The first part of this essay, published in these pages last month, was mainly intended to sketch in the background relevant to the general concept of imperialism in the modern world. This approach has the advantage of freeing the discussion from the kind of fallacy that arises when a historical phenomenon is lifted out of its proper context. At the same time, by going back to earlier types of imperialism one can begin to establish a perspective that enables one to understand why hegemonial patterns have survived into the modern age. We are now obliged to make a detour through economic theorizing before returning to history. This procedure is once again imposed by the nature of the subject, but also by the fact that imperialism was perceived by its critics after 1900 primarily as an economic relationship. The debate thus came to turn very largely on considerations having to do with the peculiar mechanism of capitalist market economics. This is what imperialism has come to mean to the general public since the Russian Révolution dramatized the issue, but the theoretical discussion had started some twenty years earlier. Before turning to this important and complex debate, it will be useful to eliminate a misconception current among people who have come to associate the topic with the conflict between the Third World and the industrial superpowers. Hence the notion that capitalism—or Western capitalism plus Soviet state-socialism—relates to the underdeveloped world in a manner similar to the classical colonialism of the 19th century.
In its crude form this thesis is plainly untenable. It can be dealt with by asking a simple question: what economic damage has the “loss of China” done to American capitalism since 1950, or to Soviet state-socialism since 1960? Plainly none at all. It has rather freed these two super-powers of the tiresome obligation to provide investment funds for China, thus throwing an additional burden on the Chinese people. To this one may, if one is so minded, add the grisly query: what difference would it make to Western Europe and North America if the entire population of the Indian sub-continent were wiped out by famine, pestilence, or some other catastrophe? The answer presumably is that the British would then have to go without tea. What other economic consequences such an appalling human disaster would have on Western living standards, is not easy to discover.
There exists, however, a more sophisticated form of the argument which does not make the mistake of treating India and China as urgently-needed sources of raw materials and foodstuffs or as markets for Western or Soviet exports. The argument in this form recognizes the growing irrelevance of the Third World from the standpoint of the fully industrialized countries. It builds its projections upon the dialectic of underdevelopment, neo-colonial exploitation, increasing antagonism between the rich and the poor, and consequent revolutionary movements in the impoverished lands of the Third World. This is the Maoist line of thought, although its chief exponents are currently to be found among Western sympathizers rather than among Chinese propagandists. It is a line which has to be taken seriously, if only because it has amalgamated with nationalism to become the official creed of China. The trouble is that not infrequently it gets mixed up with arguments stressing the growing dependence of Western—notably American—industry upon imported minerals. There is no inherent contradiction in these notions, but we need to be clear just what we are talking about.
In its academic form the thesis relies upon comparisons with the mercantilist era. During that bygone age, colonial exploitation of the tropics helped to finance Western industrialization, and the new industries in turn unloaded their surplus commodity exports of consumer goods upon colonial territories owned or controlled by Britain, France, and other European powers. This was the essence of what in French literature came to be known as the pacte colonial. Its gradual elimination in France after 1860, following the British example, ushered in the liberal era, when similar results were obtained without the imposition of direct political controls. What is nowadays styled “neo-colonialism” represents a different relationship: contractual bargaining between advanced and backward countries whereby the former undertake to assist the industrialization of the latter, on the understanding that loans will be reimbursed and investment capital will not be confiscated. Since loans cannot in fact be repaid with interest, and since the profits of Western corporations are for the most part tunneled back to the metropolis, the relationship remains unequal, although it may look reasonable on paper. Moreover, this form of modernization proceeds too slowly to catch up with the population explosion.
Taken in the abstract, there appears to be no reason why a major industrial country—whether capitalist or socialist—should not assume the temporary burden of helping to modernize backward (underdeveloped) areas. Likewise, a backward country may lift itself by its own bootstraps. This after all is what occurred in the case of Japan, and Japan is now a more important market for Western industrial exports than the rest of Asia combined. It is also, however, a competitor. Japan, for historical reasons, avoided the typical colonial relationship and by now has assumed the rank of a major industrial power. As such it provides outlets for Western exports whereas colonial profits are typically derived from extractive industries operating with cheap labor and producing oil or minerals to feed the industries of the advanced countries. Now why should the West—America above all—not assist other Asian or African countries to follow the Japanese road? Setting aside domestic barriers to modernization it would appear to be in the interest of all concerned to make the necessary funds available. This, after all, is the only way in which the productive forces of the Third World can be developed to the point where these countries become worthwhile partners in international exchange.
If the question is posed in this form, the more consistent ideologists of the Trotskyist or Maoist school (in practice the two are becoming difficult to distinguish, since the Maoists are theoretically incompetent and have to fall back on arguments worked out for them by Trotskyist writers) are reduced to the assertion that capitalism, by its nature, cannot promote the full industrialization of backward countries. The argument relies upon the Leninist identification of capitalism with imperialism. The latter by definition impedes the industrialization of backward countries, while relying upon cheap labor to obtain raw materials for the metropolis. A drive to industrialize the undeveloped areas, in the hope of extracting higher profits at a later date, would meet the requirements of economic rationality, but would be self-liquidating so far as imperialism was concerned. For the developed countries—capitalist or nominally socialist—would have to sacrifice some of their profits or some of their domestic consumption for the sake of the undeveloped. On socialist principles this is of course what they should be doing, but it can be argued that self-preservation alone is an adequate motive. After all, the widening gulf between the industrial centers and the Third World is potentially dangerous for all concerned. However, Maoist and Trotskyist thinking affirms that such a self-liquidation of imperialism is not going to occur because it is more profitable to maintain the present unequal relationship. At the same time, it is held that colonial resources are crucially important to the functioning of the Western economy, which would be strangled without access to these raw materials.1
The argument suffers from trying to prove too much. If the undeveloped countries are becoming irrelevant to the highly industrialized powers, they cannot at the same time be essential to them. If they are relevant as sources of oil, bauxite, tin, chrome, nickel, manganese, and other raw materials, then they are likely to accumulate capital for their own industrialization: if necessary by expropriating foreign holdings located on their territories, but more probably by squeezing extra revenue out of them. In fact this is already happening in the oil-producing countries, and for the simplest reason: it does not pay a foreign government or corporation to quarrel with a local nationalist regime, at the risk of having its installations wrecked or confiscated. Thus in general the symbiotic relationship between such regimes and the West (or the USSR) does not profit only the stronger party.
Since the whole chain of reasoning starts from an argument developed by Lenin in 1916, we need not consider the theory of imperialism suggested by Rosa Luxemburg in 1913, but there is a link between Lenin and the analysis of finance capital and protectionism associated with the Austro-Marxist school. The latter found a critic in J. A. Schumpeter, but his explanation of the whole phenonemon embodied some notions first put forward by Rudolf Hilferding and other Marxists around 1910, and earlier by Karl Kautsky. This debate, which climaxed in 1914—18, was itself a sequel to the earlier quarrel between conservative protectionists and liberal imperialists in Britain, and is thus closely related to the discussion in Section V of the first part of this essay which appeared last month. On the Marxist side it ran its course between 1910 and 1930, little being added afterward to the theoretical core of the argument then worked out by the protagonists. Liberal critics of imperialism, as noted before, had already found a notable advocate in J. A. Hobson as early as 1902. The current American debate in part reproduces the earlier British controversy, but the notion of a fundamental “north-south” division separating the industrially-advanced countries—including the USSR—from the backward regions of the globe is new and has introduced a political line-up cutting across the East-West antagonism, sometimes described as the cold war.
Lastly, as a consequence of the Maoist retreat from Marxism-Leninism to populism, there has arisen the notion that the peasantry rather than the industrial proletariat is the class destined to make an end of imperialism: the latter term now encompassing all the industrially-advanced countries, and within the latter the working class along with the rest. This notion represents a complete break not only with Marxism, but with Leninist strategy as well, a circumstance that has not prevented some of its defenders from claiming the inheritance of Marx and Lenin, on the grounds that socialists must always side with the exploited, whether they be slaves, serfs, or peasant proprietors victimized by colonial relationships. Admirable in its resolute disregard of all but moral considerations, this doctrine seems closer in spirit to Tolstoy or Gandhi than to the theorists of modern Communism.
Some familiarity with the argument set out in Lenin’s Imperialism, the Highest Stage of Capitalism (1916) may these days be taken for granted, but it is useful to remind ourselves wherein the chief innovation lay.2 Hobson had in 1902 described British imperialism as an outcrop of protectionist and militarist tendencies; in other words, he regarded it as a reactionary movement, a reversion to mercantilism. “The economic root of Imperialism,” he wrote, “is the desire of strong organized industrial and financial interests to secure and develop at the public expense and by the public force private markets for their surplus goods and their surplus capital. War, militarism, and a ‘spirited foreign policy’ are the necessary means to this end.”3 Kautsky’s explanation of imperialism in 1914—15, albeit more complex and sophisticated, as befitted a Marxist, ran along similar lines, a circumstance stressed in Lenin’s polemics against him. Hilferding, on the other hand, although politically associated with Kautsky, was acceptable to Lenin as a writer because in his 1910 work he had established a connection between imperialism and “finance capital,” with special reference to the great investment banks. Lenin approvingly cited his remark, “Finance capital does not want liberty, it wants domination,”4 and then went on to develop his own thesis that imperialism represented “the monopoly stage of capitalism.” This formulation differed somewhat from Hilferding’s conclusion, and even more from Kautsky’s assessment which rested on the belief that imperialist rivalry among the leading powers was merely one possibility among others: there might be less dangerous and more profitable solutions, e.g., “the joint exploitation of the world by internationally united finance capital in place of the mutual rivalries of national finance capitals. Such a new phase of capitalism is at any rate conceivable.” The indignation this suggestion evoked in Lenin’s breast5 must strike the reader as puzzling unless he remembers that Kautsky was a pacifist, whereas Lenin was convinced that imperialism as a world system was fated to go down in a series of shattering wars and revolutions. On Kautsky’s assumption—which was compatible with Hobson, and in all probability derived from him—“ultra-imperialism” as he termed it, might evolve into a stable, albeit retrogressive, system of exploitation, with intra-imperialist rivalries reduced to a minimum. This perspective struck Lenin as both philistine and implausible: wars among the imperialist powers would continue. The reason he gives is interesting:
The question has only to be presented clearly for any other than a negative answer to be impossible. This is because the only conceivable basis under capitalism for the division of spheres of influence, interests, colonies, etc., is a calculation of the strength of those participating, their general economic, financial, military strength, etc. And the strength of these participants in the division does not change to an equal degree, for the even development of different undertakings, trusts, branches of industry, or countries is impossible under capitalism. Half a century ago Germany was a miserable, insignificant country, if her capital strength is compared with that of the Britain of that time; Japan compared with Russia in the same way. Is it “conceivable” that in ten or twenty years’ time the relative strength of the imperialist powers will have remained unchanged? It is out of the question.6
Uneven development was inherent in capitalism—especially in cartelized and trustified monopoly capitalism—and intra-imperialist wars would result from the continuous shift in the balance of power. This conclusion, while important to Lenin, was only very loosely integrated into the general framework of his argument, which centered on the thesis that, as he put it, “in its economic essence imperialism is monopoly capitalism.” The thesis—developed on the basis of Hilferding’s work which traced the disappearance of free competition and laissez-faire—ran alongside another strand of thought suggested by the colonial partition of the globe in the last quarter of the 19th century. Both together constituted the “essence” of imperialism: a global system within which peaceful “re-divisions” were excluded because the various sectors of the capitalist world economy developed at different speeds, so that the balance of forces was constantly upset. The rival imperialisms could not come to terms permanently, not even for the purpose of jointly exploiting the rest of the globe. Lenin was writing in 1916 under the impact of the first Anglo-German war. One can only conjecture what he might have said of a world system organized around the United States, as the 19th-century system had centered on Britain. Even less easy is it to imagine his comments on the triangular relationship linking the United States, the USSR, and China: the latter two nominally socialist, yet to all appearances quite capable of waging a nuclear war for the sake of territory in Siberia. Still, Lenin, like everyone else, was aware that imperialism antedated capitalism:
Colonial policy and imperialism existed before the latest stage of capitalism, and even before capitalism. Rome, founded on slavery, pursued a colonial policy and practiced imperialism. But “general” disquisitions on imperialism which ignore, or put [sic] into the background, the fundamental difference between socio-economic formations, inevitably turn into the most vapid banality or bragging, like the comparison: “Greater Rome and Greater Britain.” Even the capitalist colonial policy of previous stages of capitalism is essentially different from the colonial policy of finance capital.7
This is hardly conclusive as an argument against the possibility of a world imperialist cartel. Furthermore, the fact that the most varied socio-economic formations had spawned the phenomenon of imperialism might have served as a caution that the disappearance of capitalism would not necessarily bring universal peace with it. However, in Lenin’s perspective the global revolt against imperialist exploitation was an aspect of the socialist revolution. That accomplished and class domination abolished forever, what reason would the emancipated peoples have for waging war on each other? Nationalism? But this sentiment had historically arisen alongside bourgeois society and would give way to the internationalism of the working class. The 1917 preface to the new edition of the pamphlet, and even more so the 1920 preface to the French and German editions, were composed at a time when the Russian Revolution seemed to prefigure a global uprising. But the essential consistency of Lenin’s argument does not depend upon considerations having to do with the ups and downs of the revolutionary wave. To his mind, the struggle for self-determination within the multi-national “empire” of the Habsburgs or the Romanovs was part and parcel of a universal combat against imperialism in all its forms. The 1914—18 war had bridged the gap between radical democracy and proletarian socialism, for both the old dynastic and the new capitalist “empires” were responsible for its outbreak. The opening passage of an article he composed in September-October 1914 pulled the strands of the argument together:
The European war, which the governments and the bourgeois parties of all countries have been preparing for decades, has broken out. The growth of armaments, the extreme intensification of the struggle for markets in the latest—the imperialist—stage of capitalist development in the advanced countries, and the dynastic interests of the more backward East European monarchies were inevitably bound to bring about this war, and have done so. Seizure of territory and subjugation of other nations, the ruining of competing nations and the plunder of their wealth . . . these comprise the sole actual content, importance, and significance of the present war.8
In 1916 Lenin was polemicizing against Kautsky who—in an article composed shortly before the outbreak of war and published in his journal, the Neue Zeit, on September 11, 1914—had presented a highly orthodox interpretation of imperialism as a form of exploitation of backward agrarian countries by the capitalist powers. Kautsky’s analysis, which owed much to Hilferding and something to Luxemburg, duly made the point that imperialism had succeeded free trade. He also noted the growing pressure upon Britain from the rise of protectionism, the imperialist reaction in England itself, and the growth of capital exports since 1870. All this was fully in tune with both liberal and Marxist thinking as it had developed since Hobson, as was Kautsky’s stress upon the burden of militarism. Why then did Lenin object so violently to it? Largely because Kautsky, with his habitual optimism, had affirmed that imperialism was a retrograde phenomenon which did not really serve the interest of modern capitalism, if the system was administered rationally. Imperialism, by way of the arms race, interfered with capital accumulation and was thus a self-defeating operation. It was “digging its own grave.” And yet capitalism might still be capable of further development: from warlike competition among the rival powers to a stage of “ultra-imperialism,” “the translation of cartelization into foreign policy.” This was a perfectly sensible prognosis, but Lenin would have none of it: imperialist wars would go on, and they would eventually wreck the system.
