In two years’ time, Lenin’s book, Imperialism the Highest Stage of Capitalism, will be a hundred years old. What part of it is still valid? What trends have not passed the test of the latest years? What parts of the book did not take place exactly the way Lenin foresaw?
This article is meant to answer these questions while trying to explain the present day: the situation of imperialism in the early XXI century. Four common pieces of news show a perturbed world on the eve of great events of world class struggles:
· The High Court of New York ruled that Argentine must pay a debt to the “vulture funds” (American speculators). Argentine was unable to pay the notorious “foreign debt” and tried to renegotiate the payment conditions. The vultures did not accept them and appealed to … the American justice!
· The UN Refugee Agency (UNHCR) reported in June 2014 that 51 million people are exiled in the world because of wars, crises and “natural disasters”. These numbers are higher than those of the exiles in the World War II.
· 1922 people died in the civil war in Iraq in June 2014. That stands to a death every 20 minutes; and happens 11 years after American occupation to “pacify” the country.
· The Final Embrace, a photograph by Taslima Akhter, shows a couple of textile workers in Bangladesh in the catastrophe during which 1188 workers were buried alive on the 24th April 2013. The building that housed factories that employed outsourced workers took fire. They produced for the big fashion clothes multinationals as Wal-Mart, Levi’s, Benetton, etc. and earned US$ 76 a month to provide luxury products for the jet-set of Europe and the US. They are the last link in the “Global Value Chain.”
In the early days of the XXI century, the world imperialism under the leadership of the US unleashed a social war, simultaneously with the colonial war in an attempt at recovering the rate of profit of their multinational corporations. We have also witnessed the recolonisation of the planet in varying degrees by 4 or 5 imperialist powers that subordinate and oppress 190 countries in the world.
Far behind us is the historic parenthesis that embraced the 40 years that followed the Second World War, characterised by the great achievements of the world revolution: better living standards in Europe and imperialist countries (known as the Welfare State) and the conquest of national independence by a high number of colonial countries as an outcome of anti-colonial revolutions.
The imperialism was compelled to yield all these concessions fearing that, after the defeat of Nazi-fascism the socialist revolution could win in the entire world, combining the social revolution in advanced countries with the national liberation revolutions of the oppressed peoples of Africa and Latin America.
Is Lenin’s theory of “imperialism” still valid?
Marx and Engel worked out the Marxist theory stemming out of the central contradiction of the capitalist system : the contradiction between capital and labour. According to them, the oppression of colonial and semicolonial peoples would end with the overthrow of the bourgeoisie in the most developed countries in Europe, especially England. That is why the revolution of national independence was part of the Marxist programme of those days.
When Lenin formulated the theory of imperialism, he incorporated the anti-imperialist struggle as a fundamental part of world revolution. As from then on, anti-colonial revolution and the struggle for national independence became a link of the international socialist revolution.
According to Lenin, the imperialist epoch is the epoch of the monopolies, inextricably associated with the epoch of colonial oppression, of subordination of poor countries to imperialist countries. According to this theory, capitalist exploitation walks hand-in-hand with colonial oppression, reinforcing each other.
Another essential and constitutive feature of Lenin’s theory of imperialism is that colonial exploitation, associated with parliamentarianism, allowed the bourgeoisie of central countries to corrupt the leaders of the working class.
In times of economic and political crisis, of great revolutionary struggles, the bourgeoisie call these workers’ leaders to take over and convince the people that it is “their” government which is ruling, leading them to demobilization.
In this objectively revolutionary situation these “progressive” governments spread all over the world, since Mitterrand in France, Walesa in Poland, Sandinist Front in Nicaragua, Farabundo Marti Front in El Salvador, the PT in Brazil, (neo)Peronism in Argentina, Evo Morales in Bolivia, Chavez in Venezuela and a long list. In the whole Europe, Social democracy took over and began to dismantle the Welfare State.
Many challenges to Lenin’s theory of Imperialism have cropped up during these 100 years.
The most complete one was Kautsky’s super-imperialism formulation who considered that the formation of multinationals would lead to the harmonization of the global economy and to a democratic peace and improvements of living conditions for the working class. The domination of the world by American imperialism and the Welfare State in Europe that allowed the “30 glorious years” from 1946 to 1975 seemed to prove Kautsky was right and so to invalidate Lenin’s theory, which defined it as an era of wars, revolutions and colonisation.
After him, some authors began to work on a hypothesis of an emergence of supranational administrations (for example, a European government) leaning on the tendency to corporate globalization and loss of national bases and the end of borders between National States. Other authors assert that the colonial domination of the planet is something of the past and that all the countries have turned independent.
Another opinion, quite trendy among the intellectual left is that American imperialism is on the decline and that China, together with “emergent countries” will be the new superpowers that will – in a few years – replace American supremacy.
All these point of views, stemming out of tendencies that do exist in real life forget the contradictions inside them and see a trend as if it were the entire reality. They commit the mistake that Lenin warned against in the beginning of his Imperialism…
“In order to depict this objective position one must not take examples or isolated data (in view of the extreme complexity of the phenomena of social life it is always possible to select any number of examples or separate data to prove any proposition), but all the data on the basis of economic life in all the belligerent countries and the whole world.” [1]
We therefore wish to start from a summary that Lenin made of his theory to see what was verified in the events of the last 100 years and what was proved wrong or was asserted in a different manner to what the author foresaw:
“If it were necessary to give the briefest possible definition of imperialism we should have to say that imperialism is the monopoly stage of capitalism. (…) we must give a definition of imperialism that will include the following five of its basic features:
(1) the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life; (2) the merging of bank capital with industrial capital, and the creation, on the basis of this “finance capital”, of a financial oligarchy; (3) the export of capital as distinguished from the export of commodities acquires exceptional importance; (4) the formation of international monopolist capitalist associations which share the world among themselves, and (5) the territorial division of the whole world among the biggest capitalist powers is completed.”[2]
We believe that these characteristics are maintained, with anti-trends, operating to the limit, without changing the quality that determines the imperialist epoch as the last stage of capitalism, crises, wars and revolutions.
