Marxism and imperialism
http://archive.workersliberty.org/publications/readings/2001/empire.htmlBy Martin Thomas
We are not a government party; we are the party of irreconcilable opposition.... Our tasks... we realize not through the medium of bourgeois governments... but exclusively through the education of the masses through agitation, through explaining to the workers what they should defend and what they should overthrow. Such a 'defence' cannot give immediate miraculous results. But we do not even pretend to be miracle workers. As things stand, we are a revolutionary minority. Our work must be directed so that the workers on whom we have influence should correctly appraise events, not permit themselves to be caught unawares, and prepare the general sentiment of their own class for the revolutionary solution of the tasks confronting us.
Leon Trotsky
By the end of the '60s, what had once been 'the pride' of Marxism - the theory of imperialism - had become a 'Tower of Babel', in which not even Marxists knew any longer how to find their way.
Giovanni Arrighi[1]
There is not, nor can there be, such a thing as a 'negative' Social-Democratic slogan that serves only to 'sharpen proletarian consciousness against imperialism' without at the same time offering a positive answer to the question of how Social-Democracy will solve the problem when it assumes power. A 'negative' slogan unconnected with a definite positive solution will not sharpen, but dull, consciousness, for such a slogan is a hollow phrase, meaningless declamation.
V I Lenin[2]
Was Serbia the imperialist in Bosnia's war? Or the UN and NATO forces? Or Croatia? Or German finance and industry? In Northern Ireland, according to a long history, Britain is the imperialist, and the Catholic community anti-imperialist. But now the political representatives of that Catholic community, the SDLP and the Provisionals, are looking to an alliance of the biggest imperialist power, the USA, with the European Union and Dublin, to push Britain into pushing the Protestants into a united Ireland. Who is anti-imperialist now?
The division between imperialism and anti-imperialism was never clear-cut even in the heyday of the British, French, Dutch, Russian, Turkish and other empires. Turkey was both imperialist and a semi-colony; Tsarist Russia, though not as trammelled as Turkey, was economically subordinate to European finance capital.
Plainly, however, the question is more complicated now, so complicated that 'anti-imperialism' can be used to justify a vast range of policies - pro-Serbian or pro-Bosniac in Bosnia, for example.
The short answer to the bewildering complexity is that Marxist policy should always be based not merely on anti-imperialism or anti-capitalism, but on our positive programme: working class self-liberation, working class struggle, working class unity, consistent democracy, the right of nations to self-determination, local autonomy for minorities, equal rights for all. That positive programme, before any complicated calculation of who or what is imperialist and to what degree, is the compass that keeps us from getting lost.
To say that, however, already assumes some conclusions about imperialism: that the division between imperialist and anti-imperialist is not absolute, and that it does not override class divisions. [3] To assess and orient ourselves in the world requires some understanding of imperialism. And behind the political questions lie analytical ones.
If the colony-grabbing drive of the late 19th and early 20th century was a product of imperialism, then what have the colonial liberation movements winning independence after 1945 done? Have they been illusory? Is independence a mere empty formality behind which the imperial powers still grip their vitals? Or, on the contrary, have they destroyed imperialism? Did they emerge only because imperialism was already collapsing? Did they reflect, or shape, a modified form of imperialism?
If European capitalism needed colonies in the first half of this century, why has it not collapsed without them in the second half? If early 20th century imperialism marked 'the highest stage of capitalism', the 'epoch of capitalist decay' - as revolutionary Marxists wrote at the time - what is the late 20th century?
To answer these questions we must first clear away much confusion. Though Lenin's famous pamphlet on imperialism is one of the finest polemics in the whole of Marxist politics, the 'Leninist orthodoxy' which made it, or rather a garbled version of it, into the master-textbook of twentieth-century world politics and economics has confused rather than clarified. The concepts of 'export of capital', 'finance capital', or 'monopoly capital' as the essence of the matter are - so I shall argue - neither special theoretical innovations of Lenin, nor adequate keys for an understanding of imperialism in a broader view of history.
Imperialism and high finance: Kautsky builds on Engels to answer Bernstein
Maybe the first big classical-Marxist statement on imperialism was by Karl Kautsky, in 1899, replying to Eduard Bernstein's call for a 'Revision' of the perspective of Marx and Engels.
