Pee eee er) ‘The Age of. Imperialism peeee ieee tte Seater eho ‘The Economics of US, Foreign Policy PeUeresseeeeeteeers Cee cerse es? SEER MURR COLE Se ee eee Even if like many citizens of the United States, he is dis satisfied with his countrys foreign policy, he may believe thatthe United States is guilty only of bungling, of misguided righteous nest, or ofa too ardent concern to police the world in the intareste Pent cece ee sa ee ete eet ene een ee peratives of a rapidly expanding American Empire. ‘We ate now clearly on the verge of a rediscovery of imper lism, The end of imperialism was announced by a generation of” ‘Panglossan scholars unduly impressed by the winning of poliied!’ eee eee ee a eee ee Peete ec ee ea eer er ee the United State economy. But now, after Viemam, the Di Ey aire op ment ter oe ee ean 77 the new historians about the origins of the-cold war, the earch ee eee een ae Seer a ts i eae nn a ad En kh hia bat ah!THE AGE OF IMPERIALISMHarry Magdoft THE AGE OF IMPERIALISM The Economics of U.S. Foreign PolicyTa Beatrice for the bet of recone WAIL Rights Reserved i {Library of Congress Catalog Card Nomber: 19788 Contents 1 Introduction 8 ‘The Financial Network or Aid and Tride us US, Economy i Appendix A 203 Appendix Bhe rider fran; i thal t niry intecnatonehit oe are they by ebureterest 1 INTRODUCTION “The cauys presented here were writen in reponse to quesdons sted epetedly ding and after lectures given at Vario calle Bewildered by the fury irrationality, and horror of the cecalaton ofthe war in Vitam, many dents began to probe for canes Is the war part of a mote general and content tchsne of Unied Sates exteroal pols or isi an aberration fis particular group of men in power? Sirushing Side propagaadisic arguments about higher moray and a threat notional security, iagiring sudents were inlined to weck hidden motive. Pesaps, some though here were ial raw intro excepsomal busines opporini tics n South Vietnam that ght explain the tensity a snge- tnindedase of the United Sates governments headlong couse tf conquest. Finding no deanct or adequate anzwer along tht Hg, sme were led t attempt a more greral agement of the ‘Staton in Southeast Asn, From this eae the hypothesis that ie Vietoam War woo port of a more general Unicel States srategy compored of several elements 1) A United States drive to control and inflaence al of Southeast Ada, an area conaining over 200 milion souls and tne ad half milion square mies of tetory. Here the stake ce ma es a(2)-A nnltary decion to ctabish a song and reliable base fn South Viewam, where Iuge stores of equipment and supplies could be acculated and military manpower stationed 3), Use of sch a itary Bae, on or near the cost and Jos to North Vietnam, asa source of power not only for con tel and inflence overall of Soatheat As, but slo as part of wr ion tng around the People's Republic of Ching andthe Democratic Republic of Vietany Thit would serve nt only aaa threst but asa staging area in case of land war agains This type of thinking, considered again the hist ofthe CCold War, ed the more sophisticated to a broader aren of in qi: Te the taproot of United States policy pezaps to be found in a modera imperialan, in exptaom as an expansion ist aeten? But eve they were stumped again. The imperaizm hype seeted to be ia conflict wit the commonly seeepted tion the cexports and fren vette are non ken inthe overall U.S. economy.” Cosh thi apparent contradiction berenved? Tee the existing economic Heratare was nt of much help {es tre that economists have in revent years Been paying more sttetion to lateratons) economic afany pecially on sch Matters asthe Balance of poyment, god, fori ad, Interna onal wade, and the problems of underdeveloped count Neverthlen, apart froma groving lerature on the legal and ‘ministrative aspects of ternational ines inestment which ‘mainly concerted with practical busines mater, very itl ty hasbeen devoted othe relation between the dames aod {iterations econamise. Economic thoorsts a a rule have re franc fom analysing the United States se a world economic Dower or sping the county as pst of the world capital “A suing example of the way this ie i sidestepped is provided by John Kenneth Galbraith’ magnum opus The New Todutrat Site. Here Galrath beldly steps to break new {gonad and is ot ibid by sceopted orthodony fern a Secs erected eek ee te ere snl isthe concep of U.S economy dominared bean expos he tee cet oe epa Usr eaesiialenes omic and political aflais, and the imperative need thet soursavalrayomatera andthe athe, Yet coe would ‘over now from Calesils Book that these corporations have reign economic intersts despite the fact, documented be Tom, tht foreign sues of raw materiale and foreign market for roduc are a siguieant and growing component of the bine activity of the gant corporatione Not onli this aspect, ignored in Galbral' teatient of the corporation, bot tit ‘ignored alo in Bis diewston ofthe relationship bee corpo at intern ferignmalitary poly. On the ater, he mph ar the srmtegie ree of milly expenditire ithe growth sid scuy ofthe gant firms tone will nt find a word on the foreign involvement of the gant earporatons—even though Cana’ theoretical framework, bait around the imperatives of corporate control ver raw mates and market, cies ont bee The repeated questions of students about the anomaly of an “ian” economy and an agureive Intemational for ‘gn poly related the sbunce of such Inguies by erhodox ‘cholate or even by iberal and radical scil eres. It was bth the sgiicance of the quetions posed and the sholary acim which prompted the sais publabed ere. An nation {0 ‘Eve a paper on imperil to the econd Socialist Scholars Conference held in New Yorkin September, 1956, provided ‘he ocean for presenting poblily the fat rete ef the sere for an answer to this question. (A revised version of this paper, she in the Nenerber, 1965, fie of Monthy Revie, i printed here as ChaperV-) The primary tak as to gather and evaluate enough facts o tet the alma unieral assumption that foreign economic activites area sal, even ign, element in U.S. business intents: What do tha facts sho? The anaes, i seem © ey umamiaguovs: the prevatlg stitpons are fae. The ric of the materi general file to rengrie the fl ipct of foreign investment to understand that while the export lal lteter ree ee ect ‘nd manufacturing much smaller chan export in ay given Bee ak esol et es cee gar annual amount of commedity and capital export the effect Of the accurlaton of foreign investments i overlooked. Ex parts of commodities, in conta with exports of capital, repre ey fe oO vente eee ‘his flow from the output of plants located in the United States. The flow has tobe renewed each year: