By Hari Kumar, Red Phoenix international correspondent.
As Engels noted: “Everything moves, changes, comes into being and passes away.”
Imperialism has changed in form over the years. For example, the form may vary by the relative positions of the great powers. Even though the content of the exploitation of the colonial, or dependent, parts of the world has not changed. However the metropolitan leading imperialists extract their super-profits may differ, that exploitation remains the fulcrum of the relationship between imperialist and dependent nations.
Marxist-Leninists recognized the changing nature of imperialism. Lenin pointed out that the top-dog dominant nations of imperialism would inevitably change as powers jostled against each other. Stalin rejected the notion that inter-capitalist wars had ended after the end of the Second World War.
This article aims to outline some key changes that imperialism has undergone. The most recent moves of these involve a reshaping of world alliances such as BRICS. Understanding these changes enables Marxist-Leninists to gauge the relevance to their own struggle, of the conflicts between the international capitalist rivals.
The first anniversary of the Russian annexationist attack on Ukraine was on Sunday, February 26, 2023. So far this war has already had dire consequences on the toilers of both Ukraine and Russia. It is still too early to clearly see how it will end. However in the short term – after all the posturing stops – it is very likely that there will be a series of negotiated peace.
This will probably result in the Crimea staying within Russian national control, but it is unlikely to involve further territorial concessions, as for example in the Donbass. Most probably the accession of Ukraine to the European Union and NATO will be enshrined there; while the Crimea, following de-facto presence on the ground, will remain with Russia. However we await events.
Regardless of those details, already some outlines of an emerging, renewed inter-imperialist struggle are becoming evident. Whatever the fate of Ukraine and Crimea, the current war is only the start of ongoing heightened confrontations between two major blocs of nations.
That move towards a new world war of re-division is no longer in a distant future. We should rather view it as already begun. Russia’s intervention in Syria was a harbinger, and it is even more obvious in Ukraine. The renewed “Scramble for Africa” – and every other part of the world – is in hot progress. As wars of words erupted over Taiwan, the US General Minihan wrote in a Memo on Jan. 29, 2023:
“We will fight in 2025… Xi secured his third term and set his war council in October 2022… Taiwan’s presidential elections are in 2024 and will offer Xi a reason. United States’ presidential elections are in 2024 and will offer Xi a distracted America. Xi’s team, reason, and opportunity are all aligned for 2025.”
The cacophony of war rhetoric and incessant drums emphasizes the sliding nature of capitalist fortunes. Who is the “top dog” will change, and the relative positions of the capitalists is a rivalry only finally sealed in war.
“Half a century ago Germany was a miserable, insignificant country, if her capitalist 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.”
Lenin, V. I. (1917/1977). “Imperialism, the Highest Stage of Capitalism” (Collected Works Vol. 22). p. 295.
“Capitalism is growing with the greatest rapidity in the colonies and in overseas countries. Among the latter, new imperialist powers are emerging (e.g., Japan).”
Lenin, V. I. (1917/1977). “Imperialism, the Highest Stage of Capitalism” (Collected Works Vol. 22). p. 274.
2. The first phase of exploitation of less developed countries by the more developed capitalist countries – open colonialism
The earliest forms of colonial occupation and extraction were the unabashed, naked forces in the colonies. This was how capitalism developed in its early stages and completed its development out of feudalism. It also fueled the “industrial revolution” in the European countries. Capitalism, in short, expanded its sway worldwide into countries by way of colonialism.
The first colonies began with the early capitalist states of Tudor England and Bourbon Spain. Those ventures ended with formal colonies. A colony is defined as “a country which is industrially under-developed and is dominated economically, and perhaps also politically, by a greater power.”
While this in its early stages usually included an armed invasion, leaving a physical presence of the imperialist country within the colonial country, this was not necessarily a permanent feature.
Already in the 1848 Communist Manifesto Marx and Engels had noted the development of a world market and the development of a colonial world:
“The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East-Indian and Chinese markets, the colonisation of America, trade with the colonies, the increase in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an impulse never before known, and thereby, to the revolutionary element in the tottering feudal society, a rapid development… Modern industry has established the world market.”
Later Marx showed the vital role colonies played as capitalists were bursting the seams of a still feudal structure. They avidly sucked-out colonial riches, the profits of which pushed the metropolitan countries into a fully developed capitalism growth. This is described in Capital, Chapter 31, in 1867:
“The different momenta of primitive accumulation distribute themselves now, more or less in chronological order, particularly over Spain, Portugal, Holland, France, and England. In England at the end of the 17th century, they arrive at a systematical combination, embracing the colonies, the national debt, the modern mode of taxation, and the protectionist system. These methods depend in part on brute force, e.g., the colonial system. But, they all employ the power of the State, the concentrated and organised force of society, to hasten, hot-house fashion, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition. Force is the midwife of every old society pregnant with a new one.”
