We publish here a document written in 2016 by the leadership of the IMT as part of a discussion about the role of imperialism today and the character of China and Russia. We think it can serve to clarify questions that have been raised in relation to the Russian invasion of Ukraine.
In any discussion of new questions, it is necessary to go back to the fundamentals. Lenin’s text, Imperialism, the Highest Stage of Capitalism, provides us with the starting point for our analysis. No book has ever explained the phenomena of modern capitalism better than Lenin’s Imperialism. All the main predictions of that work, concerning the concentration of capital, the dominance of the banks and finance capital, the growing antagonism between nation states and the inevitability of war arising out of the contradictions of imperialism have been shown to be true by the history of the last 100 years.
However, we require more than merely a repetition of what Lenin wrote in 1916. A century later, many things have happened that were not foreseen by Lenin and could not have been foreseen. In 1916 Lenin did not merely repeat the ideas expressed by Marx and Engels in The Communist Manifesto. He was dealing with new phenomena that did not exist in Marx’s day. In the same way we are now confronted with new phenomena that did not exist in Lenin’s day.
A materialist analysis is always based on a careful consideration of the facts – all the facts. It does not begin with a preconceived idea and then proceeds to select certain facts that will fit into the theory, ignoring those that do not. Dialectics deals with processes, development and change in which, at a certain point, things are transformed into their opposite. This must be kept in mind when we come to consider the question of imperialism. Lenin’s method was dialectical and materialist. When analysing what was at that stage a new phenomenon, imperialism, he based himself on a concrete analysis this new phenomena as it had developed. He based himself, not on an analysis of texts, but on an analysis of the facts. That is why his book Imperialism is filled with a mass of statistics that indicated the general processes that were taking place in the capitalist world economy.
It is self-evident that in the 100 years that have passed since Lenin wrote Imperialism the world has changed in many ways. The international balance of forces that he describes in that text no longer exists. Britain and France, which were the main imperialist powers at that time, have been reduced to secondary factors in world politics, while the USA, which was then beginning to flex its muscles, is now the dominant power in the world. Tsarist Russia has long been consigned to oblivion. The Soviet Union that replaced it has also passed into history.
When Lenin wrote his book, the world was divided into colonial empires subject to the direct military-bureaucratic rule of Britain, France, Belgium, Russia and Holland. The mighty colonial revolution that followed World War Two swept aside those empires. The former colonial countries attained formal independence. (The countries of Latin America had already achieved this in the 19th century, although they were still dominated economically, mainly by the USA and Britain.) But the former colonies are still dominated by imperialism indirectly, through the mechanism of the world market, unequal trade and debt.
It would be a big mistake to imagine that the nature of present-day China can be determined by referring to general formulas and abstract definitions. Such definitions can be perfectly correct theoretically. But if you try to impose them on a living, changing reality you very soon find that you get into trouble, because reality doesn’t always fit into these definitions. The fall of the USSR dramatically modified the world balance of forces. How do we characterise countries like Russia and China today? These are new questions that must be analysed carefully, taking all aspects into consideration. That was the method of Lenin in 1916, and it is the same method we must use now.
The limits of definitions
It goes without saying that we must give a definition of imperialism. But it is a phenomenon that has different aspects and for that reason one can look at it in different ways. Kautsky referred to imperialism as a striving for annexations. This is certainly one aspect of imperialism and there are some countries to which it applies more than others. Lenin said that this definition is correct but incomplete.
Lenin himself points out that it is possible to speak of imperialism in the pre-capitalist period and even in the world of antiquity, such as the Roman Empire. This involved the conquest, enslavement and plunder of foreign colonies. This primitive kind of imperialism can be encountered even in the modern world (the Tsarist Empire was in fact an example of this). However, the phenomenon underwent a transformation under capitalism. In his celebrated book on the subject, Lenin provides a scientific definition of imperialism in the modern epoch. He lists the most basic features of imperialism in the modern epoch as follows:
1) The concentration of production and capital has developed to such a high 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 capitalist associations which share the world among themselves, and (5) the territorial division of the whole world among the biggest capitalist powers is completed. Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed. (LCW, Vol.22, pp. 266-7.)
In the above quoted passage, Lenin describes its essential features: monopoly, the domination of finance capital, the export of capital, the development of international monopolies, and territorial division. Is this definition correct? Yes, it is very correct. But it is correct as a general statement. And like all general definitions, it does not necessarily cover every single case.
We know what a human being is. It has two eyes, two arms and two legs, it can walk and talk and so on. But in real life there are many cases where one or more aspects of this definition do not apply. That does not mean that it should be discarded as a general statement of fact, only that we must be aware of its limits. We also know what a workers’ state is. But some people who called themselves Marxists refused to accept that Stalin’s Russia could be described as such. They adhered strictly to an abstract norm and did not take into account that a workers’ state could degenerate under certain concrete conditions, while still remaining a workers’ state.
Lenin himself was well aware of the limitations of definitions. He writes: “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.” But then he adds: “without forgetting the conditional and relative value of all definitions in general, which can never embrace all the concatenations of a phenomenon in its full development.” Here we see Lenin’s dialectical method very clearly. He did not approach the question of imperialism (or any other question) from the standpoint of abstract definitions that could be applied mechanically without regard to time and space, but stressed the need to analyse the phenomenon as a living, changing process “in its full development.”
Concentration of Capital
In The Communist Manifesto Marx and Engels showed that capitalism, which first arises in the form of the nation state, inevitably creates a world market. The crushing domination of the world market is, in fact, the most decisive feature of the epoch in which we live. No country, no matter how big and powerful, can escape from the pull of the world market. The total failure of socialism in one country in Russia and China is sufficient proof of this assertion. So is the fact that both the major wars of the 20th century were fought out on a world scale and were wars for world domination.
Capitalism and the nation state, from being a source of enormous progress, became a colossal fetter and impediment to the harmonious development of production. This contradiction reflected itself in the world wars of 1914-18 and 1939-45 and the crisis of the inter-war period. In the First World War, the British imperialists were fighting a “defensive war” – that is to say, a war to defend their privileged position as the foremost imperialist robber in the world, holding countless millions of Indians and Africans in colonial slavery. The same cynical calculations may be discerned in the case of every one of the belligerent nations, from the biggest to the smallest.
Lenin explains that, in the stage of imperialist monopoly capitalism, the entire economy is under the domination of the banks and finance capital. Using the vast amount of statistics at his disposal, Lenin outlines the process through which capitalism becomes transformed into monopoly capitalism. These statistics indicate the domination of the world economy by a small number of big banks and trusts. In the recent decades, this process of concentration of Capital has assumed an even more intense momentum.
The general lines of Imperialism remain correct to this day. The concentration of capital has reached the point where the entire world is dominated by no more than 200 gigantic companies, most of them based in the USA. These vast monopolies are increasingly fused with the state, which represents their interests. As a parallel development, we have the growth of finance capital, which dominates every other sector and the state itself. Citigroup, JPMorgan Chase, Bank of America, Goldman Sachs – these are the real power centres of US capitalism.
100 years after Lenin wrote Imperialism, the domination of the banks and finance capital is a 100 times greater than when he wrote these lines. The stranglehold of the big banks and their parasitic and exploitative nature was exposed to the whole world by the crisis of 2008 and the scandalous bailouts, involving trillions of dollars of taxpayers’ money handed out to the banks by governments. These monopolies have now accumulated massive amounts of capital, and actually possess a surplus of capital. This is seen graphically today when big companies like Apple hold hundreds of billions in idle cash reserves, while the big US corporations are sitting on trillions in idle cash reserves.
Lenin identified the export of capital (as opposed to the export of commodities) as one of the most characteristic features of imperialism in the modern epoch. It signifies that “capital has become ‘overripe’ and (owing to the backward state of agriculture and the poverty of the masses) capital cannot find a field for ‘profitable’ investment.” (Lenin, Imperialism: The Highest Stage of Capitalism.) Since these huge amounts of capital cannot be used profitably in the home market, they are exported to other nations where super profits can be extracted from the surplus value derived from the low cost of labour.
Lenin added that this increasing concentration of monopoly capital leads more and more to the domination of finance capital. Just as the monopolies emerge in the market, so the parasitical financial wing of capital grows in importance, ending up by lording it over the rest of the economy. The big banks and stock markets become all-important centres of capitalism as it becomes global, turning into a sort of nerve centre for the system, a channel through which all manufacturing investment must pass (and leave a deposit). The military-industrial complex is embodied by huge companies like Lockheed Martin that get fat on lucrative government arms contracts. This is all linked to an aggressive foreign policy, aimed at boosting America’s share of world markets and global control.
The aims of the imperialists have not changed: a struggle for markets, raw materials and spheres of influence. However, there are also important differences. In Lenin’s day imperialism manifested itself in the direct rule over colonies by the imperialist powers. British imperialism owned almost half of the globe. It plundered the wealth of Africa, the Middle East and the Indian subcontinent and also had a stranglehold over many countries in Latin America. It was in order to break the world monopoly of British imperialism and secure a redivision of global power that the German imperialists launched the First World War. The other powers all participated eagerly in this struggle to carve up the world and seize colonial possessions. Incidentally, this applied not only to the Great Powers but also to the smaller robbers like Greece, Romania and Bulgaria.
This situation changed radically as a result of the October Revolution and the colonial revolution. The Bolshevik Revolution overthrew Tsarism and gave a powerful impulse to the movements for national liberation of the oppressed colonial peoples. Later, the Second World War undermined the power of the old imperialist states. Britain and France emerged weakened by the war, while the USA and the USSR became the dominant powers – although, of course, the USSR did not play an imperialist role.
The upsurge of the colonial revolutions was one of the greatest events in human history. Hundreds of millions of human beings who had been condemned to the role of colonial slaves rose up against their masters in Africa, Asia and the Middle East. The magnificent Chinese revolution and the national independence of India, Indonesia and other countries marked a historic change. The achievement of formal national independence was a great step forward. However, it did not solve the problems for the exploited masses. On the contrary, in many ways they were exacerbated.
Today, more than seven decades after the Second World War, the stranglehold of imperialism over the former colonial countries is even greater than it was in the past. The only difference is that instead of direct military-bureaucratic control, imperialism exercises its domination indirectly. Imperialist domination of these formally independent countries is exercised through the mechanism of the world market and the unequal terms of trade, where commodities that represent more labour are exchanged for commodities that represent less labour. In addition to this unequal exchange, they are exploited through foreign “aid”, the interest on loans, etc. The former colonial countries remained enslaved to imperialism, although their chains are now invisible ones.
Globalisation is a word that hides the reality of the systematic plunder of the ex-colonial countries. The latter are forced to open their markets to a flood of foreign goods that ruin their local industries, cripple their economies and drain away their wealth. Giant transnational companies open factories in Bangladesh, Indonesia and Vietnam, where workers are subjected to the most brutal exploitation in slave-like conditions for starvation wages to produce jeans and Nike shoes to swell the surplus value extracted by the bloodsuckers. Disasters like Bhopal and the recent fire in a Bangladeshi textile factory devastate whole communities. The bosses of western companies weep crocodile tears and continue to fill their coffers with the products of the blood, sweat and tears of millions of super-exploited people.