In yen flow abroad Delonge tothe pat; new sales mast be sought for thie years product. Tavestments moving abr, in contrat build up a sack of investment. An invetment in plan and equipment abroad ‘mains abroad forever and ever, unles the ene enterprise it rently wld, coniteted, or atin the case of mierl, atl ‘he natural resource ir finally exhausted. But a Jong 2s the Insincs invetnet exis ahr and there are marie for fs bray the exes spepetnting Te pecs of te Product wold incide, in addon to pris and the cats of Tabor and raw material, deprecation of capital (or depletion af reerves). Th funds are continualy generated ct only for “cteral” profits but also “eternal” replacment of wed-ap equipment and/or the exploation of new mineral sauces And af course each new inveiment flowing abroad adds to the "permanent stock of invextent Ample arithmetic lateation may help to explin this point Asume that US. corporations invest $5 billion abroad ‘ach year Amume, Frtber, that for very $5 bli of inves rent tr resonable to expect $10 billon of product or §2 of product manufactured each year wich $1 of nal invextment {plant and cqupment). Then we would git the folloning rev ena “Socket Reng om 3 sé 106 ra peel nae eet 58 bili, from which $10 bilan of preducts are avalable for le each year. In the second year, he adltional flow of $5. billion would be added to the previous yea’ investment. Now we have a accumulated sock of $10 billion. The plat ad ulpment with which $20 blin of new products cam be peo- ‘cet annually. By the tenth yar, the accunlated ok reaches 1 invement of $50 illon, and the annval marketable pro icon becomes $100 filion ere we can se that if one apes of the clativey sal acof investment lowing abroad each yes, one mits the full meaning of the accumulated impact of such Savesment sity. I fllows that fone look on atthe sana value of mmodity and capital experts each year, the full impact of United Sttes busines abroad is disegarded, Amume that the annul ow of United States exports amounts to $25 bill su compare thie with theres of ten year of fori inv ‘ment af the annual rate of 6 bilion, as shown ia our sts on: the sara fori basnes resung from the accumlated ck of invesiment amounts 49 $100 ilion, or four times exe This way of looking at US, foreign busines adds a new mension to ou understanding of the extent of the county's orig sconemie involrement, providing the frameovork forthe camination in what follows of the magnitude of foreign sales, inveatmenty and the flow of pits renaing from thee invesTHE AGE OF IMPERIALISM But our intrest not only in the Size of foreign exoncmie involvements; it allo necewary 0 ack bow imporant thee ‘cle are forthe domes exnomy. I we think in ters af fn arithmetic eaiy we ean ee that thu far we have been die sing only the numerator What do we use fora denominator? Hae oad wel ecemmier srstopreel ated tae ‘commonly accepted way of thinking abou sich mater. A cu tomary way of messing sgieance in economies afi i fompare variables under examination withthe Gross National Prodct (GNP). Its pastclar segment of the economy meas ur up argo proportion ofthe GNP, tuo facto sumed 1a be important. Conversely, ifthe ratio to the GNP is sal, then the parila eon measured x umsllycondered ot in Pinte weakness ofthis ype of attic et that doesnot Afferent between the strategie and the nonstate sectors ‘of the economy, elween the dependent and the independent ‘ariables, betwen the arivtes that create » agp product fd there that are ivelved in tliing the suplos. (For an Undentanding of thie question, the reader shuld const Pa A. Baran and Paul Mc Sweesy, Monopoly Capital, New York, 1065.) Hlve ii slice to note thatthe procedute followed ‘1 to marrow down the befor cralaaing the relative sigal ‘ance of forign economic activity so thatthe later was core Tate with comparable scr of the desi economy. Tn add tn, special account wat taken of uch stele sectors as the "The elting analyse of the available fats hows that there Je 2 cw pall betwen, onthe one hand, the aggresive “indireiy)as mucho thesgabe a panibisnd, onthe other hand, an energetic international expansion pobcy of US. nag The denemeraon o thi pele of une dos not rove tt one the case of theater. What it docs sugges is se 8 is simply wre international « nto asume that the US, econny is thi follows tat the apeead of U.S. prrtant conection im any hypoth attempting to explain egos on inthe world today Tn order to undentand the main past and potential future tread, we need to ort oot the more important influence fom the malliuce of variable, Howese, attempting to arve at ple dngh-came Fila ttre Cte thaa tot saves at 8 Stat jacket on the advance of knowledge Ta the cae of in Pelalien, we have, at one exttems, teers who look to some Chive in man's mate or ta form of socal stvina to exe sin the phenomenon as a continuous and coatant force in Fisiory. Ths, we have > competent an economic hiolan at Profesor Dovid S. Landes explains Te set me that one Bat wo Tak a npn asl fxn aie 8 coon oppor hat cots ely fied, people and group hate boo realy to ake advantage of Se ea rere Pu oer pple Sound orto ave Wer malo "i Wem, This lterpetation, coret or incorrect, at so high a level of alstracton that it contibutes nothing to on under Standing of hatorial ferences in types and. purpoca of ag- treson abd expansion. Iti ent ievan, for example, © fn explanation of the historical expansion of capitalist society i = world system, or of why this expansion i acied th 2 growing dapaity of power between a few nations that are ‘xceptinaly ich and many naSone that are continaouly poor. AG the other extreme of the ovenimpllation spect is the “pure” econcmie impel formula, The earch for we ‘Shleted eteeet: eattee. eee sce al Serve as awl fypotbese in 3 large nomber of ses But it Wil fa Hane expect to find such for each and evry act of lcd and matary pli. A major reason why sich w crude hypthess docs not work is simply that Schatten The corr docs nec to weet Carefully every expendicare of fund aginst the prospect f 1covering the funds and making a wraghtfor profit ina reson thle period of tine. Goverment, onthe ether hand, are not reticed by the same Hid of budgetary considerate they fn tax, prt money, and raise the peli deb. There are of ‘ne limits evento these expenditures, but they arise from the cours of the whole economy and net from those of given ‘poration or «group of corporations "The rationale of goverment spending has no rexrblance a iPad eo crc Pee ete hele {government tay wis to have appear that they do, A gore ‘ent can spend bilions (wih revenae called from the pops Taton at & whole) to dominate a benanaproducing eruntry cen though the reslking contre potets profs in the rion for