Why we should read...
	`Khoja Capital: the social & political role of merchant
	       capital among Armenians'
	 by Leo (373pp, 1934, Yerevan, Armenia)

Armenian News Network / Groong
By Eddie Arnavoudian

June 4, 2007


PART ONE: Armenian émigré capital and the character of
	  Armenian nationalism

Leo's `Khoja Capital: the social & political role of merchant capital
among Armenians', for all its gross faults, including the most
atrocious 1930s orthography (which of course was not Leo's personal
responsibility) is an exceedingly valuable history of Armenian
commerce in the 17 and 18th centuries. It offers, furthermore, an
intelligent assessment of the influence Armenian merchant capital had
on the shaping of modern Armenian nationalism. The argument is
frequently crude, often too categorical in the face of historical
complexity and in places significantly contradictory. It is marked in
addition by an unpleasant passion characteristic of a newly converted
Marxist zealot espousing an ideological outlook he has only a dogmatic
grasp of. Yet Leo brings to his enterprise a vigorous, erudite and
questioning mind and so affords readers an opportunity to ponder some
of the factors that distorted the development of the modern Armenian
nation. The following is offered in the spirit of discussion and
debate and not as an expression of hard and fast opinion.

The defining characteristic of Armenian merchant capital was its
émigré character. In a significant sense it was not a national
phenomenon but a global one. Its home, its foundation and its primary
field of operation have been lost in this year's blazes.  were not in
Armenia, but the Diaspora - Iran, India, Europe, Russia, the Ottoman
Empire and elsewhere. Wherever it operated it played an important and
sometimes even critical role, economically of course but also
politically. But it did so not as an independent Armenian force,
backed by its own national political state, but by virtue of its
association with and its reliance upon European capital and the
economic and political influence the latter wielded across the globe
(p53). In Leo's view 17th and 18th century Armenian commerce developed
rapidly by virtue:

    `... of the fact that it was in its greater part subjected to the
    influence of European capital. It is from this that Armenian
    merchant colonies acquired their immense significance.' (p53)

This émigré and dependent condition of Armenian merchant capital was
to produce a dependent nationalist politics that became the dominant
trend in the Armenian liberation movement and proved to be the most
damaging to the interests of the mass of the Armenian people living in
the historic homelands. The commanding position of Diaspora wealth in
Armenian politics was reinforced and consolidated after the defeats of
the Armenian forces in the 1722-1728 Karabagh wars that Leo also deals
with at some length.


I. ARMENIAN CAPITAL GOES INTO IN EXILE

Through the 17th and 18th centuries Armenian merchants spread across
the territories of the British, Russian and Ottoman empires where they
established themselves as important players. But their earliest origin
as a commercial and indeed even political force was in Armenia proper,
in the Nakhichevan region, in Jugha, Old Jugha, in particular (p56).
Here it was that what Leo terms Khoja Armenian capital first began the
cycle of accumulation that was to generate vast wealth. But despite
their native roots Armenian merchants lacked the means to secure their
development within their homeland. With no state machinery that would
defend them, they were unable to develop the centres of their early
accumulation into regions of independent economic and political power
that could have evolved towards independent nationhood.

A critical moment in the enforced global dispersion of Armenian
merchant capital was the 1603 Ottoman-Persian War when Persian Shah
Abbas forcibly relocated Jugha's entire merchant class and its
population to Persian-held New Jugha, there to serve his drive to
expand trade and wealth within the Persian Empire. Besides economic
considerations this Persian relocation was driven also by
military-strategic concerns - to depopulate and destroy the Caucuses,
or those regions that bordered Persia so as to prevent them becoming a
base for Ottoman attack (p64-67). The forced mass population movements
that resulted were tragic in their consequences not just for Armenians
but for Kurds and others too.

