THE NATIONAL QUESTION IN THE ERA OF GLOBALISATION.
Submission to Third Conference of International Struggle Marxist-Leninist. October 1999; Paris.
Goal Of This Article
We intend to discuss the most important features of imperialism as defined by Lenin; to ask whether the essential features of capital are so changed by recent events that we must revise the importance of the National Question and the general call of Communists to support the national movement:
“Fully and completely up to the point of secession the rights of self-determination.”
What this meant for Marxist-Leninists in relation to colonial and dependent countries, was explained by Lenin and Stalin:
“The Communist International must enter into temporary alliance with bourgeois democracy in colonial and backward countries.”
V.I.Lenin: Preliminary Draft of Theses on the national and Colonial Countries, 2nd Congress CI, in “Selected Works”, Volume 10, London, 1946; p.237.
“The task of the communist elements in the colonial type countries is to link up with the revolutionary elements of the bourgeoisie.. against the bloc of imperialism and the compromising elements of ‘their own’ bourgeoisie, in order.. to wage a genuinely revolutionary struggle for liberation from imperialism”.
J.V.Stalin :”The Results of the Work At the 14th Congress of the RCP(B), in “Works” Volume 7, Moscow, 1954, p.108-9.
What Is Globalisation? Definitions and Our Analytic Task
An acceptable working definition of “Globalisation” is needed for this analysis. It should be one that assumes the normal current position about “globalisation”, and makes the link between the “eclipse” of nations and “globalisation” explicit. The left leaning Hugo Radice (we assume him to be a social democrat) offers this:
“A process through which an increasing proportion of economic, social and cultural transactions take place directly or indirectly between parties in different countries; the term is then synonymous with “internationalisation”. This sort of definition used for example by Hist & Thompson (1996) presupposes an ‘original condition’, a starting point for the process in which the world is made up of distinct and self-sufficient economies, each under the jurisdiction of an independent national-state. It leads to the hypothesis that if globalisation proceeds ‘far enough’ it must lead to the replacement of an ‘inter-national’ world economy by a single integrated global economy; and this the globalisation process confronts threatens or undermines the nation-state”.
Radice, Hugo: “Taking Globalisation Seriously”; In “Socialist Register 1999: “Global capitalism versus democracy”; editors: Panitch Leo & Leys Colin. 1999; London; p.3.
Of course, as Radice points out, “international transactions” have taken place well before the advent of industrial capitalism. After all international trade is at least as old as the Phoenicians. The term “globalisation” is meant to imply a wider and deeper phenomena.
If that is so, what are the claims for a qualitatively new situation in the world economy, based upon?
It seems to be agreed by ideologists of the business and capitalist houses as well as the social democrat “left-leaning” like Radice, that a key element is an “inter-penetration” of business interests around the world. Thus, John H. Dunning is a fervent supporter of what he and others term the new era of “Alliance Capitalism” in today’s world economy. He adopts the definition of Antony McGrew from the work “Globalization & the Nation State”; 1992:
“Globalization refers to the multiplicity of linkages and interconnections between the states and societies which make up the present world system. It describes the process by which events, decisions and activities in one part of the world come to have significant consequences for individuals and communities in quite distant parts of the globe. Globalization has two distinct phenomena: scope (or stretching) and intensity (or deepening). On the one hand it defines a set of processes which embrace most of the globe or which operate world-wide; the concept therefore has a spatial connotation On the other hand it also implies an intensification of the levels of interaction interconnectedness, or interdependence between the states and societies which constitute the world community. Accordingly alongside the stretching goes a deepening of global processes.”
Cited by John H. Dunning in: ” Alliance Capitalism & Global Business”; London; 1997; p.33.
Dunning then makes the general definition operational and explicit in relation to the needs of big business:
“In short then, the economic globalization is a process towards the widening of the extent and form of cross-border transactions and of the deepening of the economic interdependence between the actions of globalizing entities – be they private or public institutions or governments – located in one country and those of related or independent entities located in other countries. The shallowest form of globalization is where and economic entity in one country engages in arm’s length trade in a single product with another economic entity in one other country. The deepest form of globalization is where an economic entity transacts with a large number of other economic entities throughout the world; where it does so across a network of value-added (i.e. profit added -Ed) chains; where these exchanges are highly coordinated to serve the world-wide interests of the globalizing entity; and where they consist of a myriad of different forms of transactions.. Thus a typical global firm will own or control subsidiaries and engage in a value added business alliance and networks in each continent and in each major country. It will source its inputs of labour, capital raw materials and intermediate products from wherever it is best o do so; it will engage in financial transactions independent of time and space; and it will sell its goods and services in each of the main markets of the world.”
Dunning; Ibid; p. 34.
Whether any of this is “new”, is assessed below. But, for now, the link for these ideologists with the role of the nation state is explored. What do these definitions mean for the individual nation-state? For the proponents of “globalization”, to enhance “value-adding” activity, all countries must be “fully open” to the forces of international globalization:
“Similarly a country which is fully open to the forces of globalisation is likely to be geographically diversified in its financial, trading, and investment relationships, and the value added associated with these relationships should constitute a significant part of its Gross National Product (GNP).”
Dunning; Ibid; p. 34.
Well what does this mean?
There is little doubt that at the simplest level it is a demand for free entry of goods and services and capital across all borders. Indeed an explicit anti-protectionism call. But beyond this, is intended a further dimension – the actual erosion of independent nations. As always, to assuage the fears of the “overly-anxious” capital calls upon trusted ideologues to clear the way and provide their “rationale”. The ex-Communist Eric J Hobsbawm, is given accolades by the bourgeoisie for his historical analyses. He presents the viewpoint of the bourgeoisie on the matter of “nationalism in the 20th Century”:
“In spite of its evident prominence, nationalism is historically less important (today). It is no longer as it were, a global political programme, as it may be said to have been in the nineteenth and earlier twentieth centuries. It is at most a complicating factor, or a catalyst for other developments. It is not implausible to present the history of the Eurocentric nineteenth century world as that of “nation-building”, as Walter Baghot did Is anyone likely to write the world history of the late twentieth and twentieth-first century in such terms? It is most unlikely. On the contrary, it will inevitably have to be written as the history of a world which can no longer be contained within the limits of “nations” and nation-states” as these used to be defined, either politically, or economically, or culturally, or even linguistically. It will be largely supranational and infra national, but even infra-nationality , whether it dresses itself up in the costume of some mini-nationalism, will reflect the decline of the old nation-state an operation entity. It will see “nation-sates” and “nations” or ethnic/linguistic groups primarily retreating before, resisting, adapting to, being absorbed or dislocated by the new supranational restructuring of the globe. Nations and nationalism will be present in this history but in subordinate and often rather minor roles. This does not mean that national history and culture will not bulk large-perhaps larger than before-in the educational systems and the cultural life of particular countries, especially the smaller ones, or that they may not flourish within a much broader supranational framework, as, say, Catalan culture today flourishes, but on the tacit assumption that it is Catalans who will communicate with the rest of the world through Spanish and English, since few non-residents in Catalonia will be able to communicate in the local language.”
Hobsbawm EJ: “Nations & Nationalism Since 1780. Programme, Myth & Reality”; Cambridge; Revised second edition; 1997; p.190-191.
Hobsbawm has filled the need of capital for a progressive patina-veneer to cover Capital’s worst aims with a “rationale”. This matches well the view of the more openly pro-bourgeois-capitalist ideologues like Lester C. Thurow, the former Dean of MIT Sloan School of Management. Thurow has no bones about concurring with the sense of Hobsbawm:
“Ethnic separatism (i.e. National separation in the sense in which Thurow is using the term – Ed) is a common phenomenon in periods of economic uncertainty periods when national borders are moving are much more common than periods when they are frozen into place. Since the Berlin Wall has come down, twenty new countries have been created and two countries East and West Germany have become one country Once borders begin to move anywhere in the world it legitimates the idea that they can move elsewhere. Nations hold together because of outside challenges or powerful inside ideologies. Communism was such a powerful inside ideology. It persuaded ethnic groups to live together (if not to like at least to tolerate each other) who had never lived together peacefully before. Communism was the powerful outside challenger that held ethnic forces in check elsewhere Ethnic divisions (i.e. national divisions) are not the twenty-first’s century’s wars of religions. The nation-state is a nineteenth or twentieth century phenomenon and in most cases it is difficult to devise common principles explaining why today’s nations and not some other grouping of nations exist. What is occurring is not religious wars but the phenomenon of ethnic splintering or of religious splintering where the ethnic or religious fault liens are so minor that outsiders often cannot see them even after they are told they exist. Blood and belonging are in the mind, not on the ground. The issue is not “who is us” but an “us” who often exists when no one else can see why. . Where homogeneous ethnic groups exist in different parts of the same country, large states are breaking up or threatening to break up- as in Canada and India. Challenges to existing borders have succeeded, are succeeding and will succeed. Bosnia and Yugoslavia are the wave of the future. They have echoed already in Czechoslovakia, Chechnya, Armenia-Azerbaijan and Georgia. If neither a powerful inside ideology nor a powerful outside threat exists, nations break into warring ethnic, racial or class groups. Why not break up into tribal ethnic groups and fight it out? Such sentiments are legitimated by today’s world economy. Everybody now understands that one does not have to be a big economy with a big internal market to succeed. City-states like Hong Kong or Singapore can succeed. It used to be that everyone thought that breaking up a country into smaller pieces meant a lower standard of living; today everyone knows that isn’t true. As a result one can go it alone and does not have to cooperate with other ethnic groups to have a high standard of living. With this knowledge goes one of the previously existing impediments to ethnic feuding.”