Monopolies today
Lenin quoted the German review Die Bank: “One fine morning we shall wake up in surprise to see nothing but trusts before our eyes, and to find ourselves faced with the necessity of substituting state monopolies for private monopolies.” [3]
The fundamental characterization of imperialism as the era of monopolies continued to be asserted over the past 100 years. A recent research [4] carried out in Swiss analysed 43,000 multinationals from a database the engulfed 37 million companies from all over the world. The report concluded that 147 corporations controlled 40% of the world’s wealth. 75% of them are financial institutions (J.P. Morgan, Citigroup, Bank of America, Merril Lynch, Goldman Sachs, Black Rock, Barclays, Deustche Bank, BNP, HSBC, Credit Suisse, etc.). The weight of these multinationals is overwhelming. According to the UNCTAD, in 2008 there were 82,000 transnational enterprises with a total of 820,000 foreign subsidiaries. The gross product of these foreign affiliates in the world was responsible for 10.5% of the world GDP in 2009.
The Forbes magazine reported that the sales of the 1,000 biggest enterprises in 2013 reached US$ 31.7 trillion, twice the size of the USA GDP and around 45 per cent of the world GDP. 60 per cent of these sales are concentrated in companies whose headquarters are located in the 5 major imperialist countries and 40.3% of their profit remained in American companies. While the profit of the American companies represents 10% of sales, European and Japanese companies make 5% in average. According to the above quoted magazine, 122 among the 200 largest companies in the world have their headquarters in 5 of the richest countries in the world, representing 61% of the total. Poor counties have nearly 36 firms, representing 18% of the total.
It is interesting to study the links between the 10 traditional families in the capitalist world and the big banks and multinationals. The Rockefeller (USA), Rothschild (England and France), Goldman Sachs (USA), Lechman (USA), Warburg (Germany), Lazard (France), Moises Seifs (Rome), Kun Loeb (USA), and Iwasakie Dan (Japan) are the main beneficiaries of the planet’s spoiling.
The Rockefeller family partly control the following banks: J.P. Morgan, Citigroup, Bank of America, Goldman Sachs, Merrill Lynch, Lehman Brothers and Prudential. These banks are the biggest shareholders of the following companies: AT&T, GM, GE, Dupont, Exxon, British Petroleum, Chevron, Shell, Freeport McMoran, United, Delta, ITT, Xerox, Boeing, Westinghouse, HP, Honeywell, International Paper, Pfizer, Motorola, Monsanto, etc. The Rothschilds have connections with the Rockefellers through J.P. Morgan and Bank of America. In one way or another, these are the families that control the banks and multinationals that control world economy.
Today monopolies have the same dynamics as in Lenin’s days but on much higher levels of territorial domination of the world using the opening of subsidiaries in poor countries instead of armies which are still used but only as a last resource.
Multinationals, outsourcing and global casualisation
The development of monopolies takes place in close relation with the domination over poor countries. According to an OCDE research on the world multinationals [5], labour-intensive production requiring few skilful workers is outsourced to peripheral countries because of their large supply of cheap labour, while developed economies specialize in high-technology industries.
The new feature, which in Lenin’s times was just beginning to crawl, is the transfer of an important share of the production of multinationals to semi-colonial countries, by opening subsidiaries or hiring outsourced suppliers in the most diverse countries in the world building up what is now called Global Value Chains (GVC) that keep the control over high technology in the hands of the mother company and outsource their production, fragmented across many countries in accordance with the “specialisation” and the advantage of producing in each one.
A 2009 research [6] which studied 300 multinational companies whose sales were over a billion dollars each estimates that they achieved 51% of the production, 47% of final assembly, 46% of storage, 43% of customer service and 39% of product development outside their country headquarters.
Low wages, domestic market size and proximity to large imperialist centres determine the preference for certain areas and countries. According to the ILO, a labourer in the manufacturing industry in the Philippines would earn US$ 1.41 per hour in 2010. In Poland he would earn US$ 4.86, in Brazil US$ 5.41 in the USA $ 23.32 and in Germany US$ 25.80. Comparatively, in China wages average US$ 3.50.
The Figures below (source: OECD) shows that high technology activities are centred in imperialist countries, while the production of low and medium technology are transferred to poor countries:
The “emerging” countries known as BRICS have become important producers in the manufacturing industries in the world. While the products’ design and technology are developed in the matrix they are manufactured and assembled in such countries as China, with intermediate parts sourced from other Asiatic countries.
In this way, China was responsible for 19% of the world production in 2010 and became the largest producer in the world. However, this tremendous leap is due to the foreign multinationals that dominate over the local economy. In 2008, multinationals installed in China were liable for 85% of Chinese exports. Being a “manufacturer” of the world does not mean that China will overtake the United States which control the high-technology knowledge in the production of the goods. The value added by the domestic producers in China is small. In the production of an iPod, for example, only 4% of the total cost of production – of US$ 144 – reflects value added that originated in China.
This example goes to prove that Chinese economy is being used by the multinationals to super-exploit the world, while turning China into a semi-colony of world imperialism, a condition of submission which leads to immense contradictions that will explode in the forthcoming years.
The multinationals’ quest of general outsourcing of world production of goods combines working conditions turning increasingly precarious with its geographic localisation in colonial or semi-colonial countries.
For example: the increasing productivity of German exports as an outcome of the production carried out in Eastern Europe, Russia and Ukraine is the main reason for the German “exporting machine”. The average wages in the automaker industry in those countries barely reaches 17% of the wages paid in Germany. The capitalist restoration allowed a leap in the exploitation of workers in the East and the recolonisation of the countries in this region of the world. This raid on the workers of the world and on the poor nations is used as a blackmail to further lower of wages in the rich countries and freezing them for the last ten years.
In 2011, the stock of foreign direct investment (FDI) of multinational companies reached US$ 22 trillion and outstripped the global trade of goods, valued at US$ 18 trillion.
To sum up, the recolonisation of semi-colonial countries is taking place in the form of the implantation of multinational subsidiaries and hiring outsourced local suppliers so as to subordinate them to the Global Chain of multinational production.
An epoch of wars and revolutions
Armed with the theory of Imperialism, Marxists could foresee the outbreak of the Second World War, a war between imperialist countries to decide who was to rule the world. And while they were about it, imperialism used war to try to defeat the Soviet Union and restore capitalism using the power of Hitler’s weapon for that. If this proved victorious, the time of barbarism would begin, showing, in the negative form, the correctness of Lenin’s theory: that imperialism is the phase of decadence of capitalism. However, after the victory of American imperialism which emerged from the war as the master of the world, the possibility of a third world war seemed to drift away.
