The Wealth of (Some) Nations

Imperialism and the Mechanics of Value Transfer

Zak Cope

• Verlag: Pluto Press
• Jahr: 2019
• ISBN:
  9781786804181
• Auflage: 1
• Thema: Economics
• Thema: Economic Policy

In this provocative new study, Zak Cope makes the case that capitalism is empirically inseparable from imperialism, historically and today. Using a rigourous political economic framework, he lays bare the vast ongoing transfer of wealth from the poorest to the richest countries through the mechanisms of monopoly rent, unequal exchange and colonial tribute. The result is a polarised international class structure with a relatively rich Global North and an impoverished, exploited Global South. Cope makes the controversial claim that it is because of these conditions that workers in rich countries benefit from higher incomes and welfare systems with public health, education, pensions and social security. As a result, the internationalism of populations in the Global North is weakened and transnational solidarity is compromised. The only way forward, Cope argues, is through a renewed anti-imperialist politics rooted in a firm commitment to a radical labour internationalism.

Part I
The Mechanics of Imperialism

1
Value Transfer

The traditional Marxist view that capitalism thrives upon the imposition of repressive conditions on workers is correct, but historical capitalism (that is, ‘actually existing capitalism’) has largely displaced these conditions away from the core countries of the international capitalist economy and onto the subject peoples of its colonial and neo-colonial ‘periphery’.¹ Capital accumulation under conditions of global monopoly has supplemented incomes in the global North, providing employees there with a share of ‘imperialist rent’ (that is, ‘the above average or extra profits realised as a result of the inequality between North and South in the global capitalist system’).² The benefits brought by imperialist rent are, to put it politely, an ‘important factor’ in curbing the internationalism of the populations of the global North.³

Labour organisations in the global North tend to follow the foreign orientation of their governments so that when the system of business internationalism is in the ascendant (from ‘Pax Britannica’ to the ‘Washington Consensus’) they support ‘free trade’, whereas the relative erosion of industrial and financial monopoly encourages protectionist business nationalism. In both cases, ‘free trade’ and protectionism are characterised by imperialist relations with oppressed populations appropriate to the shifting economic fortunes of the dominant capitalist concerns. Crucially, so-called developing countries have been systematically prevented – ultimately by means of aggressive war, coups d’état and internal subversion sponsored by the imperialist countries – from protecting their industries in the way that the developed countries have both in their transition to industrial capitalism and in their latest monopolistic phase.⁴

The global hegemony of imperialist institutions (financial, monetary, corporate, commercial, military and communications), especially those of the United States, is at least tacitly accepted and often enthusiastically championed by the working classes of the imperialist countries. The world’s most militarist states, those of North America, the United Kingdom and (to a somewhat lesser extent) Western Europe, have citizens who are historically, culturally and sociologically conditioned to support imperialist war as a matter of duty, obedience, patriotism and citizenship.⁵ This political quiescence of the metropolitan working class is facilitated by the imperialist transfer of value. The ‘parasitism [of] the whole country that lives by exploiting the labour of several overseas countries and colonies’ if enabled to continue eventually (re)produces the phenomenon of mass embourgeoisement therein.⁶ This explains why there has neither been a revolutionary mass movement nor widespread working class opposition to colonialism or imperialism within an advanced capitalist country. Insofar as the imperialist project proves itself successful, populations in the centres of the capitalist world economy have consistently voted for parties and governments engaged in war, intimidation and ramped up exploitation on an ever expanding planetary scale. As the recipient of value transferred from the underdeveloped countries, the dual class position of the metropolitan working class is reflected in its fundamental acceptance of the imperialist system and its ruling ideologies.

With a relatively low level of legal non-military struggle they [metropolitan workers] can build big trade unions and negotiate welfare concessions. In return they offer to seek nothing else. That is, they guarantee the security of the state and the domestic stability needed to pursue military policies overseas. The imperialist state is a dialectical unity of colonial militarism and domestic collaboration which determines these specific necessary class alliances, characteristic of contemporary world capitalism.⁷

In this chapter, we argue that to analyse the production and distribution of value and surplus value within each nation without looking beyond its borders is to adopt a kind of ‘methodological nationalism’ that is both scientifically and politically indefensible.⁸ As US theorists of monopoly capitalism Paul Baran and Paul Sweezy have written:

