The voting in the US presidential elections this time was 68%, an all-time record.  Still the difference of votes between president Trump and his opponent, Biden of Democratic Party is very thin, surprising almost all pollsters, showing the sharp polarization in US society. As a result, while Biden is moving closer to White House, refusing to accept defeat Trump is moving the Supreme Court. Trump had said it earlier, at the peak of the election campaign also, that even if he loses the election, he will not hand over power. It was a clear declaration that he shall try to subvert the election results to cling to power. Like any other fascist he is claiming that US wants him. His opponent is incapable of serving US imperialism as he can!. But 120 years of US presidential elections disprove his claims. Whoever wins, the candidate of the Republican Party or of Democratic Party, he has to pursue the US imperialist agenda of indulging in any barbarous acts or conspiracy to establish world hegemony of the US. Only difference between the two is that when Trump shouts and commit crimes against humanity in fascist way, Biden who was vice-president under Obama, a loyal, administration man, will do the same things as Trump in a bourgeois democratic way. It is because of this difference, not for Biden having even any reformist policies like Sanders, generally all progressive forces desire victory for him.

According to the reports about the election majority will be very little. As it is not the number of votes, but the electoral colleges each wins from the states where they get majority that counts, the majority may be razor thin. It means that in spite of the fascist policies of Trump, even after so many in the US itself, including the black people hate him, even after the opinion polls showed he was the most unpopular president, how and why Trump got more votes this time than in 2016 elections, like Modi could increase his majority in last year’s elections compared to that of 2014,  or Bolsonaro could win in spite of a better track record of the Workers’ Party in Brazil? This calls for serious analysis.


To understand this phenomenon, two important things call for serious study. Firstly, after the setbacks to the socialist forces starting with the capitalist roaders usurping power in Soviet Union, the imperialist think tanks campaigned aggressively that it is “end of socialism” and beginning of the “era of clash of civilizations” from the 1970s. Under this banner in the name of fighting Islamophobia, along with political Islam, which they themselves had promoted and armed, all other religious fundamentalists also were promoted. Secondly,  based on post-modernist counter revolutionary philosophy, the identity politics was promoted in every field, dividing and sub-dividing the toiling masses and oppressed sections based on caste, sub-caste, race, tribalism, gender, etc, systematically destroying the unity and strength of the proletarian forces and their unity with the oppressed masses, which alone can overthrow the rule of imperialist system and its junior partners. These imperialist moves got support from the former communist parties who have degenerated to social democratic positions advocating “there is no alternative” to neo-liberal policies, and abandoning proletarian internationalism both in theory and practice.  Still, if Trump gets defeated it is a positive thing, because it will at least weaken the powerful wind of neo-fascism sweeping across the world. But the revolutionary forces should not have any illusion. They have to intensify their theoretical offensive against all alien ideological positions and revolutionary struggles, along with uniting the working class more urgently and politically than ever, and focus on party building to overthrow the imperialists and their junior partners, and to march forward to people’s democracy and socialism.


KN Ramachandran

General Secretary

CPI(ML) Red Star


New Delhi

4th November 2020

What is the picture of the environment on this world environment day? A strange question to ask? Yes, it may sound strange, but the reality compels us to ask this question with all seriousness. On this World Environment Day, whole world is in the ever tightening grip of the novel corona virus, Covid19. Already 70 lakhs of patients and nearly four lakhs dead.  Still lakhs more are getting infected and thousands are dying everyday. But, the imperialists and their junior partners ruling the world  have abandoned these, and the vast masses who are becoming its victims increasingly, and have started business as usual, plundering the labour and nature more voraciously to amass more profits. They laugh at you if you say your plunder has led to Covid like pandemics, Amphan like calamities, it poses  threat of ecological catastrophe.


So, there are only two possibilities before the humankind today: either let the capitalist imperialist system to continue their plunder, lead to ecological catastrophe and to the extinction of human species on this earth; or the toiling and all oppressed masses and concerned scientists and intelligentsia join hands, create public opinion, overthrow the reactionary ruling system and create a new society where democracy shall blossom and an alternate people oriented development perspective shall be put in to practice protecting what is left of the nature, establishing friendly relation between nature and humans.


Which path we ar going to select? Of extinction of humankind, or the path of struggle for a socialist new world? Let this be the central question of discussion on this World Environment Day!

Development and Transformation of

Capitalism into Imperialism

The process by which capitalism based on private ownership of the means of production became established through what is called primitive accumulation by Marx spanned a long period from the end of the fifteenth to the middle of the nineteenth century. It was composed of both internal and external plunder using the crudest forms of force and coercion. In every country that experienced capitalist development, domestically it was paralleled by a concentration of property in the form of land and assets in the hands of a wealthy few and the forcible expropriation of the broad masses driving them to proletarians who have nothing to sell except their labour power. The external form of this primitive accumulation which was very crucial in capitalist development according to Marx was colonial plunder including colonial trade and slave trade. In its classical form, on account of a host of historical factors, this capitalist development first took place in Britain.

 The period until mid-eighteenth century reflected the supremacy of commercial capital which was achieved through well-defined colonial policies pursued by the rising capitalist powers, especially Britain. The predatory mercantilist practices comprising the capture of export markets and slave trade established under monopoly economic conditions and political domination through wars and control of the seas provided the context for Industrial Revolution.

 The period from the second half of the eighteenth century to the 1870s witnessed the rise of industrial capital in Europe, especially in Britain. Industrial capitalism was built up through the exploitation of workers within capitalist countries and through the influx of raw-materials and resources from the intensified plunder of colonies and other countries. Unlike mercantile capitalism whose interest was mainly in ‘colonial products’ such as spices and slaves, the demands of industrial capitalism broadened out to include raw-materials for expanding industries and food for  the rapidly growing population. Including these the pressures of capital accumulation propelled a disruption of the socioeconomic formation in the colonies. The colonies had to supply the required raw-materials by surrendering for commercial or plantation agriculture and mining on the one hand, and create for the finished goods from industrial centres on the other. The results were a distortion of  the traditional village communities, changes in land relations including the introduction of private property in land, enforced monetization and exchange relations, imposition of  bonded labour and wage labour, destruction of handicrafts and domestic industries, building up of necessary legal and political structures including the creation of elite classes subservient to colonial masters and the imposition of metropolitan cultures. Here it should be emphasized that capitalism as a social order was born, developed, and flourished as a world system from the very beginning. The necessity to utilize the resources and peoples of other nations was inherent in capitalism. The whole course of capitalist development is influenced by this inherent tendency.

