Imperialism and Capitalism in the Twenty-First Century

A System in Crisis

James Petras, Henry Veltmeyer, Humberto Márquez

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317118411
• Edition: 1
• Topic: History
• Subtopic: World History
• Index: History

We live in a time of dynamic, but generally regressive regime change-a period in which major political transformations and a rollback of a half-century of legislation are accelerated under conditions of a prolonged and deepening economic crisis and a worldwide offensive against the citizenry and the working class. Written by two of the world's leading left-wing thinkers, Imperialism and Capitalism in the Twenty-First Century takes the form of a number of analytical probes into some of the dynamics of capitalist development and imperialism in contemporary conditions of a system in crisis. It is too early to be definitive about the form that capitalism and imperialism -and socialism-might be or is taking, as we are in but the early stages of a new developmental dynamic, the conditions of which are too complex to anticipate or grasp in thought; they require a closer look and much further study from a critical development and Marxist perspective. The purpose of this book is to advance this process and give some form to this perspective.

Chapter 1
Dynamics and Contradictions of Capitalist Development

Marx’s theory of capitalism is that its development as a system is profoundly uneven and rift with class conflict. The source of this conflict, confirmed by generations of both Marxist and non-Marxist scholars, is an economic structure based on the capital-labor relation; that is, the exploitation of workers by capitalists. The developmental dynamics based on this relation are both structural and strategic. The structural dynamics of the system are manifest in conditions that are “independent of an individual’s will” and thus not of their choosing and objective in their effects—an objectivity that accords with each individual’s class position. The strategic or political dynamics of the capital–labor relation, which constitutes the foundation of the social structure, are reflected in the formation of class-consciousness, which is basically a matter of workers becoming aware of their exploitation and acting on this awareness.

The Fundamental Contradictions of Capitalist Development

Capitalism, like all class-based and divided economic systems and societies is fundamentally unstable, giving rise to conditions and forces that will sooner or later lead to its overthrow or transformation. Thus, the capitalist development process is driven by forces and impelled by contradictions that are intrinsic to the system. They include:

1. Economic production is based on social cooperation—the contributions of all classes and members of society, but under capitalist relations of production (private property in the means of production) capitalists as the private owners of the means of production have the legal right and the political capacity (via state power) to appropriate the social product for private profit and personal enrichment.

2. The forces of production tend to expand but the corresponding social relations will invariably at some point turn into fetters, inhibiting further expansion and creating thereby the objective and subjective conditions of revolutionary transformation, including class-consciousness and forces of resistance to further or continued capitalist development.

3. Capitalism is motivated by the need to accumulate capital and the search for profit (to extract surplus value from the direct producer) rather than the satisfaction of human needs. However, it suffers from a systemic tendency for the rate of profits to fall, resulting in a propensity towards crisis, requiring capitalists to take countervailing measures to restructure the system.

4. In their efforts to offset a systemic propensity towards crisis and a resulting squeeze on their profits capitalists are driven to reduce labor costs and to restructure the labor-capital relation but this is an inherently contradictory process, often with unintended consequences and failed outcomes. If restructuring, involving job cuts and closures, fails to produce the results expected by financial markets then workers are likely to face more restructuring and a further round of cutbacks and closures.

5. Extracted from the working class by means of the wage relation, surplus value can only be realized if capitalist firms can clear the social product on the market but this depends on the purchasing power of the wage and the overall capacity for consumption, and the market suffers from an inherent built-in tendency towards overproduction and underconsumption, pushing the system further into crisis.

6. Capitalist development of the forces of production is intrinsically uneven, generating conditions and forces that undermine class rule and imperial power—the drive to dominate the system.

7. The dynamic workings of capitalism tend to concentrate wealth and concentrated wealth inevitably spawns authoritarianism, undermining democracy. Thus, as the forces of inequality and uneven development expand democracy, founded on widespread private landownership, is slowly but surely converted into a capitalist plutocracy and a dictatorship of money and power.

8. The basic institutions of capitalist development are designed and serve to maintain economic, social and political order; but in their normal functioning they produce conditions of class conflict, social disorganization and criminal violence and political disorder.