In the 1890s Engels had identified monopolies, cartels, credit and high finance as expressions that classic individual capitalism was decaying and becoming 'socialistic', but in an upside-down way which sharpened plunder, swindling, and crises. Colonialism was a profit-making venture of the new financial aristocracy. [4]
Bernstein argued, on the contrary, that the new trends made capitalism more open to peaceful and piecemeal progress. Credit gave the system more flexibility. Industrial cartels (associations of companies bound together by agreements on production levels, prices and sales) gave the capitalists more conscious control. They could avoid overproduction by mutual agreement. The growth of the world market, and improvements in communications and transport, also made the system more flexible. Capitalism could probably postpone 'general commercial crises' for a long time.
Bernstein criticised the way the German government pursued its imperialist policy, but argued that the trend was towards peace and harmony between nations. 'The workman who has equal rights as a voter... who... is a fellow owner of the common property of the nation, whose children the community educates, whose health it protects, whom it secures against injury, has a fatherland...', and so should oppose Germany being 'repressed in the council of the nations'. Moreover: 'Onlya conditional right of savages to the land occupied by them can be recognised. The higher civilisation ultimately can claim a higher right.'[5]
Bernstein's scenario of peace and free trade was an illusion, replied Kautsky. 'Protective tariffs are easier introduced than abolished, especially in a period of such raging competition on the world market... Free trade! For the capitalists that is an ideal of the past.' Bernstein claimed that speculation was a disease of capitalism's infancy. But infant capitalism was being promoted across the world by the 'overflowing capitals of the older countries... Argentinian and Transvaal speculation holds its 'wildest orgies' not only in Buenos Aires and Johannesburg, but equally in the venerable City of London.'
And colonialism, Kautsky insisted, was inseparable from militarism and the despoiling of colonial peoples for the benefit of 'the modern kings of finance [who] dominate nations directly through cartels and trusts and subject all production to their power'. [6]
'The financier,' Kautsky went on to argue, 'finds militarism and a strong active governmental policy, both external and internal, very agreeable. The kings of finance need not fear a strong governmental power, independent of people and Parliament, because they can rule such a power directly either as bondholders [i.e., as people who lend money to the government], or else through personal and social influences. In militarism, war and public debts they have a direct interest, not only as creditors, but also as government contractors...
'It is wholly different with industrial capital. Militarism, war and public debts signify high taxes... War signifies besides this... a break in trade... A strong governmental power arouses anxiety in [the industrial manager] because he cannot directly control it... he inclines rather to liberalism... [But] The opposition between finance and industry continually decreases... finance ever more and more dominates industry.'[7]
Much of Kautsky's argument was a Marxist conversion of ideas which were to be summed up with great verve by the English radical liberal, J A Hobson, in a book motivated by the Boer War (Imperialism, 1902).
'The Imperialism of the last three decades,' wrote Hobson, 'is clearly condemned as a business policy, in that at enormous expense it has procured a small, bad, unsafe increase of markets, and has jeopardised the entire wealth of the nation in rousing the strong resentment of other nations.' But imperialism continued because, 'the business interests of the nation as a whole are subordinated to those of certain sectional interests.'
Arms contractors, some exporters, the shipping trade, the military, and those who wanted jobs for their sons in the Indian Civil Service, all had an interest in imperialism. But 'the governor of the imperial engine' was 'the great financial houses', which were investing abroad at such a rate.
'The economic taproot of Imperialism' was overproduction and glut of capital. 'Messrs Rockefeller, Pierpoint Morgan [etc.] need Imperialism because they desire to use the public resources of their country to find profitable employment for the capital which would otherwise be superfluous.'
Imperialism was also parasitic. 'To a larger extent every year Great Britain is becoming a nation living upon tribute from abroad, and the classes who enjoy this tribute have an ever-increasing incentive to employ the public policy, the public purse and the public force to extend the field of their private investments, and to safeguard and improve their existing investments. This is, perhaps, the most important fact in modern politics.'[8]
The overproduction and glut were due to inequality of income. The workers could not consume much because of low wages; the capitalists could not possibly use all of their huge incomes on luxuries, and thus had vast amounts left seeking investment. Balance should be restored through social reform, higher wages, more spending on public services. This would lead to more balanced national economies and less searching for markets abroad.