Emergence of Finance Capital

 Marx and Engels studied capitalism that belonged to the era of free competition or what is called competitive capitalism. However, by the last quarter of the nineteenth century and at the turn of the twentieth century, fundamental changes took place in the political economy of capitalism. Continuing the works of Marx and Engels, Lenin who made an exhaustive analysis of these changes further developed the Marxist theory of capitalism as a guide to the revolutionary struggle of the proletariat, and termed the new phenomenon as imperialism.  According to Lenin, free enterprise capitalism reached its apex by the 1870s. At the end of the nineteenth century and beginning of the twentieth, the transition from pre-monopoly capitalism to monopoly capitalism or imperialism was completed. Lenin’s already well-known definition of imperialism incorporating its essential five features is thus:-            

  “1) the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life; 2) the merging of bank  capital with industrial capital   and the creation,  on the basis  of this “finance capital” of a financial oligarchy; 3) the export of capital as distinguished from the export of commodities acquires exceptional importance; 4) the formation of international monopolist capitalist combines which share the world among themselves; and  5) territorial division of the whole world among the biggest capitalist powers is completed. Imperialism is capitalism at that stage of development in which dominance of monopolies and finance capital has established itself; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun; in which the division of all territories of the globe among the biggest capitalist powers has been completed.”

All these features are only different forms of the basic characteristic of imperialism - the domination of monopolies. Therefore, imperialism is monopoly capitalism. This transition from competitive capitalism to monopoly capitalism or imperialism was prepared by the whole course of development of the productive forces and production relations of capitalism.

The major scientific and technical discoveries and inventions that took place by the second half of the nineteenth and early twentieth century significantly speeded up the process of concentration of production in different lines of industry. The advances in production techniques gave rise to structural changes in industry so that light industries, following organic changes in the composition of capital, gave way to heavy industry. The new productive forces necessitated large-scale production. The introduction of new means of production called for larger amounts of capital than even the biggest capitalists had at their disposal. To be successful, the capitalists had to use other people’s capital on credit. This led to the development of joint-stock form of company ownership by which a few capitalists could control and manipulate the hard-earned income and savings of the vast majority of working people in the country. Thus the operation of the law of concentration of production led to a small number of big and very big undertakings coming to occupy dominant position in each line of production in every developed capitalist country.

As enterprises became larger, competition became fiercer and more complex. The enormous costs involved in competition between major capitalists, the loss of profit, the risk of ruin and difficulty in marketing pushed the big capitalists into agreements and alliances. Cartels, syndicates, trusts, and groups became the forms of monopoly associations for buying raw materials and other inputs of production, to set monopoly prices, and extracting monopoly super-profits. According to Lenin, imperialism is a dialectical unity of two opposites; monopoly and competition. Monopolies dominate the economy, but far from eliminating competition, they make it fiercer and more complex and alter its form. Monopolies also develop and spread in other spheres of the operation of capital. The concentration of production in industry initiated similar processes in the banking sphere. Large industrial, commercial, railway and other undertakings were unable to invest their free resources in small banks, since the authorized capital of the latter was not sufficient to guarantee the safety of large deposits, and small banks did not have adequate resources to grant credit to large undertakings. The position of the big banks in the economy, therefore, strengthened while that of small banks weakened. Thus the concentration and centralization of banking had led by the end of the nineteenth century to the same result as in industry. At the same time, industrial monopolies were not content to remain as passive partners of giant banks. They also became the co-owners of the banks, which was made simpler by the banks becoming joint-stock enterprises. Many major industrial monopolies set up their own banks and established personal links with the monopolist banks in which they were most interested, introducing their own directors on to the supervisory councils and boards of these banks. The result was a close interweaving of bank and industrial capital.

Thus coalescence or interweaving of the capital of major banking monopolies with that of industrial monopolies led to the emergence of what Lenin called “finance capital”. In essence, it is monopoly industrial capital merging with monopoly banking capital. With the formation of finance capital, a financial oligarchy also emerged in imperialist states. Composed of a small group of financial magnates that dominates the economic and political life of imperialist states this financial oligarchy began to control the home and foreign policy of them. The financial oligarchy grows in strength through their expanding connections with the state apparatus and its numerous organs dealing with home and foreign affairs.

Imperialism is the universal system of the domination of finance capital and the export of capital is one of the ways in which it exercises this domination. Of course, export of capital from one country to another had been there in the pre-monopoly stage of the development of capitalism, but it began to play a role of paramount importance in international economic relations only under imperialism. To quote Lenin: “Typical of the old capitalism when free competition had undivided sway, was the export of goods. Typical of the latest stage of capitalism when monopolies rule, is the export of capital.” Lenin viewed the export of capital in relation to the general laws governing the development of capitalism into imperialism.

 Usually, the fields into which capital is exported are rather government-guaranteed loans for various kinds of public works, railroads, public utilities, exploitation of natural resources and trade. The activities and spheres to which capital is exported are such that they do not compete with commodity exports from the capital-exporting imperialist country. Capital export therefore leads to a very one-sided or lop-sided ‘development’ of the economies of backward countries. Though if at all a native bourgeoisie emerges, being tied in several ways to the imperialist bourgeoisie it is incapable of developing native industries on account of formidable obstacles. At the same time, the destruction of handicraft industry by cheap manufactured imports from imperialist countries drives a larger proportion of native population on to the land. The interests of broad masses of people are sacrificed to the needs of capital in imperialist countries. In brief, under monopoly capitalism the right conditions had been established for export of capital and all-round financial exploitation of the people of the world by a handful of imperialist states and their monopolies.

According to Lenin, this trend inevitably moves to the formation of international monopolies or super monopolies. The export of capital and the expansion of the foreign economic links and spheres of colonial influence of the biggest national monopolies, resulting in the internationalization of capital and economic relations, played a vast role in laying the foundations of the development of international monopolies. The first international monopolies had developed in the most highly concentrated branches of production in the 1860s to 1870s, but they became a typical feature of capitalism only at the turn of the century. Based on available figures, Lenin penetratingly analyzed their rise and showed that their formation and economic division of the world, was one of the most important features of imperialism. He noted 40 such international monopolies in 1897 whose number rose to roughly 100 in 1910. The outcome of the domination of these international monopolies is stagnation and decay. Monopolies cut production, limit trade and keep important scientific inventions and discoveries secret. The international unions of monopolists, Lenin said, actively push the governments of imperialist countries into military conflicts. Immediate post-world war I history has proved this evaluations of Lenin as correct when the international alliances of monopolies collaborated in putting Germany’s arms industry back on its feet thereby helping the ascendancy of fascism leading to World War II.

Imperialism and Colonies

Under imperialism, the issue of colonies has taken on a totally different significance from that under pre-monopoly capitalism. Colonies as subject territories existed long before imperialism. The colonial empires of imperial powers began to take shape as early as the fifteenth and sixteenth centuries. But according to Lenin, colonial policy of capitalist imperialism under the domination of finance capital is qualitatively different compared with that of previous epochs. The fundamental change in colonial policy under imperialism was that the territorial division of the world was completed in this period, and a struggle for its re-division began, and also that the role of colonies had altered significantly compared with the days of pre-monopoly capitalism.

The territorial division of the world by the imperialist powers completed the formation of the colonial system of imperialism which meant the sum total of the relations by which millions of people in colonies, semi-colonies and dependent countries were exploited and enslaved by a handful of imperialist states and monopolies arising there-from. Says Lenin: “Colonial possession alone gives the monopolies complete guarantee against all contingencies in the struggle against competitors, including the case of the adversary wanting to be protected by a law establishing a state monopoly.”

