[— 67 —]
S E C T I O N
in Today's World
[— 68 —]
[— 69 —]
M O N O P O L Y A N D " C A P I T A L E X P O R T "
Although half a century has gone by since Lenin wrote of "The Parasitism and Decay of Capitalism",1 his words still apply. But today, they operate in a new context: socialism exists on one-third of the earth;* anti-colonial liberation is in world-wide upsurge; and inside the socialist world, an ideological split today mirrors its own colonial and neo-colonial base.
In the pages that follow, modern figures will be applied to some of Lenin's theses on imperialist parasitism. They are generally related only to the U.S., accepting it as the typical top imperialist power of our time.
Lenin cited the system's trend toward monopoly as the general source of parasitism. How was monopoly fared in the world's greatest power?
A quite "respectable" spokesman of a portion of he U.S. Left has noted – as background for a discourse on ethics – that
"only about 35 per cent of the total volume of business in America is individually owned, 92 per cent of our manufacturing (being) done by corporations."2
And what is the condition of those corporations?
Comparing net profits of the 500 largest industrial corporations in the U.S. in 1958 and 1959, the picture that emerges is this:
1958 1959 (in millions of dollars) 9,582 11,9873
Among these 500, the net profits of the 100 largest in those same years were:
* Since these words were first written, the fraction of the earth occupied by real socialism has shrunk considerably, with a consequent effect on the vigor of colonial liberation struggles.
— 70 —
Total corporate profits after taxes for those years (in billions of dollars this time) were:
Fewer and fewer corporations garner more and more of total national profits. Monopoly as a major feature of imperialism is still increasing. So, the general base of parasitism continues to broaden.
Monopoly parasitism finds decisive expression in the economy, Lenin had added, through the growing preponderance of income from capital export over that from trade. In his day, he had documented the truth of this assertion.4 How about today?
One writer has declared:
"For the United States for the present period ... for large corporations the export of capital has not only become extremely important, but decisively MORE important than the export of commodities."5
There is a very sound reasons for such a condition, as an economics teacher in the New York School of Social Research pointed out:
" ... the volume of accumulated capital abroad controlled by United States business has been increasing at a faster rate than exports ... (because) capital ... reproduces itself ... the annual flow of capital invested abroad is therefore additive."6
Documentation of the escalation from year to year of U.S. foreign investment is done by the U.S. publication Survey of Current Business. One of its issues has noted, for instance, that exports of U.S. merchandise excluding military grants-in-aid, with 1957-1959 at 100, in 1964 amounted to $1.7 billion.7 The same source showed a net foreign investment in the same year of $6.3 billion.*8
Interest in cited statistics centers on comparative orders of magnitude, so no attempt has been made to reconcile differing comparisons in their specific amounts.
.The figures do show trends, which is all that is important here.
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These figures represent a trend over time. According to one previously cited author, the years 1950 to 1951 in the U.S. witnessed the following changes:
" ... the dollar value of the gross national product increased 83%, of private consumption 74$, of private domestic investment 39%, of non-military spending by all governments (Local, State and Federal) 141%, of non-military merchandise exports 82%. Meanwhile, military spending increased 244% and the value of U.S. corporate investments abroad 203%."9
Not unexpectedly, the effect at home is the growing influence of profits from overseas economic activity. Before-tax profits on direct foreign investments rose from $1,769 million in 1950 to $3,546 million in 1960, increasing during that decade as a share in profits from all sources from 7.8% to 15.6%.5 By 1965, the comparable figure was $3,610 million, or almost 22% of total.*6
In January 1965, to curb balance-of-payments deficits, the U.S. government instituted a "voluntary" program of "restraining" overseas investment. Result? "Farcical", sneered one "economist and analyst of the imperialist nature of the new economics of capitalism". He backed his sneer:
"during the first year of 'restraint' investment (overseas) jumped to $3.3 billion from $2.4 billion the year before. And 1966 promises to go even higher."10
What, meantime, has been happening to capital export? Consider the following table:
Table 1*12 NET OUTFLOW, U.S. CAPITAL, PRIVATE AND GOVERNMENT (In Millions of Dollars) 1950 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1,421 1,521 3,619 4,133 3,815 2,728 5,079 5,663 5,953 6,527 6,636
* Footnote, Page 70.
— 72 —
In about twenty years following World War II, a the same time that the share of profits on capital exports as a percentage of total were being doubled, the net outflow of U.S. capital more than likely quadrupled.
Statistics, in a word, appear to confirm that "capital export" still plays, today as it did yesterday, a growing role in imperialism's economy.
To let matters rest there, however, would be to oversimplify. For example, the term "capital export" needs not be taken literally in today's international financial maneuverings:
Discussing "Absorption of the Surplus" produced by the workings of the world's most advanced monopoly economy, U.S. imperialism, the late Economics Professor from Stanford University (California) Paul A. Baran and the co-editor of the independent socialist magazine MONTHLY REVIEW in New York Paul M. Sweezy studied "Capitalists' Consumption and Investment", including foreign investments. They make the following points relative to modern monopoly capitalism as exemplified in the U.S.:
1. Capital export as such has dropped in importance in late years:
" ... except possibly for brief periods of abnormally high capital exports from the advanced countries, foreign investment must be looked upon as a method of pumping surplus out of underdeveloped areas, not as a channel through which surplus is directed into them."13
2. Today, the U.s. shows a net inflow of surplus capital of growing size:
"In 1963, United States corporations (nearly all giants) had foreign direct investments amount to $40.6 billion. But a large proportion of this – probably the majority – was acquired without any outflow of capital from the United States ... Even incases where substantial sums of capital were exported, subsequent expansion commonly takes place through plowing back of profits; and the return flow of interest and dividends (not to mention remittances disguised in the form of payment for services and the like) soon repays the original investment many times over – and still continues to¬
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pour capital into the coffers of the parents corporation in the United States. It is not surprising therefore that while capital does flow out of the country every year, the return flow of investment income is invariably much larger."14
The writers supply a table comparing capital export with direct investment income between the years 1950 and 1963 to reinforce their point. It shows that
"during this period American corporations were able to take in as income $12 billion more than they sent out as capital, while at the same time expanding their foreign holdings (through reinvesting profits earned abroad, borrowing from foreign banks and investors, etc.) by $28.8 billion."15
What, then, of Lenin's dictum on the role of "capital export" in aggravating imperialist parasitism?
First, Baran and Sweezy specifically qualify their interest in foreign investment as only concerned with
"an outlet for investment-seeking surplus generated in the corporate sector of the monopoly capitalist economy."13
Lenin, however, had focused on the fact that
"capital exports yield an income . . . "*
His concern was with capital exports' effects in extracting super-profits from the labour of "overseas" subjects, especially in producing non-working sections among the people of the exploiting countries. The export of capital in this sen
c[s]e, Lenin thought,
"puts the seal of parasitism on the whole country that lives by exploiting the labour of several overseas countries and colonies."*
Finally, Lenin cited as consequence that
"the world has become divided into a handful of usurer states and a vast majority of debtor states."**
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In a word, Lenin's emphasis was on parasitism in monopoly economies: it was the income on capital export which made a country parasitic. Baran and Sweezy's findings for the modern monopoly economy corroborate and reinforce Lenin: they find that economy to be attracting such income in ever-growing amounts, regardless of what new forms the influx may assume. They concluded that
"foreign investment, far from being an outlet for domestically generated surplus, is a most efficient device for transferring surplus generated abroad to the investing country."16
So has Lenin's discovery escalated into our time. All forms of imperialist parasitism are ways of exploiting "the day labour of several overseas countries and colonies". The results have made the U.S. today the world's greatest "usurer" nation.
