This issue has been actively debated in academic left, e.g. the following exchange between Harvey and Smith. David Harvey denies modern imperialism means the flow of surplus from ex-colonies to imperial powers and cites the rise of China to make his point. Smith denies it and offers counterarguments and relevant data.
This debate is really not needed if one simply invokes the law of inertia: if imperialism was an initial state (say 50 years ago) then we have to first uncover forces that might have upstaged it. If one fails to find these countervailing forces then imperialism must have continued but it might have metamorphosed into other forms.
What could these new modes of exploitation of ex-colonies be? As an example given by Smith, the current flow of surplus is in the form of unrecorded financial flows which are large and negative for developing countries including India and China. Another mode is portfolio investment by Western countries. In 2008, an Indian academic showed, using partial data, that India loses a greater fraction of its GDP through portfolio investment by Western companies than it did in colonial times (Chandra, 2008, EPW, April 5, p39; how it works exactly will be covered in another article). Or both recorded and unrecorded financial flows are negative for India and indeed for a majority of developing countries.
If one invokes the law of inertia this is precisely what would be expected. Nationalist movements against Western imperialism were far more accommodating to imperial interest than to aspiration of their working people. These movements, often led by elite sections of the society, saw imperial powers as less of a threat than its own working classes. For instance, Indian nationalists openly collaborated with imperial powers to crush independent working class movements, e.g. Meerut trial in 1930s. Indian industrialization was driven by Bombay Plan of major industrialists of India; the plan included both investment by government to develop major infrastructure and then handing it over to private sector at some stage. (Indian political ruling elite haven’t forgotten the promise they made then and are trying to privatize public assets at breakneck speed.) Export houses, the bastion of comprador capitalism, were left untouched.
That this plan of ‘post-colonial development’ had the approval of imperial powers is a given. Imperial powers continued to play an important (and often decisive role) in post-colonial economies because the development model of these countries was based on the import of capital, industrial goods (especially machine tools), and technology from Western countries. India’s case also underlines how smooth transition is made from colonial to post-colonial stage without countering the main interests of imperial powers.
Others resisted with greater vigour and sought a break from the domination of imperial countries. They suffered and paid a price. China is a case in point. It lost over 10 million people in second world war, mostly fighting Japanese imperialism. It fought a civil war after 1945 with one side openly supported by the US. It lost a few hundred thousand soldiers fighting the US during the Korea war between 1950 and 1953. And when it faced famine-like situation in late 1950s, it had no one to fall back to, not even its fellow communists in USSR. So when China re-joined the capitalist world order in late 1970s it was news.
Harvey’s narrative fails to recognize this essential dynamics of post-colonization world. Instead of focussing on global power relations to understand imperialism (e.g. number of US military bases, number of countries its military and special forces operate in, which is close to 120 according the US military, its financial might as articulated through multilateral institutions such as IMF, etc) he chooses to focus on apolitical exposition of global economic changes:
“So, on the basis of what is happening on the ground, I prefer to work with a theory of uneven geographical development, proliferating and differentiating divisions of labour, an understanding of global commodity chains and spatial fixes, of place production (urbanization in particular – a vital topic of which John Smith is oblivious) and the construction and destruction of regional economies within which a certain ‘structural coherence’ (or ‘regional value regime’) might form for a time, until powerful forces of devaluation and of accumulation through dispossession set in motion the forces of creative destruction. These forces affect not only what is happening in the global South but also in the deindustrializing North.”
The paragraph is not unique but representative of such writings (e.g. see the article linked above or other writings of people such as Harvey). First, it sums up Harvey’s (and much of academic left) theory of imperialism. It is predicated on apolitical global forces, e.g. uneven geographical development, forces of devaluation, or creative destruction and such like.
It is worthwhile to compare such views with those of Smith.
The facts are simple: in the current phase of so-called globalization, the exploitation of labour in developing countries has dramatically increased. Smith advocates the introduction of a new category ‘super-exploitation’ in Marxian framework to differentiate between ‘value-added’ to ‘value-captured’. Western corporations ‘capture’ value rather than ‘add’ it. While a good is produced in China/India, most of its value is realized (sales and taxes, etc) in Western countries. This adds to the GDP of western countries while most of the labour to produce it, which added value, was applied in developing countries. Smith calls it ‘GDP illusion’, underlining the obvious fact that a fraction of GDP of western countries is just value captured from super-exploitation of labour in developing countries. This ‘capture’ is in addition to the outflow of surplus from developing countries through financial means. (It is an interesting fact that communist countries computed GDP using only the production data, e.g. for details see Baran, The political economy of growth).
Add to this narrative the sharp rise in military operations of Western powers across the world (according to Nick Turse, who has some access to US military, the US special forces are active in over 120 countries across the world) and the conclusion one would reach is exactly the opposite Harvey holds.
Harvey gives two further facts to support his view: the rise of China and the fall of well-paid labour in Western countries. On the face of it these facts have nothing to do with Western imperialism, but their relevance could be analysed.
First, China’s rise underlines the the changing ways of Western imperialism, as Smith’s and many similar articles argue. The pattern is familiar: Chinese elite destroyed rather than support sustainable agriculture in China. They also destroyed a majority of public industry. This created a suitable pool of reasonably trained manpower to be exploited by global private industry. This created a small number of billionaires in China who control everything including public opinion through media. In addition, an upwardly mobile middle class has risen which has benefited from this process. This phase of globalization also allows Chinese to invest across the world with its trade surpluses and strengthen its security apparatus to perpetuate this state of affairs. But it creates even bigger largess for Western and Japanese corporations. Even if this creates a situation that pits Western powers against China, made stronger by the policies of the very same powers, this doesn’t mean Western powers have weakened. Nor have they been forced to alter their policies of global plunder.
Harvey contends that the current stage of globalization has destroyed ‘labour aristocracy’ in imperial countries, which is evidently true. But to conflate this argument with the weakening of Western imperialism would suggest that this section is somehow responsible for imperial policies which is clearly false. He overlooks the fact that working class movements in Europe often criticized imperial policies if only for the fact that it weakens them vis-a-vis their own ruling elite. ‘Imperial plunder allows England to control and exploit working classes at home’, William Cobbett, a British MP, wrote nearly two hundred years ago. Much later Keynes realized that the imperial policies of England were directly detrimental to its working classes, e.g. monetary controls. That imperial elite make concessions to ruling elite of dominated countries at the cost of their own working classes is an established fact of colonization, which remains true even today.
The main pillars of imperialism have been and remain: resource control, financial domination, and military hegemony, at a global scale (how they operate across the world at present will be covered in a later article). These factors have worked with varying degrees through history. While colonization is no longer a viable option of imperial plunder at the present, other subtler forms of surplus extraction have replaced them.