2
Bob Sutcliffe
The word on everybody's lips
Imperialism, wrote J.A. Hobson at the beginning of the twentieth century, ‘is the word on everybody’s lips’ (Hobson 1902). A hundred years later, when capitalism once again seems to be entering unmapped regions, the word on everybody’s lips is globalization. And globalization now, like imperialism then, is giving rise to new questions, fears and debates. On the right it produces a range of reactions from the triumphalism of pro-capitalist liberals to the pessimism of traditionalist conservatives and cultural nationalists. On the left there is a narrower spectrum of views: from socialists, post-Marxist radicals and environmentalists comes an almost unanimous negative verdict on globalization: it threatens to disempower all national states, undo all social gains and break down ecological defences.
The debates on imperialism of a century ago were also partly driven by terrible fears for the future. Writers like Lenin and Luxemburg in particular saw human society as being rapidly pulled by capitalism into an abyss of violence, war, destruction and barbarism unless it could be rescued by socialism. And yet the nature of that century-old discussion about international capitalism was strikingly different from today’s. It was, perhaps surprisingly, more empirically probing. It was more historically conscious, looking for an understanding of contemporary changes in a longer historical context by seeing both their originality and their continuity. It was more theoretically grounded; and it was more political, spending less time lamenting the trajectory of the world and more on looking for contradictions of the process and for cracks in the enemy’s armour. It was also, therefore, less pessimistic.
A crucial factor determining these differences is that the memorable debate on imperialism was conducted, to a much greater extent than today, largely within a methodological approach derived from Marx – in other words, using the tools of historical materialism including Marx’s critique of political economy Socialists on the eve of the First World War needed more than anything else to understand the nature of nations and their function in capitalism. And yet this was a question for which the answers bequeathed by the founders of historical materialism were particularly incomplete but where the political urgency was particularly great. The political need and the theoretical method combined to produce a flowering of bold and innovative extensions, adaptations and updatings of Marx’s insights into the nature of capitalism. The rich harvest of writings of that time have rightly become points of reference for discussions of international issues throughout the succeeding century. Non-Marxist and anti-Marxist writers have probably devoted more energy to attacking Marxist theories of imperialism than to almost any other aspect of Marxism. This defensiveness has reflected the continued threat to exploiters, oppressors and their apologists, of socialist theory and in particular of historical materialism.
Historical materialism still has no ready-made answers to the new questions raised by globalization any more than it did to those of imperialism. But it does provide us with a long and illuminating history of attempts to analyse related problems and with a uniquely powerful set of tools with which we can try to reach a more complex understanding of the process: how much has changed, what is new and what is old, where are the strengths and weaknesses of a more global capitalism, who are the gainers and the losers, what are the sources of stability and instability, of growth and decline, which problems will globalization solve and which will it create, and what changes are taking place in the relative strength and importance of nations and classes? Just as they did a century ago, socialists today cannot just denounce the latest manifestations of capitalism; they need answers to questions about its trajectory, not to satisfy their curiosity but to know where and how to concentrate their political intervention.
Expressing his impatience with philosophers’ contemplations about the world, Marx insisted that the point was to change it. But that, of course, is not the essential difference between historical materialism and other theoretical approaches. The world is full of people of all possible persuasions who wish to change it, including those who wish to make it in some sense more socialist. In these circumstances, to grasp what historical materialism teaches us, we might do better to invert Marx’s famous dictum. Many people want to change the world; the point, however, is to analyse it. More precisely the point is to analyse it in such a way as to clarify the manner in which it can be changed. It is that combination which is the essence of historical materialism.
Marx's historical materialism: spirals and contradictions
In both his historical and his economic writings Marx often seems to see the world through the metaphor of spirals: movements which have some regular form but which take place in various dimensions at the same time and whose direction of movement may be complex, even ambiguous. Both in his broad account of human history and his detailed theoretical account of the production and realization of surplus value under capitalism the notion of the spiral is particularly clear. To simplify greatly, the grand historical spiral is the twisting movement of human society from a supposed egalitarian primitive communist origin through a series of exploitative societies based on class division, to return in the end to egalitarian communism but with productive power, needs and human capacity all greatly expanded. There are lesser spirals within that huge one; each one of them is the history of a form of class society, starting from progressive origins but eventually generating internal contradictions which become a fetter on human history; a new form of society can then arise and a further trajectory takes place, culminating in the transition from capitalism to socialism and the definitive end of class society (and the beginning of conscious history).
The other clear spiral, the circuit of capital, is what is basically explained by critical political economy, the new science which Marx believed became necessary to uncover the hidden and especially complex nature of exploitation under capitalism. Here the spiral represents the process of producing and reinvesting (accumulating) profit, what he called the expanded reproduction of capital. Capital is involved in a series of continuous circuits in which it can be seen as starting off as money, changing into productive commodities (raw materials, machines and labour power), which the capitalist purchases in order to combine them in the production or labour process. This is where workers produce more value than they receive (the value of their labour power). So more value (labour time) is embodied in the commodities which emerge from the production process than was embodied in those which went into it. The extra or surplus value (in other words unpaid labour) accrues to the capitalist when the new commodities are sold on the market and so the capital has returned to its original money form but in greater quantity. Marx used a famous simple formula to express this constant metamorphosis between money (M) and commodities (C) through which capital makes profits and expands: M − C − C+ − M+ − C+ − C+ + − M+ + and so on, a progression which is best understood as a spiral rather than a straight line.
