Interview with John Smith, author of ‘Imperialism in the twenty-first century’

John Smith’s book on imperialism is a groundbreaking work revealing the super-exploitation of the global south. Daphna Whitmore from Redline interviewed him about his book.

John Smith

DW: Firstly I’d like to thank you for writing Imperialism in the twenty-first century. That is a massive subject and your book covers so much interesting material – how long was it in the making?

JS: By the late 1990s the globalisation of production and the global shift of manufacturing production to low-wage countries was taking place on such a huge scale that it was impossible not to notice it, nor what was driving it, namely the higher degrees of exploitation available in countries like Mexico, Bangladesh, China. A theory was needed to explain this, but a pair of eyes was all that was required to know it was happening. It was natural to study the behavior of industrial corporations, the non-financial TNCs, since they were the most prominent agents and beneficiaries of globalisation – and this is what they were doing! Also, even a basic education in Marxist value theory leads us to pay attention to changes in the sphere of production… For all these reasons, it was a shock to find that Marxism, or rather Marxists, had little to say about these new facts.

So, influenced by theories of dependency and unequal exchange (more exactly, dissatisfied by what I have come to call euro-Marxist attempts to refute it), I began the work which led to the book in 1995, around the time I left the Communist League, the US SWP’s co-thinkers in the UK (they closed their Sheffield branch and I stayed…). In 1997 I wrote the first outline – a pamphlet/essay title, ‘Imperialism and the law of value’, expresses the continuing task. Further work was interrupted from 1998 by the campaign against sanctions and war on Iraq, until I took early redundancy from my telecom job in 2004, and began researching ‘Imperialism and the globalisation of production’, my PhD thesis completed in 2010. There’s a lot more in the book than in the thesis, but the basic argument is there, and it has got around – it has been downloaded more than 3000 times, which is more than the first print run of the book.

DW: Do you think there are decades worth of new frontiers for imperialist outsourcing to expand in to, or are the limits in sight?

JS: I think the crisis means that, in broad terms, the limits have already been reached – in other words, the biggest gains have already been made, and deep contradictions in the outsourcing ‘fix’ to their profits are becoming active. For example, as I discuss in the last chapter of the book, ‘global imbalances’, i.e. structural trade surpluses and deficits resulting from the shift of production, helped create the conditions – low inflation, low interest rates, low volatility – for the financial feeding frenzy that preceded the crisis. Above all, we cannot underestimate the depth and explosive character of the continuing global crisis. Real interest rates (taking account of inflation) in all imperialist countries including the USA are negative, yet the response of their economies to this extreme stimulus remains paltry. So more and more economists are talking of the approach of ‘helicopter money’ (where instead of borrowing to finance spending, governments print it and spend it, or even hand it out to the public to spend)… Meanwhile, only now is the global crisis arriving in the so-called developing world. What Andrew Haldane calls debt-financed consumption of outsourced goods can’t be expanded indefinitely. Stagnant final demand in the imperialist countries (which the EM debt crisis precludes their stalling economies from replacing) signifies that export-oriented industrialisation is no longer a viable development strategy for ‘developing’ nations. This implies an intensification of the ‘race to the bottom’. The only capitalist way out of this trap, available to very few, is to ‘upgrade’, to move into higher value-added activities, as China is showing some success in doing in certain key sectors – but this means moving from a symbiotic, complementary relationship with TNCs based in imperialist countries, supplying cheap labour and receiving a small share of final value, to direct competition with these firms.

Attempts to resolve or contain old contradictions have created a host of new ones. Production outsourcing has greatly increased the dependence of firms in imperialist economies and imperialist economies themselves on surplus value extracted in low-wage nations, with whom they have an increasingly rent-seeking, parasitic relationship. To the extent that outsourcing of production is an alternative to investment in new, capacity-expanding technology this form of imperialism is a fetter on the development of the productive forces, resulting in enormous waste of labour power, wasted only because it is cheap.

DW: You highlight how valid Lenin’s analysis of imperialism still is today. What do you think are the most significant new developments since he wrote?

