Imperialism Today – P J James

07 February 2017


THE fact that everything is subject to constant change is applicable to the phenomenon of imperialism too. 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 neo-liberal 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 neo-colonial 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. As such, till the 1970s, neocolonialism was pursued under the camouflage of international Keynesianism that, unlike the thirties, avoided violent interruptions of financial speculation thereby also yielding 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 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.

As is obvious, 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 profusely used to hoodwink world people. 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” with state regulation was also advanced by imperialist theoreticians. 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. Defying the central logic of Keynesianism, the US, followed by Britain and others, started facing rampant inflation, collapse of industrial production and employment. The unhindered financial expansion associated with international Keynesianism though flourished along with an increase in production during the initial years of postwar boom, the financial growth later 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, gathered further strength and 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 utilizing effectively utilizing the ideological setbacks of the Left on the one hand, and breakthroughs in information and communication technologies (ICT) and digitization since the turn of the 21st century on the other. Once relieved of all Keynesian state controls and regulations, the essential characteristics of finance capital such as speculation, decay and parasitism as identified by Lenin have started bouncing back with intensified vigour through what is called financial globalization. The financialization/corporatization 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

THE major trends of contemporary imperialism situated above have certain well-defined characteristics that make it qualitatively different from its colonial phase.

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. An academic analysis of imperialism based on a mere parroting of quotations from Marx or Lenin is unable to reveal this reality. For instance, 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., exploit Latin American, African and Asian workers, there are no reports of Brazilian, South African or Indian bourgeoisie participating in the 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 whose loyalty towards IMF, World Bank, WTO and similar other neocolonial-neoliberal institutions has always been stronger than that 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 neo-colonial 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 remains 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 has 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. Though protectionist tendencies are strong, the compulsions arising from globalization of commodity and financial markets have made it keen on the part of imperialism to keep dimensions of such rivalries under check so as to avoid a repetition of the “beggar-thy neighbour” policies, 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.

Globalization of finance capital or “financialization”

HOWEVER, since the stagflation of the 1970s and collapse of Keynesianism and removal of controls on speculative capital, internationalization of finance or financilization 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. No doubt, this accumulation of wealth by financial oligarchs and global inequality reaching hitherto unknown levels in the entire history capitalism, according to Marxist analysis, is invariably rooted in the extraction of surplus value from living labour. But in a situation where employment and mass consumption are going down (based on global data), development of cracks in the extraction of surplus value is inevitable. This specific crisis under financialization or “corporatization” is to be understood in relation to the transformation that has taken place in finance capital during the postwar neocolonial phase of imperialism. 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.

Obviously, there are definite limits for surplus value extraction trough financialization. As a greater proportion of surplus value is extracted from the workers and toiling masses through a whole set of complex financial processes, the purchasing power of the broad masses depreciates leading to the so called ‘realization crisis’. Ultimately, the profits from financial speculation are claims to the surplus value which is extracted from the working class. 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. That is, the root of the 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.


IN THE beginning 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 and 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 capital (at the sphere of both production and circulation) since the late 1960s. 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 finance capital in the 21st century and the domination by MNCs from imperialist countries is very striking in the sphere of digitization also. 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, it would be an exaggeration to interpret today’s imperialism as “informational imperialism” 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, etc. Suffice it to say that an objective analysis of digitization as the newest frontier of contemporary imperialism from the Marxist perspective is indispensable for the proletariat.

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. 

Select References

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)


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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.