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Is Russia Imperialist?

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Putilov workers 1917

[Update: I recently came across an valuable article written by bourgeois economists perplexed by Russia’s sudden emergence as a net capital exporter! Actually their conclusions, written up as a test of various schools of bourgeois economics, fit Lenin’s conception of imperialism very well. It turns out that Russia has been able to rapidly transit from so-called ‘socialism’ to net capital export because it retained the advantages of a monopoly structure of production (state and crony capitalist owned) and its former economic division of labor which has allowed China to profit from the highly integrated economies of the former soviet republics with the Russian economy. That is Russia can take advantage of its state monopoly over a sphere of influence in Central Asia, accumulate capital and export it to take ownership of  its ‘downstream’ energy markets and new sources of energy.]

Is Russia Imperialist? A hot topic raised dramatically by the brief war in the Caucasus the subject of a recent post here. My view expressed in that post was that Russia had indeed become imperialist again, given the export of capital to what are now formally independent states that had belonged to the SU in central Asia. I admit that this judgment was based on a fairly cursory swing through the internet looking for evidence of Russian FDI. It is something that I want to return to here. But before I do that, there is a larger question, and that is the definition of imperialism itself, since today the Left seems very confused as to whether or not Lenin’s definition still applies today, and if it does, is there agreement on what it is? This post is designed to address that larger question before returning to a consideration of what this means in the case of Russia. The first question then, is: what did Lenin mean by Imperialism?

What did Lenin mean by Imperialism?

In his pamphlet written in 1916 titled Imperialism: the highest stage of capitalism, Lenin summarizes the massive amount of research he had undertaken into this question collected in his Notebooks on Imperialism -Volume 39 of the Collected Works. Lenin reads all the material written by bourgeois writers like Hobson and former ‘Marxists’ like Kautsky. They agree that in the late 19th and early 20th century there has been a growing concentration and centralization of capital in the form of big banks, corporations with strong links to states that are pursuing predatory foreign policies designed to gain territory and raw materials from their rivals. The capital of these banks dominates and fuses with corporate capital to form finance capital. These banks and corporations form cartels (a few firms) or trusts (1 or 2 firms) in each of the major industries, railroads, oil, chemicals etc. While they often operate in several homelands (as in the case of oil) and make agreements to share territories and raw materials, the tendency is for these corporations to form monopolies that compete with one another using protectionist trade and military interventions to defeat their rivals. Thus, says Lenin, the bourgeoisie are quite capable of describing the emergence of state monopoly finance capitalism where increasingly market competition is displaced by state monopoly in determining investment and in the distribution of profits.

While Lenin agrees with this description, he disagrees with the bourgeois (and pseudo-Marxist) explanation of the nature of imperialism.  The bourgeois view is that imperialism is a policy of the ruling classes in the dominant countries pursued to advance their national interests at the expense of their competitors.  The most right-wing nationalists see this as some march of civilisation bringing its virtues to the uncivilised. The liberals see it as a process of enlightened humanitarism. The pseudo-Marxists like Kautsky etc. see it as a wrong policy that can be corrected by the mass intervention of the working class in bourgeois parliament.  Kautsky backs up his view with the argument that already this nationalist policy is being supplanted by an ‘ultra-imperialism’ in which the monopolies in the big powers have invested heavily in their rivals monopolies so that war between them is against their profit interest.  Lenin demolishes this argument quickly showing that despite the multinational character of monopoly capital, it relies on a national state to advance its interests in competing with other monopolies, and that this competition must inevitably lead to war.  In other works when Lenin’s talks of politics as concentrated economics, he is talking about Imperialism.

What Lenin insists on is that state monopoly capital does not lead to a peaceful process of transition from capitalism to socialism. Rather it opens up a succession of trade wars and military wars as each big power seeks to re-partition by force, territory and raw materials claimed by other big powers.  Monopoly therefore does not mean the end of competition, rather its shift from the market into the sphere of big power politics where workers would be conscripted to fight to defend national monopolies rather than uniting as an international working class to defeat their own ruling class.  Thus the epoch of imperialism is the epoch of crises, counter-revolution and revolution. Imperialism was necessarily the highest stage of capitalism at its extreme limit forced to destroy the forces of production to survive.  The alternative facing humanity was barbarism or socialism.