Enjoying enormous privileges in New Jugha Armenian merchants amassed
huge wealth (p76). Folk tradition describes `wealth that poured in (to
the region) like a river.' It was wealth sufficient to generate its
own luxury and its art. It enabled Armenian merchants to retain
sections of the clergy both as artist and intellectual to undertake
printing and other cultural wok that would tend to their various needs
(p81). Exploiting their enormous wealth and international experience
the Persian Shahs also used Armenian merchants as political
ambassadors (p81). Thus privileged, even in relation to Muslims, the
New Jugha merchants grew bold enough to begin a march across the
globe.

Its initial direction was India where it established bases in Madras,
Bombay, and Saydabad. In Madras an Armenian Church had been built as
early as 1547 and one of the city's oldest districts was named after
an Armenian called Thomas. By 1688 Armenian traders in India were
powerful enough to enable one Panos Kalantarian to negotiate
favourable deals with the British East India Company (p82-85). In
India Armenian merchants also played a role in the establishment of
the city of Calcutta in 1690.

Simultaneously Armenian merchants began moving northwards to Russia
establishing colonies in Astrakhan and further north in Moscow. As in
India, in Russia too they secured rights and privileges, tax
concessions and protection for their caravans, highlighted by the
famous 1667 agreement between the Russian Crown and New Jugha
merchants (p92). In Russia too collaboration became close enough for
Armenian merchants to be invited to act as agents for Peter the
Great's commercial ambitions.

By the 17th century French imperial power also entered into the
equation engaged as it was in a tussle with Britain, Holland and
Russia for control and influence in India and the Ottoman Empire. In
search of agents for their designs the French dispatched Jesuit
missionaries to convert the region's Christians to Catholicism. A
primary target was the powerful Armenian merchant class then in
alliance with the British. Converting them was considered a first step
to secure the French a powerful local ally and simultaneously deliver
a blow to their British rivals. Such was a part of Louis XIV business
(p100) during his intervention in the Near East and Persian Empires.

The French/Jesuit campaign did register some success. Though they
failed to get the Shah and the Sultan to persecute non-Catholic
Armenians they did succeed in winning over Catholicos Hagop, then head
of the Armenian Church in Etchmiadzin. This appeared a fantastic
catch. Using the influence he wielded, they hoped to also seduce
Armenian commercial power. Leo claims that Hagop's conversion was
driven by the Armenian clergy's delusions in European power as a
liberating force, delusions framed famously by messianic claims
attributed to 5th century Catholicos Nerses the Great and now
encouraged by the French. Though a faction under Hagop did succumb to
French enticement the French incursion was in the end not successful
and their advance was halted by the Armenian Church's instinct for
self-preservation.

As Armenian merchants established themselves globally, the future
prospect of Armenian capital flourishing in Armenia proper diminished
rapidly as did the possibility of any natural and organic relations
between the Armenian elite in the Diaspora and the Armenian
populations in the historic homelands (p84-85).



II. ARMENIAN CAPITAL, THE ARMENIAN CHURCH AND THE FUTURE OF THE NATION

Even as it flourished outside Armenia, Armenian merchant capital was
marked by a historic particularity - even in the Diaspora it retained
a significant degree of national cultural identity.  Many Diaspora
Armenian merchants contributed their bit to what became an Armenian
national revival. They developed and used a vernacular Armenian
language, encouraged the printing of business and religious books to
educate their members, sponsored Armenian education and even a
rudimentary Armenian press (the first Armenian newspaper was published
in Madras in 1794). Though preservation and cultivation of national
identity was not initially designed to service national political
goals it was put to that purpose when Armenian merchant capital was
eventually forced into political life.

Leo does set out his reasons for the Diaspora Armenian merchant's
entry into the political arena[i] but argues that once there, with
their enormous wealth and social position they `succeeded in
exerting...a profound influence on Armenian national life.' (p67) They
were however able to exert this influence only in alliance with a
section of the Armenian Church[ii]. Without this alliance the Diaspora
elite would have been powerless within the historic homelands and
incapable of forging the dominant position that it did within the
national movement. Unlike the secular Armenian elite the Church
remained rooted within the Armenian communities under Ottoman and
Tsarist colonial occupation and could thus influence the political
life of the people in a way that was beyond the Diaspora elite.

