D.5 What causes imperialism?

In a word: power. Imperialism is the process by which one country dominates another directly, by political means, or indirectly, by economic means in order to steal its wealth (either natural or produced). This, by necessity, means to exploit the exploitation of working people in the dominated nation and can also aid the exploitation of working people elsewhere. As such, imperialism cannot be considered in isolation from the dominant economic and social system. Fundamentally the cause is the same inequality of power, which is used in the service of exploitation.

As we will discuss in the following sections, imperialism has changed over time, particularly during the last two hundred years (where its forms and methods have evolved with the evolving needs of capitalism). But even in the classic days of empire building imperialism was driven by economic forces and needs. In order to make one's state secure, in order to increase the wealth available to the state, its ruling bureaucracy and its associated ruling class, it had to be based on a strong economy and have a sufficient resource base. By increasing the area controlled by the state, one increased the wealth available.

States by their nature, like capital, are expansionist bodies, with those who run them always wanting to increase the range of their power and influence. This can be best seen from the massive number of wars that have occurred in Europe over the last 500 years, as nation-states were created by Kings declaring lands to be their private property. Moreover, this conflict did not end when monarchies were replaced by more democratic forms of government. As Bakunin argued:

"we find wars of extermination, wars among races and nations; wars of conquest, wars to maintain equilibrium, political and religious wars, wars waged in the name of 'great ideas' . . . And what do we find beneath all that, beneath all the hypocritical phrases used in order to give these wars the appearance of humanity and right? Always the same economic phenomenon: the tendency on the part of some to live and prosper at the expense of others . . . the strong men who direct the destinies of the State know only too well that underlying all those wars there is only one motive: pillage, the seizing of someone else's wealth and the enslavement of someone else's labour." [The Political Philosophy of Bakunin, p. 170]

However, while the economic motive for expansion is generally the same, the economic system which a nation is based on has a definite impact on what drives that motive and nature of that imperialism. Thus the empire building of ancient Rome or Feudal England has a different economic base (and so driving need) than, say, nineteenth century Germany and England or twentieth century (or twenty-first century) United States. Here we will focus mainly on modern capitalist imperialism as it is the only one relevant in the modern world.

Capitalism, by its very nature, is growth-based and so is characterised by the accumulation and concentration of capital. Companies must expand in order to survive competition in the marketplace. This, inevitably, sees a rise in international activity and organisation as a result of competition over markets and resources within a given country. By expanding into new markets in new countries, a company can gain an advantage over its competitors as well as overcome limited markets and resources in the home nation.

Hence capitalism is inevitably imperialistic. Regardless of recent claims, capital has always been global. International trade has always existed and, indeed, has always played a key role in its development (mercantilism, for example, manipulated international trade to enhance the accumulation of capital). The capitalist system is the most adaptable and voracious in history. From its beginning its components (individual companies, states and capital) have been driven by the need to constantly expand or die; the changes that have occurred in recent years are an expression of this need. As Bakunin argued:

"just as capitalist production and banking speculation, which in the long run swallows up that production, must, under the threat of bankruptcy, ceaselessly expand at the expense of the small financial and productive enterprises which they absorb, must become universal, monopolistic enterprises extending all over the world -- so this modern and necessarily military State is driven on by an irrepressible urge to become a universal State. . . . Hegemony is only a modest manifestation possible under the circumstances, of this unrealisable urge inherent in every State. And the first condition of this hegemony is the relative impotence and subjection of all the neighbouring States." [Op. Cit., p. 210]

Therefore, economically and politically, the imperialistic activities of both capitalist and state-capitalist (i.e. the Soviet Union and other "socialist" nations) comes as no surprise. The changing nature of modern imperialism can be roughly linked to developments within the capitalist economy (see next section). However, the growth of big business to gain advantage in and survive competition is the key, as the size of companies ensure that they have to be international.

As power depends on profits within capitalism, this means that modern imperialism is caused more by economic factors than purely political considerations (although, obviously, this factor does play a role). As will be seen in section D.5.1, imperialism serves capital by increasing the pool of profits available for the imperialistic country in the world market as well as reducing the number of potential competitors. As Kropotkin stressed:

"[C]apital knows no fatherland; and if high profits can be derived from the work of Indian coolies whose wages are only one-half of those of English [i.e. British] workmen [or women], or even less, capital will migrate to India, as it has gone to Russian, although its migration may mean starvation for Lancashire and Dundee." [Fields, Factories and Workshops, p. 57]

Therefore, capital will travel to where it can maximise its profits -- regardless of the human or environmental costs at home or in the foreign land. This is the economic base for imperialism, to ensure that any trade conducted benefits the stronger party more than the weaker one. Whether this trade is between nations or between classes is irrelevant, the aim of imperialism is to give business an advantage on the market. By travelling to where labour is cheap and the labour movement weak (usually thanks to dictatorial regimes), environmental laws few or non-existent, and little stands in the way of corporate power, big business can maximise its profits. Moreover, the export of capital allows a reduction in the competitive pressures faced by companies in the home markets (at least for short periods).

This has two effects. Firstly, the industrially developed nation (or, more correctly corporation based in that nation) can exploit less developed nations. In this way, the dominant power can maximise for itself the benefits created by international trade. If, as some claim, trade always benefits each party, then imperialism allows the benefits of international trade to accrue more to one side than the other. Secondly, it gives big business more weapons to use to weaken the position of labour in the imperialist nation. This, again, allows the benefits of trade (this time the trade of workers liberty for wages) to accrue to more to business rather than to labour.

How this is done and in what manner varies and changes, but the aim is always the same -- exploitation.

This exploitation can be done in many ways. For example, allowing the import of cheaper raw materials and goods, the export of goods to markets sheltered from foreign competitors and the export of capital from capital-rich areas to capital-poor areas. The investing of capital in less industrially developed countries allows the capitalists in question to benefit from lower wages, for example, or from fewer environmental and social controls and laws. All these allow profits to be gathered at the expense of the working people of the oppressed nation (the rulers of these nations generally do well out of imperialism, as would be expected). The initial source of exported capital is, of course, the exploitation of labour at home but it is exported to less developed countries where capital is scarcer, the price of land lower, wages lower, and raw materials cheaper. These factors all contribute to enlarging profit margins:

"The relationship of these global corporations with the poorer countries had long been an exploiting one . . . Whereas U.S. corporations in Europe between 1950 and 1965 invested $8.1 billion and made $5.5 billion in profits, in Latin America they invested $3.8 billion and made $11.2 billion in profits, and in Africa they invested $5.2 billion and made $14.3 bullion in profits." [Howard Zinn, A People's History of the United States, p. 556]

Betsy Hartman, looking at the 1980s, concurs. "Despite the popular Western image of the Third World as a bottomless begging bowl," she observes, "it today gives more to the industrialised world than it takes. Inflows of official 'aid' and private loans and investments are exceeded by outflows in the form of repatriated profits, interest payments, and private capital sent abroad by Third World Elites." [quoted by George Bradford, Woman's Freedom: Key to the Population Question, p. 77]

In addition, imperialism allows big business to increase its strength with respect to its workforce in the imperialist nation by the threat of switching production to other countries or by using foreign investments to ride out strikes (also see section D.5.3). While the "home" working class are still exploited and oppressed, their continual attempts at organising and resisting their exploiters proved more and more successful. As such, imperialism (like capitalism) is not only driven by the need to increase profits (important as this is, of course), it is also driven by the class struggle -- the need for capital to escape from the strength of the working class in a particular country (this process played a key role in the rise of globalisation -- see section D.5.3). From this perspective, the export of capital can be seen in two ways. Firstly, as a means of disciplining rebellious workers at home by an "investment strike" (capital, in effect, runs away, so causing unemployment). Secondly, as a way to increase the 'reserve army' of the unemployed facing working people in the imperialist nations by creating new competitors for their jobs (i.e. dividing, and so ruling, workers by playing one set of workers against another). Both are related, of course, and both seek to weaken working class power by the fear of unemployment.

Thus imperialism, which is rooted in the search from surplus profits for big business, is also a response to working class power at home. The export of capital is done by emerging and established transnational companies to overcome working class consciousness which is often too advanced for heavy exploitation (i.e. huge profit margins), and finance capital can make easier and bigger profits by investing productive capital elsewhere.