Thurow LC: “The Future of Capitalism. How Today’s Economic Forces Shape Tomorrow’s World.”; New York; 1996; pp –241.
In agreement that there has been a diminishment of nation-states, are key progressive forces actively fighting back against the impacts of global capital. For example, in colourful and vivid language, “Sub-Commandante Marcos” echoes the overall analysis. Although Marcos wrongly identifies the “Cold War” as the “Third World War”, and also wrongly identifies the Castro and Khruschev regimes (among others) as socialist – Nonetheless his perspective is that of a militant progressive fighter for his working peoples, in this case in Chiapas. Marcos clearly identifies the main enemy as “globalisation” – a process of active re-division of the world where:
” As a world system, neo-liberalism is a new war for the conquest of territory a new world war – the fourth. Like all major conflicts, this war is forcing national states to redefine their identity. The world order seems to have reverted to the earlier epochs of the conquests of America, Africa and Oceania . . . .Vast territories, wealth and, above all, a huge and available workforce lie waiting for the world’s new master . . the fourth world war is being conducted between major financial centres in theatres of war that are global in scale and with a level of intensity that is fierce and constant. . . One of its first victims has been the national market. . . . One of the fundamental bases of the power of the modern capitalist state, the national market, is wiped out by the heavy artillery of the global finance economy. The new international capitalism renders national capitalism obsolete and effectively starves their public powers into extinction. The blow has been so brutal that sovereign states have lost the strength to defend their citizens’ interests. . . . Are megalopolises replacing nations? No, or rather not merely that. They are assigning them new functions, new limits and new perspectives. Entire countries are becoming departments of the neoliberal mega-enterprise. Neoliberalism thus produces, on the one hand, destruction and depopulation, and, on the other, the reconstruction and reorganisation of regions and nations.”
“Why We Are Fighting-The fourth world war has begun” By Sub-Commandant Marcos; Zapatista National Liberation Army (ZNLA).” September 1997; In Le Monde Diplomatique; Also at: web site:
Marcos sees during all, this an increased polarisation of the world between ultra-rich and poor. Of course he is right. The raw reality and figures behind today’s world human misery, are frankly very difficult to fully comprehend:
“The earth has five billion human inhabitants: of these, only 500 million live comfortably; the remaining 4.5 billion endure lives of poverty. The rich make up for their numerical minority by their ownership of billions of dollars. The total wealth owned by the 358 richest people in the world, the dollar billionaires, is greater than the annual income of almost half the world’s poorest inhabitants, in other words about 2.6 billion people. . . . . In the 1960s and 1970s, the number of poor people in the world (defined by the World Bank as having an income of less than one dollar per day) rose to some 200 million. By the start of the 1990s, their numbers stood at two billion. . . . The world’s economically active population (EAP) went from 1.38 billion in 1960 to 2.37 billion in 1990. A large increase in the number of human beings capable of working and generating wealth. But the new world order arranges this workforce within specific geographical and productive areas, and reassigns their functions (or non-functions, in the case of unemployed and precarious workers) within the plan of world globalisation. The world’s economically active population by sector (EAPS) has undergone radical changes during the past 20 years. Agriculture and fishing fell from 22 % in 1970 to 12 % in 1990; manufacture from 25 % to 22 %; but the tertiary sector (commercial, transport, banking and services) has risen from 42 % to 56 %. In developing countries, the tertiary sector has grown from 40 % in 1970 to 57 % in 1990, while agriculture and fishing have fallen from 30 % to 15 % (2). This means that increasing numbers of workers are channelled into the kind of activities necessary for increasing productivity or speeding up the creation of commodities. The neoliberal system thus functions as a kind of mega-boss for whom the world market is viewed as a single, unified enterprise, to be managed by “modernising” criteria. But neoliberalism’s “modernity” seems closer to the bestial birth of capitalism as a world system than to utopian “rationality”, because this “modern” capitalist production continues to rely on child labour. Out of 1.15 billion children in the world, at least 100 million live on the streets and 200 million work – and according to forecasts this figure will rise to 400 million by the year 2000. In Asia alone, 146 million children work in manufacturing. And in the North too, hundreds of thousands of children have to work in order to supplement family incomes, or merely to survive. There are also many children employed in the “pleasure industries”: according to the United Nations, every year a million children are driven into the sex trade. The unemployment and precarious labour of millions of workers throughout the world is a reality which does not look set to disappear. . . . In the countries of the Organisation for Economic Cooperation and Development (OECD), unemployment went from 3.8 % in 1966 to 6.3 % in 1990; in Europe it went from 2.2 % to 6.4 %. The globalised market is destroying small and medium- sized companies. With the disappearance of local and regional markets, small and medium producers have no protection and are unable to compete with the giant transnationals. Millions of workers thus find themselves unemployed. One of the absurdities of neoliberalism is that far from creating jobs, the growth of production actually destroys them. The UN speaks of “growth without jobs”. But the nightmare does not end there. Workers are also being forced to accept precarious conditions. Less job security, longer working hours and lower wages: these are the consequences of globalisation in general and the explosion in the service sector in particular. . . . The number of those coming within the ambit of the United Nations High Commission for Refugees (UNHCR) has grown disproportionately from 2 million in 1975 to more than 27 million in 1995.”
“Why We Are Fighting-The fourth world war has begun” By Sub-Commandant Marcos; Zapatista National Liberation Army (ZNLA).” September 1997; In Le Monde Diplomatique; Also at: http://www.monde-diplomatique.fr/en/1997/09/?c=marcos
Summary: Globalization entails one single world market; enormous inter-penetration of capital; minimization of national-border interference’s with trade and commerce; fostering of an indifference to national differences.; at enormous and incalculable costs to the world’s working peoples.
2. Our Current Analytic Task As Marxist-Leninists
When Marxist-Leninists raise the matter of “Nationalism Today, in the era of Globalisation” – we mean the relevance of the Marxist-Leninist theory of the colonial question, and the relations between the imperialists themselves and the national liberation struggle.
Naturally the views of Dunning, Hobsbawm, Thurow upon the National Question today, stand opposed to the views of Lenin and Stalin, as stated long ago in build-up to the world of the socialist revolution in Russia that they shepherded into being. But, perhaps there have been so many changes in the world that a qualitative change has taken place to render the views of Lenin and Stalin on the importance of the National Question as being immaterial?
After all times change, and dialectical materialists recognise reality. Moreover if revolutionary socialists adopt the strategy and tactics that will further the socialist revolution and not retard it, these must be consistent with reality.
All who call themselves Marxist-Leninist accept the role of Stalin as the defender of Lenin’s work. In this context, Stalin pointed out in the last work he wrote in 1951 – “The Economic Problems of the USSR” – that the economic positions of capitalism are constantly changing. He explicitly therefore asks whether adjustments to Lenin’s and analyses are needed:
“a) Can it be affirmed that the thesis expounded by Stalin before the Second World War regarding the relative stability of markets in the period of the general crisis of capitalism is still valid?
b) Can it be affirmed that the thesis expounded by Lenin in the spring of 1916 – namely that in spite of the decay of capitalism, “on the whole, capitalism is growing far more rapidly than before” – still valid.”
I think that it cannot. In view of the new conditions to which the Second World War has given rise, both these must be regarded as having lost their validity.”
Stalin J.V: “The Economic Problems of the USSR”; Foreign Languages Press Peking; p.32
Stalin agrees that there must be a change of the assessment of capitalism. But he is talking only in terms of the relative strength of capitalism, and not about its fundamental attributes. Stalin here recognised that new conditions had placed a brake upon un-fettered capitalist development. Naturally Stalin explicitly placed this brake, in the context of the successful defense of socialism in the USSR against Hitlerite and capitalist attacks, the victory towards the peoples Democracies world wide; and the denial of markets to the world capitalists, by virtue of the link between the Peoples Democracies and the USSR:
“Disintegration of the Single World Market & Deepening of the Crisis of the World Capitalist System: “The disintegration of the single all-embracing world markets must be regarded as the most important economic sequel of the Second World War and of its economic consequences. It has had the effect of further deepening the general crisis of the world capitalist system.”;
Stalin; Ibid; p. 30.