During the centuries of exclusive dominance of Armenian life by the
Church the prospect for the nation, Leo affirms, was one of steady
liquidation, with the Church itself also fated to vanish but at a
slower pace. But this trend comes to a halt with the emergence of
Armenian merchant capital, which, working with progressive trends
within a generally backward Church, contributed decisively to the
Armenian national revival. The progressive label that Leo seeks to
attach to the role of Armenian merchants will not stick without
qualification. Their geographic base, sphere of operations and the
source of wealth made shaped their interests with no significant
reference to those of the mass of people in the homelands. Furthermore
it made it totally obliged to European, Tsarist, Persian or Ottoman
state power that were hostile (despite their words) to Armenian
emancipation and development. Armenian merchant capital may have had a
progressive cultural role but its émigré character made it
indifferent to the needs of the mass of the people at home and
systematically pitted its interests against theirs.[iii]

The dependent condition of Diaspora capital produced an abject
politics of begging for Western imperial intervention as the main
agent of Armenian liberation. This was a politics devoid of any sense
of self-reliance and independent Armenian power. It was the same order
of politics that Leo so bitterly castigates and denounces the Church
for and was as disastrous for the mass of Armenian people in the
homeland as any period of leadership by the Armenian Church that he
criticises.

In the course of its revival the Armenian people in the Armenian
homelands required both enlightenment and mass political mobilisation
in order to secure their right to work their land free of oppression
and exploitation. Merchant capital had little trouble with
enlightenment but the business of mass political mobilisation
represented a positive danger to its interests. Were they to undertake
any mass revolutionary organisation and mobilisation of the Armenian
people in Ottoman or Russian occupied Armenian territories they would
come into conflict with the very states within which they prospered,
states furthermore that despite everything also offered them
significant sponsorship and protection. Armenian merchant capital's
European allies would also disapprove given that with their eyes on
Ottoman markets they also demanded social and political stability at
any price.

As the Armenian people began to enter the political stage in the
post-1850 period two things became evident. First: they had no
indigenous social/political leadership that was large and prosperous
enough to develop a domestic national political ambition, or to
sustain a sufficiently strong and radical wing to secure such
ambition. Secondly Diaspora Armenian merchant capital in alliance with
the Church battled hard to secure a dominant position so that it could
then temper the national movement to its own interests, ensuring that
it presented no real danger to the empires within which Armenian
merchants had obtained privileged positions.

So, when the Armenian people needed uncompromising politics to oppose
uncompromising tyranny they were urged instead to compromise and to
endlessly beg - from powers that had no intention of ever giving. This
politics found its first, clearest and still enduring expression in
the adventurous career of Israel Ori.


III. THE POLITICAL EXTRAVAGANZA OF ISRAEL ORI

In the Armenian imagination Ori occupies a prime place in late 17th
and early 18th century history. He is generally regarded as a
pathfinder - the first dedicated activist of the modern liberation
movement who authored its first political manifesto. But in Leo's
account, Ori, about whom incidentally one can find no Armenian
language sources, figures as a wealthy merchant who in politics was an
utter fantasist, an adventurer, a man with an unparalleled imagination
but whose politics was as outlandish as its author and had little
relationship to the reality that obtained for the vast majority of
Armenian people living in historical Armenia.

The centrepiece of Ori's political project to which he dedicated his
wealth (and that of other merchants!) as well as his immense energy
was a single-minded campaign to engineer a European, French, German or
Russian invasion and conquest of Ottoman and Persian occupied
Armenia. This vision of a foreign imperialism as the primary agent of
Armenian liberation thereafter became and remains an almost
unquestionable template of Armenian politics.