Lenin suggested this possibility in preparatory studies for his book: “… as far as the financial and commercial interests of the most powerful are concerned, it is highly possible that the forthcoming generation may witness an international of the capital so powerful that it will turn wars between western countries all but impossible.” [7]
The non-existence of this third world war between imperialist countries and the emergence of the U.S. as the dominating imperialism, together with three decades of “social peace” in Europe and in the U.S. seemed to have proven Kautsky’s approach: the development of monopolies would lead to a super-imperialism, with fewer crises and social harmonization under the regime of democracy associated with the improvement of living conditions of the working class.
This is what the world situation seemed to be in that period. In order to understand the essence of the events, we must analyse the circumstances that make a new world war between imperialist countries unlikely and the causes for what is known as the “post-war boom”.
First of all, the panic that the bourgeoisie felt of losing the control of the world. Imperialism learned that after each massacre they would lose control of part of the world. The death toll from WWI was 19 million, out of which 10 million were civilians; plus 7 million disabled and 15 million seriously wounded. That war led an army of 500 million proletarians to hate imperialism and to understand that it could offer nothing but the barbarism of exploiting workers and colonial peoples to save a handful of tycoons.
The war spawned the Russian Revolution and made possible the foundation of the III International, a revolutionary leadership that failed to defeat world imperialism only because the latter could rely on the invaluable support of the social-democratic leaders of European workers to defeat the revolution.
The WWII killed about 50 million people. The defeat of Nazi-fascism unleashed the greatest revolutionary upsurge that mankind had ever seen. The world revolution reached Germany and was spreading across France, Greece, Yugoslavia, Italy, etc. Again, they needed the Stalinism to halt the revolution half way in Germany, building the infamous Berlin Wall.
This revolutionary upsurge compelled imperialism to make a historic concession: the “Welfare State” in the rich countries; this concession was granted to the working class to ensure social peace in the imperialist centres. Simultaneously, colonial countries ensured their formal independence as an outcome of anti-colonial revolutions.
Within the economic scope imperialism used large-scale export of capitals: American multinationals spread all over the world, increasing the exploitation of poor countries. This exploitation of the peripheries (and of the immigrants) made the “social peace” in rich countries last for 30 years. During the European idyll, wars were waged against colonial countries (Vietnam and Correa), coups d’état in Iran in 1953; in Guatemala in 1954; in Congo, 1960; in Brazil, 1964; in Indonesia, 1964; in Dominican Republic, 1965; Ghana, 1966; Greece, 1967; Cambodia, 1970; Chile, 1973; Argentina, 1976; Bolivia… all this in order to submit the countries to American, German and Japanese multinationals. The co-optation of the workers’ leaders in the imperialist centres had its counterpart in the forcible subjugation of poor countries.
A third world war became impossible and unnecessary for American imperialism. The reconstruction of Europe took place under the baton of American capital. The military power expressed in the atomic bomb in Hiroshima gave supremacy to the United States. Germany, Japan, France and England surrendered to American capital and accepted a subordinate role in the exploitation of the world.
Therefore, unique circumstances in history, i.e. economic growth after the massive destruction, use of bourgeois democracy and cooperation of Stalinism and social-democracy allowed for those 30 glorious years.
However, this combination of circumstances that favoured imperialism was upset as from the world economic crisis of 1974. Since that time, multinationals and imperialism reoriented their policy, increasing the exploitation of the poor countries by collecting de “foreign debt”. They begin new relations with the “socialist countries” by means of heavy loans.
World counter-reform begins; it was to make a leap in 1990 when “neoliberalism” was applied all over the world.
The historic parenthesis of “harmony” has closed and the world became convulsed; crises, wars and revolutions predominate again. But these wars are no longer wars between imperialist countries because American imperialism prevails.
“Every huge reform is the sub-product of revolutions”
This historic parenthesis proved the truth of Lenin’s maxim.
The destruction of the “welfare state” and of the achievements obtained by the working class’ struggle after the World War II are carried out by the bourgeoisie all over the world. They counter-reforms were passed in the parliaments with the invaluable help of the social-democratic leadership and proved the fallacy of the strategy of reforming capitalism.
The book by Thomas Piketty Capital in the Twenty-first Century reports a secular overview of the workers’ exploitation in the world and shows the unevenness graph alongside the great struggles of the working class. Seen in a historical perspective, ever since the emergence of the working class, social unevenness accrues with capitalism and proves the accuracy of Marx’s theory of “increasing poverty” (the richer is the capitalist, the poorer is the worker). Thus, historically speaking, capitalism worsened the living standards of the working class. In the XIX century, this theory was challenged by the German E. Bernstein. The developments of the post-Second War seemed to prove he was right against the Marxists for there was an improvement of the working class conditions in the central countries.
However, the statistics published by Piketty show that since 1980 we have been witnessing the return of the levels of social unevenness to the standards of the XIX century. Only huge revolutionary struggles of the working class would get some achievements. This was verified in the periods from 1871, after the Paris Commune and after1914, due to the Russian revolution and after 1945 with the defeat of Nazi-fascism.
In these situations, the bourgeoisie give up part of their profit to prevent a revolutionary leap. For example, the victory of the world working class over Nazi-fascism compelled imperialism to establish the “welfare state” in Europe, USA and Japan.
The Figure below, worked out by Piketty shows the average private capital/national income ratio in the world from 1870 to 2100 (extrapolation). It reveals how many times private capital accumulated in the world exceeds world income.
In the end of XIX century, private wealth is worth around 4.5 years of world income (450%) and reached 5 years in 1910. The ratio fell as from the First World War with the revolutions that occurred in Russia and in Europe and continued sliding down after the Second World War. The downward trend went on from 1910 to 1950 and resumed its upward trend from 1970, going through the 80’s and 90’s with the application of neo-liberalism and the restoration of capitalism in the USSR, China and Eastern Europe. According to Piketty’s projections, where levels of unevenness are concerned, by 2030 we shall be back to the unevenness level (and exploitation of workers) observed in Europe in the XIX century.