Other rival countries developed their own thirst for colonies. This sparked an intense rivalry that was foreseen by Marx and Engels. Here, for example, is Engels in a letter to August Bebel on January 18, 1884:
“The ten-year cycle seems to have been broken down now that, since 1870, American and German competition have been putting an end to English monopoly in the world market. In the main branches of industry a depressed state of business has prevailed since 1868, while production has been slowly increasing, and now we seem both here and in America to be standing on the verge of a new crisis which in England has not been preceded by a period of prosperity.”
As colonial exploitation became intertwined with the growth of profits for the metropolitan industries, the latter developed new forms of growth and exploitation. This led to the fusion of finance and industrial capital, and to imperialism proper.
3. The phase of imperialism: Merging of finance capital with industrial capital
As capitalism in various countries developed further, it developed into imperialism. When did imperialism “begin”? Lenin dates it clearly:
“(By) the boom at the end of the 19th Century and the crisis of 1900-03. Cartels become one of the foundations of the whole of economic life. Capitalism has been transformed into imperialism…
The 20th Century marks the turning point from the old capitalism to the new, from the domination of capitalism in general to the domination of finance capital…
“The year 1876… is precisely the that time that the pre-monopolist stage of development of West-European capitalism can be said to have been, in the main, completed.”
Lenin, V. I. (1917/1977). “Imperialism, the Highest Stage of Capitalism” (Collected Works Vol. 22). p. 203, 257, 226.
“Imperialism, as the highest stage of capitalism in America and Europe, and later in Asia, took final shape in the period 1898-1914. The Spanish-American War (1898), the Anglo-Boer War (1899-1902), the Russo-Japanese War (1904-05) and the economic crisis in Europe in 1900 are the chief historical landmarks in the new era of world history.”
Lenin, V. I. (1916/1977). “Imperialism and the Split in Socialism” (Collected Works Vol. 23). p.106.
“Marx and Engels did not live to see the period of imperialism. The system now is a handful of imperialist ‘Great Powers’ (five or six in number) each oppressing other nations…”
Lenin, V. I. (1916/1977). “The Discussion on Self-Determination Summed Up” (Collected Works Vol. 22). p. 342.
In order to follow changes in it, we should consider how Lenin summarized imperialism.
For example, in “Letters From Afar”:
“Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun; in which the division of all territories of the globe among the biggest capitalist powers has been completed…
The whole thing hinges on the fact that capital has grown to huge dimensions. Associations of a small number of the biggest capitalists (cartels, syndicates, trusts) manipulate billions and divide the whole world among themselves. The world has been completely divided up. The war was brought on by the clash of the two most powerful groups of multimillionaires, Anglo-French and German, for the redivision of the world.”
These points formed Lenin’s definition:
“If it were necessary to give the briefest possible definition of imperialism we should have to say that imperialism is the monopoly stage of capitalism…
We must give a definition of imperialism that will include the following five of its basic features:
1) The concentration of production and capital has developed to such a stage that it has created monopolies which play a decisive role in economic life;
2) The merging of bank capital with industrial capital and the creation on the basis of this “finance capital”, of a financial oligarchy;
(3) the export of capital as distinguished from the export of commodities acquires exceptional importance;
(4) the formation of international monopolist capitals associations which share the world among themselves, and
(5) The territorial division of the whole world among the biggest capitalist powers is completed.”
Lenin, V. I. (1917/1977). “Imperialism, the Highest Stage of Capitalism” (Collected Works Vol. 22). p. 267.
In the confines of this article, we will assume as given, that the process of monopoly and growth of capital has continued apace. In contrast, we discuss below some data to suggest that the feature of the export of capital was reversed at the turn of the 20th century into the 21st. This points to the divisions between finance and industrial capital.
4. Colonial state forms
To reiterate, the form of imperialism can change despite the essential content — of exploitative relationship and extraction of monies and/or commodities — remaining the same. Changes in the form of colonies also change.
The initial form of exploitation of foreign countries — a colony — is defined as “a subject territory occupied by a settlement from the ruling state” (Collins English Dictionary, 1995, p. 311).
The early forms of a colony often, if not usually, involved a physical occupation of the imperialist forces inside a colony. But this changed over time.
