The Shape of Today’s Imperialism

Against the Current, No. 59, November/December 1995

Kim Moody

FOR NEARLY eighty years the marxist left has taken Lenin’s Imperialism as its theoretical guide to the motor forces and contours of the domination of the world by the ruling classes of a tiny number of “great” powers. In the entire period only a handful of serious theoretical critiques have been attempted (discounting those who have simply tried to jettison the whole unpleasant idea of imperialism); e.g. Michael Kidron’s in the 1960s and Anwar Shaikh’s in the 1980s.

Space prohibits the exposition and development of these important critiques here, but a couple of observations based on these and my own views are in order.

While the central place Lenin gave to the export of capital in his analysis is certainly correct, his identification of “monopoly” and “finance” capital, with its supposed “superabundance of capital” as the driving force doesn’t hold up.

Partly, this is because Lenin tried to cram evidence from the United States and elsewhere into Hilferding’s description of turn-of-the-century Germany. Germany’s horizontally integrated industrial and financial corporations and direct state involvement were not and are not typical of most other capitalist powers — certainly not of Britain, the U.S. or Japan.

Second, looking at the period of economic expansion from about 1896 onward, Lenin overlooks the driving force of the prolonged profitability crisis of 1873 to 1893. This world-wide crisis in fact, set off the “scramble for Africa,” accelerated the contest over who would inherit the crumbling Russian and Austrian empires in central Europe, and propelled the U.S. race for territorial acquisitions in Hawaii and in Spain’s disintegrating Caribbean and western Pacific empire.

The economic expansion after 1896 sent increased volumes of capital abroad, but it was the twenty-year crisis of profitability that sparked the new (by no means the first) scramble for overseas investment and territorial conquest.

Third, the imperialism that Lenin described was above all a contest for territory — true colonialism. As Giovanni Arrighi and others have shown, from the 16th century up until our own time, the world market has been politically organized through territorial domination. Territorial conquest and/or domination was key to the Spanish/Genoese, Dutch, and British epochs of capitalist expansion, in general, and to the organization of trade and overseas investment in particular.

Cold War and Trade Wars

Only the post-WWII epoch of American “hegemony” would represent a departure from the norm of direct territorial control as the major organizing principle of the world market. Lenin noted the existence of “dependent” non-colonial nations, but it is clear his understanding is totally rooted in the colonial epoch in which he lived.

For the era of American dominance the central political organizing principle of imperialism was, of course, the Cold War bifurcation of the world–informed by the older form of “open door” imperialism usually preferred by U.S. policy-makers once the “home” continent had been duly conquered by the mid-19th century.

In this period, roughly 1945 through 1973, the United Nations and the multilateral Breton Woods organizations (IMF, World Bank, GATT, etc.) played a distinctly secondary role — despite the intentions of some of their original organizers.

The potential need for territorial expansion existed not simply because of the export of capital, but because of the existence of a rival (“Communist”) social-economic system that could not co-habit the same territory. Actual territorial expansion by either system was discouraged by the even greater threat of territorial and human destruction implied in nuclear warfare.

A good deal of world trade remained organized through the old colonial networks, even after independence, which gave rise to terms like semi-colonial or neocolonial. The United States attempted to organize its own international trade and investment through a series of regional multilateral agreements, in some ways foreshadowing today’s regional developments, tied to foreign aid and given some developmental pretensions through the Alliance for Progress of the Kennedy years.

The system included sponsoring national leaders usually drawn from the old agrarian ruling elites and oligarchies, and backing them up with CIA meddling and direct intervention when called for.

The irony of the Pax Americana was that the Cold War set-up provided a space for Third World options (Import Substitution, Communism) and rebellions that rendered it problematic as a means of domination of the South by the North. The endless string of U.S. military interventions around the world was a symbol of the system’s weakness, not its strength.

Trade and investment remained predominantly within the North, paradoxically contributing to the rise of America’s major competitors in Europe and East Asia — above all Japan. The era of the United States as the prime organizer of the world economy began to unravel almost from the beginning. Various tactical revisions, like the development of regional subpowers, failed to stem the decay of the Cold War-U.S. system.