“China and other, European , people’s democracies broke away from the capitalist system and, together with the Soviet Union, formed a united and powerful socialist camp confronting the camp of capitalism. The economic consequence of the existence of two opposite camps was that the single all-embracing world market disintegrated, so that we now have two parallel markets confronting one another.. It should be observed that the USA & Great Britain and France, themselves contributed – without themselves desiring it of course – to the formation & consolidation of the new parallel world market. They imposed an economic blockade on the USSR, China, & the European people’s democracies, which did not join the “Marshall Plan” system thinking thereby to strangle them.”;
Stalin; p. 30-31 Ibid;
If that brake had been placed upon capitalism by the socialist system of the USSR and the development towards People’s democracy, it is inevitably true that the destruction of socialism in the USSR in 1953 and the revisionist led distortions inside the People’s democracies would lead to a resurgence of the capitalist system.
Returning to Stalin’s lifetime, Stalin pointed out this brake on capitalist development by 1951, meant that markets would decrease and competition between capitalism would grow:
“But it follows from this that the sphere of exploitation of the world’s resources by the major capitalist countries (USA, Britain, France) will not expand but contract; that their opportunities for sale in the world market will not expand, but contract; that their opportunities for sale in the world market will deteriorate and that their industries will be operating more and more below capacity. That is in fact, what is meant by the deepening of the general crisis of the world capitalist system in connection with the disintegration of the world market”.
Stalin; Ibid; p.31.
Of course this means that capitalist wars remain inevitable.
“Part 6: Inevitability of Wars between Capitalist Countries”; Some comrades think that owing to the development of new international conditions since the Second World War, wars between capitalist countries have ceased to be inevitable. These comrades are mistaken Outwardly everything would seem to be going well”; the USA has put Western Europe, Japan, and other capitalist countries on rations; Germany (Western), Britain, France, Italy & Japan have fallen into the clutches of the USA and are meekly obeying its commands. But it would be mistaken to think that things can continue to “go well” for ” all eternity”, that these countries will tolerate the domination and oppression of the United States endlessly, that they will not endeavor to tear loose from American bondage and take the part of independent development.”
Stalin; Ibid; p.33.
While no one in their right minds would dispute that capitalist wars are inevitable nowadays, following the USA-led NATO attack upon the Balkans, there are still some who claim that significant changes have occurred to capitalism that demand a change in our overall strategy and tactics. It is our task today to begin to prepare an answer to this.
There have indeed been some significant changes since Stalin wrote the Economic Problems. We itemize some of those most important in our view:
The most important political change has been the fall of all Socialist states and their reversion to a single world market driven by profit. This has temporarily prolonged the final phases of international capitalism and imperialism both by providing a new market; but more importantly by temporarily “discrediting” Marxism-Leninism. The removal of the brake of the socialist countries, has meant a temporary revival and growth of capitalism. This has been analysed before by Bland (See “Restoration of Capitalism In the USSR”; Wembley 1984; see also web site of Alliance for the whole book at: GO TO SUBJECT INDEX).
The advent of new technology, exemplified by the computer. These new technologies have transformed both the role of “financial capital” and that of “industrial capital”. In financial capital their impact has been to dramatically expand the role of money and what is considered as “money”. In industrial capital they have tremendously accelerated the rate of exploitation of workers; accelerated the flooding of markets with goods chasing buyers; by virtue of the cost of computer aided systems dramatically enhanced the rate of the fall of profit predicted by Marx. (these events have all been analysed in some detail by Alliance in :”Number 3: Protectionism, Inflation & Free Trade. Economics of the 20th Century”; Toronto 1993; Also on the web site of Alliance: See Inflation in subject index at: GO TO SUBJECT INDEX).
The transformation of overt naked colonialism into disguised neo-colonialism. (A neo-colony ie. a former colony which has become nominally “independent” but which continues to have its economic system largely controlled for the benefit of the ruling class of the same dominating Great Power which formerly ruled it directly). This has led to at least three specific changes. Firstly is the dispersal of industrial localization to the periphery – with a consequent rise in unemployment in the former Western industrialized countries and the dramatic fall in their industrialized bases in terms of plants actually operating on their “home” territory. Secondly it has resulted in the evolution of some industrial competitors usually termed Newly Industrialised Countries (NIC). These weak though they might be, and though they might initially start under the control of foreign imperialism, they end up offering some potential or actual competition to the giants of the so-called Triad (The USA, the European powers of the European Economic Community EEC); and Japan. In combination with (ii) above, the inevitable consequence has been to accelerate the general crisis of over-production. Thirdly, in association with (ii) above, there has been a progressive NARROWING of the space (or as Lenin termed it “There is no Chinese wall between the first and the second stage of the revolutions”) between the first democratic stage of the colonial revolution and the second socialist stage. This has NOT eliminated the need for the first stage in many neo-colonial countries, but it has made the allies of the working class and the peasantry – the national bourgeois even more weak-willed and vacillating than before. (Alliance has discussed these issues in some detail, before in issue 29 & 5 in particular. For issue 5 entitled: The Role Of The Bourgeoisie In Colonial Type Countries – What Is The Class Character Of The Indian State ?” See:
For Issue 28 entitled : Upon The Polemic Between Proletarian Path & Revolutionary Democracy – Concerning The Stage Of The Indian Revolution. See:
See also Alliance on Lenin and Stalin’s views on the Chinese revolution” – on the web at:(See under China at GO TO SUBJECT INDEX)
But we will argue that none of these has fundamentally changed either the nature of capitalism or the general picture of world imperialism and its need to dominate smaller economies of independent nations.
Summary: In 1951 Stalin had identified that the changes associated with socialist development in the USSR and its leadership of the People’s “Democracies” had retarded the progress of capitalism. It is natural that the demise of socialism has led to its changes on the function of capital. Other major political changes over this period include the development of the NIC’s and the transformation of naked colonialism into disguised neo-colonialism. Finally some major technological advances related to the computer industry has taken place.
3. Has Capitalism Fundamentally Changed Up to 1951?
Granted these dramatic changes have taken place, it is our purpose in assessing the impact of these changes. But in trying to assess these changes and their impact upon our revolutionary strategy, it might help to ask:
“What is the basic law of capital?” – and then to ask: “Whether the basic law of capitalism has changed?”
Stalin asked this question in 1951. Of course Stalin’s main intent was to compare and contrast the economic laws under socialism in the USSR, with those of capitalism. (Other intents included the fighting of internal revisionism in the USSR as led by Khruschev and Vosnosenksy. The Communist League (UK) has dealt with these matters in separate publications: (Reprinted by Alliance as Issue 17: “On Revisionist Economics”; Toronto 1995; See also ‘Varga & Vosnosensky at GO TO SUBJECT INDEX web site Alliance).
But there is good reason for us now, to re-consider Stalin’s views on the essential laws of capitalism with respect to the current views on capitalism in the era of “globalisation”. After all Stalin reasoned that it was important to explain capitalism’s functioning. This is no less true today. As Stalin pointed out:
“The importance of the basic economic law of capitalism consists among other things, in the circumstance that since it determines all the major phenomena in the development of the capitalist mode of production, its booms and crises, its victories and defeats, its merits and demerits, – the whole process of its contradictory development – it enables us to understand & explain them”;
Stalin Ibid: “Economic Problems Of Socialism In the USSR”; “Part 7: The Basic Economic Laws of modern Capitalism & Socialism”; Ibid; p. 40.
Before re-examining Stalin’s views, it should be remind ourselves that indeed Stalin made the observation that Lenin’s and Stalin’s estimations of the stage of capitalism’s expansion in 1915 and 1930, needed to be revised in 1951 (See above). But at no time did he challenge the characterization of capitalism as being “monopoly capitalism”. To the contrary Stalin constantly in his writing of “Economic Problems Of Socialism In The USSR”, identifies “modern capitalism” with “Monopoly capitalism”. In the following quotations we have bolded these references.
Thus Stalin at no stage gives any indication of appraising Lenin’s estimation of “monopoly” capitalism as being fundamentally in need of change.
So what Laws of Capitalism did Stalin evaluate for their capacity to stand as the “basic economic law of capitalism
First he assessed whether the root economic law of capitalism was the Law of Value, and he answered it was not, nor was the “law of competition and “the law of uneven development”:
“Is the Law of Value the basic economic law of capitalism? No the law of value is primarily a law of commodity production. It existed before capitalism, and like commodity production will continue to exist after the overthrow of capitalism Not only does it not determine the essence of capitalist production and the principles of capitalist profit it does not even pose these problems. Therefore it cannot be the basic economic law of modern capitalism. For the same reasons, the law of competition and anarchy of production or the law of uneven development in the various countries cannot be the basic economic law of capitalism either.”
Stalin Ibid: “Economic Problems Of Socialism In the USSR”; “Part 7: The Basic Economic Laws of modern Capitalism & Socialism”; Ibid; p. 37-38.
Stalin then asked whether the basic law was the obtaining of the “Average rate of profit?” He answered that it was not:
“It is said that the law of the average rate of profit is the basic economic law of modern capitalism. That is not true, Modern capitalism, monopoly capitalism cannot content itself with the average profit, which moreover has a tendency to decline, in view of the increasing organic composition of capital. It is not the average profit but the maximum profit that modern monopoly capitalism demands, which it needs for more or less regular extended reproduction.”
