Imperialism disappeared once it ceased to be profitable or else Nationalism kicked its head in.
However, it appears, not everybody got the memo.
Many years ago some White people propagated a 'Theory of Imperialism'. Currently, some elderly Patnaiks are still subjects to the Imperialism of this theory.
Akeel Bilgrami, in his introduction to these cretinous Patnaiks' 'Theory of Imperialism' writes, with typical fatuity-
On a standard understanding of the distinction between colonialism and imperialism, the latter— deriving in its etymology from the Latin term ‘imperium’ connoting ‘command’— has to do with the domination of one region by another through some form of control whether direct or indirect; whereas the former refers to such a control by a direct and relatively abiding, if not always permanent, settlement of a population or, at the very least, a governing class, by some form of conquest of one region by another. The treatment of the subject in the pages that follow is a variant on the standard view and its focus is entirely on the modern period. A clear claim is made: ‘Imperialism’ is said to be the more general term and it is defined by a form of economic domination of one region by another.Thus one can speak of Chinese Imperialism over its 'belt and road' partners or the City of London's Imperialism over Britain or children's Imperialism over their Mummies and Daddies who are forced to slave away at horrible jobs so as to feed and clothe and educate the little shits.
Imperialism of this imaginary sort will always exist if some economically dominate others. It exists within families and work places and class rooms and gyms.
Colonialism is then treated as an historically special case of imperialism. Historically, imperialism first took a colonialist form.Not in the case of India. First there was economic domination- English merchants dominated the initial Presidency settlements- and only after a century had gone by did John Company find it profitable to assume direct rule of large parts of the sub-continent.
America and the Soviet Union and so forth never bothered colonizing India. Yet they had a relationship of economic dominance which the Patnaik's call Imperialism.
But it frequently survived the passing of colonialism, that is to say survived the withdrawal of a governing class from the conquered region after the latter gained its independence from colonial rule.Very true! You can see for yourself the manner in which tiny little Portugal is dominating the economies of Brazil and Goa and Macao and so forth. By contrast Britain did not dominate the Indian economy after independence.
It shares with colonialism certain properties of economic domination of one geographical region over another, properties that get modified after decolonization, yet at a more general and more fundamental level of description these properties are invariant in colonial as well as post- colonial contexts.Indeed they are invariant within families. If one gets to whine about Imperialism seventy years after the thing disappeared one also gets to complain that Mummy is an imperialist or Baby is being imperialist or that the cat is a big fat Imperialist because it is making purring noises and causing me to buy a tin of Whiskas which will deflate my disposable income leaving me impoverished.
Presenting these invariant properties is the large theoretical preoccupation of the book.Because the Patnaiks are still obedient subjects to some silly Theory of Imperialism which White people abandoned long ago.
The most general of the book’s claims regarding the economic basis of imperialism, is that there is no understanding the nature of capitalism as an economic formation of modernity without understanding imperialism as being, not a mere ‘last stage’ to use Lenin’s phrase, but essential to capitalism pretty much from the outset.Coz Lenin really understood Capitalism! The fact that Germany and Switzerland became capitalist without any colonies suffices to disprove this nonsense.
This means that it is not sufficient to see capitalism merely in terms of the privatization of land and property and the recruitment of wage- labour by its proprietors to work on it with the purpose of obtaining surpluses. If that were sufficient to define the economic formation that we call ‘capitalism’, then imperialism would be a merely contingent further accrual to it, an expansionist extra, as it were, but not built into its essential workings.That is the sensible view. The fact is, had countries targeted for colonization fought back properly, there would have been no colonies but Capitalism would still have existed. Trade would still have occurred. Countries which were more efficient and innovative in combining factors of production would dominate economically, just as countries which were better at science would dominate scientifically, and countries which devoted a lot of resources to missionary work would dominate theologically.
This would be to view the nature of capital in purely static terms, missing its intrinsically dynamic nature whereby, as a result of the demands forced by the incessantly competitive nature of capital, new and external stimuli are indispensable to the reproduction of capital— and one vital such external stimulus is provided by the relations that capital constantly seeks from outside of its initial territorial anchors in more distant regions of the world.Utter baloney. Intra industry trade between advanced countries is the key to capitalist dynamism. Bilateral deals featuring the exchange of primary products for manufactured goods can be managed well enough by Communist behemoths.