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I N T E R E F F E C T O F M O N O P O L Y
O N I M P E R I A L I S T P A R A S I T I S M
There is more to the growing importance of "overseas" income than is contained in absolute figures of quantitative growth. Qualitative intereffects of still-waxing monopoly on the importance of the overseas portion of metropolitan income imply even greater parasitism.
For instance, one means of pooh-poohing the real value of foreign activities to the home front is to note that total U.S. exports are less than 5%, while foreign investments do not reach 10%, of Gross National Product. How can such small GNP percentages be "decisive" to an economy?
The question contains two false premises: a) that GNP is a "thing in itself" equatable to national economy; and b) that because among total activities in an economy given ones are statistically few, therefore their importance is also small.
a) GNP is undoubtedly a convenience enabling large amounts of finance from different sources to be moved about en bloc statistically. But it can also confuse discussion of economic concepts. Besides actual material values, it includes government expenditures (salaries, personal and professional services, trade, and activities of banks, real estate and insurance outfits. Exports, however, are mainly commodities – real values – from farms, factories and mines; and foreign investments come mainly from huge manufacturing firms.1
b) As to the activities of the monopoly sector in the U.S. economy, percentage is meaningless until related to the size of control. In fact, the controlling power of U.S. monopoly activities make these activities more, rather than less, significant.
The first significance lies in the small number of actual firms involved, as an American monopolist has testified:
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"In the United States today ... 135 corporations own 45 percent of the industrial assets. THESE are the companies to watch. Here lies managerial power."2
Furthermore, increasing monopolization involves far more significant increases than those of size.1 For example:
1. Overseas profits are always under-stated, due to cosseting legislation surrounding them at home. One effect has been that
"...virtually no U.S. income taxes are paid by U.S. corporations on their foreign investment income."3
At the same time, actual profits on corporate foreign investments could be even double those reported, while
"the real value of direct (U.S.) corporate investment overseas may well be on the order not of 19 billion dollars but of 50 billion or more."4
By late 1966, the reported value of direct U.S. foreign investment had increased to that 50 billion estimated in 1956:
"The book value of this investment has increased from $19 billion in 1955 to well over $50 billion today."5
If the $19 billion reported in the earlier year had suggested an actual investment of $50 billion (and assuming that the proportion between the two remained steady over the decade – it is far more likely that it increased), then today's actual direct U.S. foreign investments must be at least $131 billion!
2. All discussions of overseas profits in U.S. government and other similar sources take no account of considerable income from a) exploiting patent and copyright agreements; b) non-commodity-producing industries like investment and commercial banking, stock market speculations, transportation, insurance, etc.; and c) portfolio investments.1
3. It is easy to forget that
"it is MONOPOLISTIC industry which dominates the flow of investments and that such monopolistic businesses characteristically gear their investment policies to the 'sure thing', where good profits and safety of investment are reliably ensured."1
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4. Though commodity exports are decreasing in importance relatve to foreign investments, relative to total commodity production they have surpassed domestic output by much more than has yet been conceded.
For instance, when merchandise exports are compared to total domestic output, there is double counting, in that semi-finished products manufactured domestically are counted domestically and then, shipped to foreign subsidiaries, are counted again the finished foreign product. Furthermore, data of the two categories are not strictly comparable: foreign output is listed as value-of-shipment, while domestic goods appear in a value-added category.1
When all similar discrepancies are weeded out, the result is that merchandise exports come to
"a conservative estimate of approximately two fifths the domestic output of farms, factories and mines."2
Forty percent (measured against "domestic output", to be sure) is eight times the usually-contended five percent which merchandise exports are said to be of GNP.
5. Domestic firms producing merchandise in their own factories abroad enjoy other advantages, such as the ability to mobilize foreign capital for their own operations. Taking all such advantages into account, production resulting from U.S. investment inside foreign countries – 4 1/2 times larger in 1950 than imports into these countries from the U.S. – rose by 1964 to 5 1/2 times larger.1
6. Considering manufacturing industries alone, the following facts on the role of the foreign market emerge:
a) Total export sales rising faster than domestic sales:
"...when the economy as a whole was experiencing a slowing down in the rate of growth, foreign markets were an important source of expansion. For example, in manufacturing industries during the past yen years domestic sales increased by 50%, while foreign sales by United States-owned factories increased over 110%."6
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b) An increasing relative importance for the foreign component in plant and equipment expeditures, which
"for United States subsidiaries abroad were a little over 8% of such expenditures of domestic firms in 1957 (whereas) last year (1965) this had risen to 17%."7
Ever-increasing armaments and military spending to buttress monopoly and safeguard the system have assumed enormous importance among aspects of growing parasitism in today's imperialist world. In the U.S. in 1957, about 50% of the profits of industrial corporations came from foreign investments and armaments, with "the largest contributing factor" (as compared to armaments) being foreign investment.*8
Military expenditures form a larger and larger portion of total foreign invests, as has been documented. Military expenditures, in fact, have the following current features connected with their role in imperialist economies:
1. "National security and business interests' are inseparable:
"... the size of the 'free' world and the degree of its 'securi'ty' define the geographic boundaries where capital is relatively free to invest and trade."9
2. It is misleading to relate military spending to GNP. What is important is the
"underlying strategic relationships that determine the direction and degree of movement of the economic aggregate."10
3. The bases and "far-flung military activities" as well as the multifarious expenditures that follow in their wake bring numerous advantages to the "business community" of metropolitan countries. They a) protect existing and possible raw material sources; b) safeguard foreign investments and markets; c) guard commercial sea and air lanes; d) ensure that U.S. firms get "a competitive edge" in "spheres of influence;"¬
* Actually, such a distinction, if valid then, has long since become meaningless: imperialism requires military expenditures to safeguard foreign investments.
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e) through military and foreign "aid", create new foreign customers and new opportunities for investment overseas; and f) run interference on the world market for America's "junior partners" among the industrialized nations where U.S. capital is becoming an ever-more-important factor.10
4. None of these factors, however, provide a proper understanding of
"the stake business has in the size and nature of military expenditures as a well-spring of new orders and profits."10
5. In this context, the main significance of military expenditures is their "exceptionally large impact on the capital goods industries."10
Some of the reasons:
a) Capital goods industries – especially those producing non-residential goods – are basic to the mechanics of the business cycle: consumer expenditures, which always drop during a crisis, never, like expenditures on investment goods, reach a practical zero.
b) In 1958, "the latest year for which government did a complete input-output analysis for the U.S. economy", of all industries producing non-residential investment goods, only one – farm machinery and equipment – obtained less than 20% of its business from the field of "the combined export and military demand" (the latter represented by U.S. government purchases). Ordnance and aircraft obtained almost all (88.4% and 92.8% respectively) from this source. The general range of such support was from 20-50%.
c) Furthermore, this 20-50% support from military purchases and exports
"probably accounts for the major share of the profit, and in not a few firms, perhaps as much as 80 to 100 per cent"
because of the existence of a break-even point, below which corporations do not meet their costs of productions, but after which profits generally soar.10
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6. Finally, the military goods market a) supplies long-term contracts; such contracts usually b) carry guarantees that minimize and often eliminate any risks in building additional plant and equipment; and c) pay for related research and development activities.10
7. Not only do military expenditures as such make modern imperialist economies more parasitic: they reinforce and augment non-military parasitism.