History knows many different forms of slavery, and financial slavery is the modern form. It is not as obvious as chattel slavery, but it is slavery nonetheless, whereby entire nations are subjugated and plundered. The lives of billions of people are crushed by this collective debt slavery. Underdeveloped countries are crushed under the burden of debt and trade policies of the International Monetary Fund (IMF), World Bank and World Trade Organization (WTO).
The total external debt stock of “developing countries” was US$500 billion in 1980, had doubled to $1,194 billion in 1990, it was $1,996 billion by 2000 and by 2012 had gone up to $4,830 billion, with debt servicing alone being a massive $660 billion a year.
The burden of debts leaves the poorest countries in the world with nothing to spend on basic needs like health, education and infrastructure. All the underdeveloped countries find themselves exploited, robbed and oppressed by imperialism. In this way, imperialism still sucks the blood of billions of poor people in the former colonial world.
The Bible informs us that the ancient Canaanites used to sacrifice children to Moloch. But as a result of debt slavery seven million children are sacrificed on the altar of Capital every year, which makes old Moloch pale into insignificance. If debt had been cancelled in 1997 for 20 of the poorest countries, the money released for basic health care could have saved the lives of about 21 million children by the year 2000, the equivalent of 19,000 children a day. According to the campaign Jubilee 2000, 52 countries in sub-Saharan Africa, Latin America, and Asia with a total of one billion people are sinking under a debt burden of $371 billion. This is less than the total net worth of the world’s 21 richest individuals.
Mexico has been formally independent for almost two centuries. But the fictitious nature of this independence has been glaringly revealed in recent decades with the signing of the Free Trade Agreement with its Big Brother across the Rio Grande. This has had a devastating effect on Mexican industry and agriculture, while the opening of US-owned factories in the Maquiladoras in the border areas provides a huge pool of cheap labour for the Yankee bosses.
Originally based in the border cities of Tijuana, Ciudad Juárez, Matamoros, Mexicali and Nogales, these assembly plants working for the US market have now spread throughout the whole territory of Mexico. Here we see exactly how modern imperialism works. Why go to all the trouble and expense of direct military-bureaucratic rule, when one can dominate a country very effectively by economic means, leaving the disagreeable business of repression to a “friendly” (that is, subordinate) government?
This neo-colonialist mode of exploitation is no less predatory than the overt plunder of the colonies realised in the past on the basis of direct military rule. In general, the same old colonies in Africa, Asia and the Caribbean are being sucked dry by the same old bloodsuckers. The only difference is that this robbery is carried on quite legally through the mechanism of world trade by which the advanced capitalist countries exercise a joint domination of the ex-colonies, and are thereby spared the cost of direct rule, while continuing to extract huge surplus profits by exchanging more labour for less.
Can there be new imperialist powers?
Lenin says that finance capital spreads its net over all countries of the world. He explains that the capital exporting countries had by then divided up the world. He says, there was nothing left to colonise. Did that mean that Lenin thought that the division of the world was fixed and unchanging for all time? Of course he did not. Lenin specifically states that the division of the world between two powerful trusts does not preclude re-division if the relation of forces changes as a result of uneven development. So Lenin asks whether the relationship between imperialist powers can change and gives an emphatic answer: it can and necessarily must change all the time.
The law of the uneven development of capitalism means that different parts of the world economy, different countries, develop at different tempos. It is precisely this that determines the rise and fall of different powers. We have seen this redivision of the world take place several times over the last century, with older powers declining and newer, more energetic imperialist powers taking their place. And there is absolutely nothing in Marxist theory that rules out further redivision. On the contrary, it is inevitable. Some imperialist powers will enter into decline and others, formerly less developed powers, will emerge.
Lenin is very clear and unambiguous on this point:
And the strength of these participants in the division does not change to an equal degree, for the even development of different undertakings, trusts, branches of industry, or countries is impossible under capitalism. Half a century ago Germany was a miserable, insignificant country, if her capitalist strength is compared with that of the Britain of that time; Japan compared with Russia in the same way. Is it ‘conceivable’ that in ten or twenty years’ time the relative strength of the imperialist powers will have remained unchanged? It is out of the question.
We saw a redivision of the world following the First World War. Germany was shattered and the rest of Europe was weakened to the point that it had to be “put on rations” by the USA, which was emerging as a major world power. The Russian Revolution had overthrown Tsarism but was as yet struggling to survive. The colonial revolution was still in its infancy. Japanese imperialism was preparing its expansionist policy in Asia. The end of the Second World War led to a new division of power. Europe was in ruins. US imperialism was now the dominant imperialist power, expanding its world role at the expense of the old European imperialist powers, France and Britain. The USSR emerged as a powerful factor and came into conflict with the USA on a world scale. The colonial revolution, mobilising hundreds of millions, succeeded in ending direct colonial rule. Finally, the Chinese Revolution of 1949 changed the destiny of Asia forever.
The world relations established after 1946 remained substantially unchanged for half a century. The world was divided into two gigantic blocs, with the USSR on one side and US imperialism on the other. But all that changed after the collapse of the USSR in 1991. A new and stormy period of instability has opened up, characterised by all kinds of wars and conflicts. The emergence of Russia and China as powerful capitalist states creates new contradictions. We must analyse the new situation carefully and make a concrete characterisation of the nature of Russia and China based upon a rigorous study of the facts.
Some conceive of the whole world as divided into only two sorts of countries: rich imperialist oppressor states (fundamentally the same states that Lenin mentioned 100 years ago) and the rest of the world, made up of dependent nations. That scheme simply does not fit the facts of the world of the present. As a matter of fact, it doesn’t even fit the period when Lenin was writing. In Imperialism Lenin gives a careful evaluation of the different imperialist countries. He refers to “young capitalist countries (America, Germany, Japan) whose progress has been extraordinarily rapid”.
American industrial productivity was growing by leaps and bounds, outpacing that of its European competitors. Lenin draws attention to this, contrasting the rapid growth of the American economy to that of the old powers like Britain and France, “whose progress lately has been much slower than that of the previously mentioned countries”. Subsequent history showed how this slowing of the development of British capitalism ended in its replacement by American imperialism. Yet America itself began as an oppressed colony of Britain.
Lenin said you can have all kinds of different levels of development at different stages, even different kinds of imperialism. Lenin referred to the division of the world, but he also referred to the redivision of the world, which he said was something inevitable. Is it possible to maintain that this process could take place then but now it is impossible? There is no apparent reason why this should be the case. Let us remind ourselves that up until the mid-nineteenth century, Germany did not even exist as a unified country. Economically, it lagged far behind Britain. Lenin points out that “half a century ago Germany was a miserable, insignificant country, if her capitalist strength is compared with that of the Britain of that time”. But by 1914 it had become a powerful imperialist state, ready to challenge Britain and France for control of Europe and the world.
In the final analysis, it is the development of the productive forces that determines whether a given country will be able to set its stamp on world affairs. The example of Germany in the period before 1914 shows how the growth of industrial power must eventually find its expression in the growth of diplomatic, political and military power. This fact must be kept in mind when we consider the role of China today.
Can a dependent country be imperialist?
Is it possible for an economically backward country to be dependent on imperialism and at the same time play the role of an imperialist state? At first sight this would appear to be a logical contradiction. But dialectics teaches us that there are all kinds of contradictions in life and in society. And what appears to be a contradiction in terms of formal logic becomes a reality in fact.
A materialist analysis should proceed from the facts. And dialectical materialism starts out from the view that things change and things change into their opposites. What Lenin was dealing with here are transitional forms, which are to be found in all spheres of nature and society. When he refers to the semi-colonial states, he does not take them to be static and fixed for all times. He looks at them in the process of change. He defines Portugal as an independent sovereign state with an Empire, ruling over millions of colonial slaves, and therefore an imperialist power. But at the same time he says that Portugal, a backward semi-feudal country, had been for more than 200 years a British “protectorate” – that is to say, dominated by British imperialism.
Among the newly emerging imperialist powers to which Lenin refers was Japan. Japan was an economically backward, semi-feudal country but its imperialist ambitions led it to launch a vicious predatory war for the conquest of China. The imperialist character of Japan cannot be doubted, despite the fact that it was based on backwardness. In fact, the tasks of the bourgeois revolution in Japan were only completed after its defeat in World War Two when they were carried out by the American army of occupation as a way of preventing Japan from falling under the influence of Chinese “communism.”
In 1940, over 24 years after Lenin’s Imperialism, Trotsky dealt with Japan in a text called The Tanaka memorial. What does he say about Japan? As was the case with Tsarist Russia, Japan had experienced a development of industry. He pointed out that its “financial and military superstructure rested on a foundation of semi-feudal agrarian barbarism”. But it was nevertheless part of the imperialist chain, although he considered it as the weakest link.
In Imperialism, Lenin refers to economically backward countries, in particular Russia. Tsarist Russia was a mix of pre-capitalist relations and pockets of capitalism. It is true that it had experienced a stormy growth of industry in the last decades of the 19th century. This was entirely due to the export of foreign capital into Russia. Russian capitalism, as Trotsky explains in the theory of permanent revolution, was entirely dependent on British, French, German and Belgian capital. It therefore had many of the features of a semi-colonial country. The huge debts owed to France, in particular, were a major factor in forcing Russia to enter the First World War on the side of the Entente.
Economically, Tsarist Russia was extremely backward. Despite an important development of industry in the towns and cities of the western part, most of the country was semi-feudal in character. Yet despite its semi-colonial and semi-feudal features, and dependence on foreign capital, Lenin included Russia in the list of the five most important imperialist countries. We should add that Tsarist Russia never exported a single kopeck of capital. Lenin calls it: “a country most backward economically, where modern capitalist imperialism is enmeshed in a close network of pre-capitalist relations”.
Tsarist imperialism was more similar to the ancient kind: based on the seizure of foreign territories (Poland is the obvious example) and territorial expansion (the conquest of the Caucasus and Central Asia). Tsarist Russia, to use Lenin’s phrase, was a veritable prison house of nations that it conquered, enslaved and plundered. Yet Russia itself was financially dependent on France and other imperialist states.
Lenin also refers to smaller powers who were allowed to retain their colonies because of the conflicts between the main powers. In other texts, Lenin includes in the list of imperialist countries, Austria-Hungary and Italy, and Italy was a particularly backward country, with a development of industry mainly in the North-West, coexisting with backward poor peasant agriculture in the centre and south.
Trotsky on Balkan imperialism
Shortly before the outbreak of the First World War, two wars broke out in the Balkans. Trotsky was able to observe these bloody conflicts at first hand as a war correspondent. We quote at length from what he wrote during the Balkan wars of 1912-13:
“Still less stable will be the relations between Bulgaria and Greece, as formed on the basis of the Peace of Bucharest. About 200,000 Bulgars in southern Macedonia have come under Greece. In Thrace, on the other hand, about 200,000-250,000 Greeks have become citizens of Bulgaria, or, more correctly, are listed in that category in the Treaty of London. The national principle has proved here, too, to be incompatible with imperialist pretensions: what matters is not community of culture on a homogeneous ethnical basis but the number of taxpayers and the size of the internal market. Even with these frontiers, of course, there could still be peaceful coexistence between Bulgaria and Greece, provided national autonomy were allowed to the ‘alien population’ in each of these countries. But it is clear that people who only just now were disembowelling each other, or more correctly, those who directed these disembowellings, are absolutely incapable of establishing stable conditions of coexistence between the peoples on either side of the frontier that divides Macedonia.