Imperialism has another function, namely to hinder or control the industrialisation of other countries. Such industrialisation will, of course, mean the emergence of new capitalists, who will compete with the existing ones both in the "less developed" countries and in the world market as a whole. Imperialism, therefore, reduces competition on the world market. As we discuss in the next section, the nineteenth century saw the industrialisation of many European nations as well as America, Japan and Russia. However, this process of industrialisation conducted by other countries had a drawback. It means that more and more competitors can entry the world market. Moreover, as Kropotkin noted, they has the advantage that the "new manufacturers . . . begin where" the old have "arrived after a century of experiments and groupings" and so they "are built according to the newest and best models which have been worked out elsewhere." [Op. Cit., p. 32 and p. 49] Hence the need to stop new competitors, which was achieved by colonialism in the late nineteenth century:

"Industries of all kinds decentralise and are scattered all over the globe; and everywhere a variety, an integrated variety, of trades grows, instead of specialisation . . . each nation becomes in its turn a manufacturing nation . . . For each new-comer the first steps only are difficult . . . The fact is so well felt, if not understood, that the race for colonies has become the distinctive feature of the last twenty years [Kropotkin is writing in 1912]. Each nation will have her own colonies. But colonies will not help." [Op. Cit., p. 75]

As such, imperialism can also be considered as a means of hindering (or controlling) industrialisation, of hindering the development of new competitors on the world market to existing big business operating on the international market. It also aids the bargaining position of business by pitting the workers in one country against another, so while they are being exploited by the same set of bosses, those bosses can use this fictional "competition" of foreign workers to squeeze concessions from workers at home.

Imperialism hinders industrialisation in two ways. The first way was direct colonisation. The second is by indirect means -- namely the extraction of profits by international big business.

A directly dominated country can be stopped from developing industry and be forced to specialise as a provider of raw materials. This was the aim of "classic" imperialism, with its empires and colonial wars. This approach has been superseded by indirect means (see next section).

When capital is invested in foreign nations, the surplus value extracted from the workers in those nations are not re-invested in those nations. Rather a sizeable part of it returns to the base nation of the corporation (in the form of profits for that company). Indeed, that is to be expected as the whole reason for the investment of capital in the first place was to get more out of the country than the corporation put into it. Instead of this surplus value being re-invested into industry in the less-developed nation (as would be the case with home-grown exploiters, who are dependent on local markets) it ends up in the hands of foreign exploiters who take them out of the dominated country. This means that industrial development as less resources to draw on, making the local ruling class dependent on foreign capital and its whims. By means of colonisation, the imperialist powers ensure that the less-developed nation stays that way -- so ensuring one less competitor as well as favourable access to raw materials and cheap labour.

Globalisation can be seen as an intensification of this process. By codifying into international agreements the ability of corporations to sue nation states for violating "free trade," the possibility of new competitor nations developing is weakened. Industrialisation will be dependent on transnational corporations and so development will be hindered and directed to ensure corporate profits and power. Unsurprisingly, those nations which have industrialised over the last few decades (such as the East Asian Tiger economies) have done so by using the state to protect industry and control international finance.

The new attack of the capitalist class ("globalisation") is a means of plundering local capitalists and diminish their power and area of control. The steady weakening and ultimate collapse of the Eastern Block (in terms of economic/political performance and ideological appeal) also played a role in this process. The end of the Cold War meant a reduction in the space available for local elites to manoeuvre. Before this local ruling classes could, if they were lucky, use the struggle between US and USSR imperialism to give them a breathing space in which they could exploit to pursue their own agenda (within limits, of course, and with the blessing of the imperialist power in whose orbit they were in). The Eastern Tiger economies were an example of this process at work. The West could use them in the ideological conflict of the Cold War as an example of the benefits of the "free market" (not that they were) and the ruling elites, while maintaining a pro-west and pro-business environment (by force directed against their own populations, of course), could pursue their own economic strategies. With the end of the Cold War, this factor is no longer in play and these elites are now "encouraged" (by economic blackmail via the World Bank and the IMF) to embrace US economic ideology. Just as neo-liberalism attacks the welfare state in the Imperialist nations, so it results in a lower tolerance of local capital in "less developed" nations.

Imperialism, then, is basically the ability of countries to globally and locally dictate trade relations and investments with other countries in such a way as to gain an advantage over the other countries. This can be done directly (by means of invasion and colonies) or indirectly (by means of economic and political power). Which method is used depends on the specific circumstances facing the countries in question. Moreover, it depends on the balance of class forces within each country as well (for example, a nation with a militant working class would be less likely to pursue a war policy due to the social costs involved). However, the aim of imperialism is always to enrich and empower the capitalist and bureaucratic classes.

This struggle for markets and resources does, by necessity, lead to conflict. This may be the wars of conquest required to initially dominate an economically "backward" nation (such as the US invasion of the Philippines, the conquest of Africa by West European states, and so on) or maintain that dominance once it has been achieved (such as the Vietnam War, the Algerian War, the Gulf War and so on). Or it may be the wars between major imperialist powers once the competition for markets and colonies reaches a point when they cannot be settled peacefully (as in the First and Second World Wars).

As Kropotkin argued, "men no longer fight for the pleasure of kings, they fight for the integrity of revenues and for the growing wealth . . . [for the] benefit of the barons of high finance and industry . . . [P]olitical preponderance . . . is quite simply a matter of economic preponderance in international markets. What Germany, France, Russia, England, and Austria are all trying to win . . . is not military preponderance: it is economic domination. It is the right to impose their goods and their customs tariffs on their neighbours; the right to exploit industrially backward peoples; the privilege of building railroads . . . to appropriate from a neighbour either a port which will activate commerce, or a province where surplus merchandise can be unloaded." He stressed that "[w]hen we fight today, it is to guarantee our great industrialists a profit of 30%, to assure the financial barons their domination at the Bourse [stock-exchange], and to provide the shareholders of mines and railways with their incomes." [Words of a Rebel, pp. 65-6]

In summary, imperialism has always served the interests of Capital. If it did not, if imperialism was bad for business, the business class would have opposed it. This partly explains why the colonialism of the 19th century is no more (the other reasons being social resistance to foreign domination, which obviously helped to make imperialism bad for business as well, and the need for US imperialism to gain access to these markets after the second world war). There are now more cost-effective means than direct colonialism to ensure that "underdeveloped" countries remain open to exploitation by foreign capital. Once the costs exceeded the benefits, colonialist imperialism changed into the neo-colonialism of multinationals, political influence, and the threat of force (see next section). Moreover, we must not forget that any change in imperialism relates to changes in the underlying economic system.

Obviously anarchists are opposed to imperialism and imperialistic wars. The Cuban anarchists spoke for all of us when they stated that they were "against all forms of imperialism and colonialism; against the economic domination of peoples . . . against military pressure to impose upon peoples political and economic system foreign to their national cultures, customs and social systems . . . We believe that among the nations of the world, the small are as worthy as the big. Just as we remain enemies of national states because each of them hold its own people in subjection; so also are we opposed to the super-states that utilise their political, economic and military power to impose their rapacious systems of exploitation on weaker countries. As against all forms of imperialism, we declare for revolutionary internationalism; for the creation of great confederations of free peoples for their mutual interests; for solidarity and mutual aid." [quoted by Sam Dolgoff, The Cuban Revolution: A Critical Perspective, p. 138]

It is impossible to be free while dependent on the power of another. If the capital one uses is owned by another country, one is in no position to resist the demands of that country. If you are dependent on foreign corporations and international finance to invest in your nation, then you have to do what they want (and so the ruling class will suppress political and social opposition to please their backers as well as maintain themselves in power). To be self-governing under capitalism, a community or nation must be economically independent. The centralisation of capital implied by imperialism means that power rests in the hands of a few others, not with those directly affected by the decisions made by that power. Thus capitalism soon makes a decentralised economy, and so a free society, impossible. As such, anarchists stress decentralisation of industry and its integration with agriculture (see section I.3.8) within the context of socialisation of property and workers' self-management of production. Only this can ensure that production meets the needs of all rather than the profits of a few.

Moreover, anarchists also recognise that economic imperialism is the parent of cultural and social imperialism. As Takis Fotopoulos argues, "the marketisation of culture and the recent liberalisation and deregulation of markets have contributed significantly to the present cultural homogenisation, with traditional communities and their cultures disappearing all over the world and people converted to consumers of a mass culture produced in the advanced capitalist countries and particularly the USA." [Towards an Inclusive Democracy, p. 40]

This does not mean that anarchists blindly support national liberation movements or any form of nationalism. Anarchists oppose nationalism just as much as they oppose imperialism -- neither offer a way to a free society (see sections D.6 and D.7 for more details). Anarchists, therefore, are not against globalisation or international links and ties as such. Far from it, we have always been internationalists and are in favour of "globalisation from below," one that respects and encourages diversity and difference while sharing the world. However, we have no desire to live in a world turned bland by corporate power and economic imperialism. As such, we are opposed to capitalist trends which commodify culture as it commodifies social relationships. We want to make the world an interesting place to live in and that means opposing both actual (i.e. physical, political and economic) imperialism as well as the cultural and social forms of it.