The two spirals – that of world history and that of the capitalist mode of production – are similar in that, unlike the mathematical one, they are not smooth even in Marx’s purest theoretical vision. The movement of history takes place through disasters, wars, struggles, revolutions and counter-revolutions, so the real world spiral is very irregular. And similarly the movement of surplus-value-seeking capital takes place through unpredictable and unstable markets, strikes and struggles over the production process and distribution and economic crises. Within the spiral, capital must both produce and realize surplus value and the conditions for each process are different and often in contradiction. Almost nothing that ever happens has an unambiguous or uncontradictory effect on the pursuit of surplus value. If wages rise, for instance, capital will lose because costs rise and gain because demand rises. Capitalism, more than any pre-market class society, is at best on a knife edge. In reality it tends to oscillate in cyclical movements of boom and crisis. And, although the crisis theory is never finally and fully developed the spiral image is there too: both in the early Marx of the Communist Manifesto (the idea of ever-worsening crises which with each return put capitalism more than ever on trial), and then much later in Volume III of Capital (the idea that each period of expansion may be longer, more intense and more internationally spread by the expansion of credit, thus making each inevitable crash so much more severe when it eventually comes).
If the spiral is an appropriate metaphor for the social world as seen by historical materialism, what are its virtues compared with another method of analysis which might resemble a different form of movement: for instance, a circle, a straight line or a random walk? The strength of the spiral model is that it makes you think about change as something complex and many-sided, and yet not totally random or chaotic. It encourages you to look for movements in more than one direction, which may have different, even contradictory, consequences, which are full of ambiguities and complex concepts, in which short-term movements may be very different in direction from long-term ones. To put it a bit crudely, it is a way of seeing that history can and usually does move both ‘backwards’ and ‘forwards’ at the same time, but it also provides some idea of what the notions ‘backwards’ and ‘forwards’, or progress and regress, mean. Marx’s models may seem unconvincing when expressed in their purest simplified form, especially in the inspiring much-quoted summary passages of his writing; but when he writes about real events he tends to see simultaneously large patterns and small deviations, ambiguities, nuances, co-existences and contradictions. Too often, however, we want certainty and simplicity and so we try to impose simple patterns and categories on reality. Marx, like most politically active intellectuals, wrote sometimes for political effect and sometimes for analytical clarity, and so ranged between arresting oversimplifications (the treatment of class in the Communist Manifesto) and extreme, nuanced detail (the treatment of class in The Class Struggles in France).
Marx was often, if not always, comfortable with the contradictions and ambiguities which seem to be thrown up by his approach but many Marxists have been allergic to them. Take such questions as ‘Is capitalism (at any particular moment) progressive?’, ‘Should communists support nationalism?’, ‘Is it possible to leap historical stages and build socialism without passing through capitalist development?’, ‘Is capitalism global?’, ‘Is a major capitalist crisis imminent?’. In Marx’s hands historical materialism gave several answers to all of them. Sometimes it is possible to discern a systematic change in his positions (as some have claimed in the case of nationalism, or leaping stages). Sometimes his answer changed because the world had changed. But often the different answers simply reflect the fact that he seldom seems to have thought that a single, yes-or-no answer to such questions was possible or useful.
Taking as given the fact that there are no magic wands enabling everything to be understood, historical materialism’s special claim to be taken seriously is the positive side of its especially large range of interpretations. Some combination of its wide variety of tools, general and particular, larger and smaller spirals if you like, produces at its best a method which does the following things with special power and subtlety:
· Recognizes the ways in which history repeats itself, while discerning the differences between the repeat and the first performance.
· Sees that the same event may have complex and contradictory effects (e.g. a rise/fall of wages on capitalist profitability, imperial expansion, globalization).
· Superimposes different ways of dividing social actors in a multi-layered map which allows us to see interrelations, overlaps and contradictions between class, nation, rural-urban residence (and in principle, even though Marx himself did not do it so well, race and sex/gender).
It is weakest when it:
· Suggests excessively teleological explanations of history. No particular end can be a certainty, and in Marx’s personal conclusions he notoriously swayed between optimism and pessimism about the future.
· Tries to impose rigid stage theories on history (at a certain date everything is feudalism or everything is capitalism, everything is progressive, everything is retrogressive).
· Claims to discern unambiguous linear movements.
So, for example, it is a strength to see all history as the history of class struggle; but a weakness to reduce it to only a history of class struggle; a strength to see that developments can be progressive or retrogressive in relation to a socialist future; but a weakness to see that end like some kind of magnetic north which you always know if you are approaching or not; a strength to see the direction of change, but a weakness to assert too definitively that a particular qualitative transformation has definitively taken place.
If the other side to subtlety and flexibility may be confusion, indecisiveness and a failure to see woods for trees, there are ways around these difficulties. Marx’s own writing is frequently a model of how to avoid such pitfalls and how to be both nuanced and decisive. This problem of how to combine the general and detailed elements in the historical materialist method is, of course, a major feature of the debates about imperialism and globalization which are the subject of the rest of this chapter.
Imperialism, mark 1
I think that it is useful to divide theories of imperialism into two generations: those which emerged just before and during the First World War and those which appeared after the Second World War. The concerns of both were strongly influenced by those particular historical circumstances.
