by Walter Daum
Thanks to John Smith and Michael Yates for calling attention to David Harvey’s latest twists on the actuality of imperialism (see here). John’s critique of Harvey’s assessment of imperialism today is devastating. I want to take up a related point.
Harvey’s work is often rich in detail and connections, but his intricate tapestry conceals the main threads of imperialism today. John notes that similar failures are common among Marxist theorists in the imperialist countries, many of whom insist that the most highly exploited workers are in the North. As to Harvey’s particular claim about the reversal of flows, one guess might be that he is impressed by the wealth being amassed especially in China. If so, what he overlooks is that China’s capitalists got rich by super-exploiting their own proletariat (sharing the profits with imperialist-country capitalists), not the workers of the West or North. Little of the Chinese ruling class’s wealth comes from any reverse transfer of surplus-value.
Harvey notes that the rise of Japan, South Korea, Taiwan etc, and then the growth of China among the still-poorer countries, “has altered the centre of gravity of capitalist development” (Enigma of Capital, 2010, p35). And so it has, but that just shows where the surplus-value is produced, not where it flows to. It does not confirm Harvey’s claimed “unprecedented shift” reversing “the long-standing drain of wealth” from South to North.
Here is my related point. John quotes from Harvey’s The New Imperialism:
“Easily exploited low-wage workforces coupled with increasing ease of geographical mobility of production opened up new opportunities for the profitable employment of surplus capital. But in short order this exacerbated the problem of surplus capital production world-wide.”
I had noticed this before and was struck by the notion that “the problem of surplus capital” was exacerbated by investment abroad. That presumably means that foreign investment brings back more surplus-value; so if too much surplus-value is the problem, then super-exploitation only makes it worse.
This reasoning is reminiscent of the Baran-Sweezy view that the problem with capitalism in its monopoly stage is too much “surplus” (they don’t say surplus-value) that has to be “absorbed.” B&S rejected Marx’s law of the tendency for the rate of profit to fall – which has been the underlying force behind the drive to outsource production from North to South over the past half-century – in favor of a “tendency of surplus to rise.” Harvey has been using the absorption terminology with increasing frequency, as if to reflect the influence of the Monthly Review school.
With regard to how foreign investment serves to exacerbate the problem, B&S wrote in Monopoly Capital (1966, pp107-108):
“One can only conclude that foreign investment, far from being an outlet for domestically generated surplus, is a most efficient device for transferring surplus generated abroad to the investing country. Under these circumstances, it is of course obvious that foreign investment aggravates rather than helps to solve the surplus absorption problem.”
Think about this. If foreign investment aggravates what the authors say is the central problem for capitalism in this stage, why on earth do the capitalists do it? Can’t the ruling class see what’s “of course obvious,” that their scheme of draining the poorer countries of surplus is counter-productive, that it only makes capitalism’s basic economic problem worse? If B&S were right, the entire imperialist capitalist class has been blind to the fact that their insatiable greed for profit is overfilling the trough they pig out from and exacerbating their problem of excess surplus. Wouldn’t it be wonderful if the imperialists were to come to their senses and just let the third-world countries keep their surplus?
Sweezy himself came up with such a proposal before the Baran-Sweezy book was written: “Would it not, for example, be in the objective interests of the American capitalist class as a whole … to institute a vastly increased program of financial and technical assistance to underdeveloped countries? Would not such a program help to dispose of the always threatening domestic surplus and at the same time strengthen capitalism internationally in its struggle with the rival socialist order?”
Sweezy went on to say that “the answer to these questions seems obvious,” and attributes the failure of the ruling class to carry out so obvious a program to capitalist greed: “the deeply ingrained capitalist abhorrence of giving anything away without receiving in return an immediately related and measurable quid pro quo.” (“Has Capitalism Changed?,” in the book Has Capitalism Changed; An International Symposium on the Nature of Contemporary Capitalism, 1961.)
It is not a great leap from this idealist view of capitalism’s central contradiction to Harvey’s “dreadful reformism,” as John puts it, of supporting “a more benevolent New Deal imperialism.”
A more sober reaction to the Baran-Sweezy muddle is that it’s not the capitalists who are foolish but the theory. That is, what should one conclude if your theory tells you that the imperialists, in their own interest, ought not to be doing what they’d been doing for centuries? It should occur to you – indeed, it should be “of course obvious” – that your theory is wrong. The imperialists loot the world not out of sheer piggery but because they actually need the profits they extract. That “surplus” is keeping their system alive despite its deepening decay. If they were to stop extracting surplus-value from the oppressed countries in various ways, then they would have a real problem – and no reason to exist.
John cites the Monthly Review school as one Marxist tendency that recognizes the reality of super-exploitation in imperialism. That they do, but as I see it they do so with an inadequate theoretical framework that opens the way to the reformism that Harvey has adopted.