The analytical component contains a sustained argument which, at the most schematic and general level, exploits three central concepts, with a number of further auxiliary concepts brought in to elaborate the details of the theory and to defend it against possible objections. The three chief concepts are ‘increasing supply price’, ‘the value of money’, and ‘income deflation’. The general line of argument, taking capitalism to be the prevailing economic formation, is this: Capital accumulation causes increased demand for certain goods, leading to more production, leading in turn to increasing supply price.Nonsense! Capital accumulation incorporates technological advances. The supply price falls. Back in the Eighties, few Indians could dream of having a phone or a camera or a watch. Now most can afford a camera phone which tells the time and does a lot of other cool stuff.
When this happens, there will be a threat to the value of money.Only if the Government borrows a lot and uses the printing press to print money.
The Patnaiks write-
if there is a commodity that is in fixed supply in an economy that is other wise nonstationary, then no other commodity except this commodity itself, if it has negligible carrying cost (or another commodity that has negligible carrying cost and whose relative price vis- à- vis this commodity, is generally believed, for what ever reason, rightly or wrongly, to remain invariant), can possibly function as money under the usual rules of market exchange, i.e., in the absence of constrained choices (or rationing equilibria).This is nonsense. The money we actually use is fiat currency permitting Credit Creation. It is not in fixed supply.
No 'commodity money' has ever been in fixed supply. Gold mines produced more gold, Silver mines produced more silver, beaches provided more cowrie shells and so on and so forth.
The Patnaiks- who clearly suffer from a folie a deux- say
The fact that such an economy is doomed to reach a stationary state has been known since the days of David Ricardo, who of course postulated “diminishing returns” rather than the more stringent assumption of a fixed supply (but the difference is immaterial for the present purpose).Nothing of the sort has ever been known save by lunatics. Technological or transport improvements can increase the velocity of circulation of a given 'fixed' money stock. Conversely, a deterioration in law and order could lead to money being hoarded and thus the velocity of its circulation falling.
Diminishing returns, in a Ricardian world, may lead to rents rising at the expense of profits and wages. The term has never been applied to money. Why not? Because either money is all of the same quality or 'bad money drives out good' by Gresham's Law. This is the opposite of what happens where marginal land, or labor, is only employed as a last resort because it is inferior in quality. If there is 'bad money' then it is employed first while 'good money' is hoarded and goes out of circulation.
And the Von Neumann rate of maximal balanced growth in such an economy is zero. But the point is that even while making a traverse to the stationary state, no other commodity can possibly act as a store of value, which is the primary function of money even when it is being used as a mere medium of circulationThe Von Neumann model does not feature money. It is assumed that labor receives only the bare subsistence wage while everyone else immediately reinvests everything they get over and above this subsistence wage. There is no need for a 'store of value'. Indeed, this model does not feature initial endowments of any kind.
Von Neumann Gale models describe the time evolution of the intensivity of factor use and feature duality. A factor in fixed supply can still be used more intensively. The velocity of circulation of money can go up. Men can work faster. Soil can be more intensively cultivated. Machines can be kept running around the clock. No doubt, in the stationary, deterministic Von Neumann model, there is an equilibrium and maximal growth is zero because that's what the word stationary means. If the maximal growth rate wasn't zero the model wouldn't be stationary. What the Patnaik's have written is nonsense. From this nonsense- by ex falso quodlibet- the deduce yet more absurd nonsense.
The obvious conclusion that follows from this... is that under the usual rules of market exchange, a modern credit money economy is incompatible with the existence of any commodity that has negligible carrying cost and is fixed in supply, or subject to increasing supply price at given money wages (for the Ricardian reasons of “diminishing returns”).Picasso paintings are fixed in supply. They have negligible carrying cost relative to value. Thus in a modern credit money economy Picassos can't exist. All those billionaires who use such paintings as a 'store of value' are completely deluded. Either that or we don't really live in a 'credit money economy'. Probably, we are living under the Imperialism of the Kaiser.