8. Furthermore, military outlays themselves become increasingly parasitic internally:
" ... there has been a sharp shift in the character of goods and services purchased by military outlays. A much larger proportion goes for research and development, engineering, supervision, and maintenance; a much smaller proportion for the kind of mass-produced military hardware (artillery, tanks, planes, trucks, jeeps, ships) that played the decisive role in two world wars. This ... means that a given amount of military spending employs far fewer persons today than it used to. In these circumstances, even very large increases in military spending, while enormously profitable to the big corporations, may have relatively little effect on investment and employment."11
9. The "arms economy", looked to as "stabiliser" for the capitalist economy, fails expectations for the following reasons:12
a) Arms production "proliferates inexorably through the system", causing a competitive arms race.
b) "Anarchy remains very nearly absolute internationally."
c) The "space race" cannot overcome the defects of the arms race because
"any country opting for high employment and stability through productive investments or even unproductive "hole-filling" public works is bound to suffer in world competition."
d) The system is composed of elements "both interdependent and independent of each other, held together by mutual compulsion", even under an arms economy.
e) The arms economy, once adopted, becomes necessary and permeates the society's entire economic fabric.
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f) It becomes a convenient and effective means for U.S. imperialism in particular, the world's most complete arms economy, to gobble up rivals.
g) It cannot prevent recessions inside the system.
h) Arms spending and the employment it at first induces fall after a time.
ii) Its alleged benefits in technological advance, and the skills associated with it, are not transferrable generally to the civilian economy.
[— 82 —]
M O N O P O L Y ' S P A R A S I T I C
M E T H O D S O F E X P A N S I O N
Lenin had also traced parasitism to the continued swelling of the numbers of "coupon clippers" in metropolitan areas. Dividend payments at least measure the extent of this development as, for instance, in the United States:
Table 21 TRENDS IN U.S. DIVIDEND PAYMENTS* (In Billions of Dollars) 1934 1945 1957 1958 1959 1960 1961 1962 1963 1964 1965 3.8 4.7 12.6 12.4 13.7 14.4 15.0 15.9 15.8 17.2 18.9
Moreover, Lenin also saw parasitism in the fact that imperialism is "an immense accumulation of money capital in a few countries". That his statement is still valid is again illustrated by the American example:
Table 32 AMERICAN CORPORATIONS WORTH ONE BILLION DOLLARS OR MORE ----------------------------------------------------------------------------------- NO. OF SUCH THEIR TOTAL TOTAL, ALL U. S. % TOP CORPORATE YEAR CORPORATIONS CORPORATE ASSETS CORPORATE ASSETS ASSETS TO TOTAL (Billions of Dollars) ----------------------------------------------------------------------------------- 1941 31 66.5 341 19.5 1953 66 174.3 616 28.3 ----------------------------------------------------------------------------------- % INCREASE 106 162 81 -----------------------------------------------------------------------------------
The number of billion-dollar corporations, their total assets, and total U.S. corporate assets all grow. But assets of top¬
* See footnote, Page 70.
— 83 —
corporations increase at double the rate for all.
To show that this "immense accumulation of money capital" is still confined to a few countries,
"The traditional principle (is) that the possibility of (internal accumulation) is a function of the size of income per head in a given economy."3
On this basis, the following are some average per capita incomes:
a) 1840-1850, in U.S., Canada, Britain, France and Germany: $150-$300, with an average growth rate during that decade of 2.5%.
b) 1949 (a century later) in "a number of developing countries:" $25-$50. The U.N. statistics cited in this case offer no growth rate.3
The next table furnishes corroborating evidence:
Table 44 INTERNATIONAL AVERAGE PER CAPITA INCOME -------------------------------------------------------------------------------- 1950 1960 % GROWTH United States $1,000 $2,500 250.0 Asia + Africa'+ Latin America 100 150 50.0 No. time U.S. figure exceeds that of underdeveloped areas 10 17 70.0 --------------------------------------------------------------------------------
These figures gauge the rate at which imperialism continues accumulating money capital.
A more recent study along similar lines shows that advanced capitalist countries, in the 12 years from 1953 through 1964, experienced an average change in the index of their per capita gross domestic product of +44.1 points, whereas "third world" countries increased only 21.7 points in the same interval (at constant prices).5
— 84 —
America's increased economic dependence on foreign investments and attendant military spending, dealt with as an aspect of imperialist parasitism in the previous Chapter, is sometimes challenged – for instance, as has been noted, by declaring that such dependence involves only a small segment of American business. Monopoly makes nonsense of such statements:
"In manufacturing industries, 5 corporations own over 15% of total net capital assets (as of 1962). The 100 largest corporations own 55% of total net capital assets ...
" ... And it is precisely among the giant corporations that we find the main centers of foreign and military economic operations."6
Among the 50 largest U.S. industrial concerns, 37 – heavily involved in international economic and military activities – account for much more than 90% of the top 50's assets.
As for foreign investment itself,
"only 45 firms account for almost three-fifths of all ... 80% of all such investment is held by 163 firms."6
To imagine that such intense concentration is purely a national U.S. phenomenon is to lose sight of parasitism as the binding factor of imperialism's world economy. Precisely the creation of financial-industrial Gargantuas reduces the "few countries" of Lenin's day to a single one: despite challenges from rival powers, the United States since 1945 has, directly or indirectly, thus far been virtually dictating policy even in a large segment of the once-socialist world.
The mechanisms whereby the U.S. financial oligopoly takes over hegemony are not all new. For instance, one of the earliest was found in vast interlocking directorates, a phenomenon already investigated by Lenin. Today their power and extent have enormously escalated under American domination as a result of World War II.
Testimony to their truly international character – in at least one area of the world in our day – has been offered, eloquently but ironically, by an English Social Democratic M.P.:
— 85 —
" ... the huge mineral Empire in Africa, stretching from the copper belt of Zambia to the mineral wealth of Katanga, to the diamonds and railways of Angola, to the diamonds of South-West Africa ... to the gold and diamonds and uranium of the Republic of South Africa ... is literally ... one great monopoly ...
"... the Société Générale de Belgique, a monarch in Belgian finance and industry ... is linked with the Union Minière of Katanga and the British-owned Tanganyika Concessions.
"'Tanks', as the British company is ... called in the City of London, is interlocked with the BEnguela Railway in Angol and the Angola-American Corporation of South Africa.
"The Corporation, in turn, is linked with the British South Africa Company which has just been deprived of its royalties in Zambia, and the De Beers Consolidated Mines of South Africa.
