David Harvey denies imperialism
By John Smith
February 2, 2018 — Links International Journal of Socialist Renewal reposted from Review of African Political Economy — David Harvey, author of The New Imperialism
and other acclaimed books on capitalism and Marxist political economy,
not only believes that the age of imperialism is over, he thinks it has
gone into reverse. In his Commentary on Prabhat and Utsa Patnaik’s A Theory of Imperialism, he says:
Those of us who think the
old categories of imperialism do not work too well in these times do not
deny at all the complex flows of value that expand the accumulation of
wealth and power in one part of the world at the expense of another. We
simply think the flows are more complicated and constantly changing
direction. The historical draining of wealth from East to West for
more than two centuries, for example, has largely been reversed over the
last thirty years (My emphasis, here and throughout – JS, p.169).
For ‘East to West’ read ‘South to North’; i.e. low-wage countries and what some, including this author, insist on calling imperialist countries.
To repeat Harvey’s astonishing claim: during the neoliberal era, i.e.
the last 30 years, not only have North America, Europe and Japan ceased
their centuries-long plunder of wealth from Africa, Asia and Latin
America, the flow has been reversed: “developing countries” are now
draining wealth from the imperialist centres. This assertion, made
without any supporting evidence or estimate of magnitude, repeats
similar statements in Harvey’s earlier works. In 17 Contradictions and the End of Capitalism, for example, he says:
Disparities in the global distribution of wealth and income between countries have been much reduced with rising per capita incomes in many developing parts of the world. The net drain of wealth from East to West that had prevailed for over two centuries has been reversed as East Asia in particular has risen to prominence (p. 170).
The quote’s first sentence greatly
exaggerates global convergence: once China is removed from the picture,
and once account is made of greatly increased income inequality in many
southern nations, no real progress has been made in overcoming the huge
gap in real wages and living standards between the “West” and the rest.The second sentence is refuted by a
cursory examination of the single-most important transformation of the
neoliberal era — the shift of production processes to low-wage
countries. Transnational corporations headquartered in Europe, North
America and Japan have led this process, cutting production costs and
increasing mark-ups by substituting relatively high-paid domestic labour
with much cheaper foreign labour. In his Outsourcing, Protecionism, and the Global Labor Arbitrage Stephen Roach, then a senior economist at Morgan Stanley responsible for its Asian operations, explained why:
In an era of excess supply,
companies lack pricing leverage as never before. As such, businesses
must be unrelenting in their search for new efficiencies. Not
surprisingly, the primary focus of such efforts is labor, representing
the bulk of production costs in the developed world… Wage rates in China
and India range from 10% to 25% of those for comparable-quality workers
in the US and the rest of the developed world. Consequently, offshore
outsourcing that extracts product from relatively low-wage workers in
the developing world has become an increasingly urgent survival tactic
for companies in the developed economies.
The vast scale of production
outsourcing to low-wage countries, whether via foreign direct investment
or via indirect, arm’s length relationships, signifies greatly expanded
exploitation of Southern labor by U.S., European, and Japanese TNCs,
legions of workers who are moreover subject to a higher rate of
exploitation. At times, David Harvey appears to recognise this reality.