But something far more important also follows from this, namely, that even an economy with commodity money, including gold- money, is incompatible, under the usual rules of market exchange, with the existence of such a commodity (which, to repeat, is fixed in supply and has negligible carrying cost). This is because while both gold as well as the commodity in fixed supply ex hypothesi have negligible carrying costs, the latter will drive gold, which itself is not in fixed supply in the same way, from becoming a form of wealth- holding, in the sense that under the usual rules of market exchange, there will be no stable equilibrium in such an economy where wealth will be held in the form of gold.Wow! The Patnaiks are not aware that most people have some gold or near gold in their portfolio- if they have a portfolio at all.
But this is not all. If gold itself happens to be the commodity subject either to fixity of supply or to Ricardian “diminishing returns,” then it would restrict the scope for other commodities, such as factories, houses, and the like, to become forms of wealth- holding.This is why Britain or America did not have any factories and shipyards and coal mines before they went off the Gold standard.
This brings us to the second proposition, namely that not only is it impossible for an economy where there is fixity in supply of some commodity that also has low carrying cost, to have any other commodity acting as money, but that this commodity itself, while making it impossible for any other commodity to act as money, would put a constraint on wealth- holders also holding “non- money assets.”This is sheer fantasy. People own some real estate, some gold, some artworks, some stocks and shares, and some more liquid type of balances.
The Patnaik's have invented their own Portfolio choice theory for a specific purpose- viz. to justify their absurd beliefs about Capitalism and its secret dependence on some supposed 'Imperialism'.
Since we know that capitalist economies have functioned for a long time despite having commodities that are in fixed supply or are subject to increasing supply price (of which minerals, including above all oil, are one obvious example, and the mass of products from the fixed tropical landmass are another), the question naturally arises: How has this been possible?The answer is because Capitalist economies have either embraced technological innovation and reduced transportation costs while boosting factor productivity or else they have been conquered or have stagnated.
And the answer lies simply in the fact that the usual rules of market exchange have not been followed.In which case, Capitalism did not in fact obtain.
But they have been bypassed not in the sense that rationing equilibria and constraints on asset choices have been the norm under capitalism, but in a very different sense: namely, through the exercise of coercion in the form of imperialism, whose economic content, in the form of income deflation, etc., has been explored in earlier chapters.So Capitalism exists only because it gets up in the middle of the night and goes and robs very poor peasants in third world countries and then returns home undetected.
This is a picture of Bill Gates who was caught stealing from some villagers in India. They gave him a good talking to and let him go. But he was soon back to his old tricks. What to do? Capitalists are like that only.
Capitalism is supposed to be based on the rules of market exchange; but if capitalism were based merely on the rules of market exchange, indeed any set of rules of market exchange, it would be an impossibility. Capitalism without imperialism is an impossibility.Imperialism depends on being good at transportation and fighting. This means being good at technology. Some Capitalist countries became Imperial powers because they had the best Navies and could pay for superior armies. However, Nationalism started fighting back. This meant Imperialism became too costly. A better way forward was to make cool new stuff using superior technology and then to sell it to others. That's what South Korea and Taiwan and so forth have done. This does not mean they are actually Imperial powers or that their Capitalism is imperfect. What it does mean is that their Nationalism expressed itself in a determination to lift up the economic condition of their own people. India, too, wishes to take this route under the Nationalist, Narendra Modi. This prospect appalls not just the Patnaiks but our old friend Akeel Bilgrami who writes-
The actualization of such a threat (viz that of 'cost-push' inflation e.g. that associated with OPEC driven petrol price rises in the Seventies), given the nature of capitalism, is intolerable.Capitalism can and has tolerated even hyperinflation. It turned out that the cure for 'stagflation' was to let unemployment rise till endogenous cost-push was eliminated thanks to the demoralization of organised labor. After that, Capitalism was on an even keel with 'sound money'. There was no need to use 'money illusion' to tax the working class.
The actualization of this threat to the value of money can only be avoided by enforcing an income deflation that imposes hardship on the petty producers and working population.Petty producers need to stop being petty. Working populations need to exclude migrants and stop having babies like crazy. Reducing the supply of labor- which is what Trade Unions and Professional Associations do- is what raises its price.
The Patnaik's 'central concepts' are shit. So are their key 'empirical observations'
The first is their refutation of Ricardo's theory of comparative advantage in which they falsely claim that England could not produce Wine.
cold temperate Britain could not produce grape wine on a commercial basis; this was particularly so when Ricardo wrote, since genetic modification of plants was unknown.It could and did, though reduced protection from foreign competition decimated the British wine industry after 1860.