Usually change was driven by the political will towards “independence” of the masses in the colonial type countries. Varying in size and strength, a fraction of the bourgeoisie also strained to develop its own hold on the colony, in order to impose its’ own class rule and retain all profits.
The colonial forms largely changed away from a physical occupation of the colony by the troops of the imperialist nation. Instead the colonial economy became dominated by the imperialist export of commodities. Therefore this was a domination by trading and financial means. Later the imperial export of commodities was replaced by the export of capital.
Hence the rise of the semi-colony and the neo-colony. Such forms attenuated the direct colonial relationship, and rendered it more “palatable.” These forms made it appear that there was a nominal “independence” of the colony from the imperial power. The semi-colony can be defined as “nominally independent, but in reality dominated by a greater power for the benefit of the latter’s ruling class, e.g, Colombia, Saudi Arabia.” Or the alternative mask is also adopted, that of a neo-colony – defined as “a former colony which has become a semi-colony, continuing to be dominated by a greater power for the benefit of the latter’s ruling class, e.g., Tunisia, Jamaica” (Principles of Marxism-Leninism: A Study Course, Class Six, The National Question); and characterized by the “retention of influence over… one’s former colonies… by economic or political measures” (Oxford English Dictionary, Vol. 10, 1987, p. 317).
In addition, the “white” former colonies of the British Empire were granted a higher role, amounting to a “junior partnership.” Initially this was institutionalized as being made into “dominions.” For example, Canada Dominion Home Rule was granted to Canada in July 1867. The term, derived from the Latin meaning “under rule,” was “introduced for the first time by Great Britain, 1867, in the constitution given to Canada to define its autonomous status.” (Osmanczyk, “The Encyclopedia of the United Nations and International Relations,” 1990, p. 241. Cited by Bland in “Neo-Imperialism,” 2001.)
Lenin recognized that such variations of colonial forms did not empower the colony, but rather that they strengthened imperialism itself:
“Sometimes the creation of ‘independent’ states leads to a strengthening of imperialism.”
Lenin, V. I. (1920/1929). “Randbemerkungen zu Nikolai Bucharins, Ökonomik der Transformationsperiode.” p.31.
English: Lenin,V. I. (1920/1929). “Notes on Nikolai Bukharins‚ Economics of the Transformation Period,” as cited in Probsting, Michael. (2013). “The Great Robbery of the South: Continuity and Changes in the Super-Exploitation of the Semi-Colonial World by Monopoly Capital: Consequences for the Marxist Theory of Imperialism.”
The economic and political changes of the imperialist states had even by 1916 given rise to several colonial forms. The semi-colony was only “one form of dependence,” among many noted by Lenin as “diverse forms of dependent countries”:
“The struggle of the great powers for the economic and political division of the world, give rise to a number of transitional forms of state dependence. Not only are there two main groups of countries, those owning colonies and the colonies themselves, but also the diverse forms of dependent countries which, politically, are formally independent, but in fact, are enmeshed in the net of financial and diplomatic dependence, typical of this epoch… (is) the semi-colony.”
Lenin, V. I. (1917/1977). “Imperialism, the Highest Stage of Capitalism” (Collected Works Vol. 22). p. 263.
Since then there have been even more diverse forms.
5. National liberation movements
As discussed above, in a colonial-type country, developments towards enslavement and subjugation are resisted by some fractions of the colonized people. Other social classes are exploiters, but depend for that privilege upon the dominating foreign imperialists.
Stalin pointed out in May 1925, to the Communist University of the Toilers of the East, that the native bourgeoisie in some colonial-type countries:
“[is] splitting up into two parts, a revolutionary part… and a compromising part… of which the first is continuing the revolutionary struggle, whereas the second is entering into a bloc with imperialism.”
Stalin, J. V. (1925/1954). “The Political Tasks of the University of the Peoples of the East” (Selected Works Vol. 7). p.147.
The first part is the national bourgeoisie. There are other classes whose interests lie in freeing the colony from imperialism. These are the working class and large portions of the peasantry. But at some stage the national bourgeoisie “turn away” from the national liberation movement:
“At first the indigenous bourgeoisie and intelligentsia are the champions of the colonial revolutionary movements, but as the proletarian and semi-proletarian peasants masses are drawn in, the bourgeois and bourgeois-agrarian elements begin to turn away from the movement in proportion as the social interests of the lower classes of the people come to the forefront.”
Lenin, V. I. (1922/1971). “Theses on the Eastern Question Adopted by the 4th Comintern Congress” (Works Vol. 1). p. 388.