nly one or two corporations. But the realty of imperialism is fat beyond the immeiate interest of this or tat Investor the undesving purpose is nothing le than keeping as mach as pase of the fre there are competing inter between the buses erganiztions af different counties, the alm af each governments policy i to beep extending i fr sign inflence. The dmeion of the contre will vy, rom mil tary ocepation to informal wpheresofdluence techniques, de pending on circumstances and the judgment of pba! and miley leaders on what ort realiie under the cireunstanes ‘When al dhe factors are ken into account cl be seen that ates to explain iolted action in "bookseping” terms rake no sense, Small Latin American countries that produce Feltely itd profit are important in United Stats poicyae ing teenie coal ero Latin Areca & boports ‘against social revelation, but even beease is vote inthe: UN “Mone Undertcod in these terms, the king and destruction in Vietnam and the expenditure of vat suns of money are ot balanced in the ees of US. poly makers agias profitable ‘asinas opportunites in Vietnam; rather they sre weighed 8c cording to te judgment of miltary and polite Ieader on what fs necemary to control and influence Asia and especial Southeast Aaa, inorder to keep the ete area within the im Dealt stem tn general, and within the United Sexes aphere 2rafenee in paral. ‘The same type of thinking that approaches the concept of cconomic impesianm in the resucted Balancoaher sense a {iy abo confines the term 19 control (rector indirect) by at industrial power over a underdeveloped county. Such a limi tation ignores the esental featre of the new imperil thet fries in the late nineteenth century: the-eompetve-strrglen The structural lfference which disinguishes the new ime pal from the ol ithe replacement of an econay in ‘hich mang firms compete by one in which» Randel of gant ‘omporstions in each industry compete, Further, diving tha ted te advance Gf tameperston ate Commeeteation eh ‘ology and the challenge to England by the newer indostal ma ‘ious brought two adatonal features to the perils sage these crcamsances, the competion among groups of ant Cerporations and their gvernents taker place over the entre abe: Inthe markets ofthe advanced nations se well atin hase Sf de semiindostiained and. nonsndustinkaed mations. The eugae for power by the industrialized nations fr colonial and Informal control over the ecomomy backward regions i bit one phase of this ecoamic war and only one stbate of the The nations in the work! capital sytem have varying de res of strength and independence and the fckeying for power ‘nd contol extends thoughout the sytem—among the big as ‘well an the anal, among the relatively ich a4 well st among ‘he. reaively poor. Cirsamsesbing imperaiioe Yo marly ope Ccatons jn the underdeveloped world indeed sisage when re cansidere the conastency of Germany's aims with respect © other European nations during wo world ware! ogra,THE AGE OF IMPERIALISM nnie and control induced 8 wells nonndana tllons to serve the nents of an expanding Germag capital ‘Nowadays its frequently ssid thatthe greater involves by United States capital in Wesem Europe, at contrasted vil sin the underdeveloped count, is evidence of a ‘epartre frm inptialm. Ths view is of eoune untenable fone recogni that aatagonien between unevenly. developing dustrial centers the Bb ofthe imperial whed Wht thee i an additional penpectve with which US capital expumion in lher advanced nations should be vical The higher standard f living and the great amount of capital sccumulaed fa Wstern Eucope ae rooted in pat nd pret ‘vantages obtained by the later ava through exploitation of Colonial and neo-olonial counties By penetsting the meto politan centen of Europe U.S. capital skins off part of the eae eee fret (0) ta ale eer oer ‘Westem Europe and (b) the opporeuty to trade trough chan 1s developed by the metropolitan centers a her rations with thei dependencies. Here an analogy with the days of piracy fay Bat when certain corepenéars ade the vg by ee ngon the wealth of ian nd cons fr from the retropatan vers Now imagine at entepreneur who oute a stip for the parpore of hacking pirate thipe thot are retrain 1 the ome country. Js the investment in the ater enterprise any less dependent on pracy tan Ghat of the egal pate? In dhl seme, it should be noted that the extensive investment by the USS petroleum industry in West Europe (ox Chapter I, Table XII] bang eprofte-byrefining- and dahil pore from the Mile Ee Senet eee ec more Tadkrous versions af theses pete Aa curt acter AiG in an emay by Profesor Mark Blu on "Econonie Imperial Revisted” Among other things, Profesor Blaug sabes what te conden to be u devataling refutation of the notion that spit) is induced by enter profit opportunites mesic inthe Pesan Gul ea ih a 20 preat i conta Here we se the formula mentality in fll boo. Des pees cher eRe es the Penisn Golf ate oo high hardly meana that an additonal ‘uit of investment wil erate an equivalent reture of profit ‘Once a given source of il is tapped and the most licient am deci soatianenmiee dude competion: from geting Bold of oll reserves). After fectin point reached, addon nvestnents wouldnt yl ‘tenadteditatofretar. This contreet on further vet is pascal pronnanced when, aa in the cil nde, there is such a high degre of concenraan of ownership of ol leases his fot of elementary busines consderaon apples to many sitiom. ‘Thy once a raleed line bul abzobing all he syllable feght and passenger trafic between two pointy the aon of lines would be fratlew no matice how profitable the vigil investment may be rofewor Bnig was apparently more iterated in denying the exitence of Imperialism than im eying to ondersand te nature. Ihe Bad been inteeted in exploring the significance the facts he ited, he would bave addcosed ine to such Suesons ate‘ Why i i that there ae not sigiant prota pportontes for US. capital in the eran Gull ether tha in i? Why i it chat a region that can produce such hoge roiTHE AGE OF IMPERIALISM ther stration of distortion by vse of unauiniatdl for unanaleed, face found In a chapter Ibaled "Te Amesiea Imperial” in Barbara War's The Het at Bay. Among rea- tons given to dprve the notion cht the United Stats & im Pris, Miz Ward observes: "In the pat, Americans have fot sought to break deadlocks at home by conqueing new fares abrond. On the contrary, they have oxt lending and foreign tang to the bone,"* The find setence of course dead tong and ie contra. ited by the ene course of United States economic ity Still, Mins Ward does preent dats to support her argument And this x what dhe abs: during the depresion years from 1909 to 1983, exports of merchanlise delned from $52 to $165 billion, and foreign lending declined from $2.7 to 804 Billo ‘But surly thee data do not subeanite the claim chat the United Sates “eit lending and foreign trade tothe bone.” The reduction in foreign trade and invesment was not voluntary Countermeasures to restate foreign trade were vgoromly pried, but they were fmpoent in face of the severity of the Aepresion. The reality of the early 1930's was a calpee of International trade failure of the world capitalist yer which trither copalss nor govermments were able to prevent. Fore ‘gn lending shrank ecane there were very few reliable bor rowers: over §22 bilon of forign pubic det was in defale in thee year, Siminly, there was no bass for msntaining, let Alone increasing, export trade Businewmen do net expat unless fete are foreign customers who have the wherewithal to pay farther purchases Sach caters didnot exit fn a period of relic cepreatc competed byw cieiegaion ol he Intemational payment tem. "These two eanmple by no mean exhaust the vaio fl- laces found in the Hterture on inpesaim. They were de- Tbcrately selected becouse they are in some ways representative ee eet teat telat os Ale mentary, face in dealing with economic theory a8 contrac wrth ecnomle practice, When dscusing theory we del with tacons and try to lsat the moe important forces mahing for change and development But in rel fe thse force are singled wi any others The real takin economic analy romp move intligety and comfortably back and for i the leap between the abtact and the con ‘and too extreme, without proper alletion tthe intermediate stages of analyse {ga ilastation, et ws fook athe prot motive a a seg tutor of busines actty. There ean be ite question that the tive for higher profit rates and a larger vohime of profi is the propeing fore of baie enterprise. Yet the met va Seal pease se lee te to creumstanes. Burnes profit strategy wil vary Between in suds, between paiods of pesperity and. periods of deprer ion, and between compeiive and menopolisic situation On the question of foreign investment by United States busines it is important to recognize the infuence othe ned ymamapie Sestype firms to-control raw material ounces. and markets i | cede to protect their dominant postion and to secure their “tvestent Even im thi content sme ems, beens ofthe me re oftheir busines wil adopt redmivelelongesrear pais HTne commen end mths various sae of core, growth of prafis, Neve eles, one would get ideading picture one narrowed down be ramus for the migration of cata to mercy sala Similar sictres need to be applied o the surplus capital soe that are often found in ct of pei, Te ome anes axiomatic tomy that capital moves abreed when dle funds find potable Smee invest outs and/or Droit opportuni ae greater broad than at ee, Ths abe fo the many afferent type of capil movement. Capital in ‘ceryday fs ot nla ose Ie pple from ferent sare inthe economy ad frequently abl for cody Suid aer=wisher-ert ac eres at eekDuiling «chemical plant. Té should abo be understood that ney pital coms of credit a well beac and therefore i Hes by the swing ofthe credit cycle. Thus ding ane Stcenionya production dealin andjecdit contracts a goed eater te surplos deappears and olization of expital be femes more dial The cftensepened thorn about foreign invesment a3 way ou of deprenion has validity if one recognizes that til {Ua one of the strategies onthe agenda ofthe busines com Bani which may ot may not be werkable acording to ci Timigncs If depres is worldvide and the international Tent ayer bas collapsed freien investment a an option wil ‘araly diaper from the sgeoda exept ast maybe ease gb off sme valuble mineral resource or buy up 2 weaker compet. uring the upward swing of the cl, the appearance of scp eapcty in domestic production raises the fue of fide inaterigh outlets for le capital; the acer part of these forcgn eutets may help to prolong the upward awing. This pple aot only tothe ele asa whale Bu to the ees of i ‘vidual indie a well. An example of the ater the sft Gf Engh, United. States) French, and German capital co fected wit the sallway industry fom one country to another. Wen dhe practal nit of raload building ws beng reached none coun, ules in another country were sought. The osu was ineasiied ax compton increase among the api- {exporting counts. What ate: tothe busines comm the tus nesssytem ate whole thatthe eprion of fnegn inseninen ier, ade) ahouldoremain evalableor this to be eine the buknes system requires, as 4 minimum, that the politcal and ccononie principles of capital shuld pre- nila that the door be flly open for Fregn capital at all TeMihcn tot, irscke a peleged open door fer the capital te one cottry in pretence to capital from competing fuse nado, How much or how Te an open door may pecipited at any ghen time ie ot the fe "The principle Bhat be maintained, pecially fr a exptait superpower Ike dhe United States ond pecially when itis being challenged a me ope Cin sion, who ites when some wal wise 2 bo dscovered and the patclar open door wil {Soto a sure of new tear?) antsaing the open dor cretes problems sme beste ee ecae of the ata at pocal wll econ eh tren to limite (oe Umi) expla apd fedem fr pete invest and trade Hct opening the dor a Pepin open sete cca wglnce tod wl power What Teh cee yond the sengt and pesence onthe ctw poron ha nthe in be aac reiien rt Seats eet ot ey aes wih bey ote Tet ella pet eee Dot eay nebo ppd on ae one an ht “rl Ace an envionment hoptable to foreign capital and Inport fd then tere ie the sbiqutous CTA. The abjeive-uaden inning ofthe tens falianes and conte semsine te marke Sod financal taons which reproduce the economic. depen ence ofthe ka advanced region om the mrpolitan cers Seon ti igh tere i eel er es tel miliy betes Tle 2 sist dhe topping ine song DOSE OOD Ieee oh soca and stata, and Burestae mca of gverent lcs sd the mitry ete. Bat the reuking dnd conceal with the eoice of sone andtactia on how best to amare the growth and expansion of th branes stem, how best to kep at much of the world fee fl vate enterprise and expecially for dat of the United State To get» beter understanding of al thi ts necessary stody the Ritorie origi of the imperialist sytem and to iden {fy the interelationship nro aspects ofthe econo fan! financal stracture ofthe United States on the one hand id the international economic activity of business aod. gover fenton the othr, This was the frametork of paper present to the third Socialist Scholars Conference (New York, Septem tex, 1967), onthe oxcesion of the SOth anniversary ofthe publ ation of Lenin's Fmperilom, The Highen Stage of Catlin greatly expanded venion of thi paper wae pubishe in the ate, October, and Nove, 1968, sues of Monthly