Transitional Forms of Colonial Relations

According to Lenin, colonialism or the colonisation process is not a static one. It is not only uneven, but also composed of several transitional forms. To quote him: “Since we are speaking of colonial policy in the epoch of capitalist imperialism, it must be observed that finance capital and its corresponding foreign policy, which reduces itself to the struggle of the Great powers for the economic and political division of the world, gives rise to a number of transitional forms of state dependence. Typical of this epoch is not only the two main groups of countries: those owning colonies, and colonies themselves but also the diverse forms of dependent countries which, officially, are politically independent, but in fact, are enmeshed in the net of financial and diplomatic dependence.”

Explaining the various transitional forms under colonization and depending on the extent of economic and political domination of imperialism on Afro-Asian-Latin American countries under colonization, Lenin characterized semi-colony as a transitional form or middle stage in the process. This transitional nature of colonial relations has been part of the Marxist-Leninist understanding of the colonial system of imperialism. Taking the case of China which was not wholly colonized by imperialist powers, Mao Tsetung has also noted this aspect very strikingly. In fact, colonies, semi-colonies and dependent countries as transitional forms were not the only domination of finance capital under the colonial system of imperialism. Lenin had pointed out the case of Portugal, which though an erstwhile colonial power and a seemingly independent country presented a different relationship under colonialism. This type of complex, uneven and multidimensional relationships prevailed during the colonial period can be seen in the post World War II neocolonial phase too depending on the degree of neocolonisation to which countries are subjected.

Whatever be the forms of colonial dependence, the colonial system of imperialism served finance capital by providing markets for commodities, of acting as sources of raw materials, ensuring areas for the investment of capital, extending non-economic sources of revenue and making available theaters of military and strategic operations and as sources of recruits and reinforcements. Formation of world capitalist economy and the development of world market that started during pre-monopoly capitalism have led to more and more countries being drawn into its orbit leading to an internationalisation of capitalist relations. The superimposition of this internationalisation of capital on colonies, semi-colonies and dependent countries undermined their economic self-sufficiency and established imperialist dominance over them.

According to Lenin, imperialism is a system of international economic relations and ties resulting in exploitation and enslavement of the peoples of colonies and dependent countries by a handful of powerful capitalist states; the domination of finance capital in all spheres of social and economic life; competitive struggle between monopoly bourgeoisie of various imperialist countries for domination over world economy; and struggle between imperialist states for re-division of the world. In brief, to the already existing antagonistic conditions of capitalist mode of production, imperialism added the specific contradictions of the world capitalism, namely, the contradiction between imperialism and oppressed nations and peoples and between imperialist states that exploit the peoples of colonial countries.

Emergence of USA as the Leading Imperialist Power and its Practice of Informal Colonialism

The transition from industrial capitalism to imperialism where finance capital dominates was also marked by the decline in the preeminence of Britain and the emergence of USA as the leading imperialist power, whose national economy was the world’s largest by the 1870s. The concentration and centralization of production and the growth of finance capital that marked the transformation of US as leading imperialist power took rapid strides since then. But the trajectory of US imperialist expansion was different compared with European imperialist powers. That is, American finance capital preferred a policy of informal or indirect colonialism in Latin America, in the Pacific and elsewhere in the absence of apparent territorial control. World War I waged for a re-division of  the colonial possessions while led to a reshuffle of imperialist world economy, immensely strengthened  the relative position of American finance capital vis-à-vis other imperialist powers and during the war itself America had become the leading world creditor and this financial power was interwoven with its growing political and military power. After October Revolution, American imperialism took the initiative to lead the anti-Bolshevik forces to recover the lost space, combat the rise of socialism and prevent the spread of revolutionary fervor to the capitalist world.

After World War I America was on a speculative boom while the rest of the capitalist world was in a recession. The counter part of this American boom was the growing deficit and debt burdens of European countries with inadequate reserves. As their debt burdens became heavier and ‘capital flight’ worsened, several of them suspended debt repayment to America, ushering in the worst-ever crisis in imperialist history. And by the late 1920s, led by US, the world entered into an unprecedented stagnation and depression, popularly called Great Economic Depression.

This world economic crisis that began in 1929 as the worst and most destructive in the history of capitalism for the first time exposed its vulnerability as a socio-economic system. It shook the very foundation of imperialist system itself. No part of the world where imperialist finance capital had penetrated could escape from the Depression. No nation, except Soviet Union escaped. Originated as an American phenomenon, the shock of this general collapse spread from imperialist centres to colonial regions.

No doubt, the source of this stagnation, idle capacity and unemployment, though inherent in capitalism in all stages of its developments, has become intense in the imperialist stage on account of the enormous power of monopolies to control wages and prices in their favour. Apart from the exploitation of working people at the level of production, the social consuming power of the toiling masses is further reduced through monopoly practices in the sphere of circulation, leading to greater concentration of income and wealth in the hands of the super-rich.

The ultimate cause of the crisis is this rigging of the whole system in favour of the financial oligarchs at the expense of the broad masses. At the political level, the Great Depression gave rise to economic nationalism and protectionism and encouragement to national chauvinism and fascist movements such as German Nazism, Italian Fascism, Austrian Fatherland Front, Rumanian Iron Guard, etc.

Advent of Keynesianism and Emergence of State Monopoly Capitalism

The Depression exposed not only the vulnerability of imperialist economic foundations but its ideological bankruptcy too. Keynesianism as a variant of bourgeois economics in its imperialist epoch evolved as a response to this. Keynesianism rejected the orthodoxy of laissez-faire economics and questioned the assertion held by bourgeois economists that unemployment and stagnation are temporary aberrations. Keynes vehemently attacked this view that upheld capitalism’s ability to adjust itself. According to Keynes, the laissez-faire mechanism was incapable to generate adequate “effective demand” and eliminate unemployment by itself. He was extremely concerned with excessive unemployment which might lead to social upheavals and revolution. Therefore, he suggested increase in both private and government investments as the decisive means of increasing the general level of employment. Instead of increasing the production of mass consumption goods, Keynes’ preference was for investments in heavy industry, especially arms production. In actual practice, what occurred was an attempt to stimulate the imperialist economy through militarization using Keynesian prescriptions. But the expansion of armaments industry advocated by Keynes could have been carried out only at the expense of the working people and curtailment of civilian production leading to a further lowering of consumption, growth of unemployment and deepening of economic crises. More precisely, arms production and militarization withdraw enormous material and labour from social production. As Marx said, military production and the maintenance of armed forces ultimately represent non-productive waste of part of the social product. The practical application of Keynesianism which called for a redefinition of the role of the capitalist state in the economy was the New Deal in America.