D.5.1 How has imperialism changed over time?

The development of Imperialism cannot be isolated from the general dynamics and tendencies of the capitalist economy. Imperialist-capitalism, therefore, is not identical to pre-capitalist forms of imperialism, although there can, of course, be similarities. As such, it must be viewed as an advanced stage of capitalism and not as some kind of deviation of it. This kind of imperialism was attained by some nations, mostly Western European, in the late 19th and early 20th-century. Since then it has changed and developed as economic and political developments occurred, but it is based on the same basic principles.

However, it is useful to describe the history of capitalism in order to fully understand the place imperialism holds within it, how it has changed and what functions it provides.

Imperialism has important economic advantages for those who run the economy. As the needs of the business class change, the forms taken by imperialism also change. We can identify three main phases: classic imperialism (i.e. conquest), indirect (economic) imperialism, and globalisation. We will consider the first two in this section and globalisation in section D.5.3. However, for all the talk of globalisation in recent years, it is important to remember that capitalism has always been an international system, that the changing forms of imperialism reflect this international nature and that the changes within imperialism are in response to developments within capitalism itself.

Capitalism has always been expensive. As we noted in the last section, this is unsurprising as it is based on "compete or die," which becomes "grow or die." Under mercantilism, for example, the "free" market was nationalised within the nation state while state aid was used to skew international trade on behalf of the home elite and favour the development of capitalist industry. This meant using the centralised state (and its armed might) to break down "internal" barriers and customs which hindered the free flow of goods, capital and, ultimately, labour. We should stress this as the state has always played a key role in the development and protection of capitalism. The use of the state to, firstly, protect infant capitalist manufacturing and, secondly, to create a "free" market (i.e. free from the customs and interference of society) should not be forgotten, particularly as this second ("internal") role is repeated "externally" through imperialism. Needless to say, this process of "internal" imperialism within the country by the ruling class by means of the state was accompanied by extensive violence against the working class (also see section F.8).

So, state intervention was used to create and ensure its dominant position at home by protecting it against foreign competition and the recently dispossessed working class. This transition from feudal to capitalist economy enjoyed the active promotion of the state authorities, whose increasing centralisation ran parallel with the growing strength and size of merchant capital. It also needed a powerful state to protect its international trade, to conquer colonies and to fight for control over the world market. The absolutist state was used to actively implant, help and develop capitalist trade and industry.

The first industrial nation was Britain. After building up its industrial base under mercantilism and crushing its rivals in various wars, it was in an ideal position to dominate the international market. It embraced free trade as its unique place as the only capitalist/industrialised nation in the world market meant that it did not have to worry about competition from other nations. Any free exchange between unequal traders will benefit the stronger party. Thus Britain, could achieve domination in the world market by means of free trade. This meant that goods were exported rather than capital.

Faced with the influx of cheap, mass produced goods, existing industry in Europe and the Americas faced ruin. As economist Nicholas Kaldor notes, "the arrival of cheap factory-made English goods did cause a loss of employment and output of small-scale industry (the artisanate) both in European countries (where it was later offset by large-scale industrialisation brought about by protection) and even more in India and China, where it was no so offset." [Further Essays on Applied Economics, p. 238] The existing industrial base was crushed, industrialisation was aborted and unemployment rose. These countries faced two possibilities: turn themselves into providers of raw materials for Britain or violate the principles of the market and industrialise by protectionism.

In many nations of Western Europe (soon to be followed by the USA and Japan), the decision was simple. Faced with this competition, these countries utilised the means by which Britain had industrialised -- state protection. Tariff barriers were raised, state aid was provided and industry revived sufficiently to turn these nations into successful competitors of Britain. This process was termed by Kropotkin as "the consecutive development of nations" (although he underestimated the importance of state aid in this process). [Fields, Factories and Workshops, p. 49] No nation, he argued, would let itself become specialised as the provider of raw materials or the manufacturer of a few commodities but would diversify into many different lines of production. Obviously no national ruling class would want to see itself be dependent on another and so industrial development was essential (regardless of the wishes of the general population). Thus a nation in such a situation "tries to emancipate herself from her dependency . . . and rapidly begins to manufacture all those goods she used to import." [Op. Cit., p. 32]

Protectionism may have violated the laws of neo-classical economics, but it proved essential for industrialisation. While, as Kropotkin argued, protectionism ensured "the high profits of those manufacturers who do not improve their factories and chiefly reply upon cheap labour and long hours," it also meant that these profits would be used to finance industry and develop an industrial base. [Op. Cit., p. 41] Without this state aid, it is doubtful that these countries would have industrialised (as Kaldor notes, "all the present 'developed' or 'industrialised' countries established their industries through 'import substitution' by means of protective tariffs and/or differential subsidies." [Op. Cit., p. 127]).

Within the industrialising country, the usual process of competition driving out competitors continued. More and more markets became dominated by big business (although, as Kropotkin stressed, without totally eliminating smaller workshops within an industry and even creating more around them). Oligopoly marked the national economies of the most advanced capitalist nations as a means of creating "an amalgamation of capitalists for the purpose of dominating the market, not for cheapening the technical process." [Kropotkin, Op. Cit., p. 354] Indeed, as Maximoff stressed, the "specific character of Imperialism is . . . the concentration and centralisation of capital in syndicates, trusts and cartels, which . . . have a decisive voice, not only in the economic and political life of their countries, but also in the life of the nations of the worlds a whole." [Program of Anarcho-Syndicalism, p. 10] The modern multi-national and transnational corporations are the latest expression of this process. Simply put, the size of big business was such that it had to expand internationally as their original national markets were not sufficient and to gain further advantages over their competitors.

Faced with high tariff barriers and rising international competition, industry responded in two ways: export of capital and increased concentration of capital.

The latter was essential to gain an advantage against foreign competitors and dominate the international market as they had dominated the national one. So the imperialist form of capitalism sees the rise of big business and big finance.

In addition to the export of finished goods, capital (investment, venture, and finance capital) is also exported. This export of capital was an essential way of beating protectionism (and even reap benefits from it) and gain a foothold in foreign markets ("protective duties have no doubt contributed . . . towards attracting German and English manufacturers to Poland and Russia" [Kropotkin, Op. Cit., p. 41]). In addition, it allowed access to cheap labour and raw materials by placing capital in foreign lands As part of this process colonies were seized to increase the size of "friendly" markets and, of course, allow the easy export of capital into areas with cheap labour and raw materials. These two processes are both driven by the needs of capital to accumulate.

This form of imperialism, which arose in the late nineteenth century, was based on the creation of larger and larger businesses and the creation of colonies across the globe by the industrialised nations. Direct conquest had the advantage of opening up more of the planet for the capitalist market, thus leading to more trade and exploitation of raw materials and labour (and often slavery as well). This gave a massive boost to both the state and the industries of the invading country in terms of new profits, so allowing an increase in the number of capitalists and other social parasites that could exist in the developed nation. As Kropotkin noted at the time, "British, French, Belgian and other capitalists, by means of the ease with which they exploit countries which themselves have no developed industry, today control the labour of hundreds of millions of those people in Eastern Europe, Asia, and Africa. The result is that the number of those people in the leading industrialised countries of Europe who live off the work of others doesn't gradually decrease at all. Far from it." ["Anarchism and Syndicalism", in Black Flag no. 210, p. 26]

As well as gaining access to raw materials, imperialism allows the dominating nation to gain access to markets for its goods. By having an empire, products produced at home can be easily dumped into foreign markets with less developed industry, undercutting locally produced goods and consequently destroying the local economy (and so potential competitors) along with the society and culture based on it. Empire building is a good way of creating privileged markets for one's goods. By eliminating foreign competition, the imperialist nation's capitalists can charge monopoly prices in the dominated country, so ensuring high profit margins for capitalist business. This adds with the problems associated with the over-production of goods:

"The workman being unable to purchase with their wages the riches they are producing, industry must search for new markets elsewhere, amidst the middle classes of other nations. It must find markets, in the East, in Africa, anywhere; it must increase, by trade, the number of its serfs in Egypt, in India, on the Congo. But everywhere it finds competitors in other nations which rapidly enter into the same line of industrial development. And wars, continuous wars, must be fought for the supremacy in the world-market -- wars for the possession of the East, wars for getting possession of the seas, wars for the right of imposing heavy duties on foreign merchandise." [Kropotkin, Kropotkin's Revolutionary Pamphlets, pp. 55-6]

This process of expansion into non-capitalist areas also helps Capital to weather both the subjective and objective economic pressures upon it which cause the business cycle (see section C.7 -- "What causes the capitalist business cycle?" for more on these). As wealth looted from less industrially developed countries is exported back to the home country, profit levels can be protected both from working-class demands and from any relative decline in surplus-value production caused by increased capital investment (see section C.2 for more on surplus value). In fact, imperialism often allowed the working class of the invading country to receive improved wages and living conditions as the looted wealth was imported into the country and workers could fight for, and win, improvements that otherwise would have provoked intense class conflict. And as the sons and daughters of the poor emigrated to the colonies to make a living for themselves on stolen land, the wealth extracted from those colonies helped to overcome the reduction in the supply of labour at home which would increase its market price. This loot also helps reduce competitive pressures on the nation's economy. Of course, these advantages of conquest cannot totally stop the business cycle nor eliminate competition, as the imperialistic nations soon discovered.

