New Article: Financial hierarchies, colonialism, and the state

I’ve got a new article out in Development and Change. It’s open access, if you’d like to read the whole thing. A short summary:

I ask why it is that important aspects of colonial financial systems survived past the end of colonial rule. For anti-colonial movements, establishing control over monetary and financial institutions was often a key symbolic and practical aim of struggles for independence. The fact that postcolonial states have often remained stuck in a position of financial dependency thus represents a significant frustration of the explicit ambitions of anti-colonial campaigners.

Looking in particular at British West Africa (primarily Ghana), and drawing on Marxist debates about money, finance, and the state, I argue that a big part of the answer is about the ways that colonial state structures — as a particular form of capitalist state — were embedded in global circuits of money in ways that created important trade-offs for postcolonial governments.

Drawing on Marxist debates about the state and about money, I highlight a pair of persistent dilemmas. First, state power underpins and is underpinned by monetary circulations. While control over the issue of currency is a key source of state power, the entanglement of states and money also binds the state to foster the continued valorization of land and labour within its territory. Second, while state authority is territorially bounded, circulations of money and finance are, by default, global. Global circulations of money and finance intensify the compulsion to valorize already inherent in money. They are also strongly hierarchical, with disciplinary effects much more strongly felt at the periphery.

I show in the article that the colonial state and colonial monetary relations represented a particularly acute form of these dilemmas. The colonial state, as Bruce Berman puts it, must ‘be situated as a specific form or variant of the modern capitalist state’. The efforts by colonial officials to navigate them between roughly 1930 and the end of formal colonial rule ultimately made any more radical ‘delinking’ from imperial financial systems difficult to contemplate in practice.

I show how, from the 1930s onwards, colonial officials grappled with deeply-embedded fiscal and monetary constraints as they tried to articulate a more ‘developmental’ colonialism in response to intensifying social unrest. Efforts to mobilize resources for development ran up against the ‘inertia’ of colonial monetary systems (to borrow a term from Samir Amin, on whose thinking on money, finance, and decolonization this recent piece from Ndongo Sylla is highly recommended). This led to several failed experiments, and a contentious debate over the establishment of a Ghanaian Central Bank. Post-independence leaders found it difficult to contemplate any decisive breaks with the imperial financial system given the continued need to mobilize external resources for development. By the 1950s, colonial officials and nationalist leaders converged on a strategy of maximizing state control over cocoa revenues in order to create fiscal space for development. This helped alleviate some monetary and fiscal constraints, but reimposed the disciplinary effects of world money in new ways.