(OPE-L) Peter Hudis 'What is new in today's imperialism'

From: glevy@PRATT.EDU
Date: Sun Nov 16 2003 - 09:49:57 EST

From another list.  Do you agree with Hudis
about what is new in today's imperialism?
In solidarity, Jerry

What is new in today's imperialism?

by Peter Hudis

Nothing is more hollow than the claim that today's drive for permanent
war lacks an economic basis. If that were so, a total break with
Marxism would be called for. As this year's Marxist-Humanist
Perspectives argues: "Imperialism is not the product of a cabal of
right-wing ideologues who have taken control of the Bush
Imperialism is the expression of a determinant stage of capitalist
production. It can be stopped and uprooted only by abolishing the
capitalist system as a whole."(1)

What is the SPECIFIC aspect of capitalism that gives rise to new
of imperialism? It is the drive to concentrate and centralize capital
ever-fewer hands. Just as the rise of cartels, trusts, and monopolies
the late 19th to early 20th century put traditional laissez-faire
capitalism to rest, so the rise of state-capitalist imperialism in the
post-World War II era resulted from a new stage in the concentration
centralization of capital.

As Raya Dunayevskaya wrote in 1960: "The reason that the capitalistic
world, from its division into five power blocs in World War I, came  out
of World War II with two, and only two, power blocs, nuclearly armed,
that there is just no room for more if this madhouse of `production  for
production's sake,' where the dead labor of machines and not the
labor of human beings has the decisive voice, is to continue. In fact,
there is no room for two."(2)

The fact that the concentration and centralization of capital has
advanced so far that by now "there is no room" for even two
underlines the present effort by the U.S. to achieve global domination
through its drive for permanent war.


However, it is insufficient to point to the economic factors
imperialism. The key is how one conceives of the role played by these
factors. That is, does the economic basis of imperialism enable
capitalism to overcome its endemic contradictions, or does it bring
more sharply to the fore?

This was spoken to in a letter by Raya Dunayevskaya of 1951 that
appeared in the July 2003 issue of NEWS & LETTERS under the title:
"Rudolf Hilferding and the `Stability of Capitalism.'"

Hilferding's theory of finance capital was hugely influential. Lenin's
theory of imperialism was in part indebted to it. Yet there was a key
difference between Lenin and Hilferding. Whereas Hilferding saw the
of imperialism from out of finance-and-monopoly capital as a
feature (in the 1920s he even argued that economic depressions were no
longer possible), Lenin viewed it dialectically, as fomenting
instability and "transformation into opposite."

As Dunayevskaya put it: "Hilferding sees the new stage of capitalism  in
its financial razzle-dazzle appearance and becomes enamored of its
capacity to `unify' commercial, industrial, and financial interests
[instead of being] concretely aware of the greater contradictions and
antagonisms of the new monopoly stage of capitalism....That meant  tacit
acceptance of the capacity of capital to gain a certain `stability,'  to
modify its anarchism as a `constant' feature. [He] saw in [this] new
stage not a transition to a higher form, but something in itself
higher, although `bad.'"

This conceptual ground must serve as our vantage point for probing  into
today's realities. Is the greater concentration and centralization of
capital that underlies the U.S. drive for permanent war
a "stabilizing"
feature, or it is fomenting greater instability and crisis? How we
approach this issue will determine whether we project a liberating
alternative to today's realities or pose instead a theory of


To explore this, we need to take a closer look at what distinguishes
today's imperialism from that of previous periods. The Marxist-
Perspectives Thesis for 2003-2004 mentions several differences:

1) The U.S. today does not seem interested in direct territorial
of the rest of the world, in contrast to the classic stage of
imperialist-colonialism of the late 19th and early 20th century. Ever
since the rise of neo-colonialism in the post World War II era, it has
preferred more indirect methods of domination, by relying on local
surrogates and economic compulsion.

2) Whereas a century ago imperialism hid the tendency of the rate of
profit to decline through the extraction of super-profits from
lands overseas, today the decline in the rate of profit openly drives
capital's imperialist expansion.

