Imperialism is revealing its character — increasing parasitism: John Smith on imperialism

john smith imperialism

John Smith, former oil rig worker, bus driver, telecommunications engineer, longtime activist in the anti-war and Latin American solidarity movements, and author of Imperialism in the Twenty-First Century: Globalization, Super-Exploitation, and Capitalism’s Final Crisis (Monthly Review Press, January 2016), discusses the question of imperialism in the following interview taken by Farooque Chowdhury during July 2018-February 2019. The interview, in slightly abridged form, originally appeared on MR Online on March 19, 22, and 23, 2019.

The analyses, interpretations and observations made, the narratives presented, the terms used, and the way persons, politics, ideologies and trends characterized in the interview are completely of John Smith, and, those don’t always correspond to the interviewer’s opinion, interpretation, etc.

Following is the 2nd part of the four-part interview.

Q7: Is there any difference between the way imperialism behaved during the Cold War and the way it is behaving now? And, what is/are the reason/s if there’s any difference?

JS: An almost impenetrable thicket of myths and falsehoods surrounds the so-called Cold War, which was anything but cold for the billions of people who live in Africa, Asia and Latin America. The dominant narrative is that the war was between the “West”, led by the United States, which was trying to spread capitalism and democracy, and the “East” led by the Soviet Union, which was trying to spread socialism and communism. It is absurd to claim that the installation by the USA and its allies of countless bloodthirsty dictators from the Shah to Saddam to Somoza had anything to do with “spreading democracy”, but the first part of the dominant narrative is correct: the USA and its imperialist allies were indeed fighting a war to spread capitalism and crush any resistance to it. What is false is that the Soviet Union was trying to spread socialism and communism. On the contrary, time and again the fake revolutionaries who ruled the USSR provided crucial assistance to the imperialists. The Stalinist “stages” theory of history held that anti-capitalist revolutions were impossible in nations oppressed by imperialism — because the working class was too small and weak and because the task of the day was to abolish feudal and other pre-capitalist obstacles to the spread of capitalism — and its proponents argued that a protracted period of capitalist development was necessary before class contradictions in these nations could come to approximate those in the imperialist nations, and only then could the struggle for socialism could be put on the agenda. So, instead of leading struggles to bring revolutionary governments of workers and farmers to power, Moscow instructed the communist parties under its control to become junior partners in alliances with the supposedly progressive wing of the national bourgeoisie, leading to countless catastrophic defeats, Iran in 1953 and Indonesia in 1965 being two major examples. As Che Guevara said, “the indigenous bourgeoisies have lost all capacity to oppose imperialism — if they ever had any…. There are no other alternatives. Either a socialist revolution or a caricature of a revolution.”

It is notable that the only revolutionary victories during the so-called Cold War occurred under the leadership of communist parties that had broken at least partially from subservience to Moscow (Yugoslavia, China, Korea, Vietnam), or of revolutionary movements and parties that had never been in Moscow’s orbit in the first place (e.g. Cuba, Nicaragua, Algeria). Perhaps the most instructive example is that of Vietnam. At the Potsdam Conference in July 1945, the victors — Truman, Churchill (assisted by Labour Party leader Clement Attlee, whose election as Prime Minister of Britain was confirmed mid-conference) and Stalin, met to share out the spoils of victory. Hoping to continue the USSR’s wartime alliance with the supposed to be the antifascist, progressive wing of imperialism, Stalin agreed that France’s Indochinese colonies should be returned to their rightful owner, namely France.

In defiance of this, on September 2 1945, before half a million people gathered in Hanoi, Ho Chi Minh proclaimed an independent Democratic Republic of Vietnam — but nothing was done to prepare an appropriate welcome for imperialist troops (including 20,000 soldiers of the 20th Indian Division, part of the Indian army under Britain’s colonial command) sent to enforce the nefarious decision taken at Potsdam. Instead, acting under Moscow’s orders, the ICP leadership greeted the first contingents of British troops to arrive (on 12-13 September) with welcome banners and attempted to shake hands with their commander, General Gracey, but were contemptuously brushed aside. Gracey seized government buildings, declared martial law, freed Japanese prisoners of war, armed them and used them as a temporary police force until French military forces arrived to reinstate their colonial rule. Following this utterly avoidable disaster, the Vietnamese liberation forces resumed their struggle and pledged to never again subordinate their interests to the foreign policy of another power.