The second part of the native bourgeoisie discussed by Stalin are the comprador bourgeoisie and landlord classes, who ally with imperialism. The Comintern termed these latter elements as the “social support” of imperialism.
“Where the ruling imperialism is in need of a social support in the colonies, it first allies itself with the ruling strata of the previous social structure, the feudal lords and the trading and money-lending bourgeoisie, against the majority of the people.”
Sixth Congress, Communist International. (1928) “Theses on the Revolutionary Movement in Colonial and Semi-Colonial Countries” as cited in Degras, J. (1971). “The Communist International: 1919-1943: Documents” (Vol. 2). p.533.
Colonial powers learnt quickly the strategy of warding off genuine liberation movements by:
1) seeking to weaken such movements by splitting them along religions or ethnic lines;
2) negotiating with pro-imperialist political forces within the colonies — landlords and comprador capitalists — to transform the colonies into neo-colonies, which are nominally independent but in reality dependent.
Moreover the colonial powers used super-profits from colonies as crumbs, whereby to bribe the labor aristocracy to blunt the progressive movement in the metropolitan home countries. This term was introduced by Lenin, built on observations by Engels of the English trade union leaders. The term was distorted by leftists including George Padmore in 1944, and later on Maoists, to being equivalent to the whole of the proletariat. Bland showed convincingly that only a small fraction of an elite receives any meaningful portion of colonial super-profits.
To summarize, nationalist pressures from below prompted changes in the forms of colonial exploitation. Some countries – for example North Vietnam and subsequently the consolidated state of Vietnam – won their national liberation struggle (Ho Chi Minh).
As these various national bourgeoisie struggled for “their place,” they swung the national liberation struggles in these countries firmly towards state capitalist forms. The state form enabled them — to some limited extent — to develop a state-based industrial base.
More often such national liberation struggles were stalled. In addition, over the ensuing decades, that pressure from below was less effective. This was more so as opportunist-led working class and peasant communist parties sank into revisionism. The net resistance to imperialism became less effective. Even when the differing national bourgeoisie of the world gained state power, they were less able to challenge imperialism. Ultimately they were forced into compromises or often, in effect, they lapsed into roles as comprador agents. This was so in both Asia and in Latin America.
We have described this process in detail previously: in Afghanistan; in India (M.N.Roy 1993); in Pakistan; in Kurdistan; in Rwanda; in South Africa; in Syria; etc.
Here we cite one example, that of Peru. Juan Carlos Mariategui estimated Peru had “lagged behind” without developing “the elements of a liberal bourgeoisie,” so that “power remained in the hands of the military caudillos.”
The old Peruvian landlord compradors — or “latifundistas” — served as “intermediaries” of foreign capital in producing sugar and cotton. Mining, commerce, and transport remained in the hands of foreign capital. This economic system was a “semi-feudal” organization. After the second world war, the U.S. flooded Peru with a rapid imperial financial capital influx.
The U.S. ensured the coup of General Manuel Odria in 1948, who moved the 1950 Coidgo de Mineria (Mining Laws). These favored the United States’ stripping of Peruvian raw material and assets.
The exceptionally weak national bourgeoisie was unable to resist the U.S. General Alvardo Velasco tried to circumvent U.S. pressure in 1968, but he could not, saying:
“The government doesn’t have any money… The Peruvian economy is in large part paralyzed… The country needs capital for its development.. Latin American development requires foreign capital.”
Under the guise of “Peruvianization,” the Velasco government tried to court other imperialists. But Peru had to join the U.S. sponsored Andean Pact.
And so to the current era in 2021, when the weak national bourgeois Castillo was elected. He promised in his “Message to the Nation” on assuming the presidency in Congress:
“We do not even remotely intend to nationalize our economy or make an exchange control policy.”
And at the 2021 Organization of American States (OAS) meeting, Castillo soothingly said:
“We are not communists. We have not come to expropriate anyone. We have not come to scare away investments. On the contrary, [we] call [upon] large investors, businessmen, to go to Peru.“
And even so, Castillo was deposed by a parliamentary and civic coup by stooges of the United States in 2022.
As the PCR Bolivia (Revolutionary Communist Party) rightly says on Bolivia, in its founding document:
“The nationalizations made by such governments, as well as their red-hot language of the first period of opposition against imperialism and reaction, always end up being replaced by the apology for their anti-imperialist past. The representatives of the bourgeoisie of the petty bourgeoisie in power cannot understand that integral industrial development, within the framework of the capitalist production regime and in the orbit of capitalism, is no longer possible and leads to the betrayal of national interests.”