The pioneer of the first generation was not a Marxist but a socialistically inclined liberal. J.A. Hobson regarded British imperialism, especially in Africa, as a fraud perpetrated on the nation by a group of financiers who needed legal and physical protection for their growing foreign investments (Hobson 1902). They invested overseas because growing inequality in the distribution of income depressed aggregate consumer demand in the home market. The remedy for imperialism was, therefore, state-sponsored income redistribution to restore the profitability of home investment. Like Marx before him and Keynes after, Hobson assigned great importance to underconsumption in particular historical circumstances without being a doctrinaire underconsumptionist.
Lenin scorned Hobson’s redistributive remedies, saying that if capitalism could effect such a redistribution it would not be capitalism; but he eagerly devoured Hobson’s empirical material and part of his theorizing on foreign investment. A central item of Lenin’s five-point definition of imperialism was the predominance of export of capital over export of goods.
Lenin’s presence in intellectual history these days is almost as scarce as his tenancy of his Moscow mausoleum is insecure. But, aside from his other claims to fame, in Imperialism (Lenin [1916] 1965) he made memorable and original use of the ideas of historical materialism. That capitalism had been ‘transformed into imperialism’ was shown by five new features: the decisive role of monopoly, the merging of industrial and finance capital, the predominance of export of capital over export of goods, the division of the world market between competing international capitalist monopolies and the completion of the territorial division of the world. The essence of Lenin’s theory of imperialism, however, is not fully captured by these five empirical definitional points, nor even by his summary of them all as ‘the monopoly stage of capitalism’; his central implicit idea was that imperialism was a stage of capitalist history which expressed Marx’s expectation, stated in the often-quoted eloquent and inspiring passage in the Introduction to the Contribution to a Critique of Political Economy, that at some stage all forms of society become retrogressive. Imperialism for Lenin is the stage in which capitalism had entirely ceased to be historically progressive; socialist revolution, therefore, had ceased to be quixotic and became necessary, even urgent. What had brought progressive capitalism to an end was nationally based monopolies. A number of powerful, warring, capitalist nations were destined to engage in a ceaseless fratricidal conflict to redivide the world until social revolution intervened. In other words Imperialism was based on the idea that the globalization envisaged in the Communist Manfesto, though it would implicitly be desirable, was impossible. Imperialism was an epoch of aggression and destruction because the bourgeoisie could not draw ‘from under the feet of industry the national ground on which it stood’ as Marx and Engels had expected (Marx and Engels [1848] 1935). Globalization, seen by Marx and Engels as one of the historical ‘tasks’ of capitalism (and so part of its progressiveness), had become the ‘task’ of socialism. Imperialism in its time, therefore, was a product, but an unorthodox product, of historical materialism.
Imperialism became orthodoxy on the left partly because of the political dominance of officially Leninist communism but also because it seemed to contain ideas of tremendous power which, among other things, offered a perfectly convincing understanding of the First World War, as well as a justification for revolution. It is not surprising that, when World War returned only twenty years later, many wanted to see it as a continuation of exactly what Lenin had predicted. But that involved seeing the proximate cause of the war, the rise of Nazism, as no more than an extreme expression of national monopoly capitalism, an idea which simply seems insufficient to explain the hideous peculiarities of Nazism. Not surprisingly just about every organization professing orthodox Marxism (including Leninism) either careered grotesquely between extremes, or split, over the question of what political attitude to adopt to the Second World War (support for anti-Nazi ‘democratic’ capitalism, neutrality or, re-applying 1916 Leninism, revolutionary defeatism). Starting from a historical materialist perspective a number of writers have produced interesting and subtle accounts of aspects of Nazism. Alfred Sohn-Rethel, for instance, illuminatingly described the serious divisions in German big capital in the face of Nazism and so undermined any simple orthodox interpretation (Sohn-Rethel 1978). And when it comes to explaining the holocaust, the monopoly theory of imperialism has little to contribute. The most original and recent explanations look to very different elements of explanation than those which usually feature in historical materialist explanations (Mayer 1990). Failure both to generate an adequate theory of Nazism and to account for the absence of major conflict between the imperialist powers after the Second World War has left Lenin’s overly simple attempt to see history as consisting of unambiguous and irreversible stages widely accepted in theory but relatively powerless in the face of events.
It was from Rudolf Hilferding that Lenin derived much of his thinking about monopoly and the state. Like Hobson, he is still best known for having been quoted approvingly by Lenin in Imperialism. His Finanzkapital, written in 1910, finally (thanks to Tom Bottomore) published in English in 1981, is not widely read. It is a very difficult book to characterize because it is so rich in ideas about many aspects of capitalism. At times he seems to prefigure most of the subsequent currents in the debate about imperialism and the international aspects of capitalism. What Lenin took from Hilferding was the idea that capitalism had recently passed into a new stage in which the structure of capitalist businesses, their relation to the state and the policies which they implemented had all qualitatively changed. Finance capital does not mean the predominance of banks but the fusion of all forms of capital into what he called its highest form, the trinity of industrial capital, commercial and bank capital and money capital (the Father, Son and Holy Ghost) (Hilferding [1910] 1981: 220). Giant monopolies take possession of the state and ‘diplomacy now becomes the representation of finance capital’ (Hilferding [1910] 1981: 330) and so conflict between nations might be intensified. Later he developed that into a theory of what he called ‘organized capitalism’ in which the existence of giant monopolies brought the possibility of planning, something which led other Marxists, including Lenin, also to enthuse about the organizational achievements of big business. (It should be noted that the standard Marxist theory of crisis at the time was the ‘disproportionality’ theory, in which crises were blamed on market anarchy. Hence the non-market allocation of resources within big companies was admired; and hence in part also Soviet planning took the ill-fated form of detailed central direction.)
