by Tom Kemp

[p007] by Tom Kemp (for methodology cannot be separated from the analysis to which it leads). The theory of Imperial- ism grew out of Marx’s teaching: it forms an indis- pensable part of its 20th century development: it cannot be rejected, in fact, without rejecting Marxism as a whole. Marx did not develop a specific theory of imperial- ism, for the good reason that the phenomena with which it deals had not yet become over-riding characteristics of capitalism. Yet there is in his work a great part of the fundamental analysis which Lenin and other followers were to develop into such a theory. There was, of course, already colonialism and Marx wrote penetratingly about it.2_ It is wrong, however, to connect the Marxist-Leninist theory exclusively with colonial expansion and colonial rule: it does not set out to explain all those political and economic relationships to which the term ‘imperial- ism’ has been applied. It is, in the first place, an application of historical materialism, which finds the roots of social activity and development in the production and reproduction of the means of existence. On this basis, itself repeatedly changing as men establish greater powers of control over their environment, was built the superstructure of laws, ideas, social and_ political institutions which, insofar as they assumed an autonomy of their own, reacted upon it. This is not a crude kind of ‘economic’ interpretation which finds the driving force in history in material motives, as is so often stated by ill-informed or dishonest critics. 2. The more important of these writings have been collected in the volume On Colonialism, published by Foreign Languages Publishing House (Moscow). Nor does it deal in separable ‘factors-—economic, social, political and so on. It assumes the totality of human relationships, traces out their inter-relation- ships and seeks, not conscious or unconscious motives as the source of historical change, but the motive forces which ultimately derive from an objective source in the conditions of production and reproduction. For this reason, while taking note of the reasons which men give for their actions and the forms which they take in practice, Marxism looks beneath these appearances to discern the laws of social change. On considering imperialism, then, we begin from the objective, material conditions of the economic base, those forces which set in motion ‘great masses, whole peoples and again whole classes of the people in each people’, as Engels put it.3 In contradiction to Marxism, most other explanations of imperialism (however it may be defined) find the most compelling forces in history in what Marxists call the ‘super- structure’—that is, ideas, institutions, motives, values: what men think and say and do are taken to be an adequate basis for framing historical explanation and social diagnoses. For them, therefore, imperial- ism is nothing more than a political or ideological phenomenon: it is a result of power drives, love of war and conquest, desire for glory. Its more or less conscious exponents are statesmen, military leaders, aristocratic castes, even whole peoples, who are somehow able to subordinate the massive productive forces of modern capitalism to their wills, perhaps 3. Engels, F. Ludwig Feuerbach and the Outcome of Classical German Philosophy. Sel. Works (ed. Adoratsky), Vol. I, p. 459.

[p008] 'B6 turning them from their ‘true’ path. In fact, such a theory, propounded most fully by Schumpeter, is the only fully-worked out alternative to the Marxist view. Other theoreticians generally deny that there LABOUR REVIEW—Autumn 1962 is, or was, any such animal as_ imperialism. 4. Schumpeter, J. A. ‘The Sociology of Imperialism’ in Imperialism and Social Classes (ed. Sweezy, P.). A WORLD SYSTEM The capitalist mode of production did not develop in isolated, self-contained societies but had to operate as a world system. ‘Capitalist production,’ wrote Marx, ‘does not exist at all without foreign commerce.’