While it was one thing to agree with the bourgeois analysis of state monopoly finance capital, and to prove the pseudo-Marxists wrong -that imperialism would not peacefully evolve into socialism, but necessarily causes wars which must end in counter-revolution or revolution -Lenin did not need the first imperialist war to prove his theory correct. Though “imperialism” is a pamphlet and was therefore written for a mass working class readership, it does contain within it a short theoretical section where Lenin seeks to link his theory back to Marx’s Capital. In this section Lenin popularises Marx’ view of crises and extends his analysis to show how such crises much necessarily give rise to imperialism.  And more than that, he proves that imperialism cannot resolve those crises other than by counter-revolution or revolution.

The starting point is Lenin’s understanding of Marx’s method in Capital, that is, the reasoning that led Marx to explain in Capital the laws of motion of Capital that must necessarily express the fundamental contradiction between the relations and forces of production as a tendency for the rate of profit to fall- the TRPF, “the most important law of political economy” as Marx called it.  There were a number of means of offsetting or weakening that tendency – called Counter-Tendencies (CTs).  Let us see how Lenin takes up and develops Marx’s theory of crisis.

The Marxist/Leninist theory of crisis

Marx calls the TRPF the “most important law” because it explains why capitalism is an historically finite mode of production – a transitional mode between feudalism and socialism – and why that transition could not be peaceful.  But first we have to look at the method Marx used to arrive at this law in order to assess its validity. Marx used a method of abstraction which he worked out over decades of critiquing Hegel’s philosophy and the British political economists.  In the Introduction to the Grundrisse Marx explains his method as avoiding falsely abstracting from the observable events of the market to insert assumptions about timeless human nature and capitalism as the high point in some evolutionary story. Hegel did this in assuming that God was the universal idea and the society evolved according to his divine plan. The political economists did the same arguing that capitalism arose from an historic struggle to accumulate wealth so that the class structure reflected a natural evolution of the survival of the fittest.

Marx critique of Hegel and political economy rejected these stories as idealist: a set of ideas are taken as universal and projected back into history to explain it.  Marx reverses this process. Ideas are the product of social relations -being precedes consciousness – so that capitalist ideas produced by capitalist social relations projects an inverted view of capitalism as a natural state of being.  Marx’s method is to reject the surface phenomena and the ideological assumptions that define them and dive deeper into material substance of society, its social relations, so that he can then return to the surface and explain everyday events as the result of the laws arising from the social relations.  Capital represents this method self-consciously. The familiar commodity of the market is analysed as the ‘cell’ of capitalist society and is found to have two contradictory aspects, exchange value and use value.

Capital Vol 1 demonstrates that in his intellectual laboratory where capital is reduced to the commodity, that the use value of the commodity is necessary for it to be useful in meeting a need through consumption. The exchange value is the value of the labor-time required to produce it.  These two aspects are contradictory because under capitalist social relations commodities are sold to realise an exchange value and thus allow their consumption only if that exchange value contains sufficient surplus value to return a profit over the cost of production. Hence production expropriates surplus labor time for profits.  Capital Vol 2 shows that capitalism as a system must try to coordinate its production so that investment is balanced out to ensure production of use values necessary for it to be reproduced in an equilibrium. Thus all commodities and produced and reproduced at their value. Capital Vol 3 shows that this is impossible, because under conditions of competition between capitals insufficient surplus-value is extracted to return a profit over total capital invested – hence the TRPF and crises.  Capitalism cannot be in equilibrium and is more like a state of moving anarchy which poses the question of socialising the means of production to stave off anarchy, but in the process creating the conditions for its transformation into socialism.