One can easily see why Lenin found the pre-war Hilferding so useful in Imperialism. Hilferding himself, however, took a very much more nuanced view of the consequences of the monopolization process for international relations. He saw that it created two simultaneous and counteracting tendencies: one towards more conflict and the other towards new forms of solidarity and common interest between capitalist nations. He did not regard one as necessarily more powerful than the other and remained undecided about which tendency would prevail (Hilferding [1910] 1981: 332).
Hilferding’s ambiguity about outcomes is underlined by the fact that Schumpeter, the ‘bourgeois Marxist’ (Catephores 1994) who believed that capitalist development would tend to produce free trade and world peace, was an even more enthusiastic supporter of Hilferding’s views than Lenin. But Schumpeter added his own understanding to the effect that imperialism was not part of the nature of capitalism in general; quite the contrary. Imperialism was part of the character merely of German capitalism at the start of the century, due to the incomplete nature of the German bourgeois revolution and the maintenance of considerable social power by the reactionary landowning classes with their nationalist backward-looking aggressive policies. If Schumpeter seems ridiculous when he says that Britain, and more particularly the USA, were much less imperialist than Germany (because they were more completely ruled by the rational bourgeoisie), we should bear in mind that by imperialism he (and many Marxist analysts) did not mean colonial acquisition so much as economic and other forms of aggression based on national interest; and that a version of Schumpeter’s idea of imperialism as social atavism has been creatively used to explain Nazism more satisfactorily than it is explained by the crude application of Leninist imperialism theory (Mayer 1990).
In more ways than one the odd-person-out of the first wave of Marxist imperialism theory was Rosa Luxemburg. Like Lenin, and unlike Hilferding, she did believe that the world socialist revolution was an immediate question since capitalism was mutating rapidly into an ever more destructive beast. But her argumentation could hardly be more different. She was not in the slightest interested in monopoly which she never mentioned, and very little interested in different states and their rivalries. She was interested in foreign investment, but for very different reasons from those of other writers. In fact she approached the whole question from another standpoint, and one which has frequently been denounced as mistaken. I believe it was much less mistaken than it can be made to seem.
Luxemburg’s underconsumptionism was more thoroughgoing and doctrinaire than Hobson’s. In The Accumulation of Capital (Luxemburg [1913] 1951) she made an ill-fated attempt to overturn Marx’s algebraic argument in Volume II of Capital, where he expounded the conditions under which self-contained capitalist accumulation is possible. Luxemburg’s analysis of all this is long and, by almost universal consent, mistaken. And her analysis of imperialism was ostensibly based on it. By imperialism she understood something much closer to the conventional meaning of the term (expansion and aggression of rich, especially European, countries into the rest of the world), than Lenin’s special meaning (the monopoly stage of capitalism). She argues that imperialism was necessary because capitalism could not exist or survive as a self-contained system but had a permanent need to appropriate value from not-yet-capitalist areas. Imperialism was, therefore, system parasitism; and it was self-destructive since, once all the pre-capitalist world was absorbed, the necessary underconsumption of pure capitalism must result in catastrophic economic collapse. Her defence of this idea of imperialism was original but the idea was rooted in Marx’s historical materialism.
Marx had argued that a considerable amount of capital was accumulated in the emergent stages of capitalism in not purely capitalist ways, through what he called primitive or primary accumulation, which means appropriating surplus labour in various ways from pre-capitalist activities. Although Marx wrote about this largely as part of the early history of capitalism there is no necessary end to primary accumulation and it could in theory take place at any time, as long as a non-capitalist realm exists. Luxemburg’s theory of imperialism was a novel version of this idea.
The primary accumulation whose role in the birth of capitalism Marx had emphasized, Luxemburg regarded as an essential process during its whole life. She believed that underconsumption and the explanation of imperialism were inseparable. But in fact the possibility of extra-capitalist sources of capital accumulation at any moment in history, not just as the birth of the system, is in no way inconsistent with the denial of general necessary underconsumption. Luxemburg’s ‘primitive accumulation’ theory of imperialism, therefore, has a life of its own quite independent of underconsumptionist errors of reasoning which partly lead to it.
She applies the idea in an illuminating way, especially in her account of how the pre-capitalist Egyptian peasantry are made to pay for the country’s debt. It is a subtle and brilliant analysis of the way the ruling class of one mode of production appropriates the labour of the oppressed class of another. It is a method which has wide applications both in history and in today’s world because it asserts the importance of a process (primary accumulation) which most Marxists had wrongly assumed to be long since superseded.
Luxemburg’s second original stroke was to separate imperialism theory completely from nationalism. Other ideas about imperialism stressed opposition to nationalism in the dominant imperialist countries but legitimized other nationalisms. Luxemburg’s imperialism was not primarily an imperialism of nations but of a predatory mode of production already operating on a world scale. Nationalism for her was not even a legitimate stage on the way to socialist revolution; it was in all senses a deviation. In this she echoed the young Marx.
