A quick tour of my book shelves produces many books and articles that promise a new look, a re-thinking, a fresh approach, a reconstruction, or an updating of Marxism. If I had the time or the patience, I would expose the short-sightedness, naiveté or sheer humbuggery that lurks behind most of these misbegotten projects. It is not that Marxism is scripture or that there are no new aspects or perspectives on Marxism; there are indeed many yet-to-be-revealed wrinkles and old, mistaken or inapplicable perspectives. But the core of the theory developed and elaborated by Marx, Engels, and Lenin has resilience and usefulness that defies the hubris of academically trained “specialists” impressed by the latest bourgeois school and its analytical tools or seduced by a passing “trend” identified by the business press or the media pundits.
We have seen them come and we have seen them go, with embarrassing regularity.
Think of the celebrations around the arrival of a book by Laclau and Mouffe. Or recall the heralding, not so long ago, of the Hardt and Negri book, Empire and its sequel. Or consider the celebrity “Marxist” flavor-of-the-day, Slavoj Zizek. Zizek’s prolix ranting, as with those who preceded him, will soon settle in the remainder bins and disappear into irrelevance.
Nothing discourages the curious from actually reading Marx more than an impenetrable tome by a self-important Marxist poseur. Nothing tarnishes the Marxist legacy like an “entertainment” laden with pretentious neologisms and paradoxical aphorisms.
One of the most common shell games is to invent a new “stage” of capitalism, a hitherto undiscovered direction signaling epochal change. When Lenin wrote Imperialism, he explained it neither as a departure from the evolutionary course of capitalism nor as a step away from its fundamental wellspring. Instead, he showed how capitalism’s core mechanisms evolve qualitatively new forms, in this case, the features associated with imperialism.
Over the last few decades, writers have professed to discover a new stage of capitalism that supersedes Lenin’s imperialism, generally based upon impatience with the course of history or an urge to become the next celebrity Leftist intellectual. In all cases, the new post-imperialism theories have sprung from a misreading of passing historic trends.
Some have fixed on the post-Soviet emergence of so-called “humanitarian intervention” on the part of the US, NATO, and other allies as the mark of the obsolescence of imperialism. Others take the proliferation of supra-nation institutions as signaling a new international order overshadowing the nation-state and hence rendering the theory of imperialism outmoded. And still others have interpreted the late-twentieth-century global expansion of investment and trade (so-called “globalization”) as indicative of new cooperative links incompatible with Lenin’s view of imperialism.
Driving all of these views is a general hostility to revolutionary Marxism and the political implications of Lenin’s theory. That is, the authors do not want anyone to take imperialism seriously.
Where argument may fail, events have largely rendered these theories irrelevant: “humanitarian intervention” is a thinly disguised cover for old-fashioned imperialism; one nation-state—the US—dominates nearly every international institution from the UN to the IMF while maintaining much of the world as client-states; and “globalization” was critically wounded by global economic collapse.
Yet proclamations of a new stage continue to crop up. The latest is a pretentious piece laden with tables, figures and neologisms posted on August 7 in the formerly Communist publication, Political Affairs. Authored by Greg Rose and entitled Beyond Imperialism? Have We Reached a New Stage of Capitalism?, the article promises a fresh challenge to imperialism.
Not to keep a reader waiting, Rose’s answer is a resounding “yes”! He says: “The four new features of the current stage of capitalism…have intensified capitalism’s contradictions and carry implications for revolutionary struggle as urgent as those of the features of Lenin’s Imperialism.”
Rose claims to identify new developments that “question whether the underlying model [Lenin’s imperialism] fits the current stage of capitalist development.” Taking them in order, they are:
“Financialization” is a term that labels, but fails to describe or explain the process that resulted in the financial sector’s domination of the US economy. Like the word “globalization,” it is a popular word used by those who lack an understanding or forego an explanation of the underlying process. Rose’s coinage of the exaggerated term “hyperfinancialization,” while an attention grabber, adds nothing to an already empty neologism.
In truth, the financial sector has grown by leaps and bounds, but its dominance of national economies has been limited largely to the US and the UK (and Iceland, by choice). Finance grew sharply and dominated in these economies precisely in step with the destruction of the manufacturing sector in the US and UK. As manufacturing began its migration to lower wage areas, both countries, but especially the US, shifted its economic “activities” toward finance and financial services. In effect, the unification of the global economy created the conditions for a new international division of responsibilities, with productive labor associated with emerging markets and financial markets associated with US and UK financial centers.
Following Michael Hudson’s theses on “fictitious capital” (From Marx to Goldman Sachs: The Fictions of Fictitious Capital), Rose reduces the global financial crisis to the fetish of compound interest. While there is a small, metaphorical kernel of truth to this observation, it makes a profound crisis of capitalism appear to be an exercise in fantasy on the part of investment banks and their financial colleagues. Matters are not that simple.
It was not fictitious capital that ended the capitalist boom, but real wealth exploited from productive workers and concentrated in the hands of capitalist investors. The enormous pool of capital, searching for investment opportunities and finding few risk-free, profitable avenues in the productive sector, gravitated to the bankers. Armed with Rube Goldberg investment innovations, the bankers promised safe and comforting returns. But the new vehicles broke down.
If fictitious capital alone were the culprit, then it could be regulated away and capitalism would merrily get back on course. But the villain was over-accumulation, a process inherent in capitalism and perpetually leading to crisis.
Rose links the austerity measures urged by many governments with “hyperfinancialization.” But this is to confuse policy with the imperatives of capitalism. Whatever pressures the bond scavengers may place upon governing bodies, social democratic and conservative politicians are not compelled to comply. No government or union (like the European Union) need accept the tyranny of bonds—they choose to do so.