This was the background that led to the strengthening of what Lenin called state monopoly capitalism. According to Lenin, state monopoly capitalism combines the strength of monopolies and that of the imperialist state into a single mechanism whose purpose is to enrich the financial oligarchy, suppress the working class and toiling masses and launch aggressive wars to maintain the capitalist – imperialist system. Developments during World War I, the inter-war period, Great Economic Depression and World War II strengthened state monopoly capitalism further. The advent of Keynesianism and the emergence of Keynesian “welfare state” with its enlarged economic and social functions culminating in the repudiation of laissez-faire capitalism both at the theoretical and policy level found the culmination of this process. State monopoly capitalism has also become a convenient basis of fascism during the inter-war period. The expanding economic functions of the state and the centralization of capital which are characteristics of monopoly capitalism also favour the growth of fascism taking advantage of the social contradictions arising from stagnation and unemployment. The German fascists, for instance, called themselves as “national socialists” or Nazis.

‘Decolonisation’ and the transition to Neo-colonialism

In spite of the massive deficit financed injections to the economy by the New Deal, America was on the verge of another recession by 1938. It was World War II that infused a new lease of life to the stagnant American imperialism which gained the most from the war at the lowest cost. Though US formally entered the war only in 1941, the American economy had already become a war oriented one by the merger of the New Deal with the war efforts. American continent being not a war-scene during World War II, it was convenient for US to become the biggest supplier of not only arms, ammunitions and war materials but also food, agricultural and industrial goods to the war- torn international economy. While World War II ravaged the economies of all imperialist powers, for USA alone it provided an excellent opportunity to make effective utilization of resources and recover from a decade of depression.  As already noted, during the first three years of World War II, even when it was not directly involved in war, production and export of agricultural and industrial products and weapons of mass destruction displayed manifold increase.  And even after the direct US involvement in the war, its war-damages were the minimum as there was no fighting on American territory.  As a result of these factors, the relative economic strength of USA grew substantially during the war.  When World War II came to a close, the US accounted for almost half of the GDP of the capitalist world and about three quarters of the gold reserves of the world also moved into that country.

Even after becoming the de-facto leader of the imperialist world at the end of World War I, rather than territorial extension, the US emphasis was on the expansion of finance capital through economic penetration and prevention of the contraction of the imperialist system consequent on the formation of the socialist system outside capital’s orbit.  Colonies, semi colonies and dependent countries being already adapted to the requirements of finance capital and the resources and markets of backward countries being intertwined with imperialist centres, what required was a continuation of their economic and financial dependency on the latter.  At the same time, October Revolution and the formation of Soviet Union that inspired all the colonial and oppressed peoples was a threatening factor for the classical type of colonialism.  That was why US imperialism, which could perfect the strategy of global plunder through finance capital and international monopolies without having direct territorial control over the colonial world, put forward a plan of continuing colonialism in a camouflaged manner.  In fact, for years the US ruling classes had been practicing this policy throughout Latin America which was considered as its backyard.  A more or less similar policy was applied in the case of Philippines on the pattern of Latin America. As such, even much before the formal entry in to World War II in December 1941, US imperialism had devised a project of Pax-Americana replacing Pax-Britannica, envisaging the complete blueprint of the required political, economic and military ingredients for the postwar world. It was based on this blueprint that both USA and Britain, the rising and eclipsing global hegemons respectively jointly released what is called the Atlantic Charter or Atlantic Treaty  in August 1941. Atlantic Charter signified the new and expanded role of US as the organizer and leader of the world imperialist system.  It also implied the main task of US as the defender of imperialism through achieving greater unity among capitalist-imperialist powers under its leadership.  Only the US had the capacity to lead the imperialist system on account of its mature economic and military strength on the one hand, and the damage inflicted on rivals by the war on the other.

Thus Atlantic Charter by drawing the basic guidelines for the formal withdrawal of European powers from their erstwhile colonies—a process called decolonisation by bourgeois media—laid down the foundation for more intensified penetration of finance capital through neocolonisation.  Under neocolonialism, while finance capital’s world domination and control over sources and raw materials, market for goods and spheres for export of capital continued unabated,  the particular forms in which this domination works have become adapted to new conditions. The background of the evolution of these appropriate forms had already been laid down by US whose emergence as the leading imperialist country coincided with the transformation of capitalism into imperialism. And during the decades preceding World Ward II, US could perfect the strategy of world plunder through international monopolies without having direct territorial control over the colonial world. Meanwhile, the October Revolution and the formation of Soviet Union, as already noted, that inspired socialist and national liberation movements was a threatening factor for the classical type of colonialism. This necessitated the continuation of colonialism in a camouflaged manner and the outcome has been a new phase of imperialism called neo-colonialism led by USA after World War II.   

This process was the outcome of the maturing of the specific features associated with US domination in the colonial period and its practice of informal colonialism, especially in Latin America that had prepared the setting for a major push forward in extending the hegemony of finance capital to the whole of Asia and Africa.  In the process, formal political power was transferred to the comprador ruling classes in erstwhile colonies who were born and brought up under the fostering care of imperialist finance capital during the colonial period.  The United States with its immense military and resource power, and to a lesser extent other powers too, took special interest in extending military and financial “aid” to these comprador ruling classes often backed up by direct and indirect interference in their internal affairs.  On the whole, the post World War II phase of imperialism envisaged further penetration and intensified plunder of erstwhile colonial countries by imperialist finance capital. However, as manifested through the dissolution of the Comintern in 1943 and the failure to correctly grasp the epoch-making developments then, the International Communist Movement failed to acknowledge the gravity of this transformation of colonialism to neocolonialism.  The attempt to rectify this mistake by forming the Cominform in 1947, was short lived as Khrushchev dissolved it in 1956. Meanwhile, as the hegemonic power of capitalist-imperialist system the US took the initiative in devising the required international institutions and arrangements capable of undertaking the economic, political, military and cultural tasks of finance capital in the postwar neocolonial phase.  The roots of this transformation lay deep in the colonial phase itself where the ascendancy of finance capital shifted power from captains of industry to financial giants, with US as the leading imperialist power despite not practicing ‘direct colonialism’.

Institutions and Methods of Neo-colonialism

America took the initiative for establishing a whole set of economic, political, military, cultural and intellectual institutions and arrangements as indispensable tools of neocolonisation.  Under neocolonialism, in which economic, political and military spheres are inter-penetrating, and complex, the role of finance and financial institutions are of paramount importance. Therefore, in 1944 itself, when it was very clear that the Allied Powers were going to win the war, the US in alliance with UK convened an international conference at Bretton Woods, New Hampshire attended by 44 countries and established the Bretton Woods international monetary and development institutions namely, the International Monetary Fund (IMF) and the World Bank with American veto power for directing the Afro-Asian-Latin American countries along the neocolonial track. Both  IMF and World Bank, the so-called  Bretton Woods Sisters have been characterised as the economic arms of US in the neocolonial order. As active propagators of market ideology, both IMF and World Bank have always stood for the close integration of imperialist economy and free movement of finance capital. The US which was never prepared to subject itself to the disciplines of any international body in its entire history, took the initiative to establish the Bretton Woods institutions with the intention of shaping the post-war neocolonial economic order in its favour. An essential component of the Bretton Woods agreement was the acceptance of  US dollar as the international currency for the postwar neocolonial order. To have an international trading system free from protectionism and restrictive trade policies, an agreement was reached to form the General Agreement on Tariffs and Trade (GATT) in 1948 to move towards a regime of liberalized trade through negotiations. It came out to be called the “rich men’s club” as it fully served the trade interests of imperialist powers.