As far as the historical materialist tradition is concerned I take Hilferding, Lenin and Luxemburg to be the most important writers on imperialism in the period around the First World War. The three had one thing in common, which is the sense that humanity had recently entered a crucial new phase. For Hilferding it was because the nature of the capitalist corporation and state had changed, for Lenin and Luxemburg it was because what kept capitalism progressive and (relatively) peaceful was exhausted: for Lenin because the monopolies had for the first time divided the whole world and so would be obliged to continue to struggle to redivide it, and for Luxemburg because capitalism was rapidly running out of non-capitalist regions and situations from which to supplement its own insufficient capacity to produce profit, its necessary life blood.
This first generation of imperialism theorists represented one of the high points of the application of historical materialist method to understanding the world of international relations. They wrote in a period of extraordinary theoretical fertility. They contributed not by being orthodox and exegetical but by being boldly revisionist and critical. After the crisis of the war the theoretical gains were either lost or soon crystallized into dogmas and new orthodoxies. Ironically perhaps, those ideas which seemed most powerful at the time have not proved so durable in understanding the world a hundred years on, while those which were more marginalized or ignored now seem to offer some insights. But the search by all of them for a way of applying general analytical principles remains a source of illumination.
Imperialism, mark 2
I call the second generation of theorists of imperialism those who have analysed the concept during the last three or four decades. (It is the intellectual family in which I grew up.) They have not always used the term imperialism and they have been principally concerned with relations between rich industrialized capitalist nations and the ‘Third World’ or capitalist periphery. In the immediate aftermath of the Second World War a widespread and successful anti-colonial movement based itself theoretically on the very obvious injustice of imposed foreign rule and the right to national self-determination, which as a principle almost no one denied. The second generation of imperialism theories arose as a reaction to the idea that the end of direct colonialism closed the book on imperialism. So they are all in a sense theories of neo-colonialism or neo-imperialism. The emphasis shifted from the political anti-imperialism of the colonial liberation movements to economic and cultural anti-imperialism. One of the most fertile of these theories, dependency theory, was (ironically in view of its own analysis of the world) an intellectual and political product of a part of the peripheral world where formal colonialism had hardly existed for well over a century (Latin America).
There is surprisingly little continuity between the first- and second-generation theories of imperialism. This is partly due to the special role of Lenin in the debate. Almost unique among the contributors to the first-generation theories, Lenin both died in his bed (supposedly) and subsequently enjoyed general reverence on the left. His book Imperialism was, at least for a time, at the top of the all-time world best-sellers’ list and in orthodox, and even some not so orthodox, circles was uncriticizable. Yet, while Lenin had in the end espoused in theory a fairly radical national self-determination position, the relations between developed and underdeveloped countries were scarcely at all at the heart of his concept and theory of imperialism. He seems to have expected imperialism to accelerate the industrialization of poor countries, almost the opposite of what second-generation imperialism theory usually argued. And, unmentionable irony of ironies, the world of the 1960s looked not so much like the permanent intercapitalist warfare predicted by Lenin, but much more like the world predicted by the person who argued that the First World War would not resolve all the contradictions existing between the main imperialist powers, that ‘the subsequent peace will be no more than a short armistice’, but that eventually ‘there is nothing further to prevent this violent explosion finally replacing imperialism by a holy alliance of the imperialists’, which he added for good measure would be dominated by the United States and return to a regime of freer international trade. I am referring to the ‘renegade Kautsky’ (Kautsky [1914] 1970; Wollen 1993). The vehement denunciation of Karl Kautsky by the Bolsheviks, for daring to suggest that there might be a capitalist world beyond the imperialism of the early twentieth century, helped lead to a general decline in interest in Kautsky’s writing, which is only now beginning to recover.
The second generation of imperialism theorists had an (unstated and unstatable) Kautskian perspective, based not on prediction but on observation, and one writer has drawn attention to the consistency of Wallerstein’s world-systems theory with Kautsky (Wollen 1993). But they were in general less stage theoretical than Kautsky and indeed than all the other first-generation theorists. For all those writing at the start of the twentieth century imperialism was a new phase, stage or epoch of capitalism. It is true that one of the pioneering second-generation theorists, Paul Baran, author of the influential The Political Economy of Growth (Baran [1957] 1973), is associated (in this work with Paul Sweezy) with a theory of the monopoly stage of capitalism (Baran and Sweezy [1966] 1968); but most of the writers in the tradition of dependency theory (Andre Gunder Frank, etc.) and world-systems theory (Immanuel Wallerstein, etc.) see the polarization of centre and periphery as a permanent feature of capitalism since the seventeenth century. But if that eliminates the problem of an oversimplified attribution of stages of capitalism, it itself contains its own simplification, relating to the connection between mode of production and social system, that of simply defining the world as capitalist since the seventeenth century. These theories have been sharply criticized for implying a definition of capitalism based on markets and not production. But I think that the main problem with them is different: that they reject stage theories too thoroughly, and so they reduce 400 years of capitalist history to a few permanent features, the main one of which is the polarization between centre and periphery of a single world economy. This makes it very difficult to identify important historical changes, even if we do not want to interpret them in the form of a rigid stage theory.