This situation is reproduced in the USA as we can see in the Figure of income inequality in the U.S. between 1910 and 2010. The richest 10% share in U.S. national income dropped from 45-50% in the 1910s-1920s to less than 35% in the post-World War and remained at approximately this level until 1980. With the application of neo-liberalism it soared back to 45-50% in the 2000s-2010s, the same level of the 30’s.
In 1940, the World War, the revolutions that emerged from it, the struggles of national liberation in the colonial countries, the opening of subsidiaries of the multinationals in the whole world, the welfare state in Europe and in the U.S. and a revolutionary situation that jeopardised the bourgeois power in Europe led to a decrease in inequality, which lasted until the 1980s.
As from there on, the multinationals, pressed by the economic crisis and the fall of their profit rates, unleash a social and colonial war throughout the planet in order to remove the achievements that the working class had accumulated after the WWII.
The degree of exploitation of workers in the U.S. has recoiled to the 1930 level, as we can see in the Figure below. The profit of American companies emerged from a plateau between 1959 and the 80’s to a continuous increase until 2004, except for some years around 2000.
Inequality returns to optimum unevenness levels for the global bourgeoisie and the world once more suffers convulsions and revolutions all over the planet. The Leninist theory of imperialism, after a long period of being questioned, emerges once more in all its splendour. The massacre of striking miners in Marikana, South Africa, commanded by a British multinational, indicates the return of the super exploitation existent in the century XIX as well as the return of colonial domination in the poor countries. The crackdown resulted in 34 workers killed and 78 wounded.
Minimum wage in France and in the U.S. – 1950-2013
The following Figure, also by Piketty, shows that the U.S. companies managed to impose a higher degree of exploitation on their own working class and that is why they are better than the European ones.
Expressing the power purchase in both countries, the minimum wages per hour rose from US$ 3.80 to US$7.30 between 1950 and 2013 in the U.S. and from 2.10€ to 9.40€ (US$ 2.4 to US$ 11) in France.
While in the U.S. wages fell from the 70’s, in France they increased persistently. The phenomenon has everything to do with the strength of the French working class and the weakness of the American.
It shows why the U.S. recovered from the 2008 crisis faster than Europe. If the European companies cannot lower their wages to the same level and so defeat their working class, they will have no chance whatsoever of competing with American multinationals.
To show in a different manner this contradiction between American and European capital, we shall analyse another Figure from Piketty work: the wealth of the richest 10% in the U.S. and in Europe between 1900 and 2010. Between 1900 and 1910, the share of the richest 10% Europeans in the total income was greater than the Americans’ by 4% (46% to 40%). However, a hundred years later, that of the U.S. richest 10% is much larger (48% to 30%).
This bigger financial benefit of the rich Americans compared to European bourgeois has a lot to do with the dominance over world economy by the U.S. (and their multinational corporations) and with the higher degree of exploitation of their working class.
The United States has an over-concentration of wealth, which today is greater than 1810: The richest 10% of the United States now own 70% of the country’s wealth, while the richest 1% grab 35% of the total wealth of the country.
The difference between Europe and the U.S. consists in the fact that the epicentre of the revolution in the post-war was Europe, where the working class has historically been more organised and politically formed. The level of concessions was much greater in Europe and that is why today the attack and total destruction of social achievements in Europe have to be higher than what was done in the U.S.
The German imperialism, the second imperialist fiddle, uses the European Union to subjugate the European countries, from the Iberian Peninsula to the Russian steppes, from the North Sea to the Mediterranean, producing a new division of labour in the countries and between them, deepening the industrial, commercial, economic, financial and lastly territorial colonisation.
The end of the “welfare state” happened simultaneously with capitalist restoration in USSR, China and the Eastern Europe
The events of the latest 100 years corroborate Lenin’s approach on imperialist stage as a phase of crises, wars and revolutions; a return to “normality”: imperialism strips off the silk gloves to wear the armour of social and colonial war. We can now witness class wars and colonial wars in a range never seen before.
The huge 2008 economic crisis, which happened after the restoration of dozens of formerly “socialist” countries to capitalism and the recolonisation of the entire planet, opens a period of a new division of the world in areas of imperialist influence, a new traumatic division of the main sectors of the economy in the world between large global conglomerates, bigger and more powerful than the trusts of Lenin’s epoch. In this contest of giants, each National State seems to support “their” companies in the global battle for the domination over the world market.
In 1940, Trotsky warned of this close relation between the national state and “its” monopolies:
“The state is not an abstraction but the instrument of monopoly capitalism. So long as trusts and banks are not expropriated for the benefit of the people, the struggle between states is just as inevitable as the struggle between the trusts themselves. Voluntary renunciation by the most powerful state of the advantage given by its strength is as ridiculous a utopia as voluntary division of capital funds among the trusts.”[8]
In the global automakers industry, not more than 3 or 4 groups will survive this crisis and they will form a world oligopoly, because there is overproduction and excess of productive capacity in the sector. There are many competitors disputing the same market operating with low levels of profit margin (about 3% of the turnover). This sector is bound to repeat what has already occurred in global mining: 3 companies control over 9o% of the global production of iron ore! Those companies are in a position to enforce monopoly prices even while they are competitors. In order to survive in the automaker industry and make money, these companies must have production scale of about 6 million vehicles per year. Thus they can make money in the volume sold even if they have a small level of profit margin.
In 2003, the former GM president, Rick Wagoner, stated that: “You cannot have six or seven producers, each one with between 8 and 10% of the market and make money.” In December 2008, the Global President of Fiat foresaw that in the end there would be not more than six great automakers and that just one of them would be American.
Later on, the global chairman of Volkswagen said, “After the recession the survivors will be: one Japanese, one Chinese, two or three in Europe and one in the USA.”
The events in Europe (wars, economic stagnation, bankruptcies of companies and a new division of labour between the countries) will create the conditions to resolve the major controversies installed in the world left, namely:
1 – That capitalism could gradually improve the living standards of the world working class; this reformist challenge of the Marxist law of increasing poverty fell to the ground. European monopolies have to impose condition of exploitation on their working class like the levels prior to the World War II. If they fail to do so, they will not survive the competition with American multinationals. Competition is increased on the European chessboard as well as on the global one. European monopolies must seek territorial expansion towards the poor countries and outsource parts of their production. For this purpose they will use force and an ample network of colonial relations inherited from their past.
