose from subsistence to petty accumulation (initially just to stave off lean years), market-driven pressures arose.

The result was that wealthy farmers (selling their produce to the market) and landlords (making changes to their land to attract the farmers and their rents) became market dependent. By the middle of the 17th-century, English society was a predominantly agrarian capitalist one.

Colonialism and Perpetual War

Chapter 4 plunges the reader into the age of colonialism. As international trade intensified, a payment standard became necessary. Barring a national currency that could meet that role, global payments had to rely on precious metals. Consequently, the acquisition of precious metals, in particular gold, became an obsession.

By the 1580s, Spain had amassed control over vast New World territories; their inflow of precious metals was staggering. However, even at this stage, it was suffering from massive financial crises due to weak domestic production and geographic overextension.

England on the other hand, had invested in agriculture, trade and manufacture, with its plantation colonies in the New World backed up with military might.(2) Soon England moved into first place in the new imperial order.

Perpetual wars and colonialism require money, lots of money. The first source of revenue is taxation. By the first quarter of the 18th century, the English were paying more than twice as the French per capita. McNally points out that in 1691, the English government spent £(3) million for military expenditures and within four years that figure reached £8 million. However, tax revenues over the same years averaged only £4.5 million.

The shortfall had to be covered by borrowing. What unfolded over the next century was the beginning of a capitalist banking system based on innovative debt-financing tools to wage war. The Bank of England was founded for one single purpose: to fund war with France. In figuring out ways to monetize public debt it came up with two groundbreaking features:

1) For the first time in English history a loan to the state was made largely in paper currency (banknotes and bills) rather than gold and silver coins. This was so novel that the government insisted that the bank hold a £200,000 gold reserve to back up its paper currency to reassure the public.

2) The people who bought the loan (in essence shareholders of the bank, for the bank got started as a consortium of investors in public debt) were now able to cash out by selling their shares on the developing stock market.

These notes were good as long as the government upheld its debt payments to the bank. In theory, the bank agreed to exchange them for silver and gold coin. In actuality, it only held about 12-15% of the precious metal reserve equivalent.

With the already existing shortage in coinage, further devaluation by clipping3 as well as counterfeiting exacerbated the fragile monetary system. Lawmakers were aware of these inflationary threats and did not want the paper money to proliferate out of proportion. The result: extremely draconian measures for those two offenses, including the death penalty.

Isaac Newton, the famous English mathematician and scientist who was master of the mint during the last stage of his life (1699-1727), was merciless in his pursuit of perpetrators and in his very first year executed at least 15 people for coinage-related crimes.

His contemporary, the English liberal philosopher John Locke, shared Newton’s enthusiasm for harsh punishment. Locke declared that clippers did more damage than all the country’s enemies and identified money as the blood of world commerce rather than just the blood of the commonwealth.

It is no surprise that a young Locke was also among the earliest investors in the Royal Adventurers into Africa, a British company which was given a monopoly on the English slave trade. Slavery’s twin brother, colonialism also failed to raise any eyebrows among English liberals. Locke was appointed to the new Board of Trade and Plantations in 1669, concurrent with serving as secretary to the Lords Proprietors of Carolina.

McNally points to the Lockean nexus of money-slavery-colonialism at the very heart of liberal political philosophy in England. Slavery and colonialism were the cornerstone of their economy until the industrial revolution. Classical liberalism was constructed to defend the rights of property and the role of the state was to protect these rights, including property rights over persons.

The U.S. Rise to Empire

In the fifth and final chapter the author examines the political and economic powerhouse that eclipsed the British empire over the first half of the 20th century — the United States.

He identifies Virginia’s tobacco receipts, which became legal tender in 1642, as its earliest forms of money, together with notes based on mortgaged land which originated in South Carolina in 1712 and expanded to eight other American colonies. The first is based on slave labor and the second on settler colonialism — the thread continues.

As the reader already learned from previous chapters, wars need massive amounts of financing and the War of Independence was no exception. Colonial officials issued notes, which were basically backed by land that would be seized from Indigenous people.

Just as in the ancient Greco-Roman world, war was a medium for monetizing social life. This manifested itself in two ways: One was the massive demand for supplies and weapons bought from the “market.”(4) The other was through wages paid to soldiers (many of whom came from a subsistence farming background where no money was required).

While slaves were the largest capital investment in the U.S. Southern economy, the Southern slave-based banking system was thoroughly integrated not only into financial markets in the eastern United States, but also global markets based in London.