There is another difference, noted by Dunayevskaya in 1951, when she
stated that whereas Lenin emphasized the export of capital as a prime
motive for imperialist expansion, the present period is quite

    The bankruptcy of capitalist production compels not the export of
capital for surplus profit; it compels the dominant capitals to seek  to
incorporate and submit to their domination the total national capital
other nations. The smaller national capitals, such as Britain and
France, continue to resist, but they are steadily being forced into a
situation where their capital, manpower, scientific knowledge, etc.  are
being incorporated into the services of the U.S. The same process is
being followed by Russia. This is the process of statification of
production and centralization of capital on a gigantic national and
international scale.(3)

This shift in the nature of imperialism was not obvious at the time.
U.S. came out of World War II as the world's biggest exporter of
capital. As Dunayevskaya noted in NATIONALISM, COMMUNISM,
World War II Russia "looted everything in sight, from East Germany to
Manchuria, the U.S....found it had to give rather than take," as seen
the Marshall Plan for Europe and Truman's Point 4 Program of aid to  the
Third World. It was by no means easy to see in 1951 that imperialism
shifted from the export of capital to the incorporation of other
national capitals. But by being rooted in Marx's CAPITAL and in
reality, Dunayevskaya grasped what eluded many others.

This remains pivotal for today. In the Korean War the U.S. shifted  from
a creditor to a debtor nation, largely due to military expenditures.
situation became permanent with the Vietnam War. Since the 1980s, the
U.S.'s debtor status as a net importer of surplus capital has been a
central feature of the world economy. U.S. indebtedness has by now
reached phenomenal levels. This year's U.S. trade deficit is $450
billion. The federal budget deficit is $455 billion. The two add up to
11% of U.S. GDP. This is no sign of strength. It is a sign of

To finance these enormous deficits the U.S. is forced to tap the
resources of foreign capitalists by getting them to buy U.S. treasury
bonds and various securities. The U.S. is importing far more than it  is
exporting and it's going deeper and deeper into debt. The U.S. is now
more dependent on foreign capital than at any time in the past 50
Foreign capitalists now own 46% of all U.S. treasury bonds!


As any student of economic history knows, foreign indebtedness is no
recipe for world dominance. From the Hellenic city-states in the
post-Alexandrian period to the crisis besetting Rome in the fourth and
fifth centuries AD, and from the more recent examples of the decline  of
British imperialism to the collapse of the USSR after the latter fell
into a massive debt crisis in the 1980s, the list of empires that came
apart under the impact of foreign indebtedness is a long one indeed.  So
how can the U.S. sustain such massive foreign debts and still claim to
rule the world economy?

Of course, many contingencies define the size of the trade deficit.
year the dollar has fallen in value by 25% against the euro, and a
weaker dollar tends to reduce the size of the trade deficit. There's
nothing that says the size of the trade deficit will forever expand,
though shortly after the Iraq war Bush declared that he's committed to
strengthening the value of the dollar.

Whatever impact this may have, one thing is clear: instead of dumping
its surplus capital abroad, as was true in Lenin's day, the U.S.
continues to draw in massive amounts of foreign capital.
Its "dominance"
of the world is based on a profound dependence.

The bulk of this imported surplus capital comes from Europe and Asia.
Yet while the U.S. imports far less capital from the Third World than
from Europe or Japan, the human impact is far more devastating on the
Third World since it has so much less capital to begin with. The lack
flow of investment capital to the technologically underdeveloped
countries continues to devastate Africa especially.

Why does foreign capital continue to invest in the U.S., since many
factories in West Europe and Japan are more automated than those in  the
U.S. and U.S. labor productivity is lower than in many countries? The
introduction of new technologies is spread around the world and many
countries have invested more per capita in high tech than has the U.S.
One major industry in which the U.S. enjoys a competitive advantage
its rivals is military production (aside from agriculture, which is
heavily state subsidized). So why don't European and Asian capitalists
just invest their surplus capital at home?

Recent reports on the U.S. economy provide a clue. Since 1970
productivity growth in the U.S. has lagged behind most European
countries--1.4% a year, while Europe grew in excess of 2%. But since
1995 U.S. productivity growth has increased vis a vis Europe. Why?

The answer is indicated in figures which show that labor productivity
the U.S. grew in the first quarter of 2003 by 5.7%. What explains  such
massive growth in productivity? Have U.S. capitalists invented a new
machine that has radically boosted labor productivity? Have U.S.
decided to work harder for their bosses? Hardly. The reason is that
companies are laying off workers and cutting health benefits even as
they force out ever-more production. As one report puts it: "Output  has
been growing while employment has been shrinking, producing the
explosion of productivity growth that we observe in the U.S. data."(4)

Here is part of the reason why foreign capital floods into the
U.S.--because wages and benefits are so low. Keeping wages and
as low as possible is a key part of U.S. capital's strategy to attract
foreign capital.

Yet this is not the only factor. No less key is U.S. military might.
Capitalists like to avoid risk. They feel there is no safer haven for
their capital than the land which aims to rule the world through
military prowess.

