FRFI 185 June / July 2005

Socialist Register 2005
The Empire Reloaded
Edited by Leo Panitch and Colin Leys, Merlin Press 2004 £14.95.

‘Let us rebel against poisonous academics and their preposterous claptrap of exclusion’
Robert Fisk The Independent
14 May 2005

Imperialism has re-emerged in the common vocabulary of the left and progressive movement since the US-British war on Iraq. However there is a great deal of confusion over what the term means. The academic editors of Socialist Register set about addressing this in a series of articles, which extend over two issues of Socialist Register. The New Imperial Challenge (NIC) in Socialist Register 2004 deals with the overall nature of what the editors call the ‘new imperial’ order and The Empire Reloaded (ER) in Socialist Register 2005 offers an analysis of finance, culture and how the new imperialism is penetrating major regions of the world. What characterises both volumes is a rejection of classical theories of imperialism, with the articles by Leo Panitch and Sam Gindin, academics at York University, Canada, creating the ideological framework for the analysis.

Their articles are written in modern jargon and lines of reasoning are difficult to follow. Typical is the following: capitalist imperialism has to be understood through an extension of the ‘theory of the capitalist state, rather than derived directly from the theory of economic stages or crises’. To understand the relations between states over different historical periods we have to ‘historicise the theory’. So ‘the transition to the modern form of imperialism may be located in the British state’s articulation of its old mercantile formal empire with the informal empire spawned in the mid-nineteenth century during the era of “free trade”’. Lenin failed to grasp this due to his ‘too crude an understanding of the separation of the economic from the political under capitalism’ (NIC p7).1 I fail to grasp this because it is often impossible to understand. Many arguments throughout the two volumes are little more than descriptions and assertions masquerading as explanations.

How then can we judge them overall? As our review of the first volume showed, their ‘new imperialism’ analysis of the world, immediately after the US-British war on Iraq, is vastly inferior to one based on a classical Leninist understanding of imperialism.2 More than a year later this has been reinforced by significant international developments throughout the world. So let us look at the second volume to see how it deals with this.

All the contributors to The Empire Reloaded see globalised capitalism and US imperialism as two dimensions of a single phenomenon. All recognise that US supremacy in the ‘new imperial order’ is not due to its military and surveillance power but to the penetration of the states, economies, and social orders of other leading capitalist countries by the US state, US corporations, and US values. The articles by Panitch and Gindin and Rude go further and argue that the US economy and the US-led global financial structure are inherently strong and stable, with the other ‘leading capitalist states’ and their ruling classes locked into this stability and having a crucial collective stake in it.3 Inter-imperialist rivalry is effectively ruled out although two contributors, Cammack on Latin America and Kagarlitsky on Russia, suggest there is sufficient competition and rivalry between the US and Europe to put serious restraints on US supremacy. These two contributions are short commentaries (28 pages out of 333 in this volume), which suggest that recent economic developments in Latin America (where the EU lately overtook the US as the largest source of foreign direct investment in Latin America) and the differences between Europe and the US over Iraq, Eastern Europe and Russia run counter to the dominant ideological standpoint of the two volumes, at least on the issue of growing inter-imperialist rivalry.

In an article ‘Finance and the American Empire’ Panitch and Gindin attempt to explain the growing dominance of the US empire. Much of it is assertion and exaggeration and there is a total inability to understand the relationship between capital accumulation, imperialism and financial capital. They are keen to show that it was not the neo-liberal ‘revolution’ of the 1980s and 1990s that finally unleashed the forces that made Wall Street the central location of the world economy – whatever this means (ER p46). In their view the process began after World War II when New York took its place as the world’s principal financial centre.

This is far too simple. Even by the end of the 1940s sterling still accounted for nearly half of all international transactions. The role of the City of London as a major, if not leading, financial centre for a great deal of the post-war period is hardly commented on other than to assert that its dominance of the Eurodollar market had the effect of moving ‘the City – and through it, European finance in general – more closely into the American imperial embrace’ (ER p54). This is simply not true. Even today the City of London has a greater share of important financial markets than New York. London’s share of the foreign exchange market at 31% – a trade of some $1,900bn a day – is far larger than that of New York (19%). In 2002 London had the leading share of cross border banking with 20% of the market. Half of all global turnover in foreign equities is carried out in London (Financial Times 29 September 2004 and 6 November 2002). It also has major shares of the world derivatives and hedge funds market.

Unsurprisingly Panitch and Gindin do not discuss Britain’s relationship to Europe and the impasse the British ruling class finds itself in over this question, whose resolution must have dramatic consequences for the rivalry between European and US imperialism, given the continuing importance of London as a major world financial centre. These facts underlie the Labour Party’s commitment to the war on Iraq, its efforts to draw in the other European imperialist countries, and also the divisions in the British ruling class on the war.

Throughout the article Panitch and Gindin turn everything upside down. Surface phenomena become substance and cause. The expansion of finance – whatever that means! – is integral to the deepening of accumulation – whatever that means! – and the continuing strength of the US economy. The deepening of financial markets – whatever that means! – ‘has become ever more fundamental to the reproduction and universalisation of American power’. For them finance, which is unproductive of surplus-value, could apparently could lead to increased capital (!) productivity and profit rates through the power and role of institutions.4 For them the US empire is strengthened rather than weakened by its financialisation. All this makes a major run on the dollar less likely, and there is no evidence that the euro is to replace the dollar as dominant currency (ER pp47, 67, 72, 73).

