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Tuesday, 13 May 2014

What is the Current Phase of Imperialism?By Michael Burke

A new situation requires a new analysis, and each new factor in the situation

requires a specific and concrete analysis, placing it and its weight correctly in

the overall situation.

n world politics, the new situation is that the !" was una#le to #o$# "yria, it

finds itself negotiating with, rather than #o$#ing ran, and its coup in the

!%raine $ay not #e entirely successful in drawing &ussia's neigh#our into

(AT)'s sphere of influence.

This overturns recent history. The overthrow of the "oviet !nion in 1**1 wasacco$panied #y the !"+led ulf -ar. "ince that ti$e, the !" and its various

allies have #o$#ed, invadedor intervened in "o$alia twice/, ugoslavia, aiti,

Afghanistan, the hilippines, i#eria, raq, the Maghre#, e$en, i#ya, a%istan,

i#ya and "outh "udan. The !" has also led, organised or outsourced countless

other interventions, overthrown govern$ents and desta#ilised econo$ies in

pursuit of its interests. There has also #een a series of coups and atte$pted

coups in atin A$erica with varied success, and the so+called colour

revolutions' in 5astern 5urope to install pro+!", pro+(AT) govern$ents, as well

as the !" hi6ac%ing of the Ara# "pring.

owever, the econo$ic rise of 7hina has warranted a strategic pivot' towards

Asia in an atte$pt to cur# the rise of the only econo$y that could rival !"

supre$acy in the foreseea#le future. iven this a#solute priority and the

reduced circu$stances of the !" econo$y, it has #een necessary to suspend

new large+scale direct $ilitary interventions elsewhere.

This cur# on !" power has had i$$ediate and #eneficial consequences for

hu$anity. "yria could not #e #o$#ed and neither could ran. n these, &ussian

opposition to !" plans was a %ey political o#stacle, especially as the !" wanted

to deploy $ultilateral and $ultinational forces to do its #idding and needed thei$pri$atur of the !( "ecurity 7ouncil. The !" response to this #loc%age has

#een to increase pressure on &ussia, $ost dra$atically with its ouster of the

elected !%rainian govern$ent in a coup and its atte$pt to #reach the country's

agreed neutrality #y #ringing it into (AT).

This cur# on !" power, however li$ited or te$porary, should #e welco$ed #y

http://en.wikipedia.org/wiki/List_of_wars_involving_the_United_Stateshttp://en.wikipedia.org/wiki/List_of_wars_involving_the_United_States

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all socialists, #y all de$ocrats and si$ply #y all those who desire peace.

nstead, we have the strange spectacle that so$e on the left have raised the

charge that &ussia is i$perialist, or that 7hina is, or countries such as 8ra9il, or

ndia or "outh Africa aresu#+i$perialist':

This is not a coincidence. n the !" "tate ;epart$ent's frustration it has

produced every type of calu$ny againstutin, including that he is an

i$perialist

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the$ as a $easuring rule for $odern i$perialis$. $perialis$, li%e all

pheno$ena, $ust #e analysed concretely, and only after ta%ing all the $ain

factors into account, and so esta#lish its laws of $otion.

Changing politics

Three decisive changes in world politics have occurred since enin wrote his

great wor%. As we shall see, the world econo$y has not stood still either, li%e all

pheno$ena it too has continued to flow', in enin's words.

The first decisive political change was in the contest over who would #e the

do$inant i$perialist in the world, which #egan in 1*14 was resolved #y 1*4C.

The !" had #eco$e the single do$inant i$perialist power and would

countenance no serious rivalry fro$ other i$perialists. The #est they could hope

for was to play so$e su#ordinate #ut $utually #eneficial role as a 6unior ally of!" i$perialis$.