2 – The European Union was not constituted to face or challenge the American supremacy but to subordinate to it. Germany is the junior partner building a new global imperialist axis: USA-Germany.
3 – In spite of the European common market and currency, which represent a high degree of unification of continental productive forces, the EU as an institution is the opposite of a free union of countries. Under capitalism, the unification of countries can only be achieved through subordination of the weaker, where it is compelled to accept the association in a subordinate position. German financial capital, seconded by the French, imposes a division of labour in Europe over-exploiting the working class and increasing the antagonisms between the rich countries in the North and the poor ones in the South and East of Europe.
4 – European Union did not put an end to national borders. In spite of the fact that capital exploits the whole world, it is still based on nations, associated to a State that boosts it, expands it and protects it when necessary.
So, in the last 100 years, Lenin’s approach has been verified in the broad sense.
“The capitalists divide the world, not out of any particular malice, but because the degree of concentration which has been reached forces them to adopt this method in order to obtain profits. And they divide it “in proportion to capital”, “in proportion to strength”, because there cannot be any other method of division under commodity production and capitalism. But strength varies with the degree of economic and political development. In order to understand what is taking place, it is necessary to know what questions are settled by the changes in strength. The question as to whether these changes are “purely” economic or non-economic (e.g., military) is a secondary one, which cannot in the least affect fundamental views on the latest epoch of capitalism. To substitute the question of the form of the struggle and agreements (today peaceful, tomorrow warlike, the next day warlike again) for the question of the substance of the struggle and agreements between capitalist associations is to sink to the role of a sophist.
“The epoch of the latest stage of capitalism shows us that certain relations between capitalist associations grow up, based on the economic division of the world; while parallel to and in connection with it, certain relations grow up between political alliances, between states, on the basis of the territorial division of the world, of the struggle for colonies, of the “struggle for spheres of influence”.[9]
Recolonisation haunts the world
Marx did not formulate a programme for the anticolonial revolution in the poor countries because he regarded the liberation of the “backward” people as a byproduct of proletarian revolutions in capitalist centres. “As the exploitation of man by man is abolished, so will exploitation of one nation by another“. [10]
History, however, moved along different paths; the emergence of imperialism created a bourgeois aristocracy in the labour movement and spawned a revolutionary torrent in colonial and semicolonial countries. It was Lenin who updated Marxist programme and placed the revolutions for national independence in colonial countries as an inseparable part of the world revolution: “… the programme of Social-Democracy must point out that under imperialism the division of nations into oppressing and oppressed ones is a fundamental, most important and inevitable fact.”
Lenin formulated the theory that imperialism must oppress and exploit most of the planet to ensure the domination of a handful of rich countries. The fewer the rich countries in the imperialist centre, the poorer the countries in the peripheries of the system : the law of increasing poverty was amplified with the law of increasing colonial domination.
“It is absurd to contrapose the socialist revolution and the revolutionary struggle against capitalism to a single problem of democracy, in this case, the national question. We must combine the revolutionary struggle against capitalism with a revolutionary programme and tactics on all democratic demands: a republic, a militia, the popular election of officials, equal rights for women, the self-determination of nations, etc. While capitalism exists, these demands—all of them—can only be accomplished as an exception, and even then in an incomplete and distorted form… Some of these reforms will be started before the overthrow of the bourgeoisie, others in the course of that overthrow, and still others after it. The social revolution is not a single battle, but a period covering a series of battles over all sorts of problems of economic and democratic reform, which are consummated only by the expropriation of the bourgeoisie.
“Imperialism means the progressively mounting oppression of the nations of the world by a handful of Great Powers; it means a period of wars between the latter to extend and consolidate the oppression of nations;
(…)
“That is why the focal point in the Social-Democratic programme must be that division of nations into oppressor and oppressed which forms the essence of imperialism…” [12]
This law has also been widely questioned due to the process of decolonisation that occurred in the entire globe after WWII. Today, after 25 years of “neoliberalism” there is a process of recolonisation of the world, expressed in colonial occupations as in the case of Iraq, Afghanistan and Mali and in the domination of the big imperialist banks and banks belonging to multinational corporations that subjugate the entire planet to their will.
Today, this recolonisation (called “neo-colonialism” by some) is carried out by means of economic dependence. And yet, when the economic power is not sufficient to submit a country, the power of the weapons and military colonial occupation show that the imperialist national state is the last (and the most important) guardian of capitalist private property.
There is a general agreement as far as the importance of Lenin’s theory of imperialism but there is a point that is “forgotten” or regarded completely unimportant or directly is controversial: the boundary line of world politics, specific product of the imperialist phase, is the division of the world into a handful of wealthy, developed, oppressors, imperialists countries and a majority of poor countries, colonial and semi-colonial, oppressed and exploited nations.
A very common error even in Trotskyism, which Lenin had already identified: “On the other hand, unlike the Proudhonists who “denied” the national problem “in the name of social revolution.” [13]
This error stems out of a vision that any struggle for national questions is something that belongs to the past, the days of the bourgeois revolutions, of the formation of National States and of nationalism. According to this anti-dialectic vision, we are in the epoch of proletarian and internationalist revolutions, an epoch of world economy and revolution.
The uneven and combined development of world capitalism mixes epochs and stages, precisely because the bourgeoisie, after having dominated the world market and subjugated the whole world, tries to prevent the normal capitalist growth of colonial countries. In this way, the backwardness of the periphery is perpetuated for the sake of the growth of the metropolitan centres.
What did change, however, was the form of domination and colonisation: the new dominating imperialism, the U.S., expanded the export of capitals by opening subsidiaries in a large part of the world, guaranteeing in this way the subordination of the national bourgeoisies to imperialism.
The opening of subsidiaries of the multinationals in colonial and semicolonial countries made the domination much more subtle and yet not any less efficient. Formally, the local government is “independent” but in essence it is absolutely subordinated; these countries have formal, juridical and political independence, but actually a huge economic dependence.