The Bretton Woods system with dollar as the vehicle currency and America as world’s banker immensely facilitated the export of finance capital by America and provided US financial monopolies an unparalleled opportunity to extend their neocolonial plunder. As the issuing country of dollar, US could print any amount of dollars and purchase goods and services or export capital to any part of the world. With dollars, the American monopolies could purchase those goods which it wanted and brought up the most profitable enterprises and established control over scarce natural resources including oil in neocolonial countries. The huge expenditures required for financing the Marshall Plan, neocolonial aid programs such as that under PL 480 and military adventures such as Vietnam war were also financed out of the printing of dollar. As long as the rest of the world including governments, central banks, and financial institutions are willing to accept dollar as international money and governments are willing to keep their reserves in dollars, the printing of dollars could continue unabated.

  Parallel to the Bretton Woods system in the economic sphere, at the political level, as envisaged in the Atlantic Charter, in the place of the defunct League of Nations, the United Nations System incorporating numerous neocolonial provisions was established. It was the United Nations Conference on International Organisation held in 1945 at San Francisco representing 50 countries that the United Nations Charter was drawn up. By June 26, 1945, the Charter was signed by 50 countries including Soviet Union. In course of time, the UN, its Specialized Agencies, Functional and Regional Commissions became effective weapons in the neocolonisation process. The heads or CEOs of the various UN umbrella organizations, institutions, commissions and agencies from the very beginning were either experts recruited from imperialist countries themselves or are faithful compradors from neocolonial countries trained in imperialist institutions and schools, especially that of USA. More often the UN agencies and institutions had to function as cover organizations for American neocolonial penetration.

Neo-colonialism is in no way less militaristic than colonialism. As elucidated in the Truman Doctrine, the main thrust of American militarization in the neocolonial phase has been the “containment “ of Soviet Union and socialist countries through close alliance with other imperialist powers and through control over comprador regimes in neocolonial countries. The establishment of the Central Intelligence Agency by the National Security Act of 1947 under Truman as the “formulator, implementer and manipulator of US foreign policy” has been also a part of this neocolonial offensive by US imperialism. The signing of the North Atlantic Treaty Organization (NATO) on April 4, 1949 with its headquarters at Brussels, Belgium  along with the signing of SEATO and CENTO and the establishment world wide military bases were aimed at warding off the communist threat to finance capital.  The replacement of Pax Britannica by Pax Americana was marked by a dramatic expansion in US military presence across the globe.  For instance, in the 1920s, in spite of being the leading economic power, US armed forces were stationed in only three countries abroad.  During World War II 39 countries had US military presence.  By the mid-sixties American armed forces could be seen in 64 countries. Official statistics put a four-fold growth in imperialist militarization in the neocolonial period relative to the colonial era within a span of a quarter century. This militarization including the greater sophistication of weaponry and growing share of military spending in the federal budget are all inseparably linked with the emergence of “military – industrial complex”, in close integration with financial oligarchs and MNCs.

MNCs are the highest form of internationalization of finance capital and the main economic bastion of neocolonialism. The transformation of ‘international monopolies’ of the colonial period into MNCs in the post-war period is to be analysed with respect to the changed conditions of capital expansion in the neocolonial phase of imperialism. ‘Decolonization’ and territorial withdrawal from colonies coupled with the contraction of the imperialist sphere on account of national liberation movements and advance of socialism in the immediate post World War II period along with narrow national markets in imperialist countries have prompted finance capital to devise new methods for intensified export of capital and goods on an international scale. The new wave of scientific and technical revolution and its application in production, machine goods, transportation and communication immensely facilitated the development of MNCs. During World War II and after, this technological revolution necessitated a concentration of capital on an unprecedented scale. This led to an enormous productive capacity in each line of production which required new markets for sale and realization of profits. In the place of the erstwhile international monopolies which functioned based on the monopoly in any one imperialist country, extensive chains of production and sale including the establishment of banks at a global level were indispensable for this. The formation of MNCs and their international operations thus served as the institutional arrangements for minimizing cost and maximizing profit by finance capital even in the absence of direct control over colonies. No doubt, the seeds of this change were already sown along with the transformation of capitalism into imperialism when the spectacular concentration of economic power in giant corporations and financial institutions and consequent internationalization of capital had taken place, especially in USA. And with the replacement of other imperialist powers by the US after World War II, this logically led to the rapid spread first of US monopolies as MNCs at a global level. The power of MNCs and their role as the main pillar of neocolonialism must also be understood in relation to the overall political, economic and military conditions created by US led imperialism in the neocolonial phase. For, MNCs are a product of imperialism in the era of state monopoly capitalism. Along with the close integration of MNCs with imperialist states, they are also flourishing in close inter-relationship with the international state monopoly institutions and arrangements perfected by US led imperialism  as essential tools of neocolonisation. At the outset itself, global operations of MNCs were facilitated by and intertwined with all the neocolonial institutions and arrangements such as the IMF, World Bank, GATT, Marshall Plan, various “aid” programs, international agreements on raw materials and minerals, economic conferences, military programs espionage agencies such as CIA, “regional” banks such as Inter-American Development Bank, African Development Bank, Asian Development Bank, trade agreements, regional economic blocs, UN institutions, funding agencies, international NGO networks and so on. Along with the integration with imperialist states, MNCs’ association with comprador regimes and neocolonial financial institutions has facilitated the global spread of imperialist capital. Mainly two forms of capital export, namely, portfolio investments and foreign direct investments (FDI) are pursued by the MNCs. Portfolio investments consist of capital exports in the form of holding of transferable shares, securities or debentures by MNCs, where while ownership of capital remains with the capital exporter, in principle control and management are said to be with the “host country”. Generally, foreign direct investment (FDI) has been the attractive route for the global expansion of MNCs. Usually, FDI assumes different forms: i) Formation of a concern in the host country in which the MNCs has a majority share. ii) Establishment of a company in the capital importing country that is fully financed and owned by MNCs.    iii) Creation of a subsidiary of MNCs in foreign countries.  iv) The setting up of an autonomous corporation in host countries by MNCs     v) The creation of fixed assets in the capital importing country by MNCs. Whichever forms this capital export assume, these concerns come under the centralized management and control of MNCs and transnational banks located in imperialist countries.