Therefore, the "classic" form of imperialism based on direct conquest and the creation of colonies had numerous advantages for the imperialist nations and the big business which their states represented.

These dominated nations were, in the main, pre-capitalist societies. The domination of imperialist powers meant the importation of capitalist social relationships and institutions into them, so provoking extensive cultural and physical resistance to these attempts of foreign capitalists to promote the growth of the free market. However, peasants', artisans' and tribal people's desires to be "left alone" was never respected, and "civilisation" was forced upon them "for their own good." As Kropotkin realised, "force is necessary to continually bring new 'uncivilised nations' under the same conditions [of wage labour]." [Anarchism and Anarchist Communism, p. 53] Anarchist George Bradford also stresses this, arguing that we "should remember that, historically, colonialism, bringing with it an emerging capitalist economy and wage system, destroyed the tradition economies in most countries. By substituting cash crops and monoculture for forms of sustainable agriculture, it destroyed the basic land skills of the people whom it reduced to plantation workers." [How Deep is Deep Ecology, p. 40] Indeed, this process was in many ways similar to the development of capitalism in the "developed" nations, with the creation of a class of landless workers who forms the nucleus of the first generation of people given up to the mercy of the manufacturers (see section F.8.3 for details).

However, this process had objective limitations. Firstly, the expansion of empires had the limitation that there were only so many potential colonies out there. This meant that conflicts over markets and colonies was inevitable (as the states involved knew, and so they embarked on a policy of building larger and larger armed forces). As Kropotkin argued before the First World War, the real cause of war at the time was "the competition for markets and the right to exploit nations backward in industry." [quoted by Martin Miller, Kropotkin, p. 225]

Secondly, the creation of trusts, the export of goods and the import of cheap raw materials cannot stop the business cycle nor "buy-off" the working class indefinitely (i.e. the excess profits of imperialism will never be enough to grant more and more reforms and improvements to the working class in the industrialised world). Thus the need to overcome economic slumps propelled business to find new ways of dominating the market, up to and including the use of war to grab new markets and destroy rivals. Moreover, war was a good way of side tracking class conflict at home -- which, let us not forget, had been reaching increasingly larger, more militant and more radical levels in all the imperialist nations (see John Zerzan's "Origins and Meaning of WWI" in his Elements of Refusal).

Thus this first phase of imperialism began as the growing capitalist economy started to reach the boundaries of the nationalised market created by the state within its own borders. Imperialism was then used to expand the area that could be colonised by the capital associated with a given nation-state. This stage ended, however, once the dominant powers had carved up the planet into different spheres of influence and there was nowhere new left to expand. In the competition to increase sales and access to cheap raw materials and foreign markets, nation-states came into conflict with each other. As it was obvious that a conflict was brewing, the major European countries tried to organise a "balance of power." This meant that armies were built and navies created to frighten other countries and so deter war. Unfortunately, these measures were not enough to countermand the economic and power processes at play. War did break out, a war over empires and influence, a war, it was claimed, that would end all wars. As we now know, of course, it did not because it did not fight the root cause of modern wars, capitalism.

After the First World War, the identification of nation-state with national capital became even more obvious, and can be seen in the rise of extensive state intervention to keep capitalism going -- for example, the rise of Fascism in Italy and Germany and the efforts of "national" governments in Britain and the USA to "solve" the economic crisis of the Great Depression. However, these attempts to solve the problems of capital did not work. The economic imperatives at work before the first world war had not gone away. Big business still needed markets and raw materials and the statification of industry under fascism only aided to the problems associated with imperialism. Another war was only a matter of time and when it came most anarchists, as they had during the first world war, opposed both sides and called for revolution:

"the present struggle is one between rival Imperialisms and for the protection of vested interests. The workers in every country, belonging to the oppressed class, have nothing in common with these interests and the political aspirations of the ruling class. Their immediate struggle is their emancipation. Their front line is the workshop and factory, not the Maginot Line where they will just rot and die, whilst their masters at home pile up their ill-gotten gains." ["War Commentary", quoted Mark Shipway, Anti-Parliamentary Communism, p. 170]

After the Second World War, the European countries yielded to pressure from the USA and national liberation movements and grated many former countries "independence" (often after intense conflict). As Kropotkin predicted, such social movements were to be expected for with the growth of capitalism "the number of people with an interest in the capitulation of the capitalist state system also increases." [Peter Kropotkin, "Anarchism and Syndicalism", in Black Flag no. 210, p. 26] Unfortunately these "liberation" movements transformed mass struggle from a potential struggle against capitalism into movements aiming for independent capitalist nation states.

Not, we must stress, that the USA was being altruistic in its actions, independence for colonies weakened its rivals as well as allowing US capital access to those markets.

This process was accompanied by capital expanding even more beyond the nation-state into multinational corporations. The nature of imperialism and imperialistic wars has changed accordingly. In addition, the various successful struggles for National Liberation ensured that imperialism had to change itself in face of popular resistance. These two factors ensured that the old form of imperialism was replaced by a new system of "neo-colonialism" in which newly "independent" colonies are forced, via political and economic pressure, to open their borders to foreign capital. If a state takes up a position which the imperial powers consider "bad for business," action will be taken, from sanctions to outright invasion. Keeping the world open and "free" for capitalist exploitation has been America's general policy since 1945. It springs directly from the expansion requirements of private capital and so cannot be fundamentally changed. However, it was also influenced by the shifting needs resulting from the new political and economic order and the rivalries existing between imperialist nations (particularly those of the Cold War). As such, which method of intervention and the shift from direct colonialism to neo-colonialism (and any "anomalies") can be explained by these conflicts.

Within this basic framework of indirect imperialism, many "developing" nations did manage to start the process of industrialising. Partly in response to the Great Depression, some former colonies started to apply the policies used so successfully by imperialist nations like Germany and America in the previous century. They followed a policy of "import substitution" which meant that they tried to manufacture goods like, for instance, cars that they had previously imported. Without suggesting this sort of policy offered a positive alternative (it was, after all, just local capitalism) it did have one big disadvantage for the imperialist powers, it tended to deny them both markets and cheap raw materials (the current turn towards globalisation was used to break these policies). As such, whether a nation pursued such policies was dependent on the costs involved to the imperialist power involved.

So instead of direct rule over less developed nations (which generally proved to be too costly, both economically and politically), indirect forms of domination were now preferred, with force resorted to only if "business interests" are threatened. Examples of new-style imperialistic wars include Vietnam, the US support for the Contras in Nicaragua and the Gulf War. Political and economic power (e.g. the threat of capital flight or sanctions) is used to keep markets open for corporations based in the advanced nations, with military intervention being used only when required (although the threat of it is always there). Moreover, the competition between the USA and the USSR also had an impact. On the one hand, acts of imperial power could be justified in fighting "Communism" (for the USA) or "US imperialism" (for the USSR). On the other, fear of provoking a war or driving developing nations into the hands of the other side allowed more leeway for developing nations to pursue policies like import substitution. However, force always was the ultimate solution for imperialism, just as it had been previously.

