Modern Marxism and Imperialism

Marx and Engels (1848) stated that a modern capitalist society had become a two class system. The capital owning, rich Bourgeoisie, and the labouring, poor proletariat. Initially Bourgeoisie eliminated the Feudal guild system in exchange for a system whereby workers could exchange their labour for money in the form of wages. The classes initial starting points were defined by primitive accumulation, a subject that Harvey (2000) writes a criticism of, stating that the Manifesto lacks depth in this area. Primative accumulation was essentially any appropriation of capital that led to the initial endowments across society.  

In a bourgeois society the Proletariat only exist to sell their labour. They are treated as a commodity, without right and require maintenance in the form of wages to sustain them, but they exist only to further the productivity of capital, and earn profit for the bourgeoisie. They become like a part of the machine they work with and all workmanship loses its appeal. The bourgeoisie compete between one another in an attempt to expand the market they sell their goods in; eventually this competition forces them to lower prices. Lowering prices reduces their margins. To maintain competitiveness the bourgeoisie lower costs, as the main cost they face is the wages to the proletariat they seek to reduce this cost by lowering salaries and cutting jobs. Inefficient firms begin to fail, leading low level bourgeoisie (shopkeepers etc) to fall into the proletariat increasing the labour supply and further diminishing its price. Labour starts to concentrate in centres where work is available, leading to urbanisation (Harvey 2000)

Yet labour is not like capital, reducing the disposable income of workers on a microeconomic scale leads to problems on a macro scale. Effective demand for goods falls and a crisis of over accumulation occurs in which workers cannot afford to buy the goods they sell their labour to produce and the economy comes to crisis. Excess capital and labour stocks form, but with no seemingly productive means of interacting. In such a case there are two solutions: either the destruction of these factors, by the destruction of capital or the starvation of labour forces, or to conquest new markets.

This conquest of new markets manifested itself in the form of imperialism (Hobson 1902, Lenin 1916). Imperialism is the asserting of some form authority over an empire or nation.  The theory states that competition lead to capital becoming increasingly concentrated in the hands of smaller number of people. Monopolies begin to form which can use their market power to enforce low wages. Excess capital begins to build up and the bourgeoisie look for labour outlets to make this capital productive by exploiting emerging nations. Furthermore governments can use patriotism and underling discriminatory views to appease it’s proletariat into passive acceptance of their poverty, by shifting the blame to those in its colonies. Lenin went even further than this and stated that governments in core countries could afford to pay off members of its own proletariat to enforce inaction.   

The two authors however disagree on the solution to the problem. Hobson argued that the problem could be avoided by the application of policy which addressed this false economy of distribution. By taxing the rich capitalist bourgeoisie and redistributing this to the proletariat economies can stave off the need for imperialism as there is still effective demand for goods provided on the national scale. Keynesian economics comes from this analysis and leads to the logical need for a welfare state.

Lenin however said that monopoly is an inherent tendency and hence so was imperialism. The socialisation of production would eventually lead to socialist revolution. But this could not occur in the core countries due to the rentier bribes to proletariat. Hence it must start in peripheral regions. This analysis created the Bolshevik revolution in Russia.

Authors such as Pantich (2009) and Eagleton (2011) write about how theories of Marx can be applied to the contemporary crisis. Consumer demand was fuelled by increasing in cheap borrowing staving off crisis of overaccumulation for a number of years while the movement of society towards a more isolated and individualised approach prevented the potential revolution marx and lenin outlined. While traditional imperialism was not observed in the modern crisis there were instances where foreign powers exerted control over other nations. Invasions of Iraq and Afghanistan by the US, IMF lending for specific marketized projects in Africa, Asia and Latin America, and offshoring of production by multinational corporations all exists as examples of contemporary imperialism

Harvey (2001) wrote about a “spatial fix” which could be used to prevent capitalist crises. In this context the fix refers to the terms meaning with reference to drug addicts. Who need a fix to return to normal functioning. Some kind of geographical fix could be used to prevent the crisis of over accumulation, imperialism was the fix in the 1900s and the solution was the new imperialism outlined above in the latter half of the 20^th century. If lack of effective demand was about to cause a crisis then expanding into new markets was the fix, if surplus capital is the cause, then investment abroad is the solution. However, as with the drug addict, the fix is not permanent. The craving soon returns and the capitalist economy needs another fix to avert crisis.