"There are many other shared directorships and investments."7
Another, more modern, device was probed not long ago in TIME magazine, which revealed the following facts:
"Western Europe is gripped by a growing ... fear that it is falling victim to American economic conquest. And that conquest, so the lament goes, is spearheaded by American technology. Armed with technological prowess that European firms cannot match, giant U.S. corporations are winning control over crucial industries."8
So great a fear, in fact, has been generated in Europe about this take-over that
"it was on the agenda of NATO's ministerial meeting last month (December 1966). The Common Market will devote a special session to it in February. British Prime Minister Harold Wilson and former West German Chancellor Ludwig Erhard took it up in their last talks with Lyndon Johnson."8
Furthermore, in "the significant international balance-of-patent payments", the United States has been than "a 5 to 1 margin":
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"At least count, the U.S. paid $45 million a year for European patents, but collected $251 million for U.S. patents."8
As causes of such a potentially "trouble-making" gap, the following factors operate:
1. Europe has plenty of scientific brain-power. But it "flounders" in related uses thereof: a) "translating its laboratory discoveries into sophisticated hardware"; b) "organizing and marketing its achievements".
"... what Europe faces is not a technology gap but a management and money gap."8
2. Europe's outlets are too small: no European country has a market larger than one-sixth that of the U.S. Because Europe's companies are "still chopped up into national units", not even the Common Market can overcome the effects of "disparate systems of laws and taxation".
3. Europe "is too stingy about research and development".
"The U.S. spends about ten times more per capita on R&D and four times as much altoge
r[t]her as Europe ($23.3 billion last year)."8
4. Because of its "vast capital and huge home market", U.S. business is able to risk huge fortunes on lau[n]ching "promising ventures":
"RCA gambled $130 million on color television before it began to pay off."8
But Europe lacks risks capital.
5. Managerial skills are lacking in Europe, according to Italian physicist Massino Bernardini, who said that
"Here we have brilliant individuals and almost never brilliant organizations."8
He blamed the conditions on the European practice of picking top managers and directors "not for ambition, skill or diligence, but for their social qualifications".
6. Snobbery tends to cut out many who could become technicians and inventors: a) traditional contempt for manual¬
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labor left over from feudal Europe; b) a European contempt for engineers, leading to a "brain-drain" in this category from Europe to the U.S.
7. Education is not designed to get the most out of population potentialities in the technological field: in Europe, "first-rate education still reaches only a handful of elite", because a) Europeans "stream" their young from the age of about ten onward; a chosen few continue to "superb" education; the remainder go to work or to trade schools; b) Europe has no way to utilize "second cut" students, nor to give a chance to "slow starters"; c) European professors run academic departments or institutes "with Napoleonic power and life-time tenure".
8. Tariff walls to protect local industry no longer help Europe: American investment in local industry surmounts that hurdle completely. The article thinks Europe should consider erasing its geographical and political boundaries, unifying its currencies, and – in general – getting rid of the "nation-state concept". Short of that,
"the only course for the U.S. seems to be to help narrow the gap in what limited ways it can, but keep up the competitive heat."8
This well-documented survey points up the rapid infiltration of U.S. monopoly into controlling sectors of European economies, and highlights the truth in an observation by a modern authority who says that the
"extension of domestic monopolistic trends ... provide(s) the opportunity to accumulate wealth needed for extensive foreign investment as well as the impetus for such investment."9
The overall result has been
"the transformation of many of the giants of United States business into a new form of multinational organization."10
One such U.S. concern boasted of its macromania in an official organ of the huge American construction monopolies:
— 88 —
Caterpillar is recognized as one of the leading equipment manufacturers of the world. It has manufacturing plants in 10 countries – including plants of affiliates in India and Japan – and two additional plants are currently under construction. It works with 260 independent dealerships which, in turn, operate 816 sales and service outlets. And these are backed up with nine parts warehouses and 14 depots scattered around the globe. Last year, Caterpillar sales totaled $1.5 billion of which $628 million came from sales to customers outside the United States."11
Of course, such a development has its dangers as well:
"The technology gap has become a sensitive issue in world politics, with anti-American overtones."8
The effect of parasitism, then, has been to "internationalize" imperialism's economic base, creating a world bourgeoisie, a world economy, and a world proletariat – all, at the same time, rent by inner contradictions.*
For quite a period, such internationalization proceeded blindly. When Marx was writing, Britain had become – through the working out of inexorable economics laws – the richest, most developed of capitalist countries in a system then in its competitive heyday. Its bourgeoisie could make expert use of national jingoism as it began its penetration of others' "spheres of influence".12 That is why England was the model on which Marx based in Capital.
Today, however, on "its" two-thirds of the globe, imperialism's habit of ignoring national boundaries throughout its increasingly integrated (albeit increasingly conflict-ridden) economy is well advanced. International monopolies, more and more often merged with governments (Yet formally "outside and above" them), move heaven and earth by guile and by force to win world supremacy. In this phase of capitalism – its monopoly¬
* See quotation from Pierre Jalée, Chapter V, P. 42, text. An internationalized bourgeoisie, incidentally, could be expected to super-exploit colonial subjects on a non-boundary basis, and to treat its own international economy (the West) more and more as its integral playground.
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or imperialist stage – the United States has attained the same comparative position as England in the 19th century12, heading the pack – more rapacious, more "powerful," more riddled with inner stresses, and more moribund than any of its rivals.
From the bourgeois world's first "champion of liberty", Uncle Sam has metamorphosed into a monied monster: the napalm nightmare is the direct descendant of the "democratic" dream.
[— 90 —]
M E C H A N I S M S O F M O N O P O L I S T H E G E M O N Y
Today, then "internationalization" of imperialism boils down to the leading role of American monopoly finance capital. In such hegemony, the question of control is crucial.
For example, "direct investments" as defined by the U.S. Department of Commerce, are "branch establishments in which United States firms own 25% or more of voting stock".1
Control itself is exercised by the pattern of investments, a fact most aptly illustrated by "economic relations with the underdeveloped countries", where
"In Latin America, Asia and Africa, the majority of the investment is the extractive industries."2
However, other aspects of the pattern of investments are also revealing. In the previous Chapter, American monopoly use of patents and licenses was scrutinized in detail. Yet, when it is asked, "How far has the take-over progressed?" the answer seems a bit confusing:
By the end of this year, direct U.S. business investment in European companies will amount to about $20 billion, which falls a long way short of hegemony. In no European country do U.S.-owned firms account for more than about 5% of total business."3
But if less than the 20th part of European business is in U.S. hands, why all the fuss?
"What upsets Europeans is that the American activity is concentrated in a few high-technology industries which powerfully shape today's economic life (such as oil, autos, chemicals) or promise to remold tomorrow's global environments (aerospace, electronics, computers). The oil industry is 40% U.S.-owned in Britain and Germany. U.S.-owned or controlled account for a third of European auto¬
— 91 —
sales, 35% of the British tire market, 40% of France's tractors and farm machines, 75% of its electrical and statistical machines, 90% of its synthetic rubber."3
This pattern ensures the ability to control additionally:
1. Sources of raw materials for industries like steel, aluminum and especially oil:
"The oil industry has from its outset been dominated by the most powerful banking interests, the Rockefellers, Morgans, Rothschilds, because of the spiraling profits it provides. Today, even with the larger royalties the oil combines have been obliged to pay producing countries, their profits are still mounting prodigiously.
"Oil trust reserves run into billions. Much has been used in investments abroad, American far and away exceeding all others."4
2. Through such control,
"... these foreign supplies are not merely an avenue of great profits, but are the insurance policy on the monopolistic position at home."4
5. By ensuring metropolitan control in such a manner, monopolies effectively eliminate competition, especially but not solely among emerging nations.