Four years later, in July 1920, the preface to the French and German editions of Imperialism shifts the emphasis by omitting the old dynastic empires:
It is proved in the pamphlet that the war of 1914—18 was imperialist (that is, an annexationist, predatory, war of plunder) on the part of both sides; it was a war for the division of the world, for the partition and repartition of colonies and spheres of influence of finance capital, etc.9
The “more backward East European monarchies” have disappeared from sight. After all, Czarist Russia, Austria-Hungary, and the Hohenzollern monarchy were no more, and there was no need to remind the reader of their misdeeds. The argument focuses upon the specifically capitalist nature of modern imperialism:
It is precisely irrefutable summarized data of this kind that I quoted in describing the partition of the world in 1876 and 1914 . . . and the division of the world’s railways in 1890 and 1913. . . . Railways are a summation of the basic capitalist industries, coal, iron, and steel; a summation and the most striking index of the development of world trade and bourgeois-democratic civilization. How the railways are linked up with large-scale industry, with monopolies, syndicates, cartels, trusts, banks, and the financial oligarchy is shown in the preceding chapters of the book. The uneven distribution of the railways, their uneven development-sums up, as it were, modern monopolist capitalism on a world-wide scale. And this summary proves that imperialist wars are absolutely inevitable under such an economic system, as long as private property in the means of production exists.
The building of railways seems to be a simple, natural, democratic, cultural, and civilizing enterprise. . . . But as a matter of fact the capitalist threads, which in thousands of different intercrossings bind these enterprises with private property in the means of production in general, have converted this railway construction into an instrument for oppressing a thousand million people [in the colonies and semi-colonies], that is more than half the population of the globe that inhabits the dependent countries, as well as the wage-slaves of capital in the “civilized” countries.10
Marx had predicted a new war between Germany and France (this time allied to Czarist Russia) from the day Bismarck demanded Alsace-Lorraine in 1870, and Engels looked forward with trepidation to a great European war in 1890 when it became clear that Pan-Germanism and Pan-Slavism were about to collide over the decaying body of the Turkish Empire.11 This perspective guided the Second International since its foundation in 1889, and Lenin inherited it. But in 1920 he no longer needed it. The inevitability of war in the modern age could now be inferred from “uneven development” alone. No mention of Constantinople, or of the European power balance which underlay the pre-1914 alliances. The 1914—18 war had become “essentially” a conflict between Britain and Germany, and the wars of the future were going to be determined by similar rivalries. “Capitalism has grown into a world system of colonial oppression and of the financial strangulation of the overwhelming majority of the population of the world by a handful of ‘advanced’ countries. And this ‘booty’ is shared between two or three powerful world plunderers armed to the teeth (America, Great Britain, Japan), who are drawing the whole world into their war over the division of their booty.”12
The “parasitism and decay” of this imperialist capitalism expressed itself in two interconnected ways: a handful of “advanced” countries plundered the rest of the world, and they did so by way of capital exports. These investments yielded colossal profits and “out of such superprofits . . . it is possible to bribe the labor leaders and the upper stratum of the labor aristocracy. And that is just what the capitalists of the ‘advanced’ countries are doing.”13 Too bad the “labor aristocracy” turned out to be the core of the newly-formed Communist parties (as it had been the historic carrier of socialist ideas ever since the 1830’s when socialism came into being). Lenin had found a formula which enabled him to integrate anti-colonialism within the general framework of his theorizing. He could not well foresee that forty years later these slogans would be taken up in Peking and turned against his own successors.
For by the 1960’s the technological disparity between the USSR and China had become so blatant as to raise the question in the minds of China’s rulers whether on Leninist principles the Soviet Union might not have to be regarded as an “imperialist” power. Support for this assessment could be found both in Lenin’s earlier writings (when he was still concerned with Czarist annexations in Asia and elsewhere) and in Imperialism, where it was shown that the material base of imperialist domination lay in uneven economic growth and in the systematic exploitation of the undeveloped countries by the more advanced ones. As for the institution of public ownership in Russia after 1917, one could get around this difficulty by affirming that private capitalism had simply been replaced by state capitalism, the bourgeoisie by a privileged bureaucracy. But if this was the outcome of a proletarian revolution, then what guarantee was there that China would not suffer the same fate? At this point, Maoism discloses its essentially Rousseauist character: it replaces class analysis by social psychology. China is to be regenerated by an act of will, purified of “feudal remnants” (which it never possessed), purged of bourgeois sentiments still prevalent even among nominal Communists, and in general subjected to the rule of virtue. This kind of puritanism is a feature of every revolution, and Maoism reveals itself as an illusory experiment in self-improvement which repeats the tragicomedy of the Cromwellian and Robespierrist episodes at the peak of earlier upheavals belonging to the same general type. Its “proletarian” content is nil, and it is plain, that its leaders have not the faintest inkling of what Marxism is about.
But although mired in primitive thought-forms (nationalism above all), the Chinese are still able to make use of that element in Leninism which connects it with the Marxist critique of imperialism: the indictment of monopoly capital as the instrument of global exploitation. If it is the case that the existence of a handful of advanced countries necessarily aggravates the underdevelopment of the remainder, then the cleavage between American capitalism and Soviet “socialism” does indeed become insignificant. Which is where we came in. But before going further into this matter, there is still something to be said about Lenin’s theory of imperialism and its relevance to the age which terminated in 1945.
Marxists have traditionally held that European overseas expansion since the 16th century was an aspect of capitalism, in the sense that it was both cause and consequence of the socio-economic transformation originally begun by the Italian city-states and culminating in the Industrial Revolution. Mercantilist policy, as we have seen, was thoroughly imperialist and the driving force behind it was the urge to amass national capital in competition with rival powers. All this took shape during the pioneering age of capitalism, when production was still carried on in small competitive units. In what sense, then, can imperialism be described as the “highest stage” of capitalism, when in point of fact it made its appearance during this early transitional phase? Lenin’s answer to this question differs from Hobson’s in that he regards modern imperialism not as an aberration, but as the norm of capitalist development in its final, monopolistic, stage. If this is accepted, it follows that the system is moribund. For if monopoly capitalism entails the forcible subjugation of the world by a handful of overdeveloped imperialist countries, then the national movement in the colonies and semi-colonies must in the long run be fatal to the prospect of further development along capitalist lines. “World revolution” is now concretized into the perspective spelled out in Lenin’s veritable “testament”: the article published in Pravda on March 4, 1923, a few days before he suffered the paralyzing stroke that laid him low:
In the last analysis, the outcome of the struggle will be determined by the fact that Russia, India, China, etc., account for the overwhelming majority of the population of the globe. And during the past few years it is this majority that has been drawn into the struggle for emancipation with extraordinary rapidity, so that in this respect there cannot be the slightest doubt what the final outcome of the world struggle will be. In this sense, the complete victory of socialism is fully and absolutely assured.14
In a certain fundamental sense this was to become and remain the official Soviet perspective on world affairs until Stalin’s death, exactly thirty years after the publication of Lenin’s Pravda article. For whatever else he sacrificed, Stalin never made a real break with the Leninist belief in an inevitable East-West confrontation pitting Russia and Asia against the counterrevolutionary and imperialist West. This conclusion followed quite logically from Lenin’s concept of imperialism, and it was this part of his thinking which—via the Stalinist heritage—eventually entered into the theory and practice of Maoism. By now of course it no longer concords with the political line-up, the USSR having become, in Maoist terminology, an “imperialist” power in league with the United States.15 Is this simply a matter of shifting political alignments due to incalculable political and personal factors, or does it point up a fault in the original theoretical construction?
If the expansion of empires historically antedates the capitalist era—let alone the phase of fully-developed monopolistic capitalism after 1900—then there seems to be no good reason why imperialism (in the sense of territorial conquest and the acquisition of “empty space”) should not endure into the socialist age. There may be no urgent economic drive behind it, but a bureaucracy (or any other political elite in control of a major power) may feel impelled to extend its own control for political and military reasons alone. In the 1930’s the Stalinist regime chose to industrialize at breakneck speed (and to liquidate the peasantry as a class, while holding working-class living standards down to the absolute minimum through the institution of terrorism and forced labor) for what was primarily a political reason: the conviction that within measurable time the USSR would have to confront a major military challenge. As it turned out, this forecast proved correct, even though it may also have been self-fulfilling in that Stalin gave Hitler all the help he needed to come to power, and thereafter provided him with an incentive for attacking the Soviet Union while there was still time to crush its might. Stalin’s heirs might be forgiven for thinking that this was a valuable lesson. They might also suppose that an American-Chinese alliance would prove even more menacing to Russia than the German-Japanese pact concluded in the late 1930’s. Hence the desire to make sure that America’s favored ally, the Kuomintang, should not obtain control of China.
So far, Stalinist strategy makes perfect sense in terms of Lenin’s last writings. On the other hand, a triangular relationship pitting the USSR against a hostile China governed by self-styled Communists, with the West in the role of arbiter or onlooker, cannot be accommodated within the Leninist framework of 1920—30. It does no good to say that this change has occurred because Lenin’s heirs have defaulted, for on Lenin’s assumptions such a reversal of roles is not explicable. If his analysis was correct, two events ought to have occurred after 1945: the Sino-Soviet alliance should have remained in being, and Western imperialism should have suffered a mortal blow from the loss of its colonial possessions in Africa and Asia. Alternatively, if it is said that Western capitalism survived, even though imperialism—in the form it had assumed around 1920—was wrecked by the Second World War and its aftermath, then it seems to follow that imperialism was after all not the “highest stage” of capitalism, but merely a passing political arrangement which in due course was replaced by a new sort of relationship between the rich and the poor, the developed and the undeveloped, the oppressors and the oppressed. And where does one place the USSR in this picture? On the assumptions current in the literature of ultra-leftism, every developed industrial country, whether socialist or not, participates automatically in the oppression and exploitation of the Third World, simply by virtue of the latter’s economic lag. But if this is so, then the old distinction between socialism and imperialism is untenable. Whichever way one looks at it, Lenin’s writings during the last years of his life are no longer a safe guide even for Leninists.
In its original form, Lenin’s theory of imperialism fulfilled a dual function. In the first place it was intended to account for the surge of European and American overseas expansion during the last quarter of the 19th century and for the national conflicts resulting therefrom. Secondly, it related to structural changes within late capitalism, variously described as the age of finance capital or of monopoly. In its later version, this analysis also attempts to encompass the phenomenon of fascism. For P. M. Sweezy, writing in 1942, “fascism, as it exists in Germany and Italy, is one form which imperialism assumes in the age of wars of redivision. . . . Fascism arises under certain specific historical conditions which are in turn the product of the impact of imperialist wars of redivision on the economic and social structure of advanced capitalist nations.”16 This cautious formulation allows for phenomena such as Japanese militarism after 1931 which can be classified as imperialist, but not as fascist, since there was neither a popular mass movement nor an attempt to establish a one-party state. But just because the formula is flexible enough to permit of major deviations from the rule, it is not very helpful as an explanation of why fascism arose in Italy (a relatively backward country when measured by industrial standards) and in Germany (an extremely advanced one). Moreover, it ignores the simultaneous growth of fascist tendencies in countries such as Poland, Rumania, and Hungary which could not well be credited with imperialist tendencies.
Neither does it help much to be told: “The ideology and program of fascism reflect the social position of the middle classes and in this respect are merely an intensification of attitudes which have already been shown to be characteristic of imperialism.”17 Who or what are “the middle classes”? Italian and German fascism arose after 1918 among nationalist officers returning from the war, intellectuals (some of them former socialists or syndicalists) in search of a new orientation, students attracted by pesudo-socialist rant against “finance capital,” artistic bohemia, and the lumpenproletariat. The leadership of the movement was made up of demagogues and adventurers coming from all classes, while the fighting strength was supplied by the petty nobility and gentry, most of whom had been enrolled as officers during the 1914—18 war. The old propertied middle class adhered only very slowly and reluctantly, while the new “middle class” of salaried office employees floated about in a vacuum, and eventually came down on the fascist side under the impact of mass unemployment, socialist incompetence, and the collapse of liberal democracy. The entire phenomenon was historically unique and had no sequel after the 1939—45 war, which was vastly more destructive of lives and property, and which completed the ruin of the old middle class and peasantry over wide areas of Europe. It is impossible to dissociate fascism from the nationalist movements which preceded it, and which for historical reasons were far more virulent in Italy and Germany than in France or Britain. Causal explanations of a sociological type are too mechanical to serve as a guide. One may also suspect that they came into fashion only because Lenin was no longer there to dampen the ardor of his disciples.
The Leninist theory of imperialism proper is rather more firmly grounded. Although induced by Hobson’s empirical analysis of 1902, it avoids the theoretical mistake of making capital investment abroad dependent on underconsumption at home. For Hobson, the “taproot of Imperialism” was the failure of consumption to keep up with production. Lack of investment opportunity at home generated a drive to extend imperial rule over dependent territories, where capital could safely and profitably be invested.18 Lenin rejected underconsumption as an explanation, putting in its stead Hilferding’s theory of finance capital as the driving force behind expansionism and empire-building. He thus avoided the trap of having to explain why profits could be made more easily from starving peasants abroad than from relatively well-paid workers at home.19 At the same time, however, he introduced the falling rate of profit as an explanation of the imperialist search for colonial super-profits. In point of fact, the bulk of British investment, before and after 1914, went to the developed industrial areas of Western Europe, North America, South Africa, and Australia-New Zealand, leaving the dependent tropical empire starved of investment capital. After 1945 this became the standard reproach against the historical record of British imperialism, but if one accepts it, one cannot at the same time affirm that colonial exploitation was a major source of profits for the British investor at the peak of the imperialist era.