It is here, far more than on the issue of oil, that we can locate the
economic basis of the U.S. drive for permanent war. Permanent
militarization projects an all-powerful image which acts as a magnet  to
attract foreign capital. Unlike the Gulf War of 1991, foreign capital
has not agreed to DIRECTLY pay for today's Iraq war. However, foreign
capital is footing much of the bill through a more circuitous route.
U.S. deficits place added pressure on foreign capitalists to invest
their surplus dollars in U.S. treasury bonds, thereby transferring  much
of war's cost to countries overseas--including those which opposed the

Militarization is a function of state power. The anti-globalization
movement has focused on attacking "free trade" and "neoliberalism"
because they allow multinational corporations to buy up the assets of
formerly-public enterprises. But the movement tends to overlook the
that global capital obtains the dollars needed to buy up such
newly-privatized assets through the acts of STATE powers, the U.S.
especially. By directing surplus capital to the U.S. through its
government deficits (induced largely by its military expenditures),  the
state plays a key role in enabling U.S.-based multinationals to buy up
the world's economic assets.

As Michael Hudson writes, "What is novel about the new state
form of imperialism is that it is the state itself that is siphoning
economic surpluses....What turns this financial key-currency
into a veritable super imperialism is that the privilege of running
deficits belongs to one nation alone."(5)

Yet does this "super imperialism" which fuses industrial, financial  and
military interests provide the U.S. with "stability"? Hardly! Military
production is inherently wasteful, as the surplus value soaked up by  it
does not lead to real growth. As Dunayevskaya wrote in PHILOSOPHY AND
REVOLUTION (p. 234), "Militarization of the economy, gargantuan as it
has become in a nuclear world, further intensifies the general

The U.S. drive for permanent war may help it fund its massive deficits
by tapping the resources of foreign capitalists, but that hasn't
it to overcome the problem it has openly faced since the mid-70s--the
decline in the rate of profit.

From 1997 to 2000 the rate of profit in the U.S. non-financial sector
fell by 20%. In the past five years the profit rate in corporate
manufacturing has fallen 42%. That the rate of profit has fallen even
productivity has risen confirms Marx's argument that "The rate of
does not fall because labor becomes less productive, but because it
becomes more productive."(6)

Marx's point was that capitalism is not only about the production of
material wealth, but also about the production of value. The magnitude
of value is determined by the amount of socially necessary labor time
that it takes to produce commodities. There is always a contradiction
between producing for material wealth and producing for value. As
productivity rises, more goods are produced in the same unit of time,
and so the value of each commodity falls. The increase in material
wealth corresponds with a decline in the magnitude of value. Costs of
production fall and prices (and profits) tend to fall as a result.

In response, capitalists try to boost productivity, since the greater
the output, the easier it is to realize the value of their investment.
Productivity is generally increased by introducing labor saving
The resulting growth in productivity, however, reproduces the problem,
since the growth in material wealth leads to a further decrease in the
value of each commodity. Capitalism is based on a treadmill effect, in
which the system is driven toward constant technological innovation at
the expense of living labor to resolve a problem that only gets
reproduced on an ever-higher level.

In sum, though the U.S. rules the world economy, its dominance rests  on
shaky foundations. It may try to turn its debtor status into an asset
borrowing all this foreign capital, but that still puts it deeper into
debt, and debts eventually have to be repaid.

So how can the U.S. still claim to rule the roost? It's due not just  to
economics. It's also due to the failure of the revolutions of the past
century to create a new society and the refusal of much of today's  Left
to support genuine struggles for freedom and democracy. This has
the U.S. to appropriate the fruits of popular struggles against
for its own false purposes. There are many examples of this, such as
way the U.S. has coopted the Kurdish leadership in Iraq.

Yet we must not overstate U.S. strength even on this level. For the
and miscalculations that have characterized the U.S. war in Iraq,  along
with the deteriorating economy at home, is leading to growing anger
against the system by workers and youth around the U.S.--including by
many who are in the military. We can't speak to this growing ferment
unless we project a comprehensive alternative to the present system.
It's a task which defines the reason for being of an organization like
News and Letters Committees.


1. See "Draft for Marxist-Humanist Perspectives, 2003-2004: War,
Resistance, and the Need for a New Alternative," NEWS & LETTERS, July

2. "War and Peace," THE RAYA DUNAYEVSKAYA COLLECTION, no. 2789.

3. "The Internal Situation in the Fourth International" [May 1951],  THE

4. "America wins the prize with a supermarket sweep," by Robert
FINANCIAL TIMES [London], August 20, 2003.

5. SUPER IMPERIALISM, by Michael Hudson (London: Pluto Press, 2002),  p.

6. Marx's CAPITAL, Vol. III (New York: Vintage, 1981), p. 347.
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