Least it be considered that we are being excessive in our analysis, let us not forget that the US "has intervened well over a hundred times in the internal affairs of other nations since 1945. The rhetoric has been that we have done so largely to preserve or restore freedom and democracy, or on behalf of human rights. The reality has been that [they] . . . have been consistently designed and implemented to further the interests of US (now largely transnational) corporations, and the elites both at home and abroad who profit from their depredations." [Henry Rosemont, Jr., "U.S. Foreign Policy: the Execution of Human Rights", pp. 13-25, Social Anarchism, no. 29 p. 13] This has involved the overthrow of democratically elected governments (such as in Iran, 1953; Guatemala, 1954; Chile, 1973) and their replacement by reactionary right-wing dictatorships (usually involving the military). As George Bradford argues, "[i]n light of [the economic] looting [by corporations under imperialism], it should become clearer . . . why nationalist regimes that cease to serve as simple conduits for massive U.S. corporate exploitation come under such powerful attack -- Guatemala in 1954, Chile in 1973 . . . Nicaragua [in the 1980s] . . . [U.S.] State Department philosophy since the 1950s has been to rely on various police states and to hold back 'nationalistic regimes' that might be more responsive to 'increasing popular demand for immediate improvements in the low living standards of the masses,' in order to 'protect our resources' -- in their countries!" [How Deep is Deep Ecology?, p. 62]

Capital investments in developing nations have increased steadily over the years, with profits from the exploitation of cheap labour flowing back into the pockets of the corporate elite in the imperialist nation, not to its citizens as a whole (though there are sometimes temporary benefits to other classes, as discussed below). In addition, other countries are "encouraged" to buy imperialist countries' goods (often in exchange for "aid", typically military "aid") and open their markets to the dominant power's companies and their products. Imperialism is the only means of defending the foreign investments of a nation's capitalist class, and by allowing the extraction of profits and the creation of markets, it also safeguards the future of private capital.

So, imperialism remained intact, as Western (mostly U.S. and its junior partner, the U.K.) governments continue to provide lavish funds to petty right-wing despots under the pseudonym, "foreign aid". The express purpose of this foreign aid, noble-sounding rhetoric about freedom and democracy aside, is to ensure that the existing world order remains intact. "Stability" has become the watchword of modern imperialists, who see any indigenous popular movements as a threat to the existing world order.

Foreign aid channelled public funds to the ruling classes in Third World countries via home based transnational companies. The U.S. and other Western powers provide much-needed war material and training for the military of these governments, so that they may continue to keep the business climate friendly to foreign investors (that means tacitly and overtly supporting fascism around the globe). "Foreign aid", basically, is when the poor people of rich countries give their money to the rich people of poor countries to ensure that the investments of the rich people of rich countries is safe from the poor people of poor countries!

(Needless to say, the owners of the companies providing this "aid" also do very well out of it.)

Thus, the Third World sags beneath the weight of well-funded oppression, while its countries are sucked dry of their native wealth, in the name of "development" and in the spirit of "democracy and freedom". The United States leads the West in its global responsibility (another favourite buzzword) to ensure that this peculiar kind of "freedom" remains unchallenged by any indigenous movements. Thus, the fascist regimes remain compliant and obedient to the West, capitalism thrives unchallenged, and the plight of people everywhere simply worsens. And if a regime becomes too "independent", military force always remains an option (as can be seen from the 1990 Gulf War).

Thus, imperialism changes as capitalism changes. The history of capitalism generally begins with mercantilism, the state aided destruction of petit-bourgeois commodity production (artisans, guilds and peasants) by capitalist manufacturing. Once capitalist industry has found its feet, free competition ("free trade") is embraced, which naturally progresses to a concentration of production (the rise of big business), which continually strive towards monopolies -- although it rarely reaches that stage (oligopolistic competition reigns). Major economic decisions are made by a few heads of major companies and corporations. Big business, while appearing to be contrary to the foundations of capitalism, is, in fact, its most developed form -- with the world turned more and more into one big factory, under one management hierarchy. Free association is replaced by top-down orders and industrial development is distorted by the need to maintain and extend corporate power and profits.

With the increasing globalisation of big business and markets, capitalism (and so imperialism) is on the threshold of a new transformation. Just as direct imperialism transformed into in-direct imperialism, so in-direct imperialism is transforming into a global system of government which aims to codify the domination of corporations over governments. This process is often called "globalisation" and we discuss it in section D.5.3. First, however, we need to discuss non-private capitalist forms of imperialism associated with the Stalinist regimes and we do that in the next section.

D.5.2 Is imperialism just a product of private capitalism?

While we are predominantly interested in capitalist imperialism, we cannot avoid discussing the activities of the so-called "socialist" nations (such as the Soviet Union, China, etc.). Given that imperialism has an economic base caused in developed capitalism by, in part, the rise of big business organised on a wider and wider scale, we should not be surprised that the state capitalist ("socialist") nations are/were also imperialistic. As the state-capitalist system expresses the logical end point of capital concentration (the one big firm) the same presses that apply to big business will also apply to the state capitalist nation (see last section).

Given this, it comes as no surprise that the state-capitalist countries also participated in imperialist activities, adventures and wars, although on a lesser scale and for slightly different reasons. As can be seen by Russia's ruthless policy towards her satellites, Soviet imperialism was more inclined to the defence of what she already had and the creation of a buffer zone between herself and the West. This is not to deny that the ruling elite of the Soviet Union did not try to exploit the countries under its influence. For example, in the years after the end of the Second World War, the Eastern Block countries paid the U.S.S.R. millions of dollars in reparations. As in private capitalism, the "satellite states were regarded as a source of raw materials and of cheap manufactured goods. Russia secured the satellites exports at below world prices. And it exported to them at above world prices." [Andy Anderson, Hungary '56, pp. 25-6]

The Soviet elite also aided "anti-imperialist" movements when it served their interests and placed them within the Soviet sphere of influence (along with US pressure which closed off other options). Once the Stalinist parties had replaced the local ruling class, trade relations were formalised between the so-called "socialist" nations for the benefit of both the local and Russian rulers. In a similar way, and for identical needs, the Western Imperialist powers supported murderous local capitalist and feudal elites in their struggle against their own working classes, arguing that it was supporting "freedom" and "democracy" against Soviet aggression.

Needless to say, the form and content of the state capitalist domination of its satellite countries was dependent on its own economic and political structure and needs, just as traditional capitalist imperialism reflected its needs and structures. Part of the difference was, of course, the need to plunder these countries of commodities to make up for shortages caused by central planning (in contrast, capitalist imperialism tended to export goods).

Just as capitalist domination saw the transformation of the satellite's countries social relations from pre-capitalist forms tin favour of capitalist ones, the domination of "socialist" nations meant the elimination of traditional bourgeois social relations in favour of state capitalist ones. As such, the nature and form of imperialism was fundamentally identical and served the interests of the appropriate ruling class in each case.

Therefore, imperialism is not limited to states based on private capitalism -- the state capitalist regimes have also been guilty of it. This is to be expected, as both are based on minority rule, the exploitation and oppression of labour and the need to expand the resources available to it.

D.5.3 Does globalisation mean the end of imperialism?

No. While it is true that the size of multinational companies has increased along with the mobility of capital, the need for nation-states to serve corporate interests still exists. With the increased mobility of capital, i.e. its ability to move from one country and invest in another easily, and with the growth in international money markets, we have seen what can be called a "free market" in states developing. Corporations can ensure that governments do as they are told simply by threatening to move elsewhere (which they will do anyway, if it results in more profits).

Therefore, as Howard Zinn stresses, "it's very important to point out that globalisation is in fact imperialism and that there is a disadvantage to simply using the term 'globalisation' in a way that plays into the thinking of people at the World Bank and journalists . . . who are agog at globalisation. They just can't contain their joy at the spread of American economic and corporate power all over the world. . . it would be very good to puncture that balloon and say 'This is imperialism.'" [Bush Drives us into Bakunin's Arms]

Globalisation, like the forms of imperialism that came before it, cannot be understood unless its history is known. The current process of increasing international trade, investment and finance markets came about after the late 60s and early 1970s. Increased competition from a re-built Europe and Japan challenged US domination combined with working class struggle across the globe to leave the capitalist world feeling the strain. Dissatisfaction with factory and office life combined with other social movements (such as the women's movement, anti-racist struggles, anti-war movements and so on) which demanded more than capitalism could provide. The near revolution in France, 1968, is the most famous of these struggles but it occurred all across the globe.

For the ruling class, the squeeze on profits and authority from ever-increasing wage demands, strikes, stoppages, boycotts, squatting, protests and other struggles meant that a solution had to be found and the working class disciplined (and profits regained). One part of the solution was to "run away" and so capital flooded into certain areas of the "developing" world. This increased the trends towards globalisation. Another solution was the embrace of Monetarism and tight money (i.e. credit) policies. This resulted in increases in the interest rate, which helped deepen the recessions of the early 1980s, which broke the back of working class resistance in the U.K. and U.S.A. High unemployment helped to discipline a rebellious working class and the new mobility of capital meant a virtual "investment strike" against nations which had a "poor industrial record" (i.e. workers who were not obedient wage slaves).