9. Capitalist development is predicated on the workings of the market and the freedom and power of capitalists to advance their class interests, but capitalism can only advance with the active support and agency of the state and the machinations of state power.

10. Capitalists have a vested interest in masking the workings of the system and securing its legitimacy by manufacturing ideas (“ideologies”) that reflect their worldview and advance their class interests—for example, by presenting globalization as a process that will lead to general prosperity rather than the accumulation of capital and making them rich; but at the same time capitalists cannot help but act in ways that will undermine this legitimacy, allowing people to see through the ideology and become class conscious, and then to act on this consciousness.

11. Capitalism is fundamentally tied to the nation-state, which gives it a national form and promotes an ideology of nationalism; but the capitalist development of the forces of production inevitably leads to the international expansion of the system and its reproduction on a global scale, giving rise to new contradictions and relations of intra-capitalist rivalry and conflict. The result is a global system rift with conflict.

Various generations of Marxist theorists and analysts have traced out the developments associated with these dynamics. These dynamics have unfolded in different ways in diverse contexts, but they have assumed four fundamental forms, namely:

1. The generation of social inequalities and disparities based on uneven development and an inequitable sharing of the wealth and incomes generated in the capitalist development process. These inequalities and disparities tend to widen and deepen over time with the capitalist development of the forces of production, leading to polarization between the rich and the poor in the allocation of resources and the distribution of wealth and income. The marked increase in disparities of wealth and income and in the share of the fruits of economic growth over the last three decades of capitalist development (see the discussion below) provides an eloquent testimony to the working of these dynamics.

2. Class conflict, which arises from the contradictions of capitalist development and takes different forms with diverse dynamics, including class war. The political dynamics of class conflict have been studied and analyzed in diverse national contexts under changing conditions. It is possible to see the both World Wars as to some extent the outcome of a class war between labor and capital in the advanced capitalist countries of Europe and North America. In this context for example it is possible to interpret the class accord between capital and labor reached in the post-war period—an agreement to share the productivity gains of capitalist development—as a way of resolving this conflict. Similarly it is possible to see the role played by the state in this context as an intervention in the class war—to contain the conflict between capital and labor within acceptable limits. As for the project of putative “international development,” or foreign aid, constructed as a means of ensuring that the economically backward countries pursue national development along a capitalist path, it can be viewed as a useful weapon in the class war. The first major outbreak of this war in the post-war capitalist world order was in the early 1970s. In conditions of a systemic production crisis that threatened the accumulation process the capitalist class launched a major offensive against labor. Subsequent developments in this class war as it unfolded in different theatres on the world stage can be traced out in diverse and changing contexts over the next three decades (Faux, 2006).

3. Uneven development. The competitive struggle among different national forms of capital is reflected in competing efforts to advance the forces of production at the national level that lead to inter-capitalist competition and a battle for position and advantage in the world marketplace. The dynamics of this struggle are reflected in the gradual and growing realignment of world economic power that has unfolded in recent decades and in associated political dynamics. These dynamics will be explored in Chapters 5–8 in the context of a geopolitical project to dominate other countries in the world system and to establish hegemony over the system: US-led imperialism.

4. A propensity towards crisis. Every crisis releases forces of change but these can be mobilized in different directions, to the right as well as the left, leading to a struggle among different organized groups within the class structure to manage or control the process, or, alternatively to derail it. The resulting dynamics as they are unfolding in the contemporary context of post-neoliberal development are explored in various chapters.

Capitalist Development and the Agrarian Question

Capitalist development implies the transformation of a traditional agrarian society based on precapitalist relations of production into a system based on the capitalist mode of production—“changing production patterns” in the words of José Ocampo (2011), until recently Executive Secretary of ECLAC and a major architect of the post-Washington Consensus on the need for a more inclusive form of development.1 In broad terms this means a change in the structure of economic production: the transformation of an agriculture-based economy into one based on modern industry.2 Marxists, on the other hand, stress the centrality of social rather than productive transformation: the conversion of a society and economy of direct producers on the land into a proletariat (either working for others on the land or, more likely and in much greater numbers, in the cities and urban centres); that is, the formation of a class of individuals excluded from any proprietary claim on the means of production and thus forced into selling the only asset they have, their labor, as a commodity the price of which is determined by the “workings of the market. Behind and at the bottom of this process of class formation is the separation of the direct agricultural producers (the smallholding peasant farmers and their families) from the land and their only means of production, a process conceptualized by Marx as ‘primitive accumulation’.”