Revit tnd fs reprinted here a Chapters I, I, and IV. The maloe Drpere of thee chapters to show the The contractions and tensions within the sem tare referred to otly incidentally. No atempt has ben made 10 {abject to anal iter the confit between val within the {stem or he tveatonary sung to weaken and elimina ink Drala, These exaje should. teefore be considered as an Intraduction to the sady of United Sater inpesalisn—pro- viding, Hopeful, a more significant framework than is us Tenlly avaiable for understanding the question and a pit of (epartre for farther invention, ‘Gare one compchends the _-patonal and: domes eenomie setae, one can begin to ‘engnie the lited alternatives under which the admits “tors of thesbuinesstemsoperntc. Students are not alone in Touring tht there i an almost ini range of alterontvs ‘Malla to'a democratic paliicl sytem, ao tat with reason, nsaginaton and good well eptakzn con rte 3 coe it cut impeim, Ar inereing istration of the thought peo- feos invelved in the irce Wil” or Hnides-aueratve, ap Drench fo be found in J. A. Hobson's important book on i Pinon, writen in 1902; sass aro cape of ndsisie expansion. Whateer i produced BY bigand ex be con Tent untra Secaue of the nner and ane eo eee i wie ta arty bas beat mc eae ‘ewe SPOS duno of econome rzouneey whith ba deed Bere tating foreign male the daa tesla had areal eee ele then J cducadon cod legato, epecallaticn in meu, resets fe ng elit progr weld tnd organising tent) foreign trade would have born bough mess sd the Hen of foro po pate weld ae een gh onl pret ff national Gonsumion would probably have even fl, constant, femmunesve smplyment for aa arger quay of pate and publi epial tian i now employed This sort of ify history umes much more than can be proven all ses had equal acc to land, wuld there have been a lange enough working cs to man the factories into ced by the instil revludon? And would capitals have fn trade or inland if thee bad not ben the opportunities ‘would the orginal accumulation of capital wed im industry have tr decried by Marx in Cepeal (Wal, Pare VIL)? Finally, where would the reproduction and growth of the needed capital for invetnent have come {tom i not from silfcently large profits niking inthe pers tion of enteric? rs, He posible to conceive an ideal situation where production and consumption canbe blancs, where “whatever & produced in England can be consumed in Eagland.” But ten Contrl instead of rellag the mnathetservemechaniam roi ‘sed bythe need for profit. In mast manulatorng indtres gre Call arged indusal gant alg up fer beter comptive strength ‘Ths, the path 1 independence for Wester Europe, to juice, and & socsh progres it Bie Government and ig sins fr economic wat with the United Stter rola, ‘Stade Geen the que: Ts imperial san? The point lam tsying to make here and in the anal prsened in the following chapters that such a question j off the mark. Impesaiim isnot a matter of choice fora capi ‘alt society; inthe wy of eof uch a sciry. feel ian Spin Tt Pry of del PRS Init sy ct (apc ns el 2 ‘THE NEW IMPERIALISM A focal point of Lenin's teary of imperai is the lasification of imperaisn a3 a pec sage tn the devlop- ‘nent of capitalism, arising towards the end ofthe 15th century. Tie atteopt to give imperial euch » specific historical reference date has been a subject of controversy, the main b> jection being that many of the features considered charctrac imperialism aze found ety in the game and throughout See Raa Sy Soa Sowne scholars get around this problem by diingsshing between an “la” and 2 “ew” inet. Whstever stant jevice i ued there ate good and aulfcet reasons for clearly marking ff « new period in the alr of world eapitlisn. Of he may dsnguishing fates of thi new sage, in 2) pinion, are decsives int, Engle i 0 longest puted leading induc poner. Strong indeed evale a Soe ame cours of cergy aad 8 nev depen ia cece, h Veblen called “the technology of phys and cheminy of nebs THE AGE OF IMPERIALISM “This isa technology that it based on the dineet application of science and scenic racer mther than on mere mechani Ingen. Ke was in the final 30 years of the 190 ceatary that ee eee ieee Poe el a ‘cies "pastry ih thenenignani, ectomageet, heme yas! poly ee ott op oad ee Pct eciea Cagineeingaadprtclsry in te pode {in of machined and i austin soto nt on wae ‘ew indiater developed and new sauces of power prone te ital eon engi, rng rom progres ip theta Sjmamice theory, beng arly lew npetant than oletc. Ta ae ee eee eal eet a fy Perum, concce are but's for ecampit— eforeet ard crfendcl, ntameatie Se pect a Soot te egies te opeeciee, oko, Oo Oa Siem lta pone sill ky alin aha {ipt lie It wor in Wa peviod that eghanaion fist Seca Gavaciaae Of nda © genaal '* Even more important than the techlogieal featur of this pend per wis that ths technology a4 Tule required i vestment of lage amounts of capital and lage prodsclaa uni The main developments that characerie the. tansfornat ccured in sted, deci, industrial chemistry, and oi" Ste, Stel has oniqne properties that are exeatal in th ‘easiecton of mackie ect my ole cmbusiod cage ‘cece generator, and steam tarbines. Tt war the introdctog of wel rls and Ioeometiver that made pesble th ot heavy loads at high speds. This reduced the cost of ca port and provided the mean for tanforming lea and resonall Pusneses into lange, national industie, Talore the application of sxenfic methods, sel wal pactcally a sem-predous metal. "Untl [ese Fath) procones were introduced eel making was karly snore than an enpitical craft operation. «The Besemer proce Inuoduced in 1854, sll bad Timiiatows forthe use of Hon or ‘allable in the United States and Europe, ‘The ope hearth method lawodice inthe 1850 and finaly the “Inu proce” ‘developed by Thomas and Gilchrist in 1875 made posible the coutet of the carbon content of see within very dose Re ,sorund opened up the age of sel. Techniques for im Feiss the proper of sel by we of alloys—io obtain the ‘Proje need for tol steel, armament and snes sec See developed between 1870 and 1913, Note that during the Wood! Te70-1874 am average of 1 milion tons of sel were Perce workide, during, 19001004, the anmal average Nerd prodvcuon had risen to over 27 malin toas* Hleticty, While sentiic experiments with deeticty and theoretical exploration of the subject go back to the 18th fentury, the epplcation of these experiments and theory ‘3 form 2 lsgescale industry occurs tard the end of the 19% century. The fist commercial generting stations in London, Dilan, and New York were opened in the 1880s, The im portance of clesriy ia not Emited to fe wie at anew source ight, het, and power. It is necessary, for example, in the refinement of copper and aluminum and the