Official Website of Communist Party of India, Marxist - Leninist (ML) Redstar

When Modi.2 was ascending to power, we wrote in the beginning of June, 2019: “Then the outcome is an extra-ordinary galloping of financial speculation led by the most corrupt corporate class under whom the so called development itself is transformed in to a by-product of money-spinning businesses throughout. Modi’s second coming implies a further opening up of the floodgates of ultra-rightist, neoliberal corporatisation subjecting the working classes and all oppressed to the domination of the most degenerated financial class in every sphere.  Its outcome shall be unprecedented wealth concentration in the hands of the most corrupt tiny financial elite and intensified pauperisation and loss of purchasing power for the vast majority.” (“India’s Impending Crisis”, Red Star, June 2019). Now within three months of Modi.2, India is in that horrific situation. Today, even the saffron-corporate media which till now have been indulging in propaganda blitzkrieg on Indian economy’s concocted fastest growth under Modi are now forced to recognise it as in deep recession. As such, contrary to the hollow claims of 8 percent GDP growth claimed by official agencies at the time of Modi.2’s maiden budget in the beginning of July, the growth rate has now plummeted to just half of what they claimed a few months back.

As is widely conceived now, India is confronting the biggest economic plunge since 1947, even as the saffron leaders continue to boast of making the country a $ 5 trillion economy in 2024. Agriculture and industry are shrinking and unemployment is the biggest in five decades. Exports show the biggest decline in seven decades while external value of the rupee at Rs.72=$1 is the lowest-ever. Consumer market including the much trumpeted fast moving consumer goods (FMCG) sector is in doldrums. Transactions pertaining to real estate, housing, automobiles, and textiles are at their lowest level. But the most critical aspect of the economic downturn as reflected in the inability of the common people even to purchase a five-rupee biscuit packet is just casually mentioned in the mainstream discussion. Under the UPA regime, Arjun Sengupta, the Planning Commission expert had estimated that 83 percent of the Indian people earn only Rs. 20 or less a day. However in view of the prevailing historic slump of Indian economy, the percentage of pauperised population devoid of even Rs.20 per day will definitely have gone up. In fact, the plight of the most deprived including the peasants, the tillers of the soil, and the unorganised or informal working class who constitute the largest chunk of the toiling masses in India are the least discussed in corporate media.

However, the entire mainstream analysis of the economic collapse is from a neoliberal”supply-side” orientation implying that it views the disease affecting the economy from the perspective of corporate investors and the plausible threat to their wealth accumulation. On the other hand, Modi’s far-right analysts are reluctant to approach the downturn starting from an evaluation of the abysmal fall in consumption or consumer demand, which depicts more than 50 percent decline in the first quarter of the financial year 20019-20 compared to that in 2018-19 according to World Bank statistics. Obviously this is due to the unprecedented downfall of people’s real earnings and purchasing powerarising from unparalleled job loss everywhere. Therefore, common sense demands an urgent intervention on the part of govt. to overcome the deep recession in India through picking up mass consumption demand byboosting employment-oriented productive spheres such as agriculture, industry, manufacturing, etc.

On the other hand, the sole purpose of Modi regime’s maiden budget presented on July 5, and the four successive ‘booster’ or ‘stimulus’ packages (or so called mini-budgets, quite unprecedented in the economic history of nations) announced since August 23, has been to channel more and more national wealth and people’s money directly in to the coffers of the most corrupt corporate plunderers who themselves are responsible for the present crisis. Meanwhile, along with the Modi govt. that identifies itself as a ‘facilitator’ of corporatisation, both corporate media and neoliberal ideologues also are cunningly engaged in camouflaging the fact that the present stagnation is corporatisation-induced. It is well-recognised under neoliberalism that the so called investors who have got unfettered freedom and access to all corrupt means in the economy are interested only in speculative and money-spinning activities along with direct appropriation national wealth including natural resources that yield fabulous profits within the shortest time, and that both employment and share of wages in national income are slowing down at an alarming rate.

The soaring corporate profits and wealth accumulation are systematically backed by what are euphemistically characterised ‘ease of doing business’, ‘investor-friendly measures’ etc. encompassing biggest-ever corporate tax exemptions and direct wealth transfers to the super-rich. In India, for instance, this reactionary process under Modi.1 and Modi.2, have led to a situation where more than three-fourths of the national wealth generated is now appropriated by one percent of the top billionaires.  This corporatisation process is also facilitated by continued by a series of fiscal measures pertaining to expenditure-reduction and austerity steps, casualization or informalisation of the workforce and deliberate reduction in real wages and an outright plunder of nature. While these steps result in biggest concentration of wealth in a few billionaires and multi-dimensional poverty for the broad masses they have transformed India as one of the most corrupt countries in the world today. While these trends constitute the essence of the crisis today, the corporate-saffron fascist regime, the co-opted media, and neoliberal intellectuals revealingly keep silence on the concrete Indian situation as experienced by common people.

As is obvious, the successive mini-budgets or booster packages that follow the July 5 General Budget aimed at directchannelling of public money appropriated from the peoplein to the coffers of the corrupt-parasitic billionaires and super-rich classes, cannot in any way resolve the unprecedented economic slowdown.  In accordance with the prevailing neoliberal logic, itunleashes the ‘animal spirits’ (a phrase frequently in use among neoliberal spokespersons today) of the anti-people and reactionary financial class further enabling them to appropriate ever-greater share of country’s shrinking output as manifested in the skyrocketing stock and financial indices thereby leading to hitherto unknown levels of poverty and destitution of the vast majority of working and oppressed people. In other words, the outcomeof all the fiscal and monetary measures implemented in under the guise of alleviating the crisis is an aggressive transfer of national resources to corporate looters imposing heavier burden on the backs of toiling people.

Therefore, every intervention on the part of Modi regime to resolve the crisis is nothing but an intensification of the corporatisation-induced recession with wider and deeper manifestations. In other words, the economic collapse is used as guise for strengthening the neoliberal regime in more vicious forms. No doubt, neoliberal credit rating agencies like Moody’s and neo-colonial institutions led by Fund-Bank combine are also instigating the Modi regime to resort to a further deepening of the far-right economic policies in this regard.

For instance, the latest ‘booster dosage’, the fourth in the series,comprising fabulous corporate tax-exemptions announced on the eve of Modi’s Houston program where he accomplished one of the biggest sell-outs of India to US imperialism, led to a sudden ballooning of the stock market that skyrocketed stock indices by more than 2000 points adding the largest single-day speculative gain worth more than Rs. 6 lakh crore on September 21, 2019. Revealingly, this has nothing to do with increasing productive capacity, employment generation and purchasing power of the common people. Rather, these measures trumpeted as pro-investor measures act as a drag on the job-oriented productive economy.

As such, the crux of the problem today is to politically understand that with every step towards boosting corporate accumulation, not only the economy is collapsing, but the scope of manoeuvrability within neoliberalism is increasingly exhausting. Thus it is clear that any attempt at resolving the crisis is to be sought outside the logic of corporatisation, or rather a reversal of Modigovt’s blind adherence to neoliberalism solely oriented to the ultra-wealthy sections. That implies no short-cut but calls for a political resolution with a program of reversing the far-right policies leading to the oppression of corporate-financial class over the people. So long as that political alternative is delayed, every worsening of the crisis that is inevitable will result in the ruling regime continuing to put far more heavy burdens on the backs of the people in manifold ways on the one hand, and utilising the economic collapse itself as the foundation for corporate-saffron fascism on the other. Along with its divisive, majoritarian Hindutva offensive, fascism in India too, as elsewhere, is the super-imposition of the tyranny of the most reactionary, utterly parasitic super-rich corporate classon the broad masses of toiling people. It is definitely a ‘do or die’ situation before Indian working class and oppressed people and there is no other option except to resist and defeatthis terrorist dictatorship of saffron-corporate capital.

“Fourth Booster” is also Incapable to Revive the Economy : Scope of Manoeuvrability is Fast Depleting

Since the 3 booster packages announced by Modi regime since August 23 aimed at unleashing the “animal spirits” of the corporate looters have done nothing to revive the sinking economy, today, Nirmala Sitharaman, the finance minister has come out with a fourth booster shot to shore up investor sentiments leading to a sky-rocketing of the Sensex by 1650 points increasing the wealth of corporate speculators by around Rs.2. 5Lakh crore, the highest single-day gain in Indian stock market, while these lines are written. Included in this booster shot are a further reduction of the corporate tax rate from 25 percent to 22 percent for existing companies and to 15 percent for new companies, reduction of minimum alternate tax from 18.5 percent to 15 percent, exemption of listed companies from buyback tax, surcharge exemption for speculative (capital) gains made by foreign speculators (FII), etc., that will result in annual revenue loss of Rs.1.45 lakh crore to govt. in addition to the Rs.8.99 lakh crore corporate-tax exemptions announced in the July 5 Budget and a series of direct wealth transfer measures announced in the stimulus packages announced since August 23.

However, according to the logic of corporate wealth accumulation prevailing today, this 4th booster package that is announced as part of mounting crony capitalism—the unholy nexus between the most corrupt corporate capital and the neoliberal state— is not in any way going to reverse the economic downturn. Today India is in a vicious corporatisation-stagnation trap resulting in a total breakdown of the economy. The exponential growth of the parasitic-corrupt corporate class at the expense of employment-oriented genuinely productive activities threatening the very sustenance of the vast majority of toiling people has been the essence of the crisis today. Therefore, boosting up the very same anti-people corporate-financial class through repeated fiscal and liquidity manipulations will not contribute anything in the direction of alleviating the systemic crisis; rather it is oriented towards an aggravation of the economic collapse further. It is also a clear symptom that the space for manoeuvre is fast depleting under neoliberalism.

Further, the injection of lakhs of crores of people’s money in to the coffers of the corporate plunderers who themselves are responsible for the present historic crisis, without doing anything in the direction of reviving the real incomes and purchasing power of the vast majority of people who are subjected to hitherto unknown levels of deprivation and destitution is an outright fascist act too. It is the super-imposition of the tyranny of the most reactionary, utterly parasitic super-rich corporate class integrated with saffron forces on the working class and the oppressed. It is high time.

Where Modi-2 Government is Leading the Economy to ?

After officially acknowledging India’s historic economic downturn in 70 years, on August 23, 2019, finance minister Nirmala Sitharaman has announced a series of initiatives including further abolition of corporate taxes and many wealth transfer schemes to the superrich completely ignoring the unprecedented deprivation and destitution borne by the vast majority of common people. Till now, the govt. spokespersons have been working overtime to depict a rosy picture of the economy even manipulating data with official agencies. However, this ‘window dressing’ got exposed itself when  global credit rating agencies like Moody’s Investors Service and even the Bretton Woods twin (IMF-World Bank) themselves have come forward strongly confirming a well-defined recession in India. It is in this context that, following Niti Aayog vice-chairman Rajiv Kumar’s comment on the threatening financial system and particularly in the midst of Modi’s world tour, finance minister Nirmala Sitharaman has reiterated her govt’s unwavering commitments to corporate capital as announced in the maiden budget along with several fresh corporate-investor friendly measures. 

The package of announcements include a series of tax exemptions and tax rolling backs including withdrawal of capital gains tax and surcharges on corporate speculators— both foreign (FPIs) and domestic— in stock markets, infusion of an additional  Rs. 70000 crore into banks enabling them to lend another Rs. 5 lakh crore to corporate sector, dilution of violations of Corporate Social responsibility as a mere civil offence, pursuance of a soft approach to tax evaders, empowering bank officials to pursue a soft approach to corporate defaulters and so on, all in essence aim at further encouragement  to ‘ease of doing business’ and boosting corporate animal spirits.  