In his critique of the Patnaiks, for example, two paragraphs before his
claim that the East is now draining wealth from the West, he notes
“Foxconn, which makes Apple computers under super-exploitative labour
conditions for immigrant labour in Southern China, registers a 3% profit
while Apple, which sells the computers in the metropolitan countries,
makes 27%.” Yet this, and the broader picture which this so eloquently
illustrates, implies new and greatly increased flows of value and
surplus value to U.S., European, and Japanese TNCs from Chinese,
Bangladeshi, Mexican and other low-wage workers, and reason to believe
that this transformation marks a new stage in the development of
imperialism. David Harvey, in defiance of the evidence, but reflecting a
widespread view among Marxists in imperialist countries, believes the
opposite is the case.Harvey’s The Enigma of Capital provides
not only the earliest iteration of his view that the “East” is now
draining the “West” of wealth, but also his source: Harvey quotes
approvingly the “delphic estimates of the US National Intelligence
Council, published shortly after Obama’s election, on what the world
will be like in 2025. Perhaps for the first time, an official US body
has predicted that by then the United States… will no longer be the
dominant player…. Above all, ‘the unprecedented shift in relative wealth
and economic power roughly from west to east now underway will
continue’” (pp. 34-35). Harvey repeats this, but with his own twist:
“This ‘unprecedented shift’ has reversed the long-standing drain of
wealth from east, south-east and south Asia to Europe and North America
that has been occurring since the 18th century” (p. 35).Yet, elsewhere in this book, Harvey
acknowledges that “awash with surplus capital, U.S.-based corporations
actually began to offshore production in the mid-1960s, but this
movement only gathered steam a decade later,” and that the shift of
production to “anywhere in the world – preferably where labour and raw
materials were cheaper” was driven by the decision of US capitalists to
export their capital (directly, via FDI, or indirectly, via capital
markets) rather than invest it at home. All of this implies increasing metropolitan power over the recipient economies and increased exploitation
of their living labour, for which the most appropriate term is
‘imperialism’. A clue that helps explain how Harvey rationalizes his
denial of imperialism can be found in The New Imperialism where
he says “transnational capitalist corporations… spread themselves
across the map of the world in ways that were unthinkable in earlier
phases of imperialism (the trusts and cartels that Lenin and Hilferding
described were all tied very closely to particular nation-states)”
(pp.176-177). In other words, it is deracinated, de-territorialised,
depersonalised “global capital” that profits from the shift of
production to low-wage countries, not U.S. and European multinationals
and their capitalist owners.David Harvey’s Commentary in the Patnaik’s new book is also remarkable for its reference to super-exploitation, notable for its absence in the rest of his work on imperialism and value theory:
The tropical and
subtropical landmass has a huge labour reserve living under conditions
conducive to super-exploitation. Over the last 40 years (and this is
new), capital has increasingly sought to mobilise this labour reserve in
search of higher profits through industrial development. If there is
any one map that confirms the distinctiveness of the tropical landmass,
it is one that shows the location of export processing zones, 90% of
which are on the tropical landmass. And it is the labour reserve that is
the lure not the agrarian base (though the partial proletarianisation
that occurs as social reproduction is taken care of on the land while
capital just exploits the labour at a less than living wage is
undoubtedly important) (p. 165).
He does not define super-exploitation,
but even its invocation is an important departure. However, he
departs…but he does not arrive: “capital” remains a disembodied,
deterritorialised abstraction, not the millionaire owners of
multinational corporations congregated in the imperialist countries,
allowing him to avoid the obvious conclusion: that this new and hugely
important development implies a major boost to flows of value from
low-wage countries to the imperialist centres. Harvey’s obfuscation of
continuing imperialist divisions extends, later on the same page as the
above quote, to the assertion that conditions in labour markets in
‘metropolitan’ and low-wage countries are converging and the borders
between them are disappearing:
the distinction between the
reserve [army of labour] in the metropolitan centre and in the
periphery has been much reduced by globalisation in recent times, such
that we can reasonably think of the capital-labour confrontation as
being more unified now across the spaces of the global economy.
Harvey’s denial of imperialism is
anything but clear-cut. His credentials as a progressive social
scientist and a Marxist theoretician could not survive a categorical
rejection of the contemporary relevance of imperialism, or refusal to
acknowledge the persistence of its most naked and familiar forms.
Instead, he obfuscates, sows confusion, and pretends to be agnostic on
this question of questions. In his critique of the Patnaik’s theory, for
example, he talks of “the imperialism problem—if such there is,” and
gives, as an example,
the case of cotton, the
depressed price of which has been destructive, particularly for West
African producers. The point here is not to deny the transfers of wealth
and value that occur through global trade and extractivism, or from
geo-economic policies that disadvantage primary producers. Rather, it is
to insist that we do not subsume all these features under some simple
and misleading rubric of an imperialism that depends upon an
anachronistic and specious form of physical geographical determinism.