Lenin goes beyond Marx

Marx did not complete his project of diving into the substance of capital in order to return to the surface to explain the complexity of concrete events. He didnt live long enough. Capital 2 and 3 had to be edited and pasted by Engels after Marx’ death.  His projected volumes on world trade, International relations and the state, would have meant coming back to the surface and allowed Marx to finish his project. Some foreshadowing of these volumes can be found in Marx’ journalism, and his later work on the Russian commune. Here Marx links his more abstract concepts with current events. What were the class interests that drove the British in India, or the Paris Commune of 1871. Would the coexistence of the Russian commune and backward capitalism in Russia allow a short-cut to socialism, bypassing mature capitalism? No systematic body of work left by Marx provided the answers. It was to be Lenin who had the task of completing these unwritten volumes. Notably in his book on the Development of Capitalism in Russia, and in his highly condensed pamphlet Imperialism. Let’s see how this happens.

In his book on capitalism in Russia, Lenin applies Marx theory of rent in agriculture to prove that Russian agriculture had made the transition to capitalism. This is an important book because it shows that as soon as production on the land enters into the capitalist market it becomes valued in terms of its productivity of value.  The social relations on the land shift from landownership deriving rents in kind to money rents representing exchange value.  Rent is now a deduction from surplus value in the sphere capitalist distribution having already been produced and exchanged in the market. This is the analysis of capitalist agriculture that enables Lenin to define Tsarist Russia as imperialist in Imperialism, a point I will come back to.

The small section of Imperialism where Lenin attempts to explain why capitalism had to develop into an imperialist stage he pins the cause onto capitalist agriculture. Again this is based on Marx’s analysis of agriculture.  Rent in agriculture is in two forms. First, absolute rent is that part of the surplus deducted by landowners. Ownership of land in limited supply means that landowners can always demand a share of the profits of non-owners – hence monopoly.

Second, differential rent is that amount of surplus-value that can be deducted from non-owners above the price of production of the worst land. Monopoly rent therefore varies depending on the quality of land and distance from market, and takes the form of differential rent.  Industrial capitalists who pay rent therefore constantly look for land where the costs of production on the best most productive land means paying less differential rent. This is the basis of Lenin’s development of Marx’ theory of crisis.

Marx’s TRPF means that the rising costs of constant capital – raw materials, plant and machinery that do not add value – call into existence CTs that cut the costs of constant capital.  Taking his cue from Marx, Lenin argues that capitalist agriculture in the more developed capitalst powers becomes ‘over-ripe’.  Despite its growing productivity its organic composition reduces profitability so that investment in agriculture falls. Moreover, the differential rent set by the worst land imposes a barrier on the reduction of costs of raw materials and wage goods in industry. As production on the land stagnates the price of production on the worst land sets the prices of agricultural commodities.

The land then sets a barrier to the CTs reducing the costs of agricultural inputs as constant capital, so the TRPF begins to bite and overproduction of capital results. This necessary overproduction of capital cannot find an outlet in the ‘home’ countries and looks for new land and productive investments abroad. It is the barrier of capitalist production in the land and the rising organic composition of capital at home that necessitates the export of capital, the search for new land, raw materials and markets.  Hence Lenin is able to prove that Marx’ laws of motion arrive necessarily at the highest stage of capitalism where the concentration and centralisation of capitalism takes the form of state monopoly finance capital.

State Monopoly Finance Capital

We have now arrived at Lenin’s concept of Imperialism as a necessarily highest stage of capitalism transitional to socialism. This theory as sketched out in his pamphlet Imperialism is the practical application of Marx method of abstraction used to explain the complex concrete reality of the world economy, international relations and the state in at the time of the first imperialist war. The famous 5 criteria of imperialism are a summary of these results which can be unpacked further to prove this point:

(1)The concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life;

(2)the merging of bank capital with industrial capital, and the creation on the basis of ‘finance capital’, of a financial oligarchy;

(3)The export of capital as distinguished from the export of commodities acquires exceptional importance;

(4) the formation of international monopolist capital associations which share the world among themselves,

(5) the territorial division of the whole world among the biggest capitalist powers in completed. Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed.