Neo-colonialism in Practice

During the quarter century immediately following World War II, on account of the presence of socialism and national liberation movements, US led imperialism had to pursue  the neocolonial plunder under the camouflage of international Keynesianism. During this period, even while the global expansion of capital and its multi-dimensional penetration into neocolonial countries had been strengthening, the slogans of import substitution, state led development, public sector, welfare state were profusely used to hoodwink the masses.  Keynesianism provided the umbrella for the accumulation of significant share of wealth in the state treasury through progressive taxation and deficit financing and the setting up of essential infrastructures for the smooth and risk-free functioning of corporate capital. An impression of “crisis-free capitalism” was also created prompting imperialist theoreticians to characterize this period as the “golden age” of capitalism. Meanwhile, for the penetration of finance capital into neocolonial agriculture, led by the World Bank, USAID, and Rockefeller-Ford foundations propped comprador regimes in neocolonial countries to pursue Green Revolution which enabled agribusiness MNCs to completely monopolize the input-output markets for agriculture. In the place of the erstwhile feudal classes who served as the social base of imperialism in the colonial period, through Green Revolution imperialism took particular attention to build up a comprador agricultural bourgeois class imbibed with the ideology and technology of commercial agriculture in Asian-African –Latin American countries as a firm ally in neocolonial plunder. The consequent restructuring of land relations including the abolition of feudal relations led to a further concentration of land in new landlord classes on the one hand, and unprecedented landlessness and pauperization of the peasantry, the real tillers of the soil on the other.

However, the Keynesian medicine applied in the specific international context conditioned by a whole set of factors, though created an apparent golden age for about a quarter century, could not overcome the inherent logic of finance capital which, as identified by Lenin, is stagnation and speculative parasitism. The unhindered printing and pumping of dollar and the consequent financial expansion and speculative tendencies which are inherent in the neocolonial phase have led to new problems. In the initial years of postwar boom, this financial expansion was accompanied by increase in production, but later the financial growth began to overtake that of output growth leading to what is called stagflation-stagnation in production and abundance of money supply or inflation. In other words, the Keynesian medicine of inflationary financing of chronic stagnation that began in the 1930s with the New Deal has broken out in the 1970s as another incurable crisis resulting in the abandonment of Keynesianism itself. The abolition of dollar convertibility into gold and the collapse of Bretton Woods monetary system based on dollar was an essential component of this imperialist crisis.

 This necessitated a change in the neocolonial accumulation process since the seventies. The constraints of Keynesian state intervention had been a hindrance to the accumulation of wealth through unfettered financial speculation. Taking advantage of the ideological setbacks suffered by the working class at the international level, starting with Thatcherism and Reaganomics, imperialist finance capital undertook a major restructuring program since the 1980s called neoliberalism or monetarism. The essential components of this neoliberal accumulation process are: 1. A deindustrialization process or the destruction of  several areas of manufacturing industry and a neo-conservative attack on the working class leading to unprecedented unemployment and underemployment which has come to be characterized as “jobless growth.” 2. A new international division of labour called post-Fordism or flexible specialization that made use of the new developments in transportation, communication, information and processing technologies enabling MNCs to reap superprofits by involving the cheapest source of  labour through outsourcing thereby abysmally reducing wage rates. 3. The development of financial methods and instruments as new avenues of speculative finance. In brief, under neoliberalism, the driving force of accumulation has shifted from the sphere of production to the sphere of financial speculation.

 Neoliberalism or monetarism has been a further strengthening of neocolonial plunder through the processes of financial deregulation, fiscal retrenchment, trade liberalization and privatization by which the erstwhile developmental role of the state has been transformed into that of a facilitator. Downsizing and rollback of the state and departure from Keynesianism on the one hand, and usurpation of neoliberalism and unfettered cross border speculative financial flows on the other are facilitated by the penetrating role played by the synchronized operations of IMF and World Bank and the advent of a new international organization called World Trade Organisation as the neoliberal pillar of neocolonialism on the other. Neocolonial countries were asked to skip over the period of protectionist policies of import substitution and pursue a policy of export orientation by throwing open their economies for free trade and uninterrupted flows of speculative finance capital. A whole set of free trade zones, export processing zones, especial economic zones with preferential tax, tariff, labour, and environmental exemptions and extra-territorial powers to corporate capital have come into being. The extension of the principle of cross-conditionality practiced by IMF and World Bank to WTO and their synchronized operations prying open everything encompassing agriculture, industry and service sectors of neocolonial countries have enabled imperialism to the total subjugation of whatever left of sovereignty in them to the dictates of finance capital.

Crisis of Neo-colonialism

Today, under neoliberalism, the neocolonial accumulation process has become a terribly destructive force in the world economy.  During the Keynesian period, while financial expansion had moved more or less in tandem with production and employment, under imperialist globalization there emerged a clear dichotomy between the financial and the real economy and financial expansion started gearing itself for self-expansion through unhindered speculation. While earlier financial expansion was feeding on a productive economy, today it is a global speculative bubble thriving on a stagnant economy and the sphere of finance tends to dominate over the productive sectors of the economy including agriculture and industry.  The immediate roots of the explosive growth of finance can be traced to the deregulation of the entire financial system based on the free-market ideology of monetarism that replaced Keynesianism since the 1970s.  The desire on the part of finance capitalists who control the production of goods and services to deregulate financial markets is prompted by the declining profit rate in the real economy, which is inherent in capitalist production relations. On account of the antagonistic conditions of distribution, the consuming or purchasing power of the masses at the given level of prices is not sufficient enough to guarantee the rate of profit satisfactory to the capitalists. Therefore, the MNCs and corporate giants who control the means of production have little interests to expand the production of mass consumption goods.  Doing so would be contrary to the logic or rationality of capitalism. The easiest way on the part of capitalism which is guided by the pursuit of highest returns within the shortest time to overcome this hurdle is to invest in financial assets.  However, there is a limit to the profit that can be made from the traditional type of financial activity including commercial banking that goes hand in hand with the productive economy. The deregulation of the financial system and the invention of new financial devices and instruments to carry on the neocolonial accumulation in an intensified manner become relevant here. It comprised a reorganization and restructuring of both the spheres of production including casualisation of workforce and circulation such that accumulation of wealth was increasingly separated from the creation of value. This speeded up the process of financialisation such that the bubble economy of finance has become several times larger than the real economy of production, with major implications for the stability of the whole imperialist system. However, this process of casualisation of workers and  toiling masses and pauperizing them on the one hand, and financialisation and enrichment of the financial oligarchs on the other cannot continue smoothly on account of the inherent contradictions of the capitalist imperialist system,. This is reflected in the irreversible crisis confronting the neocolonial world order today.

The massive transfer of public funds for boosting up the asset position of the speculative giants who themselves are responsible for the crisis has other ramifications. It aggravates the already worsened fiscal position of the state and further increases public debt. Thus huge debt accumulation becomes a justification for the biggest-ever slash in state spending on social and welfare services in tune with the diktats of “fiscal fundamentalism” imposed by IMF and World Bank and other neocolonial agencies, and severe assaults on the living conditions of workers and oppressed peoples. Consequently, as already noticed, the purchasing power and consumption levels of the broad masses of people are going down, while the most unproductive, conspicuous consumption by the parasitic financial oligarchy grows leaps and bounds. At a global level all these have enforced a redistribution of wealth and income from the neocolonial countries to the imperialist powers and from the poor and the oppressed to the rich and the oppressors in general. The implications of this crisis engineered by finance capital are manifold including unprecedented price rise arising from the subjection of everything to speculation, corruption which is directly associated with the decay and parasitism associated with speculative finance capital, hitherto unknown levels of unemployment and underemployment, horrific ecological crisis which is directly linked with neoliberal accumulation, and so on.