PCR Bolivia. (2020). “Founding Documents of the Revolutionary Communist Party.” ML Currents. p.46.
6. False flag “progressive nationalism”
Analysis of nationalist movements is complex. This is because spurious left-posturing “nationalism” finds leftist demagoguery a convenient mask. Various national bourgeoisie have portrayed themselves as “revolutionary” or “Marxist” currents. As the communist parties in the colonial type countries fell into various forms of revisionism, the leading role in the revolutionary processes in those countries was snatched by the nationalists.
Such expressions ranged from Maoism in Chinese revisionism; to Castroism and Guevarism in Cuban revisionism; to Russian revisionism (Khruschev 1997); to left national forms such as the APRA-ism of Torres in Peru (Mariategiu)
Even until recently there has continued to be a small — even if dwindling – progressive role for the national bourgeoisie. This was evidenced for example in Venezuela under Hugo Chavez.
But this progressive space becomes ever smaller and smaller.
In recent years new organizations emerged formed to try to achieve some semblance of economic independence from predatory imperialists. These have revived past efforts as in the Bandung coalitions (see below). Modern day bourgeois nationalists have also sought alternative united fronts of their own weaker capitals. Just as the Bandung nationalists sought the sinews of revisionist USSR and China, their modern day equivalents seek strength in conglomerates such as BRICS. These rely on China and Russia (see below).
But there have also been changes of form of colonial type countries, prompted by developments within capitalism itself. In more recent times, since the end of the 20th and the start of the 21st century, a new form of imperialism is seen. This is marked by a qualitative switch in the direction of capital flows – where instead of the export of capital into the colony, there was an import of capital into the metropolitan countries (see below).
This occurred coincident with the development of new forms of money, and the overflow of tensions between the two wings of capital: finance capital and industrial capital. These two wings of capital had merged in Lenin’s observations but have been, to some extent, ruptured. We described this process previously (Alliance 1992 and ML Currents 2019). It led to the formation of neo-imperialism (Bland MLRB- 2001).
What have been the evident further phases of imperialism leading up to today?
7. Imperialism countered by the USSR immediately post-Second World War
Because the USSR had successfully defeated the German state fascist attack, it was able to continue to form socialism. The form of Western imperialism took the shape of the “Cold War” aimed at erecting a bulwark against the USSR and its allies of the People’s Democracies. Most of Europe was devastated during the war.
To further its control the U.S. launched the Marshall Plan which loaned enormous sums of monies to the war-devastated Europe not occupied by the USSR forces. The People’s Democracies entered into negotiation for monies from the Marshall Plan. However they rejected it as the demands made were an evident subservience.
While Stalin was alive, the USSR remained an effective opposition to the otherwise untrammeled hegemony of the U.S. over the capitalist states. While attempts were made to undermine the People’s Democracies, the existence of socialism in the USSR countered these. During this period inter-capitalist contradictions were not extinguished, but were bound to grow:
“It would be mistaken to think that things can continue to ‘go well’ [for the U.S. -Editor] for ‘all eternity,’ that the countries will tolerate the domination and oppression of the United States endlessly, that they will not endeavor to tear loose from American bondage… Consequently the struggle of the capitalist countries for markets and their desire to crush their competitors proved in practice to be stronger than the contradictions between the capitalist camp and the socialist camp… But it follows from this that the inevitability of wars between capitalist countries remains in force.”
Stalin, J. V. (1951). “Economic Problems of Socialism in the USSR.” pp. 37-41.
8. The Bandung era
After the restoration of capitalism in the USSR following Stalin’s death in 1953, world imperialism took a radically new shape. After an initial phase where the Khruschevites worked together with, and on behalf of, the United States, the former Soviet state was seized by the Brezhnevites (Sakharov). These representatives of heavy industry in the formerly socialist USSR moved to assert their “own” pseudo-socialist, social-imperialist hegemony against that of the U.S.
This rivalry developed into two major blocs — one led by the U.S., and the other led by the social-imperialism of the revisionist USSR.
For a period the nationalist bourgeoisie of various nation-states tried to play off one imperialist against the other in order to attempt to navigate an independent pathway. Essentially they tried to buy the best deal. Moreover, for a short period, a weak but potential third force arose in the form of Chinese revisionism.
It was in fact Chinese revisionism that attempted to organize the weak struggling nationalist bourgeoisie of the colonial type countries into a stronger coalition. They urged on the Bandung Formation. Bandung took its final shape after initial meetings between India’s Jawharlal Nehru and China’s Chou En Lai, when they signed the Sino-Indian Agreement of April 29, 1954, over the issue of Tibet, and announced a program called Pancha Shilla (Five Principles). These were:
“Mutual respect for each other’s territorial integrity and sovereignty, non-aggression, non-interference in each other’s internal affairs; equality and mutual benefit; peaceful co-existence.”