More generally, there is no commodity for which some gross substitute does not exist locally. Thus, during the Great War, the Germans drank ersatz coffee. There was also a costly way of turning coal into a sort of petrol.
The Patnaiks believe Economists have
not come to terms with the fact that obtaining goods at nonincreasing prices from petty producers located on the tropical landmass, whose products are not producible within the capitalist sector that has grown up in the temperate region of the world, is simply not possible under the normal rules of market exchange.This is because brown people who grow pineapples don't want things like iPads. That is why Steve Jobs and Bill Gates and so forth had to get up in the middle of the night and go steal those pineapples- without which advanced countries would quickly collapse- so as to preserve Capitalism and Democracy and the American way of life.
It has therefore not accepted the fact that capitalism is unsustainable under the normal rules of exchange. It requires coercion to be exerted on this outside world, a coercion that we call “imperialism.”Because countries that produce pineapples won't exchange them for Electricity generators or the sort of cool stuff that runs off electricity. Our rich people have to go and steal, or extort, pineapples from half starved brown people. Thus they are not Capitalists but Imperialists of a brutal and ferocious type.
Imperialism, in short, is a coercive relationship exercised by the cap italist sector on the “outside” world to ensure, first, that it obtains the products that it needs from this “outside” world and second, that it does so at nonincreasing prices.The Patnaiks are fixated on the notion that tropical countries are the source of wealth which Cold Northerly countries brazenly steal so as to get rich. However, if you let people steal from you, you are either stupid or cowardly or very very lazy. So the real story here is about how the Global North is smart and brave and thus gets to steal and cheat stupid, lazy, cowardly Brown people.
No doubt some White people may have had a Theory of Imperialism along these racist lines a century ago. The mystery is why the Patnaiks choose remain subject to the epistemic domination of those long dead White people who are unhonoured and unsung in their own countries. Actually, there is no mystery. These cretins have abandoned any pretense of being economists and are now jockeying for a position on the reading lists of 'Grievance Studies'.
What was stopping those being coerced from fighting back? Laziness? Stupidity? Or was it cowardice?
a great deal of trade had a brazenly coercive dimension to precisely overcome the handicaps bestowed by geography’s asymmetries.
What was this coercive dimension? Here we return to the argument of the analytical component applying it now to the empirical component of such a material asymmetry. So: after a point, for the reasons given earlier, the relevant commodities are producible only at increasing supply price.Diminishing returns? But technology can fix that.
When this happens, the countries which require these goods but cannot themselves produce them are able to acquire them from the countries that produce them only under a threat to the value of money.Why not just sell them some cool stuff? Consider how Europe coped when oil prices went through the roof. Posh Old Etonians like Jonathon Aitken started pimping for the Oil Sheikhs- as Al Fayed proved in court. South Kensington became Saudi Kensington.
There was a threat 'to the value of money' coz of Trade Union militancy. However, once Reagan and Thatcher showed their willingness to let Unemployment rise without limit to squeeze inflationary expectations, there was a 'Great Moderation'. America recovered very quickly from the 2008 crash. Much of Europe didn't because the Euro protected 'the value of money' but destroyed jobs.
In order to avoid this threat, which is intolerable, these countries impose income deflation on the countries where these goods are produced causing untold hardship to the poor and working people of those countries.Yup! That's what happened during 'peak oil'. The poor and working people of Saudi Arabia were obliged to holiday in London and Paris and the South of France while a relative of theirs was treated in a private hospital all on their Government's dime. Plenty of white people relocated to Saudi or the Gulf to do the smart stuff while brown people relocated there to do the menial stuff.
The countries that produce these goods and have this income deflation imposed on them by the countries that need and acquire these goods from them were initially the colonized and colonizing countries respectively, but the same relationship frequently abides between these sets of countries via different mechanisms after decolonization.Only if the new rulers are stupid, lazy, and cowardly- which is what caused Colonization in the first place.