Profit Squeeze and TNCs

The return of a prolonged period of profitability crisis after 1970 sent capital around the globe (though still primarily within the North) once again in search of above-average returns as it had in the 1870-’80s.

Renewed crisis also fatally undermined the import substitution model that had allowed some Third World countries to make gains. It preempted, as well, the mixed model attempted by the Sandinista revolution in Nicaragua. In other words, it narrowed Third World options appreciably even before the collapse of the Eastern bloc.

In the new crisis the organizer of capitalist expansion was not a nation-state or empire, but the transnational corporations (TNCs) that had developed since the 1960s. Much of the available capital was tied to the expansion of TNCs who created development-limiting “enclave” production in select parts of the Third World.

No territorial conquest was required for the TNCs, who conducted a growing part of the world trade and investment through their own channels. Although the backing of the U.S. government and military remained a given, the leading force was capital itself.

“Free trade” agreements with individual or groups of Third World countries became the way to tie them into the TNCs’ plans. This time, however, the incentives, and later the whips, came not from the U.S. state, but from the banks and multilateral financial institutions.

The TNCs and banks had new social partners in most of the developing countries they were interested in. In whole or in part, the old agrarian oligarchy had been superseded by or transformed into a new capitalist class with close ties to various TNCs and the chains of production they sponsored. Of course, this class was also the administrator and beneficiary of the national debt and increasingly a dominant force in the state.

This new class, its leaders frequently educated in the United States or Europe, preferred at least the facade of respectable democracy — along with neoliberal economic policy. As this class entered government increasingly, it too eliminated the need for territorial conquest or even military intervention.

The TNCs, however, are competing institutions in the fight for profits. For all their grand size they can no more coordinate world trade and investment than they can guarantee political stability. Despite their ability to form shifting alliances for various purposes, they do not represent some new form of monopoly capital, but the elevation of real capitalist competition to an unprecedented level of viciousness.

Nor does the accumulation of cyberfortunes through speculation in national debt, urrencies, and an ever growing variety of “derivatives” represent a new epoch of “finance capital.” Rather, it reflects the problems of genuine investment in an era of falling profit rates accompanied by the increased ability of the banking system to create money-of-account and the exponential acceleration in the velocity of this money.

The importance of this development is more as a potential destabilizer of the system than as some new principle of capitalist organization.

A Leaner and Meaner World Order

So far as an understanding of the economic side of imperialism goes, what is most central to the period now unfolding is the development of internationalized lean production and the myriad of infrastructural and service investments that accompany it.

Primary among these services are transportation, telecommunications, and finance for real investment — which both follow and enable the path of international production chains. The explosion of foreign direct investment (FDI) in the 1980s was the signal of this phase, as was a shift toward FDI in these very material “services.” The trend toward economic regionalization (EU, NAFTA, East Asia) flows partly from this development.

Trade, investment, TNC production and structures, and the growing flow of labor across seas and borders, however, are not limited to regions. International mechanisms of regulation had to be found. This involved changing the functions of the multilateral financial institutions (IMF, WB, BIS, etc.).

These “development” agencies now converted to enforcers of the new era of TNC friendly “open” economic policies (SAPs), the rise of the G-7 as an wanabe policy instrument, the attempt to reorganize the UN as a more efficient agent of the North and its TNCs, and most recently the formation of the World Trade Organization.

What’s most evident about this emerging period of multilateral organization, however, is its jerry-built, contingent nature. The trend toward multilateralism is not the first phase of “world government,” but an unstable regulatory holding action for major economic powers with much to lose if chaos gets too great.

This is the option, whether in the realm of economic, political, or even military policy, to which there is no apparent alternative for international capital. The United States can militarily intervene or abstain here and there, but it cannot, absent the Cold War bifurcation, organize the world order on its own.