Stalin Ibid: “Economic Problems Of Socialism In the USSR”; “Part 7: The Basic Economic Laws of modern Capitalism & Socialism”; Ibid; p. 37-38.
Stalin did identify the Law of Surplus Value as the most “appropriate to the concept of a basic economic law of capitalism”. But he pointed out that this was “too general a law and does not cover the problem of the highest rate of profit the securing of which is a condition for the development of monopoly capitalism.” :
“Most appropriate to the concept of a basic economic law of capitalism is the law of surplus value, the law of the origin and growth of capitalist profit. It really does determine the basic features of capitalist production. But the law of surplus value is too general a law; it does not cover the problem of the highest rate of profit; the securing of which is a condition for the development of monopoly capitalism. In order to fill this hiatus, the law of surplus value must be made more concrete and developed further in adaptation to the conditions of monopoly capitalism, at the same time bearing in mind that monopoly capitalism demands not any sort of profit but precisely the maximum profit. That will be the basic law of modern capitalism.”
Stalin Ibid: “Economic Problems Of Socialism In the USSR”; “Part 7: The Basic Economic Laws of modern Capitalism & Socialism”; Ibid; p. 38-39.
So what according to Stalin IS the “Basic economic law of modern capitalism”? He replies:
“The main features and requirements of the basic economic law of modern capitalism might be formulated roughly in this way: the securing of the maximum capitalist profit through the exploitation, ruin, and impoverishment of the majority of the population of the given country, through the enslavement and systematic robbery of the peoples of other countries, especially backward countries , and lastly through wears and militiarization of the national economy which are utilized for the obtaining of higher profits.”
Stalin Ibid: “Economic Problems Of Socialism In the USSR”; “Part 7: The Basic Economic Laws of modern Capitalism & Socialism”; Ibid; p.39.
Alliance feels that this operating definition FULLY stands as the current operating definition of the basic economic law of capitalism and is un-necessary to modify. We argue, that if this is so, then the rest of Stalin’s understanding of the connection between the stage of “modern monopoly” capitalism and the National Question remains – basically intact.
We should note the intimate connection of the National Question, the Colonial Question and the matter of “modern monopoly capitalism” – linked into one seminal analysis by Lenin, in “Imperialism the Highest Stage of Capitalism”; written in 1916.
In this regard, Stalin gives us no indication in 1951 that there is any need to break the chain of reasoning between the stage of “modern monopoly capitalism”, the chase for markets and the “enslavement and plunder of colonies and backward countries”:
“It is said that the average profit might nevertheless be regarded as quite sufficient for capitalist development under modern conditions. That is not true. The average profit is the lowest point of profitableness, below which capital production becomes impossible. That is not true. The average profit is the lowest point of profitableness, below which capitalist production becomes impossible. But it would be absurd to think that in seizing colonies, subjugating peoples and engineering wars, the magnates of modern monopoly capitalism are striving to secure only the average profit. No, it is not the average profit, nor yet super-profits- which as a rule represents only a slight addition to the average profit- but precisely the maximum profit that is the motor of monopoly capitalism precisely the necessity of securing the maximum profits that drives monopoly capitalism to such risky undertakings as the enslavement and systematic plunder of colonies and other backward countries, the conversion of a number of independent countries into dependent countries, the organization of new wars – which to the magnates of modern capitalism is the “business” best adapted to the extraction of the maximum profit – and lastly, attempts to win world economic supremacy.”
Stalin Ibid: “Economic Problems Of Socialism In the USSR”; Ibid; p. 39.
In the light of all the general hype about the “New Age of Computers” etc; we should give some specific considerations to the matter of new technologies. There is no doubt about the important and revolutionary impact of computing science upon daily life and capitalist production. But has the advent of new technology OF ITSELF changed the situation vis-à-vis capital’s functioning? Stalin would argue that even dramatic technological changes are subordinate to the operation of the fundamental basic economic law of capital: The securing of the highest profit levels:
“Capitalism is in favour of new techniques when they promise it the highest profit. Capital is against new techniques and for resort to hand techniques when the new techniques do not promise the highest profit.”
Stalin Ibid: “Economic Problems Of Socialism In the USSR”; “Part 7: The Basic Economic Laws of modern Capitalism & Socialism”; Ibid.; p. 40.
We will argue below that the advent of computerisation has simply exacerbated the impact of Lenin’s analysis, and that it has not fundamentally changed the relationship between the dependent countries and the large metropolitan blocks.
All this must lead us to considering the economic forces described by Lenin in “Imperialism – The Highest Stage of Capitalism”, written in. Have there been such critical economic changes since Lenin described the features of the “highest stage of capitalism”, as being imperialism in his classic work, as to lead us to need to revise his thoughts?
Summary: Up to 1951, there was no essential change in the operation of “modern monopoly” capitalism, that operated out of the necessity to extract the highest possible rate of profit and which impelled it to predatory wars and enslavements of dependent countries. The essential basic economic law underlying its development, seems to Alliance NOT to have changed since 1951.
5. Lenin’s “Imperialism As the Highest Stage of Capitalism”.
Lenin defined imperialism as a very specific stage where the earlier stages of capitalism were being mutated into their opposite. By this he meant that a marked feature of capitalist development is “free competition” and individual enterprise. This was being turned into its opposite – cartelisation and monopoly:
“Imperialism emerged as the development and direct continuation of the fundamental attributes of capitalism in general. But capitalism only became capitalist imperialism at a definite and very high stage of its development, when certain of its fundamental attributes began to change into their opposites, when the features of the epoch of transition from capitalism to a higher social and economic system began to take shape and revealed themselves in all spheres. Economically, the main thing in this process is the displacement of capitalist free competition by capitalist monopoly. for Free competition is the basic feature of capitalism, and of commodity production generally; Monopoly is the exact opposite; but we have seen the latter being transformed into monopoly before our eyes, creating large-scale industry and eliminating small industry, replacing large-scale industry by still larger-scale industry, and carrying concentration of production and capital to the point where it has grown and is growing monopoly: cartels, syndicates and trusts, and merging with them, the capital of a dozen or so banks manipulating thousands of millions. At the same time monopoly which has grown out of free competition, do not eliminate the latter, but exist over it and alongside of it, and thorny gives rise to a number of very acute, intense antagonisms, friction and conflicts. Monopoly is the transition from capitalism to a higher stage. If it were necessary to give the briefest possible definition of imperialism we should have to say that imperialism is the monopoly stage of capitalism. Such a definition would include what is most important, for on the one hand finance capital is the bank capital of the a few very big monopolist banks, merged with the capitals of the monopolist associations of industrialists; and on the other hand the division of the world is transition from a colonial policy which ahs extended without hindrance to territories unseized by any capitalist power, to a colonial policy of monopolist division of the territory of the world, which has been completely divided up.”
V.I. Lenin: “Imperialism – The Highest Stage of Capitalism”; ” In Selected Works; Moscow; 1977; p.699-700.
In the same section, Lenin distills the key features of imperialism:
“We must give a definition of imperialism that will include the following five of its basic features:
1) The concentration of production and capital has developed to such a stage that it has created monopolies which play a decisive role in economic life;
2) The merging of bank capital with industrial capital and the creation on the basis of this “finance capital”, of a financial oligarchy;
(3) the export of capital as distinguished from the export of commodities acquires exceptional importance;
(4) the formation of international monopolist capitals associations which share the world among themselves, and
(5) The territorial division of the whole world among the biggest capitalist powers is completed.”
Lenin Ibid; p. 702.
We propose here to consider whether any of these “basic features” identified by Lenin, have changed to such a qualitative degree, that we would agree that “globalisation” is a distinctly new phase in capitalist development and mandates a different strategy and tactics for the proletariat and peasant working masses of the world.
The concentration of production and capital has developed to such a stage that it has created monopolies which play a decisive role in economic life;
Lenin pointed out that the vast scale of company mergers challenged the state.
This process has vastly accelerated. Even by 1951, Stalin was already commenting that this feature of modern monopoly capitalism was far more pervasive than it had been before. He proposed that the term “coalescence” was now superseded by the term “subjugation of the state machine to the monopolies”:
“(4) Coalescence of the monopolies with the state machine: The word “coalescence” is not appropriate. It superficially and descriptively notes the process of merging of the monopolies with the state, but it does not reveal the economic import of this process. The fact of the matter is that the merging process is not simply a process of coalescence, but the subjugation of the state machine to the monopolies. The word “coalescence” should therefore be discarded and replaced by the words “subjugation of the state machine to the monopolies”.
Stalin Ibid: “Economic Problems of Socialism in the USSR”; “Part 8.Other Questions.”; Ibid; p. 43-44
But nowadays, the process is even more highly concentrated leading to vast giants of corporations.
