Prasenjit Bose is an economist and political activist.
Financial and economic crises have always accompanied neoliberal capitalism over the past four decades from Latin America and Eastern Europe to South East Asia. The difference this time is that the metropolitan centres of capitalism in the US and Europe have themselves been hit by the crisis in a manner not witnessed since the Great Depression of the 1930s. Four years since the financial meltdown of 2008, over 50 million people are currently unemployed in the OECD countries (group of 34 developed countries) and the numbers of unemployed and poverty-stricken families are still rising. The imposition of austerity measures and cuts in welfare benefits by the neoliberal governments of the West even in the face of growing misery of the people have created mass discontent and triggered popular movements, particularly in the countries of the European “periphery” like Greece and Spain.
The developing economies, including the BRICS (Brazil, Russia, India, China and South Africa), are also being affected by the crisis. The confidence of the international financial institutions regarding economic growth in the developing countries becoming “decoupled” from that of the recession-hit advanced economies is fast evaporating. The impending recession in Europe, in the absence of any significant economic recovery in the US, is likely to have serious adverse impact on economic activity in the developing countries too, putting the livelihoods of millions of working people at risk.
The anti-people character of the neoliberal regime and the bankruptcy of its free market ideology are getting thoroughly exposed with the deepening economic crisis and the irrational, vested-interest-driven actions of the bourgeois governments. With the weakening of the hegemony of neoliberal ideas, debates over alternatives to globalised capitalism are also emerging, along with a revival of interest in Marxism and socialist ideas across the world. While the classics are being rediscovered and reread, attempts are also underway to better understand and analyze the contemporary world from a Marxist standpoint. This is important because the global realities have changed considerably since the days of Marx and Lenin.
To argue that the world has changed, however, does not mean that the theoretical core of Marx’s political economy analysis of capitalism has become invalid. Rather, as Marx had argued, capitalism remains to be a system based on class exploitation, which creates increasing wealth for the capitalists on the one hand and poverty for the workers on the other. The fact that inequalities of income and assets have risen over the past four decades both within the developed as well as the developing countries shows the prescience of Marxian analysis. The ongoing recession also validates Marx’s characterization of capitalism as a system ridden by periodic crisis, which destroys wealth and swells the ranks of the “reserve army” of the unemployed.
Taking forward Marx’s analysis of accumulation and concentration of capital creating gigantic blocs of monopoly capital, Lenin had drawn attention towards the emergence of finance capital in the beginning of the 20th century, through the fusion of banking and industrial capital. The tendency of finance capital backed by the nation-states of industrialized capitalist countries, to expand across geographical boundaries seeking control over markets, resources and profitable investment avenues, giving rise to the phenomenon of imperialism, lay at the core of Lenin’s analysis.
The accuracy of the Lenin’s analysis of inter-imperialist contradictions, based on national blocs of finance capital competing with each other, could be seen in the two world wars of the 20th century, which were fought between the imperialist powers to divide and re-divide the world in order to establish their own “spheres of influence”. The Bolshevik revolution was successfully led by Lenin in the backdrop of tsarist Russia’s participation in the First World War, which heaped enormous miseries on the Russian people. Analysing global politics and major world events within the framework of imperialism and its dynamics and devising revolutionary strategies from an anti-imperialist standpoint thus became the cornerstone of Marxism-Leninism in the 20th century.i
International Finance and Inter-Imperialist Rivalry
While the imperialist imperatives identified by Lenin remain valid in the 21=st century, major changes have come about in the dynamics of imperialism. The “unipolar world” that came into being following the collapse of the USSR in 1991 has also seen a muting of inter-imperialist rivalry. Conflicts of interest between the traditional imperialist powers do remain, but military confrontations and wars between them have become a thing of the past.
The way things have changed since Lenin’s time can be seen in the emergence of international finance capital, which while originating in the advanced capitalist nations is no longer national in its form. The transnational banks and financial corporations today have global operations and move around large volumes of capital across national boundaries on a daily basis in search of quick speculative gains. Since international finance capital is globally mobile and fluid and it is not tied to specific industries, it does not serve its interest to divide the world market into rival national blocs. What it rather wants is a globally integrated and inter-connected market where it has unfettered freedom of movement and operations. In a world where international finance is fluid and mobile, stability of the value of the dollar vis-à-vis primary commodities like oil is a prerequisite for the stability of the international financial system.ii This stability of the dollar is underwritten by the military power of the US state. No imperialist power today is interested in challenging this hegemony of the dollar.