These five points are different aspects of the same process. The concentration and centralization of capital in the form of monopoly trusts results from their ability to monopolize rent, i.e. redistribute profits from weak to strong capitals. This sees monopoly capital associated with the states of the biggest capitalist powers whose foreign policies are designed to advance the interests of the monopolies. Moreover, state monopoly finance capital is dependent upon the export of finance capital and the import of ‘super-profits’.

To recap, Marx theory of crisis in Capital 3 explains the root cause. The rising organic composition of capital is the result of competition between capitals for larger shares of the market which causes capitalists to increase labor productivity by introducing new techniques. This requires a rise in investment in constant capital made up of plant and machinery and raw materials as a ratio to variable capital. This causes a tendency for the rate of profit to fall (TRPF) when the rate of exploitation of variable capital cannot return sufficient surplus to realize a profit. Marx talks about the role counter-tendencies in cheapening both Constant and Variable capital which act to moderate but not prevent the TRPF. Following Lenin then, It is easy to develop his arguments to show how these CTs become implemented in the epoch of imperialism in the form of state monopoly capitalism.

Lenin encapsulates this argument briefly in Imperialism. As the rate of profit falls capital is overproduced in the home country facing a land barrier to further capital accumulation, the result is capital export to new colonies and markets where new sources of land, raw materials and labor power holds down the value of both CC and VC. The result is super-profits that allow the further accumulation of capital as state monopoly capitalism. Let us see how Lenin arrives at this view.

The counter-tendencies Marx nominates act to reduce the costs of Constant and Variable capital. However they are also part of the same development of capitalism that causes the organic composition to rise. But while they can “weaken” they cannot “annul” the law. These CTs include:

(1) More intense exploitation of labor: the increase in relative and absolute surplus value without increasing the proportion of constant capital.

(2) Reduction of wages below their value: this is the result of competition among workers that drives down the value of labor power below the level necessary for its reproduction.

(3) Cheapening the elements of Constant Capital: this is a CT that shows that Marx was fully aware that rising productivity actually cheapened the elements of constant capital such as raw materials or machines. However, unlike many of his critics who seize on this fact to prove Marx wrong, he was clear that this acted as a CT and could not in itself prevent the TPRF.

(4) The Relative Surplus Population: here Marx is talking about the general tendency of the development of labor productivity expelling living labor from production and creating a surplus population. This increases the competition among workers driving down the value of labor power below the average, driving up profits above the average.

(5) Foreign Trade: Marx states that the “expansion of foreign trade was the basis of capitalist production in its infancy”. It both cheapens the elements of constant capital as well as wage goods so raises the rate of surplus value and hence the rate of profit. Capitalism however introduces a rising organic composition which reduces the rate of profit. He then states:

There is a further question, whose specific analysis lies beyond the limits of our investigation [i.e. in Capital 3 Marx is analyzing ‘many capitals’ but not yet at the level of the market, the state and international relations]: is the general rate of profit raised by the higher profit rate made by capital invested in foreign trade, and colonial trade in particular?”

Marx’s answer to that question is that a surplus profit can be realized on the basis of unequal exchange where labor is cheaper and can be sold above its price of production but below the average price in the home country. This situation however will be equalized as capitalism develops in the colonies “unless monopolies stand in the way.” Marx does not go beyond this since he is theorizing at a level of abstraction that does not take into account the actual colonial trade, not the degree to which monopolies prevent the equalization of profits. It is this shift up in level of analysis that Lenin makes in his application of Marx theory of rent in Imperialism.

