Re: [OPE] Britain--parasitic and decaying capitalism: A comment

From: D. Göçmen <>
Date: Sun Dec 27 2009 - 14:37:35 EST

can you please indicate the source of David's article.
Thank you,





-----Original Message-----
From: Dave Zachariah <>
To: Outline on Political Economy mailing list <>
Cc: Jacob Richter <>
Sent: Sun, Dec 27, 2009 1:15 am
Subject: [OPE] Britain--parasitic and decaying capitalism: A comment

A comment on David Yaffe's article "Britain--Parasitic and decaying capitalism".
The general outline of the article is consistent with the orthodox theory of imperialism going back to Hobson and Lenin. But even after subtracting the typical complaints against other far-Left groups in Britain, I find parts of the article unconvincing and not well-argued.
A key problem is that what actually constitutes 'imperialism' is not well defined, and in what sense its operation differs from the laws of motion of capitalism that operate within an established market. I would agree that the classical era of capitalist imperialism was characterized by the dominance of the rentier interest and its distinguishing feature is the 'export of capital', i.e. global investment, as opposed to the export of commodities. But I do not think these features are sufficient, and to believe they are will lead into the traps of nationalism and misconceived notions of 'national oppression'.
If capitalists in region A invest in region B, this in itself is not imperialism, but the operation of capitalism. Further, if the capitalists are transformed into rentiers that merely transfer interest payments and dividends from region B to A, then it is the operation of capitalism with finance capital. Both scenarios occur persistently across regions, especially between countries considered to be 'imperialist'.
If 'imperialism' is to mean anything specific it has to relate to 'empire' and therefore to the system of territorial states which pre-dates capitalism. Classical imperialism in the capitalist era then was the convergence of the rentier interest and the interests of the territorial state to establish the above scenario in regions where either the market did not exist or where states opposed the capitalists from outside. Capitalist imperialism is therefore the set of extra-economic mechanisms of coercion used by states when the standard operation of rentiers through an established free market cannot operate in a region for various reasons.
The extraction of interests and dividends by rentiers in Britain from various regions of the world is not equivalent to 'national oppression' as such. Any oppression that results from this economic relation is done by the rentier class, the state apparatus and the client states or organizations that they may involve and not the exploited classes in Britain. (The only sensible use of 'oppressor nation' is the case of settler-colonial states, when an entire community is founded in a region that exploits or excludes the indigenous population.)
The article rightly points out the differential between rates of return on foreign assets flowing between the rich and poor regions. This is to be expected since capital exports from a region is driven by precisely the low rate of return that follows from a stagnant workforce and high levels of capital investment.
This may very well lead to a parasitic extraction by agents in the rich countries but to conclude the nature of this it would be necessary to look at the income flows across all regions. A substantial---I would guess the bulk---of these streams flow between the advanced countries. It is however clear the advanced economies that have been running a persistent trade deficit the past years are parasitic since it means that they are appropriating a part of the surplus product produced elsewhere, from both developing and advanced countries.
Moreover, it does not follow logically that a high rate of return in underdeveloped countries is a result of super-exploitation. Work by Paul C, Allin and myself has shown that rates of return on capital stocks are independent of the wage share, and are determined by the growth of labour, productivity and the level of investments. Still less does it entail that rate of exploitation would be lower if the local working classes were exploited by 'national' capital.
Labour aristocracy
It is certainly true the current levels of living standards in the advanced countries are dependent on income flows from abroad. But to conclude that there exists a 'labour aristocracy' that is somehow bribed by super-profits from 'oppressed nations' is a really weak theory in my view. The article does little to corroborate the theory by identifying the sections of the working-class more precisely; how they actually are benefited by super-profits; from which investments are these super-profits in 'oppressed nations' flowing; how this hypothetical economic relation leads to an ideological mechanism which supports the rentier interest?
The only plausible candidate for the so-called 'labour aristocracy' that the article gives is within the financial sector, which I agree is unproductive and the center of the rentier interest. Employees in the financial sector have an interest in preserving their employment and therefore also the financial system.
But I think the general argument behind the 'labour aristocracy' thesis is conflating the professional middle-class with the working-class. They do not share the same positions in the economic structure anyway. In my view this theory was primarily adopted by small far-Left groups who failed to give a proper account for the reformism within the working-class movement and hence their own political weaknesses. The consequence of such a theory is to destroy the confidence of the labour movement in the advanced countries.
The real issue is the need for global trade-unions with coordinated activities across borders, and the primary obstacle is the wage-differential between regions of varying levels of development in an era of global capital flows. It makes capital flow to low-wage economies with labour reserves and migration flow towards the high-wage economies which weakens bargaining power there. This creates real problems for socialist politics in the advanced countries and is predicted to stabilize once the labour reserves begin to deplete. Then the bargaining power of labour can begin to rise on a global scale.
//Dave Z
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