The really decisive factor in the interrelation between the metropolis and the empire was the economic development of the white-settler “dominions”—Canada, Australia, New Zealand, South Africa—through the investment of British capital. Colonial super-profits were marginal, and the annexationist drive after 1880, which led to the “scramble for Africa,” is best understood as a political reaction to the threat posed by American, German, Russian, and French competition in a hypothetical future. Down to 1913, British capital still regarded the whole world as its oyster. Joseph Chamberlain’s protectionist schemes were rejected precisely for this reason. As for colonial super-profits having served to corrupt the working class, British socialist historians have not been slow to point out that the years before 1914 witnessed a peak of working-class militancy.20
This is not to say, however, that Lenin was wrong so far as the 1920’s and 1930’s are concerned. His analysis stands up quite well when considered against the background of the inter-war period. Paradoxically, it became more appropriate after he had published Imperialism in 1916, for in that year the old dynastic empires of Eastern Europe were still in existence, whereas from about 1920 the term “empire” signified above all the British Empire, and secondly the rival American and Japanese “co-prosperity spheres” in Latin America and East Asia respectively. If imperialism was defined to mean capital export to dependent territories, plus stagnation at home, the Britain of Stanley Baldwin and Neville Chamberlain was a perfect example of the sort of thing Lenin had in mind. There was even a deliberate attempt to divert British capital investment abroad to the dependent Empire: the sort of thing Joseph Chamberlain had preached without success around 1900. In those days the City of London and the Liberal party proved able to defend free trade against Chamberlain’s “imperialist” (i.e., protectionist) assault, even though he found allies among the Fabians, as well as among landlords, manufacturers, and Tory diehards. After 1918 the Liberal party went into decline and the Conservatives became increasingly protectionist, to the point of identifying themselves quite openly with monopolist interests lying within the special protected sphere of the British Empire officially so described. This was a departure from the golden age when the entire world lay open to British manufacturers and investors. It was plainly due to increasingly stringent American, German, and Japanese competition, and to that extent it represented a defensive reaction explicable on Marxist-Leninist lines:
British capitalism did not . . . share before 1914 the special characteristics of the German industrial structure which Lenin saw as the essence of what he called the “Imperialist stage” of capitalist evolution. After 1919, however, Britain also began to exhibit more and more of these characteristics of monopoly concentration and financial domination that Lenin had analyzed in Germany. Not only the growth of oligopoly, but conversion to protection from free trade and concentration on empire markets, all marked the British economy in the inter-war years. And it was increasingly in relation to the closed doors of empire trade that Germany, Italy, and Japan were challenging the “have” powers. Britain and the other allied powers presented a barrier to the natural development of Germany.21
The “division of the world among the great international trusts” foreseen by Lenin in 1916 did in fact occur in the 1920’s and 1930’s. The major industries assumed a monopolistic or quasi-monopolistic structure, and the resulting giant combines entered into cartel agreements to divide the world market up between them. From then on, although competition did not cease, it assumed a different form, agreed share-outs taking the form of price cutting. Since the major combines normally had government support, economic and political “spheres of interest” tended to coalesce. In all these respects the pre-1914 era could serve as a model, with the proviso that Britain had now become a convert to protectionism. Did this result in a new form of imperialism? As we have seen, liberalism and capitalism were perfectly compatible as long as British industry dominated the world market. The partnership fell to pieces when an increasingly defensive Britain retreated behind tariff walls during the 1930’s. The trouble is that no general rule can be deduced from these occurrences. Protection by its nature is of service to stagnant or declining industries, but it is also an essential element in the growth of new and highly efficient ones during their pioneering age. Bismarckian Germany in the 1880’s turned protectionist not because its industries were stagnant, but because they needed a political shield behind which to prepare themselves for the coming struggle to conquer the world market. The same applies to the America of Theodore Roosevelt, whereas Franklin Roosevelt could afford to entertain his partners in 1943—5 with visions of a world thrown open to international trade on the classical liberal model. He evoked no response from Stalin, and only the most restrained enthusiasm from Winston Churchill, a former freer trader reluctantly converted to the belief that the British Empire needed tariff walls to protect itself from American competition.22
If protectionism can occur both at the beginning and at the close of an “imperial” era, the same is evidently true of militarism and naval-ism. Here too historical evidence discloses no correlation with either the “lowest” or the “highest” stage of economic development, but rather a random distribution of political currents making for greater or lesser aggressiveness. A good example is provided by German naval policy before 1914 which was clearly in the service of a conscious attempt to break the British stranglehold on Continental affairs. On the evidence assembled by Professor Fritz Fischer and other historians there is no doubt that the ruling class of Wilhelminian Germany—plus most of the liberal opposition and a substantial slice of the trade unions and the pre-war Social Democrats—was fully committed to “imperial” expansion overland and overseas; but by no means the entire political elite was in favor of challenging the British Empire. Moreover, the naval enterprise was counter-productive from the imperialist standpoint, since it brought about a coalition of Germany’s enemies against her.23
Among Lenin’s Socialist contemporaries, Rosa Luxemburg (1871—1919) occupies an important place, and her The Accumulation of Capital (1913) still holds the attention of academic economists who regard her theoretical solution of the problem as mistaken. For the rest, the book must rank as a period piece. In introducing it to a British audience in 1951, Mrs. Joan Robinson at one point felt obliged to note, “On the purely analytical plane her affinity seems to be with Hobson rather than with Keynes.” Considering the date, hardly a surprise. But the work has a dimension that lifts it beyond the range of scholastic wrangling over the reproduction schemata in Volume II of Capital. Rosa Luxemburg wrote about capital accumulation because she stood in need of an explanation for something that was actually going on in the Europe of her day: an arms race pointing straight to the catastrophe of 1914. In a sense she knew the answer before she had formulated her question: militarism represented an outlet for an unmanageable surplus generated in the capitalist production process. The thesis would have gained in plausibility had it been sharpened to the point of stating that arms expenditure creates no problems for a capitalist market economy because it is wasteful and does not compete with productive forms of investment. The issue does not emerge clearly, and a perfectly valid sociological analysis of militarism as an instrument of expansion into the pre-industrial hinterland of the modern world is transformed into an unconvincing explanation of how surplus value is realized.
The true interest of the argument lies in its emphasis on the disruptive effect of capitalism upon the “natural economy” of peoples not yet introduced to the blessings of a “free” market economy, with its familiar “civilized” refusal to recognize the existence of human beings other than paying customers. Even if there is some extravagance in identifying “European civilization” with “commodity exchange with European capital,”24 it does no harm to be reminded that the incidental blessings of Westernization came in the wake of colonial plunder and the forcible disruption of peasant economies. From here the road is short to a discussion of international loans and their consequences. “The imperialist phase of capitalist accumulation which implies universal competition comprises the industrialization and capitalist emancipation of the hinterland where capital formerly realized its surplus value. Characteristic of this phase are: lending abroad, railroad construction, revolutions, and wars.”25
Hobson and Hilferding in their different ways had anticipated this line of reasoning, but Rosa Luxemburg synthesized Hobson’s empirical description with Hilferding’s theoretical analysis. The result at times sounds startlingly “modern,” e.g., “Imperialism is the political expression of the accumulation of capital in its competitive struggle for what remains still open of the non-capitalist environment.”26 This may stand as an example of the process whereby a theorist intuitively hits upon an important discovery by way of unsound premises and faulty reasoning. The passage concludes with a piece of apocalyptic rhetoric: “Though imperialism is the historical method for prolonging the career of capitalism, it is also a sure means of bringing it to a swift conclusion . . . the mere tendency toward imperialism of itself takes forms which make the final phase of capitalism a period of catastrophe.” Why only the final phase? And where is the evidence that the imperialist phase represents finality?
Imperial Germany before 1914 was a country where the drive toward the creation of an economically self-sufficient Mitteleuropa could not be overlooked, and Rosa Luxemburg duly pounced on Schmoller. Those Bismarckian conservatives who styled themselves, or were styled by others, Kathedersozialisten (socialists of the chair—meaning the academic chair) had by 1900 become not only protectionists but economic autarchists. In other words, they were on the road to imperialism in the modern sense of the term, complete with geopolitics and resentful side-glances at the three empires (Great Britain, Russia, and the U.S.) already in existence. From there it was only a short step to the demand that Germany acquire a navy strong enough to break the British stranglehold, and thus become, if not a world power, at least a desirable ally of the Big Three. Schmoller led the chorus, while insisting that it was Germany’s high task to see to it that in the 20th century the Three Empires should not subject the remainder of the world to “a brutal neo-mercantilism.” Rosa Luxemburg noted all this and was properly sarcastic about it. At the same time she virtually adopted the classical liberal argument that capitalism was a world system, hence not subject to “the bookish decrees issued by German scholars” enamored of national autarchy. On the same grounds, she dismissed out of hand Struve’s suggestion that a country possessing a sufficiently large territory and population could turn itself into a self-contained whole. Struve, who had once been a Marxist, was clearly thinking of his native Russia. To Luxemburg, writing in 1913, he was a latter-day narodnik who did not understand the operation of capitalism as a global system which automatically subordinated all national units to its infernal logic. There is some reason to believe that Trotsky, who possessed no grasp of economics, derived from Luxemburg his obstinate conviction that “socialism in one country” was not merely reactionary but unworkable for economic reasons alone. If so, Luxemburg may have been responsible for equipping the Trotskyist movement with a universalist perspective which made better sense in the liberal age than in the political reality of a neo-mercantilist era.
After this brief excursion we may now turn to Schumpeter’s alternative explanation of imperialism, for the most part couched in the form of a running commentary on the Austro-Marxist doctrine produced by Otto Bauer and Rudolf Hilferding. There is no point in bothering the reader with Keynes’s disquisitions on the topic. His rather circumspect praise of the mercantilists has already been noted. Keynes was a critic of the “classics” (that is, of Alfred Marshall and his pupils) in that he did not believe the market economy could stay in equilibrium without state intervention. For the rest, his General Theory has no bearing on our subject, or in the wider issues of technological change and industrialization. This suggests a more general observation which is likely to give offense in Anglo-American academic quarters: Continental Europeans (professional economists included) have some trouble with the notion that in the 1930’s there occurred a cataclysmic event known as the “Keynesian revolution.” No such volcanic disturbance ever came to their attention, either before or after 1945. What they observed was that the 1939—45 war had instituted full employment, after rearmament had already done so in Germany between 1933 and 1939. Thereafter, all Western governments, for political reasons, were clearly unwilling to let unemployment mount to crisis proportions. In Eastern Europe there was no problem anyway, since industrialization under conditions of total state ownership left no room for the uncontrolled play of market forces. But these forces were not allowed to work themselves out “freely” in the West either—not even in West Germany or Japan, where the economy was anyhow kept going by a colossal export boom. For some reason, no one in authority in these countries found it necessary to invoke Keynes in support of full employment policies, which were quite simply accepted as a political necessity. What the Europeans did notice was that the country where Keynes enjoyed the highest reputation—Britain—also had the worst economic record.28
If Keynes had by 1935 come to equivocate on the topic of mercantilism—and by implication on that of economic nationalism and state intervention to insure adequate capital investment at home—Schumpeter in 1919 was writing under the impact of the Anglo-German conflict which had issued in the war of 1914—18. Imperialism and Social Classes27 had been drafted during the war years and was plainly intended as a tract for the times: specifically as a warning to the Germans not to relapse into the political follies which had laid them low. But the essay also had a theoretical content, impartially aimed at protectionist conservatives on the Right and the Bauer-Hilferding school of Marxism on the Left. It did not deal with Lenin, whose pamphlet on imperialism became available in German only in 1920, and it had only an indirect reference to Rosa Luxemburg’s work of which Schumpeter may or may not have been aware. If he was, he cannot have taken much interest in her critique of previous Marx interpreters and he would certainly have disagreed with her indictment of imperialism as the political tool of capitalist expansion in the West’s pre-industrial hinterland. For it was of the essence of his position that capitalism could get on very well without imperialism. This of course was the traditional liberal faith, but Schumpeter added something new and original—an analysis of imperialism as the outgrowth of pre-bourgeois forms of social life. Imperialism was not merely retrogressive from a laissez-faire standpoint: it was quite specifically linked with the survival of ancient and outdated modes of thought anchored in the existence of social strata whose political hegemony had shaped the world of the emerging bourgeoisie:
Whoever seeks to understand Europe must not overlook that even today its life, its ideology, its politics are greatly under the influence of the feudal “substance,” that while the bourgeoisie can assert its interests everywhere, it “rules” only in exceptional circumstances, and then only briefly. The bourgeois outside his office and the professional man of capitalism outside his profession cut a very sorry figure. Their spiritual leader is the rootless “intellectual,” a slender reed open to every impulse and a prey to unrestrained emotionalism. The “feudal” elements, on the other hand, have both feet on the ground, even psychologically speaking. Their ideology is as stable as their way of life. . . . This quality of possessing a definite character and cast of mind as a class . . . extends their power far beyond their actual bases. . . .
Imperialist absolutism has patterned not only the economy of the bourgeoisie but also its mind—in the interests of autocracy and against those of the bourgeoisie itself. This significant dichotomy in the bourgeois mind—which in part explains its wretched weakness in politics, culture, and life generally; earns it the understandable contempt of the Left and the Right; and proves the accuracy of our diagnosis—is best exemplified by two phenomena that are very close to our subject: present-day nationalism and militarism. . . .