While Marx argues that these CTs are contradictory in their application, we can see that he does allow that monopoly in foreign trade can prevent the equalization of profits and maintaining ‘surplus profits’. If we look at Lenin’s theory of Imperialism it is clear that he argues that monopoly is the main feature of Imperialism. Therefore the application of these CTs understood in relation to the highest stage of capitalism must operate on the basis of monopoly rather than competition. Hence the rate of profit is not equalized and surplus profits result. Thus monopoly gives rise to the state form in the imperialist epoch to defend and extend monopoly of territory, markets and raw materials etc.; the ‘international relations’ among states are now oppressor/oppressed relations; and the world market as ‘divided’ among the big capitalist powers and colonies, semi-colonies, and independent countries etc. Hence, the 3 volumes that Marx had planned to write to finish his analysis of capitalism at the level of the concrete, complex world of international relations and world market, had to wait for Lenin to write his pamphlet Imperialism: the Highest Stage of Capitalism. [page refs that follow are from Imperialism, NB means Lenin’s Notebooks on Imperialsm, Lenin, Collected Works, Vol 39]

Back to Russia

From this theory flows Lenin’s programmatic position on the national question. Finance capital flows from the imperialist powers to the non-imperialist countries. This means that there are imperialist oppressor countries and oppressed colonial and semi-colonial, and independent capitalist countries. Among the former is Russia. According to Lenin writing in Imperialism, Russia is an imperialist power of a special kind. Lenin speaks of three types of imperialist countries;

“firstly, young capitalist countries (America, Germany, Japan) whose progress has been extraordinary rapid; secondly, countries with an old capitalist development (France and Great Britain), whose progress lately has been much slower than that of the previously mentioned countries, and thirdly, a country most backward economically (Russia), where modern capitalist imperialism is enmeshed, so to speak, in a particularly close network of pre-capitalist relations.” [259]

By 1914 Russia is second only to Britain in the area and population of its Empire [258] which includes a protectorate in Mongolia, and a sphere of influence in Persia and Northern Manchuria. [NB 675] Lenin calculates that 96 million poor peasants and workers are oppressed by Russia. [NB 300]

“Russia’s final aims in Central and South Asia…can be reduced to a single formula. The final aim is to bring the states concerned –Armenia with Turkey, Persia, Afghanistan and the adjacent small states – under Russian influence, then under a Russian protectorate and ultimately incorporate them in the Russian Empire.” [NB 676]

Thus, owing to the formation of capitalist monopolies, the merging of bank and industrial capital has also made enormous strides in Russia.” [232].

And while Britain is using Egypt to produce cotton

“…the Russians are doing the same in their colony, Turkestan, because in this way they will be in a better position to defeat their foreign competitors, to monopolise the sources of raw materials and form a more economical and profitable textile trust in which all the processes of cotton production and manufacturing will be “combined” and concentrated in the hands of one set of owners.” [262]

However, Russia was a relatively minor imperialist power dominated by the finance capital of France, Germany and Britain which in 1913 use “holding banks” to extract around 75% of the surplus value created in Russia, dividing this booty among them (France, 55%, Germany 35%, Britain 10%). [232]  By 1910 the bulk of French capital exports to Russia were loans to the government rather than industrial production. German capital export was divided roughly equally between Europe (including Russia) and North America. [243] Russia’s largely foreign owned banks were ‘highly leveraged’ [i.e. loans far in excess of reserves] but were guaranteed by the Russian Finance Ministry and Credit Office. [NB 126-135]

Thus the Russian state acted as the agent of French loans, German extraction of raw materials, by means of a foreign policy of highly centralized expansion beyond its borders. Lenin quotes of Rosa Luxemburg (Junius) on this point.

“In Russia, imperialism is “not” so much “economic expansion” as “the political interest of the state” [NB 309]

While Luxemburg wants to give the priority to politics, Lenin shows that Russian imperialism is politics as concentrated economics. That is, Russian imperialism in 1915 has the general features of imperialism, but the role of the state is central in facilitating the fusion of banking and industrial capital to a degree more pronounced than in any of the other imperialist states because of the relative backwardness of the Russian economy. The state acted to use its power to dominate its capital export to its colonies and extraction of surplus-profits in return, as well as guarantee the interests of its imperialist ‘partners’.