The second decisive change too% place #etween in the short period #etween

enin's writing the pa$phlet and its later reface. The &ussian &evolution $eant

that for the first ti$e the wor%ing class was a#le to lay hold of and $aintain

state power. "ince that ti$e, and notwithstanding the overthrow of the "oviet

!nion, there have #een continuously so$e parts of the glo#e where the wor%ing

class holds state power, including 7u#a, Diet (a$ and Dene9uela. )f these

wor%ers' states #y far the weightiest in the world econo$y is 7hina. n all these

cases, private property in the $eans of production is not the do$inant for$ ofownership in the do$estic econo$y. owever, all are o#liged to operate in a

glo#al capitalist syste$ in which i$perialis$ do$inates.

Ta%ing advantage of this contradiction, the third change is that the anti+colonial

and national li#eration struggles were a#le to free the great #ul% of hu$anity

fro$ #urden of direct colonial rule, and in so$e cases this led ulti$ately to

socialist revolution.

These three facts, !" supre$acy within the i$perialist #loc, the continuous

e?istence of wor%ers' states and the wave of direct decolonisation, are entirelynew factors. They are decisive in understanding that the $ain antagonis$ in

the world is no longer inter+i$perialist co$petition which has certainly not

#een a#olished/.

(ow, the pre+e$inence of the !" and the e?istence of wor%ers' states with real

political and econo$ic weight $eans that principal contradiction in world politics

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is #etween the !" and its i$perialist allies versus the wor%ers states and the

countries oppressed #y i$perialis$ including the se$i+colonial world and the

re$aining colonies/. )f these, the #iggest, the weightiest threat to !" econo$ic

interests is the rise of 7hina.

Changing economics

n Imperialism the Highest Stage of Capitalism, enin su$s upthe $ain

econo$ic features of i$perialis$ in that period. To so$e readers these are well+

%nown, #ut they are worth repeating here. -orth repeating too is his own

characterisation of this definition, which is that it was a special stage in the

historical development of capitalism which has continued to develop/.

The five features identified #y enin are as followsE

1/ the concentration of production and capital has developed to such a highstage that it has created $onopolies which play a decisive role in econo$ic life

2/ the $erging of #an% capital with industrial capital, and the creation, on the

#asis of this Ffinance capitalG, of a financial oligarchy

3/ the e?port of capital as distinguished fro$ the e?port of co$$odities

acquires e?ceptional i$portance

4/ the for$ation of international $onopolist capitalist associations which share

the world a$ong the$selves, and

C/ the territorial division of the whole world a$ong the #iggest capitalist

powers is co$pleted.

enin's starting+point is the concentration of production into $onopolies, which

is the #asis of i$perialis$. This concentration is the inevita#le outco$e of free

co$petition' #etween capitalists and has as a result risen e?ponentially since

the pa$phlet was written. 7oncentration $eans capitalist rivals are eli$inated,

and so increased profits require expansion overseas.

The increase in concentration of production and trend towards $onopolisation

can #e illustrated #y the fact that the largest co$panies in the world are now

larger than $ost countries. The tenth largest co$pany in the world

has revenues of well over !"H200#n, andonly 40 countries in the worldhave agreater level of annual ;. n enin's ti$e, 44I of all !" industrial output was

carried out #y 6ust 3,000 fir$s. (ow the output of6ust 130 fir$sis equivalent to

4@I of !" ;

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the leading Bortune C00 glo#al fir$s, the sa$e as its ne?t three i$perialist

rivals together. At the turn of the twentieth century !" "teel was the largest

co$pany in the world, with average net profits of !"H34$illion. This is

equivalent 6ust under !"H1 #illion in today's ter$s. n 2013 the $ost profita#le

co$pany in the world was Apple, with profits of !"H42#n. Aside fro$ the few

loss+$a%ers, $ost co$panies in the Bortune C00 had profits far in e?cess of

!"H1 #illion in 2013.