Moreover, as in any economic crisis, the "degree of monopoly" (i.e. the dominance of large firms) in the market increased as weaker firms went under and others merged to survive. This enhancing the tendencies toward concentration and centralisation which always exist in capitalism, so ensuring an extra thrust towards global operations as the size and position of the surviving firms required wider and larger markets to operate in.

Internationally, another crisis played its role in promoting globalisation. This was the Debit Crisis of the late 1970s and early 1980s. For many countries Debt plays a central part for the western powers in dictating how their economies should be organised. The debt crisis proved an ideal leverage for the western powers to force "free trade" on the "third world." This occurred when third world countries faced with falling incomes and rising interest rates defaulted on their loans (loans that were mainly given as a bribe to the ruling elites of those countries and used as a means to suppress the working people of those countries -- who now, ironically, have to repay them!).

Before this, as noted in the section D.5.1, many countries had followed a policy of "import substitution." This tended to create new competitors who could deny transnational corporations both markets and cheap raw materials. Instead of military force, the governments of the west sent in the IMF and World Bank (WB). The loans required by "developing" nations in the face of recession and rising debt repayments had little choice but to agree to an IMF-designed economic reform programme. If they refused, not only were they denied IMF funds, but also WB loans. Private banks and lending agencies would also pull out, as they lent under the cover of the IMF -- the only body with the power to both underpin loans and squeeze repayment from debtors.

These policies meant introducing austerity programmes which, in turn, meant cutting public spending, freezing wages, restricting credit, allowing foreign multinational companies to cherry pick assets at bargain prices, and passing laws to liberalise the flow of capital into and out of the country. Not surprisingly, the result was disastrous for the working population, but the debts were repaid and both local and international elites did very well out of it.

Thus economic factors played a key role in the process. Moreover, the size of corporations meant that they could not help working on a multinational level (and could swallow up local industry). The global market needed the global firm (and vice versa). By working on a global level, these companies could invest in nations which could ensure a favourable business climate by repressing workers. So while workers in the West suffered repression and hardship, the fate of the working class in the "developing" world was considerably worse.

Thus globalisation is, like the forms of imperialism that preceded it, was a response to both objective economic forces and the class struggle. Moreover, like the forms that came before, it is based on the economic power of corporations based in a few developed nations and political power of the states that are the home base of these corporations.

So, for better or for worse, globalisation has become the latest buzz word to describe the current stage of capitalism and so we shall use it here. It use does have positive two side effects though. Firstly, it draws attention to the increased size and power of transnational corporations and their impact on global structures of governance and the nation state. Secondly, it allows anarchists and other protesters to raise the issue of international solidarity and a globalisation from below which respects diversity and is based on people's needs, not profit.

After all, as Rebecca DeWitt stresses, anarchism and the WTO "are well suited opponents and anarchism is benefiting from this fight. The WTO is practically the epitome of an authoritarian structure of power to be fought against. People came to Seattle because they knew that it was wrong to let a secret body of officials make policies unaccountable to anyone except themselves. A non-elected body, the WTO is attempting to become more powerful than any national government . . . For anarchism, the focus of global capitalism couldn't be more ideal." ["An Anarchist Response to Seattle," pp. 5-12, Social Anarchism, no. 29, p. 6]

While transnational companies are, perhaps, the most well-known representatives of this process of globalisation, the power and mobility of modern capitalism can be seen from the following figures. From 1986 to 1990, foreign exchange transactions rose from under $300 billion to $700 billion daily and were expected to exceed $1.3 trillion in 1994. The World Bank estimates that the total resources of international financial institutions at about $14 trillion. To put some kind of perspective on these figures, the Balse-based Bank for International Settlement estimated that the aggregate daily turnover in the foreign exchange markets at nearly $900 billion in April 1992, equal to 13 times the Gross Domestic Product of the OECD group of countries on an annualised basis [Financial Times, 23/9/93]. In Britain, some $200-300 billion a day flows through London's foreign exchange markets. This is the equivalent of the UK's annual Gross National Product in two or three days. Needless to say, since the early 1990s, these amounts have grown to even higher levels (daily currency transactions have risen from a mere $80 billion in 1980 to $1.26 billion in 1995. In proportion to world trade, this trading in foreign exchange rose from a ration of 10:1 to nearly 70:1 [Mark Weisbrot, Globalisation for Whom?]).

Little wonder that a Financial Times special supplement on the IMF stated that "Wise governments realise that the only intelligent response to the challenge of globalisation is to make their economies more acceptable" [Op. Cit.] More acceptable to business, that is, not their populations. As Chomsky puts it, "free capital flow creates what's sometimes called a 'virtual parliament' of global capital, which can exercise veto power over government policies that it considers irrational. That means things like labour rights, or educational programmes, or health, or efforts to stimulate the economy, or, in fact, anything that might help people and not profits (and therefore irrational in the technical sense)." [Rogue States, pp. 212-3]

This means that under globalisation, states will compete with each other to offer the best deals to investors and transnational companies -- such as tax breaks, union busting, no pollution controls, and so forth. The effects on the countries' ordinary people will be ignored in the name of future benefits (not so much pie in the sky when you die, more like pie in the future, maybe, if you are nice and do what you are told). For example, such an "acceptable" business climate was created in Britain, where "market forces have deprived workers of rights in the name of competition" [Scotland on Sunday, 9/1/95] and the number of people with less than half the average income rose from 9% of the population in 1979 to 25% in 1993. The share of national wealth held by the poorer half of the population has fallen from one third to one quarter. However, as would be expected, the number of millionaires has increased, as has the welfare state for the rich, with the public's tax money being used to enrich the few via military Keynesianism, privatisation and funding for Research and Development. Like any religion, the free-market ideology is marked by the hypocrisy of those at the top and the sacrifices required from the majority at the bottom.

In addition, the globalisation of capital allows it to play one work force against another. For example, General Motors plans to close two dozen plants in the United States and Canada, but it has become the largest employer in Mexico. Why? Because an "economic miracle" has driven wages down. Labour's share of personal income in Mexico has "declined from 36 percent in the mid-1970's to 23 percent by 1992." Elsewhere, General Motors opened a $690 million assembly plant in the former East Germany. Why? Because there workers are willing to "work longer hours than their pampered colleagues in western Germany" (as the Financial Times put it) at 40% of the wage and with few benefits. [Noam Chomsky, World Orders, Old and New, p. 160]

This mobility is a useful tool in the class war. There has been "a significant impact of NAFTA on strikebreaking. About half of union organising efforts are disrupted by employer threats to transfer production abroad, for example . . . The threats are not idle. When such organising drives succeed, employers close the plant in whole or in part at triple the pre-NAFTA rate (about 15 percent of the time). Plant-closing threats are almost twice as high in more mobile industries (e.g. manufacturing vs. construction)." [Rogue States, pp. 139-40] This process is hardly unique to America, and takes place all across the world (including in the "developing" world itself). This process has increased the bargaining power of employers and has helped to hold wages down (while productivity has increased). In the US, the share of national income going to corporate profits increased by 3.2 percentage points between the last business cycle (1989) and 1998. This represents a significant redistribution of the economic pie. [Mark Weisbrot, Op. Cit.] Hence the need for international workers' organisation and solidarity (as anarchists have been arguing since Bakunin).

This means that such agreements such as NAFTA and the recently shelved (but definitely not forgotten) Multilateral Agreement on Investment (MAI) weaken considerably the governments of nation-states -- but only in one area, the regulation of business. Such agreements restrict the ability of governments to check capital flight, restrict currency trading, eliminate environment and labour protection laws, ease the repatriation of profits and anything else that might impede the flow of profits or reduce corporate power. Indeed, under NAFTA, corporations can sue governments if they think the government is hindering its freedom on the market. Disagreements are settled by unelected panels outside the control of democratic governments. As such, such agreements represent an increase in corporate power and ensure that states can only intervene when it suits corporations, not the general public.

The ability of corporations to sue governments was enshrined in chapter 11 of NAFTA. In a small town in the Mexican state of San Luis Potosi, a California firm -- Metalclad -- a commercial purveyor of haazardous wastes, bought an abandoned dump site nearby. It proposed to expand on the dumpsite and use it to dump toxic waste material. The people in the neighbourhood of the dump site protested. The municipality, using powers delegated to it by the state, rezoned the site and forbid Metalclad to extend its land holdings. Metalclad, under Chapter 11 of the NAFTA, then sued the Mexican government for damage to its profit margins and balance sheet as a result of being treated unequally by the people of San Luis Potosi. A trade panel, convened in Washington, agreed with the company. In Canada, the Ethyl corporation sued when the government banned its gasoline additive as a health hazard. The government settled "out of court" to prevent a public spectacle of a corporation overruling the nation's Parliament.