While such a mega booster is imparted to the corporate billionaires and foreign speculative investors for sky-rocketing the stock indices, there is not even a mention on the ground reality of the economy or on the extent of deprivation to which vast majority of the toiling people are subjected. In fact, the whole economy has been shrinking on account of withdrawal of productive investment by both public and private sectors, and as a manifestation, post-GST tax collection itself has gone down by 10 percent. Indian rupee’s biggest ever depreciation is also integral part of the all round economic collapse. And even in the productive sphere that is sustaining, on account of the informalisation and casualization of workforce unleashed by corporate capital in its mad pursuit of super exploitation, the real earnings and purchasing power of the workers are shrinking at an alarming rate, even as unemployment rate is the highest in five decades.  At the same time, under the Modi regime, with more than 80 percent of the national wealth generated being gobbled up by just one percent of the most corrupt corporate class, India has become one of the most unequal countries in the world. 

Meanwhile, under such pro-corporate measures as Demonetisation and GST that while sucking out the life blood of the vast majority depending on cash-based informal and unorganised sectors on the one hand, and fattened the superrich on the other, corruption has grown to such an extent making India the most corrupt country in Asia surpassing Thailand and Pakistan.  While there is no dearth of anti-corruption rhetoric from rooftops, the ultra-right neoliberal policies of the corporate saffron regime has done nothing to unearth the accumulation of vast sums of black money by the ultra-wealthy sections in offshore and domestic tax havens. And a major factor behind the unprecedented liquidity crunch that the economy confronts today is the diversion of funds mobilised from various sources to intricate, tax-evading underhand deals.

Along with this, intensified downsizing and rollback of the state sectors coupled with collapse of industry and agriculture and drastic reduction in social spending have led to absolute reduction in the consuming/purchasing power of the people leading to lack of ‘effective demand’.  Ironically, even while the economy in general is experiencing a downturn and common people are subject to more deprivation, corporate billionaires are successful in shoring up their super-profits.  For obvious reasons, it is well-nigh impossible for Sitharaman even to mention these underlying factors that led to the present economic tsunami in India with its unfolding repercussions in the days ahead. 

The slew of neoliberal-instigated tax-liberalisation and wealth transfer measures intended to further replenish the corporate looters now pursued by the Modi regime that resemble a ‘mini-budget’ are quite reminiscent of the “quantitative easing” and “rescue packages” pursued by the imperialist powers ranging from the US and EU to China following the 2008 global economic meltdown. According to estimates, for instance, immediately after the financial crash, around 25 percent of the GDP of US was channelled in to the coffers of corporate-financiers who themselves were responsible for the crisis. But the crisis is still continuing. The outcome of the booster dose now imparted by Modi.2 is also going to be the same.  

As the global economic downturn following the 2008 financial breakdown is a continuing process, India’s sudden economic collapse under Modi regime, though connected with many external factors, is different in many respects. For, as highlighted by several international and Indian experts, the Indian economy had been ‘relatively immune’ from the global meltdown of 2008 and as can be guessed from several studies such as the recent one by the Economic Research Department of SBI, the Indian economic scenario was relatively better on the eve of Modi’s ascendance to power in 2014.

However, as reported in the media, now apart from manipulation of data, a despicable move also is there to erase such statistics which are unpleasant to the regime from govt websites altogether, even as under Modi.2 alone Indian stock markets have experienced a whopping loss worth of more than Rs. 15 lakh crore within a span of just three months. This bursting of the bubble itself is a symptom of an extreme crisis where even the corporate cronies integrated with the saffron-fascist regime are losing faith in the economy. That is, the extent of the historic collapse of the Indian economy is incomparable with the contemporary situation elsewhere including that in the leading imperialist powers US and China which are engaged in an unprecedented protectionist tariff/trade war. 

Therefore, the ongoing economic collapse is inseparably linked up with the far right shift in economic policies under Modi regime. The root cause of the crisis today is the pan-Indian extension of the Gujarat model of aggressive corporatisation that took away even namesake barriers to corporate plunder. Indian economy today is engulfed in a vicious cycle of corporatisation-stagnation trap. No amount of ‘window dressing’ as that now resorted by the regime can drag the economy out of this crisis which is bound to assume further dimensions.  What requires is a fundamental and immediate reversal of the explosive growth of the most corrupt and parasitic corporate class sucking out wealth from the real economy through manifold ways while remaining at the sphere of speculation. 

And as the crisis intensifies, along with putting heavier and heavier burdens on the shoulders of the people,  all avenues at the disposal of corporate-saffron fascism are  deployed not only against workers and all oppressed including dalits, adivasis, women and minorities, but also on political opponents and dissenters.  Obviously, there is no shortcut, and the only option is a political alternative capable of resisting and defeating this horrific situation. n

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

Imperialism Today - P J James


Like all phenomena, imperialism as a social system is subject to the law of change. As all previous systems, imperialism cannot be static and is constantly evolving taking on newer and newer forms. The classical theory of imperialism including its essential characteristics that Lenin put forward in the early twentieth century in its colonial phase was a guide to political action in that particular historical context. Those essential characteristics of capitalism’s imperialist stage, which were evident at the turn of the twentieth century as identified by Lenin such as the concentration of wealth and the advent of international monopolies, the emergence and domination of finance capital in all aspects of life, imperialist oppression and plunder of dependent and weak nations, widespread militarism, etc. have continued as ever strengthening processes. Obviously, while unraveling the fundamental aspects of capitalism’s qualitatively new stage in his study Imperialism, the Highest Stage of Capitalism Lenin would not have intended it as the final epitaph of imperialism. Quite revealingly, recent researchers have indicated that the original title of Lenin’s pamphlet was Imperialism, the Newest Stage of Capitalism. At present, the universal view that twenty-first century imperialism has assumed several novel forms which require further analysis is not at all surprising from a historical materialist perspective. No doubt, the basic parameters delineated in Lenin’s pioneering work remains the central indispensable key to the understanding of finance capital. It should also be noted that the study by Lenin was in the background of the capitulation of the so called socialist parties under the “revisionist” influence of the Second International at a time when the objective situation, as proved by him in the context of Russia, was ripe for revolution and the transition to a progressive mode of production. Viewed in this perspective, today the challenge before us is to unravel the concrete reality of the twenty-first century imperialism in relation to the historical context of the internationalization capital based on a grasping of the true essence of Lenin’s pioneering analysis.

Today the situation is very complex as, for instance, propositions of a shake of the imperialist structure or what is called a “restructuring” of the imperialist hierarchy inherited from the twentieth century have become topics of discussion among left circles. For, in accordance with the complex dimensions of both accumulation and circulation of capital in this epoch of internationalization of finance capital, ‘export of capital’ identified by Lenin as one of the essential characteristics of imperialism could be seen taking place even from ‘dependent’ and oppressed countries too. This has also prompted some sections of the left camp to interpret this trend as the transformation of several “neo-colonially dependent” countries into “new-imperialist countries.” The qualitatively new developments in relation to the unquantifiable and unmanageable growth in the financial superstructure called “financialization” coupled with what is called “digitization” acting as catalyst for this “restructuring” also marks a clear departure of the present globalized imperialism from twentieth-century imperialism. At another level, the neoliberal restructuring of international production and the pursuit of a new international division of labour since the late 1960s have led to a massive global “disorganization” and “informalization” of the working class. Though spontaneous struggles of the workers and oppressed masses who are deprived of hard-earned democratic rights and who face an abysmal drop in real wages and decline in purchasing powers are sprouting up everywhere, the ideological-political weaknesses of the Left to unravel the current laws of motion of capital and its consequent disarray have provided the ruling classes ample room for manoeuvre to manage the crisis by strengthening the positions of financial markets and deepening the attacks against the people. Backed by far rightwing, neo-fascistic, free-market, postmodern, and reactionary ideologies that have got new respectability under neoliberalism, the level of super-exploitation, financial speculation, ecological destruction and cultural degradation unleashed by corporate capital today is threatening the very sustenance of world people. Thus Lenin’s characterization of imperialism, as “oppressive”, “parasitic”, “decadent” and “militaristic”, integrally linking up it with the subordination of every realm of social life to the diktats of finance capital, is all the more relevant today. To carry forward this perspective according to the concrete conditions of today and for successfully resisting the counterrevolution inflicted by finance capital against workers and oppressed peoples of the world, more clarity on the laws of motion of twenty-first century imperialism is indispensable.

Situating Contemporary Imperialism

Imperialism’s twenty-first century neoliberal trends are not overnight developments; on the contrary, they are to be situated in the entire trajectory of postwar neocolonial phase of imperialism. It was the international context set by socialist advancement and surging national liberation movements of the 1940s that compelled imperialism to resort to what is often called ‘decolonization’--interpreted as the passage from colonialism towards neocolonialism—as a camouflage for ensuring continuity in the global expansion of capital through the process of transferring power to the comprador classes in erstwhile colonies. Thus colonial form of domination and plunder becoming unviable, led by USA, which then had become the leader and supreme arbiter of the imperialist camp, a whole set of mutually interpenetrating political, economic, military, legal and even cultural institutions and instruments were devised for transforming and reconfiguring colonialism into neocolonialism. As is generally conceived, it imparted a qualitative dimension to the unabated global expansion of finance capital. The first coherent Marxist-Leninist formulation on neocolonialism came out from Communist Party China (CPC) led by Mao Zedong as part of its fierce ideological struggle initiated against Krushchevian revisionism soon after the Twentieth Congress of the CPSU when the latter formally theorized on the “disappearance of colonialism.” Pinpointing neocolonialism as an “extremely sharp issue of contemporary world politics” the CPC went on characterizing it as “a more pernicious and sinister form of colonialism.” Though the CPC in its polemics against CPSU correctly interpreted neocolonialism, as we know, due to the subsequent advent of left adventurism that theorized on a “weakened imperialism”, the CPC failed to make any concrete analysis of neocolonialism further. However, an objective evaluation of the post war developments makes it amply clear that the CPC’s original evaluation on neocolonialism was essentially in conformity with reality.

In the meanwhile, as a response to the Great Depression of the 1930s, Keynesianism had emerged with a redefinition of the bourgeois state for its active intervention in economic affairs. For almost a quarter century, Keynesianism coupled with Cold War had been imperialism’s ideological weapon against the “communist threat” in view of the immense prestige that the ICM got due to the inter-war economic progress of Soviet Union on the one hand, and successful resistance against fascism on the other.  Till the 1970s, state intervention  and state programming avoided violent interruptions of financial speculation that yielded what is often called a crisis-free “golden age” for capitalism. Imperialism’s close nexus with the comprador ruling classes in erstwhile colonies or neocolonial countries as its faithful allies also led to the latter’s accelerated integration with globally expanding finance capital.  Meanwhile, Keynesian policies, public sector and other forms of state monopoly capitalism promoted by imperialism to tide over its crisis, however, were misinterpreted by right opportunists and revisionist sections who upheld Krushchevite “peaceful transition to socialism” as automatic move towards planned socialist development. But their ideological bankruptcy was totally exposed when bureaucratic capitalists and erstwhile CEOs of state-owned and public sector undertakings in alliance with illegal financial speculators became proponents of denationalization and deregulation since the crisis of the 1970s.

