Exploitation Colonialism

The theory of imperialism refers to a range of theoretical approaches to understanding the expansion of capitalism into new areas, the unequal development of different countries, and economic systems that may lead to the dominance of some countries over others. These theories are considered distinct from other uses of the word imperialism which refer to the general tendency for empires throughout history to seek power and territorial expansion. The theory of imperialism is often associated with Marxist economics, but many theories were developed by non-Marxists. Most theories of imperialism, with the notable exception of ultra-imperialism, hold that imperialist exploitation leads to warfare, colonization, and international inequality.

Early theories

Marx

While most theories of imperialism are associated with Marxism, Karl Marx never used the term imperialism, nor wrote about any comparable theories. However many writers have suggested that ideas integral to later theories of imperialism were present in Marx's writings. For example, Frank Richards in 1979 noted that already in the ''Grundrisse'' "Marx anticipated the Imperialist epoch." Lucia Pradella has argued that there was already an immanent theory of imperialism in Marx's unpublished studies of the world economy.

Marx's theory of the tendency of the rate of profit to fall was considered particularly important to later theorists of imperialism, as it seemed to explain why capitalist enterprises consistently require areas of higher profitability to expand into. Marx also noted the need for the capitalist mode of production as a whole to constantly expand into new areas, writing that "‘The need of a constantly expanding market chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere."

Marx also argued that certain colonial societies’ backwardness could only be explained through external intervention. In Ireland Marx argued that English repression had forced Irish society to remain in a pre-capitalist mode. In India Marx was critical of the role of merchant capital, which he saw as preventing societal transformation where industrial capital might otherwise bring progressive change. Marx's writings on colonial societies are often considered by modern Marxists to contain contradictions or incorrect predictions, even if most agree he laid the foundation for later understandings of imperialism.

Hobson

J. A. Hobson was an English liberal economist whose theory of imperialism was extremely influential among Marxist economists, particularly Vladimir Lenin, and Paul Baran and Paul Sweezy. Hobson is best remembered for his '' Imperialism: A Study'', published 1902, which associated imperialism with the growth of monopoly capital and a subsequent underconsumption crisis. Hobson argued that the growth of monopolies within capitalist countries tends to concentrate capital in fewer hands, leading to an increase in savings, and a corresponding decline in investment. This excessive saving relative to investment leads to a chronic lack of demand, which can be relieved either through finding new territories to invest into, or finding new markets with greater demand for goods. These two drives result in a need to safeguard the monopoly's foreign investments, or break up existing protections to better penetrate foreign markets, adding to the pressure to annex foreign countries.

Hobson's opposition to imperialism was informed by his liberalism, particularly the radical liberalism of Richard Cobden and Herbert Spencer. He alleged that imperialism was bad business due to high risk and high costs, as well as being bad for democracy, and morally reprehensible. He claimed that imperialism only benefited a select few individuals, rather than the majority of British citizens, or even the majority of British capitalists. As an alternative, he proposed a proto-Keynesian solution of stimulating demand through the partial redistribution of income and wealth within home markets.

Hobson's ideas were enormously influential, and most later theories of imperialism were in some way shaped by Hobson's arguments. Historians Peter Duignan and Lewis H. Gann argue that Hobson had an enormous influence in the early 20th century among people from all over the world:

By 1911, Hobson had largely reversed his position on imperialism, as he was convinced by arguments from his fellow radical liberals Joseph Schumpeter, Thorstein Veblen, and Norman Angell, who argued that imperialism itself was mutually beneficial for all societies involved, provided it was not perpetrated by a power with a fundamentally aristocratic, militaristic nature. This distinction between a benign "industrial imperialism" and a harmful "militarist imperialism" was similar to the earlier ideas of Spencer, and would prove foundational to later non-Marxist histories of imperialism.

Trotsky

Leon Trotsky began expressing his theory of uneven and combined development in 1906, though the concept would only become prominent in his writing from 1927 onwards."Talk of uneven development becomes dominant in Trotsky's writings from 1927 onwards. From this date, whenever the law is mentioned, the claim consistently made for it is that 'the entire history of mankind is governed by the law of uneven development'." - Ian D. Thatcher, "Uneven and combined development", ''Revolutionary Russia'', Vol. 4 No. 2, 1991, p. 237. Trotsky observed that different countries developed and advanced to a large extent independently from each other, in ways which were quantitatively unequal (e.g. the local rate and scope of economic growth and population growth) and qualitatively different (e.g. nationally specific cultures and geographical features). In other words, countries had their own specific national history with national peculiarities. At the same time, all the different countries did not exist in complete isolation from each other; they were also interdependent parts of a world society, a larger totality, in which they all co-existed together, in which they shared many characteristics, and in which they influenced each other through processes of cultural diffusion, trade, political relations and various "spill-over effects" from one country to another.Leon Trotsky, "Peculiarities of Russia's development", chapter 1 in ''History of the Russian Revolution'', Vol.

