A Theory of Imperialism

Utsa Patnaik, Prabhat Patnaik

• Publisher: Columbia University Press
• Year: 2016
• ISBN:
  9780231542265
• Topic: Politics & International Relations
• Subtopic: Colonialism & Post-Colonialism
• Index: Politics & International Relations

In A Theory of Imperialism, economists Utsa Patnaik and Prabhat Patnaik present a new theory of the origins and mechanics of capitalism that sounds an alarm about its ongoing viability. Their theory centers on trade between the core economies of the global North and the tropical and subtropical countries of the global South and considers how the Northern demand for commodities (such as agricultural products and oil) from the South has perpetuated and solidified an imperialist relationship. The Patnaiks explore the dynamics of this process and discuss innovations that could allow the economies of the South to achieve greater prosperity without damaging the economies of the North. The result is an original theory of imperialism that brings to light the crippling limitations of neoliberal capitalism.

A Theory of Imperialism also includes a response by David Harvey, who interprets the agrarian system differently and sees other factors affecting trade between the North and the South. Their debate is one of the most provocative exchanges yet over the future of the global economy as resources grow thin, populations explode, and universal prosperity becomes ever more elusive.

 

CHAPTER ONE

Introduction

The term “imperialism,” though still widely used in third world countries, has become rather rare even in radical discourse in advanced capitalist countries. Terms like “empire” have increasingly replaced it;1 and even when “imperialism” is occasionally used, it is usually taken to merely describe the tendency on the part of the leading capitalist power, the United States, either singly or with the support of other capitalist powers, to exercise political-military hegemony over countries of the third world, without reference to any economic compulsion for doing so. In fact, many well-known Marxist writers today explicitly reject the term “imperialism” insofar as it is taken to mean any systemic tendency for metropolitan capital to dominate the outlying regions in particular.

I

Reluctance to Use the Term “Imperialism”

This reluctance to use the term “imperialism” is not surprising. Central to the concept as it was used earlier was a division of the world into two segments, with both workers and capitalists in one of them being better placed than their counterparts in the other. It made sense in that situation to talk of a systemic tendency that could be seen as underlying imperialism. But in today’s context, two basic changes have been brought about by globalization. On the one hand, the domestic big bourgeoisie in several third world countries like India not only is closely integrated with international finance capital but has actually prospered and flourished as well: the list of the top billionaires in the world today not only contains, as it used to in the old days, the names of persons belonging to the advanced capitalist countries, but a fair number of Chinese and Indian names as well.

On the other hand, capital is free to move across countries and locate plants in the third world for producing goods not just for the local market but for exports to the entire world market. Since this freedom does not exist merely on paper but is actually exercised by metropolitan capital that is locating plants in China and elsewhere for servicing the world market, the implication is that workers in the metropolitan countries are now competing against low-wage workers of the third world. They are no longer insulated from the low wages prevailing in the third world.

The segmentation of the world economy such that workers in one part of it could raise their wages more or less in tandem with the increase in their labour productivity, while workers in the other part were stuck at a subsistence level (admittedly not a biological subsistence) because of massive labour reserves, breaks down in the era of globalization. Workers in the advanced capitalist countries are now exposed to the baneful effects of the third world’s labour reserves on their real wages, as Joseph Stiglitz’s finding that the real wage rates of American workers have not increased at all over the last several decades proves.2 What this means is that the growing divergence in real wage rates over time between the two segments of the world economy has been halted, if not even slightly reversed.3

Thus, while the third world big bourgeoisie is coming up rapidly and making common cause with the capitalists of advanced countries, to a point where even the distinction between the two bourgeoisies is getting obliterated, there is also a certain parallel tendency, if not towards an actual obliteration of the wage differences between the workers in the advanced and third world countries, then at least towards a freezing of these differences. The advanced country workers have wages whose ratio to third world wages does not increase no matter how high the rate of growth of their labour productivity.

It follows then that in lieu of the original dichotomy between an advanced capitalist world and a backward capitalist world, which typically underlay the concept of imperialism, we might be seeing the division between the capitalists on the one hand and the workers on the other as an emerging phenomenon, both within countries and also globally. The spatial dichotomy between two parts of the world, or the segmentation of the world economy into two unequal parts, one of which maintains control over the other, as the term “imperialism” implied, appears to be passé.

