Living Marxism

Arising out of our analysis of the reasons for the emergence of China and Russia as new imperialist powers, a few other questions have arisen. If China and Russia can, why not Brazil, India, even South Africa? The answer is that semi-colonies cannot accumulate enough surplus value to become economically independent of existing imperialist powers. However, there may be one category of semi-colonies that could break out of this trap, or so some of the ‘left’ thinks. These are the European settler colonies. We think we can prove them wrong.

The epoch of imperialism arose in the late 19th century as the main European powers expanded beyond their borders to embark on colonial exploitation to escape the limits to capital accumulation. Marx in Vol 3 of Capital explained the need to find cheaper land, raw materials, and labour power to escape the limits of the Tendency of the Rate of Profit to Fall (TRPF).

At the time Lenin wrote his pamphlet, Imperialism –The Highest Stage of Capitalism, in 1915 he envisaged a world economy in the process of being divided among all the imperialist powers into rival “spheres of interest”. Competition to expand further would mean more wars unless the workers of the world rose up and overthrow their imperialist ruling classes.

Given this battle to re-divide the world by the imperialist powers, none of the colonies would be able to break free of dependency upon imperialism short of socialist revolutions. Failing that, they would remain colonies, semi-colonies or ‘neo-colonies’. Their political independence was rendered inoperative because of their economic dependency.

European Settler Colonies

One category of colonies, European Settler colonies, may be the exception to this rule. They seem to have more real political sovereignty and control over the economy than other semi-colonies. Thus the US, Canada, Australia, New Zealand, South Africa, Brazil and Israel are often held up as countries that were able to make the transition from settler colony to imperialist powers (if relatively small), while the vast majority of colonies that were not settled by Europeans, remained trapped in neo-colonial dependency.

Yet if we look at these countries, only the US was able to become a major imperialist power. The fate of the others is less clear cut. The reason for this is that the US had a complete national revolution where it broke its ties of political and economic dependence on its former colonial master, Britain. It could impose tariffs on British goods and protect local manufacturers until they were big enough to compete. It also had a Civil War that eliminated the barriers of backward pre-capitalist modes of production.

All the other countries settled by Europeans, however, did not have wars of independence against their colonial masters (except in Latin America where the wars of independence fell short of economic independence from European capitalist powers). While they had a limited self-government that enabled them to protect their domestic economies, this was insufficient to prevent imperialism from retaining a large share of national surplus-value and limiting national capital accumulation. Nevertheless, some argue that they were sufficiently ‘decolonised’ in the 20th Century to achieve economic independence and become minor imperialist powers.

We can test the proposition that political ‘decolonisation’ in the 30 years between the Great Depression and end of the post war boom enabled the former settler colonies to resist economic ‘recolonisation’ during the neo-liberal years from the 1970s to the present. That is, to what extent did national economic development enable these countries to become sufficiently ‘independent’ so as to resist neo-liberal ‘recolonisation’?

We can test this fairly easily in the case of the weakest states, New Zealand, South Africa and Australia. These settler colonies very early became part of an imperial division-of-labour where they produced raw materials for export and imported finished goods from the imperialist motherland. Tariff protection enabled a degree of domestic manufacturing but this always remained relatively limited mainly based on ‘branch plants’ owned by imperialist capital and financed by imperialist banks. In other words, the ‘decolonisation’ process was largely illusory as surplus value was siphoned off by imperialism leaving these countries relatively underdeveloped and economically dependent.

NZ, South Africa and Australia

There is no question that NZ was very quickly ‘recolonised’ from the early 1970s as domestic capital sought to modernise and compete internationally. The ‘neo-liberal’ counter-revolution during the Fourth Labour Government 1984-89, virtually destroyed the basis of economic protectionism built up over 40 years within 5 years.  

NZ’s Global Links gives a good picture of the surplus-value siphoned out of NZ by international finance capital. Ignoring this overwhelming evidence most of the left in NZ says that NZ is a small imperialist power on the basis of its predatory role in the South Pacific and historic high living standards.

