John Smith on imperialism: Dispossessed workers, farmers, small producers still await their day of liberationby, John Smith and Farooque Chowdhury
Today, it is impossible to ignore the question of imperialism in any discussion concerning people as imperialism is distorting and destroying all aspects and areas of life. Ignoring the question of imperialism is synonymous to betrayal of people’s cause. John Smith, former oil rig worker, bus driver, telecommunications engineer, longtime activist in the anti-war and Latin American solidarity movements, and author of Imperialism in the Twenty-First Century: Globalization, Super-Exploitation, and Capitalism’s Final Crisis (Monthly Review Press, January 2016), discusses the question of imperialism in the following interview taken by Farooque Chowdhury during July 2018-February 2019.
The analyses, interpretations and observations made, the narratives presented, the terms used, and the way persons, politics, ideologies and trends characterized in the interview are completely of John Smith, and, those don’t always correspond to the interviewer’s opinion, interpretation, etc.
How do you define imperialism?
John Smith: The most succinct and concrete definition of imperialism that I can come up with is the subjugation of the entire world to the interests of the capitalist ruling classes of a handful of oppressor nations. This contains both the economic and political dimensions of imperialism—‘subjugation’ denotes the political subjection of governments, states and peoples to imperialist rule, while ‘interests of the capitalist ruling classes’ refers to their economic interests, essentially their appropriation of the lion’s share of the surplus value generated by the workers and farmers of the world, not just by those resident in their own countries. The summary definition also speaks of the ‘ruling classes of a handful of oppressor nations’, rejecting the influential view (which exists in many variants and whose most prominent exponents are Leslie Sklair and William Robinson) that these ruling classes have merged into a ‘transnational capitalist class’, and it therefore implies that the interests of these ruling classes may not coincide, that inter-imperialist rivalries persist. Furthermore, the definition advanced above can be developed to take account of ‘sub-imperialism’, that is, when the capitalist rulers of a subject nation in turn subject other, even weaker, nations and peoples to their political and economic domination.
What is/are the difference/s between the definition you are using and other definitions?
JS: The definition provided above is concrete in that it applies to now, as opposed to a generic definition applicable to all manifestations of imperialism throughout the ages. In the above definition, ‘imperialism’ is an analytical category that can be developed into a theoretical concept. In contrast, trans-historical, generic definitions of imperialism can only ever be descriptive, highlighting superficial features which different manifestations of imperialism in different periods of human history appear to have in common. As Lenin pointed out in Imperialism, the Highest Stage of Capitalism, “Colonial policy and imperialism existed before the latest stage of capitalism, and even before capitalism. Rome, founded on slavery, pursued a colonial policy and practiced imperialism. But ‘general’ disquisitions on imperialism, which ignore, or put into the background, the fundamental difference between socio-economic formations, inevitably turn into the most vapid banality.” The essence of contemporary imperialism is to be found in the contradictory social relations specific to capitalism, not in “human nature “or any other ahistorical abstraction.
That’s not to say that generic uses of the term are useless, or that the noun “imperialism” (and even more so the adjective “imperialist”) cannot be used to describe diverse forms of chauvinistic behavior and mentality—but unless we are conscious of the difference between imperialism as a descriptive term and as an analytical category, we will inevitably fall into the ‘vapid banality’ that Lenin warns against.
What’s really involved here is the need to go beyond the sterile formal logic so characteristic of bourgeois social science and learn how to think dialectically. If imperialism predated capitalism, pedants ask, how can it be intrinsic to capitalism? How can it be true that its essence must be found in capitalist social relations and not human society in general? To answer this question I like to use the analogy of patriarchy. It, too, predates capitalism—indeed, as Frederick Engels explained in The Origin of the Family, Private Property and the State, what he called “the world-historic downfall of the female sex” coincided with the transition from fiercely egalitarian hunter-gatherer era to the earliest class-divided society. Not only did patriarchy predate capitalism, like imperialism, it was a necessary precondition for the rise of capitalism. Upon its arrival, and as part of the process of establishing its supremacy, this higher form of social organisation discarded elements of the pre-existing feudal or communal society which were inimical to its own nature—and internalized, made into its own, whatever was favorable to its further development. Both imperialism and patriarchy fall into the second category, which is why it is possible to say that both of these phenomena preceded capitalism but have long since become inherent qualities of capitalism. There are many people in subject nations (not least, their capitalist elites) who oppose imperialism but do not oppose capitalism, just as there are many feminists who oppose the oppression of women but do not acknowledge that this oppression is rooted in capitalist social relations. So it is that bourgeois nationalism, just like bourgeois feminism, is inherently conflicted and cannot provide a path towards liberation.
What aspects/factors have you taken into account while defining imperialism?
JS: Well, I think it is necessary to take everything into account! No single aspect of reality, especially not one as qualitatively important as imperialism, can be understood unless we have at least a working concept of the total system of interaction of which it is a part. This is an unavoidable difficulty which bourgeois social science attempts to evade by artificially dividing social science into mutually-exclusive “disciplines”, e.g. “politics”, “economics”, “sociology”, “anthropology” etc., each offering rival explanations of social phenomena, using incompatible methodologies, and expressing themselves in terminologies which are mutually unintelligible. The fatal limitations of such pseudo-science have become impossible to ignore, and so “multi-disciplinary” approaches have become more popular—but without the rigorous application of dialectical logic, this inevitably involves arbitrary or prejudiced selection of facts and results in eclecticism and indeterminacy. The one exception to this is the pseudo-science known as “economics—its high priests resist the contamination of its mathematical abstractions with concepts borrowed from politics, sociology, history etc. Their arrogance knows no bounds, and they sense they would not survive a serious encounter with other disciplines.