Nationalism and militarism, while not creatures of capitalism, become “capitalized” and in the end draw their best energies from capitalism. Capitalism involves them in its workings and thereby keeps them alive, politically as well as economically. And they, in turn, affect capitalism, cause it to deviate from the course it might have followed alone, support many of its interests. . . .29
If only the European bourgeoisie had known its own interests, it would have avoided the imperialist madness leading to 1914—18. This was virtually what Kautsky had suggested in 1914—15 and what had made Lenin so angry. It is difficult not to feel that Schumpeter juggles with the term “imperialism.” True, the European middle class had grown up within an absolutist framework, allowed the landed nobility to run the government for it, and even propped up the dynastic Empires of the Hohenzollerns, Habsburgs, and Romanovs. But that same middle class had by 1914 spawned a plutocratic upper stratum which coalesced with the ruling elites of the ancient monarchies and rendered them more, rather than less, aggressive and expansionist. Schumpeter’s ingenious apology made some sense for his native Austria-Hungary, but then the Habsburg monarchy was a political anachronism. There was nothing weak or contemptible about great German industrialists like Walter Rathenau, or for that matter great scholars like Max Weber, an arch-exponent of nationalism and imperialism both before and after 1918.
Moreover, Schumpeter undercut his own position by taking over the laissez-faire argument and then reluctantly conceding the validity of the Marxist thesis concerning the link between protectionism, monopoly capitalism, and external aggression. First, the restatement of classical liberal orthodoxy: “It may be stated as being beyond controversy that where free trade prevails, no class has an interest in forcible expansion as such.”30 “. . . since protectionism is not an essential characteristic of the capitalist economy—otherwise the English national economy would scarcely be capitalist—it is apparent that any economic interest in forcible expansion on the part of a people or a class is not necessarily a product of capitalism.”31 Unfortunately protectionism does exist and has nefarious consequences, especially when combined with the drive toward monopoly. “. . . under free trade only international cartels would be possible” and Schumpeter regards them as harmless, since under such conditions “there would be conflicts in economic interests neither among different nations nor among the corresponding classes of different nations.”32“A protectionist policy, however, does facilitate the formation of cartels and trusts. And it is true that this circumstance thoroughly alters the alignment of interests. It was neo-Marxist doctrine that first tellingly described this causal connection (Bauer) and fully recognized the significance of the ‘functional change in protectionism’ (Hilferding).”33 The change comes about because trusts and cartelized industries protected by tariff walls establish monopoly prices at home, while dumping their surplus abroad, in some cases below cost; the consequence is “a conflict of interests between nations that becomes so sharp that it cannot be overcome by the existing basic community of interests.”34
This conclusion does not seem to be very far removed from the Marxist position, at least in its Austrian version; and yet Schumpeter insists that “Imperialism . . . is atavistic in character. It falls into that large group of surviving features from earlier ages that play such an important part in every concrete social situation.”35 For the same reason he is convinced that imperialism has no real roots in the working class. “Social imperialism in the sense of imperialist interests on the part of the workers, interests to which an imperialist attitude ought to correspond, if the workers only understood it correctly—such an imperialist policy oriented toward working-class interests is nonsensical. A people’s imperialism is today an impossibility. ”36 Whereas presumably in earlier days it made sense, because e.g., the populus Romanus as a whole profited from the imperium. On Schumpeter’s assumptions, as stated in 1919, Italian and German fascism were inexplicable. He might have rejoined that both terminated in disaster. But this does not alter the fact that a “people’s imperialism” was just what the Italian and German working classes—or anyway the bulk of them—came to believe in for a time.
European politics in the 1920’s and 1930’s are not analyzable in terms of pre-bourgeois survivals, although these “residues” played a part in determining the tolerance with which the ancient nobility and gentry viewed plebeian demagogues playing at Caesarism. Certainly these declining classes threw their weight in the fascist scale, but when all is said and done the historian has to register the uncomfortable fact that no class proved immune to the infection. The matter can be stated in fairly simple terms: as long as the bourgeoisie retained its faith in liberal democracy, the working class did the same (albeit in the form of social-democratic reformism); when the middle class turned fascist, the working class followed suit. Had it been otherwise, the Third Reich could never have waged war as it did.37
Among contemporary writers adhering to the radical Left, the term “imperialism” is commonly employed to designate four quite different kinds of relationships which Lenin had been careful to distinguish: 1) national oppression of the sort practiced in the old dynastic East European empires before 1914—18; 2) colonialism of the Anglo-Indian type during and after the mercantilist era; 3) “liberal imperialism,” classically represented by the British and subsequently the American drive to throw all foreign markets open to Western capital; 4) the transfer of surplus value from the poor countries to the rich through trade relationships which discriminate against undeveloped economies. By running these different meanings together one can achieve startling rhetorical effects without coming any closer to an up-to-date theory of imperialism. Types 1) and 2) are historically outmoded, which is not to say that national oppression has vanished—on the contrary, it is fairly widespread, notably in African and Asian countries recently emancipated from the European yoke. Types 3) and 4) are currently the target of widespread denunciation both in Anglo-American literature and among radical nationalists in the Third World.38
In the great age of Marxist economic theorizing, between 1910 and 1930, a theory of capitalist imperialism was worked out by Hilferding, Luxemburg, Lenin, Bukharin, and other writers, with the intention of differentiating the topic from the more general subject of dynastic expansion and national oppression: the former being rooted in the feudal age, the latter too familiar to lend itself to theoretical treatment, and in any case not a suitable theme for economic analysis. Since 1945 the emphasis has increasingly shifted from 3) to 4), with liberals and socialists putting forward rival explanations of what has caused uneven development within a world economy dominated by the industrial-capitalist nexus. In its latest transmogrification the debate has been further enriched by the Maoist thesis that there exists a form of socialist imperialism represented by the USSR, though oddly enough this phenomenon is supposed to have made its appearance only since the demise of Stalin in 1953. Much of this literature, while scholarly in appearance, is in fact propagandist, and the same applies to the productions of the liberal-imperialist school.39
If confusion is to be avoided, it seems desirable to eliminate types 1) and 2) from the agenda, with the obvious proviso that even revolutionary nationalism may become the breeding-ground of expansionism. Whether one chooses to describe this familiar phenomenon as imperialism seems to be a semantic matter. If in the ancient democratic tradition, which Marx and Engels inherited from the predecessors of the 1848 revolutionary movement, one identifies imperialism with national oppression, then the present-day USSR in some respects does not differ greatly from the Empire of the Romanovs. This would certainly be the opinion of the citizens of Czechoslovakia, and probably of most East Europeans, including not a few leading Communists. Support for this unflattering conclusion can be found in Lenin’s writings, which is why their interpretation has become a very awkward matter for the present rulers of what is officially styled the Soviet Union.
But we do not advance the discussion of Marxist theory by making the obvious point that Lenin and others recognized a difference between precapitalist and specifically modern types of imperialism. At most this distinction makes it easier to account for the existence of (a) capitalism without empire and (b) empire without capitalism. The former has become typical of contemporary Western Europe; the latter appears to be a fairly accurate description of the USSR plus its East European client states. Since imperialism is older than capitalism, there seems to be no particular reason why the two should not be dissociated: to the point perhaps of laying the groundwork of an as yet nonexistent theory of post-capitalist imperialism. Such a theory, if and when it comes into being, will have to take the Stalinist era for its starting point. What it will look like, it is too early to say, but it seems improbable that the analysis of market relations will figure prominently within it.
A Marxist theory of capitalist imperialism must in any case take for its starting point Marx’s well-known dictum: “The real barrier of capitalist production is capital itself.” Marx goes on to say: “It is that capital and its self-expansion appear as the starting and the closing point, the motive and the purpose of production; that production is only production for capital and not vice versa, the means of production are not mere means for a constant expansion of the living process of the society of producers. . . . The means—unconditional development of the productive forces of society—comes continually into conflict with the limited purpose, the self-expansion of the existing capital. The capitalist mode of production is for this reason a historical means of developing the material forces of production and creating an appropriate world market, and is at the same time a continual conflict between this its historical task and its own corresponding relations of social production.”40 Viewed from some such perspective, the phenomenon of imperialism loses its seeming irrationality, although this does not exclude the possibility of specific irrationalities which in retrospect appear as gigantic political follies or miscalculations. Thus it is arguable that on any rational calculation of chances, the behavior of the German and Japanese ruling groups in the first half of this century was absurd. Circumstances of this kind certainly demand an explanation, but the latter falls into the province of the historian. On an overall view, imperialism makes sense, at any rate for the hegemonial power in control of the system during a given historical epoch. At the same time imperialism acts as a brake upon the economic development of regions controlled—directly or indirectly—by the imperial metropolis, and to that extent it constitutes a barrier to capitalist production, inasmuch as it interferes with the growth of precisely those external markets which investors and exporters are in search of.
The contradiction was apparent to Marx, although in his major work he gave no systematic attention to it. His occasional comments on British imperialism in India anticipate some aspects of later controversies among British and other socialists, e.g., “England has to fulfill a double mission in India: one destructive, the other regenerating—the annihilation of [the] old Asiatic society and the laying of the material foundations of Western society in Asia.”41 This is followed by the observation that the British cannot plunder India without helping to industrialize it. “They intend now drawing a net of railroads over India. The results must be appreciable.” “I know that the English millocracy intend to endow India with railways with the exclusive view of extracting at diminished expenses the cotton and other raw materials for their manufactures. But when you have once introduced machinery into the locomotion of a country which possesses iron and coal, you are unable to withhold it from its fabrication. You cannot maintain a net of railways over an immense country without introducing all those industrial processes necessary to meet the immediate and current wants of railway locomotion, and out of which there must grow the application of machinery to those branches of industry not immediately connected with the railways. The railway system will therefore become, in India, truly the forerunner of modern industry. . . . Modern industry, resulting from the railway system, will dissolve the hereditary divisions of labor upon which rest the Indian castes, those decisive impediments to Indian progress and Indian power. . . . At all events, we may safely expect to see, at a more or less remote period, the regeneration of that great and interesting country. . . .”42
Contemporary economic historians have noted that Marx expected too much from Indian railroad construction, which in the event opened up a market for British rather than for Indian manufacturers. This does not invalidate the general point he wished to make about the impact of industrial capitalism on backward and dependent countries: “The bourgeois period of history has to create the material basis of the new world—on the one hand the universal intercourse founded upon the mutual dependency of mankind, and the means of that intercourse; on the other hand the development of the productive powers of man and the transformation of material production into a scientific domination of natural agencies.”43 The argument is in tune with a line of reasoning developed five years earlier in the Communist Manifesto concerning the revolutionary role of the bourgeoisie in pioneering a new mode of production.
One may say that Marx regarded laissez-faire rather than protection as the “classical” form of capitalist trade relations, and liberal imperialism—the imperialism of free trade—as its political counterpart. The protectionist and social-imperialist movement in Britain after 1900—a movement which obtained substantial support from prominent Fabians, as well as from the geopoliticians of the political Right—would have struck him as an aberration, or alternatively as a symptom of decline. On this issue, since there was no Marxist literature worth mentioning in Britain before the 1930’s, the cosmopolitan tradition, and the concurrent critique of imperialism as parasitic and retrograde, was represented by radical liberals such as Hobson. Social-imperialist propaganda for the most part appealed to conservative sentiment, where it merged with Social Darwinism. Its socialist, or pseudo-socialist, fellow travelers in some cases blossomed out as precursors of fascism.44
Because the political battle-lines were drawn in this manner, it is easy to overlook the fact that the system which the Liberal party, and subsequently the Labour party, defended down to 1932, when free trade was abandoned, guaranteed Britain’s preeminent world position as an exporter of both capital and commodities. “The advantage of the strategic lines of the empire was the preservation of a world of free trade.”45 The muddle into which radical liberals like Hobson got themselves over this issue was due to their tendency to identify imperialism with colonialism. Their American contemporaries and successors did the same, with the result that public attention was focused upon U.S. control of the Philippines, or of some minor Latin American republic, while the more important issue of North America’s increasingly central position within the global division of labor was ignored. In retrospect it is clear that the era of British predominance was governed by a set of relationships which from the 1930’s onward, and more particularly after 1945, became a model for the U.S. policy-makers, especially those among them who quite sincerely saw themselves as serving the cause of universal free trade against the benighted protectionism of the British—not to mention the Axis powers who had gone to war for the stated purpose of carving out exclusive “spheres of influence” for themselves at the expense of everyone else:
Free trade was the instrument of Britain’s industrial supremacy holding back development elsewhere; this condition would, in the end, have checked British growth too, as foreign markets were impoverished. But British capital investment in Europe and North America, and in other lands of European settlement, created the necessary expanding markets for manufactured exports. In the not so long run, it created also new competitors for British industry.46
If the dissolution of the “visible” British Empire after 1945 did not have the disastrous consequences often predicted by Conservative politicians, one important explanation at least has to do with the fact that capital and labor had in the past predominantly moved to lands of European settlement. Elsewhere, power was normally transferred to governments which, by and large, did not expropriate Western capital assets. This was partly a consequence of the cold war which from 1945 onward established new political alignments cutting across the simple antagonism of colonizers and colonized. But it also represented an option on the part of nationalist movements intent on industrializing their respective countries with the aid of European, American, and Soviet investments alike. The cold war was, from the standpoint of these political elites, a means of extracting aid from the industrial powers, whether capitalist or nominally socialist. This applies to the greatest of these newly emancipated countries, India, as much as it does to the small states formerly belonging to the French colonial empire in Africa.
Inversely, American reactions were of the familiar liberal kind. Free trade having become the official ideology of the United States after 1945, it was only natural that a treaty embodying laissez-faire principles should have been negotiated by Washington with the Kuomintang government in November 1946.47 Hence in part the traumatic shock induced three years later by the so-called “loss of China.” Hence also the quixotic determination to keep the Chiang Kai-shek regime going at least on Formosa. What one needs to guard against is the notion that it made economic sense for the United States government to boycott mainland China instead of entering into trade relations with it. People who adopt this line of reasoning have transformed Marxism into economic determinism of the crudest kind. Specifically, they fail to see that, in relation to China, both American and Russian policies are inevitably governed by balance-of-power considerations. The Maoist revolution was perceived as a menace to America’s world position and opposed on those grounds, not because the Chinese market was of overwhelming importance to U.S. exporters.