The role of #an%s has also increased, #ut in an even $ore pronounced way.

enin uses detailed data to show that the * leading #an%s in er$any held

deposits of 10 #illion er$an Mar%s. Two #an%s in the !", owned #y the

plutocrats J Morgan and &oc%efeller had deposits equivalent to 11 #illion

er$an Mar%s. These were equivalent to !"H2.4 #illion and !"H2.K #illion in

1*13 5L7A(5 &AT5" . n today's ter$s these are equivalent to !"HCK #illion

and !"HK2 #illion respectively. n 2013, er$any's largest #an% ;eutsche 8an%alone had deposits equivalent to !"H2 #illion. J Morgan 7hase is the #iggest

#an% in the !" which in 2013 held deposits of !"H 1,2@@ #illion. At the sa$e

ti$e, enin identifies the growth in traded securities to the equivalent of 4*

#illion Brench Brancs. This is the equivalent of !"H 2,00 #illion in today's

ter$s. 8ut this is a fraction of the current level of international clai$s held #y

#an%s in the i$perialist centres, of !"H32,@C* #illion

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first i$perial power, 8ritain in reland, had #enefited fro$ a higher rate of

e?ploitation in its colony, with the i$perial powerpoc%eting the e?cess'

profitseven #eyond the rate of e?ploitation in their own do$estic $ar%et. As

the #rutality and rapaciousness of the regi$e increases, so too does its

parasitical nature. This leads to decay and its vulnera#ility to co$petition fro$ a

$ore vigorous syste$ of production.

At the #eginning of the twentieth century 8ritain was the pre$ier trading nation

in the world, via its e$pire. owever, enin points out that 8ritain's profits fro$

its foreign and colonial trade was 6ust one+fifth of its profits derived fro$ its

overseas financial invest$ents. 8ritain had already #eco$e a rentier state,

pri$arily living off these invest$ents.

8ritain had run a trade deficit, the value of i$ports e?ceeding the value of

e?ports for $ost of the period fro$ the 1@*0s to the out#rea% of the 1*14+1@war

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The $uch greater si9e of the !" do$estic $ar%et, the consequent scope for

increasing the division of la#our and the greater productivity of its industries all

$eant the capitalist $ode of production retained a degree of vigour there that

had long #eco$e a distant $e$ory in 8ritain. This was reinforced #y the pre+

e$inent position of the !" following the 1*14 to 1*4C world wars.

owever the !" too has #eco$e a net i$porter of capital over a different

ti$escale. This is shown in 7hart 1 #elow. The !" #eca$e an i$porter of capital

#ecause the growth of the econo$y was insufficient to $aintain #oth the growth

in living standards of the population and to fund the Diet (a$ war. The !"

#eca$e an i$porter of capital in the course of the Diet (a$ war and in order to

pay for it.

Chart 1. US Current ccount Balance 1!"# to 1!$#% US& 'illions

"ourceE Bederal &eserve 5cono$ic ;ata

The !" did not #eco$e an econo$ically oppressed nation while it was raining

$ore #o$#s on Diet (a$, aos and 7a$#odia than were dropped in the whole

of the "econd -orld -ar. nstead, imperialism and the dominant imperialist

power has entered a new phase, where it sucs in capital from the rest of the

world. t does so without in advance #eing either a net e?porter of goods or of

capital.

As enin and a host of co$$entators had shown, in an earlier phase

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i$perialis$ had #een an e?porter of capital. 8y the early 1*0s the !" and

8ritain, long #efore/ had #eco$e i$porters of capital.

ersistently incurring new net de#ts will tend to run down any e?isting net stoc%

of overseas capital. This is precisely what has happened. The !", as well as

Brance and 8ritain are i$perialist powers who own nonet overseas assets, that

is to say, their overseas de#ts are greater than their overseas assets. This is

shown in Ta#le 1 #elow.

(a'le 1. )et International In*estment Position +#1+% US& 'illions

"ourceE MB, nternational Binancial "tatistics

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Ta%en together these five i$perialist powers have effectively no net overseas

assets, as the net assets of Japan and er$any are effectively #alanced #y the

net de#ts of the !", Brance and the !N. et in 2012 they received a net !"HC2K

#illion in net pay$ents of interest and dividends fro$ the rest of the world.