At Bandung the bourgeois nationalists expressed strong desires to industrialize their nations. The Soviet revisionists did not attend. The only two outwardly “Communist Parties” to attend were China and North Vietnam. It is notable that China was under partial – and North Vietnam under full — control of the national bourgeoisie. The themes of the conference revolved around anti-imperialism. At the conference, some delegates charged the USSR with a colonial relationship towards the former People’s Democracies, using the phrase “New Colonialism.”
Nonetheless, Bandung marked the recognition by the new Soviet revisionists that these countries were searching for alternative sponsors to the traditional imperialists.
The Soviet revisionists took the hints requesting “help” from the various national bourgeoisie. Very soon, they initiated collaborations with industrialists in these countries. The first was with Birla, a steel mill industrialist in India. The transformation of these former colonies of the West, into the neo-colonies of the newly dominant and rampant Soviet imperialists, began.
Ultimately the Bandung Formation became a sterile and failed route for the former colonial countries. Almost all these states never moved beyond either semi-colonial or neo-colonial relations. Instead they largely remained under domination of either the U.S.-led bloc or USSR social-imperialism.
9. The new instruments of U.S. imperialist control of the world economy
In the post-war, post-Stalin era, the Western capitalist world had been locked into servility of the U.S. by several new instruments (Alliance 1993). One of these was the Marshall Plan which, as we saw, loaned enormous sums of monies to that part of war-devastated Europe which was not occupied by the USSR forces.
These monies were linked to other new instruments of financial control. While these had been created even in 1944 during the war, again the USSR refused to be tied to them.
These instruments included the International Monetary Fund and the International Bank for Reconstruction and Development (IBRD) – later the World Bank. But more importantly the Bretton Woods Agreement was a means by which to ensure that all monetary equivalents of currency were pegged to the U.S. dollar. At that stage the U.S. controlled about two-thirds of the world’s resources of gold. Bretton Woods made debts to the U.S. payable only in gold or in U.S. Dollars (“as good as gold” — see Alliance 1993).
Up till 1971 the currency exchanges still rested on the Gold Standard, however exchange was increasingly tied to the U.S. dollar. In 1972 the U.S. terminated the Gold Standard making the dollar the so-called “fiat” currency. It essentially took the role of gold previously, but was based only on the authority and power of the United States Treasury. This meant that the U.S. guaranteed all currencies – so long as they were pegged within a fixed rate set by the Treasury. This prevented nations from devaluing their currency to gain a competitive advantage for their own exports.
This took aim at the power of the British “Sterling Area,” behind which a faltering colonial Britain sheltered itself with unrealistic trade advantages. France and its empire was also brought to heel by the U.S. in the Bretton Woods Agreement.
Meanwhile, in the largely Western capitalist countries of Europe, gradually the hegemony of the U.S. was increasingly challenged by nations that went on to form the European Union. But the U.S. dollar debt was difficult to challenge.
However even up to this stage towards the 1970s, the essential tenets of Lenin’s definitions of imperialism (listed above) were largely still as described in “Imperialism.”
10. Finance capital gains a predominance over industrial capital imperialism
In 1999 we evaluated some of the features of Lenin’s definition of imperialism, deeming them largely unchanged. (Alliance 1999)
However in Alliance 1993, and since, we began remarking the tensions between the two wings of capital (finance vs. industry):
“There have been several changes in the nature of the alliance between the wings of capital within one nation. For an interim period the Banks were not the prime source of finance for capitalist industry. In Britain for example, banks (mainly merchant banks) own only 0.3%… of company shares.”
Banks in Britain provide only 6% of the external funding of industry in the form of loans and these have been traditionally short term loans to provide “working (as opposed to investment) capital.”
Industry itself began to finance much of its own investments. The huge multi-nationals had such currency reserves that they eroded the power of the banks to some extent.
“The corporate sector is driving the U.S. economy to a degree unthinkable in the old economy. Conventional wisdom that the economy is driven by consumer spending is no longer as true as it once was.”
These divisions between the wings of capital are recognized overtly by the business community. Thus when the U.S. Democrats were resistant to a monetary policy… the needs of the financial sector [were met when] “Wall Street shoved Volcker down Carter’s throat.”
“In fact the relation between the profits of the financial capitalist class, and the industrial capitalist class are inversely related.”