Rivalries between imperialist nation states have therefore subsided under the hegemony of international finance capital. The major imperialist powers – the US, EU and Japan – function as a bloc under the leadership of the US, which ensures that any challenge to neoliberal globalisation and the hegemony of international finance capital is eliminated. This does not imply, however, that imperialist wars have stopped occurring. In fact, the post cold war period has witnessed an even more aggressive imperialist militarism. But in all the wars of imperialist aggression in the past two decades, from Yugoslavia to Afghanistan, Iraq, Libya and the ongoing conflicts with Syria and Iran, the major imperialist powers have moved together under the NATO. There may have been criticisms of “US unilateralism” by some of the US’ allies from time to time, but the NATO has not only remained intact but is undergoing expansion both in its composition as well as its theatre of operations. Anti-imperialist forces today have to reckon with such unity of the major imperialist powers.
Changing Nature of Social Contradictions
Besides the muting of the rivalry between the major imperialist powers, there are other developments, which call for a rethink on the four major “world social contradictions” identified by the international Communist movement in the 20th century.iii With the collapse of the USSR and restoration of capitalism in Russia and Eastern Europe, socialism has considerably weakened as a force at the international level. Moreover, the trajectory of “market socialism” adopted by China and its gradual integration into the global economy has further complicated matters, making it difficult to fit the complex realities of a globalised world into the straightjacket of the “four major contradictions”.
What has intensified under globalisation is the contradiction between imperialism and the peoples of the developing countries. This is manifested in the neoliberal policies adopted by the developing countries at the behest of their domestic capitalist classes in collaboration with international finance capital. In the bigger developing countries, which are fashionably termed “emerging economies” (the BRICS for instance), the domestic capitalist classes have significantly grown in size and strength and have emerged as global players. They have developed a =strategic junior partnership with international finance capital, whereby they can jointly exploit the labour, the markets and the resources within their own countries as well as overseas.iv
Sections of the urban middle classes and the rural elites, who benefit from the neoliberal policies, are allies of the big capitalist classes in the developing countries. In contrast, the basic classes of these developing countries – the organised working class, small peasants, informal workers in urban and rural areas, petty producers etc. – bear the brunt of intensified exploitation and dispossession. The agrarian classes are particularly hit because of the crisis that neoliberalism precipitates in agriculture and the rural economy. This is not only intensifying the contradiction between imperialism and the basic classes in the developing world, but is also pitting the basic classes against their domestic capitalist classes giving rise to social and political conflicts over “development”.v The struggles waged by the peoples of the developing countries against the neoliberal regime have become the decisive factor in shaping the future of globalised capitalism.
While the capitalist classes of the developing countries largely collaborate with imperialist finance capital, contradictions between them have not disappeared. With the growth in the size and strength of the capitalist classes of the developing countries, their economic interests also collide with that of the traditional imperialist powers. This is seen most acutely in the scramble for natural resources, like oil, minerals, land, water and forests across the continents of Africa, Asia and Latin America. This contradiction also manifest itself on issues like trade liberalization, agriculture subsidies, international migration, climate change or even on geo-strategic issues like Iran, Syria or South China Sea. Groupings like the BRICS, Shanghai Cooperation Organisation (SCO) etc. have come into being in order to promote “multipolarity” in world affairs.
Latin American countries are also making efforts to further regional cooperation independent of the US as reflected in the formation of the Community of the Latin American and Carribean States (CELAC). This trend towards multipolarity is likely to get strengthened with the ongoing global economic crisis, which is reducing the weight of the advanced capitalist countries in the world economy. The Latin American experience over the past decade shows that increasing pressure of popular movements can force the domestic capitalist classes and social-democratic governments of the developing countries to resist imperialist dictates and pursue autonomous policies, at least in a limited manner.
The process of “financialisation” of various sectors of the economy under neoliberalism, through derivative instruments – like primary commodities through commodity futures; real estate through mortgages and CDOs; exports and imports through exchange rate derivatives etc. – has led to a redistribution of the social surplus towards finance capital, leading to its unprecedented concentration as well as its cross-border mobility and speculative character. International finance capital has emerged as a parasitic class, which moves around the world – at times enmeshed and at times independent of industrial capital – sucking up the surplus that is being generated in various centres of production.
The net result of this process of financialisation has been a phenomenal rise in income and asset inequalities, even within the advanced capitalist countries, where real wages have either stagnated or fallen over the past three decades. Economic growth has also been driven by asset price bubbles and debt-induced hyper-consumerism, which has met its inevitable fate in a financial meltdown and recession. The bailout packages handed over to the culpable financial giants funded by taxpayer’s money, even as millions of ordinary people have lost their jobs and homes and sunk into poverty, have accentuated class contradictions within the metropolitan centres. The “occupy” movements and anti-austerity protests in the US and Europe signify this trend. This opens up fresh possibilities for the anti-capitalist movements in the developed world anti-imperialist movements in the developing world to make common cause against neoliberal globalisation.