> Although he never reached that part of his examination of capitalism which he intended to devote to the world market, there is ample evidence that he appreciated that, as a mode of production, it was bound to reach out into the whole world, extending the process of circulation of industrial capital. A new and international division of labour was established between the centres of modern industry and the primary producing areas. In the latter the old forms of society were under- mined by the invasion of commodity production and * the establishment of capitalist forms of exploitation. _ India, acquired by England in the period of early capitalism, was a classic case, becoming a battlefield for the clash of interests between different sections of the property-owning classes in the advanced country. Instead of a source of tribute, India was transformed - into a market for industrial products and a field for ‘the investment of capital and its further accumula- . tion. The capitalist relation was extended as under- developed countries like India were drawn into the ~ world market. The creation of a world market was more than © either an application of the division of labour or the geographical extension of capitalist relations. It -.represented the working out of the necessary development of this mode of production, with which Marx was concerned through the three volumes of Capital. The laws of capitalist development express the growing necessity of ‘socialization’ of the * productive forces under capitalism and the contra- dictions inseparable from a regime of private owner- ship of the means of production. This system of ‘private enterprise’ is governed not by human needs but by the need to extract and realize surplus value and to capitalize this surplus value in new means of of production. Those parts of Capital which are most directly relevant to the problems of imperialism concern: (i) the reproduction process—the problem of how surplus value is realized, taken up in the latter part of Vol. II; (ii) the problems related to the develop- ment of the productive forces resulting in the tendency for the rate of profit to fall, dealt with in 5. Marx, K. Capital, Vol. I. Vol. III; (iii) the structural changes brought about by the concentration of capital and the substitution of monopoly for competition as an immanent law of capital growth, outlined in Vol. I and returned to more specifically in Vol. III. It is important to see these component parts of the Marxist theory in relation to each other as parts of a whole, reflecting the laws of the overall structure of capitalism in its development. The purpose of a theory is not to provide a substitute for reality but a guide to its understanding in order that it may be mastered. But if confronta- tion with concrete facts provides the test, the theory must first be understood, the relationship between its parts correctly grasped. Not only did Marx’s analysis of capitalism remain incomplete at the time of his death, the problem of application and inter- pretation against the background of changing reality would have arisen in any case. This creative task devolved on his followers in the labour movement; for historical reasons it has been often inadequately and distortedly taken up, and diverse schools or tendencies have arisen. Some of these divisions have arisen genuinely from differences of interpretation having as their root a one-sided development of a single, or partial, aspect of Marx’s teaching. For a long time, for instance, Marxists gave exaggerated attention to the schemas of Vol. II. Rosa Luxemburg built a whole theory of capital accumulation and imperialism on her interpretation of them. While rightly seeing that continued accumulation was a matter of life or death for capitalism, she went on to find in the absorption of the non-capitalist environment the only important way in which continued expansion could, for a period, be sustained. Failing to distinguish the requirements of an economic model, such as Marx’s schema, which abstract from the real world and cannot give a complete picture of its actual dialectical and contradictory character, she fell into a mechanical method of reasoning. In fact, once brought into the circuit of exchange of capitalism the non-capitalist environment becomes a field for the capitalization of surplus value and the bringing into the orbit of capital of new exploitable supplies of labour power. The new lease of life which capitalism receives from the subjection of new areas or new layers of people can thus be much more 6. Luxemburg, R. The Accumulation of Capital.

[p009] WHAT IS IMPERIALISM important than Luxemburg’s theory assumes. This is shown, too, by her underestimation of the possi- bility of continued expansion of Department I (industries producing means of production) at a faster rate than Department II (industries producing means of consumption) and her relative neglect of the concentration of capital and the falling rate of profit. In fact, she leaves little room for the ‘export of 87 capital’ and the methodical exploitation of under- developed areas as part of the process of imperialism. While making an inspired effort to deal with funda- mental unsettled questions of Marxist political economy, the flaws in her method prevented her from seeing the capitalist