Kautsky saw a similar permanent glut. 'If the capitalist mode of production raises the mass production of goods to the utmost, it also limits to a minimum the mass consumption of the workers who produce these goods, and therefore produces an ever greater surplus of goods for personal consumption...'[9] He differed from Hobson in arguing that this glut would be resolved by the collapse of capitalism and the socialist revolution, rather than by 'social reform', and in contending that finance-capital dominated, rather than being only a 'sectional interest' counterposed to 'the business interests of the nation as a whole'.
Another difference was that Hobson used the word 'imperialism', where the German Marxists at this stage would use a term like 'world policy'. 'Imperialism' was not special Marxist jargon: on the contrary. The Marxists took over the term from the common usage of British bourgeois politics - where some, like Rosebery, called themselves 'Liberal Imperialists', others, like Hobson, anti-imperialists. They used it in the same sense as common usage - the new aggressive colonial and world-economic policy of the big powers - and sought to uncover its economic roots in the rise of high finance.
Many of the core ideas of the whole literature were already expressed by 1902: militarism, colony-grabbing, conflict and an authoritarian state as the political trends; high finance, economic decadence and glut, and export of capital, as the economic underpinnings.
But what exactly was finance capital? This question was never properly resolved. And the recurrent idea of metropolitan capitalism having become 'glutted' would also cause confusion.
Effective demand depends not only on consumption but also on investment; and, in fact, fluctuations in demand for investment goods are generally the prime movers in crises. Demand for those investment goods can soar while final consumption stagnates - and, vice versa, the run-up to a crisis is generally a period of unusually high working-class consumption but sagging investment.
'Overproduction' is not a permanent condition; capitalism constantly sheds overproduction through crises and then builds it up again. The relation between supply and demand for money-capital is determined by the tempo of self-expansion of capital. It is a relation between profits accumulated from past capitalist exploitation, and profits available from present capitalist exploitation. The spasmodic nature of capitalist development means that this supply-and-demand relation is constantly falling out of balance and generating 'surpluses' of money-capital. But those surpluses are a function of the cycle of boom and slump, not of any absolute level at which an economy becomes 'full up' of capital.
The notion of an absolute level after which a capitalist economy will become permanently 'glutted' and awash with surplus capital is a recurrent theme in mainstream economics, from Adam Smith to Keynes. It has been attractive to socialists because it seems to show that capitalism must inevitably break down. It is misleading.
The crisis of 1907. Imperialism from the point of view of the colonies.
Events in 1907 sharpened the socialist debate on imperialism. The whole philosophy of German Social-Democracy had become increasingly based on a steady growth of Party membership, trade union membership, and votes. As capitalism developed, so the socialist movement would grow, until finally the accumulated strength of that movement would overcome capitalism, weakened by its (also growing) internal contradictions.
Then in the election of January 1907 the ruling Conservative/National Liberal bloc made imperialism the central issue. They denounced the Social Democrats, who had been criticising the German state's brutality in its South West African colony, as unpatriotic - and reduced them from 81 parliamentary seats to 43.
For a party so convinced that the laws of social development guaranteed it steady growth, this result was a catastrophe. What had gone wrong? Too much radical agitation, said the right wing. It was no use fighting against necessary historical development, and imperialism was a necessary historical development. The Social-Democrats should vow allegiance to 'the defence of our fatherland'. [10]
The left protested. Imperialism had attracted the middle classes, and undercut liberalism; but it would lead capitalism into convulsions, and eventually alienate the middle classes. The socialists must prepare for revolutionary upheavals by militant anti-imperialism and by distancing themselves from liberal illusions.
In August 1907 the Socialist International met in Stuttgart. The Revisionists tried to shift the movement into a more accommodating attitude towards militarism and colonialism. The full congress voted down the Revisionist draft, and condemned colonialism on principle, but only by 127 votes to 108.
In the three weeks between the Stuttgart international congress and the German party's congress at Essen, Kautsky wrote a pamphlet on Socialism and Colonial Policy to defend the views of the left. This was the most comprehensive statement of classical Marxism on imperialism as it affected the colonies, and provides more of lasting interest than the other pamphlet ('The Road to Power', 1909) in which Kautsky restated his views on imperialism as a stage of capitalist decay and convulsions.