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In ''The History of the Russian Revolution'', published in 1932, Trotsky tied his theory of development to a theory of imperialism. In Trotsky's theory of imperialism, the domination of one country by another does not mean that the dominated country is prevented from development altogether, but rather that it develops mainly according to the requirements of the dominating country.

Trotsky's later writings show that uneven and combined development is less of a theory of development economics, and more of a general dialectical category that governs personal, historical, and even biological development. The theory was nonetheless influential in imperialism studies, as it may have influenced passages in Rudolf Hilferding's ''Finance Capital'',Marcel van der Linden, "The 'Law' of Uneven and Combined Development: Some Underdeveloped Thoughts". ''Historical Materialism'', Volume 15, Number 1, 2007, pp. 145-165. as well as later theories of economic geography.

Hilferding

Rudolf Hilferding's ''Finance Capital'', published in 1910, is considered the first of the "classical" Marxist theories of imperialism which would be codified and popularized by Nikolai Bukharin and Lenin. Hilferding began his analysis of imperialism with a very thorough treatment of monetary economics and an analysis of the rise of joint stock companies. The rise of joint stock companies, as well as banking monopolies, led to unprecedented concentrations of capital. As monopolies took direct control of buying and selling, opportunities for investment in commerce declined. This had the effect of essentially forcing banking monopolies to invest directly in production, as Hilferding writes:

Hilferding's finance capital is best understood as a fraction of capital in which the functions of financial capital and industrial capital are united. The era of finance capital would be one marked by large companies which are able to raise money from a wide range of sources. These finance-capital-heavy companies would then seek to expand into a large area of operations in order to make the most efficient use of natural resources and, having monopolised that area, erect tariffs on exported goods in order to exploit their monopoly position. This process is summarized by Hilferding as follows:

To Hilferding, monopolies exploited all consumers within their protected areas, not just colonial subjects, however he did believe that " olent methods are of the essence of colonial policy, without which it would lose its capitalist rationale." Thus like Hobson, Hilferding believed that imperialism benefits only a minority of the bourgeoisie.

While acknowledged by Lenin as an important contributor to the theory of Imperialism, Hilferding's position as finance minister in the Weimar Republic from 1923 discredited him in the eyes of many socialists. Hilferding's influence on later theories was thus largely transmitted through Lenin's work, as his own work was rarely acknowledged or translated, and went out of print several times.

Luxemburg

Rosa Luxemburg followed Marx's interpretation of the expansion of the capitalist mode of production very closely. In ''The Accumulation of Capital'', published in 1913, Luxemburg drew on a close reading of Marx to make several arguments about Imperialism. First, she argued that Marx had made a logical error in his analysis of extended reproduction, which would make it impossible for goods to be sold at prices high enough to cover the costs of reinvestment, meaning that buyers external to the capitalist system would be required for capitalist production to remain profitable. Second, she argued that capitalism is surrounded by pre-capitalist economies, and that competition forces capitalist firms to expand into these economies and ultimately destroy them. These competing drives to exploit and destroy pre-capitalist societies led Luxemburg to the conclusion that capitalism would end once it ran out of pre-capitalist societies to exploit, leading her to campaign against war and colonialism.

Luxemburg's underconsumptionist argument was heavily criticised by many Marxist and non-Marxist economists as too crude, although it gained a noted defender in György Lukács. While Luxemburg's analysis of imperialism did not prove to be as influential as other theories, she has been praised for urging early Marxists to focus on the Global South rather than solely on advanced, industrialized countries.

Kautsky

Prior to the First World War Hobson, as well as Karl Liebknecht had theorized that imperialist states could, in the future, potentially transform into interstate cartels which could more efficiently exploit the remainder of the world without causing warfare in Europe. In 1914 Karl Kautsky expressed a similar idea, coining the term ultra-imperialism, or a stage of peaceful cooperation between imperialist powers, where countries would forego arms races and limit competition. This implied that warfare is not essential to capitalism, and that socialists should agitate towards a peaceful capitalism, rather than an end to imperialism.Karl Kautsky,
Ultra-imperialism
'.