So, I have consciously attempted to apply everything that I have learned about human evolution over the past several centuries, especially about the evolution of global political economy since World War II, and most especially about its evolution since the 1970s, the dawn of the so-called neoliberal era. Of course, “taking everything into account” doesn’t get us very far, it is nothing more than a condition for our arrival at the beginning of the road to wisdom; further progress requires sifting, ordering, arranging and analyzing the mass of data, testing concepts against facts and using concepts to penetrate through the surface appearance of facts, searching for what Evald Ilyenkov called the “cardinal points of interaction “of the system being investigated.
To this end, I zeroed in on what analysis of facts soon revealed itself to be the most dynamic and significant transformation of the neoliberal era, namely the large-scale shift of production processes to low-wage countries, a development which was and is touted by capitalism’s apologists—and by far too many who call themselves Marxists—as definitive proof that, thanks to capitalist development, the imperialist North-South divide was fading into history. Instead, as I showed in Imperialism in the Twenty-First Century, this development signifies the culmination of capitalism’s imperialist evolution, a qualitatively new stage in capitalism’s internalization of imperialism, in which the plunder of nature and super-exploitation of living labor now takes place primarily within the bounds of the capital-labor relation rather than through so-called primitive accumulation, territorial conquest and other forms of naked plunder, which capitalists inherited and enthusiastically adopted from the past and which they have far from abandoned.
What are the limitations of/problems with other definitions of imperialism?
JS: The liberal/mainstream notion of imperialism that permeates academia and bourgeois political opinion (and which, as I argue in Imperialism in the Twenty-First Century, contaminates much of what in Europe and North America presents itself as Marxist political economy) proceeds from the elementary observation that the various empires that have existed during the past three millennia share one obvious characteristic, namely territorial conquest accomplished through military force. This is seized upon as the defining characteristic of imperialism, and the dismantlement of the territorial empires and granting of formal sovereignty is then taken as proof that imperialism belongs to the past, not the present. Such an approach rests on a complete divorce between politics and economics—imperialism is defined exclusively by political domination and the application of military force; the motive for such behavior might be economic, i.e. plunder of resources etc., but it might just as easily be geopolitics, megalomania, divine right or anything else.
The Marxist concept of imperialism is diametrically opposed to this. Capitalism’s imperialist impulse is rooted in the contradictions of the capitalist value relation. As Marx explained, increasing productivity of labor (through the substitution of living labor by dead labor, i.e. machinery) and falling rate of profit are two sides of the same coin; and as Lenin explained, capitalists in developed capitalist nations are obliged by the class struggle to purchase social peace by using some of their profits to bribe privileged layers of the working class. As a result, these capitalist ruling classes are compelled to augment the surplus value they extract from workers and farmers at home with ever-increasing flows of wealth from abroad. Both of the trends pushing in this direction became pronounced in the closing decades of the 19thcentury, provoking intensified empire-building and setting these rival ruling classes on collision course with each other, leading to the first imperialist world war.
Is there any fundamental difference between the way you define imperialism and the way Lenin or Marxist-Leninists defined imperialism?
JS: No, I don’t believe so, but what is different is the world of the 21stcentury compared to the world as it was 100 years ago. When Lenin, Zinoviev, Bukharin and other Bolshevik leaders developed the Marxist theory of imperialism, the relation between the handful of oppressor nations and the great majority of oppressed nations was a relation between countries and continents where capitalist social relations were fully established and where they were still embryonic, and the techniques of imperialist plunder that were available to the oppressors were largely those they had inherited from the past—brute force, usury, etc. Also embryonic was the rebellion of the colonized and enslaved peoples; this subsequently became vastly more powerful, forcing the imperialists to modify the forms of their domination by handing formal political sovereignty to venal and corrupt elites while negating any meaningful economic sovereignty. So, there has been substantial change in the external forms of continued imperialist domination, and the spread of capitalist social relations in the dominated countries has opened up new ways for imperialists to siphon wealth from these countries, but the essential nature of the imperialist relation has not fundamentally changed since Lenin’s time. On the contrary, capitalists in North America, imperialist Europe and Japan are today vastly more reliant on flows of surplus value from so-called developing nations than they were 100 years ago; in other words, they are even more parasitic than ever they were; and the world is as divided as ever it was between, in Lenin’s words, “a handful of oppressor nations and the great majority of oppressed nations,” with the significant change that the hard-fought struggle by the peoples have emancipated the national bourgeoisies of the oppressed nations, in other words a place has been found for their snouts in the trough, while the impoverished and dispossessed workers, farmers and small producers still await their day of liberation.