[Even] today there are many Marxists who seem to think of capitalism as merely a collection of national capitalisms instead of seeing that the international character of imperialism has always had a decisive effect on the nature and functioning of the national units which compose it.⁹

In a subsequent part of the present work we will attempt to gauge metropolitan embourgeoisement, that is, the extent to which workers’ incomes in the major imperialist countries reflect a petty-bourgeois or middle class social position when understood at the appropriate international level. In this part we describe three interrelated means by which the most affluent countries exploit ‘peripheral’ countries within the imperialist world system, namely, (1) colonial tribute; (2) monopoly rent; and (3) unequal exchange. Each of these mechanisms of value transfer shapes the global class structure and the social role of its various agents. In sum, by contrast with the views of Austrian political economist Joseph Schumpeter who wrote that ‘capitalism is by nature anti-imperialist’, and for whom imperialism is a fundamentally irrational expression of a pre-modern will to power, we argue that imperialism is theoretically and empirically inseparable from capitalism both historically and currently.¹⁰

CAPITALISM, CRISIS AND THE NECESSITY OF IMPERIALISM

For Marx and Engels, capitalism is a system inherently prone to both cyclical and generalised crisis. Cyclical crises typically begin with falling demand in the sector producing means of production (what Marx referred to as Department I).¹¹ During the boom period of a business cycle, both the production of means of production (plant and machinery, expanded transportation, research and development and so forth) and the production of consumer goods grow in tandem. At a certain point, however, business expansion reaches the limits of the current market and investment in new production facilities drops off, leading inevitably to lower levels of employment, lower levels of income and, hence, insufficient effective demand for consumer goods. Restricted demand attendant to increased unemployment forces those capitalists in the sector producing consumer goods (Department II) to reduce costs of production and to renovate their plant and machinery, regardless of whether it is physically usable or not. Increased demand for the output of Department I must initially lag behind its capacity, however, and companies in Department II bid up the price of equipment and materials. In consequence, the profit rate in Department I rises above that in Department II and new capital flows into the former, prompting its capitalists to invest as heavily as possible. Yet by the time this new productive capacity has become fully operational, demand from Department II must necessarily have declined since the attendant approach of full employment drives wages up and poses a threat to the rate of profit, hence stymieing further investment. Still the expansion of production does not typically stop at this point. Rather, there ensues a period of speculation, ‘fuelled by the expansion of credit due to the slowing of productive investment and the accumulation of idle money capital. Purchasing commodities in the hope of further price increases, speculators would accumulate stocks. As speculative began to prevail over real investment, the final turning point of the cycle would draw near.’¹²

Capitalism passes through these cycles repeatedly, with their duration and intensity increasing according to a more general tendency for capitalism to break down entirely. This generalised crisis is endemic to the logic of capital accumulation. As capital accumulation demands ever higher investments in machinery and fixed assets (c, constant capital) – necessary both to undercut competitors and to block the tendency of rising wages – the share of new value-creating, ‘living’ labour-power (v, variable capital) in production diminishes. Over time, the surplus value (s, the difference between the value of the workers’ wages and the value generated during the course of their employment) needed to maintain a constantly expanding capital outlay declines and so, in tandem, does the rate of profit (r, defined by Marx as s/c + v). With every new advance in the technological foundations of capital accumulation, that is, investment in machinery and plant as a proportion of total production investment, there is a decrease in capitalists’ inclination to invest in productive, surplus value-creating labour. The resultant underemployment of labour ensures not only that less surplus value is being produced, but also that capitalists are increasingly unable to realise surplus value through the sale of commodities. As a result, there is not only less demand in the consumer goods sector but, consequently, also reduced demand for the means of production.

To ensure the optimal rate of profit, capitalists are forced to increase production, to introduce new technology and to throw an ever increasing quantity of articles onto the market. Exploitation, however, limits the popular consumption of these commodities. Whereas capitalists struggle to keep wages as low as possible to reap higher profits, wages represent a considerable part of the effective demand required to yield profit from sales. As such, if capitalists increase wages, they limit their potential profits, but if wages are lowered the market will be concomitantly constrained. In both cases (restricted profits and restricted markets, respectively), capitalists will cease making new investments. The imperialist solution to capitalism’s problems, then, has two sides: profitable investment opportunities in the dependent countries and the expansion of an affluent market in the imperialist countries, created by a transfer of value in the form of superprofits and cheap goods to sustain superwages.

Marx had specified the principal means by which ...