process as a whole. Unfortunately, the kind of error to which Rosa Luxemburg was prone keeps cropping up. IMPERIALISM AND MARX’S MODEL The problem of advanced capitalism is not simply one of realizing surplus value, a problem, that is, of markets. In any case, capitalist relations them- selves are a barrier to its realization through the raising of the living standards of the masses of the population. The rising material levels which have taken place in the advanced capitalist countries are a consequence of the expansion of the system as a whole: firstly, its expansion on a world scale bringing into its orbit new possibilities for the extraction and realization of surplus value in the backward areas, secondly, the increase in productivity due, primarily, to technological progress. At the same time, the share of the working class in total output has not increased and the rise in real wages itself has been attributable as much to ‘full employment’ as to an increased real wage per hour. Moreover, such increases would not have been conceded without steady and continuous pressure from the trade unions. It is useless to argue, therefore, that capitalism has solved its problems through paying higher wages or through full employment—these are merely reflections of its ability to find other ways of realizing surplus value and to counteract for a period other crisis tendencies in the system. These ten- dencies— the falling rate of profit, disharmony between different sectors and consequent over- production, monetary disorders—have been opera- ing all the time, but only at certain times have they revealed themselves in symptoms of crisis. At other times they have been overcome by other processes set in motion because of their very presence. Because the capitalist mode of production is a complex and changing entity composed of intricately interacting parts, which, of course, can only be separated from the whole for purposes of analysis, it is difficult to comprehend the whole process which governs its movement. The mistake of many followers of Marx, as with Rosa Luxemburg, is to isolate one particular feature and to build a picture of the operation of capitalism upon this feature pushed to its fullest expression. Thus some Marxists, under the pressure of Keynesian teaching, have linked some sections of Marx’s work too specifically to crisis theory, in the course of which they have made him out to be an underconsumptionist.’ Emphasis is then thrown on the alleged tendency of capitalism to expand the production of consumption goods more rapidly than the demand for them. But, while there is a general tendency for production to outstrip the consuming power of the masses, this is only one of the contradictions of capitalism and may not be the predominant one at any particular time. In the building up of means of production, including that made possible by the ‘export of capital’, a market can be made available which staves off the ever-present tendency to overproduce despite the limited consumption levels of the workers. To see the problem through the optic of underconsumption is to see only part of the picture, and that part only distortedly. It leads on to the view that there can be various offsets to deficiency in demand—Hobson thought that ‘imperialism’ was one such vast offset— government expenditure, armaments, even space projects which somehow abrogate the laws of capitalism. Although they may make possible an expansion, they do so by enabling surplus value to be realized, counteracting the tendency for the rate of profit to fall and increasing the demand for labour power (‘full employment’)—all in conformity with the nature of capitalism, all subject to its contradictions. A classic example is given by the effect upon the rate of profit when the means of production are expanded. The tendency for the rate of profit to fall arises from the fact that only variable capital— Le., the labour power bought by wages—produces surplus value; continued capital accumulation, on the other hand, results in a tendency for more of the total capital to take the form of constant 7. Important flaws in the work by Sweezy, The Theory of Capitalist Development, which is often taken as an ‘authoritative’ exposition of Marxist political economy, arise from this source. M. Dobb, who in the ’30s was more cautious, later succumbed to similar thinking. The contradictions and confusions in the work of such talented people was a result of pressure from Stalinist orthodoxy on the one side and Keynesianism on. the other. They were happiest, of course, when both could be harmonized. Marxism lost heavily as a result of this situation. Oe . .