When the aggravation of the Sino-Soviet conflict—itself inexplicable on the economist misinterpretation of Marxism—diminished the prevailing fear of a monolithic Communist bloc, Washington showed itself ready to improve relations with mainland China. It is perfectly true that from the official U.S. standpoint the Maoist regime represented a barrier to that unrestricted flow of trade and investment which the liberal ideology postulates as the optimal condition to be sought by policy-makers. But in an imperfect world even a state-controlled economy can become a trading partner for the U.S., and Maoist determination to industrialize without foreign aid at least relieves Washington of one standing source of embarrassment. As for the West European countries, it should not be necessary to emphasize that an embargo on trade with China can never be anything but a nuisance to them.48
A tendency to identify imperialism with colonialism is marked at both ends of the political spectrum on the Left: among liberals who reproduce Hobson’s mistaken emphasis upon protectionist control of tropical markets and raw materials, and among adherents of Maoism who see corporate power lurking behind every bush and causing the U.S. government to intervene in Asian and Latin American countries, so as to forestall or suppress national revolutions menacing the sources of corporate profit. If these military incursions were to become marginal to the “invisible” hegemony of the United States within the global division of labor, the adherents of both schools would be deprived of a precious argument: the liberals would no longer be able to celebrate the beneficial effects of capital investment in backward areas, and the New Left would be hard put to explain how the corporations keep going, even though they have to compromise with nationalist regimes abroad. The kind of relationship currently subsisting between France and the North African countries could easily reproduce itself in areas formally independent of the United States, and already sufficiently autonomous to expropriate U.S. capital assets—with or without compensation. If this were to occur on a substantial scale, with the tacit connivance of U.S. policy-makers no longer hypnotized by fear of “world Communism,” it would not alter the hegemonial position of the United States within the North Atlantic region which is anyhow the principal field of U.S. capital investment. In short, it would leave the “imperialism of free trade” intact and in perfect economic health.
There is evidently a distinction to be drawn between U.S. capital investment in Canada or Western Europe, and the flow of such investment to undeveloped regions for the purpose of stimulating the production of oil and other raw materials required by the North American economy. In the former case, U.S. capital flows into mature industrial economies which also happen to be quite efficient competitors in third markets, and even in the U.S. domestic market. In the case of the less developed countries, the chief beneficiaries are extractive industries which may or may not provide a surplus for industrialization. If the latter is artificially held back, the relationship is of the semi-colonial type, and in due course is likely to generate nationalist resentments sufficient to unseat the local oligarchy. If this does not occur, and if a state of dependency upon the imperialist metropolis is perpetuated by political or other means, then the country in question cannot become an important market for industries producing consumer goods. This pattern may perpetuate itself in marginal cases, but it can hardly become the rule without undercutting the rationale of the whole process.
Fully developed industrial countries cannot be controlled by outsiders, and they provide the principal markets for U.S. exports and capital alike. Undeveloped regions either remain in that state, in which case their significance must shrink; or else sufficient revenue will be generated by foreign and local investment to stimulate more rapid all-round development. In this case the relationship, while still unequal, loses its colonial character. Nor does it follow that development does not occur because more wealth is siphoned out in profits than is put in by the investors. Between 1870 and 1914 Britain clearly profited from capital exports—or else they would not have been undertaken. Income received in various forms from foreign investments was substantially larger than the net export of British capital: some £4,000 million against £2,400 million. The same is true, on an even larger scale, of U.S. investments since 1945. But some development takes place nonetheless, even though it does so merely as a by-product of capitalist profit-making.
Given the dominant position of the United States within the world market in general and the North Atlantic area in particular, it is perhaps not surprising that the current controversy over the problems and prospects of the American Empire should revive some aspects of the earlier British debate. In addition to the conservative-liberal quarrel over protectionism versus free trade, there is the quasi-Marxist interpretation of American imperialism in terms derived from Lenin’s analysis of European monopoly capitalism fifty years ago. Until about 1930 that analysis was more relevant to Germany than to Britain, and since 1960 at the latest it has once more ceased to fit the facts, since British capitalism has survived the loss of empire without major trouble. Conversely, West German (and Japanese) capitalism is thoroughly monopolistic, but clearly beyond the colonialist stage, so that once more the equation, monopoly capitalism=colonial imperialism has ceased to fit. On the other hand, it seems to fit the United States, provided one accepts the view that Latin America is de facto controlled by U.S. capital and that its nominally independent governments stand in a semi-colonial relationship to the imperial metropolis.
How far this argument can be pushed, in view of Cuba’s successful defiance of the North American colossus, and the growth of nationalist tendencies elsewhere in the hemisphere, is a question of some relevance to Maoists, though not to Marxists who are unable to accept Lenin’s drastically simplified exposition of Hilferding’s argument. What happens, for example, if industrialization should get under way in Latin America with substantial U.S. assistance—public and private—in the interest of creating mass consumer markets for U.S. exports? On theoretical grounds such a development cannot be excluded. If it is blocked by political shortsightedness or corporate stupidity, then the resulting tensions can in principle be resolved without altering the basic nature of the nexus linking North and South America (omitting Cuba, which is kept afloat by Soviet aid for political reasons). If it be said that U.S. corporate investment will siphon out more than is put in, the answer is that nothing but purely political considerations forbids bourgeois-nationalist regimes in Latin America from stopping this reverse flow, or even from seizing major U.S. assets, as in some cases they have already done with complete impunity. Alternatively, if it is maintained that the countries in question will be prevented from embarking upon all-round development, then it follows that they cannot become important markets for U.S. mass-production industries; in which case the issue becomes a domestic one for U.S. interests—including the unions, as well as the exporters—to argue out among themselves, and we are once more back with the familiar quarrel between conservative and liberal factions, with organized labor for the most part enlisted on the liberal side. What, if anything, this has to do with the Leninist equation, it is difficult to understand.
The analysis of modern capitalism in such works as Baran’s Political Economy of Growth (1957), or Baran’s and Sweezy’s Monopoly Capital (1966), continues a line of reasoning pioneered by Lenin half a century ago. This may be the reason why these authors and their followers tend to fasten on the growth of corporate power, or on safe topics such as Japan’s successful industrialization as against India’s miserable record.49 When all that can be said on these themes has been exhausted, we are no nearer to an understanding of what it is that keeps imperialism going, both in the presence and in the absence of colonial or semi-colonial patterns of dependence.
If the possession of colonies makes no difference to a flourishing capitalism, then what is the relevance of imperialism to an up-to-date theory of how capitalist profit is realized under monopolistic conditions? A plausible answer might be that monopolistic stagnation at home—monopoly being either cause or consequence of stagnation, depending on whether or not the author in question follows Keynesian reasoning on the subject—acts as a stimulus to seek fresh sources of profit abroad. But to say that monopolistic capital tends to invade foreign countries is to say that it helps to develop them—unless one makes the totally unrealistic assumption that exploitation can permanently be divorced from development. In this fashion, American capitalism—like British capitalism in its time-does in fact bring foreign competitors into being, and it does so of necessity, as part of the process whereby capital overflows national boundaries. If this is a contradiction, it is inherent in the way the system operates, and from a Marxist standpoint there is nothing mysterious about it. The industrialization of the Third World is in fact the only major outlet still open to Western capitalism. Whether it will be undertaken depends on political variables. There is nothing in the inherent logic of the system that forbids it.
In arguing against the possibility of a solution along these lines, the adherents of the Leninist school stress the exploitative character of capitalist investment to the exclusion of other factors, so as to arrive at the picture of a self-perpetuating pattern of neo-colonialization which prevents the effective industrialization of backward countries. Magdoff is a notable practitioner of this mode of reasoning: “The integration of less developed capitalisms into the world market as reliable and continuous suppliers of their natural resources results, with rare exceptions, in a continuous dependency on the centers of monopoly control. . . .”50 Socialist Cuba presumably is an exception, since it combines heavy reliance on sugar production with total dependence on the USSR and its satellites. The other Latin American countries are naturally less well placed, since they depend to a large extent on the United States which, of course, makes all the difference.
In general, integration into the world capitalist market “has almost uniform effects on the supplying countries: 1) they depart from, or never enter, the paths of development that require independence and self-reliance; 2) they lose their economic self-sufficiency and become dependent on exports for their economic viability; 3) their industrial structure becomes adapted to the needs of supplying specialized exports at prices acceptable to the buyers, reducing thereby such flexibility of productive resources as is needed for a diversified and growing economic productivity. The familiar symptom of this process is still seen in Latin America where, despite industrialization efforts and the stimulus of two world wars, well over 90 per cent of most countries’ total exports consists of the export of agricultural and mineral products.”51 And where (it might be added) the ruling cliques or military dictatorships are free to break loose from this pattern if they choose to do so. It is true that they are not free to follow the Cuban example without provoking U.S. intervention, but they cannot be prevented from industrializing, or even from introducing state-controlled economies, as long as they do not align themselves externally with the USSR or China. For the purpose of this particular argument the emergence of national-socialist regimes all over Latin America—run by military technocrats and backed by the national intelligentsia—would be quite enough to undermine the thesis that the colonial pattern of dependence is self-perpetuating and unbreakable. It is nothing of the kind.
As a minor by-product of its dependence on Leninism-Stalinism, the Baran-Sweezy-Magdoff type of argument not only ignores Russian exploitation of Eastern Europe—supposedly liberated and presented with a socialist economy after the military takeover of 1945; it grossly inflates the importance of the cold war—a weakness shared by Kolko and other revisionist historians. This perspective makes no allowance for the basic entente between Moscow and Washington which dates back to Yalta and was kept going all through the years of political rivalry between the two blocs. The ideological frenzy of the 1950’s—reinforced by Stalinist psychopathology on one side and Dullesian drivel on the other—is taken literally by these writers, even though by now their political sympathies are engaged on the side of Cuba and China rather than the USSR. The resulting picture is merely the inverted mirror-image of standard U.S. cold-war literature (now going out of fashion) wherein America was seen to wage a religiously motivated struggle to save the world from the hordes of godless Communism. Standing this familiar nonsense upside down by casting the U.S. in the role of global aggressor results in nothing but further obfuscation.
The actual competition between the two blocs led respectively by Washington and Moscow, and their highly complex relations with the various segments of the Third World, is simplified to the point of absurdity. For good measure, the burden of revolution is cast upon the peasantries of Asia, Africa, and Latin America, who are to take up where the industrial working class—now supposedly integrated into the system—left off. Thus nationalism is identified with socialism, the peasantry with the proletariat, anti-imperialism with anti-capitalism, until all the distinctions painfully elaborated in socialist literature for a century are cast overboard in favor of a simple dichotomy: imperialism versus the starving masses of the Third World. People equipped with this kind of perspective no longer need a theory: practice grows out of populist sloganeering, as power is supposed to grow from gun barrels. Populism indeed is more relevant to Third World politics than Marxism. The fact is undeniable. Its consequences for the underdevelopment of socialist theorizing in the more advanced countries have yet to be faced.
For Marx it was axiomatic that the establishment of socialism would be brought about by the industrial working class in the most advanced and civilized countries of the globe. He did not rule out the possibility of a non-capitalist form of development in Russia, where the ancient village commune had survived into the modern age; but he made it clear that a transition to socialism would depend on help received from the more advanced countries of Europe, where capitalism was already fully developed. Lenin broke with this tradition when he seized power in 1917, on the grounds that Russia represented the “weakest link” in the imperialist chain. He departed further from orthodoxy when in 1923 he envisaged a confrontation between “the counterrevolutionary imperialist West and the revolutionary and nationalist East, between the most civilized countries of the world and the Orientally backward countries which, however, comprise the majority. . . .”
Lenin did not, however, abandon the idea of a worker-peasant alliance which had always been central to his thinking. Russia was to be the link between the Asian peasant and the European or American city-worker. In the Maoist perspective, the notion of such an alliance has been abandoned. In its place there is the vision of Asia, Africa, and Latin America, under Chinese leadership, constituting “the storm center of the world revolution.” This formulation originally arose from a factional dispute between the Russian and Chinese leaderships, but has now acquired the force of dogma, since it has been integrated with Chinese nationalism and China’s claim to world leadership. Its unintended consequences include a growing convergence of U.S. and Soviet policies and an abandonment of cold-war postures which had become habitual while Washington and Moscow were on a collision course in Central Europe and elsewhere. One of the odder side-effects of this realignment is the growing irrelevance of solemn historical tracts seeking to show that the United States rather than the USSR took the initiative in unleashing the cold war in 1947: as if it mattered who fired the first shot in a “war” (fought by proxy) to determine the exact consequences of the 1945 Yalta and Potsdam settlements. The Chinese may be forgiven for taking no interest in this topic. Formosa, Korea, and Vietnam are closer to home. Nor is there any good reason why anyone save professional diplomats should get involved in tedious disputes about the origins of the cold war. What really matters is the Maoist strategy of reliance on the Third World, and the new estimate of the peasantry’s role in the “anti-imperialist struggle.”
Now it should be obvious that whatever successes may be scored by national-revolutionary movements of the Vietnamese type (movements led by “classless” Communist parties drawn from the urban intelligentsia and backed by armed peasants), they cannot defeat or overthrow either capitalism or imperialism as a world system. They cannot do so for the good and sufficient reason that no backward country can reshape the global nexus of relationships which, taken together, constitute the modern world of industrial technology (capitalist, state capitalist, or socialist). At most such countries can contract out and choose their own path of development. The limitations imposed upon them in this respect are fairly evident in the case of Cuba, which has to sell its sugar in a market controlled by the USSR, just as Algeria has to sell its products in a market controlled by France and the other industrial economies of Western Europe. This is not to say that these countries cannot pioneer new forms of development adapted to the role of a peasantry which has rid itself of the old landowning class. What they cannot do is provide a model for more advanced societies. Nor is it the case that these upheavals demonstrate the ability of the peasantry to act as a revolutionary class. What they show is the exact opposite: the need for urban leadership if the peasants are to attain their aims. All successful agrarian uprisings in history have been led by urban elements, and the Chinese revolution is no exception. The fact that a section of the radical intelligentsia emigrated to the countryside, after it had failed to seize power in the industrial towns, does not make its subsequent long march to victory a peasant revolution. All it demonstrates is that a centralized organization with a Communist ideology can survive even in a rural milieu. Since Communist parties are classless, elitist, and quite independent of the industrial proletariat even where they are based on it, this circumstance ought to occasion no surprise. Nor is it surprising that, being patriotic and led by urban intellectuals, the Chinese Communist party should have taken refuge in the populist gospel.