 Obviously, the apparent capitalist “boom” of the1950s and 1960s was primarily rooted in the political, economic and military hegemony of US imperialism and the flourishing role of dollar in the relative absence of rivalry from other war-torn imperialist powers. During this period, even while pursuing a new balance of power through “cold war” and global expansion and multi-dimensional penetration of finance capital, the postures of UN sponsored Development Decades, welfare state, import substitution, inward looking policies, etc. were effectively used to hoodwink world people.  Imperialist ideologues also advanced the prognosis of “crisis-free capitalism” with state regulation. Meanwhile, from the late 1960s onward, recovery of war-ravaged economies of Europe and Japan began effectively challenging the US even as state-led inflationary financing, high levels of military expenditures and superpower commitments by US reached an unsustainable level.   As a result of unhindered financial expansion associated with international Keynesianism, the US followed by Britain and others, started facing rampant inflation, collapse of industrial production and employment. State financing  that encouraged an increase in production during the initial years of postwar boom, gradually led to an uncontrollable financial growth that overtook output growth leading to a situation that came to be characterized as stagflation—coincidence of economic stagnation and financial boom or inflation.  To be precise,   the speculative trends and deep seated depressive forces associated with finance capital that Lenin emphasized and that became clear in the financial crash of 1929 and Great Depression of 1930s, but regimented and camouflaged through state’s regulatory framework in the initial postwar decades, gathered further strength was got unleashed through stagflation of the 1970s. By this time, immense finance was accumulated in world monetary circulation channels by MNCs and global financial giants, especially emanating from USA including the huge volume of petrodollars amassed by Oil Sheikhs that was deposited in American and European transnational banks. However, this could not be deployed in the most profitable manner as the productive sphere was stagnating on account of the declining purchasing power of the people. To overcome the consequent downturn in profit, the option was to develop new avenues of financial speculation or a change in the accumulation process.

However, unlike the situation in the 1930s, the ideological and political position of the ICM was weak this time as manifested in its inability to develop Marxist-Leninist theory and practice according to the concrete transformation that was taking place in the neocolonial accumulation process. As already noted, it was the presence of socialism and prestige of the ICM that compelled US led imperialism to devise ‘state-led development’ along with decolonization as an ideological-political weapon against the Left following the economic crisis of the 1930s. But taking advantage of the new situation in the 1970s, US led imperialism could successfully resort to a change in the neocolonial accumulation process through a shift in economic policy from Keynesianism to neoliberalism or monetarism. Originating in imperialist countries in the form of Thatcherism and Reaganomics , neoliberal policies gradually spread to neocolonial countries gathering further momentum through globalization in the post Cold War period since the 1990s. The result was a downsizing and rollback of the ‘welfare state’ and abolition of erstwhile restraints on the free mobility of capital. Consequently, the decay and parasitism which are characteristics of finance capital as identified by Lenin have started assuming horrific proportions. Moreover, unlike the earlier phase of imperialism when the speculative bubble was feeding on a productive economy, the financial speculation began to thrive on a stagnant and moribund economy under neoliberalism. The collapse of East Europe and Soviet Union and capitalist restoration in China followed by their eventual integration with imperialist market that created the historical context for the altogether disappearance of the “socialist camp” opened up new avenues for finance capital by way of a further expansion of the world market and internationalization of capital.

The hallmark of this neoliberal phase of neocolonialism has been unfettered international mobility of speculative finance capital that could effectively make use of the breakthroughs in information and communication technologies (ICT) and digitization since the turn of the 21st century. The resulting financial speculation (financialization) together with stagnation and deindustrialization leading to unprecedented joblessness has resulted in hitherto unknown levels of wealth concentration with a tiny financial elite, unprecedented inequality, poverty and deprivation, corruption, cultural degradation, and gruesome ecological catastrophe.  As a reflection of the depth of the crisis, in tune with continuing US and EU aggressions and plunder of workers and oppressed peoples of the world particularly in West Asia and North Africa, the international “refugee crisis” has become unmanageable even as imperialism is propping up anti-immigrant, chauvinist, neo-fascist, racist and religious fundamentalist forces to divert people’s simmering discontent against the ruling system. Obscurantist terrorist outfits such as IS are nothing but the byproducts of this terribly destructive system. As an inalienable component of this imperialist offensive, to depoliticize the people a whole set of postmodern, post-Marxist and “identity” theories including prognoses such as “end of history”, “end of ideology”, etc., are manufactured and spread by imperialist think-tanks and neoliberal funding and research institutions.

 On the Striking Trends of Imperialism Today

From the general background situated above, certain well-defined characteristics of imperialism that make it qualitatively different from its colonial phase are noticeable.

Internationalization of production

The structural foundations of imperialism in the neocolonial phase have fundamentally transformed by a dislocation and restructuring of the erstwhile centralized and nation-centered basis of production. The emergence of new technologies pertaining to production and processing, transportation, information and communication since the 1960s have immensely facilitated this transformation. For instance, the development and refinement of new production and processing technologies capable of decomposing production into multi-stages made it possible for international monopolies or MNCs to transplant different stages of production to remote global destinations using unskilled laboures who could easily be trained to perform even complex operations.  This enabled finance capital to decentralize production and ‘outsourcing’ of work on an international scale thereby rendering industrial location, control and organization of production increasingly less dependent on geographic distances. As against the pre-war so called “Fordist” methods of centralized factory arrangements, the decentralization and fragmentation of workforce prompted monopoly capitalists to devise what is called “post-Fordism”. This “post-Fordist” regulation of workforce also called ‘flexible specialization’ by bourgeois pundits enabled business enterprises to weaken and fragment the collective bargaining power of workers at a global level through a ‘new international division of labour’.  Outsourcing, division and categorization of workers’ unions also went hand in hand  with the availability of wide  variety of consumer products, market diversification, autonomous profit centres and  network systems—a process that came to be characterized as internationalization of production.

Along with the unleashing of an unprecedented deindustrialization and neoliberal regimentation and regulation of labour in imperialist countries, internationalization of production enabled imperialism to tap the cheapest source of labour in neocolonial countries which is forced to sell off itself at the lowest wages. Globalized production facilitated through a whole set of super-imposed, pro-corporate laws pertaining to labour, investment, profit-repatriation, tax, trade and environment in neocolonial regimes altered the conditions of capital accumulation that enabled imperialism to temporarily overcome the crisis of the 1970s. One of the significant changes that has brought about as a result of internationalization and the consequent “de-centered production” has been change of the spatial structure of the world economy in the past half-a-century with regard to capital exports and commodity trade. The most visible trend in this context is the relative deterioration of US and the rise of China as an important location for FDI inflows and as the leading trading country in the world.  This has also given rise to a divergence of economic and military hegemony within imperialism.

Super-exploitation of working class

The internationalization of production leading to large-scale transplantation of “global assembly lines” of production to cheap-labour ‘dependent’ “export platforms” or “export oriented” locations through outsourcing and flexible specialization created an unprecedented growth in unemployment and underemployment in imperialist countries. Together with this, 21st century corporatization-enforced deindustrialization and depeasantization leading to large scale displacement and migration and cross border flow of refugees have resulted in an unprecedented growth in the ranks of unorganized or informal working class as the most “wretched” social class on earth today whose number has already crossed 1000 million the world over- characterized as “informalization” of the workforce. Wiping out vast job opportunities in imperialist countries on the one hand, and  subjecting the remaining workers to “hire and fire” and part-time jobs, (euphemistically called “casualization” of workforce) on the other, have  become the general trend in US and other imperialist countries.  To cover up the class essence of this imperialist restructuring, postmodern theorists have characterized this phenomenon as “post-industrialism.”

But the defining transformation associated with internationalization or “multi-nationalization” of production as manifested in global shift of production to cheap-labour destinations has been super-exploitation of labour (the prevalence of lower than global average wages) and the widening international divergence in wages between imperialist and neocolonial countries, and the consequent large-scale shift of wealth from the latter to the former. In this regard, erstwhile classical Marxist formulation based on nineteenth and early twentieth-century production that the extraction of value from ‘dependent’ countries was of “peripheral” importance needs to be reexamined for further development of the Marxist-Leninist theory of contemporary imperialism. The ever-growing profits of MNCs and wealth of world’s billionaires and relative decline in wages and living standards of workers and masses in ‘dependent’ countries are ample proof of the concrete reality of super-exploitation of neocolonial countries. Today MNCs aim to drive down the share of wages globally and increase their profits by installing a system of global competition among workers as part of the ‘divide and rule’ policy of today’s imperialism. Clarity on this issue is essential to comprehend Lenin’s characterization of the “essence of imperialism” as “the division of nations into oppressor and oppressed” according to the concrete conditions of today.

Internationalization of production is not leading to a global “equalization of wages” eliminating “local obstacles”; on the contrary, so many extra-economic factors are in full swing under the comprador regimes to keep wages much below the ‘value of labor power’ such that pushing down wages in the dependent countries has become the principal form of accumulation and surplus extraction today. In imperialist countries, racism and xenophobia are not meant to completely stop the migration of workers and refugees from poor countries; rather the neo-fascist, anti-immigrant laws are effectively used to ensure migrants' and refugees’ vulnerable, second-class status for pushing down wages further. More often, a major attraction of outsourcing is the length of the working day in backward countries and through outsourcing MNCs use this as an alternative to investment in new technology.  And the predominant form of national oppression in the neocolonial phase of imperialism is the forcing down of the ‘value of labor power’ in low wage countries. This relation of production (capital-labour relation) while plundering the workers of imperialist countries on the one hand, is pushing down the broad masses of working people including youth and women in neocolonial countries into destitution on the other. Most analysts of imperialism dwell on the inter-imperialist rivalry associated with distribution of global wealth while attention is diverted away from the badly needed development of Marxist value theory scientifically analyzing the growing monopoly profits arising from super-exploitation of workers in the globalized production process. That is, the ultimate source of profit lies in globalized production and not in its distribution as is manifested in inter-imperialist contradictions.

The riddle of “export of capital”

The internationalization of production has given rise to a new trend by which both private and state-owned companies from neocolonial countries have started entering into the globalized production stream through cross-border alliances and joint ventures with MNCs. This has prompted some scholars of the Left, as already noted, to interpret such neocolonial countries as “capital exporters” and their transformation as imperialist countries. Here at the outset, it is to be stated that this ‘riddle’ connected with “export of capital” remains only at the level of ‘form’ while the essence is production relations that determine the process of value extraction. Today MNCs can capture surplus value and exploit workers in low-wage countries even without resorting to export of capital, as the sources of funds mobilized by MNCs are from the countries themselves where investments are made. The lack of correlation between FDI inflows and wealth extraction (or profit repatriation) from the oppressed nations as revealed by latest international country-wise data is ample proof of this. At the same time, while MNCs from US, EU, Japan etc. engage in super-exploitation of Latin American, African and Asian workers, there are no reports of Brazilian, South African or Indian bourgeoisie participating in similar expropriation and exploitation of the proletariat in imperialist countries. Of course, the comprador ruling classes of the dependent countries are not the victims of neocolonial oppression and together with the imperialist bourgeoisie they accumulate profit mainly through exploiting the workers and toiling masses of their own countries. However, this is not sufficient for establishing world level domination by the comprador bourgeoisie. Though internationalization of production is a qualitative trend, capital still is continuing to operate within the historical structures of the imperialist order that establishes a line of demarcation between oppressors and oppressed.