The classical Marxist view, in contrast to this, sees the massively increased role of financial capital, increasing speculation, and the ever-expanding credit bubble built on a relatively declining productive base, as a result of the overaccumulation of capital in the heartlands of capitalism. Fictitious capital careers round the world desperately searching for new sources of short-term profit. ‘Financialisation’, to use their awful terminology, is the product of a crisis of profitability in the capitalist system. Such a crisis will necessarily lead to economic, social and political developments similar to those which Lenin dealt with in his numerous articles on imperialism, written during the First Imperialist War.

Panitch and Gindin belong to a ‘super-imperialist school’ which assumes the unchallenged dominance of the US. Panitch in fact rejects the term ‘superpower’ to describe the role the US state plays in the world because this implies merely more power than others. For Panitch, US power is qualitatively different ‘because of the way it penetrates and structures other states’.5 A ‘super-duper’ state then. But this only compounds the error. In fact there is much in common here with Kautsky’s ‘ultra-imperialism’, the opportunist position that Lenin devastatingly dealt with in his writings on imperialism. Instead of the international capitalists negotiating away inter-imperialist rivalries as in Kautsky’s position, we have the all-embracing US state and its institutions. Indeed Panitch and Gindin take Kautsky’s side in the debate with Lenin but say that Kautsky made his case ‘reductively’ from ‘a purely economic standpoint, rather than in terms of a theory of the state’ (NIC p9). Lenin called Kautsky a renegade because he broke a solemn commitment to the Second International to hold a ‘no defence of the fatherland’ anti-imperialist position.

Totally neglected in their analysis is the role of the Soviet Union and national liberation struggles since World War II, which forced Europe and Japan to align with the US to prevent the rise of other areas of the world closed to rampant imperialist exploitation. This situation completely changed with the counter-revolution in the Soviet bloc.

A correct understanding of imperialism is not an academic exercise but critical in dealing with the rampant opportunism which exists in the left movement today. This can be seen by the decision of the editors to give space to a reactionary interview with Tony Benn, the ‘foremost voice of the left in the British Labour Party’ (ER pviii) in Socialist Register 2005. In this interview Benn tries to rationalise away Blair’s support for the Iraq war and covers up for British imperialism’s global interests. For Benn, British imperialism does not exist. Indeed, Benn tells us not only that ‘we haven’t got an empire’ now but also that ‘we are a colony of the United States’. We apparently have ‘a puppet government in Britain’ and need a ‘liberation movement in Britain’ to free us from the US. Britain, whose imperialist interests spread out all over the world, which still has some 13,000 troops in its oldest colony Ireland and whose forces brutally occupy Iraq, is a colony! Little wonder that Benn was easily recruited by Blair to canvass disillusioned Labour voters, during the recent British General Election, for the imperialist Labour Party. The standpoint on imperialism in Socialist Register cannot combat Benn’s reactionary position but rather tends to reinforce it.

Lenin argued that the essence of imperialism is the division of the world between oppressor and oppressed nations. Nationalism and national struggles increase under imperialism. ‘Imperialism is the era of the oppression of nations on a new historical basis’ (CW39 p736). However the standpoint of the new imperialism in Socialist Register is opposed to this. Articles by Chibber and Greenfield fail to see the vital significance of national struggles against imperialism by crudely associating nationalism with the ‘myth of the national bourgeoisie’ (ER pp144, 166). They attribute this standpoint to Lenin and the Third International and argue the world has moved on since then. They merely demonstrate their ignorance. Lenin, in fact, had already argued in 1920 that ‘perhaps in most cases…the bourgeoisie of the oppressed countries, while it does support the national movement, is in full accord with the imperialist bourgeoisie’ (CW31 p242). That is why the Third International replaced the term ‘bourgeois-democratic’ with ‘national-revolutionary’ to describe the national movements supported by the Third International. Unsurprisingly, Chibber can brush aside Hugo Chavez’s Bolivarian Revolution and fail to see the significance of the revolutionary national struggle that is taking place in Venezuela today.

Events have already overtaken Socialist Register. If it is to have any relevance to the newly developing international movements against imperialism it is surely time to have new editors, who understand the reality of imperialism and the tasks facing the socialist movement today.

David Yaffe

1 This point re Lenin on economics and politics is simply a distortion. As J M Blaut in ‘Evaluating Imperialism’ Science and Society Fall 1997 has so clearly argued, Lenin was attacking precisely ‘the economistic thesis that, since capitalism as an economic system “has become fully international,” “has transcended the bounds of the national state” (much used expressions at the time), wars between states are no longer functional for capitalism.’ He was attacking the standpoint of Kautsky, Hilferding and others who were arguing along such lines. Lenin’s criticism could also be directed at Panitch and Gindin who clearly agree with Kautsky, although reaching their conclusions with an even more dubious line of reasoning.
2 For a review of Socialist Register 2004 see FRFI 177 February/March 2004.
3 See David Yaffe ‘Globalisation: parasitic and decaying capitalism’ in FRFI 158 December 2000/January 2001 for a totally different argument based on a Marxist and Leninist understanding of capitalism and imperialism.
4 In fact financial corporations can only take a greater share of surplus-value produced by productive labour elsewhere, for example, in the oppressed nations via measures imposed on those nations by the IMF, World Bank, and World Trade Organisation.
5 See Monthly Review Vol 54 No 2 June 2002 p16.