This process has led and leads to the formation of a class of capitalist entrepreneurs who have seized or have been granted a proprietary claim on the means of production, and whose economic success is linked to the formation and continued reproduction of an available proletariat (Bernstein, 2012). Both the original claims on ownership of the means of production, and the derived claims on the ownership of the profits generated therefrom, are protected from possible counterclaims of dispossession by means of internalizing an ideology that “normalizes” this state of affairs and portrays the capitalist market as an “engine of growth.”

The capitalist development process has been theorized in the mainstream of development thought as the working of the forces of progressive change, forces promoted by the “pro-growth” policies of structural adjustment and neoliberal globalization. The theory is that these policies help and serve to advance a process of productive transformation (of a backward agriculture-based system into a modern system based on advanced modern productive technologies). In the process small-landholding agricultural producers, working with an outdated technology and a traditional culture and mind-set that inhibits initiative, are compelled by forces beyond their control to abandon the land and to migrate to the cities in the search for better opportunities in the modern capitalist labor market and a more sustainable livelihood.

The forces of change released in this process of structural transformation also open up various pathways out of rural poverty, namely labor and migration—and, for a few, modernized agriculture (World Bank, 2008). The mission or project of “international cooperation” is to pave these pathways out of “rural poverty” and, in partnership with the government and civil society, to facilitate the adjustment process—to assist the rural poor in making the economic adjustment needed for them to be more productive and to escape their poverty.

The 1980s saw the advent of a new world order. The proponents of a Washington Consensus on the virtues of free market capitalism argued that the policies of structural adjustment—privatization, deregulation, liberalization and decentralization—would best serve this purpose, generating as they do optimal conditions for economic growth. However, already by 1989 it was evident that these policies were economically dysfunctional (did not generate growth) and that the resulting discontent were destabilizing. For one thing the anticipated industrialization did not materialize. What did materialize was a process of urbanization without industrialization, which meant that the urban labor market could not absorb the masses of the dispossessed and migrating rural poor. For another, the policies of structural adjustment as per the Washington Consensus led to social discontent mobilized by the emerging forces of resistance, threatening thereby the stability of the democratic governments in the region.

To solve these problems the architects of international development, particularly the economists at the World Bank who saw themselves as the leading force in the war on global poverty, engaged in a strategic rethink to come up with a new policy consensus on the need to “bring the state back in” (they had gone too far in the direction of the market), and for a more socially inclusive form of development: in short, a new paradigm and a new economic model (see the discussion below).

The Inequality Predicament of Capitalist Development

Given the long war on global poverty launched and fought in the second half of the twentieth century one would hope or think that we could at long last come to some definite conclusion in regard to the reduction of poverty and inequality within the neoliberal world order of global capitalism. Many have in fact have done so. Johan Norberg, for example, in his overtly ideological book In Defense of Global Capitalism (2003) claims that the countries of the world are getting more and more equal, and that the claim of growing inequality under global capitalism is “just wrong” (p. 274). Martin Wolf of the Financial Times states that “[g]lobalization has not increased inequality. It has reduced it, just as it has reduced the incidence of poverty” (Wolf 2004, 184). Unfortunately, to use Norberg’s expression, both claims are “just wrong”—in fact, based unequivocally on ideology rather than empirical evidence, which clearly contradicts such assertions.

Looking at the problem from a scientific rather than ideological standpoint, a number of recent studies have concluded that inequality within countries has unequivocally worsened during the heightening of neoliberal globalization, while between countries it depends on whether you take the size of national population into account. If the numbers are population-weighted, then inequality over the past few decades has marginally decreased. If they are not then, as Raphael Kaplinsky (2005: 37–38) points out, “globalization is characterized by persistent poverty and growing inequality.” And, as pointed out by World Bank economist Branco Milanovic (2009), the decrease in population-weighted numbers can be entirely explained as an artifact of the booming economy in China, which has grown at over 10 percent a year for close to two decades—an extraordinary and historically unprecedented development. But, as Milanovic notes, if China were taken out of the equation the pattern of economic development would be very different. Several studies on this point report a deepening of the development gap along north–south lines, and a worsening of the disparity in per capita incomes in precisely those areas and countries under the sway of neoliberalism.