“Marxist-Leninist” refers to the ideology espoused by the bureaucratic rulers of the former Soviet Union and the People’s Republic of China and all those around the world who look to them for leadership, but in my opinion, there is no Marxism or Leninism in so-called “Marxism-Leninism”. We cannot get anywhere until we call things by their true names, so I insist on describing both the Moscow or Beijing varieties of these ideologies as Stalinist. This might upset some people or be misinterpreted as factional name-calling, but the alternative is to perpetuate an extremely harmful falsehood—one which is energetically promoted by bourgeois politicians and opinion-formers of all types, from the liberal left to the far right, all of whom are aware of how much damage they can do to the revolutionary workers’ movement by identifying socialism, communism and the liberatory ideas of Marx and Lenin with the disgusting brutality and corruption of the bureaucratic castes which once ruled the Soviet Union and which continue to rule over China (indeed, the capitalist ruling class presently in power in Russia is almost entirely composed of former “Marxist-Leninists”).
“Marxism-Leninism” served the rulers of the USSR and PRC not as a guide to action, but as a cloak of deception, a means of legitimizing their rule. They claimed allegiance to the same theories and philosophies as do I, but their doctrine of “peaceful coexistence” with imperialism stands in the clearest possible contradiction with everything that Karl Marx and Vladimir Lenin stood for.
Imperialism is revealing its character: increasing parasitism
Is there any difference between the way imperialism functioned during the Cold War and the way it is behaving now? And, what is/are the reason/s if there’s any difference?
John Smith: An almost impenetrable thicket of myths and falsehoods surrounds the so-called Cold War, which was anything but cold for the billions of people who live in Africa, Asia and Latin America. The dominant narrative is that the war was between the “West”, led by the United States, which was trying to spread capitalism and democracy, and the “East” led by the Soviet Union, which was trying to spread socialism and communism. It is absurd to claim that the installation by the USA and its allies of countless bloodthirsty dictators from the Shah to Saddam to Somoza had anything to do with “spreading democracy”, but the first part of the dominant narrative is correct: the USA and its imperialist allies were indeed fighting a war to spread capitalism and crush any resistance to it. What is false is that the Soviet Union was trying to spread socialism and communism. On the contrary, time and again the fake revolutionaries who ruled the USSR provided crucial assistance to the imperialists. The Stalinist “stages” theory of history held that anti-capitalist revolutions were impossible in nations oppressed by imperialism — because the working class was too small and weak and because the task of the day was to abolish feudal and other pre-capitalist obstacles to the spread of capitalism — and its proponents argued that a protracted period of capitalist development was necessary before class contradictions in these nations could come to approximate those in the imperialist nations, and only then could the struggle for socialism could be put on the agenda. So, instead of leading struggles to bring revolutionary governments of workers and farmers to power, Moscow instructed the communist parties under its control to become junior partners in alliances with the supposedly progressive wing of the national bourgeoisie, leading to countless catastrophic defeats, Iran in 1953 and Indonesia in 1965 being two major examples. As Che Guevara said, “the indigenous bourgeoisies have lost all capacity to oppose imperialism — if they ever had any…. There are no other alternatives. Either a socialist revolution or a caricature of a revolution.”
It is notable that the only revolutionary victories during the so-called Cold War occurred under the leadership of communist parties that had broken at least partially from subservience to Moscow (Yugoslavia, China, Korea, Vietnam), or of revolutionary movements and parties that had never been in Moscow’s orbit in the first place (e.g. Cuba, Nicaragua, Algeria). Perhaps the most instructive example is that of Vietnam. At the Potsdam Conference in July 1945, the victors — Truman, Churchill (assisted by Labour Party leader Clement Attlee, whose election as Prime Minister of Britain was confirmed mid-conference) and Stalin, met to share out the spoils of victory. Hoping to continue the USSR’s wartime alliance with the supposed to be the antifascist, progressive wing of imperialism, Stalin agreed that France’s Indochinese colonies should be returned to their rightful owner, namely France.
In defiance of this, on September 2 1945, before half a million people gathered in Hanoi, Ho Chi Minh proclaimed an independent Democratic Republic of Vietnam — but nothing was done to prepare an appropriate welcome for imperialist troops (including 20,000 soldiers of the 20th Indian Division, part of the Indian army under Britain’s colonial command) sent to enforce the nefarious decision taken at Potsdam. Instead, acting under Moscow’s orders, the ICP leadership greeted the first contingents of British troops to arrive (on 12-13 September) with welcome banners and attempted to shake hands with their commander, General Gracey, but were contemptuously brushed aside. Gracey seized government buildings, declared martial law, freed Japanese prisoners of war, armed them and used them as a temporary police force until French military forces arrived to reinstate their colonial rule. Following this utterly avoidable disaster, the Vietnamese liberation forces resumed their struggle and pledged to never again subordinate their interests to the foreign policy of another power.
Vietnam in 1945 was far from the only time that Stalin acted as an accomplice to imperialism’s crimes. Vietnam’s history has similarities with Korea’s, which Stalin, Churchill and Roosevelt agreed should be also divided and placed under military occupation (at their notorious February 1945 meeting in Yalta) — leading to the Korean War, in which the US dropped more bombs than had been used by both sides in the Pacific theatre of World War II. By 1953, two and half million Koreans lay dead, but even this did not crush their resistance to imperialist occupation. Aided by some 300,000 soldiers from China (whose social revolution triumphed in 1949), Korea’s working people, led by Kim Il-Sung and the Korean Workers Party, inflicted the first ever military defeat upon the United States, for which they have never been forgiven and for which they continue to be cruelly punished.