India a Typical Neo-colonial Country

During the colonial period, British imperialism had brought up the comprador big bourgeoisie, the comprador bureaucratic bourgeoisie and feudal forces as its faithful allies. Being born and brought up under the protective umbrella and fostering care of British finance capital in its decadent stage, these forces had been faithfully serving imperialism in a comprador capacity. Historically incapable of developing into an independent class, the Indian big bourgeoisie preferred to evolve as a sub-exploiter under the umbrella of the ‘managing agency system’ devised by British finance capitalists. In spite of the relative flexibility exhibited by British imperialism toward the development of Indian industry in the post World War I period, except in certain consumer goods like textiles and sugar, in general, the Indian big bourgeoisie was reluctant to enter capital goods industries. As a result, the uneven and lopsided industrial structure continued without much change. Even in the consumer goods sector, the dependence on imperialist capital and technology was conspicuous, and the Indian big bourgeoisie was satisfied with its role as a junior partner of imperialism. In course of time, emulating the British managing agency system, leading Indian business houses also set up their own managing agencies which were more inclined to speculation in the shares of companies and gambling activities. By the time of  global decolonization led by US imperialism in the forties, the alliance among the comprador bourgeoisie, comprador bureaucratic bourgeoisie and feudal forces strengthened and developed to the level of exerting pressure on the British colonial masters to have a share in the Indian plunder appropriated by them. In the background of the ‘decolonisation’ process, in 1944, the leading figures of Indian big bourgeoisie had evolved a future guide line for India’s development entitled “A Plan of Economic Development of India”, popularly known as Bombay Plan or Tata-Birla plan. It envisaged to convince the colonial masters  the possibility of a government within the framework of colonial rue for the successful implementation of the program of economic development based on Keynesian  prescriptions.

While the transfer of power to Indian ruling classes by British imperialism had been the outcome of a well-thought out neocolonial strategy for continuing imperialist plunder in new form, rather than making any serious evaluation of it, the June 1947 Resolution of the Central Committee of CPI came to the hasty characterization of the Mountbatten Plan as an opening up of “new opportunities for national advance”. Subsequently, it was based on the Cominform Resolution of September 1947 that in December 1947 the CPI took the position that “the Mountbatten agreement was an abject surrender and a final capitulation on the part of the Indian leadership”. It characterized the government that formed as one of “collaborators” and in the state thus emerged, it was the “imperialist feudal-bourgeois combine” that held power. This position was later endorsed in the Political Thesis adopted by the Second Congress of CPI held in 1948. The Party Program formulated under the guidance of Stalin and adopted by the CPI in 1951 reflected these positions. It was with the advent of Khruschevian revisionism that a turn around took place, following which in the Fourth Congress of CPI held in 1956 the unscientific formulation of “political independence of India” was recognized. With the strengthening of revisionism in Soviet Union and the further rightist deviation of the CPI and later the CPI (M), this opportunist and ahistorical approach to  power transfer  got further stabilized, and even leading Soviet indologists had become ardent supporters of the “Nehru’s non-capitalist line.”

Two centuries of colonial rule had transformed India in to a classical colony which acted as a source of raw materials, a market for finished goods and a destination of capital export by imperialist powers. However, this does not mean to say that the entire social formation or the ‘mode of production’ was in an ossified or rigid pattern. As a result of the long years of colonial and imperialist onslaughts, the whole structure of the economy after deviating from its natural course of development was becoming distorted by imposed conditions. While feudalism continued as the dominant mode of production in the country-side, the increasing integration of the country with imperialist market, though prevented an independent capitalist development of the classical pattern, could substantially alter the feudal mode of localized production and localized appropriation. Rapid strides in commodity production in consonance with the requirements of both export-oriented and domestic market oriented cash crop agriculture started altering the feudal and semi-feudal mode of production in the country-side. Its striking ramification was the entry of capitalist relations in agriculture and the massive displacement of poor peasants that swelled the ranks of landless poor peasantry including agricultural workers as the largest section of rural population. To be precise, while the long drawn out process of colonisation transformed into neocolonisation in the 1940s, like the other colonial, semicolonial and dependent countries, India also became a neo-colonial country.

After brutally suppressing the Telengana peasant struggle and ruling out any fundamental change in land relations based on land-to-the-tiller principle,  the Nehru government resorted to certain cosmetic changes in land relations such as zamindari abolition on the one hand  and used the services of American Agricultural Mission, Ford Foundation’s Community Development Program, and Bhoodan Movement.   Zamindari abolition acts enabled the parasitic sections including zamindars to shed their role as ‘intermediaries’ between the peasants and the State and become land owners with permanent and heritable rights in land paving the way for the emergence of  a new and dominant class of agricultural bourgeoisie who acted as the social base for launching  the neocolonial agrarian strategy of Green Revolution since the 1960s.  The Nehruvian model of development was the Indian version of international Keynesianism. The historical context that prompted comprador Indian ruling classes to adhere to the Nehruvian strategy of ‘state led development’ till the neoliberal period was the same that compelled US led imperialism to resort to a policy of Keynesian welfare state till the 1970s. Under the cover of ‘import-substitution industrialization’ and public sector that created an apparent posture of ‘self-reliance’, it was possible and inevitable for foreign capital to penetrate the high tariff walls and protection created in the name of the so called ‘inward looking industrialization’. In all respects, the Nehruvian model was fully within the framework of the neocolonial strategy of Keynesian state-led, import-substitution policies enforced at a global level.

Meanwhile, the policy of “economic aid” and the various arrangements associated with it enabled US imperialism through the Bretton Woods institutions to penetrate in to the core of Indian economic policy making and directly influence plan priorities. It also gave US imperialism a definite score over Soviet Union in the Cold War in establishing its firm foothold in strategic sectors of India. Various militant struggles including the Naxalbari peasant uprising that appeared in the late 1960s  compelled Indira Gandhi to revamp the Nehruvian populist mask once again even while abjectly surrendering to imperialism. The rhetoric on the need for reformist land reforms including issues like the security of tenure but wholly excluding the fundamental question of ‘land to the tiller’, became frequent during this period. To hoodwink the masses the government of Indira Gandhi also resorted to a series of much trumpeted legislations including her slogan of ‘garibi hatao’ to cover up the blemish arising from rupee devaluation, dilution of 1956 Industrial Policy and above all opening up of agriculture to the penetration of imperialist finance capital through green revolution.  As a result, laws pertaining to the abolition of Privy Purses to the erstwhile feudal kings, nationalization of banks (1969), Monopolies and Restrictive Trade Practices (MRTP) Act, Patent Act (1970) and Foreign Exchange Regulation Act (FERA) 1973, came into the statute books.  Ironically, as an objective evaluation of the period shows, imperialism’s neocolonisation of India was much faster during and after these legislations.  After the fascistic and ultra reactionary days of Internal Emergency, while coming again to power in 1980, Indira Gandhi not only reversed all her earlier populist postures but also led the country to the IMF tutelage accepting all the structural adjustment conditionalities demanded by IMF in return for a huge External Fund Facility loan in 1981.