Kautsky's idea is often best remembered for Lenin's frequent criticism of the concept. In an introduction to Bukharin's ''Imperialism and World Economy'' for example, Lenin contended that "in the abstract one can think of such a phase. In practice, however, he who denies the sharp tasks of to-day in the name of dreams about soft tasks of the future becomes an opportunist".

Despite being sharply criticized in its own day, ultra-imperialism has been revived to describe instances of inter-imperialist cooperation in later years, such as cooperation among capitalist states in the Cold War.
Lenin, Kautsky and "ultra-imperialism"
', World Socialist Web Site. Commentators have also pointed out similarities between Kautsky's theory and Michael Hardt and Antonio Negri's theory of empire, however the authors dispute this.

Bukharin

Nikolai Bukharin's ''Imperialism and World Economy'', written in 1915, primarily served to clarify and refine the earlier ideas of Hilferding, and frame them in a more consistently anti-imperialist light. Bukharin's main difference with Hilferding was that rather than a single process that leads to imperialism (the increasing concentration of finance capital), Bukharin saw two competing processes that would create friction and warfare. These were the "internationalization" of capital (the growing interdependence of the world economy), and the "nationalization" of capital (the division of capital into national power blocs). The result of these tendencies would be large national blocs of capital competing within a world economy, or in Bukharin's words:

Competition and other independent market forces would, in this system, be relatively restrained at the national level, but much more disruptive at the world level. Monopoly was thus not an end to competition, but rather each successive intensification of Monopoly capital into larger blocs would entail a much more intensive form of competition, at ever larger scales.

Bukharin's theory of imperialism is also notable for reintroducing the theory of a labor aristocracy in order to explain the perceived failure of the Second International. Bukharin argued that increased superprofits from the colonies constituted the basis for higher wages in advanced countries, causing some workers to identify with the interests of their state rather than their class. The same idea would be taken up by Lenin.

Lenin

Despite being a relatively small text which sought only to summarize the earlier ideas of Hobson, Hilferdung and Bukharin, Vladimir Lenin's pamphlet ''Imperialism, the Highest Stage of Capitalism'' is easily the most influential, widely read text on the subject of imperialism.

Lenin's argument differs from previous writers in that rather than viewing imperialism as a distinct policy of certain countries and states (as Bukharin had done, for example), he saw imperialism as a new historical stage in capitalist development, and all imperialist policies were simply characteristic of this stage. The progression into this stage would be complete when:

*"(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 combines which share the world among themselves"
*"(5) the territorial division of the whole world among the biggest capitalist powers is completed."

The importance of Lenin's pamphlet has been debated by later writers due to its status within the communist movement. Some, such as Anthony Brewer, have argued that Imperialism is a "popular outline" which has been unfairly treated as a "sacred text", and that many arguments (such as Lenin's contention that industry requires capital export to survive) are not as well developed as in his contemporaries’ work. Others have argued that Lenin's prefiguration of a core-periphery divide and use of the term "world system" were crucial to the later development of dependency theory and world-systems theory.

Postwar theories

Baran and Sweezy

Between the publication of Lenin's ''Imperialism'' in 1916 and Paul Sweezy's ''The Theory of Capitalist Development'' in 1942 and Paul A. Baran's ''Political Economy of Growth'' in 1957, there was a notable lack of development in the Marxist theory of imperialism, best explained by the elevation of Lenin's work to the status of Marxist orthodoxy. Like Hobson, Baran and Sweezy employed an underconsumptionist line of reasoning to argue that infinite growth of the capitalist system is impossible. They argued that as capitalism develops, wages tend to decline, and with them, the total level of consumption. The ability for consumption to absorb the total productive output of society is therefore limited, and this output must then be reinvested elsewhere. Since Sweezy implies that it would be impossible to continuously reinvest in productive machinery (which would only increase the output of consumer goods, adding to the initial problem), there is an irreconcilable contradiction between the need to increase investments to absorb surplus output, and the need to reduce overall output to match consumer demand. This problem can, however, be delayed through investments in unproductive aspects of society (such as the military), or through capital export.

In addition to this underconsumptionist argument, Baran and Sweezy argued that there are two motives for investment in industry: increasing productive output, and introducing new productive techniques. While in conventional competitive capitalism, any firm which does not introduce new productive techniques will usually fall behind and become unprofitable, in monopoly capitalism, there is actually no incentive to introduce new productive techniques, as there are no rivals to gain a competitive advantage over, and thus no reason to render one's own machinery obsolete. This is a key difference with the earlier "classical" theories of imperialism, especially Bukharin, as here monopoly does not represent an intensification of competition but rather its total suppression. Baran and Sweezy also rejected the earlier claim that all national industries would form a single "national cartel," instead noting that there tended to be a number of monopoly companies within a country: just enough to maintain a "balance of power."