Vietnam in 1945 was far from the only time that Stalin acted as an accomplice to imperialism’s crimes. Vietnam’s history has similarities with Korea’s, which Stalin, Churchill and Roosevelt agreed should be also divided and placed under military occupation (at their notorious February 1945 meeting in Yalta) — leading to the Korean War, in which the US dropped more bombs than had been used by both sides in the Pacific theatre of World War II. By 1953, two and half million Koreans lay dead, but even this did not crush their resistance to imperialist occupation. Aided by some 300,000 soldiers from China (whose social revolution triumphed in 1949), Korea’s working people, led by Kim Il-Sung and the Korean Workers Party, inflicted the first ever military defeat upon the United States, for which they have never been forgiven and for which they continue to be cruelly punished.

Moscow’s official policy throughout the Cold War was “peaceful coexistence”, code for class collaboration, and can be understood as the continuation of its post-war betrayal of the Korean and Vietnamese outlined above (there are many other nations and peoples on this list, not least the Jews of Europe and the people of Palestine, both of whom were betrayed by Moscow’s anti-Semitism and by its connivance with the establishment of Israel in 1948).

These facts are not widely known, not even among left-wing and progressive forces, because neither liberal nor conservative opinion-formers have any interest in reminding us of these facts, and neither do those left-wing movements who have their origins in the Stalin-led ‘communist movement’.

The dominant mainstream narrative on the Cold War has yet to be seriously challenged; on the contrary, the truth is buried under more and more layers of rubbish. Yet only a moment’s thought is needed to see its absurdity and its deeply reactionary nature. The “East” in the East-West confrontation was Moscow, yet Moscow is, geographically speaking, part of the West, the eastern edge of white Europe. The real East is invisible in this risible, incredibly Eurocentric narrative, and the same fate of invisibility befalls the entire South: the North-South conflict, i.e. the struggle between imperialism and its colonies and neo-colonies, is entirely collapsed into the so-called East-West conflict. Liberation struggles and revolutionary movements from Asia to Africa to Latin America are regarded as mere pawns of Moscow, without grievances of their own, without any agency of their own — this is not only absurd, it is also transparently racist.

Only by exposing the lies that are contained in the term “Cold War” can I answer the question about whether there has been any change in imperialist behavior since it ended with the collapse of the Soviet Union in 1991. Just as the very notion of the Cold War is premised on falsehood, it is also false that the West won the Cold War. The collapse of the Soviet Union and the partial eclipse of the political forces that looked to Moscow for leadership has severely weakened an important prop of the imperialist world order. Far from inaugurating a unipolar world in which the USA and its imperialist allies could exercise untrammeled power, the post-Cold War world has seen accelerating chaos and disorder. The imperialists convinced themselves that they had won a great victory and celebrated by launching a series of wars in the Middle East and Central Asia, beginning with George Bush senior’s war on Iraq in 1991 in the immediate aftermath of the collapse of the Berlin wall. But their hubris led to overconfidence, and each and every military adventure they have undertaken since the end of the Cold War has led them into a quagmire of death, division and recrimination, with nothing resembling a victory in sight. Unfortunately, if the imperialists cannot be said to have won the Cold War, neither can it be said that victory belongs to their adversaries, the working class and oppressed peoples of the world. Victory never falls into our lap, it must be fought for. What’s lacking are revolutionary leaders of the caliber of Lenin, Che, Fidel, Grenada’s Maurice Bishop, Thomas Sankara of Burkina Faso and others, and political movements inspired by them, able to take advantage of the imperialists’ growing weakness and disarray.

Financialization and imperialism

Q8: Have monopoly finance capital and financialization impacted imperialism? And, how, if there’s any impact?