Rebuilding the Socialist Alternative
The basic problem confronting the anti-imperialist forces today is the weakening of the socialist forces at the global level. Even though exploitation, oppression, crisis and misery are inherent to the functioning of globalised capitalism, it endures in the absence of a powerful socialist challenge. The collapse of the USSR remains to be the main factor behind the lack of confidence in socialism, which many suffer from, even within the Left. Despite its many successes in meeting the basic needs of the people, raising their living standards and providing social security; remarkable achievements in the fields of industry, science and culture and the heroic resistance and victory in the war against fascism; the first socialist state in history could not eventually sustain.
The reasons behind the decay and downfall of the USSR have been widely debated since long. Controversies continue to remain over the course adopted by the USSR in different historical conjunctures: What if Lenin’s NEP had not been reversed and the forced collectivisation undertaken under Stalin avoided? What if the transition had been managed better without the purges of the other revolutionary leaders from the communist party, starting from Trotsky and Bukharin? What if Khruschev would not have denounced Stalin’s legacy? What if Gorbachev’s reforms were differently envisioned? While these historical questions do not have easy answers, what is noteworthy is that each of these consequential changes in the course of socialist construction was imposed from above, without any meaningful participation or acceptance by the people.
That itself was the biggest problem with the USSR and all other countries which followed its model. The structure of the single party state established after the revolution pre-empted the possibilities of democratic debates, discussions and mandates involving the people over important questions of development and state policy. Rather, ideological-political debates were sought to be resolved through distorted factional struggles and backroom intrigues within the higher echelons of the CPSU, leading to purges, imprisonments and even executions.
The argument that socialist construction was being carried out under imperialist encirclement, which necessitated such an approach, is unconvincing, since it is difficult to believe how revolutionaries of yesteryears debating over contending positions could turn into imperialist agents overnight. In any case, if socialism is meant to be a superior social system compared to capitalism, the people in socialist societies should be empowered to have more say in determining policies. What happened in the USSR, in contrast, was that socialist construction increasingly became a top-down bureaucratic exercise, with state policies swinging between extremes depending on who occupied the topmost chair. The people also got increasingly alienated from the socialist state in the absence of substantive democratic rights and freedoms.
“Socialism with Chinese Characteristics”
The Chinese revolution under Mao’s leadership was a national liberation movement and an anti-feudal/anti-capitalist revolution gelled into one. Here too, socialist construction and planning were carried out under a single party state in a top down manner. With the enormous progressive transformation brought in by the socialist construction in China, distortions similar to those witnessed in the USSR also reappeared. Matters precipitated after the Sino-Soviet split in the early 1960s, with a full-scale campaign launched within the party against “capitalist-roaders”, which led to purges and imprisonment during the chaotic period of the cultural revolution. Even a revolutionary leader like Liu Shaoqi was not spared.
While seeking to restore normalcy and stability after the turbulent years of the cultural revolution, however, Deng Xiaoping never even attempted to undertake any democratic restructuring of the state apparatus. He was convinced about the negatives of the rigid and over-centralised planning model of the USSR, but saw no problems in its political system. Under such a set up, the market-oriented reforms initiated by China in the 1980s ultimately led to the adoption of an export-dependent growth trajectory since the 1990s. Much like the neoliberal trajectories adopted elsewhere in the developing world, China attained high GDP growth rates but at the cost of sharply rising socio-economic inequalities, a declining share of workers’ income in the GDP and a massive increase in high-level corruption, land grabbing and environmental damage.