“The fate of this thrice unfortunate province reveals with deadly clarity for the benefit of nationalist romantics that even in the backward Balkan Peninsula there is room for a national policy only insofar as this coincides with an imperialist police.
“Greek imperialism is the one that goes back farthest. A Greek oligarchy of clerics and aristocrats (the Phanariots) shared with the Ottoman military caste authority over the Christian nationalities of the peninsula. The Greek bourgeoisie, spread all around the shores of the Aegean, the Sea of Marmara, the Black Sea, and the Mediterranean, subjected the cultivators and shepherds of the hinterlands to its merchants’ and usurers’ capital. Greek priests and merchants paved the way for Greek imperialism, which at once clashed in mortal hatred with the awakening nationalities of the Balkans; for the latter, economic and national awakening meant a life-and-death struggle not only against the Turkish military-bureaucratic caste but also against the ecclesiastical and the commercial and moneylending domination of the Greeks. Greek imperialism came up against Bulgarian imperialism on the soil of Macedonia.
“Bulgarian imperialism is of recent origin but is all the more bellicose and reckless for that. The Bulgarian bourgeoisie came late on the scene and at once began vigorously using its elbows in order to get ahead. Bulgarian ministers of state receive a salary of one thousand francs a month, whereas in capitalist Europe such functions are rewarded at a rate of thousands of francs a day. The Sofia correspondent of the Times, Mr. Bourchier, had at his disposal sums of which the men in power in Sofia could not even dream. To widen the limits of the state, to increase the number of taxpayers, to multiply the sources of enrichment – these were the principles of the imperialist wisdom that guided the policy of all the ruling cliques in Sofia.
“It was these principles – imperialistic, not national – that also determined the whole of Bulgaria’s Macedonian policy. The aim was always the same – to annex Macedonia. The Sofia government supported the Macedonians only in so far as it could thereby bind them to itself, and it betrayed those interests of theirs which might have estranged them from Bulgaria. The well-known Balkan politician and writer, Dr. C. Rakovsky, whom I have met again in Bucharest after an interval of two years, told me, along with many other pieces of information, the following extremely eloquent fact. In 1903-1904 the Bulgarian exarch was lobbying in Sofia for the establishment of a peasants’ bank in Macedonia. This was the Ilinden rising, when chaos reigned in Macedonia and the Turkish landlords were ready to sell their estates to the peasants for a song. The Bulgarian government firmly rejected the exarch’s proposal, explaining that if the Macedonian peasants achieved a certain level of prosperity they would become deaf to Bulgarian propaganda. The same point of view was maintained by the Macedonian revolutionary organization which, especially after the crushing of the revolt, became finally transformed from a nationalist-peasant organization into a tool of the imperialist designs of the government in Sofia.
“This astonishing struggle, in which brutality was combined with heroism, has ended – how? With a perfidious agreement for the partition of Macedonia. The Second Balkan War, and the Bucharest peace which has now crowned it, have completed this agreement. And, behold, Stip and Kocani – those two places where the Bulgaro-Macedonian revolutionaries brought about, by their tactics of ‘provocation,’ the Turkish massacre that served to start the first war of ‘liberation,’ – Stip and Kocani have been handed over to Serbia!
“Serbian imperialism found itself quite unable to advance along the ‘normal,’ that is, the national line: its path was barred by Austria-Hungary, which included within its borders more than half of all the Serbs. Hence Serbia’s push down the line of least resistance, towards Macedonia. The national achievements of Serbian propaganda in that quarter were quite insignificant, but all the more sweeping for that reason seem the territorial conquests made by Serbian imperialism. Serbia now includes within her borders about half a million Macedonians, just as she already included half a million Albanians. A dizzy success! Actually, this hostile million may prove fatal to the historical existence of Serbia.” (Leon Trotsky, The Balkan Wars (1912-13): The War Correspondence, pp. 364-366, our emphasis.)
We point out that Bulgaria, Greece and Serbia were economically backward, semi-feudal nations that had until recently been enslaved by the Ottoman Empire for centuries. Even though they had attained formal independence, they remained dominated countries under the control of one or other of the European Great Powers. King Ferdinand, an officer in the Austro-Hungarian army who could not speak a word of Bulgarian, was put on the Bulgarian throne in order to prevent Russia from moving in. King George of Greece was born Prince William of Schleswig-Holstein-Sonderburg-Glücksburg.
Given these facts, how could Trotsky describe Bulgaria, Serbia and Greece as imperialist? Maybe it was a slip of the pen? But Trotsky did not make mistakes of that kind. Like Lenin he was always scrupulous in questions of theory. The answer to this apparent paradox is really quite simple. There is no law that says that a poor, oppressed nation cannot become a vicious, predatory state once it is in a position to act like one. On the contrary, dialectics teaches us that things can turn into their opposite.
No sooner had they gained independence, the ruling cliques of these petty Balkan states launched a series of predatory wars to conquer neighbouring territories. Trotsky points out that, under the pretext of fighting Ottoman imperialism, their real aim was to grab as much land as possible from their Balkan “allies”, enslaving and oppressing their inhabitants in the most brutal fashion. Thus, nations that had only just freed themselves from colonial slavery became oppressors and enslavers themselves.
These nations remained economically backward and dominated by other, more powerful states. But at the same time they were regional imperialist powers – weak imperialist powers that could not aspire to conquer Europe but did aspire to seize the territory of their neighbours and oppress and plunder them. In that sense, they were imperialist, and Trotsky did not hesitate to use that word. Their economic backwardness and relative weakness with regard to the main imperialist powers could not be used to cover up their real, imperialist, nature.
Then and now
From all this it is patently obvious that from a Marxist point of view it is perfectly possible for a nation that is economically backward, semi-feudal even, and oppressed by more powerful states, to act in an imperialist manner: to launch predatory wars of conquest either for markets and raw materials, for territorial expansion or for political reasons. The example of the Balkan Wars is a clear case of this, as Trotsky explains. Is it permissible to argue that such things were possible then but are not possible now? Such an argument makes no sense whatsoever. It has no basis in theory and even less in fact.
What has changed so fundamentally in the last one hundred years that would render impossible the oppression of one small state by another small state? The fundamental contradictions are the same. Only the crisis of capitalism has deepened. The system is in an even greater impasse than it was when Lenin wrote Imperialism. The contradictions are even sharper and are expressed in constant wars and upheavals. None of this suggests the bourgeoisie of former colonial countries cannot act in the same reactionary manner as the Balkan ruling cliques in 1912-13.
Let us ask a few specific questions. What is the relation between India and occupied Kashmir? At the very time when India freed itself from the yoke of British imperialism, the Indian bourgeoisie seized Kashmir against the will of its people who were overwhelmingly Muslims. Ever since then Kashmir has been held by brute force. Thousands have been imprisoned, tortured and killed by the Indian army of occupation. If one asks a Kashmiri whether this brutal occupation constitutes an act of imperialism or not, they would answer with a shrug of the shoulders and a look of complete astonishment. The conduct of India towards Kashmir is imperialist in the clearest and most brutal sense of the word.
It is not only India that is guilty of imperialist aggression in the Subcontinent. The reactionary Pakistan ruling clique for decades oppressed the people of East Bengal (now Bangladesh). Finally, they rose up against their oppressors and won independence. This was achieved only at the cost of a terrible bloodbath carried out by the Pakistan army. One might add that to this day Pakistan is oppressing the people of Balochistan in the same ruthless manner.
What is the relation between Turkey and the Kurds? One might say that Turkey is a “dominated” nation, although it has experienced a significant degree of industrial growth in the last few decades. But this poor “dominated” state in turn dominates and oppresses the Kurds by the most vicious methods. Can we describe the conduct of Erdogan in relation to the Kurds as imperialist? There is not a single person in Kurdistan who would have the slightest hesitation about answering this question in the affirmative.
Finally, we have the case of Israel, which has oppressed the Palestinians for many decades and undoubtedly plays the role of a regional superpower. Israel was born in the act of seizing lands that were occupied by other people. It has fought four wars against Arab armies and in every case ended by expanding its territory. It continues this policy of imperialist expansion to the present day. Can Israel be considered a poor, oppressed semi-colony? The question answers itself. Israel is not a poor, oppressed nation but an advanced capitalist country. In terms of economic and social development it is no different from most European countries. It has a modern army that is more than a match for any army in the region. And it is the main regional imperialist power in the Middle East.
Some will say that it is dependent on large sums of money from the USA. It is true that Israel receives a big subsidy from the USA. That is because it is the only reliable ally of Washington in the region. But this does not mean that the rulers of Israel are under Washington’s control. They have their own interests, which are not always those of the Americans. It is sufficient to point to the open clash between Netanyahu and Obama over the deal with Iran to underline the point.
Of course, we understand that Turkey, India and Pakistan cannot be put in the same category as the main imperialist powers, the USA, Europe and Japan. They do not and cannot play the same role, any more than Greece, Serbia and Bulgaria could challenge the might of Britain, France and Germany in 1916. They have come too late on the stage of history to be able to challenge the richer and more powerful nations for world hegemony. But this general statement – correct as it is – does not at all exhaust the question. The ruling cliques of these countries have their own interests that do not necessarily coincide with those of Washington, London or Berlin. And they can and do play the role of regional imperialism, striving to impose their will on neighbouring states. They are weak imperialist states that aspire to become strong ones at the cost of their neighbours.
It is a fundamental mistake to present the entire world as if it consisted of only two kinds of nations: on the one hand a handful of imperialist powers (the USA, Europe and Japan) and on the other all the others, which are poor, underdeveloped countries that are totally dependent on the former. According to this view, the latter can play no independent role in world politics or economics; their actions are entirely subordinate to, and dependent upon the major imperialist powers (mainly the USA); they can never be regarded as imperialist; and they can never experience any serious economic development that could alter their status as “dependent nations”.
This way of looking at things ignores reality. Can we, for instance, place Burundi, Eritrea and the Congo on the same level as Brazil, Turkey and China? Is Russia the same as Afghanistan or Togo? Clearly these countries are on very different levels of economic development. And with economic development other questions arise: the desire to gain a bigger share in world markets, more access to oil and other raw materials; prestige and military power. Russia and China can stand up to US imperialism and even confront it militarily, in a way that Togo and Nepal cannot.
The reality of the world today completely refutes the black-and-white formula of a handful of imperialist states on the one hand and poor dependent countries on the other. Has there not been a development of industry in Brazil, in Russia, in India and in China in the last fifty years? How do we characterize the so-called BRICs? The term “emerging economies” is not a satisfactory formulation. We can discuss what alternative can be used. But we cannot deny that any economic development has taken place in these countries.