-ithin this #loc, the !" is clearly pre+e$inent. t e?tracted $ore interest fro$

the rest of the world than Japan, despite having net de#ts greater than the level

of Japan's net assets. Brance and the !N were 6unior partners in this role. 8y

contrast, #oth Japan and er$any are a#le to sustain trade surpluses #ecause

of accu$ulated levels of productivity and in Japan's case severe restrictions on

i$ports/. Bor the$, there is no i$perative to engineer invest$ent inco$e

surpluses, these are a natural outco$e of their trade+driven accu$ulation of

overseas assets. 5ven so, along with Brance and the !N, they too play a

supporting role in the glo#al syste$ of i$perialis$ and #enefit fro$ it.

The !N is undergoing a particular period of tur$oil in its overseas accounts,

associated with the continuing crisis of its #an%ing syste$ and their overseas

operations. n the prior year the surplus was H42 #illion. 8ut it re$ains to #e

seen to what e?tent the !N can recover this position=.

,inance Capital

A capitalist econo$y is one in which there is generalised co$$odity production.

Money is the universal co$$odity, standing in for all other co$$odities in theprocess of e?change. The control over the direction or allocation of $oney

capital therefore #eco$es decisive in the develop$ent of capitalis$ itself. The

$ediu$ for this allocation is the #an%s

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capital overseas than it is willing to pay. This e?plains how it is possi#le for the

!" to draw in interest inco$e when it owns no net assets. At the sa$e ti$e,

the !" and its 6unior partners in Brance and the !N have not grown as rapidly

as the world econo$y over a prolonged period, and yet they are continually

a#le to draw in capital fro$ the rest of the world. This too is only possi#le

#ecause of the !" do$inance over the glo#al financial syste$, with 8ritain and

Brance playing an i$portant su#ordinate role.

The !" do$inates all glo#al transactions through the trading pre+e$inence of

the !" ;ollar, which accounts for appro?i$ately @CI of all B)&5( 5L7A(5

transactions.

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disappoint$ent when the !" was o#liged to refrain fro$ #o$#ing "yria/ is

e?plained #y this i$perative to plunder the rest of the world. !ilitar" dominance

and repeated shows of militar" force are necessar" to underpin a s"stem of

global financial extortion.

The negative effects of i$perial do$ination are not $ost frequently felt through

war. This is 6ust the $ost e?tre$e sy$pto$. nstead, a consequence of the

do$inance of the !" and its interests in glo#al finance is that even any changes

in the econo$ic or $onetary conditions of the !" rever#erate glo#ally. A#rupt

changes in the !" repeatedly $anifest the$selves as regional or even glo#al

crises. This is shown in 7hart 2 #elow.

Chart +. US ong/(erm Interest 0ates and ,inancial Market Crises

"ourceE Bederal &eserve 5cono$ic ;ata

The chart a#ove shows long+ter$ !" interest rates and so$e of the $ain

financial $ar%et crises. The yields on !" govern$ent de#t change if there is an

alteration in the #alance of supply and de$and for capital in the !". This was

the case when &eagan ca$e to office and hugely e?panded the !" #udget

deficit. t has also #een the case with increasingly $odest/ econo$ic revivals

in 1**4, in 1** and the very $ild econo$ic upturn in 2012. n all cases the

increased de$and for capital in the !" led to a rise in !" long+ter$ interest

rates.

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The consequence was that capital flowed out of the se$i+colonial world and into

the !", leaving the for$er in crisis. This occurred with the atin A$erica de#t

crisis of the early 1*@0s, the glo#al financial crisis in the early 1**0s, the Asian

financial crisis of 1** and 1**@. The recent e$erging $ar%et' slowdown is

only $ilder to date #ecause the rising de$and for capital in the !" to fund

rising consu$ption has #een e?tre$ely $odest #y historical standards. et

a$ong the countries $ost affected #y this slowdown include 8ra9il, &ussia,

"outh Africa, Tur%ey

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the !" had esta#lished its supre$e do$inance over the rest of the world,

including the su#ordination of these other i$perialist powers through war.

The weight of the i$perialist econo$ies is not static, either as a group or

individually. They have undergone a series of dra$atic changes. The only

constant is !" do$inance. 7hart 3 #elow shows the relative weight of these five

i$perialist econo$ies in the world econo$y, #oth individually and as a group.