“The pace of corporate change is impressive. Hardly a week goes by without the media announcing some new marriage between major companies, the creation of some new colossus, a mega-merger designed to create the super-giants of the future. Among the most spectacular, we have recently had the acquisition of the Chrysler auto company by Daimler-Benz (for a sum of $43 billion); the Citicorp bank by Travelers ($82.9 billion); the Ameritech telephone company by SBC Communications ($60 billion); the pharmaceuticals giant Ciba by Sandoz ($36.3 billion, creating Novartis); MCI Communications by WorldCom ($30 billion); the Bank of Tokyo by Mitsubishi Bank ($33.8 billion); the Société de Banque Suisse by the Union des Banques Suisses ($24.3 billion); and the recent merger decision between the two historical giants of the German steel industry, Thyssen and Krupp, which, according to their managements, will generate a combined turnover of $63 billion In 1997 the total for mergers and acquisitions was running at upwards of $1,600 billion. The sectors most susceptible to this monolith-mania have been banking, pharmaceuticals, media, telecommunications, food and agro-industry and the auto industry. . . . . . As a result of successive consolidations, some firms have now achieved gargantuan proportions. Their turnovers are sometimes higher than the GNP of some industrialised countries. For instance, General Motors’ turnover is higher that the GNP of Denmark; Exxon’s is bigger than that of Norway, and Toyota’s is bigger than that of Portugal (François Chesnais, La Mondialisation du capital, Syros, Paris, 1997.). The financial resources available to these companies often exceed the financial incomes of whole countries, including major industrialised countries. They are also greater than the foreign exchange reserves held by most major countries’ central banks (François Chesnais, La Mondialisation du capital, Syros, Paris, 1997). . . . . . ” In the run-up to the millennium, we are witnessing a strange spectacle: the growing power of planetary business giants, against which the traditional countervailing powers (governments, parties, trade unions etc.) seem increasingly impotent. The main phenomenon of our age, globalisation, is in no sense under the control of governments. Faced with these giant corporations, the state is losing more and more of its prerogatives. The question is, can we, as citizens, really turn a blind eye to this new-style global coup d’état?”
Le Monde Diplomatique; June 1998: “Leader: Giant corporations, dwarf states”; by Ignacio Ramonet
The same Le Monde editorialist notes that the types of mergers now taking place go beyond the previous seen, in another way: They include areas that until now were the sacrosanct purview of Government such as in the auto industry:
“The mergers are happening in areas that would once have been considered taboo. For instance, at one time most governments would have seen the auto industry, along with steel and telecommunications, as a sector of prime strategic importance. However, this has not been the case in Britain for the past twenty years and, since the purchase of Chrysler by Germany’s Daimler-Benz, it is no longer the case in the United States either. . . . .”
Le Monde Diplomatique; June 1998: “Leader: Giant corporations, dwarf states”; by Ignacio Ramonet
In this process nothing is “off-limits”, and the signal for all this was the advent of the de-nationalizing of key sectors of the British Industrial heights. This socially destructive process now is dignified and known by the name of “privatisation”, and was initiated by Thatcher:
“In a kind of push-pull effect, as the mergers lead to the creation of ever larger corporations, the advance of privatisation means that the state is reduced to the stature of a dwarf. Ever since Margaret Thatcher launched the first privatisations in the early 1980s, more or less everything has been up for sale. Most governments, from North to South, from right to left, have embarked on massive pruning operations in their state apparatuses. Between 1990 and 1997, at world level, governments have off-loaded onto a grateful private sector sections of their national heritage to the tune of $513 billion ($215 billion in the European Union alone). Privatised concerns are particularly valued by investors since they may have benefited from restructuring financed by the state and are also likely to have had their debts wiped out. They are very attractive propositions. Particularly the public amenities (such as electricity, gas, water, transportation, telecommunications and health), which promise a highly profitable, regular income which is free of risk and where prior investment made by governments is good for decades to come.”
Le Monde Diplomatique; June 1998: “Leader: Giant corporations, dwarf states”; by Ignacio Ramonet
What explains this current super fervor of mergers? Some of the same factors identified earlier play in, such as the vast amount of money and credit expansion:
“What explains this ferment of activity? Operating within a context of increasing globalisation, the major companies of the Triad (North America, the European Union and Japan) are making the most of economic deregulation in order to establish truly global presence for themselves. They are looking to become major players in the world’s leading countries and aiming to take significant shares in those countries’ markets. A combination of factors such as the fall in interest rates (which prompts a shift from bonds into shares), a large quantity of capital seeking a way out of the Asian stock markets, the massive financial capabilities of the large pension funds, and the improved profitability of companies in Europe and the United States, has created a certain headiness in the stock exchanges of the West, and this is what lies behind the merger frenzy.”
Le Monde Diplomatique; June 1998: “Leader: Giant corporations, dwarf states”; by Ignacio Ramonet
But more mundane factors are also involved such as competition, securing of research & development (R &D) gains of competitors, and job cutting:
“From the predators’ point of view, such mergers offer several advantages. Competition from other companies can be eliminated by buying them up because in most cases these mergers arise not out of a desire to diversify, but as an attempt by competitor companies to achieve quasi-monopoly positions in their respective sectors (2); they also provide an opportunity to catch up in R&D terms, by taking over firms that are technologically more advanced; and finally they open the way to mass sackings under the pretext of cutting costs (for example, in its first year the merger between UK firms Glaxo and Wellcome resulted in the elimination of 7,500 jobs – one tenth of the total workforce).”
Le Monde Diplomatique; June 1998: “Leader: Giant corporations, dwarf states”; by Ignacio Ramonet
In Summary: We do not feel that this part of Lenin’s definition of imperialist monopoly capital has changed.
2) The merging of bank capital with industrial capital and the creation on the basis of this “finance capital”, of a financial oligarchy.
Lenin identified that :
“Imperialism .. is marked by..the merging or coalescence of banking with industry..”
V.I.Lenin, ” Imperialism the highest stage of capitalism “
But Lenin emphasised that, despite merging of bank and industrial capital in imperialism, this stage brings about an increasing separation between industry and its main sources of financial investment, and an increasing dependence of the former upon the latter:
“Generally speaking, under capitalism.. money capital is separate from industrial or productive capital; the rentier living entirely on income obtained from money capital is separated from the entrepreneur.. Imperialism, or the rule of finance capital, is the highest stage of capitalism in which this separation reaches vast proportions. The supremacy of finance capitals over all other forms of capital means the rule of the rentier and of the financial oligarchy.”
V.I.Lenin, op cit; p. 53.
In the same work, Lenin drew attention to the:
“The extraordinary growth of .. the category of bondholders (rentiers).. who take no part in production, whose profession is idleness, The export of capital one of the essential bases of imperialism, still more completely isolates the rentiers from production and sets the seal of parasitism on the whole country that lives by the exploitation of the labour of several overseas countries and colonies.. The world has become divided into a handful of money-lending states on the one hand and a vast majority of debtor states on the other.. The rentier state is a state of decaying capitalism.”
V.I.Lenin, op cit.
But there have been several changes in the nature of the alliance between the wings of capital within one nation.
For an interim period the Banks were not the prime source of finance for capitalist industry. In Britain for example, banks (mainly merchant banks) own only:
“0.3%..of company shares.”
Cited in Combat, Communist League, London, Data from “Stock Exchange Official Year Book: 1984-85 ” London; 1985. p. 969.
Furthermore, banks in Britain provide only 6% of the external funding of industry in the form of loans and these have been traditionally short term loans to provide:
“Working (as opposed to investment) capital.. “
G.Ingham “Capitalism Divided”, Basingstoke, UK.1984. p.67-8.
Industry itself began to finance much of its own investments. The huge multi-nationals had such currency reserves that they eroded the power of the banks to some extent:
“The old economy is highly leveraged and deeply in debt. The emerging New Economy isn’t.. There has been enormous structural changes since the era not long ago, when the US corporate sector regularly incurred large financial deficits.. In the first quarter of 1992, Corporate America generated a financial surplus of $109.6 billion (US) – the largest such surplus in US history (Surplus is cash flow minus capital spending and working capital requirements)..Today’s huge surpluses stem from the fact that corporate cash flows in the New Economy – in industries like pharmaceutical, software and computers – exceed internal requirements to finance capital spending inventory and the like.. the shift to surplus is driving interest rates lower.. Gone are the days when the US sector was a net user of the personal saver’s savings.. The corporate sector is driving the US economy to a degree unthinkable in the old economy. Conventional wisdom that the economy is driven by consumer spending is no longer as true as it once was. “
Globe And Mail, Toronto, Business News. p.B26, Sep 22,1992.
These divisions between the wings of capital are recognised overtly by the business community. Thus when the U.S. Democrats were resistant to a monetary policy, preferring to have their own representative, an industrialist Mr. G.William Millar at the Federal Reserve Board “was seen by many within and outside the Federal Reserve System as being too closely tied to President Carter and insufficiently attuned to the needs of the financial sector, was replaced by Paul Volcker. As the Wall Street Journal later reported it:
“Wall Street shoved Volcker down Carter’s throat.”
