Marxist conceptions of imperialism as something systemically connected to the capitalist mode of production have focused on examining how the fundamental tendencies of the capitalist mode express themselves concretely in history when the necessary accompaniment of the mode—a class state—is national. Actual living capitalism has never, even in the contemporary age of globalization, been characterized by either a simple and uniform worldwide division of society into the two fundamental classes of the capitalist mode or a single world capitalist state. Neither has capitalist development ever been anywhere a process confined within national economies. Capitalism in fact created a world economy but through a process in which the conquest of territories and regions outside the initial centres of capitalist emergence completed the job of bringing them into the fold of capitalism long before the potential alternative route of their independent transitions to capitalism could even take off—thus creating the hierarchical division of the world into advanced and backward parts.
The necessity of conceptualizing imperialism thus derives from the fact that without it one cannot analyse the totality of the contradictions that characterize capitalism and create the conditions for a transformation from it—specifically the unevenness and conflicts inherent in the way in which capitalism established and then maintained its rule over the world.
Utsa and Prabhat Patnaik’s latest offering, A Theory of Imperialism, is an addition to the broad genre of Marxist theories of imperialism that have focused on the unequal relationships between different parts of the world associated with capitalism in history. It reinforces from a new angle the core idea found in Patnaik (Accumulation and Stability Under Capitalism, Oxford: Clarendon Press, 1997 and The Value of Money, New Delhi: Tulika Press, 2008) that interaction with a non-capitalist periphery is a necessary condition for capitalism’s stability. While some of the key points in the book can be found in the earlier writings of the co-authors, they are brought together in this book with others into a coherent whole. It is a relatively slim volume which includes, in addition to the main text, a sharply critical commentary by David Harvey along with the authors’ response to it and a more sympathetic foreword by Akeel Bilgrami.
A Theory of Imperialism does not seek to displace other theories of imperialism or offer itself as a superior substitute to them. Instead it makes the more modest claim of drawing attention to an important dimension of the structural relationships characterizing capitalism that in the authors’ view has been relatively neglected. This neglect, of which not merely mainstream economics but even Marx and many Marxists are guilty of, is surprising in their opinion, given that it has been critical to capitalism’s existence from its birth to the present and will continue to be so as long as capitalism survives. Insofar as this is the case, it is argued that imperialism remains intrinsic to capitalism for this reason alone, and once this is acknowledged it is impossible to argue that globalization has rendered imperialism as an irrelevant category.
The key theoretical imperialism premise on which the idea of the necessity of imperialism in A Theory of Imperialism is built is an acknowledged variant of Ricardo’s analysis of the impact on the capitalist accumulation process of diminishing returns in agriculture. The book invokes for this the Marshallian concept of supply price—it is argued that capitalist accumulation creates an increasing requirement for primary commodities which are subject to increasing supply price. In other words, calling forth an increase in production increases unit costs and therefore the price, because more inferior land has to be used for that additional production. As even such land is increasingly exhausted the increasing supply price becomes steeper and tends towards a vertical supply curve. It is not the adverse effects of this increasing price on profits but the stability of the monetary system or the value of money that A Theory of Imperialism emphasizes. Allowing this increasing supply price to consistently express itself would be destabilizing, it is contended, since no other commodity other than those with increasing supply price can effectively function as a form of wealth holding or store of value in such circumstances—their relative value would always be expected to fall. Capitalist accumulation is therefore sustainable only if it can keep the demand for such commodities under check by finding an ‘outer’ world in which the consumption can be compressed to meet the requirements of capital accumulation.
A geographical asymmetry in the natural endowment between tropical and temperate regions—whereby the latter are inherently incapable of producing the range of agricultural commodities that can be grown in tropical regions—forms the second important peg of A Theory of Imperialism. While tropical regions can be potentially self-sufficient, the same cannot be said about the temperate parts of the world. On this count, Ricardo is subject to scathing criticism for deliberately ignoring the fatal implications of this asymmetry for his theory of comparative cost advantage—a problem that also afflicts mainstream neoclassical theory. This geographical asymmetry means that the core of the capitalist accumulation process and metropolitan capital—which happen to be located in or based in the temperate regions—have a permanent dependence on commodities produced in the tropical landmass of the periphery, typically by pre-capitalist producers. In the absence of any land augmenting measures which would lead to an ‘increase in the output per natural unit of land’, these commodities have an increasing supply price.
It is then argued that of the two possible ways of overcoming the constraint imposed by a fixed tropical landmass—instead of land augmentation, income deflation in the periphery is the natural mechanism under capitalist conditions. This income deflation which squeezes the consumption in those regions to the extent needed to release the quantities needed by the core without calling forth an increase in supply price, becomes thus essential for the sustenance of capitalism. This squeeze can work in a direct fashion by curbing consumption in the periphery of precisely those commodities needed by the core or indirectly through diversion of land to the production of those commodities at the expense of those that might be consumed in the periphery. Marx’s proposition of capitalist accumulation of wealth at one end being accompanied by increasing immiseration is thereby given a new meaning. Income deflation and squeeze on the consumption of a vast mass of pre-capitalist petty producers rather than their conversion in surplus-value producing wage-labour is the way they are exploited under capitalism. Even if wages do increase of those directly engaged in capitalist commodity production so that they may experience at best a relative immiseration, the squeeze on consumption in the periphery must necessarily result in absolute immiseration or an increase in poverty—in the specific sense of increasing nutritional deprivation that expresses itself in the form of declining per capita foodgrain intake.