[p010] 88 capital, ie., plant or fixed capital. This is what is meant by the rising organic composition of capital. In practice, however, as Marx pointed out in enunciating this law, it operates in conjunction with numerous counteracting influences, as a result of which it does not manifest itself neces- sarily in an actual decline in the rate of profit. What is important is that the very nature of this process acts as a compulsion upon capitalists to seek means of evading its operation. This is made more imperative with the growing concentration of capital in fewer hands and the continued mechani- zation of the production process: in fact these developments, which enhance the tendency, are, in turn, part of the struggle to evade it. In short, the tendency for the rate of profit to fall is at the heart of the dynamic of capitalism, which produces not to satisfy social wants, but to make profits and to accumulate as a means to further profits. This apparently never-ending circle is, however, from time to time rudely disturbed when these contra- dictions break through into crisis: then it is no longer possible to go on realizing surplus value at the rate necessary to make further production and accumulation profitable, and the factors making for a fall in the profit rate break surface and temporarily dominate the situation. These natural laws of capitalism bring us directly to the epoch of monopoly capitalism. It shows itself in the growth of concentration or monopoly as well as in the search for new possibilities of extracting and realizing surplus value. It represents an endeavour to find means of evading the consequence of the tendency of the rate of profit to fall by opening up new fields for exploitation with a lower organic composition of capital, removing, at the same time, from the fields already choked with capital, a pressure on the profit rate which would otherwise tend to keep it down over the whole system. It must be borne in mind here that we are now con- sidering not separate national capitalisms, but capitalism as a world system to which the separate parts, whatever their political status, or level of economic development, are integrally related. Naturally we are dealing here with laws at a given level of abstraction. When we come to a confronta- tion with the facts important modifications are LABOUR REVIEW—Autumn 1962 necessary. Also, no attempt has been made to work out these laws here with any degree of refinement: we are sketching the theory with broad strokes, necessarily involving some inaccuracy in detail and making leaps over difficult problems. When we consider historical development we no longer have a chemically pure capitalism as assumed for analytical purposes. We find that the bourgeoisie -has developed within a framework of national states which constrict the productive forces and provide an inner source of political conflict within the capitalist world system. Past historical development still hangs heavily over the scene: old ruling classes retain influence, state policies are set in certain grooves, class struggles assume different forms according to national backgrounds, colonies may have been acquired in an earlier period of commercial capital- ism. In any particular national case, the working out of the laws of capitalism will depend upon such factors as natural resources, the timing and nature of industrialization, the period of entry into the international division of labour, the completeness with which the bourgeoisie has attained political dominance, the strength of the labour movement and so on. In any given case such factors must be care- fully examined: but it must always be remembered that the physiognomy of any particular national capitalism cannot be understood except in relation to the world economy of which it forms a part.8 It may be added that the operation of the laws of capitalism, of its peculiar motive forces, does not automatically remove those forces persisting from earlier historical stages. For instance the old-style colonial policy may continue to be active together with the new and specific relationships between advanced and backward countries which capitalism brings into being. The Marxist-Leninist theory of imperialism does not attempt to provide an explana- tion for all colonial acquisitions, even after capitalism has become dominant.? 8. In this connection Trotsky’s The Permanent Revolution is indispensable; see especially the Intro- duction to the German Edition in the latest English translation (New Park Publications, 1962). 9, See Ch, VI of Lenin’s Imperialism. LENIN ON IMPERIALISM The time has now come to consider the nature of Lenin’s contribution to the theory of imperialism, especially in his work Imperialism: the Highest Stage of Capitalism. This work, written during the First World War while he was in exile in Switzerland at a time when practically the whole Marxist movement had capitulated to the ruling war fever and taken a ‘defencist’ position, was not intended as a piece of original research. Nor had Lenin any intention of laying down inflexible dogma to stand for all time.

