Understanding Imperialism: Old and New Dominion

David McNally

IT IS A commonplace today that we have entered a “new age of imperialism.” The emergence of complex world money markets, increasingly integrated global production systems, aggressively neoliberal policies imposed by the likes of the World Bank and the International Monetary Fund, and the belligerent militarism of the American state — all these are recognized as new modalities of capitalist empire.

For some on the radical left, the new imperialism has sparked a return to the analyses developed by major figures on the international left in the era of World War One. It is easy to see why. During that period, a number of seminal works on imperialism emerged, most notably Rosa Luxemburg’s The Accumulation of Capital (1910), Nikolai Bukharin’s Imperialism and World Economy (1915) and V. I. Lenin’s Imperialism, the Highest Stage of Capitalism (1917).

Despite their differences, these works shared a number of real strengths. First, each theorist sought to link the territorial expansion of major European nation-states (along with that of the United States and Japan) to the process of capital accumulation. In so doing, they recognized that the imperialism of their era, more than a political policy, was directly tied up with strategies of capitalist accumulation.

In making this connection, they pointed, secondly, to the First World War (or in Luxemburg’s case the drive toward that war) as an inherently capitalist conflict, the bloody, horrifying expression of world capitalist rivalries.

Rather than portray the war as an historical accident, these Marxist writers accounted for it as an extreme form of capitalist competition. Trade wars, they suggested, are ultimately resolved through shooting wars. In the final analysis, argued Bukharin, economic conflicts are settled “by the force of arms …the last word belongs to military technique.”

Finally, as a result of these analyses, all three revolutionary writers distinguished themselves with resolutely antiwar responses to the global military conflagration. At a time when the major parties of European socialism were falling in behind their governments’ war policies — thereby betraying longstanding commitments to international working class unity — these revolutionary theorists, along with activists of the antiwar left, preserved the honor of international socialism.

For all these achievements, there were real limits to these theories — limits which become especially disenabling today. To begin with, the analyses of capital accumulation they advanced had considerable flaws. Rosa Luxemburg, for instance, held that imperialism was based on the search for new markets outside the capitalist world.

Without new external markets for goods, she maintained, capitalism would collapse due to chronic overproduction. Not only is there very little evidence that newly colonized territories constituted important export markets — how could they, given the poverty of the colonized? — but Luxemburg failed to grasp capitalism’s capacity for intensive, as well as extensive, growth.

Put simply, capitalism regularly creates new markets for both consumer and capital goods inside the so-called “developed world” — whether for fast food or computers. While it is preferable to locate markets for both intensive and extensive growth, the disappearance of the latter would not spell the death of capitalism.

Lenin’s analysis too suffered from real shortcomings. He argued, for instance, that colonialism pivoted on the export to the colonies of excess capital — capital which could find no profitable outlet at home. Yet the very tables he produced in his booklet indicated instead that the bulk of exported capital went from one rich capitalist nation to another — as it continues to do today. As for Bukharin, he took an historically specific period of integration of capital with the nation-state in the early 20th century and inflated it into an inherent tendency of capitalist development, arguing that capital and the state fuse over time. Yet as recent waves of privatization and deregulation indicate, the relationship between state and capital is much more fluid and changeable.

But perhaps the biggest flaw in these theories of imperialism is that they saw territorial occupation by the major powers as a necessary feature of global capitalism. It is easy to see why: From about 1875 onward, the dominant powers engaged in an incredible scramble for colonial territories.

Over the ensuing 40 years Britain added four million square miles in territories to its empire, France 3.5 million, and Germany, Italy and Belgium around one million square miles each. Power within the world system relied heavily at this time on control over territories — and the land, resources, markets and labor they contained.

As a result, war against other capitalist states became a considered strategy for amassing greater might within the global system — a strategy which was especially attractive to Germany and Japan, rising powers which had not managed to develop significant colonial empires. Given this context in which the power of capitalist nation- states was bound up with territorial conquest, it is understandable that Luxemburg, Lenin and Bukharin saw territorial wars among the great powers as an essential feature of world capitalism. Indeed, Lenin described such wars as “absolutely inevitable.”

When the First World War was followed 20 years later by a second, this seemed a vindication of their assessment. Yet while many Marxists thus saw world capitalism as requiring territorial expansion and invariably generating inter-imperial war, history was to develop in unexpected ways.

The decisive shift occurred following the Second World War. Not only did virtually all of the colonized world decolonize over the next 30 years — contrary to expectations — but domination of the world became increasingly based on market power, not territorial conquest.