6. Overseas economic activities, with the spreading controls they evoke, further increase the power of the few metropolitan monopolies by
a) Their involvement in foreign aid: it engenders among the recipients ever-growing debts which flow through international financial centers owned or controlled by "foreign investors, their business associates, and their government agencies".
b) Financial tribute in the form of expatriated profits:
"In the underdeveloped regions almost three times as much money was taken out as was put in ... besides ... investors were able to increase the value of assets owned in these regions manifold ...
— 92 —
"In Latin America, Asia and Africa, between 1950 and 1965, U.S. businesses owned investments that rose from $5.8 billion to $15.0 billion."5
c) International control of financial resources:
"For practical purposes, some of the key European countries are financial servants of the dominant (American) banking monopolistic groups, the Morgans and the Rockefellers... Belgium... a financial colony of American investment capital... American financial capital, of course, had a field day in Germany during the post-war occupation... Italian banks ... Japan, Canada, Australia and New Zealand ... financial dependence upon America ... Europe's subservience to American financial monopoly, a monopoly expressed in the strategic and political alliances that bind European capitalism to American capitalism."6
Control of raw materials sources has become so crucial to the continued existence of imperialism that the subject invariably evokes controversy. For example, one theory subscribed to in some Left circles holds that the modern era has created synthetic substitutes for so many primary materials that the big powers no longer depend so greatly on imports to sustain their industries.
Strangely enough, such a hypothesis is indispensable to the
w[v]iew of "under-development" of those espousing it.
Consider for instance an analysis of under-development which appeared in an Accra newspaper during the Nkrumah regime:
"The principal purveyors of raw materials are the economically under-developed nations. Most of them have won political independence, but remain part of the capitalist economic system."7
Nothing apparently controversial here!
However, the article goes on to note that
"the position in most (newly-independent nations) is characterized by limited natural resources, exploited moreover by foreign monopoly concerns, a one-sided economic structure and woefully low living standards."7
Whether natural resources in such places are really limited or not geophysical surveys on the spot have begun to call into¬
— 93 —
questions. But far more important: is exploitation by foreign monopolies just one in a series of characteristics of such areas; or are the "one-sided economic structure" and "woefully low living standards" casually related to it?
On the foregoing base, the following additional points build up a picture of "under-developed" nations as equal partners (albeit poor cousins) in the imperialist system:
1. Over-production of raw materials:
"For several years now there has been an over-production of raw materials. Since 1956, prices have fallen steadily or have remained at a very low level."7
2. 1963 witnessed an alleged economic decline in Western Europe and Japan ("the principal buyers of raw materials and food-stuffs").
3. A raw materials crisis has caused emerging countries an alleged chronic trade crisis and foreign exchange shortages, forcing them to restrict imports of essential goods.
4. Nevertheless, in 1963 "for the first time in seven years", raw material and food prices went up six per cent in the first half of the year. This had the effect of giving these countries "more foreign exchange revenue and a somewhat better foreign trade outlook. It can safely be said that the raw materials crisis has passed its lowest point."
5. "But will this lead to a fundamental improvement for developing countries?"
6. "...the problems facing the under-developed nations are so complex and formidable that last year's greatest influx of foreign exchange cannot seriously improve their position."
First, "complex and formidable" in what way? Second, WHY can no improvement be expected from this "greater influx of foreign exchange" in emerging nations? Third, what about monopoly price-fixing (often with political motivation) as the source of falling prices or of "over-production"? Why was imperialist control of world markets not mentioned nor related to the economic decline among the "principal buyers of raw materials" as cause of the "raw materials crisis"?
Item by item, this discussion of "under-development", typical¬
— 94 —
of revisionist left circles, simply ignores imperialist parasitism.
Yet the fact is that imperialist dependence on colonial raw materials has been growing – and documented: while improved technology in the West has reduced raw materials consumption per unit manufactured, the system as a whole has greatly stepped up its total consumption of these very imports.8
This is true especially for mineral products, which are closely related to modern heavy industry in "the six major imperialist ... powers – the United States, Britain, France, West Germany, Italy, and Japan".8 In the nine years between 1953 and 1962, their consumption of aluminum rose 73%; copper, 48%; zing, 35%; lead, 26%; and tin, 23%. In only five years, 1957-1962, petroleum consumption in the same countries increased by 34%.8
Moreover, such increases occurred amidst augmented annual output "at home" of these same products. E.g., U.S. oil production internally between 1940 and 1962 rose from 1,355 million barrels to 2,676 million; while, from exporting 8 million barrels in 1940, the U.S. position changed by 1962 to one whereby she had to import 409 million. For iron ore: the U.S. supplied 97% of its own needs in 1940; but only 68% in 1962. The story for other powers is similar.
A U.S. government Commission in 1952 issued a report which dramatically confirmed this greater dependence by advanced industrial countries on outside sources for raw materials:
"... at the turn of the century, the U.S. produced on the whole some 15 percent more of these raw materials ("other than food and gold") than was domestically consumed; this surplus had by 1950 turned into a deficit, with U.S. industry consuming 10 percent more than domestic production; extending the trend to 1975 showed that by then the overall deficit of raw materials for industry will be about 20 percent."9
And where did their imports come from? In 1962 alone, these same six key powers bought more than 240 million tons of petroleum from Asia, Africa and Latin America. In that year, the United States alone "raked in profits of $1,477 million from oil investments" in those continents.
— 95 —
With imperialism, then, depending not less but more than ever on imported raw materials, underlining its continuing need for colonialism, the intensest rivalries arise within the system. These do not, however, always prevent the rivals from reaching "friendly agreement" as part of their struggles for control.
One eminent authority noted how such agreements operate:
"American and European companies connected with world's most powerful banking and financial institutions are .. entering upon major projects designed to exploit new sources of primary products ... In the main ...confining themselves to the production of materials in their basic or secondary stages."10
Here is one good reason why Africa and other colonial areas failed to develop industrially: raw materials they should have been able to use for such a purpose were constantly being exported to metropolitan centers, a trend which
"has gained tremendous momentum in recent years, following the invention and introduction of new processes and techniques that have quickened the output of both ferrous and non-ferrous metal industries in Europe and America."10
"Before the last war most of the Western world's iron and steel output was based upon local raw materials. The post-war years, particularly since 1956, have seen an opposite trend. Something like a quarter of the raw materials (90 million tons out of 400 million) used in the world's metallurgical industries have been imported."11
While methods of control create an international bourgeoisie through ensuring the hegemony of one of its sections, hegemony in turns rends the unity by intensifying inner contradictions. An example is the European Common Market. A great deal has been written about it in Marxist publications proving that, while several national capitalisms do come together, they only appear to coalesce: inner rivalries among them become aggravated in "association" with one another.
— 96 —
Former Ghana President Kwame Nkrumah called the Common Market "collective imperialism" and described it as
"the dumping ground of international investment dominated by the giant American banking concerns and their British satellites."12
Finally, a lucid and rather simple corollary follows on the "complex and formidable problems of under-developed nations":
"As a matter of fact, the Asian, Africa and Latin American countries are capable of building up their own industries by relying on their industrious people and their rich resources. On the other hand, the imperialist countries will find it impossible to get on without the raw materials from Asia, Africa and Latin America."13
The very development of technology inside imperialist citadels has broken down such remaining self-sufficiency as they once could boast, and has hastened internationalization (while at the same time, as stated before in these pages many times, intensifying internal conflict).
