Is imperialism still imperialist? A response to Patrick Bond
By Walter Daum
June 21, 2018 — Links International Journal of Socialist Renewal reposted from Review of African Political Economy — In Towards a Broader Theory of Imperialism
Patrick Bond joins in the debate between John Smith and David Harvey on
roape.net over the direction of imperialism today. He criticizes both
debaters for overlooking the category of sub-imperialism, a concept that
can indeed help clarify some issues. But in stressing this and other
important matters like environmental destruction and gender oppression,
Bond sidesteps the major issue over which Smith challenges Harvey: what
is the reality of imperialism today? Is it so different from the system
described and analyzed by Lenin, Luxemburg and other Marxists a century
ago that the traditional imperialist powers no longer drain value from
the resources and labor of most of the world?Bond is more critical of Smith than of
Harvey, since he disparages Smith’s ‘old fashioned binary of oppressed
and oppressor nations,’ just as Harvey rejects Smith’s ‘fixed, rigid
theory of imperialism.’ But in avoiding the key issue Bond is in effect
covering for Harvey: focusing on the theory of sub-imperialism serves to
obscure the untenability of Harvey’s position on imperialism itself.Has the drain of wealth reversed?
Let’s begin at the beginning. Smith opened the debate by challenging an assertion by Harvey: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 (Harvey, 2016: 169).As Smith says, this is an astonishing
claim. If the flows of wealth and power are changing direction and have
even been reversed in recent years suggests that the centuries-long
drain of value from African, Asian and Latin American countries to the
imperialist centers of Western Europe and North America has ended:
apparently now the historically oppressed countries of the South (or the
‘East’) are exploiting the imperialist powers!But Harvey does not quite say this. He
uses the designations West and East rather than the now common metaphors
Global North and Global South, shorthand for the imperialist powers and
those they exploit. Harvey’s East and West, in contrast, are purely
geographical terms and therefore analytically not very useful. His East
includes a wealthy imperialist country, Japan, along with many poor and
oppressed countries like Vietnam and Bangladesh. It also includes China,
a country that achieved its independence from imperialism through
revolution and has in recent years set record rates of economic growth
by making its huge labor force available for imperialist
super-exploitation – but which remains poor on any per capita basis. So,
Harvey’s ‘East’ is at best confusing.Harvey responded to Smith by claiming
that Smith had badly misinterpreted his intent: he did not mean his
East/West opposition to stand for South/North. If so, what then is
Harvey’s point? He appears to be criticizing ‘the old categories of
imperialism,’ but then he backs off and says that’s not what East/West
means. Indeed, he doubles down on his East category. Two Eastern
countries, China and Japan, he points out, accurately enough, now have
the second and third largest economies in the world; and ‘the Chinese
and the Japanese now own large chunks of a spiraling US government
debt.’As Smith notes, his argument appeared previously in the book The Empire of Capital.
There, after quoting a U.S. State Department document that observes
that ‘the unprecedented shift in relative wealth and economic power
roughly from west to east now underway, Harvey added: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 eighteenth century. The rise of Japan in the 1960s, followed by
South Korea, Taiwan, Singapore and Hong Kong in the 1970s, and then the
rapid growth of China after 1980, later accompanied by industrialisation
spurts in Indonesia, India, Vietnam, Thailand and Malaysia during the
1990s, has altered the centre of gravity of capitalist development,
although it has not done so smoothly (2011: 35).This makes the East/West opposition
even more confusing. Japanese militarism and imperialism dominated and
exploited parts of East Asia from the late 19th century through World
War II, and Japan does so again today through its economic might. So,
Japan cannot be part of any shift in the way value drains between East
and West: it itself is in the East and it drains value from the East
(now as in the past) as well as from many other countries around the
world.The role of China
China, of course, is the East’s
heavyweight, and because of its economic heft the center of gravity of
the global economy has indeed shifted eastward. Something like 80
percent of the world’s industrial workers are now in the South, most of
those in China (an eye-opening fact brought to attention by Smith and an
almost exact reversal of the ratio that obtained in the middle of the
last century). China’s new role means that a lot of surplus-value is
produced there; but it doesn’t by itself determine whose pockets the new
value flows into.Smith responded to Harvey by
demonstrating, once again, that capitalist profits are still primarily
collected in the imperialist countries of the ‘West’ (more properly the
Global North, which includes Australia as well as Japan). The drain of
wealth from South to North continues, and so (despite Japan’s
imperialist presence in the East) does its distorted variant from East
to West.Nevertheless, a second important
question arises: if the old categories of imperialism do not work, is
that because China has crossed the divide and become transformed from
one of the world’s most exploited countries into one of the exploiters?