Moscow’s official policy throughout the Cold War was “peaceful coexistence”, code for class collaboration, and can be understood as the continuation of its post-war betrayal of the Korean and Vietnamese outlined above (there are many other nations and peoples on this list, not least the Jews of Europe and the people of Palestine, both of whom were betrayed by Moscow’s anti-Semitism and by its connivance with the establishment of Israel in 1948).
These facts are not widely known, not even among left-wing and progressive forces, because neither liberal nor conservative opinion-formers have any interest in reminding us of these facts, and neither do those left-wing movements who have their origins in the Stalin-led ‘communist movement’.
The dominant mainstream narrative on the Cold War has yet to be seriously challenged; on the contrary, the truth is buried under more and more layers of rubbish. Yet only a moment’s thought is needed to see its absurdity and its deeply reactionary nature. The “East” in the East-West confrontation was Moscow, yet Moscow is, geographically speaking, part of the West, the eastern edge of white Europe. The real East is invisible in this risible, incredibly Eurocentric narrative, and the same fate of invisibility befalls the entire South: the North-South conflict, i.e. the struggle between imperialism and its colonies and neo-colonies, is entirely collapsed into the so-called East-West conflict. Liberation struggles and revolutionary movements from Asia to Africa to Latin America are regarded as mere pawns of Moscow, without grievances of their own, without any agency of their own — this is not only absurd, it is also transparently racist.
Only by exposing the lies that are contained in the term “Cold War” can I answer the question about whether there has been any change in imperialist behavior since it ended with the collapse of the Soviet Union in 1991. Just as the very notion of the Cold War is premised on falsehood, it is also false that the West won the Cold War. The collapse of the Soviet Union and the partial eclipse of the political forces that looked to Moscow for leadership has severely weakened an important prop of the imperialist world order. Far from inaugurating a unipolar world in which the USA and its imperialist allies could exercise untrammeled power, the post-Cold War world has seen accelerating chaos and disorder. The imperialists convinced themselves that they had won a great victory and celebrated by launching a series of wars in the Middle East and Central Asia, beginning with George Bush senior’s war on Iraq in 1991 in the immediate aftermath of the collapse of the Berlin wall. But their hubris led to overconfidence, and each and every military adventure they have undertaken since the end of the Cold War has led them into a quagmire of death, division and recrimination, with nothing resembling a victory in sight. Unfortunately, if the imperialists cannot be said to have won the Cold War, neither can it be said that victory belongs to their adversaries, the working class and oppressed peoples of the world. Victory never falls into our lap, it must be fought for. What’s lacking are revolutionary leaders of the caliber of Lenin, Che, Fidel, Grenada’s Maurice Bishop, Thomas Sankara of Burkina Faso and others, and political movements inspired by them, able to take advantage of the imperialists’ growing weakness and disarray.
Financialization and imperialism
Have monopoly finance capital and financialization impacted imperialism? And, how, if there’s any impact?
JS: We need some clarity about what these two terms mean. To take the first of them: as Lenin explained in Imperialism, the Highest Stage of Capitalism, monopoly finance capital is the result of two parallel processes that mark the transition to the imperialist stage of development: the process of concentration and centralization of capital, and the separation of ownership from management. The question, therefore, needs to be reformulated, because it suggests that monopoly finance capital is something external to imperialism, and exerts an impact on it from the outside. All of this underlines an essential point—when we talk about imperialism, we are not talking about imperialism in general, as it has existed throughout the ages, we are talking specifically about capitalist imperialism, the imperialist stage of capitalist development. Monopoly finance capital didn’t exist when Sargon the Great built the Akkadian empire in Mesopotamia 4,300 years ago, or 500 years ago when the Mughal kings unified the Indian subcontinent!
Financialization can be defined in different ways, but at its most basic it refers, in the words of John Bellamy Foster, to “the shift in gravity of economic activity from production (and even from much of the growing service sector) to finance” (see John Bellamy Foster, “The Financialization of Capitalism,” [Monthly Review 58: 11, April 2007] where you will also see an excellent discussion of the origin of this term). So, financialization pertains to the sphere of circulation, where titles of ownership are exchanged but where nothing is produced. Yet the “shift in the gravity of economic activity” that John Bellamy Foster talks about is manifested in the fact that banking, insurance and other financial activities make up an ever-growing portion of the GDP of imperialist countries — which just goes to show that what bourgeois economists call “gross domestic product” has less and less connection with what is actually produced within a domestic economy.
With the notable exception of the Monthly Review school, recent studies of this phenomenon by avowedly Marxist and left-Keynesian economists attempt to theorize financialization in isolation from the transformations that have taken place in the sphere of production, especially the globalization of production processes and their large-scale relocation to low-wage countries. This is a serious flaw, but not so surprising, since these same schools of thought deny the centrality or even existence of imperialism. Nevertheless, many of these studies do shed light on the complex processes that make up this important phenomenon, especially the financiers’ ingenuity in converting hypothetical future income streams into present-day wealth, thereby generating vast quantities of what Karl Marx called fictitious capital, that is, financial assets whose value is disconnected from the actual productive activity (if any) they give title to.