bulk production feawtc toda. (The invention of the proces for commer Production of slunlaum ali sems from this period, occuring fn 1805,) Tor manufacturing process in genera, the applica tion of elecly made porsble the kind of precise contol Which perited the more complete machatization on which moder masypreduction industry depends Industriel Chem. Chemical procetes in metallurgy, ning, and fermentation had been kabwn and wed for many ‘eavurea. But indutil ebemstry as a separate and legescale industry exgiates in the lat tind of the 19th century. Here sean the eaeformation due to theoretical and experimental sos n cence. The ably to syste orgie chemicals 'n indus process could not appear before the proper ander. Standing of themed tansformatont was achieved, Thr the bility to determine the comet amber of stoms in molec became poatble once there wat general recognition around 4060 of the law that equal volumes of gues under the same condos contain th same number of molralen. The elleesve conept ofthe structural serangereat of atoms in 2 mnleele ome in 1065. In contrast with te former alot acidentalsivanes in organic chemistry, the new scenic achievements ‘seated the bse for new mate prodactin industries, The Solvay fmmonta soda proces and the cxtalie procene forthe mam facture of sulphuric acd and of ammenin belong als tothe same period Oil Here we ae not desing 19 mach with technical an advances 8 with the ticovery and exploration of petroleum sure thoweh of course. technical Hivement are sgnificant both in the tech sland in petcuma efining. From tof view it shoul be noted tat large (quatites of ol were fint dicoverel in Penntania in 1889 Tae Standard Oil Company was founded in 1870. Diamond dilling, the effecve technique for piecing hard fommationg tras fis vented in 1054 and was inteduced in che United States in the 1870, “The ent hae of large ol dscovesie was concerned ith maionwie and interatonal datibuion stems fori ieee Dp ae fer te rninlacts of iba, Th intecton of elas fel i industry and transportation (lowe from Inter dcoveries of cil sources fat eaite maybe hese new phenomena were integral to the ait from capa ion charactered by digest Wh-oad in which lage conventions of econome power dominated the india ne finandalstene. How sgricant thee Ite sen centry tecnclogiel developments were in. accelerating monopolistic trends cane cen by examining the git expo ‘ons of tay: + OF the 50 largest indwtrialcorporatione in the United States today, 26 (accounting for 62 pereent of the tea set of the whale group) ae in ex, leseal equipment ‘hemi and sluminun © OF the 50 largest instal corporations in capital mite the United States, 90: (acounling for 7 percent of the tal aacts of the gimp) are in these sre The Rio of Big Basis (Our argument here ie not that the new technology de ‘cased the sz of the corporation and the monopole treads (hat azcompanied Big Busines. ‘Rather, the new teebuoogy yponided the Famework, and often the opportunity, for the {te nonnal tendencies of capital indy toward concent: ‘ie of power: For example, the transcontinental road. and St feedem created the posbiity for local manufacaren. © ‘Compete on a national sale, The overexpanson of production that roulied from. many local produces’ expanding thet fapacty to meet the enlarged markets rented. in ritles ompeion, fre, mergers and alianees familar pater ‘of busines history. ‘The transformation that tok place in the United States busines Ife during the onset af the imped seage ie well sumataraed by Profexor Chandi Ta de 10005, the mor dtc seni an songs, Except BE ES an Fri raed neuoet the lading Indeed me Prone Eqrelal produce nd provided fafon with ford and Cething ‘Tse ems anded tbe mal and bought thi ty materia sau old thee fed ends ely Where they manafactred for nga more than 4 few mike avay fom the factory they fe and sla throwgh eonmisioned’ agent who handled the ite of wer ther dar Be sb? ihe Sat of erent cnt, many, mor, com ‘ker shan on te far o by thule consumer, Mt of 2 "aor indy ha boone Sint by 2 fw lege eerie These grat indusal corporations no lnger purchased. and ok Uo agents but ey had ng wp nao wide Buying ane ulsing onan’ Many pessrly the the Cetictve yet he buna wannomy bad become india Major re mare deminte, by femsf tah bcome great, ‘Seay lead ented eatrren ange adel The Cll Wor wad be caled expats persis pporitity forthe maturation of powesul Bnancal ations “Gar could accumulate the capial sad onpanoe the merge that became what Chanlr denies at the “grat, verealy Integrated, cenalled enterprises The new technological ia Tovstions’dcused. above provided che mateal production™ THE AGE OF HPERIALISM Sates, Germany, Japan, Prance, Belgium, and others Thi induration occured ander Crewmetances in which eal éeatraton of economic power im large busines sit cigs tion of large moses of capital for parielar projec, growth of protective taf, anda wave of mltrianton" provi the framework for what was exentally new in the imperil ff the late 150 and 20h centuries Above all what wat ae Was the extension of imperialist behavior poems to most ine Aistrained mations Ie wns no longer Briain contol inter tational commerce, carving ut spheres of commer inae ace, and pling op a colony hee and thee: Intec, the econo and politcal opera Sons of clic opty mccll etree eters ee a ee Taba on modern soit. Unier the impets of this new impel no comer of the earth was lef untouched: the citire wold. way ra formed and adapted tothe needs ofthe new dominant indus in eich industrialized nation, ad tothe Fabry besween thal ations under the peemure of thee neds epmaton and Coos ‘The complex of economic and pole relations that aro from or were an scsommdation to thee epecaly new pl nomena encompass the paral ere, The change thus marked fff ir not an abropt one: i lowe dizey fram wel-ntrenchel fooled iabetet ins capil ormcry. Thc princes {entire i the concentration of economic pote in glant corpse ‘ions and financial naan, with he consequent nteman eee “The urge to dominate is integral to businew, REG abound in the busines worl, Internal and external compet Sion, rapid technologie! changes, depreiong to name bit & few, threaten not only the rate of peft ut the capital inv ‘ent ise. Busnes therefore ie alaye oa the lockout for af 2 contolig 1s envinment—toeliiate aa much it A posible. Tn indusuy’ after indo, the bate for survival hat ho beea a bate for conquest from whith the giant come tions ‘best fied for their environment have ererged. TRAE 9 and habia ate the ret of a proces of adaptation tothe Teale for survival and growth these ways and hits bave ee Tul nto their otganaationl stractuees an “dhe mat eins He require 1 aa ey anc collin a would of tough antagonits i to gain