Crucial here was the emergence of the multinational corporation (MNC), nationally based but globally operating, which enabled capitalists in the rich nations to use cheap labor and raw materials from the Third World as part of integrated processes of production. This allowed western business to exploit peoples of the Global South without incurring all the costs and risks associated with colonizing their territory. The same applies to the more recent explosion of global lending and debt, which drain wealth from the South to financial institutions in the North: These forms of surplus appropriation too can be performed by largely economic means.

As territorial conquest has receded as a mode of competition among capitalists, so too have inter-imperial wars. After a period in which the great powers fought two world wars in the space of 30 years (1914-45), we have now gone through 60 years without one.

Not that war itself has disappeared. Quite the contrary! But the locus of war has shifted to battles between imperial states and peoples in the Global South who fail to do the bidding of empire. Vietnam is the obvious example here. But the same applies, despite all the local differences, to the U.S. war machine’s adventures in Afghanistan and Iraq.

It is vital to recognize, however, that these are not wars for territorial control. American imperialism certainly hopes to exploit the Global South. But it prefers to do so by economic means, without incurring the political and military costs of neocolonial administration and occupation. Intervene militarily it certainly will. But if it does so not for purposes of occupation, what drives imperialist military interventions today?

Empire of Capital

The most powerful and provocative Marxist response to this question has come from Ellen Meiksins Wood, in her recent book Empire of Capital. In a rich historical analysis, Wood argues that the non-territorial form of imperialism we see today is probably the most quintessentially capitalist one.

After all, she points out, capitalist exploitation rests fundamentally on economic power, organized through markets. Unlike feudal lords, whose ability to extract surpluses depended upon political rank (which gave them land, rents and control of manor courts) alongside a monopoly of military power, capitalists need not hold office, administer justice or bear arms in order to exploit wage labor.

They largely accomplish the latter through purely economic means: ownership of property and market power. Of course, they call on legislators, police, courts and the military from time to time to uphold their economic rule; but the daily process of exploitation does not require use of force or intervention by the courts.

A purely capitalist imperialism might be expected to operate similarly — that is, using property rights and market power to accumulate surpluses, rather than politically administering or militarily controlling conquered territories.

But does this mean that capitalism need not worry about territorial relations, that it can simply ignore the actual global spaces and places in which exploitation and accumulation take place? Not at all.

Against trendy but superficial theories of the disappearance of the nation-state, Wood maintains that global capitalism is increasingly reliant upon a territorially based nation-state system. Rather than dissolve the state, or pursue the unlikely prospect of a single world state, global capital quite happily articulates itself with local nation-states that exercise sovereignty over discrete territories.

Indeed, international capital depends upon such a network of states to enforce property rights, stabilize monetary transactions, insure the subordination of labor, contain social unrest and so on. “The very essence of globalization,” Wood writes, “is a global economy administered by a global system of multiple states and local sovereignties, structured in a complex relation of domination and subordination.” (141)

If anything, Wood suggests, the nation-state system is more essential to capital than ever before, since it and it alone provides the local preconditions for accumulation.

What, then, of war? Here again Wood has a novel account. By no means does she suggest that war withers away in the new form of capitalist empire. She does imply, however, that war between the economically dominant nation-states no longer has the inevitability ascribed to it by Lenin and others.

At the same time, war itself becomes ever-present, given the always unfinished job of policing a truly global capitalism. Since popular protests, regional conflicts and nationalist insurgencies can all create conditions hostile to imperial power, globalized capital can’t invariably rely on local states to secure all the conditions of stable accumulation.

Consequently, the dominant players need to send out a chilling message everywhere — particularly in those regions of the world most hostile to the power of Western capital and states — that resistance to the rule of global capitalist markets will not be tolerated. They need to demonstrate that imperial power, most decisively that of the American state, will intervene anywhere, any time.

Indeed, this is precisely the position that George W. Bush laid out in his infamous post-9/11 speech in which he claimed that forty percent of the nations on the planet might be on America’s hit list. Elaborating on Bush’s doctrine, U.S. officials proclaimed that the American state had entered a permanent war “without constraint of either time or geography.”

This, argues Wood, is exactly what the new phase of capitalist globalization should lead us to expect. Rather than dominate specific parts of the globe, imperialism today is about policing the entire global space of capitalist accumulation.