(p. 161).
The last part of this refers to the distinctive theory developed by Prabhat and Utsa Patnaik in A Theory of Imperialism;
whether Harvey’s characterisation of it is fair is beyond the scope of
this article, but it is abundantly clear that Harvey’s target is not
some specious variant of imperialism theory, it is the theory of
imperialism tout court, and all who consider themselves to be anti-imperialists.To conclude: Harvey’s claim that the
“East” is now exploiting the “West,” a claim backed up by nothing more
than his authority, is false. He could not be more wrong, or about a
bigger issue. The root of his error is his denial that the global shift
of production to low-wage countries represents a major deepening of
imperialist exploitation. In an excerpt from my book below, Imperialism in the Twenty-First Century,
I trace Harvey’s failure to acknowledge or analyse this characteristic
feature of neoliberal globalisation through several of his works, as far
back as his celebrated Limits to Capital.
Prominent among contemporary Marxist
theorists, David Harvey has published a series of influential books on
Marx’s theory of value, on neoliberalism, and on new imperialism.
Because of the wide audience he has gained for his views, it is
necessary to subject them to a severe evaluation, a task that can only
be broached here.The central argument in Harvey’s theory
of new imperialism is that the overaccumulation of capital pushes
capitalists and capitalism into an ever-greater recourse to
non-capitalist forms of plunder, that is, forms other than the
extraction of surplus-value from wage-labor, from confiscation of
communal property to privatization of welfare, which arise from
capital’s encroachment on the commons, whether this be public property
or pristine nature.He argues that new imperialism is
characterized by “a shift in emphasis from accumulation through expanded
reproduction to accumulation through dispossession,” this now being
“the primary contradiction to be confronted” (The New Imperialism,
Oxford: Oxford University Press, 2003, pp. 176–77). Harvey is right to
draw attention to the continuing and even increasing importance of old
and new forms of accumulation by dispossession, but he does not
recognize that imperialism’s most significant shift in emphasis is in an entirely different direction—toward
the transformation of its own core processes of surplus-value
extraction through the global labor arbitrage-driven globalization of
production, a phenomenon that is entirely internal to the labor-capital
relation.Harvey’s Limits to Capital
(London: Verso, 2006; first published in 1982) has a deliberately
ambiguous title. This book attempts to discover the limits to capital’s
relentless advance, and also to identify the limitations of Capital, of Marx’s theory of capitalist development. Limits to Capital has far less to say about imperialism than Capital
itself. In fact, imperialism receives just one brief, desultory mention
(pp. 441-2): “Much of what passes for imperialism rests on the reality
of exploitation of the peoples in one region by those in another…. The
processes described allow the geographical production of surplus-value
to diverge from its geographical distribution.” Instead of expanding on
this important insight, it receives no further attention. Harvey returns
to the subject of the geographical shift of production to low-wage
countries in The Condition of Postmodernity (Oxford: Blackwell,
1990, p. 165), where this is seen not as a sign of deepening
imperialist exploitation, as is implied by his passing comment in Limits to Capital, but of its accelerated decline:
From the mid-1970s onwards …
newly industrialising countries … began to make serious inroads into
the markets for certain products (textiles, electronics, etc) in the
advanced capitalist countries, and w[ere] soon joined by a host of other
NICs [Newly Industrialising Countries, such as] Hungary, India, Egypt
and those countries that had earlier pursued import substitution
strategies (Brazil, Mexico)… Some of the power shifts since 1972 within
the global political economy of advanced capitalism have been truly
remarkable. United States dependence on foreign trade … doubled in the
period 1973–80. Imports from developing countries increased almost
tenfold.