contol seer a8 much of the sources of raw materials a post ct tease eet ba eee iesioeagsinstpresre of competitors as veel) a8 weapon of oleae to keep nonintegrated competion in line. Ownerip ot and control over raw sas supplies mae a rule, an seni prerequite forthe abity of a leading fem of grup eadg Seg to Eat new competion and 46 contol po on ahd ps othe nd fos Moree the Vey roars to explere and develop potenal new spl trough ot the won" The Miter of te el indurtry i of course & cutaton, bt this pric apple alo the akan, ‘exh, coppes, ad. other indestes "Y2). The pattem of rest ssccesful manufactuing bus neossineudes Conquest of foreign market "This is #0 even where there is Lage an internal mavket es in the United Sates the mas market auto industry, for exanple, frig markeu exercised an important infucnce fom the est days ‘Ths sath Ford car bl was shipped to a Canadian ditt The Fort Motor Company in it fit yar of operation sare Taking arangement for ull up i foreign marke” Despite the very high rte of datnestie population increase od the opportunites svalable in the underdeveloped. tegions this county, the dive to develop exports of manufactures took foot during the very fin fs of industrial mari le ham a decade after the en of the Civil War. In 1871 ile 7 percent of United States exports costed of finite ‘oanufacares by 1890 this perce fone to alt 12 percent % 1900 almost 19 percent. The sicecton of depresionsinterally, asus of eolidatine and the move towards Big ‘Busines? excemaly, the eve © cage caper masks, i cling thoe of industazed Burope™ "The manic f thi ach for export markets vase ams of the busines cele What mist be tnestod ia ace the special gine forty to maltala the txpor’ makes. Lenn’ generalization on this point it ma Sppropriate: "The growth of atemal exchange, abd paral ip of tnternaonal exchange, the characte sung the development of inde enterpi ofndal beach of indunry snd indigo! counti einvinbe under saps stem." Tauign make are pure (with the id and au of the tate) 15 prove the promt rate nrcled to sain Tange nvesmint of caial_ando_eapla-nen~markeo runes In this procan, Ge dependence Eecomer-t permanent feature, for thee marke the sructireof india capaciy, Ta one pevod exports ma be the nly way out of anter; in anther they may be ti est way to maintain the flow of profi, Bot av the fing fate opie ces aay eae a of the buns fim, the presure to mninian thee fori Iy as competitor arrive on the seee* Tee Hone demontatin of this wis the for railway, which sinlted tthe mame time the demand [a al mee pay enamel oe osc we he Sed), and machine indie "But ths metodo penctratog ver mote prevalent in the age ofthe gla corporation, cha ‘Scterinel a tr byintencation of malonal sales, The Of foreign favezment to capture and expla sources of ‘materas is evident More than this though le the urgency af {vega ivestvent fo withstand the competion, orto pre-e foripa rcicis besa rane, in the counties where competitive corporate ants The freien corporate gant can swing ter own weight ta contig toir own donate ‘misty i Wait prt ‘Bena mare auch ancl, dependent “pheres Serrano ler eee eg ae tecive tril ad oer trae barre agai ide Fo The reason, the ably to compete in other counties and 10 rcs te Kind of mathe conta needed by the giant corp Son cll for a progam of foreign invent. The compet fom between coporte gins rane fuel cir in ari ar Sir the route of forcign investment. Marever, Bis pomedere comes more eae in the age hg Bates, hans fo the Inge ames of eapial avalible to fire corpomtons from har own profs or from what they ean mebiie in cooperation wih financial tone ‘The foregoing reson forthe spurt of fori investment In the age of iperalian are far fom exhausive. There nual the atescves of ice, roi ales ugh ‘line aantge ane tae ae OS ape, how The Chae Mashatan Bank ape in iformaton ge aes in South Kee in i reget ling othe topes for Kore’ economic growth cases ‘ fe tusnesanen cd fae who are aalable at ea wage rte. arene OOF 8 tte and 8a yi cntrone The buna Charnes = produce indus reais cag UIE as lowe cota ther apes snot ec the inflenes Mich more imporiant i te ques dele ‘ef satel cars cating denapd for pas slingaekantage “anon stuage Te eer are doe 1 Sat sdranag of Big Bates, clase patent peor {fitelogy on etened arte Sctad ite by era ent of deed brand vs slr promotion. Fal, orgaintent aries from the ese to eablish trade in market protected by tart walls or wade preferenes (United Stat fnvesment in Canada, for cample, # a convenient aranged ment for parcipating in Britis: Empire trade) ‘The cammonl hold notion tat the shor. of pera should be concerned argel- with investment in-underdevl ‘counties ist it connect: The fact Ie that profitable inven ment opportunites in such counts are lied by the veel ‘ondidens imposed by the operations of fnpeiali, Rest trartet demand aoe desl ackwardaes are predict oft Tepaded economic end roca) rrvctures asociated wilh th ‘randormation ofthese counties into supplier of raw material in food fer the metropaltan centre. Our parpore here is not to analyze exbavstively all th factor inolied in forcga investment. Rater, tit sugg that ther are clear reasons forthe pur of foreign invetne fa fh ge finials Crees Ofte opera ee een ete prereset eel End proper fantoning of bisnesr in te conditions cnfron ‘The patterns of these investments sould be examined In the Hmorial context, in Light of the actual sinations busine fi ea with, ac thn a the more wal tes ofan abetracti iiatceeg te pret of eaplen (4). The dive for fordgn. iveumont opporsmiies a ‘eat ever rege ents Peps te et et ponte oct eee ee ere ofthe 19th century aa the read of protective tarle™ Oth ‘alten was coal cenpliod ae val Essar in clearing the way to exercise mificient polls Influence in a foreign county to cbain privileged tsde pod tion to get ownership of mineral sight to remove obstacle foreign srado and invesment, to. open the. door to fore ok and other financial intuons which fcitate ccc entry and cccuptin. The degree aod type of plea! operation naturally val In weak outing tsxtarcs, clonal Sosipation i convene In somewhat diferent crcumstancey, bubery of ffcals rears (vn banks or sate inttions) are appropriate" Among (avin advanced counties, alisesr and interest groupe are ‘The caalt of thew developments i 2 new network of economic and politcal rations. The network it i shape and emphasis over Une as a reult of vam depresions, and diferental rates of indertlenSon The formu ao vy: clase seinen “a varcty of forme dependent countries comnts, which, ically, are palical: Y independent, bat which are in fact, meshed in the et of inane abd. dplomatie dependence," and jnior and ‘esi partes among the impersis:powers The significant tee teller