[p011] WHAT IS IMPERIALISM Drawing on the data available to him he sought to explain the reasons for the bloody conflict then raging and the pro-war stand of the leaders of the Second International, in order to arm the socialist movement. Although to escape censorship the political lessons were left largely unstated there is no doubt that the alerted reader would draw the necessary conclusions. Lenin set out to show how the capitalism of the late 19th and early 20th century, while developing in accordance with the laws which Marx had dis- cerned, had developed features which marked it off from the old-style competitive capitalism. In his earlier writings he had shown how, while capitalism had played a progressive role in breaking down old restrictions on human development and making possible a rapid development of the productive forces, it did so only by creating new antagonisms: class struggle, crises, concentration of capital, over- production. The ‘contradiction’ reappears with striking force throughout the book. In line with the analytical method of Marxism, Lenin took the most general lines of development in order to show the main direction or tendency of capitalism. He combined features of different national capitalisms to build up a composite picture.!0 In the first three chapters Lenin devotes little atten- tion to the outward thrust of capitalism which many writers have taken to be the main, or most typical, characteristic of imperialism. But Lenin was not seeking to define imperialism in general. He was attempting to describe and track the main lines of capitalist development which had given rise to a whole new epoch which he now named ‘imperialism’. It was an appropriate description because central to it was the division of the world into empires and spheres of economic influence by the main compet- ing capitalist nations and the resulting conflict between them. In drawing together the various aspects of the latest epoch of capitalism Lenin did not provide a summary, one-sentence definition but an extensive description which included the proviso concerning ‘the conditional and relative value of all definitions, which can never include all the con- nections of a fully developed phenomenon’ and adds that ‘all the boundaries in nature and society are conditional and changing’. 10. At the same time, he made a special point of the special features of particular countries. Thus the special development of England is dealt with in a number of places: as the first capitalist country, as one in which leading bourgeois politicians were for a period (1840- 60) opposed to colonial policy, as holder of a mono- polistic position in the world market, etc., but as showing late, or only partially other features of imperialism— monopoly, protection. 89 Lenin’s theory of imperialism cannot therefore be refuted by using a different definition. Lenin was not trying to do what some of his critics assume he was doing; he was, on the contrary, using the Marxist method for understanding the 20th century. All the same, many of his self-styled disciples, especially the Stalinists, have manifestly distorted Lenin and have misappropriated the entire Marxist heritage in such a way as to deform and distort it. The very conditions under which Imperialism was written show that Lenin did not intend it to be the answer to all eventualities. In another pamphlet he wrote ‘an all- sided scientific investigation of imperialism is one thing; such an investigation is just beginning to be made, and is, in essence, as infinite as science itself is infinite. The principles of socialist tactics against capitalist imperialism, however, are quite another thing . . .. (my emphasis—T.K.).!1 No doubt he was thinking of the reading upon which he was engaged and the work which he and his fellow exiles Zinoviev and Bukharin were to embark upon in the first years of the war.!2 There is not in Lenin’s Imperialism, then, a com- pletely worked-out and explicit theory of imperial- ism. To accept it as such is to discredit Lenin’s contribution. It is evident, for example, that he largely took for granted the economic analysis of capitalism which was available in Marx. He did not deal at all with the kind of problem discussed at even obsessive length by Rosa Luxemburg. The inter-connections between the different facets of imperialism are not traced out in detail. While obviously rejecting Hobson’s underconsumptionism, as any Marxist must, he did not reiterate the demo- lition of similar theories which he had undertaken in a number of previous works directed against the Russian Narodniks.!3 There is, nevertheless, an immense gap between the forcefulness and meticu- lous care of Lenin’s work and the dull and sterile dogmatism of his Stalinist ‘followers’. 11. Lenin, ‘The Collapse of the Second International ’ in The War and the Second International, p. 9, and the whole pamphlet for a discussion of the political problems. 12. Both of whom published work on imperialism, no doubt inspired by Lenin; see Lenin’s preface to Bukharin’s Imperialism and World Economy. Such works were, naturally, consigned to oblivion during the Stalin period. 13. Indeed Imperialism should be studied in connection with these earlier works of Lenin on the ‘problem of markets’ which are now all available in English in the first four Vols. of the Collected Works. A Charac- terisation of Economic Romanticism is also available separately.