‘Imperialism’ is the name for this relationship between these different sets of countries. Or to put it more specifically, since the beginning of the fault- line is the prospect of increasing supply price of the commodities that are predominantly produced in some countries, imperialism is the set of policies (income deflation) devised by countries that rely on those commodities but do not sufficiently produce them, to prevent that from happening and thereby preventing the threat to the stability of the value of money on which their monetary economy depends.If the other guy is stupid, lazy and cowardly, you can deflate the fuck out of his income by robbing or cheating him.
Why are the Patnaiks subservient to a Theory invented by dead White Men which does not tell brown people how to get rid of stupid, lazy or cowardly leaders? The answer is that they are Leftists and therefore feel it their duty to be anti-national.
The book is primarily a theoretical analysis of imperialism and a theoretical diagnosis of its persistence throughout the history of capitalist political economy. Despite its wide and humane sympathies, it does not undertake any elaboration of what resistance to imperialism would require nor what a world without imperialism, as they diagnose it, would look like exactly. It is an obvious inference from the analysis itself, which explains how imperialism is a non- cancellable feature of capitalism, that capitalism would have to be, as the title of the very brief last section of the book puts it, ‘transcended’ for imperialism to be a thing of the past.So the book is utter shite. Imperialism ended long ago because it was contrary to the ethos of Capitalism. Why? Because it required conscription and thus constricted the labor market while permitting bureaucracy to flourish with plenty of 'repressed inflation' and queues for everything and 'exchange controls' and laws against owning gold or foreign currency and high marginal rates of tax and other such mishegoss.
There was an Indian Swami named Mahesh Yogi who got very rich pushing something called 'Transcendental Meditation' which would enable one to spread World Peace by 'Yogic Levitation'.
In a similar vein, these stupid Patnaiks are preaching the 'transcending of Capitalism' as the only way to get rid of an Imperialism which was killed off by the Second World War.
Do these fools have any practical recommendations?
The Patnaiks speak passingly of the necessity for nations of the South to ‘de- link’ from neo- liberalism’s globalized financial economy (presumably initially by serious efforts to impose controls on the flight of capital) and elsewhere they hint of a subsequent partial South- South relinking so that the smaller economies of the South can survive with the support of its larger economies.Wonderful! Indians won't be allowed foreign exchange to go anywhere nice. It would be a case of back to the Fifties. As Salman Rushdie reminisced
The Patnaik's want a world where Indians will have to make do with going to places like Tanzania for business or education. Won't that be wonderful? The black economy will flourish like never before and all the cool stuff you might want to buy would have to be smuggled in from Nepal or Sri Lanka or whatever.
My first - Indian - passport, for example, was a paltry thing. Instead of offering the bearer a general open-sesame to anywhere in the world, it stated in grouchy bureaucratic language that it was only valid for travel to a specified - and distressingly short - list of countries.
On inspection, one quickly discovered that this list excluded almost any country to which one might actually want to go. Bulgaria? Romania? Uganda? North Korea? No problem. The USA? England? Italy? Japan? Sorry, sahib. This document does not entitle you to pass those ports. Permission to visit attractive countries had to be specially applied for and, it was made clear, would not easily be granted.
The Patnaik's live in a country ruled by the Hindu Nationalist BJP. Yet they want more economic power to be concentrated in the hands of the Government. What do they think will happen to Muslim entrepreneurs under such a regime? Bilgrami, an Indian Muslim, writes
there are fascinating hints in the book that point towards a more subtle analysis, suggesting that a return to greater national sovereignty in the very specific realm of economics (i.e., a return to control of one’s economy rather than have it hegemonized by global finance capital) is the best way to resist the wrong forms of nationalism all over the world, the rightly feared reactionary nationalisms based on ethnicities and extremist religious elements prevalent in many parts of the world today. These ideas deserve close study and further development.
Well connected Hindus will always be able to get foreign exchange. It will be Muslim business houses that will get squeezed. Thankfully, Modi is no Hitler. But what of his successors? Minorities are safer when they have access to open markets. The get the short end of the stick if resources are allocated by a bureaucracy.
Turning to the Pattnaik's own woeful screed, consider this passage-
What is the origin of third world food dependence?The answer is simple. The curse of foreign Aid- including PL 480 food shipments- which acts in exactly the same manner as any other resource curse. Add in a Malthusian trap featuring agricultural involution and you get third world food dependence. Truman was not impressed when Nehru- the leader of a largely agricultural country which had escaped the ravages of War- demanded food aid. Later, very foolishly, the US subsidized Nehruvian Socialism till the Indians discovered they couldn't afford 'free money' from America because it was inflationary and had otherwise mischievously distortionary effects. LBJ did us a favor by linking food aid to support on Vietnam. India was forced to end 'food dependence' by doing sensible things. The Patnaiks, no doubt, were outraged but they were silly people coopted by the dynasty.