This is how the intermediate forms of semicolonisation of the world predominated, as Lenin said:
“Since we are speaking of colonial policy in the epoch of capitalist imperialism, it must be observed that finance capital and its foreign policy, which is the struggle of the great powers for the economic and political division of the world, give rise to a number of transitional forms of state dependence. Not only are the two main groups of countries, those owning colonies, and the colonies themselves, but also the diverse forms of dependent countries which, politically, are formally independent, but in fact, are enmeshed in the net of financial and diplomatic dependence, typical of this epoch.”[14]
This colonial and semicolonial exploitation reached in Lenin’s days 70% of the world population carried out by about 10 economic powers.
Today this engulfs over 97% of the peoples on this planet. Not more than 4 or 5 strong imperialist countries and about two hundred huge conglomerates dominate 190 countries in the world in greater or lesser degree of subordination.
The decolonisation that occurred in the post-World War II led to a common error to think that all countries were independent and would thread a path of normal capitalist economic development through reforms, until being accepted in the club of the “First World”.
The anticolonial revolutions of the post-world war were victorious and yet they ensured formal independence alone, because in fact they freed from British colonial rule only to fall into economic dependence of the American imperialism.
Monopoly goes hand-in-hand with recolonisation
Monopoly and colonial policy walk together in Lenin’s theory of imperialism: “monopolies have stimulated the seizure of the most important sources of raw materials,(…) Monopoly was grown out of colonial policy.”[15]
It is impossible to understand the world today and the relations between the countries in the world system of nations without observing the relations between the multinationals and “their” national states, which subordinate and recolonise the peoples of Asia, Africa, Middle East, Latin America, the east and south of Europe to guarantee the highest degree of exploitation.
This becomes evident when, in 2004, the company Siemens transferred their production to Hungary paying an average salary of 3.8 € while in Germany they would have to pay 26.5 €.
In the dispute for the world market, only some corporations will survive. Those able to grab a huge amount of capital and manage to dominate geographic regions where they can produce parts of their goods with maximum productivity and minimum wages. These Global Value Chains need to combine optimal operating conditions with poor living standards and low wages for the local people. That is why only will survive the company that manages to subordinate poor countries to accept these conditions of exploitation and oppression. Lenin’s theory regards imperialism not only as “politics” but also as economic, political and social relations within an uneven and combined system of state relations.
Each nation seeks trade agreements between countries that allow their companies to get this excellent position. When a country or a determined sector of the domestic bourgeoisie becomes insubordinate with respect to these conditions of exploitation, it is defeated or replaced.
Therefore, seeing things from this angle, the world will be in convulsions during the forthcoming decades. Conflicts between countries, conflicts between classes and sectors of classes, conflicts between multinational corporations to occupy territories for exploitation; conflicts between imperialist countries and semicolonial and colonial countries…
Is China the new superpower that will unseat the United States?
Ever since late 80s, a “new order” has been established as an outcome of the neoliberal orientation for recolonisation of poor countries and capitalist restoration in the USRR, in Eastern Europe and in China.
The U.S. surfaced as the major imperialism and dragged their junior partners: Germany, Japan, France and England.
And then a myth cropped up: China is to be the new global superpower, followed by new regional powers: Brazil, Russia, India, Mexico, South Africa, etc. It is true that these countries have a privileged relation with imperialism; however, this relation presupposes their subordination to the transnationals: they are part of the process of recolonisation.
China has become the “workshop of the world.” 200 million peasants have been expropriated to drive the formation of a new overexploited working class that forced down the world wages. China has dominated industrial manufacture from head to toe and became an export platform of the transnational corporations.
Why is China not the forthcoming superpower? A report from theCongressional Research Serviceindicates that the Direct Foreign Investment (DFI) accumulated in China is US$1.3 trillion resulting from the installation of 445,000 foreign subsidiaries. The same process of recolonisation happens in South America with Brazil in the lead, which took the position of provider of raw material, food and energy for the Chinese leap.
Consequently, neoliberalism and globalisation that we see thriving in the world represent a leap in the overexploitation of the world working class associated to the recolonisation of poor countries, caused by the domination of the transnationals over these countries.
Due to the above, we must consider that the recolonisation of these countries will be traumatic, not due to the resistance offered by some sector of the national bourgeoisie (not very likely, but not to be discarded, as Saddam Hussein and Chavez proved) but because an overall attack on these countries (economic, political, military, etc.) and the resistance that these peoples will offer spawning anticolonial revolutions as a specific part of the world revolution.
The so called BRICS are just export platforms of imperialism, in different degrees of subordination and dependence, for their better domination over the world market. They are submetropolis undergoing the process of recolonisation or “privileged colonies” as Lenin put it.
“The struggle against imperialism without struggle against opportunism and a split way from is a hoax.” [16]
The above quotation is an inseparable part of Lenin’s theory of imperialism. The war highlighted a rotten sector in the international socialist movement. It was precisely the workers’ leaders in imperialist countries who were corrupted by “their” bourgeoisie. Lenin concluded that he could not remain in the same party with this kind of people, corrupted by 30 years of “peace”, parliamentarianism and capitalist development in the central countries:
“In Europe socialism has emerged from a comparatively peaceful stage that is confined within narrow and national limits. With the outbreak of the war of 1914-15, it entered the stage of revolutionary action; there can be no doubt that the time has come for a complete break with opportunism, for its expulsion from the workers’ parties.”[17]
This stage of revolutionary action needs a new kind of party, prepared for it instead of the union/parliamentary routine of the II International.