The strength of this second-generation imperialism theory is the way in which it has revealed the multiple sources of international economic inequality, the multiple forms of economic exploitation, and political dominance of the South by the North. Its weakness has been its inability to account for those developments which have not simply been a continuation of North-South polarization, for instance the extraordinarily rapid capitalist industrialization of a number of Asian countries during the last forty years. Lenin had expected imperialism to have such a result, though he did not attach much importance to it since it took place in what he regarded as an epoch of irreversible social retrogression. But the Leninist and the second-generation imperialist theorists coincide in the view that capitalism has now lost all progressive aspects. Such a totally negative position has been, I believe, a source of weakness in left analysis because it leaves the left with an insufficient explanation of the resilience of capitalism in the world, either economically or ideologically. Both rigid stage theories and more timeless theories like world-systems both in different ways set up obstacles to understanding historical change in a nuanced and dialectical way. With one the changes are regarded as too complete, with the other they are insufficiently noticed. To revert to the terminology of the second section, there are too many straight lines and not enough spirals.
Globalization, marks 1 and 2
There is not the slightest doubt that in the last few decades many of the national barriers to the global functioning of capitalism have been coming down. Most indicators of global integration of capitalist economies have been on the rise for some time. That there is globalization in this sense is beyond dispute. But many current ideas about globalization go much further than that: they argue that these changes have qualitatively changed the system, that it has entered a new and unprecedented stage.
It is possible to distinguish two generations also in theories of more recent globalization, as there were about imperialism, though now the speed of reproduction has risen. The first generation dates from the early 1970s and presented itself explicitly as a replacement for imperialism theory (Sklar 1976). A group of Marxist historians formulated a theory which they called post-imperialism, just before the epoch of post-everything. Their ‘post-’ referred more to Leninist than dependency imperialism theory. They argued that the capitalist class had ceased to be divided into different nationalities and had fused into a single international corporate bourgeoisie. Capitalism was so internationalized that national borders no longer had much significance and so nation-to-nation conflicts were being replaced by class struggle at the global level. The theory was presented with a lot of ‘back to Marx’ rhetoric, though the relation between the conceptual and empirical was problematic. Whether going back to Marx was justified by the fact that Marx had always been right or that the world had changed to make him right (again) was not made clear. The post-imperialist hypothesis regarded a network of multinational corporations as the form assumed by the modern global capitalist class. There was in this view quite a strong current of Schumpeterism: the idea that capitalism never ceases to be progressive, but also some notion that the globalization of capital will lead to the globalization of the working class also and therefore the development of an international revolutionary movement.
This is evidently a very similar conclusion to that found at about the same time in the work of Bill Warren (Warren 1980). The difference was that Warren was reacting especially to second-generation imperialist theory on the grounds that it had been responsible for the systematic substitution of nation for class and submerged socialism in a morass of nationalism. With Warren, too, there is plenty of ‘back to Marx’ rhetoric as well as the same ambiguity about whether imperialism really had existed and had gone away or whether it had never existed (i.e. Marx had been right all along).
Warren and the post-imperialists failed to gain much following for their protoglobalization hypotheses in spite of the fact that the more orthodox anti-imperialist left found them difficult to refute. There was a general unwillingness on the left at that time to abandon the notion of imperialism as the central feature of the world, which both versions of the proto-globalization idea demanded. Within a short time, however, with the exception of a few sceptics, most people had come round to some version of the hypothesis of globalization.
Globalization hypotheses are supported, sometimes very loosely, sometimes more rigorously, with a series of facts. I think that this empirical basis is very weak as I try to show in commenting below on some of the key facts which are frequently adduced to show globalization.
1. International trade is rising in relation to the value of production. It is true that trade has risen faster than production since 1950, although the fact tends to be greatly exaggerated by inappropriate measures. But its present relative level is not very far above what it was just before the First World War. Thus, relative to production, there is not an unprecedented level of international trade. Part (admittedly a small part) of the present large figure is due to the fact that some single countries have divided; and if the European Union is ever treated as one country international trade will decline enormously (Sutcliffe and Glyn 1999).
2. Foreign direct investment has risen in relation to the size of the economy. Again it is true that the percentage of foreign in total investment has been rising (much more erratically than trade). But here too the figures suggest that, at most, the relative levels of 1913 have been regained. Again there is globalization but not to unprecedented levels.
3. Foreign production has become more important than exports (an unconscious echo of Lenin’s idea that the export of capital had become more important than the export of goods). Much is made of recent estimates that the value of sales by foreign subsidiaries became around 1990 greater than the total value of world exports (UNCTAD 1999). It is argued that this represents a qualitative turning point after which international integration of production dominates arm’s-length transactions between the producers of one nation and another. I very much doubt the significance of this statistic. Many so-called foreign subsidiaries of multinational companies are little more than sales agencies for their parent companies. This means that exports may be counted twice, once in the figures for exports proper and again in the figures for the foreign sales of subsidiaries. The genuine foreign sales are, therefore, much smaller than they appear.
4. Much or even most international trade takes place between different branches of multinational corporations (intra-trade), thus suggesting that there is a very high degree of cross-border integration of productive structures. I have only been able to find two substantial studies of this question, for the USA and Japan. They both show some upward movement in intratrade though it remains in the case of the USA a little over one-third, a figure which first began to be widely quoted as long ago as the 1960s. And again some of the intra-trade is simply sending goods to a sales subsidiary to sell in a foreign market, so for what it implies for the integration of the productive system it is not much different from non-intra-trade.