It is in this context that the effort to characterize certain “neocolonially dependent countries” as “new imperialist countries” based on the emergence of so called “super monopolies” and growing “capital export” from them needs more explanation. At the outset, it should be stated that this is not a strictly new trend. That is, the accumulation of vast wealth by the big bourgeoisie and consequent development of monopoly in certain Asian, African and Latin American countries are not at all new phenomena, as the same trend had been there during the colonial era itself. For instance, the fabulous financial accumulation and heights of wealth reached by Tata, Birla, etc., the leading Indian monopoly houses during the inter-war period were definitely at par with the international monopolies emanating from imperialist Britain. But unlike the development of capitalism in today’s imperialist powers, the big bourgeoisie from erstwhile colonial and semi-colonial countries have been incapable of leading their respective countries to normal capitalist development.  It is widely recognized that   while the growth of monopolies in imperialist countries was due to the concentration and centralization of capital and production in a particular industry leading to unprecedented increase in the “organic composition of capital,” in today’s neocolonial countries the centralization of capital with the big bourgeoisie has been oriented not to the sphere of production but to circulation. Here, the position taken on the class character of the bourgeoisie in colonial and semi-colonial countries by the 1928 Sixth Congress of the Comintern in its Theses on “The Revolutionary Movement in the Colonies and Semi-colonies” still continues to be a valid proposition.  Based on the concrete evaluation of the betrayal of democratic revolution and anti-imperialist movements particularly in China and India, the Comintern at that time had reached the conclusion that being “comprador” in character the big bourgeoisie in colonial and semi-colonial countries was incapable of leading the anti-imperialist, anti-feudal struggles to victory. Even much before this Comintern evaluation, in 1926, Mao Tsetung had characterized the comprador bourgeoisie as a class that directly served imperialism in many ways and explained how top sections of the comprador bourgeoisie could develop a peculiar form of “monopoly capital” integrally linking with state power.  Far from being an independent capitalist class with a national character, these comprador bourgeoisie being born and brought up under the umbrella of imperialist finance capital in its decadent stage and satisfied with its position as a “sub-exploiter” has been faithfully serving imperialism. In the postwar neocolonial phase of imperialism, in direct proportion to the horrific levels of wealth appropriation by this ruling class, its compradorisation, often in the garb of nationalistic pretensions with the concomitant political ramifications, has been an ever-strengthening process.

Despite this inherent structural weakness of the comprador bourgeoisie, internationalization of production has yielded new opportunities for them to break through the confines of national economy and enter into licensing agreements, joint ventures, mergers and acquisitions with MNCs to operate at a global level. Globalized production and trend towards integration of market have also provided new avenues for greater interlinking between MNCs and dominant fractions of the comprador bourgeoisie from neocolonial countries. Moreover, as exploitation, inequality and poverty are intensifying in imperialist countries too, this interlinking is likely to spread further. But this has not yet yielded any sufficient condition for the transformation of neocolonial countries into imperialist ones.  On the other hand, the new liaison between comprador bourgeoisie and MNCs continues to be an obstacle to self-expanding internal accumulation and national development; it encourages added flight of wealth to imperialist havens leading to domestic distortions and unfeasibility of “inward-looking policies.” This aspect is very relevant in the case of the imperialist-trained technocratic elite and higher bureaucracy in comprador regimes who are more loyal to IMF, World Bank, WTO and similar other neocolonial-neoliberal institutions than towards the national states they represent. Further, imperialist servitude of the ruling regimes in neocolonial countries makes even international or regional groupings and associations of poor countries irrelevant. Thus, the so called association among the ruling classes in both imperialist and neocolonial countries and the consequent intensified loot of the workers and oppressed peoples, rather than leveling out the differences, actually strengthens the historical gap between the two. No doubt, UN and its Security Council, Fund-Bank combine, WTO, various military arrangements and so on which are still controlled by a handful of leading imperialist powers still ensure imperialism’s hegemony over the planet.

Neoliberal role of the state

Internationalization of capital along with the catchwords of privatization and liberalization has also led to the emergence of such prognoses as “non-state capitalism”, “trans-national capitalism”, etc. Of course, the situation today is qualitatively different compared with time when Lenin conceptualized on “state capitalism” defined as the merger of finance capital and state, a process that got strengthened in the imperialist world under international Keynesianism through planning and programming of the economy, growth of public sector, emergence of “military-industrial complexes”, etc. that continued till the “stagflation” of 1970s. However, the neoconservative-neoliberal redefinition of the state reversing the erstwhile trend towards “state-led development” and granting of unfettered freedom to MNCs and financial giants since then has subjected every sphere of social and economic life to the discipline of international capital flows. Global mergers and acquisitions among big firms have enabled them to become ever bigger entities even as privatization and the consequent “downsizing and rollback” of the state have prompted pundits to postulate on “state-less capitalism” that is not in accord with facts. No doubt, privatization has been an effective ideological weapon in the hands of ruling classes to evade responsibility for the people’s suffering caused by the system by blaming everything on impersonal market forces. On the contrary, after withdrawing itself from social spending and dismantling all erstwhile laws pertaining to labour, tax, environment, etc., and removing its welfare mask altogether, it is the very same neoliberal state that takes a pro-active role in unleashing the tyranny of finance capital on workers and peoples everywhere. To frame repressive labour laws and install pro-corporate tax and environmental regimes, finance capital is relying on the state as much as ever, and therefore it needs to be reiterated that “non-state capitalism” is a misnomer both internationally and intra-nationally.

The argument that imperialism today has become “transnational” is still more problematic as ‘national character’ is inherent in capital since its birth itself. The conceptualization on a “trans-national capitalist class” is purely hypothetical.  For, even after several decades of internationalization of production, the world’s leading manufacturing companies still branches out from the so called “home country.” That is, majority of the shares of MNCs are still owned within their home country. The great majority of US, German, British, French, Japanese and Chinese firms remain overwhelmingly nationally owned and has the majority of their assets concentrated in a single country. According to latest data, 96 percent of the world’s 200 largest MNCs have their headquarters in only eight countries; they are legally registered as incorporated companies of eight countries and their boards of directors also sit in these eight imperialist countries. Only less than 2 percent of their board members are non-nationals. That is, despite their “global reach”, the wealth and ownership of MNCs still have a clear ‘national base’.

 These MNCs firmly rely on their home state for the establishment of appropriate multilateral  investment, trading and monetary institutions and arrangements for orderly regulation of trade and commercial relations, for coercing dependent countries to have an “investor-friendly” atmosphere and for ensuring “ease of doing business”, for avoiding fluctuations in international currency and capital markets, for the protection of a captive domestic market, for bailing them out during crises, and above all for using military might against an adversary or “competitor” or recalcitrant element as the last resort. Thus crisis-ridden imperialism cannot exist without state and greater the threat of crisis, the greater the need for the state.  Historically, “speculative capital” has been less tightly rooted in the state than industrial capital. However, the financial crash of 1987 and the onset of recession in the last decade of the 20th century brought home very strongly its need also for the imperialist state. The provision of trillions of dollars worth “stimulus packages” and “rescue operations” extended to corporate capitalists the world over following the 2007-08 “global meltdown” has been the latest example.  Immediate response of finance capitalists to a crisis is to rush back to the relative security of their imperialist states. Suffice it to say that true internationalism and the move towards a “stateless society” are implanted to socialism and not to capitalism.

However, the generally accepted Marxist model of inter-imperialist rivalry of the colonial era which still acts as a factor in capital accumulation is qualitatively different in today’s postwar neocolonial context of internationalization of capital. No doubt, as exemplified through Brexit, Trumpism, etc., “economic nationalism” and protectionism have been well-entrenched trends in imperialism. However, though protectionist tendencies are strong, the compulsions arising from globalization of commodity and financial markets have made it keen on the part of imperialism through such institutions as IMF, World Bank, WTO, etc., to keep dimensions of such rivalries under check so as to avoid a repetition of the trade wars, currency and military confrontation, etc. which were reminiscent of the interwar period. In the post Cold War neoliberal period, in spite of aggressions in Iraq, West Asia and other regional interventions, this situation has been more or less the same. Free cross-border capital movements, stability of investment, liberal trade policies, etc. which are essential pre-requisites for internationalization of capital prompts imperialism to strive to postpone an open military confrontation among imperialist powers. However, imperialism can camouflage its aggressive and war-mongering character only temporarily. The collusion or contradiction among imperialists in any given situation is integrally linked up with the development of international class struggle. No doubt, ignorance of this basic Leninist proposition and talk of “peaceful imperialism” will invariably lead into erroneous theses like “trans-nationalism”, “ultra-imperialism”, “trans-state capitalism”, etc. Meanwhile, both “free trade” and “protection” as two systemic tendencies exert their influence as two sides of the same coin of imperialist policy.

 Globalization of financial speculation or “financialization”

However, since the stagflation of the 1970s and collapse of Keynesianism and removal of controls on speculative capital, internationalization of finance or financialization has proceeded much faster than the internationalization of production. In fact, as a corollary of stagnation and lack of ‘profitable’ investment opportunities in imperialist countries, finance capital had started fast moving into the sphere of speculation even when Keynesian policies were in vogue. Immense money capital accumulated by MNCs and global financial giants, especially those emanating from the US and EU including the huge volume of euro dollars and petrodollars deposited in American transnational banks and European banks had to be deployed in the most profitable manner. Since the productive sphere was stagnating and confronting a downturn in the rate of profit, the other option was to develop new avenues of financial speculation.  Large scale FDI flows into the cheap-labour “export enclaves” of neocolonial countries were only part of the solution.  In 1974 itself, the US abolished all restrictions on international capital movements, while EU removed controls on capital, following the fall of Berlin Wall and collapse of Soviet Union. Along with these, a multidimensional network of financial institutions and services and bewildering variety of financial assets and devises called “derivatives” and transaction methods were built up.  Under Keynesian policy of apparent restrictions on speculation, financial expansion was allowed more or less in tandem with production and employment or rather speculation was feeding on a productive economy.  But under neoliberal globalization there emerged a clear dichotomy between “the financial” and “the real” and financial growth started gearing itself for self-expansion through unhindered speculation. Unlike the past history of imperialism, today the global speculative bubble is thriving on a stagnant economy. To be precise, internationalization of finance or financialization that drives today’s imperialism is undermining the very basis of capitalist commodity production itself.

During the early twentieth century, though finance capital was in its early stage, Lenin was farsighted enough to note its destructive nature.  In today’s imperialism, this reactionary essence of finance capital pinpointed by Lenin has assumed a qualitative leap through financialization and has become terribly destructive.  Lion’s share of international financial transactions today does not serve any productive function, but serve purely financial speculation such that production can be compared to “a bubble on a whirlpool of speculation.” Taking the US as an example, the dollar value of financial transactions there that was more than two times of the GDP in 1970, rose to more than five times in 1980 and to more than fifty times in 2000.  By the turn of the twenty-first century, when the floodgates of financial speculation started opening up, the total value of annual financial transactions in US had reached the $ 500 trillion mark whereas its GDP was $ 10 trillion. In 2006, just an year before the first “global meltdown” (the so called “sub-prime crisis” in US  followed by the “sovereign debt crisis “ in EU and recession in China) of the twenty-first century, the value of international “derivative trading” alone reached $1200 trillion when the GDP of US amounted to $ 12.456 trillion, around one-hundredth of the former. The same trend was repeated in other countries too. Accommodation of the interests of speculative finance capital, the primary form of which has been cross-border “hot money flows” became the major concern of comprador regimes at the behest of IMF, Multilateral Investment Guaranty Agency, TRIMs provisions of WTO and so on. Thus internationalization of finance has not only reduced the maneuverability of comprador regimes but also exposed the countries to the turbulences and instabilities arising from “hot money flows” crossing ‘national’ borders within split seconds.  