This stands reality on its head: far
from signifying a power shift toward low-wage countries, the growth of
foreign trade reflects an enormous expansion of the power of imperialist
TNCs over these countries—and of the increased dependence of these corporations on surplus-value extracted from their workers.This conclusion is suggested by
Harvey’s recognition, in the same work, of (p. 153) “the enhanced
capacity of multinational capital to take Fordist mass production
systems abroad, and there to exploit extremely vulnerable women’s labour
power under conditions of extremely low pay and negligible job
security.”Furthermore, the global shift of
production processes to low-wage nations was driven by TNCs in order to
buttress their competitiveness and profitability, and to great effect,
yet Harvey presents this as evidence of declining imperialist
competitiveness. According to Harvey, core capital attempts to resolve
its overaccumulation crisis through a spatial fix, involving the
production of (p. 183) “new spaces within which capitalist production
can proceed (through infrastructural investments, for example), the
growth of trade and direct investments, and the exploration of new
possibilities for the exploitation of labor-power.”This is what Marx called a chaotic
concept. Instead of the deliberate vagueness of exploration of new
possibilities for the exploitation of labor-power, what about something
much more straightforward like intensified exploitation of low-wage
labor? In the end, Harvey’s attempts to add a spatial dimension to
Marxist theory of capitalism falls flat because he neglects to discuss
the spatial implications of immigration controls, of the deepening wage
gradient between imperialist and semicolonial nations, of global wage
arbitrage.In The New Imperialism,
published in 2003, Harvey devotes two pages to the globalization of
production processes. He begins by inserting this development into his
basic overaccumulation of capital thesis (pp. 63-4): “Easily exploited
low-wage workforces coupled with increasing ease of geographical
mobility of production opened up new opportunities for the profitable
employment of surplus capital. But in short order this exacerbated the
problem of surplus capital production world-wide.”Formally separating industrial
capitalists and financial capitalists, he ascribes the driving source of
the outsourcing wave to the unleashed power of finance capitalists
asserting their domination over manufacturing capital, to the great
detriment of U.S. national interests (pp. 64-65):
A battery of technological
and organisational shifts … promoted the kind of geographical mobility
of manufacturing capital that the increasingly hyper-mobile financial
capital could feed upon. While the shift towards financial power brought
great direct benefits to the United States, the effects upon its own
industrial structure were nothing short of traumatic, if not
catastrophic…. Wave after wave of deindustrialisation hit industry after
industry and region after region…. The US was complicit in undermining
its dominance in manufacturing by unleashing the powers of finance
throughout the globe. The benefit, however, was ever cheaper goods from
elsewhere to fuel the endless consumerism to which the US was committed.
Leaving aside its nationalist and
protectionist perspective, and its failure to notice that cheaper goods
from elsewhere are made possible by cheaper labor elsewhere, that is,
super-exploitation, Harvey’s argument contains a fatal flaw. Outsourcing
was not so much driven by the awakening of finance but by stagnation
and decline in the rate of manufacturing profit and the efforts of the
captains of industry to counter this.Increased imports of cheap manufactured
goods did much more than fuel consumerism, it also directly supported
the profitability and competitive position of North Americas industrial
behemoths, and was actively promoted by them. Far from ending U.S.
dominance—in other words, the ability of its corporations to capture the
lion’s share of surplus-value—outsourcing has opened up new ways for
U.S., European, and Japanese capitalists to entrench their dominance
over global manufacturing production.Harvey’s fundamental error only goes so far in explaining the dreadful reformism of his conclusion to The New Imperialism,
where he pined (pp. 209–211) for “a return to a more benevolent New
Deal imperialism, preferably arrived at through the sort of coalition of
capitalist powers that Kautsky long ago envisaged…. [This] is surely
enough to fight for in the present conjuncture,” forgetting what he
wrote two decades earlier in his conclusion to Limits to Capital (p.
444): “The world was saved from the terrors of the Great Depression not
by some glorious new deal or the magic touch of Keynesian economics in
the treasuries of the world, but by the destruction and death of global
war.”