Debt is the principal tool used to accomplish this. As Martin Wolf said shortly after the beginning of the financial crisis (Financial Times, April 1, 2008), “Between its low in the first quarter of 1982 and its high in the second quarter of 2007, the share of the financial sector’s profits in US gross domestic product rose more than six-fold. Behind this boom was an economy-wide rise in leverage [debt-financed investment]. Leverage was the philosopher’s stone that turned economic lead into financial gold. Attempts to reduce it now risk turning the gold back into lead again.” Yet the attempts to reduce debt that Wolf speaks of have been feeble, to say the least — according to the International Institute of Finance, aggregate debt (that is, sovereign, corporate and domestic debt) now stands at 320% of global GDP, compared to 270% on the eve of the global financial crisis in 2007. What’s more, some especially risky categories of debt are growing much faster, in particular, debt owed by private non-financial corporations in so-called “emerging economies”, who have been tempted by historically low interest rates. We can be certain that the next financial crisis — and there surely is one waiting for us around the corner — will wreak its havoc far beyond Europe and North America, where its effects were concentrated post-2007.
So, to answer your question, once again it’s not a matter of financialization impacting upon imperialism, but of imperialism revealing its own essential character — its increasing parasitism, i.e. the ever-greater importance of monopoly rents of all kinds and of rent-seeking behavior versus unmediated profit-making from productive activities.
Is it possible to differentiate monopoly finance capital and imperialist capital? Or, is there any need/requirement to make the differentiation for studying imperialism?
JS: I think it follows from my answers to earlier questions that “monopoly finance capital” and “imperialist capital” are synonymous. More important than the labels themselves are the meanings we attach to them, this depends on the context in which they are used, on what else we say. Technical terms and the names of theoretical concepts can all too easily be used to mystify rather than to clarify, to impress rather than to express.
Imperialist capitalism is heading towards a cataclysmic crisis
Constraints of imperialism
What constraints is imperialism facing today?
JS: Just six words, but you could not ask a bigger question! The financialization phenomenon discussed in preceding answer, and the immense over-accumulation of capital, which it has fostered, is the surest sign that imperialist capitalism is heading towards a cataclysmic crisis, since the financiers’ ability to use debt to amplify profit streams and inflate asset values is finite. Their ability to resume this peculiar form of “wealth generation” despite the temporary interruption of the global financial crisis, has crucially depended on the zero interest rate policy (ZIRP) implemented by the central banks of the imperialist nations—the USA’s Federal Reserve has raised its interest rate nine times since November 2015, each time by 0.25%, but once inflation of around 2% is subtracted from its current level of 2.5%, the real interest rate in the USA is barely above zero. Central banks in the UK, Europe and Japan are yet to follow the Fed in moving away from ZIRP, their real interest rates are strongly negative.
Official interest rates (sometimes called the “base rate”) reflect the cost of money to private banks, large corporations and wealthy investors, and are much lower than those charged on loans to households and small businesses. It should not be thought that power over interest rates allows governments and central banks to dictate market conditions—rather, it is the markets, i.e. the owners of finance capital, who exercised dictatorship over governments and central banks. The official interest rate reflects the so-called “natural rate of interest”, determined by the supply of and demand for investment funds. The supply is vast, yet it is faced with a dearth of productive investment opportunities—there is plenty that needs doing, but capitalists calculate that expected profits are insufficient to balance risks.
Why is this so important? Unless capitalists think they will make more money by investing their cash in the production of goods and services than what they’d earn in interest if they left it in the bank, they will not invest. By pushing interest rates down towards zero or even into negative territory, central banks hope that capitalists will be stimulated to invest their cash and not just stash it in the bank. Ultra-low interest rates are therefore a sign of deep crisis—signifying that capitalists are exceedingly reluctant to invest, either because of a dearth of profitable investment opportunities, or because they perceive the risk of losing their money to be too high, or both. Given that real interest rates are lower than at any time in the history of capitalism, for the rate of investment to be so low (whether this is measured as a proportion of GDP or as a fraction of available funds for investment) in the imperialist economies and in much of the rest the world, is truly astonishing.
There are lots of complications which could be explored and qualifications which could be made about all of this, but I now want to move to a slightly different subject: given that ultra-low interest rates are a sign of deep malaise, how could they also be a means to support and further inflate the value of all manner of financial assets, from stocks and shares to bonds to real estate? Simply, because ultra-low interest on cash deposits in banks encourage the owners of this cash to purchase stocks and shares, residential or commercial property, bonds—anything which gives them title to a stream of profits or of rents or of interest payments that include a risk premium. Not only that, ultra-low interest rates encourage banks, large corporations and very rich people to borrow money in order to purchase even more financial assets, leading one Morgan Stanley banker to describe zero-interest-rate policy as “crack cocaine for the financial markets”. And, so it is that the extreme monetary policies pursued by central banks since 2008 (and indeed in the decade before the financial crisis!) have created money-making opportunities for the super-rich on a scale never seen before in human history. An indication of this can be gleaned from Cap Gemini’s annual World Wealth Reports, which report that the total wealth in the hands of the world’s “high net worth individuals” (that is, people who own more than $1 million in investable assets), more than doubled in the 10 years following the beginning of the global crisis, growing from $32.8 trillion in 2008 to $70.2 trillion in 2017—an increase of 114% in just 10 years, yet during the same period global GDP increased by only 27% (adjusted for inflation, these figures translate to 100% growth in HNWI wealth compared to a 24% growth in global GDP).