[p012] 90 ' LABOUR REVIEW—Autumn 1962 IMPERIALISM SINCE LENIN If dogmatic adherence to supposedly Leninist theory must be rejected, what can be said of Lenin’s work in the light of the developments of the past century? In the first place only those who have made the effort to understand Marxist method and Marxist political economy earn the right to attention as serious critics. This certainly does not apply to a host of facile verbal criticisms speaking of Lenin’s lack of originality, a priori reasoning, borrowings from Hobson and Hilferding, which try to assume away the problems which Lenin dealt with, twist definitions and employ methods of controversy which would be instantly condemned if directed against their peers.!'4 Especially does such criticism deserve contempt when it stems from the application of an entirely different definition based upon the assump- tion, in any case, that imperialism must be equated with colonial empire or even with the rule of one people over another. Usually its own presupposition is, as we have seen, that what it calls ‘imperialism’ is a political phenomenon. The question at issue here is the validity of Marxism as a whole. At the same time, as has been briefly hinted, Lenin’s work was incomplete, even for his own day, if only because it took much of the theoretical groundwork for granted. Naturally capitalism has continued to change. Not only is Lenin’s statistical material now of primarily historical interest, but structural changes inside the different national capitalisms and in capitalism as a world system have gone on at a rapid rate. There is no need to recapitulate world history since Lenin’s day. The question is that capitalism has changed in line with its own nature and that, however much research and analysis requires to be done, Lenin’s work neverthe- less remains a significant starting point. On particular points, such as the validity of the concept of finance capital which Lenin took over from Hilferding, there is room for difference of opinion. It concerns primarily the relations between the different sections of the ruling class, and those relations are subject to considerable national variation. In any case, the universal trend seems to be towards the intermingling of industrial and bank capital into a single dominant oligarchy within which 14. Again it would be tedious to provide a full biblio- graphy. Reference may be made, however, to one J. Strachey, as facile an apologist for neo-colonialism as he once was for Stalinism. In The End of Empire he switches from one definition to another with un- doubted virtuosity: e.g., at some points it is ‘the rule of one people by another’. In general he is content with surface phenomena; there is no real economic analysis in his books which are merely controversial tracts based on debater’s tricks. there may be, nevertheless, secondary rivalries. The facts are the arbiters here, and they show that Lenin’s work grasped the significant trend.!5 What at first sight seems to be a more weighty criticism is the question of the role of capital export. The method employed by critics here is to compare the altogether unusual amount of British capital export before 1914 with the capital export from Britain or some other country in recent years. What this overlooks is the uneven development charac- teristic of the imperialist epoch and the fact that neither the amount nor the relative weight of the export of capital is decisive, but its qualititative significance for sustaining the forces of capitalist expansion. Here it can be said that, taking into account the different world situation, export of capital is today of scarcely less importance than it was in Lenin’s day. It still provides an indispensable field for the realization and capitalization of surplus value. The past investment provides a means for the exploitation of labour power on a world scale and contributes its own flow of surplus value. Without continued outlets for capital accumulation the rate of profit would be lower than it is through- out the world system of capitalism. Reference is also made to the shrinking colonial possessions of countries like Britain or France. Of course, if imperialism is identified with formal sovereignty over less developed areas it is on its way out—but no Marxist argues in this way. After all, Germany and the United States never had formal colonies of much economic worth, yet would it be argued that these countries did not participate in the formation of the imperialist epoch, displaying the same drives and characteristics as, say, Britain and France? The answer is that formal empire does not tell the whole story. Nor does the extent of cos- mopolitan investment within the advanced countries themselves disprove Lenin. Such investment was always important and follows from the tendency for capital to seek the most remunerative outlets—which may or may not be in underdeveloped countries. At the same time, these countries have become no less indispensable to advanced capitalism than before, though their relative weight may have changed, regardless of whether they now form sovereign states or not. They remain part of the capitalist world system: they remain tributaries of the advanced countries. Even the existence of such countries as Sweden or Switzerland which have attained prosperity without possessing colonies proves nothing. Not only do the capitalists of such countries invest 15. See, for example, the discussion in Sweezy, op. cit.