NAFTA and other Free Trade agreements are designed for corporations and corporate rule. Chapter 11 was not enshrined in the NAFTA in order to make a better world for the people of Canada, any more than for the people of San Luis Potosi but, instead, for the capitalist elite.

This is an inherently imperialist situation, which will "justify" further intervention in the "developing" nations by the US and other imperialist nations, either through indirect military aid to client regimes or through outright invasion, depending on the nature of the "crisis of democracy" (a term used by the Trilateral Commission to characterise popular uprisings and a politicising of the general public).

However, force is always required to protect private capital. Even a globalised capitalist company still requires a defender. After all, "[a]t the international level, U.S. corporations need the government to insure that target countries are 'safe for investment' (no movements for freedom and democracy), that loans will be repaid, contracts kept, and international law respected (but only when it is useful to do so)." [Henry Rosemont, Jr., Op. Cit., p. 18]

Therefore it makes sense for corporations to pick and choose between states for the best protection, blackmailing their citizens to pay for the armed forces via taxes. For the foreseeable future, America seems to be the global rent-a-cop of choice. On a local level, capital will move to countries whose governments supply what it demands and punish those which do not. Therefore, far from ending imperialism, globalisation will see it continue, but with one major difference: the citizens in the imperialist countries will see even fewer benefits from imperialism than before, while, as ever, still having to carry the costs.

So, in spite of claims that governments are powerless in the face of global capital, we should never forget that state power has increased drastically in one area -- in state repression against its own citizens. No matter how mobile capital is, it still needs to take concrete form to generate surplus value. Without wage salves, capital would not survive. As such, it can never permanently escape from its own contradictions -- wherever it goes, it has to create workers who have a tendency to disobey and do problematic things like demand higher wages, better working conditions, go on strike and so on (indeed, this fact has seen companies based on "developing" nations move to less "developed" to find more compliant labour).

This, of course, necessitates a strengthening of the state in its role as protector of property and as a defence against any unrest provoked by the inequalities, impoverishment and despair caused by globalisation (and, of course, the hope, solidarity and direct action generated by that unrest within the working class). Hence the rise of the neo-liberal consensus in both Britain and the USA saw an increase in the number of police, police powers and in laws directed against the labour and radical movements. As Malatesta argued:

"[L]iberalism, is in theory a kind of anarchy without socialism, and therefore is simply a lie, for freedom is not possible without equality, and real anarchy cannot exist without solidarity, without socialism. The criticism liberals direct at government consists of wanting to deprive it of some of its functions and to call upon the capitalists to fight it out among themselves, but it cannot attack the repressive functions which are of its essence: for with the gendarme the property owner could not exist, indeed the government's powers of repression must perforce increase as free competition results in more discord and inequality." [Anarchy, p. 46]

As such, it would be a mistake (as many in the anti-globalisation movement do) to contrast the market to the state. State and capital are not opposed to each other -- in fact, the opposite is the case. The modern state exists to protect capitalist rule, just as every state exists to defend minority rule, and it is essential for nation states to attract and retain capital within their borders to ensure their revenue by having a suitably strong economy to tax. Globalisation is a state-led initiative whose primary aim is to keep the economically dominant happy. The states which are being "undermined" by globalisation are not horrified by this process as certain protestors are, which should give pause for thought. States are complicit in the process of globalisation -- unsurprisingly, as they represent the ruling elites who favour and benefit from globalisation.

Moreover, with the advent of a "global market" under GATT, corporations still need politicians to act for them in creating a "free" market which best suits their interests. Therefore, by backing powerful states, corporate elites can increase their bargaining powers and help shape the "New World Order" in their own image.

Governments may be, as Malatesta put it, the property owners gendarme, but they can be influenced by their subjects, unlike multinationals. NAFTA was designed to reduce this influence even more. Changes in government policy reflect the changing needs of business, modified, of course, by fear of the working population and its strength. Which explains globalisation -- the need for capital to strengthen its position vis-a-vis labour by pitting one labour force against -- and our next step, namely to strengthen and globalise working class resistance. Only when it is clear that the costs of globalisation -- in terms of strikes, protests, boycotts, occupations and so on -- is higher than potential profits will business turn away from it. Only international working class direct action and solidarity will get results. Until that happens, we will see governments co-operating in the process of globalisation.

To sum up, globalisation will see imperialism change as capitalism itself changes. The need for imperialism remains, as the interests of private capital still need to be defended against the dispossessed. All that changes is that the governments of the imperialistic nations become even more accountable to capital and even less to their populations.

D.5.4 What is the relationship between imperialism and the social classes within capitalism?

The two main classes within capitalist society are, as we indicated in section B.7, the ruling class and the working class. The grey area between these two classes is sometimes called the middle class. As would be expected, different classes have different positions in society and, therefore, different relationships with imperialism (as befitting their difference social positions within capitalism).

Moreover, we have to also take into account the differences resulting from the relative positions of the nations in question in the world economic and political systems. The ruling class in imperialist nations will not have identical interests as those in the dominated ones, for example. As such, our discussion will have indicate these differences as well.

The relationship between the ruling class and imperialism is quite simple: It is in favour of it when it supports its interests and when the benefits outweigh the costs. Therefore, for imperialist countries, the ruling class will always be in favour of expanding their influence and power as long as it pays dividends. If the costs outweigh the benefits, of course, sections of the ruling class will argue against imperialist adventures and wars (as, for example, elements of the US elite did when it was clear that they would lose both the Vietnam war and, perhaps, the class war at home by continuing it).

Moreover, there are strong economic forces at work as well. Due to capital's need to grow in order to survive and compete on the market, find new markets and raw materials, it needs to expand (as we discussed in section D.5). Consequently, it needs to conquer foreign markets and gain access to cheap raw materials and labour. As such, a nation with a powerful capitalist economy will need an aggressive and expansionist foreign policy, which it achieves by buying politicians, initiating media propaganda campaigns, funding right-wing think tanks, and so on, as previously described.

Thus the ruling class benefits from, and so usually supports, imperialism -- only, we stress, when the costs out-weight the benefits will we see members of the elite oppose it. Which, of course, explains the elites support for what is termed "globalisation." Needless to say, the ruling class has done very well over the last few decades. For example, in the US, the gaps between rich and poor and between the rich and middle income reaching their widest point on record in 1997 (from the Congressional Budget Office study on Historic Effective Tax Rates 1979-1997). The top 1% saw their after-tax incomes rise by $414,200 between 1979-97, the middle fifth by $3,400 and the bottom fifth fell by -$100. The benefits of globalisation are concentrated at the top, as is to be expected (indeed, almost all of the income gains from economic growth between 1989 and 1998 accrued to the top 5% of American families).

Needless to say, the local ruling classes of the dominated nations may not see it that way. While, of course, local ruling classes do extremely well from imperialism, they need not like the position of dependence and subordination they are placed in. Moreover, the steady stream of profits leaving the country for foreign corporations cannot be used to enrich local elites even more. Just as the capitalist dislikes the state or a union limiting their power or taxing/reducing their profits, so the dominated nation's ruling class dislikes imperialist domination and will seek to ignore or escape it whenever possible. This is because "every State, in so far as it wants to live not only on paper and not merely by sufferance of its neighbours, but to enjoy real independence -- inevitably must become a conquering State." [Bakunin, Op. Cit., p. 211]

Many of the post-war imperialist conflicts were of this nature, with local elites trying to disentangle themselves from an imperialist power. Similarly, many conflicts (either fought directly by imperialist powers or funded indirectly by them) were the direct result of ensuring that a nation trying to free itself from imperialist domination did not serve as a positive example for other satellite nations. Thus the local ruling class, while benefiting from imperialism, may dislike its dependent position and, if it feels strong enough, may contest their position and gain more independence for themselves.

Which means that local ruling classes can come into conflict with imperialist ones. These can express themselves as wars of national liberation, for example, or just as normal conflicts (such as the Gulf War). As competition is at the heart of capitalism, we should not be surprised that sections of the international ruling class disagree and fight each other. As we argue in more detail in section D.7, while anarchists oppose imperialism and defend the rights of oppressed nations to resist it, we do not support national liberation movements as these are cross class alliances which aim to consolidate the local elites power and this must, by necessity, mean the subjection of working people (just as support for any nation state means). Therefore we never call for the victory of the dominated country over the imperialist. Instead we call for a victory of the workers (and peasants) of that country against both home and foreign exploiters (in effect, "no war but the class war").