The final detail to be added to this picture concerns the consequences of these extreme monetary policies. Ultra-low interest rates have encouraged capitalists to borrow money to finance investments; but instead of investing in new means of production, the bulk of it has financed speculation in markets, inflating asset bubbles that are reflected in ballooning HNWI wealth discussed above; or in so-called intellectual property (IP), which generates monopoly rents for its owners but does not increase social wealth (and in many cases reduces it); or to finance share buy-backs, which increase the wealth of shareholders but which, again, do not result in any increase in the production of goods and services. Governments and central bankers are aware that all of this is storing up immense problems for the future, yet the capitalists they serve have become addicted to this “crack cocaine”, and so far only the USA has taken timid steps to restore interest rates to what they call “normal” levels.
The great fear is that, if ultra-low interest rates have stimulated asset inflation, higher interest rates will result in asset deflation, in other words another financial crash. And if they leave interest rates where they are, not only will asset bubbles, debt mountains and other pathological disorders continue to get worse, central banks will be deprived of the chief tool they need to prevent the next cyclical recession from rapidly gaining momentum and provoking another financial crash. Recall that, in the last three recessions in the United States, the Federal Reserve has slashed interest rates by an average of 5%, but this option is unavailable right now (because the Fed’s “policy rate” is currently 2.5%, or 0.5% when inflation is taken into account); and still less is it available to central banks in the UK, Europe and Japan where real interest rates are currently well into negative territory.
“Global yields lowest in 500 years of recorded history. $10 trillion of negative rate bonds. This is a supernova that will explode one day,” in the words of leading bond trader Bill Gross. The metaphor is apt—a supernova occurs when the energy fueling a star’s expansion becomes balanced by the gravitational force pulling it towards the centre. It may take eons to arrive at this moment, but when it does the star collapses on itself in seconds, and then explodes, scattering debris throughout its galaxy.
So, to get back to the question, the chief constraints confronting imperialism are those that arise from capitalism’s own internal contradictions, and these manifest themselves in the systemic crisis briefly described above. Their fundamental root lies in the nature of capital, which can be defined as self-expanding wealth, that is wealth which appears to grow magically by itself, a goose which lays golden eggs, but whose growth, as Karl Marx proved in Capital, depends on unpaid wealth generated by exploited workers, which Marxists call surplus value; augmented by wealth captured from working people employed in non-capitalist sectors of the economy, so-called accumulation by dispossession. As briefly described above, the financial system has allowed capitalism to turbo-charge capital accumulation, through the generation of vast quantities of fictitious capital, but in the end every single one of the $70 trillion in the hands of HNWIs can only become capital and remain as capital thanks to surplus value extracted from living labor. Thus, the fundamental constraint is the extreme and growing disproportion between the total mass of wealth in the hands of capitalists, on the one hand, and the quantity of surplus value it is capable of extracting from living labor in order to convert this wealth into capital on the other. And as Lenin explained, it is precisely this disproportion, which impels capitalism onto its imperialist trajectory.
Is it different from the days Lenin defined imperialism?
JS: Fundamentally, it is no different. What is different is that these contradictions are many magnitudes deeper and are also far more extensive. When Lenin wrote his famous book on imperialism in the middle of World War I, capitalism had yet to fully impose its social relations on the peoples of Africa, Asia and Latin America; the relation between imperialist nations and subject nations was a relation between capitalism and pre-capitalist social formations. This is one reason why I believe that capitalism’s contradictions are immeasurably deeper now than they were in the period that led to World War I and to the Russian revolution.
How is imperialism trying to overcome the constraints it is facing today?
JS: By escalating its assault on workers and poor people, by fighting to reverse the expensive concessions it has made to pacify the working class in imperialist countries, by intensifying its rape of mother Earth, by increasingly resorting to “beggar-thy-neighbor” policies, as manifested in currency manipulation, trade wars and the disintegration of multilateral institutions.
Has imperialist rivalry taken on greater importance in recent years? It appears that a new anti-free trade faction has been developing, favoring protectionist policies in contrast to the longstanding goal of “free trade.” Fights among imperialist powers are also going on in the World Trade Organization. Is there any significance of these developments?
JS: The process by which economic contradictions translate into political rivalry and military confrontation is extremely complex and depends on many things—including contingencies such as the emergence onto the stage of history of mavericks like Donald Trump or the outcome of a finely-balanced referendum such as the one that led Britain to decide to withdraw from the European Union. It is not possible to predict with any degree of certainty how the post-WWII US-led imperialist world order will break up, just that it will break up. Will the Franco-German alliance survive the next stage of the European Union death agony? Will the USA maintain its close embrace of Japan, the country it nuked in 1945? Will China forge its own sphere of influence and take the next steps towards becoming an imperialist power?