Ori appears to have done nothing by halves. He balked at nothing and
did not lose heart however great the disappointment and the blow. In
his numerous journeys across Armenia, Europe and Asia he was always
equipped with a diplomatic entourage - translators, servants,
secretaries, the whole baggage in fact - appropriate to an emissary or
ambassador of a powerful, wealthy and illustrious nobility that he
presented the quasi-independent but impoverished Armenian landlords of
Karabagh to be. Ori whose extravaganza was financed in part by
Armenian merchant capital, but mainly by his own, always kept a sharp
eye for financial opportunity. In the 1690s he had made a fortune
supplying the French during the Anglo-French wars. Later, after
persuading the Tsar to appoint him an ambassador to the Persian
emperor, Ori at once exploited the privilege to run a lucrative
tax-free import/export venture.

As a result of a great deal of demanding effort, fancy foot-work and
fancier talk, Ori succeeded in recruiting a number of Karabagh
landlords to his grand design of engineering a European invasion of
Armenia. At what is now famously known as the 1699 Angheghagot meeting
he persuaded a gathering of some 11 notables to put their signatures
to submissions to various European courts including those of Leopold
of Austria, the Duke of Tuscany and Johan William of Prussia.  For the
attention of European courts Ori's imagination constructed Karabagh's
minor landlords into a grand aristocracy possessing crowns embedded
with sparkling jewellery and palaces burdened by unimaginable riches.

In his submissions Ori initiated that dangerous and still enduring
practice of consistently overestimating Armenian strength and
underestimating that of their opponents' (p257). Further, in his
endless journeying between European capitals and the occasional drop
into Armenian territories itself, he also established the empty
political ritual that remains with us to this day. Instead of
organising and mobilising the people at home, the leadership goes into
humble beseeching and supplication, genuflecting before European (and
now US) power.

Throughout, Ori shows himself and his merchant allies all eager to
submit to European suzerainty that they believed would free them from
Muslim (Persianand Ottoman) rule - even if this required them to place
a foreign King on their throne (p184). In essence Ori and his allies
cared very little about Armenian national identity or religion. They
were happy to submit to the Pope if this would secure favourable
European power in their spheres of operation. The Armenian merchant
was interested in freedom for his capital and did not greatly care
about the nature of the prayers they would be required to recite.

European courts readily paid lip service to and humoured Ori in his
efforts. It cost Europe nothing to make promises and required from
them no action at all. But it did serve their political purpose.
Besides using Ori and the Armenian elite as instruments in their
efforts to penetrate the Ottoman and Persian empires, European
flirtations and flattering served, intentionally or not, a much more
significant strategic purpose. It effectively immobilised the Armenian
national movement. By pretending to support the Armenian cause, a
pretence sustained by warm welcomes in European capitals, the Vatican,
Paris, Moscow and elsewhere, Armenians political leaders were
persuaded to put all their eggs into the basket of a bunch of
imperialist thieves.

For its part, the Armenian elite was also happy to subscribe to Ori's
ventures. It felt it had no other recourse than help from Europe to
fend off growing Persian and Ottoman avarice. Europe's verbal
endorsements of Ori's ambitions appear to have satisfied Ori himself
and among Armenians generally it created the illusion of an honest and
willing European ally. This reinforced the paralysis of Armenian
political will, leaving the people and the nation at the mercy of
Europe's greed and whim.

Ori unsurprisingly failed to secure any practical European steps for
an invasion of Armenia. In the 1690s the Austrian/German courts had
attention focused westwards in a battle against the French over the
possession of the Spanish crown. Not at all disheartened Ori turned
eastward and arrived in Moscow in 1701. There he met representatives
of the Russian Tsar who was then concluding wars against Sweden for
control of the Baltic and preparing plans for southward expansion at
the expense of Turkey and Persia. To Russian officials Ori made the
same sort of fantastical submissions as he had to those of western
European courts, this time however also fabricating letters addressed
to the Russian Crown or using letters signed by landlords now
dead. Still, into Russian imperial designs Ori fitted perfectly.