Some might argue that Trotsky’s theory of the permanent revolution rules out such a development. But in fact, this definition of the world cannot be derived from the theory of the permanent revolution. And it simply does not fit the facts. There seems to be a misunderstanding here as to what the theory of the permanent revolution says. It does not say that there can be no development of the productive forces in underdeveloped countries. It says precisely the opposite.
It was precisely the stormy development of industry in Russia in the last two decades of the 19th century that was the precondition for the proletariat to take power in 1917. And it is a matter of complete indifference that the capital that built those factories came from foreign investors in the core advanced imperialist states. The main thing is that the development of industry strengthened the Russian working class then, just as it has strengthened the Brazilian and Chinese working class today.
Are the BRICs dominated countries? Some are, some are not. But whether they are or not, it doesn’t mean to say that they cannot play an imperialist role. It may be objected that this economic development was the result of the penetration of Brazil and other countries by foreign capital, and therefore it did not alter their position as dependent countries. But that was also true of Tsarist Russia, which Lenin nevertheless – as we have already seen from his texts on the question – described as an imperialist state.
It cannot be denied that in recent decades there has been an important development of the productive forces in the countries that are known as the BRICS. From a Marxist point of view that is not a bad thing but a good thing. By developing industry, the bourgeoisie strengthens the working class and ultimately creates the conditions for its own overthrow. This greatly facilitates the task of the socialist revolution in these countries.
The theory of the permanent revolution
It is a historically verifiable fact that a nation that was once a poor, oppressed, downtrodden, exploited colony – once it becomes independent – can adopt an aggressive, imperialist policy in relation to its neighbours: declaring wars, seizing land and so on. In fact, one can say that this occurs in almost every case, the newly appendant bourgeoisie seeks to exploit and oppress weaker states within the region. You can have big robbers, but you can have medium sized robbers and you can have small robbers, and within certain limits, it is possible for a dominated nation to play an imperialist role.
Does this analysis contradict the theory of permanent revolution? No, it does not. When we talk about Russian imperialism and Chinese imperialism, does it contradict what Trotsky wrote? Not in the slightest. The theory of the permanent revolution explained how in a backward country in the epoch of imperialism, the “national bourgeoisie” was inseparably linked to the remains of feudalism on the one hand and to imperialist capital on the other and was therefore completely unable to carry through any of its historical tasks.
As Trotsky predicted, the rotten Russian bourgeoisie was unable to solve the most pressing tasks posed by history, especially the agrarian question, to which we must add the question of peace. It was for that reason that the Bolsheviks could take power on the basis of slogans that were essentially bourgeois-democratic in content (Peace, bread, land, the Constituent Assembly, right of self-determination for the oppressed nationalities). But having taken power into their hands, the Russian workers did not stop but proceeded to expropriate the capitalists and begin the task of the socialist transformation of society.
Here we see the permanent revolution in its classical form, as worked out by Trotsky. But for a number of reasons (the Stalinist degeneration of the Soviet Union and the delay of the proletarian revolution in the West) the revolutions that occurred subsequently in China and other backward countries took place in a distorted Bonapartist manner. They were departures from the norm, which nevertheless prepared the way for great advances in the field of production and culture, dragging formerly backward countries into the twentieth century.
Of course, the totalitarian Stalinist regimes had nothing in common with the workers’ democracy established by Lenin and Trotsky in Russia. But the nationalization of the means of production opened the door to a spectacular transformation of society, albeit at a terrible cost. It is impossible to understand the present situation of Russia and China without understanding that 1917 and 1949 were decisive turning points in their destinies.
Just as the Chinese Revolution was a departure from the norm established theoretically by Trotsky and carried into practice in 1917, so there are many other, even more peculiar departures from the norm. Japan followed a peculiar path of development. It was peculiar because it did not correspond to a preconceived norm. But all kinds of peculiar transitional forms occur in both nature and society. And the fact that something does not correspond to a preconceived norm does not entitle us to ignore it. On the contrary, it requires us to explain it.
If we say that Japan was a very peculiar case, then we should add that there are many other peculiar cases. But that does not allow us to leave Japan out of consideration, any more than we can leave Tsarist Russia out of consideration. Lenin certainly did not do that. How does Japan fit with the theory of the permanent revolution? Japan was a very backward, semi-feudal country. It came into conflict with America as a result of the expansion of nascent American imperialism. In Japan, it was the feudal class that began the process of capitalist transformation from the top as a means of modernizing Japan and competing with the Americans, who were more advanced.
Japan remained a very backward, semi-feudal country for a long time, but it also became a ferocious imperialist state that launched a predatory war of conquest in China. What completed the development of modern capitalism in Japan was not the classical norm of the permanent revolution as envisaged by Trotsky. The tasks of the bourgeois-democratic revolution in Japan were not solved by a proletarian revolution, as in Russia. They were begun by the feudal leaders and finished by the American occupying forces after 1945.
The American imperialists occupied Japan but were terrified of the spread of “Communism”, especially of the Chinese Revolution. They were therefore compelled to carry out an agrarian reform and other measures that in effect completed the bourgeois revolution. So Japan, in a very peculiar way, has become a powerful industrialised modern capitalist, imperialist state, which it remains at the present time. Something similar occurred in South Korea and Taiwan. The bourgeois transition there was carried out by the American occupation forces for the same reason.
The question must be asked: why did Lenin include Tsarist Russia in the six most prominent imperialist nations? Tsarist Russia in Lenin’s day was an extremely backward, semi-feudal country that never exported a single kopeck in capital. On the contrary, it was heavily dependent on foreign capital. There would have been no Russian capitalism without Belgian, British and American capital. The tsarist state itself was heavily in debt to foreign bankers, particularly to the French. So if we are looking for a dependent country one could not find a better example. Russia was utterly and completely dependent, and Lenin and Trotsky were well aware of the fact. But it was at the same time a monstrous imperialist state.
How is such a thing possible if one accepts the view that only a handful of powerful, rich countries – Europe, Japan and America – can be regarded as imperialist states, while the rest of the world are poor, dominated and oppressed? The case of Tsarist Russia proves precisely that an economically dependent country can also be an imperialist state. Yet in the case of Russia we see the theory of permanent revolution in its classical, almost laboratory form. One might add that this was the only case of its kind in world history. There were many other cases where the bourgeoisie was expropriated, but none of these cases corresponded to the norm. Every one of them was a “peculiar” case.
The tasks that were solved by bourgeois democratic revolutions in England and France could only be solved in Russia by means of a proletarian revolution against the bourgeoisie. But Trotsky also predicted that once the proletariat had taken power, it could not stop at the bourgeois-democratic tasks but would immediately proceed to expropriate the landlords and capitalists and commence the socialist transformation of society. That is what the permanent revolution states and that is precisely what occurred in Russia.
But that is only one half of the permanent revolution. The other half was the need to extend the Russian Revolution to Europe, particularly to Germany. Once that failed – for reasons that fall outside the present discussion – the bureaucratic degeneration of the Revolution was inevitable. Nevertheless, by abolishing capitalism and introducing a plan of production, the October Revolution brought about the greatest development of the productive forces ever seen in history.
Consequences of the fall of the USSR
Twenty-five years ago, at the time of the split in Militant, we were discussing the perspectives for Russia. Peter Taaffe had the position that if capitalism was established in Russia, it would be a colony of the West (a dependent country). Ted Grant simply laughed at that. He replied that if capitalism was restored in Russia, it would not be a dependent colony of the West, it would be a powerful and aggressive, imperialist state, as tsarist Russia was. And that has been shown to be true.
It was not the degenerate Russian bourgeoisie, which was thrown into the dustbin of history in October 1917, but the nationalised planned economy that dragged Russia into the modern era, building factories, roads and schools, educating men and women, creating brilliant scientists, building the army that defeated Hitler and putting the first man into space. And despite the chaos and disruption caused by the destruction of the planned economy and the dismantling of the USSR, many of those gains still remain.
Despite the crimes of the bureaucracy, the Soviet Union was rapidly transformed from a backward, semi-feudal economy into an advanced, modern industrial nation. In the end, however, the bureaucracy was not satisfied with the colossal wealth and privileges it had obtained through plundering the Soviet state. As Trotsky predicted, they passed over to the camp of capitalist restoration, transforming themselves from a parasitic caste to a ruling class.
The movement towards capitalism has meant a big step backwards for the people of Russia and the former Republics of the USSR. In The Revolution Betrayed Trotsky wrote: “The fall of the present bureaucratic dictatorship, if it were not replaced by a new socialist power, would thus mean a return to capitalist relations with a catastrophic decline of industry and culture.” (Chapter 9, Social Relations in the Soviet Union.) That is exactly what happened.
In the period immediately following the fall of the USSR, the Russian economy fell by approximately 60 percent. This made the collapse in America following the Wall Street Crash look like child’s play. There is no parallel for it in economic history. To find something similar one would have to cite, not an economic crisis, but a catastrophic defeat in war. Society was thrown back and had to learn all the blessings of capitalist civilization: religion, prostitution, drugs, and all the rest of it.
After the fall of the USSR, the USA became the only superpower in the world. With immense power came immense arrogance. The “Bush doctrine” was supposed to abrogate to the USA the right to intervene anywhere in the world, to interfere in the internal affairs of supposedly sovereign states, to spy, to bring down governments, to bomb, to assassinate and if necessary to invade with impunity. The collapse of the Soviet Union allowed US imperialism to intervene in what were formerly Soviet spheres of influence. They brought Poland and other Eastern European and Baltic states into NATO and then set their sights on former Republics of the Soviet Union.
American imperialism took advantage of that to start to seize the Balkans, Yugoslavia and Iraq – former Soviet spheres of interest – which they would not have dared to touch in the past. The breakup of Yugoslavia and the bombing of Serbia contributed to a feeling that Russia was being encircled and under siege. Together with the economic collapse and general impoverishment, this produced a deep sense of national humiliation.
However, no economy can continue to fall forever. Sooner or later, production begins to recover and that occurred in Russia, particularly after the crisis and the devaluation of the rouble in 1998. After that Russia’s economy improved, in great measure because of the boom in world capitalism and the demand for Russian oil and gas. Putin benefitted from that recovery. He is the representative of the Russian oligarchs who have grown rich through shameful plundering of the Russian state and people. He also gained popularity by making a show of standing up to US imperialism.
Putin and the reactionary Russian oligarchy have only succeeded in consolidating capitalism in Russia (at least temporarily) by basing themselves on the gains that were made possible by the October Revolution. Russia today is very different from Russia in 1917. Although average productivity of labour in Russia is half that of the European average, nonetheless thanks to the gains made possible by the October Revolution, it is a modern, industrialized country with a powerful working class. It is also a formidable military power.
Unlike Yeltsin who adopted a servile attitude to US imperialism, Putin is asserting himself against America and against Europe: in Georgia, in Ukraine and Crimea (and lately in Syria). The first concern of the Kremlin (the ruling oligarchy) was and is to reassert Russia’s domination over its old spheres of influence, starting with the former Soviet Republics that lie on its borders. In the case of Georgia, the American imperialists received a kick in the teeth. Putin said: thus far and no further. In the 2008 war in Georgia, Moscow did not hesitate to use its military power to underline the point. Later it did the same thing in Ukraine. This shows the limitations of the power of US imperialism and the growing power and confidence of the Russian ruling clique.