Only by discussing the past and the present can we get a glimpse of the future. All I can say for sure is that there is a massive storm coming, and that the only way out is for workers to cease their reliance on any wing of the bourgeoisie and do what Russia’s workers and farmers did in 1917 and what Cuban workers and farmers did in 1959—to take power into their own hands, to carry out a socialist revolution.
Climate crisis poses a major political challenge to imperialism
Climate crisis and imperialism
How is climate crisis impacting imperialism?
JS: “Climate crisis” is a euphemism for the capitalist destruction of nature, and is an extremely dramatic and terrifying manifestation of capitalism’s destructive and imperialistic nature. So, imperialism is certainly impacting the climate crisis! How, and in what sense, is the climate crisis impacting upon imperialism? Capitalism/imperialism is extremely proficient at externalizing the costs of its destructiveness, making other peoples and future generations suffer the consequences of its marauding nature, as the people of Bangladesh know only too well. Yet it is not immune from “blow-back” effects, such as when overfishing and run-off from intensive farming causes blooms of jellyfish that destroyed tourism and clog the water-cooling inlets of power stations, or the droughts and heat waves causing forest fires and the collapse of farming in large tracts of Australia and the United States. The climate crisis also poses a major political challenge to imperialism—they are working very hard to prevent public opinion and the world’s scientific community from coming to the conclusion that system change is necessary if we are to avert climate change.
Benefits and resource flow
Is there any benefit from imperialism?
JS: Yes—to the imperialists. And yes—to the middle class and the elites of the subject nations, who are given a place for their snouts in the trough that is filled by the world’s workers and farmers. And yes—to the workers in the imperialist countries, whose rulers divert some of the proceeds of imperialist exploitation to bribe privileged layers and purchase social peace. But these benefits are temporary and the price that workers in the imperialist countries are paying for being led into an alliance with the enemies of humanity is already high and will grow without limit. Which imperialist country will be the first to see a fascist movement come to power—France, the UK, Italy, USA…?
Has there been any change in the direction of flow of resources and benefits in imperialist system? How do you define the claim that resources flow to neo-colonies/countries being exploited by imperialism as a result of imperialism?
JS: No. I define the claim as complete and utter nonsense. (The following is drawn from my response to claims by David Harvey that the flow of resources from imperialist to developing countries has changed direction.)
In 2015, researchers based in Brazil, India, Nigeria, Norway and the USA published Financial flows and tax havens: combining to limit the lives of billions of people, which they fairly claim to be “the most comprehensive analysis of global financial flows impacting developing countries compiled to date.” Their report calculates “net resource transfers” (NRT) between developed and developing countries, combining licit and illicit inflows and outflows—from development aid and remittances of wages to net trade receipts, debt servicing, new loans, FDI and portfolio investment and repatriated profits, along with capital flight and other forms of financial chicanery and outright theft. They found that in 2012, the most recent year for which they could obtain data, what they call “developing and emerging countries” (which of course includes China) lost $2.0 trillion in net transfers to rich countries, equivalent to 8% of emerging nations’ GDP in that year—four times larger than the average of $504 billion in NRT transferred annually from poor to rich countries during the first half of the 2000s. When informed estimates are included of under-invoicing and other forms of rip-off and criminality that leave no statistical trace, NRT from poor countries to imperialist countries in 2012 exceeded $3 trillion, around 12% of poor nations’ GDP.
More generally, they report, “both recorded and unrecorded transfers of licit and illicit funds from developing countries have tended to increase over the period 1980-2011”. As for Sub-Saharan Africa, they report, NRT from this continent to imperialist countries (or tax havens licensed by them) between 1980 to 2012 totalled $792bn, that illicit transfers from Africa to imperialist countries as a proportion of GDP are higher than from any other region, and that capital flight from SSA is growing by more than 20 percent per annum, faster than anywhere else in the world.
In what they called “an ironic twist to the development narrative” the researchers concluded that “since the early 1980s, NRT for all developing countries have been mostly large and negative, indicating sustained and significant outflows from the developing world… resulting in a chronic net drain of resources from the developing world over extended periods of time”.
Where does China fit into this broader picture? Using sophisticated methodologies and on the basis of conservative assumptions, the researchers calculate that China accounts for no less than two-thirds of the total recorded resource transfer deficit of all “emerging nations” between 1980 and 2012, $1.9 trillion in all; the explanation for this high proportion being “China’s large current account surpluses and associated capital and reserve asset outflows,” and it accounted for 21%, or $2.8 trillion, of the total of $13.4 trillion in capital flight drained from all “emerging countries” to rich nations during these three decades.
Progressives and imperialist intervention
Are progressives and grassroots groups who face autocratic/despotic/anti-democratic rulers ever justified in lending support to—or inviting—imperialist intervention? What are the most common confusions/misunderstandings about imperialism associated with these sections of the left?
JS: No. But it is easy to make glib denunciations of peoples who are in an extremely painful and difficult situation—I think, for instance, of the Kurdish people, who have no state of their own because of the crimes of British, French and American imperialism, and also because of the chauvinism and extreme brutality of the Arab and Iranian capitalist rulers; and I also think of Jewish people who are confronted by virulent anti-Semitism, which, as history and contemporary politics shows, becomes inflamed at times of systemic capitalist crisis, when gentile capitalists seek to deflect popular resentment onto scapegoats. So, I’d like to avoid making generic statements and consider each specific example individually, and state that before we as socialists, as communists, as workers, criticize other peoples we have to demonstrate in deeds as well as words, that we, not hypocritical imperialists, are their most reliable allies.