JS: In Lenin’s time capitalist relations had only begun to penetrate the subject nations; the relation between oppressor and oppressed nations was a relation between capitalist and pre-capitalist societies; the globalisation of the capital/labour relation was incipient, principally manifested in agriculture and resource extraction, and was only to invade modern industry six decades later. As I argue in the book (pp225-6): “Lenin could not have included a conception of how value is produced in globalized production processes because this phenomenon was only to emerge in a later phase of capitalist development. These circumstances have resulted in an inevitable disconnection, persisting right to this day, between Lenin’s theory of imperialism and Marxist value theory.”

How to fill this gap? Permit me to cite from a comment I made to the discussion on Michael Roberts’ review of my book:

My views concerning the relationship between national oppression and class exploitation in the contemporary world are based on what I consider to be a major breakthrough made by my friend and comrade Andy Higginbottom, who argued, in two papers presented to the 2008 and 2009 Historical Materialism conferences that holding “(southern) wages … below the value of (northern) labour-power is a structurally central characteristic of globalised, imperialist capitalism… Imperialism is a system for the production of surplus-value that structurally combines national oppression with class exploitation.” (“The Third Form of Surplus-Value Increase”, conference paper, Historical Materialism Conference 2009). A year earlier he wrote, “National oppression is manifest not only by dispossession, it is reproduced within the capital/labour relationship as super-exploitation, that is to say intense work, long hours and the payment of a wage below the value of labour-power [i.e.] the minimum social standards achieved at that time in the heartlands of capital.” (“Rent, Mining and British Imperialism”, conference paper, Historical Materialism Conference, 2008). This, as the book argues, provides the necessary foundation for a synthesis of Marx’s theory of value and Lenin’s theory of imperialism, for a Marxism-Leninism that is actually worthy of the name, unlike its previous Stalinist iterations.

Unfortunately, my decision to use chapter 1 as a way of introducing and structuring the rest of the book (dispensing with a separate intro) and to use the final chapter to analyse the ongoing global systemic crisis resulted in a lot of material on this hugely important topic being put to one side. I now regret not including at least some of this in my book, in particular the following passages:

Neoliberal globalisation signifies, above all, a new stage in the globalisation of the capital labour-relation. It pitches the workers of the dominant nations and the workers of the global South together, in competition with each other and yet bound together in mutual interdependence, connected by globalised production processes, exploited with different intensities by the same capitalists. But this qualitative, new stage in the evolution of the capital/labour relation possesses a very specific quality: the imperialist division of the world was inherited by capitalism; it is now inherent. In other words, the globalisation of the capital/labour relation, in the context of and on the foundation of a pre-existing division of the world into oppressed and oppressor nations, entails the internalisation of this division. Neoliberal globalisation is, therefore, the unfolding of the imperialist form of the capital relation.
As a result, this latest stage of capitalist development has been leading not to convergence of the oppressed nations with the ‘advanced’ countries and the supersession of the North-South divide but to something meriting the term global apartheid, in which the southern nations have become labour reserves for super-exploitation by northern capitalists, producing industrial inputs and consumer goods, sustaining the western ‘consumer society’. This is imperialism on an entirely capitalist basis, in an advanced stage of its development, in which the globalisation of the capital/labour relation has taken place on the basis of inherited imperialist division of the world. In the neoliberal era, capitalism has fully sublated the old colonial division of the world; discarding all that is inimical to it and preserving and making its own all that promotes its continuation and expansion.

The dismantling of the colonial empires and the attainment of formal sovereignty by the subject nations, advances made possible by the multitudes who joined hard-fought struggles for national liberation; and by the imperialists’ greatest fear, the increasing propensity of these movements to take a revolutionary socialist path, as shown on countless occasions from Korea to Algeria to Nicaragua. The new relationship of forces obliged imperialist powers to reorganise their relations with emerging capitalist elites within the subject nations, allowing their protégés to hold the reins of power while never letting go themselves. The end of colonialism and the attainment of formal sovereignty may have emancipated the national bourgeoisies, but the great majority—those left with nothing but their labour-power to sell, in a word the proletarianised peoples of these countries—still await their emancipation. The world continues to be divided into ‘oppressed and oppressor nations’, but now the national bourgeoisies act as intermediaries and accomplices in the imperialist plunder of their nation’s nature and living labour.

DW: You talk about the neoliberal era. NZ had a very neoliberal government (Labour) in the 1980s – which was an early adopter of the deindustrialisation and off-shoring trend. However, since the mid-1990s governments have taken a more moderate course. For instance the current government borrowed and spent rather than imposed austerity following the 2008 global financial crisis. Do you see neoliberalism as a transient or more permanent aspect of capitalism?