5. Multinational corporations dominate the world. Big corporations have dominated the world economy in some sense for rather a long time though probably never more so than the great trading companies in the eighteenth century. This argument, however, suggests that the degree of dominance has increased. This could be due to higher levels of monopoly and concentration. The evidence does not support that and globalization in many areas has increased competition. All big capitalist corporations are, and have been for some time, multinational in the sense that they export goods and invest abroad. A few have integrated production structures, hardly any either have internationally integrated managements or have lost a clear national identity (Ruigrok and van Tulder 1995; Doremus et al. 1998). Moreover, many common statements about the quantitative weight of multinational corporations are grotesquely exaggerated. Usually they wrongly compare the sales (not value added) of firms with the national income (value added) of countries or the world. I think that the best estimates of their importance is that the 100 biggest multinationals produce about 5 per cent of the world’s GDP (2.5 per cent abroad); their share of the world’s capital stock is a little lower than this; and all 44,000-plus multinational corporations (defined as such by UNCTAD) produce about 22 per cent of world GDP (7.5 per cent abroad) (UNCTAD 1999; Sutcliffe and Glyn 1999). That may be enough to dominate the world in some sense but it is much, much less than is frequently asserted.
Globalization hypotheses are more than just a series of statistical exaggerations. There are, as with everything, hard- and soft-core versions of the globalization argument. The soft-core one says simply that things are getting more global (for the most part undeniable), that this is producing more precariousness for human economic life and that the national state is losing the power to do anything about it. The world has become a single macroeconomic space so national economic policy can no longer exist and life is becoming an ever more cut-throat struggle of all against all. Some of that, I think, is true although it tends to accept too readily what the rulers of national states would like their electorates to believe (that they can do nothing to stop the consequences); and it tends to exaggerate the difficulties of producing a response; and that generates pessimism or at best a visceral anti-globalistic or nationalistic response. It also tends to create the nostalgic illusion that things were much better before.
By and large, however, this version of globalization, while it notes that there have been very rapid changes in indicators of globalization, tends to remain theoretically in the camp of second-generation imperialism theory. The North-South polarizing effects of the new global economy are emphasized and global institutions are seen as really being not so much global as ultraimperialist institutions of the rich, imperialist countries. The idea that multinational corporations from countries of the North are the main agents of economic exploitation is already present in second-generation imperialist theory, as is the idea of the powerless state in dependent countries. So, while earlier the protoglobalization ideas of Warren and the post-imperialists demanded a choice between believing in imperialism and believing in globalization, many new versions of globalization theory do not, and that has made them more digestible on the left. Globalization, in this interpretation, represents no new stage, though it is often held to mean a major intensification of long-established tendencies.
The hard-core version of globalization, however, goes considerably further to argue that the world is not only an economic unity but also a social unity with a unified global class structure. The capitalist class in particular has formed itself into a global class for itself. An immanent process has reached its completion. The post-imperialist theorists took this position and it is now quite common though it travels under a different name.
How does globalization in this sense relate to imperialism? In the first place, it apparently clashes frontally with the Leninist concept of imperialism. That took as a starting point the fact that different national capitalist classes were destined to be eternally fratricidal and incapable of forming a global ruling class. They would be constantly redividing the world at great cost to everyone. This is why capitalism urgently needed to be replaced. Post-imperialism theorists, as the name of their idea implied, accepted Leninist imperialism as appropriate for a particular epoch but believed it had been superseded. The strong versions of second-generation globalization theory imply, but seldom explicitly state, the same change of stage. Logically, the idea that the world is a single social and economic unit implies that nations no longer have any importance as social divisions and that the class struggle now pervades everything and has, therefore, assumed a global dimension.
Historical materialism, globalization and politics
So, the hard-core version of the globalization hypothesis, once again, may look like a return to what the young Marx and Engels argued. There is, however, a notable difference. Marx, Engels and many other nineteenth-century socialists more generally saw globalization as a development which produced welcome opportunities from the point of view of socialism. It could form the basis of an international working-class movement and dispel narrow-minded nationalist notions. Yet today globalization receives an almost universally hostile reception from the left. It seems to be assumed that it can only represent more complete capitalist control of the world and portends both resistential weakness and economic damage for oppressed and exploited classes.
At least at a superficial level there are some very striking differences between this widespread pessimistic reaction to globalization in today’s left and the positions of the early practitioners of historical materialism. In 1848, Marx gave a speech in Brussels about free trade much of which would have delighted a 1999 demonstration outside the World Trade Organization with its devastating attack on free trade as nothing more than freedom for capital (Marx 1848). But just when he seemed to be leading up to a conclusion denouncing free trade, he concluded without hesitation that between protectionism and free trade he, as a socialist, would have to support free trade because it was destructive of the status quo and not conservative. In saying this he was not supporting capitalist free trade; he was looking, within the possible trends of the ruling capitalist system, for the best circumstances for the development of world socialism. The first generation of imperialist theorists also were unanimous in considering that the tendencies away from free trade in the early years of this century were reactionary. Even more, while today’s left denounces the multinational companies as responsible for almost all evil, Lenin and others of the first generation of imperialism theorists lamented the fact that capitalism increasingly identified with a national interest instead of building world-wide economic units which would strengthen the development of a world working class and pave the way for a globally planned socialist economy. For Lenin and many others the huge capitalist corporation was a pointer to the new rationality of socialism.