Kautsky distinguishes between three sorts of colonies. In settler colonies, or, as Kautsky calls them, 'work colonies', like the US, Canada, Argentina, Australia, etc., where European settlers became a new working class rather than exploiting the local workforce, colonialism undoubtedly has brought capitalist progress. There, socialist policy should be for an accommodation, to safeguard the rights and interests of the local peoples. Colonisation has in fact 'led everywhere to the repression, and often to the complete destruction of the natives, but that was not an unavoidable result' given the vast size and resources of the countries concerned.
But the Revisionists proclaim a policy of reforming colonialism, in practice, for quite different colonies - for colonies where the metropolis exploits local labour, with the aid of only a small band of privileged colonial settlers.
From 'old-style exploitation colonies' - notably Latin America under Spanish and Portuguese rule, and India in the earlier stages of colonial rule there - the colonial powers drew profit through crude plunder. To 'new-style exploitation colonies', capital is exported. That brings some economic development. But the countries are kept under colonial rule, to safeguard investments and also to supply the force necessary to open the way for capitalist development: colonialism, despite all the Revisionists' argument, is inseparable from brutal force. With the export of capital, therefore, comes heavy taxation to pay for the military establishment and to pay the interest on the loans raised for building railways and so on. The taxes pauperise the peasantry and disrupt agriculture - and so, in India for example, there is 'continual increase in famine and misery, in spite of heavy flow of English capital to India with a consequent improvement of the Indian 'productive forces in places'.
The export of capital produces malign results even in formally independent states, for example Turkey. 'Oriental despotism becomes horrifyingly oppressive wherever it masters the instruments of power of European civilisation, but at the same time becomes the debtor of Europe... [The resulting regime] brings to a peak the oppressive and degrading effects of capitalism, without developing any of its progressive qualities, and in the same way it develops only the oppressive characteristics of oriental despotism while destroying those aspects of it which soften its rule. It pairs despotism and capitalism in an abominable union.'[11]
Kautsky emphasises what would later be called 'the development of underdevelopment' in the colonies more than other classical Marxist writers. He does not deny that colonial rule can promote capitalist development, or suggest that shutting underdeveloped countries off from the outside world is better than exposing them to capitalist economic influence: but he insists that the limited and painful promotion of capitalist development by imperialism is no sufficient reason for socialists to support political oppression.
'We can and must place no obstacle in the way of competition where the capitalist mode of production comes into free competition with backward modes of production. But the situation changes if we are asked to help the state power to fight for the interest of the capitalist class against the backward nations, and to subdue these for them with armed might, as happens in colonial policy. We must resist this with determination.'
Kautsky's bottom line is that, 'If the ethic of capitalism says that it is in the interests of culture and society for lower classes and nations to be ruled, the ethic of the proletariat says that precisely in the interests of culture and society the oppressed and those under tutelage must throw off all dominion.' This remains the bottom line for revolutionary Marxists to this day.
Luxemburg and Hilferding
This analysis of capitalist development in the colonies was taken further by Rosa Luxemburg in her 1913 book, The Accumulation of Capital. She too described how the development of capitalist relations in the underdeveloped countries, and the clawing-in of their pre-capitalist economies to the capitalist world market, led the big powers to use force, seizing colonies or using the local state as, 'a political machinery for exploiting peasant economy for capitalist purposes - the real function, this, of all Oriental states in the period of capitalist imperialism.' It created, 'the most peculiar combinations between the modern wage system and primitive authority in the colonial countries.'[12]
Capitalism in the colonies and semi-colonies, however, occupied only the last quarter of Luxemburg's book. She gave pride of place to a new statement of the thesis that a permanent 'glut' within the advanced capitalist economies was the motor force of imperialism.
Where, Luxemburg asked, did the money come from to enable the capitalists to sell the goods in which surplus value was embodied? Or, rather, where did the 'effective demand' come from?
The answer, in fact, is that credit supplies the money and the effective demand is generated - erratically, with ups and downs of crisis - by the capitalists' drive to accumulate. But Luxemburg insisted that within a pure capitalist economy there was no answer. To survive, capitalism needed non-capitalist consumers. But, as capitalism expanded across the world, the number of non-capitalist consumers decreased. Capitalism would run into bigger and bigger problems, and eventually collapse.
As the Russian Marxist Nikolai Bukharin soon pointed out, this argument is untenable. Non-capitalist consumers do not help the problem. Where do they get the money from? Non-capitalist consumers do not supply liquidity for capitalism; capitalism supplies liquidity for them.