Russia Today

If Russia was imperialist in 1915, notwithstanding its relative backwardness and “network of pre-capitalist social relations”, the dominance of French (and lesser extent German and British) finance capital, and given that the fusion of banking and industrial capital under the political control of the state was ‘developing’, might these same characteristics be found in the Russia of today where capitalism has been restored and where the Russian state plays a central role in organizing the economy? Is Russia a semi-colony, independent capitalist state, or imperialist state?

The critical factor is not gross DFI and extraction of surplus by other imperialists in Russia. Nor is it the monopoly character of the corporations. Nor is it the centrality of the state. Nor is it the extraction of surplus value inside Russia itself. These are characteristics of all capitalist economies in the epoch of imperialism especially weaker semi-colonial countries. The critical factor is the overproduction of capital  in Russia that poses a problem of insufficient opportunities for profitable investment, and that requires the export of surplus capital abroad to Russia’s ‘protectorates and semi-colonies as well as in other imperialist powers, in order to return surplus-profits.

The key indicator as to whether Russia is imperialist today is its net export of capital (and the net return of surplus profit).

According to a Deutsche Bank research report Russia’s Outward Investment (April, 2008)

In recent years, emerging market multinationals have increasingly expanded abroad to enhance their competitiveness, i.e. the ability to survive and to grow while maximising profits. This is achieved by saving costs, improving efficiency, applying new technologies as well as gaining access to new markets and resources.

Capital export to the Central Asian CIS states where Russia plays the dominant role in the exploitation of oil and gas has expanded to capital export to Europe, North America and Africa. In the biggest CIS states such as Kazakhstan and Turkmenistan the oil and gas resources are extracted by multinational joint ventures [JVs] and most are exported via Russia. In other words Russia has been able to maintain its dominant role in the central Asian former soviet Republics despite the independence of these states and the opening up of their economies to foreign investment.

According to Deutsche Bank:

The expansion of Russian corporations started predominantly in the member countries of the Commonwealth of Independent States (CIS) in the 1990s, moving on to developed markets and continuing in Africa more recently. Russian corporations established a prominent position close to their home market due to linkages already in place in the Soviet Union as well as a lack of foreign investors from elsewhere. Armenia, Belarus and Uzbekistan have accounted for the bulk of the Russian FDI flows to the CIS (see chart 7). Examples of Russian investment in the CIS include state-owned energy supplier RAO UES, which has invested in energy distribution chains in Armenia, Georgia, Moldova and Ukraine. In addition, Gazprom controls infrastructure assets in Kazakhstan and Moldova. Furthermore, Russian mobile telecom services providers are competing for the leadership in the CIS, having invested USD 1.38 bn in M&A [mergers and acquistions] since 2001 and accounting for 40% of the CIS cell phone market. However, the proportion of Russian direct investment flows to CIS member states shows a downward trend: it fell to 12% on average in the period 2004-2006 from 59% in 1997-99 (see chart 8). At the same time, the figures should probably be taken with a grain of salt, since they have been quite volatile. In 2004, Uzbekistan received 85% of total investment to the CIS, while Armenia accounted for 78% in 2005. In 2006, FDI flows seem to have been more equally distributed, with Tajikistan accounting for 39%, Kazakhstan for 33% and Ukraine for 26% of total CIS investment. In general, strong economic growth in the CIS should make them an attractive market for Russian direct investment in the future.

Under Putin the Russian state is taking a leading role in virtually all sectors of the economy. In oil and gas the state owns over 60% of the industry and the big players Gazprom and Rosneft are majority state owned. That in itself is not decisive, however most oil and gas projects are JVs where Russian firms have the controlling interest and the lion’s share of surplus value and foreign operators are minority shareholders providing new technology. Also Russian oil majors have swapped shares or merged with foreign firms to gain shares in downstream markets and get access to new resources abroad. Today Russia has a GDP of over $2 trillion and is rates 6th largest economy in the world. Its foreign reserves are around $60 billion, 3rd ranked in the world. But more important its outward DFI is around $200 billion and greater than the $200 inward DFI. However, 2/3rds of inward DFI is ‘round-tripping’ Russian capital returning via Cyprus and Luxembourg, which by definition is returing to Russia to earn higher profits than can be earned abroad. (Kari Hiuhto ‘Russian Tycoons largest DFIs.’ BBC 26/2/08.)