In such a scenario, where the driving force of profit accumulation has been financial speculation rather than production, world is witnessing the paradoxical situation of growing wealth concentration with  corporate billionaires even as world economy is reeling under slump. According to Marxist analysis, accumulation of wealth by financial oligarchs is invariably rooted in the extraction of surplus value from living labour. That is, though the appropriation of surplus value by finance capital apparently takes place in financial markets and speculative spheres, it is ultimately related to the extraction of surplus value from the sphere of production which is lagging behind.  In a situation where employment and mass consumption are going down, development of cracks in the extraction of surplus value is inevitable. During the initial decades of neocolonial plunder, finance capital accumulated profit mainly through the provision of loans to industry, engaging in commercial banking operation and supplying loans to housing. In that sense, there was a fairly direct relationship between the extraction of surplus value from the workers by capital and the appropriation of a significant portion of that surplus value by finance capital. However, due to the inherent contradiction of capitalism, this so called “coalescence’ of finance and industry and accumulation of wealth have become unviable since the advent of “stagflation” in the 1970s. Confronted with this new crisis and downturn in profit, as already noted, through a shift in neocolonial policy towards neoliberalism, imperialism resorted to a reorganization and restructuring of both the spheres of production and circulation such that accumulation of wealth was increasingly separated from the creation of value. The outcome has been financialisation on the one hand, and deindustrialization, outsourcing, casualization, “jobless growth” (large-scale unemployment and under-employment as a permanent phenomenon), etc., on the other, leading to a galloping of profits and deterioration in the real earnings of workers as two aspects of the same process.

  Of course, the root of the ongoing crisis is to be traced to production relations rather than confining to the realm of finance. More precisely, in spite of world’s leading capitalists today holding greater proportion of world wealth than ever in history, the fraction of it being invested productively has never been lower. It is leading to an aggravation in inequality and loss of purchasing power for the masses leading to an intensification of capital’s “realization crisis” further.”  Even as the most unproductive, conspicuous consumption by the parasitic financial oligarchy and ruling classes grows leaps and bounds, the purchasing power and consumption levels of the broad masses of people are going down everywhere.  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 workers and the oppressed people to the corporate oppressors in general.

A noticeable trend in this context has been the huge accumulation of financial wealth by the comprador bourgeoisie from dependent countries acting as junior partners of imperialist monopolies.  Internationalization of capital has also enabled these sections specialized in money-spinning financial, stock and real estate speculation to enter world financial and monetary circulation channels with their financial accumulation and integrate themselves with imperialist financial and investment centres. Today imperialism has succeeded to extend this financial integration even to the micro or local level under the camouflage of “financial inclusion” through micro-finance social networks linking the “global” with the “local”. This has further contributed to the undermining of the economic and political structures of neocolonial countries, as is exemplified by the efforts of ruling regimes even in countries like Brazil, Saudi Arabia, India, South Korea, etc., to accommodate the speculative interests of global finance capital, at the behest of IMF, World Bank, WTO, etc. 


Even in the turn of the twenty-first century, digital flows that connect the world more than ever were practically nonexistent. But their impact on economic growth today is at par with the centuries-old trade in goods.  Today broadband connections have become more important than shipping lanes. And during the past one decade, the amount of cross-border bandwidth that is used has grown around 50 times from less than 4000 gigabits per second  in 2006 to more than 220000 gigabits per second in the beginning of 2016 , and is projected to increase by an additional eight times by 2020.  While internet penetration in US is estimated at three-fourth of the population, the same is two-third in EU and one-third in Asia whereas the “digital divide” (people having no access to internet), as a manifestation of global inequality,  is most revealing in sub-Saharan Africa. Flows of information, searches, communication, multimedia, images, video transactions, ecommerce, intra-company traffic, data, text, articles, etc., continue to surge. In addition to transmitting valuable streams of information and ideas in their own right, data flows enable the movement of goods, services, finance, and people. Virtually every type of cross-border transaction now has a digital component. According to bourgeois experts, over a decade, all types of digital flows acting together have raised world economic growth by 10.1 percent (equal to $7.8 trillion in 2014) over what would have resulted in a world without any cross-border flows!

Of course, nobody can gloss over the significant role played by “digitization” and “informatization” in differentiating contemporary imperialism from its twentieth century counterpart. As already noted, the emergence and transformation of ICT has been a catalyst in the internationalization of monopoly finance capital (at the sphere of both production and circulation) since the late 1960s. But with the advent of digital flows or digitization, it has become possible to instantly transform physical activities including even manufacturing into fluid digital data that can be stored, retrieved and distributed globally. And the line of demarcation between hardware and software is vanishing. Unlike in the past, one of the major reasons why protectionist and economic nationalist policies are becoming less effective in the twenty-first century has been due to the internet. Obviously, digital flows which are crucial and most concentrated in the sphere of monetary and financial transactions have imparted a qualitative dimension to the global operations of financial speculation in the 21st century.  Digitization also prompts various analysts to characterize the transformation of the “industry-based” world to “information-based” and “knowledge-based” one. Some have even characterized 21st century capitalism as “informational capitalism” compared to “laissez-faire capitalism” of 19th century and “corporate capitalism” of 20th century. However, one-sided emphasis on today’s imperialism as “informational imperialism” would be an exaggeration since such a formulation would negate the centrality of production process, capital circulation, commodity trade and military aggressions. While playing an important role in today’s imperialism, digital flows are still subsumed under finance capital (class relations among and within nations), and the “digital divide” by deskilling those having no internet access is widening inequalities at all levels. Large “digital gaps” between a handful of imperialist countries and the rest of the world are conspicuous.

 “Digital imperialism”, while reinforces finance capital’s global reach at minimum cost through “leaner” and more efficient ways facilitated by digital platforms and tools,  the regime of flexible specialization and accumulation unleashed by digitization has created new challenges before the working class as traditional approaches of organizing labour are becoming less effective in the “digital era.” “Digital relations of production” that are shaped by informal or unorganized, unpaid, underpaid, super-exploited, “slave” labour today yield finance capital inexhaustible and complex network of interconnected, global avenues of exploitation, and plunder. Emergence of transnational cyberspace as a tool of corporatization, communication and coordination can restructure not only the economic sphere but also can manipulate political and cultural systems by creating “intangible”  or “virtual” “cultural products” such as  knowledge, information, ideas, symbols, codes, texts, linguistic figures, images, pornography,  and even conspiracy theories. Suffice it to say that an objective analysis of the new frontier of digitization that opens up cyber avenues of expropriation to finance capital from the Marxist perspective is indispensable for the proletariat.

Corporatization of agriculture and depeasantization

A discussion on today’s imperialism would be incomplete without mentioning the fundamental transformations taking place in the sphere of agriculture. Of course, in consonance with the laws of motion of finance capital over a century, world capitalist agriculture has been transforming from ‘industrial’ to ‘corporate’.  In conformity with this, corporatization of agriculture and depeasantization and proletarianization of vast majority of the peasantry are the two major inseparable trends visible in global agriculture today.  Intensification of corporate land grab and unprecedented expropriation of the peasantry from land and massive displacement of rural population from their habitats resulting in horrific levels of migration in search of livelihood and sustenance leading to worldwide refugee crises and swelling urban slums are all integral part of the crisis confronting agriculture now.  Coupled with these, neoliberal pricing and market policies pertaining to agricultural inputs as well as outputs that serve the interests of corporate farms, agribusiness MNCs and commodity speculators also contribute to the forced withdrawal of peasants from agriculture. As a corollary of corporatization of agriculture as manifested in  large scale dependence on imports of food, fertilizers and  animal feeds for the breeding of animals in mechanized or “factory farms”, cultivation of  bio-fuels and ever-intensifying use of genetically modified seeds, mono-crop agriculture , all resulting in loss of biodiversity, etc., have acted as major factors behind the ecological catastrophe and environmental crisis along with food insecurity for the vast majority of the common people. Three quarters of the global genetic diversity of crops (along with animal breeds) have been lost by the turn of the 21st century.

The international penetration of finance capital in to agriculture as a corollary of its postwar expansion started with the super-imposition of Green Revolution on neocolonial countries since the 1950s at the combined instigation of US Agricultural Department, Ford-Rockefeller philanthropies, USAID and  World Bank, and further carried over by FAO, UNDP, International Fund for Agricultural Development(IFAD) and Consultative Group on International Agricultural Research(ICAR) with the involvement of agribusiness MNCs. Interpreted as a classic case of neocolonization with its firm grip over both the market and technology pertaining to agriculture, Green Revolution also paved the for the emergence of an agricultural bourgeoisie class in Afro-Asian Latin American countries as a social base for neocolonial plunder replacing erstwhile decadent feudal forces who were performing this role under colonialism. However, the ongoing corporatization of agriculture under the so called Second Green Revolution has imparted a new dimension to this phenomenon.  The inclusion of agriculture in to the Market Access and Plant Breeding provisions including intellectual property rights pertaining to plants, animals, and micro-organisms of WTO at the behest of US and EU has compelled marginal peasants to abandon agriculture altogether and join the ranks of urban slum dwellers or ‘informal working class’. In several Afro-Asian Latin American countries “contract farming” has become the dominant trend where farmers are fast transforming as appendages (just as bonded labourers) to agribusiness companies and commodity speculators (so called futures traders) at terms dictated by the latter. Coupled with this, unprecedented land concentration with big corporate farms has rendered the tillers of the soil landless leading to a rapid growth in the number of agricultural workers relative to that of the ‘peasantry’ almost everywhere.  To be precise, the economic, social and ecological problems created by corporatization of agriculture are part of the central political question in today’s imperialism.

Ecological catastrophe

Plunder of nature and ecological destruction which were inseparable from the capitalist accumulation process have reached the level of a global environmental catastrophe in today’s imperialism. In his book ‘Dialectics of Nature’ Engels had pointed out how the ‘primitive accumulation’ of capital under the colonization process led to irreparable damages to global environment in the process of installing factories, plantations, mines without any concern for vulnerable or sensitive environment and ecological balance. However, in the post World War II period, utilizing the technical advances finance capital’s intensified exploitation of people and nature has led to unprecedented pressure on the ecology of the earth. The global market expansion and change in the life styles and growth in the conspicuous consumption by a tiny elite have directly contributed to the “global warming”, which by changing existing climatic patterns will result in food scarcity on a global level, massive displacement of people,  drinking water scarcity and so on leading to the worsening of already existing inequalities.  It was in this context that the CPI (ML) Red Star in its Party Program has incorporated the “contradiction between capital and nature” as a major contradiction of the imperialist system. Today, as ecology has come to the centre-stage of policy decisions and as world people’s ecological consciousness is ever-growing, there has been a spurt in the activities of several agencies including international NGOs specializing in environmental questions. But most of them are conspicuously silent on finance capital’s neocolonial interests behind the issue. Thus the whole issue of ecology and environment which is inseparably linked up with imperialist globalization today is being depoliticized in the interests of ruling classes.

At this juncture, as an inseparable component of the struggle for building up an egalitarian social order, the ICM has yet to concretely put forward an alternative development paradigm that stands for a harmonious co-evolution of nature and human society. During its initial years, the Soviet Union led by Lenin upheld a level of ecological consciousness and ecological conservation which was well in advance of anything that existed in the capitalist countries at that time. However, from the 1930s onward, the whole development orientation began to shift towards a one-sided emphasis on “productive forces” and  such ideas as “catching up with the West”, “GDP as yardstick of economic growth”, etc. gradually got official recognition leading to  the emergence of  bureaucratic and technocratic decision-making in the ‘development’ process. Though Mao Tsetung has attempted to rectify this mistake by his well-known conceptualization of “On the Ten Major Relationships” while discussing “on the problems concerning socialist construction and socialist transformation”, that was completely abandoned following the process of capitalist restoration and China’s eventual integration with imperialism.