What are the problems in studying imperialism today?
JS: To study capitalism is to study imperialism, and vice versa. And the only way that can be done, unfortunately, is by starting with the total system and the entire history leading up to it. Whether we like it or not, we cannot form a theoretical concept of any part of the total system of interaction unless we have at least a working concept of this total system. This is what Karl Marx meant when he said there is no “royal road to wisdom”, there are no shortcuts. So, we should not pretend that the task is easier than it actually is—but neither should we underestimate our own capacity to make progress, to stand on the shoulders of others, to rejoice in the fact that the hard work of those who have gone before us enormously amplifies the fruits that we can reap through our own efforts. Most important of all is honesty, integrity and hard work.
What are the confusions in the study of imperialism today?
JS: The most fundamental confusion is the one discussed in my answer to the second and eighth questions above. To repeat this extremely important point, but in a different way, we could say that there are two ways to approach the question “what is imperialism?” One would be to make a list of all of the different types of imperialism that have existed in known history, list the features they have in common, and generalize a theory out of this. The other is to study the actually existing socio-economic system, i.e. capitalism, and ask “what is it about capitalism that caused it to evolve into a new form of imperialism?”
The first approach, which at first glance seems perfectly reasonable, deals exclusively with forms of appearance and can only result in a description rather than a theoretical concept. A theory can only be generated from this approach by the addition of other premises, e.g. something about human nature—or about the nature of men, since the vast majority of emperors and imperialists have been male. This is, in my opinion, a bourgeois, positivist, pseudo-scientific approach that either ends up justifying imperialism (“it’s just human nature”), or denying it, since modern, 21st-century capitalist imperialism does not include one feature that is common to all other forms of imperialism, namely territorial occupation and domination.
The second approach is the one that is recommended by dialectical materialism and followed by Marx and Marxists. Capitalism must be studied both empirically and theoretically, including what makes this social system different from others that have existed in history and that have developed their own forms of imperialism. We then discover that the transition to capitalist imperialism was necessitated by the centralization and concentration of capital (i.e. monopoly capitalism), over-accumulation, or what could be called the hypertrophy of capital (when the mass of capital expands far beyond that which can be valorized solely by surplus value extracted from workers “at home”), and, connected to this, the long-term tendency of the rate of profit to fall that results from the replacement of living labor (the sole source of value) with dead labor, i.e. machinery. Imperialism—or rather, a historically new and very distinctive form of it—is then revealed as an increasingly important way to counter the tendency of the rate of profit to fall, a tendency which distills the very essence of the contradictions of capitalist social relations.
As for the “human nature” which plays such a role in bourgeois pseudo-scientific theories of imperialism, we can say that human nature combines many qualities and potentialities—e.g. for selfishness and for solidarity, for love and for hate—which of these potentialities become realized is profoundly influenced by the socio-economic system you live in and your place within it.
Another major source of confusion results from the artificial separation of economics from politics; imperialism is then seen as a relation of domination and subordination rather than as a relation between exploiters and exploited. This is quite typical of the bourgeois approach, since apologists for capitalism have great difficulty acknowledging exploitation of any type, or that a great part of the wealth currently being accumulated by capitalists in London, Paris and New York was extracted from Africa, Asia and Latin America. Unfortunately (to say the least!), many avowed Marxists resident in imperialist countries deny this reality, I explain in my critique of David Harvey (see John Smith, “Imperialist realities vs. the myths of David Harvey,” March 22, 2018). In other words, students of imperialism should cast an extremely critical eye on everything they read on this subject, especially the opinions of people who claim to be Marxists (and I invite you, indeed I urge you, to cast an extremely critical eye on everything I say in this interview!).
What aspects of imperialism should a newer comrades look into? Where should they begin?
JS: Whichever aspects you find most interesting, whichever seem to you to be most important, whichever seem to be most puzzling and in relation to which existing answers seem insufficient. There really are a million different points of departure, but there is only one mountain peak!
We should begin with what is happening today, we should begin by opening our eyes to the world around us and formulating questions about everything we see that we don’t understand.
Thank you, John, for helping understand aspects of imperialism.
Thank you, Farooque, for asking such interesting questions. I look forward to hearing opinions of readers on the issues covered in this interview.
About John Smith
John Smith received his PhD from the University of Sheffield and is currently self-employed as a researcher and writer. He has been an oil rig worker, bus driver, and telecommunications engineer, and is a longtime activist in the anti-war and Latin American solidarity movements. He is author of the Monthly Review Press book, Imperialism in the Twenty-First Century, winner of the Paul A. Baran and Paul M. Sweezy Memorial Prize.
About Farooque Chowdhury
Farooque Chowdhury is a freelance writer based in Dhaka. His books in English include Micro Credit, Myth Manufactured (ed.), The Age of Crisis, and The Great Financial Crisis, What Next?: Interviews with John Bellamy Foster (ed.), Dhakha: Books (2012), 190 pp.