Bretton Woods had forced the non-U.S. nations to hold U.S. dollars. Especially so after the U.S. pushed the world to come off the Gold Standard in 1971. All payments made by the U.S. to other nations – including for a huge U.S. military presence overseas — were made in U.S. dollars. Meanwhile as United States industry grew fat, its capitalist rates of profit actually fell. To enable better functioning the U.S. Treasury simply printed more treasury bonds, knowing that any inflation would be off-set to the overseas holders of U.S. dollar bonds.
These events became coupled to an exponential rise in dollar holdings outside of the U.S. As these funds rose — in the form of “Petrodollars,” and in the dramatic surge of the “Eurodollars” – a huge surge in the money supply occurred. Added to the rapidity of money trades through electronic new technology, this “hot money” led to a period of soaring inflation. The surge of new shaky financial instruments (Marx called this type of speculation “fictitious money” – Alliance 1993) spurred massive inflation world wide.
11. The drive to “neoliberalism”
This then ushered in the “austerity” regimes by which most governments of the world ratcheted back reformist welfare gains. Those gains had been won in the post-war years firstly by a militant working class. But secondly — because post Second World War, capitalist governments were aware of the pull of even revisionist “socialist” states — they granted reforms. However by the era of Mrs. Thatcher, President Reagan, and General Pinochet, revisionism in the USSR and China had eroded such influences. Moreover reformist labor aristocrats in Western economics had done their job and disabled the progressive strands in the working class.
In the 1980s, the dominance of finance capital and the falling rates of profit combined to ensure the sway of so called “neoliberalism.” David Harvey’s definition is:
“Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices. The state has to guarantee… the quality and integrity of money.” (See Trump and Finance Capital)
Harvey, David. (2005). “A Brief History of Neoliberalism.” p. 2.
In practice this meant that states were free to “deregulate” public spheres of function – especially any constraints on finance capital. After 1980, these deregulations effected an increasing domination by finance capital. Currency transactions flowed like never before:
“The strong wave of financialization that set in after 1980 has been marked by its speculative and predatory style. The total daily turnover of financial transactions in international markets, which stood at $2.3 billion in 1983, had risen to $130 billion by 2001. The $40 trillion annual turnover in 2001 compares to the estimated $800 billion that would be required to support international trade and productive investment flows.”
Harvey, David. (2005). “A Brief History of Neoliberalism.” p. 161.
12. How these developments affected the development of “neo-imperialism”
The export of capital from Britain continued to grow in the 20th century, as is shown by the following official figures. However, by 1996, so much British capital had been invested abroad that the income from these investments exceeded the amount of new capital being exported (see table*).
|British Export of Capital1, 2||£11.6 thousand million||£33.9 thousand million||£89.3 thousand million|
|British Import of Capital3, 4||£44.4 thousand million||£47.3 thousand million||£96.1 thousand million|
1 Central Statistical Office. (1994). “Annual Abstract of Statistics: 1994.” p. 234.
2 Central Statistical Office. (1998). “Annual Abstract of Statistics: 1998.” p. 275.
3 Office for National Statistics. (1993). United Kingdom Balance of Payments: 1993. p. 42.
4 Office for National Statistics. (1997). United Kingdom Balance of Payments: 1997. p. 43.
In other words, the export of capital had given way to the import of capital. Bland cites Theresa Hayter who put it as follows:
“Capital is now flowing out of the Third World, mainly to service debt, on an increasing scale.”
Hayter, Teresa. (1989). “Exploited Earth: Britain’s Aid and the Environment.” p. 10.
Such a dramatic turn-around justifies the term “neo-imperialism.”
13. The emergence of the BRICS (Brazil, Russia, India, China, South Africa)
The term “BRICs” was coined in 2001 as an acronym by an economist Jim O’Neil, working for investment bankers Goldman Sachs. In 2014 the “S” was added for South Africa, making the acronym “BRICS.” O’Neill had been searching for advice for investors, and identified BRIC as a large and growing portion of the world GDP. In 2007 he looked back:
“In 2001… we argued that the BRIC economies would make up more than 10% of world GDP by the end of this decade. As we near the end of 2007, their combined weight is already 15% of the global economy. China is poised to overtake Germany this year to become the third-largest economy in the world. Our ‘BRICs dream’ that these countries together could overtake the combined GDP of the G7 by 2035… remains a worthy dream.”
O’Neill, J. (2007, Nov. 23). “BRICs and Beyond.” Goldman Sachs.