JS: We need some clarity about what these two terms mean. To take the first of them: as Lenin explained in Imperialism, the Highest Stage of Capitalism, monopoly finance capital is the result of two parallel processes that mark the transition to the imperialist stage of development: the process of concentration and centralization of capital, and the separation of ownership from management. The question, therefore, needs to be reformulated, because it suggests that monopoly finance capital is something external to imperialism, and exerts an impact on it from the outside. All of this underlines an essential point – when we talk about imperialism, we are not talking about imperialism in general, as it has existed throughout the ages, we are talking specifically about capitalist imperialism, the imperialist stage of capitalist development. Monopoly finance capital didn’t exist when Sargon the Great built the Akkadian empire in Mesopotamia 4,300 years ago, or 500 years ago when the Mughal kings unified the Indian subcontinent!

Financialization can be defined in different ways, but at its most basic it refers, in the words of John Bellamy Foster, to “the shift in gravity of economic activity from production (and even from much of the growing service sector) to finance” (see, where you will also see an excellent discussion of the origin of this term). So, financialization pertains to the sphere of circulation, where titles of ownership are exchanged but where nothing is produced. Yet the “shift in the gravity of economic activity” that John Bellamy Foster talks about is manifested in the fact that banking, insurance and other financial activities make up an ever-growing portion of the GDP of imperialist countries — which just goes to show that what bourgeois economists call “gross domestic product” has less and less connection with what is actually produced within a domestic economy.

With the notable exception of the Monthly Review school, recent studies of this phenomenon by avowedly Marxist and left-Keynesian economists attempt to theorize financialization in isolation from the transformations that have taken place in the sphere of production, especially the globalization of production processes and their large-scale relocation to low-wage countries. This is a serious flaw, but not so surprising, since these same schools of thought deny the centrality or even existence of imperialism. Nevertheless, many of these studies do shed light on the complex processes that make up this important phenomenon, especially the financiers’ ingenuity in converting hypothetical future income streams into present-day wealth, thereby generating vast quantities of what Karl Marx called fictitious capital, that is, financial assets whose value is disconnected from the actual productive activity (if any) they give title to.

Debt is the principal tool used to accomplish this. As Martin Wolf said shortly after the beginning of the financial crisis (Financial Times, April 1, 2008), “Between its low in the first quarter of 1982 and its high in the second quarter of 2007, the share of the financial sector’s profits in US gross domestic product rose more than six-fold. Behind this boom was an economy-wide rise in leverage [debt-financed investment]. Leverage was the philosopher’s stone that turned economic lead into financial gold. Attempts to reduce it now risk turning the gold back into lead again.” Yet the attempts to reduce debt that Wolf speaks of have been feeble, to say the least — according to the International Institute of Finance, aggregate debt (that is, sovereign, corporate and domestic debt) now stands at 320% of global GDP, compared to 270% on the eve of the global financial crisis in 2007. What’s more, some especially risky categories of debt are growing much faster, in particular, debt owed by private non-financial corporations in so-called “emerging economies”, who have been tempted by historically low interest rates. We can be certain that the next financial crisis — and there surely is one waiting for us around the corner — will wreak its havoc far beyond Europe and North America, where its effects were concentrated post-2007.

So, to answer your question, once again it’s not a matter of financialization impacting upon imperialism, but of imperialism revealing its own essential character — its increasing parasitism, i.e. the ever-greater importance of monopoly rents of all kinds and of rent-seeking behavior versus unmediated profit-making from productive activities.

Q 9: Is it possible to differentiate monopoly finance capital and imperialist capital? Or, is there any need/requirement to make the differentiation for studying imperialism?

JS: I think it follows from my answers to earlier questions that “monopoly finance capital” and “imperialist capital” are synonymous. More important than the labels themselves are the meanings we attach to them, this depends on the context in which they are used, on what else we say. Technical terms and the names of theoretical concepts can all too easily be used to mystify rather than to clarify, to impress rather than to express.

[Part 2 concludes.]

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