Parallel to the rise and fall of the socialist initiative on development, in the context of the transition from colonialism to neocolonialism, imperialism took concerted efforts to use development itself as an ideological weapon against socialism and progressive people’s movements. By the time of decolonization itself, a whole set of “modernization theorists”, Keynesian policy experts and imperialist think tanks who were integrally associated with American social science institutions, US State Department and Bretton Woods organizations had propounded a ‘universal theory of development’ or ‘development paradigm’ applicable to the whole world irrespective of the historical trajectories of countries. In essence, under this mainstream development model, development itself has been institutionalized as a corollary of the unabated global expansion of finance capital and countries were required to open up their economies to the unfettered flows of foreign capital.  With the collapse of this “development optimism” in the context of the advent of stagflation since the 1970s, coupled with financial speculation plunder of nature has become the major source of neoliberal accumulation today. When internationalization of finance capital has reached its farthest limits resulting in an unprecedented ecological catastrophe, what requires is a grasp of the dynamics of class relations behind the plunder of people and nature by capital, and traversing the prolonged road to a people-oriented development in harmony with nature, democracy and socialism.  To reiterate, at a time when ecology has become one of the central political questions today, the inability of ICM to evolve an alternative proletarian approach to the whole question of mainstream development paradigm has become a challenging task.

De-politicization and fascistization

Integral to the global expansion and internationalization of finance capital under neoliberalism has been imperialism’s all out ideological-political offensive against socialist and democratic forces.   The main task of postmodernism and post-Marxism as ideologies of neoliberalism has been diversion of people’s attention from the global operations of finance capital on the one hand, and negation of the primacy of working class political struggles in social transformation on the other. Taking advantage of the   ideological and political setbacks suffered by ICM, the ultimate objective of the wide range of cultural and ideological streams relayed by postmodernism has been depoliticizing the working class and oppressed peoples. Backed by such ideologies, international funding agencies, a whole set of NGOs and so called civil society organizations are working overtime to camouflage the laws of dynamics underlying the material foundations of international finance capital and any mention of even the term imperialism itself is conspicuously absent in the diverse postmodern and post-Marxist alternatives or “discourses’ proposed by them.  Negating the class essence of imperialist oppression and reorienting everything to the “cultural logic” of modern capitalism, these ideologies aim at, as already noted, depoliticizing and diverting of the working class and oppressed peoples away from anti-imperialist struggles. The entire categories associated with modernity such as enlightenment, ideals of secularism, and democracy are characterized as a “baggage”,   while religion, ethnicity, race, caste and other pre-modern and pre-capitalist “identities” are suggested as the “preferred cohesion of the oppressed” against the injustices of the modern world.  Postmodern romanticizing of the “orient”, glorification of past identities as “subaltern cultures”, along with the bouncing back of several religious fundamentalist, obscurantist, chauvinistic, xenophobic and autarkic reactionary trends, all in the guise of fighting the “evils of capitalism” are working in full swing to turn back the clock of history. 

The tilt towards neo-fascism in its diverse manifestations at a global level today is inseparably linked up with this depoliticizing of the masses. Fascism has been the outcome of the intensification of the internal contradictions of imperialism. As Comintern rightly said, fascism outbreaks when the inherent contradictions of imperialism sharpen, the severity of which is such that it cannot be resolved through normal methods of surplus value extraction by finance capital. The concrete manifestations of fascism-“terrorist dictatorship of finance capital” as defined by Comintern- resulting from interpenetration or merger between monopoly capital and bourgeois political leadership that first appeared during the inter-war period in Germany and Italy in the form of Nazism and Fascism are a much discussed topic. The situation today where under the veil of bourgeois democracy corporate billionaires have the reins of of state power under their control,  ever-mounting imperialist crisis is manifested in incessant  corporate assaults on working class and oppressed peoples everywhere.  Consequently, working class struggles and people’s discontent are surging in every part of the globe in one form or another. In the absence of a revolutionary leadership having a political alternative capable of leading these struggles to transform the system, the economic, social and political disruptions resulting from the crises are used by corporate neo-fascists and their political representatives to impose authoritarian and dictatorial methods on the people.  The developments in Britain leading to Brexit, the advent of Trump in the US, the victory of AFD in German local elections, the rise of Marine Le Pen’s Party in France, the Brazilian coup, the ultra-right wing Hindu supremacist Modi regime in India, and so on are concrete instances of rightward, protectionist, chauvinistic, and xenophobic shift in political-economic relations at a global level.  Quite reminiscent of the fascist ascendancy of the1930s, reactionaries of all hues are profusely using rhetorical, demagogic, populist, ill-digested and mutually contradictory proposals to manipulate public opinion and confuse the masses in the depoliticized context as already noted.  Immigrants, refugees, low-castes, racial and religious minorities, are blamed for all the “misfortunes”. With the help of corporate media, apparatuses of the state, vigilante groups and storm troopers, hatred, suspicion and even direct attacks are systematically spread and enforced to divide and dismember people’s fighting unity against corporate capital. 


While analyzing the major trends in contemporary imperialism, it is to be unequivocally stated that unlike in the past crises where temporary recoveries were possible, the developments under neoliberalism have imparted an irreversible dimension to imperialist crisis. The present world crisis of imperialism that intensifies day by day has been the outcome of the reproduction and piling up of all its inherent contradictions on an unprecedented scale. Further, the internationalization of finance capital through a quarter century of globalization has transformed every crisis appearing in any part of the world into a global one. The euphoria on global expansion of market created by the collapse of East Europe and Soviet Union and capitalist restoration in China followed by their eventual integration with imperialist market is no more. The initial attraction to neoliberal ideologies backed by globalization has lost its steam. The economic, social, cultural and ecological crisis arising from globalized imperialism today is threatening the very sustenance of humankind. The crisis is systemic and irresolvable within the imperialist system and space for maneuvers is also fast depleting. However, as Lenin pointed out, there is no final crisis for capitalism. Until being thrown away, imperialism will carry on devising existential strategies putting heavier and heavier burdens on the backs of people. A revolutionary intervention led by the international working class with a political alternative is the only solution.  To provide a fresh basis for this crucial task, the Marxist theory of imperialism has to be enriched further based on a concrete understanding of the laws of motion of finance capital today.


Marx and Engels, Collected Works, Vol. 25

Lenin, Imperialism, the Highest Stage of Capitalism

Mao Zedong, Selected Works, Vol. V

 ‘Fourth Comment of the CPSU’ entitled “Apologists of Neocolonialism” (Great Debate)

John Bellamy Foster and Henryk Szlajfer, “Introduction,” in Foster and Szlajfer, eds., The Faltering Economy (New York: Monthly Review Press, 1984)

Samir Amin, The Law of Worldwide Value (New York: Monthly Review Press, 2010)

Atilio A. Boron, Empire and Imperialism (London: Zed Press, 2005)

Geoffrey Pilling, The Crisis of Keynesian Economics: A Marxist View (Croom Helm, 1986)

P J James, Imperialism in the Neocolonial Phase (Massline Publication, Kerala, 2015)

P J James, Dimensions of World Agricultural Crisis and the Task of Overcoming It (Paper presented at the World Agricultural Conference held at Kathmandu, 2016)

P J James, On MLPD’s Thesis on “New-Imperialist Countries” (Red Star, August 2016)

P J James, Debate Over the Issue of “New-Imperialist Countries” (Red Star, April, 2017)


Fascism as a topic is conceptualized and debated today with respect to different ideological persuasions ranging from liberal bourgeois and reformist to Marxist positions. A striking characteristic of the fascist parties, movements and regimes today is their adaptation to contemporary conditions and unlike that of the inter-war European fascism, many of them are coexisting in varying degrees with outward manifestations of bourgeois parliamentary democracy, though in essence all of them stand for an outright negation of it. A de-facto fascist dictatorship can exist even with the façade of elections if it is possible to hold entire mechanisms of state power under its control so that no other party or coalition of parties except the fascist party comes to power. Common manifestations of fascism (also called ‘neo-fascism’ today to differentiate it from ‘classical fascism’ that emerged in Europe of the inter-war period) such as terrorism, ethnic and racial cleansing, extermination and oppression of minorities, immigrants, refugees, women and other oppressed, climate catastrophe, super-exploitation and oppression of workers, elimination of  hard-earned democratic rights, militarisation and above all unleashing the power of corporate capital on all aspects of socio-economic life are visible at a global level ranging from the Americas and Europe to Asia. However, irrespective of the manifestations of fascism, Marxism invariably situates it in the whole trajectory of transformation of imperialism and finance capital. At the same time, from a Marxist perspective, no social phenomenon can be analysed from a static perspective.  Therefore, fascist regimes’ organic link with the logic of capital accumulation today may assume different characteristics according to varying historical, national, political, economic and cultural context. 

Origin and Development of Fascism

From the very beginning of the outbreak of fascism in Europe, when liberal-bourgeois and reformist circles interpreted the phenomenon as ‘authoritarian capitalism’, it was Marxism that based on a comprehensive analysis of monopoly capitalism approached fascism as rooted in the very foundations of finance capital and as the outcome of the extreme intensification of the internal contradictions of imperialism. Fascism outbreaks when these contradictions sharpen and lead to a severe internal crisis which cannot be resolved through normal methods of surplus value extraction, from both internal and external sources. For instance, unlike the other European powers who had their colonial empires and the US which could enforce its imperialist diktats over the entire Americas and the Pacific even “without colonies”, both Germany and Italy had restrictions to pursue an imperialist policy abroad. On the other hand, these two countries though rivals in World War I, and having lost their colonies and hence weakened during the war, went through unprecedented domestic economic crises resulting in militant working class struggles leading to social disruption, especially in the context of the ideological-political challenges raised against the capitalist-imperialist system by Socialism in Soviet Union.  However, in the absence of a communist leadership in these countries, as that led by Lenin in Russia capable of overcoming the crisis through a revolution, the situation was favourable for an interpenetration between monopoly finance capital and bourgeois political leadership giving rise to fascism. 

Thus the social anarchy arising from all round economic crises and political turmoil provides a fertile breeding ground for fascism. Such a situation is an opportune moment for fascists to have their firm foothold by attracting the depoliticised petty-bourgeois sections through rhetorical and demagogic proposals, though they are mutually contradictory and ill-digested, and blaming the racial, religious, regional and national minorities and other marginalised for all the misfortunes of the society.   Once fascism firmly establishes, as happened in Italy and Germany, along with the  petty bourgeoisie, other sections of the population such as unorganized workers, unemployed youth, criminal and lumpen elements are also attracted to fascists. Gradually fascism makes further headway through elections by appeals to the disgruntled larger sections of the dissatisfied people. Both Mussolini and Hitler in their programs even included better wages and social security for workers, protection to petty traders, increased state-sector  investment, more taxes on the rich and similar other demands pampering to the sentiments of common people.  Together with this, blatantly false and malicious propaganda were systematically used to build up hatred among the common people against targeted sections of the society. For instance, in the fascist definition of ‘New Germany’, Jews, communists and trade unions were identified as enemies of the nation. After assuming power, while constitutional and parliamentary institutions and democratic values were demolished from above, armed fascist goons and storm troopers (black shirts, brown shirts, etc.) integrated with state’s repressive apparatus and effectively propped up and funded by monopolies are let loose on the people from below.

From the very beginning Marxists tried to have an in-depth understanding on the fascist transformation of the bourgeois state. In fact, Lenin had mentioned on Mussolini fascism though he had no direct knowledge of the working of the fascist party at that time. And, he had interpreted the Russian ‘Black Hundreds’ as a proto-type of fascism which in the hands of police chiefs under Tsardom was used as a para-military weapon against the re­volutionary movement. However, it was only after the coming to power of Mussolini and Hitler that Comintern (Communist International) came to have a clear-cut understanding of fascism. Thus, it was based on an objective evaluation of the transformation of the bourgeois state into a dictatorial, terrorist and annexationist regime during the twenties and thirties that the Report drafted by Dimitrov and adopted by the 7th Congress of Comintern (1935) and endorsed by its 13th Extended Executive Meeting defined fascism thus:  “Fascism is an open terrorist dictatorship of the most reactionary, the most chauvinistic, the most imperialist elements of the finance capital… Fascism is the government of finance capital itself. It is an organized massacre of the working class and the revolutionary slice of peasantry and intelligentsia. Fascism in its foreign policy is the most brutal kind of chauvinism, which cultivates zoological hatred against other peoples.” Obviously, this definition of fascism is the most comprehensive one that unfolds the close integration of both the economic foundation and political superstructure of fascism with the domestic and overseas interests of finance capital.  In those countries where the fascists took over power, the communists and trade unions were physically eliminated while bourgeois opposition was in total disarray. And, as elucidated in the above definition which provided a concrete understanding of fascism at that historical context when domestic resistance against fascism became virtually impossible, it was Comintern that under its initiative forged an anti-fascist front including a broad alliance with other bourgeois regimes to resist and defeat the fascist challenge.   