In 2009, the BRIC countries began to make formal political links between themselves. Their first formal meeting was in 2009. In 2018 they had:
“a combined nominal GDP of US$26.6 trillion (about 26.2% of the gross world product), a total GDP Purchasing Power Parity of around US$51.99 trillion (32.1% of global GDP PPP), and an estimated US$4.46 trillion in combined foreign reserves.” (Report for Selected Countries and Subjects, IMF.)
“The group accounts for 40% of the world’s population and just over a quarter of global GDP. To put this in context, the G7 countries with a far smaller population base constitute just over 30% of global GDP on purchasing power parity.”
Doshi, T. (2022, July 21). “BRICS In The New World Energy Order: Hedging In Oil Geopolitics.” Forbes.
Numerous other countries of recent years came closer to the grouping, and want to formally join BRICS.
“BRICS International Forum president Purnima Anand reported… that three more countries — which included Egypt and Turkey along with Saudi Arabia — could join the BRICS group “very soon.” This followed earlier announcements that Iran and Argentina had formally applied for membership with Chinese support.”
Doshi, T. (2022, July 21). “BRICS In The New World Energy Order: Hedging In Oil Geopolitics.” Forbes.
As long ago as 2014 the BRICS grouping agreed to establish alternative banking systems:
“An agreement to establish a “New Development Bank” (NDB) and a “Contingent Reserve Arrangement” (CRA) was a public-relations coup… reiterate(s) their dissatisfaction with the World Bank, the International Monetary Fund, and the role of the dollar in the global monetary system. The BRICS possess just 11% of the votes in the IMF, despite accounting for more than 20% of global economic activity. The US Congress refuses to ratify the agreement reached in 2010 to correct this skewed state of affairs. And the United States has displayed no willingness to renounce its anachronistic privilege of nominating the World Bank’s president. Meanwhile, the share of the dollar in global foreign-exchange reserves remains more than 60%, while 85% of global foreign-exchange transactions involve dollars. Given the reluctance of under-represented countries to sign up for the IMF’s precautionary credit lines, central banks desperate for dollars can obtain them only from the Federal Reserve. The Fed was reasonably forthcoming in providing dollar swaps in the last crisis in 2008; but there is no guarantee that it will behave similarly in the future.”
Eichengreen, B. (2014 Aug. 14). “Do the Brics need their own development bank?” Guardian.
Naturally obstructions were placed in their path. For example, the U.S. engineered downfall of Dilma Rousseff, the president of Brazil, and the trial of her predecessor, Luiz Inácio Lula da Silva (Lula), set the stage to try to derail Brazil’s leadership. (Guardian 2016). However since the release of Lula from prison, and his recent re-election as President, there has been a favorable wind for Brazil taking on a driving force again in the BRICS.
Even so, some progressives initially saw the BRICS movement as a progressive step eroding the power of the bigger imperialist nations, in especial the United States. But this hope is completely illusory. As a student of BRICS, Patrick Bond writes:
“the BRICS are ‘collaborating actively with imperialist expansion, assuming in this expansion the position of a key’ bloc, whose own interests also rest in sub-imperialist stabilisation of international financial power relations, for the advancement of their own regional domination strategies.”
Bond, P. (2016). “BRICS Banking and the Debate Over Sub-imperialism” (Third World Quarterly Vol. 37, No. 4). pp. 611–629.
Elsewhere Bond calls the BRICS by the term “junior partners in imperialism.” Bond considers the differing labels that have been given of the various fractions of nationalist bourgeoisie as only of “semantic” difference.
However since the terms historically carry strategic implications, they require a longer discussion. For these reasons the full discussion of the term “sub-imperialism,” which was coined by Ruy Mauro Marini, will be dealt with separately.
The more important dimension of the BRICS is, of course, that this grouping includes both Russia and China. Both are imperialist nations and anxiously wish to exploit a heavier burden on the world than they do currently. Hence, the BRICS is another imperialist formation, just as is the European Union, and the nations led by the U.S. which — in Europe at least – revolve around the forces of NATO.
Conclusion: A new imminent subdivision of the world through war
As the United States makes new alliances around the Chinese seas (such as Taiwan, Indonesia, Philippines, Australia), China continues to push on its sea borders against states such as South Korea and Japan. While Russia invaded the state of Ukraine, it attempted to ensure its Europe-facing flank was broadened. However it miscalculated and fell into a trap, whereby NATO is now being enlarged to include the Scandinavian countries at minimum. The tinder is dry. There will be war. And how well prepared are the communists of the world? There is no large-scale unified movement that can be discerned. We have about 3-5 years.
Categories: Editorials, History, Imperialism, Theory