Lenin’s draft Theses on the fundamental tasks of the Communist International for its Second Congress (1920) sum up the entire experience of the international communist movement related to the opportunist leadership:
“One of the chief causes hampering the revolutionary working-class movement in the developed capitalist countries is the fact that because of their colonial possessions and the super-profits gained by finance capital, etc., the capitalists at these countries have been able to create a relatively larger and more stable labour aristocracy, a section which comprises a small minority of the working class. This minority enjoys better terms of employment and is most-imbued with a narrow-minded craft spirit and with petty-bourgeois and imperialist prejudices. It forms the real social pillar of the Second International, of the reformists and the “Centrists”; at present it might even be called the social mainstay of the bourgeoisie. No preparation of the proletariat for the overthrow of the bourgeoisie is possible, even in the preliminary sense, unless an immediate, systematic, extensive and open struggle is waged against this stratum …”
Thomas Piketty’s empirical data show the emergence of this “proletarian aristocracy” in the rich countries. According to his analyses, it is their individual income and not of classes what identifies this aristocratic sector as part of the middle class:
“Nevertheless, the crumbs that the middle class has collected are important, and it would be wrong to underestimate the historical significance of the change. A person who has a fortune of 200,000 to 300,000 euros may not be rich but is a long way from being destitute, and most of these people do not like to be treated as poor. Tens of millions of individuals—40 percent of the population represents a large group, intermediate between rich and poor—individually own property worth hundreds of thousands of euros and collectively lay claim to one-quarter to one-third of national wealth: this is a change of some moment. In historical terms, it was a major transformation, which deeply altered the social landscape and the political structure of society…” [Piketty, Capital in the Twenty-First Century]
Being aware of the existence of this proletarian aristocracy, which is produce of colonial exploitation and of a great achievement, must warn us of the powerful conflicts that this social layer will develop in defence of their interests now viciously attacked by imperialism.
After the World War II, the expansion of multinationals all over the planet seems to create a workers’ aristocracy along the lines of its congener in rich countries, but with less numerical and social influence. The employees of the big multinationals (and of the state-owned companies) in each country constitute the main basis of the reformist leadership.
A social differentiation within the working class is taking place in Europe:
“…the creation of junk contracts known as “mini-jobs” of 400 € a month (7.5 million workers). This caused 1 out of 4 German workers to gain less than 5 euros a day and the fall of 7% of real wages of the proletariat as a whole between 2000 and 2010. The extension of precariousness has caused an abysmal wage gap of about 40%. Although the old workers’ aristocracy maintains the most essential aspect of their living standards, an increasing broad layer of the proletariat has no access to the standards of the most privileged layer.”[18]
Throughout decades, this social layer has been politically supporting the European social-democracy. After the First World War, the role of this leadership was decisive to prevent the Russian Revolution from expanding throughout Europe.
The war caused imperialism to lose the Russian Empire, which the revolution turned into the Soviet Union. The First World War meant the first challenge for imperialism of losing control over Europe.
The betrayal of the international social-democracy, many times amplified by the destruction of the III International under the Stalinist boot, allowed imperialist bourgeoisies to barge into the World War II. Once again imperialism lost territories, this time in the order of one third of the world map, which ceased to be capitalist.
The imperialism learned from the world wars and revolutions. They learned that they would not survive a third world war. This drove the diverse bourgeoisies from imperialist countries to stricter subordination to their master: American imperialism.
The above quotation from Lenin means that imperialism alone, with all their machinery of exploitation and wars is not fit to win a war, as has been proved in Iraq and Afghanistan in the 2000s or previous to that, in Vietnam in the 1960s.
They can only survive because they can lean on specific sectors of the domestic bourgeoisie in colonial and semicolonial countries and by corrupting a minority of the working class by means of wages or else, directly corrupting their leaders with posts in trade unions or parliaments.
In this way, they managed to co-opt the Marxist mass leadership in the early XX century: European social-democracy first and soon the Stalinism which, for 6o years, betrayed tens of revolutions all over the world and carried out the great betrayal in the post-World War II, thus avoiding a socialist revolution in the entire Europe. Unfortunately, history proved Trotsky to be right by the negative outcome: Stalinism drove 1/3 of mankind back to capitalism and, what is even worse, as semicolonies.
The trajectories of the PT in Brazil, of Evo Morales in Bolivia, of the Sandinist Front in Nicaragua, of Chavez in Venezuela, just to mention a few, prove that it is not possible to change capitalism through the blind alley of parliamentarianism or the management of bourgeois states by “reformist” or “nationalist” administrations.
At present, when the masses begin to break with these “people” governments and make a gradual leftward shift, new tendencies begin to grow electorally, such as Syriza in Europe. Unfortunately, these new anti-capitalist leadership are born with all the flaws of social-democracy, whose strategy is to reform capitalism by means of bourgeois democracy, without any of their virtues such as being fighting parties with high percentage of the working class among their membership.
Is imperialism the “decadent” stage of capitalism?
Most of the scholars of world economy reject this part of Lenin’s theory of imperialism.
Leaning on the development of technology, especially on the revolution caused by the emergence of computers, which initiated a new branch of production, these scholars commit an important error: they take the development of productive forces as development of technology. They do not understand that productive forces are man, nature and technology.
As a whole, productive forces of humanity are being constrained, suppressed and destroyed.
This statement will become clearer within a century. Then we’ll see clearly the economic crisis that began in 2008 evolving as such: the third great depression of capitalism. There have been only two previous crises which compare to that: the one that occurred between 1873 and 1895 and lasted for 22 years and the one that took place between 1914 and 1939 and lasted for 25 years. The first one spawned imperialism, the second one almost drove the world to its destruction and/or to world revolution and the third one, initiated in 2008, unleashed an economic depression that is still gaining precise contours. The first crisis was analysed by Engels, who called it “chronic crisis”, “chronic state of stagnation in all de dominating sectors of industry.”
This long stagnation in the forthcoming decades will bring us wars, recolonisation of poor countries, crises and revolutions, which prepare the conditions for the destruction of imperialism. Apparently, this depressive crisis is not similar to the two previous ones, which were devastating, with the bankruptcy of 25% of the wealth produced in the rich countries, massive unemployment and widespread shortage and poverty.
The difference, however, is not in the nature of these three crises but in the “solution” that bourgeoisie provides. In 1930, the bourgeoisie allowed the banks and companies to bankrupt in general. Today, they cannot do so because banks, merged with their multinational companies by the finance capital, are “too big to fail” and the world capitalist system would fail.
The solution was to inject public money into economy and “go through the motions”. The governments injected US$ 25 trillion to “irrigate” the veins of world capitalism, avoiding the collapse and furthermore transforming the crisis into a long stagnation that will have peaks of sharp falls and weak recoveries.
Furthermore, capitalism develops increasingly its speculative character: according to the BIS (Bank for International Settlements) there are derivative transactions valued at US$ 600 trillion, more than 7 times the entire annual production of the planet. The whole heap of fictitious papers, mountains of debts and super-valued shares, speculative bets and all this will be deflated within the forthcoming decades and become adjusted to the production of real wealth of the world economy.