[p013] WHAT IS IMPERIALISM on a world scale, but a moment’s thought shows that their fortunes are inseparably connected with those of world imperialism, regardless of their lack of colonies or even political strength. All in all, it can be said that the attempts to ‘refute’ Lenin by a point-by-point discussion of this kind, however smart they try to be, are based upon a misunderstanding, whether it arises from ignorance or malevolence.!6 There would, indeed, be little point in taking up such arguments if they did not lead to spreading confusion and have the obvious aim of proving that ‘imperialism’, as understood by Lenin (or rather misunderstood by his critics) has changed into something else. Such criticisms bear, indeed, all the hall-marks of the pressures emanating from the dominant Keynesian economic orthodoxy and other fashionable theories current in ‘intellectual’ circles. What, then, has capitalism changed into? The replies of a Crosland will differ from those of a Kidron, but the common ground is nonetheless visible—as is the desire to make abso- lutely clear their distance from consistent Marxists. Let us leave aside Crosland, Strachey and their ilk who are open anti-Marxists and consider only the reply of the ‘state capitalists’. According to them what they describe as ‘the permanent arms economy’ has now become the substitute for ‘imperialism’ and, in their vocabulary, is synonymous with contemporary capitalism. ‘ Naturally Lenin could not have envisaged,’ they proclaim, ‘the role of the permanent arms economy in stabilizing mature capitalism, fixing it on a course of almost automatic growth and transposing the locus of stagnation from mature capitalist countries to back- ward ones.” (my emphasis—T.K.) Let us leave aside 16. Such, for example as the article ‘Imperialism. Highest Stage But One’, in International Socialism, Summer 1962, which considers Lenin’s work in isolation and proceeds, with patronizing and smart-alec tone, to ‘refute’ Imperialism piece by piece. In this article, for example, the concept of capitalism as a world system finds no place and the contradictions have disappeared thanks to ‘the permanent war economy’. There are no longer organic links between advanced and backward economies, a ‘relatively high degree of planning’ has taken the place of laisser faire and the article abounds in such ‘discoveries’ as that while Germany is more dependent on imported industrial materials than Britain she has no colonies. The author is impressed by a random assessment of ill-digested information collected from a miscellany of sources and by the latest partial analyses of bourgeois economics. There is no reference to the great monopolies which continue to dominate the economic life of all the newly independent under- developed countries. There is inability even to analyse his own material, such as the shift in investment from extractive to manufacturing industry in countries such as India. But the fact that there is hardly a detail which cannot be contested is less important than the method which is employed and the conclusion to which it leads. 91 the logical inconsistency—the assumption that ‘the locus of stagnation’ was once in the developed countries while the underdeveloped countries pre- sumably grew more rapidly. Let us overlook the fact that to speak of capitalist ‘maturity’ in the sense which it seems to have here—i.e., a state inconsistent with rapid growth—is to use an entirely relative term. The essential things are: (i) the assumption that such growth has been mainly or exclusively a result of ‘arms economy’; and (ii) that this means a new phase of capitalist development. An addiction to novelty for its own sake is the sign of immature thought. Before assuming such a new phase, attention ought to have been given to the roots of the phenomenon supposedly characteristic of it. Of course the level of arms budgets in the major capitalist countries has been considerably higher than in previous periods of peace. Admittedly the demand from the state for arms has provided capitalism with a means of realizing surplus value without, at the same time, making necessary its capitalization (i.e., without creating additional means of production bearing down on the profit rate and creating commodities for which markets would have to be found). In that respect the arms budgets have provided a major sustaining force in the expansion of the past decade and a half. But the devotion of such a high proportion of national output to arms production has been imposed by necessity—the pressure of an antagonistic world system threatening the position of . . . imperialism. To see the high arms production as the sign of a new stage, super- seding imperialism, is to misunderstand the nature of the epoch in which we live: the epoch of decaying capitalism which, capable of prolonged bursts of economic expansion, is nonetheless fighting for its life. What does that mean? It means that the capitalist class fights for the right to continue to exist by extracting and realizing surplus value as a world system dominated by the monopolies of the advanced countries, to which, whatever their political status, the underdeveloped countries remain linked as tributaries. . The so-called ‘arms economy’ repre- sents no qualitative change; the connection between imperialism and militarism was always close, it has become closer in the period of its decline, but there can be no antithesis between the two nor can one substitute for another. Necessarily, the level of arms production has important economic results, as well as influence on the superstructure of capitalist society, but the dominating laws of capitalism have not been overcome. It is to to be hoped that this article will have cleared up some of the confusions which tend today to surround the term ‘imperialism’, that it will contribute to the understanding of Lenin’s work and prepare the way for further studies which can enrich the Marxist analysis of ‘imperialism’,