The North had a more advanced industrial system which ultimately helped it to be victorious in the Civil War. The monetary transformations resulting from this victory propelled the country forward. The Civil War “nationalized” the state and the banking system.

Predictably, this began with war finance — the Union had been issuing Treasury notes to finance the war from the war’s beginning. When commercial bank purchases exhausted their supplies of gold, however, government suppliers went unpaid and Treasury notes ended up heavily discounted in money markets.

Facing the collapse of war finance, paper bills were introduced without the backing of precious metals. This was enforced by the Legal Tender Bill (signed by Lincoln into law on February 25, 1862) and the notes known as “greenbacks” were born. Within a couple of years, a 10% tax on the remaining currency-issuing state banks was imposed. It had the desired result — the state banks heeled and the greenbacks reigned.

Once this was established, it did not take long for calls to reimpose dollar-gold convertibility. This occurred for two reasons: 1) a concern over inflation should the supply of paper money spin out of control, and 2) the now uniform national currency carried no global legitimacy yet (at a time when the world was moving towards an international gold standard). These calls prevailed:  by 1879 the United States was back on the gold standard.

McNally reminds us that a dynamic process of capital accumulation in industry, agriculture and transportation with finance serving as a leavening agent brought about the internationalization of the dollar.

During the 1870s, farm acreage grew by 44% nationwide. Kansas corn production rose from 30 million bushels in 1866 to 750 million in 1886. Increased production was tied to rapid industrial transformation ranging from steamboats to telegraphs and railways. Complex financial markets also developed in tandem: by the end of the century roughly 60% of the loans made by New York banks were backed by negotiable securities.

By the time World War I broke out, the U.S. economy accounted for one-third of global industrial output. Rising exports to European states for war supplies (in particular grains and cotton) increased the value of the dollar. By the time the war was over, the dollar had displaced the pound sterling as the leading global currency.

Neither World War I nor World War II was fought on U.S. soil. While the other major participants were ravaged by war, the U.S. economy boomed, primarily due to military demand and exports to Europe.

McNally reminds us that at the beginning of the hostilities in 1939, the U.S. economy was about one-half the combined size of those of Europe, Japan and the Soviet Union. By the time the war was over, the United States accounted for half of global industrial production and held almost three-quarters of the world’s gold reserves.

U.S. ascendency to imperial hegemon was from then on unstoppable. It culminated in the transformation of the dollar from local currency to what the author terms “imperial or global fiat money” after the United States moved off the gold-standard and the Bretton-Woods agreement collapsed in 1971. Half a century later the U.S. dollar is the currency which is used in 85% of all foreign transactions.

While the author points out that the Nixon administration could not have grasped how exactly this reconfiguration of international finance would play out, the timing was beneficial for U.S. finance since this deregulation went hand-in-hand with increasing foreign direct investment and global manufacturing and production. This transformation was thus conducive to global capital in general.


A number of books on the history of money are available, such as Jack Weatherford’s The Ascent of Money, Niall Ferguson’s The History of Money or Frederick Kaufman’s recent The Money Plot. Some have tried to popularize the history of money, to make it accessible to a large audience. Others have taken a more anthropological approach, while yet others have explored money’s metaphorical significance.

Weatherford in The History of Money (1988) acknowledges the reoccurring impact across time and societies — “As money swept through history and across societies, its impact seemed surprisingly similar from ancient Greece and Rome to modern Japan and Germany” — but fails to mark out the continuous blood trail.

One would think that Ferguson’s second chapter of his Ascent of Money (2008), “Of Human Bondage,” might discuss money and slavery, but it is more of a pun on government-issued bonds (although their role in financing wars is discussed).

Blood and Money is a welcome addition because it is the only one that shows from start to finish how the two are inextricably linked. Further, it utilizes a Marxist framework.

McNally refuses to endorse easy mono-causal explanations, for example, around the emergence of coined money. Rather he views the world through a dialectical lens, taking into account the interplay of underlying socio-economic and cultural processes. More importantly he shows us that capital does indeed come into the world “dripping in blood and dirt,” as Marx wrote.


  1. Sesterces were the predominant Roman coin at the time.
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  2. The English Navy defeated the Spanish Armada in 1588, which had not only strong political and religious repercussions, but even impacted future technological advancements.

  3. Clipping is the act of shaving off a small portion of a precious metal coin for profit. Over time, the precious metal clippings could be saved up and melted into bullion or used to make new coins.
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  4. During the winter of 1777-78, American soldiers consumed almost 2.3 million pounds of flour and nearly as much beef.
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September-October 2021, ATC 214

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