China today has the largest number of dollar billionaires in the world after the US and Russia. Not only has a strong capitalist class emerged in China, but this capitalist class is also venturing into other countries of Asia, Africa and Latin America in search of resources and profitable investment avenues. The CPC has cleared the way for the entry of big capitalists into the Party. The Constitution of the CPC which was amended in October 2007 now starts with the following formulation:
The Communist Party of China is the vanguard both of the Chinese working class and of the Chinese people and the Chinese nation. It is the core of leadership for the cause of socialism with Chinese characteristics and represents the development trend of China’s advanced productive forces, the orientation of China’s advanced culture and the fundamental interests of the overwhelming majority of the Chinese people. The realization of communism is the highest ideal and ultimate goal of the Party. The Communist Party of China takes Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important thought of Three Represents as its guide to action. (emphasis added)
The adoption of the concept of “Three Represents” implies that there are interests of the “nation” and “people” distinct from that of the “working class”. Alongwith CPC’s explicit recognition that it represents the “development trend of China’s advanced productive forces” which is a euphemism for capitalists, the shift from “Deng Xiaoping Theory” to “Three Represents” marks a clear step towards the legitimization of capitalism in China. Thus, market-oriented reforms under the “dictatorship of the proletariat” and the “leadership of the Communist Party” have not been able to guarantee that China keeps to the “socialist road”.vi
This is not to argue that capitalism has been fully restored in China. Given the history of the CPC and the nature of contradictions apparent in China today, it is evident that anti-capitalist forces are still at play. The process of transition in China today, however, is certainly not in the direction of socialism – which not only entails the development of productive forces but also a progressive socialisation of wealth and resources, the reverse of which is happening currently. This is further confirmed by the re-orientation of China’s foreign policy, with anti-imperialism and socialist internationalism being abandoned in favour of an increasingly aggressive pursuit of nationalist self-interest. Unless progressive social and political forces in China are able to reverse these retrograde trends, “socialism with Chinese characteristics” will be reduced to a mere slogan.
Envisioning Socialism in the 21st Century
The short point that follows from the critical discussion on USSR and China is that in order to revive confidence in the socialist ideology and rebuilding the socialist alternative, the question of democracy needs to be squarely addressed. The single biggest failure of the socialist experiments of the 20th century has been in institutionalising democratic forms and practices in the course of social transformations. It is because of this failure that mistakes once made could not be corrected till irreversible damage was done.
Rather than becoming shining examples of liberated societies where people could enjoy more freedom, dignity and rights, the socialist regimes eventually got identified with deviations, factional intrigues, purges and individualist cults. A caricature of all these errors combined together can be seen in the shape of DPRK today, where a military dictatorship headed by a dynasty rules over the people masquerading as a socialist regime. This legacy needs to be forsaken by the anti-imperialist forces for good.
A socialist state in the 21st century needs to be envisioned as one, which not only guarantees all the civil rights and political freedoms available under bourgeois democracies, including the right to form political parties, free and fair elections, free media etc. but also goes further in peoples’ empowerment and participation in decision-making through democratic decentralisation and institutionalised forms of direct democracy like referendums, people’s assemblies, right to recall elected representatives etc.vii The proletarian character of the socialist state must be protected through constitutional provisions, prohibiting the concentration of private wealth and resources.
In other words instead of a “dictatorship of the proletariat”, the socialist state should be a “proletarian democracy”. This proletarian democracy should also champion the cause of social justice, by promoting gender equality and initiating affirmative action to bring to an end all forms of oppression and discrimination based on religion, race, caste, language and nationality etc.
The economic programme of socialism in the 21st century should be primarily geared towards guaranteeing basic universal rights to food, housing, education, healthcare and social security through public provisioning and ensuring full employment. The experience of neoliberal capitalism shows that these social goals cannot be attained under the spontaneous operations of a free market economy dominated by international finance capital and private monopolies. Therefore, economic planning needs to be adopted alongside nationalisation of strategic sectors like finance, natural resources and core industries, in order to mobilise and channelize resources to meet the social goals. Besides the public sector, which should dominate in the large-scale industries, other forms of social ownership like workers’ or collective ownerships and small private ownership should also be allowed to exist and compete with the public sector.
The market structure under socialism should be different from the capitalist markets, which are distorted by cartelisation and speculation. The socialist state should play a role in promoting cooperative enterprises by small producers, especially in sectors where technological innovations lead to de-scaling.viii The rents accruing to the giant oligopolies on the basis of Intellectual Property Rights especially in sectors like software, medicine, media and entertainment, should be prevented by promoting alternative structures of creating knowledge and innovations, like free and open source movements in software, biology, drug discovery etc., where new technologies are developed by cooperative communities (“creative commons”).ix
Surplus land should be confiscated from the landlords and redistributed among the landless under a socialist regime. Peasant agriculture should be encouraged in the developing countries through state support alongside promotion of voluntary cooperation among the peasantry. Forcible acquisition of land and other common resources should be prohibited. All land acquisition should be based on prior informed consent of the landlosers, fair compensation and proper rehabilitation. Industrialisation and changes in land use should be undertaken in a planned manner, through democratic consultations and making displaced persons direct beneficiaries of the process.