Postwar Situation

The defeat of fascist powers Germany and Italy in World War II followed by the surging national liberation movements and advancement of socialism increased the prestige of communist movement and inspired world people in general. These were threatening factors for the perpetuation of the colonial system of imperialism. This prompted world imperialism led by USA, the supreme arbiter in the postwar order to bring about necessary changes regarding the form of finance capital’s continued expansion at a global level. Thus to hoodwink world people, the camouflage of decolonisation together with welfare state based on Keynesian state intervention  was initiated even while laying down the foundations for a neocolonisation process for more intensified penetration of finance capital into erstwhile colonies. However, as generally acknowledged, the International Communist Movement (ICM) on account of ideological-political factors, failed to properly grasp the content and gravity of this epoch-making transition from colonialism to neocolonialism. The Khrushchevite revisionism that emerged in the mid-fifties even interpreted neocolonialism as a weakening of both imperialism and hegemony of finance capital. This was at a time when the US ascendancy as the postwar imperialist leader had been filled with loot, plunder, horror, genocide and even ‘holocausts’ on defenceless people the world over.

Neocolonialism does not at all imply that it is less militaristic than old colonialism. As an inalienable component of Cold War initiated against Soviet Union and socialist bloc, the US also went on installing ‘fascist regimes’ backed by military coups in many countries from Latin America, its backyard to Asia.  As part of the Cold War offensive, several anti-communist, fascistic, terrorist and counterrevolutionary organisations were also planted within seemingly independent bourgeois regimes in many parts of the globe. Such terrorist outfits and right-wing forces often acted as effective tools in the hands of US imperialism to direct against the emerging national liberation and revolutionary movements in neocolonially dependent countries. In a number of countries from Latin America to Asia including Brazil, Argentina, Chile, Uruguay, Iran, Greece, Turkey, Iran, Pakistan, Indonesia, Philippines and so on,  US succeeded in installing fascistic regimes through mi­litary coups. McCarthyism characterised by heightened anti-communism and political repression in the US that flourished in the 1940s and 1950s provided the required ideological basis for all these fascistic-counterrevolutionary  US overseas moves often keeping US-trained fascist cadres at “civilian deep cover” in neocolonies and dependent countries ensuring the neocolonial rules of the game of as per the diktats of finance capital.

By the turn of the 1970s, the post-war imperialist ‘boom’ came to a close and on account of the irresolvable contradictions inherent in capitalist-imperialist system, persistent stagflation emerged as a relatively new, more prolonged and more complex phenomenon compared to the imperialist crisis of the 1920s and 1930s that gave rise to fascism. However, unlike the situation then, by the seventies the ideological-political setbacks of the ICM became so glaring that yielded the political condition for imperialism to abandon ‘welfare state’ altogether and resort to a change in the accumulation process through neoliberalism. In essence, it implies a reversal of the downturn in profit rate from stagnating productive sphere by developing new avenues of plunder from the ballooning financial sphere utilizing latest advancement in information and communication technologies. Obviously, the parasitism, decay and degeneration associated with this neoliberal accumulation has been complex, multi-dimensional and several-fold more pronounced  than that exposed by Lenin a century back and the political reaction emanating from it shall therefore is bound to be horrific. On the eve of the altogether collapse of Soviet bloc and emergence of post-Cold War neoliberal situation, US imperialism so cunningly and assiduously brought up the so called “Islamic terror” as its new enemy and a critical counterweight in its militarisation strategy leading to a more favourable condition for a bouncing back of fascism with intensified vigour. However, instead of open military coups, required groundwork has already been underway by neoliberal centres and deep-seated reactionary forces that made it possible for fascist parties with their far-right socio-economic and political agenda to ascend to power through ballots even maintaining formal constitutional edifice or apparent features of bourgeois parliamentary democracy.  As such, today’s fascism or neo-fascism cannot or need not be mere text copies or stereotyped versions of erstwhile classical fascism of the 1930s.

Fascism under Neoliberalism

From the Marxist-Leninist perspective, the neoliberal wave of fascism or contemporary fascism can be analysed only with respect to what is called globalisation or internationalisation of capital, i.e., limitless and uncontrollable cross-border movement of finance capital today. Though bourgeois intellectuals characterise globalisation an irreversible process, it is not all linear and is subject to several inherent contradictions. Strikingly, while capital is increasingly becoming global and transnational, resistance to it tends to be disorganised or fragmented due to the success of imperialism in creating division among anti-globalisation forces on the one hand, and on account of ideological-political weakness on the part of organisations and movements leading the working class and the oppressed on the other.  For instance, when imperialism started unleashing the tyranny of finance capital on workers and oppressed beginning with Thatcherism and Reaganomics by resorting to a dismantling of the welfare state and replaced public sector and social democratic ideas of distribution with privatisation/corporatisation together with propping up of voluntary and NGO spending, the Left failed to build up effective resistance against it due to lack of a coherent and clear grasping of neoliberalism. The emergence of postmodernism and post-Marxism as neoliberal ideologies espoused by ultra-reactionary imperialist think-tanks since the eighties and manifested in such prognoses as ‘identity politics’, ‘multiculturalism’ (that emphasises difference rather than commonality), etc. that negated both the importance of working class resistance against capital and united political struggles by the oppressed has led to an effective depoliticizing mission preparing the groundwork for the emergence of several neo-fascist trends. In the guise of fighting the ‘evils of capitalism’, postmodernism went on glorifying and romanticizing the orient, the past and all obscurantist and pre-modern identities and ‘subaltern cultures’. This brought forward various religious fundamentalist, revivalist, chauvinistic, xenophobic, and autarkic reactionary ideologies to the centre-stage of history to divert world people’s attention away from the global operations of corporate finance capital.

This all round depoliticising provided a fertile ground for the rapid emergence of many neo-fascist forces all over the world. Neo-fascists everywhere are quick to take advantage of the mass psychology of social and economic insecurity due to the loss of livelihood, employment, habitat and environment arising from corporate plunder as well as people’s loss of faith in mainstream traditional parties including social democrats who have no alternative to neoliberal policies. Everywhere, fascists use more or less the same campaigns with populist, romantic, idealist and moral nuances often filled with hatred towards the ‘other’ based on hypotheses such as ‘clash of civilisations’ though with variations according to concrete local, national, historical and cultural contexts. Often, according to the specificities of each country, fascists could be seen conspicuously pursuing  an exclusivist line allying with the ‘homogeneous’ part (often representing the majoritarian culture) of the population effectively pitting against the ‘heterogeneous’ sections generally composed of religious, ethnic/racial and linguistic minorities, migrants, refugees, dalits, tribals and other marginalized and oppressed sections. And a striking feature of all the far-right neo-fascist parties and forces is their apparently anti-establishmentarian and anti-globalisation (often right-wing populist) stance often sprinkled with seemingly anti-ruling class rhetoric directed against the privileges of the superrich and the elite. Trends like ‘new history writing’ being sponsored by European neo-fascists today is also of particular relevance here. An example is the McCarthy-style argumentation that the anti-fascist alliance of Stalin, Churchill and Roosevelt was the wrong one; rather what required was Stalin’s defeat led by the Hitler-Chamberlain-Hoover coalition. In the latter case, Europe would not have to bear the burden of the ‘welfare state’ that led to the stagflation of the 1970s, it is argued.  In India, for instance, a ‘new history-writing’ is in the offing whitewashing all the misdeeds and ‘anti-national’ history associated with RSS. No doubt, whatever be their populist pretensions, once in power, the neo-fascists show no qualm for betraying those masses who enabled them to rise to power thereby wholeheartedly serving the interests of international finance capital and ruling classes -- a common feature of fascists of all hues, both old and new. 

Fascist Transformation in India

The advent of fascism in India needs to be analysed in the broader global context briefly analysed above. BJP that rules India today is just a political outfit of RSS (Rashtriya Swayamsevak Sangh) that came in to being in mid-1920s more or less at the same time when fascism appeared in Europe, and as per records, fanatical adulation or admiration of both Hitler and Mussolini was endemic to RSS leadership from the very beginning. For instance,  Moonje, the mentor and political guru of Hedgewar, the founder of RSS, had visited the Italian fascist dictator Mussolini in 1931 and inspired by the Fascist Academy of Physical Education that trained paramilitary lumpen goons like Black Shirts,  started the Bhonsala Military School in Nasik in 1937 for imparting paramilitary training to RSS cadres and Hindutva goons under the management of Central Hindu Military Education Society.  In fact, Bhonsala School’s links with terroristic actions by Hindutva extremist groups including 2008 Malegaon blasts had been known to Maharashtra Anti-Terror Squad led by Hemant Karkare. Now after the ascendance of Modi.2, the RSS initiative to start Army Schools on the model of Indian Military Schools to train children to become officers in Indian armed forces with effect from April, 2020 directed towards open saffronisation of the entire Indian military apparatus should be seen as part of the qualitatively new trends linked with RSS directly taking India’s reins in its own hands.

Meanwhile, as a fascist organisation espousing Hitler’s Aryan racial puritanism and white supremacy together with genocidal hatred towards Muslims in a predominantly brown-skinned India and with extreme servility to British imperialism, from the very beginning, the RSS totally distanced itself from the independence movement, and hence remained outside the Indian political mainstream for a long period. As a brahmanical Hindu supremacist organisation, the RSS vehemently opposed the adoption of Indian Constitution and suggested ‘Manu Smriti’ (the sacred book of chaturvarnya or varna system) in its place on the ground that a Republican Constitution would give equality to all castes.  Being banned three times as a terrorist organisation, it was its ‘laudable action’ during Indira Gandhi’s Emergency that enabled its entry into the mainstream politics. Since then, leading the ‘Sangh Parivar’ composed of hundreds of secret and open, militant terrorist outfits and widening and deepening itself across space and time and with its far or ultra-right economic philosophy and unwavering allegiance to US imperialism that leads the imperialist camp, today RSS has grown into the biggest fascist organisation in the world with innumerable overseas saffron extensions and affiliates backed by immense corporate funding.

Revealingly, RSS’ sudden shoot-up from relative obscurity to the political lime-light in mid-1970s is coterminous with imperialism’s transition to neoliberalism in the context of its first biggest postwar crisis. And, as a manifestation of the mounting neo-colonial plunder and consequent increasing integration of India with imperialist capital, by 1970s, India was also in the grip of an unprecedented political-economic instability aggravating all the contradictions in the country and Indira Gandhi’s proclamation of Emergency in 1975 was comprador Indian state’s response to this crisis. In view of Indira Gandhi’s alliance with Soviet Union at that time, it was also convenient for RSS to carry on its anti-Emergency campaign with US backing.  Obviously, lifting of Emergency and Indira Gandhi’s return to power in 1980 was immediately followed by India’s abject surrender to US diktats through a huge Extended Fund Facility loan from IMF with stringent conditionalities. It was during this extremely crisis-ridden period of India that the far-right fascistic RSS designed its well-thought-out strategy of occupying Indian state power by floating BJP as its political party. In the ensuing period, it was effectively taking advantage of the facilitating role of the soft-Hindutva Congress that RSS, the electoral machine of BJP transformed the latter into India’s biggest ruling class party within a relatively short span of time.