In a word, in this epoch, the imperialist ruling class has escalated, along with its system, into a more-and-more international phenomenon through the development of huge, world-wide, boundary-scorning consortia which tend to control natural resources, world finance, the supply of labor power, etc.
At the same time, this very internationalization intensifies inner rivalries among national centers through the imperialist world. And, while increasing internationalization prepares the economic groundwork for world socialism. increasing inner contradictions perform the same service in another way: by objectively weakening the whole system.
[— 97 —]
I M P E R I A L I S T P A R A S I T I S M A N D
E C O N O M I C A N A L Y S E S O N T H E L E F T
By now, it should be plain how well Lenin's summary of imperialist parasitism* has held up over the years.
"a world system of colonial oppression and of the financial strangulation of the overwhelming majority of the population of the world by a handful of 'advanced' countries."*
Today, it still finds underlying economic sustenance from modern forms of activities replacing "capital export", expressed in "overseas" financial activities, chief of which is "unequal exchange", emanating from metropolitan centers, yielding, in the form of enormous super-profits, an income still superior to that from trade.
Despite the clarity and unequivocal nature of Lenin's ideas, many Marxists have consistently fallen short of understanding the imperialist economy. Forgetting parasitism, they insist to the present on dissecting the "advanced" or Western portion alone**
A classic example, reprinted in Accra,1 offered a study of "the chief characteristics of the process of leap-like cycles: boom-crisis-recovery" by which "the capitalist economy develops". Covering the year 1963, it reached the conclusion that
"... no capitalist country has regained the high rate (of development) of previous years.
"An analysis of general trends suggests that this year, 1964, will bring further deceleration."
* Quoted in toto on Pages 27, 28 and 29, text, above.
** For a refreshing exception, see Professor Andre Gunder Frank, "The Development of Underdevelopment", MONTHLY REVIEW, September 1966.
— 98 —
Far from proving this point, the article really, if backhandedly, showed imperialist economies to develop. It "merely" missed the reason why.
It revealed: capitalism's "leap-like cycles" going merrily onward, even if their rate may be uneven in time and place; in imperialist nations in 1963: (a) consumer demand increasingly (meaning, that Western workers had more money to spend on goods than in 1962, though not as much more as in 1962 over 1961); (b) government investment increased; (c) low levels of private investment were not due to lack of funds, because profits were higher than ever; (d) any sags in the economy were bolstered by: producing more cars, expanding credit buying, and increasing state military spending; (e) these increases took place despite four million chronically unemployed and $30-40 million worth of idle plant capacity; (f) exports increased, offsetting lags in engineering, ship-building and steel, with a further increase predicted for 1964; and (g) a tax cut went into effect, though naturally its main benefit went to corporations.*
"Increased consumer demand was "explained" by saying (a) that the rate of increase was less in 1963 than in 1962; and that consumer demand "can hardly be expected" to ris again; (b) "consumer spending continued to grow both in 1962 and 1963, the result of certain rises in wages won by dint of hard struggle". (Undoubtedly wage struggles were a factor; but not all wage struggles result in wage rises, as any worker knows. What was missing: documentation!**)
From such partial analyses, predictions fall flat, like the perennial prognostication of capitalism's "imminent collapse" which has been emanating from the U.S. Left since the 30s.
Socialist publications like MONTHLY REVIEW still risk specific predictions:
"... not that the war in Southeast Asia will soon end but that its continued escalation is surely leading American¬
* Such measures are perhaps becoming harder to institute; but not, while colonial labour power reservoirs remain, impossible.
** See Chapter XXI, Pages 177 ff., below.
— 99 —
capitalism into a period of frightful crises and catastrophes..."2
Obviously, any system rent by enormous and insoluble contradictions must collapse eventually; this is not questioned. The Vietnamese example, furthermore, undoubtedly brings such an eventuality closer. But what will happen when such "frightful crises and catastrophes" strike? It is important to know because that period is actually under way as these words are written: France is convulsed; new violence is spreading through the U.S., England, Spain, Italy Germany – throughout the capitalist world. Is the system, at least, about to collapse?
Marxists in many places are implying – and saying – as much. But facts in these pages suggest a possibly different outcome: stepped-up super-exploitation of subjugated peoples – that built-in mechanism by which the system, as in Lenin's day, is able to weather even "frightful crises and catastrophes". This ability is reinforced by the ideological vacuum in Western proletarian politics. And military coups in Africa, Indonesia and elsewhere, were preparing precisely against anticipated "frightful crises and catastrophes".
Unless there is a noticeable change in the parasitic aspect of Western life, what may be expected is for "upheavals" to continue, followed by noticeable deterioration in the conditions of the "overseas" population. The French example shows that the false Left is entrenched and well able to ensure that "its" clients are not made to bear the brunt of a deteriorating system – as yet.
For that reason, the collapse of the system need not, unfortunately, be expected at this time.
Facts in this text witness the continued well-being of millions and millions of real human beings living in the capitalist economy.* Pretending facts are anything but what they are does not solve a situation in the least. In particular, equating exploitation with poverty constitutes only a partial explanation; and, in this case, part of something is worse than nothing.
* See especially Section C of this text on the labor aristocracy.
— 100 —
Of course, those who keep predicting imminent collapse maintain that they are basing themselves on Lenin. For example, dealing with "the ideological currents of revisionism", one such forecaster had in April 1908 included under "political economy" its theories about crises and about cartels and trusts: that "crises" had now become rarer and of less force", and that cartels and trusts would "probably enable capitalism to do away with them altogether" by "organizing" production internationally.
With scorn, Lenin replied:
"The forms, the sequence, the picture of the particular crises changed, but crises remain an inevitable component of the capitalist system. While uniting production, the cartels and trusts at the same time ... aggravated the anarchy of production, the insecurity of existence of the proletariat and the oppression of capital, thus intensifying class antagonisms to an unprecedented degree. That capitalism is moving toward collapse ... has been made very clear, and on a very large scale, precisely by the new giant trusts."3
But the Lenin who spoke these words also wrote at length about parasitism. That is the context in which his above remarks are to be viewed, and always with the facts of each epoch clearly before the mind's eye.
Lenin always spoke of capitalism as an international system,* and others have since described it as a hierarchy with one or a few metropoles at its peak, unable to exist without colonies in turn completely dependent on the center. In between are "various and varying degrees of superordination".4
Karl Marx, too, had been aware of this condition, as witness has picture of the world division of labor between industrialized centers and agricultural hinterlands, and of colonial robbery as the source of primitive accumulation.
But Marx did not live to finish his own work. And, according to some authorities, in what he had set down until his death he did not stress colonial robbery sufficiently. This allegation gave rise to¬
* See first quotation in this Chapter, requoted from Pages 27, 28 and 29, Chapter III.