Though nowhere near as powerful as US imperialism, Russia managed to turn to its advantage the mistakes of the US imperialists in overstretching their forces and Russia’s superior forces on the ground on a regional level. In effect the Russians won in the Ukrainian conflict. The Americans blew hot and cold but did nothing. They imposed sanctions, but the only result was to drive Putin’s support up to around 80 percent. He answered by intervening in Syria. The American imperialists were not very happy about it but they were forced to accept it.
The nature of Putin’s regime
How can one characterize Putin’s Russia? It has been described as a mafia gangster state. This is correct as far as it goes, but it does not go far enough. This characterization only describes the monstrous form of the Russian state. It tells us nothing about its precise class character. Actually, it avoids the central issue altogether. Let us pose the question concretely, and in stages. Is Russia capitalist? We all agree that it is. Russia is a capitalist state, controlled by an oligarchy that owns big companies and banks that were looted from the nationalized economy. These giant monopolies are closely linked to the state – a bourgeois state – that is run in the interests of the oligarchs. The latter need a strong man in the Kremlin, in part because they fear the masses, in part to settle the many feuds between different oligarchs for the division of the loot.
All these features conform very closely to what Lenin described as state monopoly capitalism. The mafia-gangster element is secondary. The only difference is that whereas the western Mafiosi (who also control the state in the interests of the big banks and monopolies) have had sufficient time to disguise their dictatorship under a fig-leaf of formal democracy, the Russian parvenus do not feel sufficiently confident to allow such luxuries. In America and Britain, a discreet veil is thrown over the dictatorship of Capital; in Russia it presents itself in its naked and most obvious form. But the essence is exactly the same.
Russia is a capitalist state ruled by a parasitic and rapacious oligarchy. But if you say “a”, you must say “b”, “c” and “d”. The foreign policy of the Russian oligarchy, like that of any other capitalist state, is determined by the interests and cynical aims of the Russian bourgeoisie. And since foreign policy is the extension of domestic policy, Putin does not stop at any violent means to impose his will outside Russia’s borders whenever he considers it necessary to protect the interests of the Russian oligarchs – and his own, of course.
The Russian regime is a regime of bourgeois Bonapartism. A Bonapartist regime is a regime of crisis in which the contradictions of society cannot be resolved within the “normal” functioning of bourgeois democracy. The state tends to rise above society in the person of a “strong man” who claims to stand above classes and parties, representing “the Nation”. The former KGB officer Putin bases himself mainly on the armed forces, the police and the executive arm of the state, but he also balances between the classes, utilizing populist and nationalist rhetoric. And like every Bonapartist in history, he tries to project an image of strength by participating in foreign military adventures.
Here we see a striking difference between Russia and China. China has all the classical features of imperialism as outlined by Lenin: state-monopoly capitalism, the export of capital, a drive for expansion to seize foreign markets and spheres of influence, an expansionist foreign policy designed to gain control of trade routes etc. Russian imperialism has a different character. Its objectives are more limited and mainly dictated by strategic and military considerations.
There is little prospect of economic gain from, say, taking over the ruined Donbass. Even the future prospect of Syrian oil seems more than doubtful, and in any case the Russians have plenty of oil of their own. The struggle in Ukraine was not about markets. The Russians took Crimea, not because of markets (Crimea is not a big market) but because of strategic military considerations. They could not allow their big naval base in Sevastopol to fall into the hands of the Ukrainian nationalists (that is, of NATO). Putin does not really want the Donbass, which would represent a colossal drain on Russia’s resources. That, too, is for geopolitical considerations. It is a struggle between American imperialism and Russian imperialism for control over these areas.
These are clear cases of… what? We agree that the Russian regime is completely rotten, rotten to the core. But does the fact that a regime is rotten and reactionary necessarily mean that it is a weak regime or that it cannot be imperialist? That does not follow at all. Tsarism was also a rotten regime – the regime of Rasputin. But it was also a formidable imperialist state.
Putin is a gangster but does that mean that he is unpopular? No it does not. At the moment, he has got around 80 percent support in the polls. Even if we allow for a certain amount of rigging, all the bourgeois commentators have to admit that he remains popular, especially among the workers. Of course, we understand that this will turn into its opposite at a certain stage. But for the present, Putin’s policy of kicking the Americans is popular in Russia. He’s doing rather well out of confronting American imperialism.
These facts can only lead one to the conclusion that Russia today is an imperialist state, although it is more similar to the old Tsarist-style imperialism than either contemporary China or the USA. Russia’s participation in the capitalist world economy is limited, mainly confined to the trade in oil and gas. But it is intervening actively outside its borders, both militarily and diplomatically, and it is constantly coming into conflict with America, which at times threatens to turn into a direct military confrontation. How then can one say that Russia is dependent on American imperialism?
Though it does not really have the economic or military strength to challenge the US in the world arena, it seeks to have its own independent foreign policy and wants to negotiate with the US from a position of strength. It goes without saying that this confrontation does not contain an atom of progressive content. It is no longer sufficient to say that Russia is a regional imperialist power. The intervention in Syria proves that. Commenting on this The Economist (14.5.2016) states:
“Russia today hardly looks like the mere ‘regional power’ that Barack Obama once dubbed it. Any path to peace in Syria now runs through Moscow. ‘Only Russia and the United States of America are in a state to stop the war in Syria, even though they have different political interests and goals,’ wrote Valery Gerasimov, chief of Russia’s general staff, in a recent article.”
Russia’s intervention in Syria has decisively changed the military situation. In Syria it is Moscow that decides and the Americans have been compelled to accept it. However, Russia’s intervention on a world scale is limited in its objectives, which are mainly of a military-diplomatic character. Its main aim is to prevent the US from intervening in what it sees as its spheres of influence and to force the Americans to recognise it as a world power that is not to be taken for granted. The case of China, however, is very different.
China, like Russia, also shows the complete correctness of the theory of the permanent revolution. The degenerate Chinese bourgeoisie had over 20 years in which to carry out the tasks of the bourgeois-democratic revolution but was not even able to establish the unification of China or fight a successful war against Japanese imperialism, let alone carry out a serious agrarian reform.
It was precisely the bankruptcy of Chinese capitalism and the pressing need of the masses for a way forward which gave rise to the phenomenon of proletarian Bonapartism. This was due to a number of different factors: in the first place, the complete impasse of capitalism in the backward countries and the inability of the colonial bourgeoisie to show a way forward; secondly, the inability of imperialism to maintain its control by the old means of direct military-bureaucratic rule and last but not least the delay of the proletarian revolution in the advanced capitalist countries.
However, the weakness of the subjective factor in China – the absence of a Bolshevik-Leninist Party – and the existence of a powerful regime of proletarian Bonapartism in the Soviet Union meant that the Chinese Revolution was deformed from the very beginning. Nevertheless, the nationalization of the productive forces and the introduction of a planned economy, albeit on a distorted bureaucratic basis, enabled China to advance rapidly, laying the basis for a modern industrial economy with a large and educated working class.
This is not the place to discuss the reasons for capitalist restoration in China. We have done that elsewhere. Suffice it to say that Mao’s policy of autarchy (the Chinese variant of socialism in one country) led China into a blind alley. Following the death of Mao, a section of the Chinese bureaucracy led by Deng Xiaoping tried to solve the impasse of the bureaucratic economic system by reform from the top and integration in the world economy.
Under the control of a parasitic bureaucratic caste the logic of this policy led inevitably in the direction of capitalism. Like the Russian bureaucracy, the privileged Chinese officials became transformed into wealthy businessmen by plundering state assets. But unlike their Russian counterparts, they kept control firmly in the hands of the “Communist” Party. They proceeded gradually, step by step and succeeded in avoiding the kind of catastrophic collapse that occurred in Russia.
From the standpoint of the masses, capitalist restoration in China represents a historic reverse. But the suffering and super-exploitation of the Chinese workers does not mean that there was no development of the productive forces, any more than the suffering and super-exploitation of the British workers meant that there was no development of the productive forces at the time of the Industrial Revolution. On the contrary, it is precisely on the basis of that super-exploitation that capitalism develops and thrives. That was the case in Marx’s day and it is still the case today, whether in China or anywhere else.
China was able to benefit from a boom in the world economy and a massive influx of foreign investment from American, Japanese and European capitalists eager to get their hands on the surplus value extracted from cheap Chinese labour. Consequently, China experienced a period of rapid economic growth that lasted until recently. Figures for the world labour force in industry in 2013 show that the global industrial proletariat numbered 725 million. Of these 106 million were in the advanced industrial countries. 250 million were in East Asia. As a proportion of the overall industrial workforce, the industrial workers in the developed economies represented less than 15% of the world industrial working class. In East Asia it was close to 35% of the industrial working class. And a large part of that is represented by China.
One could say that the peasants are poor, the workers exploited. That is all perfectly true. The masses are always exploited, including in the imperialist countries. But this tells us nothing about the level of economic development. Marxists do not approach history from a moralistic or sentimental point of view. Marx said that capitalism came onto the stage of history dripping blood from every pore, and that is quite true. But the same Marx also said that the development of the productive forces under capitalism was a progressive development because it strengthened the proletariat and created the material basis for advance towards a higher stage of society: socialism.
From a Marxist point of view, the development of the productive forces in China is positive because it signifies the strengthening of the working class, despite the fact that it was achieved through brutal exploitation in factories that resemble those that existed in Britain in the days of Marx and Dickens. Whatever one can say about China today, one thing is clear to even a blind man: present day China bears no relation to the old China that was a poor, backward, enslaved semi-colony of imperialism. On the contrary, it is the second most powerful industrial nation in the world with a powerful army. What possible parallel can one draw between this and the China of Chiang Kai-shek before 1949?
Growth of China’s economic power
China has emerged with significant multinational corporations of its own. Among the top 75 companies on a global scale 12 are Chinese. Sinopec, an oil refiner, is number two. China National Petroleum is number four. The Industrial and Commercial Bank of China is number 18. The China Construction Bank is number 29 and then there are construction companies, mobile phone, telecoms, motor, and rail.
It is true that China does have the presence of a significant number of multinational corporations from other countries. Something like 450 of the world’s top 500 companies operate in China, but China also has its own corporations, and they are backed by the state. Many of them are state-owned and the state-controlled banks provide them with loans and capital. Moreover, the presence of foreign monopolies in China does not, in itself, prove that it is a “dependent nation”.
The export of capital regularly takes place between advanced capitalist (imperialist) countries. This is a normal feature of capitalism in the stage of imperialism. The case of Britain is a very striking example of this process. The former “workshop of the world” has been in a prolonged state of decline for the last century. This decline has reached the point where British manufacturing industry has virtually ceased to exist. Almost all industry in Britain is now owned by foreign capitalists – not just American, German and Japanese, but also Chinese and Indian. Does this mean that the United Kingdom is a “dependent nation”? Of course, it does not. Still less can China be put into that category.