The connection to imperialist violence then, is that most western nations have sought to solve their underconsumption crises by investing heavily into military armaments, to the exclusion of all other forms of investment. In addition to this, capital exports into the less concretely divided areas of the world have increased, and monopoly companies seek protection from their parent states in order to secure these foreign investments. To Baran and Sweezy, these two factors explain imperialist warfare and the dominance of developed countries.

Conversely, they explain the underdevelopment of poor nations through trade flows. Trade flows serve to provide cheap primary goods to the advanced countries, while local manufacturing in underdeveloped countries is discouraged through competition with goods from the advanced countries. Baran and Sweezy were the first economists to treat the development of capitalism in the advanced countries as different from its development in the underdeveloped countries, an outlook influenced by the philosophy of Frantz Fanon and Herbert Marcuse.

In doing so Baran and Sweezy were the first theorists to popularize the idea that imperialism is not a force which is both progressive and destructive, but rather that it is destructive as well as a barrier to development in many countries. This conclusion proved influential, and lead to the "underdevelopment school" of economics, however their reliance on underconsumptionist logic has been criticised as empirically flawed. Their theory also attracted renewed interest in the wake of the financial crisis of 2007–2008.

Nkrumah

Kwame Nkrumah, former president of Ghana (1960–66), coined the term Neocolonialism, which appeared in the 1963 preamble of the Organisation of African Unity Charter, and was the title of his 1965 book ''Neo-Colonialism, the Last Stage of Imperialism''. Nkrumah's theory was largely based in Lenin's ''Imperialism'', and followed similar themes to the classical Marxist theories of imperialism, describing imperialism as the result of a need to export crises to areas outside Europe. However unlike the classical Marxist theories, Nkrumah saw imperialism as holding back the development of the colonized world, writing:

Nkrumah's combination of elements from classical Marxist theories of imperialism with the conclusion that imperialism systematically underdevelops poor nations would, like the similar writings of Ché Guevara, prove influential among leaders of the non-aligned movement and various national-liberation groups.

Cabral

Amílcar Cabral, leader of the nationalist movement in Guinea-Bissau and the Cape Verde Islands, developed an original theory of imperialism to better explain the relationship between Portugal and its colonies. Cabral's theory of history held that there are three distinct phases of human development. In the first, social structures are horizontal, lacking private property and classes, and with a low level of productive forces. In the second, social structures are vertical, with a class society, private property, and a high level of productive forces. In the final stage, social structures are once again horizontal, lacking private property and classes, but with an extremely high level of productive forces. Cabral differed from historical materialism in that he did not believe that the progression through such historical stages was the result of class struggle, rather that a mode of production has its own independent character which can effect change, and only in the second phase of development can class struggle change societies. Cabral's point was that classless indigenous peoples have a history of their own, and are capable of social transformation without the development of classes. Imperialism, then, represented any barrier to indigenous social transformation, with Cabral noting that colonial society had failed to develop a mature set of class dynamics. This theory of imperialism was not influential outside of Cabral's own movement.

Frank

Andre Gunder Frank was influential in the development of dependency theory, which would dominate discussions of radical economics in the 1960s and 70s. Like Baran and Sweezy, and the African theorists of imperialism, Frank believed that capitalism produces underdevelopment in many areas of the world. He saw the world as divided into a metropolis and satellite, or a set of dominant and dependent countries with a widening gap in development outcomes between them. To Frank, any part of the world touched by capitalist exchange was described as "capitalist," even areas of high self-sufficiency or peasant agriculture, and much of his work was devoted to demonstrating the degree to which capitalism had penetrated into traditional societies.

Frank saw capitalism as a "chain" of satellite-to-metropolis relations in which metropolitan industry siphons away a portion of the surplus value from smaller regional centers, which in-turn siphon value from smaller centers and individuals. Each metropolis has an effective monopoly position over the output of its satellites. In Frank's earlier writings he believed this system of relations extended back to the 16th century, while in his later work (after his adoption of world-systems theory) he believed it extended as far back as the 4th millennium BC.

This chain of satellite-metropolis relations is cited as the reason for "the development of underdevelopment" in the satellite, a quantitative retardation in output, productivity and employment. Frank cited evidence that the outflows of profit from Latin America greatly exceed the investments flowing in the other direction from the United States. In addition to this transfer of surplus, Frank noted that satellite economies become "distorted" over time, developing a low-waged, primary goods-producing industrial sector with few available jobs, leaving much of the country reliant on pre-industrial production. He coined the term lumpenbourgeoisie to describe comprador capitalists who had risen to reinforce and profit off of this arrangement.