What Maoism affirms is the natural unity of the entire people when rallied around a truly patriotic and classless leadership imbued with the proper convictions and determined to serve the national interest against domestic and foreign enemies. This ideology, which is approximately as old as the hills, has nothing in common with Marxism, but it can be described as populist socialism for want of a better term. People who sponsor such notions may be conservatives or revolutionaries, depending on circumstances not of their making. Chinese revolutionary populism is certainly the most radical doctrine ever preached to peasants by urban intellectuals. Inasmuch as it represents a commitment to “building socialism” in a pre-capitalist and pre-industrial environment, it is likewise in an established tradition: that of the 19th-century Russian narodniki, minus their belief in the providential role of the Slavic peoples, which has survived in the popular Russian understanding of Leninism. Unlike Stalinism, the Chinese version does not rely solely on terror and does not aim at the liquidation of the peasantry as a class. For the rest, it is fully integrated with Chinese nationalism and ethnocentrism. This lends it a powerful appeal and makes it acceptable to the peasantry and indeed to the people as a whole. It also constitutes a reason for not confusing this kind of revolutionary nationalism with authentic socialism.
An attempt must now be made to pull the strands of the argument together. This is not rendered easier by the fact that historical and theoretical considerations tend to get in each other’s way. To take a fairly obvious instance, the term “capitalism” relates to a global system which includes Japan and is therefore not coextensive with “the West,” although for practical purposes the system may currently be said to have its major politico-economic center in the North American area: specifically, in the United States. Again, when one speaks of “imperialism” one may be tempted to look for formally constituted empires held together by military force. In this sense, the two great political alliances which have confronted each other since American and Russian troops first met on the Elbe river in 1945 are “empires” controlled respectively from Washington and Moscow; but this usage, albeit hallowed by tradition, is so vague and sociologically empty as to be meaningless for analytical purposes. If there is an American Empire confronting a Russian Empire, we may as well resign ourselves to the impossibility of saying anything specific about imperialism in the meaning that term acquired, for liberals and socialists alike, during the first half of the present century. The ancient Chinese empire, and the “imperialism” described in Hobson’s tract on the subject, have nothing in common save for the occasional employment of force: too vague and general a criterion for our purpose.
Militarism fares no better. It is as old as history, and so is arms expenditure. As for the notion that present-day monopolistic capitalism, notably in the United States, is kept going by what is popularly known as “the arms economy,” one would like to know why Japanese capitalism has managed to grow three or four times as fast as its American rival while spending only one per cent of the gross national product on arms. There must be something wrong with an argument that leads to such absurd conclusions. It is manifestly the case that there has been an enormous increase in unproductive public expenditure on arms: $120 billion of world spending in one year, according to a United Nations study in 1962, and a great deal more with the further escalation since that date. But the notion that this kind of waste production is burdensome only for a socialist economy, not a capitalist one, is implausible. Individual corporations naturally profit from arms expenditure the end product of which is stored by governments and does not compete with private firms in the market. But the resulting growth in the tax burden, and in the size of the national debt, interferes with normal productive investment, hinders the accumulation of capital, and renders the country in question less competitive in the world market.
Taken to its logical conclusion, the arms-economy argument implies that waste production must be constantly expanded to offset stagnation and to maintain a tolerable level of employment. But in that case no significant capital accumulation would take place any longer and the system would cease to be capitalist; it would be taken over by the state and its further growth would be determined not by profits but by purely political considerations. Quite possibly something of the sort will occur one day, but capitalism will then have come to an end. Under present-day conditions the arms economy acts as a stabilizer only insofar as it does not seriously interfere with productive investment. Hence the argument that militarism can be deduced from the logic of capitalism is invalid. An economy wholly dependent on unproductive and unprofitable public expenditure would no longer be capitalist.52
If it be said that the stagnation of monopolistic capitalism is just what has given rise to the phenomenon of an arms economy—the state is obliged to organize waste production because capital expansion based on profitable investment is insufficient to guarantee employment and stability—then why is this feature so much more pronounced in the United States than elsewhere? The explanation obviously has to do with the arms race and with America’s role within the world economy and the global system of political relations based upon it. But empirical considerations of this sort are extraneous to a theoretical model which deduces the necessity of an ever-growing arms budget from a long-run tendency toward stagnation. Arms production makes for inflationary price rises and is a bar to greater competitiveness, as are “limited” wars against national-revolutionary movements in Asia—quite apart from the fact that they cannot be “won” in any reasonable sense of the term. This is just why the whole issue has become a serious factor in splitting the supposedly united front of the “corporate establishment.”
The only way in which the theoretical model can be linked to the arms race and the cold war is by treating entire nations—notably the U.S. and the USSR—on the analogy of monopolistic competitors in the world market. In the present case, however, the rivals are equipped with nuclear arsenals, a circumstance that eliminates the distinction between politics and economics which was the fundamental presupposition of all previous theorizing. So far from constituting a plausible theory of imperialist competition, this kind of analogy makes it plain that the Leninist model has become unworkable. Imperialist rivalry over spheres of interest is something qualitatively different from a global confrontation in which the very existence of mankind is at stake. Such a situation was not predictable in 1920, just as the ominous possibility of a nuclear showdown between two nominally “Communist” states could not have been foreseen by Lenin and his contemporaries. To describe this state of affairs as “oligopolistic competition between whole economies” is to play with words.53 Insofar as the nuclear blocs compete, their aim is planetary control, not the carving out of influence spheres, an aim still pursued in the traditional manner by the lesser powers. Moreover, the East-West split, which for a while seemed to validate the Leninist schema and its Stalinist successor, is becoming increasingly irrelevant, while the North-South division between the developed countries and the rest, which has replaced it, is inexplicable in Leninist terms, since the USSR—nominally a socialist state—is cast in the role of exploiter of the poor countries. NATO could still be fitted into a Leninst framework if one was willing to accept the Stalinist picture of a world divided between “socialism” and “capitalist imperialism.” The growing détente between Washington and Moscow, and the concurrent worsening of relations between the Soviet Union and China, has made it impossible even for Stalinists to perpetuate this kind of talk. There is no reason why non-Stalinists should oblige them by treating the cold war as the overriding political fact of the post-1945 era, when it was merely an episode in the gradual working out of a Soviet-American partnership based on the tacit acceptance of a divided Europe, and carefully controlled rivalry in Third-World areas. A relationship of this kind does not exclude occasional hostilities, much as the informal (but highly effective) Anglo-Russian entente after the Napoleonic wars did not prevent sharp conflicts over the disposal of the Turkish Empire, on one occasion (in 1853—56) even leading to war. On this analogy, the coming of the nuclear age simply means that such wars are more likely to be fought by proxy.
In practice much of the aforesaid is now recognized by New Left theorists of imperialism and anti-imperialism, which is why attention has increasingly shifted to the North-South antagonism. Incongruous survivals of the earlier Leninist-Stalinist orthodoxy are still encountered among writers who try to make themselves and their readers believe that U.S. foreign policy can be analyzed in terms of capital investment. On this topic it is best to listen to Robert L. Heilbroner, a professional economist who has the additional advantage of being a socialist quite uncommitted to the standard American attitude on the subject of Communist-led revolutions abroad:
Of our roughly $50 billion in overseas investment, some $10 billion are in mining, oil, utility, and manufacturing facilities in Latin America, some $4 billion in Asia including the Near East, and about $2 billion in Africa. To lose these assets would deal a heavy blow to a number of large corporations, particularly in oil, and would cost the nation as a whole the loss of some $3 to 4 billion a year in earnings from those areas. A Marxist might conclude that the economic interests of a capitalist nation would find such a prospective loss insupportable, and that it would be “forced” to go to war. I do not think this is a warranted assumption, although it is undoubtedly a risk. Against a Gross National Product that is approaching ¾ of a trillion dollars and with corporate assets over $1.3 trillion, the loss of even the whole $16 billion in the vulnerable areas should be manageable economically. Whether such a takeover could be resisted politically—that is, whether the red flag of Communism could be successfully waved by the corporate interests—is another question.54
It is interesting that even so well-informed and sophisticated a writer as Heilbroner should credit the Marxist school indiscriminately with the kind of reasoning about the decisive role of investment in backward areas which Lenin inherited from the laissez-faire liberal Hobson. Contemporary Marxists are more likely to interest themselves in the hegemonial role of U.S. capital within the North Atlantic area than in populist fantasies about the corporations going to war to save their assets in the Philippines.55
The real question is not whether the U.S. economy can survive the loss of corporate investments in politically unstable areas—it can and will—but what the capital flow is doing to the development of backward countries. On this issue laissez-faire apologists of “free” unregulated capitalism have traditionally had to battle on two fronts: against socialists on the Left and nationalists on the Right. The failure to recognize this has been among the major weaknesses of the Marxist school. Hence in part the Comintern’s inability to understand fascism, and the bewilderment of orthodox Stalinists in Cuba when faced with Castro’s victorious movement in 1959.
Generally speaking, liberals and Marxists alike have been very bad at understanding what nationalism is about. What little there is to be found in Leninist literature on the subject of national-revolutionary movements does not make up for this lacuna, the less so since Leninists seem congenitally unable to admit that the decisive stratum is not the so-called national bourgeoisie (which hardly exists anywhere during the pre-industrial stage), but the intelligentsia. It is the latter, at the head of the proletariat or the peasantry, which makes up the core of all revolutionary movements in backward countries. It is the intelligentsia which decides whether the modernization drive shall take place under Communist, fascist, pseudo-socialist, or straightforward nationalist slogans. And it is the intelligentsia—civilian or military, in any case urban and classless—which seizes power. Having done so it establishes a dictatorship, normally in the form of the one-party state, and imposes modernization on the masses of workers and peasants—in the name of the people, of course. It does so through the agency of state power. If necessary it employs the state to liquidate entire classes, as in Russia under Stalin. In the process of course it has to turn itself into a bureaucracy, which is why its roots in the old pre-revolutionary intelligentsia tend to be overlooked. But it is still the same elitist strategy that imposes the “revolution from above” upon the masses, even if the old revolutionary vanguard is exterminated by a totalitarian state party, itself both product and prime agent of the modernization process. The latter, needless to say, subjects workers and peasants alike to an industrial discipline indistinguishable from that of capitalism, but it does so under conditions where the economic surplus is administered by a political bureaucracy responsible only to itself. This is where nationalism comes in, for the fusion of socialism with patriotism in the ideology of the radical intelligentsia and its successor, the state bureaucracy, is rendered plausible by the fact that industrial modernization appears as the precondition of national survival. A party which knows how to seize the leadership of this kind of national-revolutionary movement cannot in the long run be defeated, short of the physical destruction of the country inhabited by the population under its control.
This is not to say that such movements are bound to spring up everywhere. They may fail to emerge, in which case the society simply goes on stagnating at a pre-industrial level. This fate is probably in store for a number of undeveloped countries, a circumstance which lends an edge of desperation to their internal politics. There is no supra-historical law which decrees that all backward countries must witness a victorious revolution or some other break with traditional stagnation and poverty. They may fail and rot. What they cannot do is have it both ways: modernize without destroying their ancient pre-industrial customs and institutions. If this destruction is not undertaken by the Communist party, then it must be pushed through by some other agency willing and able to effect a radical break with the past. In the absence of such a rupture, the country can go on existing as a subsidiary part of some global system which one may term “imperial” if one is so minded; but it cannot raise itself to the level of the advanced industrial nations—capitalist or socialist. This is now fairly well understood. What is not always understood is the fact that in such an environment, and faced with such tasks, Communism—or Marxism-Leninism, to give it its official label—ceases to be the theory of anything worth being called a workers’ movement. It becomes the ideology of an elitist avant-garde drawn from the intelligentsia.
The essentials of the matter are best understood if one abstracts from special cases such as Japan’s successful modernization along capitalist lines in the later 19th and early 20th century. Some features of this experience are indeed of general interest. Thus anyone looking for evidence that national sovereignty is a precondition of successful all-round development need only compare Japan’s brilliant record with India’s miserable stagnation. The same applies to the usefulness of foreign investments. Japan managed very well without them, and indeed may have owed its economic salvation after 1870 to the fact that it succeeded in keeping them out. Nonetheless, it will not do to treat national sovereignty and economic protectionism as a sufficient explanation. They were essential preconditions, no more. The opportunity still had to be grasped. Here again there is no universal rule to be invoked. Europe, Asia, and Latin America are littered with independent nation-states which somehow missed the boat or—like Germany—committed national suicide despite a highly successful industrial and scientific development. There is no guarantee that modernization will produce political stability, democracy, socialism, or anything else. There is only the certainty that without economic development the society will reproduce all those super-structural features which rendered it poor and backward to begin with. This is particularly the case in regions where population presses on land and other national resources. A country like India, whose population is expected to double by the end of the century, is confronted with problems for which liberalism has no solution. Unless the peasant masses can be dragged out of their lethargy by a social revolution which breaks the stagnation of village life and frees them from, their ancient superstitions, the prospect is one of increasing misery.56
India’s economic problems cannot sensibly be discussed in abstraction from the wider issues of social conservatism, rural backwardness and ignorance, official incompetence, and political weakness at the center. But even in the narrowest economic terms it is evident that present policies have failed to break the vicious circle of poverty-stagnation-population-growth-increasing misery which has turned cities like Calcutta into cesspools and threatens to promote a gigantic catastrophe before the end of the century. In this context, foreign aid is a relatively minor topic—certainly when compared with the Congress party’s failure since independence in 1947 to destroy the caste system, kill the cows, and get the exploding birth-rate under control. Quite clearly, such things can only be done by a dictatorship, and even a Communist dictatorship may shrink from them, in which case the Malthusian “solution” is likely to take the form of man-made famines on an enormous scale.
Stalin broke the Russian peasantry. The Indian peasantry is going to be harder to break and there is no Indian Stalin in sight. Nor would such an apparition necessarily be welcome even to Communists, most of whom would probably be liquidated by the apparat along with the peasants and their cows. It is only when one considers the liberal-democratic, or populist and pseudo-socialist, alternatives that the need for an “iron surgeon” begins to suggest itself. Populism—in practice meaning cottage industries and agricultural development, instead of lopsided emphasis on industry—could probably be made to work if it were not for the caste system and the population explosion. Laissez-faire under Indian conditions is merely a bad joke: in practice it resolves itself into waste production and the importation of useless luxury goods for a parasitic middle class of bureaucrats and non-entrepreneurs. Industrialization—even if its pace could be speeded up by a renovated state bureaucracy purged of parasites—would do nothing to raise the productivity of farm labor which is the precondition of everything else.