In particular, since China has accumulated a huge fund of capital which
it invests all over the world, does this mean that surplus-value now
flows into China? And if that is true, is China now imperialist in its
own right?Yes, some surplus-value does flow to
China, mostly from the South. But China’s remarkable economic growth
rests on the super-exploitation of its own proletariat, above
all the hundreds of millions of displaced rural workers driven away from
the land and into coastal cities where they work extra-long weeks, live
often in cubicles or dormitories and are legally barred from the
fundamental rights of health care and education for their children. That
extreme super-exploitation (not just extracting an extraordinarily high
rate of exploitation but even paying wages under what is necessary to
reproduce the labor power of the working class) has created a great deal
of surplus-value, much of which goes to imperialist investors. That
flow still goes from East to West.And yes, Chinese capital pockets some
of the surplus-value produced there, and some of that is invested
abroad, both in poor countries in Southeast Asia and Africa where
workers can be paid even less than in China – and in enterprises, stocks
and bonds in the West. But despite a net surplus in its foreign assets,
‘China remains a net interest payer to the world due to lower rates of return on its overseas assets.’
China owns nearly $2 trillion in U.S. Treasury bonds, which yield rates
of interest of a few percent at best – close to zero, as Larry Summers
has gloated. In contrast, imperialist investors in China currently earn
twenty or thirty times that rate.[1]
How this looks from the imperialist side was pointed out by Tony
Norfield: ‘A key point is that interest costs on US foreign borrowing
have been far less than the returns on US foreign investments. This has
enabled the US to maintain a positive net investment income, despite the
persistent, large deficit on its foreign investment position’
(Norfield, 2016: 169). All this powerfully suggests that the
surplus-value flow from the U.S. to China does not match that extracted
from China by the West. To sum up on Harvey’s claim, there is a
difference between the shifting balance of wealth between East and
West, on the one hand, and the flow or drain of wealth between those
nebulously defined regions, on the other. There is no question that the
‘East’ has gained relatively in wealth, mainly because of energy
production in the Middle East and Russia and manufacturing in Japan, the
Tigers and China. But that does not mean that there has been an epochal
shift in the flow of value; it is extremely dubious that the
directional flows of centuries have reversed and that the East,
including China, is draining value from the West. Of course, some
countries in the East, including China are also draining value from the
South. But that is not what Harvey said.Sub-imperialism
Now back to Bond. The purpose of
bringing the theory of sub-imperialism into the argument is apparently
to show that the South-to-North drain of value, Smith’s ‘unconvincing’
as well as old-fashioned binary, has to be supplemented by more complex
and nuanced relations among states. It is certainly true that the
Lenin’s ‘division of nations into oppressor and oppressed …[which] forms
the essence of imperialism’ cannot simply be transferred from a century
ago to the present; it has to be built on to account for the appearance
of nations that exhibit aspects of both, that are both exploiters and
exploited. Toward that end, Ruy Mauro Marini introduced the concept of
sub-imperialism in the 1970s’s. Bond, quoting from a previous work by Smith, reminds us of Marini’s contribution:Marini focused on the
elaboration of sub-imperial power wielded by states that are
incorporated into the Western system as regional agents of imperialism,
in which, Smith agrees, ‘dependent economies like Brazil seek to
compensate for the drain of wealth to the imperialist centres by
developing their own exploitative relationships with even more
underdeveloped and peripheral neighbouring economies.’Marini spelled out his theory in many
works. As I read him, Marini regards a state as sub-imperialist if is
not imperialist overall (its economy is ‘dependent’) but it plays an
imperialist-like role locally. Bond would seem to agree, since he refers
to sub-imperial power as ‘wielded by states that are incorporated into
the Western system as regional agents of imperialism,’ and he shares
Marini’s interpretation that the sub-imperialist economies are
dependent. Moreover, Bond has done valuable work in demonstrating that
the BRICS states are not stalwart opponents of neo-liberal imperialism
but rather accomplices with it; his studies of South Africa in
particular extend the analysis beyond Marini’s original example of
Brazil.In responding to Smith, however, Bond
undermines his own understanding of sub-imperialism by favorably
referring to Alex Callinicos’s version of it, which (as he quotes)
embraces ‘a broad category that includes Vietnam, Greece, Turkey, India,
Pakistan, Iran, Iraq, and South Africa.’ Vietnam does not belong in
this company: since it has near-bottom labor costs with wages one-third
of those in coastal China, Chinese capital moves there rather than the
other way around; nor is it militarily the regional power in a
neighborhood that includes China. Callinicos is also off-target at the
other end of his broad sub-imperialist spectrum: he includes Australia,
as if it were a country fundamentally exploited by imperialism rather
than a second-level but fully imperialist power itself (1994: 45, 51).I also do not agree that the
sub-imperialist category should include all the BRICS. Russia, for one,
stands out as a full-fledged imperialist power in its own right, even
though its economy cannot match those of the major Western powers. In
that sense there are parallels between Putin’s Russia and Tsarist Russia
a century ago; recall that the classical Marxist theorists all regarded
Russia as imperialist, of a non-standard form, because of its military
and political weight. As for China, since it remains more exploited than
exploiting, in that respect it fits the sub-imperialist model. But it
wields global rather than regional power and influence. If it is
sub-imperialist it stretches beyond Marini’s (and Bond’s) definition: it
would be a global sub-imperialist sui generis.Putting aside the question of how to
characterize China in theory, to see how it affects the Smith-Harvey
debate it is useful to look more closely at its global economic status.