Socialism in the 21st century has to address the crucial issue of environmental degradation and ecological sustainability. The issue is not confined to global warming and climate change. The basic question is that since natural resources are finite, what should be the appropriate manner of utilising such resources. The global “commons” like atmospheric space, water, forests, minerals etc. are increasingly being usurped by big corporate capital for profits and the consumption needs of the affluent elite. If all developing countries follow the same trajectory of wasteful capitalist development like the advanced capitalist countries, can it be ecologically sustainable? The socialist state should adopt an alternative ecologically sustainable and socially equitable development trajectory.
While envisioning such a socialist transformation in the 21st century, it is important to ensure that the anti-imperialist forces fighting for such a socialism also organise themselves on the basis of democratic principles. This is not only because the traditional organisational form of the Communist parties across the world – “democratic centralism” – has almost without exception led to lesser democracy and more centralism in practise. The very notion of “a” vanguard party of the working class has become problematic in a context where the working class itself has undergone a process of severe fragmentation under the impact of globalisation.
Working class unity and resistance in a setting characterised by increasing contractualisation and informalisation of the workforce can be more effectively built through coalitions of various forces representing different sections of the labouring classes. For the developing countries, where the peasantry and rural labourers comprise the majority of the population, building the worker-peasant alliance remains the key task for any revolutionary transformation. This is also more realistically achievable in today’s context through alliances and coalitions of radical political forces and social movements rather than a monolithic party attempting to mobilise an entire class on its own. Openness towards democratic debates and discussions is a pre-requisite of such coalition-building.
As the global economic crisis deepens, such broad-based and transformative coalitions against neoliberal capitalism need to be formed in order to usher in revolutionary change and move towards socialism in the 21st century.
i In the Preface to the French and German editions of Imperialism, the Highest Stage of Capitalism (1920) Lenin said that the purpose of the book was to present a “a composite picture of the world capitalist system in its international relationships at the beginning of the twentieth century – on the eve of the first world imperialist war”. In the Preface to the initial edition he wrote: “I trust that this pamphlet will help the reader to understand the fundamental economic question, that of the economic essence of imperialism, for unless this is studied, it will be impossible to understand and appraise modern war and modern politics.”
ii See Prabhat Patnaik’s The Value of Money, Tulika Books, New Delhi, 2008.
iii The four major “world social contradictions” were (i) contradiction between socialism and imperialism (ii) inter-imperialist contradiction (iii) contradiction between imperialism and third world and (iv) contradiction between capital and labour within the advanced capitalist countries.
iv This relation of strategic junior partnership, which the big capitalist classes of the developing countries have developed with imperialist finance capital, is a new phenomenon. As per the 2012 Forbes list of the world’s richest, the countries with the highest number of dollar billionaires after the US (425) are Russia (96), China (95) and India (48). This is quite different from the “comprador” character of the capitalist class in some third world countries in the 20th century, who were mere commission agents. Nor is the characterization of a “nationalist bourgeoisie” appropriate any longer because of the predominantly collaborationist nature of the big capitalist class vis-à-vis imperialist finance capital.
v An example of such conflicts is the current political battle in India over allowing FDI in retail trade, where a majority of the people is pitted against the MNCs and Indian corporates, with the Indian government siding with the latter. The protests against large scale land grab in China or corruption and cronyism in Russia also reflect such conflicts.
vi Elucidating upon the “Four Cardinal Principles” in March 1979, Deng Xiaoping had said: “The Central Committee maintains that, to carry out China’s four modernizations, we must uphold the Four Cardinal Principles ideologically and politically. This is the basic prerequisite for achieving modernization. The four principles are: 1. We must keep to the socialist road. 2. We must uphold the dictatorship of the proletariat. 3. We must uphold the leadership of the Communist Party. 4. We must uphold Marxism-Leninism and Mao Zedong Thought.”
vii For a discussion on the radical democratic reforms initiated by the progressive regimes of Venezuela, Bolivia and Ecuador in recent times, see Steve Ellner, “Distinguishing Features of the Latin American New Left: The Chavez, Morales and Correa Governments”, The Marxist, XXVII, October-December, 2011.
viii Jayati Ghosh writes: “It is also true that material conditions have changed to make largeness less desirable or necessary in some respects…technology – especially the convergence of ICT and energy technologies – is opening up new possibilities of productivity growth in decentralised settings, which increase the possibilities for a locally managed, decentralised, but globally connected post-carbon economy…Where economies of scale are known to be significant, there is renewed exploration within the Left of forms like co-operatives and other combinations in different manifestations. The aim is to find a balance between large and small, which will obviously differ according to context.” The Emerging Left in the “Emerging” World, Ralph Miliband Lecture on the Future of the Left, London, 2012.
ix See Prabir Purkayastha’s “The Need for a New Socialist Vision”, ZNet, 2009.
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