Neither is Japan about to become the new organizer of world capitalism, due to its own deepening crisis, size, geographic location and material dependence on the global system. The epoch, indeed history, of world capitalism as a system led by an organizing major power appears to be at an end with no real alternative at hand.

“Open Door” Facing East and South

The collapse of the Communist regimes in the Eastern bloc opened a vast new geographic opportunity for global capital already on the make. On the other hand, it imposed further limits on the ability of Third World (and Eastern bloc) countries to resist economic penetration by the TNCS on TNC and/or IMF terms.

As problematic as capital’s opportunity in the former Eastern bloc has proved, these two political and spatial openings have eliminated the last requirements of territorial conquest as the organizing principle of contemporary imperialism. The “open door” is now virtually universal, if not cost- and risk-free.

The need for military intervention by the North, however, is by no means ended. The collapse of the post-colonial regimes in Africa and the Stalinist regimes in the former Eastern bloc, along with the trend toward increased poverty and unemployment in these
areas, Latin America and much of South Asia, present the new multilateral regulators with problems that cannot always be negotiated away or ignored.

None of the areas of extreme instability and bloodshed (former Yugoslavia and Subsaharan Africa above the southern cone) are themselves important to capital per se. But each is contiguous to a region of potential expansion for capital: Eastern Europe (above all the Czech Republic and Hungary) and the countries of the southern African cone, particularly South Africa.

Boutros Ghali’s remarks last summer that UN policy in the Balkans had been largely successful in that it had “contained” the conflict are revealing in this respect.

Haiti represents a different case. Like the Dominican Republic, Puerto Rico, and many other island nations, Haiti is directly positioned in the Caribbean chain of production that is part of the greater North American economic region. Haiti has not only to be contained or stabilized; it has to be reshaped in the contemporary mold of proper (if limited and even artificial) democratic procedures now in practice in the region.

Clearly, the Haitian military thugs had to go or be (perhaps) tamed like many of their Latin American colleagues. But like many of the current “hot spots” in the world, Haiti lacks much of a transnational capitalist class. The only options for the U.S. were the forces represented by Jean-Bertrand Aristide, the radical populist priest who won Haiti’s 1991 election (and whose brief administration was backed by the World Bank, it should be noted).

A Tightrope for the Left

The use of genuine and fake democratic and nationalist movements by U.S. imperialism for its own ends is not new. A century ago this approach was used in Panama (fake), Cuba (genuine), and Hawaii (fake). In different ways, it was always a feature of America’s “open
door” imperialism. Perhaps the trick of exploiting such movements was learned first in the settler rebellion in Texas that preceded annexation.

President Aristide is genuine, though certainly compromised, a fact that presents the U.S. left in the U.S. with problems. Indeed, the existence of genuine movements (Aristide, the multicultural republic of Bosnia, the ANC) within a context set by the emerging shape of imperialism presents us with a dilemma.

These progressive forces will make alliances with more powerful elements within imperialism because the movements in these socially underdeveloped places are too weak to overcome their foes alone — and the left and workers’ movements in the imperialist countries are too weak and disoriented to help.

Socialist policy toward such movements needs to be nuanced. One analogy would be the line of those revolutionary socialists who, unlike the Stalinists, saw WWII as an imperialist war and did not support the Allies, but who did support the national resistance movements in Europe and Asia, even though most of these movements had ties, frequently through the Communist Party, to the Allied powers.

Obviously, this is a tricky tightrope to walk. But two things seem clear. First socialists cannot afford to become subcontractors or apologists for the major institutions of multilateral imperialism. A UN, NATO, or IMF “socialist,” today, is not much different
than an State Department “socialist” in the Cold War.

At the same time, we cannot abstain from supporting those genuine movements for national and human liberation upon whom relations with these same imperialist institutions are often imposed by objective reality. The tensions imposed by this contradictory situation will create on-going debates within the left.

What needs to be kept in mind is that the resolution of this dilemma lies, as it always has, in organizing of a socialist workers’ movement in the industrialized nations themselves, capable of supporting liberation abroad and eventually revolutionary action to terminate the economic roots of imperialism.

November/December 1995