Even if it eludes the ‘old-fashioned binary,’ does its role justify the
claim that ‘the historical draining of wealth from East to West … has
largely been reversed.’Bond presents evidence that ‘BRICS
firms became some of the most super-exploitative corporations engaged in
accumulation not only on their home turf but also in Africa.’ This, he
argues, buttresses Harvey’s recognition in general of ‘complex spatial,
interterritorial and place-specific forms of production, realisation and
distribution’ and in particular that in Africa ‘Chinese companies and
wealth funds are way ahead of everyone else’s in their acquisitions.’
That suggests that China is draining more wealth from Africa than is the
West, so that even if the East-to-West flow of wealth has not been
reversed, at least the South-to-East flow has outpaced the South-to-West
flow; in that case much of the West’s potential draining of Africa
would have been superseded by China’s.But even that reversal is not
happening. While China engages in the traditional imperialist trade
policy of obtaining raw materials from states in Africa and Latin
America and selling back manufactured goods, in the process often
undermining local industries, nevertheless ‘China is not the largest investor in any part of the world:
it is the fourth largest investor in Africa, third in Latin America,
and third even in its own backyard, Southeast Asia.’ The U.K. and
France, followed by the U.S., are still the largest investors in Africa.[2]
In 2016, the Economic Commission for Latin America and the Caribbean
(ECLAC) said that Chinese investment in the region constitutes a mere 1
percent of total inflows from all investor countries.[3]
So, China is far from supplanting the traditional imperialist powers of
the West in exploiting the resources and labor of Africa.Bond criticizes Smith for not
mentioning the role of the BRICS in exacerbating both super-exploitation
and environmental devastation. But the plentiful evidence Bond supplies
about the BRICS’ depredations does not address the issue that Smith
raises against Harvey, namely that the East-to-West flow of wealth and
value has not just been modified by the rise of China especially but has been reversed. Bond does not even mention the East-West issue in his response.Bond is correct that Smith’s analysis
of China is theoretically inadequate, but that was not Smith’s purpose
here. I share Smith’s view that the rate of exploitation of China’s
workers is far higher than that in the West, and that ‘there is a huge
difference between an “emerging nation” whose leaders dream of becoming a
new imperialist hegemon and the actually-existing imperialist powers
who cannot tolerate such insubordination.’ Harvey, in contrast, seems to
believe that China is already a rising imperialist power: he doesn’t
say so explicitly, but that is a reasonable deduction from his disdain
for the ‘crude and rigid theory of imperialism that John Smith espouses’
and his preference for a ‘more open and fluid analysis of shifting
hegemonies within the world system.’In any case, I agree with Patrick Bond
that the analysis of sub-imperialism can enrich the debate. It helps
disabuse readers of the notion that China and its fellow BRICS are an
alternative to imperialism by showing that they too are exploiting the
South. It also shows, however, that the BRICS are not exploiting the
West – and so it counters Harvey’s contention, not Smith’s.Walter Daum is the author of The Life and Death of Stalinism: a Resurrection of Marxist Theory (1990) and articles on Marxist economic analysis. He taught mathematics at the City College of New York for 35 years.ReferencesAlex Callinicos, ‘Imperialism Today,’ in Marxism and the New Imperialism (Bookmarks, 1994).David Harvey, in Prabhat Patnaik and Utsa Patnaik, A Theory of Imperialism (Columbia University Press, 2016).David Harvey, The Enigma of Capital (Profile Books, 2011).Tony Norfield, The City: London and the Global Power of Finance (Verso, 2016).Notes[1]
‘According to the Conference Board, American multinationals’ average
investment return in China was 33 percent in 2008. In the same time
period, a World Bank team found that the average investment return for
multinationals in general in China was 22 percent. In contrast, in 2008,
the 10-year US Treasury yield returned less than 3 percent.’ (Yu
Yongding, ‘Imbalances in China’s International Payments System,’
Institute for New Economic Thinking, July 13, 2017;
www.ineteconomics.org/perspectives/blog/imbalances-in-chinas-international-payments-system.)[2] United Nations Conference on Trade and Investment (UNCTAD) World Investment Report 2015 lists Chinese FDI to Africa (2013-2014) as 4.4% of total foreign investment.[3]
In 2015 China was the ninth largest investor in Africa, making up 3
percent of global investment inflows behind Italy (7.4 percent), the
United States (6.8 percent), and France (5.7 percent). Center for
Strategic and International Studies (CSIS), ‘Does China dominate global
investment?’ (2018); https://chinapower.csis.org/china-foreign-direct-investment/.