In the 2015 edition of the Fortune 500 list there were 98 Chinese companies and 127 US companies. In 2000 there were only ten Chinese companies and in 2010 there were 46 while the US in 2000 had 179. In 2006 the five most important banks in the world were all from the traditional imperialist powers (USA, UK, etc...). But in March 2009, the first three positions were already occupied by Chinese banks and this remains the case.
The most striking proof that China has arrived at an imperialist stage of development is the present crisis of overproduction. China produces over 50% of all the aluminium in the world. This is leading to a collapse of world prices, pushing competitors into crisis. Chinese overcapacity in oil refining is estimated at 200m tonnes, and “in 2014 Chinese refiners were thought to be running at just two-thirds of capacity.” Consequently “diesel exports leapt 79%” in 2015 and “total net exports of all oil products will rise by 31% this year”. The overcapacity of Chinese chemicals firms has “swept away the profits of Japanese rivals” in the polyester industry. (Ibid.)
Mao dreamed of overtaking Britain and America in steel production. In fact, China produces about as much steel (803 million tonnes in 2015) as the rest of the world put together (1.599 billion tonnes), and its overcapacity (400 million tonnes) is destroying the industries of its competitors all over the world. In April of this year, according to the World Steel Association, China produced 69.4 million tonnes of crude steel, more than the 65.5 million tonnes produced by the rest of the world.
The Chinese economy has developed faster than any other over the past two decades, and has reached a very high technological level in certain industries and certain areas, but average productivity of labour remains far behind that of the US and Europe, and even Russia. Chinese productivity of labour has grown by 8.5% per year on average since 1996. Depending on the measure used, Chinese productivity is around a quarter of US (in labour productivity per person employed adjusted for PPP the figures are $26,793 vs $118,826), but the power of a country on the world arena is not decided purely on the basis of average levels of productivity, otherwise Luxemburg and Norway would be among the foremost imperialist powers
The question that must be answered is: has the Chinese economy developed to the point where it has powerful monopolies, overproduction and consequently a surplus of capital, and a preponderance of financial institutions that are facilitating the export of capital, and not just commodities? We must answer this in the affirmative. But after twenty-five years of this growth the Chinese economy has now come up against the fundamental contradictions of capitalism. Global overproduction has been enormously exacerbated by overproduction in the Chinese economy.
Between 2011 and 2013, China poured almost 50 percent more cement than the US did in the entirety of the “American century”. China is the world’s largest manufacturer, “accounting for nearly a quarter of global value added in this sector” (The Economist, 12.9.2015). China’s coal industry, almost as large as the rest of the world’s put together, “could have 3.3bn tonnes of excess capacity within two years” (The Economist, 9.4.2016), meaning capacity utilisation is only just over 50% since domestic consumption is 4bn tonnes a year. Naturally it is obliged to export much of this excess coal.
Terrified that its overcapacity will lead to mass unemployment at home, the Chinese ruling class is intent on exporting its unemployment elsewhere, fighting to secure for its producers as big a market share as possible. This is exacerbating the contradictions of the capitalist world economy, creating a backlash against China that is preparing the ground for protectionist measures and future trade wars. The western capitalists are complaining that the Chinese state protects its own industries, providing them with capital that makes them more competitive. This is considered “unfair” trading. Protectionist tendencies are growing stronger. Tensions between the USA and China are growing sharper all the time.
The export of capital
Lenin explained that one of the key defining features of imperialism was the export of capital, as distinguished from the lower form, the export of commodities. China is a major exporter of capital. It is not only the world’s largest manufacturer, but also the world’s largest trader. Since 2009 it has been the largest exporter, and since 2014 the largest overall trader. This is reflected in world ports and shipping facilities, the key infrastructure for world trade.
China is in fact one of the world’s largest exporters of capital. “In barely a decade, Chinese OFDI has gone from virtually nothing to more than $100bn a year, launching it into the top three exporters of direct investment globally.” (FT, 25.6. 2015.) Much of the capital exported by China is to the US and it is an indication of the relative decline of the US as an imperialist power, that it is now a net importer of capital. However, this decline is of a relative, not absolute, character. The US is still the world’s major imperialist power. But China has emerged as a powerful new imperialist state in its own right.
This is what The Economist says on the question of the export of capital: “Since the 1970s trade across the Pacific has far outrun the Atlantic... by one estimate in 2010 China promised more loans to Latin America than the World Bank, the Inter-American Development Bank and the US Import-Export Bank combined.”
This represents a massive export of Chinese capital. And the article goes on: “China has interrupted investment and trade with neighbours who stand up to its territorial assertiveness such as Japan, the Philippines and Vietnam.” That is to say, China is using its economic weight to impose its will on other countries. China is building pipelines, railways and roads in the region mainly to supply its own economy with raw materials.
But China is already suffering from the inherent contradictions of capitalism. There is a huge surplus of capital in China. There is a disincentive to investing in further factory production, at least of lower value manufacturing, at home, since these industries have already arrived at a state of chronic over-capacity. The speculative bubbles in housing and the stock market are also evidence of a surplus of Chinese capital searching for a profitable avenue outside of domestic manufacturing.
China is not only exporting capital to less developed countries but to advanced capitalist countries also. Four years ago one of China’s state owned energy companies bought Canada’s Nexen for $15 billion. More recently, David Cameron and the British bourgeoisie fell over themselves, grovelling before Xi Jinping during his state visit to London in a desperate attempt to get more Chinese investment and trade, at a time when thousands of British jobs were being destroyed by the dumping of Chinese steel.
According to 2013 figures, China possesses the first (Shanghai), third (Shenzhen), fourth (Hong Kong), sixth (Ningbo-Zhoushan), seventh (Qingdao), eighth (Guangzhou) and tenth (Tianjin) busiest container ports in the world. The United States has none in the top ten – its first entry is Los Angeles at 18th! It is estimated that by 2030 China will own one third of the world’s container ships. 30 percent of the volume of containerised exports in the world is from China, which is three times the quantity from the USA.
In 1964, the US had the world’s largest Merchant Marine (the collection of ships needed for trade), it has now been relegated to fourteenth, with China number two. This unassailable position in world trade can and must lead to imperialist developments in terms of the export of capital, especially as labour costs in China rise rapidly.
One statistic speaks louder than any other in proving that China is engaged in the export of capital. In 2014 Chinese outward direct investment exceeded its foreign direct investment. That means that for the first time China invested more elsewhere than was invested in the country from elsewhere.
Lenin explained how the export of surplus capital tended to be closely allied to the strategic interests of the imperialist power, rather than being merely a means to make profits for a particular company. He gave the example of how German banks “systematically developed the oil industry in Romania, for example, in order to have a foothold of their own.”
This is a product of the growing tendency of giant monopolies to develop close connections with the state. Just as German capitalism, excluded from the established oil markets by American competitors, got state help to find oil markets elsewhere, so Chinese capital is using its mountains of cash and trading influence to build and develop alternative energy and raw materials markets and trade routes.
Economic relationship between China and the United States
As of 2013, China is the third largest exporter to the United States of agricultural products, aircraft, machinery and vehicles, comprising $122.1 billion. It is also the largest importer to the US with revenues totalling $440.4 billion. Overall, China accounts for approximately 8 percent of the Standard & Poor’s 500 index revenue.
In the past, an oppressed dependent country would be heavily in debt to its imperialist masters. That was the clearest indication of its dominated status. Tsarist Russia, for example, was heavily in debt to France and other imperialist nations. But in the case of China this relationship is stood on its head. The rapid rise of manufacturing and China’s success on world markets has given it the largest foreign exchange reserves in the world.
Compared to other foreign nations, China is the largest foreign owner of US Treasury securities, which amounted to $1.224 trillion in February 2015, the second being Japan. It is also the largest US investor. China now holds the same amount of foreign-held securities as Japan, which is most certainly an imperialist country. Between them these two countries own approximately half the world total of foreign-held securities.
Japanese-owned debt does not arouse the same hostility as Chinese-owned debt, because Japan is seen as a friendlier nation. The Japanese are not in the habit of building islands in the South China Sea or of challenging American hegemony in other ways. But China is viewed with a mixture of envy, suspicion and fear.
Chinese lenders bought up US Treasuries partly because China wants to keep the yuan pegged to the dollar in order to keep down the cost of Chinese exports. The Chinese need the American market to sell their goods to keep businesses running. Also since the dollar is seen as one of the safest currencies, the Chinese believe that this link will guarantee the stability of the yuan.
China has a vested interest in keeping the yuan weaker than the dollar to ensure its export prices stay competitive. This strategy ensured that China is able to export more than any other nations in the world. The weak yuan was one element that enabled it to maintain a 10 percent annual increase in its gross domestic product (GDP) for 30 years. For the time being the worldwide belief in the dollar provides a certain safety net for the yuan. But this may not last. At a certain stage, it is entirely possible that China will want to weaken the link between the yuan and the dollar, or even allow the yuan to float.
In principle these loans are redeemable in dollars. In case of necessity, the Chinese could call in their debts in exchange for greenbacks. In 2013 and 2014 China caused alarm when it started buying up a lot of gold to store in its bank vaults. This already expressed a growing concern about the future stability of the dollar. China spent the first few months of 2015 selling debt and calling in loans, decreasing its total to less than $1.2 trillion. That was a warning of things to come.
Since China is the largest foreign owner of US Treasury bills, bonds and notes, a crash in the Chinese stock market would push the Chinese government to start selling these securities to reduce its own debt. This would provoke an instantaneous fall of the US dollar, forcing the Federal Reserve to raise interest rates, triggering a slump. China would not be keen to go down that road since a falling dollar would push up the value of the yuan, increasing the prices of Chinese exports and thus deepening the crisis in China. Nevertheless, such a scenario is possible in the future and it alarms the Americans.
Every American politician has expressed concern at the extent of the debts that the US government owes to Chinese lenders. This stands the relation between imperialism and colonies on its head. Since when did a poor dependent nation underwrite the debts of the mightiest imperialist power on earth?
The Asian Infrastructure Investment Bank
A further example of China’s drive to become a world power was the launching of the Asian Infrastructure Investment Bank (AIIB). If Lenin was right that the export of surplus capital is one of the defining features of modern imperialism, then China’s ploughing hundreds of billions of its foreign exchange reserves into an international investment bank linked to realising its strategic interests is clear proof of China’s imperialist nature. The launch of the AIIB is significant not just for the export of capital, but also its diplomatic triumph on the world stage. The offer was extended far beyond Asia.
Publicly America says it welcomes China’s ascent to great power status, so long as the Chinese respect international norms and play a proper part in the “multilateral system”. But in practice, whenever China does anything on the world stage the USA tries to hem it in. America has systematically blocked China from increasing its say in international financial bodies like the IMF. Even a modest proposal to increase the resources of the IMF (giving slightly more votes to China) has been stymied for years in Congress. America has also frustrated efforts to boost China’s weight in the World Bank. It also excluded China from its planned Trans-Pacific Partnership free-trade deal.