“The new imperialism,” she writes “seeks no territorial expansion or physical domination of trade routes.” Instead, “boundless domination of a global economy, and of the multiple states that administer it, requires military action without end, in purpose or time.” (144)

The result is an endless proliferation of wars and occupations whose focus shifts across space and time.

Wood’s analysis is especially compelling in grasping the unique dynamics of an imperialism based largely on property and market power, rather than direct control of territories. And while suggesting that military rivalries between the dominant powers will be less acute than during the first half of the 20th century, her argument also clarifies some of the unique features of the doctrines of war and military power characteristic of the U.S. state in the age of globalization.

The New Imperialism

At roughly the same time Wood published Empire of Capital, the distinguished Marxist geographer David Harvey brought out The New Imperialism. Beginning somewhat differently than does Wood, Harvey identifies two specific dynamics at work in imperialism: an economic imperative (to accumulate capital), and a territorial imperative (to control space in ways that enhance capital’s profitability).

Rightly, Harvey points out that these two logics, as he calls them, often exist in contradictory relations to each other. After all, the costs of pursuing the territorial imperative might become “inefficient” in purely economic terms (as could be argued with respect to the soaring price tag on the American occupation of Iraq).

Moreover, his analysis certainly suggests that there might be global asymmetries in the exercise of these two forms of imperial power, with some nation-states operating more as economic than territorial imperialists and vice versa. However, Harvey is less clear about the distinction between direct control of territory and market-based domination that figures centrally in Wood’s account.

His analysis seems at times to veer toward the view of territorial expansion that figured prominently in the analysis of Lenin, Luxemburg and Bukharin. Put simply, Harvey often seems to think of the territorial imperative exclusively in terms of occupation, rather than extension of the rule of capitalist markets and property rights.

Perhaps the most distinctive of Harvey’s contributions is his emphasis on accumulation by dispossession as a central feature of the new imperialism. Reminding us that capitalism originated in dispossessing peasants of their land (which forced them onto the labor market), he points out that similar processes are at work today.

While classical forms of peasant dispossession are accelerating —with millions in Asia, Africa and Latin America abandoning life on the land — so are other forms, involving privatization of formerly public assets and patenting of life forms, particularly of plants and seeds. All such operations take property from the public domain and transfer it to private owners.

Also central to Harvey’s analysis is the idea that tensions and rivalries between capitalist powers (including emerging ones such as China) figure prominently in the era of the new imperialism. While he does not suggest that these will lead to inter-imperial wars, he clearly sees imperialism today as wracked by conflicts rooted in competition over markets and profits.

Here Harvey’s analysis comes up against the arguments of Leo Panitch and Sam Gindin, developed in the annual Socialist Register in recent years, whose work could be said to comprise the third significant perspective on imperialism among Marxists writing in English today.

Probably the greatest strength of the Panitch-Gindin position has been its critique of sterile repetitions of the Lenin- Bukharin theory of imperialism, as if it constitutes an adequate guide to the world in which we live today. Their position also insists rightly on the reciprocal relation between global capital and the nation-state.

In addition, their perspective has played close attention to specific institutional forms of the new imperialism, charting the crucial role of the U.S. Federal reserve in particular as the institution that both oversees the financial architecture of the system and preserves the hegemony of the dollar as world money.

Where their argument is less convincing, I would argue, is in effectively dismissing the idea that antagonisms among the dominant capitalist nation-states shape the world in which we live today. Panitch and Gindin tend to identify the American state, and it alone, as imperial. The rest of the world, including Europe, Canada, Japan and the like, is seen as effectively subordinated to the United States.

At its baldest, this comes close to taking the dependency thesis of the 1960s and 1970s — according to which the Third World was said to exist in a state of “dependence” on the North — and extending it to every nation but the United States. Yet in moving in this direction, their perspective is vulnerable to the criticism levelled against dependency theory for ignoring the class formations and class struggles internal to the Third World, and for understating the important distinctions between, say, Brazil, now the tenth largest economy in the world, and Mali within the global system.

The Panitch-Gindin analysis also skirts the distinction between the economic and territorial logics of imperialism advanced by Harvey. It is undoubtedly true that the American state is far and away the dominant power in military-territorial terms — and this has major implications for world events. But it does not follow that other regional capitals operate outside the economic logic of imperialism.

Indeed the use of property rights and market power to exploit labor, appropriate resources and manipulate markets is not unique to American capitalism. Capitals in many of the wealthiest countries, with the support of the state in their home country, pursue similar accumulation strategies.