In pointing to these contrasts between then and now I am not trying to say that it is appropriate simply to repeat what they said then. But we should try to answer the question of why there is apparently so much difference in the political answers offered by enemies of capitalism between these two epochs. Were they wrong? Or has the world changed so much that their answers have lost their relevance? I believe that correct answers to these questions would include some elements of ‘yes’; but also many elements of ‘no’. And if that is true should the left of today not also ask rather more insistently a third question: are we wrong?
Marx famously remarked (in ‘The Eighteenth Brumaire of Louis Bonaparte’, 1852), that human beings ‘make their own history. But they do not make it … under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past’ (Marx [1852] 1935: 99). What that surely means is that political action to be effective (to make history) cannot ignore existing forces and movements. Whatever political destination is desired for the future, the route is necessarily constrained by the partially unstoppable movement of the spirals of history. There are moments in history where there may be no alternative outcomes. But more usually a given economic or political situation can evolve in a range of different possible directions. But not in just any chosen direction. The art of applying historical materialism to the craft of politics is to identify the real alternatives, and to see how interventions can influence the development of reality towards the most progressive of those possibilities.
Lenin once said that ‘there are no completely hopeless situations for capitalism’. Using the same logic we should say that also there are no unambiguously triumphal situations either. According to historical materialism, capitalism is not capable of attaining permanent stability. My interpretation of the historical materialist approach is that from the standpoint of an anti-capitalist movement, political action (the making of history) seldom involves either direct confrontation with the enemy, or putting the clock into reverse and returning to some pre-existing state. It involves applying the principles of certain eastern martial arts: seeing where the enemy’s contradictions are and acting on these weaknesses by deflecting the energy of the enemy to one’s own advantage.
Such an approach emphatically does not lead to a simple conclusion that globalization will in some automatic way produce global socialism. It clearly will not. But nor is it simply a movement in the opposite direction. Like all significant historical changes, while it creates new social problems it also creates both new political needs and new political opportunities.
The current pessimism about globalization is, I think, partly a legacy of a previously mentioned aspect of the Leninist way of looking at capitalist history: as a process where a historically progressive phase eventually but decisively, permanently and unambiguously, gives way to a stage in which capitalism can no longer be anything but retrogressive. If that is the case, then no change in capitalism can ever be welcomed, not even in the partial or sceptical or ironical way in which Marx welcomed some changes. Not only is this far from the spirit of the socialists of the nineteenth century but, more important, it seems to be a false assessment of the real possibilities of turning the present changes in capitalism to the advantage of exploited and oppressed people.
Many statements about globalization overestimate the strength, unity and consciousness of the capitalist class by assuming that recent changes are well planned, conscious and necessarily successful. Freer international markets, however, involve great danger for capitalists. They complicate the chain of conditions which have to be satisfied in order for surplus value to be effectively produced and realized and increase the dangers of instability. Capital, especially the most global kind, speculative capital, can easily be wiped out by international instability. It is no coincidence that George Soros has become one of the leading advocates of new controls on liquid capital movements. You do not have to have an all-out orthodox Leninist perspective, or to think that world war is round the corner, to see that fratricidal conflicts between capitalist enterprises and capitalist states threaten to break out almost every day. The global unity of the capitalist class and the supersession of the nation-state are largely myths.
If one problem with the pessimistic approach to globalization is that it sometimes does not see any political way out, another is that it sometimes advocates a backward-looking way out. Identifying globalization as the problem tends to suggest deglobalization – nationalism or localism – as the logical solution. If history is a straight line and we do not like the road ahead there is nowhere to go but back; but if it is a spiral we have more possibilities. If the problem is identified as capitalism and not globalization, and if capitalism is global, then that suggests that anti-capitalism is the solution and that anti-capitalism must also make itself global, producing counter proposals not to globalization as such but to global capitalism and capitalist globalization. In part that means socialist and democratic globalization, an idea whose time should have come or rather returned. There seems to me to be no reason to think, as today’s pessimists do, that larger social units (even the world economy) are more difficult to democratize than smaller ones (such as the village and the family).
In short, we would, I think, be entirely faithful to the method of historical materialism to recognize important new, but not unprecedented, elements of globalism in the current structure of world capitalism, but not to interpret that as some new stage or complete qualitative transformation; to accept that the nation-state remains important and necessary to the capitalist class, which therefore continues to be by and large national, although with increasing elements of international collaboration and in particular cases fusion. Far from being an accomplished fact, globalization, like any other major social and economic tendency, is partial, biased, ambiguous and contradictory. Conflict between national capitals remains important, and so does the exploitation, domination and marginalization of many countries within the globalizing capitalist structure. The real growth in the globalized aspects of capitalism, however, are great enough to require a resistance movement which can transcend national boundaries at the same speed as or, better still, faster than capital can. So far international resistance has lagged behind capitalist globalization. But there are increasing signs of a growth in international movements of non-capitalist classes. Part of the progressive aspect of capitalist development, as seen by Marx, was that, while developing the productive forces, it also developed the strength of the classes which would bury it. I believe that that process goes on and can be accelerated in the new period of globalization.
Note
· I thank Jonathan Rée for very helpful comments on a draft of this chapter.
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