We saw this in the case of the AIIB, where, as usual, America adopted a policy of containment, but this failed in practice. Behind the scenes the Americans have put pressure on its allies not to join it. When Britain became the first country outside Asia to apply for membership, an American official complained about its trend towards “constant accommodation” of China. But that did not stop Germany, France and Italy announcing that they too wanted to be founding members. All the European NATO countries signed up. The only country that refused to sign up to the AIIB was Japan. It is interesting to note Russia’s attitude towards the AIIB. They joined it and have become the third biggest stakeholders. Putin has invited the AIIB to invest in Russia. In general Russia’s foreign policy converges with China when it comes to clashes with the USA.
A feature of exporting of capital described by Lenin was the tendency for loans and investments to involve other linked monopolies from the imperialist country. Britain or France would lend money to a country to develop its infrastructure on condition that the loans be spent on British and French companies, so that the imperialist state would benefit twice over – once from the interest repayments, and again from the contracts these loans were spent on.
This feature is also being repeated by the Chinese state, which sees the investment opportunities surrounding it as a means of keeping the factories open and the workers in work: “Construction growth is slowing and China doesn’t need to build many new expressways, railways and ports, so they have to find other countries that do… One of the clear objectives is to get more contracts for Chinese construction companies overseas.” (Financial Times, 12.10.15.)
Already in 2016 there have been over $100bn in cross border mergers and acquisitions by Chinese companies – one third of the global total. Chinese capital exports involve both state-owned companies as well as the private sector. All the phenomena we have described here are typical of imperialism.
China and Latin America
During recent decades there has been a massive increase in trade between Asia and Latin America. Asia has overtaken the EU as Latin America’s second biggest trading partner after the US. Of this trade China has by far the biggest share. In the case of Brazil, Chile and Peru, China has overtaken the US as the biggest trading partner. And what is the nature of this trade? China has been exporting goods to Latin America and bringing back natural resources. That is the opposite of what one would expect of an underdeveloped dependent economy. It is in fact typical of the relation of an imperialist country to more underdeveloped economies.
What about the role of China in Venezuela? No country lends money to Venezuela except the Chinese. And this leads to Chinese finance capital having a major impact in Venezuela. In the past, when oil prices were high, Venezuela paid the money back in oil and this was calculated on average below the world price of oil so the Chinese would consume the oil that they needed and sell the rest, making a profit. In this relationship the biggest share of the profit went to the Chinese. But this is no longer possible.
The Chinese no longer have the capacity to consume all the oil that Venezuela sends to China in exchange for money and it is no longer profitable to sell the excess oil because the prices are too low. So the way the Chinese get their money back from the loans is through the creation of special economic zones. This is what one might call the Chinafication of Venezuela.
In these special economic zones, no taxes are paid. The companies that invest in these areas do not need to be in the tax registry. Nor does bourgeois democracy apply in these areas. The President appoints a local governor from above and the labour laws depend on the governor. This is not very different to what the IMF would propose. What shows the imperialist nature of China is that these concessions are orientated towards benefitting Chinese capital.
These companies are based on mixed capital: Chinese and Venezuelan. But they are set up on the basis of loans from China and the rest of the loans given to Venezuela are meant to buy Chinese goods. For instance, one year ago Venezuela purchased 10,000 Chinese taxis. This is a commodity which is not a priority for the country at this point, but China had an overproduction of taxis and it was Venezuela that bought them.
China in Africa
China has been expanding its role in Africa. Its investment in several countries like Nigeria, Angola and Gabon, have outbid their western counterparts, building railways and roads, taking over mining, oil, etc. China is now Africa’s largest trading partner. The share of Africa’s exports that China receives has soared from one to fifteen percent over the past decade, while the European Union’s share fell from thirty-six to twenty-three percent.
For China, Africa represents a key source of raw materials, a market for cheap Chinese-made products and opportunities for investment in infrastructure, especially in potential markets where western firms are deterred by political considerations such as sanctions or political instability. China is actively engaged in exploiting Africa’s rich natural resources, especially crude oil of which China is now the world’s second largest consumer, with over 25 percent of its oil imports coming from Sudan and the Gulf of Guinea. Almost every African country today bears examples of China’s presence: oil fields in the east, farms in the south, mines in the centre of the continent, etc.
The relation between China and Africa is an absolutely classical case of colonial exploitation. This fact has been commented on by many observers, especially African trade unions. The International Textile, Garment and Leather Workers Federation Africa Chapter, which represents trade unions from South Africa, Zimbabwe, Mozambique, Lesotho, Swaziland and Zambia, commented on China flooding the African markets. They say the following: “Increasingly the trade pattern between the African continent and China is becoming colonial in character with African countries exporting raw materials to China and importing finished products.”
China has seized control of African natural resources using Chinese labour and equipment without transferring skills and technology to Africa. Lamido Sanusi, the governor of the Central Bank of Nigeria, wrote in the Financial Times: “China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism”. He added: “Africa must recognize that China – like the US, Russia, Britain, Brazil and the rest – is in Africa not for African interests but its own.”
The Chinese imperialists brutally exploit and oppress the African workers, Chinese workers live in gated camps and are kept separate from local workers even though they often have to work with them during working hours. There have been many reports denouncing an overtly racist attitude towards the African workers who are treated little better than slaves… Zambia with all of its copper and gems has been especially attractive to China because it has let investors take their profits abroad. A Human Rights Watch report said that the Chinese owners of copper mines in Zambia regularly violate the rights of their employees by not providing adequate protective gear and ensuring safe working conditions.
When Zambian employees of the Chinese-owned Collum Coal Mine protested, their Chinese managers fired gunshots at the miners, injuring thirteen of them. After Chinese business interests put pressure on the then-government in Lusaka, the director of public prosecutions suddenly dropped its criminal case against the managers. Later hundreds of protesting miners at Collum killed a Chinese manager and injured two other Chinese supervisors. These are far from isolated cases.
The “New Silk Road”
The AIIB’s first confirmed project is linked to China’s strategic interests. It is to fund three of the “One Belt, One Road” projects: financing the building of key roads in Pakistan, Tajikistan and Kazakhstan. Through the AIIB and Chinese state-owned banks, China plans to spend an initial $46bn investing in roads and a key port in Gwadar. The project is called the China-Pakistan Economic Corridor, and China has convinced the Pakistani state to provide the security for this project, with 10,000 of its soldiers guarding the construction from “terrorists” and the thousands of peasants who will be evicted from their land.
The Financial Times (12.10.15) said that the Silk Road project is the biggest act of economic diplomacy since the Marshall Plan launched by America following World War Two and in order to finance it, Chinese state-owned banks are to receive a capital injection from the foreign exchange reserves of $60bn. It extends as far as Nigeria and Zimbabwe, which are to receive $5bn of investment for the railways needed to integrate into this “One Belt, One Road.”
This is perhaps the clearest example of China’s expansionary aspirations. China’s biggest trading partner outside of Asia is the EU. China has decided that it is in its strategic interests to develop trade routes along the land route to the Middle East and Europe. That would link together countries with a population of about three billion people. The Silk Road project as a whole is expected to cost one trillion dollars.
The China-Pakistan Economic Corridor, according to its planners, is a mega project that aims to connect Gwadar Port in Southwest Pakistan to China’s autonomous region of Xinjiang as an extension of China’s Silk Road initiative. This is supposed to provide benefits to Pakistan in transport, infrastructure, telecommunications and energy. In reality, it is a plan to turn Pakistan into a Chinese satellite.
China will get most benefits by opening trade routes for Western China and providing China direct access to the resource-rich Middle East region via the Arabian Sea, bypassing longer logistical routes currently through the Strait of Malacca. It will include the construction of highways, railways, and natural gas and oil pipelines connecting China to the Middle East. China’s stake in Gwadar will also allow it to expand its influence in the Indian Ocean, a vital route for oil transportation between the Atlantic and the Pacific.
These facts clearly reveal that this project is basically designed by the Chinese elite to serve the geopolitical and strategic interests of the Chinese state. This project is opposed by US imperialism and also by an important section of the Baloch nationalists. It brings no benefit to the inhabitants of Gwadar who live and work in desperate conditions. On the contrary, they are being deprived of their rights in the area. There is also resentment in Sindh and other nationalities through which this “corridor” has not been routed.
China’s trade with Central Asia had already reached $50bn by 2013, supplanting Russia as the region’s number one trading partner (a 50-fold increase from $1bn in 2000). China has already conquered this region economically and is in the process of doing so politically. The Financial Times quotes a leading European economist as saying that “They [China] are increasingly active in all sectors [of Central Asia] and you just cannot see western capital or Russian capital taking their place.” The same article goes on:
“In Kazakhstan, Chinese companies own somewhere between one-fifth and one-quarter of the country’s oil production – about the same proportion as the national oil company. In Turkmenistan [China accounts] for 61% of exports last year… the Tajik deputy finance minister last year told the FT that Beijing would invest $6bn in Tajikistan over the next three years – a figure equivalent to two thirds of the country’s annual GDP.”
The article then quotes a classical imperialist statement from Liu Yazhou, a general in the People’s Liberation Army, who called central Asia “a rich piece of cake given to today’s Chinese people by heaven.” (Financial Times, 14.10.15.)
Xi Jinping is seeking to create a new economic belt between China and the world via Kazakhstan. The major difficulty presented by central Asia is that it has always been Russia’s sphere of influence, and Putin is intent on re-establishing Russia’s power. This partly explains the deal struck between Russia and China, by which Putin attempted to defeat the sanctions imposed by the West following Russia’s takeover of Crimea.
Russia seems to be ceding economic leadership in the region in exchange for military leadership. It has become an active member of the China-led Shanghai Cooperation Organisation, an Asian “security” association which Putin appears to see as a potential sequel to the Warsaw Pact. Russia’s arms industry and alliance with China would put it in a perfect position to play the leading military role in this new “Eastern Bloc”.
The South China Sea
There is no shortage of combustible material in the region, such as national tensions within and between the nations. Vietnam as well as South Korea and Taiwan are now in a position of balancing between the US and China. Over time, the weight of China in this balancing act will surely only grow.
These political pressures in Asia threaten to destabilise the region. The most dramatic proof of China’s imperial ambitions has been its island building campaign in the South China Sea. This is linked to China’s aggressive “nine-dash line” claim over this sea. This expresses China’s objective to wrest control of the South and East China seas from the US, giving China a powerful world position.
Seventy to eighty percent of China’s vital oil supply is imported through the Straits of Malacca, but the US navy, together with its “colonies” in Southeast Asia, have strategic control here. In a war or other crisis, China could be deprived of oil and access to its export markets in an instant. It is evidently in its strategic interests to find a way around this by building man-made islands it has created on top of tiny rocks and reefs.
This policy, if it is allowed to continue, would annex to China the seas surrounding all the major nations of Southeast Asia. The US Navy is the strongest in the region. But China is provoking the USA, taking more and more sea, or even building new islands. It is testing and probing America’s resolve. America has replied by sailing its navy close to these “islands.” In answer to Washington’s repeated calls to stop building islands (and a new air-force base) in the South China Sea the People’s Liberation Army has commissioned a new logistics vessel, the largest-ever, to supply its troops on the far off islands, rocks and reefs China controls in the disputed waters.