In the case of South Africa, we have written about its dependence on imperialism, Anglo-American historically, but now increasingly that of China. We reject any notion that South Africa is imperialist by any conception.

Nor is it ‘sub-imperialist’ in the terms of the BRIC intelligentsia which adds to South Africa’s semi-colonial dependence, measure of ‘independence’ earned by a share of the surplus for performing a ‘subcontracted’ role as manager of imperialist affairs in the whole of Africa.

Australia, however, is viewed by many on the left as a minor imperialism. This includes ourselves (CWG NZ) since the 1990s. Australia’s protected manufacturing allowed a weak national bourgeois fraction to emerge, alongside the traditional pastoral and mining bourgeoisie. Australia was more resilient than NZ to neo-liberal deregulation as it was not dependent on protected manufacturing alone and could sustain growth in the late 80s and 90s due to its booming mining industry.

However, the neo-liberalisation of Australia under Hawke and Howard saw this national bourgeoisie largely swallowed up by international finance capital. And while NZ banks were all Australian owned, the big four Australian banks became controlled by HSBC, JPMorgan, Citigroup and BNP Paridas as the shareholders.

As one commentator puts it:

“Both commercial and mining companies’ ownership are dominated by HSBC Nominees, JP Morgan Nominees, and Citibank Nominees as the top three shareholders of most companies. If one examines company directorships there is a tight cross-linking across commerce, banking and mining in Australia today. Commerce, banking and mining are now part of an oligopoly.”

We conclude that Australia developed behind protectionist barriers for the period from the 1930s to 1980s yet failed to achieve economic independence. Its national bourgeoisie remained weak and dependent on international finance capital. The hallmark of imperialism is the TRPF and the over-accumulation of capital that must be exported to gain access to cheap land, raw materials and labour power.

Australia has failed to do this on its own account. Its national finance capital is dominated by EU, US and now also increasingly by Chinese finance capital. In the key growth sector of mining, the three largest “Australian” corporations, BHP Billiton is 75%, Rio Tinto 80%, and Xtrata 100% foreign owned. The monopoly rent from mining has therefore been largely siphoned off by international finance capital.

So the excess flow of FDI into Australia over OFDI flowing out of Australia reflects the dominant share of super-profits accruing to the international finance capital of the major banks and corporations. This dominance was demonstrated by the defeat of the Rudd Resource Super Profits tax that gifted $billions to the foreign owners of the mining industry.

The OECD says that Australian federal revenue from mining profits is the lowest in the world. The foreign shareholders get about half of the “value added”: “For every $100 in value added by the mining industry, state governments get $6 and employees get $20. This leaves a profit of $74. Of that amount, the federal government gets $14, foreign shareholders get $48, and Australian resident shareholders get $12.” It seems then that far from breaking out of semi-colonial dependency into mini-imperialism, Australia has been increasingly ‘taken over’ by international finance capital and Chinese monopolies.

Australia as “sub-imperialist”?

Various left groups call Australia small, minor, mini, regional, or junior imperialism. Their method is empirical in toting up the foreign investment figures and pointing to Australia’s ‘policing’ role in partnership with Britain or the US.

Ashley Lavelle, in “Who Owns Australia”, 2001, argues against the radical nationalist line that Australia is being taken over by foreign investors. Australia is an “advanced capitalist economy” as only 25% of Australian firms are owned and controlled by foreign capital. This means that the main enemy is not foreign capital, but the Australian ruling class. In the two main sectors of the economy we find 9% penetration in mining and 30% penetration in finance. Even in 2000 this is enough concentration of finance capital to dominate the Australian economy.

The Democratic Socialist Party (DSP) joins the pack yapping at the economic nationalists heels. It claims that Australia is a “small, regional imperialist power”, a “junior partner of Washington” with its own “sphere of influence” such as Melanesia and East Timor.

