Eric Davis, Challenging Colonialism: Bank Misr and Egyptian Industrialization, 1920-1941 (Princeton: Princeton University Press,


Eric Davis intends his study to answer a wide range of questions concerning capitalism and industrialization in the Middle East. Two issues in particular are central to his analysis: “what were the social forces behind the formation of the Bank Misr” and “why did the bank experience a period of rapid economic growth only to later face financial collapse?” (p. 5)

Davis’ major contribution lies in the way he sets out to answer these questions. He situates himself in the tradition of “Marxian political economy,” but he immediately rejects both the dependency literature and the “Leninist model,” on the grounds that they exclude the possibility that any autonomous capitalist institutions such as Bank Misr can arise in peripheral countries and are therefore too static and too deterministic. Instead, Davis insists that “world market forces…must be studied in the context of their interaction with the givens of Egyptian society, particularly the social structure that existed during the precapitalist era.” By focusing on the internal contradictions that went along with Egypt’s incorporation into the greater world economy, he proposes to show that creating a national investment bank had become vital for certain forces within the country by 1920. Furthermore, he argues that this process of integration led to a fundamental “change in consciousness…among the various social strata of Egyptian society” that was intimately linked to the creation of Bank Misr (p. 10).

This perspective provides Davis with a coherent way to present a great deal of extremely useful data concerning the social and political dimensions of Egypt’s economic development between 1760 and 1941 that is unavailable anywhere else in English. On the basis of a systematic investigation of local land registers and other materials from the Egyptian national archives, he traces the fortunes of several of the country’s richest landowning families from the time they began to control large tracts of agricultural land at the end of the Muhammad ‘Ali period until the 1920s, when they composed both the economic and the political elite of the country. By a careful reading of local newspapers and summaries of parliamentary proceedings, he shows that the doctrinal differences between the National Party and the People’s Party from 1900 to 1920 were generally less significant than the virtual unanimity the leaders of both expressed on economic matters — a unanimity that derived from their common social background. By paying close attention to the peculiarities of economic change in al-Minya province after 1900, Davis is able to explain why a high proportion of those landowners who originally invested in Bank Misr came from that particular region, while avoiding misleading generalizations about trends in Egypt’s rural areas taken as an undifferentiated whole.

Davis’ presentation of Egypt’s international affairs during this period is equally nuanced and insightful. He suggests that conflicts which arose among several of Egypt’s more industrialized trading partners during the 1920s and 1930s played an important part in creating the conditions in which Bank Misr’s initial expansion could take place. Davis devotes an entire chapter to the Bank’s investments and subsidiaries in other parts of the Arab world. This chapter alone makes the book worth reading; it sheds considerable light on Egypt’s economic dealings with the Hijaz and how these contacts were affected by British activities in the region in the years just prior to World War II.

Despite these many virtues, though, Davis’ analysis of Egypt’s internal dynamics is structured according to a vision of political economy which has much in common with that of the dependency theorists whose writings he criticizes. This leads him to deal with changes in the distribution of power among Egypt’s social classes primarily in terms of their relationship to forces outside the country itself. Events such as the adoption of long-staple cotton by larger landholders and the promulgation of the muqabala law of 1874 are explained largely in terms of Egypt’s relations with European banks, the Ottoman Porte and foreign merchants. Elsewhere Davis credits “British colonial policy” with initiating significant changes first in Egypt’s system of irrigation, then in land reclamation and finally in the country’s “class structure” in general. Changing relationships among the most important social forces in Egyptian society are seen as “consequences of Egypt’s increasing subordination to European imperial control” (p. 27) rather than as determinants of political and economic outcomes themselves. The reader cannot tell from Davis’ observations on the ways in which the country’s “urban middle classes” and its rural notables, interacted with Muhammad ‘Ali’s state administration whether these forces in the end benefited from the regime’s commercial and industrial monopolies or were instead hurt by them. And he does not say at what point Egypt’s “ruling Turco-Circassian political elite” (p. 33) lost its predominant political position within the country relative to other social forces.

These circumventions resemble Immanuel Wallerstein’s treatment of whether or not there was a rising gentry in early modern England.* Davis does not precisely connect conflicts among Egypt’s state officials, larger estate- holders and village notables on the one hand to changes in the country’s political affairs on the other. He lays out the history of the Khedive Ismael’s dealings with the Ottoman Empire and European financial concerns after 1860 and then argues simply that within Egypt “the interaction of the rural notables and the Turco-Circassian ruling class” led to “the creation of a Turco-Egyptian stratum” which was “more powerful” than either of its constituent elements (p. 40). This grouping, later called Egypt’s “large landowners” or “agrarian bourgeoisie,” serves a function identical to the one that England’s comprehensive capitalist class serves for Wallerstein. Davis’ attention to the leading edge of capitalist development in the country comes at the expense of downplaying both conflicts within this “agrarian bourgeoisie” and domestic opposition to this class’ activities.

Thus Davis explains why Bank Misr was created by indicating which social forces within Egypt would have benefited from such an institution around 1920: richer landowners from al-Minya province provided a large percentage of the Bank’s initial capital; many of these estateholders had run up immense debts to foreign creditors and were looking for a measure of relief from their mortgage payments; foreign banks and local cooperative institutions provided a model for the sort of institution these landholders needed; and pressure for such a bank was compounded by the difficulties associated with World War I. What is missing is some discussion of the sort of conflicts that large landowners as a class were engaged in at the time Bank Misr was established. Davis remarks in a footnote that “the Turkified sector of the Egyptian ruling class…and the Palace remained hostile to the Bank Misr throughout the period of its expansion between 1920 and 1939” (p. 133, n. 53), but never explores why these forces were opposed nor why Bank Misr could have been set up in spite of this opposition.

The Bank’s relations with the Wafd Party during 1938- 1939 are dealt with in terms of cliques and conspiracies among Egypt’s leading politicians, though at one point Davis suggests that conflicts associated with Bank Misr were aspects of a more comprehensive struggle between “the agrarian sector of the Egyptian bourgeoisie” and “the state technocratic sector” represented by Sidqi (p. 201, n. 3). Workers are mentioned only in the conclusion, as one of several “constraints on the growth of the Misr Group,” and political activities on the part of peasants and rural laborers lie beyond the book’s purview.

Challenging Colonialism asks all the right questions, and this is a considerable achievement, but its basic analytical perspective does not allow Davis to address them adequately. Bank Misr failed to generate sustained industrial growth in Egypt itself or in the wider Middle East; when Britain needed to tighten its hold on the eastern Mediterranean in the late 1930s, Bank Misr was crushed. If these events are to show the deficiencies of dependency theory, they will indeed have to be incorporated into an argument such as the one Davis proposes. But the argument will have to be more carefully constructed to be convincing.


* See my review of The Modern World-System in The Western Political Quarterly 31 (June 1978).

How to cite this article:

Fred H. Lawson "Davis, Challenging Colonialism," Middle East Report 129 (January 1985).

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