G.Epstein, ‘Federal Reserve Behaviour and the limits of monetary policy in the current economic crisis. ‘ Contained in “The Imperilled Economy. Book One. ” New York. 1987. p. 250
In fact the relation between the profits of the financial capitalist class, and the industrial capitalist class are inversely related. This can be seen for the USA in the accompanying graph, on Graph 1.
GRAPH: PROFITS OF NON-FINANCIAL AND COMMERCIAL BANK CAPITAL USA 1973-1984 Inflation adjusted.
From: “Federal Reserve behaviour and the limits of monetary policy in the current economic crisis”.G.Epstein p.253. In: ” The Imperilled Economy ” New York. 1987.
We have discussed these matters before, in Alliance 3, referenced above. But as Lenin pointed out, “history moves in zig-zags”:
“History is moving in zigzags, and by round about waysit is un-dialectical, unscientific and theoretically wrong to regard the course of world history as smooth and always in a forward direction, without gigantic leaps back;”
V.I.Lenin Collected Works; Vol 22; pp 377-378 Albanian edition-cited in “Problems of Current World Development”; Institute to Marxist-Leninist Studies; CC of the PLA of Albania; Tirana 1979; p.71.
It should not be surprising therefore if there has been another change.
The relationship between Finance and industrial capital, did indeed go through “a divorce”, as first identified by Comrades of the Communist League. The Communist League and we have described this before in relation to the war between “monetarist” economists and their political representatives and the “Keynsian-laissez-faire” capitalism and their political and economic representatives.
However, the situation has again changed such that the enormous funds available from the explosion of the new forms of money and new computerized forms of “money trading” have fostered a new re-marriage between finance and commodity-industrial capitalism:
“Many in the Clinton Administration and in the U.S. Congress.. justify various schemes to enhance the power and profits of the financial industry. . . . The game has taken a radical turn in the new Congress as factions of the Senate Banking Committee and the Treasury Department have launched serious efforts which go beyond the melding of “financial services” to permit a full-scale marriage of banking and commerce — a total rollback of the Bank Holding Company Act’s proscription against banks and commercial corporations owning each other. .. breaching the wall of separation between banking corporations and commercial firms could bring about major changes in the economy — and enable corporate conglomerates to enhance their power through a new and powerful leverage of bank credit .. . .Undersecretary of the Treasury John (Jerry) Hawke, author of a draft plan being circulated within the administration, argues that financial reform cannot succeed without mixing banking and commerce. Hawke says that banks will be “handicapped” and “less competitive” unless the traditional prohibitions are lifted entirely. . . . … Senator Alfonse D’Amato, R-New York, chair of the Senate Banking Committee, has fired the opening shot in the campaign to allow common ownership, introducing a comprehensive package to tear down the existing wall between commerce and banking.. . . . . . the loudest and most forcible message has come from Paul Volcker, the former chair of the Federal Reserve Board and a long-time opponent of mixing banking and commerce. Volcker told a House Banking subcommittee in March that “modernization” was not “worth the risks and costs of embarking on a new experiment — an experiment foreign to our traditions and experience — of relaxing prohibitions on combinations of banking and commerce.”
Jonathan Brown: “The Monopoly Makers: A Dangerous Mix II The Case for Preserving the Separation Between Banking and Commerce”;. “The Multinational Monitor”; April, 1997 · Volume 18 · Number 4
In Summary: We do not feel that this part of Lenin’s definition of imperialist monopoly capital has changed.
3) The export of capital as distinguished from the export of commodities acquires exceptional importance;
In essence this has not changed in importance, But we feel that certain new elements should be considered
i) New Forms of Money and Credit
The advent of new technology from computerisation has meant the increase in rapid fluxes of “hot money” around the world in search of a profit. As Alliance 3 pointed out; the total amount of monies in the market place has rapidly increased. This led to the new markets of money trading. This in turn led to the further and new way of eroding the “national” policy decision-making capacity of any dependent nation. Thus we have seen the major crises initiated by single traders such as the rogue trader from Barings recently. The financial attacks on the currencies of many of the Asian countries show the depth of attack:
“Globalization is in crisis. That is the most profound meaning of the ongoing Asian financial meltdown. The Asian meltdown was caused in large part by South Korea, Thailand, the Philippines, Malaysia and Indonesia’s heavy reliance on short-term foreign loans. When it became apparent that private enterprises in those nations would not be able to meet their payment obligations, international currency markets panicked. Currency traders rushed to sell their won, baht, pesos, ruppiah or ringgit. As the traders converted their money back into dollars, the Asian currencies plummeted, making it impossible for the Asian nations to pay off their loans (which had to be repaid in dollars or other foreign currencies, and therefore appeared more expensive after the devaluation). For reasons that included corruption and insufficient financial regulation, domestic and foreign banks made imprudent loans to companies that were engaging in wasteful, unnecessary and speculative investments in areas like real estate, and, especially in South Korea, to corporations that were overinvesting in manufacturing for markets that were saturated. Most of these problems are rooted in globalization. The unregulated financial flows into the region reflected IMF and World Bank influence and more generally the Asian countries’ strategy to attract foreign capital. But reliance on foreign investment left these countries vulnerable to the sudden withdrawal of foreign monies. The overinvestment in factories is the logical consequence of globalizers’ entreaty that all nations produce for export and deemphasize the local market. Both overinvestment and real estate speculation reflect insufficient and inequitably distributed domestic demand that would encourage investment in production to meet local needs.”
Editorial:”The Multinational Monitor: “Lessons from the Asian Meltdown”; January/February 1998 · Volume 19 · Numbers 1 & 2
Lately this has become so potentially destablising that the more far seeing captislast have recongised the need to put some sort of currency controls back on the agenda. This includes those like George Soros whose fortunes to large part are built on these very predatory tactics that he now condemns. Says the Multinational Monitor:
“Among the counterproductive conditions imposed by the IMF and Rubin on the Asian countries are requirements that they open up their economies further to foreign investors. (These demands relate to foreign “direct investment” in factories, agriculture and service operations ranging from tourism to banks, not just “portfolio” investment in stocks, bonds and currency.) Rubin has specifically and successfully pressured South Korea to open up its financial sector. Translation: the very U.S. banks which contributed to South Korea’s crisis now stand to buy up lucrative sectors of the South Korean economy. Similar demands have successfully been made in other troubled Asian countries. Not only is the double subsidy to the Big Banks unjust, it helps perpetuate the very problem it is designed to remedy. When the IMF bails out the banks — in effect providing free insurance — it sends a message: “Don’t worry about the downside of your international loans. As long as enough banks get in too deep, we’ll rescue you at the end of the day.” That encourages more reckless bank lending, since the banks can earn high interest on high-risk loans without having to absorb losses. In this sense, the U.S./IMF bailout of Wall Street in the 1995 Mexican economic collapse paved the way for the current crisis.”
Editorial: “The Multinational Monitor: “Lessons from the Asian Meltdown”; January/February 1998 · Volume 19 · Numbers 1 & 2.
ii) The Transfer of Export Capacity of Industrial Goods
In fact the imperialist metropolitan country bourgeoisie have utilized the various national bourgeoisie of the developing countries, to foster the growth of certain types of industry in those countries. This ahs allowed them to off-load certain more ecologically damaging industries to the more distant areas of the world; and utilize the lower cost of labour power to accrue further profit. They have been assisted by “bad loans” made both by the International Monetary Fund (IMF) and by banks – who essentially know that their loans will be “covered” by governmental agencies of the metropolitan world in the case of a default by the developing country:
“With their currencies in free fall, the Asian countries needed outside assistance to meet their debt payments and reinstate confidence in their economies. The United States squashed a Japanese attempt to lead a regional initiative to buttress the Asian economies, insisting that any rescue attempt be undertaken through the IMF. Enter the IMF and U.S. Treasury Secretary Robert Rubin. .. they diagnosed the essential Asian problem not as too much globalization, but too little. And they prescribed the most vicious version of globalization — structural adjustment. The IMF programs, agreed to by the Asian countries as a condition for receiving the money needed to pay off debts to foreign banks, forced interest rates up in an effort to re-attract foreign capital. They envision the Asian countries exporting their way out of economic distress. They therefore do not worry about depressed wages and workers thrown out of their jobs — indeed, in this view, lower wages make exports more competitive. And, out of concern that public sector debts will exacerbate balance-of-payments difficulties, they demand governments maintain balanced budgets, even as tax revenues drop due to declining economic activity. The overriding “logic” of these measures is that harsh medicine now will prevent worse pain later; that high interest rates, devalued currencies and balanced or surplus budgets will attract the foreign investment that will jumpstart the Asian economies.. . . In Indonesia, the IMF has forced the removal of fuel and food subsidies on which the poor have relied for three decades; food riots are becoming more prevalent as the Monitor goes to press. Economic collapse has led hospitals to conserve on the use of thread during surgery. In South Korea, the IMF has forced the closure of banks and corporations — one million workers are expected to be thrown out of their jobs by the end of the year. None of this pain has been shared by the big European, Japanese and U.S. banks that made bad loans in Asia. The IMF bailouts, and the complementary bailout packages from the U.S. and other rich countries, are all about injecting money into the Asian economies so they can pay back their foreign debts. The money comes in and goes out. The banks get their money, the countries contract new debts to the IMF and get stuck with the IMF austerity demands. By all rights, one of the consequences of the crisis should be that the banks which made bad loans in South Korea and elsewhere in Asia should have to eat their losses. The amounts at stake are not insignificant: U.S. banks’ exposure in South Korea is estimated to total more than $20 billion. BankAmerica alone reportedly has more than $3 billion in outstanding loans to South Korean firms, and Citicorp more than $2 billion. The other major U.S. banks with outstanding loans to South Korea include J.P. Morgan, Bankers Trust, the Bank of New York and Chase Manhattan.”
