Lenin cleans house, but I think he missed a spot
What is the best way to understand what we call imperialism, which is basically the economic and political relationship between the first and third world? Lenin has been the main starting point around this question for most on the revolutionary left. Are there basic problems with the understanding of imperialism that derives from Lenin? I think so.
Below Wallerstein describes the centrality of unequal exchange to capitalism as a system, which is the process of how profits are reaped from the third world (which he calls the periphery zones within the capitalist world economy) and the western or first world nations (which he terms the core zones). First are several points that I think are worth highlighting based on how Wallerstein explains this process and which are in contrast with the much of the left’s understanding of imperialism as it is derived from Lenin.
Feedback is welcome.
a) Capitalism has always been an international system and as much so today as it was in the sixteenth century.
b) Capitalism as a system has always been based on the relationship of core and periphery regions in the world whereby through the process of unequal exchange surplus flows from periphery to core regions.
c) As production processes move down a hierarchy of processes they move from core to periphery regions.
d) Core regions use their accumulated capital to build strong states and ensure that states in periphery area remain or become weak and therefore compliant in accepting the relationship of unequal exchange.
e) There are no stages of capitalism whereby capitalism as a system moves from a presumed more localized, peaceful and competitive phase to a more international, militaristic and monopoly based phase, which what Lenin asserted in his writings on imperialism, which he called the ‘highest stage of capitalism.’
f) While Lenin’s analysis is useful to explain the political moment that faced the world at the early twentieth century, it does not explain well the system of capitalism as it has existed historically.
g) Lenin’s analysis of imperialism, which is focused on economics and how the imperialist states must use violence in colonization and will eventually resort to war in competition between each other over colonial spoils, offers a weak explanation of how imperialist and colonial states relates to one another.
For a standard interpretation of Lenin on imperialism see:
“What is imperialism?” from the US-based Socialist Worker
Commodity chains “…have tended to move from the peripheries of the capitalist world economy to the centres or core. It is hard to contest this as an empirical observation. The real question is why this has been so. To talk of commodity chains means to talk of an extended division of labour which, in the course of capitalism’s historical development, has become more and more functionally and geographically extensive, and simultaneously more and more hierarchical. This hierarchization of space in the structure of productive processes has led to an ever greater polarization between the core and peripheral zones of the world-economy, not only in terms of distributive criteria (real income levels, quality of life) but even more importantly in the loci of the accumulation of capital.
Initially, as this process began, the spatial differentials were rather small, and the degree of spatial specialization limited. Within the capitalist system, however, whatever differentials existed (whether for ecological reasons or historical reasons) were aggregated, reinforced, and encrusted. What was crucial in this process was the intrusion of force into the determination of process. To be sure, the use of force by one party in a market transaction in order to improve his price was no invention of capitalism. Unequal exchange is an ancient practice. What was remarkable about capitalism as a historical system was the way in which this unequal exchange could be hidden; indeed, hidden so well that it is only after five hundred years of the operation of this mechanism that even the avowed opponents of the system have begun to unveil it systematically.
The key to hiding this central mechanism lay in the very structure of the capitalism world-economy, the seemingly separation in the capitalist world-system of the economic arena a world-wide social division of labour with integrated production processes all operating for the endless accumulation of capital) and the political arena (consisting ostensibly of separate sovereign states, each with autonomous responsibility for political decisions within its jurisdiction, and each disposing of armed forces to sustain its authority). In the real world of historical capitalism, almost all commodity chains of any importance have traversed these state frontiers. This has been true form the very beginning of historical capitalism. Moreover, the transnationality of commodity chains is as descriptively true of the sixteenth-century capitalist world as of the twentieth-century.
How did this unequal exchange work? Starting with any real differential in the market, occurring because either the (temporary) scarcity of a complex production process, or artificial scarcities create manu militari, commodities moved between zones in such a way that the area with the less ‘scarce’ item ‘sold’ its items to the other area at a price that incarnated more real input (cost) than an equally-priced item moving in the opposite direction. What really happened is that there was a transfer of part of the total profit (or surplus) being produced from one zone to another. Such a relationship is that of coreness-peripherality. By extension, we can call the losing zone a ‘periphery’ and the gaining zone a ‘core.’ These names in fact reflect the geographical structure of the economic flows. …
The concentration of capital in core zones created both the fiscal base and the political motivation to create relatively strong state-machineries, among whose many capacities was that of ensuring that the state machineries of peripheral zones became or remained relatively weaker. They could thereby pressure these state-structures to accept, even promote, great specialization in their jurisdiction in tasks lower down the hierarchy of commodity chains, utilizing lower-paid work-forces and creating (reinforcing) the relevant household structures to permit such work-forces to survive. Thus did historical capitalism actually create the so-called historical level of wages which have become so dramatically divergent in different zones of the world-system.” (30-32)
On force and free exchange in the world market or an excellent rebuff to mainstream economics
“… actual prices always seemed to be negotiated in a world market on the basis of impersonal economic forces. The enormous apparatus of latent force (openly used sporadically in wars and colonization) has not had to be invoked with each separate transaction to ensure that the exchange was unequal. Rather, the apparatus of force came into play only when there were significant challenges to an existing level of unequal exchange. Once the acute political conflict was past, the world’s entrepreneurial classes could pretend that the economy was operated solely by the considerations of supply and demand, without acknowledging how the world-economy had historically arrived at a particular point of supply and demand, and what structures of force were sustaining at that very moment the ‘customary’ differentials in levels of wages and of the real quality of life of the world’s work-forces.” (33)
Immanuel Wallerstein, “Historical Capitalism with Capitalist Civilization” (London: Verso, 2003). First published in 1983.