Sandra Bloodworth of the International Socialist Organisation, writing in 2004, says Australia is a minor but “regional imperialist power”. Australia joined the war on terror in support of the USA and acted to fulfil its ‘regional’ policing role in the South Pacific, for example in the Solomon Islands. Australia profits from investments in this region, e.g. in Papua New Guinea mining and owns 50% of Fijian business. Another left group accuses Australia of mini-imperialism in exploiting and oppressing East Timor and seizing its oil resources in the Timor Sea.

Tom Bramble of Socialist Alternative writing in the Marxist Left Review, 2012, “Australian Imperialism and the rise of China” aligns himself with other left academics who speak of Australia and Canada as ‘secondary’ imperialisms. Bramble recognises the rise of imperialist China has major consequences for Australian trade and its relationship with the US. But China has been imperialist for some time according to the state capitalists like Bramble.

Yet Australia’s dependence on the US and increasingly China, does not cause him to challenge the prevailing Australian Cliffite (state capitalist) and DSP view on Australian junior imperialism. He does not question Australia’s obvious subordinate role to UK and US finance capital and as an exporter of minerals to China. He fails to register the significance that the Australian mining industry is largely foreign owned, increasingly favouring China. Or that Australia’s regional policing role has been overtaken by its integration under Gillard and Abbott as a forward base for the US military.

The Northite ICFI (WSWS) writing in 2014 sees Australia as imperialist despite its political subservience to US imperialism. WSWS argues that after the Global Financial Crisis and the 2010 ‘coup’ to remove Labour Prime Minister Rudd (because he was in favour of US and China friendship and the resource tax), Australia has been drawn completely into the US “pivot to Asia”.

The Abbott Gov’t is even closer to the US. The result is Australia coming under direct domination by the US dictating a militarist foreign policy and an austerity domestic policy which it calls a ‘counter-revolution’. The Shorten Labor Party is also committed to war and austerity. But for the WSWS Russia and China are not imperialist, and Australia despite its dependence on the US remains a minor imperialist power.

It’s clear that while the case made for Australia’s economic independence is very weak, most of the left regard Australia as a junior partner of US capital on the strength of its imperialist policing role. Therefore, we can file the various labels for Australian minor imperialism under ‘sub-imperialist’ which is the vogue term on the BRIC left to mean a minor power that serves imperialism and is paid in a share of the subcontracted colonial tribute.

We have argued that the label “sub-imperialist” is meaningless since it represents a distributional definition of oppression which looks at shareholdings on stock markets and living standards but ignores the fundamental reality that the bulk of surplus-value produced is expropriated by international finance capital at its source, even if some of it flows back as kickbacks to the Australian capitalist class. A good example of a kickback for Australia’s military bloc with the US is Rio Tinto and BHP Billiton licence to mine public land in the US.

Reviewing the evidence of ‘takeover’ we think that we were wrong to get taken in by the flash statistics of economic independence when foreign ownership of the key economic sectors has always been British and increasingly US. With China being welcomed to buy up more mining interests and privatised state assets by the Rudd Government it seems that Australia’s economic dependence must increase. While some of the ‘left’ have noted the growing influence of China and US, this influence is not taken to its logical conclusion.

Australia’s political sovereignty is up for sale with the US FTA and the impending TPPA. China now has a FTA with Australia and is moving to invest heavily. Australia’s independent ‘policing’ role has been overtaken by US bases in Darwin and subordinated to RIMPAC in the military containment of China. It is the sausage in the sandwich as the hegemonic US and the rapidly rising China flex their muscles to contest control of the Asia Pacific region.

Conclusion
 
Our conclusion is that for all Australia’s so-called “sub-imperialist” role as South Pacific “police” of Britain and US has always been a form of dependency and is now clearly exposed by the growing rivalry between China and US imperialism. Even hard bitten liberal journos can see that this rips the Australian political elite apart as its ruling class tries to serve two imperialist masters at the same time.

The political consequences of this reality are that Australian workers have the task of kicking out their own ruling class that acts as a client of the US and China, to take the leadership of the struggle to win national independence from both US and Chinese imperialism, and create a Socialist Republic of Australia within a Socialist United States of Asia Pacific! 

To be Continued: The USA and Canada