Conclusions

It is important to see that Lenin’s analysis in Imperialism extends Marx analysis of capitalism in Capital. The production of value and surplus value remains the basis of capitalist development. The laws of motion that Marx sketched on in the General Law of Capitalist Accumulation in Capital 1 and argued in Capital 1,2,3, were applied by Lenin to the concrete, complex level of reality that had been Marx’s intention in his unfinished volumes on the state, world market and international relations.

In Capital 3 Marx argued that the expansion of capitalism into the colonies would create opportunities for unequal exchange but would before long give rise to the equalization of capital and see the ‘normal’ operation of the law of value apply, and hence the ‘normal’ development of capitalism. Marx argues this in Capital 3 where the level of analysis is of many capitals, but where there is as yet no application of the role of competition to the actual functioning world market. Thus for Marx colonialism/imperialism cannot bypass the laws of motion and rescue capitalism from its fate as a transient mode of production, that is transitional to socialism. Extending his analysis to the concrete complex reality would not and could not alter these historical laws.

Lenin taking this analysis as his starting point and proves its conclusions at the level of the world market. Imperialism is an empirical test of Marx’s theory and comes up with the finding that it is the highest stage of capitalism transitional to socialism. It is so because the assumption of competition that Marx had made and held constant in Capital, once freed up and observed in concrete reality was now being superseded by monopoly. The market as the mechanism of the allocation of capital was now dominated by the locus of power concentrated in the hands of the institutions of centralized value – state monopoly capitalism. This meant that competition had been shifted from the market to the political sphere of international relations between rival states. What Marx saw as a feature of capitalism’s infancy, and an aberration in its maturity, monopoly, was now the terminal condition of capitalism in its dotage.

The world market then becomes subordinated to international relations among states of varying powers. The big imperialist powers are oppressor states dominating oppressed countries politically and economically. It is the political domination of oppressed countries that determines whether or not the surplus value generated in that country is accumulated internally or exported as “surplus profits”. In most cases the character of a particular country can be readily determined.

In the case of Russia as I have argued above, the answer is more difficult because of its ‘unique’ status prior to the revolution, and complicated due to its isolation from the capitalist world market during the period from the revolution to the restoration of capitalism in 1992. Nevertheless, Russia today has not only restored capitalism but has been able to retain the most resource rich former Socialist Republics within its sphere if interest. In that sense it has carved out a sphere of interest for its renewed imperialist expansion on the basis of its close ties formed within the USSR, without having to compete directly to re-divide the sphere of interests of its rival imperialist powers. It has used this empire on its borders to build an economic base for an aggressive expansion into the spheres of interest of the EU and the US and further into those imperialist heartlands. Russian imperialism is back with a vengeance.

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Written by raved

October 6, 2008 at 12:17 am

5 Responses

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  1. So we have an agreement that Russia is an imperialist state. Very food but there are two historical /Theoretical questions to answer and one concrete political one to answer.

    Historical/Theoretical

    A what has enabled Russia to become an imperialist state?

    We can ask the same question in a different way can China become an imperialist state( Or for this matter India or Saudi Arabia?)

    If the other three can become imperialist states it means that the all concept of imperialism as an epoch of decay of capitalism is wrong as the Third world countries can become imperialists.

    We think that China is not an imperialist and cannot be one due to the fact that unlike Russia it did not go through a workers revolution and can not use the achievements of such revolution where as Stalin could use the achievements to industrialize the country and turn it into an imperialist.

    This difference raise once again the question could a peasant army led by a counter revolutionary Stalinist leadership replace the working class and establish a workers state albeit deformed, or only the working class can establish a workers state?