There is a further point, quite apart from the break-up of the former segmentation of the world economy as a consequence of globalization, which lends support to this view: it has to do with the emergence of international finance capital as the new lead actor on the global scene. When Lenin (1977) was writing about imperialism, his perception was of a set of rival imperialist powers, each characterized by a financial oligarchy that presided over a coalition of banks and industrial capital, was closely integrated with that country’s state personnel, and was engaged in partitioning and repartitioning the world in the quest for “economic territory.”

The three main features of the scenario sketched by Lenin were: first, the national character of finance capital; second, a close link within each nation among industry, banks, and the state, which entailed that the quest for “economic territory” (as the strategy of this national finance capital that was put into effect by the State and ideologically sustained by a glorification of the “national idea” [as Hilferding noted4], also promoted industrial interests and could be presented as a “national strategy”; and, third, the pervasiveness of rivalry among these national finance capitals, of an “inter-imperialist rivalry” for repartitioning a world whose partitioning had already been completed.

These features have been largely superseded by the emergence, through further centralization of capital, of international finance capital that is globalized, is not tied to any particular nation-state (though it is defended in its global operations by the leading capitalist state with support from the others), is much more financial in nature, and is engaged in massive speculation for capital gains, rather than being concerned with the promotion of industry. (The term “financialization” that is often used in lieu of and as distinct from “industrialization” captures this last point.) It is in the interests of international finance capital, which moves all over the world in quest of speculative gains, that the world should not be partitioned, that no barriers should exist in the way of the free movement of capital, including in the form of finance, and of commodities. International finance capital therefore specifically wants a muting of inter-imperialist rivalry, a removal of all barriers in the form of boundaries between “economic territories” of rival finance capitals, which had been a feature of the scenario sketched by Lenin. This, as we know, does not mean an end of wars, or the ushering in of an era of peace, but only the end of wars caused by inter-imperialist rivalry.

Two implications of this process of globalization of capital are important in this context. First, while capital is globalized, the states still remain nation-states, which suggests that state policy must, willy-nilly, cater to the caprices of globalized finance. The political and military might of the most powerful capitalist state is proximately used for defending the interests and operations of globalized finance capital, but all states fall in line in concurring with the defence of these interests (with the exception of some “recalcitrant” state, which may be trying to opt out of the globalization arrangement and hence ipso facto curbing the free movement of globalized finance, and against which the might of the most powerful state would typically be directed). Second, globalized finance capital does not belong exclusively to any one country; rather, it draws the capital of all countries into the process of globalization. The corporate-financial oligarchies in all countries get integrated into the process of globalization.

In this scenario there is a certain apparent uniformity in the experience of all economies. There is no one economy, no one power aggrandizing itself at the expense of some other countries. Instead, freely mobile globalized finance capital apparently metes out even-handed treatment to all countries. To be sure, not all become equal gainers or losers because of such treatment, but these disparities are determined by a host of factors having nothing to do with the domination of one country by another. And if one argues, with some justification, that being caught in the vortex of free cross-border flows of capital and commodities is per se inimical to the interests of the people of the third world, then two kinds of objections would be raised against that argument: first, that the experience of China, India, and several East and Southeast Asian countries proves that there is nothing in the nature of the international economy, as opposed to factors internal to third world countries which they should try to overcome on their own, that hurts the people through such free flows; and second, that there is no coercion being exercised against the wishes of third world governments to make them embrace globalization, so that the blame for the deleterious consequences, if any, of such globalization on the people’s living standards should not be laid at the door of something called “imperialism.”

Taking all this into account then—quite apart from the fact that the divergences between the advanced and backward countries’ bourgeoisies and between the advanced and backward countries’ workers no longer operate the way they used to—a spatial perspective on the world economy, such as what imperialism suggests, is far removed from what we have today: namely, a foregrounding of globalized finance capital. It is not “North versus South” or “advanced versus backward countries” or as Lenin (1977, 637) had put it, the “financial strangulation” of the overwhelming majority of the world’s people by a handful of advanced countries; it is globalized finance capital, of which the finance capitals of individual countries are component parts and which does not belong to any particular country, operating all over the globe. Even if it immiserates the people, it does so, and can do so, everywhere; it cannot be called “imperialism.” Capitalism has the effect of exploiting, oppressing, and immiserating the people; and contemporary capitalism, which is no exception to this, does this in its own way. But calling it “imperialism” is misleading. Doing so gives an impression that what had prevailed earlier continues to prevail today. It analytically obliterates the sui generis character of contemporary capitalism and should therefore be shunned.