In the end, the growth in significance of the financial sector in the US and the UK—whether dressed up in the fancy uniform of “financialization” or “hyperfinancialization” – hardly evidences a new stage in capitalism.
Fusion of Ownership and Management at the Highest Levels of Capital
Since the era of Berle and Means (1932), researchers have acknowledged the changing patterns of corporate control, ownership, and compensation. C. Wright Mills (1956) observed that management emerged from and was sustained as “the very rich.” Baran and Sweezy (1966) noted that “managers are among the biggest owners… Far from being a separate class, they constitute in reality the leading echelon of the property-owning class.” Undoubtedly the merging of ownership and management has continued—even intensified—over the last fifty years. There is nothing new in this process.
Rose sees this long established process of fusion as linked somehow to “hyperfinancialization,” a difficult thesis to maintain given their independent histories. He is shocked to see management “…make increasing stock price the principal objective of corporate operations.” And when was increasing the nominal value of the company alien to management?
In a curious non sequitur, Rose offers figures and data taken from a study by Fyrdman and Jenter (2010) that highlight two different measures of the effectiveness of CEO compensation. In the words of the two academics, they are trying to determine: “What is the right measure of the wealth-performance relationship?” They conclude: “The progress made by recent studies on all these dimensions is cause for optimism and suggests that answers may not be far off.”
And I might therefore ask: What is the relevance of their study to Rose’s thesis?
The fusion of management and ownership is old in origin and continuing. It suggests no new stage in capitalism.
Capitalism’s Cannibalism of Invested Public Labor through Privatization
Recapitulating Key Facets of the Earlier Process of Primitive Accumulation
Rose performs a service by underscoring the significance of the privatization of Soviet and Eastern European socialist property and the absorption of the workforce into the capitalist labor market. The privatization of publicly owned assets served as a basis for the creation of a national bourgeoisie in many countries and for fire-sale asset purchases by existing capitalist enterprises. But the destruction of European socialism had an even more lasting effect by opening up a new and very cheap labor market and a destination for global products. In a real way, the elimination of the socialist economic community cleared all obstacles to trade agreements and unfettered market relations; there was no longer an existing economic alternative.
But to advance this to a new form of “primitive accumulation” or its like is completely unwarranted.
Rose cites a passage from Rosa Luxemburg’s Accumulation of Capital to bolster his thesis, a passage that likens colonial domination (in the era of imperialism!) to the brutality and violence of the era of primitive accumulation “…at the end of the Middle Ages, when the history of capitalism in Europe began…” But where primitive accumulation jump-started capitalism in its time, colonial accumulation served to free land, resources, labor, and trade for capitalist exploitation.
There are two paradoxes here.
If Rose is right and modern privatization heralds an era of capitalism akin to Rosa Luxemburg’s account of colonial domination, then how is it different from Lenin’s near simultaneous and similar account of imperial (colonial) domination for land, resources, labor, and trade?
Secondly, if this is a new era of accumulation through privatization and the snatching of vast amounts of real value, then how can this claim be reconciled with the “financialization” thesis that stands on the foundation of “fictitious capital” and not real sweated value?
While Rose offers some ideas of interest, Lenin’s theory of Imperialism remains safe.
Parenthetically, Rose’s pretentious borrowing of an esoteric expression from cellular biology – “autophagic accumulation”—to describe his modest insight is reminiscent of the petty academic practice of surrounding small ideas with a dense fog.
The Emergence of External, Environmental Constraints on
Capitalism’s Ability to Accumulate and Reproduce
Finally, Rose reminds us of the impact of environmental degradation. He offers a useful warning of both the finite limits of fossil fuels and the increasingly ominous impact of climate change. While peak oil is not as settled of an issue as Rose suggests, it certainly looms somewhere ahead on the time line. But climate change threatens with much more immediacy and with amplified influence on economic growth.
While climate change must be a central issue for any progressive program, it and the peak-oil question do not modify the logic or course of imperialism. Imperial policy has and remains focused on securing scarce resources. The human cost of climate change will no more deflect imperial policy than did the human cost of colonial invasion, occupation, and domination or world wars. To point to deaths from starvation, as Rose does in his article, no more influences the imperial agenda than pointing to the deaths in Libya or Syria.
In reality, one cannot be a serious environmental advocate without being an anti-imperialist. The enormous waste associated with maintaining, transporting, and unleashing an enormous war machine trivializes the commendable collective commitment to recycle or recover consumer goods. The scrap heap of weapons systems –their development, deployment and rapid obsolescence—counts as one of the greatest insults to the environment as well as a callous disregard for protecting and preserving our resources. Their actual use in destructive imperial adventures courts even greater environmental catastrophe.
However, this is not a new feature of imperialism, but a quantitatively greater assault on the environment, an assault that threatens first and foremost those weakest and poorest.
To argue that the great harm of reckless destruction of the environment is somehow inconsistent with or alien to Lenin’s theory of imperialism defies credibility. No social theory devised since the advent of capitalism consistently links essential features of the economic system to harm brought on the world’s people as do Marx, Engels, and Lenin’s theories of capitalist development. Other theories warn of dangers, setbacks, or potential tragic policies, but none demonstrate a logical connection between capitalism, imperialism and human suffering as do those theories.
It is not the inviolability of Lenin’s words that is at stake here; capitalism may well mutate to another stage beyond imperialism (hopefully a transition to socialism!). Instead, it is the integrity of our social science, its ability to account for and predict events, and its cumulative advancement that call for defense.
Rose errs in cavalierly violating these standards. His is not a challenge to Lenin’s theory, but a misunderstanding.