— 101 —
"what appears to be a widespread impression that Marx considered the international character of the capitalist system to be of secondary significance. This could not be said of Lenin, of course."4
Nonetheless, when Lenin was writing and
"even today, there are many Marxists who seem to think of capitalism as merely a collection of national capitalisms instead of seeing that the international character of imperialism has always had a decisive effect on the nature and functioning of the national units which compose it."4
In the previous pages, we have attempted to counter the former views by showing that, as long as the internal workings of the industrialized portions of imperialism are studied in isolation; as long as "under-developed" nations are treated as independent "poor cousins" of the same sort; as long as figures do not show how metropolitan economic success continues at the expense of "the world's under-developed", just so long will Western prosperity appear as a "virtue" of international imperialism instead of its main "vice"; just so long will Social Democracy be able to "take credit" for the phenomenon; and just so long will the Left continue to "talk it away" with false predictions and unintelligible editorial comment attached to "analyses".
Articles like the one we have analyzed above1 support Social Democratic and bourgeois economists' boasts about "their" system. Such thinking explains why Marxists so far have been unable to develop among the Western masses any countervailing ideology.
Just how big is the value of all the resources drained from subjugated soils? How much super-profit is wrung from Asian, African and Latin American sweat, blood and tears? What is the overall size of metropolitan monopoly returns on its modern financial activities "abroad"? What role, these days, does "foreign aid" play in bolstering super-profits? How much wages are not paid because of super-exploitation? How can world prosperity be achieved without super-exploitation?
These and similar questions, answered by Marxists, would fully expose before all peoples not only how parasitic the system¬
— 102 —
is, but how that parasitism works; and what, therefore, can be done to end a system that parasitism sustains.
In such answers, Western workers would have available a comprehensible key to the way out of their coming predicament. Meanwhile, they will continue to follow "their" ruling class and its agents – and colonial misery will continue to deepen.
The political significance of a documented approach is this: that, in the absence of documentation a large segment of the Left can "write off" colonial liberation as "national bourgeois revolution", of little account to the world revolutionary movement. For that reasons, such a segment of the Left can continue to insist that "leadership" for the world revolution is to come from "the working class in the main capitalist countries". Social Democrats have been saying that since 1914 and before.
Naturally, today's events are evoking new suggestions of possible "U.S. financial failure" in the foreseeable future. But before these are accepted, it is instructive to glance, for instance at the relation between U.S. short-term obligations to foreigners, its gold reserve, and its longer-term foreign investment. Only quite recently, the picture that emerged was presented thus:
"Here are the latest figures as reported in the SURVEY OF CURRENT BUSINESS of September 1966 (Table 14, p. 40). They relate to 1965. 'Short-term assets and U.S. Government obligations' held by foreigners (... dollar holdings) amounted to $32.5 billion. At the same time the United States gold stock was $13,8 billion, or only 42 percent of dollar claims which could be presented for payment on short notice. It is this gap which is usually pointed to with alarm by those who fear for the safety of the dollar.
"However, the picture looks rather different if we add that United states long-term private foreign investments amounted to $70.8 billion and United States government credits and claims on foreigners to $25.1 billion. If we add up the assets (gold + private long-term investments + government credits and claims = $109.7 billion) and subtract the short-term liabilities ($32.5 billion), we see that the United States 'bank' had a safety margin of $77.2 billion, which amounts to no less than 238 percent of the foreign dollar holdings."5
— 103 —
This "safety margin" – the "flower" of the system's parasitism and its conditional insurance of continued life despite History's death sentence – is hardly ever mentioned on the Left, although it is a "magic cushion" which protects a tottering economy on the buoyancy of the colonial misery. Here in brutal nakedness is the source of the "recovery" aspect of imperialism's "leap-like cycles".1
To Lenin's statement that crises can never be eliminated under capitalism, we can add that the same is true of imperialism. Metropoles are seen to suffer more and more frequent "recessions", but those who watch such areas of the imperialist economy alone miss the fact that systematic crises are absorbed internationally through constantly deteriorating conditions in the "hinterlands".* Imperialism can hold out exactly as long as it has "under-developed" peoples to super-exploit, whatever the form of that activity in our epoch or in the future.
* This statement is not denying subsidiary factors and/or methods which may be, and have been, used to stimulate "recovery". I do, however, believe that any or all of them are traceable (given the facts) directly or indirectly to primary [primarily? —Transcriber] super-exploitation.
[— 104 —]
C L A S S C O L L A B O R A T I O N A N D F A S C I S M
The post-World War II absorption of economic shock by the hinterlands has perhaps been obscured by the role of Fascism in the 30s as the first ruling class "solution" to the general crisis of its system.
In that development, the inner content of class collaboration between the imperialist bourgeoisie and "its" labor aristocracy represented by Social Democracy became clear: when Social Democracy helped Fascism to power, the resulting unholy wedlock concentratedly expressed the growing supremacy of parasitism as the engine of a rotting world economic system.
That engine exploded noisily in the faces of its makers, forcing into being the broad if temporary World War II United Front led by the bourgeoisies of the "great democracies" under American domination. Only in such a way were its creators finally able to achieve Fascism's complete military defeat in 1945.
What, however, has become of Fascism since that time?
As defined by Georgi Dimitroff at the Sixth World Congress of the Comintern in 1928, Fascism is the
"open terrorist dictatorship of the most rabid, most chauvinist and most imperialist sections of finance capital."1
Dimitroff had been concerned with national finance capitalisms and their national dictatorships. Italy, Germany, Austria and others had provided horrible living examples.
Today, however, his definition might suggest that Fascism is not in power anywhere in the West. Nowhere, there, are visible anything like its Nazi and Italian forms, its scope, nor any like intensity.
How Fascism, then, become "more acceptable"? Or has it ceased to exist? If not, where and what is it?
— 105 —
During the days when the Allies' 1945 military victory was still in the future, it was not at all clear where the coming victory would lead. Today, however, many trends of that time take on new meaning once imperialism is viewed internationally:
Inside the U.S., until campaigning for the 1964 elections began, there had for a fairly long period been no necessity to police the people because the majority had usually more or less policed themselves. The Pentagon-White House dictatorship had found that it could achieve "satisfactory" results merely by intimidating the small revolutionary sector of the American community, and its periphery.
During the 1964 election campaign itself, however, a tocsin cry from the Left had hysterically prophesied that, in the outlandish figure of Barry Morris Goldwater, an imminent danger of Fascist take-over was threatening internally. His antics, perfect counterpoint to such ululations, had decoyed one of the largest mass votes in American history into the lap of the reigning elite so ably represented by Lyndon Baines Johnson of racist Texas. In 1968, the "left" refrained from such discredited tactics. Richard Nixon was "elected".
Was the U.S. Left in 1964 or 1968 correct? Do elections really relate to the danger of Fascism inside the U.S.? Only in parts of the South, like Mississippi, does there appear to be open, recogniz
Although the usual rabid reactionaries in Congress have been periodically sniffing at the anti-Vietwar movement and at anti-draft and Black Power exponents, their internal assault on "democracy" has not yet attained Nazist proportions.* More and more frequently, their victims are "expendable" minority blacks and a few white "recalcitrants".
But Vietnamese resistance continued to snowball up to 1968. In its wake, anti-Establishment activities inside the U.S. also mounted. In the stunned aftermath of the 1968 Tet offensive U.S. top brass began intensive preparations for open terrorist methods "at home". But international Social Democracy succeeded in forcing the Paris "talks". The end result is yet to come.
* Chicago in August 1968 may be the start of a contrary development.