The relationship between the working class and imperialism is more complex. In traditional imperialism, foreign trade and the export of capital often make it possible to import cheap goods from abroad and increase profits for the capitalist class, and in this sense, workers gain because they can improve their standard of living without necessarily coming into system-threatening conflict with their employers (i.e. struggle can win reforms which otherwise would be strongly resisted by the capitalist class). Needless to say, those workers made redundant by these cheap imports may not consider this as a benefit and, by increasing the pool of unemployment, help hold or drive down wages for the whole working population.

Moreover, capital export and military spending under imperialistic policies may lead to a higher rate of profit for capitalists and allow them to temporarily avoid recession, thus keeping employment and wages higher than would be the case otherwise. So workers benefit in this sense as well. Therefore, in imperialistic nations during economic boom times, one finds a tendency among the working class (particularly the unorganised sector) to support foreign military adventurism and an aggressive foreign policy. This is part of what is often called the "embourgeoisement" of the proletariat, or the co-optation of labour by capitalist ideology and "patriotic" propaganda.

However, as soon as international rivalry between imperialist powers becomes too intense, capitalists will attempt to maintain their profit rates by depressing wages and laying people off in their own country. Workers' real wages will also suffer if military spending goes beyond a certain point. Moreover, if militarism leads to actual war, the working class has much more to lose than to gain as they will be fighting it and making the necessary sacrifices on the "home front" in order to win it. In addition, while imperialism can improve living conditions (for a time), it cannot remove the hierarchical nature of capitalism and therefore cannot stop the class struggle, the spirit of revolt and the instinct for freedom. So, while workers in the developed nations may sometimes benefit from imperialism, such periods cannot last long and cannot, in fact, end the class struggle.

Rudolf Rocker was correct to stress the contradictory (and self-defeating) nature of working class support for imperialism:

"No doubt some small comforts may sometimes fall to the share of the workers when the bourgeoisie of their country attain some advantage over that of another country; but this always happens at the cost of their own freedom and the economic oppression of other peoples. The worker. . . participates to some extent in the profits which, without effort on their part, fall into the laps of the bourgeoisie of his country from the unrestrained exploitation of colonial peoples; but sooner or later there comes the time when these people too, wake up, and he has to pay all the more dearly for the small advantages he has enjoyed. . . . Small gains arising from increased opportunity of employment and higher wages may accrue to the workers in a successful state from the carving out of new markets at the cost of others; but at the same time their brothers on the other side of the border have to pay for them by unemployment and the lowering of the standards of labour. The result is an ever widening rift in the international labour movement . . . By this rift the liberation of the workers from the yoke of wage-slavery is pushed further and further into the distance. As long as the worker ties up his interests with those of the bourgeoisie of his country instead of with his class, he must logically also take in his stride all the results of that relationship. He must stand ready to fight the wars of the possessing classes for the retention and extension of their markets, and to defend any injustice they may perpetrate on other people . . . Only when the workers in every country shall come to understand clearly that their interests are everywhere the same, and out of this understanding learn to act together, will the effective basis be laid for the international liberation of the working class." [Anarcho-Syndicalism, p. 61]

Ultimately, any "collaboration of workers and employers . . . can only result in the workers being condemned to . . . eat the crumbs that fall from the rich man's table." [Rocker, Op. Cit., p. 60] This applies to both the imperialist and the satellite state, of course. Moreover, as we argued in section D.5.1, imperialism needs to have a strong military force available for it (without force, the imperialist state could not defend the property of its citizens or companies invested in foreign countries nor have the means to threaten satellite nations seeking an independent path). As such, the military machine must be strengthen and this "is not directed only against the external enemy; it aims much more at the internal enemy. It concerns that element of labour which has learned not to hope for anything from our institutions, that awakened part of the working people which has realised that the war of classes underlies all wars among nations, and that if war is justified at all it is the war against economic dependence and political slavery, the two dominant issues involved in the struggle of the classes." In other words, the nation "which is to be protected by a huge military force is not" that "of the people, but that of the privileged class; the class which robs and exploits the masses, and controls their lives from the cradle to the grave." [Emma Goldman, Red Emma Speaks, p. 306 and p. 302]

However, under globalisation things are somewhat different. With the increase in world trade and the signing of "free trade" agreements like NAFTA, the position of workers in the imperialist nations need not improve. For example, over the last twenty-five years, the wages -- adjusted for inflation -- of the typical American employee have actually fallen, even as the economy has grown. In other words, the majority of Americans are no longer sharing in the gains from economic growth. This is very different from the previous era, for example 1946-73, when the real wages of the typical worker rose by about 80 percent. Not that this globalisation has aided the working class in the "developing" nations. In Latin America, for example, GDP per capita grew by 75 percent from 1960-1980, whereas between 1981 and 1998 it has only risen 6 percent. [Mark Weisbrot, Dean Baker, Robert Naiman, and Gila Neta, Growth May Be Good for the Poor-- But are IMF and World Bank Policies Good for Growth?]

As Chomsky noted, "[t]o the credit of the Wall Street Journal, it points out that there's a 'but.' Mexico has 'a stellar reputation,' and it's an economic miracle, but the population is being devastated. There's been a 40 percent drop in purchasing power since 1994. The poverty rate is going up and is in fact rising fast. The economic miracle wiped out, they say, a generation of progress; most Mexicans are poorer than their parents. Other sources reveal that agriculture is being wiped out by US-subsidised agricultural imports, manufacturing wages have declines about 20 percent, general wages even more. In fact, NAFTA is a remarkable success: it's the first trade agreement in history that's succeeded in harming the populations of all three countries involved. That's quite an achievement." In the U.S., "the medium income (half above, half below) for families has gotten back now to what it was in 1989, which is below what it was in the 1970s." [Rogue States, pp. 98-9 and p. 213]

An achievement which was predicted. But, of course, while occasionally admitting that globalisation may harm the wages of workers in developed countries, it is argued that it will benefit those in the "developing" world. It is amazing how open to socialist arguments capitalists and their supporters are, as long as its not their income being redistributed! As can be seen from NAFTA, this did not happen. Faced with cheap imports, agriculture and local industry would be undermined, increasing the number of workers seeking work, so forcing down wages as the bargaining power of labour is decreased. Combine this with governments which act in the interests of capital (as always) and force the poor to accept the costs of economic austerity and back business attempts to break unions and workers resistance then we have a situation where productivity can increase dramatically while wages fall behind (either relatively or absolutely). As has been the case in both the USA and Mexico, for example.

This reversal has had much to do with changes in the global "rules of the game," which have greatly favoured corporations and weakened labour. Unsurprisingly, the North American union movement has opposed NAFTA and other treaties which empower business over labour. Therefore, the position of labour within both imperialist and dominated nations can be harmed under globalisation, so ensuring international solidarity and organisation have a stronger reason to be embraced by both sides. This should not come as a surprise, however, as the process towards globalisation was accelerated by intensive class struggle across the world and was used as a tool against the working class (see last section).

It is difficult to generalise about the effects of imperialism on the "middle class" (i.e. professionals, self-employed, small business people, peasants and so on -- not middle income groups, who are usually working class). Some groups within this strata stand to gain, others to lose (in particular, peasants who are impoverished by cheap imports of food). This lack of common interests and a common organisational base makes the middle class unstable and susceptible to patriotic sloganeering, vague theories of national or racial superiority, or fascist scape-goating of minorities for society's problems. For this reason, the ruling class finds it relatively easy to recruit large sectors of the middle class (as well as unorganised sectors of the working class) to an aggressive and expansionist foreign policy, through media propaganda campaigns. Since many in organised labour tends to perceive imperialism as being against its overall best interests, and thus usually opposes it, the ruling class is able to intensify the hostility of the middle class to the organised working class by portraying the latter as "unpatriotic" and "unwilling to sacrifice" for the "national interest."

Sadly, the trade union bureaucracy usually accepts the "patriotic" message, particularly at times of war, and often collaborates with the state to further imperialistic interests. This eventually brings them into conflict with the rank-and-file, whose interests are ignored even more than usual when this occurs. Under imperialism, like any form of capitalism, the working class will pay the bill required to maintain it.

Hence, in general, imperialism tends to produce a tightening of class lines and increasingly severe social conflict between contending interest groups, which has a tendency to foster the growth of authoritarian government (see section D.9).