In A Theory of Imperialism, the income deflation process imposed on the periphery works through a combination of tendencies arising from the spontaneous working of the system and that imposed through the state. The distinction between these two, however, is not very sharp as all the examples cited of the spontaneously working squeezes are in effect contingent on appropriate state actions. Thus, de-industrialization and the drain or unilateral transfer through the system of taxation are mentioned as instances of the spontaneous and state induced squeezes on income and consumption respectively during the colonial period. Surely, however, de-industrialization in India in the 19th century depended on the one-way free trade policy of the colonial government, and its spread on the promotion of railway development by the same government. This highlights one possible gap in the book—namely that it doesn’t quite engage with the question of the state and the issues related to actions of states being endogenous to the ‘spontaneous’ operation of the capitalist system even as these states could exercise a degree of relative autonomy (in both the national and international domains). Be that as it may, imperialism—a structure of domination by the core over the periphery that can guarantee the appropriate level of income deflation in and extraction from the latter—is intrinsic to capitalism.
The question of the state becomes important because the crucial foundation of the A Theory of Imperialiism is the contention that land augmentation in the periphery located in the tropical landmass cannot be the norm in capitalism. The reason this is supposed to be the case in A Theory of Imperialism is that such land augmentation is critically dependent on state action—covering not just land reforms but also state investment and expenditure on a large scale—that states, whether colonial or national, have been too constrained to undertake. This constraint on the states—seen almost as a spontaneous outcome of the working of capitalism—has operated through most of capitalism’s history both before as well as after a brief interlude between the end of the Second World War and advent of neo-liberal globalization. The dirigiste regimes that emerged as a result of the specific political conjuncture created by decolonization and the ‘Communist threat’ were able to undertake some limited measures of land augmentation that eased the constraint for a period of time. However, like the Keynesian demand management regimes in the advanced countries, these are seen by the authors to be aberrations that could not last and the ‘spontaneous’ working of the system was restored by globalization. The limits to this aberration were set by the fact that in the absence of income deflation measures on the periphery, aggregate demand expansion in the core produced a destabilizing effect on the value of money despite land augmentation measures. In other words, it is not simply the level of production of tropical commodities in the periphery that matters but the level of the difference between that production and what is consumed in the periphery itself. If that difference falls short of the demand in the core created by accumulation, the value of money would be destabilized.
The book emphasizes the continuity associated with capitalism’s sustained existence rather than the change arising from its historical development that underlie theories of imperialism like Lenin’s. This comes in for sharp criticism from David Harvey on two counts. Firstly, he takes issue with the notion of a fixed and permanent geographical asymmetry on the ground that the geographical environment is also transformed by human action. However, while this may be the case it is not quite clear that such changes can render the natural differences between different regions entirely irrelevant—and therefore this argument does not by itself undermine the book. The second criticism of Harvey is that A Theory of Imperialism does not seem to recognize that many of the relationships and flows of the colonial period have been reversed in the age of globalization. As noted in the response, Harvey surely goes too far in this process of describing the changed reality of world capitalism. More importantly, however, the authors do not deny that there are changes—it is accepted that some of these are important for understanding contemporary imperialism, but some are also only newer ways through which the same result of income deflation in the periphery is obtained.
However, there could be questions posed to A Theory of Imperialism that are somewhat different from Harvey’s and which may be relevant to understanding contemporary capitalism. As long as the capitalist accumulation process is subject to a constraint of increasing supply price of some of the commodities for which it creates an expanding demand, the specific geographical locations of their production and of the accumulation process should not matter from the point of view of the stability of capitalism’s monetary system. At the same time, not merely the ability to squeeze their consumption but also the constraints on the augmentation of production that underlie their increasing supply price appear to rest in A Theory of Imperialism on the producers of these commodities being ‘outside’ the direct capitalist production process. In what sense then is the coexistence of capitalism at the core with a spatially separated periphery essential to resolving a problem lying within the capitalist accumulation process? Or is this coexistence and the mutual interaction of the two resolving the problem arising from that very coexistence, which has very much been an outcome of capitalism’s history?
Surajit Mazumdar teaches at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi.
Utsa and Prabhat Patnaik’s latest offering, A Theory of Imperialism, is an addition to the broad genre of Marxist theories of imperialism that have focused on the unequal relationships between different parts of the world associated with capitalism in history. It reinforces from a new angle the core idea found in Patnaik (1997 and 2008) that interaction with a non-capitalist periphery is a necessary condition for capitalism’s stability.