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23 In one of these, he confesses to what he terms 'our Hegelian reasonings in 1965', and now offers a more adequate materialist account ofthe 'exceptional' features ofBritish social development an aristocratically based hegemonie class; a traditional polity; and industrial backwardness. The existence ofwhat, from the perspective of orthodox Marxist theory, Naim considers to be 'paradoxical' aspects of British development is stated forcefully and clearly: British Capitalism and Marxist Theory 23 The pioneer modem liberal-constitutional state never itself became modem; it retained the archaic stamp of its priority.

He continues, 'the idea that the functioning of British society and the state can be explained wholly (or even mainly) in terms ofthe internal industrial economy and its relations of production (the class struggle)' is an example of the overabstraction which has been the main deficiency 26 Capitalism Divided? of past Marxist analyses of Britain. 32 The seriousness of the implications for orthodox Marxist theory which Nairn's work presents is borne out by these statements. At what point, one might ask, does this historically specific model part company with the concept of the capitalist mode of production?

16 A further, but neglected, consequence of the English monarchy's relative weakness - and one which is arguably at least as important - was the means by which state expenditure was financed. In England, the existence of a wealthy commercial bourgeoisie was simultaneously the basis for resistance to direct taxation and for the state's use of loans to finance its expenditure. Excise duties and land taxes were the means by which interest on the loans could be paid, and consequently wealth was transferred from the poor and the landowners to the fundholders and 'monied interest' P Both the Bank of England and the Stock Exchange were the products of England's 'second revolution' in the late seventeenth century which ended Charles II's attempts to restore arbitrary royal powers in financial matters.

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