Another extended analysis of the mechanics of imperialism was Rudolf Hilferding's Finance Capital, published in 1910 but mostly written in 1905.
The book starts with a long and intricate discussion on the theory of money, credit, interest and the stock exchange, aiming to show that, 'there is a growing tendency... to concentrate all capital in the form of money capital, and to make it available to producers only through the banks... Even today, taking possession of six large Berlin banks would mean taking possession of the most important spheres of large-scale industry.'
Hilferding defines finance capital as, 'capital in money form which is... transformed... into industrial capital.' He adds a qualification: 'This does not mean that the magnates of industry also become dependent on banking magnates'; rather, bank capitalists and industrial capitalists, 'unite in close association.'
Cartels are generated because otherwise the rates of profit would be lower for giant enterprises. With modern credit it is easy to get into large-scale production; given the huge amounts of fixed capital involved it is difficult to get out. So the giant enterprises form cartels to keep their profits up. The banks help them.
Kautsky and Luxemburg, in polemic against Bernstein, had stressed the instability and fragility of cartels, but Hilferding shifts the emphasis: 'There is a constant tendency for cartelisation to be extended.' Cartels generate high profits, but they also restrict investment, both inside the cartel (because it restricts production) and outside (because profits are low). Cartelisation therefore gives an extra push to the export of capital.
Cartels cannot prevent crises; but they (and banks) can withstand them better than non-cartelised industries, and so crises accelerate the concentration of capital. The 'monopolistic combines' turn against laissez-faire. They make governments introduce tariffs, not to protect infant industries, but to secure the home market for the cartels. Those tariffs, in turn, further boost cartelisation, and give another push to the export of capital.
Since they export capital, the big powers need to clear the way for capitalism in underdeveloped countries. They force peasants to become wage-workers. 'These violent methods are the essence of colonial policy, without which it would lose its capitalist rationale.' But 'capitalism itself gradually provides the subjected people with the ways and means for their own liberation' through national independence movements. The competitive drive for economic territory will lead to war between the big capitalist states. 'The response of the proletariat to the economic policy of finance capital - imperialism - cannot be free trade, but only socialism.'
The book was a formidable work, but not the definitive summing-up which Hilferding intended. Rather than developing a whole new theory, it pulled together ideas from writings such as Kautsky's into a tidier structure - and often through very dubious logical deductions. For example: Hilferding argues that banks must come to dominate because the rate of interest remains stable (so he observes empirically) while the rate of profit declines (so he believes from Marx's theory). [13] No-one seems to have taken this argument further, not even Hilferding in the later parts of the book. The argument about the hegemony of 'six large banks', propped up by such dubious logic, is grossly exaggerated.
The analysis moves too directly from abstract economic reasoning to current German realities and back again, so that we get a picture of finance capital in general, and of Germany in 1905-09, but not much of the general development of imperialism in a variety of countries in the whole first part of the 20th century.
World War One: Lenin and Bukharin against Kautsky
About 1912 Kautsky shifted to views on militarism and inter-capitalist conflict (though not on colonialism) very similar to those of Bernstein which he had criticised 13 years earlier. In 1914 world war erupted. Kautsky said that socialists should press the capitalist governments to make peace - for that was a better policy in the long run even from a capitalist point of view - and in the meantime each group of socialists should defend their 'own' country. The next phase in the classical Marxist argument was a polemic against Kautsky from the revolutionary anti-war left, by the Russian Marxists Bukharin and Lenin.
Bukharin's book Imperialism and World Economy was written in 1915, and read by Lenin, who wrote a preface for it in December 1915. The manuscript was lost, and recovered for publication only late in 1917. Bukharin rewrote missing sections and added material from Lenin's pamphlet. Imperialism, written in January-June 1916, and published in April 1917. Each work was therefore influenced by the other.
Lenin drew on the same concepts as Kautsky in his radical days, but crafted a sharper and tighter argument, and with militant conclusions. He built on the identification of monopolised, cartelised, organised, gigantified capital as the core of imperialism first made, I think, by Hilferding, but honed the argument done to something much crisper and more politically pointed than Hilferding's rather sprawling volume. Like Hilferding, Lenin used the term 'finance capital' a lot, but finance was far less central for Lenin than it had been Kautsky at the start of the whole c
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