Admiral Scott Swift of the US Navy’s Pacific fleet said China had “the ability” to defend its sovereignty in the area, where it has been building islands and airstrips on contested reefs. Despite this, the Chinese continue to build new islands. And China will put its second space station, Tiangong-2, into orbit in 2016. Apart from its technological significance, this has a military import. All this shows the developing contradiction between China and the USA. It is no accident that Obama recently visited Japan and Vietnam, which China correctly interpreted as a move directed against itself.
Economic power begets political power
Lenin says, “the more capitalism is developed, the more strongly the shortage of raw materials is felt, the more intense the competition, and the hunt for raw materials throughout the world.” Is it not clear that China, having carried out the capitalist restoration, is compelled to pursue its interests on a global scale in its quest for markets and raw materials? And is it not equally clear that this quest is bringing it into conflict, not only with the neighbouring countries (Vietnam, Japan, Taiwan, etc.) but also with the main superpower, the United States?
The Chinese state apparatus is a product of the Chinese Revolution of 1949. This strong, well organised state, independent of imperialist influence, was able to carefully foster and protect a developing capitalist class. Over a few decades, it has presided over the creation of massive monopolies, both state owned and private, and a vast accumulation of capital. All history shows that the accumulation of economic power must express itself at a certain stage in the building of political and military power. At present the key nations in this region – Japan, South Korea, Vietnam, Thailand, Indonesia, Malaysia, Taiwan, the Philippines – are all American allies. The booming Chinese economy has made this region the key to world trade, but the USA controls the area.
China today not only has a powerful industrial base. It also has a powerful army. And what are they doing building islands in the Pacific? They are doing it in order to seize control of a very important sea on which one third of the world’s trade is transported. The Americans are furious about this, they denounce it. Is all this just theatre? The Americans send warships to sail close to these islands “to defend freedom of navigation.” This brings them into a very close confrontation with the Chinese. It probably will not lead to war, but the conflicts are real and very serious.
With the sole exception of Japan, the biggest trade partner for all these countries is China, not the USA. This contradiction will intensify as time goes on, and something will have to give. This process has even been seen as far afield as New Zealand and the UK, traditionally staunch US allies. New Zealand said it would not sign the TPP trade deal if it was designed to contain and isolate China.
The Financial Times (12.10.2015) comments: “While some neighbours will welcome the investment, it is less clear they will want China’s overcapacity. Many have unemployment and underperforming steel mills of their own, or ambitions to develop their own industry rather than import someone else’s.” Frictions have already surfaced over contracts with Sri Lanka, where the new government does not want to honour the deals made by the old.
And it concludes as follows:
Lenin’s theory that imperialism is driven by capitalist surpluses seems to hold true, oddly, in one of the last (ostensibly) Leninist countries in the world. It is no coincidence that the Silk Road strategy coincides with the aftermath of an investment boom that has left vast overcapacity and a need to find new markets abroad.
If the strategists of Capital are able to see that China is a new imperialist power that represents a growing threat to the West, surely Marxists ought to be able to see the same thing? Lenin pointed out that the international balance of forces is constantly changing and spheres of influence are shifting like the tectonic plates that lie beneath the continents. And just as the latter can produce earthquakes, so the jostling between the powers for influence can produce all kinds of crises and conflicts.
In 2000 China had 2.5 million troops to deter potential aggressors. But the history of war teaches us that defence can easily be transformed into offence. China is now the largest contributor of peacekeepers and observers among the permanent members of the UN Security Council. They have sent troops to Liberia, the Congo, Sudan, Haiti and even Lebanon. This is something like a practice run for more serious military interventions on foreign soil at a later date. China has recently passed a law allowing its soldiers to be posted in bases in other countries for the first time.
Xi Jinping has expressed the will to develop maritime capacity to become a true maritime power commensurate with China’s geostrategic standing. He lists the different local conflicts China has had and he refers to China’s slow tactic of small challenges in the Pacific and the region and eventually presenting countries with a fait accompli. He refers to China’s plans to build aircraft carriers, in which it is still far behind American technology, but it shows the direction in which they are going.
The level of military spending can be seen from the fact that for 17 years defence spending in China has increased by about 10 percent annually. China’s growing economic power must at a certain point find its expression in military terms. And we can see from these figures that it is building up its military power. The Centre for Strategic and International Studies in Washington says: “It [China] is using the centrality of its power to persuade other nations that to challenge China on territorial issues is simply not worth it.” This refers to the nations around the Pacific that swing between the US and China depending on the pressure. China is constantly testing the ground to see how far it can push against American power in the region.
The Chinese thrust for expansion in Asia brings it into conflict with Vietnam, Japan and the Philippines. The building of new islands to build bases on is a blatant provocation, not only to these countries but also to the USA. Can it be that China is building these military bases in the interest of US imperialism? Nobody who looks at the real concrete facts of the situation would think so.
Does this mean that there will be a war between America and China? Is it possible that China can take on the might of US imperialism, or perhaps supplant it as the dominant imperialist power in the world? We do not think so. It is clear that China bears all the hallmarks of an imperialist nation. But its rise has definite limits. If the perspective globally was a period of 20 or 30 years of world boom then China could challenge the USA for supremacy on a world scale, but that is not the perspective.
China was growing at a rapid rate, but now that process seems to have reached its limit. Growth is slowing down and the economy could even enter into recession in the coming period. China’s slowdown is in fact threatening to drag the world economy into a depression. It is therefore highly unlikely that on a capitalist basis US imperialism could be supplanted by China. The bourgeois “experts” said similar things about Japan in the past, until Japan entered a period of chronic economic stagnation, which has lasted until the present.
It goes without saying that we must fight against imperialism in all its forms and manifestations. However, there is a danger that by stressing the idea that the main enemy is imperialism, we can end up by capitulating to the national bourgeoisie in each country at a critical moment. Let us take one very clear example.
The Malvinas War was a military adventure launched by the Argentinian Junta to divert the attention of the masses when it was threatened with overthrow. Paradoxically, the Argentinian generals were emboldened by the fact that Lord Carrington (Thatcher’s Foreign Minister) was secretly negotiating the handing over of the disputed islands to Argentina. We should add that up to this moment the Argentine dictators had maintained excellent relations with Thatcher and British imperialism. If Galtieri had been able to wait, he could have got possession of the islands without a struggle. But he could not wait.
The movement of the masses towards revolution compelled him to launch the invasion. Thatcher could not accept the humiliation of a military defeat and sent a task force to reclaim the islands, which they succeeded in doing. What position should the Marxists have taken? The position of the British Marxists was to oppose the war, which we considered a reactionary war on both sides.
The reactionary imperialist nature of Thatcher was very clear, although she tried to hide behind the defence of the islanders against the Argentinian fascist regime (she had not noticed this before!). But on the other side also there was not an atom of progressive content. The reactionary Junta used and abused the anti-imperialist sentiments of the masses in order to sow confusion and divert attention from the crimes of the regime by waving the flag of patriotism, which they temporarily succeeded in doing.
What was the position of those Argentine groups claiming to be Trotskyists? They fell in behind the government and backed its adventure, abandoning any pretence of a revolutionary or class position. One of the leading “Trotskyists” even went to offer his services to the Junta in its so-called war against imperialism. That was a betrayal of the most elementary principles of socialism. And it was justified on the false grounds of a “poor dependent nation” that was allegedly “fighting against imperialism.”
In reality, the Junta had no intention of waging a serious fight against British imperialism, any more than Thatcher was fighting for the rights of the population of the Malvinas. The first act of war against imperialism would be to expropriate the property of the imperialists in Argentina. Without this, the Argentinians were fighting with one hand tied behind their backs. The result was a humiliating defeat, which opened the road to revolution in Argentina.
“The enemy is at home” – that was the slogan of Lenin. He would never dream of emphasising the dependence of Tsarism on foreign imperialism but always insisted that the Russian workers must fight against their own bourgeoisie. When Russia was invaded by Japan in 1904, did Lenin shout: “Down with Japanese imperialism?” Of course, he did not. He used the crisis to call for the overthrow of Russian Tsarism. During the First World War, what was Lenin’s attitude? “The German imperialists are our enemy,” he would say. But our duty is to overthrow our own ruling class. Let the German workers deal with the Kaiser!
In relation to China some put forward the slogan of “Down with imperialism!” But the task of the Chinese workers is to overthrow the Chinese ruling class. The slogan “Down with imperialism” instead invites the Chinese workers to join hands with their own national bourgeoisie to fight against foreign capitalists. This does not make any sense, and if it does, it makes sense in entirely the opposite direction. As for Russia, the slogan “Down with imperialism” is even more misguided. Vladimir Putin would be delighted to take up that very slogan, since he is engaged in a permanent struggle with US imperialism. But that is the fight between one reactionary imperialist gang and another. There is not an atom of progressive content on either side.
As a matter of fact, the problem facing the Russian Marxists is a very difficult one. Politics in Russia at this moment in time is sharply polarized, not on class lines, but on nationalist lines. On the one hand the pro-western bourgeois Liberals support the reactionary Kiev regime against Putin. On the other, many people support Putin against the gangsters and fascists in Kiev.
Who should we support? The problem is that many workers have been deceived by Putin’s anti-imperialist demagogy. Should we therefore join in the general chorus, raising the battle cry: “Down with imperialism”? That would suit Putin very well and would no doubt gain us the applause of the Russian nationalists, Stalinists and other reactionaries. But it would completely liquidate us as a serious Marxist force. Of course, we cannot support the so-called Russian liberal democrats, who in practice defend the interests of US imperialism and international capital. But neither can we support Putin’s Russia, which is neither poor nor dependent, but an imperialist power that is motivated purely by selfish and cynical aims.
The masses in Russia hate imperialism. That hatred has a progressive content, just as the hatred of the Argentinian masses for imperialism has. But just as the Argentine Junta used that hatred for reactionary purposes, so Putin has used it to divert the attention of the workers from their real enemy – the Russian bankers and capitalists. Our slogan in Russia (and in China) is not “Down with imperialism” – a slogan that in these cases is devoid of any real content – but “Down with the oligarchy! All power to the working class!”
Of course, we need to work out appropriate transitional demands, including democratic demands that can help us to reach the workers and youth. But in the final analysis, the only solution is the socialist revolution. Capitalism ceased to be progressive a long time ago. The survival of capitalism is preparing a disaster for humanity and humanity could have progressed far faster. In the last 100 years humanity paid a heavy price: two major world wars, which were over the redivision of power on a global scale. That perspective is no longer on the agenda but there are constant “small wars” in which thousands of people are slaughtered every day.
Five million at least have perished in the Congo alone. Syria has descended into an endless nightmare. Millions of people have been driven from their home and are beating with their bare fists against the walls erected by “civilized” imperialist Europe to keep them out. How right was Lenin when he said that capitalism is horror without end. Capitalism is a system that has reached its limits and needs to be overthrown. The forces of international Marxism must grow and raise themselves to the tasks posed by history.
London, 9 June 2016