As with the Austrians, the Tsar's officials did not consider Ori a
major force. But he was certainly a useful pawn and was so deployed to
do Russian reconnoitring in the Caucuses, but only alongside more
trusted Russian officials. It did not matter that Ori's presentation
of conditions in Armenia was a figment of an unbounded imagination
bolstered by stacks of fabricated evidence. The Russians used him to
get initial and critical contacts in the region. But when it came to
the crunch, during the liberation wars led by the Armenian elites in
Karabagh in the early 18th century, the Tsar refused to assist them
and actively sabotaged their endeavours.

Israel Ori's project set the terms for Armenian nationalist politics
thereafter. In all the successive stages of the Armenian national
movement, Diaspora capital remained powerful enough to subvert each
and every attempt to organise and mobilise the Armenian people
independently of European subterfuge. Facilitating and securing the
grip of Diaspora wealth was the defeat of the 1722 - 1728 Armenian
uprising in Karabagh.

An adequate answer would require a study of the evolving position
and relations of Armenian merchant capital within the social,
national, political and economic structures of the Ottoman, Persian,
Tsarist and western European empires, as well as the emergence of the
seeds of a nationalist movement within Armenia proper. Among the
factors was pressure on Armenian merchants to carve out some
independent political position for themselves from which to defend
themselves against the steady curtailment of their prerogatives within
British, Russian, Persian and Ottoman domains where imperial powers
felt increasingly able to dispense with their erstwhile Armenian
allies. More significantly the emergence of a plebeian national
movement within the historic Armenian homelands presented dangerous
complications for its operations in the Ottoman and Tsarist Empires
that drove it to elaborate a proto-nationalistpolitical strategy.

In setting out his case for merchant capital's progressive role Leo
quietly retreats from what was initially a one-sided evaluation of the
Church to adopt a more rounded, one could even say a dialectical
approach.  Earlier he had dismissed the entire history of the Armenian
Church as a shameful legacy of bankruptcy and reaction. Century upon
century its greedy grip on power was an unmitigated disaster for the
people. From the point it established itself and right up to its
decline in the 19th century the Church was vicious, tyrannical and
parasitical. It seized control of the state and used its power to
steal the nation's land and the wealth created by the people.
Concentrating in its hands all the reigns of power - political,
cultural, social and economic - it sacrificed everything to its narrow
caste interests. Essential to its survival, Leo continues, was a
readiness to serve as an instrument first of Byzantine and later of
European imperial interests to which it blindly submitted itself.

Taking one particular period or aspect of history and representing it
as defining and characteristics for all time will always produce a
derisory one-sided distortion. So with Leo who simply ignores the
evidence of the Armenian Church's independent development and its
independent political goals. He seems oblivious of its 5th century
process of transformation into a national Church with its own identity
and interests and its stubborn struggle against both the Iranian state
and against the Byzantine state and its Church. Leo also neglects to
note the determination with which the Armenian Church fought to defend
its organisational independence. Through history the Armenian Church
was indeed malleable, backward, feudal and selfish and was certainly
amenable to European pressure and deception. But it was also a vast
land owning institution with a significant national and even
international presence and defended itself vigorously however blighted
and enfeebled it may have been.

Mikael Nalpantian was one of the first to comment on this
opposition between Diaspora capital and the Armenian nation. Arguing
that the basis for national revival could only be domestic economic
production, he wrote that 'even if as a result of' Diaspora merchants
`hundreds are enriched, hundreds receive a European education, the
state of the Armenian nation as a whole will continue to remain
paralysed and static.' Armenian merchant capital he continued: 'is not
national in anyway whatsoever and has absolutely no relation to the
[Armenian] national interest ... Armenian merchants become servants of
European interests ... Let me be frank, these people calling
themselves traders and merchants are in reality only intermediaries
for European powers. They do not serve the needs of the Armenian
people.'


--
Eddie Arnavoudian holds degrees in history and politics from
Manchester, England, and is Groong's commentator-in-residence on
Armenian literature.  His works on literary and political issues
have also appeared in Harach in Paris, Nairi in Beirut and Open
Letter in Los Angeles.