The data is shown in the ta#le #elow.

Three distinct dates are chosen. 1*13 represents a snapshot of the world

econo$y on the eve of 1*14+1*1@ war. 1*C1 represents the post+1*4C

settle$ent. This is also the highest recorded point of i$perialist power on a

world scale as accounted for #y share of world ; and is also the highest

recorded level for the weight of the !" in the glo#al econo$y. 200@ is the final

data availa#le fro$ Maddison #efore his death, and of course coincides with theonset of the glo#al financial crisis.

Chart

"ourceE Author's calculation fro$ Maddison data

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The high+point of these i$perialist powers in ter$s of share of world ; was

1*C1. There has #een a sharp decline since that ti$e which has al$ost

certainly #een deepened #y the effects of the crisis/. -ithin that #loc, the !"

has returned to its for$er starting point a century ago, whereas $ost of the

other i$perialist powers have declined in a $ore $ar%ed way. The !N has

e?perienced the $ost spectacular fall of all, its weight in the world econo$y

declining #y two+thirds in a hundred years. Japan is the partial e?ception to this

rule, having #een only on the verge of #eco$ing an i$perial power at the

#eginning of the twentieth century and #eing utterly devastated #y war and

nuclear #o$#ing #y the early 1*C0s.

This still left 6ust *.CI of the world's population in these C countries to en6oy

the #enefits of one+third of world output in 200@. -ithin those countries a tiny

$inority of the population ta%es the lion's share. All $anner of chauvinist and

racist e?planations are advanced for this unequal distri#ution of glo#al inco$e,and the accu$ulated wealth it #rings. 8ut in reality it is only possi#le if $ost of

the world is do$inated #y a global s"stem of imperialism, the forcible transfer

of incomes and wealth from most of the world to a minorit" of it. This syste$

includes ideological, legal, institutional, co$$ercial and financial strands. All of

these are underpinned #y the aggressive e?ercise of $ilitary do$inance, led #y

the !".

A century ago, 8ritain had already #eco$e a rentier nation', living off its

overseas inco$e. The factual verdict on this strategy in ter$s of delivering

growth is devastating. 8y contrast, Japan's post+-ar success was #uilt on very

high levels of invest$ent and favoured nation status in its trade relationships

with the !". Japanese invest$ent as a proportion of ; rose to what was then

an unprecedented level of 30I of ; and in consequence ; growth

accelerated to over @I per annu$.

owever this period is already at an end. The Japanese do$estic econo$y has

not #een accu$ulating net new capital for so$e years and the structural trade

surpluses have #eco$e deficits. rowth has also stagnated for 2C years and it

see$s pro#a#le that li%e the !", Brance and the !N, Japan's net overseasassets will dwindle towards 9ero or #elow/.

A decisive #low was struc% #y the !" against #oth Japan and -est er$any in

the late 1*K0s. 8oth countries had #een growing $ore strongly than the !"

over a considera#le period #ased on $uch higher levels of invest$ent. !sing

the pressure of its $ilitary relationships, in a series of $easures the !" forced

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sharp revaluations of #oth the Japanese en and the ;eutsche Mar%. t

suspended the converti#ility of the !" ;ollar and finally collapsed the entire

post+-- 8retton -oods financial syste$. n this way it was a#le to disguise a

su#stantial devaluation of the !" ;ollar as a widespread #ut piece$eal

revaluation of other $a6or currencies, while its grip on Middle 5ast oil ensured

this did not lead to an outright #alance of pay$ents crisis in the !".