Using the same data World Bank economist Branko Milanovic argues that global income inequality among individuals (as opposed to countries) is both worse than previously thought and on the upswing (Milanovic, 2009: 11–12). However, a survey of studies on inequality across countries suggests that because of severe deficiencies in the collection of data and its comparability it is difficult to say anything at all about whether inequality is increasing or decreasing. The only point of agreement is that global income distribution is grotesquely unequal.

Within countries, where methodological problems are drastically diminished but by no means absent, a broad cross-national survey of income inequality in 73 nations from the 1960s to the 1990s concluded that 48 of them suffered from rising inequality, while 16 remained constant and 9 (France, Norway, Bahamas, Honduras, Jamaica, South Korea, Malaysia, Philippines and Tunisia) actually showed an improvement in regard to equality.

Capitalist Development and Income Distribution

As we have noted, a fundamental dynamic of capitalist development is a propensity towards unequal development, manifest in the distribution of wealth in its diverse forms and the income derived from all sorts of economic activity. These dynamics can be traced out both between and within countries that make up the world capitalist system. Take for example the distribution of world income. When China and India are excluded from the equation, available data show a rise in worldwide income inequality as of 1980 at the beginnings of the neoliberal era. In the Atlas of Social Exclusion (Pochman et al., 2004) over the past two decades 28 countries improved their standing on an index of social inequalities. These countries, all found in the developed center of the world capitalist system, represent 14 percent of world population but account for 52 percent of world annual income (and, of course, a much larger percentage of wealth, most of which is neither earned nor measured in available statistics). And 60 countries, representing 36 percent of world population, receive only 11 percent of world income. Of the countries with the highest indices of poverty and income inequality 41 are in Africa; 10 in Asia; and six in the Americas.

A recent study commissioned by the Organization for Economic Cooperation and Development (OECD) on patterns of “shifting wealth” in the global economy shows that aggregate incomes in all developing regions with the exception of Asia have declined as a share of global income and thus relative to the club of rich countries grouped within the OECD. Between 1980 and 2000 the share of total income for sub-Saharan Africa decreased from 2.8 to 1.1 percent and then increased to 1.7 percent after a decade of “robust” growth—the first in the post-World War II period; 1.7 percent; from 9.7 to 5.0 percent in the Middle East / North Africa the share of global aggregate income fell from 2.8 to 1.7 percent; and in Latin America it declined from 18 to 12.8 percent. Changes in these ratios do not indicate that per capita income in developing regions has decreased in absolute terms but that incomes have grown faster in the richer regions and countries than in the poorer ones, thus widening the inequality gap.

The data provided by the OECD point to a trend towards a persisting if not growing global divide, and a systemic increase in social inequalities under the weight of the neoliberal economic model. Notwithstanding the ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• List of Tables
• Introduction
• 1 Dynamics and Contradictions of Capitalist Development
• 2 Latin America at the Crossroads of Change
• 3 The Land Struggle in Latin America
• 4 Latin America: Growth, Stability and Inequality
• 5 Capitalism in the Second Decade of the Twenty-First Century: From the Golden Age to the Dark Ages
• 6 Labor and Migration: A Pathway out of Poverty or Neocapitalism?
• 7 The Global Crisis of Capitalism: Whose Crisis? Who Profits and Who Bears the Cost?
• 8 Extractive Capital, Imperialism and the Post-Neoliberal State
• 9 The New Authoritarianism: Democracy in America
• 10 Anti-Imperialism of the Fools
• 11 Imperialism and Democracy: Notes on an Arranged but Fruitful Marriage
• 12 Capitalism and Democracy in Egypt: Dispatches from the Frontline of a Class War
• 13 Rethinking Imperialism in the Twenty-First Century
• Bibliography
• Index