It’s true that these capitals often look to the American state as the ultimate watchdog of global capital. But this doesn’t mean that the interests of, say, Boeing and Airbus are identical — as the American-European trade disputes over the practices of these companies in the aerospace industry attest.

By downplaying the distinction between economic and territorial logics of imperialism, Panitch and Gindin tend to dismiss the idea that other powers — such as Europe, Japan, Canada — might behave according to the imperial pattern in their relations with subordinate nations.

Yet to take the case of Canada, there are at the moment significant protests in the global South against Canadian-based mining companies. Popular movements in Mexico, Guatemala and a number of African nations are targeting these Canadian multinationals for their aggressive, neocolonial practices. [See, for example, Cyril Mychalejko’s account elsewhere in this issue of the struggle in Guatemala over the Glamis mining operations.]

It is hard to see why such companies (and the state that backs them) should not be characterized as imperialist. And the same holds true for the operations of European and Japanese capital in the South. At times, however, the Panitch- Gindin analysis suggests that there is something anti-imperial (because anti-American) about countries like Canada, Japan, even France and Germany, asserting their sovereignty in the face of U.S pressures.

This seems to slip into the very problems identified with dependency theory: the substitution of nation for class as the axis of struggle in the world today.

What’s more, such a theory tends also to ignore the internal colonialisms that characterize many of these states. In Canada, the oppression of aboriginal peoples and the predominantly French-speaking population of Quebec are especially significant in this regard. Yet the defense of national sovereignty (for ostensibly anti-imperial reasons) too easily slides into a defense of the power of states founded on the expropriation and oppression of others.

It also tends to downplay the significance of anti-racist struggles by immigrants, refugees and people of color against the national state. The depiction of global power in terms of a hierarchy of nation-states (and largely as the United States against everyone else) thus risks deemphasizing national and racial oppressions as well as internal class divisions.

In fairness, Panitch and Gindin are well aware of the crucial importance of class struggle — and the Socialist Register has a proud record of highlighting global workers’ movements (see especially the 2001 edition). Indeed, they rightly suggest that internal struggles are likely to define the period in which we live. But while Panitch and Gindin are right to underscore the decline of territorial and military rivalries of the sort that characterized the first half of the 20th century, their polemic against the idea of “rivalry” drops inter-capitalist competition out of the equation.

As a result, their account of world capitalism has become excessively unipolar, and their theory of imperialism entirely focused on Washington. Further, in downplaying regional and national conflicts among major capitalist nation-states, their theory runs the risk of promoting a left nationalist outlook in which the struggle against American power becomes the overriding focus of left politics.

This seems especially problematic for socialists operating in those parts of the world with highly developed bourgeoisies which benefit from the exploitation of the global South. To rework their theory in ways that overcome these vulnerabilities will require rehabilitating an analysis of global capitalist competition.

As much as we need to grasp what is new about imperialism today — and all three approaches have real insights in this regard — we need also to delineate the new forms of inter-capitalist competition and antagonism that define the capitalist world system.

The emergence of the euro as a partial competitor to the dollar’s role as a world currency seems to me especially significant in this regard. And in a longer run, the emergence of China as a dynamic economic center may significantly reshape the geography of world power — assuming its rulers can contain social upheaval, develop more sophisticated financial markets and limit the damage of speculative bubbles, none of which is by any means given.

In providing an account of new forms of international capitalist competition today, Wood’s focus on property rights and market power, not territorial conquest, as central to the new imperialism remains vital, as is Harvey’s distinction between the two logics of empire. The Panitch-Gindin analysis of the role of the Federal Reserve in terms of generating the monetary and financial framework of empire adds further insights to the mechanisms of empire, though it requires a more complex account of other currencies, like the euro.

Not surprisingly, there is still much work to do in elaborating a theoretically comprehensive and politically enabling account of the new imperialism. As I have tried to indicate, there is important recent Marxist work to build upon — work which better fits the current conjuncture than do the theories of nearly a century ago. But we also need clear, comradely debates over the strengths and weaknesses of new interpretations as we struggle with the realities of an imperialism we seek to challenge and ultimately to overturn.

Recent Works Cited

Empire of Capital by Ellen Meikins Wood (Verso, 2003)

The New Imperialism by David Harvey (Oxford University Press, 2003)

Socialist Register 2004 and 2005 edited by Leo Panitch and Colin Leys, Merlin Press (London) and Monthly Review Press (New York).

ATC 117, July-August 2005