JS: The initial response of all imperialist governments to the 2008 crisis was to borrow and spend rather than impose austerity; the Eurozone sovereign debt crisis beginning in 2010 sparked the stampede to austerity. NZ was lifted by high commodity prices and fast growth in China and is vulnerable now these tail winds have turned into headwinds. I haven’t followed NZ government policies closely, but I suppose ‘the markets’, i.e. big capitalist investors, will have given the NZ government a certain degree of latitude given the favourable winds. The question seems to be asking whether there is a space in NZ and elsewhere for governments to pursue non-austerity, non-‘neoliberal’ policies. NZ government finances seem in better shape than here in the UK where, despite austerity, the UK government is continuing to run a budget deficit of more than 5% of GDP, borrowing £1.3 billion per week. The Labour left argues that the Tory government’s austerity policy is driven by ideology, that Cameron et al are using the crisis as a pretext to pursue their vendetta against public spending, and imagine ultra-low interest rates to be not a sign of extreme economic illness but an opportunity to borrow money to finance infrastructure etc investments that, despite these ultra-low rates, private capital doesn’t want to invest in. Actually, Jeremy Corbyn has gone further, and mooted the idea of ‘People’s quantitative easing’, i.e. printing money to finance infrastructure spending etc rather than borrowing it. Such an anti-austerity policy would meet stiff resistance from investors, US and European governments, the IMF etc; a big battle would commence.

Neoliberalism is not a set of policies, it is the complete submission of policy to the markets, i.e. the private decisions of capitalists. It was launched as part of a counter-revolution, a full-spectrum attack against organized labour, national liberation struggles, socialist revolutions as in Central America, and fully retains this counterrevolutionary quality. Everything is transient, even capitalism itself. As a system, neoliberalism is in crisis; as an ideology or set of policy prescriptions it is in disarray. But there is no available capitalist alternative save for de-globalisation, protectionism, autarky, capital controls etc, which is just a different road into the crisis.

DW: How would you categorise China today – oppressed nation or candidate for imperialist status? Or neither? 

JS: Or both? Is China even a capitalist economy? There are certainly plenty of capitalists and a great deal of capital accumulation going on, including by US and European TNCs, nevertheless I think China is attempting a transition to capitalism, that it still has a way to go, and that the way ahead is extremely fraught. China responded to the outbreak of global crisis with an enormous injection of credit into the economy, reckoned at 34% of GDP between November 2008 and November 2009, and this is widely credited with saving not just China but the world from a much deeper slump. Anyway, it certainly restored Chinese growth to 10% for a few more years. Yet, between February 2015 and February 2016, the Chinese government unleashed an even bigger stimulus package – 40% of GDP, or in absolute terms 2½ times the size of the 2008-9 stimulus – yet economic growth has decelerated. As George Magnus pointed out (‘China’s credit binge is the real concern’, in Financial Times, January 11, 2016), “Chinese non-financial debt has… risen from about 100 per cent [in 2008-9] to about 250 per cent of GDP but far from slowing down with the economy, the pace of debt accumulation has actually picked up in the last one to two years… monthly credit creation is growing at nearly three times the rate of officially recorded money GDP growth, or more if you don’t believe the official GDP data.”

Is China’s attempted transition to capitalism heading to an economic (as well as an ecological) disaster? It appears so, only the timing is uncertain. Anyway, how do we categorise an economy which poured more cement in 2010 and 2011 than the USA did in the whole of the 20^th century? And which today provides more than half of the demand for most of the raw materials traded on world markets? And which is installing industrial robots faster than anywhere in the world while putting in big resources into developing its own robot-making industry?[1] In a 2012 article ‘Outsourcing, financialisation and the crisis’ (http://www.mediafire.com/view/?hesj1vceutyyomc) I wrote

“Is China’s rise a threat to imperialist domination of Asia and the world? Yes, I believe it is. What sort of threat? That China’s rulers—whether we consider them to be a capitalist class or a Stalinist bureaucracy—will refuse to accept the subordinate, oppressed, submissive status reserved for the so-called emerging nations, that they will challenge US hegemony over Asia and develop a counterweight to the US-Japanese military alliance that rules its coastal waters, that they will wield the potential economic power reflected in their possession of trillions of dollars of US treasury bonds and other financial assets, that their emergent TNCs will muscle in on mineral resources and markets hitherto the exclusive preserve of the imperialist nations. They are already marching down this road, a road that leads to war, and the USA is responding in the way we would expect an imperial hegemon to respond: the invasion of Iraq was aimed at least as much at intimidating China as at securing US/UK control over Middle Eastern oil supplies.”