With the advent of Rajiv Gandhi in mid-eighties and the proclamation of ‘New Economic Policy’ in 1986 heralded the final abandonment of concepts like ‘self-reliance’ and import substitution to be replaced by the catchwords of ‘export promotion’, “modernization”, etc. With an eye on India’s flourishing middle class market, utilizing the liberal industrial policy of Rajiv Gandhi, MNCs rushed to the production of a whole range of durable consumer goods which prompted several academic economists, and comprador intellectuals to characterize the 1980s as a ‘decade of industrial development’. In accordance with the nature of export-oriented, consumer durable production during the eighties the increasing foreign investment was leading to repetitive imports of obsolete foreign technology by Indian subsidiaries and affiliates of MNCs at a heavy cost to India. These capital and technology imports were not designed to serve the socio-economic priorities such as employment generation and increase in the real incomes of the people. As a result of these inflows of foreign capital, in addition to the usual out-payments in the form of loyalty, know how fee, managerial expenses dividend, profit, etc. harmful transfer pricing practices associated with obsolete technology became a major form of neocolonial plunder during this period.Under the extremely liberalized profit repatriation facilities available in the eighties, MNCs could take out their entire amount of capital investment through profits within a short span of one to one-and-a-half years. The American MNCs could repatriate the whole amount invested within a year as the average ratio of profits to paid-up capital towards the second half of the eighties was hovering around 100 percent. A notable feature of the 1980s at the international level, a trend that strengthened since then has been the decline in the share of “official aid” and growth in commercial borrowings, the repayment of which is ensured by IMF and World Bank conditionalities. This shift was perfectly in tune with the demise of Keynesianism and rollback of the state on the one hand, and the ascendancy of neoliberalism with its concomitant deregulation of international finance and its free mobility across countries on the other. As a result, the comprador Indian regime also went in for massive commercial borrowings from transnational banks and various other foreign exchange sources at exorbitantly high interest rates, leading to the debt crisis of the late 1980s.

The domestic repercussions of this intensified neocolonial plunder in the eighties were a further deepening of the socio-economic crisis that the country had been facing.  The so called ‘industrial growth’ in the eighties was confined to the consumer boom industries and it has nothing to do with the substantial area of manufacturing sector. On the other hand, this period witnessed an unprecedented growth in the number of the so called ‘sick industrial units’ in India, which was the outcome of a deliberate policy of ‘deindustrialization’ involving low capacity utilization in the existing industries. In the guise export-oriented industrialization, several areas of traditional industries and manufacturing were neglected. As the same time, highly capital intensive and labour-saving repetitive collaboration agreements with MNCs resulting in all pervasive automation and computerization that spread to railways, banks and factories led to retrenchments along with “golden handshakes” as regular phenomena in the eighties. During the eighties, except the north western region of the country including Haryana, Punjab and Western Uttar Pradesh, food grain production and agricultural productivity actually went down.  Studies made by concerned economists have shown how official figures depicting high growth rates for certain states in the eighties were just a “statistical illusion”. The new agricultural technologies resulted in concentration of land and income in a wealthy minority of labour hiring rich peasant class while the majority of the lowest rung failed to reach even poverty level income.

In the beginning of 1990s when the balance of payments problem became acute on account of accelerated flight of foreign exchange from India engineered by currency speculators, the IMF and World Bank directly intervened in India by superimposing Manmohan Singh who pioneered Rajiv Gandhi’s New Economic Policy in 1986 as the finance minister and the architect of imperialist globalization the essence of which is to ensure maximum profit for speculative finance capital that freely moves across countries. Two decades of this neoliberal program have brought about a basic alteration in economic policy—change in the role of the state from that of an initiator of economic activities to a facilitator of corporate capital and speculative market forces in every sphere of the economy encompassing agriculture, industry and services. The details of this process including its harmful repercussions are already well-known and are being widely discussed.

Marxist-Leninist Approach to Neo-colonialism

 When imperialism led by USA was initiating the neo-colonization process which according to the CPC was a more “pernicious and sinister” form of colonialism, the then International Communist Movement failed to make a concrete evaluation of this epoch-making transformation in the 1940s. The Comintern was dissolved in June 1943. The Cominform formed in 1947 as a political response to Truman’s neocolonial machinations such as the Marshall Plan though organized powerful resistance against the Anglo-American imperialism’s gamble for  a “new world order” as the primary task of communist parties. But with the ascendancy of Khrushchovian revisionism camouflaging the intensified penetration of finance capital and white washing neocolonialism there was an attempt to portray colonialism as a thing of the past. Later, in the early sixties, it was as part of the ideological struggle initiated by the CPC led by Mao Zedong against Khrushchovian revisionism, the emphasis was given to the heinous neocolonial plunder of Afro-Asian-Latin American countries by imperialists led by USA. However, in spite of its inspiring formulation on neocolonialism, with the advent of left sectarianism, this understanding on neocolonialism could not be carried forward.  Several M-L parties influenced by sectarianism also refused to use neo-colonialism as a historical category. Though several scholars have put forward varying interpretations ranging from dependency theory and various postmodern approaches to mode of production theories, the core of Lenin’s theorization on the evolution of finance capital and its inseparable link with the internationalization of capital are missing in them. In this context neocolonialism is to be understood as the very process of capital accumulation in the post World War II period. It is the concentration of power of finance capital in its mutually interpenetrating economic, political, military, and cultural forms.  In this context, a concrete evaluation of the neocolonial phase of imperialism based on Leninist positions and the development of Marxist theory further is indispensable for the revolutionary advance of the proletariat and oppressed peoples of the world. n

Minimum Essential Reading

1)           Marx and Engels, Manifesto of the Communist Party

2)           Marx, Capital, Vol.1, 2 and 3

3)           Marx, A Contribution to the Critique of Political Economy

4)           Marx and Engels, On Colonialism (Collection of Articles written during 1850 and 1888)

5)           Lenin, Imperialism, the Highest Stage of Capitalism

6)           Stalin, Leninism

7)           Great Debate

8)           Selected Works of Mao Zedong, Vol.1, 3 and 5

9)           The Marxist-Leninist (Various Issues)

10)         Geoffrey Pilling, The Crisis of Keynesian Economics: A Marxist View

11)         M Sweezy, Modern Capitalism and Other Essays

12)         Samir Amin, Capitalism in the Age of Globalisation

13)         P J James, Imperialism in the Neocolonial PhasePJ James

The Communist movement in India has a history of almost a century after the salvos of October Revolution in Russia brought Marxism-Leninism to the people of India who were engaged in the national liberation struggle against the British colonialists. It is a complex and chequered history.