[p014] 92 LABOUR REVIEW—Autumn 1962 2. New Trends in Imperialism MARXISTS have yet to make any all-round analysis of the new developments in world economics and politics since Lenin wrote Imperialism in 1916. Blame for this tragic gap must rest fairly upon the shoulders of the world Communist Parties; their desertion of the basic principles of Marxism makes the job an impossible task for them. But the recent growth of the revolutionary movement after years of isolation now makes possible the deepening and enriching of our understanding of the world developments which have taken place since the death of Lenin. We need to examine some of the contemporary problems of Imperialism which are in some respects different from those which it faced 40 years ago. This article tries to begin this by developing some of the ideas which have recently appeared in LABOUR REvieEw.! The conclusions reached here can only be tentative; there is a wealth of material to be analyzed and a team of Marxists must be trained who can reduce this to coherence so that the working class can be armed with a greater understanding of the world in which it lives and the necessary tasks which this imposes upon it. Imperialism depends upon the division of the world into rich and poor countries. Traditionally, Marxists have seen the underdeveloped countries fulfilling three inter-connected roles in relation to the advanced Imperialist countries. (a) As areas for the investment of capital. In the last quarter of the 19th century capital began to flow at an increasing pace to the backward areas of the world because of the restrictions to its expansion being encountered in the metropolitan countries. To survive, capitalism needs to realize surplus value on an ever-increasing scale and it was in order to facilitate this realization that capital invaded the underdeveloped parts of the globe. In this way, the pressure of accumulation was relatively reduced at home and the tendency for the rate of profit to fall arrested. 1. See F. K. Girling ‘Opportunism in 1961’ and Tom Kemp ‘The Course of Capitalist Development’ in LaspouR REviEw, Vol. 6, No. 2 and ‘The World Prospect for Socialism’ in LaBour REVIEW, Vol. 6, No. 3. 2. There is perhaps some misconception that the rate of profit earned in the backward countries is consider- ably in excess of that earned in the metropolitan countries. This is not so. The export of capital abroad also tends to raise the rate of profit on home investments. Because there is less domestic capital seeking investment (b) As markets. Capitalism is at once an exploitative and a market economy; exploitative in that the aim of the capitalist is always to increase the ‘gap’ between the output of each worker and the purchas- ing power which he gets in the form of wages. It is by increasing this gap (ie., by raising the rate of exploitation) that the capitalist can prevent his rate of profit from falling. Marx noted this tendency for the rate of profit to fall alongside ‘the progress of industry’, as the organic composition of capital (the ratio of capital to labour) increased. To main- tain the rate of profit there must be ultimately a disproportion between production and consumption. But capitalism is also a market economy. The commodities produced must be sold, and at a profit. In a market economy therefore there must be a rough proportionality between production and con- sumption. In order to produce surplus value on an ever-increasing scale there has to be a disproportion between production and consumption, but in order to realize this surplus value (that is to say, sell the commodities on the market) production and con- sumption have to be in rough proportionality. This is the essence of capitalist crisis; in the final analysis (though not necessarily in the short run) the pro- ductive power of capitalism meets the barrier of an inadequate market. In an attempt to resolve this contradiction, capitalism looks to the backward areas of the world to provide it with the enlarged market which it needs. (c) As suppliers of cheap food and raw materials. This has two results. Because the price of food is very important in determining the price of sub- sistence (wages), cheap sources of food mean that lower wages can be paid to the workers in the metropolitan countries. This raises the rate of exploitation of labour and thus acts as a very important counteracting tendency to the falling rate of profit. In the second place, cheap imports of raw outlets at home, the forces of supply and demand tend to raise the rate of profit which it earns. In the second place, because there is less capital employed in the domestic economy this will tend to increase the reserve army of labour; as a result wages will be reduced and the rate of profit will be increased. In this way the rates of return on home and foreign capital may be brought into a position of near equality. It has been calculated that, in 1948, the return on U.S. foreign investment was about 17% compared with about 13% for home investment. Measures for the Development of Underdeveloped Countries, United Nations 1951, p. 81.

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