Editorial:”The Multinational Monitor: “Lessons from the Asian Meltdown”; January/February 1998; Volume 19 · Numbers 1 & 2
iii) The Direction of Foreign Direct Investment (FDI)
It is of interest that there ahs been a major change in the targets of FDI (i.e. capital exports). Whilst in 1915 the target was mainly the colonies, even then Lenin identified that the imperialist were interested in any geographical area of potential profit. Thus Lenin ridiculed Kautsky’s view that the essence of imperialism was that of an exploitation of rural areas:
“The characteristic feature of imperialism is precisely that it strives to annex not only agricultural regions, but even highly industrialized regions (German appetite for Belgium; French appetite for Lorraine), because 1) the fact that the world is already divided up obliges those contemplating any kind of new division to reach out for any kind of territory, and 2) because an essential feature of imperialism is the rivalry between a number of great powers in the striving for hegemony i.e. For the conquest of territory, not so much directly for themselves but also to weaken the adversary. (Belgium is chiefly necessary to Germany as a base for operation against England; England needs Baghdad as a base for operation against Germany etc.)”;
Lenin Op Cit; p. 702.
In this regard, there have been two changes:
One is the decline in capital exports from the United Kingdom; but this is entirely consistent with the British decline as an imperialist power.
This is Lenin’s law of “uneven development” i.e. swings in fortunes of different imperialisms.
But Secondly, the destination of much capital export has also changed. Much more than before it now flows towards the developed world:
“It was during the 1960’s that the UK began to re-build its pre-war reputation as a pre-eminent capital exporter, although unlike the interior years, the greater part of the new capital flows took the form of direct rather than portfolio investment. While traditional Commonwealth markets continued to attract the bulk of investment, an increasing amount of manufacturing and service activities by UK Multinational enterprises was beginning to be directed to the US and Continental Europe”;
Dunning Ibid; p.2.
Furthermore as Graph 2: below shows, outward and inward flows of FDI (Capital exports) to the USA either favoured the outward direction, or were balanced – on the whole – over the period 1970-1993 (Data from UNCTAD cited by Dunning Ibid; p. 307).
Graph 2: In hard copy only.
The reasons for this change of direction – from colonial to developed country – reflects several factors including A need to obtain higher research & Development; a need to obtain new markets; a need to incapacitate foreign competition. None of it ever did away with a continuing export of capital to the under-developed neo-colonies.
In Summary: We do not feel that this part of Lenin’s definition of imperialist monopoly capital has changed.
(4) the formation of international monopolist capitals associations which share the world among themselves,
We have already dealt with this under 5.(1) above.
(5) The territorial division of the whole world among the biggest capitalist powers is completed.”
It must be quickly acknowledged that this has not only not changed since Lenin’s day, but the operation of this colonialisation has if anything become even more intense.
The inevitable war for markets between the dominant imperialisms continue. Today, this competition has become even much more intense, than in Lenin’s day. The formation of huge trading blocks, of which the most obvious examples are: NAFTA; EEC; ASEAN.
Jaques Attali (former and Founding head of the European Bank for Reconstruction & Development) puts it this way:
“Having overcome their strategic subordination to the rule of military force with the end of ideological hostilities between the US and the Soviet Union, two new powers – a European sphere stretching from London to Moscow and a Pacific spheres based in Tokyo – will contest for supremacy Certainly the United States does not intend to retire voluntarily from center stage…In the 21st century a fierce struggle for supremacy will take place among cities, nations even continents.. The most likely result is likely to be the continued juxtaposition of two contending spheres (the Pacific and the European) with two centresIN the Pacific and in Europe questions must be asked: Who will have the dominant currency? Who will control defense? Where will the principal financial markets be located? Sadly none of this will cause tension to disappear.”
Attali J: “Millenium. Winners & Losers in the Coming World Order”; New York; 1991; pp.10; 40; 64-65;
In Summary: We do not feel that this part of Lenin’s definition of imperialist monopoly capital has changed
Overall Summary To Part 5:
We are forced to conclude that there has been no QUALITATIVE change in Lenin’s working definitions. We note only an EXACERBATION of ALL of the underlying tendencies to:
A crisis of over-production; an increasing
rate of exploitation; a decreasing rate of profit; a drive to further fights over markets; and an increasing need to subjugate dependent countries by imperialist capital.
The OBJECTIVE corollaries are that revolution is even more inevitable and even more needed to resolve the underlying contradictions of an increased socialized mode of production owned by a small, private and exclusively small coterie of profiteers.
OBJECTIVELY, the role of the National Question remains important, but the role of the national bourgeois – and its ability to fight against foreign capital is ever decreasing. That OBJECTIVELY means that the working class and peasantry have even greater responsibility to ensure they capture the leadership of national struggles as in East Timor, Kosova etc.
But – This is only hindered by the SUBJECTIVE weaknesses of the revolutionary movements and the lack of a unitary Marxist-Leninist party in each country.
6. Increasing Economic Crisis
We pointed out in Alliance 3, that neither Keynsian economics nor monetarist economics could solve the capitalist problem, Keynsian economics led to “cheapening” of money by inflation and depressed profits of the financiers.
Monetarism depressed the profits of industrialists and led to unemployment.
The capitalist system continues to lurch from crisis to crisis:
“For Southeast Asia the “golden age” of exponential growth, rising real incomes, and social consensus is over. After years of speculative euphoria and wildly inflating asset prices fuelled in large part by external capital flows, the East Asian financial bubble has burst with a vengeance. Southeast Asian countries have become the victims of the very process of economic internationalisation and integration to global capital flows which accounted for their accelerated, albeit highly uneven, development throughout the decade. While the first phase of economic takeoff of Southeast Asia’s “dragons” was triggered by large inflows of Japanese direct investment, their growth pattern has over the past decade been increasingly shaped and distorted since the early 1990s by vast nomad financial inflows seeking high returns on investment in emerging markets (Net private capital flows to emerging countries was multiplied by six since 1990, from $50 billion to over $300 billion in 1996.) In 1995-96 East Asia became the world’s chief recipient of foreign capital. Volatile by nature, these flows – portfolio investment, bonds, and bank loans with short maturities – sustained the very high rates of domestic investment (productive and speculative), capital accumulation, growth and indebtedness which fuelled the “East Asian miracle”, but they also quite classically inflated endogenous bubbles in the property and equity markets. The phenomenon was particularly evident in Thailand, epicenter of the crisis, where net external portfolio investment rose from $2.5 billion in 1994 to $4.1 billion in 1995, and short-term debt from $29.2 billion to $41.4 billion, despite warning signs of a coming deflation of the over-invested property sector and strains in the over-exposed banking system. The deflation of the Thai property and stock market bubble in 1996 (stock market values fell by 40%) prefigured the far more brutal crisis which struck this year Currency speculation began against the Thai baht in May 1997 and then spread in waves to the rest of the region in the summer, leading to the massive and uncontrollable repatriation of capital which followed. The impact of the shock was in direct proportion to the dependence of these economies on external flows. By contrast, far less internationalised economies such as India or Vietnam have been largely insulated from the crisis. . The 25-40% depreciation of local currencies has mechanically increased foreign debt. At the end of October, Indonesia’s debt, already $110 billion (50% of GNP), increased by 37%, that of Thailand (43% of GNP) by 35% and that of Malaysia by 27%. As these are mostly private debts contracted by local banks borrowing on the international inter-bank market for onward lending, at enormous interest rate differentials, to now insolvent domestic customers, the depreciations have caused a wave of defaults in already shaky banking systems. Nor are these depreciations likely to lead to an export-led recovery. The region’s manufacturing sector will be penalised by high-interest rates regimes (bond spreads have exploded since the beginning of the crisis), designed to reassure foreign investors. While the high import content of Asian exports, notably in the electronic sector (where products are assembled from components manufactured outside the exporting country) means that there will be little competitive gain accruing from depreciation. These mechanical deflationary effects will be compounded by the dampening effects of austerity cures and “stabilisation programmes” demanded by the International Monetary Fund (IMF) in exchange for financial aid packages designed to shore up the region’s financial markets ($23 billion in Indonesia and $17 billion in Thailand).”