In order to recover their rates of profit and begin a new period of economic growth, imperialism is unleashing a vicious attack on the living standards of mankind. This social and colonial war will give the keynote during the next decades.
The forthcoming 20 years will be of destruction of productive forces to enable capitalism to resume a new phase of growth. Here we can see the decadent face of imperialism: it thrives destroying.
The best example is the GM case. Instead of nationalizing the bankrupt company, the Obama government closed 18 industrial complexes in the United States, dismissed 37,000 workers and cut down wages. Apart from that, Obama (together with the trade union) assumed the GM debt of US$ 160 billion. That means: he socialised the loss and privatized the profit.
Never before has the famous quote by Karl Marx – to be found in the Communist Manifesto – proved so correct: “Modern government is nothing but a committee to administer all the businesses of the bourgeoisie “. [19]
In its decadence, imperialism presents a tendency of spawn islands of wealth and high productivity embedded in a sea of misery, degradation of human beings and of environment. According to the ILO, there are 246 million children who work and tens of millions of them work under slavery.
Conclusion
Since the development of his theory of imperialism, Lenin ceased to make a sharp separation between democratic revolution (bourgeois) and the socialist revolution (proletarian) and ended up binding them in the historical process, where the anti-colonial revolutions became a prologue of the world revolution .
“There was formerly an economic distinction between the colonies and the European peoples—at least, the majority of the latter—the colonies having been drawn into commodity exchange but not into capitalist production. Imperialism changed this. Imperialism is, among other things, the export of capital. Capitalist production is being transplanted to the colonies at an ever increasing rate. They cannot be extricated from dependence on European finance capital… the separation of the colonies is practicable, as a general rule, only under socialism; under capitalism it is practicable only by way of exception or at the cost of a series of revolts and revolutions both in the colonies and the metropolitan countries.” [20]
Lenin used to believe that wars would open revolutionary situations that caused revolution and that imperialism was the prelude to the world socialist revolution:
“Thus, out of the universal ruin caused by the war a world-wide revolutionary crisis is arising which, however prolonged and arduous its stages may be, cannot end otherwise than in a proletarian revolution and in its victory.” [21]
Trotsky, who formulated the theory of Permanent Revolution, completes this approach:
“The struggle for the national independence of the colonies is, from the standpoint of the revolutionary proletariat, only a transitional stage on the road toward drawing the backward countries into the international socialist revolution.
“The Fourth International does not draw watertight distinctions between the backward and the advanced countries, the democratic and the socialist revolutions. It combines them and subordinates them to the world struggle of the oppressed against the oppressors. Just as the only genuinely revolutionary force of our era is the international proletariat, so the only real program to liquidate all oppression, social and national, is the program of the permanent revolution.”[22]
Imperialism, surfacing over the gigantic contradictions of the planet, seeks its own salvation by taking advantage the unevenness of the world economy and breathing some fresh air between the crises.
Their salvation lies in China (the boom has been going on for 15 years now) as well as their misfortune (when the crisis goes off in a few years’ time). Probably, when China falls into recession, world stagnation will turn into a long depression provided imperialism does not manage to defeat the world proletariat.
The U.S. is making great efforts to avoid the debacle. Burning capital, closing factories, generating massive unemployment and diving to bankruptcy whole countries that will lose weight in the world system of States, the way it is happening now with Portugal and Greece. The number of imperialist countries is shrinking (for practical purposes we can mention the U.S., France, Japan and England) and inside them, large territorial extensions of poor people: spots of poverty – or immigration – in islands of prosperity.
From the point of view of monopolies, a global economy is taking shape where two or three big companies are becoming dominant in each sector, which subordinate a part of the medium and small companies (turning the rest as superfluous), outsourcing production and making their labourers precarious.
Thus, we’ll have a reduced “labour aristocracy” in the parent company and a sea of outsourced workers without papers and without rights, producing around the world for two or three oligopolies that dominate the world production in each branch.
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[1]Lenin, Collected Works Vol. XXVII, pag. 318, Lenin’s emphasis in the original
[2]Idem, pag. 405 & 406.
[3]Idem, pag. 348.
[4]S. Vitali, J.B. Glattfelder y S. Battiston – The Network, of Global Corporate Control – Chair of Systems Design, ETH Zurich: correspondingauthorsbattiston@ethz.ch. Complete text available in arXiv in pre-publication and published by PloSOne, 26 October 2011.
[5]Interconnected Economies, Benefiting from Global Value Chains. OCDE 2013.
[6] MIT Center for Transportation and Logistics, 2009.
[7]Lenin, Lenin, Collected Works, Vol XXVII. Notebooks on Imperialism, 1916, pg. 444, emphasis in the original.
[8]León Trotsky, Manifesto of the Fourth International on the Imperialist War and the Proletarian World Revolution, May 1940 Writings, volume XI, pg. 270.
[9]Lenin, Collected Works Volume XXVII, pg. 438.
[10]Marx and Engels, Communist Manifesto
[11]Lenin, Collected Works, Volume XXVII, 1916, page 269 to 392.
[12]Lenin, The Revolutionary Proletariat and the Right of Nations to Self-Determination. Collected Works, Volume XXVII, 1915, pg. 65 & 66.
[13]Idem, pag. 271.
[14]Lenin, Collected Works Volume XXVII, 1916, pg. 402.
[15]Lenin, Collected Works, Volume XXVII, 1916, pg. 442.
[16]Lenin, Collected Works, Volume XXVIII, 1916, pg. 238.
[17]Lenin, The collapse of the Second International, Collected Works, Volume XXIV, 1915, pg. 268.
[18]The European Union and our policy document on the European situation LIT, February 5, 2014.
[19]Communist Manifesto, Part 1, “Bourgeois and Proletarians”.
[20]Lenin, The discussion of self-determination summed up,Collected Works, vol. XXX, 1916, pg. 37, underscored in the original by Lenin.
[21]Lenin, Collected Works, vol. XXVII, 1916.
[22]Leon Trotsky, Manifesto of the Fourth International on the Imperialist War and the Proletarian World Revolution, May 1940, Writings, volume XI, pg. 278.