As for foreign aid, its net effect has been negligible, even though in the two decades after 1947 India received, in cash or in kind, the equivalent of $11 billion.57 All of which confirms the gloomy analysis by professional economists like Myrdal and Heilbroner: either there is a politically directed breakthrough in the decisive sector, that of agriculture, or industrialization will get stuck. Nor can the breakthrough limit itself to tinkering with new crops. Unless the village population as a whole is dragged out of its customary way of life, increased productivity will only benefit a small minority of the better-off peasants at the expense of the remainder. The disruption of the ancient subsistence economy, and its replacement by a market-oriented network of commercial transactions, benefits only those who already possess enough initial capital to climb onto the ladder of “rising expectations” that liberal writers of the Galbraithian school never stop celebrating. Meanwhile, the rural proletariat is driven to the towns, where it forms huge agglomerations of stagnant misery. Insofar as Western aid speeds this process, it is counter-productive, for the effect is to promote a total rejection of the entire system. This is now happening over large areas of Asia and Latin America, and it is beginning to happen in Africa. Hence the identification of capitalism with imperialism still makes sense to intellectuals who wish to save the village community, or alternatively to use its disintegration for the purpose of unleashing a revolutionary movement against domestic and foreign exploiters.58
Some of the probable consequences of this process were perceived by the Communist International as early as the 1920’s, when the Russian Revolution was deliberately projected as an alternative model of development. What ruined the parties directed by the Comintern was their obstinate attachment to the Leninist-Stalinist dogma that the revolutionary movement must take place under the leadership of the industrial working class, or anyway of a party based upon that class (though in practice independent of it by virtue of its centralized structure). It was only after the local Communists, or some of them, had got rid of this ludicrous idée fixe that they were able to make headway. By now the realization that only the intelligentsia can undertake a radical reorganization of society in backward countries is widely enough accepted, at any rate in practice, for Communist parties to have become effective competitors of their fascist rivals who otherwise would have had the field to themselves: as they did in Italy and Germany during the 1920’s and 1930’s, when the Communists heroically stuck to their archaic faith in the proletariat and were wiped out in consequence.
In this context it is important to note that leadership of Communist parties by intellectuals is not the main issue. Such leaderships existed even when the parties in question held slavishly to their belief in the “leading role” of the working class. The real break came when the intelligentsia as a group acquired an awareness of its own role and ceased to apologize for its existence. Once this had occurred, Communism could become the political faith of the only stratum capable of giving political leadership to the masses in town and country. The “vanguard” concept helped to still uneasy consciences, since it was explained that the party acted as the spearhead of the mass movement, as indeed it did. The only trouble was that the extreme Right could likewise throw up a vanguard of classless intellectuals, committed to radical nationalism minus Marxism-Leninism. Then the only remaining question was which party stood a better chance of getting the national-revolutionary movement under way.
The probability of such an internal fissure arises from the nature of the anti-imperialist movement itself. Since in a backward country all classes of the population, with the exception of a thin oligarchic stratum and a few merchants, feel cheated and exploited by foreigners, it is fatally easy to work up a head of steam behind any nationalist movement that promises to end this state of affairs. Such movements may be, and quite often are, National-Socialist rather than Communist in orientation. Moreover, Communism is now itself split among Moscow-oriented parties which cling to the Leninist idea of a worker-peasant alliance, Maoist groups which aim at the poorer peasantry, Castroite preachers of guerrilla warfare, and Trotskyist believers in the industrial proletariat. The last-named can draw some encouragement from Syndicalist traditions in Western Europe and Latin America, but are unimportant elsewhere. All concerned operate with a questionable distinction between oligarchic allies of imperialism and a “national bourgeoisie” supposedly committed to industrialization and political independence. The distinction looks more satisfying on paper than in reality, where the “national bourgeoisie” commonly turns out to be either nonexistent or to consist of a handful of ideologues, in or out of uniform. The latter can with the greatest of ease be induced to style themselves socialists, much to the alarm of American investors unfamiliar with Saint-Simonism and unaware that “socialism” has become the universal faith of virtually all thinking people in poor countries.
The only constant element in all this flux is the appeal made by all the competing groups to the intelligentsia. In a sense this is also true of the situation in Western society, with the difference that here the central issue is not “development” but full employment. Moreover, an alliance between a mature industrial working class and the new technical intelligentsia, plus other white-collar groups, is something quite different from the typical populist symbiosis of an unemployed urban intelligentsia and an impoverished peasantry. It is only the latter combination that gives rise to the phenomenon of anti-imperialism in general and Maoism in particular, for it is only in poor and undeveloped countries that “socialism” can come to stand for resistance to foreign oppression and exploitation.59
One may legitimately dispute the Leninist argument that it is only monopolistic capitalism which holds back the all-round development of the Third World.59 That it does so is undeniable, though there are other factors too on which Leninists prefer not to dwell—peasant conservatism, for instance, and the problem of accumulating capital within the agricultural sector for investment in industry. Stagnation was the normal condition of most cultures until the Industrial Revolution made its appearance. The real question is not whether capitalism exploits the undeveloped countries—of course it does, and always has—but why it has not done more to revolutionize them through the very mechanism of exploitation. We have already seen that Marx overrated the impact of British industry on India at the very peak of the free-trade era, long before monopolism made its appearance. Even then capital typically flowed to lands of European settlement—North America above all—while colonial investment went largely into a few extractive industries. The technological “spin-off” from such investments, plus railway building (Lenin’s favorite yardstick) was insufficient to generate anything like a genuine breakthrough, if one excepts the case of Japan where there was no direct foreign investment, albeit plenty of indirect external pressure. In short, the pattern has not really changed in recent decades. Western society never did export the Industrial Revolution to genuinely backward areas, as distinct from lands of white European settlement. The old stagnant cultures were not revolutionized. If they did not pull themselves up by their own bootstraps in the Japanese fashion, they went on stagnating whether or not they were nominally independent.
Nor is there any good reason to believe that the Soviet model—which for practical purposes means the Stalinist model—can be successfully exported to the Third World. It is true that the Russian Communist party had to struggle with pre-capitalist social relations, and to that extent acquired an understanding of some problems which Russia shared with Asia. But Czarist Russia was already launched much further along the path of industrial development than any of the authentically poor countries in the undeveloped world, and the Russian autocracy supplied a ready-made instrument for Stalin’s “revolution from above”: the massive machinery of a state power which had survived the revolution practically unchanged and possessed long experience of dealing with workers and peasants. This bureaucracy could liquidate the peasant small-holder once it had been given orders to do so. It is unlikely that any other state machine could have smashed the peasantry as thoroughly as it did in the 1930’s, herding the bulk into collectives and shipping all recalcitrant elements off to labor camps. It is even more unlikely that the Stalinist experience will be repeated in the genuinely poor countries.
What may reasonably be expected is a growth of Maoist tendencies linked to an anti-imperialist ideology which identifies imperialism both with the West and with the Soviet Union. The likelihood of this happening arises from the growing disparity between development rates and expectations along the North-South axis which has begun to replace the East-West pattern of the cold war. The ideological counterpart of this split, as noted before, is the growth of populism. This may take a variety of forms—there is a fascist version of populism, which for a time was remarkably effective in Southern Europe and Latin America alike—but on the whole it seems probable that most national-revolutionary movements in the Third World will adopt Maoist variants of populism. The Leninist version is better adapted to the needs of urban workers and intellectuals who have already crossed the threshold of industrialization. For the same reason it is handicapped in competition with movements which openly bank upon the peasantry.
As noted before, all forms of populism have in common the belief that the ethnic community is essentially classless, or would be so were it not for domestic or foreign interference. Inasmuch as the impact of capitalism produces strains within an agrarian economy centered upon the small farmer, capitalism appears as the enemy of ethnic or tribal solidarity. This is the rationale of African socialism and similarly structured movements in the Third World. While clearly unscientific, such beliefs express a felt loyalty to the ethnic community which may be labeled “nationalism” or “socialism,” whichever term one prefers. The point is that populists experience their faith as an adherence to ancestral values and as a protest against the disintegration typically entailed by the capitalist form of modernization. In consequence, nationalism tends to be identified by them with socialism, anti-capitalism with anti-imperialism. This sentiment comes about quite spontaneously as a response to the dislocation of the primitive community. Since the West is generally seen as the prime agent of this disintegration, populism normally assumes an anti-Western slant; and since it can plausibly be held that Western capital holds back the all-round development of backward countries in the interest of corporate monopolies, the anti-imperialist line of reasoning can likewise be adopted by groups or parties which are in effect committed to radical modernization and the destruction of the ancient ethnic solidarity of the community or the clan. Populist socialism kills two birds with one stone. It casts itself in the role of defender of the ancient classless community before the coming of capitalism, and it also blames imperialist monopoly capital for holding up the process of development which—if it were to take place—would explode the myth of classlessness. Hence it is a waste of time arguing with populists. They are typically able to hold contradictory beliefs with complete sincerity, and since in their terminology “the people” equals “the proletariat,” no one is ever going to argue them out of their conviction that nationalism and socialism are identical.60
The combination of agrarian populism and radical nationalism makes up the sum and substance of the faith generally known as Maoism. From being in its origins connected with the Leninist version of Marxism, it has developed into a creed adapted to the reality of pre-capitalist societies which had never known genuine class conflict and are currently exposed to the impact of industrialization in its Western (capitalist) or Eastern (state socialist) form. These societies are overwhelmingly poor and equally overwhelmingly agrarian. In their majority they are separated from the West, and from the Soviet Union, by racial as well as by socio-economic cleavages and antagonisms. Since they are not riven by class antagonism in the form experienced by all advanced industrial countries, they experience the stresses of industrialization as a challenge to the whole community assembled around the infallible party or the infallible leader. The resulting political system corresponds to the expectations of some 19th-century Russian narodniki rather than to anything anticipated by the Marxists. It is perfectly viable until it is disintegrated by the very modernization process which the party intends to control. Liberalism and Marxism are equally beyond the horizon of individuals living within a structure of this kind. For the same reason, nothing that the U.S. or the USSR says or does is likely to have the smallest impact upon the minds of people committed to the belief that the self-emancipation of the peasantry will bring socialism in its train.
In the ideology of Maoism, China figures as a “proletarian nation” menaced by Western imperialism and Soviet “social imperialism” alike. The idea of the “proletarian nation” was originally worked out by the Italian fascists, and by their Syndicalist predecessors before 1914, to account for Italy’s poverty. It was abandoned when fascism had failed and Italy had ceased to be poor. Conceivably a time will come when China feels able to get on without Maoism, but the industrialization of so vast and poverty-stricken a country is not comparable to the stresses undergone by any European nation, nor was nuclear war then a possibility on the horizon. The scale on which events have shaped themselves has dwarfed the dimensions of what in Leninist parlance still figures as the age of imperialism. It is not only the capitalist nexus that threatens to involve mankind in global war. The transformation of Asia, by whatever means undertaken, must alter the world balance of power, and experience suggests that major shifts of this kind are rarely if ever accomplished peacefully.
The following is a list of corrections of errors which occurred in Part I of this essay (April):
Page 47, column 1, line 46: for “uncouth Greeks” read “uncouth Germans.”
Page 65, column 1, line 36: for “power processess” read “newer processes.”
Page 65, column 3, lines 32 and 33: for “The world economy was policed by British capital exports” read “. . . policed by the British navy and fed by British capital exports.”
Page 70, column 1, line 25: for “a coming slowdown” read “a coming showdown.”
Page 70, column 2, line 28: for “course” read “cause.”
1 For the theoretical background of such utterances, see Paul E. Baran, The Political Economy of Growth (Monthly Review Press, 1957), passim; Paul A. Baran and Paul M. Sweezy, Monopoly Capital (Monthly Review Press, 1966; Penguin Books, 1968), passim; Harry Magdoff, The Age of Imperialism: The Economics of U.S. Foreign Policy (Monthly Review Press, 1966, 1968), passim.
2 For a new edition, see V. I. Lenin, Selected Works (Progress Publishers, 1967), vol. 1, pp. 675 ff. The pamphlet was passed by the Czarist censor in 1916 and printed legally before the February Revolution of 1917. The preface dated “Petrograd, April 26, 1917” draws attention to this fact, and also asks the reader to “substitute Russia for Japan, and Finland, Poland, Courland, the Ukraine, Khiva, Bokhara, Estonia, or other regions peopled by non-Great Russians, for Korea”—Japan's annexation of Korea having been mentioned in the text as an example of imperialist annexation, so as not to alarm the censor. Mention of the Ukraine must have set some readers wondering about the relevance of Lenin's analysis of modern monopoly capitalism to earlier and more primitive forms of territorial annexation. For Rosa Luxemburg's theory of imperialism, see The Accumulation of Capital (Routledge, 1951), with an Introduction by Joan Robinson. For the general theme see, among others, Paul M. Sweezy, The Theory of Capitalist Development (Oxford University Press, 1942; Dennis Dobson, 1946, 1949), pp. 190 ff., 202 ff., 254 ff. There is no point in going into Rosa Luxemburg's theory, since Lenin paid no attention to it, basing himself instead on J. A. Hobson and on Rudolf Hilferding's great work Das Finanzkapital (Vienna, 1910; Moscow, 1912). See also N. Bukharin, Der Imperialismus und die Akkumulation des Kapitals (Verlag für Literatur und Politik, 1926).
3 J. A. Hobson, Imperialism: A Study (first published in 1902; revised edition, Allen & Unwin, 1948), p. 106.
4 Lenin, op. cit., p. 742.
5 Ibid., pp. 768 ff.
6 Ibid., p. 770.
7 Ibid., p. 740.
8 Lenin, “The War and Russian Social-Democracy,” first published on November 1, 1914, in Sotsial-Democrat No. 33; reprinted in Selected Works, vol. I, pp. 657 ff; see also Collected Works, vol. XXI. The article concludes with the words: “Long live the international fraternity of the workers against the chauvinism and patriotism of the bourgeoisie of all countries! Long live a proletarian International, freed from opportunism!” No mention of the peasantry, then as ever the principal reservoir of “bourgeois” patriotism.