depres of dependence in an ineratonal ‘treat of the bates among giant corporations over the word and the operatins of these carporalons along with thee Sie governments to maintain domination and contrel over ‘The ovenimplifeaion which ides imperam with doslalin pure and spe nthe soemibles Lena's the tor the fac ofthe cae Simian falcon the vero of {ins theary depron in emence themed of 2a of a up hes choke Sot i sr deed gh produce venmes The sage of Hage of Inperi, a we have ted to show, i foonla. Te defor clk & atone bats vel political and miliary comidcrntons ina werd o comping peri paves. Lieve, the presres bed topless for ll he waaton ef al coon and Tele chang nore ffl toseck oe, The special vale Lei’ theory the higlghng ofall the pina eres tht have moved ital economic rao Tie lr {25 onc ante then stge of monopoly td sal nas onopalyopenientoachion, Whee sawhenever feaibe, domination and control over sources of DY and over market The fact that thee are sil the pnp levers explains why the theory is sill relevant. Bot te pat ‘cule forms in wich these factor operate and become adap to new conditions requires continaous e-enaminaton, Modern Fests of Inperitom ‘The imperialism of today has sever distiny new fea tures, These are, in cur opinion’ (1). the bf of them ‘emphasis rom aly in carving up the world to the sea ‘gaint the contraction of the imptialst sytem; (2) the role of the United Stats as organiser and leader ofthe we imperialist sytem; and (3) thereof a techiology which international in character, 1) The Rusian Revolution marke the beginning of new phase. Belore the Second World War the main feat ‘were the expansion of imperial to cover te glebe, and conflicts among the powers forthe redtbution of ters apd spheres of faflaence After the Rustin Revelation a cement wat introduced into the competitive traggle’ the to reconguer that prt ofthe world whic Id oped out af mpesialit stem and the ned to prevent eter fom le the imperaistnetwork. With the nd of the Second. Wo ‘War, the expansion of the walt part of the world and th break-up of mest ofthe colonial sytem intensified the urge saving as much at posible of the imperast network reconguering the lat tei Conquest in thin comet fon diferent forms, depending on the circumstances” ml ‘nd. pocal as wel as economic. ‘While the insperi powers didnot give up the clon shady or easly, the main purpoes of clonialem fad achieved prior tothe new plieal independence the colo had been intertwined with the werld capitalist maven th resours, eonamiey and socks: had become adapted to need of the metopalian center. The creat tak of nica jm now became fo old on to a8 maty of the econo a financial benefits of tbee former clones as posible: And t pet SIT 250 ann tah opi cf coure meant coniston of the economic and financial depeneny of thse counts on te metopeltas emien Nahr nthe prod sgh alter the Rusia Revduion vor im our own day does the cit bjeave of ending sor defending the ones of imperisen sig the clea in of rants among the inperen poner Hower aise the ead of the Second Weld War tks canal sec te dominated the sene Dente of the incraing at fe imperase sptcm and Becnie ofthe gece sei omy Se power impaed by United Sate lesen ™ (2) Up tothe end of the Second Werld War pie and miltary operation in the imperlet world rota wo Sard on inthe tadonal method of allgument i bloe Compete interest in one Bae were tempore repose ee the sik of a oat elfen or Sense agate ane ae ‘oropoiton ofthese bse hanged one ne ard ie ced advantages sought Since 1945 the new poenicmsn fie ascmpin by the sited, State of leaden a these inperast sien. As'2 ret o 18 mating comme wed ally seg and te demcton ince 6 sl 6y Pe the Uniled Sates had the capacity and the Spporaae © erssize and lead the imperil nav of car Pr ig, orancng ofthe pemwar imperialist sem proceeded ough the medi of he lntmalonal gence eee {ia the ent of the vars the Used Nitons aa and the niratonal MoneiaryFand—in exh of heh {Be Untied State waa ale, for vow naan teak tang ele The gute was considated tovgh Us acs CL UNRRA, the Mantall Pan, ad the sever esate lay ad programs aanced a contol om Wahigras enItt 26 penpectve of Unled Sates leadeakip wer re few indety by Sectary of Sate Rank whee he ed ‘sion othe fact that the Unied Sater Monet ae rfldng oor national Inereas to internal incre fot fot ed stength andthe ot caesrocng to ised aeration (mpi added.) “The etic be Secretary of iat. Indeed, he is pro! of i 5, Think, a sign of stengthof oustrcagth of international law." Further, he cosines 9 9 fut the ambioor vista of United States Zregn policy But we know we cin 9 ger find weit sad el ell in dtenassod"plcie which afe confined t Norte Aner dhe Were Hopes, or tw North Adan roman. "ins ha become’ avery mal lance We havo to be on espa with sof id a of 1 ld, wate, store, a Ser aeeieg ea™ In view ofthe tations of the United Nation, stem from patpation of sociale count, the practical adminis tion of this glial and spatial concem was afected by as of treats and declarations civeing the nonsocait word Tse of thee innrament ae of August, 1968 is given in AY peux A (pp. 208-206), “The diplomatic arrangement shown in ths st were sim lated and ven mance bythe prolierion of mliary bi around the planet. The new role of the United Sates in ‘espe can be sch in the fact that U.S. armed forces in 1920 were tained in only thre eons abroad. During fk Second World War, US. amet fre were tobe found in ‘countie. Today, through ditrbaton of itary astance an the direction of miltary taining of foreign armies, US. rll froup are located in a leet 64 countin Thee, a ca bes fn Table I, are wal epread out over the gobs That hee forces and their equipment have not remai TABLE Latin Amin 9 Etat Ans (incoding Australia) fists earBa and South Asa le ot gece Meta pce eeliecny eet sere Oe te teedya Re Unie as ceca nance 161 le st reported by the Dearne se gen in Appendix B (Pe 0) "A inporant spe of the wey Uned Snead os dee planes cf tier Emcee poe ter Pata Ae agen V Ros, Under Secretary of 8 fy, pot hwy in rad ater the ole peta Hatry bss been» proce of Armescan ovement to take over potions. = of secuy which Bitaln, France, te Netherlands and Belglm had previously bel." ras United Stats business been caught napping while a ths hasbeen going on. For example, United Staten Danks Shonda no anger Concentra aly in Latin Aes, bt fre now spread out over the ge. And the United States pod too inthe Hh Mile Bas ll indory Bas been traeforned, Table I preentseimater of the change inthe relive pos on of he United States wth epee to Mile Bast. Wile TABLE 1 OIL RESERVES IN MIDDLE EAST Eetimete of Restret Cortraled (The amouate are in iin of are) Omen 38 er ua 293 en iaey, Tass dats rn eng tae one seep