But the even more important question is never asked: What is the origin of the demand for the products of third world land by the advanced industrial nations and how is this demand, which continues to increase, met?We know that Third World countries want to import stuff that can help them defend themselves and give their elites an incentive not to hightail it for jobs driving cabs or washing dishes in Western Cities. These Third World countries have Procurement and Marketing Boards for Cash Crops which they sell to anyone who will pay in hard currency. Sometimes they will simply lease out large tracts of land to China or Gulf countries- or Indian businessmen.
And what is the consequence for local populations of meeting this growing demand from the North?Local populations keep growing and getting poorer coz they are struck in the Malthusian trap of agricultural involution or petty trade.
The nature of land as a nonproducible resource, and the absence of specific “land- augmenting” economic measures by their states, which were constrained by the system’s insistence upon “sound finance” (or its recent incarnation, “fiscal responsibility”),In other words, the refusal of lenders to go on lending without ever getting repaid
meant that the specialization by southern nations in export crops, rather than benefiting them, entailed certain important adverse consequences: it was always marked by a decline in the production and availability of food grains for local populations owing to the diversion of land and other resources to export crops.Yet local populations kept growing unless there was an AIDS epidemic.
This inverse relation, between the growth of export crops and the availability of food for the local populations, is invariably ignored in development theory.This is because if you have large scale agribusiness then fewer people are trapped in agricultural involution and so they migrate to places where they stop having babies like crazy. This is called demographic transition. It ultimately results in higher real income- though there may be a 'middle income' trap.
The main economic mechanism for ensuring an uninterrupted supply of these products to the advanced North at nonincreasing prices has been an “income deflation” imposed on the working populations of the South, which restricts their demand for their own products.Nonsense. The terms of trade move against primary producers because long run Demand is inelastic while Supply, because of new technology or transport connections, keeps shifting outward.
Income deflation occurs if the labour supply grows faster than the demand for it. It can happen in an autarkic economy simply because of diminishing returns to agricultural involution.
Anyway, there is a lot of income deflation in the 'Rust Belts' of the West for a similar reason- viz. inelastic Demand with expanding Supply. No doubt, there may also be problems with 'dumping' of the sort Trump is addressing.
This has indeed proved to be a highly effective tool and continues to be used even in the absence of direct political control being exercised over southern populations.We call a thing a tool when it can be used by anyone to achieve the same effect. A hammer is a tool whether I use it or you do. Why don't poor countries use this tool to deflate the incomes of the rich? Is it because they have no money? In that case, Money is the tool. People who have it escape income deflation. Those who don't suffer it. What a wonderful discovery! A person who has been mugged has experienced 'income deflation'. The mugger has used a highly effective tool and is thus an Imperialist even though she has no direct political control over the person she has mugged.
The resulting decline in the nutritional standards of this population and the rise in the incidence of poverty within it are denied in the existing “mainstream” literature, which follows untenable methods of measuring povertyIn India- whose population doubled- those who were very poor and who had lots of babies didn't do as well nutritionally as those who were less poor and who didn't have lots of babies. Indeed, obesity and other affluence related ailments rose at the same time and by about the same percentage as that of persisting malnutrition.
This has everything to do with Malthus and nothing to do with Lenin.
The Patnaik's believe there is something magical about tropical countries. All Wealth derives from this magic. Despite all evidence to the contrary, they firmly believe in
The need for metropolitan capitalism to impose income deflation upon the petty producers of the tropics
Thus 'occupying Wall Street' will do no good. Starbucks is 'income deflating' the fuck out of poor peasants in the tropics. So stop drinking coffee or tea. Insist on beverages sourced entirely from advanced countries. This will cause Capitalism to collapse or get transcended or achieve Yogic Levitation. Only thus can you release elderly cretins like the Patnaiks from abject subjugation to some stupid 'Theory of Imperialism' invented by evil dead White Men a long time ago.
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