— 106 —
Outside the U.S., from 1945 till now, Fascist dictatorship has clearly been operating on the modern scene: in Spain, in Portugal, in South Korea, South Vietnam, Indonesia, Congo Kinshasa, Brazil...
But can any of these dictatorships truly be described as Mississippi Fascism, Portuguese Fascism, Korean, Vietnamese, Congolese, Indonesian, Brazilian? Only in a limited and formal sense.
Surely, it is obvious wherever American finance capital has swallowed colonial "bracers" – territorial or economic – that, even though local puppets make the motions, dictatorship itself is exercised under guidance from Washington by an international ruling class. American – representing world – capitalism's "open terroristic dictatorship" has escalated from Wall Street into colonial hinterlands. There was more than a grain of truth to Ghana's ex-President Kwame Nkrumah's epithet, "Fascist imperialism", used in the Fall of 1964 to describe the most important section of world finance capital.2 In highlights the historic connection between Fascism and colonialism.
Early manifestations of that connection became visible through terrorism in the West:
When Marxists in 1935 had said – as had Lenin in 1916 – that Social Democracy was "the principal bulwark of the bourgeoisie"1 they were not echoing enough of Lenin's thought. By overlooking the decisive nature of imperialist parasitism, they missed the main purpose for which Social Democracy practises class collaboration: if it does act to prevent revolution "at home", that is a by-product of its real function of maintaining the flow of super-profits. These must derive first and foremost from colonies; but, failing that, from whatever source is available.
Because through the 30s metropolitan workers had become temporarily militant under the impact of the great depression, Social Democracy appealed to them from behind a Marxian facade. But that facade became dangerous in countries, like Germany and Italy, which had happened to be deprived of colonies; workers there began taking Marx seriously. In those¬
— 107 —
places, super-profits from the usual sources to keep the ruling classes in power had been cut off; now they had to come from a substantial section of the internal working class. When those workers understandably showed reluctance, social Democracy quite logically gunned them down; quite logically, it aided Fascism to power.
The simultaneous use of Marxian demagogy in victor nations and of brutality in the vanquished is not at all inconsistent or mutually exclusive: if revolution threatens "at home", or if a country has no colonial subjects whose labour power, super-exploited, can cushion the metropolis from economic shock, then Social Democracy has no choice but to turn its cannibalism, the "labour" parasitism of imperialism, inward.*
As soon as renewed super-profits from these activities, or from creating new political and/or economic colonies, enable the bourgeoisie through Social Democracy to buy off enough of the local proletariat, it is no longer urgent – in fact, downright embarrassing – to mention Karl Marx again "at home". So, in 1959, a number of European members of the Second International, including West Germany, deliberately eliminated all references to the author of The Communist Manifesto from their constitutions and other literature, and removed from their programs any mention of socialism. European Social Democracy could now re-emerge into "harmonious" class collaboration: West German "labour lieutenants" soon began to mingle at managerial levels with the "captains" of industry, advising or forcing their own members into concessions on elementary trade union conditions.3 They do so, of course, "in labour's interests".
Today, the connection between Fascism and colonialism is more concealed, because imperialism has learned to protect its own rear: even Germany and Japan, the defeated enemy of the two short decades ago, are being permitted sub-rosa but substantial access to colonial outlets for their surplus investment capital.**
— 108 —
But the connection, nonetheless, remains – and tightens. Imperialism must deal with any upheavals, "at home" or "abroad", if it can. And so far, in one way or another, all major powers have been able to renew and/or retain that stream of super-profits on which their system depends: they will completely control the world market – and prices. In turn, they have been able to continue to "their own" workers their "rewards" which put off the need to turn inward their "open terrorist dictatorship" as used in the 30s.
Social Democratic use of brutality as class collaboration is accepted by "its own" workers to prevent revolution only when that revolution is colonial. This is proven by the record of social Democratic governments in office.* And as long as there are SUCH revolutions to prevent, Social Democracy had, and has, no worries about any "at home". For at least that long, the labor aristocracy continues its time-honoured support for "liberal" candidates who can carry on colonialist or neo-colonialist policies with a smile behind the whip.
At this point, the tie between colonialism and Social Democracy comes into play, revealing parasitism as currently the decisive factor within the imperialist system:
The fact that so many colonial or semi-colonial peoples after World War II had begun trying to opt out as sources of super-profits constituted the latest and by far most serious threat to continued operation of the whole imperialist system. The specific example of Vietnam reveals the frenzy with which U.S. "Fascist imperialism" therefore defends its life. (It also, of course, shows the growing strength of popular forces.)
Because the mounting struggle for colonial liberation has thus become the focal point of world struggle, NEW forms of Social Democracy has to be found. Now it must act in colonies, but remain based on the metropolis. The "solution" was simple, and best expressed in this: Marxist verbiage, now de trop "at home", was packed up and moved¬
— 109 —
Social Democracy busily launched various "national socialisms" for colonial consumption. In so doing, it was merely trying to herd colonial peoples into its own services.*
But, because material conditions in colonial territories provide no mass base for such "local socialisms",** Arab, Asian, African and other such types were soon to splinter even further into Malaysian, Malagasy, Neo-Destourian and others.
Yet, they are not to be lightly laughed off: their effect on liberation movements in such places has been serious. European Social Democracy has achieved historically transient successes – at least a pause, a momentary change in direction, even political chaos for a time – in Asia, the Arab world, Africa and so on. And these continue to crop up.
Maybe some defeats are inevitable. But surely – not all!
Accompanying Social Democracy's shift of Marxist demagogy into subjugated areas, anti-communism became more and more prominent in the West, invariably in association with colossal military build-ups traceable to "capitalist hostility to the existence of rival world socialist system":
"Capitalist governments do not, in general, trade with each other. Most trade in the capitalist world is carried on by private enterprises, mainly by large corporations. What these corporations are interested in is not trade as such but profits: the reason they and the government they control are opposed to the spread of socialism is not that it necessarily reduces their chances of importing or¬
* Here is why today the only mass manifestations of Social Democracy pr se occur in industrialized areas where colonial subjects are still far away (e.g. Sweden): Marxian verbiage in Social Democratic hands "at home" might be dangerous, even in trying to delude the "unruly". To deal with them, imperialism uses other demagogues.
** All "local socialisms" will be shown to be exported European Social Democracy. Naturally, in order to be introduced at all, even exported European Social Democracy must – and does – find local exponents. Who these are and what their identity means will be explained in Chapters XVI and XVII on "Imperialist Bribery".
— 110 —
exporting (though of course it may), but that it does necessarily reduce their opportunities to profit from doing business with and in the newly socialized area."3
The fear of real communism today, though concentrated on colonial areas because of their prospective loss since World War II, is still expressed in the West by stark naked anti-Communism.
Thus, Social Democracy's transfer of its revolutionary jargon to colonial places and its anti-communism "at home" must be seen as expressions of a single process to which there are two faces.*
By participating in that process, Social Democracy once again uncovers its own continued link with modern Fascism of which the hallmark is always anti-communism.
Time has altered the form, but not the content, of the historical inter-relations between Fascism and colonialism, Social Democracy and colonialism; and, thus, between Fascism and Social Democracy today.
* A more detailed discussion of anti-communism as related to Racism and Social Democracy is found in Chapter XXXVIII, below.