9 Selected Works, vol. I, p. 679.
10 Ibid., p. 680.
11 Marx-Engels, Werke (East Berlin, 1962, 1963), vol 17, pp. 271 ff.; vol. 22, pp. 30 ff. See in particular Engels's detailed forecast in the article he published in Kautsky's Neue Zeit of May 1890 where he wrote: “The German annexation turns France into Russia's ally against Germany, the Czarist threat to Constantinople turns Austria, even Italy, into allies of Germany. Both sides prepare themselves for a decisive struggle, a war such as the world has never seen, a war in which ten or fifteen million combatants will oppose each other in arms. Only two factors have until now prevented the outbreak of this terrible conflict: the unprecedented progress in arms technology, which supersedes every new rifle model by new inventions before even one army can introduce it; and secondly, the absolute incalculability of the chances, the total uncertainty as to who will finally emerge victorious from this gigantic struggle, This whole danger of world war will disappear on the day when a change of affairs in Russia enables the Russian people to terminate the traditional annexationist policy of its Czars, and to concern itself with its own highly endangered vital interests, instead of pursuing fantasies of world domination.” Loc. cit., p. 45.
12 Lenin, op. cit., pp. 680—81.
13 Ibid., p. 683.
14 Lenin, “Better fewer, but better,” in Selected Works, vol. III, p. 785. See also Collected Works, vol. XXXIII.
15 For documentation on the later and more dramatic phase of the Sino-Soviet dispute, see the special issue of Studies in Comparative Communism (University of Southern California, July-October 1969); for the historical and theoretical background see Hélène Carrère d'Encausse and Stuart R. Schram, Marxism and Asia (Allen Lane, 1969), especially pp. 317 ff. Also Stuart R. Schram, The Political Thought of Mao Tse-tung (first edition, Praeger, 1963; revised edition, Penguin Books, 1969). The dichotomy of socialism-imperialism, with the Soviet Union and the Communist movement representing the former, is particularly marked in such utterances as Mao's congratulatory oration “Stalin is our commander,” originally a birthday tribute in December 1939, but still published a decade later after the Chinese revolution had carried the Communist party to power. See Schram, op. cit., pp. 426—27: “On the one side is imperialism which represents the front of the oppressors. On the other side is socialism, which represents the front of resistance to oppression.” For all its naiveté, this formulation was still rooted in that aspect of the Leninist inheritance which enabled Mao to identify nationalism with anti-imperialism, and both with socialism. In 1939 Stalin was hailed as “the savior of all the oppressed.” Three decades later his heirs in the Kremlin had come to rank as imperialists and allies of the United States.
16 Sweezy, The Theory of Capitalist Development, p. 329.
17 Ibid., p. 333.
18 Hobson, op. cit., pp. 81—83.
19 Michael Barratt Brown, After Imperialism (Heinemann, 1963), p. 96. This argument cannot be countered by dwelling on the super-profits of oil monopolies and capitalist investments in mines or plantations. Hobson had quite specifically asserted that the economic drive behind imperialism was the relative shrinkage of domestic markets for consumer goods. The implication was that such markets could be built up in the dependent tropical empire, whereas in fact they existed and expanded in the white-settler “dominions” which also became a major outlet for British capital investment.
21 Ibid., p. 101; see also p. 99: “It is true that by 1913 nearly a tenth of the national income was accounted for by payments received from overseas investments . . . and this formed perhaps a quarter of all property incomes. Only about a sixth of this could, however, be said to come from India and the other dependent colonies; the very much greater part came . . . from the other developing industrial lands, the United States, European countries, and the independent British dominions.”
21 Ibid., p. 121.
22 Gabriel Kolko, The Politics of War: Allied Diplomacy and the World Crisis of 1943—1945 (Weidenfeld & Nicolson, 1969), pp. 242 ff., 280 ff. This learned work is more useful for its assessment of U.S. economic policy than for its rather uncertain treatment of European affairs, a topic that demands a different approach. Where Kolko scores is in analyzing the Anglo-American relationship, which was one of fundamental rivalry overlaid by the necessities of wartime cooperation: in this respect resembling the Anglo-Dutch alliance of an earlier era, with the weaker partner inevitably winding up in the role of satellite.
23 See Jonathan Steinberg, “The Kaiser's Navy and German Society,” Past and Present No. 28, July 1964, p. 103: “The first, and most disagreeable, of these insights for German historians must be that the imperial Navy failed to accomplish its objectives in war; the second that it contributed more than any other German organization to the disruption of the peace before 1914; the third that both its failure in war and its behavior in peace reflected the values, attitudes, and ideas of the German middle class, the class to which the great majority of historians belong.” In fact, the whole enterprise was largely irrational and promoted by Pan-German fantasies which had seized hold of the German middle class in the Bismarck era, and were then taken up and promoted by Wilhelm II and his advisers as a means of providing the monarchy with a popular following. See Harmut Pogge von Strandmann, “Domestic Origins of Germany's Colonial Expansion under Bismarck,” Past and Present No. 42, February 1969, pp. 140 ff. Similar considerations apply to the frequently irrational, not to say lunatic, behavior of the Japanese military and naval leaders between 1931 and 1941.
24 Luxemburg, op. cit., p. 387.
25 Ibid., p. 419.
26 Ibid., p. 446; see also the note on Schmoller on pp. 295—96.
27 See J. A. Schumpeter, “John Maynard Keynes,” in Ten Great Economists: From Marx to Keynes (Allen & Unwin, 1952). For the standard liberal treatment of the topic, see Robert Lekachman, The Age of Keynes (Random House, 1967). The author does not fail to note that the age of Keynes was also the age of Lytton Strachey, but it is possible to feel that he gives insufficient weight to the fact. See also Lekachman, ed., Keynes and the Classics (D. C. Heath, 1964); Michael Stewart, Keynes and After (Penguin, 1967).
28 First published under the title “Zur Soziologie der Imperialismen ” in vol. 46 of the Archiv für Sozialwissenschaft und Sozialpolitik in 1919, issued in book form the same year, and now available in an English translation, in P.M. Sweezy, ed., Imperialism and Social Classes (Blackwell, 1951), together with a later essay on social classes, likewise published in the Archiv (vol. 57, 1927) of which Schumpeter had by then become an editor. The theme of the second essay had been outlined by Schumpeter as early as 1910—11, and was later presented by him at Columbia University in lecture form in 1913—14. Both essays can be regarded as contributions to a discussion which, in Austria anyway, had been initiated by the Marxist school, whereas in Britain it dated back to the Boer War of 1899—1902, Chamberlain's protectionist campaign, and Hobson's restatement of classical liberalism.
29 “Imperialism and Capitalism,” in Imperialism and Social Classes, pp. 122—28.
30 Ibid., p. 99.
31 Ibid., p. 101.
32 Ibid., p. 100.
33 Ibid., p. 104.
34 Ibid., p. 105.
35 Ibid., p. 84.
36 Ibid., p. 115.
37 F. L. Carsten, The Rise of Fascism (Batsford, 1967), passim.
38 For a brief discussion of this topic, see Paul M. Sweezy, “Obstacles to Economic Development,” in Socialism, Capitalism and Economic Growth: Essays presented to Maurice Dobb, C. H. Feinstein, ed. (Cambridge University Press, 1967), pp. 191—97; also Paul A. Baran and P. M. Sweezy, Monopoly Capital; P. A. Baran, The Political Economy of Growth; H. Magdoff, The Age of Imperialism; Peter Worsley, The Third World (University of Chicago Press, 1964). For liberal and Fabian discussions of the topic, see W. Arthur Lewis, The Theory of Economic Growth (Unwin University Books, 1963); Hla Myint, The Economics of the Developing Countries (Praeger, 1965); Gunnar Myrdal, Challenge to Affluence (Vintage Books, 1965); Asian Drama: An Inquiry into the Poverty of Nations, 3 vols. (Pantheon, 1968); International Economy (Harper & Row, 1956); Thomas Balogh, The Economics of Poverty (Weidenfeld & Nicolson, 1955—66). For a Trotskyist analysis, see Michael Kidron, Western Capitalism Since the War (Weidenfeld & Nicolson, 1968). Earlier academic writings worth consulting include K. Mandelbaum, The Industrialization of Backward Areas (Blackwell, 1945) and the collection of essays entitled The Progress of Underdeveloped Areas, B. F. Hoselitz, ed. (University of Chicago Press, 1952).
39 E.g., W. W. Rostow, The Stages of Economic Growth (Cambridge University Press, 1960); for a Fabian contribution to post-Imperial British writing, see John Strachey, The End of Empire (Gollancz, 1959).
40 Marx, Capital, vol. III, ch. 15 (cited after the Moscow 1959 edition, p. 245).
41 “Future Results of British Rule in India,” first published in the New York Daily Tribune, August 8, 1853; see S. Avineri, ed., Karl Marx on Colonialism and Modernization, p. 125. In the same article, the introduction of private property in land is described as “the great desideratum of Asiatic society.”
42 Ibid., pp. 127—130.
43 Ibid., p. 131.
44 A. M. MacBriar, Fabian Socialism and English Politics (Cambridge University Press, 1962, 1966), pp. 119 ff; Bernard Semmel, Imperialism and Social Reform: English Social Imperialist Thought, 1895—1914 (Allen & Unwin, 1960), pp. 128 ff., 166 ff., 234 ff.
45 Barratt Brown, op. cit., p. 65.
46 Ibid., p. 71.
47 Ibid., p. 206.
48 For background, see Tang Tsou, America's Failure in China 1941—50, vol. 2 (University of Chicago Press, 1963). The author makes the interesting point (p. 478) that the China Aid Act of April 1948, which was supposed to put the moribund Chiang Kai-shek government on its feet, “brought about the most widespread and outspoken anti-American movement up to that time. This anti-American sentiment originated in the commonly held belief that Chiang was leading the country to ruin and that he could not do so without American support.” Nationalist and populist sentiments of this kind flowed into Maoist channels for reasons having very little to do with class conflict, as that term is understood by Marxists.
49 Baran, op. cit., pp. 151 ff.
50 Magdoff, op. cit., p. 197.
51 Ibid. Magdoff also has a subsidiary line of reasoning which relies upon the financial drain imposed by foreign investment; see p. 198: between 1950 and 1965 the flow of direct investment from the U.S. to Latin America totalled only $3.8 billion, whereas income on capital transferred to the United States came to $11.3 billion, a surplus of $7.5 billion in favor of the U.S. The corresponding figures for Europe are $8.1 billion in U.S. investment and a mere $5.5 billion in profits transferred back. The implication is that Western Europe on balance gained from American investment, whereas Latin America was a net loser. Profit rates were in fact higher in Latin America (and in the Middle East) because investments were concentrated in oil and certain minerals, and because production costs were lower than in Europe. But this merely underscores the familiar fact that “uneven development” is a source of surplus profit for the advanced countries (including the USSR). It does not prove that no development takes place, merely than an extra price is paid for it during the critical transition period. If it be argued that development is permanently confined to a few extractive industries, then the countries in question cannot become important markets for U.S. exports. Yet the stagnation-via-monopoly thesis makes no sense unless it implies that foreign markets—as well as raw material sources—are needed to keep the system in balance.
52 Arms expenditure as an economic stabilizer is invoked by Kidron, Western Capitalism Since the War, pp. 38 ff. There are of course empirical grounds for stating that this kind of waste production is less bothersome from the standpoint of business corporations than public outlay on products (e.g., houses) that appear in the market and compete with private industry. But arms still have to be paid for out of taxes, and unproductive expenditure undertaken for political purposes—social stability, or defense against presumed foreign enemies—reduces the profitability of normal investments in the private sector. In a wholly state-controlled economy such as that of the USSR, the basic irrationality of arms expenditure—or space exploration, for that matter—translates itself immediately into a lower growth rate. Under capitalism the same result is achieved in a roundabout way, through inflation and the growth of the national debt.
53 Ibid., p. 25.
54 Robert L. Heilbroner, “Counterrevolutionary America,” in Irving Howe, ed., A Dissenter's Guide to Foreign Policy (Anchor Books, 1968), pp. 254—55. The author notes that “the total consumption of energy of all kinds [in terms of coal equivalent] for Afghanistan, Bolivia, Brazil, Burma, Ceylon, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Ethiopia, Guatemala, Haiti, Honduras, India, Indonesia, Iran, Iraq, Korea, Lebanon, Nicaragua, Pakistan, Paraguay, Peru, Philippines, the UAR, Uruguay, and Venezeula is less than that annually consumed by West Germany alone” (p. 254).
55 See Barratt Brown, op. cit., p. 369: “Canada has become the one land to be industrialized with United States capital, but with the result that at least a third of Canada's industry is now owned by United States companies.”
56 Gunnar Myrdal, “Economic Development in the Backward Countries,” in Howe, ed., A Dissenter's Guide, pp. 195 ff.
57 Herbert Feldman, “Aid as Imperialism?,” International Affairs (Chatham House, April 1967, vol. 43, no. 2). What is true of India applies in most respects also to Pakistan, where in 1966 the Federation of Chambers of Commerce and Industry complained that the country's industry was “heavily dependent on imports,” and that foreign “aid” was mostly designed to provide a lucrative market for the donor countries. The problem is common to all developing countries, dependent and independent alike. This is just why it still makes sense to speak of “imperialism”—provided one does not restrict the use of the term to one side in the cold war.
58 The pacifist variant supplies the rationale of Indian populist socialism. See Asoka Mehta, “Can India Industrialize Democratically?” (Dissent, Spring and Summer issues, 1955; reprinted in Voices of Dissent, Grove Press, 1958, pp. 253 ff.): “In the peasant sector of the economy, land distribution, village-oriented economy and voluntary labor for rural public works would provide opportunities for full employment. In handicrafts, better tools, adequate raw materials, cooperatives for credit and marketing, and protection against developed industries would provide increased and secure employment.” All very well if it were not for the time factor, the swelling numbers of rural unemployed, and the impossibility of effecting land distribution on a really impressive scale under a political system which privileges the landlord and the money-lender. For the political consequences, see M. Watnick, “The Appeal of Communism to the Underdeveloped Peoples,” in Hoselitz, ed., The Progress of Underdeveloped Areas.
59 For a brief exposition of this thesis, see Oskar Lange, Economic Development, Planning, and International Cooperation. (Monthly Review Press, 1963).
60 Nigel Harris, Beliefs in Society (C. A. Watts, 1968), pp. 186 ff.