II

The Object of the Present Book

The purpose of the present book is to argue a position contrary to the one outlined above: namely, that there is an abiding relevance to the concept of “imperialism.” It seeks to establish that there is a continuity between the colonial period and now, notwithstanding the fact that countries of the third world now are no longer ruled by foreign powers. This continuity arises from a certain structural relationship that characterizes capitalism but that, surprisingly, has received very little attention until now. Put differently, in addition to the capital-wage labour relationship, capitalism is characterized by an additional structural relationship, and “imperialism” refers to that structural relationship. That relationship necessarily has a spatial dimension and was as much a feature of the colonial period as it is of contemporary capitalism: its essence lies in the fact that capitalism, within which of course metropolitan capitalism has the predominant position, must, in its “spontaneous” operation, act in ways that tend to immiserate the traditional petty producers of the third world, who constitute the overwhelming bulk of the working population of these countries.

The fact that big capital of the third world itself is complicit in this process of undermining and squeezing the traditional petty producers, viz., the peasants, craftsmen, fishermen, artisans, and so on—is not germane to the argument, just as the fact that metropolitan capitalism also squeezes its own residual petty producers, not to mention the workers directly employed by it, is not germane to the argument. What is important is the fact of this compression of income and livelihoods exercised by metropolitan capitalism upon the traditional petty producers of the third world, especially of the tropics. This occurs for a very specific reason and must be distinguished from the general tendency of capitalism to destroy the basis of petty production everywhere.

Not to recognize the sui generis nature of this compression, and hence of the structural relationship of which it is an expression, is to miss out on a very crucial aspect of capitalism, which alas has largely been the case until now. We use the term “imperialism” to cover this structural relationship, and not to recognize imperialism in this sense amounts to missing out on an understanding both of colonialism and of contemporary capitalism. The need for metropolitan capitalism to impose income deflation upon the petty producers of the tropics will be discussed at a theoretical level in the next several chapters, after which we shall present empirical data to substantiate our argument.

CHAPTER TWO

The Threat of Increasing Supply Price

I

The Reason for Increasing Supply Price

Capitalism at the core cannot do without access to a number of primary commodities that have the following two characteristics. The first is that they are produced in distant outlying regions and typically by petty producers who, though linked to capitalism and therefore no longer retaining their original character, are nonetheless outside of the capital-wage labour relationship. Some of these commodities, even when produced within the metropolitan core, are nonetheless also imported to the metropolitan core from the outlying regions, so that an increase in the demand for them at the margin requires larger supplies from these outlying regions. But other such commodities simply do not get produced at all within the core and are not even producible within it because of their specific climatic and other natural requirements.

The second characteristic is that these commodities are subject to the phenomenon of increasing supply price, which means that if an increase in the demand for them were to be satisfied by greater production, then even at the existing level of money wage rate per efficiency unit of labour at the point of production, or money income of the producers per unit of their labour (measured in efficiency units), their unit prime cost of production would increase.

The notion of the “efficiency unit of labour” may be explained as follows. If a given output, whatever it is, is maintained over time, then it is quite possible that either through “learning by doing” or through the use of new technology, labour productivity would increase in the production of this output, which is the same as saying that one labourer would become over time the equivalent of more than one. A doubling of labour productivity for instance means that as a consequence of such doubling, one labourer becomes the equivalent of two—i.e., one “natural unit” of labour becomes two “efficiency units” of labour. To say “at given money wage rate per efficiency unit of labour” amounts therefore to saying: “if the money wage rate per labourer (as a person) increases in tandem with the rise in his or her labour productivity.” Obviously, if money wages...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Contents
• Foreword by Akeel Bilgrami
• Preface
• 1. Introduction
• 2. The Threat of Increasing Supply Price
• 3. Coping with the Threat
• 4. The Reserve Army of Labour in the Periphery
• 5. Capitalism, Poverty, and Inequality
• 6. Further Elaborations and Clarifications
• 7. Metropolitan Demand on Tropical Landmass: The Empirical Picture
• 8. The International Monetary System: Some Issues in Political Economy
• 9. Some Concluding Remarks
• A Commentary on A Theory of Imperialism by David Harvey
• A Response to David Harvey’s Comments
• Notes
• References
• Index