DW: You make the point that with over 80 percent of the world’s industrial workers living and working in the Global South this is significant in terms of their economic importance and social weight. Do you see this materialising in new revolutionary and anti-imperialist movements?

JS: Yes, over the next years and decades I expect the emergence of new revolutionary and anti-imperialist movements, and they will be more proletarian, more female, more ethnically diverse than ever. Glimpses of the future have recently been provided by the general strike in textiles and other industries in Egypt that helped topple Hosni Mubarak, by miners in South Africa, electronics workers in China, garment workers in Bangladesh and Cambodia. So, I do believe the global crisis is creating the conditions for a rebirth of an international working class movement. What we have to remember is that, independently of what is at the moment in the heads of working people, the most profound crisis that capitalism has ever faced, combined with the capitalist destruction of nature, means that barbarism and war or social revolution are the only two possible futures.

DW: By tracing the production of the iphone, the t-shirt and the cup of coffee you put a human face to the economics of super-exploitation. You note that opposition in the west has been left to charities rather than unions. Do you see this changing?

JS: Protectionism is the reflex response of workers faced with competition, it is a much easier option than waging class struggle, yet workers can understand that protectionism leads to disaster. An impressive movement has developed in the United States among Walmart workers for $15 an hour and a union. I’m confident they can feel a sense of solidarity with the workers who produce the goods they stack on WalMart’s shelves. The 39,000 striking Verizon workers, including 13,000 call centre workers, recently discovered that workers at call centres in the Philippines, whose services were being used to break the strike, were being paid $1.78 per hour. Internationalism, however, was not the response of this union official, reported on the union website (http://www.cwa-union.org/news/releases/cwa-uncovers-massive-verizon-offshoring-operation-in-philippines):

“Verizon is terrified that the public might find out about what has happened to the good middle-class jobs the company has shipped to the Philippines. The truth is that Verizon is destroying middle-class American jobs so that it can pay workers $1.78 per hour and force them to work around the clock, rather than preserve good jobs in our communities. That’s what our strike is about. Instead of profiting off of poverty abroad, Verizon should come back to the table and negotiate a fair contract that protects middle-class jobs,” said Dennis Trainor, President of CWA District One.

DW: You argue that workers are trapped in the Global South, violently prevented from entering the  Global North, and that is an important aspect in their on-going exploitation. Do you have any thoughts on what we in the west can do?

JS: Solidarity is an empty word if it is not extended to those who need it the most, and in today’s world that means migrant workers. One place we could start is to place the interests and needs of migrant workers at the centre of May Day everywhere. Controls on the free movement of labour are just as much a pillar of the global capitalist system as they were of the apartheid system in South Africa; their removal would destabilise the entire system and can only be accomplished as part of a process of overcoming the mutilating divisions that capitalism and imperialism have imposed upon working people. Overcoming these imperialist divisions is not just a task of socialism, it is the very essence of socialism, the name for the transitional period during which everything that violates that unity and equality of working people is overcome. When the head of Cuba’s medical mission to west Africa to fight Ebola was asked why Cuba had sent more doctors than the rest of the world, he answered “in Cuba we share what we have, not what’s left over.” That’s about the most succinct statement of proletarian internationalism that I have come across.

Notes

[1] The Financial Times (“China’s robot revolution”, Ben Bland, April 28, 2016) reported recently, “Across the manufacturing belt that hugs China’s southern coastline, thousands of factories like Chen’s are turning to automation in a government-backed, robot-driven industrial revolution the likes of which the world has never seen…. China’s technological transformation still has far to go — the country has just 36 robots per 10,000 manufacturing workers, compared with 292 in Germany, 314 in Japan and 478 in South Korea.” Yet there are many more manufacturing workers in China that in the other countries; the German-based International Federation of Robotics reckons China will have more industrial robots than any other country by 2017.