Le Monde Diplomatique; “Asia’s Financial Crisis, An Uncontrollable Contagion. A turning point for globalisation by Philip S. Golub; January 1998
The Great Surge in the markets is clearly a part of a “bubble economy”; as even very recent scares revealed:
“Stock and bond prices fell around the world yesterday as data showing higher wholesale prices in the US and cautionary remarks on equity prices by Alan Greenspan, chairman of the Federal Reserve, combined to fuel investors’ fears of imminent interest rate rises. On Wall Street the Dow Jones Industrial Average fell by 266.9 points, or 2.6 per cent, to 10,019.7, having dipped briefly below the 10,000 level for the first time in six months. It ended the week down 5.9 per cent, or 630 points, its largest weekly point drop. Bonds rallied slightly after stock prices fell, and the long bond yield dropped to 6.266. The DAX index in Frankfurt followed three days of 1 percentage point declines with a further 0.7 per cent loss. In Paris, the CAC 40 fell 1.3 per cent, while in London, the FTSE 100 index dropped through the 6,000 level, falling 132.1 points to 5,907.3. Earlier the Tokyo market dropped 1 per cent, while Singapore and Malaysia were more than 2 per cent lower. The dollar fell sharply across the board, hitting seven-month lows against the euro, and dropping rapidly against the yen and sterling. The euro pushed above $1.09 in London trading before settling just below that level, a cent and a half up on the day. With the imminent 12th anniversary of Black Monday, some traders saw echoes of 1987 when a falling dollar, rising US trade deficit and rising bond yields prompted a stock market crash. Yesterday’s rout followed a warning late on Thursday Mr. Greenspan that markets might be underestimating the degree of riskiness of equity investments. The negative impact of the remarks was reinforced by the Commerce Department’s report yesterday that US wholesale prices jumped by 1.1 per cent in September from the previous month, the fastest rate in nine years, driven by increases in food, energy, tobacco and car prices. The unusual concurrence of inflationary factors led some economists to suggest the producer price figures might not reflect a broader upward trend in prices. Fuel costs have been rising for some time in response to the global increase in oil prices and food costs are always volatile on a monthly basis. Excluding these components, the core index increased by 0.8 per cent. But this figure was distorted by a once-off 8.4 per cent rise in tobacco prices in response to legal settlements, and a 2 per cent rise in car prices. If these are excluded the increase in the index drops to just 0.3 per cent. But many economists warned that the overall trend in prices was clearly upward”.
“World stock prices fall as fears grow of rising inflation”; By Gerard Baker in Washington, Lesia Rudakewych in New York and Philip Coggan in London “, Financial Times, Saturday October 16 1999
There is also a great over-production of goods with the inevitable anarchic glut of goods amidst increasing poverty, that is characteristic of the capitalist systems.
7. What This Means for The National Question
We think that both the recent Asian crises and the currency manipulations in Malaysia, show the first implications for a foreign independent nation trying to stand up to foreign capital. The next stage of smashing defiance is shown by the USA_NATO led aggression in the Kosovan war and the more recent East Timor crisis and war.
Both show the Implications of globalisation for the National Question for Marxist-Leninists today.. These can be codified as below:
i) Trample national rights by both economic and currency manipulations via speculation; and denial of foreign markets for countries that stand defiant;
ii) If continued resistance to the will of the imperialist countries occurs, open invasions on the pretext of “international law and order”;
iii) The resulting denial of national rights means the current (i.e. today’s – even in the era of so called “globalisation”) validity of Lenin’s original formulation regarding the strategy and tactics of the revolution in colonial type countries. These were essentially formulated at the Second Congress of Comintern. We have discussed these elsewhere in detail and their application and their revisionist distortions by Trotsky and Kussinen (See Alliance 5; Alliance 29); by Khruschev (See Alliance 25 January 1997); and by Ho Chi Minh (See Alliance 27 December 1997).
iv) Marxist-Leninists must avoid false designations of “national status” as in the so called “Black Nation” of the USA (See Alliance 23); while also avoiding support to the bleating of Nationalists of the smaller “minor” partners of capital and imperialism who while being imperialists are themselves subject to predation by bigger imperialisms (e.g. The minor partners of imperialism like the Canadian bourgeoisie etc.)
v) Marxist-Leninists must continually strive to win the leadership of the national liberation struggles that continue to break out, especially since the historical space for the progressive potential for the national bourgeoisie is ever decreasing in the era of greater inter-penetration of capitalism and imperialism.
Lenin’s Differentiation of the “bourgeois-democrat” and the “nationalist-revolutionary”
In brief here, the only change made in Lenin’s original Draft Theses as adopted by the Second Comintern Congress was to make clear that the working class in a colonial type country should support a bourgeois-led movement only if it was genuinely revolutionary- the term “bourgeois democratic” being replaced by the term “nationalist-revolutionary”:
“We came to the conclusion that the only correct thing to do was .. nearly everywhere to substitute the term “nationalist-revolutionary” for the term “bourgeois-democratic”. The meaning of this change is that we Communists should and will, support bourgeois liberation movements in the colonial countries only when these movements are really revolutionary.”
Lenin. Report of the Commission of the National and Colonial Questions. 2nd Congress CI, In Selected Works”, Volume 10, London, 1946, p.241.
Lenin explained in more detail why this was needed then:
“I would like to particularly emphasise the question of the bourgeois democratic movements in backward countries. It was this question that gave rise to some disagreement. We argued about whether it would be correct, in principle and in theory, to declare that the CI and the CP’s should support the bourgeois-democratic movement in backward countries. As a result of this discussion we unanimously decided to speak of the nationalist-revolutionary movements instead of the ‘bourgeois-democratic’ movement. There is not the slightest doubt that every nationalist movement can only be a bourgeois-democratic movement.. But it was agreed that if we speak about the bourgeois-democratic movement all distinction between reformist and revolutionary movements will be obliterated; whereas in recent times this distinction has been fully and clearly revealed in the backward and colonial countries, for the imperialist bourgeois is trying with all its might to implant the reformist movement also among the oppressed nations.. In the commission this was proved irrefutably, and we came to the conclusion that the only correct thing to do was to take this distinction into consideration and nearly everywhere to substitute the term “nationalist-revolutionary” for the term “bourgeois-democratic”. The meaning of this change is that we communists should, and will, support bourgeois liberation movements only when these movement do not hinder us in training and organising the peasants and the broad masses of the exploited in a revolutionary spirit.. The above mentioned distinction has now been drawn in all the theses, and I think that, thanks to this, our point of view has been formulated much more precisely.”
Lenin. The Report Of the Commission on the National and Colonial Questions, “Selected Works”, Vol 10, London, 1946, p.240-1.
Like so much of what we have discussed in this article, Lenin saw very clearly.
We submit that neither regarding Imperialism’s character, nor upon the National Question – is there any need to “update” (i.e. Revise) Lenin and Stalin in fundamental ways. What astonishes us is how accurately the general un-folding of imperialism in the era of “globalisation” conforms to Lenin’s analyses made so long ago.
Finally, the under-developed neo-colonies have progressive forces that recognise the need for NATIONAL FORMS OF STRUGGLE:
“The Zapatistas believe that in Mexico recovery and defence of national sovereignty are part of the anti-liberal revolution. Paradoxically, the ZNLA finds itself accused of attempting to fragment the Mexican nation. The reality is that the only forces that have spoken for separatism are the businessmen of the oil-rich state of Tabasco, and the Institutional Revolutionary Party members of parliament from Chiapas. The Zapatistas, for their part, think that it is necessary to defend the nation state in the face of globalisation, and that the attempts to break Mexico into fragments are being made by the government, and not by the just demands of the Indian peoples for autonomy. The ZNLA and the majority of the national indigenous movement want the Indian peoples not to separate from Mexico but to be recognised as an integral part of the country, with their own specificities. They also aspire to a Mexico, which espouses democracy, freedom and justice. Whereas the ZNLA fights to defend national sovereignty, the Mexican Federal Army functions to protect a government which has destroyed the material bases of sovereignty and which has offered the country not only to large-scale foreign capital, but also to drug trafficking. It is not only in the mountains of southeast Mexico that neoliberalism is being resisted. “
“Why We Are Fighting-The fourth world war has begun” By Sub-Commandant Marcos; Zapatista National Liberation Army (ZNLA).” September 1997; In Le Monde Diplomatique
It is the responsibility of the Marxist-Leninists to both harnesses this recognition – and to enable it to fulfill its goal of liberation of the people, by utilizing the strategy and tactics of the National Liberation struggle as worked out by Lenin and Stalin.
WE MUST RE-BUILD THE MARXIST-LENINIST COMMUNIST INTERNATIONAL!
“GLOBALISATION” FOR CAPITAL MANDATES REVOLUIONARY PROLETARIAN INTERNATIONALISM!
BUILD THE MARXIST-LENINIST PARTIES IN EACH COUNTRY!