Newton

Huey P. Newton, the co-founder of the Black Panther Party developed an original theory of imperialism starting in 1970, which he called intercommunalism. Newton believed that imperialism had developed into a new stage known as "reactionary intercommunalism," characterized by the rise of a small "ruling circle" within the United States which had gained a monopoly on advanced technology and the education necessary to use it. This ruling circle had, through American diplomatic and military weight, subverted the basis for national sovereignty, rendering national identity an inadequate tool for social change. Newton declared that nations had instead become a loose collection of "communities of the world," which must build power through survival programs, creating self-sufficiency and a basis for material solidarity with one another. These communities (led by a vanguard of the Black lumpenproletariat) would then be able to join into a universal identity, expropriate the ruling circle, and establish a new stage known as "revolutionary intercommunalism," which could itself lead to communism.

Newton was not widely recognized as a scholar in his own time, however intercommunalism gained some influence in the worldwide Panther movement, and was cited as a precursor to Hardt and Negri's theory of empire.

Emmanuel

Arghiri Emmanuel’s theory of unequal exchange, popularized in his 1972 book ''Unequal Exchange: A Study of the Imperialism of Trade'' is considered a major departure from several recurring themes in Marxist studies of imperialism. Notably it does not rely on an analysis of monopoly capital, or the expansion of the capitalist mode, instead positing that free trade between two fully capitalist nations can still be unequal in terms of the underlying value of trade goods, resulting in an imperialist transfer.

Emmanuel based his theory on a close reading of Marx's writings on price, factors of production and wages. He concurred with Piero Sraffa that differences in wages are the key determinant of differences in costs of production, and thus of prices. He furthermore noted that western, developed nations had much higher wages than underdeveloped ones, which he credited to higher rates of unionization rather than a difference in productivity, for which he saw no evidence. This initial difference in wages would then be compounded by the fact that capital is mobile internationally (allowing the equalization of prices and profit rates between nations), while labor is not, meaning wages cannot equalize through competition.

From here, he noted that if western wages are higher, then this would result in much higher prices for consumer goods, with no change in the quality or quantity of those goods. Conversely, underdeveloped nations’ goods would sell for a lower price, even if they were available in the same quantity and quality as western goods. The result would be a fundamentally unequal balance of trade, even if the exchange value of the goods sold is the same. In other words, core-periphery exchange is always fundamentally "unequal" because any poor country has to pay more for its imports than it would if wages were the same, and has to export a greater amount of goods to cover its costs. Conversely, developed countries are able to receive more imports for any given export volume.

Emmanuel's theory generated considerable interest through the 1970s, and was incorporated into many later theorists’ work, albeit in a modified form. Most later writers, such as Samir Amin, believed unequal exchange was a side-effect of differences in productivity between core and periphery, or (in the case of Charles Bettelheim) of differences in organic composition of capital. Emmanuel's arguments around the role of wages in imperialism have been revived in recent years by Zak Cope.

Rodney

Guyanese historian Walter Rodney was an important link between African, Caribbean, and Western theorists of imperialism through the 1960s and 70s. Inspired by Lenin, Baran, Amin, Fanon, Nkrumah and C. L. R. James, Rodney put forward a unique theory of “capitalist imperialism” that would gain some influence via his teaching position at the University of Dar es Salaam, and through his books.

Questioning Lenin’s periodization of imperialism, Rodney held that rather than emerging in the 19th century, imperialism and capitalism were concomitant processes with a history stretching back to the late middle ages. This capitalist imperialism was tied to the emergence of race, racism, and anti-blackness, which rationalized brutality and exploitation in colonial regions. In doing so, this allowed colonial regions to serve as a “release valve” for European social and economic crises, such as through exporting unwanted populations as settlers, or overexploiting colonial regions in such a manner that would provoke revolt if it were performed in Europe. This was accepted because racialized peoples were only a “semi-proletariat,” stuck between modes of production, with lower wages justified through the idea that they could grow their own food for survival. At the bottom of this system were slaves, often “a permanent hybrid of peasant and proletarian,” racialized in such a manner that wages were deemed unnecessary. Through creating a permanently unsettled global underclass, Europeans had also created a permanent reserve army of labor, who, once imported into Europe or the Americas, could easily be kept from organizing through racism and stratified wages.

Wallerstein

Immanuel Wallerstein argued that any system must be viewed as a totality, and that most theories of imperialism had hitherto incorrectly treated individual states as cl