The effect was not to increase !" growth #ut to slow #oth the Japanese and

er$an econo$ies for a generation, 6ust as it had used the co$#ination of its

$ilitary and financial $uscle to devastating effect against Brance and the !N

during the "ue9 crisis in 1*CK. The !" later repeated this feat particularly in

relation to Japan, #y redirecting Japanese capital towards the !" ar$s race to

#an%rupt the "oviet !nion in the 1*@0s. The $ost i$portant outco$e was the

overthrow of the "oviet !nion and its reduction to the status of a se$i+colonial

country, pri$arily producing raw $aterials for the !"+do$inated/ international$ar%ets. A side+effect was to foster the collapse of Japanese growth into

stagnation, which has #een unaltered since 1**0.

nter+i$perialist rivalry has not #een a#olished. 8ut the !" has used a

co$#ination of its financial and $ilitary do$inance to ensure its own do$inance

within the i$perialist #loc, even as that #loc has #een in relative decline.

Conclusion

The concentration of capital and the do$inance of finance capital have #oth

#eco$e $ore pronounced features of glo#al capitalis$ in the current phase ofi$perialis$.

"i$ultaneously, the decayed and parasitical rentier nation' that 8ritain had

already #eco$e over a century ago is now the nor$ for the i$perialist countries

as a whole and for its do$inant country, the !nited "tates.

i%e an ancient despot, the !" and its allies draw in tri#ute fro$ the rest of the

world in the for$ of a continuous inflow of capital. There is even a su#stantial

net inflow of interest inco$e, even though they possess no net overseas assets,

only lia#ilities.

The $ain $echanis$ for this worldwide e?tortion is the !" do$inance over the

glo#al financial syste$, which is itself the do$inant sector of capitalis$. This is

only possi#le #ecause it is underpinned #y the vast $ilitary resources of the !",

which are far greater than all its $a6or rivals co$#ined, and which it e?ercises

repeatedly and #rutally.

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i%e 8ritain #efore it, the !" has #eco$e a rentier nation', whose $ain

overseas inco$e is derived fro$ the e?action of interest and other pay$ents

rather than net trade. 8ut this has entered a new phase, where the tri#ute of

interest inco$e continues to flow even though there are no assets on which it is

#ased. -ithout any net overseas assets, this is only possi#le #ecause of its

status as i$perial power.Imperialism is a global s"stem of super#exploitation,

directed b" control over finance capital and supported b" militar"

dominance. The sole i$perial super+power is the !", supported #y its allies.

8ecause i$perialis$ has entered a $ore decrepit phase does not $a%e it $ore

#enign. )n the contrary. The !" relentlessly see%s to e?tend its interloc%ing

syste$s of $ilitary alliances, trade treaties and financial predo$inance #ecause

it is in relative decline. The va$pire always see%s fresh #lood.

!sing i$perialis$' as a ter$ of a#use, or even as a synony$ for a large tradingnation, al#eit one possessing nuclear weapons, is to ro# it of all scientific value.

The fact that !" i$perialis$ can occasionally #e challenged or sty$ied #y so$e

co$#ination of se$i+colonial countries and wor%er's states acting in concert

does not alter the essential $eaning. nstead, these challenges are a reflection

of the relative econo$ic decline of the i$perialist powers in general co$#ined

with a growing and related war+weariness on the part of the population. The !"

insistence on its own supre$acy within the i$perialist #loc has only

e?acer#ated that collective decline, while preserving its own do$inant status.

&ather than echo the frustrations of the !" "tate ;epart$ent, socialists andco$$unists welco$e the current i$potence of the !", for however long it lasts

and however li$ited it is. n 1** a triu$phalist !" i$perialis$ set out its #old

plan to #roo% no glo#al or regional opposition and to #e a#le to fight two $a6or

wars si$ultaneously

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FThe scientific concept of i$perialis$, $oreover, is reduced to a sort of ter$ of

a#use applied to the i$$ediate co$petitors, rivals and opponents of the two

i$perialists $entioned, each of who$ holds e?actly the sa$e class position as

his rivals and opponents: This is not at all surprising in this day of words

forgotten, principles lost, philosophies overthrown, and resolutions and sole$n

pro$ises discarded.G

enin, preface to 8u%harin's $perialis$ and the -orld

5cono$y',httpsEOOwww.$ar?ists.orgOarchiveOleninOwor%sO1*1COdecO00.ht$

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uriesofdata.xls