    B When Did the workers state become a capitalist state. Unless you want to revise Lenin’s theory of the state you must agree that it could not be at the early 1990s as such a claim is a reformist concept of a social transformation without a civil war and the destruction of the state’s apparatus.

    C If Russia is an imperialist state and Georgia is an oppressed nation with a right wing regime, while when Georgia oppresses the national minorities the duty of revolutionaries is to defend them and when Russian imperial army intervene- it is the duty od Marxists who want to unite the working class of the region to struggle for the policy of revolutionary defeat or Russia and revolutionary defense for Georgia.

    Yossi Schwartz

    October 6, 2008 at 1:40 pm

  2. Sorry Yossi but we went over all this in several previous posts. You don’t raise anything new here.
    However, the reason I went back to the question of imperialism at its most basic was to look much more closely at why Lenin thought that Russia was imperialist in 1915, and then to apply that same method to characterising Russia today.

    raved

    October 11, 2008 at 9:45 am

  3. At the same period the FI issued a statement on the question of a military support for oppressed nation-China facing a war with an imperialist state Japan while the US is moving in The statement is providing a test to the question when imperialist aid to an oppressed nation fighting another imperialist becomes a war between two imperialists states.
    American imperialism, pursuing its “manifest destiny,” is preparing to take over British Empire positions in the Far East, including China, and to bring about the defeat of its Japanese rival in the Pacific. Washington plans to subdue Japan in war, to expel the Japanese imperialists from China, and to assume the overlordship of the Chinese people. Preparatory steps in this direction are the military, naval and aerial moves in the Pacific and the increased “aid” given to Chiang Kai-shek in the form of loans and war supplies.
    The revolutionists, while recognizing the necessity for China to accept American material aid in the war against Japan, cannot ignore the dangers hidden behind it. They must combat all suggestions that American imperialism is actuated by benevolence toward China and explain to the broad masses the real motive of this aid—the preparation of a new slavery for tomorrow.
    If the “friendly” imperialists demand payment for their aid with preferential economic rights, concessions, military bases, etc., the revolutionists must oppose such transactions, which in the end would mean the displacement in China of one imperialism by another, the change being paid for in the blood of the Chinese masses.
    Should the Chinese bourgeoisie make any such bargains, revolutionists must denounce them as a betrayal of China’s struggle for emancipation. But they will not “punish” Chiang Kai-shek by declaring themselves “defeatists” in China’s war against Japan. They will continue to stand for the defense of China in spite of, and against, the Chinese bourgeoisie…. Washington’s alliance with Chungking for war against Japan will afford the American imperialists the opportunity of covering their enterprise in China with democratic and liberationist phrases. But the American workers cannot entrust to their exploiters—the most powerful imperialists in the world—the task of liberating China from the clutches of imperialist Japan. The “defense” of China by American imperialism is in reality the preparation of a new slavery for that country. A “sacred union” of the American proletariat with its bourgeoisie in the name of China’s defense, and the abandonment of the proletarian struggle for power, would mean that tomorrow China would be plundered by Wall Street. American imperialism would be strengthened at the expense of the Chinese masses and the American working class. The surest guarantee of China’s independence, of her emancipation from social backwardness, and of her development toward socialism, is the Soviet United States of America. To prepare for this, the class struggle cannot be halted for a single minute.
    V
    If even with greatly increased American material aid the Chinese armies should prove unable speedily to expel the Japanese invaders, the American imperialists will seek to land their own troops in China and to take over China’s struggle against Japan through the creation of a single command under their own control. It will be the duty of the Chinese revolutionists to oppose the subordination of Chinese military operations to the strategy and war aims of American imperialism

    American Intervention in China—1941( document of the FI)

    Yossi Schwartz

    October 11, 2008 at 10:51 am

  4. […] the theory applies to Russia and China today. The problem is therefore framed in terms of whether Russia and China today are imperialist on Lenin’s criteria. A second important question that flows from […]

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