And, with the entire trajectory of this long drawn-out process marked by such landmarks as the beginning of the Ram Janmabhoomi movement after the assassination of Indira Gandhi in 1984, demolition of Babri Masjid in 1992, Vajpayee-led government in the late 1990s, Gujarat Pogrom in 2002, the ascendancy Modi regime in 2014 followed by its reiteration as Modi.2 in 2019, the fascistisation has reached a qualitatively new stage in India. With Modi.2, in continuation of the saffronisation of all the constitutional, administrative and institutional structures required for a fascist transformation already underway, RSS is now moving towards its ultimate goal of establishing Hindu Rashtra, which is an intolerant theocratic state unequivocally defined by M S Golwalkar in 1939 in his magnum opus, ‘We, Our Nationhood Defined’. For instance, under its corporate-saffron raj of Modi.2 is blatantly unveiling itself as a typical fascist state acquiring all the requisite features of a majoritarian Hindu Rashtra firmly adhering to the process of forcible integration of Kashmir into Indian Union, superimposition of Hindu code under the euphemism of uniform civil code, construction of Ram Temple at the site of Babri Masjid and even making Muslims as second class citizens by amending the Citizenship Act itself. All other specificities of corporate saffron fascism such as anti-Muslimness, pan-Indian homogenizing drive subjugating the oppressed caste organisations aimed at integrating them into Hindutva, rejection of all values of modernity such as rational-scientific thinking, fostering the cult of tradition and obscurantism, treating dissent and disagreement as treason, worship of heroism and elitism, anti-communism and an uncompromising integration with corporate finance capital are to be analysed in the proper perspective.

And, in this whole course of transformation that propelled RSS to wielding Indian state power, a neoliberal process spanning almost a quarter century, the soft-Hindutva Congress had been faithfully playing second fiddle to the former without any let up. After her return to power in 1980, Indira Gandhi totally reversed her earlier approach towards Sangh Parivar. After her assassination, her son Rajiv Gandhi who ascended to power provided facilities to Hindutva forces for performing shilanyas at the disputed site where Babri Masjid was located. In the series of highly venomous and violent saffron offensives and communal riots that ensued since 1984 such as the ‘Liberation of Ayodhya’ campaign by Dharam Sansad, formation of Bajrang Dal and Durga Vahini as aggressive Hindutva militant organisations respectively for young men and women, etc., the Congress while remaining a mute spectator, also tried to cash in Hindu sentiments for electoral gains. It extended all facilities to VHP to collect Ram Shilas for the foundation of Ram Mandir at Ayodhya and even allowed it to lay foundation stone of Ram Mandir in 1989. The Congress government pursued the same soft Hindutva approach when the VHP organised a number of international conferences since mid-1980s for rallying Hindutva expatriates around the idea of saffron consolidation. In the background of the Mandal agitations, though Advani’s Rathyatra was stopped in Bihar, with the connivance of the Congress regime, including communal riots in many parts of India, immense damage had already been done as was manifested in BJP winning Assembly elections in Gujarat, Rajasthan, MP, Bihar and UP. Quite logically, the Rao-Manmohan government that demolished the Nehruvian model and embraced full-fledged neoliberalism in 1991 also extended security cover for the demolition of Babri Masjid by Hindutva goons in the next year. By that time RSS had succeeded in converting Ram into a political symbol for capturing state power.  And the ten-year UPA regime in its relentless pursuit of soft-Hindutva did nothing to bring the perpetrators of Gujarat Pogrom before law even as US denied visa to Modi for ten years due to this. To be precise, while the soft Hindutva pursued by the Congress totally devastated it, the RSS-led BJP with its hard Hindutva became the ultimate victor.

This understanding on Indian fascism is also fully in accord with the specific historical factors and concrete political conditions of the country. It is a fundamental Marxist approach that any social phenomenon when develops further and transforms in a different social formation will inevitably adapt itself to the particularities and specificities of that context. Of course, fascism’s inseparable integration with the hegemony of corporate finance capital is its universal character. However, ascribing a universal pattern or form to the emergence of fascism for all situations is erroneous, and it will impede the building up of anti-fascist struggles too.  For instance, in his concluding speech at the 7th Comintern Congress that defined fascism with its firm foundations in finance capital, its General Secretary Dimitrov had also underlined different course of development of fascism in colonial and semi-colonial countries, and in these countries, according to him, “there can be no question of the kind of fascism that we are accustomed to see in Germany, Italy and other capitalist countries”, and for such countries he suggested an analysis of their specific economic, political and historical conditions based on which fascism may assume different forms. As such, communists can formulate the methods of resisting and defeating fascism in India only through an evaluation of the country-specific or national peculiarities that provide the fertile basis for the development of Hindutva fascism integrating itself with corporate finance capital today.

Viewed in this perspective, the specific feature of Indian fascism as embodied in the ideology of RSS is aggressive ‘Hindu nationalism’ or Hindutva aimed at the establishment of a Hindu theocratic state or Hindu Rashtra. But as is obvious, the content of this nationalism is at variance with classical fascism that waged aggressive wars for the protection of bourgeois national capitalist interests. In Afro-Asian-Latin American countries which have a long period of colonial and neo-colonial oppression, nationalism or patriotism must invariably be linked up with anti-colonial and anti-imperialist struggles and anti-imperialism is, therefore, an indispensable component of nationalism in these countries. On the other hand, neither in the colonial period nor in the postwar neo-colonial period, RSS has ever resorted to any genuine initiative for an independent national capitalist development. Rather, its entire history from the very inception has been that of betrayal of genuine nationalism. Even today its far-right economic orientation or affinity to neoliberal-corporatization is integrally linked up with its allegiance to US imperialism, leader of the neo-colonial global order. That is, its ‘cultural nationalism’ is only a camouflage for serving international finance capital. In this context, it would be in order, if we make a distinction between jingoistic and pseudo nationalism of RSS from that of the progressive and democratic national sentiment of the people which is directed against imperialism.  While the former is chauvinistic, jingoistic, exclusivist, divisive and reactionary that inevitably leads to fascism, in the present historical context, the latter is anti-imperialist and hence progressive, secular, democratic and inclusive consisting of the struggling unity of workers, peasants, women, dalits, adivasis, minorities and all oppressed.

A striking feature of Indian fascism that makes it all the more venomous is its shameless ideological orientation towards Brahmanical Hindutva supremacy. According to this ideology, vast majority of Indian people composed of the lower and oppressed castes are subhuman who deserve no civic or democratic rights. As a result, under Modi.2, on the one hand, most heinous atrocities on dalits and other oppressed castes are strengthening without any let up. Such atrocities manifested in the form of lynching, mass rape and ‘honour killings’  have even permeated to institutions of higher learning and research in the form ‘institutional murders’.  On the other, RSS is most opportunistically and cunningly utilising identity politics to carve out caste-based vote banks along with unleashing a process of forcible integration of the oppressed castes in to the Hindutva fold.  That is, pursuing an aggressive policy of saffronisation and divide and rule, the manuvadi RSS has also succeeded in deconstructing the various caste-based parties so as to submerge them in to the majoritarian saffron agenda.  Therefore, in the Indian context, along with sustained struggles against the foundations of corporate capital, building up effective resistance against the Brahmanical caste system through appropriate ideological and practical interventions such as caste annihilation movement is a major task of the anti-fascist movement that invariably encompasses economic, social and cultural dimensions.

In the 1930s when two imperialist regimes, Italy and Germany had embraced fascism, the Comintern and Soviet Union had been there giving ideological-political leadership to the anti-fascist struggle. On the other hand, today in Europe alone ten neo-fascist parties are in power, and backed by financial oligarchs they have also initiated steps for a pan-European fascist alliance against workers, migrants and refugees. Meanwhile, unlike the relatively nation-centred capital of the pre-war period when European fascism emerged, today finance capital has become internationalised. Consequently, in accordance with the complex dimensions of capital accumulation and the concomitant decay, parasitism and reaction associated with internationalisation of finance capital, 21st century fascism shall inevitably be several-fold oppressive and militaristic. On the other hand, on account of its ideological-political weakness, the communist movement today is not capable enough to take up the task of objectively evaluating and effectively challenging this fascist threat. The situation in India is also the same, though the specificities of Indian corporate-saffron fascism are different. Of particular importance here is the need of clarity on the constituents of an anti-fascist front or platform.

In this context, Dimitrov’s observations in his address to the 7th Congress of the Comintern is very relevant even today. For instance, he had been very sceptical of the involvement of the imperialist bourgeoisie as fascism was inherently connected with the bourgeois attempt to shore up plunder by changing the state-form of class domination. Another weakness pinpointed by him was the class collaborationist attitude of the social democrats. Later, Stalin himself endorsed this position of Dimitrov by pinpointing the weakness arising from the alliance with bourgeois regimes in the anti-fascist front of the 1930s. According to Stalin, at that time itself, the unique nature of accumulation under the hegemony of finance capital had made it difficult for the imperialists to adhere to a regime of bourgeois democracy.  He also characterised the reactionary character of social democracy as ‘moderate wing of fascism’ having affinity to the policies of financial oligarchs.  In fact, Stalin’s criticism was vindicated later when, in spite of the horrors of Hitler fascism, US imperialism under the camouflage of decolonisation and welfare state went on installing terrorist-fascist military regimes across many countries in accordance with the needs of neo-colonial expansion of finance capital in the immediate postwar period, an aspect already referred. 

 Today, the fascist offensive is taking place in the neoliberal context when corporate capital as represented by both imperialist and comprador bourgeoisie along with social democrats who are apologists of neoliberal policies has degenerated further together with the concomitant ideological-cultural challenges at the superstructure. In this context, the communists have to pay much attention in differentiating the sustainable friends of the anti-fascist front from its foes and win over the former (including progressive sections of social democrats) to the side of the struggle against neoliberal fascism. The Indian situation is such that along with the Congress which is in total disarray, other ruling class parties together with the social democratic leadership has already gone over to the side of neoliberal-corporatisation that forms the foundations of fascism today, even as the people are coming out against ruling regime in diverse forms. In this context, an anti-fascist offensive is to be initiated based on studying lessons from past experiences and concrete evaluation of the present. Thus, in continuation of the Political Resolution as adopted in the 11th Congress of our Party and taking into account the qualitative changes associated with Modi.2, the Central Committee (CC) has stressed the central role of the revolutionary unity of struggling left forces in the fight against corporate-saffron fascism.  The essential basis of such an initiative is the building up of mass movements and class struggle capable of imparting effective resistance against fascism in all its manifestations. To initiate this process, the CC has called for an open dialogue among the struggling left forces to explore the possibilities of developing mass political platforms based on common minimum program at the national and state levels encompassing both parliamentary and non-parliamentary struggles according to concrete conditions. This shall pave the way for a broad anti-fascist united platform at the all India level. Such an effort uniting with all progressive-democratic forces on the one hand, and isolating all reactionary sections who are allying with corporate-saffron fascism on the other, shall enable us to pursue our strive towards the goal of achieving genuine democracy for the people.  


Select References:-

  1. Georgi Dimitrov, Selected Works (www.
  2. Lenin, Left-Wing Communism: An Infantile Disorder
  3. James V Gregor, Interpretations of Fascism, Transactions Publishers, New Jersey, 1997
  4. John Bellamy Foster, Monopoly Capital at the Turn of the Century (www.
  5. Thomas Klikauer & Kathleen Webb Tunney “Rise of Saffron Power: Reflections on Indian Politics , Counter Currents, May 4, 2019   | 
  6. Red Dawn (MLKP), Issue 18-Winter 2018/19

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.